<PAGE>
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 for the fiscal year ended June 30, 2000 or
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the transition period from __________ to __________
Commission file number 000-07428
---------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Adaptive Broadband Corporation Tax-Deferred Savings and Deferred Profit
Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and address
of its principal executive office:
Adaptive Broadband Corporation
1143 Borregas Avenue
Sunnyvale, California 94089
1.
<PAGE>
General Instructions
A. Rule as to Use of Form 11-K.
This form shall be used for annual reports pursuant to Section 15(d) of the
Securities Exchange Act of 1934 ("Exchange Act") with respect to employee
stock purchase, savings and similar plans, interests in which constitute
securities registered under the Securities Act of 1933. This form shall
also be used for transition reports filed pursuant to Section 15(d) of the
Act. Such a report is required to be filed even though the issuer of the
securities offered to employees pursuant to the plan also files annual
reports pursuant to Section 13(a) or 15(d) of the Act. However, attention
is directed to Rule 15d-21 ((S) 240.15d-21) which provides that in certain
cases the information required by this form may be furnished with respect
to the plan as a part of the annual report of such issuer. Reports on this
form shall be filed within 90 days after the end of the fiscal year of the
plan, provided that plans subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") shall file the plan financial statements
within 180 days after the plan's fiscal year end.
B. Application of General Rules and Regulations.
(a) The General Rules and Regulations under the Act contain certain
requirements which are applicable to reports on any form. These general
requirements should be carefully read and observed in the preparation and
filing of reports on this form.
(b) Particular attention is directed to Regulation 12B, which contains general
requirements regarding matters such as the kind and size of paper to be
used, the legibility of the report, and the filing of the report. The
definitions contained in Rule 12b-2 ((S) 240.12b-2) should be especially
noted. See also Regulation 15D.
(c) Four complete copies of each report on this form, including exhibits and
all papers and documents filed as a part thereof, shall be filed with the
Commission. At least one of the copies filed shall be manually signed.
Copies not manually signed shall bear typed or printed signatures.
C. Preparation of Report.
This form is not to be used as a blank form to be filled in, but only as a
guide in the preparation of the report on paper meeting the requirements of
Rule 12b-12 ((S) 240.12b-12). The report may omit the text of Form 11-K
specifying the information required provided the answers thereto are
prepared in the manner specified in Rule 12b-13 ((S) 240.12b-13).
D. Incorporation of Information in Report to Employees.
Any financial statements contained in any plan annual report to employees
covering the latest fiscal year of the plan may be incorporated by
reference from such document in response to part or all of the requirements
of this form, provided such financial statements substantially meet the
requirements of this form and provided that such document is filed as an
exhibit to this report on Form 11-K.
2.
<PAGE>
E. Electronic Filers.
(a) Reports on this Form may be filed either in paper or in electronic format,
at the filer's option. See Rule 101(b)(3) of Regulation S-T ((S)
232.101(b)(3) of this chapter).
(b) Financial Data Schedules are not required to be submitted in connection
with annual reports on this form. See Item 601(c)(1) of Regulations S-K
and S-B ((S) 229.601(c)(1) and (S) 228.601(c)(1), respectively).
Required Information
The following financial statements shall be furnished for the plan.
1. An audited statement of financial condition as of the end of the latest two
fiscal years of the plan (or such lesser period as the plan has been in
existence).
2. An audited statement of income and changes in plan equity for each of the
latest three fiscal years of the plan (or such lesser period as the plan
has been in existence).
3. The statements required by Items 1 and 2 shall be prepared in accordance
with the applicable provisions of Article 6A of Regulation S-X (17 CFR
210.6A-01-.6A-05).
4. In lieu of the requirements of Items 1-3 above, plans subject to ERISA may
file plan financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA. To the extent required by ERISA, the
plan financial statements shall be examined by an independent accountant, except
that the "limited scope exemption" contained in Section 103(a)(3)(C) of ERISA
shall not be available.
Note: A written consent of the accountant is required with respect to the plan
annual financial statements which have been incorporated by reference in a
registration statement on Form S-8 under the Securities Act of 1933. The
consent should be filed as an exhibit to this annual report. Such consent shall
be currently dated and manually signed.
Exhibits
23.2 Consent of Independent Auditors
Signatures
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
thereunto duly authorized.
Adaptive Broadband Corporation Tax-Deferred
January 11, 2001 Savings and Deferred Profit Sharing Plan
------------------------- ------------------------------------------
(Date) (Name of Plan)
/s/ Kenneth J. Wees
-------------------------------------------
(Signature)*
Kenneth J. Wees
Vice President, General Counsel
and Secretary
* Print name and title of the signing official under the signature.
