HENRY JACK & ASSOCIATES INC, S-1, 2000-07-14

HENRY JACK & ASSOCIATES INC
S-1, 2000-07-14
COMPUTER INTEGRATED SYSTEMS DESIGN

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 2000

REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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JACK HENRY & ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 7373 43-1128385
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or
organization)
</TABLE>

663 HIGHWAY 60
P.O. BOX 807
MONETT, MISSOURI 65708
(417) 235-6652
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
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MICHAEL E. HENRY
CHIEF EXECUTIVE OFFICER
JACK HENRY & ASSOCIATES, INC.
663 HIGHWAY 60, P.O. BOX 807
MONETT, MISSOURI 65708
(417) 235-6652
(Name, address, including zip code and telephone number, including area code, of
agent for service)
------------------------------------

Copies to:

<TABLE>
<S> <C>
ROBERT T. SCHENDEL, ESQ. JACK I. KANTROWITZ, ESQ.
SHUGHART THOMSON & KILROY P.C. BROWN & WOOD LLP
TWELVE WYANDOTTE PLAZA ONE WORLD TRADE CENTER
120 WEST 12TH STREET, SUITE 1600 NEW YORK, NEW YORK 10048
KANSAS CITY, MISSOURI 64105
</TABLE>

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effectiveness of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(1) REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01
per share................... 5,750,000 $48.664 $279,818,000 $73,872
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</TABLE>

(1) Includes 750,000 shares which the underwriters have the option to purchase
to cover over-allotments, if any.

(2) Determined in accordance with Rule 457(c) under the Securities Act of 1933,
as amended, based upon the average of the high and low sales price of our
common stock reported on the Nasdaq National Market on July 10, 2000.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
JACK HENRY & ASSOCIATES AND THE SELLING STOCKHOLDERS MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION -- JULY 14, 2000

PROSPECTUS
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5,000,000 Shares

[JACK HENRY LOGO]
Common Stock

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Jack Henry & Associates, Inc. is offering 2,000,000 shares and the selling
stockholders are offering 3,000,000 shares of common stock. Jack Henry &
Associates will not receive any of the proceeds from the sale of shares by the
selling stockholders.

Jack Henry & Associates provides integrated computer software and hardware
systems and software maintenance and support to banks and credit unions, both on
an in-house and on an outsourced basis.

The shares of Jack Henry & Associates are quoted in the Nasdaq National Market
under the symbol "JKHY." On July 12, 2000, the last reported sale price in the
Nasdaq National Market was $48.875 per share.

<TABLE>
<CAPTION>
Per Share Total
<S> <C> <C>
Public offering price..................................... $ $
Underwriting discounts and commissions.................... $ $
Proceeds, before expenses, to Jack Henry & Associates..... $ $
Proceeds to the selling stockholders...................... $ $
</TABLE>

SEE "RISK FACTORS" ON PAGES 8 TO 13 FOR FACTORS THAT SHOULD BE CONSIDERED BEFORE
INVESTING IN THE SHARES OF JACK HENRY & ASSOCIATES.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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The underwriters may, under certain circumstances, purchase up to 750,000
additional shares from the selling stockholders at the public offering price
less underwriting discounts and commissions. Delivery and payment for the shares
will be on , 2000.

PRUDENTIAL SECURITIES
CIBC WORLD MARKETS
ROBERT W. BAIRD & CO.
GEORGE K. BAUM & COMPANY
A.G. EDWARDS & SONS, INC.

, 2000
<PAGE> 3

[JACK HENRY LOGO]
CUSTOMERS INSTALLED NATIONWIDE
[MAP OF U.S. SHOWING CUSTOMER INSTALLATIONS]
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
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PAGE
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<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 8
Forward-Looking Statements........... 13
Use of Proceeds...................... 14
Price Range of Common Stock.......... 15
Dividend Policy...................... 15
Capitalization....................... 16
Selected Financial Data.............. 17
Unaudited Pro Forma Condensed
Combined Financial Information..... 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 21
</TABLE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Business............................. 30
Management........................... 40
Principal and Selling Stockholders... 46
Description of Capital Stock......... 48
Shares Eligible for Future Sale...... 50
Underwriting......................... 51
Legal Matters........................ 52
Experts.............................. 53
Available Information................ 53
Index to Financial Statements........ F-1
</TABLE>

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"Silverlake System(R)" is a registered trademark of Jack Henry & Associates,
Inc. "CIF 20/20," "NetTeller," "Core Director," "Vertex," "Streamline Platform
Automation," "Alliance Check Image Solutions," "Silhouette Document Imaging,"
"PinPoint Report Retrieval," "InTouch Voice Response," "Centurion Disaster
Recovery," "TimeTrack Payroll System:00," "FormSmart," "NetHarbor," "Symitar
Systems," "MemberConnect -- Web" and "CommLink" are all trademarks of Jack Henry
& Associates or its subsidiaries.

"IBM," "AS/400," "OS/400" and "RS/6000," are all registered or trademarks of
International Business Machines Corporation ("IBM").

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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. We are not
making an offer of these securities in any jurisdiction where the offer or sale
is not permitted. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the front cover of
this prospectus.

2
<PAGE> 5

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully.

JACK HENRY & ASSOCIATES

We are a leading provider of integrated computer systems to commercial
banks with under $10.0 billion of total assets, which we refer to as community
banks, as well as credit unions and other financial institutions in the United
States. We offer a complete, integrated suite of information technology
solutions to improve the management of our customers' entire back-office and
customer interaction processes. We believe that our solutions enable our
customers to provide better service to their customers and compete more
effectively against larger banks and alternative financial institutions. Our
customers either install and use our systems in-house or outsource these
operations to us through our data centers located across the United States. We
perform data conversion and software installation for the implementation of our
systems and provide continuing maintenance and support services that foster
strong customer relationships and produce recurring revenue and additional sales
opportunities.

Founded in 1976, we have gained a reputation in the markets we serve as a
high-quality provider of value-added, productivity-enhancing products and
services. Our revenues have grown from $67.2 million in fiscal 1995 to $193.5
million in fiscal 1999, a compound annual growth rate of 30.3%. Over this same
period, our customer base has grown from 950 to 1,800. As of June 30, 2000, we
had over 2,850 customers.

We also have enjoyed strong growth in net income and expanding pre-tax
margins since 1995. Income from continuing operations has grown from $9.1
million in fiscal 1995 to $32.7 million in fiscal 1999, a compound annual growth
rate of 37.7%. During this same period, pre-tax margins grew from 20.6% in
fiscal 1995 to 26.7% in fiscal 1999. For the three months ended March 31, 2000,
income from continuing operations increased 21.1% over the comparable period in
calendar 1999 to $10.2 million and pre-tax margins were 26.3%.

OUR INDUSTRY

As of December 31, 1999, there were approximately 8,500 community banks and
11,000 credit unions in the United States with aggregate assets of approximately
$1.9 trillion and $411.4 billion, respectively. According to the Automation in
Banking 1999 report, all financial institutions, including both the largest
banks in the United States and our target market of community banks and credit
unions, collectively increased spending on hardware, software, services and
telecommunications from $19.9 billion in 1994 to $32.0 billion in 1998, a
compound annual growth rate of 12.6%. An industry survey indicates that 93% of
community banks and credit unions, which together we refer to as community
financial institutions, believe upgrading technology is the most important issue
for their continued success. In addition, the Internet is becoming a powerful
and efficient medium for the delivery of financial services. Community financial
institutions risk losing customers to larger or alternative financial
institutions if they do not offer Internet banking services. We believe that the
market opportunity for providers of information technology systems, maintenance,
support and related outsourcing services targeted toward community financial
institutions will continue to grow as a result of competitive pressure on
financial institutions.

OUR SOLUTION

We are a single-source provider of a comprehensive and flexible suite of
integrated products and services that address the information technology needs
of community financial institutions. We offer software applications primarily
for use on hardware supporting IBM OS/400 and UNIX operating systems. Our
software applications provide our customers with maximum flexibility in meeting
their data processing requirements within a single, integrated system. Our core
proprietary software applications are the Silverlake System and the CIF 20/20
system, each of which operates on IBM AS/400 hardware; our Core Director system,
which operates on UNIX-based hardware; and our Symitar Systems, which operates
on the IBM RS/6000 with a UNIX operating system. Each of these core applications
include the vital data processing and information management functions required
by a community financial institution.

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<PAGE> 6

Our Silverlake System offers the greater functionality and capacity
required by larger community banks, while the CIF 20/20 system provides
excellent functionality to smaller community banks whose needs can be met with
less complexity. Our Core Director system is intended for community banks that
operate UNIX-based hardware and our Symitar Systems is specifically designed for
credit unions.

To complement our core proprietary software applications, we provide a
variety of integrated ancillary products and services, including Internet and
telephone banking applications, bill payment and image processing. We provide
these products and services to community financial institutions for use on an
in-house or an outsourced basis.

We believe that our information technology solution provides strategic
advantages to our customers by enabling them to:

- implement advanced technologies with full functionality;

- rapidly deploy new products and services;

- focus on customer relationships; and

- access outsourcing solutions to improve operating efficiency.

OUR STRATEGY

Our objective is to grow our revenue and earnings internally, supplemented
by strategic acquisitions. The key components of our business strategy are to:

- provide high-quality, value-added products and services to our clients;

- continue to expand our product and service offerings;

- expand our existing customer relationships;

- expand our customer base;

- build recurring revenue;

- maximize economies of scale; and

- attract and retain capable employees.

RECENT DEVELOPMENTS

In fiscal 2000, we closed four strategic acquisitions that expanded our
core software offerings targeted to our community financial institution
customers, added a complementary service offering and increased our focus on
providing information technology solutions to credit unions. On September 8,
1999, we completed the purchase of certain assets of BancTec, Inc.'s community
banking business for $50.0 million in cash and the assumption of certain
liabilities. This business, which we renamed Open Systems Group, had revenue for
the year ended August 31, 1999 of $40.2 million and provided us with a
UNIX-based software system, one data center, five additional item processing
centers and over 600 community bank customers. On April 1, 2000, we acquired the
capital stock of BancData Solutions, Inc. for $5.0 million in cash, providing us
with outsourcing centers and customers in the California market. On June 1,
2000, we completed our $16.0 million pooling of interests acquisition of
Sys-Tech, Inc., a provider of uninterruptible power supply systems and
consulting services pertaining to the design of computer facilities. Sys-Tech,
which had revenue for its fiscal year ended September 30, 1999 of $9.9 million,
had been a Jack Henry & Associates business partner since 1991. On June 7, 2000,
we completed the purchase of the capital stock of Symitar Systems, Inc. for
$44.0 million in cash. Symitar Systems had revenue for the year ended December
31, 1999 of $32.8 million and provided us with one of the leading software
products targeting the credit union market, increasing our presence in this
market with the addition of 237 credit union customers.

ABOUT US

We were incorporated in Missouri in 1977 and reincorporated in Delaware in
1985 in connection with our initial public offering. Our principal offices are
located at 663 Highway 60, Monett, Missouri 65708, and our telephone number is
(417) 235-6652. Our web site is located at www.jackhenry.com. Information
contained on our web site should not be considered part of this prospectus.
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<PAGE> 7

THE OFFERING

<S> <C>
Shares offered by Jack Henry & Associates....... 2,000,000 shares
Shares offered by the selling stockholders...... 3,000,000 shares
Total shares outstanding after this offering.... 43,357,852 shares
Use of proceeds by Jack Henry & Associates...... For repayment of debt, working capital, capital
expenditures, other general corporate purposes and
potential future acquisitions.
Nasdaq National Market symbol................... JKHY
</TABLE>

The number of shares offered by the selling stockholders does not include
up to 750,000 shares that the underwriters may purchase from the selling
stockholders if the underwriters exercise their over-allotment options in full.

The amount of common stock that will be outstanding after this offering
does not include:

- 6,615,534 shares issuable upon exercise of options outstanding as of the
date of this prospectus, of which 3,810,384 shares are exercisable under
our stock option plans at a weighted average exercise price of $20.17 per
share; and

- 1,691,000 shares available as of the date of this prospectus for
issuance under our stock plans pursuant to options that have not yet been
granted.

Unless otherwise stated, all share amounts and prices included in this
prospectus have been adjusted to give effect to the 2 for 1 split of our common
stock in the form of a stock dividend that took place on March 2, 2000.

RISK FACTORS

You should consider the risk factors and the impact of various events that
could adversely affect our business before investing in our common stock.

5
<PAGE> 8

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following sets forth our summary consolidated financial and operating
data for the periods indicated. The income statement data for the three month
and nine month periods ended March 31, 2000 include the results of operations of
Open Systems Group acquired from BancTec, Inc. on September 8, 1999, from the
acquisition date forward. The acquisitions of Peerless Group, Inc., closed
December 16, 1998 and Sys-Tech, Inc., closed June 1, 2000, were accounted for as
poolings-of-interests. Therefore, the selected consolidated financial data for
all periods are presented as if they had occurred at the beginning of the
earliest period reported. This table is derived from, should be read in
conjunction with, and is qualified entirely by reference to our consolidated
financial statements and the accompanying notes included elsewhere in this
prospectus. The amounts in the table below, other than per share data, are in
thousands.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED NINE MONTHS ENDED ENDED
JUNE 30, MARCH 31, MARCH 31,
------------------------------ ------------------- -----------------
1997 1998 1999 1999 2000 1999 2000
-------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Software licensing and installation....... $ 31,930 $ 39,484 $ 47,181 $ 36,108 $ 35,888 $11,198 $15,275
Maintenance/support and service........... 37,510 46,835 71,278 52,995 69,812 19,128 25,148
Hardware sales............................ 56,816 61,916 75,068 59,452 50,231 16,187 17,998
-------- -------- -------- -------- -------- ------- -------
Total revenues........................ 126,256 148,235 193,527 148,555 155,931 46,513 58,421
-------- -------- -------- -------- -------- ------- -------
Cost of Sales
Cost of hardware.......................... 41,016 43,335 54,661 43,350 35,920 11,964 12,615
Cost of services.......................... 32,001 37,674 52,582 39,792 54,865 13,963 18,650
-------- -------- -------- -------- -------- ------- -------
Total cost of sales................... 73,017 81,009 107,243 83,142 90,785 25,927 31,265
-------- -------- -------- -------- -------- ------- -------
Gross profit................................ 53,239 67,226 86,284 65,413 65,146 20,586 27,156
-------- -------- -------- -------- -------- ------- -------
Operating Expenses
Selling and marketing expense............. 12,750 15,124 14,030 11,384 12,514 3,283 4,326
Research and development expense.......... 3,012 4,163 5,183 3,758 5,780 1,248 2,242
General and administrative expense........ 9,607 11,675 17,347 12,729 13,692 3,699 5,033
-------- -------- -------- -------- -------- ------- -------
Total operating expenses.............. 25,369 30,962 36,560 27,871 31,986 8,230 11,601
-------- -------- -------- -------- -------- ------- -------
Operating income from continuing
operations................................ 27,870 36,264 49,724 37,542 33,160 12,356 15,555
-------- -------- -------- -------- -------- ------- -------
Other Income (Expense)
Interest income........................... 738 1,319 1,619 1,430 738 435 223
Interest expense.......................... (40) (34) (93) (72) (1,143) (12) (567)
Other, net................................ 109 348 363 346 1,629 161 179
-------- -------- -------- -------- -------- ------- -------
Total other income (expense).......... 807 1,633 1,889 1,704 1,224 584 (165)
-------- -------- -------- -------- -------- ------- -------
Income from continuing operations before
taxes..................................... 28,677 37,897 51,613 39,246 34,384 12,940 15,390
Provision for income taxes.................. 10,185 13,692 18,887 14,622 11,468 4,538 5,214
-------- -------- -------- -------- -------- ------- -------
Income from continuing operations....... 18,492 24,205 32,726 24,624 22,916 8,402 10,176
Loss from discontinued operations........... (450) (668) (758) (758) (332) (531) --
-------- -------- -------- -------- -------- ------- -------
Net income.................................. $ 18,042 $ 23,537 $ 31,968 $ 23,866 $ 22,584 $ 7,871 $10,176
======== ======== ======== ======== ======== ======= =======
Diluted Earnings Per Share:
Income from continuing operations......... $ 0.46 $ 0.58 $ 0.77 $ 0.58 $ 0.54 $ 0.20 $ 0.24
Loss from discontinued operations......... (0.01) (0.02) (0.02) (0.02) (0.01) (0.01) --
-------- -------- -------- -------- -------- ------- -------
Net income................................ $ 0.45 $ 0.57 $ 0.75 $ 0.56 $ 0.53 $ 0.18 $ 0.24
======== ======== ======== ======== ======== ======= =======
Diluted weighted average shares
outstanding............................... 40,214 41,593 42,641 42,663 42,343 42,795 42,850
======== ======== ======== ======== ======== ======= =======
Basic Earnings Per Share:
Income from continuing operations......... $ 0.49 $ 0.61 $ 0.81 $ 0.61 $ 0.56 $ 0.21 $ 0.25
Loss from discontinued operations......... (0.01) (0.02) (0.02) (0.02) (0.01) (0.01) --
-------- -------- -------- -------- -------- ------- -------
Net income................................ $ 0.47 $ 0.59 $ 0.79 $ 0.59 $ 0.55 $ 0.19 $ 0.25
======== ======== ======== ======== ======== ======= =======
Basic weighted average shares outstanding... 38,025 39,770 40,337 40,250 40,771 40,428 40,950
======== ======== ======== ======== ======== ======= =======
</TABLE>

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<TABLE>
<CAPTION>
AT MARCH 31, 2000
----------------------------------
PRO FORMA,
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 13,025 $ 22,331 $ 54,569
Total assets................................................ 225,864 282,709 314,947
Total debt.................................................. 30,054 74,054 14,054
Stockholders' equity........................................ 137,422 137,422 229,660
</TABLE>

The preceding table summarizes certain unaudited balance sheet data at
March 31, 2000:

- on a historical basis;

- on a pro forma basis to reflect our acquisition of Symitar Systems,
Inc.; and

- on a pro forma basis, as adjusted to give effect to our acquisition of
Symitar Systems, Inc. and the application of the net proceeds received
by us in this offering assuming a public offering price of $48.875 per
share.

See "Use of Proceeds," "Capitalization," "Selected Financial Data" and the
unaudited pro forma combined financial statements included elsewhere in this
prospectus.

7
<PAGE> 10

RISK FACTORS

You should carefully consider the following risk factors in addition to the
other information set forth in this prospectus before purchasing shares of
common stock of Jack Henry & Associates. Each of these risk factors could
adversely affect our business, operating results and financial condition, as
well as adversely affect the value of an investment in our common stock.

WE MAY NOT BE ABLE TO CONTINUE OR EFFECTIVELY MANAGE OUR RAPID GROWTH.

We have grown at a rapid pace, both internally and through acquisitions.
Our expansion has and will continue to place significant demands on our
administrative, operational, financial and management personnel and systems. We
cannot assure you that we will be able to enhance and expand our product lines,
manage costs, adapt our infrastructure and modify our systems to accommodate
future growth.

IF WE FAIL TO ADAPT OUR PRODUCTS AND SERVICES TO CHANGES IN TECHNOLOGY, WE
COULD LOSE EXISTING CUSTOMERS AND BE UNABLE TO ATTRACT NEW BUSINESS.

The markets for our software and hardware products and services are
characterized by changing customer requirements and rapid technological changes.
These factors and new product introductions by our existing competitors or by
new market entrants could reduce the demand for our existing products and
services and we may be required to develop or acquire new products and services.
Our future success is dependent on our ability to enhance our existing products
and services in a timely manner and to develop or acquire new products and
services. If we are unable to develop or acquire new products and services as
planned, or fail to achieve timely market acceptance of our new or enhanced
products and services, we may incur unanticipated expenses, lose sales or fail
to achieve anticipated revenues.

ACQUISITIONS MAY BE COSTLY AND DIFFICULT TO INTEGRATE.

We recently have acquired several businesses and will continue to explore
possible business combinations in the future. We may not be able to successfully
integrate acquired companies. We may encounter problems in connection with the
integration of new businesses including:

- financial control and computer system compatibility;

- unanticipated costs;

- unanticipated quality or customer problems with acquired products or
services;

- diversion of management's attention;

- adverse effects on existing business relationships with suppliers and
customers;

- loss of key employees; and

- significant amortization expenses related to goodwill and other
intangible assets.

Without additional acquisitions, we may not be able to grow and to develop
new products and services as quickly as we have in the past to meet competitive
challenges. If our integration strategies fail, our business, financial
condition and results of operations could be materially and adversely affected.

IF OUR STRATEGIC RELATIONSHIP WITH IBM WERE TERMINATED, IT COULD HAVE A
NEGATIVE IMPACT ON THE CONTINUING SUCCESS OF OUR BUSINESS.

We have developed a strategic relationship with IBM. As part of this
collaborative relationship, we market and sell IBM hardware and equipment to our
customers under an industry remarketer agreement and resell maintenance on IBM
hardware products to our customers. Much of our software is designed to be
compatible with the IBM hardware that is run by a majority of our customers.

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<PAGE> 11

If IBM were to terminate or fundamentally modify our strategic relationship
by:

- exclusively selling hardware directly to our customers;

- exclusively providing service and maintenance for its equipment directly
to our customers;

- ending our collaboration, thereby making our production of compatible
software more difficult; or

- ceasing to manufacture equipment with which our software is compatible,

our relationship with our customers and our revenues and earnings would suffer.
We could also lose software market share or be required to redesign existing
products or develop new products that would be compatible with the hardware used
by our customers.

COMPETITION MAY RESULT IN PRICE REDUCTIONS AND DECREASED DEMAND FOR OUR
PRODUCTS AND SERVICES.

We expect that competition in the markets we serve will remain vigorous. We
compete on the basis of product quality, reliability, performance, ease of use,
quality of support and pricing. We cannot guarantee that we will be able to
compete successfully with our existing competitors or with companies that may
enter our markets in the future. Certain of our competitors have strong
financial, marketing and technological resources and, in some cases, a larger
customer base than we do. They may be able to adapt more quickly to new or
emerging technologies or to devote greater resources to the promotion and sale
of their products and services.

THE LOSS OF KEY EMPLOYEES COULD ADVERSELY AFFECT OUR BUSINESS.

We depend to a significant extent on the contributions and abilities of our
Chairman and Chief Executive Officer Michael Henry, our President and Chief
Operating Officer Michael Wallace, our Chief Financial Officer Terry Thompson
and various other members of our senior management. Our company has grown
significantly in recent years and our management remains concentrated in a small
number of key employees. If we lose one or more of our key employees, we could
suffer a loss of sales and delays in new product development, and management
resources would have to be diverted from other activities to compensate for this
loss. We do not have employment agreements with any of our executive officers.
We maintain $1.0 million of "key person" life insurance on each of Michael Henry
and Michael Wallace, but this amount would be inadequate to compensate us for
the loss of their services.

CONSOLIDATION OF FINANCIAL INSTITUTIONS COULD REDUCE THE NUMBER OF OUR
CUSTOMERS AND POTENTIAL CUSTOMERS.

Our primary market consists of approximately 8,500 community banks and
11,000 credit unions. The number of community banks and credit unions has
decreased as a result of mergers and acquisitions and is expected to continue to
decrease as more consolidation occurs, which will reduce our number of potential
customers. As a result of this consolidation, some of our existing customers
could terminate, or refuse to renew their contracts with us and potential
customers could break off negotiations with us.

THE SERVICES WE PROVIDE TO OUR CUSTOMERS ARE SUBJECT TO GOVERNMENT
REGULATION THAT COULD HINDER OUR ABILITY TO DEVELOP PORTIONS OF OUR
BUSINESS OR IMPOSE ADDITIONAL CONSTRAINTS ON THE WAY WE CONDUCT OUR
OPERATIONS.

The financial services industry is subject to extensive and complex federal
and state regulation. As a supplier of services to financial institutions, some
of our operations are examined by the Office of the Comptroller of the Currency,
the Federal Reserve Board and the Federal Deposit Insurance Corporation, among
other regulatory agencies. These agencies regulate services we provide and the
manner in which we operate, and we are required to comply with a broad range of
applicable laws and regulations. In addition, existing laws, regulations and
policies could be amended or interpreted differently by regulators in a manner
that has a negative impact on our existing operations or that limits our future
growth or expansion.

9
<PAGE> 12

Our customers are also regulated entities, and the form and content of
actions by regulatory authorities could determine both the decisions they make
concerning the purchase of data processing and other services and the timing and
implementation of these decisions. By establishing standards for Year 2000
compliance, federal regulators had a significant impact on the market for our
products and services in fiscal 2000. We cannot assure you that future decisions
by regulatory authorities will not have a similar or even greater impact on the
market in the future. For example, regulations proposed under the Gramm-
Leach-Bliley Act may impose strict standards on our customers to protect the
confidentiality of personal customer information and records. This may require
us to incur costs to modify our products and services to comply with new
regulations.

The development of financial services over the Internet has raised concerns
with respect to the use, confidentiality and security of private customer
information. Regulatory agencies, Congress and state legislatures are
considering numerous regulatory and statutory proposals to protect the interests
of consumers and to require compliance by the industry with standards and
policies that have not been defined. We do not know what form the regulatory
framework will take and we cannot assure you that any legislation or regulations
that are adopted will not have a negative effect on our current operations, will
not limit our ability to expand our Internet-based activities or will not impose
onerous costs and/or procedures that would make these operations impractical.

NETWORK OR INTERNET SECURITY PROBLEMS COULD DAMAGE OUR REPUTATION AND
BUSINESS.

We rely on standard network and Internet security systems, most of which we
license from third parties, to provide the security and authentication necessary
to effect secure transmission of data. Computer networks and the Internet are
vulnerable to unauthorized access, computer viruses and other disruptive
problems. In addition, advances in computer capabilities, new discoveries in the
field of cryptography or other events or developments may render our security
measures inadequate. Someone who is able to circumvent security measures could
misappropriate proprietary information or cause interruptions in our operations
or those of our customers. Security risks may result in liability to us and also
may deter financial institutions from purchasing our products. We may need to
expend significant capital or other resources protecting against the threat of
security breaches or alleviating problems caused by breaches. Eliminating
computer viruses and alleviating other security problems may result in
interruptions, delays or cessation of service to users, any of which could harm
our business.

DEFECTS IN OUR SOFTWARE PRODUCTS COULD RESULT IN LOSS OF REVENUES AND
INJURY TO OUR REPUTATION AND COULD SUBJECT US TO LIABILITY.

Complex software products such as those we develop, sell and maintain may
contain undetected errors or defects which may become evident at any point in
the life of the product. Errors may be found from time to time in our software
products or in new or recently acquired products resulting in loss of revenues,
delay in market acceptance and sales, diversion of development resources, injury
to our reputation, liability for damages or increased warranty costs. Because
our products are used to deliver services that are integral to our customers'
businesses, errors, defects or other performance problems could result in
financial or other damages to our customers. Product liability litigation
arising from these errors, defects or problems, even if unsuccessful, would be
time consuming and costly to defend. Existing or future laws or unfavorable
judicial decisions could negate any limitation of liability provisions that are
included in our license agreements.

AS TECHNOLOGY BECOMES LESS EXPENSIVE AND MORE ADVANCED, PURCHASE PRICES OF
HARDWARE MAY DECLINE AND OUR REVENUES AND PROFITS FROM REMARKETING
ARRANGEMENTS MAY DECREASE.

Computer hardware technology is rapidly developing. Hardware manufacturers
are producing less expensive and more powerful equipment each year, and we
expect this trend to continue into the future. As computer hardware becomes less
expensive, revenues and profits derived from our hardware remarketing may
decrease and become a smaller portion of our revenues and profits.

10
<PAGE> 13

IF WE NEED TO DEFEND OUR INTELLECTUAL PROPERTY RIGHTS, WE COULD INCUR
SUBSTANTIAL COSTS.

Our future success and ability to compete depends in part upon our
proprietary technology. We rely on a combination of copyright protection,
trademark registration, trade secret laws and contract restrictions to protect
our proprietary interests. Despite our efforts to protect our intellectual
property, a third party could copy or otherwise obtain our software or other
proprietary information without authorization. We may have to litigate to
enforce our intellectual property rights, to protect our trade secrets or
know-how or to determine their scope, validity or enforceability. Enforcing or
defending our intellectual property rights could be expensive, could cause the
diversion of our resources, including diversion of management's attention from
our core business, and may not prove successful. If we are unable to protect our
intellectual property, we may lose a valuable competitive advantage.

IF WE ARE ACCUSED OF INFRINGING ON THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS, OUR BUSINESS COULD SUFFER.

In the event that a holder of intellectual property claimed that we
infringed those rights, whether with or without merit, the need to defend any
action would be costly and time-consuming and could divert our management's
attention or cause product delays. If our products were found to infringe a
third party's proprietary rights, we could be required to pay royalties or
licensing fees. If we were not able to obtain rights to use the intellectual
property on acceptable terms, we might be required to stop the marketing and
sale of one or more of these products and we could incur substantial legal fees.

