-----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, EZzFuHXGgxtEr04TRxdweFNsBkOldvFviOhuVyiJ22d97q7XAxLn7qjVFu79JJgc X3YfcDDP+2eKebkF+mqx7w== 0000074697-98-000013.txt : 19980707 0000074697-98-000013.hdr.sgml : 19980707 ACCESSION NUMBER: 0000074697-98-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980630 DATE AS OF CHANGE: 19980706 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPTICAL COATING LABORATORY INC CENTRAL INDEX KEY: 0000074697 STANDARD INDUSTRIAL CLASSIFICATION: 3827 IRS NUMBER: 680164244 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-02537 FILM NUMBER: 98659095 BUSINESS ADDRESS: STREET 1: 2789 NORTHPOINT PKWY CITY: SANTA ROSA STATE: CA ZIP: 95407 BUSINESS PHONE: 7075257072 MAIL ADDRESS: STREET 1: 2789 NORTHPOINT PARKWAY CITY: SANTA ROSA STATE: CA ZIP: 95407-7397 11-K 1 UNITED STATES 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 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended DECEMBER 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER 0-2537 OCLI 401(K)/ESOP PLAN OPTICAL COATING LABORATORY, INC. 1 (Exact name of registrant as specified in its charter) 2789 NORTHPOINT PARKWAY, SANTA ROSA CALIFORNIA 95407-7397 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (707) 545-6440 SIGNATURES OCLI 401(k)/ESOP Plan. Pursuant to the requirements of Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. DATE: JUNE 30, 1998 OCLI 401(K)/ESOP PLAN BY: /s/T. ROWE PRICE Trustee OCLI 401(K)/ESOP PLAN FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996, SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997 AND INDEPENDENT AUDITORS' REPORT SUPPLEMENTAL SCHEDULES OCLI 401(K)/ESOP PLAN TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Plan Benefits with Fund Information as of December 31, 1997 and 1996 2-3 Statements of Changes in Net Assets Available for Plan Benefits with Fund Information for the Years Ended December 31, 1997 and 1996 4-5 Notes to Financial Statements for the Years Ended December 31, 1997 and 1996 6-10 SUPPLEMENTAL SCHEDULES: Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997 11 Item 27d - Schedule of Reportable Transactions for the Year Ended December 31,1997 12 INDEPENDENT AUDITORS' REPORT Administrative Committee OCLI 401(k)/ESOP Plan Santa Rosa, California We have audited the accompanying statements of net assets available for plan benefits of the OCLI 401(k)/ESOP Plan (the "Plan") as of December 31, 1997 and 1996, and the related statements of changes in net assets available for plan 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 plan benefits of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for plan 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 schedules listed in the index are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are 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 information by fund in the statements of net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. These supplemental schedules and supplemental information are the responsibility of the Plan's management. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in our audit of the basic 1997 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. June 3, 1998 OCLI 401(K)/ESOP PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1997 [CAPTION] OPTICAL COATING T. ROWE T. ROWE T. ROWE T. R0WE LABORATORY PRICE PRICE T. ROWE PRICE PRICE INC. STABLE SPECTRUM PRICE EQUITY MID CAP TRAVELERS VALUE COMMON FIXED COMMON INCOME BALANCED INCOME GROWTH INCOME TRUST STOCK FUND FUND FUND FUND FUND FUND ASSETS: Investments at fair value: Common stock $22,016,601 Mutual Funds $344,468 $4,350,332 $4,905,394 $802,530 Investments at contract value Guaranteed investment contracts $5,775,888 $8,928,579 ----------- ---------- ---------- -------- ---------- ---------- -------- Total investments 22,016,601 5,775,888 8,928,579 344,468 4,350,332 4,905,394 802,530 ----------- ---------- ---------- -------- ---------- ---------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $22,016,601 $5,775,888 $8,928,579 $344,468 $4,350,332 $4,905,394 $802,530 =========== ========== ========== ======== ========== ========== ======== See notes to financial statements.
