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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1999
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number: 0-20842
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
TRO LEARNING, INC. SAVINGS/RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
PLATO Learning, Inc.
1721 Moon Lake Boulevard
Suite 555
Hoffman Estates, IL 60194
This document contains 12 pages.
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INDEX
<TABLE>
<S> <C>
Report of Independent Public Accountants.......................................3
Statements of Net Assets Available for Benefits
as of December 31, 1999 and 1998.............................................4
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1999.........................................5
Notes to Financial Statements and Schedule.....................................6
Consent of Independent Public Accountants.....................................10
Schedule of Assets Held for Investment
Purposes at End of Year as of December 31, 1999............................11
Signatures....................................................................12
</TABLE>
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
TRO Learning, Inc. Savings/Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the TRO LEARNING, INC. SAVINGS/RETIREMENT PLAN as of December 31, 1999 and
1998, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1999. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for purposes 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. This 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.
Arthur Andersen LLP
Chicago, Illinois
June 20, 2000
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TRO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
(EMPLOYER IDENTIFICATION NUMBER 41-1646390, PLAN NUMBER 001)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
INVESTMENTS (Note 2):
Scudder Cash Investment Trust $ 223,188 $ 282,869
Scudder Income Fund 238,905 292,426
Scudder Growth & Income Fund 1,312,320 1,365,667
Scudder Large Company Value Fund 957,337 920,559
Scudder Global Fund 501,574 470,725
Scudder Global Discovery Fund 494,444 313,010
Scudder International Fund 190,812 75,296
Scudder Pathway Series--Balanced Fund 340,554 235,004
Scudder Stable Value Fund 85,791 -
TRO Learning, Inc. Company Stock 437,000 569,411
American Century Ultra Fund 1,072,935 436,281
Participant loans 69,689 19,768
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NET ASSETS AVAILABLE FOR BENEFITS $5,924,549 $4,981,016
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</TABLE>
The accompanying notes are an integral part of these statements.
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TRO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
(EMPLOYER IDENTIFICATION NUMBER 41-1646390, PLAN NUMBER 001)
<TABLE>
<S> <C>
ADDITIONS:
Participant contributions $ 995,768
Company contributions 58,620
Net appreciation in fair value of investments 293,464
Interest and dividend income 314,091
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Total additions 1,661,943
DEDUCTIONS:
Benefits paid (718,410)
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Net increase 943,533
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 4,981,016
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End of year $5,924,549
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</TABLE>
The accompanying notes are an integral part of this statement.
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TRO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1999 AND 1998
(EMPLOYER IDENTIFICATION NUMBER 41-1646390, PLAN NUMBER 001)
1. DESCRIPTION OF PLAN
A brief description of the TRO Learning, Inc. (the "Company")
Savings/Retirement Plan (the "Plan") is provided for general informational
purposes only. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all eligible employees of
the Company. Employees of the Company must complete 90 days of service to
be eligible to participate. The Company utilizes Scudder Trust Company as
the Plan's investment manager, asset custodian and record keeper.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended.
CONTRIBUTIONS
Participants may contribute up to 20% of their compensation, up to a
maximum dollar amount which was $10,000 in 1999 and 1998. These
contributions are deducted from participants' salaries before income taxes
are withheld. The Company may also make profit-sharing contributions to
the Plan at its discretion. Any such amount must be designated by Company
resolution. The Company made a profit-sharing contribution of $58,620 and
$0 in 1999 and 1998, respectively.
PARTICIPANT ACCOUNTS
Individual participant accounts are maintained by Scudder Trust Company.
Each participant's account is credited with the participant's
contribution, Plan earnings and an allocation of the Company's
contribution. Allocations are based on participant earnings, account
balances or as determined by the Company.
VESTING
Participants are immediately vested in their salary deferral contribution
accounts plus actual earnings thereon.
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Participants vest in their discretionary Company contribution account
based on the following schedule:
<TABLE>
<CAPTION>
VESTED
YEARS OF SERVICE PERCENTAGE
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<S> <C>
Less than 1 year 0%
1 year but less than 2 20
2 years but less than 3 40
3 years but less than 4 60
4 years but less than 5 80
5 years or more 100
===
</TABLE>
A participant will also become fully vested upon permanent disability or
attainment of normal or early retirement as defined in the Plan.
