<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
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER
CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
(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
The Employees' Savings and Profit Sharing Retirement Income Trust of Dexter
Corporation and Dexter Corporation, Nonwoven Materials - Plan Portion ('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
Designation Description Method of Filing
Exhibit 23 Consent of PricewaterhouseCoopers LLP, Filed with this report
Independent Public Accountants
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Dexter
Corporation, the plan administrator of The Employees' Savings and Profit Sharing
Retirement Income Trust of Dexter Corporation and Dexter Corporation, Nonwoven
Materials - Plan Portion, has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE EMPLOYEES' SAVINGS AND PROFIT
SHARING RETIREMENT INCOME TRUST OF
DEXTER CORPORATION AND DEXTER
CORPORATION, NONWOVEN MATERIALS -
PLAN PORTION
Date: June 29, 1999 /s/ Lawrence D. McClure
Lawrence D. McClure
Dexter Corporation
Plan Administrator
<PAGE> 3
THE EMPLOYEES' SAVINGS AND
PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER
CORPORATION AND DEXTER
CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE> 4
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION,
NONWOVEN MATERIALS -- PLAN PORTION
CONTENTS
DECEMBER 31, 1998
- ---------------------------------------------------------------
PAGE
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Accountants 1
Financial Statements
Statement of Net Assets Available for Benefits
As of 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 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 17
</TABLE>
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of
The Employees' Savings and Profit Sharing Retirement Income Trust
of Dexter Corporation and Dexter Corporation,
Nonwoven Materials - Plan Portion
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 The Employees' Savings and Profit Sharing Retirement Income Trust of Dexter
Corporation and Dexter Corporation, Nonwoven Materials - Plan Portion (the
"ESPRIT") 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
ESPRIT'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 assets held
for investment purposes as of 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. The 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
May 28, 1999
Springfield, Massachusetts
<PAGE> 6
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
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 $140,213,115 $117,974,928
Contributions receivable
Employer 2,952,548 3,109,244
Employee 7,274 91,743
Cash surrender value of life insurance 461,893 879,671
------------ ------------
Total assets 143,634,830 122,055,586
Accrued administrative costs -- 80,766
------------ ------------
Net assets available for benefits $143,634,830 $121,974,820
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 7
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
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 $ 2,952,548 $ 3,109,945
Employee 1,234,352 1,370,032
Net appreciation of the master trusts 24,808,657 19,333,452
Increase (Decrease) in cash surrender value of life insurance 28,266 (29,723)
------------- ------------
29,023,823 23,783,706
------------- ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid directly to participants or their beneficiaries 7,094,814 5,961,254
Administrative expenses 268,999 503,550
Other -- (14)
------------- ------------
7,363,813 6,464,790
------------- ------------
Net increase 21,660,010 17,318,916
Net assets available for benefits, beginning of year 121,974,820 104,655,904
------------- ------------
Net assets available for benefits, end of year $ 143,634,830 $ 121,974,820
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 8
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN AND NATURE OF OPERATIONS
The following is a general description of The Employees' Savings and Profit
Sharing Retirement Income Trust of Dexter Corporation and Dexter
Corporation, Nonwoven Materials - Plan Portion ("ESPRIT"). Participants
should refer to the Plan document for a more complete description of
ESPRIT's provisions.
GENERAL
ESPRIT is a defined contribution plan covering all eligible employees of
the Dexter Nonwoven Materials Business of Dexter Corporation (the
"Company") as well as all eligible employees of the Corporate Division. 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 plan was amended and restated as of October 1, 1998 to rename
the plan from the ESPRIT Plan, amend certain plan provisions, and provide
for changes and additions to the investment options.
PLAN ADMINISTRATOR
The Company is the administrator of the Plan. Among the responsibilities of
the Company as 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 ESPRIT on the first day of
the month following the date the employee completes one year of eligibility
service, provided the employee has reached age 21. However, effective July
1, 1997, with respect to pre-tax and voluntary after-tax employee
contributions, an eligible employee becomes a participant on the first day
of the month following the date of enrollment in ESPRIT.
CONTRIBUTIONS
The Company contribution to ESPRIT each plan year varies according to
profits (generally, 7-10% of ESPRIT eligible earnings). The contribution by
the Company is remitted annually to the trustee. Payment is usually made on
or before the due date of the Company's federal income tax return,
including extensions thereof.
Participants may make elective contributions to ESPRIT either on a pre-tax
or after-tax basis; however, total after-tax participant contributions are
limited to up to 15% of a participant's monthly compensation. Participant
contributions are also subject to certain requirements, including Sections
401(k), 401(m), 402(g) and 415(d) of the Code.
