SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
REPORT OF EMPLOYEE STOCK OWNERSHIP PLAN
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2000
NBTY, INC.
(Exact name of Registrant as specified in Charter)
DELAWARE 01666 11-2228617
(State or other (Commission File No.) (IRS Employer
jurisdiction of identification
Incorporation) number)
90 Orville Drive, Bohemia, New York 11716
(Address of principal executive office and zip code)
Registrant's Telephone Number: (631) 567-9500
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
YEARS ENDED DECEMBER 31, 2000 AND 1999
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORT
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
YEARS ENDED DECEMBER 31, 2000 AND 1999
CONTENTS
Page
----
Independent Auditors' Report 1
Financial statements:
Statements of net assets available for benefits 2
Statements of changes in net assets available
for benefits 3
Notes to financial statements 4 - 8
Supplemental schedule:
Schedule of assets held for investment purposes
at end of year 9
Independent Auditors' Report
----------------------------
Trustee of NBTY, Inc. Employees' Stock Ownership Plan
Bohemia, New York
We have audited the accompanying statements of net assets available for
benefits of NBTY, Inc. Employees' Stock Ownership Plan (the "Plan") as of
December 31, 2000 and 1999, and the related statements of changes in net
assets available for 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. 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 then ended 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 as of December 31, 2000 is presented for the
purpose 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.
NUSSBAUM YATES & WOLPOW, P.C.
Melville, New York
May 17, 2001
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
2000 1999
---- ----
Assets:
Investment in NBTY, Inc. common
stock, at fair value $14,549,744 $35,324,908
Employer contribution receivable 25,000 -
Cash and cash equivalents 6,129 25,389
--------------------------
Net assets available for benefits $14,580,873 $35,350,297
==========================
See notes to financial statements.
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
---- ----
Investment income:
Net appreciation (depreciation) in fair
value of investments $(20,273,396) $13,687,593
Interest 1,492 1,390
Employer contributions 1,048,288 1,117,350
----------------------------
(19,223,616) 14,806,333
Distributions to participants 1,545,808 820,964
----------------------------
Net increase (decrease) (20,769,424) 13,985,369
Net assets available for benefits:
Beginning of year 35,350,297 21,364,928
----------------------------
End of year $ 14,580,873 $35,350,297
============================
See notes to financial statements.
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
1. Description of Plan
The following description of the NBTY, Inc. Employees' Stock Ownership
Plan (the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is an employee stock ownership plan covering substantially all
employees of NBTY, Inc. and its subsidiaries (the "Employer") who are
employed at calendar year end, have completed one year of service and who
have attained the age of twenty and one-half. The assets of the plan are to
be invested primarily in common stock of NBTY, Inc. for the purpose of
providing its eligible employees with the benefits of ownership of common
stock of NBTY, Inc. under the terms of the Plan. The Plan is designed to
comply with Section 4975(e)(7) and the regulations thereunder of the Internal
Revenue Code of 1986, as amended (Code) and is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Assets of the Plan are held by a trust established under the Plan. The
Employer shall have responsibility for the administration of the Plan.
No distributions from the Plan will be made until a participant
retires, dies, or otherwise terminates employment with the Employer.
Distributions are made in the form of Company common shares plus cash for any
fractional share.
Each participant is entitled to exercise voting rights attributable to
the shares allocated to his or her account and is notified by the Trustee
prior to the time that such rights are to be exercised. The Trustee is not
permitted to vote any share for which instructions have not been given by a
participant.
Employer Contributions
The Plan provides that the Board of Directors of the Employer, at its
sole discretion, shall determine the amount, if any, that the Employer shall
contribute either in cash or shares of the Employer's common stock to the
trust fund for each Plan year, not to exceed the maximum amount allowed by
the applicable provisions of the Internal Revenue Code. Participants are
neither required nor permitted to make any contributions under the Plan.
Participants' Accounts
Employer contributions are allocated to each participant's account in
the same proportion that each participant's considered compensation bears to
the total considered compensation of all participants for such year. Any
earnings or losses are allocated in the same proportion that each
participant's account bears to the total of all such accounts as of the
beginning of the Plan year. Upon termination of employment, forfeitures are
allocated to the other eligible participants in the same manner as Employer
Contributions. All shares of NBTY, Inc. common stock are allocated to
participants' accounts at the end of the calendar year.
