United States
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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-12981
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AMETEK 401(K)PLAN FOR ACQUIRED BUSINESSES
(Full title of the plan)
AMETEK, INC.
37 NORTH VALLEY ROAD, BUILDING 4, P.O. BOX 1764
PAOLI, PENNSYLVANIA 19301-0801
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
AMETEK 401(K) Plan for Acquired Businesses
Financial Statements and Supplemental Schedule
Years ended December 31, 2002 and 2001
CONTENTS
Report of Independent Auditors......................................... 2
Financial Statements:
Statements of Assets Available for Benefits............................ 3
Statements of Changes in Assets Available for Benefits................. 4
Notes to Financial Statements.......................................... 5
Supplemental Schedule:
Schedule H -- Schedule of Assets (Held at End of Year)............... 12
Signatures............................................................ 13
Exhibit Index......................................................... 14
1
Report of Independent Auditors
Plan Administrative Committee
AMETEK 401(K) Plan for Acquired Businesses
We have audited the accompanying statements of assets available for benefits of
the AMETEK 401(K) Plan for Acquired Businesses as of December 31, 2002 and 2001,
and the related statements of changes in assets available for benefits for the
years then ended. These financial statements and schedule 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. 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 assets available for benefits of the Plan at December
31, 2002 and 2001, and the changes in its assets available for benefits for the
years then ended, in conformity with accounting principles generally accepted in
the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying schedule of assets (held
at end of year) as of December 31, 2002, is presented for purposes of additional
analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
May 30, 2003
2
AMETEK 401(K) Plan for Acquired Businesses
Statements of Assets Available for Benefits
DECEMBER 31,
2002 2001
-------------------------------
ASSETS:
Investments, at fair value $33,370,031 $38,442,839
----------- -----------
Receivables:
Employer contributions 106,535 176,651
Participants contributions 220,313 333,974
----------- -----------
Total receivables 326,848 510,625
----------- -----------
Assets available for benefits $33,696,879 $38,953,464
=========== ===========
See accompanying notes.
3
AMETEK 401(K) Plan for Acquired Businesses
Statements of Changes in Assets Available for Benefits
YEAR ENDED DECEMBER 31,
2002 2001
------------------------------
ADDITIONS:
Interest and dividend income $ 812,896 $ 1,076,102
------------ ------------
Contributions:
Employer 1,581,183 1,746,344
Participants 3,049,036 3,416,586
Participant rollovers from other plans 188,009 5,761,368
------------ ------------
4,818,228 10,924,298
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Total additions 5,631,124 12,000,400
------------ ------------
DEDUCTIONS:
Net depreciation in fair value of investments 5,755,706 2,993,646
Benefits paid to participants 5,132,003 2,992,795
------------ ------------
Total deductions 10,887,709 5,986,441
------------ ------------
Net (decrease) increase (5,256,585) 6,013,959
Assets available for benefits:
Beginning of year 38,953,464 32,939,505
------------ ------------
End of year $ 33,696,879 $ 38,953,464
============ ============
See accompanying notes.
4
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
1. DESCRIPTION OF PLAN
GENERAL
The following brief description of the AMETEK 401(K) Plan for Acquired
Businesses ("the Plan") provides only summarized information. Participants
should refer to the Plan document for a more complete description of the Plan's
provisions.
The Plan is a tax-deferred 401(k) defined contribution savings plan which
provides eligible employees of businesses acquired by AMETEK, Inc. ("AMETEK", or
"the Company"), an opportunity to invest a portion of their compensation, as
defined by the Plan, in one or a combination of investment programs (see Note
3).
CONTRIBUTIONS
Each year, participants have an opportunity to invest up to 50% (14% prior to
July 1, 2002) of their annual compensation, as defined by the Plan, in multiples
of one percent, except for certain highly compensated participants who may be
subject to certain regulatory limitations. Participants may also contribute
amounts representing rollovers from other qualified plans. The Plan provides for
Company contributions equal to 100% of the amount contributed by each
participant, up to a maximum percentage ranging from 2% to 6% of the
participants' compensation as determined by the Board of Directors for each
business. Matching Company contributions are credited to participants' accounts
at the same time their contributed compensation is invested. However, the
Company may make its matching contribution payment to the Plan at anytime prior
to the due date prescribed by law for filing the Company's federal income tax
return for that Plan year.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan net earnings.
Allocations are based on participant earnings and/or account balances. The
benefit to which a participant is entitled is the balance in the participant's
account.
VESTING
Participants are fully vested at all times in both their contributions to the
Plan and in Company contributions.
5
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
1. DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT LOANS
Participants may borrow a minimum of $1,000 or up to a maximum equal to the
lesser of $50,000 or 50% of their account balance. Participants may have up to
two loans outstanding at any time, the sum of which may not exceed the maximum
allowable. Repayment terms of the loan are generally limited to no longer than
60 months from inception or for a reasonable period of time in excess of 60
months for the purchase of a principal residence, as fixed by the Plan's
Administrative Committee. The loans are secured by the balance in the
participant's account, and bear interest at rates established by the Plan's
administrative committee, which approximate rates charged by commercial lending
institutions for comparable loans. Interest rates on loans outstanding at
December 31, 2002 ranged between 5.2% and 11.5%. Principal and interest is paid
ratably through payroll deductions.
