U.S. 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 (No Fee Required)
For the fiscal year ended December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from _______________ to ________________
Commission File Number 1-12432
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
American Power Conversion Corporation 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
American Power Conversion Corporation
132 Fairgrounds Road
West Kingston, Rhode Island 02892
1
REQUIRED INFORMATION
A. Financial Statements and Schedules Page
Independent Auditors' Report 3
Statements of Net Assets Available for Plan
Benefits as of December 31, 2000 and 1999 4
Statements of Changes in Net Assets Available for
Plan Benefits for the Years Ended December 31, 2000 and 1999 5
Notes to Financial Statements 6-12
Schedule I - Schedule of Assets
Held for Investment Purposes as of December 31, 2000 13
Schedule II - Schedule of Nonexempt Transactions 14
B. Exhibit Listing
Exhibit Description
Number Consent of KPMG LLP
23
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefitplan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
AMERICAN POWER CONVERSION CORPORATION 401(K) PLAN
(Name of Plan)
Date: June 29, 2001
/s/ Donald M. Muir
-------------------------------------------------
Donald M. Muir, Chief Financial Officer
(principal financial and accounting officer)
2
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Financial Statements and Schedules
December 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
1
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
December 31, 2000 and 1999
Table of Contents
Page
Independent Auditors' Report 3
Statements of Net Assets Available for Plan Benefits 4
Statements of Changes in Net Assets Available for Plan Benefits 5
Notes to Financial Statements 6 - 12
Schedules
1 Schedule of Assets Held for Investment Purposes at End of Year 13
2 Schedule of Nonexempt Transactions 14
Note: Certain schedules as required by Section 103(b)(3) of the Employee
Retirement Income Security Act of 1974, have not been included herein
as the information is not applicable.
2
INDEPENDENT AUDITORS' REPORT
The 401(k) Plan Committee
American Power Conversion Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of the American Power Conversion Corporation 401(k) Plan as of December
31, 2000 and 1999, and the related statements of changes in net assets available
for plan 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 auditing standards generally accepted
in the United States of America. 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
American Power Conversion Corporation 401(k) Plan as of December 31, 2000 and
1999, and the changes in net assets available for plan benefits for the years
then ended, in conformity with accounting principles generally accepted in the
United States of America.
Our audits were made 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 at end of year and nonexempt 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 are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements as of December 31, 2000, and in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Providence, Rhode Island
June 8, 2001
3
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2000 and 1999
2000 1999
Cash $5,551 $106,385
Receivables:
Employer's contribution 337,605 71,560
Accrued income 24,260 14,328
Participants' contributions 15,796 140,676
383,212 332,949
Investments (note 3):
American Power Conversion Corporation
Common Stock 6,553,135 9,479,422
Investments in common/collective trusts:
Merrill Lynch Equity Index Trust 1,255,357 886,554
Merrill Lynch Retirement Preservation Trust 1,060,211 819,035
2,315,568 1,705,589
Mutual Funds:
Blackrock Small Cap Growth 1,941,468 1,728,872
Alliance Bond Fund Corporate 524,851 400,992
Merrill Lynch Equity Income Fund Class A 1,114,505 990,560
Merrill Lynch Growth Fund Class A 2,902,256 2,937,201
Ivy International Fund 1,589,755 1,625,735
MFS Massachusetts Investors Growth 2,302,778 1,563,194
Merrill Lynch Basic Value Fund Class A 2,011,108 1,850,447
12,386,721 11,097,001
Loans to participants 454,899 248,502
Total investments 21,710,323 22,530,514
Net assets available for plan benefits $22,093,535 $22,863,463
See accompanying notes to financial statements.
4
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Statements of Changes in Net Assets Available for Plan Benefits
For the years ended December 31, 2000 and 1999
2000 1999
Additions (deductions) to net assets attributed
to
Investment income:
Net realized gains $763,599 $38,485
Net unrealized gains (losses) (10,734,214) 3,066,394
Interest 39,964 21,183
Dividends 2,116,864 702,436
(7,813,787) 3,828,498
Contributions:
Participants 5,817,167 5,545,407
Employer 3,320,992 2,712,729
9,138,159 8,258,136
Total additions 1,324,372 12,086,634
Deductions from net assets attributed to:
Benefits paid to participants 2,067,839 1,453,335
Total deductions 2,067,839 1,453,335
Net increase (decrease) prior to other (743,467) 10,633,299
Other increase (decrease) (26,461) 102,527
Net increase (decrease) in net assets
available for benefits (769,928) 10,735,826
Net assets available for benefits:
Beginning of year 22,863,463 12,127,637
End of year $22,093,535 $22,863,463
See accompanying notes to financial statements.
