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-----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, JMCdfKn7zZNmZdjKVtYbSHKyKZXjpyaLrOTw2c/wQ97uKb9X+q4vMsmguwxkxd7t 9TfHthOBWHSvPhCEhD3MZA== 0000921895-02-000228.txt : 20020430 0000921895-02-000228.hdr.sgml : 20020430 ACCESSION NUMBER: 0000921895-02-000228 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020610 FILED AS OF DATE: 20020430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NYFIX INC CENTRAL INDEX KEY: 0000099047 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 061344888 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12292 FILM NUMBER: 02628308 BUSINESS ADDRESS: STREET 1: 333 LUDLOW STREET CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2034258000 FORMER COMPANY: FORMER CONFORMED NAME: TRINITECH SYSTEMS INC DATE OF NAME CHANGE: 19940404 FORMER COMPANY: FORMER CONFORMED NAME: TRANS AIRE ELECTRONICS INC DATE OF NAME CHANGE: 19910916 DEF 14A 1 formdef14a01805_06102002.htm sec document

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant |X| Filed by a party other than the Registrant
|_| Check the appropriate box:
|_| Preliminary proxy statement |_| Confidential, for Use
of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material under Rule 14a-12

NYFIX, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

|X| No fee required.

|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

|_| Fee paid previously with preliminary materials.

|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.

(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

NYFIX, INC.
Stamford Harbor Park
333 Ludlow Street
Stamford, CT 06902

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

June 10, 2002
----------------------

To the Shareholders of NYFIX, INC.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of NYFIX, Inc. (the "Company") will be held on Monday, June 10, 2002
at 10:00 A.M., local time, at Stamford Harbor Park, 333 Ludlow Street, Stamford,
CT 06902 for the following purposes:

1. To elect five (5) directors to the Board of Directors to a one
year term;

2. To approve an amendment to the Company's 2001 Stock Option
Plan (the "2001 Plan") to increase the total number of shares
of the Company's Common Stock available for issuance upon the
exercise of options granted under the 2001 Plan by 1,500,000
shares to an aggregate of 3,500,000;

3. To ratify the appointment of Deloitte & Touche LLP as auditors
of the Company for the year ending December 31, 2002; and

4. To consider and act upon such other business as may properly
come before the Meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on April 22,
2002 as the record date for the Meeting. Only shareholders of record on the
stock transfer books of the Company at the close of business on that date are
entitled to notice of, and to vote at, the Meeting or any adjournments thereof.

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL
IN, DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors,

Richard A. Castillo
Secretary

Stamford, Connecticut
April 30, 2002

2002 PROXY STATEMENT
------------------------

NYFIX, INC.
Stamford Harbor Park
333 Ludlow Street
Stamford, CT 06902
--------------------

ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, JUNE 10, 2002

This Proxy Statement is furnished to shareholders of NYFIX, Inc., a
New York corporation (the "Company"), in connection with the solicitation, by
order of the Board of Directors of the Company, of proxies to be voted at the
Annual Meeting of Shareholders (the "Meeting") to be held on June 10, 2002 at
10:00 A.M., local time, at the principal executive offices of the Company
located at Stamford Harbor Park, 333 Ludlow Street, Stamford, CT 06902, and at
all adjournments thereof. The accompanying proxy is being solicited on behalf of
the Board of Directors of the Company. This Proxy Statement and enclosed proxy
card will be first mailed to the shareholders of the Company on or about April
30, 2002, accompanied by the Company's Annual Report for the year ended December
31, 2001.

As indicated in the Notice of Annual Meeting of the Shareholders,
the Meeting has been called to (1) elect five (5) directors to the Board of
Directors for the ensuing year, (2) increase the number of shares of common
stock, par value $.001 per share (the "Common Stock"), available for issuance
upon exercise of stock options granted under the 2001 Plan by a total of
1,500,000 shares, (3) ratify the appointment of Deloitte & Touche LLP as
auditors of the Company for the year ending December 31, 2002 and (4) consider
and act upon such other business as may properly come before the Meeting or any
adjournment thereof.

PROXIES AND VOTING RIGHTS

Only shareholders of record at the close of business on April 22,
2002 (the "Record Date") are entitled to notice of and to vote at the Meeting.
The voting securities of the Company issued and outstanding on the Record Date
consisted of 30,697,171 shares ("Shares") of Common Stock, entitling the holders
thereof to one vote per Share. There was no other class of voting securities of
the Company outstanding on such date. The presence at the Meeting in person or
by proxy of a majority of the votes of Shares entitled to vote is required for a
quorum.

Approval of the proposal for the election of directors requires the
affirmative vote of a plurality of the votes cast at the Meeting by holders of
shares entitled to vote on such proposal. Approval for the proposal for the
increase in the number of shares of Common Stock available for issuance under
the 2001 Plan requires the affirmative vote of a majority of the votes cast in
favor of or against such proposal at the Meeting by the holders of shares
entitled to vote on such proposals.

Broker "non-votes" and the Shares as to which a shareholder abstains
are included for purposes of determining whether a quorum of Shares is present
at a meeting. A broker "non-vote" occurs when a nominee holding Shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received instructions from the beneficial owner. Neither broker "non-votes" nor
abstentions are included in the tabulation of the voting results on the election
of directors or issues requiring approval of a majority of the votes cast and,
therefore, do not have the effect of votes in opposition in such tabulations.

All proxies delivered pursuant to this solicitation may be revoked
by the person executing the same at any time prior to the time they are voted. A
proxy may be revoked by notice in writing received at the office of the Company,
Attention: Secretary, by execution of a subsequent proxy or by attendance and
voting in person at the Meeting. Attendance at the meeting will not
automatically revoke the proxy. If not revoked, the Shares represented thereby
will be voted at the Meeting or at any adjournment thereof. All proxies will be
voted in accordance with the instructions specified thereon. If no specification
is indicated on the proxy, the Shares represented thereby will be voted (i) FOR
the election of the persons nominated as Directors and (ii) FOR the increase of
the number of shares of Common Stock available for issuance upon the exercise of
stock option granted under the 2001 Plan by a total of 1,500,000 shares and
(iii) FOR the appointment of Deloitte & Touche LLP as auditors of the
Company for the year ended December 31, 2002 and (iv) at the discretion of the
proxy holders on any other matters that may properly come before the Meeting.

All expenses in connection with the solicitation will be borne by
the Company. The Company has retained the services of Mellon Shareholder
Services to assist in the solicitation of proxies, who will receive a fee from
the Company for services rendered of approximately $6,000, plus out-of-pocket
expenses. It is expected that the solicitation will be made primarily by mail,
but regular employees or representatives of the Company may also solicit proxies
by telephone, telegraph or in person, without additional compensation. The
Company will, upon request, reimburse brokerage houses and persons holding
Shares in the names of their nominees for their reasonable expenses in sending
proxy material to their principals.

