SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended 1995
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 ____
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Tracor, Inc. 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Tracor, Inc.
6500 Tracor Lane
Austin, TX 78725
(512)926-2800
<PAGE>
REPORT OF INDEPENDENT AUDITORS
401(k) Savings Plan Committee
Tracor, Inc.
Austin, Texas
We have audited the accompanying statements of assets available for
benefits of the Tracor, Inc. 401(k) Savings Plan (the "Plan") as of
December 31, 1995 and 1994, and the related statement of changes in
assets available for benefits for the year ended December 31, 1995.
These financial statements and the supplemental schedules 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 assets available for benefits
of the Plan at December 31, 1995 and 1994, and the changes in its
assets available for benefits for the year ended December 31, 1995,
in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31,
1995, 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 financial statements. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material
respects in relation to the financial statements taken as a whole.
June 21, 1996 /s/ Ernst & Young, LLP
<PAGE>
<TABLE>
<CAPTION>
Tracor, Inc. 401(k) Savings Plan
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
December 31, 1995 and 1994
1995 1994
---- ----
ASSETS
<S> <C> <C>
Norwest funds:
Income Fund $ 39,134,424 $ 38,576,820
Conservative Balanced Fund 20,554,918 16,251,684
Growth Balanced Fund 34,894,915 24,802,237
Growth Equity Fund 54,350,516 37,732,759
International Equity Fund 266,361 -
Stock Fund 687,962 -
----------- -----------
149,889,096 117,363,500
Loans receivable from participants 5,122,748 3,594,256
Contributions receivable 801,983 842,512
Interest income receivable 130,120 83,551
----------- -----------
Total assets available for benefits $155,943,947 $121,883,819
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Tracor, Inc. 401(k) Savings Plan
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1995
Conservative Growth Growth
Income Balanced Balanced Equity
Total Fund Fund Fund Fund
------- ------ ------------ -------- ------
ADDITIONS
<S> <C> <C> <C> <C> <C>
Contributions, net of forfeitures $ 22,400,268 $ 5,220,677 $ 2,947,624 $ 5,324,367 $ 8,856,816
Interest and dividend income 4,740,230 2,053,036 912,643 941,808 465,458
Net realized and unrealized
gain (loss) on investments 17,134,863 188,225 1,729,064 5,366,716 9,924,439
Contributions receivable,
net change (40,529) - - - -
Interest income receivable,
net change 46,569 - - - -
----------- --------- ----------- ---------- ----------
Total additions 44,281,401 7,461,938 5,589,331 11,632,891 19,246,713
DEDUCTIONS
Distributions to participants 10,193,131 4,152,246 1,386,712 1,913,292 2,517,908
Administrative expenses 28,142 12,494 5,448 6,265 3,890
----------- --------- ----------- ---------- ----------
Total deductions 10,221,273 4,164,740 1,392,160 1,919,557 2,521,798
Net borrowings by participants - (848,702) (465,671) (777,641) (1,390,695)
Net transfers into (out of) fund - (1,890,892) 571,734 1,156,985 1,283,537
----------- --------- ----------- ---------- ----------
Net increase in fund 34,060,128 557,604 4,303,234 10,092,678 16,617,757
Net assets available for benefits
at beginning of year 121,883,819 38,576,820 16,251,684 24,802,237 37,732,759
----------- ---------- ----------- ---------- ----------
Net assets available for benefits
at end of year $155,943,947 $39,134,424 $20,554,918 $34,894,915 $54,350,516
=========== ========== ========== ========== ==========
</TABLE>
(Table continued on next page.)
