<PAGE> 1
- --------------------------------------------------------------------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
COMMISSION FILE NUMBER 2-91694
INSTRON CORPORATION SAVINGS AND SECURITY PLAN
(Full title of the plan)
INSTRON CORPORATION
100 ROYALL STREET
CANTON, MASSACHUSETTS 02021
(Name and address of principal executive office of issuer of the securities
held pursuant to the plan)
- --------------------------------------------------------------------------------
<PAGE> 2
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
June 21, 1996 INSTRON CORPORATION
By: /s/ Linton A. Moulding
------------------------------------
Linton A. Moulding
Chief Financial Officer
2
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INSTRON CORPORATION
SAVINGS AND SECURITY PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1995
3
<PAGE> 4
Financial Statements and Exhibits
- ---------------------------------
Page No.
--------
a. Financial Statements
Report of Independent Accountants 5
Statements of Financial Condition as
of December 31, 1995 and 1994 6
Statements of Income and Changes in Plan
Equity for the years ended December 31, 1995,
December 31, 1994 and December 31, 1993 7
Notes to Financial Statements 8-23
b. Exhibits
Exhibit I - Consent of Independent Accountants 24
4
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and Administrator
of the Instron Corporation Savings and
Security Plan
We have audited the accompanying statements of financial condition of Instron
Corporation Savings and Security Plan as of December 31, 1995 and 1994, and the
related statements of income and changes in plan equity for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Instron Corporation Savings and
Security Plan as of December 31, 1995 and 1994, and the results of operations
and changes in plan equity for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 21, 1996
5
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INSTRON CORPORATION SAVINGS
---------------------------
AND SECURITY PLAN
-----------------
<TABLE>
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<CAPTION>
December 31,
---------------------------
1995 1994
---- ----
<S> <C> <C>
Assets
- ------
Cash $ 26,252 $ 63,489
Investment in Instron Corporation
Common Stock, at fair value
(cost $5,259,402 at December 31,
1995, and $4,686,423 at December 31,
1994) 6,417,563 5,414,741
Shares of Registered Investment Companies,
at fair value
(cost $14,860,373 at December 31,
1995 and $10,982,408 at December 31,
1994) 15,754,431 10,509,714
Common/Collective Investment Trust, at
contract value 5,074,088 4,414,957
Corporate Stocks, at fair value
(Cost $72,978 at December 31, 1995 and
$39,602 at December 31, 1994) 71,915 32,653
Loans receivable from Plan
participants 978,877 865,885
Contributions receivable:
Employee 61,577 61,615
Employer 41,257 36,521
Dividends receivable 19,265 13,063
Other receivable 45,430 668
----------- -----------
Total Plan Assets $28,490,655 $21,413,306
=========== ===========
Liabilities and Plan Equity
---------------------------
Accounts payable $ 38,080 $ 66,771
Plan equity 28,452,575 21,346,535
----------- -----------
Total Liabilities and Plan Equity $28,490,655 $21,413,306
=========== ===========
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE> 7
INSTRON CORPORATION SAVINGS
---------------------------
AND SECURITY PLAN
-----------------
<TABLE>
STATEMENTS OF INCOME
--------------------
AND CHANGES IN PLAN EQUITY
--------------------------
<CAPTION>
For the year For the year For the year
ended ended ended
December 31, 1995 December 31, 1994 December 31, 1993
----------------- ----------------- -----------------
<S> <C> <C> <C>
Investment income:
Interest $ 362,748 $ 318,891 $ 306,142
Dividends on Instron
Corporation Common Stock 68,718 49,307 43,458
Other dividends 1,390,210 829,769 715,521
----------- ----------- -----------
Net investment income 1,821,676 1,197,967 1,065,121
----------- ----------- -----------
Net appreciation (depreciation) in
the fair value of investments 1,974,077 (267,947) 847,918
----------- ----------- -----------
Net additions
from investment activity 3,795,753 930,020 1,913,039
----------- ----------- -----------
Contributions:
Participants 3,779,555 1,702,228 1,784,964
Employer 572,670 496,690 426,979
----------- ----------- -----------
4,352,225 2,198,918 2,211,943
----------- ----------- -----------
Total additions 8,147,978 3,128,938 4,124,982
----------- ----------- -----------
Less, benefit and termination
payments to participants:
Distributions paid to
participants 1,041,938 466,266 980,466
----------- ----------- -----------
7,106,040 2,662,672 3,144,516
----------- ----------- -----------
Assets acquired in merger
of LMS (see Note 1) 0 0 220,363
----------- ----------- -----------
Net increase in plan
equity 7,106,040 2,662,672 3,364,879
Plan equity at beginning
of year 21,346,535 18,683,863 15,318,984
----------- ----------- -----------
Plan equity at end of year $28,452,575 $21,346,535 $18,683,863
=========== =========== ===========
</TABLE>
See accompanying notes to the financial statements.
