POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
For the years ended December 31, 1996 and 1995
With Report of Independent Accountants
PAGE
Policy Management Systems Corporation
401(k) Retirement Savings Plan
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
__________
Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, with Fund Information as of
December 31, 1996 and 1995 2-5
Statements of Changes in Net Assets Available for
Plan Benefits, with Fund Information for the
years ended December 31, 1996 and 1995 6-9
Notes to Financial Statements 10-16
Supplemental Schedules:
Form 5500, Item 27(a) - Schedule of Assets Held
for Investment Purposes, as of December 31, 1996 18-19
Form 5500, Item 27(d) - Schedule of Reportable
Transactions for the year ended December 31, 1996 20
PAGE
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee of
Policy Management Systems Corporation
401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for
plan benefits of the Policy Management Systems Corporation 401(k) Retirement
Savings Plan (the "Plan") as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for plan 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, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the Plan
at December 31, 1996 and 1995, and the changes in net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions 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 fund information in
the statement of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in our 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.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 9, 1997
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
As of December 31, 1996
U.S. Puritan Magellan Short-Int. PMSC
Loan Government Mutual Mutual Bond Stock
Fund Reserves Fund Fund Fund (A) Fund
ASSETS
Investments, at current value:
Short-term investments $ 10,396 $ 8,962 $ 130,375 $ 11,503 $ 15,663
Mutual Funds 19,047,561 18,032,059 23,848,712 3,241,251
Common Stock 12,372,653
Total Investments 19,057,957 18,041,021 23,979,087 3,252,754 12,388,316
Receivables:
Loans receivable $3,066,650
Employer contributions
receivable 166,602
Total Receivables 3,066,650 166,602
Cash 4,050 83,657 (879) (449) 49 (507)
Total Assets 3,070,700 19,141,614 18,040,142 23,978,638 3,252,803 12,554,411
LIABILITIES
Accounts payable 136,153 13,063
Total Liabilities 136,153 13,063
Net assets available
for plan benefits $3,070,700 $19,005,461 $18,040,142 $23,978,638 $3,252,803 $12,541,348
<FN>
Continued on next page
(A) Formerly called "Fixed Income Fund"
The accompanying notes are an integral part of these financial statements.
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
As of December 31, 1996
(continued)
Smith Barney Smith Barney Smith Barney
Forfeiture Fundamental Int'l Equities
Account Account Account Fund Total
ASSETS
Investments, at current value:
Short-term investments $ 2,182 $ 7 $ 4 $ 168 $ 179,260
Mutual Funds 4,539,952 2,432,104 4,409,003 75,550,642
Common Stock 159,555 12,532,208
Total Investments 161,737 4,539,959 2,432,108 4,409,171 88,262,110
Receivables:
Loans receivable 3,066,650
Employer contributions
receivable 166,602
Total Receivables 3,233,252
Cash 11 63,682 1,716 33 151,363
Total Assets 161,748 4,603,641 2,433,824 4,409,204 91,646,725
LIABILITIES
Accounts payable 63,657 1,702 214,575
Total Liabilities 63,657 1,702 214,575
Net assets available
for plan benefits $161,748 $4,539,984 $2,432,122 $4,409,204 $91,432,150
<FN>
The accompanying notes are an integral part of these financial statements.
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
As of December 31, 1995
U.S. Puritan Magellan PMSC
Loan Government Mutual Mutual Stock
Fund Reserves Fund Fund Fund
ASSETS
Investments, at current value:
Short-term investments $ 14,447 $ 1,115 $ 1,508 $ 4,351
Mutual Funds 23,800,700 15,535,725 21,147,061
Common Stock 10,090,844
Total Investments 23,815,147 15,536,840 21,148,569 10,095,195
Receivables:
Loans receivable $2,338,035
Employer contributions
receivable 264,413
Other receivables 25,360
Total Receivables 2,338,035 25,360 264,413
Cash 95,763
Total Assets 2,338,035 23,936,270 15,536,840 21,148,569 10,359,608
LIABILITIES
Accounts payable 283,597
Other 658 627 4,006
Total Liabilities 283,597 658 627 4,006
Net assets available
for plan benefits $2,338,035 $23,652,673 $15,536,182 $21,147,942 $10,355,602
<FN>
Continued on next page
The accompanying notes are an integral part of these financial statements.
