11-K: Annual report of employee stock purchase, savings and similar plans
Published on June 30, 1999
UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the calendar year ended December 31, 1998
[ ] 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 No.: 0-22175
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
EMCORE Corporation 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
EMCORE Corporation
394 Elizabeth Avenue
Somerset, NJ 08873
(732) 271-9090
REQUIRED INFORMATION
EMCORE Corporation 401(k) Savings Plan ("Plan") is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the
requirements of Items 1-3 of Form 11-K, the financial statements and schedules
of the Plan for the two calendar years ended December 31, 1998 and 1997, which
have been prepared in accordance with the financial reporting requirements of
ERISA, are attached hereto as Appendix I and incorporated herein by this
reference.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMCORE Corporation 401(k) Savings Plan
/s/ Thomas G. Werthan June 25, 1999
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Thomas G. Werthan Date
Vice President-Finance
Chief Financial Officer
Trustee
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EMCORE Corporation
401(k) Savings Plan
Financial Statements as of and for the Years Ended December 31, 1998 and 1997,
Supplemental Schedules as of and for the Year Ended December 31, 1998 and
Independent Auditors' Reports
EMCORE CORPORATION
401(k) SAVINGS PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORTS 1-2
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997:
Statements of Net Assets Available for Plan Benefits 3
Statements of Changes in Net Assets Available for Plan Benefits 4
Notes to Financial Statements 5-10
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1998:
Item 27(a) - Schedule of Assets Held for Investment Purposes 11
Item 27(d) - Schedule of Reportable Transactions - Aggregate by Issue 12
INDEPENDENT AUDITORS' CONSENTS 13-14
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
the EMCORE Corporation 401(k) Savings Plan
We have audited the accompanying statement of net assets available for plan
benefits of EMCORE Corporation 401(k) Savings Plan (the "Plan") as of December
31, 1998, and the related statement of changes in net assets available for plan
benefits for the year 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, such financial statements present fairly, in all material
respects, the net assets available for plan benefits of the Plan at December 31,
1998, and the changes in net assets available for plan benefits for the year
then ended in conformity with generally accepted accounting principles.
Our audit was conducted 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 of reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects when considered
in relation to the basic financial statements taken as a whole.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Parsippany, New Jersey
June 21, 1999
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Participants of the EMCORE Corporation 401(k) Savings Plan:
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits presents fairly, in all material respects, the net assets available for
plan benefits of the EMCORE Corporation 401(k) Savings Plan (the "Plan") at
December 31, 1997, and the changes in net assets available for plan benefits for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statement based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
July 17, 1998
Florham Park, New Jersey
EMCORE Corporation
401(k) Savings Plan
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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1. DESCRIPTION OF PLAN
The following description of the EMCORE Corporation 401(k) Plan (the
"Plan") provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's
provisions.
a. General - The Plan is a defined contribution plan established to provide
retirement benefits to eligible employees of EMCORE Corporation (the
"Company"). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Thomas Werthan, Chief
Financial Officer and Vice President - Finance, and Maureen Cymbaluk,
Director of Human Resources, are the Trustees of the Plan.
b. Participation - Individuals become eligible on the first day of the month
immediately following the completion of one month of service provided they
are 20 years of age or older. Each participant's account is credited with
the participant's contribution and allocations of the Company's matching
contribution and Plan earnings.
c Contributions - Participants may elect to contribute to the Plan through a
salary reduction up to the maximum tax deferral amount allowed pursuant to
IRS regulations. Participants may also contribute amounts representing
distributions from other qualified defined benefit or contribution plans.
Effective August 1, 1997, the Company began contributing 50 percent of the
first 6 percent of base compensation that a participant contributes to the
Plan. All employer contributions are invested in the Company's common
stock. The Company may also at its discretion choose to make an additional
profit sharing contribution to participants who are credited with more than
500 hours of service during the plan year and are employed by the Company
on the last day of the year.
d. Vesting - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching and
discretionary contributions plus actual earnings thereon is based on years
of continuous service. A participant becomes 100 percent vested after five
years of credited service, with vesting taking place ratably over such
period. A participant becomes 100 percent vested in all employer
contributions upon reaching age 60, at death, if permanently and totally
disabled, or upon termination of the Plan.
e. Investment Options - Upon enrollment in the Plan, a participant may direct
employee contributions in any percent increments in any of the available
investment options. Participants may change their investment options at any
time. Only employer contributions are invested in EMCORE Corporation common
stock.
Description of investment options:
Money Market:
Prudential Government Securities Trust - Funds are invested in United
States Government securities.
Mutual Funds:
Prudential Utility - Funds are invested in equity and debt securities of
utility companies, including electric, gas, telephone and cable companies.
