SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE
STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001.
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ______.
Commission file number 1-2299
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Applied Industrial Technologies, Inc.
Supplemental Defined Contribution Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Applied Industrial Technologies, Inc.
One Applied Plaza
Cleveland, Ohio 44115-5056
Financial Statements and Exhibit(s)
----------------------------------
Page No.
(in this Report)
--------------
(a) Financial Statements
--------------------
Independent Auditors' Report 5
Statements of Net Assets Available 6
for Benefits --
December 31, 2001 and 2000
Statement of Changes in Net Assets 7
Available for Benefits --
Years Ended December 31,
2001, 2000 and 1999
Notes to Financial Statements -- 8 - 11
Years Ended December 31,
2001, 2000 and 1999
(b) Exhibit(s)
---------
Independent Auditors' Consent 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan has duly caused this annual report to be signed on its behalf by the
undersigned, hereunto duly authorized.
APPLIED INDUSTRIAL TECHNOLOGIES,
INC. SUPPLEMENTAL DEFINED
CONTRIBUTION PLAN
By: Applied Industrial Technologies, Inc.,
as Plan Administrator
By: /s/ Mark O. Eisele
----------------------------------
Signature
Mark O. Eisele
----------------------------------
Printed Name
Vice President
----------------------------------
Title
Date: March 25, 2002
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
SUPPLEMENTAL DEFINED CONTRIBUTION PLAN
Financial Statements
As of December 31, 2001 and 2000 and
For the Years Ended
December 31, 2001, 2000 and 1999,
And Independent Auditors' Report
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
SUPPLEMENTAL DEFINED CONTRIBUTION PLAN
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
As of December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2001, 2000 and 1999 3
Notes to Financial Statements 4 - 7
INDEPENDENT AUDITORS' REPORT
Applied Industrial Technologies, Inc. Supplemental Defined Contribution Plan
We have audited the accompanying statements of net assets available for benefits
of the Applied Industrial Technologies, Inc. Supplemental Defined Contribution
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 ended December 31,
2001, 2000 and 1999. 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 ended December 31, 2001, 2000 and 1999 in conformity with accounting
principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
March 6, 2002
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
SUPPLEMENTAL DEFINED CONTRIBUTION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 and 2000
--------------------------------------------------------------------------------
2001 2000
ASSETS:
Investments at fair value:
Applied Industrial Technologies, Inc.
common stock $ 267,258 $ 2,929,054
Mutual funds 4,369,204 2,274,991
Common/collective fixed income funds 430,343 198,933
---------------- ---------------
Total investments 5,066,805 5,402,978
---------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $5,066,805 $5,402,978
================ ===============
See notes to financial statements.
2
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
SUPPLEMENTAL DEFINED CONTRIBUTION PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------
2001 2000 1999
ADDITIONS:
Participant Contributions $ 507,201 $ 2,613,549 $ 399,348
Investment income:
Dividends:
Common stock 12,244 26,970 12,295
Mutual funds 124,024 130,955 108,439
Common/collective fixed income funds 10 12 2
----------------- ----------------- -----------------
Total dividends 136,278 157,937 120,736
Net (depreciation)/appreciation in
market value of investments:
Common stock (186,675) 515,504 72,632
Mutual funds (428,672) (380,589) 359,709
Common/collective fixed income funds (3,123) 7,947 528
----------------- ----------------- -----------------
Total net (depreciation)/appreciation in
market value of investments (618,470) 142,862 432,869
----------------- ----------------- -----------------
Total investment (loss)/income (482,192) 300,799 553,605
----------------- ----------------- -----------------
Total additions 25,009 2,914,348 952,953
DEDUCTIONS:
Distributions to participants 346,271 91,800 98,701
Administrative expenses 14,911 11,778 7,999
----------------- ----------------- -----------------
Total deductions 361,182 103,578 106,700
----------------- ----------------- -----------------
(DECREASE)/INCREASE IN NET ASSETS
FOR THE YEAR (336,173) 2,810,770 846,253
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 5,402,978 2,592,208 1,745,955
NET ASSETS AVAILABLE FOR BENEFITS, ----------------- ----------------- -----------------
END OF YEAR $ 5,066,805 $ 5,402,978 $ 2,592,208
================= ================= =================
See notes to financial statements.
3
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
SUPPLEMENTAL DEFINED CONTRIBUTION PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Applied Industrial Technologies, Inc.
Supplemental Defined Contribution Plan (the "Plan") is provided for general
information purposes only. Participants and users of the financial
statements should refer to the Plan document for more complete information.
GENERAL - The Plan was established by Applied Industrial Technologies, Inc.
and its subsidiaries (the "Company") effective January 1, 1996, for the
benefit of a select group of management or highly compensated employees.
This is a non-qualified Plan and is subject to the claims of creditors in
the case of bankruptcy of Applied Industrial Technologies, Inc.
ADMINISTRATION - The Plan is administered by the Company. The Company's
powers and duties relate to making participant and employer contributions
to the Trust, establishing investment objectives, authorizing disbursements
from the Trust, and resolving any questions of Plan interpretation.
The assets of the Plan are maintained and administered by Key Trust Co. of
Ohio, N.A. acting as Trustee. The Trustee is responsible for the custody of
assets.
