sec document

DEF 14A 1 def14a1805_10192004.htm sec document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY INFORMATION 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

September 10, 2004

To our Stockholders:

We are pleased to invite you to attend the 2004 Annual Meeting of Stockholders
of NYFIX, Inc. The meeting will be held at 10:00 a.m., local time, on Tuesday,
October 19, 2004, at our corporate headquarters located at Stamford Harbor Park,
333 Ludlow Street in Stamford, Connecticut. We have enclosed the formal Notice
of Annual Meeting, the Proxy Statement, your proxy voting card and our 2003
Annual Report for your review.

At the meeting, you will be asked to elect Directors and ratify the appointment
of the independent registered public accounting firm, which are more fully
described in the Proxy Statement.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting in
person, we ask that you execute and return your proxy promptly, using the
postage-paid envelope we have provided for your convenience. Also, you may
submit your proxy by telephone or via the Internet if you wish. Please see the
information incuded on the enclosed proxy card for information on how to vote by
telephone or over the Internet. If you do attend the Annual Meeting, you may
withdraw your proxy should you wish to vote in person. You may revoke your proxy
by submitting a subsequent proxy over the telephone or via the Internet or by
attending the Annual Meeting and voting in person.

Thank you for you continued support.

Sincerely,

/s/ Peter Kilbinger Hansen
------------------------------

[Image Omitted - LOGO]
Peter Kilbinger Hansen

CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD

NYFIX, INC.
STAMFORD HARBOR PARK
333 LUDLOW STREET
STAMFORD, CT 06902

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

OCTOBER 19, 2004

To the Stockholders of NYFIX, Inc.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of NYFIX, Inc. will be held on Tuesday, October 19, 2004, 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 ratify the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for the year ending
December 31, 2004; and

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

The Board of Directors has fixed the close of business on August 24,
2004, as the record date for the Annual Meeting. Only stockholders of record of
our common stock on Mellon Investor Services, LLC records at the close of
business on that date are entitled to notice of, and to vote at, the Annual
Meeting or any adjournments thereof.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS PROVIDED, OR SUBMIT YOUR
PROXY BY TELEPHONE OR VIA THE INTERNET, TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU ATTEND THE MEETING.

By Order of the Board of Directors,

/s/ Brian Bellardo
----------------------------------------
Brian Bellardo
SECRETARY

Stamford, Connecticut
September 10, 2004

TABLE OF CONTENTS

PAGE

Q & A'S ABOUT THE MEETING.....................................................2

GENERAL INFORMATION...........................................................4

SECURITY OWNERSHIP............................................................6

PROPOSAL NO. 1 - ELECTION OF DIRECTORS........................................8

PROPOSAL NO. 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
RESTERED PUBLIC ACCOUNTING FIRM............................................9

DIRECTORS' MEETINGS AND COMPENSATION.........................................10

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION..................12

REPORT OF THE AUDIT COMMITTEE................................................12

EXECUTIVE COMPENSATION.......................................................14

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION...............21

COMMON STOCK PERFORMANCE GRAPH...............................................22

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................23

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE......................23

STOCKHOLDER PROPOSALS........................................................24

OTHER MATTERS................................................................24

Q & A'S ABOUT THE MEETING

Q: WHAT WILL TAKE PLACE AT THE ANNUAL MEETING?

A: At our annual meeting, you will vote on the business matters listed in
the preceding notice of meeting, namely (1) the election of five
directors (Messrs. Hansen, Deehan, Jennings, Lynch and Wajnert), (2) the
ratification of the appointment of our independent registered public
accounting firm (Deloitte & Touche LLP) and (3) such other business as
may properly come before the Annual Meeting or any adjournment thereof.
Management will be available to answer your questions, as will a
representative from Deloitte & Touche LLP.

Q: WHO CAN VOTE?

A: Stockholders who were record holders at the close of business on August
24, 2004, are entitled to vote their shares of our common stock held on
that date. Each share of common stock outstanding on that date is
entitled to one vote. As of August 24, 2004, there were outstanding and
entitled to vote at the meeting 32,333,043 shares of our common stock.

Q: HOW CAN I VOTE IF I CANNOT COME TO THE MEETING?

A: Whether or not you are able to attend the meeting, you may vote your
shares by completing, signing and dating the accompanying proxy card and
returning it in the prepaid envelope, or by submitting your proxy by
telephone or via the internet. If you do not mark any selections but
return the card signed, your shares will be voted by your proxies (Brian
Bellardo, our Secretary and General Counsel and Mark R. Hahn, our Chief
Financial Officer) in favor of the two proposals. If you are a
street-name stockholder, you will receive instructions from your bank,
broker or other nominee describing how to vote your stock. If you attend
the meeting, you may vote in person.

Q: CAN I CHANGE MY MIND AFTER VOTING?

A: Yes, you may revoke your proxy before the meeting by writing to our
Secretary stating that you wish to revoke your proxy or by sending
another executed proxy card, bearing a later date, to our Secretary. You
also may revoke your proxy by submitting a subsequent proxy over the
telephone or via the Internet, or by attending the annual meeting and
voting in person.

Q: WHO WILL COUNT THE VOTE?

A: Representatives of Mellon Investor Services, LLC will tabulate the votes
and act as inspectors of election.

Q: WHAT CONSTITUTES A QUORUM FOR THE MEETING?

A: A quorum is the presence, in person or by proxy, of stockholders holding
a majority of the voting power of the shares entitled to vote at the
meeting. Abstentions and broker non-votes (which can occur if a "street
name" holder does not provide his or her broker with voting
instructions) are counted towards a quorum.

Q: HOW MANY VOTES ARE NEEDED TO APPROVE THE PROPOSALS?

A: Directors are elected by a plurality of the votes of the shares present,
in person or by proxy, and entitled to vote on the election of
directors. This means that assuming a quorum is present at the meeting,
the five director nominees receiving the highest number of all votes
cast for directors will be elected. The affirmative vote of at least a
majority of the voting power of the shares present, in person or by
proxy, and entitled to vote on the subject matter is needed to approve
the other proposal being submitted to the stockholders. Therefore,
abstentions and broker non-votes will have no effect on this other
proposal.

Q: WHO IS SOLICITING MY VOTE AND WHO PAYS THE COST?

A: Our Board of Directors is soliciting your proxy. Proxies may be
solicited personally, by mail, by telephone, or otherwise by our
directors, officers and other employees, without additional
compensation. We will pay the cost of preparing, assembling and mailing
the proxy materials and will reimburse banks, brokerage firms,
custodians, nominees and fiduciaries for their reasonable expenses in
sending proxy materials to the beneficial owners of NYFIX common stock.

Q: WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2005 ANNUAL STOCKHOLDERS' MEETING
DUE?

A: If you wish to include a proposal (including the nomination of persons
for election to the Board of Directors) in the proxy statement for the
2005 annual meeting, your proposal, in writing, must be received by our
Secretary at our corporate headquarters no later than January 1, 2005.
The proposal must comply in all respects with applicable rules and
regulations of the United States Securities and Exchange Commission
("SEC"), the laws of the state of our incorporation and our by-laws;
otherwise, the Chairman of the meeting may refuse to allow the proposal
to be brought before the meeting.

Q: HOW CAN I GET MORE INFORMATION ABOUT NYFIX?

A: You can find more information about NYFIX or may obtain copies of SEC
filings by visiting our web site at WWW.NYFIX.COM.

