<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, 1997
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 29, 1998 INSTRON CORPORATION
By: /s/ John R. Barrett
----------------------
John R. Barrett
Treasurer
2
<PAGE> 3
INSTRON CORPORATION
SAVINGS AND SECURITY PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1997
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, 1997 and 1996 6
Statements of Income and Changes in Plan
Equity for the years ended December 31, 1997,
December 31, 1996 and December 31, 1995 7
Notes to Financial Statements 8-20
b. Exhibits
Exhibit I - Consent of Independent Accountants 21
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 the
Instron Corporation Savings and Security Plan as of December 31, 1997 and 1996,
and the related statements of income and changes in plan equity for each of the
three years in the period ended December 31, 1997. 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 the Instron Corporation Savings
and Security Plan as of December 31, 1997 and 1996, and the changes in plan
equity for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.
Boston Massachusetts /s/ Coopers & Lybrand L.L.P.
June 19, 1998 ----------------------------
COOPERS & LYBRAND L.L.P.
5
<PAGE> 6
INSTRON CORPORATION SAVINGS
---------------------------
AND SECURITY PLAN
-----------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Cash equivalents $ 39,483 $ 37,955
Investment in Instron Corporation
Common Stock, at fair value
(cost $5,572,545 at December 31,
1997, and $5,551,846 at December 31,
1996) 8,813,644 6,042,187
Shares of Registered Investment Companies,
at fair value (cost $22,281,904
at December 31, 1997 and $17,902,409
at December 31, 1996) 25,009,367 20,152,389
Vanguard Retirement Savings Trust, at
contract value 5,162,231 5,089,978
Loans receivable from Plan
Participants 814,090 945,426
Contributions receivable:
Employee 72,479 91,718
Employer 21,080 27,593
Dividends receivable 18,830 18,982
Other receivable 20,008 14,953
----------- -----------
Total Plan Assets $39,971,212 $32,421,181
=========== ===========
LIABILITIES AND PLAN EQUITY
Accounts payable $ 18,373 $ 42,209
Plan equity 39,952,839 32,378,972
----------- -----------
Total Liabilities and Plan Equity $39,971,212 $32,421,181
=========== ===========
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE> 7
INSTRON CORPORATION SAVINGS
---------------------------
AND SECURITY PLAN
-----------------
STATEMENTS OF INCOME
--------------------
AND CHANGES IN PLAN EQUITY
--------------------------
<TABLE>
<CAPTION>
For the year For the year For the year
ended ended ended
December 31, 1997 December 31, 1996 December 31, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Investment income:
Interest $ 383,234 $ 382,457 $ 362,748
Dividends on Instron
Corporation Common Stock 75,606 74,589 68,718
Other dividends 3,151,450 1,753,076 1,390,210
----------- ----------- -----------
Net investment income 3,610,290 2,210,122 1,821,676
Net appreciation in the fair
value of investments 3,722,611 1,082,270 1,974,077
----------- ----------- -----------
Net additions
from investment activity 7,332,901 3,292,392 3,795,753
----------- ----------- -----------
Contributions:
Participants 2,271,112 1,910,693 3,779,555
Employer 579,866 560,888 572,670
----------- ----------- -----------
2,850,978 2,471,581 4,352,225
----------- ----------- -----------
Total additions 10,183,879 5,763,973 8,147,978
Less, benefit and termination
payments to participants:
Distributions paid to
participants 2,610,012 1,837,576 1,041,938
----------- ----------- -----------
Net increase in plan equity 7,573,867 3,926,397 7,106,040
Plan equity at beginning
of year 32,378,972 28,452,575 21,346,535
----------- ----------- -----------
Plan equity at end of year $39,952,839 $32,378,972 $28,452,575
=========== =========== ===========
</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.
For a more complete description of the Plan, refer to the Plan document.
The Plan was originally effective July 1, 1984 and was last amended and restated
in its entirety effective August 5, 1996 and has been subsequently amended by
the first, second and third amendment thereto.
