<PAGE> 1
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, 1993
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 0-12640
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
c/o ELECTRO-TEC CORPORATION
1501 NORTH MAIN STREET
BLACKSBURG, VA 24060
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
KAYDON CORPORATION
ARBOR SHORELINE OFFICE PARK
19345 U.S. 19 NORTH
CLEARWATER, FL 34624
<PAGE> 2
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
The following documents are attached hereto as exhibits:
Page
----
Report of Independent Public Accountants A
Statement of Net Assets Available for Plan Benefits --
As of December 31, 1993 1
Statement of Net Assets Available for Plan Benefits --
As of December 31, 1992 2
Statement of Changes in Net Assets Available for Plan Benefits --
For the Year Ended December 31, 1993 3
Statement of Changes in Net Assets Available for Plan Benefits --
For the Year Ended December 31, 1992 4
Notes to Financial Statements 5-7
Schedule I - Item 27a - Schedule of Assets Held for Investment
Purposes -- As of December 31, 1993 8
Schedule II - Item 27d - Schedule of Reportable Transactions --
For the Year Ended December 31, 1993 9
Consent of Independent Public Accountants 10
Note: In accordance with the instructions to this Form 11-K, "plans subject to
the Employee Retirement Income Security Act of 1974 ("ERISA") may file
plan financial statements and schedules prepared in accordance with
the financial reporting requirements of ERISA." As the plan is subject
to the filing requirements of ERISA, the aforementioned financial
statements and schedules of the Plan have been prepared in accordance
with such requirements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Administrative Committee of this plan have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Electro-Tec Corporation Employee
Retirement Benefit Plan
Date: June 16, 1994
By: The Plan Administrative Committee
By: Lawrence J. Cawley
-------------------------------
Lawrence J. Cawley
Chairman and Chief Executive Officer
Plan Administrative Committee Chairman
<PAGE> 3
ARTHUR ANDERSEN & CO.
Report of Independent Public Accountants
To the Administrative Committee of the
Electro-Tec Corporation Employee Retirement Benefit Plan:
We have audited the accompanying statements of net assets available for plan
benefits of ELECTRO-TEC CORPORATION EMPLOYEE RETIREMENT BENEFIT PLAN as of
December 31, 1993 and 1992, and the related statements 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's management. 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 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 net assets available for benefits of the Plan as of
December 31, 1993 and 1992, and the changes in 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 the
purpose 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 audits
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 & Co.
Grand Rapids, Michigan,
May 6, 1994
-A-
<PAGE> 4
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1993
<TABLE>
<CAPTION>
Intermediate
Small Income Government Prime
Common Capital Equity Bond Obligations Obligations
Stock Fund Fund Fund Fund Fund Fund Total
---------- ------- ------ ---- ------------ ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $ 1,803 $ - $ - $ - $ - $ - $ 1,803
-------- -------- -------- -------- ---------- ---------- ----------
Investments, at current value:
Mutual Funds - 538,838 736,257 758,531 1,041,618 1,856,469 4,931,713
Kaydon Corporation common stock 123,282 - - - - - 123,282
-------- -------- -------- -------- ---------- ---------- ----------
Total Investments 123,282 538,838 736,257 758,531 1,041,618 1,856,469 5,054,995
-------- -------- -------- -------- ---------- ---------- ----------
Total Assets 125,085 538,838 736,257 758,531 1,041,618 1,856,469 5,056,798
LIABILITIES:
Accrued administrative expenses (89) (240) (294) (244) (285) (1,092) (2,244)
-------- -------- -------- -------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $124,996 $538,598 $735,963 $758,287 $1,041,333 $1,855,377 $5,054,554
======== ======== ======== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 5
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1992
<TABLE>
<CAPTION>
Intermediate
Small Income Government Prime
Common Capital Equity Bond Obligations Obligations
Stock Fund Fund Fund Fund Fund Fund Total
---------- ------- ------ ---- ------------ ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $ 1,166 $ - $ - $ - $ - $ 57,407 $ 58,573
-------- -------- -------- -------- ---------- ---------- ----------
Investments, at current value:
Mutual funds - 310,844 598,591 679,477 1,009,605 1,729,124 4,327,641
Kaydon Corporation common stock 109,288 - - - - - 109,288
-------- -------- -------- -------- ---------- ---------- ----------
Total Investments 109,288 310,844 598,591 679,477 1,009,605 1,729,124 4,436,929
-------- -------- -------- -------- ---------- ---------- ----------
Total Assets 110,454 310,844 598,591 679,477 1,009,605 1,786,531 4,495,502
