<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[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]
For the transition period from to
-------- --------
Commission file number
--------------------
Air & Water Technologies Corporation Thrift Plan
Air & Water Technologies Corporation Profit Sharing Plan
------------------------------------
Air & Water Technologies Corporation
U.S. Highway 22 West and Station Road
Branchburg, New Jersey 08876
(908) 685-4000
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
-------------------------------------------
[CAPTION]
<TABLE>
Air & Water Technologies Corporation Thrift Plan:
- ------------------------------------------------
<S> <C>
Report of Independent Public Accountants F-1
Statements of Net Assets Applicable to Participants'
Equity as of December 31, 1994 and 1993 F-2
Statements of Changes in Net Assets Applicable to
Participants' Equity for the Year Ended
December 31, 1994 F-3
Notes to Financial Statements F-4 - F-8
Air & Water Technologies Corporation Profit Sharing Plan:
- --------------------------------------------------------
Report of Independent Public Accountants F-9
Statements of Net Assets Applicable to Participants'
Equity as of December 31, 1994 and 1993 F-10
Statements of Changes in Net Assets Applicable to
Participants' Equity for the Year Ended
December 31, 1994 F-11
Notes to Financial Statements F-12 - F-17
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Administrative Committee of the
Air & Water Technologies Corporation
Thrift Plan:
We have audited the accompanying statements of net assets applicable
to participants' equity of the Air & Water Technologies Corporation
Thrift Plan (formerly The Research-Cottrell Thrift Plan) (the Plan) as
of December 31, 1994 and 1993, and the related statement of changes in
net assets applicable to participants' equity for the year ended
December 31, 1994. These financial statements are the responsibility
of the Plan administrator. 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 of the Plan as of
December 31, 1994 and 1993, and the changes in its net assets
applicable to participants' equity for the year ended December 31,
1994 in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The fund information in
the statement of changes in net assets applicable to participants'
equity is presented for purposes of additional analysis rather than to
present the changes in net assets applicable to participants equity of
each fund. The fund 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.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
June 15, 1995
F-1
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION THRIFT PLAN
------------------------------------------------
(formerly The Research-Cottrell Thrift Plan)
------------------------------------------
STATEMENTS OF NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY
-----------------------------------------------------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
[CAPTION]
<TABLE>
<S> <C> <C>
1994 1993
---- ----
CONTRIBUTION RECEIVABLE FROM EMPLOYER (Note 1) $122,834 $143,074
BENEFICIAL INTEREST AT FAIR VALUE IN RESEARCH-
COTTRELL MASTER TRUST, $31,514,099 and
$25,507,782 at cost in 1994 and 1993,
respectively (Notes 2 and 4) 29,536,499 28,703,087
---------- ----------
NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY $29,659,333 $28,846,161
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-2
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION THRIFT PLAN
------------------------------------------------
(formerly The Research-Cottrell Thrift Plan)
------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO
------------------------------------------------
PARTICIPANTS' EQUITY WITH FUND INFORMATION
------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
<TABLE>
<CAPTION>
Fund B
Cash Fund C
Equivalents, Air & Water
Fixed Income Technologies
Fund A And Corporation
Cash and Common Common
Equivalents Stock Stock Total
----------- ---------- ----------- -------
<S> <C> <C> <C> <C>
NET ASSETS APPLICABLE TO
PARTICIPANTS' EQUITY,
beginning of year $9,724,201 $18,382,775 $739,185 $28,846,161
---------- ----------- -------- -----------
ADDITIONS (Notes 1 and 2):
Contributions-
Employer 177,341 407,182 21,801 606,324
Employee 1,294,958 3,141,737 161,163 4,597,858
Interest and dividend
income earned on
beneficial interest in
Research-Cottrell
Master Trust 393,962 779,964 285 1,174,211
Net depreciation of
beneficial interest in
Research-Cottrell
Master Trust 0 (477,008) (456,547) (933,555)
-------- --------- --------- ---------
1,866,261 3,851,875 (273,298) 5,444,838
--------- --------- --------- ---------
DEDUCTIONS:
Distributions to
participants (1,568,594) (2,829,108) (111,521) (4,509,223)
Administrative expenses (17,161) (102,114) (3,168) (122,443)
--------- --------- --------- ---------
(1,585,775) (2,931,222) (114,689) (4,631,666)
--------- --------- --------- ---------
TRANSFERS BETWEEN FUNDS (398,640) 403,707 (5,067) 0
--------- --------- --------- ---------
NET ASSETS APPLICABLE TO
PARTICIPANTS' EQUITY,
end of year $9,606,067 $19,707,135 $346,131 $29,659,333
========== =========== ======== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of
this statement.
