<PAGE>
Exhibit 99.1
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
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 0-14365
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
ATGI 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
ALPHA TECHNOLOGIES GROUP, INC.
306 Pasadena Avenue
South Pasadena, CA 91030
<PAGE>
REQUIRED INFORMATION
Item 1. The audited statements of financial condition (Statements of Net Assets
Available for Benefits) as of December 31, 1999 and 1998 are set forth
on page F-2.
Item 2. The audited statements of income and changes in plan equity (Statements
of Changes in Net Assets Available for Benefits) for the year ended
December 31, 1999 are set forth on page F-3.
Item 3. The statements required by Items 1 and 2 were prepared in accordance
with the applicable provisions of Article 6A of Regulation S-X (17 CFR
210.6A-01-.6A-05).
Item 4. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATGI 401(K) PLAN
By: /s/ Steve E. Chupik
-------------------
Steve E. Chupik
Trustee of the Plan
Date: June 28, 2000
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees of the
ATGI 401(K) PLAN
We have audited the accompanying statement of net assets available for
benefits of the ATGI 401(k) 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 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 net assets available for benefits of the
Plan as of December 31, 1999 and 1998, and the changes in its net assets
available for benefits for the year ended December 31, 1999 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 accompanying supplemental
schedules of assets held for investment purposes at December 31, 1999 and
reportable transactions for the year then ended are presented for purposes 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 are not
a required part of the basic financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in our audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Melton & Melton, L.L.P.
Houston, Texas
May 11, 2000
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
ASSETS
------
Investments:
<S> <C> <C>
Alpha Technologies Group, Inc.,
Common Stock (at market), 231,103 and
248,379 shares at December 31, 1999
and 1998, respectively $ 1,386,616 $ 380,331
Connecticut General Life Insurance Company
(a CIGNA company) Charter Funds at contract value:
Guaranteed Short-Term Securities Fund 367,479 371,761
Guaranteed Long-Term Fund 2,846,742 2,770,898
Connecticut General Life Insurance Company
(a CIGNA company) Charter Funds at market value:
Large Company Stock Index Fund 1,727,450 1,405,743
Connecticut General Life Insurance Company
(a CIGNA company) Separate Accounts at market value:
Fidelity Advisor Growth Opportunities Account 1,656,808 1,881,658
Janus Account 1,443,245 642,302
PBHG Growth Account 553,911 416,604
American Century Vista Account 149,247 47,458
Participant loans 432,835 299,054
----------- ----------
Total investments 10,564,333 8,215,809
----------- ----------
Receivables:
Employer contributions 36,579 36,755
Participant contributions 97,539 89,581
----------- ----------
Total receivables 134,118 126,336
----------- ----------
Cash 25
---------- ----------
Total assets 10,698,451 8,342,170
----------- ----------
</TABLE>
LIABILITIES
-----------
<TABLE>
<CAPTION>
<S> <C> <C>
Administrative fees payable 5,289 4,045
----------- ----------
Total liabilities 5,289 4,045
----------- ----------
Net assets available for benefits $10,693,162 $8,338,125
=========== ==========
</TABLE>
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ADDITIONS TO NET ASSETS:
<S> <C>
Participant contributions $ 934,842
Employer contributions 313,932
-----------
1,248,774
Interest and dividend income 187,174
-----------
Total additions 1,435,948
-----------
DEDUCTIONS FROM NET ASSETS:
Benefit payments 1,252,590
Commissions and fees paid by
participants 26,329
Administrative expenses 32,748
-----------
Total deductions 1,311,667
-----------
Net realized and unrealized
appreciation in fair market
value of investments 2,230,756
-----------
Increase in net assets 2,355,037
NET ASSETS AVAILABLE FOR BENEFITS:
Balance, December 31, 1998 8,338,125
-----------
Balance, December 31, 1999 $10,693,162
===========
</TABLE>
(See Notes to Financial Statements)
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
The ATGI 401(k) Plan (the "Plan"), for employees of Alpha Technologies
Group, Inc. and its subsidiaries (the "Company"), is a defined contribution
profit sharing plan, established November 1, 1977.
