<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:
KAYDON CORPORATION EMPLOYEE STOCK
OWNERSHIP AND THRIFT PLAN
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
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KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT 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.
Kaydon Corporation Employee Stock
Ownership and Thrift 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 Kaydon Corporation Employee
Stock Ownership and Thrift Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the KAYDON CORPORATION EMPLOYEE STOCK OWNERSHIP AND THRIFT 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 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
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT 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 $ 28,412 $ - $ - $ - $ - $ - $ 28,412
---------- ---------- ---------- -------- -------- ---------- -----------
Investments, at current value:
Mutual funds - 1,526,215 2,083,679 785,875 996,941 1,336,149 6,728,859
Kaydon Corporation common stock 8,416,152 - - - - - 8,416,152
---------- ---------- ---------- -------- -------- ---------- -----------
Total Investments 8,416,152 1,526,215 2,083,679 785,875 996,941 1,336,149 15,145,011
---------- ---------- ---------- -------- -------- ---------- -----------
Total Assets 8,444,564 1,526,215 2,083,679 785,875 996,941 1,336,149 15,173,423
LIABILITIES:
Accrued administrative expenses (4,338) (520) (671) (325) (298) (726) (6,878)
---------- ---------- ---------- -------- -------- ---------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $8,440,226 $1,525,695 $2,083,008 $785,550 $996,643 $1,335,423 $15,166,545
========== ========== ========== ======== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 5
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT 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 $ 18,772 $ - $ - $ - $ - $ 51,967 $ 70,739
----------- -------- --------- -------- -------- ---------- -----------
Receivable for pending sales 154,586 - - - - - 154,586
----------- -------- --------- -------- -------- ---------- -----------
Investments, at current value:
Mutual funds - 790,903 1,282,895 620,075 733,137 1,664,831 5,091,841
Kaydon Corporation common stock 10,469,073 - - - - - 10,469,073
----------- -------- --------- -------- -------- ---------- -----------
Total Investments 10,469,073 790,903 1,282,895 620,075 733,137 1,664,831 15,560,914
----------- -------- --------- -------- -------- ---------- -----------
Total Assets 10,642,431 790,903 1,282,895 620,075 733,137 1,716,798 15,786,239
LIABILITIES:
Payable for pending purchases (19,376) - - - - - (19,376)
Accrued administrative expenses (11,708) (1,260) (2,042) (987) (1,167) (1,148) (18,312)
----------- -------- --------- -------- -------- ---------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $10,611,347 $789,643 $1,280,853 $619,088 $731,970 $1,715,650 $15,748,551
=========== ======== ========== ======== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 6
KAYDON CORPORATION
EMPLOYEES STOCK OWNERSHIP AND THRIFT 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>
Employee contributions $ 569,568 $ 218,422 $ 321,099 $136,449 $134,449 $ 157,698 $ 1,537,685
----------- ---------- ---------- -------- -------- ---------- -----------
Investment income:
Interest and dividends 162,334 62,598 141,485 86,538 93,334 43,285 589,574
Net appreciation (depreciation)
in current value of investments (976,682) 216,705 77,150 (23,123) (28,003) - (733,953)
----------- ---------- ---------- -------- -------- ---------- -----------
(814,348) 279,303 218,635 63,415 65,331 43,285 (144,379)
----------- ---------- ---------- -------- -------- ---------- -----------
Total plan additions (244,780) 497,725 539,734 199,864 199,780 200,983 1,393,306
Benefit payments (1,020,400) (79,939) (257,037) (89,507) (158,170) (342,723) (1,947,776)
Administrative expenses (19,266) (985) (1,490) (1,009) (985) (3,801) (27,536)
Fund transfers (886,675) 319,251 520,948 57,114 224,048 (234,686) -
----------- ---------- ---------- -------- -------- ---------- -----------
Net change in net assets
available for plan
benefits (2,171,121) 736,052 802,155 166,462 264,673 (380,227) (582,006)
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, beginning of year 10,611,347 789,643 1,280,853 619,088 731,970 1,715,650 15,748,551
----------- ---------- ---------- -------- -------- ---------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year $ 8,440,226 $1,525,695 $2,083,008 $785,550 $996,643 $1,335,423 $15,166,545
=========== ========== ========== ======== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 7
KAYDON CORPORATION
EMPLOYEES STOCK OWNERSHIP AND THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Intermediate
Small Income Government Prime
Common Capital Equity Bond Obligations Obligations Money
Stock Fund Fund Fund Fund Fund Fund Market Fund Total
----------- -------- ---------- -------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Employee contributions $ 627,520 $208,324 $ 371,744 $168,510 $171,350 $ 307,059 $ - $ 1,854,507
----------- -------- ---------- -------- -------- ---------- ----------- -----------
Investment income:
Interest and dividends 106,682 40,597 51,848 62,095 43,717 60,682 - 365,621
Net appreciation (depreciation)
in current value of investments 655,907 109,392 84,484 (13,473) 2,407 - - 838,717
----------- -------- ---------- -------- -------- ---------- ----------- -----------
762,589 149,989 136,332 48,622 46,124 60,682 - 1,204,338
----------- -------- ---------- -------- -------- ---------- ----------- -----------
Total plan additions 1,390,109 358,313 508,076 217,132 217,474 367,741 - 3,058,845
Benefit payments (954,771) (62,166) (132,205) (109,969) (42,700) (361,440) - (1,663,251)
Administrative expenses (37,162) (2,405) (4,026) (2,283) (2,511) (4,381) - (52,768)
Fund transfers (1,493,921) 495,901 909,008 514,208 559,707 1,713,730 (2,698,633) -
----------- -------- ---------- -------- -------- ---------- ----------- -----------
Net change in net assets
available for plan
benefits (1,095,745) 789,643 1,280,853 619,088 731,970 1,715,650 (2,698,633) 1,342,826
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, beginning of year 11,707,092 - - - - - 2,698,633 14,405,725
----------- -------- ---------- -------- -------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, end of year $10,611,347 $789,643 $1,280,853 $619,088 $731,970 $1,715,650 $ - $15,748,551
=========== ======== ========== ======== ======== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE> 8
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(1) ACCOUNTING AND REPORTING POLICIES
The financial statements of the Kaydon Corporation Employee Stock
Ownership and Thrift Plan (the "Plan") are presented on the accrual
basis of accounting. Investments are stated at current value, which is
the quoted market price, as reported by the trustee. 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
The following description of the major provisions of the Plan, a defined
contribution plan, is provided for general information purposes only.