Prudential Equity - Funds are invested in common stocks of major and
established corporations.
Prudential Small Company - Funds are invested in common stocks selected for
their potential for high return on equity, increased earnings, increasing
or expected dividends and low price/earnings ratios.
Prudential Allocation Strategy/Balanced - Funds are invested in allocations
between stocks, bonds, convertibles and cash.
Prudential Government Income - Funds are invested on bonds backed by the
United States Government or by government-linked agencies.
Putnam Voyager - Funds are invested primarily in common stocks of mid-size
firms.
Alliance Growth - Funds are invested in equity securities issued by
companies with favorable earnings and long-term growth prospects.
Mutual Beacon - Funds are invested in common and preferred stocks and
corporate debt.
Aim Aggressive Growth - Funds are invested in equity securities of small to
medium-sized companies.
Oppenheimer Quest Opportunity Value - Funds are invested among stocks,
bonds and cash.
Kemper-Dreman High Return - Funds are invested in common stocks that pay
high dividends relative to the dividend yield of the S&P 500 index.
EMCORE Corporation Stock: Funds are invested in common stock of EMCORE
Corporation.
f. Payment of Benefits - The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested account. On
termination of service due to death, disability or retirement, a
participant or their beneficiary may elect to receive either a lump-sum
amount equal to the value of the participant's vested interest in his or
her account or annual installments over a ten-year period. If an employee
is terminated prior to age 60 for other reasons, the employee may request
distribution of their vested account balance. Balances less than $5,000 are
distributed within 90 days of termination.
g. Forfeitures - If a participant's employment terminates for reasons other
than retirement before attaining age 60, disability or death, the unvested
portion of the individual's account is forfeited. Forfeitures of employer
matching contributions shall be used to reduce future employer
contributions. Forfeitures were approximately $11,000 at December 31, 1998.
h. Continuity of Plan - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants receive the value of the vested
interest in his or her account as a lump-sum distribution.
i. Participant Loans - Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50
percent of their vested account balance. Loan transactions are treated as
transfers to (from) the investment fund(s), from (to) the Participants'
Loan Fund. Loan terms range from 1-5 years or up to 25 years for the
purchase of a primary residence. Loans are collateralized by the balance in
the participant's account and bear interest at a rate commensurate with
local prevailing rates as determined quarterly by the Plan administrator.
Interest rates in 1998 ranged from 7.5 percent to 8.5 percent. Principal
and interest is paid ratably through bi-weekly payroll deductions.
j. Administrative Fees - All administrative expenses of the Plan are paid by
the Company. Fees paid by the Company on behalf of the Plan amounted to
approximately $18,000 and $13,200 for the years ended December 31, 1998 and
1997, respectively.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
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 reported amounts of assets,
liabilities, and the reported amount of changes during the reporting
period. The preparation of financial statements in conformity with
generally accepted accounting principles also requires management to make
estimates and assumptions that affect the disclosures of contingent assets
and liabilities at the date of the financial statements. Actual results
could differ from those estimates.
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Shares in mutual funds are valued based on the quoted
market prices of the underlying securities which represent the net asset
value of shares held by the Plan. The Company stock is valued at its quoted
market price. Participants' loans are valued at cost which approximates
fair value.
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation (depreciation) in the fair value of its
investments which consists of both realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Payment of Benefits - Benefits are recorded when paid. There were no
outstanding benefits payable to terminated employees as of December 31,
1998.
3. INVESTMENTS
The fair values of the individual investments that represent 5% or more of
the Plan's assets as of December 31, 1998 and 1997 are as follows:
4. TAX STATUS
The Company adopted a non-standardized prototype plan which received an
Internal Revenue Service opinion letter dated March 11, 1994 which stated
that the Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code (the "Code"). The Plan administrator
believes that the Plan is currently being operated in compliance with the
applicable requirements of the Internal Revenue Code.
5. STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
The changes in net assets available for plan benefits by fund for the year
ended December 31, 1998 are as follows:
EMCORE CORPORATION
401(K) SAVINGS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-45827, 333-27507, 333-39547, and 333-36445 of EMCORE Corporation on Form S-8
of our report dated June 21, 1999, appearing in this Annual Report on Form 11-K
of EMCORE Corporation 401(k) Savings Plan for the year ended December 31, 1998.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Parsippany, New Jersey
June 29, 1999
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-27507, 333-39547, 333-36445 and 333-45827) of
EMCORE Corporation of our report dated July 17, 1998, relating to the financial
statements of the EMCORE Corporation 401(k) Savings Plan, which appear in this
Form 11-K.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Florham Park, NJ
June 27, 1999