-----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, Kl9WPJdda8wwJLgE7qQp00RfWP6ejOv/0esgrY0NUp0Tgu/7WJmWm2dFYAvDZtnH F5yTGOc8JHxVBtzCvDaWZQ== 0000950005-96-000412.txt : 19960701 0000950005-96-000412.hdr.sgml : 19960701 ACCESSION NUMBER: 0000950005-96-000412 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WATKINS JOHNSON CO CENTRAL INDEX KEY: 0000105006 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 941402710 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05631 FILM NUMBER: 96588145 BUSINESS ADDRESS: STREET 1: 3333 HILLVIEW AVE CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4154934141 MAIL ADDRESS: STREET 1: 3333 HILLVIEW AVENUE CITY: PALO ALTO STATE: CA ZIP: 94304-1223 11-K 1 FORM 11-K WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN Financial Statements and Supplemental Schedules For the Years Ended December 31, 1995 and 1994 and Independent Auditors' Report WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 AND 1994 AND FOR THE YEARS THEN ENDED: Statements of Net Assets Available for Benefits with Fund Information 2-3 Statements of Changes in Net Assets Available for Benefits with Fund Information 4-5 Notes to Financial Statements 6-8 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1995 AND FOR THE YEAR THEN ENDED: Schedule 1--Assets Held For Investment Purposes 9 Schedule 2--Reportable Transactions 10-12 Deloitte & Touche LLP - ------------ ----------------------------------------------------------------- 50 Fremont Street Telephone: (415) 247-4000 San Francisco, California 94105-2230 Facsimile: (415) 247-4329 INDEPENDENT AUDITORS' REPORT The Administrative Committee, Watkins-Johnson Employees' Investment Plan: We have audited the accompanying statements of net assets available for benefits of Watkins-Johnson Employees' Investment Plan (the "Plan") as of December 31, 1995 and 1994, and the related statements of changes in net assets available for benefits for the years 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 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1995 and 1994, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information by fund is presented for the purpose of additional analysis of the basic financial statements rather than to present information regarding the net assets available for benefits and changes in net assets available for benefits of the individual funds, and is not a required part of the basic financial statements. The accompanying supplemental schedules, listed in the foregoing table of contents, are presented for the purpose of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental information by fund and the supplemental schedules are the responsibility of the Plan's management. Such supplemental information by fund and supplemental 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 May 24, 1996 - ---------------- Deloitte Touche Tohmatsu International - ---------------- WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, DECEMBER 31, 1995
Supplemental Information ----------------------------------------------------------------------------- Retirement Government Fixed Total Money Market Income Fund Magellan Fund OTC Portfolio Balanced Fund ------------ ------------ ----------- ------------- ------------- ------------- Assets: Cash and cash equivalents $ 305,418 - - - - - Deposit contracts 37,601,324 - $37,601,324 - - - ------------ ------------ ----------- ------------ ------------ ------------ Total 37,906,742 - 37,601,324 - - - ------------ ------------ ----------- ------------ ------------ ------------ Investments (at fair value): Fidelity mutual funds 72,828,734 $ 3,413,260 5,752,804 $ 30,944,009 $ 10,745,759 $ 16,609,403 Common stock of Plan sponsor (cost of $5,197,702) 6,385,269 - - - - - ------------ ------------ ----------- ------------ ------------ ------------ Total 79,214,003 3,413,260 5,752,804 30,944,009 10,745,759 16,609,403 ------------ ------------ ----------- ------------ ------------ ------------ Total Investments 117,120,745 3,413,260 43,354,128 30,944,009 10,745,759 16,609,403 Receivables: Employer contributions - - - - - - Interest and dividends 18,948 - - - - - ------------ ------------ ----------- ------------ ------------ ------------ Total 18,948 - - - - - ------------ ------------ ----------- ------------ ------------ ------------ Total Assets 117,139,693 3,413,260 43,354,128 30,944,009 10,745,759 16,609,403 ------------ ------------ ----------- ------------ ------------ ------------ Liabilities: Expenses payable 14,388 245 8,737 2,342 831 1,208 Purchase of Securities & Interest 36,194 - 36,194 - - - ------------ ------------ ----------- ------------ ------------ ------------ Total Liabilities 50,582 245 44,931 2,342 831 1,208 ------------ ------------ ----------- ------------ ------------ ------------ Net Assets Available for Benefits $117,089,111 $ 3,413,015 $43,309,197 $ 30,941,667 $ 10,744,928 $ 16,608,195 ============ ============ =========== ============ ============ ============
Supplemental Information ------------------------------------------------------------------ Watkins- Johnson Growth & Intermediate Overseas Stock Fund Income Bond Fund ----------- ------------- ------------ ---------- Assets: Cash and cash equivalents $ 305,418 - - - Deposit contracts - - - - ----------- ------------- ------------ ---------- - Total 305,418 - - - ----------- ------------- ------------ ---------- Investments (at fair value): Fidelity mutual funds - $ 3,427,187 $ 1,136,000 $ 800,312 Common stock of Plan sponsor (cost of $5,197,702) 6,385,269 - - - ----------- ------------- ------------ ---------- Total 6,385,269 3,427,187 1,136,000 800,312 ----------- ------------- ------------ ---------- Total Investments 6,690,687 3,427,187 1,136,000 800,312 Receivables: Employer contributions - - - - Interest and dividends 18,948 - - - ----------- ------------- ------------ ---------- Total 18,948 - - - ----------- ------------- ------------ ---------- Total Assets 6,709,635 3,427,187 1,136,000 800,312 ----------- ------------- ------------ ---------- Liabilities: Expenses payable 464 375 100 86 Purchase of Securities & Interest - - - - ----------- ------------- ------------ ---------- Total Liabilities 464 375 100 86 ----------- ------------- ------------ ---------- Net Assets Available for Benefits $ 6,709,171 $ 3,426,812 $ 1,135,900 $ 800,226 =========== ============= ============ ========== See notes to financial statements.
-2- WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, DECEMBER 31, 1994
Supplemental Information ----------------------------------------------------------------------------------- Retirement Watkins- Government Fixed Income Magellan OTC Balanced Johnson Total Money Market Fund Fund Portfolio Fund Stock Fund ------------ ------------ ----------- ----------- ---------- ----------- ---------- Assets: Cash and cash equivalents $ 190,313 - - - - - $ 190,313 Deposit contracts 48,771,667 - $48,771,667 - - - - ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total 48,961,980 - 48,771,667 - - - 190,313 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Investments (at fair value): Fidelity mutual funds 48,457,948 $2,908,248 1,196,343 $21,518,558 $6,421,503 $16,413,296 - Corporate stocks 2,726,713 - - - - - 2,726,713 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total 51,184,661 2,908,248 1,196,343 21,518,558 6,421,503 16,413,296 2,726,713 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total Investments 100,146,641 2,908,248 49,968,010 21,518,558 6,421,503 16,413,296 2,917,026 Receivables: Employer contributions 3,194,198 57,908 823,131 971,749 391,467 802,049 147,894 Interest and dividends 11,123 - - - - - 11,123 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total 3,205,321 57,908 823,131 971,749 391,467 802,049 159,017 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total Assets 103,351,962 2,966,156 50,791,141 22,490,307 6,812,970 17,215,345 3,076,043 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Liabilities: Expenses payable 15,065 473 7,223 3,341 1,033 2,524 471 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Total Liabilities 15,065 473 7,223 3,341 1,033 2,524 471 ------------ ---------- ----------- ----------- ---------- ----------- ---------- Net Assets Available for Benefits $103,336,897 $2,965,683 $50,783,918 $22,486,966 $6,811,937 $17,212,821 $3,075,572 ============ ========== =========== =========== ========== =========== ========== See notes to financial statements.
