1
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
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ___________
Commission file number 333-43947
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Frontstep, Inc. 401(K) Plan
(fka Symix Systems, Inc. 401(K) Plan as of December 31, 2000)
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Frontstep, Inc.
(fka Symix Systems, Inc.)
2800 Corporate Exchange Drive
Suite 400
Columbus, Ohio 43231
Exhibit Index on Page 4.
Page 1 of 17 Pages.
2
REQUIRED INFORMATION
--------------------
The following financial statements and supplemental schedules
for the Frontstep, Inc. 401(K) Plan are being filed herewith:
Description Page No.
- ----------- --------
Table of Contents to Financial Statements Page 6.
Audited Financial Statements:
- ----------------------------
Report of Independent Auditors Page 7.
Report of Independent Auditors Page 8.
Statements of Net Assets Available for Page 9.
Plan Benefits at December 31, 2000 and 1999
Statements of Changes in Net Assets Available Page 10.
for Plan Benefits for the Year Ended
December 31, 2000
Notes to Financial Statements for the Year Ended
December 31, 2000 Pages 11
through 14.
Supplemental Schedules:
- ----------------------
Item 27a - Schedule 1: Schedule of Assets Held for Investment Page 15.
Purposes at December 31, 2000
The following exhibit is being filed herewith:
Exhibit No. Description Page No.
- ----------- ----------- --------
23a Consent of Independent Auditors Page 16.
23b Consent of Independent Auditors Page 17.
Page 2 of 17 Pages.
3
SIGNATURES
----------
THE PLAN. Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
FRONTSTEP, INC. 401(K) PLAN
Date: June 28, 2001 By: /s/ Daniel P. Buettin
-----------------------------------
Daniel P. Buettin, Plan Trustee
Page 3 of 17 Pages.
4
FRONTSTEP, INC. 401(K) PLAN
ANNUAL REPORT ON FORM 11-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2000
INDEX TO EXHIBITS
-----------------
Exhibit No. Description Page No.
- ----------- ----------- --------
23a Consent of Independent Auditors Page 16.
23b Consent of Independent Auditors Page 17.
Page 4 of 17 Pages.
5
SYMIX SYSTEMS, INC. 401(K) PLAN
Financial Statements and Supplemental Schedule
December 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
Page 5 of 17 Pages.
6
SYMIX SYSTEMS, INC. 401(K) PLAN
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Report of Independent Auditors (Ernst & Young LLP) 2
Statements of Net Assets Available for Plan Benefits,
December 31, 2000 and 1999 3
Statement of Changes in Net Assets Available for Plan Benefits,
Year ended December 31, 2000 4
Notes to Financial Statements 5
SCHEDULE:
1 Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 2000 9
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 have been omitted because there is nothing to report.
Page 6 of 17 Pages.
7
[KPMG LOGO]
Two Nationwide Plaza Telephone 614 249 2300
Columbus, OH 43215-2577 Fax 614 249 2348
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Frontstep, Inc.:
We have audited the accompanying statement of net assets available for plan
benefits of Symix Systems, Inc. 401(K) Plan (Plan) as of December 31, 2000, and
the related statement of changes in net assets available for plan benefits for
the year 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 audit.
We conducted our audit 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above presented fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 2000, and the changes in net assets available for plan benefits
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audit was 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 at end of year 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. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule 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.
KPMG, LLP
Columbus, Ohio
June 8, 2001
Page 7 of 17 Pages.
8
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Symix 401(k) Profit Sharing Plan
We have audited the accompanying statement of net assets available for plan
benefits of the Symix 401(k) Profit Sharing Plan as of December 31, 1999. This
financial statement is the responsibility of the Plan's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit 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 statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
/s/ Ernst & Young LLP
-------------------------------
Columbus, Ohio
May 18, 2000
2
Page 8 of 17 Pages.
9
SYMIX SYSTEMS, INC. 401(K) PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2000 and 1999
2000 1999
----------- -----------
Assets:
Cash $ 5,413 1,138
Investments, at fair value 18,321,925 19,191,845
Investment income receivable 5,380 --
Contributions receivable -- 104,737
----------- -----------
Net assets available for plan benefits $18,332,718 19,297,720
=========== ===========
See accompanying notes to the financial statements.
