ITEM 1. BUSINESS
National Computer Systems, Inc. ("NCS" or the "Company") is a global information services company, which provides quality services, software and systems for the collection, management and interpretation of data.
The Company's services include data capture and processing, analysis, data management, reporting, network services, software services, hardware maintenance and other professional services to meet customer needs.
The Company's application software products are focused on specific applications within targeted markets, particularly K-12 education, where NCS has a substantial presence.
NCS systems are used to: capture and aggregate data; create a database or datastream; process the data using proprietary software; and analyze, interpret and report results. Data collection systems include optical mark read and image scanning hardware, other data collection technologies, proprietary software and pre-printed forms. The Company utilizes its own products, as well as other technologies, to provide data collection services to those customers who prefer not to purchase systems for internal use.
NCS markets its data collection, management and reporting services and systems within two broad markets: Education and Data Management.
EDUCATION
NCS develops and markets data collection services and systems which provide optical scanning, image-based or electronic data collection and computer processing services for the high accuracy, large volume, complex processing needs of major test publishers, state education agencies, universities and colleges, and local school districts. NCS also develops and markets enterprise application software for the administration and management of curriculum, student instruction, and financial data at the classroom, school, school district and state levels. In addition to its services for training, consulting and project management NCS, more recently, has offered network services, including design, hardware and software procurement, Internet utilization, maintenance and support, network administration and outsourcing for its K-12 customers.
By using the Company's optical scanning and image-based systems and forms, individual school districts can perform in-house student assessment testing applications, including teacher created or administration developed norm- or criterion-referenced tests; administrative applications such as attendance, scheduling, grade reporting and registration; library and inventory management; and financial management and payroll.
The Company's information processing services are also provided in support of federal student financial aid programs for post-secondary education.
DATA MANAGEMENT
NCS develops, markets and manages complex data collection, processing and reporting services and products targeted for certain key applications in the data management market. These applications include sales/marketing applications, such as sales/order entry, billing, quality measurement, product warranty and customer satisfaction surveys and customer data collection; payroll; human resource applications, including applicant tracking, organizational development, employee attitude surveys, benefits enrollment and employee evaluation; telephone equal access balloting; and general data collection, analysis, management and reporting.
NCS provides scanners and forms for customers to do their own paper-based data collection. The Company also provides solutions to more complex information management needs through services and products that include comprehensive data collection technologies, software development, telecommunications support and information dissemination systems. All of these processing, data management and reporting services are available from NCS in support of customers that prefer to outsource these services. In addition, NCS offers network design, hardware and software acquisition, implementation, maintenance and support, and network administration.
BUSINESS SEGMENT AND OTHER INFORMATION
NCS operates in a single business segment. See Note 10 of Notes to Consolidated Financial Statements for business segment data, which financial statements are included in the Annual Report to Stockholders for the fiscal year ended January 31, 1998, and incorporated herein by reference.
The Company's headquarters are located at 11000 Prairie Lakes Drive, Eden Prairie, Minnesota 55344, telephone 612/829-3000.
PRIMARY PRODUCT AND SERVICE OFFERINGS
Assessment and Testing Services
NCS is the largest commercial processor of student assessment tests for grades K-12 in the United States. NCS markets test scoring services to major test publishers, state education agencies, the federal government, local school districts and commercial customers. For these customers, NCS service offerings include program design, item development, program management, software development, printing, packaging, distribution and collection logistics, scoring, editing, analysis and final reporting. Scoring services include selected response scoring and professional scoring of constructed response items such as essays. Both optical mark reading (OMR) and image scanning technologies are utilized in the scoring process.
The acquisition of Virtual University Enterprises in fiscal 1997 added a secure Internet-based electronic testing delivery capability, thereby allowing NCS to participate in the professional certification market, as well as offer an electronic testing option to traditional statewide grade K-12 testing programs.