NYFIX, INC.
STAMFORD HARBOR PARK
333 LUDLOW STREET
STAMFORD, CT 06902

2004 PROXY STATEMENT

--------------------

ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, OCTOBER 19, 2004

GENERAL INFORMATION

This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders and proxy card are being furnished to stockholders of NYFIX, Inc.,
a Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company (the "Board of Directors"), for
use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Tuesday, October 19, 2004, at 10:00 A.M., local time, at our corporate
headquarters located at Stamford Harbor Park, 333 Ludlow Street, Stamford, CT
06902, and at any adjournments or postponements thereof. These proxy materials
and accompanying Annual Report are being sent on or about September 17, 2004, to
our stockholders entitled to vote at the Annual Meeting.

The Annual Meeting has been called to (1) elect five (5) directors to
the Board of Directors for the ensuing year, (2) ratify the appointment of our
independent registered public accounting firm (Deloitte & Touche LLP) and
(3) consider and act upon such other business as may properly come before the
Annual Meeting or any adjournment thereof.

PROXIES AND VOTING RIGHTS

Only stockholders of record at the close of business on August 24, 2004
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
Our voting securities issued and outstanding on the Record Date consisted of
32,333,043 shares ("Shares") of our common stock, entitling the holders thereof
to one vote per Share. We had no other class of voting securities outstanding on
August 24, 2004. The presence at the Annual 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 Annual Meeting by
holders of Shares entitled to vote on such proposal. Approval of the other
proposal being submitted to the stockholders requires the affirmative vote of at
least a majority of the voting power of the Shares entitled to vote on such
proposal that are voted, in person or by proxy.

Broker "non-votes" and the Shares as to which a stockholder 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, such
as ratification of the appointment of our independent registered public
accounting firm, 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 by us, addressed Attention:
Secretary, by execution of a subsequent proxy, by submitting a subsequent proxy

over the telephone or via the Internet, or by attending and voting in person at
the Annual Meeting. Attendance at the meeting will not automatically revoke the
proxy. If not revoked, the Shares represented thereby will be voted at the
Annual 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 (1) FOR the
election of the persons nominated as Directors; (2) FOR ratification of the
appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the year ended December 31, 2004 and (3) at the discretion
of the proxy holders, on any other matters that may properly come before the
Annual Meeting.

All expenses in connection with the solicitation will be borne by us. It
is expected that the solicitation will be made primarily by mail, but our
regular employees or representatives may also solicit proxies by telephone,
telegraph or in person, without additional compensation. We 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 beneficial
ownership of our common stock, as of August 24, 2004, by (1) each person known
by us to be the beneficial owner of more than five percent of our outstanding
common stock, (2) each director, (3) each of our Named Executive Officers and
(4) all directors and executive officers as a group. Unless otherwise indicated,
we believe that each stockholder has sole voting power and sole dispositive
power with respect to the common stock beneficially owned.

NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE OF SHARES
BENEFICIAL OWNER (1) BENEFICIALLY OWNED (2) BENEFICIALLY OWNED
------------------------------ ----------------------- ---------------------

Peter Kilbinger Hansen 2,095,913 (3) 6.3%

Carl E. Warden 1,530,646 (4) 4.7%

Lars Kragh 617,375 (5) 1.9%

Robert C. Gasser 110,000 (6) *

Mark R. Hahn 55,000 (7) *

Keith R. Jamaitis 50,055 (8) *

George O. Deehan 29,000 (9) *

William J. Lynch 24,000 (10) *

William C. Jennings 22,000 (11) *

Brian Bellardo 8,334 (12) *

All executive officers and directors as a 4,542,323 (13) 13.5%
group (10 persons) (13)

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

(1) Unless otherwise indicated the address of each director or executive
officer is c/o NYFIX, Inc., Stamford Harbor Park, 333 Ludlow Street,
Stamford, Connecticut 06902.

(2) Beneficial ownership is based on 32,333,043 shares of our common stock
outstanding as of August 24, 2004. Shares of our common stock issuable
upon exercise of options 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.

(3) Includes 740,625 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 50,000 shares of our
common stock issuable upon exercise of options that are not currently
exercisable and 670,000 shares of our common stock issuable upon exercise
of options that are currently anti-dilutive.

(4) Includes 100,000 shares of our common stock held by The Carl and Vicki
Warden Family Foundation, of which Mr. Warden is the trustee. Does not
include an aggregate of 1,459,975 shares of our common stock held by
certain adult family members of Mr. Warden and their children.

(5) Includes 239,250 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 18,000 shares of our
common stock issuable upon exercise of options that are not currently
exercisable and 79,000 shares of our common stock issuable upon exercise
of options that are currently anti-dilutive.

(6) Includes 60,000 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 150,000 shares of our
common stock issuable upon exercise of options that are not currently
exercisable and 162,500 shares of our common stock issuable upon exercise
of options that are currently anti-dilutive.

(7) Includes 40,000 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 90,000 shares of our
common stock issuable upon exercise of options that are not currently
exercisable.

(8) Includes 27,175 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 19,600 shares of our
common stock issuable upon exercise of options that are not currently
exercisable and 49,250 shares of our common stock issuable upon exercise
of options that are currently anti-dilutive.

(9) Includes 24,000 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 55,000 shares of our
common stock issuable upon exercise of options that are currently
anti-dilutive.

(10) Includes 24,000 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 55,000 shares of our
common stock issuable upon exercise of options that are currently
anti-dilutive.

(11) Includes 20,000 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 40,000 shares of our
common stock issuable upon exercise of options that are not currently
exercisable.

(12) Includes 8,334 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 26,666 shares of our
common stock issuable upon exercise of options that are not currently
exercisable.

(13) Includes 1,183,384 shares of our common stock issuable upon exercise of
currently exercisable options. Does not include 394,266 shares of our
common stock issuable upon exercise of options that are not currently
exercisable.

PROPOSAL NO. 1 - ELECTION OF DIRECTORS

Our By-Laws provide that we shall have not less than two nor more than
seven directors, with the exact number to be fixed by our Board of Directors
from time to time. Our Board of Directors currently consists of five members,
all of whom, except Carl Warden who is retiring after more than ten years of
service as a director, are nominees for election. We are also nominating Thomas
C. Wajnert to become a member of the Board. All of our nominees for the Board of
Directors were recommended to the Board by the NYFIX Corporate Governance and
Nominating Committee. If elected, our directors will serve until our next annual
meeting of stockholders and until the election and qualification of their
successors or until their prior resignation, removal, or death. 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 Annual 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.

Set forth below is information about each director, including business
positions held during at least the past five years, age, other directorships and
periods of services as our director.

PETER KILBINGER HANSEN, age 43, our founder, has served as our
President, Chief Executive Officer and Chairman of the Board of Directors since
June 1991. Prior to our founding, Mr. Hansen served from 1984 to 1988 as
Marketing Manager, Sales & Marketing Manager, Managing Direct or respectively of
Mark Computer Systems, A/S, a Scandinavian based international company, 1988
until 1991 as Managing Director of Banking Systems of Business Line A/S, a
Scandinavian based international company. 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.

GEORGE O. DEEHAN, age 61, has served as a director since August 2000.
Mr. Deehan serves as Chairman of the Compensation Committee and a member of the
Audit and Corporate Governance and Nominating Committees of our Board of
Directors. Since October 2003, he has been the Chief Executive Officer and
Chairman of the Board of Paragon Financial Corporation, a specialty residential
mortgage banker. He is also 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. He 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. Prior to
joining Advanta, Mr. Deehan served as President and Chief Operating Officer of
Information Technology Services for AT&T Capital. He earned a bachelor's
degree from Lenoir-Rhyne College.

