<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the Fiscal Year Ended May 31, 1996
Commission File No. 33-11838
A. Full title of the Plan:
Tab Products Co. Tax Deferred Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Tab Products Co.
1400 Page Mill Road
Palo Alto, California 94304
This report, including all exhibits and attachments, contains 14 pages.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
By /s/ R. J. SEXTON
--------------------------------------------------------
R. J. Sexton, Treasurer and Member of the Administrative
Committee for the Plan
November 22, 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants and Administrative Committee
of Tab Products Co. Tax Deferred Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Tab Products Co. Tax Deferred Savings Plan (the Plan) as of May 31,
1996 and 1995, 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, such financial statements present fairly, in all material
respects, the Plan's net assets available for plan benefits at May 31, 1996 and
1995, 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of May 31, 1996, and (2) reportable transactions
for the year ended May 31, 1996, 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. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1996 financial statements and, in our opinion,
are fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
San Jose, California
October 1, 1996
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No. 33-11838 of Tab Products Co. on Form S-8 of our report dated October 1,
1996, appearing in this Annual Report on Form 11-K of the Tab Products Co. Tax
Deferred Savings Plan for the year ended May 31, 1996.
DELOITTE & TOUCHE LLP
San Jose, California
November 22, 1996
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
MAY 31, 1996 AND 1995
- -------------------------------------------------------------------------------
ASSETS 1996 1995
CASH $ 46,152 $ -
INVESTMENTS, at fair value (Note 3):
Tab Products Co. Common Stock 3,675,331 2,715,448
Bank of America Short Term Fund - 3,751,221
Frank Russell Trust:
Fixed Income Fund - 1,892,112
Equity I Fund - 3,270,676
Equity II Fund - 2,684,072
Merrill Lynch:
Retirement Preservation Trust 2,980,171 -
Growth Fund Class A 3,482,871 -
Global Allocation Fund Class A 198,140 -
Corporate Bond Fund Investment Grade Class A 1,682,092 -
Basic Value Fund Class A 3,833,687 -
AIM Equity Constellation Fund 681,432 -
Templeton Foreign Fund 234,588 -
------------ ------------
Total investments 16,768,312 14,313,529
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 26,686 33,637
EMPLOYEE CONTRIBUTIONS RECEIVABLE 57,392 -
EMPLOYER CONTRIBUTIONS RECEIVABLE 16,509 101,939
LOANS TO EMPLOYEES 358,965 -
------------ ------------
Total assets 17,274,016 14,449,105
LIABILITIES
EXCESS EMPLOYEE CONTRIBUTIONS (160,606) -
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 17,113,410 $ 14,449,105
------------ ------------
------------ ------------
See notes to financial statements.
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED MAY 31, 1996 AND 1995
- -------------------------------------------------------------------------------
1996 1995
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Employee contributions $ 1,335,188 $ 1,269,405
Employer contributions 367,872 366,373
Investment income:
Net appreciation (depreciation) in fair
value of investments 1,932,264 (312,795)
Interest and dividends 919,955 273,437
------------ ------------
Total additions 4,555,279 1,596,420
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO -
Employee withdrawals (1,890,974) (933,370)
------------ ------------
Net additions 2,664,305 663,050
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 14,449,105 13,786,055
------------ ------------
End of year $ 17,113,410 $ 14,449,105
------------ ------------
------------ ------------
See notes to financial statements.
-3-
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1996 AND 1995
- -------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following brief description of the Tab Products Co. Tax Deferred
Savings Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL - The Tab Products Co. Tax Deferred Savings Plan (the Plan) is a
self-administered trusteed plan which covers substantially all of the
employees of Tab Products Co. (the Company). The assets of the Plan are
held by Merrill Lynch Trust Company of California, trustee.
The Plan was amended as of January 1, 1974, changing the Profit-Sharing
Trust to the Incentive Thrift Plan. Under the Profit-Sharing Trust, for
which there have been no contributions since 1973, discretionary Company
contributions were made, whereas under the Incentive Thrift Plan, Company
contributions are defined.
Effective October 1, 1984, the Incentive Thrift Plan was amended to create
the Tax Deferred Savings Plan. The change qualified the Plan under
Section 401(k) of the Internal Revenue Code of 1986, as amended, whereby
employee contributions are deferred from federal income taxes until
withdrawal.
Since January 1, 1974, new employees have not been eligible to join the
Profit-Sharing Trust which continues to be accounted for separately from
the Tax Deferred Savings Plan. The assets of the Profit-Sharing Trust are
held by Merrill Lynch Trust Company of California, trustee and investment
advisor. The assets will be distributed to existing Plan members who were
participants in the Profit-Sharing Trust upon termination of employment.
