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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MAY 31, 2000
COMMISSION FILE NUMBER 0-11330
PAYCHEX, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 16-1124166
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
911 PANORAMA TRAIL SOUTH, ROCHESTER, NEW YORK 14625-0397
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (716) 385-6666
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE
(Title of Class)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ].
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO
THIS FORM 10-K. [X].
AS OF JULY 31, 2000, SHARES HELD BY NON-AFFILIATES OF THE REGISTRANT HAD AN
AGGREGATE MARKET VALUE OF $14,515,479,000.
AS OF JULY 31, 2000, 372,214,246 SHARES OF THE REGISTRANT'S COMMON STOCK, $.01
PAR VALUE, WERE OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
CERTAIN SPECIFIED PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO STOCKHOLDERS
FOR THE FISCAL YEAR ENDED MAY 31, 2000 (THE "ANNUAL REPORT") IN RESPONSE TO
PART II, ITEMS 5 THROUGH 8, INCLUSIVE.
CERTAIN SPECIFIED PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT DATED
AUGUST 28,2000, IN RESPONSE TO PART III, ITEMS 10 THROUGH 12, INCLUSIVE.
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Paychex, Inc. (the "Company" or "Paychex"), is a national provider of payroll,
human resource, and employee benefit outsourcing solutions for small- to
medium-sized businesses. Paychex, a Delaware corporation, was formed in 1979
through the consolidation of 17 corporations engaged in providing computerized
payroll accounting services. The Company has corporate headquarters in
Rochester, New York and more than 100 offices nationwide. The Company's fiscal
year is from June 1 through May 31.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company has two reportable business segments - Payroll and Human Resource
Services - Professional Employer Organization (HRS-PEO). Financial information
about the Company's business segments is contained in Note B - Segment
Financial Information in the Notes to Consolidated Financial Statements
contained in Exhibit 13, Portions of the Annual Report to Stockholders for the
fiscal year ended May 31, 2000 (the "Annual Report"), which are incorporated
herein by reference.
NARRATIVE DESCRIPTION OF BUSINESS
PAYROLL SEGMENT
Paychex's Payroll segment is a national payroll processing and payroll tax
preparation service provided to 351,900 small- to medium-sized business within
the United States. This segment is engaged in the preparation of payroll
checks, internal accounting records, annual W-2 forms, federal, state, and
local tax returns, new hire reporting, and the collection and remittance of
payroll obligations for its clients.
81% of the Company's payroll clients utilize its TAXPAY service, which provides
automatic payment of payroll taxes and filing of quarterly and annual payroll
tax returns. In connection with TAXPAY, the Company's Electronic Network
Services (ENS) division collects payroll taxes from clients on payday, files
the applicable tax returns, and pays taxes to the appropriate taxing
authorities on the due date. These collections from clients are typically paid
between one and thirty days after receipt, with some items extending to ninety
days.
47% of the Company's payroll clients utilize its Employee Pay Services, which
provides the employer the option of paying its employees by Direct Deposit,
Access Card, a check drawn on a Paychex account (READYCHEX), or a check drawn
on the Employer's account. For the first three methods, ENS collects net
payroll from the client's account one day before payroll and provides payment
to the employee on payday.
TAXPAY and Employee Pay Services are integrated with the Company's Payroll
processing service. In addition to fees paid by clients for these services,
the Company earns investment revenue on TAXPAY and Employee Pay Services funds
that are collected before due dates and invested (ENS investments) until
remittance to the appropriate entity. Investment revenue from these ENS
investments is included in Payroll service revenue on the Consolidated
Statements of Income as the collection, holding and remittance of these funds
is a critical component of providing these particular product services.
Payroll processing is decentralized and performed in most Paychex branches
while TAXPAY, Direct Deposit, READYCHEX and Access Card are processed at a
facility in Rochester, New York.
Clients can communicate their payroll information to Paychex through telephone
or fax, using the Paychex PAYLINK and PREVIEW software to transfer data from
their personal computer, or via the Internet. Paychex employs payroll
specialists who communicate primarily by telephone with their assigned clients
each payroll period to record the hours worked by each employee and any
personnel or compensation changes. These specialists are trained by Paychex in
all facets of payroll preparation and applicable tax regulations. The Paychex
payroll system is an on-line, direct entry computer system which enables the
payroll specialist, upon receiving the information from the client over the
telephone, to enter it simultaneously.