THE MARKET FOR INTERNET-BASED FINANCIAL SERVICES IS EVOLVING RAPIDLY AND
THE GROWTH OF THIS PORTION OF OUR BUSINESS COULD BE LIMITED.

The impact of the Internet on the financial services industry and our
customers is uncertain. We are currently involved in planning and developing
Internet-based products and services for our customers. We cannot assure you,
however, that there will be significant demand for these products and services
or that we will meet any demand that arises in a successful or timely manner.
Furthermore, we do not know how the evolution of the Internet will affect our
existing business or products and services in the future.

AN OPERATIONAL FAILURE IN OUR OUTSOURCING FACILITIES COULD CAUSE US TO LOSE
CUSTOMERS.

Damage or destruction that interrupts our provision of outsourcing services
could damage our relationship with certain customers and may cause us to incur
substantial additional expense to repair or replace damaged equipment. Although
we have installed back-up systems and procedures to prevent or reduce
disruption, we cannot assure you that we will not suffer a prolonged
interruption of our transaction processing services. In the event that an
interruption of our network extends for more than several hours, we may
experience data loss or a reduction in revenues by reason of such interruption.
In addition, a significant interruption of service could have a negative impact
on our reputation and could lead our present and potential customers to choose
service providers other than us.

THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE.

The market price of our common stock could fluctuate widely in response to
numerous factors, including but not limited to:

- actual or anticipated variations in annual or quarterly operating
results;

- announcements by us or our competitors of new products, significant
contracts, acquisitions or relationships;

- increases or decreases in or elimination of the payment of dividends to
our stockholders;

- economic well-being of community financial institutions; and

11
<PAGE> 14

- availability of significant amounts of common stock for sale into the
public market by our stockholders, including shares that may be issued
and subsequently sold upon the exercise of stock options.

In addition, in recent years, the stock market in general, and the Nasdaq
National Market and the securities of technology companies in particular, have
experienced extreme price and volume fluctuations. These fluctuations have often
been unrelated and disproportionate to the operating performance of individual
companies. These broad market fluctuations may materially adversely affect our
stock price, regardless of our operating results. Furthermore, the stock prices
of companies that offer solutions designed to enable Internet-based financial
services have historically been volatile and may continue to be so.

SOME OF OUR SHARES ARE RESTRICTED FROM IMMEDIATE RESALE BUT MAY BE SOLD
INTO THE MARKET IN THE NEAR FUTURE. THIS COULD CAUSE THE MARKET PRICE OF
OUR COMMON STOCK TO DROP SIGNIFICANTLY.

After this offering, we will have outstanding 43,357,852 shares of common
stock, regardless of whether or not the underwriters exercise their
over-allotment options. Of these shares, an aggregate of 33,589,774 shares,
including the 5,000,000 shares in this offering, or 34,339,774 shares if the
underwriters exercise their over-allotment options in full, will be freely
tradeable without restriction under the Securities Act except for any shares
purchased by one of our "affiliates" as defined in Rule 144 under the Securities
Act. At the conclusion of this offering, a total of 9,768,078 shares will be
"restricted securities" within the meaning of Rule 144 under the Securities Act
or subject to lock-up agreements. The restricted securities generally may not be
sold unless they are registered under the Securities Act or are sold pursuant to
an exemption from registration, such as the exemption provided by Rule 144 under
the Securities Act. We, our executive officers and directors and the selling
stockholders have entered into lock-up agreements under which we and they have
agreed not to offer or sell any shares of common stock or securities convertible
into or exchangeable or exercisable for shares of common stock other than shares
being sold in the offering for a period of 90 days from the date of this
prospectus without the prior written consent of Prudential Securities
Incorporated, on behalf of the underwriters. Prudential Securities Incorporated
may, at any time and without notice, waive any of the terms of these lock-up
agreements. These shares will become available for resale in the public market
without registration under the Securities Act as shown in the chart below. An
additional 3,810,384 shares may be issued under currently exercisable stock
options, all of which could be sold, although some would also be subject to Rule
144 "affiliate" restrictions. As restrictions on resale end, the market price
could drop significantly if the holders of these restricted shares sell them or
are perceived by the market as intending to sell them.

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE OF AVAILABILITY FOR RESALE INTO PUBLIC MARKET
---------------- --------------------------------------------------
<C> <S>
9,350,666 90 days after the date of this prospectus due to lock-up
agreements that our executive officers and directors and
JKHY Partners and Eddina F. Mackey have with Prudential
Securities Incorporated.
417,412 Between 90 and 365 days after the date of this prospectus
due to requirements of the federal securities laws.
</TABLE>

PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE LAW
AND OUR CURRENT CONTROLLING STOCKHOLDERS AND SENIOR MANAGEMENT COULD DETER
TAKEOVER ATTEMPTS OR PREVENT OTHER ACTIONS THAT CERTAIN STOCKHOLDERS MAY
THINK ARE IN THEIR BEST INTERESTS.

After the completion of this offering, members of senior management, the
board of directors and members of the Henry family will continue to beneficially
own 24.2% of our outstanding common stock (22.5% if the underwriters exercise
their over-allotment options in full). As a result, these stockholders will be
able to significantly influence matters requiring stockholder approval,
including a change in control.

12
<PAGE> 15

Some provisions in our certificate of incorporation and bylaws could also
delay, defer, prevent or make more difficult a merger, tender offer, or proxy
contest. Among other things, these provisions:

- allow only the Chairman of the Board, the President, the board of
directors, or two-thirds of the stockholders to call special stockholder
meetings;

- require a two-thirds vote of the stockholders to amend some provisions
of our certificate of incorporation;

- require two-thirds vote of the stockholders to approve an acquisition of
our company;

- require a two-thirds vote of the stockholders to amend some provisions
of our bylaws;

- prevent stockholder action by written consent in lieu of meeting;

- authorize our board of directors to issue up to 500,000 shares of
preferred stock in series with the terms of each series to be fixed by
our board of directors; and

- specify advance notice requirements for stockholder proposals and
director nominations to be considered at a meeting of stockholders.

In addition, with some exceptions, Section 203 of the Delaware General
Corporation Law restricts mergers and other business combinations between us and
any holder of 15% or more of our voting stock.

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. We have
based these forward-looking statements largely on our current expectations and
projections about future events and trends affecting the financial condition of
our business. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions about Jack Henry & Associates, including among
other things:

- general economic and business conditions, both nationally and in our
markets;

- our expectations and estimates concerning future financial performance,
financing plans and the impact of competition;

- anticipated trends in our business;

- existing and future regulations affecting our business;

- opportunities to make acquisitions;

- use of the Internet to facilitate financial transactions; and

- other risk factors set forth under "Risk Factors" in this prospectus.

In addition, in this prospectus, the words "believe", "may", "will",
"estimate", "continue", "anticipate", "intend", "expect" and similar
expressions, as they relate to Jack Henry & Associates, our business or our
management, are intended to identify forward-looking statements.

Unless otherwise required by law, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise after the date of this prospectus. In
light of these risks and uncertainties, the forward-looking events and
circumstances discussed in this prospectus may not occur and actual results
could differ materially from those anticipated or implied in the forward-looking
statements.

13
<PAGE> 16

USE OF PROCEEDS

We estimate that the net proceeds to Jack Henry & Associates from our sale
of the 2,000,000 shares of common stock in this offering will be approximately
$92.2 million, assuming a public offering price of $48.875 per share after
deducting underwriting discounts and commissions and estimated offering expenses
payable by Jack Henry & Associates. We will not receive any proceeds from the
sale of shares by the selling stockholders.

We intend to use these net proceeds for the repayment of debt, working
capital, capital expenditures and other general corporate purposes. We plan to
repay all debt outstanding under our $75.0 million bank credit facility, which
outstanding debt is expected to be approximately $60.0 million at the time of
completion of this offering. This debt had an effective interest rate of 7.63%
at June 30, 2000, and the credit facility matures on June 15, 2001. We also may
use a portion of the net proceeds to acquire, invest or joint venture in
software businesses, software products and outsourcing operations that are
complementary to our business. We currently have no commitments or agreements
with respect to any acquisition, investment or joint venture.

Pending the uses described above, we will invest the net proceeds in
short-term, interest-bearing, investment-grade securities or guaranteed
obligations of the U.S. government.

14
<PAGE> 17

PRICE RANGE OF COMMON STOCK

Our common stock is quoted on the Nasdaq National Market under the symbol
"JKHY." The following table sets forth, for the periods indicated, the high and
low sales price per share of our common stock as reported by the Nasdaq National
Market. All prices have been adjusted to give effect to the 2 for 1 split of our
common stock which occurred on March 2, 2000.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1999
First Quarter................................... $25.13 $17.38
Second Quarter.................................. 27.50 15.19
Third Quarter................................... 25.06 16.00
Fourth Quarter.................................. 20.38 13.22
FISCAL 2000
First Quarter................................... $22.69 $15.50
Second Quarter.................................. 28.25 16.38
Third Quarter................................... 40.00 24.13
Fourth Quarter.................................. 53.00 30.00
FISCAL 2000
First Quarter (through July 12, 2000)........... $51.13 $45.83
</TABLE>

On July 12, 2000, the last reported sale price of our common stock on the
Nasdaq National Market was $48.875 per share. As of June 30, 2000, there were
approximately 1,031 owners of record of our common stock.

DIVIDEND POLICY

We established a practice of paying quarterly dividends at the end of
fiscal 1990 and we have paid dividends with respect to every quarter since that
time. Quarterly dividends per share paid on our common stock for the two most
recent fiscal years ended June 30, 1999 and 2000, as adjusted to reflect the 2
for 1 stock split in March 2000, are as follows:

<TABLE>
<CAPTION>
DIVIDEND
--------
<S> <C>
FISCAL 1999
First Quarter.......................................... $.0325
Second Quarter......................................... .0325
Third Quarter.......................................... .0400
Fourth Quarter......................................... .0400
FISCAL 2000
First Quarter.......................................... $.0400
Second Quarter......................................... .0400
Third Quarter.......................................... .0500
Fourth Quarter......................................... .0500
</TABLE>

The declaration and payment of any future dividends will continue to be at
the discretion of our board of directors and will depend, among other factors,
upon our earnings, capital requirements, contractual restrictions, and operating
and financial condition. We do not currently foresee any changes in our dividend
practices.

15
<PAGE> 18

CAPITALIZATION

The following table sets forth our cash and cash equivalents, short-term
borrowings, including current portion of long-term debt, long-term debt,
stockholders equity and capitalization at March 31, 2000:

- on a historical basis;

- on a pro forma basis to reflect our acquisition of Symitar Systems,
Inc.; and

- on a pro forma basis as adjusted to give effect to our acquisition of
Symitar Systems, Inc. and the application of the net proceeds received
by us in this offering at an assumed public offering price of $48.875
per share.

The historical information was derived from and is qualified by reference
to our consolidated financial statements and accompanying notes included
elsewhere in this prospectus. This information should be read in conjunction
with these consolidated financial statements, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Use of Proceeds"
and the unaudited pro forma combined financial information included elsewhere in
this prospectus. The amounts in the table below, other than share and per share
data, are in thousands.

<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
------------------------------------
PRO FORMA,
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
<S> <C> <C> <C>
Cash and cash equivalents................................. $ 13,025 $ 22,331 $ 54,569
======== ======== ========
Short-term borrowings including current portion of
long-term debt.......................................... $ 29,872 $ 73,872 $ 13,872
======== ======== ========
Long-term debt............................................ $ 182 $ 182 $ 182
-------- -------- --------
Stockholders' Equity:
Preferred stock; $1 par value per share; 500,000 shares
authorized; none issued.............................. -- --
Common stock, $.01 par value per share; 50,000,000
shares authorized; 41,121,803 issued actual and pro
forma; 43,121,803 shares issued pro forma, as
adjusted............................................. 411 411 431
Additional paid-in capital.............................. 36,029 36,029 128,247
Retained earnings....................................... 100,982 100,982 100,982
-------- -------- --------
Total stockholders' equity........................... 137,422 137,422 229,660
-------- -------- --------
Total capitalization................................. $137,604 $137,604 $229,842
======== ======== ========
</TABLE>

The number of shares of common stock set forth above does not include:

- 6,615,534 shares issuable upon exercise of options outstanding as of the
date of this prospectus, of which 3,810,384 shares were exercisable under
our stock option plans at a weighted average exercise price of $20.17 per
share; and

- 1,691,000 shares available as of the date of this prospectus for
issuance under our stock plans pursuant to options that have not yet been
granted.

16
<PAGE> 19

SELECTED FINANCIAL DATA

The following tables set forth selected consolidated financial information
of Jack Henry & Associates. The balance sheet data as of June 30, 1998 and 1999
and the income statement data for the three years ended June 30, 1997, 1998 and
1999 are derived from the audited consolidated financial statements of Jack
Henry & Associates included elsewhere in this prospectus. The balance sheet data
as of March 31, 2000 and the income statement data for the nine and three month
periods ended March 31, 2000 have been derived from the unaudited consolidated
financial statements of Jack Henry & Associates and its subsidiaries and have
been prepared on a basis consistent with our audited consolidated financial
statements and the related notes and include all adjustments (consisting of
normal recurring adjustments), which we consider necessary for a fair
presentation of the information. The acquisitions of Peerless Group, Inc.,
closed December 16, 1998, and Sys-Tech, Inc., closed June 1, 2000, were
accounted for as poolings of interests. Therefore, the selected consolidated
financial data for all periods have been adjusted to reflect the acquisitions as
if they had occurred at the beginning of the earliest period reported. The
following information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our consolidated financial statements and accompanying notes included elsewhere
in this prospectus. The amounts in the tables below, other than per share data,
are in thousands.

<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED ENDED
YEAR ENDED JUNE 30, MARCH 31, MARCH 31,
-------------------------------------------------- ------------------- -----------------
1995 1996 1997 1998 1999 1999 2000 1999 2000
------- ------- -------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Software licensing and
installation................. $21,489 $25,885 $ 31,930 $ 39,484 $ 47,181 $ 36,108 $ 35,888 $11,198 $15,275
Maintenance/support and
service...................... 16,924 29,618 37,510 46,835 71,278 52,995 69,812 19,128 25,148
Hardware sales................. 28,738 37,821 56,816 61,916 75,068 59,452 50,231 16,187 17,998
------- ------- -------- -------- -------- -------- -------- ------- -------
Total revenues............... 67,151 93,324 126,256 148,235 193,527 148,555 155,931 46,513 58,421
------- ------- -------- -------- -------- -------- -------- ------- -------
Cost of Sales
Cost of hardware............... 22,002 26,307 41,016 43,335 54,661 43,350 35,920 11,964 12,615
Cost of services............... 14,706 24,238 32,001 37,674 52,582 39,792 54,865 13,963 18,650
------- ------- -------- -------- -------- -------- -------- ------- -------
Total cost of sales.......... 36,708 50,545 73,017 81,009 107,243 83,142 90,785 25,927 31,265
------- ------- -------- -------- -------- -------- -------- ------- -------
Gross profit....................... 30,443 42,779 53,239 67,226 86,284 65,413 65,146 20,586 27,156
------- ------- -------- -------- -------- -------- -------- ------- -------
Operating Expenses
Selling and marketing
expense...................... 7,250 9,229 12,750 15,124 14,030 11,384 12,514 3,283 4,326
Research and development
expense...................... 3,259 4,559 3,012 4,163 5,183 3,758 5,780 1,248 2,242
General and administrative
expense...................... 6,344 7,157 9,607 11,675 17,347 12,729 13,692 3,699 5,033
------- ------- -------- -------- -------- -------- -------- ------- -------
Total operating expenses..... 16,853 20,945 25,369 30,962 36,560 27,871 31,986 8,230 11,601
------- ------- -------- -------- -------- -------- -------- ------- -------
Operating income from continuing
operations....................... 13,590 21,834 27,870 36,264 49,724 37,542 33,160 12,356 15,555
------- ------- -------- -------- -------- -------- -------- ------- -------
Other Income (Expense)
Interest income................ 746 541 738 1,319 1,619 1,430 738 435 223
Interest expense............... (624) (699) (40) (34) (93) (72) (1,143) (12) (567)
Other, net..................... 92 217 109 348 363 346 1,629 161 179
------- ------- -------- -------- -------- -------- -------- ------- -------
Total other income
(expense).................. 214 59 807 1,633 1,889 1,704 1,224 584 (165)
Income from continuing operations
before taxes..................... 13,804 21,893 28,677 37,897 51,613 39,246 34,384 12,940 15,390
Provision for income taxes......... 4,705 7,750 10,185 13,692 18,887 14,622 11,468 4,538 5,214
------- ------- -------- -------- -------- -------- -------- ------- -------
Income from continuing
operations................... 9,099 14,143 18,492 24,205 32,726 24,624 22,916 8,402 10,176
Loss from discontinued
operations....................... -- (2,620) (450) (668) (758) (758) (332) (531) --
------- ------- -------- -------- -------- -------- -------- ------- -------
Net income......................... $ 9,099 $11,523 $ 18,042 $ 23,537 $ 31,968 $ 23,866 $ 22,584 $ 7,871 $10,176
======= ======= ======== ======== ======== ======== ======== ======= =======
</TABLE>

17
<PAGE> 20

<TABLE>
<CAPTION>
AS OF JUNE 30, AS OF
-------------------------------------------------- MARCH 31,
1995 1996 1997 1998 1999 2000
------- ------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............. $ 3,785 $ 6,413 $ 11,260 $ 24,733 $ 3,376 $ 13,025
Working capital....................... (5,912) 2,876 16,727 35,758 23,111 (11,466)
Total assets.......................... 63,002 67,488 100,484 133,830 177,260 225,864
Total debt............................ 2,927 3,504 525 654 626 30,054
Stockholders' equity.................. 22,515 32,230 60,549 83,591 115,798 137,422
</TABLE>

---------------
Notes:

(1) Losses from discontinued operations in connection with our former BankVision
subsidiary.

(2) Share and per share data have been adjusted to reflect the stock splits paid
in prior years and the March 2, 2000 2 for 1 stock split, each effected as a
stock dividend.

18
<PAGE> 21

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information
for Jack Henry & Associates consists of the Unaudited Pro Forma Condensed
Combined Statement of Income for the year ended June 30, 1999 and the nine month
period ended March 31, 2000 and the Unaudited Pro Forma Condensed Combined
Balance Sheet as of March 31, 2000. On September 8, 1999, we purchased certain
assets comprising BancTec Financial Systems, a unit of BancTec, Inc. for $50.0
million in cash, the assumption of approximately $5.5 million of certain
liabilities and transaction costs of approximately $661,000. This business was
renamed Open Systems Group. On June 7, 2000, we completed the acquisition of all
of the outstanding common stock of Symitar Systems, Inc. for approximately $44.0
million in cash. The Unaudited Pro Forma Condensed Combined Statement of Income
for the year ended June 30, 1999 and the nine month period ended March 31, 2000
gives effect to the Open Systems Group and Symitar transactions as if they had
taken place on July 1, 1998. The Unaudited Pro Forma Condensed Combined Balance
Sheet as of March 31, 2000 gives effect to the Symitar transaction as if it had
taken place on March 31, 2000.

The Unaudited Pro Forma Condensed Combined Statement of Income combines our
consolidated historical results of operations for the year ended June 30, 1999
and the nine months ended March 31, 2000 with Open Systems Group's and Symitar's
historical results. These pro forma results include Symitar's results for the
entire period in each case and include Open Systems Group's results for each
period from the beginning of the period to the date of its purchase by Jack
Henry & Associates.

The unaudited pro forma condensed combined financial information should be
read in conjunction with the Unaudited Pro Forma Combined Financial Information
and the related notes and the consolidated financial statements and notes of
Jack Henry, the financial statements and notes of Open Systems Group and the
financial statements and notes of Symitar, included elsewhere in this
prospectus. The unaudited pro forma condensed combined financial information is
presented for illustrative purposes only and is not necessarily indicative of
the combined operating results or financial position that would have occurred if
the acquisitions described above had been in effect during the periods
presented, nor is it necessarily indicative of future operating results or
financial position. The amounts in the Unaudited Pro Forma Condensed Combined
Financial Information, other than per share data, are in thousands.

19
<PAGE> 22

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
JUNE 30, 1999 MARCH 31, 2000
------------- -----------------
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues
Software licensing and installation....................... $ 71,622 $ 43,038
Maintenance/support and service........................... 97,720 78,594
Hardware sales............................................ 105,340 57,265
-------- --------
Total revenues......................................... 274,682 178,897
-------- --------
Cost of sales
Cost of hardware.......................................... 75,756 39,963
Cost of services.......................................... 88,935 69,792
-------- --------
Total cost of sales.................................... 164,691 109,755
-------- --------
Gross profit................................................ 109,991 69,142
-------- --------
Operating expenses
Selling and marketing expense............................. 22,352 15,026
Research and development expense.......................... 8,846 6,994
General and administrative expense........................ 22,289 14,598
-------- --------
Total operating expenses............................... 53,487 36,618
-------- --------
Operating income from continuing operations................. 56,504 32,524
-------- --------
Other income (expense)
Interest income........................................... 1,943 1,022
Interest expense.......................................... (6,440) (4,234)
Other, net................................................ 354 1,624
-------- --------
Total other income (expense)........................... (4,143) (1,588)
-------- --------
Income from continuing operations before taxes.............. 52,361 30,936
Provision for income taxes.................................. 19,156 10,227
-------- --------
Income from continuing operations...................... 33,205 20,709
======== ========
Diluted earnings per share from continuing operations....... $ 0.78 $ 0.49
======== ========
Basic earnings per share from continuing operations......... $ 0.82 $ 0.51
======== ========
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA AS OF
MARCH 31, 2000
---------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 22,331
Total assets................................................ 282,709
Total debt.................................................. 74,054
Stockholders' equity........................................ 137,422
</TABLE>

20
<PAGE> 23

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the "Selected Financial Data" and the consolidated financial statements and
related notes included elsewhere in this prospectus. This section of this
prospectus contains forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. We use words such as "anticipate," "believe," "expect," "future" and
"intend" and similar expressions to identify forward-looking statements. Our
actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the factors described
below and in "Risk Factors." You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this prospectus.

OVERVIEW

We provide integrated computer systems for in-house and outsourced data
processing to community banks, credit unions and other financial institutions.
We have developed and acquired banking application software systems that we
market, together with compatible computer hardware, to financial institutions
throughout the United States. We also perform data conversion and software
installation for the implementation of our systems and provide continuing
customer maintenance and support services after the systems are installed. For
our customers who prefer not to make an up-front investment in software and
hardware, we provide our full range of products and services on an outsourced
basis through our nine data centers and 14 item processing centers located
across the United States.

We derive revenues from three primary sources:

- sales of software licenses and installation services;

- maintenance, support and outsourcing service fees; and

- hardware sales.

Over the last five fiscal years, our revenues have grown from $67.2 million
in fiscal 1995 to $193.5 million in fiscal 1999. Income from continuing
operations has grown from $9.1 million in fiscal 1995 to $32.7 million in fiscal
1999. This growth has resulted primarily from internal expansion supplemented by
strategic acquisitions, allowing us to develop new products and expand the
number of customers who use our core software systems to approximately 2,400 as
of June 30, 2000.

Financial institutions were required by federal regulation to become Year
2000 compliant by early calendar 1999 and were required to complete all new
systems implementation by June 30, 1999. As a result, we experienced
exceptionally strong revenue and earnings in the nine months ended March 31,
1999 as many financial institutions accelerated their information technology
procurement ahead of the cutoff date established by federal regulators. In the
period from July 1, 1999 to December 31, 1999, the first half of our 2000 fiscal
year, we experienced a decline in revenue from most of our products. In
anticipation of this reduced demand for hardware and our core software
applications, at the beginning of fiscal 1999 we adjusted our emphasis to sales
of our complementary software products and services and our outsourcing
services. During the third quarter of fiscal 2000, we experienced a return to
normal pre-Year 2000 sales and activity levels as the regulatory moratorium
ended.

Since July 1994, we have completed 15 strategic acquisitions. Ten of these
acquisitions were accounted for using the purchase method of accounting and our
consolidated financial statements include the results of operations of the
acquired companies from the dates of their respective acquisitions. The
remaining five acquisitions were accounted for as poolings-of-interests. The
comparisons set forth below reflect the fact that the consolidated financial
statements for fiscal years 1997, 1998 and 1999 and nine and three month periods
ended March 31, 1999 and 2000 have been restated to include all acquisitions
accounted for as poolings-of-interests as if each had occurred at the beginning
of the earliest period reported.

21
<PAGE> 24

Software sales and installation revenue includes the licensing of
application software systems and the conversion and installation services
required for the customer's installation of the systems. We license our
proprietary software products under standard license agreements which typically
provide the customer with a non-exclusive, non-transferable right to use the
software for a term of up to 25 years on a single computer and for a single
financial institution location upon payment of the license fee. Generally, 25%
of license fees are payable upon execution of the license agreement, 65% upon
delivery of the software and the balance at the installation of the last
application module. We recognize 100% of software license revenue upon delivery
of the software and documentation. We recognize installation services each month
as services are performed under hourly contracts and at the completion of the
installations under fixed fee contracts.

Maintenance and support fees are generated from ongoing services to assist
the customer in operating the systems and to modify and update the software and
from providing outsourced data processing services. Revenues from software
maintenance are generated pursuant to annual agreements and are recognized
ratably over the life of the agreements. Outsourcing services are performed
through data centers. Revenues from outsourced data processing are derived from
monthly usage fees typically under five-year service contracts with our
customers. We recognize the revenues under these outsourcing contracts as
services are performed.

Cost of services represents direct costs associated with conversion and
installation efforts, ongoing maintenance and support for our in-house customers
and operation of our centers providing services for our outsourced customers.
These costs are recognized as they are incurred.

We have entered into remarketing agreements with several hardware
manufacturers under which we sell computer hardware and related services to our
customers along with our banking software systems. Revenues from hardware sales
are recognized when the manufacturers ship the hardware. Cost of hardware
consists of the direct costs of purchasing the equipment from the manufacturers.
These costs are recognized at the same time as the related revenue.

Selling and marketing expenses are all the expenses required to market and
sell our products and services. The most significant costs are compensation and
benefits and travel costs for our sales force.

Research and development expenses consist of the costs incurred to develop
computer software. These costs generally are expensed as incurred with a major
portion of same being compensation and benefits for our development staff.
Certain of these new product development costs are capitalized from the point at
which technological feasibility has been established through the point at which
customer installation begins.

General and administrative costs are comprised of all operating costs not
included above. Some of the more significant items are costs of our internal
administration costs of being a public company and depreciation and maintenance
of our corporate headquarters.

22
<PAGE> 25

RESULTS OF OPERATIONS

The following table sets forth certain items from our consolidated income
statements as a percentage of revenues from continuing operations.

<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
FISCAL YEARS ENDED ENDED ENDED
JUNE 30, MARCH 31, MARCH 31,
--------------------------- ---------------- ----------------
1997 1998 1999 1999 2000 1999 2000
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
Software licensing and installation.... 25.3% 26.6% 24.4% 24.3% 23.0% 24.1% 26.1%
Maintenance/support and service........ 29.7 31.6 36.8 35.7 44.8 41.1 43.0
Hardware sales......................... 45.0 41.8 38.8 40.0 32.2 34.8 30.8
----- ----- ----- ----- ----- ----- -----
Total revenues...................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- ----- ----- -----
Cost of Sales
Cost of hardware....................... 32.5 29.2 28.2 29.2 23.0 25.7 21.6
Cost of services....................... 25.3 25.4 27.2 26.8 35.2 30.0 31.9
----- ----- ----- ----- ----- ----- -----
Total cost of sales................. 57.8 54.6 55.4 56.0 58.2 55.7 53.5
----- ----- ----- ----- ----- ----- -----
Gross profit............................. 42.2 45.4 44.6 44.0 41.8 44.3 46.5
----- ----- ----- ----- ----- ----- -----
Operating Expenses
Selling and marketing expense.......... 10.1 10.2 7.2 7.7 8.0 7.1 7.4
Research and development expense....... 2.4 2.8 2.7 2.5 3.7 2.7 3.8
General and administrative expense..... 7.6 7.9 9.0 8.6 8.8 8.0 8.6
----- ----- ----- ----- ----- ----- -----
Total operating expenses............ 20.1 20.9 18.9 18.8 20.5 17.7 19.9
----- ----- ----- ----- ----- ----- -----
Operating income......................... 22.1 24.5 25.7 25.3 21.3 26.6 26.6
----- ----- ----- ----- ----- ----- -----
Other Income (Expense)
Interest income........................ 0.6 0.9 0.8 1.0 0.5 0.9 0.4
Interest expense....................... (0.0) (0.0) (0.0) (0.0) (0.7) (0.0) (1.0)
Other, net............................. 0.1 0.2 0.2 0.2 1.0 0.3 0.3
----- ----- ----- ----- ----- ----- -----
Total other income (expense)........ 0.6 1.1 1.0 1.1 0.8 1.3 (0.3)
----- ----- ----- ----- ----- ----- -----
Income from continuing operations before
taxes.................................. 22.7 25.6 26.7 26.4 22.1 27.8 26.3
Provision for income taxes............... 8.1 9.2 9.8 9.8 7.4 9.8 8.9
----- ----- ----- ----- ----- ----- -----
Income from continuing operations...... 14.6% 16.3% 16.9% 16.6% 14.7% 18.1% 17.4%
</TABLE>

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

REVENUE. Revenues increased by 25.6% from $46.5 million in the three months
ended March 31, 1999 to $58.4 million in the three months ended March 31, 2000.
Software licensing and installation increased 36.4%, maintenance/support and
service revenues increased 31.5% and hardware sales increased 11.2% compared to
the three months ended March 31, 1999. These increases were primarily due to a
significant increase in post-Y2K demand for our products and services and
contribution of $7.1 million from our Open Systems Group, which we refer to as
OSG, that we acquired in September 1999.

