<PAGE> 1
UNITED STATES
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
[NO FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO 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 prinicipal executive office:
STB SYSTEMS, INC.
3400 WATERVIEW PARKWAY
RICHARDSON, TEXAS 75080
<PAGE> 2
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, 1998 and 1997.
3. Statement of Changes in Net Assets Available for Plan Benefits for
the Year Ended December 31, 1998.
4. Notes to Financial Statements.
5. Item 27a (Schedule of Assets Held for Investment Purposes at
December 31, 1998) (Schedule 1).
6. Item 27d (Schedule of Reportable Transactions for the Year Ended
December 31, 1998) (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.
<PAGE> 3
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
DECEMBER 31, 1998 AND 1997
<PAGE> 4
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Benefits
at December 31, 1998 and 1997 3
Statement of Changes in Net Assets Available for Benefits
with Fund Information For the Year Ended December 31, 1998 4 - 5
Notes to Financial Statements 6 - 11
Supplemental Schedules (Note A):
Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes
at December 31, 1998 12
Schedule II: Item 27d--Schedule of Reportable Transactions
For the Year Ended December 31, 1998 13
</TABLE>
Note A: Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 not included herein
have been omitted as there were no transactions of the type required to
be disclosed in such schedules.
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
STB Systems, Inc. 401(k) Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits with
fund information present fairly, in all material respects, the net assets
available for benefits of the STB Systems, Inc. 401(k) Savings Plan at December
31, 1998 and 1997, and the changes in net assets available for benefits for the
year ended December 31, 1998, 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 audits were performed 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 the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of changes in net assets available for benefits
with fund information is presented for purposes of additional analysis rather
than to present the changes in net assets available for benefits of each fund.
These supplemental schedules and fund information are the responsibility of the
Plan's management. Schedules I and II and the 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.
PricewaterhouseCoopers LLP
Dallas, Texas
July 12, 1999
2
<PAGE> 6
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1997
---------- -----------
<S> <C> <C>
ASSETS:
Investments - at fair value:
Interests in pooled separate accounts:
Principal Bond & Mortgage Account $ 77,920 $ 45,928
Principal Stock Index 500 Account 478,245 * 276,104 *
Principal Large Company Growth Account 356,538 * 182,694 *
Principal Small Company Blend Account 198,108 * 114,830
Principal International Stock Account 177,430 133,399 *
Interests in common/collective trusts:
Principal Stable Value Fund Account 343,189 * 276,428 *
Shares of registered investment companies:
T. Rowe Price New Horizons Fund 134,106 73,399
Vanguard Primecap Fund 499,536 * 284,871 *
Vanguard Windsor II Fund 302,546 * 183,908 *
Vanguard Asset Allocation Fund 379,015 * 244,857 *
STB Systems, Inc. common stock 485,903 * 440,168 *
New England Guaranteed Interest Contract 36,309 101,358
---------- ----------
Total investments 3,468,845 2,357,944
---------- ----------
Participant notes receivable 117,603 30,446
---------- ----------
Contributions receivable:
Participants' 70,832 63,795
Employer's 17,440 16,240
---------- ----------
Total contributions receivable 88,272 80,035
---------- ----------
Total assets and net assets available for benefits $3,674,720 $2,468,425
========== ==========
</TABLE>
* Represents five percent or more of the Plan's net assets available for
benefits.
