SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
(Mark One)
[X] Annual Report pursuant to Section 15(3) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2002
OR
[_] Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 For the transition period from _______________ to _______________
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Mestek, Inc.
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executed office:
Mestek, Inc.
260 North Elm Street
Westfield, Massachusetts 01085
MESTEK, INC.
RETIREMENT SAVINGS PLAN SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 15, 2003 /s/: Stephen M. Shea
----------------------------------------------
Stephen M. Shea
Senior Vice President-Finance
Financial Statements and Report of Independent Certified Public Accountants
Mestek, Inc. Retirement Savings Plan
December 31, 2002 and 2001
MESTEK, INC. RETIREMENT SAVINGS PLAN
Table of Contents
December 31, 2002 and 2001
Page
Report of Independent Certified Public Accountants..........................3
Financial Statements
Statements of Net Assets Available for Benefits....................4
Statement of Changes in Net Assets Available for Benefits..........5
Notes to Financial Statements......................................6
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes........................................................16
Report of Independent Certified Public Accountants
Plan Administrator
Mestek, Inc. Retirement Savings Plan
We have audited the accompanying statements of net assets
available for benefits of Mestek, Inc. Retirement Savings Plan as of December
31, 2002 and 2001, and the related statement of changes in net assets available
for benefits for the year ended December 31, 2002. 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 auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above,
present fairly, in all material respects, the net assets available for benefits
of Mestek, Inc. Retirement Savings Plan as of December 31, 2002 and 2001, and
the changes in net assets available for benefits for the year ended December 31,
2002 in conformity with accounting principles generally accepted in the United
States of America.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole. The supplemental
schedule of Assets Held for Investment Purposes as of December 31, 2002, is
presented for 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 schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit 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/ Grant Thornton LLP
Boston, Massachusetts
July 10, 2003
5
MESTEK, INC. RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
-------------- --------------
ASSETS
Investments:
At fair value - (note B)
MassMutual Pooled Separate Accounts
Core equity fund $942,347 $1,150,781
Small company fund 508,656 722,340
Balanced fund 313,153 352,387
Intermediate bond fund 497,108 504,022
Indexed equity fund 1,017,040 1,647,746
Growth equity fund 145,814 154,360
International equity fund 174,749 301,183
Medium company growth equity fund 555,596 1,072,246
Mestek stock fund 29,051 25,289
Notes receivable from participants 785,820 642,174
------------- ------------
4,969,334 6,572,528
At contract value - (notes B and E)
MassMutual Life Insurance Company
Investment contract fund 8,468,881 6,648,030
------------- -----------
Total investments 13,438,215 13,220,558
Receivables:
Participants' contributions 79,655 97,730
Employer's contributions 28,778 35,139
----------- ------------
Total receivables 108,433 132,869
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $13,546,648 $13,353,427
=========== ==========
The accompanying notes are an integral part of the financial statements.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 2002
Additions
Additions to net assets attributed to:
Contributions:
Participant $1,055,405
Employer 392,481
Rollover 203,445
Investment loss (562,272)
-----------
Total additions 1,089,059
Deductions
Deductions from net assets attributed to:
Benefits paid to participants 882,072
Miscellaneous expenses 13,766
-----------
Total deductions 895,838
-----------
NET INCREASE 193,221
Net assets available for benefits:
Beginning of year 13,353,427
------------
End of year $13,546,648
===========
14
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN
The following description of Mestek, Inc. Retirement Savings Plan (the
"Plan") provides only general information. Participants should refer to the
Plan Agreement for a more complete description of the Plan's provisions.
General
The Plan was established as of June 1, 1984 under Section 401(k) of the
Internal Revenue Code. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan is a defined contribution plan established for the benefit of
employees of Mestek, Inc. (the "Company") who are covered under regional
collective bargaining agreements. Service eligibility requirements differ
by division and collective bargaining agreements.
Plan Amendment
In 1999, the Plan Administrator amended the Plan, allowing Mestek, Inc.
"Company Stock" to be included as an investment option. The term "Company
Stock" shall include shares of Mestek, Inc. common stock and other equity
securities issued by the employer that qualify as a "qualifying equity
security" as defined by ERISA. Up to 100% of the assets of the Plan may
be invested in "Company Stock", subject to any limitations posed by ERISA
or other regulatory agencies, such as, the Securities and Exchange
Commission.