3.
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED
PROFIT SHARING PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
TOGETHER WITH
INDEPENDENT AUDITORS' REPORT
JUNE 30, 2000 AND 1999
MORRIS, DAVIS & CHAN LLP
Certified Public Accountants
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2-3
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS 4-5
NOTES TO FINANCIAL STATEMENTS 6-15
SUPPLEMENTAL SCHEDULE 16
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 17
</TABLE>
i
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Administrative Committee
Adaptive Broadband Corporation
We have audited the accompanying Statements of Net Assets Available for Benefits
of the Adaptive Broadband Corporation Tax-Deferred Savings and Deferred Profit
Sharing Plan (the Plan) as of June 30, 2000 and 1999, and the related Statements
of Changes in Net Assets Available for 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 audits 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 as of June 30, 2000
and 1999, and the related changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were made 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 as of June 30, 2000 is presented for the purpose of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and is not
a required part of the basic financial statements. 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/ Morris, Davis & Chan LLP
----------------------------
November 9, 2000
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 2000
<TABLE>
<CAPTION>
Managed Fidelity Fidelity Spartan Fidelity Fidelity Strong
Income U.S. Bond Puritan U.S. Equity Magellan Low-Priced Opportunity
Fund Index Fund Fund Index Fund Fund Stock Fund Fund
----------- ---------- ---------- ---------- ------------ --------- ---------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Investments:
Adaptive Broadband Corporation
common stock, at market value $ - $ - $ - $ - $ - $ - $ -
Insurance Contracts, at contract value 1,780,940 - - - - - -
Managed Income Portfolio at cost,
which approximates market value 1,254,739 - - - - - -
Mutual funds, at market value - 385,065 5,487,398 1,801,848 22,194,277 143,894 11,880,769
Cash equivalents 3,539,683 - - - - - -
Participant loans - - - - - - -
Employer matching contributions
receivable 75,476 10,001 88,606 44,268 253,289 9,596 184,695
Receivable for investment sold - - - - - - -
---------- ---------- ---------- ---------- ------------ --------- ------------
Total Assets 6,650,838 395,066 5,576,004 1,846,116 22,447,566 153,490 12,065,464
LIABILITIES
Payable for investment purchased - - - - - - -
---------- ---------- ---------- ---------- ------------ --------- ------------
Total Liabilities - - - - - - -
---------- ---------- ---------- ---------- ------------ --------- ------------
Net Assets Available for Benefits $6,650,838 $ 395,066 $5,576,004 $1,846,116 $ 22,447,566 $153,490 $12,065,464
========== ========== ========== ========== ============ ========= ============
<CAPTION>
Fidelity Franklin Adaptive
Diversified Small Cap Fidelity Broadband
International Growth Freedom Company Loan
Fund Fund Funds Stock Fund Fund Total
------------- ----------- ---------- ----------- ---------- -------------
ASSETS <C> <C> <C> <C> <C> <C>
<S>
Investments:
Adaptive Broadband Corporation
common stock, at market value $ - $ - $ - $7,361,466 $ - $ 7,361,466
Insurance Contracts, at contract value - - - - - 1,780,940
Managed Income Portfolio at cost,
which approximates market value - - - - - 1,254,739
Mutual funds, at market value 670,665 2,741,876 241,367 - - 45,547,159
Cash equivalents - - - 245,899 - 3,785,582
Participant loans - - - - 863,725 863,725
Employer matching contributions
receivable 24,433 64,742 19,141 115,025 - 889,272
Receivable for investment sold - - - 376,319 - 376,319
------------ ----------- ---------- ----------- ---------- ------------
Total Assets 695,098 2,806,618 260,508 8,098,709 863,725 61,859,202
LIABILITIES
Payable for investment purchased - - - 32,433 - 32,433
------------ ----------- ---------- ----------- ---------- ------------
Total Liabilities - - - 32,433 - 32,433
------------ ----------- ---------- ----------- ---------- ------------
Net Assets Available for Benefits $ 695,098 $ 2,806,618 $ 260,508 $8,066,276 $ 863,725 $ 61,826,769
============ =========== ========== =========== ========== ============
</TABLE>
2
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 1999
<TABLE>
<CAPTION>
Managed Fidelity Fidelity Spartan Fidelity Fidelity
Income U.S. Bond Puritan U.S. Equity Magellan Low-Priced
Fund Index Fund Fund Index Fund Fund Stock Fund
