<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1998
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 0-8591
------
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: Scott Technologies, Inc. 401(k) Saving Plan
for Bargaining Unit Employees
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: Scott Technologies, Inc., 5875
Landerbrook Drive, Suite 250, Mayfield Heights, Ohio 44124.
<PAGE> 2
SCOTT TECHNOLOGIES, INC.
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of the
Scott Technologies, Inc.
401(k) Savings Plan for Bargaining Unit Employees:
We have audited the accompanying statements of net assets available for plan
benefits of the Scott Technologies, Inc. 401(k) Savings Plan for Bargaining Unit
Employees (the "Plan") as of December 31, 1998 and 1997, and the related
statement of changes in net assets available for plan benefits for the year
ended December 31, 1998, as listed in the accompanying index. These financial
statements and schedules referred to below are the responsibility of the Plan's
trustees. 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 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 the
Plan's trustees, 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, 1998 and 1997 and the changes in its net assets available for
plan benefits for the year ended December 31, 1998, 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 schedule of assets held
for investment purposes (Exhibit 1) as of December 31, 1998 and schedule of
reportable transactions (Exhibit 2) for the year ended December 31, 1998, are
presented for purposes of additional analysis and are not a required part of the
basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental 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/ Arthur Andersen LLP
Cleveland, Ohio,
June 18, 1999.
<PAGE> 4
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
DECEMBER 31, 1998 AND 1997
--------------------------
INDEX
-----
Statements of Net Assets Available for Plan Benefits as of
December 31, 1998 and 1997
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1998
Notes to Financial Statements
Exhibit 1 - Item 27a--Schedule of Assets Held for Investment
Purposes as of December 31, 1998
Exhibit 2 - Item 27d--Schedule of Reportable Transactions for
the Year Ended December 31, 1998
<PAGE> 5
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
----------------------------------------------------
AS OF DECEMBER 31, 1998 AND 1997
--------------------------------
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------------------------------------------------
Chase DSI Oppenheimer PIC
Principal Bond FPA Disciplined Quest PBHG Small IVY
Preservation Fund of Crescent Value Opportunity Growth Company International
Fund America Fund Portfolio Value Fund Fund Portfolio Fund
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998
----
ASSETS:
Cash and cash
equivalents $ 6 $ 13,666 $ 38,254 $ 55,833 $ 62,929 $ 45,353 $ 31,687 $ 59,912
Investments at market
value 3,566 - - - 1,647 - - -
Employee
contribution
receivable - - - - - - - -
Notes receivable from
participants - - - - - - - -
Accrued interest
income 19 - - - - - - -
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $ 3,591 $ 13,666 $ 38,254 $ 55,833 $ 64,576 $ 45,353 $ 31,687 $ 59,912
======== ======== ======== ======== ======== ======== ======== ========
1997
----
ASSETS:
Cash and cash
equivalents $ - $ - $ - $ - $ 12 $ - $ - $ -
Investments at market
value 1,202 4,271 13,234 16,172 18,920 12,259 9,337 17,312
Accrued interest
income - 26 - - - - - 229
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $ 1,202 $ 4,297 $ 13,234 $ 16,172 $ 18,932 $ 12,259 $ 9,337 $ 17,541
======== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
Participant Directed
----------------------------------------------------------------
Scott Scott
Technologies Technologies Conservative Moderate Aggressive Non
Class A Class B Lifestyle Lifestyle Lifestyle Participant Loan
Fund Fund Fund Fund Fund Directed Fund Total
-------- -------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998
----
ASSETS:
Cash and cash
equivalents $ - $ - $ - $ - $ - $ 50 $ - $307,690
Investments at market
value 9,199 - 9,217 115,439 101,586 - - 240,654
Employee
contribution
receivable - - - - - 6,485 - 6,485
Notes receivable from
participants - - - - - - 2,576 2,576
Accrued interest
income - - - - - 32 - 51
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $ 9,199 $ - $ 9,217 $115,439 $101,586 $ 6,567 $ 2,576 $557,456
======== ======== ======== ======== ======== ======== ======== ========
1997
----
ASSETS:
Cash and cash
equivalents $ - $ - $ - $ - $ - $ - $ - $ 12
--------
Investments at market
