1
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, 1998 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)
2
CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
Page
----
Report of Independent Auditors
Statements of Assets Available for Plan Benefits
December 31, 1998 1
December 31, 1997 2
Statements of Changes in Assets Available for Plan Benefits
Year ended December 31, 1998 3
Year ended December 31, 1997 4
Notes to Financial Statements 5-8
Supplemental Schedules
Schedule of Assets Held for Investment Purposes 9
Schedule of Reportable Transactions 10
Exhibit 23 -- Consent of Independent Auditors 11
3
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, 1998 and 1997, 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 generally accepted auditing
standards. 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, 1998 and 1997, and the changes in its assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
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. These supplementary schedules are the responsibility of
the Plan's management. Further, the Fund Information in the statements of assets
available for plan benefits and the statements of changes in assets available
for plan benefits is presented for purposes of additional analysis rather than
to present the assets available for plan benefits and the changes in assets
available for plan benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Hartford, Connecticut
June 23, 1999
4
CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1998
FUND INFORMATION
- --------------------------------------------------------------------------------
AMERICAN AMERICAN
BENHAM CENTURY CENTURY
INTERMEDIATE STRATEGIC STRATEGIC
BENHAM TERM TREASURY ALLOCATION: ALLOCATION:
STABLE ASSET FIXED INCOME CONSERVATIVE MODERATE
FUND* FUND FUND FUND*
------------ ------------- ------------ -------------
Investments:
Mutual funds $ 2,750,155 $ 860,095 $ 590,243 $ 1,747,456
CUNO Incorporated common stock -- -- -- --
Participant loans receivable -- -- -- --
------------ ------------- ------------ -------------
2,750,155 860,095 590,243 1,747,456
Receivables:
Employer's contribution -- -- -- --
Participants' contributions 6,248 3,307 2,314 6,696
------------ ------------- ------------ -------------
6,248 3,307 2,314 6,696
------------ ------------- ------------ -------------
Assets available for plan benefits $ 2,756,403 $ 863,402 $ 592,557 $ 1,754,152
============ ============= ============ =============
FUND INFORMATION
- --------------------------------------------------------------------------------
AMERICAN
CENTURY
STRATEGIC BARCLAYS TWENTIETH AMERICAN
ALLOCATION: EQUITY CENTURY CENTURY
AGGRESSIVE INDEX ULTRA VALUE
FUND* FUND* FUND* FUND
----------- ----------- ----------- -----------
Investments:
Mutual funds $ 1,570,833 $ 2,886,995 $ 4,604,979 $ 313,176
CUNO Incorporated common stock -- -- -- --
Participant loans receivable -- -- -- --
----------- ----------- ----------- -----------
1,570,833 2,886,995 4,604,979 313,176
Receivables:
Employer's contribution -- -- -- --
Participants' contributions 7,507 10,077 17,982 1,593
----------- ----------- ----------- -----------
7,507 10,077 17,982 1,593
----------- ----------- ----------- -----------
Assets available for plan benefits $ 1,578,340 $ 2,897,072 $ 4,622,961 $ 314,769
=========== =========== ============ ===========
FUND INFORMATION
- --------------------------------------------------------------------------------
TWENTIETH AMERICAN
CENTURY CENTURY CUNO CUNO
INTERNATIONAL EQUITY STOCK FUND: STOCK FUND:
GROWTH GROWTH PARTICIPANT EMPLOYER
FUND FUND DIRECTED* MATCH*
-------------- ------------ ------------ -------------
Investments:
Mutual funds $ 323,678 $ 697,757
CUNO Incorporated common stock -- -- $ 2,272,278 $ 572,542
Participant loans receivable -- -- -- --
----------- ----------- ----------- -----------
323,678 697,757 2,272,278 572,542
Receivables:
Employer's contribution -- -- -- 598,712
Participants' contributions 1,544 4,258 7,532 --
----------- ----------- ------------ -----------
1,544 4,258 7,532 598,712
----------- ----------- ----------- -----------
Assets available for plan benefits $ 325,222 $ 702,015 $ 2,279,810 $ 1,171,254
=========== =========== =========== =============
FUND INFORMATION
- --------------------------------------------------------------------------------
PARTICIPANT
LOAN
FUND TOTAL
------------- -----------
Investments:
Mutual funds $16,345,367
CUNO Incorporated common stock 2,844,820
Participant loans receivable $ 607,543 607,543
----------- -----------
607,543 19,797,730
Receivables:
Employer's contribution -- 598,712
Participants' contributions -- 69,058
----------- -----------
-- 667,770
----------- -----------
Assets available for plan benefits $ 607,543 $20,465,500
=========== ===========
* An individual investment which represents more than 5% of the plan
assets available for benefits.