T. ROWE T.ROWE PRICE PRICE INTERNATIONAL NEW STOCK HORIZONS LOANS TO FUND FUND PARTICIPANTS TOTAL ASSETS: Investments at fair value: Common stock $22,016,601 Mutual funds $450,621 $9,608,697 20,462,042 Loans to participants $1,741,312 1,741,312 Investments at contract value - Guaranteed investment contracts 14,704,467 -------- ---------- ---------- ---------- Total investments 450,621 9,608,697 1,741,312 58,924,422 -------- ---------- ---------- ---------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $450,621 $9,608,697 $1,741,312 $58,924,422 ======== ========== ========== =========== See notes to financial statements. OCLI 401(K)/ESOP PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1996 [CAPTION] OPTICAL COATING T. ROWE LABORATORY, TRAVELERS PRICE SHORT-TERM INC. FIXED STABLE VALUE INCOME COMMON INCOME COMMON TRUST LOANS TO FUND STOCK FUND FUND PARTICIPANTS OTHER TOTAL ASSETS: Investments at fair value: Common stock $16,900,638 $16,900,638 Loans to participants $1,484,987 1,484,987 Investments at contract value - Guaranteed investment contracts $5,452,205 $7,806,929 13,259,134 Total investments ----------- ---------- ---------- ---------- ---------- --------- ---------- 16,900,638 5,452,205 7,806,929 1,484,987 31,644,759 Cash and equivalents $16,396,122 $6,793 16,402,915 Due from company 4,367 4,367 ___________ __________ __________ __________ __________ __________ __________ TOTAL ASSETS 16,396,122 16,900,638 5,452,205 7,806,929 1,484,987 11,160 48,052,041 LIABILITIES: Accrued expenses 4,367 4,367 ___________ __________ __________ __________ __________ __________ __________ NET ASSETS AVAILABLE FOR PLAN BENEFITS $16,396,122 $16,900,638 $5,452,205 $7,806,929 $1,484,987 $6,793 $48,047,674 =========== =========== ========== ========== ========== ========== =========== See notes to financial statements.
OCLI 401(K)/ESOP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION ASOF DECEMBER 31, 1997 [CAPTION] OPTICAL COATING T. ROWE T. ROWE T. ROWE T. ROWE LABORATORY, TRAVELERS PRICE PRICE T. ROWE PRICE PRICE SHORT-TERM INC. FIXED COMMON SPECTRUM PRICE EQUITY MID CAP INCOME COMMON INCOME TRUST INCOME BALANCED INCOME GROWTH FUND STOCK FUND FUND FUND FUND FUND FUND ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: By the Company $589,184 $128,367 $ 4,936 $ 47,625 $ 64,538 $ 22,632 By participating employees 246,287 828,516 85,165 324,941 593,748 219,690 Interest $323,683 $624,164 14,840 Dividends 23,176 164,028 453,702 8,336 Net appreciation (depreciation) of fair value of investments 4,733,922 8,953 534,243 474,530 80,920 ---------- --------- -------- --------- ------- --------- --------- -------- Total additions 5,592,569 323,683 1,581,047 113,894 1,070,837 1,586,518 331,578 ---------- --------- -------- --------- ------- --------- --------- -------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions and withdrawals to participants 639,383 565,378 11,959 160,699 159,917 31,934 ---------- --------- -------- --------- ------- --------- --------- -------- Administrative expenses Less reimbursed by Company ---------- --------- -------- --------- ------- --------- --------- -------- Total deductions 639,383 565,378 11,959 160,699 159,917 31,934 ---------- --------- -------- --------- ------- --------- --------- -------- NET INCREASE BEFORE INTERFUND TRANSFERS 4,953,186 323,683 1,015,669 101,935 910,138 1,426,601 299,644 INTERFUND TRANSFERS $(16,396,122) 162,777 105,981 242,533 3,440,194 3,478,793 502,886 ---------- --------- -------- --------- ------- --------- --------- -------- NET INCREASE (DECREASE) (16,396,122) 5,115,963 323,683 1,121,650 344,468 4,350,332 4,905,394 802,530 NET ASSETS AVAILABLE FOR PLAN BENEFITS: Beginning of year (16,396,122) 16,900,638 5,452,205 7,806,929 ---------- --------- -------- --------- ------- --------- --------- -------- End of year $ - $22,016,601 $5,775,888 $8,928,579 $344,468 $4,350,332 $4,905,394 $802,530 ========== ========== ========= ========== ======= ========= ========= ======== See notes to financial statements.
