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NEW ENGLAND BUSINESS
SERVICE, INC. PAYROLL STOCK
OWNERSHIP PLAN
Financial Statements for the Years
Ended June 28, 1997 and June 29, 1996 and
Supplemental Schedule as of June 28, 1997
and Independent Auditors' Report
NEW ENGLAND BUSINESS SERVICE, INC.
PAYROLL STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF JUNE 28, 1997 AND JUNE 29, 1996 AND FOR
THE YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-5
SUPPLEMENTAL SCHEDULE AS OF JUNE 28, 1997 -
Item 27a - Schedule of Assets Held for Investment Purposes 6
Schedules required under the Employee Retirement Income Security Act of 1974,
other than the schedule listed above, are omitted because of the absence of the
conditions under which the schedules are required.
INDEPENDENT AUDITORS' REPORT
New England Business Service, Inc.
Payroll Stock Ownership Plan:
We have audited the accompanying statements of net assets available for
benefits of the New England Business Service, Inc. Payroll Stock Ownership Plan
as of June 28, 1997 and June 29, 1996, and the related statements of changes in
net assets available for benefits for the years then ended. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the New England Business
Service, Inc. Payroll Stock Ownership Plan as of June 28, 1997 and June 29,
1996, and the changes in its net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule
Of assets held for investment purposes as of June 28, 1997 is presented for the
purpose of additional analysis and is not a required part of the basic
financial statements, but is 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. This schedule is the
responsibility of the Plan's management. Such schedule has been subjected to
the auditing procedures applied in our audit of the basic 1997 financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
/S/Deloitte & Touche, LLP.
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November 26, 1997
NEW ENGLAND BUSINESS SERVICE, INC.
PAYROLL STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 28, 1997 AND JUNE 29, 1996
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1997 1996
ASSETS:
Investment in New England Business Service, Inc. ("NEBS")
common stock, at fair value (18015 shares in 1997
and 18,090 shares in 1996) $474,466 $352,757
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NET ASSETS AVAILABLE FOR BENEFITS $474,466 $352,757
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See notes to financial statements.
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NEW ENGLAND BUSINESS SERVICE, INC.
PAYROLL STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED JUNE 28, 1997 AND JUNE 29, 1996
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1997 1996
ADDITIONS:
Dividend income $ 14,393 $ 16,122
Net appreciation in fair value of NEBS common stock 120,940 -
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Total additions 135,333 16,122
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DEDUCTIONS:
Distributions to participants 13,624 19,979
Net depreciation in fair value of NEBS common stock - 7,389
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Total deductions 13,624 27,368
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NET INCREASE (DECREASE) 121,709 (11,246)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 352,757 364,003
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End of year $474,466 $352,757
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See notes to financial statements.
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NEW ENGLAND BUSINESS SERVICE, INC.
PAYROLL STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
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1. DESCRIPTION OF THE PLAN
The following brief description of the New England Business Service, Inc.
Payroll Stock Ownership Plan (the "Plan") provides only general information.
Participants should refer to the plan agreement for a more complete description
of the Plan's provisions.
General Information - On October 26, 1984, New England Business Service, Inc.
("NEBS" or the "Company") adopted a payroll stock ownership plan. The Plan
became effective as of June 25, 1983. An employee automatically becomes
eligible for participation in the Plan after completing one year of defined
service. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The Plan was last amended effective
July 1, 1990.
Administration of the Plan - The Plan is administered by the NEBS Retirement
Committee (the "Plan Committee"), whose members are appointed by the Board of
Directors of the Company. The Trustee of the assets of the plan is Norwest
Bank Minnesota, N.A. ("Norwest"). Administrative costs of the Plan have been
assumed by the Company.
Company Contributions - Prior to December 31, 1986, the Company made a
contribution to the Plan on behalf of each eligible employee. The amount of
the contribution was 0.5% of the aggregate eligible pay of employees eligible
to participate in the Plan. The contribution consisted of either common stock
of the Company or cash which was then converted into shares of common stock of
the Company. The Company made contributions in quarterly installments for
eligible earnings through December 31, 1986, at which time the Company's
contribution requirements under the Plan expired.
Investment of Contributions - Company contributions are invested in Company
common stock. Dividends and other distributions received are reinvested in
Company common stock.
Vesting - Participants are fully vested with respect to Company contributions
made pursuant to the Plan.
Withdrawals and Distributions - Contributions to the Plan, and earnings
thereon, are generally payable at termination of employment due to retirement,
disability, death or any other reason. Distribution payments may be made in a
cash lump sum, in whole shares of Company common stock held in the employee's
account in the Plan with the value of any fractional shares paid in cash, or in
installments for a period not to exceed the employee's life expectancy or the
joint life expectancies of the employee and beneficiary, up to a maximum of
fifteen years. The form of distribution is elected in writing by the employee.
Withdrawals prior to termination of employment are subject to certain
limitations and restrictions.
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1. DESCRIPTION OF THE PLAN (CONTINUED)
Participants' Accounts - An account is set up in the name of each participant
to record Company contributions made on the participant's behalf and other
transactions that occur in connection with the employee's participation in the
Plan. Each fiscal quarter the participants receive a statement of account
listing contributions and the number of shares of Company common stock in the
account.
Plan Amendment and Termination - The Company has the right to amend, suspend,
or terminate the Plan, but may not do so in a way which would divest a
participant of accrued benefits. If the Plan is terminated, the Trustee will
distribute all assets held in the Trust, after payment of expenses, in such a
manner as the Plan Committee shall determine and as may be required by law,
provided, however, that Company common stock held in a participant's account
will not be distributed because of termination of the Plan until eighty-four
months after the date at which the stock was allocated to the account, unless
the participant's employment is terminated sooner, in which case the stock will
be distributed without regard to the time elapsed since its allocation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared on the
accrual basis of accounting. Dividend income is recorded when declared.
Investment - The investment in Company common stock, representing the entire
balance of net assets available for benefits, is stated at quoted market prices
(New York Stock Exchange).
Distributions to Participants - Distributions to participants are recorded when
paid.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan administrator to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
3. TAX STATUS OF THE PLAN
The Plan obtained its latest determination letter, dated October 25, 1985, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal Revenue Code
(the "Code"). The Plan has been amended since receiving that letter. The plan
administrator believes that the Plan is currently designed and being operated
in compliance with applicable requirements of the Code. Accordingly, no
provision for income taxes has been included in these financial statements.
* * * * * *
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NEW ENGLAND BUSINESS SERVICE, INC.
PAYROLL STOCK OWNERSHIP PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 28, 1997
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b) Identity of Issue, c) Description of Investment, Including
Borrower, Lessor Maturity Date, Interest Rate, e) Current
a) or Similar Party Collateral and Par or Maturity Value d) Cost Value
* New England Business
Service, Inc. Common stock - 18,015 shares $356,163 $474,466
* Represents party-in-interest to the Plan.
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