Participant Contributions
Participants may elect to have up to fifteen percent of their
compensation withheld, up to the maximum allowed by the Internal Revenue
Code.
Participants may elect to make nondeductible voluntary contributions up to an
additional ten percent of their gross earnings each year within the legal
limits.
Effective December 31, 2001, eligible participants who have attained age
50 before the close of the calendar year may also make catch-up
contributions up to the dollar amount of the catch-up permitted for the
year.
Company Contribution
The Company contributes differing amounts depending upon the division's
collective bargaining agreement. Contributions are funded on a current
basis. The Company contributions are as follows:
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN - Continued
Division Agreement
Mestek, Inc.- Vulcan Radiator,
Corp. Effective June 1,
1999, employees hired prior
to June 1, 1984, receive
$.35/hour ($.45/hr after
June 11, 2002) for the
total hours worked per
week.
Effective June 1, 1999,
employees hired after May
31, 1984 and before June 1,
1990, receive $.30/hour
($.40/hr after June 11,
2002) for the total hours
worked per week.
Effective June 1, 1999,
employees hired after May
31, 1990, and before June
1, 1993 receive $.25/hour
($.35/hr after June 11,
2002) for the total hours
worked per week.
Effective June 1, 1999,
employees hired after June
1, 1993 and before June 1,
1999 receive $.20/hour
($.30/hr after June 11,
2002) for the total hours
worked per week after one
(1) year of service has
been completed.
For all employees hired
after June 1, 1999, the
company matches 25% of the
elective deferral, not to
exceed 4% of gross salary.
Employee shall receive an
additional $.05/hours for
each hour worked after
he/she reaches his 60th
birthday. The first pay
period will begin the month
after the employee's 60th
birthday.
Any employee hired after
June 1, 1999, with one year
or more seniority who
voluntarily contributes 4%
or more (pre-tax) of
his/her gross wages to the
plan, shall be eligible for
a 1% gross wages additional
matching contribution from
the Company.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
Mestek, Inc. - Bradner Effective August 1, 1991, the
Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
Mestek, Inc. - Wyalusing Effective October 1, 1995,
employees hired before
October 1, 1992 receive
$.45/hour for each hour worked.
Employees hired after
September 1, 1992 and
before October 1, 1995
receive $.20/hour for each
hour worked.
Employees hired after
September 30, 1995 receive
$.12/hour for each hour
worked.
Employees hired after
September 30, 1995 shall
not be eligible for
participation until
completing their
probationary period. Upon
attaining seniority status,
the employee shall receive
the Company's contribution
back to the 30th day of
work.
In addition, effective
October 1, 2000, the
company matches 25% of
employee deferrals up to
4%.
Mestex, Inc. - Dallas Effective August 1, 2000,
eligible employees hired
prior to August 1, 2000
receive $.15/hour worked,
provided such employee has
completed one year of service.
Effective August 1, 2000,
eligible employees receive
a 25% matching contribution
for each dollar of
voluntary contributions by
the employee, up to a limit
of the first 6% contributed
by the employee.
Mestek, Inc. - Waldron Effective April 1, 1991, the
Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
Mestek, Inc. - Dundalk Effective September 1, 1991,
the Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
Mestek, Inc. - Wrens Effective March 1, 1995, the
Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN - Continued
Division Agreement
Pacific Air Balance (PABI) Effective October 1, 1997, the Company
matches 25% of the elective deferral,
not to exceed 6% of gross salary.
Effective April 1, 2002,
employees hired prior to
October 1, 1980 receive
$.35/hr.
Effective April 1, 2002,
employees hired between
October 1, 1980 and October
1, 1984 receive $.20/hr.
Effective April 1, 2002,
employees hired between
October 1, 1984 and October
1, 1988 receive $.10/hr.
Effective April 1, 2002
employees hired after October 1, 1988 receive $.05/hr.
Anemostat Effective July 12, 2000,
any employee with one year
or more seniority who
voluntarily contributes 4%
or more (pre-tax) of
his/her gross wages to the
plan, shall be eligible for
a 1% gross wages matching
contribution from the
Company.
Met-Coil - Iowa Precision Effective November 1, 2001,
employees hired after
June 1, 2001, receive
$1.15/hour for each hour
worked per week.
