Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] Annual Report pursuant to Section 15(3) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1998
OR
[__] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from ____________ to ________________
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Mestek, Inc.
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executed office:
Mestek, Inc.
260 North Elm Street
Westfield, Massachusetts 01085
[NYC] 308564.1
<PAGE>
REQUIRED INFORMATION
A. Financial Statements and Schedules: Page
Independent Auditors' Report 3
Statements of Net Assets Available for Plan
Benefits as of December 31, 1998 and 1997 5
Statements of Changes in Net Assets Available for
Plan Benefits for the Years Ended December 31, 1998 and 1997 7
Notes to Financial Statements 9
SIGNATURES
The 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.
MESTEK, INC.
RETIREMENT SAVINGS PLAN
Date: December 8, 1999 By:/S/ Jack E. Nelson
Name: Jack E. Nelson
Title: Vice President-Human Resources
[NYC] 308564.1
<PAGE>
Audited Financial Statements
and Supplemental Schedules
Mestek, Inc.
Retirement Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
Report of Independent Certified Public Accountants
The Plan Administrator
Mestek, Inc. Retirement Savings Plan
We were engaged to audit the financial statements and supplemental schedules of
Mestek, Inc. Retirement Savings Plan (the APlan@) as of December 31, 1998 and
1997, and for the year ended December 31, 1998, as listed in the accompanying
index. These financial statements and supplemental schedules are the
responsibility of the Plan=s management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor=s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the Plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
described in Note E, which was certified by MassMutual Life Insurance Company,
the Plan's trustee, except for comparing the information to the related
information included in the financial statements and supplemental schedules. We
have been informed by the Plan administrator that the trustee holds the Plan's
investment assets and executes investment transactions. The Plan administrator
has obtained a certification from the trustee as of December 31, 1998 and 1997
and for the year ended December 31, 1998, that the information provided to the
Plan administrator by the trustee is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedules taken as a whole. The form and content of the
information included in the financial statements and schedules, other than that
derived from the information certified by the trustee, have been audited by us
in accordance with generally accepted auditing standards and, in our opinion,
are presented in compliance with the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
/s/ Grant Thornton LLP
Boston, Massachusetts
July 16, 1999
[NYC] 308564.1
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Mestek, Inc. Retirement Savings Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
1998 1997
--------- ---------
ASSETS
Investments:
At fair value - (note B)
MassMutual Pooled Separate Accounts
Core equity fund $1,552,672 $1,263,863
Small company fund 177,622 156,829
Balanced fund 166,725 117,468
Intermediate bond fund 55,387 31,621
Notes receivable from participants 332,273 274,105
--------- ---------
2,284,679 1,843,886
At contract value - (notes B and F)
MassMutual Life Insurance Company
Investment contract fund 4,066,100 3,365,040
--------- ---------
Total investments 6,350,779 5,208,926
Receivables:
Participants= contributions 75,084 48,719
Employer=s contributions 29,120 21,163
--------- ----------
Total receivables 104,204 69,882
--------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $6,454,983 $5,278,808
========= =========
The accompanying notes are an integral part of the financial statements.
