<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, 1998
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 16 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 23, 1998
<PAGE>
- ------------------------------------------------------------------------------
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED MAY 31, 1998 AND 1997,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED MAY 31, 1998 AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
MAY 31, 1998 AND 1997:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
MAY 31, 1998:
Item 27a - Schedule of Assets Held for Investment Purposes 10
Item 27d - Schedule of Reportable Transactions 11
<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 benefits
of TAB Products Co. Tax Deferred Savings Plan (the "Plan") as of May 31, 1998
and 1997, and the related statements of changes in net assets available for
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 benefits as of May 31, 1998 and
1997, and the changes in net assets available for 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 assets held
for investment purposes and reportable transactions 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 supplemental
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1998 financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.
September 25, 1998
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
MAY 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1998 1997
<S> <C> <C>
ASSETS:
Cash $ 2,767
Investments, at fair value:
Merrill Lynch:
Retirement Preservation Trust $ 2,746,749 3,003,008
Growth Fund Class A 4,433,685 4,042,158
Global Allocation Fund Class A 240,607 128,924
Corporate Bond Fund Investment Grade Class A 1,724,763 1,672,489
Basic Value Fund Class A 5,488,640 4,250,511
AIM Equity Constellation Fund 1,188,965 985,672
Templeton Foreign Fund 382,419 263,974
Tab Products Co. Common Stock 6,962,647 4,608,852
Loans to employees 627,166 499,820
----------- -----------
Total investments 23,795,641 19,455,408
----------- -----------
Receivables:
Accrued interest and dividends receivable 4,985 27,966
Employee contributions receivable 57,586 59,707
Employer contributions receivable 17,148 18,330
----------- -----------
Total receivables 79,719 106,003
----------- -----------
Total assets 23,875,360 19,564,178
----------- -----------
LIABILITIES - Excess contributions payable 7,298
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $23,875,360 $19,556,880
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
-2-
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED MAY 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1998 1997
<S> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE FOR
BENEFITS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 3,537,305 $ 1,992,456
Interest and dividends 1,265,240 1,048,022
Contributions:
Employee 1,560,822 1,521,706
Employer 463,659 445,465
----------- -----------
Total additions 6,827,026 5,007,649
DEDUCTIONS FROM NET ASSETS AVAILABLE
FOR BENEFITS ATTRIBUTED TO -
Participant distributions 2,508,546 2,564,179
----------- -----------
Net increase 4,318,480 2,443,470
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 19,556,880 17,113,410
----------- -----------
End of year $23,875,360 $19,556,880
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
-3-
<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED MAY 31, 1998 AND 1997
- ------------------------------------------------------------------------------
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 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 Company 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 1998 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 thereon. 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. However, if a collective bargaining unit is
-4-
<PAGE>
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:
<TABLE>
<CAPTION>
YEARS OF SERVICE FOR PERCENTAGE
VESTING PURPOSES VESTED
<S> <C>
Less than 2 years 0%
2 years 25%
3 years 50%
4 years 75%
5 years 100%
</TABLE>
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 per 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 per 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 per 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. As of May 31, 1998, there were 108 such
loans outstanding with interest rates ranging from 9.25% to 9.75%.
PLAN TERMINATION - Although the Company 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 the
Company.
2. ACCOUNTING POLICIES
BASIS OF PRESENTATION - The accompanying financial statements of the Plan
are prepared using the accrual basis of accounting
INVESTMENT VALUATION AND INCOME RECOGNITION - Investments are stated at
quoted market price. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of shares held
by the Plan at year-end. Participant loans are stated at amortized cost,
which approximates fair value.
Purchase and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
BENEFITS PAYMENTS to participants are recorded when paid.
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 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 changes in
net assets available for benefits during the reporting period. Actual
results could differ from those estimates.
RECLASSIFICATIONS - Certain items in these financial statements have been
reclassified to conform to the current period presentation.
-6-
<PAGE>
3. SEPARATE FUND INFORMATION
The following table presents the statement of changes in net assets
available for benefits for the year ended May 31, 1998.
