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, 1997
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)
Chief Financial Officer
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)
INDEX
Page
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Report of Independent Accountants 3
Financial Statements:
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Statement of Net Assets Available for Plan Benefits
at August 31, 1997 and 1996 4
Statement of Changes in Net Assets Available for Plan Benefits for
the year ended August 31, 1997 5
Notes to Financial Statements 6
Supplementary Schedules:
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Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at August 31, 1997 8
Schedule II - Item 27d - Schedule of Reportable Transactions 9
for the year ended August 31, 19997
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 benefits
of the FactSet Research Systems Inc. Employee Stock Ownership Plan (the "Plan")
at August 31, 1997 and the related statement of changes in net assets available
for benefits for the year ended August 31, 1997 present fairly, in all material
respects, the net assets available for benefits at August 31, 1997 and 1996 and
the changes in net assets available for benefits for the year ended August 31,
1997 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 audit. We conducted our audit 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 audit provides a reasonable basis for the opinion expressed
above.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary Schedules I and II are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplementary schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Price Waterhouse LLP
New York, NY
February 27, 1998
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Statement of Net Assets Available for Plan Benefits
At August 31, 1997 and 1996
Assets: August 31, 1997 1996
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Investment at fair value:
Common Stock of FactSet Research Systems Inc. $22,141,130 $15,953,436
Receivable from FactSet Research Systems Inc. 600,000 500,000
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Total assets 22,741,130 16,453,436
Liabilities - -
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Net assets available for plan benefits $22,741,130 $16,453,436
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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, 1997
Additions:
Receivable from FactSet Research Systems Inc. $600,000
Unrealized gain on investment in common stock 5,800,722
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Total Additions 6,400,722
Deductions:
Distributions to participants 113,028
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Increase in net assets during the plan year 6,287,694
Net assets available for plan benefits:
Beginning of the year 16,453,436
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Ending of the year $22,741,130
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The accompanying notes are an integral part of these financial statement
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 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 806,966 and 787,824 shares of the Company's common stock at August 31,
1997 and 1996, respectively.
Effective August 31, 1997 and 1996, the Board of Directors authorized
contributions of $600,000 and $500,000, respectively to the Plan. Such amounts
were used to purchase shares of the Company's common stock on September 1, 1997
and 1996, respectively, and are reflected as a receivable from FactSet Research
Systems Inc. on the Statement of Net Assets Available for Plan Benefits.
Employees of the Company who have performed at least 1,000 hours of service
during the plan year are generally able to participate in the Plan.
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 eligible participants
during the plan year. Contributions begin to vest upon completion of the
employee's third year of service at a rate of 20% and continues at that rate in
each successive year of service. Forfeited non-vested interests in the Plan are
allocated to the other participants' accounts.
The vested interests of Plan participants and former participants are
distributed in a lump sum upon such participants 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 the distribution shall begin no
later than April 1, following the calendar year in which the participant retires
or attains the age of 70 1/2, which ever is later. When employment is
terminated, the timing of distributions of vested interests are made according
to the discretion of the former employee and are initiated upon receipt of
written notification. The vested balance of a participant account may
distributed in the form of cash, common stock of the Company or a combination
thereof.
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.
The Plan may be terminated at any time by the Company. The adjudication of the
Company as a bankrupt entity, the dissolution or liquidation of the Company, or
the permanent discontinuance of the contributions by the Company shall effect
the termination of the Plan. In the event of any termination of the Plan for any
reason each participant's account shall become fully vested, provided that such
participant is an employee of the Company at the time of such 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 trustee and assist in administering the plan.
All expenses of the Plan including administrative costs are paid by the Company.
Such costs include record keeping, participants reports, communications 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.
VALUATION OF INVESTMENT
The common stock of the Company is recorded at fair value as of August 31, 1997
and 1996 based on the closing market price of the Company's common stock on the
New York Stock Exchange.
UNREALIZED GAIN
Unrealized gain is the difference in the fair value of the Plan investment in
the Company's common stock at August 31, 1997 and 1996 based on a weighted
average share basis.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimated.
Note 3 - Income Taxes
The Plan is qualified under the appropriate section of the Internal Revenue Code
and intends to continue as a qualified plan. The Plan 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 and currently being operated in compliance with
the applicable requirements of the Internal Revenue Code. Accordingly, a
provision for federal income taxes has not been made.
Schedule I
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Item 27a-Schedule of Assets Held for Investment Purposes at August 31, 1997
Shares Cost Current Value
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Common Stock of FactSet
Research Systems Inc. 806,966 $2,720,000 $22,141,130
Schedule II
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Item 27d - Schedule of Reportable Transactions
For the Year Ended August 31, 1997
Shares Cost
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Purchase of Common Stock:
FactSet Research Systems Inc. 24,691 $500,000
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 27, 1998
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Senior Vice President,
Chief Financial Officer and Secretary