OCLI 401(K)/ESOP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1997 T. ROWE T. ROWE PRICE PRICE INTERNATIONAL NEW STOCK HORIZONS LOANS TO FUND FUND PARTICIPANTS OTHER TOTAL ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: By the Company $ 9,893 $143,816 $1,010,991 92,884 982,813 3,374,044 By participating employees Interest $150,080 1,112,767 Dividends 23,848 233,335 906,425 Net appreciation (depreciation) of fair value of investments (41,316) 636,210 6,427,462 ------- --------- -------- ---------- Total additions 85,309 1,996,174 150,080 12,831,689 ------- --------- -------- ---------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions and withdrawals paid to participants 22,899 362,772 1,954,941 Administrative expenses $66,536 66,536 Less reimbursed by Company (66,536) (66,536) ------- -------- -------- --------- Total deductions 22,899 362,772 1,954,941 NET INCREASE BEFORE INTERFUND TRANSFERS 62,410 1,633,402 150,080 10,876,748 INTERFUND TRANSFERS 388,211 7,975,295 106,245 (6,793) -------- --------- -------- ------ --------- NET INCREASE (DECREASE) 450,621 9,608,697 256,325 (6,793) 10,876,748 NET ASSETS AVAILABLE FOR PLAN BENEFITS: Beginning of year 1,484,987 6,793 48,047,674 -------- ---------- ---------- ------ ----------- End of yer $450,621 $9,608,697 $1,741,312 $ - $58,924,422 ======== ========== ========== ====== =========== See notes to financial statements. OCLI 401(K)/ESOP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1996 [CAPTION] T.ROWE OPTICAL PRICE LABORATORY TRAVELERS MUTUAL VALUE SHORT-TERM INC. FIXED FIXED COMMON CAPITAL INCOME COMMON INCOME INCOME TRUST PRESERVATION FUND STOCK FUND FUND FUND FUND II ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: By the Company $660,000 By participating employees 189,866 $741,177 $148,305 $ 95,309 Interest 2,369 360,855 426,154 20,324 57,632 Dividends 16,889 Net appreciation (depreciation) of fair value of investments (486,882) --------- ---------- --------- --------- --------- --------- Total additions 382,242 360,855 1,167,331 168,629 152,941 --------- ---------- --------- --------- --------- --------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions and withdrawals paid to participants 1,247,364 625,358 670,044 153,453 72,869 Administrative expenses 1,694 12,251 10,989 1,010 Less reimbursed by Company ---------- ---------- -------- -------- -------- -------- Total deductions 1,249,058 637,609 681,033 153,453 73,879 ---------- ---------- -------- -------- -------- -------- NET INCREASE(DECREASE) BEFORE INTERFUND TRANSFERS (866,816) (276,754) 486,298 15,176 79,062 INTERFUND TRANSFERS $16,396,122 (198,626) (461,364) 7,791,753 (1,321,604)(3,116,250) ----------- ----------- --------- --------- ---------- ---------- NET INCREASE(DECREASE) 16,396,122 (1,065,442) (738,118)(7,527,414) 7,806,929 (1,242,542) NET ASSETS AVAILABLE FOR PLAN BENEFITS: Beginning of year 17,966,080 6,190,323 7,527,414 1,242,542 ----------- ----------- ---------- ---------- ---------- ---------- End of year $16,396,122 $16,900,638 $5,452,205 $ - $7,806,929 $ - See notes to financial statements. OCLI 401(K)/ESOP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1996 PIMCO PHOENIX S & P 500 ADVISORS BALANCED SEVEN SEAS OPPORTUNITY LOANS TO FUND FUND FUND "C" PARTICIPANTS OTHER TOTAL ADDITIONS TO NET ASSETS ATTRIBUTED TO: Contributions: By the Company $ 660,000 By participating employees $317,177 $237,004 $954,134 2,682,972 Interest 3,229 3,496 11,445 $119,006 $2,229 1,006,739 Dividends 401,887 142,549 1,407,182 1,968,507 Net appreciation (depreciation) of fair value ofinvestments (131,747) 266,099 (746,959) (1,099,489) -------- -------- ---------- --------- ------ ----------- Total additions 590,546 649,148 1,625,802 119,006 2,229 5,218,729 -------- -------- ---------- --------- ------ ----------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions and withdrawals paid to participants 188,409 47,076 388,807 59,630 3,453,010 Administrative expenses 2,297 1,280 7,513 3,285 80,150 120,469 Less reimbursed by Company (80,150) (80,150) -------- ------- -------- -------- -------- --------- Total deductions 190,706 48,356 396,320 62,915 3,493,329 -------- ------- -------- -------- -------- --------- NET INCREASE(DECREASE) BEFORE INTERFUND TRANSFERS 399,840 600,792 1,229,482 56,091 2,229 1,725,400 INTERFUND TRANSFERS (3,116,250) (1,398,193) (9,467,709) 329,583 ---------- ---------- ---------- -------- -------- NET INCREASE(DECREASE) (2,716,410) (1,337,401) (8,238,227) 385,674 2,229 1,725,400 NET ASSETS AVAILABLE FOR PLAN BENEFITS: Beginning of year 2,716,410 1,337,401 8,238,227 1,099,313 4,564 