The Company also publishes and distributes test instruments and provides scoring services to industrial and clinical psychologists, psychiatrists, human resource professionals and educators. These tests and services include personality assessment and psychological diagnostic testing, career development, guidance counseling and human resource organizational assessments. With the acquisition of the London House business from The McGraw-Hill Companies in fiscal 1997, the Company's test and scoring services have expanded to include assessments for personnel selection, skill assessment and workforce development.
Enterprise Software for Schools
A principal strategy of the Company in servicing the education marketplace is to concentrate on enterprise software for school administration. Software products include student administrative software to assist educators in student management, including such applications as academic reporting, attendance gathering and scheduling. The Company's instructional and curriculum management software products manage information about student achievement against educational objectives. In conjunction with the instructional management software, NCS offers a Model Curriculum and Assessment Database (MCAD) to assist schools in establishing stated curriculum objectives with specific test items to measure progress against those objectives.
NCS software products also include financial management software for schools and school districts, which includes accounting and financial reporting, payroll, human resources, inventory and many other financial and administrative functions. The Company offers teacher-training software specifically aimed at improving assessment of writing and composition skills.
NCS offers services associated with its enterprise software to assist with the design and implementation of these installations. Services offered by NCS include professional consulting; project management; network planning, design and implementation; systems installation and integration; training; help desk and ongoing support. The Company also offers outsourcing services to install its software and third-party computing and network hardware and operate the system on a day-to-day basis for the school district.
Data Management Services
NCS provides a comprehensive package of services and products that include systems analysis and design; software development; comprehensive data collection technologies, including paper based and electronic; telecommunication and telephone call center support; information management and dissemination; and network support, including Internet connectivity; and training. These services and products can be delivered on-site or outsourced off-site to NCS.
The U.S. Department of Education has outsourced to NCS the processing and eligibility of the free federal application for student aid in post-secondary education, and is the Company's single largest customer. NCS also manages, under contract, the wide area network over which this information is distributed to and from member colleges, universities and other post-secondary institutions.
Scanning Products
NCS manufactures OMR scanners that can read data from specially designed forms printed by the Company with specifically formulated inks. Computing capability is built into most scanners. Scanners usually incorporate, or interface directly with, software developed by the Company. Optical scanning equipment is most effective for applications where highest accuracy, precise response definition and cost effective data capture is required.
The Company's lines of OMR hardware include scanners marketed as OpScan(R) products. These lines of scanners provide a wide range of capabilities to meet the needs of customers. The OMR scanning systems utilize a proprietary mark discrimination system to distinguish valid marks, thus providing a very high degree of accuracy in processing responses. To enhance the usefulness of the OpScan line, the Company offers optional features, such as bar code reading capability, a transport printer to print alphanumeric messages on scanned documents, optional read formats and upgraded computer capability options.
NCS markets image-based data collection systems which represent an extension of the Company's optical mark reading technology. These are marketed as NCS(R) products and contain NCS proprietary character recognition technology as well as integrated third-party technologies. When attached to a workstation computer and using sophisticated software, these scanners allow customers to efficiently and accurately collect and interpret a wide range of information from a printed form, including machine- and hand-printed data.
NCS offers a number of standard software programs for use with NCS systems. Processing and application software is an important component of its scanning products and services. The Company also offers non-proprietary data collection products and technology to address specific customer data collection needs.
Scannable Forms
The Company designs, manufactures and sells scannable forms, including multiple-page booklets. A variety of custom forms are produced that are tailored to meet specific customer needs. In addition, standardized forms are used, especially with microcomputer-based scanners, in such applications as testing, attendance, scheduling and student evaluation in the education market or customer surveys or market research in the commercial setting.
The Company believes that the use of a properly designed and printed form is an essential element in assuring that a scanning system performs with greatest accuracy and optimum capability. In order to assure a high degree of consistency, reliability and accuracy, NCS has emphasized the use of its forms with its equipment. The Company prints its forms to exacting specifications.
