<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, 1996
------------------------------------------------------
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:
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS 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
<PAGE> 2
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
The following documents are attached hereto as exhibits:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants A
Statement of Net Assets Available for Plan Benefits as of
December 31, 1996 1
Statement of Net Assets Available for Plan Benefits as of
December 31, 1995 2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1996 3
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1995 4
Notes to Financial Statements 5-9
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes as of December 31, 1996 10
Schedule II - Item 27d - Schedule of Reportable Transactions 11 for the Year
Ended December 31, 1996 11
Consent of Independent Public Accountants 12-13
Restated 1995 and 1994 Financial Statements A1-A12
</TABLE>
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.
<PAGE> 3
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.
Seabee Corporation Pension and
Retirement Savings Plan
Date: June 27, 1997
By: The Plan Administrative Committee
---------------------------------
By: /s/ Lawrence J. Cawley
----------------------------------
Lawrence J. Cawley
Chairman and Chief Financial Officer
Plan Administrative Committee
<PAGE> 4
SEABEE CORPORATION
PENSION AND RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE> 5
Report of Independent Public Accountants
To the Administrative Committee of the
Seabee Corporation Pension and Retirement Savings Plan
We have audited the accompanying statement of net assets available for plan
benefits of SEABEE CORPORATION PENSION AND RETIREMENT SAVINGS PLAN as of
December 31, 1996, and the related statement of changes in net assets available
for plan benefits for the year then ended. The statement of net assets available
for plan benefits as of December 31, 1995 and the related statement of changes
in net assets available for plan benefits for the year then ended were audited
by other auditors whose report dated September 20, 1996, except for Note 8, as
to which the date is June 19, 1997, expressed an unqualified opinion on those
statements. 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 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1996, and the changes in net assets available for plan benefits for the year
then ended, in conformity with generally accepted accounting principles.
Our audit was 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 fund information in the statement of
net assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The supplemental schedules and
fund information 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
Grand Rapids, Michigan,
June 11, 1997
<PAGE> 6
SEABEE CORPORATION
PENSION AND RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Statement of Net Assets Available for Plan Benefits
as of December 31, 1996 1
Statement of Net Assets Available for Plan Benefits
as of December 31, 1995 2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1996 3
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1995 4
Notes to Financial Statements 5-9
Schedule I - Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1996 10
Schedule II - Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1996 11
</TABLE>
-(i)-
<PAGE> 7
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Warburg
CIGNA Fidelity Twentieth Pincus
CIGNA Actively INVESCO Fidelity Advisor Century Advisor CIGNA
Guaranteed Managed Total Growth and Equity Heritage Emerging International
Short-Term Fixed Income Return Income Growth Investors Growth Equity
Fund Fund Fund Fund Fund Fund Fund Fund
---------- ------------ -------- ---------- -------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $ 14,152 $ 30,906 $ 18,691 $ 17,848 $ 16,046 $ 10,209 $ 15,216 $ 10,287
---------- ---------- -------- ---------- -------- -------- -------- --------
Investments:
Mutual funds 1,904,704 1,303,956 485,777 229,567 254,661 154,806 178,503 159,671
Kaydon Corporation
common stock -- -- -- -- -- -- -- --
---------- ---------- -------- ---------- -------- -------- -------- --------
Total Investments 1,904,704 1,303,956 485,777 229,567 254,661 154,806 178,503 159,671
---------- ---------- -------- ---------- -------- -------- -------- --------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $1,918,856 $1,334,862 $504,468 $ 247,415 $270,707 $165,015 $193,719 $169,958
========== ========== ======== ========== ======== ======== ======== ========
<CAPTION>
Fidelity
Advisor
Growth Fidelity
Opportunities Magellan Stock
Fund Fund Fund Total
------------- ---------- -------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Cash $ 10,403 $ 17,816 $ 1,851 $ 163,425
---------- ---------- -------- ----------
Investments:
Mutual funds 85,674 120,014 -- 4,877,333
Kaydon Corporation
common stock -- -- 1,596 1,596
---------- ---------- -------- ----------
Total Investments 85,674 120,014 1,596 4,878,929
---------- ---------- -------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 96,077 $ 137,830 3,447 $5,042,354
========== ========== ======== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
-1-
<PAGE> 8
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Seabee Corporation
Employee Stock
Ownership Plan
------------------
<S> <C>
ASSETS:
Cash $ 187,852
----------
Investments:
Mutual funds 3,879,684
----------
Total assets 4,067,536
----------
LIABILITIES:
Accrued expenses 5,351
----------
Total liabilities 5,351
----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $4,062,185
==========
</TABLE>
The accompanying notes are an integral part of this statement.
