SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 11-K/A
(Amendment No. 1)
ANNUAL REPORT
Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 1-9802
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
SYMBOL TECHNOLOGIES, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, New York 11742-1300
Symbol Technologies, Inc., on behalf of the Symbol Technologies, Inc. 1997
Employee Stock Purchase Plan, hereby files Amendment No. 1 to its Annual Report
on Form 11-K for the year ended December 31, 2003.
This amendment is being filed to correct a typographical error contained in
the electronic version of Deloitte & Touche LLP's consent filed with the
Securities and Exchange Commission. The correct date of Deloitte & Touche LLP's
report referenced in the consent should be March 25, 2004, not March 30, 2004.
There are no other changes to the Form 11-K filed on March 30, 2004, for
the year ended December 31, 2003.
SYMBOL TECHNOLOGIES, INC.
1997 Employee Stock Purchase Plan
Index to Financial Statements
PAGES
Independent Auditors' Report 2
Statements of Financial Condition as of
December 31, 2003 and 2002. 3
Statements of Operations and Changes in
Participants' Equity for the years ended December 31, 2003, 2002
and 2001. 4
Notes to Financial Statements 5-9
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Symbol Technologies, Inc.
and Participants of the Symbol Technologies, Inc.
1997 Employee Stock Purchase Plan.
We have audited the accompanying statements of financial condition of the Symbol
Technologies, Inc. 1997 Employee Stock Purchase Plan (the "Plan") as of December
31, 2003 and 2002, and the related statements of operations and changes in
participants' equity for each of the three years in the period ended December
31, 2003. 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 financial position of the Plan as of December 31,
2003 and 2002, and the results of its operations and changes in its
participants' equity for each of the three years in the period ended December
31, 2003, in conformity with accounting principles generally accepted in the
United States of America.
/s/ DELOITTE & TOUCHE LLP
New York, New York
March 25, 2004
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SYMBOL TECHNOLOGIES, INC.
1997 Employee Stock Purchase Plan
Statements of Financial Condition
December 31, December 31,
2003 2002
---- ----
ASSETS
- ------
Participants account receivable $4,170,055 $2,507,931
Employer contribution receivable 735,892 442,576
---------- ----------
Total assets $4,905,947 $2,950,507
========== ==========
LIABILITIES
- -----------
Payable for stock purchases $4,905,947 $2,950,507
---------- ----------
Total liabilities 4,905,947 2,950,507
Participants' equity - -
---------- ----------
Total liabilities and
participants' equity $4,905,947 $2,950,507
========== ==========
See Notes to Financial Statements
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SYMBOL TECHNOLOGIES, INC.
1997 Employee Stock Purchase Plan
Statements of Operations and Changes in Participants' Equity
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2003 2002 2001
------------ ------------ ------------
Participant contributions $4,848,695 $5,867,692 $7,583,984
Employer contributions 735,892 958,469 1,253,233
---------- ---------- ----------
Total additions 5,584,587 6,826,161 8,837,217
---------- ---------- ----------
Stock Purchases - 3,452,828 4,151,991
Participant withdrawals 416,825 422,826 482,330
Amounts reserved for with-
holding taxes 261,815 - -
Amounts reserved for future stock
purchases 4,905,947 2,950,507 4,202,896
---------- ---------- ----------
Total deductions 5,584,587 6,826,161 8,837,217
---------- ---------- ----------
Net additions - -
Participants' equity, beginning - - -
of period ---------- ---------- ----------
Participants' equity, end of $ - $ - $ -
Period ========== ========== ==========
See Notes to Financial Statements
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SYMBOL TECHNOLOGIES, INC.
1997 Employee Stock Purchase Plan
Notes to Financial Statements
Years Ended December 31, 2003, 2002, and 2001
1. DESCRIPTION OF THE PLAN:
------------------------
The following description of the Symbol Technologies, Inc. (the "Company")
1997 Employee Stock Purchase Plan, (the "Plan"), provides only general
information. Participants should refer to the Plan document for a more
complete statement of the Plan's provisions.