46,322,274 ---------- ---------- --------- ---------- ------- ----------- End of year $ - $ - $ - $1,484,987 $6,793 $48,047,667 ========== ========== ========= ========== ====== =========== See notes to financial statements. OCLI 401(K)/ESOP PLAN NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1997 AND 1996 1. SUMMARY DESCRIPTION OF PLAN The following description of the Optical Coating Laboratory, Inc. (the "Company") 401(k)/ESOP Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Effective January 1, 1997, the name of the Plan was changed from OCLI ESOP+ to OCLI 401(k)/ESOP Plan. In addition, T. Rowe Price Trust Company was appointed trustee of the Plan and T. Rowe Price Retirement Plan Services, Inc. was appointed recordkeeper for the Plan. GENERAL - The Plan is a defined contribution plan for employees of the Company. Effective January 1, 1997, employees are eligible to participate in the Plan on the participants' employment date. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). CONTRIBUTIONS - Under the Section 401(k) provision of the Plan, an eligible employee may contribute from 1% to 15% of his or her salary to the Plan up to $9,500 per year in 1997 and 1996. Contributions by highly compensated employees may be limited by anti-discrimination rules. Effective January 1, 1997, the Company amended the Plan to include a matching contribution and a revision to the annual Company profit-sharing contribution. The matching contribution is equal to 25% of each participant's deferred income contributions for the plan year, not to exceed 6% of the participant's compensation. The annual Company profit-sharing contribution is equal to 5% of the net earnings before taxes of the Company including the Company's share of the net earnings before taxes of its majority owned subsidiaries and joint ventures. The annual Company contribution is allocated to eligible participants based on their proportionate percentage of the Company's total matching contributions for the plan year. Generally, a participant must be an employee of the Company on December 31 to share in the annual allocation of the Company contribution. However, if an employee retires, dies or terminates due to disability or under OCLI's Voluntary Severance Plans, he or she will receive a Company contribution for the plan year. PARTICIPANT ACCOUNTS - Each participating employee's share of the net assets is segregated in an individual account. VESTING - Both Company and employee contributions are 100% vested at the time of contribution. Participants may withdraw their employee contributions upon reaching age 59-1/2%, under hardship conditions, or if the participant has borrowed the maximum amount allowed under the Plan (see below). Otherwise, employee and Company contributions may be withdrawn only upon retirement, death or termination of service. Benefits are paid in cash and, to the extent so invested, in Company stock. LOANS TO PARTICIPANTS - The maximum amount a participant may borrow is the lesser of (i) fifty percent of the total account balance of the participant, (ii) the balance of the participant's employee contribution amount or (iii) $50,000 reduced by the excess of the highest outstanding balance of loans to the participant during the one year period prior to the date of the loan minus the outstanding balance of any loan to the participant on the date on which such loan was made. The loan must bear a reasonable rate of interest and the loan term cannot exceed five years unless the loan is for the purpose of a primary residence, in which case, the loan term cannot exceed five years unless the loan is for the purchase of a primary residence, in which case, the loan term cannot exceed fifteen years. A participant may have only one loan outstanding at a time and the minimum loan amount is $500. Loan principal and interest repayments are made via payroll deductions, are credited directly to the participant's account and are invested, at the participant's direction, in one or more of the Plan investment options. If a participant terminates employment, loan principal and interest balances not paid within thirty days are deemed to be taxable distributions from the Plan (see "Income Taxes" below). INVESTMENT OPTIONS - Upon enrollment in the Plan, a