-3- WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, YEAR ENDED DECEMBER 31, 1995
Supplemental Information -------------------------------------------------------------------------- Retirement Government Money Fixed Income Magellan OTC Total Market Fund Fund Portfolio -------------- -------------- -------------- ------------- -------------- ADDITIONS: Investment Earnings: Interest $ 2,988,881 $ 2,987,110 - - Dividends 3,585,772 $ 187,310 - $ 1,786,159 $ 613,324 -------------- -------------- -------------- ------------- -------------- Total 6,574,653 187,310 $ 2,987,110 1,786,159 613,324 -------------- -------------- -------------- ------------- -------------- Net appreciation (depreciation) in fair value of investments 11,467,825 - - 6,437,175 2,099,375 Trustee fees (39,160) (991) (18,645) (8,700) (3,042) -------------- -------------- -------------- ------------- -------------- Total 11,428,665 (991) (18,645) 6,428,475 2,096,333 -------------- -------------- -------------- ------------- -------------- Total investments earnings 18,003,318 186,319 2,968,465 8,214,634 2,709,657 -------------- -------------- -------------- ------------- -------------- Contributions: Employer 2,404,451 76,550 514,244 743,620 309,630 Employee 7,268,512 200,175 1,479,579 2,240,400 988,113 -------------- -------------- -------------- ------------- -------------- Total 9,672,963 276,725 1,993,823 2,984,020 1,297,743 -------------- -------------- -------------- ------------- -------------- Total additions 27,676,281 463,044 4,962,288 11,198,654 4,007,400 -------------- -------------- -------------- ------------- -------------- DEDUCTIONS: Distributions to participants (13,924,067) (413,815) (6,368,621) (3,254,828) (1,017,021) -------------- -------------- -------------- ------------- -------------- Increase (decrease) in net assets before interfund transfers 13,752,214 49,229 (1,406,333) 7,943,826 2,990,379 Interfund transfers - 398,103 (6,068,388) 510,875 942,612 -------------- -------------- -------------- ------------- -------------- Net Increase (decrease) 13,752,214 447,332 (7,474,721) 8,454,701 3,932,991 Net assets available for benefits, January 1 103,336,897 2,965,683 50,783,918 22,486,966 6,811,937 -------------- -------------- -------------- ------------- -------------- Net assets available for benefits, December 31 $ 117,089,111 $ 3,413,015 $ 43,309,197 $ 30,941,667 $ 10,744,928 ============== ============== ============== ============= ==============
Supplemental Information ------------------------------------------------------------------------------------------ Watkins- Balanced Johnson Growth & Intermediate Overseas Fund Stock Fund Income Bond Fund ------------- -------------- ------------- -------------- ------------ ADDITIONS: Investment Earnings: Interest - 1,771 Dividends $ 728,129 $ 90,741 $ 132,600 $ 29,008 $ 18,501 ------------- -------------- ------------- -------------- ------------- Total 728,129 92,512 132,600 $ 29,008 $ 18,501 ------------- -------------- ------------- -------------- ------------- Net appreciation (depreciation) in fair value of investments 1,614,572 1,063,345 240,541 17,298 (4,481) Trustee fees (4,840) (1,734) (791) (236) (181) ------------- -------------- ------------- -------------- ------------- Total 1,609,732 1,061,611 239,750 17,062 (4,662) ------------- -------------- ------------- -------------- ------------- Total investments earnings 2,337,861 1,154,123 372,350 46,070 13,839 ------------- -------------- ------------- -------------- ------------- Contributions: Employer 522,109 197,555 26,186 5,822 8,735 Employee 1,540,877 604,889 119,100 22,352 73,027 ------------- -------------- ------------- -------------- ------------- Total 2,062,986 802,444 145,286 28,174 81,762 ------------- -------------- ------------- -------------- ------------- Total additions 4,400,847 1,956,567 517,636 74,244 95,601 ------------- -------------- ------------- -------------- ------------- DEDUCTIONS: Distributions to participants (2,248,929) (280,673) (302,810) (9,771) (27,599) ------------- -------------- ------------- -------------- ------------- Increase (decrease) in net assets before interfund transfers 2,151,918 1,675,894 214,826 64,473 68,002 Interfund transfers (2,756,544) 1,957,705 3,211,986 1,071,427 732,224 ------------- -------------- ------------- -------------- ------------- Net Increase (decrease) (604,626) 3,633,599 3,426,812 1,135,900 800,226 Net assets available for benefits, January 1 17,212,821 3,075,572 - - - ------------- -------------- ------------- -------------- ------------- Net assets available for benefits, December 31 $ 16,608,195 $ 6,709,171 3,426,812 $ 1,135,900 $ 800,226 ============= ============== ============= ============== ============= See notes to financial statements.
