-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QAcIRlvOauo/r6jTQ69TBFoGEcxsl+oFMfhSOjkKpR0832ZaI0eO0gyrZ0MZamsh nQgQRjuPLHDwUFYXybkIag== 0000950123-01-503168.txt : 20010604 0000950123-01-503168.hdr.sgml : 20010604 ACCESSION NUMBER: 0000950123-01-503168 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BISYS GROUP INC CENTRAL INDEX KEY: 0000883587 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 133532663 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-62154 FILM NUMBER: 1653020 BUSINESS ADDRESS: STREET 1: 150 CLOVE ROAD CITY: LITTLE FALLS STATE: NJ ZIP: 07424 BUSINESS PHONE: 2018128600 MAIL ADDRESS: STREET 1: 150 CLOVE ROAD CITY: LITTLE FALLS STATE: NJ ZIP: 07424 S-3 1 y46783s-3.txt THE BISYS GROUP INC 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 2001 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------------ THE BISYS GROUP, INC. (Exact name of Registrant as specified in its charter) DELAWARE 13-3532663 (State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.) organization)
------------------------------------ 150 CLOVE ROAD, LITTLE FALLS, NJ 07424 (973) 812-8600 FAX: (973) 812-1217 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ------------------------------------ KEVIN J. DELL, ESQ. EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL THE BISYS GROUP, INC. 150 CLOVE ROAD, LITTLE FALLS, NJ 07424 (973) 812-8600 FAX: (973) 812-1217 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: VINCENT J. PISANO, ESQ. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 4 TIMES SQUARE NEW YORK, NY 10036 (212) 735-3000 FAX: (212) 735-2000 ------------------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement. ------------------------------------ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------------------ CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF OF SECURITIES TO BE REGISTERED REGISTERED PER NOTE OFFERING PRICE REGISTRATION FEE - --------------------------------------------------------------------------------------------------------------------------------- 4% Convertible Subordinated Notes due 2006... $300,000,000(1) 102.4%(2)(3) $307,200,000(2)(3) $76,800 Common stock, par value $0.02 per share...... 4,491,870(4) -- -- (5) - ---------------------------------------------------------------------------------------------------------------------------------
(1) Represents the aggregate principal amount at maturity of the notes that were originally issued by the Registrant in March 2001. (2) This estimate is made pursuant to Rule 457(c) of the Securities Act of 1933, as amended, solely for purposes of determining the registration fee. The above calculation is based on the average bid and ask prices for the Registrant's notes in secondary market transactions executed by the Initial Purchasers of the notes on May 30, 2001, as reported to the Registrant by the Initial Purchasers. (3) Exclusive of accrued interest. (4) Represents the number of shares of common stock that are currently issuable upon conversion of the notes registered hereby. The number of shares of common stock that may be issued upon conversion of the notes in the future is indeterminate, and the Registrant is also registering this indeterminate amount pursuant to Rule 416 of the Securities Act. (5) No separate consideration will be received for the shares of common stock issuable upon conversion of the notes and, therefore, no registration fee is required pursuant to Rule 457(i) under the Securities Act. ------------------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED JUNE 1, 2001 PROSPECTUS [BISYS LOGO] THE BISYS GROUP, INC. $300,000,000 4% CONVERTIBLE SUBORDINATED NOTES DUE 2006 AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES We issued the notes in a private placement in March 2001. Under this prospectus, the selling securityholders named in this prospectus or in prospectus supplements may offer and sell their notes and/or the shares of common stock issuable upon conversion of their notes. Holders may surrender the notes for conversion into shares of our common stock at a conversion rate of 14.9729 shares of our common stock per each $1,000 principal amount of notes at any time before the close of business on the maturity date, unless we have previously redeemed or repurchased the notes. The conversion rate may be adjusted as described in this prospectus under "Description of Notes -- Conversion." The notes will mature on March 15, 2006. We will pay interest on the notes in cash on March 15 and September 15 of each year. The first interest payment will be made on September 15, 2001. The notes will bear interest at a fixed annual rate of 4%. We may redeem all or a portion of the notes at any time on or after March 20, 2004 at the prices set forth in this prospectus under "Description of the Notes -- Optional Redemption by BISYS." In addition, upon the occurrence of a change in control occurring on or before March 15, 2006, holders of the notes may require us to repurchase all or a portion of their notes. The notes are general unsecured obligations of BISYS and are subordinated in right of payment to all of our existing and future senior indebtedness and structurally subordinated to the indebtedness and other liabilities of our subsidiaries. Shares of our common stock are quoted on the Nasdaq National Market under the symbol "BSYS." The last reported sale price of our common stock on May 30, 2001 was $51.00 per share. INVESTING IN OUR NOTES OR SHARES OF OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS. We will not receive any of the proceeds from the sale of the notes or the shares of common stock by any of the selling securityholders. The notes and the shares of common stock may be offered in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices. The timing and amount of any sale are within the sole discretion of the selling securityholders. In addition, the shares of common stock may be offered from time to time through ordinary brokerage transactions on the Nasdaq National Market. See "Plan of Distribution." The selling securityholders may be deemed to be "underwriters" as defined in the Securities Act of 1933, as amended. Any profits realized by the selling securityholders may be deemed to be underwriting commissions. If the selling securityholders use any broker-dealers, any commission paid to broker-dealers and, if broker-dealers purchase any notes or shares of common stock as principals, any profits received by such broker-dealers on the resale of the notes or shares of common stock may be deemed to be underwriting discounts or commissions under the Securities Act. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is , 2001. 3 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY BISYS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF BISYS SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE INFORMATION CONTAINED IN THIS PROSPECTUS SPEAKS ONLY AS OF THE DATE OF THIS PROSPECTUS UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES. 4 TABLE OF CONTENTS
PAGE ---- Special Note Regarding Forward-Looking Statements........................... 1 Incorporation of Certain Documents by Reference............................ 1 Prospectus Summary..................... 3 The Offering........................... 4 Risk Factors........................... 6 Use of Proceeds........................ 11 Dividend Policy........................ 11
PAGE ---- Selected Consolidated Financial and Other Data........................... 12 Description of Notes................... 14 Description of Common Stock............ 27 Selling Securityholders................ 29 Plan of Distribution................... 35 Legal Matters.......................... 38 Experts................................ 38 Where You Can Find More Information.... 38
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated by reference in this prospectus contains "forward-looking statements" within the meaning of the securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements other than statements of historical facts included or incorporated by reference in this prospectus, including the statements under "Prospectus Summary -- BISYS" and elsewhere in this prospectus regarding our strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus, the words "will," "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this prospectus. Neither we nor any of the initial purchasers undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this prospectus are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. The cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE This prospectus "incorporates by reference" certain of the reports, proxy and information statements and other information that we have filed with the Commission under the Exchange Act. This means that we are disclosing important information to you by referring you to those documents. The information that we file later with the Commission will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the Commission under sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the securities offered by this prospectus are sold. - Annual Report on Form 10-K for the year ended June 30, 2000, filed on September 15, 2000 (Commission File No. 0-19922); - Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed on May 7, 2001 (Commission File No. 0-19922); - Quarterly Report on Form 10-Q for the quarter ended December 31, 2000, filed on February 12, 2001 (Commission File No. 0-19922); 1 5 - Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, filed on November 14, 2000 (Commission File No. 0-19922); - Current Report on Form 8-K dated July 1, 2000, filed on July 13, 2000 (Commission File No. 0-19922); - Current Report on Form 8-K/A dated September 15, 2000, filed on September 15, 2000 (which includes our pro forma financial statements which give effect to our acquisition of Pictorial Holdings, Inc.) (Commission File No. 0-19922); - Current Report on Form 8-K dated March 8, 2001, filed on March 8, 2001 (Commission File No. 0-19922); - Current Report on Form 8-K dated March 15, 2001, filed on March 15, 2001 (Commission File No. 0-19922); - Definitive Proxy Statement dated October 11, 2000 with respect to the Annual Meeting of Stockholders held on November 16, 2000 (Commission File No. 0-19922); and. - The description of our common stock and purchase rights for shares of our common stock attached to our common stock described in our registration statements on Form 8-A filed with the Commission on March 10, 1992 and on May 8, 1997 pursuant to Section 12 of the Exchange Act (Commission File No. 0-19922) and any amendment or report filed for the purpose of updating those descriptions. All documents that we file with the Commission from the date of this prospectus to the end of the offering of the notes and shares of common stock shall also be deemed to be incorporated herein by reference. Any statement contained in a document incorporated or considered to be incorporated by reference in this prospectus shall be considered to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any subsequently filed document that is or is considered to be incorporated by reference modifies or supersedes such statement. Any statement that is modified or superseded shall not, except as so modified or superseded, constitute a part of this prospectus. You may request a copy of any of the documents which are incorporated by reference in this prospectus, other than exhibits which are not specifically incorporated by reference into such documents, and our Amended and Restated Certificate of Incorporation and By-Laws, at no cost, by writing or telephoning BISYS at the following: The BISYS Group, Inc. 150 Clove Road Little Falls, New Jersey 07424 Attention: Secretary Telephone: (973) 812-8600 2 6 PROSPECTUS SUMMARY This prospectus constitutes part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the "Commission") using a "shelf" registration process. Under this shelf process, any selling securityholder may sell any combination of the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities the selling securityholders may offer. All references to "we," "us," "our," or "BISYS" in this prospectus are to The BISYS Group, Inc. BISYS We and our wholly-owned subsidiaries provide value-added business process outsourcing solutions to more than 15,000 financial institutions and corporate clients through our integrated business units. Our services include: - information processing and check imaging solutions; - distribution and administration of mutual funds; - retirement plan recordkeeping; - insurance distribution solutions; - professional certification training, licensing and continuing education; and - investment industry consulting. We were organized in August 1989 to acquire certain banking and thrift data processing operations of Automatic Data Processing, Inc. ("ADP"). Our 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 our predecessors, we have provided outsourcing solutions to the financial services industry for more than 30 years. Our principal executive offices are located at 150 Clove Road, Little Falls, New Jersey 07424. Our telephone number is (973) 812-8600. 3 7 THE OFFERING Notes Offered................. $300.0 million principal amount of 4% Convertible Subordinated Notes due 2006. Maturity...................... March 15, 2006 Interest...................... The notes bear interest at a fixed annual rate of 4% to be paid in cash every March 15 and September 15 of each year, beginning on September 15, 2001. Conversion.................... The notes are convertible into shares of our common stock at a conversion rate of 14.9729 shares of common stock per $1,000 principal amount of notes. This is equivalent to a conversion price of approximately $66.79 per share. The conversion price may be subject to adjustment under certain circumstances. The notes are convertible at any time before the close of business on the maturity date, unless we have previously redeemed or repurchased the notes. You may convert your notes called for redemption or submitted for repurchase up to and including the close of business on the second business day immediately preceding the date fixed for redemption or repurchase, as the case may be. Subordination................. The notes are general unsecured obligations of BISYS. The notes are subordinated in right of payment to all of our existing and future senior indebtedness and structurally subordinated to the indebtedness and other liabilities of our subsidiaries. We are not prohibited from incurring senior indebtedness or other debt under the indenture. Sinking Fund.................. None. Optional Redemption........... We may redeem some or all of the notes at any time on or after March 20, 2004 at the redemption prices listed in "Description of Notes -- Optional Redemption by BISYS." Change of Control............. Upon the occurrence of a change of control, as described in this prospectus, and before the maturity or redemption of the notes, you will have the right to require us to repurchase all or part of your notes at a price equal to 100% of the principal amount of the notes being repurchased, plus interest and liquidated damages, if any. Trading....................... The notes issued in the initial private placement are eligible for trading in the PORTAL market. However, notes sold using this prospectus will no longer be eligible for trading in the PORTAL market. Our common stock is traded on the Nasdaq National Market under the symbol "BSYS." Use of Proceeds............... We will not receive any of the proceeds from the sale by any selling securityholder of the notes or shares of common stock offered under this prospectus. 4 8 RISK FACTORS An investment in the notes or shares of common stock involves significant risks. You should carefully consider all the information in this prospectus. In particular, you should evaluate the specific risk factors set forth under "Risk Factors," beginning on page 6. 5 9 RISK FACTORS An investment in the notes and shares of common stock involves significant risks. In addition to reviewing other information in this prospectus, you should carefully consider the following factors before deciding to purchase the notes or shares of common stock. This prospectus contains forward-looking statements that involve risk and uncertainties. We use words such as "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions to identify forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this prospectus. We disclaim any obligation to update information contained in any forward-looking statement. RISKS RELATED TO OUR BUSINESS THE ADOPTION OF THE FINANCIAL SERVICES MODERNIZATION ACT OF 1999 COULD ADVERSELY IMPACT OUR BUSINESS BY EXPANDING THE POWERS OF OUR BANKING CLIENTS AND REDUCING THEIR OUTSOURCING. The 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, we expect that some of our bank customers with proprietary mutual funds may, over time, internalize certain distribution functions that we currently provide. 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, WHICH REDUCES OUR FLEXIBILITY AND INCREASES THE COSTS OF DOING BUSINESS. Our business is affected by federal, state and foreign 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 Securities and Exchange Commission 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 6 10 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 SECURITIES MARKETS. 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 securities 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. CONSOLIDATION IN THE BANKING AND FINANCIAL SERVICES INDUSTRY COULD ADVERSELY IMPACT OUR BUSINESS BY ELIMINATING THE NUMBER OF EXISTING AND POTENTIAL CLIENTS. 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, INCLUDING INCREASED DEBT, ASSUMPTION OF UNFORESEEN LIABILITIES AND DIFFICULTIES IN INTEGRATING OPERATIONS. 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. 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 7 11 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. If our systems were infiltrated and damaged by unauthorized persons, our clients could experience data loss, financial loss and significant business interruption. If that were to occur, it could have a material adverse effect on our business, financial condition and results of operations. 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, MOST OF WHOM DO NOT HAVE LONG TERM EMPLOYMENT AGREEMENTS. Our success depends upon the continued services of our key senior management personnel, including our executive officers and the senior managers of our businesses. None of our executive officers have employment agreements with us and substantially all of our other senior management personnel do not have employment agreements with us. The loss or unavailability of these individuals could have a material adverse effect on our business prospects. WE DEPEND ON OUR ABILITY TO ATTRACT AND RETAIN SKILLED PERSONNEL. Our success 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 you that we will be able to attract and retain personnel on acceptable terms in the future. Our inability to attract and retain highly skilled personnel could have an adverse effect on our business. RISKS RELATED TO THE NOTES THE PRICE OF OUR COMMON STOCK AND THE PRICE OF OUR NOTES MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY RESULT IN LOSSES FOR INVESTORS. The market price for our common stock may be volatile. We expect our stock to be subject to fluctuations as a result of a variety of factors, including factors beyond our control. These include: - quarterly variations in operating results; - changes in financial estimates by securities analysts; - changes in market valuations of related companies; - announcements by us or our competitors of new products or of significant acquisitions, strategic partnerships or joint ventures; - any loss of a major customer; - additions or departures of key personnel; - any deviations in net revenues or in losses from levels expected by securities analysts; and - future sales of common stock. We may fail to meet expectations of our stockholders or of analysts at some time in the future, and our stock price, and therefore the price of our notes, could decline as a result. 8 12 THE NOTES ARE SUBORDINATED, AND HOLDERS OF SENIOR INDEBTEDNESS WILL BE PAID BEFORE HOLDERS OF THE NOTES ARE PAID. The notes are unsecured and subordinated in right of payment to all of our existing and future senior indebtedness. Following the initial offering of the notes and the application of the net proceeds, we had no senior indebtedness outstanding, but we may incur new senior indebtedness. We are not prohibited from incurring debt, including indebtedness secured by our assets, under the indenture. In the event of our bankruptcy, liquidation or reorganization or upon acceleration of the notes due to an event of default under the indenture and in certain other events, our assets will be available to pay obligations on the notes only after all of our senior indebtedness has been paid. As a result, there may not be sufficient assets remaining to pay amounts due on any or all of the outstanding notes. See "Description of Notes -- Subordination of Notes." OUR INDEBTEDNESS IS EFFECTIVELY SUBORDINATED TO THE INDEBTEDNESS OF OUR SUBSIDIARIES. Although following the application of the net proceeds from the initial offering of the notes to repay borrowings under our existing credit facility to which certain of our subsidiaries are guarantors, our subsidiaries had no outstanding indebtedness, the notes will be effectively subordinated in right of payment to any future indebtedness and other liabilities of our subsidiaries, including guarantees of any future borrowings under our credit facility. The notes are not guaranteed by any of our subsidiaries. Our cash flow and ability to service our indebtedness, including the notes, will depend upon the cash flow of our subsidiaries and payments of funds by those subsidiaries to us in the form of repayment of loans, dividends or otherwise. These subsidiaries are separate and distinct legal entities with no legal obligation to pay any amounts due on the notes or to make funds available therefor. In addition, our subsidiaries may become parties to financing arrangements that contain limitations on the ability of our subsidiaries to pay dividends or to make loans or advances to us or otherwise make cash flow available to us. Neither we nor our subsidiaries are prohibited from incurring debt, including senior indebtedness, under the indenture. If we or our subsidiaries incur additional debt or liabilities, our ability to pay our obligations on the notes could be adversely affected. THERE IS NO PUBLIC MARKET FOR THE NOTES, WHICH COULD LIMIT THEIR MARKET PRICE OR YOUR ABILITY TO SELL THEM FOR THEIR INHERENT VALUE. The notes are a new issue of securities for which there currently is no active trading market. As a result, we cannot provide any assurances that an active trading market will develop for the notes or that you will be able to sell your notes. The notes may trade at a discount from their initial offering price. Future trading prices of the notes will depend on many factors, including prevailing interests rates, the market for similar securities, general economic conditions and our financial condition, performance and prospects. Historically, the market for convertible debt has been subject to disruptions that have caused substantial fluctuations in the prices of the securities. Accordingly, you may be required to bear the financial risk of an investment in the notes for an indefinite period of time. We do not intend to apply for listing or quotation of the notes. The notes, however, are designated for trading in the PORTAL market. We have been informed by the initial purchasers of the notes that they intend to make a market in the notes. The initial purchasers are not obligated to do so, and they may cease their market-making at any time without notice. In addition, this market-making activity will be subject to the limitations imposed by the Securities Act and the Securities Exchange Act of 1934, as amended, and may be limited during the effectiveness of a registration statement relating to the notes. See "Description of Notes." WE WILL HAVE BROAD DISCRETION WITH RESPECT TO THE USE OF PROCEEDS FROM THIS OFFERING. The net proceeds of the initial offering were approximately $292.0 million. Our management will retain broad discretion as to the use and allocation of the proceeds remaining after we repay borrowings 9 13 under our existing credit facility. Accordingly, you will not have the opportunity to evaluate the economic, financial and other relevant information that we may consider in the application of the net proceeds. RISKS RELATED TO OUR COMMON STOCK 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. In addition, our existing credit facility limits our ability to pay cash dividends. OUR STOCK PRICE HAS BEEN AND IS LIKELY TO CONTINUE TO BE VOLATILE. The market price of our common stock has been volatile. From January 1, 1999 to May 30, 2001, the last sale price of our common stock ranged from a low of $20.98 per share to a high of $56.625 per share. FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE AND THE PRICE FOR THE NOTES. Sales of a substantial number of shares of our common stock in the public market, or the appearance that such shares are available for sale, could adversely affect the market price for our common stock. As of April 30, 2001, we had 58,084,850 shares of common stock outstanding. As of April 30, 2001, we also had options to purchase 7,396,098 shares of our common stock outstanding and 4,606,308 shares of our common stock reserved for issuance pursuant to options available for issuance under our stock option plans and employee stock purchase plan. ANTI-TAKEOVER EFFECTS OF CERTAIN BY-LAW PROVISIONS, DELAWARE LAW, THE INDENTURE AND OUR SHAREHOLDER RIGHTS PLAN COULD DISCOURAGE, DELAY OR PREVENT A CHANGE IN CONTROL. We have a shareholder rights plan. Under the plan, each holder of shares of our common stock will receive a right 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 shares of common 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. The indenture relating to the notes provides that in the event of certain changes in control, each holder of the notes will have the right to require us to repurchase such holder's notes at a premium over the principal amount of the notes. 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. 10 14 USE OF PROCEEDS We will not receive any of the proceeds from the sale by any selling securityholder of the notes or the shares of common stock offered in this prospectus. DIVIDEND POLICY We have not paid any cash dividends since our inception. We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business. In addition, our existing credit facility limits our ability to pay cash dividends. Thus, we do not anticipate paying any cash dividends on our capital stock in the foreseeable future. 11 15 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA The selected consolidated financial and other data set forth below should be read together with our consolidated financial statements and the related notes thereto and with "Management's Discussion and Analysis of Results of Operations and Financial Condition," both which are incorporated by reference herein. The selected consolidated financial and other data for the years ended June 30, 1996, 1997, 1998, 1999 and 2000, and for the nine months ended March 31, 2000 and 2001 are derived from our audited consolidated financial statements and our unaudited Quarterly Report on Form 10-Q incorporated by reference herein. Historical results are not necessarily indicative of results that may be expected in the future.
