FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE
REQUIRED)
For the fiscal year ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
Commission File No. 1-9294
__________________
IMO INDUSTRIES INC.
EMPLOYEES STOCK SAVINGS PLAN
(Full Title of the Plan)
Imo Industries Inc.
1009 Lenox Drive
Lawrenceville, NJ 08648
(Name of Issuer of the Securities Held
Pursuant to the Plan and the Address
of its Principal Executive Office)
IMO INDUSTRIES INC. EMPLOYEES STOCK SAVING PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 1994
INDEX
SIGNATURE PAGE
AUDITED FINANCIAL STATEMENTS
Report of Independent Auditors
Statements of Net Assets Available for Plan Benefits
Statements of Changes in Net Assets Available for Plan Benefits
Notes to Financial Statements
SUPPLEMENTARY INFORMATION
Assets Held for Investment
Reportable Transactions
EXHIBITS
Consent of Independent Auditors
Signatures
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Administrative Committee of the Plan
has duly caused this annual report to be signed on its behalf
by the undersigned thereunto duly authorized.
IMO INDUSTRIES INC.
EMPLOYEES STOCK SAVINGS PLAN
(Name of Plan)
/s/ Donald F. Vosburgh
Donald F. Vosburgh
Vice President, Human Resources
Imo Industries Inc.
For Administrative Committee
Date: June 28, 1995
Report of Independent Auditors
Administrative Committee of the Imo Industries Inc. Employees
Stock Savings Plan
We have audited the accompanying statements of net assets
available for plan benefits of the Imo Industries Inc.
Employees Stock Savings Plan as of December 31, 1994 and 1993
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 Plan'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.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1994
and 1993, and the changes in its net assets available for plan
benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the financial statements taken as a whole. The
accompanying supplemental schedules of assets held for
investment as of December 31, 1994, and reportable
transactions for the year then ended are presented for
purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, and are not a required
part of the financial statements. The Fund Information in the
statement of net assets available for benefits and the
statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in
net assets available for benefits of each fund. The
supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of
the financial statements and, in our opinion, are fairly
stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Princeton, NJ
May 3, 1995
<TABLE>
Imo Industries Inc.
Employees Stock Savings Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
--------------------- Year Ended December 31, 1994 ------------------------
Imo Merrill Lynch
Industries Merrill Retirement Commonwealth
Inc. Lynch Preservation Equity Total
Common Capital Trust & Fixed Return Account
Stock Fund Income Accounts Contract Total
---------- ------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENTS
- At Market Value:
Imo Industries Inc.
Common Stock (cost
of $15,814,509)
(1,146,655 shares) $14,046,526 $14,046,526
Merrill Lynch Capital
Fund (cost of
$14,335,633)
(558,879
shares) $14,363,180 14,363,180
Income Accounts
(cost approximates
market value) $45,954,833 45,954,833
Commonwealth Equity
Total Return
Account Contract
(cost of $4,561,684)
(8,955 shares) $5,155,483 5,155,483
---------- ---------- ----------- ---------- ----------
TOTAL INVESTMENTS 14,046,526 14,363,180 45,954,833 5,155,483 79,520,022
Cash and Cash
Equivalents 56,833 56,833
Accrued Interest and
Dividends Receivable 9,716 9,716
Contributions Paid
(Received)
In Advance 2,486 (841) (2,793) 2,492 1,344
Due from (to)
Other Funds 4,615 31,755 34,181 (70,551) 0
---------- ----------- ----------- ---------- -----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $14,053,627 $14,394,094 $46,052,770 $5,087,424 $79,587,915
=========== =========== =========== ========== ===========
</TABLE>
See notes to financial statements
<TABLE>
Imo Industries Inc.
Employees Stock Savings Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
--------------------- Year Ended December 31, 1993 ------------------------
Imo Merrill Lynch
Industries Merrill Retirement Commonwealth
Inc. Lynch Preservation Equity Total
Common Capital Trust & Fixed Return Account
Stock Fund Income Accounts Contract Total
---------- ------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENTS
- At Market Value:
Imo Industries Inc.
