SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended August 31, 1999
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________________
Commission File Number: 1-11869
FactSet Research Systems Inc. Employee Stock Ownership Plan
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(Full title of the plan)
FactSet Research Systems Inc.
One Greenwich Plaza
Greenwich, Connecticut 06830
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(Address of the plan)
FactSet Research Systems Inc.
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(Name of issuer of the securities held pursuant to the plan)
One Greenwich Plaza
Greenwich, Connecticut 06830
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(Address of issuer's principal executive office)
FactSet Research Systems Inc. Employee Stock Ownership Plan
INDEX
Page
Report of Independent Accountants 3
Financial Statements:
Statement of Net Assets Available for Plan Benefits
at August 31, 1999 and 1998 4
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended August 31, 1999 5
Notes to Financial Statements 6 - 8
Supplemental Schedule:
Schedule I - Line 27a Form 5500 - Schedule of Assets Held for
Investment Purposes at August 31, 1999 9
Signature 10
Report of Independent Accountants
To the Participants and Administrator
of the FactSet Research Systems Inc.
Employee Stock Ownership Plan:
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of the FactSet Research Systems Inc. Employee Stock Ownership Plan (the
"Plan") at August 31, 1999 and 1998, and the changes in net assets available for
benefits for the year ended August 31, 1999, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes (Schedule I) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplemental information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PricewaterhouseCoopers LLP
New York, New York
February 4, 2000
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Statement of Net Assets Available for Plan Benefits
ASSETS: At August 31, 1999 1998
Investment at fair value:
Common stock of FactSet Research Systems Inc. $56,863,460 $26,644,079
Receivables from FactSet Research Systems Inc.:
Employer contributions 1,000,000 750,000
Dividends 60,698 -
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Total assets 57,924,158 27,394,079
LIABILITIES: - -
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Net assets available for plan benefits $57,924,158 $27,394,079
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The accompanying notes are an integral part of these financial statements
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended August 31, 1999
ADDITIONS:
Contributions from FactSet Research Systems Inc. $ 1,000,000
Dividends on common stock 185,733
Appreciation in fair value of common stock 31,500,623
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Total additions 32,686,356
DEDUCTIONS:
Distributions to participants 2,156,277
INCREASE IN NET ASSETS DURING THE PLAN YEAR 30,530,079
Net assets available for plan benefits:
Beginning of the year 27,394,079
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Ending of the year $57,924,158
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The accompanying notes are an integral part of these financial statements
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
Note 1 - DESCRIPTION OF THE PLAN
GENERAL
The FactSet Research Systems Inc. Employee Stock Ownership Plan (the "Plan" or
"ESOP") was established effective September 1, 1985 and is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The
Plan is intended to constitute a "qualified plan" within the meaning of Sections
401(a) and 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and ERISA, as amended, and to qualify as an "employee stock ownership plan"
under Section 4975(e)(7) of the Code. During the latest plan year, amendments to
the Plan were made. Such amendments were for the purpose of updating the Plan
for compliance with recently enacted tax and/or ERISA provisions.
The Plan is funded by optional annual contributions by FactSet Research Systems
Inc. ("FactSet" or the "Company") as designated by its Board of Directors. The
funds held under the Plan are invested in the Common Stock of FactSet. The Plan
owned 2,455,643 and 2,478,519 shares of the Company's common stock at August 31,
1999 and 1998, respectively.
Effective August 31, 1999 and 1998, the Board of Directors authorized
contributions of $1,000,000 and $750,000, respectively, to the Plan. Such
amounts were used to purchase shares of the Company's common stock on September
1, 1999 and 1998, respectively, and are reflected as a receivable from FactSet
on the Statement of Net Assets Available for Plan Benefits.
Employees of the Company at fiscal year end (August 31) who have performed at
least 1,000 hours of service during the plan year are generally eligible to
participate in the Plan. When employee work records are not kept on an hourly
basis, employees are credited with 190 hours of service for each month in which
one hour of service was performed.
Contributions in the form of the Company's common stock are allocated to
participant accounts in the proportion that each eligible participant's
compensation bears to the aggregate compensation of all participants during the
plan year. Eligible compensation for participants is capped at $120,000 during
any one plan year. Contributions begin to vest upon completion of the employee's
third year of service at a rate of 20% and continue at that rate in each
successive year of service. Forfeited, non-vested interests in the Plan are
allocated to the other participants' accounts upon meeting certain criteria as
defined in the Plan. There were 2,424 shares forfeited and reallocated in 1999.