SECURITY OWNERSHIP

The following table sets forth information concerning ownership of
the Company's Shares, as of the Record Date, by (i) each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
Shares, (ii) each director and nominee for election as a director, (iii) each of
the executive officers named in the Summary Compensation Table below and (iv)
all directors and executive officers of the Company as a group. Unless otherwise
indicated, the Company believes that each shareholder has sole voting power and
sole dispositive power with respect to the Shares beneficially owned by him.

Number of Shares Percentage of Shares
Name and Address of Beneficial Owner Beneficially Owned Beneficially Owned (1)
- ------------------------------------ ------------------ ----------------------

Peter Kilbinger Hansen 2,413,413 (2) 7.58%
333 Ludlow Street
Stamford, CT 06902

Jerome Belson 1,778,500 (3) 5.79%
495 Broadway 6th Floor
New York, NY 10012

George Kledaras 1,198,403 (4) 3.90%

Carl E. Warden 972,440 (5) 3.16%

Lars Kragh 672,213 (6) 2.17%

Richard A. Castillo 108,000 (7) *

William J. Lynch 20,000 (8) *

George O. Deehan 10,000 (9) *

All executive officers, nominees and directors
as a group (10 persons) 6,101,744 18.57%

-2-

- ----------------
* Less than 1%

(1) The applicable percentage of ownership for each beneficial owner is based
on 30,697,171 shares of Common Stock outstanding as of the Record Date.
Shares of Common Stock issuable upon exercise of options, warrants or
other rights beneficially owned that are exercisable within 60 days are
deemed outstanding for the purpose of computing the percentage ownership
of the person holding such securities and rights but are not deemed
outstanding for computing the percentage ownership of any other person.

(2) Includes options to purchase 1,138,125 shares of Common Stock held by Mr.
Hansen, which are currently exercisable. Does not include 212,500 shares
of Common Stock issuable upon exercise of options that are not currently
exercisable.

(3) Includes 330,000 shares of Common Stock held by The Jerome Belson
Foundation, of which Mr. Belson is the trustee. Does not include an
aggregate of 260,500 shares of Common Stock held by certain adult family
members of Mr. Belson.

(4) Includes 11,325 shares of Common Stock held by Mr. Kledaras' wife.

(5) Includes (i) 50,000 shares of Common Stock held by The Carl and Vicki
Warden Family Foundation, of which Mr. Warden is the trustee, and (ii)
45,000 shares of Common Stock issuable upon exercise of currently
exercisable options. Does not include (i) an aggregate of 335,290 shares
of Common Stock held by certain adult family members of Mr. Warden and
(ii) 25,000 shares of Common Stock issuable upon exercise of options that
are not currently exercisable.

(6) Includes 293,750 shares of Common Stock issuable upon exercise of
currently exercisable options. Does not include 12,500 shares of Common
Stock issuable upon exercise of options that are not currently
exercisable.

(7) Includes 51,750 shares of Common Stock issuable upon exercise of currently
exercisable options. Does not include 17,000 shares of Common Stock
issuable upon exercise of options that are not currently exercisable.

(8) Includes 20,000 shares of Common Stock issuable upon exercise of currently
exercisable options. Does not include 35,000 shares of Common Stock
issuable upon exercise of options that are not currently exercisable.

(9) Includes 10,000 shares of Common Stock issuable upon exercise of currently
exercisable options. Does not include 45,000 shares of Common Stock
issuable upon exercise of options that are not currently exercisable.

MANAGEMENT

The directors, nominees and executive officers of the Company are as
follows:

Name Age Position
- ---- --- --------

Peter Kilbinger Hansen 41 President, Chief Executive Officer and Chairman of the Board

Richard A. Castillo 44 Chief Financial Officer and Secretary

Lars Kragh 41 Chief Information Officer

George Kledaras 47 Chief Executive Officer of Javelin Technologies, Inc. and
Director nominee

Robert C. Gasser 37 Chief Executive Officer of NYFIX Millennium, L.L.C.

Jon Steward 42 President of NYFIX Overseas, Inc.

Keith R. Jamaitis 31 Chief Operating Officer of NYFIX USA, LLC

George O. Deehan 59 Director

William J. Lynch 59 Director

Carl E. Warden 63 Director

The principal occupation for the past five years and current public
directorships of each of the directors, nominees and executive officers is as
follows:

Peter Kilbinger Hansen, the founder of the Company, has served as
its President, Chief Executive Officer and Chairman of the Board of Directors
since the commencement of the Company's operations in June 1991. Mr. Hansen also
serves as a member of the Compensation Committee of the Board of Directors.
Prior to founding the Company, Mr. Hansen served for three years as director of
banking systems of Business Line A/S, a Danish company, where he installed more
than 30 online telex-trading systems. Prior thereto, for more than three years
Mr. Hansen was the Sales and Marketing Director for Mark Computer Systems,
responsible for developing the business idea for and launching its network
broker communication system. Mr. Hansen holds a degree in Economics from Neil's
Brock Business School of Copenhagen and an associated degree in economics from
the Copenhagen University of Language and Economics.

Richard A. Castillo, Chief Financial Officer and Secretary, joined
the Company in November 1998. Prior to that, he held positions in long-term
financial management roles involving strategic planning, business analysis and
operations responsibility. Mr. Castillo served a ten year tenure with American
Airlines where, in addition to budgetary responsibilities, he was directly
involved in significant logistical and operational functions. One of Mr.
Castillo's most significant roles at American Airlines was that of Controller
for the Dallas Fort Worth and Chicago Airports, which combined represented a
$500 million operation. Prior to that, Mr. Castillo served in various financial
capacities for six years with Datapoint, a networking technology company. Mr.
Castillo, a Certified Public Accountant, earned a Masters of Business
Administration in Finance and Marketing from the University of Texas and a
Bachelor of Business Administration in Accounting from the University of Texas
at San Antonio.

Lars Kragh, Chief Information Officer, has served in various
technology positions with the Company since its inception in 1991. Mr. Kragh is
currently directly responsible for the management of all network and
infrastructure operations of the Company. Prior to joining the Company, Mr.
Kragh developed network systems for the banking industry involving numerous
system integrations with global market data providers. Mr. Kragh also developed
an accounting and ticketing system for SAS-Airlines and a PC Network
Communication System for the shipping industry. Mr. Kragh has developed

-4-

integration software that is utilized in the daily operations of more than 300
companies in Europe, the Far East and the United States. Mr. Kragh earned a
Masters of Science in Electrical Engineering from the Danish University of
Technology.

