-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AuqiCmIUiOn3r/v057nW+985/iwlaaG4P9D8LbTuQZi4HVFeCkbzkL6xvi4elpTt y4MZxskRQuxrzTSLNDzTGA== 0000912057-96-013423.txt : 19960701 0000912057-96-013423.hdr.sgml : 19960701 ACCESSION NUMBER: 0000912057-96-013423 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDICAL GRAPHICS CORP /MN/ CENTRAL INDEX KEY: 0000352862 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 411316712 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09899 FILM NUMBER: 96588088 BUSINESS ADDRESS: STREET 1: 350 OAK GROVE PKWY CITY: ST PAUL STATE: MN ZIP: 55127-8599 BUSINESS PHONE: 6124844874 MAIL ADDRESS: STREET 1: 350 OAK GROVE PARKWAY CITY: ST PAUL STATE: MN ZIP: 55127-8599 11-K 1 FORM 11-K Securities and Exchange Commission Washington, D.C. 20549 FORM 11 - K (Mark One) [X] Annual Report pursuant to section 15 (d) of the Securities and Exchange act of 1934 (fee required) for the fiscal year ended December 31, 1995 or [ ] Annual Report pursuant to section 15 (d) of the Securities and Exchange Act of 1934 (no fee required) for the transition period from __________ to __________. COMMISSION FILE NUMBER 0-9899 A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: Medical Graphics Corporation 401(k) Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Medical Graphics Corporation 350 Oak Grove Parkway St. Paul, MN 55127-8599 Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Medical Graphics Corporation 401(k) Savings Plan Date June 28, 1996 \s\ Eric W. Sivertson --------------------- -------------------------------------------------- Eric W. Sivertson, President and Chief Executive Officer (Principal Executive Officer) MEDICAL GRAPHICS CORPORATION 401(k) SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS Page ---- Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . 1 Statements of Net Assets Available for Plan Benefits . . . . . . . . . . . . . 2 Statement of Changes in Net Assets Available for Plan Benefits . . . . . . . . 3 Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 5 Supplemental Schedules: Item 27(a)--Schedule of Assets Held for Investment Purposes. . . . . . . . . 8 Item 27(d)--Schedule of Reportable Transactions. . . . . . . . . . . . . . .10 Report of Independent Auditors Board of Directors Medical Graphics Corporation Medical Graphics Corporation 401(k) Savings Plan We have audited the accompanying statements of net assets available for plan benefits of the Medical Graphics Corporation 401(k) Savings Plan as of December 31, 1995 and 1994, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1995. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1995 and 1994, and the changes in its net assets available for plan benefits for the year ended December 31, 1995, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1995, and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our 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. Ernst & Young LLP Minneapolis, Minnesota June 26, 1996 1 Medical Graphics Corporation 401(k) Savings Plan Statements of Net Assets Available for Plan Benefits
DECEMBER 31 1995 1994 ------------------------- ASSETS Cash and cash equivalents $ 17,327 $ 20,799 Investments at fair value (NOTE 2): Common stocks 1,513,500 1,004,203 Guaranteed interest accounts 536,600 461,279 Pooled separate accounts 736,656 443,091 Medical Graphics Corporation Common Stock 22,249 24,481 Participant loans (NOTE 4) 59,794 54,709 ------------------------- 2,868,799 1,987,763 Contributions and other receivables 16,384 20,290 ------------------------- Net assets available for plan benefits $2,902,510 $2,028,852 ------------------------- -------------------------
SEE ACCOMPANYING NOTES. 2 Medical Graphics Corporation 401(k) Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1995