-4-
<PAGE> 9
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
PARTICIPANT ACCOUNTS
Each participant's share of the allocation of the Company's contribution
and forfeitures of nonvested interests of former participants is allocated
to his or her account based upon length of service and the individual's
compensation paid during the plan year. However, participants who do not
have at least 1,000 hours of service during such plan year or who are not
employed by the Company on the last day of the plan year are generally
ineligible to share in the allocation.
At any time, a participant may direct ESPRIT's trustee to invest the value
of his or her account and future contributions in a Spartan U.S. Equity
Index Fund, Managed Income Portfolio (MIP) II Fund, Dexter Corporation
Stock Fund, Small Cap Selector Fund, Diversified International Fund,
Puritan Fund, Equity-Income Fund, Blue Chip Growth Fund, Aggressive Growth
Fund, and PIMCO Total Return Fund.
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).
VESTING
The Company's portion of a participant's account shall become fully vested
upon (a) attaining the age of 65 (62 for employees who became participants
on or before January 1, 1991), (b) death, (c) termination of employment due
to permanent disability, (d) completion of five years of vesting service,
or (e) discontinuance of contributions by the Company or partial or
complete termination of the Plan. Employee elective pre-tax and after-tax
contributions are immediately fully vested.
If a participant separates from the Company before becoming fully vested,
nonvested matching contributions will be forfeited. These forfeitures will
be applied toward Company contributions.
PAYMENT OF BENEFITS
Each participant is eligible to receive payment of his or her account on
the first day of the month following his or her 65th birthday provided the
participant ceases to be employed by the Company or any affiliated company.
There are also provisions for distributions upon a participant's early
retirement, late retirement, termination of employment, death benefits, or
disability.
Each participant may elect distribution of his or her account in (a) a cash
lump sum, (b) a series of substantially equal payments over the
participant's life expectancy or joint life expectancy of the participant
and his or her beneficiary, (c) periodic or nonperiodic payments as elected
by the participant, or (d) any form that is grandfathered for certain
participants. Once a participant attains age 70-1/2, however, the
participant must take substantially equal installments over a period not to
exceed the participant's life expectancy.
-5-
<PAGE> 10
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Any portion of a participant's account which is invested in Dexter
Corporation common stock may be received, when eligible, in whole shares of
stock (with any fractional shares in cash), in cash, or in some combination
of shares of stock and cash as elected by the participant.
WITHDRAWALS AND LOANS
A participant may withdraw all or any portion of his or her account balance
resulting only from his or her contributions (exclusive of earnings on
pre-tax contributions) plus up to fifty percent of his or her company
contribution once fully vested. Withdrawals are subject to 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.
Participants may also obtain loans from ESPRIT. A participant may have no
more than two loans outstanding at any time. The total of all loans
outstanding generally 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 a 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.
-6-
<PAGE> 11
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
INVESTMENT VALUATION
With the exception of the cash surrender value of life insurance policies,
all assets are valued as of the last business day of the year according to
the following methods:
A. INVESTMENT IN MASTER TRUST
Fleet National Bank held certain combined assets of the ESPRIT 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 assets and related income of the master trusts are
included in these financial statements.
Approximately sixty percent and forty-six percent of the assets of the
Fidelity Master Trust and Fleet Master Trust, respectively, were owned
by ESPRIT at December 31, 1998 and 1997, respectively. In addition to
Fleet and Fidelity, other managers act as investment advisors for
certain of the combined assets of the master trusts.
The investment in master trusts 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 were
utilized to allocate investment income and the assets to individual
participant's accounts.
At December 31, 1998 and 1997, investments contained in 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.
-7-
<PAGE> 12
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
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.
B. CASH SURRENDER VALUE OF LIFE INSURANCE
The cash surrender value of life insurance policies is determined as of
August 1, 1998 and 1997, the anniversary date of the policies.
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.
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated June 28, 1994 that ESPRIT and the related trust, as amended
through January 22, 1991, is designed in accordance with applicable
sections of the Internal Revenue Code. ESPRIT has been amended since
receiving the determination letter. The Plan Administrator and ESPRIT's tax
counsel believe that ESPRIT is designed and is currently being operated in
compliance with the applicable requirements of the Internal Revenue Code.
-8-
<PAGE> 13
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
4. PLAN TERMINATION
The Company reserves the right by resolution of its Board of Directors to
amend or modify ESPRIT at any time and for any reason, and also reserves
the right by resolution to terminate ESPRIT at any time for any reason but
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 ESPRIT; nor
shall such action, except to the extent required to permit ESPRIT 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.