7
<PAGE> 8
INSTRON CORPORATION SAVINGS
---------------------------
AND SECURITY PLAN
-----------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
NOTE 1 - GENERAL DESCRIPTION OF THE PLAN
- ----------------------------------------
The following description of the Instron Corporation Savings and
Security Plan (the "Plan") is intended to give a general summary of its
principal provisions. Reference is made to the Plan document for a more complete
description of the Plan.
The Plan was originally effective July 1, 1984 and was last amended and
restated in its entirety December 27, 1994 effective generally January 1, 1989
and has been subsequently amended by the first and second amendments thereto.
The Plan consists of two parts, as follows:
1. The Instron Corporation Savings and Security Plan and Trust dated
September 19, 1984, as amended and restated as of January 1, 1989, as
further amended, and as may be further amended from time to time
"Division I or the "Instron Plan"); and
2. The Laboratory MicroSystems, Inc. Retirement and Savings Plan and Trust
established as of November 1, 1987, as amended, and as may be further
amended from time to time ("Division II" or the "LMS Plan").
Division I and Division II together constitute a single plan within the
meaning of Section 414(l) of the Code. All of the assets of Division I
of the Plan and of Division II of the Plan shall be available to pay
benefits to Members and Beneficiaries of the Plan, as required under
Section 414(l)g of the Code. The rules set forth in each Division shall
continue to apply separately to those employees eligible to participate
in such Division.
The Plan consists of a cash or deferred compensation plan under Section
401(k) of the Code of 1986, as amended and the Instron Plan is an employee stock
ownership plan. The purpose of the 401(k) plan is to enable participating
employees of the Company ("Participants") to save for retirement on a
tax-deferred and/or an after-tax basis, and the purpose of the Employee Stock
Ownership Plan is to invest primarily in employer securities.
8
<PAGE> 9
The Instron Plan is an individual account plan in which each
Participant's benefits are based solely on the amounts contributed to the Plan
by the Participant and by the Company on the Participant's behalf, as adjusted
by income and gains and losses which are allocated to each Participant. The Plan
is subject to the rules and regulations of the Employee Retirement Income
Security Act of 1974, as amended, including rules relating to the duties and
conduct of the Plan's fiduciaries.
The following is a description of the provisions of the Instron Plan -
Division I:
ELIGIBILITY. Employees of the Company are eligible to participate in
the Instron Plan as of their first pay period. Eligibility to receive matching
Company contributions commences on the first day of the pay period coincident
with the completion of one year of eligibility service. Employees of LMS and
non-resident aliens are not eligible to participate in the Instron Plan -
Division I.
ADMINISTRATION. The Plan is administered on behalf of the Company by
the Committee which is appointed by the Company. Vanguard Fiduciary Trust
Company, the Trustee under the Instron Plan, acts as trustee, recordkeeper and
custodian of the securities and investments held by the Instron Plan.
CONTRIBUTIONS. The Instron Plan permits four types of
contributions--employee pre-tax contributions, employee after-tax contributions,
employee rollover contributions and Company matching contributions. Each
eligible employee may voluntarily enter into a salary adjustment agreement with
the Company pursuant to which the employee agrees to a reduction in direct
remuneration (pre-tax contribution). Participants may also enter into a payroll
deduction agreement with the Company for after-tax contributions. The total of
these deductions (pre-tax and after-tax) may not exceed 17% of annual
compensation (the "Participant's Contributions").
The Company, in the discretion of the Board of Directors, may make
matching contributions, based on a Participant's contributions. Currently, the
matching contribution is equal to one-half of the Participant's Contributions
(pre-tax and aftertax) up to 6% of compensation, with a maximum matching
contribution of 3% of annual compensation (the "Company Contribution").
INVESTMENTS. Matching contributions made on a Participant's behalf by
the Company will be invested in shares of the common stock of the Company.
Participants who have attained age 55 and have 10 years of Plan membership may
transfer a portion of their matching contribution account out of the Instron
Common Stock Fund in accordance with Section 401(a)28 of the Code. A Participant
may direct that his pre-tax, after-tax and rollover contributions be invested in
10% increments in one or more of the following investment options designated by
the Committee. Funds A-F are sponsored by The Vanguard Group. The description of
each of the Vanguard funds is qualified in its entirety by the prospectus for
the fund which can be obtained from the Trustee.
THERE CAN BE NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE THEIR
STATED OBJECTIVES.
FUND A - VANGUARD INVESTMENT CONTRACT TRUST. The Vanguard Variable Rate
Investment Contract Trust provides for interest and safety of principal for a
three year period by investing in fixed rate investment contracts and variable
rate investment contracts issued by insurance companies or banks that are highly
rated by the major credit rating agencies and viewed by Vanguard as being
financially sound. The interest rate and principal of each contract are
obligations of the issuing insurance company or bank, NOT of the Trustee of the
Company. Certain restrictions, limitations and penalties apply to transfers or
withdrawals of a participant's account balances out of this Fund. These
restrictions are described in the materials provided by the Trustee.