The average Paychex core payroll client employs fourteen people. The Major
Market Services (MMS) payroll product targets companies that have between fifty
and two-hundred employees. In fiscal 2000, the Company expanded its MMS
payroll product offering to include forty-four of the more than one hundred
sales territories currently serviced by the core payroll product. MMS clients
communicate their payroll information primarily using the PREVIEW software.
Paychex also offers services to its clients and their accountants via the
Paychex Online Internet Site. Clients can communicate payroll information via
Internet Timesheet, transfer payroll numbers computed by Paychex to the
client's general ledger software using LEDGER REPORTING ONLINE, and access
current and historical payroll information using Reports Online.
Payroll Service Marketing and Sales
There are about 5.8 million full-time employers in the markets this segment
serves. Of those employers, 98% have less than 100 employees and are the
Company's primary customers and target market. The Payroll segment markets its
services principally through its sales force located at its 81 branch operation
and processing centers and 29 sales offices in major metropolitan areas. The
MMS product is sold through a separate sales force which is integrated into the
branch locations. In addition to its direct selling and marketing efforts, the
Company utilizes relationships with many banks and Certified Pulic Accountants
for client referrals.
Payroll Competition
The Payroll segment's primary competition includes (i) manual payroll systems
sold by numerous vendors, (ii) traditional in-house computerized payroll
departments, and (iii) other computerized payroll service providers and
Certified Public Accountants. Management believes that the primary elements of
competition are price and service, and believes it has one major national
competitor that provides computerized payroll accounting services nationwide.
HRS-PEO SEGMENT
The HRS-PEO segment provides human resource products and services through its
HRS division, either on an a-la-carte basis or bundled through the Paychex
Adminstrative Services product. These products and services can also be
provided through a co-employer relationship with Paychex Business Solutions,
Inc. (PBS), a subsidiary of Paychex, which operates as a Professional Employer
Organization (PEO).
Human Resource Services
Among the HRS products is a 401(k) plan recordkeeping service, used by 14,700
clients at May 31, 2000. This service provides plan implementation, ongoing
compliance with government regulations, employee and employer reporting and
other administrative services. During fiscal 2000, the Company began offering
Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement
Account Plan services to its clients.
In fiscal 1999, Paychex rolled out its Workers' Compensation Insurance product
nationwide. Paychex acts, via its licensed agency, as a general agent providing
workers' compensation insurance through a variety of carriers who are
underwriters. The PAY-AS-YOU-GO program uses rate and job classification
information to enable clients to pay workers' compensation premiums in regular
monthly amounts rather than with large upfront payments otherwise required.
The result stablilizes their cash flow and minimizes year-end adjustments.
The HRS division also offers products under section 125 of the Internal Revenue
Code. The Premium Only Plan allows employees to pay for certain health
insurance benefits with pre-tax dollars, which results in a reduction in payroll
taxes to employers and employees. The Flexible Spending Account Plan allows a
client's employees to pay, with pre-tax dollars, health and dependent care
expenses not covered by insurance. All required administration, compliance and
coverage tests are provided with these services.
The HRS Paychex Administrative Services Product, which was made available
nationwide in May 2000, offers businesses a bundled package that includes
payroll, human resource administration, fringe benefit administration, and risk
management. Group health benefits are also offered in selected geographical
areas, as are state unemployment insurance services, which provide clients with
a prompt reply for all claims, appeals, determinations, change statements and
requests for separation documents. Other HRS products include employee
handbooks, management manuals and personnel forms. These have been designed to
simplify clients' office processes and enhance their employee benefits
programs.
Professional Employer Organization Services PBS is a leading professional
employer organization, which provides small- and medium-sized businesses with
an outsourcing solution to the complexities and costs related to employment and
human resources. PBS provides professional employer services through five core
activities: (i) human resource administration, (ii) employer regulatory
compliance management, (iii) workers' compensation cost containment and safety
management, (iv) employee benefits and related administration and (v) payroll
processing and tax compliance. By engaging PBS to provide these services,
clients are freed to concentrate their resources on their core businesses. As
of May 31, 2000, PBS provided professional employer services to 20,200
employees, primarily in Florida, Georgia and Southern California.
