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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .
Commission file number: 0-19922
THE BISYS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3532663
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 CLOVE ROAD
LITTLE FALLS, NEW JERSEY 07424
(Address of principal executive offices) (Zip Code)
973-812-8600
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
(Title of Class)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.02 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
Rule 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 of this Form 10-K. [ ]
State the aggregate market value of voting stock held by nonaffiliates
of the Registrant as of September 11, 2000: $2,015,098,399.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of September 11, 2000: 28,083,063 shares of Common
Stock.
DOCUMENTS INCORPORATED BY REFERENCE: List the following documents if
incorporated by reference and the part of the Form 10-K into which the document
is incorporated: (1) Any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.
Fiscal 2000 Annual Report to Shareholders--Part II and IV; Proxy Statement for
November 16, 2000 Annual Meeting--Part III
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THE BISYS GROUP, INC.
FORM 10-K
JUNE 30, 2000
PAGE
----
Part I
Item 1. Business...............................................................................1
Item 2. Properties........................................................................... 12
Item 3. Legal Proceedings.................................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders...................................13
Part II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters...............................................................13
Item 6. Selected Financial Data...............................................................14
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................................14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk............................14
Item 8. Financial Statements and Supplementary Data...........................................14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..........................................................14
Part III
Item 10. Directors and Executive Officers of the Registrant....................................14
Item 11. Executive Compensation................................................................14
Item 12. Security Ownership of Certain Beneficial Owners and Management........................14
Item 13. Certain Relationships and Related Transactions........................................14
Part IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K...............................................................14
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Some of the statements in this report are not historical facts and are
"forward-looking statements" (as defined in the Private Securities Litigation
Reform Act of 1995). These statements use words such as "believes," "expects,"
"intends," "may," "will," "should," "anticipates," and other similar words and,
among other things, describe our current strategies, opinions, expectations of
future results and other forward-looking information. We derive forward-looking
information from information which we currently have and numerous assumptions
which we make. We cannot assure that results which we anticipate will be
achieved since results may differ materially because of both known and unknown
risks and uncertainties which we face. Factors which could cause actual results
to differ materially from our expectations include, but are not limited to,
those discussed below under the heading "Risk Factors" and other risks and
uncertainties we identify from time to time in filings with the Securities and
Exchange Commission. We do not promise to update such forward-looking statements
to reflect actual results or changes in assumptions or other factors that could
affect these statements.
PART I
ITEM I. BUSINESS.
The BISYS(R) Group, Inc. and its wholly-owned subsidiaries ("BISYS" or
the "Company") supports more than 11,000 financial institutions and corporate
clients through its integrated business units. BISYS provides information
processing and check imaging solutions to more than 1,300 financial institutions
nationwide; distributes and administers over 80 families of mutual funds
consisting of more than 1,000 portfolios; provides retirement plan recordkeeping
services to approximately 6,000 companies in partnership with 30 of the nation's
leading bank and investment management companies; and provides insurance
distribution solutions, professional certification training and licensing and
continuing education, and investment industry consulting services.
BISYS seeks to be the single source of all relevant outsourcing
solutions for its clients and to improve their performance, profitability and
competitive position. BISYS endeavors to expand the scope of its services
through focused account management, emphasizing services with recurring revenues
and long-term contracts. BISYS increases its business base through (i) direct
sales to new clients, (ii) sales of additional products and services to existing
clients, and (iii) acquisitions of businesses that provide complementary
outsourcing solutions to financial organizations and other customers.
BISYS was organized in August 1989 to acquire certain banking and
thrift data processing operations of Automatic Data Processing, Inc. ("ADP").
Its traditional business was established in 1966 by United Data Processing,
Inc., the predecessor of the banking and thrift data processing operations of
ADP. Together with its predecessors, BISYS has been providing outsourcing
solutions to the financial services industry for more than 30 years. BISYS is
incorporated under the laws of Delaware and has its principal executive office
at 150 Clove Road, Little Falls, New Jersey 07424 (telephone 973-812-8600).
Since its founding in 1989, BISYS has completed a number of
acquisitions as part of its strategic growth plan. Over the past five fiscal
years, BISYS acquired the following businesses:
April 1996 -- Strategic Solutions Group, Inc., subsequently renamed
BISYS Creative Solutions, Inc., a provider of automated telephone and
Internet based marketing services. In June 1999, BISYS sold the
outstanding capital stock of BISYS Creative Solutions, Inc. to an
unaffiliated third party;
June 1996 -- T.U.G., Inc., now part of BISYS Insurance and Education
Services, provides insurance distribution services to the financial
services industry;
August 1997 -- Charter Systems, Inc., subsequently renamed BISYS
Networking Services, Inc., an enterprise-wide network services company
which provides network planning, design, implementation
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and 24-hour monitoring and performance analysis for multi-vendor local
and wide area network environments. In June 2000, BISYS sold the
outstanding capital stock of BISYS Networking Services, Inc. to an
unaffiliated third party;
August 1997-- Dascit/White & Winston, Inc. and affiliated companies,
now part of BISYS Insurance and Education Services, an outsourcer of
group health care and life insurance services;
September 1997-- Benefit Services, Inc., now part of BISYS Insurance
and Education Services, an outsourcer of long-term health care
insurance services;
May 1998 --Underwriters Service Agency, now part of BISYS Insurance and
Education Services, a provider of insurance distribution services;
July 1998 -- Corelink Resources Inc., and affiliated entities, now
known as BISYS Brokerage Services, a distributor and marketer of
investment products and services. In February 2000, BISYS transferred a
portion of the BISYS Brokerage Services business to a different
subsidiary and sold the outstanding capital stock of this subsidiary to
an unaffiliated third party;
August 1998 --The Potomac Group, now part of BISYS Insurance and
Education Services, a distributer of life insurance products and
services;
September 1998 --Greenway Corporation, a check imaging software
provider, now part of BISYS Document Solutions;
April 1999 -- EXAMCO, Inc., now part of BISYS Insurance and Education
Services, a provider of internet-based professional certification
training and continuing education for the financial services industry;
April 1999 -- Poage Insurance Services, Inc. and an affiliated entity,
now part of BISYS Insurance and Education Services, an independent life
insurance distributor serving the western United States;
April 1999 -- Mutual fund administration business of Bachmann Asset
Management Limited, a provider of mutual fund administration services
in Guernsey, Channel Islands;
May 1999 -- HML, Inc., the parent company of Dover International, and
affiliated entities, now part of BISYS Insurance and Education
Services, a provider of professional certification training, continuing
education and other support services for the financial services
industry;
June 1999 -- The Retained Asset Account division of State Street Bank &
Trust Company, now part of BISYS Information Solutions, a provider of
retained asset services to life and property and casualty insurance
companies; and
May 2000 -- The Luxembourg based fund administration business of Credit
Lyonnais Asset Management, a provider of fund administration services
to asset management clients throughout Europe.