WILLIAM C. JENNINGS, age 65, has served as a director since July 2003.
Mr. Jennings serves as Chairman of the Audit Committee and a member of the
Compensation and Corporate Governance and Nominating Committees of our Board of
Directors. Mr. Jennings is an audit committee financial expert as defined in
Item 401 of Regulation S-K promulgated by the SEC and is independent as defined
in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Mr. Jennings is a retired partner of
PricewaterhouseCoopers LLP, a global accounting and advisory firm, where he led
the risk management and internal control consulting practice from 1992 until his
retirement in 1999. Prior to that, Mr. Jennings served as a senior audit partner
at Coopers & Lybrand, as a senior executive vice president at Shearson
Lehman Brothers, responsible for quality assurance, internal audit and
compliance, and as an executive vice president and chief financial officer of
Bankers Trust. Since retiring from PricewaterhouseCoopers, Mr. Jennings provides
independent consulting services to a number of companies. He is also a director
of Silgan Holdings Inc. and Axcelis Technologies, Inc., both publicly traded
companies.

WILLIAM J. LYNCH, age 62, has served as a director since June 2000. Mr.
Lynch serves as Chairman of the Corporate Governance and Nominating Committee
and a member of the Audit and Compensation Committees of our Board of Directors.
Since January 2001, he 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. Prior to
that, he was a partner of the law firm Morgan Lewis and Bockius, LLP. Mr. Lynch
also serves as Chairman of the Board of Directors of Edgewater Technologies, a
publicly traded company.

CARL E. WARDEN, age 65, has served as a director since August 1993. Mr.
Warden serves as a member of the Compensation and Corporate Governance and
Nominating Committees, and in 2003 was a member of the Audit Committee, of our
Board of Directors. He is a self-employed private investor. Mr. Warden received
his BBA from the Freeman School of Business at Tulane University. After more
than ten years of service as a director, Mr. Warden is retiring from our Board
of Directors and thus is not seeking re-election.

THOMAS C. WAJNERT, age 61, is being nominated as a director of the
Company for the first time. He was introduced to the Board of Directors as a
candidate by George O. Deehan, a member of the Company's Corporate Governance
and Nominating Committee. Mr. Wajnert has been Managing Director of Fairview
Advisors, LLC, a merchant bank since January 2002. He was Chairman and Chief
Executive Officer of SEISMIQ, Inc, a provider of advanced technology to the
commercial finance and leasing industry, from its founding in April 2000 until
December 2001. Mr. Wajnert also was the Chairman of, and a significant investor
in, EPIX Holdings, Inc., a professional employer organization, from March 1998
until November 2003, where he also served as Chief Executive Officer from March
1998 to April 1999. Previously, Mr. Wajnert was Chairman of the Board of
Directors from January 1992 until December 1997, and Chief Executive Officer
from November 1984 until December 1997, of AT&T Capital Corporation (NYSE), a
commercial finance and leasing company. He was self-employed from December 1997
to March 1998. Mr. Wajnert serves on the boards of directors of Reynolds
American, Inc. (NYSE) and JLG Industries, Inc. (NYSE).

None of our directors have 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 us.

RECOMMENDATION OF THE BOARD OF DIRECTORS

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

PROPOSAL NO. 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors recommends that Deloitte & Touche LLP, our
appointed independent registered public accounting firm, be ratified for 2004.
The recommendation is made on the advice of the Audit Committee, composed of
non-employee directors. Deloitte & Touche LLP is an independent registered
public accounting firm registered with the Public Company Accounting Oversight
Board and a member of the Center for Public Company Audit Firms. 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 stockholders.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

DIRECTORS' MEETINGS AND COMPENSATION

BOARD MEETINGS HELD

The Board of Directors meets for both regular and special meetings, and
met nine times during 2003. The Board acted by unanimous written consent on five
occasions. The Board of Directors has assigned certain responsibilities to
committees, as described below. From time to time, the members of the Board of
Directors act by unanimous written consent pursuant to the laws of the Company's
state of incorporation. No 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 year.

BOARD COMMITTEES

AUDIT COMMITTEE

The Audit Committee, which met seven times during 2003, acts on and
reports to the Board of Directors with respect to various auditing and
accounting matters, including a recommendation for the appointment of the
independent registered public accounting firm, the scope of the annual audit,
fees to be paid to the independent registered public accounting firm, the
performance of our independent registered public accounting firm and our
accounting practices. The members of the Audit Committee currently are William
C. Jennings (Chairman), William J. Lynch and George O. Deehan. Each member of
the Audit Committee is independent as independence is defined in Rule
4200(a)(15) of the National Association of Securities Dealers ("NASD"), which is
part of the listing standards for the Nasdaq National Market ("Nasdaq"). The
Board of Directors adopted a revised written Audit Committee Charter in January
2004 recommended to it by the Audit Committee. The charter of the Audit
Committee is included as Exhibit A to this proxy statement and is available on
our website at WWW.NYFIX.COM.

COMPENSATION COMMITTEE

The Compensation Committee, which met three times during 2003 while
convened as the Board, recommends, reviews and oversees the salaries, benefits
and stock option plans applicable to our employees, consultants, directors and
other individuals we compensate. The members of the Compensation Committee are
George O. Deehan (Chairman), William J. Lynch, William C. Jennings and Carl E.
Warden.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

The Board of Directors formed a Nominating Committee on March 27, 2003,
and expanded it to the Corporate Governance and Nominating Committee on
September 9, 2003, which (1) recommends candidates to stand for election to the
Board of Directors, (2) reviews and makes recommendations to the Board of
Directors with respect to the composition of the Board of Directors and (3)
develops and recommends to the Board a set of corporate governance principles
applicable to the Company. The charter of the Corporate Governance and
Nominating Committee is available on our website at WWW.NYFIX.COM. The members
of the Corporate Governance and Nominating Committee, all of whom are
independent as independence is defined in NASD Rule 4200(a)(15), are William J.
Lynch (Chairman), George O. Deehan, William C. Jennings and Carl E. Warden.

CORPORATE GOVERNANCE BOARD GUIDELINES

In January 2004, the Board of Directors adopted Corporate Governance
Board Guidelines formulated and approved by the Corporate Governance and
Nominating Committee. The Corporate Governance Board Guidelines assist the Board
in fulfilling its responsibilities to select, compensate, and evaluate the
Company's Chairman and Chief Executive Officer and other executive officers and
to monitor and provide oversight to that management, on behalf of the Company's
stockholders, related to the business and affairs of the Company. The Guidelines
also set forth Board policy on composition of the Board, including director
independence and qualifications for Board candidates. The Guidelines are
available on the Company's website at WWW.NYFIX.COM.

CODE OF BUSINESS CONDUCT AND ETHICS

The Company has adopted a Code of Business Conduct and Ethics applicable
to all directors, officers and employees of the Company, including the Chief
Executive Officer, Chief Financial Officer and Controller of the Company, and
any person performing a similar function. The Code of Business Conduct and
Ethics is available on the Company's website at WWW.NYFIX.COM. The Company has
instituted a procedure that permits its employees to anonymously report
violations of the Code of Business Conduct and Ethics by the CEO, any senior
financial officer, any senior executive officer or any director.