-2-
<PAGE> 9
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Warburg
CIGNA Twentieth Pincus
CIGNA Actively Fidelity Fidelity Century Advisor
Guaranteed Managed INVESCO Growth and Advisor Heritage Emerging
Short-Term Fixed Income Total Return Income Equity Growth Investors Growth
Fund Fund Fund Fund Fund Fund Fund
----------- ------------ ------------ ---------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 40,910 $ 47,341 $ 66,350 $ 61,841 $ 52,017 $ 30,714 $ 56,743
Participants 37,327 72,061 51,029 47,299 42,660 27,472 42,046
----------- ----------- --------- --------- ----------- ----------- ---------
78,237 119,402 117,379 109,140 94,677 58,186 98,789
----------- ----------- --------- --------- ----------- ----------- ---------
Investment earnings:
Interest and dividends -- -- -- -- -- -- --
Net appreciation in current value
of investments 16,903 42,529 18,471 12,236 4,003 5,017 358
----------- ----------- --------- --------- ----------- ----------- ---------
16,903 42,529 18,471 12,236 4,003 5,017 358
----------- ----------- --------- --------- ----------- ----------- ---------
95,140 161,931 135,850 121,376 98,680 63,203 99,147
Benefit payments (315) (536,627) (1,052) (1,115) (1,453) (1,378) (1,445)
Administrative expenses (35) (467) (35) -- -- -- (46)
Fund transfers 1,824,066 1,710,025 369,705 127,154 173,480 103,190 96,063
----------- ----------- --------- --------- ----------- ----------- ---------
Change in net assets
available for plan
benefits 1,918,856 1,334,862 504,468 247,415 270,707 165,015 193,719
NET ASSETS AVAILABLE FOR
PLAN BENEFITS,
beginning of year -- -- -- -- -- -- --
----------- ----------- --------- --------- ----------- ----------- ---------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS,
end of year $ 1,918,856 $ 1,334,862 $ 504,468 $ 247,415 $ 270,707 $ 165,015 $ 193,719
=========== =========== ========= ========= =========== =========== =========
<CAPTION>
Fidelity
CIGNA Advisor Seabee
International Growth Fidelity Corporation
Equity Opportunities Magellan Stock Employee Stock
Fund Fund Fund Fund Ownership Plan Total
------------- ------------- --------- --------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employer $ 42,354 $ 34,893 $ 61,592 $ -- $ -- $ 494,755
Participants 29,851 28,025 48,479 3,447 -- 429,696
----------- ----------- --------- --------- ----------- -----------
72,205 62,918 110,071 3,447 -- 924,451
----------- ----------- --------- --------- ----------- -----------
Investment earnings:
Interest and dividends -- -- -- -- 84,268 84,268
Net appreciation in current value
of investments 2,223 6,101 6,315 -- 421,097 535,253
----------- ----------- --------- --------- ----------- -----------
2,223 6,101 6,315 -- 505,365 619,521
----------- ----------- --------- --------- ----------- -----------
74,428 69,019 116,386 3,447 505,365 1,543,972
Benefit payments (1,034) (537) (471) -- (17,641) (563,068)
Administrative expenses (127) (25) -- -- -- (735)
Fund transfers 96,691 27,620 21,915 -- (4,549,909) --
----------- ----------- --------- --------- ----------- -----------
Change in net assets
available for plan
benefits 169,958 96,077 137,830 3,447 (4,062,185) 980,169
NET ASSETS AVAILABLE FOR
PLAN BENEFITS,
beginning of year -- -- -- -- 4,062,185 4,062,185
----------- ----------- --------- --------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS,
end of year $ 169,958 $ 96,077 $ 137,830 $ 3,447 $ -- $ 5,042,354
=========== =========== ========= ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
-3-
<PAGE> 10
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Seabee Corporation
Employee Stock
Ownership Plan
------------------
<S> <C>
Contributions:
Employer $ 200,000
-----------
200,000
-----------
Investment earnings:
Interest and dividends 297,482
Net appreciation in current value of investments 1,174,719
-----------
1,472,201
-----------
1,672,201
Benefit payments (76,068)
Administrative expense (15,737)
Interest expense (10,612)
-----------
Change in net assets available for
plan benefits 1,569,784
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year 2,492,401
-----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 4,062,185
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-4-
<PAGE> 11
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
The accompanying financial statements of the Seabee Corporation Pension
and Retirement Savings Plan (the "Plan") have been prepared on the
accrual basis of accounting. The Plan is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974,
as amended. Investments are stated at current value, which is based
on the quoted market price.