F-3
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION THRIFT PLAN
------------------------------------------------
(formerly The Research-Cottrell Thrift Plan)
------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) PLAN DESCRIPTION:
----------------
General-
-------
The Air & Water Technologies Corporation Thrift Plan (formerly
The Research-Cottrell Thrift Plan) (the Plan) is a defined
contribution plan for which contributions are made by Air & Water
Technologies Corporation (the Company and Plan Sponsor) and
participants. All eligible employees of Air & Water Technologies
Corporation and its subsidiaries may elect to participate in the
Plan. The Board of Directors of the Company have appointed an
administrative committee to manage and administer the Plan.
Contributions-
-------------
Employer-
--------
The Company contributes to the Plan on a discretionary basis,
an amount equal to 25% of the participants' contributions up to
a maximum of 4% of the employees' base salary for a calendar
quarter. Company contributions for the applicable quarter are
paid to the Plan trust by the end of the following quarter.
Any amounts forfeited by terminated participants are applied to
reduce employer contributions. Forfeitures amounted to
approximately $93,000 in 1994.
Employee-
--------
Participants may contribute up to a maximum of 10% of their
compensation, as defined, to the Plan. Such contributions to
the Plan are made through payroll deductions and are invested,
along with employer contributions, in the Research-Cottrell
Master Trust.
Eligibility and Vesting-
-----------------------
All employees are eligible to participate in the Plan on any
January 1 or July 1 following their date of employment provided
that they have completed one full year of service. Employees are
immediately vested in their voluntary contributions plus actual
earnings thereon. Vesting in the remainder of their accounts is
based on years of continuous service as follows-
[CAPTION]
<TABLE>
Years of Service Vesting Percentage
----------------- ------------------
<C> <C>
1 10%
2 20%
3 30%
4 40%
5 60%
6 80%
7 or more 100%
F-4
Withdrawals-
-----------
Participants may withdraw funds from their respective account
balances if any of the following events should occur -
1. Attainment of age 59-1/2
2. Termination of employment
3. Death
4. Total disability
5. Retirement
6. An event of financial hardship, as defined
Participants are required to begin receiving benefits under the
Plan by the April 1 following the calendar year in which the
participant attains age 70-1/2 even if not yet retired.
Upon termination of employment prior to eligibility for
retirement, a participant is eligible to receive the vested
balance in his account. Payments due to participants who have
requested to withdraw their funds prior to December 31, 1994
and 1993 total approximately $1,250,000 and $1,217,000,
respectively.
Retirement-
----------
A participant's normal retirement date is the first day of the
month coincident with or following the attainment of age 65.
Participant Loans-
-----------------
A participant, while in active employment, may request a loan
from the Plan. The amount of the loan cannot exceed the lesser
of $50,000 or one-half of the value of the participant's
nonforfeitable accrued benefit. No loans were outstanding as of
December 31, 1994 and 1993.
