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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
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: 0-25540
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
STB SYSTEMS, 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:
STB SYSTEMS, INC.
1651 North Glenville Drive
Richardson, Texas 75081
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REQUIRED INFORMATION
The following financial statements and forms are furnished with this Form
11-K Annual Report for the STB Systems, Inc. 401(k) Savings Plan (the "Plan"):
1. Report of Independent Accountants.
2. Statement of Net Assets Available for Plan Benefits as of December 31,
1995 and 1996.
3. Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1996.
4. Notes to Consolidated Financial Statements.
5. Statement of Net Assets Available for Plan Benefits by Investment
Options at December 31, 1996.
6. Statement of Net Assets Available for Plan Benefits by Investment
Options at December 31, 1995.
7. Statement of Net Assets Available for Plan Benefits by Investment
Options for the Year Ended December 31, 1996.
8. Item 27a (Schedule of Assets Held for Investment Purposes at December
31, 1996) (Schedule 1).
9. Item 27d (Schedule of Reportable Transactions for the Year Ended
December 31, 1996) (Schedule 2).
Each of the statements set forth above has been prepared in accordance with
the financial reporting requirements of the Employee Retirement Income Security
Act of 1974, as amended.
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EXHIBITS
23.1 Consent of Price Waterhouse LLP, Independent Accountants
-2-
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STB SYSTEMS, INC.
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
STB Systems, Inc. 401(k) Savings Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the STB Systems, Inc. 401(k) Savings Plan at December 31, 1996
and 1995, and the changes in net assets available for plan benefits for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles. 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 of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in Schedules I
and II is presented for purposes of additional analysis and is not a required
part of the basic financial statements but is additional information required by
ERISA. Such information has been subjected to the auditing procedures applied
in the audit 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/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Dallas, Texas
May 16, 1997
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
- ------------------------------------------------------------------------------
DECEMBER 31,
-------------------------
1996 1995
------------ ------------
ASSETS
Investments (Note 3) $ 1,339,551 $ 873,853
Participant notes receivable 22,647 12,654
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Net assets available for plan benefits $ 1,362,198 $ 886,507
------------ ------------
The accompanying notes are an integral
part of the financial statements.
2
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
- ------------------------------------------------------------------------------
Year Ended
December 31,
1996
------------
Additions to net assets:
Participant contributions $ 310,515
Employer contributions 45,101
Investment income:
Unrealized gains 163,121
Interest income 12,149
Other (73)
------------
530,813
------------
Deductions from net assets -
Distributions paid to participants 55,122
------------
Net increase in net assets available for plan benefits 475,691
------------
Net assets available for plan benefits:
Beginning of year 886,507
------------
End of year $ 1,362,198
------------
------------
The accompanying notes are an integral
part of the financial statements.
3
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the STB Systems, Inc. 401(k) Savings Plan (the
"Plan") provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
GENERAL
The Plan, established in 1991, is a nondiscriminatory defined contribution
plan for all employees of the Company who have completed six months of
credited service and elect to participate. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
It has been amended to incorporate legislative changes required by the
various tax acts enacted since 1984.
CONTRIBUTIONS
Eligible employees may elect to make contributions to the Plan by means of
compensation reductions of up to 15% of their compensation. Employees may
allocate their contributions to investment options in 1% increments. The
Company matches 25% of each dollar of employee tax deferred contributions
up to a maximum of 4% of each employee's annual pay.
PARTICIPANTS' ACCOUNTS
Participants' accounts are credited with the participants' contributions
and an allocation of (a) the Company's contribution and (b) Plan earnings.
VESTING OF CONTRIBUTIONS
Participants' contributions to the Plan are 100% vested at all times.
Employer contributions to the Plan are vested in accordance with a Plan
document schedule based on the participant's length of service with the
Company. The schedule provides for full vesting after five years of
credited service.
INVESTMENT OPTIONS
Eligible participants have six investment options including a Fixed Income
option, a Balanced option, a Growth Stock option, an Aggressive Growth
option, an Employer Stock Fund, and a Bond option. Cecil & Co. is the
custodian for the Employer Stock Fund and Nationwide Mutual Insurance
Company is the custodian for the five remaining plan assets. Southwest
Guaranty Trust Company is the trustee of all the Plan assets and Cecil &
Co. is the record keeper.
On February 14, 1995, participants in the Plan were granted a one-time
option to reallocate existing participant investment accounts to purchase
STB Systems, Inc. common stock in conjunction with the Company's initial
public offering which became effective February 14, 1995.
4
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
The assets from a predecessor custodian remain with New England Company as
custodian and are included in Plan assets. These assets are a prior fixed
income option. No further contributions can be made to this investment
option.
Participants may change their investment options daily.
PAYMENT OF BENEFITS
In the event of a participant's termination of employment, retirement,
disability, or death, the participant or beneficiary may elect to receive
an amount equal to the vested value of their account in either a lump-sum
or periodic payments of substantially equal installments at least annually.