LIABILITIES:
Accrued administrative expenses (246) (691) (1,332) (1,511) (2,246) (3,974) (10,000)
-------- -------- -------- -------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $110,208 $310,153 $597,259 $677,966 $1,007,359 $1,782,557 $4,485,502
======== ======== ======== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 6
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Intermediate
Small Income Government Prime
Common Capital Equity Bond Obligations Obligations
Stock Fund Fund Fund Fund Fund Fund Total
---------- ------- ------ ---- ----------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 13,510 $ 29,300 $ 38,424 $ 31,182 $ 43,147 $ 53,828 $ 209,391
Participants 21,969 46,851 57,811 44,859 61,404 77,624 310,518
-------- -------- -------- -------- ---------- ---------- ----------
35,479 76,151 96,235 76,041 104,551 131,452 519,909
-------- -------- -------- -------- ---------- ---------- ----------
Investment income:
Interest and dividends 1,857 22,119 50,901 86,138 99,076 47,920 308,011
Net appreciation (depreciation)
in current value of investments (19,455) 80,836 33,392 (19,730) (26,043) - 49,000
-------- -------- -------- -------- ---------- ---------- ----------
(17,598) 102,955 84,293 66,408 73,033 47,920 357,011
-------- -------- -------- -------- ---------- ---------- ----------
Total plan additions 17,881 179,106 180,528 142,449 177,584 179,372 876,920
Benefit payments (590) (31,417) (69,074) (45,497) (57,933) (101,724) (306,235)
Administrative expenses (193) (324) (178) 97 466 (1,501) (1,633)
Fund transfers (2,310) 81,080 27,428 (16,728) (86,143) (3,327) -
-------- -------- -------- -------- ---------- ---------- ----------
Net change in net assets
available for plan benefits 14,788 228,445 138,704 80,321 33,974 72,820 569,052
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 110,208 310,153 597,259 677,966 1,007,359 1,782,557 4,485,502
-------- -------- -------- -------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $124,996 $538,598 $735,963 $758,287 $1,041,333 $1,855,377 $5,054,554
======== ======== ======== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 7
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Intermediate
Small Income Government
Common Capital Equity Bond Obligations
Stock Fund Fund Fund Fund Fund
---------- ------- ------ ---- ------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employer $ 8,392 $ 20,260 $ 42,107 $ 42,463 $ 61,157
Participants 10,010 28,398 61,534 59,864 80,902
-------- -------- -------- -------- ----------
18,402 48,658 103,641 102,327 142,059
-------- -------- -------- -------- ----------
Investment income:
Interest and dividends 361 18,458 29,729 71,163 65,957
Net appreciation (depreciation)
in current value of investments 4,639 44,604 31,011 (13,121) 3,333
-------- -------- -------- -------- ----------
5,000 63,062 60,740 58,042 69,290
-------- -------- -------- -------- ----------
Total plan additions 23,402 111,720 164,381 160,369 211,349
Benefit payments (263) (5,261) (27,628) (50,011) (141,729)
Administrative expenses (440) (1,109) (2,212) (2,396) (3,578)
Fund and Trust transfers 87,509 204,803 462,718 570,004 941,317
-------- -------- -------- -------- ----------
Net change in net assets
available for plan benefits 110,208 310,153 597,259 677,966 1,007,359
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year - - - - -
-------- -------- -------- -------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $110,208 $310,153 $597,259 $677,966 $1,007,359
======== ======== ======== ======== ==========
<CAPTION>
Predecessor Trust
-----------------
Prime Guaranteed
Obligations Common Long-Term
Fund Stock Fund Fund Total
----------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Contributions:
Employer $ 75,459 $ - $ - $ 249,838
Participants 89,700 - - 330,408
---------- -------- ----------- -----------
165,159 - - 580,246
---------- -------- ----------- -----------
Investment income:
Interest and dividends 79,594 - 50,945 316,207
Net appreciation (depreciation)
in current value of investments - (245) - 70,221
---------- -------- ----------- -----------
79,594 (245) 50,945 386,428
---------- -------- ----------- -----------
Total plan additions 244,753 (245) 50,945 966,674
Benefit payments (518,434) (195) (837,071) (1,580,592)
Administrative expenses (7,327) - - (17,062)
Fund and Trust transfers 2,063,565 (16,770) (4,313,146) -
---------- -------- ----------- -----------
Net change in net assets
available for plan benefits 1,782,557 (17,210) (5,099,272) (630,980)
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year - 17,210 5,099,272 5,116,482
---------- -------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $1,782,557 $ - $ - $ 4,485,502
========== ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 8
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared on the accrual
basis of accounting. Investments are stated at current value based
upon their quoted market prices. Purchases and sales of investments
are recorded on a trade-date basis.