participant may direct contributions in one or more of the following investment options: . Optical Coating Laboratory, Inc. common stock. . Travelers Fixed Income Fund which consists of a Travelers Insurance Group Annuity Contract. The contract matures on March 31, 1999. Contributions can no longer be invested in this fund. . T. Rowe Price Stable Value Common Trust Fund which invests primarily in guaranteed investment contracts. . T. Rowe Price Spectrum Income Fund which invests primarily in fixed income securities. . T. Rowe Price Balanced Fund which invests primarily in common stocks and fixed income securities. . T. Rowe Price Equity Income Fund which invests primarily in common stocks of established companies. . T. Rowe Price Mid Cap Growth Fund which invests in U.S. common stocks, foreign securities, convertible securities, and warrants. . T. Rowe Price International Stock Fund which invests primarily in common stocks of established non-U.S. companies. . T. Rowe Price New Horizons Fund which invests primarily in common stocks of small, rapidly growing companies. Employees may change investments or transfer funds from one investment to another on a daily basis. After age 52, employees may transfer a portion of their Company contribution accounts to one of the voluntary investments listed above. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The financial statements of the Plan are prepared on the accrual basis. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net assets during the reporting period. Actual results could differ from those estimates. INVESTMENTS - The investments of the Plan are stated at fair value. Quoted market prices are used to determine the fair value of investments in Company common stock and mutual funds. Investments in the fixed income funds, under the group annuity contracts, are stated at contract value. Contract value represents contributions made under the contract plus interest at the contract rate. Investments in the money market fund are stated at cost plus accrued interest which is fair value. Participant notes receivable are valued at cost, which approximates fair value. Purchase and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. INCOME TAXES - The Plan obtained its latest determination letter in July 1995, in which the Internal Revenue Service stated that the Plan, as amended, meets the requirements of Section 401(a) of the Code an is exempt from federal income tax under Section 501(a) of the Code. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code, and that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. Therefore, no provision for income taxes has been included in the accompanying financial statements. In accordance with Section 401(k) of the Code, employee contributions are made on a pre-tax basis. Employee's pre-tax contributions, employer contributions and investment income are taxable to participants upon distribution. Employees' after tax contributions are not taxable upon distribution, however, amounts attributable to earnings on such contributions are subject to income tax. Taxable distributions or withdrawals before age 59-1/2 are subject to a 10% federal income tax penalty unless certain exceptions apply. Withdrawals qualifying as lump-sum distributions under the Code may be eligible for five or ten year forward averaging. With certain restrictions, employees may continue to defer income taxes on their distributions by investing them in another qualified plan within sixty days of the distribution date. Beginning January 1, 1993, the Plan Administrator is required to withhold 20% of the taxable portion of withdrawals for federal income taxes, unless the withdrawals are directly rolled over into another qualified plan or IRA. The foregoing abbreviated discussion of the income tax consequences resulting from participation in the Plan is not intended to include all tax aspects of such participation. BENEFITS PAYABLE - Benefits are recorded when paid. As of December 31, 1997 and 1996, benefits of $432,801 and $14,502, respectively, were due to participants who have withdrawn from participation in the Plan. 3. TERMINATION OF THE PLAN 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 set forth in ERISA. In the event the Plan is terminated, all the participant's accounts will be distributed to the participants or their beneficiaries in accordance with their respective interests therein. 