-----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, QE+YZDFM8Iv35YaDX/6Vu6pHXSY71S9AHWn2OEqB121riFAeFMHUD98MsLhDcl+Q fh9Z9MqepPH1DBtEm36k9Q== 0000950152-03-006555.txt : 20030630 0000950152-03-006555.hdr.sgml : 20030630 20030630140459 ACCESSION NUMBER: 0000950152-03-006555 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEITHLEY INSTRUMENTS INC CENTRAL INDEX KEY: 0000054991 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 340794417 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09965 FILM NUMBER: 03763651 BUSINESS ADDRESS: STREET 1: 28775 AURORA RD CITY: SOLON STATE: OH ZIP: 44139 BUSINESS PHONE: 2162480400 11-K 1 l01740ae11vk.txt KEITHLEY INSTRUMENTS, INC. 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 (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]. FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. COMMISSION FILE NUMBER 1-9965 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: KEITHLEY INSTRUMENTS, INC. 28775 AURORA ROAD CLEVELAND, OHIO 44139 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE * * * * * DECEMBER 31, 2002 AND 2001 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
PAGE ---- Report of independent accountants 1 Financial statements: Statement of Net Assets Available for Plan Benefits as of December 31, 2002 and 2001 2 Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 2002 3 Notes to financial statements 4-7 Supplemental schedule: Schedule of assets held for investment purposes at December 31, 2002 Schedule I
NOTE: Certain schedules required under the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted as the conditions under which they are required are not present. PricewaterhouseCoopers LLP BP Tower, 27th Floor 200 Public Square Cleveland, OH 44114-2301 Telephone (216) 875-3000 Facsimile (216) 566-7846 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Keithley Instruments, Inc. Retirement Savings Trust and 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 present fairly, in all material respects, the net assets available for plan benefits of the Keithley Instruments, Inc. Retirement Savings Trust and Plan (the "Plan") at December 31, 2002 and 2001, and the changes in net assets available for plan benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards generally accepted in the United States of America 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 audits provide a reasonable basis for our opinion. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets Held for Investment Purposes is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplemental 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 audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP June 6, 2003 1 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 2002 AND 2001
2002 2001 ----------- ----------- Investments, at fair value (cost of investments totaled $35,126,008 and $34,984,949 for the years ended December 31, 2002 and 2001, respectively) $27,250,673 $31,530,596 Participants' loans 110,666 189,775 ----------- ----------- Total investments 27,361,339 31,720,371 ----------- ----------- Receivables: Employer contribution 41,140 436,060 Participant contributions 151,277 167,718 Dividends 2,583 499 ----------- ----------- Total receivables 195,000 604,277 Cash -- 16,227 ----------- ----------- Net assets available for plan benefits $27,556,339 $32,340,875 =========== ===========
The accompanying notes are an integral part of these financial statements. 2 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2002
Additions to net assets attributed to: Contributions: Employer $ 393,945 Participants 2,552,694 ------------ Total contributions 2,946,639 ------------ Investment income: Dividends and capital gains 155,143 Interest 26,772 ------------ Total additions 3,128,554 Deductions from net assets attributed to: Net depreciation on investments (5,576,885) Distributions to participants (2,331,366) Asset-based fees (4,839) ------------ Total deductions (7,913,090) ------------ Net decrease (4,784,536) ------------ Net assets available for plan benefits at beginning of year 32,340,875 ------------ Net assets available for plan benefits at end of year $ 27,556,339 ============