-4- WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, YEAR ENDED DECEMBER 31, 1994
Supplemental Information --------------------------------------- Retirement Government Money Fixed Income Total Market Fund -------------- --------------- --------------- ADDITIONS: Investment Earnings: Interest $ 3,490,952 - $ 3,490,952 Dividends 1,645,258 $ 103,107 - -------------- --------------- --------------- Total 5,136,210 103,107 $ 3,490,952 -------------- --------------- --------------- Net appreciation (depreciation) in fair value of investments (2,516,210) - - Trustee fees (30,074) (897) (14,822) -------------- --------------- --------------- Total (2,546,284) (897) (14,822) -------------- --------------- --------------- Total investments earnings 2,589,926 102,210 3,476,130 -------------- --------------- --------------- Contributions: Employer 3,194,198 57,908 823,131 Employee 6,077,422 168,832 1,351,122 -------------- --------------- --------------- Total 9,271,620 226,740 2,174,253 -------------- --------------- --------------- Total additions 11,861,546 328,950 5,650,383 -------------- --------------- --------------- DEDUCTIONS: Distributions to participants (8,751,601) (284,041) (3,444,886) -------------- --------------- --------------- Increase (decrease) in net assets before interfund transfers 3,109,945 44,909 2,205,497 Transfers between funds - 512,345 (3,078,152) -------------- --------------- --------------- Net Increase (decrease) 3,109,945 557,254 (872,655) Net assets available for benefits, January 1 100,226,952 2,408,429 51,656,573 -------------- --------------- --------------- Net assets available for benefits, December 31 $ 103,336,897 $ 2,965,683 $ 50,783,918 ============== =============== ===============
Supplemental Information ---------------------------------------------------------------------------------- Watkins- Magellan OTC Balanced Johnson Fund Portfolio Fund Stock Fund --------------- -------------- -------------- -------------- ADDITIONS: Investment Earnings: Interest - - - - Dividends $ 864,469 $ 56,515 $ 566,511 $ 54,656 --------------- -------------- -------------- -------------- Total 864,469 56,515 566,511 54,656 --------------- -------------- -------------- -------------- Net appreciation (depreciation) in fair value of investments (1,334,633) (239,116) (1,624,707) 682,246 Trustee fees (6,552) (1,930) (5,118) (755) --------------- -------------- -------------- -------------- Total (1,341,185) (241, 046) (1,629,825) 681,491 --------------- -------------- -------------- -------------- Total investments earnings (476,716) (184,531) (1,063,314) 736,147 --------------- -------------- -------------- -------------- Contributions: Employer 971,749 391,467 802,049 147,894 Employee 1,933,889 774,002 1,649,823 199,754 --------------- -------------- -------------- -------------- Total 2,905,638 1,165,469 2,451,872 347,648 --------------- -------------- -------------- -------------- Total additions 2,428,922 980,938 1,388,558 1,083,795 --------------- -------------- -------------- -------------- DEDUCTIONS: Distributions to participants (1,552,084) (493,516) (2,872,449) (104,625) --------------- -------------- -------------- -------------- Increase (decrease) in net assets before interfund transfers 876,838 487,422 (1,483,891) 979,170 Transfers between funds 1,230,233 278,796 504,704 552,074 --------------- -------------- -------------- -------------- Net Increase (decrease) 2,107,071 766,218 (979,187) 1,531,244 Net assets available for benefits, January 1 20,379,895 6,045,719 18,192,008 1,544,328 --------------- -------------- -------------- -------------- Net assets available for benefits, December 31 $ 22,486,966 $ 6,811,937 $ 17,212,821 $ 3,075,572 =============== ============== ============== ============== See notes to financial statements.