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
As of December 31, 1995
(continued)
Fixed Smith Barney Smith Barney Smith Barney
Income Forfeiture Fundamental Int'l Equities
Fund Account Account Account Fund Total
ASSETS
Investments, at current value:
Short-term investments $ 91 $ 14,616 $ 97 $ 19 $ 14 $ 36,258
Mutual Funds 3,171,168 3,040,941 1,645,408 1,942,449 70,283,452
Common Stock 799 10,091,643
Total Investments 3,171,259 15,415 3,041,038 1,645,427 1,942,463 80,411,353
Receivables:
Loans receivable 2,338,035
Employer contributions
receivable 264,413
Other receivables 16,338 41,698
Total Receivables 16,338 2,644,146
Cash 33 187,616 1,106 8 284,526
Total Assets 3,171,292 15,415 3,228,654 1,662,871 1,942,471 83,340,025
LIABILITIES
Accounts payable 187,603 17,438 488,638
Other 5,840 11,131
Total Liabilities 5,840 187,603 17,438 499,769
Net assets available
for plan benefits $3,171,292 $ 9,575 $3,041,051 $1,645,433 $1,942,471 $82,840,256
<FN>
The accompanying notes are an integral part of these financial statements.
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
For the year ended December 31, 1996
U.S. Puritan Magellan Short-Int. PMSC
Loan Government Mutual Mutual Bond Stock
Fund Reserves Fund Fund Fund (A) Fund
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ 312,374 $(1,117,737) $ (82,415) $ 204,150
Dividends and interest $ 1,040,707 2,058,216 3,655,358 218,613 3,405
1,040,707 2,370,590 2,537,621 136,198 207,555
Cash Contributions:
Employer 3,282,548
Employee 793,927 1,935,134 2,894,473 458,763 224,792
793,927 1,935,124 2,894,473 458,763 3,507,340
Transfers $ (8,900) (2,954,159) (86,647) (124,485) (216,506) (225,268)
Loan repayments (690,062) 103,839 250,600 368,709 63,555 45,976
Securities settlement 239,366
Other additions 97,668 11,654 13,870
Total Additions (698,962) (1,015,686) 4,567,345 5,687,972 442,010 3,788,839
Deductions (Additions) from net
assets attributed to:
Distributions 177,815 2,805,675 1,788,953 2,407,635 292,227 891,649
Forfeitures 18,025 (2,067) (5,657) (5,615) 506,516
Loan disbursements (1,596,492) 498,779 259,324 440,401 68,249 184,123
Other deductions (12,950) 309,047 17,175 14,897 5,638 20,805
Total Deductions (1,431,627) 3,631,526 2,063,385 2,857,276 360,499 1,603,093
Net increases (decreases) 732,665 (4,647,212) 2,503,960 2,830,696 81,511 2,185,746
Net assets available for plan benefits
Beginning of year 2,338,035 23,652,673 15,536,182 21,147,942 3,171,292 10,355,602
End of year $3,070,700 $19,005,461 $18,040,142 $23,978,638 $3,252,803 $12,541,348
<FN>
Continued on next page
(A) Formerly called "Fixed Income Fund"
The accompanying notes are an integral part of these financial statements.
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
For the year ended December 31, 1996
(continued)
Smith Barney Smith Barney Smith Barney
Forfeiture Fundamental Int'l Equities
Account Account Account Fund Total
Additions to net assets
attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ (28,021) $ 410,227 $ 221,973 $ (309,334) $ (388,783)
Dividends and interest 1,993 252,892 18,399 88,416 7,337,999
(26,028) 663,119 240,372 (220,918) 6,949,216
Cash Contributions:
Employer 3,282,548
Employee 342,539 209,420 361,771 7,220,819
342,539 209,420 361,771 10,503,367
Transfers (315,801) 836,073 481,677 2,614,016 0
Loan repayments 47,363 30,528 50,743 271,251
Securities settlement 239,366
Other additions 604 679 679 679 125,833
Total Additions (341,225) 1,889,773 962,676 2,806,291 18,089,033
Deductions (Additions) from net
assets attributed to:
Distributions 319,434 135,661 289,812 9,108,861
Forfeitures (510,554) (230) (40) (378) 0
Loan disbursements 65,248 36,852 43,516 0
Other deductions 17,156 6,388 3,514 6,608 388,278
Total Deductions (493,398) 390,840 175,987 339,558 9,497,139
Net increases (decreases) 152,173 1,498,933 786,689 2,466,733 8,591,894
Net assets available for plan benefits
Beginning of year 9,575 3,041,051 1,645,433 1,942,471 82,840,256
End of year $ 161,748 $4,539,984 $ 2,432,122 $4,409,204 $91,432,150
<FN>
The accompanying notes are an integral part of these financial statements.
