<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996
Commission File No. 1-10697
COMMERCIAL INTERTECH RETIREMENT
STOCK OWNERSHIP AND SAVINGS PLAN
COMMERCIAL INTERTECH CORP.
1775 Logan Avenue
Youngstown, Ohio 44501
<PAGE> 2
Audited Financial Statements and Schedules
COMMERCIAL INTERTECH RETIREMENT
STOCK OWNERSHIP AND SAVINGS PLAN
December 31, 1996 and 1995
<PAGE> 3
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Audited Financial Statements
December 31, 1996 and 1995
CONTENTS
<TABLE>
<S> <C>
REQUIRED INFORMATION
Report of Independent Auditors .................................................................. 1
FINANCIAL STATEMENTS PROVIDED
Statements of Net Assets Available for Plan Benefits ............................................ 2
Statement of Changes in Net Assets Available for Plan Benefits .................................. 3
Notes to Financial Statements ................................................................... 4
SCHEDULES
Item 27(a)--Schedule of Assets Held for Investment Purposes ..................................... 16
Item 27(d)--Schedule of Reportable Transactions ................................................. 17
EXHIBITS
Exhibit 23--Consent of Independent Auditors ..................................................... 18
</TABLE>
<PAGE> 4
Report of Independent Auditors
Administrative Committee
Commercial Intertech Retirement Stock
Ownership and Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Commercial Intertech Retirement Stock Ownership and Savings Plan
(the "Plan") as of December 31, 1996 and 1995, and the related statement of
changes in net assets available for plan benefits for the year ended December
31, 1996. 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 net assets available for plan benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for plan
benefits for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental Schedule of Assets
Held for Investment Purposes as of December 31, 1996, and Schedule of Reportable
Transactions for the year ended December 31, 1996, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audit of the 1996
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1996 financial statements taken as a whole.
Cleveland, Ohio
June 24, 1997
<PAGE> 5
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------------- ----------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 4,806,533 $ 669 $ 4,807,202 $ 127,256 $ 127,256
Interest receivable 90,907 2,328 93,235 5,326 $ 499 5,825
Employer contributions receivable 352,588 352,588 852,074 852,074
Employee contributions receivable 187,875 187,875 267,083 267,083
Other receivables 112 1,856 1,968
--------------------------------------------------------------------------------
5,437,903 2,997 5,440,900 1,251,851 2,355 1,254,206
Investments:
Interest in a registered investment company
(Fidelity Management Trust Company) 12,083,261 12,083,261 10,952,561 10,952,561
Unallocated insurance contracts (CIGNA
Guaranteed Long Term Account) 10,085,083 10,085,083 13,100,661 13,100,661
Commercial Intertech Corp. Series B
Preferred Stock 8,102,658 16,511,115 24,613,773 3,973,489 10,038,118 14,011,607
Commercial Intertech Corp. common stock 8,150,870 8,150,870 6,973,974 6,973,974
CUNO Incorporated common stock 1,642,988 1,642,988
Participant loans receivable 563,803 563,803 764,038 764,038
--------------------------------------------------------------------------------
40,628,663 16,511,115 57,139,778 35,764,723 10,038,118 45,802,841
LIABILITIES
Notes payable 11,346,122 11,346,122 11,869,497 11,869,497
Other liabilities 154,075 154,075 20,680 13 20,693
--------------------------------------------------------------------------------
154,075 11,346,122 11,500,197 20,680 11,869,510 11,890,190
--------------------------------------------------------------------------------
NET ASSETS AVAILABLE (DEFICIENT) FOR PLAN BENEFITS $45,912,491 $ 5,167,990 $51,080,481 $36,995,894 $(1,829,037) $35,166,857
================================================================================
</TABLE>
See notes to financial statements.