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50 percent of their vested
account balance. All loans are required to be repaid within five years of
the loan unless the loan is to be used for the purchase of a primary
residence. The loans are secured by the balance in the participant's
account and bear interest at prime plus 1%. Principal and interest are
repaid through payroll deductions. Cecil & Co. is the custodian of the
Loan Account.
FORFEITED ACCOUNTS
At December 31, 1996 and 1995, forfeited nonvested accounts totaled $1,346
and $1,869, respectively. These funds were held in a money market account
at December 31, 1996 and 1995, and will be used to reduce future employer
contributions.
EXPENSES OF ADMINISTERING THE PLAN
The Company pays expenses incurred in the administration of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared in accordance with
generally accepted accounting principles. Assets are stated at market
value; unrealized appreciation and depreciation of the assets are reflected
in the asset balances. Gains or losses on investments are realized at the
time of sale.
5
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
FEDERAL INCOME TAXES
Management of the Company believes that the Plan is qualified under Section
401(a) of the Internal Revenue Code and therefore believes the trust is
exempt from taxation under Section 501(a). The Internal Revenue Service
granted a favorable letter of determination to the Plan in October, 1993.
Generally, contributions to a qualified plan are deductible by the Company
when made, earnings of the trust are tax exempt, and participants are not
taxed on their benefits until withdrawn from the Plan.
Management of the Company is unaware of any variations in the operations of
the Plan from the terms of the Plan document as amended. The Plan has
complied with the fidelity bonding requirements of ERISA.
VALUATION OF SECURITIES
Valuation of securities is based on the last recorded sales price at
year-end, as reported by the principal security exchange on which the
security is traded. Securities transactions are recorded on a trade-date
basis.
RECOGNITION OF INTEREST INCOME
Interest is recognized on an accrual basis.
DETERMINATION OF UNREALIZED GAIN OR LOSS ON INVESTMENTS
Unrealized appreciation or depreciation in the fair value of investments
held at year-end and gain or loss on sale of investments during the year
are determined using the fair value at the beginning of the year or
purchase price if acquired during the year.
REPORTABLE TRANSACTIONS
For the Plan year 1996, the reportable transactions as defined in Item 27d
and Part V of Form 5500 are listed in Schedule II.
3. INVESTMENTS
Investments are maintained by Nationwide Mutual Insurance Company and Cecil
& Co. as custodians, except for certain assets from a predecessor custodian
which are held by New England Company.
6
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STB SYSTEMS, INC. 401(k) SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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Investments representing five percent or more of net assets available for
Plan benefits at December 31, 1996 were as follows:
FAIR
FUND DESCRIPTION VALUE
---------------- -----
Company Common Stock $ 146,891
Fidelity Magellan 470,899
Fidelity Puritan 298,370
Fixed Fund 120,443
Twentieth Century Growth 146,679
New England Guaranteed 97,865
Investments representing five percent or more of net assets available for
Plan benefits at December 31, 1995 were as follows:
FAIR
FUND DESCRIPTION VALUE
---------------- -----
Company Common Stock $ 72,618
Fidelity Magellan 303,152
Fidelity Puritan 179,722
Bond Fund of America 46,141
Fixed Fund 77,654
Twentieth Century Growth 95,903
New England Guaranteed 96,794
7
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<TABLE>
STB SYSTEMS, INC. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
BY INVESTMENT OPTIONS AT DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY TWENTIETH NEW
TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN
PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT
---------- -------- -------- -------- ---------- -------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments $1,339,551 $146,891 $470,899 $298,370 $53,205 $120,443 $146,679 $97,865 $5,199 $ -
Participant
notes receivable 22,647 - - - - - - - - 22,647
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
Net assets available
for plan benefits $1,362,198 $146,891 $470,899 $298,370 $53,205 $120,443 $146,679 $97,865 $5,199 $22,647
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
</TABLE>
8
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<TABLE>
STB SYSTEMS, INC. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
BY INVESTMENT OPTIONS AT DECEMBER 31, 1995
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY TWENTIETH NEW
TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN
PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT
---------- -------- -------- -------- ---------- -------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments $873,853 $72,618 $303,152 $179,722 $46,141 $77,654 $95,903 $96,794 $1,869 $ -
Participant
notes receivable 12,654 - - - - - - - - 12,654
-------- ------- -------- -------- ------- ------- ------- ------- ------ -------
Net assets available
for plan benefits $886,507 $72,618 $303,152 $179,722 $46,141 $77,654 $95,903 $96,794 $1,869 $12,654
-------- ------- -------- -------- ------- ------- ------- ------- ------ -------