COSTS OF SALES. Cost of sales increased by 20.6% from $25.9 million in the
three months ended March 31, 1999 to $31.3 million in the three months ended
March 31, 2000, compared to a 25.6% increase in revenues. Cost of hardware
increased 5.4% compared to the 11.2% increase in hardware revenues. Cost of
services increased 33.6% compared to the 33.3% increase in non-hardware
revenues, with the most significant increase in costs resulting from the
addition of OSG.

GROSS PROFIT. Gross profit increased by 31.9% from $20.6 million in the three
months ended March 31, 1999 to $27.2 million in the three months ended March 31,
2000. The gross margin percentage for the

23
<PAGE> 26

three months ended March 31, 2000 was 46.5% of sales, up from 44.3% for the
three months ended March 31, 1999, primarily because of an increase in revenues
from our more profitable products and services.

OPERATING EXPENSES. Operating expenses increased 41.0% from $8.2 million in the
three months ended March 31, 1999 to $11.6 million in the three months ended
March 31, 2000. Selling and marketing expense increased 31.8%, research and
development expense increased 79.6% and general and administrative expense
increased 36.1% in the three months ended March 31, 2000 compared with the third
quarter of 1999. These increases parallel the overall growth in our business.
The most significant increase was in research and development, a large portion
of which was a result of the continued development of our Internet-related
products. All components of operating expenses were also significantly increased
as a result of the addition of OSG.

OTHER INCOME (EXPENSE). Other income decreased $749,000 from a gain of $584,000
in the three months ended March 31, 1999 to a loss of $165,000 in the three
months ended March 31, 2000. This change was due primarily to an increase in
interest expense from $12,000 in the three months ended March 31, 1999 to
$567,000 in the three months ended March 31, 2000 due to short-term borrowings
incurred to effect our acquisition of OSG.

PROVISION FOR INCOME TAXES. The provision for income taxes was $5.2 million, or
33.9% of income from continuing operations before income taxes, in the three
months ended March 31, 2000, compared with $4.5 million, or 35.1% of income from
continuing operations before income taxes, in the three months ended March 31,
1999. This decrease in the effective tax rate reflects benefits derived from our
tax planning efforts to reduce state income taxes.

INCOME FROM CONTINUING OPERATIONS. Income from continuing operations increased
21.1% from $8.4 million, or $.20 per diluted share, in the three months ended
March 31, 1999 to $10.2 million, or $.24 per diluted share, in the three months
ended March 31, 2000.

DISCONTINUED OPERATIONS. We completed accounting for discontinued operations in
connection with the sale of our BankVision subsidiary prior to the beginning of
the three month period ended March 31, 2000. Therefore, we incurred no loss from
discontinued operations for that period, compared with a $531,000 loss in the
three months ended March 31, 1999.

NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO NINE MONTHS ENDED MARCH 31, 1999

REVENUE. Revenues increased by 5.0% from $148.6 million in the nine months
ended March 31, 1999 to $155.9 million in the nine months ended March 31, 2000.
This increase was due to revenues generated by OSG, which we acquired in
September 1999. OSG contributed $16.0 million to our total revenue during the
nine months ended March 31, 2000. During the same period, compared with the nine
months ended March 31, 1999, software licensing and installation revenues were
virtually flat, maintenance/support and service revenues increased 31.7% and
hardware sales were down 15.5% from the comparable period in 1999. Without the
contribution of OSG, our revenue would have declined 5.8% during the nine months
ended March 31, 2000 as a result of the Y2K regulatory moratorium.

COST OF SALES. Cost of sales increased by 9.2% from $83.1 million in the nine
months ended March 31, 1999 to $90.8 million in the nine months ended March 31,
2000, compared to a 5.0% increase in revenues in the nine months ended March 31,
2000 over the comparable period in 1999. Cost of hardware decreased 17.1%,
compared with the 15.5% decrease in hardware revenue. Cost of services increased
37.9% compared to the 18.6% increase in non-hardware revenues, primarily due to
OSG.

GROSS PROFIT. Gross profit was virtually flat, decreasing from $65.4 million in
the nine months ended March 31, 1999 to $65.1 million in the nine months ended
March 31, 2000. The gross margin percentage for the nine months ended March 31,
2000 was 41.8% of sales, down from 44.0% during the nine months ended March 31,
1999, primarily because of changes in sales mix and reduced revenues due to the
impact of Y2K.

24
<PAGE> 27

OPERATING EXPENSES. Operating expenses increased 14.8% from $27.9 million in
the nine months ended March 31, 1999 to $32.0 million in the nine months ended
March 31, 2000. Selling and marketing expenses increased 9.9%, research and
development increased 53.8% and general and administrative expenses increased
7.6% during the nine months ended March 31, 2000. These expenses grew more
rapidly than revenue because, despite the impact of Y2K discussed above,
referred to above, we continued operations and staffing at levels necessary to
meet anticipated demand in the second half of fiscal 2000.

OTHER INCOME (EXPENSE). Other income decreased 28.2% from $1.7 million in the
nine months ended March 31, 1999 to $1.2 million in the nine months ended March
31, 2000. The $1.1 million gain on sale in September 1999 of a stock investment
acquired in the Peerless acquisition in large part offset the increase in
interest expense of $1.1 million in the nine months ended March 31, 2000 and the
decrease in interest income of $692,000 from cash investments in the nine months
ended March 31, 2000 compared to the comparable period in 1999.

PROVISION FOR INCOME TAXES. The provision for income taxes was $11.5 million,
or 33.4% of income from continuing operations before income taxes, in the nine
months ended March 31, 2000, compared with $14.6 million, or 37.3% of income
from continuing operations before income taxes, in the nine months ended March
31, 1999. This decrease in the effective tax rate reflects benefits derived from
our tax planning efforts to reduce state income taxes.

INCOME FROM CONTINUING OPERATIONS. Income from continuing operations decreased
by 6.9% from $24.6 million, or $.58 per diluted share, for the nine months ended
March 31, 1999 to $22.9 million, or $.54 per diluted share, in the nine months
ended March 31, 2000.

DISCONTINUED OPERATIONS. We incurred a $332,000 loss from discontinued
operations for the nine months ended March 31, 2000, all of which was realized
in the three months ended September 30, 1999. This was $426,000 less than the
loss from discontinued operations for the comparable period in the prior fiscal
year.

FISCAL 1999 COMPARED TO FISCAL 1998

REVENUES. Revenues increased by 30.6% from $148.2 million in fiscal 1998 to
$193.5 million in fiscal 1999. Above average demand for our core software
products and related hardware resulting from the preparation for Y2K was a major
factor driving revenue growth in fiscal 1999. Each line item of revenues grew in
fiscal 1999 compared with the previous fiscal year, with the largest increase in
maintenance/support and service. Sales of complementary products and services,
which are primarily provided to customers utilizing our core software products,
provided a significant amount of revenue during 1999. Acquisitions, electronic
transaction fees, outsourcing fees, Internet banking, form sales and customer
support fees also contributed to the significant growth in total revenues during
that year.

COST OF SALES. Cost of sales increased by 32.4% from $81.0 million in fiscal
1998 to $107.2 million in fiscal 1999, compared to a 30.6% increase in revenues
in fiscal 1999 compared to the previous year. Cost of hardware increased 26.1%
compared to the 21.2% increase in hardware revenue due to product mix of
hardware sold. Cost of services increased 39.6% compared to a 37.2% increase its
related components of revenue in fiscal 1999.

GROSS PROFIT. Gross profit increased 28.3% from $67.2 million in fiscal 1998 to
$86.3 million in fiscal 1999. The gross margin percentage for fiscal 1999 was
44.6%, a small decrease from the gross margin in fiscal 1998.

OPERATING EXPENSES. Operating expenses increased 18.1% from $31.0 million in
fiscal 1998 to $36.6 million in fiscal 1999, compared to a 28.3% increase in
gross profit in fiscal 1999 compared with fiscal 1998. The increase in operating
expenses reflects efficiencies realized as part of our overall growth. Selling
and marketing expense decreased 7.2% from $15.1 million in fiscal 1998 to $14.0
million in fiscal 1999. This decrease reflects the change in product mix, with a
higher percentage of revenues being generated by non-commission sources, such as
customer support fees. Research and development expense increased 24.5% from
$4.2 million in fiscal 1998 to $5.2 million in fiscal 1999, directly related to
continued development and refinement of new and existing products, particularly
Internet products. General and
25
<PAGE> 28

administrative expense increased 48.6% from $11.7 million in fiscal 1998 to
$17.3 million in fiscal 1999, principally due to increased requirements caused
by our overall growth. Excluding the one-time acquisition costs for the Peerless
transaction of $2.2 million, general and administrative expense increased 29.7%
in fiscal 1999 compared with fiscal 1998, while gross profits increased 28.3%.

OTHER INCOME (EXPENSE). Other income increased 15.7% from $1.6 million in
fiscal 1998 to $1.9 million in fiscal 1999, primarily due to the increased
amount of cash and interest-bearing investments in fiscal 1999 compared to
fiscal 1998.

PROVISION FOR INCOME TAXES. The provision for income taxes increased 37.9% from
$13.7 million in fiscal 1998 to $18.9 million in fiscal 1999. The overall tax
rate of 36.6% in fiscal 1999 was relatively unchanged from that in 1998.

INCOME FROM CONTINUING OPERATIONS. Income from continuing operations increased
35.2% from $24.2 million, or $.58 per diluted share, in fiscal 1998 to $32.7
million, or $.77 per diluted share, in fiscal 1999.

DISCONTINUED OPERATIONS. We incurred a $758,000 loss from discontinued
operations in fiscal 1999, compared to a $668,000 loss from discontinued
operations in fiscal 1998. We continued to honor prior commitments to existing
customers while anticipating final resolution regarding our discontinued
operation which was realized in the first quarter of fiscal 2000.

FISCAL 1998 COMPARED TO FISCAL 1997

REVENUES. Revenues increased 17.4% from $126.3 million in fiscal 1997 to $148.2
million in fiscal 1998, particularly due to increased demand for our core
software products. Acquisitions, electronic transaction fees, outsourcing fees,
forms sales and customer support fees also contributed to our growth in
revenues.

COST OF SALES. Cost of sales increased 10.9% from $73.0 million in fiscal 1997
to $81.0 million in fiscal 1998, compared to an increase of 17.4% in revenues.
Cost of hardware increased 5.7% and cost of services increased 17.7% in fiscal
1998 compared to fiscal 1997, as a result of the increased demand for our
products and services.

GROSS PROFIT. Gross profit increased 26.3% from $53.2 million in fiscal 1997 to
$67.2 million in fiscal 1998. The gross margin percentage increased from 42.2%
in fiscal 1997 to 45.4% in fiscal 1998, primarily due to shifts in the product
mix to our more profitable software products and related services from hardware
sales, which are lower margin products.

OPERATING EXPENSES. Total operating expenses increased 22.0% from $25.4 million
in fiscal 1997 to $31.0 million in fiscal 1998, compared to an increase of 26.3%
in gross profit in the same period. Selling and marketing expense increased
18.6%, research and development expense increased 38.2%, and general and
administrative expenses increased 21.5% during the same period. These increases
resulted from the continued growth in our business.

OTHER INCOME (EXPENSE). Other income doubled from $807,000 in fiscal 1997 to
approximately $1.6 million in fiscal 1998, primarily due to the increased amount
of cash and interest-bearing investments in fiscal 1998 compared with the prior
year.

PROVISION FOR INCOME TAXES. The provision for income taxes increased 34.4% from
$10.2 million in fiscal 1997 to $13.7 million in fiscal 1998. The overall tax
rate remained relatively unchanged from fiscal 1997 to fiscal 1998.

INCOME FROM CONTINUING OPERATIONS. Income from continuing operations increased
30.9% from $18.5 million, or $.46 per diluted share, in fiscal 1997, to $24.2
million, or $.58 per diluted share, in fiscal 1998.

DISCONTINUED OPERATIONS. We incurred a $668,000 loss from discontinued
operations in fiscal 1998, compared to a $450,000 loss from discontinued
operations in fiscal 1997. Although a planned sale did not

26
<PAGE> 29

close within the expected time frame, we continued to honor commitments to
customers by providing support and maintenance.

SUPPLEMENTAL QUARTERLY INFORMATION

The following table sets forth quarterly unaudited financial data for the
quarters of fiscal 1998, fiscal 1999 and the first three quarters of fiscal
2000. In our opinion, such unaudited financial information includes all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the information for the periods. The operating results for
any quarter are not necessarily indicative of results for any future periods.
The amounts in the tables below, except per share data, are in thousands.

QUARTERLY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
FISCAL 2000 QUARTERS
-----------------------------
FIRST SECOND THIRD
------- ------- -------
<S> <C> <C> <C> <C>
Total revenues.................................... $43,427 $54,083 $58,421
Cost of sales..................................... 23,421 36,099 31,265
Income from continuing operations before income
taxes........................................... 12,734 6,260 15,390
Income from continuing operations................. 8,539 4,201 10,176
Loss from discontinued operations................. (332) -- --
Net income........................................ $ 8,207 $ 4,201 $10,176
Diluted earnings per share:
Income from continuing operations............... $ .20 $ .10 $ .24
Net income...................................... $ .20 $ .10 $ .24
</TABLE>

<TABLE>
<CAPTION>
FISCAL 1999 QUARTERS
----------------------------------------
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenues.................................... $52,094 $49,948 $46,513 $44,972
Cost of sales..................................... 29,297 27,918 25,927 24,101
Income from continuing operations before income
taxes........................................... 14,599 11,707 12,940 12,367
Income from continuing operations................. 9,025 7,197 8,402 8,102
Income (loss) from discontinued operations........ 24 (251) (531) --
Net income........................................ $ 9,049 $ 6,946 $ 7,871 $ 8,102
Diluted earnings per share:
Income from continuing operations............... $ .21 $ .17 $ .20 $ .19
Net income...................................... $ .21 $ .16 $ .18 $ .19
</TABLE>

<TABLE>
<CAPTION>
FISCAL 1998 QUARTERS
----------------------------------------
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total revenues.................................... $27,120 $36,691 $36,738 $47,686
Cost of sales..................................... 13,972 20,829 19,555 26,653
Income from continuing operations before income
taxes........................................... 7,211 8,690 9,467 12,529
Income from continuing operations................. 4,870 5,511 5,929 7,895
Income (loss) from discontinued operations........ (261) 54 (191) (270)
Net income........................................ $ 4,609 $ 5,565 $ 5,738 $ 7,625
Diluted earnings per share:
Income from continuing operations............... $ .12 $ .13 $ .14 $ .19
Net income...................................... $ .11 $ .13 $ .14 $ .18
</TABLE>

27
<PAGE> 30

LIQUIDITY AND CAPITAL RESOURCES

We have historically generated positive cash flow from operations and have
generally used existing resources and funds generated from operations to meet
our capital requirements. We made capital expenditures totaling $18.7 million in
the nine months ended March 31, 2000, to expand and purchase additional
equipment. These were funded from cash generated by operations and additional
short-term borrowing. Acquisition costs totaling $50.7 million for the nine
months ended March 31, 2000, connected with the purchase of our Open Systems
Group from BancTec, Inc., were funded with $25.7 million in cash from operations
and $25.0 million of short-term borrowings. In addition, we also purchased
Symitar Systems, Inc. on June 7, 2000 for $44.0 million in cash, which was
funded by an increase in short-term borrowing. We expect our consolidated
capital expenditures excluding acquisition costs to be approximately $30.0 to
$40.0 million in fiscal 2000.

Our cash and cash equivalents increased to $13.0 million at March 31, 2000,
from $3.4 million at June 30, 1999. This reflects the seasonal influx of cash
due to the receipt of the Peerless and Open Systems Group annual maintenance
fees billed December 31, 1999. The influx of all other annual maintenance fees
billed June 30, 1999 were offset by the $25.0 million cash from operations used
in the acquisition of our Open Systems Group.

Net cash from continuing operations was $41.6 million for the nine months
ended March 31, 2000, $37.8 million for the year ended June 30, 1999 and $26.3
million for the year ended June 30, 1998. The cash used in investing activities
during the period ending March 31, 2000 was primarily attributable to
acquisition costs of $51.2 million. The cash used in the year ended June 30,
1999 was primarily attributable to capital expenditures of $38.9 million. The
cash used in the year ended June 30, 1998 was primarily attributable to capital
expenditures of $9.9 million.

Cash provided by financing activities was $28.2 million for the nine months
ended March 31, 2000. Cash used for investing activities was $56.6 million for
the year ended June 30, 1999 and $9.0 million for the year ended June 30, 1998.

We currently have two bank credit lines upon which we can draw an aggregate
amount at any one time outstanding of $83.0 million. Our major credit line
provides for funding of up to $75.0 million and bears interest at variable
LIBOR-based rates (7.63% at June 30, 2000). On the date of this prospectus, we
had outstanding a total of $65.5 million under this credit line and have $9.5
million available. We intend to repay in full the amount outstanding out of our
net proceeds from this offering. On September 7, 2000, the aggregate amount
available under this credit line will be reduced to $50.0 million. Our second
credit line provides for funding of up to $8.0 million and bears interest at the
prime rate. On the date of this prospectus, this entire amount remains
available.

We paid a $.05 per share cash dividend on May 19, 2000 to stockholders of
record May 4, 2000 which was funded from operations.

We currently anticipate that our net proceeds from this offering and cash
from continuing operations, together with our available cash resources, will be
sufficient to meet our presently anticipated working capital, cash expenditure
and business expansion requirements. If additional funds are required, we may
seek additional equity or debt financing. We cannot assure you that such
financing will be available on acceptable terms, if at all, or that such
financing will not be dilutive to our stockholders.

RECENT ACCOUNTING PRONOUNCEMENTS

In October, 1997, the Accounting Standards Executive Committee of the
American Institute of Public Accountants ("AcSEC") issued Statement of Position
("SOP") 97-2, "Software Revenue Recognition". The Company adopted SOP 97-2
effective July 1, 1998. SOP 97-2 generally requires revenue earned on software
arrangements involving multiple elements to be allocated to each element based
on the relative fair values of the elements. In March 1998, AcSEC issued SOP
98-4, "Deferral of the Effective Date of a Provision of SOP 97-2, Software
Recognition", which deferred portions of SOP 97-2 for one year. Revenues in
fiscal 1999 from the sales of software are recognized in accordance
28
<PAGE> 31

with the enacted portions of SOP 97-2 and the Company's management anticipates
that the adoption of SOP 98-4 in fiscal 2000 will not have a material impact on
the Company's result of operations.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. SFAS No. 133, as amended by SFAS No.
137, is effective for all fiscal quarters of fiscal years beginning after June
15, 2000. This new standard is not anticipated to have a material impact on the
Company's financial position and results of operations.

The Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," on
December 3, 1999. SAB No. 101, as amended, provides the SEC Staff's views on
selected revenue recognition issues and is effective no later than the fourth
fiscal quarter for years beginning after December 15, 1999, which for the
Company is the beginning of its fourth quarter of fiscal 2001. The Company has
not completed the process of evaluating the impact that will result from
adopting SAB No. 101 and therefore, is unable to determine the impact that the
adoption will have on its financial position and results of operations.

MARKET RISK

Market risk refers to the risk that a change in the level of one or more
market prices, interest rates, indices, volatilities, correlations or other
market factors such as liquidity, will result in losses for a certain financial
instrument or group of financial instruments. We are currently exposed to credit
risk on credit extended to customers, interest risk on investments in U.S.
government securities and long-term debt. We actively monitor these risks
through a variety of controlled procedures involving senior management. We do
not currently use any derivative financial instruments. Based on the controls in
place, credit worthiness of the customer base and the relative size of these
financial instruments, we believe the risk associated with these instruments
will not have a material adverse affect on our consolidated financial position
or results of operations.

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BUSINESS

OVERVIEW

Jack Henry & Associates, Inc. is a leading provider of integrated computer
systems to banks with under $10.0 billion of total assets, which we refer to as
community banks, as well as credit unions and other financial institutions in
the United States. We offer a complete, integrated suite of data processing
system solutions to improve our customers' management of their entire
back-office and customer interaction processes. We believe our solutions enable
our customers to provide better service to their customers and compete more
effectively against larger banks and alternative financial institutions. Our
customers either install and use our systems in-house or outsource these
operations to us on a turn-key basis. We perform data conversion, hardware and
software installation and software customization for the implementation of our
systems and applications. We also provide continuing customer maintenance and
support services to ensure proper product performance and reliability, which
provides us with continuing client relationships and recurring revenue. For our
customers who prefer not to acquire hardware and software, we provide turn-key
outsourcing services through nine data centers and 14 item processing centers
located across the United States.

Our gross revenue has grown from $67.2 million in fiscal 1995 to $193.5
million in fiscal 1999, representing a compound annual growth rate over this
five-year period of 30.3%. Net income from continuing operations has grown from
$9.1 million in fiscal 1995 to $32.7 million in fiscal 1999, a compound annual
growth rate of 37.7%.

INDUSTRY BACKGROUND

According to the Automation in Banking 1999 report, all financial
institutions, including both the largest banks in the United States and our
target market of community banks and credit unions, increased spending on
hardware, software, services and telecommunications to $32.0 billion in 1998
from $19.9 billion in 1994, representing a compound annual growth rate of 12.6%.
An industry survey shows that 93% of community financial institutions believe
upgrading technology is the most important issue to their continued success. We
believe that the market opportunity for providers of hardware and software
systems, maintenance, support and related outsourcing services targeted toward
community banks and credit unions will continue to grow as a result of the
competitive pressure on financial institutions.

There are approximately 8,600 commercial banks and 11,000 credit unions in
the United States. Our primary market has historically been commercial banks
with less than $10.0 billion in assets, of which there were approximately 8,500
at December 31, 1999. As of December 31, 1999, community banks had aggregate
assets of approximately $1.9 trillion. Consolidation within the financial
services industry has resulted in a 3.9% compound annual decline in the
population of community banks and a 1.6% compound annual decline in their
aggregate assets between 1994 and 1999. As the result of two of our recent
acquisitions, we have also begun serving credit unions in the United States.
These are cooperative, not-for-profit financial institutions organized to
promote savings and provide credit to their members. As of December 31, 1999,
there were 10,628 federally insured credit unions in the United States. Although
the number of these credit unions has declined at a 2.4% compound annual rate
between 1994 and 1999, their aggregate assets have increased at a 7.3% compound
annual rate to $411.4 billion in 1999.

We believe that community banks and credit unions play an important role
with the communities and customers they serve. Typically, customers of community
banks and credit unions rely on these financial institutions because of their
ability to provide personalized, relationship-based service and their focus on
local community and business needs. We believe these core strengths will allow
community banks and credit unions to effectively compete with larger banks and
alternative financial institutions. In order to succeed and to maintain strong
customer relationships, we believe community banks and credit unions must
continue to:

- focus on their primary products and services;

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<PAGE> 33

- respond rapidly to customer demand for new products and services;

- implement advanced technologies, such as Internet banking, for
interfacing with and marketing to their customers;

- use advanced technologies in back-office operations to improve operating
efficiency and control costs while increasing service and lowering costs
to their customers; and

- integrate products and services into their core service offerings and
data processing infrastructure, to provide the same wide range of
services as are offered by larger banks.

In 1998, approximately 60% of commercial banks utilized in-house hardware
and software systems to perform all of their core systems and data processing
functions. Off-site data processing centers provided systems services on an
outsourced basis for the remaining 40% of banks. Since the mid-1980s, banks have
tended to shift their data processing requirements in-house from outsourcing
such functions to third-party data centers. Of the community banks in the United
States with in-house installations, approximately 42%, 24%, and 21% utilize IBM,
NCR and Unisys hardware, respectively. No other hardware platform had more than
a 6% share of the market.

The Internet is becoming a powerful and efficient medium for the delivery
of financial services, including Internet banking, bill payment, bill
presentment and other services for individuals, and cash management and other
services for the commercial customers of financial institutions. Financial
institutions provide Internet banking solutions to retain customers, attract new
customers, reduce operating costs, and gain non-interest sources of revenue.
According to industry sources, over 60 of the 100 largest banks in the United
States offer Internet banking. By contrast, approximately 10% of community banks
currently offer Internet banking. We believe that community financial
institutions risk losing customers to larger or alternative financial
institutions if they do not offer Internet banking services.

OUR SOLUTION

We are a single-source provider of a comprehensive and flexible suite of
integrated products and services that address the information technology and
data processing needs of community financial institutions. Our business derives
revenues from three primary sources:

- software licensing and installation services;

- maintenance, support and outsourcing services; and

- hardware sales.

We develop software applications designed primarily for use on hardware
supporting the IBM OS/400 and UNIX operating systems. Our product and service
offerings are centered on four proprietary software applications, each
comprising the core data processing and information management functions of a
community bank or credit union. Key functions of each of our core software
applications include deposits, loans, and general ledger. Our software
applications make extensive use of parameters allowing our customers to tailor
the software to their needs. Our software applications are designed to provide
maximum flexibility in meeting our customer data processing requirements within
a single, integrated system. Our core proprietary software applications are:

- our Silverlake System, which operates on the IBM AS/400 and is used
primarily by banks with total assets up to $10.0 billion;

- our CIF 20/20 system, which operates on the IBM AS/400 and is used
primarily by banks with total assets up to $300.0 million;

- our Core Director system, which operates on hardware supporting UNIX
operating systems and is used by banks employing client-server
technology; and

- our Symitar Systems, which operates on the IBM RS/6000 with a UNIX
operating system and is used by credit unions.
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<PAGE> 34

To complement our core software applications, we provide a variety of
ancillary products and services for use on an in-house or an outsourced basis by
community financial institutions. The following diagram illustrates our
integrated suite of products and services.

GRAPHIC
[Graphic: Constellation of products and services with names of core software
systems arranged in a circle in the center: "Silverlake System," "CIF 20/20,"
"Core Director," and "Symitar Systems." Descriptions of ancillary products
encircle the core systems: "Disaster Recovery Services," "Proof of Deposit,"
"Internet Banking," "Voice Response," "Forms & Supplies," "Teller Software,"
"Platform System," "Payroll Software," "Hardware," "ATM Software," "Loan
Servicing" and "Imaging." The variety of services offered are arranged
horizontally at the bottom of the page: "Installation Services," "Maintenance &
Support," "Electronic Transactions" and "Customization Services."]

We believe that our solution provides strategic advantages to our customers
by enabling them to:

- IMPLEMENT ADVANCED TECHNOLOGIES WITH FULL FUNCTIONALITY. Our
comprehensive suite of products and services is designed to meet our
customers' information technology needs through custom-tailored
solutions using proprietary software products. Our clients can either
perform these functions themselves on an in-house basis through the
installation of our hardware and software systems or outsource those
functions to us.

- RAPIDLY DEPLOY NEW PRODUCTS AND SERVICES. Once a community financial
institution has implemented our core software, either in-house or on an
outsourced basis, we can quickly and efficiently install additional
applications and functions. This allows our customers to rapidly deploy
new products and services.

- FOCUS ON CUSTOMER RELATIONSHIPS. Our products and services allow our
customers to stay focused on their primary business of gaining,
maintaining and expanding their customer relationships while providing
the latest financial products and services.

- ACCESS OUTSOURCING SOLUTIONS TO IMPROVE OPERATING EFFICIENCY. Customers
utilizing our outsourcing solutions benefit from access to all of our
products and services without having to maintain personnel to develop,
update and run these systems and without having to make large up-front
capital expenditures to implement these advanced technologies.
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OUR STRATEGY

Our objective is to grow our revenue and earnings internally, supplemented
by strategic acquisitions. The key components of our business strategy are to:

- PROVIDE HIGH-QUALITY, VALUE-ADDED PRODUCTS AND SERVICES TO OUR CLIENTS.
We compete on the basis of providing our customers with the
highest-value products and services in the market. We believe we have
achieved a reputation as a premium product and service provider.

- CONTINUE TO EXPAND OUR PRODUCT AND SERVICE OFFERINGS. We continually
upgrade our core software applications and expand our complementary
product and service offerings to respond to technological advances and
the changing requirements of our clients. For example, we offer a turn-
key Internet banking solution that enables community financial
institutions to rapidly deploy sophisticated new products and services.
Our integrated solutions enable our customers to offer competitive
services relative to larger banks and alternative financial
institutions. We intend to continue to expand our range of Internet
banking and other products and services as well as provide additional
services such as network services and computer facilities design.