2
<PAGE> 6
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Statement of Changes in Net Assets
Available for Plan Benefits
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Allocated Unallocated Total
---------------------------------------------
<S> <C> <C> <C>
ADDITIONS
Employer contributions $ 170,000 $ 170,000
Employee contributions $ 3,515,129 3,515,129
Non-cash employer contributions 352,588 352,588
Non-cash employee contributions 816,291 816,291
Interest income 770,256 13,413 783,669
Dividend income 584,569 853,240 1,437,809
Dividend transfers 327,865 327,865
Earnings on Fidelity investments 528,843 528,843
Other income 7,967 7,967
Allocation of Commercial Intertech Corp. Series B
Preferred Stock 717,007 717,007
---------------------------------------------
7,292,650 1,364,518 8,657,168
DEDUCTIONS
Interest expense 840,360 840,360
Distributions 8,807,909 8,807,909
Dividend transfers 327,865 327,865
Other expense 84 128 212
Allocation of Commercial Intertech Corp. Series B
Preferred Stock 717,007 717,007
---------------------------------------------
9,135,858 1,557,495 10,693,353
Net realized and unrealized appreciation in aggregate
current value of investments 10,759,805 7,190,004 17,949,809
---------------------------------------------
Net additions 8,916,597 6,997,027 15,913,624
Net assets available (deficient) for plan benefits at
beginning of year 36,995,894 (1,829,037) 35,166,857
---------------------------------------------
NET ASSETS AVAILABLE (DEFICIENT) FOR PLAN BENEFITS AT
END OF YEAR $ 45,912,491 $ 5,167,990 $ 51,080,481
=============================================
</TABLE>
See notes to financial statements.
3
<PAGE> 7
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements
Year Ended December 31, 1996
A. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Commercial Intertech Retirement Stock Ownership
and Savings Plan (the "Plan") are maintained on the accrual basis.
VALUATION OF INVESTMENTS
Investments consisting of common shares of Commercial Intertech Corp. (the
"Company") and common shares of CUNO Incorporated (see Note E) (both in the
Commercial Intertech Common Stock Fund) are carried at the closing market price
on the last business day of the year. Investments consisting of Convertible
Series B Preferred Stock ("Preferred Shares") are valued by an independent
appraiser. Currently, the independent appraiser uses the greater of 3.0227 (see
Note F) of the price of Company common stock as of the last business day of the
year or $23.25, the price guaranteed to the Plan participants by the Company.
Investments in unallocated insurance contracts (CIGNA Guaranteed Long Term
Account) are valued at contract value as determined by Connecticut General Life
Insurance Company ("CIGNA"). Investments in registered investment company funds
(Fidelity Intermediate Bond Fund, Fidelity Balanced Fund, Fidelity U.S. Equity
Index Fund, and Fidelity Growth Company Fund) are carried at the value of their
underlying assets as determined by Fidelity Management Trust Company.
Participant loans receivable are valued at cost which approximates fair value.
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.
4
<PAGE> 8
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
B. DESCRIPTION OF THE PLAN
The Plan consists of a pre-tax savings program, a post-tax savings program and a
leveraged matching employee stock ownership plan. All employees of designated
subsidiaries, with at least one year of service, 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"). The leveraged
matching employee stock ownership features of the Plan were designed to comply
with Section 4975(e)(7) and the regulations thereunder of the Internal Revenue
Code of 1986, as amended, (the "Code").
Under the pre-tax program, participants may elect to contribute up to 15% 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 10% of their
compensation. These contributions are made with after-tax dollars and do not
receive Company matching contributions. Employee contributions are accrued as
income by the Plan as they are earned by the participants. The Company
contributes 50% (made in Common and Preferred Shares) of the first 6% of
eligible compensation that a participant contributes to the Plan on a
tax-deferred basis.
The Plan provides for separate investment options in one or more funds as
directed by the participants. Participants may change investment options once
every two months. At December 31, 1996, 829 individuals participated in the
CIGNA Guaranteed Long Term Account (1,246--1995), 691 individuals participated
in the Commercial Intertech Common Stock Account Fund (656--1995), 291
individuals participated in the Fidelity Intermediate Bond Fund (437--1995), 450
individuals participated in the Fidelity Balanced Fund (592--1995), 478
individuals participated in the Fidelity U.S. Equity Index Fund (468--1995), and
741 individuals participated in the Fidelity Growth Company Fund (745--1995).
All investment account dollars that result from employee contributions and
related investment results are immediately vested.
5
<PAGE> 9
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
Company matching contributions and related investment results vest according to
the following schedule:
<TABLE>
<CAPTION>
Years of Vesting Service % Vested
-------------------------------- --------------
<S> <C>
Less than 1 year 0%
1 year 20
2 years 40
3 years 60
4 years 80
5 years 100
</TABLE>
Participants 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 will be allocated to the
accounts of the remaining active Plan participants at the next December 31st
valuation date. The allocation is based on each active participant's matching
contribution as a percentage of total matching contributions for the year ending
with the December 31st valuation date. Non-vested assets attributable to
terminated employees amounted to $14,002 at December 31, 1996.
