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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
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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: 000-23657
ASTROPOWER, INC. 401(k) SAVINGS PLAN
(Full Title of the Plan)
Thomas J. Stiner, Senior Vice President & CFO Copy To:
AstroPower, Inc. Peter Landau, Esq.
Solar Park Foreht, Last, Landau & Katz LLP
Newark, Delaware 19716-2000 415 Madison Ave, 16/th/ floor
New York, N.Y. 10017
(Address, including zip (212-935-5448)
code of agent for service)
(302) 366-0400
(Telephone number, including area code, of agent for service)
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ASTROPOWER, INC. 401(k) SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
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Page
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Independent Auditors' Report............................................... 1
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998............................................. 2
Statements of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999 and 1998.......................... 3
Notes to Financial Statements.............................................. 4
Schedule of Assets Held for Investment Purposes............................ 8
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ASTROPOWER, INC. 401(k) PLAN
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
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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, 1999 and 1998, 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, 1999 and 1998, 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 schedule of assets held for
investment purposes is presented for the purpose of additional analysis and is
not a required part of the basic financial statements, but is 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 schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ KPMG LLP
Wilmington, DE
June 9, 2000
1
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ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31,
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1999 1998
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Assets:
Investments (Note 2) $4,062,407 2,818,332
Receivables:
Employer contributions receivable 162,502 161,929
Participant contributions receivable 60,880 50,989
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Total receivables 223,382 212,918
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Total assets 4,285,789 3,031,250
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Liabilities:
Payable to AstroPower, Inc. 123,030 --
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Total liabilities 123,030 --
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Net assets available for plan benefits $4,162,759 3,031,250
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See accompanying notes to the financial statements.
2
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ASTROPOWER, INC. 401(k) SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
For the Year For the Year
Ended December 31, Ended December 31,
1999 1998
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<S> <C> <C>
Additions to net assets:
Investment income $ 308,020 204,163
Net appreciation (depreciation) of investments 52,607 (15,615)
Participant contributions 491,083 362,008
Employer contributions 164,843 161,929
Transfers from other benefit plans 173,265 8,374
Participant loan interest 10,330 11,049
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Total additions 1,200,148 731,908
Deductions from net assets:
Withdrawals 68,639 144,332
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Total deductions 68,639 144,332
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Net increase 1,131,509 587,576
Net assets available for plan benefits:
Beginning of year 3,031,250 2,443,674
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End of year $4,162,759 $3,031,250
========== ==========
</TABLE>
See accompanying notes to the financial statements.
3
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ASTROPOWER, INC. 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 (1999) and 1998 (1998)
(1) Summary of Significant 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.
In September, 1999, the American Institute of Certified Public
Accountants issued Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for
certain investments and is effective for plan years ending after
December 15, 1999 with earlier application encouraged. The Plan
adopted SOP 99-3 during the Plan year ending December 31, 1999.
Accordingly, information previously required to be disclosed about
participant-directed fund investment programs are not presented in the
Plan's 1999 financial statements. The Plan's 1998 financial statements
have been restated to conform with the current year's presentation.
(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. Investments in mutual funds are carried at market
value based on net asset values as reported on the last day of the
year. Security transactions are accounted for on the trade date for
securities purchased and sold. The guaranteed interest fund 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.
(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(a) of the Internal Revenue Code. Eligible employees
may make an elective, tax-deferred contribution of 1% to 15% of their
salary to the Plan. The Company is committed to contribute a matching
contribution in the amount of at least 25% of the employees'
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elective, tax-deferred contributions. For 1999 and 1998, the Company
elected to contribute 35% and 50%, respectively. 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 offered a fixed rate of return of 6.25% and 7.00% during 1999 and
1998, respectively, on contributions. The fund is comprised primarily of
high-quality, fixed-income investments including public bonds, private
placements, commercial mortgage loans and short-term investments.
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, spin-offs, 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, spot/forward currency transactions,
and options on foreign currencies, securities and indices on up to 25% of
total assets, and invest up to 35% of assets in securities other than
common stocks.
AstroPower Company Stock- The Fund invests entirely in AstroPower common
stock, which is traded on the NASDAQ National Market. The rate of return
results solely from changes in the price of the stock.
During 1999 and 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 be registered 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.
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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.
The following presents investments that represent 5 percent or more of the
Plan's net assets:
December 31,
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1999 1998
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Investments at Contract Value:
Mass Mutual Guaranteed Interest Fund $ 671,429 456,898
Investments at Fair Value as Determined
by Quoted Market Price:
Fidelity Equity Income Fund;
38,144 and 25,874 shares, respectively 1,043,992 776,492
Royce Total Return Fund;
61,727 and 50,906 shares, respectively 441,968 384,849
Franklin Mutual Qualified Fund;
51,719 and 42,850 shares, respectively 874,577 705,309
T. Rowe Price International Stock Fund;
26,748 and 14,652 shares, respectively 509,022 219,628
AstroPower Company Stock Fund;
23,194 and 5,886 shares, respectively 324,716 56,653
For additional information regarding Plan provisions, refer to the Plan
document.
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
appreciated/(depreciated) in value by $52,607 and ($15,615), respectively,
as follows:
1999 1998
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Mutual Funds $(28,414) (21,347)
Common Stock 81,021 5,732
(3) Withdrawals
A participant may elect to withdraw all of his tax-deferred contributions
and the vested portion of his or her employer matching contributions, if
the participant has attained age 59-1/2. A participant who has incurred
monetary hardship, as defined by the Plan, may elect to withdraw all of his
tax-deferred contributions, plus income thereon, from the Plan.
(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
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which case the five-year repayment requirement will not be applicable. Both
principal and interest payments on a loan are 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: (1) termination from employment, (2)
attainment of age 59-1/2, (3) retirement, (4) permanent disability or (5)
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 an eligible retirement plan.
C. For non-terminated 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.
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.
7) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per
the financial statements at December 31, 1998 to Form 5500:
1998
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Net assets available for benefits $ 3,031,250
per the financial statements
Timing Difference - Contributions Receivable (18,467)
- Miscellaneous 131
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Net assets available for benefits per
the Form 5500 $ 3,012,914
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7
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ASTROPOWER, INC. 401(k) SAVINGS PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1999
Contract/
Market
Description Value
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Mass Mutual Guaranteed Interest Fund $ 671,429
Fidelity Equity Income Fund 1,043,992
Royce Total Return Fund 441,968
Franklin Mutual Qualified Fund 874,577
Lindner Growth Fund 120,558
T. Rowe Price International Stock Fund 509,022
AstroPower Company Stock Fund 324,716
Participant loans 76,145
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Total $ 4,062,407
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8
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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 26, 2000 By: /s/ Thomas J. Stiner
---------------------------------
Thomas J. Stiner
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Member, Administrative Committee
9
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Consent of Independent Accountants
The Board of Directors of AstroPower, Inc.
We consent to incorporation by reference in the registration statement (No. 33-
63021) on Form S-8 of the AstroPower, Inc. 401(k) Savings Plan of our report
dated June 9, 2000, relating to the statements of net assets available for
benefits of the AstroPower, Inc. 401(k) Savings Plan as of December 31, 1999 and
1998, the related statements of changes in net assets available for plan
benefits for the years then ended and the related schedule of assets held for
investment purposes which report is included in the December 31, 1999 Annual
Report on Form 11-K of the AstroPower, Inc. 401(k) Savings Plan.
/s/ KPMG LLP
Wilmington, Delaware
June 26, 2000
10