(UNAUDITED) NINE MONTHS ENDED YEARS ENDED, JUNE 30, MARCH 31, ----------------------------------------------------- ------------------- 1996 1997 1998 1999 2000 2000 2001 -------- -------- -------- -------- --------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) STATEMENT OF OPERATIONS DATA: Revenues.......................... $247,061 $318,988 $386,344 $472,676 $ 571,401 $416,014 $507,103 -------- -------- -------- -------- --------- -------- -------- Operating costs and expenses: Service and operating........... 131,708 170,717 221,767 266,800 326,315 241,432 292,574 General and administrative...... 39,980 54,638 58,061 69,696 78,719 57,901 65,509 Selling and conversion.......... 9,248 12,410 17,064 22,509 26,949 20,403 23,212 Research and development........ 10,176 10,408 11,731 11,523 12,504 9,187 8,823 Amortization of intangibles..... 3,811 3,613 3,819 7,756 11,444 8,520 14,639 Business divestitures, merger expenses and other charges, net........................... 22,250 1,500 11,998 400 (520) -- 4,245 Acquired in-process research and development................... -- -- -- 19,000 -- -- -- -------- -------- -------- -------- --------- -------- -------- Operating earnings................ 29,888 65,702 61,904 74,992 115,990 78,571 98,101 Interest income, net.............. 372 2,216 4,849 1,200 49 (562) (4,763) -------- -------- -------- -------- --------- -------- -------- Income before income tax provision....................... 30,260 67,918 66,753 76,192 116,039 78,009 93,338 Income tax provision.............. 12,236 27,167 26,729 38,076 45,835 30,813 36,869 -------- -------- -------- -------- --------- -------- -------- Net income........................ $ 18,024 $ 40,751 $ 40,024 $ 38,116 $ 70,204 $ 47,196 $ 56,469 ======== ======== ======== ======== ========= ======== ======== Basic earnings per share(1)....... $ 0.38 $ 0.81 $ 0.76 $ 0.71 $ 1.28 $ 0.86 $ 0.99 Diluted earnings per share(1)..... $ 0.36 $ 0.77 $ 0.73 $ 0.68 $ 1.23 $ 0.83 $ 0.94 Basic weighted average shares outstanding(1).................. 47,484 50,076 52,628 53,392 54,916 54,712 56,966 Diluted weighted average shares outstanding(1).................. 50,136 52,714 54,694 55,872 56,986 56,768 59,776 OTHER FINANCIAL DATA: Depreciation...................... $ 6,154 $ 8,146 $ 11,092 $ 15,804 $ 19,198 $ 14,182 $ 16,286 Amortization of intangible assets.......................... 3,811 3,613 3,819 7,756 11,444 8,520 14,639 Capital expenditures.............. 12,698 15,974 16,930 27,740 27,963 20,466 21,212 Ratio of earnings to fixed charges(2)...................... 6.1x 13.8x 12.4x 10.3x 12.7x 10.8x 8.2x SUPPLEMENTAL DATA: Adjusted EBITDA(3)................ $ 62,103 $ 78,961 $ 88,813 $117,952 $ 146,112 $101,273 $133,271 Operating results(4).............. 55,949 70,815 77,721 102,148 126,914 87,091 116,985 Net cash from operating activities...................... 39,720 46,341 62,619 52,300 90,018 64,131 78,306 Net cash from (used in) investing activities...................... (3,245) (11,832) (50,324) (91,142) (130,828) (14,571) (93,343) Net cash from (used in) financing activities...................... (4,487) 6,158 1,157 (4,972) 61,398 (46,482) 201,377
12 16
(UNAUDITED) JUNE 30, MARCH 31, ----------------------------------------------------- ------------------- 1996 1997 1998 1999 2000 2000 2001 -------- -------- -------- -------- --------- -------- -------- (IN THOUSANDS) BALANCE SHEET DATA: Cash and cash equivalents......... $ 39,284 $ 79,951 $ 93,403 $ 49,589 $ 70,177 $ 52,667 $256,517 Working capital, exclusive of short-term borrowings........... 40,448 87,641 97,822 74,084 99,598 75,527 306,482 Total assets...................... 214,625 265,085 334,101 459,661 601,051 465,877 904,028 Long-term debt, including current maturities...................... 1,974 1,668 1,702 -- -- -- 300,000 Short-term borrowings(5).......... -- -- -- 52,000 115,000 9,000 -- Stockholders' equity.............. 143,172 191,919 238,290 288,506 361,641 334,682 462,237
- --------------- (1) Restated for effect of 2 for 1 stock split. (2) These ratios are calculated by dividing (a) earnings before income taxes adjusted for fixed charges by (b) fixed charges. Fixed charges included interest expense plus capitalized interest costs and the portion of operating rental expense which we believe is representative of the interest component of rental expense. (3) Adjusted EBITDA represents EBITDA before giving effect to other special charges in connection with business divestitures, merger expenses and other charges, and write-off of acquired in-process research and development costs aggregating $22.2 million, $1.5 million, $12.0 million, $19.4 million and $(0.5) million in fiscal years ended June 30, 1996, 1997, 1998, 1999 and 2000, respectively, and $0 and $4.2 million for the nine months ended March 31, 2000 and 2001, respectively. EBITDA consists of net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is presented because we believe it is an indicator of our ability to incur and service debt and is used by our lenders in determining compliance with financial covenants. However, Adjusted EBITDA should not be considered as an alternative to cash flow from operating activities, as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with generally accepted accounting principles. Our definition of Adjusted EBITDA may differ from definitions of Adjusted EBITDA used by other companies. (4) Operating results represent operating earnings before amortization of intangibles, business divestitures, merger expenses and other charges, and write-off of acquired in-process research and development costs. (5) Includes amounts outstanding under our $300 million revolving credit facility. Our revolving credit facility bears interest at prime or, at our option, LIBOR plus a margin not to exceed 1.325% based on a leverage ratio schedule. 13 17 DESCRIPTION OF NOTES We issued the notes under an indenture dated as of March 13, 2001, between us and Chase Manhattan Trust Company, National Association, as trustee. The terms of the notes include those provided in the indenture and those provided in the registration rights agreement dated as of March 13, 2001, between us and Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation. The following description is only a summary of the material provisions of the notes, the indenture and the registration rights agreement and is not complete. We urge you to read these documents in their entirety because they, and not this description, define your rights as holders of these notes. You may request copies of these documents at our address set forth below under "Where You Can Find More Information." GENERAL The notes are unsecured general obligations of BISYS and are subordinate in right of payment as described under "Subordination of Notes." The notes are convertible into shares of our common stock as described under "Conversion of Notes." The notes are limited to $300,000,000 aggregate principal amount at maturity. The notes were issued only in denominations of $1,000 or in multiples of $1,000. The notes will mature on March 15, 2006, unless earlier redeemed by us at our option or purchased by us at your option upon a change in control. We are not restricted from paying dividends, incurring debt, or issuing or repurchasing our securities under the indenture. In addition, there are no financial covenants in the indenture. You are not protected under the indenture in the event of a highly leveraged transaction or a change in control of BISYS, except to the extent described under "Purchase of Notes at Your Option Upon a Change in Control." The notes will bear interest at the annual rate of 4%. Interest will be payable on March 15 and September 15 of each year, beginning September 15, 2001, subject to limited exceptions if the notes are redeemed or purchased prior to the interest payment date. The record dates for the payment of interest will be March 1 and September 1. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. We will maintain an office in The City of New York where the notes may be presented for registration, transfer, exchange or conversion. This office will initially be an office or agency of the trustee. CONVERSION OF NOTES You have the right, at your option, to convert your notes into shares of our common stock at any time prior to maturity, unless previously redeemed or purchased, at the conversion price of approximately $66.79 per share, subject to the adjustments described below. You may convert the notes in denominations of $1,000 and multiples of $1,000. Except as described below, we will not make any payment or other adjustment for accrued interest on the notes or dividends on any common stock issued upon conversion of the notes. If you submit your notes for conversion between a record date for an interest payment and the opening of business on the next interest payment date (except for notes or portions of notes called for redemption on a redemption date occurring during the period from the close of business on a record date and ending on the opening of business on the first business day after the next interest payment date, or if this interest payment date is not a business day, the second business day after the interest payment date), you must pay funds equal to the interest payable on the principal amount to be converted. We will not issue fractional shares of common stock upon conversion of notes. Instead, we will pay a cash amount based upon the closing market price of the common stock on the last trading day prior to the date of conversion. If the notes are called for redemption or are subject to purchase following a change in control, your conversion rights on the notes called for redemption or so subject to purchase will expire at the close of business on the second business day before the redemption date or purchase date, as the case may be, unless we default in the payment of the redemption price or purchase price. If you have submitted your notes for purchase upon a 14 18 change in control, you may only convert your notes if you withdraw your election in accordance with the indenture. The conversion price will be adjusted upon the occurrence of: (1) the issuance of shares of our common stock as a dividend or distribution on our common stock; (2) the subdivision or combination of our outstanding common stock; (3) the issuance to all or substantially all holders of our common stock of rights or warrants entitling them for a period of not more than 60 days to subscribe for or purchase our common stock, or securities convertible into our common stock, at a price per share or a conversion price per share less than the then current market price per share, provided that the conversion price will be readjusted to the extent that such rights or warrants are not exercised prior to the expiration; (4) the distribution to all or substantially all holders of our common stock of shares of our capital stock, evidences of indebtedness or other non-cash assets or rights or warrants, excluding: - dividends, distributions and rights or warrants referred to in clause (1) or (3) above; and - dividends or distributions exclusively in cash referred to in clause (5) below. (5) the distribution to all or substantially all holders of our common stock of all-cash distributions in an aggregate amount that together with (A) any cash and the fair market value of any other consideration payable in respect of any tender offer by us or any of our subsidiaries for our common stock consummated within the preceding 12 months not triggering a conversion price adjustment and (B) all other all-cash distributions to all or substantially all holders of our common stock made within the preceding 12 months not triggering a conversion price adjustment exceeds an amount equal to 10% of our market capitalization on the business day immediately preceding the day on which we declare such distribution; and (6) the purchase of our common stock pursuant to a tender offer made by us or any of our subsidiaries to the extent that the same involves aggregate consideration that together with (A) any cash and the fair market value of any other consideration payable in respect of any tender offer by us or any of our subsidiaries for our common stock consummated within the preceding 12 months not triggering a conversion price adjustment and (B) all-cash distributions to all or substantially all holders of our common stock made within the preceding 12 months not triggering a conversion price adjustment, exceeds an amount equal to 10% of our market capitalization on the expiration date of such tender offer. In the event of: - any reclassification of our common stock, or - a consolidation, merger or combination involving BISYS, or - a sale or conveyance to another person of the property and assets of BISYS as an entirety or substantially as an entirety, in which holders of our outstanding common stock would be entitled to receive stock, other securities, other property, assets or cash for their common stock, holders of notes will generally be entitled to convert their notes into the same type of consideration received by common stock holders immediately prior to one of these types of events. 15 19 You may, in some circumstances, be deemed to have received a distribution or dividend subject to United States federal income tax as a result of an adjustment or the nonoccurrence of an adjustment to the conversion price. We are permitted to reduce the conversion price of the notes by any amount for a period of at least 20 days if our board of directors determines that such reduction would be in the best interest of BISYS. We are required to give at least 15 days' prior notice of any reduction in the conversion price. We may also reduce the conversion price to avoid or diminish income tax to holders of our common stock in connection with a dividend or distribution of stock or similar event. No adjustment in the conversion price will be required unless it would result in a change in the conversion price of at least one percent. Any adjustment not made will be taken into account in subsequent adjustments. Except as stated above, we will not adjust the conversion price for the issuance of our common stock or any securities convertible into or exchangeable for our common stock or the right to purchase our common stock or such convertible or exchangeable securities. SUBORDINATION OF NOTES The indebtedness evidenced by the notes is subordinated to the extent provided in the indenture to the prior payment in full, in cash or other payment satisfactory to holders of senior indebtedness, of all of our existing and future senior indebtedness. Upon any distribution of our assets upon any dissolution, winding-up, liquidation or reorganization, or in bankruptcy, insolvency, receivership or similar proceedings, payment of the principal of, premium, if any, interest and all other obligations in respect of the notes, including by way of redemption, acquisition or other purchase thereof, is to be subordinated in right of payment to the prior payment in full, in cash or other payment satisfactory to holders of senior indebtedness, of all of our existing and future senior indebtedness. In addition, the notes are also effectively subordinated to all indebtedness and other liabilities, including trade payables and lease obligations and preferred stock, if any, of our subsidiaries. Certain of our subsidiaries are guarantors under our existing credit facility. In the event of any acceleration of the notes because of an event of default, the holders of any senior indebtedness then outstanding would be entitled to payment in full, in cash or other payment satisfactory to holders of senior indebtedness, of all obligations in respect to such senior indebtedness before the holders of notes are entitled to receive any payment or other distribution. We are required to promptly notify holders of senior indebtedness if payment of the notes is accelerated because of an event of default. We also may not make any payment upon or redemption of or purchase or otherwise acquire the notes if: - a default in the payment of principal of, premium, if any, interest or other obligations in respect of designated senior indebtedness occurs and is continuing beyond any applicable period of grace, or - any other default occurs and is continuing with respect to designated senior indebtedness that permits holders of the designated senior indebtedness as to which such default relates to accelerate its maturity and the trustee receives a notice of such default, which we refer to as a payment blockage notice, from us or any other person permitted to give this notice under the indenture. We may and shall resume making payments on the notes: - in the case of a payment default, when the default is cured or waived or ceases to exist, and - in the case of a nonpayment default, the earlier of when such nonpayment default is cured or waived or ceases to exist or 179 days after receipt of the payment blockage notice. No new period of payment blockage may be commenced pursuant to a payment blockage notice unless and until 365 days have elapsed since the initial effectiveness of the prior payment blockage notice. 16 20 No default that existed or was continuing on the date of delivery of any payment blockage notice to the trustee shall be the basis for a subsequent payment blockage notice. In the event of our bankruptcy, dissolution or reorganization, holders of senior indebtedness may receive more, ratably, and holders of the notes may receive less, ratably, than the other creditors of BISYS. Such subordination will not prevent the occurrence of any event of default under the indenture. A substantial portion of our operations are conducted through our subsidiaries. As a result, our cash flow and our ability to service our debt, including the notes, is dependent upon the earnings of our subsidiaries. In addition, we are dependent on the distribution of earnings, loans or other payments by our subsidiaries to us. Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on the notes or to provide us with funds for our payment obligations, whether by dividends, distributions, loans or other payments. In addition, any payment of dividends, distributions, loans or advances by our subsidiaries to us could be subject to statutory or contractual restrictions. Payments to us by our subsidiaries will also be contingent upon our subsidiaries' earnings and business consideration. There can be no assurance that we will receive adequate funds from our subsidiaries to pay interest due on the notes or to repay the notes when redeemed or upon maturity. Our right to receive any assets of any of our subsidiaries upon its liquidation or reorganization, and therefore the right of the holders of the notes to participate in those assets, will be effectively subordinated to the claims of that subsidiary's creditors, including trade creditors. In addition, even if we were a creditor of any of our subsidiaries, our rights as a creditor would be subordinate to any security interest in the assets of our subsidiaries and any indebtedness of our subsidiaries senior to that held by us. Following the application of the net proceeds from the initial offering of the notes, we had no senior indebtedness outstanding, but we may incur new senior indebtedness. In addition, after the application of the net proceeds to repay borrowings under our existing credit facility to which certain of our subsidiaries are guarantors, our subsidiaries had no outstanding indebtedness. The notes will be effectively subordinated to any future indebtedness and other liabilities of our subsidiaries, including guarantees of any future borrowings under our credit facility. Neither we nor our subsidiaries are limited in or prohibited from incurring senior indebtedness or any other indebtedness or liabilities under the indenture. DEFINITIONS OF SENIOR INDEBTEDNESS, INDEBTEDNESS AND DESIGNATED SENIOR INDEBTEDNESS "DESIGNATED SENIOR INDEBTEDNESS" means all senior indebtedness under our credit facility, as amended, supplemented or refinanced at any time, and, after payment in full in cash of all senior indebtedness under the credit facility, any particular senior indebtedness in which the instrument creating or evidencing the senior indebtedness or the assumption or guarantee thereof (or related documents or agreements to which we are a party) expressly provides that such indebtedness shall be "designated senior indebtedness" (provided that such instrument may place limitations and conditions on the right of such senior indebtedness to exercise the rights of designated senior indebtedness), the aggregate principal amount of which is equal to or greater than $50 million. "INDEBTEDNESS" means: (1) all of our indebtedness, obligations and other liabilities, contingent or otherwise, for borrowed money, including obligations: - in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements, and any loans or advances from banks, whether or not evidenced by notes or similar instruments, or - evidenced by bonds, debentures, notes or similar instruments, whether or not the recourse of the lender is to all of our assets or to only a portion thereof, other than any account 17 21 payable or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of materials or services, (2) all of our reimbursement obligations and other liabilities, contingent or otherwise, with respect to letters of credit, bank guarantees or bankers' acceptances, (3) all of our obligations and liabilities, contingent or otherwise, in respect of leases required, in conformity with generally accepted accounting principles, to be accounted for as capitalized lease obligations on our balance sheet, or under other leases for facilities equipment or related assets, whether or not capitalized, entered into or leased for financing purposes, as determined by BISYS, (4) all of our obligations and other liabilities, contingent or otherwise, under any lease or related document, including a purchase agreement, in connection with the lease of real property or improvements thereon (or any personal property included as part of any such lease) which provides that we are contractually obligated to purchase or cause a third party to purchase the leased property and thereby guarantee a residual value of leased property to the lessor and all of our obligations under such lease or related document to purchase or to cause a third party to purchase the leased property (whether or not such lease transaction is characterized as an operating lease or a capitalized lease in accordance with generally accepted accounting principles), (5) all of our obligations, contingent or otherwise, with respect to an interest rate, currency or other swap, cap, floor or collar agreement, hedge agreement, forward contract, or other similar instrument or agreement or foreign currency hedge, exchange, purchase or similar instrument or agreement, (6) all of our direct or indirect guaranties or similar agreements to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of indebtedness, obligations or liabilities of another person of the kind described in clauses (1) through (5), (7) any indebtedness or other obligations described in clauses (1) through (6) secured by any mortgage, pledge, lien or other encumbrance existing on property which is owned or held by us, regardless of whether the indebtedness or other obligation secured thereby has been assumed by us, and (8) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications supplements to, any indebtedness, obligation or liability of the kind described in clauses (1) through (7). "SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest, including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding, and rent payable on or in connection with, and all fees, costs, expenses and other amounts accrued or due on or in connection with, indebtedness of BISYS whether outstanding on the date of the indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by BISYS, including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing, unless in the case of any particular indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such indebtedness shall not be senior in right of payment to the notes or expressly provides that such indebtedness is on the same basis or junior to the notes. Senior indebtedness does not include any indebtedness of BISYS to any subsidiary of BISYS. 18 22 OPTIONAL REDEMPTION BY BISYS We may redeem the notes in whole or from time to time in part on or after March 20, 2004, on at least 20 days', and no more than 60 days', notice at the following redemption prices expressed as percentages of the principal amount:
REDEMPTION PERIOD PRICE - ------ ---------- Beginning on March 20, 2004 and ending on March 14, 2005.... 101.00% Beginning on March 15, 2005 and thereafter.................. 100.00%