Effective January 1, 1996, the Company changed trustees from First of
America Investment Corporation to CG Trust Company (a CIGNA
company). As a result, the Plan assets were transferred into funds
with comparable investment options administered by Connecticut
General Life Insurance Company (a CIGNA company).
In order to provide a variety of investment options, CIGNA has
developed alliances with other companies, including Fidelity
Investments, Warburg Pincus Funds, INVESCO Funds Group, Inc. and
Twentieth Century Investors, Inc. Plan assets are invested in a
CIGNA separate account (measured in units), which holds investments
in funds offered by these alliance companies.
The investment funds offered by CIGNA through the separate account do
not pay dividends or interest, nor do they produce realized or
unrealized gains. Rather, the plan participates in investment
earnings through an increase or decrease in the unit values of each
fund. As a result, the funds' investment earnings are reported as
net appreciation in the Statement of Changes in Net Assets Available
for Plan Benefits, except for the Stock Fund in which the
participants have a direct interest in the underlying stock.
Conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts in the Plan's financial statements. Actual results
may differ from those estimates.
(2) DESCRIPTION OF THE PLAN
As a result of the acquisition of Seabee Corporation by Kaydon in
September, 1995, the Seabee Corporation Employee Stock Ownership
Plan ceased to operate as an employee stock ownership plan, and
effective January 1, 1996, was amended and restated to become the
Seabee Corporation Pension and Retirement Savings Plan, a 401(k)
profit-sharing plan. The amended plan provides for
participant-directed investment of their accounts. Accordingly, the
Statement of Net Assets Available for Plan Benefits as of December
31, 1996, and the related Statement of Changes in Net Assets
Available for the year then ended reflect the separate presentation
of funds available to plan participants.
-5-
<PAGE> 12
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
Seabee Corporation (the "Company" or "Employer"), a wholly-owned
subsidiary of Kaydon Corporation, sponsors the Plan, a defined
contribution plan. The following brief description of the Plan is
provided for general information purposes only. Participants should
refer to the Plan document, as amended, for more complete
information.
Plan amendment - Effective February 16, 1996, the plan was amended to
include the adoption of the plan by Victor Fluid Power, Inc. which
was acquired by Kaydon Corporation on February 1, 1996.
Eligibility requirements - All employees of the Company who are 18
years of age and have completed at least 1,000 hours of service
during a one year period are eligible to participate in the Plan on
the January 1st, April 1st, July 1st and October 1st coincident with
or immediately following such one year period.
Contributions - Beginning in 1996, participants may elect to make,
through payroll deductions, tax-deferred contributions which may not
exceed 15% of compensation. The maximum contributions for the year,
which includes pre-tax, Company matching and discretionary profit
sharing contributions is 25% of compensation less tax-deferred
contributions. Under the terms of the Plan, the Company contributes
to the Plan an amount equal to 25% of the contribution by each
participant not to exceed $800. In addition, the Company may, with
the approval of the Board of Directors, make discretionary
contributions to the Plan. Discretionary employer contributions were
approximately $160,000 and $200,000 during 1996 and 1995,
respectively.
Allocation of investment earnings - Individual accounts are maintained
for each participant to reflect the participant's contributions, the
Company's contributions, forfeitures, investment earnings and
administrative expenses. Investment earnings are allocated based on
each participant's relative account balance within the respective
fund.
Vesting - All participant 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.
-6-
<PAGE> 13
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
Investment of participant accounts - Plan participants may direct the
investment of their account balances in the following 11 investment
options:
The CIGNA Guaranteed Short-Term Fund invests in a portfolio of high
quality money market instruments with a guarantee of principal
and interest, including U.S. Treasury securities, U.S. Government
securities, certificates of deposit, time deposits, repurchase
agreements, and commercial paper issued by major domestic and
foreign corporations.
