<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE BISYS GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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> 2
[BISYS LOGO]
THE BISYS GROUP, INC.
150 CLOVE ROAD
LITTLE FALLS, NEW JERSEY 07424
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 12, 1999
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 12, 1999, at 9:00 a.m., for
the following purposes:
1. to re-elect seven 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
2000 Employee Stock Purchase Plan;
3. to consider and vote upon a proposal to approve the Company's
1999 Equity Participation Plan;
4. to consider and vote upon a proposal to approve the Company's
Executive Officer Annual Incentive Plan;
5. to consider and vote upon a proposal to ratify the appointment
of PricewaterhouseCoopers LLP, independent public accountants,
as the auditors of the Company for the fiscal year ending June
30, 2000; and
6. 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 17,
1999 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 8, 1999
<PAGE> 3
THE BISYS GROUP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 12, 1999
This Proxy Statement is being furnished to stockholders of record of The
BISYS Group, Inc. ("BISYS" or the "Company") as of September 17, 1999 (the
"Record Date") in connection with the solicitation by the Board of Directors of
BISYS of proxies for the 1999 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 12, 1999 at 9:00 a.m., and at any
adjournments thereof, for the purposes stated in the Notice of Annual Meeting.
The approximate date of mailing of this Proxy Statement and enclosed form of
proxy to stockholders is October 8, 1999.
As of the Record Date, the Company had outstanding 27,238,659 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
Seven directors are standing for re-election to the Board at the Annual
Meeting for terms expiring at the 2000 Annual Meeting. Accordingly, there are
seven nominees for election as directors, and proxies may not be voted for a
greater number of persons than the seven 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 seven 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> 4
NOMINEES FOR ELECTION AS DIRECTOR
<TABLE>
<CAPTION>
Name Principal Occupation Served as Director Since
- ---- -------------------- ------------------------
<S> <C> <C>
LYNN J. MANGUM Chairman of the Board, President and 1989
Chief Executive Officer of BISYS.
ROBERT J. CASALE Until retirement, Group President, Brokerage Information 1997
Services, Automatic Data Processing, Inc.
THOMAS A. COOPER Chairman, TAC Associates, a financial advisory and 1997
investment firm.
JAY W. DEDAPPER Until retirement, Executive Vice President (Operations) 1989
NL Industries, Inc., a metal, chemical and petroleum company.
JOHN J. LYONS President and Chief Operating Officer, Keefe Managers, Inc., 1992
a New York City-based asset management firm.
THOMAS E. MCINERNEY General Partner of Welsh, Carson, Anderson & Stowe, a 1989
New York investment firm.
JOSEPH J. MELONE Chairman Emeritus, The Equitable Companies, Inc.
1999
</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, 57, has served as a Director and as Chairman of the Board
and Chief Executive Officer of the Company since its founding in August 1989. He
was elected President of the Company in May 1998. Prior to August 1989, he
served as a Corporate Vice President of Automatic Data Processing, Inc. ("ADP")
and as Division President of ADP's Employer Services National Accounts Division
since December 1988. Prior thereto, he served for 22 years in various capacities
in ADP's Financial Services Group including, among other positions, Division
President of the predecessor company of the Company since 1983.
MR. CASALE, 60, has served as a Director of the Company since 1997. Mr.
Casale is the former Group President, ADP, Brokerage Information Services, a
position in which he served from 1988 to 1997. His experience also includes
serving as Managing Director, Mergers & Acquisitions/Corporate Finance of the
High Technology Group of Kidder, Peabody & Co. and more than 10 years in various
executive positions with AT&T, including President-elect of AT&T's Special
Markets Group, responsible for major joint ventures and partnerships. He is a
member of the Board of Directors of The Provident Mutual Life Insurance Company
and the Quantum Corporation, a publicly held disc drive manufacturer.
MR. COOPER, 63, has served as a Director of the Company since 1997. Mr.
Cooper is and has been Chairman of TAC Associates, a financial advisory and
investment firm, since 1996, and Chairman of Flatiron Credit Company, a finance
company, since 1997. He previously served since its formation and until 1996 as
Chairman of TAC Bancshares, Inc., a holding company formed in 1991 to acquire
and operate financial service institutions. From August 1993 to August 1996, he
served as Chairman, President and Chief Executive Officer of Chase Federal Bank,
Florida, following the acquisition and merger of Chase Federal Bank and
Financial Federal Bank by TAC Bancshares in August 1993. Mr. Cooper has over 30
years of broad experience in financial
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<PAGE> 5
services which include serving as Chief Executive Officer of Goldome, one of the
nation's largest thrift institutions, from 1988 to 1991; as Chairman and Chief
Executive Officer of INVEST/ISFA Corporation, a provider of brokerage,
investment, insurance, and related services from 1987 to 1988; and as President
and Chief Operating Officer of Bank of America, and President of BankAmerica
Corporation from 1985 to 1987. He is a member of the Board of Directors of
Renaissance Reinsurance, a publicly held reinsurance company.
MR. DEDAPPER, 75, has served as a Director of the Company since 1989.
Prior to his retirement in 1981, he served for more than five years as Executive
Vice President (Operations) of NL Industries, Inc., a metal, chemical and
petroleum company and served on its Board of Directors.
MR. LYONS, 59, has served as a Director of the Company since 1992.
Since February 1999, Mr. Lyons has served as President and Chief Operating
Officer of Keefe Managers, Inc., a New York City-based asset management firm.
From September 1997 to February 1999 he served as President and Chief Executive
Officer of Gateway American Bank of Florida, a community bank headquartered in
Ft. Lauderdale, Florida. From August 1996 to April 1997, Mr. Lyons served as
President and Chief Executive Officer of Regent National Bank, Philadelphia,
Pennsylvania. From April 1995 to August 1996, he served as President and Chief
Executive Officer and a Director of Monarch Savings Bank, FSB, Clark, New
Jersey. From December 1993 until April 1995, he was President and Chief
Executive Officer of Jupiter Tequesta National Bank, a national bank
headquartered in Tequesta, Florida. From 1980 until December 1993, he was
President and Chief Executive Officer of Lyons, Zomback & Ostrowski, Inc., a New
York-based bank and thrift consulting firm. That firm became a subsidiary of
Advest Group, Inc., a holding company with a brokerage firm as its principal
subsidiary. Mr. Lyons was Vice Chairman of Advest, Inc. during 1993 and from
1989 through 1993 was a member of its Board of Directors. He is a director of
Gateway American Bank of Florida, a publicly held banking company.
MR. MCINERNEY, 58, has served as a Director of the Company since 1989.
Mr. McInerney is, and has been since 1987, a general partner of Welsh, Carson,
Anderson & Stowe, a private equity investor specializing in the information
processing and healthcare industries, and is a general partner of the respective
sole general partners of its associated limited partnerships. He is also a
director of the following publicly held companies: The Cerplex Group, Inc., a
spare parts and repair services provider for computer manufacturers; SpectraSite
Holdings Inc., a provider of wireless communication transmitting and receiving
facilities; and MedeAmerica Corporation, a provider of electronic data
interchange products and services to the health care industry. He is also a
director of Centennial Cellular Holding Corp., the parent company of Centennial
Cellular Corp., a publicly held cellular communications company.
MR. MELONE, 68, has served as a Director of the Company since August
1999. He has served as Chairman Emeritus of The Equitable Companies, Inc. since
his retirement as President and Chief Executive Officer of the company in 1998,
a position in which he served since 1996. He previously served from 1992 through
1995 as President and Chief Operating Officer of The Equitable Companies, Inc.
upon its formation in 1992 after serving two years in the same position for its
principal insurance subsidiary, The Equitable Life Assurance Society of the
United States. Prior to joining Equitable, Mr. Melone served as President of The
Prudential Insurance Company of America. He is a member of the Board of
Directors of Foster Wheeler Corporation, a publicly held engineering and
construction company.
All directors are elected annually and hold office until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. Each of the non-employee directors (i.e., other than Mr. Mangum)
receive a $15,000 annual retainer and a $1,000 fee for their personal attendance
at each meeting, including committee meetings held other than the day of a Board
meeting. Mr. Mangum does not receive any compensation for his services as a
director, but is reimbursed for expenses. Pursuant to the Company's Non-Employee
Directors' Stock Option Plan, as amended (the "Non-Employee Directors' Stock
Option Plan"), which became effective, as amended, at the 1997 Annual Meeting of
Stockholders, each person who was a non-employee director of the Company at that
time (i.e., nominees other than Messrs. Mangum and Melone) was granted an option
to purchase 25,000 shares of Common Stock at an exercise price of $34.00 per
share, the fair market value of a share of Common Stock on the date of grant.
Pursuant to the Non-Employee Directors' Stock Option Plan,
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<PAGE> 6
each non-employee director of the Company elected thereafter by stockholders
(i.e.,Mr. Melone) will be granted an option to purchase 25,000 shares of Common
Stock upon his initial election by stockholders as a director. Each such option
vests 20% on the date of grant and 20% upon such director's re-election by
stockholders at subsequent annual meetings until such option is fully vested.
Each such option is exercisable to the extent vested. A new stock option for an
additional 25,000 shares of Common Stock will be granted to a non-employee
director upon re-election at the next annual meeting after the annual meeting at
which the option becomes fully vested. All stock options under the Non-Employee
Directors' Plan are granted at an exercise price equal to the fair market value
of a share of Common Stock on the date of grant. There are 275,000 shares of
Common Stock reserved for options under the Non-Employee Directors' Stock Option
Plan, of which 109,600 shares are currently available for future options which
may be granted thereunder.
During fiscal 1999, the Board of Directors of the Company held four
meetings. The standing committees of the Board of Directors are the Audit
Committee, whose current members are Messrs. Cooper and DeDapper, and the
Compensation Committee, whose current members are Messrs. Casale and Lyons. The
Audit Committee periodically consults with the Company's management and
independent public accountants on financial matters, including the Company's
internal financial controls and procedures. The Audit Committee held four
meetings in fiscal 1999. The Compensation Committee reviews and makes
recommendations with respect to the salary and incentive compensation of the
Chief Executive Officer and his direct reports, and certain other employees of
the Company and its subsidiaries whose salaries are in excess of specified
levels; administers the Company's stock option plans, including the granting of
stock options and rights to purchase Common Stock; and administers the Company's
annual Employee Stock Purchase Plan, as approved by the stockholders. During
fiscal 1999, the Compensation Committee held four meetings. The Board of
Directors of the Company does not have a standing Nomination Committee. During
fiscal 1999, all of the Company's directors attended at least 75% of the
meetings of the Board of Directors and all committees on which they served.