The vested interests of plan participants are distributed in a lump sum upon
such participant reaching the age of 65. A participant who reaches the age of 65
but remains employed by the Company may elect to receive the distribution of his
or her vested interest as of the last day in any subsequent plan year, provided
that in the case of a five percent shareholder the distribution shall begin no
later than April 1, following the calendar year in which the participant attains
the age of 70 1/2. When employment is terminated, distributions of vested
interests are made according to the election of the former employee. Such
distributions are generally payable in a lump sum and are initiated upon receipt
of written notification from the former employee. The vested balance of a
participant's account may be distributed in the form of cash, common stock of
the Company or a combination thereof.
The Plan may be terminated at any time by the Company. The adjudication of the
Company as a bankrupt entity, an assignment for the benefit of the creditors of
the Company, the dissolution or liquidation of the Company, or the permanent
discontinuance of contributions by the Company shall effect the termination of
the Plan.
ADMINISTRATION AND EXPENSES
The Plan is administered by the ESOP Plan Committee, which has appointed
officials of FactSet to act as trustees and assist in administering the Plan.
The assets of the Plan are held in custody by The Bank of New York. USI
Consulting Group has been retained to act as record keeper for the Plan.
All expenses of the Plan including administrative costs are paid by the Company.
Such costs include record keeping, participants reports, communications, audit
fees and transfer agent fees.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared according to the
accrual basis of accounting.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets, liabilities and changes therein, and the
disclosures of contingent assets and liabilities. Actual results could differ
from these estimates.
VALUATION OF INVESTMENT IN COMMON STOCK
The Plan's only investment is the common stock of FactSet. It is carried at fair
value at August 31, 1999 and 1998 based on the closing market price of FactSet's
common stock on the New York Stock Exchange.
UNREALIZED APPRECIATION
Unrealized appreciation is the difference between the fair value and original
cost basis of the Plan investment in the Company's common stock at August 31,
1999 and 1998 based on a weighted average share basis. Unrealized appreciation
at August 31, 1999 and 1998 was $52,828,888 and $ 23,324,079 respectively.
DIVIDENDS
Dividend income is accrued on the ex-dividend date. Upon receipt of dividends,
the Plan purchases additional shares of FactSet common stock and allocates such
shares to participant accounts in the proportion of each participant's account
to the total.
Note 3 - Income Taxes
The Plan is qualified under the appropriate section of the Code and received a
favorable determination letter from the IRS on April 18, 1995. The Plan has been
amended since receiving the determination letter. However, the Plan
Administrator believes the Plan is designed to be and is currently being
operated in compliance with the applicable requirements of the Code.
Accordingly, a provision for federal income taxes has not been made.
Note 4 - Stock Splits
On February 5, 1999, the Company declared a 3-for-2 stock split effected as a
stock dividend. Subsequent to the Plan's most recent year end, the Company
announced a 2-for-1 stock split. The stock split was effected as a stock
dividend and was distributed on February 4, 2000 to common stockholders of
record on January 21, 2000. Consistent with treatment by the Company, shares of
common stock held by the Plan and related amounts (including dividends per
share) have been retroactively adjusted for both stock splits.
Note 5 - Dividends
In March 1999, FactSet initiated payment of a regular quarterly dividend of
$0.025 per common share. In accordance with the Plan terms, dividends are used
to purchase additional shares of FactSet common stock based on the closing price
of a share of the Company's common stock on dividend payment dates. Regular
quarterly dividends of $ 0.025 per common share were also paid in June and
September 1999.
Note 6 - Subsequent Events
On November 16, 1999 the Board of Directors declared a cash dividend of $ 0.025
per common share payable on December 21, 1999 to all common stockholders of
record at the close of business on November 30, 1999 and on January 13, 2000,
declared a cash dividend of $ 0.03 per common share payable on March 21, 2000 to
all common stockholders of record at the close of business on February 29, 2000.
The Board of Directors of FactSet Research Systems Inc. approved the termination
of the ESOP for all employees of FactSet Limited and FactSet Pacific, Inc. (the
"international participants"). Effective January 1, 2000, the ESOP accounts for
all international participants became 100% vested and are scheduled to be
distributed to participants on or before August 31, 2000.
Supplemental Schedule
Schedule I
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Line 27a Form 5500-Schedule of Assets Held for Investment Purposes
At August 31, 1999
(a) (b) (c) (d) (e)
Identity of Issue, borrower, Description of investment including
lessor, or similiar party maturity date, rate of interest, Current
collateral, par or maturity value Cost Value
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** FactSet Research Systems Common Stock 2,445,643* shares $4,039,572 $56,863,460
$23.25/Share
*Shares of common stock and related amounts give retroactive effect to the
3-for-2 stock split that occurred on February 5, 1999 and the 2-for-1 stock
split that was declared on January 13, 2000 and was distributed on February 4,
2000.
**Indicates an identified person known to be a party-in-interest to the Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Committee and the Trustee have duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
FactSet Research Systems Inc. Employee Stock Ownership Plan
By: /s/ Ernest S. Wong Date: February 28, 2000
Senior Vice President,
Chief Financial Officer and Secretary