SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15 (d) of the
Securities and Exchange Act of 1934
For Year ended December 31, 1998
A. Full title of the plan and the address of the plan if different from
that of the issuer named below:
CRANE CO UNION EMPLOYEES SAVINGS
AND INVESTMENT PLAN (FORMERLY THE MARK
CONTROLS 401(K) SAVINGS PLAN)
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CRANE CO.
100 First Stamford Place
Stamford, Connecticut 06902
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CRANE CO UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN (FORMERLY THE MARK
CONTROLS 401(K) SAVINGS PLAN
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TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits
as of December 31, 1998 and 1997 2
Statements of Changes in Net Assets Available for Benefits
for the Years ended December 31, 1998 and 1997 3
Notes to Financial Statements 4
Exhibit 23.1 - Consent of Independent Auditors 10
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INDEPENDENT AUDITORS' REPORT
Crane Co. Union Employees Savings and Investment Plan (Formerly the Mark
Controls 401(k) Savings Plan):
We have audited the accompanying statements of net assets available for benefits
of the Crane Co. Union Employees Savings and Investment Plan Formerly the Mark
Controls 401(k) Savings Plan) (the "Plan") as of December 31, 1998 and 1997, and
the related statements of changes in net assets available for benefits for the
years 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1998
and 1997, and the changes in its net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Stamford, Connecticut
August 20, 1999
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN (FORMERLY THE MARK
CONTROLS 401(K) SAVINGS PLAN)
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1998 AND 1997
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1998 1997
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ASSETS
INVESTMENTS, AT FAIR VALUE:
Vanguard Money Market Reserves - Prime Portfolio $130,827 $118,819
Vanguard Retirement Savings Trust 85,638 59,924
Vanguard/Windsor II 97,588 83,381
Crane Co. Stock Fund 57,317 18,981
Vanguard/Wellington Fund 277,577 212,444
Vanguard/Morgan Growth Fund 1,748 -
Vanguard Fixed Income Securities-Long-Term Corporate Portfolio 3,273 -
Vanguard Index Trust - 500 Portfolio 8,320 -
Vanguard/PRIMECAP Fund 4,054 -
Loan Fund 24,074 21,895
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Total investments 690,416 515,444
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RECEIVABLES:
Company contributions 3,976 -
Employee contributions 10,181 9,189
Interest and dividends - 1,953
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Total receivables 14,157 11,142
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NET ASSETS AVAILABLE FOR BENEFITS $704,573 $526,586
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See notes to financial statements.
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN (FORMERLY THE MARK
CONTROLS 401(K) SAVINGS PLAN)
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1998 and 1997
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1998 1997
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CONTRIBUTIONS:
Employee $133,393 $97,378
Crane Co. 21,451 -
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Total contributions 154,844 97,378
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EARNINGS ON INVESTMENTS:
Interest and dividends 53,154 36,276
Net appreciation in fair value of investments 2,359 33,489
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Total earnings on investments 55,513 69,765
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DISTRIBUTIONS TO PARTICIPANTS (28,955) (15,448)
ADMINISTRATIVE AND OTHER EXPENSES (3,415) (160)
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
177,987 151,535
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 526,586 375,051
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NET ASSETS AVAILABLE FOR BENEFITS
End of year $704,573 $526,586
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See notes to financial statements.
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN (FORMERLY THE MARK
CONTROLS 401(K) SAVINGS PLAN)
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Notes to Financial Statements for Years ended December 31, 1998 and 1997
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1. DESCRIPTION OF THE PLAN
The following is a brief description of the Crane Co. Union Employees Savings
and Investment Plan (formerly the Mark Controls 401(k) Savings Plan) ("the
Plan"). Participants should refer to the Plan agreement and amendments for more
complete information.
A. General - The Plan is a defined contribution plan covering certain
United States bargaining employees Of Crane Co. and its subsidiaries (the
"Company"). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
B. Plan Amendments - The predecessor plan was The Mark Controls 401(k)
Savings Plan and was amended effective January 1, 1998 renaming the
Plan to the Crane Co. Union Employees Savings and Investment Plan.
Effective January 1, 1998 the Plan became available to those Crane Co.
collective bargaining units who negotiated inclusion in the Plan. The
benefits delivered vary by union group and are dependent upon the
negotiated terms through the collective bargaining process.
C. Administration of the Plan - The authority to manage, control and
interpret the Plan is vested in the Administrative Committee of the Company.
The Committee, which is appointed by the Board of Directors of the Company,
appoints the Plan Administrator and is the "named Fiduciary" within the
meaning of the Employee Retirement Income Security Act of 1974.