4
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The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
Mestek, Inc. Retirement Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1998
<CAPTION>
Inter- Notes
Core Small mediate Receivable
Investment Equity Company Balanced Bond From
Contract Fund Fund Fund Fund Fund Participants Other Total
------------- -------- ------- -------- ------- ------------ ----- -----
Additions to net assets attributed to:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participants' $407,228 $159,083 $43,010 $22,070 $13,669 $ - $75,084 $720,144
Employer's 180,455 60,982 14,632 6,166 - 29,120 300,846
Rollovers 4,335 14,360 9,200 6,051 2,280 - - 36,226
Investment income 221,894 213,289 (16,583) 18,270 3,781 25,093 - 465,744
--------- -------- ------- ------- ------ ------- ------- ---------
Total additions 813,912 447,714 50,259 55,882 25,896 25,093 104,204 1,522,960
--------- --------- ------- ------- ------ ------- ------- ---------
Deductions from net assets attributed to:
Benefits paid to participants 270,502 51,262 8,451 10,803 1,276 - - 342,294
Miscellaneous expenses 2,383 1,392 354 214 148 - - 4,491
--------- --------- ------- ------- ------- ------- ------- ---------
Total deductions 272,885 52,654 8,805 11,017 1,424 - - 346,785
--------- --------- ------- ------- ------- ------- ------- ---------
Net increase prior to interfund transfers 541,027 395,060 41,454 44,865 24,472 25,093 104,204 1,176,175
Interfund transfers (net) 160,033 (106,251) (20,661) 4,392 (706) 33,075 (69,882) -
--------- --------- ------- ------- ------ ------- ------- ---------
NET INCREASE 701,060 288,809 20,793 49,257 23,766 58,168 34,322 1,176,175
Net assets available for benefits:
Beginning of year 3,365,040 1,263,863 156,829 117,468 31,621 274,105 69,882 5,278,808
--------- --------- ------- ------- ------ ------- ------- ---------
End of year $4,066,100 $1,552,672 $177,622 $166,725 $55,387 $332,273 $104,204 $6,454,983
========= ========= ======= ======= ====== ======= ======= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN
The following description of Mestek, Inc. Retirement Savings Plan (the "Plan")
provides only general information. Participants should refer to the Plan
Agreement for a more complete description of the Plan's provisions.
General
The Plan was established as of June 1, 1984 under Section 401(k) of the
Internal Revenue Code. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (AERISA@).
The Plan is a defined contribution plan established for the benefit of
employees of Mestek, Inc. (the ACompany@) who are covered under regional
collective bargaining agreements. Service eligibility requirements differ by
division and collective bargaining agreements.
Participant Contributions
Participants may elect to have up to fifteen percent of their compensation
withheld, up to the maximum allowed by the Internal Revenue Code.
Participants may elect to make nondeductible voluntary contributions up to an
additional ten percent of their gross earnings each year within the legal
limits.
Company Contribution
The Company contributes differing amounts depending upon the division's
collective bargaining agreement. Contributions are funded on a current basis.
The Company contributions are as follows:
Division Agreement
Vulcan Radiator Corp. Effective June 1, 1990, employees hired prior to
June 1, 1984, receive $.25/hour for the total
hours worked per week.
Effective June 1, 1990, employees hired after
May 31, 1984 and before June 1, 1990, receive
$.20/hour for the total hours worked per week.
7
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Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Division Agreement
Effective June 1, 1990, employees hired after
May 31, 1990, receive $.10/hour for the total
hours worked per week upon reaching the first
anniversary of the date of hire and having
completed one full year of service. This amount
will be retroactive to the date the employee=s
six month anniversary. When the employee
completes two full years of service, that
employee will receive $.15/hour for the total
hours worked per week.
Effective June 1, 1993, employees hired after
June 1, 1993 receive $.10/hour for each hour
worked after they completed twelve months of
service. Employee shall receive an additional
$.05/hours for each hour worked after he/she
reaches his 60th birthday.
Any employee with one year or more seniority who
voluntarily contributes 4% or more (pre-tax) of
his/her gross wages to the plan, shall be
eligible for a 1% gross wages additional matching
contribution from the Company.
Mestek, Inc. - Bradner Effective August 1, 1991, the Company matches 25%
of the elective deferral, not to exceed 6% of
gross salary.
Mestek, Inc. - Wyalusing Effective October 1, 1995, employees hired before
October 1, 1992 receive $.45/hour for each hour
worked. Employees hired after October 1, 1992
and before October 1, 1995 receive $.20/hour for
each hour worked. Employees hired after
September 30, 1995 receive $.12/hour for each
hour worked. Employees hired after
September 30, 1995 shall not be eligible for
participation until completing their probationary
period. Upon attaining seniority status the
employee shall receive the Company=s contribution
back to the 30th day of work.
8
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Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Division Agreement
Cooper-Weymouth, Peterson -
Clinton Effective February 1, 1994, eligible employees
receive a contribution of $.21/hour prior to
February 1, 1994, $.22/hour effective
February 1, 1994, $.23/hour effective
February 1, 1995 and $.25/hour effective
February 1, 1996. Maximum hour to be paid is
40 hours per week, after 60 days of service.