In addition, since the end of the fiscal year ended June 30, 2000,
BISYS has completed the following acquisitions:
July 2000 -- Pictorial Holdings, Inc., the parent company of Pictorial,
Inc., a provider of professional certification training and licensing
and compliance software products for the financial services industry;
and
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July 2000 -- Ascensus Insurance Services, Inc. and affiliated entities,
a provider of distribution services for life insurance, annuity and
long term care insurance products and services.
COMPANY STRATEGY
Financial organizations today are challenged to compete more
effectively, improve productivity and maximize profits during periods of both
economic growth and decline. BISYS provides viable alternatives for automating
critical tasks and functions and provides specific expertise and experience to
financial organizations. BISYS outsourcing solutions deliver to its clients
operational and economic benefits as well as additional resources to generate
incremental revenues.
BISYS objectives are to increase its client base and to expand the
services it offers to them. BISYS seeks to be the premier, full-service
outsourcing business partner focused on enhancing its clients' growth, profits
and performance, and building shareholder value by consistently increasing both
revenues and earnings per share, through a combination of internal growth, new
sales and strategic acquisitions. Five key principles have guided BISYS since
its formation and continue to shape its business growth plan:
FOCUS ON CLIENT SERVICE. BISYS seeks to thoroughly understand the
financial services industry and proactively respond to its evolving
support requirements. Its industry recognized customer service and
rewarding levels of customer satisfaction are based on decades of
day-to-day experience, innovative support tools, and a company-wide
commitment to strengthen every client relationship with unsurpassed
service.
GROW INTERNALLY AND SELL AGGRESSIVELY. BISYS seeks to sell its business
solutions to new clients and cross-sell additional products and
services to its existing clients. It intends to continue to focus
highly targeted sales initiatives on growing markets and introduce new
solutions that will enable its clients to retain existing customers,
attract new customers and enter new markets. BISYS seeks to grow and
profit from its clients' growth and success.
LEVERAGE BUSINESS AND PRODUCT SYNERGY. BISYS seeks to capitalize on the
inherent synergy among its groups and leverage its existing outsourcing
platforms across traditional business lines to capitalize on the
significant opportunities being generated by the converging financial
services industry. It will continue to seek to acquire complementary
firms capable of enhancing its product lines, competitive positioning,
client relationships and shareholder value.
LEVERAGE TECHNOLOGICAL ADVANCEMENTS. BISYS seeks to invest in and
integrate advanced technologies capable of enhancing its outsourcing
platforms. It will continue to seek to leverage the tremendous power of
the Internet to re-invent how it supports global clients and delivers
products, services and vital information.
OPTIMIZE HUMAN RESOURCES. BISYS values the contribution of its
employees who represent critical technical and business disciplines in
the financial services industry. BISYS depends on this collective
experience and expertise to sustain its industry leadership and growth.
BISYS provides its products and services principally through three
major business groups: BISYS Information Services, BISYS Investment Services and
BISYS Insurance & Education Services.
BISYS INFORMATION SERVICES
BISYS provides outsourcing solutions for information processing to
banking institutions through an integrated family of services and products
offered under the registered service mark TOTALPLUS. Although the TOTALPLUS
family of services and products are adaptable to most financial institutions,
BISYS believes that its primary market consists of banks with $250 million to
$10 billion in assets.
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Using integrated central and client site solutions, the TOTALPLUS
product line supports most aspects of a banking institution's automation
requirements. The TOTALPLUS Solution is a comprehensive system, providing
bank-wide automation which enables community banks more effectively to compete
with super regionals, banks serving a national marketplace, and non-bank
competitors. The TOTALPLUS family of products and services provides bank-wide
automation, integrating mainframe-based, central site and PC-based client site
applications. During fiscal year 1998, BISYS launched the banking industry's
first true client/server outsourcing alternative based on an open computing
environment. BISYS also introduced full-service Internet banking, data
warehousing and document imaging. In fiscal year 2000, BISYS introduced a new
line of "thin client" solutions delivered in an Application Service Provider
("ASP") environment. ASP, an emerging delivery method, relieves BISYS' clients
of the high costs and risks associated with implementing and maintaining the
latest technology-based business solutions. The BISYS solution provides diverse
financial organizations with the ability to customize each application to meet
specialized processing requirements and priorities.
BISYS currently has two major data processing centers located in the
Chicago, Illinois and Philadelphia, Pennsylvania metropolitan areas. These
regional service centers are uniformly automated with multi-tasking IBM (or
equivalent) mainframe computer systems on which all TOTALPLUS host computer
functions and client data are resident. Each client's individual operating
parameters and data are maintained separately, and extensive precautions are in
place to ensure data security and privacy of communications between the client
and the host. Both internal and external backup resources are maintained and
regularly tested for BISYS' own disaster recovery purposes.
Through its Retained Asset Account processing business, BISYS has
expanded its data processing services to include servicing the retained asset
programs of more than 100 of the largest life and property/casualty insurance
carriers in the United States. This data processing is performed on the
TOTALPLUS host computer system.
