UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ý 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, 2002
OR
o 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 0-10964
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
MAXWELL TECHNOLOGIES, 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:
MAXWELL TECHNOLOGIES, INC.
9244 Balboa Avenue
San Diego, CA 92123
Maxwell Technologies, Inc.
401(k) Savings Plan
Audited Financial Statements and
Supplemental Schedule
Year ended December 31, 2002
REQUIRED INFORMATION
Maxwell Technologies, Inc. 401(k) Savings Plan (the “Plan”) is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the following financial statements and schedules have been prepared in accordance with the financial reporting requirements of ERISA.
The following financial statements, schedule and exhibit are filed as a part of this Annual Report on Form 11-K.
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REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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FINANCIAL STATEMENTS: |
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Statements of Net Assets Available for Benefits as of December 31, 2002 and 2001 |
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Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2002 |
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Schedule of Assets Held for Investment Purposes - Schedule H, Line 4i - as of December 31, 2002 |
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EXHIBIT 23-1 - |
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CONSENT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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Report of Independent Registered Public Accounting Firm
Maxwell Technologies, Inc. as
Plan Administrator of Maxwell Technologies, Inc.
401(k) Savings Plan
We have audited the accompanying statement of net assets available for benefits of Maxwell Technologies, Inc. 401(k) Savings Plan as of December 31, 2002, and the related statement of changes in net assets available for benefits for the year 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 audit. The accompanying statement of net assets available for benefits of the Maxwell Technologies, Inc. 401(k) Savings Plan as of December 31, 2001, was audited by other auditors whose report thereon dated May 10, 2002, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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 audit provides 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 December 31, 2002, and the changes in its net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002 is presented for purposes 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. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audit 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.
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/s/ |
J.H. Cohn LLP |
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J.H. COHN LLP |
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San Diego, California
June 28, 2004
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Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
Maxwell Technologies, Inc. as
Plan Administrator of Maxwell Technologies, Inc.
401(k) Savings Plan
We have audited the accompanying statement of net assets available for benefits of Maxwell Technologies, Inc. 401(k) Savings Plan as of December 31, 2001. This financial statement is the responsibility of the Plan’s management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2001, in conformity with U.S. generally accepted accounting principles.
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/s/ ERNST & YOUNG LLP |
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May 10, 2002
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Maxwell Technologies, Inc. 401(k) Savings Plan
Statements of Net Assets Available for Benefits
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December 31, |
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2002 |
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2001 |
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ASSETS |
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INVESTMENTS, AT FAIR VALUE: |
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Declared rate funds |
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$ |
18,835,330 |
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$ |
18,741,468 |
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Pooled separate accounts |
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14,453,524 |
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20,448,185 |
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Maxwell Technologies, Inc. common stock |
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168,069 |
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442,902 |
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Participant loans |
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181,377 |
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236,698 |
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Total investments |
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33,638,300 |
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39,869,253 |
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RECEIVABLES: |
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Employee contributions |
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46,946 |
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36,129 |
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Employer contributions |
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13,490 |
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10,553 |
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Total receivables |
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60,436 |
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46,682 |
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NET ASSETS AVAILABLE FOR BENEFITS |
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$ |
33,698,736 |
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$ |
39,915,935 |
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See notes to financial statements.
5
Maxwell Technologies, Inc. 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
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ADDITIONS (REDUCTIONS): |
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Investment loss: |
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Net depreciation in fair value of investments |
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$ |
(4,258,063 |
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Interest |
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874,099 |
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Total investment loss |
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(3,383,964 |
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Contributions: |
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Participants |
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1,059,742 |
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Employer |
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322,232 |
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Rollover |
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91,009 |
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Total contributions |
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1,472,983 |
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Total reductions |
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(1,910,981 |
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DEDUCTIONS: |
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Benefits paid to participants |
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4,291,805 |
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Administrative expenses |
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14,413 |
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Total deductions |
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4,306,218 |
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NET DECREASE |
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(6,217,199 |
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NET ASSETS AVAILABLE FOR BENEFITS: |
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Beginning of year |
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39,915,935 |
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End of year |
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$ |
33,698,736 |
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See notes to financial statements.
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Maxwell Technologies, Inc. 401(k) Savings Plan
Year ended December 31, 2002
1. DESCRIPTION OF THE PLAN
The following description of the Maxwell Technologies, Inc. 401(k) Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General - The Plan is a defined contribution plan available to all eligible employees of Maxwell Technologies, Inc. (the “Company”). The effective date of the Plan is August 1, 1983. The Plan was amended and restated in its entirety effective January 1, 2001. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Eligibility - Employees of the Company who have at least 30 days of service are eligible to enter the Plan. After one year of service, employees are eligible to participate in the Company’s matching and discretionary contributions. An eligible employee may enter the Plan as an active member on the first day of a full payroll period.
