-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UrcXViZ3tznvEkbaXY0E4X/MFtUbJkExoLv4fNUANxQ4manctnTbd1yuHkdZoTwU Oad/F7EqSqD8EtftXHVA/g== 0000950135-99-003293.txt : 19990628 0000950135-99-003293.hdr.sgml : 19990628 ACCESSION NUMBER: 0000950135-99-003293 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSTRON CORP CENTRAL INDEX KEY: 0000050716 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 042057203 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-05641 FILM NUMBER: 99652420 BUSINESS ADDRESS: STREET 1: 100 ROYALL ST CITY: CANTON STATE: MA ZIP: 02021 BUSINESS PHONE: 7818282500 MAIL ADDRESS: STREET 1: 100 ROYALL STREET CITY: CANTON STATE: MA ZIP: 02021 11-K 1 INSTRON CORPORATION SAVINGS AND SECURITY PLAN 1 - -------------------------------------------------------------------------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 ----------------- COMMISSION FILE NUMBER 2-91694 ------- INSTRON CORPORATION SAVINGS AND SECURITY PLAN (Full title of the plan) INSTRON CORPORATION 100 ROYALL STREET CANTON, MASSACHUSETTS 02021 (Name and address of principal executive office of issuer of the securities held pursuant to the plan) - -------------------------------------------------------------------------------- 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant, has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. June 25, 1999 INSTRON CORPORATION By: /s/ John R. Barrett ------------------------------- John R. Barrett Treasurer 2 3 INSTRON CORPORATION SAVINGS AND SECURITY PLAN FINANCIAL STATEMENTS DECEMBER 31, 1998 3 4 FINANCIAL STATEMENTS AND EXHIBITS
Page No. -------- a. Financial Statements Report of Independent Accountants 5 Statements of Net Assets Available for Plan Benefits with Fund Information as of December 31, 1998 and 1997 6-7 Statement of Changes in Net Assets Available for Plan Benefits with Fund Information for the year-ended December 31, 1998 8 Notes to Financial Statements 9-15 b. Supplemental Schedules: Line 27(a) - Schedule of Assets Held for Investment Purposes as of December 31, 1998 16 Line 27(d) - Schedule of Reportable Transactions - Single Transactions in Excess of 5% of the Current Value of Plan Assets for the year-ended December 31, 1998 17 Line 27(d) - Schedule of Reportable Transactions - Series of Transactions in Excess of 5% of the Current Value of Plan Assets for the year-ended December 31, 1998 18 c. Exhibits Exhibit 23 - Consent of Independent Accountants
4 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Instron Corporation Savings and Security Plan: In our opinion, the accompanying statements of net assets available for plan benefits with fund information and the related statement of changes in net assets available for plan benefits with fund information present fairly, in all material respects, the net assets available for plan benefits of the Instron Corporation Savings and Security Plan ( the "Plan") at December 31, 1998 and 1997,and the changes in net assets available for plan benefits for the year ended December 31, 1998, 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 audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the index on page 4 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are 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 fund information in the statements of net assets available for plan benefits with fund information and the statement of changes in net assets available for plan benefits with fund information is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits 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. Boston Massachusetts /s/PricewaterhouseCoopers LLP June 25, 1999 ---------------------------------------- PRICEWATERHOUSECOOPERS LLP 5 6
INSTRON CORPORATION SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION December 31, 1998 ----------------------------------------------------------------------------- Vanguard Vanguard Long-Term Prime Money Vanguard Vanguard Vanguard Corporate Market Star US Growth Windsor Fund Fund Fund Fund Fund ------------- ------------- ------------ ------------- ------------- ASSETS Investments, at fair value: Shares of registered investment companies $2,492,539 $2,510,496 $2,624,167 $4,734,224 $15,173,633 Common stock Cash equivalents Participant loans ----------- ---------- ----------- ----------- ------------ Total investments 2,492,539 2,510,496 2,624,167 4,734,224 15,173,633 ----------- ---------- ----------- ----------- ------------ Receivables: Employee contribution 3,811 3,869 5,735 9,766 21,401 Employer contribution Other receivables ----------- ---------- ----------- ---------- ------------ Total receivables 3,811 