<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
THE BISYS GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
THE BISYS GROUP, INC.
150 CLOVE ROAD
LITTLE FALLS, NEW JERSEY 07424
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 14, 1996
The Annual Meeting of Stockholders of The BISYS Group, Inc. ("BISYS" or the
"Company") will be held at the executive offices of the Company at 150 Clove
Road, Little Falls, New Jersey 07424, on November 14, 1996, at 9:00 a.m., for
the following purposes:
1. to elect six directors to hold office until the next Annual Meeting
of Stockholders and until their respective successors shall have been
duly elected and qualified;
2. to consider and vote upon a proposal to approve the Company's 1996
Stock Option Plan;
3. to consider and vote upon a proposal to approve the Company's 1997
Employee Stock Purchase Plan;
4. to consider and vote upon a proposal to amend the Company's 1995
Stock Option Plan;
5. to consider and vote upon a proposal to amend the Company's 1989
Amended and Restated Stock Option and Restricted Stock Purchase Plan;
6. to consider and vote upon a proposal to ratify the selection of
Coopers & Lybrand L.L.P., independent public accountants, as the
auditors of the Company for the fiscal year ending June 30, 1997; and
7. to transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 18, 1996
as the record date for the determination of the stockholders of the Company
entitled to notice of and to vote at the Annual Meeting of Stockholders. Each
share of the Company's Common Stock outstanding on the record date is entitled
to one vote on all matters presented at the Annual Meeting.
ALL HOLDERS OF THE COMPANY'S COMMON STOCK (WHETHER THEY EXPECT TO ATTEND THE
ANNUAL MEETING OR NOT) ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY
THE PROXY CARD ENCLOSED WITH THIS NOTICE.
By Order of the Board of Directors
Kevin J. Dell
Secretary
October 4, 1996
<PAGE>
THE BISYS GROUP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 14, 1996
INTRODUCTION
This Proxy Statement is being furnished to stockholders of record of The
BISYS Group, Inc. ("BISYS" or the "Company") as of September 18, 1996 (the
"Record Date") in connection with the solicitation by the Board of Directors of
BISYS of proxies for the 1996 Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Company's corporate headquarters at 150 Clove Road,
Little Falls, New Jersey 07424, on November 14, 1996 at 9:00 a.m., or at any
adjournments thereof, for the purposes stated in the Notice of Annual Meeting.
The approximate date of mailing of this Proxy Statement and enclosed form of
proxy to stockholders is October 4, 1996.
As of the Record Date, the Company had outstanding 24,949,731 shares of
Common Stock, $.02 par value ("Common Stock"). Each share of Common Stock
outstanding on the Record Date is entitled to one vote on all matters presented
at the Annual Meeting. A majority of the outstanding shares entitled to vote at
the Annual Meeting will constitute a quorum. Abstentions and broker non-votes
are counted as present for purposes of determining whether a quorum is present.
Directors are elected by a plurality of votes cast. All other matters to
properly come before the Annual Meeting require the approval of a majority of
shares of Common Stock present and entitled to vote with respect to such
matters. Abstentions and broker non-votes have no impact on the election of
directors except to reduce the number of votes for the nominee(s). With respect
to all other proposals, abstentions as to particular proposals will have the
same effect as votes against such proposals, while broker non-votes are not
counted as votes and are not included in calculating the number of votes
necessary for approval.
If the enclosed proxy is signed and returned, it may, nevertheless, be
revoked at any time prior to the voting thereof at the pleasure of the
stockholder signing it, either by a written notice of revocation received by the
person or persons named therein or by voting the shares covered thereby in
person or by another proxy dated subsequent to the date thereof.
Shares represented by duly executed proxies in the accompanying form will be
voted in accordance with the instructions indicated on such proxies, and, if no
such instructions are indicated thereon, will be voted in favor of the nominees
for election as directors named below and for the other proposals referred to
below. If any other matters properly come before the Annual Meeting, it is
intended that the persons named as proxies will vote such shares in accordance
with their own judgment.
1. ELECTION OF DIRECTORS
The entire Board of Directors is comprised of six directors. All directors
will be elected for terms expiring at the 1997 Annual Meeting. Proxies may not
be voted for a greater number of persons than the six nominees named herein. The
directors will continue to serve until their respective successors are duly
elected and qualified.
Shares represented by proxies returned duly executed will be voted, unless
otherwise specified, in favor of the six nominees for the Board of Directors
named below. If any (or all) such persons should be unable to serve, the persons
named in the enclosed proxy will vote the shares of Common Stock covered thereby
for such substitute nominee (or nominees) as the Board of Directors may select.
Stockholders may withhold authority to vote for any nominee by entering the name
of such nominee in the space provided for such purpose on the proxy card.
<PAGE>
NOMINEES FOR ELECTION AS DIRECTOR
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
- ------------------------------ ---------------------------------------------------------------------- -----------
<S> <C> <C>
Lynn J. Mangum................ Chairman of the Board and Chief Executive Officer of BISYS 1989
Paul H. Bourke................ President and Chief Operating Officer of BISYS 1989
Jay W. DeDapper............... Until retirement, Executive Vice President (Operations), NL 1989
Industries, Inc., a metal, chemical and petroleum company
John J. Lyons................. President and Managing Principal, Lyons Advisors, Inc., a New 1992
York-based bank and thrift consulting firm
Neil P. Marcous............... Vice President/General Manager of the Electronic Commerce Division of 1994
Electronic Data Systems, Inc., an information technologies company
Thomas E. McInerney........... General Partner of Welsh, Carson, Anderson & Stowe, a New York 1989
investment firm
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the nominees
for the office of director and each other executive officer of BISYS:
NOMINEES
Mr. Mangum, 54, has been Director, Chairman of the Board, and Chief
Executive Officer of the Company since its formation in 1989. Prior to that
time, he served as a Corporate Vice President at Automatic Data Processing, Inc.
("ADP") and as Division President for ADP's Employer Services National Accounts
Division from December 1988 to August 1989. Prior to that, he served for 22
years in various capacities in ADP's Financial Services Group including, among
other positions, Division President for the predecessor company of the Company
since 1983.
Mr. Bourke, 50, has been Director, President and Chief Operating Officer of
the Company since its formation in 1989. Prior to that time, he served as Senior
Vice President/General Manager of the predecessor company of the Company since
June 1987, and Senior Vice President/Operations Executive since July 1982.
Mr. DeDapper, 72, has served as a Director of the Company since 1989. Mr.
DeDapper is retired. Prior to his retirement, he served for more than five years
as Executive Vice President (Operations) of NL Industries, Inc., a metal,
chemical and petroleum company and served on its Board of Directors.
Mr. Lyons, 56, has served as a Director of the Company since 1992. He is
presently President and Chief Executive Officer and a Director of Regent
National Bank, Philadelphia, Pennsylvania; from April 1995 to August 1996, he
was President and Chief Executive Officer and a Director of Monarch Savings
Bank, FSB, Clark, New Jersey; and since April 1995, he has been President and
Managing Principal of Lyons Advisors, Inc., a New York-based bank and thrift
consulting firm. From December 1993 to April 1995, he was President and Chief
Executive Officer of Jupiter Tequesta National Bank, a national bank
headquartered in Tequesta, Florida. From 1980 to December 1993, he was President
and Chief Executive Officer of Lyons, Zomback & Ostrowski, Inc., a New
York-based bank and thrift consulting firm. That firm became a subsidiary of
Advest Group, Inc., a holding company with a brokerage firm as its principal
subsidiary. Mr. Lyons was Vice Chairman of Advest, Inc. during 1993 and from
1989 through 1993 was a member of its Board of Directors.
2
<PAGE>
Mr. Marcous, 48, has served as a Director of the Company since 1994. Mr.
Marcous has been Vice President/General Manager of the Electronic Commerce
Division of Electronic Data Systems, Inc. ("EDS"), a provider of information
technologies services including electronic funds transfer services, since he
joined EDS in May 1989. From May 1984 to April 1989, Mr. Marcous was employed in
various positions with the Electronic Financial Services Division of ADP, most
recently as Senior Vice President/Division General Manager.
Mr. McInerney, 55, has served as a Director of the Company since 1989. From
September 1987 to the present time, Mr. McInerney has been a general partner of
Welsh, Carson, Anderson & Stowe, a venture capital and buyout firm specializing
in the information processing and healthcare industries, and is a general
partner of the respective sole general partners of its associated limited
partnerships. He is also a director of Decision One Corp., a computer system
maintenance supplier and Aurora Electronics, Inc., a spare parts and maintenance
provider for computer manufacturers.
All directors are elected annually and hold office until the next annual
meeting of stockholders and until their successors are duly elected and
qualified. Each of Messrs. DeDapper, Lyons, Marcous and McInerney receive a
$15,000 annual retainer and a $500 fee for their personal attendance at each
meeting. The other directors of the Company do not receive any compensation for
their services, but are reimbursed for expenses. In addition to the cash
compensation paid to the Company's non-employee directors, pursuant to the
Company's Non-Employee Directors' Stock Option Plan each of the then serving
non-employee directors receives a grant, on the date of each Annual Meeting of
Stockholders, of options to purchase 1,200 shares of Common Stock. Such options
are exercisable at the closing price of the Common Stock on the trading day
immediately preceding the date of grant and are fully exercisable upon grant.
During fiscal 1996, the Board of Directors of the Company held eight
meetings. The standing committees of the Board of Directors are the Audit
Committee, whose members are Messrs. DeDapper and Marcous, and the Compensation
Committee, whose members are Messrs. Lyons and McInerney. The Audit Committee
periodically consults with the Company's management and independent public
accountants on financial matters, including the Company's internal financial
controls and procedures. The Audit Committee held five meetings in fiscal 1996.
The Compensation Committee reviews and makes recommendations with respect to the
salary and incentive compensation of the Chief Executive Officer and other
executive officers of the Company, and certain other employees of the Company
and its subsidiaries whose salaries are in excess of specified levels;
administers the Company's Amended and Restated Stock Option and Restricted Stock
Purchase Plan and 1995 Stock Option Plan, including the granting of stock
options and rights to purchase Common Stock; and administers the Company's
annual Employee Stock Purchase Plans, as approved by the Stockholders. During
fiscal 1996, the Compensation Committee held seven meetings. The Board of
Directors of the Company does not have a standing Nomination Committee.
During fiscal 1996, all of the Company's directors attended more than 75% of
the meetings of the Board of Directors and all committees on which they served.
OTHER EXECUTIVE OFFICERS
Robert J. McMullan, 42, has served as Executive Vice President and Chief
Financial Officer since 1995. He joined the Company as a Vice President and
Chief Financial Officer in November 1990.
J. Robert Jones, 43, serves as Senior Vice President of Business Development
of the Company, which became an executive officer position in 1996. He
previously served in a similar position within the BISYS organization since
1991. From March 1989 to June 1991, Mr. Jones served as Vice President of Sales
and Marketing.
Mark J. Rybarczyk, 41, has served as Senior Vice President of the Company
since 1993. He has also served as Vice President, Human Resources of the Company
and its predecessor company since June 1987 and Director of Human Resources
since October 1984.
3
<PAGE>
Kevin J. Dell, 40, joined the Company in September 1996 as Vice President,
General Counsel and Secretary. From 1993 until he joined the Company, he served
as Vice President, General Counsel and Secretary of Concurrent Computer
Corporation, a supplier of real-time computer systems, which he joined in 1987
as senior corporate counsel.
Executive officers serve at the discretion of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of Forms 3, 4 and 5 submitted to the Company during and
with respect to fiscal 1996, all statements of beneficial ownership required to
be filed with the Securities and Exchange Commission (the "Commission") were
timely filed.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of September 18, 1996, certain
information with respect to the shares of Common Stock beneficially owned by
stockholders known to the Company to own beneficially more than 5% of the
outstanding shares of Common Stock:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------
<S> <C> <C>
PERCENT
BENEFICIAL OWNER NUMBER OF SHARES(1) OF CLASS
- ----------------------------------------------------- ------------------- -----------
Michigan (State of) Pension 1,470,000 5.89%
Fund System
c/o State Treasurer
Treasury Building
425 West Allegan Rd.
Lansing, Michigan 48902
</TABLE>
- ------------------------
(1) Stockholder has sole voting and investment power with respect to the shares
shown as beneficially owned by it.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of September 18, 1996, certain
information with respect to the shares of Common Stock beneficially owned by (i)
each director, (ii) each of the Company's executive officers for whom
compensation information is disclosed below under the heading "Executive
Compensation" and (iii) all the Company's directors and executive officers as a
group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------
<S> <C> <C>
PERCENT
BENEFICIAL OWNER NUMBER OF SHARES(1) OF CLASS
- --------------------------------------------------------- ------------------- -----------
Lynn J. Mangum........................................... 285,706(2) 1.14%
Paul H. Bourke........................................... 184,274(3) *
Jay W. DeDapper.......................................... 2,900(4) *
John J. Lyons............................................ 4,400(4) *
Neil P. Marcous.......................................... 2,400(4) *
Thomas E. McInerney...................................... 41,253(4) *
Robert J. McMullan....................................... 77,024(5) *
J. Robert Jones.......................................... 109,814(6) *
Mark J. Rybarczyk........................................ 89,980(7) *
All directors and executive officers as a group (10
persons)............................................... 797,751(8) 3.13%
</TABLE>
- ------------------------
* Less than 1.0%.
(1) Unless otherwise noted, each person has sole voting and investment power
with respect to the shares shown as beneficially owned by him.
(2) Includes an aggregate 155,191 shares subject to currently exercisable stock
options.
(3) Includes an aggregate 152,294 shares subject to currently exercisable stock
options.
(4) Includes an aggregate 2,400 shares subject to currently exercisable stock
options.
(5) Includes an aggregate 76,000 shares subject to currently exercisable stock
options.
(6) Includes an aggregate 75,677 shares subject to currently exercisable stock
options.
(7) Includes an aggregate 64,397 shares subject to currently exercisable stock
options.
(8) Includes an aggregate 533,159 shares subject to currently exercisable stock
options.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended June 30, 1996, 1995
and 1994, certain compensation information as to the Chief Executive Officer and
each of the four most highly compensated executive officers of the Company who
served as executive officers during the fiscal year ended June 30, 1996 ("Named
Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
----------------------------
<S> <C> <C> <C> <C> <C> <C>
AWARDS
ANNUAL COMPENSATION ----------------------------
(F) (G)
---------------------- RESTRICTED SECURITIES PAYOUTS
(A) (C) (D) STOCK UNDERLYING (H)
NAME AND PRINCIPAL (B) SALARY BONUS AWARDS OPTIONS/ LTIP
POSITION YEAR ($) ($) ($) SARS(#) PAYOUTS
- ------------------------------------------ --------- ----------- --------- --------------- ----------- -------------
Lynn J. Mangum ........................... 1996 323,612 300,000 -- 120,000 --
Chairman of the Board and Chief 1995 292,557 290,000 -- -- --
Executive Officer 1994 249,231 220,000 -- 120,000 --
Paul H. Bourke ........................... 1996 250,565 200,000 -- 90,000 -- --
President and Chief Operating Officer 1995 221,731 160,000 -- -- --
1994 175,384 160,000 -- 90,000
Robert J. McMullan ....................... 1996 230,903 260,000 -- -- -- 80,000 --
Executive Vice President and Chief 1995 187,385 213,000 -- --
Financial Officer 1994 146,730 110,000 80,000 --
J. Robert Jones(2) ....................... 1996 156,774 220,000 -- 60,000 --
Senior Vice President, Business
Development
Mark J. Rybarczyk ........................ 1996 128,692 95,000 -- 50,000 --
Senior Vice President, Human Resources 1995 117,023 95,000 -- -- --
1994 100,173 90,000 -- 30,000 --
<CAPTION>
<S> <C>
(I)
(A) ALL OTHER
NAME AND PRINCIPAL COMPENSATION(1)
POSITION ($)
- ------------------------------------------ -----------------
Lynn J. Mangum ........................... 5,660
Chairman of the Board and Chief 8,820
Executive Officer 7,181
Paul H. Bourke ........................... 5,660
President and Chief Operating Officer 8,820
7,181
Robert J. McMullan ....................... 5,660
Executive Vice President and Chief 7,620
Financial Officer 6,281
J. Robert Jones(2) ....................... 5,660
Senior Vice President, Business
Development
Mark J. Rybarczyk ........................ 5,660
Senior Vice President, Human Resources 4,320
2,981
</TABLE>
- ------------------------
(1) For each named individual, $3,260 of the disclosed amount for 1996, $1,920
of the disclosed amount for 1995 and $581 of the disclosed amount for 1994
represents the difference between the actual purchase price of shares
purchased pursuant to the Company's Employee Stock Purchase Plan for each
such year and the fair market value of such shares on the date purchased.