OTHER EXECUTIVE OFFICERS
KEVIN J. DELL, 43, serves as Executive Vice President, General Counsel
and Secretary. He previously served since 1998 as Senior Vice President, having
joined the Company as Vice President, General Counsel and Secretary in 1996.
From 1993 until he joined the Company, he served as Vice President, General
Counsel and Secretary of Concurrent Computer Corporation, a public company
supplier of real-time computer systems.
J. ROBERT JONES, 46, serves as Executive Vice President, Business
Development of the Company. He previously served as Senior Vice President,
Business Development since 1996 and in a similar position within the BISYS
organization since 1991. From March 1989 to June 1991, Mr. Jones served as Vice
President, Sales and Marketing.
NEIL P. MARCOUS, 51, serves as Executive Vice President, Strategic
Marketing and Technology. He joined the Company in May 1998 as Executive Vice
President, including responsibilities as Group President, Marketing and
Information Services. Prior to joining the Company, he served as Vice
President/General Manager of the Electronic Commerce Division of Electronic Data
Systems, Inc., a provider of information technologies services including
electronic funds transfer services, since joining that company in 1989. He has
served as a Director of the Company from 1994 to 1998.
CHARLES J. MOHR, 52, serves as Executive Vice President, including
responsibilities as Group President, Investment Services. Prior to joining the
Company in that position in 1998, he served as chief executive officer of
Systematic Financial Management, L.P., an investment management firm, from 1996
and as president and chief executive officer of SunAmerica Asset Management
Corporation, a mutual fund company, from 1990 to 1996.
WILLIAM W. NEVILLE, 45, serves as Executive Vice President, including
responsibilities as Group President, Information Services. He previously served
since 1997 as President of the Information Solutions
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<PAGE> 7
division. He joined the Company in 1992 as Senior Vice President/General Manager
Sales, Eastern Region of the Information Solutions division.
ANTHONY A. PASCOTTI, 58, serves as Executive Vice President, including
responsibilities as Group President, Insurance and Education Services. He joined
the Company in 1996 as President, Insurance Services upon completion of the
Company's acquisition of The Underwriters' Group, where he served as president
since its founding in 1967.
MARK J. RYBARCZYK, 44, serves as Executive Vice President, Human
Resources of the Company. He previously served as Senior Vice President, Human
Resources since 1993. He has also served as Vice President, Human Resources of
the Company and its predecessor company since June 1987 and Director, Human
Resources since October 1984.
DENNIS R. SHEEHAN, 43, serves as Executive Vice President and Chief
Financial Officer of the Company, a position to which he was elected in February
1998. He previously served as Senior Vice President, Finance of the Company,
which became an executive officer position in 1997 and served in a similar
position within the BISYS organization since joining BISYS in connection with
its acquisition of Concord Holding Corporation ("Concord") in March 1995. Since
1992, he served in various executive officer positions with Concord, including
Executive Vice President and Chief Financial Officer.
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 1999, all statements of beneficial ownership required
to be filed with the Securities and Exchange Commission (the "Commission") were
timely filed with the exception of one Form 4 for Mr. Rybarczyk, reporting in
October 1999 his April 1999 acquisition of 7,000 shares of Common Stock pursuant
to a stock option exercise.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, based on filings
with the Commission for the period ended June 30, 1999, with respect to the
shares of Common Stock beneficially owned by stockholders reporting ownership of
more than 5% of the outstanding shares of Common Stock:
<TABLE>
<CAPTION>
BENEFICIAL OWNER NUMBER OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------- ----------------------------------- ----------------
<S> <C> <C>
Wellington Management Company, LLP 2,995,372(1) 11.0%
75 State Street
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc. 2,554,750(2) 9.4%
100 East Pratt Street
Baltimore, Maryland 21202
Massachusetts Financial Services Company 1,665,013(3) 6.1%
500 Boylston Street
Boston, MA 02116
</TABLE>
- ----------
(1) The stockholder has shared investment power with respect to shares
shown as beneficially owned by it; sole voting power with respect to
1,759,147 shares, shared voting power with respect to 504,039 shares
and no voting power with respect to the remaining shares shown as
beneficially owned by it.
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<PAGE> 8
(2) These securities are owned by various individual and institutional
investors for which T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment adviser with power to direct investments and/or
sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates
is deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities. The stockholder has sole investment power
with respect to the shares shown as beneficially owned by it, and sole
voting power with respect to 222,400 shares and no voting power with
respect to the remaining shares shown as beneficially owned by it.
(3) The stockholder has sole investment power with respect to the shares
shown as beneficially owned by it, and sole voting power with respect
to 1,380,913 shares and no voting power with respect to the remaining
shares shown as beneficially owned by it.
The following table sets forth, as of September 17, 1999, certain
information with respect to the shares of Common Stock beneficially owned by (i)
each director, (ii) each of the persons for whom compensation information is
disclosed below under the heading "Executive Compensation," and (iii) all the
Company's directors and executive officers at September 17, 1999 as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNER NO. OF SHARES BENEFICIALLY OWNED(1) PERCENT OF CLASS
- ---------------- ----------------------------------- ----------------
<S> <C> <C>
Lynn J. Mangum 351,191(2) 1.3%
Robert J. Casale 15,000(3) *
Thomas A. Cooper 21,050(3) *
Jay W. DeDapper 19,100(4) *
John J. Lyons 18,068(5) *
Thomas E. McInerney 48,942(4) *
Charles J. Mohr 14,925(6) *
Dennis R. Sheehan 74,847(7) *
Neil P. Marcous 31,300(8) *
J. Robert Jones 144,805(9) *
All directors and executive officers
as a group (15 persons) 1,170,837(10) 4.3%
</TABLE>
* Less than 1.0%.
(1) Each person has sole voting and investment power with respect to the
shares shown as beneficially owned by him. Assumes re-election of
nominees for Director and resulting grant to Mr. Melone and vesting of
stock options pursuant to the Company's Non-Employee Directors' Stock
Option Plan.
(2) Includes an aggregate 92,168 shares subject to stock options
exercisable as of November 16, 1999 (60 days from the record date for
the Annual Meeting).
(3) Includes an aggregate 15,000 shares subject to stock options
exercisable as of November 16, 1999.
(4) Includes an aggregate 18,600 shares subject to stock options
exercisable as of November 16, 1999.
(5) Includes an aggregate 15,200 shares subject to stock options
exercisable as of November 16, 1999.
(6) Includes an aggregate 11,781 shares subject to stock options
exercisable as of November 16, 1999.
(7) Includes an aggregate 27,548 shares subject to stock options
exercisable as of November 16, 1999.
(8) Includes an aggregate 31,200 shares subject to stock options
exercisable as of November 16, 1999.
(9) Includes an aggregate 33,417 shares subject to stock options
exercisable as of November 16, 1999.
(10) Includes an aggregate 373,140 shares subject to stock options
exercisable as of November 16, 1999.
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<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended June 30, 1999,
1998 and 1997, certain compensation information as to the Chief Executive
Officer, and each of the four most highly compensated executive officers of the
Company serving as executive officers at June 30, 1999 ("Named Executive
Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Comp-
ensation Awards
----------------------- ---------------
(a) (b) (c) (d) (g) (i)
Securities All Other
Name and Principal Salary Bonus Underlying Compensation(1)
Position Year ($) ($) Options/SARs (#) ($)
- -------- ---- ------ ----- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Lynn J. Mangum 1999 534,077 510,000 65,000 39,436
Chairman of the Board, 1998 449,615 475,000 65,000 30,359
President and Chief 1997 389,154 375,000 65,000 4,750
Executive Officer
Charles J. Mohr (2) 1999 343,269 225,000 75,000 1,638
Executive Vice President,
Group President,
Investment Services
Dennis R. Sheehan 1999 242,346 275,000 30,000 8,487
Executive Vice President 1998 196,683 245,000 60,000 6,608
and Chief Financial Officer 1997 169,956 165,000 25,000 4,750
Neil P. Marcous (3) 1999 342,885 175,000 0 55,098
Executive Vice President, 1998 40,625 21,875 75,000 0
Strategic Marketing and
Technology
J. Robert Jones 1999 236,462 260,000 30,000 26,992
Executive Vice President, 1998 216,539 200,000 30,000 16,293
Business Development 1997 199,711 180,000 30,000 4,750
</TABLE>
- ----------
(1) The entire amount for fiscal year 1997, and $5,000 for fiscal years
1998 and 1999 ($0 for Messrs. Marcous and Mohr for fiscal year 1998 and
$3,779 for Mr. Marcous for fiscal year 1999) represents the Company's
matching contribution under the Company's 401(k) Plan. For fiscal years
1998 and 1999, includes the economic value of a "split dollar" life
insurance policy as follows: Mr. Mangum ($1,830 and $5,186); Mr. Mohr
($0 and $1,638); Mr. Sheehan ($356 and $737); Mr. Marcous ($0 and
$1,319); and Mr. Jones ($475 and $992). Also includes for fiscal year
1998 and 1999 the value of the Company's matching contribution under a
voluntary executive deferred compensation program as follows: Mr.
Mangum ($23,529 and $19,250); Mr. Mohr ($0 and $0); Mr. Sheehan ($1,250
and $2,750); Mr. Marcous ($0 and $0); and Mr. Jones ($10,818 and
$21,000). For Mr. Marcous, includes a $50,000 hiring advance earned in
fiscal year 1999 as of the first anniversary of his employment.
(2) Became an executive officer of the Company during the fiscal year ended
June 30, 1999.
(3) Became an executive officer of the Company during the fiscal year ended
June 30, 1998.