3,869 5,735 9,766 21,401 ----------- ---------- ----------- ---------- ------------ Total assets 2,496,350 2,514,365 2,629,902 4,743,990 15,195,034 ----------- ---------- ----------- ---------- ------------ LIABILITIES Accounts payable ----------- ---------- ----------- ---------- ------------ Net assets available for plan benefits $2,496,350 $2,514,365 $2,629,902 $4,743,990 $15,195,034 ========== ========== ========== ========== ============ December 31, 1998 ------------------------------------------------------------ Vanguard Instron Retirement Common Savings Stock Participant Trust Fund Loans Total ----------- ---------- -------------- ----------- ASSETS Investments, at fair value: Shares of registered investment companies $5,502,622 $33,037,681 Common stock $8,402,372 8,402,372 Cash equivalents 30,733 30,733 Participant loans $857,608 857,608 ----------- ---------- -------- ----------- Total investments 5,502,622 8,433,105 857,608 42,328,394 ----------- ---------- -------- ----------- Receivables: Employee contribution 6,911 2,437 53,930 Employer contribution 22,019 22,019 Other receivables 19,559 19,559 ----------- ---------- --------- ----------- Total receivables 6,911 44,015 95,508 ----------- ---------- --------- ----------- Total assets 5,509,533 8,477,120 857,608 42,423,902 ----------- ---------- --------- ----------- LIABILITIES Accounts payable 71,983 71,983 ----------- ---------- --------- ----------- Net assets available for plan benefits $5,509,533 $8,405,137 $857,608 $42,351,919 ========== ========== ======== ===========
The accompanying notes are an integral part of the financial statements 6 7
INSTRON CORPORATION SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION December 31, 1997 -------------------------------------------------------------------------- Vanguard Vanguard Long-Term Prime Money Vanguard Vanguard Vanguard Corporate Market Star US Growth Windsor Fund Fund Fund Fund Fund ------------ ----------- ------------ ------------- -------------- ASSETS Investments, at fair value: Shares of registered investment companies $2,250,553 $2,297,962 $1,967,631 $2,229,729 $16,263,492 Common stock Cash equivalents Participant loans ---------- ---------- ---------- ---------- ----------- Total investments 2,250,553 2,297,962 1,967,631 2,229,729 16,263,492 ---------- ---------- ---------- ---------- ----------- Receivables: Employee contribution 5,546 5,663 7,548 10,299 37,764 Employer contribution Other receivables ---------- ---------- ---------- ---------- ----------- Total receivables 5,546 5,663 7,548 10,299 37,764 ---------- ---------- ---------- ---------- ----------- Total assets 2,256,099 2,303,625 1,975,179 2,240,028 16,301,256 ---------- ---------- ---------- ---------- ----------- LIABILITIES Accounts payable ---------- ---------- ---------- ---------- ----------- Net assets available for plan benefits $2,256,099 $2,303,625 $1,975,179 $2,240,028 $16,301,256 ========== ========= ========== ========== =========== December 31, 1997 ---------------------------------------------------------------- Vanguard Instron Retirement Common Savings Stock Participant Trust Fund Loans Total ------------ ------------ -------------- ------------ ASSETS Investments, at fair value: Shares of registered investment companies $5,162,231 $30,171,598 Common stock $8,813,644 8,813,644 Cash equivalents 39,483 39,483 Participant loans $814,090 814,090 ---------- ---------- -------- ----------- Total investments 5,162,231 8,853,127 814,090 39,838,815 ---------- ---------- -------- ----------- RECEIVABLES: Employee contribution 17,314 3,522 (15,177) 72,479 Employer contribution 21,080 21,080 Other receivables 38,838 38,838 ---------- ---------- -------- ----------- Total receivables 17,314 63,440 (15,177) 132,397 ---------- ---------- -------- ----------- Total assets 5,179,545 8,916,567 798,913 39,971,212 ---------- ---------- -------- ----------- LIABILITIES Accounts payable 18,373 18,373 ---------- ---------- -------- ----------- Net assets available for plan benefits $5,179,545 $8,898,194 $798,913 $39,952,839 ========== ========== ======== ===========
The accompanying notes are an integral part of the financial statements 7 8
