<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
___ OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
___ ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ___________
Commission File Number: 000-23657
ASTROPOWER, INC. 401(K) SAVINGS PLAN
(Full Title of the Plan)
Thomas J. Stiner, Vice President Copy To:
and Chief Financial Officer
AstroPower, Inc. Peter Landau, Esq.
Solar Park Opton Handler Feiler & Landau
Newark, Delaware 19716-2000 52 Vanderbilt Avenue
New York, N.Y. 10017
(Address, including zip (212-599-1744)
code of agent for service)
(302) 366-0400
(Telephone number, including area code, of agent for service)
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report............................................... 1
Statements of Net Assets Available for Plan Benefits
December 31, 1998........................................................ 2
Statements of Net Assets Available for Plan Benefits
December 31, 1997........................................................ 3
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1998..................................... 4
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1997..................................... 5
Notes to Financial Statements.............................................. 6-9
Supplemental Schedules
Schedule 1 Item 27(a)
. Schedule of Assets Held for Investment Purposes December 31, 1998..... 10
Schedule 2 Item 27(d)
. Schedule of Reportable Transactions December 31, 1998................. 11
Signature Page........................................................... 12
Consent of Independent Accountants....................................... 13
</TABLE>
<PAGE>
Independent Auditors' Report
The Participants of the
AstroPower, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the AstroPower, Inc. 401(k) Savings Plan (the Plan) as of December
31, 1998 and 1997, 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1998 and 1997, 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 performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions 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 schedules are the
responsibility of the Plan's management. The fund information in the statements
of net assets available for plan benefits and the statements of changes in net
assets for plan benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in the
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/ KPMG LLP
Wilmington, DE
June 21, 1999
1
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1998
<TABLE>
<CAPTION>
Franklin
Mass Mutual Fidelity Royce Mutual Lindner
Guaranteed Equity Total Qualified Growth
Interest Fund Income Fund Return Fund Fund Fund
---------------- --------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Investments:
Investments at contract value $ 456,898 -- -- -- --
Investments at market value -- 776,492 384,849 705,309 105,074
Loans receivable -- -- -- -- --
---------------- --------------- ---------------- --------------- -------------
Total investments 456,898 776,492 384,849 705,309 105,074
Contributions receivable:
Employer 22,754 49,849 23,188 39,367 10,761
Participants 7,520 16,742 6,952 10,943 2,505
---------------- --------------- ---------------- --------------- -------------
Net assets available for
plan benefits $ 487,172 843,083 414,989 755,619 118,340
================ =============== ================ =============== =============
<CAPTION>
T. Rowe Price AstroPower
International Company Participant
Stock Fund Stock Fund loans Totals
-------------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C>
Investments:
Investments at contract value -- -- -- 456,898
Investments at market value 219,628 56,653 -- 2,248,005
Loans receivable -- -- 113,429 113,429
-------------- ----------------- -------------- ---------------
Total investments 219,628 56,653 113,429 2,818,332
Contributions receivable:
Employer 11,677 4,333 -- 161,929
Participants 3,345 2,982 -- 50,989
-------------- ----------------- -------------- ---------------
Net assets available for
plan benefits 234,650 63,968 113,429 3,031,250
============== ================= ============== ===============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1997
<TABLE>
<CAPTION>
Franklin
Mass Mutual Fidelity Royce Mutual Lindner
Guaranteed Equity Total Qualified Growth
Interest Fund Income Fund Return Fund Fund Fund
---------------- ----------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Investments:
Investments at contract $ 347,555 -- -- -- --
Investments at market -- 546,561 280,669 610,449 186,721
Loans receivable -- -- -- -- --
---------------- ----------------- ---------------- ---------------- -------------
Total investments 347,555 546,561 280,669 610,449 186,721
Contributions receivable:
Employer 16,405 30,123 10,926 29,263 12,420
Participants 10,347 14,577 1,771 8,677 1,294
---------------- ----------------- ---------------- ---------------- -------------
Net assets available for
plan benefits $ 374,307 591,261 293,366 648,389 200,435
================ ================= ================ ================ =============
<CAPTION>
T. Rowe Price
International Participant
Stock Fund loans Totals
------------------ ------------- ----------------
<S> <C> <C> <C>
Investments:
Investments at contract -- -- 347,555
Investments at market 200,532 -- 1,824,932
Loans receivable -- 122,787 122,787
------------------ ------------- ----------------
Total investments 200,532 122,787 2,295,274
Contributions receivable:
Employer 10,688 -- 109,825
Participants 1,909 -- 38,575
------------------ ------------- ----------------
Net assets available for
plan benefits 213,129 122,787 2,443,674
================== ============= ================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1998
<TABLE>
<CAPTION>
Franklin
Mass Mutual Fidelity Royce Mutual Lindner
Guaranteed Equity Total Qualified Growth
Interest Fund Income Fund Return Fund Fund Fund
---------------- --------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income $ 28,444 67,451 14,361 68,885 16,849
Net appreciation (depreciation)
of investments -- 62,269 (658) (73,185) (32,530)
Participant contributions 51,474 114,166 50,812 91,090 23,359
Employer contributions 22,754 49,849 23,188 39,367 10,761
Transfers from other benefit plans 6,933 604 -- -- 213
Participant loan repayments:
Principal 73 3,693 1,531 2,905 307
Interest 15 2,948 2,845 1,938 104
--------------- ---------------- -------------- -------------- --------------
Total additions 109,693 300,980 92,079 131,000 19,063
--------------- ---------------- -------------- -------------- --------------
Deductions in net assets:
Withdrawals (20,097) (99,621) (2,563) (12,447) (2,248)
Participant loans (200) (1,810) (490) (1,850) (210)
--------------- ---------------- -------------- -------------- --------------
Total deductions (20,297) (101,431) (3,053) (14,297) (2,458)
--------------- ---------------- -------------- -------------- --------------
Net increase 89,396 199,549 89,026 116,703 16,605
Net assets available for plan benefits:
Beginning of year 374,307 591,261 293,366 648,389 200,435
Transfers 23,469 52,273 32,597 (9,473) (98,700)
--------------- ---------------- -------------- -------------- --------------
End of year $ 487,172 843,083 414,989 755,619 118,340
=============== ================ ============== ============== ==============
<CAPTION>
T. Rowe Price AstroPower
International Company Participant
Stock Fund Stock Fund loans Totals
-------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
Additions to net assets:
Investment income 8,173 -- -- 204,163
Net appreciation (depreciation)
of investments 22,757 5,732 -- (15,615)
Participant contributions 24,638 6,469 -- 362,008
Employer contributions 11,677 4,333 -- 161,929
Transfers from other benefit plans -- 624 -- 8,374
Participant loan repayments:
Principal 1,290 22 (9,821) --
Interest 3,196 3 -- 11,049
-------------- ---------------- ------------- --------------
Total additions 71,731 17,183 (9,821) 731,908
-------------- ---------------- ------------- --------------
Deductions in net assets:
Withdrawals (2,749) -- (4,607) (144,332)
Participant loans (510) -- 5,070 --
-------------- ---------------- ------------- --------------
Total deductions (3,259) -- 463 (144,332)
-------------- ---------------- ------------- --------------
Net increase (decrease) 68,472 17,183 (9,358) 587,576
Net assets available for plan benefits:
Beginning of year 213,129 -- 122,787 2,443,674
Transfers (46,951) 46,785 -- --
-------------- ---------------- ------------- --------------
End of year 234,650 63,968 113,429 3,031,250
============== ================ ============= ==============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1997
<TABLE>
<CAPTION>
Franklin
Mass Mutual Fidelity Royce Mutual
Guaranteed Equity Total Qualified
Interest Fund Income Fund Return Fund Fund