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<PAGE> 10
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the grant of stock
options to the Named Executive Officers during the fiscal year ended June 30,
1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS EXERCISE AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED OR BASE OF STOCK PRICE APPRECIATION
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION FOR OPTION TERM
NAME GRANTED (1) FISCAL YEAR ($/SH) DATE 5% ($) (2) 10% ($) (2)
- ---- ----------- --------------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Lynn J. Mangum 65,000 4.7% 44.50 8/20/08 1,817,078 4,609,900
Charles J. Mohr 75,000 5.4% 42.00 7/6/08 2,126,092 5,251,294
Dennis R. Sheehan 30,000 2.2% 44.50 8/20/08 839,574 2,127,646
Neil P. Marcous 0 0 N/A N/A N/A N/A
J. Robert Jones 30,000 2.2% 44.50 8/20/08 839,574 2,127,646
</TABLE>
- ----------
(1) Options granted pursuant to the Company's stock option plans, with an
exercise price equal to the fair market value as of the date of grant
and vesting over a five year period, 20% on each anniversary of the
date of grant.
(2) The dollar amounts under these columns are based on the assumed
appreciation rates of 5% and 10% prescribed by the Commission. These
amounts are not intended to forecast possible future appreciation, if
any, of the Company's
stock price.
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,
1999 based on the last sale price of a share of Common Stock on June 30, 1999 of
$58.50.
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Options at Fiscal In-the-Money Options at
Exercise Value Year End (#) Fiscal Year End
Name (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Lynn J. Mangum 4,000 $ 177,000 283,191 204,000 $11,205,046 $4,879,135
Charles J. Mohr 0 $ 0 0 75,000 $ 0 $1,319,535
Dennis R. Sheehan 5,000 $ 258,720 63,276 98,000 $ 2,423,758 $2,084,442
Neil P. Marcous 0 $ 0 26,200 75,000 $ 658,933 $1,803,285
J. Robert Jones 6,277 $ 277,757 117,000 78,000 $ 4,829,255 $1,800,316
</TABLE>
8
<PAGE> 11
LOANS TO EXECUTIVE OFFICERS
The Board of Directors has approved and the Company has made interest
free loans to selected executive officers to assist them in exercising
non-qualified stock options, retaining the underlying shares and paying the
applicable taxes resulting from such exercises. Of the approximately $11.3
million in principal amount of the loans, approximately $9 million represents
the option exercise price paid to the Company. The remaining principal amount of
approximately $2.3 million was used to pay withholding taxes resulting from the
option exercises. Since the options exercised were non-qualified options, the
resulting compensation expense is deductible for corporate income tax purposes.
These loans are full recourse and are secured by that number of the shares of
the Company's Common Stock acquired pursuant to the exercise of the option
representing up to 120% of the principal amount of the loan. The principal is
repayable the later of five years from the date of the loan or the expiration
date of the option exercised using such loan proceeds. The principal is also
repayable within one year of the employee's death or termination of employment
due to disability and within 30 days of voluntary resignation.
The table below sets forth the executive officers to whom the loans
were made, the loan principal for each officer and the number of shares acquired
through option exercises using the loans proceeds. As of October 8, 1999, no
principal amount of any loan was due, and no principal amount has been repaid.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME LOAN PRINCIPAL COMMON STOCK ACQUIRED
---- -------------- ---------------------
<S> <C> <C>
Lynn J. Mangum $5,636,968 150,237
Dennis R. Sheehan $ 941,476 28,979
J. Robert Jones $2,479,051 82,999
Mark J. Rybarczyk $1,718,879 48,702
Kevin J. Dell $ 570,172 14,056
</TABLE>
In addition, the Board of Directors has authorized a payment to each
loan recipient to cover the individual income taxes, if any, incurred by such
individual as a result of the imputed income on the interest free loan to the
extent that such imputed income is not offset by the deductibility of the loan
interest. The payment will be grossed up to cover any additional taxes resulting
from such payment.
EMPLOYMENT AGREEMENTS
The Company does not have employment agreements with any of its
executive officers. In June 1999, the Company entered into Key Executive
Separation Agreements with Messrs. Jones, Mangum and Sheehan, and certain other
executive officers of the Company. The Agreement with Mr. Mangum replaced a
similar agreement entered into in 1995. The Agreements provide for certain lump
sum severance payments in the event of termination other than for cause or
following a change in control of the Company. For terminations other than for
cause, the executive would receive one time (one and one-half times in the case
of Mr. Mangum) the sum of (i) his then current base salary and (ii) the greater
of his then current fiscal year "at Plan" annual incentive target amount or the
immediately prior year's annual incentive compensation settlement amount (such
sum, prior to being multiplied, referred to as the "Applicable Severance
Amount"). For terminations after a change in control, the executive would
receive two times (three times in the case of Mr. Mangum) his Applicable
Severance Amount. 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, under certain
circumstances, during the 13th through 36th month after the change in control.
In the event of such
9
<PAGE> 12
termination of employment, he would receive a lump sum severance payment equal
to two times (three times in the case of Mr. Mangum) his Applicable Severance
Amount. The Agreement does not provide any guarantee of employment or any other
terms and conditions of employment.
Pursuant to the terms of their stock option agreements, in the event of
a change in control of the Company, all options then granted to the executive
officers of the Company become automatically vested, to the extent not
previously 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 Director's Compensation Committee. The Compensation Committee,
which for fiscal 1999 was comprised of Messrs. Lyons and Casale, approves base
salary and incentive compensation plans for executive officers reporting to the
chief executive officer and other senior executives with a base salary in excess
of a designated amount, and reviews and recommends base salary and incentive
compensation plans for executive officers who are also directors for final
approval by the Board of Directors. Mr. Mangum, the Company's Chairman,
President and Chief Executive Officer, does not participate in decisions of the
Board regarding his compensation. The Compensation Committee also establishes
stock option plan participation levels for all employees, including executive
officers. This report is submitted by the Compensation Committee.
The components of the Company's executive compensation program consist
of base salaries, annual cash incentive plans and stock options. The Company's
compensation program, with Committee review, is intended to provide executive
officers with overall levels of compensation opportunity that are competitive
within the information, investment, and insurance and education services
industries, as well as within a broader spectrum of companies of comparable size
and complexity. Competitive compensation information is determined from
published sources as well as independent consultants. The Company's compensation
program is structured and administered to support the Company's business mission
and to generate favorable returns for its stockholders.
BASE SALARY. Each executive officer's base salary is derived primarily
through an analysis of appropriate industry and competitive labor markets for
executive officer services, prepared at the direction of the Committee by the
Company's Human Resources department with the advice of independent consultants.
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 or less responsibilities, the performance of the particular
executive's business unit or department in relation to established strategic
plans, the Company's operating budget for the year and the overall financial and
strategic performance of the Company compared to target objectives.
INCENTIVE COMPENSATION PLAN. For each executive officer, a cash
incentive compensation plan is established at the beginning of each fiscal year
in connection with the establishment of the Company's strategic plans and annual
operating budgets. Each individual's plan establishes a range of minimum, "at
Plan" and maximum incentive compensation and a number of performance objectives.
The performance objectives generally include operating earnings per share
growth, the financial performance of an executive's business unit, and various
other measurable financial and non-financial objectives. Incentive compensation
earned is determined following completion of the fiscal year based on
performance compared to objectives. Incentive compensation in excess of the
established range may be paid where outstanding accomplishments have been
achieved by the executive during the fiscal year. For fiscal year 1999, the
Company and each of the Named Executive Officers met or exceeded established
performance objectives resulting in the bonus compensation set forth in the
Summary Compensation Table.
STOCK OPTION AWARDS. The Company maintains stock option plans that are
designed to align executive employees' and stockholders' interests in the
enhancement of stockholder value. In formulating recommendations for stock
option awards, the Compensation Committee evaluates the dilutive impact of
additional stock options, the Company's overall financial performance for the
year, the desirability of long-term service from an executive
10
<PAGE> 13
officer and the number of options held by other executives of the Company with
the same, more or less responsibility than the executive officer under
consideration. To encourage long-term performance, stock options typically vest
over a five year period and remain exercisable for ten years.
CEO COMPENSATION. Compensation for Mr. Mangum, the Company's Chairman,
President and Chief Executive Officer, is based on the same criteria used for
executive officers generally, including an analysis of chief executive
compensation of comparable companies. Mr. Mangum's incentive compensation for
fiscal 1999 reflects favorable achievement of the performance objectives
established under his cash incentive plan, particularly revenue and operating
earnings per share growth and the strategic positioning of the Company, which
were the key determinants of Mr. Mangum's incentive compensation under his cash
incentive plan.
August 20, 1999 John J. Lyons
Robert J. Casale
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during fiscal year
1999 were John J. Lyons and Robert J. Casale, each of whom are directors but are
not current or former employees of the Company. There were no Compensation
Committee interlocks or insider participation during fiscal year 1999.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
over the past five fiscal years in the cumulative shareholder return (assuming
the reinvestment of dividends) on the Company's Common Stock with the cumulative
total returns of both a broad equity market index and a peer group index. In
prior year's the Company used the NASDAQ Market Index as its comparative broad
equity market index and the Value Line Investment Survey's Computer Software and
Services Group Index (the "Value Line Index") as its published industry index.
The Board of Directors has determined that these indices are no longer
appropriate for comparative purposes since both are heavily weighted by
technology and internet companies that are not comparable to the Company. The
Company considers the S&P MidCap 400 Index and the S&P Super Composite Services
(Data Processing) Index more appropriate broad equity market and published
industry group indices for comparative purposes. The Company and many of its
competitors are included in both of these new indices. As required, the graph
shows the comparative returns using the prior indices as well as the new
indices.
[LINE GRAPH]
11
<PAGE> 14
Assumes $100 invested on June 30, 1994 in BISYS Common Stock and each
of the broad market and published industry group indices.
<TABLE>
<CAPTION>
6/30/94 6/30/95 6/30/96 6/30/97 6/30/98 6/30/99
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
BISYS $100 $109 $184 $204 $200 $285
S&P MidCap 400 Index $100 $122 $149 $183 $233 $273
S&P Super Composite
Svcs (Data Processing) $100 $131 $183 $194 $225 $267
Index
Value Line Index $100 $151 $226 $351 $594 $982
NASDAQ Market Index $100 $133 $171 $208 $274 $393
</TABLE>
The above report of the Compensation Committee and the 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, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
such report or graph by reference.
