<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 Year Ended December 31, 1993
---------------------------------------
Commission File #0-7416
---------------------------------------
SHARED MEDICAL SYSTEMS CORPORATION
RETIREMENT SAVINGS PLAN
---------------------------------------
SHARED MEDICAL SYSTEMS CORPORATION
51 VALLEY STREAM PARKWAY
MALVERN, PENNSYLVANIA 19355
---------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee
(or other persons who administer the plan) has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
SHARED MEDICAL SYSTEMS CORPORATION
RETIREMENT SAVINGS PLAN
DATE: June 10, 1994 BY: /S/ Edward J. Grady
------------- ------------------------
Edward J. Grady
Chairman, Administrative Committee
The total number of pages contained in this report is 15.
--
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
INDEX TO FINANCIAL STATEMENTS, NOTES AND SCHEDULES
--------------------------------------------------
<TABLE>
<CAPTION>
PAGE
REFERENCE
---------
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 3
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS -
DECEMBER 31, 1993 and 1992 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993 6
NOTES TO FINANCIAL STATEMENTS 7
SCHEDULE OF ASSETS HELD FOR INVESTMENT -
DECEMBER 31, 1993 12
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993 13
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 15
</TABLE>
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee
Shared Medical Systems Corporation
Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of Shared Medical Systems Corporation Retirement Savings Plan as of December 31,
1993 and 1992, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1993. These financial statements and
the schedules referred to below are the responsibility of the Administrative
Committee (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 Shared
Medical Systems Corporation Retirement Savings Plan as of December 31, 1993 and
1992, and the changes in net assets available for benefits for the year ended
December 31, 1993, 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 as of December 31, 1993 and of reportable transactions for
the year ended December 31, 1993 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.
Philadelphia, PA
June 3, 1994
3
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 1993
-----------------
(in thousands)
<TABLE>
<CAPTION>
COMPANY
COMMON MONEY FIXED INDEX MORGAN CONTRI-
STOCK MARKET INCOME TRUST GROWTH WINDSOR BUTION PARTICIPANT
PLAN ASSETS FUND FUND FUND FUND FUND FUND FUND LOANS TOTAL
- - - - - ----------------------------------------- ------ ------ ------- ------- ------- ------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CASH..................................... $ 2 $ 5 $ 5 $ 5 $ 5 $ 5 $ 3 $ - $ 30
RECEIVABLES:
Participant Contributions.............. 70 82 154 165 148 259 - - 878
Company Contributions.................. 40 42 84 77 73 131 - - 447
Dividends, Interest & Capital Gains.... 53 - - - - - 6 - 59
PARTICIPANTS' LOANS RECEIVABLE........... - - - - - - - 1,999 1,999
INVESTMENTS, AT MARKET VALUE:
SMS Common Stock
(250,810 shares)...................... 6,239 - - - - - - - 6,239
Vanguard Money Market Trust............ - 6,621 - - - - - - 6,621
Vanguard Fixed Income Securities Fund
(1,536,272 shares)................... - - 14,164 - - - - - 14,164
Vanguard Index Trust
(276,790 shares)..................... - - - 12,132 - - - - 12,132
W. L. Morgan Growth Fund
(1,002,302 shares)................... - - - - 12,037 - - - 12,037
Windsor Fund
(1,632,712 shares)................... - - - - - 22,711 - - 22,711
Company Contribution Fund
(28,032 shares)...................... - - - - - - 697 - 697
------ ------ ------- ------- ------- ------- ------- ----------- -------
NET ASSETS AVAILABLE FOR BENEFITS.... $6,404 $6,750 $14,407 $12,379 $12,263 $23,106 $706 $ 1,999 $78,014
====== ====== ======= ======= ======= ======= ======= =========== =======
PLAN EQUITY
-----------
CURRENTLY ACTIVE PARTICIPANTS............ $6,358 $6,711 $14,186 $12,262 $12,150 $22,937 $655 $ 1,999 $77,258
TERMINATED, VESTED PARTICIPANTS.......... 46 39 221 117 113 169 51 - 756
------ ------ ------- ------- ------- ------- ------- ----------- -------
TOTAL PLAN EQUITY.................... $6,404 $6,750 $14,407 $12,379 $12,263 $23,106 $706 $ 1,999 $78,014
====== ====== ======= ======= ======= ======= ======= =========== =======
</TABLE>
The accompanying notes and schedules are an integral part of this statement.