$2,400 of the disclosed amount in all years represents the Company's
matching contribution under the Company's 401(k) plan and the remainder, if
any, represents an annual car allowance.
(2) Mr. Jones became an executive officer of the Company during the fiscal year
ended June 30, 1996.
6
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the grant of stock
options to the Named Executive Officers during the fiscal year ended June 30,
1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
---------------------------- ASSUMED ANNUAL RATES
NUMBER OF OF STOCK PRICE
SECURITIES % OF APPRECIATION FOR
UNDERLYING TOTAL OPTIONS EXERCISE OPTION TERM
OPTIONS GRANTED TO OR BASE ----------------------
GRANTED(1) EMPLOYEES IN PRICE EXPIRATION 5%
NAME (#) FISCAL YEAR ($/SH) DATE ($)(2) 10%($)(2)
- ----------------------------------------------- ----------- --------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lynn J. Mangum................................. 120,000 9.45% 24.875 8/22/05 1,877,400 4,757,400
Paul H. Bourke................................. 90,000 7.09% 24.875 8/22/05 1,408,050 3,568,050
Robert J. McMullan............................. 80,000 6.30% 24.875 8/22/05 1,251,600 3,171,600
J. Robert Jones................................ 60,000 4.72% 24.875 8/22/05 938,700 2,378,700
Mark J. Rybarczyk.............................. 50,000 3.94% 24.875 8/22/05 782,250 1,982,250
</TABLE>
- ------------------------
(1) Options granted August 22, 1995 pursuant to the Company's Amended and
Restated Stock Option and Restricted Stock Purchase Plan, with an exercise
price equal to the fair market value as of the date of grant and vesting
over a five year period, 20% on each anniversary of the date of grant.
(2) The dollar amounts under these columns are based on the assumed appreciation
rates of 5% and 10% prescribed by the Commission. These amounts are not
intended to forecast possible future appreciation, if any, of the Company's
stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held at the end of the fiscal year ended June 30,
1996:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR FISCAL YEAR END
ACQUIRED VALUE END(#) ($)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ------------- ----------------- ------------------------
<S> <C> <C> <C> <C>
Lynn J. Mangum.......................... 92,500 $ 2,149,393 137,191/192,000 $ 4,046,578/$2,832,000
Paul H. Bourke.......................... -- -- 116,294/144,000 $ 3,514,011/$2,124,000
Robert J. McMullan...................... 38,000 $ 878,793 44,000/138,000 $ 886,940/$2,186,910
J. Robert Jones......................... -- -- 53,677/90,000 $ 1,561,453/$1,308,750
Mark J. Rybarczyk....................... 10,000 $ 277,500 48,397/68,000 $ 1,515,693/$965,500
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has not entered into employment agreements with any of its
executive officers.
7
<PAGE>
In May 1995, the Company entered into Letter Agreements with Messrs. Mangum,
Bourke and McMullan providing, among other items, that each such executive would
receive a lump sum severance payment equal to one and one-half times the sum of
the executive's then current base salary plus the greater of the executive's
then current fiscal year's "At Plan" annual incentive target amount or the
immediately prior fiscal year's annual incentive settlement amount, in the event
his employment is terminated other than for cause or after a change in control
of the Company. In the event of a change in control of the Company, the
executive may terminate unilaterally his employment with the Company for any
reason for the first 12 months after the change in control and during the 13th
through 36th month after the change in control under certain circumstances and,
in the event of such termination of employment, the executive would receive a
lump sum severance payment equal to two times the sum of the executive's then
current base salary plus the greater of the executive's then current fiscal
year's "At Plan" annual incentive target amount or the immediately prior fiscal
year's annual incentive settlement amount. The agreements do not provide any
guarantee of employment or any other terms and conditions of employment.
In August 1994, the Compensation Committee amended the vesting provisions
relating to stock option grants then in existence or thereafter granted pursuant
to the Company's Amended and Restated Stock Option and Restricted Stock Purchase
Plan to the executive officers of the Company and such other senior employees of
the Company who in the opinion of the Committee would be adversely affected in
their employment by a "change in control" of the Company. In the event of change
in control of the Company, all option shares then granted, to the extent not
previously vested, shall be automatically vested as of the effective date of
such change in control.
REPORT ON EXECUTIVE COMPENSATION
All issues relating to executive officer compensation are addressed by the
Board of Directors' Compensation Committee. The Compensation Committee, which is
comprised of Messrs. McInerney and Lyons, approves base salary and incentive
compensation plans for certain executive officers and selected senior executives
and reviews and recommends base salary and incentive compensation plans for
executive officers who are also directors for final approval by the Board of
Directors. Mr. Mangum, the Company's Chairman and Chief Executive Officer, and
Mr. Bourke, the Company's President and Chief Operating Officer, as Directors,
do not participate in decisions regarding their own compensation. The
Compensation Committee also establishes stock option plan participation levels
for all executive officers and selected senior executives. This report is
submitted by the Compensation Committee.
The components of the Company's executive compensation program consist of
base salaries, annual incentive plans and stock options. The Company's
compensation program is intended to provide executive officers with overall
levels of compensation opportunity that are competitive within the information
and investment services industries, as well as within a broader spectrum of
companies of comparable size and complexity. The Company's compensation program
is structured and administered to support the Company's business mission and
generate favorable returns for its stockholders.
BASE SALARY. Each executive officer's and senior officer's base salary is
derived primarily through an analysis of industry and competitive labor markets
for executive officer services. Other factors in formulating base salary
recommendations include the level of an executive's compensation in relation to
other executives in the Company with the same, more and less responsibilities,
the performance of the particular executive's business unit or department in
relation to established strategic plans, the Company's operating budget for the
year and the overall performance of the Company.
INCENTIVE COMPENSATION PLAN. For each executive officer and senior officer,
an incentive compensation plan is established at the beginning of each fiscal
year in connection with the Company's strategic plans and annual operating
budgets. Under this incentive compensation plan, an executive's potential
incentive payment is related to the Company's operating earnings per share
growth, the financial
8
<PAGE>
performance of an executive's division or department and, progress against
identified significant non-financial objectives, as well as any measurable
outstanding accomplishments achieved by the executive during the fiscal year.
Because growth in the Company's operating earnings per share, a substantial
factor in the calculation of incentive compensation, exceeded the Company's
expectations in fiscal 1996, bonuses for each of the Company's named executive
officers exceeded target levels for the year.
STOCK OPTION AWARDS. The Company maintains stock option plans that are
designed to align executive employees and stockholders' interests in the
enhancement of stockholder value. In formulating recommendations for stock
option awards, the Compensation Committee evaluates the dilutive impact of
additional stock options, the Company's overall financial performance for the
year, the desirability of long-term service from an executive and the number of
options held by other executives in the Company with the same, more and less
responsibility than the executive at issue. To encourage long-term performance,
executive options typically vest over a five year period and remain outstanding
for ten years.
CEO COMPENSATION. Compensation for Mr. Mangum, the Company's Chairman and
Chief Executive Officer, is based on the same criteria used for executive
officers generally, including an analysis of chief executive compensation of
comparable companies. Because operating earnings per share growth and the
strategic positioning of the Company, the key determinants of Mr. Mangum's
incentive compensation, exceeded the Company's expectations in fiscal 1996, Mr.
Mangum's incentive compensation exceeded the target level for the year.
September 25, 1996 John J. Lyons
Thomas E. McInerney
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are John J. Lyons and
Thomas E. McInerney, each of whom are directors but are not current or former
employees of the Company. There were no Compensation Committee interlocks or
insider participation during fiscal 1996.
COMPARISON OF TOTAL CUMULATIVE RETURN ON THE COMMON STOCK AMONG THE BISYS
GROUP, INC., VALUE LINE INVESTMENT SURVEY'S COMPUTER SOFTWARE AND SERVICES GROUP
AND NASDAQ MARKET INDEX.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BISYS INDUSTRY INDEX NASDAQ
<S> <C> <C> <C>
3/19/92 100.00 100.00 100.00
1/25/93 189.77 116.32 107.51
12/3/93 205.68 119.70 123.43
10/31/94 200.00 141.90 135.39
8/23/95 220.45 212.19 160.93
6/30/96 343.18 252.02 180.87
</TABLE>
Assumes $100 invested on March 18, 1992 in BISYS Common Stock, the 30
company Value Line Investment Survey Software and Services Industry Group
("Industry Index") and the NASDAQ Market Index. The measurement period begins on
March 18, 1992, the date the Common Stock was registered under Section 12 of the
Securities Exchange Act of 1934 in connection with the Company's initial public
offering.
<TABLE>
<CAPTION>
3/18/92 1/25/93 12/3/93 10/13/94 8/23/95 6/30/96
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
BISYS.................................................... $ 100.00 $ 189.77 $ 205.68 $ 200.00 $ 220.45 $ 343.18
INDUSTRY INDEX........................................... $ 100.00 $ 116.32 $ 119.70 $ 141.90 $ 212.19 $ 252.02
--------- --------- --------- --------- --------- ---------
NASDAQ................................................... $ 100.00 $ 107.51 $ 123.43 $ 135.39 $ 160.93 $ 180.87
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
The above report of the Compensation Committee and the Stock Performance
Graph is not deemed to be soliciting material or to be filed with or
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates such report or graph by
reference.
2. APPROVAL OF 1996 STOCK OPTION PLAN
The Board of Directors believes that stock option grants have been a key
element in the Company's successful growth. The Company has relied and continues
to rely on stock options as an incentive to recruit and retain talented officers
and employees and to assist in the implementation of its strategic acquisition
program (over 31% of the Company's outstanding stock options as of June 30, 1996
were issued in connection with corporate acquisitions).
10
<PAGE>
In order to continue its strategic use of stock options, on August 15, 1996,
the Board of Directors adopted, subject to stockholder approval, The BISYS
Group, Inc. 1996 Stock Option Plan (the "1996 Option Plan"). The 1996 Option
Plan provides for the granting of "non-qualified stock options" and "incentive
stock options" to acquire Common Stock (collectively, "1996 Options") to
employees. The Board of Directors believes that the grant of 1996 Options is an
important incentive for motivating employees and officers through the
opportunity of equity participation. In the view of the Directors, stock options
uniquely focus the attention of officers and employees on the Company's goal of
increasing shareholder value, since the options only provide a reward to the
extent that stock price grows. By encouraging such stock ownership, the Company
seeks to encourage such employees to devote their best efforts to the business
and financial success of the Company. The 1996 Option Plan is intended to serve
this function.
An aggregate of 1,000,000 shares of Common Stock have been reserved for
issuance of 1996 Options, subject to stockholder approval of the 1996 Option
Plan. In the event that any outstanding 1996 Options expire or are terminated,
the shares allocable to such expired or terminated 1996 Options shall again
become available for the granting of 1996 Options. If any shares acquired
pursuant to the exercise of 1996 Options are repurchased by the Company, such
shares shall again become available for the granting of 1996 Options. If
approved by stockholders, the 1996 Option Plan will become effective
immediately.
A copy of the 1996 Option Plan is attached to this Proxy Statement as
Exhibit A. The principal features of the 1996 Option Plan are summarized below.
The terms and conditions of individual option agreements may vary, subject
to the following guidelines: (i) the option price of incentive stock options may
not be less than market value on the date of grant, (ii) the term of all
incentive stock options may not exceed ten years from the date of grant; the
term of all non-qualified stock options may exceed ten years, and (iii) no
options may be granted after November 14, 2006.
The 1996 Option Plan will be administered by the Compensation Committee of
the Board of Directors (the "Committee"). Under the 1996 Option Plan, the
Committee must consist of two or more persons, each of whom shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 ("Rule 16b-3") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
"Outside Directors" as defined for purposes of Section 162(m) ("Section 162(m)")
of the Internal Revenue Code of 1986, as amended (the "Code"). The Committee
will determine (i) which officers and employees of the Company and its
subsidiaries shall be granted 1996 Options; (ii) the number of shares subject to
each such 1996 Option; (iii) the amount to be paid by a grantee upon exercise of
1996 Options; (iv) the time or times and the conditions subject to which 1996
Options may be exercised; and (v) the form of consideration that may be used to
pay for shares issued upon exercise of such 1996 Options. The Committee will
also be responsible for the administration and interpretation of the 1996 Option
Plan.
The 1996 Option Plan provides that the maximum number of shares of Common
Stock for which 1996 Options may be granted to any employee during any fiscal
year of the Company shall not exceed 500,000 shares of Common Stock, less the
aggregate number of shares of Common Stock with respect to which stock options,
restricted stock awards or stock appreciation rights have been granted to such
person during such fiscal year under all other compensatory plans of the
Company.
The Board of Directors has the authority to amend the 1996 Option Plan at
any time, provided that stockholder approval will be required to increase the
aggregate number of shares of Common Stock as to which 1996 Options may be
granted (except for increases due to certain adjustments), to increase
materially the benefits accruing to participants under the 1996 Option Plan or
to change the class of employees eligible to receive 1996 Options.
The Board of Directors may terminate the 1996 Option Plan at any time. The
1996 Option Plan will terminate on, and 1996 Options may not be granted after,
November 14, 2006, unless terminated by the
11
<PAGE>
Board of Directors prior thereto. The termination of the 1996 Option Plan will
not alter or impair any rights or obligations under any 1996 Options previously
granted under the 1996 Option Plan.
The 1996 Option Plan provides that incentive stock options granted
thereunder will not be transferrable other than by will or by laws of descent
and distribution, and during an optionee's lifetime, 1996 Options will be
exercisable only by an optionee. Non-qualified stock options may be transferable
or non-transferable in the discretion of the Committee under such conditions as
may be established by the Committee or by the Board of Directors.
The market value of the Company's Common Stock as of the close of business
on September 18, 1996, as reflected by the closing price of the Common Stock on
the Nasdaq National Market, was $37.50 per share.
Grants of 1996 Options are at the discretion of the Committee and, thus, the
amount of such grants, if any, are presently not determinable. To date, no 1996
Options have been granted.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of incentive stock options and non-qualified options
are complex. Therefore, the description of tax consequences set forth below is
necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. The tax consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
Incentive stock options granted pursuant to the 1996 Option Plan are
intended to qualify as "Incentive Stock Options" within the meaning of Section
422 of the Code. If an optionee makes no disposition of the shares acquired
pursuant to exercise of an incentive stock option within one year after the
transfer of shares to such optionee and within two years from grant of the
option, such optionee will realize no taxable income as a result of the grant or
exercise of such option; any gain or loss than is subsequently realized may be
treated as long-term capital gain or loss, as the case may be. Under these
circumstances, the Company will not be entitled to a deduction for federal
income tax purposes with respect to either the issuance of such incentive stock
options or the transfer of shares upon their exercise.
If shares subject to incentive stock options are disposed of prior to the
expiration of the above time periods, the optionee will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the market value of the
shares on the date of exercise over the option price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible by the
Company for federal income tax purposes in the same year, provided that the
Company satisfies certain federal income tax reporting requirements. In
addition, the excess, if any, of the amount realized on a disqualifying
disposition over the market value of the shares on the date of exercise will be
treated as capital gain.
Non-qualified options may also be granted under the 1996 Option Plan. An
optionee who exercises a non-qualified option will recognize as taxable ordinary
income, at the time of exercise, an amount equal to the excess of the fair
market value of the shares on the date of exercise over the exercise price. Such
amount will ordinarily be deductible by the Company in the same year, provided
that the Company satisfies certain federal income tax withholding requirements
that may be applicable.