----------------- ------------------ ---------------- -----------------
<S> <C> <C> <C> <C>
Additions to net assets:
Investment income $ 20,232 53,214 21,107 8,447
Net appreciation (depreciation)
of investments -- 47,721 23,923 101,421
Employee contributions 38,821 69,715 25,275 64,435
Employer contributions 16,405 30,123 10,926 29,263
Transfers from other benefit plans 29,539 37,433 -- 9,125
Participant loan repayments:
Principal 95 1,762 335 2,146
Interest 177 2,926 654 3,720
----------------- ------------------ ---------------- -----------------
Total additions 105,269 242,894 82,220 218,557
----------------- ------------------ ---------------- -----------------
Deductions in net assets:
Withdrawals (28,059) (29,583) (29,075) (41,600)
Participant loans (250) (14,000) -- (1,500)
----------------- ------------------ ---------------- -----------------
Total deductions (28,309) (43,583) (29,075) (43,100)
----------------- ------------------ ---------------- -----------------
Net increase 76,960 199,311 53,145 175,457
Net assets available for plan benefits:
Beginning of year 318,634 365,095 243,933 450,112
Transfers (21,287) 26,855 (3,712) 22,820
----------------- ------------------ ---------------- -----------------
End of year $ 374,307 591,261 293,366 648,389
================= ================== ================ =================
<CAPTION>
Lindner T. Rowe Price
Growth International Participant
Fund Stock Fund loans Totals
-------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
Additions to net assets:
Investment income 27,068 10,612 10,915 151,595
Net appreciation (depreciation)
of investments (14,307) (6,283) -- 152,475
Employee contributions 30,889 27,171 256,306
Employer contributions 12,420 10,688 -- 109,825
Transfers from other benefit plans -- 4,562 -- 80,659
Participant loan repayments:
Principal 454 1,702 (6,494) --
Interest 699 2,846 (11,022) --
------------ ------------ ------------- -----------
Total additions 57,223 51,298 (6,601) 750,860
------------ ------------ ------------- -----------
Deductions in net assets:
Withdrawals (24,357) (1,149) (1,237) (155,060)
Participant loans (250) -- 16,000 --
------------ ------------ ------------- -----------
Total deductions (24,607) (1,149) 14,763 (155,060)
------------ ------------ ------------- -----------
Net increase 32,616 50,149 8,162 595,800
Net assets available for plan benefits:
Beginning of year 174,511 180,965 114,624 1,847,874
Transfers (6,692) (17,985) 1 --
------------ ------------ ------------- -----------
End of year 200,435 213,129 122,787 2,443,674
============ ============ ============= ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) Summary of Signifcant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on the accrual
basis of accounting and present the net assets available for plan
benefits and changes in those net assets.
(b) Investments
Investments are carried at market value based upon the closing sales
price reported on recognized securities exchanges on the last business
day of the year. Security transactions are accounted for on the trade
date for securities purchased and sold. The guaranteed interest fund is
valued based on original cost plus accrued interest, which approximates
market value.
(c) Administrative Expenses
Administrative expenses incurred in the operation of the AstroPower,
Inc. 401(k) Savings Plan (the Plan) are paid by AstroPower, Inc. (the
Company) and are not reflected in the accompanying financial statements.
(d) Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that 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 and
deductions during the reporting period. Actual results could differ from
estimates recorded.
(2) Description of Plan
The Plan is for the benefit of all employees who have completed one month of
consecutive service and have reached 21 years of age. The Plan was adopted
on September 1, 1990, and is a defined contribution plan subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA)
and Section 401(k) of the Internal Revenue Code. Eligible employees may make
a voluntary, tax-deferred contribution of 1% to 15% of their salary to the
Plan. The Company is committed to contribute a minimum of 25% of the
employees' contributions. For 1998 and 1997, the Company elected to
contribute 50%. The Company matches the employee's contribution on
December 31 of the respective year. An employee who is terminated before
December 31 will not receive the Company match.
