-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J6Jl1FscbxzIoFV8XvtjQapKGtMYi3KG8gogD1VUKXFA8hAenuqqoZJq+gD88v7z +f0pFdHzQ7Fq3JpJCjebYw== 0000052466-99-000011.txt : 19990625 0000052466-99-000011.hdr.sgml : 19990625 ACCESSION NUMBER: 0000052466-99-000011 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IONICS INC CENTRAL INDEX KEY: 0000052466 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 042068530 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-07211 FILM NUMBER: 99651392 BUSINESS ADDRESS: STREET 1: 65 GROVE ST CITY: WATERTOWN STATE: MA ZIP: 02172 BUSINESS PHONE: 6179262500 11-K 1 FORM 10-K/A AMENDMENT TO FORM 10-K ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 AMENDMENT NO. 1 [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period ended___________________________ Commission File Number 1-7211 Ionics, Incorporated (Exact name of registrant as specified in it charter) Massachusetts 04-2068530 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification Number) 65 Grove Street, Watertown, Massachusetts 02472 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-926-2500 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $1 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) /1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the fiscal year ended December 31, 1998 as set forth in the pages attached hereto: 1.Item 14(a) 3. of Part IV of said report on Form 10-K is amended to list Form 11-K, Annual Report of the Ionics Section 401(k) Stock Savings Plan for the year ended December 31, 1998, as Exhibit 13(b) thereto. The Annual Report of the Ionics Section 401(k) Stock Savings Plan on Form 11-K for the year ended December 31, 1998 is hereby filed pursuant to rule 15d-21 and General Instruction F to Form 10-K as an Exhibit to said Annual Report on Form 10-K. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. IONICS, INCORPORATED (Registrant) Date: June 23, 1999 By /s/Stephen Korn Stephen Korn Vice President and General Counsel /2 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements See Index to Financial Statements and Financial Statement Schedules on page IV-8. The Financial Statement Schedules are filed as part of this Annual Report on Form 10-K. 2. Financial Statement Schedules See Index to Financial Statements and Financial Statement Schedules on page IV-8. 3. Exhibits
Exhibit No. Description 3.0 Articles of Organization and By-Laws 3.1 Restated Articles of Organization filed * April 16, 1986 (filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 3.1(a) Amendment to the Restated Articles of * Organization filed June 19, 1987 (filed as Exhibit 3.1(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 3.1(b) Amendment to Restated Articles of * Organization filed May 13, 1988 (filed as Exhibit 3.1(b) to Registration Statement No. 33-38290 on Form S-2 effective January 24, 1991). 3.1(c) Amendment to Restated Articles of * Organization filed May 8, 1992 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending June 30, 1996). 3.1(d) Amendment to Restated Articles of * Organization filed May 8, 1998 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1998). IV-1 /3 3.2 By-Laws, as amended through November 14, 1997 * (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 4.0 Instruments defining the rights of security holders, including indentures 4.1 Renewed Rights Agreement, dated as of * August 19, 1997 between Registrant and BankBoston N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated August 27, 1997). 4.2 Form of Common Stock Certificate (filed as * Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 10.0 Material Contracts 10.1 1979 Stock Option Plan, as amended through * February 22, 1996 (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.2 1986 Stock Option Plan for Non-Employee Directors, * as amended through February 19, 1997 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). 10.3 Amended and Restated Credit Agreement between * the Company and the First National Bank of Boston dated as of December 31, 1992 (filed as Exhibit 10.3 to the Company's Annual Report for the year ended December 31, 1997). 