2. APPROVAL OF THE 2000 EMPLOYEE STOCK PURCHASE PLAN
On August 20, 1999, the Board of Directors of the Company adopted,
subject to stockholder approval, The BISYS Group, Inc. 2000 Employee Stock
Purchase Plan (the "2000 Plan"). Under the 2000 Plan, which is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (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 2000
Plan is intended to serve this function. A copy of the 2000 Plan is attached to
this Proxy Statement as Exhibit A. The principal features of the 2000 Plan are
summarized below.
VOTE REQUIRED FOR APPROVAL
The 2000 Plan will be submitted to stockholders for their approval at
the Annual Meeting. The proposal to adopt the 2000 Plan must be approved by the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE 2000 PLAN.
SUMMARY OF THE 2000 PLAN
An aggregate of 150,000 shares of Common Stock have been reserved for
issuance upon the exercise of Employee Options granted under the 2000 Plan,
subject to stockholder approval of the 2000 Plan. If approved by stockholders,
the 2000 Plan will become effective on January 1, 2000. The 2000 Plan will
terminate on December 31, 2000, unless it is earlier terminated by the Board of
Directors. The approximately 3,000 employees who are regularly scheduled to work
for the Company, or its subsidiaries, at least 20 hours per week and who have
completed one month of employment as of January 1, 2000 for the Company, or its
subsidiaries, will be eligible to receive Employee Options. The maximum number
of shares that may be purchased by any participant under the 2000 Plan will be
equal to the lesser of 15% of base pay or $25,000, divided by 85% of the lesser
of the fair market value of the Company's Common Stock on January 1, 2000 and
December 31, 2000
12
<PAGE> 15
based upon the closing price of the Common Stock on the Nasdaq National Market
on the most recent prior trading day. No employee will be granted an Employee
Option if (i) immediately after such grant such employee would own stock
possessing 5% or more (including stock subject to outstanding options) of the
total combined voting power or value of all classes of stock of the Company, or
(ii) the exercise of such Employee Option would result in the employee acquiring
a cumulative total of more than 700 shares of Common Stock under the 2000 Plan.
In the event that any outstanding Employee Option expires or is terminated for
any reason, the shares allocable to the unexercised portion of such Employee
Option will be available for issuance under the 2000 Plan.
Under the 2000 Plan, the exercise price of an Employee Option shall be
the lower of: (i) 85% of the fair market value of a share of Common Stock on
January 1, 2000 based upon the closing price of the Common Stock on the Nasdaq
National Market on December 31, 1999 or (ii) 85% of the fair market value of a
share of Common Stock on December 31, 2000, based upon the closing price of the
Common Stock on the Nasdaq National Market on December 31, 2000. All Employee
Options will be deemed to be exercised on December 31, 2000.
The 2000 Plan will be administered by a committee of the Board of
Directors (the "Committee"). The Committee shall consist of no less than two
persons and all members shall be "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Exchange Act. The Committee's authority to administer the
2000 Plan includes the authority (i) to interpret the 2000 Plan and decide any
matters arising thereunder and (ii) to adopt such rules and regulations, not
inconsistent with the provisions of the 2000 Plan, as it may deem advisable to
carry out the purposes of the 2000 Plan. All expenses and liabilities incurred
by the Board of Directors or the Committee in administering the 2000 Plan are to
be borne by the Company.
The 2000 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 2000 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 2000 Plan will be appropriately
adjusted (to the nearest possible full share) by the Board of Directors, and
such adjustment shall be effective and binding for all purposes. Notwithstanding
the foregoing, the Board may make such adjustment as it deems equitable in
respect of outstanding Employee Options, including, without limitation, the
revision or cancellation of any outstanding Employee Options, in the event of an
offer to acquire the outstanding shares of the Company or a transaction
involving the sale of all or substantially all of the assets of the Company.
The market value of the Common Stock as of the close of business on
September 17, 1999, as reflected by the closing price of the Common Stock on the
Nasdaq National Market, was $45.6250 per share.
The decision whether to participate in the 2000 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 2000
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 2000 Plan are intended to
qualify as options issued under an
13
<PAGE> 16
"employee stock purchase plan" within the meaning of Section 423 of the Code. If
an optionee makes no disposition of the shares acquired pursuant to exercise of
an Employee Option within one year after the transfer of shares to such optionee
and within two years from grant of the option, then, (i) such optionee will
realize no taxable income as a result of the grant or exercise of such Employee
Option, and (ii) on the subsequent disposition of the shares received upon
exercise of the Employee Option or the death of the optionee, the optionee
generally will realize ordinary compensation income equal to the lesser of (a)
the excess of the fair market value of the shares at the time of such
disposition or death over the exercise price, or (b) 15% of the fair market
value of the shares at the time the Employee Option was granted. In the case of
such a disposition, the optionee's basis in the shares will be increased by the
amount of ordinary compensation so realized, with the result that the optionee
generally will realize long-term capital gain or loss equal to the difference,
if any, between the proceeds realized from the disposition over the sum of (x)
the exercise price and (y) the amount of ordinary compensation income realized.
Under these circumstances, the Company will not be entitled to a deduction for
federal income tax purposes with respect to either the issuance of the Employee
Options, the transfer of shares upon their exercise or the disposition of those
shares.
If shares subject to an Employee Option are disposed of prior to the
expiration of the above time periods, the optionee will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the fair market value of
the shares on the date of exercise over the exercise price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible by the
Company for federal income tax purposes in the same year, provided that the
Company satisfies certain federal income tax withholding requirements. In
addition, the excess, if any, of the amount realized on a disqualifying
disposition over the fair market value of the shares on the date of exercise
generally will be treated as short-term capital gain.
3. APPROVAL OF 1999 EQUITY PARTICIPATION PLAN
INTRODUCTION
The Board of Directors believes that stock option grants have been a
key element in the Company's successful growth. Stock option programs reflect
the Board's continuing belief that stock-based incentive plans and stock
ownership by executives and key employees serve to attract, retain and motivate
talented employees and benefit the Company by providing key employees the
opportunity to acquire personal financial interest in the longer term financial
success of the Company.
In order to continue its strategic use of stock-based compensation, on
August 20, 1999, the Board of Directors adopted, subject to stockholder
approval, The BISYS Group, Inc. 1999 Equity Participation Plan (the "1999
Plan"). The 1999 Plan provides for the grant of "non-qualified stock options"
and "incentive stock options" to acquire Common Stock as well as stock awards
(or their cash equivalent) and stock appreciation rights (collectively "Awards")
to employees. The Board believes that the grant of Awards motivates officers and
key employees through the opportunity of equity participation. In the view of
the Board, Awards focus the attention of recipients on the Company's goal of
increasing stockholder value, since the Awards provide a reward only to the
extent that stock price grows.
VOTE REQUIRED FOR APPROVAL
The 1999 Plan will be submitted to stockholders for their approval at
the Annual Meeting. The proposal to adopt the 1999 Plan must be approved by the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE 1999 EQUITY PARTICIPATION PLAN.
14
<PAGE> 17
If the 1999 Plan is approved by stockholders, it will become effective
as of July 1, 1999 and will replace, as to grants after that date, the Company's
Amended and Restated Stock Option and Restricted Stock Purchase Plan, 1995 Stock
Option Plan and 1996 Stock Option Plan (the "Prior Plans"), and no further
grants will be made under the Prior Plans. As of September 17, 1999, options to
purchase 3,771,769 shares of Common Stock were outstanding and unexercised under
the Prior Plans, and 1,006,407 shares were available for future grants under the
Prior Plans.
Subject to limitations described below, the 1999 Plan authorizes
1,000,000 new shares of Common Stock plus (i) shares which are or become
available for future grant under the terms of the Prior Plans (including shares
subject to awards which are forfeited, cancelled or settled in cash) and (ii)
shares issued under the 1999 Plan in substitution for outstanding awards or
obligations to grant awards in connection with acquisitions of other entities by
the Company. The number of shares available under the Plan may be increased by
the Board by the number of shares purchased by the Company using amounts
equivalent to the cash proceeds received by the Company from the exercise of
stock options, after July 1, 1999, granted under the 1999 Plan or the Prior
Plans. In the event that any Awards expire or are terminated, the shares covered
by the expired or terminated Awards will again be available for the granting of
Awards.
SUMMARY OF THE 1999 PLAN
A copy of the 1999 Plan is attached to this Proxy Statement as Exhibit
B. The principal features of the 1999 Plan are summarized below.
The 1999 Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"). Under the 1999 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 under the Exchange Act and "Outside Directors"
as defined for purposes of Section 162(m) of the Code. The Committee will
determine (i) which officers and employees of the Company and its subsidiaries
shall be granted Awards; (ii) the number of shares subject to each Award; and
(iii) the types and terms and conditions of each Award. The Committee will also
be responsible for the administration and interpretation of the 1999 Plan. From
time to time, the Board may assume administration of the 1999 Plan.
The terms and conditions of individual Award agreements may vary,
subject to the following guidelines: (i) the option price of incentive and
non-qualified stock options, and the average exercise price of stock
appreciation rights, may not be less than the closing price on the most recent
day in which shares of Common Stock of the Company were traded prior to the date
of grant, and (ii) the term of all incentive stock options and stock
appreciation rights may not exceed ten years from the date of grant, and the
term of all non-qualified stock options may not exceed eleven years. Except in
cases of terminations of employment or extraordinary events, each Award (or its
cash equivalent) will be earned and vest over at least three years and will be
governed by conditions determined by the Committee, including continuous service
and/or achievement of performance goals.
The 1999 Plan provides that the maximum number of shares which may be
issued to any individual in the form of stock options and stock appreciation
rights cannot exceed the sum of (i) 1,500,000 shares during any consecutive
three calendar years and (ii) any portion of the 1,500,000 share limitation not
used in any three consecutive calendar year period starting July 1, 1999. The
maximum payment which can be made to any individual in the form of a stock award
(or its cash equivalent) subject to the achievement of performance goals is
$1,500,000. The maximum number of all Awards which may be granted in the form of
"incentive stock options" under the 1999 Plan, and the maximum number of all
shares which may be issued as stock awards under the 1999 Plan, are limited as
provided in the 1999 Plan. Grants of Awards are at the discretion of the
Committee and, thus, the amount of such grants, if any, are presently not
determinable. To date, no Awards have been granted.