INSTRON CORPORATION SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1998 Vanguard Vanguard Vanguard Vanguard Vanguard Long-Term Prime Money Star U.S. Windsor Corporate Market Fund Fund Growth Fund Fund Fund - ------------------------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment income: Interest and dividends $ 197,820 $ 121,403 $ 208,541 $ 297,886 $ 1,335,971 Net appreciation (depreciation) in fair value 5,049 -- 62,887 823,593 (1,269,157) -------------------------------------------------------------------------- 202,869 121,403 271,428 1,121,479 66,814 Contributions: Employer -- -- -- -- -- Employee 144,313 141,779 211,059 383,455 893,354 -------------------------------------------------------------------------- Total additions 347,182 263,182 482,487 1,504,934 960,168 -------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 71,543 93,840 136,842 188,454 895,162 Loans issued to Participants 12,965 23,719 11,506 46,927 222,793 Administrative expenses -- 815 605 40 880 -------------------------------------------------------------------------- Total deductions 84,508 118,374 148,953 235,421 1,118,835 -------------------------------------------------------------------------- Other: Participant loan repayments 17,422 23,193 30,514 37,213 186,088 Interfund transfers (39,845) 42,739 290,675 1,197,236 (1,133,643) -------------------------------------------------------------------------- Net increase (decrease) 240,251 210,740 654,723 2,503,962 (1,106,222) Net assets available for plan benefits, beginning of year 2,256,099 2,303,625 1,975,179 2,240,028 16,301,256 -------------------------------------------------------------------------- Net assets available for plan benefits, end of year $ 2,496,350 $2,514,365 $2,629,902 $4,743,990 $ 15,195,034 ========================================================================== Vanguard Instron Retirement Common Participant Savings Stock Fund Loans Total Trust - -------------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment income: Interest and dividends $ 318,876 $ 78,481 $ 71,559 $ 2,630,537 Net appreciation (depreciation) in fair value -- (697,623) -- (1,075,251) --------------------------------------------------------------- 318,876 (619,142) 71,559 1,555,286 Contributions: Employer -- 656,258 -- 656,258 Employee 319,663 83,031 -- 2,176,654 --------------------------------------------------------------- Total additions 638,539 120,147 71,559 4,388,198 --------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 277,796 319,004 2,852 1,985,493 Loans issued to Participants 63,267 17,223 (398,400) -- Administrative expenses 1,240 45 -- 3,625 --------------------------------------------------------------- Total deductions 342,303 336,272 (395,548) 1,989,118 --------------------------------------------------------------- Other: Participant loan repayments 97,957 16,025 (408,412) -- Interfund transfers (64,205) (292,957) -- -- --------------------------------------------------------------- Net increase (decrease) 329,988 (493,057) 58,695 2,399,080 Net assets available for plan benefits, beginning of year 5,179,545 8,898,194 798,913 39,952,839 --------------------------------------------------------------- Net assets available for plan benefits, end of year $ 5,509,533 $ 8,405,137 $ 857,608 $ 42,351,919 ===============================================================
The accompanying notes are an integral part of the financial statements 8 9 INSTRON CORPORATION SAVINGS AND SECURITY PLAN NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - GENERAL DESCRIPTION OF THE PLAN The following description of the Instron Corporation Savings and Security Plan (the "Plan") is intended to give a general summary of its principal provisions. For a more complete description of the Plan, refer to the Plan document. The Plan was originally effective July 1, 1984 and was last amended and restated in its entirety effective August 5, 1996 and has been subsequently amended by the first, second, third and fourth amendments thereto. The Plan consists of a cash or deferred compensation plan under Section 401(k) of the Code of 1986, as amended. The Plan is also an employee stock ownership plan. The purpose of the 401(k) plan is to enable eligible employees of Instron Corporation ("Participants") to save for retirement on a tax-deferred and/or an after-tax basis, and the purpose of the Employee Stock Ownership Plan is to invest primarily in employer securities. The Plan is an individual account plan in which each Participant's benefits are based solely on the amounts contributed to the Plan by the Participant and by Instron Corporation (the "Company") on the Participant's behalf, as adjusted by income and gains and losses which are allocated to each Participant. The Plan is subject to the rules and regulations of the Employee Retirement Income Security Act of 1974, as amended, including rules relating to the duties and conduct of the Plan's fiduciaries. The following is a description of the provisions of the Plan: ELIGIBILITY. Employees of the Company are eligible to participate in