PAYMENT OF BENEFITS
On termination of service, death, disability or retirement, a participant may
receive a lump-sum amount equal to his or her vested account or elect to receive
payment in installments up to a 15 year period but subject to certain
restrictions based on life expectancy. Participants with a vested account value
of less than $5,000 will be paid in a lump sum as soon as practicable after
retirement, termination, disability or death of the participant. When a
participant attains age 59-1/2 while still an employee, he or she can elect to
withdraw a specified portion of his or her vested account balance. Also, in
certain cases of financial hardship, a participant may elect to withdraw up to a
specified portion of his or her vested account balance, regardless of age.
PLAN TERMINATION
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
While the Company has not expressed any intent to terminate the Plan, it is free
to do so at any time subject to the provisions of the Employee Retirement Income
Security Act of 1974 as amended ("ERISA"), and applicable labor agreements. In
the event of Plan termination, each participant will receive the value of his or
her separate vested account.
6
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL STATEMENTS AND PRESENTATION FORMAT
The accompanying financial statements have been prepared on the accrual basis of
accounting, except for the non-accrual of a liability for amounts owed to
withdrawing participants, which are reflected in plan equity in accordance with
accounting principles generally accepted in the United States (see Note 6). The
accompanying financial statements have been prepared in accordance with
Statement of Position (SOP) 99-3, "Accounting for and Reporting of Certain
Defined Contribution Benefit Plan Investments and Other Disclosure Matters." The
report format eliminates the financial statement disclosure of investment
programs in a multi-column format and streamlines certain footnote disclosures.
The prior period information has been reformatted for comparative purposes.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates and
assumptions.
INVESTMENT VALUATION AND INCOME RECOGNITION
The shares of registered investment companies are valued at quoted market
prices, which represent the net asset values of shares held by the Plan at
year-end. The fair value of the participation units in the common/collective
trust is based on quoted redemption values on the last business day of the plan
year. Money market and short-term investments are carried at the fair value
established by the issuer and/or the trustee. The participant loans are valued
at their outstanding balances, which approximates fair value.
Purchases and sales of investments are reflected on trade dates. Realized gains
and losses on sales of investments are based on the average cost of such
investments. Interest income is recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date. Income from other investments is recorded
as earned.
The net depreciation of investments represents the sum of the change in the
difference between year-end market value and cost of investments, and the
difference between the proceeds received and the cost of investments sold during
the year.
7
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
3. INVESTMENT PROGRAMS
At December 31, 2002 and 2001, the Vanguard Fiduciary Trust Company was the
Trustee and a party-in-interest of the Plan.
A participant may direct contributions (up to certain specified limits) in any
of the following investment options.
- - AMETEK Stock Fund
- - Vanguard Retirement Savings Master Trust
Registered investment companies:
- - Vanguard Prime Money Market Fund
- - Vanguard Total Bond Market Index Fund
- - Vanguard LifeStrategy Funds
- - Vanguard Wellington Fund
- - Vanguard Windsor II Fund
- - Vanguard PRIMECAP Fund
- - Vanguard International Growth Fund
- - Vanguard Small-Cap Index Fund
- - Vanguard 500 Index Fund
- - Fidelity Magellan Fund
- - BlackRock Small Cap. Fund
Participants may change their investment options or transfer existing account
balances to other investment options daily.
8
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
3. INVESTMENT PROGRAMS (CONTINUED)
The fair value of individual investments that represent 5% or more of the Plan's
assets at year-end are as follows:
DECEMBER 31,
2002 2001
--------------------------
Vanguard Retirement Savings Master Trust * $2,313,938 $1,383,879
Vanguard Prime Money Market Fund 2,867,625 2,877,021
Vanguard Total Bond Market Index Fund* 2,168,318 1,637,206
Vanguard LifeStrategy Growth Fund 2,044,346 2,371,647
Vanguard LifeStrategy Moderate Growth Fund 3,692,837 4,957,989
Vanguard Wellington Fund 2,383,499 2,941,777
Vanguard Windsor II Fund** 1,478,292 1,936,559
Vanguard PRIMECAP Fund 5,102,774 6,986,725
Vanguard 500 Index Fund 4,486,595 5,701,647
Fidelity Magellan Fund** 1,490,135 2,012,228
* At December 31, 2001, these investments represented less than 5% of the fair
value of the Plan's net assets.
** At December 31, 2002, these investments represented less than 5% of the fair
value of the Plan's net assets.
During 2002 and 2001, the Plan's investments (including gains and losses on
investments bought, sold, as well as held during the year) appreciated
(depreciated) in value as follows:
DECEMBER 31,
2002 2001
--------------------------
Common Stock $191,889 $183,069
Registered investment companies (5,947,595) (3,176,715)
---------- ----------
($5,755,706) ($2,993,646)
=========== ===========
9
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated October 24, 2002, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended and restated. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its qualification. The plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan, as
amended and restated, continues to be qualified and the related trust is tax
exempt.
