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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 (No Fee Required)
For the fiscal year ended DECEMBER 31, 1999.
OR
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 (No Fee Required)
For the transition period from ________ to ________
Commission file number 0-11309.
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
GALILEO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
NETOPTIX CORPORATION
STURBRIDGE BUSINESS PARK, P.O. BOX 550
STURBRIDGE, MASSACHUSETTS 01566
FINANCIAL STATEMENTS OF THE PLAN
Report of Independent Auditors.
1. Statements of Financial Condition.
2. Statements of Changes in Participants' Equity.
3. Notes to Financial Statements.
EXHIBIT
Consent of Ernst & Young to the incorporation by reference in the Registration
Statements (Form S-8, No. 333-23345) pertaining to the Galileo Corporation
Employee Stock Purchase Plan and related Prospectus of our report dated March 9,
2000, with respect to the financial statements of the Galileo Corporation
Employee Stock Purchase Plan included in this Annual Report (Form 11-K) for the
year ended December 31, 1999.
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FINANCIAL STATEMENTS
GALILEO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
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Galileo Corporation
Employee Stock Purchase Plan
Financial Statements
Years ended December 31, 1999, 1998 and 1997
CONTENTS
Report of Independent Auditors...............................................1
Audited Financial Statements
Statements of Financial Condition............................................2
Statements of Changes in Participants' Equity................................3
Notes to Financial Statements................................................4
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Report of Independent Auditors
The Employee Stock Purchase Plan Committee of
NetOptix Corporation
Galileo Corporation Employee Stock Purchase Plan
We have audited the accompanying statements of financial condition of the
Galileo Corporation Employee Stock Purchase Plan as of December 31, 1999 and
1998, and the related statements of changes in participants' equity for each of
the three years in the period 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 financial position of the Galileo Corporation
Employee Stock Purchase Plan at December 31, 1999 and 1998, and the changes in
participants' equity for each of the three years in the period ended December
31, 1999, in conformity with accounting principles generally accepted in the
United States.
ERNST & YOUNG LLP
March 9, 2000
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Galileo Corporation
Employee Stock Purchase Plan
Statements of Financial Condition
DECEMBER 31
1999 1998
----------------------
ASSETS
Investment in Galileo Corporation common stock, at
fair value (Cost: 1999-$145,194, 1998-$324,304)
$1,612,716 $172,183
Employee contribution receivable 32,592 30,429
----------------------
Total assets $1,645,308 $202,612
======================
PARTICIPANTS' EQUITY $1,645,308 $202,612
======================
See accompanying notes.
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Galileo Corporation
Employee Stock Purchase Plan
Statements of Changes in Participants' Equity
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997
-----------------------------------------
<S> <C> <C> <C>
Interest income $ -- $ -- $ 3
Net unrealized gain (loss) in fair value of
common stock 1,590,475 (230,013) (197,286)
Realized gain (loss) on shares sold 406,585 (22,067) 4,140
Employee contributions 95,820 214,795 93,293
-----------------------------------------
Total 2,092,880 (37,285) (99,850)
Withdrawals (650,184) (109,050) (26,434)
-----------------------------------------
Net increase (decrease) 1,442,696 (146,335) (126,284)
Participants' equity at beginning of year 202,612 348,947 475,231
-----------------------------------------
Participants' equity at end of year $1,645,308 $ 202,612 $ 348,947
=========================================
</TABLE>
See accompanying notes.
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Galileo Corporation
Employee Stock Purchase Plan
Notes to Financial Statements
Years ended December 31, 1999, 1998 and 1997
1. DESCRIPTION OF PLAN
NetOptix Corporation, formerly Galileo Corporation, (the Company) adopted an
Employee Stock Purchase Plan (the "Plan") on June 18, 1986. Effective January 1,
1997, the Company adopted the Galileo Corporation 1997 Employee Stock Purchase
Plan (the "Purchase Plan"), a Section 423 stock purchase plan. All participants
in the Plan automatically (1) became participants in the Purchase Plan, and (2)
became vested in all shares previously held in the Plan. The Purchase Plan is
available to all employees whose customary employment is more than 20 hours per
week and who have completed three months of employment with the Company. The
Purchase Plan qualifies as an "employee stock purchase plan" under Section 423
of the Internal Revenue Code of 1986, as amended, and is not subject to the
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended.
