<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11 - K
[x] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended DECEMBER 31, 1998
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 - 5542
DEXTER CORPORATION 401(K) SAVINGS PLAN
(Full title of plan)
Dexter Corporation
One Elm Street
Windsor Locks, CT 06096
(Name of issuer of the securities held pursuant to the plan
and address of its principal executive office)
REQUIRED INFORMATION
Dexter Corporation 401(K) Savings Plan ('Plan') is subject to the Employee
Retirement Income Security Act of 1974 ('ERISA'). Therefore, attached hereto, in
lieu of the requirements of Items 1 - 3 of Form 11 - K, are the financial
statements and supplemental schedule of the Plan for the two fiscal years ended
December 31, 1998 and 1997, which have been prepared in accordance with the
financial reporting requirements of ERISA.
EXHIBIT
<TABLE>
<CAPTION>
Designation Description Method of Filing
- ----------- ----------- ----------------
<S> <C> <C>
Exhibit 23 Consent of PricewaterhouseCoopers LLP, Filed with this report
Independent Public Accountants
</TABLE>
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Dexter
Corporation, the plan administrator of Dexter Corporation 401(K) Savings Plan,
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
DEXTER CORPORATION 401(K) SAVINGS PLAN
Date: June 29, 1999 /s/ Lawrence D. McClure
------------------------ --------------------------------------
Lawrence D. McClure
Dexter Corporation
Plan Administrator
<PAGE> 3
DEXTER CORPORATION
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE> 4
DEXTER CORPORATION 401(k) SAVINGS PLAN
CONTENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
PAGE
Report of Independent Accountants 1
Financial Statements
Statement of Net Assets Available for Benefits
at December 31, 1998 and December 31, 1997 2
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 1998 and 1997 3
Notes to Financial Statements 4
Supplemental Schedule
Line 27E - Schedule of Nonexempt Transactions
for the year ended December 31, 1998 15
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of
Dexter Corporation 401(k) Savings Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Dexter Corporation 401(k) Savings Plan (the "Plan") at December 31, 1998 and
1997, and the changes in net assets available for benefits for the years then
ended 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 schedule of nonexempt
transactions for the year ended December 31, 1998 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. This supplemental schedule is the
responsibility of the Plan's management. This supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
June 8, 1999
Springfield, Massachusetts
<PAGE> 6
DEXTER CORPORATION 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Assets
Investment in Master Trust at fair value $59,866,782 $46,598,711
Contributions receivable
Employer 45,612 128,006
Employee 11,483 274,911
----------- -----------
Total assets 59,923,877 47,001,628
Accrued administrative costs -- 32,640
----------- -----------
Net assets available for benefits $59,923,877 $46,968,988
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 7
DEXTER CORPORATION 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 1,564,451 $ 1,440,453
Employee 5,569,392 3,875,607
Net appreciation of the master trusts 9,580,747 7,905,419
Transfers from merged plans -- 405,478
Net transfers -- (14)
----------- ------------
16,714,590 13,626,943
----------- ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid directly to participants or their beneficiaries 3,544,001 2,897,225
Administrative expenses 215,700 206,797
----------- ------------
3,759,701 3,104,022
----------- ------------
Net increase 12,954,889 10,522,921
Net assets available for benefits, beginning of year 46,968,988 36,446,067
----------- ------------
Net assets available for benefits, end of year $59,923,877 $ 46,968,988
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 8
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN AND NATURE OF OPERATIONS
The following is a general description of the Plan. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all eligible employees of
the Dexter Adhesive and Coating Systems, the Dexter Electronic Materials,
the Dexter Packaging Coatings, and the Dexter Magnetic Technologies
businesses. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA) and is intended to meet the
requirements of Section 401(a), 401(k), and 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). The 401(k) Plan was amended and
restated as of October 1, 1998 to rename the plan Dexter Corporation 401(k)
Savings Plan (the "Plan"), to amend certain plan provisions and provide
changes and additions to the investment options.
PLAN ADMINISTRATOR
Dexter Corporation (the "Company") is the administrator of the Plan. Among
the responsibilities of the Company as the administrator are to calculate
employer contributions, to determine financial hardship for participant
withdrawals and to make such rules and regulations as it may deem necessary
to carry out the provisions of the Plan. All administrative fees are paid
from the assets of the Plan.