(2) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
--------------------
Valuation of Investments-
------------------------
Effective April 3, 1984, the Company established the Research-
Cottrell Master Trust (Master Trust). The Master Trust is
maintained by Chemical Bank. The Master Trust provides
participants with three investment options. Amounts contributed
to Fund A are invested in cash equivalents. Amounts contributed
to Fund B are invested in cash equivalents, fixed income
securities and common stocks. Due to the change in trustees of
the Plan from Chemical Bank to Fidelity Institutional Retirement
Services Company in January 1995 (see Note 5), Fund B converted
its investments in fixed income securities and common stock to
cash equivalents during December 1994. Amounts contributed to
Fund C are invested primarily in Air & Water Technologies
Corporation (AWT) Class A Common Stock. The remainder of the
funds are invested in cash equivalents. The Plan has a
beneficial interest, along with another employee benefit plan of
the Company in the Master Trust (Note 4). Administrative
expenses of the Plan are paid from the assets of the Plan.
F-5
<PAGE>
Investments in Fund A are valued at cost, which approximates
market. Investments in Funds B and C are traded on national
securities exchanges and are valued at the last reported sales
price on the last business day of the plan year.
Security Transactions
and Investment Income-
---------------------
Purchases and sales of securities are reported on a trade date
basis. Gains or losses on sales of securities are based on
average cost. Dividend income is recorded on the record date and
interest income on an accrual basis.
Tax Status-
----------
The Plan obtained its latest determination letter on October 11,
1985, in which the Internal Revenue Service stated that the Plan,
as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter. However, the
plan administrator and the Plan's tax counsel believe that the
Plan is 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 December 31, 1994 and 1993.
Allocations to
Participants' Accounts-
----------------------
Earned income on investments of the Plan is allocated to the
participants' individual accounts quarterly in the ratio that the
value of each individual's account bears to the aggregate value
of all participants' accounts at the beginning of each quarter.
(3) TERMINATION PRIORITIES:
----------------------
The Company has the right to terminate the Plan at any time and in
the event the Plan is terminated, subject to conditions set forth
by Employee Retirement Income Security Act of 1974, the amount of
each participant's account balance in the Plan becomes fully
vested. The Company has not expressed any intention to terminate
the Plan.
(4) BENEFICIAL INTEREST
IN THE MASTER TRUST:
-------------------
The Plan's beneficial interest in the current market value of the
assets of the Master Trust is based on its pro rata share of such
assets. Investment income and realized and unrealized gains and
losses of the Master Trust are allocated to the Plan quarterly,
based on the Plan's pro rata share of the market value of the
assets held as of the end of the prior quarter. The Plan's share
of the market value of the investments listed below is 58.4% and
55% at December 31, 1994 and 1993, respectively. Investments held
by the Master Trust at December 31, 1994 and 1993 are summarized
as follows (in thousands)-
F-6
<PAGE>
<CAPTION>
</TABLE>
<TABLE>
1994 1993
--------------- ------------------
Market Market
Value Cost Value Cost
------- ------ ------- -------
<S> <C> <C> <C> <C>
Cash equivalents and accrued
income $50,092 $50,029 $22,112 $22,100
U. S. Government securities 0 0 7,622 6,658
Corporate and foreign bonds 0 0 3,906 3,575
Common stocks 446 1,260 18,568 12,106
------- ------- ------ -------
Total $50,538 $51,352 $52,208 $44,439
</TABLE>
As of December 31, 1994 and 1993, the Master Trust held 69,094 and
64,276 shares of AWT common stock, respectively, with a market
value of $414,564 and $964,140, respectively, ($1,225,596 and
$1,208,552, respectively, at cost). During 1994, the Master Trust
purchased 7,258 shares of AWT common stock at a cost of $62,914
and sold 2,440 shares of AWT common stock at a price of $21,001,
resulting in a realized loss of $23,504.
(5) SUBSEQUENT EVENTS:
-----------------
Effective January 1, 1995, the Master Trust changed the trustee from
Chemical Bank to Fidelity Institutional Retirement Services Company
(Fidelity). Accordingly, during January 1995, all funds held by
Chemical Bank were transferred to Fidelity. The funds available for
investment by participants are as follows-
Fidelity Retirement Money Market Portfolio-
------------------------------------------
A fund investing in high-quality money market instruments of U.
S. and foreign issuers, including short-term corporate
obligations, U. S. Government obligations and certificates of
deposit.