Forfeitures are used to reduce future contributions made by the Company.
There were no forfeitures at December 31, 1999 and 1998.
BENEFIT PAYMENTS
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account, or
installments over a specified time. For termination of service for other
reasons, a participant may receive the value of the vested interest in his
or her account as a lump-sum distribution.
LOANS
Participants may borrow from the Plan, as defined in the Plan agreement,
subject to appropriate limitations. The rate of interest will be the
current prime rate plus 1%. The terms of all such loans are set by the
Company and the maximum payment term is generally five years.
INVESTMENT OPTIONS
The Plan offers 11 different investment options: 9 mutual funds, a common
and collective trust fund and a Company stock fund. Per the Plan
agreement, a maximum of 30% of a participant's account balance can be
allocated to Company stock. Plan participants direct the investment of
their accounts into these 11 options.
TRUSTEES
The trustees of the Plan during 1999 and 1998 were William R. Roach, John
Murray and Patricia Hawver, officers of the Company.
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2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared using the accrual
basis of accounting.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
changes therein, and disclosures of contingent assets and liabilities.
Actual results could differ from those estimates.
VALUATION OF INVESTMENTS AND INCOME RECOGNITION
Except for the Stable Value Fund, Plan investments are stated at fair
value as determined by quoted market prices.
The Stable Value Fund is recorded at contract value because it is fully
benefit responsive. The contract value represents the principal balance of
the investment contract, plus accrued interest at the stated contract
rate, less withdrawals and administrative expenses. The fair value of the
investment contract approximates contract value as of December 31, 1999.
The average yield and crediting interest rates were approximately 6.7% as
of December 31, 1999.
The increase (decrease) in unrealized appreciation (depreciation) of
investments and realized gain (loss) on sale of investments are determined
based on an average cost basis of the assets. The average cost basis is
composed of the market values of assets: (a) on hand at the beginning of
the year rather than the original cost at the time of purchase and (b)
values on the date of purchase during the year.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividend income is
recorded on the ex-dividend date.
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $293,464 as follows:
<TABLE>
<S> <C>
Mutual funds $493,162
Common stock (199,698)
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$293,464
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</TABLE>
ADMINISTRATIVE EXPENSES
All administrative expenses are paid by the Company.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
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3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become 100%
vested in their accounts.
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated January 12, 1996, that the Plan is designed in accordance
with applicable sections of the Internal Revenue Code ("IRC"). Although
the Plan has been amended since receiving the determination letter, the
Plan administrator believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
5. ADOPTION OF STATEMENT OF POSITION 99-3
The Accounting Standards Executive Committee issued Statement of Position
("SOP") 99-3, "Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters," which
eliminates the requirement for a defined contribution plan to disclose
participant-directed investment programs. SOP 99-3 was adopted for the
1999 financial statements and, as such, the 1998 financial statements have
been revised to eliminate the participant-directed fund investment program
disclosures.
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report, included in this Form 11-K, into TRO Learning, Inc.'s previously filed
Registration Statement File No. 33-30963.
Arthur Andersen LLP
Chicago, Illinois
June 23, 2000
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TRO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
AS OF DECEMBER 31, 1999
(EMPLOYER IDENTIFICATION NUMBER 41-1646390, PLAN NUMBER 001)
<TABLE>
<CAPTION>
CURRENT
DESCRIPTION OF INVESTMENT VALUE
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<S> <C>
MUTUAL FUNDS:
*Scudder-
Cash Investment Trust $ 223,188
Income Fund 238,905
Growth & Income Fund 1,312,320
Large Company Value Fund 957,337
Global Fund 501,574
Global Discovery Fund 494,444
International Fund 190,812
Pathway Series--Balanced Fund 340,554
American Century Ultra Fund 1,072,935
COMMON AND COLLECTIVE TRUST FUND:
*Scudder Stable Value Fund 85,791
*TRO LEARNING, INC. COMPANY STOCK 437,000
*PARTICIPANT LOANS (interest rate at 7%) 69,689
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$ 5,924,549
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</TABLE>
*Represents party-in-interest.
The accompanying notes are an integral part of this schedule.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized on June 26, 2000.
TRO LEARNING, INC. SAVINGS/RETIREMENT PLAN
By: /s/ John Murray
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Trustee
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