Common Stock (cost
of $18,550,006)
(1,326,673 shares) 12,271,722 12,271,722
Merrill Lynch Capital
Fund (cost of
$12,428,272)
(489,895
shares) 13,702,371 13,702,371
Income Accounts
(cost approximates
market value) $50,860,664 50,860,664
Commonwealth Equity
Total Return
Account Contract
(cost of $4,133,196)
(8,340 shares) $4,738,742 4,738,742
---------- ---------- ----------- ---------- ----------
Cash and Cash
Equivalents 236,459 236,459
Accrued Interest and
Dividends Receivable 5,225 5,225
Contributions Paid
(Received)
In Advance 1,488 (12,476) (4,695) 770 (14,913)
Due from (to)
Other Funds 46,585 521,680 (813,296) 245,031 0
---------- ----------- ----------- ---------- -----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $12,319,795 $14,211,575 $50,284,357 $4,984,543 $81,800,270
=========== =========== =========== ========== ===========
</TABLE>
See notes to financial statements
<TABLE>
Imo Industries Inc.
Employees Stock Savings Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
--------------------- Year Ended December 31, 1994 ------------------------
Imo Merrill Lynch
Industries Merrill Retirement Commonwealth
Inc. Lynch Preservation Equity Total
Common Capital Trust & Fixed Return Account
Stock Fund Income Accounts Contract Total
---------- ------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Net Investment Income:
Interest $2,943,666 $2,943,666
Dividends $1,298,995 1,298,995
------------ ------------ ------------ ------------ ----------
Total Net
Investment Income 0 1,298,995 2,943,666 0 4,242,661
Contributions:
Participants 658,998 1,542,043 2,493,902 792,723 5,487,666
Employer 0
Interfund Transfers (119,170) 536,636 (448,924) 31,458 0
Transfers from Other
Plans 15,188 31,724 52,501 32,149 131,562
----------- ------------ ------------ ------------ ----------
TOTAL ADDITIONS 555,016 3,409,398 5,041,145 856,330 9,861,889
DEDUCTIONS
Distributions to
participants:
Shares 661,908 38,126 700,034
Cash 1,815,792 1,946,634 9,272,732 820,495 13,855,653
----------- ------------ ----------- ---------- -----------
TOTAL DEDUCTIONS 2,477,700 1,984,760 9,272,732 820,495 14,555,687
----------- ------------ ----------- ---------- -----------
Net Additions
(Deductions) (1,922,684) 1,424,638 (4,231,587) 35,835 (4,693,798)
Net realized and
unrealized gain
(loss) on
investments 3,656,516 (1,242,119) 0 67,046 2,481,443
Net assets available
for plan benefits
at beginning of
year 12,319,795 14,211,575 50,284,357 4,984,543 81,800,270
----------- ------------ ----------- ---------- -----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS AT
END OF YEAR $14,053,627 $14,394,094 $46,052,770 $5,087,424 $79,587,915
=========== =========== =========== ========== ===========
</TABLE>
See notes to financial statements
<TABLE>
Imo Industries Inc.
Employees Stock Savings Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
--------------------- Year Ended December 31, 1993 ------------------------
Imo Merrill Lynch
Industries Merrill Retirement Commonwealth
Inc. Lynch Preservation Equity Total
Common Capital Trust & Fixed Return Account
Stock Fund Income Accounts Contract Total
---------- ------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Net Investment Income:
Interest $4,338 $3,453,518 $3,457,856
Dividends 0 $880,617 880,617
----------- ----------- ----------- ---------- -----------
Total Net
Investment Income 4,338 880,617 3,453,518 0 4,338,473
Contributions:
Participants 889,827 1,666,289 3,367,500 788,831 6,712,447
Employer 0
Interfund Transfers
(98,375) 1,138,083 (1,694,604) 654,896 0
Transfers from
Other Plans 5,205 5,000 34,765 5,664 50,634
----------- ----------- ----------- ---------- -----------
TOTAL ADDITIONS 800,995 3,689,989 5,161,179 1,449,391 11,101,554
DEDUCTIONS
Distributions to
participants:
Shares 551,577 319,613 871,190
Cash 814,946 1,299,852 7,867,710 577,724 10,560,232
--------- --------- --------- ------- ----------
TOTAL DEDUCTIONS 1,366,523 1,619,465 7,867,710 577,724 11,431,422
--------- --------- --------- ------- ----------
Net Additions
(Deductions) (565,528) 2,070,524 (2,706,531) 871,667 (329,868)
Net realized and
unrealized gain
(loss) on
investments 4,490,478 294,673 468,022 5,253,173
Net assets
available for
plan benefits at
beginning of
year 8,394,845 11,846,378 52,990,888 3,644,854 76,876,965
----------- ----------- ----------- ---------- -----------
NET ASSETS
AVAILABLE FOR PLAN
BENEFITS AT END
OF YEAR $12,319,795 $14,211,575 $50,284,357 $4,984,543 $81,800,270
=========== =========== =========== ========== ===========
</TABLE>
See notes to financial statements
IMO INDUSTRIES INC.