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 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.
a. General Description
The Plan is an employee stock purchase plan that allows participants to
purchase shares of Symbol Common Stock ("Stock") through payroll
deductions. The Plan's fiscal year is divided into two six-month periods
(each, a "Payment Period"). The Payment Periods are January 1 to June 30
(the "First Half Payment Period") and July 1 to December 31 (the "Second
Half Payment Period")and represent the periods during which participants'
payroll deductions are accumulated. At the end of each Payment Period, the
participants' accumulated payroll deductions are used to purchase shares of
Stock. Participants may purchase shares of Stock for an amount equal to 85%
of the lesser of (1) the closing price of a share of Stock on the first
trading day of the Payment Period or (2) the closing price of a share of
Stock on the last trading day of the Payment Period (the "Option Price").
The purchase of shares by the Plan requires, under Securities and Exchange
Commission (the "Commission" or the "SEC") regulations, that the Company
have an effective registration statement covering the shares on file with
the SEC. As of June 30, 2003 the Company had not filed its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2003 or its Annual Report on
form 10K for the year ended December 31, 2002. Consequently, the Company
was deemed not to have an effective registration statement. As a result,
for the Plan year ending December 31, 2003, the Company was unable to
purchase and distribute shares for the First Half Payment Period, and could
not start the Second Half Payment Period, and extended the First Half
Payment Period until December 31, 2003 (the "Extended Payment Period").
During the Extended Payment Period, normal Eligibility, Participant
Contribution, Employer Contribution and Participant Refund Plan rules
applied. (See Note 4., elsewhere herein.) For Plan years ended December 31,
2002 and December 31, 2001, the Plan operated on the basis described in the
preceding paragraph.
The Plan was approved by the Company's stockholders at the annual meeting
of Shareholders held on May 5, 1997. On May 6, 2002 the Shareholders
approved an amendment to the plan to increase the authorized number of
shares covered by the plan by 3 million shares to 4,898,438 shares. The
Stock subject to the options under the Plan shall be authorized but
unissued common stock, treasury shares or shares purchased on the open
market. The aggregate number of shares which may be issued pursuant to the
Plan is 4,898,438. At December 31, 2003, participants in the Plan had
purchased 2,476,826 shares of Stock since the Plan's inception and had
accumulated payroll deductions during the Extended Payment Period
sufficient to purchase
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617,037 shares of Stock subsequent to December 31, 2003. As is more fully
described in Notes 2 and 4 below, the Company is required to collect
withholding taxes on the taxable income realized upon the purchase of
shares. Participating associates in the United States were offered the
choice of either remitting the amount of withholding in cash or authorizing
a reduction in shares allocated equivalent to the amount of withholding.
Accordingly, allocated shares were reduced by 36,452 shares resulting in a
net allocation of 580,585 shares, leaving 1,804,575 shares of Stock
available for future purchases by Plan participants.
The Plan is neither qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended, nor subject to any of the provisions of the
Employee Retirement Income Security Act of 1974 (commonly known as
"ERISA").
b. Eligibility
All full-time employees of the Company or any of its participating
subsidiaries who have completed 90 days of continuous employment on or
before the first day of any Payment Period and all part-time employees of
the Company or its participating subsidiaries who satisfy certain service
requirements and who have completed 90 days of continuous employment on or
before the first day of any Payment Period are eligible to participate in
the Plan. Eligible employees may only enroll in the Plan at the beginning
of a Payment Period.
c. Stock Purchases
Following the last trading day of each Payment Period, the amount of each
participant's accumulated payroll deductions is applied towards the
purchase of the maximum number of whole and fractional shares of Stock
possible, determined by dividing the participant's total contribution by
the per share Option Price applicable for that Payment Period. The maximum
number of shares of Stock a participant can purchase is 2,500 shares.
Purchased shares of Stock are transferred to a brokerage account in the
name of the participant at a securities brokerage firm approved by a
committee appointed by the Board of Directors of the Company.
d. Participant Contributions
Participants may elect to have 2% to 10% of their "Base Salary" (as defined
in the Plan) deducted on an after-tax basis for the purchase of Stock.
Participants may only increase their deduction percentages at the beginning
of a Payment Period and may not decrease their deduction more often than
once during any Payment Period. No interest accrues or is paid on
participants' accumulated payroll deductions. Once made, the Company may
use the payroll deductions for any corporate purpose, and the Company has
no obligation to segregate employees' payroll deductions from any other
funds of the Company or to hold funds representing the same pending the
application thereof to the purchase of shares at the end of each Payment
Period in accordance with the Plan.
e. Employer Contributions
The 15% discount from market value granted to Plan participants on the
purchase of shares of Stock at the end of each Payment Period represents
the Company's non-cash contribution to the Plan. These non-cash
contributions amounted to $735,892, $958,469, and $1,253,233 for the years
ended December 31, 2003, 2002 and 2001, respectively.
