11-K 1 ionics401k2000.txt 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, 2000 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 its charter) MASSACHUSETTS 04-2068530 (State or other jurisdiction (IRS Employer Identification Number) of incorporation or organization) 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: Common Stock, $1 par value Name of each exchange on which registered: New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) 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, 2000 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, 2000 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, 2000 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 26, 2001 By /s/Stephen Korn ----------------------- Stephen Korn Vice President and General Counsel 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 Schedules on page IV-7. 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-7. 3. Exhibits Exhibit No. A. 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 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 May 2, * 2000 (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000). 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 Second Amended and Restated Credit * Agreement dated as of July 28, 2000, among the Company, Fleet National Bank and Fleet National Bank as agent (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000.) 10.3(1) Amended Agreement No. 1 to Second Amended and Restated Credit Agreement among the Company, Fleet National Bank and Fleet National Bank as Agent dated March 1, 2001. 10.3(2) Security Agreement dated as of March 1, 2001 by and among the Company, certain of its domestic subsidiaries, and Fleet National Bank as agent. 10.3(3) Escrow Agreement dated as of March 1, 2001 by and among the Company, Hutchins, Wheeler & Dittmar, and Fleet National Bank as agent. 10.3(4) Seventh Amended and Restated Revolving Credit Note dated March 1, 2001. 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 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). 10.12 Shareholders' Agreement dated as of * May 12, 2000, by and among the Company, Hafeez Karamath Engineering Services Limited, and Desalination Company of Trinidad and Tobago Ltd., as amended on June 16, 2000 (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000.) 10.13 Loan Agreement dated as of October 25, 2000 between the Company and Hafeez Karamath Engineering Services Limited. 13.0(a) Annual Report to Stockholders for the year ended December 31, 2000 (furnished for the information of the Commission and not to be deemed "filed" as part of this Report except to the extent that portions thereof are expressly incorporated herein by reference). 13.0(b) Annual Report of the Ionics Section 401(k) Stock Savings Plan on Form 11-K for the year ended December 31, 2000. 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 March 19, 2001, which is contained in the Registrant's Annual Report to Stockholders for the year ended December 31, 2000, and is included on page 6 of Exhibit 13 to this Form 10-K. 24.0 Power of Attorney. -------------------------- *incorporated herein by reference (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the last quarter of fiscal 2000. Exhibit No. 13(b) to Annual Report on Form 10-K of Ionics, Incorporated for the year ended December 31, 2000 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2000 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, MA 02472-2882 IONICS SECTION 401(k) STOCK SAVINGS PLAN INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 Page ---- Independent Auditor's Report 3 Financial Statements: Statements of Net Assets Available for Benefits at December 31, 2000 and 1999 4 Statements of Changes in Net Assets Available for Benefits for the year ended December 31, 2000 5 Notes to Financial Statements 6 Supplemental Schedules: Schedule of Assets Held for Investment Purposes at December 31, 2000 9 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 benefits of the Ionics Section 401(k) Stock Savings Plan (the Plan) as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. These financial statements and the schedule 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 benefits of the Plan as of December 31, 2000 and 1999 and the changes in its net assets available for benefits for the year ended December 31, 2000, 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 schedule of assets held for investment purposes is 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 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. BELANGER & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS Chelmsford, Massachusetts June 8, 2001 IONICS SECTION 401(k) STOCK SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS December 31, ------------------------------------- 2000 1999 ----------------- ---------------- Assets: Investments (see Note C) $ 25,348,894 $ 23,838,501 ----------------- ---------------- Receivables: Employer contribution 54,346 58,744 Participant contributions 264,942 245,022 ----------------- ---------------- Total receivables 319,288 303,766 ----------------- ---------------- Total assets 25,668,182 24,142,267 Liabilities 0 0 ----------------- ---------------- Net assets available for benefits $ 25,668,182 $ 24,142,267 ================= ================ See accompanying Notes to the financial statements. IONICS SECTION 401(k) STOCK SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Year Ended December 31, 2000 ----------------- Additions: Additions to net assets attributed to: Investment income: Net depreciation in fair value of investments (see Note C) $ (440,865) Interest 140,897 Dividends 174,522 ---------------- (125,446) ---------------- Contributions: Participant 3,172,834 Employer 689,653 ---------------- 3,862,487 ---------------- Total additions 3,737,041 Deductions: Withdrawals by and distributions to participants 2,211,126 ---------------- Net increase 1,525,915 Net assets available for benefits: Beginning of year 24,142,267 ----------------- End of year $ 25,668,182 ================= See accompanying Notes to the financial statements. NOTES TO FINANCIAL STATEMENTS A. Description of Plan The following description of the Ionics, Incorporated and domestic subsidiaries ("Company") 401(k) Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. 