NOMINATION OF DIRECTORS

The Corporate Governance and Nominating Committee is responsible for
reviewing the qualifications of, and recommending to the Board of Directors,
individuals to be nominated for membership on the Board of Directors. In
evaluating and determining whether to nominate a candidate for a position on the
Company's Board, the Committee considers the criteria outlined in the Company's
Corporate Governance Board Guidelines for the composition of the Board and the
qualifications of members.

The Corporate Governance and Nominating Committee will consider
stockholder recommendations for nominees for membership on the Board of
Directors. Such recommendations may be submitted in writing to the attention of
the Chairman of the Corporate Governance and Nominating Committee, at the
Company's headquarters address. Any such recommendation must include:

o The name and address of the candidate;

o A brief biographical description, including his or her occupation
for at least the last ten years, and a statement of the
qualifications of the candidate; and

o The candidate's signed consent to serve as a director if elected and
to be named in the proxy statement.

The Committee may request additional information from such candidate to
assist in its evaluation. The Committee will evaluate any stockholder
recommended nominees using the criteria set forth in the Company's Corporate
Governance Board Guidelines, and in the same manner as it evaluates candidates
recommended by other sources.

In connection with the selection of candidates for election as Company
director at the October 2004 annual meeting, the Company did not receive a
recommended nominee from a security holder, or group of security holders, that
beneficially owned more than 5% of the Company's voting common stock for at
least a year and did not pay a fee to any third party to identify or evaluate or
assist in identifying or evaluating any potential nominees.

COMMUNICATIONS BETWEEN SECURITY HOLDERS AND BOARD MEMBERS

Stockholders and others desiring to communicate with the Board of
Directors as a whole, or with any independent Directors, may do so by submitting
such communication in writing to such Director(s) in care of the Company at its
headquarters address. The Company's General Counsel will forward the
communication to the Director(s) in accordance with such Director's
instructions. Because other appropriate avenues of communication exist for
matters that are not of stockholder interest, such as general business
complaints or employee grievances, communications that do not relate to matters
of stockholder interest are not forwarded to the Board. The General Counsel has
the right, but not the obligation, to forward such other communications to
appropriate channels within the Company.

The Company's policy is to encourage all Directors to attend annual
meetings, absent exigent circumstances. All directors who were such at the time
of the 2003 annual shareholders meeting attended that meeting.

DIRECTOR COMPENSATION

As compensation for their services as members of the Board of Directors,
certain non-employee directors receive options to purchase shares of our common
stock at an exercise price equal to the closing price of our common stock on the
date of grant and, beginning in 2004, non-employee directors receive an annual
stipend of $25,000, which is paid quarterly, except Carl Warden who declined
such stipend. Options granted to non-employee directors during 2003 (exercisable
into an aggregate of 60,000 shares of our common stock at an exercise price of
$4.74 per share) vest ratably in April 2004, April 2005 and April 2006, so long
as the director completes service through the vesting date. Non-employee
directors are reimbursed for reasonable expenses in connection with serving as a
director and member of a committee. Since joining the Board of Directors in July
2003, Mr. Jennings has been paid an annual stipend of $25,000 for serving as our
audit committee financial expert, which is paid quarterly.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are George O. Deehan
(Chairman), William J. Lynch, William C. Jennings and Carl E. Warden. None of
our executive officers or directors serves as a member of the Board of Directors
or 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

In accordance with its written charter adopted by our 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 our accounting, auditing and financial reporting practices.

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

The Audit Committee discussed and reviewed with the independent
registered public accounting firm 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 registered public accounting firm's audit of the
financial statements.

The Audit Committee reviewed our audited financial statements as of and
for the year ended December 31, 2003, with management and the independent
registered public accounting firm. Management is responsible for our financial
reporting process, including its system of internal controls, and for the
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America, and has
represented to the Audit Committee that our financial statements were prepared
in accordance with accounting principles generally accepted in the U.S. Our
independent registered public accounting firm is responsible for auditing those
financial statements and expressing an opinion as to the conformity of such
financial statements with accounting principles generally accepted in the U.S.
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
our employees or professional accountants or auditors and the role of the Audit
Committee is not intended to duplicate or certify the activities of management
and the independent registered public accounting firm.

On May 27, 2004, we restated our consolidated financial statements that
appeared in our Form 10-K/A for the year ended December 31, 2002 and the
condensed consolidated financial statements that appeared in our Forms 10-Q/A
for each of the interim periods ended March 31, 2003, June 30, 2003 and
September 30, 2003. The restatement related to our accounting for our 1999 and
2001 investments in and 2002 acquisition of an additional 30% ownership interest
in NYFIX Millennium.

Based on the above-mentioned review and discussions with the independent
registered public accounting firm, the Audit Committee recommended to the Board
that our audited financial statements be included in our Annual Report on Form
10-K for the year ended December 31, 2003, for filing with the Securities and
Exchange Commission. The Audit Committee also recommended the reappointment,
subject to stockholder approval, of the independent registered public accounting
firm and the Board concurred with such recommendation.

Our independent registered public accounting firm is Deloitte & Touche
LLP and has served in this role since the year ended December 31, 2000.

AUDIT FEES

The aggregate fees for professional services rendered by Deloitte &
Touche LLP in connection with its audit of our annual consolidated financial
statements and reviews of the interim financial statements included in our
quarterly reports on Form 10-Q were approximately $328,000 and $292,000 for the
years ended December 31, 2003 and 2002, respectively. The aggregate fees billed
by Deloitte & Touche LLP for professional services rendered for the audit of our
consolidated financial statements for the year ended December 31, 1999, rendered
in 2002, were approximately $50,000. The consolidated financial statements for
the year ended December 31, 1999 were originally audited by Arthur Andersen LLP.

AUDIT-RELATED FEES

In addition to fees disclosed under "Audit Fees" above, the aggregate
fees for professional services rendered by Deloitte & Touche LLP for assurance
and related services that are reasonably related to the performance of the audit
and reviews of our financial statements were $143,000 and $90,000 for the years

ended December 31, 2003 and 2002, respectively. Such services included
accounting consultations, consents, the audit of our employee benefit plan and,
for 2003, services related to Sarbanes-Oxley Act compliance.

TAX FEES

The aggregate fees for professional services rendered by Deloitte &
Touche LLP for tax compliance, tax planning, tax advice and research and
development tax studies for the our United States and foreign subsidiaries were
$369,000 and $409,000 for the years ended December 31, 2003 and 2002,
respectively.

ALL OTHER FEES

The aggregate fees for professional services rendered by Deloitte &
Touche LLP for all other fees, including audits in connection with acquisitions
for 2003 and 2002 and information technology services relating to financial
information systems design and implementation for 2002, which were incurred
prior to the enactment of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"),
which prohibits a company's independent registered public accounting firm from
providing such services, were $26,000 and $546,000 for the years ended December
31, 2003 and 2002, respectively.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee of our Board of Directors pre-approves on an annual
basis the audit, audit-related, tax and other non-audit services to be rendered
by our accountants based on historical information and anticipated requirements
for the following fiscal year. The Audit Committee pre-approves specific types
or categories of engagements constituting audit, audit-related, tax and other
non-audit services as well as the range of fee amounts corresponding to each
such engagement. To the extent that our management believes that a new service
or the expansion of a current service provided by our accountants is necessary
or desirable, such new or expanded services are presented to the Audit Committee
for its review and approval, or to an Audit Committee member by delegation who
reports any such review and approval to the Audit Committee at its next meeting,
prior to our engagement of our accountants to render such services. Non-audit
services, relating to our employee benefit plan, aggregating $13,000, were
approved by the Audit Committee pursuant to Rule 2-01, paragraph (c)(7)(i)(C) of
SEC Regulation S-X during the year ended December 31, 2003.

