UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549-1004
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, 2008
OR
¨
TRANSITION REPORT PURSUANT TO SECTION
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from——————to———————
Commission
file number 1-8061
FREQUENCY
ELECTRONICS, INC. 401(k) SAVINGS PLAN
(Full
title of the plan)
Frequency
Electronics, Inc.
55
Charles Lindbergh Blvd., Mitchel Field, NY 11553
(Name of
issuer of the securities held pursuant to
the plan
and the address of its principal
executive
offices)
Registrant's
telephone number, including area code (516) 794-4500
Notices
and communications from the Securities and Exchange Commission
relative
to this report should be forwarded to:
Alan
Miller
Chief
Financial Officer
Frequency
Electronics, Inc.
55
Charles Lindbergh Blvd.
Mitchel
Field, NY 11553
FREQUENCY ELECTRONICS,
INC.
401(k) SAVINGS
PLAN
YEAR ENDED DECEMBER 31,
2008
CONTENTS
|
Page
|
a)
FINANCIAL STATEMENTS:
|
|
|
|
Report
of Independent Registered Public Accounting Firms
|
3-4
|
|
|
Statements
of Net Assets Available for Benefits
|
5
|
|
|
Statement
of Changes in Net Assets Available for Benefits
|
6
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|
|
Notes
to Financial Statements
|
7 -
12
|
|
|
SUPPLEMENTAL
SCHEDULE:
|
|
|
|
Schedule
H, Line 4i: Schedule of Assets (Held at End of
Year)
|
13
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|
|
Schedule
H, Line 4j; Schedule of Reportable
Transactions
|
14
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|
|
b)
EXHIBITS:
|
|
|
|
|
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Exhibit
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|
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Exhibit
99.1
|
Certification
of Chief Executive Officer and Chief Financial Officer
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|
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Exhibit
99.2
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Certification
by a Trustee of the Plan
|
|
- 2 -
SIGNATURES
Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
FREQUENCY
ELECTRONICS, INC.
|
|
Registrant
|
|
|
|
By: /s/ Alan L. Miller
|
|
|
|
Alan
L. Miller
|
|
Treasurer
and Chief Financial Officer
|
Dated:
July 9, 2009
The
Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
|
Frequency
Electronics, Inc. 401(k) Savings Plan
|
|
(Name
of Plan)
|
|
|
Date:
July 9, 2009
|
By:
|
|
|
|
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/s/Robert Klomp
|
|
|
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Robert
Klomp, Trustee
|
|
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|
|
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/s/Markus Hechler
|
|
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Markus
Hechler, Trustee
|
|
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/s/Marvin Meirs
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|
|
|
|
Marvin
Meirs, Trustee
|
- 3 -
Report
of Independent Registered Public Accounting Firm
To the
Trustees of
Frequency
Electronics, Inc.
401(k)
Savings Plan
We have
audited the accompanying statement of net assets available for benefits of
Frequency Electronics, Inc. 401(k) Savings Plan (the "Plan") as of December 31,
2008, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2008. 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 the standards of the Public Company
Accounting Oversight Board (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. We were not
engaged to perform an audit of the Plan’s internal control over financial
reporting. Our audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plan’s internal control over financial
reporting. Accordingly, we express no such opinion. 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, present fairly, in all
material respects, the net assets available for benefits of the Plan as of
December 31, 2008, and the changes in net assets available for benefits for the
year ended December 31, 2008 in conformity with U.S. generally accepted
accounting principles.
Our audit
was performed for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets (held at
end of year) at December 31, 2008 and reportable transactions for the year
ended December 31, 2008 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. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/
Eisner LLP
New York,
New York
July 9,
2009
- 4 -
Report
of Independent Registered Public Accounting Firm
To the
Trustees of
Frequency
Electronics, Inc.
401(k)
Savings Plan
We have
audited the accompanying statement of net assets available for benefits of
Frequency Electronics, Inc. 401(k) Savings Plan (the "Plan") as of December 31,
2007. 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 the standards of the Public Company
Accounting Oversight Board (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 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 as of
December 31, 2007 in conformity with U.S. generally accepted accounting
principles.
