EXHIBIT 99
Report of Independent Public Accountants
Report of Independent Public Accountants
To Exide Electronics Corporation
401(k) Retirement Benefit Plan Committee:
We have audited the accompanying statements of net assets available for plan
benefits of Exide Electronics Corporation 401(k) Retirement Benefit Plan as of
December 31, 1995 and 1994, and the related statement of changes in net assets
available for plan benefits with fund information for the year ended December
31, 1995. These financial statements and the schedules referred to below are the
responsibility of the Plan Committee. Our responsibility is to express an
opinion on these financial statements and schedules 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 Exide
Electronics Corporation 401(k) Retirement Benefit Plan as of December 31, 1995
and 1994, and the changes in net assets available for plan benefits with fund
information 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 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. The fund information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits with fund information is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the 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.
/s/ARTHUR ANDERSEN LLP
Raleigh, North Carolina,
March 29, 1996.
Exide Electronics Corporation
401(k) Retirement Benefit Plan
Financial Statements
December 31, 1995 and 1994
Index
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of December 31, 1995 and
1994
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information for the Year Ended December 31, 1995
Notes to Financial Statements -- December 31, 1995 and 1994
Schedules Supporting Financial Statements:
Schedule I -- Item 27(a) - Schedule of Assets Held for Investment Purposes as of
December 31, 1995
Schedule VI -- Item 27(d) - Schedule of Reportable Transactions for the Year
Ended December 31, 1995
Exide Electronics Corporation
401(k) Retirement Benefit Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 1995 and 1994
1995 1994
---- ----
Investments - At market value:
Fidelity Puritan Fund $ 3,271,094 $ 2,298,956
Fidelity Growth Company Fund 5,385,865 3,137,451
Fidelity Growth and Income Portfolio 5,175,347 3,312,370
Fidelity Asset Manager Fund 1,051,173 696,687
Fidelity Retirement Government Money Market Portfolio 10,086,349 8,446,708
Fidelity U.S. Equity Index Portfolio 1,527,798 928,704
Loans to plan participants 1,312,483 1,071,908
--------- ---------
Total investments 27,810,109 19,892,784
---------- ----------
Receivables:
Employer contributions 303,540 591,687
Employee contributions 219,125 209,716
------- -------
Total receivables 522,665 801,403
------- -------
Total net assets available for plan benefits $28,332,774 $20,694,187
=========== ===========
The accompanying notes to financial statements are an integral part of these
statements.
Exide Electronics Corporation
401(k) Retirement Benefit Plan
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information
For the Year Ended December 31, 1995
Fidelity
Fidelity Retirement Fidelity
Fidelity Growth Fidelity Government U.S.
Fidelity Growth and Asset Money Equity
Puritan Company Income Manager Market Index Participant
Fund Fund Portfolio Fund Portfolio Portfolio Loans Other Total
------- ------- --------- ------ --------- ------- ------- -------- ---------
Additions:
Contributions-
Employee $450,631 $573,234 $ 572,308 $177,486 $ 677,212 $173,887 $ 0 $ 9,409 $2,634,167
Employee rollover 41,096 63,712 22,313 36,292 33,667 5,490 0 0 202,570
Employer 173,608 208,536 206,058 78,249 1,188,449 66,941 0 (288,147) 1,633,694
------- ------- ------- ------ --------- ------ ----- ----- ---------
Total 665,335 845,482 800,679 292,027 1,899,328 246,318 0 (278,738) 4,470,431
Dividend income 167,932 237,531 242,824 28,074 532,124 36,586 0 0 1,245,071
Realized and unrealized
gains 384,165 1,100,756 1,018,950 119,818 0 348,543 0 0 2,972,232
Loan repayment-
Principal 72,093 76,749 77,523 14,493 324,884 24,209 (589,951) 0 0
Interest 10,175 12,695 11,232 2,862 40,837 4,235 0 0 82,036
Other 0 0 0 0 2,232 0 0 0 2,232
-- ----- ----- ----- ----- ----- ----- ----- ------
Total
additions 1,299,700 2,273,213 2,151,208 457,274 2,799,405 659,891 (589,951) (278,738) 8,772,002
Transfers to/from
investment options (153,711) 289,797 46,205 (51,411) (176,719) 45,839 0 0 0
Deductions:
Benefits (84,619) (192,967) (228,933) (37,650) (458,994) (53,185) (66,173) 0 (1,122,521)
Loan withdrawals (88,238) (120,724) (104,923) (13,580) (516,415) (52,819) 896,699 0 0
Participant loan fees (994) (905) (580) (147) (7,636) (632) 0 0 (10,894)
---- ---- ---- --- ------ ---- ----- ----- ------
Net increase for year 972,138 2,248,414 1,862,977 354,486 1,639,641 599,094 240,575 (278,738) 7,638,587
Net assets, beginning of
year 2,298,956 3,137,451 3,312,370 696,687 8,446,708 928,704 1,071,908 801,403 20,694,187
--------- --------- --------- ------- --------- ------- ------- ------- ----------
Net assets, end of year $ 3,271,094 $5,385,865 $5,175,347 $1,051,173 $10,086,349 $1,527,798 $1,312,483 $522,665 $28,332,774
=========== ========== ========== ======== ========== ======== ========== ========== ===========
The accompanying notes to financial statements and schedules are an integral
part of this statement.
