Securities and Exchange Commission
Washington, D.C. 20549
FORM 11-K
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
-----------------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
----------- ------------
Commission file no. 1-4651
-------
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Echlin Incentive and Savings Investment Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Echlin Inc.
100 Double Beach Road
Branford, Connecticut 06405
1
<PAGE>
<TABLE>
Echlin Incentive and Savings Investment Plan
Index
December 31, 1994
<CAPTION>
Page
----
<S> <S>
I REQUIRED INFORMATION:
Report of Independent Accountants . . . . . . . . . . . . . . 4
Statements of Financial Condition . . . . . . . . . . . . . 5-6
Statements of Income and Changes in Participants' Equity . .7-8
Notes to Financial Statements. . . . . . . . . . . . . . . 9-12
Schedule A - Schedule of Reportable Transactions . . . . . .13
II SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . .14
III EXHIBIT A - Consent of Independent Accountants . . . . . . . 15
</TABLE>
2
<PAGE>
Echlin Incentive and Savings Investment Plan
Financial Statements
December 31, 1994
3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and Administrator of the
Echlin Incentive and Savings Investment Plan
In our opinion, the accompanying statements of financial
condition and the related statements of income and changes in
participants' equity present fairly, in all material respects,
the net assets of Echlin Incentive and Savings Investment Plan at
December 31, 1994 and 1993, and the changes in net assets for the
years then ended, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the plan's administrator; 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 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 the plan's administrator, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
additional information included in Schedule A is presented for
purposes of additional analysis and is not a required part of the
basic financial statements but is additional information required
by ERISA. The Fund Information in the statements of financial
condition and the statements of income and changes in
participants' equity is presented for purposes of additional
analysis rather than to present the net assets and changes in net
assets of each fund. Schedule A and the Fund Information have
been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Stamford, Connecticut
May 1, 1995
4
<PAGE>
<TABLE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
December 31, 1994
<CAPTION>
Growth- Maximum Money Fixed Echlin
Oriented Growth Market Income Stock Employee
Stock Fund Stock Fund Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair
value:
Mutual funds $7,428,250 $15,856,074 $2,634,912 $ - $ - $ - $25,919,236
Fixed income fund - - - 34,383,104 - - 34,383,104
Echlin Inc. common
stock - - - - 23,732,183 - 23,732,183
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total investments 7,428,250 15,856,074 2,634,912 34,383,104 23,732,183 - 84,034,523
---------- ---------- ---------- ----------- ----------- ---------- -----------
Receivables:
Employee contributions 175,541 310,779 47,423 401,262 198,983 - 1,133,988
Employer incentive
match contribution - - - - 185,297 - 185,297
Employee loans - - - - - 4,363,188 4,363,188
Echlin Inc.-employee
loan repayments - - - - - 201,610 201,610
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total receivables 175,541 310,779 47,423 401,262 384,280 4,564,798 5,884,083
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total assets 7,603,791 16,166,853 2,682,335 34,784,366 24,116,463 4,564,798 89,918,606
---------- ---------- ---------- ----------- ----------- ----------- -----------
LIABILITIES
Employee withdrawals
payable 3,292 4,202 18,187 189,189 44,850 - 259,720
---------- ---------- ---------- ----------- ----------- ---------- -----------
Total liabilities 3,292 4,202 18,187 189,189 44,850 - 259,720
---------- ---------- ---------- ----------- ----------- ---------- -----------
Net assets representing
participants' equity $7,600,499 $16,162,651 $2,664,148 $34,595,177 $24,071,613 $4,564,798 $89,658,886
========== ========== ========== =========== =========== ========== ===========
See notes to financial statements.