COMMON ------------------------ STOCKS - KOPP INTER- INVESTMENT GUARANTEED U.S. NATIONAL PORTFOLIO INTEREST STOCKS STOCKS ------------------------------------------------------- Net assets available for plan benefits $1,030,745 $467,064 $344,484 $38,362 at January 1, 1995 Additions: Contributions from employer 29,854 19,565 11,195 8,999 Employee contributions 115,002 101,365 57,827 38,733 Rollover contributions 4,730 8,132 - - Loan payments 6,761 8,164 2,150 692 Net investment income (loss) 391,974 32,069 117,043 9,256 Forfeitures 3,727 3,436 1,439 656 ------------------------------------------------------- 552,048 172,731 189,654 58,336 Deductions: New loans (13,554) (17,397) (2,976) - Benefit payments (34,130) (49,941) (9,743) (2,396) Administrative and loan expenses - (651) (421) (42) ------------------------------------------------------- (47,684) (67,989) (13,140) (2,438) Investment transfers (12,674) 2,773 (28,361) (16,230) ------------------------------------------------------- Net additions (deductions) 491,690 107,515 148,153 39,668 ------------------------------------------------------- Net assets available for plan benefits at December 31, 1995 $1,522,435 $574,579 $492,637 $78,030 ------------------------------------------------------- -------------------------------------------------------
SEE ACCOMPANYING NOTES. 3
POOLED SEPARATE ACCOUNTS - ------------------------------------------------------- MEDICAL BOND GRAPHICS EMPHASIS CORPORATION BALANCED MONEY STOCK BOND AND COMMON PARTICIPANT ACCOUNT MARKET INDEX MORTGAGE STOCK LOANS TOTAL - ---------------------------------------------------------------------------------------------------- $28,925 $27,254 $10,795 $1,095 $25,419 $54,709 $2,028,852 1,933 1,316 593 - 1,118 - 74,573 7,133 6,810 2,109 65 4,020 - 333,064 4,731 - - - - - 17,593 446 189 - - 110 (14,749) 3,763 6,641 3,681 3,813 120 (3,075) - 561,522 174 898 193 - 49 - 10,572 - ---------------------------------------------------------------------------------------------------- 21,058 12,894 6,708 185 2,222 (14,749) 1,001,087 - (974) - - - 34,901 - (3,982) (10,942) - - (61) (15,067) (126,262) (15) (35) (2) (1) - - (1,167) - ---------------------------------------------------------------------------------------------------- (3,997) (11,951) (2) (1) (61) 19,834 (127,429) 5,422 58,516 (3,895) (576) (4,975) - - - ---------------------------------------------------------------------------------------------------- 22,483 59,459 2,811 (392) (2,814) 5,085 873,658 - ---------------------------------------------------------------------------------------------------- $51,408 $86,713 $13,606 $ 703 $22,605 $59,794 $2,902,510 - ---------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------
4 Medical Graphics Corporation 401(k) Savings Plan Notes to Financial Statements Year ended December 31, 1995 1. PLAN DESCRIPTION GENERAL The Medical Graphics Corporation 401(k) Savings Plan (the Plan) was established on October 1, 1986 and was subsequently restated on January 1, 1989 and July 1, 1991. The Plan is a contributory defined contribution plan covering substantially all employees of Medical Graphics Corporation (the Company). Each employee who elects to become a member of the Plan may authorize a deduction of up to 17% of their gross earnings as contributions to the Plan. The participant has the option of having the funds invested in equity, short-term investment funds or a combination thereof. The Company matches 25% of the employee contributions up to 6% of the employee's gross earnings. Contributions are credited to the individual accounts of the participants. Employee contributions are 100% vested at all times. Discretionary and employer- matching contributions become 100% vested after five years of service, with staggered vesting percentages prior to that time. Information about the Plan Agreement, including vesting provisions, is contained in the MEDICAL GRAPHICS CORPORATION 401(K) SAVINGS PLAN DESCRIPTION, which can be obtained from the Company. ADMINISTRATION The Plan is sponsored and administered by the Company and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Administrative expenses are taken out of the assets of the Plan and allocated to the participants' accounts. 