10.3(1)Amendment Agreement No. 1, dated as of * December 31, 1995, to Amended and Restated Credit Agreement between the Company and The First National Bank of Boston (filed as Exhibit 10.3(1) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.3(2)Amendment Agreement No. 2, dated as of December 31, 1998, to Amended and Restated Credit Agreement between the Company and BankBoston N.A. 10.4 Operating Agreement dated as of September 27, * 1989 between the Company and Aqua Cool Enterprises, Inc. (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). IV-2 /4 10.5 Term Lease Master Agreement dated as of * September 27, 1989 between the Company and Aqua Cool Enterprises, Inc. (filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 10.6 Option Agreement dated as of September 27, 1989 * among the Company, Aqua Cool Enterprises, Inc. and the other parties named therein (filed as Exhibit 10.6 to the Company's registration statement on Form S-2, No. 33-38290, effective January 24, 1991). 10.7 1994 Restricted Stock Plan (filed as Exhibit 10.12 * to the Company's Annual Report on Form 10-K dated March 30, 1995). 10.8 1997 Stock Incentive Plan (filed as Exhibit 10.12 * to the Company's Annual Report on Form 10-K dated December 31, 1996). 10.9 Ionics, Incorporated Supplemental Executive * Retirement Plan effective as of January 1, 1996 (filed as Exhibit 10.9 to the Company's Annual Report on Form 10-K dated December 31, 1997). 10.10 Form of Employee Retention Agreement dated * February 24, 1998 between the Company and certain officers of the Company and its subsidiaries (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K dated December 31, 1997). 10.11 1998 Non-Employee Directors Fee Plan (filed * as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998). 13.0(a) Annual Report to Stockholders of the Company for the year ended December 31, 1998 (constituting the following sections: Management's Discussion and Analysis of Results of Operations and Financial Condition; Report of Independent Accountants; Consolidated Statements of Operations; Consolidated Balance Sheets; Consolidated Statements of Cash Flow; Consolidated Statements of Stockholders' Equity; Notes to Consolidated Financial Statements; Selected Financial Data; Board of Directors; Corporate Officers; Principal U.S. Offices, Affiliates & Subsidiaries; Corporate Headquarters; Principal Overseas Offices, Affiliates & Subsidiaries; Investor Information; Transfer Agent & Registrar; and Auditors). (b) Annual Report of the Ionics Section 401(k) Stock Savings Plan on Form 11-K for the year ended December 31, 1998. IV-3 /5 21.0 Subsidiaries of the Registrant. 23.0 Consents 23.1 Consent of PricewaterhouseCoopers LLP to incorporation by reference of that firm's report dated February 19, 1999, which is included on page 21 of the Registrant's Annual Report to Stockholders for the year ended December 31, 1998. 24.0 Power of Attorney. 27.0 Financial Data Schedule. ** ________________________________ * incorporated herein by reference ** for electronic purposes only
IV-4 /6 EXHIBIT INDEX
Sequentially Exhibit Numbered No. Description Page 3.0 Articles of Organization and By-Laws 3.1 Restated Articles of Organization filed * April 16, 1986 (filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 3.1(a) Amendment to the Restated Articles of * Organization filed June 19, 1987 (filed as Exhibit 3.1(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 3.1(b) Amendment to Restated Articles of * Organization filed May 13, 1988 (filed as Exhibit 3.1(b) to Registration Statement No. 33-38290 on Form S-2 effective January 24, 1991). 3.1(c) Amendment to Restated Articles of * Organization filed May 8, 1992 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending June 30, 1996). 3.1(d) Amendment to Restated Articles of * Organization filed May 8, 1998 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1998). 3.2 By-Laws, as amended through November 14, 1997 * (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 4.0 Instruments defining the rights of security holders, including indentures 4.1 Renewed Rights Agreement, dated as of * August 19, 1997 between Registrant and BankBoston N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated August 27, 1997). /7 4.2 Form of Common Stock Certificate (filed as * Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 10.0 Material Contracts 10.1 1979 Stock Option Plan, as amended through * February 22, 1996 (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.2 1986 Stock Option Plan for Non-Employee Directors, * as amended through February 19, 1997 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). 