1
EXHIBIT 99.00
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
X OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED JUNE 30, 1998
- ----
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM _________
TO ___________________ COMMISSION FILE NUMBER ________________________
Profit Sharing Plan of Comshare, Incorporated
Full Title of the plan.
Comshare, Incorporated, 555 Briarwood Circle, Ann Arbor, MI 48108
Name of issuer of securities held pursuant to the
plan and the address of its principal executive offices.
2
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
FINANCIAL STATEMENTS AS OF JUNE 30, 1998 AND 1997
AND FOR THE THREE YEARS ENDED JUNE 30, 1998
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator
of the Profit Sharing Plan
of Comshare, Incorporated:
We have audited the accompanying statements of net assets available for benefits
of the PROFIT SHARING PLAN OF COMSHARE, INCORPORATED (the "Plan") as of June 30,
1998 and 1997, and the related statements of changes in net assets available for
benefits for the years ended June 30, 1998, 1997 and 1996. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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 benefits of the Plan as of
June 30, 1998 and 1997 and the changes in net assets available for benefits for
the years ended June 30, 1998, 1997 and 1996 in conformity with generally
accepted accounting principles.
Our audits were 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 purposes
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 supplemental schedules have been
subjected to the auditing procedures applied in the audits 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.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
September 24, 1998.
4
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Statements of Net Assets Available for Benefits as of
June 30, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits for the Years Ended
June 30, 1998, 1997 and 1996
Notes to Financial Statements
SCHEDULES
I. Item 27a - Schedule of Assets Held
for Investment Purposes as of June 30, 1998
II. Item 27d - Schedule of Reportable Transactions for the Year Ended June
30, 1998
5
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF JUNE 30, 1998
Vanguard
Vanguard Vanguard Vanguard Vanguard Vanguard International
Money Market- Bond Index Index 500 Wellington U.S. Growth Value Comshare
Prime Portfolio Fund Portfolio Fund Portfolio Portfolio Stock Fund
--------------- ------------ ----------- ----------- ------------ ------------- -----------
RECEIVABLES:
Employer's contribution $ 35,303 $ 22,020 $ 135,376 $ 47,014 $ 81,956 $ 20,911 $ 17,077
Participants' contributions 12,950 7,476 54,180 17,467 30,458 6,565 3,122
Accrued loan repayments 2,337 1,245 5,589 2,159 1,567 117 994
----------- ----------- ----------- ----------- ----------- ----------- -----------
50,590 30,741 195,145 66,640 113,981 27,593 21,193
INVESTMENTS, at market:
Registered Investment Companies 2,175,116 2,037,147 14,142,676 3,063,642 4,139,597 1,162,573 --
Company Stock Fund -- -- -- -- -- -- 1,967,236
Loans to participants -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
2,175,116 2,037,147 14,142,676 3,063,642 4,139,597 1,162,573 1,967,236
NET ASSETS AVAILABLE
FOR BENEFITS $ 2,225,706 $ 2,067,888 $14,337,821 $ 3,130,282 $ 4,253,578 $ 1,190,166 $ 1,988,429
=========== =========== =========== =========== =========== =========== ===========
Loan 1998
Fund Total
---- -----
RECEIVABLES:
Employer's contribution $ -- $ 359,657
Participants' contributions -- 132,218
Accrued loan repayments -- 14,008
----------- -----------
505,883
INVESTMENTS, at market:
Registered Investment Companies -- 26,720,751
Company Stock Fund -- 1,967,236
Loans to participants 613,565 613,565
----------- -----------
613,565 29,301,552
NET ASSETS AVAILABLE
FOR BENEFITS $ 613,565 $29,807,435
=========== ===========
The accompanying notes are an integral part of this statement.