In each case, we will pay accrued interest to, but excluding, the redemption date. If the redemption date is an interest payment date, interest will be paid to the record holder on the relevant record date. If fewer than all of the notes are to be redeemed, the trustee will select the notes to be redeemed by lot, or in its discretion, on a pro rata basis. If any note is to be redeemed in part only, a new note in principal amount equal to the unredeemed principal portion will be issued. If a portion of your notes is selected for partial redemption and you convert a portion of your notes, the converted portion will be deemed to be of the portion selected for redemption. No sinking fund is provided for the notes. PURCHASE OF NOTES AT YOUR OPTION UPON A CHANGE IN CONTROL In the event of a change in control, you will have the right to require us to purchase all or any part of your notes 30 business days after the occurrence of a change in control at a purchase price equal to 100% of the principal amount of the notes plus accrued and unpaid interest to, but excluding, the purchase date. Notes submitted for purchase must be in $1,000 or multiples of $1,000 principal amount. We shall mail to the trustee and to each holder a written notice of the change in control within 10 business days after the occurrence of a change in control. This notice shall state among other things: - the terms and conditions of the change in control; - the procedures required for exercise of the change in control purchase feature; and - the holder's right to require BISYS to purchase the notes. You must deliver written notice of your exercise of this purchase right to a paying agent at any time prior to the close of business on the business day prior to the change in control purchase date. The written notice must specify the notes for which the purchase right is being exercised. If you wish to withdraw this election, you must provide a written notice of withdrawal to the paying agent at any time prior to the close of business on the business day prior to the change in control purchase date. A change in control will be deemed to have occurred if any of the following occurs: - any "person" or "group" is or becomes the "beneficial owner," directly or indirectly, of shares of voting stock of BISYS representing 50% or more of the total voting power of all outstanding classes of voting stock of BISYS or has the power, directly or indirectly, to elect a majority of the members of the board of directors of BISYS; - BISYS consolidates with, or merges with or into, another person or BISYS sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of BISYS, or any person consolidates with, or merges with or into, BISYS, in any such event other than pursuant to a transaction in which the persons that "beneficially owned," directly or indirectly, shares of voting stock of BISYS immediately prior to such transaction "beneficially own," directly or indirectly, shares of voting stock of BISYS, representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person; or 19 23 - a liquidation or dissolution of BISYS. However, a change in control will not be deemed to have occurred if either: - the last sale price of our common stock for any five trading days within - the period of ten consecutive trading days immediately after the later of the change in control or the public announcement of the change in control, in the case of a change in control resulting solely from a change in control under the first bullet point above, or - the period of ten consecutive trading days immediately preceding the change in control, in the case of a change in control under the second and third bullet points above, is at least equal to 105% of the conversion price in effect on such day; or - in the case of a merger or consolidation, all of the consideration excluding cash payments for fractional shares in the merger or consolidation constituting the change in control consists of common stock traded on a United States national securities exchange or quoted on the Nasdaq National Market (or which will be so traded or quoted when issued or exchanged in connection with such change in control) and as a result of such transaction or transactions the notes become convertible solely into such common stock. For purposes of this change in control definition: - "person" or "group" have the meanings given to them for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, and the term "group" includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor provision; - a "beneficial owner" will be determined in accordance with Rule 13d-3 under the Exchange Act, as in effect on the date of the indenture, except that the number of shares of voting stock of BISYS will be deemed to include, in addition to all outstanding shares of voting stock of BISYS and unissued shares deemed to be held by the "person" or "group" or other person with respect to which the change in control determination is being made, all unissued shares deemed to be held by all other persons; - "beneficially owned" has a meaning correlative to that of beneficial owner; - "unissued shares" means shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination of a change in control; and - "voting stock" means any class or classes of capital stock pursuant to which the holders of capital stock under ordinary circumstances have the power to vote in the election of the board of directors, managers or trustees of any person or other persons performing similar functions irrespective of whether or not, at the time, capital stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency. The term "all or substantially all" as used in the definition of change in control will likely be interpreted under applicable state law and will be dependent upon particular facts and circumstances. There may be a degree of uncertainty in interpreting this phrase. As a result, we cannot assure you how a court would interpret this phrase under applicable law if you elect to exercise your rights following the occurrence of a transaction which you believe constitutes a transfer of "all or substantially all" of our assets. We will under the indenture: - comply with the provisions of Rule 13e-4 and Rule 14e-1, if applicable, under the Exchange Act; 20 24 - file a Schedule TO or any successor or similar schedule if required under the Exchange Act; and - otherwise comply with all federal and state securities laws in connection with any offer by us to purchase the notes upon a change in control. This change in control purchase feature may make more difficult or discourage a takeover of BISYS and the removal of incumbent management. However, we are not aware of any specific effort to accumulate shares of our common stock or to obtain control of us by means of a merger, tender offer, solicitation or otherwise. In addition, the change in control purchase feature is not part of a plan by management to adopt a series of anti-takeover provisions. Instead, the change in control purchase feature is a result of negotiations between us and the initial purchasers. We could, in the future, enter into certain transactions, including recapitalizations, that would not constitute a change in control but would increase the amount of debt, including senior indebtedness, outstanding or otherwise adversely affect a holder. Neither we nor our subsidiaries are prohibited from incurring debt, including senior indebtedness, under the indenture. The incurrence of significant amounts of additional debt could adversely affect our ability to service our debt, including the notes. If a change in control were to occur, we may not have sufficient funds to pay the change in control purchase price for the notes tendered by holders. In addition, we may in the future incur debt that has similar change of control provisions that permit holders of this debt to accelerate or require us to repurchase this debt upon the occurrence of events similar to a change in control. Our failure to repurchase the notes upon a change in control will result in an event of default under the indenture, whether or not the purchase is permitted by the subordination provisions of the indenture. EVENTS OF DEFAULT Each of the following constitute an event of default under the indenture: (1) failure to pay principal of or premium, if any, on any note when due, whether or not prohibited by the subordination provisions of the indenture; (2) failure to pay any interest on any note when due, if such failure continues for 30 days, whether or not prohibited by the subordination provisions of the indenture; (3) failure of BISYS to perform any other covenant required of us in the indenture, if such failure continues for 60 days after written notice has been given by the trustee, or the holders of at least 25% in aggregate principal amount of the outstanding notes; and (4) certain events in bankruptcy, insolvency or reorganization of BISYS. If an event of default, other than an event of default described in clause (4) above, occurs and is continuing, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes may declare the principal amount of the notes to be due and payable immediately. If an event of default described in clause (4) above occurs, the principal amount of the notes will automatically become immediately due and payable. Any payment by us on the notes following any such acceleration will be subject to the subordination provisions described above. After any such acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of the notes may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the non-payment of accelerated principal, have been cured or waived. Subject to the trustee's duties in the case of an event of default, the trustee will not be obligated to exercise any of its rights or powers at the request of the holders, unless the holders have offered to the trustee reasonable indemnity. Subject to the trustee's indemnification, the holders of a majority in aggregate principal amount of the outstanding notes will have the right to direct the time, method and 21 25 place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the notes. No holder has the right to institute any proceeding under the indenture, or for the appointment of a receiver or a trustee, or for any other remedy under the indenture unless: - the holder has previously given to the trustee written notice of a continuing event of default with respect to the notes; - the holders of at least 25% in aggregate principal amount of the outstanding notes have made a written request and have offered reasonable indemnity to the trustee to institute such proceeding as trustee; and - the trustee has failed to institute such proceeding, and has not received from the holders of a majority in aggregate principal amount of the outstanding notes a direction inconsistent with such request within 60 days after such notice, request and offer. However, these limitations do not apply to a suit instituted by a holder for the enforcement of payment of the principal of or any premium or interest on any note or the right to convert the note on or after the applicable due date. We are required to furnish to the trustee, on an annual basis, a statement by our officers as to whether or not BISYS, to the officer's knowledge, is in default in the performance or observance of any of the terms, provisions and conditions of the indenture. If so, such statement will specify any known defaults. MODIFICATION AND WAIVER We and the trustee may make modifications and amendments to the indenture with the consent of the holders of a majority in aggregate principal amount of the outstanding notes. However, neither we nor the trustee may make any modification or amendment without the consent of the holder of each outstanding note who is affected by the modification or amendment if such modification or amendment would do any of the following: - extend the stated maturity of the principal of or interest on any note, - reduce the principal amount of, or any premium or interest on, any note, - reduce the amount of principal payable upon acceleration of the maturity of any note, - change the place or currency of payment of principal of, or any premium or interest on, any note, - impair the right to institute suit for the enforcement of any payment on, or with respect to, any note, - adversely affect the right of holders to convert notes other than as provided in or under the indenture, - reduce the percentage in principal amount of outstanding notes, the consent of whose holders is required for modification or amendment of the indenture, - reduce the percentage in principal amount of outstanding notes necessary for waiver of compliance with certain provisions of the indenture or for waiver of certain defaults, or - modify such provisions with respect to modification and waiver. Holders of a majority in aggregate principal amount of the outstanding notes may waive, on behalf of the holders of all of the notes, compliance by us with respect to certain restrictive provisions of the indenture. 22 26 Generally, the holders of not less than a majority of the aggregate principal amount of the outstanding notes may, on behalf of all holders of the notes, waive any past default or event of default unless: - we fail to pay principal, premium or interest on any note when due; - we fail to convert any note into common stock; or - we fail to comply with any of the provisions of the indenture that would require the consent of the holder of each outstanding note affected. Any notes held by us or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with us shall be disregarded (from both the numerator and denominator) for purposes of determining whether the holders of a majority in principal amount of the outstanding notes have consented to a modification, amendment or waiver of the terms of the indenture. CONSOLIDATION, MERGER AND SALE OF ASSETS We may not consolidate with or merge into any other person, in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to any successor person, unless: - the successor person, if any, is a corporation, limited liability company, partnership, trust or other entity organized and existing under the laws of the United States, or any state of the United States, and assumes our obligations on the notes and under the indenture; and - immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing. REGISTRATION RIGHTS We entered into a registration rights agreement with the initial purchasers of the notes. If you sell the notes or shares of common stock issued upon conversion of the notes under this registration statement, you generally will be required to be named as a selling securityholder in this prospectus, deliver this prospectus to purchasers and be bound by applicable provisions of the registration rights agreement, including some indemnification provisions. In the registration rights agreement, we agreed to file a registration statement that includes this prospectus with the Securities and Exchange Commission by June 11, 2001. We agreed to use all reasonable best efforts to cause this registration statement to become effective as promptly as practicable, but before September 9, 2001. We agreed to keep this registration statement effective until the earliest of (i) two years after the filing date, (ii) the date when all of the securities registered under this registration agreement are sold, or (iii) the period applicable to the notes and underlying shares of our common stock held by non-affiliates under Rule 144(k) under the Securities Act expires. We may suspend the use of this prospectus under limited circumstances, including pending corporate developments or public filings with the Securities and Exchange Commission, for a period not to exceed 45 days in any 90-day period and 90 days in any 360-day period. We also agreed to pay liquidated damages to holders of the notes and shares of common stock issued upon conversion of the notes if the registration statement is not timely filed or made effective or if the prospectus is unavailable for periods in excess of those permitted above. You should refer to the registration rights agreement for a description of these liquidated damages. SATISFACTION AND DISCHARGE We may, at our option, satisfy and discharge our obligations under the indenture while notes remain outstanding if (1) all outstanding notes will become due and payable at their scheduled maturity within one year or (2) all outstanding notes are scheduled for redemption within one year, and, in either case, we have deposited with the trustee an amount sufficient to pay and discharge all outstanding notes on the date of their scheduled maturity or the scheduled date of redemption. 23 27 TRANSFER AND EXCHANGE We have initially appointed the trustee as security registrar, paying agent and conversion agent, acting through its corporate trust office. We reserve the right to: - vary or terminate the appointment of the security registrar, paying agent or conversion agent; - appoint additional paying agents or conversion agents; or - approve any change in the office through which any security registrar or any paying agent or conversion agent acts. PURCHASE AND CANCELLATION All notes surrendered for payment, redemption, registration of transfer or exchange or conversion shall, if surrendered to any person other than the trustee, be delivered to the trustee. All notes delivered to the trustee shall be cancelled promptly by the trustee. No notes shall be authenticated in exchange for any notes cancelled as provided in the indenture. We may, to the extent permitted by law, purchase notes in the open market or by tender offer at any price or by private agreement. Any notes purchased by us may, to the extent permitted by law, be reissued or resold or may, at our option, be surrendered to the trustee for cancellation. Any notes surrendered for cancellation may not be reissued or resold and will be promptly cancelled. REPLACEMENT OF NOTES We will replace mutilated, destroyed, stolen or lost notes at your expense upon delivery to the trustee of the mutilated notes, or evidence of the loss, theft or destruction of the notes satisfactory to us and the trustee. In the case of a lost, stolen or destroyed note, indemnity satisfactory to the trustee and us may be required at the expense of the holder of such note before a replacement note will be issued. GOVERNING LAW The indenture and the notes are governed by, and construed in accordance with, the law of the State of New York, without regard to conflicts of laws principles. CONCERNING THE TRUSTEE Chase Manhattan Trust Company, National Association is the trustee under the indenture. The trustee will be permitted to deal with BISYS and any affiliate of BISYS with the same rights as if it were not trustee. However, under the Trust Indenture Act, if the trustee acquires any conflicting interest and there exists a default with respect to the notes, the trustee must eliminate such conflicts or resign. J.P. Morgan Chase & Co., an affiliate of the trustee, is a co-agent under our existing credit facility. The holders of a majority in principal amount of all outstanding notes have the right to direct the time, method and place of conducting any proceeding for exercising any remedy or power available to the trustee. However, any such direction may not conflict with any law or the indenture, may not be unduly prejudicial to the rights of another holder or the trustee and may not involve the trustee in personal liability. BOOK-ENTRY, DELIVERY AND FORM The notes were originally issued in registered book-entry form, without coupons. The notes that are sold under this prospectus will be represented by one or more global securities. The global securities will be deposited with the trustee as custodian for DTC and registered in the name of a nominee of DTC. Except as set forth below, the global security may be transferred, in whole and not in part, only to DTC or another nominee of DTC. Purchasers of notes under this prospectus may hold their interests in the global security directly through DTC if you have an account with DTC or indirectly through organizations which 24 28 have accounts with DTC. Notes in definitive certificated form (called "certificated securities") will be issued only in certain limited circumstances described below. DTC has advised us that it is: - a limited purpose trust company organized under the laws of the State of New York; - a member of the Federal Reserve System; - a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and - a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of institutions that have accounts with DTC (called "participants") and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers, which may include the initial purchasers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC's book-entry system is also available to others such as banks, brokers, dealers and trust companies (called, the "indirect participants") that clear through or maintain a custodial relationship with a participant, whether directly or indirectly. Ownership of beneficial interests in the global security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in the global security will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by DTC (with respect to participants' interests), the participants and the indirect participants. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. These limits and laws may impair the ability to transfer or pledge beneficial interests in the global security. Beneficial owners of interests in global securities who desire to convert their interests into common stock should contact their brokers or other participants or indirect participants through whom they hold such beneficial interests to obtain information on procedures, including proper forms and cut-off times, for submitting requests for conversion. So long as DTC, or its nominee, is the registered owner or holder of a global security, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the notes represented by the global security for all purposes under the indenture and the notes. In addition, no beneficial owner of an interest in a global security will be able to transfer that interest except in accordance with the applicable procedures of DTC. Except as set forth below, as an owner of a beneficial interest in the global security, you will not be entitled to have the notes represented by the global security registered in your name, will not receive or be entitled to receive physical delivery of certificated securities and will not be considered to be the owner or holder of any notes under the global security. We understand that under existing industry practice, if an owner of a beneficial interest in the global security desires to take any action that DTC, as the holder of the global security, is entitled to take, DTC would authorize the participants to take such action, and the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them. We will make payments of principal of, premium, if any, and interest on the notes represented by the global security registered in the name of and held by DTC or its nominee to DTC or its nominee, as the case may be, as the registered owner and holder of the global security. Neither we, the trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We expect that DTC or its nominee, upon receipt of any payment of principal of, premium, if any, or interest on the global security, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the records 25 29 of DTC or its nominee. We also expect that payments by participants or indirect participants to owners of beneficial interests in the global security held through such participants or indirect participants will be governed by standing instructions and customary practices and will be the responsibility of such participants or indirect participants. We will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the global security for any note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and its participants or indirect participants or the relationship between such participants or indirect participants and the owners of beneficial interests in the global security owning through such participants. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. DTC has advised us that it will take any action permitted to be taken by a holder of notes only at the direction of one or more participants to whose account the DTC interests in the global security is credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if DTC notifies us that they are unwilling to be a depository for the global security or ceases to be a clearing agency or there is an event of default under the notes, DTC will exchange the global security for certificated securities which it will distribute to its participants and which will be legended, if required, as set forth under the heading "Transfer Restrictions." Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in the global security among participants of DTC, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility or liability for the performance by DTC or the participants or indirect participants of their respective obligations under the rules and procedures governing their respective operations. 26 30 DESCRIPTION OF COMMON STOCK The following summary describes the material terms of our capital stock. However, it does not purport to be complete and is qualified in its entirety by the actual terms of our capital stock contained in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws, both as currently in effect. As of April 30, 2001, our authorized capital stock consists of 160,000,000 shares, consisting of 160,000,000 shares of common stock, par value $0.02 per share, and no shares of preferred stock. As of April 30, 2001, there were 58,084,850 shares of common stock outstanding. As of April 30, 2001, there were options to purchase 7,396,098 shares of our common stock outstanding and 4,606,308 shares of common stock reserved for issuance under our stock option plans and employee stock purchase plan. COMMON STOCK The holders of our common stock are entitled to one vote per share on all matter submitted to a vote of the stockholders. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available for that purpose. The common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF OUR BY-LAWS, DELAWARE LAW AND OUR SHAREHOLDER RIGHTS PLAN We are subject to the "business combination" provisions of the Delaware General Corporation Law. In general, such provisions prohibit a publicly held Delaware corporation from engaging in various "business combination" transactions with any "interested stockholder" for a period of three years after the date of the transaction in which the person became an "interested stockholder" unless: - the transaction is approved by the board of directors prior to the date the "interested stockholder" obtained such status; - upon consummation of the transaction which resulted in the stockholder becoming an "interested stockholder," the "interested stockholder" owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by (a) persons who are directors and also officers and (b) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or - on or subsequent to such date, the "business combination" is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 % of the outstanding voting stock which is not owned by the "interested stockholder." A "business combination" is defined to include mergers, asset sales and other transactions resulting in financial benefit to a stockholder. In general, an "interested stockholder" is a person who, together with affiliates or associates, owns 15% or more of a corporation's voting stock or within three years did own 15% or more of a corporation's voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us. We have a shareholder rights plan. Under the plan, each holder of shares of our common stock will receive a right 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 shares of common 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 27 31 twice the exercise price. This plan could have the effect of discouraging, delaying or preventing persons from attempting to acquire us. TRANSFER AGENT AND REGISTRAR The transfer agent and registrar for the common stock is The Bank of New York. 28 32 SELLING SECURITYHOLDERS The notes were originally issued by us and sold by Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation (the "Initial Purchasers") in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the Initial Purchasers to be "qualified institutional buyers" as defined by Rule 144A under the Securities Act. The selling securityholders may from time to time offer and sell pursuant to this prospectus any or all of the notes listed below and the shares of common stock issued upon conversion of such notes. When we refer to the "selling securityholders" in this prospectus, we mean those persons listed in the table below, as well as the pledgees, donees, assignees, transferees, successors and others who later hold any of the selling securityholders' interests. The table below sets forth the name of each selling securityholder, the principal amount at maturity of notes that each selling securityholder may offer pursuant to this prospectus and the number of shares of common stock into which such notes are convertible. Unless set forth below, to our knowledge, none of the selling securityholders has, or within the past three years has had, any material relationship with us or any of our predecessors or affiliates or beneficially owns in excess of 1% of the outstanding common stock. The principal amounts of the notes provided in the table below is based on information provided to us by each of the selling securityholders as of May 31, 2001, and the percentages are based on $300,000,000 principal amount at maturity of notes outstanding. The number of shares of common stock that may be sold is calculated based on the current conversion rate of 14.9729 shares of common stock per $1,000 principal amount at maturity of the notes. Since the date on which each selling securityholder provided this information, each selling securityholder identified below may have sold, transferred or otherwise disposed of all or a portion of their notes in a transaction exempt from the registration requirements of the Securities Act. Information concerning the selling securityholders may change from time to time and any changed information will be set forth in supplements to this prospectus to the extent required. In addition, the conversion ratio, and therefore the number of shares of our common stock issuable upon conversion of the notes, is subject to adjustment. Accordingly, the number of shares of common stock issuable upon conversion of the notes may increase or decrease. The selling securityholders may from time to time offer and sell any or all of the securities under this prospectus. Because the selling securityholders are not obligated to sell the notes or the shares of common stock issuable upon conversion of the notes, we cannot estimate the amount of the notes or how many shares of common stock that the selling securityholders will hold upon consummation of any such sales.
AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- 1976 Distribution Trust FBO A.R. Lauder/Zinterhofer.............. $ 7,000 * 105 * 1976 Distribution Trust FBO Jane A. Lauder....................... $ 14,000 * 210 * 2000 Revocable Trust FBO A.R. Lauder/Zinterhofer.............. $ 7,000 * 105 * AAM/Zazove Institutional Income Fund L.P. ...................... $ 1,250,000 * 18,716 * Alexandra Global Investment Fund 1, Ltd. ........................ $ 5,000,000 1.667% 74,865 * Allstate Insurance Company........ $ 600,000 * 8,984 * Allstate Life Insurance Company... $ 150,000 * 2,246 * Alpine Associates................. $ 4,150,000 1.383% 62,138 * Alpine Partners, L.P. ............ $ 700,000 * 10,481 * American Skandia Trust............ $ 150,000 * 1,497 *
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AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- AMICO Advent...................... $ 521,000 * 7,801 * Arapahoe County Colorado.......... $ 51,000 * 764 * Arbitax Master Fund, L.P. ........ $ 14,500,000 4.833% 217,107 * Arkansas Teachers Retirement...... $ 4,503,000 1.501% 67,423 * Associated Electric & Gas Insurance Services Limited...... $ 500,000 * 7,486 * Aventis Pension Master Trust...... $ 175,000 * 2,620 * B.C. McCabe Foundation............ $ 300,000 * 4,492 * Bancroft Convertible Fund, Inc. ........................... $ 1,000,000 * 14,973 * Bank America Pension Plan......... $ 3,000,000 1.000% 44,919 * Baptist Health of South Florida... $ 447,000 * 6,693 * BBT Fund, L.P. ................... $ 7,500,000 2.500% 112,297 * Bear, Stearns & Co. Inc. ......... $ 980,000 * 14,673 * Black Diamond Offshore Ltd. ...... $ 252,000 * 3,773 * Boilermaker -- Blacksmith Pension Trust........................... $ 1,100,000 * 16,470 * Boston Museum of Fine Art......... $ 134,000 * 2,006 * British Virgin Islands Social Security Board.................. $ 38,000 * 569 * CALAMOS(R) Convertible Fund -- CALAMOS(R) Investment Trust..... $ 3,245,000 1.082% 48,587 * CALAMOS(R) Convertible Growth and Income Fund -- CALAMOS(R) Investment Trust................ $ 2,800,000 * 41,924 * CALAMOS(R) Convertible Portfolio -- CALAMOS(R) Advisors Trust........................... $ 150,000 * 2,246 * CALAMOS(R) Convertible Technology Fund -- CALAMOS(R) Investment Trust........................... $ 60,000 * 898 * CALAMOS(R) Global Convertible Fund -- CALAMOS(R) Investment Trust........................... $ 100,000 * 1,497 * CALAMOS(R) Market Neutral Fund -- CALAMOS(R) Investment Trust........................... $ 4,005,000 1.335% 59,966 * Christian Science Trustees -- Gifts & Endowments...................... $ 185,000 * 2,770 * Chrysler Corporation Master Retirement Trust................ $ 6,000,000 2.000% 89,837 * CIBC World Markets................ $ 2,000,000 * 29,946 * City of Albany Pension Plan....... $ 75,000 * 1,123 * City of Knoxville Pension System.......................... $ 225,000 * 3,369 * City of New Orleans............... $ 211,000 * 3,159 * City University of New York....... $ 126,000 * 1,887 * Clarica Life Insurance Co. -- U.S. .................... $ 530,000 * 7,936 * Clinton Riverside Convertible Portfolio Limited............... $ 7,000,000 2.333% 104,810 *
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AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- Consulting Group Capital Markets Fund............................ $ 320,000 * 4,791 * Convert ARB QIB................... $ 1,300,000 * 19,465 *
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AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- David Lipscomb University......... $ 55,000 * 824 * DeAM Convertible Arbitrage FD..... $ 3,400,000 1.133% 50,908 * Delta Airlines Master Trust....... $ 2,000,000 * 29,946 * Delta Pilots D & S Trust.......... $ 855,000 * 12,802 * Delta Pilots Disability and Survivorship Trust.............. $ 725,000 * 10,855 * Double Black Diamond Offshore LDC............................. $ 1,180,000 * 17,668 * Drury University.................. $ 70,000 * 1,048 * Ellsworth Convertible Growth and Income Fund, Inc. .............. $ 1,000,000 * 14,973 * Engineers Joint Pension Fund...... $ 545,000 * 8,160 * Enterprise Convertible Securities Fund............................ $ 144,000 * 2,156 * EQAT Alliance Growth Investors.... $ 2,600,000 * 38,930 * Equitable Life Assurance Separate Account -- Balanced............. $ 75,000 * 1,123 * Equitable Life Assurance Separate Account -- Convertibles......... $ 1,500,000 * 22,459 * The Fondren Foundation............ $ 80,000 * 1,198 * Fuji U.S. Income Open............. $ 350,000 * 5,241 * Global Burmuda Limited Partnership..................... $ 1,200,000 * 17,967 * GM Employees Global GRP PEN TR.... $ 2,000,000 * 29,946 * Grady Hospital Foundation......... $ 110,000 * 1,647 * Granville Capital Corporation..... $ 4,750,000 1.583% 11,121 * H.K. Porter Company, Inc. ........ $ 20,000 * 299 * HFR Master Fund Ltd. ............. $ 350,000 * 5,241 * Highbridge International LLC...... $ 18,713,000 6.238% 280,188 * Hotel Union & Hotel Industry of Hawaii.......................... $ 260,000 * 3,893 * Independence Blue Cross........... $ 104,000 * 1,557 * Innovest Finanzdienstleistungs.... $ 485,000 * 7,262 * J.P. Morgan Securities, Inc. ..... $ 16,000,000 5.333% 239,566 * JMG Capital Partners, LP.......... $ 2,375,000 * 35,561 * Kettering Medical Center Funded Depreciation Account............ $ 50,000 * 749 * Knoxville Utilities Board Retirement System............... $ 150,000 * 2,246 * Lakeshore International Ltd. ..... $ 2,800,000 * 41,924 * Lancer Securities Cayman Ltd. .... $ 700,000 * 10,481 * Lincoln National Convertible Securities Fund................. $ 1,000,000 * 14,973 * Lincoln National Global Asset Allocation Fund, Inc. .......... $ 37,000 * 554 * Local Initiatives Support Corp. .......................... $ 52,000 * 779 * Lord, Abbett Bond Debenture Fund............................ $ 10,000,000 3.333% 149,729 * Louisiana Workers' Compensation Corporation..................... $ 120,000 * 1,797 * Lumbermens Mutual Casualty........ $ 563,000 * 8,430 * Maryland Retirement Agency........ $ 2,655,000 * 39,753 * McMahan Securities Co. L.P. ...... $ 2,800,000 * 41,924 *
32 35
AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- Memphis Light, Gas & Water Retirement Fund................. $ 925,000 * 13,850 * Merrill Lynch Insurance Group..... $ 258,000 * 3,863 * Met Investors Bond Debenture Fund............................ $ 350,000 * 5,241 * Morgan Stanley Dean Witter Convertible Securities Trust.... $ 1,000,000 * 14,973 * Municipal Employees............... $ 111,000 * 1,662 * Museum of Fine Arts, Boston....... $ 20,000 * 299 * Nabisco........................... $ 29,000 * 434 * National Fuel Gas Company Retirement Plan................. $ 100,000 * 1,497 * New Orleans Firefighters Pension/ Relief Fund..................... $ 115,000 * 1,722 * Nicholas Applegate Convertible Fund............................ $ 1,960,000 * 39,347 * North Pole Capital Investments Ltd. ........................... $ 2,650,000 * 39,678 * OCM Convertible Trust............. $ 4,145,000 1.382% 62,063 * Ohio Bureau of Workers Compensation.................... $ 120,000 * 1,797 * Oxford, Lord Abbett & Co. ........ $ 1,200,000 * 17,967 * Pacific Life Insurance Company.... $ 1,000,000 * 14,973 * Palladin Securities LLC........... $ 900,000 * 13,476 * Paloma Securities LLC............. $ 7,500,000 2.500% 112,297 * Parker-Hannifin Corporation....... $ 50,000 * 749 * Pell Ridman Trust Company......... $ 2,500,000 * 57,432 * Peoples Benefit Life Insurance Company......................... $ 3,750,000 1.250% 56,148 * Peoples Benefit Life Insurance Company TEAMSTERS............... $ 2,500,000 * 37,432 * Physicians Life................... $ 430,000 * 6,438 * Polar Hedge Enhanced Income Trust........................... $ 350,000 * 5,241 * Policemen and Firemen Retirement System of the City of Detroit... $ 550,000 * 8,235 * Port Authority of Allegheny County Retirement and Disability Allowance Plan for the Employees Represented by Local 85 of the Amalgamated Transit Union....... $ 1,150,000 * 17,219 * Pro Mutual........................ $ 623,000 * 9,328 * Putnam Asset Allocation Funds -- Balanced Portfolio.............. $ 220,000 * 3,294 * Putnam Asset Allocation Funds -- Conservative Portfolio.......... $ 180,000 * 2,695 * Putnam Convertible Income-Growth Trust........................... $ 1,430,000 * 21,411 * Putnam Convertible Opportunities and Income Trust................ $ 70,000 * 1,048 *
33 36
AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- Putnam Variable Trust -- Putnam VT Global Asset Allocation Fund.... $ 100,000 * 1,497 * Raytheon Master Trust............. $ 561,000 * 8,400 * Retail Clerks Pension Trust....... $ 3,000,000 1.000% 44,919 * RJR............................... $ 92,000 * 1,378 * San Diego County Convertible...... $ 2,278,000 * 34,108 * San Diego County Employees Retirement Association.......... $ 2,500,000 * 37,432 * San Diego City Retirement......... $ 1,042,000 * 15,602 * SCI Endowment Care Common Trust Fund -- National Fiduciary Services........................ $ 70,000 * 1,048 * SCI Endowment Care Common Trust Fund -- Suntrust................ $ 100,000 * 1,497 * Screen Actors Guild Pension....... $ 583,000 * 8,729 * SG Cowen Securities............... $ 5,000,000 1.667% 74,865 * SG Cowen Securities Inc. ......... $ 15,000,000 5.000% 224,594 * Shell Pension Trust............... $ 434,000 * 6,498 * SPT............................... $ 850,000 * 12,727 * St. Albans Partners Ltd. ......... $ 3,000,000 1.000% 44,919 * Teachers Insurance and Annuity Association..................... $ 4,000,000 1.333% 59,892 * The Dow Chemical Company Employees' Retirement Plan...... $ 2,270,000 * 33,958 * The Estate of James Campbell...... $ 740,000 * 12,080 * The First Foundation.............. $ 260,000 * 3,893 * The Grable Foundation............. $ 94,000 * 1,407 * The John Henry Mennen GST......... $ 55,000 * 824 * Total Fina Elf Finance USA, Inc. ........................... $ 175,000 * 2,620 * Triton Capital Investment, Ltd. ........................... $ 2,375,000 * 35,561 * Unifi, Inc. Profit Sharing Plan and Trust....................... $ 85,000 * 1,273 * United Food and Commercial Workers Local 1262 and Employers Pension Fund............................ $ 550,000 * 8,235 * University of Rochester........... $ 30,000 * 449 * Value Line Convertible Fund, Inc. ........................... $ 250,000 * 3,743 * Van Waters & Rogers, Inc. Retirement Plan................. $ 300,000 * 4,492 * Vanguard Convertible Securities Fund, Inc. ..................... $ 2,000,000 * 29,946 * Wake Forest University............ $ 999,000 * 14,958 * White River Securities L.L.C. .... $ 750,000 * 11,230 * Worldwide Transactions Ltd. ...... $ 63,000 * 943 * Writers Guild Convertible......... $ 341,000 * 5,106 * Wyoming Stable Treasurer.......... $ 1,162,000 * 17,399 *
34 37
AGGREGATE NUMBER OF SHARES PERCENTAGE OF PRINCIPAL AMOUNT AT PERCENTAGE OF COMMON STOCK SHARES OF MATURITY OF NOTES OF NOTES THAT MAY BE COMMON STOCK NAME THAT MAY BE SOLD OUTSTANDING SOLD(1) OUTSTANDING(2) - ---- ------------------- ------------- ---------------- -------------- Zurich HFR Calamos Holdings Limited......................... $ 80,000 * 1,198 * Zurich Institutional Benchmarks Master Fund Ltd. ............... $ 1,200,000 * 17,967 * All other holders of notes or future transferees, pledgees, donees, assignees or successors of any such holders(3)(4)....... $ 54,191,000 18.064% 811,396 1.399% ------------ ------ --------- ----- Total............................. $300,000,000 100.00% 4,491,870 7.733% ============ ====== ========= =====
- --------------- * Less than one percent (1%). (1) Assumes conversion of all of the holder's notes at a conversion rate of 14.9729 shares of common stock per $1,000 principal amount at maturity of the notes. This conversion rate is subject to adjustment, however, as described under "Description of the Notes -- Conversion Rights". As a result, the number of shares of common stock issuable upon conversion of the notes may increase or decrease in the future. (2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act, using 58,084,850 shares of common stock outstanding as of April 30, 2001. In calculating this amount for each holder, we treated as outstanding the number of shares of common stock issuable upon conversion of all that holder's notes, but we did not assume conversion of any other holder's notes. (3) Information about other selling securityholders will be set forth in prospectus supplements, if required. (4) Assumes that any other holders of the notes or any future pledgees, donees, assignees, transferees or successors of or from any other such holders of the notes, do not beneficially own any shares of common stock other than the common stock issuable upon conversion of the notes at the initial conversion rate. 35 38 PLAN OF DISTRIBUTION The selling securityholders will be offering and selling all of the securities offered and sold under this prospectus. We will not receive any of the proceeds from the offering of the notes or the shares of common stock by the selling securityholders. In connection with the initial offering of the notes, we entered into a registration rights agreement dated March 13, 2001 with the initial purchasers of the notes. Securities may only be offered or sold under this prospectus pursuant to the terms of the registration rights agreement. However, selling securityholders may resell all of a portion of the securities in open market transactions in reliance upon Rule 144 or Rule 144A under the Securities Act, provided they meet the criteria and conform to the requirements of one of these rules. We are registering the notes and shares of common stock covered by this prospectus to permit holders to conduct public secondary trading of these securities from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses, other than underwriting discounts and selling commissions, in connection with the registration and sale of the notes and the shares of common stock covered by this prospectus. The selling securityholders may sell all or a portion of the notes and shares of common stock beneficially owned by them and offered hereby from time to time: - directly; or - through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or concessions from the selling securityholders and/or from the purchasers of the notes and shares of common stock for whom they may act as agent. The notes and the shares of common stock may be sold from time to time in one or more transactions at: - fixed prices, which may be changed; - prevailing market prices at the time of sale; - varying prices determined at the time of sale; or - negotiated prices. These prices will be determined by the holders of the securities or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection with the sale. The aggregate proceeds to the selling securityholders from the sale of the notes or shares of common stock offered by them hereby will be the purchase price of the notes or shares of common stock less discounts and commissions, if any. The sales described in the preceding paragraph may be effected in transactions: - on any national securities exchange or quotation service on which the notes or shares of common stock may be listed or quoted at the time of sale, including the Nasdaq National Market in the case of the shares of common stock; - in the over-the counter market; - in transactions otherwise than on such exchanges or services or in the over-the-counter market; or - through the writing of options. These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade. In connection with sales of the notes and shares of common stock or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of the notes and shares of common stock in the course of hedging their positions. The selling securityholders may also sell the notes and shares of common stock short and deliver the notes 35 39 and shares of common stock to close out short positions, or loan or pledge notes and shares of common stock to broker-dealers that in turn may sell the notes and shares of common stock. To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the notes and the shares of common stock by the selling securityholders. Selling securityholders may not sell any, or may not sell all, of the notes and the shares of common stock offered by them pursuant to this prospectus. In addition, we cannot assure you that a selling securityholder will not transfer, devise or gift the notes and the shares of common stock by other means not described in this prospectus. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus. The outstanding shares of common stock are listed for trading on the Nasdaq National Market. The selling securityholders and any broker and any broker-dealers, agents or underwriters that participate with the selling securityholders in the distribution of the notes or the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act. In this case, any commissions received by these broker-dealers, agents or underwriters and any profit on the resale of the notes or the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. In addition, any profits realized by the selling securityholders may be deemed to be underwriting discounts and commissions under the Securities Act. To the extent the selling securityholders may be deemed to be underwriters, the selling securityholders may be subject to statutory liabilities, including, but not limited to, liability under Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act. Because the selling securityholders may be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. At any time a particular offer of the securities is made, a revised prospectus or prospectus supplement, if required, will be distributed which will disclose: - the name of the selling securityholders and any participating underwriters, broker-dealers or agents; - the aggregate amount and type of securities being offered; - the price at which the securities were sold and other material terms of the offering; - any discounts, commissions, concessions or other items constituting compensation from the selling securityholders and any discounts, commissions or concessions allowed or reallowed or paid to dealers; and - that the participating broker-dealers did not conduct any investigation to verify the information in this prospectus or incorporated in this prospectus by reference. The prospectus supplement or a post-effective amendment will be filed with the Securities and Exchange Commission to reflect the disclosure of additional information with respect to the distribution of the securities. In addition, if we receive notice from a selling securityholder that a donee or pledgee intends to sell more than 500 shares of our common stock, a supplement to this prospectus will be filed. The notes were issued and sold in March 2001 in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the Initial Purchasers to be "qualified institutional buyers," as defined in Rule 144A under the Securities Act. Pursuant to the registration rights agreement, we have agreed to indemnify the Initial Purchasers and each selling securityholder, and each selling securityholder has agreed to indemnify us against specified liabilities arising under the Securities Act. The selling securityholders may also agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the securities against some liabilities, including liabilities that arise under the Securities Act. The selling securityholders and any other person participating in such distribution will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit 36 40 the timing of purchases and sales of any of the notes and the underlying shares of common stock by the selling securityholders and any such other person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the notes and the underlying shares of common stock to engage in market-making activities with respect to the particular notes and the underlying shares of common stock being distributed for a period of up to five business days prior to the commencement of distribution. This may affect the marketability of the notes and the underlying shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the notes and the underlying shares of common stock. Under the registration rights agreement, we are obligated to use our reasonable best efforts to keep the registration statement of which this prospectus is a part effective until the earlier of: - two years after the last date of original issuance of any of the notes; - the date when the holders of the notes and the shares of common stock issuable upon conversion of the notes are able to sell all such securities immediately without restriction pursuant to the volume limitation provisions of Rule 144(k) under the Securities Act; and - the sale, pursuant to the registration statement to which this prospectus relates, of all the securities registered thereunder. Our obligation to keep the registration statement to which this prospectus relates effective is subject to specified, permitted exceptions set forth in the registration rights agreement. In these cases, we may prohibit offers and sales of the notes and shares of common stock pursuant to the registration statement to which this prospectus relates. We may suspend the use of this prospectus if we learn of any event that causes this prospectus to include an untrue statement of a material fact required to be stated in the prospectus or necessary to make the statements in the prospectus not misleading in light of the circumstances then existing. If this type of event occurs, a prospectus supplement or post-effective amendment, if required, will be distributed to each selling securityholder. Each selling securityholder has agreed not to trade securities from the time the selling securityholder receives notice from us of this type of event until the selling securityholder receives a prospectus supplement or amendment. This time period will not exceed 45 days in any 90-day period or 90 days in a 360-day period. 37 41 LEGAL MATTERS Certain legal matters with respect to the notes will be passed upon for us by Kevin J. Dell, Esq., Executive Vice President and General Counsel of The BISYS Group, Inc. Mr. Dell holds shares of our common stock and options to acquire shares of our common stock. EXPERTS The consolidated financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K of The BISYS Group, Inc. for the year ended June 30, 2000 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on authority of said firm as experts in auditing and accounting. The financial statements of Pictorial Holdings, Inc. incorporated in this prospectus by reference to the audited historical financial statements included on page 5 of The BISYS Group, Inc.'s Form 8-K/A dated September 15, 2000 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on authority of said firm as experts in auditing and accounting. WHERE YOU CAN FIND MORE INFORMATION We are subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the Exchange Act, we file reports, proxy and information statements and other information with the Commission. Such reports, proxy statements and other information can be inspected and copied at prescribed rates at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661 and 7 World Trade Center, 13th Floor, New York, New York 10048. The Commission also maintains a website that contains reports, proxy and information statements and other information. The website address is http://www.sec.gov. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. 38 42 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION We are paying all of the selling securityholders' expenses related to this offering, except the selling securityholders will pay any applicable broker's commissions and expenses. The following table sets forth the approximate amount of fees and expenses payable by us in connection with this Registration Statement and the distribution of the notes and the shares of common stock registered hereby. All of the amounts shown are estimates except the Securities and Exchange Commission registration fee. Securities and Exchange Commission Registration Fee......... $76,800 Transfer Agent's, Trustees' and Depositary's Fees and Expenses.................................................. ** Printing and Engraving Fees and Expenses.................... ** Accounting Fees and Expenses................................ ** Legal Fees.................................................. ** Miscellaneous Expenses...................................... ** ------- Total.................................................. $ ** =======