--------------- ---------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Adaptive Broadband Corporation
common stock, at market value $ - $ - $ - $ - $ - $ -
Insurance contracts, at contract value 5,012,017 - - - - -
Managed Income Portfolio at cost,
which approximates market value 3,082,819 - - - - -
Mutual funds, at market value - 218,088 8,449,921 2,907,269 25,405,676 299,953
Participant loans - - - - - -
Employer matching contributions
receivable 84,191 5,920 117,590 45,800 257,880 8,647
------------- --------- ---------- ----------- ----------- -----------
Total Assets 8,179,027 224,008 8,567,511 2,953,069 25,663,556 308,600
------------- --------- ---------- ----------- ----------- -----------
LIABILITIES - - - - - -
------------- --------- ---------- ----------- ----------- -----------
Net Assets Available for Benefits $ 8,179,027 $ 224,008 $8,567,511 $ 2,953,069 $25,663,556 $ 308,600
============= ========= ========== =========== =========== ===========
<CAPTION>
Fidelity Franklin Adaptive
Strong Diversified Small Cap Broadband
Opportunity International Growth Company Loan
Fund Fund Fund Stock Fund Fund Total
------------- ---------- ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Adaptive Broadband Corporation
common stock, at market value $ - $ - $ - $ 892,717 $ - $ 892,717
Insurance contracts, at contract value - - - - - 5,012,017
Managed Income Portfolio at cost,
which approximates market value - - - - - 3,082,819
Mutual funds, at market value 12,027,752 116,501 608,694 - - 50,033,854
Participant loans - - - - 1,314,711 1,314,711
Employer matching contributions
receivable 192,058 7,132 15,630 21,069 - 755,917
----------- --------- --------- ---------- ----------- -----------
Total Assets 12,219,810 123,633 624,324 913,786 1,314,711 61,092,035
----------- --------- --------- ---------- ----------- -----------
LIABILITIES - - - - - -
----------- --------- --------- ---------- ----------- -----------
Net Assets Available for Benefits $12,219,810 $ 123,633 $ 624,324 $ 913,786 $ 1,314,711 $61,092,035
=========== ========= ========= ========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Managed Fidelity Fidelity Spartan Fidelity Fidelity Strong
Income U.S. Bond Puritan U.S. Equity Magellan Low-Priced Opportunity
Fund Index Fund Fund Index Fund Fund Stock Fund Fund
---------- --------- ------------ ----------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Interest and dividends $ 441,456 $ 23,378 $ 550,782 $ 36,096 $ 1,343,008 $ 12,983 $ 1,291,349
Net realized and unrealized appreciation
( depreciation ) of investments - (7,579) (694,543) 109,823 828,061 (11,437) 713,734
Interest on loans - - - - - - -
Participants' contributions 232,976 23,297 321,139 251,819 971,277 59,081 594,248
Employer matching contributions 75,977 10,001 89,952 44,908 255,267 9,596 184,913
Rollover contributions 122,064 4,342 25,164 81,780 234,986 2,247 112,979
---------- --------- ------------ ----------- ------------ --------- ------------
Total Additions 872,473 53,439 292,494 524,426 3,632,599 72,470 2,897,223
---------- --------- ------------ ----------- ------------ --------- ------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit distributions 1,639,353 19,751 111,307,835 714,460 4,754,911 39,582 1,585,564
Administrative expenses 6,625 162 4,931 538 13,700 382 10,477
Forfeitures - net (13,416) 100 1,335 - 8,931 52 2,963
---------- --------- ------------ ----------- ------------ --------- ------------
Total Deductions 1,632,562 20,013 1,314,101 714,998 4,777,542 40,016 1,599,004
---------- --------- ------------ ----------- ------------ --------- ------------
Change in net assets available
for benefits (760,089) 33,426 (1,021,607) (190,572) (1,144,943) 32,454 1,298,219
Fund transfers (687,943) 137,889 (1,725,798) (872,474) (1,403,101) (183,213) (1,168,192)
Transfer to other plan (80,157) (257) (244,102) (43,907) (667,946) (4,351) (284,373)
Net Assets Available for Benefits
Beginning of Year 8,179,027 224,008 8,567,511 2,953,069 25,663,556 308,600 12,219,810
---------- --------- ------------ ----------- ------------ --------- ------------
Net Assets Available for Benefits
End of Year $6,650,838 $ 395,066 $ 5,576,004 $ 1,846,116 $ 22,447,566 $ 153,490 $ 12,065,464
========== ========= ============ =========== ============ ========= ============
<CAPTION>
Fidelity Franklin Adaptive
Diversified Small Cap Fidelity Broadband
International Growth Freedom Company Loan
Fund Fund Funds Stock Fund Fund Total
------------- ------------ --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Interest and dividends $ 11,881 $ 8,146 $ 10,083 $ 16,384 $ - $ 3,745,546
Net realized and unrealized appreciation