Effective June 1, 2002,
employees receive $1.20/hr for each hour worked per week.
Met-Coil - Lockformer Effective
November 1, 2001, employee
deferrals will only be
allowed. There is no
company match or percentage
contribution.
Louvers and Dampers Effective July 1, 2000, the
Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
Air Clean Damper Effective June 1, 1999, the
Company matches 25% of the
elective deferral, not to
exceed 6% of gross salary.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN - Continued
Airtherm, LLC Effective May 1, 2001, the Company
matches 25% of the elective
deferral, not to exceed 6% of
gross salary
Employees hired prior to
May 1, 1987 receive $.25/hr
for each hour worked per
week.
Vesting
All participant and Company contributions are 100 percent vested plus
actual earnings thereon. Vesting in the Company matching contributions is
based on the following schedule:
Years of Service Vested Percentage
0 0%
3 20%
4 40%
5 60%
6 80%
7 100%
Investments
Upon enrollment in the Plan, participants may direct contributions to any
combination of fund options maintained by MassMutual Life Insurance
Company ("MassMutual"). All funds (except for the Investment Contract),
are invested in pooled separate accounts and do not guarantee principal
or rate of return. Plan participants may change their investment election
at any time through MassMutual's automatic record-keeping system. The
following is a description of each investment option:
The Investment Contract is invested in a group annuity contract issued
by MassMutual. This fund will receive a rate of interest set by
MassMutual annually (6.0% for fiscal year 2002, 6.70% for fiscal year
2001). Both the principal and interest are guaranteed by MassMutual for
the duration of the contract.
The Core Equity Fund invests primarily in common stocks of large, well
established companies.
The Small Company Fund invests mainly in common stocks of small,
publicly traded companies that have some unique product, market
position, or operating method which sets them apart.
The Balanced Fund invests in a blend of three types of assets: stocks,
bonds and short-term securities (or cash).
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN - Continued
The Intermediate Bond Fund invests mainly in investment-grade, publicly
traded bonds (debt issued by the U.S. government, agencies and
companies). The bonds mature over periods from 1 to 10 years.
The Indexed Equity Fund invests in stocks which will approximate, as
closely as possible, the Standard & Poor's 500 Index.
The Growth Equity Fund invests in primarily in equity securities of
large companies with long-term growth potential.
The International Equity Fund invests at least 90% of its assets in
equity securities of companies wherever located, the primary stock
market of which is outside the United States with intentions of
long-term growth.
The Medium Company Growth Equity Fund invest primarily in equity
securities of medium-size companies with long-term growth potential.
The Mestek Stock Fund is invested in common stock of Mestek, Inc.
Included in investment loss is interest and dividends of $492,636 and
realized and unrealized net losses on investments of $1,054,908.
Withdrawals
Participants are allowed to withdraw certain portions of their account,
as defined by the Plan, upon retirement, termination of employment, or
determination of financial hardship.
Notes Receivable from Participants
Participants are eligible to borrow up to 50% of their vested balance
to a maximum of $50,000. Loans bear interest at 1% above prime market
rates (5.25% - 10.5%) and are repayable over a period not to exceed
five years.
Payment of Benefits
Upon termination of employment, a participant with $5,000 or more in
vested benefits may receive the vested accrued benefits credited to
his/her account or may elect to continue earning tax deferred interest
on the vested portion of his/her savings account until retirement. A
participant cannot, however, make any further contributions. Any
participant with less than $5,000 receives a lump-sum cash payment.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE A - DESCRIPTION OF PLAN - Continued
The normal retirement date for a participant is the first day of the
month following the participant's 65th birthday. Participants are
allowed to defer their retirement date past the normal retirement date
and contributions will continue until the participant retires.
Upon retirement, employees may withdraw their account balances or
continue the accounts in the plan, provided their account balance is
greater than $5,000. Employees who wish to withdraw their account may
elect a one-sum cash payment, a rollover into a qualified plan, or a
payment by installment option.
Forfeitures
Forfeitures are held in an interest bearing holding account by the
trustee. The Company may apply these amounts to any outstanding
administrative costs due to the trustee. Excess amounts will be used to
reduce company matching contributions.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following are the significant accounting policies followed by the Plan:
Basis of Accounting
The accompanying financial statements of the Plan have been prepared
using the accrual basis of accounting.