The accompanying notes are an integral part of these financial statements. 3 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN NOTES TO FINANCIAL STATEMENTS NOTE 1 - PLAN DESCRIPTION: The following description of the Keithley Instruments, Inc. Retirement Savings Trust and Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. Plan restatement and amendment In 2002, the Plan was restated and amended. The restatement and amendments were made in accordance with various changes in applicable benefits laws. Participation The Plan is a defined contribution plan, established on January 1, 1988, covering all domestic employees of Keithley Instruments, Inc. and its participating subsidiaries (the "Company") who have attained age twenty-one. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Administration The Plan is administered by the Company (the "Administrator"). The administration of the Plan includes exercising all necessary powers as provided by the Plan to interpret and apply the Plan provisions. The Company is vested with the right to settle claims or debts and to defend any claims arising from the operation of the Plan. Schwab Retirement Services, Inc. ("Schwab") is the trustee and acts as the custodian of the Plan. Contributions Participants may elect to contribute up to 25 percent of their compensation and have the option of contributing their profit sharing award, if any, on a pre-tax basis subject to certain limitations of the Plan. In 2001, the Company paid a profit sharing award, which some employees decided to contribute to the Plan. It is the Company's policy to match at least $.25 of each dollar contributed, limited to six percent of a participant's compensation during the Plan year. Additionally, it is the Company's policy to match up to a maximum of $.50 of each dollar contributed, limited to six percent of a participant's compensation for the Plan year, based upon the Company's financial performance. For 2002 and 2001, the Company's match was $.25 and $.50, respectively, on each dollar contributed by participants up to six percent of a participant's 4 compensation. The Company has complete discretion to determine its matching contribution, if any, each year. Participant accounts Each participant has two separate accounts under each fund in which contributions have been invested on behalf of the participant. One account represents the participant's contributions and earnings thereon ("Participant Account") and the other account represents the employer's contributions, made on behalf of the respective participant, and the earnings thereon ("Employer Account"). Forfeitures of terminated participants' nonvested account balances are used to reduce future employer contributions. Net assets available for Plan benefits of $14,784 and $6,109 were not allocated to participants' accounts at December 31, 2002 and 2001, respectively, due to forfeitures during each Plan year. Vesting Participants are immediately vested in their voluntary contributions plus earnings thereon. Vesting of the employer contributions starts after the first year and is based on years of service. A participant is 100 percent vested after three years of credited service. Payment of benefits Upon termination of service, a participant may elect to receive either a lump-sum amount equal to the value of his or her account, or installment payments. In the case of a severe financial hardship, the Administrator at its sole discretion may direct distribution of all or a portion of a participant's account, subject to certain restrictions. Loans In the case of a financial hardship as defined by the Plan, a participant may apply to the Administrator for a loan. The Administrator in accordance with a uniform nondiscriminatory policy, may direct the custodian to make a loan to a participant from their before-tax contribution account, subject to certain restrictions. Loans outstanding as of December 31, 2002, bear interest rates ranging from 6.25 to 11.5 percent per annum. Loans outstanding as of December 31, 2001, bear interest rates ranging from 7.0 to 11.5 percent per annum. Termination provisions The Company anticipates and believes that the Plan will continue indefinitely; however, the Company reserves the right to terminate the Plan at any time by an action of its Board of Directors. In the event of termination of the Plan, the assets then remaining will be allocated and distributed to participants in accordance with the terms and provisions of the Plan. 5 Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for Plan benefits and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets available for Plan benefits during the reporting period. Actual results could differ from those estimates. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Contributions and benefit distributions Matching contributions from the Company are recognized during the period in which they are earned. Distributions are recognized during the period in which they are paid to a Plan participant. Investment valuation and income recognition All investment accounts are included in the financial statements at fair value determined by quoted market prices as reported to the Plan by Schwab. Purchases and sales of securities are recorded on a settlement date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Realized gains or losses on security transactions are recorded in an amount equal to the difference between net proceeds received and the revalued cost at the date of sale and are reflected in the Statement