ELIGIBILITY
Each eligible employee becomes a participant in the Plan on the first day
of the month following the first day of employment.
CONTRIBUTIONS AND PARTICIPANT ACCOUNTS
Participants may make on a pre-tax basis elective contributions to the Plan
of 1% to 15% of the participant's salary. Such participant contributions
are subject to certain requirements including Sections 402(g) and 415(d) of
the Code.
The Company makes contributions of 50% of the actual total pre-tax
participant contributions in the plan year up to a maximum of 6% of the
participant's salary. These contributions are made at least quarterly.
Additionally, the Company may make discretionary contributions on behalf of
all eligible participants of amounts in excess of 50% of participants'
contributions.
At any time, a participant may direct the Plan's trustee to invest in 1%
increments the value of his or her account and/or future contributions in a
Spartan U.S. Equity Index Fund, Managed Income Portfolio (MIP) II, Dexter
Corporation Stock Fund, Small Cap Selector, Diversified International Fund,
Puritan Fund, Equity-Income Fund, Blue Chip Growth Fund, Aggressive Growth
Fund, and PIMCO Total Return Fund.
-4-
<PAGE> 9
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
VESTING
Matching contributions and associated earnings vest according to the
following schedule:
YEARS OF PARTICIPATION PERCENT VESTED
1 25%
2 50%
3 100%
A year of participation equals four quarters of a participation year.
One-quarter of a participation year is a calendar quarter of the plan year
in which a pre-tax contribution is made.
If the interest of the participant in the Company matching contributions
account has not become fully vested under the above schedule, the account
will become fully vested upon (a) attaining the age of 65 while employed by
the Company, (b) death, (c) termination of employment due to disability, or
(d) discontinuance of contributions by the company or termination of the
Plan. If a participant separates from the Company before becoming fully
vested, non-vested matching contributions will be forfeited. These
forfeitures will first be used to pay administrative expenses and then will
be applied toward Company matching contributions.
Employee elective pre-tax contributions are immediately fully vested.
PAYMENT OF BENEFITS
Each participant is eligible to receive payment of his or her account no
later than 60 days after the end of the later of the plan year in which the
participant attains age 65 or the plan year in which the participant
separates from service. There are also provisions for distributions upon a
participant's early retirement, late retirement, termination of employment,
death, or disability.
All payments under the Plan are made in a single lump sum or in Company
securities, or some combination of Company securities or cash. In the event
that any portion of the participant's account is invested in Dexter stock,
he or she may request payment in whole shares of stock (with any fractional
shares paid in cash), in cash, or in some combination of shares of stock
and cash.
Daily the yield (interest, dividends and net realized and unrealized gains
and losses) on investments is allocated to each participant's account in
accordance with the ratio of the value of a participant's account to the
value of the fund(s).
WITHDRAWALS AND LOANS
A participant may withdraw all or any portion of his or her vested account
balance resulting only from his or her contributions exclusive of certain
earnings on pre-tax contributions. Withdrawals are subject to a
participant's proof of hardship due to an immediate and heavy financial
need as further provided in the Plan. The determination of financial
hardship and the amount withdrawn shall be made by the Plan Administrator
in accordance with nondiscrimination standards applied uniformly to all
participants similarly situated.
-5-
<PAGE> 10
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Participants may also obtain loans from the Plan. A participant may have no
more than two loans outstanding at any time. The total amount outstanding
shall not exceed the lesser of 50% of the participant's vested interest in
his or her account or $50,000. Interest is charged on the outstanding loan
balance at a rate in accordance with the loan policy and subject to uniform
and nondiscriminatory rules as established by the Plan Administrator.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The financial statements have been prepared on the accrual basis of
accounting. 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 amount of net
assets available for benefits at the date of the financial statements and
the reported amounts of additions to and deductions from net assets
available for benefits during the reporting period. Actual results could
differ from those estimates.
