SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _____________ to _____________
Commission file number: 1-8803
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive offices:
MATERIAL SCIENCES CORPORATION
2200 EAST PRATT BOULEVARD
ELK GROVE VILLAGE, ILLINOIS 60007
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
(a) Financial Statements
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2000 3
Notes to Financial Statements and Schedules 4-8
SUPPLEMENTAL SCHEDULES:
Schedule of Assets Held for Investment Purposes 9
at End of Year - December 31, 2000
Schedule of Nonexempt Transactions for the 10
Year Ended December 31, 2000
(b) Exhibits
Exhibit 23.1 - Consent of Independent Public Accountants 13
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Plan Committee of
Material Sciences Corporation
Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of MATERIAL SCIENCES CORPORATION SAVINGS AND INVESTMENT PLAN as of December 31,
2000 and 1999, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2000. In our report dated September 8,
2000, we expressed a disclaimer of opinion on the statement of net assets
available for benefits as of December 31, 1999 (the 1999 financial statement),
because the Plan administrator, as permitted by the Department of Labor's Rules
and Regulations, instructed us not to audit the information certified by the
trustee. This report on the 1999 financial statement reflects having performed
sufficient audit procedures to render an opinion on the 1999 financial
statement. Accordingly, our present opinion on the 1999 financial statement, as
presented herein, is unqualified. 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 net assets available for benefits of Material
Sciences Corporation Savings and Investment Plan as of December 31, 2000 and
1999, and the changes in net assets available for benefits for the year ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
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 supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
June 21, 2001
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 2000 and 1999
(Employer Identification Number 95-2673173, Plan Number 003)
2000 1999
----------- -----------
ASSETS:
Investments, at fair value (Note 3) $42,194,406 $44,141,230
Loans to participants 2,195,786 1,799,613
Contributions receivable-
Employer 21,621 28,225
Participant 126,370 86,963
Excess contributions payable (11,320) -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $44,526,863 $46,056,031
=========== ===========
The accompanying notes are an integral part of these statements.
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MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 2000
(Employer Identification Number 95-2673173, Plan Number 003)
ADDITIONS:
Contributions-
Employer $ 1,700,582
Participant 4,519,941
Investment income-
Dividends and interest 3,402,893
-----------
Total additions 9,623,416
-----------
DEDUCTIONS:
Benefits paid to participants (2,917,301)
Net depreciation in fair value of investments (8,222,914)
Administrative expenses (12,369)
-----------
Total deductions (11,152,584)
-----------
Net decrease (1,529,168)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 46,056,031
-----------
End of year $44,526,863
===========
The accompanying notes are an integral part of this statement.
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MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
December 31, 2000 and 1999
1. DESCRIPTION OF THE PLAN
The following description of the Material Sciences Corporation Savings and
Investment Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended.
General
The Plan was established on January 1, 1976, as a defined contribution
savings and investment plan. The Plan was amended effective January 1,
1989, to include before-tax 401(k) contributions. Employees of Material
Sciences Corporation and its subsidiaries (collectively, the "Company") are
eligible to participate as of their date of hire (as defined in the Plan
agreement).
Plan Administration
The Plan is administered by the Retirement Plan Committee, consisting of
current employees of the Company. Putnam Fiduciary Trust Company (the
"Trustee") was the trustee of the Plan as of December 31, 2000 and 1999. In
addition, the Trustee performs additional record-keeping tasks for the
Plan.
Contributions
The Plan allows participants to contribute 1% to 6% of their annual salary
before taxes for their basic contribution. Effective April 1, 2000, the
Company's matching contributions increased from 50% to 60% of the eligible
participant's basic contributions, except for MSC Pre Finish Metals (EGV)
Inc.'s Union and MSC Laminates and Composites Inc.'s Union. If a
participant contributes the 6% maximum basic contribution, that participant
is allowed to make additional, pre-tax, after-tax or a combination thereof,
contributions of 1% to 8% of his/her annual salary. These contributions are
not matched by the Company.
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocations of both the Company's contribution and Plan's earnings.
Participants share in the earnings of the Plan based on the ratio of each
participant's equity to the total participants' equity. Earnings include
interest, dividends, realized gains or losses on sales of investments and
the net change in unrealized appreciation or depreciation of investments.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
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Vesting and Forfeitures
Participants vest in the Company's contribution at the rate of 20% per year
for each full year of participation and are 100% vested after five years.
Upon termination of employment, any amounts not vested are forfeited and
are applied toward future Company matching contributions. Contributions
made by the participants and the related earnings are fully vested and not
subject to forfeiture. In 2000, $60,366 in forfeitures were used to reduce
the Company's matching contribution.
Payment of Benefits
Upon retirement, death, disability or termination of service, a participant
may elect to receive a lump-sum distribution equal to his or her vested
account balance or a life annuity.
Loans and Distributions to Participants
Participants may borrow as much as 50% of their vested account balance, or
$50,000 (whichever is less). The minimum loan amount is $1,000. Most loans
must be repaid within five years. The loan period is extended to 15 years
if the loan proceeds were used to purchase a primary residence. The
interest rate is prime plus 1%. Participants may request a distribution of
their after-tax funds, including their vested Company match. In addition,
hardship distributions are permitted if certain criteria are met. Such
withdrawals, however, are subject to a 10% excise tax if the participant is
less than 59 1/2 years of age and the withdrawal does not qualify for
exemption under the Internal Revenue Code ("IRC") regulations.
Investment Options
Participants may direct the investments of their total account balances
into eight mutual funds and a Company stock fund currently available in the
Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from those
estimates.