of Changes in Net Assets Available for Plan Benefits. The Plan presents in the Statement of Changes in Net Assets Available for Plan Benefits the net appreciation or depreciation in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation or depreciation on those investments. Administrative expenses Participation fees are paid by the Company. Asset-based fees are paid by the participants. NOTE 3 - INVESTMENTS: During 2002, 15 funds were available to participants for investment purposes. Schwab manages the distribution of assets among funds and provides record keeping services. Additionally, participants may choose to invest in any stock listed on a major U.S. exchange, over 1,800 mutual funds, bonds and other fixed-income investments, and money market funds through the use of a Personal Choice Retirement Account. 6 The following table presents the fair value of the individual investments that represent 5 percent or more of the Plan's net assets:
December 31, 2002 2001 ---------- ---------- Aim Charter Fund $2,635,364 $3,421,637 American Century Select Fund 2,685,047 3,708,005 American Century Growth Fund 2,230,464 3,180,535 Fidelity Magellan Fund 3,365,049 4,335,833 INVESCO Total Return Fund 1,432,757 1,632,794 Schwab Stable Value Fund 7,118,596 6,964,154 T. Rowe Price Science & Technology Fund 1,505,990 2,264,705
The aggregate proceeds from transactions in the Plan's investments were $7,456,906 for the year ended December 31, 2002. The related cost of these transactions was $7,950,013, resulting in a realized loss totaling $493,107 for the year ended December 31, 2002. Realized gains and losses on investments are included in the caption Net depreciation on investments in the Statement of Changes in Net Assets Available for Plan Benefits. Cost is determined using the revalued cost method. Unrealized depreciation on Plan assets was $5,083,778 for the year ended December 31, 2002. NOTE 4 - FEDERAL INCOME TAX STATUS: On July 17, 2002, the Internal Revenue Service advised that the Plan, as amended, is qualified and the trust thereunder is exempt from federal income tax pursuant to Section 401(a) of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan's administrator and the Plan's tax counsel believe that the plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 7 Schedule I Page 1 of 4 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 2002
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value - --- --- ----------------- --- ---------------------- --- ------------- Mutual Funds: Aim Charter Fund 274,231 $ 2,635,364 American Century Growth Fund 154,679 2,230,464 American Century Select Fund 94,212 2,685,047 Bear Stearns S&P Stars Portfolio Fund 7,033 114,217 Fidelity Magellan Fund 42,617 3,365,049 FMA Small Company Portfolio Fund 73,498 1,189,198 INVESCO Total Return Fund 68,553 1,432,757 PIMCO Total Return Fund 74,327 793,071 * Schwab Stable Value Fund 500,731 7,118,596 * Schwab Total Stock Market Index Fund 10,169 144,096 Scudder Global Fund 41,228 734,684 T. Rowe Price New Horizons Fund 71,349 1,185,109 T. Rowe Price Science & Technology Fund 121,158 1,505,990 Van Kampen Comstock Fund 19,617 242,074 Vanguard Index Extended Market Fund 46,406 869,649 ---------- Total Mutual Funds 26,245,365 ---------- Personal Choice Retirement Account: Cash and Equivalents 359,823 Common Stocks: ADC Telecommunications, Inc. 300 627 AcTrade Financial Technologies Ltd. 685 69 AFLAC Inc. 101 3,030 Agere Systems, Inc. Class A 248 357 Agere Systems, Inc. Class B 1,365 1,911 Agilent Technologies, Inc. Class B 100 1,796 Albertsons, Inc. 874 19,461 American Express Co. 101 3,558 American Home Mortgage Holdings 403 4,430 Amkor Technology, Inc. 43 205 ANFI, Inc. 318 4,683 Anworth Mortgage Asset Corp. 150 1,886 Applied Micro Circuits Corp. 600 2,214 Atmel Corp. 250 557 Avaya, Inc. 22 54 Bank One Corp 810 29,606 Banta Corp. 546 17,084 Barr Labs, Inc. 50 3,255
Schedule I Page 2 of 4 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 2002
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value - --- --- ----------------- --- ---------------------- --- ------------- Berkshire Hathaway Class B 2 4,846 Black Box Corp. 64 2,867 Bookham, Technology ADR 5,110 5,110 Brush Wellman, Inc. 1,000 5,500 Cadence Design Systems, Inc. 500 5,895 Capital One Financial 100 2,980 Centerpoint Energy, Inc. 387 3,288 Checkpoint Systems, Inc. 150 1,551 CHS Electronics, Inc. 1,000 1 Cisco System, Inc. 1,215 15,917 Com21, Inc. 3,000 660 Cree, Inc. 38 621 CVS Corp. 818 20,435 Cypress Semiconductor Corp. 100 572 EMC Corp. 1,000 6,140 Elan Corp PLC ADR 2,930 7,208 Fidelity National Financial, Inc. 111 3,641 Ford Motor Company 100 930 General Electric Company 72 1,749 Globix Corp 200 1 Home Depot, Inc. 383 9,181 Intel Corp. 306 4,772 IParty Corp. 1,250 263 J P M Company 4,000 4 JDS Uniphase Corp. 60 148 * Keithley Instruments, Inc. 5,915 73,932 Keycorp, Inc. 50 1,257 Kulicke & Soffa Industries, Inc. 100 572 LTV Corp. 5,000 25 Lucent Technologies, Inc. 5,167 6,511 Mattson Technology, Inc. 400 1,144 Metris Companies, Inc. 882 2,178 Micromuse, Inc. 32 122 Mobilepro Corp. 650 72 Motorola, Inc. 1,100 9,523 Nortel Networks Corp. 10,000 16,100 OpenTV Corp. Class A 72 86 Orbital Sciences Corp. 10 42