The CIGNA Actively Managed Fixed Income Fund invests in a portfolio
of predominately high quality corporate and Government fixed
income securities including issues of the U.S. Government and its
Agencies, U.S. corporate bonds, Yankee bonds, mortgage-backed
securities and asset-backed securities.
The INVESCO Total Return Fund invests in a combination of equity and
fixed income securities including common stock and securities
that are convertible into common stock, issues of the U.S.
Government and its Agencies, and investment-grade corporate debt
obligations.
The Fidelity Growth and Income Fund invests in equity securities of
domestic and foreign companies including preferred stocks and
investment-grade debt instruments, and all types of foreign
securities.
The Fidelity Advisor Equity Growth Fund invests primarily in the
common and preferred stock and securities convertible into the
common stock of companies of all sizes with above-average growth
characteristics. The Fund may also invest in foreign securities.
The Twentieth Century Heritage Investors Fund invests primarily in
common stocks of small to medium-sized companies. The Fund may
also invest in the securities of foreign companies, primarily in
developed markets.
The Warburg Pincus Advisor Emerging Growth Fund invests in equity
securities of small to medium-sized domestic companies with
emerging or renewed growth potential. The Fund may also invest in
foreign securities, investment-grade debt securities, and
domestic and foreign short-term or medium-term money market
obligations.
The CIGNA International Equity Fund invests primarily in non-U.S.
stocks in European, Australian and Far East stock markets. The
Fund may also invest in U.S. and non-U.S. cash equivalents.
-7-
<PAGE> 14
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) DESCRIPTION OF THE PLAN, continued
The Fidelity Advisor Growth Opportunities Fund invests primarily in
common stocks and securities convertible into common stock. The
Fund may also invest in other securities such as preferred stocks
and bonds that may produce capital growth, and securities of
foreign companies.
The Fidelity Magellan Fund invests primarily in common stocks and
securities convertible into common stock. The Fund may invest in
securities of domestic, foreign and multinational issuers.
The Stock Fund invests solely in Kaydon Corporation Common Stock.
Payment of benefits - 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.
Administrative expenses - Although not required to do so, the Employer
paid certain administrative expenses of the Plan during 1996. The
remaining expenses were paid for out of the Plan assets by CG Trust
Company
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 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 in accordance with the Plan and the Internal
Revenue Code.
(3) TRUST FUND
A trust fund is maintained by the trustee for all purposes of the Plan;
and the monies and other assets thereof are held, administered,
invested and distributed in accordance with the terms of the Plan,
as it may be amended from time to time, for the exclusive benefit of
the participants and their beneficiaries.
-8-
<PAGE> 15
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) RELATED PARTY TRANSACTIONS
Plan investments include interests in mutual funds managed by
Connecticut General Life Insurance Company (a CIGNA company). CG
Trust Company (a CIGNA company) is the trustee as defined by the
Plan.
(5) TAX STATUS
During 1995, the Company restated the Plan to meet the requirements of
the Tax Reform Act of 1986. The Internal Revenue Service issued a
determination dated April 7, 1997, stating that the Plan was in
accordance with applicable plan design requirements as of that date.
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's legal counsel believe
that the Plan and underlying trust are currently designed and being
operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, they believe that the Plan was
qualified and the related trust was tax-exempt as of the financial
statement date.