RISKS AND UNCERTAINTIES
The plan provides for investment options in various funds of the Master
Trust which hold any combination of stocks, bonds, fixed income, and other
investment securities. Investment securities are exposed to interest rate,
market, credit and other risks. Due to the uncertainty related to changes
in these factors, it is at least reasonably possible that changes in the
value of investments in the near term could materially affect participants'
account balances and the amounts reported in the statement of net assets
available for benefits and the statement of changes in net assets available
for benefits.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
INVESTMENT VALUATION
All assets are valued as of the last business day of the year according to
the following methods:
Fleet National Bank held certain combined assets of the Plan and other
employee benefit plans of the Company in a Master Trust (the "Fleet Master
Trust") through July 31, 1998. On August 1, 1998, the Fleet Master Trust
assets for all defined contribution plans were transferred to a newly
established Master Trust held by Fidelity Management Trust Company
("Fidelity Master Trust"). The allocable portion of the Plan's assets and
related income of the master trusts are included in these financial
statements.
Approximately twenty-six percent of the assets of the Fidelity Master Trust
are owned by the Plan at December 31, 1998 (approximately eighteen percent
owned of the Fleet Master Trust at December 31, 1997). In addition to Fleet
and Fidelity, other managers act as investment advisors for certain of the
combined assets of the Trust.
The investment in Master Trust consists of holdings in pooled funds and are
valued at fair value as noted below for each type of investment. A unit
value for each fund is determined by dividing the outstanding units into
the fair value of the fund. The unit values are utilized to allocate
investment income and the assets to an individual participant's account.
-6-
<PAGE> 11
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
At December 31, 1998, investments contained in mutual and pooled funds were
valued according to the following methods:
COMMON STOCKS
If listed on a major exchange or traded over-the-counter, the Trust
uses the closing price for that exchange. If the stock is traded on
more than one exchange, the closing composite price is used.
CORPORATE BONDS
Corporate bonds are stated at values determined on the basis of matrix
prices received from a third-party broker.
GOVERNMENT SECURITIES
The Trust accounting reflects dealer market value quotes at the last
business day of the month.
SHORT-TERM OBLIGATIONS
Short-term instruments are valued at cost, which approximates fair
value.
GUARANTEED INVESTMENT CONTRACTS
Fully benefit-responsive guaranteed investment contracts are valued at
cost (contract value) plus accrued interest.
PARTICIPANT LOANS
Participant loans are stated at the unpaid principal balance.
MUTUAL FUNDS
The fund's net asset value per share is the value of a single share.
Fidelity normally calculates the fund's net assets value per share as
of the close of business of the New York Stock Exchange.
MANAGED INCOME PORTFOLIO (MIP) II
The value of each share is determined on a daily basis by subtracting
total liabilities from the total value of the assets, including accrued
income, and dividing the amount remaining by the number of units
outstanding on each valuation date. Portfolio assets are valued at fair
value as determined in good faith by Fidelity.
OTHER
The Fleet Master Trust recorded purchases and sales of securities on a
settlement date basis. Gains or losses on sales of securities were based on
average cost. Dividend income was recorded on the ex-dividend date. The
Fidelity Master Trust values transactions daily on a trade date basis.
Income from other investments is recorded as earned on the accrual basis.
The net appreciation in the fair value of investments is presented in the
statement of changes in net assets available for benefits under the caption
"net appreciation of the master trusts". This amount includes the realized
gains or losses, the unrealized appreciation or depreciation on those
investments, and interest income earned.
-7-
<PAGE> 12
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated May 28, 1998 that the Plan, as amended through May 16, 1996,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since May 16, 1996. The Plan Administrator
and the Plan's tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the Internal Revenue Code.
4. PLAN TERMINATION
In the event of the termination or partial termination of the Plan or the
permanent discontinuance of contributions, a distribution of one hundred
percent of each participant's share will be made. Distribution may be made,
as feasible, to another qualified plan or to an individual retirement
account.
The Company reserves the right by resolution of its Board of Directors to
amend or modify the Plan at any time and for any reason, and also reserves
the right by resolution to terminate the Plan at any time and for any
reason. However, no such action shall permit any part of the assets of the
fund to be used for, or diverted to, purposes other than for the exclusive
benefit of participants, retired participants or beneficiaries, or to
revert to the Company prior to satisfaction of all the liabilities under
the Plan; nor shall such action, except to the extent required to permit
the Plan to meet the requirements of the Internal Revenue Code or of any
governmental authority, affect adversely, in any way, rights theretofore
acquired by the participants.