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 7
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998 (PAGE 1 OF 2)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED / FUND INFORMATION
----------------------------------------------------------------
PRINCIPAL
PRINCIPAL PRINCIPAL PRINCIPAL LARGE
MONEY BOND & STOCK COMPANY
TOTAL MARKET MORTGAGE INDEX 500 GROWTH
PLAN ACCOUNT ACCOUNT ACCOUNT ACCOUNT
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ (12,633) $ -- $ 4,870 $ 95,971 $ 58,686
Interest 11,216 113 -- -- --
Dividends 19,611 -- -- -- --
----------- ----------- ----------- ----------- -----------
18,194 113 4,870 95,971 58,686
----------- ----------- ----------- ----------- -----------
Contributions:
Participants' 1,126,877 -- 25,513 146,188 141,079
Employer's 227,826 -- 6,591 29,444 20,313
----------- ----------- ----------- ----------- -----------
1,354,703 -- 32,104 175,632 161,392
----------- ----------- ----------- ----------- -----------
Loan repayments -- -- 1,867 5,771 5,153
----------- ----------- ----------- ----------- -----------
Total additions 1,372,897 113 38,841 277,374 225,231
----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Administrative expense 26,577 -- 727 3,549 2,694
Distributions to participants 140,025 -- 9,352 40,701 9,860
Loans -- -- 1,419 20,197 16,900
----------- ----------- ----------- ----------- -----------
Total deductions 166,602 -- 11,498 64,447 29,454
----------- ----------- ----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 1,206,295 113 27,343 212,927 195,777
Interfund transfers -- (113) 4,649 (10,786) (21,933)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) 1,206,295 -- 31,992 202,141 173,844
Net assets available for benefits:
Beginning of year 2,468,425 -- 45,928 276,104 182,694
----------- ----------- ----------- ----------- -----------
End of year $ 3,674,720 $ -- $ 77,920 $ 478,245 $ 356,538
=========== =========== =========== =========== ===========
<CAPTION>
PARTICIPANT-DIRECTED / FUND INFORMATION
---------------------------------------------
PRINCIPAL
SMALL PRINCIPAL PRINCIPAL
COMPANY INTERNATIONAL STABLE
BLEND STOCK VALUE FUND
ACCOUNT ACCOUNT ACCOUNT
----------- ------------- -----------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ (16,401) $ 16,361 $ 16,706
Interest -- -- --
Dividends -- -- --
----------- ----------- -----------
(16,401) 16,361 16,706
----------- ----------- -----------
Contributions:
Participants' 110,186 67,242 76,557
Employer's 21,735 13,119 10,155
----------- ----------- -----------
131,921 80,361 86,712
----------- ----------- -----------
Loan repayments 3,731 3,183 2,026
----------- ----------- -----------
Total additions 119,251 99,905 105,444
----------- ----------- -----------
Deductions from net assets attributed to:
Administrative expense 1,614 1,567 2,773
Distributions to participants 10,354 14,725 10,792
Loans 6,788 13,532 24,570
----------- ----------- -----------
Total deductions 18,756 29,824 38,135
----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 100,495 70,081 67,309
Interfund transfers (17,217) (26,050) (548)
----------- ----------- -----------
Net increase (decrease) 83,278 44,031 66,761
Net assets available for benefits:
Beginning of year 114,830 133,399 276,428
----------- ----------- -----------
End of year $ 198,108 $ 177,430 $ 343,189
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 8
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998 (PAGE 2 OF 2)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED / FUND INFORMATION
-------------------------------------------------------------------------------------
NEW
T. ROWE VANGUARD STB ENGLAND
PRICE NEW VANGUARD VANGUARD ASSET SYSTEMS, INC. GUARANTEED
HORIZONS PRIMECAP WINDSOR II ALLOCATION COMMON INTEREST
FUND FUND FUND FUND STOCK CONTRACT
--------- --------- --------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 7,910 $ 89,268 $ 31,421 $ 58,419 $(375,844) $ --
Interest -- -- -- -- -- 3,493
Dividends -- 3,439 5,603 10,569 -- --
--------- --------- --------- --------- --------- ---------
7,910 92,707 37,024 68,988 (375,844) 3,493
--------- --------- --------- --------- --------- ---------
Contributions:
Participants' 53,672 173,829 94,392 87,769 143,413 --
Employer's 10,216 31,056 18,095 19,218 46,684 --
--------- --------- --------- --------- --------- ---------
63,888 204,885 112,487 106,987 190,097 --
--------- --------- --------- --------- --------- ---------
Loan repayments 4,297 7,412 3,528 4,353 6,439 --
--------- --------- --------- --------- --------- ---------
Total additions 76,095 305,004 153,039 180,328 (179,308) 3,493
--------- --------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Administrative expense 850 3,239 2,109 2,606 4,849 --
Distributions to participants 3,575 23,144 4,964 8,701 3,857 --
Loans 3,922 14,179 11,322 11,653 2,825 --
--------- --------- --------- --------- --------- ---------
Total deductions 8,347 40,562 18,395 22,960 11,531 --
--------- --------- --------- --------- --------- ---------
Net increase (decrease) prior to
interfund transfers 67,748 264,442 134,644 157,368 (190,839) 3,493