BISYS is a leader in providing image-based technology software to
financial institutions, including sophisticated Internet-based delivery and
access solutions. These imaging solutions convert traditional paper-based checks
and other documents into digital images that can be accessed electronically.
More than 1,000 banks, credit unions and service bureaus are using BISYS
image-based technology software representing the majority of all bank check
imaging systems in the country for the community bank market. This software,
designed to provide a fully integrated image environment, uses microcomputer
technology and supports the majority of image enabled transports available
today. This product family includes image capture and archive, image statements,
e-mail statement delivery, image proof of deposit, return item/image processing,
image signature verification, courtesy amount recognition, CD-ROM image
delivery, customer financial analysis and full Internet access.
BISYS INVESTMENT SERVICES
BISYS Investment Services provides distribution, administration, fund
accounting and transfer agency services to over 80 mutual fund complexes
encompassing more than 1,000 individual portfolios with a market value exceeding
$300 billion in assets. In addition, BISYS provides administration, distribution
and marketing of investment products for financial institutions. BISYS also
provides 401(k) plan marketing support, administration and recordkeeping
services to many of the nation's leading bank and investment management
companies.
BISYS distributes and administers proprietary open-end "mutual funds"
registered under the Investment Company Act of 1940 (the "Investment Company
Act"). BISYS provides distribution services, including the development of joint
and external sales and marketing programs and administrative services, including
responsibility for administration, transfer agency, shareholder services,
compliance and fund accounting. BISYS also provides distribution services
through its various wholly-owned broker/dealer subsidiaries. In order to assist
its clients' mutual fund sales efforts, BISYS maintains a distribution sales
force to raise additional assets for its clients' funds.
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BISYS integrates its banking and mutual fund expertise to provide a
wide array of specialized services, including sweep and wrap account processing.
More than a traditional administrator and distributor, BISYS takes a
consultative approach to its client relationships, offering innovative,
fee-generating and cost-effective solutions to expand and manage the banking
institution's mutual fund business. BISYS offers its clients a complete turnkey
outsourcing solution for mutual fund operations which includes comprehensive
marketing, institutional sales, retail sales, telemarketing, development of new
products and markets and institutional and retail shareholder servicing centers.
BISYS designs, plans and implements strategies to help mutual funds attain
critical mass, reach new prospects and markets and add value in an increasingly
competitive market. In addition to its domestic business, BISYS provides
distribution and administrative services to offshore fund complexes through its
Dublin, Ireland, London, England, Guernsey, Channel Islands and Luxembourg
operations.
BISYS provides 401(k) plan services for small- and medium-sized
companies, providing outsourcing solutions to financial organizations and
corporate clients for marketing and sales support and administration and
participant recordkeeping services for corporate sponsored 401(k) plans. BISYS
maintains partnerships with financial organizations including banks and
investment and insurance companies and provides marketing and proposal support
for their sale of their 401(k) plan investment products. BISYS markets to and
builds systems linkage with these investment manager partners and enables them
to concentrate on selling 401(k) plans while BISYS provides the administrative
and recordkeeping functions for the fund sponsor. On an ongoing basis, BISYS
performs 401(k) participant recordkeeping and other services including daily
valuation of participant balances, administering 401(k) loans, discrimination
testing, participant statements and participant communications. Targeted at
companies with fewer than 500 employees -- one of the fastest growing segments
of the retirement plan market -- BISYS services approximately 6,000
corporate-sponsored retirement plans covering more than 600,000 employee
participants.
BISYS INSURANCE AND EDUCATION SERVICES
BISYS provides outsourcing services for the distribution of life
insurance, annuities, group health and long-term care products. BISYS is a
full-service distributor and administrator of insurance services and employs
strategic alliances with major insurance companies and national producer groups
to provide a full range of outsourcing services for insurance product
distribution. BISYS services a network of, and markets products and services
through, more than 100,000 insurance agents and brokers nationwide. BISYS offers
a full-service, single source solution to support banks' and other financial
institutions' initiatives to offer insurance services to their customer bases.
BISYS allows clients to use their various distribution channels to offer
insurance products and services, ranging from annuities and commodity term
products to estate planning products. In addition to product solutions, BISYS
provides clients with the systems and services expertise necessary to support
their sale of insurance products, including licensing management, marketing and
proposal support, application processing and advanced underwriting and
commission accounting and processing.
BISYS provides comprehensive training and education programs to
corporate clients to enable securities brokers, insurance agents and securities
traders to obtain initial licensure, advanced designations (including, among
others, Chartered Life Underwriter, Chartered Financial Consultant, Certified
Financial Planner and Chartered Financial Analyst) and continuing education
programs. During fiscal year 2000, investment and insurance professionals
enrolled in more than 400,000 of BISYS' training courses.
CONTRACTS
Services are provided to BISYS clients, for the most part, on the basis
of contracts which renew for successive terms, unless terminated by either
party. Contracts for distribution services to mutual funds, as required by the
Investment Company Act, provide that such contracts may continue for a period
longer than two years only if such continuance is specifically approved at least
annually by both a majority of the disinterested directors and either the other
members of the board of directors or the holders of a majority of
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the outstanding shares of the fund. Contracts with insurance carriers providing
products for BISYS customers provide for compensation based on a percentage of
premiums paid and transaction charges and are generally cancellable on less than
90 days notice at the discretion of the parties. BISYS Insurance Services also
maintains long-term contracts with the distribution arms of a number of
insurance companies, producer groups and banks to provide insurance products and
services. BISYS' Education Services products are generally provided to customers
on an "as-needed" basis pursuant to long-term programs which are, in some cases,
recommended by BISYS to its customers.
BISYS fee structure for data processing clients is based primarily on
number of accounts, loans, participants and/or transactions handled for each
service, in some cases, subject to minimum charges, plus additional charges for
special options, services and features. BISYS fee structure for mutual fund
services clients is based primarily on the average daily net asset value of the
fund, in some cases, subject to minimum charges. BISYS 401(k) fee structure is
based upon the number of eligible participants in a plan subject to certain
minimums. BISYS check imaging software is licensed subject to a one-time fee
with recurring maintenance fees. BISYS Insurance Services' fee structure is
generally based on sharing a percentage of commissions and/or profits received
by BISYS with its clients.
