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
For the fiscal year ended December 31, 1997
OR
[ ] Transition report pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
For the transition period from ________ to _________
Commission file number 0-25586 and 33-66740
A. Full title of the Plan and the address of the Plan, if
different from that of the issuer named below:
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
BENSON ROAD
MIDDLEBURY, CT 06749
B. Name of issuer of the securities held pursuant to the
Plan and the address of its principal executive
office:
Crompton & Knowles Corporation
One Station Place - Metro Center
Stamford, Connecticut 06902
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Index to Financial Statements
Independent Auditors' Report
Statements of Net Assets Available for Plan Benefits as of
December 31, 1997 and 1996
Statements of Changes in Net Assets Available for
Plan Benefits as of December 31, 1997 and 1996
Notes to Financial Statements
Statement of Net Assets Available for Plan Benefits, Fund
Information
Statement of Changes in Net Assets Available for Plan Benefits,
Fund Information
Schedule of Assets Held for Investment Purposes
as of Year Ended December 31, 1997
Schedule of Reportable (5%) Transactions
for the Year Ended December 31, 1997
Signature
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Financial Statements and Schedules
December 31, 1997 and 1996
(With Independent Auditors' Report Thereon)
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Index
Independent Auditors' Report
Statements of Net Assets Available for Plan Benefits as of
December 31, 1997 and 1996
Statements of Changes in Net Assets Available for
Plan Benefits as of December 31, 1997 and 1996
Notes to Financial Statements
Other Information
Schedule
Schedule of Assets Held for Investment Purposes
as of Year Ended December 31, 1997................ I
Schedule of Reportable (5%) Transactions
for the Year Ended December 31, 1997................ II
Independent Auditors' Report
Board of Directors
Uniroyal Chemical Company, Inc.
Middlebury, Connecticut:
We have audited the accompanying statements of net assets
available for plan benefits of Uniroyal Chemical Company, Inc.
Savings Plan A (the "Plan") as of December 31, 1997 and 1996, 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 as of December 31, 1997
and 1996, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audits were performed 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 at
December 31, 1997 and Reportable (5%) Transactions for the year
ended December 31, 1997 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. These supplemental schedules are the responsibility of
the Plan's management. The Fund Information in the statement of
net assets available for plan benefits and the statement of
changes in net assets available for plan 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 audits of the basic financial
statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
/s/KPMG Peat Marwick LLP
Stamford, Connecticut
June 23, 1998
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Statements of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
1997 1996
ASSETS:
Investments:
Guaranteed investment contracts $ 8,950,115 $ 11,220,960
Short term investment fund 3,124,413 1,171,083
Investments in registered
investment companies 231,824 -
Investments in common/collective trusts 53,281 -
Common stock of
Crompton & Knowles Corporation 12,595 -
Loans receivable 241,184 241,407
Contributions receivable from participants 115,279 99,280
Contribution receivable from Uniroyal
Chemical Company, Inc. 6,682 13,062
Total assets 12,735,373 12,745,792
LIABILITIES:
Administrative expenses payable 14,502 21,581
Net assets available for plan benefits 12,720,871 $ 12,724,211
See accompanying notes to financial statements
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Statements of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 1997 and 1996
1997 1996
Additions attributed to:
Investment Income:
Interest income $ 836,675 $ 793,009
Net depreciation in fair value of
investments (18,895) -
817,780 793,009
Contributions:
Employer 75,447 110,602
Employee 1,248,910 1,200,019
1,324,357 1,310,621
Total additions 2,142,137 2,103,630
Deductions attributed to:
Benefits paid to participants 2,096,863 1,929,108
Administrative expenses 48,614 37,339
Total deductions 2,145,477 1,966,447
Net (decrease) increase (3,340) 137,183
Net assets available for plan
benefits at beginning of year 12,724,211 12,587,028
Net assets available for plan
benefits at end of year $12,720,871 $ 12,724,211
See accompanying notes to financial statements
UNIROYAL CHEMICAL COMPANY, INC
SAVINGS PLAN A
Notes To Financial Statements
1. Plan Description
The Uniroyal Chemical Company, Inc. Savings Plan A (the "Plan")
is a defined contribution plan established by Uniroyal Chemical
Company, Inc. (the "Company") on October 15, 1986 and amended and
restated effective September 1, 1997 to provide a means for
eligible employees to supplement their retirement income.