(6) INVESTMENTS
The fair market value of investments that represent 5% or more of the
Plan's total net assets is as follows as of December 31,:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Guaranteed Short-Term Fund $1,904,704 $ --
Actively Managed Fixed Income Fund 1,303,956 --
INVESCO Total Return Fund 485,777 --
Fidelity Advisor Equity Growth Fund 254,661 --
Parkstone Bond Fund -- 1,853,659
Parkstone Equity Fund -- 1,281,241
Parkstone Small Capital Fund -- 333,448
Parkstone International Discovery Fund -- 411,336
</TABLE>
-9-
<PAGE> 16
SCHEDULE I
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
EIN: 59-3339512
PLAN NUMBER: 009
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Description of Current
Identity of Issuer Investment Cost Value
- ---------------------- ------------------------ ---------- ----------
<S> <C> <C> <C>
Mutual Funds:
*Connecticut General Life
Insurance Company CIGNA Guaranteed Short-
Term Fund, 45,731 units $1,904,704 $1,904,704
*Connecticut General Life CIGNA Actively Managed
Insurance Company Fixed Income Fund,
11,733 units 1,253,668 1,303,956
*Connecticut General Life INVESCO Total Return Fund,
Insurance Company 18,133 units 447,210 485,777
*Connecticut General Life Fidelity Growth and Income
Insurance Company Fund, 6,432 units 199,560 229,567
*Connecticut General Life Fidelity Advisor Equity
Insurance Company Growth Fund, 5,425 units 226,129 254,661
*Connecticut General Life Twentieth Century Heritage
Insurance Company Investors Fund, 10,917
units 138,500 154,806
*Connecticut General Life Warburg Pincus Advisor
Insurance Company Emerging Growth Fund,
4,861 units 160,918 178,503
*Connecticut General Life CIGNA International Equity
Insurance Company Fund, 2,443 units 145,694 159,671
*Connecticut General Life Fidelity Advisor Growth
Insurance Company Opportunities Fund,
1,835 units 68,865 85,674
*Connecticut General Life Fidelity Magellan Fund,
Insurance Company 1,205 units 94,699 120,014
---------- ----------
Common Stock: 4,639,947 4,877,333
*Kaydon Corporation Stock Fund, 34 shares 1,353 1,596
---------- ----------
$4,641,300 $4,878,929
========== ==========
</TABLE>
*Represents a party-in-interest
-10-
<PAGE> 17
SCHEDULE II
SEABEE CORPORATION PENSION
AND RETIREMENT SAVINGS PLAN
EIN: 59-3339512
PLAN NUMBER: 009
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Purchases Sales or Maturities
-------------------------- ---------------------------------------------------------
Number of Purchase Number of Cost of Net Gain
Transactions Price Transactions Proceeds Asset (Loss)
------------ ----- ------------ -------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
*Connecticut General Life Insurance
Company:
CIGNA Guaranteed Short-Term Fund 71 $1,898,473 6 $ 10,672 $ 10,672 $ --
CIGNA Actively Managed Fixed
Income Fund 67 1,884,290 11 622,863 615,423 7,440
INVESCO Total Return Fund 70 476,471 6 9,165 8,948 217
Fidelity Growth and Income Fund 72 229,014 7 11,683 11,280 403
Fidelity Advisor Equity Growth
Fund 70 261,751 9 11,093 10,860 233
Warburg Pincus Advisor Emerging
Growth Fund 72 192,026 13 13,881 14,144 (263)
*First of America Investment
Corporation:
Parkstone Bond Fund -- -- 1 1,857,239 1,879,871 (22,632)
Parkstone Equity Fund -- -- 1 1,621,681 1,314,566 307,115
Parkstone Small Capital Fund -- -- 1 439,067 374,644 64,423
Parkstone International
Discovery Fund -- -- 1 460,851 405,539 55,312
</TABLE>
*Represents a party-in-interest
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.
-11-
<PAGE> 18
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Kaydon Corporation:
As independent public accountants, we hereby consent to the
incorporation of our report, dated June 11, 1997, included in this Form 11-K,
into the Company's previously filed Form S-8 Registration Statement Number
333-15903.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Grand Rapids, Michigan
June 27, 1997
-12-
<PAGE> 19
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Kaydon Corporation:
As independent public accountants, we hereby consent to the
incorporation of our report, dated September 20, 1996, except for Note 8, as to
which the date is June 19, 1997, included in this Form 11-K, into the Company's
previously filed Form S-8 Registration Statement Number 333- 15903.
/s/ Carney, Alexander, Marold & Co.
- -----------------------------------
CARNEY, ALEXANDER, MAROLD & CO.
Waterloo, Iowa
June 27, 1997
- 13 -
<PAGE> 20
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
<PAGE> 21
CARNEY, ALEXANDER, MAROLD & CO.
Certified Public Accountants
300 KWWL BUILDING P.O. BOX 1290
WATERLOO, IOWA 50704
TEL. (319)233-3318
Independent Auditors' Report
Trustees
Seabee Corporation Employee
Stock Ownership Plan
Hampton, Iowa 50441
We have audited the accompanying statements of net assets available for
plan benefits of the Seabee Corporation Employee Stock Ownership Plan as of
December 31, 1995 and 1994, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial statements
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements 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.