Exide Electronics Corporation
401(k) Retirement Benefit Plan
Notes to Financial Statements
December 31, 1995 and 1994
1. Description of the Plan:
The following description of the Exide Electronics Corporation (the Company)
401(k) Retirement Benefit Plan (the Plan) is provided for general information
only. Participants should refer to the plan agreement for more complete
information.
The Plan was established effective January 1, 1989, and was subsequently
restated June 3, 1993. The Plan is designed to conform to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Funding Policy
Annual contributions to the Plan consist of:
- Participant salary reduction contributions up to 15% of their total
compensation not to exceed a maximum of $9,240 in 1995 and 1994.
- An employer discretionary contribution of 2% of total compensation of
participants.
- An employer matching contribution equal to 50% of the employee
contributions of up to 4% of their total compensation.
- An employer discretionary contribution determined each year by the
Company.
Eligibility
During 1994, participation in the Plan was limited to full-time regular
employees. Effective January 1, 1995, all employees are eligible to participate
in the Plan as of the first day of the month coinciding with the completion of
six months of service or at least 1,000 hours of service during the 12-month
period commencing on the date which the employee first performs an hour of
service.
Vesting Provision
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the employer contribution portion of their accounts is based
on the number of years of continuous service according to the following
schedule:
Years of Vesting
Service Percentage
--------- ----------
1 20%
2 40
3 60
4 80
5 100
Benefit Provision
When a participant retires, becomes disabled or is deceased, the full value of
the account balance is payable to the participant (or beneficiary, if
participant is deceased). The form of payment available includes annuities,
installments and single lump-sum payments. In addition, a participant may elect
withdrawals during employment equal to the lesser of his/her salary reduction
contribution account balance or the amount necessary to satisfy a financial
hardship. The withdrawal shall be authorized only in the event of an "immediate
and heavy financial need" in an amount "necessary to satisfy the hardship" (as
defined by the applicable Internal Revenue Code Regulation).
Participant Loans
Participants may borrow from the Plan in any amount greater than $500 but less
than 50% of the participant's vested account balance. In no event can the
participant borrow more than $50,000. Loans are for a period not exceeding five
years and bear interest at prime rate plus one percentage point, subject to
applicable usury limits.
2. Summary of Significant Accounting Policies:
Tax Status
The Plan received a favorable tax determination letter dated October 7, 1993,
covering the June 3, 1993, restatement of the Plan. The Plan has been amended
since receiving the determination letter. The plan sponsor is of the opinion
that the Plan, as amended, continues to meet the Internal Revenue Service
requirements under Section 401(k) and, accordingly, no provision for income
taxes has been made in the accompanying financial statements.
Basis of Accounting
The accompanying financial statements were prepared using the accrual method of
accounting.
Pervasiveness 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 additions and deductions during the reporting period.
Actual results could differ from those estimates.
3. Investments:
The investments of the Plan are held and administered by the trustee, Fidelity
Management Trust Company. Investments are stated at market value as determined
by the trustee based on quoted market prices, with the net increase (decrease)
for the year in the carrying value recognized as unrealized gain (loss) in the
accompanying statement of changes in net assets available for plan benefits with
fund information.
Participants may choose to invest their monies among the following six
investment funds which have varying degrees of risk:
Fidelity Puritan Fund - A growth and income fund which invests in a broadly
diversified portfolio of common stocks, preferred stocks and bonds,
including lower-quality, high-yield debt securities.
Fidelity Growth Company Fund - A growth fund which invests primarily in
common stocks and securities convertible into common stock. It may invest
in smaller, younger companies with above-average growth potential or larger
companies that appear undervalued relative to their potential return.
Fidelity Growth and Income Portfolio - A growth and income fund which
invests in common stocks, securities convertible into common stocks,
preferred stocks and fixed-income securities.
Fidelity Asset Manager Fund - A diversified fund which invests in stocks,
bonds and short-term, fixed income instruments. More specifically,
investments are normally made in growth, high-dividend or blue chip stocks;
investment grade bonds; and money market instruments.
Fidelity Retirement Government Money Market Portfolio - This money market
fund invests in obligations issued by the U.S. Government.
