-----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, EdcRZPHCXZppMskZj6WpK6iLWHwobpC6gZyVnu7q5Lhyv7HI3NupzNmcnP48USR/ fHBlDHsl0VfJHpaWskKx6g== 0000950135-99-001494.txt : 19990326 0000950135-99-001494.hdr.sgml : 19990326 ACCESSION NUMBER: 0000950135-99-001494 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALILEO CORP CENTRAL INDEX KEY: 0000711425 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 042526583 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-11309 FILM NUMBER: 99572071 BUSINESS ADDRESS: STREET 1: PO BOX 550 STREET 2: GALILEO PARK CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083479191 MAIL ADDRESS: STREET 1: GALILEO PARK STREET 2: PO BOX 550 CITY: STURBRIDGE STATE: MA ZIP: 01566 FORMER COMPANY: FORMER CONFORMED NAME: GALILEO ELECTRO OPTICS CORP DATE OF NAME CHANGE: 19920703 11-K 1 GALILEO CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the fiscal year ended DECEMBER 31, 1998. OR [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from ________ to ________ Commission file number 0-11309. A. Full title of the plan and the address of the plan, if different from that of the issuer named below: GALILEO CORPORATION EMPLOYEE STOCK PURCHASE PLAN B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: GALILEO CORPORATION GALILEO PARK, P. O. BOX 550 STURBRIDGE, MASSACHUSETTS 01566 FINANCIAL STATEMENTS OF THE PLAN Report of Independent Auditors. 1. Statements of Financial Condition. 2. Statements of Changes in Participants' Equity. 3. Notes to Financial Statements. EXHIBIT Consent of Ernst & Young to the incorporation by reference in the Registration Statements (Form S-8, No. 333-23345) pertaining to the Galileo Corporation Employee Stock Purchase Plan and related Prospectus of our report dated March 8, 1999, with respect to the financial statements of the Galileo Corporation Employee Stock Purchase Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. 2 SIGNATURE THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. GALILEO CORPORATION EMPLOYEE STOCK PURCHASE PLAN By: /s/ Josef W. Rokus ------------------------ Josef W. Rokus Vice President Date: March 23, 1999 3 FINANCIAL STATEMENTS GALILEO CORPORATION EMPLOYEE STOCK PURCHASE PLAN YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 4 Galileo Corporation Employee Stock Purchase Plan Financial Statements Years ended December 31, 1998, 1997 and 1996 CONTENTS Report of Independent Auditors.................................................1 Audited Financial Statements Statements of Financial Condition..............................................2 Statements of Changes in Participants' Equity..................................3 Notes to Financial Statements..................................................4 5 Report of Independent Auditors The Employee Stock Purchase Plan Committee of Galileo Corporation Galileo Corporation Employee Stock Purchase Plan We have audited the accompanying statements of financial condition of the Galileo Corporation Employee Stock Purchase Plan as of December 31, 1998 and 1997, and the related statements of changes in participants' equity for each of the three years in the period ended December 31, 1998. 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, the financial statements referred to above present fairly, in all material respects, the financial position of the Galileo Corporation Employee Stock Purchase Plan at December 31, 1998 and 1997, and the changes in participants' equity for each of the three years in the period ended December 31, 1998, in conformity with generally accepted accounting principles. March 8, 1999 ERNST & YOUNG LLP By: /s/ ERNST & YOUNG LLP ------------------------- 1 6 Galileo Corporation Employee Stock Purchase Plan Statements of Financial Condition
DECEMBER 31 1998 1997 -------- -------- ASSETS Investment in Galileo Corporation common stock, at fair value $172,183 $348,947 Employee contribution receivable 30,429 - -------- -------- Total assets $202,612 $348,947 ======== ======== LIABILITIES AND PARTICIPANTS' EQUITY Participants' equity $202,612 $348,947 -------- -------- Total liabilities and participants' equity $202,612 $348,947 ======== ========
See accompanying notes. 2 7 Galileo Corporation Employee Stock Purchase Plan Statements of Changes in Participants' Equity
YEAR ENDED DECEMBER 31 1998 1997 1996 --------- --------- -------- Interest income $ - $ 3 $ 55 Net unrealized gain (loss) in fair value of common stock $(230,013) $(197,286) $280,168 Realized gain (loss) on shares sold (22,067) 4,140 66,231 Contributions: Employee 214,795 93,293 24,168 Employer - - 10,142 Forfeitures - - (41,555) --------- --------- -------- Net contributions 214,795 93,293 (7,245) Withdrawals (109,050) (26,434) (117,364) --------- --------- -------- Net increase (decrease) (146,335) (126,284) 221,845 Participants' equity at beginning of year 348,947 475,231 253,386 --------- --------- -------- Participants' equity at end of year $ 202,612 $ 348,947 $ 475,231 ========= ========= =========
See accompanying notes. 3 8 Galileo Corporation Employee Stock Purchase Plan Notes to Financial Statements Years ended December 31, 1998, 1997 and 1996 1. DESCRIPTION OF PLAN Galileo Corporation (the Company) adopted an Employee Stock Purchase Plan (the "Plan") on June 18, 1986, pursuant to which employees purchased shares of the Company's common stock through payroll deductions and received partially matching contributions from the Company to purchase additional common stock. In addition to payroll deductions, employees were allowed to make direct contributions to the Plan. Any full-time employee of the Company was eligible to participate in the Plan if they were at least eighteen years of age and had been employed by the Company for twelve consecutive months. In addition, any part-time employee who met the same age requirements and had been in the Company's employ for twenty-four consecutive months was eligible. Participation in the Plan was strictly voluntary. In