Schedule I Page 3 of 4 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 2002
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value - --- --- ----------------- --- ---------------------- --- ------------- Pfizer, Inc. 103 3,151 PMC-Sierra, Inc. 200 1,112 Pinnacle Data Systems, Inc. 1,000 1,450 Polymedica Corp. 180 5,551 Progressive Corp. 49 2,433 Reliant Resources, Inc. 298 954 RF Micro Devices, Inc. 200 1,466 Solectron Corp. 1,000 3,550 State Street Corp. 800 31,200 Sun Microsystems, Inc. 145 451 Sycamore Networks, Inc. 110 318 Tenet Healthcare Corp. 85 1,394 Texas Instruments, Inc. 1,400 21,014 Transwitch Corp. 60 41 Tripath Technology, Inc. 100 28 Tyco International Ltd. 100 1,709 United Parcel Service Class B 103 6,528 Varco International, Inc. 42 731 Viasystems Group, Inc. 50,314 30 Wells Fargo and Company 266 12,467 Williams Co. Inc. 1,940 5,239 Worldcom, Inc. 2,500 343 Xerox Corp. 2,000 16,100 ------- Total Common Stocks 427,887 ------- Mutual Funds: Citizens Global Equity Fund 340 4,338 Dreyfus Midcap Value Fund 129 2,258 Federated Kaufman Fund Class K 10,846 37,420 Firsthand Technology Value Fund 122 2,215 Invesco Technology II 204 3,498 Janus Fund 1,220 21,737 Janus Mercury Fund 263 3,886 Midas Fund 27,919 42,716 Oakmark Select Fund 101 2,395 Pimco Real Return Fund Class D 291 3,279 Profunds Ultraotc Fund 851 9,187 Profunds Ultrasmall Cap Investor 101 976
Schedule I Page 4 of 4 KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 2002
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value - --- --- ----------------- --- ---------------------- --- ------------- Red Oak Technology 2,531 10,857 RS Diversified Growth Fund 296 4,190 Tocqueville Gold Fund 539 13,034 Transamerica Premier Balanced Fund 308 5,106 Value Line Income & Growth Fund 459 3,213 Vanguard Capital Opportunity Fund 1,185 20,145 Vanguard Growth Index Fund 156 3,104 Vanguard Health Care Fund 91 8,772 Vanguard Index Trust Small-Cap Fund 197 3,087 ---------- Total Mutual Funds 205,413 ---------- Nasdaq 100 Shares Investment Trust 500 12,185 Total Personal Choice Retirement Account 1,005,308 ---------- Participant Loans, interest rates from 6.25 to 11.5% per annum 110,666 ---------- Total Assets Held for Investment Purposes $27,361,339 ==========
(*) Denotes an allowable party in interest SIGNATURES The Plan. Pursuant to the requirements of the Securities 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. KEITHLEY INSTRUMENTS, INC. RETIREMENT SAVINGS TRUST AND PLAN (Name of Plan) Date: June 26, 2003 /s/ Mark J. Plush -------------------------------------------- Mark J. Plush Vice President and Chief Financial Officer Keithley Instruments, Inc. EX-23 3 l01740aexv23.txt EX-23 CONSENT Exhibit 23. Consent of experts CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-2199) of Keithley Instruments, Inc. of our report dated June 6, 2003 relating to the financial statements of Keithley Instruments, Inc. Retirement Savings Trust and Plan, which appears in this Form 11-K. /s/PricewaterhouseCoopers LLP Cleveland, Ohio June 26, 2003 EX-99.1 4 l01740aexv99w1.txt EX-99.1 CERTIFICATE Exhibit 99.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark J. Plush, Vice President and Chief Financial Officer of Keithley Instruments, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Annual Report on Form 11-K of the Company's Retirement Savings Trust and Plan for the period ended December 31, 2002 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ Mark J. Plush - -------------------------------------------- Mark J. Plush Vice President and Chief Financial Officer of Keithley Instruments, Inc., and Plan Administrator of the Keithley Instruments, Inc. Retirement Savings Trust and Plan June 26, 2003 I, Philip R. Etsler, Vice President Human Resources of Keithley Instruments, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Annual Report on Form 11-K of the Company's Retirement Savings Trust and Plan for the period ended December 31, 2002 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ Philip R. Etlser - ----------------------------------------------------- Philip R. Etsler Vice President Human Resources of Keithley Instruments, Inc., and Plan Administrator of the Keithley Instruments, Inc. Retirement Savings Trust and Plan June 26, 2003 A signed original of this written statement required by Section 906 has been provided to Keithley Instruments, Inc. and will be retained by Keithley Instruments, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----