-------- ------- -------- -------- ------- ------- ------- ------- ------ -------
</TABLE>
9
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<TABLE>
STB SYSTEMS, INC. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
BY INVESTMENT OPTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY TWENTIETH NEW
TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN
PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT
---------- -------- -------- -------- ---------- -------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets:
Contributions by:
Participants $ 310,515 $ 5,930 $125,711 $ 86,483 $13,673 $ 34,741 $ 42,335 $ - $1,642 $ -
STB Systems, Inc. 45,101 1,213 16,763 12,362 2,338 6,131 6,072 - 222 -
Unrealized gains
(losses) 163,121 74,912 40,573 30,187 2,515 - 14,934 - - -
Interest income 12,149 - - - - 5,236 - 5,214 106 1,593
Loan repayments - - 4,061 2,900 400 999 1,278 - - (9,638)
Other (73) - (810) (64) (16) - (376) (153) 1,346 -
Transfers between
funds - (7,782) 2,587 (4,361) 7,751 (1,153) 2,847 - 111 -
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
530,813 74,273 188,885 127,507 26,661 45,954 67,090 5,061 3,427 (8,045)
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
Deductions from net
assets:
Distributions paid
to participants 55,122 - 13,228 3,999 19,147 5 13,694 3,990 97 962
Loans to
participants - - 7,910 4,860 450 3,160 2,620 - - (19,000)
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
55,122 - 21,138 8,859 19,597 3,165 16,314 3,990 97 (18,038)
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
Net increases in net
assets available for
plan benefits 475,691 74,273 167,747 118,648 7,064 42,789 50,776 1,071 3,330 9,993
Net assets available
for plan benefits:
Beginning of year 886,507 72,618 303,152 179,722 46,141 77,654 95,903 96,794 1,869 12,654
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
End of year $1,362,198 $146,891 $470,899 $298,370 $53,205 $120,443 $146,679 $97,865 $5,199 $22,647
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
---------- -------- -------- -------- ------- -------- -------- ------- ------ -------
</TABLE>
10
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<TABLE>
STB SYSTEMS, INC. 401(k) SAVINGS PLAN SCHEDULE I
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, CURRENT
LESSOR OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR, OR MATURITY VALUE COST VALUE
- -------------------------------- ---------------------------------------------------- ----------- -----------
<S> <C> <C> <C>
STB Systems, Inc.* Common Stock $ 90,252 $ 146,891
Fidelity Magellan Mutual Fund 470,899 470,899
Fidelity Puritan Mutual Fund 298,370 298,370
Bond Fund of America Bond Fund 53,205 53,205
Fixed Fund Nationwide Guaranty Fund
(5.8% guaranteed interest rate for 1996) 120,443 120,443
Twentieth Century Growth Mutual Fund 146,679 146,679
New England Guaranteed New England Guaranteed (5.85% guaranteed
interest rate for maturities in 1998, 4.90%
guaranteed interest rate for maturities in 1999) 97,865 97,865
Money Market Money Market 5,199 5,199
Participant Loans General purpose loans, maturing from 2/97 to
8/00 bearing interest at 7.0% to 9.75% 22,647 22,647
----------- -----------
$ 1,305,559 $ 1,362,198
----------- -----------
----------- -----------
</TABLE>
* Party in interest to the Plan.
11
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<TABLE>
STB SYSTEMS, INC. 401(k) SAVINGS PLAN SCHEDULE II
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT
VALUE
DESCRIPTION OF ASSET EXPENSE OF ASSET ON
IDENTITY OF (INCLUDE INTEREST RATE AND PURCHASE SELLING LEASE INCURRED WITH COST OF TRANSACTION NET
PARTY INVOLVED MATURITY IN CASE OF LOAN) PRICE PRICE RENTAL TRANSACTION ASSET DATE GAIN (LOSS)
- -------------- -------------------------- -------- ------- ------ ------------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series of Transactions:
Nationwide Fidelity Magellan $ 146,535 $ - $ - $ - $ 146,535 $ 146,535 $ -
Mutual Fidelity Puritan 101,745 - - - 101,745 101,745 -
Insurance Twentieth Century Growth 49,685 - - - 49,685 49,685 -
Company
</TABLE>
This supplemental schedule lists series of transactions in excess of 5% of
the fair market values of the respective fund assets at the beginning of the
year as required by the Department of Labor Rules and Regulations for
Reporting and Disclosure.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees of the STB Systems 401(k) Savings Plan have duly caused this Annual
Report to be signed on its behalf by the undersigned, hereunto duly
authorized.
STB SYSTEMS, INC. 401(k) SAVINGS PLAN
By: Southwest Guaranty Trust Company, Plan Trustee
Dated: June 30, 1997 By: /s/ CAROL J. PRESTON
--------------------------------------
Printed Name: Carol J. Preston
---------------------------
Title: Senior Vice President
----------------------------------
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INDEX TO EXHIBITS
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SEQUENTIALLY
EXHIBIT NUMBER NUMBERED PAGE
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<S> <C>
23.1 Consent of Price Waterhouse LLP, Independent Accountants
</TABLE>
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 dated February 6, 1996 (No. 333-1148) of STB Systems,
Inc., of our report dated May 16, 1997 appearing in this annual report of the
STB Systems, Inc. 401(k) Savings Plan on Form 11-K for the year ended
December 31, 1996.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Dallas, Texas
June 27, 1997