ELIGIBILITY
All employees are eligible to participate in the Plan without regard to
minimum age or service requirements. The employee must be employed on the
following entry dates in order to participate: January 1, April 1, July 1, or
October 1.
DISTRIBUTIONS
A participant or beneficiary shall be immediately vested upon death,
retirement or termination of employment due to total and permanent disability.
Normal retirement age under the Plan is age 59. Upon an employee's termination
or retirement, the funds in his or her account are distributed in the form of an
annuity, cash or stock.
The statement of net assets available for benefits as of December 31,
1999 and 1998 includes amounts pending distribution to participants of $15,821
and $43,170, respectively.
If a participant terminates employment prior to normal retirement age
for any reason other than death or disability, the participant's interest in
Company contributions to the Plan vests as follows:
Percent Of
Non-forfeitable
Years Of Service Interest
---------------- ---------------
Less than one year 0%
One year 20
Two years 40
Three years 60
Four years 80
Five years 100
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
After a participant's employment is terminated, any non-vested portion
of the participant's account can be used to offset administrative fees and the
Company's matching contribution, thus reducing future employer contributions.
Forfeitures included in net assets available for benefits at December 31, 1999
and 1998 amounted to $55,705 and $17,811, respectively. During the plan year
ended December 31, 1999, the Company used $30,052 of forfeiture monies for
employer contributions and $31,503 to offset administrative fees.
CONTRIBUTIONS
The Company's matching contribution is a discretionary amount to be
determined in advance each month by the Company. For 1999, the matching
contribution was equal to 50 percent of each participant's contribution not to
exceed 6 percent of the participant's compensation. The Company may also make
an additional discretionary contribution as determined by the Board of
Directors. No additional discretionary contribution was made for the year ended
December 31, 1999. Each participant's contribution is based upon a percentage
of annual compensation determined by the individual and is limited to the lesser
of 15 percent of the participant's compensation for the year or $10,000 in 1999,
as adjusted by the Internal Revenue Service for changes in the cost-of-living
pursuant to Section 402(g)(5) of the Internal Revenue Code. Each participant
may also contribute up to 10 percent of total compensation on an after-tax
basis. The combined pretax and after-tax contributions cannot exceed the Plan's
limitations. Participants are at all times fully vested in their contributions
and the appreciation or depreciation thereon.
PARTICIPANT LOANS
Plan participants may borrow Plan assets up to a maximum of the lesser
of $50,000 or 50 percent of their vested account balance in the Plan. Loans are
repaid in level installments through payroll deductions for periods ranging up
to five years or up to 15 years for the purchase of a primary residence. The
loans are secured by the participant's account to the extent of the principal
amount of the loan plus accrued interest.
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 of the Employee Retirement Income
Security Act of 1974 ("ERISA"). In the event of Plan termination, participants
will become 100 percent vested in their accounts.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OF FUNDS
There are eight funds in which participants can invest contributions
and in which other amounts are credited to participants' accounts as of December
31, 1999:
ATGI Stock Fund - A fund that maintains a brokerage account with
Merrill Lynch and invests solely in the common stock of Alpha Technologies
Group, Inc.
Guaranteed Short-Term Securities Fund - A CIGNA Charter fixed-income
investment fund that invests primarily in U.S. Treasury securities, U.S.
Government securities, certificates of deposit, time deposits, repurchase
agreements and commercial paper issued by major domestic and foreign
corporations. The fund seeks to maximize current income while maintaining a
high degree of liquidity and safety of principal.
Guaranteed Long-Term Fund - A CIGNA Charter fixed-income investment
fund that invests primarily in intermediate-term bonds and commercial mortgages.
The fund seeks to provide competitive yields relative to comparable guaranteed
fixed income investment funds.
Large Company Stock Index Fund - A CIGNA Charter investment fund that
is constructed to reflect the composition of the Standard and Poor's 500 Index.