CONTRIBUTIONS TO THE PLAN - Provisions of the Plan provide that eligible
participants may contribute from 1% to 15% of their compensation as a
tax deferred savings contribution. The Company will make a matching
contribution of 50% of the tax deferred savings contribution made by each
participant each pay period, up to a maximum matching contribution of 2%
of compensation. Supplemental contributions of participants are not
matched by the Company.
In addition to the matching Company contribution, the Company will make an
annual incentive contribution to the Plan if the Company's net income
equals or exceeds 5% of revenues. Contributions of participants are
withheld from compensation earned throughout the year, and along with the
matching company contribution is payable to the trustee semimonthly. The
Company's incentive contribution, if any, is payable no later than the
filing date for the Company's federal income tax return. The Company's
matching and incentive contributions may be made in Tab Products Co. common
stock or cash, which is used to purchase Tab Products Co. common stock in
the open market. Employer contributions in 1995 consisted primarily of
48,033 shares of the Company's stock. The Company did not contribute stock
in 1996.
-4-
<PAGE>
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's
contribution and, (b) Plan earnings. Allocations are based on participant
contributions or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
ELIGIBILITY AND VESTING - All domestic employees are eligible to become
participants in the Plan on the first payroll input day after the first day
of employment. In addition, if a collective bargaining unit is formed in
the future, such members will not become eligible to participate in the
Plan unless so specified in the collective bargaining agreement.
The Company's matching and incentive contributions are referred to as the
Company Contribution Account. The Company Contribution Account of a
participant shall vest in accordance with the following schedule:
YEARS OF SERVICE FOR PERCENTAGE
VESTING PURPOSES VESTED
Less than 2 years 0%
2 years 25%
3 years 50%
4 years 75%
5 years 100%
One hundred percent of the Company Contribution Account will vest upon
the participant's normal retirement date or termination of employment
by reason of death or total disability. Any unvested portion of the
Company Contribution account is forfeited. The Company's matching and
incentive contribution, if any, to the Plan may be reduced by the amount
of such forfeitures. Employees' contributions to the Plan are fully
vested at all times.
PLAN BENEFITS - When a participant's employment terminates, he is eligible
to receive all of his vested accounts under the Plan. In the event a
participant's employment is terminated other than by retirement, death or
total disability, only the vested portion of the Company Contribution
Account will be paid.
Under certain circumstances participants may withdraw part or all of
their accounts (including accumulated earnings). The Tax Deferred
Savings Plan has a loan provision which allows participants to borrow
against his or her accounts. Repayment of the loan is normally made
through payroll deductions.
LOANS TO EMPLOYEES - Participants may borrow from their vested accounts
amounts up to a maximum of $50,000 or 50% of their vested accounts,
whichever is less. Loan terms range up to 15 years. The loans are secured
by the balance in the participants' accounts and bear interest at rates of
1% in excess of the bank prime rate. Principal and interest is paid
ratably through payroll deduction.
PLAN TERMINATION - Although Tab Products Co. established the Plan with the
intention that it continue indefinitely, the Company has the right to
discontinue its contributions at any time and to terminate the Plan subject
to the provisions of ERISA. In the event the Plan is terminated, each
participant shall have a 100% vested interest in the balance credited to
his Company Contribution Account and the Plan's assets shall be distributed
to the participants.
-5-
<PAGE>
ADMINISTRATIVE EXPENSES - All administrative expenses, including trustee
fees, related to the operation and management of the Plan are paid by Tab
Products Co.
2. ACCOUNTING POLICIES
Company contributions are accrued annually pursuant to the terms of the
Plan. Dividend and interest income and distribution of benefits are
recorded on the accrual method of accounting.
The Plan's investments are recorded at quoted market value. Investment
transactions are accounted for on the trade date (i.e., the date the order
to buy or sell is executed).
The realized gains and losses on investments sold and the unrealized
appreciation and depreciation of investments held are reported on an
average current cost basis, based on the value of the investments at the
beginning of the Plan year or at the time of purchase during the Plan year.
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
to net assets during the reporting period. Actual results could differ
from those estimates.