10.3 Amended and Restated Credit Agreement between * the Company and the First National Bank of Boston dated as of December 31, 1992 (filed as Exhibit 10.3 to the Company's Annual Report for the year ended December 31, 1997). 10.3(1) Amendment Agreement No. 1, dated as of * December 31, 1995, to Amended and Restated Credit Agreement between the Company and The First National Bank of Boston (filed as Exhibit 10.3(1) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995). 10.3(2) Amendment Agreement No. 2, dated as of 35 December 31, 1998, to Amended and Restated Credit Agreement between the Company and BankBoston N.A. 10.4 Operating Agreement dated as of September 27, * 1989 between the Company and Aqua Cool Enterprises, Inc. (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 10.5 Term Lease Master Agreement dated as of * September 27, 1989 between the Company and Aqua Cool Enterprises, Inc. (filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997). 10.6 Option Agreement dated as of September 27, 1989 * among the Company, Aqua Cool Enterprises, Inc. and the other parties named therein (filed as Exhibit 10.6 to the Company's registration statement on Form S-2, No. 33-38290, effective January 24, 1991). /8 10.7 1994 Restricted Stock Plan (filed as Exhibit 10.12 * to the Company's Annual Report on Form 10-K dated March 30, 1995). 10.8 1997 Stock Incentive Plan (filed as Exhibit 10.12 * to the Company's Annual Report on Form 10-K dated December 31, 1996). 10.9 Ionics, Incorporated Supplemental Executive * Retirement Plan effective as of January 1, 1996 (filed as Exhibit 10.9 to the Company's Annual Report on Form 10-K dated December 31, 1997). 10.10 Form of Employee Retention Agreement dated * February 24, 1998 between the Company and certain officers of the Company and its subsidiaries (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K dated December 31, 1997). 10.11 1998 Non-Employee Directors Fee Plan (filed * as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998). 13.0(a) Annual Report to Stockholders of the Company for the 40 year ended December 31, 1998 (constituting the following sections: Management's Discussion and Analysis of Results of Operations and Financial Condition; Report of Independent Accountants; Consolidated Statements of Operations; Consolidated Balance Sheets; Consolidated Statements of Cash Flow; Consolidated Statements of Stockholders' Equity; Notes to Consolidated Financial Statements; Selected Financial Data; Board of Directors; Corporate Officers; Principal U.S. Offices, Affiliates & Subsidiaries; Corporate Headquarters; Principal Overseas Offices, Affiliates & Subsidiaries; Investor Information; Transfer Agent & Registrar, and Auditors). (b) Annual Report of the Ionics Section 401(k) Stock Savings Plan on Form 11-K for the year ended December 31, 1998. 75 21.0 Subsidiaries of the Registrant. 76 23.0 Consents 23.1 Consent of PricewaterhouseCoopers LLP 77 to incorporation by reference of that firm's report dated February 19, 1999, which is included on page 21 of the Registrant's Annual Report to Stockholders for the year ended December 31, 1998. 24.0 Power of Attorney. 78 27.0 Financial Data Schedule. ** ________________________________ * incorporated herein by reference ** for electronic purposes only
/9 Exhibit No. 13(b) to Annual Report on Form 10-K of Ionics, Incorporated for the year ended December 31, 1998 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, 1998 OR [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ Commission file number 1-7211 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Ionics Section 401(k) Stock Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: IONICS, INCORPORATED 65 Grove Street Watertown, Massachusetts 02472-2882 /10 IONICS SECTION 401(k) STOCK SAVINGS PLAN INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES For the years ended December 31, 1998 and 1997 ________ Page(s) Independent Auditors Report 2 Financial Statements: Statements of Net Assets Available for Plan Benefits at December 31, 1998 and 1997 3-4 Statements of Changes in Net Assets