- EXPAND OUR EXISTING CUSTOMER RELATIONSHIPS. We seek to increase the
information technology products and services we provide to those
customers that do not utilize our full range of products and services.
In this way, we are able to increase revenues from current customers
with minimal additional sales and marketing expenses.

- EXPAND OUR CUSTOMER BASE. We seek to establish long-term relationships
with new customers through our sales and marketing efforts and selected
acquisitions. As of June 30, 2000, we had over 2,850 customers, up from
950 in 1995.

- BUILD RECURRING REVENUE. We enter into contracts with customers to
provide services that meet their information technology needs. We
provide ongoing software maintenance and support for our in-house
customers. Additionally, we provide data processing for our outsourcing
customers and ATM transaction switching services, both on contracts that
typically extend for periods of five years.

- MAXIMIZE ECONOMIES OF SCALE. We strive to develop and maintain a
sufficiently large client base to create economies of scale, enabling us
to provide value-priced products and services to our clients while
expanding our operating margins.

- ATTRACT AND RETAIN CAPABLE EMPLOYEES. We believe that attracting and
retaining high-quality employees is essential to our continued growth
and success. Our corporate culture focuses on the needs of employees, a
strategy that we believe has resulted in low employee turnover. In
addition, we use employee stock options to serve as a strong incentive
and retention tool.

OUR ACQUISITIONS

To complement and accelerate our internal growth, we selectively acquire
companies that provide us with one or more of the following:

- new customers;

- products and services to complement our existing offerings;

- additional outsourcing capabilities; and

- entry into new markets related to community financial institutions.

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<PAGE> 36

When evaluating acquisition opportunities, we focus on companies with a
strong employee base and management team and excellent customer relationships.
Since fiscal 1995, we have completed the following acquisitions:

<TABLE>
<CAPTION>
FISCAL
YEAR COMPANY PRODUCTS AND SERVICES
------ ------- ---------------------
<S> <C> <C>
Symitar Data processing systems and services for credit unions
2000
Sys-Tech Uninterruptible power supply systems and computer facilities
design
2000
BancData Systems Outsourcing services
2000
Open Systems Group UNIX-based data processing systems for banks
2000
Peerless Group Data processing systems for banks and credit unions
1999
Digital Data Services Outsourcing services
1999
Hewlett Computer Services Outsourcing services
1999
Vertex Teller software
1998
Financial Software Systems Payroll software
1998
GG Pulley Image and item processing products and services
1998
Liberty Banking Services Outsourcing services
1997
Central Interchange ATM network services
1996
Liberty Data processing systems for banks and outsourcing services
1995
Sector Data processing systems for banks
1995
Commlink ATM network services
1995
</TABLE>

OUR PRODUCTS AND SERVICES

Changing technologies, business practices and financial products have
resulted in issues of compatibility, scalability and increased complexity for
the hardware and software used in many financial institutions. We have responded
to these issues by developing a fully integrated suite of products and services
consisting of core software systems, hardware and complementary products and
services. These address virtually all of a community bank or credit union's
customer interaction, back-office data and information processing needs.

We provide our full range of products and services to financial
institutions through both in-house and outsourced delivery models. For those
customers who prefer to purchase systems for their in-house facilities, we
contract to sell computer hardware, license core and complementary software and
contract to provide installation, training and ongoing maintenance and support
and other services.

We also offer our full suite of software products and services on an
outsourced basis to customers who do not wish to maintain, update and run these
systems or to make large up-front capital expenditures to implement these
advanced technologies. Our principal outsourcing service is the delivery of
mission-critical data processing services using our data centers located within
the United States. We provide our outsourcing services through an extensive
national data and service center network, comprised of nine host data centers
and 14 item centers. We monitor and maintain our network on a seven-day, 24-hour
basis. Customers typically pay monthly fees on multi-year service contracts for
these services.

HARDWARE SYSTEMS

Our software operates on a variety of hardware systems. We have entered
into remarketing agreements with IBM, NCR and other hardware providers that
allow us to purchase hardware at a discount and sell (remarket) it to our
customers together with our software applications. We currently sell the IBM
AS/400, which is IBM's premier mid-range hardware system, the IBM RS/6000, NCR
servers and reader/sorters, and BancTec reader/sorters.

We have a long-term strategic relationship with IBM, dating to the initial
design of our first core software applications more than 20 years ago. In
addition to our remarketing agreement with IBM, which we renew annually, we have
been named a "Premier Business Partner" of IBM for the last eight consecutive
years. Our relationship with IBM provides us with a substantial and ongoing
source of revenue.

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<PAGE> 37

Our remarketing strategy was expanded in 1999 to include IBM and NCR
hardware products utilizing UNIX operating systems to allow us to respond to
customer demand for alternative hardware products and sell our core software
applications to a broader-based market.

CORE SOFTWARE APPLICATIONS

Each of our core software systems consists of several fully-integrated
application modules, such as deposits, loans, general ledger, and the customer
information file, which is a centralized file containing customer data for all
applications. We custom-tailor these modules utilizing parameters determined by
our customer. The applications can be connected to a wide variety of peripheral
hardware devices used in bank operations. Our software is designed to provide
maximum flexibility in meeting our customers' data processing requirements
within a single system to minimize data entry.

For our customers who choose to acquire in-house capabilities, we generally
license our core system under standard license agreements which provide the
customer with a fully-paid, nonexclusive, nontransferable right to use the
software for a term of up to 25 years on a single computer and at a single
location. These same systems can be delivered on an outsourced basis as well. We
provide a limited warranty for unmodified software, typically for a period of 60
days from installation. Under the warranty, we will correct any program errors
at no additional charge to the customer.

Our core software applications are differentiated broadly by size of
customer, scalability, customizable functionality, customer competitive
environment and, to a lesser extent, cost. Our core applications include:

- our Silverlake System, which operates on the IBM AS/400 and is used
primarily by banks with total assets up to $10.0 billion;

- our CIF 20/20 system, which operates on the IBM AS/400 and is used
primarily by banks with total assets up to $300.0 million;

- our Core Director system, which operates on hardware supporting UNIX
operating systems and is used by banks employing client-server
technology; and

- our Symitar Systems, which operates on the IBM RS/6000 with a UNIX
operating system and is used by credit unions.

COMPLEMENTARY PRODUCTS AND SERVICES

To complement our core software applications, we provide a number of
ancillary products and services, including:

Vertex Teller Automation System is an online teller automation system that
enables tellers to process transactions more efficiently and with greater
accuracy.

Streamline Platform Automation is a fully-automated new account origination
solution that integrates new customer data, including signature cards,
disclosure statements, and loan applications into the core customer data
file systems on a real-time basis.

Alliance Check Image Solutions allows our customers to create and store
digital check images for inclusion in monthly statements and to facilitate
their customer support services.

Silhouette Document Imaging utilizes digital storage and retrieval
technology to provide online instant access to document images, such as
loan documents and signature cards.

PinPoint Report Retrieval enables system-wide storage and retrieval of
computer-generated reports for simplified information access.

NetTeller and MemberConnect-Web provides Internet-based home banking and
commercial cash management. See "Online Banking" below.

InTouch Voice Response provides a fully-automated interactive voice
response system for 24-hour telephone-based banking and customer service.

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<PAGE> 38

Centurion Disaster Recovery provides multi-tiered disaster recovery
protection, including comprehensive disaster planning and procedures.

TimeTrack Payroll System:00 is a fully-integrated payroll accounting and
human resources software system.

FormSmart provides day-to-day operating forms, year-end tax forms and other
printing and office supplies.

CommLink ATM & Transaction Processing Solutions provides national switching
and processing services for ATM, debit card transactions and point-of-sale
transactions.

Other software products such as proof of deposit, secondary market loan
servicing, account reclassification, and investment sweeps further complement
our core systems.

INSTALLATION AND TRAINING

Virtually all of our customers contract with us for installation and
training services in connection with their purchase of in-house systems. The
complete installation process of a core system typically requires six to nine
months of planning, design, data conversion, hardware set-up and testing. At the
culmination of this installation process, one of our installation teams travels
to our customer's facilities to ensure the smooth transfer of data to the new
system. Installation fees are charged separately to our customers on both fixed
fee and hourly charge models, with full pass-through to our customers of travel
and other expenses. Installation services are also required in connection with
new outsourcing customers, and are billed separately at the time of
installation.

Both in connection with installation of new systems and on an ongoing
basis, our customers need, and we provide, extensive training services and
programs related to our products and services. Training can be provided in our
regional training centers, at meetings and conferences or onsite at our
customers' locations, and can be customized to meet our customers' requirements.
The large majority of our customers' acquire training services from us, both to
improve their employees' proficiency and productivity and to make full use of
the functionality of our systems. Generally, training services are paid for on
an hourly basis. However we have recently been successful in marketing annual
subscriptions for training services, representing blocks of training time that
can be used by our customers in a flexible fashion.

MAINTENANCE AND SUPPORT

Following the installation of our hardware and software systems at a
customer site, we provide ongoing maintenance and product support services to
assist our customers to operate the systems and to periodically update the
software. We also offer maintenance services for hardware, primarily through our
hardware suppliers, providing customers who have contracted for this service
with "one-call" system support covering hardware and software applications.

Support is provided through a 24-hour telephone service available to our
customers seven days a week. Most questions and problems can be resolved quickly
by our experienced support staff. For more complicated issues, our staff, with
our customers' permission, can log on to our customers' systems remotely. We
maintain our customers' software largely through releases which contain
improvements and incremental additions. Updates also are issued when required by
changes in applicable laws and regulations. We provide maintenance and support
services on our core systems as well as our complementary software products.

Nearly all of our in-house customers purchase maintenance and support
services from us. These services are a significant source of recurring revenue,
are contracted for on an annual basis and are typically priced at approximately
18% of the particular software product's license fee. These fees may be
increased as our customer's asset base increases and as they increase the level
of functionality of their system by purchasing additional complementary
products. Maintenance and support fees are generally paid in advance for the
entire year, with proration for new contracts which start during the year. Each
contract

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<PAGE> 39

automatically renews annually unless we or our customer gives notice of
termination at least 60 days prior to expiration. Identical maintenance and
support is provided to our outsourced customers, but are not separately priced
in their overall monthly fees.

ONLINE BANKING

We provide a suite of fully integrated Internet products and services that
enables community financial institutions to offer Internet banking and
e-commerce solutions to their customers. Our offerings include:

NetTeller, an Internet-based home banking system for individual and
commercial cash management for business customers of community banks;

MemberConnect-Web, an Internet-based home banking system for credit union
members;

Bill Pay, which allows customers to pay bills online through a third-party
provider. We are currently developing our own bill payment system; and

NetHarbor, which provides our customers with a custom-branded web portal
that enables them to provide their customers with a variety of customized
information and e-commerce opportunities, including user-defined content
such as local or special interest events, weather, financial news and other
information and online shopping and e-commerce through our relationship with
OLB.com. We also plan for NetHarbor to provide online stock trading and
market information through our relationship with Q4i.com before the end of
calendar year 2000.

RESEARCH AND DEVELOPMENT

We devote significant effort and expense to develop new software and
service products and continually upgrade and enhance our existing offerings.
Typically, we upgrade our core software applications and ancillary services once
per year. We believe that our research and development efforts are highly
efficient because of the extensive experience of our research and development
staff and because our product development is highly customer-driven. Through our
regular contact with customers at user group meetings, sales contacts and
through our ongoing maintenance services, our customers inform us of the new
products and functionalities they desire.

SALES AND MARKETING

Our primary markets consist of community banks and credit unions. We have
not devoted significant marketing and sales efforts to other financial
institutions such as thrifts. Historically, we have primarily and most
successfully marketed to banks with up to $3.0 billion in total assets and
credit unions of all sizes.

Our sales efforts are conducted by a dedicated field sales force, an inside
sales team and a technical sales support team, all of which are overseen by
regional sales managers. Our dedicated field sales force is responsible for
pursuing lead generation activities and representing the majority of our
products and solutions to current and prospective clients. Our inside sales
force sells certain complementary products to our existing customers. All sales
force personnel have responsibility for a specific territory. The sales support
team writes business proposals and contracts and prepares responses to
request-for-proposals regarding our software and hardware solutions. All of our
sales professionals receive a base salary and performance-based commission
compensation.

Our marketing effort consists of attendance at trade shows, printed media
advertisement placements, internally developed and managed marketing campaigns.
We also conduct a number of field and national user group meetings each year
that enable us to keep in close contact with our customers and demonstrate new
products and services to them.

We have 33 installations in the Caribbean primarily through the marketing
efforts of our wholly-owned foreign sales subsidiary, Jack Henry International
Limited. Our international sales have historically accounted for substantially
less than 5% of our revenues.

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BACKLOG

Our backlog consists of contracted in-house products and services (prior to
delivery) and the minimum amounts due on the remaining portion of outsourcing
contracts, which are typically for five-year periods. Our backlog at March 31,
2000 was $32.7 million for in-house products and services and $58.5 million for
outsourcing services, with a total backlog of $91.2 million.

COMPETITION

The market for companies that provide technology solutions to community
financial institutions is competitive and fragmented, and we expect continued
competition from both existing competitors and companies that enter our existing
or future markets. Some of our current competitors have longer operating
histories, larger customer bases and greater financial and other resources. The
principal competitive factors affecting the market for our services include
comprehensiveness of the applications, features and functionality, flexibility
and ease of use, customer support, references from existing customers and price.
We compete with large vendors that offer transaction processing products and
services to financial institutions, including Bisys, Inc., AllTel Information
Services, Fiserv, Inc. and Marshall and Ilsley Corporation. In addition, we
compete with a number of providers that offer one or more specialized products
or services. There has been significant consolidation among providers of
information technology products and services to financial institutions, and we
believe this consolidation will continue in the future.

INTELLECTUAL PROPERTY, PATENTS AND TRADEMARKS

Although we believe that our success depends upon our technical expertise
more than on our proprietary rights, our future success and ability to compete
depends in part upon our proprietary technology. We have already registered or
filed applications for our primary trademarks. None of our technology is
patented. Instead we rely on a combination of contractual rights and copyrights,
trademarks and trade secrets to establish and protect our proprietary
technology. We generally enter into confidentiality agreements with our
employees, consultants, resellers, customers and potential customers. We
restrict access to and distribution of our source code and further limit the
disclosure and use of other proprietary information. Despite our efforts to
protect our proprietary rights, unauthorized parties may attempt to copy or
otherwise obtain or use our products or technology. We cannot be sure that the
steps taken by us in this regard will be adequate to prevent misappropriation of
our technology or that our competitors will not independently develop
technologies that are substantially equivalent or superior to our technology.

GOVERNMENT REGULATION

The financial services industry is subject to extensive and complex federal
and state regulation. Our current and prospective customers, which consist of
financial institutions such as community banks and credit unions, operate in
markets that are subject to substantial regulatory oversight and supervision. We
must ensure that our products and services work within the extensive and
evolving regulatory requirements applicable to our customers, including those
under the federal truth-in-lending and truth-in-deposit rules, usury laws, the
Equal Credit Opportunity Act, the Fair Housing Act, the Electronic Funds
Transfer Act, the Fair Credit Reporting Act, the Bank Secrecy Act and the
Community Reinvestment Act. The compliance of our products and services with
these requirements depends on a variety of factors including the particular
functionality, the interactive design and the classification of customers. Our
customers must assess and determine what is required of them under these
regulations and they contract with us to ensure that our products and services
conform to their regulatory needs. It is not possible to predict the impact that
any of these regulations could have on our business in the future.

We are not chartered by the Office of the Comptroller of Currency, the
Board of Governors of the Federal Reserve System, the National Credit Union
Administration or other federal or state agencies that regulate or supervise
depository institutions or other providers of financial services. The services
provided by our OutLink Data Centers are subject to examination by the Federal
depository institution regulators

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under the Bank Service Company Act. On occasion these services are also subject
to examination by state banking authorities.

We provide outsourced data and item processing through our geographically
dispersed OutLink Data Centers, electronic transaction processing through
CommLink ATM and Transaction Processing Solutions, Internet banking through
NetTeller online banking, and bank business recovery services through Centurion
Disaster Recovery. As a service provider to financial institutions, our
operations are governed by the same regulatory requirements as those imposed on
financial institutions. We are subject to periodic review by federal depository
institution regulators who have broad supervisory authority to remedy any
shortcomings identified in such reviews.

The privacy requirements in Title V of the Gramm-Leach-Bliley Act adopted
in November of 1999 represent a significant change in the federal legal
framework governing how providers of financial services in this country interact
with their customers. Proposed regulations implementing Title V establish
standards for financial institutions relating to administrative, technical and
physical safeguards for customer records and information. Financial institutions
will be required to evaluate their controls on access to customer information
and their policies for encrypting customer information while it is being
transmitted or stored on networks to which unauthorized persons may have access.
As a software company that provides services to financial institutions, we are
likely to be covered under these regulations and may have to adopt additional
safeguards within our software to ensure that we and our customers are in
compliance with the Act.

PROPERTIES

We own approximately 132 acres located in Monett, Missouri on which we
maintain six office buildings. We also own buildings in Houston, Texas; Allen,
Texas; Albuquerque, New Mexico; Angola, Indiana; Lenexa, Kansas and Shawnee,
Kansas. Our owned facilities represent approximately 280,000 square feet of
office space. We have 35 leased office facilities in 20 states which total
approximately 195,000 square feet.

We own five aircraft that are utilized for business purposes. Many of our
customers are located in communities that do not have an easily accessible
commercial airline service. We primarily use our airplanes in connection with
installation and sales of systems. Transportation costs for installation and
other customer services are billed to our customers. We lease property,
including real estate and related facilities, at the Monett, Missouri municipal
airport.

LEGAL PROCEEDINGS

We are subject to various routine legal proceedings and claims arising in
the ordinary course of business. We do not expect that the results in any of
these legal proceedings will have a material adverse effect on our business,
financial condition, results of operations or cash flows.

EMPLOYEES

As of June 30, 2000, we had 1,589 full time employees. Our employees are
not covered by a collective bargaining agreement and there have been no
labor-related work stoppages. We consider our relationship with our employees to
be good.

39
<PAGE> 42

MANAGEMENT

DIRECTORS AND OFFICERS

Set forth below is the name, age, position, term of office and a brief
account of the business experience of each person who is a director, executive
officer or significant employee of Jack Henry & Associates.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael E. Henry........................ 39 Chairman of the Board and Chief Executive Officer
Michael R. Wallace...................... 38 President, Chief Operating Officer and Director
John W. Henry........................... 65 Vice Chairman, Senior Vice President and Director
Jerry D. Hall........................... 57 Executive Vice President and Director
James J. Ellis.......................... 67 Director
Burton O. George........................ 73 Director
George R. Curry......................... 75 Director
Terry W. Thompson....................... 50 Vice President, Chief Financial Officer and Treasurer
Marguerite P. Butterworth............... 52 Vice President
Tony L. Wormington...................... 38 Vice President
</TABLE>

Michael E. Henry, the son of John W. Henry and a director of Jack Henry &
Associates since 1986, has served as Chairman of the Board and Chief Executive
Officer since October 1994. He previously served as Vice Chairman and Senior
Vice President since 1993. He served as Manager of Research and Development from
1983 to 1994. He joined Jack Henry & Associates in 1979.

Michael R. Wallace, a director of Jack Henry & Associate since 1991, has
served as President since 1993 and as the Chief Operating Officer since October
1994. He served as Manager of Installation Services from 1986 to 1993. He joined
Jack Henry & Associates in 1981.

John W. Henry, a founder of Jack Henry & Associates, has served as Vice
Chairman since October 1994. He previously served as Chairman of the Board from
1977 through 1994. He also has been a director since incorporation in 1977. He
previously served as Chief Executive Officer from 1977 through 1988 and as
President from 1977 until 1989.

Jerry D. Hall, a founder of Jack Henry & Associates, has served as
Executive Vice President since October 1994. He previously served as Chief
Executive Officer from 1990 through 1994. He also has been a director since
incorporation in 1977. He previously served as President from 1989 through 1993
and as Vice President-Operations from 1977 through 1988.

James J. Ellis, a director of Jack Henry & Associates since 1985, has been
Managing Partner of Ellis/Rosier Financial Services since 1992. Mr. Ellis served
as general manager of MONY Financial Services in Dallas, Texas from 1979 until
his retirement in 1992. Mr. Ellis also serves as a director of Merit Medical
Systems, Inc.

Burton O. George has been a director of Jack Henry & Associates since 1987.
Mr. George served as Chairman of the Board and Chief Executive Officer of First
National Bank of Berryville, Berryville, Arkansas from 1985 until his retirement
in 1989. Mr. George has held various other positions in the banking industry
since 1958.

George R. Curry, a director of Jack Henry & Associates since 1989, is
Chairman of Central Bank, Lebanon, Missouri, with which he has been affiliated
since 1949, as well as President of Central Shares, Inc., a bank holding
company.

Terry W. Thompson has served as Vice President, Chief Financial Officer and
Treasurer of Jack Henry & Associates since 1990.

40
<PAGE> 43

Marguerite P. Butterworth is a significant employee and has served as Vice
President since February of 1993. Ms. Butterworth joined Jack Henry & Associates
in 1983 and has been Hardware Manager since 1984.

Tony L. Wormington is a significant employee and has served as Vice
President since October 1998. He joined Jack Henry & Associates in 1980 and has
served as Research and Development Manager since 1993.

COMMITTEES OF THE BOARD OF DIRECTORS

The Compensation Committee currently consists of Messrs. Curry, George and
Ellis. The Compensation Committee establishes and reviews the compensation and
benefits of the executive officers, considers incentive compensation plans for
our employees and carries out duties assigned to the committee under our stock
option plans and our employee stock purchase plan.

The Audit Committee currently consists of Messrs. Curry, George and Ellis.
The Audit Committee makes recommendations to the board of directors regarding
the selection and retention of an independent auditor, reviews the scope and
results of the audit with the independent auditor and management, reviews and
evaluates our audit and control functions and regularly reviews regulatory
compliance matters pertaining to our outsourcing services and business recovery
operations. The Audit Committee operates under a written Audit Committee Charter
that has been adopted by the board of directors.

DIRECTOR COMPENSATION

The directors who are employed by Jack Henry & Associates do not receive
any separate compensation for service on the board of directors. Each
non-employee director receives $1,200 for each meeting attended and is
reimbursed for out-of-pocket expenses incurred in attending such meetings. Under
the 1995 Non-Qualified Stock Option Plan, each non-employee director is also
compensated by the annual grant of non-statutory stock options to purchase
15,000 shares of common stock, subject to an overall grant limitation under the
plan of 150,000 shares to each individual director.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is responsible for determining salaries,
incentives and other forms of compensation for our executive officers in
administering various incentive compensation and benefit plans. No member of the
Compensation Committee serves as a member of the board of directors or
Compensation Committee of any entity that has one or more executive officers
serving as members of our board or directors or Compensation Committee. No
member of the Compensation Committee has at any time been an officer or employee
of Jack Henry & Associates or any of its subsidiaries. The Compensation
Committee members, however, own Jack Henry & Associates common stock as
described in "Principal and Selling Stockholders."

41
<PAGE> 44

EXECUTIVE COMPENSATION

The following table sets forth certain information with regard to the
compensation paid by Jack Henry & Associates to our Chief Executive Officer and
to the other four most highly compensated executive officers for the three years
ended June 30, 2000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SHARES
-------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2)
--------------------------- ---- -------- -------- ------------
<S> <C> <C> <C> <C>
Michael E. Henry.................................... 2000 $247,467 $ 5,000 100,000
Chairman and Chief Executive Officer 1999 205,800 5,000 100,000
1998 205,000 5,000 --
Michael R. Wallace.................................. 2000 247,467 5,000 100,000
President and Chief Operating Officer 1999 205,800 5,000 100,000
1998 205,000 5,000 --
John W. Henry....................................... 2000 103,200 5,000 --
Vice Chairman and Senior Vice President 1999 103,200 5,000 --
1998 102,400 5,000 --
Jerry D. Hall....................................... 2000 103,200 5,000 --
Executive Vice President 1999 103,200 5,000 --
1998 135,733 5,000 --
Terry W. Thompson................................... 2000 139,133 5,000 20,000
Vice President, Chief Financial Officer 1999 120,271 5,000 --
and Treasurer 1998 104,166 15,000 20,000
</TABLE>

---------------
(1) Includes corporate 401(k) matching contribution of $5,000 for each executive
officer in each period.

(2) Adjusted for stock splits effected as dividends.

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<PAGE> 45

The following tables set forth information with respect to stock options
granted to and exercised by the executive officers named in the Summary
Compensation Table during the fiscal year ended June 30, 2000 together with the
number of options outstanding as of such date. Data, as appropriate, have been
adjusted for stock splits.

OPTION GRANTS IN FISCAL 2000

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------ VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
OPTIONS STOCK PRICE
NUMBER TOTAL APPRECIATION FOR
OF SHARES GRANTED TO OPTION TERM(1)
UNDERLYING EMPLOYEES -----------------------
OPTIONS IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
---- ---------- ----------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Henry.................. 100,000 3.4% $20.08 08/24/09 $1,262,820 $3,200,235
Michael R. Wallace................ 100,000 3.4 20.08 08/24/09 1,262,820 3,200,235
Terry W. Thompson................. 20,000 0.7 33.75 04/04/10 424,503 1,075,776
</TABLE>

---------------

(1) The amounts in these columns are required to be disclosed by the SEC at
rates set by regulation and are not intended to forecast possible future
appreciation of our common stock or amounts that may ultimately be realized
upon exercise. We have chosen not to use an alternative formula for grant
date valuation.

AGGREGATED OPTION EXERCISES IN FISCAL 2000
AND JUNE 30, 2000 OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 6/30/2000 OPTIONS AT 6/30/2000
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Henry............ -- -- 680,000 -- $27,534,687 --
Michael R. Wallace.......... 40,080 $967,905 580,000 -- 22,760,521 --
Terry W. Thompson........... 1,500 37,688 51,600 20,000 2,073,650 $327,500
</TABLE>

STOCK OPTION PLANS

We have two stock option plans under which options may currently be
granted: the 1996 Stock Option Plan and the Non-Qualified Stock Option Plan.

The 1996 Stock Option Plan is designed to attract, motivate and retain the
best available personnel and ultimately to make Jack Henry & Associates more
successful by aligning employee and stockholder interests. The persons eligible
to receive options under the 1996 Stock Option Plan are employees of Jack Henry
& Associates, and subsidiary corporations or any affiliated entity, including
employees who are also members of our board of directors.

The aggregate number of shares which may be issued, and as to which stock
options may be granted under the 1996 Stock Option plan is 6,500,000, subject to
proportionate adjustment by reason of merger, consolidation, reorganization,
recapitalization or exchange of shares or by stock dividend, stock split,
combination of shares or other changes in capital structure effected without
receipt of consideration. If any stock option granted under the 1996 Stock
Option Plan expires, is surrendered in whole or in part, or terminates for any
reason without being exercised in full, then the number of shares subject to the
stock option will again be available for purposes of the 1996 Stock Option Plan.

The 1996 Stock Option Plan is administered by the Compensation Committee of
our board of directors. The Compensation Committee has the power to determine
the persons to be granted options, the number of shares to be covered by such
options, whether such options are to be incentive stock options

43
<PAGE> 46

under Section 422A of the Internal Revenue Code, or nonqualified options, and
the time or times at which options are to be exercisable. However, no option
granted under the 1996 Stock Option Plan shall have a term in excess of 10 years
from the grant date. The aggregate fair market value of the common stock with
respect to which Incentive Options granted under the 1996 Stock Option Plan are
exercisable shall not exceed $100,000 per grantee or such greater amount as may
be permitted by later amendments to the Internal Revenue Code.

The option price per share shall be fixed by the Compensation Committee,
but in no event shall the option price per share be less than 100% of the fair
market value of a share of common stock on the date of the option grant.

Under the terms of the 1996 Stock Option Plan, options terminate 30 days
after termination of employment, three months after retirement, one year after
death or 10 years after grant. Furthermore, for the first six months after the
date of grant of the option, no option granted under the 1996 Stock Option Plan
shall be transferable by the optionee other than by will or by the laws of
descent and distribution. Thereafter, options may be transferred during the
lifetime of an optionee to any members of the immediate family of the optionee
and any trust established for the benefit of the optionee or the optionee's
immediate family members.

In the event of a sale of all or substantially all of the our assets or 50%
or more of the outstanding voting stock by means of a sale, merger,
reorganization or liquidation, our board of directors shall have discretionary
authority to authorize the surrender of all unexercised options in exchange for
a cash distribution equal in amount to the difference between (i) the fair
market value of the authorized surrender date of the shares for which the
surrender option or portion thereof is at the time exercisable, and (ii) the
aggregate option price payable for such shares. Further, if, in connection with
any such sale, merger, reorganization or liquidation, a provision is made for
each outstanding option to either be assumed by the successor corporation or be
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation, each person holding unexercised options shall be entitled
to have such options assumed by the successor corporation or replaced with a
comparable option.