D. Participation - Subject to certain conditions, U.S. union employees of
Crane Washington; Powers Process (effective 1995); Dyrotech Industries
(effective 1998) and Kemlite Company Inc. (effective 1998); are eligible to
participate in the Plan following completion of one year of service, as
defined in the Plan document. Effective June 1, 1997, employees are eligible
to participate in the Plan on the first day of the month coincident with or
next following their date of hire.
E. Contributions and Funding Policy - Participants may elect to contribute
to the Plan from two to sixteen percent of their annual compensation.
Contributions are invested in short-term, stock, equity, bond, company stock
or fixed income funds selected by the participant. The Company matching
benefits vary by Union group and are dependent upon the negotiated terms
through the collective bargaining process. In accordance with the Internal
Revenue Code, participant pretax contributions could not exceed $10,000 in
1998 and $9,500 in 1997.
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F. Expenses - Administrative expenses of the Plan (except those associated
with the Crane Co. Stock Fund) are paid by the employer. In addition
personnel and facilities of the employer used by the Plan for its accounting
and other activities are provided at no charge to the Plan. Commission fees
and administrative expenses incurred by the Crane Co. Stock Fund are paid by
the fund through automatic unit deductions. Participant loan fees are paid
by the participant through automatic deductions.
G. Vesting - Employee contributions are 100 percent vested. Vesting for
employer contributions are as follows:
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Years of Service Vested Interest
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Less than 1 year None
1 year but fewer than 2 20%
2 years but fewer than 3 40%
3 years but fewer than 4 60%
4 years but fewer than 5 80%
5 years or more 100%
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Participants whose employment terminates by reason of death, permanent
disability or retirement are fully vested. Participants are fully vested upon
the attainment of age sixty-five (65).
H. Distributions - A participant whose employment with the Company terminates
can elect to receive all vested amounts, subject to applicable tax law. A
participant may apply to the Administrative Committee for a distribution in
cases of hardship. The Committee has the sole discretion to approve or
disapprove hardship withdrawal requests, in accordance with the Internal
Revenue Code. Any part of a participant's Company contribution portion which
is not vested at the time of termination of employment is forfeited and used
to reduce future Company contributions.
I. Plan Termination - The Company expects to continue the Plan indefinitely,
but reserves the right to modify, suspend or terminate the Plan at any time,
which includes the right to vary the amount of, or to terminate, the
Company's contributions to the Plan. In the event of the Plan's termination
or discontinuance of contributions thereunder, the interest of each
participant in benefits accrued to such date, to the extent then funded, is
fully vested and nonforfeitable. Subject to the requirements of the Internal
Revenue Code, the Administrative Committee shall thereupon direct either (i)
that the Trustee continues to hold the accounts of participants in accordance
with the provisions of the Plan without regard to such termination until all
funds in such accounts have been distributed in accordance with such
provisions, or (ii) that the Trustee immediately distribute to each
participant all amounts then credited to their account as a lump sum.
J. Tax Status - The Internal Revenue Service has determined and informed the
Company by letter dated March 3, 1995 that the Plan and related trust are
designed in accordance with the applicable sections of the Internal Revenue
Code (the "Code"). The Plan Administrator believes that the Plan is currently
being operated in compliance with the applicable requirements of the Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
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K. Rollovers and Transfers from Other Plans - Rollovers and transfers from
other qualified plans are accepted by the Plan. Rollovers and transfers
represent contributions of assets from other qualified plans of companies
acquired by Crane Co. and participant account balances of new employees from
other non-company qualified plans.
L. Participant Loan Fund - Some participants (depending on negotiated union
plan) may borrow from their fund accounts a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50 percent of their account balance. Loan
transactions are treated as a transfer between the investment fund and the
Loan Fund. Loan terms range from 1-5 years or up to 10 years for the purchase
of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at the prevailing prime lending rate
on the first day of the Plan year plus 2 percent. Principal and interest are
paid ratably through regular payroll deductions.
M. Investment Funds
The Plan provides the following funds in which participants can elect to
invest their Plan assets:
Vanguard Money Market Reserves - Prime Portfolio - A diversified portfolio
of money market instruments such as: domestic certificates of deposit and
bankers' acceptances, commercial paper rated A1/P1 or better, U.S. Treasury
and Government Agency securities and repurchase agreements on such
securities and up to 50 percent of approved foreign banks net assets in
Eurodollar certificates of deposit issued by approved U.S.banks and Yankee
obligations. The intent is to maintain a constant net asset value of $1.00
per share.
