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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-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, 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LETTERHEAD OF INTERCEPT GROUP]
3150 Holcomb Bridge Road
Suite 200
Norcross, Georgia 30071
April 14, 2000
Dear Shareholder:
We cordially invite you to attend the Annual Meeting of Shareholders of The
InterCept Group, Inc. to be held on May 15, 2000 at 9:00 a.m. local time at
InterCept's corporate headquarters at the above address. 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 for year ending December 31, 2000;
3. amend InterCept's 1996 Stock Option Plan to increase the shares reserved
for issuance thereunder; and
4. 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, 1999 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 2000 Annual Meeting of Shareholders of InterCept will be held at the
following place and time:
Date: May 15, 2000
Time: 9:00 a.m. local time
Place: The InterCept Group, Inc.
3150 Holcomb Bridge Road
Suite 200
Norcross, Georgia
The purposes of the Annual Meeting are:
1. to elect two directors;
2. to ratify the appointment of our independent accountants;
3. to amend our stock option plan to increase the number of shares reserved
for issuance under the plan; and
4. 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 14, 2000
- --------------------------------------------------------------------------------
The Board of Directors has fixed the close of business on March 20, 2000 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 InterCept Group corporate offices are 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
1, 2000.
1
<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 MAY 15, 2000
______________________________________________________
This Proxy Statement and the accompanying proxy card are being mailed,
beginning on or about April 14, 2000, to holders of The InterCept Group, Inc.'s
common stock in connection with the solicitation of proxies by the Board of
Directors for the 2000 Annual Meeting of Shareholders.
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 14, 2000.
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VOTING PROCEDURES
Your vote is very important. Your shares can only be voted at the Annual
Meeting if you are present or if we have received 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 as directors to serve
--------------
on InterCept's Board of Directors, FOR Proposal 2 to ratify the appointment of
--------------
Arthur Andersen LLP as InterCept's independent public accountants for the year
ending December 31, 2000, and FOR Proposal 3 to amend InterCept's 1996 Stock
--------------
Option Plan to increase the number of shares reserved for issuance.
Who can vote? Shareholders as of the close of business on March 20, 2000 are
entitled to vote. On that day, 12,783,167 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 April 14, 2000.
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, 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.
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. We will count abstentions and
broker non-votes, which are described below, in determining whether a quorum
exists.
Brokers who hold shares for the accounts of their clients may vote these shares
either as directed by their clients or in their own discretion if permitted by
the exchange or other organization of which they are members. Proxies that
brokers do not vote on some proposals but that they do vote on others are
referred to as "broker non-votes" with respect to the proposals not voted upon.
A broker non-vote does not count as a vote in favor of or against a particular
proposal for which the broker has no discretionary voting authority. In
addition, if a shareholder abstains from
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<PAGE>
voting on a particular proposal, the abstention does not count as a vote in
favor of or against the proposal.
There are different voting requirements for the various proposals. To be
elected, a director must receive more votes than any other nominee for the same
seat on the Board of Directors. As a result, if you withhold your vote as to one
or more directors, it will have no effect on the outcome of the election unless
you cast that vote for a competing nominee. If any nominee for election to the
Board of Directors named in this Proxy Statement becomes unavailable for
election for any reason, the proxy will be voted for a substitute nominee
selected by the Board of Directors. To approve the amendment to the 1996 Stock
Option Plan and any other matter presented for shareholder approval, the number
of shares voted in favor of the proposal must exceed the number of shares voted
against the proposal, provided a quorum is present. Shareholders do not have
cumulative voting rights.
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 whether 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 may 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.
4
<PAGE>
CORPORATE GOVERNANCE
Our business, property and affairs are managed under the direction of the
Board of Directors. Although directors are not involved in our day-to-day
operations, 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 10 meetings in 1999. Each
of the incumbent directors attended at least 75% of the Board and committee
meetings to which he was assigned.
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, 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 two times in 1999.
Audit Committee - monitors the auditing, accounting and financial reporting of
InterCept. Messrs. Knox and Schneider 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
regarding the adequacy of internal controls and the scope and results of their
audits. The Audit Committee met one time in 1999.
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. Knox, Schneider and
Burke currently serve on this committee. The Compensation and Stock Option
Committee met three times in 1999.