William C. Jennings William J. Lynch George O. Deehan

EXECUTIVE COMPENSATION

The following table provides certain information, for the years ended
December 31, 2003, 2002 and 2001, respectively, concerning compensation awarded
to, earned by or paid to (1) our chief executive officer ("CEO"), (2) our four
most highly compensated executive officers other than our CEO whose salary and
bonus exceeded $100,000 with respect to the year ended December 31, 2003 and who
were serving as executive officers on December 31, 2003 (collectively 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, 2003.

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ ------------------
OTHER ANNUAL SECURITIES
COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS (SHARES)
------------------------------- ----- --------- ---------- ------------ ------------------

Peter K. Hansen, 2003 $ 380,000 $ -- $ -- --
Chief Executive Officer and 2002 389,231 -- -- 100,000
Chairman of the Board 2001 250,000 250,000 -- 125,000

Robert C. Gasser (2), 2003 399,462 100,000 -- --
Chief Executive Officer, NYFIX 2002 355,897 -- -- 100,000
Millennium and President, NYFIX 2001 -- -- -- --
Transaction Services and NYFIX
Clearing

Lars Kragh, 2003 244,632 -- -- --
Chief Information Officer 2002 218,288 -- -- 20,000
2001 174,340 -- -- 25,000

Mark R. Hahn (3), 2003 297,981 -- -- 75,000
Chief Financial Officer 2002 60,577 -- -- 60,000

Brian Bellardo (4), 2003 164,423 -- -- 25,000
General Counsel and Secretary

(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 year
indicated or $50,000.

(2) Mr. Gasser has served as Chief Executive Officer, NYFIX Millennium, our
80%-owned broker-dealer subsidiary, since October 2001. He is also
President of NYFIX Transaction Services, since its formation and NASD
approval in May 2002 and President of NYFIX Clearing Corporation, since
its formation and NASD approval in September 2003. Mr. Gasser's
compensation for 2002 as stated in the above table represents the period
from February 1, 2002, when our ownership in NYFIX Millennium was
increased to 80% from 50%, through December 31, 2002. Accordingly, no
compensation is included for 2001.

(3) Mr. Hahn started with us in September 2002 and received no compensation
from us in 2001.

(4) Mr. Bellardo started with us in March 2003 and received no compensation
from us in 2001 or 2002.

OPTION GRANTS

The following table sets forth information regarding stock options
granted to the Named Executive Officers during the year ended December 31, 2003.
These grants are also reflected on the Summary Compensation Table above.

NUMBER OF
SECURITIES PERCENTAGE POTENTIAL REALIZABLE VALUE
UNDERLYING OF TOTAL AT ASSUMED ANNUAL RATES
STOCK OPTIONS EXERCISE OF STOCK PRICE
OPTIONS GRANTED TO PRICE PER EXPIRATION APPRECIATION OF STOCK
NAME GRANTED EMPLOYEES SHARE (1) DATE OPTIONS (2)
---------------- ------------- ----------- ---------- ----------- -------------------------
5% 10%
---------- ----------

Mark R. Hahn 75,000 (3) 13.16% $4.50 1/1/13 $212,252 $537,888
Brian Bellardo 25,000 (4) 4.39% $4.02 3/21/13 $63,204 $160,171

(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 and 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 our common stock granted on
January 1, 2003. Of the options granted, 25,000 vested on January 1, 2004
and 25,000 will vest on each of January 1, 2005 and January 1, 2006.

(4) Represents options to purchase shares of our common stock granted on March
21, 2003. Of the options granted, 8,334 vested on March 21, 2004, and
8,333 will vest on each of March 21, 2005, and March 21, 2006.

AGGREGATED OPTION EXERCISES AND OPTION VALUES

The Named Executive Officers did not exercise any options in the fiscal
year ended December 31, 2003. The following table sets forth the number of
options held by the Named Executive Officers at the end of the fiscal year ended
December 31, 2003 and the value of such options.

NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT YEAR-END
NAME OPTIONS AT YEAR-END (1)
----------------- ----------------------- ----------------------------
(E) (U) (E) (U)
--------- ----------- ----------- -------------
Peter K. Hansen 1,310,625 140,000 $4,088,794 $ 160,000
Robert C. Gasser 222,500 215,000 240,000 160,000
Lars Kragh 318,250 8,000 1,465,050 32,000
Mark R. Hahn 15,000 120,000 55,500 423,000
Brian Bellardo -- 25,000 -- 97,500

(E) Exercisable
(U) Unexercisable
(1) Options are "in-the-money" if the market price of a share of our common
stock on December 31, 2003 exceeded the exercise price of such options.
The value of such options is calculated by determining the difference
between the aggregate market price of our common stock underlying the
options on December 31, 2003, and the aggregate exercise price of such
options. The closing price of a share of our common stock on December 31,
2003, as reported on the Nasdaq, was $7.92.

EMPLOYMENT AGREEMENTS

Mr. Hansen serves as our President and Chief Executive Officer
pursuant to an employment agreement, dated June 24, 1991. This agreement was for
a term of five years effective as of January 1, 1991 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 the compensation committee deems
appropriate. Effective January 1, 2004, the compensation committee of the board
of directors set Mr. Hansen's base salary at $399,000. In the event Mr. Hansen
is terminated by us 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. Gasser serves as the Chief Executive Officer of NYFIX
Millennium, President of NYFIX Transaction Services and President of NYFIX
Clearing pursuant to an employment agreement, dated September 21, 2001. This
agreement was for a term of one year commencing October 5, 2002 and renews
automatically on October 5th of each year thereafter unless terminated in
accordance with its terms or unless either party gives 60 days prior written
notice of intention to discontinue the automatic extension. Pursuant to the
terms of the agreement, Mr. Gasser is paid a base salary plus a bonus of 2% of

NYFIX Millennium's pre-tax earnings and such bonus or additional compensation as
the board of directors or the compensation committee deems appropriate.
Effective January 1, 2004, the compensation committee of our board of directors
set Mr. Gasser's base salary at $420,000 plus a bonus of 2% of NYFIX
Millennium's pre-tax earnings. In the event Mr. Gasser is terminated by us after
the one year anniversary of employment for any reason other than a hostile
acquisition, a material breach by him of the agreement, conduct materially
injurious to us, NYFIX Millennium, its affiliates, customers or suppliers, or
any act of fraud which would constitute a felony under federal or state law, he
is entitled to receive one year of base salary in one lump sum payment and an
immediate vesting of the nearest options to be vested of a sign-up grant of
225,000 options vesting over a three-year period at a rate of 75,000 at the end
of each of the first three years of employment. In the event NYFIX Millennium is
involved in a hostile acquisition and should the acquiring company terminate Mr.
Gasser's services, he is entitled to receive twice his annual base and fifty
percent of any unvested options will become fully vested. In the event NYFIX
Millennium should merge with another non-NYFIX, Inc. owned company or should we
divest NYFIX Millennium, and Mr. Gasser were to have his employment terminated
following his second anniversary of employment, Mr. Gasser is entitled to 100%
vesting of a bonus grant of 100,000 options.