Investment Valuation and Income Recognition
The investments of the Plan are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent
the net asset value of
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shares held by the Plan at year-end. The Company stock is valued at its
quoted market price. Participant loans are valued at cost, which
approximates fair value.
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. Net realized and unrealized appreciation
(depreciation) is recorded in the accompanying Statement of Changes in Net
Assets Available for Benefits, as net appreciation (depreciation) in fair
value of investments.
Administrative Expenses
All administrative expenses are paid by the Company.
Payment of Benefits
Benefits are recorded when paid.
3. INVESTMENTS
The fair market values of individual assets that represent 5% or more of
the Plan's net assets as of December 31, 2000 and 1999, are as follows:
2000 1999
----------- -----------
George Putnam Fund $ 5,982,483 $ 6,379,507
Putnam Growth & Income Fund 9,036,025 9,326,077
Putnam Global Growth Fund 3,007,162 3,972,075
Putnam Voyager Fund 9,861,661 11,344,372
Putnam OTC & Emerging Growth Fund 3,046,885 1,081,205
Putnam Stable Value Fund 7,221,461 7,668,146
Material Sciences Corporation Stock 1,503,888 2,545,994
During 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value by $8,222,914 as follows:
Mutual funds $(7,907,418)
Common stock (315,496)
-----------
$(8,222,914)
===========
4. TAX STATUS
The Internal Revenue Service issued a determination letter dated March 3,
1995, stating that the Plan was designed in accordance with applicable
Internal Revenue Code ("IRC") requirements as of that date. The Plan has
been amended since receiving the determination letter. However, the plan
administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC.
Therefore, the plan administrator believes that the Plan was qualified and
the related trust was tax-exempt as of the financial statement dates.
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5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Putnam
Fiduciary Trust Co., the Trustee as defined by the Plan, therefore these
transactions qualify as party-in-interest transactions.
6. PLAN TERMINATION
Although the Company has not expressed any intent to discontinue its
contributions or terminate the Plan, it may do so at any time, subject to
ERISA. In the event of termination, the Plan provides that the assets of
the Plan shall be allocated among the participants and beneficiaries of the
Plan in the order and amounts provided for in the Plan document, and that
all participants shall become fully vested on their Company contribution
accounts at that time.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
December 31
------------------------
2000 1999
----------- -----------
Net assets available for benefits per the
financial statements $44,526,863 $46,056,031
Amounts allocated to withdrawing
participants (38,757) (135,165)
----------- -----------
Net assets available for benefits per the
Form 5500 $44,488,106 $45,920,866
=========== ===========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 at December 31, 2000:
Benefits paid to participants per the financial
statements $2,917,301
Add- Amounts allocated to withdrawing
participants at Plan year-end 38,757
Less- Amounts allocated to withdrawing
participants previous year's Plan year-end (135,165)
----------
Benefits paid to participants per the Form 5500 $2,820,893
==========
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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8. NONEXEMPT TRANSACTIONS
During the Plan year ended December 31, 2000, there was a deemed loan made
to the Company when an employee 401(k) contribution of $21,656 was not
remitted to the Plan on a timely basis. The Company has remitted the
contribution to the Plan and intends to repay the Plan for interest
incurred on the loan.
This transaction is detailed on the Schedule of Nonexempt Transactions in
the accompanying supplemental Schedule II.
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Schedule I
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR
December 31, 2000
(Employer Identification Number 95-2673173, Plan Number 003)
Current
Description of Investment Value
------------------------------------------------------ -----------
MUTUAL FUNDS:
*George Putnam Fund $ 5,982,483
*Putnam International Growth Fund 1,225,816
*Putnam Growth & Income Fund 9,036,025
*Putnam Global Growth Fund 3,007,162
*Putnam Voyager Fund 9,861,661
*Putnam Stable Value Fund 7,221,461
*Putnam OTC & Emerging Growth Fund 3,046,885
*Putnam S&P 500 Index Fund 1,309,025
COMMON STOCK:
*Material Sciences Corporation Stock 1,503,888
PROMISSORY NOTES:
*Loan Fund (interest rates ranging from low--9.50%
to high--10.50%) 2,195,786
-----------
Total investments $44,390,192
===========
*Represents a party-in-interest transaction.
The accompanying notes are an integral part of this schedule.
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Schedule II
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS
For the Year Ended December 31, 2000
(Employer Identification Number 95-2673173, Plan Number 003)
----------------------------------------------------------------------------------------------------------------------------
Relationship of
Plan, Employer or Description of Transaction, Including Maturity (a)Interest
Identity of Other Date, Rate of Interest, (a)Amount Incurred
Party Involved Party-in-Interest Collateral, Par or Maturity Value Loaned On Loan
-------------- ----------------- --------------------------------- ------ -------
----------------------------------------------------------------------------------------------------------------------------
Material Sciences Corporation Plan sponsor Lending of monies from the Plan to the Plan
sponsor (contributions not remitted to the Plan
on time) as follows:
Deemed loan occurred March 4, 2000, maturity
$24,518, with interest at various rates. $21,656 $2,862
======= ======
-----------------------------------------------------------------------------------------------------------------------------
(a) Loan payments were repaid to the Plan on June 27, 2001 and interest will be
paid in 2001.
The accompanying notes are an integral part of this schedule.
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SIGNATURES
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 annual report to be signed on its behalf by the undersigned hereunto
duly authorized on this 11th day of July, 2001.
MATERIAL SCIENCES CORPORATION
SAVINGS AND INVESTMENT PLAN
By: Material Sciences Corporation,
Plan Administrator
By: /s/ James J. Waclawik, Sr.
-------------------------------
James J. Waclawik, Sr.
Vice President, Chief Financial Officer
and Secretary
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
23.1 Consent of Independent Public Accountants
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