SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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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 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from ______________ to ________________
Commission file number 1-6016
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A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ALLEN TELECOM INC.
25101 Chagrin Boulevard, Suite 350
Beachwood, Ohio 44122
ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
Financial Statements
For the Years Ended
December 31, 2001 and 2000
Supplemental Schedule
as of December 31, 2001
and Independent Auditors' Report
ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits -
December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements -
For the Years Ended December 31, 2001 and 2000 4-9
SUPPLEMENTAL SCHEDULE - Assets Held for Investment Purposes
at December 31, 2001 10
INDEPENDENT AUDITORS' REPORT
To the Employee Before-Tax Savings Plan Committee
and the Participants in the Allen Telecom Inc.
Employee Before-Tax Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Allen Telecom Inc. Employee Before-Tax Savings Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statements of changes in net assets
available for 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 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 audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2001 and 2000, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule
listed in the Table of Contents 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. This schedule is the responsibility of the Plan's
management. This schedule has been subjected to the auditing procedures applied
in our audit of the basic 2001 financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
June 14, 2002
ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
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2001 2000
ASSETS:
Investments (Note 3) $27,318,332 $34,186,504
Contribution receivable:
Participants 151,844 163,678
Employer 389,681 298,891
Other receivables 9,301 9,486
Cash and equivalents 4,263
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Total assets 27,869,158 34,662,822
LIABILITIES - Accrued expenses and other liabilities 14,672 23,194
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Net assets available for benefits $27,854,486 $34,639,628
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The accompanying notes are an integral part of these financial statements.
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ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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2001 2000
ADDITIONS:
Contributions:
Participants $ 2,346,665 $ 2,225,655
Employer 686,172 576,690
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Total contributions 3,032,837 2,802,345
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Investment income:
Net appreciation in fair value of investments (Note 3) 113,806
Dividends 383,837 1,298,682
Interest and other income 119,514 113,804
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Total investment income 503,351 1,526,292
Total additions 3,536,188 4,328,637
DEDUCTIONS:
Investment loss - net depreciation in fair value of
investments (Note 3) 8,202,487
Withdrawals and distributions 1,998,562 5,545,321
Administrative expenses 110,262 119,073
Transfer of assets (Note 4) 10,019
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Total deductions 10,321,330 5,664,394
NET DECREASE (6,785,142) (1,335,757)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 34,639,628 35,975,385
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End of year $ 27,854,486 $ 34,639,628
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The accompanying notes are an integral part of these financial statements.
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ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
The following general description of the Allen Telecom Inc. Employee
Before-Tax Savings Plan (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan document or the
Summary Plan Description for complete information. The Plan is a defined
contribution plan administered by Allen Telecom Inc. (the "Company"). The
assets of the Plan are maintained and transactions therein are executed by
the Trustee, Charles Schwab Trust Company.
a. ELIGIBILITY - All employees of the Company and its eligible
subsidiaries in the United States who were employees on October 1,
1985 or who thereafter have completed the required eligibility
period and are not covered by a collective bargaining agreement,
unless that collective bargaining agreement expressly provides for
the employees' eligibility, are eligible to participate in the Plan.
Eligible employees become participants in the Plan as soon as
practicable following the receipt of their enrollment form by the
Employee Before-Tax Savings Plan Committee (the "Committee").
b. VESTING - Participant contributions are fully vested. Employer
matching contributions and earnings thereon are fully vested.
Employees of the Company's Comsearch division ("Comsearch") and
Northern Virginia participants of Grayson Wireless division
("Northern Virginia Grayson") may receive an additional employer
contribution which vests in equal amounts over the period of three
to seven years of credited service. Any amounts which are forfeited
shall be used first to provide for reasonable expenses of
administration of the Plan, second to restore accounts previously
forfeited and then any remaining amounts are applied to reduce
future Company contributions and pay administrative costs.
c. CONTRIBUTIONS - Eligible participants may elect to contribute into
the Plan from 1 percent to 17 percent of their pre-tax compensation
including wages, commissions, and bonuses, excluding bonuses under
the Company's Key Management Deferred Bonus Plan up to $10,500 in a
calendar year. Participants may contribute after-tax contributions
into the Plan from 1 percent to 12 percent of his or her
compensation. In any event, a participant's contributions may not,
in the aggregate, exceed 18 percent of his or her compensation
including wages, commissions, and bonuses, excluding bonuses under
the Company's Key Management Deferred Bonus Plan. Plan participants
can elect to have their contributions invested in 1 percent
increments in different investment funds available.