9
<PAGE> 10
FUND B - VANGUARD MONEY MARKET RESERVES - PRIME PORTFOLIO. The Vanguard
Money Market Reserves - Prime Portfolio ("Prime Portfolio") is a money market
fund that seeks maximum current income, preservation of capital and liquidity by
investing in a portfolio of high-quality money market instruments that mature in
one year or less. These include negotiable certificates of deposit, bankers'
acceptances, commercial paper, and other short-term corporate obligations. The
Prime Portfolio seeks to maintain a net asset value of $1.00 per share. An
investment in the Prime Portfolio is neither insured nor guaranteed by the U.S.
Government, the Trustee or the Company, and there can be no assurance that the
Prime Portfolio will be able to maintain a stable net asset value of $1.00 per
share or that it will achieve any particular level of current income.
FUND C - VANGUARD FIXED INCOME SECURITIES FUND - INVESTMENT GRADE
CORPORATE PORTFOLIO. The Vanguard Fixed Income Securities Fund - Investment
Grade Corporate Portfolio ("Corporate Portfolio") is a fixed income fund whose
primary objective is to provide a high level of current income consistent with
maintenance of principal and liquidity by investing in a diversified portfolio
of long-term, investment grade bonds. The Corporate Portfolio emphasizes
high-quality corporate bonds. At least 70% of the Corporate Portfolio is
invested in a diversified portfolio of bonds that, at the time of purchase, were
selected from the four highest grades assigned by Moody's Investors Service or
Standard & Poor's Corporation. The Corporate Portfolio is designed for investors
who are seeking a high-quality, long-term corporate bond portfolio and who are
willing to accept the potential of significant share price volatility due to the
relatively long average maturity of Corporate Portfolio's investments.
FUND D - VANGUARD WINDSOR FUND. The Vanguard Windsor Fund is an equity
fund whose primary objective is to seek long-term growth of capital and income
by investing in a portfolio of common stocks. As a secondary objective, this
Fund also seeks to provide a reasonable level of current income. Although the
Fund invests primarily in common stocks, it may invest in money market
instruments, fixed income securities and other equity securities, such as
preferred stock. The Fund may also invest in stock futures contracts and
options.
FUND E - VANGUARD STAR PORTFOLIO. The Vanguard Star Portfolio is a
diversified equity and fixed income fund whose primary objective is to maximize
long-term total return of capital and income. The Star Portfolio invests 60%-70%
of its assets in seven Vanguard equity funds, including Vanguard/Windsor Fund,
Vanguard/Windsor II, Vanguard Index Trust-500 Portfolio, Vanguard/PRIMECAP
Fund, Vanguard Morgan Growth Fund, and Vanguard Explorer Fund. Approximately
30%-40% of Star Portfolio's assets are invested in three Vanguard fixed-income
portfolios including Long-Term Corporate Portfolio and GNMA Portfolio of
Vanguard Fixed Income Securities Fund, and Prime Portfolio of Vanguard Money
Market Reserves.
FUND F - VANGUARD U.S. GROWTH FUND. The Vanguard U.S. Growth Portfolio
seeks long-term capital appreciation by investing in a diversified portfolio of
common stocks with above-average growth potential. Dividend income is considered
incidental. The U.S. Growth Portfolio invests primarily in the common stocks of
companies whose prospects for growth are believed to be favorable. Such
companies tend to have exceptional records, strong market positions, good
financial strength, and low sensitivity to changing economic conditions.
Securities will be selected solely on the basis of their appreciation potential
as determined from an assessment of their fundamental value and consideration of
prevailing market conditions.
10
<PAGE> 11
INSTRON COMMON STOCK FUND. Contributions allocated to the Instron
Common Stock Fund are invested in common shares of Instron Corporation ("Instron
Common Stock") which is purchased by the Trustee on the open market or directly
from the Company, depending on market conditions. The value of the Instron
Common Stock Fund is subject to fluctuation in the market price of Instron
Common Stock and there is no guarantee of investment performance.
VESTING AND VOTING RIGHTS. Each Participant is, at all times, 100%
vested in all of the investments in his account, including both those arising
from Participant's Contributions and those arising from the Company's
Contributions. Each Participant has the right to direct the Trustee's vote as to
the number of Instron Corporation common shares standing to his credit in his
account on the record date for any Company stockholder meeting. The Committee
will direct the Trustee to vote proxies and take similar action with respect to
the Plan's securities ownership other than Instron Corporation common shares.
PARTICIPANT'S ACCOUNTING. Each participant's account is independently
maintained by the Trustee and reflects all Participant's contributions and
Company's contributions by both contribution and investment category. Accounts
are periodically adjusted to reflect the effect of investment income, realized
and unrealized investment gains and losses and withdrawals and other
distributions.
