Exhibit 99.1
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
For the fiscal year ended June 30, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
---------- -----------
Commission File No. 1-6435
A. BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
(Full title of plan)
B. Bolt Beranek and Newman Inc.
150 CambridgePark Drive
Cambridge, MA 02140
(Name and address of issuer)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused the annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOLT BERANEK AND NEWMAN INC.
RETIREMENT TRUST
Ralph A. Goldwasser
Trustee
Bolt Beranek and Newman Inc.
Retirement Trust
Senior Vice President and Chief
Financial Officer
Bolt Beranek and Newman Inc.
April 4, 1994
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-------------------------
INDEX
Page(s)
-------
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits,
June 30, 1993 and 1992 3
Statement of Changes in Net Assets Available for
Plan Benefits for the year ended June 30, 1993 4
Notes to Financial Statements 5-9
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
at June 30, 1993 10
Item 27d - Schedule of Reportable Transactions for the
year ended June 30, 1993 11
NOTE: Certain supplemental schedules required by the Employee Retirement
Income Security Act of 1974 have not been included herein, as they
are not applicable to the Bolt Beranek and Newman Inc. Retirement
Trust.
NOTE: Page references relate solely to this document in its traditional
filing format.
REPORT OF INDEPENDENT ACCOUNTANTS
-------------------------
To the Board of Trustees and Plan Administrators of
Bolt Beranek and Newman Inc. Retirement Trust:
We have audited the statements of net assets available for plan benefits of
the Bolt Beranek and Newman Inc. Retirement Trust (the "Plan") as of June 30,
1993 and 1992 and the related statement of changes in net assets available
for plan benefits for the year ended June 30, 1993. These financial
statements are the responsibility of the Plan Administrators and the Board of
Trustees. 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, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Plan as of June 30, 1993 and 1992, and the changes in net assets available
for plan benefits for the year ended June 30, 1993 in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules 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. The
supplemental schedules have been subjected to the auditing procedures applied
in the audit 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.
Coopers & Lybrand
Boston, Massachusetts
December 21, 1993
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
June 30, 1993 and 1992
-------------------------
1993 1992
------------ ------------
ASSETS
Investments at fair value
(Notes B, C, D and E) $189,287,799 $158,882,916
Employer contributions receivable (Note B) 53,992 2,178,274
Interest and dividends receivable 10,736 13,787
------------ ------------
TOTAL ASSETS $189,352,527 $161,074,977
============ ============
LIABILITIES
Accrued administrative expenses (Note G) 18,873 19,006
------------ ------------
TOTAL LIABILITIES 18,873 19,006
------------ ------------
Net assets available for plan benefits $189,333,654 $161,055,971
============ ============
The accompanying notes are an integral
part of these financial statements.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS
For the year ended June 30, 1993
-------------------------
Additions:
Employer contributions (Note B) $ 6,515,237
Employee contributions (Note B) 955,205
Investment income (Notes B and D) 12,454,186
Net appreciation in fair value of investments (Notes B & I) 14,887,089
------------
Total Additions 34,811,717
------------
Deductions:
Termination and death benefits paid to participants (Note C) 6,493,975
Administrative expenses (Note G) 40,059
------------
Total Deductions 6,534,034
------------
Net additions 28,277,683
Net assets available for plan benefits,
beginning of year 161,055,971
-------------
Net assets available for plan benefits,
end of year $189,333,654
============
The accompanying notes are an integral
part of these financial statements.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
-------------------------
A. Trust Description:
------------------
The Bolt Beranek and Newman Inc. Retirement Trust (the "Plan") is a
qualified defined contribution plan established in 1954 to provide
retirement benefits for domestic employees of Bolt Beranek and Newman Inc.
and its subsidiaries (hereinafter Bolt Beranek and Newman Inc. and its
participating subsidiaries are referred to as the "Company") who have
completed one year of service, as defined. Participants should refer to
the plan agreement for a more complete description of the Plan's
provisions.