any given year prior to January 1, 1997, the maximum amount of contributions to the Plan that a participant could make was $1,000. Matching employer contributions were made on a sliding scale as follows: 50% for the first $250, 40% for the next $250, and 30% for the final $500. Effective January 1, 1997, the Company adopted the Galileo Corporation 1997 Employee Stock Purchase Plan (the "Purchase Plan"), a Section 423 stock purchase plan. All participants in the Plan automatically (1) became participants in the Purchase Plan, and (2) became vested in all shares previously held in the Plan. The Purchase Plan is available to all employees whose customary employment is more than 20 hours per week and who have completed three months of employment with the Company. The Purchase Plan qualifies as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended, and is not subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended. The Purchase Plan provides quarterly offering periods to eligible employees to purchase common stock under the Purchase Plan. The employees may make contributions to the Purchase Plan through payroll deductions, with a maximum annual contribution of $25,000 of shares of the Company's stock at a 15% discount off the lower of its fair value at the beginning of the offering period or the fair value at the applicable exercise date. An offering period is a period during which payroll deductions will be accumulated. All payroll deductions are credited to the participant's account under the Purchase Plan and are deposited with the general funds of the Company. The first offering period was January 1, 1997 through March 31, 1997. There are four offering periods each year. 4 9 Galileo Corporation Employee Stock Purchase Plan Notes to Financial Statements 1. DESCRIPTION OF PLAN (CONTINUED) The offering periods will begin on each January 1, April 1, July 1, and October 1. Under the Purchase Plan, a participant can have 1% to 10% of their gross pay deducted on an after-tax basis to purchase stock. There is no Company match, and a participant is 100% vested in their account at all times under the Purchase Plan. The Purchase Plan is administered by a committee appointed by the Board of Directors of the Company. WITHDRAWAL FROM OFFERING A participant in an offering may withdraw from an offering as to all (but not part) of the unexercised rights granted under such offering by giving written notice of such cancellation to the Company before any exercise date. Any amounts withheld for the purchase of stock from the employee's compensation through payroll deductions will be paid to the employee, without interest, upon such withdrawal, and the rights granted with respect to the offering will be automatically terminated. A withdrawing participant may not again participate until the commencement of a new offering. TERMINATION Upon the termination of employment for any reason, including the death of the participant, before the date on which any rights granted under the Plan are exercisable, all such rights will immediately terminate, and amounts withheld for the purchase of common stock from the participant's compensation through payroll deductions will be paid to the participant or to the participant's estate, without interest. PLAN TERMINATION Although it has not expressed an intent to do so, the Board may at any time terminate the Plan, except that no such termination may adversely affect the existing rights of participants. 5 10 Galileo Corporation Employee Stock Purchase Plan Notes to Financial Statements 2. SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS Investments in common stock of the Company are issued by the Company from shares reserved for the Purchase Plan. Shares are carried at fair value based upon the latest reported sales price. Realized gains and losses are determined on an average cost basis. ADMINISTRATIVE EXPENSES All expenses of the Plan are paid by the Company. RECLASSIFICATIONS Certain 1997 and 1996 amounts were reclassified to conform with 1998 presentation. 3. INCOME TAX STATUS The Plan is a nonqualified plan for Internal Revenue Service purposes. Participant contributions to the Plan constitute taxable wages for the taxable year in which such contributions would have been paid to the participant. The Plan is not subject to federal income taxes. Plan participants recognize no taxable income at the time of purchase of shares. However, both ordinary income and a capital gain or capital loss may be realized upon disposition of shares by the participant. 4. REALIZED GAINS AND LOSSES The realized gain (loss) on shares sold was determined as follows:
AVERAGE REALIZED COST PROCEEDS GAIN (LOSS) -------- -------- ----------- Year ended December 31, 1996 $ 33,309 $ 99,540 $ 66,231 Year ended December 31, 1997 $ 7,156 $ 7,156 $ 4,140 Year ended December 31, 1998 $131,061 $108,994 $(22,067)
6 11 Galileo Corporation Employee Stock Purchase Plan Notes to Financial Statements 5. YEAR 2000 ISSUE (UNAUDITED) The Plan Sponsor has developed a plan to modify its internal information technology to be ready for the year 2000 and has begun converting critical data processing systems. The project also includes determining whether third-party service providers have reasonable plans in place to become year 2000 compliant. The Plan Sponsor currently expects the project to be substantially complete by early 1999. The Plan Sponsor does not expect this project to have a significant effect on plan operations. 7 EX-23 2 GALILEO CORPORATION 1 Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-23345) pertaining to the Galileo Corporation Employee Stock Purchase Plan and related Prospectus of our report dated March 8, 1999, with respect to the financial statements of the Galileo Corporation Employee Stock Purchase Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. /s/ Ernst & Young ERNST & YOUNG LLP Providence, Rhode Island March 23, 1999 -----END PRIVACY-ENHANCED MESSAGE-----