</TABLE>
5
<PAGE>
<TABLE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
December 31, 1993
<CAPTION>
Growth- Maximum Money Fixed Echlin
Oriented Growth Market Income Stock Employee
Stock Fund Stock Fund Fund Fund Fund Loans Total
---------- ----------- ---------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair
value:
Mutual funds $5,963,246 $12,839,874 $2,674,299 $ - $ - $ - $21,477,419
Fixed income fund - - - 32,042,625 - - 32,042,625
Echlin Inc. common
stock - - - - 23,454,369 - 23,454,369
---------- ----------- ---------- ----------- ----------- ---------- -----------
Total investments 5,963,246 12,839,874 2,674,299 32,042,625 23,454,369 - 76,974,413
---------- ----------- ---------- ----------- ----------- ---------- -----------
Receivables:
Employee contributions 106,725 191,921 27,464 328,735 114,202 - 769,047
Employer incentive
match contribution - - - - 226,669 - 226,669
Employee loans - - - - - 3,355,683 3,355,683
Echlin Inc.-employee
loan repayments - - - - - 155,303 155,303
---------- ----------- ---------- ----------- ---------- ---------- ----------
Total receivables 106,725 191,921 27,464 328,735 340,871 3,510,986 4,506,702
---------- ----------- ---------- ----------- ---------- ---------- ----------
Total assets 6,069,971 13,031,795 2,701,763 32,371,360 23,795,240 3,510,986 81,481,115
---------- ----------- ---------- ----------- ---------- ---------- ----------
LIABILITIES
Employee withdrawals
payable 128,526 102,101 24,760 713,523 428,200 - 1,397,110
---------- ----------- ---------- ----------- ---------- ---------- ----------
Total liabilities 128,526 102,101 24,760 713,523 428,200 - 1,397,110
---------- ----------- ---------- ----------- ---------- ---------- ----------
Net assets representing
participants' equity $5,941,445 $12,929,694 $2,677,003 $31,657,837 $23,367,040 $3,510,986 $80,084,005
========== =========== ========== =========== =========== ========== ===========
See notes to financial statements.
</TABLE>
6
<PAGE>
<TABLE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
For the Year Ended December 31, 1994
<CAPTION>
Growth- Maximum Money Fixed Echlin
Oriented Growth Market Income Stock Employee
Stock Fund Stock Fund Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net unrealized
depreciation in fair
value of investments $ (896,641) $(762,784) $ - $ - $(2,967,666) $ - $(4,627,091)
Net realized gains
(losses) on sales of
investments (22,610) 193,660 - - 633,043 - 804,093
Interest and dividends 680,320 669,525 93,824 2,344,626 532,711 - 4,321,006
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total investment
(loss) income (238,931) 100,401 93,824 2,344,626 (1,801,912) - 498,008
Employee contributions 1,501,524 2,654,893 486,587 4,158,805 1,869,647 - 10,671,456
Employer incentive
match contribution - - - - 1,760,297 - 1,760,297
Interest on employee
loans - - - - - 316,161 316,161
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total additions 1,262,593 2,755,294 580,411 6,503,431 1,828,032 316,161 13,245,922
---------- ---------- ---------- ----------- ---------- ---------- -----------
Employee withdrawals (178,753) (389,708) (105,780) (2,007,792) (989,008) - (3,671,041)
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net transfers between
funds 575,214 867,371 (487,486) (1,558,299) (134,451) 737,651 -
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease)
in assets 1,659,054 3,232,957 (12,855) 2,937,340 704,573 1,053,812 9,574,881
Net assets at beginning
of year 5,941,445 12,929,694 2,677,003 31,657,837 23,367,040 3,510,986 80,084,005
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net assets at end of
year $7,600,499 $16,162,651 $2,664,148 $34,595,177 $24,071,613 $4,564,798 $89,658,886
========== ========== ========== =========== ========== ========== ===========
See notes to financial statements.
