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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
FRIEDE GOLDMAN HALTER, INC.
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from _________ to ________
Commission file number 0-22595
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
FRIEDE GOLDMAN INTERNATIONAL, INC.-401(K) RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FRIEDE GOLDMAN HALTER, INC.
13085 Industrial Seaway Road
Gulfport, Mississippi 39503
FRIEDE GOLDMAN INTERNATIONAL,INC.-401(K) RETIREMENT PLAN
Financial Statements as of December 31, 1999 and
1998 and for each of the Two Years in the Period
Ended December 31, 1999; Supplemental Schedules as
of and for the Year Ended December 31, 1999; and
Independent Auditors' Report
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Financial Statements and
Supplemental Schedule
Friede Goldman International, Inc.
401(k) Retirement Plan
Year ended December 31, 1999
with Report of Independent Auditors
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Friede Goldman International, Inc.
401(k) Retirement Plan
Financial Statements and
Supplemental Schedule
Year ended December 31, 1999
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors.............................. 1
Audited Financial Statements
Statements of Net Assets Available for Benefits............. 2
Statement of Changes in Net Assets Available for Benefits... 3
Notes to Financial Statements............................... 4
Supplemental Schedule
Schedule H - Line 4(i)--Schedule of Assets Held for
Investment Purposes at End of Year......................... 8
Exhibit 23.1--Consent of Ernst & Young LLP
</TABLE>
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Report of Independent Auditors
The Administrative Committee
Friede Goldman International, Inc. 401(k) Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of Friede Goldman International, Inc. 401(k) Retirement Plan as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. 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 auditing standards generally accepted
in the 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. 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 net assets available for benefits of the Plan at
December 31, 1999 and 1998, and changes in its net assets available for benefits
for the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 is presented
for purposes of additional analysis and is not a required part of the 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 our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
New Orleans, Louisiana
June 27, 2000
1
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Friede Goldman International, Inc.
401(k) Retirement Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
-------------------------
<S> <C> <C>
Assets
Investments, at fair value:
Mutual funds $5,778,910 $2,617,691
Friede Goldman Halter, Inc. common stock 254,225 141,334
Money market fund 10,418 9,804
Loans to participants 472,260 89,772
---------- ----------
6,515,813 2,858,601
Receivables:
Employer contributions 83,856 66,541
Employee contributions 247,041 211,053
Other 3,195 640
---------- ----------
334,092 278,234
---------- ----------
Total assets 6,849,905 3,136,835
LIABILITIES
Excess contributions 162,942 -
---------- ----------
Net assets available for benefits $6,686,963 $3,136,835
========== ==========
</TABLE>
See accompanying notes.
2
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Friede Goldman International, Inc.
401(k) Retirement Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
ADDITIONS
Investment income:
Net appreciation in fair value of mutual funds $ 256,356
Net depreciation in fair value of common stock (169,216)
Interest and dividend income 459,996
----------
547,136
Contributions:
Employee 2,966,140
Employer 910,224
Rollovers 199,626
----------
4,075,990
----------
Total additions 4,623,126
Deductions
Benefit payments 876,194
Excess contributions 162,942
Administrative fees 33,862
----------
Total deductions 1,072,998
----------
Net increase 3,550,128
Net assets available for benefits:
Beginning of year 3,136,835
----------
End of year $6,686,963
==========
See accompanying notes.
3
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Friede Goldman International, Inc.
401(k) Retirement Plan
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF THE PLAN
The following is a general description of the Friede Goldman International, Inc.
401(k) Retirement Plan (the Plan). This description is provided for general
information purposes only. Participants should refer to the plan agreement for a
more complete description of the Plan's provisions.
GENERAL
Effective November 3, 1999, Friede Goldman International, Inc. (Friede Goldman)
completed a merger with Halter Marine Group, Inc. (Halter). The surviving
company, Friede Goldman, changed its official name to Friede Goldman Halter,
Inc. (the Company). Friede Goldman remained as a wholly owned subsidiary of the
Company. In connection with the merger, the Company became the plan sponsor of
the Plan.
The Plan is a defined contribution plan covering substantially all full-time
employees of Friede Goldman who are age 18 or older and have completed 6 months
of service. The entry dates of the Plan are the first day of each month of the
year. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may defer up to 15% of their pretax annual compensation and 10% of
after-tax annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans.
The Company's contribution to the Plan is equal to 50% of the participants'
contributions up to 5% of their compensation. The Company may elect to make a
discretionary matching contribution. Each participant's share of the
discretionary matching contribution is equal to his proportionate share of the
total eligible contributions made during the plan year by all participants.
During 1999, no such contributions were made.
4
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Friede Goldman International, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct contributions to any of 10
investment options which have been selected by the plan sponsor and which are
held by the trustee. These investment options consist of nine mutual funds and
the Company's common stock.
VESTING
Participants are immediately vested in their salary deferral contribution plus
actual earnings thereon. Employer contributions and all earnings thereon vest to
individual participants after attainment of credited years of service. A
participant is 100% vested after three years of credited service.