6
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF JUNE 30, 1997
Vanguard
Vanguard Vanguard Vanguard Vanguard Vanguard International
Money Market- Bond Index Index 500 Wellington U.S. Growth Value Comshare
Prime Portfolio Fund Portfolio Fund Portfolio Portfolio Stock Fund
--------------- ---------- --------- ---------- --------- ---------- ----------
RECEIVABLES:
Employer's contribution $ 60,999 $ 26,017 $ 137,162 $ 47,505 $ 64,742 $ 16,580 $ 14,693
Participants' contributions 13,511 7,250 49,207 18,990 28,971 8,436 8,476
Accrued loan repayments 3,178 923 6,398 2,304 3,076 522 1,725
----------- ----------- ----------- ----------- ----------- ----------- -----------
77,688 34,190 192,767 68,799 96,789 25,538 24,894
INVESTMENTS, at market:
Registered Investment Companies 2,721,591 1,395,409 13,291,055 2,465,188 3,314,385 860,658 --
Company Stock Fund -- -- -- -- -- -- 1,727,122
Loans to participants -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
2,721,591 1,395,409 13,291,055 2,465,188 3,314,385 860,658 1,727,122
NET ASSETS AVAILABLE
FOR BENEFITS $ 2,799,279 $ 1,429,599 $13,483,822 $ 2,533,987 $ 3,411,174 $ 886,196 $ 1,752,016
=========== =========== =========== =========== =========== =========== ===========
Loan 1997
Fund Total
---- -----
RECEIVABLES:
Employer's contribution $ -- $ 367,698
Participants' contributions -- 134,841
Accrued loan repayments -- 18,126
----------- -----------
-- 520,665
INVESTMENTS, at market:
Registered Investment Companies -- 24,048,286
Company Stock Fund -- 1,727,122
Loans to participants 718,567 718,567
----------- -----------
718,567 26,493,975
NET ASSETS AVAILABLE
FOR BENEFITS $ 718,567 $27,014,640
=========== ===========
The accompanying notes are an integral part of this statement.
7
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1998
Vanguard Vanguard Vanguard Vanguard Vanguard
Money Market- Bond Index Index 500 Wellington U.S. Growth
INVESTMENT INCOME: Prime Portfolio Fund Portfolio Fund Portfolio
--------------- ---------- --------- ---------- ---------
Unrealized appreciation (depreciation)
of investments $ -- $ 47,812 $ 2,862,094 $ 212,265 $ 803,392
Interest and dividend income 124,206 100,370 288,750 225,350 114,946
Realized gain (loss) on investments -- 7,799 435,455 37,457 92,904
------------ ------------ ------------ ------------ ------------
124,206 155,981 3,586,299 475,072 1,011,242
CONTRIBUTIONS:
Employer 77,475 52,477 308,122 104,902 175,660
Participants 154,792 99,246 683,480 227,131 451,792
------------ ------------ ------------ ------------ ------------
232,267 151,723 991,602 332,033 627,452
LOAN ORIGINATIONS (25,941) (32,490) (60,753) (31,662) (12,979)
LOAN REPAYMENTS 42,235 18,861 91,026 42,569 35,538
INTERFUND TRANSFERS, NET (549,030) 564,764 (1,836,406) 328,025 360,978
DISTRIBUTIONS TO PARTICIPANTS (397,310) (220,550) (1,917,769) (549,742) (1,179,827)
------------ ------------ ------------ ------------ ------------
Increase (decrease) in Net Assets (573,573) 638,289 853,999 596,295 842,404
Available for Benefits
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 2,799,279 1,429,599 13,483,822 2,533,987 3,411,174
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 2,225,706 $ 2,067,888 $ 14,337,821 $ 3,130,282 $ 4,253,578
============ ============ ============ ============ ============
Vanguard
International
Value Comshare Loan 1998
INVESTMENT INCOME: Portfolio Stock Fund Fund Total
------------- ---------- ---- -----
Unrealized appreciation (depreciation)
of investments $ (53,849) $ (353,282) $ -- $ 3,518,432
Interest and dividend income 86,000 -- 58,693 998,315
Realized gain (loss) on investments (29,857) (85,949) -- 457,809
------------ ------------ ------------ ------------
2,294 (439,231) 58,693 4,974,556
CONTRIBUTIONS:
Employer 42,866 29,363 -- 790,865
Participants 104,965 65,310 -- 1,786,716
------------ ------------ ------------ ------------
147,831 94,673 -- 2,577,581
LOAN ORIGINATIONS (2,587) (11,280) 177,692 --
LOAN REPAYMENTS 5,401 13,762 (249,392) --
INTERFUND TRANSFERS, NET 382,613 749,056 -- --
DISTRIBUTIONS TO PARTICIPANTS (231,582) (170,567) (91,995) (4,759,342)
------------ ------------ ------------ ------------
Increase (decrease) in Net Assets 303,970 236,413 (105,002) 2,792,795
Available for Benefits
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 886,196 1,752,016 718,567 27,014,640
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 1,190,166 $ 1,988,429 $ 613,565 $ 29,807,435
============ ============ ============ ============
The accompanying notes are an integral part of this statement.