-6-
<PAGE>
3. SEPARATE FUND INFORMATION
The following table presents the net assets available for Plan benefits as
of May 31, 1996 and changes in net assets available for Plan benefits for
the year then ended after allocations of accrued interest and dividends
receivable and employer contributions receivable and purchases of
investments.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
MERRIL LYNCH
--------------------------------------
GLOBAL
FIXED RETIREMENT GROWTH ALLOCATION
SHORT TERM INCOME EQUITY I EQUITY II PRESERVATION FUND FUND
FUND FUND FUND FUND TRUST CLASS A CLASS A
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Transfers from Bank of America $ - $ - $ - $ - $ 3,422,126 $ 2,983,702 $ -
Contributions:
Employee 114,646 69,407 141,938 139,923 173,935 222,923 8,343
Employer - - - - - - -
Investment income:
Realized and unrealized gains
(losses) - 85,754 462,146 354,644 (55,015) 215,747 11,857
Interest and dividends 108,261 1,485 2,021 1,869 130,099 282,413 87
------------------------------------------------------------------------------------------
Total 222,907 156,646 606,105 496,436 3,671,145 3,704,785 20,287
------------------------------------------------------------------------------------------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Employee withdrawals (297,018) (280,662) (289,426) (347,285) (224,868) (44,047) (67)
Transfers between funds (130,732) 28,888 (28,376) 107,601 (335,266) (92,430) 177,831
Transfer to Merrill Lynch (3,422,126) (1,821,557) (3,601,096) (2,983,702) - - -
-------------------------------------------------------------------------------------------
Total (3,849,876) (2,073,331) (3,918,898) (3,223,386) (560,134) (136,477) 177,764
-------------------------------------------------------------------------------------------
NET ADDITIONS
(DEDUCTIONS) (3,626,969) (1,916,685) (3,312,793) (2,726,950) 3,111,011 3,568,308 198,051
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 3,626,969 1,916,685 3,312,793 2,726,950 - - -
------------------------------------------------------------------------------------------
End of year $ - $ - $ - $ - $ 3,111,011 $ 3,568,308 $ 198,051
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
MERILL LYNCH
--------------------------
CORPORATE
BOND FUND BASIC AIM TAB
INVESTMENT VALUE EQUITY TEMPLETON PRODUCTS CO.
GRADE FUND CONSTELLATION FOREIGN COMMON
CLASS A CLASS A FUND FUND STOCK TOTAL
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Transfers from Bank of America $ 1,821,557 $ 3,601,096 $ - $ - $ - $ 11,828,481
Contributions:
Employee 84,947 195,867 50,443 15,015 117,801 1,335,188
Employer - - - - 367,872 367,872
Investment income:
Realized and unrealized gains
(losses) (81,080) 270,382 80,401 12,280 575,148 1,932,264
Interest and dividends 66,446 209,424 80 3 117,767 919,955
---------------------------------------------------------------------------------
Total 1,891,870 4,276,769 130,924 27,298 1,178,588 16,383,760
---------------------------------------------------------------------------------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Employee withdrawals (20,204) (154,443) - - (232,954) (1,890,974)
Transfers between funds (181,536) (253,980) 563,782 201,848 (57,630) -
Transfer to Merrill Lynch - - - - - (11,828,481)
---------------------------------------------------------------------------------
Total (201,740) (408,423) 563,782 201,848 (290,584) (13,719,455)
---------------------------------------------------------------------------------
NET ADDITIONS
(DEDUCTIONS) 1,690,130 3,868,346 694,706 229,146 888,004 2,664,305
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year - - - - 2,865,708 14,449,105
---------------------------------------------------------------------------------
End of year $ 1,690,130 $ 3,868,346 $ 694,706 $ 229,146 $ 3,753,712 $ 17,113,410
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE>
The following table presents the net assets available for Plan benefits as of
May 31, 1995 and changes in net assets available for Plan benefits for the year
then ended after allocations of accrued interest and dividends receivable and
employer contributions receivable and purchases of investments.
<TABLE>
<CAPTION>
SHORT FIXED TAB PRODUCTS CO.
TERM INCOME EQUITY I EQUITY II COMMON
FUND FUND FUND FUND STOCK Total
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Employee $ 314,051 $ 151,167 $ 333,014 $ 338,618 $ 132,555 $ 1,269,405
Employer 366,373 366,373
Investment income:
Realized and unrealized gains (losses) 187,326 493,342 277,460 (1,270,923) (312,795)
Interest and dividends 185,622 1,197 1,775 1,470 83,373 273,437
---------- ---------- ---------- ---------- ---------- ----------
Total 499,673 339,690 828,131 617,548 (688,622) 1,596,420
---------- ---------- ---------- ---------- ---------- ----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Employee withdrawals (238,005) (124,467) (218,687) (107,234) (244,977) (933,370)
Transfers between funds (158,595) 81,106 169,370 (76,707) (15,174) -
---------- ---------- ---------- ---------- ---------- ----------
Total (396,600) (43,361) (49,317) (183,941) (260,151) (933,370)
---------- ---------- ---------- ---------- ---------- ----------
NET ADDITIONS (DEDUCTIONS) 103,073 296,329 778,814 433,607 (948,773) 663,050
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 3,523,896 1,620,356 2,533,979 2,293,343 3,814,481 13,786,055
---------- ---------- ---------- ---------- ---------- ----------
End of year $ 3,626,969 $ 1,916,685 $ 3,312,793 $ 2,726,950 $ 2,865,708 $ 14,449,105
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
-8-
<PAGE>
4. TAXES
The Company has obtained a favorable determination letter from the Internal
Revenue Service dated March 1996 as to the qualified status of the Plan.