4
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 1992
-----------------
(in thousands)
<TABLE>
<CAPTION>
COMPANY
COMMON MONEY FIXED INDEX MORGAN CONTRI-
STOCK MARKET INCOME TRUST GROWTH WINDSOR BUTION PARTICIPANT
PLAN ASSETS FUND FUND FUND FUND FUND FUND FUND LOANS TOTAL
- - - - - ----------- ------ ------ ------- ------ ------ ------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CASH..................................... $ 7 $ 38 $ 4 $ 7 $ 9 $ 19 $ 3 $ - $ 87
RECEIVABLES:
Participant Contributions.............. 58 100 101 132 121 169 - - 681
Company Contributions.................. 32 53 51 62 62 89 - - 349
Dividends, Interest & Capital Gains.... 42 - - - - - 5 - 47
PARTICIPANTS' LOANS RECEIVABLE........... - - - - - - - 1,765 1,765
INVESTMENTS, AT MARKET VALUE:
SMS Common Stock
(200,349 shares)...................... 4,483 - - - - - - - 4,483
Vanguard Money Market Trust............ - 7,092 - - - - - - 7,092
Vanguard Fixed Income Securities Fund
(1,190,803 shares)................... - - 10,550 - - - - - 10,550
Vanguard Index Trust
(229,842 shares)..................... - - - 9,417 - - - - 9,417
W. L. Morgan Growth Fund
(766,560 shares)..................... - - - - 9,697 - - - 9,697
Windsor Fund
(1,218,434 shares)................... - - - - - 15,523 - - 15,523
Company Contribution Fund
(27,181 shares)...................... - - - - - - 608 - 608
------ ------ ------- ------ ------ ------- ------- ----------- -------
NET ASSETS AVAILABLE FOR BENEFITS.... $4,622 $7,283 $10,706 $9,618 $9,889 $15,800 $ 616 $ 1,765 $60,299
====== ====== ======= ====== ====== ======= ======= =========== =======
PLAN EQUITY
-----------
CURRENTLY ACTIVE PARTICIPANTS............ $4,594 $7,231 $10,532 $9,557 $9,836 $15,680 $ 573 $ 1,765 $59,768
TERMINATED, VESTED PARTICIPANTS.......... 28 52 174 61 53 120 43 - 531
------ ------ ------- ------ ------ ------- ------- ----------- -------
TOTAL PLAN EQUITY.................... $4,622 $7,283 $10,706 $9,618 $9,889 $15,800 $ 616 $ 1,765 $60,299
====== ====== ======= ====== ====== ======= ======= =========== =======
</TABLE>
The accompanying notes and schedules are an integral part of this statement.