8
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1997
Vanguard Vanguard Vanguard Vanguard Vanguard
Money Market- Bond Index Index 500 Wellington U.S. Growth
INVESTMENT INCOME: Prime Portfolio Fund Portfolio Fund Portfolio
--------------- ---------- --------- ---------- ---------
Unrealized appreciation (depreciation)
of investments $ -- $ 13,776 $ 2,988,259 $ 292,461 $ 486,517
Interest and dividend income 158,926 99,058 257,917 180,140 260,689
Realized gain (loss) on investments -- 3,367 147,785 22,078 57,140
------------ ------------ ------------ ------------ ------------
158,926 116,201 3,393,961 494,679 804,346
CONTRIBUTIONS:
Employer 109,690 59,534 321,794 111,672 152,579
Participants 193,117 114,355 715,440 279,178 442,913
------------ ------------ ------------ ------------ ------------
302,807 173,889 1,037,234 390,850 595,492
LOAN ORIGINATIONS (79,667) (23,769) (135,939) (48,973) (53,371)
LOAN REPAYMENTS 77,471 19,113 95,655 36,872 42,061
INTERFUND TRANSFERS, NET 843,753 (422,305) (363,905) (449,832) 308,703
DISTRIBUTIONS TO PARTICIPANTS (1,640,541) (185,293) (1,246,043) (323,371) (1,408,716)
------------ ------------ ------------ ------------ ------------
Increase (Decrease) in Net Assets
Available for Benefits (337,251) (322,164) 2,780,963 100,225 288,515
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 3,136,530 1,751,763 10,702,859 2,433,762 3,122,659
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 2,799,279 $ 1,429,599 $ 13,483,822 $ 2,533,987 $ 3,411,174
============ ============ ============ ============ ============
Vanguard
International
Value Comshare Loan 1997
INVESTMENT INCOME: Portfolio Stock Fund Fund Total
------------- ---------- ---- -----
Unrealized appreciation (depreciation)
of investments $ (10,758) $ (1,581,935) $ -- $ 2,188,320
Interest and dividend income 188,680 -- 67,303 1,212,713
Realized gain (loss) on investments (59,278) (749,905) -- (578,813)
------------ ------------ ------------ ------------
118,644 (2,331,840) 67,303 2,822,220
CONTRIBUTIONS:
Employer 41,359 22,063 -- 818,691
Participants 136,118 89,656 -- 1,970,777
------------ ------------ ------------ ------------
177,477 111,719 -- 2,789,468
LOAN ORIGINATIONS (7,120) (58,658) 407,497
LOAN REPAYMENTS 18,271 34,110 (323,553) --
INTERFUND TRANSFERS, NET (199,170) 282,756 -- --
DISTRIBUTIONS TO PARTICIPANTS (342,947) (267,340) (68,342) (5,482,593)
------------ ------------ ------------ ------------
Increase (Decrease) in Net Assets
Available for Benefits (234,845) (2,229,253) 82,905 129,095
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 1,121,041 3,981,269 635,662 26,885,545
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 886,196 $ 1,752,016 $ 718,567 $ 27,014,640
============ ============ ============ ============
The accompanying notes are an integral part of this statement.