<PAGE>
<TABLE>
Tracor, Inc. 401(k) Savings Plan
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1995
(continued)
Loans
International Receivable
Equity Stock from
Fund Fund Participants Other
------------- ----- ------------ -----
ADDITIONS
<S> <C> <C> <C> <C>
Contributions, net of forfeitures $ 13,058 $ 37,726 $ - $ -
Interest and dividend income 3,584 1,381 362,320 -
Net realized and unrealized
gain (loss) on investments 4,789 (78,370) -
Contributions receivable,
net change - - - (40,529)
Interest income receivable,
net change - - - 46,569
-------- ------- --------- ---------
Total additions 21,431 (39,263) 362,320 6,040
DEDUCTIONS
Distributions to participants - - 222,973 -
Administrative expenses 28 17 - -
-------- ------- --------- ---------
Total deductions 28 17 222,973 -
Net borrowings by participants (481) (3,685) 3,486,875 -
Net transfers into (out of) fund 245,439 730,927 (2,097,730) -
-------- ------- --------- ---------
Net increase in fund 266,361 687,962 1,528,492 6,040
Net assets available for benefits
at beginning of year - - 3,594,256 926,063
-------- ------- --------- ---------
Net assets available for benefits
at end of year $266,361 $687,962 $5,122,748 $932,103
======== ======= ========= =========
See notes to financial statements.
</TABLE>
<PAGE>
Tracor, Inc. 401(k) Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note A -- Description of the Plan
The following description of the Tracor, Inc. 401(k) Savings Plan
(Plan) provides general information only. Reference should be made
to the Summary Plan Description or the Plan document for more
complete information.
Plan Sponsor
The Plan has been adopted by Tracor, Inc. (Plan Sponsor), and
certain of its domestic subsidiaries (Participating Employers).
The Plan is a contributory defined contribution plan which is
optional to all eligible employees. The Plan is administered
by the trustee, Norwest Bank (see Note D), under the direction
of employees of the Plan Sponsor and Participating Employers
(the Committee) who may also be Plan participants. The Plan
is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Participants
Substantially all employees of the Plan Sponsor and Participating
Employers are eligible to participate in the Plan upon their date
of hire. Enrollment in the Plan is generally the first day of
any month.
Contributions
Participants may elect to contribute from 1% to 20% of their
compensation, as defined by the Plan, limited to $9,240 for 1995.
Highly compensated participants, as defined by the Internal
Revenue Service (IRS), may be subject to more restrictive
maximum limits. Participants are immediately vested in
their contributions, as well as Plan earnings. Participant
contributions and Plan earnings are not taxable to
the participants as income.
The Plan Sponsor and Participating Employers contribute to
participant accounts as follows:
Vitro Corporation 2% of pretax income to the
retirement account portion of
the Plan through June 30, 1995
only
Vitro Corporation 25% of the participant's
contributions to the 401(k)
portion of the Plan, limited
to 6% of participant's base
salary
Vitro Services Corporation 40% of the participant's first
3% of contributions
Vitro Technical
Services, Inc. 4% of the participant's base
salary
All other subsidiaries 25% of the participant's
contributions, limited to 6%
of participant's base salary
Vesting for Plan Sponsor and Participating Employer matching
contributions occurs over 3 to 4 years for Vitro Corporation
and Vitro Services Corporation participants. Vesting for all
other participants occurs immediately. Plan Sponsor and
Participating Employer contributions totaled $4,562,000 in
1995 and are net of forfeitures of $376,200.
Investment Options
Contributions made by the participants and by the Plan Sponsor
or a Participating Employer may be directed by the participant
to any of the six investment options:
Income Fund -- Funds are invested in the Norwest Stable Return
Fund, which invests in fixed income securities, insurance pooled
accounts, and individual guaranteed investment contracts (GICs).
Norwest Conservative Balanced Fund -- Funds are invested in
common stocks and fixed income instruments.
Norwest Growth Balanced Fund -- Funds are invested in common
stocks and intermediate maturity bonds.
Norwest Growth Equity Fund -- Funds are invested in common
stocks.
Norwest International Equity Fund -- Funds are invested in high-
quality companies based outside the United States whose shares
are typically not traded on the major U.S. stock exchanges.
Stock Fund -- Funds are invested in Tracor, Inc. common stock.
Distributions
Participants are entitled to receive a distribution of their
accounts upon reaching age 59-1/2, termination of employment,
disability, death, or in the event of a financial hardship.
Distributions may be made in a lump-sum or in periodic
installments and are taxable to the participant when received.
Distributions prior to age 59-1/2 may subject the participant
to a 10% federal tax penalty.
