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, 1999
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.
Savings & Retirement 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
<PAGE>
REQUIRED INFORMATION
Page
A. Financial Statements and Schedules
Independent Auditors' Report 3
Statements of Net Assets Available for Plan
Benefits as of December 31, 1999 and 1998 4
Statements of Changes in Net Assets Available for
Plan Benefits for the Years Ended December 31, 1999 and 1998 5
Notes to Financial Statements
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.
SAVINGS & RETIREMENT PLAN
Date: June 30, 2000 /s/: Jack E. Nelson
--------------------------------------------
Jack E. Nelson
Vice President-Human Resources
Consent of Independent Certified Public Accountants
We have issued our report dated June 2, 2000, accompanying the financial
statements of Mestek, Inc. Savings and Retirement Plan contained in the annual
report on Form 11-K for the year ended December 31, 1999. We hereby consent to
the incorporation by reference of said report in the Mestek, Inc. Savings and
Retirement Plan Registration Statement on Form S-8.
GRANT THORNTON LLP
Boston, Massachusetts
June 27, 2000
Ms. Karen L. McLaughlin
Corporate Tax Manager
Mestek, Inc.
260 North Elm Street
Westfield, MA 01085
Dear Karen:
Enclosed please find two draft copies of the financial statements for the
Mestek, Inc. Savings and Retirement Plan and the Mestek, Inc. Retirement Savings
Plan for the year ended December 31, 1999.
We look forward to your comments and suggestions on the drafts.
Very truly yours,
John S. Quinn
Partner
JSQ/ab
Encs.
<PAGE>
Ms. Karen L. McLaughlin
Corporate Tax Manager
Mestek, Inc.
260 North Elm Street
Westfield, MA 01085
Dear Karen:
Enclosed please find five bound and one unbound copies of the financial
statements of the Mestek, Inc. Savings and Retirement Plan, Mestek, Inc.
Retirement Savings Plan, Mestek, Inc. Profit Sharing Plan and Mestek, Inc.
Salaried Medical Plan (VEBA) for the year ended December 31, 1999. A report
letter describing the scope of our work is included with each set of financial
statements.
Very truly yours,
/s/ JOHN S. QUINN
John S. Quinn
Partner
JSQ/do
Encs.
<PAGE>
Mestek, Inc. Savings
and Retirement Plan
Financial Statements and
Report of Independent
Certified Public Accountants
December 31, 1999
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Table of Contents
December 31, 1999
Page
Report of Independent Certified Public Accountants..........................3
Financial Statements
Statement of Net Assets Available for Benefits......................4
Statement of Changes in Net Assets Available for Benefits...........5
Notes to Financial Statements.......................................6
<PAGE>
Report of Independent Certified Public Accountants
Plan Administrator
Mestek, Inc. Savings and Retirement Plan
We have audited the accompanying statement of net assets
available for benefits of Mestek, Inc. Savings and Retirement Plan (the "Plan")
as of December 31, 1999, and the related statement of changes in net assets
available for benefits for the year then ended. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in
all material respects, the statement of net assets available for benefits of the
Plan as of December 31, 1999, and the change in the statement of net assets
available for benefits for the year then ended in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Boston, Massachusetts
June 2, 2000
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 1999
Non-
Participant Participant
Directed Directed Total
ASSETS
Investments, at fair value (note B):
MassMutual Pooled Separate Accounts
Core equity fund $7,329,287 $4,573,552 $11,902,839
Small company fund 1,062,101 3,172,120 4,234,221
Balanced fund 1,862,504 - 1,862,504
Intermediate bond fund 386,192 - 386,192
Mestek stock fund 14,983 - 14,983
Indexed equity 2,206,787 - 2,206,787
Notes receivable from participants 1,068,941 454,235 1,523,176
----------- ------------ -----------
13,930,795 8,199,907 22,130,702
Investments, at contract value
(notes B and E):
MassMutual Life Insurance Company
Investment Contract 13,055,030 7,111,065 20,166,095
---------- ---------- ----------
Total investments 26,985,825 15,310,972 42,296,797
---------- ---------- ----------
Receivables:
Participants' contributions 211,287 - 211,287
Employer's contributions 39,096 1,182,612 1,221,708
---------- ---------- ---------
Total receivables 250,383 1,182,612 1,432,995
---------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS $27,236,208 $16,493,584 $43,729,792
========== ========== ==========
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Statement of Changes in Net Assets Available for Benefits For the year ended