Fidelity Intermediate Bond Fund-
-------------------------------
A bond fund investing in all types of bonds, including
corporate and U. S. Government issues with intermediate
maturities.
Fidelity Balanced Fund-
----------------------
A growth and income fund investing in a broad array of high-
yielding securities, including foreign and domestic bonds and
common and preferred stocks.
Fidelity U. S. Equity Index Portfolio-
-------------------------------------
A fund which strives to match the total return of the Standard
& Poor's Composite Stock Price Index (the S&P 500). The
portfolio invests mostly in the 500 companies that make up the
S&P 500, which are spread across a variety of industries.
F-7
<PAGE>
Fidelity Growth & Income Portfolio-
----------------------------------
A growth and income fund investing primarily in stocks that pay
income greater than the average income of stocks in the S&P
500.
Fidelity Magellan Fund-
----------------------
A growth mutual fund investing in common and preferred stocks
of all types of companies from the U. S. and abroad.
Fidelity Blue Chips Growth Fund-
-------------------------------
A growth mutual fund investing in common stocks of well-known,
established growth companies.
Fidelity International Growth & Income Fund-
-------------------------------------------
A growth and income fund investing primarily in stocks and debt
securities of companies outside of the U. S.
AWT Stock Fund-
--------------
A fund investing primarily in Air & Water Technologies
Corporation Class A common stock.
On January 1, 1995, the Plan Sponsor approved, pending Internal
Revenue Service approval, the merger of the Plan with the Air &
Water Technologies Corporation Profit Sharing Plan. Once the
merger is completed, the new plan will be known as the Air & Water
Technologies Corporation Savings and Retirement Plan.
F-8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Administrative Committee of the
Air & Water Technologies Corporation
Profit Sharing Plan:
We have audited the accompanying statements of net assets
applicable to participants' equity of the Air & Water
Technologies Corporation Profit Sharing Plan (formerly
Research-Cottrell, Inc. Corporate Division Profit Sharing
Plan) (the Plan) as of December 31, 1994 and 1993, and the
related statement of changes in net assets applicable to
participants' equity for the year ended December 31, 1994.
These financial statements are the responsibility of the
Plan administrator. 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 of
the Plan as of December 31, 1994 and 1993, and the changes
in its net assets applicable to participants' equity for
the year ended December 31, 1994 in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The fund information in the statement of changes in net
assets applicable to participants' equity is presented for
purposes of additional analysis rather than to present the
changes in net assets applicable to participants equity of
each fund. The fund 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.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
June 15, 1995
F-9
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION PROFIT SHARING PLAN
--------------------------------------------------------
(formerly Research-Cottrell, Inc. Corporate Division Profit Sharing Plan
-----------------------------------------------------------------------
STATEMENTS OF NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY
-----------------------------------------------------------
AS OF DECEMBER 31, 1994 AND 1993
--------------------------------
[CAPTION]
<TABLE>
<S> <C> <C>
1994 1993
--------- --------
BENEFICIAL INTEREST AT FAIR VALUE IN RESEARCH-
COTTRELL MASTER TRUST, $19,838,387 and
$18,931,146 at cost in 1994 and 1993,
respectively (Notes 2 and 4) $21,001,626 $23,505,155
----------- -----------
NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY $21,001,626 $23,505,155
=========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-10
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION PROFIT SHARING PLAN
--------------------------------------------------------
(formerly Research-Cottrell, Inc. Corporate Division Profit Sharing Plan)
-----------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO
------------------------------------------------
PARTICIPANTS' EQUITY WITH FUND INFORMATION
------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
[CAPTION]
<TABLE>
Fund B
Cash Fund C
Eqivalents, Air & Water
Fund A Fixed Income Technologies
Cash and Corporation
and Cash Common Common
Equivalents Stock Stock Total
----------- ------------ ------------ --------
<S> <C> <C> <C> <C>
NET ASSETS APPLICABLE TO
PARTICIPANTS' EQUITY,
beginning of year $8,422,997 $14,845,536 $236,622 $23,505,155
ADDITIONS (Notes 1 and 2):
Contributions-
Employer 224,300 225,000 13,400 462,700
Employee rollover
contributions 0 14,556 3,076 17,632
Interest and dividend
income earned on beneficial
interest in Research-Cottrell
Master Trust 322,757 577,089 77 899,923
Net depreciation of
beneficial interest in
Research-Cottrell
Master Trust 0 (332,919) (133,733) (466,652)
--------- --------- --------- ---------
547,057 483,726 (117,180) 913,603
--------- --------- --------- ---------
DEDUCTIONS:
Distributions to
participants (1,181,038) (2,122,775) (25,302) (3,329,115)
Administrative expenses (13,799) (73,397) (821) (88,017)
--------- --------- --------- ---------
(1,194,837) (2,196,172) (26,123) (3,417,132)
--------- --------- --------- ---------
TRANSFERS BETWEEN FUNDS (334,285) 336,406 (2,121) 0
--------- --------- --------- ---------
NET ASSETS APPLICABLE TO
PARTICIPANTS' EQUITY,
end of year $7,440,932 $13,469,496 $91,198 $21,001,626
========= ========= ========= =========
</TABLE>
The accompanying notes to financial statements are an
integral part of this statement.
