SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 2002.
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 1-12282
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CORRPRO COMPANIES, INC. 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CORRPRO COMPANIES, INC.
1090 ENTERPRISE DRIVE
MEDINA, OHIO 44256
1
CORRPRO COMPANIES, INC.
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401(K) SAVINGS PLAN
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TABLE OF CONTENTS
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Page
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Independent Auditors' Report 3
Statements of Net Assets Available for Benefits, March 31, 2002 and 2001 4
Statements of Changes in Net Assets Available for Benefits, years ended
March 31, 2002 and 2001 5
Notes to Financial Statements 6
Supplemental Schedules:
Schedule H, line 4i - Schedule of Assets (Held at End of Year) -
March 31, 2002 13
Independent Auditors' Consent 14
Note: All other schedules required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 have been omitted because the conditions under which they
are required are not present.
2
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Participants and Plan Administrator of the
Corrpro Companies, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Corrpro Companies, Inc. 401(k) Savings Plan (Plan), as of March 31, 2002
and 2001 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
March 31, 2002 and 2001 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 performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4i -
Schedule of Assets (Held at End of Year) - March 31, 2002 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 supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG LLP
Cleveland, Ohio
September 19, 2002
3
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
March 31,
2002 2001
----------- -----------
ASSETS:
Investments:
Guaranteed investments $ 3,593,112 $ 3,135,013
Mutual funds 10,545,129 9,785,668
Corrpro Companies, Inc. Common stock 883,966 744,526
Participant loans 511,957 631,368
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15,534,164 14,296,575
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Contributions receivable:
Participants 138,277 150,102
Employer 153,096 163,756
Accrued interest 3,419 3,263
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Total receivables 294,792 317,121
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NET ASSETS AVAILABLE FOR BENEFITS $15,828,956 $14,613,696
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended March 31,
2002 2001
------------ ------------
Additions:
Additions to net assets attributed to:
Investment income (loss):
Net depreciation in fair value
of investment $ (374,655) $ (3,981,418)
Interest 194,132 208,108
Adjustments 2,754 5,689
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Total investment loss (177,769) (3,767,621)
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Contributions
Participants 1,891,905 1,974,644
Employer 895,258 1,069,447
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2,787,163 3,044,091
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Total additions 2,609,394 (723,530)
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Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 1,367,202 2,291,679
Administrative expenses 26,932 21,734
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Total deductions 1,394,134 2,313,413
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Net increase (decrease) 1,215,260 (3,036,943)
Net assets available for benefits:
Beginning of year 14,613,696 17,650,639
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End of year $ 15,828,956 $ 14,613,696
============ ============
The accompanying notes are an integral part of these financial statements.
5
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL DESCRIPTION OF THE PLAN:
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General
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The Corrpro Companies, Inc. 401(k) Savings Plan (the "Plan") was organized and
adopted on April 1, 1984 and restated on April 1, 1999 by Corrpro Companies,
Inc. (the "Company") to encourage employee savings and to provide retirement
benefits to participants and/or their beneficiaries. It is administered by an
advisory committee (the "Committee") appointed by the Company. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
The Plan's trustee (the "Trustee" or "CIGNA") maintains all records of
investment transactions and determines the valuation of the investment
portfolio.
The Plan has been amended. See "Note 6: Plan Amendment" for further details.
The above description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Contributions and Eligibility
-----------------------------
The Plan is a defined contribution plan and contains a 401(k) provision which
permits employees to contribute elective deferrals of up to 15% of their
eligible compensation, subject to certain limitations under the Internal Revenue
Code of 1986, as amended (the "Code"). Employees may make elective deferral
contributions on the first day of the month following the completion of 30 days
of service.
The Plan also provides for an employer contribution to be determined solely at
the discretion of the Board of Directors of the Company in accordance with the
limitations prescribed by the Plan. For employer contributions, all employees
are eligible to benefit beginning the first day of the month following the
completion of one month of service. For the plan years 2002 and 2001, the
Company matched 100% on the first 3% of a participant's contribution and 50% on
the next 2% of a participant's contribution. For the period April 1, 2000 to
September 30, 2000, the Company matched a participant's contribution with cash.
Effective October 1, 2000, the Company matched a participant's contribution with
Common Stock of Corrpro Companies, Inc.
With the consent of the Committee and Trustee, an employee may request that the
Plan accept all or part of such employee's interest in another qualified plan or
individual retirement account. Such rollover contributions are maintained and
invested by the Trustee in a similar manner as other participant accounts. The
Plan's provisions with respect to rollover contributions were designed to comply
with the applicable sections of the Code.
6
Vesting
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Participants are immediately vested in their elective deferral contributions,
employer matching contributions accrued through April 5, 2002 (thereafter,
certain vesting provisions apply to employer matching contributions), and
rollover contributions plus actual earnings thereon.
Participant Direction of Investments
------------------------------------
The Plan provides that each participant or beneficiary may direct the investment
of their account balance among the following funds:
Guaranteed CIGNA Fund
The Guaranteed CIGNA Fund is invested primarily in commercial mortgages
and private bond placements. This fund has a full guarantee by CIGNA
against loss of principal and credited interest. This interest rate is
periodically reviewed and revised to reflect current investment
conditions.