FORFEITURES
Forfeitures of terminated participants' nonvested accounts are used to reduce
future employer contributions. At December 31, 1999 and 1998, forfeited
nonvested accounts totaled $52,127 and $19,917, respectively.
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive a lump sum amount,
installment payments or an annuity equal to the vested value of a participant's
account. Participants may withdraw all or a portion of their account in the
event of financial hardship, as defined by the Plan.
LOANS TO PARTICIPANTS
The Plan allows participants to borrow against their vested balances. Loans must
be approved by the plan sponsor and are limited to the lesser of $50,000 or an
amount equal to one half of a participant's vested account balance in the Plan.
Participant loans less than $1,000 are not permitted. Loan terms range from one
to 5 years or up to 30 years for the purchase of a primary residence.
5
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Friede Goldman International, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PRIORITIES UPON TERMINATION
The Company may amend, modify or terminate the Plan at any time. Upon
termination, a participant's account balance becomes 100% vested. Each account
shall continue to earn interest and participate in the appreciation or
depreciation of investments until final distributions are made. The Company
currently has no intentions of terminating the Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes and schedule. Actual results could differ from those
estimates.
VALUATION OF INVESTMENTS
The Plan's investments are invested in mutual funds and common stock.
Investments in mutual funds and common stock are valued at quoted market prices
on the last business day of the year. The money market fund is based on quoted
redemption values. Loans to participants are valued at their outstanding
balances, which approximate fair value.
ADMINISTRATIVE EXPENSES
The Company pays substantially all administrative expenses of the Plan.
6
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Friede Goldman International, Inc.
401(k) Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following table presents investments that represent 5% or more of the Plan's
net assets:
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
--------------------------
<S> <C> <C>
Mutual funds:
Fidelity Advisor Equity Growth Fund $2,152,213 $ 761,890
Fidelity Advisor Growth Opportunities Fund 2,068,019 1,105,616
Fidelity Advisor Balanced Fund 552,805 307,875
Fidelity Advisor Overseas Fund 373,310 161,162
Fidelity Advisor Government Investment 362,155 229,405
Fund
</TABLE>
4. INCOME TAX STATUS
The Plan does not have a determination letter from the Internal Revenue Service
stating that the Plan is qualified under Section 401(a) of the Internal Revenue
Code. However, the plan administrator believes that the Plan is qualified and,
therefore, the related trust is exempt from taxation. The plan sponsor has
indicated that it will take the necessary steps, if any, to maintain the Plan's
qualified status.
5. SUBSEQUENT EVENT
Effective January 1, 2000, the Plan was frozen (i.e., employee and employer
contributions ceased). All participants of the Plan were allowed to make
contributions to the Friede Goldman Halter, Inc. 401(k) Profit Sharing Plan (FGH
Plan) on January 1, 2000. Participants' years of service toward vesting were
transferred to the FGH Plan. All future employer contributions will be made to
the FGH Plan.
7
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Friede Goldman International, Inc.
401(k) Retirement Plan
Schedule H - Line 4(i)--Schedule of Assets Held for
Investment Purposes at End of Year
EIN: 72-1362492 PN: 001
December 31, 1999
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT
LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE VALUE
------------------------------------------------------------------------------------------------------
Mutual funds:
<S> <C> <C>
Fidelity Advisor Equity Growth Fund* 30,055 shares $2,152,213
Fidelity Advisor Growth Opportunities Fund* 44,321 shares 2,068,019
Fidelity Advisor Balanced Fund* 30,291 shares 552,805
Fidelity Advisor Overseas Fund* 15,712 shares 373,310
Fidelity Advisor Government Investment Fund* 39,580 shares 362,155
Fidelity Advisor Value Strategies Fund* 3,645 shares 84,062
Fidelity Advisor Emerging Markets Fund* 6,980 shares 67,360
Fidelity Advisor Technoquant Growth Fund* 4,325 shares 65,611
Fidelity Advisor High Yield Fund* 4,694 shares 53,375
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5,778,910
Money market fund:
Fidelity Institutional U.S. Treasury
Portfolio II* 10,418 shares 10,418
Common stock:
Friede Goldman Halter, Inc. common stock* 36,645 shares 254,225
Loans to participants* Maturity dates ranging through June
2005, at interest rates ranging
from 7.5% to 10.0%, payments are
made through payroll deductions,
loans are collateralized by
participant's vested account balance 472,260
----------
$6,515,813
==========
*Party-in-interest to the Plan.
</TABLE>
8
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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.
THE FRIEDE GOLDMAN INTERNATIONAL, INC.
401(K) RETIREMENT PLAN
By: FRIEDE GOLDMAN HALTER, INC.
Plan Administrator
June 28, 2000 By: /s/ Richard T. McCreary
-------------------------------
Richard T. McCreary
Group President, Halter Marine
June 28, 2000 By: /s/ Leamon C. Cooley Jr.
-------------------------------
Leamon C. Cooley Jr.
Director of Human Resources
9