The Plan also provides for withdrawal in cases of financial hardship, upon
attainment of age 59-1/2, and of the post-tax savings program contributions.
Participating employees may borrow up to the lesser of 50% of their account
balance attributable to employee contributions or $50,000. The amount borrowed
is repaid to the participant's account via payroll deductions and carries an
interest charge at the market rate of interest at the date of the loan.
6
<PAGE> 10
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
The Plan purchased the Preferred Shares, which are held in a trust established
under the Plan, in 1990 using the proceeds of a $14.3 million borrowing
guaranteed by the Company. In June 1993, the loan was refinanced through the
placement of 7.08% Senior Notes (the "Notes"), totaling $13,240,994, with two
insurance company lenders. In July 1996, the Notes, then totaling $11,869,497,
were purchased by the Company. The Notes, which are guaranteed by the Company,
provide for repayment through 2009. In addition, the Notes are collateralized by
the unallocated Preferred Shares. Scheduled payments of principal under this
agreement at December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997 $ 560,430
1998 600,108
1999 642,596
2000 688,092
2001 736,809
Thereafter 8,118,087
</TABLE>
Each year dividends on the Preferred Shares (allocated and unallocated) and
Company contributions to the Plan are used to repay the Notes.
As the Plan makes each payment of principal and interest each year, an
appropriate number of Preferred Shares are allocated to eligible employees'
accounts in accordance with matching provisions noted above.
The financial statements of the Plan present separately the assets and
liabilities and changes therein pertaining to:
a. The accounts of employees with vested rights in allocated stock
(Allocated) and
b. Stock not yet allocated to employees (Unallocated).
Preferred Shares distributed to participants are converted to Company common
stock based upon a predetermined formula set forth in the Company's Amended
Articles of Incorporation. Benefits payable to participants represent the fair
value of vested common stock and cash in terminated participants' accounts,
after conversion of Preferred Shares.
7
<PAGE> 11
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
B. DESCRIPTION OF THE PLAN--CONTINUED
Each participant is entitled to exercise voting rights attributable to the
shares allocated to his or her account and to exercise proportional voting
rights of unallocated Preferred Shares. Each participant is notified prior to
the time that such rights are to be exercised.
The Plan is administered by the Administrative Committee (the "Committee")
appointed by the Company's Board of Directors. The trust department of LaSalle
National 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.
Upon termination of the Plan, amounts credited to each participant's account
shall be 100% vested and nonforfeitable. Additionally, the interest of each
participant in the trust fund will be distributed to such participant or his or
her beneficiary at the time prescribed by the Plan terms and the Code.
The foregoing description of the Plan provides only general information.
Additional information about the Plan agreement, allocation of Preferred Shares,
forfeitures and distributions from the Plan may be obtained from the Committee.
8
<PAGE> 12
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
C. STATEMENTS OF CHANGES IN ASSETS OF PARTICIPANT DIRECTED FUNDS
The amount of assets invested in each participant directed fund at the beginning
and end of the Plans' year and changes in assets in each fund during the year
were as follows:
<TABLE>
<CAPTION>
Commercial
CIGNA Intertech
Guaranteed Fidelity Fidelity Fidelity Fidelity Common Participant
Long Term Intermediate Balanced U.S. Equity Growth Co. Stock Loans
Account Bond Fund Fund Index Fund Fund Fund Receivable
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Employee contributions $ 1,215,737 $ 227,499 $ 388,968 $ 361,239 $ 986,487 $1,249,991
Earnings from investments 620,061 86,729 113,235 52,545 276,361 117,087 $ 46,944
-------------------------------------------------------------------------------------------------
Total additions 1,835,798 314,228 502,203 413,784 1,262,848 1,367,078 46,944
Deductions:
Distributions 4,511,974 640,297 834,441 632,124 1,473,561 404,922
Administrative expenses 41 10 5 3 9
-------------------------------------------------------------------------------------------------
Total deductions 4,512,015 640,307 834,446 632,127 1,473,570 404,922
Net realized and unrealized
appreciation
(depreciation) in the
fair value of investments (82,578) 18,874 450,939 736,651 3,304,025
Transfers (from) to fund (339,361) (135,847) (43,199) 475,929 797,318 (391,483) (247,179)
-------------------------------------------------------------------------------------------------
Net (deductions) additions (3,015,578) (544,504) (356,568) 708,525 1,323,247 3,874,698 (200,235)
Net fund assets at beginning
of year 13,100,661 1,541,432 2,337,211 1,717,648 5,356,270 3,042,398 764,038
-------------------------------------------------------------------------------------------------
Net fund assets at end of
year $10,085,083 $ 996,928 $ 1,980,643 $ 2,426,173 $ 6,679,517 $ 6,917,096 $ 563,803
=================================================================================================
</TABLE>
Cash and cash equivalents relating to participant directed funds amounted to
$1,912,328 at December 31, 1996.