The discussion above pertaining to a deduction for the Company is qualified
by the application of Section 162(m). Pursuant to Section 162(m), the maximum
allowable deduction for compensation paid or accrued by the Company with respect
to the chief executive officer of the Company or any of the four most highly
compensated officers of the Company (other than the chief executive officer) is
limited to $1 million per year. However, compensation is tax deductible without
regard to such limitations if the compensation satisfies the "performance-based"
requirements of the rules and regulations under Section 162(m). The
12
<PAGE>
1996 Option Plan is intended to meet the requirements of Section 162(m), and, if
stockholder approval is obtained, the Company expects that deductions will not
be limited thereby.
VOTE REQUIRED FOR APPROVAL
The 1996 Option Plan will be submitted to stockholders for their approval at
the Annual Meeting. The proposal to adopt the 1996 Option Plan must be approved
by the holders of a majority of the shares of Common Stock present or
represented and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE THE 1996
OPTION PLAN.
3. APPROVAL OF THE 1997 EMPLOYEE STOCK PURCHASE PLAN
On August 15, 1996, the Board of Directors of the Company adopted, subject
to stockholder approval, The BISYS Group, Inc. 1997 Employee Stock Purchase Plan
(the "1997 Plan"). Under the 1997 Plan, which is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Code, options to
purchase shares of Common Stock (hereinafter, "Employee Options") will be
granted to eligible employees of the Company. The Board of Directors believes
that the grant of Employee Options is an important incentive for attracting,
retaining and motivating employees through the opportunity of equity
participation. The 1997 Plan is intended to serve this function.
An aggregate of 150,000 shares of Common Stock have been reserved for
issuance upon the exercise of Employee Options granted under the 1997 Plan,
subject to stockholder approval of the 1997 Plan. If approved by stockholders,
the 1997 Plan will become effective on January 1, 1997. The 1997 Plan will
terminate on December 31, 1997, unless it is terminated by the Board of
Directors prior thereto. The approximately 1,550 employees who are regularly
scheduled to work for the Company at least 20 hours per week and who shall have
completed six months of employment as of January 1, 1997 for the Company will be
eligible to receive Employee Options. The maximum number of shares that may be
purchased by any participant under the 1997 Plan will be equal to the lesser of
10% of his base pay or $9,000, divided by 85% of the fair market value of the
Company's Common Stock on January 1, 1997 based upon the closing price of the
Common Stock on the Nasdaq National Market on December 31, 1996. No employee
shall be granted an Employee Option if (i) immediately after such grant such
employee would own stock possessing 5% or more (including stock subject to
outstanding options) of the total combined voting power or value of all classes
of stock of any of the Company, a subsidiary or parent of the Company, or (ii)
if the exercise of such Employee Option would result in the employee acquiring a
cumulative total of more than 500 shares of Common Stock under the 1997 Plan.
A copy of the 1997 Plan is attached to this Proxy Statement as Exhibit B.
The principal features of the 1997 Plan are summarized below.
The 1997 Plan shall be administered by a committee of the Board of
Directors. The committee's authority to administer the 1997 Plan includes the
authority (i) to interpret the 1997 Plan and decide any matters arising
thereunder and (ii) to adopt such rules and regulations, not inconsistent with
the provisions of the 1997 Plan, as it may deem advisable to carry out the
purpose of the 1997 Plan.
Under the 1997 Plan, the exercise price of an Employee Option will be the
lesser of (a) 85% of the fair market value of the shares of Common Stock subject
to the Employee Option on January 1, 1997 based upon the closing price of the
Common Stock on the Nasdaq National Market on December 31, 1996 or (b) 85% of
the fair market value of the shares of Common Stock subject to the Employee
Option on December 31, 1997 based upon the closing price of the Common Stock on
the Nasdaq National Market on December 31, 1997.
13
<PAGE>
Members of the committee may vote on any matter affecting the administration
of, or the granting of Employee Options under, the 1997 Plan. All expenses and
liabilities incurred by the Board of Directors or the committee in administering
the 1997 Plan are to be borne by the Company.
The 1997 Plan provides that Employee Options are not transferable other than
by will or by the laws of descent and distribution, and during an optionee's
lifetime an Employee Option is exercisable only by an optionee.
In the event that after the adoption of the 1997 Plan the outstanding shares
of the Company's Common Stock are increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation through reorganization, merger or
consolidation, recapitalization, stock split, split-up, combination or exchange
of shares or declaration of any dividends payable in Common Stock, the number of
shares of Common Stock (and the price per share) subject to the unexercised
portion of any outstanding Employee Option and the number of shares for which
Employee Options may be granted under the 1997 Plan will be appropriately
adjusted (to the nearest possible full share) by the Board of Directors, and
such adjustment shall be effective and binding for all purposes.
The market value of the Common Stock as of the close of business on
September 18, 1996, as reflected by the closing price of the Common Stock on the
Nasdaq National Market, was $37.50 per share.
The decision whether to participate in the 1997 Plan, and the extent of such
participation, is in the discretion of each eligible employee and, thus, the
amount of Employee Options to be granted is presently not determinable. To date,
no Employee Options have been granted.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of the Employee Options issuable under the 1997 Plan
are complex. Therefore, the description of tax consequences set forth below is
necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. The tax consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
Employee Options granted pursuant to the 1997 Plan are intended to qualify
as options issued under an "employee stock purchase plan" within the meaning of
Section 423 of the Code. If an optionee makes no disposition of the shares
acquired pursuant to exercise of an Employee Option within one year after the
transfer of shares to such optionee and within two years from grant of the
option, then, (i) such optionee will realize no taxable income as a result of
the grant or exercise of such Employee Option, and (ii) on the subsequent
disposition of the shares received upon exercise of the Employee Option or the
death of the optionee, the optionee generally will realize ordinary compensation
income equal to the lesser of (a) the excess of the fair market value of the
shares at the time of such disposition or death over the exercise price, or (b)
15% of the fair market value of the shares at the time the Employee Option was
granted. In the case of such a disposition, the optionee's basis in the shares
will be increased by the amount of ordinary compensation so realized, with the
result that the optionee generally will realize long-term capital gain or loss
equal to the difference, if any, between the proceeds realized from the
disposition over the sum of (x) the exercise price and (y) the amount of
ordinary compensation income realized. Under these circumstances, the Company
will not be entitled to a deduction for federal income tax purposes with respect
to either the issuance of the Employee Options, the transfer of shares upon
their exercise or the disposition of those shares.
If shares subject to an Employee Option are disposed of prior to the
expiration of the above time periods, the optionee will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the fair market value of
the shares on the date of exercise over the exercise price, or (ii) the gain
recognized on such disposition. Such
14
<PAGE>
amount will ordinarily be deductible by the Company for federal income tax
purposes in the same year, provided that the Company satisfies certain federal
income tax withholding requirements. In addition, the excess, if any, of the
amount realized on a disqualifying disposition over the fair market value of the
shares on the date of exercise generally will be treated as short-term capital
gain.
VOTE REQUIRED FOR APPROVAL
The 1997 Plan will be submitted to stockholders for their approval at the
Annual Meeting. The proposal to adopt the 1997 Plan must be approved by the
holders of a majority of the shares of Common Stock present or represented and
entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE THE 1997
PLAN.
4. AMENDMENT OF 1995 STOCK OPTION PLAN
At the Annual Meeting, stockholders will be asked to approve amendments to
the Company's 1995 Stock Option Plan ("1995 Option Plan"). The amendments,
described below, are all intended to qualify awards under the 1995 Option Plan
as "performance-based" compensation under Section 162(m). The Board of Directors
approved the amendments on August 15, 1996.
The amendments and the 1995 Option Plan are summarized below. A copy of the
1995 Option Plan is available upon a stockholder's written request to the
Company, 150 Clove Road, Little Falls, New Jersey 07424, Attention: Secretary.
DESCRIPTION OF THE AMENDMENTS
The amendments provide that the maximum number of shares of Common Stock for
which stock options to purchase shares of Common Stock under the 1995 Option
Plan ("1995 Options") may be granted to any employee during any fiscal year of
the Company shall not exceed 500,000 shares of Common Stock, less the aggregate
number of shares of Common Stock with respect to which stock options, restricted
stock awards or stock appreciation rights have been granted to such person
during such fiscal year under all other compensatory plans of the Company.
The amendments further provide that the committee of the Board of Directors
administering the 1995 Option Plan shall consist of two or more members of the
Board of Directors, each of whom shall be both "Non-Employee Directors" within
the meaning of Rule 16b-3 and "Outside Directors" as defined for purposes of
Section 162(m).
REASONS FOR THE AMENDMENTS
Section 162(m) limits an employer's tax deductions for an executive's
compensation in excess of $1 million under certain circumstances. However,
compensation is tax deductible without regard to the dollar limitations imposed
by Section 162(m) if the compensation satisfies the "performance-based"
requirements of the rules and regulations under Section 162(m). Compensation
attributable to a stock option or stock appreciation right is deemed to satisfy
such "performance-based" requirements if the plan under which the option or
right is granted states the maximum number of shares with respect to which
options or rights may be granted during a specified period to any employee, and,
under the terms of the option or right, the amount of compensation the employee
could receive is based solely on an increase in the value of the stock after the
date of the grant. In addition, rules and regulations under Section 162(m)
require that to meet said "performance-based" requirements a stock option plan
must be administered by, and stock options thereunder must be granted by, a
committee consisting of at least two such "Outside Directors". The amendments
are intended to qualify awards made under the 1995 Option Plan as
tax-deductible, performance-based compensation under Section 162(m).
15
<PAGE>
DESCRIPTION OF THE 1995 OPTION PLAN
The 1995 Option Plan was adopted by the Board of Directors on September 12,
1995 and approved by stockholders at the 1995 Annual Meeting. The 1995 Option
Plan provides for the granting of "non-qualified stock options" and "incentive
stock options" to acquire Common Stock to employees. An aggregate of 1,000,000
shares of Common Stock have been reserved for issuance of stock options under
the 1995 Option Plan. In the event that any outstanding 1995 Options expire or
are terminated, the shares allocable to such expired or terminated 1995 Options
shall again become available for the granting of 1995 Options. If any shares of
Common Stock acquired pursuant to the exercise of 1995 Options are repurchased
by the Company, such shares shall again become available for the granting of
1995 Options.
The terms and conditions of individual option agreements may vary, subject
to the following guidelines: (i) the option price of incentive stock options may
not be less than market value on the date of grant; the option price of
non-qualified options may be less, equal or more than market value on the date
of grant, (ii) the term of all incentive stock options may not exceed ten years
from the date of grant; the term of all non-qualified stock options may exceed
ten years, and (iii) no options may be granted after November 14, 2005.
The 1995 Option Plan is administered by the Compensation Committee. The
Committee consists of persons who are both "Non-Employee Directors" within the
meaning of Rule 16b-3 and "Outside Directors" as defined for purposes of Section
162(m). The Committee determines (i) which officers and employees of the Company
and its subsidiaries shall be granted 1995 Options under the Plan; (ii) the
number of shares subject to each such 1995 Option; (iii) the amount to be paid
by a grantee upon exercise of a 1995 Option; (iv) the time or times and the
conditions subject to which 1995 Options may be exercised; and (v) the form of
consideration that may be used to pay for shares issued upon exercise of such
1995 Options. The Committee is also responsible for the administration and
interpretation of the 1995 Option Plan.
The Board of Directors has the authority to amend the 1995 Option Plan at
any time, provided that stockholder approval is required to increase the
aggregate number of shares of Common Stock as to which 1995 Options may be
granted (except for increases due to certain adjustments), to increase
materially the benefits accruing to participants under the 1995 Option Plan or
to change the class of employees eligible to receive 1995 Options under the 1995
Option Plan.
The Board of Directors may terminate the 1995 Option Plan at any time. The
1995 Option Plan will terminate on, and 1995 Options may not be granted after,
November 14, 2005, unless terminated by the Board of Directors prior thereto.
The termination of the 1995 Option Plan will not alter or impair any rights or
obligations under any 1995 Option previously granted under the 1995 Option Plan.
The 1995 Option Plan provides that 1995 Options are not transferable other
than by will or by laws of descent and distribution, and during an optionee's
lifetime, a 1995 Option is exercisable only by an optionee.
The market value of the Company's Common Stock as of the close of business
on September 18, 1996, as reflected by the closing price of the Common Stock on
the Nasdaq National Market, was $37.50 per share.
Future grants of 1995 Options are in the discretion of the Committee and,
thus, the amount of such grants, if any, are not presently determinable. No
grants of 1995 Options were made during fiscal 1996.
16
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of stock options under the 1995 Option Plan, as
proposed to be amended, are the same as the tax consequences of stock options
under the 1996 Option Plan described above under "Approval of 1996 Stock Option
Plan--Federal Income Tax Consequences".
VOTE REQUIRED FOR APPROVAL
The amendments to the 1995 Option Plan will be submitted to stockholders for
their approval at the Annual Meeting. The proposal to adopt the amendments to
the 1995 Option Plan must be approved by the holders of a majority of the shares
of Common Stock present or represented and entitled to vote at the Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE THE
AMENDMENTS TO THE 1995 OPTION PLAN.
5. AMENDMENT OF 1989 AMENDED AND RESTATED STOCK OPTION AND RESTRICTED
STOCK PURCHASE PLAN
At the Annual Meeting, stockholders will be asked to approve amendments to
the Company's 1989 Amended and Restated Stock Option and Restricted Stock
Purchase Plan (the "Stock Plan"). The amendments, described below, are all
intended to qualify awards under the Stock Plan as "performance-based"
compensation under Section 162(m). The Board of Directors approved the
amendments on August 15, 1996.
The amendments and the Stock Plan are summarized below. A copy of the Stock
Plan is available upon a stockholder's written request to the Company, 150 Clove
Road, Little Falls, New Jersey 07424, Attention: Secretary.
DESCRIPTION OF THE AMENDMENTS
The amendments provide that the maximum number of shares of Common Stock for
which stock options or restricted stock awards to purchase shares of Common
Stock under the Stock Plan may be granted to any director, officer or employee
during any fiscal year of the Company shall not exceed 500,000 shares of Common
Stock, less the aggregate number of shares of Common Stock with respect to which
stock options, restricted stock awards or stock appreciation rights have been
granted to such person during such fiscal year under all other compensatory
plans of the Company.
The amendments further provide that the committee of the Board of Directors
administering the Stock Plan shall consist of two or more members of the Board
of Directors, each of whom shall be both "Non-Employee Directors" within the
meaning of Rule 16b-3 and "Outside Directors" as defined for purposes of Section
162(m).
REASONS FOR THE AMENDMENTS
Section 162(m) limits an employer's tax deductions for an executive's
compensation in excess of $1 million under certain circumstances. However,
compensation is tax deductible without regard to the limitations imposed by
Section 162(m) if the compensation satisfies the "performance-based"
requirements of the rules and regulations under Section 162(m). Compensation
attributable to a stock option or stock appreciation right is deemed to satisfy
such "performance-based" requirements if the plan under which the option or
right is granted states the maximum number of shares with respect to which
options or rights may be granted during a specified period to any employee, and,
under the terms of the option or right, the amount of compensation such employee
could receive is based solely on an increase in the value of the stock after the
date of the grant. In addition, rules and regulations under Section 162(m)
require that to meet said "performance-based" requirements a stock option plan
must be administered by, and
17
<PAGE>
stock options thereunder must be granted by, a committee of at least two such
"Outside Directors". The amendments are intended to qualify awards made under
the Stock Plan as tax-deductible, performance-based compensation under the
provisions of Section 162(m).