Participants receive retirement payments as of their retirement
date by electing one of several payment options as specified in
the Plan. For complete information, see the Plan document.
The Plan is administered by a Retirement Board consisting of
persons appointed by the Board of Directors of the Company.
Through August 31, 1997 the Plan covered all hourly-rate
employees represented by collective bargaining agents at the
plants or other locations. After August 31, 1997 the Plan covers
all hourly-rate and salaried employees represented by a
collective bargaining agent at the plants or other locations or
hourly-rate employees not represented by a collective bargaining
agent at a plant or location to which the Plan has been extended.
Company Contributions
Contributions by the Company are made monthly for each hour for
which the participant receives pay from the Company, including 40
hours for each week of vacation eligibility. In addition, the
Company will contribute, based upon 40 hours, for any period of
absence during which the participant accrues credited service.
The rate of contribution per hour is in accordance with the
following schedule:
Years of Service Rate Per Hour
0 - 14 $ .05
15 - 24 .12
25+ .18
except that through August 31, 1997, for all hourly-rate
employees at the Gastonia, North Carolina and the Bay Minette,
Alabama chemical plants, the rate of contribution per hour was in
accordance with the following schedule:
Years of Service Rate Per Hour
0 - 15 $ .20
15+ .30
The Plan provides that, except in certain specified events,
Company contributions credited to a participant's account are not
vested until the completion of three years of service.
Thereafter, all Company contributions vest when made.
Participant Contributions
Each participant may contribute an amount not to exceed 15% of
compensation for each Plan year. Contributions shall be in whole
percentages of which up to 10% prior to September 1, 1997 could
be made as voluntary regular contributions. Voluntary regular
contributions were treated as after tax contributions. The
difference between the voluntary regular contributions percentage
and the maximum of 15% of compensation was made as voluntary
deferred contributions. Voluntary deferred contributions are
treated as pre-tax contributions. Due to the Plan amendment
participant contributions after September 1, 1997 will be treated
as pre-tax contributions.
Participant contributions are normally made by payroll
deductions. In any Plan year, the participant's voluntary and
deferred contribution is subject to Internal Revenue Service
limitations. Additionally, in any Plan year, the aggregate of
the Company and participant contributions made for each employee
to all defined contribution plans is limited to the lesser of
$30,000 or 25% of the employee's compensation. A participant's
voluntary regular and deferred contributions account interest is
at all times fully vested.
Investments
Prior to September 1, 1997 Employer contributions and participant
voluntary and deferred contributions were invested in guaranteed
investment contracts and short term investment funds maintained
by the State Street Bank and Trust Company ("State Street").
Subsequent to September 1, 1997 Employer contributions are being
invested in the Retirement Savings Trust fund maintained by the
Vanguard Investment Group. Participant contributions subsequent
to September 1, 1997 are being invested in stock and mutual funds
maintained by the Vanguard Investment Group.
The guaranteed investment contracts held by State Street at
August 31, 1997 will be held to maturity and invested in short
term investment funds. These funds will be transferred to and
invested in the Vanguard mutual funds in five annual installments
with the initial payment on December 31, 1997. The Company
contribution portion of each installment payment will be invested
in the Retirement Savings Trust Fund. The balance of each
participants transfer will be invested in the same ratio as the
participant's then current voluntary contribution allocation. If
no current voluntary deferred contributions are then being made
by the participant, then such amounts will be invested in the
Retirement Savings Trust Fund.
Withdrawals and Forfeitures
A participant may withdraw in whole or in part, subject to a 90%
maximum on partial withdrawals, his voluntary contributions
account at any time, provided that each withdrawal is separated
by a period of six months.