5
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
------------------------------------
(in thousands)
<TABLE>
<CAPTION>
COMPANY
COMMON MONEY FIXED INDEX MORGAN CONTRI-
STOCK MARKET INCOME TRUST GROWTH WINDSOR BUTION PARTICIPANT
FUND FUND FUND FUND FUND FUND FUND LOANS TOTAL
------- ------- -------- -------- -------- -------- -------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest........................... $ 13 $ 215 $ 890 $ 319 $ 190 $ 834 $ - $ - $ 2,461
Dividends.......................... 199 - - - - - 23 - 222
Capital Gain Distributions......... - - 379 7 1,198 1,077 - - 2,661
PARTICIPANTS' CONTRIBUTIONS.......... 881 1,075 1,789 2,004 1,855 2,992 - - 10,596
COMPANY CONTRIBUTIONS................ 153 180 305 288 285 448 - - 1,659
PARTICIPANT REDISTRIBUTIONS.......... 122 (1,514) 524 (170) (220) 1,258 - - -
NET REALIZED GAINS/(LOSSES) ON
DISPOSAL OF INVESTMENTS............ (1) - 16 6 2 25 - - 48
UNREALIZED APPRECIATION/
(DEPRECIATION) OF INVESTMENTS...... 645 - 380 697 (575) 1,370 71 - 2,588
DISTRIBUTIONS TO PARTICIPANTS........ (209) (423) (480) (335) (331) (686) (4) (52) (2,520)
PARTICIPANTS' LOANS ISSUED, NET
OF REPAYMENTS...................... (21) (66) (102) (55) (30) (12) - 286 -
------ ------- ------- ------- ------- ------- ------- ----------- -------
NET INCREASE (DECREASE) IN PLAN
ASSETS........................ 1,782 (533) 3,701 2,761 2,374 7,306 90 234 17,715
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF PERIOD................ 4,622 7,283 10,706 9,618 9,889 15,800 616 1,765 60,299
------ ------- ------- ------- ------- ------- ------- ----------- -------
END OF PERIOD...................... $6,404 $ 6,750 $14,407 $12,379 $12,263 $23,106 $ 706 $ 1,999 $78,014
====== ======= ======= ======= ======= ======= ======= =========== =======
</TABLE>
The accompanying notes and schedules are an integral part of this statement.
6
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1993 and 1992
--------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting. Shared Medical Systems Corporation (the "Company") has
elected to file with the Securities and Exchange Commission financial
statements prepared in conformance with guidelines issued under the
Employee Retirement Income Security Act of 1974, as amended.
Investments of the Shared Medical System Corporation Retirement Savings
Plan (the "Plan") are presented in the statement of net plan assets at
market value.
As required by the Department of Labor and the Internal Revenue Service as
of January 1, 1990, realized gains and losses are calculated by subtracting
the value of the assets at the beginning of the Plan year (if held on the
first day of the Plan year) or their acquisition date (if purchased during
the Plan year) from the proceeds received. Unrealized
appreciation/depreciation of investments is calculated by subtracting the
market value of the assets at the beginning of the year, adjusted for
assets purchased during the year (valued on acquisition date) and/or sold
during the year (valued as described above) from the market value of assets
at the end of the year.
(2) DESCRIPTION OF THE PLAN:
------------------------
ELIGIBILITY
-----------
All employees, other than union employees, leased employees, co-op
employees, summer employees, temporary employees, and non-resident aliens,
of the Company and affiliated companies, which have adopted the Plan with
the consent of the Company (participating companies) are eligible to
participate in the Plan with respect to base contributions and employer
matching contributions (both as described below) on the first day on which
they have completed one hour of service, and with respect to employer
profit-sharing contributions (also described below) on the January 1
coincident with or next following the first day on which they have
completed one hour of service. Approximately 3,830 employees were eligible
to participate in the Plan as of December 31, 1993.
PARTICIPATION
-------------
Base Contributions - Any eligible employee who wishes to participate in the
------------------
savings portion of the Plan may contribute, through salary reductions, up
to 15% of his compensation, not to exceed the maximum salary reduction
amount determined by the Secretary of the Treasury. In 1993 and 1992 the
maximum salary reduction amounts were $8,994 and $8,728, respectively.
Notwithstanding any other provision of the Plan to the contrary, the
percentage of before-tax contributions ("Base Contributions") by a
participant is subject to adjustment by the Company at any time to maintain
the Plan's compliance with the anti-discrimination requirements of section
401(k) of the Internal Revenue Code (the "Code"). Base Contributions shall
constitute a deferral on a before-tax basis if the
7
<PAGE>
Plan meets the requirements of section 401(k) of the Code, as amended. The
Plan met the requirements of section 401(k) in 1993 and 1992.