BENEFITS. Participants are entitled to receive their entire interest in
the Instron Plan in a lump sum whenever their employment with the Company
terminates for any reason. Benefits are paid in cash, unless a Participant
elects to receive an in-kind distribution of shares of Instron Common Stock
credited to his account. During the period of employment with the Company,
participants may (if they are over 59-1/2 years of age, or under certain
hardship conditions) be entitled to withdraw part or all of their interest
(exclusive of a portion of earnings) in investments arising from Participant's
contributions, but not their interests in investments arising from the Company's
matching contribution. If such withdrawals are non-hardship condition
withdrawals, matching Company Contributions will be suspended during the twelve
months following the withdrawal. All such withdrawals (except an amount equal to
a Participant's after-tax contribution) are subject to federal income tax. In
addition, a 10% excise tax is imposed on withdrawals made before the age of
59-1/2 years. Withdrawals of Company matching funds on the employee pre-tax and
after-tax contributions are allowed upon termination of employment or
retirement.
Benefit payments are generally distributed within 60 days after the Participant
becomes entitled to receive them, in a manner prescribed by the Committee.
Special rules apply in the case of a Participant's death.
PARTICIPANT LOANS. Active participants are permitted to borrow funds
from their pre-tax, after-tax and rollover accounts in the Plan subject to
certain limitations. Loans are not permitted from a Participant's Company
Contribution account. During the 1995 Plan year, the interest rate on these
loans is equal to Bank of Boston's prime rate plus 1%, at the time the loan is
granted. These loans generally must be repaid over a period of no longer than 5
years. Interest paid by a Participant is credited to the account(s) from which
the loan is made. Investment income includes interest income of $76,074, $59,823
and $60,114 from employee loans for the years ended December 31, 1995, 1994, and
1993, respectively.
11
<PAGE> 12
MERGED PROFIT SHARING ACCOUNTS. In September 1995, the Instron
Corporation Employees' Profit Sharing Plan was merged into the Plan. All
participants are 100% vested in their transferred profit sharing accounts. Upon
termination of employment, profit sharing accounts are distributed at the
election of the participant in a lump sum, by purchase of an annuity or by
installment payments over a period of up to 15 years. Participants may take
loans from their profit sharing accounts in accordance with the rules discussed
above.
OTHER. The Company's contributions may be made only to the extent the
Company has available allowable deductions under the Internal Revenue Code. The
contribution percentages of certain participants may be reduced under certain
circumstances and other steps may be taken, as outlined in the Instron Plan, in
order to maintain the Plan's tax exempt status. There are special rules to allow
"Rollover Contributions" of amounts received by employees from certain other
retirement plans, as defined in the Plan.
The following is a description of the provisions of the LMS Plan - Division II:
ELIGIBILITY. Employees of Laboratory MicroSystems, Inc. ("LMS") are
eligible to participate in the LMS Plan on the earlier of the first day of the
Plan Year or the fourth, seventh or tenth month of the Plan Year coinciding with
or next following the completion of six (6) months of service and attainment of
age 21.
ADMINISTRATION. The LMS Plan is administered by an LMS-appointed
Trustee. The First Albany Corporation acts as recordkeeper and custodian of the
securities and investments held by the LMS Plan.
CONTRIBUTIONS. The LMS Plan permits five types of contributions:
employee pre-tax contributions, employee after-tax contributions, employee
rollover contributions, Company matching contributions and discretionary
contributions. Each eligible employee may voluntarily enter into a salary
adjustment agreement pursuant to which the employee agrees to a reduction in
direct remuneration (pre-tax contribution). The total of these contributions may
not exceed the limitation prescribed by law. Participants may also enter into a
payroll deduction agreement with LMS for after-tax contributions (up to 6% of
compensation).
The matching contribution for the 1995 year was equal to 33-1/3% of a
Participant's salary reduction contributions (only salary reductions up to 6% of
a Participant's compensation are considered for this purpose). Participants must
also complete 1,000 hours of service to be eligible for a matching contribution.
LMS may also make a contribution, in its sole discretion, to be allocated on the
basis of total compensation. For 1995, LMS made contributions totalling $22,540.
INVESTMENTS. A participant may direct that his pre-tax, after-tax
contributions, rollover contributions, LMS matching contributions and
discretionary contributions made on a participant's behalf be invested in
various investment options. The majority of participant investments are in
mutual funds sponsored by The American Funds Groups and in individual corporate
stocks, which are principally included under the "Other" caption of Note 7.
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<PAGE> 13
VESTING. Each participant is 100% vested in all amounts credited to
their accounts. As of December 31, 1995 and 1994, there were no forfeited
non-vested accounts.
BENEFITS. Whenever employment with LMS terminates for any reason,
participants are entitled to receive their interest in the LMS Plan in a single
lump sum payment or in equal installments over a period of not more than the
participant's assumed life expectancy at the time of distribution.
During the period of employment with LMS, Participants may be entitled to
withdraw part or all of their interests in the LMS Plan (exclusive of a portion
of earnings if they are over 59-1/2 years of age or under certain hardship
conditions.) All such withdrawals (except an amount equal to a Participant's
after-tax contributions) are subject to federal income tax. In addition, a 10%
excise tax is imposed on withdrawals made before the age of 59 1/2 years.