Mr. Jamaitis serves as President of NYFIX, USA pursuant to an
employment agreement, dated October 22, 1997. This agreement was for a term of
one year and renews automatically on November 10th of each year thereafter
unless sooner terminated in accordance with its terms. Mr. Jamaitis became an
Executive Officer of the Company in January 2004. Pursuant to the terms of his
employment agreement, Mr. Jamaitis is paid a base salary, plus such special
bonuses or incentives as determined by us. Effective January 1, 2004, the
compensation committee of our board of directors set Mr. Jamaitis' base salary
at $300,000. In addition, on May 28, 2004, Mr. Jamaitis signed a non-compete
agreement with us that extends for the term of his employment with us and for
one year thereafter. Under the terms of this agreement, in consideration of
$30,000, Mr. Jamaitis is prohibited, without our prior approval, from entering
into employment with specified organizations, unless he is terminated for
reasons other than Cause, as defined in the agreement.

Mr. Kragh serves as our Chief Information Officer pursuant to an
employment agreement, dated January 1, 2003. This agreement was for a term of
one year and renews automatically on January 1 of each year thereafter unless
either party gives 90 days prior written notice of its intention to discontinue
the automatic extension. Pursuant to the terms of the agreement, Mr. Kragh is
paid a base salary of $231,875, increasing to $250,000 effective April 1, 2003,
plus such special bonuses or incentives as determined by us. Effective January
1, 2004, the compensation committee of our board of directors set Mr. Kragh's
base salary at $262,500.

Mr. Hahn serves as our Chief Financial Officer pursuant to an
employment agreement, dated January 1, 2003. This agreement was for a term of
one year and renews automatically on January 1st of each year unless sooner
terminated in accordance with its terms. Pursuant to the terms of the agreement,
Mr. Hahn is paid a base salary, plus such special bonuses or incentives as
determined by us. Effective January 1, 2004, the compensation committee of our
board of directors set Mr. Hahn's base salary at $315,000.

Mr. Bellardo serves as our Secretary and General Counsel pursuant to
an employment agreement, dated March 21, 2003. This agreement was for a term of
one year effective March 31, 2003 and renews automatically on March 31st of each
year unless sooner terminated in accordance with its terms. Pursuant to the
terms of the agreement, Mr. Bellardo is paid a base salary, plus special bonuses
or incentives as determined by us. Effective January 1, 2004, the compensation
committee of our board of directors set Mr. Bellardo's base salary at $236,250.

EQUITY COMPENSATION PLAN INFORMATION

2001 STOCK OPTION PLAN

On March 13, 2002, we adopted the 2001 Stock Option Plan (the "2001
Plan") for which a total of 2,000,000 shares of our common stock have been
reserved for issuance. The 2001 Plan was approved at our Annual Meeting of
Stockholders held on June 4, 2001. In 2002, we adopted an amendment to the 2001
Plan, to increase the total number of shares of our common stock reserved for
issuance to 3,500,000 shares. This amendment was approved at our Annual Meeting
of Stockholders held on June 10, 2002. Pursuant to the 2001 Plan, as amended, we
may grant stock options and stock purchase rights to our employees, officers,
directors and consultants. The Board of Directors, or a committee to whom the
Board of Directors has delegated authority, selects individuals to whom options
are granted. Options generally become exercisable over a three-year period and
expire in ten years. The exercise price of incentive stock options granted under
the 2001 Plan must be at least equal to the fair market value of our stock on
the date of grant, as defined. The 2001 Plan was effective on May 1, 2001 and
expires on April 30, 2011. At December 31, 2003, stock options to purchase
2,962,468 shares of our common stock were outstanding. As of August 24, 2004,
stock options to purchase 58,270 shares of our common stock were available for
grant under the 2001 Plan.

JAVELIN STOCK OPTION PLAN

As a result of our acquisition of Javelin on March 31, 2002, we
assumed the outstanding stock options of Javelin that were granted pursuant to
the Javelin 1999 Stock Option Plan (the "Javelin Plan"). The Javelin Plan
authorized grants of stock options of Javelin. At the acquisition date, the
Javelin options were converted into our options at a conversion rate of 0.51 to
one. The options granted under the Javelin Plan were fully vested at the time of
our acquisition of Javelin pursuant to a change of control clause within the
Javelin Plan. A total of 511,167 shares of our common stock have been reserved
for issuance upon exercise of such options. Pursuant to the Javelin Plan, as
amended, we may grant stock options and stock purchase rights to our employees,
officers, directors and consultants. The maximum term of an incentive stock
option grant under the Javelin Plan is limited to ten years. The exercise price
of incentive stock options granted under the Javelin Plan must be at least equal
to the fair market value of our stock at the date of grant, as defined. The
Javelin Plan was effective on July 1, 1999 and expires on June 30, 2009. At
December 31, 2003, stock options to purchase 324,711 shares of our common stock
were outstanding under the Javelin Plan. As of August 24, 2004, stock options to
purchase 88,922 shares of our common stock were available for grant under the
Javelin Plan.

1991 STOCK OPTION PLAN

On March 30, 1999, the Board of Directors adopted the first amendment to
the Amended and Restated 1991 Incentive and Nonqualified Stock Option Plan (the
"1991 Plan"). Under the 1991 Plan, as amended, the number of options reserved
for issuance was increased from 3,375,000 shares to 5,625,000 shares of common
stock. This amendment was approved at our Annual Meeting of Stockholders held on
June 7, 1999. On March 29, 2000, the Board of Directors adopted the second
amendment to the 1991 Plan. Under this amendment, the number of options reserved
for issuance was increased from 5,625,000 shares to 6,625,000 shares of common
stock. This amendment was approved at our Annual Meeting of Stockholders held on
June 5, 2000. Options granted generally become exercisable over a three-year
period and expire in ten years. The 1991 Plan expired on June 23, 2001. All
available options have been granted under the 1991 Plan, as amended and no
further grants will be made. At December 31, 2003, stock options to purchase
3,419,762 shares of our common stock were outstanding.

The following table provides information regarding our equity
compensation plans at December 31, 2003:

Number of securities Number of securities
to be issued upon Weighted-average remaining available for
exercise of exercise of future issuance under equity
Plan Category outstanding options outstanding options compensation plans
------------------------------------ --------------------- ------------------- -----------------------------
Equity compensation plans 6,382,230 $ 10.42 458,432
approved by security holders ===================
Equity compensation plans not 324,711 $ 8.83 78,698
approved by security holders (1) --------------------- =================== -----------------------------

Total 6,706,941 $ 10.34 537,130
===================== ==================== =============================

(1) As a result of our acquisition of Javelin on March 31, 2002, we assumed
the outstanding stock options of Javelin that were granted pursuant to the
above-referenced Javelin Plan.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

GENERAL

The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to our executive officers and key employees.
Messrs. Deehan, Lynch, Jennings and Warden serve as members of the Compensation
Committee. The Compensation Committee is responsible for the award of stock
options under our equity compensation plans. Messrs. Deehan, Lynch, Jennings and
Warden are non-employee directors of ours as defined under Rule 16b-3 of the
Exchange Act. Mr. Deehan serves as Chairman of the Compensation Committee. The
Compensation Committee met three times while convened as the Board during the
year ended December 31, 2003.

COMPENSATION PHILOSOPHY

The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on achievement of our annual and long-term
performance goals, to provide competitive levels of compensation, to recognize
individual initiative, achievement and length of service to us, and to assist us
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 stockholders' interests in the enhancement
of stockholder value. We have not established a policy with regard to Section
162(m) of the Internal Revenue Code of 1986, as amended.

SALARIES

Base salaries for our 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 similar 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; our
performance; 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 believes itself to be between the low and medium salary
levels in relationship to comparable businesses.