The Company matches participant contributions equal to 25 percent of
each of the first 2 percent and 50 percent of the third percent, of
compensation contributed by the participant during such month, up to
a maximum Company contribution. The maximum Company contribution for
2001 and 2000 was $1,700 per year. The maximum compensation of any
participant that can be considered for any purpose under this Plan
shall be $170,000 plus such adjustments for increases in the cost of
living as shall be prescribed by the Secretary of the Treasury
pursuant to Section 401(a)(17)(B) of the Internal Revenue Code
("IRC"). All Company matching contributions are invested in the same
investment options based on the allocation percentage determined by
the participant.
In addition, the Plan provides employees from Comsearch and Northern
Virginia Grayson an annual profit-sharing contribution to each
participant who is employed on the last day of the Plan year in an
amount equal to three percent of the participant's compensation. The
benefit is in lieu of participating in the Company's defined benefit
pension plan.
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Annually, the Board of Directors of Allen Telecom Inc. authorizes
the Company to make available to the Plan additional shares of the
Company's Common Stock, from Treasury, for purchase at prices 15
percent below the market prices of the Company's Common Stock with
Participants' before-tax contributions and Company matching
contributions. The Trustee purchases shares of the Company's common
stock for transactions other than before-tax contributions and
Company matching contributions in open market transactions. The
Trustee purchases shares or units of the other Investment Funds (as
directed by the participant) on a national securities exchange at
current market prices. The Company has no control over the time or
prices at which the Trustee makes such purchases and investments or
the amounts thereof. The number of shares or units purchased and
credited to the participants account depends on the prices paid by
the Trustee.
d. INVESTMENTS - The Managers Funds LLC ("Managers") acquired the Smith
Breeden U.S. Equity Market Plus Fund from Smith Breeden Associates,
Inc. in August 2000. Managers changed the name of the fund to the
Managers U.S. Stock Market Plus Fund, although the investment
strategy remained the same.
Effective January 2002, the Nationwide Family of Funds changed its
name to Gartmore Funds. Therefore, the Morley Stable Value Fund was
renamed the Gartmore Morley Stable Value Fund. The investment
strategy remains the same.
The Trustee of the Plan maintained the following 10 investment
funds under the Plan. A participant can direct contributions
into any of the following investment options:
1. ALLEN TELECOM INC. COMMON STOCK FUND - This fund invests
entirely in shares of Common Stock of Allen Telecom Inc.,
which are traded on the New York Stock Exchange.
2. GARTMORE MORLEY STABLE VALUE FUND - This fund is a collective
investment fund consisting of a diversified portfolio of
investment contracts issued by life insurance companies, banks
and other financial institutions. The average interest rate of
the underlying investment contracts was 5.66% and 5.94% for
the years ended December 31, 2001 and 2000, respectively. The
average yield of the fund was 6.09% and 6.44% for the years
ended December 31, 2001 and 2000, respectively. Interest rates
reset periodically.
3. AMERICAN CENTURY EQUITY GROWTH INVESTMENT FUND - This fund
primarily invests in common stocks drawn from a universe of
the largest 1,500 companies (ranked by market capitalization)
traded in the United States.
4. INVESCO TECHNOLOGY II FUND - This fund invests in the equity
securities of companies engaged in technology-related fields.
These related fields may include computers, communications,
video, electronics, oceanography, office and factory
automation, and robotics.
5. MANAGERS U.S. STOCK MARKET PLUS FUND - This fund invests in
short duration, fixed-income securities and maintains
positions in S&P 500 futures, options and similar instruments.
It typically hedges against interest rate risk of its
fixed-income securities. This fund seeks a return greater than
the S&P 500 Composite Stock Index without additional equity
market risk.
6. JANUS WORLDWIDE FUND - This fund invests primarily in foreign
and domestic common stocks. Investments are usually spread
across at least five different countries, including the United
States, though it may at times invest in a single country. The
fund may also invest in preferred stocks, warrants, government
securities, and corporate debt. It may use derivatives for
hedging purposes or as a means of enhancing return.
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7. SCHWAB S&P 500 INDEX FUND - This fund seeks to track the total
return performance of stocks that compose the S&P 500 Index.
The fund invests in common stocks that compose the index. It
buys and sells stocks in order to match the index, to invest
cash from share purchases, or to obtain cash for redemption of
shares.
8. WEITZ VALUE FUND - This fund invests primarily in equity
securities. The fund also invests in foreign securities and
securities that are not readily marketable.
9. OAKMARK FUND - This fund invests primarily in common stocks
and convertibles. The fund seeks securities that are priced
significantly lower than their long-term value.