/s/ Holtz Rubenstein Reminick
LLP
|
Melville,
New York
|
July
15, 2008
|
- 5 -
FREQUENCY ELECTRONICS,
INC.
401(k) SAVINGS
PLAN
STATEMENTS OF NET ASSETS
AVAILABLE FOR BENEFITS
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
833
|
|
|
$
|
833
|
|
Investments,
at Fair Value
|
|
|
9,952,358
|
|
|
|
14,829,153
|
|
Loans
Receivable from Participants
|
|
|
565,492
|
|
|
|
483,059
|
|
Contribution
Receivable - Employer
|
|
|
0
|
|
|
|
122,132
|
|
Contribution
Receivable – Participant
|
|
|
25,837
|
|
|
|
28,051
|
|
Total
Assets
|
|
|
10,544,520
|
|
|
|
15,463,228
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Excess
Participant Contributions Payable
|
|
|
0
|
|
|
|
26,289
|
|
Total
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets Available for Benefits at Fair Value
|
|
|
10,544,520
|
|
|
|
15,436,939
|
|
|
|
|
|
|
|
|
|
|
Adjustment
from Fair Value to Contract Value for Fully Benefit-Responsive Investment
Contract
|
|
|
171,166
|
|
|
|
19,595
|
|
|
|
|
|
|
|
|
|
|
Net
Assets Available for Benefits
|
|
$
|
10,715,686
|
|
|
$
|
15,456,534
|
|
The
accompanying notes are an integral part of these financial
statements.
|
- 6 -
FREQUENCY ELECTRONICS,
INC.
|
401(k) SAVINGS
PLAN
STATEMENT OF CHANGES IN NET
ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31,
2008
ADDITIONS
(REDUCTIONS):
|
|
|
|
Additions
(Reductions) to net assets attributed to:
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
Participant
contributions
|
|
$
|
1,240,998
|
|
Rollover
contributions
|
|
|
129,725
|
|
Employer
contributions
|
|
|
606,874
|
|
Total
Contributions
|
|
|
1,977,597
|
|
Investment
Income (Loss):
|
|
|
|
|
Net
depreciation in fair value of investments
|
|
|
(5,213,510
|
)
|
Increase
in Contract Value for Fully
|
|
|
|
|
Benefit-Responsive
Investment Contract
|
|
|
151,571
|
|
Interest
|
|
|
39,487
|
|
Dividends
|
|
|
113,023
|
|
Other,
net
|
|
|
4,296
|
|
Net
Investment (Loss)
|
|
|
(4,905,133
|
)
|
Net
Reductions
|
|
|
(2,927,536
|
)
|
|
|
|
|
|
DEDUCTIONS:
|
|
|
|
|
Benefits
paid to participants
|
|
|
1,813,312
|
|
|
|
|
|
|
NET
DECREASE
|
|
|
(4,740,848
|
)
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS, beginning of year
|
|
|
15,456,534
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS, end of year
|
|
$
|
10,715,686
|
|
The
accompanying notes are an integral part of these financial
statements.
|
- 7 -
FREQUENCY ELECTRONICS,
INC.
|
NOTES TO FINANCIAL
STATEMENTS
|
YEAR ENDED DECEMBER
31, 2008
|
1. Plan
Description
The
following description of the Frequency Electronics, Inc. (the "Company" or the
“Employer”) 401(k) Savings 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, adopted on January 1, 1985, is a defined contribution savings
plan qualified under Section 401(a) of the Internal Revenue Code covering
employees of the Company who have completed six months of service and are age
twenty-one or older. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (“ERISA”).
Plan
administration
– Effective December 1, 2006, the Plan changed its
custodian and record keeper from Metropolitan Life Insurance Company “Met Life”
to Principal Retirement Group “Principal”. The Plan also changed
investment options to accounts offered by Principal. Principal holds
the Plan’s investment in Frequency Electronics, Inc. common stock.