The Plan consists of a cash or deferred compensation plan under Section 401(k)
of the Code of 1986, as amended. The Plan is also an employee stock ownership
plan. The purpose of the 401(k) plan is to enable participating employees of
Instron Corporation ("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. The 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 Instron Corporation (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 Plan:
ELIGIBILITY. Employees of the Company are eligible to participate in the 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. Non-resident aliens, summer interns, co-op
students, temporary employees and independent contractors are not eligible to
participate in the Plan.
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 Plan, acts as trustee, recordkeeper and custodian of the
securities and investments held by the Plan.
CONTRIBUTIONS. The 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 after-tax)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
8
<PAGE> 9
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 RETIREMENT SAVINGS TRUST. The Vanguard Retirement Savings
Trust seeks to provide a high level of income and a stable share value of $1.00.
The Trust invests 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.
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 - LONG-TERM CORPORATE PORTFOLIO.
The Vanguard Fixed Income Securities Fund - Long-Term 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. At least 65% of the Corporate Portfolio is invested in corporate
bonds rated a minimum of Baa3 by Moody's Investor Services or BBB by Standard &
Poor's at the time of purchase. At least 80% of the Portfolio's assets will
normally be invested in a combination of investment grade corporate bonds and
securities of the U.S. government and its agencies. 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
9
<PAGE> 10
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, reasonable
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.
INSTRON COMMON STOCK FUND. Contributions allocated to the Instron Common Stock
Fund are invested in common shares of Instron Corporation, 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 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 1997 Plan year, the interest rate on these loans was equal
to Bank of Boston's prime
10
<PAGE> 11
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 $79,125, $78,825, and $76,074 from employee loans
for the years ended December 31, 1997, 1996, and 1995, respectively.
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 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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING. The accompanying financial statements have been prepared on
the accrual basis of accounting, in conformity with generally accepted
accounting principles.
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 Retirement Savings Trust are stated at
contract value, which approximates fair value. Participants' loans receivable
are valued at cost which approximates fair value.
All investments of the Plan are valued at fair value as estimated by the
recordkeeper.
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.
PAYMENT OF BENEFITS. Benefits are recorded when paid.
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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. The preparation of the Plan's financial statements in
conformity with generally accepted accounting principles requires the plan
administrator to make significant estimates and assumptions that affect the
reported amounts of total plan assets, liabilities and equity at the date of the
financial statements and the changes in plan equity during the reporting period
and, when applicable, disclosures of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from those
estimates.
RISK AND UNCERTAINTIES. The Plan provides for various investment options in any
combination of stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various risks, such
as interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect participants' account balances and the
amounts reported in the statement of financial condition.
NOTE 3 - INVESTMENTS
At December 31, 1997 and 1996, the number of units/shares, the cost and the
current value of investments held were as follows:
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------------------
Units/ Market/Fair
Shares Cost Value
--------- --------- ----------
<S> <C> <C> <C>
Instron Common Stock 466,948 $ 5,572,545 $ 8,813,644*
Vanguard Windsor Fund 957,803 14,315,695 16,263,492*
Vanguard Fixed Income
Securities Fund,
Investment Grade
Bond Portfolio 243,040 2,103,325 2,250,553*
Vanguard Money Market
Trust, Prime Portfolio 2,297,962 2,297,962 2,297,962*
Vanguard Retirement Savings
Trust 5,162,231 5,162,231 5,162,231*
Vanguard STAR Portfolio 113,212 1,809,565 1,967,631*
Vanguard U.S. Growth Fund 77,691 1,755,357 2,229,729*
Loan Fund 0 814,090 814,090
----------- -----------
Total $33,830,770 $39,799,332
=========== ===========
</TABLE>
*Exceed 5% of Plan Assets
12
<PAGE> 13
NOTE 3 - INVESTMENTS (continued)
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------------------------------
Units/ Market/Fair
Shares Cost Value
--------- ----------- -----------
<S> <C> <C> <C>
Instron Common Stock 473,897 $ 5,551,846 $ 6,042,187*
Vanguard Windsor Fund 798,576 11,279,315 13,248,381*
Vanguard Fixed Income
Securities Fund,
Investment Grade
Bond Portfolio 213,467 1,840,560 1,876,377*
Vanguard Money Market
Trust, Prime Portfolio 2,506,872 2,506,872 2,506,872*
Vanguard Retirement Savings
Trust 5,089,978 5,089,978 5,089,978*
Vanguard Star Portfolio 73,323 1,111,468 1,162,902
Vanguard U.S. Growth Fund 57,197 1,164,194 1,357,857
Loan Fund 0 945,426 945,426
----------- -----------
Total $29,489,659 $32,229,980
=========== ===========
</TABLE>
*Exceed 5% of Plan Assets
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.
