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]
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
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]
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
OCLI 401(K)/ESOP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION ASOF DECEMBER 31, 1997
[CAPTION]
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
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]
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
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