B. Summary of Significant Accounting Policies:
-------------------------------------------
Investments Valuation
---------------------
Investments in mutual and money market fund shares are valued based on
reported net asset values. Investments in common stocks are carried at
quoted market values. The investment in the John Hancock Venture Capital
Fund, a limited partnership, is carried at the Plan's proportionate share
of the Fund's net asset value. The Plan's limited partnership interest is
not readily marketable. The Plan presents in the statement of changes in
net assets available for Plan benefits the net appreciation in the fair
value of its investments which consists of net realized gains of
$1,015,414 and the unrealized appreciation of $13,871,675 on those
investments.
Contributions
-------------
The Plan receives contributions as voted annually by the Company according
to the terms of the Plan. Employer contributions are recorded for each
plan year in such amounts as have been voted by the Company pursuant to
the provisions of the Plan and include amounts paid directly to
participants as elective cash options, if any.
Employee contributions are recorded in the period when received from the
participant directly or in which the Company makes payroll deductions from
those Plan participants who have authorized voluntary contributions to be
withheld. Employee contributions are subject to certain limitations
imposed by the Internal Revenue Code and may require the subsequent return
of a portion of the contributions made during the previous plan year.
Other
-----
Purchases and sales of securities are reflected on a trade-date basis.
Gains or losses on sales of investments are determined based on the
average cost method.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
-------------------------
B. Summary of Significant Accounting Policies, continued:
------------------------------------------------------
Other, continued
----------------
Investment income includes dividends, capital gains distributions and
interest income and are reinvested as earned. Dividends and capital gains
distributions are recorded on the ex-dividend date. Interest income is
recorded as earned.
The management and service fees of the Fidelity Group of Funds are charged
to operations of the respective funds.
C. Plan Provisions:
----------------
Vesting
-------
Plan participants are 100% vested (benefits to which the participant is
entitled regardless of future service with the Company) in the portion of
the annual employer contribution credited to their account which exceeds
7 1/2% of their credited compensation, as defined. The remaining portion
of the participants' account balance vest at the rate of 2 1/12% per
month; thus upon completion of four years of participation, employees
become fully vested. Upon disability, attainment of age 65 or death,
employees become fully vested with respect to all of the employer
contributions.
Forfeitures
-----------
Forfeitures of nonvested employer credits are allocated to the remaining
plan participants as provided by the plan.
Benefit Payments
----------------
Employees may commence to receive benefits after retirement on or after
age 55 or upon total disability. These benefits may be paid in a lump sum
or in installments over a period of up to 15 years. Benefits must
commence no later than April 1 following the calendar year in which the
participant attains age 70 1/2.
Upon death the participant's designated beneficiary is entitled to receive
the amount in the participant's account.
If a participant leaves for reasons other than death, total disability or
retirement on or after 65, vested benefits (a) will be paid in lump sum if
the total vested balance does not exceed $3,500, (b) may be paid in a lump
sum if the total vested balance exceeds $3,500 but is less than $7,500,
(c) will be deferred to the earlier of age 55 or three years after
termination if the vested balance at termination is at least $7,500.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
-------------------------
C. Plan Provisions, continued:
---------------------------
Withdrawals
-----------
A participating employeee may withdraw their voluntary contributions up to
the lesser of the then current value of their contributions or the actual
amount contributed by the participating employee, provided that at least
$500 is withdrawn. Contributions withdrawn cannot be reinvested. No
other amounts are available for in-service withdrawl except for loans.
Loans
-----
With the approval of the Trust Administrators (the "Administrators"),
participants may borrow an amount up to one-half of the vested interest in
their accounts, with the maximum amount loaned not to exceed $50,000.
Interst is charged at a reasonable fixed rate established by the
Administrators which approximate market rates (10% as of January 6, 1993).
The loan must be repaid in substantially equal installments, payable no
less frequently than quarterly, within a reasonable period specified by
the Administrators, not to exceed five years.
D. Investment Funds of the Plan:
-----------------------------
A description of the investment funds of the Plan at June 30, 1993 is as
follows:
- Fidelity's U.S. Government Fund replaced the Retirement Government
Money Market Portfolio as of March 1, 1993, and is generally intended
for investors in tax-saving retirement plans. The Fund seeks as high
a level of current income as is consistent with the preservation of
capital and liquidity by investing in obligations issued or guaranteed
as to principal and interest by the U.S. government, its agencies or
instrumentalities, and in repurchase agreements secured by these
obligations. The Fund's objective is to be a conservative, low-risk
investment.