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 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 January 3, 1997,
from the IRS in connection with the Plan as amended and restated effective
August 5, 1996, as amended. 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.
13
<PAGE> 14
NOTE 5 - FEDERAL INCOME TAXES (CONTINUED)
Annual Participant's contributions up to $9,500 in 1997, 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.
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<PAGE> 15
NOTE 6 - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Vanguard
Common Vanguard Income Money Vanguard U.S. Retirement
Stock Windsor Securities Market Star Growth Savings Loan
Fund Fund Fund Reserves Portfolio Fund Trust Fund Total
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
------
Cash equivalents $ 39,483 $ 39,483
Investments at fair
value 8,813,644 $16,263,492 $2,250,553 $2,297,962 $1,967,631 $2,229,729 $5,162,231 $814,090 39,799,332
Contributions
receivable:
Employee 2,756 31,066 4,851 4,739 6,234 9,104 13,729 72,479
Employer 21,080 21,080
Dividends receivable 18,830 18,830
Other receivable 20,008 20,008
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
Total Plan Assets $8,915,801 $16,294,558 $2,255,404 $2,302,701 $1,973,865 $2,238,833 $5,175,960 $814,090 $39,971,212
========== =========== ========== ========== ========== ========== ========== ======== ===========
Liabilities and
Plan Equity:
- ---------------
Accounts payable $ 18,373 $ 18,373
Plan Equity 8,897,428 $16,294,558 $2,255,404 $2,302,701 $1,973,865 $2,238,833 $5,175,960 $814,090 39,952,839
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
Total Liabilities
and Plan Equity $8,915,801 $16,294,558 $2,255,404 $2,302,701 $1,973,865 $2,238,833 $5,175,960 $814,090 $39,971,212
========== =========== ========== ========== ========== ========== ========== ======== ===========
</TABLE>
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<PAGE> 16
NOTE 6 - ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS
(CONTINUED)
<TABLE>
<CAPTION>
December 31, 1996
----------------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Vanguard
Common Vanguard Income Money Vanguard U.S. Retirement
Stock Windsor Securities Market Star Growth Savings Loan
Fund Fund Fund Reserves Portfolio Fund Trust Fund Total
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
- ------
Cash equivalents $ 37,955 $ 37,955
Investments at fair
value 6,042,187 $13,248,381 $1,876,377 $2,506,872 $1,162,902 $1,357,857 $5,089,978 $945,426 32,229,980
Contributions
receivable:
Employee 2,486 37,192 6,337 4,363 9,904 15,872 15,564 91,718
Employer 27,593 27,593
Dividends receivable 18,982 18,982
Other receivable 14,614 339 14,953
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
Total Plan Assets $6,143,817 $13,285,912 $1,882,714 $2,511,235 $1,172,806 $1,373,729 $5,105,542 $945,426 $32,421,181
========== =========== ========== ========== ========== ========== ========== ======== ===========
Liabilities and
Plan Equity:
- ---------------
Accounts payable $ 42,209 $ 42,209
Plan Equity 6,101,608 $13,285,912 $1,882,714 $2,511,235 $1,172,806 $1,373 729 $5,105,542 $945,426 32,378,972
---------- ----------- ---------- ---------- ---------- ---------- ---------- -------- -----------
Total Liabilities
and Plan Equity $6,143,817 $13,285,912 $1,882,714 $2,511,235 $1,172,806 $1,373,729 $5,105,542 $945,426 $32,421,181
========== =========== ========== ========== ========== ========== ========== ======== ===========
</TABLE>
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<PAGE> 17
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT
PROGRAMS
<TABLE>
<CAPTION>
For the year ended December 31, 1997
---------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Vanguard
