SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the plan year ended December 31, 2001
Commission file number 0-20686
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
(Full title of the plan)
UNIROYAL TECHNOLOGY CORPORATION
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236
(Exact name of issuer of securities held
pursuant to the plan and address
of its principal executive office.)
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001 AND 2000
AND FOR THE YEAR ENDED DECEMBER 31, 2001,
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2001,
AND INDEPENDENT AUDITORS' REPORT
INDEX
Page
Independent Auditors' Report F-2
Statements of Net Assets Available for Plan Benefits F-3
Statement of Changes in Net Assets Available for
Plan Benefits F-4
Notes to Financial Statements F-5
Supplemental Schedules:
Schedule H, Line 4 (i) - Schedule of Assets Held for
Investment Purposes as of December 31, 2001 F-10
Schedule H, Line 4 (j) - Schedule of Reportable Transactions
for the Year Ended December 31, 2001 F-11
Schedules not filed herewith are omitted because of the absence of conditions
under which they are required.
INDEPENDENT AUDITORS' REPORT
To the Employee Benefits Committee of
Uniroyal Technology Corporation:
We have audited the accompanying statements of net assets available for plan
benefits of the Uniroyal Technology Corporation Savings Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 2001. 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, such financial statements present fairly, in all material
respects, the net assets available for plan benefits of the Plan as of December
31, 2001 and 2000, and the changes in net assets available for plan benefits for
the year ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements and supplemental schedules for the year
ended December 31, 2001 have been prepared assuming that Uniroyal Technology
Corporation, the Plan's sponsor (the "Company"), will continue as a going
concern. As discussed in Note 2 to the financial statements, the Company's
recurring losses from operations and net stockholders' capital deficiency raise
substantial doubt about its ability to continue as a going concern. The
uncertainty regarding the Company's ability to continue as a going concern
raises substantial doubt about the Plan's continuation. Management's plans
concerning these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Our 2001 audit was conducted for the purpose of forming an opinion on the basic
2001 financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 2001 and
reportable transactions for the year ended December 31, 2001 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
are the responsibility of the Plan's management. Such supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic
2001 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/DELOITTE & TOUCHE
Certified Public Accountants
Tampa, Florida
June 7, 2002
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2001 AND 2000
2001 2000
------------- ------------
ASSETS:
Investments - at fair value $ 12,144,279 $ 13,175,915
Employer contributions receivable 146,952 2,330,756
Employee contributions receivable 118,699 88,878
------------ ------------
Total assets 12,409,930 15,595,549
------------ ------------
LIABILITIES:
Refunds due 38,759 107,916
------------ ------------
Total liabilities 38,759 107,916
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 12,371,171 $ 15,487,633
============ ============
See notes to financial statements.
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
NET ASSETS AVAILABLE FOR PLAN BENEFITS -
beginning of year $ 15,487,633
------------
ADDITIONS:
Employee contributions 903,993
Employee rollover contributions 90,133
Employer contributions 76,843
Interest and dividend income 426,819
------------
1,497,788
------------
DEDUCTIONS:
Benefits paid to Plan beneficiaries 2,332,320
Net depreciation in fair value of investments 2,200,724
Administrative expenses 81,206
------------
4,614,250
------------
NET DEDUCTIONS (3,116,462)
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS -
end of year $ 12,371,171
============
See notes to financial statements.
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
General
The following description provides only general information.
Participants should refer to the Plan agreement for a more
comprehensive description of the Plan's provisions.
The Uniroyal Technology Corporation Savings Plan (the "Plan") is a
defined contribution multiple employer plan established to provide a
means for eligible employees to supplement their retirement income. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). The Plan sponsor is
Uniroyal Technology Corporation (the "Company"). The Plan trustee and
record keeper is The Vanguard Fiduciary Trust Company ("Vanguard").
The Plan is administered by an administrative committee consisting of
persons appointed by the named fiduciary as defined in the Plan.
The Plan covers all eligible salaried and non-union wage employees of
the Company. An employee becomes a participant in the Plan on the first
day of the calendar month next following the participant's date of
hire.
Effective October 1, 1998, the portion of the Uniroyal Technology
Corporation Employee Stock Ownership Plan (the "ESOP") containing
assets and liabilities of participants of the ESOP, who were also
participants or eligible to participate in the Plan ("ESOP Savings Plan
Portion"), was merged into the Plan. Prior to the merger 100% of the
ESOP became vested. All rights and benefits of each participant in the
ESOP Savings Plan Portion continued to be governed by the provisions of
the ESOP agreement. A separate recordkeeping account was established in
the Plan for the ESOP Savings Plan Portion of each participant's
benefit. The transfer took place on June 30, 1999.