The Board of Directors has the authority to amend the 1999 Plan at any
time, provided that stockholder approval will be 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), or to change the minimum
exercise price
for Awards.
15
<PAGE> 18
The Board of Directors may terminate the 1999 Plan at any time. The termination
of the 1999 Plan will not alter or impair any rights or obligations under any
Awards previously granted under the 1999 Plan. No Award granted under the Plan
may be assigned or transferred except by will or the laws of descent and
distribution and, if permitted by the Committee, as a gift to a family member or
a trust or similar entity for the benefit of one or more family members.
The market value of the Company's Common Stock as of the close of
business on September 17, 1999, as reflected by the closing price of the Common
Stock on the Nasdaq National Market, was $45.625 per share.
FEDERAL INCOME TAX CONSEQUENCES
(1) With respect to stock options: 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 1999 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 that 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 1999 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.
(2) With respect to stock awards: In the absence of an election by a
recipient, as explained below, the grant of a stock award which is subject to
forfeiture will not result in taxable income to the recipient or a deduction by
the Company in the year of grant. The value of such stock will be taxed to the
recipient in the year in which the risk of forfeiture lapses. Alternatively, a
recipient may elect to treat as income in the year of grant the fair market
value of the stock on the date of grant, provided that the election is made
within 30 days after the date of grant. If such an election were made, recipient
would not be allowed to deduct at a later date the amount included as taxable
income if the shares were forfeited to the Company. The amount of ordinary
income recognized by the recipient is generally deductible by the Company in the
year the income is recognized by the recipient.
(3) With respect to stock appreciation rights: Generally, when a person
exercises stock appreciation rights, the amount of cash received will be
ordinary income to such person and will be allowed as a deduction for
Federal income tax purposes to the Company.
16
<PAGE> 19
The discussion above pertaining to deductions for the Company is
qualified by the application of Section 162(m) of the Code. 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
other four most highly compensated officers of the Company 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 1999 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.
4. APPROVAL OF EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
On August 20, 1999, 1999, the Board of Directors adopted the Executive
Officer Annual Incentive Plan (the "Incentive Plan") to formalize the Company's
existing practices as to the payment of cash incentive compensation to executive
officers of the Company in the form of a plan which could be approved by
stockholders and thereby qualify annual cash incentive compensation payments for
favorable tax treatment under Section 162(m) of the Code. The purposes of the
Incentive Plan are to motivate and reward the Company's executive officers for
performance with cash incentive bonuses which are tax deductible to the Company
and to enable the Company to continue to attract, reward and retain executive
employees whose efforts are largely responsible for the Company's overall
success.
Annual cash incentive compensation awards paid under the Incentive Plan
are intended to qualify as performance-based compensation under Section 162(m).
Qualification under Section 162(m) is required to ensure the continued
deductibility of cash compensation to the chief executive officer and the other
four most highly compensated executive officers of the Company in amounts, if
any, exceeding $1 million per year. Pursuant to Section 162(m), terms of annual
incentive compensation arrangements pertaining to: (A) award eligibility, (B)
the performance criteria upon which awards will be determined and (C) the
individual annual maximum awards payable, must be approved by stockholders.
A copy of the Incentive Plan is attached to this Proxy Statement as
Exhibit C. The principal features of the Incentive Plan are summarized below.
A. PLAN ADMINISTRATION - The Incentive Plan is administered by
the Compensation Committee of the Board of Directors (the
"Committee"). The Committee must consist of two or more
persons, each of whom shall be "Outside Directors" as defined
for purposes of Section 162(m).
B. AWARD ELIGIBILITY - The Incentive Plan applies to the
Company's chief executive officer and any other executive
officer whose compensation is subject to Section 162(m).
C. PERFORMANCE CRITERIA - Annual incentive compensation shall be
based on one or more of the following performance criteria
designated by the Committee, all of which may be determined at
either the corporate (consolidated) level, subsidiary or
business unit level, or by comparison to the performance of
other companies, depending on the affected executive officer:
- operating profits (including EBITDA)
- net profits
- earnings per share
- profit returns and margins
- revenues
- stock price
- cash flow
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The performance goals established by the Committee from among
those described above may be (but need not be) different each
fiscal year and different goals may be applicable to different
executive officers. The performance goals shall satisfy the
requirements for "qualified performance-based compensation"
under Section 162(m).
D. MAXIMUM ANNUAL INCENTIVE AWARD - For any person subject to
Section 162(m), the maximum non-discretionary annual incentive
payment that can be made for any taxable year is $2,500,000.
E. PAYMENT DEFERRALS - The Committee may defer the payment of all
or a portion of any payment earned under the Incentive Plan in
cash, mutual fund accounts or common stock units, provided
that the same does not cause the eventual payments to be
nondeductible under Section 162(m).
The Committee may amend the terms of annual incentive awards at any
time and may terminate or curtail the awards; provided, however, that no
amendment or termination of annual incentive awards shall adversely affect any
annual incentive awarded to a participant with respect to prior fiscal years. In
1999, if stockholders had approved the material terms and conditions of the
annual incentive awards outlined above, the amount of annual incentive
compensation reported in the Summary Compensation Table would have been the
same.
VOTE REQUIRED FOR APPROVAL
Approval of the Incentive Plan, including the terms and conditions of
annual incentive compensation awards described above, will require the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE INCENTIVE PLAN FOR PURPOSES OF THE DEDUCTIBILITY OF THE
INCENTIVE COMPENSATION UNDER SECTION 162(m) OF THE CODE.
5. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of PricewaterhouseCoopers
LLP, independent public accountants, as the auditors of the Company for the
fiscal year ending June 30, 2000, subject to the ratification of such
appointment by stockholders at the Annual Meeting. This firm and Coopers &
Lybrand L.L.P. (which merged with Price Waterhouse LLP in 1998 to form
PricewaterhouseCoopers LLP) have audited the Company's financial statements
since the Company's inception in 1989.
If the foregoing appointment of PricewaterhouseCoopers LLP is not
ratified by stockholders, the Board of Directors will appoint other independent
accountants whose appointment for any period subsequent to the 1999 Annual
Meeting of Stockholders will be subject to the approval of stockholders at that
meeting. A representative of PricewaterhouseCoopers LLP will be present at the
Annual Meeting and will have an opportunity to make a statement should he so
desire and to respond to appropriate questions.
VOTE REQUIRED FOR RATIFICATION
The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
the auditors of the Company for fiscal 2000 must be approved by the affirmative
vote of the holders of a majority of the shares of Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF THE FIRM OF PRICEWATERHOUSECOOPERS
LLP.
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<PAGE> 21
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,
1999 is being mailed to stockholders together with this Proxy Statement.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form will be
borne by the Company, including expenses in connection with preparing and
mailing this Proxy Statement. In addition to solicitation of proxies by mail,
directors, officers and employees of the Company (who will receive no additional
compensation therefor) and Corporate Investors Communications, Inc. a proxy
solicitor (for an estimated total cost to the Company of $4,500) may solicit the
return of proxies by telephone, telegram or personal interview. Arrangements
have also been made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial owners
of stock held of record by such persons, and the Company will reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
Each holder of the Company's Common Stock who does not expect to be
present at the Annual Meeting or who plans to attend but who does not wish to
vote in person is urged to fill in, date and sign the proxy and return it
promptly in the enclosed return envelope.
STOCKHOLDER PROPOSALS
If any stockholder of the Company intends to present a proposal for
consideration at the 2000 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 7, 2000.
DISCRETIONARY AUTHORITY
A duly executed proxy given in connection with the Company's Annual
Meeting of Stockholders in 2000 will give each of the proxies named therein
discretionary authority to vote on any matter of which the Company does not have
written notice on or before August 21, 2000 (forty-five days prior to the
anniversary date on which the Company is first mailing its proxy materials for
its 1999 Annual Meeting), without advice as to the nature of such matter in the
Company's 2000 Proxy Statement.
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, 1999, 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 17, 1999, THE RECORD DATE FOR THE
ANNUAL MEETING OF STOCKHOLDERS. REQUESTS AND INQUIRIES SHOULD BE ADDRESSED TO
THE BISYS GROUP, INC., 150 CLOVE ROAD, LITTLE FALLS, NEW JERSEY 07424,
ATTENTION: SECRETARY.
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EXHIBIT A
THE BISYS GROUP, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE. The purpose of The BISYS Group, Inc. 2000 Employee
Stock Purchase Plan (the "Plan") is to promote the interests of The BISYS Group,
Inc., a Delaware corporation (the "Company") and any Subsidiary thereof (as
hereinafter defined), and its stockholders by providing an opportunity to
certain current employees of the Company or any Subsidiary thereof to purchase
Common Stock of the Company. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate such employees and to encourage such
employees to devote their best efforts to the business and financial success of
the Company. It is intended that the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423.
SECTION 2. DEFINITIONS. For purposes of this Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context.
2.01. "Base Pay" shall be determined as of the first business day of
December 1999 by multiplying the normal biweekly rate of a salaried Employee by
26 or the hourly rate of an hourly Employee by 2,080; provided, that, in the
case of a part-time hourly Employee, the Employee's Base Pay shall be determined
by multiplying such Employee's hourly rate by the number of regularly scheduled
hours of work for such Employee during the one-year period beginning on the
first business day of December 1999. The calculation of Base Pay shall be made
without regard to payments for overtime, shift premium, bonuses and other
special payments, commissions and other marketing incentive payments.
2.02. "Board of Directors" shall mean the Board of Directors of the
Company.
2.03. "Committee" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.04. "Common Stock" shall mean the Common Stock, $.02 par value, of
the Company.
2.05. "Employee" shall mean any person, including an officer or
director of the Company or a Subsidiary of the Company, who is customarily
employed on a full-time or part-time basis by the Company or a Subsidiary of the
Company and is regularly scheduled to work at least 20 hours per week.
