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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1999
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 07424
LITTLE FALLS, NEW JERSEY (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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 17, 1999: $1,206,368,891.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of September 17, 1999: 27,238,659 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 1999 Annual Report to Shareholders -- Part II and IV; Proxy Statement for
November 12, 1999 Annual Meeting -- Part III
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THE BISYS GROUP, INC.
FORM 10-K
JUNE 30, 1999
PAGE
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PART I
Item 1. Business.................................................... 2
Item 2. Properties.................................................. 14
Item 3. Legal Proceedings........................................... 14
Item 4. Submission of Matters to a Vote of Security Holders......... 14
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters......................................... 14
Item 6. Selected Financial Data..................................... 15
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 15
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 15
Item 8. Financial Statements and Supplementary Data................. 15
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 16
PART III
Item 10. Directors and Executive Officers of the Registrant.......... 16
Item 11. Executive Compensation...................................... 16
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 16
Item 13. Certain Relationships and Related Transactions.............. 16
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K......................................................... 16
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PART I
ITEM I. BUSINESS.
The BISYS(R) Group, Inc. and its wholly-owned subsidiaries ("BISYS" or the
"Company") supports more than 9,000 financial institutions and corporate clients
through its integrated business units. BISYS provides technology outsourcing,
check imaging applications and brokerage services to more than 1,000 financial
institutions nationwide; distributes and administers over 60 families of mutual
funds consisting of more than 500 portfolios; provides retirement plan record
keeping services to over 7,000 companies in partnership with many of the
nation's leading bank and investment management companies; and provides
insurance distribution solutions, professional certification training and
continuing professional education, enterprise-wide networking services, and
loan/deposit product pricing research.
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:
March 1995 -- Concord Holding Corporation, now part of BISYS Fund
Services, creates, markets and administers proprietary mutual funds,
primarily for banks;
May 1995 -- Document Solutions, Inc., now known as BISYS Document
Solutions, offers check and document imaging solutions to banks;
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 known as BISYS Insurance 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 and 24-hour
monitoring and performance analysis for multi-vendor local and wide area
network environments;
August 1997 -- Dascit/White & Winston, Inc. and affiliated companies,
now part of BISYS Insurance Services, an outsourcer of group health care
and life insurance services;
September 1997 -- Benefit Services, Inc., now part of BISYS Insurance
Services, an outsourcer of long-term health care insurance services;
May 1998 -- Underwriters Service Agency, now part of BISYS Insurance
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;
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August 1998 -- The Potomac Group, now part of BISYS Insurance
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. ("EXAMCO"), now part of BISYS 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 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. ("HML"), the parent company of Dover
International, and affiliated entities, now part of BISYS Education
Services, a provider of professional certification training, continuing
education and other support services for the financial services industry;
and
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.
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 SERVING CLIENTS. BISYS seeks to strengthen its long-term
business partnerships by offering new products and services that enable its
clients to grow. BISYS's technologically enhanced solutions are designed to
improve its clients' performance and their competitive position in response
to changing market demands.
GROW INTERNALLY AND SELL AGGRESSIVELY. BISYS seeks to grow internally
by aggressively selling services to new clients and cross-selling
additional services to existing clients through focused sales in growth
markets. BISYS also seeks to develop and sell new services and products to
clients that help them retain existing customers, and attract additional
customers from new markets. BISYS seeks to grow with and profit from its
clients as a growth-focused business partner.
EXPLOIT BUSINESS AND PRODUCT SYNERGY. BISYS seeks to capitalize on
the synergies among its business units and to acquire complementary
companies that support its client relationships and long-term business
objectives. Strategic acquisitions represent an important growth tool for
BISYS. To enhance shareholder value, BISYS seeks to combine conservative
valuation discipline and transition experience to achieve market synergies
and operating leverage.
LEVERAGE TECHNOLOGICAL ADVANCEMENTS. BISYS seeks to maintain its
leadership position in providing competitive, value-added outsourcing
solutions through investment in new technology and the further integration
of BISYS system capabilities.