MARKETING
NCS markets its data collection hardware and software and its data collection and computer processing services directly through sales employees, business partners and original equipment manufacturers and resellers located throughout the United States. Outside the United States, the Company's systems, products and services are sold through sales employees, distributors or independent sales agents. The Company's published test products and related test-scoring services are marketed principally in North America through telemarketing, direct mail, professional journal advertising and professional trade convention attendance and elsewhere through distributors. Each of the Company's sales organizations are supported by marketing and sales support personnel.
SOFTWARE SUPPORT, TECHNICAL SUPPORT AND MAINTENANCE
Software support is provided on a contractual basis to customers licensing application software systems from the Company. NCS assists customers with installation, training, hardware or software upgrades and development of specific customer application software on a fee for service basis.
The Company offers technical support and hardware maintenance to customers purchasing or leasing its equipment either on a contractual basis or through its national network of customer service and support engineers. NCS emphasizes prompt, reliable service and close customer relationships. Technical and maintenance support may include labor, parts, operational training and, where applicable, programming of the equipment and design of forms.
The Company supports its large scale, complex data management projects with information processing expertise in areas such as needs assessment, software development, data collection technologies, data base management, secure Internet applications, networking, telecommunications, help desk services, system acquisition and implementation and ongoing training and support.
DEVELOPMENT OF PRODUCTS AND SERVICES
The Company's development efforts are directed toward new product development and enhancements to existing products. During the fiscal years ended January 31, 1998, 1997 and 1996, the Company spent approximately $8.6 million, $9.9 million and $8.5 million, respectively (including certain internally developed, capitalized software development costs). The expenditures relate principally to software product development (primarily focused on applications software) and scanning software and equipment development. See Note 2 to Notes to Consolidated Financial Statements for a description of additional new products and enhancements to existing products acquired through acquisitions, which financial statements are included in the Annual Report to Stockholders for the fiscal year ended January 31, 1998, and incorporated herein by reference.
MANUFACTURING
The Company assembles its scanning equipment from electronic components, metal stampings, molded plastic parts and mechanical sub-assemblies. These parts are generally available from multiple sources. The Company assembles most of the scanning systems equipment at its Eagan, Minnesota facility. Computer hardware is purchased from other manufacturers.
Scannable forms are produced at NCS' printing plants in Columbia, Pennsylvania; Owatonna, Minnesota; and Rotherham, South Yorkshire, England. The ink and paper used in forms production are produced to the Company's specifications by a limited number of suppliers. Although the Company has no long-term supply contracts with its paper or ink suppliers, the Company has had long-term relationships with such suppliers and believes that these relationships are good.
COMPETITION
Competition in the data collection and information management industry is intense. Numerous companies offer various combinations of data collection and data management services. Optical scanning and imaging are only two of numerous data collection methods available and successfully in use in the marketplace today. The Company continues to focus on the development of education, government and commercial market niches where scanning technology has advantages over other data entry technologies.
In addition to the functional competition provided by alternative methods of data capture (including on-line terminal keyboards and optical character readers), other scanning vendors supply products that directly compete with those of the Company.
Enterprise software for the education market is competitive with in-house systems, national and regional software and service providers, data processing service bureaus, test publishers and providers of educational curriculum and instruction management products and services.
The Company's scannable forms compete with those produced by commercial and specialized forms printers. Principal competitive factors in the scannable forms printing industry are product quality, service and price.
NCS' test processing, test publishing and computer processing services compete with several test publishers and data processing service bureaus. The Company's customer support maintenance organization competes with services provided by manufacturers, other national service companies and local providers of maintenance services.
PATENTS, TRADEMARKS AND LICENSES
The Company holds certain patents, registered and unregistered trademarks and copyrights. The Company also has rights under licensing arrangements to a number of patents, trademarks, copyrights and manufacturing processes and materials. These licensing arrangements are agreements with publishers of various copyrighted psychological, aptitude and achievement tests that license NCS to distribute these tests, to print and sell answer sheets for such tests, and to score such tests. Payment of royalties is usually based upon the volume of tests distributed, answer sheets sold, and tests scored. NCS believes that its business is not dependent upon any one individual patent, trademark, copyright or license right or group thereof.