In the event of the termination of a participant's employment
with the Company because of retirement or death, the participant
or a designated beneficiary shall receive payment of his benefit
account balance. At December 31, 1997 and 1996, benefit payments
due employees who terminated prior to year end and requested
distributions of their accounts totaled approximately $67,000 and
$233,000, respectively. These amounts have not been recorded in
the financial statements but are included as benefit payments and
liabilities in the Plan's Form 5500.
Forfeitures, which consist of Company contributions credited to
the Company Basic Contributions Account applicable to
participants who terminate from the Plan and are not vested, are
valued at the employees' share of the cost of the Plan's
investment plus accrued interest thereon and applied to reduce
the Company's current obligation to contribute to the Plan.
There were no forfeitures in 1997 and 1996.
2. Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on the
accrual basis of accounting.
Employee Accounts
Aon Consulting, the record keeper of the Plan maintains an
individual account for each participant called a "Company Basic
Contributions Account" showing the amount of Company
contributions in fixed principal and income contracts through
August 31, 1997. As these contracts mature the proceeds will be
invested in short term investments and finally in various
Vanguard Funds as selected by the participants.
The record keeper also maintains, for each participant who elects
to make voluntary contributions, a "Voluntary Deferred
Contributions Account" showing the amount of participant
contributions in various Vanguard Funds.
Expenses
Expenses incurred by Chase Manhattan Bank, Aon Consulting and
State Street, are paid by the Plan except to the extent that the
Company shall provide for such payment. The Company provides
administrative and accounting services for the Plan at no charge.
Loans
The Plan permits participants to borrow funds from their
Voluntary Deferred Contributions subject to certain
restrictions. The minimum amount that may be borrowed was $500
through August 31, 1997 and $1,000 thereafter. The maximum
amount which may be borrowed is the lesser of $50,000 reduced by
the greater of (a) the outstanding balance of loans from the Plan
to the participant on the date the loan is made, or (b) the
highest outstanding balance of loans from the Plan to the
participant during the one-year period ending on the day before
the date the loan is made (excluding any payments made) or 50% of
the value of the participants vested interest under the Plan on
the date the loan is made or the amount of the participants
voluntary deferred account not invested in the Crompton & Knowles
Common Stock Fund. Loans bear interest at a rate equal to 1.0%
above the prime rate. Loans are payable within five years except
for those used to acquire a principal residence which are payable
within 10 years through August 31, 1997 and 15 years thereafter.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported changes in net assets available for plan benefits during
the reporting period. Actual results could differ from those
estimates.
3. Investments
Short Term Investment Fund
The short-term investments funds are valued at cost plus accrued
interest. The carrying amount approximates fair value because of
the short maturity of those instruments. Interest rates for such
investments at the end of 1997 and 1996 was 5.8%.
Guaranteed Insurance Contracts
The guaranteed investment contracts with various insurance
companies are valued at contract value which approximates fair
value. Such investments earned interest at rates ranging from
4.95% to 8.00% during 1997 and at rates ranging from 4.83% to
8.18% during 1996.
Mutual Funds
The mutual funds sponsored by registered investment companies are
recorded at market valuations which are based on published market
prices. Purchases and sales are recorded on a trade date basis.
Loans Receivable
The loans receivable from participants are valued at cost plus
accrued interest which approximates fair value.
4. Investments Exceeding 5% of Net Assets
The Plan's investments which exceeded 5% of net assets available
for plan benefits as of December 31, 1997 and 1996 are as
follows:
Description of Investment 1997 1996
Short Term Investment Fund $ 3,124,413 $ 1,171,083
Guaranteed Investment Contracts 8,950,115 11,220,960
5. Tax Status
The Plan obtained its latest determination letter in June 1995,
in which the Internal Revenue Service stated that the Plan, as
designed, is in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements. The
Company is under the belief that after the amendment and
restatement of the Plan, it is still in compliance.
6. The Chase Manhattan Bank, Aon Consulting, and State Street
Bank and Trust Company and The Vanguard Investment Group are
parties-in-interest as defined in Section 3(14) of the Employee
Retirement Income Security Act of 1974. During the years 1997
and 1996 there were no prohibited party-in-interest transactions.