the Plan as of their first pay period. Eligibility to receive matching Company contributions commences on the first day of the pay period coincident with the completion of one year of eligibility service. Non-resident aliens, summer interns, co-op students, temporary employees and independent contractors are not eligible to participate in the Plan. ADMINISTRATION. The Plan is administered on behalf of the Company by a Committee which is appointed by the Company. Vanguard Fiduciary Trust Company, the Trustee under the Plan, acts as trustee, recordkeeper and custodian of the securities and investments held by the Plan. CONTRIBUTIONS. The Plan permits four types of contributions--employee pre-tax contributions, employee after-tax contributions, employee rollover contributions and Company matching contributions. Each eligible employee may voluntarily enter into a salary adjustment agreement with the Company pursuant to which the employee agrees to a reduction in direct remuneration (pre-tax contribution). Participants may also enter into a payroll deduction agreement with the Company for after-tax contributions. The total of these deductions (pre-tax and after-tax) may not exceed 17% of annual compensation (the "Participant's Contributions"). The Company, in the discretion of the Board of Directors, may make matching contributions, based on a Participant's contributions. Currently, the matching contribution is equal to one-half of the Participant's Contributions (pre-tax and after-tax)up to 6% of compensation, with a maximum matching contribution of 3% of annual compensation (the "Company Contribution"). INVESTMENTS. Matching contributions made on a Participant's behalf by the Company will be invested in shares of the common stock of the Company. Participants who have attained age 55 and have 10 years of Plan membership may transfer a portion of their matching contribution account out of the Instron Common Stock Fund in accordance with Section 401(a)(28) of the Code. A Participant may direct that his pre-tax, after-tax and rollover contributions be invested in 10% increments in one or more of the following investment options designated by the Committee. Funds A-F are sponsored by The Vanguard Group. The description of each of the Vanguard funds is qualified in its entirety by the prospectus for the fund which can be obtained from the Trustee. THERE CAN BE NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE THEIR STATED OBJECTIVES. 9 10 FUND A - VANGUARD RETIREMENT SAVINGS TRUST. The Vanguard Retirement Savings Trust seeks to provide a high level of income and a stable share value of $1.00. The Trust invests in fixed rate investment contracts and variable rate investment contracts issued by insurance companies or banks that are highly rated by the major credit rating agencies and viewed by Vanguard as being financially sound. The interest rate and principal of each contract are obligations of the issuing insurance company or bank, not of the Trustee or the Company. Certain restrictions, limitations and penalties apply to transfers or withdrawals of a participant's account balances out of this Fund. These restrictions are described in the materials provided by the Trustee. FUND B - VANGUARD PRIME MONEY MARKET FUND. The Vanguard Prime Money Market Fund is a money market fund that seeks maximum current income, preservation of capital and liquidity by investing in a Fund of high-quality money market instruments that mature in one year or less. These include negotiable certificates of deposit, bankers' acceptances, commercial paper, and other short-term corporate obligations. The Prime Fund seeks to maintain a net asset value of $1.00 per share. An investment in the Prime Fund is neither insured nor guaranteed by the U.S. Government, the Trustee of the Company, and there can be no assurance that the Prime Fund will be able to maintain a stable net asset value of $1.00 per share or that it will achieve any particular level of current income. FUND C - VANGUARD LONG-TERM CORPORATE FUND. The Vanguard Long-Term Corporate Fund ("Corporate Fund") is a fixed income fund whose primary objective is to provide a high level of current income consistent with maintenance of principal and liquidity by investing in a diversified Fund of long-term, investment grade bonds. At least 65% of the Corporate Fund is invested in corporate bonds rated a minimum of Baa3 by Moody's Investor Services or BBB by Standard & Poor's at the time of purchase. At least 80% of the Fund's assets will normally be invested in a combination of investment grade corporate bonds and securities of the U.S. government and its