-1-
See accompanying notes.
5
CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997
FUND INFORMATION
-----------------------------------------------------------------------
AMERICAN AMERICAN AMERICAN
BENHAM CENTURY CENTURY CENTURY
INTERMEDIATE STRATEGIC STRATEGIC STRATEGIC
BENHAM TERM TREASURY ALLOCATION: ALLOCATION: ALLOCATION:
STABLE ASSET FIXED INCOME CONSERVATIVE MODERATE AGGRESSIVE
FUND* FUND FUND FUND* FUND*
----------- ----------- ----------- ----------- -----------
Investments:
Mutual funds $ 2,467,867 $ 691,866 $ 572,314 $ 1,490,694 $ 1,374,418
CUNO Incorporated common stock -- -- -- -- --
Participant loans receivable -- -- -- -- --
----------- ----------- ----------- ----------- -----------
2,467,867 691,866 572,314 1,490,694 1,374,418
Receivables:
Employer's contribution -- -- -- -- --
Participants' contributions 13,372 4,936 5,465 14,741 18,088
----------- ----------- ----------- ----------- -----------
13,372 4,936 5,465 14,741 18,088
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits $ 2,481,239 $ 696,802 $ 577,779 $ 1,505,435 $ 1,392,506
=========== =========== =========== =========== ===========
FUND INFORMATION
-----------------------------------------------------------------------
TWENTIETH AMERICAN
BARCLAYS TWENTIETH AMERICAN CENTURY CENTURY
EQUITY CENTURY CENTURY INTERNATIONAL EQUITY
INDEX ULTRA VALUE GROWTH GROWTH
FUND* FUND* FUND FUND FUND
----------- ----------- ----------- ----------- -----------
Investments:
Mutual funds $ 2,182,462 $ 3,279,829 $ 211,977 $ 116,189 $ 251,038
CUNO Incorporated common stock -- -- -- -- --
Participant loans receivable -- -- -- -- --
----------- ----------- ----------- ----------- -----------
2,182,462 3,279,829 211,977 116,189 251,038
Receivables:
Employer's contribution -- -- -- -- --
Participants' contributions 28,122 41,377 11,613 11,743 12,604
----------- ----------- ----------- ----------- -----------
28,122 41,377 11,613 11,743 12,604
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits $ 2,210,584 $ 3,321,206 $ 223,590 $ 127,932 $ 263,642
=========== =========== =========== =========== ===========
FUND INFORMATION
--------------------------------------------------------
CUNO CUNO
STOCK FUND: STOCK FUND: PARTICIPANT
PARTICIPANT EMPLOYER LOAN
DIRECTED* MATCH FUND TOTAL
----------- ----------- ----------- -----------
Investments:
Mutual funds -- -- -- $12,638,654
CUNO Incorporated common stock $ 1,567,540 $ 107,896 -- 1,675,436
Participant loans receivable -- -- $ 330,483 330,483
----------- ----------- ----------- -----------
1,567,540 107,896 330,483 14,644,573
Receivables:
Employer's contribution -- 565,082 -- 565,082
Participants' contributions 11,336 -- -- 173,397
----------- ----------- ----------- -----------
11,336 565,082 -- 738,479
----------- ----------- ----------- -----------
Assets available for plan benefits $ 1,578,876 $ 672,978 $ 330,483 $15,383,052
=========== =========== =========== ===========
* An individual investment which represents more than 5% of the plan assets
available for benefits.
-2-
See accompanying notes.
