FORM 10-K/A
AMENDMENT TO FORM 10-K ANNUAL REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period ended___________________________
Commission File Number 1-7211
Ionics, Incorporated
(Exact name of registrant as specified in it charter)
Massachusetts 04-2068530
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
65 Grove Street, Watertown, Massachusetts 02172
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-926-2500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
/1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 as set forth
in the pages attached hereto:
1. Item 14(a) 3. of Part IV of said report on form 10-K is amended
to list Form 11-K, Annual Report of the Ionics Section 401(k) Stock
Savings Plan for the year ended December 31, 1996, as Exhibit 13(b)
thereto. The Annual Report of the Ionics Section 401(k) Stock Savings
Plan on Form 11-K for the year ended December 31, 1996 is hereby filed
pursuant to rule 15d-21 and General Instruction F to Form 10-K as an
Exhibit to said Annual Report on Form 10-K.
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.
IONICS, INCORPORATED
(Registrant)
Date: June 23, 1997 By /s/Stephen Korn
Stephen Korn
Vice President and
General Counsel
/2
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements
See Index to Financial Statements and Financial
Statement Schedules on page IV-7. The Financial
Statement Schedules are filed as part of this Annual
Report on Form 10-K.
2. Financial Statement Schedules
See Index to Financial Statements and Financial
Statement Schedules on page IV-7.
3. Exhibits
Exhibit Page
No. Description No.
3.0 Articles of Organization and By-Laws
3.1 Restated Articles of Organization (filed *
as Exhibit 3(a) to Form 10-K for year
ended December 31, 1986).
3.1(a) Amendment to the Restated Articles of *
Organization (filed as Exhibit 3(b) to
Form 10-K for year ended December 31, 1987).
3.1(b) Amendment to Restated Articles of *
Organization (filed as Exhibit 3.1(b) to
Registration Statement No. 33-38290 on
Form S-2 effective January 24, 1991).
3.2 By-Laws, as amended (filed as Exhibit 19 to *
Form 10-Q for the quarter ended September 30,
1989).
4.0 Instruments defining the rights of security holders,
including indentures
4.1 Rights Agreement, dated as of December 22, 1987, *
as amended and restated as of August 15, 1989,
between Registrant and The First National Bank
of Boston (filed as Exhibit 1 to Registrant's
Current Report on Form 8-K dated August 30, 1989).
/3
IV-1
4.2 Indenture, dated as of December 22, 1987, between *
Registrant and The First National Bank of Boston,
relating to Rights Agreement (filed as Exhibit 2
to Registrant's Current Report on Form 8-K dated
December 22, 1987).
4.3 Form of Common Stock Certificate (filed as Exhibit *
4.10 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990).
10. Material Contracts
10.1 1979 Stock Option Plan, as amended through *
February 22, 1996 (filed as Exhibit 10.1 to
Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995).
10.2 1986 Stock Option Plan for Non-Employee Directors, *
as amended through February 19, 1997 (filed as
Exhibit 10.2 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996).
10.3 Amended and Restated Credit Agreement between *
Registrant and the First National Bank of Boston
dated as of December 31, 1992 (filed as Exhibit
10.3 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992).
10.3(1) Amendment Agreement No. 1, dated as of *
December 31, 1995, to Amended and Restated
Credit Agreement between Registrant and The
First National Bank of Boston (filed as Exhibit
10.3(1) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995).
10.4 Operating Agreement dated as of September 27, *
1989 between Registrant and Aqua Cool
Enterprises, Inc. (filed as Exhibit 10.4 to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.5 Term Lease Master Agreement dated as of *
September 27, 1989 between Registrant and
Aqua Cool Enterprises, Inc. (filed as Exhibit
10.5 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1989).
10.6 Option Agreement dated as of September 27, 1989 *
among Registrant, Aqua Cool Enterprises, Inc.
and the other parties named therein (filed as
Exhibit 10.6 to Registrant's registration
statement on Form S-2, No. 33-38290,
effective January 24, 1991).
/4
IV-2
10.7 Agreement for Privatization of Water Supplies *
dated as of September 18, 1990 between the
Company and the City of Santa Barbara,
California (filed as Exhibit 10.7 to
Registrant's registration statement on Form S-2,
No. 33-38290, effective January 24, 1991).