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 the
nominations are timely made by written notice 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 receive
options to acquire 35,000 shares of common stock, 11,667 of which vest
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.
5
<PAGE>
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 1999:
InterCept provided long distance phone services to Towne Services, Inc. totaling
approximately $215,000 in 1999. InterCept purchased software from Towne Services
totaling $825,000 during 1999. Towne Services is a publicly-held company.
Messrs. Collins, Schneider and Sturm are directors of Towne Services.
InterCept owned approximately 37% of Netzee as of December 31, 1999. Messrs.
Collins, Jackson, Sturm and Burke serve as directors of Netzee, and Mr. Sturm is
the Chief Executive Officer of Netzee. In order to enable Netzee to complete
its acquisitions in August and September of 1999, InterCept borrowed funds under
its line of credit and loaned these funds to Netzee. InterCept also made
advances to Netzee to fund operations. These amounts were repaid to InterCept
upon completion of Netzee's initial public offering in November 1999. On
December 15, 1999, InterCept agreed to provide Netzee with a $15 million
revolving line of credit. Borrowings on this line will bear interest at a rate
of prime plus 2%. As of December 31, 1999, Netzee owed approximately $11.0
million to InterCept. During 1999, Netzee paid approximately $677,000 in
interest to InterCept.
InterCept and Netzee maintain a relationship to cross-market each other's
products and services. During 1999, InterCept received $188,000 in commissions
related to Netzee sales. InterCept also shared certain facilities with Netzee
and provided certain administrative services to Netzee for a portion of 1999.
InterCept charged Netzee approximately $124,000 for these shared costs.
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.
6
<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, your proxy will be voted in favor of the persons
named below as nominees. All nominees are currently serving as directors of
InterCept. The Board of Directors believes that the nominees will stand for re-
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 such other person
as the Board of Directors may recommend. Two 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 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 director class and term expiration dates (in the
case of directors) as of March 31, 2000 are as follows:
Director Nominees
- -----------------
<TABLE>
<CAPTION> Term
Name Age Class Position with Company Expires
- ---- --- ----- --------------------- -------
<S> <C> <C> <C> <C>
Boone A. Knox 63 II Director 2000
John D. Schneider, Jr. 46 II Director 2000
</TABLE>
Other Directors, Chief Executive Officer and President
- -------------------------------------------------------
<TABLE>
<CAPTION>
Term
Name Age Class Position with Company Expires
- ---- --- ----- --------------------- -------
<S> <C> <C> <C> <C>
John W. Collins 52 III Chief Executive Officer and Chairman of the Board 2001
Donny R. Jackson 51 III President, Chief Operating Officer and Director 2001
Glenn W. Sturm 46 I Director 2002
Jon R. Burke 52 I Director 2002
</TABLE>
7
<PAGE>
Other Executive Officers
- ------------------------
<TABLE>
<CAPTION>
Name Age Position with Company
- ---- --- ---------------------------------------------------------------------
<S> <C> <C>
Scott R. Meyerhoff 31 Vice President - Finance, Chief Financial Officer and Secretary
Michael R. Boian 60 Executive Vice President of Alliances and Strategic Partners
Michael D. Sulpy 39 Executive Vice President of Data Communications
Kenneth E. Kudrey 49 Senior Vice President of Data Processing
</TABLE>
Biographical Information for Director Nominees.
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.
John D. Schneider, Jr. has served as a director since January 2000. For the
past 12 years, Mr. Schneider has served as a director, President and Chief
Executive Officer of Bankers Bancorp Inc., a bank holding company. He is a
director, President and Chief Executive Officer of Independent Bankers Bank and
Chairman of Bankers Bank Service Corporation, subsidiaries of Bankers Bancorp
Inc., in Springfield, Illinois. Mr. Schneider is also a director of Towne
Services, Inc., Sullivan Bancshares, Inc., First National Bank of Sullivan and
Community Bank Mortgage Corp.
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 in 1996. 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 InterCept Systems, the predecessor to The InterCept
Group, and some of InterCept's subsidiaries prior to their acquisition by
InterCept. Mr. Collins has served as Chairman of the Board of Directors of
Netzee since its inception in 1999. 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 is a
director of Towne Services, Inc., a publicly-held provider of electronic
commerce products and services for small and mid-sized businesses and community
banks.