5
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(1) Description of Plan
The following brief description of the American Power Conversion Corporation
401(k) Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
(a) General
The Plan is a qualified defined contribution plan covering American
Power Conversion Corporation (the "Company") employees who have
completed at least 45 days of service with the Company. The Plan covers
all employees working for the Company and the Participating Affiliates,
APC America, Inc., APC Sales and Service Corporation and Systems
Enhancement Corporation, except those employees who are members of a
union who bargained separately for retirement benefits during
negotiations. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
(b) Contributions
The maximum salary savings (pre-tax) contribution that an employee may
elect to contribute to the Plan is the lesser of 15% of annual gross
compensation or the limit established by the IRS ($10,500 for 2000 and
$10,000 for 1999). The Company may match this salary savings
contribution at a rate of up to 100% of the first 3%, and during 1999,
the Plan was amended to match up to 50% of the next 3% of the
participant's salary and wage compensation, excluding bonuses,
commissions, incentive compensation, taxable fringe benefits, moving
expenses, auto and other allowances, and disqualifying dispositions.
The Company may also make discretionary profit-sharing contributions to
the Plan. All employer matching and profit-sharing contributions are
deposited to the American Power Conversion Corporation Common Stock
Fund.
There were no discretionary contributions made for the 2000 or 1999 Plan
year.
(c) Vesting
Participants are fully vested to the extent of their salary savings
contributions and earnings on those contributions. Furthermore, the
Plan was amended in 1999, such that participants are immediately vested
in employer matching contributions and the related earnings. However,
any discretionary (profit-sharing) contributions vest on a schedule of
25% after 2 years of service, and an additional 25% per year thereafter
until 100% vesting is reached after 5 years of service.
6
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(d) Loans to Participants
Participants may borrow from their vested account balance under certain
circumstances as provided in the Plan agreement. The minimum loan
amount is $1,000 and participants may borrow the lesser of 50% of their
vested account balance or $50,000. Interest on loans is charged at the
prevailing commercial interest rate for loans of a similar type (Prime
plus 1%) with a repayment term not to exceed five years. This term can
be extended if the loan is used for the purchase of the participant's
primary residence. A participant may not have more than one loan
outstanding at any time.
(e) Payment of Benefits
Upon termination from the Plan, a participant's vested accrued benefits
in his or her account shall be distributed, as elected by the
participant, in either a single lump-sum payment, or, provided the
participant's vested account exceeds $5,000, in periodic installments
not to exceed the participant's lifetime, or the joint lifetime of the
participant and his/her spouse. Distributions may also be made in cash
or in kind, or part cash and part in kind over a period not to exceed
the participant's lifetime, or the joint lifetime of the participant and
his/her spouse.
(f) Hardship Withdrawal
The Plan provides for hardship withdrawals, as defined by the Plan, from
the participant's account. Participants who take a hardship withdrawal
must be suspended from contributing to the Plan for a period of 12
months following the date of the withdrawal.
(g) Forfeitures
Forfeitures related to discretionary contributions are allocated to
remaining participants in the succeeding plan year in the ratio that the
compensation of each participant for the plan year bears to the total
compensation of all participants entitled to share in the contributions.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of the Plan have been prepared
using the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America.
7
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
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 to net assets available for plan benefits during the
reporting period. Actual results could differ from those estimates.
(b) Investments
Investments are stated at aggregate fair market values. Loans are valued
at cost, which approximates fair value. Quoted market prices are used
to value investments.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
(c) Expenses
All expenses of the Plan are paid by the Company in accordance with the
Plan agreement, with the exception of loan set-up fees, which are paid
by each participant receiving a loan, and are paid out of the
participant's account. In 2000 and 1999, these administrative expenses
totaled $3,854 and $3,862, respectively, and are included in the
"Statement of Changes in Net Assets Available for Plan Benefits" under
the heading "Other".
