-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MovwKMO0RNAAKn+F5nigfGutn/3CUVYpuXsNsU44t1g14t4TJDrGBzxRtsLUGrec OsN0ElGSwnnyT+jo7iPXMw== /in/edgar/work/20000628/0000950152-00-004992/0000950152-00-004992.txt : 20000920 0000950152-00-004992.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950152-00-004992 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCS HEALTHCARE INC CENTRAL INDEX KEY: 0001004990 STANDARD INDUSTRIAL CLASSIFICATION: [5912 ] IRS NUMBER: 341816187 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-27602 FILM NUMBER: 662719 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PKWY STREET 2: STE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: 2165143350 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 11-K 1 e11-k.txt NCS HEALTHCARE, INC. 11-K 1 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 [X] Annual report pursuant to Section 15 (d) of the Securities Exchange Act of 1934 (No fee required) For the period ended December 31, 1999 OR [ ] Transition report pursuant to Section 15 (d) of the Securities Exchange Act of 1934 (No fee required) A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: NCS HealthCare Employee Savings Plan and Trust B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: NCS HealthCare, Inc. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 2 Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. NCS HealthCare Employee Savings Plan and Trust Date: June 28, 2000 By /s/ Gerald D. Stethem ----------------------------------- Gerald D. Stethem Chief Financial Officer 3 NCS HealthCare Employee Savings Plan and Trust Financial Statements and Supplemental Schedule December 31, 1999 and 1998 and the Year Ended December 31, 1999 TABLE OF CONTENTS Report of Independent Auditors................................................1 FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits...............................3 Statement of Changes in Net Assets Available for Benefits.....................4 Notes to Financial Statements.................................................5 SUPPLEMENTAL SCHEDULE Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year.........................................9 4 Report of Independent Auditors The Trustees NCS HealthCare Employee Savings Plan and Trust We have audited the accompanying statements of net assets available for benefits of NCS HealthCare Employee Savings Plan and Trust as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. 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 audits. Except as explained in the following paragraph, we conducted our audits in accordance with auditing standards generally accepted in the United States. 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. As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, investment assets held by Great-West Life & Annuity Insurance Company, the custodian of the Plan, and the transactions in those assets were excluded from the scope of our audit of the Plan's 1998 financial statements, except for comparing the information provided by the custodian, which is summarized in Note C, with the related information included in the financial statements. Because of the significance of the information that we did not audit, we are unable to, and do not, express an opinion on the Plan's financial statements as of December 31, 1998. The form and content of the information included in the 1998 financial statements, other than that derived from the information certified by the custodian, have been audited by us and, in our opinion, are presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the financial statements, referred to above, of the NCS HealthCare Employee Savings Plan and Trust as of December 31, 1999, and for the year then ended present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1999, and the changes in its net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States. 1 5 Our audit of the Plan's financial statements as of and for the year ended December 31, 1999, was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes at end of year as of December 31, 1999 is presented for purposes of additional analysis and is not a required part of the financial statements, but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the financial statements for the year ended December 31, 1999 and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Cleveland, Ohio June 22, 2000 2 6 NCS HealthCare Employee Savings Plan and Trust Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 --------------------------------- ASSETS Investments, at fair value $33,990,805 $24,101,110 Contribution receivables Employer -- 71,429 Participant 307,322 403,481 --------------------------------- Total receivables 307,322 474,910 --------------------------------- Net assets available for benefits $34,298,127 $24,576,020 ================================= See accompanying notes to financial statements. 