Mestex, Inc. - Dallas Effective August 1, 1991, eligible employees
receive $.08/hour worked. This rate will be
adjusted as follows:
August 1, 1992 - $.10 per hour worked
August 1, 1993 -$.12 per hour worked
August 1, 1994 - $.14 per hour worked
August 1, 1995 - $.15 per hour worked
Effective January 1, 1996, eligible employees
receive a 25% matching contribution for each
dollar of voluntary contributions by the
employee, up to a limit of the first 4%
contributed by the employee.
Mestek, Inc. - Waldron Effective April 1, 1991, the Company matches 25%
of the elective deferral, not to exceed 6% of
gross salary.
Mestek, Inc. - Dundalk Effective September 1, 1991, the Company matches
25% of the elective deferral, not to exceed 6% of
gross salary.
Mestek, Inc. - Wrens Effective March 1, 1995, the Company matches 25%
of the elective deferral, not to exceed 6% of
gross salary.
Pacific Air Balance (PABI) Effective October 1, 1997, the Company matches
25% of the elective deferral, net to exceed 6%
of gross salary.
Vesting
All participant and Company contributions are 100 percent vested, except for the
Bradner, Waldron, PABI and Dundalk locations where Company contributions vest
over a seven year period.
9
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Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Investments
Upon enrollment in the Plan, participants may direct contributions to any
combination of fund options maintained by MassMutual Life Insurance Company
("MassMutual"). All funds (except for the Investment Contract), are invested in
pooled separate accounts and do not guarantee principal or rate of return.
Plan participants may change their investment election at any time through
MassMutual=s automatic record-keeping system. The following is a description of
each investment option:
The Investment Contract is invested in a group annuity contract issued by
MassMutual. This fund will receive a rate of interest set by MassMutual
annually (6.30 % for fiscal 1998). Both the principal and interest are
guaranteed by MassMutual for the duration of the contract.
The Core Equity Fund invests primarily in common stocks of large, well
established companies.
The Small Company Fund invests mainly in common stocks of small, publicly traded
companies that have some unique product, market position, or operating method
which sets them apart.
The Balanced Fund invests in a blend of three types of assets: stocks, bonds
and short-term securities (or cash).
The Intermediate Bond Fund invests mainly in investment-grade, publicly traded
bonds (debt issued by the U.S. government, agencies and companies). The bonds
mature over periods from 1 to 10 years.
Included in investment income is interest and dividends of $221,894 and realized
and unrealized gains on investments of $218,757.
Withdrawals
Participants are allowed to withdraw certain portions of their account, as
defined by the Plan, upon retirement, termination of employment, or
determination of financial hardship.
Notes Receivable from Participants
Participants are eligible to borrow up to 50% of their vested balance to a
maximum of $50,000. Loans bear interest at market rates and are repayable over a
period not to exceed five years, except if the loan is used to purchase a
residency in which the loans are repayable over a 10 year period.
10
<PAGE>
Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Payment of Benefits
Upon termination of employment, a participant with $3,500 or more in vested
benefits may receive the vested accrued benefits credited to his/her account or
may elect to continue earning tax deferred interest on the vested portion of
his/her savings account until retirement. A participant cannot, however, make
any further contributions. Any participant with less than $3,500 receives a
lump-sum cash payment.
Normal retirement date for a participant is the first day of the month following
the participant's 65th birthday. Participants are allowed to defer their
retirement date past the normal retirement date and contributions will continue
until the participant retires.
Upon retirement, if the participant is not married, the normal form of benefit
is a lump-sum cash payment. If a participant wishes he/she may elect any other
option (except for an automatic joint and survivor annuity). If the participant
is married, the normal form of benefit is an automatic joint and survivor
annuity. Other options include a life annuity with 120 stipulated monthly
payments and a full cash refund annuity.
Expenses
Administrative costs paid by the Company are not included in the accompanying
financial statements.
