11-K 1 y61993e11vk.htm FORM 11-K 11-K
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE, SAVINGS AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 
FORM 11-K
(Mark One)
     
þ   Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year ended December 31, 2007
OR
     
o   Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from                 to 
Commission file number 000-06516
A.   Full title of the plan and the address of the plan, if different from that of the issuer named below:
DATASCOPE CORP. 401(K) SAVINGS
AND SUPPLEMENTAL RETIREMENT PLAN
B.   Name of issuer of securities held pursuant to the plan and the address of its principal executive office:
DATASCOPE CORP.
14 Philips Parkway
Montvale, New Jersey 07645
(201) 391-8100
 
 

 


 

DATASCOPE CORP.
401(K) SAVINGS AND SUPPLEMENTAL RETIREMENT PLAN
TABLE OF CONTENTS
REQUIRED INFORMATION
Item 4.   In lieu of the requirements of Items 1-3, the Datascope Corp. 401(k) Savings and Supplemental Retirement Plan (the “Plan”), which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), hereby files financial statements and supplemental schedule for the Plan for the fiscal period ended December 31, 2007. The Plan’s financial statements and supplemental schedule are prepared in accordance with the financial reporting requirements of ERISA.
Financial Statements and Exhibits
         
Financial Statements     Page  
    1  
    2  
    3  
    4  
 
       
SUPPLEMENTAL SCHEDULE:
       
 
       
Schedule H, Line 4i — Schedule of Assets (Held at End of Year) December 31, 2007
    12  
 
       
Exhibit
       
 EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 


Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
Datascope Corp.
401(k) Savings and Supplemental Retirement Plan
14 Philips Parkway
Montvale, New Jersey 07645
We have audited the accompanying statements of net assets available for benefits of the Datascope Corp. 401(k) Savings and Supplemental Retirement Plan (the “Plan”) as of December 31, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 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 Plan as of December 31, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming opinions on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2007 is presented for the purpose of additional analysis and is not a required part of the basic 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.
The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the 2007 audit of the basic 2007 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2007 financial statements taken as a whole.
/s/ SMOLIN, LUPIN & CO., P.A.
Fairfield, New Jersey
June 27, 2008

1


Table of Contents

DATASCOPE CORP.
401(K) SAVINGS AND SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2007 AND 2006
                 
    2007     2006  
ASSETS:
               
 
               
Investments at Fair Value, Including Participant Loans of $1,472,328 and $1,487,365, Respectively
  $ 94,866,568     $ 87,907,922  
 
           
 
               
RECEIVABLES:
               
 
               
Participants’ Contributions
    173,450       379,049  
Employer’s Contributions
    185,176       233,233  
Loan Repayments
    24,025       45,438  
 
           
 
               
Total Receivables
    382,651       657,720  
 
           
 
               
NET ASSETS REFLECTING ALL INVESTMENTS AT FAIR VALUE
    95,249,219       88,565,642  
 
               
Adjustment from fair value to contract value for fully benefit-responsive investment contract
    131,595       524,390  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS
  $ 95,380,814     $ 89,090,032  
 
           
See notes to financial statements.

2


Table of Contents

DATASCOPE CORP.
401(K) SAVINGS AND SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2007
                 
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
               
 
               
Net Investment Income
          $ 6,925,654  
 
               
Contributions:
               
Participants
    5,927,873          
Employer
    1,725,524          
Employee Rollover
    379,560       8,032,957  
 
           
 
TOTAL ADDITIONS
            14,958,611  
 
               
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
               
 
               
Benefits Paid to Participants
    8,656,494          
Administrative Expenses
    11,335          
 
             
 
               
TOTAL DEDUCTIONS
            8,667,829  
 
             
 
               
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
            6,290,782  
 
               
NET ASSETS AVAILABLE FOR BENEFITS – Beginning
            89,090,032  
 
             
 
               
NET ASSETS AVAILABLE FOR BENEFITS – Ending
          $ 95,380,814  
 
             
See notes to financial statements.