-8-
<PAGE> 13
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
5. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
VALUATION
The MIP II fund of the Fidelity Master Trust, in which the Plan
participates, invests in five guaranteed investment contracts (GICs) with
insurance companies in 1998 (five in the Fleet Master Trust Fixed Income
Fund in 1997). Also included in the MIP II Blend fund is the SEI Stable
Asset Fund which is a commingled fund consisting of GICs and other
investments. These GICs and the SEI Stable Asset Fund are fully
benefit-responsive and are included in the Fidelity Master Trust at
contract value plus accrued interest. The fair values of the individual
contracts have been determined based on market interest rates for interest
rate swap agreements of comparable duration for the years ended December
31, 1998 and 1997 and are presented below:
<TABLE>
<CAPTION>
1998
- ---------------------------------------------------------------------------------------------------------------------
CONTRACT VALUE
MATURITY CREDITING INCLUDING FAIR
ISSUER DATE INTEREST RATE ACCRUED INTEREST VALUE
<S> <C> <C> <C> <C>
John Hancock Mutual Life Insurance Company 12/15/99 7.50% $ 6,900,854 $ 7,037,358
John Hancock Mutual Life Insurance Company 6/15/99 8.25 3,432,078 3,473,941
Metropolitan Life Insurance Company 6/15/01 6.70 3,316,202 3,316,203
New York Life Insurance and Annuity Corporation 12/15/99 6.35 5,654,207 5,750,004
SEI Stable Asset Fund 3/13/99 6.16 25,437,398 25,437,389
Fidelity IPL N/A 5.62 16,514,080 16,514,080
------------- ------------
Total $ 61,254,819 61,528,975
============= ============
</TABLE>
<TABLE>
<CAPTION>
1997
- ---------------------------------------------------------------------------------------------------------------------
CONTRACT VALUE
MATURITY CREDITING INCLUDING FAIR
ISSUER DATE INTEREST RATE ACCRUED INTEREST VALUE
<S> <C> <C> <C> <C>
John Hancock Mutual Life Insurance Company 12/15/99 7.50% $ 6,419,400 $ 6,596,663
John Hancock Mutual Life Insurance Company 12/15/98 8.25 6,339,647 6,503,876
Metropolitan Life Insurance Company 6/15/01 6.70 3,107,969 3,170,729
New York Life Insurance and Annuity Corporation 9/15/98 7.00 4,108,467 4,136,796
New York Life Insurance and Annuity Corporation 2/15/00 6.35 5,316,603 5,354,718
SEI Stable Asset Fund Various Various 24,627,703 24,505,061
------------- ------------
Total $ 49,919,789 $ 50,267,843
============= ============
</TABLE>
CONCENTRATION OF CREDIT RISK
Of the guaranteed investment contracts included in the MIP II fund, two
(three in the fixed income fund in 1997), which were held with two
individual insurance companies at December 31, 1998 and 1997, respectively,
represent concentrations of credit risk. The total contract values held
with each company are approximately $6.9 million, and $16.5 million,
respectively ($6.4 million, $6.3 million and $5.3 million, respectively at
December 31, 1997) and represent 11.1%, and 26.5%, respectively (12.7%,
12.5%, and 10.5%, respectively, at December 31, 1997), of the total fair
value of the MIP II Fund (fixed income fund in 1997). The SEI Stable Asset
Fund has a contract value, including accrued interest, of approximately
$25.4 million ($24.6 million in 1997) and represents 40.8% (48.6% in 1997)
of the total fair value of the MIP II fund.