2.06. "Offering" shall have the meaning described in Section 4.01.
2.07. "Option" shall mean any option to purchase Common Stock granted
to an Employee pursuant to this Plan.
2.08. "Participant" shall mean any Employee that is eligible to
participate in the Plan and who elects to participate in the Plan.
2.09. "Parent of the Company" shall have the meaning set forth in
Section 424(e) of the Code.
2.10. "Subsidiary of the Company" shall have the meaning set forth in
Section 424(f) of the Code.
SECTION 3. ELIGIBILITY AND PARTICIPATION. The following provisions
shall govern the eligibility of Employees to participate in the Plan.
3.01. Initial Eligibility. Any Employee who shall have completed one
(1) month of employment as of January 1, 2000 shall be eligible to participate
in the Offering.
<PAGE> 23
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) $25,000 or (ii)
15% of the Employee's Base Pay of fair market value of the stock (determined at
the time such Option is granted) for each calendar year in which such Option is
outstanding; or
(3) if the exercise of such Option would result in the
Employee acquiring a cumulative total of more than 700 shares of Common Stock
under the Plan.
3.03. Commencement of Participation. An eligible Employee may become a
Participant in the Plan by completing an authorization for a payroll deduction
on the form provided by the Company and filing it with the office of the Senior
Vice President of Human Resources of the Company on or before the date set
therefor by the Committee which date shall be prior to January 1, 2000. Payroll
deductions shall be made from a Participant's 2000 Base Pay and shall commence
on the first regularly scheduled payday after January 1, 2000 and shall
terminate on the last regularly scheduled payday on or before December 31, 2000,
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, 2000 and shall terminate on December 31,
2000.
4.02. Reissuance. The shares of Common Stock that may be subject to
Options granted under this Plan may be either authorized and unissued shares or
shares reacquired at any time and now or hereafter held as treasury stock, as
the Committee may determine. In the event that any outstanding Option expires or
is terminated for any reason, the shares allocable to the unexercised portion of
such Option may again be subject to an Option granted under this Plan.
SECTION 5. ADMINISTRATION OF THE PLAN.
5.01. Committee. The Plan shall be administered by a committee (the
"Committee") which shall be established by the Board of Directors and shall
consist of no less than two persons. All members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934. The Committee shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors.
5.02. Interpretation. The Committee shall be authorized (i) to
interpret the Plan and decide any matters arising thereunder and (ii) to adopt
such rules and regulations, not inconsistent with the provisions of the Plan, as
it may deem advisable to carry out the purpose of this Plan.
5.03. Finality. The interpretation and construction by the Committee of
any provision of the Plan, any Option granted hereunder or any agreement
evidencing any such Option shall be final and conclusive upon all parties.
5.04. Voting by Committee Members. Only members of the Committee shall
vote on any matter affecting
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<PAGE> 24
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 from 1 to 15% of his Base Pay, as
determined as of the first business day of December 1999.
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, 2000, each Participant shall be deemed to have been
granted an Option, subject to the limitations of Section 3.02, to purchase a
maximum number of shares of Common Stock equal to the number obtained by
multiplying (i) the percentage of the Employee's Base Pay which he has elected
to have withheld pursuant to Section 6.01 by (ii) the Employee's Base Pay and
dividing the resulting product by the lesser of (y) 85% of the fair market value
of a share of Common Stock of the Company on January 1, 2000, based upon the
closing price of the Common Stock on the Nasdaq National Market on December 31,
1999 and (z) 85% of the fair market value of a share of Common Stock of the
Company on December 31, 2000, based upon the closing price of the Common Stock
on the Nasdaq National Market on December 31, 2000; 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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<PAGE> 25
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, 2000, based upon the closing price of the Common
Stock on the Nasdaq National Market on December 31, 1999; or
(b) 85% of the fair market value of the shares of Common Stock subject
to the Option on December 31, 2000, based upon the closing price of the Common
Stock on the Nasdaq National Market on December 31, 2000.
7.04. Fair Market Value. For purposes of this Plan, the fair market
value per share of Common Stock as of any day shall mean the closing price as
quoted on the Nasdaq system on such day or, if such day is not a trading day,
the last preceding trading day. If at any time the Common Stock is not quoted in
the Nasdaq system, the fair market value of the shares of Common Stock subject
to an Option on the date the Option is granted shall be the fair market value
thereof determined in good faith by the Board of Directors.
7.05. Interest in Option Stock. A Participant shall have no interest in
shares of Common Stock covered by his Option until such Option has been
exercised.
7.06. Transferability. Neither payroll deductions credited to a
Participant's account nor Options shall be transferable otherwise than by will
or the laws of descent and distribution, and, during an Optionee's lifetime, an
Option shall be exercisable only by the Optionee.
7.07 Tax Withholding. In the event that the Company or any Parent or
Subsidiary of the Company is required to withhold any Federal, state or local
taxes in respect of any compensation income realized by the Participant as a
result of any "disqualifying disposition" of any shares of Common Stock acquired
upon exercise of an Option granted hereunder, the Company shall be entitled to
deduct from any payments of any kind otherwise due to such Participant the
aggregate amount of such Federal, state or local taxes required to be so
withheld or, if such payments are insufficient to satisfy such Federal, state or
local taxes, such Participant will be required to pay to the Company, or make
other arrangements satisfactory to the Company regarding payment to the Company
of, the aggregate amount of any such taxes. All matters with respect to the
total amount of taxes to be withheld in respect of any such compensation income
shall be determined by the Committee in its sole discretion.
SECTION 8. EXERCISE OF OPTIONS.
8.01. Automatic Exercise. Unless a Participant gives written notice to
the Company of withdrawal pursuant to Section 9.01, his Option to acquire Common
Stock with payroll deductions made during any Offering will be deemed to have
been exercised automatically on December 31, 2000 for the purchase of the number
of full shares of Common Stock which the accumulated payroll deductions in his
account at that time will purchase at the applicable Option price (but not in
excess of the number of shares of Common Stock for which Options have been
granted to the Employee pursuant to Section 7.02), and any excess in his account
at that time will be returned to him.
8.02. Fractional Shares. Fractional shares will not be issued under the
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be returned to any Employee promptly following
the termination of the Offering.
8.03. Delivery of Stock. As promptly as practicable after December 31,
2000, 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 Executive Vice President of Human Resources of the Company. All of the
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<PAGE> 26
Participant's payroll deductions credited to his account will be paid to him
within 30 days after receipt of his notice of withdrawal, and no further payroll
deductions will be made from his pay; provided, that, the Participant gives
notice of withdrawal sufficiently prior to the next scheduled payroll deduction.
9.02. Cessation of Employee Status. In the event a Participant shall
cease to be an Employee, as defined in Section 2.05, for any reason, other than
as a result of his death, the payroll deductions credited to his account will be
returned to him.
9.03. Termination Due to Death. In the event a Participant shall cease
to be an Employee, as defined in Section 2.05, by reason of his death, his legal
representative shall have the right to elect, by written notice given to the
Executive Vice President of Human Resources of the Company prior to December 31,
2000 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, 2000 for the purchase of
the number of full shares of Common Stock which the accumulated payroll
deductions in the Participant's account will purchase at the applicable Option
price, and any excess in such account will be returned to the Participant's
legal representative.
In the event that no such written notice of election shall be duly
received by the office of the Executive Vice President of Human Resources of the
Company, the Participant's legal representative shall automatically be deemed to
have elected, pursuant to paragraph (b), to exercise the Participant's Option.
SECTION 10. ADJUSTMENTS.
(a) In the event that after the adoption of the Plan by the Board of
Directors, the outstanding shares of the Company's Common Stock shall be
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another
corporation through reorganization, merger or consolidation, recapitalization,
reclassification, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in Common Stock, the Board of Directors
shall appropriately adjust (i) the number of shares of Common Stock (and the
Option price per share) subject to the unexercised portion of any outstanding
Option (to the nearest possible full share); provided, however, that the
limitations of Section 424 of the Code shall apply with respect to such
adjustments; (ii) the number of shares of Common Stock for which Options may be
granted under this Plan, as set forth in Section 4.01 hereof, and such
adjustment shall be effective and binding for all purposes of this Plan.
(b) Notwithstanding the foregoing, in the event of (i) any offer to
holders of the Company's Common Stock generally relating to the acquisition of
their shares, including, without limitation, through purchase, merger or
otherwise, or (ii) any transaction generally relating to the acquisition of
substantially all of the assets or business of the Company, the Board of
Directors may make such adjustment as it deems equitable in respect of
outstanding Options including, without limitation, the revision or cancellation
of any outstanding Options. Any such determination by the Committee shall be
effective and binding for all purposes of this Plan.
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
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<PAGE> 27
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, 2000, 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, 1999. If the Plan is not so
approved, the Plan shall not become effective.
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<PAGE> 28
EXHIBIT B
THE BISYS GROUP, INC.
1999 EQUITY PARTICIPATION PLAN
1. THE PLAN
a) Purpose. The BISYS Group Inc. 1999 Equity Participation Plan (the "Plan") is
intended to benefit the stockholders of The BISYS Group, Inc. (the "Company") by
providing a means to attract, retain and reward individuals who can and do
contribute to the longer term financial success of the Company. Further, the
recipients of stock-based awards under the Plan should identify their success
with that of the Company's stockholders and therefore will be encouraged to
increase their proprietary interest in the Company and to devote their best
efforts to the Company's business.
b) Effective Date. To serve this purpose, the Plan will become effective upon
its approval by the stockholders of the Company at its 1999 Annual Meeting of
Stockholders.