10.8 Amendment No. 1, dated as of January 3, 1992, to *
Agreement for Privatization of Water Supplies
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.8 to Registrant's annual report on
Form 10-K for the year ended December 31, 1991).
10.9 Amendment No. 2, dated as of January 19, 1993, *
to Agreement for Privatization of Water Supplies
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.9 to the Registrant's annual report on
Form 10-K for the year ended December 31, 1992).
10.10 Amendment No. 3, dated June 28, 1994, to Agreement *
for Privatization of Water Supplies dated as of
September 18, 1990, between the Company and the City
of Santa Barbara, California (filed as Exhibit 10.1
to the Registrant's Form 10-Q for the period ended
June 30, 1994).
10.11 1994 Restricted Stock Plan (filed as Exhibit 10.12 *
to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1994).
10.12 1997 Stock Incentive Plan (filed as Exhibit 10.12 *
to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1996).
11. Statement re Computation of Earnings Per Share. *
13.(a) Annual Report to Stockholders of the Registrant for *
the year ended December 31, 1996 (only pages 16
through 32 and the inside back cover constitute an
exhibit to this report).
13.(b) Form 11-K, Annual Report of the Ionics Section 401(k) 7
Stock Savings Plan for the year ended December 31, 1996.
21. Subsidiaries of the Registrant. *
/5
IV-3
23. Consents
23.1 Consent of Coopers & Lybrand L.L.P. to incorporation *
by reference of that firm's report dated
February 18, 1997, which is included on page 18 of
the Registrant's Annual Report to Stockholders
for the year ended December 31, 1996.
24. Power of Attorney. *
27. Financial Data Schedule **
________________________________
* incorporated herein by reference
** for electronic purposes only
/6
IV-4
Exhibit No. 13(b) to Annual Report on Form 10-K
of Ionics, Incorporated for the year ended December 31, 1996
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended ________December 31, 1996 _________
OR
[ ] 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 number 1-7211
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Ionics Section 401(k) Stock Savings Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
IONICS, INCORPORATED
65 Grove Street
Watertown, Massachusetts 02172
/7
IONICS SECTION 401(k) STOCK SAVINGS PLAN
INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
For the years ended December 31, 1996 and 1995
________
Page(s)
Independent Auditors Report 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits
at December 31, 1996 and 1995 3-4
Statements of Changes in Net Assets Available for
Plan Benefits for the years ended December 31,
1996 and 1995 5-6
Notes to Financial Statements 7-11
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes, at
December 31, 1996 12
Schedule of Reportable Transactions
for the year ended December 31, 1996 13
/8
INDEPENDENT AUDITOR'S REPORT
Administrators
Ionics Section 401(k) Stock Savings Plan
Watertown, Massachusetts
We have audited the accompanying statements of net assets available
for plan benefits of the Ionics Section 401(k) Stock Savings Plan (the
Plan) as of December 31, 1996 and 1995, and the related statement of
changes in net assets available for plan benefits for the years then ended.
These financial statements and the schedules referred to below are the
responsibility of the plan administrator. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audits 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan as of December 31, 1996 and 1995 and the changes in
its net assets available for plan benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are
presented for purposes of complying with the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 and are not a required part of the basic
financial statements. Such schedules have been subjected to the auditing
procedures applied in the audit 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/BELANGER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Chelmsford, Massachusetts
June 12, 1997
-2-
/9
<TABLE>
IONICS SECTION 401(K) STOCK SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1996
<CAPTION>
PARTICIPANT - DIRECTED FUNDS
IONICS, INC. ASSET BT PARTIC-
COMMON PURITAN MANAGER CONTRAFUND PYRAMID IPANT CASH/
STOCK FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
INVESTMENTS, AT MARKET
(SEE NOTES 2,3 & 7)
IONICS, INCORPORATED
COMMON STOCK:
310,613 SHARES @
$48.00 PER SHARE $14,909,424 $14,909,424
FIDELITY INVESTMENTS:
PURITAN FUND:
89,866.814 SHARES
@ $17.24 PER SHARE $1,549,304 1,549,304
ASSET MANAGER FUND:
22,679.732 SHARES
@ $16.47 PER SHARE $ 373,535 373,535
CONTRAFUND FUND:
59,558.237 SHARES
@ $42.15 PER SHARE $ 2,510,380 2,510,380
BT PYRAMID GIC FUND $ 868,421 868,421
CASH AND CASH EQUIVALENTS 61 $ 537,187 537,248
AMOUNTS RECEIVABLE FROM
IONICS, INCORPORATED
AND PLAN PARTICIPANTS 195,938 195,938
LOANS RECEIVABLE FROM
PLAN PARTICIPANTS $ 644,327 644,327
TOTAL ASSETS $14,909,485 $1,549,304 $ 373,535 $ 2,510,380 $ 868,421 $ 644,327 $ 733,125 $21,588,577
LIABILITIES -0- -0- -0- -0- -0- -0- -0- -0-
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $14,909,485 $1,549,304 $ 373,535 $ 2,510,380 $ 868,421 $ 644,327 $ 733,125 $21,588,577
The accompanying notes are an integral part of these financial statements.