<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 AVAILABLE
FOR
BENEFITS ATTRIBUTED TO:
Investment income (loss):
Interest and dividends $ 172,474 $ 356,219 $ 22,152 $ 109,507 $ 370,305
Net appreciation (depreciation) in fair value
of investments 17,367 (2,937) 54,965 863,239
Contributions:
Employee 177,538 469,960 59,855 117,485 380,636
Employer 913 3,118 863 968 1,401
---------- ---------- -------- ---------- ----------
Total additions 350,925 846,664 79,933 282,925 1,615,581
---------- ---------- -------- ---------- ----------
DEDUCTIONS FROM NET ASSETS AVAILABLE
FOR BENEFITS ATTRIBUTED TO -
Participant distributions 454,038 467,797 22,150 161,172 464,772
---------- ---------- -------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS (103,113) 378,867 57,783 121,753 1,150,809
INTERFUND TRANSFERS - Net (155,313) 13,142 54,667 (70,027) 91,061
---------- ---------- -------- ---------- ----------
NET INCREASE (DECREASE) (258,426) 392,009 112,450 51,726 1,241,870
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 3,017,349 4,058,397 130,751 1,677,343 4,261,505
---------- ---------- -------- ---------- ----------
End of year $2,758,923 $4,450,406 $243,201 $1,729,069 $5,503,375
---------- ---------- -------- ---------- ----------
---------- ---------- -------- ---------- ----------
</TABLE>
CONTINUED.....
<TABLE>
<CAPTION>
AIM TAB
EQUITY TEMPLETON PRODUCTS CO.
CONSTELLATION FOREIGN COMMON LOANS TO
FUND FUND STOCK EMPLOYEES TOTAL
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE
FOR
BENEFITS ATTRIBUTED TO:
Investment income (loss):
Interest and dividends $ 81,185 $ 33,523 $ 73,131 $ 46,744 $ 1,265,240
Net appreciation (depreciation) in fair value
of investments 74,842 (20,500) 2,550,329 3,537,305
Contributions:
Employee 194,937 69,725 90,686 1,560,822
Employer 926 34 455,436 463,659
------------ --------- ----------- ----------- ------------
Total additions 351,890 82,782 3,169,582 46,744 6,827,026
------------ --------- ----------- ------------ ------------
DEDUCTIONS FROM NET ASSETS AVAILABLE
FOR BENEFITS ATTRIBUTED TO -
Participant distributions 91,575 24,116 754,519 68,407 2,508,546
------------ --------- ----------- ------------ ------------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS 260,315 58,666 2,415,063 (21,663) 4,318,480
INTERFUND TRANSFERS - Net (55,790) 61,443 (88,192) 149,009 --
------------ --------- ----------- ------------ ------------
NET INCREASE (DECREASE) 204,525 120,109 2,326,871 127,346 4,318,480
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 991,597 265,163 4,654,955 499,820 19,556,880
------------ --------- ----------- ------------ ------------
End of year $ 1,196,122 $ 385,272 $ 6,981,826 $ 627,166 $ 23,875,360
------------ --------- ----------- ------------ ------------
------------ --------- ----------- ------------ ------------
</TABLE>
-7-
<PAGE>
The following table presents the statement of changes in net assets
available for benefits for the year ended May 31, 1997.
<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 AVAILABLE
FOR
BENEFITS ATTRIBUTED TO:
Investment income (loss):
Interest and dividends $ 175,745 $ 294,993 $ 23,109 $ 109,472 $ 270,308
Net appreciation (depreciation)
in fair value of
Investments 445,981 5,396 7,450 555,289
Contributions:
Employee 216,151 454,116 38,240 130,975 337,980
Employer
----------- ----------- ----------- ----------- -----------
Total additions 391,896 1,195,090 66,745 247,897 1,163,577
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS AVAILABLE
FOR BENEFITS ATTRIBUTED TO -
Participant distributions 443,729 625,423 144,884 106,851 591,361
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS (51,833) 569,667 (78,139) 141,046 572,216
INTERFUND TRANSFERS - Net 53,551 39,747 10,663 (128,118) (111,605)
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 1,718 609,414 (67,476) 12,928 460,611
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 3,015,631 3,448,983 198,227 1,664,415 3,800,894
----------- ----------- ----------- ----------- -----------
End of year $3,017,349 $4,058,397 $ 130,751 $1,677,343 $4,261,505
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
CONTINUED.....