3


Table of Contents

DATASCOPE CORP.
401(K) SAVINGS AND SUPPLEMENTAL RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
(1) Description of Plan
          The following description of the Datascope Corp. 401(k) Savings and Supplemental Retirement 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 that covers all eligible employees. The Plan was established by Datascope Corp. (the “Company”) to provide retirement income to its employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
     (b) Eligibility
          Effective April 1, 2007, each employee of the Company who is classified as a full-time employee is automatically enrolled in the Plan commencing on the first day of the calendar month following 30 days of continuous employment. The automatic enrollment contribution rate is set at 2% of eligible compensation. Participants have the option of changing the contribution rate or opting out of the automatic enrollment prior to the commencement date. Prior to April 1, 2007, full-time employees were eligible to participate in the Plan on the first day of the calendar month following 30 days of continuous employment. A minimum age of twenty-one is required to become an active member.
          All other employees of the Company shall be eligible to participate in the Plan after one year of service and 1,000 or more hours of service.
          Effective April 1, 2007, participating employees will be eligible for any Company matching contributions on the date they begin making pre-tax contributions. Prior to this date, participants were eligible for any matching contributions after one year of service.
     (c) Contributions
          Each participant may authorize the Company to reduce their compensation by any whole percentage ranging from 1% to 50%, subject to certain Internal Revenue Service (“IRS”) limitations. For the years ended December 31, 2007 and 2006, the Company matched 50% of participating employee contributions up to a maximum of 6% of compensation. Matching contributions for each plan year are at the sole discretion of the Board of Directors of the Company. Contributions are subject to certain limitations.

4


Table of Contents

(1) Description of Plan (Continued)
     (c) Contributions (Continued)
          The Plan allows for catch-up contributions whereby participants age 50 and over may contribute to the Plan additional amounts above the IRS dollar limits for the year. The maximum catch-up contribution for 2006 and 2007 was $5,000 and will remain at $5,000 in 2008, subject to cost-of-living increases.
     (d) Participant Accounts
          Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) plan earnings. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. The participant directs the investment of his or her entire account. Forfeited balances of terminated participants’ non-vested accounts are used to reduce future Company contributions. Such forfeited amounts that were used to reduce Company contributions during 2007 and 2006 were $130,534 and $399,950, respectively. As of December 31, 2007 and 2006, the forfeited balances were $274,247 and $244,504, respectively.
     (e) Vesting
          Participants are immediately 100% vested in their contributions plus actual earnings thereon. Vesting in the Company’s matching contribution portion of their accounts plus actual earnings thereon is based on years of continuous service as follows:
         
    Vested
Years of Service   Percentage
Less than 2 years
    0 %
After 2 years, but less than 3
    25 %
After 3 years, but less than 4
    50 %
After 4 years, but less than 5
    75 %
After 5 or more years
    100 %
     (f) Participant Loans
          Participants may borrow from their vested accrued benefit a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loans must be repaid in equal installments consisting of principal and interest over a period not to exceed five years, unless the loan is used to purchase a primary residence, in which case the maximum term is fifteen years.

5


Table of Contents

(1) Description of Plan (Continued)
     (f) Participant Loans (Continued)
          The loans are secured by the participant’s vested accrued benefit. Loans that exceed five years bear interest at a rate equal to the rate then being charged for FHA residential mortgages; interest for loans of five years or less are based on a rate of 1% above the prime commercial lending rate. Outstanding loans as of December 31, 2007 and 2006 bear interest at rates of 5% to 9.5%. The loans mature between January 2008 and August 2022 for those outstanding at December 31, 2007 and between February 2007 and August 2019 for those outstanding at December 31, 2006.
     (g) Payment of Benefits
          The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. For participants with account balances that exceed $5,000, the participant may choose to either withdraw their balance or continue to maintain the balance in the Plan.
          A participant with a balance greater than $1,000, but below $5,000 can elect a roll over or receive the distribution directly. If the participant does not make an election, then the distribution will be paid in a direct rollover to an individual retirement plan designated by the Benefits Committee of the Company. The participant’s rollover may be reduced by any reasonable costs to establish such account.
          Participants with balances of $1,000 or less will be paid their entire vested account in a single-sum payment unless they elect otherwise.
(2) Summary of Significant Accounting Policies
     (a) Basis of Accounting
          The financial statements of the Plan are prepared using the accrual method of accounting.

6


Table of Contents

(2) Summary of Significant Accounting Policies (Continued)
     (b) Recent Accounting Pronouncement
          In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. SFAS 157 defines “fair value” as: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In addition, SFAS 157 establishes a fair value hierarchy to be used to classify the source of information used in fair value measurements, new disclosures of assets and liabilities measured at fair value based on their level in the hierarchy, and a modification of the long-standing accounting presumption that the transaction price of an asset or liability equals its initial fair value. SFAS 157 is effective for fiscal years beginning after November 15, 2007 (the Plan’s fiscal year 2008 beginning January 1, 2008). The Plan does not expect the adoption of the provisions of SFAS 157 to have a material effect on the Plan’s net assets available for benefits and changes in net assets available for benefits.
     (c) Use of Estimates
          The process of preparing financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, additions to and deductions from net assets. Such estimates relate primarily to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
     (d) Investment Valuation and Income Recognition
          The Plan’s investments, which consist of mutual funds, units of participation of common/collective trusts, Datascope Corp. common stock, and a pooled separate account, are stated at fair value. Shares of mutual funds and units of participation of common/collective trusts are stated at fair value based on quoted market prices of the net asset value of shares held by the Plan at year-end. The Company stock is valued at its quoted market price at year-end. The Plan’s investment in the pooled separate account is valued at fair value as described in Note 3. Participant loans are stated at cost, which approximates fair value.
          Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date.
     (e) Payment of Benefits
          Benefits are recorded when paid.
     (f) Payment of Administrative Expenses
          It is expected that the Company will provide direct payment of certain administrative expenses of the Plan.

