<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, 1997
Commission File No. 33-62357
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>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
MAY 31, 1997 AND 1996
- --------------------------------------------------------------------------------
ASSETS 1997 1996
CASH $ 2,767 $ 46,152
INVESTMENTS, at fair value (Note 3):
Tab Products Co. Common Stock 4,608,852 3,675,331
Merrill Lynch:
Retirement Preservation Trust 3,003,008 2,980,171
Growth Fund Class A 4,042,158 3,482,871
Global Allocation Fund Class A 128,924 198,140
Corporate Bond Fund Investment Grade Class A 1,672,489 1,682,092
Basic Value Fund Class A 4,250,511 3,833,687
AIM Equity Constellation Fund 985,672 681,432
Templeton Foreign Fund 263,974 234,588
----------- -----------
Total investments 18,955,588 16,768,312
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 27,966 26,686
EMPLOYEE CONTRIBUTIONS RECEIVABLE 59,707 57,392
EMPLOYER CONTRIBUTIONS RECEIVABLE 18,330 16,509
LOANS TO EMPLOYEES 499,820 358,965
----------- -----------
Total assets 19,564,178 17,274,016
LIABILITIES
EXCESS EMPLOYEE CONTRIBUTIONS (7,298) (160,606)
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $19,556,880 $17,113,410
----------- -----------
----------- -----------
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, 1997 AND 1996
- --------------------------------------------------------------------------------
1997 1996
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Employee contributions $ 1,521,706 $ 1,335,188
Employer contributions 445,465 367,872
Investment income:
Net appreciation in fair value of investments 1,992,456 1,932,264
Interest and dividends 1,048,022 919,955
----------- -----------
Total additions 5,007,649 4,555,279
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO -
Employee withdrawals (2,564,179) (1,890,974)
----------- -----------
Net additions 2,443,470 2,664,305
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 17,113,410 14,449,105
----------- -----------
End of year $19,556,880 $17,113,410
----------- -----------
----------- -----------
See notes to financial statements.
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 AND 1996
- --------------------------------------------------------------------------------
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
trusteed plan that 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.
On May 29, 1956, the Company established the TAB Products Co. Profit
Sharing Plan and Trust (the Profit Sharing Plan). On January 1, 1974, the
Profit Sharing Plan was superseded by the TAB Products Co. Incentive Thrift
Plan (the Incentive Thrift Plan). On October 1, 1984, the Incentive Thrift
Plan was replaced by this Plan. The assets held in the Profit Sharing Plan
as of January 1, 1974, and all subsequent earnings thereon, are held in
accounts under this Plan that are separate from the other accounts under
this Plan. The assets held in the Incentive Thrift Plan as of October 1,
1984, and all subsequent earnings thereon, also are held in accounts under
this Plan that are separate from the other accounts under this Plan.
CONTRIBUTIONS TO THE PLAN - Plan participants may contribute 1% to 15% of
their compensation to the Plan as a tax deferred savings contribution. The
Company will make a matching contribution of 50% of a participant's tax
deferred savings contribution, but not in excess of 2% of the participant's
compensation. In addition to the matching contribution, the Company will
make an incentive contribution equal to a percentage of the matching
contribution for each participant if the Company's net profits (as defined
in the Plan) exceed 5% of the Company's revenues for the Plan year.
Tax deferred savings contributions are withheld from compensation earned
throughout the Plan year, and along with matching contributions, are
remitted to the Plan trustee semi-monthly. The incentive contributions for
a Plan year, if any, are remitted to the Plan trustee no later than the
filing date for the Company's federal income tax return. Tax deferred
savings contributions are made in cash. Participants may direct the
investment of their tax deferred savings contributions among several mutual
funds and a Company stock fund. Matching and incentive contributions may
be made in cash or in Company stock, as the Company decides. Any cash
matching and/or incentive contributions are invested as the Company
directs. Employer contributions in 1996 and 1997 were made in cash.
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.
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<PAGE>
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. However, 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 amount of such forfeitures is
applied against the Company's matching and incentive contribution, if any,
to the Plan. Employees' contributions to the Plan are fully vested at all
times.
PLAN BENEFITS - When a participant's employment terminates, he or she is
eligible to receive the vested balance of all his or her accounts under the
Plan; the unvested balance is forfeited. Regardless of the investments in
the participant's tax deferred savings account, distribution from all
accounts is made in Company stock and/or cash only.
During employment, participants who are fully vested and at least age 59 1/2
may withdraw all or a portion of the balances in their accounts under the
Plan, once a Plan year. Participants who have accounts under the Plan
holding assets of the Incentive Thrift Plan may withdraw part or all of
the balance in such accounts while still employed, once a Plan year.
A participant also may withdraw up to 50% of the vested balance of his
or her Company Contributions Account while still employed, once a Plan
year, provided that the amount to be withdrawn does not exceed the total
Company contributions made for the participant more than two years
prior to the date of the withdrawal. Finally, a participant who has a
financial hardship (as defined in the Plan) while employed may withdraw
some or all of the vested balances of all his or her accounts under the
Plan.
