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
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(Full title of the plan)
CUNO INCORPORATED
400 RESEARCH PARKWAY
MERIDEN, CONNECTICUT 06450
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(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
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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
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
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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
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26,228,829 25,863,229
Contributions receivable:
Employer 716,608 631,920
Participants 53,873 40,276
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770,481 672,196
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Assets available for plan benefits $26,999,310 $26,535,425
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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, 2001 AND 2000
DECEMBER 31,
2001 2000
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Additions to net assets attributed to:
Interest income $ 85,948 $ 81,434
Dividend income 328,444 1,068,152
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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
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3,842,774 2,595,378
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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)
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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
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Assets available for plan benefits at end of year $ 26,999,310 $ 26,535,425
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See accompanying notes.
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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.
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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, 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.
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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 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
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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
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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.
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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, 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
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$26,228,829
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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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