HRS-PEO Sales Process
HRS-PEO products and services are sold through a sales organization separate
from that which sells Payroll services, with expertise in fields related to one
or more of the segment's core services. The sales efforts of the HRS division
are primarily focused on selling its products and services to existing Payroll
segment clients since the processed payroll information provides the data
integration necessary to provide the service. PBS generates sales leads from
two primary sources: direct sales efforts and referrals, including referrals
of existing Payroll segment clients.
HRS-PEO Competition
HRS-PEO segment competitors include (i) traditional in-house human resource
departments, (ii) other PEOs, and (iii) providers of unbundled
employment-related services such as payroll processing firms, temporary
employment firms, commercial insurance brokers, human resource consultants,
workers' compensation insurers, HMOs and other specialty managed care providers.
Competition in the highly fragmented PEO industry is generally on a local or
regional basis. Management believes that the primary elements of competition
are quality of service, choice and quality of benefits, and price. PBS
management believes that name recognition, including its ownership by Paychex,
regulatory expertise, financial resources, risk management and data processing
capability distinguish Paychex and PBS from the rest of the industry.
SOFTWARE MAINTENANCE AND PRODUCT DEVELOPMENT
The ever-changing mandates of federal, state and local taxing authorities
compel the Company to continuously update its proprietary software utilized by
its Payroll and HRS-PEO business segments. The Company is also engaged in
developing ongoing enhancements and maintenance to this software to meet the
changing requirements of its clients and the marketplace. The Company is
continually in the processes of developing proprietary software for new product
offerings. However, the Company is not engaged, to any significant extent, in
basic or technological software research and development.
EMPLOYEES
As of May 31, 2000, the Company and its subsidiaries employed approximately
6,200 persons, of which 5,900 are full-time and 300 are part-time.
TRADEMARKS
As of May 31, 2000, the Company and its subsidiaries have a number of
trademarks and service marks filed for registration or registered with the U.S.
Patent and Trademark Office, including the names PAYCHEX, TAXPAY, PAYLINK,
PREVIEW, BANKCHEX, READYCHEX, PAY-AS-YOU-GO, RAPID PAYROLL, and LEDGER REPORTING
ONLINE. The Company believes these trademarks and service marks are of material
importance to its business.
SEASONALITY
There is no significant seasonality to the Company's business. However, during
the third fiscal quarter, the number of new payroll segment clients and new PEO
worksite employees tends to be higher than the rest of the fiscal year.
Consequently, greater sales commission expenses are reported in the third
quarter.
ITEM 2. PROPERTIES
The Company's headquarters for its Payroll segment and Corporate functions are
housed in a 140,000 square foot building complex owned by the Company in
Rochester, New York. In addition, approximately 139,000 square feet is leased
in several office complexes within the Rochester area. These leased facilities
house various Corporate functions, other Payroll operations, and a
telemarketing unit.
The Payroll segment leases approximately 1,200,000 square feet of space for its
regional, branch, data processing centers and sales offices at various
locations throughout the United States, concentrating on major metropolitan
areas. The Company owns branch facilities located in Syracuse, New York
and Philadelphia, Pennsylvania, which together account for approximately 56,300
square feet.
HRS operations are performed at the HRS-PEO headquarters, a 62,000 square foot
office facility owned by the Company within 10 miles of the Corporate
headquarters. PEO operations are performed mainly in leased facilities in
Florida and Georgia, and utilize some leased office space at various Payroll
branches. The HRS-PEO sales force utilizes office space at the segment's
headquarters, PEO operating locations, and Payroll branches and sales offices.
The Company believes that adequate, suitable lease space will continue to be
available for its needs. The Company is in the process of evaluating the
construction of an additional facility at Corporate headquarters. The proposed
building would primarily be occupied by employees who are currently occupying
leased facilities and would be completed in the summer of 2002.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business and operations, the Company is subject to
various claims and litigation. Management believes the resolution of these
matters will not have a material effect on the financial position or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year ended May
31, 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock trades on The Nasdaq Stock Market under the symbol
"PAYX". The quarterly high and low sales price and dividend information for
the past two years is set forth in the Company's Annual Report under the
heading "Quarterly Financial Data (Unaudited)" and is incorporated herein by
reference. Dividends are normally paid in February, May, August, and November.