The 1996 Stock Option Plan, unless sooner terminated, shall terminate at
the close of business on November 1, 2006. The board shall have the authority to
effect, at any time and from time to time, with the consent of the affected
optionee, the cancellation of any or all outstanding options under the 1996
Stock Option Plan and to grant new options in substitution under the 1996 Stock
Option Plan covering the same or different numbers of shares of common stock but
having an option price per share not less than 100% of fair market value on the
new grant date. With certain limitations, our board of directors has the power
and authority to amend or modify the 1996 Stock Option Plan.

The Non-Qualified Stock Option Plan was adopted by Jack Henry & Associates
in 1995 for our outside directors. The Non-Qualified Stock Option Plan is
designed to attract, motivate and retain the best available members of our board
of directors and to properly align director interests with those of the
stockholders. Our board of directors administers the Non-Qualified Stock Option
Plan and determines to whom options are to be granted and the terms and
conditions, including the number of shares and the period of exercisability
thereof.

Subject to adjustments as provided in the Non-Qualified Stock Option Plan,
the number of shares of common stock that may be issued under the plan may not
in the aggregate exceed 600,000 shares with a maximum of 150,000 for each
director. Options granted under the Non-Qualified Stock Option Plan are
exercisable six months after the grant. The exercise price of a non-qualified
option shall be 100% of the fair market value of the stock at the grant date.
The administrator may provide that the option price is payable at the time of
the exercise in cash, by surrender of shares and certain other forms of cashless
exercise. Under the Non-Qualified Stock Option Plan, options are not
transferable by a participant except if transferred by will or the laws of
descent and distribution. The option granted under the plan terminates when the
optionee's director status ends, upon surrender of the option, or 10 years after
the grant. In the event of a merger or sale of substantially all the assets,
each option shall be assumed or substituted by the

44
<PAGE> 47

successor corporation or by a parent or subsidiary of the successor corporation.
All options will fully vest if the successor refuses to assume or substitute
those outstanding options.

Jack Henry & Associates has options outstanding under several older plans,
including the 1987 Stock Option Plan and the Non-Qualified Stock Option Plan,
which are similar to and predecessors of the 1996 Stock Option Plan and the 1995
Non-Qualified Stock Option Plan. In addition, in connection with its acquisition
of The Peerless Group, Inc. in December of 1998, Jack Henry & Associates fully
assumed The Peerless Group, Inc. 1997 Stock Option Plan. The Peerless Group,
Inc. 1997 Stock Option Plan is similar in terms to our 1996 Stock Option Plan.
While these plans are still in effect with respect to outstanding options, we
have no intention of issuing any new options thereunder.

45
<PAGE> 48

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of common stock as of June 30, 2000 and as adjusted to reflect the
completion of this offering by:

- each of Jack Henry & Associates' directors and executive officers;

- each person who is known to us to own beneficially more than five
percent of the outstanding shares of the common stock, including the
selling stockholders; and

- all directors and executive officers of Jack Henry & Associates as a
group.

The address for the following stockholders, unless otherwise indicated, is
c/o Jack Henry & Associates, Inc., 663 Highway 60, Monett, Missouri 65708. The
percentage of common stock disclosed assumes no exercise of the underwriters'
over-allotment options to purchase up to 750,000 shares of common stock from the
selling stockholders. Applicable percentage ownership is based on 41,357,852
shares of common stock outstanding as of June 30, 2000 and 43,357,852 shares
outstanding immediately following completion of this offering. Beneficial
ownership is determined in accordance with the rules and regulations of the
Securities and Exchange Commission. Shares of common stock subject to options
which are currently exercisable or exercisable within 60 days are deemed
outstanding for computing the percentage ownership of the person holding the
options or warrants, but are not deemed outstanding for computing the percentage
ownership of any other person.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING(1) AFTER THE OFFERING(1)
-------------------------- --------------------------
PERCENT OF PERCENT OF
SHARES SHARES SHARES
NAME NUMBER OUTSTANDING OFFERED NUMBER OUTSTANDING
---- ----------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
John W. Henry(2).................. 1,913,429 4.6 % 500,000 1,413,429 3.3 %
Michael E. Henry,
Vicki Jo Henry and JKHY
Partners(3)..................... 6,778,824 16.1 500,000 5,278,824(4) 12.0
Jerry D. Hall(5).................. 3,346,834 8.1 1,000,000 2,346,834 5.4
Eddina F. Mackey(6)............... 2,747,960 6.6 1,000,000 1,747,960(4) 4.0
411 Lincoln Road South
Monett, MO
Michael R. Wallace(7)............. 739,795 1.8 739,795 1.7
Terry W. Thompson(8).............. 291,461 * 291,461 *
James J. Ellis(9)................. 275,840 * 275,840 *
Burton O. George(9)............... 167,010 * 167,010 *
George R. Curry(9)................ 348,798 * 348,798 *
All directors and executive
officers as a group (8
persons)(10).................... 13,862,901 32.3 10,862,901 24.2
</TABLE>

---------------

* Less than 1%

(1) The persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
except as noted below. With respect to shares held in our 401(k) Employee
Stock Ownership Plan (the 401(k) ESOP), a participant has the right to
direct the voting and disposition of shares allocated to his account.

(2) Reflects information in filings with the SEC that Mr. Henry holds 1,829,128
shares individually and 84,301 shares are allocated to his 401(k) ESOP
account. In the event the underwriters exercise their over-allotment
options in full, the number of shares beneficially owned by Mr. Henry after
the offering will be 1,188,429, representing 2.7% of the total shares
outstanding.

(3) Reflects information in filings with the SEC by Michael E. Henry, his
sister Vicki Jo Henry and JKHY Partners, their family partnership. Michael
E. Henry separately is deemed to beneficially own

46
<PAGE> 49

6,778,824 shares, including 74,418 shares held individually, 32,356 shares
allocated to his 401(k) ESOP account, 680,000 shares currently acquirable by
exercise of outstanding stock options, 3,245,000 shares held by JKHY Partners,
2,747,050 shares in various trusts specified in note 6 below and the Henry
Family Limited Partnership. Michael E. Henry is deemed to share beneficial
ownership in the shares held by the JKHY Partners, by the trusts
established by his mother, Eddina F. Mackey, and by the Henry Family
Limited Partnership because he has been granted proxies to vote all these
shares. Vicki Jo Henry does not beneficially own any shares of common stock
in her individual capacity and her business address is 6851 South Holly
Circle, Suite 270, Englewood, Colorado 80112. In the event the underwriters
exercise their over-allotment options in full, the number of shares
beneficially and collectively owned by Michael E. Henry, Vicki Jo Henry and
JKHY Partners after the offering will be 4,903,824, representing 11.1% of
the total shares outstanding.

(4) 500,000 shares are being sold in this offering by JKHY Partners and
1,000,000 shares are being sold by trusts and a foundation established by
Ms. Mackey. Michael E. Henry is not selling in the offering any shares
which he individually owns.

(5) Includes 97,072 shares held in the 401(k) ESOP for Mr. Hall's account and
105,000 shares beneficially owned by his wife. In the event the
underwriters exercise their over-allotment options in full, the number of
shares beneficially owned by Mr. Hall after the offering will be 2,196,834,
representing 5.1% of the total shares outstanding.

(6) Includes 2,167,005 shares held in a revocable trust for Ms. Mackey's
benefit, 120,045 shares held by five charitable remainder Unitrusts
established for the benefit of family members, 160,000 shares held in the
charitable Pearl Foundation, 300,000 shares held by the Henry Family
Limited Partnership and 910 shares owned by Ms. Mackey's husband. As
described above in note 3, beneficial ownership of these shares, with the
exception of the 910 shares owned by Ms. Mackey's husband, is shared with
Michael E. Henry. In the event the underwriters exercise their over-
allotment options in full, the number of shares beneficially owned by Ms.
Mackey after the offering will be 1,597,960, representing 3.7% of the total
shares outstanding. Following are the trusts for which Ms. Mackey serves as
trustee that are selling shares in the offering and the number of shares to
be sold by each:

<TABLE>
<S> <C>
Eddina F. Mackey Trust 719,955 shares
E. F. Mackey Charitable Remainder Unitrust for
benefit of Michael E. Henry 33,350 shares*
E. F. Mackey Charitable Remainder Unitrust for
benefit of Vicki Jo Henry 33,350 shares*
E. F. Mackey Charitable Remainder Unitrust for
benefit of Donna E. Jensen 33,350 shares*
E. F. Mackey Charitable Remainder Unitrust for
benefit of Darla S. Lawrence 13,320 shares*
E. F. Mackey Charitable Remainder Unitrust for
benefit of Douglas M. Mackey 6,675 shares*
The Pearl Foundation 160,000 shares*
</TABLE>

*Ms. Mackey disclaims beneficial ownership with respect to these shares.

(7) Includes 580,000 shares currently acquirable by exercise of outstanding
stock options and 63,247 shares held in the 401(k) ESOP for Mr. Wallace's
account.

(8) Includes 51,600 shares currently acquirable by exercise of outstanding
stock options and 13,751 shares held in the 401(k) ESOP for Mr. Thompson's
account.

(9) Includes 75,000 shares each currently acquirable by exercise of outstanding
stock options.

(10) Beneficially owned share amounts include 1,536,600 shares which are or will
be acquirable within 60 days under outstanding stock options, and 290,727
shares held in the 401(k) ESOP for the accounts of all executive officers
and directors as a group.

47
<PAGE> 50

DESCRIPTION OF CAPITAL STOCK

Under the Jack Henry & Associates certificate of incorporation, our
authorized capital stock consists of 50,000,000 shares of common stock, par
value $0.01 per share, and 500,000 shares of preferred stock, par value $1.00
per share.

COMMON STOCK

The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding preferred stock, holders
of common stock are entitled to receive ratably such dividends as may be
declared by the board of directors out of legally available funds. In the event
of a liquidation or dissolution of Jack Henry & Associates, holders of common
stock are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preference of any outstanding preferred stock.

Holders of common stock have no preemptive rights and have no rights to
convert their common stock into any other securities. All of the outstanding
shares of common stock are, and the shares of common stock issued pursuant to
this offering will be, duly authorized, validly issued, fully paid and
nonassessable.

PREFERRED STOCK

Our board of directors is authorized to designate any series of preferred
stock and the powers, preferences and rights of the shares of such series and
the qualifications, limitations or restrictions thereof without further action
by the holders of common stock. No shares of preferred stock are issued or
outstanding.

Our board of directors may create and issue a series of preferred stock
with rights, privileges or restrictions, and adopt a stockholder rights plan,
having the effect of discriminating against an existing or prospective holder of
such securities as a result of such security holder beneficially owning or
commencing a tender offer for a substantial amount of common stock. One of the
effects of authorized but unissued and unreserved shares of capital stock may be
to render more difficult or discourage an attempt by a potential acquiror to
obtain control of Jack Henry & Associates by means of a merger, tender offer,
proxy contest or otherwise, and thereby protect the continuity of our
management. The issuance of such shares of capital stock may have the effect of
delaying, deferring or preventing a change in control without any further action
by the stockholders. We have no present intention to adopt a stockholder rights
plan, but could do so without stockholder approval at any future time.

TRANSFER AGENT AND REGISTRAR

UMB Bank, N.A. is the transfer agent and registrar for our common stock.

ANTI-TAKEOVER EFFECTS OF OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AND BYLAWS AND PROVISIONS OF DELAWARE LAW

Provisions of our charter and bylaws may make it more difficult for a third
party to acquire, or may discourage a third party from attempting to acquire,
control of us. These provisions could limit the price that investors might be
willing to pay in the future for shares of our common stock. These provisions:

- require a two-thirds vote of the stockholders to amend some provisions
of our certificate of incorporation;

- require a two-thirds vote of the stockholders to approve an acquisition
of our company;

- require a two-thirds vote of the stockholders to amend some provisions
of our bylaws;

- prevent stockholder action by written consent in lieu of annual meeting;

48
<PAGE> 51

- require special meetings of the stockholders be called by the Chairman
of the Board, the President, the board of directors as a whole, or
two-thirds of the stockholders; and

- require vacancies on the board of directors may only be filled by a vote
of the majority of the directors.

In addition, subject to limitations prescribed by law, our board of
directors has the authority to issue up to 500,000 shares of preferred stock and
to determine the price, rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the stockholders. The issuance of preferred stock, while providing flexibility
in connection with possible financing or acquisitions or other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock.

These and other provisions contained in our charter and bylaws could have
the effect of delaying or preventing a change in control.

We are also subject to Section 203 of the Delaware General Corporation Law
which, subject to exceptions, prohibits a Delaware corporation from engaging in
any business combination with any interested stockholder for a period of three
years following the date that a stockholder became an interested stockholder,
unless:

- prior to that date, the board of directors approved either the business
combination or the transaction which resulted in the stockholder
becoming an interested stockholder; or

- upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock outstanding at the time the transaction
commenced; or

- on or following that date the business combination is approved by the
board of directors and authorized at an annual or special meeting of
stockholders, by the affirmative vote of at least two-thirds of the
outstanding voting stock that is not owned by the interested
stockholder.

49
<PAGE> 52

SHARES ELIGIBLE FOR FUTURE SALE

In general, under Rule 144 as currently in effect any person (or persons
whose shares are aggregated), including an affiliate, who has beneficially owned
shares for a period of at least one year is entitled to sell, within any
three-month period a number of shares that does not exceed the greater of:

- 1% of the then-outstanding shares of common stock, and

- the average weekly trading volume in the common stock during the four
calendar weeks immediately preceding the date on which the notice of
such sale on Form 144 is filed with the SEC.

Sales under Rule 144 are also subject to certain provisions relating to
notice and manner of sale and the availability of current public information
about Jack Henry & Associates. In addition, a person (or persons whose shares
are aggregated) who has not been an affiliate of Jack Henry & Associates at any
time during the 90 days immediately preceding a sale and who has beneficially
owned the shares for at least two years, would be entitled to sell such shares
under Rule 144(k) without regard to the volume limitation and other conditions
described above. The foregoing summary of Rule 144 is not intended to be a
complete description.

We have filed six registration statements on Form S-8, to register shares
of common stock reserved for issuance under our option plans and employee stock
purchase plan. Shares issued under the foregoing plans may be sold in the open
market, subject, in the case of certain holders, to the Rule 144 limitations
applicable to affiliates, the above-referenced lock-up agreements and vesting
restrictions imposed by us. Of that number of shares, 3,810,384 shares are
subject to options that were exercisable as of the date of this prospectus.

50
<PAGE> 53

UNDERWRITING

We and the selling stockholders have entered into an underwriting agreement
with the underwriters named below, for whom Prudential Securities Incorporated,
CIBC World Markets Corp., Robert W. Baird & Co. Incorporated, George K. Baum &
Company and A.G. Edwards & Sons, Inc. are acting as representatives. We and the
selling stockholders are obligated to sell, and the underwriters are obligated
to purchase, all of the shares offered on the cover page of this prospectus, if
any are purchased. Subject to certain conditions of the underwriting agreement,
each underwriter has severally agreed to purchase the shares indicated opposite
its name.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Prudential Securities Incorporated..........................
CIBC World Markets Corp.....................................
Robert W. Baird & Co. Incorporated..........................
George K. Baum & Company....................................
A.G. Edwards & Sons, Inc....................................
---------
Total.................................................. 5,000,000
=========
</TABLE>

The underwriters may sell more shares than the total number of shares
offered on the cover page of this prospectus and they have, for a period of 30
days from the date of this prospectus, over-allotment options to purchase up to
750,000 additional shares from the selling stockholders. If any additional
shares are purchased, the underwriters in the same proportion as per the table
above will severally purchase the shares from the selling stockholders.

The representatives of the underwriters have advised us and the selling
stockholders that the shares will be offered to the public at the offering price
indicated on the cover page of this prospectus. The underwriters may allow
selected dealers a concession not in excess of $ per share and such
dealers may reallow a concession not in excess of $ per share to
certain other dealers. After the shares are released to the public, the
representatives may change the offering price and the concessions.

We and the selling stockholders have agreed to pay to the underwriters the
following fees, assuming both no exercise and full exercise of the underwriters'
over-allotment options to purchase additional shares:

<TABLE>
<CAPTION>
TOTAL FEES
------------------------------------------------
FEE WITHOUT EXERCISE OF FULL EXERCISE OF
PER SHARE OVER-ALLOTMENT OPTIONS OVER-ALLOTMENT OPTIONS
--------- ---------------------- ----------------------
<S> <C> <C> <C>
Fees paid by us........................... $ $ --
Fees paid by the selling stockholders..... $ $ $
</TABLE>

In addition, we estimate that we will spend approximately $625,000 in
expenses for this offering, including those of the selling stockholders. We and
the selling stockholders have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act, or
contribute to payments that the underwriters may be required to make in respect
of these liabilities.

We, our executive officers and directors, and the selling stockholders have
entered into lock-up agreements pursuant to which we and they have agreed not to
offer or sell any shares of common stock or securities convertible into or
exchangeable or exercisable for shares of common stock for a period of 90 days
from the date of this prospectus without the prior written consent of Prudential
Securities Incorporated, on behalf of the underwriters. Prudential Securities
Incorporated may, at any time and without notice, waive the terms of these
lock-up agreements specified in the underwriting agreement.

51
<PAGE> 54

Prudential Securities Incorporated, on behalf of the underwriters, may
engage in the following activities in accordance with applicable securities
rules:

- Create a syndicate short position by making short sales of our common
stock and may purchase our common stock on the open market to cover
syndicate short positions created by short sales. Short sales involve
the sale by the underwriters of a greater number of shares of common
stock than they are required to purchase in the offering. Short sales
can be either "covered" or "naked." "Covered" short sales are sales made
in an amount not greater than the underwriters' over-allotment options
to purchase additional shares in the offering. "Naked" short sales are
sales in excess of the over-allotment options. A "naked" short position
is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the common stock in the
open market after pricing that could adversely affect investors who
purchase in the offering.

- Stabilizing and short covering. Stabilizing bids to purchase the shares
are permitted if they do not exceed a specified maximum price.
Prudential Securities Incorporated, on behalf of the underwriters, may
close out any covered short position by either exercising the
over-allotment options or purchasing shares in the open market and must
close out any naked short position by purchasing shares in the open
market. In determining the source of shares to close out the covered
short position, Prudential Securities Incorporated, on behalf of the
underwriters, will consider, among other things, the price of shares
available for purchase in the open market as compared to the price
shares may be purchased through the over-allotment options. These
activities may cause the price of the shares to be higher than would
otherwise exist in the open market.

- Penalty bids permitting the representatives to reclaim concessions from
a syndicate member of the shares purchased in the stabilizing or short
covering transactions.

Such activities, which may be commenced and discontinued at any time, may
be effected on the Nasdaq National Market, in the over-the-counter market or
otherwise. Also, prior to the pricing of the shares and until such time when a
stabilizing bid may have been made, some or all of the underwriters who are
market makers in the shares may make bids for or purchases of shares subject to
certain restrictions, known as passive market making activities.

Each underwriter has represented that it has complied and will comply with
all applicable laws and regulations in connection with the offer, sale or
delivery of the shares and related offering materials in the United Kingdom,
including:

- the Public Offers of Securities Regulations 1995;

- the Financial Services Act 1986; and

- the Financial Services Act 1986, (Investment Advertisements)
(Exemptions) Order 1996 (as amended).

Prudential Securities Incorporated and George K. Baum & Company have, from
time to time, performed various investment banking and financial advisory
services on a fee for services basis for Jack Henry & Associates.

Prudential Securities Incorporated facilitates the marketing of new issues
online through its Prudential Securities.com division. Clients of Prudential
Advisor(SM), a full service brokerage firm program, may view offering terms and
a prospectus online and place orders through their financial advisors.

LEGAL MATTERS

Certain legal matters will be passed on for Jack Henry & Associates, Inc.
by Shughart Thomson & Kilroy, P.C. of Kansas City, Missouri. Certain legal
matters will be passed on for the underwriters by Brown & Wood LLP of New York,
New York.

52
<PAGE> 55

EXPERTS

The consolidated financial statements of Jack Henry & Associates, Inc. and
subsidiaries as of June 30, 1998 and 1999 and for each of the three years in the
period ended June 30, 1999, included in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and have been so included in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.

The financial statements of BancTec Financial Systems, a unit of BancTec,
Inc., as of August 31, 1999 and for the twelve months ended August 31, 1999,
included in this prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein (which report
expresses an unqualified opinion and includes an explanatory paragraph referring
to the fact that the financial statements of BancTec Financial Systems may not
necessarily be indicative of the conditions that would have existed or the
results of operations if BancTec Financial Systems had been operated as an
unaffiliated company), and have been so included in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

The financial statements of Symitar Systems, Inc. as of December 31, 1999
and for the year ended December 31, 1999, included in this prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein and have been so included in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

AVAILABLE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1. This prospectus, which forms a part of the registration
statement, does not contain all the information included in the registration
statement. Certain information is omitted and you should refer to the
registration statement and its exhibits. With respect to references made in this
prospectus to any contract or other document of Jack Henry & Associates, Inc.,
such references are not necessarily complete and you should refer to the
exhibits attached to the registration statement for copies of the actual
contract or document. You may review a copy of the registration statement,
including exhibits filed therewith, at the Commission's public reference
facilities in Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You may also obtain
copies of such materials from the Public Reference Section of the Commission,
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants such as Jack Henry & Associates, Inc. that file
electronically with the Commission.

This prospectus includes statistical data regarding the banking business
sector which were obtained from industry publications, including reports
generated by Computer Based Solutions, Inc. These industry publications
generally indicate that they have obtained information from sources believed to
be reliable, but they do not guarantee the accuracy and completeness of such
information. While we believe these industry publications to be reliable, we
have not independently verified such data.

53
<PAGE> 56

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS OF JACK HENRY &
ASSOCIATES, INC.
Independent Auditors' Report.............................. F-2
Consolidated Statements of Income for the Years Ended June
30, 1997, 1998 and 1999 and Unaudited Consolidated
Statements of Income for the Nine Months Ended March
31, 1999 and 2000...................................... F-3
Consolidated Balance Sheets at June 30, 1998 and 1999 and
Unaudited Consolidated Balance Sheet at March 31,
2000................................................... F-4
Consolidated Statements of Changes in Stockholders' Equity
for the Years Ended June 30, 1997, 1998 and 1999 and
Unaudited Consolidated Statement of Changes in
Stockholders' Equity for the Nine Months Ended March
31, 2000............................................... F-5
Consolidated Statements of Cash Flows for the Years Ended
June 30, 1997, 1998 and 1999 and Unaudited Consolidated
Statements of Cash Flows for the Nine Months Ended
March 31, 1999 and 2000................................ F-6
Notes to Consolidated Financial Statements................ F-7
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION OF JACK
HENRY ASSOCIATES, INC.
Unaudited Pro Form Combined Statement of Income for the
Year Ended June 30, 1999............................... F-21
Unaudited Pro Forma Combined Statement of Income for the
Nine Month Period Ended March 31, 2000................. F-22
Unaudited Pro Forma Combined Balance Sheet at March 31,
2000................................................... F-23
Notes to Unaudited Pro Forma Combined Financial
Information............................................ F-24
FINANCIAL STATEMENTS OF BANCTEC FINANCIAL SYSTEMS, A UNIT OF
BANCTEC, INC.
Independent Auditors' Report.............................. F-25
Balance Sheet at August 31, 1999.......................... F-26
Statement of Operations for the Twelve Months Ended August
31, 1999............................................... F-27
Statement of Changes in Equity for the Twelve Months Ended
August 31, 1999........................................ F-28
Statement of Cash Flows for the Twelve Months Ended August
31, 1999............................................... F-29
Notes to Financial Statements............................. F-30
FINANCIAL STATEMENTS OF SYMITAR SYSTEMS, INC.
Independent Auditors' Report.............................. F-34
Balance Sheet at December 31, 1999 and Unaudited Balance
Sheet at March 31, 2000................................ F-35
Statement of Income for the Year Ended December 31, 1999
and Unaudited Statement of Income for the Three Months
Ended March 31, 2000................................... F-36
Statement of Stockholders' Equity for the Year Ended
December 31, 1999 and Unaudited Statement of
Stockholders' Equity for the Three Months Ended March
31, 2000............................................... F-37
Statement of Cash Flows for the Year Ended December 31,
1999 and Unaudited Statement of Cash Flows for the
Three Months Ended March 31, 2000...................... F-38
Notes to Financial Statements............................. F-39
</TABLE>

F-1
<PAGE> 57

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Jack Henry & Associates, Inc.:

We have audited the accompanying consolidated balance sheets of Jack Henry
& Associates, Inc. and Subsidiaries (the "Company") as of June 30, 1999 and
1998, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended June 30, 1999.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Jack Henry & Associates, Inc.
and Subsidiaries at June 30, 1999 and 1998, and the results of their operations
and their cash flows for the three years in the period ended June 30, 1999 in
conformity with accounting principles generally accepted in the United States of
America.