9
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1996
Vanguard Vanguard Vanguard Vanguard Vanguard
Money Market- Bond Index Index 500 Wellington U.S. Growth
INVESTMENT INCOME: Prime Portfolio Fund Portfolio Fund Portfolio
--------------- ---------- --------- ---------- -----------
Unrealized appreciation (depreciation)
of investments $ -- $ (30,758) $ 1,674,861 $ 196,661 $ 472,563
Interest and dividend income 178,792 107,802 219,446 120,986 82,532
Realized gain on investments -- 937 141,928 47,203 31,118
------------ ------------ ------------ ------------ ------------
178,792 77,981 2,036,235 364,850 586,213
CONTRIBUTIONS:
Employer 97,516 95,724 434,895 180,635 156,646
Participants 242,547 166,416 587,678 265,954 238,877
------------ ------------ ------------ ------------ ------------
340,063 262,140 1,022,573 446,589 395,523
TRANSFER OF ASSETS FROM
OTHER PLANS -- -- -- -- --
LOAN ORIGINATIONS (67,911) (36,006) (93,771) (28,087) (28,488)
LOAN REPAYMENTS 77,916 21,485 123,139 50,137 47,321
INTERFUND TRANSFERS, NET (798,285) (168,273) 845,839 152,052 569,951
DISTRIBUTIONS TO PARTICIPANTS (392,844) (63,287) (1,309,944) (475,426) (106,104)
------------ ------------ ------------ ------------ ------------
Increase (decrease) in Net Assets (662,269) 94,040 2,624,071 510,115 1,464,416
Available for Benefits
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 3,798,799 1,657,723 8,078,788 1,923,647 1,658,243
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 3,136,530 $ 1,751,763 $ 10,702,859 $ 2,433,762 $ 3,122,659
============ ============ ============ ============ ============
Vanguard
International
Value Comshare Loan 1996
INVESTMENT INCOME: Portfolio Stock Fund Fund Total
------------- ---------- ---- -----
Unrealized appreciation (depreciation)
of investments $ 10,636 $ 1,424,698 $ -- $ 3,748,661
Interest and dividend income 95,269 -- 53,701 858,528
Realized gain on investments 5,530 177,244 -- 403,960
------------ ------------ ------------ ------------
111,435 1,601,942 53,701 5,011,149
CONTRIBUTIONS:
Employer 56,055 18,778 -- 1,040,249
Participants 109,048 40,930 -- 1,651,450
------------ ------------ ------------ ------------
165,103 59,708 -- 2,691,699
TRANSFER OF ASSETS FROM
OTHER PLANS -- 3,183,333 -- 3,183,333
LOAN ORIGINATIONS (7,880) (61,411) 323,554 --
LOAN REPAYMENTS 21,707 3,122 (344,827) --
INTERFUND TRANSFERS, NET (15,567) (585,717) --
DISTRIBUTIONS TO PARTICIPANTS (56,811) (219,708) (11,190) (2,635,314)
------------ ------------ ------------ ------------
Increase (decrease) in Net Assets 217,987 3,981,269 21,238 8,250,867
Available for Benefits
NET ASSETS AVAILABLE FOR
BENEFITS BEGINNING OF YEAR 903,054 -- 614,424 18,634,678
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS END OF YEAR $ 1,121,041 $ 3,981,269 $ 635,662 $ 26,885,545
============ ============ ============ ============
The accompanying notes are an integral part of this statement.
10
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The information discussed below is a summary only and reference should be
made to the Profit Sharing Plan of Comshare, Incorporated (the "Plan") or
inquiries made of the Plan Administrator for more complete information.
(a) General
The Plan is a defined contribution plan covering eligible
employees of Comshare, Incorporated (the "Company"). The Plan
provides retirement benefits and is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA). The
Company administers the Plan and pays all plan administration
costs, including fees paid to the Trustee. The operating expenses
of the investment advisor are netted from the returns of the
funds.