Contributions
-
Each year, participants may contribute a portion of their pretax annual
compensation, as defined by the Plan, subject to certain limitations imposed by
the Internal Revenue Code (the “Code”). Participants who have
attained age 50 before the end of the Plan year are eligible to make catch-up
contributions. Participants may also rollover amounts representing
distributions from other qualified benefit plans. The Company may
make matching contributions, as defined by the Plan. Company
contributions, if any, may consist of cash or qualifying employer
securities. During the year ended December 31, 2008, Company
contributions were made in the form of Company stock. The Company contributed
100 percent of the first 3 percent of base compensation that a participant
contributed to the Plan, not to exceed a maximum of
$2,500. Additionally, the Company contributed $500 on behalf of each
eligible participant, regardless of the participant’s contribution, if
any. The maximum Company contribution is $3,000 per
participant.
Participant
accounts -
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings. Allocations of Plan earnings are made to each participant's
account based upon participant account balances, as defined. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's vested account.
Vesting -
Participants are vested immediately in their contributions plus actual earnings
thereon. Vesting in the Company's contribution portion of their accounts is
based on years of continuous service. Participants vest 20 percent
after two years of service and 20 percent each year thereafter. A
participant is 100 percent vested after six years of credited
service.
Participant loans
-
Loans are permitted against a participant's contributory account
balance. Participants may borrow a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50% of the participant's contributory account
balance. The loans are secured by the balance in the participant's
account and bear interest at rates that range from 4 percent to 10.25
percent. Principal and interest are paid ratably through payroll
deductions.
- 8 -
Payment of
benefits -
A participant may elect to receive the value of the vested
interest in his or her account upon termination of service due to death,
disability or retirement. An employee who became a participant on or
after January 1, 1998, will generally receive their benefit as a lump-sum
distribution. An employee who became a participant prior to January
1, 1998, will generally receive their benefit, unless otherwise elected, as a
Qualified Joint and Survivor Annuity, if the participant is married, or as a
life annuity, if unmarried. Participants who elect not to receive the
annuity form of payment, may elect to receive a lump-sum distribution or a
distribution in substantially equal monthly, quarterly, semi-annual or annual
installments, (over a term that does not extend beyond the participant's or
designated beneficiary's actuarial life expectancy).
Forfeited
accounts -
During the year ended December 31, 2008, forfeitures of
non-vested accounts totaled $27,503 and forfeited non-vested accounts incurred
investment losses of $48,214. At December 31, 2008 and 2007,
forfeited non-vested accounts, including earnings and losses thereon, totaled
$37,380 and $58,091, respectively. These accounts may be used to pay
administrative costs of the Plan. Any such accounts not used to pay
administrative costs will be reallocated to participants in the same manner as
employer contributions. No amounts were reallocated in the
year. Because the Plan Administrator did not reallocate the forfeited
accounts to the participants in accordance with the terms of the Plan on a
timely basis, the Plan did not comply with ERISA rules. In 2009, the
forfeited accounts were reallocated to the participants
.
Plan expenses -
Expenses associated with administering the Plan are generally paid by the
Company. Certain participant-specific expenses may be paid by the
Plan or assessed against such Participant as provided in the service and expense
agreement.
2. Summary
of Significant Accounting Polices
Basis of
presentation -
The accompanying
financial statements have been prepared on the accrual basis of
accounting.
Correction of an
error -
The
Statement of Net Assets Available for Benefits as of December 31, 2007 and
certain disclosures regarding the Union Bond & Trust Company Principal
Stable Value Fund (“Stable Value Fund”) have been restated to correct an
immaterial error between the fair value and contract value of the Stable Value
Fund. Such restatement had no impact on the Net Assets Available for
Benefits nor on the Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2007.
Use of estimates
-
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make estimates
and assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the changes in net assets
available for benefits during the reporting period and, when applicable,
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those
estimates.
Investment
valuation and income recognition -
The Plan's investments are stated at
fair value based upon quoted market prices, except for the Stable Value Fund
which includes fully benefit-responsive investment contracts valued at contract
value. Participant loans are valued at cost plus accrued interest,
which approximates fair value.
Purchases
and sales of investments are recorded on a trade-date basis. Interest
income is recognized in the period earned. Dividends are recorded on
the ex-dividend date. Gains and losses on the sales of investments
are recognized when realized, while unrealized gains and losses are recognized
daily based on fluctuations in market value. Realized and unrealized
gains and losses are netted in the financial statements.