10. STRONG CORPORATE BOND FUND - This fund normally invests in
corporate bonds and fixed-income securities, including U.S.
government obligations and mortgage-backed securities. The
average maturity typically ranges from 7 to 12 years.
e. PARTICIPANT ACCOUNTS - A separate account is maintained for each
participant in the Plan, reflecting contributions, investments,
investment gains and losses, distributions, loans, withdrawals, and
transfers.
f. PLAN WITHDRAWALS AND DISTRIBUTIONS - Active participants may
withdraw certain amounts from their accounts up to their entire
vested interest if they attain the age of 59-1/2 or qualify for
financial hardship. All active participants may withdraw after-tax
contributions (minimum withdrawal of $250) that have been credited
to their account for at least two years. Participant vested amounts
are payable upon retirement, death, or other termination of
employment. Any non-vested amounts which are forfeited shall be used
first to provide for reasonable expenses of administration of the
Plan, second to restore accounts previously forfeited and then any
remaining amounts are applied to reduce future Company contributions
and pay administrative costs. The participant can elect for
distributions to be made in a single sum or in installments.
g. PARTICIPANT LOANS - A participant may obtain a loan in an amount as
defined by the loan document (not less than $500 and not greater
than $50,000 or 50 percent of the participant's account balance)
from the balance of the participant's account. Interest is charged
at a rate which is equal to the prime rate charged by the Company's
principal lending banks plus one percent at the time the loan is
made and will carry such an interest rate throughout the term of the
loan. The loans are repaid through payroll deductions over periods
ranging up to 60 months. Monthly principal and interest repayments
are credited to the participant's own account and are reinvested in
the Investment Funds in the same manner as the participant's
contributions are invested. A participant may have up to three loans
outstanding at any one time. There is a fixed charge of $50 for
second and third loan applications which is borne by those specific
individuals who choose to have more than one loan outstanding. If a
loan is declared in default as defined by the loan document, the
entire outstanding principal balance will become immediately due and
payable, and if not immediately paid the loan will be canceled and
the outstanding balance will be treated as a distribution or
withdrawal from the Plan depending on the participant's tax
circumstances.
2. SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING - The Plan is accounted for using the accrual
basis of accounting.
b. INVESTMENT VALUATION - Investments in securities, short-term
investments and mutual funds are stated at fair value as measured by
the National Association of Security Dealers on the last business
day of the year; investments in the Allen Telecom Inc. Common Stock
Fund are valued at the last sale price of the common stock on the
New York Stock Exchange Composite Tape on the last business day of
the year; investments in the Gartmore Morley Stable Value Fund and
the Managers U.S. Stock Market Plus Fund are reported at the amount
deposited plus credited interest income, which due to its nature,
approximates the fair value of these investments.
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c. SECURITY TRANSACTIONS AND INVESTMENT INCOME - Purchases and sales of
securities are reported on a trade date basis. Dividend income is
recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
d. PLAN EXPENSES - Any amounts not vested and not eligible for
withdrawal at termination of a participant's employment ("Forfeiture
Funds") are available to the Plan to pay administrative costs and
reduce Company contributions. Forfeiture Funds are maintained in the
Gartmore Morley Stable Value Fund. To the extent that Forfeiture
Funds are not available, administrative expenses are paid by the
Company. Fees associated with hardship withdrawals and quarterly
administrative fees for participants with outstanding loans are paid
by the participant.
e. USE OF ESTIMATES - The preparation of financial statements and
footnote disclosures in conformity with accounting principles
generally accepted in the United States of America requires Plan
management to make estimates and assumptions that affect the
reported amounts of net assets available for benefits and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of additions and deductions to
the Plan's net assets available for benefits during the reporting
period. Actual results could differ from those estimates.
3. INVESTMENTS
The following presents investments of the Plan's assets:
DECEMBER 31,
---------------------------------
2001 2000
Gartmore Morley Stable Value Fund,
402,674 and 376,330 shares, respectively $ 6,394,662 * $ 5,646,336 *
Allen Telecom Inc. Common Stock Fund,
605,438 and 546,878 shares, respectively 5,146,223 * 9,809,624 *
American Century Equity Growth Investment
Fund, 164,036 and 179,869 shares, respectively 3,156,050 * 3,915,752 *
Managers U.S. Stock Market Plus Fund,
297,426 and 263,387 shares, respectively 3,057,535 * 3,387,160 *
Janus Worldwide Fund,
45,889 and 50,822 shares, respectively 2,011,755 * 2,889,762 *
Schwab S&P 500 Index Fund,
98,965 and 93,267 shares, respectively 1,749,704 * 1,896,118 *
Invesco Technology II Fund,
48,217 and 65,287 shares, respectively 1,570,418 * 3,902,218 *
Oakmark Fund, 44,261 and 18,818 shares,
respectively 1,561,081 * 564,349
Weitz Value Fund, 33,158 and 22,165 shares,
respectively 1,136,982 780,656
Strong Corporate Bond Fund,
36,893 and 16,337 shares, respectively 387,371 172,028
Charles Schwab U.S. Treasury 168 258
Loans to Participants 1,146,383 1,222,243
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Total $ 27,318,332 $ 34,186,504
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* Investment represents five percent or more of the Plan's assets.