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OPTIMIZE HUMAN RESOURCES. BISYS seeks to attract and retain
executives, technical staff and financial services professionals with the
expertise required to enable BISYS to explore and develop new opportunities
that will sustain its growth and market leadership position.
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.
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, utilizing network computing
technologies. The TOTALPLUS 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.
With the acquisition of the Retained Asset Account business of State Street
Bank & Trust in June 1999, BISYS has expanded its data processing services to
include servicing the retained asset programs of insurance companies. This data
processing will be 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 900 banks, credit unions and service bureaus are using BISYS image-based
technology software representing approximately 70% 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, 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 provides a complete package of enterprise-wide network management
solutions including planning, design and implementation of multi-vendor network
environments. Its services include its Inframax(R) remote network monitoring and
management system which supervises the network and the operating system and
related software that resides on the network. This automated round-the-clock
service provides monitoring, fault identification and anticipation and overall
network performance reporting.
BISYS gathers information on deposit, consumer and mortgage loan products,
and indirect lending rates offered by more than 5,000 banks, thrifts, credit
unions and captive finance companies on a daily, weekly, or monthly basis. BISYS
markets and transmits this information in various formats and frequencies to
over 1,500
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client institutions, including 23 of the nation's top 25 commercial banks (based
on total assets). This data is used by both money center and community banks to
support their daily pricing decisions.
BISYS INVESTMENT SERVICES
BISYS Investment Services provides distribution, administration, fund
accounting and transfer agency services to over 60 mutual fund complexes
encompassing more than 500 individual portfolios with a market value exceeding
$250 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 (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.
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 and Guernsey, Channel Islands 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 more than 7,000 corporate-sponsored retirement plans
covering more than 750,000 employee participants.
BISYS acts as a comprehensive administrator, distributor and marketer of a
variety of investment products and services. This division supports the
investment programs of more than 120 financial organizations and clears
transactions for more than 1,500 mutual funds, provides support for multi-fund
wrap accounts and provides third party marketing of brokerage and specialized
insurance products to financial institutions.
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
75,000 insurance agents and brokers nationwide. BISYS offers a
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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 more than
3,500 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.
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 the
outstanding shares of the fund.
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 fee structure for networking services is
based on an annual fee for remote monitoring and a one-time fee for project
services. 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 education services are provided to
customers on an "as-needed" basis pursuant to long-term programs which are, in
some cases, recommended by BISYS to its customers.
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 clients located outside the United States for fiscal
1997, 1998 and 1999, was approximately $1.5 million, $2.0 million and $10.8
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. BISYS has also
developed and markets a
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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 is addressing the Year 2000 issues associated with its existing
computer systems, software applications, communications systems and other
technology equipment utilizing both internal and external resources to identify
and remediate these matters throughout the organization. The Company has
completed its risk assessment and testing plans for internal mission critical
information systems and continues to remediate other systems that are not
currently Year 2000 ready. The Company has tested substantially all of its
internal mission critical information systems and believes such systems are Year
2000 ready (i.e. that such systems will perform essential functions before and
after December 31, 1999).
The Company uses third party provided software and systems in certain of
its businesses for such tasks as account and information statement processing,
fund accounting and 401(k) plan record keeping. If third parties upon which the
Company depends, including telecommunications and electrical power providers,
are unable to address their Year 2000 issues in a timely manner, it could result
in a material adverse financial risk to the Company. The Company has received
assurances from its suppliers of mission critical systems, software and services
that such systems, software and services are Year 2000 ready.
The Company has projected what it believes to be the most reasonably likely
worst case scenarios related to potential Year 2000 failures and disruptions.