Although contract terminations and non-renewals have an adverse affect
on recurring revenues, BISYS believes that the contractual nature of its
businesses, combined with its historical renewal experience, provides a high
level of recurring revenues.
CLIENT BASE
BISYS clients are located in all 50 states and several international
locations, principally the United Kingdom. BISYS provides outsourcing solutions
to commercial banks, mutual savings institutions, thrift organizations, mutual
funds, insurance companies, insurance producer groups, corporate clients and
other financial organizations including investment counselors and brokerage
firms. Total revenue from unaffiliated clients located outside the United States
for fiscal 1998, 1999 and 2000, was approximately $2.0 million, $10.8 million
and $20.5 million, respectively.
DISASTER RECOVERY SYSTEMS
Where appropriate, BISYS has implemented a disaster recovery system for
its various businesses. The key restoration services include off-site storage
and rotation of critical files, availability of a third-party "hot site" and
telecommunications recovery capability. BISYS believes that its single product
and consistent platform approach to data processing and communications and other
operating procedures enable it to achieve greater efficiencies in maintaining
and enhancing its disaster recovery systems, the capabilities of which are
routinely tested by BISYS with the cooperation of its clients. Within the
Information Services Group, BISYS has also developed and markets a
microcomputer-based client site disaster recovery planning product that is
specifically designed to meet the compliance needs of its financial institution
clients.
YEAR 2000
The Company believes that it has addressed any significant Year 2000
issues associated with its existing computer systems, software applications,
communications systems and other technology equipment in a timely manner. The
Company believes that its Year 2000 transition had no material effect on its
business, operations or financial results. The Company incurred expenditures for
Year 2000 testing and remediation of approximately $800,000 in fiscal 2000 and
$3.0 million in each of fiscal 1999 and 1998.
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SALES, MARKETING AND CLIENT SUPPORT
BISYS sells its services directly to potential clients and supports
insurance agents and companies, brokerage firms and other entities in their
endeavors to gain new clients. In addition to direct sales, BISYS utilizes
reseller/distributors to sell its software. BISYS has a number of sales offices
located throughout the United States.
BISYS utilizes an account executive staff which provides client account
management and support. In accordance with BISYS strategy of providing a single
source solution to its clients, the account executive staff also markets and
sells additional services to existing clients and manages the contract renewal
process. Using centralized resources, BISYS provides its direct sales staff and
account executives with marketplace data, presentation materials and
telemarketing data. BISYS maintains client support personnel at its principal
locations, which is responsible for day-to-day interaction with clients and also
markets BISYS products and services to existing clients.
COMPETITION
BISYS believes the market for its services is highly competitive. BISYS
believes that it remains competitive due to several factors, including BISYS'
overall company strategy and commitment, product quality, reliability of
service, a comprehensive and integrated product line, timely introduction of new
products and services, and competitive pricing. BISYS believes that, by virtue
of its range of product and service offerings and its overall commitment to
client service and relationships, it competes favorably in these categories. In
addition, BISYS believes that it has a competitive advantage as a result of its
position as an independent vendor, rather than as a cooperative, an affiliate of
a financial institution, a hardware vendor or competitor to its clients.
BISYS principal competitors are independent vendors of computer
software and services, in-house departments, affiliates of financial
institutions or large computer hardware manufacturers, processing centers owned
and operated as user cooperatives, insurance companies, third party
administration firms, mutual fund companies and brokerage firms. BISYS believes
that no single competitor offers the full range of products and services that
are offered by BISYS.
RESEARCH AND DEVELOPMENT
In order to meet the changing needs of the financial organizations that
it serves, BISYS continually evaluates, develops, maintains and enhances various
application software and other technology used in its business. During fiscal
1998, 1999 and 2000, BISYS spent approximately $11.7 million, $11.5 million and
$12.5 million, respectively, on research and development, primarily focused on
its proprietary systems. Most of BISYS central site application software used in
its bank data processing business has been developed internally, and a majority
of the client site application software is licensed from third parties and
integrated with BISYS' existing systems.
PROPRIETARY RIGHTS
BISYS regards certain of its software as proprietary and relies upon
trade secret law, internal nondisclosure guidelines and contractual provisions
in its license, services and other agreements for protection. Other than one
patent relating to its check imaging system, BISYS does not hold any registered
patents or registered copyrights on its software. BISYS believes that legal
protection of its software is less significant than the knowledge and experience
of BISYS management and personnel and their ability to develop, enhance and
market new products and services. BISYS believes that it holds all proprietary
rights necessary for the conduct of its business.
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Application software similar to that licensed by BISYS is generally
available from alternate vendors, and in instances where BISYS believes that
additional protection is required, the applicable license agreement provides
BISYS with the right to obtain the software source code upon the occurrence of
certain events.
GOVERNMENT REGULATION
Certain BISYS subsidiaries are registered as broker/dealers with the
Securities and Exchange Commission (the "SEC"). Much of the federal regulation
of broker/dealers has been delegated to self-regulatory organizations,
principally the National Association of Securities Dealers, Inc. (the "NASD")
and the national securities exchanges. Broker/dealers are subject to regulation
which covers all aspects of the securities business, including sales methods,
trading practices, use and safekeeping of customers' funds and securities,
capital structure, recordkeeping and the conduct of directors, officers and
employees. Additional legislation, changes in rules and regulations promulgated
by the SEC, the Municipal Securities Rulemaking Board, the Office of the
Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation
("FDIC"), the Federal Reserve Board (the "FRB") and the self-regulatory
organizations or changes in the interpretation of enforcement of existing laws,
rules and regulations, may also directly affect the mode of operations and
profitability of broker/dealers. The SEC, the FRB, the self-regulatory
organizations, state securities law administrators, the OCC and the FDIC may
conduct regulatory proceedings for violations of applicable laws, rules and
regulations. Such violations can result in disciplinary actions (such as
censure, the imposition of fines, the issuance of cease-and-desist orders or the
suspension or revocation of registrations, memberships or licenses of a
broker/dealer or its officers, directors or employees), as well as civil and
criminal penalties. The principal purpose of such regulations generally is the
protection of the investing public and the integrity of securities markets,
rather than protection of securities firms or their creditors or stockholders.