-3-
</TABLE>
/10
<TABLE>
IONICS SECTION 401(K) STOCK SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
<CAPTION>
PARTICIPANT - DIRECTED FUNDS
IONICS, INC. ASSET BT PARTIC-
COMMON PURITAN MANAGER CONTRAFUND PYRAMID IPANT CASH/
STOCK FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
INVESTMENTS, AT MARKET
(SEE NOTES 2,3 & 7)
IONICS, INCORPORATED
COMMON STOCK:
293,324 SHARES @
$43.50 PER SHARE $12,759,594 $12,759,594
FIDELITY INVESTMENTS:
PURITAN FUND:
62,398.762 SHARES
@ $17.01 PER SHARE $1,061,403 1,061,403
ASSET MANAGER FUND:
17,230.408 SHARES
@ $15.85 PER SHARE $ 273,102 273,102
CONTRAFUND FUND:
30,468.567 SHARES
@ $38.02 PER SHARE $ 1,158,415 1,158,415
BT PYRAMID GIC FUND $ 750,252 750,252
CASH AND CASH EQUIVALENTS 132,604 $ 47,261 179,865
AMOUNTS RECEIVABLE FROM
IONICS, INCORPORATED
AND PLAN PARTICIPANTS 211,864 211,864
LOANS RECEIVABLE FROM
PLAN PARTICIPANTS $ 387,065 387,065
TOTAL ASSETS $12,892,198 $1,061,403 $ 273,102 $ 1,158,415 $ 750,252 $ 387,065 $ 259,125 $16,781,560
LIABILITIES -0- -0- -0- -0- -0- -0- -0- -0-
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $12,892,198 $1,061,403 $ 273,102 $ 1,158,415 $ 750,252 $ 387,065 $ 259,125 $16,781,560
The accompanying notes are an integral part of these financial statements.
-4-
</TABLE>
/11
<TABLE>
IONICS SECTION 401(K) STOCK SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
PARTICIPANT - DIRECTED FUNDS
IONICS, INC. ASSET BT PARTIC-
COMMON PURITAN MANAGER CONTRAFUND PYRAMID IPANT CASH/
STOCK FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN
BENEFITS - BEGINNING
OF YEAR $ 12,892,198 $ 1,061,403 $ 273,102 $1,158,415 $ 750,252 $ 387,065 $ 259,125 $16,781,560
NET INVESTMENT INCOME,
PRINCIPALLY
INTEREST
AND DIVIDENDS 1,007 160,277 28,669 166,481 46,127 43,179 12,164 457,904
NET APPRECIATION
(DEPRECIATION)
IN THE FAIR VALUE OF
INVESTMENTS 1,195,185 32,320 13,512 221,456 1,462,473
CONTRIBUTIONS:
PARTICIPANTS 2,171,648 2,171,648
EMPLOYER 605,473 605,473
ACQUISITIONS 55,591 1,171,972 1,227,563
LOAN PAYMENTS (256,903) 58,613 (198,290)
TRANSFERS 955,807 295,304 58,252 964,028 74,370 (2,347,761) -0-
WITHDRAWALS BY AND
DISTRIBUTIONS TO
PARTICIPANTS (134,712) (2,328) 415,395 (1,198,109) (919,754)
NET INCREASE(DECREASE) 2,017,287 487,901 100,433 1,351,965 118,169 257,262 474,000 4,807,017
NET ASSETS AVAILABLE
FOR PLAN BENEFITS -
END OF YEAR $14,909,485 $1,549,304 $ 373,535 $2,510,380 $ 868,421 $ 644,327 $ 733,125 $21,588,577
The accompanying notes are an integral part of these financial statements.