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f. Participant Refunds
Plan participants may withdraw from the Plan (in whole but not in part) at
any time prior to the last day of a Payment Period by properly notifying
the Company. A participant's accumulated payroll deductions for the Payment
Period prior to withdrawal from the Plan will be promptly refunded to the
participant without interest (unless required by law).
Participants who terminate their employment relationship with the Company
are not eligible to continue in the Plan. All payroll deductions
accumulated during the Payment Period through the date of such cessation of
employment are refunded to the employee or, in the event of the employee's
death, to his or her estate.
g. Administrative Expenses
The Company bears all costs in connection with the Plan including
administrative fees and all fees associated with the issuance of Stock.
Administrative expenses related to the Plan amounted to approximately
$87,000, $67,000, and $54,000 for the years ended December 31, 2003, 2002,
and 2001, respectively.
h. Plan Termination
The Plan may be terminated at any time by the Company's Board of Directors,
but such termination shall not affect options then outstanding under the
Plan. If at any time shares of Stock reserved for the purpose of the Plan
remain available for purchase but not in sufficient number to satisfy all
then unfilled purchase requirements, the available shares shall be
apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise
be used to purchase Stock, and the Plan shall terminate. Upon such
termination or any other termination of the Plan, all payroll deductions
not used to purchase stock will be refunded, without interest (unless
required by law).
2. INCOME TAX STATUS:
For 2003 the Plan did not fulfill the requirements of an "employee stock
purchase plan" as defined in Section 423 of the Internal Revenue Code of
1986. As such, the participating employees recognized taxable income upon
the purchase of shares, and the Company is entitled to a tax deduction for
income tax purposes in connection with the purchases by participants of
shares of Stock under the Plan during the period of January 1, 2003 through
December 31, 2003.
3. GOVERNMENT INVESTIGATIONS:
The SEC has issued a Formal Order Directing Private Investigation and
Designating Officers to Take Testimony with respect to certain accounting
matters, principally concerning the timing and amount of revenue recognized
by Symbol during the period of January 1, 2000 through December 31, 2001 as
well as the accounting for certain reserves, restructurings, certain option
programs and several
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categories of cost of revenue and operating expenses. The Company is
cooperating with the SEC, and has produced hundreds of thousands of
documents and numerous witnesses in response to the SEC's inquiries. Symbol
and approximately ten or more former employees have received so-called
"Wells Notices" stating that the SEC Staff in the Northeast Regional Office
is considering recommending to the Commission that it authorize civil
actions against Symbol and the individuals involved alleging violations of
various sections of the federal securities laws and regulations. Pursuant
to an action against Symbol, the Commission may seek permanent injunctive
relief and appropriate monetary relief, including a fine, from the Company.
The United States Attorney's Office for the Eastern District of New York
(the "Eastern District") has commenced a related investigation. Symbol is
cooperating with that investigation, and has produced documents and
witnesses in response to the Eastern District's inquiries. The Eastern
District could file criminal charges against Symbol and seek to impose a
fine upon the Company and other relief the Eastern District deems
appropriate.
Any criminal and/or civil action or any negotiated resolution may involve,
among other things, injunctive and equitable relief, including material
fines, which could have a material adverse effect on Symbol's business,
results of operations and financial condition.
In addition, as a result of the investigations, various governmental
entities at the federal, state and municipal levels may conduct a review of
the Company's supply arrangements with them to determine whether Symbol
should be considered for debarment. If the Company were debarred, it would
be prohibited for a specified period of time from entering into new supply
arrangements with such government entities. In addition, after a government
entity has debarred Symbol, other government entities are likely to act
similarly, subject to applicable law. Governmental entities constitute an
important customer group for Symbol, and debarment from governmental supply
arrangements at a significant level could have an adverse effect on
Symbol's business, results of operations and financial condition.