F-11
<PAGE>
AIR & WATER TECHNOLOGIES CORPORATION PROFIT SHARING PLAN
--------------------------------------------------------
(formerly Research-Cottrell, Inc. Corporate Division Profit Sharing Plan)
-----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) PLAN DESCRIPTION:
----------------
General-
-------
The Air & Water Technologies Corporation Profit
Sharing Plan (formerly Research-Cottrell, Inc.
Corporate Division Profit Sharing Plan) (the Plan) is
a defined contribution plan for which contributions
are made by Air & Water Technologies Corporation (the
Company and Plan Sponsor). All eligible employees of
Air & Water Technologies Corporation and its
subsidiaries participate in the Plan. The Board of
Directors of the Company have appointed an
administrative committee to manage and administer the
Plan.
Effective December 31, 1991, the Company merged the
Research Cottrell, Inc. Air Pollution Control Division
Profit Sharing Plan, the Custodis Cottrell, Inc.
Profit Sharing Plan, the Research Cottrell, Inc.
Environmental Engineering Profit Sharing Plan, the
Flex Kleen Corporation Profit Sharing Plan, the KVB,
Inc. Profit Sharing Plan and the Power Application &
Mfg. Co. Profit Sharing Plan into the Research
Cottrell, Inc. Corporate Division Profit Sharing Plan.
All terms and policies of the plans were identical.
Contributions-
-------------
Employer-
--------
Each year the Company may contribute to the Plan a
portion of its current or accumulated net income as
authorized by the Board of Directors. Employer
contributions amounting to approximately $462,700
were made during 1994.
Employee-
--------
Through December 31, 1991, participants could
contribute up to a maximum of 10% of their
compensation, as defined in the Plan. Contributions
were made to the Plan through payroll deductions and
were invested in the Research-Cottrell Master Trust.
During 1992, the Plan was amended and employee
contributions were discontinued.
F-12
<PAGE>
Eligibility and Vesting-
-----------------------
All employees are eligible to participate in the Plan
on any January 1 or July 1 following their date of
employment provided that they have completed one full
year of service. Employees are immediately vested in
their voluntary contributions plus actual earnings
thereon. Vesting in the remainder of their accounts
is based on years of continuous service as follows-
Years
of Vesting
Service Percentage
------- ----------
[CAPTION]
<TABLE>
<C> <C>
1 10%
2 20%
3 30%
4 40%
5 60%
6 80%
7 or more 100%
</TABLE>
Withdrawals-
-----------
Participants may withdraw funds from their respective
account balances if any of the following events should
occur-
[CAPTION]
<TABLE>
<C> <S>
1. Attainment of age 59-1/2
2. Termination of employment
3. Death
4. Total disability
5. Retirement
</TABLE>
Participants are required to begin receiving benefits
under the Plan by the April 1 following the calendar
year in which the participant attains age 70-1/2 even
if not yet retired.