Donny R. Jackson, a co-founder of InterCept, has served as President, Chief
Operating Officer and a 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. Mr. Jackson was President and Chief Operating
Officer and director of our predecessor company from July 1996 until its merger
with InterCept. Mr. Jackson has also served as an officer and director of many
of our subsidiary companies. Mr. Jackson has served as a director of Netzee
since its inception in 1999. Prior to joining
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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.
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. He has served as a director of Netzee, Inc. since October 1999
and also serves as a director of HealthTronics, Inc., a provider of noninvasive
treatment solutions for multiple urologic and orthopedic conditions. 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. 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 served as Netzee, Inc.'s Chief Executive Officer and as one of its directors
since its inception in 1999. Mr. Sturm has been a partner in the law firm of
Nelson Mullins Riley & Scarborough, L.L.P. since 1992, where he serves as a
member of its executive committee. Mr. Sturm is also a director of Towne
Services, Inc.
Biographical Information for Other Executive Officers
Scott R. Meyerhoff has served as Chief Financial Officer and Secretary of
InterCept since January 1998 and 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 Executive 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 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.
Kenneth E. Kudrey has served as our Senior Vice President of Data Processing
since May 1999. From February 1983 to May 1999 he was the general manager of
L.E. Vickers & Associates, Inc., a company providing data processing and check
imaging services to community financial institutions. Mr. Kudrey has over 22
years of banking technology experience.
9
<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 during the year ended December 31, 1999. We refer to those
executives as the named executive officers. 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 $50,000 or 10% of the salary and
bonus of such executive.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
-------------------
Securities
Annual Compensation Underlying
Name and --------------------------------- Options/
Principal Position Year Salary($) Bonus($) SARs(#)
-------- --------------------------------- -------------------
<S> <C> <C> <C> <C>
John W. Collins............................ 1999 300,000 65,000 170,000
Chief Executive Officer 1998 265,000 50,000 200,000
Donny R. Jackson........................... 1999 202,750 35,000 80,000
President and Chief Operating Officer 1998 189,750 27,000 100,000
Scott R. Meyerhoff......................... 1999 140,000 15,000 20,000
Vice President - Finance, Chief 1998 119,163 6,250 160,189
Financial Officer and Secretary
Michael R. Boian........................... 1999 140,000 4,000 3,000
Executive Vice President of 1998 140,000 -- --
Alliances and Strategic Partners
Michael D. Sulpy........................... 1999 120,000 7,500 17,500
Executive Vice President 1998 113,333 3,000 --
of Data Communications
</TABLE>
10
<PAGE>
Option Grants. The following table sets forth information concerning each
grant of stock options to the named executive officers during the year ending
December 31, 1999. Each option listed in the table below vests in three equal
annual installments beginning one year after the grant date.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
---------------------------------------------------------------------- Potential Realizable Value at
Percent of Assumed Annual Rates of
Total Options Stock Price Appreciation for
Number of Securities Granted to Exercise or Option Term(1)
Underlying Options Employees in Base Expiration ------------------------------
Granted (#) Fiscal Year (%) Price ($/Sh) Date 5%($) 10%($)
------------------- --------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John W. Collins....... 170,000 31.11% $17.463 6/30/09 $475,651 $1,377,654
Donny R. Jackson...... 80,000 14.72 15.875 6/30/09 798,690 2,024,050
Scott R. Meyerhoff.... 10,000 1.84 7.50 1/11/09 47,167 119,531
10,000 1.84 15.875 6/30/09 99,836 253,006
Michael R. Boian...... 3,000 0.06 7.50 1/11/09 14,150 35,859
Michael D. Sulpy...... 10,000 1.84 7.50 1/11/09 47,167 119,531
7,500 1.38 15.875 6/30/09 74,877 189,755
</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.
Year End Option Values. The following table sets forth certain information
regarding the number of options held by the named executive officers as of
December 31, 1999. No options were exercised by the executive officers during
1999. The market value of our common stock on December 31, 1999 was $29.69 per
share.