In accordance with the policy of stating investments at current market
value, net realized and unrealized appreciation and depreciation is
reflected in the statements of changes in net assets available for
plan benefits.
(2) DESCRIPTION OF THE PLAN
Electro-Tec Corporation (the "Company" or "Employer"), a wholly owned
subsidiary of Kaydon Corporation, sponsors the Electro-Tec Corporation
Employee Retirement Benefit Plan (the "Plan"), a defined contribution
plan structured as a basic 401(k) plan to satisfy the regulations of
the Employee Retirement Income Security Act of 1974 (ERISA) and the
Internal Revenue Code. During 1992, the Company replaced its former
trustee and asset manager with First of America Bank Corporation and,
accordingly, transferred all of the Plan's assets to the new trustee.
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the Plan
document for more complete information.
An employee is eligible to become a participant upon attaining age 21
and completing one year of service.
Participants may elect to make, through payroll deductions, both
tax-deferred contributions, which may not exceed 15 percent of
compensation, and after-tax voluntary contributions. The maximum
contributions for the year, which includes pre-tax, after-tax
voluntary and Company matching and discretionary contributions is 25%
of compensation less tax-deferred contributions.
-5-
<PAGE> 9
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
Under the terms of the Plan, the Company contributes to the Plan an
amount equal to the payroll deduction contribution by each participant
up to 3 percent of the participant's compensation, as defined by the
Plan, and 75 percent of each participant's contribution in excess of 3
percent of compensation, not to exceed an additional 4 percent of each
participant's compensation, as defined. In addition, the Company may,
with the approval of the Board of Directors, make discretionary
contributions to the Plan. There were no discretionary Employer
contributions in 1993 or 1992.
Individual accounts are maintained for each participant to reflect the
participant's contributions, the Company's contributions, forfeitures,
investment income and administrative expenses. Investment income is
allocated based on each participant's relative account balance within
the respective fund.
All employee contributions are fully vested and nonforfeitable. Company
matching and discretionary contributions become fully vested and
nonforfeitable either upon attainment of age 65, upon the employee's
death or disability or ratably over seven years of service, as defined
by the Plan. Forfeitures are used to reduce Employer contributions.
Beginning January 1, 1992, Plan participants may direct the investment
of their account balances in six investment options. All but the
Common Stock Fund are part of the Parkstone mutual funds. The Common
Stock Fund invests solely in Kaydon Corporation Common Stock. The
Small Capital Fund invests primarily in a diversified portfolio of
common stocks and securities convertible into common stocks of small
and medium sized companies. The Income Equity Fund invests in stocks
and securities convertible into common stock of all size companies.
The Bond Fund invests in a portfolio of medium and high-grade debt
securities with fixed maturity dates and interest rates. The
Intermediate Government Obligations Fund invests in U.S. Government
securities with remaining maturities of twelve years or less. The
Prime Obligations Fund invests primarily in short-term obligations
issued by the U.S. Government, high quality money market instruments
and corporate promissory notes.
Amounts credited to an individual participant's account are distributed
at termination of employment, generally as a lump sum or in
installments. Distributions may be deferred until the participant
reaches the age of 65 if the value of the distribution exceeds $3,500.
As described in the Plan, in certain hardship situations, participants
may withdraw a portion of their account balances while actively
employed.
-6-
<PAGE> 10
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
Although not required to do so, the Employer paid certain administrative
expenses of the Plan during 1993 and 1992. The remaining expenses were
paid for by the trustee out of the Plan assets.