"OpScan" and "NCS" appearing herein are registered trademarks of the Company.
EMPLOYEES
As of February 28, 1998, the Company employed approximately 3,500 full-time employees. The Company believes that its employee relations are excellent.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of all of the executive officers of the Company as of February 28, 1998 are listed below along with their business experience during the past five years.
NAME AGE POSITION - ------------------- -------- ------------------------------------- Russell A. Gullotti 55 Chairman of the Board, President and Chief Executive Officer Robert C. Bowen 56 Senior Vice President Michael C. Brewer 51 Vice President and General Counsel Jay V. Clark 56 Vice President John W. Fenton, Jr. 57 Secretary-Treasurer Clive M. Hay-Smith 40 Vice President Robert C. Hickcox 44 Vice President Gary L. Martini 47 Vice President Michael A. Morache 47 Vice President David W. Smith 53 Vice President Jeffrey W. Taylor 44 Vice President and Chief Financial Officer Adrienne T. Tietz 51 Vice President
Mr. Gullotti has been President and Chief Executive Officer since October, 1994 and Chairman of the Board since May, 1995. Prior to that he held senior executive positions in sales and marketing, services and administration with Digital Equipment Corporation (computer manufacturing and services) for more than five years.
Mr. Bowen has been a Senior Vice President of NCS for more than five years.
Mr. Brewer has been Vice President and General Counsel of NCS since May, 1995. Prior to that he was General Counsel of NCS from May, 1992 until May, 1995 and Associate General Counsel of NCS from May, 1990 until May, 1992.
Mr. Clark has been a Vice President of NCS for more than five years.
Mr. Fenton has been Secretary-Treasurer of NCS for more than five years.
Mr. Hay-Smith has been a Vice President of NCS since December, 1993. Prior to that he was a sales and distribution executive with Control Data Systems, Inc. (computer systems integrator) from March, 1989 to August, 1993.
Mr. Hickcox has been a Vice President of NCS since February, 1997. Prior to that he was Director, Methods and Tools of NCS from April, 1995 to February, 1997 and prior to that, Manager, Tools and Systems with Digital Equipment Corporation (computer manufacturing and services) for more than five years.
Mr. Martini has been a Vice President of NCS since August, 1997. Prior to that he was owner and President of Martini & Associates (organizational development consulting) for more than five years and was Senior Consultant, Organization Development with Medtronic, Inc. (manufacturer of implantable cardiac devices) from April, 1991 to June 1993.
Mr. Morache has been a Vice President of NCS since May, 1996. Prior to that he was a Vice President of Unisys Corporation (information management company) from September, 1995 to May, 1996 and prior to that, a Senior Vice President with ALLTEL Information Services, Inc. (information processing management, outsourcing services and application software) for more than five years.
Mr. Smith has been a Vice President of NCS for more than five years.
Mr. Taylor has been Vice President and Chief Financial Officer since May, 1994 and prior to that Vice President and Corporate Controller of NCS for more than five years.
Ms. Tietz has been a Vice President of NCS for more than five years.
Officers are elected annually by the Board of Directors. There are no family relationships among these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected.
PRIVATE SECURITIES LITIGATION REFORM ACT
In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby filing, as Exhibit 99 hereto, cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward looking statements of the Company made by, or on behalf of, the Company.
ITEM 2.