</TABLE>
7
<PAGE>
<TABLE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
For the Year Ended December 31, 1993
Growth- Maximum Money Fixed Echlin
Oriented Growth Market Income Stock Employee
Stock Fund Stock Fund Fund Fund Fund Loans Total
--------- ----------- ---------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net unrealized
(depreciation)
appreciation in fair
value of investments $ (17,989) $1,326,245 $ - $ - $6,630,815 $ - $7,939,071
Net realized gains on
sales of investments 8,836 152,437 - - 274,843 - 436,116
Interest and dividends 838,986 458,042 61,168 2,329,841 472,811 - 4,160,848
--------- ----------- ---------- ----------- ----------- ---------- -----------
Total investment
income 829,833 1,936,724 61,168 2,329,841 7,378,469 - 12,536,035
Employee contributions 1,037,399 1,792,068 398,007 4,165,556 952,327 - 8,345,357
Employer incentive
match contribution - - - - 776,669 - 776,669
Interest on employee
loans - - - - - 298,930 298,930
---------- ----------- ---------- ----------- ----------- ---------- -----------
Total additions 1,867,232 3,728,792 459,175 6,495,397 9,107,465 298,930 21,956,991
---------- ----------- ---------- ----------- ----------- ---------- -----------
Employee withdrawals (274,316) (348,475) (71,818) (2,242,782) (990,860) - (3,928,251)
---------- ----------- ---------- ----------- ----------- ---------- -----------
Net transfers between
funds 173,154 (76,146) (123,706) (114,216) (113,178) 254,092 -
---------- ----------- ---------- ----------- ----------- ---------- -----------
Net increase in assets 1,766,070 3,304,171 263,651 4,138,399 8,003,427 553,022 18,028,740
Net assets at beginning
of year 4,175,375 9,625,523 2,413,352 27,519,438 15,363,613 2,957,964 62,055,265
---------- ----------- ---------- ----------- ----------- ---------- -----------
Net assets at end of
year $5,941,445 $12,929,694 $2,677,003 $31,657,837 $23,367,040 $3,510,986 $80,084,005
========== =========== ========== =========== =========== ========== ===========
See notes to financial statements.
</TABLE>
8
<PAGE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Echlin Incentive and Savings
Investment Plan ("Plan") have been prepared on the accrual basis
of accounting.
Investments are stated at their fair market value. The fair
market value of the Growth-Oriented and the Maximum Growth mutual
funds were based on each fund's net asset value on the last
business day of the plan year. The fair market value of the
Money Market fund represents investments made plus interest
earned. The fair market value of the Fixed Income Fund
represents investments made in Guaranteed Insurance Contracts
("GIC's") plus interest earned at the stated contract rate. The
Echlin Stock Fund is valued at the closing price for Echlin Inc.
("Company") common stock on the last business day of the plan
year. Realized gains and losses on sales of investments are
determined using the average cost method.
NOTE B -- DESCRIPTION OF THE PLAN
The Plan was established on March 1, 1984 to enable employees to
defer a portion of their compensation on a pre-tax basis, thereby
deferring federal income tax in the year in which the deferrals
are made and providing savings to supplement retirement income to
the employee. Putnam Fiduciary Trust Company serves as "Trustee"
for the Plan and as custodian of the investments.
Each employee who is in a covered class of employees within a
participating division, has attained age 21 and has one year of
service is eligible to participate in the Plan. An employee may
elect to have 1 to 15 percent of his compensation, as defined in
the Plan document, up to the 1994 maximum elective deferral
amount of $9,240 as determined under Section 402(g) of the
Internal Revenue Code, contributed to their account.
Contributions for some participants may be further limited as a
result of other Internal Revenue Code requirements.
If at the end of its fiscal year the Company has consolidated net
income for the current year or accumulated consolidated net
income from prior years, the Company will match all or a portion
of each eligible participant's contributions for the plan year
that are based on the first 6 percent of the participant's
compensation ("basic contribution"). The Company's minimum
matching contribution will be based on its return on assets, as
defined in the Plan, and will range from 1 percent of an
employee's basic contribution (if the return on assets is 6.1
percent) to 100 percent of the basic contribution (if the return
on assets is 16 percent or more). Matching contributions made by
the Company will be invested solely in common stock of the
Company.