Each participant is entitled to exercise voting rights attributable to
the Kaydon Corporation common shares allocated to his or her account
and is notified by the Trustee prior to the time that such rights are
to be exercised. The Trustee is not permitted to vote any share for
which instructions have not been given by a participant.
The Company has the right to terminate the Plan at any time, although it
has not expressed an intent to do so. Upon termination of the plan,
participants will become fully vested. Expenses arising from the
termination would be allocated to the participants' accounts based on
relative account balance within the respective fund.
(3) TRUST FUND
A trust fund is maintained by First of America Bank Corporation (the
"Trustee") for all purposes of the Plan, and the monies and other
assets thereof are held, administered, invested and distributed in
accordance with its terms of the Plan, as it may be amended from time
to time, for the exclusive benefit of the participants and their
beneficiaries.
(4) TAX STATUS
Although the Trust established under the Electro-Tec Corporation
Employee Retirement Benefit Plan has not applied for a determination
letter from the Internal Revenue Service (the "IRS"), the Plan sponsor
and legal counsel are of the opinion that the Plan will either be
qualified or will be retroactively amended to qualify under the
Internal Revenue Code (including the Tax Reform Act of 1986), and
therefore will be exempt from Federal income taxes. Prior to December
31, 1994, the Company intends to restate the Plan to meet the
requirements of the 1986 Act and at that time, will file for a
favorable determination letter.
The Plan administrator and the Plan's legal counsel believe that the Plan
and underlying trust is designed and operated in compliance with the
applicable requirements of the Internal Revenue Code; therefore, the
trust earnings of the Plan are exempt from Federal income taxes.
-7-
<PAGE> 11
SCHEDULE I
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
EIN: 59-1226757
PLAN NUMBER: 001
ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1993
Description of Current
Identity of Issuer Investment Cost Value
- - --------------------- -------------------------- ---------- ----------
*Kaydon Corporation Common Stock, 5,941 shares $ 137,802 $ 123,282
Mutual Funds:
First of America Parkstone Small Capital
Investment Fund, 22,813 units 409,288 538,838
Corporation
First of America Parkstone Income Equity
Investment Fund, 49,882 units 683,954 736,257
Corporation
First of America Parkstone Bond Fund,
Investment 76,311 units 796,469 758,531
Corporation
First of America Parkstone Intermediate
Investment Government Obligations
Corporation Fund, 102,521 units 1,064,712 1,041,618
First of America Parkstone Prime
Investment Obligations Fund,
Corporation 1,856,469 units 1,856,469 1,856,469
---------- ----------
$4,948,694 $5,054,995
========== ==========
* Represents party-in-interest transaction.
-8-
<PAGE> 12
SCHEDULE II
ELECTRO-TEC CORPORATION
EMPLOYEE RETIREMENT BENEFIT PLAN
EIN: 59-1226757
PLAN NUMBER: 001
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Purchases Sales
------------------------- ---------------------------------------------------------
Identity of Issuer and Number of Purchase Number of Cost of
Description of Investment Transactions Price Transactions Proceeds Asset Net Gain (Loss)
- - ------------------------- ------------ -------- ------------ -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
First of America
Investment Corporation -
Parkstone Intermediate
Government Obligations
Fund 67 $205,229 23 $157,739 $166,565 $ (8,826)
Parkstone Income Equity
Fund 72 194,284 28 91,769 83,318 8,451
Parkstone Bond Fund 69 181,481 28 86,342 103,562 (17,220)
Parkstone Prime
Obligations Fund 62 190,759 35 120,821 120,821 -
</TABLE>
NOTE: This schedule was prepared in accordance with
the regulations of the Employee Retirement
Income Security Act of 1974 to report all
transactions involving securities of the same
issue which, in the aggregate, exceed 5% of
the net assets of the Plan at the beginning of
the period.
The original cost for purchases and proceeds for
sales equalled the current market value of
such investments as of the transaction date.
The cost for assets sold equalled the original
cost of the assets.
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<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports dated May 6, 1994, included in this Form 11-K, into the Company's
previously filed Form S-8 Registration Statement file numbers 2-89399,
2-92778, 33-48762, 33-61646 and 33-61648.
/s/ Arthur Andersen & Co.
Grand Rapids, Michigan,
June 16, 1994
-10-