DESCRIPTION OF THE STOCK PLAN
The Stock Plan was originally approved in September 1989. The Stock Plan
provides an opportunity for employees, officers and directors of the Company to
purchase Common Stock. Originally, the Company reserved 3,297,500 shares of
Common Stock for issuance upon the exercise of stock options and rights to
purchase Common Stock under the Stock Plan. Pursuant to a series of amendments
to the Stock Plan in 1992, 1993, 1994 and 1995, all of which were approved by
the stockholders, the Company has reserved 4,847,500 shares for issuance. In the
event that any outstanding stock options or restricted stock awards expire or
are terminated for any reason, the shares allocable to such expired or
terminated stock options or restricted stock awards shall again become available
for the granting of stock options or restricted stock awards under the Stock
Plan. If any shares of Common Stock acquired pursuant to restricted stock awards
or the exercise of stock options are repurchased by the Company, such shares
shall again become available for the granting of stock options or restricted
stock awards under the Stock Plan.
The Stock Plan provides for the granting of "non-qualified stock options"
and "incentive stock options" to acquire Common Stock and/or the granting of
rights to purchase Common Stock on a "restricted stock" basis. The terms and
conditions of individual option agreements may vary, subject to the following
guidelines: (i) the option price of incentive stock options may not be less than
market value on the date of grant; the option price of non-qualified options may
be less than market value on the date of grant, (ii) the term of all incentive
stock options may not exceed ten years from the date of grant; the term of all
non-qualified stock options may exceed ten years, and (iii) no options may be
granted after September 20, 1999.
The Stock Plan is administered by the Committee. The Committee determines
(i) which directors, officers and employees of the Company and its subsidiaries
shall be granted an option or the right (each, an "Award") to purchase Common
Stock under the Stock Plan; (ii) the number of shares subject to each such
Award; (iii) the amount to be paid by a grantee upon exercise of an Award; (iv)
the time or times and the conditions subject to which Awards may be made and
become exercisable; and (v) the form of consideration that may be used to pay
for shares issued upon exercise of such Award. The Committee is also responsible
for other questions involving the administration and interpretation of the Stock
Plan. The Committee determines when Awards granted under the Stock Plan become
exercisable.
The Board of Directors has the authority to amend the Stock Plan at any
time, provided that stockholder approval is required to increase the aggregate
number of shares of Common Stock as to which Awards may be granted (except for
increases due to certain adjustments), to increase materially the benefits
accruing to participants under the Plan or to change the class of employees
eligible to receive Awards under the Stock Plan.
The Board of Directors may terminate the Stock Plan at any time. The Stock
Plan will terminate on, and Awards may not be granted after, September 20, 1999,
unless terminated by the Board of Directors prior thereto. The termination of
the Plan will not alter or impair any rights or obligations under any Award
previously granted under the Plan.
The Stock Plan provides that the incentive stock options and non-qualified
stock options are not transferable other than by will or by laws of descent and
distribution and, during an optionee's lifetime, exercisable only by the
optionee.
As of June 30, 1996, options to purchase a total of 5,096,738 shares of
Common Stock have been granted under the Stock Plan, including 1,242,059 to
current executive officers as a group (Mr. Mangum, 421,691; Mr. Bourke, 295,294;
Mr. McMullan, 220,000; Mr. Jones, 178,677; and Mr. Rybarczyk, 126,397) and
3,854,679 to all other employees. In addition, a total of 331,215 restricted
stock awards were granted to
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certain employees under the Stock Plan at the time of the formation of the
Company, including awards of 203,824 shares to current executive officers as a
group (Mr. Mangum, 109,191; Mr. Bourke, 50,956; Mr. Jones, 29,118; and Mr.
Rybarczyk, 14,559). Of the total options granted, as of June 30, 1996, 809,786
have been cancelled and 1,150,860 have been exercised, leaving a total of
3,136,092 outstanding and 229,425 available for grant. Mr. DeDapper, a current
Director and nominee for election as a Director, previously received an option
to purchase 3,750 shares of Common Stock, which option was subsequently
exercised. No other grants have been made to current non-employee Directors or
non-employee nominees for election as a Director. The market value of the
Company's Common Stock as of the close of business on September 18, 1996, as
reflected by the closing price of the Common Stock on the Nasdaq National
Market, was $37.50 per share. Future grants of Awards are in the discretion of
the Committee and, thus, the amount of such grants, if any, are not presently
determinable.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of stock options under the Stock Plan, as proposed to
be amended, are the same as the tax consequences of stock options under the 1996
Option Plan described above under "Approval of 1996 Stock Option Plan--Federal
Income Tax Consequences".
Restricted stock purchase awards may also be granted pursuant to the Stock
Plan. A recipient of a restricted stock purchase award generally will not
recognize taxable income upon the purchase of shares of restricted stock, unless
he or she makes a timely election under Section 83(b) of the Code. Such a
recipient, however, would recognize ordinary income at the time that such shares
become vested in an amount equal to the excess of the fair market value of the
shares at that time over the purchase price paid for such shares. If, on the
other hand, the recipient makes a timely election under Section 83(b), he or she
would recognize ordinary income equal to the excess of the fair market value of
the shares at the time of purchase (determined without regard to any transfer
restrictions imposed on the shares, the vesting provisions or any restrictions
imposed by the securities laws) over the purchase price paid for such shares. In
either case, the Company should be entitled to a deduction of an amount equal to
the amount of ordinary income recognized by the recipient in the same year that
the recipient recognized such ordinary income, provided that the Company
satisfies certain federal income tax withholding requirements that may be
applicable.
VOTE REQUIRED FOR APPROVAL
The amendments to the Stock Plan will be submitted to stockholders for their
approval at the Annual Meeting. The proposal to adopt the amendments to the
Stock Plan must be approved by the holders of a majority of the shares of Common
Stock present or represented and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE THE
AMENDMENTS TO THE STOCK PLAN.
6. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Coopers & Lybrand L.L.P.,
independent public accountants, as the auditors of the Company for the fiscal
year ending June 30, 1997, subject to the ratification of such appointment by
stockholders at the Annual Meeting. Coopers & Lybrand L.L.P. has audited the
Company's financial statements since the Company's inception in 1989.
If the foregoing appointment of Coopers & Lybrand L.L.P. is not ratified by
stockholders, the Board of Directors will appoint other independent accountants
whose appointment for any period subsequent to the 1997 Annual Meeting of
Stockholders will be subject to the approval of stockholders at that meeting. A
representative of Coopers & Lybrand L.L.P. is expected to be present at the
Annual Meeting and will have an opportunity to make a statement should he so
desire and to respond to appropriate questions.
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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO RATIFY THE
APPOINTMENT OF THE FIRM OF COOPERS & LYBRAND L.L.P.
------------------------
GENERAL
OTHER MATTERS
The Board of Directors does not know of any matters that are to be presented
at the Annual Meeting other than those stated in the Notice of Annual Meeting
and referred to in this Proxy Statement. If any other matters should properly
come before the Meeting, it is intended that the proxies in the accompanying
form will be voted as the persons named therein may determine in their
discretion.
The Company's Annual Report to Stockholders for the year ended June 30, 1996
is being mailed to stockholders together with this Proxy Statement.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form will be borne
by the Company, including expenses in connection with preparing and mailing this
Proxy Statement. In addition to solicitation of proxies by mail, directors,
officers and employees of the Company (who will receive no additional
compensation therefor) and Corporate Investors Communications, Inc. a proxy
solicitor (for an estimated total cost to the Company of $4,000) may solicit the
return of proxies by telephone, telegram or personal interview. Arrangements
have also been made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of stock held of record by such persons, and the Company will reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
Each holder of the Company's Common Stock who does not expect to be present
at the Annual Meeting or who plans to attend but who does not wish to vote in
person is urged to fill in, date and sign the proxy and return it promptly in
the enclosed return envelope.
STOCKHOLDER PROPOSALS
If any stockholder of the Company intends to present a proposal for
consideration at the 1997 Annual Meeting of Stockholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's principal executive offices, 150 Clove Road, Little
Falls, New Jersey 07424, Attention: Secretary, not later than June 9, 1997.
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
JUNE 30, 1996, FILED BY THE COMPANY WITH THE COMMISSION, WILL BE FURNISHED,
WITHOUT EXHIBITS, WITHOUT CHARGE TO ANY PERSON REQUESTING A COPY THEREOF IN
WRITING AND STATING THAT SUCH PERSON IS A BENEFICIAL HOLDER OF SHARES OF COMMON
STOCK OF THE COMPANY ON SEPTEMBER 18, 1996, THE RECORD DATE FOR THE ANNUAL
MEETING OF STOCKHOLDERS. REQUESTS AND INQUIRIES SHOULD BE ADDRESSED TO THE BISYS
GROUP, INC., 150 CLOVE ROAD, LITTLE FALLS, NEW JERSEY 07424, ATTENTION: OFFICE
OF INVESTOR RELATIONS.
By Order of the Board of Directors
Kevin J. Dell
Secretary
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EXHIBIT A
THE BISYS GROUP, INC.
1996 STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of The BISYS Group, Inc. 1996 Stock Option
Plan (the "Plan") is to promote the interests of The BISYS Group, Inc., a
Delaware corporation (the "Company"), and any Subsidiary thereof, and its
stockholders by providing an opportunity to selected employees and officers of
the Company or any Subsidiary thereof as of the date of the adoption of this
Plan or at any time thereafter to purchase Common Stock of the Company. By
encouraging such stock ownership, the Company seeks to attract, retain and
motivate such employees and persons and to encourage such employees and persons
to devote their best efforts to the business and financial success of the
Company. It is intended that this purpose will be effected by the granting of
"non-qualified stock options" and/or "incentive stock options" to acquire the
Common Stock of the Company. Under this Plan, a committee of the Board of
Directors shall have the authority (in its sole discretion) to grant "incentive
stock options" within the meaning of Section 422A(b) of the Code or "non
qualified stock options" as described in Treasury Regulation Section 1.83-7 or
any successor regulation thereto.
Section 2. DEFINITIONS. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.1. "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.
2.2. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.3. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.4. "COMMON STOCK" shall mean the Common Stock, $.02 par value, of the
Company.
2.5. "EMPLOYEE" shall mean (i) with respect to an ISO, any person including
an officer or employee-director of the Company, who, at the time an ISO is
granted to such person hereunder, is employed on a full-time basis by the
Company or any Subsidiary of the Company, and (ii) with respect to a
Non-Qualified Option, any person employed by or performing services for the
Company or any Subsidiary of the Company, including, without limitation,
employee-directors and officers.
2.6. "ISO" shall mean an Option granted under the Plan which constitutes
and shall be treated as an "incentive stock option" as defined in Section
422A(b) of the Code.
2.7. "NON-QUALIFIED OPTION" shall mean an Option granted to a Participant
pursuant to the Plan which is intended to be, and qualifies as, a "non-qualified
stock option" as described in Treasury Regulation Section 1.83-7 and which shall
not constitute nor be treated as an ISO.
2.8. "OPTION" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to this Plan.
2.9. "PARTICIPANT" shall mean any Employee to whom an Option is granted
under this Plan.
2.10. "PARENT OF THE COMPANY" shall have the meaning set forth in Section
425(e) of the Code.
2.11. "SECTION 162(M)" shall mean Section 162(m) of the Code including the
rules and regulations promulgated by the Internal Revenue Service thereunder.
2.12. "SUBSIDIARY OF THE COMPANY" shall have the meaning set forth in
Section 425(f) of the Code.
Section 3. ELIGIBILITY. Options may be granted to any Employee. The
Committee shall have the sole authority to select the persons to whom Options
are to be granted hereunder, and to determine whether a
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person is to be granted a Non-Qualified Option or an ISO or any combination
thereof. No person shall have any right to participate in the Plan. Any person
selected by the Committee for participation during any one period will not by
virtue of such participation have the right to be selected as a Participant for
any other period.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.1. The total number of shares of Common Stock for which Options may be
granted under this Plan shall not exceed in the aggregate one million
(1,000,000) shares of Common Stock.
4.2. The shares of Common Stock that may be subject to Options granted
under this Plan may be either authorized and unissued shares or shares
reacquired at any time and now or hereafter held as treasury stock as the
Committee may determine. In the event that any outstanding Option expires or is
terminated for any reason, the shares allocable to the unexercised portion of
such Option may again be subject to an Option granted under this Plan. If any
shares of Common Stock acquired pursuant to the exercise of an Option shall have
been repurchased by the Company, then such shares shall again become available
for issuance pursuant to the Plan.
4.3. SPECIAL ISO LIMITATIONS.
(a) The aggregate fair market value (determined as of the date an ISO is
granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year (under
all Incentive Stock Option Plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.
(b) No ISO shall be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of Section 425(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and the ISO by its terms is not exercisable more than five
years from the date it is granted.
4.4. Notwithstanding any other provision of the Plan, the provisions of
Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option granted under the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.1. The Plan shall be administered by a committee (the "Committee") which
shall be established by the Board of Directors and shall consist of no less than
two persons. All members of the committee shall be both "Non-Employee Directors"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 and
"Outside Directors" as defined for purposes of Section 162(m). The Committee
shall be appointed from time to time by, and shall serve at the pleasure of, the
Board of Directors.
5.2. The Committee shall have the sole authority and discretion to grant
Options under this Plan and, subject to the limitations set forth in Section 6
hereof, to determine the terms and conditions of all Options, including, without
limitation, (i) selecting the Participants who are to be granted Options
hereunder; (ii) designating whether any Option to be granted hereunder is to be
an ISO or a Non-Qualified Option; (iii) establishing the number of shares of
Common Stock that may be issued under each Option; (iv) determining the time and
the conditions subject to which Options may be exercised in whole or in part;
(v) determining the form of the consideration that may be used to purchase
shares of Common Stock upon exercise of any Option (including the circumstances
under which the Company's issued and outstanding shares of Common Stock may be
used by a Participant to exercise an Option); (vi) imposing restrictions and/or
conditions with respect to shares of Common Stock acquired upon exercise of an
Option; (vii) determining the circumstances under which shares of Common Stock
acquired upon exercise of any Option may be subject to repurchase by the
Company; (viii) determining the circumstances and conditions subject to which
shares acquired upon exercise of an Option may be sold or otherwise
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transferred, including without limitation, the circumstances and conditions
subject to which a proposed sale of shares of Common Stock acquired upon
exercise of an Option may be subject to the Company's right of first refusal (as
well as the terms and conditions of any such right of first refusal); (ix)
establishing a vesting provision for any Option relating to the time (or the
circumstance) when the Option may be exercised by a Participant, including
vesting provisions which may be contingent upon the Company meeting specified
financial goals; (x) accelerating the time when outstanding Options may be
exercised, PROVIDED, HOWEVER, that any ISOs shall be "accelerated" within the
meaning of Section 425(h) of the Code, and (xi) establishing any other terms,
restrictions and/or conditions applicable to any Option not inconsistent with
the provisions of this Plan.
5.3. The Committee shall be authorized to interpret the Plan and may, from
time to time, adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the purpose of
this Plan.
5.4. The interpretation and construction by the Committee of any provision
of the Plan, any Option granted hereunder or any agreement evidencing any such
Option shall be final and conclusive upon all parties.
5.5. Only members of the Committee shall vote on any matter affecting the
administration of the Plan or the granting of Options under the Plan.
5.6. All expenses and liabilities incurred by the Committee in the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. No member of the Board of Directors (or the Committee) shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Option granted hereunder.
5.7. Notwithstanding anything contained herein to the contrary, the maximum
number of shares of Common Stock for which Options may be granted to any
Employee during any fiscal year of the Company shall not exceed 500,000 shares
of Common Stock, less the aggregate number of shares of Common Stock with
respect to which stock options, restricted stock awards or stock appreciation
rights have been granted to such Employee during such fiscal year under all
other compensatory plans of the Company.
Section 6. TERMS AND CONDITIONS OF OPTIONS.