Profit-sharing Contributions - Each Participating Company may make an
----------------------------
employer profit-sharing contribution as determined at the discretion of its
Board of Directors. Such contribution will be allocated to the account of
each participant who is employed by the Participating Company on December 31
of such Plan year, in the proportion that such participant's years of
credited service bear to the total years of credited service of all
participants entitled to receive an allocation of this contribution. For the
Plan years ended December 31, 1993 and 1992 there were no profit-sharing
contributions.
Employer Matching Contributions - The Company may match, through
-------------------------------
discretionary employer contributions, a portion of a participant's base
contribution in an amount to be determined annually by the Board of
Directors. For the Plan years ended December 31, 1993 and 1992 the Company
contributed $1,659,000 and $1,370,000, respectively, in matching
contributions. The amount of employer matching contributions made on behalf
of certain participants is subject to the anti-discrimination requirements
of section 401(m) of the Code. The Plan met the requirements of section
401(m) in 1993 and 1992.
Employee Stock Ownership Contributions - The Tax Reform Act of 1986
--------------------------------------
repealed the payroll-based tax credit allowed by the Code. As a result, the
Company has not made a contribution to the employee stock ownership portion
of the Plan (the "PAYSOP") for Plan years ended subsequent to December 31,
1986.
Vesting - All participants are fully vested in their base contribution
-------
account balances at all times.
A participant becomes 20% vested in his employer profit-sharing and employer
matching contributions after three "years of service" (calendar years in
which he completes at least 1000 hours of service). An additional 20% vests
each year thereafter, with full vesting after 7 years of service.
Distribution of Benefits - A participant, by filing a written request with
------------------------
the Plan's Administrative Committee, or its designee, may elect to make
withdrawals of supplemental contributions (after-tax contributions made to
the Plan prior to January 1, 1989). This election can be made up to three
times in each Plan year, and each withdrawal must be at least $200. After
withdrawing all amounts credited to his supplemental contribution account,
the participant can withdraw his base contributions (but not the earnings
thereon) and the vested amount in his employer matching contribution account
and his employer profit-sharing contribution account upon providing
satisfactory evidence that the withdrawal is required on account of an
"immediate and heavy financial need" as defined in regulations under the
Code. A hardship withdrawal will be limited to the amount needed to meet the
immediate financial need created by the hardship. A hardship withdrawal can
only be made after a participant has exhausted amounts reasonably available
from other resources, including loans he is eligible for under the Plan.
Also, all base contributions must be withdrawn in order for vested amounts
in the employer matching contribution or employer profit-sharing
contribution account to be withdrawn, and all vested amounts in the employer
matching contribution account must be withdrawn in order for amounts
8
<PAGE>
in the employer profit-sharing contribution account to be withdrawn. A
participant who has attained age 59 1/2 may withdraw any amounts from his
base contribution account, his employer PAYSOP contribution account, and the
vested amounts in his employer profit-sharing contribution account and
employer matching contribution account.
A participant shall be entitled to benefits based on the balance of his base
contribution account, employer profit-sharing contribution account, employer
matching contribution account, supplemental contribution account and
employer PAYSOP contribution account, net of any withdrawals from his base
contribution account, supplemental contribution account, employer PAYSOP
contribution account, profit-sharing contribution account, and matching
contribution account as described above, distributed in accordance with one
of the methods described below, upon the occurrence of any of the following
events:
(a) separation from service on or after normal retirement age (65);
(b) separation from service on or after early retirement age (age 55
with seven years of vesting service);
(c) disability, as defined in the Plan, prior to age 65;
(d) death of a participant prior to the commencement of a benefit
resulting from retirement, disability or termination of service;
(e) separation from the service of the Company prior to age 65 for any
reason other than disability, as defined above, death, or early
retirement.