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
For the year ended December 31, 1995
U.S. Puritan Magellan PMSC
Loan Government Mutual Mutual Bond Stock
Fund Reserves Fund Fund Fund Fund
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ 1,475,233 $ 3,320,061 $ 5,846 $ 701,536
Dividends and interest $ 1,042,659 733,059 1,203,777 (4,738) 5,661
1,042,659 2,208,292 4,523,838 1,108 707,197
Cash Contributions:
Employer 1,566,673 2,009,437
Employee 1,965,235 1,725,860 2,381,734 56,086
3,531,908 1,725,860 2,381,734 2,065,523
Transfers $ (35,283) (10,848,148) 2,579,281 3,488,199 (92,066) 1,871,559
Net assets received from
other benefit plans 27,708,300 2,598,711 2,925,355 79,123
Loan repayments (256,026) 83,639 84,295 108,725 8,772
Other additions 60,936 64,840
Total Additions (291,309) 21,579,294 9,196,439 13,427,851 (90,958) 4,797,014
Deductions (Additions) from net
assets attributed to:
Distributions 80,663 3,207,829 1,376,964 1,940,279 20,941 889,268
Forfeitures 34,202 1,942 2,311 149,506
Loan disbursements (2,321,346) 907,430 397,107 579,779 238,638
Other deductions (9,920) 228,500 27,584 231,265 26,266
Total Deductions (2,250,603) 4,377,961 1,803,597 2,753,634 20,941 1,303,678
Net increases (decreases) 1,959,294 17,201,333 7,392,842 10,674,217 (111,899) 3,493,336
Net assets available for plan benefits
Beginning of year 378,741 6,451,340 8,143,340 10,473,725 111,899 6,862,266
End of year $2,338,035 $23,652,673 $15,536,182 $21,147,942 $ 0$10,355,602
<FN>
Continued on next page
The accompanying notes are an integral part of these financial statements.
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
For the year ended December 31, 1995
(continued)
Fixed Smith Barney Smith Barney Smith Barney
Income Forfeiture Fundamental Int'l Equities
Fund Account Account Account Fund Total
Additions to net assets
attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ 141,617 $ (4,704) $ 16,782 $ (9,308) $ 216,046 $ 5,863,109
Dividends and interest 172,835 5,153 187,796 16,975 44,854 3,408,031
314,452 449 204,578 7,667 260,900 9,271,140
Cash Contributions:
Employer 3,576,110
Employee 424,197 59,807 33,636 39,161 6,685,716
424,197 59,807 33,636 39,161 10,261,826
Transfers (95,072) 116,926 1,073,411 885,850 1,055,343 0
Net assets received from
other benefit plans 950,615 1,794,758 743,836 638,378 37,439,076
Loan repayments 19,601 3,784 2,351 2,324 57,465
Other additions 125,776
Total Additions 1,613,793 117,375 3,136,338 1,673,340 1,996,106 57,155,283
Deductions (Additions) from net
assets attributed to:
Distributions 280,161 5,875 36,975 2,763 23,279 7,864,997
Forfeitures 668 (188,629) 0
Loan disbursements 89,969 55,370 23,889 29,164 0
Other deductions 6,129 559,281 2,942 1,255 1,192 1,074,494
Total Deductions 376,927 376,527 95,287 27,907 53,635 8,939,491
Net increases (decreases) 1,236,866 (259,152) 3,041,051 1,645,433 1,942,471 48,215,792
Net assets available for plan benefits
Beginning of year 1,934,426 268,727 0 0 0 34,624,464
End of year $3,171,292 $ 9,575 $3,041,051 $ 1,645,433 $1,942,471 $82,840,256
<FN>
The accompanying notes are an integral part of these financial statements.
