SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
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[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (de) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-17156
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A. Full title of the plan and address of the plan, if different from that of
the issuer named below: Merisel, Inc. 401(k) Retirement Savings Plan
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B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: Merisel, Inc. 200 Continental Blvd., El
Segundo, California 90245
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Financial Statements
and Supplemental Schedule
December 31, 2001
With Independent Auditor's Report
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Table of Contents
Page(s)
Independent Auditor's Report 1
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 2001 3
Notes to Financial Statements 4-7
Supplemental Schedule:
Schedule of Assets (Held at End of Year)
as of December 31, 2001 8
Other schedules required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they are not
applicable.
Independent Auditor's Report
To the Plan Administrator and Participants
of the Merisel, Inc. 401(k) Retirement Savings Plan
We have audited the statement of net assets available for benefits of the
Merisel, Inc. 401(k) Retirement Savings Plan as of December 31, 2001, and the
related statement of changes in net assets available for benefits for the year
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 audit. The statement of net assets available for
benefits of the Merisel, Inc. 401(k) Retirement Savings Plan as of December 31,
2000, was audited by other auditors whose report dated May 30, 2001, expressed
an unqualified opinion on that statement.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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, 2001, and the changes in net assets available for benefits for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2001, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
June 25, 2002
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
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Investments:
Connecticut General Life Insurance Company
group annuity contract:
Pooled separate accounts $ 7,128,138 $12,375,490
Guaranteed income general account 1,592,194 2,414,321
Merisel, Inc. common stock 327,977 291,799
Participant loans 60,295 396,704
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Total investments 9,108,604 15,478,314
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Receivables:
Employer contribution 26,514 80,252
Participant contributions 1,366 47,395
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Total receivables 27,880 127,647
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Net assets available for benefits $ 9,136,484 $15,605,961
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See accompanying notes to financial statements.
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions to net assets attributed to:
Investment income, excluding net depreciation reflected below:
Interest income $ 105,347
Net appreciation in fair value of Merisel, Inc. common stock 19,496
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Total investment income, excluding net depreciation 124,843
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Contributions:
Employer matching 180,168
Participant salary reduction 536,328
Participant rollover 96,326
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Total contributions 812,822
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Total additions 937,665
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Deductions from net assets attributed to:
Net depreciation in fair value of pooled separate accounts 1,564,043
Benefits paid to participants 5,492,710
Deemed distributions of participant loans 282,716
Administrative expenses 67,673
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Total deductions 7,407,142
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Net decrease (6,469,477)
Net assets available for benefits:
Beginning of year 15,605,961
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End of year $ 9,136,484
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MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001
1. Description of Plan
The following description of the Merisel, Inc. ("Company") 401(k) Retirement
Savings Plan ("Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan covering employees of the Company who
have 30 days of service and are twenty-one or older. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Contributions
Each year, participants may contribute up to 15 percent of pretax annual
compensation, as defined by the Plan, except that highly compensated employees,
as defined by the Plan, may only contribute up to 7 percent. Participants may
also contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans. The Company contributes 50 percent of the
first 6 percent of annual compensation that a participant contributes to the
Plan. The amount of the matching contribution is determined each year by the
Board of Directors at its discretion, which may even determine that no matching
contribution will be made.
Investment Options
Participants direct the investment of their contributions into various
investment options offered by the Plan. The investment options are included
under the Plan's group annuity contract with Connecticut General Life Insurance
Company ("CIGNA") and includes pooled separate accounts reflecting mutual funds
and funds held in the insurance company general account reflecting a guaranteed
income fund. In addition, participants may direct their investments to a
Merisel, Inc. common stock fund. (Effective August 14, 2001, the Company
matching contribution became participant-directed; prior thereto the Company
matching contribution was nonparticipant-directed all to Merisel, Inc. common
stock.)
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, and charged
with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as specified by the Plan. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001
1. Description of Plan (continued)
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. A participant is 100 percent vested after
four years of credited service.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance.
The loans are secured by the balance in the participant's account and bear
interest at rates that range from 9.5 percent to 11 percent. Principal and
interest is paid ratably through payroll deductions.