Contributions are invested as directed by the employee among the following
seven funds, each with varying degrees of risk:
Mass Mutual Guaranteed Interest Fund -- The Mass Mutual Guaranteed Interest
Fund offers a fixed rate of return on contributions. Both interest and
principal are fully guaranteed. The fund is comprised primarily of high-
quality, fixed-income investments including public bonds, private
placements, commercial mortgage loans and short-term investments. The
contract is included in the financial statements at contract value, which
represents contributions made under the contract, plus earnings and less
withdrawals because it is fully benefit responsive.
6
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
Fidelity Equity Income Fund -- The Fidelity Equity Income Fund seeks
reasonable income. It invests at least 65% of assets in income-producing
equity securities with the goal of exceeding the total return of the S&P
500. The fund may invest in junk bonds (up to 20% of assets), foreign
securities and foreign currency exchange contracts, and stock index futures
and options (up to 15% of assets). The fund may hedge up to 25% of total
assets.
Royce Total Return Fund -- The Royce Total Return Fund seeks reasonable
income with potential for capital appreciation. It invests primarily in
dividend paying common stocks and securities convertible into common stocks
of small and medium-sized companies selected on a value basis.
Franklin Mutual Qualified Fund -- The objective of the Franklin Mutual
Qualified Fund is capital appreciation. The fund may invest up to 50% of
assets in securities of companies involved in prospective mergers,
consolidations, liquidations and reorganizations. The fund is composed of
three parts. First, 60% of the fund is made up of stocks trading at large
discounts from asset values. Another portion is deal oriented, i.e.,
mergers, liquidations, lender offers, spinoffs, sales of assets and exchange
offers. A third is bankruptcy situations.
Lindner Growth Fund -- The Lindner Growth Fund seeks long-term capital
appreciation first and income second. The fund invests in common stocks and
convertible securities. The fund may also invest in debt security for
defensive purposes. It may invest up to 25% of assets in securities of
foreign issuers and 10% junk bonds.
T. Rowe Price International Stock Fund -- The objective of the T. Rowe Price
International Stock Fund is long-term growth of capital and income. The fund
invests primarily in common stocks of established non-U.S. issuers. The fund
may use ADRs, EDRs and ADSs; use spot/forward currency transactions use
options on foreign currencies, securities and indices on up to 25% of total
assets invest up to 35% of assets in securities other than common stocks.
AstroPower Company Stock -- The Fund invests entirely in AstroPower stock,
which is traded on the NASDAQ National Market. The rate of return results
from a movement in the price of the stock.
During 1998, the Plan allowed participants to purchase AstroPower stock.
Because the Plan allows participants to invest before-tax contributions in
AstroPower stock, the Plan and the stock offered thereunder were required to
register under the Securities Act of 1933. Accordingly, a form S-8 was filed
on or about December 15, 1998, with the Securities and Exchange Commission.
Interest, dividends and other income earned by each of the investment funds
are reinvested in the same funds. Such amounts are credited to the
participants' accounts based on the terms of the Plan.
A participant has a nonforfeitable interest in 100% of his contributions at
all times, although there are certain restrictions and options on
withdrawals. Additionally, a participant is 100% vested in the Company
contribution.
The Plan may be terminated or contributions thereunder may be discontinued
at any time if the Company determines that business circumstances make such
action necessary or desirable.
Upon termination, the Fund shall be held for distribution by the custodians
who shall distribute to the members then participating in the Fund the full
amount standing to their credit on the date of such termination.
7
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
For additional information regarding Plan provisions, refer to the Plan
document.
(3) Withdrawals
A participant may elect to withdraw all of his tax-deferred contributions
and all of the employer matching contributions, if the participant has
attained age 59-1/2. A participant who has incurred monetary hardship as
interpreted in accordance with the applicable Internal Revenue Service (IRS)
regulations may elect to withdraw all of his tax-deferred contributions
and Company matching contributions.