9
<PAGE> 13
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
D. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code and is, therefore, not subject to tax under
present income tax laws. The Plan is amended periodically to conform with
current income tax laws. The Committee is not aware of any action or event that
has occurred that might affect the Plan's qualified status.
E. TRANSACTIONS WITH PARTIES-IN-INTEREST
On September 10, 1996, the Company spun off CUNO Incorporated, a wholly-owned
subsidiary, as an independent publicly held company. The spin-off was in the
form of a one-for-one share dividend to shareholders of Company common stock as
of August 9, 1996. As a result of the share dividend, plan participants received
a total of 510,593 common shares of CUNO Incorporated.
Based on the average market value of the respective stocks at the time of the
spin-off, 56% of the cost basis of the 510,593 shares of Company common stock
held in the Plan at that time was allocated to the 510,593 shares of CUNO
Incorporated common stock. The remaining 44% became the adjusted cost basis of
the 510,593 shares of Company common stock.
The Plan purchased shares of common stock of the Company for $1,767,692 and sold
shares of common stock of the Company for $482,051 during the year ended
December 31, 1996. The Plan also sold shares of CUNO Incorporated for
$5,718,750.
The Plan received 83,811 shares of Company common stock with a historic cost
basis of $816,291 as employee rollover contributions. These shares were rolled
over by Plan participants that were participants in the "Employee Savings and
Stock Purchase Plan of Commercial Intertech Corp.", a qualified plan that was
terminated in 1996.
The Plan received dividends on common stock of the Company of $256,704 and
dividends on Preferred Shares of the Company of $1,181,105 during the year ended
December 31, 1996.
At December 31, 1996 and 1995, the Plan had a noncash contribution receivable
from the Company of 25,878 shares and 47,011 shares, respectively, of Company
common stock with a market value of $352,588 and $852,074, respectively.
10
<PAGE> 14
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
F. INVESTMENTS
The Plan's investments consist of common and Preferred Shares of the Company,
common shares of CUNO Incorporated, interests in a registered investment company
(Fidelity Management Trust Company), unallocated insurance contracts (CIGNA
Guaranteed Long Term Account), amounts in a short-term investment fund, and
loans to participants as follows:
<TABLE>
<CAPTION>
Identity of Issuer Description of Current
or Similar Party Investment Cost Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
December 31, 1996:
*Commercial Intertech Corp. 598,229 Common Shares,
$1.00 Par Value **$ 4,207,538 **$ 8,150,870
*Commercial Intertech Corp. 196,741 Convertible Series B
Preferred Shares-Allocated ** 4,574,238 ** 8,102,658
*Commercial Intertech Corp. 400,908 Convertible Series B
Preferred Shares-Unallocated ** 9,321,111 ** 16,511,115
CUNO Incorporated 110,453 Common Shares,
$.001 Par Value 858,436 1,642,988
Connecticut General Life
Insurance Company Guaranteed Long Term Account ** 10,085,083 ** 10,085,083
Fidelity Mgt. Trust Co. Intermediate Bond Fund 1,017,506 996,928
Fidelity Mgt. Trust Co. Balanced Fund 1,818,112 1,980,643
Fidelity Mgt. Trust Co. U.S. Equity Index Fund 1,780,731 2,426,173
Fidelity Mgt. Trust Co. Growth Company Fund ** 5,322,628 ** 6,679,517
*LaSalle Nat'l Bank, N.A. Short-Term Investment Fund ** 4,807,197 ** 4,807,197
Participants Loans Receivable 563,803 563,803
</TABLE>
11
<PAGE> 15
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
F. INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
Identity of Issuer Description of Current
or Similar Party Investment Cost Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
December 31, 1995:
*Commercial Intertech Corp. 384,771 Common Shares,
$1.00 Par Value **$ 5,427,139 **$ 6,973,974
*Commercial Intertech Corp. 170,903 Convertible Series B
Preferred Shares-Allocated ** 3,973,489 ** 3,973,489
*Commercial Intertech Corp. 431,747 Convertible Series B
Preferred Shares-Unallocated ** 10,038,118 ** 10,038,118
Connecticut General Life
Insurance Company Guaranteed Long Term Account ** 13,100,661 ** 13,100,661
Fidelity Mgt. Trust Co. Intermediate Bond Fund 1,528,772 1,541,432
Fidelity Mgt. Trust Co. Balanced Fund ** 2,227,488 ** 2,337,211
Fidelity Mgt. Trust Co. U.S. Equity Index Fund 1,323,120 1,717,648
Fidelity Mgt. Trust Co. Growth Company Fund ** 4,399,902 ** 5,356,270
*Mellon Bank, N.A. Temporary Investment Fund 127,197 127,197
Participants Loans Receivable 764,038 764,038
<FN>
* Party-in-interest.