9
<PAGE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- DESCRIPTION OF THE PLAN (CONTINUED)
Participants' accounts are fully vested at all times to the extent
of employee contributions. An active participant upon retirement,
disability, as defined in the Plan, or death will be fully vested
in the value of the Company's incentive matching contributions
credited to his account regardless of his years of continuous
service. A participant with less than 5 years of continuous
service will be vested in the Company's incentive matching
contributions credited to his account on the last day of the third
plan year following the plan year for which the match was made.
Once a participant has 5 or more years of continuous service with
the Company, the entire balance of matching contributions credited
to the participant's account and each such contribution made to his
account thereafter is immediately 100 percent vested.
Loans to participants and loan repayments are presented as "Net
transfers between funds" in the Employee Loan Fund. Participants
may borrow from their account balance in the Plan with the loan
being repaid through payroll deductions. The interest rate, which
is fixed for the term of the loan, is based upon the average
interest rate for secured personal loans for the following three
banks: First National Bank of Chicago, Shawmut Bank, and Trust
Company of Georgia, rounded to the nearest half percent at the time
the loan is taken out. In addition, a participant may withdraw
vested funds from his or her account if it is demonstrated that a
hardship, as defined under the Internal Revenue Code, exists.
The Plan provides for the establishment of a trust which consists
of five investment funds. The five funds are: The Echlin Stock
Fund (invested in Echlin Inc. common stock), a Fixed Income Fund
(invested in GIC's as selected by the Benefits Committee), a
Maximum Growth Stock Fund (which is currently invested in the
Putnam Voyager Mutual Fund), a Growth-Oriented Stock Fund (which is
currently invested in the Putnam Investors Mutual Fund) and a Money
Market Fund (which is currently invested in the Putnam Money Market
Fund). An employee may choose to invest his or her contribution in
any or all of the foregoing funds noted in Note A. At any time
during the year an employee may amend future investment allocations
and quarterly may amend past investment allocations. As of
December 31, 1994 there were 8,511 participants in the Plan.
Information pertaining to the earnings objectives and performance
results for these funds can be requested from the Company's Human
Resource department. In addition, participants are provided with
quarterly statements summarizing activity in their accounts.
The Employee Benefits Committee ("Plan Administrator") is
responsible for the administration of the Plan. Liability of the
Company for acts or omissions of any member of the Committee will
be limited to amounts not covered by insurance and not payable by
the trust under applicable law.
10
<PAGE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- DESCRIPTION OF THE PLAN (CONTINUED)
The Company may, by action of its Board of Directors, amend or
terminate the Plan without shareholder approval at any time. The
Committee may also amend the Plan if necessary for tax qualification
or legal compliance, to carry out its duties under the Plan. In the
event of termination of the Plan, assets will be distributed in
accordance with the terms of the Plan. Fees and expenses incurred by
the Plan Administrator and the Trustee in connection with the
operation of the Plan will be paid from the Plan, if not paid by the
Company.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan, as amended
through January 1, 1994, qualifies under Section 401(a) of the
Internal Revenue Code of 1986 and therefore the related plan trust
is not subject to tax under present tax laws.
NOTE D -- ASSETS HELD FOR INVESTMENT
Assets held for investment at December 31, 1994 and 1993 consist of
the following:
<TABLE>
December 31, 1994
- -----------------
<CAPTION>
Shares Fair Market
or Units Value Cost
-------- ----------- -----------
<S> <C> <C> <C>
Mutual Funds:
Putnam Investors 1,040,371 $ 7,428,250 $ 8,434,460
Putnam Voyager 1,376,395 15,856,074 13,353,665
Putnam Money Market 2,634,912 2,634,912 2,634,912
----------- -----------
25,919,236 24,423,037
----------- -----------
Fixed Income Fund:
Provident National
Assurance Company 5,568,516 5,568,516 5,568,516
Allstate Life Insurance
Company 7,416,120 7,416,120 7,416,120
Massachusetts Mutual Life
Insurance Company 4,767,289 4,767,289 4,767,289
John Hancock Mutual Life
Insurance 8,769,191 8,769,191 8,769,191
Prudential Insurance Co.