PARTICIPANT LOANS. Active participants are permitted to borrow funds
from their accounts in the Plan subject to certain limitations. During the 1995
Plan year, the interest rate on these loans is equal to the prime rate plus 1%
as reported in the Wall Street Journal, at the time the loan is granted. These
loans generally must be repaid over a period of no longer than 5 years. Interest
paid by a Participant is credited to the account(s) from which the loan is made.
OTHER. The LMS contributions may be made only to the extent that the
Company has available allowable deductions under the Internal Revenue Code. The
contribution percentages of certain Participants may be reduced under certain
circumstances and other steps may be taken, as outlined in the Plan in order to
maintain the Plan's tax exempt status. There are special rules to allow
"rollover contributions" of amounts received by employees from certain other
retirement plans, as defined in the Plan.
PARTICIPANTS ACCOUNTING. Each participant's account is independently
maintained by the Trustee and reflects all participant's contributions and LMS's
contributions. Accounts are periodically adjusted to reflect the effect of
investment income, realized and unrealized investment gains and losses,
withdrawals and other distributions.
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<PAGE> 14
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
BASIS OF ACCOUNTING. The accompanying financial statements have been
prepared on the accrual basis of accounting.
INVESTMENT VALUATION. Investments in mutual fund shares are valued at
the net asset value announced by the fund as of the close of business on the
last business day of the year.
Investments in Instron Corporation's common stock are valued at the last
reported sales price on the last business day of the year. In the event that no
sale was reported on that date, such investments are valued at the mean of the
last reported bid and asked price or the price of the last sale reported,
whichever is more recent.
Investments in shares of Vanguard's Variable Rate Investment Contract Trust are
stated at cost, which approximates fair value. Participants' loans receivable
are valued at cost, which approximates fair value.
All investments of the Plan are valued at fair values as estimated in good
faith by the record keeper.
SECURITY TRANSACTIONS AND INVESTMENT INCOME. Sales of shares of the
collective investment trust are recorded on the Trustee's valuation dates (the
last day of each calendar month). All other security transactions are recorded
on the trade date. Realized gains or losses on security transactions are
recorded as the difference between proceeds received and cost as determined on
the average cost basis.
Transfers between investment options are treated as the purchase of one
investment option out of the proceeds of the sale of another.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis.
In accordance with the policy of stating investments at current value, net
unrealized appreciation or depreciation for the period is reflected in the
Statement of Income and Changes in Plan Equity.
BENEFITS PAYABLE. Benefits payable, included in Plan equity, is $0 at
December 31, 1995 and 1994. These amounts will be recorded as distributions
payable in the Plan's Form 5500, in accordance with the Department of Labor's
rules and regulations.
EXPENSES OF THE PLAN. All expenses incurred in the administration of
the Plan and the Trust are charged to and paid by the Company. To the extent not
paid by the Company, the expenses may be charged against the Trust assets.
NET APPRECIATION (DEPRECIATION). The Plan presents in the Statement of
Income and Changes in Plan Equity the net appreciation (depreciation) in the
fair value of its investments which consists of the realized gains or losses and
the unrealized appreciation (depreciation) on those investments.
USE OF ESTIMATES. These financial statements include estimates and
assumptions that affect reported amounts of assets, liabilities and Plan
equity.
14
<PAGE> 15
NOTE 3 - INVESTMENTS
- --------------------
<TABLE>
At December 31, 1995 and 1994 the number of participants in each investment
program, the number of units/shares, cost and the current value of investments
held were as follows:
<CAPTION>
December 31, 1995
---------------------------------------------------
Units/ Market/Fair
Participants Shares Cost Value
------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
Instron Common Stock 488 475,375 $ 5,259,402 $ 6,417,563*
Vanguard Windsor Fund 391 673,484 9,223,346 9,785,727*
Vanguard Fixed Income
Securities Fund,
Investment Grade
Bond Portfolio 178 197,591 1,700,111 1,872,973*
Vanguard Money Market
Trust, Prime Portfolio 181 2,453,458 2,453,458 2,453,458*
Vanguard Variable Rate
Investment Contract
Trust 281 5,074,088 5,074,088 5,074,088*
Vanguard Star Portfolio 73 41,173 583,429 618,417
Vanguard U.S. Growth Fund 76 29,088 508,748 591,950
Loan Fund 148 0 978,877 978,877
Other 46 0 464,259 503,821
----------- -----------
Total $26,245,718 $28,296,874
=========== ===========
<FN>
*Exceed 5% of Plan Assets
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
DECEMBER 31, 1994
-----------------
Units/ Market/Fair
Participants Shares Cost Value
------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
Instron Common Stock 474 434,635 $ 4,686,423 $ 5,414,741*
Vanguard Windsor Fund 365 542,273 7,181,536 6,799,496*
Vanguard Fixed Income
Securities Fund,
Investment Grade
Bond Portfolio 178 170,606 1,454,653 1,368,447*
Vanguard Money Market
Trust, Prime Portfolio 178 1,586,328 1,586,328 1,586,328*
Vanguard Variable Rate
Investment Contract
Trust 282 3,212,726 3,212,726 3,212,726*
Vanguard Star Portfolio 40 19,520 255,889 243,115
Vanguard U.S. Growth Fund 33 14,965 223,518 226,332
Vanguard Fixed Rate
Investment Contract
Trust III-92, 5.85% 235 1,202,231 1,202,231 1,202,231*
Loan Fund 137 0 865,885 865,885
Other 40 0 320,086 318,649
----------- -----------
Total $20,989,275 $21,237,950
=========== ===========
<FN>
*Exceed 5% of Plan Assets.