Common Vanguard Income Money Vanguard U.S. Retirement
Stock Windsor Securities Market Star Growth Savings
Fund Fund Fund Reserves Portfolio Fund Trust
----------- ----------- ----------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 1,867 $ 302,242
Dividends 75,606 $ 2,599,200 $ 158,625 $ 125,120 $ 182,466 $ 86,039 0
----------- ----------- ----------- ----------- ---------- ---------- -----------
Net investment
income 77,473 2,599,200 158,625 125,120 182,466 86,039 302,242
----------- ----------- ----------- ----------- ---------- ---------- -----------
Net appreciation in the
fair value of
investments
2,852,908 311,834 111,801 0 129,993 316,075 0
----------- ----------- ----------- ----------- ---------- ---------- -----------
Net additions from 2,930,381 2,911,034 270,426 125,120 312,459 402,114 302,242
investment activity ----------- ----------- ----------- ----------- ---------- ---------- -----------
Contributions: 72,402 929,244 142,763 173,030 261,679 321,284 370,710
Participants 579,866 0 0 0 0 0 0
Employer ----------- ----------- ----------- ----------- ---------- ---------- -----------
652,268 929,244 142,763 173,030 261,679 321,284 370,710
----------- ----------- ----------- ----------- ---------- ---------- -----------
Total additions 3,582,649 3,840,278 413,189 298,150 574,138 723,398 672,952
----------- ----------- ----------- ----------- ---------- ---------- -----------
Less, benefit and
termination payments to
participants:
Distributions paid to
participants 357,278 1,034,411 30,281 352,926 126,848 265,842 370,745
----------- ----------- ----------- ----------- ---------- ---------- -----------
Interfund transfers (428,785) 209,477 (9,523) (152,835) 355,084 408,743 (228,204)
----------- ----------- ----------- ----------- ---------- ---------- -----------
Net increase
(decrease) in plan
equity 2,796,586 3,015,344 373,385 (207,611) 802,374 866,299 74,003
----------- ----------- ----------- ----------- ---------- ---------- -----------
Plan equity at beginning
of year 6,101,608 13,285,912 1,882,714 2,511,236 1,172,805 1,373,729 5,105,542
----------- ----------- ----------- ----------- ---------- ---------- -----------
Plan equity at end of
year $ 8,898,194 $16,301,256 $ 2,256,099 $ 2,303,625 $1,975,179 $2,240,028 $ 5,179,545
=========== =========== =========== =========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
----------- -----------
<S> <C> <C>
Investment Income:
Interest $ 79,125 $ 383,234
Dividends 0 3,227,056
----------- -----------
Net investment
income 79,125 3,610,290
----------- -----------
Net appreciation in the
fair value of
investments
0 3,722,611
----------- -----------
Net additions from 79,125 7,332,901
investment activity ----------- -----------
Contributions:
Participants 0 2,271,112
Employer 0 579,866
----------- -----------
0 2,850,978
Total additions ----------- -----------
79,125 10,183,879
----------- -----------
Less, benefit and
termination payments to
participants:
Distributions paid to
participants 71,681 2,610,012
------ ---------
Interfund transfers
(153,957) 0
----------- -----------
Net increase
(decrease) in plan
equity
(146,513) 7,573,867
----------- -----------
Plan equity at beginning
of year
945,426 32,378,972
----------- -----------
Plan equity at end of
year
$ 798,913 $39,952,839
=========== ===========
</TABLE>
17
<PAGE> 18
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT
PROGRAMS (CONTINUED)
<TABLE>
<CAPTION>
For the year ended December 31, 1996
----------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Vanguard
Common Vanguard Income Money Vanguard U.S. Retirement
Stock Windsor Securities Market Star Growth Savings Loan
Fund Fund Fund Reserves Portfolio Fund Trust Fund
--------- ---------- ----------- --------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 1,651 $ 301,203 $ 78,825