In March 2003, Robert Asti, Symbol's former Vice President--North America
Sales & Services--Finance, who left Symbol in March 2001, pleaded guilty to
two counts of securities fraud in connection with matters that are the
subject of the Commission and the Eastern District investigations. These
counts included allegations that Mr. Asti acted together with other unnamed
high-ranking corporate executives at Symbol to, among other things,
manufacture revenue through sham "round-trip" transactions. The Commission
has also filed a civil complaint asserting similar allegations against Mr.
Asti.
In June 2003, Robert Korkuc, Symbol's former Chief Accounting Officer, who
left Symbol in March 2003, pleaded guilty to two counts of securities fraud
in connection with matters that are the subject of the Commission and the
Eastern District investigations. These counts included allegations that Mr.
Korkuc acted with others at Symbol in a fraudulent scheme to inflate
various measures of Symbol's financial performance. The Commission also has
filed a civil complaint asserting similar allegations against Mr. Korkuc.
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Symbol is attempting to negotiate a resolution with each of the Commission
and the Eastern District to the mutual satisfaction of the parties
involved. In either case, an agreement has not yet been reached and there
is no guarantee that Symbol will be able to successfully negotiate a
resolution.
4. SUBSEQUENT EVENTS:
As previously disclosed elsewhere in this report, as of June 30, 2003, the
Company had not filed its Annual Report on Form 10-K for the year ended
December 31, 2002 nor had it filed its Quarterly Report on Form 10-Q for
the quarter ended March 31, 2003 with the SEC, as required by the
Securities Exchange Act of 1934 (the "Exchange Act"). Consequently, the
Company was deemed not to have and effective registration statement and as
a result, the Plan was not able to purchase shares in satisfaction of
participant contributions for the First Half Payment Period nor was the
Plan permitted to conduct an open enrollment for new participants. Acting
on a resolution properly made and approved by the Compensation Committee of
the Company's Board of Directors, the First Half Payment Period was
extended to incorporate the Second Half Payment Period, resulting in the
Extended Payment Period.
As of December 31, 2003 the Company had not filed its Quarterly Reports on
Forms 10-Q for the quarters ended September 30, 2003, June 30, 2003, and
March 31, 2003 with the SEC. Consequently, the Plan no longer satisfied the
requirements of an "employee stock purchase plan" as defined in Section 423
of the Internal Revenue Code of 1986, as amended. As a result, effective
January 1, 2004, the Company suspended the withholding of Participant
payroll deductions. On February 25, 2004, the Company filed the delinquent
Quarterly Reports on Forms 10-Q with the SEC, thereby curing the
deficiency.
Thereafter, the participants' accumulated amounts for the extended payment
period were used to purchase shares of stock at 85% of the closing price on
January 1, 2003, which represented the lesser of the closing prices at the
beginning and end of the extended payment period.
The Company filed its Annual Report on Form 10-K for the year ended
December 31, 2003 on March 12, 2004 and, as of the date of this report, is
current with all of its periodic reporting requirements as required by the
Exchange Act. The Company currently plans on conducting an open enrollment
and recommencing withholding of participant payroll deductions beginning
with the next normally occurring Second Half Payment Period.
Plan participants' net accumulated payroll deductions for the Extended
Payment Period ended December 31, 2003, amounted to $4,170,055 and have
been recorded as an amount receivable from the Company at December 31,
2003. Subsequent to December 31, 2003, $4,170,055 of these net accumulated
deductions were used to purchase 580,585 shares of Stock which were issued
to participants by the Company in March 2004. The 580,585 shares of Stock
purchased subsequent to December 31, 2003 had a market value of $4,905,947
as of the option price date which has been recorded as the liability
"Payable for stock purchases" at December 31, 2003.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration No. 333-26593 of
Symbol Technologies, Inc. on Form S-8 of our report dated March 25, 2004,
appearing in this Annual Report on Form 11-K/A (Amendment No. 1) of the Symbol
Technologies, Inc. 1997 Employee Stock Purchase Plan for the year ended December
31, 2003.
/s/ DELOITTE & TOUCHE LLP
New York, New York
March 25, 2004
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Stock
Option and Restricted Stock Committee, the administrator of the Symbol
Technologies, Inc. 1997 Employee Stock Purchase Plan, has duly caused this
Amendment No. 1 to the Annual Report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYMBOL TECHNOLOGIES, INC.
1997 Employee Stock Purchase Plan
March 31, 2004
By: /s/ Carole DeMayo
Senior Vice President
Human Resources
SYMBOL TECHNOLOGIES, INC.
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