George Kledaras, Chief Executive Officer of Javelin Technologies,
Inc., a wholly-owned subsidiary of the Company, joined the Company as of April
1, 2002 upon the closing of the acquisition of Javelin. He is currently a
nominee for director. In 1996, Mr. Kledaras founded Kledaras Communication and
Design, the predecessor to Javelin. Javelin is a leading supplier of electronic
trade communication technology and a leading provider of Financial Information
Exchange (FIX) technology. Prior to founding Javelin, Mr. Kledaras worked for
Blackrock Financial Management and Merrin Financial, where he helped to build
the Intermarket Trading Network, an electronic equity order routing network
directly linking buy-side institutional investors with their brokers. Before
Merrin Financial, he developed electronic trading platforms for Market Data
Corporation and Telerate Systems, Inc. Mr. Kledaras has a BS in Electrical
Engineering from Lehigh University and a MS in Mathematics from the Courant
Institute at New York University.

Robert C. Gasser, Chief Executive Officer of NYFIX Millennium,
L.L.C., a broker-dealer subsidiary of the Company, joined the Company in October
2001. NYFIX Millennium is an alternative trading system (ATS) which provides a
real-time, anonymous automated matching system for equity trading. Prior to
joining NYFIX Millennium, Mr. Gasser was formerly Head of US Equity Trading for
JP Morgan for 14 years. In that role, he was responsible for NASDAQ and Listed
Trading, Program Sales and Trading, Convertible Sales and Trading as well as the
firm's global equity e-commerce strategy. During his tenure at JP Morgan, Mr.
Gasser served on various industry committees, including the Nasdaq Quality of
Markets Committee and the NYSE Upstairs Traders Advisory Committee. In addition,
he directed the firm's investment in NYFIX Millennium and Archipelago, where he
actively served on the Board of Managers. Mr. Gasser holds a bachelor's degree
of Science in Foreign Service from Georgetown University, School of Foreign
Service.

Jon Steward, President of NYFIX Overseas, Inc., a wholly-owned
subsidiary of the Company, joined the Company in June 1993. Mr. Steward has
managed the business development of the Overseas operation, where the roll out
of their core "Order Book Management System" for the derivatives market now
operates in over eight countries covering Europe, North America and Asia
Pacific. Prior to that, he had a successful career within sales and consistently
won top sales awards with several major firms during an eight year period
including; Cable & Wireless, Telerate and ADP. He then became Sales Director
of a London based financial software company and enjoyed further success over a
four-year period before joining the Company. Mr. Steward was educated in London
and went to Middlesex University where he studied business management.

Keith R. Jamaitis, Chief Operating Officer of NYFIX USA, LLC. Mr.
Jamaitis is responsible for overall core operations involving the NYFIX
infrastructure and technology, and the service and support of customer systems.
Mr. Jamaitis has been with NYFIX since 1997, and has previously lead the project
management, account management, and product support teams. Additionally, Mr.
Jamaitis is directly involved in the design and deployment of NYFIX trading
system technologies and data center services. Prior to joining NYFIX, Mr.
Jamaitis had been a product line manager with Executone Information Systems,
where he lead the product development efforts for several of the companies
integrated computer telephony products and healthcare communications systems.
Mr. Jamaitis had previously worked in the telecommunications industry for more
than five years holding positions in hardware and software systems development
and technical management. Mr. Jamaitis holds a Bachelors of Science degree in
Electrical Engineering from the University of Connecticut.

George O. Deehan has served as a Director of the Company since
August 2000. Mr. Deehan serves as a member of the Audit Committee and as a
member of the Compensation Committee of the Board of Directors. Mr. Deehan
serves as a consultant and an investor of eOriginal, Inc., a software
development company, since March 2002. Mr. Deehan was president of eOriginal,
Inc. from August 2000 until March 2002. Mr. Deehan was president and chief
executive officer of Advanta Leasing Services, the business equipment leasing
unit of Advanta Business Services from August 1998 until August 2000. In that
position, Mr. Deehan was responsible for overseeing strategic planning, systems
integration and national marketing and sales initiatives for the leasing
products. Prior to joining Advanta, Mr. Deehan served as president and chief
operating officer of Information Technology Services for AT&T Capital. As chief
operating officer, he helped ATT&T to launch a worldwide outsourcing business
which managed customers' computer network systems. Mr. Deehan earned a
bachelor's degree from Lenoir-Rhyne College.

-5-

William J. Lynch has served as a Director of the Company since June
2000. Mr. Lynch serves as Chairman of the Audit Committee and is a member of the
Compensation Committee of the Board of Directors. Since January 2001, Mr. Lynch
has been a venture partner of Catterton Partners, a private equity fund. From
1996 through December 2000, Mr. Lynch served as Managing Director of Capstone
Partners, LLC, a venture capital firm. Mr. Lynch also serves as a director of
Edgewater Technologies, a publicly traded company.

Carl E. Warden has served as a Director of the Company since August
1993. Mr. Warden also serves as Chairman of the Compensation Committee and a
member of the Audit Committee of the Board of Directors. Mr. Warden has been a
self-employed private investor for more than five years. Mr. Warden received his
BBA from the Freeman School of Business at Tulane University.

None of the directors, nominees or executive officers has been
involved in material legal proceedings during the last five years in which he
has been a party adverse to or has had a material interest adverse to the
Company.

-6-

PROPOSAL NO. 1 - ELECTION OF DIRECTORS

The By-Laws of the Company (the "By-Laws") provide that the Company
shall have not less than two nor more than seven directors, with the exact
number to be fixed by the Board of Directors of the Company from time to time.
The Board of Directors of the Company presently consists of four members and is
being increased to five members. Four of the five nominees for election at the
Meeting are currently directors of the Company, and will serve, subject to the
provisions of the By-Laws of the Company, until the next annual meeting of the
shareholders and until the election and qualification of their successors or
until their prior death, resignation or removal. Management has no reason to
believe that any of the nominees will be unable or unwilling to serve as a
director, if elected. Should any nominee not be a candidate at the time of the
Meeting (a situation which is not now anticipated), proxies may be voted in
favor of the remaining nominees and may also be voted for a substitute nominee
selected by the Board of Directors.

The names of the nominees for director are Peter Kilbinger Hansen,
George O. Deehan, William J. Lynch, Carl E. Warden and George Kledaras.

See "Management" for information regarding each of the nominees for
director.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
ABOVE-NAMED NOMINEE DIRECTORS OF THE COMPANY. The proxy enclosed herewith will
be voted FOR the above-named nominee directors of the Company unless the
shareholder specifically votes against any or all of the nominee directors, or
abstains from voting on this matter.