STOCK OPTION AND OTHER PLANS

The Company awarded Messrs. Hahn and Bellardo options to purchase 75,000
and 25,000 shares of common stock, respectively, in 2003. The exercise prices
for the options are $4.50 and $4.02 per share, respectively. It is the
philosophy of the Compensation Committee that stock options should be awarded to
employees to promote long-term interests between such employees and the
Company's stockholders through an equity interest in the Company and to 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 stockholders' interest in the
enhancement of stockholder value. Participation in incentive plans is offered,
pursuant to their terms, to provide incentive to executive officers to
contribute to corporate growth and profitability.

CHIEF EXECUTIVE OFFICER COMPENSATION

Mr. Hansen was our President and Chief Executive Officer in 2003, with
an annual base salary of $399,000. For the year ended December 31, 2003, Mr.
Hansen received salary of approximately $380,000, no bonus or stock options, as
compared to 2002 when he received salary of $390,000, no bonus and 100,000 stock

options. In determining such compensation amounts for Mr. Hansen, the
Compensation Committee 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 strategic focus and role in
effecting the Company's acquisitions, his efforts in assisting the Company to
improve its capital base and financial condition, an assessment of survey data
relating the Company's performance to that of other comparable companies, and
the evaluation of the other factors described in "Salaries" above.

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

COMMON STOCK PERFORMANCE GRAPH

The following graph compares, for each of the years indicated, the
yearly percentage change in the cumulative total stockholder return on our
common stock with the cumulative total return of (1) the Standard and Poor's 500
Index, a broad equity market index, and (2) the Nasdaq Computer Index.

PERFORMANCE GRAPH

[GRAPHIC OMITTED]

1998 1999 2000 2001 2002 2003
---- ---- ---- ---- ---- ----
S&P 500 Index 100 121 110 97 76 97
NYFIX, Inc. 100 473 605 501 113 198
Nasdaq Computer & Data
Processing Index 100 220 101 82 56 74

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On June 30, 1999, Peter K. Hansen, our President and Chief Executive
Officer, issued us a promissory note in the principal amount of $16,875 as
payment for the purchase price of an option he exercised for 16,875 shares of
our common stock (at an exercise price of $1.00 per share). Such note originally
bore interest at 6% per annum, was scheduled to mature on June 30, 2005 and was
secured by the 16,875 shares. This note was revised on June 30, 2002 to reflect
an interest rate of 5.5% per annum. The note was paid in full on December 31,
2003.

On December 30, 1997, Mr. Hansen issued us a promissory note in the
principal amount of $230,000 as payment for the purchase price of an option he
exercised for 258,750 shares of our common stock (at an exercise price of $0.89
per share). Such note originally bore interest at 6% per annum, matured on
December 30, 2003 and was 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 note
was paid in full on December 31, 2003.

On December 31, 1996, Mr. Hansen issued us a promissory note in the
principal amount of $50,000 as payment for the purchase price of an option he
exercised for 112,500 shares of our common stock (at an exercise price of $0.44
per share). Such note originally bore no interest, was scheduled to mature on
December 31, 2004 and was 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 note
was paid in full on December 31, 2003.

On July 10, 2002, Keith R. Jamaitis, when he was not an Executive
Officer, issued us a promissory note in the principal amount of $71,229. Such
note bore interest at 5.5% per annum and matured on July 10, 2004. The note was
paid in full on May 27, 2004.

On November 23, 2003, Mr. Jamaitis, when he was not an Executive
Officer, issued to the NYFIX, Inc. 401(k) Plan (the "Plan") a promissory note in
the principal amount of $30,000 secured by a portion of Mr. Jamaitis' vested
account balance in the Plan. Such note bears interest at 5.0% per annum and
matures on December 12, 2008. The outstanding balance of the note, including
principal and interest, was $24,489 at August 24, 2004.

Mr. Jamaitis was named President of NYFIX USA and an Executive Officer
in January 2004.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers and directors,
and persons who own more than ten percent of a registered class of our
outstanding common stock to file reports of ownership and changes in ownership
on Forms 3, 4 and 5 with the SEC and Nasdaq. Officers, directors and greater
than ten percent stockholders are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file.

To our knowledge, based solely on review of the copies of these reports
furnished to us and the written representations that no other reports were
required, during 2003 all Section 16 (a) filing requirements applicable to our
executive officers and directors were complied with except for the failure to
timely file on Form 4 one transaction by Mark R. Hahn. This failure was
inadvertent and, when the oversight was discovered, the transaction was
subsequently reported.

STOCKHOLDER PROPOSALS

Proposals of stockholders intended for presentation at the next
Annual Meeting of Stockholders and intended to be included in our Proxy
Statement and form of proxy relating to that meeting must be received at our
offices no later than January 1, 2005.

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 Annual 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.

EXHIBIT A

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF NYFIX, INC.

CHARTER

Adopted January 2004

I. PURPOSE

The Audit Committee is established by and amongst the Board of
Directors for the primary purpose of assisting the board in:

o overseeing the integrity of the Company's financial statements,
o overseeing the Company's compliance with legal and regulatory
requirements,
o overseeing the independent auditor's qualifications and
independence,
o overseeing the performance of the Company's internal audit
function and independent auditor, and
o overseeing the Company's system of disclosure controls and
system of internal controls regarding finance, accounting,
legal and regulatory compliance and ethics that management and
the Board have established.

Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Company's policies,
procedures and practices at all levels. The Audit Committee should also provide
an open avenue of communication among the independent auditors, financial and
senior management, the internal auditing function, and the Board of Directors.

The Audit Committee has the authority to obtain advice and assistance from
outside legal, accounting, or other advisors as deemed appropriate to perform
its duties and responsibilities.

The Company shall provide appropriate funding, as determined by the Audit
Committee, for compensation to the independent auditor and to any advisers that
the Audit Committee chooses to engage.

The Audit Committee will primarily fulfill its responsibilities by carrying out
the activities enumerated in Section III of this Charter. The Audit Committee
will report regularly to the Board of Directors regarding the execution of its
duties and responsibilities.

II. COMPOSITION AND MEETINGS

The Audit Committee shall be comprised of three or more directors as determined
by the Board. Each Committee member shall be an independent director (as defined
by all applicable rules and regulations), and free from any relationship
(including disallowed compensatory arrangements) that, in the opinion of the
Board, would interfere with the exercise of his or her independent judgment as a

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member of the Committee. All members of the Committee shall have a working
familiarity with basic finance and accounting practices. The board shall
determine whether at least one member of the Committee qualifies as an "audit
committee financial expert" in compliance with the criteria established by the
SEC and other relevant regulations. The existence of such member, including his
or her name and whether or not he or she is independent, shall be disclosed in
periodic filings as required by the SEC. Committee members may enhance their
familiarity with finance and accounting by participating in educational programs
conducted by the Company or an outside consultant.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.

The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. Each regularly scheduled meeting shall conclude with an
executive session of the Committee absent members of management and on such
terms and conditions as the Committee may elect. As part of its job to foster
open communication, the Committee should meet periodically with management and
the independent auditors in separate executive sessions to discuss any matters
that the Committee or each of these groups believe should be discussed
privately. In addition, the Committee should meet quarterly with the independent
auditors and management to discuss the annual audited financial statements and
quarterly financial statements, including the Company's disclosure under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

III. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit Committee shall:

A. DOCUMENTS/REPORTS/ACCOUNTING INFORMATION REVIEW

1. Review this Charter periodically, at least annually, and recommend to the
Board of Directors any necessary amendments as conditions dictate.