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During 2001 and 2000, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
(depreciated) appreciated in value as follows:
DECEMBER 31,
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2001 2000
Common stock $(5,092,133) $ 4,002,824
Mutual funds (3,457,488) (4,209,129)
Common/collective trust 347,134 320,111
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Total net (depreciation) appreciation $(8,202,487) $ 113,806
=========== ===========
4. TRANSFER OF ASSETS
On September 8, 1995, the Company's Board of Directors declared a spin-off
distribution of 100 percent of the common shares of a newly formed
subsidiary, TransPro, Inc. ("TransPro") to the Company's common
shareholders of record at the close of business on September 29, 1995 (the
"Spin-off"). Following the Spin-off, TransPro became an independent,
publicly traded corporation.
Prior to the initial transfer of assets to TransPro, participants who
became employees of TransPro were given an "open-window" period whereby
they could transfer their assets in and out of Allen Telecom Inc. common
stock, as desired. Participants with account balances remaining in Allen
Telecom Inc. common stock remained in the Plan as inactive participants.
During the year ended December 31, 2001, TransPro's participants
transferred $10,019 of Plan money into the TransPro Inc. 401(k) Plan as
permitted by the Company. During the year ended December 31, 2000, the
Company did not provide TransPro's participants an opportunity to transfer
Plan money into the TransPro Inc. 401(k) plan. The Company plans to
provide an "open-window" period in the future.
5. PLAN TERMINATION
Although the Company has not expressed any intent to terminate the Plan,
it reserves the right to do so at any time. In the event of termination,
the interests of each participant with respect to Company contributions
and earnings thereon will vest immediately and be nonforfeitable.
6. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated August 15, 1995 that the Plan is designed in accordance with
the applicable sections of the IRC. The Plan has been amended since
receiving the determination letter. However, the Company believes that the
Plan was designed and is currently being operated in compliance with the
applicable provisions of the IRC.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Form 5500 includes the transfer of assets during the plan year ended
December 31, 2001 to the TransPro Inc. 401(k) plan as a reconciling item
to the net decrease in assets available for benefits. The following is a
reconciliation of the net decrease per the financial statements to the
Form 5500:
YEAR ENDED
DECEMBER 31,
2001
Net decrease per the financial statements $(6,785,142)
Add - transfer of assets 10,019
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Net decrease per the Form 5500 $(6,775,123)
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-8-
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2000
Benefits paid to participants per the financial statements $ 5,545,321
Less - amounts allocated to withdrawing participants at
December 31, 1999 (131,911)
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Benefits paid to participants per the Form 5500 $ 5,413,410
===========
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 31, but not yet paid as of that date.
* * * * * *
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ALLEN TELECOM INC.
EMPLOYEE BEFORE-TAX SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
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(a) (b) (c) (d) (e)
IDENTITY OF ISSUER,
BORROWER, CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
Gartmore Morley Capital Management Gartmore Morley Stable Value Fund $ 6,394,662
* Allen Telecom Inc. Allen Telecom Inc. Common Stock Fund 5,146,223
American Century Investment American Century Equity Growth
Management Investment Fund 3,156,050
The Managers Fund LLC Managers U.S. Stock Market Plus Fund 3,057,535
Janus Capital Janus Worldwide Fund 2,011,755
* Charles Schwab Investment
Management Schwab S&P 500 Index Fund 1,749,704
Invesco Funds Group Invesco Technology II Fund 1,570,418
Harris Associates Oakmark Fund 1,561,081
Wallace R. Weitz & Company Weitz Value Fund 1,136,982
Strong Capital Management Strong Corporate Bond Fund 387,371
* Charles Schwab Investment
Management Charles Schwab U.S. Treasury 168
* Participants Loans to participants 6.0 - 10.5 percent 1,146,383
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Total investments - all funds $ 27,318,332
============
* Party-in-interest.
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SIGNATURES
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The Plan. 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 report to be signed on its behalf by the undersigned hereunto
duly authorized.
NAME OF PLAN: ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN
ALLEN TELECOM INC. EMPLOYEE BEFORE-TAX SAVINGS PLAN COMMITTEE
By: /s/ Robert A. Youdelman
--------------------------
Robert A. Youdelman
Committee Member
Date: June 26, 2002
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