agencies. The Corporate Fund is designed for investors who are seeking a high-quality, long-term corporate bond Fund and who are willing to accept the potential of significant share price volatility due to the relatively long average maturity of Corporate Fund's investments. FUND D - VANGUARD WINDSOR FUND. The Vanguard Windsor Fund is an equity fund whose primary objective is to seek long-term growth of capital and income by investing in a Fund of common stocks. As a secondary objective, this Fund also seeks to provide a reasonable level of current income. Although the Fund invests primarily in common stocks, it may invest in money market instruments, fixed income securities and other equity securities, such as preferred stock. The Fund may also invest in stock futures contracts and options. FUND E - VANGUARD STAR FUND. The Vanguard Star Fund is a diversified equity and fixed income fund whose primary objective is to maximize long-term total return of capital and income. The Star Fund invests 60%-70% of its assets in seven Vanguard equity funds, including Vanguard/Windsor Fund, Vanguard Windsor II, Vanguard Index Trust-500 Fund, Vanguard PRIMECAP Fund, Vanguard Morgan Growth Fund, and Vanguard Explorer Fund. Approximately 30%-40% of Star Fund's assets are invested in three Vanguard fixed-income Funds including Long-Term Corporate Fund, GNMA Fund of Vanguard Fixed Income Securities Fund, and Prime Money Market Fund. FUND F - VANGUARD U.S. GROWTH FUND. The Vanguard U.S. Growth Fund seeks long-term capital appreciation by investing in a diversified Fund of common stocks with above-average growth potential. Dividend income is considered incidental. The U.S. Growth Fund invests primarily in the common stocks of companies whose prospects for growth are believed to be favorable. Such companies tend to have exceptional records, strong market positions, reasonable financial strength, and low sensitivity to changing economic conditions. Securities will be selected solely on the basis of their appreciation potential as determined from an assessment of their fundamental value and consideration of prevailing market conditions. 10 11 INSTRON COMMON STOCK FUND. Contributions allocated to the Instron Common Stock Fund are invested in common shares of Instron Corporation, which is purchased by the Trustee on the open market or directly from the Company, depending on market conditions. The value of the Instron Common Stock Fund is subject to fluctuation in the market price of Instron common stock and there is no guarantee of investment performance. VESTING AND VOTING RIGHTS. Each Participant is, at all times, 100% vested in all of the investments in his account, including both those arising from Participant's Contributions and those arising from the Company's Contributions. Each Participant has the right to direct the Trustee's vote as to the number of Instron Corporation common shares standing to his credit in his account on the record date for any Company stockholder meeting. The Committee will direct the Trustee to vote proxies and take similar action with respect to the Plan's securities ownership other than Instron Corporation common shares. PARTICIPANT'S ACCOUNTING. Each participant's account is independently maintained by the Trustee and reflects all Participant's contributions and Company's contributions by both contribution and investment category. Accounts are periodically adjusted to reflect the effect of investment income, realized and unrealized investment gains and losses and withdrawals and other distributions. BENEFITS. Participants are entitled to receive their entire interest in the Plan in a lump sum whenever their employment with the Company terminates for any reason. Benefits are paid in cash, unless a Participant elects to receive an in-kind distribution of shares of Instron Common Stock credited to his account. During the period of employment with the Company, participants may (if they are over 59-1/2 years of age, or under certain hardship conditions) be entitled to withdraw part or all of their interest (exclusive of a portion of earnings) in investments arising from Participant's contributions, but not their interests in investments arising from the Company's matching contribution. If such withdrawals are non-hardship condition withdrawals, matching Company Contributions will be suspended during the twelve months following the withdrawal. All such withdrawals (except an amount equal to a Participant's after-tax contribution) are subject to federal income tax. In addition, a 10% excise tax is imposed on withdrawals made before the age of 59-1/2 years. Withdrawals of Company