(4) Loans to Participants
A participant may borrow not less than $1,000 at a time, with no more than
one loan outstanding at any given time. In addition, the loan amount may not
exceed the lesser of $50,000 less the participant's highest outstanding loan
balance during the one-year period ending on the day before the date on
which any new loan is to be granted or one-half of the amount to which the
participant is vested under this Plan on the date the loan is granted. Loans
are secured by the participant's vested account balance. Interest is set at
the prime rate, as quoted in the Wall Street Journal on the date the loan is
granted, plus 1%. The term of the loan shall not exceed five years unless
the loan is used to purchase the participant's primary residence, in which
case the five-year repayment requirement will not be applicable. Both
principal and interest payments on a loan shall be credited to the
participant's account.
(5) Distribution of Benefits
The Plan provides for distribution of the total vested amount in the
participant's accounts upon:
Termination from employment,
Attainment of age 59-1/2, or
Permanent disability or death
A member or beneficiary who is entitled to payment may elect one of the
following options:
A. Lump-sum payment equal to the value of the member's accrued benefit.
B. Rollover distribution to a retirement account.
C. For nonterminated employees, substantially equal monthly installments
over a period not to exceed the joint and last survivor life
expectancy of the member and his beneficiary.
D. Combination of a lump-sum payment and a rollover distribution to a
retirement account.
8
<PAGE>
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 1998
(6) Tax Status
The IRS issued its latest determination letter on November 18, 1997, which
stated that the Plan and its underlying trust qualify under the applicable
provisions of the Internal Revenue Code and, therefore, are exempt from
federal income tax.
9
<PAGE>
Schedule 1
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Market
Description Cost value
- ------------------------------------------ ------------ ------------
<S> <C> <C>
Mass Mutual Guaranteed Interest Fund $ 456,898 456,898
Fidelity Equity Income Fund 701,035 776,492
Royce Total Return Fund 367,985 384,849
Franklin Mutual Qualified Fund 671,974 705,309
Lindner Growth Fund 114,347 105,074
T. Rowe Price International Stock Fund 198,142 219,628
AstroPower Company Stock Fund 50,937 56,653
Participant loans 113,429 113,429
------------ ------------
Total $ 2,674,747 2,818,332
============ ============
</TABLE>
10
<PAGE>
Schedule 2
ASTROPOWER, INC. 401(k) SAVINGS PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
Purchase Disposition/ Cost of Net gain
Identity of party involved price sale price asset or (loss)
- ------------------------------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Purchases:
Franklin Mutual Qualified Fund $ 128,014 -- 128,014 --
============ ============ =========== ===========
</TABLE>
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the AstroPower, Inc. 401(k) Savings Plan has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.
ASTROPOWER, INC. 401(K) SAVINGS PLAN
Date: June 30, 1999 By: /s/ Thomas J. Stiner
------------------------------------------
Thomas J. Stiner
Vice President and Chief Financial Officer
(Principal Financial Officer)
Member, Administrative Committee
12
<PAGE>
Consent of Independent Accountants
The Board of Directors of AstroPower, Inc.
We consent to incorporation by reference in the registration statement (No. 333-
63021) on Form S-8 of the AstroPower, Inc. 401(k) Savings Plan of our report
dated June 21, 1999, relating to the Statements of net assets available for plan
benefits of the AstroPower, Inc. 401(k) Savings Plan as of December 31, 1998 and
1997, the related statements of changes in net assets available for plan
benefits for the years then ended, and the related schedules of assets held for
investment purposes, and reportable transactions, which report is included in
the December 31, 1998 Annual Report on Form 11-K of the AstroPower, Inc. 401(k)
Savings Plan.
/s/ KPMG LLP
Wilmington, Delaware
June 29, 1999