7


Table of Contents

3) Investment Contract with Insurance Company
          The Plan is a party to a fully benefit-responsive investment contract with New York Life. New York Life maintains the contributions in a pooled separate account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. New York Life guarantees principal and accumulated interest on the contract. In accordance with FSP AAG-INV-1, the contract is included in the statement of net assets available for benefits at December 31, 2007 and 2006 at contract discontinuance value which management believes is equivalent to fair value. The contract discontinuance value is the amount that New York Life is contractually obligated to pay under the contract if the Plan were to terminate its interest in the contract without twelve months’ advance written notice. The adjustment from fair value to contract value for the investment contract is based on contract value as reported to the Plan by New York Life. Contract value represents contributions made under the contract, plus guaranteed accumulated interest, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
          The fair value of the investment contract at December 31, 2007 and 2006 was $19,220,581 and $17,066,602, respectively. During 2007 and 2006, the average yield was 5.28% and 4.52%, respectively. During 2007 and 2006, the average crediting interest rate was 4.77% and 4.04%, respectively. The crediting interest rate as determined by New York Life may not be less than zero. The interest rate is reviewed not less frequently than quarterly nor more frequently than daily.
          Certain events, such as the premature termination of the contract by the Plan or the termination of the Plan, would limit the Plan’s ability to transact at contract value with New York Life. The Plan administrator believes the occurrence of such events that would limit the Plan’s ability to transact at contract value with Plan participants is not probable.

8


Table of Contents

(4) Investments
          The following investments represent 5% or more of the Plan’s net assets at December 31, 2007 and 2006:
                 
    2007     2006  
Pooled Separate Account
               
New York Life Insurance Company Anchor Account
    19,220,581       17,066,602  
 
               
Common/Collective Trust
               
Barclays Equity Index Fund G
    18,676,148       19,742,891  
 
               
Mutual Funds
               
Janus Twenty Fund
    12,635,823       7,670,978  
TCW Galileo Dividend Focused Fund N
    10,840,742       11,697,201  
Dodge and Cox International Stock Fund
    6,807,018       5,467,880  
PIMCO Total Return Fund (Admin)
    6,224,752       5,810,138  
Baron Small Cap Fund
    5,701,557       5,385,045  
 
               
Investment income for 2007 is as follows:
               
 
               
Interest – Participant Loans
  $ 116,869          
Interest – Datascope Corp. Stock Fund
    6,999          
Interest – Pooled Separate Account
    810,581          
Dividend Income – Datascope Corp. Stock Fund
    115,312          
Dividend Income and Capital Gains – Mutual Funds
    1,951,211          
Net Appreciation – Mutual Funds
    3,006,993          
Net Appreciation – Common/Collective Trusts
    863,220          
Net Appreciation – Datascope Corp. Stock Fund
       54,469          
 
             
 
               
Total Investment Income, Net
  $ 6,925,654          
 
             
          All earnings related to the New York Life Insurance Company Anchor Account are reflected as interest income.
(5) 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% vested in their accounts.

9


Table of Contents

(6) Reconciliation of Financial Statements to Form 5500
          The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2007 and 2006 to Schedule H of Form 5500:
                 
    2007     2006  
Net Assets Available for Benefits
               
Per the Financial Statements
  $ 95,380,814     $ 89,090,032  
Less: Contributions Receivable
    (358,626 )     (612,282 )
 
           
Net Assets Available for Benefits per Schedule H of Form 5500
  $ 95,022,188     $ 88,477,750  
 
           
          The following is a reconciliation of additions to assets attributed to contributions per the financial statements to Schedule H of Form 5500 for the year ended December 31, 2007:
         
2007 Additions to Net Assets Attributed to Contributions
       
Per the Financial Statements
  $ 8,032,957  
Less: Contributions Receivable at December 31, 2007
    (358,626 )
Add: Contributions Receivable at December 31, 2006
    612,282  
 
     
Total Contributions Income per Schedule H of Form 5500
  $ 8,286,613  
 
     
(7) Tax Status of Plan
          The Plan obtained its latest determination letter on October 5, 2007, 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 (“IRC”). Under the applicable sections of the IRC, the Plan qualifies for tax-exempt status, and therefore, no provisions for income taxes have been included in the Plan’s financial statements.
(8) Related-Party Transactions
          A certain plan investment is a pooled separate account managed by New York Life. New York Life is the trustee as defined by the Plan and therefore, transactions with respect to this investment qualify as party-in-interest transactions. In addition, certain plan investments are shares of Datascope Corp. common stock. Datascope Corp. is the sponsor of the Plan and therefore, transactions with respect to Datascope Corp. common stock also qualify as party-in-interest transactions.