Available for Plan Benefits for the years ended December 31, 1998 and 1997 5-6 Notes to Financial Statements 7-11 Supplemental Schedules: Schedule of Assets Held for Investment Purposes, at December 31, 1998 12 Schedule of Reportable Transactions for the year ended December 31, 1998 13 Schedule of Nonexempt Transactions for the year ended December 31, 1998 14 /11 INDEPENDENT AUDITOR'S REPORT Administrators Ionics Section 401(k) Stock Savings Plan Watertown, Massachusetts We have audited the accompanying statements of net assets available for plan benefits of the Ionics Section 401(k) Stock Savings Plan (the Plan) as of December 31, 1998 and 1997, and the related statement of changes in net assets available for plan benefits for the years then ended. These financial statements and the schedules referred to below are the responsibility of the plan administrator. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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, 1998 and 1997 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 made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes, reportable transactions and nonexempt transactions are presented for purposes of complying with the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and are not a required part of the basic financial statements. Such schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/BELANGER & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS Chelmsford, Massachusetts June 14, 1999 /12 -2- IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS DECEMBER 31, 1998
PARTICIPANT - DIRECTED FUNDS IONICS, INC. INDEXED MULTI- INDEXED JANUS BT PARTIC- COMMON PURITAN CONTRAFUND BOND ASSET EQUITY WORLDWIDE PYRAMID IPANT CASH/ STOCK FUND FUND FUND FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL ASSETS: INVESTMENTS @ MARKET (SEE NOTES 2,3 & 7) IONICS, INCORPORATED COMMON STOCK: 362,638 SHARES @ $29.9375 PER SHARE $10,856,475 $10,856,475 PURITAN FUND: 112,008.059 SHARES @ $20.07 PER SHARE $2,248,001 2,248,001 CONTRAFUND FUND: 79,138.441 SHARES @ $56.79 PER SHARE $4,494,272 4,494,272 INDEXED BOND FUND: 31,702.851 SHARES @ $10.93 PER SHARE $346,512 346,512 MULTI-ASSET FUND: 68,193.101 SHARES @ $15.36 PER SHARE $1,047,446 1,047,446 INDEXED EQUITY FUND: 10,428.763 SHARES @ $33.39 PER SHARE $348,217 348,217 JANUS WORLDWIDE FUND: 11,714.329 SHARES @ $47.36 PER SHARE $554,791 554,791 BT PYRAMID GIC FUND $1,165,028 1,165,028 CASH & CASH EQUIVALENTS 202,839 202,839 AMOUNTS RECEIVABLE: FROM SPONSOR 60,046 60,046 FROM PLAN PARTICIPANTS 232,343 232,343 LOANS RECEIVABLE FROM PLAN PARTICIPANTS 792,691 792,691 TOTAL ASSETS $11,059,314 $2,248,001 $4,494,272 $346,512 $1,047,446 $348,217 $554,791 $1,165,028 $792,691 $292,389 $22,348,661 LIABILITIES -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- NET ASSETS AVAILABLE FOR PLAN BENEFITS $11,059,314 $2,248,001 $4,494,272 $346,512 $1,047,446 $348,217 $554,791 $1,165,028 $792,691 $292,389 $22,348,661 =========== ========== ========== ======== ========== ======== ======== ========== ======== ======== =========== The accompanying notes are an integral part of these financial statements. -3-
/13 IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS DECEMBER 31, 1997
PARTICIPANT - DIRECTED FUNDS IONICS, INC. INDEXED MULTI- INDEXED JANUS BT PARTIC- COMMON PURITAN CONTRAFUND BOND ASSET EQUITY WORLDWIDE PYRAMID IPANT CASH/ STOCK FUND FUND FUND FUND FUND FUND FUND GIC FUND LOANS OTHER TOTAL ASSETS: INVESTMENTS @ MARKET (SEE NOTES 2,3 & 7) IONICS, INCORPORATED COMMON STOCK: 327,902 SHARES @ $39.125 PER SHARE $12,829,166 $12,829,166 PURITAN FUND: 98,235.430 SHARES @ $19.38 PER SHARE $1,903,802 1,903,802 CONTRAFUND FUND: 73,804.616 SHARES @ $46.63 PER SHARE $3,441,509 3,441,509 INDEXED BOND FUND: 14,085.539 SHARES @ $10.74 PER SHARE $151,279 151,279 MULTI-ASSET FUND: 33,107.937 SHARES @ $14.83 PER SHARE $490,991 490,991 INDEXED EQUITY FUND: 2,404.482 SHARES @ $27.05 PER SHARE $65,041 65,041 JANUS WORLDWIDE FUND: 6,281.68 SHARES @ $37.78 PER SHARE $237,322 237,322 BT PYRAMID GIC FUND $965,208 965,208 CASH & CASH EQUIVALENTS 158,563 30 158,593 AMOUNTS RECEIVABLE: FROM SPONSER 54,277 54,277 FROM PLAN PARTICIPANTS 209,476 209,476 LOANS RECEIVABLE FROM PLAN PARTICIPANTS $682,144 682,144 TOTAL ASSETS $12,987,729 $1,903,802 $3,441,509 $151,279 $490,991 $ 65,041 $237,322 $965,208 $682,144 $263,783 $21,188,808 LIABILITIES -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- NET ASSETS AVAILABLE FOR PLAN BENEFITS $12,987,729 $1,903,802 $3,441,509 $151,279 $490,991 $ 65,041 $237,322 $965,208 $682,144 $263,783 $21,188,808 =========== ========== ========== ======== ======== ======== ======== ======== ======== ======== =========== The accompanying notes are an integral part of these financial statements. -4-