In addition, BISYS broker/dealer subsidiaries are subject to SEC Rule
15c3-1 (commonly known as the "Net Capital Rule"). The Net Capital Rule, which
specifies the minimum amount of net capital required to be maintained by
broker/dealers, is designed to measure the general financial integrity and
liquidity of broker/dealers and requires that a certain part of broker/dealers'
assets be kept in relatively liquid form. Failure to maintain the required
minimum amount of net capital may subject a broker/dealer to suspension or
revocation of licenses, registration or membership with the New York Stock
Exchange, Inc., the SEC, the NASD, and various state securities law
administrators and may ultimately require liquidation of the broker/dealer.
Under certain circumstances, the Net Capital Rule also prohibits payment of cash
dividends, redemption or repurchase of stock, distribution of capital and
prepayment of subordinated indebtedness. Thus, compliance with the Net Capital
Rule could restrict BISYS ability to withdraw capital from its broker/dealer
subsidiaries. At June 30, 2000, each BISYS broker/dealer subsidiary met or
exceeded the requisite net capital requirement. At June 30, 2000, the BISYS
broker/dealer subsidiaries had aggregate net capital of approximately $13.8
million, which exceeded the requirements of the Net Capital Rule by
approximately $11.2 million.
Under the Investment Company Act of 1940, the distribution agreements
between each mutual fund and a BISYS subsidiary terminate automatically upon
assignment of the agreement. The term "assignment" includes direct assignments
by BISYS as well as assignments which may be deemed to occur, under certain
circumstances, upon the transfer, directly or indirectly, of a controlling block
of BISYS voting securities. The Investment Company Act of 1940 presumes that any
transfer of more than 25% of the voting securities of any person represents a
transfer of a controlling block of voting securities.
As a provider of services to banking institutions, BISYS is not
directly subject to federal or state banking regulations. However, BISYS may be
subject to review from time to time by the FDIC, the National Credit Union
Association, the Office of Thrift Supervision, the OCC and various state
regulatory authorities. These regulators make certain recommendations to BISYS
regarding various aspects of its operations. In addition, BISYS processing
operations are reviewed annually by an independent auditing firm.
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Banks and other depository institutions doing business with BISYS are
subject to extensive regulation at the federal and state levels under laws,
regulations and other requirements specifically applicable to regulated
financial institutions, and are subject to extensive examination and oversight
by federal and state regulatory agencies. As a result, the activities of BISYS
client banks are subject to comprehensive regulation and examination, including
those activities specifically relating to the sale by or through them of mutual
funds and other investment products. BISYS is not presently aware of any facts
which would lead it to believe that any of its bank clients are not in
compliance with applicable federal and state laws, regulations and other
requirements concerning the administration and distribution of bank managed
mutual funds.
The recently adopted Financial Services Modernization Act of 1999 (the
"Act") repeals key provisions of the Glass-Steagall Act and lifts many
restrictions limiting banks from the underwriting and distribution of
securities. As a result of these recent regulatory changes, BISYS expects that
some of its bank customers with proprietary mutual funds may, over time,
internalize certain distribution functions currently provided by BISYS. At the
same time, BISYS believes this change may result in additional demand for its
outsourcing services as financial institutions provide new services to their
customers. The near-term and long-term impact of this legislative change on
BISYS' business and results of operations are uncertain. Although there can be
no assurance, at this time BISYS does not expect a material adverse impact on
its business or results of operations as a result of the Act.
Federal regulatory agencies have promulgated guidelines or other
requirements which apply to depository institutions subject to their respective
supervisory jurisdiction with respect to the sale of mutual funds and other
non-FDIC insured investment products to retail customers. These requirements
apply to, among other things, sales of investment products on bank premises by
or through the use of third-party service providers. These requirements
generally require banking institutions which contract to sell investment
products through the use of third-party service providers to implement
appropriate measures to ensure that such activities are being conducted in
accordance with applicable bank and securities regulatory requirements
(including the agencies' retail sales guidelines), and may in some instances
impose certain "due diligence" obligations on regulated depository institutions
with respect to the nature and the quality of services provided by such
third-party service providers. Such regulatory requirements may increase the
extent of oversight which federal regulatory agencies may require BISYS client
banks to exercise over the activities of BISYS.
Federal and state banking laws grant state and federal regulatory
agencies broad authority to take administrative enforcement and other adverse
supervisory actions against banks and other regulated depository institutions
where there is a determination that unsafe and unsound banking practices,
violations of laws and regulations, failures to comply with or breaches of
written agreements, commitments or undertakings entered into by such banks with
their regulatory agencies, or breaches of fiduciary and other duties exist.
Banks engaged in, among other things, mutual fund-related activities may be
subject to such regulatory enforcement and other adverse actions to the extent
that such activities are determined to be unlawful, unsound or otherwise
actionable.
Certain operations of BISYS are subject to regulation by the insurance
departments of the states in which BISYS sells insurance products. Certain BISYS
employees are required to be licensed as insurance producers in certain states.
EMPLOYEES
As of June 30, 2000, BISYS employed approximately 3,200 employees. None
of its employees is represented by a union and there have been no work
stoppages, strikes or organization attempts. BISYS believes that its relations
with its employees are good.
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The service nature of BISYS makes its employees an important corporate
asset. Most employees are not subject to employment agreements; however, a
limited number of executives of BISYS operating subsidiaries have such
agreements.
RISK FACTORS
The recent adoption of the Financial Services Modernization Act of 1999 could
adversely impact our business
The recent adoption of the Financial Services Modernization Act of 1999
repeals key provisions of the Glass-Steagall Act and lifts many restrictions
limiting banks from the underwriting and distribution of securities. As a result
of these recent regulatory changes, BISYS expects that some of its bank
customers with proprietary mutual funds may, over time, internalize certain
distribution functions currently provided by BISYS. If that were to happen, it
could have a material adverse impact on our business and results of operations.