5 Medical Graphics Corporation 401(k) Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING METHOD The accounting records of the Plan are maintained on the accrual basis. INVESTMENT VALUATION Investments are stated at current market value. Brokers' commissions incurred upon the purchase of securities are included in the cost of the securities. Securities traded on a national securities exchange are valued at the last reported sales price on the last day of the year. Securities transactions are recognized on the trade date (date the order to buy or sell is executed). Dividend income is recognized on the ex-dividend date and interest income is accrued as earned. The cost of securities sold is determined using the average cost method. Cash and cash equivalents consist primarily of deposits in short-term investment funds. 3. INVESTMENTS The Plan's investments are held by its trustees. The current value of individual investments that represent 5% or more of plan assets is as follows:
DECEMBER 31 1995 1994 ----------------------- Principal Mutual Life Insurance Co.: Guaranteed Interest Account $536,600 $461,279 U.S. Stock Account 490,166 340,847 Picturetel Corp. common stock 172,500 48,000 Tellabs Inc. common stock 111,000 111,500 Stratacom Inc. common stock 36,750 105,000
6 Medical Graphics Corporation 401(k) Savings Plan Notes to Financial Statements (continued) 4. LOANS TO PARTICIPANTS Under the Plan Agreement, a participant may borrow a portion of his or her vested benefits from the Plan. The number of outstanding loans per participant is limited to one. Loan amounts are limited to the lesser of: a) $50,000, reduced by the highest outstanding loan balance of loans during the one-year period ending on the day before the new loan is made; or b) The greater of 1) or 2), reduced by 3) below: 1) 1/2 of the Participant's Vested Account 2) $10,000 3) Any outstanding loan balance on the date the new loan is made and are collateralized by the Participant's Vested Account. As of December 31, 1995, $59,794 of loans are outstanding bearing interest ranging from 7.00% to 8.75% annually and payable from 2 1/2 to 5 years. 5. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time. Upon termination, all amounts in participants' accounts will be 100% vested. 6. FEDERAL INCOME TAX STATUS The Internal Revenue Service has ruled that the Plan qualifies under Section 401(a) of the Internal Revenue Code (IRC) and is, therefore, not subject to tax under present income tax laws. The most recent determination by the Internal Revenue Service that the Plan is a qualified plan under the Internal Revenue Code is dated July 27, 1993. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Pension Administrative Committee is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 7 Schedule 1 Medical Graphics Corporation 401(k) Savings Plan Item 27(a)--Schedule of Assets Held for Investment Purposes December 31, 1995
NAME OF ISSUER, BORROWER DESCRIPTION OF CURRENT OR SIMILAR PARTY INVESTMENT COST VALUE - ------------------------------------------------------------------------------------- KOPP Investment Portfolio: Common stocks: 3 Com Corporation 2,500 shares $ 36,761 $ 116,563 ADC Telecommunications 2,000 shares 26,308 73,000 Aseco Corp. 1,000 shares 15,205 16,500 BBN Corp. 2,500 shares 34,388 102,813 Cincinnati Microwave 2,500 shares 18,832 11,250 Computer Network Tech Corp. 4,000 shares 27,280 18,000 Cornerstone Imaging Inc. 2,500 shares 39,262 36,250 DSC Communications 2,000 shares 4,810 73,750 Dallas Semiconductor 2,000 shares 30,660 41,500 Digital Microwave Corp. 2,500 shares 21,737 25,000 EMPI Inc. 3,400 shares 36,633 86,700 FTP Software Inc. 1,200 shares 32,046 34,800 Global Village Comm. 700 shares 15,281 13,562 Integrated Micro Prods PLC Spons ADR 1500 shares 