-5-
</TABLE>
/12
<TABLE>
IONICS SECTION 401(K) STOCK SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
PARTICIPANT - DIRECTED FUNDS
IONICS, INC. ASSET BT PARTIC-
COMMON PURITAN MANAGER CONTRAFUND PYRAMID IPANT CASH/
STOCK FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN
BENEFITS - BEGINNING
OF YEAR $ 8,703,166 $ 868,168 $ 204,286 $ 584,272 $ 788,297 $ 235,321 $ 153,700 $11,537,210
NET INVESTMENT INCOME,
PRINCIPALLY
INTEREST
AND DIVIDENDS 1,055 55,579 7,559 88,968 43,738 27,937 7,059 231,895
NET APPRECIATION
(DEPRECIATION)
IN THE FAIR VALUE OF
INVESTMENTS 3,434,179 130,909 33,916 158,075 3,757,079
CONTRIBUTIONS:
PARTICIPANTS 1,881,968 1,881,968
EMPLOYER 433,127 433,127
LOAN PAYMENTS (155,467) 45,955 (109,512)
TRANSFERS 768,943 6,747 27,341 327,100 (79,621) (1,050,510) -0-
WITHDRAWALS BY AND
DISTRIBUTIONS TO
PARTICIPANTS (15,145) (2,162) 279,274 (1,212,174) (950,207)
NET INCREASE(DECREASE) 4,189,032 193,235 68,816 574,143 (38,045) 151,744 105,425 5,244,350
NET ASSETS AVAILABLE
FOR PLAN BENEFITS -
END OF YEAR $12,892,198 $1,061,403 $ 273,102 $1,158,415 $ 750,252 $ 387,065 $ 259,125 $16,781,560
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
/13
IONICS SECTION 401(K) STOCK STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
Note 1: THE PLAN AND ITS PROVISIONS
The Ionics Section 401(k) Stock Savings Plan (the "Plan") became effective
January 1, 1986. Effective May 1, 1994, the Plan was amended to provide a
broader range of investment selections for Plan participants and the
opportunity to change investment elections on a quarterly basis. Other
amendments to the Plan were also adopted, including provisions to permit
participants to borrow from their accounts. In addition, the Plan trustee
was changed from the Bank of Boston to the PNC Bank, New England.
Participants should refer to the Summary Plan Description for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan qualified under Section 401(k) of
the U.S. Internal Revenue Code covering all permanent employees of Ionics,
Incorporated, (the "Company") working at least 20 hours per week who have
completed one year of service. The Plan was established to provide benefits
to participants upon retirement, termination of employment, death, permanent
and total disability, or demonstration of financial hardship. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974.
Investment Options
The following investment options are available to participants:
Ionics, Incorporated Common Stock Fund - This fund invests directed
contributions solely in common stock of the Company.
Fidelity Puritan Fund - This mutual fund maintains a broadly based
conservatively managed diversified investment portfolio which is primarily
income oriented with a secondary emphasis on growth. Its portfolio consists
principally of high yielding common and preferred stocks and corporate
bonds.
Fidelity Contrafund - This mutual fund invests primarily in common stocks
and securities convertible into common stocks, and has capital appreciation
as its investment objective.
Fidelity Asset Manager Fund - This mutual fund maintains an investment
portfolio of stocks, bonds and short-term investments of U.S. and foreign
issuers, and has a primary objective of high total return with reduced risk
over the long term.
-7-
/14
Note 1: THE PLAN AND ITS PROVISIONS (Continued)
BT Pyramid GIC Fund - This fund, administered by The Bankers Trust
Company, invests primarily in Guaranteed Investment Contracts and
Bank Investment Contracts and Bankers Trust Commingled short-term
investment funds, and has as its objectives safety of principal,
stability, superior yields and a predictable annual return. The
fund sets an estimated range of return on an annual basis, but
because results can be affected by economic or market conditions,
it does not guarantee the rate.