1. General. The Plan is a defined contribution plan covering all permanent employees of the Company working at least 20 hours per week who have completed one year of service (effective March 1, 2000, the Plan was amended to permit new employees to become eligible to participate effective as of the first day of the month coincident with or next following the employee's date of hire). 2. Contributions. Each year, participants may contribute up to 12 percent of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers Company stock and seven mutual funds as investment options for participants. The Company contributes 50% of the first 6 percent of base compensation that a participant contributes to the Company stock portion of the Plan. The matching Company contribution is invested directly in Ionics, Incorporated common stock. Contributions are subject to certain limitations. 3. Participant Accounts. Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution and (b) Plan earnings. Allocations are based on total investment earnings and average participant investment balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. 4. Vesting. Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the Company's contribution portion of their accounts is based on years of continuous service ranging from 33 1/3% after two years to 100% after four years. 5. Participant Loans. Participants may borrow from their fund accounts a minimum of $1,000, up to a maximum of $50,000 or 50 percent of their account balance, whichever is less. The loans are secured by the balance in the participant's account and bear interest at rates that are commensurate with local prevailing rates as determined by the Plan administrator. 6. Payment of Benefits. On termination of service due to death, disability, or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account, or annual installments over the life expectancy of the Participant (or the joint life expectancy of the Participant and spouse or beneficiary). 7. Plan Expenses. The Plan provides that the Company shall pay all expenses of the Plan and its administration. B. Summary of Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition Investment of the Plan in Ionics, Incorporated Common Stock is stated at the last sales price on December 31, 2000 as reported on the New York Stock Exchange. Shares of mutual funds are valued at the Net Asset Value of shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. C. Investments The following presents investments that represent 5 percent or more of the Plan's net assets. December 31, -------------------------- 2000 1999 ------------ ---------- Ionics, Incorporated common stock, 436,598 and 393,964 shares, respectively $ 12,388,468 $ 11,079,956 Puritan Fund, 114,594 and 116,782 shares, respectively 2,157,798 2,222,346 Contrafund Fund, 99,513 and 89,090 shares, respectively 4,893,052 5,347,159 Janus Worldwide Fund, 26,252 and 13,831 shares, respectively 1,492,678 1,057,112 During 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $1,409,296 as follows: Mutual funds $ (1,679,628) Ionics, Incorporated common stock 270,332 --------------- $ (1,409,296) =============== 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 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. E. 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, 2000 and 1999 to Form 5500: 2000 1999 -------------- --------------- Net assets available for benefits per the financial statements $ 25,668,182 $ 24,142,267 Amounts allocated to withdrawing participants (301,050) (88,211) -------------- --------------- Net assets available for benefits per the Form 5500 $ 25,367,132 $ 24,054,056 ============== =============== The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2000 to Form 5500: Distributions to participants per the financial statements: $ 2,211,126 Add: Amounts allocated to withdrawing participants at December 31, 2000 301,050 Less: Amounts allocated to withdrawing participants at December 31, 1999 (88,211) -------------- Benefits paid to participants per Form 5500 $ 2,423,965 ============== 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 31st but not yet paid as of that date. F. Tax Status The Internal Revenue Service has determined and informed the Company by a letter dated September 12, 1995, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination letter, it is believed that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Attachment to Form 5500 Schedule H, Line 4i EIN: 04-2068530 PN: 003 IONICS SECTION 401(k) STOCK SAVINGS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 2001 Face Amount Current Description of Investment Shares or Rate Cost Value -------------------------- -------------- -------------- -------------- Ionics, Incorporated Common Stock 436,598 $ 12,086,923 $ 12,388,468 Fidelity Investments: Puritan Fund 114,594 2,057,901 2,157,798 Contrafund 99,513 4,829,269 4,893,052 MainStay Institutional: Indexed Bond 45,299 488,460 471,110 Asset Manager Fund 95,541 1,486,721 1,269,745 Indexed Equity Fund 16,546 563,824 527,651 Money Market 146,189 146,189 Janus Worldwide Fund 26,252 1,627,727 1,492,678 BT Pyramid GIC Fund 1,197,003 1,197,003 Participant Loans (Rate of interest 7.43% to 10.50%) 0 805,200 -------------- -------------- Total funds invested $ 24,484,017 $ 25,348,894 ============== ============== The accompanying Notes are an integral part of these financial schedules. SIGNATURES Ionics Section 401(k) Stock Savings Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. IONICS SECTION 401(k) STOCK SAVINGS PLAN Date: June 26, 2001 By: /s/ Daniel M. Kuzmak ----------------------------- Daniel M. Kuzmak, Member Plan Administrative Committee 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 8, 2001 on our audits of the financial statements of the Ionics Section 401(k) Stock Savings Plan as of December 31, 2000 and 1999, 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, 2000. BELANGER & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS Chelmsford, Massachusetts June 19, 2001