Interfund transfers (7,041) (49,777) (16,006) (23,210) 236,574 (68,542)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) 60,707 214,665 118,638 134,158 45,735 (65,049)
Net assets available for benefits:
Beginning of year 73,399 284,871 183,908 244,857 440,168 101,358
--------- --------- --------- --------- --------- ---------
End of year $ 134,106 $ 499,536 $ 302,546 $ 379,015 $ 485,903 $ 36,309
========= ========= ========= ========= ========= =========
<CAPTION>
PARTICIPANT-DIRECTED / FUND INFORMATION
---------------------------------------
PARTICIPANT
NOTES CONTRIBUTIONS
RECEIVABLE RECEIVABLE
---------- ------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ -- $ --
Interest 7,610 --
Dividends -- --
--------- ---------
7,610 --
--------- ---------
Contributions:
Participants' -- 7,037
Employer's -- 1,200
--------- ---------
-- 8,237
--------- ---------
Loan repayments (47,760) --
--------- ---------
Total additions (40,150) 8,237
--------- ---------
Deductions from net assets attributed to:
Administrative expense -- --
Distributions to participants -- --
Loans (127,307) --
--------- ---------
Total deductions (127,307) --
--------- ---------
Net increase (decrease) prior to
interfund transfers 87,157 8,237
Interfund transfers -- --
--------- ---------
Net increase (decrease) 87,157 8,237
Net assets available for benefits:
Beginning of year 30,446 80,035
--------- ---------
End of year $ 117,603 $ 88,272
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 9
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO 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 comprehensive description of the Plan's
provisions.
GENERAL
The Plan, established in 1991, is a defined contribution plan for all
employees of STB Systems, Inc. (the "Company" or "Employer") who have
completed one month of eligible service and elect to participate. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
As discussed in Note 6, the Company intends to merge the Plan into the
3dfx 401(k) Plan during 1999.
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 50% of up to 4% of the employees' compensation
reduction contribution. The Company may also make discretionary
contributions. During the year ended December 31, 1998, the Company did
not make any discretionary contributions.
PARTICIPANTS' ACCOUNTS
Participants' accounts are credited with the participants' contributions,
the Employer's matching contributions and allocations of (a) the
Company's discretionary contributions and (b) Plan earnings. The
Company's discretionary contribution is allocated based upon the ratio of
the eligible participant's compensation to the total compensation for all
eligible participants. Plan earnings are allocated based on the ratio of
the participant's account balance to the total account balances in the
respective investment. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
At December 31, 1998 and 1997, forfeited nonvested accounts totaled
$8,051 and $3,610, respectively. These funds are first applied to pay
Plan expenses then are used to reduce the Employer's contributions.
6
<PAGE> 10
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
VESTING
Participants' contributions to the Plan are 100% vested at all times.
Employer contributions to the Plan vest as follows:
<TABLE>
<CAPTION>
COMPLETED YEARS VESTING
OF VESTING SERVICE PERCENTAGE
------------------- ----------
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
</TABLE>
INVESTMENT OPTIONS
Contributions are invested, in accordance with participants' elections,
in accounts administered by Principal Life Insurance Company (the
"Principal"), the Plan's custodian. The following investment alternatives
were available under the Plan during the year ended December 31, 1998:
o Principal Bond & Mortgage Account. This account invests in
intermediate-term fixed-income loans, most of which are bonds and
mortgages issued to companies. The account may also invest in
publicly traded bonds.
o Principal Stock Index 500 Account. This account invests primarily
in common stocks of those companies included in the Standard &
Poor's 500 Stock Index.
o Principal Large Company Growth Account. This account invests in
common stocks of large, established companies whose earnings are
expected to grow at above average rates. Stocks held in this
account are often seasoned companies with competitive advantages.
o Principal Large Company Blend Account. This account invests
primarily in common stocks of large companies whose capital,
earnings, and dividends are expected to grow at above average
rates. The account invests in both "growth" and "value" stocks,
resulting in a "blend" portfolio.
o Principal International Stock Account. This account invests
primarily in common stocks of companies located outside of the
U.S., mainly in Western Europe and Asia. The account may also
occasionally invest in preferred stocks or convertible bonds of
these companies.
o Principal Stable Value Fund Account. This account invests
primarily in insurance contracts issued by insurance companies and
investments from other financial institutions which offer
stability of principal.