The Employee Stock Ownership Plan (ESOP) of Comshare, Incorporated
was merged with the Plan effective October 1, 1995. All of the
assets of the ESOP which consisted primarily of Comshare common
stock were transferred to the Plan and placed in the new Comshare
Stock Fund.
(b) Trustee and Investment Advisor
As of June 30, 1998 the Plan held all investments with Vanguard
Fiduciary Trust Company (the "Trustee" and "Investment Advisor").
In accordance with the Trust Agreement, the Trustee holds and
administers the Plan's assets and executes transactions therewith
for the purpose of providing benefits as described in the Plan
agreement. The Investment Advisor executes all investment
transactions.
(c) Management 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 income and expenses during the reporting
period. Actual results could differ from those estimates.
(d) Contributions
The Plan provides for annual employer fixed contributions equal to
2% of eligible participants' compensation. In addition, the
Company may make discretionary contributions, the amount of which
is determined by the Board of Directors. There were no
discretionary contributions in 1998 or 1997. The discretionary
contributions in 1996 were $234,000. To qualify for such employer
contributions for any given Plan year, a participant must be
credited with 1,000 or more hours of service during the Plan year
and be employed by the Company on the last day of the Plan year.
11
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(continued)
Participants may make before-tax contributions, subject to
Internal Revenue Service limitations. Participants are eligible
for employer matching contributions equal to 50% of the
participant's before-tax contributions up to 6% of their
compensation.
(e) Investment Options
As of June 30, 1998 the investment options available to
participants are as follows: (1) Vanguard Money Market - Prime
Portfolio, a money market fund, consisting of investments with
maturities of one year or less; (2) Vanguard Bond Index Fund, an
intermediate bond fund, consisting primarily of investments in
U.S. Government and corporate bonds; (3) Vanguard Index 500
Portfolio, a diversified equity fund, consisting of investments in
the stocks included in the Standard & Poors' 500 Index; (4)
Vanguard Wellington Fund, a balanced fund, consisting of
investments in both stocks and bonds; (5) Vanguard United States
Growth Portfolio, a growth stock fund, consisting of investments
in common stocks of companies with above-average growth potential;
(6) Vanguard International Value Portfolio, an international
equity fund, consisting of investments in stocks of companies
based outside the United States; and (7) Comshare Stock Fund, a
fund investing in the common stock of Comshare, Inc. There are no
guaranteed rates of returns for these funds.
Participants may change their investment election daily for new
contributions or loans repaid to the Plan. Contributions to the
Plan are invested directly by the Trustee into the investment
options based on participant elections.
(f) Vesting and Eligibility
All full-time employees and certain part-time employees are
eligible to make employee before-tax contributions to the Plan at
the beginning of the calendar quarter following the date of hire.
Eligible participants begin sharing in employer contributions
after completing one year of service. As of June 30, 1998 there
were 253 active participants.
Participants vest in employer discretionary contributions
according to a five year schedule. Participants completing at
least 1,000 hours of service in a given plan year are credited
with an increase in vesting for such plan year. Full vesting also
occurs upon retirement at age 65, or after death or total
disability. Employer matching contributions vest according to a
five year schedule (prior to 1/1/98 a seven year schedule was in
effect) for participants with targeted compensation greater than
the social security wage base. All other participants are fully
vested in employer matching contributions.
Employee contributions and employer fixed contributions are always
fully vested.
12
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(continued)
(g) Loans and Hardship Withdrawals
The Plan provides for hardship withdrawals in certain
circumstances and for loans to participants. Loans are limited to
50% of a participant's vested balance, and bear interest
comparable to competitive bank rates for loans of similar purpose.
Loans are repaid through payroll withholding, and typically mature
within five years with a maximum maturity of twenty years. A 10%
excise tax is imposed upon hardship withdrawals.
(h) Benefit Distributions
Distribution of the vested amounts in a participant's account can
be made upon termination of employment or upon retirement.
Benefits are paid, at the option of the participant, in a lump sum
payment or in periodic payments of substantially equal amounts for
a specified number of years, not to exceed ten.
