<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the Fiscal Year Ended December 31, 1996
A. Full title of the plan and the address of the plan:
First USA Paymentech Retirement Savings Plan
1601 Elm Street
8th Floor
Dallas, Texas 75201
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
First USA Paymentech, Inc.
1601 Elm Street
8th Floor
Dallas, Texas 75201
<PAGE>
FIRST USA PAYMENTECH RETIREMENT
SAVINGS PLAN
===============================================================================
Audited Financial Statements and
Supplemental Schedules for the Six-Month
Period ended December 31, 1996
with Report of Independent Auditors
<PAGE>
FIRST USA PAYMENTECH RETIREMENT SAVINGS PLAN
Audited Financial Statements
and Supplemental Schedules
Six-Month Period Ended December 31, 1996
CONTENTS
Report of Independent Auditors...................................... 1
Financial Statements:
- - ---------------------
Statement of Net Assets Available for Benefits - December 31, 1996.. 2
Statement of Changes in Net Assets Available for Benefits -
Six-Month Period Ended December 31, 1996......................... 3
Notes to Financial Statements....................................... 4
Supplemental Schedules:
- - -----------------------
Line 27a - Schedule of Assets Held for Investment Purposes.......... 8
Line 27d - Schedule of Reportable Transactions...................... 9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Employee Benefits Committee
First USA Paymentech Retirement Savings Plan
We have audited the accompanying statement of net assets available for benefits
of the First USA Paymentech Retirement Savings Plan (the "Plan"), as of
December 31, 1996, and the related statement of changes in net assets available
for benefits for the six-month period 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 audit.
We conducted our audit 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 audit provides 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 at
December 31, 1996, and the changes in its net assets available for benefits for
the six-month period then ended, in conformity with generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996, and reportable
transactions for the six-month period then ended are presented for the purposes
of complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the financial statements. The Fund Information in
the statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in our audit
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Dallas, Texas
June 6, 1997
<PAGE>
First USA Paymentech Retirement Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1996
<TABLE>
<S> <C>
Assets
Investments, at fair value
Merrill Lynch Mutual Funds
Capital Fund Class A $ 784,709
Basic Value Fund Class A 1,442,876
Corporate Bond Fund Intermediate Term 353,391
Managers International Equity Fund 507,119
Merrill Lynch Retirement Preservation Trust 452,286
First USA, Inc. Common Stock 41,587
First USA Paymentech, Inc. Common Stock 92,365
Cash Fund 7,044
Participant Loan Fund 132,743
----------
Total investments 3,814,120
----------
Contributions receivable from First USA Management
Resources, Inc. 12,452
Employee contributions receivable 53,597
Interest receivable 452
----------
Net Assets Available for Benefits $3,880,621
==========
</TABLE>
2
<PAGE>
First USA Paymentech Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Six-Month Period Ended December 31, 1996
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------------
Merrill Lynch Mutual Funds
--------------------------------- Merrill First USA
Corporate Lynch First Paymentech,
Capital Basic Value Bond Fund Managers Retirement USA, Inc. Inc.