/14 IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998
PARTICIPANT - DIRECTED FUNDS IONICS, INC. INDEXED MULTI- INDEXED JANUS BT COMMON PURITAN CONTRAFUND BOND ASSET EQUITY WORLDWIDE PYRAMID STOCK FUND FUND FUND FUND FUND FUND FUND GIC FUND SUB-TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS - BEGINNING OF YEAR $12,987,729 $1,903,802 $3,441,509 $151,279 $ 490,991 $ 65,041 $237,322 $ 965,208 $20,242,881 NET INVESTMENT INCOME, PRINCIPALLY INTEREST AND DIVIDENDS 5,609 231,338 331,178 20,502 154,945 14,538 2,132 55,803 816,045 NET APPRECIATION(DEPREC- IATION)IN THE FAIR VALUE OF INVESTMENTS (3,135,925) 87,485 734,112 (2,727) (34,794) 50,472 86,030 (2,215,347) CONTRIBUTIONS: PARTICIPANTS EMPLOYER ACQUISITIONS LOAN ADVANCES LOAN REPAYMENTS TRANSFERS 1,649,130 25,376 (12,527) 177,458 436,304 218,166 229,307 144,017 2,867,231 DISTRIBUTIONS TO PARTICIPANTS (447,229) (447,229) NET INCREASE(DECREASE) (1,928,415) 344,199 1,052,763 195,233 556,455 283,176 317,469 199,820 1,020,700 NET ASSETS AVAILABLE FOR PLAN BENEFITS - END OF YEAR $11,059,314 $2,248,001 $4,494,272 $346,512 $1,047,446 $348,217 $554,791 $1,165,028 $21,263,581 =========== ========== ========== ======== ========== ======== ======== ========== =========== The accompanying notes are an integral part of these financial statements. -5- /15 Page 1 of 2
IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998
PARTICIPANT - DIRECTED FUNDS SUB-TOTAL PARTICIPANT CASH/ Page 1 LOANS OTHER TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS - BEGINNING OF YEAR $20,242,8$ $ 682,144 $ 263,783 $21,188,808 NET INVESTMENT INCOME, PRINCIPALLY INTEREST AND DIVIDENDS 816,045 74,167 408 890,620 NET APPRECIATION(DEPREC- IATION)IN THE FAIR VALUE OF INVESTMENTS (2,215,347) (2,215,347) CONTRIBUTIONS: PARTICIPANTS 3,743,207 3,743,207 EMPLOYER 778,688 778,688 ACQUISITIONS 6,463 126,857 133,320 LOAN ADVANCES 425,845 (425,845) - 0 - LOAN PAYMENTS (366,140) 366,140 - 0 - TRANSFERS 2,867,231 (2,867,231) - 0 - DISTRIBUTIONS TO PARTICIPANTS (447,229) ( 29,788) (1,693,618) (2,170,635) NET INCREASE(DECREASE) 1,020,700 110,547 28,606 1,159,853 NET ASSETS AVAILABLE FOR PLAN BENEFITS - END OF YEAR $21,263,581 792,691 $ 292,389 $22,348,661 =========== ========== =========== =========== The accompanying notes are an integral part of these financial statements. /16 Page 2 of 2
IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997
PARTICIPANT - DIRECTED FUNDS IONICS, INC. ASSET INDEXED MULTI- INDEXED JANUS BT COMMON PURITAN MANAGER CONTRAFUND BOND ASSET EQUITY WORLDWIDE PYRAMID STOCK FUND FUND FUND FUND FUND FUND FUND FUND GIC FUND SUB-TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS - BEGINNING OF YEAR $14,909,485 $1,549,304 $373,535 $2,510,380 $ -0- $ -0- $ -0- $ -0- $868,421 $20,211,125 NET INVESTMENT INCOME, PRINCIPALLY INTEREST AND DIVIDENDS 4,530 152,513 6,618 327,767 9,607 55,298 1,895 16,036 53,487 627,751 NET APPRECIATION(DEPREC- IATION)IN THE FAIR VALUE OF INVESTMENTS (2,880,259) 187,359 45,574 310,606 (8,003) (30,496) (91) (15,504) (2,390,814) CONTRIBUTIONS: PARTICIPANTS EMPLOYER ACQUISITIONS LOAN PAYMENTS TRANSFERS 1,383,234 14,626 (425,727) 292,756 149,675 466,189 63,237 236,790 44,717 2,225,497 WITHDRAWALS BY AND DISTRIBUTIONS TO PARTICIPANTS (429,261) (1,417) (430,678) NET INCREASE(DECREASE) (1,921,756) 354,498 (373,535) 931,129 151,279 490,991 65,041 237,322 96,787 31,756 NET ASSETS AVAILABLE FOR PLAN BENEFITS - END OF YEAR $12,987,729 $1,903,802 $0 $3,441,509 $151,279 $490,991 $65,041 $237,322 $965,208 $20,242,881 =========== ========== ========= ========== ======== ======== ======= ======== ======== =========== The accompanying notes are an integral part of these financial statements. -6- /17 Page 1 of 2