Fidelity Advisor Growth Opportunities Account - A CIGNA Separate
Account that invests wholly in the Fidelity Advisor Growth Opportunities Fund, a
mutual fund. The fund seeks to provide long-term capital growth by investing
primarily in common stocks and securities convertible into common stock.
Janus Account - A CIGNA Separate Account that invests wholly in the
Janus Fund, a mutual fund. The fund seeks to provide long-term growth of
capital by investing primarily in a diversified portfolio of common stock.
PBHG Growth Account - A CIGNA Separate Account that invests wholly in
the PBHG Growth Fund, a mutual fund. The fund seeks capital appreciation by
investing primarily in common stock and securities convertible into common stock
of small and medium capitalization companies.
American Century Vista Account - A CIGNA Separate Account that invests
wholly in the American Century Vista Account, a mutual fund. The fund seeks to
provide long-term growth of capital by investing primarily in equity-equivalent
securities of small and medium-sized companies.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the ATGI 401(k) Plan are maintained on the
cash basis; however, the financial statements have been prepared on the accrual
basis of accounting.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Plan. Forfeitures
of any non-vested portion of a participant's account can be used to offset
administrative fees.
INVESTMENTS
Pursuant to the Department of Labor's Rules and Regulations for
Reporting and Disclosure under ERISA, the Plan reports investments in the
financial statements at current market value in accordance with generally
accepted accounting principles. As of December 31, 1999 and 1998, the ATGI
Stock Fund is stated at aggregate market value based on quoted market prices for
the last trading day of the Plan year. All other funds, except the Guaranteed
Short-Term Securities Fund and the Guaranteed Long-Term Fund, which are stated
at contract value, as of December 31, 1999 and 1998 are stated at aggregate
market value as determined by CIGNA.
INCOME TAXES
The Plan obtained its latest determination letter on February 27, 1995
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, no provision for income
taxes has been included in the Plan's financial statements.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
-----------------
NOTE 3 - INVESTMENTS
During the year ended December 31, 1999, the Plan's investments (including
investments bought, sold, and held during the year) appreciated in value as
follows:
ATGI Stock Fund $1,111,613
CIGNA Large Company Stock Index Fund 280,677
Fidelity Advisor Growth Opportunities Account 64,974
Janus Account 406,001
PBHG Growth Account 293,284
American Century Vista Account 74,207
----------
$2,230,756
==========
Investments that represent 5 percent or more of the Plan's net assets
at December 31, 1999 and 1998 are separately identified below:
<TABLE>
<CAPTION>
Market Or
Contract Value
Identity Of -----------------------
Party Involved Description 1999 1998
-------------------------- -------------------- ----------- ----------
<S> <C> <C> <C>
ATGI Stock Fund Equity securities $1,386,616 $ -
CIGNA Guaranteed Fixed-income
Long-Term Fund investment account 2,846,742 2,770,898
CIGNA Large Company Pooled stock market
Stock Index Fund index account 1,727,450 1,405,743
Fidelity Advisor Growth Capital appreciation
Opportunities Account investment account 1,656,808 1,881,658
Janus Account Capital appreciation
investment account 1,443,245 642,302
PBHG Growth Capital appreciation
Account investment account 553,911 -
</TABLE>
<PAGE>
ATGI 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 4 - CONTRACT WITH INSURANCE COMPANY
The Plan holds a deposit administration contract with CIGNA. The
Guaranteed Long-Term (GLT) Fund and the Guaranteed Short-Term Securities (GST)
Fund are unallocated funds. The GLT Fund maintains a variable annualized rate,
which was 5.45 percent and 5.65 percent at December 31, 1999 and 1998,
respectively. The GST Fund maintains a variable monthly rate, which was 3.60
percent and 3.50 percent annualized at December 31, 1999 and 1998, respectively.
NOTE 5 - PLAN AMENDMENT
The Plan was amended effective April 14, 1999 to increase the
involuntary cash pay-out from $3,500 to $5,000, as allowed under the Taxpayer
Relief Act of 1997 (TRA '97).