** Investment representing five percent or more of the Plan's net assets
available for benefits.
</TABLE>
12
<PAGE> 16
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
F. INVESTMENTS--CONTINUED
The net appreciation (depreciation) (including investments bought, sold and held
during the year) for each significant class of investment for the year ended
December 31, 1996 is as follows:
<TABLE>
<S> <C>
Fair value determined by independent appraiser:
Commercial Intertech Corp.:
Convertible Series B Preferred Stock:
Allocated $ 3,528,420
Unallocated 7,190,004
Fair value determined by closing market price:
Commercial Intertech Corp. Common Stock:
Participant-Directed Accounts 1,856,724
Company Matching Accounts 1,496,036
CUNO Incorporated Common Stock:
Participant-Directed Accounts 1,447,301
Company Matching Accounts 1,307,438
Fidelity Intermediate Bond Fund (82,578)
Fidelity Balanced Fund 18,874
Fidelity U.S. Equity Index Fund 450,939
Fidelity Growth Company Fund 736,651
-----------------
$17,949,809
=================
</TABLE>
The Company's common stock is publicly traded on the New York Stock Exchange
(ending per share price at December 31, 1996 was $13.625). The Company's
Preferred Shares are not registered or publicly traded. Each Preferred Share is
convertible into 3.0227 shares of common stock at any time subject to
anti-dilution adjustments. The September 10, 1996 CUNO Incorporated spin-off
indicated in Note E resulted in the conversion ratio increasing to 3.0227 from
1.235. Annual dividends on the Preferred Shares are $1.97625 per share. The
Preferred Shares are callable by the Company under certain conditions specified
in the Plan, at the following prices:
<TABLE>
<CAPTION>
Call Date Call Price
----------------------------------------------------------------
<S> <C>
January 1, 1997 $23.83
January 1, 1998 23.63
January 1, 1999 23.44
January 1, 2000 and thereafter 23.25
</TABLE>
13
<PAGE> 17
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
F. INVESTMENTS--CONTINUED
CUNO Incorporated common stock is publicly traded on the NASDAQ National Market
(ending per share price at December 31, 1996 was $14.875).
G. 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:
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
-------------------------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $51,080,481 $35,166,857
Amounts allocated to withdrawing
participants (6,136,752) (358,670)
-------------------------------
NET ASSETS AVAILABLE FOR BENEFITS PER THE
FORM 5500 $44,943,729 $34,808,187
===============================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996
----------------
<S> <C>
Benefits paid to participants per the financial
statements $ 8,807,909
Add: Amounts allocated to withdrawing participants at
December 31, 1996 6,136,752
Less: Amounts allocated to withdrawing participants at
December 31, 1995 (358,670)
----------------
BENEFITS PAID TO PARTICIPANTS PER THE FORM 5500 $14,585,991
================
</TABLE>
14
<PAGE> 18
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Notes to Financial Statements--Continued
H. EMPLOYER CONTRIBUTIONS
The Company is obligated to make contributions in cash to the Plan which, when
aggregated with the Plan's dividends on Preferred Shares and interest earnings,
equal the amount necessary to enable the Plan to make its regularly scheduled
payments of principal and interest due on its Notes. This contribution enables
the Plan to allocate an appropriate number of Preferred Shares to participants
(see Note B). Should the value of Preferred Shares allocated be less than the
required matching contribution, the Company will make additional contributions
to the Plan in the form of common stock or cash. Should the value of Preferred
Shares allocated be more than the required matching contributions, any excess
value of Preferred Shares released over the required amount will be allocated
proportionately to each participant's account in the Plan based upon the ratio
of the participant's current Company matching contribution to the Plan for the
plan year to the aggregate Company matching contributions to the Plan for all
participants for the Plan year.