December 31, 1999
Non-
Participant Participant
Directed Directed Total
Additions
Additions to net assets attributed to:
Contributions:
Participants $2,618,063 - $2,618,063
Employer 460,262 1,367,767 1,828,029
Rollover 233,287 - 233,287
Investment income 785,878 310,451 1,096,329
--------- --------- ---------
Total additions 4,097,490 1,678,218 5,775,708
Deductions
Deductions from net assets attributed to:
Benefits paid to participants 1,113,703 1,271,158 2,384,861
Miscellaneous expenses 32,992 24,519 57,511
--------- --------- ---------
Total deductions 1,146,695 1,295,677 2,442,372
--------- --------- ---------
NET INCREASE 2,950,795 382,541 3,333,336
Net assets available for benefits:
Beginning of year 24,285,413 16,111,043 40,396,456
---------- ---------- ----------
End of year $27,236,208 $16,493,584 $43,729,792
========== ========== ==========
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999
NOTE A - DESCRIPTION OF PLAN
The following description of Mestek, Inc. Savings and Retirement 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 is a defined contribution profit sharing plan established for
the benefit of the employees of Mestek, Inc. ("the Company"). The Plan
has two components, a profit sharing account and a 401(k) account. The
Plan covers salaried or hourly employees not covered by a collective
bargaining agreement, who choose to participate, and who have completed
at least one year of service. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
Plan Amendment
In 1999, the Plan Administrator amended the Plan, allowing Mestek, Inc.
"Company Stock" to be included as an investment option. The term "Company
Stock" shall include shares of Mestek, Inc. common stock and other equity
securities issued by the employer that qualify as a "qualifying equity
security" as defined by ERISA. Up to 100% of the assets of the Plan (or
if less, the maximum percentage under ERISA) may be invested in "Company
Stock".
Contributions
A. 401(k) Account
Participants may elect to have up to fifteen percent of their
compensation withheld, up to the maximum allowed by the Internal
Revenue Code. The amounts withheld from compensation reduce the
amount of income reportable for income tax purposes.
Participants may elect to make nondeductible voluntary contributions
up to an additional ten percent of their gross earnings each year
within legal limits.
The Company contributes $.25 for each $1.00 deferred by participants
and deposited to the Plan. This contribution is limited to the first
6% deferred by participants, and, in total, the Company contribution
will not exceed 1.5% of an employee's annual compensation. The
Company does not match any amounts relating to nondeductible
voluntary contributions. Contributions are funded on a current basis.
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
NOTE A - DESCRIPTION OF PLAN - Continued
B. Profit Sharing Account
On an annual basis, the Company determines whether to make a Profit
Sharing contribution and how much to contribute. Currently, the
Company contributes 3% of employee gross salary for all eligible,
active employees employed on the last day of the year.
Participant Accounts
Each participant's account is credited with the participant's
contribution, the Company's contribution and allocations of plan
earnings. Plan earnings are allocated based on account balances by fund.
Vesting
Participants are immediately vested in their deferred salary
contributions and voluntary contributions plus actual earnings thereon.
Vesting in the Company contribution portion of an individual
participant's account is based on the following schedule:
Years of Service Percentage
3 20%
4 40%
5 60%
6 80%
7 or more 100%
Forfeitures
A. 401(k) Account
Forfeitures are applied first to reduce expenses related to the
administration of the Plan and then to reduce Company
contributions.
B. Profit Sharing Account
Forfeitures are reallocated among Participants in the ratio that
the compensation of each Participant bears to the total
compensation of all Participants.
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.
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
NOTE A - DESCRIPTION OF PLAN - Continued
Investments
A. 401(k) Account
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.
B. Profit Sharing Account
Assets are invested at the discretion of the Plan Trustees.
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 (6.4% for fiscal year 1999). 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.
The Indexed Equity Fund invests in stocks which will approximate, as
closely as possible, the Standard & Poor's 500 Index.