- --------------- ** To be filed by amendment. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant is organized under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law permits a Delaware corporation to indemnify any person who is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. A Delaware corporation may similarly indemnify directors, officers, employees and other agents of such corporation in the case of actions or suits brought by or in the right of a corporation under the same conditions against expenses (including attorney's fees) actually and reasonably incurred by the person in connection with the defense and settlement of such action or suit, except that no indemnification is permitted without judicial approval if the person to be indemnified has been adjudged to be liable to the corporation. Where a present or former director or officer of the corporation is successful on the merits or otherwise in the defense of any action, suit or proceeding referred to above or in defense of any claim, issue or matter therein, the corporation must indemnify such person against the expenses (including attorneys' fees) which he or she actually and reasonably incurred in connection therewith. Any indemnification shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the person has met the aforesaid standard of conduct. Such determination shall be made (1) by a majority vote of the directors who were not parties to the action, suit, or proceeding, whether or not a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits, or otherwise, in defense of any action, suit or proceeding described above, or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred in connection therewith. The statute also provides that it is not exclusive of any other rights to which those seeking indemnification may be entitled under any II-1 43 bylaws, agreement, vote of stockholders or disinterested directors, or otherwise. The Registrants' By-Laws provide for the indemnification of its directors and officers to the fullest extent permitted by law. Section 174 of the General Corporation Law of the State of Delaware provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered into the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts. Section 102(b)(7) of the General Corporation Law of the State of Delaware allows a Delaware corporation to limit or eliminate the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of a fiduciary duty as a director. However, this provision excludes any limitation on liability (1) for any breach of the director's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (3) for intentional or negligent payment of unlawful dividends or stock purchases or redemptions or (4) for any transaction from which the director derived an improper benefit. Moreover, while this provision provides directors with protection against awards for monetary damages for breaches of their duty of care, it does not eliminate such duty. Accordingly, this provision will have no effect on the availability of equitable remedies such as an injunction or rescission based on a director's breach of his or her duty of care. Finally, this provision applies to an officer of a corporation only if he or she is a director of such corporation and is acting in his or her capacity as a director, and does not apply to officers of the corporation who are not directors. The Registrant's Amended and Restated Certificate of Incorporation provides for the limitation on liability permitted by Section 102(b)(7). We maintain, at our expense, a policy of insurance which insures our directors and officers, subject to exclusions and deductions as are usual in these kinds of insurance policies, against specified liabilities which may be incurred in those capacities. ITEM 16. EXHIBITS The following is a list of all exhibits filed as a part of this registration statement on Form S-3, including those incorporated in this registration statement by reference.
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - ------- ----------------------- 3.1 Amended and Restated Certificate of Incorporation of The BISYS Group, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, Registration No. 333-02932). 3.2 Amended and Restated By-Laws of The BISYS Group, Inc. (incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, Commission File No. 0-19922). 3.3 Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-1, Registration No. 33-45417). 4.1 Indenture dated as of March 13, 2001 between The BISYS Group, Inc. and Chase Manhattan Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated March 15, 2001, Commission File No. 0-19922). 4.2 Form of 4% Convertible Subordinated Note (included in Exhibit 4.1). 4.3 Registration Rights Agreement dated as of March 13, 2001, between The BISYS Group, Inc., Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation.
II-2 44
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - ------- ----------------------- 5.1 Opinion of Kevin J. Dell, Esq. 12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges. 23.1(a) Consent of PricewaterhouseCoopers LLP, Independent Accountants. 23.1(b) Consent of PricewaterhouseCoopers LLP, Independent Accountants. 23.2 Consent of Kevin J. Dell, Esq. (included in Exhibit 5.1). 24.1 Powers of Attorney. 25.1 A Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Trust Company, National Association, trustee under the Indenture.
ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (b) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (c) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(a) and (1)(b) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 45 Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been informed that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue. II-4 46 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that is has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Little Falls, in the State of New Jersey on June 1, 2001. THE BISYS GROUP, INC. By /s/ LYNN J. MANGUM ------------------------------------ Name: Lynn J. Mangum Title: Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on June 1, 2001.
SIGNATURE TITLE --------- ----- /s/ LYNN J. MANGUM Chairman of the Board of Directors, Chief Executive - --------------------------------------------- Officer and Director (Principal Executive Officer) Lynn J. Mangum /s/ DENNIS R. SHEEHAN Executive Vice President and Chief Financial Officer - --------------------------------------------- (Principal Accounting and Principal Financial Officer) Dennis R. Sheehan * Director - --------------------------------------------- Robert J. Casale * Director - --------------------------------------------- Thomas A. Cooper * Director - --------------------------------------------- Jay W. DeDapper * Director - --------------------------------------------- John J. Lyons * Director - --------------------------------------------- Thomas E. McInerney * Director - --------------------------------------------- Joseph J. Melone
II-5 47 *Lynn J. Mangum hereby signs this Registration Statement on Form S-3 on behalf of each of the indicated persons for whom he is attorney-in-fact on June 1, 2001 pursuant to the powers of attorney filed herewith. By: /s/ LYNN J. MANGUM ---------------------------------- Lynn J. Mangum Attorney-in-fact II-6 48 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - ------- ----------------------- 3.1 Amended and Restated Certificate of Incorporation of The BISYS Group, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, Registration No. 333-02932). 3.2 Amended and Restated By-Laws of The BISYS Group, Inc. (incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1997, Commission File No. 0-19922). 3.3 Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-1, Registration No. 33-45417). 4.1 Indenture dated as of March 13, 2001 between The BISYS Group, Inc. and Chase Manhattan Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated March 15, 2001, Commission File No. 0-19922). 4.2 Form of 4% Convertible Subordinated Note (included in Exhibit 4.1). 4.3 Registration Rights Agreement dated as of March 13, 2001, between The BISYS Group, Inc., Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation. 5.1 Opinion of Kevin J. Bell, Esq. 12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges. 23.1(a) Consent of PricewaterhouseCoopers LLP, Independent Accountants. 23.1(b) Consent of PricewaterhouseCoopers LLP, Independent Accountants. 23.2 Consent of Kevin J. Dell, Esq. (included in Exhibit 5.1). 24.1 Powers of Attorney. 25.1 A Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of Chase Manhattan Trust Company, National Association, trustee under the Indenture.
II-7 EX-4.3 2 y46783ex4-3.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 4.3 REGISTRATION RIGHTS AGREEMENT DATED AS OF MARCH 13, 2001 THE BISYS GROUP, INC. AND BEAR, STEARNS & CO. INC. AND CREDIT SUISSE FIRST BOSTON CORPORATION 2 REGISTRATION RIGHTS AGREEMENT, dated as of March 13, 2001, among THE BISYS GROUP, INC., a Delaware corporation (together with any successor entity, herein referred to as the "ISSUER"), and BEAR, STEARNS & CO. INC. and CREDIT SUISSE FIRST BOSTON CORPORATION (collectively, the "INITIAL PURCHASERS"). Pursuant to the Purchase Agreement, dated March 7, 2001, between the Issuer and the Initial Purchasers (the "PURCHASE AGREEMENT"), the Initial Purchasers have agreed to purchase from the Issuer up to $250,000,000 ($300,000,000 if the Initial Purchasers exercise the over-allotment option in full) in aggregate principal amount of 4% Convertible Subordinated Notes due 2006 (the "CONVERTIBLE NOTES"). The Convertible Notes will be convertible into fully paid, nonassessable common stock, par value $0.02 per share, of the Issuer (the "COMMON STOCK") on the terms, and subject to the conditions, set forth in the Indenture (as defined herein). To induce the Initial Purchasers to purchase the Convertible Notes, and in satisfaction of a condition to the Initial Purchasers' obligations under the Purchase Agreement, the Issuer has agreed to provide the registration rights set forth in this Agreement. The parties hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the following capitalized terms shall have the following meanings: "ADVICE": As defined in Section 4(c)(ii) hereof. "AFFILIATE": with respect to any specified person, means an "affiliate," as defined in Rule 144 under the Securities Act, of such Person. "AGREEMENT": This Registration Rights Agreement. "BLUE SKY APPLICATION": As defined in Section 6(a)(i) hereof. "BROKER-DEALER": Any broker or dealer registered under the Exchange Act. "BUSINESS DAY": A day other than a Saturday or Sunday or any federal holiday in the United States. "CLOSING DATE": The date of this Agreement. "COMMISSION": Securities and Exchange Commission. "COMMON STOCK": As defined in the preamble hereto. "CONTROL": With respect to a person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ability to exercise voting power, by contract or otherwise. "CONVERTIBLE NOTES": As defined in the preamble hereto. "DAMAGES PAYMENT DATE": Each Interest Payment Date. For purposes of this Agreement, if no Convertible Notes are outstanding, "Damages Payment Date" shall mean each March 15 and September 15. 1 3 "EFFECTIVENESS PERIOD": As defined in Section 2(a)(iii) hereof. "EFFECTIVENESS TARGET DATE": As defined in Section 2(a)(ii) hereof. "EXCHANGE ACT": Securities Exchange Act of 1934, as amended. "HOLDER": A Person who owns, beneficially or otherwise, Registrable Securities. "INDEMNIFIED HOLDER": As defined in Section 6(a) hereof. "INDENTURE": The Indenture, dated as of March 13, 2001, between the Issuer and Chase Manhattan Trust Company, National Association, as trustee (the "Trustee"), pursuant to which the Convertible Notes are to be issued, as such Indenture is amended, modified or supplemented from time to time in accordance with the terms thereof. "INITIAL PURCHASERS": As defined in the preamble hereto. "INTEREST PAYMENT DATE": As defined in the Indenture. "ISSUER": As defined in the preamble hereto. "LIQUIDATED DAMAGES": As defined in Section 3(a) hereof. "MAJORITY OF HOLDERS": Holders holding over 50% of the aggregate principal amount of Convertible Notes outstanding; provided that, for purpose of this definition, a Holder of shares of Common Stock which constitute Registrable Securities and issued upon conversion of the Convertible Notes shall be deemed to hold an aggregate principal amount of Convertible Notes (in addition to the principal amount of Convertible Notes held by such Holder) equal to the product of (x) the number of such shares of Common Stock held by such Holder and (y) the prevailing conversion price, such prevailing conversion price as determined in accordance with Article 5 of the Indenture. "NASD": National Association of Securities Dealers, Inc. "PERSON": An individual, partnership, corporation, unincorporated organization, trust, joint venture or a government or agency or political subdivision thereof. "PROSPECTUS": The prospectus included in a Shelf Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. "QUESTIONNAIRE DEADLINE": As defined in Section 2(b) hereof. "RECORD HOLDER": With respect to any Damages Payment Date, each Person who is a Holder on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur. In the case of a Holder of shares of Common Stock issued upon conversion of the Convertible Notes, "Record Holder" shall mean each Person who is a Holder of shares of Common Stock which constitute Registrable Securities on the March 1 or September 1 immediately preceding the Damages Payment Date. 2 4 "REGISTRABLE SECURITIES": Each Convertible Note and each share of Common Stock issued upon conversion of Convertible Notes until, in the case of any such security, (A) the earliest of (i) its effective registration under the Securities Act and resale in accordance with the Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) under the Securities Act were it not held by an Affiliate of the Company or (iii) its sale to the public pursuant to Rule 144 under the Securities Act, and (B) as a result of the event or circumstance described in any of the foregoing clauses (i) through (iii), the legends with respect to transfer restrictions required under the Indenture are removed or removable in accordance with the terms of the Indenture or such legend, as the case may be. "REGISTRATION DEFAULT": As defined in Section 3(a)(iv) hereof. "REGISTRATION STATEMENT": Means any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement. "SALE NOTICE": As defined in Section 4(e) hereof. "SECURITIES ACT": Securities Act of 1933, as amended. "SHELF FILING DEADLINE": As defined in Section 2(a)(i) hereof. "SHELF REGISTRATION STATEMENT": As defined in Section 2(a)(i) hereof. "SUSPENSION PERIOD": As defined in Section 4(b)(i) hereof. "TIA": Trust Indenture Act of 1939, as in effect on the date the Indenture is qualified under the TIA. "UNDERWRITING MAJORITY": On any date, Holders holding at least 66 2/3% of the aggregate principal amount of the Registrable Securities outstanding on such date; PROVIDED that for the purpose of this definition, a holder of shares of Common Stock that constitute Registrable Securities and issued upon conversion of Convertible Notes shall be deemed to hold an aggregate principal amount of Registrable Securities (in addition to the principal amount of Convertible Notes held by such holder) equal to (x) the number of such shares of Common Stock that are Registrable Securities held by such holder multiplied by (y) the then applicable Conversion Price (as defined in the Indenture). "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING": A registration in which securities of the Issuer are sold to an underwriter for reoffering to the public. 2. SHELF REGISTRATION. (a) The Issuer shall: (i) not later than 90 days after the date hereof (the "SHELF FILING DEADLINE"), cause to be filed a registration statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration Statement"), which Shelf Registration Statement shall provide for resales of all Registrable Securities held by Holders that have provided the information required pursuant to the terms of Section 2(b) hereof; 3 5 (ii) use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission no later than 180 days after the date hereof (the "EFFECTIVENESS TARGET DATE"); and (iii) subject to Section 4(b)(i) hereof, use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 4(b) hereof to the extent necessary to ensure that (A) it is available for resales by the Holders of Registrable Securities entitled to the benefit of this Agreement and (B) conforms with the requirements of this Agreement and the Securities Act and the rules and regulations of the Commission promulgated thereunder as announced from time to time for a period (the "EFFECTIVENESS PERIOD") of: (1) two years after the date of filing of the Shelf Registration Statement; or (2) such shorter period, from the date of filing of the Shelf Registration Statement until either of (i) the sale pursuant to a Shelf Registration Statement of all the Registrable Securities or (ii) the expiration of the holding period applicable to the Registrable Securities held by Holders that are not Affiliates of the Company under Rule 144(k) under the Securities Act. (b) No Holder of Registrable Securities may include any of its Registrable Securities in the Shelf Registration Statement pursuant to this Agreement unless such Holder furnishes to the Issuer in writing, prior to or on the 20th Business Days after receipt of a request therefor (the "QUESTIONNAIRE DEADLINE"), such information as the Issuer may reasonably request for use in connection with the Shelf Registration Statement or Prospectus or preliminary Prospectus included therein and in any application to be filed with or under state securities laws. In connection with all such requests for information from Holders of Registrable Securities, the Issuer shall notify such Holders of the requirements set forth in the preceding sentence. No Holder of Registrable Securities shall be entitled to Liquidated Damages pursuant to Section 3 hereof unless such Holder shall have provided all such reasonably requested information prior to or on the Questionnaire Deadline. Each Holder as to which the Shelf Registration Statement is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make information previously furnished to the Issuer by such Holder not materially misleading. 3. LIQUIDATED DAMAGES. (a) If: (i) the Shelf Registration Statement has not been filed with the Commission prior to or on the Shelf Filing Deadline, (ii) the Shelf Registration Statement has not been declared effective by the Commission prior to or on the Effectiveness Target Date, (iii) subject to the provisions of Section 4(b)(i) hereof, the Shelf Registration Statement is filed and declared effective but, during the Effectiveness Period and after the Effectiveness Target Date, shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within five Business Days by a post- effective amendment to the Shelf Registration Statement or a report filed with the Commission pursuant to Section 13(a), 4 6 13(c), 14 or 15(d) of the Exchange Act that cures such failure and, in the case of a post-effective amendment, is itself immediately declared effective, or (iv) prior to or on the 45th or 60th day, as the case may be, of any Suspension Period, such suspension has not been terminated, (each such event referred to in foregoing clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Issuer hereby agrees to pay liquidated damages ("LIQUIDATED DAMAGES") to each Holder from and including the day following the Registration Default to but excluding the day on which the Registration Default has been cured in an amount equal to: (A) with respect to such Holder's Convertible Notes, for the first 90-day period during which a Registration Default shall have occurred and be continuing, an amount equal to 0.25% per annum on the principal amount of such Holder's then outstanding and not converted Convertible Notes, increasing to an amount per annum on the principal amount of such Holder's then outstanding and not converted Convertible Notes equal to 0.50% on the 91st day, provided that in no event shall the aggregate Liquidated Damages pursuant to this clause accrue at a rate per annum exceeding 0.50% of the sum of the principal amount of the then outstanding Convertible Notes; (B) with respect to such Holder's Common Stock issued upon conversion of Convertible Notes for the first 90-day period during which a Registration Default shall have occurred and be continuing, an amount equal to 0.25% per annum on the principal amount of such Holder's converted Convertible Notes, increasing to an amount per annum on the principal amount of such Holder's converted Convertible Notes equal to 0.50% on the 91st day, provided that in no event shall the aggregate Liquidated Damages pursuant to this clause accrue at a rate per annum exceeding 0.50% of the sum of the principal amount of the then converted Convertible Notes; (b) All accrued Liquidated Damages shall be paid in arrears to Record Holders by the Issuer on each Damages Payment Date by wire transfer of immediately available funds or by federal funds check. Following the cure of all Registration Defaults relating to any particular Convertible Note or share of Common Stock, the accrual of Liquidated Damages with respect to such Convertible Note or share of Common Stock will cease. All obligations of the Issuer set forth in this Section 3 that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such Registrable Security shall have been satisfied in full. The Liquidated Damages set forth above shall be the exclusive monetary remedy available to the Holders of Registrable Securities for such Registration Default. 4. REGISTRATION PROCEDURES. (a) In connection with the Shelf Registration Statement, the Issuer shall comply with all the provisions of Section 4(b) hereof and shall, in accordance with Section 2 hereof, prepare and file with the Commission a Shelf Registration Statement relating to the registration on any appropriate form under the Securities Act. 5 7 (b) In connection with the Shelf Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Registrable Securities, the Issuer shall: (i) Subject to any notice by the Issuer in accordance with this Section 4(b) of the existence of any fact or event of the kind described in Section 4(b)(iii)(D), use its reasonable best efforts to keep the Shelf Registration Statement continuously effective during the Effectiveness Period; upon the occurrence of any event that would cause the Shelf Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not be effective and usable for resale of Registrable Securities during the Effectiveness Period, the Issuer shall file promptly an appropriate amendment to the Shelf Registration Statement or a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its reasonable best efforts to cause such amendment to be declared effective and the Shelf Registration Statement and the related Prospectus to become usable for their intended purposes as soon as practicable thereafter. Notwithstanding the foregoing, the Issuer may suspend the effectiveness of the Shelf Registration Statement by written notice to the Holders for a period not to exceed an aggregate of 45 days in any 90-day period (each such period, a "SUSPENSION PERIOD") if: (x) an event occurs and is continuing as a result of which the Shelf Registration Statement would, in the Issuer's reasonable judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (y) the Issuer reasonably determines that the disclosure of such event at such time would have a material adverse effect on the business of the Issuer (and its subsidiaries, if any, taken as a whole); provided that (A) in the event the disclosure relates to a previously undisclosed proposed or pending material business transaction, the disclosure of which would impede the Issuer's ability to consummate such transaction, the Issuer may extend a Suspension Period from 45 days to 60 days and (B) the Suspension Periods shall not exceed an aggregate of 90 days in any 360-day period. Each holder, by its acceptance of a Registrable Security, agrees to hold any communication by us in response to a notice of a proposed material business transaction in confidence. (ii) Prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement effective during the Effectiveness Period; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in the Shelf Registration Statement or supplement to the Prospectus. (iii) Advise the underwriter(s), if any, and, in the case of (A), (C) and (D) below, the selling Holders promptly and, if requested by such Persons, to confirm such advice in writing: 6 8 (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Shelf Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Shelf Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, or (D) of the existence of any fact or the happening of any event, during the Effectiveness Period, that makes any statement of a material fact made in the Shelf Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Shelf Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Shelf Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or Blue Sky laws, the Issuer shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. (iv) Furnish to one counsel for the selling Holders and each of the underwriter(s), if any, before filing with the Commission, a copy of the Shelf Registration Statement and copies of any Prospectus included therein or any amendments or supplements to either of the Shelf Registration Statement or Prospectus (other than documents incorporated by reference after the initial filing of the Shelf Registration Statement), which documents will be subject to the review of such counsel and underwriter(s), if any, for a period of two Business Days, and the Issuer will not file the Shelf Registration Statement or Prospectus or any amendment or supplement to the Shelf Registration Statement or Prospectus (other than documents incorporated by reference) to which such counsel or the underwriter(s), if any, shall reasonably object within two Business Days after the receipt thereof. Such counsel or underwriter, if any, shall be deemed to have reasonably objected to such filing if the Shelf Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission. (v) Subject to the execution of a confidentiality agreement reasonably acceptable to the Issuer, make available at reasonable times for inspection by one or more representatives of the selling Holders, designated in writing by a Majority of Holders whose Registrable Securities are included in the Shelf Registration