( depreciation ) of investments 59,926 510,952 3,732 2,485,662 - 3,998,331
Interest on loans - - - - 68,371 68,371
Participants' contributions 104,073 199,255 30,331 363,014 - 3,150,510
Employer matching contributions 24,433 64,743 19,141 115,025 - 893,956
Rollover contributions 33,556 40,340 21,025 616,882 - 1,295,365
------------- ------------ --------- ---------- ---------- ------------
Total Additions 233,869 823,436 84,312 3,596,967 68,371 13,152,079
------------- ------------ --------- ---------- ---------- ------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit distributions 32,593 380,875 2,028 121,809 199,850 10,798,611
Administrative expenses 116 396 27 1,104 - 38,458
Forfeitures - net - 22 - 13 - -
------------- ------------ --------- ---------- ---------- ------------
Total Deductions 32,709 381,293 2,055 122,926 199,850 10,837,069
------------- ------------ --------- ---------- ---------- ------------
Change in net assets available
for benefits 201,160 442,143 82,257 3,474,041 (131,479) 2,315,010
Fund transfers 378,251 1,770,432 178,251 3,678,449 (102,551) -
Transfer to other plan (7,946) (30,281) - - (216,956) (1,580,276)
Net Assets Available for Benefits
Beginning of Year 123,633 624,324 - 913,786 1,314,711 61,092,035
------------- ------------ --------- ---------- ---------- ------------
Net Assets Available for Benefits
End of Year $ 695,098 $ 2,806,618 $ 260,508 $8,066,276 $ 863,725 $ 61,826,769
============= ============ ========= ========== ========== ============
</TABLE>
See accompanying notes to finanacial statements.
4
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
Managed Fidelity Fidelity Spartan Fidelity
Income U.S. Bond Puritan U.S. Equity Magellan
Fund Index Fund Fund Index Fund Fund
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Interest and dividends $ 514,538 $ 27,244 $ 969,679 $ 30,425 $ 1,929,494
Net realized and unrealized appreciation
(depreciation) of investments -- (12,826) (153,238) 449,023 3,417,761
Interest on loans -- -- -- -- --
Participants' contributions 436,598 43,136 741,091 288,940 1,552,333
Employer matching contributions 86,147 5,920 118,640 48,955 257,962
Rollover contributions 69,837 142,183 20,426 59,065 421,748
------------ ------------ ------------ ------------ ------------
Total Additions 1,107,120 205,657 1,696,598 876,408 7,579,298
------------ ------------ ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit distributions 1,765,432 21,266 1,960,766 131,540 3,522,677
Administrative expenses 6,613 166 4,574 466 8,910
Forfeitures-net (14,990) -- 2,946 -- 6,996
------------ ------------ ------------ ------------ ------------
Total Deductions 1,757,055 21,432 1,968,286 132,006 3,538,583
------------ ------------ ------------ ------------ ------------
Change in net assets available
for benefits (649,935) 184,225 (271,688) 744,402 4,040,715
Fund transfers 508,374 (3,368) (1,330,064) 1,202,701 1,039,522
Transfer to other plan (642,091) -- (318,366) (17,746) (1,262,024)
Net Assets Available for Benefits
Beginning of Year 8,962,679 43,151 10,487,629 1,023,712 21,845,343
------------ ------------ ------------ ------------ ------------
Net Assets Available for Benefits
End of Year $ 8,179,027 $ 224,008 $ 8,567,511 $ 2,953,069 $ 25,663,556
============ ============ ============ ============ ============
<CAPTION>
Fidelity Franklin Adaptive
Fidelity Strong Diversified Small Cap Broadband
Low-Priced Opportunity International Growth Company
Stock Fund Fund Fund Fund Stock Fund
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Interest and dividends $ 20,636 $ 1,285,044 $ 5,045 $ 5,992 $ --
Net realized and unrealized appreciation
(depreciation) of investments (15,305) 699,752 7,681 101,115 456,906
Interest on loans -- -- -- -- --
Participants' contributions 77,282 1,112,788 61,947 110,082 16,232
Employer matching contributions 8,647 195,007 7,633 15,881 21,069
Rollover contributions 9,596 41,601 18,238 14,759 140,796
------------ ------------ ------------ ------------ ------------
Total Additions 100,856 3,334,192 100,544 247,829 635,003
------------ ------------ ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit distributions 27,912 2,128,190 40,854 177,796 9,740
Administrative expenses 495 6,602 79 210 78
Forfeitures-net -- 5,046 -- 2 --
------------ ------------ ------------ ------------ ------------
Total Deductions 28,407 2,139,838 40,933 178,008 9,818
------------ ------------ ------------ ------------ ------------
Change in net assets available
for benefits 72,449 1,194,354 59,611 69,821 625,185
Fund transfers (4,832) (2,271,788) (68,763) 309,191 288,601
