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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, 1999 Commission file number 000-21109
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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)
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CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
Page
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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
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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, 1999 and 1998, 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, 1999 and 1998, 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, 1999 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 26, 2000
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CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
DECEMBER 31,
1999 1998
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Investments:
Mutual funds $20,908,934 $16,345,367
CUNO Incorporated common stock 3,281,257 2,844,820
Participant loans receivable 760,051 607,543
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24,950,242 19,797,730
Receivables:
Employer's contribution 588,862 598,712
Participants' contributions 47,675 69,058
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636,537 667,770
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Assets available for plan benefits $25,586,779 $20,465,500
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See accompanying notes.
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CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1999 AND 1998
DECEMBER 31,
1999 1998
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ADDITIONS:
Additions to net assets attributed to:
Interest income $ 59,801 $ 43,259
Net realized and unrealized appreciation
in fair value of investments 3,128,205 1,848,487
Dividend income 1,091,091 873,192
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4,279,097 2,764,938
Contributions:
Participants 1,924,000 2,329,263
Employer 588,862 607,376
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2,512,862 2,936,639
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Total Additions 6,791,959 5,701,577
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DEDUCTIONS:
Benefits paid to participants 1,670,680 619,129
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Net increase in assets available for plan benefits 5,121,279 5,082,448
Assets available for plan benefits at beginning of year 20,465,500 15,383,052
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Assets available for plan benefits at end of year $25,586,779 $20,465,500
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See accompanying notes.
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CUNO Incorporated
Savings and Retirement Plan
Notes to Financial Statements
December 31, 1999
NOTE 1 -- DESCRIPTION OF PLAN
The CUNO Incorporated Savings and Retirement Plan (the "Plan") consists of a
pre-tax savings 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 been
credited with at least 500 hours of service within a six month period following
their initial date of employment, or have completed one year of service
recognized by the Plan, 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, 1999 or 1998. Fully-vested amounts allocated to
accounts of persons who have elected to withdraw from the Plan amounted to
$1,367,812 and $1,242,555 at December 31, 1999 and 1998, respectively.
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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, Merrill Lynch Federal Securities Trust, Dreyfus Premier
Balanced Fund, Merrill Lynch Fundamental Growth Fund, Merrill Lynch S&P 500
Index Fund, Van Kampen American Value Fund, Oppenheimer International Growth
Fund, Alliance Technology Fund, Chase Vista Large Cap Equity 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 transactions are
treated as a transfer to/(from) the investment fund from/(to) the Participant
Loan Fund. 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.
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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 generally accepted
accounting principles 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.
STATEMENT OF POSITION 99-3
In 1999, the Plan adopted Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosures. Accordingly, the 1998 financial statements have been modified to
comply with the current year presentation.
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CUNO Incorporated
Savings and Retirement Plan
Notes to Financial Statements (continued)
NOTE 3 - INVESTMENTS
The following presents investments which represent 5% or more of the Plan's net
assets:
DECEMBER 31,
1999 1998
Merrill Lynch Fundamental Growth Fund, 303,483 shares $7,851,102 $ --
Dreyfus Premier Balanced Fund, 275,086 shares 4,261,083 --
Merrill Lynch Retirement Preservation Trust,
3,186,664 shares 3,186,664 --
Merrill Lynch S&P 500 Index Fund, 195,573 shares 3,524,230 --
CUNO Stock Fund, 158,841 and 175,143 shares 3,281,257 2,844,820
Benham Stable Asset Fund, 2,750,155 shares -- 2,750,155
American Century Strategic Allocation: Moderate
Fund, 281,394 shares -- 1,747,456
American Century Strategic Allocation: Aggressive
Fund, 237,645 shares -- 1,570,833
Barclays Equity Index Fund, 98,566 shares -- 2,886,995
Twentieth Century Ultra Fund, 137,832 shares -- 4,604,979
NOTE 4 -- INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under the
applicable section of the Internal Revenue Code and is, therefore, not subject
to tax under present income tax law. Once qualified, the Plan is required to
operate in conformity with the Internal Revenue Code to maintain its
qualification. The Plan Administrator is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
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.
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CUNO Incorporated Savings and Retirement Plan
Schedule H, Line 4(i) -- Schedule of Assets
Held for Investment Purposes at Year End
December 31, 1999
IDENTITY OF PARTY DESCRIPTION OF INVESTMENT VALUE
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Merrill Lynch Retirement Preservation Trust Units $ 3,186,664
Merrill Lynch Federal Securities Trust Units 827,542
Dreyfus Premier Balanced Fund Units 4,261,083
Merrill Lynch Fundamental Growth Fund Units 7,851,102
Van Kampen American Value Fund Units 540,559
Oppenheimer International Growth Fund Units 582,300
Merrill Lynch S&P 500 Index Fund Units 3,524,230
Alliance Technology Fund Units 135,455
CUNO Incorporated Common stock 3,281,257
Participant Notes Loans receivable 760,050
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$ 24,950,242
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All of the above parties are considered parties-in-interest.
The cost column is not applicable because all investment programs are fully
participant directed.
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