4. ADMINISTRATIVE COMMITTEE AND TRUSTEES OF THE PLAN The Plan provides for an Administrative Committee to manage and administer the Plan. The four members of the Administrative Committee are appointed by the Board of Directors of the Company. The Administrative Committee, as allowed by the Plan, delegated the routine administration of the Plan to T. Rowe Price Retirement Plan Services, Inc. The Plan also provides for a trustee, whose duties are to safeguard and value trust assets, invest and reinvest trust funds and carry out directions of the Administrative Committee. Beginning January 1, 1997, T. Rowe Price Trust Company assumed these duties. Prior to January 1, 1997, these duties were performed by Wells Fargo Bank. 5. INVESTMENT CONTRACT WITH INSURANCE COMPANY Travelers Fixed Income Fund is a four year contract with a fixed interest rate of 6.45% and fair value of $5,775,888. No employee contributions are being invested in Travelers Fixed Income Fund. 6. FINANCIAL INSTRUMENTS WITH CONCENTRATION OF CREDIT RISK Financial instruments which potentially subject the assets in the fund to concentrations of credit risk consist principally of common stock, group annuity contracts, and mutual funds. As described under Investment Options, contributions made by the Company are reinvested in Optical Coating Laboratory, Inc. common stock in accordance with the Plan provisions and cannot be routinely transferred. This creates a greater risk for this segment of plan assets. As the portfolio for the remaining plan assets is well diversified and issuers of the securities are dispersed throughout many industries and geographies, the concentrations of credit risk are limited for this segment of plan assets. 7. PARTY IN INTEREST TRANSACTIONS At December 31, 1997 and 1996, the Plan's assets included Optical Coating Laboratory, Inc. (the sponsoring Company) common stock as follows: 1997 1996 Number of shares 1,599,947 1,571,428 Cost $11,051,883 $10,221,023 Fair value 22,016,601 16,900,638 8. INVESTMENTS The fair value or contract value of the investments that represent more than 5% of the Plan's net assets available for benefits are as follows: 1997 1996 Short-Term income Fund $16,396,122 Optical Coating Laboratory, Inc. common stock $22,016,601 16,900,638 Travelers Fixed Income Fund 5,775,888 5,452,205 T. Rowe Price Stable Value Common Trust Fund 8,928,579 7,806,929 T. Rowe Price Balanced Fund 4,350,332 T. Rowe Price Equity Income Fund 4,905,394 T. Rowe Price New Horizons Fund 9,608,697 ****** OCLI 401(K)/ESOP PLAN ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1997 DESCRIPTION IDENTITY OF OF INVESTMENT COST FAIR VALUE ISSUE Optical Coating Laboratory,Inc. Common stock 11,051,883 22,016,601 Travelers Fixed Income Fund,6.45% 5,775,888 5,775,888* T. Rowe Price Stable Value Common Trust 8,928,579 8,928,579 T. Rowe Price Spectrum Income Fund 336,055 344,468 T. Rowe Price Balanced Fund 3,866,633 4,350,332 T. Rowe Price Equity Income Fund 4,487,642 4,905,394 T. Rowe Price Mid Cap Growth Fund 726,511 802,530 T. Rowe Price International Stock Fund 489,983 450,621 T. Rowe Price New Horizons Fund 8,945,655 9,608,697 Loans to participants, including accrued interest (interest rate range 8%-12%, 240 loans outstanding) 1,741,312 1,741,312 $ $ Total $46,350,141 $58,924,422 *Represents contract value OCLI 401(K)/ESOP PLAN ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS DECEMBER 31, 1997 PURCHASES IDENTITY OF ISSUE DESCRIPTION NUMBER COST Optical Coating Laboratory,Inc. Common stock 63 $11,185,850 T. Rowe Price Stable Value Common Trust Fund 53 11,427,449 T. Rowe Price Balanced Fund 64 4,311,218 T. Rowe Price Equity Income Fund 86 4,784,206 T. Rowe Price New Horizons Fund 61 11,159,656 There were no reportable sales transactions.
EX-23 2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-26271 of Optical Coating Laboratory, Inc. on Form S-8 of our report dated June 3, 1998, appearing in this Annual Report on Form 11-K of the OCLI 401(k)/ESOP Plan for the year ended December 31, 1997. June 26, 1998 H:\DOC\0260\02602601.DOC, 06/30/98, 2:23 PM -----END PRIVACY-ENHANCED MESSAGE-----