7. Priorities Upon Termination of the Plan
The Board of Directors of the Company shall have the right from
time to time to add to, modify or amend the Plan, and the Board
of Directors shall have the right to terminate the Plan. The
Board of Directors may also authorize the inclusion in any
contract entered into by the Company with the union or unions
representing employees, or with any group or groups of employees,
of a provision or provisions having the effect of limiting or
foregoing any such rights. Further, no addition to,
modification, amendment or termination of the Plan shall have the
effect of reducing the entitlement of any participant's benefit
accrued under the Plan or of diverting any part of the assets of
the Trust Fund for purposes other than provided in the Plan.
Upon any terminations of the Plan, or complete and permanent
discontinuance of contributions of all participants, the
entitlement of each of the participant's Company Basic
Contributions Account, if not already vested, shall vest fully
and all amounts in all accounts of each participant shall be
delivered and paid as soon as practicable.
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Statement of Net Assets Available for Plan
Benefits, Fund Information
Vanguard Group
December 31,1997
Crompton & VANGUARD
Knowles VANGUARD VANGUARD MORGAN
Corp. WINDSOR EXPLORER GROWTH
Stock FUND FUND FUND
ASSETS:
Investments in registered
investment companies $ - $ 73,083 $ 7,075 $ 27,367
Common and collective trust - - - -
Crompton & Knowles Corp.
- common stock 12,595 - - -
Loans receivable - - - -
Contributions receivable from
plan participants 4,386 30,215 2,922 10,441
Net assets available
for plan benefits $ 16,981 $ 103,298 $ 9,997 $ 37,808
LONG-TERM
CORPORATE VMMR VANGUARD VANGUARD
BOND PRIME INDEX 500 STAR
FUND PORTFOLIO PORTFOLIO PORTFOLIO
ASSETS:
Investments in registered
investment companies $ 9,532 $ 13,354 $ 61,710 $ 21,671
Common and collective trust - - - -
Crompton & Knowles Corp.
- common stock - - - -
Loans receivable - - - -
Contributions receivable from
plan participants 3,349 3,490 24,442 8,874
Net assets available
for plan benefits $ 12,881 $ 16,844 $ 86,152 $ 30,545
RETIREMENT INTERNATIONAL
SAVINGS GROWTH LOAN
TRUST PORTFOLIO FUND TOTAL
ASSETS:
Investments in registered
investment companies $ - $ 18,031 $ - $ 231,823
Common and collective trust 53,281 - - 53,281
Crompton & Knowles Corp.
- common stock - - - 12,595
Loans receivable - - - -
Contributions receivable from
plan participants 18,908 5,954 - 112,981
Net assets available
for plan benefits $ 72,189 $ 23,985 $ - $ 410,680
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Statement of Changes in Net Assets Available for Plan
Benefits, Fund Information
Vanguard Group
September 1, 1997 through December 31,1997
Crompton & VANGUARD
Knowles VANGUARD VANGUARD MORGAN
Corp. WINDSOR EXPLORER GROWTH
Stock FUND FUND FUND
Additions attributed to:
Investment income:
Interest and dividends $ - $ 10,948 $ 700 $ 3,037
Net appreciation (depreciation)
in fair value
of investments 234 (12,430) (923) (3,088)
234 (1,482) (223) (51)
Contributions:
Employer - - - -
Employee 16,553 105,550 10,220 37,859
16,553 105,550 10,220 37,859
Total additions 16,787 104,068 9,997 37,808
Deductions attributed to:
Benefits paid
to participants - 770 - -
Total deductions - 770 - -
Inter - fund transfers 194 - - -
Net increase(decrease) 16,981 103,298 9,997 37,808
Net assets available for plan benefits
at beginning of year - - - -
Net assets available for plan
benefits at end of year $ 16,981 $ 103,298 $ 9,997 $ 37,808
LONG-TERM
CORPORATE VMMR VANGUARD VANGUARD
BOND PRIME INDEX 500 STAR
FUND PORTFOLIO PORTFOLIO PORTFOLIO