6
CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1998
FUND INFORMATION
- --------------------------------------------------------------------------------
AMERICAN AMERICAN AMERICAN
BENHAM CENTURY CENTURY CENTURY
INTERMEDIATE STRATEGIC STRATEGIC STRATEGIC
BENHAM TERM TREASURY ALLOCATION: ALLOCATION: ALLOCATION:
STABLE ASSET FIXED INCOME CONSERVATIVE MODERATE AGGRESSIVE
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- -----------
ADDITIONS:
Additions to net assets attributed to:
Interest income
Net realized and unrealized
appreciation (depreciation)
in fair value of investments $ 8,784 $ 20,023 $ 103,308 $ 133,383
Dividend income $ 160,485 57,168 37,557 93,454 55,810
----------- ----------- ----------- ----------- -----------
160,485 65,952 57,580 196,762 189,193
Less investment expenses 876 297 380 870 1,336
----------- ----------- ----------- ----------- -----------
159,609 65,655 57,200 195,892 187,857
----------- ----------- ----------- ----------- -----------
Contributions:
Participants 198,731 82,661 73,928 218,275 277,830
Employer -- -- -- -- --
----------- ----------- ----------- ----------- -----------
198,731 82,661 73,928 218,275 277,830
----------- ----------- ----------- ----------- -----------
Total Additions 358,340 148,316 131,128 414,167 465,687
----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 144,233 7,021 43,967 14,818 67,006
----------- ----------- ----------- ----------- -----------
Total deductions 144,233 7,021 43,967 14,818 67,006
----------- ----------- ----------- ----------- -----------
Net increase prior to interfund transfers 214,107 141,295 87,161 399,349 398,681
Interfund transfers 61,057 25,305 (72,383) (150,632) (212,847)
----------- ----------- ----------- ----------- -----------
Net increase 275,164 166,600 14,778 248,717 185,834
Assets available for plan benefits
at beginning of year 2,481,239 696,802 577,779 1,505,435 1,392,506
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 2,756,403 $ 863,402 $ 592,557 $ 1,754,152 $ 1,578,340
=========== =========== =========== =========== ===========
FUND INFORMATION
- --------------------------------------------------------------------------------
TWENTIETH AMERICAN
TWENTIETH AMERICAN CENTURY CENTURY
BARCLAYS CENTURY CENTURY INTERNATIONAL EQUITY
EQUITY INDEX ULTRA VALUE GROWTH GROWTH
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- -----------
ADDITIONS:
Additions to net assets attributed to:
Interest income
Net realized and unrealized
appreciation (depreciation)
in fair value of investments $ 640,703 $ 767,247 $ (44,453) $ 31,288 $ 83,348
Dividend income 11 392,246 53,026 5,448 24,772
----------- ----------- ----------- ----------- -----------
640,714 1,159,493 8,573 36,736 108,120
Less investment expenses 789 1,956 35 25 51
----------- ----------- ----------- ----------- -----------
639,925 1,157,537 8,538 36,711 108,069
----------- ----------- ----------- ----------- -----------
Contributions:
Participants 353,523 569,425 90,972 89,016 137,691
Employer -- -- -- -- --
----------- ----------- ----------- ----------- -----------
353,523 569,425 90,972 89,016 137,691
----------- ----------- ----------- ----------- -----------
Total Additions 993,448 1,726,962 99,510 125,727 245,760
----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 102,103 115,792 348 22,799 11,365
----------- ----------- ----------- ----------- -----------
Total deductions 102,103 115,792 348 22,799 11,365
----------- ----------- ----------- ----------- -----------
Net increase prior to interfund transfers 891,345 1,611,170 99,162 102,928 234,395
Interfund transfers (204,857) (309,415) (7,983) 94,362 203,978
----------- ----------- ----------- ----------- -----------
Net increase 686,488 1,301,755 91,179 197,290 438,373
Assets available for plan benefits
at beginning of year 2,210,584 3,321,206 223,590 127,932 263,642
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 2,897,072 $ 4,622,961 $ 314,769 $ 325,222 $ 702,015
=========== =========== =========== =========== ===========
FUND INFORMATION
- --------------------------------------------------------------------------------
CUNO CUNO
STOCK FUND: STOCK FUND: PARTICIPANT
PARTICIPANT EMPLOYER LOAN