All cash transactions, including contributions, fund purchases,
fund liquidations, loans, distributions, etc. are made through a
conduit account, which is an interest bearing cash account with
the PNC Bank, New England.
Participant Contributions
Employees who meet certain length of service requirements may
elect to become participants in the Plan and contribute, on a pre-
tax basis, from 1% to 12% of their compensation as defined by the
Plan. The annual amounts so contributed by employees are subject
to certain federal income tax limitations. Contributions made by
employees to the Plan may be used to purchase either common stock
of the Company or may be directed to be invested in any of the
available investment funds.
Participant Accounts
Each participant's account is credited with the participant's
contribution and an allocation of Plan earnings. Allocations are
based on total investment earnings and average participant
investment balances, as defined.
Company Contribution
The terms and conditions of the Plan provide for the Company to
contribute 50% of the first 6% an employee elects to invest in
common stock of the Company (subject to certain limitations). The
maximum annual amount that the Company may contribute on behalf of
employees is currently $750,000, and that limit is set by the
Board of Directors of the Company. Matching Company contributions
under the Plan are invested solely in common stock of the Company.
Non-vested Company contributions may, subject to certain
restrictions, be forfeited upon withdrawal of the employee from
the Plan and be used as a credit to reduce future Company
contributions.
-8-
/15
Note 1: THE PLAN AND ITS PROVISIONS (Continued)
Vesting
All participant contributions are 100% vested when made. Company
matching contributions are vested in increasing percentages based
on the years of service of the individual employee, from 33 1/3%
after two years to 100% after four years.
Plan Expenses
The Plan provides that all expenses of the Plan and its
administration shall be paid by the Company.
Withdrawals
A participant can make a hardship withdrawal of his or her own
contributions, subject to Internal Revenue Service restrictions.
A participant may withdraw the entire vested amount due to his or
her own contributions after attaining age 59 1/2.
Loans
A participant can borrow money from his or her vested account
subject to certain rules including a minimum amount of $1,000 and
a maximum amount not to exceed the lesser of 50% of the
participant's total vested account balance or $50,000.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented on the accrual
basis of accounting.
Valuation of Investments
Investment of the Plan in Ionics, Incorporated common stock is
stated at market, market being the last sale price on December 31,
1996 of Ionics, Incorporated common stock as reported on the New
York Stock Exchange. Investments in the Plan of the three (3)
Fidelity Funds and the BT Pyramid GIC Fund are stated at the Net
Asset Value of the funds reported as of December 31, 1996.
-9-
/16
The Plan presents in the statement of changes in net assets
available for plan benefits the net appreciation (depreciation) in
the fair value of its investments which consist of realized gains
or losses and the unrealized appreciation (depreciation) of these
investments.
Payment of Benefits
Benefits are recorded when paid.
Note 3: INVESTMENTS
<TABLE>
The following is a summary of investments at December 31, 1996 and
1995, respectively:
<CAPTION>
Market Value Cost
Fund 1996 1995 1996 1995
Investments At Fair Value
As Determined By Quoted
Market Price
<S> <C> <C> <C> <C>
Ionics, Incorporated
Common Stock $14,909,424 $12,759,594 $ 6,744,813 $ 5,135,085
Fidelity funds:
Puritan 1,549,304 1,061,403 1,453,418 977,269
Asset Manager 373,535 273,102 346,486 251,317
Contrafund 2,510,380 1,158,415 2,165,766 999,208
BT Pyramid GIC Fund 868,421 750,252 868,421 750,252
Other Investments
Participant Loans 644,327 387,065 644,327 387,065
$20,855,391 $16,389,831 $12,223,231 $ 8,500,196
</TABLE>
Note 4: INCOME TAX STATUS
The Internal Revenue Service has determined and informed the
Company by a letter dated September 12, 1995 that the Plan is
qualified and the trust established under the Plan is tax-exempt,
under the appropriate sections of the Code.
-10-
/17
Note 5: PLAN TERMINATION
Although it has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
In the event of Plan termination, participants will become 100
percent vested in their accounts.