2. ADMINISTRATION
a) Committee. The Plan shall be administered by a committee, appointed by the
Board of Directors of the Company (the "Board"), which shall consist of no less
than two of its members, all of whom shall be "Non-Employee Directors" within
the meaning of Section 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and "Outside Directors" as defined for purposes of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Committee");
provided, however, that from time to time the Board may assume, at its sole
discretion, administration of the Plan. Except with regard to awards to
employees subject to Section 16 of the Exchange Act, the Committee may delegate
certain responsibilities and powers to any executive officer or officers
selected by it. Any such delegation may be revoked by the Committee at any time.
b) Powers and Authority. The Committee's powers and authority include, but are
not limited to: selecting individuals, who are employed by or perform services
for the Company and any subsidiary of the Company or any other entity in which
the Company has a significant equity or other interest as determined by the
Committee, to receive awards; determining the types and terms and conditions of
all awards granted, including performance and other earn out and/or vesting
contingencies; permitting transferability of awards to eligible third parties;
pursuant to Section 8(a) interpreting the Plan's provisions; and administering
the Plan in a manner that is consistent with its purpose. The Committee's
decision in carrying out the Plan and its interpretation and construction of any
provisions of the Plan or any award granted or agreement or other instrument
executed under it shall be final and binding upon all persons. No members of the
Board shall be liable for any action or determination made in good faith in
administering the Plan.
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3. SHARES SUBJECT TO THE PLAN AND ADJUSTMENTS
a) Maximum Shares Available for Delivery. Subject to adjustments under Section
3(d), the number of shares of Common Stock of the Company ("Shares") that may be
delivered to participants and their beneficiaries under the Plan shall include
the sum of (i) 1,000,000; (ii) any Shares, as of the effective date of this
Plan, available for future awards under The BISYS Group Inc. Amended and
Restated Stock Option and Restricted Stock Purchase Plan, The BISYS Group Inc.
1995 Stock Option Plan and The BISYS Group Inc. 1996 Stock Option Plan
(collectively the "Prior Plans"); and (iii) any Shares that are represented by
awards granted under the Prior Plans, which are forfeited, expire or are
canceled without the delivery of Shares or which result in the forfeiture of
Shares back to the Company. In addition, any Shares delivered under the Plan or
the Prior Plans which are forfeited back to the Company because of the failure
to meet an award contingency or condition shall again be available for delivery
pursuant to new awards granted under the Plan. Any Shares covered by an award
(or portion of an award) granted under the Plan or the Prior Plans, which is
forfeited or canceled, expires or is settled in cash, including the settlement
of tax withholding obligations using Shares, shall be deemed not to have been
delivered for purposes of determining the number of Shares available for
delivery under the Plan. If any stock option is exercised by tendering Shares,
either actually or by attestation, to the Company as full or partial payment for
such exercise under this Plan or the Prior Plans, only the number of Shares
issued net of the Shares tendered shall be deemed delivered for purposes of
determining the maximum number of Shares available for delivery under the Plan.
Likewise, if Shares are used to settle tax withholding obligations arising from
awards made under the Prior Plans, only the number of Shares issued net of tax
withholding will be deemed delivered for purposes of determining the number of
Shares available for delivery under the Plan. Further, Shares issued under the
Plan through the settlement, assumption or substitution of outstanding awards or
obligations to grant future awards as a condition of the Company acquiring
another entity shall not reduce the number of Shares available for delivery
under the Plan. In addition, shares available for delivery in settlement of
awards under the Plan may be increased by the Board by the number of shares
purchased or acquired by the Company using amounts equivalent to the cash
proceeds received by the Company from the exercise of stock options, occurring
after July 1, 1999, granted under the Plan or the Prior Plans.
b) Other Plan Limits. Subject to adjustment under Section 3(d), the following
additional maximums are imposed under the Plan. The maximum number of Shares
that may be issued in connection with stock options intended to comply with
Section 422 or any other similar provision of the Internal Revenue Code
("incentive stock options") shall be 4,000,000. The maximum number of Shares
that may be issued in conjunction with stock awards granted pursuant to Section
5(d) shall be 1,000,000, plus up to twenty-five percent (25%) of any shares
reacquired by the Company pursuant to the last sentence of Section 3(a). The
maximum aggregate number of Shares that may be covered by awards granted to any
one individual pursuant to Sections 5(b) and 5(c) shall not exceed the sum of
(i) 1,500,000 during any consecutive three calendar years, and (ii) any
portion(s) of this 1,500,000-share limitation not utilized in any prior three
consecutive calendar year period commencing on July 1, 1999. The maximum payment
that can be made for awards granted to any one individual pursuant to Section
5(d) shall be $1,500,000 for any single or combined
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performance goals established for a specified performance period. If a payment
under Section 5(d) is made in Shares, the value of such Shares for determining
this maximum individual payment amount will be the closing price of a Share on
the first day of the applicable performance period. A specified performance
period for purposes of this performance goal payment limit shall not exceed a
sixty (60) consecutive month period.
c) Payment Shares. Subject to the overall limitation on the number of Shares
that may be delivered under the Plan, the Committee may, in addition to granting
awards under Section 5, use available Shares as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company, including those of any entity acquired by the
Company.
d) Adjustments for Corporate Transactions.
(i) The Committee may determine that a corporate transaction has
affected the price per Share such that an adjustment or adjustments to
outstanding awards are required to preserve (or prevent enlargement of) the
benefits or potential benefits intended at time of grant. For this purpose a
corporate transaction will include, but is not limited to, any stock dividend,
stock split, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination or exchange of shares, or
other similar occurrence. In the event of such a corporate transaction, the
Committee may, in such manner as the Committee deems equitable, adjust (i) the
number and kind of shares which may be delivered under the Plan pursuant to
Sections 3(a) and 3(b); (ii) the number and kind of shares subject to
outstanding awards; and (iii) the exercise price of outstanding stock options
and stock appreciation rights.
(ii) In the event that the Company is not the surviving company of a
merger, consolidation or amalgamation with another company, or in the event of a
liquidation or reorganization of the Company, and in the absence of the
surviving corporation's assumption of outstanding awards made under the Plan,
the Committee may provide for appropriate adjustments and/or settlements of such
grants either at the time of grant or at a subsequent date. The Committee may
also provide for adjustments and/or settlements of outstanding awards as it
deems appropriate and consistent with the Plan's purpose in the event of any
other change-in-control of the Company.
4. PER SHARE PRICE
For all awards made under the Plan the per Share price shall be the last sale
price of a share of the Common Stock of the Company ("Share") on the most recent
day on which shares were traded prior to the grant or other applicable date as
determined by the Committee. The applicable date in the case of a stock option
or stock appreciation right granted retroactively in tandem with or as a
substitution for another previously granted stock option or stock appreciation
right may be the grant date for such prior award. Except as provided for in
Section 3(d), the per Share exercise price of any stock option or stock
appreciation right may not be decreased after the grant of the award and a stock
option or stock appreciation right may not be surrendered as consideration in
exchange for the grant of a new award with a lower per Share exercise price.
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5. TYPES OF AWARDS
a) General. An award may be granted singularly, in combination with another
award(s) or in tandem whereby exercise or vesting of one award held by a
participant cancels another award held by the participant. Subject to the
limitations of Section 4, an award may be granted as an alternative to or
replacement of an existing award under the Plan, the Prior Plans or under any
other compensation plans or arrangements of the Company, including the plan of
any entity acquired by the Company. The types of awards that may be granted
under the Plan include:
b) Stock Option. A stock option represents a right to purchase a specified
number of Shares during a specified period at a price per Share which is no less
than one hundred percent (100%) of the per Share amount stipulated by Section 4.
A stock option may be in the form of an incentive stock option or in another
form which may or may not qualify for favorable federal income tax treatment.
Each stock option shall expire on the applicable date designated by the
Committee but in no event may such date be more than eleven years (ten years for
incentive stock options) from the date the stock option is granted. The Shares
covered by a stock option may be purchased by means of a cash payment or such
other means as the Committee may from time-to-time permit, including (i)
tendering (either actually or by attestation) Shares valued using the market
price at the time of exercise, (ii) authorizing a third party to sell Shares (or
a sufficient portion thereof) acquired upon exercise of a stock option and to
remit to the Company a sufficient portion of the sale proceeds to pay for all
the Shares acquired through such exercise and any tax withholding obligations
resulting from such exercise; using a loan or loans authorized by the Board for
such purposes; or (iv) any combination of the above.
c) Stock Appreciation Right. A stock appreciation right is a right to receive a
payment in cash, Shares or a combination, equal to the excess of the aggregate
market price at time of exercise of a specified number of Shares over the
aggregate exercise price of the stock appreciation right being exercised. The
longest term a stock appreciation right may be outstanding shall be ten years.
Such exercise price shall be no less than one hundred percent (100%) of the per
Share amount stipulated by Section 4.
d) Stock Award. A stock award is a grant of Shares or of a right to receive
Shares (or their cash equivalent or a combination of both) in the future. Except
in cases of certain terminations of employment or an extraordinary event, each
stock award shall be earned and vest over at least three years and shall be
governed by such conditions, restrictions and contingencies as the Committee
shall determine. These may include continuous service and/or the achievement of
performance goals. The performance goals that may be used by the Committee for
such awards shall consist of: operating profits (including EBITDA), net profits,
earnings per share, profit returns and margins, revenues, shareholder return
and/or value, stock price, cash flow and working capital. Performance goals may
be measured solely on a corporate, subsidiary or business unit basis, or a
combination thereof. Further, performance criteria may reflect absolute entity
performance or a relative comparison of entity performance to the performance of
a peer group of entities or other external measure of the selected performance
criteria. Profit, earnings and revenues used for any
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performance goal measurement shall exclude: gains or losses on operating asset
sales or dispositions; asset write-downs; litigation or claim judgments or
settlements; accruals for historic environmental obligations; effect of changes
in tax law or rate on deferred tax liabilities; accruals for reorganization and
restructuring programs; uninsured catastrophic property losses; the cumulative
effect of changes in accounting principles; and any extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management's discussion and analysis of financial performance appearing in the
Company's annual report to shareholders for the applicable year.