/S/ DELOITTE & TOUCHE LLP
St. Louis, Missouri
August 23, 1999
(September 8, 1999 as to Note 13 and July 6, 2000 as to Note 14
and the effects of the stock split described in Note 1)

F-2
<PAGE> 58

JACK HENRY & ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
JUNE 30, MARCH 31,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues
Software licensing and installation............ $ 31,930 $ 39,484 $ 47,181 $ 36,108 $ 35,888
Maintenance/support and service................ 37,510 46,835 71,278 52,995 69,812
Hardware sales................................. 56,816 61,916 75,068 59,452 50,231
-------- -------- -------- -------- --------
Total revenues............................... 126,256 148,235 193,527 148,555 155,931
-------- -------- -------- -------- --------
Cost of Sales
Cost of hardware............................... 41,016 43,335 54,661 43,350 35,920
Cost of services............................... 32,001 37,674 52,582 39,792 54,865
-------- -------- -------- -------- --------
Total cost of sales.......................... 73,017 81,009 107,243 83,142 90,785
-------- -------- -------- -------- --------
Gross profit..................................... 53,239 67,226 86,284 65,413 65,146
-------- -------- -------- -------- --------
Operating Expenses
Selling and marketing expense.................. 12,750 15,124 14,030 11,384 12,514
Research and development expense............... 3,012 4,163 5,183 3,758 5,780
General and administrative expense............. 9,607 11,675 17,347 12,729 13,692
-------- -------- -------- -------- --------
Total operating expense...................... 25,369 30,962 36,560 27,871 31,986
-------- -------- -------- -------- --------
Operating income from continuing operations...... 27,870 36,264 49,724 37,542 33,160
-------- -------- -------- -------- --------
Other Income (Expense)
Interest income................................ 738 1,319 1,619 1,430 738
Interest expense............................... (40) (34) (93) (72) (1,143)
Other, net..................................... 109 348 363 346 1,629
-------- -------- -------- -------- --------
Total other income........................... 807 1,633 1,889 1,704 1,224
-------- -------- -------- -------- --------
Income from continuing operations before taxes... 28,677 37,897 51,613 39,246 34,384
Provision for income taxes....................... 10,185 13,692 18,887 14,622 11,468
-------- -------- -------- -------- --------
Income from continuing operations.............. 18,492 24,205 32,726 24,624 22,916
Loss from discontinued operations................ (450) (668) (758) (758) (332)
-------- -------- -------- -------- --------
Net income....................................... $ 18,042 $ 23,537 $ 31,968 $ 23,866 $ 22,584
======== ======== ======== ======== ========
Diluted Earnings Per Share:
Income from continuing operations.............. $ 0.46 $ 0.58 $ 0.77 $ 0.58 $ 0.54
Loss from discontinued operations.............. (0.01) (0.02) (0.02) (0.02) (0.01)
-------- -------- -------- -------- --------
Net income..................................... $ 0.45 $ 0.57 $ 0.75 $ 0.56 $ 0.53
======== ======== ======== ======== ========
Diluted weighted average shares outstanding...... 40,214 41,593 42,641 42,663 42,343
======== ======== ======== ======== ========
Basic Earnings Per Share:
Income from continuing operations.............. $ 0.49 $ 0.61 $ 0.81 $ 0.61 $ 0.56
Loss from discontinued operations.............. (0.01) (0.02) (0.02) (0.02) (0.01)
-------- -------- -------- -------- --------
Net Income..................................... $ 0.47 $ 0.59 $ 0.79 $ 0.59 $ 0.55
======== ======== ======== ======== ========
Basic weighted average shares outstanding........ 38,025 39,770 40,337 40,250 40,771
======== ======== ======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 59

JACK HENRY & ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
JUNE 30,
--------------------- MARCH 31,
1998 1999 2000
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.......................... $ 24,733 $ 3,376 $ 13,025
Investments, at amortized cost..................... 3,229 6,702 1,034
Trade receivables.................................. 43,348 52,239 37,803
Income taxes receivable............................ 1 1,244 --
Prepaid cost of product............................ 4,046 9,106 669
Prepaid expenses and other......................... 8,036 9,109 22,356
-------- -------- --------
Total........................................... 83,393 81,776 74,887
-------- -------- --------
Property and equipment, net.......................... 31,492 66,192 80,520
-------- -------- --------
Other Assets:
Intangible assets, net of amortization............. 15,272 25,181 65,551
Computer software, net of amortization............. 2,838 3,015 3,626
Other.............................................. 835 1,096 1,280
-------- -------- --------
Total........................................... 18,945 29,292 70,457
-------- -------- --------
Total assets.................................. $133,830 $177,260 $225,864
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................................... $ 8,130 $ 5,036 $ 6,918
Short-term borrowings.............................. 400 399 29,855
Accrued expenses................................... 5,758 8,484 6,541
Accrued income taxes............................... 236 66 1,722
Deferred revenues.................................. 33,096 44,664 41,300
Current portion of long-term debt.................. 15 16 17
-------- -------- --------
Total........................................... 47,635 58,665 86,353
-------- -------- --------
Long-term debt....................................... 239 211 182
-------- -------- --------
Deferred income taxes................................ 2,365 2,586 1,907
-------- -------- --------
Total liabilities............................... 50,239 61,462 88,442
-------- -------- --------
Stockholders' Equity:
Preferred stock; $1 par value; 500,000 shares
authorized; none issued......................... -- -- --
Common stock; $.01 par value; 50,000,000 shares
authorized; shares issued 1998 -- 20,194,870;
1999 -- 20,517,090; 2000 -- 41,121,803.......... 202 205 411
Additional paid-in capital......................... 26,267 32,210 36,029
Retained earnings.................................. 57,122 83,383 100,982
-------- -------- --------
Total stockholders' equity...................... 83,591 115,798 137,422
-------- -------- --------
Total liabilities and stockholders' equity...... $133,830 $177,260 $225,864
======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 60

JACK HENRY & ASSOCIATES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
NINE
MONTHS
YEARS ENDED JUNE 30, ENDED
----------------------------------------- MARCH 31,
1997 1998 1999 2000
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Preferred Shares (500,000 authorized):.......... -- -- -- --
Common Shares (50,000,000 authorized):
Shares, beginning of year..................... 13,358,563 20,023,689 20,194,870 20,517,090
Shares issued upon exercise of stock
options..................................... 618,750 104,465 314,277 268,530
Shares issued for Employee Stock Purchase
Plan........................................ 1,659 5,926 7,943 7,678
Shares issued for acquisitions................ 56,144 60,790 -- --
Stock dividend................................ 5,988,573 -- -- 20,328,505
----------- ----------- ----------- -----------
20,023,689 20,194,870 20,517,090 41,121,803
Less: Held in treasury........................ (15,410) -- -- --
----------- ----------- ----------- -----------
Shares, end of period....................... 20,008,279 20,194,870 20,517,090 41,121,803
=========== =========== =========== ===========
Common Stock -- Par Value $.01 Per Share:
Balance, beginning of year.................... $ 133 $ 200 $ 202 $ 205
Shares issued upon exercise of stock
options..................................... 6 2 3 3
Shares issued for acquisitions................ 1 -- -- --
Stock dividend................................ 60 -- -- --
Stock split................................... -- -- -- 203
----------- ----------- ----------- -----------
Balance, end of period...................... 200 202 205 411
----------- ----------- ----------- -----------
Additional Paid-in Capital:
Balance, beginning of period.................. 18,434 22,467 26,267 32,210
Shares issued upon exercise of stock
options..................................... 2,788 1,620 3,264 3,698
Shares issued for Employee Stock Purchase
Plan........................................ 42 176 312 324
Shares issued for acquisitions................ (306) 1,228 150 --
Stock dividend................................ (60) -- -- --
Sale of treasury stock........................ (451) -- -- --
Tax benefit on exercise on exercise of
options..................................... 2,020 776 2,217 --
Stock split................................... -- -- -- (203)
----------- ----------- ----------- -----------
Balance, end of period...................... 22,467 26,267 32,210 36,029
----------- ----------- ----------- -----------
Treasury Stock:
Balance, beginning of period.................. -- (293) -- --
Purchases of treasury stock................... (7,469) -- (5) (5)
Sales of treasury stock....................... 6,871 -- 5 5
Shares issued for acquisitions................ 305 293 -- --
----------- ----------- ----------- -----------
Balance, end of period...................... (293) -- -- --
----------- ----------- ----------- -----------
Retained Earnings:
Balance, beginning of period.................. 23,844 38,175 57,122 83,383
Net loss for the three months ended September
30, 1999 -- Sys-Tech, Inc................... -- -- -- 264
Retained deficit of acquired businesses....... (80) (62) (19) --
Net income.................................... 18,042 23,537 31,968 22,584
Dividends (1997 -- $.10 per share;
1998 -- $.12 per share;
1999 -- $.145 per share;
2000 -- $.13 per share)............ (3,631) (4,528) (5,688) (5,249)
----------- ----------- ----------- -----------
Balance, end of period...................... 38,175 57,122 83,383 100,982
----------- ----------- ----------- -----------
Total stockholders' equity...................... $ 60,549 $ 83,591 $ 115,798 $ 137,422
=========== =========== =========== ===========
</TABLE>

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 61

JACK HENRY & ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JUNE 30, MARCH 31,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Income from continuing operations................... $ 18,492 $ 24,205 $ 32,726 $ 24,624 $ 22,916
Adjustments to Reconcile Income from Continuing
Operations to Cash from Operating Activities
Depreciation and amortization..................... 5,212 6,362 7,901 6,231 10,662
Provision for deferred income taxes............... 322 478 221 -- --
Gain on sale of investment........................ -- -- -- (78) (1,105)
Other............................................. 87 89 157 7 4
Changes In:
Trade receivables................................. (8,181) (12,215) (8,540) 21,939 21,723
Prepaid expenses and other........................ (2,057) (2,814) (6,397) (2,532) (6,885)
Accounts payable.................................. 429 1,532 (3,308) (8,582) 1,370
Accrued expenses.................................. 2,499 155 2,716 171 (2,966)
Income taxes...................................... 65 890 805 114 2,900
Deferred revenues................................. 3,088 7,625 11,568 (6,550) (7,047)
-------- -------- -------- -------- --------
Net cash from continuing operations............. 19,956 26,307 37,849 35,344 41,572
-------- -------- -------- -------- --------
Cash flows from discontinued operations............... (819) (1,075) (608) (306) 700
-------- -------- -------- -------- --------
Cash Flows from Investing Activities:
Capital expenditures................................ (13,714) (9,949) (38,884) (31,489) (18,733)
Purchases of investments............................ (5,887) (3,177) (6,708) (5,522) --
Proceeds from maturities of investments............. 3,002 5,800 3,100 2,100 5,668
Proceeds from sale of investment.................... -- -- -- -- 3,605
Other assets........................................ (2,500) -- -- -- --
Purchases of customer contracts..................... (33) -- (7,105) -- --
Computer software developed/purchased............... (191) (281) (867) (362) (632)
Acquisition costs, net of cash acquired............. (282) (1,046) (5,905) (8,129) (51,215)
Other, net.......................................... (12) (346) (241) 59 216
-------- -------- -------- -------- --------
Net cash from investing activities................ (19,617) (8,999) (56,610) (43,343) (61,091)
-------- -------- -------- -------- --------
Cash Flows from Financing Activities:
Proceeds from issuance of common stock upon exercise
of stock options.................................. 1,532 1,463 3,267 2,734 3,700
Proceeds from sale of common stock.................. 10,655 201 462 225 325
Dividends paid...................................... (3,631) (4,528) (5,688) (4,075) (5,249)
Short-term borrowings, net.......................... -- 200 (2) (60) 29,456
Principal payments on long-term debt................ (3,585) (71) (27) (822) (28)
Purchase of treasury stock.......................... (5,444) -- (5) (6) --
Proceeds from sale of treasury stock................ 5,646 -- 5 -- --
-------- -------- -------- -------- --------
Net cash from financing activities................ 5,173 (2,735) (1,988) (2,004) 28,204
-------- -------- -------- -------- --------
Net cash activity for the three months ended
September 30, 1999 -- Sys-Tech, Inc. ............. -- -- -- -- 264
-------- -------- -------- -------- --------
Net (decrease) increase in cash and cash
equivalents......................................... 4,693 13,498 (21,357) (10,309) 9,649
Cash and cash equivalents, beginning of period........ 6,542 11,235 24,733 24,733 3,376
-------- -------- -------- -------- --------
Cash and cash equivalents, end of period.............. $ 11,235 $ 24,733 $ 3,376 $ 14,424 $ 13,025
======== ======== ======== ======== ========
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period for:
Interest............................................ $ 40 $ 34 $ 93 $ 69 $ 829
======== ======== ======== ======== ========
Income taxes........................................ $ 8,443 $ 10,601 $ 13,988 $ 13,477 $ 9,061
======== ======== ======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-6
<PAGE> 62

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE COMPANY

Jack Henry & Associates, Inc. ("JHA" or the "Company") is a computer
software company which has developed several banking software systems. The
Company's revenues are predominately earned by marketing those systems to
financial institutions nationwide along with the computer equipment (hardware)
and by providing the conversion and software customization services necessary
for a financial institution to install a JHA software system. JHA also provides
continuing support and maintenance services to customers using the systems.

CONSOLIDATION

The consolidated financial statements include the accounts of JHA and all
of its wholly-owned subsidiaries and all significant intercompany accounts and
transactions have been eliminated.

POOLING OF INTERESTS TRANSACTIONS

The consolidated financial statements for all periods presented have been
restated to include Peerless Group, Inc. ("Peerless") which was acquired on
December 16, 1998. The acquisition was accounted for as a pooling of interests
and therefore all periods have been adjusted to reflect the acquisition as if it
had occurred at the beginning of the earliest period reported (see Note 12).

The consolidated financial statements for all periods presented have been
restated to include Sys-Tech, Inc. ("Sys-Tech"),which was acquired on June 1,
2000. The acquisition was accounted for as a pooling of interests and therefore
all periods have been adjusted to reflect the acquisition as if it had occurred
at the beginning of the earliest period reported (see Note 14).

Prior to the consummation of the pooling, Sys-Tech's year end was September
30. Therefore, the consolidated statements of income and cash flows for the
years ended June 30, 1997, 1998 and 1999 reflect the results of operations and
cash flows for the Company for the years then ended combined with Sys-Tech for
the years ended September 30, 1997, 1998 and 1999, respectively. The
consolidated balance sheets as of June 30, 1998 and 1999 reflect the financial
position of the Company on those dates combined with the financial position of
Sys-Tech as of September 30, 1998 and 1999, respectively. As a result of the
Company and Sys-Tech having different fiscal year ends, Sys-Tech's results of
operations for the three month period ended September 30, 1999 have been
included in the consolidated statements of income for the year ended June 30,
1999 and the nine month period ended March 31, 2000, and, therefore, have been
removed from the Company's retained earnings at July 1, 1999. Revenues, net loss
from continuing operations and net loss of Sys-Tech for the three month period
ended September 30, 1999 were $1,402, $378 and $264, respectively.

COMMON STOCK SPLIT

On January 31, 2000, the Company's Board of Directors declared a 100% stock
dividend on its common stock, effectively a 2 for 1 stock split. The stock
dividend was paid March 2, 2000 to stockholders of record at the close of
business on February 17, 2000. All per share and shares outstanding data in the
consolidated statements of income and the notes to the consolidated financial
statements have been retroactively restated to reflect the stock split.

F-7
<PAGE> 63
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

REVENUE RECOGNITION

The Company's various sources of revenue and the methods of revenue
recognition are as follows:

SOFTWARE LICENSING FEES

Initial licensing fees are recognized upon delivery of the unmodified
software. Monthly software usage charges are recognized ratably over the
contract period.

SOFTWARE INSTALLATION AND RELATED SERVICES

Fees for these services are recognized as the services are performed
on hourly contracts and at completion on fixed-fee contracts.

MAINTENANCE/SUPPORT FEES

Fees from these contracts are recognized ratably over the life of the
contract.

HARDWARE

Revenues from sales of hardware are recognized upon direct shipment by
the supplier to the Company's customers. Costs of items purchased and
remarketed are reported as cost of hardware in cost of sales.

DEFERRED REVENUES

Deferred revenues consist primarily of prepaid annual software and hardware
maintenance fees. Software and hardware deposits are also reflected as deferred
revenues.

COMPUTER SOFTWARE DEVELOPMENT

The Company capitalizes new product development costs incurred from the
point at which technological feasibility has been established through the point
at which customer installations begin. The capitalized costs, which include
salaries and related expenses, equipment/facility costs and other direct
expenses, are amortized to expense based on estimated revenues over the
estimated product life (generally five years).

INCOME PER SHARE

Per share information is based on the weighted average number of common
shares outstanding during the year. Stock options have been included in the
calculation of income per share to the extent they are dilutive. Reconciliation
from basic to diluted weighted average shares outstanding is the dilutive effect
of outstanding stock options.

F-8
<PAGE> 64
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CASH EQUIVALENTS

The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

INVESTMENTS

The Company invests its cash that is not required for current operations
primarily in U.S. government securities.

The Company has the positive intent and ability to hold its debt securities
until maturity and accordingly, these securities are classified as
held-to-maturity and are carried at historical cost adjusted for amortization of
premiums and accretion of discounts. Premiums and discounts are amortized and
accreted, respectively, to interest income using the level-yield method over the
period to maturity. The held-to-maturity securities typically mature in less
than one year. Interest on investments in debt securities is included in income
when earned.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and depreciated principally using
the straight-line method over the estimated useful lives of the assets.

INTANGIBLE ASSETS

Intangible assets consist of excess purchase price over the fair value of
net assets acquired, customers, software maintenance/support contracts and
marketing agreements acquired in business acquisitions. The amounts are
amortized over an estimated economic benefit period, generally five to fifteen
years using the straight-line method.

The Company reviews long-lived assets and certain identifiable intangibles
for impairment whenever events or changes in circumstances have indicated that
the carrying amount of its assets might not be recoverable.

COMPREHENSIVE INCOME

The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," which established standards
for the reporting and display of comprehensive income and its components.
Comprehensive income is defined as net income plus certain items that are
recorded directly to shareholder's equity. Comprehensive income for each of the
years in the period ended June 30, 1999 equals the Company's net income.

BUSINESS SEGMENT INFORMATION

The Company adopted SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information," which establishes standards for the
disclosure required related to segments of an enterprise.

The Company is a leading provider of financial data processing systems for
financial institutions. In accordance with SFAS No. 131, the Company's
operations are classified as one business segment. The financial performance and
productivity of the Company is monitored as a single unit as all products and
services relate to one line of business, providing comprehensive services for
data processing to the financial institution industry. Revenue by type of
product and service is presented on the face of the statements of income.

F-9
<PAGE> 65
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Deferred tax liabilities and assets are recognized for the tax effects of
differences between the financial statement and tax bases of assets and
liabilities. A valuation allowance is established to reduce deferred tax assets
if it is likely that a deferred tax asset will not be realized.

RECENT ACCOUNTING PRONOUNCEMENTS

In October, 1997, the Accounting Standards Executive Committee of the
American Institute of Public Accountants ("AcSEC") issued Statement of Position
("SOP") 97-2, "Software Revenue Recognition". The Company adopted SOP 97-2
effective July 1, 1998. SOP 97-2 generally requires revenue earned on software
arrangements involving multiple elements to be allocated to each element based
on the relative fair values of the elements. In March 1998, AcSEC issued SOP
98-4, "Deferral of the Effective Date of a Provision of SOP 97-2, Software
Recognition", which deferred portions of SOP 97-2 for one year. Revenues in
fiscal year 1999 from the sales of software are recognized in accordance with
the enacted portions of SOP 97-2 and the Company's management anticipates that
the adoption of SOP 98-4 in fiscal year 2000 will not have a material impact on
the Company's result of operations.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities. SFAS No.
133, as amended by SFAS No. 137, is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. This new standard is not anticipated to
have a material impact on the Company's financial position and results of
operations.

The Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," on
December 3, 1999. SAB No. 101, as amended, provides the SEC Staff's views on
selected revenue recognition issues and is effective no later than the fourth
fiscal quarter for years beginning after December 15, 1999, which for the
Company is the beginning of its fourth quarter of fiscal year 2001. The Company
has not completed the process of evaluating the impact that will result from
adopting SAB No. 101 and therefore, is unable to determine the impact that the
adoption will have on its financial position and results of operations.

RECLASSIFICATION

Where appropriate, prior years' financial information has been reclassified
to conform with the current years' presentation. The statements of cash flows
are prepared using the indirect method, which represents a reclassification of
the prior years' presentation using the direct method.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The unaudited interim consolidated financial statements as of March 31,
2000 and for the nine-month periods ended March 31, 1999 and 2000 were prepared
in accordance with the SEC rules and regulations for interim financial
statements. In the opinion of management, the unaudited interim consolidated
financial statements reflect all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation. The accounting principles
applied in preparation of the interim consolidated financial statements are
consistent with those applied in the annual consolidated financial statements.
Results of operations for the nine-month period ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the year ending
June 30, 2000.

F-10
<PAGE> 66
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2: INVESTMENTS

The amortized cost and approximate fair values of held-to-maturity
securities at June 30, 1998 and 1999 are included in the following table. Fair
market values of these securities did not differ significantly from amortized
cost due to the nature of the securities and minor interest rate fluctuations
during the periods.

<TABLE>
<CAPTION>
1998 1999
------ ------
(IN THOUSANDS)
<S> <C> <C>
U.S. treasury notes......................................... $3,101 $6,583
Accrued interest............................................ 128 119
------ ------
Total.................................................. $3,229 $6,702
====== ======
</TABLE>

NOTE 3: FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair values for held-to-maturity securities are based on quoted market
prices (See Note 2). For all other financial instruments, including amounts
receivable and payable, short-term borrowings and long-term debt, fair values
approximate carrying value, based on the short-term nature of the assets and
liabilities and the variability of the interest rates on the borrowings.

NOTE 4: PROPERTY AND EQUIPMENT

The classification of property and equipment, together with their estimated
useful lives is as follows:

<TABLE>
<CAPTION>
JUNE 30,
------------------ ESTIMATED
1998 1999 USEFUL LIFE
------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Land........................................................ $ 830 $ 2,830
Land improvements........................................... 708 1,154 5-20 years
Buildings................................................... 5,624 16,444 25-30 years
Equipment and furniture..................................... 24,334 34,809 5-8 years
Aircraft.................................................... 10,565 18,957 8-10 years
Construction in process..................................... 2,554 11,174
------- -------
44,615 85,368
Less accumulated depreciation............................... 13,123 19,176
------- -------
Property and equipment, net................................. $31,492 $66,192
======= =======
</TABLE>

NOTE 5: OTHER ASSETS

Following is an analysis of intangible assets:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------
1998 1999
------- -------
(IN THOUSANDS)
<S> <C> <C>
Balance, beginning of year.................................. $15,469 $15,272
Intangible assets........................................... 1,339 11,999
Amortization................................................ (1,536) (2,090)
------- -------
Balance, end of year........................................ $15,272 $25,181
======= =======
</TABLE>

F-11
<PAGE> 67
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Computer software includes the unamortized cost of software products
developed or acquired by the Company which were required to be capitalized by
generally accepted accounting principles. The costs are amortized over an
estimated economic benefit period, generally five years. Following is an
analysis of the computer software costs:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------
1998 1999
------ ------
(IN THOUSANDS)
<S> <C> <C>
Balance, beginning of year.................................. $3,071 $2,838
Software development costs capitalized...................... 281 515
Software acquired........................................... -- 352
Amortization................................................ (514) (690)
------ ------
Balance, end of year........................................ $2,838 $3,015
====== ======
</TABLE>

NOTE 6: LINES OF CREDIT AND LONG-TERM DEBT

LINES OF CREDIT

The Company has an $8,000,000 line of credit at June 30, 1999, which is
payable upon demand or at March 15, 2000, and is secured by $1,000,000 of
investments with the remainder unsecured. Borrowings under the line bear
interest at a floating prime rate (7.75% at June 30, 1999). The Company also had
a similar line of credit at June 30, 1998. There were no amounts outstanding
under the line at June 30, 1999, or 1998. Utilization of the line was minimal
during each of the last three fiscal years.

Sys-Tech has a line of credit with a maximum loan amount of $400,000,
bearing interest at the lender's prime rate plus one-half (10.0% at June 30,
1999). Amounts outstanding are $400,000 and $399,000 as of June 30, 1998 and
1999, respectively. The line is payable on demand or at August 20, 2000 and is
secured by the accounts receivable and other current assets of Sys-Tech.

LONG-TERM DEBT

Sys-Tech has a note payable with an original loan amount of $400,000,
bearing interest at 10%, payable monthly, due August 4, 2001. The note is
secured by specific real estate.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------
1998 1999
---- ----
(IN THOUSANDS)
<S> <C> <C>
Long-Term Debt.............................................. $254 $227
Less current maturities..................................... 15 16
---- ----
$239 $211
==== ====
</TABLE>

Future maturities of long-term debt as of June 30, 1999 is as follows:

F-12
<PAGE> 68
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7: INCOME TAXES

The provision for income taxes on income from continuing operations
consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------
1997 1998 1999
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................... $ 8,954 $12,044 $16,860
State..................................................... 909 1,170 1,806
Deferred:
Federal................................................... 297 431 204
State..................................................... 25 47 17
------- ------- -------
$10,185 $13,692 $18,887
======= ======= =======
Effective Rate.............................................. 36% 36% 37%
======= ======= =======
</TABLE>

The tax effects of temporary differences related to deferred taxes shown on
the balance sheets were:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------
1998 1999
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred Tax Assets:
Carryforwards (operating losses, capital losses, credits,
etc.).................................................. $ 68 $ 347
Expense reserves (bad debts, insurance, franchise tax,
vacation, etc.)........................................ 588 624
Intangible assets......................................... 535 1,236
------- -------
1,191 2,207
Deferred Tax Liabilities:
Excess tax depreciation................................... (2,998) (4,104)
Excess tax amortization................................... (526) (674)
Other, net................................................ (32) (15)
------- -------
(3,556) (4,793)
------- -------
Net deferred tax liability.................................. $(2,365) $(2,586)
======= =======
</TABLE>

The following analysis reconciles the statutory federal income tax rate to
the effective income tax rates reflected above:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax expense (benefit)................... 35% 35% 35%
Increase (Reduction) in Taxes Resulting From:
State income taxes, net of federal income tax benefits.... 3 3 3
Research & Development Credit............................. (1) (1) --
Other..................................................... (1) (1) (1)
-- --- ---
36% 36% 37%
== === ===
</TABLE>

Net operating less carryforwards of $847,000 (from acquisitions) and
capital loss carryforwards of $57,000 expire through the year 2014.

F-13
<PAGE> 69
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8: INDUSTRY AND SUPPLIER CONCENTRATIONS

The Company sells its products to banks and financial institutions
throughout the United States and generally does not require collateral. Adequate
reserves (which are insignificant at June 30, 1999, and 1998) are maintained for
potential credit losses.

In addition, the Company purchases most of its computer equipment
(hardware) and related maintenance for resale in relation to installation of JHA
software systems from one supplier. There are a limited number of hardware
suppliers for these required materials.

NOTE 9: STOCK OPTION PLANS

The Company has two stock option plans: the 1996 Stock Option Plan ("1996
SOP") and the Non-Qualified Stock Option Plan ("NSOP").

The 1996 SOP was adopted by the Company October 29, 1996, for its
employees. This plan replaced the terminating 1987 SOP. Terms of the options are
determined by the Compensation Committee of the Board of Directors when granted
and for options outstanding include vesting periods up to 2 1/2 years. Shares of
common stock are reserved for issuance under this plan at the time of each grant
which must be at or above fair market value at the grant date. The options
terminate upon termination of employment, three months after retirement, one
year after death or ten years after grant. As of June 30, 1999, there were
2,264,000 shares available for future grants under the plan from the original
5,500,000 shares approved by the stockholders.

The NSOP was adopted by the Company on October 31, 1995, for its outside
directors. Options are exercisable beginning six months after grant at a price
equal to 100% of the fair market value of the stock at the grant date. The
options terminate when director status ends, upon surrender of the option or ten
years after grant. A total of 600,000 shares of common stock have been reserved
for issuance under this plan with a maximum of 150,000 for each director.

A summary of the activity of all of the Company's stock option plans is:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------
1997 1998 1999
---------- --------- ---------
<S> <C> <C> <C>
Options outstanding, beginning of year:.................... 2,913,602 3,120,260 4,322,184
Options granted............................................ 189,500 1,434,854 694,774
Options exercised.......................................... (1,320,450) (208,930) (645,778)
Options forfeited.......................................... (15,000) (24,000) (32,800)
Increase in options outstanding due to 50% stock
dividend................................................. 1,352,608 -- --
---------- --------- ---------
Options outstanding, end of year:.......................... 3,120,260 4,322,184 4,338,380
========== ========= =========
Currently exercisable...................................... 2,995,262 3,038,268 3,322,406
========== ========= =========
Weighted-average exercise price for options outstanding.... $ 5.494 $ 8.324 $ 10.791
========== ========= =========
Weighted-average exercise price for options granted........ $ 10.928 $ 12.547 $ 21.306
========== ========= =========
Weighted-average exercise price for options exercised...... $ 2.526 $ 6.072 $ .187
========== ========= =========
Weighted-average fair value of options granted............. $ 2.888 $ 4.934 $ 9.608
========== ========= =========
</TABLE>

F-14
<PAGE> 70
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Following is an analysis of stock options outstanding (O) and exercisable
(E) as of June 30, 1999:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
REMAINING CONTRACTUAL WEIGHTED-AVERAGE
SHARES LIFE IN YEARS EXERCISE PRICE
---------------------- --------------------- ----------------
RANGE OF EXERCISE PRICES O E O O E
------------------------ --------- --------- --------------------- ------ ------
<S> <C> <C> <C> <C> <C>
$2 to 5.............................. 794,598 794,598 4.61 $ 2.90 $ 2.90
6 to 9............................... 1,205,640 1,205,640 6.47 7.56 7.56
10 to 12............................. 1,281,568 763,968 8.28 11.94 11.86
13 to 19............................. 486,840 219,240 8.89 15.43 14.00
19 to 28............................. 569,734 338,960 9.32 22.11 22.14
--------- --------- ---- ------ ------
$2 to 28............................. 4,338,380 3,322,406 7.31 $10.79 $ 9.35
========= ========= ==== ====== ======
</TABLE>

OPTIONS
FORFEITED:

<TABLE>
<CAPTION>
RANGE OF WEIGHTED-AVERAGE
FISCAL YEAR EXERCISE PRICE SHARES EXERCISE PRICE
----------- -------------- ------ ----------------
<S> <C> <C> <C>
1997..................................................... $ 6 to 9 15,000 $ 8.96
--------- ------ ------
1998..................................................... $12 to 13 24,000 $12.07
--------- ------ ------
1999..................................................... $12 to 22 32,800 $18.71
--------- ------ ------
</TABLE>

As permitted under SFAS No. 123, "Accounting for Stock-Based Compensation,"
the Company has elected to continue to follow Accounting Principles Board
("APB") No. 25 "Accounting for Stock Issued to Employees," in accounting for
stock-based awards to employees. Under APB No. 25, the Company generally
recognizes no compensation expense with respect to such awards, since the
exercise price of the stock options awarded are equal to the fair market value
of the underlying security on the grant date.

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123 for awards granted after December 31, 1994, as if the
Company had accounted for its stock-based awards to employees under the fair
value method of SFAS No. 123. The fair value of the Company's stock-based awards
to employees was estimated as of the date of the grant using a Black-Scholes
option pricing model.

The Company's pro forma information for continuing operations follows:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C> <C>
Net income.................................. As reported..... $18,492 $24,205 $32,726
======= ======= =======
Pro forma....... $18,261 $22,150 $27,453
======= ======= =======
Diluted earnings per share.................. As reported..... $ .46 $ .58 $ .77
======= ======= =======
Pro forma....... $ .45 $ .53 $ .64
======= ======= =======
Basic earnings per share.................... As reported..... $ .49 $ .61 $ .81
======= ======= =======
Pro forma....... $ .48 $ .56 $ .68
======= ======= =======
Assumptions:
Expected life (years)..................... 2.16 2.16 2.97
Volatility................................ 40% 40% 56%
Risk free interest rate................... 5.9% 6.1% 5.0%
Dividend yield............................ .35% .35% .35%
</TABLE>

F-15
<PAGE> 71
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10: EMPLOYEE BENEFIT PLANS

STOCK PURCHASE PLAN -- The Company established an employee stock purchase
plan on January 1, 1996. The plan allows the majority of employees the
opportunity to directly purchase shares of the Company. Purchase prices for all
participants are based on the closing bid price on the last business day of each
month.

401(K) EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") -- The Company has a 401(k)
Employee Stock Ownership Plan (the "Plan") covering substantially all employees
of the Company and its subsidiaries. As of July 1, 1987, the plan was amended
and restated to include most of the existing ESOP provisions and to add salary
reduction contributions allowed under Section 401(k) of the Internal Revenue
Code and to require employer matching contributions. The Company matches 100% of
employee contributions up to 5% of compensation subject to a maximum of $5,000.
The Company has the option of making a discretionary contribution to the Plan,
however, none has been made for any of the three most recent fiscal years. The
Company assumed responsibility for the Peerless Employee 401(k) Plan as of
acquisition date (see Note 12), and will merge it into the Plan as of December
31, 1999. The total expense related to the Plans was $723,000, $952,000, and
$1,321,000 for 1997, 1998, and 1999, respectively.