3
Page 9 of 17 Pages.
10
SYMIX SYSTEMS, INC. 401(K) PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 2000
Additions:
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 1,379,570
Net depreciation in fair value of investments (5,069,788)
-----------
(3,690,218)
-----------
Contributions:
Participant 2,793,582
Employer 796,679
Rollover 255,826
-----------
3,846,087
-----------
Total additions 155,869
-----------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants or beneficiaries 1,120,871
-----------
Total deductions 1,120,871
-----------
Net decrease (965,002)
-----------
Net assets available for plan benefits:
Beginning of year 19,297,720
-----------
End of year $18,332,718
===========
See accompanying notes to the financial statements.
4
Page 10 of 17 Pages.
11
SYMIX SYSTEMS, INC. 401(K) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(1) PLAN DESCRIPTION
The following description of the Symix Systems, Inc. 401(k) Plan (the
Plan) provides only general information. Participants should refer to
the Summary Plan Description for a complete description of the Plan's
provisions.
The Plan is a defined contribution plan established October 1, 1989
covering substantially all employees of Frontstep, Inc. and
subsidiaries (the employer or Plan Sponsor). All employees who have
reached the age of 21 are eligible to participate in the Plan. Plan
enrollment is the first day of each quarter of the Plan year. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). Merrill Lynch serves as both Trustee
and recordkeeper for the Plan.
(a) CONTRIBUTIONS
Each year, participants may contribute the lesser of 18% of
their annual compensation, as defined in the Plan, or the
maximum permitted by the Internal Revenue Code (IRC). The
employer contributes an amount equal to 50% of the first 5% of
deferred compensation the participant contributes to the Plan.
Upon enrollment, participants may direct their contributions
into any of the Plan's investment options, including the
employer's common stock.
The employer matching contribution is allocated according to the
participant's elected investment option allocation percentages.
(b) DISTRIBUTIONS
On termination of service, due to death, disability, or
retirement, or upon attaining age 59 1/2, a participant may
elect to receive a lump-sum amount equal to the value of the
participant's vested interest in their account or annual
installments over a period not to exceed the participants
lifetime, or the joint lifetime of the participant and their
spouse. For termination of service due to other reasons, a
participant may receive the value of the vested interest in the
participant's account as a lump-sum distribution.
(c) VESTING
Amounts contributed by participants and earnings thereon become
immediately vested. Vesting of the employer's contribution and
related earnings becomes 100% vested after five years of
continuous service (20% per year of service with the employer).
(d) PARTICIPANT LOANS
Under the Plan, employees may borrow from their fund accounts up
to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from 1-5 years or up to 15 years for the
purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at prime
interest rate plus one percent. Principal and interest is paid
ratably through monthly payroll deductions.
5 (Continued)
Page 11 of 17 Pages.
12
SYMIX SYSTEMS, INC. 401(K) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(e) PARTICIPANTS ACCOUNTS
Each participant's account is credited with the participant's
contributions and allocations of (a) the employer's
contributions and (b) Plan earnings. Earnings of the Plan are
allocated to individual participant's accounts based on the
ratio of the participant's account balance in the appropriate
fund as of the preceding valuation date to the total fund
balance as of the preceding valuation date.
Upon termination of employment, a participant's nonvested
portion of employer contributions and related earnings are
forfeited. At December 31, 2000 forfeited nonvested accounts
totaled $265,566. These amounts are used to reduce future
employer contributions.
(f) PLAN TERMINATION
Although it has not expressed any intent to do so, the employer
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 would
become 100% vested in their employer contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America and present the net assets available
for plan benefits and changes in those net assets.
(b) INVESTMENTS
Plan investments are stated at fair value. The shares of the
employer's common stock are valued at its quoted market price.
The shares of registered investment companies are valued at
quoted market prices which represent the net asset value of
shares held by the Plan at year end. The participant loans are
valued at their outstanding balances, which approximate fair
value. The investment in the common/collective trust, which
holds guaranteed investment contracts, is stated at contract
value, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis and is
recognized when earned. Dividends are recorded on the
ex-dividend date.