Participants may borrow from their Plan account in accordance
with provisions of the Plan.
Termination
Although it has not expressed any intent to do so, the Plan
Sponsor has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to
the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
Administrative Costs
Administrative costs of the Plan of approximately $347,000
were paid by the Plan Sponsor and Participating Employers
in 1995.
Note B -- Significant Accounting Policies
Investments
All pooled account and collective fund investments are valued
at the net asset value quoted in an active market as of the
last business day of the year. The insurance investment
contracts are recorded at contract value and loans receivable
from participants are valued at cost which approximates fair
value.
Distributions
Distributions to participants are recorded by the Plan when
actual payment is made. Distributions not paid as of the end
of the Plan year are included in investments in the Statement
of Assets Available for Benefits. At December 31, 1995 and 1994,
accounts of former participants were not significant.
Excess Contributions
Contributions in excess of maximum limits allowed by the IRS
are accrued as liabilities. Excess contributions were not
significant at December 31, 1995.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires Plan
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities. Actual results
could differ from those estimates.
SOP 94-4
In September 1994, the American Institute of Certified Public
Accountants issued Statement of Position No. 94-4, "Reporting
of Investment Contracts Held by Health and Welfare Benefit Plans
and Defined-Contribution Pension Plans" (SOP 94-4). SOP
94-4 generally requires all defined contribution plans to report
fully benefit responsive investment contracts (as defined) at
contract value and all other investment contracts at fair value.
The guaranteed investment contracts held by the Plan were entered
into before December 31, 1993. Therefore, the Plan is not
required to adopt SOP 94-4 until 1996. The effect of its
adoption is not expected to be material to the Plan.
Note C -- Federal Income Taxes
The Plan has not received a determination letter from the IRS
concerning the Plan's qualification to be exempt from federal
income taxes under the Internal Revenue Code (IRC). The
Committee believes the Plan is designed and is currently being
operated in compliance with the applicable requirements of the
IRC. In September 1995, the Plan requested a determination
letter from the IRS.
Note D -- Investments
The Plan's investments are held by a trust fund and are
presented in the following table. Investments that represent
5 percent or more of the Plan's assets are separately identified.
<TABLE>
<CAPTION>
December 31,
1995 1994
---------- ----------
<S> <C> <C>
Investments at fair value as determined
by quoted market price:
Norwest Stable Return Fund $ 4,467,223 $ 4,775,250
Norwest Conservative Balanced Fund 20,554,918 16,251,684
Norwest Growth Balanced Fund 34,894,915 24,802,237
Norwest Growth Equity Fund 54,350,516 37,732,759
Other 1,008,429 -
----------- -----------
115,276,001 83,561,930
Investments at cost (estimated fair value):
Participant loans 5,122,748 3,594,256
Investments at contract value:
Bankers Trust Pyramid GIC Fund 18,153,549 17,121,030
Guaranteed investment contracts 16,459,546 16,680,540
----------- -----------
$155,011,844 $120,957,756
=========== ===========
</TABLE>
Amounts invested in the guaranteed investment contracts are
subject to certain restrictions and penalties if the contracts
are terminated or if assets are withdrawn for reasons other
than for participant retirement or termination benefits,
transfers to other investment funds, or loan withdrawals.
Note E -- Confederation Life Contract
The Income Fund has a $4,000,000 GIC with Confederation Life
Insurance Company (Confederation Life) and the Bankers Trust
Pyramid GIC Fund has a $254,150 Confederation Life GIC, together
representing approximately 11% of the Income Fund value at
December 31, 1995.
On August 12, 1994, U.S. insurance authorities placed the U.S.
branch of Confederation Life into a plan of rehabilitation due
to the seizure of its parent, Confederation Life of Canada, by
federal regulators. Interest accruals were frozen as of August
11, 1994.
Effective June 30, 1995, the Committee segregated that portion
of the Income Fund invested in the Confederation Life contract.
After June 30, 1995, additional funds will not be invested in
the Confederation Life contract and transfers out of the
Confederation Life contract will not be permitted.