Additions attributed to:
Investment income:
Interest and dividends $ 163 $ 108 $ 717 $ 1,762
Net appreciation (depreciation)
in fair value
of investments 106 - 199 (1,599)
269 108 916 163
Contributions:
Employer - - - -
Employee 12,612 16,930 85,236 31,169
12,612 16,930 85,236 31,169
Total additions 12,881 17,038 86,152 31,332
Deductions attributed to:
Benefits paid
to participants - - - 787
Total deductions - - - 787
Inter - fund transfers - (194) - -
Net increase(decrease) 12,881 16,844 86,152 30,545
Net assets available for plan benefits
at beginning of year - - - -
Net assets available for plan
benefits at end of year $ 12,881 $ 16,844 $ 86,152 $ 30,545
RETIREMENT INTERNATIONAL
SAVINGS GROWTH LOAN
TRUST PORTFOLIO FUND TOTAL
Additions attributed to:
Investment income:
Interest and dividends $ 466 $ 768 $ - $ 18,669
Net appreciation (depreciation)
in fair value
of investments - (1,394) - (18,895)
466 (626) - (226)
Contributions:
Employer 22,851 - - 22,851
Employee 49,049 24,611 - 389,789
71,900 24,611 - 412,640
Total additions 72,366 23,985 - 412,414
Deductions attributed to:
Benefits paid
to participants 177 - - 1,734
Total deductions 177 - - 1,734
Inter - fund transfers - - - -
Net increase(decrease) 72,189 23,985 - 410,680
Net assets available for plan benefits
at beginning of year - - - -
Net assets available for plan
benefits at end of year $ 72,189 $ 23,985 $ - $ 410,680
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
Item 27A - Schedule of Assets Held for Investment Purposes
December 31, 1997
Description of Investment
Identity of issuer including collateral, rate of
borrower, lessor interest, maturity date, Market
or similar party* par or maturity value Cost Value
State Street Bank Short Term Investment Fund$ 3,124,413 $ 3,124,413
Trust Company
State Street Bank Guaranteed investment contracts with
Trust Company various insurance companies with various
maturities and interest rates ranging
from 4.95% to 8.00% 8,950,115 8,950,115
Vanguard Fiduiciary
Trust Co. Explorer Fund 7,997 7,075
Vanguard Fiduiciary Long Term Corporate
Trust Co. Bond Fund 9,427 9,532
Vanguard Fiduiciary
Trust Co. Index 500 Portfolio 61,512 61,710
Vanguard Fiduiciary International Growth
Trust Co. Portfolio 19,426 18,031
Vanguard Fiduiciary
Trust Co. VMMR Prime Portfolio 13,354 13,354
Vanguard Fiduiciary
Trust Co. Star Porfolio 23,265 21,671
Vanguard Fiduiciary
Trust Co. Morgan Growth Fund 30,455 27,367
Vanguard Fiduiciary
Trust Co. Windsor Fund 85,491 73,083
Vanguard Fiduiciary Retirement Savings
Trust Co. Trust 53,281 53,281
Vanguard Fiduiciary Crompton & Knowles
Trust Co. Stock Fund 12,361 12,595
316,569 297,699
Loans receivable from Loans earn interest at the prime
participants rate plus 1% 241,184 241,184
Total investments $12,632,281 $12,613,411
*Party - in - Interest
UNIROYAL CHEMICAL COMPANY, INC.
SAVINGS PLAN A
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1997
Indentity Net
of
Party Description Purchase Selling Cost of Gain
Involved of Asset Price Price Asset (Loss)
I. Single Transactions
State Street
Bank and Short Term
Trust Investment
Company Fund $ - $ 882,445 $ (882,445)$ -
II. Series of Transactions
State Street
Bank and Guaranteed
Trust Investment
Company Contracts (658,108) - 658,108 -
State Street
Bank and Short Term
Trust Investment
Company Fund - 1,871,448 (1,871,448) -
SIGNATURE
The Plan. Pursuant to the requirements of the Securities and
Exchange Act of 1934, the Plan administrator has duly caused this
annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
UNIROYAL CHEMICAL COMPANY, INC
SAVINGS PLAN A
Date: June 23, 1998 By:/s/Charles J. Marsden
Charles J. Marsden
Senior Vice President &
Chief Financial Officer