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options at Fiscal Year Value of Unexercised In-the-Money
End (#) Options at Fiscal Year End ($)
------------------------------------- ------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
John W. Collins.................................. 146,843 245,000 $3,309,519 $3,727,228
Donny R. Jackson................................. 197,239 149,080 5,230,516 2,825,100
Scott R. Meyerhoff............................... 97,363 82,826 2,208,923 1,785,365
Michael R. Boian................................. 16,842 7,211 463,618 182,481
Michael D. Sulpy................................. 0 17,500 0 325,469
</TABLE>
11
<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, 2000, 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, 2000. 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.
---
12
<PAGE>
- --------------------------------------------------------------------------------
AMENDMENT TO INTERCEPT'S 1996 STOCK OPTION PLAN (PROPOSAL 3)
- --------------------------------------------------------------------------------
On March 29, 2000, the Board approved an amendment to the 1996 Stock Option
Plan to increase the number of shares available for issuance as incentive stock
options or non-qualified options from 1,815,557 to 2,815,557. At the Annual
Meeting, the shareholders are being asked to approve and ratify the increase in
shares available for issuance under the Plan. The Board believes that the
adoption of the amendment to the Plan will foster good employee relations and
encourage and assist our employees to acquire an equity interest in InterCept.
In addition, the Board believes the utilization of the Plan helps align employee
interests with other shareholders and helps provide for the future financial
security of InterCept's employees. The Plan assists InterCept in attracting,
retaining and motivating employees. The details of the Plan are described below.
A copy of the amendment to the Plan is attached to this Proxy Statement as
Exhibit A.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE 1996
---
STOCK OPTION PLAN.
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 composed of at least two independent directors. Awards
issued under the 1996 Stock Option Plan may include incentive stock options,
non-qualified stock options and grants of restricted stock. The Compensation
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 incentive stock option or non-qualified stock
option. 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
incentive stock option 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 incentive
stock option 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 Board of Directors has reserved up to 175,000 shares of common stock for the
granting of non-qualified stock options to the
13
<PAGE>
directors of InterCept. 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 vests during
the director's three-year term of service and each annual grant vests on the
date of grant. Each director option 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
1,815,557 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 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 incentive stock options, (ii)
changes the class of employees eligible to receive incentive stock options that
may participate in the 1996 Stock Option Plan, or (iii) otherwise materially
increases the benefits accruing to recipients of incentive stock options.
Section 162(m) of the Internal Revenue Code of 1986 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.
Certain Federal Income Tax Effects
The following discussion of the federal income tax consequences of the 1996
Stock Option Plan is intended to be a summary of applicable federal income tax
law. State and local tax consequences may differ.
Incentive Stock Options. A participant is not taxed on the grant or exercise of
an incentive stock option. However, the difference between the fair market
value of the shares on the exercise date and the exercise price will be a
preference item for purposes of the alternative minimum tax. If a participant
holds the shares acquired upon exercise of an incentive stock option for at
least two years following grant and at least one year following exercise, the
participant's gain, if any, by a later disposition of those shares will be
treated as long term capital gain for federal income tax purposes. The measure
of the gain is the difference between the proceeds received on disposition and
the participant's basis in the shares (which
14
<PAGE>
generally equals the exercise price). If the participant disposes of stock
acquired by exercising an incentive stock option before satisfying the one and
two year holding periods described above, the participant will recognize both
ordinary income and capital gain in the year of disposition. The amount of the
ordinary income will be the lesser of:
. the amount realized on disposition less the participant's adjusted basis in
the stock (usually the option exercise price); or
. the difference between the fair market value of the stock on the option
exercise date and the option price.
The balance of the consideration received on disposition will be long term
capital gain if the stock had been held for at least one year following exercise
of the incentive stock option. We are not entitled to an income tax deduction
on the grant or the exercise of an incentive stock option or on the
participant's disposition of the shares after satisfying the holding period
requirement described above. If the holding periods are not satisfied, we will
be entitled to an income tax deduction in the year the participant disposes of
the shares, in an amount equal to the ordinary income recognized by the
participant.
Non-Qualified Options. Generally, a participant is not taxed on the grant of a
non-qualified option. Upon exercise, however, the participant recognizes
ordinary income equal to the difference between the option exercise price and
the fair market value of the shares on the date of the exercise. We are
entitled to an income tax deduction in the year of exercise in the amount
recognized by the participant as ordinary income. Any gain on subsequent
disposition of the shares is long term capital gain if the shares are held for
at least one year following exercise. We do not receive an income tax deduction
for this gain.