As discussed in Note 8, the financial statements have been reissued to
correct an error in the manner of presentation of benefit payments. Accordingly,
the 1995 and 1994 financial statements have been restated and an adjustment has
been made to net assets available for plan benefits at January 1, 1994.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Seabee Corporation Employee Stock Ownership Plan as of December 31, 1995 and
1994, and the changes in its net assets available for plan benefits for the
years then ended in conformity with generally accepted accounting principles.
A1
<PAGE> 22
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental information
included in Schedule G- Financial Schedules (IRS Form 5500) is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements but is 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 information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Carney, Alexander, Marold & Co.
-----------------------------------
September 20, 1996, except for Note 8,
as to which the date is June 19, 1997
A2
<PAGE> 23
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Statements of Net Assets Available for Plan Benefits
As of December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 186,212 $ 150,269
Accrued interest receivable 1,640 -0-
Investment at fair value in sponsor company
common stock (Notes 2 and 3) -0- 2,615,822
Investment at fair value in mutual funds
(Notes 2 and 3) 3,879,684 -0-
---------- ----------
Total Assets $4,067,536 $2,766,091
---------- ----------
LIABILITIES
Withholding tax payable $ 5,351 $ 23,690
Plan indebtedness (Note 4) -0- 250,000
---------- ----------
Total Liabilities $ 5,351 $ 273,690
---------- ----------
Net Assets Available for Plan Benefits $4,062,185 $2,492,401
========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
A3
<PAGE> 24
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Statements of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ADDITIONS TO NET ASSETS
Investment Income:
Net unrealized appreciation (depreciation)
in fair value of investments (Note 3) $ (16,916) $ 234,802
Realized appreciation sponsor company
stock (Note 3 & 6) 1,191,635 -0-
Dividends 286,566 178,952
Interest 10,916 1,021
---------- ----------
$1,472,201 $ 414,775
---------- ----------
Contributions:
Employer $ 200,000 $ 200,000
---------- ----------
Total Additions to Net Assets $1,672,201 $ 614,775
---------- ----------
DEDUCTIONS FROM NET ASSETS:
Benefits to participants $ 76,068 $ 348,351
Administrative expense 15,737 14,120
Interest expense 10,612 7,707
---------- ----------
Total Deductions from Net Assets $ 102,417 $ 370,178
---------- ----------
Net Increase $1,569,784 $ 244,597
Net Assets Available for Plan Benefits:
Beginning of year 2,492,401 2,247,804
---------- ----------
End of year $4,062,185 $2,492,401
========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
A4
<PAGE> 25
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 1: Description of Plan
The following description of the Seabee Corporation Employee Stock
Ownership Plan provides only general information. Participants
should refer to the plan agreement for a more complete description
of the plan's provisions.
1. General. The purpose of this plan is to enable
participating employees of the Company and of any
participating affiliates to share in the growth and
prosperity of the Company and to provide participants with
an opportunity to accumulate capital for their future
economic security. The plan is designed to do this without
any deductions from participants' paychecks or without
calling upon them to invest their personal savings. A
primary purpose of the plan is to enable participants to
acquire a proprietary interest in the Company. Consequently,
employer contributions made to the trust will be primarily
invested in Company stock.
This plan, qualifies as an Employee Stock Ownership Plan, as
defined in Section 4975 (e)(7) of the Internal Revenue Code,
and is designed to qualify under Section 401 (a) of the
Internal Revenue Code. All assets acquired under this plan
as a result of employer contributions, income and other
additions to the trust will be administered, distributed,
forfeited and otherwise governed by the provisions of this
plan which is administered by the committee for the
exclusive benefit of participants in the plan and their
beneficiaries.
2. Contributions. Each year the Company contributes to the
plan an amount approved by the Board of Directors.
Participants do not contribute to the plan.
3. Participant Accounts. Each participant's account is
credited with an allocation of (a) the Company's
contribution, (b) plan earnings, and (c) forfeitures of
terminated participants' nonvested accounts. Allocations are
based on participant earnings. The benefit to which a
participant is entitled is the benefit that can be provided
from the participant's account.
4. Vesting. Vesting is based on years of qualifying service.
In 1989 and thereafter a participant is 100 percent vested
after seven years of credited service, retirement at age 65,
or qualifying disability.
A5
<PAGE> 26
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 1: Description of Plan (continued)
4. Vesting (continued)
Presented below is the vesting schedule used in 1989 and
thereafter by the plan. To qualify as a year of service, the
employee must work at least 1,000 hours in that year.