Reference should be made to the Plan document, as amended, for more
complete information.
Eligibility requirements - All employees of Kaydon Corporation and
subsidiaries (the "Company" or "Employer"), excluding employees of its
Electro-Tec Corp. and foreign - based subsidiaries, who are 21 years
of age and have completed at least 500 hours of service during a
six-month period are eligible on the January 1st, April 1st, July 1st,
and October 1st coincident with or immediately following such
six-month period.
Contributions - Participants may authorize the Employer to make salary
deferral contributions on their behalf of not less than 1% nor more
than 15% of their compensation, not to exceed the limitations
established by the Internal Revenue Code. In addition, the Employer
may contribute to the Plan for each plan year an amount approved by
the Board of Directors. There were no discretionary employer
contributions in 1993 or 1992.
Investment of participant accounts - The participant 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 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 primarily
in stocks and securities convertible into common stock of all size
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<PAGE> 9
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
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 primarily
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.
Allocation of investment income/loss - Each participant's account is
adjusted for investment income or loss. Such adjustment will occur on
each valuation date, as defined in the Plan, and will be allocated to
each participant's account in proportion to the ratio that the value
of each participant's account bears to the total value of the accounts
of all participants within the respective fund as of the previous
valuation date.
Payment of benefits - Benefits are paid in the form of a lump-sum
payment via distribution of the Company's common stock, cash or a
combination thereof, as directed by the participant for those
participants who have investments in the common stock fund. Benefits
for participants in other funds are paid in cash. The payment date
generally will not be later than the 60th day following the end of the
plan year in which the participant attains age 65, retires, terminates
or dies, as applicable.
Administrative expenses - 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.
Voting rights - 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.
Plan termination - The Employer has the right under the provisions of
the Plan to terminate the Plan, although it has not expressed an
intent to do so. In the event of the termination of the Plan or in
the event of a complete discontinuance of contributions to the Plan,
each participant shall have a nonforfeitable interest in the entire
amount credited to his separate account in the trust fund and, after
providing for the payment of all debts and administrative expenses,
the amounts standing to such participants' credit shall be distributed
to such participants in accordance with the Plan and the Internal
Revenue Code.
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<PAGE> 10
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(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, as it may be amended from time to time, for
the exclusive benefit of the participants and their beneficiaries.
(4) TAX STATUS
The Plan has received a favorable determination letter from the Internal
Revenue Service (the "IRS"), dated April 9, 1990, indicating that the
Plan, as stated, qualifies for tax-exempt status. The Plan sponsor
has not yet amended the Plan to meet certain requirements of the Tax
Reform Act of 1986. 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
incorporating amendments made subsequent to April 9, 1990.
During 1991, the Company became aware of certain potential violations of
the rules governing tax exempt plans. The Company has taken various
actions during 1992 to correct these potential violations and believes
that the Plan and Trust are in compliance with the applicable laws and
regulations and therefore remain tax-exempt under the requirements of
the Internal Revenue Code.
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.
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<PAGE> 11
SCHEDULE I
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT PLAN
EIN: 13-3186040
PLAN NUMBER: 002
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1993
<TABLE>
<CAPTION>
Current
Identity of Issuer Description of Investment Cost Value
------------------ ------------------------- ----------- -----------
<S> <C> <C> <C>
*Kaydon Corporation Common Stock, 405,598 shares $ 4,766,160 $ 8,416,152
Mutual Funds:
First of America Parkstone Small Capital Fund,
Investment 64,615 units 1,195,869 1,526,215
Corporation
First of America Parkstone Income Equity Fund,
Investment 141,171 units 1,950,982 2,083,679
Corporation
First of America Parkstone Bond Fund,
Investment 79,062 units 823,336 785,875
Corporation
First of America Parkstone Intermediate
Investment Government Obligations Fund,
Corporation 98,124 units 1,016,816 996,941
First of America Parkstone Prime Obligations Fund,
Investment 1,336,149 units 1,336,149 1,336,149
Corporation
----------- -----------
$11,089,312 $15,145,011
=========== ===========
</TABLE>
* Represents a party-in-interest transaction.
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<PAGE> 12
SCHEDULE II
KAYDON CORPORATION
EMPLOYEE STOCK OWNERSHIP AND THRIFT PLAN
EIN: 13-3186040
PLAN NUMBER: 002
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Purchases Sales or Maturities
------------------------- ---------------------------------------------------------
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>
*Kaydon Corporation-
Common Stock 81 $1,203,458 71 $2,248,230 $2,477,421 $(229,191)
First of America
Investment Corporation -
Parkstone Small Capital
Fund 80 723,836 43 236,508 252,439 (15,931)
Parkstone Income Equity
Fund 85 1,159,640 51 441,406 418,769 22,637
Parkstone Intermediate
Government Obligations
Fund 77 565,271 50 283,993 291,565 (7,572)
Parkstone Prime
Obligations Fund 76 509,273 83 894,305 894,305 -
</TABLE>
* Represents party-in-interest transaction.
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
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