-9-
<PAGE> 14
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
6. MASTER TRUST
Investments and net appreciation of the master trusts for the Dexter
Corporation Master Trusts and the Plan's allocable portion at December 31,
1998 and 1997 and for the years then ended, are as follows:
<TABLE>
<CAPTION>
INVESTMENT IN FIDELITY MASTER TRUST DECEMBER 31, 1998
---------------------------------------------------------------------------
FIDELITY MASTER TRUST PLAN'S SHARE OF FIDELITY MASTER TRUST
----------------------------------- --------------------------------------
FAIR VALUE COST FAIR VALUE COST
<S> <C> <C> <C> <C>
Spartan U.S. Equity Index fund $ 144,559,480 $ 136,435,450 $ 35,924,800 $ 33,833,056
MIP II 62,349,051 62,349,051 12,011,222 12,011,222
Dexter Corporation Stock fund 2,224,784 1,907,087 1,594,356 1,330,947
Participant Loan fund 4,374,338 4,374,338 2,998,258 2,998,258
Small Cap Selector 5,525,948 5,353,926 2,779,150 2,690,161
Diversified International fund 2,426,685 2,519,856 1,347,704 1,395,528
Puritan fund 1,539,278 1,451,542 324,394 305,959
Equity-Income fund 886,202 844,886 64,906 61,563
Blue Chip Growth fund 5,502,563 4,769,996 1,593,539 1,355,939
Aggressive Growth fund 2,179,539 1,908,378 809,999 702,361
PIMCO Total Return fund 2,479,245 2,548,929 418,454 432,833
----------------- ---------------- ------------------ -------------------
$ 234,047,113 $ 224,463,439 $ 59,866,782 $ 57,117,827
================= ================ ================== ===================
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT IN FLEET MASTER TRUST DECEMBER 31, 1997
---------------------------------------------------------------------------
FLEET MASTER TRUST PLAN'S SHARE OF FLEET MASTER TRUST
----------------------------------- --------------------------------------
FAIR VALUE COST FAIR VALUE COST
<S> <C> <C> <C> <C>
Large/Mid Cap Equity fund $ 151,553,887 $ 109,123,219 $ 27,856,588 $ 20,057,556
Fixed Income fund 50,692,638 50,692,638 11,025,462 11,025,462
Dexter Corporation Stock fund 9,255,185 6,240,802 1,913,484 1,105,668
Participant Loan fund 3,092,826 3,092,826 2,643,333 2,643,333
Money Market fund 2,610,032 2,610,032 274,895 274,895
Pension Bond fund 21,952,225 21,678,206
Pension Fixed fund 9,554 9,554
Permag Bond fund 7,238,653 7,154,946
Small Cap Equity fund 4,849,734 4,699,045 2,060,077 1,996,067
International Equity fund 6,567,574 6,993,935 824,872 878,422
----------------- ---------------- ------------------ -------------------
$ 257,822,308 $ 212,295,203 $ 46,598,711 $ 37,981,403
================= ================ ================== ===================
</TABLE>
-10-
<PAGE> 15
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
6. MASTER TRUST, CONTINUED
<TABLE>
<CAPTION>
NET APPRECIATION OF THE MASTER TRUSTS
--------------------------------------------------------------------------
FOR THE YEARS ENDED
--------------------------------------------------------------------------
DECEMBER 31, 1998 DECEMBER 31, 1997
-------------------------------------------- ----------------------------
PLAN'S SHARE PLAN'S SHARE
FLEET MASTER FIDELITY MASTER OF FLEET MASTER OF FLEET
TRUST TRUST MASTER TRUSTS TRUST MASTER TRUSTS
<S> <C> <C> <C> <C> <C>
Spartan U.S. Equity Index fund/Large/Mid Cap Equity fund $30,494,147 $ 13,458,797 $ 8,454,442 $ 34,850,215 $ 6,135,785
MIP II/Fixed Income/Money Market fund/Permag Bond fund 2,439,406 1,794,340 776,644 4,244,875 716,886
Dexter Corporation Stock fund (2,565,897) 203,524 (582,031) 2,580,658 579,994
Participant Loan fund 160,191 156,919 237,128 222,688 192,953
Pension Bond fund 2,142,956 2,025,292
Pension Fixed fund 538 529
Small Cap Selector/Small Cap Equity fund 267,638 (25,919) 146,212 595,134 238,589
Diversified International fund/International Equity fund 947,107 (92,647) 113,264 (122,117) 41,212
Puritan fund 155,327 24,974
Equity-Income fund 68,932 5,396
Blue Chip Growth fund 770,395 252,281
Aggressive Growth fund 387,852 149,898
PIMCO Total Return fund 15,179 2,539