The Company is of the opinion that the Plan continues to fulfill the
requirements of a qualified plan under Section 401(a) of the Internal
Revenue Code and that the trust which forms a part of the Plan is not
subject to tax. Accordingly, no provision for federal or state income
taxes has been provided.
5. EXCESS EMPLOYEE CONTRIBUTIONS
Contributions in excess of amounts permitted under Internal Revenue
Service regulations of $160,606 will be returned by the Plan to certain
employees.
6. RELATED PARTY TRANSACTIONS
The Company's matching and incentive contributions may be made in Tab
Products Co. common stock or cash, which is used to purchase Tab Products
Co. common stock in the open market. Employer contributions in 1995
consisted primarily of 48,033 shares of the Company's stock. The Company
did not contribute stock in 1996.
* * * * *
-9-
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
ITEM 27a - ASSETS HELD FOR INVESTMENT PURPOSES
MAY 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FAIR
COST VALUE
<S> <C> <C>
Merrill Lynch Preservation Trust $ 2,980,171 $ 2,980,171
AIM Equity Constellation Fund 602,926 681,432
Templeton Foreign Fund 222,415 234,588
Merrill Lynch Growth Fund Class A 3,292,777 3,482,871
Merrill Lynch Global Allocation Fund Class A 186,289 198,140
Merrill Lynch Corporate Bond Fund Investment Grade Class A 1,735,544 1,682,092
Merrill Lynch Basic Value Fund Class A 3,518,795 3,833,687
------------- -------------
Subtotal 12,538,917 13,092,981
Party-In-Interest Investments -
Tab Products Co. common stock (490,044 shares) 3,190,267 3,675,331
Loans to employees (62 loans at interest rates ranging from
9.25% to 9.75%, maturing through April 12, 2011) 358,965 358,965
------------- -------------
Total $ 16,088,149 $ 17,127,277
------------- -------------
------------- -------------
</TABLE>
-10-
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
<TABLE>
<CAPTION>
SUPPLEMENTAL SCHEDULE
ITEM 27d - REPORTABLE TRANSACTIONS
YEAR ENDED MAY 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT VALUE
OF ASSET ON NET
NUMBER OF PURCHASE SELLING COST OF TRANSACTION GAIN
PARTY INVOLVED DESCRIPTION OF ASSETS TRANSACTIONS PRICE PRICE ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Retirement Preservation Trust 167 $3,701,198 N/A N/A $ 3,701,198 N/A
112 N/A $ 721,027 $ 721,027 $ 721,027 $ -
Merrill Lynch Growth Fund Class A 106 $3,759,080 N/A N/A $ 3,759,080 N/A
119 N/A $ 435,622 $ 467,937 $ 467,93 $ (32,315)
Merrill Lynch Corporate Bond Fund Investment
Grade Class A 78 $2,011,614 N/A N/A $ 2,011,614 N/A
106 N/A $ 277,448 $ 276,201 $ 276,201 $ 1,247
Merrill Lynch Basic Value Fund Class A 93 $4,073,981 N/A N/A $ 4,073,981 N/A
124 N/A $ 572,737 $ 555,770 $ 555,770 $ 16,967
Merrill Lynch Tab Products Company Common Stock 109 $1,021,333 N/A N/A $ 1,021,333 N/A
127 N/A $ 150,376 $ 191,130 $ 191,130 $ (40,754)
Bank of America Short Term Investment Fund 159 $10,192,897 N/A N/A $10,192,897 N/A
101 N/A $10,329,347 $10,329,347 $10,329,347 $ -
Bank of America Frank Russell Fixed Income Fund 8 $ 62,004 N/A N/A $ 62,004 N/A
8 N/A $ 2,039,870 $ 1,177,593 $ 1,177,593 $ 862,277
Bank of America Frank Russell Equity II Fund 6 $ 258,482 N/A N/A $ 258,482 N/A
9 N/A $ 3,284,144 $ 1,431,901 $ 1,431,901 $1,852,243
Bank of America Frank Russell Equity I Fund 7 $ 132,305 N/A N/A $ 132,305 N/A
9 N/A $ 3,847,070 $ 1,488,179 $ 1,488,179 $2,358,891
</TABLE>
-11-