(i) Benefits Payable
As of June 30, 1998 and 1997, the net assets available for
benefits included $6,046,158 and $1,501,183, respectively, for
benefits payable that were due but undistributed to participants
as a result of termination of employment or retirement. These
amounts are shown as liabilities on Form 5500 and are the only
reconciling item between the financial statements and Form 5500.
In June of 1998, Comshare sold its Arthur Retail Business to JDA
Software Group, Incorporated. As a result of the sale, employees
working in the Arthur business were terminated by Comshare and
hired by JDA . Of the benefits payable of $6,046,158 as of June
30, 1998, the portion related to terminated Arthur employees was
$3,578,111.
(j) Allocation to Participants' Accounts
The Trustee maintains the detailed accounts of the net assets
available for benefits in the Plan. The Trustee values the fund
for each investment option at market value on a daily basis. The
net change in each fund's market value for the period is allocated
to the accounts of participants within that fund in the same
proportion that the balance of each participant's account bears to
the total of the fund on the last day of the period. Interest
income on loans to participants is credited directly to the
individual participant's account. Company discretionary
contributions and forfeitures are allocated to eligible
participants' accounts in the same proportion that the
participant's eligible compensation bears to the total eligible
compensation of all participants for the year.
(k) Plan Termination
Although it has not expressed the intent to do so, the Company has
the right to terminate the Plan subject to the provisions of
ERISA. In the event the Plan is terminated, the participants will
become fully vested and will receive the balances in their
individual accounts.
(l) Federal Income Tax Status
The Plan obtained its latest determination letter dated September
16, 1996, in which the Internal Revenue Service stated that the
Plan, as amended and restated effective July 1, 1994, was in
compliance with the applicable requirements of the Internal
Revenue Code (the "Code").
13
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(continued)
The Plan has subsequently been amended and restated effective
October 1, 1995 to reflect the merger with the ESOP. The Plan
administrator is applying for a new determination letter. The Plan
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the
applicable requirements of the Code.
Therefore, they believe that the Plan was qualified and the
related trust was tax-exempt as of the financial statement date.
(m) Forfeitures
Non-vested account balances of terminated employees are forfeited
at the end of the quarter following the date of termination.
Forfeitures were $61,836, $33,657 and $62,517 for the years ended
June 30, 1998, 1997 and 1996, respectively. Forfeitures are
allocated on a pro-rata basis to remaining participants.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting
The financial statements have been prepared on the accrual basis
of accounting.
(b) Investments
Investment transactions are recorded by the Trustee on a trade
date basis. Investments are stated in the Statement of Net Assets
Available for Benefits at market value. Realized gains and losses
on sale of investments and unrealized appreciation (depreciation)
of investments are computed based on the difference between the
market value of the investments at the beginning of the year, or
at the time of purchase if acquired during the year, and the
market value of investments when sold or at Plan year-end.
(3) REPORTABLE TRANSACTIONS
Transactions, or a series of transactions, in excess of 5% of Net Assets
Available for Benefits at the beginning of the Plan year are reportable
transactions under the provisions of ERISA. A list of such transactions is
included in Schedule II.
(4) SUBSEQUENT EVENTS
As of September 24, 1998, the Company's stock was trading at $3.875 per
share compared to $7.8125 per share at June 30, 1998. The investments in
the Comshare Stock Fund consist primarily of the Company's stock which is
valued in the accompanying Statement of Net Assets Available for Benefits
at the June 30, 1998 share price.