7
<PAGE> 11
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
o T. Rowe Price New Horizons Fund. This fund invests primarily in
common stocks of small, rapidly growing companies. The fund seeks
to invest in a diversified group of emerging growth companies
still in the early stages of their life cycle.
o Vanguard Primecap Fund. This fund is very diverse and invests
primarily in companies with market values between $1 billion and
$5 billion.
o Vanguard Windsor II Fund. This fund invests mainly in stocks that
are considered undervalued relative to their current prices.
o Vanguard Asset Allocation Fund. This fund invests in a mix of
stocks, long-term U.S. Treasury bonds, and short-term money market
instruments.
o STB Systems, Inc. common stock. Funds are invested in common stock
of the Employer.
The New England Guaranteed Interest Contract was a previously available
investment option. Current contributions may not be allocated to this
account.
As discussed in Note 6, during 1999 the investment option under the Plan
to invest in STB Systems, Inc. common stock was discontinued as a choice
for new investments.
Participants may change their investment options daily.
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding balance of loans during
the one-year period ending on the day before the new loan is made;
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the participant's vested account balance;
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is
made.
All loans are required to be repaid within five years. The loans are
secured by the balance in the participant's account and bear a
reasonable rate of interest as determined by the Loan Administrator.
Principal and interest are repaid through payroll deductions.
PAYMENT OF BENEFITS
In the event of a participant's termination of employment, retirement,
disability, or death, the participant or beneficiary receives an amount
equal to the vested value of their account in a lump-sum payment. In the
event of a participant's termination of employment, the participant may
also elect to have the vested portion of the account balance transferred
to another plan.
8
<PAGE> 12
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
EXPENSES OF ADMINISTERING THE PLAN
Forfeitures are applied to pay Plan expenses. Certain transaction costs
borne by the Plan are charged to the individual participant who initiated
the transaction by reducing his/her account balance. Some costs of
administering the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared in accordance with
generally accepted accounting principles.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements.
Actual results could differ from these estimates.
INVESTMENTS AND INCOME RECOGNITION
Investments are stated at fair value. Valuation of investments 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. Interest is recognized
on an accrual basis.
The Statement of Changes in Net Assets Available for Benefits presents
the net appreciation (depreciation) in the fair value of investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) of those investments.
TAX STATUS
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. The Plan has been amended since receiving the determination
letter. However, management of the Company is unaware of any variations
in the operations of the Plan from the terms of the Plan document as
amended.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
RECLASSIFICATIONS
Certain reclassifications have been made to the amounts reported in the
prior year in order to conform to current year presentation.
9
<PAGE> 13
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. INVESTMENTS
Interests in pooled separate accounts and in common/collective trusts and
shares of registered investment companies are maintained by the Principal
as custodian. Shares of STB Systems, Inc. common stock are maintained by
Dain Rauscher as custodian. The New England Guaranteed Interest Contract
is maintained by New England Insurance and Investment Company as
custodian.
4. RELATED-PARTY TRANSACTIONS
Certain Plan investments are interests in pooled separate investment
accounts managed by the Principal. The Principal is also the custodian of
the Plan.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of other loans and other receivables on
Form 5500 to the financial statements:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1997
-------- --------
<S> <C> <C>
Per Form 5500 -
Other receivables, loans payments not allocated
to accounts at December 31 $ 4,065 $ 2,292
Other loans 113,538 28,392
Other -- (238)
-------- --------
Per financial statements -
Participant notes receivable $117,603 $ 30,446
======== ========
</TABLE>
10
<PAGE> 14
STB SYSTEMS, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The following is a reconciliation of employer's contributions and
earnings on investments on Form 5500 to the financial statements:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
------------------
<S> <C>
Per Form 5500 -
Employer's contributions $ 296,478
Per financial statements -
Interfund transfers from New England
Guaranteed Interest Contract (68,542)
Other (110)
---------
Employer's contribution $ 227,826
=========
Per Form 5500 -
Earnings on investments $ (50,468)
Per financial statements -
Interfund transfers from New England
Guaranteed Interest Contract 68,542
Other 120
---------
Investment income $ 18,194
=========
</TABLE>
6. SUBSEQUENT EVENTS
On May 13, 1999, the Company merged with 3dfx Interactive, Inc. ("3dfx")
and now operates as 3dfx Interactive of Texas.
Coincident with the merger, shares of STB Systems, Inc. common stock held
in the Plan were exchanged for 3dfx common stock and the investment
option under the Plan to invest in STB Systems, Inc. common stock was
discontinued as a choice for new investments. Participants with account
balances allocated to this investment option at the date of the merger
may remain invested in the 3dfx common stock or may divest the 3dfx
common stock until further action is taken by the 3dfx Board of
Directors.