Fund Fund Intermediate International Preservation Common Common Cash
Class A Class A Term Equity Fund Trust Stock Stock Fund
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions
Transfer to the Plan (Note B) $584,937 $1,125,831 $279,817 $444,934 $329,552 $ - $ - $ -
Contributions:
Employer 29,959 56,938 13,822 19,871 17,514 401 752 19
Employee 209,394 337,438 102,385 132,661 111,481 2,717 4,857 (3,491)
Investment income 35,112 94,511 12,612 15,681 13,461 42 99 132
Net appreciation (depreciation)
in fair value of investments 29,935 36,543 2,088 9,600 76 5,575 (7,303) -
Transfers between funds (9,104) (49,354) (12,804) (83,921) 472 32,852 93,960 -
Deductions
Benefits paid directly to
participants (95,524) (159,031) (44,529) (31,707) (20,270) - - 10,384
------------------------------------------------------------------------------------------
Net increase in net assets
available for benefits 784,709 1,442,876 353,391 507,119 452,286 41,587 92,365 7,044
Net assets available for benefits
at beginning of period - - - - - - - -
------------------------------------------------------------------------------------------
Net assets available for benefits
at end of period $784,709 $1,442,876 $353,391 $507,119 $452,286 $41,587 $92,365 $7,044
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Fund Information
------------------------------------
Participant
Loan
Fund Other Total
------------------------------------
<S> <C> <C> <C>
Additions
Transfer to the Plan (Note B) $114,811 $ - $ 2,879,882
Contributions:
Employer - 12,452 151,728
Employee - 53,597 951,039
Investment income - 452 172,102
Net appreciation (depreciation)
in fair value of investments - - 76,514
Transfers between funds 27,899 - -
Deductions
Benefits paid directly to
participants (9,967) - (350,644)
-----------------------------------
Net increase in net assets
available for benefits 132,743 66,501 3,880,621
Net assets available for benefits
at beginning of period - - -
-----------------------------------
Net assets available for benefits
at end of period $132,743 $66,501 $3,880,621
===================================
</TABLE>
3
<PAGE>
FIRST USA PAYMENTECH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting The financial statements of First USA Paymentech Retirement
Savings Plan (the "Plan") have been prepared on the accrual basis. Certain
costs and expenses incurred with regard to the purchase, sale or transfer of
investments have been borne by the Plan. All other administrative expenses have
been borne by First USA Management Resources, Inc. (the "Plan Administrator"), a
wholly owned subsidiary of First USA Paymentech, Inc. (the "Company").
Valuation of Investments The investments of the Plan are stated at fair value
based on quoted market prices, except participant loans which are stated at
cost. The Merrill Lynch Retirement Preservation Trust (Note D) is a collective
trust that is valued at cost which approximates fair value as determined by
Merrill Lynch.
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE B -- DESCRIPTION OF THE PLAN
The Plan was established effective July 1, 1996 to provide eligible employees
with additional retirement income savings opportunities. Prior to the
establishment of the Plan, the employees of the Company were eligible to
participate in the First USA Retirement Savings Plan (the "First USA Plan") of
First USA, Inc. ("First USA"). As of July 1, 1996, the employees of the Company
were no longer eligible to participate in the First USA Plan and all participant
balances were transferred from the First USA Plan to the Plan.
The Company is a 57%-owned indirect subsidiary of First USA.
The Plan is a defined contribution plan intended to qualify under Section 401(a)
and Section 401(k), respectively, of the Internal Revenue Code (the "Code").
Employees are eligible to participate in the Plan upon the attainment of age 21
and the completion of 1,000 hours of service with the Company during a 12-month
period of time. The Plan limits employee contributions from 1% to 10% of an
eligible employee's compensation, as defined, during each year. The deferral
percentage may be changed on a quarterly basis. The Company contributes to the
Plan a matching amount equal to 50% of the first 3% of base compensation
contributed by each eligible employee. Highly compensated employees may be
subject to a reduced contribution based on the deferral amounts of non-highly
compensated employees.
4
<PAGE>
FIRST USA PAYMENTECH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Participant contributions and actual earnings thereon are fully vested at all
times. Matching contributions made by the Company vest at the rate of 20% per
year following two years of employment. Following six years of employment, an
eligible employee's interest in matching contributions allocated to his or her
account is fully vested. Forfeitures are used to reduce the Company's
contribution. At December 31, 1996, there were $14,707 of forfeitures that will
be used to reduce future Company contributions.
Benefits may be paid under the Plan, subject to limitations and conditions
imposed by the Code, upon a participant's termination of employment, retirement
(early, normal or late) or death. The Plan specifies various distribution
options that participants may select, including forms of annuity payments for
balances in excess of $3,500 and lump-sum distributions.
The Company has the right under the Plan to discontinue contributions at any
time and terminate the Plan. In the event of termination of the Plan, each
participant shall have a 100% nonforfeitable interest in the value of all
amounts credited to the participant's account.
A participant of the Plan may borrow 50% of the vested balance in such
participant's account with a minimum of $1,000 and up to a maximum of $50,000.
Participant loans may be unrestricted with a maximum repayment term of 5 years
or, for the purchase of a home, with a maximum repayment term of 15 years. If
an unrestricted loan is extended past the 5 year period, the balance of the loan
at the time of the extension is a taxable distribution. Participant loans bear
a fixed rate of interest based on the prime rate ranging from 8.25% to 8.50% at
December 31, 1996.