Effective December 31, 2000, the ESOP Savings Plan Portion was
terminated. Distributions of Company common stock were made during the
Plan year ended December 31, 2001 with an approximate value of
$977,000.
During August 2001, the Plan was amended and restated, effective
January 1, 1997, to incorporate changes made by the Uruguay Round
Agreements Act, the Uniformed Services Employment and Reemployment
Rights Act of 1994, the Small Business Job Protection Act of 1996, the
Taxpayer Relief Act of 1997, the Internal Revenue Service Restructuring
and Reform Act of 1998, and the Community Renewal Tax Relief Act of
2000 (collectively referred to as "GUST Amendments").
Participant Accounts
Vanguard maintains an account for each participant, by fund, for the
amount of participant and Company contributions and subsequent income
or loss thereon. Each participant directs Vanguard to which fund(s)
such participant's contributions should be credited. The participant
may allocate contributions among the funds in increments of 10%.
Contributions
The Company may, at its discretion, contribute to the Plan for each
participant on the payroll as of the last day of each month, calendar
quarter, or Plan year, a matching contribution equal to 25% of each
participant's before tax savings contribution, up to 6% of the
participant's compensation. Any matching contribution deposited to the
Plan on or after October 1, 1995 will be made through contributions of
Company common stock to the Uniroyal Technology Common Stock Fund
("Stock Fund"). Company contributions, if any, made prior to September
30, 1995 are invested in the Vanguard Money Market Reserves Portfolio.
In December 2001, the Company declared a matching contribution of
$138,560. The contribution was made to the Plan in the form of 43,300
shares of the Company's common stock during the Plan year ending
December 31, 2002.
Each Participating Company (as defined in the Plan) may, at its
discretion, make a special contribution to the Plan for the benefit of
the participants on the Participating Company's payroll at Plan
year-end. Special contributions are invested in the Company's Stock
Fund. On August 4, 2000, the Board of Directors of the Company approved
a special contribution of Company common stock to the Plan for the Plan
years ended December 31, 1999 and December 31, 2000, as permitted by
the Plan ("Special Contribution"). The Special Contribution was made to
eligible Plan participants employed by the Company and certain of the
Company's subsidiaries. The amount of the Special Contribution totaled
$2,234,940, of which $722,708 related to Plan year 1999 and $1,512,232
related to Plan year 2000. The Special Contribution was made through
the contribution of approximately 298,640 shares of Company common
stock in Plan year 2001. The Special Contribution is subject to the
same vesting provisions as other Company matching contributions.
Each participant may contribute up to 15% (in increments of 1%) of
covered pre-tax earnings to the Plan, through payroll deductions, for
investment in the investment options offered. The 2001 maximum annual
voluntary contribution is $10,500, subject to revision annually to
reflect increases in the cost of living index.
Participants are immediately 100% vested in their before-tax savings
contributions. A participant becomes 100% vested in the Company's
matching contributions after completion of five years of service or
upon death, disability or retirement prior to the completion of five
years of service.
A participant may increase or decrease Plan contributions by filing
written notice with the Plan administrator six times each plan year as
of the first day of each January, March, May, July, September and
November.
A participant may suspend contributions to the Plan at any time. The
contributions may be resumed six times each plan year as of the first
day of each January, March, May, July, September and November.
Withdrawals and Forfeitures
At age 59 1/2 and thereafter, an active employee may withdraw funds
from the employee's before-tax savings balance at any time. Before age
59 1/2, withdrawals (exclusive of earnings) may be made only in the
event of demonstrated financial hardship, as determined by the Plan
administrator, according to the rules of the Internal Revenue Service
("IRS"). Such hardship withdrawals are subject to a 10% penalty tax. As
of December 31, 2000, the Plan had amounts owing to participants by
reason of withdrawals of approximately $352,976. No amounts were owing
to participants by reason of withdrawals at December 31, 2001.
If the participant's employment ends, the participant's vested account
balance and earnings will be paid in cash in a lump sum by April 1
following the close of the Plan year within which the participant's
employment ended. However, prior to January 1, 2002, certain
participants could choose to receive distributions in the form of
monthly installments over a period not to exceed ten years. If this
option was chosen, the funds were invested in an interest bearing
account. In addition, a participant or the participant's beneficiary
will receive the value of the participant's account balance for all
terminations resulting from retirement, permanent incapacity or death.
Alternatively, the participant may elect to have the participant's
vested account balance transferred directly to an IRA or other
qualified plan.
Forfeitures, which consist of Company matching contributions applicable
to participants who terminate from the Plan unvested, are first (i)
used to pay administrative costs of the Plan, and then (ii) reallocated
as an additional Special Allocation (as defined in the Plan).