Life 20, 30, 40, 50 & 60 Funds ("CIGNA LIFETIME FUNDS")
The "CIGNA LIFETIME FUNDS" are a family of five distinct investment
portfolios structured to maximize return and minimize risk over a
specific time period based on the participant's approximate age. Each
fund is primarily invested in a diversified mix of stock and bond
funds, designed to fit the time horizons and risk tolerances of
investors at different stages of their lives.
Fidelity Growth & Income Fund
The Fidelity Growth & Income Fund is invested in a diversified
portfolio of equity and fixed-income securities.
Vanguard Wellington Fund
The Vanguard Wellington Fund is invested in a diversified portfolio of
common stocks and bonds designed primarily to seek a conservation of
principal and a reasonable income return.
Fidelity Magellan
The Fidelity Magellan is invested primarily in common stock and
securities convertible into common stocks of both domestic,
multinational and foreign companies. Current income is not a
consideration.
American Century Ultra Fund
The American Century Ultra Fund is invested primarily in common stocks
of medium-sized companies that meet certain technical and fundamental
criteria.
7
Credit Suisse Emerging Growth Fund
The Credit Suisse Emerging Growth Fund is invested primarily in common
stocks and securities of small-to medium-sized companies for capital
growth. Current income is not a consideration.
Credit Suisse International Equity Fund
The Credit Suisse International Equity Fund is invested primarily in
common stocks of companies that are generally non-U.S. based. Current
income is not a consideration.
Corrpro Companies, Inc. Common Stock
The Corrpro Companies, Inc. Common Stock Fund is invested only in
common stock of the Company.
Currently, participating employees can elect to have their current contributions
invested in any of the funds available for employee contributions, or in any
combination of these funds on a daily basis in one percent increments.
Participating employees may also transfer amounts invested in any fund made
available for employee contributions on a daily basis in one percent increments.
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. Each participant's account is credited with the
participant's elective deferral contribution and an allocation of (a) the
employer contributions, (b) plan earnings, and (c) forfeitures of terminated
participants' nonvested accounts. Allocations are based on participants' account
balances, as defined in the Plan.
Realized and unrealized appreciation (depreciation) and market value changes of
investments and investment income of the Plan are allocated on a pro-rata basis
to the accounts of participants on a daily basis.
Plan Withdrawals and Distributions
----------------------------------
Upon termination of service due to death, disability or retirement, an employee
may elect to receive either a lump-sum amount equal to the value of his or her
account or annual installments upon approval by the Trustee. All withdrawals and
disbursements are subject to federal income tax upon receipt.
In situations of severe financial hardship, a participant may apply in writing
to the Committee for the distribution of his or her vested account balance. Such
hardship withdrawals may result in tax consequences to the employee as defined
in the Code.
Termination Provisions
----------------------
The Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
8
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
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Basis of Accounting
-------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Payment of Benefits
-------------------
Benefits are recorded when paid.
Use of Estimates
----------------
The preparation of 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.
Investments
-----------
CIGNA maintains all records of investment transactions and determines the
valuation of the investment portfolio. Information with respect to: (1)
investments held and their market values as presented in the statements of net
assets available for benefits and (2) unrealized appreciation and depreciation
as presented in the statements of changes in net assets available for benefits
has been certified by the Plan's trustee as being complete and accurate.
The Plan's investments in mutual funds and Corrpro Stock are stated at fair
value and participant loans are stated at the unpaid interest balance. The Plan
has a guaranteed principal and interest contract, Guaranteed Income Fund, with
CIGNA. This contract is included in the financial statements at contract value
because it is fully benefit-responsive. Contract value, which approximates fair
value, represents contributions made under the contract, plus earnings, less
Plan withdrawals and administrative expenses. There are no reserves against
contract value for credit risk of the contract issuer or otherwise. The average
yield and crediting interest rates were approximately 4.2% for 2002 and 5.2% for
2001.
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.
Proceeds from sales of securities, less market value at the beginning of the
Plan year or cost for purchases during the Plan year and net unrealized
appreciation (depreciation) based on market price fluctuations during the Plan
year or since date of acquisition, are included in the statements of changes in
net assets available for benefits.
Plan Expenses
-------------
Fees for legal counsel and auditors of the Plan are paid by the Company and thus
are not reflected in the accompanying financial statements. Costs specific to
various transactions are paid directly by the Plan and are reflected in the
accompanying statements.
9
NOTE 3 - INVESTMENTS:
--------------------
The following presents investments that represent five percent or more of the
Plan's net assets.