6.1. ISOS. The terms and conditions of each ISO granted under the Plan
shall be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO issued
hereunder shall constitute and shall be treated as an "incentive stock option"
as defined in Section 422A of the Code. The terms and conditions of any ISO
granted hereunder need not be identical to those of any other ISO granted
hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no event
be less than 100% (or 110% in the case of an Employee referred to in Section
4.3(b) hereof) of the fair market value of the shares of Common Stock subject to
the ISO on the date the ISO is granted. For purposes of this Plan, the fair
market value per share of Common Stock as of any day shall mean the average of
the closing prices of sales of shares of Common Stock on all national securities
exchanges on which the Common Stock may at the time be listed or, if there shall
have been no sales on any such day, the average of the highest bid and lowest
asked prices on all such exchanges at the end of such day, or, if on any day the
Common Stock shall not be so listed, the average of the representative bid and
asked prices quoted in the NASDAQ system as of 3:30 p.m., New York time, on such
day, or, if on any day the Common Stock shall not be quoted in the NASDAQ
system, the average of the high and low bid and asked prices on such day in the
over-the-counter
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market as reported by National Quotation Bureau Incorporated, or any similar
successor organization. If at any time the Common Stock is not listed on any
national securities exchange or quoted in the NASDAQ system or the
over-the-counter market, the fair market value of the shares of Common Stock
subject to an Option on the date the ISO is granted shall be the fair market
value thereof determined in good faith by the Board of Directors.
(b) ISOs, by their terms, shall not be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
ISO shall be exercisable only by the Optionee.
(c) The Committee shall fix the term of all ISOs granted pursuant to the
Plan (including the date on which such ISO shall expire and terminate),
PROVIDED, HOWEVER, that such term shall in no event exceed ten years from the
date on which such ISO is granted (or, in the case of an ISO granted to an
Employee referred to in Section 4.3(b) hereof, such term shall in no event
exceed five years from the date on which such ISO is granted). Each ISO shall be
exercisable in such amount or amounts, under such conditions and at such times
or intervals or in such installments as shall be determined by the Committee in
its sole discretion.
(d) In the event that the Company or any Parent or Subsidiary of the Company
is required to withhold any Federal, state or local taxes in respect of any
compensation income realized by the Participant as a result of any
"disqualifying disposition" of any shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. A Participant may use issued and outstanding Common Stock for the
payment of taxes. All matters with respect to the total amount of taxes to be
withheld in respect of any such compensation income shall be determined by the
Committee in its sole discretion.
(e) In the sole discretion of the Committee the terms and conditions of any
ISO may (but need not) include any of the following provisions:
(i) In the event a Participant shall cease to be employed by the Company
or any Parent or Subsidiary of the Company on a full-time basis for any
reason other than as a result of his death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any ISO
held by such Participant at that time may only be exercised within one month
after the date on which the Participant ceased to be so employed, and only
to the extent that the Participant could have otherwise exercised such ISO
as of the date on which he ceased to be so employed.
(ii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within one year after the date on which the
Participant ceased to be so employed, and only to the extent that the
Optionee could have otherwise exercised such ISO as of the date on which he
ceased to be so employed.
(iii) In the event a Participant shall die while in the full-time employ
of the Company or a Parent or Subsidiary of the Company (or within a period
of one month after ceasing to be an Employee for any reason other than such
"disability" or within a period of one year after ceasing to be an Employee
by reason of such "disability"), the unexercised portion of any ISO held by
such Participant at the time of his death may only be exercised within one
year after the date of such Participant's death, and only to the extent that
the Participant could have otherwise exercised such ISO at the time of his
death. In such event, such ISO may be exercised by the executor or
administrator of the Participant's estate or
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by any person or persons who shall have acquired the ISO directly from the
Participant by bequest or inheritance.
6.2. NON-QUALIFIED OPTIONS. The terms and conditions of each Non-Qualified
Option granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written option agreement between the
Company and the Participant in such form as the Committee shall approve. The
terms and conditions of each Option will be such that each Option issued
hereunder shall not constitute nor be treated as an "incentive stock option" as
defined in Section 422A of the Code and will be a "non-qualified stock option"
for federal income tax purposes. The terms and conditions of any Option granted
hereunder need not be identical to those of any other Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
(a) The option (exercise) price shall be fixed by the Committee and may be
equal to, more than or less than 100% of the fair market value of the shares of
Common Stock subject to the Non-Qualified Option on the date such Non-Qualified
Option is granted.
(b) The Committee shall fix the term of all Non-Qualified Options granted
pursuant to the Plan (including the date on which such Non-Qualified Option
shall expire and terminate). Such term may be more than ten years from the date
on which such Non-Qualified Option is granted. Each Non-Qualified Option shall
be exercisable in such amount or amounts, under such conditions, and at such
times or intervals or in such installments as shall be determined by the
Committee in its sole discretion.
(c) Non-Qualified Options may be transferable or nontransferable otherwise
than by will or the laws of descent and distribution, in the discretion of the
Committee and under such conditions as the Committee may establish with respect
to any Non-Qualified Options.
(d) In the event that the Company is required to withhold any Federal, state
or local taxes in respect of any compensation income realized by the Participant
in respect of a Non-Qualified Option granted hereunder or in respect of any
shares of Common Stock acquired upon exercise of a Non-Qualified Option, the
Company shall deduct from any payments of any kind otherwise due to such
Participant the aggregate amount of such Federal, state or local taxes required
to be so withheld or, if such payments are insufficient to satisfy such Federal,
state or local taxes, or if no such payments are due or to become due to such
Participant, then, such Participant will be required to pay to the Company, or
make other arrangements satisfactory to the Company regarding payment to the
Company of, the aggregate amount of any such taxes. All matters with respect to
the total amount of taxes to be withheld in respect of any such compensation
income shall be determined by the Committee in its sole discretion.
Section 7. ADJUSTMENTS. (a) In the event that after the adoption of the
Plan by the Board of Directors, the outstanding shares of the Company's Common
Stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in Common Stock, the
Board of Directors shall appropriately adjust (i) the number of shares of Common
Stock (and the option price per share) subject to the unexercised portion of any
outstanding Option (to the nearest possible full share), PROVIDED, HOWEVER, that
the limitations of Section 425 of the Code shall apply with respect to
adjustments made to ISOs and (ii) the number of shares of Common Stock for which
Options may be granted under this Plan, as set forth in Section 4.1 hereof, and
such adjustments shall be effective and binding for all purposes of this Plan.
(b) Notwithstanding the foregoing, in the event of (i) any offer to holders
of the Company's Common Stock generally relating to the acquisition of their
shares, including, without limitation, through purchase, merger or otherwise, or
(ii) any transaction generally relating to the acquisition of substantially all
of the assets or business of the Company, the Committee may make such adjustment
as it deems equitable in
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respect of outstanding Options including, without limitation, the revision or
cancellation of any outstanding Options. Any such determination by the Committee
shall be effective and binding for all purposes of this Plan.
Section 8. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. Neither this
Plan nor any Option granted hereunder to a Participant shall be construed as
conferring upon such Participant any right to continue in the employ of the
Company or the service of the Company or any Subsidiary as the case may be, or
limit in any respect the right of the Company or any Subsidiary to terminate
such Participant's employment or other relationship with the Company or any
Subsidiary, as the case may be, at any time.
Section 9. AMENDMENT OF THE PLAN. The Board of Directors may amend the
Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that, without
the approval of the holders of a majority of the outstanding stock of the
Company present or represented and entitled to vote thereon at a meeting, the
Board of Directors may not amend the Plan (i) to increase materially the
benefits accruing to participants under the Plan or the rules and regulations
thereunder, (ii) to increase materially (except for increases due to adjustments
in accordance with Section 7 hereof) the aggregate number of shares of Common
Stock for which Options may be granted hereunder or (iii) to modify materially
the requirements as to eligibility for participation in the Plan.
Section 10. TERMINATION OF THE PLAN. The Board of Directors may terminate
the Plan at any time. Unless the Plan shall theretofore have been terminated by
the Board of Directors, the Plan shall terminate ten years after the date of its
initial approval by the stockholders of the Company. No Option may be granted
hereunder after termination of the Plan. The termination or amendment of the
Plan shall not alter or impair any rights or obligations under any Option
theretofore granted under the Plan.
Section 11. EFFECTIVE DATE OF THE PLAN. This Plan shall be effective as of
November 14, 1996, the date on which the Plan was approved by the vote of the
holders of a majority of the shares of Common Stock present or represented and
entitled to vote at the 1996 Annual Meeting of the Stockholders held on November
14, 1996.
* * * * *
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EXHIBIT B
THE BISYS GROUP, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of The BISYS Group, Inc. 1997 Employee
Stock Purchase Plan (the "Plan") is to promote the interests of The BISYS Group,
Inc., a Delaware corporation (the "Company") and any Subsidiary thereof (as
hereinafter defined), and its stockholders by providing an opportunity to
certain current employees of the Company or any Subsidiary thereof to purchase
Common Stock of the Company. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate such employees and to encourage such
employees to devote their best efforts to the business and financial success of
the Company. It is intended that the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423.
Section 2. DEFINITIONS. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.01. "BASE PAY" shall be determined as of October 1, 1996 by multiplying
the normal biweekly rate of a salaried Employee by 26 or the hourly rate of an
hourly Employee by 2,080; PROVIDED, THAT, in the case of a part-time hourly
Employee, the Employee's Base Pay shall be determined by multiplying such
Employee's hourly rate by the number of regularly scheduled hours of work for
such Employee during the one-year period beginning on October 1, 1996. The
calculation of Base Pay shall be made without regard to payments for overtime,
shift premium, bonuses and other special payments, commissions and other
marketing incentive payments.
2.02. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
2.03. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.04. "COMMON STOCK" shall mean the Common Stock, $.02 par value, of the
Company.
2.05. "EMPLOYEE" shall mean any person, including an officer or director of
the Company or a Subsidiary of the Company, who is customarily employed on a
full-time or part-time basis by the Company or a Subsidiary of the Company and
is regularly scheduled to work at least 20 hours per week.
2.06. "OFFERING" shall have the meaning described in Section 4.01.
2.07. "OPTION" shall mean any option to purchase Common Stock granted to an
Employee pursuant to this Plan.
2.08. "PARTICIPANT" shall mean any Employee that is eligible to participate
in the Plan and who elects to participate in the Plan.
2.09. "PARENT OF THE COMPANY" shall have the meaning set forth in Section
424(e) of the Code.
2.10. "SUBSIDIARY OF THE COMPANY" shall have the meaning set forth in
Section 424(f) of the Code.
Section 3. ELIGIBILITY AND PARTICIPATION. The following provisions shall
govern the eligibility of Employees to participate in the Plan.
3.01. INITIAL ELIGIBILITY. Any Employee who shall have completed six (6)
months of employment as of January 1, 1997 shall be eligible to participate in
the Offering.
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3.02. RESTRICTIONS ON PARTICIPATION. Notwithstanding any provisions of the
Plan to the contrary, no Employee shall be granted an Option under the Plan
(1) if, immediately after such grant, such Employee would own stock
possessing 5% or more of the total combined voting power or value of all
classes of stock of any of the Company, a Subsidiary of the Company or the
Parent of the Company, such ownership to be determined by applying the rules
of Section 424(d) of the Code and treating stock which the Employee may
purchase under outstanding options as stock owned by the Employee; or
(2) which would permit his rights to purchase stock under the Plan (and
under any other plans of the Company qualifying under Section 423 of the
Code) to accrue at a rate which exceeds the lesser of (i) $9,000 or (ii) 10%
of the Employee's Base Pay of fair market value of the stock (determined at
the time such Option is granted) for each calendar year in which such Option
is outstanding; or
(3) if the exercise of such Option would result in the Employee
acquiring a cumulative total of more than 500 shares of Common Stock under
the Plan.
3.03. COMMENCEMENT OF PARTICIPATION. An eligible Employee may become a
Participant in the Plan by completing an authorization for a payroll deduction
on the form provided by the Company and filing it with the office of the Vice
President of Human Resources of the Company on or before the date set therefor
by the Committee which date shall be prior to January 1, 1997. Payroll
deductions shall be made from a Participant's 1997 Base Pay and shall commence
on the first regularly scheduled payday after January 1, 1997 and shall
terminate on the last regularly scheduled payday on or before December 31, 1997,
unless sooner terminated by the Participant pursuant to Section 9.01.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.01. NUMBER OF SHARES. The total number of shares of Common Stock for
which Options may be granted under this Plan shall not exceed in the aggregate
one hundred fifty thousand (150,000) shares of Common Stock. The Plan will be
implemented by an Offering of shares of Common Stock (the "Offering"). The
Offering shall begin on January 1, 1997 and shall terminate on December 31,
1997.
4.02. REISSUANCE. The shares of Common Stock that may be subject to
Options granted under this Plan may be either authorized and unissued shares or
shares reacquired at any time and now or hereafter held as treasury stock as the
Committee may determine. In the event that any outstanding Option expires or is
terminated for any reason, the shares allocable to the unexercised portion of
such Option may again be subject to an Option granted under this Plan. If any
shares of Common Stock acquired pursuant to the exercise of an Option shall have
been repurchased by the Company, then such shares shall again become available
for issuance pursuant to the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.01. COMMITTEE. The Plan shall be administered by a committee (the
"Committee") which shall be established by the Board of Directors and shall
consist of no less than two persons. All members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934. The Committee shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors.
5.02. INTERPRETATION. The Committee shall be authorized (i) to interpret
the Plan and decide any matters arising thereunder and (ii) to adopt such rules
and regulations, not inconsistent with the provisions of the Plan, as it may
deem advisable to carry out the purpose of this Plan.
5.03. FINALITY. The interpretation and construction by the Committee of
any provision of the Plan, any Option granted hereunder or any agreement
evidencing any such Option shall be final and conclusive upon all parties.
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5.04. VOTING BY COMMITTEE MEMBERS. Only members of the Committee shall
vote on any matter affecting the administration of the Plan or the granting of
Options under the Plan.
5.05. EXPENSES, ETC. All expenses and liabilities incurred by the Board of
Directors or the Committee in the administration of the Plan shall be borne by
the Company. The Committee may employ attorneys, consultants, accountants or
other persons in connection with the administration of the Plan. The Company,
and its officers and directors, shall be entitled to rely upon the advice,
opinions or valuations of any such persons. No member of the Board of Directors
or the Committee shall be liable for any action, determination or interpretation
taken or made in good faith with respect to the Plan or any Option granted
hereunder.
Section 6. PAYROLL DEDUCTIONS.
6.01. AMOUNT OF DEDUCTION. At the time a Participant files his
authorization for payroll deduction pursuant to Section 3.03, he shall elect to
have deductions made from his pay on each payday during the time he is a
Participant in the Offering at the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10% of
his Base Pay, as determined as of October 1, 1996.
6.02. PARTICIPANT'S ACCOUNT; NO INTEREST. All payroll deductions made for
a Participant shall be credited to his account under the Plan. A Participant may
not make any separate cash payment into such account. No interest shall accrue
on amounts credited to a Participant's account under the Plan, regardless of
whether or not the funds in such account are ultimately used to acquire shares
of Common Stock.
6.03. CHANGES IN PAYROLL DEDUCTIONS. A Participant may discontinue his
participation in the Plan pursuant to Section 9.01, but no other change can be
made during the Offering and, specifically, a Participant may not alter the
amount of his payroll deductions for the Offering.
6.04. USE OF FUNDS. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
Section 7. GRANT OF OPTION.
7.01. TERMS AND CONDITIONS. A description of the terms and conditions of
this Plan shall be made available to the Participants in such form and manner as
the Committee shall approve. Such description shall be consistent with this Plan
and with the treatment of Options as being issued under an "employee stock
purchase plan" under Section 423 of the Code.
7.02. NUMBER OF OPTION SHARES; PRO RATA ALLOCATION.
(a) On January 1, 1997, each Participant shall be deemed to have been
granted an Option, subject to the limitations of Section 3.02, to purchase a
maximum number of shares of Common Stock equal to the number obtained by
multiplying (i) the percentage of the Employee's Base Pay which he has elected
to have withheld pursuant to Section 6.01 by (ii) the Employee's Base Pay and
dividing the resulting product by (iii) 85% of the fair market value of a share
of Common Stock of the Company on January 1, 1997 based upon the closing price
of the Common Stock on the Nasdaq National Market on December 31, 1996;
PROVIDED, HOWEVER, that in no event shall the total number of shares of Common
Stock for which Options are granted exceed 150,000 shares.