22,620 27,750 Itron Inc. 2,000 shares 52,660 67,500 Level One Communications Inc. 2,500 shares 37,952 45,000 Network Equipment 2,000 shares 16,640 54,750 Technologies Norand Corp. 2,000 shares 52,796 23,500 Octel Communications 1,500 shares 35,620 48,375 Picturetel Corp. 4,000 shares 35,949 172,500 Stac Inc. 3,000 shares 29,460 43,125 Stanford Telecommunications 1,500 shares 30,495 33,375 Stratacom Inc. 500 shares 4,431 36,750 Summa Four Inc. 3,000 shares 60,365 40,125 Techne Corp. 1,000 shares 10,820 20,125 Telco Systems Inc. 2,000 shares 16,515 21,250 Tellabs Inc. 3,000 shares 10,932 111,000 Verifone Inc. 1,500 shares 36,120 42,937 Vitesse Semiconductor 4,000 shares 47,411 51,000 Xircom 2,000 shares 37,435 24,750 ------------------------- 877,424 1,513,500
8 Schedule 1 Medical Graphics Corporation 401(k) Savings Plan Item 27(a)--Schedule of Assets Held for Investment Purposes (continued)
NAME OF ISSUER, BORROWER DESCRIPTION OF OR SIMILAR PARTY INVESTMENT COST FAIR VALUE - ------------------------------------------------------------------------------------- The Principal Mutual Life Insurance Co.: Guaranteed interest Trustee's general account invested mostly in private placement bonds and commercial and residential mortgages $ 536,600 $ 536,600 Pooled separate account: U.S. stocks Investments in U.S. securities, mainly 348,833 490,166 common stocks International stocks Investments in common stock of corporations located outside of U.S. 70,070 76,597 Bond emphasis balanced Investments in other account separate accounts of 44,777 50,576 the trustee Money market Investments in money market instruments 100,896 105,091 Stock index Investments in the common stock of firms included in the Standards & Poor's 500 9,871 13,523 Stock Index Bond and mortgage Investments in intermediate-term fixed-income loans 594 703 ---------------------------- 1,111,641 1,273,256 Participant Loans Interest from 7.00% to 8.75%, maturing from - 59,794 1996 to 2000 Corporate Stock: Medical Graphics Corporation* 4,394 shares 11,147 22,249 ---------------------------- Total investments held $2,000,212 $2,868,799 ---------------------------- ----------------------------
*Indicates party-in-interest to the Plan. 9 Medical Graphics Corporation 401(k) Savings Plan Item 27(d)--Schedule of Reportable Transactions Year ended December 31, 1995 CATEGORY (I) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
CURRENT VALUE ON IDENTITY OF PARTY DESCRIPTION OF PURCHASE SELLING COST OF TRANSACTION NET GAIN INVOLVED TRANSACTION PRICE PRICE ASSET DATE OR (LOSS) The Principal Mutual Sale of investments Life Insurance in Guaranteed Company Interest Account $109,012 $109,012 - CATEGORY (III) - SERIES OF SECURITIES TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS CURRENT VALUE ON ASSET IDENTITY OF PARTY DESCRIPTION OF PURCHASE SELLING COST OF TRANSACTION NET GAIN INVOLVED TRANSACTION PRICE PRICE ASSET DATE OR (LOSS) The Principal Mutual Guaranteed Interest Life Insurance Account--75 transactions $230,323 - $230,323 $230,323 - Company Guaranteed Interest Account--48 transactions $186,881 186,881 186,881 - U.S. Stocks (Pooled Separate Account)--74 transactions 89,102 - 89,102 89,102 - U.S. Stocks (Pooled Separate Account)-- 32 transactions 57,113 57,113 57,113 - Money Market (Pooled Separate Account)-- 67 transactions 99,435 - 99,435 99,435 - Money Market (Pooled Separate Account)-- 25 transactions 23,343 23,343 23,343 -
There were no category (ii) and (iv) reportable transactions for 1995. 10 EX-23.1 2 CONSENT OF IND. AUDITORS Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-64430) pertaining to the Medical Graphics Corporation 401(k) Savings Plan of our report dated June 26, 1996, with respect to the financial statements and schedules of Medical Graphics Corporation 401(k) Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1995. Ernst & Young LLP Minneapolis, Minnesota June 26, 1996 -----END PRIVACY-ENHANCED MESSAGE-----