Information about the Plan agreement and the vesting and distribution provisions
is contained in the First USA Paymentech Retirement Savings Plan Summary Plan
Description booklet which is made available to all Plan participants. Copies of
this booklet are available from the Human Resources Department.
NOTE C -- INVESTMENTS
The Plan's investments are held by funds administered by Merrill Lynch Trust
Company of Texas, ("Merrill Lynch"), the trustee. Investment choices are
directed by the Employee Benefits Committee, consisting of members of management
of the Company, based upon recommendations of the trustee and an independent
consulting firm, A. Foster Higgins & Co., Inc.
NOTE D -- INVESTMENT OPTIONS
Participants may elect to divide contributions between the Plan investment
options offered by the Plan through Merrill Lynch. The investment choices
offered are: Managers International Equity Fund, Merrill Lynch Capital Fund
Class A, Merrill Lynch Basic Value Fund Class A, Merrill Lynch Corporate Bond
Fund Intermediate Term Portfolio Class A, Merrill Lynch Retirement Preservation
Trust, First USA, Inc. Common Stock Fund and First USA Paymentech, Inc. Common
Stock Fund. Plan participants may elect to direct their contributions (and the
Company matching contributions) to any fund or a combination of two or more
funds (in 1% denominations). Additionally, participants may revise percentage
allocations of investment choices and transfer existing account balances from
one fund to the other or any combination of funds on a daily basis.
5
<PAGE>
FIRST USA PAYMENTECH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Managers International Equity Fund invests primarily in non-U.S. equity
securities. The Merrill Lynch Capital Fund Class A invests in equity, debt, and
convertible securities. The Merrill Lynch Basic Value Fund Class A invests in
securities, primarily undervalued equities. The Merrill Lynch Corporate Bond
Fund Intermediate Term Portfolio Class A is a managed portfolio primarily
comprised of investment grade corporate fixed-income securities. The Merrill
Lynch Retirement Preservation Trust invests primarily in a broadly-diversified
portfolio of guaranteed investment contracts and in obligations of U.S.
government and U.S. government-agency related securities. This Trust also
invests in high-quality money market securities. The First USA, Inc. Common
Stock Fund invests in the common stock of First USA. The First USA Paymentech,
Inc. Common Stock Fund invests in the common stock of the Company.
NOTE E -- INCOME TAX STATUS
The Plan and related trust are intended to be a qualified plan and an exempt
trust, respectively, under Sections 401(a), 401(k) and 501(a) of the Code, as
amended. An application has been submitted to the Internal Revenue Service for a
determination letter that the Plan and related trust are qualified and tax
exempt, respectively. The Plan and related trust documents may require
amendments in response to comments received from the Internal Revenue Service.
The Plan Administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
provisions of the Code.
NOTE F -- RECONCILIATION TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1996
-----------
<S> <C>
Net assets available for benefits per the financial statements $ 3,880,621
Amounts allocated to withdrawing participants (10,308)
-----------
Net assets available for benefits per the Form 5500 $ 3,870,313
===========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Six-Month Period
Ended
December 31, 1996
-----------------
Benefits paid directly to participants per the
financial statements $ 350,644
Add: Amounts allocated to withdrawing participants
at December 31, 1996 10,308
-----------
Benefits paid directly to participants per the Form 5500 $ 360,952
===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
6
<PAGE>
FIRST USA PAYMENTECH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE G -- SUBSEQUENT EVENTS
Effective January 1, 1997, participants of the GENSAR Technologies Inc.
Employee Savings 401(k) Program (the "GENSAR Plan"), the 401(k) plan of GENSAR
Technologies Inc., a subsidiary of the Company, became eligible to participate
in the Plan. All participant balances were transferred from the GENSAR Plan to
the Plan.
On January 20, 1997, First USA and BANC ONE Corporation ("BANC ONE") jointly
announced that an agreement had been reached for First USA to merge with BANC
ONE. In the merger, First USA will merge with and into BANC ONE and each
outstanding share of First USA, Inc. Common Stock will be converted into 1.1659
shares of BANC ONE Common Stock. Upon completion of the merger, which is
expected to occur in late June 1997, the Company will be a 57%-owned indirect
subsidiary of BANC ONE.