Payment of Benefits
On termination of service due to death, disability, retirement or other reasons,
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 a fixed period of years. Inservice distributions are allowed
under certain conditions.
Forfeited Accounts
At December 31, 2001, forfeited nonvested accounts totaled $22,927. These
accounts will be used to reduce future employer contributions to the Plan.
2. Summary of Significant Accounting Policies
Reclassifications
The financial statement presentation for 2000 has been changed to conform with
the presentation in 2001.
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.
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001
2. Summary of Significant Accounting Policies (continued)
Valuation of Investments
The Plan's investment in the CIGNA group annuity contract is essentially a fully
benefit-responsive contract, and accordingly, the contract is included in the
financial statements at contract value (which represents contributions made
under the contract, plus earnings, less withdrawals and administrative
expenses), as reported to the Plan by CIGNA. Investments in pooled separate
accounts at contract value equal fair value, as it is based on the market value
of the underlying assets of the funds. Investments in the insurance company
general account have been valued at contract value, even though under certain
limited circumstances CIGNA reserves the right to defer transfers or
distributions, because it is the amount a participant would expect to receive
under the terms of an ongoing contract. Under most circumstances contract value
will approximate fair value. The average yield and crediting interest rate was
approximately 5.35 percent during 2001; the crediting interest rate is reset
every six months by CIGNA. There are no reserves against contract value for
credit risk of the contract issuer or otherwise.
The Plan's investment in Merisel, Inc. common stock is stated at fair value as
determined by quoted market prices. Participant loans are stated at cost, which
approximates fair value. Purchases and sales of securities are recorded on a
trade-date basis.
Payment of Benefits
Benefits are recorded when paid.
Expenses
Expenses incurred in the administration of the Plan are paid by the Plan, unless
paid by the Company at its option. During 2001, the Plan paid $67,673 to CIGNA
for administrative and transaction charges, as well as for fees related to the
purchase and sale of Merisel, Inc. stock.
3. 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 would become 100 percent vested in their employer contributions.
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2001
4. Investments
The following presents investments that represent five percent or more of the
Plan's net assets at December 31, 2001 and 2000:
2001 2000
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CIGNA group annuity contract pooled separate accounts:
Guaranteed Income Fund $1,592,194 $2,414,321
S&P 500 Index Fund 1,270,315 2,231,717
Fidelity Advisor Growth Opportunities Account 1,207,162 2,100,854
Fidelity Advisor Equity Growth Account 2,441,193 4,091,725
CIGNA Lifetime20 Fund 559,923 855,555
CIGNA Lifetime30 Fund 495,698 866,472
Janus Worldwide Account 480,123 1,268,578
5. Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated August 27, 1993, 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, the
Plan administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable requirements
of the IRC.
MERISEL, INC.
401(k) RETIREMENT SAVINGS PLAN
(EIN 95-4172359 Plan 004)
Schedule of Assets (Held at End of Year)
(Schedule H, Part IV, Item 4i - Form 5500)
December 31, 2001
(b)Identity of issuer (e)Current
(a) or borrower (c)Description of investment (d)Cost value
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* Connecticut General Group annuity contract (GA-37125)
Life Insurance
Company Guaranteed Income Fund (A) $1,592,194
S&P Index Fund 1,270,315
Fidelity Advisor Growth Opportunities Account 1,207,162
Fidelity Advisor Equity Growth Account 2,441,193
CIGNA Lifetime20 Fund 559,923
CIGNA Lifetime30 Fund 495,698
CIGNA Lifetime40 Fund 337,036
CIGNA Lifetime50 Fund 253,866
Janus Worldwide Account 480,123
International Blend/Bank of Ireland Fund 21,966
Mid Cap Value Fund (Wellington) 60,856
* Merisel, Inc. Shares of plan sponsor common stock 327,977
* Participant loans Loans to participants, maturities up
to 5 years, interest rates between
9.5% to 11% 60,295
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$9,108,604
(A) Historical cost information is not required for participant-directed ============
investments.
* A party-in-interest as defined by ERISA.
See accompanying independent auditor's report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 28, 2002 Merisel, Inc. 401(k) Retirement Savings Plan
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(Name of plan)
By:/s/Timothy N. Jenson
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Timothy N. Jenson
CEO and President