Priorities Upon Termination of the Plan
The Plan has no fixed termination date. The Board of Directors of the
Company has the right to amend the Plan, to suspend for any period of
time the contributions to be made by participants and the Company to
the Plan, and at any time to terminate the Plan, subject to the
provisions of ERISA, provided that no amendment or termination shall
have the effect of reducing the interest of any participant accrued
under the Plan or of diverting any part of the assets held by the
Trustees for purposes other than provided in the Plan. In the event of
Plan termination, participants will become 100% vested in their
accounts. The Board of Directors has not expressed any intention to
terminate the Plan. See Note 2, "Basis of Accounting."
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accounts of the Plan are maintained on the accrual basis. Benefit
payments are reported on a cash basis, in accordance with the
guidelines of the American Institute of Certified Public Accountants'
Audit Guide, "Audits of Employee Benefit Plans." The financial
statements and supplemental schedules have been prepared assuming that
the Company will continue as a going concern.
The Company continues to experience losses from continuing operations
and negative cash flows. It is likely that cash flow from operations
will be negative throughout fiscal 2002. The Company has a working
capital deficiency and has defaulted on certain promissory note
payments, capital lease payments and vendor payments due. Such
conditions raise substantial doubt that the Company will be able to
continue as a going concern for a reasonable period of time without
receiving additional funding.
Management of the Company has sought to generate additional financial
resources by reducing operating costs, selling certain assets and
seeking additional sources of financing. The ability of the Company to
operate as a going concern and the ultimate success of the Company
depends upon its ability to obtain additional financing, to continue to
reduce operating costs and, ultimately, to generate higher sales levels
to attain profitability.
The Company's ability to continue as a going concern raises substantial
doubt about the Plan's continuation, directly affects the Company's
ability to make matching contributions to the Plan and directly affects
the value of the Company's common stock held by participants of the
Plan. The accompanying financial statements do not include any
adjustments that may result from the outcome of this uncertainty.
However, management of the Plan believes such uncertainties should not
result in any doubt as to the availability of Plan assets for the
benefit of participants. Should the plan be terminated, the terms
discussed in Note 1 would be applicable. The employee contributions
receivable reflected in the December 31, 2001 statement of net assets
available for plan benefits were funded to the Plan by the Company in
January, 2002. The employer contributions receivable reflected in the
December 31, 2001 statement of net assets available for plan benefits
were funded to the Plan by the Company in February 2002.
Investment Valuation and Income Recognition
Investments are stated at published current market value, which equals
fair value, and consist of common/collective trusts, investments in
mutual funds and the Company's common stock. Investment transactions
are recorded as of the trade date. Net gains or losses on the disposal
of investments are determined based on each investment's market value
at the beginning of the year. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.
Expenses
Administrative fees of the Plan and other reasonable fees and expenses
incurred by the Plan have been paid by the Plan.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets available for benefits, and changes therein. Actual
results could differ from those estimates.
Risks and Uncertainties
The Plan utilizes various investment instruments. Investment
securities, in general, are exposed to various risks, such as interest
rate, credit, and overall market volatility. Due to the level of risk
associated with investment securities, changes in the values of
investment securities could occur in the near term and such changes
could materially affect the amounts reported in the Plan's financial
statements.
Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS No.
133). In June 2000, the FASB issued SFAS No. 138, Accounting for
Certain Derivative Instruments and Hedging Activities, an amendment of
SFAS No. 133, which amends certain provisions of SFAS, No. 133 and
provides additional guidance. The Plan has adopted SFAS No. 133, as
amended, as of January 1, 2001. Management has determined that the
impact of SFAS No. 133, as amended, is not material to the Plan's
financial statements.
3. RELATED PARTIES
The Plan invests in Company common stock and shares of
common/collective trusts and mutual funds managed by Vanguard.
Transactions in such investments qualify as party-in-interest
transactions, which are exempt from the prohibited transaction rules.
4. TAX STATUS
The trust established under the Plan to hold the Plan's assets is
qualified pursuant to the appropriate section of the Internal Revenue
Code (the "Code"), and, accordingly, the Plan is exempt from income
taxes. The Plan has obtained a favorable tax determination letter from
the Internal Revenue Service (the "IRS") dated January 22, 1997. The
Plan has been amended since receiving the determination letter.
However, the Company believes that the Plan and related trust continue
to qualify and operate as designed. On December 13, 2001, the Company
submitted the Plan, as amended and restated, to the IRS for the purpose
of securing a new determination on the qualified status of the Plan.
The Company has identified two operational failures, both involving
participation eligibility. The Company has submitted a corrective
action plan to the IRS under the Voluntary Correction of Operational
Failures Program and is awaiting final approval of the correction plan.