Forfeitures
Forfeitures are held in an interest bearing holding account by the trustee. The
Company may apply these amounts to any outstanding administrative costs due to
the trustee.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following are the significant accounting policies followed by the Plan:
Basis of Accounting
The accompanying financial statements of the Plan have been prepared using the
accrual basis of accounting.
11
<PAGE>
Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Investment Valuation
The Plan's investments are stated at fair value, except for its investment
contract which is valued at contract value (see note E).
Allocations to Participants' Accounts
Amounts contributed to the Plan by the Company are credited to each
participant's account on the last day of each valuation period. A participant
must be employed on that date to be credited for Company contributions that
period unless employment ended during the period due to retirement, disability
or death.
As of each valuation date, investment income is allocated to participant
accounts in proportion to the number of investment units held by each
participant.
The Plan is valued on a monthly basis.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions and deductions during the reporting period.
Actual results could differ from those estimates.
NOTE C - INFORMATION CERTIFIED BY TRUSTEE
Information included in the financial statements and supplemental schedules
regarding investments, interest and dividends, net appreciation in fair value of
investments and reportable transactions were derived from information supplied
by MassMutual, (the "Trustee"). The Plan administrator has received
certification from the Trustee that the information supplied is complete and
accurate.
12
<PAGE>
Mestek, Inc. Retirement Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions and to terminate the Plan
subject to the provisions of ERISA and regional collective bargaining
agreements. In the event of Plan termination, participants will become 100%
vested in their accounts.
NOTE E - INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan has an investment contract with MassMutual. MassMutual maintains the
contributions in a pooled account. The account is credited with a guaranteed
rate of return and is charged for Plan withdrawals and administrative expenses
charged by MassMutual. The contract is included in the financial statements at
contract value, which approximates fair value, as reported to the Plan by
MassMutual. Contract value represents contributions made under the contract,
plus earnings, less Plan withdrawals and administrative expenses.
NOTE F - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of contributions according to the financial
statements to Form 5500:
Participants Employer
Contributions per the financial statements $720,144 $300,847
Amounts allocated for prior year contributions receivable 48,719 21,163
Amounts allocated for current year contributions receivable (75,084) (29,120)
- -------- --------
Contributions per Form 5500 $693,779 $292,890
======= =======
NOTE G - TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated June 16, 1995, that the Plan is designed in accordance with applicable
sections of the Internal Revenue Code.
SUPPLEMENTAL SCHEDULES
<PAGE>
<TABLE>
Mestek, Inc. Retirement Savings Plan
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
EIN 25-0661650 PLAN #003
December 31, 1998
<CAPTION>
(b)Description of Investment
Including Maturity Date, Rate
(a)Identity of Issue, Borrower, of Interest, Collateral, (d)Current
Lessor, or Similar Party Par or Maturity Value (c)Cost Value
<S> <C> <C> <C>
MassMutual Life Insurance Company Core equity fund $995,581 $1,552,671
MassMutual Life Insurance Company Small company fund 173,157 177,622
MassMutual Life Insurance Company Balanced fund 131,746 166,725
MassMutual Life Insurance Company Intermediate bond fund 52,071 55,387
MassMutual Life Insurance Company Investment contract fund 4,066,100 4,066,100*
Participant Notes Notes Receivable From participants
(8.75% to 10%) 332,273
* Contract value
</TABLE>
<PAGE>
<TABLE>
Mestek, Inc. Retirement Savings Plan
LINE 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
EIN 25-06615650 PLAN #003
For the year ended December 31, 1998
<CAPTION>
(h)Current
(f)Expense Value of
(b)Description of Asset Incurred Asset on
(a)Identity of (Include Interest Rate and (c)Purchase (d)Selling (e)Lease with (g)Cost of Transaction (i)Net Gain
Party Involved Maturity in Case of a Loan) Price Price Rental Transaction Asset Date or (Loss)
- --------------- --------------------------- ---------- --------- -------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MassMutual Life Investment Contract
Insurance Company Investment Contract $1,166,220 $684,961 $5,073 $684,961 $684,961
MassMutual Life Core Equity Fund
Insurance Company Core Equity Fund 526,255 450,394 1,392 300,272 450,394 $150,122
</TABLE>