IONICS SECTION 401(K) STOCK SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 PARTICIPANT - DIRECTED FUNDS SUB-TOTAL PARTICIPANT CASH/ PAGE 1 LOANS OTHER TOTAL NET ASSETS AVAILABLE FOR PLAN BENEFITS - BEGINNING OF YEAR $20,211,125 $ 644,327 $ 733,125 $21,588,577 NET INVESTMENT INCOME, PRINCIPALLY INTEREST AND DIVIDENDS 627,751 57,270 13,184 698,205 NET APPRECIATION(DEPREC- IATION)IN THE FAIR VALUE OF INVESTMENTS (2,390,814) (2,390,814) CONTRIBUTIONS: PARTICIPANTS 2,617,995 2,617,995 EMPLOYER 750,045 750,045 ACQUISITIONS 198,953 198,953 LOAN PAYMENTS (505,099) 441,256 (63,843) TRANSFERS 2,225,497 (2,225,497) 0 WITHDRAWALS BY AND DISTRIBUTIONS TO PARTICIPANTS (430,678) 485,646 (2,265,278) (2,210,310) NET INCREASE(DECREASE) 31,756 37,817 (469,342) (399,769) NET ASSETS AVAILABLE FOR PLAN BENEFITS - END OF YEAR $20,242,881 $ 682,144 $ 263,783 $21,188,808 =========== ========== =========== =========== The accompanying notes are an integral part of these financial statements. /18 Page 2 of 2
IONICS SECTION 401(K) STOCK STOCK SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 1: THE PLAN AND ITS PROVISIONS The Ionics Section 401(k) Stock Savings Plan (the "Plan") became effective January 1, 1986. Effective May 1, 1994, the Plan was amended to provide a broader range of investment selections for Plan participants and the opportunity to change investment elections on a quarterly basis. Other amendments to the Plan were also adopted, including provisions to permit participants to borrow from their accounts. On August 25, 1997, the Plan was amended to increase the number of investment options, reduce the period for changing contribution rates from quarterly to monthly, and institute daily account valuation. In addition, the trustee was changed from PNC Bank to New York Life Trust Company. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan qualified under Section 401(k) of the U.S. Internal Revenue Code covering all permanent employees of Ionics, Incorporated and domestic subsidiaries (the "Company") working at least 20 hours per week who have completed one year of service. The Plan was established to provide benefits to participants upon retirement, termination of employment, death, permanent and total disability, or demonstration of financial hardship. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. Investment Options The following investment options are available to participants: Ionics, Incorporated Common Stock Fund - This fund invests directed contributions solely in common stock of the Company. Fidelity Puritan Fund - This mutual fund maintains a broadly based conservatively managed diversified investment portfolio which is primarily income oriented with a secondary emphasis on growth. Its portfolio consists principally of high yielding common and preferred stocks and corporate bonds. Fidelity Contrafund - This mutual fund invests primarily in common stocks and securities convertible into common stocks, and has capital appreciation as its investment objective. -7- /19 MainStay Institutional Indexed Bond Fund - This income mutual fund invests in investment grade corporate and U.S. Government bonds, mortgage- backed securities and asset-backed securities. The fund measures itself by the Salomon Brothers Broad Investment Grade Bond Index. MainStay Institutional Multi-Asset Fund - This fund is an asset allocation mutual fund which varies the amount invested in each class of assets, based on anticipated risks and returns associated with each class. The fund invests in domestic and foreign common stocks, fixed income securities and money market instruments. Its objective is to maximize total return. MainStay Institutional Indexed Equity Fund - This fund is a growth and income mutual fund. The fund seeks to correspond with the Standard & Poor's Composite Index of 500 Stocks. Janus Worldwide Fund - This fund seeks long-term growth with preservation of capital. It invests mainly in common stocks of domestic and foreign issuers. It will normally invest in issuers from at least five different countries, including the United States. Foreign investing may be subject to greater risks than domestic investing. BT Pyramid GIC Fund - This fund, administered by The Bankers Trust Company, invests primarily in Guaranteed Investment Contracts and Bank Investment Contracts and Bankers Trust Commingled short-term investment funds, and has as its