Investment Valuation
The Plan's investments are stated at fair value, based on quoted market
prices, except for its investment contract which is valued at contract
value (see note E).
Allocations to Participants' Accounts
Amounts contributed to the Plan by the Company are credited to each
participant's account on the last day of each valuation period.
As of each valuation date, investment income is allocated to participant
accounts in proportion to the number of investment units held by each
participant.
The Plan is valued on a daily basis.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Expenses
Administrative costs paid by the Company are not included in the
accompanying financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require 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 amounts of additions and deductions
during the reporting period. Actual results could differ from those
estimates.
NOTE C - TAX STATUS
Although the Plan has received a favorable determination letter dated June
16, 1995 from the Internal Revenue Service, it has not been updated for the
latest plan amendments. However, the plan administrator believes that the
Plan is designed and is being operated in compliance with the applicable
requirements of the IRC. Therefore, the plan administrator believes that the
Plan was qualified and the related trust was tax-exempt for the year ended
December 31, 2002.
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions and to terminate the Plan
subject to the provisions of ERISA and regional collective bargaining
agreements. In the event of Plan termination, participants will become 100%
vested in their accounts.
MESTEK, INC. RETIREMENT SAVINGS PLAN
Notes to Financial Statements - Continued
December 31, 2002 and 2001
NOTE E - INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan has an investment contract with MassMutual. MassMutual maintains the
contributions in a pooled account. The account is credited with a guaranteed
rate of return and is charged for Plan withdrawals and administrative
expenses charged by MassMutual. The contract is included in the financial
statements at contract value, as reported to the Plan by MassMutual. Contract
value represents contributions made under the contract, plus earnings,less
Plan withdrawals and administrative expenses.
SUPPLEMENTAL SCHEDULE
MESTEK, INC. RETIREMENT SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes EIN
25-0661650 PLAN #003
December 31, 2002
Description of Investment
Including Maturity Date, Rate
Identity of Issue, Borrower, of Interest, Collateral, Current
Lessor, or Similar Party Par or Maturity Value Cost Value
------------------------------------------------ ----------------------------------- ---- --------------
* MassMutual Life Insurance Company Core equity fund ** $942,347
* MassMutual Life Insurance Company Small company fund ** 508,656
* MassMutual Life Insurance Company Balanced fund ** 313,153
* MassMutual Life Insurance Company Intermediate bond fund ** 497,108
* MassMutual Life Insurance Company Indexed equity fund ** 1,017,040
* MassMutual Life Insurance Company Growth equity fund ** 145,814
* MassMutual Life Insurance Company International equity fund ** 174,749
* MassMutual Life Insurance Company Medium company growth
equity fund ** 555,596
* MassMutual Life Insurance Company Mestek stock fund ** 29,051
* MassMutual Life Insurance Company Investment contract fund*** ** 8,468,881
Participant Notes Notes receivable from participants 785,820
(5.25%-10.5%)
* Denotes party in interest to Plan
** Cost omitted for participant directed investments
*** Contract value
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated July 10, 2003, accompanying
the financial statements of Mestek, Inc. Retirement Savings Plan contained in
the annual report on Form 11-K for the year ended December 31, 2002. We hereby
consent to the incorporation by reference of said report in the Mestek, Inc.
Retirement Savings Plan Registration Statement on Form S-8 (File Number
333-06429).
/s/ Grant Thornton LLP
Boston, Massachusetts
July 10, 2003
Exhibit 99.1
Certification of Chief executive Officer and Treasurer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purpose of complying with 18 U.S.C. Section 1350, each of the
undersigned hereby certifies in his or her capacity as an officer of Mestek,
Inc. (the "Company") that the Annual Report of Form 11-K of the Retirement
Savings Plan and the Savings & Retirement Plan (the "Plans") for the year ended
December 31, 2002 fully complies with the requirement of Section 15(d) of the
Securities Exchange Act of 1934 and that information contained in such report
fairly presents, in all material respects, the financial condition of the Plans
at the end of such period and the results of operations of the Plans for such
period.
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
Dated: July 15, 2003
/s/ John E. Reed
-------------------------------------------------
John E. Reed
Chairman and Chief Executive Officer
/s/ Stephen M. Shea
------------------------------------------------
Stephen M. Shea
Senior Vice President-Finance