3 7 NCS HealthCare Employee Savings Plan and Trust Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 1999 ADDITIONS Investment income: Net appreciation in fair value of investments $ 5,619,731 Interest and dividends 7,519 ----------------- 5,627,250 Contributions: Participants 6,661,353 Employer 1,110,594 Rollover 911,207 ----------------- 8,683,154 ----------------- Total additions 14,310,404 DEDUCTIONS Benefits paid directly to participants 4,588,297 ----------------- Total deductions 4,588,297 ----------------- Net increase 9,722,107 Net assets available for benefits at beginning of year 24,576,020 ----------------- Net assets available for benefits at end of year $34,298,127 ================= See accompanying notes to financial statements 4 8 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements December 31, 1999 and 1998 and Year Ended December 31, 1999 A. DESCRIPTION OF THE PLAN The following description of the NCS HealthCare Employee Savings Plan and Trust (the "Plan") provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan available to certain employees of NCS HealthCare, Inc. (the Company and Plan Sponsor) who have completed six months of service, attained the age of 18 and completed a minimum of 500 hours of consecutive service, excluding employees covered by a collective bargaining agreement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Each year, participants may contribute up to 15 percent of their pretax annual compensation, as defined in the Plan, limited to the maximum permitted by the Internal Revenue Code. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. In addition, the Company may make matching and special discretionary contributions to the Plan in an amount to be determined each year by the Company. Special discretionary Company contributions are allocated to those participants who are both employed by the Company at the end of the year and have 1,000 hours of service. Effective January 1, 1999, all matching contributions made by the Company on or subsequent to that date are invested in Company stock. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of the Company's contributions, Plan earnings and forfeitures. Allocations of the Company's contributions and Plan earnings are based on the ratio of the participant's account balance in the respective fund to the total fund balance as of the valuation date. Allocation of forfeitures is based on the ratio of the compensation with respect to total compensation for all participants. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 5 9 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) A. DESCRIPTION OF THE PLAN (CONTINUED) VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Participants vest in the employer contributions at a rate of 20 percent per year beginning after one year of service, becoming 100 percent vested after five years of service. Participants or their beneficiaries are entitled to receive the vested portion of the participant account balance, upon normal retirement (age 65), death, disability or termination of employment. Upon termination of employment, a participant's nonvested portion of Company contributions and related earnings are forfeited. There were $139,305 and $78,734 of forfeitures available to allocate among the accounts of all eligible participants as of December 31, 1999 and 1998, respectively. 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% of their account balance. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined monthly by the Plan Administrator. The maximum number of years permitted for repayment is five years, except for loans used for the purchase of a principal residence. PAYMENT OF BENEFITS/WITHDRAWALS Upon retirement, death, disability or termination of service, or plan termination, a participant's normal form of benefits is a life annuity or joint and survivor spouse annuity. Optional forms of distribution include one lump-sum payment, installment payments, or other types of annuities. Participants who prove financial hardship may withdraw a portion of their account balance, as determined by the plan administrator. PLAN TERMINATION 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 will become 100 percent vested in their accounts. 