matching funds on the employee pre-tax and after-tax contributions are allowed upon termination of employment or retirement. Benefit payments are generally distributed within 60 days after the Participant becomes entitled to and elects to receive them, in a manner prescribed by the Committee. Special rules apply in the case of a Participant's death. PARTICIPANT LOANS. Active participants are permitted to borrow funds from their pre-tax, after-tax and rollover accounts in the Plan subject to certain limitations. Loans are not permitted from a Participant's Company Contribution account. During the 1998 Plan year, the interest rate on these loans was equal to Bank of Boston's prime rate plus 1%, at the time the loan is granted. These loans generally must be repaid over a period of no longer than 5 years. Interest paid by a Participant is credited to the account(s) from which the loan is made. MERGED PROFIT SHARING ACCOUNTS. In September 1995, the Instron Corporation Employees' Profit Sharing Plan was merged into the Plan. All participants are 100% vested in their transferred profit sharing accounts. Upon termination of employment, profit sharing accounts are distributed at the election of the participant in a lump sum, by purchase of an annuity or by installment payments over a period of up to 15 years. Participants may take loans from their profit sharing accounts in accordance with the rules discussed above. OTHER. The Company's contributions may be made only to the extent the Company has available allowable deductions under the Internal Revenue Code. The contribution percentages of certain participants may be reduced under certain circumstances and other steps may be taken, as outlined in the Plan or permitted under applicable law, in order to maintain the Plan's tax exempt status. There are special rules to allow "Rollover Contributions" of amounts received by employees from certain other retirement plans, as defined in the Plan. 11 12 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING. The accompanying financial statements have been prepared on the accrual basis of accounting, in conformity with generally accepted accounting principles. INVESTMENT VALUATION. Investments in mutual fund shares are valued at quoted market prices, which represent the net asset value of shares of registered investment companies held by the Plan at year-end. Investments in Instron Corporation's common stock are valued at the last reported sales price on the last business day of the year. In the event that no sale was reported on that date, such investments are valued at the mean of the last reported bid and asked price or the price of the last sale reported, whichever is more recent. Investments in shares of Vanguard's Retirement Savings Trust are stated at contract value, which approximates fair value. Participant loans receivable are valued at cost which approximates fair value. SECURITY TRANSACTIONS AND INVESTMENT INCOME. Sales of shares of the collective investment trust are recorded on the Trustee's valuation dates (the last day of each calendar month). All other security transactions are recorded on the trade date. Realized gains or losses on security transactions are recorded as the difference between proceeds received and cost as determined on the average cost basis. Transfers between investment options are treated as the purchase of one investment option out of the proceeds of the sale of another. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. PAYMENT OF BENEFITS. Benefits are recorded when paid (see footnote 7). EXPENSES OF THE PLAN. All expenses incurred in the administration of the Plan are charged to and paid by the Company. To the extent not paid by the Company, the expenses may be charged against the Trust assets. NET APPRECIATION (DEPRECIATION). The Plan presents in the statement of changes in net assets available for plan benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. USE OF ESTIMATES. The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the plan administrator to make significant estimates and assumptions that affect the reported amounts of net assets available for plan benefits at the date of the financial statements and the changes in net assets available for plan benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RECLASSIFICATIONS. Certain amounts in prior year financial statements have been reclassified to conform to the current year presentation. RISK AND UNCERTAINTIES. The Plan provides for various investment options in any combination of stocks, bonds, fixed income securities, 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 investment 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 plan benefits. 12 13 NOTE 3 - INVESTMENTS