In the event of full or partial termination of ESPRIT 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.
-9-
<PAGE> 14
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
5. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
VALUATION
The MIP II fund of the Fidelity Master Trust, in which ESPRIT 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>
-10-
<PAGE> 15
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT
INCOME TRUST OF DEXTER CORPORATION AND DEXTER CORPORATION, NONWOVEN
MATERIALS -- PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
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.
-11-
<PAGE> 16
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
6. MASTER TRUST
Investments and net appreciation for the master trusts for the Dexter
Corporation Master Trusts and the ESPRIT's allocable portion at December
31, 1998 and 1997, and for the years then ended, are as follows:
<TABLE>
<CAPTION>
INVESTMENT IN MASTER TRUSTS
---------------------------------------------------------------------
DECEMBER 31, 1998
---------------------------------------------------------------------
PLAN'S SHARE OF
FIDELITY MASTER TRUST FIDELITY MASTER TRUST
------------------------------- -------------------------------
FAIR VALUE COST FAIR VALUE COST
<S> <C> <C> <C> <C>
Spartan U.S. Equity Index fund/
Large/Mid Cap Equity fund $144,559,480 $136,435,450 $ 85,962,212 $ 81,185,744
MIP II/Fixed Income fund/Money
Market/Permag Bond fund 62,349,051 62,349,051 40,012,072 40,012,072
Dexter Corporation Stock fund 2,224,784 1,907,087 613,024 560,156
Participant Loan fund 4,374,338 4,374,338 584,033 584,033
Pension Bond fund
Pension Fixed fund
Small Cap Selector/
Small Cap Equity fund 5,525,948 5,353,926 2,630,912 2,553,471
Diversified International fund/
International Equity fund 2,426,685 2,519,856 1,056,476 1,101,286
Puritan fund 1,539,278 1,451,542 1,214,747 1,145,452
Equity - Income fund 886,202 844,886 821,158 783,190
Blue Chip Growth fund 5,502,563 4,769,996 3,896,530 3,403,111
Aggressive Growth fund 2,179,539 1,908,378 1,363,275 1,200,677
PIMCO Total Return fund 2,479,245 2,548,929 2,058,676 2,113,903
------------ ------------ ------------ ------------
$234,047,113 $224,463,439 $140,213,115 $134,643,095
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT IN MASTER TRUSTS
---------------------------------------------------------------------
DECEMBER 31, 1997
---------------------------------------------------------------------
PLAN'S SHARE OF
FLEET MASTER TRUST FLEET MASTER TRUST
------------------------------- -------------------------------
FAIR VALUE COST FAIR VALUE COST
<S> <C> <C> <C> <C>
Spartan U.S. Equity Index fund/
Large/Mid Cap Equity fund $151,553,887 $109,123,219 $ 72,416,285 $ 52,141,837
MIP II/Fixed Income fund/Money
Market/Permag Bond fund 60,541,323 60,457,616 40,738,281 40,738,281
Dexter Corporation Stock fund 9,255,185 6,240,802 126,032 111,685
Participant Loan fund 3,092,826 3,092,826 449,493 449,493
Pension Bond fund 21,952,225 21,678,206
Pension Fixed fund 9,554 9,554
Small Cap Selector/
Small Cap Equity fund 4,849,734 4,699,045 2,789,657 2,702,978
Diversified International fund/
International Equity fund 6,567,574 6,993,935 1,455,180 1,549,649
Puritan fund
Equity - Income fund
Blue Chip Growth fund
Aggressive Growth fund
PIMCO Total Return fund
------------ ------------ ------------ ------------
$257,822,308 $212,295,203 $117,974,928 $ 97,693,923
============ ============ ============ ============
</TABLE>
-12-
<PAGE> 17
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
6. MASTER TRUST, CONTINUED
<TABLE>
<CAPTION>
NET APPRECIATION OF THE MASTER TRUSTS FOR THE YEARS ENDED
DECEMBER 31, 1998
---------------------------------------------------------
FLEET FIDELITY PLAN'S SHARE
MASTER TRUST MASTER TRUST OF MASTER TRUSTS
<S> <C> <C> <C>
Spartan U.S. Equity Index fund/Large/Mid Cap Equity fund $ 30,494,147 $ 13,458,797 $ 20,891,339
MIP II/Fixed Income/Money Market fund/Permag Bond fund 2,439,406 1,794,340 2,789,020
Dexter Corporation Stock fund (2,565,897) 203,524 (46,792)
Participant Loan fund 160,191 156,919 38,590
Pension Bond fund 2,142,956
Pension Fixed fund 538
Small Cap Selector/Small Cap Equity fund 267,638 (25,919) 91,887
Diversified International fund/International Equity Fund 947,107 (92,647) 84,886
