SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[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 __________________
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
VTEL Corporation 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
Financial Statements and Supplemental Schedule
VTEL Corporation 401(k) Plan
Year ended December 31, 2000 with Report of Independent Auditors
VTEL Corporation 401(k) Plan
Financial Statements
and Supplemental Schedule
Year ended December 31, 2000
Contents
Report of Independent Auditors.................................................1
Financial Statements
Statements of Net Assets Available for Benefits................................3
Statement of Changes in Net Assets Available for Benefits......................4
Notes to Financial Statements..................................................5
Supplemental Schedule
Schedule H, line 4i, Schedule of Assets (Held at End of Year)..................9
Report of Independent Auditors
The Trustees
VTEL Corporation 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of the VTEL Corporation 401(k) Plan as of December 31, 2000 and 1999 and the
related statement of changes in net assets available for benefits for the year
ended December 31, 2000. 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 at
December 31, 2000 and 1999 and the changes in net assets available for benefits
for the year ended December 31, 2000 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 accompanying supplemental schedule of
assets (held at end of year) as of December 31, 2000, is presented for purposes
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.
1
The supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to auditing procedures applied in our
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.
May 25, 2001
2
VTEL Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
December 31
2000 1999
----------------------------------
Assets
Investments at fair value $ 23,021,889 $ 26,633,743
Cash 3,193 9,915
Employee contributions receivable 39,649 48,488
Employer contribution receivable 8,106 -
----------------------------------
Net assets available for benefits $ 23,072,837 $ 26,692,146
==================================
See accompanying notes.
3
VTEL Corporation 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2000
Additions:
Contributions:
Employee $ 2,204,032
Employer 239,785
Investment income:
Interest and dividends 163,079
Net depreciation in fair value of investments (2,525,130)
--------------
Total additions 81,766
Deductions:
Benefit payments 3,689,775
Administrative expense 11,300
--------------
Net decrease in net assets available for benefits (3,619,309)
Net assets available for benefits at beginning of year 26,692,146
--------------
Net assets available for benefits at end of year $ 23,072,837
==============
See accompanying notes.
4
VTEL Corporation 401(k) Plan
Notes to Financial Statements
December 31, 2000
1. Description of Plan
The VTEL Corporation 401(k) Plan (the Plan) became effective January 1, 1990.
The following brief description of the Plan is provided for general purposes
only. Participants should refer to the Plan agreement for more complete
information.
General
The Plan is a defined contribution profit sharing plan covering substantially
all employees of VTEL Corporation (the Company). It is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Eligible employees may contribute to the Plan an elected portion of their
eligible compensation, as defined in the Plan, up to the statutory annual
deferral limit.
The Company may make matching contributions up to specified amounts at its
discretion. During March of 2000, the Company began making matching
contributions.
All contributions are invested at the direction of the participants.
Eligibility
Employees are eligible for participation in the Plan after obtaining 21 years of
age as defined in the Plan, up to the statutory annual deferral limit.
Vesting
Participants are immediately vested in their contributions and earnings thereon.
Should the Company decide to match contributions, the contributions would vest
based on years of service completed by participants.
5
VTEL Corporation 401(k) Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Payment of Benefits
Participants are entitled to receive benefit payments at the normal retirement
age of 65, in the event of the participant's death or disability, or in the
event of termination under certain circumstances other than normal retirement,
disability or death or if the participant reaches age 70 1/2 while still
employed. Benefits may be paid in a lump-sum distribution or by an annuity.
There were no benefits payable by the Plan at December 31, 2000.
Plan Termination
Although the Company has not expressed any intent to terminate the Plan, it
reserves the right to do so at any time. Upon such termination, each participant
becomes fully vested and all benefits shall be distributed to the participants
or their beneficiaries.
Participant Accounts
Discretionary employer matching contributions, if any, are allocated annually to
participant accounts based upon the percentage determined and authorized by the
Company's board of directors.
Investment earnings or losses are allocated among the participants' accounts
based upon the percentage of the balance of each such account to the total
balance of all such accounts within each investment option.
Participant Loans
Upon written application of a participant, the Plan may make a loan to a
participant. Participants are allowed to borrow no less than $1,000 and no
greater than the lesser of 50% of the participants vested account balance or
$50,000. Loans are amortized over a maximum of 60 months unless it is used to
purchase participant's principal residence and repayment is made through payroll
deductions. The amount of the loan is deducted from the participant's investment
accounts and bears interest at a rate commensurate with local rates for similar
plans.
6
VTEL Corporation 401(k) Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Forfeitures
Forfeitures, if any, under the Plan are first applied to payment of
administrative expenses of the Plan and then to the Company's matching
contribution to the Plan for the Plan year in which the forfeitures occur.
Administration
The Plan is administered by trustees consisting of officers and employees of the
Company. Some of the administrative expenses of the Plan are paid by the
Company.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Plan's financial statements have been prepared on the accrual basis of
accounting.