Note 6: RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
<TABLE>
The following is a reconciliation of net assets available for
benefits per the financial statements at December 31, 1996 and 1995
to Form 5500:
<CAPTION>
1996 1995
<S> <C> <C>
Net assets available for benefits
per the financial statements $21,588,577 $16,781,560
Amounts allocated to withdrawing
participants (316,115) (178,505)
Net assets available for benefits
per the form 5500 $21,272,462 $16,603,055
</TABLE>
The following is a reconciliation of benefits paid to
participants per the financial statements for the year ended
December 31, 1996 to Form 5500:
Benefits paid to participants per the
financial statements $ 919,754
Add: Amounts allocated to withdrawing
participants at December 31, 1996 316,115
Less: Amounts allocated to withdrawing
participants at December 31, 1995 (178,505)
Benefits paid to participants per Form 5500 $1,057,364
Amounts allocated to withdrawing participants are recorded on
the Form 5500 for benefit claims that have been processed and
approved for payment prior to December 31 but not yet paid as of
that date.
Note 7: STOCK SPLIT
The investment in Ionics, Incorporated common stock reflects
a 2-for-1 stock split effected by a 100% stock dividend paid on
January 6, 1995.
-11-
/18
<TABLE>
ATTACHMENT TO FORM 5500
EIN: 04-2068530
PN: 003
SCHEDULE I
IONICS SECTION 401(K) STOCK SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<CAPTION>
Face Amount,
Shares or Current
Description of Investment Rate Cost Value
<S> <C> <C> <C>
Cash and Cash Equivalents $ 537,248 $ 537,248
Ionics, Incorporated
Common Stock 310,613 6,744,813 14,909,424
Fidelity Investments:
Puritan Fund 89,867 1,453,418 1,549,304
Asset Manager Fund 22,680 346,486 373,535
Contrafund 59,558 2,165,766 2,510,380
BT Pyramid GIC Fund 868,421 868,421
Participant Loans
(Rate of Interest 8.25% to 10.5%) -0- 644,327
Total Funds Invested $12,116,152 $21,392,639
The accompanying notes are an integral part of these supplemental schedules.
</TABLE>
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<TABLE>
ATTACHMENT TO FORM 5500 SCHEDULE II
EIN: 04-2068530
PN: 003
IONICS SECTION 401(K) STOCK SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Current Value
Of Asset On
Purchase Selling Cost of Transaction Net Gain
Description of Asset Price Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS
None
SERIES OF TRANSACTIONS
Purchase:
Fidelity Investments
32,574 shares of
Contrafund $1,270,821
Company Stock
49,772 shares of
Ionics, Inc.
Common Stock 2,229,171
Sale:
Fidelity Investments
3,485 shares of
Contrafund $ 140,313 $104,264 $ 140,313 $ 36,049
Company Stock
32,483 shares of
Ionics, Inc.
Common Stock 1,274,527 619,444 1,274,527 655,083
The accompanying notes are an integral part of these supplemental schedules.
</TABLE>
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SIGNATURES
Ionics Section 401(k) Stock Savings Plan. Pursuant to the requirements
of the Securities Exchange Act of 1934, the trustees (or other persons
who administer the employee benefit plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly
authorized.
IONICS SECTION 401(K) STOCK
STOCK SAVINGS PLAN
Date: June 20, 1997 By /s/Marianne Manzon Winsser
Marianne Manzon Winsser
Administrator
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EXHIBIT 1
[LOGO] Belanger & Company, P.C.
A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS
239-241 Chelmsford Street
Chelmsford, Massachusets 01824
(508)256-1888
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
registration statement of the Ionics Section 401(k) Stock
Savings Plan on Form S-8 (Registration No. 33-2092) of our
report dated June 12, 1997 on our audits of the financial
statements of the Ionics Section 401(k) Stock Savings Plan
as of December 31, 1996 and 1995, which report is included
in this Annual Report on Form 11-K of the Plan which is
being filed as Exhibit 13(b) to the Annual Report on Form
10-K of Ionics, Incorporated for the year ended December 31,
1996.
/s/BELANGER & COMPANY P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Chelmsford, Massachusetts
June 20, 1997
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