DIRECTED MATCH FUND TOTAL
------------ ----------- ----------- -----------
ADDITIONS:
Additions to net assets attributed to:
Interest income $ 43,259 $ 43,259
Net realized and unrealized
appreciation (depreciation)
in fair value of investments $ 142,573 $ (37,717) -- 1,848,487
Dividend income -- -- -- 879,977
------------ ----------- ----------- -----------
142,573 (37,717) 43,259 2,771,723
Less investment expenses 162 8 -- 6,785
------------ ----------- ----------- -----------
142,411 (37,725) 43,259 2,764,938
------------ ----------- ----------- -----------
Contributions:
Participants 237,211 -- -- 2,329,263
Employer -- 607,376 -- 607,376
------------ ----------- ----------- -----------
237,211 607,376 -- 2,936,639
------------ ----------- ----------- -----------
Total Additions 379,622 569,651 43,259 5,701,577
------------ ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 52,848 31,320 5,509 619,129
------------ ----------- ----------- -----------
Total deductions 52,848 31,320 5,509 619,129
------------ ----------- ----------- -----------
Net increase prior to interfund transfers 326,774 538,331 37,750 5,082,448
Interfund transfers 374,160 (40,055) 239,310 --
------------ ----------- ----------- -----------
Net increase 700,934 498,276 277,060 5,082,448
Assets available for plan benefits
at beginning of year 1,578,876 672,978 330,483 15,383,052
------------ ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 2,279,810 $ 1,171,254 $ 607,543 $20,465,500
============ =========== =========== ===========
See accompanying notes.
-3-
7
CUNO INCORPORATED SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1997
FUND INFORMATION
- --------------------------------------------------------------------------------
AMERICAN AMERICAN AMERICAN
BENHAM CENTURY CENTURY CENTURY
INTERMEDIATE STRATEGIC STRATEGIC STRATEGIC
BENHAM TERM TREASURY ALLOCATION: ALLOCATION: ALLOCATION:
STABLE ASSET FIXED INCOME CONSERVATIVE MODERATE AGGRESSIVE
FUND FUND FUND FUND FUND
------------ ------------- ------------- ------------- ------------
ADDITIONS:
Additions to net assets attributed to:
Interest income
Net realized and unrealized
appreciation (depreciation)
in fair value of investments -- $ 14,220 $ 3,985 $ 75,080 $ 82,401
Dividend income $ 102,540 27,375 46,866 75,474 64,675
----------- ----------- ----------- ----------- -----------
102,540 41,595 50,851 150,554 147,076
Less investment expenses 418 99 219 539 865
----------- ----------- ----------- ----------- -----------
102,122 41,496 50,632 150,015 146,211
----------- ----------- ----------- ----------- -----------
Contributions:
Participants 389,192 124,504 106,069 288,273 315,530
Employer -- -- -- -- --
----------- ----------- ----------- ----------- -----------
389,192 124,504 106,069 288,273 315,530
----------- ----------- ----------- ----------- -----------
Total Additions 491,314 166,000 156,701 438,288 461,741
----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 94,396 7,566 3,024 13,636 25,886
----------- ----------- ----------- ----------- -----------
Total deductions 94,396 7,566 3,024 13,636 25,886
----------- ----------- ----------- ----------- -----------
Net increase prior to interfund transfers 396,918 158,434 153,677 424,652 435,855
Interfund transfers 747,319 182,826 110,769 318,246 281,080
----------- ----------- ----------- ----------- -----------
Net increase 1,144,237 341,260 264,446 742,898 716,935
Assets available for plan benefits
at beginning of year 1,337,002 355,542 313,333 762,537 675,571
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 2,481,239 $ 696,802 $ 577,779 $ 1,505,435 $ 1,392,506
=========== =========== =========== =========== ===========
FUND INFORMATION
- --------------------------------------------------------------------------------
TWENTIETH AMERICAN
TWENTIETH AMERICAN CENTURY CENTURY
BARCLAYS CENTURY CENTURY INTERNATIONAL EQUITY
EQUITY INDEX ULTRA VALUE GROWTH GROWTH
FUND FUND FUND FUND FUND
------------ ----------- ------------ ------------- ------------
ADDITIONS:
Additions to net assets attributed to:
Interest income
Net realized and unrealized
appreciation (depreciation)
in fair value of investments $ 359,512 $ (253,463) $ (21,880) $ (18,206) $ (7,400)