(d) Payment of Benefits
Benefits are recorded when paid.
(e) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities"
(SFAS No. 133). SFAS No. 133 requires that an entity recognize all
derivatives and measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No.
133 effective January 1, 2001. Management has determined that the
impact of SFAS No. 133 on the Plan financial statements would be
immaterial.
8
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(3) Investments
The Plan's investments are held in trust and managed by Merrill Lynch.
Participants may direct employer and employee contributions into any of the
investment options listed below. The following table summarizes the
investments held by Merrill Lynch at December 31, 2000 and 1999.
Investments representing 5% or more of net assets available for plan
benefits are indicated by an asterisk (*).
2000 1999
Number of Fair market Number of Fair market
shares value shares value
American Power Conversion Corporation
Common Stock (See note 4) 529,546 6,553,135* 359,409 9,479,422*
Merrill Lynch Equity Index Trust 13,679 1,255,357* 8,760 886,554
Merrill Lynch Retirement
Preservation Trust 1,060,211 1,060,211 819,035 819,035
Blackrock Small Cap Growth 101,382 1,941,468* 54,436 1,728,872*
Alliance Bond Fund Corporate 42,880 524,851 32,469 400,992
Merrill Lynch Strategic
Dividend Fund Class A - - 75,615 990,560
Merrill Lynch Equity Income
Fund Class A 87,139 1,114,505* - -
Merrill Lynch Growth Fund Class A 139,599 2,902,256* 107,119 2,937,201*
Ivy International Fund 60,678 1,589,755* 34,524 1,625,735*
MFS Massachusetts Investor Growth 134,351 2,302,778* 76,891 1,563,194*
Merrill Lynch Basic Value Fund Class A 61,277 2,011,108* 48,505 1,850,447*
A brief description of each fund's investment objective follows:
Merrill Lynch Equity Index Trust invests primarily in a portfolio of equity
securities designed to match the performance of the S&P 500 Index.
Merrill Lynch Retirement Preservation Trust seeks to provide preservation
of capital, liquidity and current income at levels that are typically
higher than those provided by money market funds.
Blackrock Small Cap Growth is designed for investors aggressively seeking
long-term growth from small company stocks, which may exhibit a higher
degree of price volatility than stocks of larger companies with longer
earnings histories.
Alliance Bond Fund Corporate seeks income; capital appreciation is
secondary. The fund normally invests at least 65% of assets in investment-
grade debt securities. It may hold corporate bonds, convertibles, US
government obligations, and dollar denominated foreign debt.
Merrill Lynch Equity Income Fund Class A provides shareholders with long-
term total return by investing primarily in a diversified portfolio of
dividend-paying common stocks that yield more than the Standard & Poor's
500 Composite Stock Price Index. Total return is the aggregate of income
and capital value changes. The name changed in 2000 from the "Merrill
Lynch Strategic Dividend Fund".
9
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
Merrill Lynch Growth Fund Class A seeks growth of capital and, secondarily,
income through a diversified portfolio of primarily equity securities, with
principal emphasis on issues believed by Fund management to be undervalued.
Ivy International Fund seeks long-term capital growth; current income is a
secondary consideration. The Fund normally invests at least 65% of assets
in common stocks issued in at least three countries.
MFS Massachusetts Investors Growth seeks to provide long-term growth of
capital and future income rather than current income. The fund may invest
up to 50% of its total assets in foreign securities, including securities
of issuers located in developing markets.
Merrill Lynch Basic Value Fund Class A seeks capital appreciation, and
secondarily, income, by investing primarily in equities that appear to be
undervalued.
American Power Conversion Corporation common stock is offered to Plan
participants as an additional investment option. Merrill Lynch purchases the
shares in the open market at the time contributions are received. The
timing of all stock transactions is subject to the availability of American
Power Conversion Corporation common stock on the open market, and prices are
set by the market.