- Fidelity Puritan Fund is a growth and income fund. The Fund's
investment objective emphasizes income by investing in a broadly
diversified portfolio of high-yielding securities. These securities
include common stock, preferred stock, and bonds. The Fund seeks to
achieve capital growth in addition to regular quarterly dividends.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
-------------------------
D. Investment Funds of the Plan, continued:
----------------------------------------
- Fidelity Equity-Income Fund is a growth and income fund. The Fund
seeks a yield that exceeds the composite yield of the Standard and
Poor's 500 Index, and considers the potential for capital appreciation
when selecting fund investments. The Fund invests primarily in common
and preferred stocks, but can also invest in bonds and convertible
securities. Dividend amounts will vary, depending on the yields of
the securities held in the portfolio.
- Fidelity Magellan Fund is a growth fund. The Fund seeks long-term
capital appreciation by investing in stocks of both well-known and
lesser-known companies with above-average growth potential and a
correspondingly higher level of risk. Securities may be of foreign
and domestic companies.
- Fidelity Europe Fund is a growth fund which seeks long-term capital
appreciation by investing in securities of issuers that have their
principal activities in Western Europe. The Fund invests primarily in
foreign securities, including common stock, securities convertible
into common stock, and debt instruments.
- Fidelity U.S. Equity Index Portfolio (a portfolio of Fidelity
Institutional Trust) seeks to provide investment results that
correspond to the total return performance of the companies comprising
the Standard & Poor's
500 index.
- Trustees' Fund investments include the remaining investments of a
former investment option and a money market fund account to accumulate
interim employer contributions. At June 30, 1993, the investments
consist of money market funds and a venture capital fund.
- The BBN Stock Fund allows participants to allocate up to 15% of the
value of their accounts in this Fund which consists solely of the
Company's common stock.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
-------------------------
D. Investment Funds of the Plan, continued:
----------------------------------------
Participants may reallocate their individual accounts among the available
investment options once each month. No allocations are allowed to or
from the Trustees' Fund. Proceeds from investments maturing or sold in
this fund will be invested in the Fidelity mutual funds in accordance with
the participants selected fund allocations.
E. Investments:
------------
Investments held by the Trust at June 30, 1993 and 1992 in each fund are
summarized as follows:
1993 1992
-----------------------------------------------------
Cost Market Cost Market
----------- ----------- ----------- -----------
Fidelity US Government
Fund and Retirement
Government Money
Market Portfolio $ 37,093,515 37,093,515 $ 40,770,986 $ 40,770,986
Fidelity Puritan 51,529,748 61,950,551 41,888,925 46,920,053
Fidelity Equity
Income 25,900,571 31,473,717 23,059,017 24,371,337
Fidelity Magellan 38,969,677 42,909,194 34,017,903 34,611,072
Fidelity US Equity
Index 2,747,448 3,206,085 2,767,926 3,053,854
Fidelity Europe 2,812,164 2,772,791 2,370,491 2,389,237
Trustees' Fund 7,117,760 7,080,028 5,118,027 5,442,666
BBN Stock Fund 1,310,811 1,817,818 811,959 637,040
------------ ------------ ------------ ------------
$167,481,694 188,303,692 $150,805,234 158,196,245
============ ============
Loans to participants 984,107 686,671
------------ ------------
$189,287,799 $158,882,916
============ ============
At June 30, 1993 and 1992, Fidelity Puritan Fund, Fidelity Equity-Income
Fund, Fidelity Magellan Fund, and Fidelity U.S. Government Fund each
exceeded 5% of the net assets available for plan benefits. Additionally,
at June 30,1993, $75,033,180 of the Plan's investment assets belong to persons
who do not have active accounts in the Plan, and who have not yet received
disbursement of their account balance.
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS, Continued
-------------------------
F. Tax Status:
-----------
The Internal Revenue Service has determined that the Plan is a qualified
plan under Section 401(a) of the Internal Revenue Code and is therefore
exempt from federal income taxes under the provisions of Section 501(a).
The most recent amendment, made in connection with the most recent IRS
determination letter, was made to the Plan during fiscal 1993.
G. Administrative Expenses:
------------------------
Administrative expenses consist primarily of those costs associated with
the independent audit and charges assessed by the Plan's recordkeeper.