I. PLAN AMENDMENTS
On September 10, 1996 the Plan was amended to incorporate provisions relating to
the CUNO Incorporated spin-off. Principally, all Company employees that were
employees of CUNO Incorporated became fully vested in their Accrued Benefits,
and were terminated from the Company.
As a result of the amendment, the Plan made distributions of $7,649,035 million
to CUNO Incorporated employees in 1996, and $3,884,811 million in 1997 (for the
1996 Plan year). Respectively, the amounts represent 15.0% and 7.6% of net
assets available for benefits at December 31, 1996.
The Plan was also amended on September 10, 1996 to allow participation by
non-highly compensated employees of the Component Engineering Division, as
designated by the Company. This amendment was effective July 1, 1996 and did not
have a significant impact on the net assets available for benefits.
15
<PAGE> 19
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Item 27(a)--Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Identity of Issue Description of Current
or Similar Party Investment Cost Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* Commercial Intertech Corp. 598,229 Common Shares, $1.00 Par
Value $ 4,207,538 $ 8,150,870
* Commercial Intertech Corp. 597,649 Conv. Series B Preferred
Shares 13,895,349 24,613,773
Connecticut General Life Guaranteed Long Term Fund
Insurance Co. 10,085,083 10,085,083
Fidelity Mgt. Trust Company Intermediate Bond Fund 1,017,506 996,928
Fidelity Mgt. Trust Company Balanced Fund 1,818,112 1,980,643
Fidelity Mgt. Trust Company U.S. Equity Index Fund 1,780,731 2,426,173
Fidelity Mgt. Trust Company Growth Company Fund 5,322,628 6,679,517
* LaSalle Nat'l Bank, N.A. Short Term Investment Fund 4,807,197 4,807,197
Participants Loans Receivable 563,803 563,803
CUNO Incorporated 110,453 Common Shares, $.001 Par
Value 858,436 1,642,988
<FN>
* Party-in-interest
</TABLE>
16
<PAGE> 20
Commercial Intertech Retirement Stock
Ownership and Savings Plan
Item 27(d)--Schedule of Reportable Transactions
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Current Value Net
Identity of Description Purchase Sales Cost of of Asset on Gain
Party Involved of Assets Price Price Asset Transaction Date (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Single Transactions more than 5%
LaSalle Nat'l Trust Short Term Investment Fund $ 1 $ 2,897,500 $ 2,897,500
LaSalle Nat'l Trust Short Term Investment Fund 1 3,719,902 3,719,902
LaSalle Nat'l Trust Short Term Investment Fund $ 1 3,838,355 3,838,355 $ 0
LaSalle Nat'l Trust Short Term Investment Fund 1 2,821,250 2,821,250
CIGNA Units in Guaranteed LT Fund 1 3,719,902 3,719,902 0
Baird & Co. Cuno Inc. Common Shares 15 1,409,617 2,897,500 1,487,883
Baird & Co. Cuno Inc. Common Shares 15 1,538,477 2,821,250 1,282,773
Series of Transactions more than 5%
Mellon Bank N.A. Temporary Investment Fund 1 1 6,432,542 6,432,542 0
Mellon Bank N.A. Deposits at Interest 1 1 4,098,546 4,098,546 0
LaSalle Nat'l Trust Short Term Investment Fund 1 1 26,556,308 26,556,308 0
CIGNA Units in Guaranteed LT Fund 1 1 6,337,478 6,337,478 0
Baird & Co. Cuno Inc. Common Shares 15 2,948,094 5,718,750 2,770,656
</TABLE>
17
<PAGE> 21
SIGNATURES
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 annual report to be signed on their behalf by the undersigned
hereunto duly authorized.
COMMERCIAL INTERTECH RETIREMENT
STOCK OWNERSHIP AND SAVINGS PLAN
Date June 30, 1997 By James M. Donchess
------------- Corporate Attorney, Benefits
<PAGE> 1
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-43907) pertaining to the Commercial Intertech Retirement Stock
Ownership and Savings Plan of our report dated June 24, 1997, with respect to
the financial statements and schedules of the Commercial Intertech Retirement
Stock Ownership and Savings Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 1996.
Ernst & Young LLP
Cleveland, Ohio
June 24, 1997