<TABLE>
<CAPTION>
Years of Service Percentage of Accounts Vested
---------------- -----------------------------
<S> <C>
Less than one year 0%
One year 0%
Two years 0%
Three years 20%
Four years 40%
Five years 60%
Six years 80%
Seven years or more 100%
</TABLE>
Below is a schedule showing the breakdown of the plan at
December 31, 1995 and at December 31, 1994.
<TABLE>
<CAPTION>
1995
----------------------------------------------
Years of Number of Value of Percent Vested
service employees accounts vested amount
------- --------- -------- ------ ------
<S> <C> <C> <C> <C>
1 96 $ 123,063 0% $ -0-
2 26 75,152 0 -0-
3 3 9,712 20 1,942
4 10 47,033 40 18,813
5 1 3,819 60 2,291
6 7 50,555 80 40,444
7 or more 130 3,306,740 100 3,306,740
Terminated
participants 12 391,625 385,147
Reserve and
suspense accounts 54,250 -0-
Adjustment cash
account 236 -0-
---- ---------- ----------
285 $4,062,185 $3,755,377
==== ========== ==========
</TABLE>
A6
<PAGE> 27
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 1: Description of Plan (continued)
4. Vesting (continued)
<TABLE>
<CAPTION>
1994
----------------------------------------------
Years of Number of Value of Percent Vested
service employees accounts vested amount
------- --------- -------- ------ ------
<S> <C> <C> <C> <C>
1 30 $ 21,745 0% $ -0-
2 4 4,821 0 -0-
3 11 21,746 20 4,349
4 2 3,116 40 1,246
5 9 28,597 60 17,158
6 23 95,360 80 76,288
7 or more 111 2,150,508 100 2,150,508
Terminated
participants 11 102,195 100,392
Reserve and
suspense accounts 64,313 -0-
--- ---------- ----------
201 $2,492,401 $2,349,941
=== ========== ==========
</TABLE>
5. Payment of Benefits. In the event of death or retirement,
a participant may receive either a lump-sum amount
equal to the value of his or her account, or installments
based on the participants life expectancy or the joint life
expectancy of the participant and his or her designated
beneficiary. In the event a participant ceases to
participate for reasons other than death or retirement and
has a plan benefit of less than $2,500, distribution shall
be in a lump-sum as soon as possible after the close of the
plan year in which the participant incurs a one-year break
in service. For participants with a plan benefit of $2,500
or more, distribution shall be in a lump-sum as soon as
possible after the close of the plan year in which the
participant incurs a five-year break in service.
Note 2: Summary of Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared using the
accrual method of accounting.
A7
<PAGE> 28
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 2: Summary of Accounting Policies (continued)
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual
results may differ from those estimates.
Investment Valuation and Income Recognition
The amounts shown in Note 3 for securities represent estimated
fair value. The investments on December 31, 1995 in mutual
funds are valued at quoted market price which represents the
net asset value of shares/units held by the plan at year-end.
The common shares of the Company on December 31, 1994 are
valued at fair value as determinant by independent appraisers.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Note 3: Investments
The plan's investments are held by the trust fund's trustees. The
following table presents the fair values of the investments at
December 31, 1995 and 1994. After the sale of company stock (Note
6), the investments are being held by a bank administered trust
fund.