MARCH 31,
--------------------------
2002 2001
----------- -----------
CIGNA Guaranteed Income Fund $3,593,112 $3,135,013
Fidelity Growth and Income Fund 1,806,884 1,663,315
Vanguard Wellington Fund 1,305,257 1,197,278
Fidelity Magellan Fund 2,527,949 2,336,110
American Century Ultra Fund 1,894,202 1,740,070
Corrpro Companies, Inc. Common Stock 883,966 744,526
Other (including participant loans of $511,957 and
$631,368 respectively) 3,522,794 3,480,263
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$15,534,164 $14,296,575
=========== ===========
NOTE 4 - TAX STATUS:
-------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated July 31, 1995, that the Plan and related Trust are designed in accordance
with the applicable sections of the Internal Revenue Code (IRC). The Plan has
been amended since receiving the determination letter. However, the Plan
administrator believes that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
NOTE 5 - LOANS TO PARTICIPANTS:
------------------------------
Participants may borrow up to fifty percent of their vested account balances
subject to a maximum of $50,000. All loans bear interest at market rates and are
secured by the vested account balances of the borrower. Interest rates ranged
from 7.0% to 9.5% at the Plan years ended March 31, 2002 and 2001.
NOTE 6 - PLAN AMENDMENT:
------------------------
Effective April 1, 2002, the Plan was amended to increase the maximum amount an
employee is able to contribute from 15% to 75% of base pay, subject to Internal
Revenue Service limits. Also effective January 1, 2002, the waiting period to
make 401(k) deferrals has been extended to the first month following 90
(previously 30) days of employment.
Effective for pay periods after April 5, 2002, the Company is suspending, until
further notice, the Company match on the 401(k) elective deferrals by
participants.
10
NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
------------------------------------------------------------
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500 as of March 31, 2002 and 2001:
2002 2001
----------- -----------
Net assets available for plan benefits per
financial statements $15,828,956 $14,613,696
Less total receivables (294,792) (317,121)
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Net assets available for plan benefits per
Form 5500 $15,534,164 $14,296,575
=========== ===========
The following is a reconciliation of net increase (decrease) in assets available
for benefits per the financial statements to the Form 5500 as of March 31, 2002
and 2001:
2002 2001
---------- -----------
Increase (decrease) in assets available
for benefits per financial statements $1,215,260 ($3,036,943)
Add accrued receivables beginning of year 317,121 213,022
Less accrued receivables end of year (294,792) (317,121)
---------- -----------
Increase (decrease) in assets
available for benefits per Form 5500 $1,237,589 ($3,141,042)
========== ===========
11
The following is a reconciliation of employer contributions per the financial
statements to the Form 5500 as of March 31, 2002:
2002
--------
Employer contribution per financial statements $895,258
Add adjustments 70,584
Add accrued receivables beginning of year 163,756
Less accrued receivables end of year 153,096
Employer contributions per Form 5500 $976,502
========
12
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
PLAN #001 EIN 34-1422570
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) -
MARCH 31, 2002
--------------
(c)
(b) Description of investment including maturity date, (d) (e)
(a) Identity of issue, borrower, lessor, or similar party rate of interest, collateral, par or maturity value Cost Current Value
--- ----------------------------------------------------- --------------------------------------------------- ---- -------------
* CIGNA Guaranteed Income Fund Guaranteed Insurance Contract, 4.2% interest rate *** 3,593,112
* CIGNA Lifetime20 Fund Mutual Fund *** 275,375
* CIGNA Lifetime30 Fund Mutual Fund *** 455,738
* CIGNA Lifetime40 Fund Mutual Fund *** 594,861
* CIGNA Lifetime50 Fund Mutual Fund *** 525,362
* CIGNA Lifetime60 Fund Mutual Fund *** 82,025
Fidelity Growth and Income Fund Mutual Fund *** 1,806,884
Vanguard Wellington Fund Mutual Fund *** 1,305,257
Fidelity Magellan Fund Mutual Fund *** 2,527,949
American Century Ultra Fund Mutual Fund *** 1,894,202
Credit Suisse Emerging Growth Fund Mutual Fund *** 586,282
Credit Suisse International Equity Fund Mutual Fund *** 491,078
Corrpro Companies, Inc. Common Stock Common Stock *** 883,966
Cash Transaction Account *** 116
Participants Participant loans with various rates of interest
from 7.00% to 9.50% and various maturity dates ** 511,957
-----------
15,534,164
* Party in Interest
** Cost of Participants loans are $0 as indicated in the instructions
*** Historical cost information is no longer required on the Schedule H, line
4i - Schedule of Assets (Held at End of Year) for Participant-directed
investments
See accompanying Independent Auditors' Report
13
INDEPENDENT AUDITORS' CONSENT
-----------------------------
To the Board of Directors
Corrpro Companies, Inc.:
We consent to incorporation by reference in the Registration Statement (No.
33-74814) on Form S-8 of Corrpro Companies, Inc. of our report dated September
19, 2002, relating to the financial statements and schedule of the Corrpro
Companies, Inc. 401(k) Savings Plan included in this Annual Report on Form 11-K
for the year ended March 31, 2002.
KPMG LLP
Cleveland, Ohio
September 26, 2002
14
SIGNATURES
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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.
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
By: Corrpro Companies, Inc., as
Plan Administrator
Date: September 27, 2002 By: /s/ Robert M. Sloan
------------------ --------------------------
Robert M. Sloan
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
15