The Purchase Plan provides quarterly offering periods to eligible employees to
purchase common stock under the Purchase Plan. The employees may make
contributions to the Purchase Plan through payroll deductions, with a maximum
annual contribution of $25,000 of shares of the Company's stock at a 15%
discount off the lower of its fair value at the beginning of the offering period
or the fair value at the applicable exercise date. An offering period is a
period during which payroll deductions will be accumulated. All payroll
deductions are credited to the participant's account under the Purchase Plan and
are deposited with the general funds of the Company.
The offering periods begin on each January 1, April 1, July 1, and October 1.
Under the Purchase Plan, a participant can have 1% to 10% of their gross pay
deducted on an after-tax basis to purchase stock. There is no Company match, and
a participant is 100% vested in their account at all times under the Purchase
Plan.
The Purchase Plan is administered by a committee appointed by the Board of
Directors of the Company.
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1. DESCRIPTION OF PLAN (CONTINUED)
WITHDRAWAL FROM OFFERING
A participant in an offering may withdraw from an offering as to all (but not
part) of the unexercised rights granted under such offering by giving written
notice of such cancellation to the Company before any exercise date. Any amounts
withheld for the purchase of stock from the employee's compensation through
payroll deductions will be paid to the employee, without interest, upon such
withdrawal, and the rights granted with respect to the offering will be
automatically terminated. A withdrawing participant may not again participate
until the commencement of a new offering.
TERMINATION
Upon the termination of employment for any reason, including the death of the
participant, before the date on which any rights granted under the Plan are
exercisable, all such rights will immediately terminate, and amounts withheld
for the purchase of common stock from the participant's compensation through
payroll deductions will be paid to the participant or to the participant's
estate, without interest.
PLAN TERMINATION
Although it has not expressed an intent to do so, the Board may at any time
terminate the Plan, except that no such termination may adversely affect the
existing rights of participants.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Investments in common stock of the Company are issued by the Company from shares
reserved for the Purchase Plan. Shares are carried at fair value based upon the
latest reported sales price. Realized gains and losses are determined on an
average cost basis. The total number of shares held at December 31, 1999 and
1998, were 24,161 and 52,287, respectively.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ADMINISTRATIVE EXPENSES
Substantially all expenses of the Plan are paid by the Company.
3. INCOME TAX STATUS
The Plan is a nonqualified plan for Internal Revenue Service purposes.
Participant contributions to the Plan constitute taxable wages for the taxable
year in which such contributions would have been paid to the participant. The
Plan is not subject to federal income taxes. Plan participants recognize no
taxable income at the time of purchase of shares. However, both ordinary income
and a capital gain or capital loss may be realized upon disposition of shares by
the participant.
4. REALIZED GAINS AND LOSSES
The realized gain (loss) on shares sold was determined as follows:
AVERAGE REALIZED
COST PROCEEDS GAIN (LOSS)
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Year ended December 31, 1997 $ 7,156 $ 11,296 $ 4,140
Year ended December 31, 1998 $131,061 $108,994 $(22,067)
Year ended December 31, 1999 $243,600 $650,185 $406,585
5. SUBSEQUENT EVENT
On February 14, 2000, the Company announced that it was being acquired by
Corning, Inc. The sale has not been completed and there have been no plan
amendments in connection with this transaction.
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Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-23345) pertaining to the Galileo Corporation Employee Stock Purchase
Plan and related Prospectus of our report dated March 9, 2000, with respect to
the financial statements of the Galileo Corporation Employee Stock Purchase Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 1999.
ERNST & YOUNG LLP
Providence, Rhode Island
March 23, 2000
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SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Trustee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
GALILEO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
By: /s/ Thomas J. Mathews
-------------------------------
Thomas J. Mathews
Vice President, Finance and
Chief Financial Officer
Date: March 30, 2000
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