Directors' Meetings and Compensation

The Board of Directors meets on a regularly scheduled basis and met
eight times during 2001. The Board of Directors has assigned certain
responsibilities to committees. The Audit Committee, which met four times during
2001, acts on and reports to the Board of Directors with respect to various
auditing and accounting matters, including the recommendation of auditors, the
scope of the annual audits, fees to be paid to the auditors, the performance of
the auditors and the Company's accounting practices. The members of the Audit
Committee, all of whom are independent as independence is defined in Rule
4200(a)(15) of the NASD listing standards, currently are William J. Lynch
(Chairman), George O. Deehan and Carl E. Warden. The Audit Committee has adopted
a written Audit Committee Charter. The Compensation Committee, which met twice
during 2001, recommends, reviews and oversees the salaries, benefits and stock
option plans of the Company's employees, consultants, directors and other
individuals compensated by the Company. The members of the Compensation
Committee are Carl E. Warden (Chairman), William J. Lynch and George O. Deehan.
From time to time, the members of the Board of Directors act by unanimous
written consent pursuant to the laws of the State of New York. No incumbent
director failed to participate in at least 75% of all meetings of the Board of
Directors and the committees on which he served during the past fiscal year.

As compensation for their services as members of the Board of
Directors for 2001, and pursuant to a formula plan, certain Board members
received options to purchase shares of Common Stock at an exercise price equal
to the closing price of the Common Stock on the date of grant. Options granted
to non-employee Board members on October 23, 2001 (exercisable into an aggregate
of 75,000 shares of Common Stock) vest in two equal installments on the first
and second anniversaries of the date of grant, so long as the director completes
service for such respective years. Non-employee directors are reimbursed for
reasonable expenses in connection with serving as a director and member of a
committee.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are Carl E. Warden
(Chairman), William J. Lynch and George O. Deehan. None of our executive
officers, nominees or directors serve as a member of the board of directors or

-7-

compensation committee of any other company that has one or more executive
officers or directors serving as a member of our Board of Directors or
Compensation Committee.

Report of the Audit Committee of the Board of Directors

In accordance with its written charter adopted by the Company's
Board of Directors, the Audit Committee of the Board of Directors (the "Audit
Committee") assists the Board in fulfilling its responsibility for oversight of
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company.

In discharging its oversight responsibility as to the audit process,
the Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), discussed
with the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The Audit
Committee also discussed with management and the independent auditors the
quality and adequacy of the Company's internal controls. The Audit Committee
reviewed with the independent auditors their audit plan and audit scope.

The Audit Committee discussed and reviewed with the independent
auditors all communications required by auditing standards generally accepted in
the United States of America, including those described in Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees), and, with
and without management present, discussed and reviewed the independent auditors'
examination of the financial statements.

The Audit Committee reviewed the audited financial statements of the
Company as of and for the year ended December 31, 2001, with management and the
independent auditors. Management is responsible for the Company's financial
reporting process, including its system of internal control, and for the
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The Company's
independent accountants are responsible for auditing those financial statements.
The Audit Committee's responsibility is to monitor and review these processes.
It is not the Audit Committee's duty or its responsibility to conduct auditing
or accounting reviews or procedures. The members of the Audit Committee are not
employees of the Company and may not be, and may not represent themselves to be
or to serve as, accountants or auditors by profession or experts in the fields
of accounting or auditing. Therefore, the Audit Committee has relied, without
independent verification, on management's representation that the financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America,
and on the representations of the independent accountants included in their
report on the Company's financial statements. The Audit Committee's oversight
does not provide it with an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles or
policies, or appropriate internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions with
management and the independent accountants do not assure that the Company's
financial statements are presented in accordance with accounting principles
generally accepted in the United States of America, that the audit of the
Company's financial statements has been carried out in accordance with auditing
standards generally accepted in the United States of America or that the
Company's independent accountants are in fact "independent."

Based on the above-mentioned review and discussions with the
independent auditors, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the year ended December 31, 2001, for filing with the Securities and
Exchange Commission. The Audit Committee also recommended the reappointment,
subject to shareholder approval, of the independent auditors and the Board
concurred with such recommendation.

William J. Lynch George O. Deehan Carl E. Warden

-8-

EXECUTIVE COMPENSATION

The following table provides certain information, for the years
ended December 31, 2001, 2000 and 1999, respectively, concerning compensation
awarded to, earned by or paid to the chief executive officer of the Company
("CEO") and (ii) the two most highly compensated executive officers of the
Company other than the CEO whose salary and bonus exceeded $100,000 with respect
to the fiscal year ended December 31, 2001 and who were employed by the Company
on December 31, 2001 (the "Named Executive Officers"). Other than the Named
Executive Officers, no other executive officer received compensation in excess
of $100,000 for the year ended December 31, 2001.

Summary Compensation Table

Long-Term
Annual Compensation Compensation
------------------- ------------

Other Annual Securities
Name and Salary Bonus Compensation Underlying Options
Principal Position Year ($) ($) ($)(1) (Shares)
------------------ ---- --- --- ------ --------

Peter K. Hansen, 2001 $208,564 $250,000 - 125,000
President and Chief 2000 $150,000 - - 545,000
Executive Officer 1999 $134,519 - - 67,500

Richard A. Castillo, 2001 $148,615 $100,000 - 25,000
Chief Financial Officer 2000 $129,712 - - 15,000
1999 $115,000 - - 11,250

Lars Kragh, 2001 $174,340 - - 25,000
Chief Information Officer 2000 $139,654 - - -
1999 $121,815 $1,000 - 56,250
- ---------------

(1) The aggregate amount of perquisites and other personal benefits paid to
each of the individuals listed on this table did not exceed the lesser of
ten percent (10%) of such officer's annual salary and bonus for each
fiscal year indicated or $50,000.

-9-

Option Grants in Fiscal Year 2001

The following table sets forth information regarding stock options
granted to the Named Executive Officers during the year ended December 31, 2001.
These grants are also reflected on the Summary Compensation Table above.

Number of Percentage of
Securities Total Options Exercise Potential Realizable Value at
Underlying Granted to Price Per Assumed Annual Rates of
Stock Options Employees in Share Expiration Stock Price Appreciation
Name Granted (#) 2001 ($)(1) Date for Stock Options(2)
---- -------- ---- ------ ---- -----------------
5% ($) 10% ($)
-- ---
Peter K. Hansen 125,000 (3) 6.2% $12.02 10/23/11 $828,371 $2,040,316
Richard A. Castillo 25,000 (4) 1.2% $12.02 10/23/11 $165,674 $408,063
Lars Kragh 25,000 (4) 1.2% $12.02 10/23/11 $165,674 $408,063
- -------------

(1) The exercise price of the options granted was equal to the fair market
value of the underlying common stock on the date of grant.