value 1,464 1,095 2,138 36,670 28,945 - - 163,019
Accrued interest
income - - - - - - - 255
-------- -------- -------- -------- -------- -------- -------- --------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $ 1,464 $ 1,095 $ 2,138 $ 36,670 $ 28,945 $ - $ - $163,286
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE> 6
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------------------------------
Chase DSI Oppenheimer
Principal Bond FPA Disciplined Quest BHG
Preservation Fund of Crescent Value Opportunity Growth
Fund America Fund Portfolio Value Fund Fund
--------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $ 1,413 $ 6,299 $ 17,373 $ 24,979 $ 26,141 $ 18,979
Rollover - - - - 3,414 3,414
Net investment income 167 424 (510) 2,511 2,962 1,848
--------- --------- --------- --------- --------- ---------
Total additions 1,580 6,723 16,863 27,490 32,517 24,241
--------- --------- --------- --------- --------- ---------
DEDUCTIONS:
Benefits paid to participants - - - - - -
Rollovers and other - - - - - -
--------- --------- --------- --------- --------- ---------
Total deductions - - - - - -
--------- --------- --------- --------- --------- ---------
INTERFUND TRANSFERS, including
participant
loan transactions 809 2,646 8,157 12,171 13,127 8,853
RECAPITALIZATION OF
STOCK - - - - - -
--------- --------- --------- --------- --------- ---------
Net additions 2,389 9,369 25,020 39,661 45,644 33,094
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 1,202 4,297 13,234 16,172 18,932 12,259
--------- --------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 3,591 $ 13,666 $ 38,254 $ 55,833 $ 64,576 $ 45,353
========= ========= ========= ========= ========= =========
<CAPTION>
Participant Directed
--------------------------------------------------------------------------------
PIC Scott Scott
Small IVY Technologies Technologies Conservative Moderate
Company International Class A Class B Lifestyle Lifestyle
Portfolio Fund Fund Fund Fund Fund
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $ 13,043 $ 24,462 $ 2,093 $ 1,375 $ 4,676 $ 48,565
Rollover 3,414 3,414 - - - 13,498
Net investment income 1,762 3,295 992 905 356 1,627
--------- --------- --------- --------- --------- ---------
Total additions 18,219 31,171 3,085 2,280 5,032 63,690
--------- --------- --------- --------- --------- ---------
DEDUCTIONS:
Benefits paid to participants - - - - - -
Rollovers and other - - - - - -
--------- --------- --------- --------- --------- ---------
Total deductions - - - - - -
--------- --------- --------- --------- --------- ---------
INTERFUND TRANSFERS, including
participant
loan transactions 4,131 11,200 788 487 2,047 15,079
RECAPITALIZATION OF
STOCK - - 3,862 (3,862) - -
--------- --------- --------- --------- --------- ---------
Net additions 22,350 42,371 7,735 (1,095) 7,079 78,769
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 9,337 17,541 1,464 1,095 2,138 36,670
--------- --------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 31,687 $ 59,912 $ 9,199 $ - $ 9,217 $ 115,439
========= ========= ========= ========= ========= =========
<CAPTION>
Participant
Directed
-----------
Aggressive Non
Lifestyle Participant Loan
Fund Directed Fund Total
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions-
Employee $ 48,104 $ 113,983 $ - $ 351,485
Rollover 4,241 1,700 - 33,095
Net investment income 4,807 82 80 21,308
--------- --------- --------- ---------
Total additions 57,152 115,765 80 405,888
--------- --------- --------- ---------
DEDUCTIONS:
Benefits paid to participants - 1,691 - 1,691
Rollovers and other - 10,027 - 10,027
--------- --------- --------- ---------
Total deductions - 11,718 - 11,718
--------- --------- --------- ---------
INTERFUND TRANSFERS, including
participant
loan transactions 15,489 (97,480) 2,496 -
RECAPITALIZATION OF
STOCK - - - -
--------- --------- --------- ---------
Net additions 72,641 6,567 2,576 394,170
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 28,945 - - 163,286
--------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 101,586 $ 6,567 $ 2,576 $ 557,456
========= ========= ========= =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 7
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1998 AND 1997
--------------------------
1. SUMMARY OF THE PLAN:
--------------------
The Scott Technologies, Inc. 401(k) Savings Plan for Bargaining Unit Employees
(the "Plan") was established on July 1, 1997, to provide retirement benefits to
bargaining unit employees (and their beneficiaries) of certain participating
divisions and subsidiaries of Scott Technologies, Inc. (the "Company"). The Plan
is a defined contribution pension plan.