</TABLE>
NOTE 4 - PLAN TERMINATION
- -------------------------
The Company believes the Plan will continue without interruption, but reserves
the right to terminate or amend the Plan or discontinue contributions thereto.
In the event that both the Plan and the related trust funds terminate, all
participants' accounts continue to be fully vested and nonforfeitable. All
accounts will be valued as of the termination date and all account balances will
be distributed in full to participants, in the form of cash and/or Company
common stock.
16
<PAGE> 17
NOTE 5 - FEDERAL INCOME TAXES
- -----------------------------
The Plan and its related trust are intended to satisfy the provisions of
Sections 401 and 501 of the Code as amended from time to time and under any
corresponding provisions of the Code which may be enacted. The Instron Plan is
also designed to qualify as an "employee stock ownership plan" under Section
4975(e) of the Code. Accordingly, the Plan is intended to be exempt from Federal
Income taxes.
The Plan last received a favorable determination letter dated November 6, 1995,
from the IRS in connection with the Plan as amended and restated December 27,
1994, effective generally as of January 1, 1989 and as amended by the second
amendment effective November 1, 1989. Management believes the Plan is operating
in compliance with the requirements of the IRS to maintain its tax exempt
status. Management is committed to amend the Plan as necessary to maintain its
tax exempt status.
Annual Participant's contributions up to $9,240 in 1995, adjusted annually for
cost of living, the Company's contributions, and earnings on all contributions
may be tax deferred. In addition, when any shares of Common Stock of the Company
are distributed as part of a lump distribution to an employee, a portion of the
tax thereon (on net unrealized appreciation) may be postponed until the time of
disposition of such shares. Tax on Plan distributions may be deferred to the
extent a distribution is rolled over into another qualified plan or an IRA in
accordance with IRS rules.
17
<PAGE> 18
<TABLE>
NOTE 6 - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS
-------------------------------------------------------------------------
<CAPTION>
December 31, 1995
------------------------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Common/
Common Vanguard Income Money Vanguard U.S. Collective
Stock Windsor Securities Market Star Growth Investment Loan
Fund Fund Fund Trust Portfolio Fund Trust Fund Other Total
-------- --------- ---------- -------- --------- -------- ---------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
- ------
Cash $ 26,252 $ 26,252
Investments at
current value 6,417,563 9,785,727 1,872,973 2,453,458 618,417 591,950 5,074,088 978,877 503,821 28,296,874
Contributions
receivable:
Employee 2,613 27,695 4,942 4,773 2,830 3,113 15,611 61,577
Employer 18,717 22,540 41,257
Dividends
receivable 19,265 19,265
Other receivable 28,627 7,800 1,109 1,782 1,258 306 4,548 45,430
---------- ---------- --------- ---------- -------- ---------- ---------- -------- -------- -----------
Total Plan
Assets $6,513,037 $9,821,222 $1,879,024 $2,460,013 $622,505 $ 595,369 $5,094,247 $978,877 $526,361 $28,490,655
========== ========== ========== ========== ======== ========== ========== ======== ======== ===========
Liabilities and
Plan Equity:
- ---------------
Accounts payable $ 38,080 $ 38,080
Plan Equity 6,474,957 9,821,222 1,879,024 2,460,013 622,505 595,369 5,094,247 978,877 526,361 28,452,575
---------- ---------- ---------- ---------- -------- ---------- ---------- -------- -------- -----------
Total Liabilities
and Plan
Equity $6,513,037 $9,821,222 $1,879,024 $2,460,013 $622,505 $ 595,369 $5,094,247 $978,877 $526,361 $28,490,655
========== ========== ========== ========== ======== ========== ========== ======== ======== ===========
18
</TABLE>
<PAGE> 19
<TABLE>
NOTE 6 - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS
-------------------------------------------------------------------------
<CAPTION>
December 31, 1994
------------------------------------------------------------------------------------------------------------------
Common/
Vanguard Collective
Instron Fixed Vanguard Vanguard Investment
Common Vanguard Income Money Vanguard U.S. Trust 1994,
Stock Windsor Securities Market Star Growth 1993 and Loan
Fund Fund Fund Trust Portfolio Fund III-92 Fund Other Total
-------- --------- ---------- -------- --------- -------- ---------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
- ------
Cash $ 63,489 $ 63,489
Investments at
current value 5,414,741 6,799,496 1,368,447 1,586,328 243,115 226,332 4,414,957 865,885 318,649 21,237,950
Contributions
receivable:
Employee 2,588 27,727 4,929 4,806 2,834 3,081 15,650 61,615
Employer 15,609 20,912 36,521
Dividends
receivable 13,063 13,063
Other receivable 668 668
---------- ---------- --------- ---------- -------- ---------- ---------- -------- -------- -----------
Total Plan
Assets $5,510,158 $6,827,223 $1,373,376 $1,591,134 $245,949 $ 229,413 $4,430,607 $865,885 $339,561 $21,413,306