All distributions shall be made in cash except where the participant elects
to receive the distribution of his employer PAYSOP contribution account or
his investment in Shared Medical Systems Corporation Common Stock Fund
("Fund A") in Company common stock. Distributions are made in a lump sum
payment, with the exception that a participant whose account balance exceeds
$3,500, may elect to receive that part of his distribution which accrued
prior to April 13, 1989, (or, in the case of amounts accrued under the
Profit-sharing Plan, January 1, 1990) in annual, semi-annual, or quarterly
distributions over a fixed period of time.
If a participant's vested account balance is less than $3,500 at the time of
his separation from service, distribution will be made in a lump sum upon
such termination. Otherwise, the Plan provides for distribution of a
participant's entire vested account balance upon termination of service but
prior to age 65, at the election of the participant, either upon such
termination or upon reaching age 65, provided that if such a participant has
completed seven years of service, he may elect to receive a distribution of
his vested account balance at any time after attaining age 55.
Investment Directions - Participants may elect to have their base
---------------------
contributions and employer matching contributions to the Plan invested in
the following funds, provided that each fund selected must receive a
proportion of not less than 10% of a participant's contribution:
Fund A - Shared Medical Systems Corporation Common Stock: This fund
------
invests in Company common stock.
9
<PAGE>
Fund B - Vanguard Money Market Reserves Prime Portfolio: This fund
------
invests in certificates of deposit of major U.S. banks, prime
commercial paper, high quality short-term corporate obligations and
short-term U.S. Government and agency securities. This fund attempts to
maintain $1.00 constant share value.
Fund C - Vanguard Fixed Income Securities Fund Investment Grade Bond
------
Portfolio: This fund invests in corporate bonds from Moody's four
highest ratings.
Fund D - Vanguard Index Trust 500 Portfolio: This fund invests in all
------
500 stocks of the Standard & Poor's 500 Composite Stock Price Index.
Fund E - W.L. Morgan Growth Fund: This fund has a "three-tier"
------
structure that includes stocks of established growth, cyclical growth
and emerging companies; emphasis varies with anticipated economic
trends.
Fund F - Windsor Fund: This fund includes common stocks of companies
------
with good fundamentals and growth potential but currently overlooked,
misunderstood or out of favor in the marketplace.
The Administrative Committee and the Trustee may, in their sole discretion,
offer additional investment funds, or cease to offer such investment funds,
as they deem appropriate. In the absence of any written designation of
investment fund preference, the trustee shall direct that all participant,
employer matching or employer profit-sharing contributions received for any
participant be invested in Fund C.
Participants may reapportion their account balances among investments semi-
annually in June and December each year. Beginning January 1, 1994,
participants may reapportion their account balances quarterly.
As required by the applicable Internal Revenue Code sections, employer
PAYSOP contributions made prior to January 1, 1987, pursuant to Section
401(a) of the Code, were invested in Shared Medical Systems Corporation
Common Stock, and are included in the Company Contribution Fund.
The Common Stock Fund and each of the Vanguard funds individually represent
more than five percent of the net assets available for benefits of the Plan
for the years ended December 31, 1993 and 1992.
Participant Loans - The Plan permits participants to borrow from their base
-----------------
contribution account balance and from the vested portion of their employer
matching contribution account balance. A loan can be made to any
participant provided such loan does not exceed the lesser of (a) $50,000
(reduced by the excess of the highest outstanding balance of Plan loans
within one year prior to the date of the loan over the outstanding balance
of loans on the date of the new loan); or (b) one-half of the vested
balance of the participant's base contribution account and employer
matching contribution account. The minimum loan amount is $1,000. A
participant may not have more than one loan outstanding at any time. After
repayment of a Plan loan, a new loan cannot be made to the same participant
until the expiration of a six-month waiting period. The participant may
elect repayment terms of one to five years, except that a loan used to
acquire the participant's principal residence may have a longer term. The
interest rate charged for the term of the loan is the rate the trustee
would charge for secured personal loans in commensurate amounts on the date
of the loan.