objectives safety of principal, stability, superior yields and a predictable annual return. The fund sets an estimated range of return on an annual basis, but because results can be affected by economic or market conditions, it does not guarantee the rate. All cash transactions, including contributions, fund purchases, fund liquidations, loans, distributions, etc. were made through a conduit account, which is an interest bearing cash account with the PNC Bank, New England. On August 25, 1997 this account was changed to the MainStay Institutional Money Market Fund. Participant Contributions Employees who meet certain length of service requirements may elect to become participants in the Plan and contribute, on a pre-tax basis, from 1% to 12% of their compensation as defined by the Plan. The annual amounts so contributed by employees are subject to certain federal income tax limitations. Contributions made by employees to the Plan may be used to purchase either common stock of the Company or may be directed to be invested in any of the available investment funds. Participant Accounts Each participant's account is credited with the participant's contribution and an allocation of Plan earnings. Allocations are based on total investment earnings and average participant investment balances, as defined. -8- /20 Company Contribution The terms and conditions of the Plan provide for the Company to contribute 50% of the first 6% an employee elects to invest in common stock of the Company (subject to certain limitations). The maximum annual amount that the Company may contribute on behalf of employees is currently $900,000, and that limit is set by the Board of Directors of the Company. Matching Company contributions under the Plan are invested solely in common stock of the Company. Non-vested Company contributions may, subject to certain restrictions, be forfeited upon withdrawal of the employee from the Plan and be used as a credit to reduce future Company contributions. Vesting All participant contributions are 100% vested when made. Company matching contributions are vested in increasing percentages based on the years of service of the individual employee, from 33 1/3% after two years to 100% after four years. Plan Expenses The Plan provides that all expenses of the Plan and its administration shall be paid by the Company. Withdrawals A participant can make a hardship withdrawal of his or her own contributions, subject to Internal Revenue Service restrictions. A participant may withdraw the entire vested amount due to his or her own contributions after attaining age 59 1/2. Loans A participant can borrow money from his or her vested account subject to certain rules including a minimum amount of $1,000 and a maximum amount not to exceed the lesser of 50% of the participant's total vested account balance or $50,000. Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are presented on the accrual basis of accounting. Valuation of Investments Investment of the Plan in Ionics, Incorporated common stock is stated at market, market being the last sale price on December 31, 1998 of Ionics, Incorporated common stock as reported on the New York Stock Exchange. Investments in the Plan of the Fidelity Funds, the Mainstay Institutional Funds and the BT Pyramid GIC Fund are stated at the Net Asset Value of the funds reported as of December 31, 1998. -9- /21 The Plan presents in the statement of changes in net assets available for plan benefits the net appreciation (depreciation) in the fair value of its investments which consist of realized gains or losses and the unrealized appreciation (depreciation) of these investments. Payment of Benefits Benefits are recorded when paid. Note 3: INVESTMENTS The following is a summary of investments at December 31, 1998 and 1997, respectively:
Market Value Cost 1998 1997 1998 1997 Investments At Fair Value As Determined By Quoted Market Price Ionics, Incorporated Common Stock $10,856,475 $12,829,166 $ 9,964,585 $ 8,627,726 Fidelity Investments: Puritan 2,248,001 1,903,802 1,952,133 1,651,163 Contrafund 4,494,272 3,441,509 3,365,420 2,897,030 Mainstay Institutional: Indexed Bond 346,512 151,279 353,422 160,749 Multi-Asset 1,047,446 490,991 1,113,981 521,808 Indexed Equity 348,217 65,041 301,639 65,042 Money Market 202,839 158,593 202,839 158,593 Janus Worldwide Fund: 554,791 237,322 484,674 250,472 BT Pyramid GIC Fund: 1,165,028 965,208 1,165,028 965,208 Other Investments Participant Loans 792,691 682,144 792,691 682,144 $22,056,272 $20,925,055 $19,696,412 $15,979,935