DECEMBER 31, 1998 ---------------------------------------------- Units/ Market/Fair Shares Cost Value ---------- ----------- ----------- Vanguard Long-Term Corporate Fund* 268,303 $ 2,358,441 $ 2,492,539 Vanguard Prime Money Market Fund* 2,510,496 2,510,496 2,510,496 Vanguard Star Fund* 146,112 2,445,937 2,624,167 Vanguard U.S. Growth Fund* 126,280 3,571,028 4,734,224 Vanguard Windsor Fund* 974,543 14,826,295 15,173,633 Vanguard Retirement Savings Trust* 5,502,622 5,502,622 5,502,622 Instron Common Stock* 488,876 6,008,322 8,433,105 Participant Loans 857,608 857,608 ----------- ----------- Total $38,080,749 $42,328,394 =========== =========== Investment Income $ 2,630,537 =========== Net appreciation (depreciation) $(1,075,251) =========== DECEMBER 31, 1997 ---------------------------------------------- Units/ Market/Fair Shares Cost Value ---------- ----------- ----------- Vanguard Long-Term Corporate Fund* 243,040 $ 2,103,325 $ 2,250,553 Vanguard Prime Money Market Fund* 2,297,962 2,297,962 2,297,962 Vanguard Star Fund* 113,212 1,809,565 1,967,631 Vanguard U.S. Growth Fund* 77,691 1,755,357 2,229,729 Vanguard Windsor Fund* 957,803 14,315,695 16,263,492 Vanguard Retirement Savings Trust* 5,162,231 5,162,231 5,162,231 Instron Common Stock* 466,948 5,612,028 8,853,127 Participant Loans 814,090 814,090 ----------- ----------- Total $33,870,253 $39,838,815 =========== =========== Investment Income $ 3,610,290 =========== Net appreciation (depreciation) $ 3,722,611 ===========
*Exceed 5% of net assets available for plan benefits 13 14 NOTE 4 - PLAN TERMINATION The Company believes the Plan will continue without interruption, but reserves the right to terminate or amend the Plan or discontinue contributions thereto. In the event that both the Plan and the related trust funds terminate, all participants' accounts continue to be fully vested and nonforfeitable. All accounts will be valued as of the termination date and all account balances will be distributed in full to participants, in the form of cash and/or Company common stock. NOTE 5 - FEDERAL INCOME TAXES The Plan and its related trust are intended to satisfy the provisions of Sections 401 and 501 of the Code as amended from time to time and under any corresponding provisions of the Code which may be enacted. The Plan is also designed to qualify as an "Employee Stock Ownership Plan" under Section 4975(e) of the Code. Accordingly, the Plan is intended to be exempt from Federal Income taxes. The Plan last received a favorable determination letter dated January 3, 1997, from the IRS in connection with the Plan as amended and restated effective August 5, 1996, as amended. Management believes the Plan is operating in compliance with the requirements of the IRS to maintain its tax exempt status. Management is committed to amend the Plan as necessary to maintain its tax exempt status. Annual Participant's contributions up to $10,000 in 1998, adjusted annually for cost of living, the Company's contributions, and earnings on all contributions may be tax deferred. In addition, when any shares of Common Stock of the Company are distributed as part of a lump sum distribution to an employee, a portion of the tax thereon (on net unrealized appreciation) may be postponed until the time of disposition of such shares. Tax on Plan distributions may be deferred to the extent a distribution is rolled over into another qualified plan or an IRA in accordance with IRS rules. NOTE 6 - PARTIES IN INTEREST A portion of the Plan's investments are shares of mutual funds managed by Vanguard Fiduciary Trust Company (Vanguard). Vanguard acts as trustee, recordkeeper and custodian of the securities and investments held by the Plan, and is, therefore, a party in interest. Participants with outstanding loan balances and the investments in the Instron Common Stock Fund are also considered to be parties in interest. NOTE 7 - BENEFITS PAYABLE Amounts allocated to participants who have withdrawn from the Plan, but for which disbursement of those funds has not been made as of year-end, may not be recognized as a liability in the statement of net assets available for plan benefits in accordance with the American Institute of Certified Public Accountants' audit guide entitled "Audits of Employee Benefits Plan." There were $26,477 and $0 distributions payable at December 31, 1998 and 1997, respectively. Additionally, benefits paid to participants in the statement of changes in net assets available for plan benefits do not include such amounts. 