6. AWARD SETTLEMENTS AND PAYMENTS
a) Dividends and Dividend Equivalents. An award may contain the right to receive
dividends or dividend equivalent payments which may be paid either currently or
credited to a participant's account. Any such crediting of dividends or dividend
equivalents or reinvestment in Shares may be subject to such conditions,
restrictions and contingencies as the Committee shall establish, including the
reinvestment of such credited amounts in Share equivalents.
b) Payments. Awards may be settled through cash payments, the delivery of
Shares, the granting of awards or combination thereof as the Committee shall
determine. Any award settlement, including payment deferrals, may be subject to
such conditions, restrictions and contingencies as the Committee shall
determine. The Committee may permit or require the deferral of any award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred Share equivalents.
c) Tax Withholding. The Company shall have the right to deduct from any
settlement of an award made under the Plan, including the delivery of shares,
amounts sufficient to satisfy withholding required by law for any federal, state
or local taxes or to take such other action as may be necessary to satisfy any
such withholding obligations. The Committee may permit Shares to be tendered,
either actually or by attestation, to satisfy tax withholding obligations and
such shares shall be valued using the settlement date as the applicable date in
accordance with Section 4.
7. PLAN AMENDMENT AND TERMINATION
a) Amendments. The Board may amend this Plan as it deems necessary and
appropriate to better achieve the Plan's purpose provided, however, that: (i)
the Share and other award limitations set forth in Sections 3(a) and 3(b) cannot
be increased and (ii) the minimum stock option and stock appreciation right
exercise prices set forth in Sections 4 and 5(b) and (c) cannot be changed
unless such a plan amendment is properly approved by the Company's stockholders.
b) Plan Suspension and Termination. The Board may suspend or terminate this Plan
at any time. Any such suspension or termination shall not of itself impair any
outstanding award granted under the Plan or the applicable participant's rights
regarding such award.
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8. MISCELLANEOUS
a) Assignability. Except by will or the laws of descent and distribution and, if
permitted by the Committee, as a gift to a family member or a trust or similar
entity for the benefit of one or more family members, no award granted under the
Plan shall be assignable or transferrable.
b) No Individual Rights. No person shall have any claim or right to be granted
an award under the Plan. Neither the Plan nor any action taken hereunder shall
be construed as giving any employee or other person any right to continue to be
employed by or to perform services for the Company, any subsidiary or related
entity. The right to terminate the employment of or performance of services by
any Plan participant at any time and for any reason is specifically reserved to
the employing entity.
c) Unfunded Plan. The Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds. The Plan shall not
establish any fiduciary relationship between the Company and any participant or
beneficiary of a participant. To the extent any person holds any obligation of
the Company by virtue of an award granted under the Plan, such obligation shall
merely constitute a general unsecured liability of the Company and accordingly
shall not confer upon such person any right, title or interest in any assets of
the Company.
d) Use of Proceeds. Any proceeds from the exercise of stock options or other
sales of shares under the Plan shall constitute general funds of the Company.
e) Other Benefit and Compensation Programs. Unless otherwise specifically
determined by the Committee, settlements of awards received by participants
under the Plan shall not be deemed a part of a participant's regular, recurring
compensation for purposes of calculating payments or benefits from any Company
benefit plan or severance program. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate.
f) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any award, and the Committee shall determine whether
cash shall be paid or transferred in lieu of any fractional Shares, or whether
such fractional Shares or any rights thereto shall be canceled.
g) Governing Law. The validity, construction and effect of the Plan and any
award, agreement or other instrument issued under it shall be determined in
accordance with the laws of the state of New York without reference to
principles of conflict.
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EXHIBIT C
THE BISYS GROUP, INC.
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
1. PURPOSE
The purpose of The BISYS Group, Inc. Executive Officer Annual Incentive
Plan (the "Plan") is to motivate and reward for performance with tax deductible
payments to those executive officers of The BISYS Group, Inc. (the "Company")
subject to Section 162(m) of the Internal Revenue of 1986, as amended, and to
the regulations and rulings promulgated thereunder (the "Code").
2. EFFECTIVE DATE
The Plan shall be effective for the Company's 2000 fiscal year and each
subsequent fiscal year, until terminated by the Board of Directors (the
"Board"), provided that the Plan is approved by the stockholders of the Company
at its 1999 Annual Meeting of Stockholders.
3. PARTICIPANTS
The individuals who may receive payments under the Plan based on
performance for any fiscal year while the Plan is in effect shall be those
persons employed by the Company at the end of each such fiscal year who
constitute the Company's chief executive officer and any other highly
compensated executive officer which may be subject to the scope of Code Section
162(m).
4. COMMITTEE ADMINISTRATION
The Plan shall be administered by a committee consisting of at least
two non-employee directors, each of whom satisfies the requirements for an
"outside director" as that term is defined under Code Section 162(m). The
Committee shall have the sole authority and discretion to administer and
interpret the Plan in good faith to satisfy the requirements for tax
deductibility of payments in accordance with Code Section 162(m). Such authority
includes selection of the performance criterion or criteria for any applicable
fiscal year and any affected individual participant. Decisions of the Committee
shall be final, conclusive and binding on all parties including the Company, its
stockholders and participants, and their beneficiaries and heirs.
5. PERFORMANCE CRITERIA
The Committee shall select the performance criterion or criteria for
any individual position for any fiscal
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year during the first fiscal quarter of such year and the formula or formulas
for determining the amount of payment that the Committee may award for
performance during such year. The performance criteria which the Committee may
use are: operating profits (including EBITDA), net profits, earnings per share,
profit returns and margins, revenues, stock price and cash flow. Performance
criteria may be measured solely on a corporate, subsidiary or business unit
basis, or a combination thereof. Further, performance criteria may reflect
absolute entity performance or a relative comparison of entity performance to
the performance of a peer group of entities or other external measure of the
selected performance criteria. Profit, earnings and revenues used for any
performance criteria measurements shall exclude: gains or losses on operating
asset sales or dispositions; asset write downs; litigation or claim judgments or
settlements; accruals for historic environmental obligations; effect of changes
in tax law or rate on deferred tax liabilities; accruals for reorganization and
restructuring programs; uninsured catastrophic property losses; the cumulative
effect of changes in accounting principles; and any extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management's discussion and analysis of financial performance appearing in the
Company's annual report to shareholders for the applicable year.
6. PERFORMANCE GOALS
Prior to the end of the first quarter of each fiscal year the Plan is
in effect, the Committee shall establish in writing the performance goals, based
on one or more of the performance criteria set forth in Section 4, and payment
schedules or formulas tied to such goals for the individuals described in
Section 3.
7. PAYMENTS
The Committee must certify in writing the attainment of the applicable
performance goals before making any payments for the applicable performance
year. The Committee, at its sole discretion, may reduce the amount of payment
below that determined using the applicable payment schedule(s) or formula(s) for
a given participant. No participant may receive an aggregate payment for a
fiscal year's performance in excess of $2,500,000. Payments under the Plan shall
be made in cash.
8. PAYMENT DEFERRALS
The Committee may mandate and/or provide for the deferral of all or a
portion of any payment earned under the Plan. Deferred payment accounts may be
denominated in: cash amounts with the crediting of interest; phantom mutual fund
accounts; or common stock unit accounts, provided that any crediting of interest
or dividend equivalents shall not cause the eventual payment to be nondeductible
under Code Section 162(m) as determined in good faith by the Committee at the
time of such crediting.
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9. PLAN AMENDMENT
The Board may amend or otherwise modify the Plan from time to time as
it deems appropriate to serve the Plan's purposes. However, the Board shall note
amend the Plan, without the appropriate approval of stockholders of the Company,
if such amendment would result in payments not qualifying for deductibility
under Code Section 162(m) as determined by the Board in good faith.
10. OTHER INCENTIVE PLANS
The Board may provide that persons specified in Section 3 may
participate in and receive payments under other incentive compensation plans,
programs and arrangements maintained by the Company as it deems appropriate and
necessary.
11. GOVERNING LAW
The validity, construction and effect of the Plan and any agreements or
other instruments issued under it shall be determined in accordance with the
laws of the state of New York without reference to the principles of conflict of
laws.
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THE BISYS GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders
Friday, November 12, 1999
The undersigned stockholder of THE BISYS GROUP, INC., a Delaware
corporation, hereby appoints Dennis R. Sheehan and Kevin J. Dell, or either of
them, voting singly in the absence of the other, attorneys and proxies, with
full power of substitution and revocation, to vote, as designated below, all
shares of Common Stock of The BISYS Group, Inc., that the undersigned is
entitled to vote at the Annual Meeting of Stockholders of said corporation to be
held at 150 Clove Road, Little Falls, New Jersey 07424 on November 12, 1999, at
9:00 a.m. (local time) and at any adjournment thereof, in accordance with the
instructions on the reverse side.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3,
NO. 4 AND NO. 5. The proxies are authorized to vote as they may determine in
their discretion upon such other business as may properly come before the
meeting or any adjournment thereof.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
USING THE ENCLOSED ENVELOPE.
THE BISYS GROUP, INC.
P. O. BOX 11357
NEW YORK, NY 10203-0357
<PAGE> 38
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN PROPOSAL NO. 1
AND "FOR" PROPOSALS NO. 2, NO. 3, NO. 4 AND NO. 5.
1. Election of Directors: FOR all nominees listed below _______
*WITHHOLD AUTHORITY to vote for all nominees listed below ______
*EXCEPTIONS _____
Nominees: Lynn J. Mangum, Robert J. Casale, Thomas A. Cooper, Jay W.
DeDapper, John J. Lyons, Thomas E. McInerney, and Joseph J.
Melone
(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 2000 Employee Stock Purchase Plan.
FOR ___ AGAINST ___ ABSTAIN ___
3. The proposal to approve the Company's 1999 Equity Participation Plan.
FOR ___ AGAINST ___ ABSTAIN ___
4. The proposal to approve the Company's Executive Officer Annual Incentive
Plan.
FOR ___ AGAINST ___ ABSTAIN ___
5. The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
auditors of the Company for the fiscal year ending June 30, 2000.
FOR ___ AGAINST ___ ABSTAIN ___
The proxies are authorized to vote as they may determine in their
discretion upon such other business as may properly come before the meeting
or any adjournment thereof.
Change of Address and
or Comments Mark Here ___
Please sign exactly as name appears hereon. When shares are held in name of
joint holders, each should sign. When signing as attorney, executor,
trustee, guardian, etc., please so indicate. If a corporation, please sign
in full corporate name by an authorized officer. If a partnership, please
sign in partnership name by an authorized person.
Date __________________________________________________________, 1999
Signature ___________________________________________________________
Signature (if held jointly) _________________________________________
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. ___