Restricted Stock. Generally, and except as noted below, the grant of restricted
stock is not taxable at the time of the grant. Instead, at the time restricted
stock vests or becomes transferable, an employee will recognize ordinary income
equal to the amount by which the restricted stock's fair market value on the
date that it vests exceeds the price paid for the restricted stock. An employee
may, however, elect to recognize income as of the date of grant of the
restricted stock, in an amount equal to the amount by which the fair market
value of the restricted stock on the date of grant exceeds the price paid for
the restricted stock. If such an election is made, no additional income will be
recognized when the stock vests or becomes transferable. If the shares are
subsequently forfeited, an employee making such an election may be able to
recognize a capital loss with respect to the amount, if any, paid for the
restricted stock, but only to the extent the amount paid exceeds the amount
realized by the employee on the forfeiture. The employee will not be able to
recognize a loss for tax purposes with respect to the excess of fair market
value over the purchase price that was previously included in income. Dividends
paid on the shares of restricted stock before they vest will be taxed to the
employee either as additional compensation or, if the employee has made the
election described above, as dividend income.
15
<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 1999.
EMPLOYMENT AGREEMENTS
Collins and Jackson Agreements. Mr. Collins and InterCept entered into an
employment agreement effective as of January 30, 1998 under which he serves 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 under which he serves 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 the compensation committee of the Board. In addition, Mr. Collins
and Mr. Jackson are each entitled to incentive compensation as determined by the
Board of Directors or the compensation committee based upon achievement of
targeted levels of performance and such other criteria as the Board of Directors
or the compensation committee shall establish from time to time, and an
additional annual bonus as determined by the Board of Directors or the
compensation 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.
If Mr. Collins ceases to be the Chief Executive Officer of InterCept for any
reason other than by voluntary resignation, InterCept must 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,
16
<PAGE>
piggyback and, after any termination of employment, demand 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 under 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.
On May 28, 1999, Mr. Kudrey and InterCept entered into an employment agreement
under which he serves as the Senior Vice President of Data Processing of
InterCept. The Kudrey Agreement has a term of two years which renews
automatically at the end of each term unless earlier terminated by InterCept or
Mr. Kudrey. InterCept can terminate the Kudrey Agreement upon his death or
disability or for cause. Mr. Kudrey 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. Kudrey's
employment is terminated for any reason after a change in control, InterCept
must pay Mr. Kudrey a lump sum cash payment equal to three-fourths of his annual
base salary and bonus and Mr. Kudrey'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. Knox, Burke
and Schneider. Neither Messrs. Burke nor Schneider has been an officer or
employee of InterCept at any time. None of our executive officers has served:
. as a member of the compensation committee of another entity which has had an
executive officer who has served on our compensation committee;
. as a director of another entity which has had an executive officer who has
served on our compensation committee; or
. as a member of the compensation committee of another entity which has had an
executive officer who has served as one of our directors.
17
<PAGE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary included in any of our previous or
future filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate this Proxy Statement or future filings with the
SEC, 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 of
those filings.
The Compensation and Stock Option Committee consists of the following members of
the Board: Jon R. Burke, Boone A. Knox and John D. Schneider, Jr. The
Compensation Committee reviews and determines InterCept's executive compensation
objectives and policies. The Compensation 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 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 Compensation Committee reviews the salaries of InterCept's
executives annually. When setting base salary levels in a manner consistent
with the objectives outlined above, the Compensation Committee considers
competitive market conditions for executive compensation, company performance
and individual performance.
The measures of individual performance considered in setting salaries include,
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 Compensation Committee has not found it
practicable, nor has
18
<PAGE>
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 1999, 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 Compensation
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 ended December 31, 1999, Mr. Collins' base salary was $300,000 and
he was awarded a $65,000 bonus for the year. Mr. Collins' salary and bonus
payments for 1999 were based on, among other factors, the Company's performance
and the 1998 compensation of chief executive officers of comparable companies,
although his compensation was not linked to any particular group of these
companies.
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
John D. Schneider, Jr.
Boone A. Knox
19
<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.