PAGE
1. ESTABLISHMENT OF PLAN
The Board of Directors of Policy Management Systems Corporation (the
"Company") established the Policy Management Systems Corporation 401(k)
Retirement Savings Plan (formerly the Policy Management Systems
Corporation 401(k) Retirement Plan) (the "Plan") to provide a before-tax
savings retirement program for all eligible employees of the Company. The
Plan, which became effective on April 1, 1990, replaced the retirement
plan portion of the Stock Purchase Savings Program for Employees of Policy
Management Systems Corporation. Effective January 1, 1994, the retirement
plan of Cybertek Corporation, a wholly-owned subsidiary of the Company,
was merged into the Plan and all assets available to Participants were
transferred into the Plan. Effective January 1, 1995, the PMS, Inc. Profit
- Sharing/401(k) Savings Plan was merged into the Plan and all assets
available to Participants were transferred into the Plan. Effective July
1, 1995 the Policy Management Systems Corporation Profit Sharing Plan and
Trust was merged into the Plan and all assets available to Participants
were transferred into the Plan. The Plan is subject to the requirements
of the Employee Retirement Income Security Act of 1974 (ERISA).
2. PLAN DESCRIPTION
General
The following description of the Plan is provided for general information
purposes only. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
Eligibility
All employees of the Company and its participating affiliates, who are U.S
citizens or U.S. residents, who have attained the age of 18, and who have
completed any six-consecutive-month period of employment are eligible to
participate in the Plan. A Participant who chooses not to enroll in the
Plan when they are first eligible may elect to participate at a later
date, in accordance with the terms of the Plan.
Employee Contributions
Effective January 1, 1995, Participants may contribute in 1% increments up
to 6% of eligible compensation as either Basic Before-Tax or Basic After-
Tax Contributions to the Plan, and may contribute an additional 9% of
eligible compensation as either Additional Before-Tax or Additional After-
Tax Contributions to the Plan, not to exceed a total aggregate annual
Contribution to the Plan of greater than 15% of eligible compensation. The
maximum Before-Tax Contribution allowed by the Internal Revenue Code of
1986, as amended (the "Code"), for 1996 was $9,500.
Employer Matching Contributions
Effective January 1, 1995, the Company began matching 100% of the first 3%
and 50% of the next 3% of the Participant's Basic Before-Tax or Basic
After-Tax Contributions, but not both. Also, effective July 1, 1995,
Employer Matching Contributions are invested in Policy Management Systems
Corporation common stock.
Allocations
Participant's accounts are credited with the actual income derived from
the investments in such accounts and with the actual expenses related to
such accounts.
Investment Elections
Each Participant is required to submit an election form to the Plan
Administrator designating the allocation of the Participant's
contributions among the Plan's investment funds in multiples of 5%. In
addition, Participants may change the investment of contributions and may
move their vested balances among investment funds by phone at specified
intervals during the year.
In addition to the contributions specified above, Participants who receive
a qualified distribution under section 401(a) of the Code, from any other
tax qualified plan, may have all or part of such distribution transferred
into the Plan. Such rollover contributions are subject to tax regulations
imposed by the Code.
Effective January 1, 1995, the Series EE Bond Fund was closed for
investment. The assets were allocated among the Plan's other investment
funds in accordance with the respective participant elections. Also,
effective July 1, 1995, the Smith Barney funds were added as investment
electives of the Plan.
PAGE
Vesting
A Participant is always 100% vested in his or her Before-Tax Contribution
Accounts, After-Tax Contribution Accounts and Rollover Account. A
Participant will generally become fully vested in his or her Employer
Matching Contribution Account when the first of the following occurs: the
Participant obtains five years of Credited Service; the Participant
reaches his or her Normal Retirement Date; the Participant becomes
Permanently Disabled; or on the date of the Participant's death.
Forfeiture Allocations
All Participant forfeitures are used to reduce future Employer Matching
Contributions to the Plan.
Benefit Payments
The Participant's After-Tax Contributions may be withdrawn at any time
upon written request of the Participant. In addition, a Participant may
withdraw all or any part of his or her vested Employer Contributions
transferred to the Plan from the Stock Purchase Savings Program and the
vested Employer Matching Contributions on his or her Basic After-Tax
Contributions, but only to the extent that such contributions have been in
the Plan or the Stock Purchase Savings Program for at least two full Plan
Years after the Plan Year in which such contributions were made.
