11-K 1 y61796e11vk.txt FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT UNDER SECTION 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the year ended December 31, 2001 Commission file number 000-21109 CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN -------------------------------------------------------------------------------- (Full title of the plan) CUNO INCORPORATED 400 RESEARCH PARKWAY MERIDEN, CONNECTICUT 06450 -------------------------------------------------------------------------------- (Name and issuer of the securities held pursuant to the plan and the address of its principal executive office) CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Page ---- Report of Independent Auditors Statements of Assets Available for Plan Benefits 1 Statements of Changes in Assets Available for Plan Benefits 2 Notes to Financial Statements 3-6 Supplemental Schedule Schedule H, Line 4(i) -- Schedule of Assets Held for Investment Purposes at Year End 7 Exhibit 23 -- Consent of Independent Auditors 8
REPORT OF INDEPENDENT AUDITORS Administrative Committee CUNO Incorporated Savings and Retirement Plan We have audited the accompanying statements of assets available for plan benefits of the CUNO Incorporated Savings and Retirement Plan (the "Plan") as of December 31, 2001 and 2000, and the related statements of changes in 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 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 plan benefits of the Plan at December 31, 2001 and 2000, and the changes in its assets available for plan 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 financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes at year end as of December 31, 2001 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 Hartford, Connecticut June 17, 2002 CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS DECEMBER 31, 2001 AND 2000
DECEMBER 31, 2001 2000 ----------- ----------- Investments: Mutual funds $19,887,033 $20,344,094 CUNO Incorporated common stock 5,366,425 4,548,618 Participant loans receivable 975,371 970,517 ----------- ----------- 26,228,829 25,863,229 Contributions receivable: Employer 716,608 631,920 Participants 53,873 40,276 ----------- ----------- 770,481 672,196 ----------- ----------- Assets available for plan benefits $26,999,310 $26,535,425 =========== ===========
See accompanying notes. -1- CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS YEAR ENDED DECEMBER 31, 2001 AND 2000
DECEMBER 31, 2001 2000 ------------ ------------ Additions to net assets attributed to: Interest income $ 85,948 $ 81,434 Dividend income 328,444 1,068,152 ------------ ------------ 414,392 1,149,586 Contributions: Participants 2,225,291 1,963,458 Employer 716,608 631,920 Transfer of assets from merged plan 900,875 ------------ ------------ 3,842,774 2,595,378 ------------ ------------ Total Additions 4,257,166 3,744,964 Benefits paid to participants (1,742,590) (1,570,498) Net realized and unrealized depreciation in fair value of investments (2,050,691) (1,225,820) ------------ ------------ Net increase in assets available for plan benefits 463,885 948,646 Assets available for plan benefits at beginning of year 26,535,425 25,586,779 ------------ ------------ Assets available for plan benefits at end of year $ 26,999,310 $ 26,535,425 ============ ============
See accompanying notes. -2- CUNO Incorporated Savings and Retirement Plan Notes to Financial Statements December 31, 2001 NOTE 1 -- DESCRIPTION OF PLAN The CUNO Incorporated Savings and Retirement Plan (the "Plan") consists of a pre-tax saving program, a post-tax savings program, and an employer matching program. The Plan was adopted as of September 10, 1996. All employees of CUNO Incorporated (the "Company" or "Plan Sponsor" or "Employer") that have one month of service following their initial date of employment are eligible to participate in the Plan. The Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Under the pre-tax program, participants may elect to contribute up to 15 percent of their compensation, on a tax-deferred basis, to the Plan. Under the post-tax program, participants may elect to contribute up to an additional seven percent of their compensation. These contributions are made with after-tax dollars and do not receive Company matching contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. The Company makes an annual discretionary matching contribution, in the form of Company common stock, that represents a percentage of the participants' pre-tax contributions. The matching percentage is applied to each participant's pre-tax contributions not exceeding 6 percent of eligible compensation. All investment account dollars that result from employee contributions and related Plan earnings are immediately vested. Company matching contributions plus actual earnings thereon vest based on years of continuous service. A participant is 100 percent vested after five years of credited service. Participants also become fully vested in Company matching contributions upon attainment of their normal retirement date, or upon their death or disability. If the participant's employment with the Company terminates for other reasons, and the participant elects to receive distribution of his or her account, the vested portion of his or her account is distributed to the participant and the non-vested portion of the participant's account is used to reduce the Company matching contribution. There were no non-vested assets attributed to terminated employees at December 31, 2001 or 2000. Fully-vested amounts allocated to accounts of persons who have elected to