10


Table of Contents

(9) Subsequent Event
          On May 14, 2008, the Company completed the sale of its Patient Monitoring business to a subsidiary of Mindray Medical International Ltd. (“Mindray”) with an effective date of May 1, 2008. In connection with the sale and in accordance with the applicable sections of the IRC relating to partial plan terminations, all of the employees transferred to Mindray that were participants in the Plan became fully vested in the Company’s matching contributions upon closing. In addition, in June 2008, the full account balances for those Plan participants were transferred directly to a savings plan sponsored by Mindray. The value of the transferred account balances was approximately $27 million.

11


Table of Contents

DATASCOPE CORP.
401(K) SAVINGS AND SUPPLEMENTAL RETIREMENT PLAN
SCHEDULE H, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2007
                 
        (c) Description of Investment      
(a) Party       Including Maturity Date,      
in   (b) Identity of Issue, Borrower,   Rate of Interest, Collateral,   (e) Current  
Interest   Lessor or Similar Party   Par or Maturity Value   Value  
*   New York Life Insurance Company
     Anchor Account
Pooled Separate Account,
19,352,176 Shares, Par Value $1,
No Collateral or Maturity Value
  $ 19,352,176  
    PIMCO Total Return Fund (Admin)  
Mutual Fund, 582,297 Shares,
    6,224,752  
       
No Collateral or Maturity Value
       
    Barclays Equity Index Fund G  
Common/Collective Trust, 1,294,258
    18,676,148  
       
Shares, No Collateral or Maturity Value
       
    Oakmark Equity and Income Fund II  
Mutual Fund, 31,254 Shares,
    836,665  
       
No Collateral or Maturity Value
       
    TCW Galileo Dividend Focused Fund N  
Mutual Fund, 848,258 Shares,
    10,840,742  
       
No Collateral or Maturity Value
       
    BGI Russell 1000 Growth Index Fund S  
Common/Collective Trust, 45,268
    861,457  
       
Shares, No Collateral or Maturity Value
       
    BGI Russell 1000 Value Index Fund S  
Common/Collective Trust, 134,187
    2,925,278  
       
Shares, No Collateral or Maturity Value
       
    BGI Russell 2000 Growth Fund (O)  
Common/Collective Trust, 69,032
    1,038,236  
       
Shares, No Collateral or Maturity Value
       
    BGI Russell 2000 Value Fund (O)  
Common/Collective Trust, 137,727
    2,474,947  
       
Shares, No Collateral or Maturity Value
       
    Baron Small Cap Fund  
Mutual Fund, 239,260 Shares,
    5,701,557  
       
No Collateral or Maturity Value
       
    Janus Twenty Fund  
Mutual Fund, 170,524 Shares,
    12,635,823  
       
No Collateral or Maturity Value
       
    RS Partners Fund  
Mutual Fund, 59,424 Shares,
    1,830,844  
       
No Collateral or Maturity Value
       
    Dodge and Cox International Stock Fund  
Mutual Fund, 147,914 Shares,
    6,807,018  
       
No Collateral or Maturity Value
       
*   Datascope Corp. Stock Fund
Common Stock, 87,334 Shares
    3,320,192  
       
Datascope Corp., $141,234 Cash Reserves Fund
       
    Participants’ Loans, maturing
     January 2008 through August 2022
Interest Rates from 5.0% to 9.5%
    1,472,328  
       
 
 
     
    TOTAL  
 
  $ 94,998,163  
       
 
     
 
*   Indicates party-in-interest to the Plan
Information with respect to column (d) “Cost” is not included because the investments are participant directed under an individual account plan.
See report of independent registered public accounting firm.

12


Table of Contents

SIGNATURES
          Pursuant to the requirements of the Securities Exchange Act of 1934, the Datascope Corp. Benefits Committee, which administers the Datascope Corp. 401(k) Savings and Supplemental Retirement Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
         
 
  Datascope Corp. 401(k) Savings and    
 
  Supplemental Retirement Plan    
 
       
June 27, 2008
  /s/ Henry M. Scaramelli
 
Henry M. Scaramelli
   
 
  Member, Datascope Corp. Benefits Committee    
 
       
June 27, 2008
  /s/ Fred Adelman    
 
       
 
  Fred Adelman    
 
  Member, Datascope Corp. Benefits Committee