Our business can be significantly affected by direct and indirect governmental
regulation
Our business is affected by federal and state regulations. Our
noncompliance with these regulations could result in the suspension or
revocation of our licenses or registrations, including broker/dealer licenses
and registrations and insurance producer licenses and registrations. Regulatory
authorities could also impose on us civil fines and criminal penalties for
noncompliance.
Some of our subsidiaries are registered with the SEC as broker-dealers.
Much of the federal regulation of broker-dealers has been delegated to
self-regulatory organizations, principally the National Association of
Securities Dealers, Inc. and the national securities exchanges. Broker-dealers
are subject to regulations which cover all aspects of their securities business,
including, for example:
- sales methods;
- trading practices;
- use and safekeeping of customers' funds and securities;
- capital structure;
- recordkeeping; and
- the conduct of directors, officers and employees.
The operations of our broker-dealers and their profitability could be affected
by:
- federal and state legislation;
- changes in rules and regulations of the SEC, banking and other
regulatory agencies, and self-regulatory agencies; and
- changes in the interpretation or enforcement of existing laws,
rules and regulations.
Banks and other depository institutions with whom we do business are
also subject to extensive regulation at the federal and state levels under laws
and regulations applicable to regulated financial institutions. They are also
subject to extensive examination and oversight by federal and state regulatory
agencies. Changes in the laws, rules and regulations affecting our client banks
and financial institutions and the examination of their activities by applicable
regulatory agencies could adversely affect our results of operations.
Some of our subsidiaries, and officers and employees of these
subsidiaries, are required to be licensed as insurance producers in various
jurisdictions in which we conduct our insurance services business. They are
subject to regulation under the insurance laws and regulations of these
jurisdictions. Changes in the laws, rules and regulations affecting licensed
insurance producers could adversely affect our operations.
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Our revenues and earnings are subject to changes in the stock market
A significant portion of our earnings are derived from fees based on
the average daily market value of the assets we administer for our clients. A
sharp rise in interest rates or a sudden decline in the stock market could
influence an investor's decision whether to invest or maintain an investment in
a mutual fund. As a result, fluctuations could occur in the amount of assets
which we administer. If investors were to seek alternatives to mutual fund
investments, it could have a negative impact on our revenues by reducing the
amount of assets we administer. Also, from time to time, we and our bank clients
waive, for competitive reasons, some fees normally charged to mutual funds.
Consolidation in the banking and financial services industry could adversely
impact our business
There has been and continues to be merger, acquisition and
consolidation activity in the banking and financial services industry. Mergers
or consolidations of banks and financial institutions in the future could reduce
the number of our clients or potential clients. A smaller market for our
services could have a material adverse impact on our business and results of
operations. Also, it is possible that the larger banks or financial institutions
which result from mergers or consolidations could decide to perform themselves
some or all of the services which we currently provide or could provide. If that
were to occur, it could have a material adverse impact on our business and
results of operations.
Our acquisition strategy subjects us to risks
In the past several years, we have acquired a number of other
companies. We may make additional acquisitions. We cannot predict if or when any
additional acquisitions will occur or whether they will be successful.
Acquiring a business involves many risks, including:
- incurrence of debt;
- incurrence of unforeseen obligations or liabilities;
- difficulty in integrating the acquired operations and
personnel;
- difficulty in maintaining uniform controls, procedures and
policies;
- possible impairment of relationships with employees and
customers as a result of the integration of new personnel;
- risk of entering markets in which we have minimal prior
experience;
- decrease in earnings as a result of non-cash charges; and
- dilution to existing stockholders from the issuance of our
common stock to make or finance acquisitions.
We do not intend to pay dividends
We have never paid cash dividends to stockholders and do not anticipate
paying cash dividends in the foreseeable future.
Our systems may be subject to infiltration by unauthorized persons
We maintain and process data on behalf of our clients, some of which is critical
to the business operations of our clients. For example, our Information Services
Group maintains account information for our bank and insurance company clients
it services and our Investment Services Group maintains transfer agency records
and processes trades for our mutual fund clients. While we believe that we have
adequate safeguards to protect against unauthorized access to our information
technology systems, should our systems be infiltrated and damaged by
unauthorized persons, our clients could experience data loss, financial loss and
significant
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business interruption. If that were to occur, it could have a material adverse
effect on our business, financial condition and results of operations.
Our stock price is volatile
The market price of our common stock has been volatile. From January 1,
1999 to June 30, 2000, the last sale price of our common stock ranged from a low
of $41.9688 per share to a high of $68.625 per share.
The market price of our common stock is subject to many factors,
including:
- general stock market conditions;
- general United States and worldwide economic conditions;
- conditions in our industries such as competition, demand for
services and technological advances;
- changes in our revenues and earnings;
- changes in analyst recommendations and projections, and
- changes in our client base and our contracts with clients.
We face significant competition from other companies
We face significant competition from other companies. Many of our
competitors are well-established companies, and some of them have greater
financial, technical and operating resources than we do. Competition in our
business is based primarily upon pricing, quality of products and services,
breadth of products and services, new product development and the ability to
provide technological solutions.
We depend on key management personnel
Our success depends upon the continued services of our key senior
management personnel, some of whom do not have employment agreements with us.
The loss or unavailability of these individuals could have a material adverse
effect on our business prospects. Our success also depends on our ability to
attract and retain highly skilled personnel in all areas of our business,
including our information processing, fund management and insurance services
businesses. We cannot assure that we will be able to attract and retain
personnel on acceptable terms in the future.
Anti-takeover provisions could discourage, delay or prevent a change in control
We have a shareholder rights plan. Each right entitles the holder of a
share of our common stock to buy one share of our common stock at an exercise
price of $175. If a person or group were to acquire, or to announce the
intention to acquire, 15% or more of our outstanding stock, and in some cases
10%, each right would entitle the holder, other than the acquiring person or
group, to purchase shares of our common stock at the exercise price of the right
with a value of twice the exercise price. This plan could have the effect of
discouraging, delaying or preventing persons from attempting to acquire us.