withdraw from the Plan amounted to $3,889,258 and $2,005,809 at December 31, 2001 and 2000, respectively. -3- CUNO Incorporated Savings and Retirement Plan Notes to Financial Statements (continued) NOTE 1 -- DESCRIPTION OF PLAN (CONTINUED) The Plan provides for separate investment options in one or more funds as directed by the participants. These options include the Merrill Lynch Retirement Preservation Trust, Dreyfus Premier Balanced Fund, Merrill Lynch Fundamental Growth Fund, Merrill Lynch S&P 500 Index Fund, Van Kampan American Value Fund, Oppenheimer International Growth Fund, Alliance Technology Fund, JP Morgan US Equity Fund, Merrill Lynch US Government Mortgage Fund, Lord Abbett Developing Growth Fund, and the CUNO Stock Fund. The participants may change their investment alternatives semi-annually. The Plan is administered by the Administrative Committee (the "Committee") appointed by the Company's Board of Directors. Merrill Lynch Trust Company is the Plan's trustee. The Company has the sole right to appoint the trustee, and to terminate the Plan, subject to the provisions of ERISA. The Company pays all significant administrative expenses. Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. Loan terms range from 1-5 years, except for the purchase of a primary residence, which term may be a reasonable period of time that may exceed five years. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator. Principal and interest is paid ratably through monthly payroll deductions. 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. The foregoing description of the Plan provides only general information. Additional information about the plan agreement, forfeitures, and distributions from the Plan may be obtained from the Plan Document. -4- CUNO Incorporated Savings and Retirement Plan Notes to Financial Statements (continued) NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES VALUATION OF INVESTMENTS Investments in common stock of CUNO Incorporated are carried at the closing market price on the last business day of the year. Participant loans receivable are stated at realizable value which approximates fair value. Investments in mutual funds are carried at the fair value of their underlying net assets as determined by their respective fund managers, based primarily on market data. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the administrator to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NOTE 3 - INVESTMENTS The following presents investments which represent 5% or more of the Plan's net assets:
DECEMBER 31, 2001 2000 ---------- ---------- Merrill Lynch Fundamental Growth Fund, 345,751 and 333,943 shares $6,175,106 $7,420,220 Dreyfus Premier Balanced Fund, 280,425 and 257,294 shares 3,645,524 3,753,923 Merrill Lynch Retirement Preservation Trust, 3,373,530 and 2,909,205 shares 3,373,530 2,909,205 Merrill Lynch S&P 500 Index Fund, 219,897 and 196,762 shares 3,096,151 3,183,613 Merrill Lynch US Government Mortgage Fund 144,822 and 89,562 shares 1,436,632 871,437 CUNO Common Stock, 175,948 and 169,649 shares 5,366,425 4,548,618
-5- CUNO Incorporated Savings and Retirement Plan Notes to Financial Statements (continued) NOTE 4 -- INCOME TAX STATUS The Plan has received an opinion letter from the Internal Revenue Service stating that the written form of the underlying prototype plan document is qualified under Section 401(a) of the Internal Revenue Code (the "Code"), and that any employer adopting this form of the Plan will be considered to have a plan qualified under Section 401(a) of the Code. Therefore, the related trust is exempt from taxation. 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 is qualified and the related trust is tax exempt. NOTE 5 -- TRANSACTIONS WITH PARTIES-IN-INTEREST The statements of changes in assets available for plan benefits reflect non-cash matching contributions from the Company consisting of shares of the Company's common stock. Such shares are recorded based on their fair market value. NOTE 6 - TRANSFER OF ASSETS FROM MERGED PLAN In March 1998, CUNO acquired Chemical Engineering Corporation ("CEC"). In May 2001, CEC's 401(k) plan merged with the Plan as part of the consolidation of the two companies. -6- CUNO Incorporated Savings and Retirement Plan Schedule H, Line 4(i) -- Schedule of Assets Held for Investment Purposes at Year End December 31, 2001
DESCRIPTION OF INVESTMENT, INCLUDING MATURITY DATE, RATE OF INTEREST, COLLATERAL, PAR OR IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR PARTY MATURITY VALUE COST CURRENT VALUE ----------------------------------------------------- -------------- ---- ------------- Merrill Lynch Retirement Preservation Trust 3,373,530 shares $ 3,373,530 $ 3,373,530 Dreyfus Premier Balanced Fund 280,425 shares 4,189,353 3,645,524 Merrill Lynch Fundamental Growth Fund 345,751 shares 7,635,124 6,175,106 Van Kampen American Value Fund 32,619 shares 693,799 614,210 Oppenheimer International Growth Fund 51,331 shares 997,236 772,535 Merrill Lynch S&P 500 Index Fund 219,897 shares 3,523,072 3,096,151 Alliance Technology Fund 9,686 shares 1,094,403 651,068 Lord Abbett Developing Growth Fund 4,966 shares 82,378 75,034 JP Morgan US Equity Fund 4,521 shares 53,980 47,243 Merrill Lynch US Government Mortgage Fund 144,822 shares 1,398,490 1,436,632 CUNO Incorporated common stock 175,948 shares 3,235,634 5,366,425 Participant Notes Loans receivable 975,371 975,371 ----------- $26,228,829 ===========
All of the above parties are considered parties-in-interest. The cost column is not applicable because all investment programs are fully participant directed. -7-