-5- WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The Watkins-Johnson Employees' Investment Plan (the Plan) was created by Watkins-Johnson Company effective January 1, 1967. The Plan, amended as of January 1, 1991, conforms to the requirements of the Employee Retirement Income Security Act of 1974 (ERISA), and is in compliance with the Tax Reform Act of 1986. The Plan added the Salary Deferral Plan, known as a 401(k) Plan in reference to the Internal Revenue Code Section 401(k) on April 1, 1983. Watkins-Johnson Company terminated the Profit Sharing portion of the Plan on January 1, 1995, and restated the Plan as Watkins-Johnson Employees' Investment Plan. A Company match of up to a maximum of 3% of regular compensation was added to the Plan to replace the Profit Sharing portion. Participants should refer to the Plan Agreement for a more complete description of the Plan's provisions. Beginning January 1, 1995, employees of Watkins-Johnson Company on U.S. payroll are generally eligible to participate after 90 days of service. In prior periods, the eligibility requirement was one year. Participant and Company contributions are fully vested. The Fidelity Retirement Government Money Market Portfolio invests in obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and in repurchase agreements secured by these obligations. The Fixed Income Fund principally consists of the following deposits for unsecured contracts with a fixed interest rate:
1995 1994 ---------- ----------- Bankers Trust Company, interest at 8.48%, matured in June 1995 $ - $13,415,630 Continental Assurance Company, interest at 4.90%, matures in June 1997 960,881 4,071,426 Continental Assurance Company, interest at 7.43%, matures in December 1999 2,720,767 3,944,043 New York Life Insurance Company, interest at 7.00%, 50% matures in December 1998 50% matures in June 1999 7,710,425 7,752,411 Peoples' Security Life Insurance Company, interest at 5.04%, matures in March 2000 4,051,209 -
-6-
1995 1994 ----------- ----------- Protective Life Insurance Company, interest at 8.46%, matured in June 1995 - 6,709,673 Provident Life and Accident Insurance Company, interest at 5.10%, 50%, matures in July 1996 50% matures in June 1997 2,178,916 6,369,304 Sun Life Insurance Company of America, interest at 7.07%, matures in June 1998 2,437,238 2,449,093 Fidelity Managed Income Portfolio II (MIPII) 15,124,963 - Transamerica Occidental Life Insurance Company, interest at 6.74%, 50% matures in December 1996 50% matures in December 1997 2,416,925 4,060,087 ----------- ----------- Total deposit contracts 37,601,324 48,771,667 Fidelity Fixed Income Fund 5,752,804 1,196,343 ----------- ----------- Total Fixed Income Fund $43,354,128 $49,968,010 =========== ===========
The Fidelity Magellan Fund is a growth fund and invests in stock of both well-known and lesser-known foreign and domestic companies with above-average growth potential. The Fidelity OTC Portfolio is a growth fund and invests primarily in securities traded on the over-the-counter securities market including common stocks, preferred stocks, securities convertible into common stocks and debt securities. The Fidelity Balanced Fund is a growth and income fund and invests in investment grade or higher bonds and other high-yielding securities, including common and preferred stocks. The Watkins-Johnson Stock Fund invests primarily in Watkins-Johnson Company's common stock. At December 31, 1995 and 1994, the Plan owned 145,949 and 91,266 shares, respectively, representing 1.8% and 1.2%, respectively, of total Watkins-Johnson Company common stock shares. The Fidelity Intermediate Bond Fund seeks a high level of current income. This fund invests in bonds rated BBB or better with a dollar-weighted average maturity of between 3 and 10 years. The Fidelity Growth and Income Portfolio seeks long-term capital appreciation, current income, and growth of income. The fund invests primarily in stocks, and also in a broad range of convertibles and fixed-income securities. The Fidelity Overseas Fund seeks long-term capital appreciation, primarily through investments in foreign securities. The description of each Fidelity Mutual Fund's investment objective, as provided above, is as stated in the individual fund's prospectus. The Plan, as amended, allows all participants to direct contributions to the funds of their choice. -7- 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. The Plan obtained its latest determination letter in August 1995, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and was tax-exempt as of December 31, 1995. 