The Plan provides that the Company shall have the right to amend or terminate
the Plan at any time. Upon termination of the Plan, the assets then remaining in
the Plan shall be allocated and distributed to participants in accordance with
the terms and provisions of Section 4044 of ERISA, as amended.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The accompanying statement of net assets available for plan benefits and
statement of changes in net assets available for plan benefits are prepared on
the accrual basis of accounting.
Net appreciation (depreciation) in fair value and net realized gains (losses) on
sale of investments were calculated based on the fair value of the investments
at the beginning of the year or purchase price, if acquired in the current year.
The amounts are included in net investment income in the accompanying statement
of changes in net assets available for plan benefits.
Accounting 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 disclosure 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.
Reportable Transactions
- -----------------------
The Department of Labor defines reportable transactions as those transactions or
series of transactions which exceed 5% of beginning net assets. All transactions
which exceed the threshold are included in Exhibit 2.
Contributions
- -------------
Participants are eligible to contribute up to 15% of their salary based upon
their eligible earnings, as defined, subject to the limits of the Internal
Revenue Code. Contributions due from employees are accrued when they are
withheld. There are no employer contributions.
<PAGE> 8
-2-
Administrative Expenses
- -----------------------
All costs and expenses incurred in administering the Plan are paid by the Plan
and are included as a reduction of investment income.
Participant Directed Investments
- --------------------------------
Participants direct their contributions in 5% increments between the eight funds
and two Company stock funds. However, a participant's investment in Company
stock funds may not exceed, in aggregate, 25% of the participant's total
contribution percentage.
Participants may also choose one of three Lifestyle options in which allocations
are automatically selected for the participants. The Conservative Lifestyle
option automatically becomes the investment choice for any plan participant who
does not submit an enrollment form which includes a valid investment direction.
The Plan offers a telephone voice response system which allows participants to
change allocations and contribution percentages on a daily basis.
A portion of the Plan's assets, including Scott Technologies, Inc. stock and the
Lifestyle funds are invested in master trusts which hold the respective
investments. The Plan's assets are commingled with the assets of other Company
401(k) plans.
Net Investment Income
- ---------------------
Net investment income includes dividend and interest income earned during the
year, unrealized gains and losses, as well as net gains and losses realized by
dispositions of investments.
Retirement
- ----------
The Plan provides that the accrued benefit of a participant is nonforfeitable if
such participant is employed by the Company on or after the normal retirement
date. Each participant who ceases to be employed by the Company for any reason,
other than death, on or after the normal retirement date shall be entitled to
receive a normal retirement benefit. The normal retirement benefit is equal to
the participant's accrued benefit as of the date of the distribution.
Participant Loans
- -----------------
The Plan allows participants to take loans from their account balance. A
participant can borrow up to the lesser of 50% of their vested account balance
or $50,000. The minimum loan requested amounts is $1,000. Participants can have
one outstanding loan at a time and loans can be requested for any reason. The
interest rate is prime rate plus one percentage point. There were no outstanding
loans as of December 31, 1998.
3. DISTRIBUTIONS TO PARTICIPANTS
-----------------------------
There were no distributions due to participants who have reached retirement age,
withdrawn, or otherwise separated from the Plan at December 31, 1998 and 1997.