Note 4: INCOME TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated September 12, 1995 that the Plan is qualified and the trust established under the Plan is tax-exempt, under the appropriate sections of the Code. -10- /22 Note 5: PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. Note 6: RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 1998 and 1997 to Form 5500:
1998 1997 Net assets available for benefits per the financial statements $22,348,661 $21,188,808 Amounts allocated to withdrawing participants (171,046) (99,676) Net assets available for benefits per the form 5500 $22,177,615 $21,089,132
The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 1998 to Form 5500: Distributions to participants per the financial statements: $ 2,170,635 Add: Amounts allocated to withdrawing participants at December 31, 1998 171,046 Less: Amounts allocated to withdrawing participants at December 31, 1997 ( 99,676) Benefits paid to participants per Form 5500 $ 2,242,005 Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. -11- /23 ATTACHMENT TO FORM 5500 EIN: 04-2068530 PN: 003 SCHEDULE I IONICS SECTION 401(K) STOCK SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998
Face Amount, Shares or Current Description of Investment Rate Cost Value Ionics, Incorporated Common Stock 362,638 $ 9,964,585 $10,856,475 Fidelity Investments: Puritan Fund 112,008 1,952,133 2,248,001 Contrafund 79,138 3,365,420 4,494,272 MainStay Institutional: Indexed Bond 31,703 353,422 346,512 Multi-Asset Fund 68,193 1,113,981 1,047,446 Indexed Equity Fund 10,429 301,639 348,217 Money Market 202,839 202,839 Janus Worldwide Fund 11,714 484,674 554,791 BT Pyramid GIC Fund 1,165,028 1,165,028 Participant Loans (Rate of Interest 7.43% to 10.50%) -0- 792,691 Total Funds Invested $18,903,721 $22,056,272
The accompanying notes are an integral part of these supplemental schedules. -12- /24 ATTACHMENT TO FORM 5500 SCHEDULE II EIN: 04-2068530 PN: 003 IONICS SECTION 401(K) STOCK SAVINGS PLAN ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1998
Current Value Of Asset On Purchase Selling Cost of Transaction Net Gain Description of Asset Price Price Asset Date (Loss) INDIVIDUAL TRANSACTIONS None SERIES OF TRANSACTIONS Purchase: Company Stock 59,710 shares of Ionics, Inc. Common Stock $2,017,841 Sale: Company Stock 9,830 shares of Ionics, Inc. Common Stock $ 403,109 $ 264,023 $ 403,109 $ 139,086 The accompanying notes are an integral part of these supplemental schedules.
-13- /25 ATTACHMENT TO FORM 5500 EIN: 04-2068530 PN: 003 SCHEDULE III IONICS SECTION 401(K) STOCK SAVINGS PLAN ITEM 27f - SCHEDULE OF NONEXEMPT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1998
(a) (b) (c) (d) (e) (h) (i) (j) Identity Current of Party Relationship Description of Purchase Selling Cost of Value Net Gain Involved to Plan Transaction Price Price Asset of Asset (Loss) Ionics, Employer Late payment of $ 2,925 $ 2,925 $ 2,925 $ 2,925 $ -0- Inc. contributions to the Plan Note: The total amount due for the nonexempt transaction was paid on January 20, 1999. The accompanying notes are an integral part of these supplemental schedules.
-14- /26 SIGNATURES Ionics Section 401(k) Stock Savings 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. IONICS SECTION 401(K) STOCK STOCK SAVINGS PLAN Date: June 23, 1999 By /s/John P. Bergeron John P. Bergeron Administrator and Vice President -15- /27 EXHIBIT 1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of the Ionics Section 401(k) Stock Savings Plan on Form S-8 (Registration No. 33-2092) of our report dated June 14, 1999 on our audits of the financial statements of the Ionics Section 401(k) Stock Savings Plan as of December 31, 1998 and 1997, which report is included in this Annual Report on Form 11-K of the Plan which is being filed as Exhibit 13(b) to the Annual Report on Form 10-K of Ionics, Incorporated for the year ended December 31, 1998. /s/BELANGER & COMPANY P.C. CERTIFIED PUBLIC ACCOUNTANTS Chelmsford, Massachusetts June 21, 1999 -16- /28 -----END PRIVACY-ENHANCED MESSAGE-----