In addition, the Delaware General Corporation Law, to which we are
subject, prohibits, except under circumstances specified in the statute, a
corporation from engaging in any mergers, significant sales of stock or assets
or business combinations with any stockholder or group of stockholders who own
at least 15% of our common stock.
ITEM 2. PROPERTIES.
All principal properties of the Company are leased. The following table
provides certain summary information with respect to such principal properties
as of June 30, 2000:
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Location Function Sq. Feet Expiration Date
- -------- -------- -------- ---------------
Little Falls, NJ Corporate headquarters 10,893 2007
Houston, TX Information Services
Service Center 58,568 2001
Cherry Hill, NJ Information Services
Data processing center 35,625 2011
Lombard, IL Information Services
Data processing center 25,240 2010
Columbus, OH Investment Services
Service Center 143,552 2005
Ambler, PA Investment Services
Service Center 88,218 2002
Birmingham, AL Information Services
Service Center 22,104 2001
Harrisburg, PA Insurance & Education Services
Service Center 33,982 2007
New York, NY Investment Services and Insurance
& Education Services
Service Center 35,897 2008
Atlanta, Georgia Information Services and Insurance
& Education Services
Service Center 35,034 2007
In addition to the principal facilities listed above, BISYS also leases
certain other office and data processing facilities with leases expiring
periodically over the next fifteen years.
BISYS owns or leases central processors and associated peripheral
equipment used in its data processing operations and communications network,
401(k) business and electronic banking business.
BISYS believes that its existing facilities and equipment, together
with expansion in the ordinary course of business, are adequate for its present
and foreseeable needs.
ITEM 3. LEGAL PROCEEDINGS.
BISYS is involved in litigation arising in the ordinary course of
business. Management believes that BISYS has adequate defenses and/or insurance
coverage against claims arising in such litigation and that the outcome of these
proceedings, individually or in the aggregate, will not have a material adverse
effect upon BISYS financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders of the Company
during the fourth quarter of fiscal 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Certain of the information required in Item 5 is incorporated herein by
reference to page 36 of the Company's 2000 Annual Report to Shareholders (the
"Annual Report") under the heading "Market Price Information" and Note 4 to the
Company's consolidated financial statements included therein. The Company
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has not paid or declared any cash dividends during its most recent two fiscal
years. Portions of the Annual Report incorporated by reference in this report
are included in this report as Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this Item 6 is incorporated herein by
reference to page 18 of the Annual Report, included in this report as Exhibit
13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this Item 7 is incorporated herein by
reference to pages 19 through 22 of the Annual Report, included in this report
as Exhibit 13.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
BISYS does not have material exposure to market risk from derivative or
non-derivative financial instruments. BISYS does not utilize such instruments to
manage market risk exposures or for trading or speculative purposes. The Company
does, however, invest available cash and cash equivalents in highly-liquid
financial instruments with original maturities of three month or less. As of
June 30, 2000, BISYS had approximately $70.2 million of cash and cash
equivalents invested in highly-liquid debt instruments purchased with original
maturities of three months or less, including $16.3 million of overnight
repurchase agreements. BISYS believes that potential near-term losses in future
earnings, fair values and cash flows from reasonably possible near-term changes
in the market rates for such instruments are not material to BISYS.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item 8 is incorporated herein by
reference to pages 23 through 35 of the Annual Report, included in this report
as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS IN ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
Pursuant to Instruction G(3) to Form 10-K, the information required by
Items 10 through 13 of this report is incorporated by reference from the
Company's definitive proxy statement, which is expected to be filed with the SEC
pursuant to Regulation 14A within 120 days after the end of the Registrant's
fiscal year.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The consolidated financial statements of the Company as of June 30,
2000 and 1999 and for each of the three fiscal years for the period ended June
30, 2000, together with the report of PricewaterhouseCoopers LLP dated August 4,
2000, are incorporated herein by reference to pages 23 through 35 of the Annual
Report, included in this report as Exhibit 13.
(a)(2) Financial Statement Schedules
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All financial statement schedules are omitted for the reason that they
are either not applicable or not required or because the information required is
contained in the consolidated financial statements or notes thereto.
(a)(3) Reports on Form 8-K
No reports on Form 8-K were filed with the SEC during the
quarter ended June 30, 2000.
(b) Exhibits:
3.1 -- Amended and Restated Certificate of Incorporation of The BISYS
Group, Inc. (Incorporated by reference to the Registrant's
Registration Statement No. 333-02932.)
3.2 -- Amended and Restated By-Laws of The BISYS Group, Inc.,
(Incorporated by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the year ended June 30, 1997.)
4.1 -- Rights Agreement, dated as of May 8, 1997, by and between
The BISYS Group, Inc. and The Bank of New York, as Rights
Agent (including the form of Rights Certificate as Exhibit A).
(Incorporated by reference to Exhibit 2.1 of Form 8-A filed on
May 8, 1997 with the SEC.)
10.1 -- Letter Agreement dated May 12, 1995 between the Registrant
and Lynn J. Mangum. (Incorporated by reference to Exhibit
10.18 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1995, Commission File No. 0-19922.)
10.2 -- Deferred Compensation Plan (Incorporated by reference to
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998, Commission File No.
0-19922.)
10.3 -- Executive Life Insurance Plan (Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998, Commission File No.
0-19922.)
10.4 -- The BISYS Group, Inc. Executive Officer Annual Incentive Plan.
(Incorporated by reference to Exhibit C to Registrant's proxy
statement for its 1999 annual meeting of stockholders,
Commission File No. 0-19922.)
10.5 -- The BISYS Group, Inc. Amended and Restated Stock Option and
Restricted Stock Purchase Plan. (Incorporated by reference to
Exhibit 10.23 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1994, Commission File No.
0-19922.)