(b) If the total number of shares of Common Stock for which Options would
have been granted pursuant to Section 7.02(a) would have exceeded 150,000 shares
(absent the proviso to that section), the Company shall make a pro rata
allocation of the Options available for grant in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable.
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7.03. OPTION PRICE. The Option price of shares of Common Stock subject to
an Option shall be the lower of:
(a) 85% of the fair market value of the shares of Common Stock subject
to the Option on January 1, 1997 based upon the closing price of the Common
Stock on the Nasdaq National Market on December 31, 1996; or
(b) 85% of the fair market value of the shares of Common Stock subject
to the Option on December 31, 1997 based upon the closing price of the
Common Stock on the Nasdaq National Market on December 31, 1997.
7.04. FAIR MARKET VALUE. For purposes of this Plan, the fair market value
per share of Common Stock as of any day shall mean the average of the closing
prices of sales of shares of Common Stock on all national securities exchanges
on which the Common Stock may at the time be listed or, if there shall have been
no sales on any such day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day the Common Stock
shall not be so listed, the average of the representative bid and asked prices
quoted in the Nasdaq system as of 3:30 p.m., New York time, on such day, or, if
on any day the Common Stock shall not be quoted in the Nasdaq system, the
average of the high and low bid and asked prices on such day in the
over-the-counter market as reported by National Quotation Bureau Incorporated,
or any similar successor organization. If at any time the Common Stock is not
listed on any national securities exchange or quoted in the Nasdaq system or the
over the-counter market, the fair market value of the shares of Common Stock
subject to an Option on the date the Option is granted shall be the fair market
value thereof determined in good faith by the Board of Directors.
7.05. INTEREST IN OPTION STOCK. A Participant shall have no interest in
shares of Common Stock covered by his Option until such Option has been
exercised.
7.06. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor Options shall be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
Option shall be exercisable only by the Optionee.
7.07 TAX WITHHOLDING. In the event that the Company or any Parent or
Subsidiary of the Company is required to withhold any Federal, state or local
taxes in respect of any compensation income realized by the Participant as a
result of any "disqualifying disposition" of any shares of Common Stock acquired
upon exercise of an Option granted hereunder, the Company shall be entitled to
deduct from any payments of any kind otherwise due to such Participant the
aggregate amount of such Federal, state or local taxes required to be so
withheld or, if such payments are insufficient to satisfy such Federal, state or
local taxes, such Participant will be required to pay to the Company, or make
other arrangements satisfactory to the Company regarding payment to the Company
of, the aggregate amount of any such taxes. All matters with respect to the
total amount of taxes to be withheld in respect of any such compensation income
shall be determined by the Committee in its sole discretion.
Section 8. EXERCISE OF OPTIONS.
8.01. AUTOMATIC EXERCISE. Unless a Participant gives written notice to the
Company of withdrawal pursuant to Section 9.01, his Option to acquire Common
Stock with payroll deductions made during any Offering will be deemed to have
been exercised automatically on December 31, 1997 for the purchase of the number
of full shares of Common Stock which the accumulated payroll deductions in his
account at that time will purchase at the applicable Option price (but not in
excess of the number of shares of Common Stock for which Options have been
granted to the Employee pursuant to Section 7.02), and any excess in his account
at that time will be returned to him.
8.02. FRACTIONAL SHARES. Fractional shares will not be issued under the
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be returned to any Employee promptly following
the termination of the Offering.
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8.03. DELIVERY OF STOCK. As promptly as practicable after December 31,
1997, the Company will deliver to each Participant, in such Participant's name,
the shares of Common Stock purchased upon exercise of such Participant's Option.
Section 9. WITHDRAWAL.
9.01. IN GENERAL. A Participant may withdraw payroll deductions credited
to his account under the Plan at any time by giving written notice to the Vice
President of Human Resources of the Company. All of the Participant's payroll
deductions credited to his account will be paid to him within 30 days after
receipt of his notice of withdrawal, and no further payroll deductions will be
made from his pay; PROVIDED, THAT, the Participant gives notice of withdrawal
sufficiently prior to the next scheduled payroll deduction.
9.02. CESSATION OF EMPLOYEE STATUS. In the event a Participant shall cease
to be an Employee, as defined in Section 2.05, for any reason, other than as a
result of his death, the payroll deductions credited to his account will be
returned to him.
9.03. TERMINATION DUE TO DEATH. In the event a Participant shall cease to
be an Employee, as defined in Section 2.05, by reason of his death, his legal
representative shall have the right to elect, by written notice given to the
Vice President of Human Resources of the Company prior to December 31, 1997
either:
(a) to withdraw all of the payroll deductions credited to the Participant's
account under the Plan, or
(b) to exercise the Participant's Option granted under Section 7.02 for the
purchase of shares of Common Stock on December 31, 1997 for the purchase of the
number of full shares of Common Stock which the accumulated payroll deductions
in the Participant's account will purchase at the applicable Option price, and
any excess in such account will be returned to the Participant's legal
representative.
In the event that no such written notice of election shall be duly received
by the office of the Vice President of Human Resources of the Company, the
Participant's legal representative shall automatically be deemed to have
elected, pursuant to paragraph (b), to exercise the Participant's Option.
Section 10. ADJUSTMENTS.
(a) In the event that after the adoption of the Plan by the Board of
Directors, the outstanding shares of the Company's Common Stock shall be
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another
corporation through reorganization, merger or consolidation, recapitalization,
reclassification, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in Common Stock, the Board of Directors
shall appropriately adjust (i) the number of shares of Common Stock (and the
Option price per share) subject to the unexercised portion of any outstanding
Option (to the nearest possible full share); PROVIDED, HOWEVER, that the
limitations of Section 424 of the Code shall apply with respect to such
adjustments; (ii) the number of shares of Common Stock for which Options may be
granted under this Plan, as set forth in Section 4.01 hereof, and such
adjustment shall be effective and binding for all purposes of this Plan.
(b) Notwithstanding the foregoing, in the event of (i) any offer to holders
of the Company's Common Stock generally relating to the acquisition of their
shares, including, without limitation, through purchase, merger or otherwise, or
(ii) any transaction generally relating to the acquisition of substantially all
of the assets or business of the Company, the Board of Directors may make such
adjustment as it deems equitable in respect of outstanding Options including,
without limitation, the revision or cancellation of any outstanding Options. Any
such determination by the Committee shall be effective and binding for all
purposes of this Plan.
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<PAGE>
Section 11. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP.
Neither this Plan nor any Option granted hereunder to a Participant shall be
construed as conferring upon such Participant any right to continue in the
employ of the Company or any Subsidiary as the case may be, or limit in any
respect the right of the Company or any Subsidiary to terminate such
Participant's employment or other relationship with the Company or any
Subsidiary, as the case may be, at any time.
Section 12. AMENDMENT OF THE PLAN. The Board of Directors may amend the
Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that, without
the approval of the holders of a majority of the outstanding stock of the
Company entitled to vote thereon at a meeting, the Board of Directors may not
amend the Plan (i) to increase materially the benefits accruing to Participants
under the Plan, (ii) to increase materially (except for increases due to
adjustments in accordance with Section 10 hereof) the aggregate number of shares
of Common Stock for which Options may be granted hereunder or (iii) to modify
materially the requirements as to eligibility for participation in the Plan.
Section 13. TERMINATION OF THE PLAN. The Board of Directors may terminate
the Plan at any time. Unless the Plan shall theretofore have been terminated by
the Board of Directors, the Plan shall terminate one year after its effective
date. No Option may be granted hereunder after termination of the Plan. The
termination or amendment of the Plan shall not alter or impair any rights or
obligations under any Option theretofore granted under the Plan.
Section 14. EFFECTIVE DATE OF THE PLAN. This Plan shall be effective as of
January 1, 1997, subject to approval by the holders of the majority of the
Common Stock present and represented at a special or annual meeting of the
shareholders held on or before December 31, 1996. If the Plan is not so
approved, the Plan shall not become effective.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN PROPOSAL NO. 1
AND "FOR" PROPOSALS NO. 2, NO. 3, NO. 4, NO. 5 AND NO. 6.
1. Election of Directors
FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS [X]
listed below [X] for all nominees listed below. [X]
Nominees: Lynn J. Mangum, Paul H. Bourke, Jay W. DeDapper, John J. Lyons, Neil
P. Marcous and Thomas E. McInerney
(INSTRUCTIONS; TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions __________________________________________________________________
2. The proposal to approve the Company's 1996 Stock Option Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
3. The proposal to approve the Company's 1997 Employee Stock Purchase Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
4. The proposal to amend the Company's 1995 Stock Option Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
5. The proposal to amend the Company's 1989 Amended and Restated Stock Option
and Restricted Stock Purchase Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
6. The proposal to ratify the appointment of Coopers & Lybrand L.L.P. as
auditors for the fiscal year ending June 30, 1997.
FOR [X] AGAINST [X] ABSTAIN [X]
7. The proxies are authorized to vote as they may determine in their
discretion upon such other business as may properly come before the
meeting.
CHANGE OF ADDRESS AND OR COMMENTS MARK HERE [X]
Please sign exactly as name appears hereon. When shares are held in name of
joint holders, each should sign. When signing as attorney, executor, trustee,
guardian, etc., please so indicate. If a corporation, please sign in full
corporate name by an authorized officer. If a partnership, please sign in
partnership name by an authorized person.
Date ___________________________________ , 1996
Signature_______________________________________
Signature (if held jointly)_____________________
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [X]
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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THE BISYS GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, NOVEMBER 14, 1996
The undersigned stockholder of THE BISYS GROUP, INC., a Delaware
corporation, hereby appoints Robert J. McMullan and Kevin J. Dell or either of
them, voting singly in the absence of the other, attorneys and proxies, with
full power of substitution and revocation, to vote, as designated below, all
shares of Common Stock of The BISYS Group, Inc., that the undersigned is
entitled to vote at the Annual Meeting of Stockholders of said corporation to
be held at 150 Clove Road, Little Falls, New Jersey 07424 on November 14, 1996,
at 9:00 a.m. (local time) or any adjournment thereof, in accordance with the
instructions on the reverse side.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2, "FOR"
PROPOSAL NO. 3, "FOR" PROPOSAL NO. 4, "FOR" PROPOSAL NO. 5 AND "FOR" PROPOSAL
NO. 6. The proxies are authorized to vote as they may determine in their
discretion upon such other business as may properly come before the meeting.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY USING
THE ENCLOSED ENVELOPE.
THE BISYS GROUP, INC.
P.O. BOX 11357
NEW YORK, N.Y. 10203-0357
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<PAGE>
THE BISYS GROUP, INC.
1995 STOCK OPTION PLAN, AS AMENDED
Section 1. PURPOSE. The purpose of The BISYS Group, Inc. 1995 Stock
Option Plan (the "Plan") is to promote the interests of The BISYS Group, Inc., a
Delaware corporation (the "Company") and any Subsidiary thereof, and its
stockholders by providing an opportunity to selected employees and officers of
the Company or any Subsidiary thereof as of the date of the adoption of this
Plan or at any time thereafter to purchase Common Stock of the Company. By
encouraging such stock ownership, the Company seeks to attract, retain and
motivate such employees and persons and to encourage such employees and persons
to devote their best efforts to the business and financial success of the
Company. It is intended that this purpose will be effected by the granting of
"non-qualified stock options" and/or "incentive stock options" to acquire the
common stock of the Company. Under this Plan, a committee of the Board of
Directors shall have the authority (in its sole discretion) to grant "incentive
stock options" within the meaning of Section 422A(b) of the Code or "non
qualified stock options" as described in Treasury Regulation Section 1.83-7 or
any successor regulation thereto.
Section 2. DEFINITIONS. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.1. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
2.2. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.3. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.4. "COMMON STOCK" shall mean the Common Stock, $.02 par value, of the
Company.
2.5. "EMPLOYEE" shall mean (i) with respect to an ISO, any person
including an officer or employee-director of the Company, who, at the time an
ISO is granted to such person hereunder, is employed on a full-time basis by the
Company or any Subsidiary of the Company, and (ii) with respect to a Non-
Qualified Option, any person employed by or performing services for the Company
or any Subsidiary of the Company, including, without limitation, employee-
directors and officers.
<PAGE>
2.6. "ISO" shall mean an Option granted under the Plan which constitutes
and shall be treated as an "incentive stock option" as defined in
Section 422A(b) of the Code.
2.7. "NON-QUALIFIED OPTION" shall mean an Option granted to a Participant
pursuant to the Plan which is intended to be, and qualifies as, a "non-
qualified stock option" as described in Treasury Regulation Section 1.83-7 and
which shall not constitute nor be treated as an ISO.
2.8. "OPTION" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to this Plan.
2.9. "PARTICIPANT" shall mean any Employee to whom an Option is granted
under this Plan.
2.10. "PARENT OF THE COMPANY" shall have the meaning set forth in
Section 425(e) of the Code.
2.11 "SECTION 162(M)" SHALL MEAN SECTION 162(M) OF THE CODE AND RULES AND
REGULATIONS PROMULGATED BY THE INTERNAL REVENUE SERVICE THEREUNDER.
2.12. "SUBSIDIARY OF THE COMPANY" shall have the meaning set forth in
Section 425(f) of the Code.
Section 3. ELIGIBILITY. Options may be granted to any Employee. The
Committee shall have the sole authority to select the persons to whom Options
are to be granted hereunder, and to determine whether a person is to be granted
a Non-Qualified Option or an ISO or any combination thereof. No person shall
have any right to participate in the Plan. Any person selected by the Committee
for participation during any one period will not by virtue of such participation
have the right to be selected as a Participant for any other period.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.1. The total number of shares of Common Stock for which Options may be
granted under this Plan shall not exceed in the aggregate one million
(1,000,000) shares of Common Stock.
4.2. The shares of Common Stock that may be subject to Options granted
under this Plan may be either authorized and unissued shares or shares
reacquired at any time and now or hereafter held as treasury stock as the
Committee may determine. In the event that any outstanding Option expires or is
terminated for any reason, the shares allocable to the unexercised portion of
such Option may again be subject to an Option granted under this Plan. If any
shares of Common Stock acquired pursuant to the exercise of an Option shall have
been repurchased by the
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<PAGE>
Company, then such shares shall again become available for issuance pursuant to
the Plan.
4.3. SPECIAL ISO LIMITATIONS.
(a) The aggregate fair market value (determined as of the date an ISO is
granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year (under
all Incentive Stock Option Plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.
(b) No ISO shall be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of Section 425(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and the ISO by its terms is not exercisable more than five
years from the date it is granted.
4.4. Notwithstanding any other provision of the Plan, the provisions of
Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option granted under the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.1 The Plan shall be administered by a committee (the "Committee") which
shall be established by the Board of Directors and shall consist of no less than
two persons. All members of the committee shall be BOTH "NON-EMPLOYEE
DIRECTORS" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 AND "OUTSIDE DIRECTORS" AS DEFINED FOR PURPOSES OF SECTION 162(M). The
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors.
5.2. The Committee shall have the sole authority and discretion to grant
Options under this Plan and, subject to the limitations set forth in Section 6
hereof, to determine the terms and conditions of all Options, including, without
limitation, (i) selecting the Participants who are to be granted Options
hereunder; (ii) designating whether any Option to be granted hereunder is to be
an ISO or a Non-Qualified Option; (iii) establishing the number of shares of
Common Stock that may be issued under each Option; (iv) determining the time and
the conditions subject to which Options may be exercised in whole or in part;
(v) determining the form of the consideration that may be used to purchase
shares of Common Stock upon exercise of any Option (including the circumstances
under which the Company's issued and outstanding shares of Common Stock may be
used by a
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<PAGE>
Participant to exercise an Option); (vi) imposing restrictions and/or conditions
with respect to shares of Common Stock acquired upon exercise of an Option;
(vii) determining the circumstances under which shares of Common Stock acquired
upon exercise of any Option may be subject to repurchase by the Company;
(viii) determining the circumstances and conditions subject to which shares
acquired upon exercise of an Option may be sold or otherwise transferred,
including without limitation, the circumstances and conditions subject to which
a proposed sale of shares of Common Stock acquired upon exercise of an Option
may be subject to the Company's right of first refusal (as well as the terms and
conditions of any such right of first refusal); (ix) establishing a vesting
provision for any Option relating to the time (or the circumstance) when the
Option may be exercised by a Participant, including vesting provisions which may
be contingent upon the Company meeting specified financial goals;
(x) accelerating the time when outstanding Options may be exercised, PROVIDED,
HOWEVER, that any ISOs shall be "accelerated" within the meaning of
Section 425(h) of the Code, and (xi) establishing any other terms, restrictions
and/or conditions applicable to any Option not inconsistent with the provisions
of this Plan.