----------- ------------- ------------ ------------ ------------
$33,886,086 $ 16,892,699 $ 9,580,747 $ 44,397,274 $ 7,905,419
=========== ============= ============ ============ ============
</TABLE>
At December 31, 1998, 1,210 employees (1,137 in 1997) were participating in
the Plan. Approximate participation by fund was:
<TABLE>
<CAPTION>
NUMBER OF PARTICIPANTS
------------------------------------------
DECEMBER 31, 1998 DECEMBER 31, 1997
<S> <C> <C>
Spartan U.S. Equity Index fund/Large/Mid Cap Equity fund 1,118 1,004
MIP II/Fixed Income/Money Market fund 855 860
Dexter Corporation Stock fund 449 363
Participant Loan fund 373 357
Small Cap Selector/Small Cap Equity fund 389 238
Diversified International fund/International Equity fund 277 183
Puritan fund 56
Equity-Income fund 50
Blue Chip Growth fund 181
Aggressive Growth fund 124
PIMCO Total Return fund 43
</TABLE>
-11-
<PAGE> 16
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
7. AMOUNTS ALLOCABLE TO EACH SEPARATE INVESTMENT FUND
The changes in net assets available for benefits of the various funds for
the year ended December 31, 1998 are as follows:
<TABLE>
<CAPTION>
SPARTAN
U.S. EQUITY DEXTER
INDEX PURITAN PARTICIPANT CORPORATION SMALL CAP
FUND MIP II FUND LOAN FUND STOCK FUND SELECTOR FUND
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 896,126 $ 397,037 $ 1,467 $ -- $ 43,472 $ 138,143
Employee 2,531,222 1,984,739 4,788 100,868 184,464 469,712
Net appreciation of the Master Trusts 8,454,442 776,644 24,974 237,128 (582,031) 146,212
------------ ------------ -------- ----------- ----------- -----------
11,881,790 3,158,420 31,229 337,996 (354,095) 754,067
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 1,954,644 1,295,671 -- 91,030 104,603 45,687
Administrative expenses 132,391 23,770 -- 44,729 8,853 3,622
------------ ------------ -------- ----------- ----------- -----------
2,087,035 1,319,441 -- 135,759 113,456 49,309
Net transfers (1,845,705) (1,198,156) 293,253 299,441 10,395 (45,780)
------------ ------------ -------- ----------- ----------- -----------
Net addition (deduction) 7,949,050 640,823 324,482 501,678 (457,156) 658,978
Net assets available for benefits,
beginning of year 28,103,560 11,424,859 -- 2,585,997 1,921,153 2,089,744
------------ ------------ -------- ----------- ----------- -----------
Net assets available for benefits, end of year $ 36,052,610 $ 12,065,682 $324,482 $ 3,087,675 $ 1,463,997 $ 2,748,722
============ ============ ======== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
DIVERSIFIED BLUE CHIP AGGRESSIVE PIMCO
INTERNATIONAL EQUITY- GROWTH GROWTH TOTAL
FUND INCOME FUND FUND FUND RETURN FUND TOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 71,928 $ 1,676 $ 9,198 $ 3,463 $ 1,941 $ 1,564,451
Employee 223,053 11,756 38,737 14,223 5,830 5,569,392
Net appreciation of the Master Trusts 113,264 5,396 252,281 149,898 2,539 9,580,747
---------- -------- ---------- -------- ----------- -----------
408,245 18,828 300,216 167,584 10,310 16,714,590
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 51,798 -- 568 -- -- 3,544,001
Administrative expenses 2,272 -- -- 63 -- 215,700
---------- -------- ---------- -------- ----------- -----------
54,070 -- 568 63 -- 3,759,701
Net transfers 94,788 46,179 1,294,608 642,717 408,260 --
---------- -------- ---------- -------- ----------- -----------
Net addition (deduction) 448,963 65,007 1,594,256 810,238 418,570 12,954,889
Net assets available for benefits,
beginning of year 843,675 -- -- -- -- 46,968,988
---------- -------- ---------- -------- ----------- -----------
Net assets available for benefits, end of year $1,292,638 $ 65,007 $1,594,256 $810,238 $ 418,570 $59,923,877
========== ======== ========== ======== =========== ===========
</TABLE>
-12-
<PAGE> 17
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
7. AMOUNTS ALLOCABLE TO EACH SEPARATE INVESTMENT FUND, CONTINUED
The changes in net assets available for benefits of the various funds for