Dividends 74,589 $ 1,263,916 $ 156,653 $ 123,864 $ 101,508 $ 99,427 0 0
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Net investment
income 76,240 1,263,916 156,653 123,864 101,508 99,427 301,203 78,825
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Net appreciation
(depreciation)in the
fair value of
investments (338,715) 1,425,384 (138,983) 0 30,369 114,916 0 0
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Net additions
from investment
activity (262,475) 2,689,300 17,670 123,864 131,877 214,343 301,203 78,825
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Contributions:
Participants 75,464 782,730 141,381 137,558 142,171 176,873 390,379 0
Employer 544,646 0 0 0 0 0 0 0
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
620,110 782,730 141,381 137,558 142,171 176,873 390,379 0
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Total additions 357,635 3,472,030 159,051 261,422 274,048 391,216 691,582 78,825
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Less, benefit and
termination payments
to participants:
Distributions
paid to
participants 305,546 352,873 82,840 143,348 167,732 40,692 543,539 56,217
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
52,089 3,119,157 76,211 118,074 106,316 350,524 148,043 22,608
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Interfund transfers (425,438) 345,533 (72,521) (66,851) 443,984 427,836 (136,748) (56,059)
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Net increase
(decrease) in
plan equity (373,349) 3,464,690 3,690 51,223 550,300 778,360 11,295 (33,451)
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Plan equity at
beginning of year 6,474,957 9,821,222 1,879,024 2,460,013 622,505 595,369 5,094,247 978,877
----------- ----------- ----------- ----------- ---------- ---------- ----------- ---------
Plan equity at end of
year $ 6,101,608 $13,285,912 $ 1,882,714 $ 2,511,236 $1,172,805 $1,373,729 $ 5,105,542 $ 945,426
=========== =========== =========== =========== ========== ========== =========== =========
</TABLE>
<TABLE>
<CAPTION>
Other Total
-------- ---------
<S> <C> <C>
Investment Income:
Interest $ 778 $ 382,457
Dividends 7,708 1,827,665
----------- -----------
Net investment
income 8,486 2,210,122
----------- -----------
Net appreciation
(depreciation)in the
fair value of
investments (10,701) 1,082,270
----------- -----------
Net additions
from investment
activity (2,215) 3,292,392
----------- -----------
Contributions:
Participants 64,137 1,910,693
Employer 16,242 560,888
----------- -----------
80,379 2,471,581
----------- -----------
Total additions 78,164 5,763,973
----------- -----------
Less, benefit and
termination payments
to participants:
Distributions
paid to
participants 144,789 1,837,576
----------- -----------
(66,625) 3,926,397
----------- -----------
Interfund transfers (459,736) 0
----------- -----------
Net increase
(decrease) in
plan equity (526,361) 3,926,397
----------- -----------
Plan equity at
beginning of year 526,361 28,452,575
----------- -----------
Plan equity at end of
year $ 0 $32,378,972
=========== ===========
</TABLE>
18
<PAGE> 19
NOTE 7 - ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO INVESTMENT
PROGRAMS (CONTINUED)
<TABLE>
<CAPTION>
For the year ended December 31, 1995
------------------------------------------------------------------------------------------------
Vanguard
Instron Fixed Vanguard Vanguard Vanguard
Common Vanguard Income Money Vanguard U.S. Retirement
Stock Windsor Securities Market Star Growth Savings
Fund Fund Fund Reserves Portfolio Fund Trust
----------- ---------- ---------- ----------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 2,085 $ 283,457
Dividends 68,718 $1,095,273 $ 113,615 $ 101,953 $ 40,753 $ 23,577 0