Dividend income 55 667,342 32,707 15,402 27,833
----------- ----------- ----------- ----------- -----------
359,567 413,879 10,827 (2,804) 20,433
Less investment expenses 616 1,167 48 15 28
----------- ----------- ----------- ----------- -----------
358,951 412,712 10,779 (2,819) 20,405
----------- ----------- ----------- ----------- -----------
Contributions:
Participants 420,158 693,542 33,520 24,166 32,020
Employer -- -- -- -- --
----------- ----------- ----------- ----------- -----------
420,158 693,542 33,520 24,166 32,020
----------- ----------- ----------- ----------- -----------
Total Additions 779,109 1,106,254 44,299 21,347 52,425
----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 26,967 110,111 16 134 16
----------- ----------- ----------- ----------- -----------
Total deductions 26,967 110,111 16 134 16
----------- ----------- ----------- ----------- -----------
Net increase prior to interfund transfers 752,142 996,143 44,283 21,213 52,409
Interfund transfers 668,586 937,799 179,307 106,719 211,233
----------- ----------- ----------- ----------- -----------
Net increase 1,420,728 1,933,942 223,590 127,932 263,642
Assets available for plan benefits
at beginning of year 789,856 1,387,264 -- -- --
----------- ----------- ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 2,210,584 $ 3,321,206 $ 223,590 $ 127,932 $ 263,642
=========== =========== =========== =========== ===========
FUND INFORMATION
- --------------------------------------------------------------------------------
CUNO CUNO
STOCK FUND: STOCK FUND: PARTICIPANT
PARTICIPANT EMPLOYER LOAN
DIRECTED MATCH FUND TOTAL
----------- ------------ ------------ ------------
ADDITIONS:
Additions to net assets attributed to:
Interest income $ 19,699 $ 19,699
Net realized and unrealized
appreciation (depreciation)
in fair value of investments $ 1,972,583 $ (10,960) -- 2,195,872
Dividend income 104,370 -- -- 1,164,639
----------- ----------- ----------- -----------
2,076,953 (10,960) 19,699 3,380,210
Less investment expenses 85 -- -- 4,099
----------- ----------- ----------- -----------
2,076,868 (10,960) 19,699 3,376,111
----------- ----------- ----------- -----------
Contributions:
Participants 2,447,274 -- -- 4,874,248
Employer -- 565,082 -- 565,082
----------- ----------- ----------- -----------
2,447,274 565,082 -- 5,439,330
----------- ----------- ----------- -----------
Total Additions 4,524,142 554,122 19,699 8,815,441
----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants 136,679 5,407 423,838
----------- ----------- ----------- -----------
Total deductions 136,679 5,407 -- 423,838
----------- ----------- ----------- -----------
Net increase prior to interfund transfers 4,387,463 548,715 19,699 8,391,603
Interfund transfers (3,838,496) (6,992) 101,604 --
----------- ----------- ----------- -----------
Net increase 548,967 541,723 121,303 8,391,603
Assets available for plan benefits
at beginning of year 1,029,909 131,255 209,180 6,991,449
----------- ----------- ----------- -----------
Assets available for plan benefits
at end of year $ 1,578,876 $ 672,978 $ 330,483 $15,383,052
=========== =========== =========== ===========
See accompanying notes.
-4-
8
CUNO Incorporated
Savings and Retirement Plan
Notes to Financial Statements
December 31, 1998
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, 1998 or 1997. Fully-vested amounts allocated to
accounts of persons who have elected to withdraw from the Plan amounted to
$1,242,555 and $713,190 at December 31, 1998 and 1997.
-5-
9
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 Benham Stable Asset
Fund, the Benham Intermediate-Term Treasury Fixed Income Fund, the American
Century Strategic Allocation: Conservative Fund, the American Century Strategic
Allocation: Moderate Fund, the American Century Strategic Allocation: Aggressive
Fund, the Barclays Equity Index Fund, the Twentieth Century Ultra Fund, the
American Century Value Fund, the Twentieth Century International Growth Fund,
the American Century Equity 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. Chase Manhattan Bank, N.A., an
independent third-party bank, 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.