2. SIGNIFICANT ACCOUNTING POLICIES Cash and cash equivalents are highly liquid investments with a maturity of three months or less. Deposit contracts are stated at contract value (cost plus accumulated interest) and are benefit responsive. Investments are stated at fair value based on quoted market prices; the unrealized difference between cost and market is included in determining Plan net assets. Dividend and interest income are recorded on the accrual basis. Administrative expenses incurred on behalf of the Plan are paid by Watkins-Johnson Company except for trustee fees which are paid by the Plan. Such fees are recorded on the accrual basis. Contributions are matched bi-weekly at the rate of 100% of the first 2% of regular compensation contributed by participants, and 50% of the next 2% contributed, up to a maximum Company matching of 3% of regular compensation. A participant may contribute a maximum of 15% of the participant's regular compensation. Distributions for in-service withdrawals, voluntary withdrawals, age 59-1/2 withdrawals, hardship and rollover withdrawals may be taken at any time by the participant. Upon termination, death, or permanent disability the participant or participant's designated beneficiary may take a lump sum distribution, periodic payments or leave funds in the Plan until age 70-1/2. Forfeitures recorded in 1995 relate to activity originating prior to January 1, 1995. Total forfeitures recorded in 1995 and 1994 were $21,846 and $57,668, respectively, and were allocated to individual active participants in the ratio that each such participant's regular compensation bore to the aggregate of such regular compensation for all eligible Plan participants for the applicable Plan year. 3. SUBSEQUENT EVENTS On January 1, 1996, the Company eliminated the 90 day service requirement for participation in the Plan so that employees become eligible immediately upon their date of hire. In 1996, the Company dissolved the Watkins-Johnson Employee Stock Ownership Plan and its assets were transferred as another source to the Employees' Investment Plan. -8- Schedule 1 WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN ITEM 27a--SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995
Number of Identity of Issue Description of Investment Shares Cost Fair Value - --------------------------------------------- ------------------------------------ ----------- ------------ ------------ Fidelity Management Trust Company Retirement Government Money Market $ 3,413,245 $ 3,413,260 Fidelity Managed Income Portfolio II Fixed Income Fund (Deposit Contracts) 15,124,963 15,124,963 Continental Assurance Company Fixed Income Fund (Deposit Contracts) 3,681,648 3,681,648 New York Life Insurance Company Fixed Income Fund (Deposit Contracts) 7,710,425 7,710,425 Peoples Security Life Fixed Income Fund (Deposit Contracts) 4,051,209 4,051,209 Provident Life and Accident Insurance Company Fixed Income Fund (Deposit Contracts) 2,178,916 2,178,916 Sun America Life Insurance Company Fixed Income Fund (Deposit Contracts) 2,437,238 2,437,238 Transamerica Occidental Life Insurance Company Fixed Income Fund (Deposit Contracts) 2,416,925 2,416,925 Fidelity Management Trust Company Fixed Income Fund (Cash Portfolio) 5,752,804 5,752,804 Fidelity Management Trust Company Magellan Fund 359,898 25,573,920 30,944,009 Fidelity Management Trust Company OTC Portfolio 354,295 9,375,712 10,745,759 Fidelity Management Trust Company Balanced Fund 1,228,506 15,745,829 16,609,403 Fidelity Management Trust Company Growth & Income 126,698 3,191,872 3,427,187 Fidelity Management Trust Company Intermediate Bond 109,126 1,118,933 1,136,000 Fidelity Management Trust Company Overseas Fund 27,531 805,420 800,312 Watkins-Johnson Company Common Stock 145,959 5,503,120 6,690,687 ------------ ------------ Total Investments $108,082,179 $117,120,745 ============ ============
-9- Schedule 2 WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (One or a Series of Transactions Exceeding 5% of the Fair Value of the Plan Assets at the Beginning of the Year)
Fair Value Identity of Party of Asset on Net Gain Involved Description of Asset Purchase Price Selling Price Cost of Asset Transaction Date or (Loss) - ------------------------ -------------------------- -------------- ------------- ------------- ---------------- ---------- Single Transactions:(1) Bankers Trust Fixed Income Fund (Deposit - $ 11,750,000 $ 11,750,000 $ 11,750,000 * Contract) Protective Life Fixed Income Fund(Deposit - 6,851,030 6,851,030 6,851,030 * Contracts) (1) No expenses were incurred with any reportable transaction. * For each transaction, fair value (contract value) was equal to cost and accumulated interest.