14 15 NOTE 8 SUBSEQUENT EVENT On May 7, 1999, the Company announced the signing of a definitive merger agreement with Kirtland Capital Partners (KCP), which would give effect to a recapitalization of the Company. This recapitalization would be accomplished through the merger of ISN Acquisition Corporation, a wholly owned subsidiary organized by Kirtland Capital Partners III LP, with and into the Company, with the Company continuing as the surviving corporation. Each share of the Company's common stock outstanding at the effective time of the merger will be converted into the right to receive $22 per share payable in cash. In addition, certain members of management of the Company, as well as the Company's two founding shareholders, will maintain an equity interest in the Company following the closing. Under the terms of the Merger Agreement, the Company has agreed not to pay dividends on its common stock prior to the closing of the transaction. The closing of the transaction is subject to the satisfaction of various conditions, including approval of the Company's shareholders and the receipt of certain regulatory approvals. The transaction is expected to close during the third quarter of 1999. The closing per share price of Instron Common Stock on December 31, 1998 was $17.25. Subsequent to the closing of the transaction, the Company's matching contributions are anticipated to be invested according to each individual participant's investment allocation. The cash proceeds received from the conversion of Instron stock at $22 per share are anticipated to be invested according to each individual participant's investment allocation. 15 16 INSTRON CORPORATION SAVINGS AND SECURITY PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1998 Instron Corporation Savings and Security Plan, EIN 04-2057203 Attachment to Form 5500, Line 27(a)
Identity of Issue Investment Type Cost Current Value ----------------- --------------- ---- ------------- *Vanguard LT Corporate Fd Registered Investment Company $ 2,358,441 $ 2,492,539 *Vanguard Prime Money Mkt Registered Investment Company 2,510,496 2,510,496 *Vanguard STAR Fund Registered Investment Company 2,445,937 2,624,167 *Vanguard U.S. Growth Registered Investment Company 3,571,028 4,734,224 *Vanguard Windsor Fund Registered Investment Company 14,826,295 15,173,633 *Vanguard Retire Savings Trst Common/Collective Trust 5,502,622 5,502,622 *Instron Stock Fund Company Stock Fund 6,008,322 8,433,105 *Particpant Loans 7% - 10% 857,608 857,608 ----------- ----------- Total assets held for investment purposes $38,080,749 $42,328,394 =========== ===========
*Party in interest 16 17 INSTRON CORPORATION SAVINGS AND SECURITY PLAN SCHEDULE OF REPORTABLE TRANSACTIONS - SINGLE TRANSACTIONS YEAR-ENDED DECEMBER 31, 1998 Instron Corporation Savings and Security Plan, EIN 04-2057203 Attachment to Form 5500, Line 27(d)
Current Value of Asset on Description Purchase Selling Historical Cost Transaction Historical Party Involved of Asset Price Price of Asset Date Gain (Loss) - -------------- ---------- ------- ------- --------------- -------------- ----------- None
17 18 INSTRON CORPORATION SAVINGS AND SECURITY PLAN SCHEDULE OF REPORTABLE TRANSACTIONS - SERIES OF TRANSACTIONS YEAR-ENDED DECEMBER 31, 1998 Instron Corporation Savings and Security Plan, EIN 04-2057203 Attachment to Form 5500, Line 27(d)
Current Value of Asset on Historical Cost Transaction Historical Party Involved Description of Asset Purchase Price Selling Price of Asset Date Gain - -------------- ---------------------- ---------------- --------------- --------------- --------------- ----------- The Vanguard Group Vanguard Prime Money Mkt $1,154,978 $1,154,978 The Vanguard Group Vanguard Prime Money Mkt $ 942,443 $ 942,443 942,443 $ -- The Vanguard Group Vanguard U.S. Growth 2,405,860 2,405,860 The Vanguard Group Vanguard U.S. Growth 724,959 590,490 724,959 134,468 The Vanguard Group Vanguard Windsor Fund 3,146,441 3,146,441 The Vanguard Group Vanguard Windsor Fund 2,967,144 2,655,870 2,967,144 311,274 N/A Instron Stock Fund 1,180,917 1,180,917 N/A Instron Stock Fund 976,204 758,002 976,204 218,202
18 EX-23 2 CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement on Form S-8 (File No. 2-91694) of our report dated June 25, 1999, on our audits of the financial statements of the Instron Corporation Savings and Security Plan as of December 31, 1998 and 1997, and for the year ended December 31, 1998, which report is included in this Annual Report on Form 11-K. Boston, Massachusetts /s/ PricewaterhouseCoopers LLP June 25, 1999 ------------------------------------ PRICEWATERHOUSECOOPERS LLP -----END PRIVACY-ENHANCED MESSAGE-----