(2) The potential realizable value portion of the foregoing table illustrates
values that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
annual rates of appreciation on our common stock over the term of the
options. These numbers do not take into account provisions of certain
options providing for termination of the option following termination of
employment, non-transferability or differences in vesting periods.
Regardless of the theoretical value of an option, its ultimate value will
depend upon the market value of our common stock at a future date, and
that value will depend on a variety of factors, including the overall
condition of the stock market and our results of operations and financial
condition. There can be no assurance that the values reflected in this
table will be achieved.

(3) Represents options to purchase shares of Common Stock granted on October
23, 2001. The options granted vest 112,500 on October 23, 2001 and 12,500
on October 23, 2003.

(4) Represents options to purchase shares of Common Stock granted on October
23, 2001. The options granted vest 12,500 on October 23, 2001 and 12,500
on October 23, 2003.

-10-

Aggregated Option Exercises in Last Fiscal Period and Fiscal Year-End Option
Values

Number of
Shares Securities Underlying Value of Unexercised
Acquired Unexercised Options at In-the-Money Options at
on Value Fiscal Year-End Fiscal Year-End (1)
Name Exercise Realized (E) (U) (E) (U)
---- -------- -------- --- --- --- ---
Peter K. Hansen - - 875,625 475,000 $12,007,200 $299,250
Richard A. Castillo 11,250 69,250 41,000 27,750 $512,070 $136,618
Lars Kragh - - 230,750 75,500 $3,866,655 $1,153,260

(E) - Exercisable
(U) - Unexercisable

(1) Options are "in-the-money" if the market price of a share of Common Stock on
December 31, 2001 exceeded the exercise price of such options. The value of such
options is calculated by determining the difference between the aggregate market
price of the Common Stock underlying the options on December 31, 2001 and the
aggregate exercise price of such options. The closing price of a share of Common
Stock on December 31, 2001 as reported on the Nasdaq Stock Market's National
Market ("Nasdaq") was $20.02.

Employment Agreements

Mr. Hansen serves as the Company's President and Chief Executive
Officer pursuant to the terms of an employment agreement, dated January 1, 1991.
This agreement was for a term of five years and renews automatically on January
1 of each year thereafter as mutually agreed upon. Pursuant to the terms of the
agreement, Mr. Hansen is paid a base salary plus such bonus or additional
compensation as the Board of Directors or Compensation Committee deems
appropriate. Effective October 1, 2001, the Board of Directors set Mr. Hansen's
base salary at $400,000. In addition, Mr. Hansen is entitled to receive a sales
commission of 7.5% of the gross sales of any products of the Company which are
sold through his direct sales efforts. In the event Mr. Hansen is terminated by
the Company for any reason other than a material breach by him of the agreement,
he is entitled to receive an amount equal to four times his then current base
salary and prorated payment of any bonus, cash or stock earned.

Mr. Castillo serves as the Company's Chief Financial Officer
pursuant to the terms of an employment agreement, dated November 4, 1998. This
agreement is for a term of one year and renews automatically on November 23 of
each year thereafter as mutually agreed upon. Pursuant to the terms of the
agreement, Mr. Castillo is paid a base salary plus such bonus or additional
compensation as the Board of Directors or Compensation Committee deems
appropriate. Effective January 1, 2002, the Board of Directors set Mr.
Castillo's base salary at $200,000.

Mr. Kragh serves as the Company's Chief Information Officer pursuant
to the terms of an employment agreement, dated January 1, 1991. This agreement
was for a term of five years and renews automatically on January 1 of each year
thereafter as mutually agreed upon. Pursuant to the terms of the agreement, Mr.
Kragh is paid a base salary plus such bonus or additional compensation as the
Board of Directors or Compensation Committee deems appropriate. Effective
January 1, 2002, the Board of Directors set Mr. Kragh's base salary at $225,000.

-11-

2001 Compensation Committee Report on Executive Compensation:

General

The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. Messrs. Warden, Lynch and Deehan serve as members of the Compensation
Committee. The Compensation Committee is responsible for the administration and
award of stock options under the Company's 2001 Plan. Messrs. Warden, Lynch and
Deehan are non-employee directors of the Company, as defined under Rule 16b-3 of
the Securities Exchange Act of 1934, as amended. Mr. Warden serves as Chairman
of the Compensation Committee. The Compensation Committee met twice during the
fiscal year ended December 31, 2001.

Compensation Philosophy

The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on achievement of the Company's annual and
long-term performance goals, to provide competitive levels of compensation, to
recognize individual initiative, achievement and length of service to the
Company, and to assist the Company in attracting and retaining qualified
management. The Compensation Committee also believes that the potential for
equity ownership by management is beneficial in aligning management and
shareholders' interests in the enhancement of shareholder value. The Company has
not established a policy with regard to Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code").

Salaries

Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at other comparable companies. Base salary compensation of executive
officers is reviewed annually by the Compensation Committee, and recommendations
of the Compensation Committee in that regard are acted upon by the Board of
Directors. Annual salary adjustments are determined by evaluating the
competitive marketplace; the performance of the Company; the performance of the
executive; the length of the executive's service to the Company and any
increased responsibilities assumed by the executive. The Company places itself
between the low and medium levels in determining salaries compared to the other
comparable businesses.

Stock Option and Other Plans

The Company awarded Messrs. Hansen, Castillo and Kragh options to
purchase 125,000, 25,000 and 25,000 shares of common stock, respectively, in
2001. The exercise price for the options is $12.02 per share. It is the
philosophy of the Compensation Committee that stock options should be awarded to
employees of the Company to promote long-term interests between such employees
and the Company's shareholders through an equity interest in the Company and
assist in the retention of such employees. The Compensation Committee also
considered the amount and terms of options previously granted to executive
officers. The Compensation Committee believes the potential for equity ownership
by management is beneficial in aligning management and shareholders' interest in
the enhancement of shareholder value. Participation in incentive plans is
offered, pursuant to their terms, to provide incentive to executive officers to
contribute to corporate growth and profitability.

Mr. Hansen was the Company's President and Chief Executive Officer
in 2001, with an annual salary of $150,000 from January 1, 2001 through
September 30, 2001 and $400,000 from October 1, 2001 through December 31, 2001.
Mr. Castillo was Chief Financial Officer of the Company with an annual base
salary of $150,000. Mr. Kragh was Executive Vice President - Research &
Development of the Company with an annual base salary of $175,000. As described
in the Employment Agreements section above, all of the named executives' annual
base salaries are determined by contract. In determining such amount for Mr.
Hansen, the Board of Directors considered the responsibilities performed by him
as President and Chief Executive Officer of the Company, his performance in
managing and directing the Company's operations, his efforts in assisting the
Company to improve its capital base and financial condition, a competitive
assessment of survey data of other comparable companies as it relates to the
Company's performance versus other comparable companies, and the evaluation of

-12-

the other factors described in "Salaries" above. In determining such amount for
the other named executives, the Board of Directors considered the
responsibilities performed by them in their capacities with the Company, their
performance in carrying out those responsibilities, a competitive assessment of
survey data of comparable positions in other comparable companies, and the
evaluation of the other factors described in "Salaries" above.