NOTE 11: DISCONTINUED OPERATIONS

In the last quarter of 1996, the Company discontinued the operations of its
BankVision Software, Ltd. subsidiary ("BankVision") which it planned to sell by
December 31, 1996. The estimated loss on disposal recorded in 1996 consisted of
the following:

<TABLE>
<S> <C>
Estimated loss on sale, net of applicable income tax
benefit................................................... $2,390,000
Operating losses from April 1, 1996, through June 30, 1996,
net of income tax benefit of $78,000...................... 130,000
Estimated operating losses from July 1, 1996, to anticipated
disposal date, net of income tax benefit of $38,000....... 100,000
----------
$2,620,000
==========
</TABLE>

The planned sale of BankVision was not concluded as of June 30, 1999. Thus,
additional losses of $450,000, $668,000 and $758,000 were reported for the
discontinued BankVision unit for the years ended June 30, 1997, 1998 and 1999,
respectively. Several issues which were raised during negotiations for the sale
of BankVision caused a delay in the Company's plan for disposing of this
subsidiary. These issues have now been addressed. The Company is currently
honoring commitments to existing customers and anticipates final resolution
regarding its discontinued operations by January 31, 2000. The Company has
notified customers that maintenance contracts will not be renewed upon normal
expiration. (See Note 13).

NOTE 12: BUSINESS ACQUISITIONS

POOLING OF INTERESTS TRANSACTIONS

The Company acquired all the outstanding shares of Peerless on December 16,
1998, for approximately $36,000,000 (1,654,000 shares) in Company stock.

The Company acquired all the outstanding shares of Financial Software
Systems, Inc. on September 2, 1997, for $600,000 in Company stock.

The Company acquired all the outstanding shares of G. G. Pulley &
Associates, Inc. on July 1, 1997, for $5,000,000 in Company stock.

F-16
<PAGE> 72
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company acquired all the outstanding shares of Liberty Banking
Services, Inc. on September 1, 1996, for $2,000,000 in Company stock.

Prior years' consolidated financial statements have been restated for the
effect of the pooling transactions. The following table presents a
reconciliation of revenue and net income previously reported by the Company and
Peerless to those presented in the accompanying consolidated financial
statements. (See Note 13 for the impact of the Sys-Tech pooling).

<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL 1997 FISCAL 1998 SEPTEMBER 30, 1998
----------- ----------- ------------------
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
JHA................................................. $ 82,600 $113,423 $40,728
Peerless............................................ 38,151 29,124 8,921
-------- -------- -------
Combined............................................ $120,751 $142,547 $49,649
======== ======== =======
Net Income JHA........................................ $ 15,305 $ 21,569 $ 8,296
Peerless............................................ 2,514 1,713 497
-------- -------- -------
Combined............................................ $ 17,819 $ 23,282 $ 8,793
======== ======== =======
</TABLE>

PURCHASE TRANSACTIONS

On November 25, 1998, the Company acquired all the outstanding shares of
Digital Data Services, Inc. common stock for $2,750,000 in cash.

On July 1, 1998, the Company acquired all the outstanding shares of Hewlett
Computer Services, Inc. common stock for $2,250,000 in cash.

On December 12, 1997, the Company acquired all the outstanding shares of
Vertex, Inc. common stock for $1,905,000 in Company stock and $1,095,000 in
cash.

The consolidated operations of the Company include the operations of the
acquirees from their acquisition dates for acquisitions accounted for as
purchases. Pro Forma information for acquisitions accounted for as purchases is
not presented as the impact was not material.

NOTE 13: SUBSEQUENT EVENTS

SALE OF SUBSIDIARY

On September 7, 1999, the Company completed the sale of its BankVision
subsidiary (see discontinued operations, Note 11) for $1,000,000. Under the
terms of the agreement, the purchaser, made a $500,000 down payment and executed
promissory notes to pay $250,000 (plus interest) in each of the next two years.
The net assets of the subsidiary, as of that date, approximately equal the sales
proceeds, and as a result, the Company expects the transaction to have minimal
effect on its financial results for fiscal year 2000.

OPEN SYSTEM GROUP ACQUISITION

On September 8, 1999, the Company's wholly-owned subsidiary Open System
Group, Inc. ("OSG"), completed the acquisition of BancTec, Inc.'s community
banking business, providing software, account processing capabilities and data
center operations to over 800 community banks throughout the United States and
the Caribbean. Revenues from these acquired community banking operations total
approximately $17,000,000 and $43,000,000 for the six months ended June 30, 1999
and calendar 1998,

F-17
<PAGE> 73
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

respectively. The total value of the transaction was approximately $56,136,000,
of which $50,000,000 was in cash, the assumption of approximately $5,475,000
liabilities and $661,000 in transaction costs. The purchase price was paid with
approximately $25,000,000 cash from operations and $25,000,000 proceeds from a
line of credit with a commercial lender. The line of credit provides for
advances of up to $40,000,000, bears interest at variable LIBOR-Based Rates
(5.98% as of September 7, 1999) and is due September 7, 2000.

NOTE 14: SYS-TECH, INC. ACQUISITION

On June 1, 2000, the Company acquired all the outstanding shares of
Sys-Tech for approximately $16,000,000 (417,000 shares) in Company stock.

Prior years' consolidated financial statements have been restated for the
effect of this pooling transaction. The following table presents a
reconciliation of revenue and net income previously reported by the Company, as
restated for the Peerless transaction, and Sys-Tech to those presented in the
accompanying consolidated financial statements.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL 1997 FISCAL 1998 FISCAL 1999 MARCH 31, 2000
----------- ----------- ----------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
JHA.......................................... $120,751 $142,547 $184,504 $150,239
Sys-Tech..................................... 5,505 5,688 9,023 5,692
-------- -------- -------- --------
Combined..................................... $126,256 $148,235 $193,527 $155,931
======== ======== ======== ========
Net Income:
JHA.......................................... $ 17,819 $ 23,282 $ 31,768 $ 22,588
Sys-Tech..................................... 223 255 200 (4)
-------- -------- -------- --------
Combined..................................... $ 18,042 $ 23,537 $ 31,968 $ 22,584
======== ======== ======== ========
</TABLE>

NOTE 15: ADDITIONAL SUBSEQUENT EVENTS (UNAUDITED)

With respect to the OSG acquisition discussed in Note 13, the Company
allocated the purchase price to the assets and liabilities acquired based on
their estimated fair values at the acquisition date, resulting in allocations of
$39,000,000, $5,315,000 and $1,000,000 to acquired customer relationships,
goodwill and acquired software, respectively. The customer contracts, goodwill
and software will be amortized on a straight-line basis over 20, 20 and 10 years
respectively.

On April 1, 2000, the Company acquired all the outstanding shares of
BancData Solutions, Inc. ("BDS"), for $5,000,000 in cash. BDS is a provider of a
variety of service bureau options to community banks, primarily in southern
California. Systems are AS/400 based and are already using the JHA core
application system. The excess purchase price over the fair value of net assets
acquired of $3,963,000 was allocated to customers and is being amortized on a
straight-line basis over 20 years.

On June 7, 2000, the Company completed the acquisition of Symitar Systems,
Inc. ("Symitar"), a provider of in-house data processing solutions for credit
unions. Symitar provides 237 credit unions throughout the United States with its
comprehensive line of software and services that run on the IBM RS/6000.
Revenues from these operations totaled approximately $33,000,000 and $36,000,000
for years ended December 31, 1999 and 1998, respectively. The purchase price of
$44,000,000 in cash was paid with proceeds from a line of credit with a
commercial lender. The line of credit which originally provided for advances of
up to $40,000,000 and was due September 7, 2000, was renewed and increased to
provide for

F-18
<PAGE> 74
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

advances of up to $75,000,000, bears interest at variable LIBOR-Based Rates
(7.63% as of June 7, 2000) and is due June 15, 2001.

The purchase price for Symitar was preliminarily allocated to the assets
and liabilities acquired based on their estimated fair values at the acquisition
date, pending final determination of the fair value of certain acquired
intangible assets. The preliminary allocation has resulted in acquired customers
of approximately $41,300,000 and acquired software of $2,000,000 which will be
amortized on a straight-line basis over 20 years and 10 years, respectively.

The three acquisitions discussed above were accounted for using the
purchase method. Accordingly, the accompanying consolidated statements of income
do not include any revenues and expenses related to these acquisitions prior to
their respective closing dates.

The following unaudited proforma condensed information is presented as if
the OSG and Symitar acquisitions had occurred at the beginning of the earliest
period presented. The pro forma results for BDS were not included as amounts are
not material.

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
JUNE 30, MARCH 31,
-------------------- --------------------
1998 1999 1999 2000
-------- -------- -------- --------
(IN THOUSANDS, EXPECT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues............................................ $212,200 $274,682 $212,093 $178,897
Income from continuing operations................... 21,524 33,205 25,067 20,709
Net income.......................................... 20,856 32,447 24,309 20,337
Diluted Earnings Per Share:
Income from continuing operations................. .52 .78 .59 .49
Net income........................................ $ .50 $ .76 $ .57 $ .48
</TABLE>

These unaudited pro forma results have been prepared for comparative
purposes only and do not necessarily reflect the results of operations which
would have actually resulted had the acquisition occurred as of the beginning of
the earliest period presented, or of future results of operations.

F-19
<PAGE> 75

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial information for Jack
Henry consists of the Unaudited Pro Forma Combined Statement of Income for the
year ended June 30, 1999 and the nine month period ended March 31, 2000 and the
Unaudited Pro Forma Combined Balance Sheet as of March 31, 2000. The historical
consolidated financial information of Jack Henry has been restated to reflect
the acquisitions of Peerless Group, Inc. in December 1998 and Sys-Tech, Inc. in
June 2000, which were accounted for as poolings-of-interest, as if they had
occurred at the beginning of the earliest period presented herein. On September
8, 1999, Jack Henry purchased certain assets comprising BancTec Financial
Systems, a unit of BancTec, Inc., for $50.0 million in cash, the assumption of
approximately $5.5 million of liabilities and transaction costs of approximately
$661,000. The acquisition was funded with $25.7 million from operations and
$25.0 million from short-term borrowings. The acquired business was renamed Open
Systems Group. On June 7, 2000, the Company completed the acquisition of all of
the outstanding common stock of Symitar Systems, Inc. ("Symitar"), a California
Subchapter S corporation, for approximately $44.0 million in cash, funded with
short-term borrowings. The purchase price for Symitar was preliminarily
allocated to the assets and liabilities acquired based on their estimated fair
value at the acquisition date, pending final determination of the valuation of
certain acquired intangible assets. The Unaudited Pro Forma Combined Statements
of Income for the year ended June 30, 1999 and the nine month period ended March
31, 2000 give effect to the Open Systems Group and Symitar transactions as if
they had taken place on July 1, 1998. The Unaudited Pro Forma Combined Balance
Sheet as of March 31, 2000 gives effect to the Symitar transaction as if it had
taken place on that date.

The Unaudited Pro Forma Combined Statements of Income combines Jack Henry
consolidated historical results of operations for the year ended June 30, 1999
and the nine months ended March 31, 2000 with Open Systems Group's and Symitar's
historical results for the same periods. Jack Henry's results of operations
include the results of operations of Open Systems Group since its acquisition in
September 1999. The pro forma combined financial information has been prepared
on the basis of assumptions described in the notes.

The pro forma combined financial information should be read in conjunction
with the related notes and the consolidated financial statements and
accompanying notes of Jack Henry, the financial statements and accompanying
notes of Open Systems Group and the financial statements and accompanying notes
of Symitar. The combined pro forma financial information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if the acquisitions had
been in effect during the periods presented, nor is it necessarily indicative of
future operating results or financial position. The amounts in the unaudited pro
forma combined financial information and the related notes thereto, other than
per share data, are in thousands.

F-20
<PAGE> 76

JACK HENRY & ASSOCIATES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
OPEN PRO FORMA
JACK HENRY SYSTEMS GROUP SYMITAR COMBINED ADJUSTMENTS PRO FORMA
---------- ------------- ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Software licensing and
installation...................... $ 47,181 $ 9,147 $15,294 $71,622 $ -- $ 71,622
Maintenance/support and service..... 71,278 20,338 6,104 97,720 -- 97,720
Hardware sales...................... 75,068 10,679 19,593 105,340 -- 105,340
-------- ------- ------- -------- ------- --------
Total revenues.................... 193,527 40,164 40,991 274,682 -- 274,682
-------- ------- ------- -------- ------- --------
Cost of Sales
Cost of hardware.................... 54,661 8,160 12,935 75,756 -- 75,756
Cost of services.................... 52,582 19,222 14,032 85,836 3,099(a) 88,935
-------- ------- ------- -------- ------- --------
Total cost of sales............... 107,243 27,382 26,967 161,592 3,099 164,691
-------- ------- ------- -------- ------- --------
Gross profit.......................... 86,284 12,782 14,024 113,090 (3,099) 109,991
-------- ------- ------- -------- ------- --------
Operating Expenses
Selling and marketing expense....... 14,030 6,170 2,152 22,352 -- 22,352
Research and development expense.... 5,183 2,875 788 8,846 -- 8,846
General and administrative
expense........................... 17,347 4,298 644 22,289 -- 22,289
-------- ------- ------- -------- ------- --------
Total operating expenses.......... 36,560 13,343 3,584 53,487 -- 53,487
-------- ------- ------- -------- ------- --------
Operating income from continuing
operations.......................... 49,724 (561) 10,440 59,603 (3,099) 56,504
-------- ------- ------- -------- ------- --------
Other Income (Expense)
Interest income..................... 1,619 -- 324 1,943 1,943
Interest expense.................... (93) -- -- (93) (6,347)(b) (6,440)
Other, net.......................... 363 -- (9) 354 354
-------- ------- ------- -------- ------- --------
Total other income (expense)...... 1,889 -- 315 2,204 (6,347) (4,143)
-------- ------- ------- -------- ------- --------
Income from continuing operations
before taxes........................ 51,613 (561) 10,755 61,807 (9,446) 52,361
Provision for income taxes............ 18,887 -- 128 19,015 141(c) 19,156
-------- ------- ------- -------- ------- --------
Income from continuing
operations...................... $ 32,726 $ (561) $10,627 $42,792 $(9,587) $ 33,205
======== ======= ======= ======== ======= ========
Diluted earnings per share from
continuing operations:.............. $ 0.77 $ 0.78
======== ========
Diluted weighted average shares
outstanding......................... 42,641 42,641
======== ========
Basic earnings per share from
continuing operations............... $ 0.81 $ 0.82
======== ========
Basic weighted average shares
outstanding......................... 40,337 40,337
======== ========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Information.

F-21
<PAGE> 77

JACK HENRY & ASSOCIATES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE NINE MONTH PERIOD ENDED MARCH 31, 2000

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
OPEN PRO FORMA
JACK HENRY SYSTEMS GROUP SYMITAR COMBINED ADJUSTMENTS PRO FORMA
---------- ------------- ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Software licensing and
installation...................... $ 35,888 $ 416 $6,734 $43,038 $ -- $ 43,038
Maintenance/support and service..... 69,812 3,016 5,766 78,594 -- 78,594
Hardware sales...................... 50,231 65 6,969 57,265 -- 57,265
-------- ------- ------- -------- ------- --------
Total Revenues.................... 155,931 3,497 19,469 178,897 -- 178,897
-------- ------- ------- -------- ------- --------
Cost of Sales
Cost of hardware.................... 35,920 -- 4,043 39,963 -- 39,963
Cost of services.................... 54,865 3,141 9,924 67,930 1,862(a) 69,792
-------- ------- ------- -------- ------- --------
Total Cost of Sales............... 90,785 3,141 13,967 107,893 1,862 109,755
-------- ------- ------- -------- ------- --------
Gross profit.......................... 65,146 356 5,502 71,004 (1,862) 69,142
-------- ------- ------- -------- ------- --------
Operating Expenses
Selling and marketing expense....... 12,514 925 1,587 15,026 -- 15,026
Research and development expense.... 5,780 432 782 6,994 -- 6,994
General and administrative
expense........................... 13,692 396 510 14,598 -- 14,598
-------- ------- ------- -------- ------- --------
Total............................. 31,986 1,753 2,879 36,618 -- 36,618
-------- ------- ------- -------- ------- --------
Operating income from continuing
operations.......................... 33,160 (1,397) 2,623 34,386 (1,862) 32,524
-------- ------- ------- -------- ------- --------
Other Income (Expense)
Interest income..................... 738 -- 284 1,022 1,022
Interest expense.................... (1,143) -- -- (1,143) (3,091)(b) (4,234)
Other, net.......................... 1,629 (4) (1) 1,624 -- 1,624
-------- ------- ------- -------- ------- --------
Total Other Income (Expense)...... 1,224 (4) 283 1,503 (3,091) (1,588)
-------- ------- ------- -------- ------- --------
Income from continuing operations
before taxes........................ 34,384 (1,401) 2,906 35,889 (4,953) 30,936
Provision for income taxes............ 11,468 -- 22 11,490 (1,263)(c) 10,227
-------- ------- ------- -------- ------- --------
Income from continuing operations... $ 22,916 $(1,401) $2,884 $24,399 $(3,690) $ 20,709
======== ======= ======= ======== ======= ========
Diluted earnings per share from
continuing operations............... $ 0.54 $ 0.49
======== ========
Diluted weighted average shares
outstanding......................... 42,343 42,343
======== ========
Basic earnings per share from
continuing operations............... $ 0.56 $ 0.51
======== ========
Basic weighted average shares
outstanding......................... 40,771 40,771
======== ========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Information.

F-22
<PAGE> 78

JACK HENRY & ASSOCIATES, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 2000

<TABLE>
<CAPTION>
HISTORICAL
-------------------- PRO FORMA
JACK HENRY SYMITAR COMBINED ADJUSTMENTS PRO FORMA
---------- ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................... $ 13,025 $12,018 $25,043 $(2,712)(e) $ 22,331
Investments, at amortized cost.............. 1,034 -- 1,034 -- 1,034
Trade receivables........................... 37,803 2,538 40,341 -- 40,341
Income taxes receivable..................... -- -- -- -- --
Prepaid cost of product..................... 669 204 873 -- 873
Prepaid expenses and other.................. 22,356 117 22,473 -- 22,473
-------- ------- -------- ------- --------
Total..................................... 74,887 14,877 89,764 (2,712) 87,052
-------- ------- -------- ------- --------
Property and equipment, net................... 80,520 1,431 81,951 -- 81,951
-------- ------- -------- ------- --------
Other Assets:
Intangible assets, net of amortization...... 65,551 -- 65,551 41,177(a) 106,728
Computer software, net of amortization...... 3,626 -- 3,626 2,000(a) 5,626
Other....................................... 1,280 72 1,352 -- 1,352
-------- ------- -------- ------- --------
Total..................................... 70,457 72 70,529 43,177 113,706
-------- ------- -------- ------- --------
Total assets............................ $225,864 $16,380 $242,244 $40,465 $282,709
======== ======= ======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................ $ 6,918 $ 500 $ 7,418 $ -- $ 7,418
Short-term borrowings....................... 29,855 -- 29,855 44,000(b) 73,855
Accrued expenses............................ 6,541 1,107 7,648 -- 7,648
Accrued income taxes........................ 1,722 -- 1,722 -- 1,722
Deferred revenues........................... 41,300 11,330 52,630 -- 52,630
Current portion of long-term debt........... 17 -- 17 -- 17
-------- ------- -------- ------- --------
Total..................................... 86,353 12,937 99,290 44,000 143,290
-------- ------- -------- ------- --------
Long-term debt................................ 182 -- 182 -- 182
Deferred income taxes......................... 1,907 -- 1,907 (92)(d) 1,815
-------- ------- -------- ------- --------
Total liabilities......................... 88,442 12,937 101,379 43,908 145,287
-------- ------- -------- ------- --------
Stockholders' Equity:
Preferred stock; $1 par value; 500,000
shares authorized; none issued............ -- -- -- -- --
Common stock; $.01 par value; 50,000,000
shares authorized; shares issued at March
31, 2000 -- 41,121,803.................... 411 -- 411 -- 411
Additional paid-in capital.................. 36,029 30 36,059 (30)(e) 36,029
Retained earnings........................... 100,982 3,413 104,395 (3,413)(e) 100,982
-------- ------- -------- ------- --------
Total stockholders' equity................ 137,422 3,443 140,865 (3,443) 137,422
-------- ------- -------- ------- --------
Total liabilities and stockholders'
equity.................................. $225,864 $16,380 $242,244 $40,465 $282,709
======== ======= ======== ======= ========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Information.

F-23
<PAGE> 79

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

(a) Adjustment includes amortization expense for the acquired intangible assets
of Open Systems Group, offset by the reduction of intangible assets
amortized for prior acquisitions of Open Systems Group. The acquired assets
consist of customer relationships valued at $39,000 and goodwill valued at
$5,315, each to be amortized on a straight-line basis over 20 years, and
acquired software valued at $1,000 to be amortized on a straight-line basis
over 10 years. This adjustment also included the amortization of acquired
intangible assets from Symitar Systems, Inc. The purchase price for Symitar
was preliminarily allocated to the assets and liabilities acquired based on
their estimated fair value at the acquisition date, pending final
determination of the valuation of certain acquired intangible assets. The
preliminary allocation has resulted in acquired software valued at $2,000 to
be amortized on a straight-line basis over 10 years, with the remaining
costs of $41,417 preliminarily allocated to customer relationships to be
amortized on a straight-line basis over 20 years. The actual adjustment
shown on the Unaudited Pro Forma Combined Balance Sheet of $41,177 reflects
$240 in decreased allocable costs due to the change in the net assets of
Symitar between March 31, 2000 and the acquisition date.

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
JUNE 30, 1999 MARCH 31, 2000
------------- -----------------
<S> <C> <C>
Open Systems Group amortization of acquired intangible
assets.................................................. $ 828 $ 159
Symitar Systems, Inc. amortization of acquired intangible
assets.................................................. 2,271 1,703
------- ------
Net increase in amortization.............................. $ 3,099 $1,862
======= ======
</TABLE>

(b) Short-term borrowings has been adjusted to reflect the $44,000 of borrowings
incurred to finance the acquisition of Symitar Systems, Inc. In addition,
this adjustment reflects interest expense that Jack Henry would have
incurred if it had borrowed the entire $50,000 cash purchase price of Open
Systems Group. Interest expense has been adjusted to reflect the incremental
interest from the short-term borrowings related to the acquisitions of
Symitar at an interest rate of 7.63% (the current interest rate) and Open
Systems Group at an interest rate of 5.98% (the effective borrowing rate at
the date of the acquisition). The adjustment reflects the additional
interest costs that would have been paid if the acquisitions had occurred as
of the beginning of the earliest period reported.

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
JUNE 30, 1999 MARCH 31, 2000
------------- -----------------
<S> <C> <C>
Open Systems Group interest expense to reflect debt
incurred................................................ $2,990 $ 573
Symitar Systems, Inc. interest expense to reflect debt
incurred................................................ 3,357 2,518
------ ------
Net increase in interest expense.......................... $6,347 $3,091
====== ======
</TABLE>

(c) This adjustment reflects the tax effect of the pro forma adjustments and an
additional provision for income taxes, as Symitar was a Subchapter S
corporation prior to its acquisition by Jack Henry. The tax effect was
determined using an effective tax rate of 36.0%, which approximates the
statutory federal rate adjusted for state taxes in the periods presented.

(d) Reflects the net decrease in deferred income taxes arising from the
difference between the assigned values and tax bases of the assets and
liabilities of Symitar. This adjustment reduces the amount of excess
purchase price to be allocated to acquired intangible assets.

(e) Adjustment reflects the pro forma effect of $2,712 of distributions to the
stockholders of Symitar during April 2000 as if these distributions had
occurred as of March 31, 2000. The adjustment also reflects the elimination
of the remaining stockholders' equity of Symitar.

F-24
<PAGE> 80

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Jack Henry & Associates, Inc.:

We have audited the accompanying balance sheet of BancTec Financial
Systems, a unit of BancTec, Inc., (the "Company") as of August 31, 1999, and the
related statements of operations, equity, and cash flows for the twelve months
ended August 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of BancTec Financial Systems at August 31,
1999, and the results of its operations and its cash flows for the twelve months
ended August 31, 1999 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared from the separate
records maintained by BancTec Financial Systems and may not necessarily be
indicative of the conditions that would have existed or the results of
operations if BancTec Financial Systems had been operated as an unaffiliated
company. Portions of certain expenses represent allocations made from BancTec,
Inc. for items applicable to BancTec, Inc. as a whole.

/s/ DELOITTE & TOUCHE LLP

December 22, 1999
St. Louis, Missouri

F-25
<PAGE> 81

BANCTEC FINANCIAL SYSTEMS

BALANCE SHEET

AUGUST 31, 1999

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
ASSETS
Current Assets:
Accounts receivable, less allowance for doubtful accounts
of $1,713.............................................. $ 6,926
Inventory, less reserve for obsolescence of $336.......... 712
Prepaid expenses and other................................ 309
Deferred income taxes..................................... 919
-------
Total current assets................................... 8,866
Property and equipment, net................................. 2,127
Goodwill, net............................................... 19,266
-------
Total assets......................................... $30,259
=======
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable.......................................... $ 512
Accrued expenses.......................................... 1,926
Deferred revenues......................................... 3,684
-------
Total current liabilities.............................. 6,122
Deferred income taxes....................................... 919
-------
Total liabilities...................................... 7,041
Equity...................................................... 23,218
-------
Total liabilities and equity........................... $30,259
=======
</TABLE>

See Notes to Financial Statements.

F-26
<PAGE> 82

BANCTEC FINANCIAL SYSTEMS

STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Revenues
Software and installations................................ $ 9,147
Maintenance and other services............................ 20,338
Hardware.................................................. 10,679
-------
Total revenues......................................... 40,164
-------
Cost of Sales
Software and installations................................ 7,602
Maintenance and support................................... 11,620
Hardware.................................................. 8,160
-------
Total cost of sales.................................... 27,382
-------
Gross profit................................................ 12,782
Operating Expenses
Product development....................................... 2,875
Selling................................................... 6,170
General and administrative................................ 4,298
-------
Total operating expenses............................... 13,343
-------
Loss from operations before income taxes.................... (561)
-------
Provision for income taxes.................................. --
-------
Net loss.................................................... $ (561)
=======
</TABLE>

See Notes to Financial Statements.

F-27
<PAGE> 83

BANCTEC FINANCIAL SYSTEMS

STATEMENT OF CHANGE IN EQUITY

FOR THE TWELVE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Balance, September 1, 1998.................................. $28,130
Net loss.................................................. (561)
Distribution to BancTec, Inc., net........................ (4,351)
-------
Balance, August 31, 1999.................................... $23,218
=======
</TABLE>

See Notes to Financial Statements.

F-28
<PAGE> 84

BANCTEC FINANCIAL SYSTEMS

STATEMENT OF CASH FLOWS

FOR THE TWELVE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Cash Flows from Operating Activities:
Net loss.................................................... $ (561)
Adjustments to Reconcile Net Loss to Cash Flows from
Operating Activities:
Depreciation.............................................. 1,393
Amortization.............................................. 1,548

Changes In:
Accounts receivable.................................... 2,243
Inventory.............................................. 1,378
Prepaid expenses and other............................. 60
Accounts payable....................................... (447)
Accrued expenses....................................... (357)
Deferred revenues...................................... 370
-------
Net cash from operating activities.......................... 5,627
-------
Cash flows from investing activities -- Capital
expenditures.............................................. (1,276)
Cash flows from financing activities -- Distribution to
BancTec, Inc, net......................................... (4,351)
-------
Change in cash.............................................. --
Cash, September 1, 1998..................................... --
-------
Cash, August 31, 1999....................................... $ --
=======
</TABLE>

See Notes to Financial Statements.

F-29
<PAGE> 85

BANCTEC FINANCIAL SYSTEMS

NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)

1. SUMMARY OF ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS -- BancTec Financial Systems ("BFS" or the
"Company"), a unit of BancTec, Inc. ("BancTec"), provides a broad range of
products and services, including hardware, software and account processing
capabilities at six data center operations to over 800 community banks
throughout the United States and the Caribbean.

USE OF ESTIMATES -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

INVENTORIES -- Inventories consist of finished goods acquired under
reseller agreements and are valued at the lower of cost or market. Cost is
determined using the first-in, first-out and weighted average methods. Valuation
reserve has been recorded to adjust the net book value of inventory to the net
realizable value for obsolescence of specific items.

DEFERRED REVENUES -- Certain of the Company's contracts permit the Company
to bill the customer in advance of the time revenue is recognized. Deferred
revenue represents billings in excess of revenue recognized. Revenue is
recognized ratably over the contract period as the services are performed, which
usually occurs within one year of billing.