Vested Benefits
If a participant's employment with the Employer is terminated at or
after the participant attains age 65, and completes five years of service,
or if the participant's employment is terminated at any age because of
disability (as defined in the Plan), the participant shall be vested in and
entitled to receive 100% of the entire amount then in the participant's
account. In the event that the termination of a participant is caused by
death, the beneficiary shall be vested in and entitled to receive 100% of
the entire amount then in the participant's account. If a participant's
employment with the Employer is terminated before age 65, for any reason
other than disability or death, the participant shall be entitled to an
amount equal to a percentage of the balances then in the participant's
account, according to the following schedule:
Years of Service Percentage
---------------- ----------
Less than 5 0%
5 or more 100%
For every plan year, once the Plan is initially classified as top
heavy, vesting would be as follows:
Years of Service Percentage
---------------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
Payment of Benefits
Payments of stock or cash shall be in the form of a lump sum or in
installments over a period not exceeding 15 years, at the election of the
participant or beneficiary. Payments related to the participant's Employer
stock account will be made in Employer stock. The participant's general
investment account will be distributed in the form of cash or Employer
stock. Unless the participant elects otherwise, the payments shall commence
no later than one year after the close of the Plan year in which the
participant terminates employment due to death, disability or retirement,
and no later than five years after the close of the plan year in which the
participant terminates employment for any other reason.
If, and only if, the Employer shares are not readily tradable on an
established market, then any participant who is otherwise entitled to a
distribution from the Plan shall have the right to require that the Employer
repurchase any such shares under a fair valuation formula established by an
independent appraiser appointed pursuant to the provisions of the Plan. The
amount paid for Employer shares under this put option shall be paid in
substantially equal periodic payments (not less frequently than annually)
over a period beginning not later than 30 days after the exercise of the put
option and not exceeding five years, such mode of payment in the Employer's
sole discretion. There shall be adequate security provided and reasonable
interest paid on any unpaid balance due resulting from such put option.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis
of accounting.
Investment Valuation
Investments of the Plan are stated at fair value. Securities traded in
public markets are valued at their quoted market prices. Purchases and sales
of securities are reflected on a trade-date basis.
Payment of Benefits
Benefits are recorded when paid. The value of a participant's benefit
is determined as of the year-end immediately preceding the date benefits are
paid.
Benefits Payable to Terminated Participants
Benefits payable to all Plan participants (both active and terminated)
are included in "net assets available for benefits." The amount payable to
terminated participants is $219,057 and $570,679 at December 31, 2000 and
1999.
Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Plan considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
3. Investments
The following table presents the Plan's investment in NBTY, Inc.
common stock as determined by the last quoted trading price on December 31,
2000 and 1999.
2000 1999
- -------------------------------------- --------------------------------------
Number of Fair Number of Fair
Shares Value Cost Shares Value Cost
3,063,104 $14,549,744 $4,883,475 3,054,995 $35,324,908 $3,889,132
4. Related Party Transactions
During 2000 and 1999, the Plan purchased in the open market 140,000
shares and 175,000 shares for $1,023,288 and $1,117,350, respectively, of the
Employer's common stock as part of its investment portfolio. These
transactions qualify as party-in-interest.
5. Administration of Plan Assets
The Trustee, appointed by the Employer, has sole responsibility for
administration of the trust established under the Plan and for the
management of the assets of the Plan held under the trust. Certain
administrative functions are performed by officers or employees of the
Employer. No such officer or employee receives compensation from the Plan.
Administrative expenses of the Plan are paid directly by the Employer.
6. Plan Termination
Although the Employer has not expressed any intention to do so, it has
the right to discontinue its contributions and to terminate the Plan at any
time, subject to the provisions of the Plan and ERISA. In the event of Plan
termination, participants will become fully vested in their respective
account balances.
7. Tax Status
The Internal Revenue Service has determined and informed the Company by
a letter dated April 19, 2000 that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of
the Code. 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 applicable requirements of the Code.
NBTY, INC. EMPLOYEES' STOCK OWNERSHIP PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
ID#: 11-2228617
PN#: 001
(c)
(b) Description of Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
--- ------------------ ----------------------------- ---- -------
* NBTY, Inc. 3,063,104 shares of $4,883,475 $15,549,744
common stock
<FN>
* Party-In-Interest to the Plan
</FN>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees have caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date June 25, 2001
NBTY, Inc. Employees' Stock
Ownership Plan
By: /s/ Harvey Kamil
-------------------------
Harvey Kamil