14
SCHEDULE I
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
EIN: 38-1804887 PN: 001
ITEM 27a - SCHEDULE OF ASSETS
HELD FOR INVESTMENT PURPOSES AS OF JUNE 30, 1998
(c) Description of Investment
(a) (b) Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
or Similar Party Par or Maturity Value Cost Value
---------------------- ----------------------------- -------------- ------------
MUTUAL FUNDS:
* Vanguard Group 2,175,116 units of Money $ 2,175,116 $ 2,175,116
Market - Prime Portfolio
* Vanguard Group 200,309 units of Bond 1,985,398 2,037,147
Index Fund
* Vanguard Group 134,308 units of Index 7,257,078 14,142,676
500 Portfolio
* Vanguard Group 96,859 units of Wellington 2,447,186 3,063,642
Fund
* Vanguard Group 116,412 units of U.S. Growth 2,779,921 4,139,597
Portfolio
* Vanguard Group 44,407 units of International 1,226,593 1,162,573
Value Portfolio
* Vanguard Group 510,971 units of Comshare Stock 2,066,786 1,967,236
Fund ------------- ------------
Total Mutual Funds 19,938,078 28,687,987
------------- ------------
LOANS:
Loans to plan participants Interest rates range 613,565 613,565
from 7.0% to 12.25%; ------------- ------------
maturing through December, 2016
TOTAL INVESTMENTS $ 20,551,643 $ 29,301,552
============= ============
* Represents a party-in-interest
15
SCHEDULE II
PROFIT SHARING PLAN
OF COMSHARE, INCORPORATED
EIN: 38-1804887 PN: 001
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1998
(a) (b) (c) (d) (g)
Identity of Party Description of Purchase Selling Cost of
Involved Asset Price Price Asset
----------------- -------------- -------- ------- -------
Vanguard Group Vanguard Money Market - Prime Portfolio $ 906,292 N/A N/A
Vanguard Group Vanguard Bond Index Fund- Total Bond Market 986,508 N/A N/A
Vanguard Group Vanguard Index 500 Portfolio 1,958,943 N/A
N/A
Vanguard Group Vanguard U.S. Growth Portfolio 1,351,921 N/A
N/A
Vanguard Group Vanguard Wellington Fund 1,046,064 N/A
N/A
Vanguard Group Comshare Stock Fund 1,338,965 N/A N/A
Vanguard Group Vanguard Money Market - Prime Portfolio N/A $1,452,767 $1,452,767
Vanguard Group Vanguard Bond Index Fund- Total Bond Market N/A 400,381 391,978
Vanguard Group Vanguard Index 500 Portfolio N/A 4,404,871 2,593,837
Vanguard Group Vanguard U.S. Growth Portfolio N/A 1,423,006 995,736
Vanguard Group Vanguard Wellington Fund N/A 697,332 548,509
Vanguard Group Comshare Stock Fund N/A 659,618 717,578
(a) (b) (h)
Identity of Party Description of Current Value
Involved Asset of Asset on (i)
----------------- -------------- Transaction Date Net Gain(Loss)
---------------- --------------
Vanguard Group Vanguard Money Market - Prime Portfolio $ 906,292 N/A
Vanguard Group Vanguard Bond Index Fund- Total Bond Market 986,508 N/A
Vanguard Group Vanguard Index 500 Portfolio 1,958,943 N/A
Vanguard Group Vanguard U.S. Growth Portfolio 1,351,921 N/A
Vanguard Group Vanguard Wellington Fund 1,046,064 N/A
Vanguard Group Comshare Stock Fund 1,338,965 N/A
Vanguard Group Vanguard Money Market - Prime Portfolio 1,452,767 --
Vanguard Group Vanguard Bond Index Fund- Total Bond Market 400,381 $ 8,403
Vanguard Group Vanguard Index 500 Portfolio 4,404,871 1,811,034
Vanguard Group Vanguard U.S. Growth Portfolio 1,423,006 427,270
Vanguard Group Vanguard Wellington Fund 697,332 148,823
Vanguard Group Comshare Stock Fund 659,618 (57,960)
16
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference of our report on the June 30, 1998 financial statements of the Profit
Sharing Plan of Comshare, Incorporated dated September 24, 1998; included in
this Form 11-K into the Company's previously filed Form S-8 and S-3 registration
statements (File No. 33-6730, File No. 33-9755-3, File No. 33-28437, File No.
33-27002, File No. 33-37564, File No. 33-85720, File No. 33-87706, File No.
33-87708, File No. 33-86908 and File No. 33-65109).
Arthur Andersen LLP
Detroit, Michigan
September 25, 1998.