<TABLE>
<CAPTION>
AIM TAB
EQUITY TEMPLETON PRODUCTS CO.
CONSTELLATION FOREIGN COMMON LOANS TO
FUND FUND STOCK EMPLOYEES TOTAL
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE
FOR
BENEFITS ATTRIBUTED TO:
Investment income (loss):
Interest and dividends $ 29,335 $ 10,221 $ 97,315 $ 37,524 $ 1,048,022
Net appreciation (depreciation)
in fair value of
Investments 28,401 29,076 920,863 1,992,456
Contributions:
Employee 188,881 51,147 104,216 1,521,706
Employer 445,465 445,465
----------- ----------- ----------- ----------- -----------
Total additions 246,617 90,444 1,567,859 37,524 5,007,649
----------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS AVAILABLE
FOR BENEFITS ATTRIBUTED TO -
Participant distributions 36,266 50,087 484,208 81,370 2,564,179
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS 210,351 40,357 1,083,651 (43,846) 2,443,470
INTERFUND TRANSFERS - Net 104,242 (4,345) (148,836) 184,701 --
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 314,593 36,012 934,815 140,855 2,443,470
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 677,004 229,151 3,720,140 358,965 17,113,410
----------- ----------- ----------- ----------- -----------
End of year $ 991,597 $ 265,163 $4,654,955 $ 499,820 $19,556,880
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
-8-
<PAGE>
4. TAX STATUS
The Company has obtained its latest determination letter in March 1996 in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable sections of the Internal Revenue
Code ("IRC"). The Company believes that the Plan is designed, and is
currently being operated, in compliance with the applicable requirements
of the IRC. Therefore, no provision for income taxes has been included in
the Plan's financial statements.
5. PARTY IN INTEREST 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, as of May 31, 1998 and
1997, invested in 476,078 and 488,381 shares, respectively, of TAB
Products Co. Common Stock. The Company had net sales of 12,303 such
shares during fiscal 1998.
******
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
<TABLE>
<CAPTION>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
MAY 31, 1998
- ---------------------------------------------------------------------------------------------------
SHARES/
UNITS COST FAIR VALUE
<S> <C> <C> <C>
Merrill Lynch:
Retirement Preservation Trust 2,746,749 $ 2,746,749 $ 2,746,749
Growth Fund Class A 157,839 3,993,166 4,433,685
Global Allocation Fund Class A 15,945 237,359 240,607
Corporate Bond Fund Investment Grade Class A 149,460 1,708,748 1,724,763
Basic Value Fund Class A 131,907 4,005,692 5,488,640
AIM Equity Constellation Fund 41,557 1,056,002 1,188,965
Templeton Foreign Fund 36,009 378,614 382,419
Tab Products Co. Common Stock 476,078 2,344,558 6,962,647
Loans to employees (108 loans at interest
rates ranging from 9.25% to 9.75%, maturing
through May 1, 2013) 627,166 627,166
------------ ------------
Total $ 17,098,054 $ 23,795,641
------------ ------------
------------ ------------
</TABLE>
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<PAGE>
TAB PRODUCTS CO. TAX DEFERRED SAVINGS PLAN
<TABLE>
<CAPTION>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED MAY 31, 1998
CURRENT VALUE
NUMBER OF HISTORICAL OF ASSET ON
TRANSACTIONS PURCHASE SELLING COST OF TRANSACTION NET
PARTY INVOLVED DESCRIPTION OF ASSETS PURCHASES SALES PRICE PRICE ASSET DATE GAIN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Growth Fund Class A 187 171 $1,225,236 $801,709 $666,500 $ 801,709 $135,209
Merrill Lynch Basic Value Fund Class A 188 156 $1,129,568 $743,965 $566,246 $ 743,965 $177,719
</TABLE>
-11-
<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 25,
1998, appearing in this Annual Report on Form 11-K of the TAB Products Co.
Tax Deferred Savings Plan for the year ended May 31, 1998.
Deloitte & Touche LLP
San Jose, California
November 23, 1998