5.3. The Committee shall be authorized to interpret the Plan and may, from
time to time, adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the purpose of
this Plan.
5.4. The interpretation and construction by the Committee of any provision
of the Plan, any Option granted hereunder or any agreement evidencing any such
Option shall be final and conclusive upon all parties.
5.5 Only members of the Committee shall vote on any matter affecting the
administration of the Plan or the granting of Options under the Plan.
5.6. All expenses and liabilities incurred by the Committee in the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. No member of the Board of Directors (or the Committee) shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Option granted hereunder.
5.7 NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE MAXIMUM
NUMBER OF SHARES OF COMMON STOCK FOR WHICH OPTIONS MAY BE GRANTED TO ANY
EMPLOYEE DURING ANY FISCAL YEAR OF THE COMPANY SHALL NOT EXCEED 500,000 SHARES
OF COMMON STOCK, LESS THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK WITH
RESPECT TO
4
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WHICH STOCK OPTIONS, RESTRICTED STOCK AWARDS OR STOCK APPRECIATION RIGHTS HAVE
BEEN GRANTED TO SUCH EMPLOYEE DURING SUCH FISCAL YEAR UNDER ALL OTHER
COMPENSATORY PLANS OF THE COMPANY.
Section 6. TERMS AND CONDITIONS OF OPTIONS.
6.1. ISOS. The terms and conditions of each ISO granted under the Plan
shall be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO
issued hereunder shall constitute and shall be treated as an "incentive stock
option" as defined in Section 422A of the Code. The terms and conditions of any
ISO granted hereunder need not be identical to those of any other ISO granted
hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no event
be less than 100% (or 110% in the case of an Employee referred to in
Section 4.3(b) hereof) of the fair market value of the shares of Common Stock
subject to the ISO on the date the ISO is granted. For purposes of this Plan,
the fair market value per share of Common Stock as of any day shall mean the
average of the closing prices of sales of shares of Common Stock on all national
securities exchanges on which the Common Stock may at the time be listed or, if
there shall have been no sales on any such day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day, or, if on
any day the Common Stock shall not be so listed, the average of the
representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m.,
New York time, on such day, or, if on any day the Common Stock shall not be
quoted in the NASDAQ system, the average of the high and low bid and asked
prices on such day in the over-the-counter market as reported by National
Quotation Bureau Incorporated, or any similar successor organization. If at any
time the Common Stock is not listed on any national securities exchange or
quoted in the NASDAQ system or the over the-counter market, the fair market
value of the shares of Common Stock subject to an Option on the date the ISO is
granted shall be the fair market value thereof determined in good faith by the
Board of Directors.
(b) ISOs, by their terms, shall not be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
ISO shall be exercisable only by the Optionee.
(c) The Committee shall fix the term of all ISOs granted pursuant to the
Plan (including the date on which such ISO shall
5
<PAGE>
expire and terminate), PROVIDED, HOWEVER, that such term shall in no event
exceed ten years from the date on which such ISO is granted (or, in the case of
an ISO granted to an Employee referred to in Section 4.3(b) hereof, such term
shall in no event exceed five years from the date on which such ISO is granted).
Each ISO shall be exercisable in such amount or amounts, under such conditions
and at such times or intervals or in such installments as shall be determined by
the Committee in its sole discretion.
(d) In the event that the Company or any Parent or Subsidiary of the
Company is required to withhold any Federal, state or local taxes in respect of
any compensation income realized by the Participant as a result of any
"disqualifying disposition" of any shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. A Participant may use issued and outstanding Common Stock for the
payment of taxes. All matters with respect to the total amount of taxes to be
withheld in respect of any such compensation income shall be determined by the
Committee in its sole discretion.
(e) In the sole discretion of the Committee the terms and conditions of
any ISO may (but need not) include any of the following provisions:
(i) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis for
any reason other than as a result of his death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
ISO held by such Participant at that time may only be exercised within one
month after the date on which the Participant ceased to be so employed, and
only to the extent that the Participant could have otherwise exercised such
ISO as of the date on which he ceased to be so employed.
(ii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within one year after the date on which the
Participant ceased to be so employed, and only to the extent that the
Optionee could have otherwise
6
<PAGE>
exercised such ISO as of the date on which he ceased to be so employed.
(iii) In the event a Participant shall die while in the full-time employ
of the Company or a Parent or Subsidiary of the Company (or within a period
of one month after ceasing to be an Employee for any reason other than such
"disability" or within a period of one year after ceasing to be an Employee
by reason of such "disability"), the unexercised portion of any ISO held by
such Participant at the time of his death may only be exercised within one
year after the date of such Participant's death, and only to the extent
that the Participant could have otherwise exercised such ISO at the time of
his death. In such event, such ISO may be exercised by the executor or
administrator of the Participant's estate or by any person or persons who
shall have acquired the ISO directly from the Participant by bequest or
inheritance.
6.2. NON-QUALIFIED OPTIONS. The terms and conditions of each Non-
Qualified Option granted under the Plan shall be specified by the Committee, in
its sole discretion, and shall be set forth in a written option agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each Option will be such that each Option
issued hereunder shall not constitute nor be treated as an "incentive stock
option" as defined in Section 422A of the Code and will be a "non-qualified
stock option" for federal income tax purposes. The terms and conditions of any
Option granted hereunder need not be identical to those of any other Option
granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
(a) The option (exercise) price shall be fixed by the Committee and may be
equal to, more than or less than 100% of the fair market value of the shares of
Common Stock subject to the Non-Qualified Option on the date such Non-Qualified
Option is granted.
(b) The Committee shall fix the term of all Non-Qualified Options granted
pursuant to the Plan (including the date on which such Non-Qualified Option
shall expire and terminate). Such term may be more than ten years from the date
on which such Non-Qualified Option is granted. Each Non-Qualified Option shall
be exercisable in such amount or amounts, under such conditions, and at such
times or intervals or in such installments as shall be determined by the
Committee in its sole discretion.
(c) Non-Qualified Options shall not be transferable otherwise than by will
or the laws of descent and distribution,
7
<PAGE>
and during a Participant's lifetime a Non Qualified Option shall be exercisable
only by the Participant.
(d) In the event that the Company is required to withhold any Federal,
state or local taxes in respect of any compensation income realized by the
Participant in respect of a Non-Qualified Option granted hereunder or in respect
of any shares of Common Stock acquired upon exercise of a Non-Qualified Option,
the Company shall deduct from any payments of any kind otherwise due to such
Participant the aggregate amount of such Federal, state or local taxes required
to be so withheld or, if such payments are insufficient to satisfy such Federal,
state or local taxes, or if no such payments are due or to become due to such
Participant, then, such Participant will be required to pay to the Company, or
make other arrangements satisfactory to the Company regarding payment to the
Company of, the aggregate amount of any such taxes. All matters with respect to
the total amount of taxes to be withheld in respect of any such compensation
income shall be determined by the Committee in its sole discretion.
Section 7. ADJUSTMENTS. (a) In the event that after the adoption of the
Plan by the Board of Directors, the outstanding shares of the Company's Common
Stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in Common Stock, the
Board of Directors shall appropriately adjust (i) the number of shares of Common
Stock (and the option price per share) subject to the unexercised portion of any
outstanding Option (to the nearest possible full share), PROVIDED, HOWEVER, that
the limitations of Section 425 of the Code shall apply with respect to
adjustments made to ISOs and (ii) the number of shares of Common Stock for which
Options may be granted under this Plan, as set forth in Section 4.1 hereof, and
such adjustments shall be effective and binding for all purposes of this Plan.
(b) Notwithstanding the foregoing, in the event of (i) any offer to
holders of the Company's Common Stock generally relating to the acquisition of
their shares, including, without limitation, through purchase, merger or
otherwise, or (ii) any transaction generally relating to the acquisition of
substantially all of the assets or business of the Company, the Committee may
make such adjustment as it deems equitable in respect of outstanding Options
including, without limitation, the revision or cancellation of any outstanding
Options. Any such determination by the Committee shall be effective and binding
for all purposes of this Plan.
8
<PAGE>
Section 8. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP.
Neither this Plan nor any Option granted hereunder to a Participant shall
be construed as conferring upon such Participant any right to continue in the
employ of the Company or the service of the Company or any Subsidiary as the
case may be, or limit in any respect the right of the Company or any Subsidiary
to terminate such Participant's employment or other relationship with the
Company or any Subsidiary, as the case may be, at any time.
Section 9. AMENDMENT OF THE PLAN. The Board of Directors may amend the
Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that, without
the approval of the holders of a majority of the outstanding stock of the
Company present or represented and entitled to vote thereon at a meeting, the
Board of Directors may not amend the Plan (i) to increase materially the
benefits accruing to participants under the Plan, (ii) to increase materially
(except for increases due to adjustments in accordance with Section 8 hereof)
the aggregate number of shares of Common Stock for which Options may be granted
hereunder or (iii) to modify materially the requirements as to eligibility for
participation in the Plan.
Section 10. TERMINATION OF THE PLAN. The Board of Directors may terminate
the Plan at any time. Unless the Plan shall theretofore have been terminated by
the Board of Directors, the Plan shall terminate ten years after the date of its
initial approval by the stockholders of the Company. No Option may be granted
hereunder after termination of the Plan. The termination or amendment of the
Plan shall not alter or impair any rights or obligations under any Option
theretofore granted under the Plan.
Section 11. EFFECTIVE DATE OF THE PLAN. This Plan shall be effective as
of November 14, 1995, the date on which the Plan was approved by the vote of the
holders of a majority of the shares of common stock present or represented and
entitled to vote at the 1995 Annual Meeting of the Stockholders held on November
14, 1995.
* * * * *
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<PAGE>
THE BISYS GROUP, INC.
Amended and Restated
STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of The BISYS Group, Inc. Stock Option
and Restricted Stock Purchase Plan (the "Plan") is to promote the interests of
The BISYS Group, Inc., a Delaware corporation (the "Company") and any Subsidiary
thereof, and its stockholders by providing an opportunity to selected employees,
officers and directors of the Company or any Subsidiary thereof as of the date
of the adoption of this Plan or at any time thereafter to purchase Common Stock
of the Company. By encouraging such stock ownership, the Company seeks to
attract, retain and motivate such employees and persons and to encourage such
employees and persons to devote their best efforts to the business and financial
success of the Company. It is intended that this purpose will be effected by
the granting of "non-qualified stock options" and/or "incentive stock options"
to acquire the common stock of the Company and/or by the granting of rights to
purchase the common stock of the Company on a "restricted stock" basis. Under
this Plan, a committee of the Board of Directors shall have the authority (in
its sole discretion) to grant "incentive stock options" within the meaning of
Section 422A(b) of the Code, "non qualified stock options" as described in
Treasury Regulation Section 1.83-7 or any successor regulation thereto, or
"restricted stock" awards.
Section 2. DEFINITIONS. For purpose of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.1. "AWARD" shall mean an award of the right to purchase Common Stock
granted under the provisions of Section 7 of the Plan.
2.2. "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.
2.3. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.4. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.5. "COMMON STOCK" shall mean the Common Stock, $.02 par value, of the
Company.
2.6. "EMPLOYEE" shall mean (i) with respect to an ISO, any person including
an officer or director of the Company, who, at the time an ISO is granted to
such person hereunder, is employed on a full-time basis by the Company or any
Subsidiary of the Company, and (ii) with respect to a Non-Qualified Option
and/or an Award,
<PAGE>
any person employed by or performing services for the Company or any Subsidiary
of the Company, including, without limitation, directors and officers.
2.7. "ISO" shall mean an Option granted under the Plan which constitutes
and shall be treated as an "incentive stock option" as defined in Section
422A(b) of the Code.
2.8. "NON-QUALIFIED OPTION" shall mean an Option granted to a Participant
pursuant to the Plan which is intended to be, and qualifies as, a "non-qualified
stock option" as described in Treasury Regulation Section 1.83-7 and which shall
not constitute nor be treated as an ISO.
2.9. "OPTION" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to this Plan.
2.10. "PARTICIPANT" shall mean any Employee to whom an Award and/or an
Option is granted under this Plan.
2.11. "PARENT OF THE COMPANY" shall have the meaning set forth in
Section 425(e) of the Code.
2.12. "SECTION 162(m)" SHALL MEAN SECTION 162(m) OF THE CODE AND RULES
AND REGULATIONS PROMULGATED BY THE INTERNAL REVENUE SERVICE THEREUNDER.
2.13. "SUBSIDIARY OF THE COMPANY" shall have the meaning set forth in
Section 425(f) of the Code.
Section 3. ELIGIBILITY. Awards and/or Options may be granted to any
Employee. The Committee shall have the sole authority to select the persons to
whom Awards and/or Options are to be granted hereunder, and to determine whether
a person is to be granted a Non-Qualified Option, an ISO or an Award or any
combination thereof. No person shall have any right to participate in the Plan.
Any person selected by the Committee for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period.
Section 4. COMMON STOCK SUBJECT TO THE PLAN. *
4.1. The total number of shares of Common Stock for which Options and/or
Awards may be granted under this Plan shall not exceed in the aggregate FOUR
MILLION EIGHT HUNDRED FORTY-SEVEN THOUSAND FIVE HUNDRED (4,847,500) shares of
Common Stock.
4.2. The shares of Common Stock that may be subject to Options and/or
Awards granted under this Plan may be either authorized and unissued shares or
shares reacquired at any time and
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* Amendments to Section 4.1 set forth on Attachment A.
<PAGE>
now or hereafter held as treasury stock as the Committee may determine. In the
event that any outstanding Option expires or is terminated for any reason, the
shares allocable to the unexercised portion of such Option may again be subject
to an Option and/or Award granted under this Plan. If any shares of Common
Stock acquired pursuant to an Award or the exercise of an Option shall have been
repurchased by the Company, then such shares shall again become available for
issuance pursuant to the Plan.
4.3. SPECIAL ISO LIMITATIONS.
(a) The aggregate fair market value (determined as of the date an ISO
is granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year (under
all Incentive Stock Option Plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.
(b) No ISO shall be granted to an Employee who, at the time the ISO
is granted, owns (actually or constructively under the provisions of Section
425(d) of the Code) stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and the ISO by its terms is not exercisable more than five
years from the date it is granted.
4.4. Notwithstanding any other provision of the Plan, the provisions of
Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option or Award granted under the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.1. The Plan shall be administered by a committee (the "Committee") which
shall be established by the Board of Directors and shall consist of no less than
two persons. All members of the committee shall be BOTH "NON-EMPLOYEE
DIRECTORS" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 AND "OUTSIDE DIRECTORS" AS DEFINED FOR PURPOSES OF SECTION 162(M). The
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors.
5.2. (a) OPTIONS. The Committee shall have the sole authority and
discretion to grant Options under this Plan and, subject to the limitations set
forth in Section 6 hereof, to determine the terms and conditions of all Options,
including, without limitation, (i) selecting the Participants who are to be
granted Options hereunder; (ii) designating whether any Option to be granted
hereunder is to be an ISO or a Non-Qualified Option;
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<PAGE>
(iii) establishing the number of shares of Common Stock that may be issued under
each Option; (iv) determining the time and the conditions subject to which
Options may be exercised in whole or in part; (v) determining the form of the
consideration that may be used to purchase shares of Common Stock upon exercise
of any Option (including the circumstances under which the Company's issued and
outstanding shares of Common Stock may be used by a Participant to exercise an
Option); (vi) imposing restrictions and/or conditions with respect to shares of
Common Stock acquired upon exercise of an Option; (vii) determining the
circumstances under which shares of Common Stock acquired upon exercise of any
Option may be subject to repurchase by the Company; (viii) determining the
circumstances and conditions subject to which shares acquired upon exercise of
an Option may be sold or otherwise transferred, including without limitation,
the circumstances and conditions subject to which a proposed sale of shares of
Common Stock acquired upon exercise of an Option may be subject to the Company's
right of first refusal (as well as the terms and conditions of any such right of
first refusal); (ix) establishing a vesting provision for any Option relating to
the time (or the circumstance) when the Option may be exercised by a
Participant, including vesting provisions which may be contingent upon the
Company meeting specified financial goals; (x) accelerating the time when
outstanding Options may be exercised, PROVIDED, HOWEVER, that any ISOs shall be
"accelerated" within the meaning of Section 425(h) of the Code, and (xi)
establishing any other terms, restrictions and/or conditions applicable to any
Option not inconsistent with the provisions of this Plan.