5. ADMINISTRATIVE EXPENSES
The expenses of administering the Plan are payable from the trust funds, unless
the Company elects to pay such expenses. From inception of the Plan to the
present, the Company elected to pay such expenses directly.
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements to the Plan's Form 5500:
DECEMBER 31,
2002 2001
-------------------------------
Assets available for benefits per the
financial statements $ 33,696,879 $ 38,953,464
Amounts owed to withdrawing participants (160,574) (1,375,107)
------------ ------------
Assets available for benefits per Form 5500 $ 33,536,305 $ 37,578,357
============ ============
10
AMETEK 401(K) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2002
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 (CONTINUED)
The following is a reconciliation of benefits paid to participants for the year
ended December 31, 2002 per the financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2002
-----------
Benefits paid to participants per the financial statements $ 5,132,003
Add: Amounts allocated to withdrawing participants at
December 31, 2002 160,574
Less: Amounts allocated to withdrawing participants at
December 31, 2001 (1,375,107)
----------
Benefits paid to participants per Form 5500 $ 3,917,470
===========
Amounts allocated to withdrawing participants are recorded on the Plan's 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
AMETEK 401(K) Plan for Acquired Businesses
Form 5500, Schedule H, Line 4i --
Schedule of Assets (Held at End of Year)
December 31, 2002
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, LESSOR, INTEREST, COLLATERAL, PAR, OR CURRENT
OR SIMILAR PARTY MATURITY VALUE VALUE
- -----------------------------------------------------------------------------------------------------
AMETEK Stock Fund* Common Stock Fund $ 1,122,743
Vanguard Retirement Savings Master Trust* Common/Collective Trust 2,313,938
Vanguard Prime Money Market Fund* Registered Investment Company 2,867,625
Vanguard Total Bond Market Index Fund* Registered Investment Company 2,168,318
Vanguard LifeStrategy Conservative
Growth Fund* Registered Investment Company 866,718
Vanguard LifeStrategy Growth Fund* Registered Investment Company 2,044,346
Vanguard LifeStrategy Moderate Growth
Fund* Registered Investment Company 3,692,837
Vanguard Wellington Fund* Registered Investment Company 2,383,499
Vanguard Windsor II Fund* Registered Investment Company 1,478,292
Vanguard PRIMECAP Fund* Registered Investment Company 5,102,774
Vanguard International Growth Fund* Registered Investment Company 551,099
Vanguard Small-Cap Index Fund* Registered Investment Company 660,057
Vanguard 500 Index Fund* Registered Investment Company 4,486,595
Fidelity Magellan Fund Registered Investment Company 1,490,135
BlackRock Small Cap. Fund Registered Investment Company 555,437
Participant Loans* Interest rates ranging
From 5.2% to 11.5% 1,585,618
-----------
$33,370,031
===========
* Indicates party-in-interest to the Plan
12
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Members of the Administrative Committee have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
AMETEK 401(K) Plan
for Acquired Businesses
------------------------------------
(Name of Plan)
Dated: June 18, 2003 By: /s/ John J. Molinelli
---------------------------------
John J. Molinelli, Member,
Administrative Committee
13
THE AMETEK 401(K) PLAN FOR ACQUIRED BUSINESSES
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
23 Consent of Independent Auditors
99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
14
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
Forms S-8 (File Nos. 333-34789, 333-80449, 333-97969, 333-87491, and 333-91507)
pertaining to the 1997 Stock Incentive Plan of AMETEK, Inc., the 1999 Stock
Incentive Plan of AMETEK, Inc., the 2002 Stock Incentive Plan of AMETEK, Inc.,
The AMETEK Retirement and Savings Plan and the AMETEK 401(K) Plan for Acquired
Businesses, and the AMETEK Inc. Deferred Compensation Plan, respectively, and to
the incorporation by reference in the Registration Statement on Form S-3 (File
No. 333-75892), and in the related Prospectuses, of our report dated May 30,
2003, with respect to the financial statements of the AMETEK 401(K) Plan for
Acquired Businesses included in this Annual Report (Form 11-K) for the year
ended December 31, 2002.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 16, 2003
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of the AMETEK 401(K) Plan for Acquired
Businesses (the "Plan") on Form 11-K for the year ended December 31, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, John J. Molinelli, Member, Administrative Committee, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(a) The Report fully complies with Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
(b) The information contained in the Report fairly presents, in all material
respects, the assets available for benefits and changes in assets
available for benefits of the Plan.
/s/ John J. Molinelli
- -------------------------
John J. Molinelli, Member
Administrative Committee
Date: June 18, 2003
A signed original of this written statement required by Section 906 has been
provided to AMETEK, Inc., the Plan Sponsor, and will be retained by AMETEK, Inc.
and furnished to the Securities and Exchange Commission or its staff upon
request.