Frequency
Electronics, Inc. Common Stock Fund -
The Frequency Electronics, Inc.
Common Stock Fund is a nonparticipant directed fund. All employer
matching contributions that were made prior to January 1, 1990 and subsequent to
January 1, 2001 are in the form of Frequency Electronics, Inc. common
stock. This stock is valued at the last sale price on the NASDAQ on
the last business day of the year. Frequency Electronics, Inc. common
stock approximated $935,000 (9%) and $2,283,000 (15%) of net assets available
for benefits at December 31, 2008 and 2007, respectively.
- 9 -
Information
about the significant components of the change in net assets related to the
shares of common stock of the Company (nonparticipant-directed investment)
during the year ended December 31, 2008 is as follows:
Balance,
January 1, 2008
|
|
$
|
2,282,692
|
|
Employer
Contributions Received During 2008
|
|
|
701,517
|
|
Net
Depreciation in Fair Value of Investments
|
|
|
(1,855,350
|
)
|
Investment
Income
|
|
|
320
|
|
Distributions
|
|
|
(194,645
|
)
|
Balance,
December 31, 2008
|
|
$
|
934,534
|
|
Payment of
benefits -
Benefits are recorded when paid.
Adoption of new
accounting pronouncement -
As of
January
1, 2008, the Plan adopted the provisions of Statement of Financial Accounting
Standards No. 157,
Fair Value
Measurements
(“FAS 157”). FAS 157 establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value, and requires additional disclosures about fair value
measurement. Although the adoption of FAS 157 did not materially
impact the Plan’s financial statements, the Plan is now required to provide
additional disclosures as part of its financial statements. (Note
4)
3. Investments
The
following presents investments that represent 5 percent or more of the Plan's
net assets at December 31, 2008:
Union
Bond & Trust Company Principal Stable Value Fund;
220,144 shares
|
|
$
|
3,495,117
|
|
Principal
Global Investors S&P Idx AdvPr Fund; 250,706 shares
|
|
$
|
1,576,940
|
|
Capital
Research and Mgmt Co American Funds Growth Fund of America R3 Fund; 31,978
shares
|
|
$
|
645,957
|
|
Frequency
Electronics, Inc. Common Stock; 323,760 shares
|
|
$
|
934,534
|
|
The
following presents investments that represent 5 percent or more of the Plan's
net assets at December 31, 2007:
Union
Bond & Trust Company Principal Stable Value Fund;
188,977 shares
|
|
$
|
3,018,822
|
|
Principal
Global Investors Intl Emerging Mkts Adv Pref Fund; 31,861
shares
|
|
$
|
955,825
|
|
Principal
Global Investors Diversified IntlAdv Pref Fund; 59,069
shares
|
|
$
|
816,924
|
|
Principal
Global Investors S&P Idx AdvPr Fund; 217,052 shares
|
|
$
|
2,226,959
|
|
Principal
Global Investors Principal Investors LifeTime 2030 Adv Pref Fund; 68,738
shares
|
|
$
|
940,348
|
|
Capital
Research and Mgmt Co American Funds Growth Fund of America R3 Fund; 37,322
shares
|
|
$
|
1,251,018
|
|
Frequency
Electronics, Inc. Common Stock; 236,551 shares
|
|
$
|
2,282,692
|
|
4. Fair
Value Measurements
FAS 157
establishes a framework for measuring fair value. That framework
provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (level 1 measurements) and the lowest priority to
unobservable inputs (level 3 measurements). The three levels of the
fair value hierarchy under FAS 157 are described below:
- 10
-
|
Level
1
|
Inputs
to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the Plan has the ability to
access.
|
|
Level
2
|
Inputs
to the valuation methodology
include:
|
|
-
|
Quoted
prices for similar assets or liabilities in active
markets;
|
|
-
|
Quoted
prices for identical or similar assets or liabilities in inactive
markets;
|
|
-
|
Inputs
other than quoted prices that are observable for the asset or
liability;
|
|
-
|
Inputs
that are derived principally from or corroborated by observable market
data by correlation or other means.
|
|
Level
3
|
Inputs
to the valuation methodology are unobservable and significant to the fair
value measurement.
|
The
asset’s or liability’s fair value measurement level within the fair value
hierarchy is based on the lowest level of any input that is significant to the
fair value measurement. Valuation techniques used need to maximize
the use of observable inputs and minimize the use of unobservable
inputs.