ITEM 2. PROPERTIES
The Company's principal facilities are as follows:
SQUARE LOCATION FOOTAGE GENERAL PURPOSE - --------------- ---------- -------------------------------
Mesa, AZ (1) (2) 40,000 Education software and services general offices, sales and marketing, product development and support
Cedar Rapids, IA 205,000 Data processing services and warehouse
Iowa City, IA Assessment and test processing Building 1 (1) 168,000 and data processing services, Building 2 (1) 112,000 general offices and operations
Lawrence, KS 90,000 Data processing services, general offices and operations
Eagan, MN (1) 109,000 Scanner hardware development and manufacturing; NCS services general offices, sales and marketing; customer support services general offices and operations; and international operations general offices, sales and marketing
Eden Prairie, MN 45,000 Executive general offices
Edina, MN (1) 101,000 Data collection systems and services general offices, data processing services, sales and marketing; and scanner software development
Minnetonka, MN (1) 54,000 Test publishing and scoring general offices and operations
Owatonna, MN (1) 128,000 Documents design and production
Columbia, PA (1) 121,000 Documents design and production
Austin, TX Data processing services, Building 1 35,000 general offices and Building 2 41,000 operations
Nunawading, Victoria 30,000 NCS Australasia Pty. Ltd, (Melbourne) (joint venture) general Australia (1) offices, data processing services, sales and marketing
Rotherham, South Yorkshire 34,000 Documents design and England (1) production, general offices, sales and marketing - --------------------------
(1) Denotes owned facility.
(2) Construction of a 56,000 square foot addition to be used for the same general purpose will commence in May, 1998 with completion estimated for the last quarter of 1998.
The Company believes that its facilities, with the construction of the addition described above, will be adequate to meet its current needs.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
On April 30, 1997, the Company was served with a Summons and Complaint in a lawsuit filed against the Company by Edu-Cap, Inc. (formerly University Support Services, Inc.) ("Edu-Cap") in the United States District Court, District of Minnesota, Fourth Division. See also Item 5 of the Company's Current Report on Form 8-K dated April 30,1997. In the lawsuit, Edu-Cap alleges certain claims against the Company in connection with three student loan processing and servicing agreements between the Company and Edu-Cap. Edu-Cap seeks out-of-pocket damages, an undisclosed amount of lost profits, and has tendered to NCS certain student loans with unpaid principal, interest and late charges, which loans it claims are or have been in default and were incorrectly originated or serviced by NCS. The Company tendered the defense of the claims to its insurer, and the insurer accepted the defense subject to a reservation of rights. The Company has filed an Answer to Edu-Cap's Complaint denying Edu-Cap's claims, and the Company intends to vigorously defend against the lawsuit. In addition, the Company has filed a Counterclaim against Edu-Cap and a claim against a corporation affiliated with Edu-Cap seeking compensatory damages. The case is in the early stages of discovery, and Edu-Cap has not set forth the factual basis for its lost profits claims. The Company does not believe that the outcome in this litigation would result in a material adverse effect on the Company's financial position or results of operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted during the fourth quarter of the fiscal year ended January 31, 1998 to a vote of security holders through the solicitation of proxies or otherwise.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
"Quarterly Market Data" included in the Annual Report to Stockholders for the year ended January 31, 1998 is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
"Five Year Financial Data" included in the Annual Report to Stockholders for the year ended January 31, 1998 is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Results of Operations and Financial Condition" included in the Annual Report to Stockholders for the year ended January 31, 1998 is incorporated herein by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplementary data of the registrant and its subsidiaries, included in the Annual Report to Stockholders for the year ended January 31, 1998 are incorporated herein by reference:
Consolidated Balance Sheets -- January 31, 1998 and 1997
Consolidated Statements of Income -- Years ended January 31, 1998, 1997 and
Consolidated Statements of Changes in Stockholders' Equity -- Years ended January 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows -- Years ended January 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements -- January 31, 1998
Report of Independent Auditors dated March 2, 1998
Quarterly Results of Operations (Unaudited)
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
"Election of Directors" included in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 21, 1998 and "Executive Officers of the Registrant" in Part I of this report are incorporated herein by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
"Summary Compensation Table" and "Stock Options" included in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 21, 1998 are incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
"Election of Directors" and "Ownership of NCS Common Stock by Certain Beneficial Owners and Executive Officers" included in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 21, 1998 is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
"Election of Directors" included in the Company's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 21, 1998 is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) List of Financial Statements and Financial Statement Schedules
(1) The following consolidated financial statements of National Computer Systems, Inc. and subsidiaries, included in the Annual Report to Stockholders for the year ended January 31, 1998, are incorporated by reference in Item 8:
Consolidated Balance Sheets -- January 31, 1998 and 1997
Consolidated Statements of Income -- Years ended January 31, 1998, 1997 and 1996
Consolidated Statements of Changes in Stockholders' Equity -- Years ended January 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows -- Years ended January 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements -- January 31, 1998
Report of Independent Auditors dated March 2, 1998
(2) Consolidated financial statement schedules of National Computer Systems, Inc. and subsidiaries required to be filed by Item 14(d):
All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
(3) Listing of Exhibits:
EXHIBIT
3.1 Restated Articles of Incorporation, as amended.
3.2 Bylaws, as amended and restated, are incorporated herein by reference to Exhibit 3.2 to the NCS Form 8-K dated March 4, 1996.
4.1 Instruments with respect to long-term debt where the total debt authorized thereunder does not exceed 10% of the consolidated total assets of the registrant are not being filed; the registrant will furnish a copy of any such instrument to the Commission upon request.
4.2 Amended and Restated Rights Agreement dated as of March 4, 1996 between NCS and Norwest Bank Minnesota, National Association (including the form of Right Certificate attached as Exhibit B thereto) is incorporated herein by reference to Exhibit 1 to Amendment No. 2 to Form 8-A/A dated March 13, 1996.
4.3 Credit Agreement dated as of November 17, 1997 between NCS and The First National Bank of Chicago (as Agent); Norwest Bank Minnesota, National Association; Suntrust Bank, Central Florida, National Association; and The Bank of Tokyo - Mitsubishi Ltd., Chicago Branch is incorporated herein by reference to Exhibit 4 to the Company's Form 10-Q for the quarter ended October 31, 1997.
*10.1 Change of Control Agreement dated April 15, 1996, by and between NCS and certain executives of NCS is incorporated herein by reference to Exhibit 10.2 to the Company's Form 10-Q for the fiscal quarter ended April 30, 1996.
*10.2 NCS 1984 Employee Stock Option Plan is incorporated herein by reference to Exhibit 10 to the Company's Form 10-Q for the quarter ended July 31, 1984.
*10.3 NCS 1986 Employee Stock Option Plan is incorporated herein by reference to Exhibit 10D to the Company's Form 10-K for the fiscal year ended January 31, 1986.
*10.4 NCS Non-Employee Director Stock Option Plan, as amended.
*10.5 NCS 1990 Employee Stock Option Plan, as amended, is incorporated herein by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended October 31, 1995.
*10.6 NCS 1995 Employee Stock Option Plan, as amended, is incorporated herein by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended October 31, 1995.
*10.7 NCS 1990 Long-Term Incentive Plan, as amended, is incorporated herein by reference to Exhibit 10.3 to the Company's Form 10-Q for the quarter ended October 31, 1995.
*10.8 NCS 1992 Employee Stock Purchase Plan is incorporated herein by reference to Exhibit 10I to the Company's Form 10-K for the fiscal year ended January 31, 1992.
*10.9 Description of Retirement Arrangements with David C. Malmberg is incorporated herein by reference to Exhibit 19 to the Company's Form 10-Q for the fiscal quarter ended October 31, 1992.
*10.10 Amended and Restated Severance Agreement dated May 23, 1996, by and between NCS and Russell A. Gullotti is incorporated herein by reference to Exhibit 10.1 to the Company's Form 10-Q for the fiscal quarter ended April 30, 1996.
*10.11 Agreement dated August 22, 1994 between NCS and Charles W. Oswald is incorporated herein by reference to Exhibit 10(b) to the Company's Form 10-Q for the fiscal quarter ended October 31, 1994.
*10.12 Oswald Stock Option Plan is incorporated herein by reference to Exhibit 100 to the Company's Form 10-K for the fiscal year ended January 31, 1995.