Fidelity U.S Equity Index Portfolio - A growth and income fund which seeks
investment results that correspond to the performance of companies
comprising the Standard & Poor's 500.
These six funds are listed on the statements of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits
with fund information. In addition, the statement of changes in net assets
available for plan benefits with fund information has a column entitled "Other."
This column reflects the changes in receivables of the Plan, as these accruals
have not been reflected in the individual funds as reported by the trustee.
The following assets were individually greater than 5% of the plan's net assets
as of December 31, 1995:
Current Value
Description
Fidelity Puritan Fund $ 3,271,094
Fidelity Growth Company Fund 5,385,865
Fidelity Growth and Income Portfolio 5,175,347
Fidelity Retirement Government Money Market Portfolio 10,086,349
Fidelity U.S. Equity Index Portfolio 1,527,798
Effective January 1994, the Plan was amended to add an investment fund comprised
of the Company's common stock. This investment option was not executed during
1995 or 1994, but is anticipated for plan year 1996.
4. Administrative Service Fees:
Administrative service fees incurred on behalf of the Plan are paid by the plan
sponsor, except for administrative fees related to participant loans.
5. Distributions upon Plan Termination:
The Company has the right, at any time, to terminate the Plan by delivering to
the trustee and the administrator written notice of such termination. Upon
termination, all amounts credited to the affected participants' accounts shall
become 100% vested and will not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all participants in
accordance with the Plan provisions.
The Company has no plans for terminating the Plan at this time.
6. Reconciliation to Form 5500:
Net assets available for plan benefits include amounts allocated to terminated
employees of $240,472 at December 31, 1995, and $11,139 at December 31, 1994.
These amounts are recorded as liabilities in the Plan's Form 5500; however,
these amounts are not recorded as liabilities in the accompanying financial
statements in accordance with generally accepted accounting principles.
The following table reconciles net assets available for plan benefits per the
financial statements to the Form 5500 as filed by the Plan for the year ended
December 31, 1995:
Net Assets Available
Benefit Claims Payable Benefit for Plan Benefits
--------------------- Payments and ------------------------------
Beginning of End of Hardship Beginning of
Year Year Withdrawals Year End of Year
--------- ---------- ------------ ------------- -------------
Per financial statements $ 0 $ 0 $ 1,122,521 $ 20,694,187 $ 28,332,774
Accrued benefit payments-
Beginning of year 11,139 0 (11,139) (11,139) 0
End of year 0 240,472 240,472 0 (240,472)
---- ------- ------ -------- -------
Per Form 5500 $11,139 $240,472 $ 1,351,854 $ 20,683,048 $ 28,092,302
======= ======= =========== ============ ============
SCHEDULE I
Exide Electronics Corporation
401(k) Retirement Benefit Plan
EIN: 23-2119242
Item 27(a) -- Schedule of Assets Held for Investment Purposes
As of December 31, 1995
Investment Description Cost Market Value
------------ -------------
Fidelity Puritan Fund $ 2,975,887 $ 3,271,094
Fidelity Growth Company Fund 4,347,394 5,385,865
Fidelity Growth and Income Portfolio 4,138,509 5,175,347
Fidelity Asset Manager Fund 966,542 1,051,173
Fidelity Retirement Government Money Market Portfolio 10,086,349 10,086,349
Fidelity U.S. Equity Index Portfolio 1,148,526 1,527,798
Participant loans, interest at 7% to 10% 1,071,908 1,312,483
--------- ---------
$24,735,115 $27,810,109
=========== ===========
<FN>
Note: The above assets are held by the trustee, Fidelity Management Trust Company, except for participant loans.
</FN>
SCHEDULE VI
Exide Electronics Corporation
401(k) Retirement Benefit Plan
EIN: 23-2119242
Item 27(d) -- Schedule of Reportable Transactions
For the Year Ended December 31, 1995
Number of Purchase Selling
Description of Transaction Transactions Price Price Cost Net Gain/(Loss)
------------ ---------- -------- ------- --------------
Purchase of Fidelity Puritan Fund 126 $1,041,615 $ 0 0 0
Sale of Fidelity Puritan Fund 81 0 453,641 433,116 20,525
Purchase of Fidelity Growth and Income
Portfolio 141 1,460,736 0 0 0
Sale of Fidelity Growth and Income
Portfolio 82 0 616,709 560,964 55,745
Purchase of Fidelity Growth Company
Fund 147 1,939,525 0 0 0
Sale of Fidelity Growth Company Fund 88 0 791,866 698,767 93,099
Purchase of Fidelity Retirement
Government Money Market Portfolio 133 3,672,807 0 0 0
Sale of Fidelity Retirement Government
Money Market Portfolio 126 0 2,033,167 2,033,167 0
Note:
The above transactions represent all reportable transactions in excess
of 5% of the current (market) value of plan assets at the beginning of the
plan year.