LOANS TO EMPLOYEES - Participants may borrow up to 50% of their vested
account balances, up to a maximum loan of $50,000. Loan terms generally
range from one to five years, but may be up to 15 years in certain
circumstances. The loans are secured by the participants' account
balances. The loans bear interest at a rate equal to 1% above the prime
rate as published in the WALL STREET JOURNAL as of the first day of the
month in which the loan is made.
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.
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<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.
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<PAGE>
3. SEPARATE FUND INFORMATION
The following table presents the net assets available for Plan benefits as
of May 31, 1997 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>
MERRILL LYNCH
------------------------------------------------------------------------
CORPORATE
GLOBAL BOND FUND BASIC
RETIREMENT GROWTH ALLOCATION INVESTMENT VALUE
PRESERVATION FUND FUND GRADE FUND
TRUST CLASS A CLASS A CLASS A CLASS A
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Employee $ 216,151 $ 454,116 $ 38,240 $ 130,975 $ 337,980
Employer
Investment income:
Realized and unrealized gains (losses) 445,981 5,396 7,450 555,289
Interest and dividends 183,029 307,157 24,109 112,543 279,116
---------- ---------- -------- ---------- ----------
Total 399,180 1,207,254 67,745 250,968 1,172,385
---------- ---------- -------- ---------- ----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Employee withdrawals (344,858) (541,018) (126,416) (217,368) (676,944)
---------- ---------- -------- ---------- ----------
NET ADDITIONS (DEDUCTIONS) 54,322 666,236 (58,671) 33,600 495,441
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 3,111,011 3,568,308 198,051 1,690,130 3,868,346
---------- ---------- -------- ---------- ----------
End of year $3,165,333 $4,234,544 $139,380 $1,723,730 $4,363,787
---------- ---------- -------- ---------- ----------
---------- ---------- -------- ---------- ----------
<CAPTION>
AIM TAB
EQUITY TEMPLETON PRODUCTS CO.
CONSTELLATION FOREIGN COMMON
FUND FUND STOCK TOTAL
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions:
Employee $ 188,881 $ 51,147 $ 104,216 $ 1,521,706
Employer 445,465 445,465
Investment income:
Realized and unrealized gains (losses) 28,401 29,076 920,863 1,992,456
Interest and dividends 30,713 11,177 100,178 1,048,022
---------- ---------- ---------- -----------
Total 247,995 91,400 1,570,722 5,007,649
---------- ---------- ---------- -----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO -
Employee withdrawals 76,620 (49,099) (685,096) (2,564,179)
---------- ---------- ---------- -----------
NET ADDITIONS (DEDUCTIONS) 324,615 42,301 885,626 2,443,470
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 694,706 229,146 3,753,712 17,113,410
---------- ---------- ---------- ----------
End of year $1,019,321 $ 271,447 $4,639,338 $19,556,880
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
</TABLE>
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<PAGE>
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>
MERRILL 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
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
MERRILL 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
<S> <C> <C> <C> <C> <C> <C>
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>
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<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 $7,298 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. The Plan has, at May 31, 1997 and
1996, invested in 488,381 and 490,044 shares, respectively, of TAB Products
Co. common stock. The Company did not contribute stock in 1997 and 1996.
* * * * *
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
ITEM 27a - ASSETS HELD FOR INVESTMENT PURPOSES
MAY 31, 1997
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<TABLE>
<CAPTION>
FAIR
SHARES/UNITS COST VALUE
<S> <C> <C> <C>
Merrill Lynch Preservation Trust 3,003,008 units $ 3,003,008 $ 3,003,008
AIM Equity Constellation Fund 37,308 units 950,256 985,672
Templeton Foreign Fund 23,696 units 238,934 263,974
Merrill Lynch Growth Fund Class A 144,776 units 3,646,950 4,042,158
Merrill Lynch Global Allocation Fund Class A 8,334 units 123,313 128,924
Merrill Lynch Corporate Bond Fund Investment Grade Class A 149,730 units 1,666,487 1,672,489
Merrill Lynch Basic Value Fund Class A 121,652 units 3,714,242 4,250,511
------------ ------------
Subtotal 13,343,190 14,346,736
Party-In-Interest Investments -
Tab Products Co. common stock 3,952,768 4,608,852
Loans to employees (93 loans at interest rates ranging from
9.25% to 9.75%, maturing through June 8, 2012) 488,381 shares 499,820 499,820
------------ ------------
Total $ 17,795,778 $ 19,455,408
------------ ------------
------------ ------------
</TABLE>
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
ITEM 27d - REPORTABLE TRANSACTIONS
YEAR ENDED MAY 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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 Growth Fund Class A 157 $ 1,072,101 N/A N/A $ 1,072,101 N/A
177 N/A $ 790,595 $ 727,183 $ 727,183 $ 63,412
</TABLE>
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<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,
1997 and 1996, 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, 1997 and
1996, 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, 1997, and (2) reportable transactions
for the year ended May 31, 1997, 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 1997 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
September 5, 1997
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<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 26, 1997
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<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No. 33-62357 of TAB Products Co. on Form S-8 of our report dated September 5,
1997, appearing in this Annual Report on Form 11-K of the TAB Products Co.
Tax Deferred Savings Plan for the year ended May 31, 1997.
DELOITTE & TOUCHE LLP
San Jose, California
November 21, 1997
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