Upon termination of employment prior to eligibility
for retirement, a participant is eligible to receive
the vested balance in his account. Payments due to
participants who have requested to withdraw their
funds prior to December 31, 1994 and 1993 total
approximately $1,280,000 and $1,005,000, respectively.
Retirement
----------
A participant's normal retirement date is the first
day of the month coincident with or following the
attainment of age 65.
F-13
<PAGE>
(2) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
--------------------
Valuation of Investments-
------------------------
Effective April 3, 1984, the Company established the
Research-Cottrell Master Trust (Master Trust). The
Master Trust is maintained by Chemical Bank. The
Master Trust provides participants with three
investment options. Amounts contributed to Fund A
are invested in cash equivalents. Amounts
contributed to Fund B are invested in cash
equivalents, fixed income securities and common
stocks. Due to the change in trustees of the Plan
from Chemical Bank to Fidelity Institutional
Retirement Services Company in January 1995 (see Note
5), Fund B converted its investments in fixed income
securities and common stocks to cash equivalents
during December 1994. Amounts contributed to Fund C
are invested primarily in Air & Water Technologies
Corporation (AWT) Class A Common Stock. The
remainder of the funds are invested in cash
equivalents. The Plan has a beneficial interest,
along with another employee benefit plan of the
Company in the Master Trust (Note 4). Administrative
expenses of the Plan are paid from the assets of the
Plan.
Investments in Fund A are valued at cost, which
approximates market. Investments in Funds B and C are
traded on national securities exchanges and are
valued at the last reported sales price on the last
business day of the year.
Security Transactions and
Investment Income-
------------------
Purchases and sales of securities are reported on a
trade date basis. Gains or losses on sales of
securities are based on average cost. Dividend
income is recorded on the record date and interest
income on an accrual basis.
Tax Status-
----------
The Plan obtained its latest determination letter on
August 9, 1985, in which the Internal Revenue Service
stated that the Plan, as then designed, was in
compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended
since receiving the determination letter. However,
the plan administrator and the Plan's tax counsel
believe that the Plan is 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 December
31, 1994 and 1993.
Allocations to Participants' Accounts-
-------------------------------------
Employer Contributions-
----------------------
The amount contributed by the Company is allocated to each
participant at the end of each plan year in the ratio in
which compensation, as defined, of each participant bears
to the aggregate compensation of all participants.
Employer contributions amounting to approximately $462,700
were made during 1994.
F-14
<PAGE>
Income From Investments-
-----------------------
Earned income on investments of the Plan is
allocated to the participants' individual accounts
quarterly in the ratio that the value of each
individual's account bears to the aggregate value of
all participants' accounts at the beginning of each
quarter.
Forfeitures-
------------
Participants who terminate before becoming fully
vested forfeit that portion of their account to
which they are not entitled. Forfeitures are
annually allocated among all continuing
participants. Forfeitures amounted to approximately
$52,900 in 1994.
(3) TERMINATION PRIORITIES:
----------------------
The Company has the right to terminate the Plan at any
time and in the event the Plan is terminated, subject to
conditions set forth by Employee Retirement Income
Security Act of 1974, the amount of each participant's
account balance in the Plan becomes fully vested. The
Company has not expressed any intention to terminate the
Plan.