Transfer to other plan -- (283,840) (36,280) -- --
Net Assets Available for Benefits
Beginning of Year 240,983 13,581,084 169,065 245,312 --
------------ ------------ ------------ ------------ ------------
Net Assets Available for Benefits
End of Year $ 308,600 $ 12,219,810 $ 123,633 $ 624,324 $ 913,786
============ ============ ============ ============ ============
<CAPTION>
Loan
Fund Total
------------ ------------
<S> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Interest and dividends $ -- $ 4,788,097
Net realized and unrealized appreciation
(depreciation) of investments -- 4,950,869
Interest on loans 95,139 95,139
Participants' contributions -- 4,440,429
Employer matching contributions -- 765,861
Rollover contributions -- 938,249
------------ ------------
Total Additions 95,139 15,978,644
------------ ------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit distributions 168,325 9,954,498
Administrative expenses -- 28,193
Forfeitures-net -- --
------------ ------------
Total Deductions 168,325 9,982,691
------------ ------------
Change in net assets available
for benefits (73,186) 5,995,953
Fund transfers 330,426 --
Transfer to other plan (92,034) (2,652,381)
Net Assets Available for Benefits
Beginning of Year 1,149,505 57,748,463
------------ ------------
Net Assets Available for Benefits
End of Year $ 1,314,711 $ 61,092,035
============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Description of the Plan
-----------------------
The following description of the Adaptive Broadband Corporation Tax-Deferred
Savings and Deferred Profit Sharing Plan (the Plan), provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
The Plan was established by the Board of Directors of Adaptive Broadband
Corporation (the Company), to provide eligible employees retirement,
disability, death, and income tax benefits through voluntary deferral of
compensation. Employees of the Company and its subsidiaries are eligible to
participate in the 401(k) feature of the Plan immediately upon employment.
The Plan also contains a profit sharing provision.
The Plan allows for participant loans. A participant may borrow up to the
lesser of $50,000 or 50% of his/her account balance with a minimum loan of
$1,000. Repayments on these loans are through payroll deductions. In general,
the loan repayment period is not to exceed five years, except in the case
where the loan is used to acquire a principal residence. Currently, loans
bear interest at one percent over prime rate determined on the first day of
the quarter the loan is granted. This rate is subject to change.
The Plan is administered by an Administrative Committee that serves at the
discretion of the Company's Board of Directors. The Administrative Committee
is responsible for all matters including, but not limited to, eligibility,
rights to benefits, interpreting Plan documents, directing the Plan trustee
and maintaining participants' accounts. Fidelity Management Trust Company
serves as the trustee, and Fidelity Institutional Retirement Services Company
serves as the recordkeeper.
Method of Accounting
--------------------
The Plan is accounted for on the accrual basis of accounting, except for
benefit payments and withdrawals, which are recorded when paid, in accordance
with generally accepted accounting principles.
6
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
------------------------------------------------------
Method of Accounting - Continued
--------------------------------
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Plan management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
Investment Valuations
---------------------
Investments in managed funds consisting primarily of contracts with life
insurance companies and other fixed income investments are stated at cost,
which represents contributions made under the contracts and other investments
plus interest at the contract rates, and approximates market value.
Investments in mutual funds and Company common stock are stated at market
value based on quoted market prices on the last day of the Plan year.
Administrative Expenses
-----------------------
The Plan generally pays administrative expenses up to the greater of 50
percent of total cost or 10 percent of total income. Any expenses in excess
of this amount may be paid by the Company. Administrative expenses consist of
trustee fees, administrator fees, investment advisor fees, and audit fees.
Expenses paid by the Plan for the years ended June 30, 2000 and 1999 were
$38,458 and $28,193, respectively. Expenses paid by the Company for the years
ended June 30, 2000 and 1999 were $51,910 and $92,700, respectively.