*10.13 NCS 1997 Long-Term Incentive Plan is incorporated herein by reference to Exhibit 10.13 to the Company's Form 10-K for the year ended January 31, 1997.
*10.14 NCS 1997 Employee Stock Option Plan is incorporated herein by reference to Exhibit 10.14 to the Company's Form 10-K for the year ended January 31, 1997.
*10.15 NCS Corporate Management Incentive Plan -- 1997 is incorporated herein by reference to Exhibit 10.16 to the Company's Form 10-K for the fiscal year ended January 31, 1997.
*10.16 NCS Corporate Management Incentive Plan -- 1998.
*10.17 NCS 1998 Employee Stock Purchase Plan
13 Portions of NCS' Annual Report to Stockholders for the fiscal year ended January 31, 1998.
21 Significant Subsidiaries.
23 Consent of Independent Auditors.
24 Power of Attorney authorizing J.W. Fenton, Jr. to sign the NCS Form 10-K for the year ended January 31, 1998 on behalf of other officers and directors.
27 Financial Data Schedules, including Restated Financial Data Schedules for the fiscal year ended January 31, 1997 and 1996 and for the quarterly periods ended April 30, July 31 and October 31 in 1997 and 1996.
99 Cautionary statements identifying important factors that could cause the Company's actual results to differ from those projected in forward looking statements.
- ---------------- * Indicates management contract or compensatory plan or arrangement required to be filed as an exhibit to this report.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended January 31, 1998.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate section of this report.
(d) Financial Statement Schedules
Financial Statement Schedules have been omitted because they are not required or are inapplicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL COMPUTER SYSTEMS, INC. Dated: April 22, 1998 By: /s/ J. W. FENTON, JR. ------------------------ J. W. Fenton, Jr. SECRETARY-TREASURER
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By RUSSELL A. GULLOTTI * Chairman of the Board of Directors, ------------------------ President and Chief Executive Russell A. Gullotti Officer(principal executive officer)
By DAVID C. COX * Director ------------------------ David C. Cox
By MOSES JOSEPH* Director ------------------------ Moses Joseph
By JEAN B. KEFFELER* Director ------------------------ Jean B. Keffeler
By CHARLES W. OSWALD * Director ------------------------ Charles W. Oswald
By STEPHEN G. SHANK * Director ------------------------ Stephen G. Shank
By JOHN E. STEURI * Director ------------------------ John E. Steuri
By JOHN W. VESSEY * Director ------------------------ John W. Vessey
By JEFFREY W. TAYLOR * Vice President and Chief ------------------------ Financial Office (principal Jeffrey W. Taylor financial officer and principal accounting officer)
* Executed on behalf of the indicated officers and directors of the registrant by J. W. Fenton, Jr., Secretary-Treasurer, duly appointed attorney-in-fact.
/s/ J. W. FENTON, JR. - ----------------------------------- Dated: April 22, 1998 J. W. Fenton, Jr. (ATTORNEY-IN-FACT)
FORM 10-K NATIONAL COMPUTER SYSTEMS, INC. FOR THE FISCAL YEAR ENDED JANUARY 31, 1998
EXHIBIT INDEX
EXHIBIT - --------
3.1 Restated Articles of Incorporation, as amended.
10.4 NCS Non-Employee Director Stock Option Plan, as amended.
10.16 NCS Corporate Management Incentive Plan -- 1998.
10.17 NCS 1998 Employee Stock Purchase Plan.
13 Portions of NCS' Report to Stockholders for the fiscal year ended January 31, 1998.
21 Significant Subsidiaries.
23 Consent of Independent Auditors.
24 Power of Attorney authorizing a certain person to sign the NCS Form 10-K for the year ended January 31, 1998 on behalf of other officers and directors.
27 Financial Data Schedules, including Restated Financial Data Schedules for the fiscal years ended January 31, 1997 and 1996 and for the quarterly periods ended April 30, July 31 and October 31 in 1997 and 1996.
99 Cautionary statements identifying important factors that could cause the Company's actual results to differ from those projected in forward looking statements.