The level and continuation of future dividends are necessarily dependent on the
Company's future earnings and cash flows.
On July 31, 2000, there were 11,633 holders of record of the Company's common
stock which includes registered holders and participants in the Paychex, Inc.
Dividend Reinvestment and Stock Purchase Plan. There were also 5,868
participants in the Paychex, Inc. Employee Stock Purchase Plan.
ITEM 6. SELECTED FINANCIAL DATA
The information required is set forth in the Company's Annual Report under the
heading "Eleven-Year Summary of Selected Financial Data" and is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required is set forth in the Company's Annual Report under the
heading "Management's Discussion" and is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required is set forth in the Company's Annual Report under the
heading "Management's Discussion" under subheading "Market Risk Factors:
Interest Rate Risk" and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required are identified in Item 14(a), and are set
forth in the Company's Annual Report and incorporated herein by reference.
Supplementary data required is set forth in the Company's Annual Report under
the headings "Quarterly Financial Data (Unaudited)" and "Quarterly Segment
Financial Data (Unaudited) and is incorporated herein by reference. Also, see
Financial Statement Schedule II - Valuation and Qualifying Accounts at Item
14(d).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required is set forth in the Company's definitive Proxy
Statement in the section entitled "PROPOSAL 1 - ELECTION OF DIRECTORS", the
section entitled "OTHER EXECUTIVE OFFICERS OF THE COMPANY", and the section
entitled "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required is set forth in the Company's definitive Proxy
Statement in the section entitled "EXECUTIVE OFFICER COMPENSATION" and is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required is set forth in the Company's definitive Proxy
Statement under the heading "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGERS" and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no relationships or related transactions required to be reported.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a) 1. Financial Statements and Supplementary Data
The following consolidated financial statements of the Company are
incorporated herein by reference to the Company's Annual Report:
Report of Ernst & Young LLP Independent Auditors
Consolidated Statements of Income - For the Years ended May 31, 2000,
1999, and 1998
Consolidated Balance Sheets - May 31, 2000 and 1999
Consolidated Statements of Stockholders' Equity - For the Years
ended May 31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows - For the Years ended May 31,
2000, 1999, and 1998
Notes to Consolidated Financial Statements
2. Financial statement schedules required to be filed by Item 8 of this
Form, include Schedule II - Valuation and Qualifying Accounts, and
is included at Item 14(d). All other schedules are omitted as the
required matter is not present, the amounts are not significant or
the information is shown in the financial statements or the notes
thereto.
3. Exhibits
(3) (a) Articles of Incorporation, as amended, incorporated herein by
reference to the Company's Registration Statement No. 2-85103,
Exhibits 3.1 through 3.5, Form 8-K filed with the Commission on
October 22, 1986, Form 10-Q filed with the Commission on January
12, 1989, Form 10-Q filed with the Commission on January 13,
1993, Form 10-Q filed with the Commission on January 10, 1996,
Form 10-Q filed with the Commission on October 14, 1997, and
Form 10-Q filed with the Commission on December 16, 1999.
(3) (b) By-Laws, as amended, incorporated herein by reference to the
Company's Registration Statement No. 2-85103, Exhibit 3.6.
(10)(a) Paychex, Inc. 1987 Stock Incentive Plan incorporated herein by
reference to the Company's Registration Statement on Form S-8, No.
33-17780.
(10)(b) Paychex, Inc. 1992 Stock Incentive Plan incorporated herein by
reference to the Company's Registration Statement on Form S-8, No.
33-52772.
(10)(c) Paychex, Inc. 1995 Stock Incentive Plan incorporated herein by
reference to the Company's Registration Statement on Form S-8, No.
33-64389.
(10)(d) Paychex, Inc. 1998 Stock Incentive Plan incorporated herein by
reference to the Company's Registration Statement on Form S-8, No.
333-65191.
(10)(e) Paychex, Inc. Section 401(k) Incentive Retirement Plan,
incorporated herein by reference to the Company's Registration
Statement on Form S-8, No. 33-52838.