-6-
10
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.
NOTE 3 -- 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 4 -- 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.
-7-
11
CUNO Incorporated
Savings and Retirement Plan
Notes to Financial Statements (continued)
5. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical data
processing systems. The project also includes determining whether third party
service providers have reasonable plans in place to become year 2000 compliant.
The Plan Sponsor has completed the remediation of its information technology
systems and currently expects the remediation of its non-information technology
to be completed in the third quarter of 1999. The Plan Sponsor does not expect
this project to have a significant effect on plan operations.
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12
CUNO Incorporated Savings and Retirement Plan
Schedule of Assets Held for Investment Purposes
December 31, 1998
IDENTITY OF PARTY DESCRIPTION OF INVESTMENT COST VALUE
- --------------------------------------------------------- -------------------------- ----------- -----------
Benham Stable Asset Fund Units $ 2,750,155 $ 2,750,155
Benham Intermediate Term Treasury Fixed Income Fund Units 840,408 860,095
American Century Strategic Allocation: Conservative Fund Units 571,871 590,243
American Century Strategic Allocation: Moderate Fund Units 1,598,470 1,747,456
American Century Strategic Allocation: Aggressive Fund Units 1,408,918 1,570,833
Barclays Equity Index Fund Units 2,046,039 2,886,995
Twentieth Century Ultra Fund Units 4,177,578 4,604,979
American Century Value Fund Units 370,764 313,176
Twentieth Century International Growth Fund Units 312,781 323,678
American Century Equity Growth Fund Units 626,381 697,757
CUNO Incorporated Common stock 2,135,501 2,272,278
CUNO Incorporated Common stock 623,780 572,542
Participant Notes Loans receivable -- 607,543
----------- -----------
$17,462,646 $19,797,730
=========== ===========
All of the above parties are considered parties-in-interest.
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13
CUNO Incorporated Savings and Retirement Plan
Schedule of Reportable Transactions
Year ended December 31, 1998
Category (iii): A series of transactions in excess of 5% of plan assets.
PURCHASE SELLING COST OF
IDENTITY OF PARTY DESCRIPTION OF SECURITIES PRICE PRICE ASSET
- ------------------------------- ----------------------------------- ----------------- ----------------- ---------------
American Century Ultra Fund $ 1,502,310 $ -- $ 1,502,310
American Century Ultra Fund -- 944,409 922,129
American Century Strategic Moderate 454,396 -- 454,396
American Century Strategic Moderate -- 300,941 281,913
American Century Strategic Aggressive 514,730 -- 514,730
American Century Strategic Aggressive -- 451,697 416,297
Barclays PLC Bank Barclays Equity Index 935,666 -- 935,666
Barclays PLC Bank Barclays Equity Index -- 871,837 743,811
CUNO Incorporated CUNO Stock 1,980,304 -- 1,980,304
CUNO Incorporated CUNO Stock -- 915,773 847,846
American Century Stable Asset 1,264,942 -- 1,264,942
American Century Stable Asset -- 982,653 982,653
CURRENT
VALUE OF
ASSET ON
TRANSACTION
IDENTITY OF PARTY DESCRIPTION OF SECURITIES DATE NET GAIN
- ------------------------------- ----------------------------------- ------------------- -----------------
American Century Ultra Fund $ 1,502,310 $ --
American Century Ultra Fund 944,409 22,280
American Century Strategic Moderate 454,396 --
American Century Strategic Moderate 300,941 19,028
American Century Strategic Aggressive 514,730 --
American Century Strategic Aggressive 451,697 35,400
Barclays PLC Bank Barclays Equity Index 935,666 --
Barclays PLC Bank Barclays Equity Index 871,837 128,026
CUNO Incorporated CUNO Stock 1,980,304 --
CUNO Incorporated CUNO Stock 915,773 67,926
American Century Stable Asset 1,264,942 --
American Century Stable Asset 982,653 --
There were no series (i), (ii), or (iv) transactions in excess of 5% of plan
assets.
All of the above parties are considered parties-in-interest.
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