These scenarios include internal computer system failures, failures of third
party provided software and systems. In order to mitigate this risk, the Company
has devoted resources necessary to develop appropriate business continuity
plans. These contingency plans include alternative systems and vendors, disaster
recovery hot sites, alternative power sources and manual processes. Such
contingency plans have been substantially completed. While the Company's
contingency plans are designed to mitigate the effect of Year 2000 failures, any
Year 2000 failure could result in significant business interruption despite the
implementation of contingency plans.
The Company's Year 2000 progress, the testing of remediated software and
contingency plans have been and will continue to be the subject of verification
and validation by the Company's Internal Audit function. Internal Audit reports
on Year 2000 are reviewed by senior management and the Company's Board of
Directors.
The Company believes it has developed an effective plan to address the Year
2000 issues and that, based on information presently available to the Company,
its Year 2000 transition will not have a material effect on its business,
operations or financial results. However, due to the general uncertainty
inherent in the Year 2000 issue, including the readiness of third parties, the
Company is unable to provide assurances whether, or to what extent, failures
associated with the Year 2000 could occur. Any such failures could have a
material adverse impact on the Company's operations, liquidity and financial
condition. The Company has incurred expenditures for Year 2000 testing and
remediation of approximately $3.0 million in fiscal 1999 and $3.0 million in
fiscal 1998. The Company anticipates expenditures for Year 2000 of approximately
$1.2 million in the first half of fiscal 2000. All Year 2000 expenditures have
been expensed as incurred by the Company.
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 staff at its principal
locations,
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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
funds companies and brokerage firms. BISYS believes that no single competitor
offers the full range of products and services that are offered by BISYS.
Specific competitors include: Fiserv and M&I Data Services for the Information
Services group; First Data, PNC Bank Corp., State Street Bank & Trust Company,
Federated Investors and SEI Corporation for the Investment Services group; and
Ascensus, Ash Brokerage, FiServ, Pictorial and Dearborn Financial Publishing for
the Insurance & Education Services group.
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
1997, 1998 and 1999, BISYS spent approximately $10.4 million, $11.7 million and
$11.5 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 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.
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"),
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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, 1999, each BISYS broker/dealer subsidiary met or
exceeded the requisite net capital requirement. At June 30, 1999, the BISYS
broker/dealer subsidiaries had aggregate net capital of approximately $9.5
million, which exceeded the requirements of the Net Capital Rule by
approximately $7.0 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.
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.
In this regard, the Glass-Steagall Act has been applied to prohibit banks
from engaging in the organization, sponsorship, underwriting and principal
distribution of mutual funds, but not to prohibit banks from providing
investment advisory, administrative, selling and other related services for, to
or with respect to the sale of mutual funds shares to their customers. Other
depository institutions laws, regulations and requirements do not impose
substantive limitations of a material nature on the activities which BISYS
client banks now perform with respect to their proprietary and other mutual
funds, but regulate in various respects the manner in which such activities may
be performed. Nevertheless, future changes in the application or the
interpretation of the Glass-Steagall Act or other banking laws and regulations,
or future legislative changes in existing banking laws, may have a material and
adverse impact on the ability of BISYS client banks to engage
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in mutual fund activities, and consequently on the business relationships
between BISYS and its client banks. BISYS is not presently aware of any pending
regulatory developments, which, if approved, would adversely affect the ability
of its client banks to engage in mutual fund activities. In addition, future
changes in the Glass-Steagall Act may remove the existing prohibition on banks
engaging in the organization, sponsorship, underwriting and principal
distribution of mutual funds, thereby permitting banks to perform certain
functions now required to be performed by third parties such as BISYS. Any such
change could adversely affect BISYS in its business of providing distribution
services by permitting clients to choose to perform distribution functions
independently.
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, 1999, BISYS employed approximately 3,100 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.
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
This Form 10-K contains forward-looking statements. These statements are
identified by words like "expect", "should", "could" and "anticipate". Our
actual results could differ materially from these statements due to risks and
uncertainties, including the ones described below.
