UNITED STATES 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 [FEE REQUIRED] For the fiscal year ended December 31, 1995 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: A. Full title of the plan and the address of the plan, if different from that of the issuer named below: STB SYSTEMS, INC. 401(k) SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: STB SYSTEMS, INC. 1651 North Glenville Drive Richardson, Texas 75081 REQUIRED INFORMATION The following financial statements and forms are furnished with this Form 11-K Annual Report for the STB Systems, Inc. 401(k) Savings Plan (the "Plan"): 1. Statement of Net Assets Available for Plan Benefits for the Plan's Calendar Years Ending December 31, 1994 and 1995. 2. Statement of Changes in Net Assets Available for Plan Benefits for the Plan's Calendar Year Ending December 31, 1995. 3. Item 27a (Schedule of Assets Held for Investment Purposes as of December 31, 1995) (Schedule 1). 4. Item 27d (Schedule of Reportable Transactions for the Plan's Calendar Year Ended December 31, 1995). Each of the statements set forth in items 1 through 4 above has been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended. -1- STB SYSTEMS, INC. 401(k) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS - ----------------------------------------------------------------------------- December 31, ---------------------- 1995 1994 --------- -------- ASSETS Investments (Note 3) $ 873,853 $573,988 Participant notes receivable 12,654 5,643 --------- -------- Net assets available for plan benefits $ 886,507 $579,631 --------- -------- --------- -------- The accompanying notes are an integral part of the financial statements. 2 STB SYSTEMS, INC. 401(k) SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS - ----------------------------------------------------------------------------- Year Ended December 31, 1995 ------------ Additions to net assets: Participant contributions $242,553 Employer contributions 35,677 Investment income: Unrealized gains 82,234 Interest income 8,008 Other 1,948 -------- 370,420 -------- Deductions from net assets: Distributions paid to participants 63,544 -------- 63,544 -------- Net increase in net assets available for plan benefits 306,876 -------- Net assets available for plan benefits: Beginning of year 579,631 -------- End of year $886,507 -------- -------- The accompanying notes are an integral part of the financial statements. 3 STB SYSTEMS, INC. 401(k) SAVINGS PLAN NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ----------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following description of the STB Systems, Inc. 401(k) Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Plan, established in 1991, is a nondiscriminatory defined contribution plan for all employees of the Company who have completed six months of credited service and elect to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), and has been amended to incorporate legislative changes required by the various tax acts enacted since 1984. CONTRIBUTIONS Eligible employees may elect to make contributions to the Plan by means of compensation reductions of up to 15% of their compensation. Employees may allocate their contributions to investment options in 1% increments. The Company matches 25% of each dollar of employee tax deferred contributions up to a maximum of 4% of each employee's annual pay. PARTICIPANTS' ACCOUNTS Participants' accounts are credited with the participants' contributions and an allocation of (a) the Company's contribution and (b) Plan earnings. VESTING OF CONTRIBUTIONS Participants' contributions to the Plan are 100% vested at all times. Employer contributions to the Plan are vested in accordance with a Plan document schedule based on the participant's length of service with the Company. The schedule provides for full vesting after five years of credited service. INVESTMENT OPTIONS Eligible participants have five investment options including a Fixed Income option, a Balanced option, a Growth stock option, an Aggressive Growth option, and a Bond option. On February 14, 1995, participants in the Plan were granted a one-time option to reallocate existing participant investment accounts to purchase STB Systems, Inc. common stock in conjunction with the Company's initial public offering which became effective February 14, 1995. The assets from a predecessor custodian remain with New England Company as custodian and are included in Plan assets. These assets are a prior fixed income option. No further contributions can be made to this investment option. Participants may change their investment options daily. 4 STB SYSTEMS, INC. 401(k) SAVINGS PLAN NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ----------------------------------------------------------------------------- PAYMENT OF BENEFITS In the event of a participant's termination of employment, retirement, disability, or death, the participant or beneficiary may elect to receive an amount equal to the vested value of their account in either a lump-sum or periodic payments of substantially equal installments at least annually. At December 31, 1995, $6,076 remained in the Plan which related to an employee who withdrew from the Plan during 1995. PARTICIPANT NOTES RECEIVABLE Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balance. All loans are required to be repaid within five years unless the loan is to be used for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at prime plus 1%. Principal and interest are repaid through payroll deductions. FORFEITED ACCOUNTS At December 31, 1995, forfeited nonvested accounts totaled $1,869. These funds were held in a Money Market account at December 31, 1995 and will be used to reduce future employer contributions. EXPENSES OF ADMINISTERING THE PLAN The Company pays expenses incurred in the administration of the Plan, except for expenses relating to assets held by New England Company which are paid by the participants. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared in accordance with generally accepted accounting principles. Assets are stated at market value; unrealized appreciation and depreciation of the assets are reflected in the asset balances. Gains or losses on investments are realized at the time of sale. FEDERAL INCOME TAXES Management believes that the Plan is qualified under Section 401(a) of the Internal Revenue Code and therefore believes the trust is exempt from taxation under Section 501(a). The Internal Revenue Service granted a favorable letter of determination to the Plan in October, 1993. Generally, contributions to a qualified plan are deductible by the Company when made, earnings of the trust are tax exempt, and participants are not taxed on their benefits until withdrawn from the Plan. 5 STB SYSTEMS, INC. 401(k) SAVINGS PLAN NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ----------------------------------------------------------------------------- Management is unaware of any variations in the operations of the Plan from the terms of the Plan document as amended. The Plan has complied with the fidelity bonding requirements of ERISA. VALUATION OF SECURITIES Valuation of securities is based on the last recorded sales price at year-end, as reported by the principal security exchange on which the security is traded. Securities transactions are recorded on a trade-date basis. RECOGNITION OF INTEREST INCOME Interest is recognized on an accrual basis. DETERMINATION OF UNREALIZED GAIN OR LOSS ON INVESTMENTS Unrealized appreciation or depreciation in the fair value of investments held at year-end and gain or loss on sale of investments during the year are determined using the fair value at the beginning of the year or purchase price if acquired during the year. REPORTABLE TRANSACTIONS For the Plan year 1995, the reportable transactions as defined in Item 27d and Part V of Form 5500 are listed in Schedule II, page 13. 3. INVESTMENTS Investments are maintained by Nationwide Mutual Insurance Company as custodian, except for assets from a predecessor custodian which are held by New England Company. Investments representing 5% or more of net assets available for plan benefits at December 31, 1995 were as follows: Fair Fund Description Value ------------------------ -------- Company common stock $ 72,618 Fidelity Magellan 303,152 Fidelity Puritan 179,722 Bond Fund of America 46,141 Fixed Fund 77,654 Twentieth Century Growth 95,903 New England Guaranteed 96,794 6 STB SYSTEMS, INC. 401(k) SAVINGS PLAN NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ----------------------------------------------------------------------------- Investments representing 5% or more of net assets available for plan benefits at December 31, 1994 were as follows: Fair Fund Description Value ------------------------ -------- Fidelity Magellan $191,516 Fidelity Puritan 121,024 Bond Fund of America 29,287 Nationwide Guaranty 40,439 Twentieth Century Growth 89,146 New England Guaranteed 102,576 7 STB SYSTEMS, INC. 401(k) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT OPTIONS AT DECEMBER 31, 1995 - ----------------------------------------------------------------------------- COMPANY TWENTIETH NEW TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT -------- ------- -------- -------- ---------- ------- --------- ---------- ------ ------- ASSETS Investments $873,853 $72,618 $303,152 $179,722 $46,141 $77,654 $95,903 $96,794 $1,869 $ - Participant notes receivable 12,654 - - - - - - - - 12,654 -------- ------- -------- -------- ------- ------- ------- ------- ------ ------- Net assets available for plan benefits $886,507 $72,618 $303,152 $179,722 $46,141 $77,654 $95,903 $96,794 $1,869 $12,654 -------- ------- -------- -------- ------- ------- ------- ------- ------ ------- -------- ------- -------- -------- ------- ------- ------- ------- ------ ------- 8 STB SYSTEMS, INC. 401(k) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT OPTIONS AT DECEMBER 31, 1994 - ----------------------------------------------------------------------------- COMPANY TWENTIETH NEW TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT -------- ------- -------- -------- ---------- ------- --------- ---------- ------ ------- ASSETS Investments $573,988 $ - $191,516 $121,024 $29,287 $40,439 $89,146 $102,576 $ - $ - Participant notes receivable 5,643 - - - - - - - 5,643 -------- ------- -------- -------- ------- ------- ------- -------- ------ ------ Net assets available for plan benefits $579,631 $ - $191,516 $121,024 $29,287 $40,439 $89.146 $102,576 $ - $5,643 -------- ------- -------- -------- ------- ------- ------- -------- ------ ------ -------- ------- -------- -------- ------- ------- ------- -------- ------ ------ 9 STB SYSTEMS, INC. 401(k) SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY INVESTMENT OPTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 - ------------------------------------------------------------------------------ COMPANY TWENTIETH NEW TOTAL COMMON FIDELITY FIDELITY BOND FUND FIXED CENTURY ENGLAND MONEY LOAN PLAN STOCK