========== ========== ========== ========== ======== ========== ========== ======== ======== ===========
Liabilities and
Plan Equity:
- ---------------
Accounts payable $ 66,771 $ 66,771
Plan Equity 5,443,387 6,827,223 1,373,376 1,591,134 245,949 229,413 4,430,607 865,885 339,561 21,346,535
---------- ---------- ---------- ---------- -------- ---------- ---------- -------- -------- -----------
Total Liabilities
and Plan
Equity $5,510,158 $6,827,223 $1,373,376 $1,591,134 $245,949 $ 229,413 $4,430,607 $865,885 $339,561 $21,413,306
========== ========== ========== ========== ======== ========== ========== ======== ======== ===========
19
</TABLE>
<PAGE> 20
<TABLE>
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS
------------------------------------------------------------------------------------
<CAPTION>
For the year ended December 31, 1995
------------------------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Common/
Common Vanguard Income Money Vanguard U.S. Collective
Stock Windsor Securities Market Star Growth Investment Loan
Fund Fund Fund Trust Portfolio Fund Trust Fund Other Total
-------- --------- ---------- -------- --------- -------- ---------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Interest $ 2,085 $ $ $ $ $ $ 283,457 $ 76,815 $ 391 $ 362,748
Dividends 68,718 1,095,273 113,615 101,953 40,753 23,577 0 0 15,039 1,458,928
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net investment
income 70,803 1,095,273 113,615 101,953 40,753 23,577 283,457 76,815 15,430 1,821,676
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net appreciation
in the fair
value of
investments 489,962 1,024,773 259,380 0 52,122 88,617 0 0 59,223 1,974,077
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
Net additions
from invest-
ment activity 560,765 2,120,046 372,995 101,953 92,875 112,194 283,457 76,815 74,653 3,795,753
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Contributions:
Participants 184,727 1,073,855 170,092 999,766 241,578 202,067 801,663 0 105,807 3,779,555
Employer 529,218 0 0 0 0 0 0 0 43,452 572,670
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
713,945 1,073,855 170,092 999,766 241,578 202,067 801,663 0 149,259 4,352,225
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Total additions 1,274,710 3,193,901 543,087 1,101,719 334,453 314,261 1,085,120 76,815 223,912 8,147,978
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Less, benefit and
termination
payments to
participants:
Distributions
paid to
participants 163,539 430,461 62,793 118,010 21,538 14,488 173,411 30,710 26,988 1,041,938
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
1,111,171 2,763,440 480,294 983,709 312,915 299,773 911,709 46,105 196,924 7,106,040
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Interfund
transfers (79,601) 230,559 25,354 (114,831) 63,642 66,183 (248,069) 66,887 (10,124) 0
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net increase
(decrease) in
plan equity 1,031,570 2,993,999 505,648 868,878 376,557 365,956 663,640 112,992 186,800 7,106,040
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Plan equity at
beginning of
year 5,443,387 6,827,223 1,373,376 1,591,134 245,949 229,413 4,430,607 865,885 339,561 21,346,535
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Plan equity at
end of year $6,474,957 $9,821,222 $1,879,024 $2,460,012 $622,506 $595,369 $5,094,247 $978,877 $526,361 $28,452,575
========== ========== ========== ========== ======== ======== ========== ======== ======== ===========
20
</TABLE>
<PAGE> 21
<TABLE>
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS
------------------------------------------------------------------------------------
<CAPTION>
For the year ended December 31, 1994
------------------------------------------------------------------------------------------------------------------
Common/
Vanguard Collective
Instron Fixed Vanguard Vanguard Investment
Common Vanguard Income Money Vanguard U.S. Trust 1994,
Stock Windsor Securities Market Star Growth 1993 and Loan
Fund Fund Fund Trust Portfolio Fund III-92 Fund Other Total
-------- --------- ---------- -------- --------- -------- ---------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Interest $ 1,457 $ $ $ $ $ $ 247,348 $ 59,823 $ 10,263 $ 318,891
Dividends 49,307 635,845 112,864 62,080 12,410 2,039 0 0 4,531 879,076
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net investment
income 50,764 635,845 112,864 62,080 12,410 2,039 247,348 59,823 14,794 1,197,967
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net appreciation
(depreciation) in
the fair value of
investments 607,392 (668,245) (190,989) 0 (12,866) 2,860 0 0 (6,099) (267,947)
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
Net additions
from investment
activity 658,156 (32,400) (78,125) 62,080 (456) 4,899 247,348 59,823 8,695 930,020
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
Contributions:
Participants 104,386 693,917 155,784 159,868 54,474 77,169 390,139 0 67,076 1,702,813