Cash Equivalents
----------------
Cash equivalents represents funds temporarily deposited into the Fidelity
Institutional Money Market Portfolio prior to purchase of investments.
7
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
2. CONTRIBUTIONS
-------------
Participants may contribute from 1 percent to 20 percent of their total
compensation during the Plan year and exclude the contributions made during
each calendar year, subject to certain limitations, from current taxable
income (as defined by Section 401(k) of the Internal Revenue Code, as
amended). The Company may make matching contributions to each participant's
account on June 30 equal to 66 2/3% of the first $1,500, and 50% of the next
$2,000 of the participant's contribution up to a maximum of $2,000 for the
year ended June 30, 2000, and 66 2/3% of the first $1,500, and 50% of the
next $1,200 of the participant's contribution up to a maximum of $1,600 for
the year ended June 30, 1999. Matching contributions are dependent on the
profitability of the Company and may be changed or eliminated at the
discretion of the Company's Board of Directors. Matching contributions of
$893,956 and $765,861 were made by the Company for the years ended June 30,
2000 and 1999, respectively.
The Company may also make a profit sharing contribution in an amount
determined by the Board of Directors. No profit sharing contributions were
made for the years ended June 30, 2000 and 1999.
Participants are 100 percent vested in the salary deferral and in the
Company's matching contributions at all times. Profit sharing contributions
become vested at a rate of 20% for each year of service. Forfeitures may be
allocated among remaining eligible participants, or used to reduce Company
contributions or to pay plan expenses at the Company's discretion.
3. BENEFITS AND WITHDRAWALS
------------------------
Benefits are paid in a lump sum to participants upon normal retirement (age
65) or termination of employment from the Company.
Participant contributions to the Plan may also be withdrawn upon written
request to and approval by the Administrative Committee in instances in which
a participant has suffered a financial hardship and no alternative source of
money is available.
8
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
3. BENEFITS AND WITHDRAWALS - CONTINUED
------------------------------------
Participants retired or terminated from the Company may elect to leave vested
amounts in the Plan; however, no future contributions can be made to the
participants' accounts. Benefits and withdrawals are not reflected in the
accompanying financial statements until paid by the Plan.
4. INVESTMENTS
-----------
Participants in the Plan direct the investment of their funds and may select
from one or a combination of the following investment funds:
Managed Income Fund
-------------------
This fund is a portfolio comprised of a combination of fixed-income insurance
company instruments and a Managed Income Portfolio (MIP). The fixed-income
insurance company instruments represent investment contracts. The MIP is
managed by Fidelity Management Trust Company. While the risk is rated as
medium-low, this fund's risk is subject to the credit-worthiness of the
issuing companies and the underlying assets in the MIP.
Fidelity U.S. Bond Index Fund
-----------------------------
This mutual fund is an income fund and strives to provide investment
performance that corresponds to the Lehman Brothers Aggregate Bond Index.
Investments consist of medium to high quality U.S. Treasury and U.S.
Government securities, corporate bonds, asset-backed and mortgage-backed
securities, and U.S. dollar denominated foreign securities with maturities of
at least one year. The risk is rated as medium-low.
Fidelity Puritan Fund
---------------------
9
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
This mutual fund is a balanced fund, investing in high-yielding U.S. and
foreign securities, including common and preferred stocks and bonds of any
quality. The risk level is considered moderate, with greater potential for
capital growth.
4. INVESTMENTS - CONTINUED
-----------------------
Spartan U.S. Equity Index Fund
------------------------------
This is a growth and income mutual fund. The fund invests in companies that
make up the S&P 500 Index(TM), and focuses on duplicating the composition and
performance of the S&P 500(TM). The fund is designed to pursue possible high,
long-term growth, with associated moderate risk, through a portfolio of
securities that broadly represent the stock market.
Fidelity Magellan Fund
----------------------
This fund provides a potential for higher long-term capital appreciation
through investments in domestic stocks and bonds, and may also invest in
foreign securities.
Fidelity Low-Priced Stock Fund
------------------------------
This is a growth mutual fund with an objective of long-term capital
appreciation through investing in stocks of companies the fund manager
considers undervalued or out of favor with other investors and that could
offer the possibility of significant growth.
Strong Opportunity Fund
-----------------------
This is a growth mutual fund managed by Strong Capital Management, Inc., and
invests primarily in domestic and foreign stocks of medium-sized companies
that the advisor believes are under-researched and attractively valued, with
the potential for high long-term returns.