Following
is a description of the valuation methodologies used for assets measured at fair
value. There have been no changes in the methodologies used at
December 31, 2008 and 2007.
Frequency Electronics, Inc. Common
Stock
: Valued at the closing price reported on the NASDAQ
Global Market on which the securities are traded.
Mutual
funds
: Valued at quoted market prices as reported on the
active market on which the individual funds are traded.
Participant
loans
: Valued at cost plus accrued interest which approximates
fair value.
Stable Value
Fund
: Fair value is determined by measuring the market value
of its underlying investments. The fund contains synthetic investment
contracts comprised of both underlying investment and contractual components
which have observable level 1 and level 2 pricing inputs, including quoted
prices for similar assets in active or non-active markets.
The
methods described above may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair
values. Furthermore, while the Plan believes its valuation methods
are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain
financial instruments could result in a different fair value measurement at the
reporting date.
The
following table sets forth by level, within the fair value hierarchy, the Plan’s
assets at fair value at December 31, 2008:
|
|
Assets at Fair Value as of December 31,
2008
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Mutual
Funds
|
|
$
|
5,522,707
|
|
|
|
|
|
|
|
|
$
|
5,522,707
|
|
Frequency
Electronics, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
934,534
|
|
|
|
|
|
|
|
|
|
934,534
|
|
Stable Value Fund
|
|
|
|
|
|
$
|
3,495,117
|
|
|
|
|
|
|
3,495,117
|
|
Investments, at Fair Value
|
|
|
6,457,241
|
|
|
|
3,495,117
|
|
|
|
-
|
|
|
|
9,952,358
|
|
Cash
and Cash Equivalents
|
|
|
833
|
|
|
|
|
|
|
|
|
|
|
|
833
|
|
Participant Loans
|
|
|
|
|
|
|
|
|
|
$
|
565,492
|
|
|
|
565,492
|
|
Assets at Fair Value
|
|
$
|
6,458,074
|
|
|
$
|
3,495,117
|
|
|
$
|
565,492
|
|
|
$
|
10,518,683
|
|
- 11 -
Level 3 Gains and
Losses
The
change in fair value of Participant Loans (level 3 assets) is due solely to
issuance of new loans, accruals of interest and repayments which aggregate to
$82,433 for the year ended December 31, 2008. The Participant Loans
did not record any gains or losses, whether realized or unrealized.
5. Investment
Contract with Insurance Company
As
described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1
and SOP 94-4-1,
Reporting of
Fully Benefit
-
Responsive Investment Contracts Held
by Certain Investment Companies Subject to the AICPA Investment Company Guide
and Defined
-
Contribution Health and Welfare and
Pension Plans
(the FSP)
,
investment contracts held
by a defined-contribution plan are required to be reported at fair value.
However, contract value is the relevant measurement attribute for that
portion of the net assets available for benefits of a defined-contribution plan
attributable to fully benefit-responsive investment contracts because contract
value is the amount participants would receive if they were to initiate
permitted transactions under the terms of the plan. As required by the
FSP, the Statement of Net Assets Available for Benefits presents the fair value
of the investment contracts from fair value to contract value. The
Statement of Changes in Net Assets Available for Benefits is prepared on a
contract value basis.
The
Stable Value Fund’s net assets include fully benefit-responsive investment
contracts that are accounted for on their contract value
basis. Accordingly, the Plan accounts for its investment position in
the Stable Value Fund using the contract value. The Plan’s investment
in the Stable Value Fund at contract value exceeded its fair value by
approximately $171,000 and $20,000 at December 31, 2008 and 2007,
respectively. The average yield of the Stable Value Fund, based on
actual earnings were 3.54% and 3.97%, respectively, for the years ended December
31, 2008 and 2007. For the same periods, the yield based on interest
rates credited to Participants were 3.58% and 3.92%, respectively.