<PAGE> 9
-3-
4. FEDERAL INCOME TAXES:
---------------------
In the opinion of the Plan's Administrator, the Plan qualifies under Section
401(a) of the Internal Revenue Code and is, therefore, not subject to tax under
present federal income tax laws. Accordingly, income taxes have not been
provided for in the accompanying financial statements. A favorable determination
as to the Plan's tax-exempt status has not yet been received for the Plan.
5. SUBSEQUENT EVENT:
-----------------
Subsequent to December 31, 1998, all Plan assets were transferred from the
Wilmington Trust Co. to The Chicago Trust Co. Accordingly, at December 31, 1998,
many of the fund accounts held cash, as the investments were disposed of on
December 30, 1998, to facilitate the transfer of assets to the new trustee.
<PAGE> 10
-4-
EXHIBIT 1
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
AS OF DECEMBER 31, 1998
-----------------------
EMPLOYER IDENTIFICATION NUMBER: 52-1297376
------------------------------------------
PLAN NUMBER: 024
----------------
<TABLE>
<CAPTION>
Market
Identity of Issue and Description Cost Value
- ------------------------------------------------------------ --------- ----------
<S> <C> <C>
Chase Principal Preservation Fund $ 3,566 $ 3,566
Oppenheimer Quest Opportunity Value Fund 1,666 1,647
Scott Technologies, Inc. Class A Fund 7,764 9,199
Conservative Lifestyle Fund 9,066 9,217
Moderate Lifestyle Fund 116,462 115,439
Aggressive Lifestyle Fund 100,557 101,586
Loan Fund 2,576 2,576
---------- -----------
$241,657 $243,230
========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this exhibit.
<PAGE> 11
-5-
EXHIBIT 2
SCOTT TECHNOLOGIES, INC.
------------------------
401(k) SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES
-------------------------------------------------
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
---------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
EMPLOYER IDENTIFICATION NUMBER: 52-1297376
------------------------------------------
PLAN NUMBER: 024
----------------
<TABLE>
<CAPTION>
Number Purchase Selling Cost of Net Gain
Identity of Party Involved of Transactions Price Price Asset Or (Loss)
- ----------------------------------------------- --------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Employee Benefit Short-term Money Market Fund 131 $ 584,499 $ - $ 584,499 $ -
124 - 371,628 371,628 -
Bond Fund of America 67 10,744 - 10,744 -
7 - 14,698 15,010 (312)
FPA Crescent Fund 76 34,494 - 34,494 -
3 - 39,655 41,914 (2,259)
DSI Disciplined Value Portfolio 93 51,277 - 51,277 -
6 - 57,279 62,929 (5,650)
Oppenheimer Quest Opportunity Value Fund 60 47,151 - 47,151 -
3 - 63,884 64,700 (816)
PBHG Growth Fund 78 38,167 - 38,167 -
4 - 46,817 45,088 (1,729)
PIC Small Company Portfolio 62 25,659 - 25,659 -
7 - 33,399 32,037 (1,362)
IVY International Fund 60 41,125 - 41,125 -
3 - 60,252 59,103 (1,149)
Aggressive Lifestyle Fund 43 60,799 - 60,799 -
4 - 3,841 4,167 (326)
Moderate Lifestyle Fund 42 69,424 - 69,424 -
4 - 7,402 7,845 (443)
</TABLE>
The accompanying notes to financial statements
are an integral part of this exhibit.
<PAGE> 12
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.
SCOTT TECHNOLOGIES, INC. 401(k) SAVINGS
PLAN FOR BARGAINING UNIT EMPLOYEES
By: Wilmington Trust Company, Trustee
/s/ Linda Bailey
Date: June 30, 1999 -----------------------------------------------
Linda Bailey, Senior Financial Services Officer
<PAGE> 13
EXHIBIT INDEX
23.1 Consent of Arthur Andersen LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 11-K, into the Company's previously filed
Registration Statements File No. 333-38175.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
June 30, 1999.