The Mestek Stock Fund is invested in the common stock of Mestek, Inc.
Included in investment income in 1999 is interest and dividends of
$1,270,533 and realized and unrealized losses on investments of $174,204.
<PAGE>
<TABLE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
Schedule of Changes in Net Assets Available for Benefits by Fund (Participant Directed)
-------------------------------------------------------------------------------------------------------------------
Notes
Investment Small Indexed Inter Mestek Receivable
Contract Core Company Balanced Equity mediate Stock From Parti-
Fund Equity Fund Fund Fund Fund Bond Fund Fund cipants Other Totals
Contributions
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participants $826,654 $817,010 $190,834 $304,719 $156,052 $105,465 $6,042 - $211,287 $2,618,063
Employer 144,263 147,690 35,841 42,807 29,680 19,473 1,412 - 39,096 460,262
Rollover 40,985 67,835 19,099 52,019 28,413 18,343 6,593 - - 233,287
Investment Income 736,266 (196,089) (4,262) (19,838) 188,905 (10,031) 363 90,564 - 785,878
--------- ---------- --------- -------- --------- -------- ------ ------- ------- -----------
Total additions 1,748,168 836,446 241,512 379,707 403,050 133,250 14,410 90,564 250,383 4,097,490
Deductions to net assets
attributed to:
Benefits paid to
participants 565,555 335,828 34,558 121,584 11,921 44,257 - - - 1,113,703
Miscellaneous expenses 27,758 3,340 553 752 178 411 - - - 32,992
--------- --------- -------- -------- --------- ------ ------ -------- ------- ---------
Total deductions 593,313 339,168 35,111 122,336 12,099 44,668 - - - 1,146,695
--------- --------- -------- -------- --------- ------ ------ -------- ------- ---------
Net increase prior to
interfund transfers 1,154,855 497,278 206,401 257,371 390,951 88,582 14,410 90,564 250,383 2,950,795
Interfund
transfers (net) 861,426 (1,675,368) (250,578) (366,943) 1,815,836 (97,795) 573 (74,001) (213,150) -
--------- --------- --------- --------- --------- ------- ------ --------- ------- ---------
NET INCREASE
(DECREASE) 2,016,281 (1,178,090) (44,177) (109,572) 2,206,787 (9,213) 14,983 16,563 37,233 2,950,795
Net assets available
for benefits:
Beginning of year 11,038,749 8,507,377 1,106,278 1,972,076 - 395,405 - 1,052,378 213,150 24,285,413
---------- --------- --------- --------- --------- ------- ------ --------- ------- ----------
End of year $13,055,030 $7,329,287 $1,062,101 $1,862,504 $2,206,787 $386,192 $14,983 $1,068,941 $250,383 $27,236,208
========== ========= ========= ========= ========= ======= ====== ========= ======= ==========
</TABLE>
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
NOTE A - DESCRIPTION OF PLAN - Continued
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.
Payment of Benefits
Upon death, disability, or termination of service, a participant (or
participant's beneficiary in the event of death) with $5,000 or more in
vested benefits may elect to receive a lump-sum distribution equal to the
participant's vested account balance, deferred annuity or for assets to
remain in the Plan. Additional options are available under the Plan upon
retirement.
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.
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).
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Expenses
Administrative costs paid for by the Company are not included in the
accompanying financial statements.
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Insurance
In prior years, participants had the ability to purchase individual life
insurance policies through the Plan and pay for the premiums with vested
benefit amounts. The Plan no longer allows for the purchase of new
policies, but existing policyholders may continue to hold and fund such a
policy. The remaining policies are allocated insurance contracts and,
accordingly, the cash surrender value of such policies has been excluded
from Plan assets.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and the disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE C - TAX STATUS
Although the Plan has received a favorable determination letter dated June
16, 1995 from the Internal Revenue Service, it has not been updated for the
latest plan amendments. However, the Plan administrator believes that the
Plan is designed and is being operated in compliance with the applicable
requirements of the IRC.
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. In the event of Plan termination,
participants will become 100% vested in their accounts.
<PAGE>
MESTEK, INC. SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements - Continued
December 31, 1999
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.