10.6 -- The BISYS Group, Inc. 1995 Stock Option Plan. (Incorporated
by reference to Exhibit A to the Registrant's proxy statement
for its 1995 annual meeting of stockholders, filed with the
SEC, Commission File No. 0-19922.)
10.7 -- The BISYS Group, Inc. 1996 Stock Option Plan. (Incorporated
by reference to Exhibit A to Registrant's proxy statement for
its 1996 annual meeting of stockholders, Commission File No.
0-19922.)
10.8 -- The BISYS Group, Inc. 1999 Equity Participation Plan.
(Incorporated by reference to Exhibit B to Registrant's proxy
statement for its 1999 annual meeting of stockholders,
Commission File No. 0-19922.)
10.9 -- BISYS 401(k) Savings Plan. (Incorporated by reference to
Exhibit 10.7 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1999, Commission File No.
0-19922.)
10.10 -- The BISYS Group, Inc. Non-Employee Directors' Stock Option
Plan, as amended (Incorporated by reference to Exhibit 10.8 to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1998, Commission File No. 0-19922.)
10.11 -- Executive Loan Agreement (Incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999, Commission File No.
0-19922.)
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10.12 -- Lease of Little Falls, New Jersey facility dated January 9,
1991. (Incorporated by reference to Exhibit 10.24 of the
Registrant's Registration Statement No. 33-45417.)
10.13* -- Extension and Fourth Modification of Lease for Little Falls,
New Jersey facility dated March 30, 2000.
10.14 -- Lease of Cherry Hill, New Jersey facility dated November 29,
1990. (Incorporated by reference to Exhibit 10.25 of the
Registrant's Registration Statement No. 33-45417.)
10.15* -- Lease Renewal for Cherry Hill, New Jersey facility dated
August 17, 2000.
10.16 -- Lease of Lombard, Illinois facility dated May 29, 1990.
(Incorporated by reference to Exhibit 10.27 of the
Registrant's Registration Statement No. 33-45417.)
10.17* -- Lease Amendment for Lombard, Illinois facility dated March 28,
2000.
10.18 -- Lease of Houston, Texas facility dated June 30, 1986.
(Incorporated by reference to Exhibit 10.28 of the
Registrant's Registration Statement No. 33-45417.)
10.19 -- Lease of Ambler, Pennsylvania facility dated April 4, 1989.
(Incorporated by reference to Exhibit 10.29 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1993, Commission File No. 0-19922.)
10.20 -- Lease of Columbus, Ohio facility dated August 30, 1994 as
amended by First Amendment dated April 14, 1995. (Incorporated
by reference to Exhibit 10.36 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1995,
Commission File No. 0-19922.)
10.21 -- Lease of New York, New York facility dated February 26,
1998 (Incorporated by reference to Exhibit 10.15 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998, Commission File No. 0-19922.)
10.22 -- Lease of Harrisburg, Pennsylvania facility dated October
24, 1997 (Incorporated by reference to Exhibit 10.16 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998, Commission File No. 0-19922.)
10.23* -- Lease of Atlanta, Georgia facility dated December 9, 1999.
10.24 -- Credit Agreement by and among The BISYS Group, Inc., the
Lenders party thereto, The Chase Manhattan Bank, The First
National Bank of Chicago, First Union National Bank and Fleet
Bank, National Association, as co-Agents, and The Bank of New
York, as Administrative Agent, with BNY Capital Markets, Inc.,
as Arranger, dated as of June 30, 1999, without exhibits.
(Incorporated by reference to Exhibit 10.17 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999, Commission File No. 0-19922.)
10.25 -- Stock Purchase Agreement dated as of May 26, 2000, between
The BISYS Group, Inc. and PRIMEDIA, Inc. relating to the
acquisition of Pictorial, Inc. (Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K for
the date July 1, 2000, Commission File No. 0-19922.)
13* -- Pages 18 - 36 of the Registrant's 2000 Annual Report to
Shareholders.
21* -- List of significant subsidiaries of The BISYS Group, Inc.
23* -- Consent of PricewaterhouseCoopers LLP.
27* -- Financial Data Schedule
*Filed herewith.
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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.
The BISYS Group, Inc.
Date: September 15, 2000 By: /s/ Dennis R. Sheehan
-----------------------------------
Dennis R. Sheehan
Executive Vice President and
Chief Financial Officer
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 indicated on the 15th day of September, 2000.
Signature Title
--------- -----
/s/ Lynn J. Mangum Director, Chairman of the Board, President and Chief
- ---------------------------------- Executive Officer (Principal Executive Officer)
(Lynn J. Mangum)
/s/ Dennis R. Sheehan Executive Vice President and Chief Financial Officer
- ---------------------------------- (Principal Financial and Accounting Officer)
(Dennis R. Sheehan)
/s/ Robert J. Casale Director
- ----------------------------------
(Robert J. Casale)
/s/ Thomas A. Cooper Director
- ----------------------------------
(Thomas A. Cooper)
/s/ Jay W. DeDapper Director
- ----------------------------------
(Jay W. DeDapper)
/s/ John J. Lyons Director
- ----------------------------------
(John J. Lyons)
/s/ Thomas E. McInerney Director
- ----------------------------------
(Thomas E. McInerney)
/s/ Joseph J. Melone Director
- ----------------------------------
(Joseph J. Melone)
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INDEX TO EXHIBITS FILED HEREWITH
EXHIBIT NO. DESCRIPTION
10.13 -- Extension and Fourth Modification of Lease for Little
Falls, New Jersey facility dated March 30, 2000.
10.15 -- Lease Renewal for Cherry Hill, New Jersey facility dated
August 17, 2000.
10.17 -- Lease Amendment for Lombard, Illinois facility dated March
28, 2000.
10.23 -- Lease of Atlanta, Georgia facility dated December 9, 1999.
13 -- Pages 18 - 36 of the Registrant's 2000 Annual Report to
Shareholders.
21 -- List of significant subsidiaries of The BISYS Group, Inc.
23 -- Consent of PricewaterhouseCoopers LLP
27 -- Financial Data Schedule