Valuation of Investments
Investments are stated at fair value, which is determined based on quoted market
prices. Participant loans are stated at cost which approximates fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and the
accompanying notes and schedule. Actual results could differ from those
estimates.
7
VTEL Corporation 401(k) Plan
Notes to Financial Statements (continued)
3. Investments
The following presents investments that represent five percent or more of the
Plan's net assets:
December 31,
2000 1999
------------------ ------------------
Connecticut General Life Insurance Company
Pooled Separate Accounts:
Charter Guaranteed Income Fund $ 2,696,879 $ 2,844,531
Fidelity Advisors Growth 2,580,420 3,943,000
Dreyfus Founders Growth 2,489,058 3,545,284
Neuberger & Berman Partners Trust 1,931,180 2,509,352
Invesco Total Return Fund 1,576,998 2,063,851
Janus Worldwide Account 2,820,812 2,809,857
State Street Russell 3000 Fund 2,023,610 2,262,251
Charter Small Company Stock Growth-Fiduciary 3,579,410 3,097,495
During 2000, the Plan's investments (including investments purchased, sold as
well as held during the year) depreciated in fair value as follows:
Pooled separate accounts $2,149,814
Common Stock 375,316
----------
$2,525,130
==========
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated January 26, 2000, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
8
Supplemental Schedule
VTEL Corporation 401(k) Plan
Schedule H, line 4i, Schedule of Assets (Held at End of Year)
EIN: 74-2415696 Plan Number 001
December 31, 2000
Identity of Issue Description of Asset Current Value
- ------------------------------------------------------------------------------------------------------------
*Connecticut General Life Insurance Company Charter Guaranteed Income Fund; 92,744
units, unit value $29.08 $ 2,696,879
*Connecticut General Life Insurance Company Charter Guaranteed Government Securities;
2,141 units, unit value $13.56 29,029
*Connecticut General Life Insurance Company Charter Corporate Bond - CIGNA; 72,626
units, unit value $12.22 887,644
*Connecticut General Life Insurance Company CIGNA Lifetime 20; 4,580 units,
unit value $23.12 105,891
*Connecticut General Life Insurance Company CIGNA Lifetime 30; 6,953 units,
unit value $22.40 155,732
*Connecticut General Life Insurance Company CIGNA Lifetime 40; 4,198 units,
unit value $21.38 89,758
*Connecticut General Life Insurance Company CIGNA Lifetime 50; 4,296 units,
unit value $20.27 87,064
*Connecticut General Life Insurance Company CIGNA Lifetime 60; 459 units,
unit value $18.05 8,282
*Connecticut General Life Insurance Company Fidelity Advisors Growth Opportunities;
39,036 units unit value $66.10 2,580,420
*Connecticut General Life Insurance Company Dreyfus Founders Growth; 90,258 units, unit
value $27.58 2,489,058
*Connecticut General Life Insurance Company Neuberger & Berman Partners Trust; 82,920
units, unit value $23.29 1,931,180
*Connecticut General Life Insurance Company Invesco Total Return Fund; 41,998 units,
unit value $37.55 1,576,998
*Connecticut General Life Insurance Company Lazard Equity Portfolio Account; 3,040
units, unit value $28.30 86,029
*Connecticut General Life Insurance Company Janus Worldwide Account; 37,923 units, unit
value $74.38 2,820,812
*Connecticut General Life Insurance Company Templeton Foreign Account; 66,740 units,
unit value $14.73 983,406
9
VTEL Corporation 401(k) Plan
Schedule H, line 4i, Schedule of Assets (Held at End of Year) (continued)
EIN: 74-2415696 Plan Number 001
December 31, 2000
Identity of Issue Description of Asset Current Value
- ------------------------------------------------------------------------------------------------------------
*Connecticut General Life Insurance Company State Street Russell 3000 Fund;
96,892 units, unit value $20.89 2,023,610
*Connecticut General Life Insurance Company Charter Small Company Stock
Growth-Fiduciary; 185,430 units,
unit value $19.30 3,579,410
*Connecticut General Life Insurance Company Charter Small Company Stock Value I-Berger;
24,347 units, unit value $15.51 377,656
*National Financial Services VTEL Common Stock; 153,914 units, unit value
$0.88 134,584
*Participant Loans Loaned funds of various maturities (years)
and rates from 7.75% to 10.50% 378,447
--------------
Total $ 23,021,889
==============
*Indicates a party-in-interest to the Plan.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employees benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
VTEL Corporation 401(k) Plan
Date: June 28, 2001 /s/ Paul Tesluk
----------------------------
Paul Tesluk
Plan Advisor
Exhibit Index
Exhibit
Number Document Description
- ------- --------------------
23 Consent of Ernst & Young
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (File No. 333-44533) of VTEL Corporation of our report dated May 25,
2001, with respect to the financial statements and schedule of the VTEL
Corporation 401(k) Plan included in this Annual Report on Form 11-K for the year
ended December 31, 2000.
Ernst & Young
Austin, Texas
June 29, 2001