10
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(4) Nonparticipant-Directed Investments
The employer matching contribution is entirely directed to purchasing shares
of common stock of American Power Conversion Corporation. However, once the
employer match is invested in this fund the participant may reallocate the
investment to any of the other funds in the plan restricted only by the
closed employee stock trading periods. Furthermore, employees may elect to
direct a portion of their 401(k) contribution towards purchasing shares of
common stock of American Power Conversion Corporation. Information about
the net assets and the components of the changes in net assets relating to
shares of common stock of American Power Conversion Corporation is as
follows:
December 31,
2000 1999
Net assets:
American Power Conversion Corporation
common stock $6,893,030 $9,571,939
Year ended
December 31,
2000 1999
Changes in net assets:
Contributions $4,205,991 $3,257,747
Net realized gains 648,231 174,910
Net unrealized gains (losses) (7,074,647) 1,379,772
Benefits paid to participants (790,779) (557,227)
Interest on outstanding participant loans 6,992 1,521
Net interfund transfers in 288,159 91,762
New loans - (1,274)
Loan repayments 37,144 13,547
$(2,678,909) $4,360,758
11
(5) Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will be fully vested in their accounts.
(6) Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated October 6, 2000, that the Plan and related trust are 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 and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
(7) Related-Party Transactions
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch. Merrill Lynch is the trustee as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
(8) Subsequent Events
Effective January 1, 2001, the Plan was amended to include U.S. employees of
Advanced Power, Inc., ABL Electronics Corp. and Airflow Company, which were
companies acquired by the Company during 2000. Managements of the Plan has
not assessed the impact of the plan amendment.
(9) Realized/Unrealized Gains and Losses
Net Realized and Unrealized Gains and (Losses) by investment type for the
year ended December 31, 2000 were comprised of the following:
Realized Unrealized
Common Stocks $648,231 $(7,060,916)
Common/Collective Trusts 12,904 (135,127)
Mutual Funds 102,464 (3,538,171)
Total $763,599 $(10,734,214)
12
Schedule 1
AMERICAN POWER CONVERSION CORPORATION
401(k) PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
Identity of issue,
borrower lessor or Current
similar party Description of investment Cost Value
*American Power
Conversion Corp. Common Stock 10,670,782 6,553,135
*Merrill Lynch Equity Index Trust 1,296,958 1,255,357
*Merrill Lynch Retirement Preservation Trust 1,060,211 1,060,211
Blackrock Small Cap Growth 2,462,104 1,941,468
Alliance Bond Fund Corporate 550,586 524,851
*Merrill Lynch Equity Income Fund Class A 1,179,569 1,114,505
*Merrill Lynch Growth Fund Class A 3,437,898 2,902,256
Ivy International Fund 2,270,601 1,589,755
MFS Massachusetts Investors Growth 2,551,223 2,302,778
*Merrill Lynch Basic Value Fund Class A 2,283,965 2,011,108
*Loans to participants Various loans with interest
(169 loans) rates of 8.75% to 10.5% - 454,899
27,763,897 21,710,323
*Indicates a party-in-interest to the Plan.
See accompanying independent auditors' report.
13
Schedule 2
AMERICAN POWER CONVERSION CORPORATION
401(k) Plan
Schedule of Nonexempt Transactions
Year ended December 31, 2000
Relationship
of plan Expenses Net
Identity employer or Description incurred Cost gain
of party other party- of Purchase Selling Lease with of Current or
involved in-interest transaction price price rental transaction asset value (loss)
Overdue
Employee
Contributions
American not timely
Power Plan remitted to
Conversion Sponsor the plan 35,770* N/A N/A N/A N/A 35,770 N/A
*This represents total amount of contributions that were withheld from
employees, but not remitted timely into trust by the plan sponsor. The
contributions were subsequently remitted to the trust.
See accompanying independent auditors' report.
14
Exhibit 23
Accountants' Consent
The Board of Directors
American Power Conversion Corporation:
We consent to incorporation by reference in the registration
statement of American Power Conversion Corporation on Form S-8
(File Nos. 33-25873, 33-54416, 333-32563, 333-78595, 333-80541,
and 333-80569) of our report dated June 8, 2001, relating to the
statements of net assets available for plan benefits of the
American Power Conversion Corporation 401(k) Plan as of December
31, 2000 and 1999, and the related statements of changes in net
assets available for plan benefits for the years ended December
31, 2000 and 1999, and the related supplementary schedules, which
report appears in the December 31, 2000 annual report on Form 11-
K of the American Power Conversion Corporation 401(k) Plan.
KPMG LLP
Providence, Rhode Island
June 27, 2001