Loans
Participants may apply for loans greater than $1,000 from the Plan,
collateralized by their account balances and repaid through payroll
deduction generally subject to the following terms:
1) The total loans of any Participant at any point in time shall not
exceed the lesser of (i) 50% of the Participant's vested Account
balance, or (ii) $50,000 adjusted on the volume of loan outstanding
to the Participant during the previous one-year period.
2) Loans may not be made in such a manner as to favor Highly
Compensated Employees, Officers or Shareholders.
3) No Participant shall be permitted to have more than one loan from
the Plan issued and outstanding at any time, and no Participant
shall be issued a new loan within six months of repayment of a Plan
loan.
PAGE
4) Interest charged on loans is determined by the Committee at a
rate commensurate with interest rates charged for similar loans under
general market conditions.
5) The length and terms of repayment may not exceed 5 years, unless the
purpose of the loan is for the purchase of the Participant's
principal residence, in which case the loan term may be extended to
ten years.
6) All amounts repaid are credited to the Participant's account.
Administrative Expenses
Administrative expenses of the Plan may be paid out of Plan assets if not
paid by the Company. Administrative expenses paid by the Plan for the
years ended December 31, 1996 and 1995 were $388,278 and $720,911,
respectively.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis in accordance with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, as well as the reported amounts of additions to and
deductions from net assets available for plan benefits during the
reporting period. Actual results could differ from those estimates.
Accounting for Benefit Distributions
In accordance with guidance issued by the American Institute of Certified
Public Accountants in 1993, the Plan accounts for distributions such that
all amounts elected to be withdrawn and distributed from the Plan by
Participants are not recorded as a liability in the Statement of Net
Assets Available for Plan Benefits. As of December 31, 1996 and 1995,
$360,819 and $815,161 have been allocated to accounts of persons who have
withdrawn from participation in the earnings and operations of the Plan,
but for which disbursement of those funds from the Plan has not yet been
made. The following is a reconciliation to the amounts reported on Form
5500:
Net assets available for plan 1996 1995
benefits as stated in the
financial statements $91,432,150 $82,840,256
Less: Distributions payable (360,819) (815,161)
Net assets available for plan
benefits per Form 5500 $91,071,331 $82,025,095
In addition, the financial statements differ from the Form 5500 by the
same amount for distributions on the Statement of Changes in Net Assets.
Investments
The Plan invests in open-ended funds managed by either Fidelity
Investments, First Union National Bank, Smith Barney or Evergreen with the
exception of the PMSC Stock Fund and Forfeiture Fund. Each fund is valued
at quoted market prices to determine a current fund value. Investments in
securities for which exchange quotations are readily available are valued
at the last sale price, or, if no sale, at the closing bid price. Debt
securities are valued in the same manner or in some other manner, if, in the
opinion of the Board of Trustees, such other manner would more accurately
reflect the fair value of such debt securities. Short-term investments
(consisting primarily of money-market funds) are valued either at amortized cost
or original cost plus accrued interest, both of which approximate market value.
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Certain amounts in the prior period financial statements have been
reclassified to conform to current year presentation.
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated January 26, 1996, that the Plan is designed in accordance
with Sections 401(k) and 401(a) of the Code. The Plan administrator
believes that the Plan is written and is currently being operated in
compliance with the applicable requirements of the Code.
5. TERMINATION OF PLAN
The Company expects and intends to continue the Plan in force
indefinitely, but has reserved the right to amend or terminate the Plan as
necessary. If the Plan were to be terminated, Participants would become
fully vested and all assets of the Plan would be distributed to the
individual Participants based upon the vested balances in their individual
accounts at the date of termination.
PAGE
6. RELATED PARTY TRANSACTIONS
The Plan purchases, on behalf of Participants, shares of the Company's
common stock in accordance with individual Participant's investment
elections. During the Plan year ended December 31, 1996, the Plan
purchased 109,549 shares at an aggregate cost of $4,571,197 and sold
45,586 shares for aggregate proceeds of $2,084,743 and realized losses of
$93,135. During the Plan year ended December 31, 1995, the Plan purchased
105,948 shares at an aggregate cost of $5,200,287 and sold 48,025 shares
for aggregate proceeds of $2,196,222 and realized gains of $65,081.
The Plan also had 271,701 and 211,898 shares of the Company's common sotck
with a fair value of $12,532,208 and $10,091,643 at December 31, 1996 and
1995, respectively.