3dfx has indicated that it intends to merge the Plan into the 3dfx 401(k)
Plan during 1999. 3dfx has also granted service credit under the 3dfx
401(k) Plan to any employee eligible to participate in the STB 401(k)
Plan immediately prior to the merger date.
11
<PAGE> 15
STB SYSTEMS, INC. SCHEDULE I
401(k) SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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>
The Principal Life Insurance Company* Bond & Mortgage Account $ 72,275 $ 77,920
The Principal Life Insurance Company* Stock Index 500 Account 382,754 478,245
The Principal Life Insurance Company* Large Company Growth Account 291,229 356,538
The Principal Life Insurance Company* Small Company Blend Account 214,290 198,108
The Principal Life Insurance Company* International Stock Account 167,405 177,430
The Principal Life Insurance Company* Stable Value Fund Account 324,519 343,189
T. Rowe Price New Horizons Fund 136,052 134,106
Vanguard Primecap Fund 448,050 499,536
Vanguard Windsor II Fund 304,457 302,546
Vanguard Asset Allocation Fund 346,170 379,015
STB Systems, Inc.* Common stock 1,236,538 485,903
New England Insurance and Investment Company New England Guaranteed Interest Contract
(4.90% guaranteed interest rate at December 31, 1998) 34,139 36,309
Participant notes receivable General purpose loans, maturing from January 1999 to
December 2003, interest ranging from 9.25% to 10.50% -- 117,603
----------- -----------
$ 3,957,878 $ 3,586,448
=========== ===========
</TABLE>
* Parties denoted are known to be parties-in-interest.
12
<PAGE> 16
STB SYSTEMS, INC. SCHEDULE II
401(k) SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES
-------------------------
NUMBER OF
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS COST
- ------------------------------------ ------------------------------- ------------ -----------
<S> <C> <C> <C>
SERIES TRANSACTIONS
The Principal Life Insurance Company Money Market Account 1 $ 68,654
The Principal Life Insurance Company Stock Index 500 Account 47 $ 224,090
The Principal Life Insurance Company Large Company Growth Account 45 $ 181,983
The Principal Life Insurance Company Small Company Blend Account 44 $ 139,644
The Principal Life Insurance Company International Stock Account 35 $ 87,468
The Principal Life Insurance Company Stable Value Fund Account 39 $ 105,355
The Principal Life Insurance Company Vanguard Primecap Fund 50 $ 241,349
The Principal Life Insurance Company Vanguard Windsor II Fund 45 $ 148,194
The Principal Life Insurance Company Vanguard Asset Allocation Fund 46 $ 147,668
STB Systems, Inc. Common stock 88 $ 1,270,543
<CAPTION>
SALES
---------------------------------------
NUMBER OF SALES NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PROCEEDS (LOSS)
- ------------------------------------ ------------------------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
SERIES TRANSACTIONS
The Principal Life Insurance Company Money Market Account 5 $ 69,062 $ 408
The Principal Life Insurance Company Stock Index 500 Account 48 $ 117,773 $ 14,289
The Principal Life Insurance Company Large Company Growth Account 46 $ 66,813 $ 7,250
The Principal Life Insurance Company Small Company Blend Account 51 $ 39,959 $ (3,392)
The Principal Life Insurance Company International Stock Account 44 $ 59,797 $ 4,672
The Principal Life Insurance Company Stable Value Fund Account 39 $ 55,249 $ 2,042
The Principal Life Insurance Company Vanguard Primecap Fund 57 $ 101,047 $ (1,605)
The Principal Life Insurance Company Vanguard Windsor II Fund 39 $ 36,505 $ 1,226
The Principal Life Insurance Company Vanguard Asset Allocation Fund 45 $ 54,838 $ 2,352
STB Systems, Inc. Common stock 23 $ 844,945 $ 209,006
</TABLE>
13
<PAGE> 17
EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
<PAGE> 18
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: STB Systems, Inc., Plan Sponsor
Dated: July 13, 1999 By: /s/ Bryan F. Keyes
Printed Name: Bryan F. Keyes
Title: Vice President of Administration
and General Counsel
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
<S> <C>
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-1148) of STB Systems, Inc. of our report dated
July 12, 1999 relating to the financial statements of the STB Systems, Inc.
401(k) Savings Plan for the year ended December 31, 1998 which appears in this
Form 11-K.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Dallas, Texas
July 12, 1999