MAGELLAN PURITAN OF AMERICA FUND GROWTH GUARANTEED MARKET ACCOUNT --------- ------- -------- -------- ---------- ------- --------- ---------- ------ ------- Additions to net assets: Contributions by: Participants $242,553 $ - $ 98,908 $ 64,735 $13,818 $29,068 $ 36,024 $ - $ - $ - STB Systems, Inc. 35,677 - 13,638 9,678 2,609 4,536 5,216 - - - Unrealized gains (losses) 82,234 (20,826) 60,975 23,632 5,327 - 12,537 - - 589 Interest income 8,008 - - - - 3,420 - 4,571 17 - Loan repayments - - 1,795 1,287 193 215 1,028 - - (4,518) Other 1,948 - 17 (309) (59) (6) 453 - 1,852 - Transfers between funds - 93,444 (43,682) (25,804) (3,433) 1,739 (22,264) - - -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- 370,420 72,618 131,651 73,219 18,455 38,972 32,994 4,571 1,869 (3,929) -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- Deductions from net assets: Distributions paid to participants 63,544 - 15,848 10,448 1,601 132 25,268 9,368 - 879 Loans to participants - - 4,167 4,073 - 1,625 969 985 - (11,819) -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- 63,544 - 20,015 14,521 1,601 1,757 26,237 10,353 - (10,940) -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- Net increases in net assets available for plan benefits 306,876 72,618 111,636 58,698 16,854 37,215 6,757 (5,782) 1,869 7,011 Net assets available for plan benefits: Beginning of year 579,631 - 191,516 121,024 29,287 40,439 89,146 102,576 - 5,643 -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- End of year $886,507 $ 72,618 $ 303,152 $179,722 $46,141 $77,654 $ 95,903 $ 96,794 $1,869 $ 12,654 -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- -------- -------- -------- -------- ------- ------- -------- -------- ------ -------- 10 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the STB Systems, Inc. 401(k) Savings Plan In our opinion, the accompanying statement of net assets available for plan benefits and the related statement of changes in net assets available for plan benefits present fairly, in all material respects, the net assets available for plan benefits of the STB Systems, Inc. 401(k) Savings Plan at December 31, 1995 and 1994, and the changes in net assets available for plan benefits for the year ended December 31, 1995, in conformity with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by ERISA. Such information has been subjected to the auditing procedures applied in the audit 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. /s/ PRICE WATERHOUSE LLP Dallas, Texas April 30, 1996 11 STB SYSTEMS, INC. 401(k) SAVINGS PLAN SCHEDULE I ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1995 - ------------------------------------------------------------------------------ Identity of issue, borrower, Description of investment including maturity date, lessor or similar party rate of interest, collateral, par, or maturity value - -------------------------------- ---------------------------------------------------- Current Cost value ---------- --------- STB Systems, Inc. Common Stock $ 91,928 $ 72,618 Fidelity Magellan Mutual Fund 303,152 303,152 Fidelity Puritan Mutual Fund 179,722 179,722 Bond Fund of America Bond Fund 46,141 46,141 Fixed Fund Nationwide Guaranty Fund (6.2% guaranteed interest rate for 1995) 77,654 77,654 Twentieth Century Growth Mutual Fund 95,903 95,903 New England Guaranteed New England Guaranteed (5.85% guaranteed interest rate for 1995) 96,794 96,794 Money Market Money Market 1,869 1,869 Participant Loans General purpose loans, maturing from 2/96 to 8/00 bearing interest at 7.0% to 9.75% 12,654 12,654 ---------- --------- $ 905,817 $ 886,507 ---------- --------- ---------- --------- 12 SCHEDULE II STB SYSTEMS, INC. 401(k) SAVINGS PLAN ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 - ----------------------------------------------------------------------------- Current value Description of asset Expense of asset on Identity of (include interest rate and Purchase Selling Lease incurred with Cost of transaction Net party involved maturity in case of loan) price price rental transaction asset date gain (loss) - -------------- -------------------------- -------- ------- ------ ------------- ------- ----------- ---------- Series of Transactions: Nationwide Company Common Stock $ 99,480 $ - $ - $ - $ 99,480 $ 99,480 $ - Mutual Fidelity Magellan 114,341 - - - 114,341 114,341 - Insurance Fidelity Magellan - 43,073 - - 43,073 43,073 - Company Fidelity Puritan 75,700 - - - 75,700 75,700 - Fixed Fund 33,819 - - - 33,819 33,819 - Twentieth Century Growth 42,268 - - - 42,268 42,268 - This supplemental schedule lists series of transactions in excess of 5% of the fair market values of the respective fund assets at the beginning of the year as required by the Department of Labor Rules and Regulations for Reporting and Disclosure. 13 EXHIBITS 23.1 Consent of Price Waterhouse LLP, Independent Accountants. 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees of the STB Systems 401(k) Savings Plan have duly caused this Annual Report to be signed on its behalf by the undersigned, hereunto duly authorized. STB SYSTEMS, INC. 401(k) SAVINGS PLAN By: Southwest Guaranty Trust Company, Plan Trustee Dated: June 27, 1996 By: /s/ CAROL J. PRESTON ------------------------------------------- Printed Name: Carol J. Preston --------------------------------- Title: Senior Vice President and Trust Officer ---------------------------------------- 15 INDEX TO EXHIBITS Exhibit Number - -------------- 23.1 Consent of Price Waterhouse LLP, Independent Accountants