EMPLOYEES STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
NOTE A -- DESCRIPTION OF THE PLAN
The Imo Industries Inc. Employees Stock Savings Plan
(the "Plan") is an employee benefit plan in which
substantially all employees of Imo Industries Inc. and
its subsidiaries (the "Company") may participate upon
completion of three months of service. The following
employees are not eligible to participate in the Plan:
(i) employees whose employment contracts exclude them
from participation; (ii) members of a collective
bargaining unit covered by a collective bargaining
agreement that does not specifically provide for their
coverage; (iii) temporary hourly-paid employees; (iv)
employees who are employed at a division or facility
specifically excluded from participation; and (v)
employees paid on a non-United States payroll.
Under the Plan, eligible employees may contribute from 1%
to 12% of their compensation on a pre-tax basis, up to a
maximum of $9,240 for the 1994 calendar year. The
Company may provide a matching contribution of up to 75%
of the first 6% of each participant's pre-tax
contribution as determined from time to time by the
Company's Board of Directors. Effective July 1, 1992 the
Company suspended the matching contribution.
A participant's interest in his pre-tax contributions and
the Company's matching contributions is at all times 100%
vested and nonforfeitable. Distributions are made upon a
participant's death, disability or other termination of
employment; however, limited withdrawal rights in the
event of a financial hardship apply with respect to a
participant's pre-tax contributions. A participant's
right or interest under the Plan is not transferable or
assignable.
Participants may elect to have their pre-tax
contributions invested in one of the following ways in
10% increments: (i) in the Company's Common Stock; (ii)
in the Merrill Lynch Capital Fund, Inc., a mutual fund
investing in equity, debt and convertible securities;
(iii) in the Commonwealth Equity Total Return Account
Contract which matches the total return of the S&P 500
Index or (iv) the Merrill Lynch Retirement Preservation
Trust, a collective trust fund consisting principally of
guaranteed insurance contracts. The Company's matching
contributions to the Plan are to be invested in the
Company's Common Stock, and any dividends received will
be reinvested in the Company's Common Stock. On the
first day of each quarter of any plan year, participants
may change the contribution rate of any investment
option, change investment options for their future
contributions and redirect investments already in their
accounts.
The Company has the right to amend the Plan in such
manner as it may determine, provided that no such
amendment may divert any portion of the vested account,
cause the diversion of plan assets or, without
stockholder approval, increase the maximum rate of
employer contribution.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents: Cash and cash equivalents
consist of amounts temporarily invested by the Trustee in
a short-term income producing fund (Cash Fund), pending
the investment of the amounts in one of the Plan's
investment alternatives.
Accounting for Investments: The Plan's investment in the
Company's Common Stock is valued at the closing price on
the last business day of the fiscal year on the New York
Stock Exchange. The fixed income accounts and the
Merrill Lynch Retirement Preservation Trust are valued at
cost plus accrued interest which approximates market
value. Shares of the Merrill Lynch Capital Fund and the
Commonwealth Equity Total Return Account Contract are
valued at the net asset value per share reported by such
Funds.
Investment transactions are accounted for on the date the
securities are purchased or sold (trade date). The cost
of shares sold or distributed is determined on an average
cost basis. Dividend income is recorded on the ex-
dividend date and interest income is accrued as earned.
Investments in certain fixed income accounts which
exceeded 5% of net assets available for plan benefits as
of December 31, 1994 are as follows:
Description of
Identity of Investment Including
Issuer, Borrower Maturing Date, Rate
Lessor or of Interest, Par
Current
Similar Party or Maturity Value Cost Value
Transamerica Life 8.45% Group Annuity 7,730,015 7,730,015
Insurance Company Contract, Due 12/31/95
Merrill Lynch Merrill Lynch Retirement 38,185,630 38,185,630
Trust Company Preservation Trust
Expenses: All Plan administrative expenses are paid by
the Company.
Income Taxes: The Plan is qualified as a profit sharing
plan, and its related trust and custodial accounts are
exempt from federal income tax, under the Internal
Revenue Code. Participants are not subject to income tax
on employer contributions, contributions made through
salary deferrals, or income credited to their accounts
until these amounts are distributed.