A8
<PAGE> 29
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 3: Investments (continued)
Fair Value of Investments
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
------------------------- -------------------
Number of Number of
Units/Shares Fair Value Shares Fair Value
------------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Investments at Estimated
Fair Value
Common Stock
Seabee Corporation --- --- 237,802 $2,615,822
Investments at Fair Value
as Determined by Quoted
Market Price:
Mutual Funds
Parkstone Bond Fund 185,737.398 $1,853,659
Parkstone Equity Fund 70,630.703 1,281,241
Parkstone Small Capital
Fund 12,382.044 333,448
Parkstone International
Discovery Fund 32,363.146 411,336
----------
Total Investments
at Fair Value $3,879,684 $2,615,822
========== ==========
</TABLE>
A9
<PAGE> 30
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 3: Investments (continued)
During 1995 and 1994, the plan's investments had net appreciation
in value of $1,174,719 and $234,802 respectively, as follows:
Net Appreciation (Depreciation) in Fair Value
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
------------------- -------------------
<S> <C> <C>
Investments at Estimated
Fair Value
Common Stock
Seabee Corporation $1,191,635 $ 234,802
---------- ----------
Investments at Fair Value
as Determined by Quoted
Market Price:
Mutual Funds
Parkstone Bond Fund $ 51,808
Parkstone Equity Fund (33,325)
Parkstone Small Capital
Fund (41,196)
Parkstone International
Discovery Fund 5,797
$ (16,916) $ -0-
----------- ----------
$1,174,719 $ 234,802
========== ==========
</TABLE>
Note 4: Plan Indebtness
On July 25, 1994 the plan entered into a $300,000 term loan with a
bank. The plan borrowed $250,000 against this note with $100,000
used to pay off the note due September 30, 1994 and $150,000 used
to pay retirement benefits. Repayment occurs with annual
commitment stepdowns of $100,000 beginning September 30, 1995. The
loan was guaranteed by Seabee Corporation with repayment to be
made over a three year period. The loan interest rate was 1/4%
over the banks base rate. At December 31, 1994, the interest rate
was at 8-3/4%. The loan was paid in full prior to maturity on July
14, 1995.
Interest expense incurred by the plan was $10,612 for 1995 and
$7,707 for 1994.
A10
<PAGE> 31
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 5: Plan Termination
Although the Company has established the plan with the bona fide
intention and expectation that it will be able to make
contributions indefinitely, nevertheless, the Company shall not be
under any obligation or liability to continue its contributions or
to maintain the plan for any given length of time. The Company may
in its sole discretion discontinue such contributions or terminate
the plan in whole or in part in accordance with its provisions at
any time without any liability for such discontinuance or
termination. If the plan is not replaced by a comparable plan
qualified under Section 401(a) of the Internal Revenue Code, the
accounts of all participants affected by the termination, partial
termination or discontinuance of contributions will become
nonforfeitable. After termination of the plan, the Trustees and
the Trust will continue until the plan benefit of each participant
has been distributed. Plan benefits may be distributed promptly
after they are computed or distribution may be deferred as
provided in the plan, as the Trustees may direct.
Note 6: Sale of Seabee Corporation Stock
On September 15, 1995, Seabee Corporation's outstanding stock was
acquired at $16.00 per share by Kaydon Corporation. Included in
this transaction were all shares owned by the Seabee Corporation
Employee Stock Ownership Plan. The sale of company stock resulted
in realized appreciation of $1,191,635 over the estimated fair
value of the company stock at December 31, 1994. As a result of
the acquisition, the plan ceased to operate as an employee stock
ownership plan and effective January 1, 1996 the Seabee
Corporation Employee Stock Ownership Plan was amended and restated
to become a 401(k) profit-sharing plan and its name was changed to
The Seabee Corporation Pension and Retirement Savings Plan.
Note 7: Reconciliation of Financial Statements to Form 5500
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Unrealized appreciation (depreciation) of
assets per financial statements --- $ 234,802
Over accrual of withheld taxes on Form 5500 at
December 31, 1993 --- 1,900
---------
Unrealized appreciation (depreciation) of
assets per Form 5500 --- $ 236,702
=========
</TABLE>
A11
<PAGE> 32
SEABEE CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN
HAMPTON, IOWA
Notes to Financial Statements
Note 7: Reconciliation of Financial Statements to Form 5500 (continued)
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Net assets available for plan benefits per
financial statements $4,062,185 $2,492,401
Benefits payable per Form 5500 (385,147) (100,391)
Understatement of interest earned on
Form 5500 (242) ---
Understatement of administrative expense
on Form 5500 6 ---
Rounding --- 1
---------- ----------
Net assets at end of year per Form 5500 $3,676,802 $2,392,011
========== ==========
</TABLE>
Note 8: Reissue of December 31, 1995 and 1994 Financial Statements
On June 19, 1997 the financial statements were reissued to reflect
the removal of amounts allocated to the accounts of participates
who have elected to withdraw from the plan. Net assets available
for plan benefits at January 1, 1994 was increased by $366,481,
which is the amount of benefits shown as payable to retired
participants at December 31, 1993. The removal of this liability
on the statements of net assets available for plan benefits is in
conformity with generally accepted accounting principles. Benefits
paid to participants were restated to show cash payments made of
$76,068 for 1995 and $348,351 for 1994.
A12