of America 2,576,107 2,576,107 2,576,107
Principal Mutual Life
Insurance Company 5,285,881 5,285,881 5,285,881
----------- -----------
34,383,104 34,383,104
----------- -----------
Echlin Stock Fund:
Echlin Inc. Common Stock 791,073 23,732,183 14,909,672
----------- -----------
$84,034,523 $73,715,813
========== ===========
</TABLE>
11
<PAGE>
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE D -- ASSETS HELD FOR INVESTMENT (CONTINUED)
<TABLE>
December 31, 1993
- -----------------
<CAPTION>
Shares Fair Market
or Units Value Cost
-------- ----------- -----------
<S> <C> <C> <C>
Mutual Funds:
Putnam Investors 733,487 $ 5,963,246 $ 6,072,816
Putnam Voyager 1,220,520 12,839,874 9,574,681
Putnam Daily Dividend 2,674,299 2,674,299 2,674,299
----------- -----------
21,477,419 18,321,796
----------- -----------
Fixed Income Fund:
Provident National
Assurance Company 12,188,130 12,188,130 12,188,130
Allstate Life Insurance
Company 6,803,780 6,803,780 6,803,780
Massachusetts Mutual Life
Insurance Company 4,436,751 4,436,751 4,436,751
John Hancock Mutual Life
Insurance 8,269,841 8,269,841 8,269,841
Prudential Insurance Co.
of America 344,123 344,123 344,123
----------- -----------
32,042,625 32,042,625
----------- -----------
Echlin Stock Fund:
Echlin Inc. Common Stock 705,395 23,454,369 11,664,191
------------ -----------
$76,974,413 $62,028,612
============ ===========
</TABLE>
The following information relates to the Plan's Fixed Income Fund as
of December 31, 1994:
<TABLE>
<CAPTION>
Interest Rate Maturity Date
-------------- --------------
<S> <C> <C>
Provident National
Assurance Company 8.42% 1994
Allstate Life Insurance
Company 9.00% 1995 and 1996
Massachusetts Mutual
Life Insurance Company 7.45% 1996 and 1997
John Hancock Mutual Life
Insurance 6.62% 1995 and 1997
Prudential Insurance Co.
of America 5.79% 1995 and 1998
Principal Mutual Life
Insurance Company 5.75% 1998
</TABLE>
As of December 31, 1993 the Plan's Fixed Income Fund did not include
the Principal Mutual Life Insurance contract, but did include an
additional insurance contract with Provident National Assurance
Company with an interest rate of 9.35% which matured on December 31,
1993.
12
<PAGE>
Schedule A
----------
ECHLIN INCENTIVE AND SAVINGS INVESTMENT PLAN
<TABLE>
SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 1994
<CAPTION>
Average Sales Realized
Purchases Cost Proceeds Gain
----------- --------- ---------- -----------
<S> <C> <C> <C>
Putnam Voyager Fund $4,531,714 $782,670 $(976,330) $193,660
Provident National
Assurance Company $468,813 - $(7,086,978) -
Prudential Insurance
Co. of America $5,535,209 - $(3,386,437) -
Principal Mutual Life
Insurance Company $5,285,880 - - -
Echlin Common Stock $4,204,890 $1,029,371 $(1,662,414) $633,043
</TABLE>
13
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator of the Echlin Incentive and Savings Investment Plan has duly
caused this annual report to be signed by the undersigned thereunto duly
authorized.
Echlin Incentive and Savings
Investment Plan
Date: May 15,1995 /s/ Jon P. Leckerling
------------------------------
Jon P. Leckerling
Vice President, General Counsel
and Corporate Secretary
14
<PAGE>
Exhibit A
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 2-92426 and 33-15814) of Echlin Inc. of our report
dated May 1, 1995 appearing on page 4 of this Form 11-K.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Stamford, Connecticut
May 15, 1995
15