6 10 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) B. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared on the accrual basis of accounting. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. The insurance company pooled separate accounts are valued at quoted market prices that represent the net asset values of shares held by the Plan at year-end. The NCS HealthCare, Inc. Common Stock shares are valued at the quoted market price at year-end in an active market. The participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RECLASSIFICATION Certain amounts in the 1998 financial statements have been reclassified to conform to the 1999 presentation. ADMINISTRATIVE CHARGES Great-West Life and Annuity Insurance Company (Great-West) provides certain recordkeeping and other administrative services to the Plan. These services are paid for by the Plan through a daily variable asset charge that reduces the investment income earned by the Great-West accounts. The annualized variable asset charge is equal to 0.25% at December 31, 1999 (0.65% at December 31, 1998) of the fair value of Great-West accounts. The Company pays for those Plan expenses not borne by the Plan. 7 11 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) C. INVESTMENTS All investment information related to investments held at December 31, 1998 was obtained or derived from information supplied to the plan administrator and certified as complete and accurate by Great-West Life & Annuity Insurance Company. During 1999, the Plan's investments (including investments purchased, sold as well as held during the year) appreciated (depreciated) in fair value as determined by quoted market prices as follows: NET REALIZED AND UNREALIZED APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS ---------------------- Common stock $ (538,996) Shares of registered investment companies 6,158,727 ------------------ $5,619,731 ================== Investments that represent 5% or more of fair value of the Plan's assets are as follows:
DECEMBER 31 1999 1998 --------------------------- Great-West pooled separate accounts: Profile Series I $4,356,003 $3,228,903 American Century - Twentieth Century Ultra Fund 4,643,965 2,776,669 AIM Constellation Fund 2,297,044 1,364,923 Profile Series II 4,926,530 3,646,314 Profile Series III 1,935,363 1,416,427 Maxim Money Market Portfolio -- 1,662,684
8 12 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) D. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets and the significant components of changes in net assets related to the nonparticipant-directed investment is as follows: DECEMBER 31 1999 1998 ------------------------------- Investments, at fair value: NCS Health Care, Inc. common stock $552,577 $ -- =============================== YEAR ENDED DECEMBER 31, 1999 -------------- Change in net assets: Contributions $ 938,350 Net transfers to participant directed funds 153,223 Net realized and unrealized depreciation in fair value (538,996) -------------- $ 552,577 ============== E. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated April 22, 1998, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 9 13 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999
NUMBER OF SHARES OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST VALUE - -------------------------------------------------------------------------------------------------------------------------- 1ER-AWP Interest Bearing Cash 4.500 $ 41 Great-West Guaranteed Certificate Funds: 1CGF 36 Guaranteed Certificate Fund due March 31, 2000 * 5.500 1,202 1CGF 36 Guaranteed Certificate Fund due June 30, 2000 * 5.100 1,750 1CGF 36 Guaranteed Certificate Fund due September 30, 2000* 4.850 3,771 1CGF 36 Guaranteed Certificate Fund due December 31, 2000 * 4.850 6,450 1CGF 36 Guaranteed Certificate Fund due March 31, 2001* 4.850 2,615 1CGF 36 Guaranteed Certificate Fund due June 30, 2001 * 4.750 6,617 1CGF 36 Guaranteed Certificate Fund due September 30, 2001* 4.350 2,819 1CGF 36 Guaranteed Certificate Fund due December 31, 2001* 4.250 14,035 1CGF 36 Guaranteed Certificate Fund due March 31, 2002* 4.700 6,031 1CGF 36 Guaranteed Certificate Fund due June 30, 2002* 5.200 3,527 1CGF 36 Guaranteed Certificate Fund due September 30, 2002* 5.350 3,418 1CGF 36 Guaranteed Certificate Fund due December 31, 2002* 5.800 31,191 1CGF 60 Guaranteed Certificate Fund due December 31, 2001* 5.050 816 1CGF 60 Guaranteed Certificate Fund due June 30, 2002* 5.750 172 1CGF 60 Guaranteed Certificate Fund due September 30, 2002* 5.350 294 1CGF 60 Guaranteed Certificate Fund due December 31, 2002* 5.000 587 1CGF 60 Guaranteed Certificate Fund due March 31, 2003* 5.050 2,869 1CGF 60 Guaranteed Certificate Fund due June 30, 2003* 4.800 1,134