NOTE C -- WITHDRAWALS PAYABLE
At December 31, 1994 and 1993, withdrawals requested but
not yet paid were:
12/31/94 12/31/93
Imo Industries Inc. Common Stock Fund $ 21,934 $ 45,284
Merrill Lynch Capital Fund 56,788 65,004
Merrill Lynch Retirement Preservation
Trust and Fixed Income Accounts 486,996 695,949
Commonwealth Equity Total Return Account
Contract 45,272 29,932
-------- --------
$610,990 $836,169
======== ========
Note D -- Subsequent Events
As a result of the sale of the Turbomachinery and Baird
AID businesses in January 1995, approximately 300
participants, or 9% of the total participants, withdrew
approximately $6.7 million from the Plan in March 1995.
In April 1995, a separate plan was established for the
participants associated with Varo, Inc., a wholly owned
subsidiary of Imo Industries Inc. The records and assets
(approximately 26% of the total) were separated from the
Imo Plan into a new account with SEI and Eagle Trust
respectively. The Varo Plan provisions and
administration are basically unchanged.
Also in April 1995, the Plan assets were transferred from
Merrill Lynch Trust Company as trustee to Eagle Trust
Company, an affiliate of SEI Corporation as part of an
upgrade program intended to increase the utilization of
the Plan by all participants. The appointment of Eagle
Trust as trustee combines the record keeping and trustee
functions with the same provider.
<TABLE>
IMO INDUSTRIES INC. EMPLOYEES STOCK SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
December 31, 1994
<CAPTION>
Description of
Investment Maturity Date,
Identity of Issuer, Borrower Rate of Interest, Par or Current
Lessor or Similar Party Maturity Value Cost Value
- ---------------------------- ------------------------ -------- -------
<S> <C> <C>
Common Stock: 1,146,655 Shares of
Imo Industries Inc.* Common Stock $15,814,509 $14,046,526
Capital Fund:
Merrill Lynch Capital Fund 558,879 Shares 14,335,633 14,363,180
Equity Index Fund:
Commonwealth Equity Total
Return Account Contract 8,955 Shares 4,561,684 5,155,483
Income Fund Acounts:
Transamerica Life 8.45% Group Annuity
Insurance Company Contract, Due 12/31/95 7,730,015 7,730,015
EBP Real Estate Fund 100 Units 136,859 39,188
Merrill Lynch Retirement
Preservation Trust 38,185,630 38,185,630
----------- -----------
Income Fund Sub-Total 46,052,504 45,954,833
----------- -----------
TOTAL $80,764,330 $79,520,022
=========== ===========
</TABLE>
*Imo Industries Inc. is sponsor to the Plan.
<TABLE>
IMO INDUSTRIES INC. EMPLOYEES STOCK SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
Year Ended December 31, 1994
<CAPTION>
Number of Purchase Selling Cost Gain
Investment Transactions Price Price Basis (Loss)
- ------------------ ------------ --------- ------- ------ ----
CATEGORY i - Individual Transactions in Excess of 5% of Plan Assets
<S> <C> <C> <C> <C> <C>
Transamerica Life
Insurance Co.
9.00% Group
Annuity Contract 4,407,036 4,407,036
Merrill Lynch
Retirement
Preservation
Trust 4,407,036
CATEGORY iii
Merrill Lynch 67 $10,291,421
Retirement
Preservation Trust
Merrill Lynch 32 $9,379,807 $9,379,807
Retirement
Preservation Trust
Merrill Lynch 80 3,872,490 1,982,191 1,927,004 55,187
Capital Fund
</TABLE>
CATEGORY i - Individual Transactions in Excess of 5% of Plan Assets
CATEGORY iii - Series of Transactions in Excess of 5% of Fair Value of Plan
Assets
NOTE: There are no reportable transactions under CATEGORY ii or iv during
the year ended December 31, 1994.
EXHIBIT 24 -- CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Forms S-8 No. 33-13362 and No. 33-41260) pertaining to the Imo Industries
Inc. Employees Stock Savings Plan and in the Registration Statement (Form
S-8 No. 33-26118) pertaining to the Imo Industries Inc. Equity Incentive Plan
for Key Employees and the Equity Incentive Plan for Outside Directors of Imo
Industries Inc. and in the Registration Statement (Form S-8 No. 33-60535)
pertaining to the Imo Industries Inc. 1995 Equity Incentive Plan for Outside
Directors and in the Registration Statement (Form s-8 No. 33-60533)
pertaining to the Imo Industries Inc. Equity Incentive Plan for Key Employees
of our report dated May 3, 1995, with respect to the financial statements and
schedules of the Imo Industries Inc. Employees Stock Savings Plan included in
the Annual Report (Form 11-K) for the year ended December 31, 1994.
/s/ Ernst & Young LLP
Princeton, New Jersey
June 28, 1995