Fidelity Diversified International Fund
---------------------------------------
10
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
This is a growth mutual fund that invests outside of the U.S. Investments
consist primarily of stocks of larger foreign companies that are included in
the Morgan Stanley EAFE Index(TM) that appear undervalued compared to
industry norms. This investment may present higher risks and potential
rewards, and may complement the behavior of domestic funds.
4. INVESTMENTS - CONTINUED
-----------------------
Franklin Small Cap Growth Fund
------------------------------
This fund is managed by Franklin Advisors, Inc., and is a growth mutual fund
that primarily invests in companies that have a market capitalization of less
than $1 billion and tries to keep at least one-third of its assets invested
in companies under $550 million. The fund may invest up to 25% of its assets
in foreign securities, which may increase risk for the potential greater
return over the long term.
Fidelity Freedom Funds
----------------------
The Fidelity Freedom Funds consist of the Freedom Income Fund, the Freedom
2000 Fund, the Freedom 2010 Fund, the Freedom 2020 Fund, and the Freedom 2030
Fund and became an investment option beginning November 1, 1999. Currently,
the funds are invested in a collection of Fidelity mutual funds and provide a
moderate asset allocation. The Freedom Income Fund is designed for those
already in retirement, and has the most conservative mix of mutual funds,
emphasizing bond and money market funds. The Freedom 2030 Fund with the
longest time horizon has a heavy weighting towards equity funds. Each fund's
underlying asset mix will change, becoming more conservative with the passage
of time.
Adaptive Broadband Company Stock Fund
-------------------------------------
Effective January 1, 1999, the Plan was amended to add a Company Stock Fund
as an available investment option. This fund consists of shares of Adaptive
Broadband Corporation common stock. The risks associated with this
investment would be dependent upon the overall financial performance of the
Company, the industry in which it operates, and any restrictions set forth by
the Securities and Exchange Commission related to employee purchases of the
Company's common stock.
11
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
4. INVESTMENTS - CONTINUED
-----------------------
The following table presents investments as of June 30, 2000 and 1999,
respectively.
2000 1999
---- ----
Investments at Cost, which Approximates
---------------------------------------
Market Value
------------
Fidelity Managed Income Portfolio $ 1,254,739 $ 3,082,819 *
----------- -----------
Investments at Contract Value
-----------------------------
New York Life Insurance,GA-30298,
matures 6/30/00, 6.06% - 3,126,495 *
Metropolitan Life Insurance,
GAC-20267, matures 6/30/01, 6.70% 1,780,940 1,888,522
----------- -----------
3,035,679 5,012,017
----------- -----------
Investments at Fair Value as Determined
---------------------------------------
by Quoted Market Price
----------------------
Fidelity U.S. Bond Index Fund 385,065 218,088
Fidelity Puritan Fund 5,487,398 * 8,449,921 *
Spartan U.S. Equity Index Fund 1,801,848 2,907,269
Fidelity Magellan Fund 22,194,277 * 25,405,676 *
Fidelity Low-Priced Stock Fund 143,894 299,953
Strong Opportunity Fund 11,880,769 * 12,027,752 *
Fidelity Diversified International Fund 670,665 116,501
Franklin Small Cap Growth Fund 2,741,876 608,694
Fidelity Freedom Funds 241,367 -
Adaptive Broadband Company Stock Fund 7,361,466 * 892,717
----------- -----------
52,908,625 50,926,571
----------- -----------
Total Investments $55,944,304 $59,021,407
=========== ===========
* Represents 5% or more of net assets available for benefits
12
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
4. INVESTMENTS - CONTINUED
-----------------------
During 2000 and 1999, the Plan's investments (including investments bought,
sold, and held during the year) appreciated in value by $3,998,331 and
$4,950,869, respectively.
2000 1999
---- ----
Fidelity U.S. Bond Index Fund $ (7,579) $ (12,826)
Fidelity Puritan Fund (694,543) (153,238)
Spartan U.S. Equity Index Fund 109,823 449,023
Fidelity Magellan Fund 828,061 3,417,761
Fidelity Low-Priced Stock Fund (11,437) (15,305)
Strong Opportunity Fund 713,734 699,752
Fidelity Diversified International Fund 59,926 7,681
Franklin Small Cap Growth Fund 510,952 101,115
Fidelity Freedom Funds 3,732 -
Adaptive Broadband Company Stock Fund 2,485,662 456,906
---------- ----------
$4,005,910 $4,963,695
========== ==========
5. FEDERAL INCOME TAXES
--------------------
The Plan obtained its latest determination letter on November 12, 1996, 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. The Plan has been amended since receiving the determination letter.