7. SECURITIES SETTLEMENT
In December 1994, the Company reached an agreement, which was subsequently
approved on May 26, 1995, by the United Stated District Court for the
District of South Carolina, to settle its shareholder class action. The
Plan, as an eligible shareholder, received $239,366 as its portion of the
settlement in November 1996. The proceeds were received by the PMSC Stock
Fund, invested in PMSC stock and allocated on a pro rata basis to eligible
participants.
PAGE
SUPPLEMENTAL SCHEDULES
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(a)-SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
December 31, 1996
Current
Identity of Issue Description of Investment Cost Value
Fidelity 19,047,561 units Fidelity
Retirement Government Money Market Trust
Money Market Portfolio $19,047,561 $19,047,561
Reserves
10,396 units Valiant General
Fund #62 10,396 10,396
Fidelity 1,045,943 units Fidelity Puritan
Puritan Fund Fund, Inc. 16,623,570 18,032,059
8,962 units Valiant General
Fund #62 8,962 8,962
Fidelity 295,706 units Fidelity Magellan
Magellan Fund Fund, inc. 22,166,902 23,848,712
130,375 units Valiant General
Fund #62 130,375 130,375
PMSC 268,242 shares Policy Management
Stock Fund Systems Corporation Common Stock * 11,914,180 12,372,653
15,663 units Valiant General
Fund #62 15,663 15,663
Evergreen Short- 327,069 units Evergree
Intermediate Bond Acct. Short-Int. Bond Account 3,297,691 3,241,251
11,503 units Valiant General
Fund #62 11,503 11,503
Forfeiture 3,459 shares Policy Management Systems
Account Corporation Common Stock * 164,736 159,555
2,182 units Valiant General
Fund #62 2,182 2,182
Loan 3,066,650 units participant loans
Fund bearing interest rates from 7.00%
to 12.25% with varying maturities
from 18 to 360 months 3,066,650 3,066,650
Smith Barney 125,431 units Smith Barney
Int'l Account International Equity Fund 2,214,042 2,432,104
4 units Valiant General
Fund #62 4 4
<FN>
Continued on next page
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(a)-SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
December 31, 1996
(continued)
Current
Identity of Issue Description of Investment Cost Value
Smith Barney 156,848 units Smith Barney Special
Equities Account Equities Fund 4,535,983 4,409,003
168 units Valiant General
Fund #62 168 168
Smith Barney 478,898 units Smith Barney
Fundamental Value Acct. Fundamental Value Fund 4,143,677 4,539,952
7 units Valiant General
Fund #62 7 7
<FN>
* Indicates party-in-interest to the Plan.
Note: The Valiant General Fund #62 represents funds held in a money market account for the purpose
of paying disbursements related to the purchasing and selling of investments.
PAGE
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Value of
Identity Asset on
of Party Description of Number of Selling Cost of Transaction Net Gain
Involved Assets Transactions Price Asset Date (Loss)
Single Transactions Exceeding 5% of Net Assets
There were no single transactions exceeding 5% of Net Assets for 1996.
Series of Transactions Exceeding 5% of Net Assets (Exclusive of the Above Transactions)
Fidelity
Retirement Gov't Money Market
Money Market Account
Portfolio Shares 43 1,763,696 1,763,696
Fidelity
Retirement Gov't Money Market
Money Market Account
Portfolio Shares 58 6,516,835 6,516,835 6,516,835 0
Fidelity Puritan Mutual Fund
Fund Shares 44 4,407,096 4,566,075
Fidelity Puritan Mutual Fund
Fund Shares 38 2,223,135 2,035,642 2,233,034 187,493
Fidelity Magellan Mutual Fund
Fund Shares 42 7,333,044 8,056,583
Fidelity Magellan Mutual Fund
Fund Shares 38 3,513,660 3,357,515 3,533,347 156,145
PMSC Stock PMSC Common
Fund Stock 46 4,571,197 4,511,931
PMSC Stock PMSC Common
Fund Stock 53 2,084,743 2,109,255 2,092,793 (24,513)
Money Market
Valiant General Account
Fund #62 Shares * 29,498,627 29,498,627
Money Market
Valiant General Account
Fund #62 Shares * 29,355,625 29,355,625 29,355,625 0
<FN>
*Omitted from schedule by Trustee.