(4) BENEFICIAL INTEREST
IN THE MASTER TRUST:
-------------------
The Plan's beneficial interest in the current market
value of the assets of the Master Trust is based on its
pro rata share of such assets. Investment income and
realized and unrealized gains and losses of the Master
Trust are allocated to the Plan quarterly, based on the
Plan's pro rata share of the market value of the assets
held as of the end of the prior quarter. The Plan's
share of the market value of the investments listed
below is 41.6% and 45% at December 31, 1994 and 1993,
respectively. Investments held by the Master Trust at
December 31, 1994 and 1993 are summarized as follows (in
thousands)-
[CAPTION]
<TABLE>
1994 1993
------------------ ----------------
Market Market
Value Cost Value Cost
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cash equivalents and accrued
income $50,092 $50,092 $22,112 $22,100
U. S. Government securities 0 0 7,622 6,658
Corporate and foreign bonds 0 0 3,906 3,575
Common stocks 446 1,260 18,568 12,106
------- ------- ------- -------
Total $50,538 $51,352 $52,208 $44,439
======= ======= ======= =======
</TABLE>
As of December 31, 1994 and 1993, the Master Trust held
69,094 and 64,276 shares of AWT common stock,
respectively, with a market value of $414,564 and
$964,140, respectively, ($1,225,596 and $1,208,552,
respectively, at cost). During 1994, the Master Trust
purchased 7,258 shares of AWT common stock at a cost of
$62,914 and sold 2,440 shares of AWT common stock at a
price of $21,001, resulting in a realized loss of
$23,504.
F-15
<PAGE>
(5) SUBSEQUENT EVENTS:
-----------------
Effective January 1, 1995, the Master Trust changed the
trustee from Chemical Bank to Fidelity Institutional
Retirement Services Company (Fidelity). Accordingly,
during January 1995, all funds held by Chemical Bank
were transferred to Fidelity. The funds available for
investment by participants are as follows-
Fidelity Retirement Money Market Portfolio-
------------------------------------------
A fund investing in high-quality money market
instruments of U. S. and foreign issuers, including
short-term corporate obligations, U. S. Government
obligations and certificates of deposit.
Fidelity Intermediate Bond Fund-
--------------------------------
A bond fund investing in all types of bonds,
including corporate and U. S. Government issues with
intermediate maturities.
Fidelity Balanced Fund-
----------------------
A growth and income fund investing in a broad array
of high-yielding securities, including foreign and
domestic bonds and common and preferred stocks.
Fidelity U. S. Equity Index Portfolio-
-------------------------------------
A fund which strives to match the total return of the
Standard & Poor's Composite Stock Price Index (the
S&P 500). The portfolio invests mostly in the 500
companies that make up the S&P 500, which are spread
across a variety of industries.
Fidelity Growth & Income Portfolio-
-----------------------------------
A growth and income fund investing primarily in
stocks that pay income greater than the average
income of stocks in the S&P 500.
Fidelity Magellan Fund-
----------------------
A growth mutual fund investing in common and
preferred stocks of all types of companies from the
U. S. and abroad.
Fidelity Blue Chips Growth Fund-
-------------------------------
A growth mutual fund investing in common stocks of
well-known, established growth companies.
Fidelity International Growth & Income Fund-
-------------------------------------------
A growth and income fund investing primarily in
stocks and debt securities of companies outside of
the U. S.
F-16
<PAGE>
AWT Stock Fund-
--------------
A fund investing primarily in Air & Water
Technologies Corporation Class A common stock.
On January 1, 1995, the Plan Sponsor approved, pending
approval by the Internal Revenue Service, the merger of
the Plan with the Air & Water Technologies Corporation
Thrift Plan. Once the merger is completed, the new plan
will be known as the Air & Water Technologies
Corporation Savings and Retirement Plan.
F-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the
employee benefit plans) have duly caused this annual report
to be signed on behalf of the undersigned hereunto duly
authorized.
Air & Water Technologies Corporation Thrift Plan
Air & Water Technologies Corporation
Profit Sharing Plan
Date June 28, 1995
------------- ---------------------
Augustine W. Bolella
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
To the Administrative Committee of the
Air & Water Technologies Corporation
Thrift Plan:
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into Air &
Water Technologies Corporation previously filed Registration Statement
on Form S-8 (File No. 33-35939).
ARTHUR ANDERSEN LLP
Roseland, New Jersey
June 27, 1995
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
To the Administrative Committee of the
Air & Water Technologies Corporation
Profit Sharing Plan:
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into Air &
Water Technologies Corporation previously filed Registration Statement
on Form S-8 (File No. 33-35939).
ARTHUR ANDERSEN LLP
Roseland, New Jersey
June 27, 1995