the year ended December 31, 1997 are as follows:
<TABLE>
<CAPTION>
LARGE/ THE DEXTER
MID CAP FIXED CORPORATION PARTICIPANT MONEY SMALL CAP
EQUITY INCOME STOCK LOAN MARKET EQUITY
FUND FUND FUND FUND FUND FUND
Additions to net assets attributed to
Contributions
<S> <C> <C> <C> <C> <C> <C>
Employer $ 748,721 $ 383,387 $ 148,083 $ 37,807 $ 71,237
Employee 2,285,378 1,011,986 70,642 90,415 243,116
Net appreciation of the Master Trust 6,135,785 705,075 579,994 192,953 11,811 238,589
Transfer from merged plans 306,254 91,549 7,675
----------- ----------- ----------- ---------- -------- ----------
9,476,138 2,191,997 806,394 192,953 140,033 552,942
Deductions from net assets attributed to
Benefits paid
Directly to participants or their beneficiaries 1,744,158 863,010 116,201 115,960 45,679 3,313
Administrative expenses 175,513 19,145 2,537 6,250 339 1,961
----------- ----------- ----------- ---------- -------- ----------
1,919,671 882,155 118,738 122,210 46,018 5,274
Net transfers from (to) affiliated plans and other (677,748) (586,456) (301,584) 638,681 (4,570) 818,701
----------- ----------- ----------- ---------- -------- ----------
Net addition 6,878,719 723,386 386,072 709,424 89,445 1,366,369
Net assets available for benefits, beginning of year 21,224,841 10,410,617 1,535,081 1,876,573 201,411 723,375
----------- ----------- ----------- ---------- -------- ----------
Net assets available for benefits, end of year $28,103,560 $11,134,003 $ 1,921,153 $2,585,997 $290,856 $2,089,744
=========== =========== =========== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY
FUND TOTAL
Additions to net assets attributed to
Contributions
<S> <C> <C>
Employer $ 51,218 $ 1,440,453
Employee 174,070 3,875,607
Net appreciation of the Master Trust 41,212 7,905,419
Transfer from merged plans 405,478
----------- -----------
266,500 13,626,957
Deductions from net assets attributed to
Benefits paid
Directly to participants or their beneficiaries 8,904 2,897,225
Administrative expenses 1,052 206,797
----------- -----------
9,956 3,104,022
Net transfers from (to) affiliated plans and other 112,962 (14)
----------- -----------
Net addition 369,506 10,522,921
Net assets available for benefits, beginning of year 474,169 36,446,067
----------- -----------
Net assets available for benefits, end of year $ 843,675 $46,968,988
=========== ===========
</TABLE>
-13-
<PAGE> 18
DEXTER CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
8. RECLASSIFICATIONS
Certain 1997 amounts have been reclassified to conform with the current
year presentation.
9. SUBSEQUENT EVENT
On February 26, 1999, Dexter Corporation divested its Packaging Coatings
Business. Participants with outstanding loans who were employees of this
business were allowed a one-time option to rollover their account balance
and outstanding loans to a plan administered by their new employer. All
other former participants were treated as terminated participants as of
March 1, 1999.
-14-
<PAGE> 19
DEXTER CORPORATION 401(k) SAVINGS PLAN
LINE 27E - SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Expenses Incurred Current
Identity of Relationship Description of Purchase Selling Lease in Connection Cost of Value of Net
Party Involved to Plan Transaction Price Price Rental with Transaction Asset Asset Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dexter Corporation Administrator Remittance of $22,406
Employee
Contributions
</TABLE>
-15-
<PAGE> 20
Exhibit Index
Exhibit 23 - Consent of PricewaterhouseCoopers LLP, Independent Public
Accountants
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Dexter Corporation on Form S - 8 (File No. 333 - 04081) of our report dated June
8, 1999, on our audits of the financial statements of Dexter Corporation 401(k)
Savings Plan as of December 31, 1998 and 1997 and for the years then ended,
which report is included in this Form 11 - K for the year ended December 31,
1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Springfield, Massachusetts
June 29, 1999