Changes in the Glass-Steagall Act could adversely impact our business
The Glass-Steagall Act prohibits banks from selling securities. However,
banks are permitted to purchase and sell securities, as agents, upon the order
and for the account of their customers. Banks are also allowed to provide a wide
variety of services to mutual funds, including investment advisory and
administrative services. If current restrictions under the Glass-Steagall Act
were further relaxed and banks were authorized to
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organize, sponsor and distribute shares of mutual funds, our bank clients could
decide to perform themselves some or all of the services we currently provide to
them. If that were to happen, it could have a material adverse impact on our
business and results of operations.
Direct and indirect governmental regulation can significantly impact our
business
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.
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.
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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 stock price is volatile
The market price of our common stock has been volatile. From January 1,
1998 to June 30, 1999, the last sale price of our common stock ranged from a low
of $32.50 per share to a high of $59.594 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.
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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.
The Year 2000 issue could harm our operations
We are conducting a review of our computer systems and software
applications to identify any systems and applications that could be affected by
the inability of any existing computer systems to process time sensitive data
accurately beyond the year 1999 (referred to as the "Year 2000" issue). We
intend to remediate all significant systems for compliance with the Year 2000
and are also reviewing the adequacy of the process and progress of third party
vendors of systems that may be affected by the Year 2000 issue. We use third
party provided software and computer systems for such tasks as account and
information statement processing, fund accounting, and 401(k) plan
record-keeping. Because of the complexity of the Year 2000 issue and the
interdependence of organizations using various computer systems, we cannot
predict whether our efforts, or those of clients, vendors or other third parties
with whom interact, will be satisfactorily completed in a timely manner. Our
failure to satisfactorily address the Year 2000 issue could have a material
adverse effect on our prospects, business, financial condition and results of
operations. The costs of our Year 2000 efforts are not expected to have a
material adverse effect. However, we cannot assure that we will not experience
costs overruns or delays in connection with our plan for replacing or modifying
systems, which could have a material adverse effect on our prospects, business,
financial condition and results of operations.
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.
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ITEM 2. PROPERTIES.
Other than two office buildings acquired in recent acquisitions, 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, 1999:
LOCATION FUNCTION SQ. FEET EXPIRATION DATE
- -------- -------- -------- ---------------
Little Falls, Corporate headquarters 8,459 2000
NJ
Houston, TX Information Services Service Center 58,568 2001
Cherry Hill, Information Services Data processing 35,850 2000
NJ center
Lombard, IL Information Services Data processing 25,240 2000
center
Columbus, OH Investment Services Service Center 126,686 2005
Ambler, PA Investment Services Service Center 69,399 2002
Birmingham, AL Information Services Service Center 22,104 2000
Harrisburg, PA Insurance & Education Services Service 33,982 2007
Center
New York, NY Investment Services and Insurance & 35,897 2008
Education Services Service Center
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 five years.
BISYS owns or leases central processors and associated peripheral equipment
used in its data and item 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 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 1999.
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 1999 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 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.
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During the fourth quarter of fiscal 1999, the Company issued shares of its
common stock, $.02 par value ("Common Stock"), which were not registered under
the Securities Act of 1933, as amended (the "Securities Act") in certain
acquisition transactions, as follows:
(i) On April 1, 1999, the Company issued an aggregate of 156,985
shares of Common Stock to the stockholders and holders of other equity
interests of EXAMCO in connection with the acquisition of EXAMCO through
the merger of a wholly-owned subsidiary of the Company with and into EXAMCO
(the "EXAMCO Merger"). Of the eight stockholders and equity interest
holders of EXAMCO, one was an accredited investor, three were trusts for
the benefit of the immediate family of such stockholder and the other four
were officers or employees of EXAMCO. There was no underwriter or placement
agent.
In connection with the issuance of shares of Common Stock to the
stockholders and other holders of other equity interests in EXAMCO in the
EXAMCO Merger, the Company relied on an exemption from registration under
Section 4(2) of the Securities Act, based upon, among other things, certain
representations and warranties of the investors, the small number of
investors, the nature of the investors and certain information provided to
the investors with respect to the Company and the EXAMCO Merger.