Carl E. Warden William J. Lynch George O. Deehan

Common Stock Performance: The following graph compares, for each of the fiscal
years indicated, the yearly percentage change in the Company's cumulative total
shareholder return on the Company's Common Stock with the cumulative total
return of (a) the Standard and Poor's 500 Index, a broad equity market index,
and (b) the Nasdaq Computer Index.

[PERFORMANCE GRAPH - OMITTED]

1996 1997 1998 1999 2000 2001
------ ---- ---- ---- ---- ----

S&P 500 Index 100.00 133.36 171.47 207.56 188.66 166.24
NYFIX, Inc. 100.00 172.22 200.00 945.36 1208.19 1000.00
Nasdaq Computer Index 100.00 129.18 246.57 525.00 269.52 210.78

There can be no assurance that the Common Stock's performance will
continue with the same or similar trends depicted in the graph above.

-13-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 12, 2002, the Company entered into an Agreement and Plan of
Merger with NYOlympus, Inc., a wholly owned subsidiary of the Company ("Merger
Sub"), and Javelin Technologies, Inc. ("Javelin"), whereby Merger Sub merged
with and into Javelin (the "Merger"), thus enabling the Company to acquire all
of the capital stock of Javelin from the shareholders of Javelin at the time of
the consummation of the transaction in exchange for a combination of cash and
Common Stock from the Company. The Merger was consummated as of March 31, 2002.
The Company financed the Merger with a combination of (i) approximately
$11,000,000 of cash and (ii) shares of Common Stock having a market value of
approximately $44,000,000. In addition, the Company agreed to potentially pay
additional consideration to the Javelin Shareholders based on Javelin's revenues
for the year ending December 31, 2002. As a shareholder of Javelin, George
Kledaras, a nominee for director, received $1,980,012 and 1,187,078 shares of
Common Stock in the Merger and has remained as the Chief Executive Officer of
Javelin pursuant to an employment agreement with the Company. Mr. Kledaras' wife
received $200,257 and 11,325 shares of Common Stock in the Merger.

On October 1, 2001, Richard Castillo, the Company's Chief Financial
Officer, issued a promissory note to the Company in the principal amount of
$78,125 as payment for the purchase price of an option he exercised for 11,250
shares of Common Stock (at an exercise price of $6.94 per share). Such note
bears interest at 5.5% per annum and is secured by the 11,250 shares. The
outstanding balance of principal plus interest of the note as of December 31,
2001 was $79,208.

On December 1, 2000, Mr. Castillo issued a promissory note to the
Company in the principal amount of $70,000 as payment for the purchase price of
an option he exercised for 22,500 shares of Common Stock (at an exercise price
of $3.11 per share). Such note originally bore interest at 7.5% per annum and is
secured by the 22,500 shares. This note was revised on December 1, 2001, to
reflect an interest rate of 5.5% per annum. The outstanding balance of principal
plus interest of the note as of December 31, 2001 was $75,696.

On December 13, 1999, Mr. Castillo issued a promissory note to the
Company in the principal amount of $70,000 as payment for the purchase price of
an option he exercised for 22,500 shares of Common Stock (at an exercise price
of $3.11 per share). Such note bears interest at 6% per annum and is secured by
the 22,500 shares. The outstanding balance of principal plus interest of the
note to Mr. Castillo as of December 31, 2001 was $78,630.

On June 30, 1999, Peter K. Hansen, the Company's President and Chief
Executive Officer, issued a promissory note to the Company in the principal
amount of $16,875 as payment for the purchase price of an option he exercised
for 16,875 shares of Common Stock (at an exercise price of $1.00 per share).
Such note bears interest at 6% per annum and is secured by the 16,875 shares.
The outstanding balance of principal plus interest of the note as of December
31, 2001 was $19,416.

On December 30, 1997, Mr. Hansen issued a promissory note to the
Company in the principal amount of $230,000 as payment for the purchase price of
an option he exercised for 258,750 shares of Common Stock (at an exercise price
of $0.89 per share). Such note originally bore interest at 6% per annum and is
secured by the 258,750 shares. This note was revised on December 30, 2000, to
reflect an interest rate of 7.5% per annum. The outstanding balance of principal
plus interest of the note as of December 31, 2001 was $288,782.

On December 31, 1996, Mr. Hansen issued a promissory note to the
Company in the principal amount of $50,000 as payment for the purchase price of
an option he exercised for 112,500 shares of Common Stock (at an exercise price
of $0.44 per share). Such note originally bore no interest and is secured by the
112,500 shares. This note was revised on December 31, 2001, to reflect an
interest rate of 5.5% per annum. The outstanding balance of principal plus
interest of the note as of December 31, 2001 was $50,000. Mr. Hansen had an
aggregate of $198,400 in travel and salary advances at December 31, 2001.

On December 30, 1997, Lars Kragh, the Company's Chief Information
Officer, issued a promissory note to the Company in the principal amount of
$150,000 as payment for the purchase price of an option he exercised for 168,750
shares of Common Stock (at an exercise price of $0.89 per share). Such note
originally bore interest at 6% per annum and is secured by the 168,750 shares.

-14-

This note was revised on December 30, 2000, to reflect an interest rate of 7.5%
per annum. This note was paid in full on October 16, 2001. Total principal plus
interest paid on the note on October 16, 2001 was $185,994.

In connection with each of the promissory notes described above, no
funds were transferred from the Company to any of the noteholders. In addition,
none of the shares received by the noteholders upon exercise of their respective
options have been sold, and no noteholder may sell any of such shares until the
applicable promissory notes have been paid.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers, directors, and persons who own more
than 10% of the Company's outstanding Common Stock to file initial reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than 10% shareholders are required by Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
file. The Company believes that its executive officers, directors, and greater
than 10% shareholders complied during the year ended December 31, 2001 with the
reporting requirements of Section 16(a).

PROPOSAL NO. 2 - APPROVAL OF
AMENDMENT TO THE 2001 STOCK OPTION PLAN

The Board of Directors proposes that the Company's shareholders
approve the amendment to the 2001 Stock Option Plan (the "Plan Amendment"),
whereby the number of shares of Common Stock reserved for issuance pursuant to
the exercise of options granted under the 2001 Plan will be increased from
2,000,000 shares of Common Stock to 3,500,000 shares of Common Stock.