-10- Schedule 2 (continued) WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (One or a Series of Transactions Exceeding 5% of the Fair Value of the Plan Assets at the Beginning of the Year)
Identity of Party Involved Description of Asset Purchase Price Selling Price Cost of Asset - --------------------------- --------------------------------- ----------------- ----------------- ---------------- Series of Transactions:(1) Bankers Trust Fixed Income Fund (Deposit - $ 13,935,322 $ 13,935,322 Contract) (3 Transactions) Fidelity Managed Income Fixed Income Fund (Deposit $ 16,607,211 - 16,607,211 Portfolio II (MIPII) Contracts) (93 Transactions) Protective Life Fixed Income Fund (Deposit - 7,160,494 7,160,494 Contract) (3 Transactions) Cash Portfolio Fixed Income Fund 36,372,879 - 36,372,879 (93 Transactions) Cash Portfolio Fixed Income Fund - 31,973,443 31,973,443 (173 Transactions) Fidelity Management Trust Watkins-Johnson Fund 11,838,225 - 11,838,225 Company (235 Transactions)
Fair Value Identity of Party of Asset on Net Gain Involved Description of Asset Transaction Date or (Loss) - --------------------------- --------------------------------- ------------------- ----------- Series of Transactions:(1) Bankers Trust Fixed Income Fund (Deposit $ 13,935,322 * Contract) (3 Transactions) Fidelity Managed Income Fixed Income Fund (Deposit 16,607,211 * Portfolio II (MIPII) Contracts) (93 Transactions) Protective Life Fixed Income Fund (Deposit 7,160,494 * Contract) (3 Transactions) Cash Portfolio Fixed Income Fund 36,372,879 * (93 Transactions) Cash Portfolio Fixed Income Fund 31,973,443 * (173 Transactions) Fidelity Management Trust Watkins-Johnson Fund 11,838,225 * Company (235 Transactions) (1) No expenses were incurred with any reportable transaction. * For each transaction, fair value (contract value) was equal to cost and accumulated interest.
Schedule 2 (continued) WATKINS-JOHNSON EMPLOYEES' INVESTMENT PLAN ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (One or a Series of Transactions Exceeding 5% of the Fair Value of the Plan Assets at the Beginning of the Year)
Purchase Selling Cost of Identity of Party Involved Description of Asset Price Price Asset - ---------------------------- -------------------------------------- --------------- ------------- ------------- Series of Transactions:(1) Fidelity Management Trust Watkins-Johnson Fund - 9,212,225 8,517,259 Company (164 Transactions) Fidelity Management Trust Magellan 12,362,013 - 12,362,013 Company (241 Transactions) Fidelity Management Trust Magellan - 9,373,737 8,096,157 Company (206 Transactions) Fidelity Management Trust OTC Portfolio 5,548,361 - 5,548,361 Company (209 Transactions) Fidelity Management Trust Balanced Fund 6,799,489 - 6,799,489 Company (230 Transactions) Fidelity Management Trust Balanced Fund - 8,217,953 8,185,781 Company (210 Transactions) Fidelity Management Trust Retirement Government Money Market 7,795,613 - 7,795,613 Company Fund (390 Transactions) Fidelity Management Trust Retirement Government Money Market - 7,290,601 7,290,601 Company Fund (352 Transactions)
Fair Value of Asset on Net Gain Identity of Party Involved Description of Asset Transaction Date or (Loss) - ---------------------------- -------------------------------------- ------------------ ------------ Series of Transactions:(1) Fidelity Management Trust Watkins-Johnson Fund 9,212,225 694,966 Company (164 Transactions) Fidelity Management Trust Magellan 12,362,012 * Company (241 Transactions) Fidelity Management Trust Magellan 8,096,157 1,277,580 Company (206 Transactions) Fidelity Management Trust OTC Portfolio 5,548,361 * Company (209 Transactions) Fidelity Management Trust Balanced Fund 6,799,489 * Company (230 Transactions) Fidelity Management Trust Balanced Fund 8,217,853 32,072 Company (210 Transactions) Fidelity Management Trust Retirement Government Money Market 7,795,613 * Company Fund (390 Transactions) Fidelity Management Trust Retirement Government Money Market 7,290,601 * Company Fund (352 Transactions) (1) No expenses were incurred with any reportable transaction. * For each transaction, fair value was equal to cost.
Deloitte & Touche LLP - ------------ ----------------------------------------------------------------- 50 Fremont Street Telephone: (415) 247-4000 San Francisco, California 94105-2230 Facsimile: (415) 247-4329 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-39962 of the Watkins-Johnson Employees' Investment Plan (the "Plan") on Form S-8 of our report dated May 24, 1996, appearing in this Annual Report on Form 11-K of the Plan for the year ended December 31, 1995. /s/ Deloitte & Touche LLP June 26, 1996 - ---------------- Deloitte Touche Tohmatsu International - ---------------- -----END PRIVACY-ENHANCED MESSAGE-----