CUMULATIVE TOTAL RETURN
INTERCEPT GROUP, INC. (ICPT)
NASDAQ STOCK MARKET (U.S.) AND NASDAQ COMPUTER & DATA PROCESSING
INTERCEPT NASDAQ STOCK NASDAQ COMPUTER &
Measurement Period GROUP, INC. MARKET (U.S.) DATA PROCESSING
- ------------------ ----------- ------------- -----------------
06/11/98 $100 $100 $100
06/98 $102 $109 $117
09/98 $ 83 $ 98 $111
12/98 $100 $127 $143
03/99 $117 $143 $172
06/99 $214 $156 $179
09/99 $255 $160 $185
12/99 $409 $230 $303
20
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of InterCept's common stock by: (a) each person or entity known by
InterCept to beneficially own more than 5% of the outstanding common stock; (b)
each director of InterCept; (c) each named executive officer; and (d) 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, 2000 or with respect to which such person
otherwise has or shares voting or investment power. For purposes of computing
the percentage 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 that 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, 2000. No options
will vest during the 60 days following March 31, 2000. We had 12,783,167 shares
outstanding on March 31, 2000.
<TABLE>
<CAPTION>
Vested Beneficial Shares
Name Shares Owned Options Owned %
- ---- ------------ --------- ----------------- -----
Executive Officers and Directors
- --------------------------------
<S> <C> <C> <C> <C>
John W. Collins 1,355,270 151,843 1,507,113 11.7
Donny R. Jackson 459,045 212,239 671,284 5.2
Scott R. Meyerhoff 0 107,734 107,734 *
Michael R. Boian 6,000 17,842 23,842 *
Kenneth E. Kudrey 0 0 0 *
Michael D. Sulpy 415,714 3,333 419,047 3.3
Jon R. Burke 0 45,000 45,000 *
Boone A. Knox 0 45,000 45,000 *
John D. Schneider, Jr. 100 11,667 11,767 *
Glenn W. Sturm 381,004 17,139 398,143 3.1
All directors and executive officers as a
group (10 persons) 2,617,133 611,797 3,228,930 24.1
5% Shareholders
- ---------------
Tena R. Collins (1) 964,800 0 964,800 7.5
Vir A. Nanda 845,044 0 845,044 6.6
</TABLE>
______________
*Indicates less than 1%
(1) As reported by Tena R. Collins in a Statement on Schedule 13G filed with the
Securities and Exchange Commission on March 10, 2000. Ms. Collins' address
is 4209 Riverview Drive, Duluth, Georgia 30071. John W. Collins, our Chief
Executive Officer, retains the right to direct the voting of the shares
owned by Ms. Collins. These shares have not been included in Mr. Collins'
beneficial ownership.
21
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
AND DIRECTOR NOMINATIONS
Any proposal that a shareholder desires to have included in the proxy
materials for presentation at our 2001 Annual Meeting of Shareholders must be
received by us, Attention: Scott R. Meyerhoff, Secretary, at our principal
executive offices by December 16, 2000. Our by-laws provide the procedures that
a shareholder must follow in order to nominate persons for election as directors
or to introduce an item of business at an annual meeting of shareholders. These
procedures require shareholders to submit proposals 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 than March
1, 2001.
AVAILABLE INFORMATION
InterCept is subject to the informational requirements of the Securities
Exchange Act of 1934, which means we are required to file annual and quarterly
reports, proxy statements and other information with the Securities and Exchange
Commission. Our SEC filings are available to the public over the internet at
the SEC's website at http://www.sec.gov. You may also read and copy any
------------------
document we file with the SEC at its Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 230549. You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330.
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
22
<PAGE>
EXHIBIT A
---------
AMENDMENT
TO
1996 STOCK OPTION PLAN
OF
THE INTERCEPT GROUP, INC.