Certain other administrative expenses of the Plan are absorbed directly by
the Company.
H. Termination Priorities:
-----------------------
While the Company has established the Plan with the intention and
expectation that contributions will continue indefinitely, the Company may
terminate the Plan at any time without any liability whatsoever for such
discontinuance or termination. In the event that the Board of Directors of
the Company votes to terminate the Plan, the Plan would be discontinued as
of the date specified in the notice of termination directed to the Board of
Trustees (the "Trustees"). Upon such termination of the Plan, each
participating employee's interest in employer credits would become fully
vested and nonforfeitable. After payment of proper expenses by the
Trustees, the Trust would be liquidated and each participating employee (or
beneficiary of a deceased participating employee) would be entitled to
receive their interest in the Trust fund, as of the date of liquidation, in
cash or in kind, a single payment. Net assets available for plan benefits
at June 30, 1993 do not reflect any provision for liquidation expenses or
for costs related to disposition of investments. Participants remaining at
the time of liquidation would bear all such investment costs.
I. Net Appreciation (Depreciation) in the Fair Value of Investments:
-----------------------------------------------------------------
The net appreciation (depreciation) of investment funds for the year ended
June 30, 1993 are as follows:
1993
-----------
Fidelity Puritan Fund $ 5,862,951
Fidelity Equity Income Fund 4,484,297
Fidelity Magellan Fund 3,537,527
Fidelity U.S. Equity Index Fund 299,203
Trustees' Fund 119,783
BBN Stock Fund 706,295
Fidelity Europe Fund (122,967)
-----------
TOTAL $14,887,089
===========
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
ITEM 27a - SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
At June 30, 1993
-------------------------
Number of
Shares (S),
Number of
loans (L),
or Amount (A) Description Cost Market
- -------------- ------------ ------------ ------------
Mutual Funds
------------
3,789,025 (S) Fidelity Puritan Fund $ 51,529,748 $ 61,950,551
614,745 (S) Fidelity Magellan Fund 38,969,677 42,909,194
985,093 (S) Fidelity Equity Income Fund 25,900,571 31,473,717
190,385 (S) Fidelity U.S. Equity Index
Portfolio 2,747,448 3,206,085
169,486 (S) Fidelity Europe Fund 2,812,164 2,772,791
------------ ------------
121,959,608 142,312,338
Money Market Funds
------------------
6,450,506 (S) Fidelity Money Market Trust 6,450,506 6,450,506
297,124 (S) Fidelity Daily Income Trust 297,124 297,124
68,966 (S) Fidelity Cash Reserves 68,966 68,966
37,093,515 (S) Fidelity U.S. Government Fund 37,093,515 37,093,515
------------ ------------
43,910,111 43,910,111
Partnerships
------------
301,164 (A) John Hancock Venture Capital Fund 301,164 263,432
Common Stocks
-------------
227,226 (S) Bolt Beranek and Newman Inc. 1,310,811 1,817,811
Loans to Participants
---------------------
166 (L) Loans to participants
Various principal amounts
maturing through 6/30/98 with
interest rates from 8% to 13% --- 984,107
------------ ------------
$167,481,694 $189,287,799
============ ============
BOLT BERANEK AND NEWMAN INC. RETIREMENT TRUST
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended June 30, 1993
-------------------------
The following schedule itemizes those securities for which the aggregate
amount of purchase or sale transactions, or for which a single transaction,
was in excess of 5% of the current fair value of the Plan's net assets at
July 1, 1992.
Aggregate Reportable Transactions
---------------------------------
Gain
Description of Security Purchases Sales (Loss)
- ----------------------- --------- ------- -------
Fidelity U.S. Government Fund 41,111,376 (1) N/A
Fidelity Retirement Government
Money Market Portfolio (1) 46,356,621 N/A
Fidelity Puritan Fund 14,604,307 (1) 473,277
Fidelity Magellan Fund 10,864,031 (1) 191,177
Single Reportable Transactions
------------------------------
There were no single transactions in excess of 5% of the current fair
value of the Plan's net assets at July 1, 1992.
(1)Transaction value less than 5% of the current fair value of the Plan's
net assets at July 1, 1992.