REVENUE RECOGNITION -- The Company's revenue recognition policies for its
principal sources of revenue are:
Equipment and software sales -- Revenue from sales of established
products is recognized upon shipment of completed product in conformity
with certain provisions of AICPA Statement of Position ("SOP") 97-2,
"Software Revenue Recognition." Revenue for new products is generally
recognized at the time of acceptance by the customer. All customer
contracts costs, including equipment and software, are charged to cost of
sales at the time the related revenue is recognized.

Maintenance -- Revenue from maintenance contracts is recognized
ratably over the term of the contract. The excess of annual maintenance
revenue billed to the customers over revenue recognized to date is shown as
deferred revenue.

Data Centers -- The Company owns and operates six service bureau
facilities that provide check and data processing services. The Company
enters into multi-year contracts with customers to provide such services.
Revenue from the related contracts is recognized as services are provided.

PRODUCT DEVELOPMENT -- Company sponsored software product development costs
are expensed as incurred until technological feasibility has been established.
Subsequent to that time, the software product development costs are capitalized
in conformity with Statement of Financial Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed." At August 31, 1999, there were no capitalized software costs recorded
in other assets. Software costs are amortized on a straight-line basis over a
three year period. The amount of software development costs amortized to expense
for the twelve month period ended August 31, 1999 was $60.

PROPERTY AND EQUIPMENT -- Property and equipment is stated at cost and
depreciated principally using the straight-line method over the estimated useful
lives of the assets, generally three to seven years.

F-30
<PAGE> 86
BANCTEC FINANCIAL SYSTEMS
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)

INTANGIBLE ASSETS -- Intangible assets consist of excess purchase price
over the fair value of net assets acquired in business acquisitions. The excess
of cost over net assets of acquired businesses is amortized over 10 to 20 years.

The Company evaluates the recoverability of goodwill and other long-lived
assets by measuring the carrying value of the assets against the estimated
undiscounted future cash flows associated with them. At the time such
evaluations indicate that the future undiscounted cash flows of certain
long-lived assets are not sufficient to recover the carrying value of such
assets, the assets are adjusted to their fair values.

COMPREHENSIVE INCOME -- The Company has adopted SFAS No. 130, "Reporting
Comprehensive Income," which established standards for the reporting and display
of comprehensive income and its components. Comprehensive income (loss) for the
twelve months ended August 31, 1999 equals the Company's net income (loss).

INCOME TAXES

The operating results of the Company are included in the consolidated
federal tax return of BancTec. The provision for income taxes was calculated
using a stand-alone allocation method, that is, as if the Company filed on a
separate return basis. Deferred tax liabilities and assets are recognized for
the tax effects of differences between the financial statement and tax bases of
assets and liabilities.

RECENT ACCOUNTING PRONOUNCEMENTS

In March, 1998, Accounting Standards Executive Committee of the American
Institute of Public Accountants issued SOP 98-4, "Deferral of the Effective Date
of a Provision of SOP 97-2, Software Revenue Recognition", which deferred
portions of SOP 97-2 for one year. Revenues for the twelve months ended August
31, 1999, from the sales of software, are recognized in accordance with the
enacted portions of SOP 97-2 and the Company's management anticipates that the
adoption of SOP 98-4 will not have a material impact on the Company's results of
operations.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No. 137,
is effective for all fiscal quarters of fiscal years beginning after June 15,
2000. This standard is not expected to have a material impact on the Company's
financial position and results of operations.

2. PROPERTY AND EQUIPMENT

The classification of property and equipment is as follows:

<TABLE>
<S> <C>
Leasehold improvements...................................... $ 79
Computer equipment.......................................... 5,378
Equipment and furniture..................................... 2,983
------
8,440
Less accumulated depreciation............................... 6,313
------
$2,127
======
</TABLE>

F-31
<PAGE> 87
BANCTEC FINANCIAL SYSTEMS
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)

3. GOODWILL

<TABLE>
<S> <C>
Goodwill.................................................... $28,013
Less accumulated amortization............................... 8,747
-------
$19,266
=======
</TABLE>

4. ACCRUED EXPENSES

The detail of accrued expenses is as follows:

<TABLE>
<S> <C>
Salaries, wages and other compensation...................... $1,237
Accrued cost of services.................................... 302
Other....................................................... 387
------
$1,926
======
</TABLE>

5. INCOME TAXES

The tax effects of temporary differences related to deferred taxes shown on
the balance sheet were:

<TABLE>
<S> <C>
Gross Deferred Tax Assets:
Net operating loss carryforwards.......................... $ 271
Expense reserves (bad debts, inventory, insurance,
vacation, etc.)........................................ 928
------
Total gross deferred tax assets...................... 1,199
Deferred tax asset valuation allowance...................... (280)
------
Net deferred tax asset............................... 919
------
Gross Deferred Tax Liabilities:
Excess tax depreciation................................... (58)
Excess tax amortization................................... (861)
------
Total gross deferred tax liability................... (919)
------
Net deferred tax asset............................... $ --
======
</TABLE>

The valuation allowance was adjusted to $280. Given the Company's losses in
the twelve months ended August 31, 1999, and in previous periods, it was
determined that a full valuation allowance continued to be necessary as of
August 31, 1999. The Company did not receive or pay income taxes during the
twelve months ended August 31, 1999. Net operating loss carryforwards of $753
expire through the year 2014.

6. INTERCOMPANY TRANSACTIONS

As a unit of BancTec, the Company receives administrative support from
BancTec. This support includes billing and collecting of accounts receivable,
accounts payable processing, payroll and fringe benefits administration and
marketing support. As a result of this assistance, BancTec allocates a
proportionate share of expenses to each of its participating business units and
records the amounts in an intercompany account. The Statement of Operations of
the Company includes the expenses allocated from BancTec in amounts that
management believes are reasonable. The allocated amounts for the twelve months
ended August 31, 1999, to Product Development, Selling and General and
Administrative expenses

F-32
<PAGE> 88
BANCTEC FINANCIAL SYSTEMS
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)

were $1,237, $653, and $1,479, respectively. The intercompany balances are
included as "Equity" on the Balance Sheet and the Statement of Changes in
Equity.

7. INDUSTRY AND SUPPLIER CONCENTRATIONS

The Company sells its products to banks and financial institutions
throughout the United States and generally does not require collateral. Reserves
are maintained for potential credit losses.

In addition, the Company purchases most of its computer equipment
(hardware) and related maintenance for resale in relation to installation of BFS
software systems from a few suppliers. There are a limited number of hardware
suppliers for these required materials.

8. COMMITMENTS AND CONTINGENCIES

LEASES

The Company leases certain real estate facilities and equipment for various
operations under non-cancelable operating leases expiring through year 2005. The
Company's total rent expense for the twelve months ended August 31, 1999 was
$750.

Minimum future rental payments under non-cancelable operating leases having
remaining terms in excess of one year as of August 31, 1999 in the aggregate
are:

<TABLE>
<S> <C>
2000........................................................ $ 432
2001........................................................ 375
2002........................................................ 374
2003........................................................ 177
2004........................................................ 152
Thereafter.................................................. 38
------
Total minimum future rent payments.......................... $1,548
======
</TABLE>

INDEBTEDNESS

BancTec had incurred corporate indebtedness from a commercial lender under
which BancTec granted a general lien on all domestic assets, which included
those of the Company. Pursuant to the sale of the certain assets comprising the
Company (see Note 10), BancTec negotiated with the lender to remove the lien
from those specific assets associated with the Company.

9. EMPLOYEE BENEFIT PLAN

The Company's employees are eligible to participate in the BancTec
Employee's Savings Plan which allows all full-time and part-time U.S. employees
to make contributions defined by Section 401(k) of the Internal Revenue Code.
The cost of administering this plan and additional discretionary contributions
are the expense of BancTec and included in the allocations to the Company, See
Note 6.

10. SUBSEQUENT EVENT

On September 8, 1999, BancTec completed the sale of certain assets
comprising the Company to Jack Henry & Associates, Inc ("JHA") through its
wholly owned subsidiary, Open Systems Group ("OSG"), for $50,000 in cash and the
assumption of approximately $5,475 in liabilities, subject to possible
post-closing adjustment (the "Purchase Price"). The acquisition was completed
pursuant to the Agreement for Purchase and Sale of Assets dated as of September
1, 1999 by and among BancTec, JHA and OSG.

F-33
<PAGE> 89

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Symitar Systems, Inc.:

We have audited the accompanying balance sheets of Symitar Systems, Inc.
(the "Company") as of December 31, 1999 and the related statements of income,
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

/S/ DELOITTE & TOUCHE LLP

San Diego, California
March 15, 2000

F-34
<PAGE> 90

SYMITAR SYSTEMS, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $5,026,927 $12,017,922
Accounts receivable....................................... 2,417,906 2,537,540
Inventories............................................... 346,425 204,358
Prepaid expenses.......................................... 139,777 117,340
---------- -----------
Total current assets................................... 7,931,035 14,877,160
Property -- net............................................. 1,460,215 1,430,497
Other assets................................................ 74,189 72,484
---------- -----------
Total assets................................................ $9,465,439 $16,380,141
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 248,100 $ 499,693
Accrued and other liabilities............................. 1,167,279 1,107,064
Deferred revenue.......................................... 4,407,765 11,330,239
---------- -----------
Total current liabilities.............................. 5,823,144 12,936,996
---------- -----------
Commitments (See Note 3 and 4)
Stockholders' Equity:
Common stock, no par, 10,000 shares authorized, 900 shares
issued and outstanding................................. 30,000 30,000
Retained earnings......................................... 3,612,295 3,413,145
---------- -----------
Total stockholders' equity............................. 3,642,295 3,443,145
---------- -----------
Total....................................................... $9,465,439 $16,380,141
========== ===========
</TABLE>

See Notes to Financial Statements.

F-35
<PAGE> 91

SYMITAR SYSTEMS, INC.
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, 1999 MARCH 31, 2000
----------------- ------------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Software and installations............................ $15,660,963 $2,767,052
Hardware.............................................. 9,262,607 1,891,612
Maintenance and support............................... 7,881,235 2,341,978
----------- ----------
Total revenues..................................... 32,804,805 7,000,642
----------- ----------
Cost of Revenues:
Cost of hardware...................................... 6,116,108 1,081,677
Cost of services...................................... 8,387,360 1,980,429
----------- ----------
Total cost of revenues............................. 14,503,468 3,062,106
----------- ----------
Gross Profit............................................ 18,301,337 3,938,536
----------- ----------
Operating Expenses:
Salaries and benefits................................. 9,467,877 2,306,434
General and administrative............................ 2,573,054 709,516
Marketing and travel.................................. 758,941 211,461
Depreciation and amortization......................... 479,163 120,833
----------- ----------
Total operating expenses........................... 13,279,035 3,348,244
----------- ----------
Income from operations.................................. 5,022,302 590,292
----------- ----------
Other Income (Expense):
Interest income....................................... 322,985 122,775
Loss on disposal of assets............................ (170) (1,544)
----------- ----------
Total other income -- net.......................... 322,815 121,231
----------- ----------
Income before income taxes.............................. 5,345,117 711,523
Provision for income taxes.............................. 82,826 10,673
----------- ----------
Net income.............................................. $ 5,262,291 $ 700,850
=========== ==========
</TABLE>

See Notes to Financial Statements.

F-36
<PAGE> 92

SYMITAR SYSTEMS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1999 AND
THREE MONTHS ENDED MARCH 31, 2000

<TABLE>
<CAPTION>
COMMON STOCK
----------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998..................... 900 $30,000 $ 4,621,756 $ 4,651,756
Distributions to stockholders.............. (6,271,752) (6,271,752)
Net income................................. 5,262,291 5,262,291
--- ------- ----------- -----------
BALANCE, DECEMBER 31, 1999................... 900 30,000 3,612,295 3,642,295
Distributions to stockholders.............. (900,000) (900,000)
Net Income................................. 700,850 700,850
--- ------- ----------- -----------
BALANCE, MARCH 31, 2000 (UNAUDITED).......... 900 $30,000 $ 3,413,145 $ 3,443,145
=== ======= =========== ===========
</TABLE>

See Notes to Financial Statements.

F-37
<PAGE> 93

SYMITAR SYSTEMS, INC
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1999 2000
------------ ------------------
(UNAUDITED)
<S> <C> <C>
Operating Activities:
Net income.................................................. $ 5,262,291 $ 700,850
Adjustments to Reconcile Net Income to Net Cash from
Operating Activities:
Depreciation and amortization............................. 479,163 120,833
Loss on disposal of assets................................ 170 1,544
Changes in Assets and Liabilities:
Accounts receivable.................................... 1,277,639 (119,634)
Inventories............................................ 381,555 142,067
Prepaid expenses....................................... 28,674 22,437
Other assets........................................... (7,984) 1,705
Accounts payable....................................... (975,494) 251,593
Accrued and other liabilities.......................... 75,995 (60,215)
Deferred revenue....................................... (4,163,407) 6,922,474
----------- -----------
Net cash from operating activities................... 2,358,602 7,983,654
----------- -----------
Investing activities -- Acquisition of property............. (344,640) (92,659)
----------- -----------
Financing activities -- Distribution to stockholders........ (6,271,752) (900,000)
----------- -----------
Net increase (decrease) in cash and cash equivalents........ (4,257,790) 6,990,995
Cash and cash equivalents at beginning of period.......... 9,284,717 5,026,927
----------- -----------
Cash and cash equivalents at end of period.................. $ 5,026,927 $12,017,922
=========== ===========
Supplemental Disclosure of Cash Flow Information
Income taxes paid......................................... $ 125,617 --
=========== ===========
</TABLE>

See Notes to Financial Statements.

F-38
<PAGE> 94

SYMITAR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS -- Symitar Systems, Inc. (the "Company") is a
California corporation engaged in the design and development of data processing
software systems primarily for the credit union industry, which it sells
together with related hardware, program maintenance and software developed by
third parties. The Company's customers are primarily located throughout the
United States.

ACCOUNTING ESTIMATES -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results may differ
from those estimates.

REVENUE AND COST RECOGNITION -- Revenue is recognized under the provisions
of Statement of Position ("SOP") 97-2, "Software Revenue Recognition". Revenues
include sales of hardware, third-party software, proprietary software,
conversion services and software maintenance. Revenues and costs from hardware
and third-party software sales are recognized upon shipment. Revenues and costs
from sales of proprietary software and conversion services are recognized over
the period of conversion. Revenues and costs from software maintenance are
recognized ratably over the maintenance period.

CASH EQUIVALENTS -- Cash equivalents consist of investment instruments
purchased with an original maturity of three months or less.

ACCOUNTS RECEIVABLE -- Based upon past experience, management anticipates
that all receivables are collectible, therefore no allowance for doubtful
accounts has been established.

INVENTORIES -- Inventories consist of various types of hardware and
third-party software and are stated at the lower of cost or market. Cost is
generally determined on the first-in, first-out method.

PROPERTY -- Property is stated at cost. Depreciation on computer equipment,
furniture and software is provided using the straight-line method over the
estimated useful lives of the assets (generally three to ten years). Leasehold
improvements are amortized, using the straight-line method, over the shorter of
the life of the improvement or the remaining lease term.

DEFERRED REVENUE -- Deferred revenue represents amounts billed to customers
in advance of revenue earned.

INCOME TAXES -- The Company has elected to be taxed as a Subchapter S
corporation for federal and state purposes. Under this election, the Company is
not liable for federal taxes on income and is liable for only 1.5% of state
taxable income. Accordingly, the earnings of the Company are reported on the
stockholders' federal and state income tax returns.

CONCENTRATION OF CREDIT RISK -- The Company invests its excess cash in
money market accounts. At December 31, 1999 the Company had deposits in excess
of federally insured limits of approximately $4,526,627.

The Company sells its products to credit unions throughout the United
States and generally does not require collateral. Adequate reserves (which are
insignificant at December 31, 1999) are maintained for potential credit losses.

UNAUDITED INTERIM FINANCIAL STATEMENTS -- In the opinion of management, the
unaudited interim financial statements as of March 31, 2000 and for the three
month periods then ended reflect all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation. The

F-39
<PAGE> 95
SYMITAR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

accounting principles applied in preparation of the interim financial statements
are consistent with those applied in the annual financial statements. Results of
operations for the three month period ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the year ending December, 31,
2000.

2. BALANCE SHEET DETAILS AT DECEMBER 31, 1999

<TABLE>
<S> <C>
Property -- At Cost:
Computer equipment.......................................... $ 1,723,304
Furniture................................................... 999,079
Leasehold improvements...................................... 316,440
Software.................................................... 341,201
-----------
3,380,024
Less accumulated depreciation and amortization.............. (1,919,809)
-----------
Total....................................................... $ 1,460,215
===========
</TABLE>

3. COMMITMENTS

EMPLOYEE BENEFIT PLAN -- The Company has an employee profit sharing plan
with a 401(k) deferred compensation provision. The plan covers employees over 21
years old who have completed one year of service. The Company's contributions
are based upon the employees' compensation and voluntary employee deferrals.
Expense related to the plan was $983,253 for the year ended December 31, 1999.

OPERATING LEASE -- The Company leases office space under an operating lease
that expires in August 2004. The Company has an option to renew the lease for an
additional five years. Rent expense for the years ended December 31, 1999 was
$933,314. Payments under the lease are personally guaranteed by the Company's
stockholders. Future annual minimum lease payments are as follows:

<TABLE>
<S> <C>
2000........................................................ $ 745,643
2001........................................................ 799,033
2002........................................................ 874,119
2003........................................................ 948,336
2004........................................................ 572,486
----------
Total....................................................... $3,939,617
==========
</TABLE>

4. SUBSEQUENT EVENTS

DIVIDEND -- The Board of Directors approved the distribution of $900,000 in
dividends to stockholders of record as of January 14, 2000.

SALE OF THE COMPANY (UNAUDITED) -- On June 7, 2000, the stockholders of the
Company consummated the sale of the Company to Jack Henry & Associates, Inc. for
$44,000,000 in cash.

DIVIDENDS -- The Board of Directors approved distributions of $1,500,000
and $1,212,294 to stockholders of record as of April 14, 2000 and April 28,
2000, respectively.

F-40
<PAGE> 96
SYMITAR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

Prior to its sale, the Company had elected to be taxed as a Subchapter S
corporation for federal and state tax purposes. The pro forma provision for
income taxes that would have been recorded by the Company in addition to the
historical provision, utilizing statutory tax rates, had the Company not been an
S corporation prior to its sale was $1,841,416 and $245,475 for the year ended
December 31, 1999 and the three months ended March 31, 2000, respectively. In
addition, the undistributed earnings of an S corporation are required to be
reclassified to paid-in capital in pro forma statements. Therefore, historical
retained earnings, adjusted for the additional taxes in the respective period
discussed above, would have been reported as paid-in capital of $1,770,884 and
$1,326,252 at December 31, 1999 and March 31, 2000, respectively.

* * * * * *

F-41
<PAGE> 97

--------------------------------------------------------------------------------

[JACK HENRY LOGO]

PRUDENTIAL SECURITIES
CIBC WORLD MARKETS
ROBERT W. BAIRD & CO.
GEORGE K. BAUM & COMPANY
A.G. EDWARDS & SONS, INC.

--------------------------------------------------------------------------------
<PAGE> 98

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than the
underwriting discount and commissions, payable by the registrant in connection
with the sale of the common stock being registered hereby. All amounts shown are
estimates, except the Securities and Exchange Commission registration fee, the
NASD filing fee and the Nasdaq National Market supplemental listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 73,872
NASD filing fee............................................. 30,500
Nasdaq National Market supplemental listing fee............. 17,500
Blue Sky fees and expenses.................................. 2,500
Printing and engraving expenses............................. 90,000
Legal fees and expenses..................................... 150,000
Accounting fees and expenses................................ 175,000
Transfer Agent and Registrar fees........................... 2,000
Miscellaneous expenses...................................... 83,628
--------
Total.................................................. $625,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "DGCL") permits a
corporation to indemnify any of its directors or officers who was or is a party
or is threatened to be made a party to any third party proceeding by reason of
the fact that such person is or was a director or officer of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such person's conduct was
unlawful. In a derivative action, i.e., one by or in the right of a corporation,
the corporation is permitted to indemnify any of its directors or officers
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made if such person shall have been
adjudged liable to the corporation, unless and only to the extent that the court
in which such action or suit was brought shall determine upon application that
such person is fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.

Article Eleventh of the Registrant's Certificate of Incorporation provides
for indemnification of directors and officers of the Registrant against
liability they may incur in their capacities as such to the fullest extent
permitted by the DGCL.

The Registrant has entered into indemnification agreements with its
directors and officers. Pursuant to such agreements, the Registrant will, to the
extent permitted by applicable law, indemnify such persons against all expenses
incurred in connection with the defense or settlement of any proceeding brought
against them by reason of the fact that they were directors or officers of the
Registrant.

The Registrant has in effect directors' and officers' liability insurance
with a limit of $1,000,000 and fiduciary liability insurance with a limit of
$1,000,000. The fiduciary liability insurance covers actions of directors and
officers as well as other employees with fiduciary responsibilities under ERISA.

II-1
<PAGE> 99

The Underwriting Agreement (Exhibit 1.1 hereto) provides for
indemnification by the Underwriter of the Registrant and its executive officers
and directors, and by the Registrant of the Underwriters, for certain
liabilities, including liabilities arising under the Securities Act, in
connection with matters specifically provided in writing by the Underwriters for
inclusion in this Registration Statement.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

(a) On July 10, 1997, Jack Henry & Associates issued 444,938 (adjusted for 2 for
1 stock split) shares of fully paid and non-assessable common stock to the
shareholders of G.G. Pulley & Associates, Inc., as total consideration for a
transaction whereby Pulley was acquired by merger. These shares of common stock
were issued in an unregistered, non-public transaction in which no underwriters
participated. These shares were issued under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933.

(b) On September 1, 1997, Jack Henry & Associates issued 48,316 (adjusted for 2
for 1 stock split) shares of fully paid and non-assessable common stock to Gary
S. Neal and Marcia G. Neal, sole shareholders of Financial Software Systems,
Inc., as total consideration for a transaction whereby all of the outstanding
capital stock of FSS was acquired. These shares of common stock were issued in
an unregistered, non-public transaction in which no underwriters participated.
These shares were issued under the exemption from registration provided by
Section 4(2) of the Securities Act.

(c) On December 12, 1997, Jack Henry & Associates issued 152,400 (adjusted for 2
for 1 stock split) shares of fully paid and non-assessable common stock to the
shareholders of Vertex, Inc., as partial consideration for a transaction whereby
all of the outstanding capital stock of Vertex was acquired. These shares of
common stock were issued in an unregistered, non-public transaction in which no
underwriters participated. These shares were issued under the exemption from
registration provided by Section 4(2) of the Securities Act.

(d) On June 1, 2000, Jack Henry & Associates issued 388,712 shares of fully paid
non-assessable Company common stock to the shareholders of Sys-Tech, Inc. of
Kansas (Sys-Tech) and 28,700 shares of fully paid non-assessable common stock to
the shareholders of Big Sky Marketing, Inc., as total consideration for a
transaction whereby all of the outstanding capital stock of Sys-Tech and of BSMI
were acquired by merger. These shares were issued under the exemption from
registration provided by Sections 4(2) and 4(6) of the Securities Act and Rule
506 thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 Form of Underwriting Agreement (filed herewith).
3.1.1 Certificate of Incorporation, attached as Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1, filed
November 17, 1985.
3.1.2 Certificate of Amendment of Certificate of Incorporation
attached as Exhibit 4 to the Registrant's Quarterly Report
on Form 10-Q for the Quarter ended December 31, 1987.
3.1.3 Certificate of Amendment of Certificate of Incorporation,
attached as Exhibit 3.1 to the Registrant's Annual Report on
Form 10-K for the Year Ended June 30, 1993.
3.1.4 Certificate of Amendment of Certificate of Incorporation,
attached as Exhibit 3.5 to the Registrant's Annual Report on
Form 10-K for the year ended June 30, 1997.
3.1.5 Certificate of Amendment of Certificate of Incorporation,
attached as Exhibit 3.6 to the Registrant's Annual Report on
Form 10-K for the year ended June 30, 1998.
3.2.1 Amended and Restated Bylaws, attached as Exhibit A to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
ended March 31, 1996.
4.1 Form of Common Stock Certificate of the Registrant.*
5.1* Opinion of Shughart Thomson & Kilroy P.C., regarding the
legality of securities to be issued.*
</TABLE>

II-2
<PAGE> 100

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.1 The Registrant's 1987 Stock Option Plan, as amended as of
October 27, 1992, attached as Exhibit 19.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
ended September 30, 1992.
10.2 The Registrant's Non-Qualified Stock Option Plan, as amended
as of October 26, 1993, attached as Exhibit 19.2 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
ended September 30, 1993.
10.3 The Registrant's 1995 Non-Qualified Stock Option Plan,
attached as Exhibit 10.3 to the Registrant's Annual Report
on Form 10-K for the Year Ended June 30, 1996.
10.4 IBM Remarketer Agreement dated May 21, 1992, attached as
Exhibit 10.1 to the Registrant's Annual Report on Form 10-K
for the Year Ended June 30, 1992; renewed for a two year
term on January 1, 1997.
10.5 Form of Indemnity Agreement which has been entered into as
of August 27, 1996, between the Registrant and each of its
Directors, attached as Exhibit 10.8 to the Registrant's
Annual Report on Form 10-K for the Year Ended June 30, 1996.
10.6 The Registrant's 1996 Stock Option Plan, attached as Exhibit
10.9 to the Registrant's Annual Report on Form 10-K for the
Year Ended June 30, 1997.
10.7 Agreement and Plan of Merger regarding acquisition of
Peerless Group, Inc. dated August 18, 1998, attached as
Exhibit 10.7 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1998.
10.11 Line of Credit Agreement dated September 7, 1999, between
the Company and Commerce Bank, N.A., attached as Exhibit
10.11 to the Company's current report on Form 8-K filed
September 20, 1999.
10.12 Agreement for Sale and Purchase of Assets dated September 1,
1999, by and among the Company, Open Systems Group, Inc. and
BancTec, Inc. attached as Exhibit 2.1 to the Company's
current report on Form 8-K filed September 20, 1999.
10.13 Agreement and Plan of Merger regarding acquisition of
Sys-Tech, Inc. of Kansas and Big Sky Marketing, Inc. dated
June 1, 2000, attached as Exhibit 2.1 to the Company's
current report on Form 8-K filed June 14, 2000.
10.14 Stock Purchase Agreement dated May 14, 2000, between the
Company and the Stockholders of Symitar Systems, Inc.,
attached as Exhibit 2.1 to the Company's current report on
Form 8-K filed June 19, 2000.
10.15 Line of Credit Loan Modification Agreement dated June 6,
2000 between the Company and Commerce Bank, N.A. attached as
Exhibit 10.11 to the Company's current report on Form 8-K
filed June 19, 2000.
21.2 List of the Company's subsidiaries (filed herewith)
23.1* Consent of Shughart Thomson & Kilroy P.C., (included in the
opinion filed as Exhibit 5.1 to this Registration Statement)
23.2 Consent of Deloitte & Touche LLP (filed herewith).
23.3 Consent of Deloitte & Touche LLP (filed herewith).
23.4 Consent of Deloitte & Touche LLP (filed herewith).
24.1 Power of Attorney (included on page II-5 hereof).
</TABLE>

---------------

* To be filed by amendment

II-3
<PAGE> 101

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-4
<PAGE> 102

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Monett, State of
Missouri, on the day of July, 2000.

JACK HENRY & ASSOCIATES, INC.
/S/ MICHAEL E. HENRY
By:
--------------------------------------

Michael E. Henry, Chairman of the
Board and
Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below authorizes Michael E. Henry and
Terry W. Thompson and each of them, each of whom may act without joinder of the
other, to execute in the name of each such person who is then an officer or
director of the Company and to file any amendments to this Registration
Statement necessary or advisable to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection with
the registration of the securities which are the subject of this Registration
Statement, which amendments may make such changes in the Registration Statement
as such attorney may deem appropriate. Pursuant to the requirements of the
Securities Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
/s/ MICHAEL E. HENRY Chairman of the Board and July 13, 2000
--------------------------------------------- Chief Executive Officer
Michael E. Henry

/s/ MICHAEL R. WALLACE President, Chief Executive Officer and July 13, 2000
--------------------------------------------- Director
Michael R. Wallace

/s/ JOHN W. HENRY Vice Chairman, Senior Vice President and July 13, 2000
--------------------------------------------- Director
John W. Henry

/s/ JERRY D. HALL Executive Vice President and Director July 13, 2000
---------------------------------------------
Jerry D. Hall

/s/ TERRY W. THOMPSON Vice President, Treasurer and July 13, 2000
--------------------------------------------- Chief Financial Officer
Terry W. Thompson (Principal Accounting Officer)

/s/ JAMES J. ELLIS Director July 13, 2000
---------------------------------------------
James J. Ellis

Director July , 2000
---------------------------------------------
Burton O. George

/s/ GEORGE R. CURRY Director July 13, 2000
---------------------------------------------
George R. Curry
</TABLE>