(10)(f) Paychex, Inc. Section 401(k) Incentive Retirement Plan,
incorporated herein by reference to the Company's Registration
Statement on Form S-8, No. 333-84055.
(10)(g) Paychex, Inc. - Pay-Fone Systems, Inc. 1993, 1990, 1987, 1983,
1981 Incentive Stock Option Plans and Director Non-Qualified Stock
Option Agreements incorporated herein by reference to the
Company's Registration Statement on Form S-8, No. 33-60255.
(10)(h) Paychex, Inc. Officer Performance Incentive Program for the
year ended May 31, 2001 is filed herewith.
(13) Portions of the Annual Report to Stockholders for the Fiscal
Year ended May 31, 2000. Such report, except for the portions
thereof which are expressly incorporated by reference in this
filing, is furnished for the information of the Commission and is
not to be deemed "filed" as part of this filing.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Auditors.
(24) Power of Attorney.
(27) Financial Data Schedule (filed electronically).
(99) "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995.
(b) Reports on Form 8-K
(1) The Company filed a Form 8-K on April 14, 2000 that included the
press release dated April 13, 2000 announcing the 3-for-2 stock split
payable on May 22, 2000 to shareholders of record on May 12, 2000.
(2) The Company filed a Form 8-K on June 26, 2000, that included the
Company's May 31, 2000 year-end earnings press release, and a
preliminary Management's Discussion and Analysis of the Financial
Condition and Results of Operations for the years ended May 31, 2000,
1999, and 1998.
(3) The Company filed a Form 8-K on June 27, 2000 that included quarterly
data for fiscal 2000 and 1999 restated for the 3-for-2 stock split
distributed on May 22, 2000, and quarterly segment financial data for
fiscal 2000 and 1999 restated for an operating facilities cost
reallocation from the Payroll Segment to the HRS-PEO Segment.
(d) Schedule II - Valuation and Qualifying Accounts
Paychex, Inc.
Consolidated Financial Statement Schedule
For the year ended May 31,
(In thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and End
Description of Year Expenses Deductions of Year
- ----------------------- ---------- ---------- ---------- ----------
2000
Allowance for bad debts $2,395 $1,872 $1,014* $3,253
1999
Allowance for bad debts $1,750 $1,886 $1,241* $2,395
1998
Allowance for bad debts $1,308 $1,648 $1,206* $1,750
* - Uncollectible accounts written off, net of recoveries.
Note: The Allowance for bad debts is deducted from the balance of Accounts
receivable on the Consolidated Balance Sheets.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PAYCHEX, INC.
Dated: August 28, 2000 By: /s/ B. Thomas Golisano
-----------------------------
B. Thomas Golisano, Chairman, President,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: August 28, 2000 By: /s/ B. Thomas Golisano
-----------------------------
B. Thomas Golisano, Chairman, President,
and Chief Executive Officer and Director
Dated: August 28, 2000 By: /s/ Steven D. Brooks*
-------------------------------
Steven D. Brooks, Director
Dated: August 28, 2000 By: /s/ G. Thomas Clark*
-------------------------------
G. Thomas Clark, Director
Dated: August 28, 2000 By: /s/ David J.S. Flaschen*
-------------------------------
David J.S. Flaschen, Director
Dated: August 28, 2000 By: /s/ Phillip Horsley*
-------------------------------
Phillip Horsley, Director
Dated: August 28, 2000 By: /s/ Grant M. Inman*
-------------------------------
Grant M. Inman, Director
Dated: August 28, 2000 By: /s/ Harry P. Messina, Jr.*
-------------------------------
Harry P. Messina, Jr., Director
Dated: August 28, 2000 By: /s/ J. Robert Sebo*
-------------------------------
J. Robert Sebo, Director
Dated: August 28, 2000 By: /s/ Joseph M. Tucci*
-------------------------------
Joseph M. Tucci, Director
Dated: August 28, 2000 By: /s/ John M. Morphy
-------------------------------
John M. Morphy, Vice President, Chief Financial
Officer and Secretary
(Principal Accounting Officer)
*By: /s/ B. Thomas Golisano
-------------------------------
B. Thomas Golisano, as Attorney-in-Fact