Upon submission of the proposed corrective action plan to the IRS
during the Plan year ended December 31, 2001, the Company made
corrective contributions on behalf of the affected employees in
compliance with the appropriate section of the IRS Code. The total
amount of the corrective contributions approximated $64,000.
5. INVESTMENTS
The following table presents the Plan's investments as of December 31,
2001 and 2000:
December 31, 2001 December 31, 2000
Fair Value Fair Value
----------------- -----------------
* Uniroyal Technology Corporation
Common Stock Fund $ 1,664,053 $ 2,317,690
* Vanguard Windsor Fund 708,729 639,706
* Vanguard Explorer Fund 843,134 812,438
Vanguard Morgan Growth Fund 95,188 107,245
* Vanguard Wellesley Income Fund 1,294,784 1,233,394
Vanguard Long-Term Corporate Fund 608,246 390,946
* Vanguard Prime Money Market Fund 1,646,353 1,955,391
* Vanguard Windsor II Fund 3,073,819 3,155,104
* Vanguard Retirement Savings Trust 1,286,550 1,417,354
Vanguard International Growth Fund 201,556 221,611
* Vanguard 500 Index Fund 656,019 921,808
Vanguard Intermediate-Term Corporate Fund 65,848 -
Participant Loans - 3,228
------------- -------------
Total $ 12,144,279 $ 13,175,915
============= =============
*Plan's investments that represent 5 percent or more of the Plan's net
assets.
A portion of the Stock Fund that represents the Company's contributions
to the Plan is non-participant directed. Information about the
non-participant directed portion of the Stock Fund and the significant
components of the changes in the non-participant directed portion of
the Stock Fund is as follows:
December 31, December 31,
2001 2000
------------- -------------
Non-participant directed portion of the Stock Fund $ 1,369,552 $ 1,675,644
For the Year Ended
December 31, 2001
------------------
Changes in the non-participant portion of the Stock Fund:
Contributions $ 2,234,940
Benefits paid to participants (1,070,061)
Net depreciation (1,411,511)
Administrative expenses (59,460)
-------------
Net decrease $ (306,092)
=============
6. SUBSEQUENT EVENT
Effective June 1, 2002, the Plan was amended to, among other things,
permit participants to direct the investment of vested monies,
attributable to matching and special contributions, in funds other
than the Company Stock Fund.
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
SCHEDULE H, LINE 4 (i) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
Current
Identity of Issue Investment Type Cost Value
- ----------------------------- -------------------------------- ------------ ------------
Uniroyal Technology Corporation
Common Stock Fund Company Stock Fund $ 3,646,004 $ 1,664,053
Vanguard Windsor Fund Registered Investment Company 642,070 708,729
Vanguard Explorer Fund Registered Investment Company 911,160 843,134
Vanguard Morgan Growth Fund Registered Investment Company 97,885 95,188
Vanguard Wellesley Income Fund Registered Investment Company 1,300,506 1,294,784
Vanguard Long-Term Corporate
Fund Registered Investment Company 615,324 608,246
Vanguard Prime Money Market
Fund Registered Investment Company 1,646,353 1,646,353
Vanguard Windsor II Fund Registered Investment Company 2,958,859 3,073,819
Vanguard Retirement Savings Trust Common/Collective Trust 1,286,550 1,286,550
Vanguard International Growth
Fund Registered Investment Company 263,306 201,556
Vanguard 500 Index Fund Registered Investment Company 751,296 656,019
Vanguard Intermediate-Term
Corporate Fund Registered Investment Company 66,906 65,848
------------ ------------
Total $ 14,186,219 $ 12,144,279
============ ============
UNIROYAL TECHNOLOGY CORPORATION SAVINGS PLAN
SCHEDULE H, LINE 4 (j) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
Current Value
Historical of Asset on Historical
Identity of Party Involved Purchase Selling Cost of Transaction Net Gain
Description of Asset Price Price Asset Date (Loss)
- ---------------------------------------- ------------- ------------- ----------- --------------- -------------
Single Transaction
- ------------------
Uniroyal Technology Corporation Common
Stock Fund $ 1,512,232 $ 1,512,232
Series of Transactions
- ----------------------
Uniroyal Technology Corporation Common
Stock Fund $ 2,469,460 $ 2,469,460
Number of Transactions 35
Uniroyal Technology Corporation Common
Stock Fund $ 1,299,878 $ 640,455 $ 1,299,878 $ 659,423
Number of Transactions 150
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Uniroyal
Technology Corporation, which administers the Uniroyal Technology Corporation
Savings Plan, has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNIROYAL TECHNOLOGY CORPORATION
SAVINGS PLAN
DATE: July 15, 2002 By:/s/ Martin J. Gutfreund
-----------------------
Martin J. Gutfreund
Chairman, Uniroyal Technology Corporation
Employee Benefits Committee