However, the plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, they believe
that the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
13
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
6. INVESTMENT CONTRACTS DISCLOSURE
-------------------------------
In accordance with the American Institute of Certified Public Accountants
(AICPA) Statement of Position 94-4, "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans",
(SOP 94-4), the following information is provided for the insurance contracts
held in the Managed Income Fund at June 30, 2000 and 1999, respectively:
<TABLE>
2000 1999
---- ----
<S> <C> <C>
Average contract yield for the year ended June 30: 6.38% 6.26%
Crediting interest rate as of June 30: 6.70% 6.36%
Valuation reserve amount: $ 0 $ 0
Fair value of investment contracts: $1,780,940 $5,012,017
</TABLE>
To determine the aggregate fair value of the insurance contracts held by the
Plan, the projected future payouts from each contract were discounted using
an average interest rate offered on new contracts as of the measurement dates
of June 30, 2000 and 1999, having similar contract durations as the contracts
in effect for the Plan. All contracts have fixed rates.
If any contracts are terminated before their expiration dates or if certain
other events occur requiring liquidation of a portion of these contracts, the
value of the contracts may be reduced by a penalty, a market value
adjustment, or both.
7. TRANSFERS TO OTHER PLAN
-----------------------
Effective April 29, 1999, the Company changed its corporate name from
California Microwave, Inc. to Adaptive Broadband Corporation. At that time,
the Company completed the sale of two of its divisions (the Government
Divisions) to Northrop Grumman Corporation. These former employees of
California Microwave, Inc. were given the option of transferring their
balances in the Plan to the Northrop Grumman Electronic Sensors and Systems
Sector Savings and Investment Plan (Northrop Grumman). Due to participants
choosing this option, $1,363,320 in assets and
14
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
$216,956 in particular loan balances were transferred to the Northrop Grumman
plan as of June 30, 2000.
7. TRANSFERS TO OTHER PLAN - CONTINUED
-----------------------------------
Effective May 28, 1998, the Company completed the sale of its Services
Division. As a result of this sale, the former employees of this Division
were given the option of transferring their balances in the Plan to another
plan. Due to participants choosing this option, $2,560,347 in assets and
$92,034 in participant loans were transferred to the other plan during 1999.
8. SUBSEQUENT EVENTS
-----------------
Subsequent to June 30, 2000, the Company completed the sale of several
divisions. As a result of these sales, the former employees of these
divisions were given the option of transferring their balances in the Plan to
other plans. Due to participants choosing this option, $3,192,024 in assets
and $338,211 in participant loans were transferred to other plans during
September and October 2000.
On November 13, 2000 the Company announced its intent to merge with Western
Multiplex Corporation. It is unknown what effect the merger would have on
the Plan.
15
<PAGE>
SUPPLEMENTAL SCHEDULE
---------------------
16
<PAGE>
ADAPTIVE BROADBAND CORPORATION
TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING PLAN
EIN 94-1668412 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 2000
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Description of Investment
Identity of Issue, Borrower, Including Maturity Date, Rate of Current
Lessor or Similar Party Interest, Par or Maturity Value Cost Value
------------- ---------------------------------- -------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
* Fidelity Management Trust Company Managed Income Portfolio $ 1,254,739 $ 1,254,739
Metropolitan Life Insurance Insurance Contract & Policies
GAC-20267** 6/30/01, 6.70% 1,780,940 1,780,940
* Fidelity Investments U.S. Bond Index Fund 392,833 385,065
* Fidelity Investments Puritan Fund 5,639,709 5,487,398
* Fidelity Investments Spartan US Equity Index Fund 1,499,474 1,801,848
* Fidelity Investments Magellan Fund 16,212,799 22,194,277
* Fidelity Investments Low-Priced Stock Fund 140,853 143,894
Strong Funds Opportunity Fund 9,084,521 11,880,769
* Fidelity Investments Diversified International Fund 623,839 670,665
Franklin Funds Small Cap Growth Fund 2,300,225 2,741,876
* Adaptive Broadband Corporation Common Stock 7,528,417 7,361,466
* Fidelity Investments Freedom Income Fund 258 259
* Fidelity Investments Freedom 2000 Fund 915 920
* Fidelity Investments Freedom 2010 Fund 77,507 76,719
* Fidelity Investments Freedom 2020 Fund 20,457 21,179
* Fidelity Investments Freedom 2030 Fund 141,157 142,290
* Participant Loans 7.5% - 9.5% - 863,725
</TABLE>
* Party-in-interest
** Current value represents contract value
17