The Board of Directors believes that in order to enable the Company
to continue to attract and retain personnel of the highest caliber, provide
incentive for officers, directors, consultants, key employees and advisors and
continue to promote the well-being of the Company, it is in the best interest of
the Company and its shareholders to provide to such persons and the other
independent contractors who perform services for the Company, through the
granting of stock options, the opportunity to participate in the value and/or
appreciation in value of the shares of Common Stock. The Board of Directors has
found that the grant of options under the 2001 Plan has proven to be a valuable
tool in attracting and retaining key employees. On April 16, 2002, the Board of
Directors unanimously voted to increase the authorized number of shares of
Common Stock available for issuance under the Stock Option Plan from 2,000,000
shares to 3,500,000.

Summary of the 2001 Plan

On June 4, 2001, the 2001 Stock Option Plan (the "Plan") was
approved by the shareholders of the Company at the 2001 Annual Meeting of
Shareholders. The Plan is intended to assist the Company in securing and
retaining key employees, directors, officers, consultants and advisors by
allowing them to participate in the ownership and growth of the Company through
the grant of incentive stock options, as defined in Section 422 of the Internal
Revenue Code (the "Code"), and nonqualified stock options. The granting of such
options serves as partial consideration for and gives employees, directors,
officers, consultants and advisors an additional inducement to remain in the
service of the Company and its subsidiaries and provides them with an increased
incentive to work towards the Company's success.

The 2001 Plan is administered by the Compensation Committee (the
"Committee") comprised of two or more directors that are "Non-Employee
Directors" (as such term is defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended) and "Outside Directors" (as such
term is defined in Section 162(m) of the Code). The Committee has full authority
to select optionees, determine the terms and conditions of their respective
Option Agreements, and to interpret the provisions and supervise the
administration of the 2001 Plan. The Committee also makes any other
determination necessary or advisable for administration of the 2001 Plan. The
determinations by the Committee are final and conclusive. In the event that the
Committee is unable to act or if the Committee, at the time of any grant, award
or other acquisition under the 2001 Plan, does not consist of two or more

-15-

Non-Employee Directors, or if there is no such committee, then the 2001 Plan is
administered by the Board of Directors; provided that options granted to the
Company's Chief Executive Officer, or to any of the Company's other four most
highly compensated officers that are intended to qualify as performance based
compensation under Section 162(m) of the Code, may only be granted by the
Committee. The 2001 Plan will terminate on the tenth anniversary of its
effective date, but may be terminated by the Board of Directors at any time
before that date.

Upon the grant of an option to purchase shares of Common Stock to an
optionee, the Committee shall fix the number of shares of Common Stock that the
optionee may purchase upon exercise of such option and the price at which the
shares may be purchased. The option price for all such options shall not be less
than 100% of the Fair Market Value (as defined below) of the shares of Common
Stock at the time such options are granted; provided, however, that with respect
to an incentive stock option in the case of an optionee, who, at the time such
option is granted, owns more than 10% of the voting stock of the Company or its
subsidiaries, then the purchase price per share shall be at least 110% of the
Fair Market Value. "Fair Market Value" is deemed to be the closing price of a
share of Common Stock on such date, on Nasdaq, or if the shares of Common Stock
are not listed on Nasdaq, the mean between the closing bid and asked prices of
publicly traded shares of the Common Stock in the over-the-counter market, or,
if such bid and asked prices are not available, as reported by any nationally
recognized quotation service selected by the Company, or as determined by the
Committee in a manner consistent with the provisions of the Code. The aggregate
Fair Market Value of shares of Common Stock (determined at the time the
incentive stock option is granted) subject to incentive stock options granted to
an optionee under all stock option plans of the Company, and of the Company's
subsidiaries (if any), that become exercisable for the first time by such
optionee during any calendar year may not exceed $100,000. The maximum number of
shares of Common Stock that may be subject to options granted under the 2001
Plan to any individual in any calendar year shall not exceed 1,000,000. Payment
of the exercise price for shares of Common Stock subject to options may be made
with cash, check or such other instrument as may be acceptable to the Company.
Full payment for shares of Common Stock exercised must be made at the time of
exercise.

The shares of Common Stock to be issued under the 2001 Plan will be
either currently authorized but unissued shares of Common Stock, treasury stock
or previously issued shares held by any subsidiary of the Company. The number of
shares of Common Stock available under the 2001 Plan will be subject to
adjustment to prevent dilution in the event of a stock split, combination of
shares, stock dividend or certain other events. Shares of Common Stock subject
to unexercised options that expire, or are terminated prior to the end of the
period during which options may be granted, may be subject to future option
grants under the 2001 Plan.

Federal Income Tax Consequences

Incentive Stock Options. Incentive stock options granted under the
Plan are intended to be "incentive stock options" as defined by Section 422 of
the Code. Under present law, the grantee of an incentive stock option will not
realize taxable income upon the grant or the exercise of the incentive stock
option and the Company will not receive an income tax deduction at either such
time. If the grantee does not sell the shares acquired upon exercise of an
incentive stock option within either (i) two years after the grant of the
incentive stock option or (ii) one year after the date of exercise of the
incentive stock option, the gain upon a subsequent sale of the shares will be
taxed as long-term capital gain. If the grantee, within either of the above
periods, disposes of the shares acquired upon exercise of the incentive stock
option, the grantee will recognize as ordinary income an amount equal to the
lesser of (i) the gain realized by the grantee upon such disposition or (ii) the
difference between the exercise price and the fair market value of the shares on
the date of exercise. In such event, the Company would be entitled to a
corresponding income tax deduction equal to the amount recognized as ordinary
income by the grantee. The gain in excess of such amount recognized by the
grantee as ordinary income would be taxed as a long-term capital gain or
short-term capital gain (subject to the holding period requirements for
long-term or short-term capital gain treatment).

Unless the shares subject to an incentive stock option are subject
to a risk of forfeiture at the time the option is exercised, the exercise of the
incentive stock option will result in the excess of the stock's Fair Market
Value on the date of exercise over the exercise price being included in the
optionee's alternative minimum taxable income (AMTI). If the shares are subject
to a risk of forfeiture and are nontransferable, the excess described above will
be included in AMTI when the risk of forfeiture lapses or the shares become
transferable, whichever occurs sooner. Liability for the alternative minimum tax
is complex and depends upon an individual's overall tax situation. Before

-16-

exercising an incentive stock option, a grantee should discuss the possible
application of the alternative minimum tax with his tax advisor in order to
determine the tax's impact.

Non-Qualified Stock Options. Upon exercise of a non-qualified stock
option granted under the Plan, the grantee will recognize ordinary income in an
amount equal to the excess of the Fair Market Value of the shares received over
the exercise price of such shares. That amount increases the grantee's basis in
the stock acquired pursuant to the exercise of the non-qualified option. Upon a
subsequent sale of the stock, the grantee will incur short-term or long-term
gain or loss depending upon his holding period for the shares and upon the
shares' subsequent appreciation or depreciation in the value. The Company will
be allowed a federal income tax deduction for the amount recognized as ordinary
income by the grantee upon the grantee's exercise of the option.

