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, 1998
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, 1998 and 1997 4
Statement of Changes in Net Assets Available for Plan Benefits for
the Year Ended August 31, 1998 5
Notes to Financial Statements 6
Additional Information:
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Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at August 31, 1998 8
Schedule II - Item 27d - Schedule of Reportable 9
Transactions 9 for the Year Ended August 31, 1998
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
and the related statement of changes in net assets available for 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, 1998 and 1997, and the changes in net assets available for
benefits for the year ended August 31, 1998, 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 audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. Such information has been subjected to the auditing procedures applied in
the audit 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, NY
January 29, 1999
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Statement of Net Assets Available for Plan Benefits
At August 31, 1998 and 1997
Assets: August 31, 1998 1997
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Investment at fair value:
Common Stock of FactSet Research Systems Inc. $26,644,079 $22,158,772
Receivable from FactSet Research Systems Inc. 750,000 600,000
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Total assets 27,394,079 22,758,772
Liabilities - -
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Net assets available for plan benefits $27,394,079 $22,758,772
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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, 1998
Additions:
Receivable from FactSet Research Systems Inc. $750,000
Unrealized gain on investment in common stock 3,984,689
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Total Additions 4,734,689
Deductions:
Distributions to participants 99,382
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Increase in net assets during the plan year 4,635,307
Net assets available for plan benefits:
Beginning of the year 22,758,772
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Ending of the year $27,394,079
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The accompanying notes are an integral part of this 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 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 826,173 and 807,609 shares of the Company's common stock at August 31,
1998 and 1997, respectively.
Effective August 31, 1998 and 1997, the Board of Directors authorized
contributions of $750,000 and $600,000, respectively, to the Plan. Such amounts
were used to purchase shares of the Company's common stock on September 1, 1998
and 1997, 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 at fiscal year end (August 31) and 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.
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. WTR
Consulting Group has been retained to act as recordkeeper for the Plan.
All expenses of the Plan including administrative costs are paid by the Company.
Such costs include recordkeeping, 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 carried at fair value at August 31, 1998 and
1997 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, 1998 and 1997 based on a weighted
average share basis.
Note 3 - Income Taxes
The Plan is qualified under the appropriate section of the Code and it is
intended that it will 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 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 - Subsequent Event
On January 8, 1999 the Company announced that its Board of Directors had
approved a three-for-two stock split of the Company's shares of common stock and
had declared a regular quarterly cash dividend of $0.05 per share on the
post-split shares (equivalent to $.20 per annum). The three-for-two common stock
split will be effected as a stock dividend. The additional shares of common
stock will be distributed on February 5, 1999 to common stockholders of record
at the close of business on January 22, 1999. As a result of the three-for-two
common stock split, the number of common shares owned by the ESOP immediately
prior to the record date will be increased by 50% as of the record date. The
cash dividend will be paid on March 22, 1999 to common stockholders of record at
the close of business on February 26, 1999. The dividend will be used to
purchase additional shares of common stock based on the closing price of a share
of the Company's common stock on dividend payment date.
Schedule I
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Item 27a-Schedule of Assets Held for Investment Purposes
At August 31, 1998
Shares Cost Current Value
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Common Stock of FactSet
Research Systems Inc. 826,173 $3,320,000 $26,644,079
Schedule II
FactSet Research Systems Inc.
Employee Stock Ownership Plan
Item 27d - Schedule of Reportable Transactions
For the Year Ended August 31, 1998
Shares Cost
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Purchase of Common Stock:
FactSet Research Systems Inc. 21,868 $600,000
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 12, 1999
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Senior Vice President,
Chief Financial Officer and Secretary