10
<PAGE>
Termination of Plan - Upon termination of the Plan, the participants'
-------------------
account balances become vested and non-forfeitable. The Trustee, at the
direction of the Administrative Committee, shall liquidate the assets held
in participants' accounts and, after payment of all expenses and
proportional adjustment of each participant's accounts to reflect income or
losses to the date of termination, will distribute in one lump sum the
balance of each participant's accrued benefit to the participant, retired
participant, or if appropriate, to the participant's beneficiary, subject
to certain restrictions under the Code on distribution of base
contributions.
Administration Of The Plan - The Plan is administered by a committee of
--------------------------
employees of the Company. Members of the Committee on December 31, 1993,
were Edward J. Grady, Chairman, G. Douglas Lawrence, and Bonnie L. Shuman.
Edward J. Grady is Controller of the Company, G. Douglas Lawrence is Vice
President of Human Resources, and Bonnie L. Shuman is General Counsel. The
address of each member of the Administrative Committee is 51 Valley Stream
Parkway, Malvern, Pennsylvania, 19355.
Hamilton Bank, 100 North Queen St., Lancaster, Pennsylvania 17604, is the
Trustee for the Plan, and Towers, Perrin, Forster, and Crosby, Centre
Square West, 1500 Market Street, Philadelphia, Pennsylvania 19102 is the
Plan recordkeeper.
For the Plan year ended December 31, 1993, members of the Administrative
Committee did not receive compensation for services performed with respect
to the Plan. All costs with respect to services performed for the Plan by
Hamilton Bank and by Towers, Perrin, Forster, and Crosby, were paid by the
Company.
Custodian of Investments - Hamilton Bank, a commercial banking institution
------------------------
with its offices at 100 North Queen Street, Lancaster, Pennsylvania 17604,
is the custodian for certain securities and assets of the Plan.
Vanguard Group of Investment Companies ("Vanguard"), a diversified mutual
funds company with its offices at 100 Vanguard Boulevard, Malvern,
Pennsylvania 19355, serves as custodian for the remaining securities and
other assets of the Plan. All custodial costs in connection with the Plan
are paid by the Company.
(3) FEDERAL INCOME TAXES APPLICABLE TO THE PLAN:
-------------------------------------------
The Internal Revenue Service ruled in 1990 that the Plan as amended and
restated effective January 1, 1989, meets the requirements for
qualification contained in section 401(a) of the Internal Revenue Code of
1986 as amended, as in effect prior to January 1, 1989. Accordingly, no
provision for Federal income taxes has been included in the accompanying
financial statements. Management believes that the Plan as currently
designed, and being operated, is in compliance with the applicable
requirements of the Code.