(b) AWARDS. The Committee shall have the sole authority and
discretion to grant Awards under this Plan and, subject to the limitations set
forth in Section 7 hereof, to determine the terms and conditions of all Awards,
including without limitation, (i) selecting the Participant who are to be
granted Awards hereunder; (ii) determining the amount to be paid by a
Participant to acquire shares of Common Stock pursuant to an Award, which amount
may be equal to, more than, or less than 100% of the fair market value of such
shares on the date the Award is granted (but in no event less than the par value
of such shares); (iii) determining the time or times and the conditions subject
to which Awards may be made; (iv) determining the time or times and the
conditions subject to which the shares of Common Stock subject to an Award are
to become vested and no longer subject to repurchase by the Company; (v)
establishing transfer restrictions and the terms and conditions on which any
such transfer restrictions with respect to an Award shall lapse; (vi)
establishing vesting provisions with respect to any shares of Common Stock
subject to an Award, including vesting provisions which may be contingent upon
the Company meeting specified financial goals; (vii) determining the
circumstances under which shares of Common Stock acquired pursuant to an Award
may be subject to repurchase by the Company; (viii) determining the time or
times and the conditions subject to
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<PAGE>
which any shares of Common Stock subject to an Award may be repurchased by the
Company (as well as the terms and conditions of any such repurchase); (ix)
determining the circumstances and conditions subject to which a proposed sale of
shares of Common Stock subject to an Award may be subject to the Company's right
of first refusal (as well as the terms and conditions of any such right of first
refusal); (x) determining the form of consideration that may be used to purchase
shares of Common Stock pursuant to an Award (including the circumstances under
which the Company's issued and outstanding shares of Common Stock may be used by
a Participant to purchase the Common Stock subject to an Award); (xi)
accelerating the time at which any or all restrictions imposed with respect to
any shares of Common Stock subject to an Award will lapse or otherwise remove
any or all such restrictions; and (xii) establishing any other terms,
restrictions and/or conditions applicable to any Award not inconsistent with the
provisions of this Plan.
5.3. The Committee shall be authorized to interpret the Plan and may, from
time to time, adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the purpose of
this Plan.
5.4. The interpretation and construction by the Committee of any provision
of the Plan, any Option and/or Award granted hereunder or any agreement
evidencing any such Option and/or Award shall be final and conclusive upon all
parties.
5.5. Only members of the Committee shall vote on any matter affecting the
administration of the Plan or the granting of Options and/or Awards under the
Plan.
5.6. All expenses and liabilities incurred by the Committee in the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. No member of the Board of Directors (or the Committee) shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Option and/or Award granted hereunder.
5.7. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK FOR WHICH OPTIONS AND/OR AWARDS MAY BE
GRANTED TO ANY EMPLOYEE DURING ANY FISCAL YEAR OF THE COMPANY SHALL NOT EXCEED
500,000 SHARES OF COMMON STOCK, LESS THE AGGREGATE NUMBER OF SHARES OF COMMON
STOCK WITH RESPECT TO WHICH STOCK OPTIONS, RESTRICTED STOCK AWARDS OR STOCK
APPRECIATION RIGHTS HAVE BEEN GRANTED TO SUCH EMPLOYEE DURING SUCH FISCAL YEAR
UNDER ALL OTHER COMPENSATORY PLANS OF THE COMPANY.
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<PAGE>
Section 6. TERMS AND CONDITIONS OF OPTIONS.
6.1. ISOS. The terms and conditions of each ISO granted under the Plan
shall be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO
issued hereunder shall constitute and shall be treated as an "incentive stock
option" as defined in Section 422A of the Code. The terms and conditions of any
ISO granted hereunder need not be identical to those of any other ISO granted
hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no
event be less than 100% (or 110% in the case of an Employee referred to in
Section 4.3(b) hereof) of the fair market value of the shares of Common Stock
subject to the ISO on the date the ISO is granted. For purposes of this Plan,
the fair market value per share of Common Stock as of any day shall mean the
average of the closing prices of sales of shares of Common Stock on all national
securities exchanges on which the Common Stock may at the time be listed or, if
there shall have been no sales on any such day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day, or, if on
any day the Common Stock shall not be so listed, the average of the
representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m.,
New York time, on such day, or, if on any day the Common Stock shall not be
quoted in the NASDAQ system, the average of the high and low bid and asked
prices on such day in the over-the-counter market as reported by National
Quotation Bureau Incorporated, or any similar successor organization. If at any
time the Common Stock is not listed on any national securities exchange or
quoted in the NASDAQ system or the over the-counter market, the fair market
value of the shares of Common Stock subject to an Option on the date the ISO is
granted shall be the fair market value thereof determined in good faith by the
Board of Directors.
(b) ISOs, by their terms, shall not be transferable otherwise than by
will or the laws of descent and distribution, and, during an Optionee's
lifetime, an ISO shall be exercisable only by the Optionee.
(c) The Committee shall fix the term of all ISOs granted pursuant to
the Plan (including the date on which such ISO shall expire and terminate),
PROVIDED, HOWEVER, that such term shall in no event exceed ten years from the
date on which such ISO is granted (or, in the case of an ISO granted to an
Employee referred to in Section 4.3(b) hereof, such term shall in no event
exceed five years from the date on which such ISO is granted).
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<PAGE>
Each ISO shall be exercisable in such amount or amounts, under such conditions
and at such times or intervals or in such installments as shall be determined by
the Committee in its sole discretion.
(d) In the event that the Company or any Parent or Subsidiary of
the Company is required to withhold any Federal, state or local taxes in
respect of any compensation income realized by the Participant as a result of
any "disqualifying disposition" of any shares of Common Stock acquired upon
exercise of an ISO granted hereunder, the Company shall deduct from any
payments of any kind otherwise due to such Participant the aggregate amount
of such Federal, state or local taxes required to be so withheld or, if such
payments are insufficient to satisfy such Federal, state or local taxes, such
Participant will be required to pay to the Company, or make other
arrangements satisfactory to the Company regarding payment to the Company of,
the aggregate amount of any such taxes. A Participant may use issued and
outstanding Common Stock for the payment of taxes. All matters with respect
to the total amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Committee in its sole
discretion.
(e) In the sole discretion of the Committee the terms and conditions
of any ISO may (but need not) include any of the following provisions:
(i) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis for
any reason other than as a result of his death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
ISO held by such Participant at that time may only be exercised within one
month after the date on which the Participant ceased to be so employed, and
only to the extent that the Participant could have otherwise exercised such
ISO as of the date on which he ceased to be so employed.
(ii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within one year after the date on which the
Participant ceased to be so employed, and only to the extent that the
Optionee could have otherwise exercised such ISO as of the date on which he
ceased to be so employed.
(iii) In the event a Participant shall die while in the full-time
employ of the Company or a Parent or Subsidiary of the Company (or within a
period of one
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<PAGE>
month after ceasing to be an Employee for any reason other than such
"disability" or within a period of one year after ceasing to be an Employee
by reason of such "disability"), the unexercised portion of any ISO held by
such Participant at the time of his death may only be exercised within one
year after the date of such Participant's death, and only to the extent
that the Participant could have otherwise exercised such ISO at the time of
his death. In such event, such ISO may be exercised by the executor or
administrator of the Participant's estate or by any person or persons who
shall have acquired the ISO directly from the Participant by bequest or
inheritance.
6.2. NON-QUALIFIED OPTIONS. The terms and conditions of each Non-Qualified
Option granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written option agreement between the
Company and the Participant in such form as the Committee shall approve. The
terms and conditions of each Option will be such that each Option issued
hereunder shall not constitute nor be treated as an "incentive stock option" as
defined in Section 422A of the Code and will be a "non-qualified stock option"
for federal income tax purposes. The terms and conditions need not be identical
to those of any other Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
(a) The option (exercise) price shall be fixed by the Committee and
may be equal to, more than or less than 100% of the fair market value of the
shares of Common Stock subject to the Non-Qualified Option on the date such Non-
Qualified Option is granted.
(b) The Committee shall fix the term of all Non-Qualified Options
granted pursuant to the Plan (including the date on which such Non-Qualified
Option shall expire and terminate). Such term may be more than ten years from
the date on which such Non-Qualified Option is granted. Each Non-Qualified
Option shall be exercisable in such amount or amounts, under such conditions,
and at such times or intervals or in such installments as shall be determined by
the Committee in its sole discretion.
(c) Non-Qualified Options shall not be transferable otherwise than by
will or the laws of descent and distribution, and during a Participant's
lifetime a Non-Qualified Option shall be exercisable only by the Participant.
(d) In the event that the Company is required to withhold any
Federal, state or local taxes in respect of any
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compensation income realized by the Participant in respect of a Non-Qualified
Option granted hereunder or in respect of any shares of Common Stock acquired
upon exercise of a Non-Qualified Option, the Company shall deduct from any
payments of any kind otherwise due to such Participant the aggregate amount of
such Federal, state or local taxes required to be so withheld or, if such
payments are insufficient to satisfy such Federal, state or local taxes, or if
no such payments are due or to become due to such Participant, then, such
Participant will be required to pay to the Company, or make other arrangements
satisfactory to the Company regarding payment to the Company of, the aggregate
amount of any such taxes. All matters with respect to the total amount of taxes
to be withheld in respect of any such compensation income shall be determined by
the Committee in its sole discretion.
Section 7. TERMS AND CONDITIONS OF AWARDS.
The terms and conditions of each Award granted under the Plan shall be
specified by the Committee, in its sole discretion, and shall be set forth in a
written agreement between the Participant and the Company, in such form as the
Committee shall approve. The terms and provisions of any Award granted
hereunder need not be identical to those of any other Award granted hereunder.
The terms and conditions of each Award shall include the following:
(a) The amount to be paid by a Participant to acquire the shares of
Common Stock pursuant to an Award shall be fixed by the Committee and may be
equal to, more than or less than 100% of the fair market value of the shares of
Common Stock subject to the Award on the date the Award is granted.
(b) Each Award shall contain such vesting provisions, such transfer
restrictions and such other restrictions and conditions as the Committee, in its
sole discretion, may determine, including, without limitation, the circumstances
under which the Company shall have the right and option to repurchase shares of
Common Stock acquired pursuant to an Award.
(c) Stock certificates representing Common Stock acquired pursuant to
an Award shall bear a legend referring to the restrictions imposed on such Stock
and such other matters as the Committee may determine.
(d) In the event that the Company is required to withhold any
Federal, state or local taxes in respect of any compensation income realized by
the Participant in respect of an Award granted hereunder, or in respect of any
shares acquired pursuant to an Award, or in respect of the vesting of any such
shares of Common Stock, then the Company shall deduct from any
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payments of any kind otherwise due to such Participant the aggregate amount of
such Federal, state or local taxes required to be so withheld or, if such
payments are insufficient to satisfy such Federal, state or local taxes, or if
no such payments are due or to become due to such Participant, then, such
Participant will be required to pay to the Company, or make other arrangements
satisfactory to the Company regarding payment to the Company of, the aggregate
amount of any such taxes. All matters with respect to the total amount of taxes
to be withheld in respect of any such compensation income shall be determined by
the Committee its sole discretion.
Section 8. ADJUSTMENTS. (a) In the event that after the adoption of
the Plan by the Board of Directors, the outstanding shares of the Company's
Common Stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in Common Stock, the
Board of Directors shall appropriately adjust (i) the number of shares of Common
Stock (and the option price per share) subject to the unexercised portion of any
outstanding Option (to the nearest possible full share), PROVIDED, HOWEVER, that
the limitations of Section 425 of the Code shall apply with respect to
adjustments made to IS0s; (ii) the number of shares of Common Stock to be
acquired pursuant to an Award which have not become vested (and the purchase
price per share), and (iii) the number of shares of Common Stock for which
Options and/or Awards may be granted under this Plan, as set forth in Section
4.1 hereof, and such adjustments shall be effective and binding for all purposes
of this Plan.
(b) Notwithstanding the foregoing, in the event of any offer to
holders of the Company's Common stock generally relating to the acquisition of
their shares, including, without limitation, through purchase, merger or
otherwise, or (ii) any transaction generally relating to the acquisition of
substantially all of the assets or business of the Company, the Committee may
make such adjustment as it deems equitable in respect of outstanding Options and
Awards including, without limitation, the revision or cancellation of any
outstanding Options and/or Awards. Any such determination by the Committee
shall be effective and binding for all purposes of this Plan.
Section 9. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP.
Neither this Plan nor any Option and/or Award granted hereunder to a
Participant shall be construed as conferring upon such Participant any right to
continue in the employ of the Company or the service of the Company or any
Subsidiary as the case may be,
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or limit in any respect the right of the Company or any Subsidiary to terminate
such Participant's employment or other relationship with the Company or any
Subsidiary, as the case may be, at any time.
Section 10. AMENDMENT OF THE PLAN. The Board of Directors may amend the
Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that, without
the approval of the holders of a majority of the outstanding stock of the
Company entitled to vote thereon at a meeting, the Board of Directors may not
amend the Plan (i) to increase MATERIALLY THE BENEFITS ACCRUING TO PARTICIPANTS
UNDER THE PLAN, (ii) to increase MATERIALLY (except for increases due to
adjustments in accordance with Section 8 hereof) the aggregate number of shares
of Common Stock for which Options and/or Awards may be granted hereunder OR
(iii) TO MODIFY MATERIALLY THE REQUIREMENTS AS TO ELIGIBILITY FOR PARTICIPATION
IN THE PLAN.
Section 11. TERMINATION OF THE PLAN. The Board of Directors may
terminate the Plan at any time. Unless the Plan shall theretofore have been
terminated by the Board of Directors, the Plan shall terminate ten years after
the date of its initial adoption by the Board of Directors. No Option and/or
Award may be granted hereunder after termination of the Plan. The termination
or amendment of the Plan shall not alter or impair any rights or obligations
under any Option and/or Award theretofore granted under the Plan.
Section 12. EFFECTIVE DATE OF THE PLAN. This Plan shall be effective as
of September 20, 1989, the date on which the Plan was adopted by the Board of
Directors of the Company and approved by the written consent of holders of a
majority of the outstanding common stock of the Company.
* * * * *
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ATTACHMENT A
AMENDMENTS TO SECTION 4.1
1. On November 12, 1992 the Stockholders approved, at the Annual Meeting, an
additional 800,000 shares of Common Stock for a total number of shares of
Common Stock for which Options and/or Awards may be granted under this Plan
not to exceed, in the aggregate, 2,497,500.
2. On November 9, 1993 the Stockholders approved, at the Annual Meeting, an
additional 800,000 shares of Common Stock for a total number of shares of
Common Stock for which Options and/or Awards may be granted under this Plan
not to exceed, in the aggregate, 3,297,500.
3. On November 15, 1994 the Stockholders approved, at the Annual Meeting, an
additional 600,000 shares of Common Stock for a total number of shares of
Common Stock for which Options and/or Awards may be granted under this Plan
not to exceed, in the aggregate, 3,897,500.
4. On March 29, 1995 the Stockholders approved, at a Special Meeting, an
additional 950,000 shares of Common Stock for a total number of shares of
Common Stock for which Options and/or Awards may be granted under this Plan
not to exceed, in the aggregate, 4,847,500.
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