Statement, any underwriter, if any, participating in any distribution pursuant to the Shelf Registration Statement, and any attorney or accountant retained by the Majority of Holders or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of the Issuer as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the Issuer's officers, directors, managers and employees to supply all information reasonably requested by any such representative or representatives of the selling Holders, underwriter, attorney or accountant in connection with the Shelf Registration Statement after the filing thereof and before its 7 9 effectiveness; provided, however, that any information designated by the Company as confidential at the time of delivery of such information shall be kept confidential by the recipient thereof. (vi) If requested by any selling Holders or the underwriter(s), if any, incorporate in the Shelf Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation: (1) information relating to the "Plan of Distribution" of the Registrable Securities, (2) information with respect to the principal amount of Convertible Notes or number of shares of Common Stock being sold, (3) the purchase price being paid therefor and (4) any other terms of the offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after the Issuer is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment. (vii) Furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Shelf Registration Statement, as first filed with the Commission, and of each amendment thereto (and any documents incorporated by reference therein or exhibits thereto (or exhibits incorporated in such exhibits by reference) as such Person may request in writing). (viii) Deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; subject to any notice by the Issuer in accordance with this Section 4(b) of the existence of any fact or event of the kind described in Section 4(b)(iii)(D), the Issuer hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto. (ix) If an underwriting agreement is entered into and the registration is an Underwritten Registration, the Issuer shall: (A) upon request, furnish to each selling Holder and each underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of closing of any sale of Registrable Securities in an Underwritten Registration: (1) a certificate, dated the date of such closing, signed by (y) the Chairman of the Board, its President or a Vice President and (z) the Chief Financial Officer of the Issuer confirming, as of the date thereof, such matters as such parties may reasonably request; (2) opinions, each dated the date of such closing, of counsel to the Issuer covering such matters as are customarily covered in legal opinions to underwriters in connection with primary underwritten offerings of securities; and (3) customary comfort letters, dated the date of such closing, from the Issuer's independent accountants (and from any other accountants whose report is contained or incorporated by reference in the Shelf Registration Statement), in the customary form and 8 10 covering matters of the type customarily covered in comfort letters to underwriters in connection with primary underwritten offerings of securities; (B) set forth in full in the underwriting agreement, if any, indemnification provisions and procedures which provide rights no less protective than those set forth in Section 6 hereof with respect to all parties to be indemnified; and (C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the selling Holders pursuant to this clause (ix). (x) Before any public offering of Registrable Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Registrable Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Shelf Registration Statement; provided, however, that the Issuer shall not be required (A) to register or qualify as a foreign corporation or a dealer of securities where it is not now so qualified or to take any action that would subject it to the service of process in any jurisdiction where it is not now so subject or (B) to subject themselves to taxation in any such jurisdiction if they are not now so subject. (xi) Cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (unless required by applicable securities laws); and enable such Registrable Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may reasonably request at least two Business Days before any sale of Registrable Securities made by such underwriter(s). (xii) Use its reasonable best efforts to cause the Registrable Securities covered by the Shelf Registration Statement to be registered with or approved by such other U.S. governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Registrable Securities, subject to the proviso in clause (x) above. (xiii) Subject to Section 4(b)(i) hereof, if any fact or event contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred, use its reasonable best efforts prepare a supplement or post-effective amendment to the Shelf Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. (xiv) Provide CUSIP numbers for all Registrable Securities not later than the effective date of the Shelf Registration Statement and provide the Trustee under the Indenture with certificates for the Convertible Notes that are in a form eligible for deposit with The Depository Trust Company. 9 11 (xv) Cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter that is required to be retained in accordance with the rules and regulations of the NASD. (xvi) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission and all reporting requirements under the rules and regulations of the Exchange Act. (xvii) Cause the Indenture to be qualified under the TIA not later than the effective date of the Shelf Registration Statement required by this Agreement, and, in connection therewith, cooperate with the trustee and the holders of Convertible Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use its reasonable best efforts to cause the trustee thereunder to execute all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner. (xviii) Cause all Registrable Securities covered by the Shelf Registration Statement to be listed or quoted, as the case may be, on each securities exchange or automated quotation system on which securities issued by the Issuer of the same series are then listed or quoted. (xix) Provide promptly to each Holder upon written request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act after the effective date of the Shelf Registration Statement, unless such documents are available from EDGAR. (xx) If requested by the underwriters in an Underwritten Offering, make appropriate officers of the Issuer reasonably available to the underwriters for meetings with prospective purchasers of the Registrable Securities and prepare and present to potential investors customary "road show" material in a manner consistent with other new issuances of other securities similar to the Registrable Securities. (c) Each Holder agrees by acquisition of a Registrable Security that, upon receipt of any notice from the Issuer of the existence of any fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will, and will use its reasonable best efforts to cause any underwriter(s) in an Underwritten Offering to, forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until: (i) such Holder has received copies of the supplemented or amended Prospectus contemplated by Section 4(b)(xiii) hereof; or (ii) such Holder is advised in writing (the "ADVICE") by the Issuer that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Issuer, each Holder will deliver to the Issuer (at the Issuer's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities that was current at the time of receipt of such notice of suspension. 10 12 (d) Each Holder who intends to be named as a selling Holder in the Shelf Registration Statement shall furnish to the Issuer in writing, within 20 Business Days after receipt of a request therefor as set forth in a questionnaire in the form attached hereto as Annex A, such information regarding such Holder and the proposed distribution by such Holder of its Registrable Securities as the Issuer may reasonably request for use in connection with the Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Holders that do not complete the questionnaire and deliver it to the Issuer shall not be named as selling securityholders in the Prospectus or preliminary Prospectus included in the Shelf Registration Statement and therefore shall not be permitted to sell any Registrable Securities pursuant to the Shelf Registration Statement. Each Holder who intends to be named as a selling Holder in the Shelf Registration Statement shall promptly furnish to the Issuer in writing such other information as the Issuer may from time to time reasonably request in writing. (e) Upon the effectiveness of the Shelf Registration Statement, each Holder shall notify the Issuer at least three Business Days prior to any intended distribution of Registrable Securities pursuant to the Shelf Registration Statement (a "SALE NOTICE"), which notice shall be effective for five Business Days. Each Holder of this Security, by accepting the same, agrees to hold any communication by the Company in response to a Sale Notice in confidence. 5. REGISTRATION EXPENSES. (a) All expenses incident to the Issuer's performance of or compliance with this Agreement shall be borne by the Issuer regardless of whether a Shelf Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (other than filings made by any Initial Purchasers or Holders with the NASD); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses and certificates for the Common Stock to be issued upon conversion of the Convertible Notes), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel to the Issuer and, subject to Section 5(b) below, the Holders of Registrable Securities; (v) all application and filing fees in connection with listing (or authorizing for quotation) the Common Stock on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Issuer (including the expenses of any special audit and comfort letters required by or incident to such performance). The Issuer shall bear its internal expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal, accounting or other duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuer. 11 13 (b) In connection with the Shelf Registration Statement required by this Agreement, the Issuer shall reimburse the Initial Purchasers and the Holders of Registrable Securities being registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, which shall be Latham & Watkins or such other chosen by a Majority of Holders for whose benefit the Shelf Registration Statement is being prepared and is reasonably acceptable to the Issuer. The Issuer shall not be required to pay any underwriter discount, commission or similar fees related to the sale of the Securities. 6. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuer, jointly and severally, shall indemnify and hold harmless each Holder, such Holder's directors, officers, employees, representatives, agents and each person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act (each, an "INDEMNIFIED HOLDER"), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to resales of the Registrable Securities), to which such Indemnified Holder may become subject, under the Securities Act or otherwise, insofar as any such loss, claim, damage, liability or action arises out of, or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the Shelf Registration Statement or Prospectus or any amendment or supplement thereto or (B) any blue sky application or other document or any amendment or supplement thereto prepared or executed by the Issuer (or based upon written information furnished by or on behalf of the Issuer expressly for use in such blue sky application or other document or amendment on supplement) filed in any jurisdiction specifically for the purpose of qualifying any or all of the Registrable Securities under the securities law of any state or other jurisdiction (such application or document being hereinafter called a "BLUE SKY APPLICATION"); or (ii) the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Indemnified Holder promptly upon demand for any legal or other expenses reasonably incurred by such Indemnified Holder in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Issuer shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in the Shelf Registration Statement or Prospectus or amendment or supplement thereto or Blue Sky Application in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of any Holder (or its related Indemnified Holder) specifically for use therein; provided further that as to any preliminary Prospectus, this indemnity agreement shall not inure to the benefit of any Indemnified Holder or any officer, employee, representative, agent, director or controlling person of that Indemnified Holder on account of any loss, claim, damage, liability or action arising from the sale of the Registrable Securities sold pursuant to the Shelf Registration Statement to any person by such Indemnified Holder if (i) that Indemnified Holder failed to send or give a copy of the Prospectus, as the same may be amended or supplemented, to that person within the time required by the Securities Act and (ii) the untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in such preliminary Prospectus was corrected in the Prospectus or a supplement or amendment thereto, as the case may be, unless in each case, such failure resulted from noncompliance by the Issuer with Section 4. The foregoing indemnity agreement is in addition to any liability which the Issuer may otherwise have to any Indemnified Holder. 12 14 (b) Each Holder, severally and not jointly, shall indemnify and hold harmless the Issuer, its directors, officers, employees, representatives, agents and each person, if any, who controls the Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Issuer or any such officer, employee, representative, agent or controlling person may become subject, insofar as any such loss, claim, damage or liability or action arises out of, or is based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in the Shelf Registration Statement or Prospectus or any amendment or supplement thereto or any Blue Sky Application; or (ii) the omission or the alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but in each case only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of such Holder (or its related Indemnified Holder) specifically for use therein, and shall reimburse the Issuer and any such director, officer, employee, representative, agent or controlling person promptly upon demand for any legal or other expenses reasonably incurred by the Issuer or any such officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Holder may otherwise have to the Issuer and any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under this Section 6 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 6 except to the extent it has been materially prejudiced by such failure and, provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 6. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 6 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the indemnified party shall have the right to employ counsel to represent jointly the indemnified party and its respective directors, employees, officers and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified party against the indemnifying party under this Section 6 if such indemnified party shall have been advised in writing that the representation of such indemnified party and those directors, employees, officers and controlling persons by the same counsel would be inappropriate under applicable standards of professional conduct due to actual or potential differing interests between 13 15 them, and in that event the fees and expenses of such separate counsel shall be paid by the indemnifying party. It is understood that the indemnifying party shall not be liable for the fees and expenses of more than one separate firm (in addition to local counsel in each jurisdiction) for all indemnified parties in connection with any proceeding or related proceedings. Each indemnified party, as a condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall use its reasonable best efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall: (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld) effect any settlement of any pending or threatened action in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss of liability by reason of such settlement or judgment in accordance with this Section 6. (d) If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the registration of the Registrable Securities pursuant to the Shelf Registration, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 6(d), the Holders of the Registrable Securities shall not be required to contribute any amount in excess of the amount by which the gross proceeds received by such Holders from the sale of the Registrable Securities pursuant to the Shelf Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not 14 16 guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. (e) The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser, any Holder or any person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company, its officers or directors or any person controlling the Company, and (iii) any sale of Registrable Securities pursuant to the Shelf Registration Statement. 7. RULE 144A. In the event the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for so long as any Registrable Securities remain outstanding, to make available to any Holder or beneficial owner of Registrable Securities in connection with any sale thereof and any prospective purchaser of such Registrable Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Securities pursuant to Rule 144A. 8. UNDERWRITTEN REGISTRATIONS. (a) The Underwriting Majority may sell its Registrable Securities in an Underwritten Offering pursuant to the Shelf Registration Statement only with the Issuer's consent, which consent may be granted or withheld in the Issuer's sole discretion. (b) PARTICIPATION OF HOLDERS. No Holder may participate in any Underwritten Registration hereunder unless such Holder: (i) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents reasonably required under the terms of such underwriting arrangements. (c) SELECTION OF UNDERWRITERS. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by a Majority of Holders whose Registrable Securities are included in such Underwriting Offering; provided, that such investment bankers and managers must be reasonably satisfactory to the Issuer. 9. MISCELLANEOUS. (a) REMEDIES. The Issuer acknowledges and agrees that any failure by the Issuer to comply with its obligations under Section 2 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to 15 17 specifically enforce the Issuer's obligations under Section 2 hereof. The Issuer further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) NO INCONSISTENT AGREEMENTS. The Issuer will not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. In addition, the Issuer shall not grant to any of its security holders (other than the holders of Registrable Securities in such capacity) the right to include any of its securities in the Shelf Registration Statement provided for in this Agreement other than the Registrable Securities. Other than as disclosed in the Issuer's Offering Memorandum dated March 7, 2001, the Issuer has not previously entered into any agreement (which has not expired or been terminated) granting any registration rights with respect to its securities to any Person which rights conflict with the provisions hereof. (c) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Issuer shall not, directly or indirectly, take any action with respect to the Registrable Securities as a class that would adversely affect the ability of the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement. (d) AMENDMENTS AND WAIVERS. This Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, unless the Issuer has obtained the written consent of a Majority of Holders; provided, however, that no amendment, modification, supplement, waiver or consent to or departure from the provisions of Section 6 that materially and adversely affects a Holder hereof shall be effective as against any such Holder of Registrable Securities unless consented to in writing by such Holder. (e) NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i) if to a Holder, at the address set forth on the records of the registrar under the Indenture or the transfer agent of the Common Stock, as the case may be; and (ii) if to the Issuer: The BISYS Group, Inc. 150 Clove Road Little Falls, NJ 07424 Fax No.: (973) 812-1217 Attention: Edward Forman With a copy to: Skadden, Arps, Slate, Meagher & Flom 4 Times Square New York, NY 10036 Fax No.: (212) 735-2000 Attention: Vincent Pisano, Esq. (iii) if to the Initial Purchasers: 16 18 Credit Suisse First Boston Corporation Eleven Madison Avenue New York, NY 10010-3629 Fax No.: (212) 325-8278 Attention: Transactions Advisory Group With a copy to: Latham & Watkins 885 Third Avenue New York, NY 10022 Fax No.: (212) 751-4864 Attention: Marc Jaffe, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. A document or notice shall be deemed to have been furnished to the Holders of the Registrable Securities if it is provided to the registered holders of the Registrable Securities at the address set forth in clause (i) above. (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Registrable Securities; provided, however, that (i) nothing contained herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture and (ii) this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Registrable Securities from such Holder. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Issuer with respect to any failure by a Holder to comply with, or breach by any Holder of, any of the obligations of such Holder under this Agreement. (g) PURCHASES AND SALES OF CONVERTIBLE NOTES. The Company shall not, and shall use its reasonable best efforts to cause its affiliates (as defined in Rule 405 under the Securities Act) within its Control not to, purchase and then resell or otherwise transfer any Convertible Notes. 17 19 (h) THIRD PARTY BENEFICIARY. The Holders shall be third party beneficiaries to the agreements made hereunder between the Issuer and the Initial Purchasers, and such Initial Purchasers shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. (i) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (j) SECURITIES HELD BY THE ISSUER OR THEIR AFFILIATES. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuer or its "affiliates" (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (k) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (l) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. (m) CONSENT TO JURISDICTION. Each party irrevocably agrees that any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby ("Related Proceedings") may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the Borough of Manhattan in the City of New York (collectively, the "Specified Courts"), and irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a "Related Judgment"), as to which such Jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. The parties further agree that service of any process, summons, notice or document by mail to such party's address set forth above shall be effective service of process for any lawsuit, action or other proceeding brought in any such court. The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding in the Specified Courts, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action or other proceeding brought in any such court has been brought in an inconvenient forum. (n) SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (o) ENTIRE AGREEMENT. This Agreement together with the Purchase Agreement and the Indenture, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuer with respect to the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 18 20 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Very truly yours, The BISYS Group, Inc. By /s/ Kevin J. Dell ----------------------------- Name: Kevin J. Dell Title: Executive Vice President and General Counsel The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written. BEAR, STEARNS & CO. INC. By /s/ Rick A. Lacher ------------------------------------ Name: Rick A. Lacher Title: Senior Managing Director CREDIT SUISSE FIRST BOSTON CORPORATION By /s/ Nicholas Golding ------------------------------------ Name: Nicholas Golding Title: Director 21 ANNEX A THE BISYS GROUP, INC. NOTICE OF REGISTRATION STATEMENT AND SELLING SECURITYHOLDER ELECTION AND QUESTIONNAIRE NOTICE The BISYS Group, Inc. (the "Company") has filed, or intends shortly to file, with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 or such other Form as may be available (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Company's 4% Convertible Subordinated Notes due 2006 (CUSIP No. 055-472-AA2) (the "Notes"), and common stock, par value $0.02 per share, issuable upon conversion and thereof (the "Shares" and together with the Notes, the "Transfer Restricted Securities") in accordance with the terms of the Registration Rights Agreement, dated as of March 13, 2001 (the "Registration Rights Agreement") between the Company and Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation. A copy of the Registration Rights Agreement is available from the Company. All capitalized terms not otherwise defined herein have the meaning ascribed thereto in the Registration Rights Agreement. To sell or otherwise dispose of any Transfer Restricted Securities pursuant to the Shelf Registration Statement, a beneficial owner of Transfer Restricted Securities generally will be required to be named as a selling securityholder in the related Prospectus, deliver a Prospectus to purchasers of Transfer Restricted Securities, be subject to certain civil liability provisions of the Securities Act and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification rights and obligations, as described below). To be included in the Shelf Registration Statement, this Election and Questionnaire must be completed, executed and delivered to the Company at the address set forth herein for receipt PRIOR TO OR ON [insert date that is 20 business days from the notice date] (the "Election and Questionnaire Deadline"). BENEFICIAL OWNERS THAT DO NOT COMPLETE AND RETURN THIS ELECTION AND QUESTIONNAIRE PRIOR TO THE ELECTION AND QUESTIONNAIRE DEADLINE AND DELIVER IT TO THE COMPANY AS PROVIDED BELOW WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE PROSPECTUS AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY TRANSFER RESTRICTED SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and the related Prospectus. Accordingly, holders and beneficial owners of Transfer Restricted Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and the related Prospectus. ELECTION The undersigned holder (the "Selling Securityholder") of Transfer Restricted Securities hereby elects to include in the Shelf Registration Statement the Transfer Restricted Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3). The undersigned, by signing and returning this Election and Questionnaire, understands that it will be A-1 22 Annex A bound with respect to such Transfer Restricted Securities by the terms and conditions of this Election and Questionnaire and the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, the Selling Securityholder has agreed to indemnify and hold harmless the Company, the Company's directors, the Company's officers, employees, representatives and agents who sign the Shelf Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against certain losses arising in connection with statements concerning the Selling Securityholder made in the Shelf Registration Statement or the related Prospectus in reliance upon the information provided in this Election and Questionnaire. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: QUESTIONNAIRE 1. (a) Full legal name of Selling Securityholder: ------------------------------------------------------------- (b) Full legal name of registered holder (if not the same as (a) above) through which Transfer Restricted Securities listed in (3) below are held: ------------------------------------------------------------- (c) Full legal name of DTC participant (if applicable and if not the same as (b) above) through which Transfer Restricted Securities listed in (3) are held: 2. Address for notices to Selling Securityholders: ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- Telephone: ------------------------------------------------------------ Fax: ------------------------------------------------------------------ Contact Person: ------------------------------------------------------- 3. Beneficial ownership of Transfer Restricted Securities: (a) Type of Transfer Restricted Securities beneficially owned, and principal amount of Notes or Number of shares of Common Stock, as the case may be, beneficially owned: (b) CUSIP No(s). of such Transfer Restricted Securities beneficially owned: 4. Beneficial ownership of the Company's securities owned by the Selling Securityholder: A-2 23 Annex A EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE TRANSFER RESTRICTED SECURITIES LISTED ABOVE IN ITEM (3) ("OTHER SECURITIES"). (a) Type and amount of Other Securities beneficially owned by the Selling Securityholder: ---------------------------------------------------------------------- (b) CUSIP No(s). of such Other Securities beneficially owned: ---------------------------------------------------------------------- 5. Relationship with the Company Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or their predecessors or affiliates) during the past three years. State any exceptions here: ---------------------------------------------------------------------- ---------------------------------------------------------------------- 6. Plan of Distribution: Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Transfer Restricted Securities listed above in Item (3) pursuant to the Shelf Registration Statement only as follows (if at all). Such Transfer Restricted Securities may be sold from time to time directly by the undersigned or, alternatively, through underwriters, broker-dealers or agents. If the Transfer Restricted Securities are sold through underwriters or broker-dealers, the Selling Securityholder will be responsible for underwriting discounts or commissions or agent's commissions. Such Transfer Restricted Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions): (i) on any national securities exchange or quotation service on which the Transfer Restricted Securities may be listed or quoted at the time of sale; (ii) in the over-the-counter market; (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market; or (iv) through the writing of options. In connection with sales of the Transfer Restricted Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Transfer Restricted Securities and deliver Transfer Restricted Securities to A-3 24 Annex A close out such short positions, or loan or pledge Transfer Restricted Securities to broker-dealers that in turn may sell such securities. State any exceptions here: ----------------------------------------------------------------------- ----------------------------------------------------------------------- Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Transfer Restricted Securities without the prior agreement of the Company. By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees it will comply, with the provisions of the prospectus delivery and other provisions of the Securities Act and Exchange Act and the respective rules and regulations promulgated thereunder, particularly Regulation M thereunder (or any successor rules or regulations), in connection with any offering of Transfer Restricted Securities pursuant to the Shelf Registration Statement. If the Selling Securityholder transfers all or any portion of the Transfer Restricted Securities listed in Item 3 above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Election and Questionnaire and the Registration Rights Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and the related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Shelf Registration Statement and the related Prospectus. In accordance with the Selling Securityholder's obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below. Once this Election and Questionnaire is executed by the Selling Securityholders and received by the Company, the terms of this Election and Questionnaire and the representations and warranties contained herein shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the Selling Securityholder with respect to the Transfer Restricted Securities beneficially owned by such Selling Securityholder and listed in Item 3 above. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. A-4 25 Annex A IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Election and Questionnaire to be executed and delivered either in person or by its authorized agent. Dated: Beneficial Owner By: -------------------------------- Name: Title: Please return the completed and executed Election and Questionnaire for receipt PRIOR TO OR ON [DEADLINE FOR RESPONSE] to The BISYS Group, Inc. at: The BISYS Group, Inc. 150 Clove Road Little Falls, New Jersey 07424 Attention: Treasurer A-5 26 Exhibit 1 to Annex A NOTICE TO TRANSFER PURSUANT TO REGISTRATION STATEMENT The BISYS Group, Inc. 150 Clove Road Little Falls, New Jersey 07424 Attention: Treasurer The Chase Manhattan Trust Company, National Association One Liberty Place 1650 Market Street, Suite 5210 Philadelphia, PA 19103 Attention: Institutional Trust Services Re: The BISYS Group, Inc.'s 4% Convertible Subordinated Notes due 2006 (the "Notes") Dear Sirs: Please be advised that __________ has transferred $_________ aggregate principal amount of the above-referenced Notes or ____________________________ shares of the Company's Common Stock issued on conversion or repurchase of Notes, pursuant to the Registration Statement on Form S-3 (File No. 333- __________ ) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied with respect to the transfer described above and that the above named beneficial owner of the Notes or Common Stock is named as a selling securityholder in the Prospectus dated _____________________ , or in amendments or supplements thereto, and that the aggregate principal amount of the Notes or number of shares of Common Stock transferred are [all or a portion of] the Notes or Common Stock listed in such Prospectus, as amended or supplemented, opposite such owner's name. Very truly yours, [name] By:____________________________________ (Authorized signature) Dated: A-E1 EX-5.1 3 y46783ex5-1.txt OPINION RE LEGALITY 1 [LETTERHEAD OF THE BISYS GROUP, INC.] EXHIBIT 5.1 June 1, 2001 The BISYS Group, Inc. 150 Clove Road Little Falls, New Jersey 07424 Re: The BISYS Group Inc.'s Registration Statement on Form S-3 Ladies and Gentlemen: I am the Executive Vice President and General Counsel of The BISYS Group, Inc., a Delaware corporation (the "Company"), and am acting as counsel in connection with its filing with the Securities and Exchange Commission (the "Commission") of a registration statement on Form S-3 (the "Registration Statement"), with respect to the registration under the Securities Act of 1933, as amended (the "Securities Act"), of $300,000,000 aggregate principal amount at maturity of its 4% Convertible Subordinated Notes due 2006 (the "Securities"), and shares of the Company's common stock, par value $0.02 per share (the "Shares"), issuable upon conversion of the Securities pursuant to that certain indenture, dated as of March 13, 2001 (the "Indenture"), between the Company and Chase Manhattan Trust Company, National Association, as trustee. The Company issued the Securities pursuant to that certain purchase agreement, dated as of March 7, 2001, by and between the Company and Bear, Stearns & Co. Inc. and Credit Suisse First Boston Corporation, as initial purchasers (the "Purchase Agreement"). The Securities and the Shares are to be offered and sold by certain securityholders of the Company. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. In connection with this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of the Registration Statement, the Indenture and the Purchase Agreement. I have also examined originals or copies, certified or otherwise identified to my satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other 2 The BISYS Group, Inc. June 1, 2001 representatives of the Company and others, and such other documents, certificates and records as I have deemed necessary or appropriate as a basis for the opinions set forth herein. In my examination, I have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies and the authenticity of the originals of such latter documents. In making my examination of executed documents, I have assumed that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery of such documents by the parties to such documents, and the validity and binding effect thereof. As to any facts material to the opinions expressed herein which I did not independently establish or verify, I have relied upon oral or written statements and representations of officers and other representatives of the Company and others. I am admitted to the bars in the States of New York and New Jersey and do not express any opinion as to the laws of any other jurisdiction. Based upon and subject to the limitations, qualifications, exceptions and assumptions set forth above, I am of the opinion that: 1. The Securities have been duly authorized and are valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent enforcement thereof might be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting creditor's rights generally, and (ii) general principles of equity, regardless of whether enforceability is considered in a proceeding at law or equity. 2. The Shares initially issuable upon conversion of the Securities have been duly authorized and reserved for issuance and, when issued and delivered upon such conversion pursuant to the terms of the Indenture, will be validly issued, fully paid and non-assessable. 3 The BISYS Group, Inc. June 1, 2001 I hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. I also consent to the reference to the use of my name under the caption "Legal Matters" in the Registration Statement. In giving this consent, I do not thereby admit that I am included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. Very truly yours, /s/ Kevin J. Dell ----------------------------------------- Kevin J. Dell, Esq. Executive Vice President and General Counsel EX-12.1 4 y46783ex12-1.txt STATEMENT RE COMPUTATION OF RATIOS 1 Exhibit 12.1 The BISYS Group, Inc. Computation of Ratio of Earnings to Fixed Charges (Amounts in thousands)
Year ended, June 30, ------------------------------------------------------------- 1996 1997 1998 1999 2000 ------------------------------------------------------------- Income before income tax provision $30,260 $67,918 $66,753 $76,192 $116,039 ============================================================ Fixed charges (1): Interest expense 676 269 362 1,490 3,134 Operating rental expense 5,297 5,032 5,478 6,721 6,822 ------------------------------------------------------------- Total fixed charges $5,973 $5,301 $5,840 $8,211 $9,956 ============================================================ Income before income tax provision plus fixed charges $36,233 $73,219 $72,593 $84,403 $125,995 ============================================================ Ratio of earnings to fixed charges (1) 6.1x 13.8x 12.4x 10.3x 12.7x ============================================================
Nine months ended March 31, ------------------- 2000 2001 ------------------- Income before income tax provision $78,009 $93,338 ===================== Fixed Charges (1): Interest expense 2,821 7,763 Operating rental expense 5,117 5,192 --------------------- Total fixed charges $7,938 $12,955 ===================== Income before income tax provision plus fixed charges $85,947 $106,293 ===================== Ratio of earnings to fixed charges (1) 10.8x 8.2x =====================
(1) These ratios are calculated by dividing (a) earnings before income taxes adjusted for fixed charges by (b) fixed charges. Fixed charges include interest expense plus capitalized interest costs and the portion of operating rental expense which we believe is representative of the interest component of rental expense. Computation of Pro Forma Ratio of Earnings After Adjustment for Issuance of Debentures
Year ended Nine months ended June 30, March 31, 2000 2001 -------- -------- Income before income tax provision $116,039 $93,338 ======== ======== Fixed charges, as above 9,956 12,955 Adjustments: Estimated net increase in interest expense from refinancing 9,403 2,329 -------- -------- Total pro forma fixed charges $19,359 $15,284 ======== ======== Pro forma ratio of earnings to fixed charges 6.0x 6.1x ======== ========
EX-23.1.A 5 y46783ex23-1_a.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23.1(A) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 of our report dated August 4, 2000 relating to the financial statements, which appears in The BISYS Group, Inc.'s Annual Report on Form 10-K for the year ended June 30, 2000. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP ------------------------------ PricewaterhouseCoopers LLP Columbus, Ohio June 1, 2001 EX-23.1.B 6 y46783ex23-1_b.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23.1(B) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 of The BISYS Group, Inc. of our report dated August 15, 2000 relating to the financial statements of Pictorial Holdings, Inc., which appears in The BISYS Group, Inc.'s Current Report on Form 8-K/A dated September 15, 2000. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP ------------------------------ PricewaterhouseCoopers LLP Columbus, Ohio June 1, 2001 EX-24.1 7 y46783ex24-1.txt POWER OF ATTORNEY 1 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Thomas E. McInerney ----------------------- Name: Thomas E. McInerney Title: Director 1 2 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ John J. Lyons ------------------------------------ Name: John J. Lyons Title: Director 2 3 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Jay DeDapper ------------------------------------ Name: Jay DeDapper Title: Director 3 4 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in- fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Lynn J. Mangum ------------------------------------ Name: Lynn J. Mangum Title: Chairman of the Board, Chief Executive Officer and Director 4 5 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in- fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Dennis R. Sheehan ------------------------------------ Name: Dennis R. Sheehan Title: Executive Vice President and Chief Financial Officer 5 6 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Thomas A. Cooper ------------------------------------ Name: Thomas A. Cooper Title: Director 6 7 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Robert J. Casale ------------------------------------ Name: Robert J. Casale Title: Director 7 8 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and appoints Lynn J. Mangum, Dennis R. Sheehan and Kevin J. Dell, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to do any and all acts and things and to execute any and all instruments and documents which said attorney-in-fact and agent may deem necessary or desirable to enable The BISYS Group, Inc. (the "Company") to comply with the Securities Act of 1933, as amended (the "Act"), and any rules, regulations and requirements of the Securities and Exchange Commission (the "Commission") thereunder, in connection with the registration under the Act of the Company's 4% convertible subordinated notes due 2006 (the "Notes") and shares of common stock of the Company, par value $.02, issuable upon conversion of the Notes ("Common Stock"), to be offered and sold by selling stockholders of the Company, in connection with certain transactions approved by the Board of Directors of the Company, including specifically, but without limiting the generality of the foregoing, the power and authority to sign the name of the undersigned to a registration statement under the Act on an appropriate form covering said Notes and shares of Common Stock, and any amendments to such registration statement, to be filed with the Commission, and to any and all instruments or documents filed as part of or in connection with such registration statement or any amendments thereto; and the undersigned hereby ratifies and confirms all that said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 31st day of May, 2001. /s/ Joseph J. Melone ------------------------------------ Name: Joseph J. Melone Title: Director 8 EX-25.1 8 y46783ex25-1.txt FORM T-1 1 Exhibit 25.1 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) _______ ---------------------------------------- CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 29-2933369 (State of incorporation (I.R.S. employer if not a national bank) identification No.) UNION TRUST BUILDING, SUITE 325 501 GRANT STREET, PITTSBURGH, PA 15219 (Address of principal executive offices) (Zip Code) WILLIAM H. MCDAVID THE CHASE MANHATTAN BANK GENERAL COUNSEL 270 PARK AVENUE NEW YORK, NEW YORK 10017 TEL: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- THE BISYS GROUP, INC. (Exact name of obligor as specified in its charter) NEW JERSEY 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) ------------------------------------------------- $300,000,000 4% CONVERTIBLE SUBORDINATED NOTES DUE 2006 (Title of the indenture securities) ------------------------------------------------------------------- 2 GENERAL ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a)NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of the Currency, Washington, D.C. (b)WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. NO RESPONSES ARE INCLUDED FOR ITEMS 3-15 OF THIS FORM T-1 BECAUSE THE OBLIGOR IS NOT IN DEFAULT AS PROVIDED UNDER ITEM 13. ITEM 16. LIST OF EXHIBITS List below all exhibits filed as a part of this Statement of Eligibility. 1. EXHIBIT 1 A copy of the Articles of Association of the Trustee as now in effect. 2. EXHIBIT 2 A copy of the Certificate of Authority of the Trustee dated October 25, 2000 from the Comptroller of the Currency authorizing the exercise of fiduciary powers by the Trustee. 3. EXHIBIT 3 A copy of the By-Laws of the Trustee as now in effect. 4. EXHIBIT 4 The Trustee's consent required by Section 321(b) of the Act. 5. EXHIBIT 5 A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 3 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, Chase Manhattan Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Philadelphia and State of Pennsylvania, on the 17th day of April, 2001. CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION By \s\ S. R. Schaaf ----------------- S. R. Schaaf Vice President 4 EXHIBIT 1 [CHASE LOGO] CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION CHARTER NO. 23548 ARTICLES OF ASSOCIATION For the purpose of organizing an Association to perform any lawful activities of a national bank, the undersigned do enter into the following Articles of Association: FIRST. The title of this Association shall be Chase Manhattan Trust Company, National Association (the "Association"). SECOND. The main office of the Association shall be in the City of Pittsburgh, County of Allegheny, Commonwealth of Pennsylvania. The business of the Association shall be limited to the fiduciary powers and the support of activities incidental to the exercise of those powers. The Association will obtain the prior written approval of the Office of the Comptroller of the Currency before amending these Articles of Association to expand the scope of its activities and services. THIRD. The board of directors of this Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director, during the full term of his directorship, shall own common or preferred stock of the Association or of a holding company owning the Association, with an aggregate par, fair market or equity value of not less than $1,000. Any vacancy in the board of directors may be filled by action of the shareholders or a majority of the remaining directors. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated. FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefore in the by-laws, or if that day falls on a legal holiday in the state in which the Association is located, on the next following banking day. If no election is held on the day fixed or in event of a legal holiday, on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. Advance notice of the meeting may be duly waived by the sole shareholder in accordance with 12 C.F.R. 7.2001. A director may resign at any time by delivering written notice to the board of directors, its Chairperson, or to the Association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. A director may be removed by shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose or one of the purposes is to remove him or her is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause. FIFTH. The authorized amount of capital stock of this Association shall be five million dollars ($5,000,000), divided into fifty thousand (50,000) shares of common stock of the par value of one hundred dollars ($ 100) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States. 5 No holder of shares of the capital stock of any class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued, or sold, nor any right to subscription to any thereof other than such, if any, as the board of directors, in its discretion may from time to time determine and at such price as the board of directors may from time to time fix. Unless otherwise specified in the Articles of Association or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. SIXTH. The board of directors may appoint one of its members President of this Association, and one of its members Chairperson of the board or two of its members as Co-Chairpersons of the board, and shall have the power to appoint one or more Vice Presidents, a Secretary who shall keep minutes of the directors' and shareholders' meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required to transact the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the by-laws. 6 The board of directors shall have the power to: (1) Define the duties of the officers, employees, and agents of the Association. (2) Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the Association. (3) Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law. (4) Dismiss officers and employees. (5) Require bonds from officers and employees and fix the penalty thereof. (6) Ratify written policies authorized by the Association's management or committees of the board. (7) Regulate the manner in which any increase or decrease of the capital of the Association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the Association in accordance with law. (8) Manage and administer the business and affairs of the Association. (9) Adopt initial by-laws, not inconsistent with law or the Articles of Association, for managing the business and regulating the affairs of the Association. (10) Amend or repeal by-laws, except to the extent that the Articles of Association reserve this power in whole or in part to shareholders. (11) Make contracts. (12) Generally perform all acts that are legal for a board of directors to perform. SEVENTH. The board of directors shall have the power to change the location of the main office to any other location permitted under applicable law, without the approval of the shareholders, and shall have the power to establish or change the location of any branch or branches of the Association to any other location permitted under applicable law, without the approval of the shareholders subject to approval by the Office of the Comptroller of the Currency. EIGHTH. The corporate existence of this Association shall continue until termination according to the laws of the United States. NINTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The Association's board of directors may propose one or more amendments to the Articles of Association for submission to the shareholders. 