7
<PAGE>
First USA Paymentech Retirement Savings Plan
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
(e) Current
(a) (b) Identity of Issuer (c) Description of Investment Units (d) Cost Value
- - ------------------------------------------------------------------------------------------------------------------
* Merrill Lynch Trust Company of Texas
<S> <C> <C> <C>
Merrill Lynch Mutual Funds Capital Fund Class A 25,272 $ 759,854 $ 784,709
Merrill Lynch Mutual Funds Basic Value Fund Class A 46,544 1,404,738 1,442,876
Merrill Lynch Mutual Funds Corporate Bond Fund Intermediate Term 31,026 351,335 353,391
The Managers Funds Managers International Equity Fund 11,607 496,808 507,119
Merrill Lynch Trust Company Retirement Preservation Trust 452,286 452,286 452,286
First USA, Inc. Common Stock, $0.01 par value 1,201 36,011 41,587
First USA Paymentech, Inc. Common Stock, $0.01 par value 2,727 99,668 92,365
Cash Fund Cash -- 7,044 7,044
Participant Loan Fund Interest rates ranging from 8.25% to 8.50% 132,743 132,743 132,743
---------- ----------
$3,740,487 $3,814,120
========== ==========
</TABLE>
* Party in interest-trustee
8
<PAGE>
First USA Paymentech Retirement Savings Plan
Line 27d - Schedule of Reportable Transactions
December 31, 1996
<TABLE>
<CAPTION>
(f) Expenses (h) Current Value
Incurred of Asset at (i) Net
(a) Party (c) Purchase (d) Selling With (g) Cost of Transaction Gain
Involved (b) Description of Assets Price Price Transaction Asset** Date (Loss)
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Category (iii) - Series of investment transactions in excess of 5% of plan assets:
- - ---------------------------------------------------------------------------------
*Merrill Lynch Trust Merrill Lynch Capital Fund Class A
Company of Texas 95 Transactions $ 876,629 $ 876,629 $ 876,629
*Merrill Lynch Trust Merrill Lynch Capital Fund Class A
Company of Texas 59 Transactions $123,421 118,341 123,421 $ 5,080
*Merrill Lynch Trust Merrill Lynch Basic Value Fund Class A
Company of Texas 99 Transactions 1,648,110 1,648,110 1,648,110
*Merrill Lynch Trust Merrill Lynch Basic Value Fund Class A
Company of Texas 75 Transactions 236,443 238,038 236,443 (1,595)
*Merrill Lynch Trust Merrill Lynch Corporate Bond Fund
Company of Texas Intermediate Term
76 Transactions 415,515 415,515 415,515
*Merrill Lynch Trust Merrill Lynch Corporate Bond Fund
Company of Texas Intermediate Term
47 Transactions 64,030 63,998 64,030 32
*The Managers Funds Managers International Equity Fund
82 Transactions 622,055 622,055 622,055
*The Managers Funds Managers International Equity Fund
63 Transactions 126,852 127,564 126,852 (712)
*Merrill Lynch Trust Merrill Lynch Retirement
Company of Texas Preservation Trust
115 Transactions 495,705 495,705 495,705
*Merrill Lynch Trust Merrill Lynch Retirement
Company of Texas Preservation Trust
37 Transactions 43,495 43,419 43,495 76
</TABLE>
There were no category (i), (ii) or (iv) transactions during the six-month
period ended December 31, 1996.
Column (e) not applicable.
* Party in interest
** Investment cost is determined using the average cost method
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefits plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
First USA Paymentech Retirement Savings Plan
Date: June 25, 1997 /s/ David W. Truetzel
------------------------------------------------
David W. Truetzel
Chief Financial Officer
First USA Paymentech, Inc.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement No.
333-11249 on Form S-8 pertaining to the First USA Paymentech Retirement Savings
Plan of our report dated June 6, 1997, with respect to the financial statements
and supplemental schedules of First USA Paymentech Retirement Savings Plan,
included in this Annual Report on Form 11-K for the period ended December 31,
1996.
ERNST & YOUNG LLP
Dallas, Texas
June 24, 1997