(ii) On May 28, 1999, the Company issued an aggregate of 190,132
shares of Common Stock to the stockholders of HML, Inc. ("HML"), the parent
company of the Dover entities, in connection with the acquisition of HML
through the merger of a wholly-owned subsidiary of the Company with and
into HML (the "HML Merger"). Of the six stockholders of HML, three were
accredited investors and the other three were officers of subsidiaries of
HML. There was no underwriter or placement agent.
In connection with the issuance of shares of Common Stock to the
stockholders of HML in the HML Merger, the Company relied on an exemption
from registration under Section 4(2) of the Securities Act, based upon,
among other things, certain representations and warranties of the
investors, the small number of investors, the nature of the investors and
certain information provided to the investors with respect to the Company
and the HML Merger.
ITEM 6. SELECTED FINANCIAL DATA.
The information requested in 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 in 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, 1999, BISYS had approximately $49.6 million of cash and cash
equivalents invested in highly-liquid debt instruments purchased with original
maturities of three months or less, including $9.9 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 in Item 8 is incorporated herein by reference to
pages 23 through 35 of the Annual Report, included in this report as Exhibit 13.
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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 in
Items 10 through 13 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, 1999
and 1998 and for each of the three fiscal years for the period ended June 30,
1999, together with the report of PricewaterhouseCoopers LLP dated August 6,
1999, 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
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, 1999.
(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. 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.)
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10.5 -- 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.)
10.6 -- 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.)
10.7* -- BISYS 401(k) Savings Plan.
10.8 -- 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).
10.9 -- 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.)
10.10 -- 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.)
10.11 -- 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.)
10.12 -- 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.)
10.13 -- 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.)
10.14 -- 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.)
10.15 -- 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).
10.16 -- 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).
10.17* -- 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.
10.18 -- Agreement and Plan of Merger dated as of August 21, 1998, as
amended as of August 31, 1998, among The BISYS Group, Inc.,
BI-Green Acquisition Corp., Greenway Corporation and the
shareholders of Greenway Corporation named therein.
(Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K for the date
September 16, 1998, Commission File No. 0-19922.)
10.19 -- Amendment No. 1 dated as of August 31, 1998 to Agreement and
Plan of Merger dated as of August 21, 1998, as amended as of
August 31, 1998, among The BISYS Group, Inc., BI-Green
Acquisition Corp., Greenway Corporation and the shareholders
of Greenway Corporation named therein. (Incorporated by
reference to Exhibit 2.2 to the Registrant's Current Report
on Form 8-K for the date September 16, 1998, Commission File
No. 0-19922.)
13* -- Pages 18 - 36 of the Registrant's 1999 Annual Report to
Shareholders.
21* -- List of significant subsidiaries of The BISYS Group, Inc.
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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.
By: /s/ DENNIS R. SHEEHAN
------------------------------------
Dennis R. Sheehan
Executive Vice President and
Chief Financial Officer
Date: September 28, 1999
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 28th day of September 1999.
SIGNATURE TITLE
--------- -----
/s/ LYNN J. MANGUM Director, Chairman of the Board, President
- --------------------------------------------- and Chief Executive Officer (Principal
(Lynn J. Mangum) Executive Officer)
/s/ DENNIS R. SHEEHAN Executive Vice President and Chief Financial
- --------------------------------------------- Officer (Principal Financial and Accounting
(Dennis R. Sheehan) Officer)
/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
- ------- -----------
10.7 -- BISYS 401(k) Savings Plan
10.17 -- 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
13 -- Pages 18-36 of the Registrant's 1999 Annual Report to
Shareholders.
21 -- List of significant subsidiaries of The BISYS Group, Inc.
23 -- Consent of PricewaterhouseCoopers LLP
27 -- Financial Data Schedule