11
<PAGE>
ITEM 27 (a)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
SCHEDULE OF ASSETS HELD FOR INVESTMENT
--------------------------------------
AS OF DECEMBER 31, 1993
-----------------------
(in thousands)
<TABLE>
<CAPTION>
MARKET
Identity of Issue DESCRIPTION COST VALUE
- - - - - ----------------- ----------- ------- -------
<S> <C> <C> <C>
Hamilton Bank Money Market Fund $ 30 $ 30
Shared Medical Systems Corporation SMS Common Stock
("SMS") 250,810 shares 4,520 6,239
Vanguard Money Market Trust Money Market Fund
Prime Portfolio 6,621 6,621
Vanguard Fixed Income Mutual Fund
Securities Fund 1,536,272 shares 12,969 14,164
Vanguard Index Trust Mutual Fund
276,790 shares 9,828 12,132
W. L. Morgan Growth Fund Mutual Fund
1,002,302 shares 11,848 12,037
Windsor Fund Mutual Fund
1,632,712 shares 21,109 22,711
Company Contribution Fund SMS Common Stock
28,032 shares 960 697
Participant Loans Loan Fund 1,999 1,999
------- -------
$69,884 $76,630
======= =======
</TABLE>
12
<PAGE>
ITEM 27 (d)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
REPORTABLE TRANSACTIONS (1)
---------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
------------------------------------
(in thousands)
<TABLE>
<CAPTION>
EXPENSES CURRENT
INCURRED IN VALUE OF
CONNECTION ASSETS ON NET
PURCHASE SELLING WITH COST OF TRANSACTION GAIN
IDENTITY OF PARTY DESCRIPTION OF TRANSACTION PRICE PRICE TRANSACTION ASSETS DATE (LOSS)
- - - - - ------------------------------------ ---------------------------- ------- --------- ----------- ------------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Shared Medical Systems Purchases of 63,338 shares
Corporation of Shared Medical Systems
Corporation Common Stock (2) $1,397 - $1,397 $1,397 -
Shared Medical Systems Sales and distributions of
Corporation 12,026 shares of Shared
Medical Systems Corporation
Common Stock (2) $ 268 - $ 269 $ 268 ($1)
Vanguard Group of Purchases of 1,293,431 units
Investment Companies of Vanguard Money Market
Trust Fund $1,293 - $1,293 $1,293 -
Vanguard Group of Sales of 1,764,627 units of
Investment Companies Vanguard Money Market Trust
Fund $1,765 - $1,765 $1,765 -
Vanguard Group of Purchases of 381,436 shares
Investment Companies of Vanguard Fixed Income
Securities Fund $3,554 - $3,554 $3,554 -
Vanguard Group of Sales of 35,970 shares of
Investment Companies Vanguard Fixed Income
Securities Fund $ 337 - $ 300 $ 337 $37
Vanguard Group of Purchase of 57,833 shares
Investment Companies of Vanguard Index Trust $2,465 - $2,465 $2,465 -
Vanguard Group of Sales of 10,885 shares of
Investment Companies Vanguard Index Trust $ 452 - $ 375 $ 452 $77
</TABLE>
13
<PAGE>
ITEM 27 (d)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
REPORTABLE TRANSACTIONS (1)
---------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
------------------------------------
(in thousands)
<TABLE>
<CAPTION>
EXPENSES CURRENT
INCURRED IN VALUE OF
CONNECTION ASSETS ON
DESCRIPTION OF PURCHASE SELLING WITH COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY TRANSACTION PRICE PRICE TRANSACTION ASSETS DATE (LOSS)
- - - - - ----------------------- ---------------------------- ------- --------- ----------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Vanguard Group of Purchases of 266,673 shares
Investment Companies of W. L. Morgan Growth $ 3,306 - $ 3,306 $ 3,306 -
Fund
Vanguard Group of Sales of 30,928 shares of
Investment Companies W. L. Morgan Growth $ 394 - $ 365 $ 394 $29
Fund
Vanguard Group of Purchases of 438,899 shares
Investment Companies of Windsor Fund $ 6,134 - $ 6,134 $ 6,134 -
Vanguard Group of Sales of 24,618 shares of
Investment Companies Windsor Fund $ 341 - $ 311 $ 341 $30
Hamilton Bank Purchases of 23,547,218 units
of Hamilton Money Market Fund $23,547 - $23,547 $23,547 -
Hamilton Bank Sales of 23,588,589 units
of Hamilton Money Market Fund $23,589 - $23,589 $23,589 -
</TABLE>
(1) Transaction or series of transactions in excess of 5% of the current fair
value of Plan assets at the beginning of the Plan Year.
(2) This is also a party-in-interest transaction.
14
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee
Shared Medical Systems Corporation
Retirement Savings Plan:
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 3, 1994, on the Shared Medical Systems
Corporation Retirement Savings Plan financial statements as of December 31, 1993
included in this Form 11-K, into the Company's previously filed Registration
Statement on Form S-8 (File No. 33-34089).
Philadelphia, PA
June 3, 1994
15