Puritan fund 155,327 130,346
Equity - Income fund 68,932 63,529
Blue Chip Growth fund 770,395 516,566
Aggressive Growth fund 387,852 236,660
PIMCO Total Return fund 15,179 12,626
------------ ------------ ------------
$ 33,886,086 $ 16,892,699 $ 24,808,657
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NET APPRECIATION OF THE MASTER TRUSTS FOR THE YEARS ENDED
December 31, 1997
---------------------------------------------------------
FLEET PLAN'S SHARE OF
MASTER TRUST FLEET MASTER TRUST
<S> <C> <C>
Spartan U.S. Equity Index fund/Large/Mid Cap Equity fund $ 34,850,215 $ 16,098,835
MIP II/Fixed Income/Money Market fund/Permag Bond fund 4,244,875 2,789,547
Dexter Corporation Stock fund 2,580,658 9,734
Participant Loan fund 222,688 29,732
Pension Bond fund 2,025,292
Pension Fixed fund 529
Small Cap Selector/Small Cap Equity fund 595,134 356,545
Diversified International fund/International Equity Fund (122,117) 49,149
Puritan fund
Equity - Income fund
Blue Chip Growth fund
Aggressive Growth fund
PIMCO Total Return fund
------------ ------------
$ 44,397,274 $ 19,333,542
============ ============
</TABLE>
At December 31, 1998, 768 employees (781 in 1997) were participating in the
Plan. Appropriate participation by fund was as follows:
<TABLE>
<CAPTION>
FUND NUMBER OF PARTICIPANTS
---------------------------------------------------
DECEMBER 31, 1998 DECEMBER 31, 1997
<S> <C> <C>
Spartan U.S. Equity Index fund/Large/Mid Cap Equity fund 673 623
MIP II/Fixed Income fund/Money Market fund 591 586
Dexter Corporation Stock fund 46 15
Participant Loan fund 76 67
Small Cap Selector/Small Cap Equity fund 151 98
Diversified International fund/International Equity fund 101 72
Puritan fund 40
Equity - Income fund 36
Blue Chip Growth fund 117
Aggressive Growth fund 76
PIMCO Total Return fund 37
</TABLE>
-13-
<PAGE> 18
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
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 LIFE PURITAN PARTICIPANT
INDEX FUND MIP II INSURANCE FUND LOAN FUND
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 1,685,488 $ 860,057 $ 30,098
Employee 811,627 243,046 3,414
Net appreciation of the Master Trusts 20,891,339 2,789,020 130,346 $ 38,590
Increase in cash surrender value $ 28,266
------------ ------------ ------------ ------------ ------------
23,388,454 3,892,123 28,266 163,858 38,590
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 3,285,266 3,502,661 103,756 454 44,752
Administrative expenses 252,482 14,013 850
------------ ------------ ------------ ------------ ------------
3,537,748 3,516,674 103,756 454 45,602
Net transfers/(other) (4,819,284) (3,108,360) (342,288) 1,082,557 154,158
------------ ------------ ------------ ------------ ------------
Net addition (deduction) 15,031,422 (2,732,911) (417,778) 1,245,961 147,146
Net assets available for benefits,
beginning of year 71,484,158 44,715,856 879,671 -- 515,539
------------ ------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 86,515,580 $ 41,982,945 $ 461,893 $ 1,245,961 $ 662,685
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
DEXTER SMALL CAP DIVERSIFIED BLUE CHIP
CORPORATION SELECTOR INTERNATIONAL EQUITY- GROWTH
STOCK FUND FUND FUND INCOME FUND FUND
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 8,236 $ 89,793 $ 38,181 $ 15,326 $ 128,168
Employee 22,698 91,680 39,824 1,592 11,810
Net appreciation of the Master Trusts (46,792) 91,887 84,886 63,529 516,566
Increase in cash surrender value
------------ ------------ ------------ ------------ ------------
(15,858) 273,360 162,891 80,447 656,544
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 1,196 61,603 89,534 688
Administrative expenses 42 1,043 559
------------ ------------ ------------ ------------ ------------
1,238 62,646 90,093 688
Net transfers/(other) 511,320 (258,778) (513,891) 756,042 3,369,108
------------ ------------ ------------ ------------ ------------
Net addition (deduction) 494,224 (48,064) (441,093) 836,489 4,024,964
Net assets available for benefits,
beginning of year 127,026 2,794,621 1,457,949 -- --
------------ ------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 621,250 $ 2,746,557 $ 1,016,856 $ 836,489 $ 4,024,964
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE PIMCO