(c) CONTRIBUTIONS
Employee contributions are recognized when withheld and employer
contributions are recognized when due. Rollovers are recognized
when approved by the Plan Sponsor and received by the Plan.
6 (Continued)
Page 12 of 17 Pages.
13
SYMIX SYSTEMS, INC. 401(K) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(d) DISTRIBUTIONS
Benefit distributions are recognized when paid.
(e) TRUSTEE AND ADMINISTRATIVE FEES
All costs and expenses of administering the Plan are borne by
the employer.
(f) USE OF ESTIMATES
The preparation of financial statements 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 to net assets
available for plan benefits during the reporting period. Actual
results could differ significantly from those estimates.
(3) INVESTMENTS
The following presents investments that represent 5% or more of the
Plan's net assets:
2000 1999
Frontstep, Inc. Common Stock $ -- 2,657,620
Merrill Lynch Retirement Preservation Trust 1,444,461 1,528,879
Merrill Lynch Fundamental Growth Fund 5,268,145 5,111,866
GAM International Fund 1,159,313 1,511,051
Merrill Lynch Balanced Capital Fund 1,466,857 1,343,697
Merrill Lynch Growth Fund 1,502,607 1,610,166
Merrill Lynch S&P 500 Index Fund 926,850 --
MFS Massachusetts Investors Trust 3,000,759 2,985,079
Davis New York Venture Fund 1,115,841 --
During 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
depreciated in value as follows:
Mutual funds $(2,397,667)
Common stock (2,672,121)
-----------
$(5,069,788)
===========
7 (Continued)
Page 13 of 17 Pages.
14
SYMIX SYSTEMS, INC. 401(K) PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(4) TAX STATUS
The Internal Revenue Service has determined and informed the Plan
Sponsor by a letter dated October 30, 1996, that the Plan and related
trust are designed in accordance with applicable sections of the IRC.
Although the Plan has been amended since receiving the determination
letter, the Plan Sponsor 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.
(5) 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
Page 14 of 17 Pages.
15
SCHEDULE 1
SYMIX SYSTEMS, INC. 401(K) PLAN
Schedule of Assets Held for Investment Purposes at End of Year
Plan number: 001
EIN: 31-1093175
December 31, 2000
(a) (b) (c) (e)
- ----- ---------------- ------------------------------------------------- ------------
IDENTITY OF DESCRIPTION OF INVESTMENT
ISSUE, BORROWER, INCLUDING MATURITY DATE,
LESSOR, OR RATE OF INTEREST, COLLATERAL, CURRENT
SIMILAR PARTY PAR, OR MATURITY VALUE VALUE
- ----- ---------------- ------------------------------------------------- ------------
(*) Frontstep, Inc. Frontstep, Inc. common stock, 256,521 shares $ 881,663
(*) Merrill Lynch Retirement Preservation Trust, 1,444,461 1,444,461
Munder Future Technology Fund A, 5,904 shares 51,897
(*) Merrill Lynch Fundamental Growth Fund, 237,090 shares 5,268,145
GAM International Fund, 57,908 shares 1,159,313
Munder Micro Cap Equity Fund, 3,985 shares 88,676
(*) Merrill Lynch Balanced Capital Fund, 48,395 shares 1,466,857
(*) Merrill Lynch Corporate Bond Fund, 40,037 shares 436,407
(*) Merrill Lynch Growth Fund, 72,871 shares 1,502,607
Van Kampen Aggressive Growth Fund, 10,010 shares 222,512
(*) Merrill Lynch S&P 500 Index Fund, 57,284 shares 926,850
Van Kampen Emerging Growth Fund, 2,844 shares 178,522
Alliance Capital Premier Growth Fund, 2,279 shares 60,860
AIM Value Fund, 7,213 shares 90,240
MFS Massachusetts Investors Trust, 149,888 shares 3,000,759
Davis New York Venture Fund, 38,825 shares 1,115,841
(*) Merrill Lynch Pending Steelment Fund, 400 shares 400
(*) Various Participant loans at various rates and due dates 362,032
(*) Merrill Lynch RCMA Option 63,883
-----------
$18,321,925
===========
* Indicates party-in-interest to the Plan.
See accompanying independent auditors' report.
9
Page 15 of 17 Pages.