PARTICIPANT ACCOUNTS - Each participant's account is credited with that
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 defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
PARTICIPATION AND CONTRIBUTIONS - Participation in the Plan is limited to
select management or highly compensated employees of the Company and whose
contributions under the Applied Industrial Technologies, Inc. Retirement
Savings Plan (the "Retirement Savings Plan") are limited.
Eligible participants elect to make contributions to the Plan. There are no
limits to the amount they can contribute. Participants may elect to
transfer excess contributions from the Retirement Savings Plan. The company
makes Supplemental Matching Contributions equal to the amount that matching
contributions under the Retirement Savings Plan are limited each year due
to the requirements of the provisions of Sections 401(k) and 401(m) of the
Internal Revenue Code. Effective October 2000, the Plan was amended to
allow transfers from the Applied Industrial Technologies, Inc. Deferred
Compensation Plan upon retirement. Subsequently in 2001, this provision to
allow transfers from the Applied Industrial Technologies, Inc. Deferred
Compensation Plan was revoked.
4
Supplemental Matching Contributions are segregated in the Matching
Contributions Account and are invested in the Company Stock Fund.
Non-participant directed investments included in the Company Stock Fund
were $ 30,131 and $ 36,722 at December 31, 2001 and 2000, respectively.
During the years ended December 31, 2001, 2000 and 1999, there were no
Supplemental Matching Contributions made to the plan.
Contributions are excluded from participants' taxable income until such
amounts are received by them as a distribution from the Plan.
INVESTMENT OF CONTRIBUTIONS - Participants elect investment of their
contributions in 1% increments in the Plan's Company Stock Fund, American
Fundamental Investors Fund, EuroPacific Growth Fund, Bond Fund of America,
Financial Reserves Fund, Victory Stock Index Fund, Growth Fund Portfolio,
Alliance Growth and Income Fund, T Rowe Price Mid-Cap Growth Fund, Vanguard
Asset Allocation Fund, Franklin Small-Cap Growth Fund, Royce Total Return
Fund, Mfs Mid-Cap Growth Fund or the Lord Abbett Mid-Cap Value Fund.
Participants may change their investment elections as to future
contributions and may also elect to reallocate a portion or all of their
account balances among the investment funds in increments of 1% of the
total amount to be reallocated. All such elections are filed with the
Trustee and become effective daily.
The value of the funds and the interest of individual participants under
each fund are calculated daily (daily valuation).
VESTING AND DISTRIBUTIONS - Each participant is immediately and fully
vested in all participant contributions and earnings thereon. Participants
vest in Supplemental Matching Contributions at a rate of 25% for each year
of eligible service, becoming completely vested after four years, or at
death, termination of employment due to permanent and total disability, or
normal or early retirement as defined in the Plan.
Upon termination of service, participants may receive lump sum
distributions of their vested account balances no later than 60 days after
the end of the Plan year in which they terminate employment with the
Company. Distributions upon retirement may be received as a lump sum or as
installments in accordance with the participant's election. Participants
may also apply for hardship withdrawals from their Supplemental Salary
Savings Contributions, subject to adherence to Internal Revenue Service
regulations and approval by the Company.
Forfeitures of nonvested amounts are applied to reduce future Supplemental
Matching Contributions. There were no forfeitures in 2001, 2000 or 1999.
PLAN TERMINATION - The Plan was adopted with the expectation that it will
continue indefinitely. The Company may, however, terminate the Plan at any
time and may amend the Plan from time to time. In the event of termination
of the Plan, all participants will immediately become fully vested in the
value of all Supplemental Matching Employer Contributions made on their
behalf.
5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of the financial statements in
conformity with accounting principles generally accepted in the United
States of America 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.
VALUATION OF INVESTMENTS - Investments are accounted for at cost on the
trade-date and are reported in the statement of net assets available for
benefits at fair value. The investment in Applied Industrial Technologies,
Inc. common stock is valued using the year-end closing price listed by the
New York Stock Exchange. Investment funds are stated at fair values using
year-end closing price for each of the funds or quoted market prices.
BENEFITS PAYABLE - Distributions to participants are recorded by the Plan
when payments are made.
ADMINISTRATIVE EXPENSES - Administrative expenses of the Plan are paid by
the Plan or the Company, as determined by the Company.
3. INVESTMENTS
The Plan provides that, in accordance with the investment objectives
established by the Company, the Trustee of the Plan shall hold, invest,
reinvest, manage and administer all assets of the Plan as a trust fund for
the exclusive benefit of participants and their beneficiaries.
6
Plan investments exceeding 5% of net assets available for benefits as of
December 31, 2001 and 2000, respectively, were as follows:
Description of 2001 2000
Investment
Applied Industrial Technologies, Inc.
Common Stock $ 267,258 $ 2,929,054
Fundamental Investors Fund 574,538 312,762
Franklin Small-Cap Growth Fund 570,113 481,827
Growth Fund Portfolio 593,042 648,039
Financial Reserves 430,343 -
EuroPacific Growth Fund 732,796 159,825
Victory Stock Index Fund - 150,184
Bond Fund of America 1,126,711 -
T Rowe Price Mid-Cap Growth 466,707 -
******
7
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
033-65509 of Applied Industrial Technologies, Inc. on Form S-8 of our report
dated March 6, 2002, appearing in this Annual Report on Form 11-K of the Applied
Industrial Technologies, Inc. Supplemental Defined Contribution Plan for the
year ended December 31, 2001.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
March 25, 2002