Table of Contents
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
For the fiscal year ended December 31, 2000
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from ____ to ____
Commission File Number: 0-20842
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
PLATO LEARNING, INC. SAVINGS/RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
PLATO Learning, Inc.
10801 Nesbitt Avenue South
Bloomington, MN 55437
This document contains 13 pages.
Table of Contents
INDEX
Report of Independent Public Accountants | 3 | |||
Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 | 4 | |||
Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2000 and 1999 | 5 | |||
Notes to Financial Statements and Schedule | 6 | |||
Consent of Independent Public Accountants | 11 | |||
Schedule of Assets Held for Investment Purposes at End of Year as of December 31, 2000 | 12 | |||
Signatures | 13 |
Table of Contents
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Plato Learning, Inc. Savings/Retirement Plan:
We have audited the accompanying statements of net assets available for benefits of the PLATO LEARNING, INC. SAVINGS/RETIREMENT PLAN as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the years ended December 31, 2000, and 1999. 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 auditing standards generally accepted in the United States. 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, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2000 and 1999, and the changes in net assets available for benefits for the years ended December 31, 2000 and 1999, in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes at end of year is presented for purposes of additional analysis and is not a required part of the basic financial statements, but is 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. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois
June 25, 2001
3
Table of Contents
PLATO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 2000 and 1999
(Employer Identification Number 41-1646390, Plan Number 001)
2000 | 1999 | ||||||||
INVESTMENTS (Note 2): | |||||||||
Investments, at fair value | $ | 7,289,869 | $ | 5,924,549 | |||||
NET ASSETS AVAILABLE FOR BENEFITS | $ | 7,289,869 | $ | 5,924,549 | |||||
The accompanying notes are an integral part of these statements.
4
Table of Contents
PLATO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended December 31, 2000 and 1999
(Employer Identification Number 41-1646390, Plan Number 001)
2000 | 1999 | |||||||||
ADDITIONS: | ||||||||||
Participant contributions | $ | 1,225,483 | $ | 995,768 | ||||||
Company contributions | 114,654 | 58,620 | ||||||||
Net appreciation in fair value of investments | 9,258 | 293,464 | ||||||||
Interest and dividend income | 574,932 | 314,091 | ||||||||
Total additions | 1,924,327 | 1,661,943 | ||||||||
DEDUCTIONS: | ||||||||||
Benefits paid | 558,607 | 718,410 | ||||||||
Other administrative expense | 400 | — | ||||||||
Total deductions | 559,007 | 718,410 | ||||||||
Net increase | 1,365,320 | 943,533 | ||||||||
NET ASSETS AVAILABLE FOR BENEFITS: | ||||||||||
Beginning of year | 5,924,549 | 4,981,016 | ||||||||
End of year | $ | 7,289,869 | $ | 5,924,549 | ||||||
The accompanying notes are an integral part of these statements.
5
Table of Contents
PLATO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
December 31, 2000 and 1999
(Employer Identification Number 41-1646390, Plan Number 001)
1. DESCRIPTION OF PLAN
A brief description of the Plato Learning, Inc. (the “Company”) Savings/Retirement Plan (the “Plan”) is provided for general informational purposes only. Participants should refer to the Plan document for a more complete description of the Plan’s provisions. | |||
General | |||
The Plan is a defined contribution plan covering all eligible employees of the Company. Employees of the Company must complete 90 days of service to be eligible to participate in the Plan. The Company utilizes Scudder Trust Company as the Plan’s investment manager, asset custodian and record keeper. | |||
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. | |||
Contributions | |||
Participants may contribute up to 20% of their compensation, up to a maximum dollar amount which was $10,500 in 2000 and $10,000 in 1999. These contributions are deducted from participants’ salaries before income taxes are withheld. The Company may also make profit-sharing contributions to the Plan at its discretion. Any such amount must be designated by Company resolution. The Company made profit-sharing contributions of $18,022 and $58,620 in 2000 and 1999, respectively. | |||
Participant Accounts | |||
Individual participant accounts are maintained by Scudder Trust Company. Each participant’s account is credited with the participant’s contribution, Plan earnings and an allocation of the Company’s contribution. Allocations are based on participant earnings, account balances or as determined by the Company. | |||
Vesting | |||
Participants are immediately vested in their salary deferral contribution accounts plus actual earnings thereon. |
6
Table of Contents
Participants vest in their discretionary Company contribution account based on the following schedule: |
Vested | ||||
Years of Service | Percentage | |||
Less than 1 year | 0 | % | ||
1 year but less than 2 | 20 | |||
2 years but less than 3 | 40 | |||
3 years but less than 4 | 60 | |||
4 years but less than 5 | 80 | |||
5 years or more | 100 | |||
A participant will also become fully vested upon permanent disability or attainment of normal or early retirement as defined in the Plan. | |||
Forfeitures are used to reduce future contributions made by the Company. There were no forfeitures during 2000 or 1999. | |||
Benefit Payments | |||
On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or installments over a specified time. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. | |||
Loans | |||
Participants may borrow from the Plan, as defined in the Plan agreement, subject to appropriate limitations. All outstanding loans bear interest at 7%. The terms of the loans are set by the Company, and the maximum repayment term is generally five years. | |||
Investment Options | |||