Vanguard Retirement Savings Trust - Tax-exempt collective trust invested
primarily in guaranteed investment contracts issued annually by insurance
companies and commercial banks, and similar types of fixed principal
investments. The intent is to maintain a constant net asset value of $1.00
per share. Plan assets in the Retirement Savings Trust are recorded at
contract value (which represents contributions made under the contract plus
earnings, less withdrawals and administrative expenses) because they are
fully benefit responsive. The average yield was approximately, 6% during
both 1998 and 1997. The crediting interest rate was approximately 6% at
December 31, 1998 and 1997. Fair value of Plan assets invested was $85,638
and $59,924 at December 31, 1998 and 1997, respectively. The fair value of
the Trust's assets approximated contract value at December 31,1998 and 1997.
Vanguard/Windsor II - A diversified portfolio of equity securities seeking
to provide long-term growth of capital and income. Its secondary objective
is to provide a reasonable level of current income.
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Crane Co. Stock Fund - Investments in the common stock of Crane Co.
--------------------
Vanguard/Wellington Fund - A diversified portfolio of equity and fixed income
securities aimed at conserving capital, providing reasonable levels of current
income and profits without undue risks. Generally, 60-70 percent of net assets
are allocated to equities and 30-40 percent to fixed income securities.
Vanguard/Morgan Growth Portfolio - A diversified portfolio of equity
securities seeking to provide long-term growth of capital; dividend income is
incidental.
Vanguard Fixed Income Securities - Long-Term Corporate Portfolio - A
diversified portfolio of long-term investment-grade bonds seeking to provide a
high and sustainable level of current income consistent with the maintenance
of principal and liquidity by investing in a diversified portfolio of
long-term investment-grade bonds.
Vanguard Index Trust - 500 Portfolio - A broadly diversified portfolio of
equity securities seeking to provide investment results that parallel the
performance of the Standard & Poor's 500 Composite Stock Price Index. Given
this objective the portfolio is expected to provide long-term growth of
capital and income as well as a reasonable level of current income.
Vanguard/PRIMECAP Fund - A diversified portfolio of equity securities seeking
to provide long-term growth of capital; dividend income is incidental.
The Trustee may, at its discretion, keep any portion of the above-mentioned
investment programs in cash or short-term commercial paper to accommodate
withdrawals and administrative fees or deposit all or any part of such funds
in a "General Account" pending further instruction by participants.
2. SUMMARY OF ACCOUNTING POLICIES
The following is a summary of the significant accounting and reporting
policies followed in preparation of the financial statements of the Plan.
A. The financial statements of the Plan have been prepared using the accrual
basis of accounting.
Investment Valuation- Investments in mutual funds are valued at the closing
composite price published for the last business day of the year. The Crane Co.
Stock Fund is valued at the quoted market price of the company. Participant
loans are valued at cost, which approximates fair value.
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B. Below are the investments whose fair value individually represented
5 percent or more of the Plan's net assets as of December 31, 1998 and 1997:
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1998 1997
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Shares/Units Market Value Shares/Units Market Value
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Vanguard Money Market
Reserves-Prime Portfolio 130,827 $ 130,827 118,819 $ 118,819
Vanguard/Windsor II 3,269 97,588 2,913 83,381
Vanguard Retirement Savings Trust 85,638 85,638 59,924 59,924
Vanguard/Wellington Fund 9,457 277,577 7,214 212,444
Crane Co. Stock Fund 1,272 57,317 439 18,981
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C. Investment Transactions and Investment Income - Investment transactions
are accounted for on the date purchases or sales are executed. Dividend
income is accounted for on the ex-dividend date. Interest income is
recorded on the accrual basis as earned. Total income of each fund is
allocated monthly to participants' accounts within the fund based on the
participants' relative beginning balance. In accordance with Department
of Labor requirements, realized and unrealized gains and losses are
determined based on the fair market value of assets at the beginning of the
plan year.
D. Distributions to Participants- Benefit payments are recorded when paid.
E. General - The financial statements are prepared in conformity with
generally accepted accounting principles which require management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits and contingent assets and liabilities at the date
of the financial statements, and the reported amounts of additions and
deductions during the reporting period. Actual results could differ from those
estimates.
3. PARTIES-IN-INTEREST
The Plan has investments and transactions with parties-in-interest, those
parties being The Vanguard Group, Crane Co. and participants with loan
balances.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the Amended and Restated Crane Co. Savings and
Investment Plan has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
ADMINISTRATIVE COMMITTEE OF THE CRANE CO. UNION EMPLOYEES
SAVINGS AND INVESTMENT PLAN
/s/ A. I. duPont
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A. I. duPont
/s/ J. R. Packard
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J. R. Packard
/s/ G. A. Dickoff
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G. A. Dickoff
Stamford, CT
April 28, 2000
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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Crane Co. on Form S-8 for the Crane Co. Union Employees Savings and Investment
Plan (the "Plan") of our report dated August 20, 1999 appearing in this Annual
Report on Form 11-K of the Plan for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
April 28, 2000
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