The Confederation Life GIC contracts are currently recorded at
100% of the contract values as of August 11, 1994 (including
accrued interest earned through such date). While Plan
management currently has no reason to believe that the full
value of this contract will not ultimately be received, the
rehabilitation process and related regulatory proceedings are
extremely complex and there can be no assurance that the full
contract values can be recovered until such proceedings are
completed. The ultimate outcome of such proceedings cannot be
determined at this time.
SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Tracor, Inc. 401(k) Savings Plan
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
Fair
Identity of Issue Description of Investment Cost Value
----------------- ------------------------- ---- -----
<S> <C> <C> <C>
* Norwest Bank
Cash and cash equivalents 113,783 113,783
Mutual funds:
* Norwest Stable 201,680 shares, mutual
Return Fund fund, share value $22.15 $ 4,298,501 $ 4,467,223
* Norwest Conservative 1,163,266 shares, mutual
Balanced Fund fund, share value $17.67 19,195,908 20,554,918
* Norwest Growth 1,635,955 shares, mutual
Balanced Fund fund, share value $21.33 30,175,302 34,894,915
* Norwest Growth 2,057,952 shares, mutual
Equity Fund fund, share value $26.41 47,273,127 54,350,516
* Norwest International 14,484 shares, mutual
Equity Fund fund, share value $18.39 261,587 266,361
----------- -----------
Total mutual funds 101,204,425 114,533,933
----------- -----------
* Tracor, Inc. 43,330 shares, common stock,
share value $14.50 706,655 628,285
Bankers Trust Pyramid GIC, pooled account,
GIC Fund matures 4/1/99 18,153,549 18,153,549
Confederation Life
Insurance GIC, 8.5%, matures 1/9/96 3,957,553 3,957,553
Canada Life Assurance GAC, 8.75%, matures 1/15/98 3,025,121 3,025,121
Massachusetts Mutual Life GAC, 8.41%, matures 12/31/96 5,949,058 5,949,058
Peoples Security Life GIC, 8.46%, matures 4/30/98 2,606,885 2,606,885
Security Life of Denver GIC, 8.73%, matures 4/30/01 920,929 920,929
* Participant Loans Various maturities and
interest rates: 7 to 11.5% - 5,122,748
----------- -----------
Total assets held for investment $136,637,958 $155,011,844
=========== ===========
* Indicates party-in-interest to the Plan
</TABLE>
<TABLE>
<CAPTION>
Tracor, Inc. 401(k) Savings Plan
SCHEDULE OF REPORTABLE TRANSACTIONS
Year Ended December 31, 1995
Current Value
of Asset on
Identity of Purchase Selling Cost of Transaction Net
Party Involved Description of Assets Price Price Asset Date Gain
-------------- --------------------- -------- ------- ------- -------------- ----
<S> <C> <C> <C> <C> <C> <C>
Category (iii)
Norwest Bank Commingled trust fund -
Stable Return Fund $ 7,749,160 $7,749,160 $ 7,749,160
Norwest Bank Commingled trust fund -
Stable Return Fund $7,971,389 7,745,521 7,971,389 $225,868
Norwest Bank Commingled trust fund -
Growth Equity Fund 12,992,634 12,992,634 12,992,634
Norwest Bank Commingled trust fund -
Growth Balanced Fund 7,787,149 7,787,149 7,787,149
There were no category (i), (ii), or (iv) reportable transactions
during the year ended December 31, 1995.
</TABLE>
<PAGE>
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 hereunto duly authorized.
Tracor, Inc. 401(k) Savings Plan
Committee
DATE June 28, 1996 By: /s/ROBERT K. FLOYD
Title:Chairman
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(No. 33-55624, No. 33-93186, and No. 33-96474, all of which were filed on
Form S-8 pertaining to various benefit plans sponsored by Tracor, Inc.)
of our report dated June 21, 1996, with respect to the financial
statements and schedules of the Tracor, Inc. 401(k) Savings Plan included
in this Annual Report (Form 11-K) for the year ended December 31, 1995.
Austin, Texas
June 27, 1996 /s/ Ernst & Young, LLP