NOTE 6 - PARTIAL TERMINATION
The Company experienced a 26 percent reduction in eligible
participants due to involuntary terminations during the plan year ended December
31, 1998. Pursuant to the Internal Revenue Code Section 411(d)(3), the affected
participants become 100 percent vested in their account balances.
<PAGE>
SCHEDULE I
ATGI 401(K) PLAN
SCHEDULE H (FORM 5500) PART IV LINE 4I - SCHEDULE OF
ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
EIN # 76-0079338
PLAN #001
<TABLE>
<CAPTION>
(A) (B) (C) (E)
PARTY-IN- IDENTITY DESCRIPTION (D) CURRENT
INTEREST OF ISSUE OF INVESTMENT COST VALUE
---------------- ----------------------- ------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
* Alpha Technologies
Group, Inc. ATGI Stock Fund $ 959,045 $1,386,616
* Connecticut General
Life Insurance Company
(A CIGNA company)
Charter Funds Guaranteed Short-Term
Securities Fund 367,479 367,479
Guaranteed Long-Term Fund 2,846,742 2,846,742
Large Company Stock Index Fund 1,034,642 1,727,450
* Connecticut General
Life Insurance Company
(A CIGNA company)
Separate Accounts Fidelity Advisor Growth
Opportunities Account 1,149,280 1,656,808
Janus Account 955,019 1,443,245
PBHG Growth Account 291,436 553,911
American Century Vista Account 82,161 149,247
Participant Prime plus 1% participant
Loans loans - 432,835
</TABLE>
*Represents a party-in-interest to the Plan.
<PAGE>
SCHEDULE II
ATGI 401(K) PLAN
SCHEDULE H (FORM 5500) PART IV LINE 4J - SCHEDULE OF
REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN # 76-0079338
PLAN #001
<TABLE>
<CAPTION>
(h)
Current
(a) (g) Value Of
Identity (b) (c) (d) Cost Assets On (i)
Of Party Description Purchase Selling Of Transaction Net Gain
Involved Of Assets Price Price Asset Date Or (Loss)
---------------------- ---------------------- --------- --------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Alpha Technologies
Group, Inc. ATGI Stock Fund $205,877 - $205,877 $205,877 -
ATGI Stock Fund - $318,611 319,781 318,611 $ (1,170)
Connecticut General
Life Insurance
Company (A CIGNA
company) Charter
Funds Large Company Stock
Index Fund 265,964 - 265,964 265,964 -
Large Company Stock
Index Fund - 219,615 140,870 219,615 78,745
Connecticut General
Life Insurance
Company (A CIGNA
company) Separate
Accounts Fidelity Advisor Growth
Opportunities Account 316,529 - 316,529 316,529 -
Fidelity Advisor Growth
Opportunities Account - 600,195 407,752 600,195 192,443
Janus Account 638,773 - 638,773 638,773 -
Janus Account - 237,950 172,988 237,950 64,962
PBHG Growth Account 104,889 - 104,889 104,889 -
PBHG Growth Account - 261,095 220,742 261,095 40,353
American Century
Vista Account 44,500 - 44,500 44,500 -
American Century
Vista Account - 16,873 16,218 16,873 655
</TABLE>
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
1 Consent of Melton & Melton, L.L.P.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report included in this Form 11-K, into the
Company's Form S-8 Registration Statements filed on June 23, 1986 (Reg. No.
33-06695); January 29, 1987 (Reg. No. 33-11627); September 28, 1987 (Reg. No.
33-17359); March 17, 1988 (Reg. No. 33-20706); June 30, 1989 (Reg. No.
33-29636); June 23, 1992 (Reg. No. 33-48663); and April 30, 1996 (Reg. No.
333-03001); and S-3 Registration Statement filed on August 16, 1996 (Reg. No.
333-10311).
Houston, Texas
May 11, 2000 /s/ Melton & Melton, L.L.P.