Summary of Tax Consequences. The foregoing outline is no more than a
summary of the federal income tax provisions relating to the grant and exercise
of options under the Plan and the sale of shares acquired under the Plan.
Individual circumstances may vary these results. The federal income tax laws and
regulations are constantly being amended, and each participant should rely upon
his own tax counsel for advice concerning the federal income tax provisions
applicable to the Plan.

Outstanding Options

The Plan currently authorizes the issuance of a maximum of 2,000,000
shares of Common Stock, pursuant to the exercise of options granted thereunder.
As of the Record Date, stock options to purchase 1,690,000 shares of Common
Stock have been granted under the 2001 Plan, of which none have been exercised.
No options have been heretofore granted subject to shareholder approval of the
Plan Amendment.

During the fiscal year ended December 31, 2001 and through the
Record Date, options to purchase shares of Common Stock have been granted
pursuant to the 2001 Plan to (i) the Named Executive Officers, (ii) all current
executive officers as a group, (iii) all non-executive employees, including all
current officers who are not executive officers, as a group, and (iv)
non-employee directors as follows:

Group Number of Options (1) (2)
----- -------------------------
Named Executive Officers 175,000
Executive Officers 630,000
Non-Executive Officer Employees 985,000
Non-Employee Directors 75,000
- ---------------

(1) On the Record Date, the last reported sales price of the Common Stock as
reported on Nasdaq was $10.55 per share.

(2) Information contained in this table is duplicative information contained
in "Executive Compensation" and does not signify additional grants of
options to purchase shares of Common Stock.

Registration of Shares

The Company filed a registration statement on Form S-8 under the
Securities Act of 1933, as amended (the "Act"), with respect to the 2,000,000
shares of Common Stock issuable pursuant to the 2001 Plan on January 29, 2002.
The Company plans to file a new registration statement under the Act with
respect to the additional 1,500,000 shares of Common Stock issuable pursuant to
the 2001 Plan, if the proposed Plan Amendment is approved.

Recommendation of the Board of Directors

The Board of Directors believes it is in the Company's best
interests to approve the Plan Amendment which would allow the Company to
continue to grant options under the 2001 Plan to secure for the Company the
benefits of the additional incentive inherent in the ownership of shares of
Common Stock and to help the Company secure and retain the services of key
employees, directors, officers, consultants and advisors and to enable

-17-

compensation under the 2001 Plan to qualify as "performance-based" for purposes
of Section 162(m) of the Code. The affirmative vote of a majority of the votes
cast in favor of or against the proposal by the holders of shares entitled to
vote on such proposal is required for approval of the Plan Amendment.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE
PLAN AMENDMENT.

PROPOSAL NO. 3 - INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors recommends that Deloitte & Touche LLP,
independent certified public accountants, be elected independent auditors of the
Company for 2002. The recommendation is made on the advice of the Audit
Committee composed of non-employee directors (see page 8). Deloitte & Touche
LLP is a member of the SEC Practice Section of the American Institute of
Certified Public Accountants. A representative of Deloitte & Touche LLP is
expected to attend the Annual Meeting, and such representative will have the
opportunity to make a statement if he/she so desires and will be available to
respond to appropriate questions from shareholders.

Audit Fees: The aggregate fees billed for professional services for
the audit of the Company's annual financial statements for the year ended
December 31, 2001 and the reviews of the financial statements included in the
Company's Forms 10-Q for the year ended December 31, 2001 was $85,000.

Financial Information Systems Design and Implementation Fees: Such
fees were $290,906 for the year ended December 31, 2001.

All Other Fees: The Company's independent public accountant did not
perform any additional services for the Company during the year ended December
31, 2001, except for tax consulting, compliance services and review of the
Company's registration statements for a fee of $295,549, which the Audit
Committee determined is compatible with maintaining Deloitte & Touche LLP's
independence.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SELECTION OF THE
INDEPENDENT PUBLIC ACCOUNTANTS

SHAREHOLDER PROPOSALS

Proposals of shareholders intended for presentation at the next
Annual Meeting of Shareholders and intended to be included in the Company's
Proxy Statement and form of proxy relating to that meeting must be received at
the offices of the Company no later than January 2, 2003.

OTHER MATTERS

The Board of Directors does not know of any matter, other than those
described above that may be presented for action at the Meeting. If any other
matter or proposal should be presented and should properly come before the
meeting for action, the persons named in the accompanying proxy will vote upon
such matter or proposal in accordance with their best judgment.

-18-

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NYFIX, INC.

Proxy -- Annual Meeting of Shareholders
June 10, 2002

The undersigned hereby appoints Peter K. Hansen, George O. Deehan,
William J. Lynch and Carl E. Warden, and each of them, the true and lawful
attorneys and proxies of the undersigned, with full power of substitution, to
vote all of the shares of Common Stock of NYFIX, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at Stamford Harbor Park, 333 Ludlow Street, Stamford,
Connecticut 06902, on June 10, 2002, at 10:00 A.M. local time, or at any
adjournment thereof.

The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated April 30, 2002, and a copy of the Company's Annual Report
for the fiscal year ended December 31, 2001.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED TO ELECT THE NOMINEES AS DIRECTORS,
APPROVE THE AMENDMENT TO THE 2001 STOCK OPTION PLAN AND TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S AUDITORS.

1. To elect the following directors: Peter K. Hansen, George O. Deehan,
William J. Lynch, Carl E. Warden and George Kledaras, to serve as
directors until the next annual meeting of shareholders of the Company and
in each case until their successors have been duly elected and qualified.

[__] FOR ALL NOMINEES (except as listed below)

[__] WITHHELD FROM ALL NOMINEES

WITHHELD _______________________________________________________________
To withhold authority to vote for any nominee(s), print name(s) above

2. To approve an amendment to the 2001 Stock Option Plan to increase the
total number of shares of the Company's Common Stock available for
issuance upon the exercise of options granted under the 2001 Plan by
1,500,000 shares to an aggregate of 3,500,000.

FOR [___] AGAINST [___] ABSTAIN [___]

3. To ratify the appointment of Deloitte & Touche LLP as auditors of the
Company for the year ending December 31, 2002.

FOR [___] AGAINST [___] ABSTAIN [___]

NOTE: Your signature should appear the same as your name appears hereon. If
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which signing. When signing as joint tenants, all
parties in the joint tenancy must sign. When a corporation gives a proxy, an
authorized officer should sign it.

Signature: _______________ Date: ___________

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