10 14 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued)
NUMBER OF SHARES OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST VALUE - -------------------------------------------------------------------------------------------------------------------------- 1CGF 60 Guaranteed Certificate Fund due September 30, 2003* 4.600 616 1CGF 60 Guaranteed Certificate Fund due December 31, 2003* 4.350 1,203 1CGF 60 Guaranteed Certificate Fund due March 31, 2004* 4.900 653 1CGF 60 Guaranteed Certificate Fund due June 30, 2004* 5.450 603 1CGF 60 Guaranteed Certificate Fund due September 30, 2004* 5.500 664 1CGF 84 Guaranteed Certificate Fund due December 31, 2002 5.000 6,153 1CGF 84 Guaranteed Certificate Fund due March 31, 2003* 5.000 1,240 1CGF 84 Guaranteed Certificate Fund due March 31, 2003* 5.500 4,670 1CGF 84 Guaranteed Certificate Fund due June 30, 2003* 5.650 901 1CGF 84 Guaranteed Certificate Fund due September 30, 2003* 5.200 26,640 1CGF 84 Guaranteed Certificate Fund due December 31, 2003* 5.750 2,042 1CGF 84 Guaranteed Certificate Fund due March 31, 2004* 6.000 3,115 1CGF 84 Guaranteed Certificate Fund due June 30, 2004* 5.500 3,527 1CGF 84 Guaranteed Certificate Fund due September 30, 2004* 5.100 1,812 1CGF 84 Guaranteed Certificate Fund due December 31, 2004* 5.100 5,292 1CGF 84 Guaranteed Certificate Fund due June 30, 2005* 4.850 3,116 1CGF 84 Guaranteed Certificate Fund due September 30, 2005* 4.750 3,102 1CGF 84 Guaranteed Certificate Fund due December 31, 2005* 4.500 3,082 1CGF 84 Guaranteed Certificate Fund due March 31, 2006* 5.050 2,822 1CGF 84 Guaranteed Certificate Fund due June 30, 2006* 5.650 2,537 1CGF 84 Guaranteed Certificate Fund due September 30, 2006* 5.950 2,395 Great-West Pooled Separate Accounts: 1BIMXBI Maxim Bond Index * 9,087 115,288 1BIMXLC Maxim Loomis Sayles Corporate Bond * 18,029 282,704 1BIMXUS Maxim U.S. Government Mortgage Securities 25,773 337,327 1BINXDG Maxim Global Bond * 6,909 75,304 1BSHXST Maxim Short-Term Maturity * 4,915 61,275 1CMMXMM Maxim Money Market * 97,644 1,367,739 1ER-STK NCS HealthCare, Inc. Stock * 229,643 $1,054,075 552,577 1IEUXIE Maxim Index Eurporan * 6,373 99,549 1IFSFAO Fidelity Advisor Overseas * 19,471 380,643 1IFSXIA Maxim Invesco Adr * 4,979 69,112 1IPAXIP Maxim Index Pacific * 20,382 254,632
11 15 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued)
NUMBER OF SHARES OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST VALUE - -------------------------------------------------------------------------------------------------------------------------- 1IWSPGC Putnam Global Growth * 48,536 1,476,654 1LBLCHA Aim Charter * 29,434 908,510 1LBLO15 Orchard Index 500 * 33,563 1,097,419 1LBLXFG Maxim Founder's Growth and Income * 15,327 306,892 1LGRULT American Century Ultra * 134,063 4,643,965 1LGRWIN AIM Weingarten * 37,507 1,175,696 1LGRXGI Maxim Growth Index * 38,755 1,485,452 1LVAFEI Fidelity Advisor Equity Inc. * 23,028 432,791 1LVAFGO Fidelity Advisor Growth Opportunities * 51,662 1,119,796 1LVAPGI Putnam Fund For Growth and Income * 44,745 1,006,406 1LVAXVI Maxim Value Index * 23,601 629,025 1MGRCON AIM Constellation * 78,007 2,297,044 1MGRXTM Maxim T. Rowe Price Mid-Cap Growth * 24,214 406,294 1PBAXP1 Profile Series I * 165,730 4,356,003 1PBAXP2 Profile Series II * 213,868 4,926,530 1PBAXP3 Profile Series III * 96,412 1,935,363 1PBAXP4 Profile Series IV * 26,537 460,601 1PBAXP5 Profile Series V * 9,852 148,734 1SBLO16 Orchard Index 600 * 13,471 251,980 1SGRLDG Lord Abbett Developing Growth * 4,922 68,207 1SVAXAS Maxim Ariel Small-Cap Value * 5,589 95,556 1SVAXLS Maxim Loomis Sayles Small-Cap Value * 21,303 419,589 ---------------- 33,410,181 Participant Loans * 8.0% to 9.75%, with maturity dates through 2019 580,624 ---------------- $33,990,805 ================
* Indicates party-in-interest to the Plan. 12 EX-23 2 ex23.txt EXHIBIT 23 1 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-72243) pertaining to the NCS HealthCare Employee Savings Plan and Trust of our report dated June 22, 2000 with respect to the financial statements and schedule of the NCS HealthCare Employee Savings Plan and Trust included in the Annual Report (Form 11-K) for the year ended December 31, 1999. /s/ Ernst & Young LLP Cleveland, Ohio June 22, 2000 -----END PRIVACY-ENHANCED MESSAGE-----