The Plan offers 13 investment options: 9 mutual funds, 2 common and collective trust funds and a Company stock fund. Pursuant to the Plan agreement, a maximum of 30% of a participant’s account balance can be allocated to Company stock. Plan participants direct the investment of their accounts among these 13 options. In 2000, the Plan was amended to include two new investment options: the Scudder Stock Index Fund and the Scudder Development Fund. These funds replace the Scudder Cash Investment Trust and Scudder Global Fund as investment options. | |||
Investment options are exposed to various risks, including those associated with overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits. |
7
Table of Contents
Trustees | |||
The trustees of the Plan during 2000 and 1999 were William R. Roach, John Murray and Patricia Hawver, officers of the Company. However, as of November 17, 2000, William R. Roach resigned as trustee and, by amendment to the Plan, was replaced by John M. Buske, Vice President of Finance and Chief Financial Officer of the Company. |
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting | |||
The accompanying financial statements have been prepared using the accrual basis of accounting. | |||
Use of Estimates | |||
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates. | |||
Valuation of Investments and Income Recognition | |||
Except for the Stable Value Fund, Plan investments are stated at fair value as determined by quoted market prices. | |||
The Stable Value Fund is recorded at contract value because it is fully benefit responsive. The contract value represents the principal balance of the investment contract, plus accrued interest at the stated contract rate, less withdrawals and administrative expenses. The fair value of the investment contract approximates contract value as of December 31, 2000. The average yield and crediting interest rates were approximately 6.33% as of December 31, 2000. | |||
The increase (decrease) in unrealized appreciation (depreciation) of investments and realized gain (loss) on sale of investments are determined based on an average cost basis of the assets. The average cost basis is composed of the market values of assets: (a) on hand at the beginning of the year rather than the original cost at the time of purchase and (b) values on the date of purchase during the year. | |||
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividend income is recorded on the ex-dividend date. | |||
During 2000, the Plan’s investments (including gains and losses on investments bought, sold, and held during the year) appreciated in value by $9,258 as follows: |
Mutual funds | $ | (903,224 | ) | |
Common/collective | (1,811 | ) | ||
Common stock | 914,293 | |||
$ | 9,258 | |||
8
Table of Contents
Administrative Expenses | |||
All administrative expenses are paid by the Company. Administrative expenses as of December 31, 2000 and 1999 were $6,695 and $6,055, respectively. | |||
Payment of Benefits | |||
Benefits are recorded when paid. |
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan’s net assets as of December 31, 2000 and 1999: |
2000 | 1999 | ||||||||
Mutual funds- | |||||||||
American Century Ultra Fund, 35,463 and 23,437 shares in 2000 and 1999, respectively | $ | 1,147,942 | $ | 1,072,935 | |||||
Scudder Global Discovery Fund, 25,831 and 13,948 shares in 2000 and 1999, respectively | 806,707 | 495,581 | |||||||
Scudder Large Company Value Fund, 37,471 and 35,576 shares in 2000 and 1999, respectively | 1,038,710 | 957,337 | |||||||
Scudder Growth and Income Fund, 50,942 and 49,169 shares in 2000 and 1999, respectively | 1,230,258 | 1,312,320 | |||||||
Scudder International Fund, 18,832 and 2,697 shares in 2000 and 1999, respectively | 695,877 | 190,812 | |||||||
Scudder Pathway Moderate Portfolio, 33,453 and 24,273 shares in 2000 and 1999, respectively | 402,772 | 340,555 | |||||||
Common collective trust funds- | |||||||||
Scudder Stable Value Fund, 620,283 and 85,791 shares in 2000 and 1999, respectively | 620,283 | 85,791 | |||||||
Company stock- | |||||||||
Plato Learning, Inc. stock, 64,843 and 81,302 shares in 2000 and 1999, respectively | $ | 973,734 | $ | 437,000 | |||||
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. |
9
Table of Contents
5. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter dated January 12, 1996, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (“IRC”). Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. |
6. ADOPTION OF STATEMENT OF POSITION 99-3
In 1999, the Accounting Standards Executive Committee issued Statement of Position (“SOP”) 99-3, “Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters,” which eliminates the requirement for a defined contribution plan to disclose participant-directed investment programs. |
10
Table of Contents
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report, included in this Form 11-K, into Plato Learning, Inc.’s previously filed Registration Statement File No. 33-30963.
Arthur Andersen LLP
Chicago, Illinois
June 25, 2001
11
Table of Contents
Schedule
PLATO LEARNING, INC.
SAVINGS/RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
December 31, 2000
(Employer Identification Number 41-1646390, Plan Number 001)
Current | ||||||
Description of Investment | Value | |||||
MUTUAL FUNDS: | ||||||
*Scudder- | ||||||
21st Century Fund | $ | 37,700 | ||||
Development Fund | 26,859 | |||||
Income Fund | 240,474 | |||||
Growth & Income Fund | 1,230,258 | |||||
Large Company Value Fund | 1,038,710 | |||||
Global Discovery Fund | 806,707 | |||||
International Fund | 695,877 | |||||
Pathway Moderate Portfolio | 402,772 | |||||
American Century Ultra Fund | 1,147,942 | |||||
COMMON AND COLLECTIVE TRUST FUNDS: | ||||||
*Scudder Stable Value Fund | 620,283 | |||||
*Scudder Stock Index Fund | 36,727 | |||||
*PLATO LEARNING, INC. COMPANY STOCK | 973,734 | |||||
*PARTICIPANT LOANS (interest rate at 7%) | 31,826 | |||||
$ | 7,289,869 | |||||
*Represents party-in-interest.
The accompanying notes are an integral part of this schedule.
12
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized on June 29, 2001.
PLATO LEARNING, INC. SAVINGS/RETIREMENT PLAN
By: -s- John Murray Trustee |
13