GROWTH TOTAL
FUND RETURN FUND TOTAL
<S> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 63,292 $ 33,909 $ 2,952,548
Employee 5,905 2,756 1,234,352
Net appreciation of the Master Trusts 236,660 12,626 24,808,657
Increase in cash surrender value 28,266
------------ ------------ ------------
305,857 49,291 29,023,823
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 4,904 7,094,814
Administrative expenses 10 268,999
------------ ------------ ------------
10 4,904 7,363,813
Net transfers/(other) 1,121,215 2,048,201 --
------------ ------------ ------------
Net addition (deduction) 1,427,062 2,092,588 21,660,010
Net assets available for benefits,
beginning of year -- -- 121,974,820
------------ ------------ ------------
Net assets available for benefits,
end of year $ 1,427,062 $ 2,092,588 $143,634,830
============ ============ ============
</TABLE>
-14-
<PAGE> 19
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
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/MID CAP MONEY
EQUITY FIXED INCOME LIFE MARKET
FUND FUND INSURANCE FUND
<S> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 3,109,244 $ 701
Employee $ 894,747 300,998 18,338
Net appreciation of the Master Trust 16,098,835 2,745,287 44,170
Increase (decrease) in cash surrender value $ (29,723)
------------ ------------ ------------ ------------
16,993,582 6,155,529 (29,723) 63,209
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 1,395,760 4,367,417 77,177
Administrative expenses 444,804 51,894 1,456
------------ ------------ ------------ ------------
1,840,564 4,419,311 78,633
Net transfers (2,236,483) (468,829) 706,338
------------ ------------ ------------ ------------
Net addition (deduction) 12,916,535 1,267,389 (29,723) 690,914
Net assets available for benefits,
beginning of year 58,567,623 42,290,991 909,394 466,562
------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 71,484,158 $ 43,558,380 $ 879,671 $ 1,157,476
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
THE DEXTER
PARTICIPANT CORPORATION SMALL CAP INTERNATIONAL
LOAN FUND STOCK FUND EQUITY FUND EQUITY FUND TOTAL
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Contributions
Employer $ 3,109,945
Employee $ 10,965 $ 97,416 $ 47,568 1,370,032
Net appreciation of the Master Trust $ 29,732 9,734 356,545 49,149 19,333,452
Increase (decrease) in cash surrender value (29,723)
------------ ------------ ------------ ------------ ------------
29,732 20,699 453,961 96,717 23,783,706
Deductions from net assets attributed to
Benefits paid directly to participants
or their beneficiaries 2,442 41,276 77,182 5,961,254
Administrative expenses 2,000 64 2,173 1,159 503,550
------------ ------------ ------------ ------------ ------------
4,442 64 43,449 78,341 6,464,804
Net transfers 130,574 63,805 1,456,312 348,297 14
------------ ------------ ------------ ------------ ------------
Net addition (deduction) 155,864 84,440 1,866,824 366,673 17,318,916
Net assets available for benefits,
beginning of year 359,675 42,586 927,797 1,091,276 104,655,904
------------ ------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 515,539 $ 127,026 $ 2,794,621 $ 1,457,949 $121,974,820
============ ============ ============ ============ ============
</TABLE>
-15-
<PAGE> 20
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
8. RECLASSIFICATIONS
Certain 1997 amounts have been reclassified to conform with the current
year presentation.
-16-
<PAGE> 21
THE EMPLOYEES' SAVINGS AND PROFIT SHARING RETIREMENT INCOME TRUST OF DEXTER
CORPORATION AND DEXTER CORPORATION, NONWOVEN MATERIALS - PLAN PORTION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER DESCRIPTION OF INVESTMENT INCLUDING MATURING DATE
LESSOR, OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE COST CURRENT VALUE
<S> <C> <C> <C>
Massachusetts Mutual Life Insurance N/A $ 461,893
*Dexter Corporation Plan's Share of Master Trust $ 134,643,095 $ 140,213,115
</TABLE>
*Party in interest
-17-
<PAGE> 22
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 May
28, 1999, on our audits of the financial statements of The Employees' Savings
and Profit Sharing Retirement Income Trust of Dexter Corporation and Dexter
Corporation, Nonwoven Materials - Plan Portion 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