WHEREAS, effective as of November 12, 1996, the Board of Directors and the
shareholders of The InterCept Group, Inc. approved and adopted The InterCept
Group, Inc. 1996 Stock Option Plan (the "1996 Plan")
WHEREAS, on March 29, 2000, the Board of Directors approved and adopted the
following amendment to the 1996 Plan and recommended that it be approved by the
shareholders:
NOW, THEREFORE, the 1996 Plan is hereby amended as follows:
1. Section 5.1 is deleted in its entirety and replaced with the following:
5.1 Limitations. Subject to any antidilution adjustment pursuant to
-----------
the provisions of Section 5.2 hereof, the maximum number of shares of
Stock that may be issued hereunder shall be 2,815,557, and not more
than 315,795 shares of Stock may be made subject to Options to any
individual in the aggregate in any one fiscal year of the Company,
such limitation to be applied in a manner consistent with the
requirements of, and only to the extent required for compliance with,
the exclusion from the limitation on deductibility of compensation
under Section 162(m) of the Code. The number of shares of Stock
available for issuance hereunder shall automatically increase on the
first trading day each calendar year beginning January 1, 1999, by an
amount equal to three percent (3%) of the shares of Stock outstanding
on the trading day immediately preceding January 1; but in no event
shall any such annual increase exceed 315,795 shares (subject to
adjustment under Section 5.2). Any or all shares of Stock subject to
the Plan may be issued in any combination of Incentive Stock Options,
non-Incentive Stock Options, Restricted Stock, or SARs, and the amount
of Stock subject to the Plan may be increased from time to time in
accordance with Article X, provided that the total number of shares of
Stock issuable pursuant to Incentive Stock Options may not be
increased to more than 2,815,557 (other than pursuant to anti-dilution
adjustments and the annual increase provided above) without
shareholder approval. Shares subject to an Option or issued as an
Award may be either authorized and unissued shares or shares issued
and later acquired by the Company. The shares covered by any
unexercised portion of an Option or Award that has terminated for any
reason (except as set forth in the following paragraph), or any
forfeited portion of an Option or Award, and shares tendered for
cashless exercise and withheld for taxes may again be optioned or
awarded under the Plan, and such shares shall not be considered as
having been optioned or issued in computing the number of shares of
Stock remaining available for option or award hereunder. If Options
are issued in respect of options to acquire stock of any entity
acquired, by merger or otherwise, by the Company (or any subsidiary of
the Company), to the extent that such issuance shall not be
inconsistent with the terms, limitations and conditions of Code
Section 422 or Rule 16b-3 under the
<PAGE>
Exchange Act, the aggregate number of shares of Stock for which
Options may be granted hereunder shall automatically be increased by
the number of shares subject to the Options so issued; provided,
however, that the aggregate number of shares of Stock for which
Options may be granted hereunder shall automatically be decreased by
the number of shares covered by any unexercised portion of an Option
so issued that has terminated for any reason, and the shares subject
to any such unexercised portion may not be optioned to any other
person.
2. The effective date of this Amendment is March 29, 2000, the date on which
the Board adopted this Amendment, but is subject to the approval of the holders
of a majority of the Common Stock present either in person or by proxy and
entitled to vote at a duly held meeting of the shareholders of the Company at
which a quorum is present representing a majority of all outstanding voting
Common Stock either in person or by proxy. In the event that such shareholder
approval is not obtained, all options granted pursuant to the Amendment which
would not be capable of being issued under the Plan before giving effect to this
Amendment shall be null and void. This Amendment shall terminate on the tenth
anniversary of the effective date of the Plan.
THE INTERCEPT GROUP, INC
By: /s/ John W. Collins
-------------------
Name: John W. Collins
Title: Chief Executive Officer
2
<PAGE>
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
THE INTERCEPT GROUP, INC.
TO BE HELD ON MAY 15, 2000
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 2000 Annual Meeting of Shareholders
of InterCept to be held at the InterCept's corporate office located at 3150
Holcomb Bridge Road, Norcross, Georgia on Monday, May 15, 2000 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, TWO AND THREE 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 II Nominees (terms expire 2003)
Boone A. Knox
John D. Schneider, Jr.
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees voted
Instruction: To withhold authority to vote for any individual nominee(s),
write out 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, 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Proposal to amend the Company's 1996 Stock Option Plan to increase the
shares reserved for issuance thereunder.
[_] FOR [_] AGAINST [_] ABSTAIN
4. IN THEIR DISCRETION, to act upon such other business as may properly
come before the meeting or any adjournment hereof.
Note: Please sign exactly as name or names appear hereon. Where more than
one owner is shown, each should sign. Persons signing in a 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.
Date_____________________________, 2000
_______________________________________
Signature of Shareholder(s)
_______________________________________
Signature of Shareholder(s)