Employer 475,194 0 0 0 0 0 0 0 20,912 496,105
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
579,580 693,917 155,784 159,868 54,474 77,169 390,139 0 87,988 2,198,918
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
Total additions 1,237,736 661,517 77,659 221,948 54,018 82,068 637,487 59,823 96,683 3,128,938
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- ----------
Less, benefit and
termination
payments to
participants:
Distributions
paid to
participants 104,668 158,663 82,484 22,751 11,347 0 77,825 8,528 0 466,266
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
1,133,068 502,854 (4,825) 199,197 42,671 82,068 559,662 51,295 96,683 2,662,672
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Interfund
transfers 43,687 86,033 (44,596) (310,372) 203,278 147,345 (164,826) 39,451 0 0
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Net increase
(decrease) in
plan equity 1,176,755 588,887 (49,421) (111,175) 245,949 229,413 394,836 90,746 96,683 2,662,672
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Plan equity at
beginning of year 4,266,632 6,238,336 1,422,797 1,702,309 0 0 4,035,771 775,139 242,879 18,683,863
---------- ---------- ---------- ---------- -------- -------- ---------- -------- -------- -----------
Plan equity at
end of year $5,443,387 $6,827,223 $1,373,376 $1,591,134 $245,949 $229,413 $4,430,607 $865,885 $339,561 $21,346,535
========== ========== ========== ========== ======== ======== ========== ======== ======== ===========
21
</TABLE>
<PAGE> 22
<TABLE>
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS
------------------------------------------------------------------------------------
<CAPTION>
For the year ended December 31, 1993
------------------------------------------------------------------------------------------------------------------
Common/
Vanguard Collective
Instron Fixed Vanguard Investment
Common Vanguard Income Money Trust 1993,
Stock Windsor Securities Market III-1992 Loan
Fund Fund Fund Trust and III-91 Fund Other Total
-------- --------- ---------- -------- ---------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Interest $ 969 $ 0 $ 0 $ 0 $ 242,483 $ 60,114 $ 2,576 $ 306,142
Dividends 43,458 528,934 123,997 56,006 0 0 6,584 758,979
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Net investment
income 44,427 528,934 123,997 56,006 242,483 60,114 9,160 1,065,121
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Net appreciation
in the fair
value of
investments 377,011 425,291 38,153 0 0 0 7,463 847,918
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Net additions
from investment
activity 421,438 954,225 162,150 56,006 242,483 60,114 16,623 1,913,039
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Contributions:
Participants 146,496 685,209 229,214 252,921 452,882 0 18,242 1,784,964
Employer 426,979 0 0 0 0 0 0 426,979
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
573,475 685,209 229,214 252,921 452,882 0 18,242 2,211,943
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Total additions 994,913 1,639,434 391,364 308,927 695,365 60,114 34,865 4,124,982
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Less, benefit and
termination
payments to
participants:
Distributions
paid to 186,758 295,913 32,583 323,663 133,753 1,010 6,786 980,466
participants ---------- ---------- ---------- ---------- ---------- -------- -------- -----------
808,155 1,343,521 358,781 (14,736) 561,612 59,104 28,079 3,144,516
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Interfund
transfers 64,280 296,349 (28,580) (259,541) (35,719) ( 36,789) 0 0
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Assets acquired
in merger
of LMS (see
Note 1) 5,563 0 0 0 0 0 214,800 220,363
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Net increase
(decrease)
in plan equity 877,998 1,639,870 330,201 (274,277) 525,893 22,315 242,879 3,364,879
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Plan equity at
beginning of
year 3,388,634 4,598,466 1,092,596 1,976,586 3,509,878 752,824 0 15,318,984
---------- ---------- ---------- ---------- ---------- -------- -------- -----------
Plan equity at $4,266,632 $6,238,336 $1,422,797 $1,702,309 $4,035,771 $775,139 $242,879 $18,683,863
end of year ========== ========== ========== ========== ========== ======== ======== ===========
22
</TABLE>
<PAGE> 23
NOTE 8 - PARTIES IN INTEREST
- ----------------------------
A portion of the Plan's investments are shares of mutual funds managed by
Vanguard Fiduciary Trust Company (Vanguard). Vanguard acts as trustee,
recordkeeper and custodian of the securities and investments held by the Instron
Plan.
23
<PAGE> 1
EXHIBIT I
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in the registration statement on
Form S-8 (File No. 2-91694) of our report dated June 21, 1996, on our audits of
the financial statements of Instron Corporation Savings and Security Plan as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, which report is included in this Form 11-K.
/s/ Coopers & Lybrand L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 28, 1996
24