6. Tax
Status
The
Internal Revenue Service has determined and informed the Company by a letter
dated January 9, 2009, that the Plan and related trust are designed in
accordance with applicable sections of the Code. This new
determination letter was obtained as a result of Plan amendments which were
adopted in 2007 to conform the Plan to recent legislative changes.
7. Plan
Termination
Although
it has not expressed any intent to do so, the Company has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of the ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
8. Parties
in Interest/Related Party Transactions
The
Plan's investments include shares of common stock issued by the Plan Sponsor,
Frequency Electronics, Inc. This stock is valued at the last sale
price on the NASDAQ on the last business day of the year. Investment in
Frequency Electronics, Inc. common stock is permitted under the provisions of
the Plan.
Principal
Financial Group -
Certain plan investments are shares of pooled separate
accounts managed by Principal Financial Group. Principal is the
custodian and record keeper as defined by the Plan, and, therefore, these
transactions qualify as party-in-interest transactions. Purchases and
sales of these accounts and the underlying investments comprising these accounts
are open market transactions at fair market value. Such transactions
are permitted under the provisions of the Plan and are exempt from the
prohibition of party-in-interest transactions under ERISA and applicable
exemptions promulgated thereunder.
- 12 -
9. Cash
Dividend
During
calendar year 2008, the Board of Directors of Frequency Electronics, Inc.
suspended the payment of its semi-annual cash dividends. No dividends
were received by the Plan in 2008.
10. Risks
and Uncertainties
The Plan
provides for various investment options in any combination of stocks, bonds,
mutual funds, and other investment securities. Investment securities
are exposed to various risks, such as interest rate, market and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values of
investments securities will occur in the near term and that such changes could
materially affect participants' account balances and the amounts reported in the
statement of net assets available for benefits.
The
value, liquidity and related income of the securities in which the Plan invests
are sensitive to changes in economic conditions, including delinquencies or
defaults, or both, and may be adversely affected by shifts in the market’s
perception of the issues and changes in interest rates.
11. Reconciliation
to Form 5500
The
differences between the information reported in the financial statements and the
information reported in the Form 5500 arise primarily from the adjustment of
investment contracts from fair value to contract value in accordance with the
FSP.
The
following is a reconciliation of the changes in net assets available for
benefits during the year ended December 31, 2008:
Changes
in Net Assets Available for Benefits per Form 5500
|
|
$
|
(4,918,708
|
)
|
Increase
in Contract Value Adjustment, current year
|
|
|
151,571
|
|
Payment
of accrued excess participant contributions
|
|
|
26,289
|
|
Changes
in Net Assets Available for Benefits per financial
statements
|
|
$
|
(4,740,848
|
)
|
The
following is a reconciliation of net assets available for benefits at December
31, 2008 and 2007:
|
|
2008
|
|
|
2007
|
|
Net
Assets per Form 5500
|
|
$
|
10,544,520
|
|
|
$
|
15,463,228
|
|
Contract
Value Adjustment, current year
|
|
|
171,166
|
|
|
|
19,595
|
|
Excess
Participant Contribution, accrued
|
-
|
|
-
|
|
|
|
(26,289
|
)
|
Net
Assets Available for Benefits per financial statements
|
|
$
|
10,715,686
|
|
|
$
|
15,456,534
|
|
- 13
-
FREQUENCY ELECTRONICS,
INC.