7 EXHIBIT 3 [CHASE LOGO] CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION BY-LAWS ARTICLE I. MEETINGS OF SHAREHOLDERS SECTION 1.1. ANNUAL MEETING. The regular annual meeting of the shareholders to elect directors and transact whatever other business may properly come before the meeting, shall be held at the main office of the Association, or such other place as the board may designate, and at such time in each year as may be designated by the board of directors. Unless otherwise provided by law, notice of the meeting may be waived by the Association's sole shareholder in accordance with 12 C.F.R. Section 7.2001. If, for any cause, an election of directors is not made on that date, or in the event of a legal holiday, on the next following banking day, an election may be held on any subsequent day within 60 days of the date fixed, to be designated by the board, or, if the directors fail to fix the date, by shareholders representing two thirds of the shares issued and outstanding. SECTION 1.2. SPECIAL MEETINGS. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by a majority of the board of directors or by any one or more shareholders owning, in the aggregate, not less than twenty-five percent of the stock of the Association or by the Chairperson of the board of directors or the President. Unless otherwise provided by law, advance notice of a special meeting may be waived by the Association's Sole Shareholder in accordance with 12 C.F.R. Section 7.2001. SECTION 1.3. NOMINATIONS OF DIRECTORS. Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the Association entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the Association, shall be made in writing and shall be delivered or mailed to the President of the Association and to the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors, provided, however, that if less than 21 days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Association and to the Comptroller of the Currency not later than the close of business on the seventh (7th) day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder. (1) The name and address of each proposed nominee. (2) The principal occupation of each proposed nominee. (3) The total number of shares of capital stock of the Association that will be voted for each proposed nominee. (4) The name and residence address of the notifying shareholder. (5) The number of shares of capital stock of the Association owned by the notifying shareholder. Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the Chairperson of the meeting, and upon his/her instructions, the vote tellers may disregard all votes cast for each such nominee. SECTION 1.4. PROXIES. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this Association shall act as proxy. Proxies shall be valid only for one meeting to be specified therein, and any adjournments of such meeting. Proxies shall be dated and filed with the records of the meeting. Proxies with rubber stamped facsimile signatures may be used and unexecuted proxies may be counted upon receipt of a confirming telegram from the shareholder. Proxies meeting above requirements submitted at any time during a meeting shall be accepted. SECTION 1.5 QUORUM. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law, or by the shareholders or directors pursuant to Section 10.2, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association, or by the shareholders or directors pursuant to Section 10.2. Any action required or permitted to be taken by the shareholders may be taken without a meeting by unanimous written consent of the 8 shareholders to a resolution authorizing the action. The resolution and the written consent shall be filed with the minutes of the proceedings of the shareholders. ARTICLE II. DIRECTORS SECTION 2.1. BOARD OF DIRECTORS. The board of directors ("board") shall have the power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by the board. SECTION 2.2. NUMBER. The board shall consist of not less than five nor more than twenty-five persons, the exact number within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full board or by resolution of a majority of the shareholders at any meeting thereof; provided, however, that a majority of the full board may not increase the number of directors to a number which: (1) exceeds by more than two the number of directors last elected by shareholders where such number was 15 or less; and (2) exceeds by more than four the number of directors last elected by shareholders where such number was 16 or more, but in no event shall the number of directors exceed 25. SECTION 2.3. ORGANIZATION MEETING. The Secretary shall notify the directors-elect of their election and of the time at which they are required to meet at the main office of the Association to organize the new board and elect and appoint officers of the Association for the succeeding year. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within 30 days thereof. If, at the time fixed for such meeting, there shall not be a quorum, the directors present may adjourn the meeting, from time to time, until a quorum is obtained. SECTION 2.4. REGULAR MEETINGS. The time and location of regular meetings of the board shall be set by the board. Such meetings may be held without notice. Any business may be transacted at any regular meeting. The board may adopt any procedures for the notice and conduct of any meetings as are not prohibited by law. SECTION 2.5. SPECIAL MEETINGS. Special meetings of the board may be called at the request of the Chairperson or Co-Chairperson of the board, the President, or three or more directors. Each member of the board shall be given notice stating the time and place, by telegram, telephone, letter or in person, of each such special meeting at least one day prior to such meeting. Any business may be transacted at any special meeting. SECTION 2.6. ACTION BY THE BOARD. Except as otherwise provided by law, corporate action to be taken by the board shall mean such action at a meeting of the board. Any action required or permitted to be taken by the board or any committee of the board may be taken without a meeting if all members of the board or the committee consent in writing to a resolution authorizing the action. The resolution and the written consents thereto shall be filed with the minutes of the proceedings of the board or committee. Any one or more members of the board or any committee may participate in a meeting of the board or committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting. SECTION 2.7. WAIVER OF NOTICE. Notice of a special meeting need not be given to any director who submits a signed waiver of notice, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him or her. SECTION 2.8. QUORUM AND MANNER OF ACTING. Except as otherwise required by law, the Articles of Association or these by-laws, a majority of the directors shall constitute a quorum for the transaction of any business at any meeting of the board and the act of a majority of the directors present and voting at a meeting at which a quorum is present shall be the act of the board. In the absence of a quorum, a majority of the directors present may adjourn any meeting, from time to time, until a quorum is present and no notice of any adjourned meeting need be given. At any such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. SECTION 2.9. VACANCIES. In the event a majority of the full board increases the number of directors to a number which exceeds the number of directors last elected by shareholders, as permitted by Section 2.2, directors may be appointed to fill the resulting vacancies by vote of such majority of the full board. In the event of a vacancy in the board for any other cause, a director may be appointed to fill such vacancy by vote of a majority of the remaining directors then in office. 9 SECTION 2.10. REMOVAL OF DIRECTORS. The vacancy created by the removal of a director pursuant to this Section may be filled by the board in accordance with Section 2.9 of these by-laws or by the shareholders. ARTICLE III. COMMITTEES SECTION 3.1. EXECUTIVE COMMITTEE. There may be an executive committee consisting of the Chairperson or Co-Chairperson of the board and not less than two other directors appointed by the board annually or more often. Subject to the limitations in Section 3.4(g) of these by-laws, the executive committee shall have the maximum authority permitted by law. SECTION 3.2. AUDIT COMMITTEE. There may be an audit committee composed of not less than two directors, exclusive of any active officers, appointed by the board annually or more often, whose duty it shall be to make an examination at least once during each calendar year and within fifteen months of the last examination into the affairs of the Association, or cause continuous suitable examinations to be made, by auditors responsible only to the board, and to report the results of any such examinations in writing to the board from time to time. Such examinations shall include audits of the fiduciary business of the Association as may be required by law or regulation. SECTION 3.3. OTHER COMMITTEES. The board may appoint, from time to time, other committees of one or more persons, for such purposes and with such powers as the board may determine. SECTION 3.4. GENERAL. (a) Each committee shall elect a Chairperson from among the members thereof and shall also designate a Secretary of the committee, who shall keep a record of its proceedings. (b) Vacancies occurring from time to time in the membership of any committee shall be filled by the board for the unexpired term of the member whose departure causes such vacancy. The board may designate one or more alternate members of any committee, who may replace any absent member or members at any meeting of such committee. (c) Each committee shall adopt its own rules of procedure and shall meet at such stated times as it may, by resolution, appoint. It shall also meet whenever called together by its Chairperson or the Chairperson of the board. (d) No notice of regular meetings of any committee need be given. Notice of every special meeting shall be given either by mailing such notice to each member of such committee at his or her address, as the same appears in the records of the Association, at least two days before the day of such meeting, or by notifying each member on or before the day of such meeting by telephone or by personal notice, or by leaving a written notice at his or her residence or place of business on or before the day of such meeting. Waiver of notice in writing of any meeting, whether prior or subsequent to such meeting, or attendance at such meeting, shall be equivalent to notice of such meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at any special meeting. (e) All committees shall, with respect to all matters, be subject to the authority and direction of the board and shall report to it when required. (f) Unless otherwise required by law, the Articles of Association or these by-laws, a quorum at any meeting of any committee shall be one-third of the full membership and present shall be the act of the committee. (g) No committee shall have authority to take any action which is expressly required by law or regulation to be taken at a meeting of the board or by a specified proportion of directors. ARTICLE IV. OFFICERS AND EMPLOYEES SECTION 4.1. CHAIRPERSON OF THE BOARD. The board shall appoint one of its members to be the Chairperson of the board, or two persons to serve as Co-Chairperson of the board to serve at its pleasure. Such person shall preside at all meetings of the board. The Chairperson or Co-Chairpersons of the board shall supervise the carrying out of the policies adopted or approved by the board; shall have general executive powers, as well as the specific powers conferred by these by-laws; and shall also have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned by the board. SECTION 4.2. PRESIDENT. The board may appoint one of its members to be the President of the Association. In the absence of the Chairperson or Co-Chairpersons, the President shall preside at any meeting of the board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice to the office of President, or imposed by these by-laws. The 10 President shall also have and may exercise such further powers and duties as from time to time may be conferred, or assigned by the board. SECTION 4.3. VICE PRESIDENT. The board may appoint one or more Vice Presidents. Each Vice President shall have such powers and duties as may be assigned by the board. SECTION 4.4. SECRETARY. The board shall appoint a Secretary, Cashier, or other designated officer who shall be Secretary of the board and of the Association, and shall keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these by-laws; shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the office of Cashier, or imposed by these by-laws; and shall also perform such other duties as may be assigned from time to time, by the board. SECTION 4.5. OTHER OFFICERS. The board may appoint one or more Assistant Vice Presidents, one or more Trust Officers, one or more Assistant Secretaries, one or more Assistant Cashiers, one or more Managers and Assistant Managers of branches and such other officers and attorneys in fact as from time to time may appear to the board to be required or desirable to transact the business of the Association. Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon, or assigned to, them by the board, the Chairperson or Co-Chairpersons of the board, or the President. The board may authorize an officer to appoint one or more officers or assistant officers. SECTION 4.6. RESIGNATION. An officer may resign at any time by delivering notice to the Association. A resignation is effective when the notice is given unless the notice specifies a later effective date. ARTICLE V. FIDUCIARY ACTIVITIES SECTION 5.1. TRUST COMMITTEE. There shall be a Trust Committee of this Association composed of four or more members, who shall be capable and experienced officers or directors of the Association. The Committee is charged with the responsibility for the investment, retention, or disposition of assets held in accounts with respect to which the Association has investment authority; for the review of the assets of accounts for which the Association has investment authority promptly after the acceptance of such an account and at least once during every calendar year thereafter to determine the advisability of retaining or disposing of such assets; for the determination of the manner in which proxies received for accounts for which the Association has responsibility for the voting of proxies shall be voted; for the determination of all substantial questions involving discretionary authority of the Association of a non-investment nature, including, but not limited to, distribution of principal and/or income in respect of any account; for providing advice as to the investment, retention, or disposition of assets in investment advisory accounts maintained by the Association; for the making of such reports as this board shall require; and for such other responsibilities as may be assigned by this board. The Trust Committee, in discharging its aforementioned responsibilities, may authorize officers of the Association to exercise such powers and under such conditions as the Committee may from time to time prescribe. SECTION 5.2. TRUST INVESTMENTS. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and local law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under applicable law. SECTION 5.3. TRUST AUDIT COMMITTEE. The board shall appoint a committee of at least two directors, exclusive of any active officer of the association, which shall, at least once during each calendar year make suitable audits of the association's fiduciary activities or cause suitable audits to be made by auditors responsible only to the board, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles. SECTION 5.4. FIDUCIARY FILES. There shall be maintained by the association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. ARTICLE VI. STOCK AND STOCK CERTIFICATES 11 SECTION 6.1. TRANSFERS. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to his or her shares, succeed to all rights of the prior holder of such shares. The board may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the Association with respect to stock transfers, voting at shareholder meetings, and related matters and to protect it against fraudulent transfers. SECTION 6.2. STOCK CERTIFICATES. Certificates of stock shall bear the signature of the Chairperson or Co-Chairpersons of the board or President (which may be engraved, printed or impressed), and shall be signed manually or by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant Cashier, or any other officer appointed by the board for that purpose, to be known as an authorized officer, and the seal of the Association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. In case any such officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such before such certificate is issued, it may be issued by the Association with the same effect as if such officer had not ceased to be such at the time of its issue. The corporate seal may be a facsimile, engraved or printed. ARTICLE VII. CORPORATE SEAL SECTION 7.1. CORPORATE SEAL. The Chairperson, the President, the Cashier, the Secretary or any Assistant Cashier or Assistant Secretary, or other officer thereunto designated by the board, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form: A circle, with the words "Chase Manhattan Trust Company, National Association" within such circle. ARTICLE VIII. MISCELLANEOUS PROVISIONS SECTION 8.1. FISCAL YEAR. The fiscal year of the Association shall be the calendar year. SECTION 8.2. EXECUTION OF INSTRUMENTS. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted on behalf of the Association by the Chairperson or Co-Chairpersons of the board, or the President, or any Vice Chairperson, or any Managing Director, or any Vice President, or any Assistant Vice President, or the Chief Financial Officer, or the Controller, or the Secretary, or the Cashier, or, if in connection with exercise of fiduciary powers of the Association, by any of those officers or by any Trust Officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted on behalf of the Association in such other manner and by such other officers as the board may from time to time direct. The provisions of this Section 8.2 are supplementary to any other provision of these by-laws. SECTION 8.3. RECORDS. The Articles of Association, the by-laws and the proceedings of all meetings of the shareholders, the board, and standing committees of the board, shall be recorded in appropriate minute books provided for that purpose. The minutes of each meeting shall be signed by the Secretary, Cashier or other officer appointed to act as Secretary of the meeting. SECTION 8.4. CORPORATE GOVERNANCE PROCEDURES. To the extent not inconsistent with applicable Federal banking law, bank safety and soundness or these by-laws, the corporate governance procedures found in the Delaware General Corporation Law shall be followed by the Association. ARTICLE IX. INDEMNIFICATION SECTION 9.1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or an officer of the Association or is or was serving at the request of the Association as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, 12 officer, employee or agent, shall be indemnified and held harmless by the Association to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Association to provide broader indemnification rights than such law permitted the Association to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 9.3 of these by-laws with respect to proceedings to enforce rights to indemnification, the Association shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board. SECTION 9.2. RIGHT TO ADVANCEMENT OF EXPENSES. The right to indemnification conferred in Section 9.1 of these by-laws shall include the right to be paid by the Association the expenses (including attorney's fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Association of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 9.2 or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections 9.1 and 9.2 of these by-laws shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. SECTION 9.3. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 9.1 or 9.2 of these by-laws is not paid in full by the Association within sixty (60) days after a written claim has been received by the Association except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Association to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (1) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (2) any suit brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the Association shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Association (including the board, the Association's independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Association (including the board, the Association's independent legal counsel, or its shareholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article IX or otherwise shall be on the Association. SECTION 9.4. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Association's Articles of Association, by-laws, agreement, vote of shareholders or disinterested directors or otherwise. SECTION 9.5. INSURANCE. The Association may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Association or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Association would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. SECTION 9.6. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE ASSOCIATION. The Association may, to the extent authorized from time to time by the board, grant rights to indemnification and to the advancement of expenses to 13 any employee or agent of the Association to the fullest extent of the provisions of this Article IX with respect to the indemnification and advancement of expenses of directors and officers of the Association. ARTICLE X. BY-LAWS SECTION 10.1. INSPECTION. A copy of the by-laws, with all amendments, shall at all times be kept in a convenient place at the main office of the Association, and shall be open for inspection to all shareholders during banking hours. SECTION 10.2. AMENDMENTS. The by-laws may be amended, altered or repealed, at any regular meeting of the board by a vote of a majority of the total number of the directors except as provided below. The Association's shareholders may amend or repeal the by-laws even though the by-laws may be amended or repealed by its board. 14 EXHIBIT 4 Consent for Records of Governmental Agencies to be Made Available to the Commission The undersigned, Chase Manhattan Trust Company, National Association, pursuant to Section 321(b) of The Trust Indenture Act of 1939, hereby authorizes the Board of Governors of the Federal Reserve System, the Federal Reserve Banks, the Treasury Department, the Comptroller of the Currency and the Federal Deposit Insurance Corporation, under such conditions as they may prescribe, to make available to the Commission such reports, records or other information as they may have available with respect to the undersigned as a prospective trustee under an indenture to be qualified under the aforesaid Trustee Indenture Act of 1939 and to make through their examiners or other employees for the use of the Commission, examinations of the undersigned prospective Trustee. The undersigned also, pursuant to Section 321(b) of said Trust Indenture Act of 1939, consents that reports of examination by the Federal, State, Territorial or District authorities may be furnished by such authorities to the Commission upon request therefor. Dated this 17th day of April, 2001. Chase Manhattan Trust Company, National Association By: \s\ S. R. Schaaf ---------------- S.R. Schaaf Vice President 15 CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION Statement of Condition DECEMBER 31, 2000
($000) ------ ASSETS Cash and Due From Banks $ 17,999 Securities Available for Sale 4,857 Premises and Equipment 3,035 Accounts Receivable 8,764 Intangible Assets 177,440 -------- Total Assets $212,095 ======== LIABILITIES Sundry Liabilities and Accrued Expenses $ 11,303 -------- STOCKHOLDER'S EQUITY Common Stock $ 5,000 Surplus 179,892 Retained Earnings 15,900 -------- Total Stockholder's Equity $200,792 -------- Total Liabilities and Stockholder's Equity $212,095 ========
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