----------- ---------- ---------- ----------- -------- -------- -----------
Net investment
income 70,803 1,095,273 113,615 101,953 40,753 23,577 283,457
----------- ---------- ---------- ----------- -------- -------- -----------
Net appreciation in
the fair value of
investments 489,962 1,024,773 259,380 0 52,122 88,617 0
----------- ---------- ---------- ----------- -------- -------- -----------
Net additions
from investment
activity 560,765 2,120,046 372,995 101,953 92,875 112,194 283,457
----------- ---------- ---------- ----------- -------- -------- -----------
Contributions:
Participants 184,727 1,073,855 170,092 999,767 241,577 202,067 801,663
Employer 529,218 0 0 0 0 0 0
----------- ---------- ---------- ----------- -------- -------- -----------
713,945 1,073,855 170,092 999,767 241,577 202,067 801,663
----------- ---------- ---------- ----------- -------- -------- -----------
Total additions 1,274,710 3,193,901 543,087 1,101,720 334,452 314,261 1,085,120
----------- ---------- ---------- ----------- -------- -------- -----------
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
----------- ---------- ---------- ----------- -------- -------- -----------
1,111,171 2,763,440 480,294 983,710 312,914 299,773 911,709
----------- ---------- ---------- ----------- -------- -------- -----------
Interfund transfers (79,601) 230,559 25,354 (114,831) 63,642 66,183 (248,069)
----------- ---------- ---------- ----------- -------- -------- -----------
Net increase in 1,031,570 2,993,999 505,648 868,879 376,556 365,956 663,640
plan equity ----------- ---------- ---------- ----------- -------- -------- -----------
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
----------- ---------- ---------- ----------- -------- -------- -----------
Plan equity at end of
year $ 6,474,957 $9,821,222 $1,879,024 $ 2,460,013 $622,505 $595,369 $ 5,094,247
=========== ========== ========== =========== ======== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Other Total
-------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Interest $ 76,815 $ 391 $362,748
Dividends 0 15,039 1,458,928
-------- ----------- -----------
Net investment
income 76,815 15,430 1,821,676
-------- ----------- -----------
Net appreciation in
the fair value of
investments 0 59,223 1,974,077
-------- ----------- -----------
Net additions
from investment
activity 76,815 74,653 3,795,753
-------- ----------- -----------
Contributions:
Participants 0 105,807 3,779,555
Employer 0 43,452 572,670
-------- ----------- -----------
0 149,259 4,352,225
-------- ----------- -----------
Total additions 76,815 223,912 8,147,978
-------- ----------- -----------
Less, benefit and
termination payments
to participants:
Distributions
paid to
participants 30,710 26,988 1,041,938
-------- ----------- -----------
46,105 196,924 7,106,040
-------- ----------- -----------
Interfund transfers 66,887 (10,124) 0
-------- ----------- -----------
Net increase in 112,992 186,800 7,106,040
plan equity -------- ----------- -----------
Plan equity at
beginning of year 865,885 339,561 21,346,535
-------- ----------- -----------
Plan equity at end of
year $978,877 $ 526,361 $28,452,575
======== =========== ===========
</TABLE>
19
<PAGE> 20
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 Plan.
Participants with outstanding loan balances and the Company are also considered
to be parties in interest.
20
<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 19, 1998, on our audits of
the financial statements of the Instron Corporation Savings and Security Plan as
of December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, which report is included in this Annual Report on Form
11-K.
Boston, Massachusetts /s/Coopers & Lybrand L.L.P.
----------------------------
June 29, 1998 COOPERS & LYBRAND L.L.P.
21