401(k) SAVINGS
PLAN
SCHEDULE H, LINE 4i – PN
003; EIN 11-1986657; FORM 5500
SCHEDULE OF ASSETS (HELD AT
END OF YEAR)
DECEMBER 31,
2008
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
|
(e)
|
|
|
|
Identity of issuer, borrower, lessor, or
|
|
|
|
|
|
|
Current
|
|
|
|
similar
party
|
|
Description
of investment
|
|
Cost
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Union
Bond & Trust Company Principal Stable Value Fund
|
|
Common
/ Collective Trust
|
|
|
|
|
|
$
|
3,495,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Smallcap Value AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
323,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Diversified IntlAdv Pref Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
351,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Intl Emerging Mkts AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
344,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors S&P 500 Idx AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
1,576,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allianz
NFJ Dividend Value Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
130,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia
Management Advisors MidCap Value AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
163,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Government & HQ BD AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
243,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Bond and Mtg Secs AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
496,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turner
Investment Partners MidCap Growth AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
134,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Prin Inv LifeTm 2010 AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
72,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Prin Inv LifeTm 2020 AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
176,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Prin Inv LifeTm 2030 AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
519,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Prin Inv LifeTm 2040 AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
28,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors Prin Inv LifeTm 2050 AdvPr Fund
|
|
Interest
in registered investment company.
|
|
|
|
|
|
|
55,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Research and Mgmt Co Am Fds Grth Fund of America R3 Fund
|
|
Interest
in registered investment companies.
|
|
|
|
|
|
|
645,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investor Prin Inv Life Tm Str Inc AdvPr Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
34,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbus
Circle Investors Large Cap Growth AdvPr Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
14,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T.
Rowe Price LargeCap Blend II R3 Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
10,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuberger
Berman Mgmt Inc. Neub Berm Partners Adv Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
129,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alliance
Bernstein LP Smallcap Growth I AdvPr Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
45,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors S&P 400 Idx AdvPr Fd
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
16,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Principal
Global Investors S&P 600 Idx AdvPr Fund
|
|
Interest
in registered investment companies
|
|
|
|
|
|
|
7,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Frequency
Electronics, Inc. Common Stock
|
|
Common
stock of Frequency Electronics, Inc Par value $1.00.
|
|
|
3,195,051
|
|
|
|
934,534
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,952,358
|
|
*
|
|
Participant
loans
|
|
Loans
to plan participants. Various maturity dates through June 2014
with interest at prevailing commercial rates (4.0% -10.25%) and secured by
the participants vested account balance.
|
|
$
|
-
|
|
|
$
|
565,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Denotes party in interest.
|
|
|
|
|
|
|
|
|
|
|
- 14 -
FREQUENCY ELECTRONICS,
INC.
|
401(k) SAVINGS
PLAN
SCHEDULE H, LINE 4j – PN
003: EIN 11-1986657; FORM 5500
SCHEDULE OF REPORTABLE
TRANSACTIONS
DECEMBER 31,
2008
DESCRIPTION OF ASSET
|
|
Total Number
of Purchases
|
|
|
Total Number
of Sales
|
|
|
Total Value
of Purchases
|
|
|
Total Value
of Sales
|
|
|
Net Gain/(Loss)
|
|
Stable
Value Fund
|
|
|
192
|
|
|
|
|
|
$
|
2,655,050
|
|
|
|
|
|
$
|
0
|
|
Stable
Value Fund
|
|
|
|
|
|
|
198
|
|
|
|
|
|
|
$
|
2,152,570
|
|
|
|
66,470
|
|
Prin
LargeCap S&P 500 Index Fund
|
|
|
180
|
|
|
|
|
|
|
|
629,905
|
|
|
|
|
|
|
|
0
|
|
Prin
LargeCap S&P 500 Index Fund
|
|
|
|
|
|
|
78
|
|
|
|
|
|
|
|
369,100
|
|
|
|
(48,777
|
)
|
Intl
Emerg Mkts AdvPr Fund
|
|
|
129
|
|
|
|
|
|
|
|
621,313
|
|
|
|
|
|
|
|
0
|
|
Intl
Emerg Mkts AdvPr Fund
|
|
|
|
|
|
|
80
|
|
|
|
|
|
|
|
808,689
|
|
|
|
(186,861
|
)
|
Frequency
Electronics, Inc.
|
|
|
97
|
|
|
|
|
|
|
|
727,048
|
|
|
|
|
|
|
|
0
|
|
Frequency
Electronics, Inc.
|
|
|
|
|
|
|
128
|
|
|
|
|
|
|
|
233,094
|
|
|
|
(319,851
|
)
|
Frequency Electronics (NASDAQ:FEIM)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Frequency Electronics (NASDAQ:FEIM)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024