2. Review and discuss with management the Company's annual financial statements,
quarterly financial statements, and all internal controls reports (or summaries
thereof). Review other relevant reports or financial information submitted by
the Company to any governmental body, or the public, including management
certifications as required by the Sarbanes-Oxley Act of 2002 (Sections 302 and
906) and relevant reports rendered by the independent auditors (or summaries
thereof).

3. Recommend to the Board whether the financial statements should be included in
the Annual Report on Form 10-K. Review with financial management and the
independent auditors the 10-Q prior to its filing (or prior to the release of
earnings).

4. Review earnings press releases with management, including review of
"pro-forma" or "adjusted" non-GAAP information prior to their release.

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5. Discuss with management financial information and earnings guidance provided
to analysts and rating agencies. Such discussions may be on general terms (i.e.,
discussion of the types of information to be disclosed and the type of
presentation to be made).

B. INDEPENDENT AUDITORS

6. Appoint (subject to shareholder ratification), compensate, and oversee the
work performed by the independent auditor for the purpose of preparing or
issuing an audit report or related work. Review the performance of the
independent auditors and remove the independent auditors if circumstances
warrant. The independent auditors shall report directly to the Audit Committee
and the Audit Committee shall oversee the resolution of disagreements between
management and the independent auditors in the event that they arise. The
Committee will review the experience and qualifications of senior members of the
independent audit team annually and ensure that all partner rotation
requirements, as promulgated by applicable rules and regulations, are
executed.(1) Consider whether the auditor's performance of permissible nonaudit
services is compatible with the auditor's independence.

7. Review with the independent auditor any problems or difficulties and
management's response; review the independent auditor's attestation and report
on management's internal control report; and hold timely discussions with the
independent auditors regarding the following:

o all critical accounting policies and practices;
o all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with management,
ramifications of the use of such alternative disclosures and treatments,
and the treatment preferred by the independent auditor;
o other material written communications between the independent auditor
and management including, but not limited to, the management letter and
schedule of unadjusted differences; and
o an analysis of the auditor's judgment as to the quality of the Company's
accounting principles, setting forth significant reporting issues and
judgments made in connection with the preparation of the financial
statements.

8. At least annually, obtain and review a report by the independent auditor
describing:

o the firm's internal quality control procedures;
o any material issues raised by the most recent internal quality-control
review, peer review, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the firm, and any steps
taken to deal with any such issues; and
o (to assess the auditor's independence) all relationships between the
independent auditor and the Company.

----------------------
(1) Though not expressly required to be included in the audit committee charter
by rule or regulation, the NYFIX Audit Committee chooses to evaluate the
qualifications of key members of the independent auditor's team, as well as
to ensure compliance with the partner rotation requirements (recognizing
that the ultimate responsibility for executing rotation requirement rests
with the registered public accounting firms).

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9. Review and preapprove both audit and nonaudit services to be provided by the
independent auditor (other than with respect to DE MINIMIS exceptions permitted
by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one or more
designated members of the Audit Committee with any such preapproval reported to
the Audit Committee at its next regularly scheduled meeting. Approval of
nonaudit services shall be disclosed to investors in periodic reports required
by Section 13(a) of the Securities Exchange Act of 1934.

10. Set clear hiring policies, compliant with governing laws or regulations, for
employees or former employees of the independent auditor.

C. FINANCIAL REPORTING PROCESSES AND ACCOUNTING POLICIES

11. In consultation with the independent auditors, review the integrity of the
organization's financial reporting processes (both internal and external), and
the internal control structure (including disclosure controls). Meet with
representatives of the disclosure control committee on a periodic basis to
discuss any matters of concern arising from the disclosure committee's quarterly
process to assist the CEO and CFO in their Sarbanes-Oxley Act of 2002 Section
302 certifications.

12. Review with management major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Company's selection or application of accounting principles, and major issues as
to the adequacy of the Company's internal controls and any special audit steps
adopted in light of material control deficiencies.

13. Review analyses prepared by management (and the independent auditor as noted
in item 7 above) setting forth significant financial reporting issues and
judgments made in connection with the preparation of the financial statements,
including analyses of the effects of alternative GAAP methods on the financial
statements.

14. Review with management the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the financial statements of the
Company.

15. Review and approve all related party transactions.(2)

16. Establish and maintain procedures for the receipt, retention, and treatment
of complaints regarding accounting, internal accounting, or auditing matters.

------------------------
(2) Related parties are: affiliates of the enterprise; entities for which
investments are accounted for by the equity method by the enterprise;
trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management;
principal owners of the enterprise; its management; members of the
immediate families of principal owners of the enterprise and its
management; and other parties with which the enterprise may deal if one
party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. Another
party is also a related party if it can significantly influence the
management or operating policies of the transacting parties or if it has an
ownership interest in one of the transacting parties and can significantly
influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.

A-4

17. Establish and maintain procedures for the confidential, anonymous submission
by Company employees regarding questionable accounting or auditing matters.

D. LEGAL COMPLIANCE AND RISK MANAGEMENT

18. Review management's monitoring of the Company's compliance with the
organization's Ethical Code, and ensure that management has the proper review
system in place to ensure that the Company's financial statements, reports and
other financial information disseminated to governmental organizations, and the
public satisfy legal and regulatory requirements.

19. Review, with the organization's counsel, legal compliance matters including
corporate securities trading policies.

20. Review, with the organization's counsel, any legal matter that could have a
significant impact on the organization's financial statements.

21. Discuss policies with respect to risk assessment and risk management. Such
discussions should include the Company's major financial and accounting risk
exposures and the steps management has undertaken to control them.

E. OTHER RESPONSIBILITIES

22. Review with the independent auditors and management the extent to which
changes or improvements in financial or accounting practices, as approved by the
Audit Committee, have been implemented. (This review should be conducted at an
appropriate time subsequent to implementation of changes or improvements, as
decided by the Committee.)

23. Prepare the report that the SEC requires be included in the Company's annual
proxy statement.

24. Annually, perform a self-assessment relative to the Audit Committee's
purpose, duties and responsibilities outlined herein.

25. Perform any other activities consistent with this Charter, the Company's
by-laws and governing law, as the Committee or the Board deems necessary or
appropriate.

A-5

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

PROXY -- ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 19, 2004

Brian Bellardo and Mark R. Hahn, or either of them individually and each
of them with the power of substitution, are hereby appointed Proxies of the
undersigned to vote all of the shares of the common stock of NYFIX, Inc. which
the undersigned is entitled to vote at our Annual Meeting of Stockholders to be
held at Stamford Harbor Park, 333 Ludlow Street, Stamford, Connecticut 06902, on
October 19, 2004, at 10:00 A.M. local time, or at any adjournment thereof. We
encourage you to submit your proxy electronically over the Internet or the
telephone. This eliminates the need to mail your proxy card.

o To submit your proxy electronically over the Internet, go to the
website: HTTP://WWW.EPROXY.COM/NYFX and follow the prompts.

o To submit your proxy by telephone, use a touch-tone telephone and
call 1-800-435-6710 and follow the prompts.

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 September 10, 2004, and a copy of our Annual Report for
the year ended December 31, 2003.

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
AND TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.

1. To elect the following directors: Peter K. Hansen, George O. Deehan,
William J. Lynch, William C. Jennings and Thomas C. Wajnert, to serve as
directors until our next annual meeting of stockholders 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 ratify the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the year ending December 31, 2004.

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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