Contributions - Participants may contribute from 1% to 15% of pretax annual compensation, subject to the limits of the Internal Revenue Code (the “Code”). Participants may also contribute amounts representing distributions from other qualified plans.
Participants may elect to make after-tax contributions to their own account and designate the manner in which these funds will be invested. Such voluntary contributions may be made for up to 10% of compensation less the amount of tax-deferred contributions participants made during the year.
The Company’s matching contribution is 50% of the first 6% of base compensation that a participant contributes to the Plan.
The Company may also make annual discretionary contributions in an amount determined at the Plan year-end. The discretionary contribution is allocated to participants in the ratio that their compensation bears to the total compensation paid to all eligible participants for the Plan year. There were no discretionary contributions in 2002.
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Participant Accounts - Each participant’s account is self-directed and is credited with the participant’s contributions, the participant’s share of the employer’s contributions, if any, and Plan earnings or losses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.
Vesting - Participants are immediately vested in their contributions to the Plan as well as the employer’s contributions to the Plan.
Hardship Withdrawals - Participants may withdraw all or a percentage of their account balances attributable to their own contributions upon approval of the Plan Administrator and subject to Internal Revenue Service hardship withdrawal rules. After making a withdrawal, a participant is suspended from making additional contributions for a period of six months from the effective date of the withdrawal.
Withdrawals - Participants may make a cash withdrawal at any time from their after-tax contributions to the Plan.
Participant Loans - Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan fund. Loan terms range from 1-5 years or up to 10 years for the purchase of a primary residence. The loans are secured by the balance in the participant’s account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator. Interest rates range from 5.75% to 9.5%. Principal and interest is paid through payroll deductions. Participants may have up to two outstanding loans at a time.
Payments of Benefits - Upon termination of service, death, disability or retirement, a participant or beneficiary may receive a lump-sum amount equal to the vested value of his or her account or elect to receive installment payments. If the participant’s account is $5,000 or less, the Plan may distribute the entire balance in a lump sum.
Plan Termination - Although it has not expressed any intent to do so, 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and are presented on the accrual basis of accounting.
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 that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
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Investment Valuation and Income Recognition - Investments in pooled separate accounts are valued at current fair value, which represents the net asset value of units held at year-end. Company common stock is valued at fair value based on quoted market price. Declared rate funds (CIGNA Guaranteed Long-Term Fund and Guaranteed Short-Term Fund) are valued at fair value. The Declared rate funds consist of two components; the Guaranteed Long-Term Fund which invests primarily in high-quality fixed income instruments, principally intermediate term bonds and commercial mortgages within Connecticut General’s General Account, and a short-term cash component held in the insurance company’s Guaranteed Short-Term Account which consists of unallocated funds at year end. Interest rates are adjusted semiannually. Declared rate funds have no maturity dates or penalties for early withdrawals. The funds are not fully benefit responsive. Upon the Plan’s discontinuance with CIGNA, CIGNA has the right to hold the fund’s assets for five years and pay them to the Plan Sponsor in annual installments. There are no reserves against the declared rate funds value for credit risk of the rate fund issuer or otherwise. Participant loans are valued at cost, which approximates fair value.
Purchases and sales of securities are reflected on the trade dates. Interest income is recorded on the accrual basis.
Payment of Benefits – Benefits are recorded when paid.
3. INVESTMENTS
The Connecticut General Life Insurance Company, custodian of the Plan, holds the Plan’s investments and executes all investment transactions. On April 1, 2004, the retirement business of Connecticut General Life Insurance Company and the CIGNA group was acquired by The Prudential Insurance Company of America. During 2002, the Plan’s investments (including investments purchased, sold, as well as held during the year) depreciated in fair value as determined by quoted market prices as follows:
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Net
Realized and |
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Pooled separate accounts |
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$ |
(4,136,220 |
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Maxwell Technologies, Inc. common stock |
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(121,843 |
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$ |
(4,258,063 |
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The fair value of individual investments that represent 5% or more of the Plan’s net assets is as follows:
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December 31, |
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2002 |
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2001 |
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CIGNA Guaranteed Long-Term Fund |
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$ |
18,835,331 |
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$ |
18,741,468 |
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Charter Large Company Stock Growth II — Morgan |
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2,984,869 |
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4,329,103 |
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CIGNA Stock Market Index Fund |
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2,716,043 |
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4,176,882 |
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CIGNA Lifetime 40 Fund |
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2,979,274 |
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3,533,583 |
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Janus Worldwide Fund |
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— |
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2,323,717 |
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Invesco Dynamics |
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— |
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2,946,611 |
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Mid Cap Growth Artisan Partners |
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1,782,049 |
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— |
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The Plan provides for various investment options in any combination of Company stock, declared rate funds, pooled separate accounts, and other investment securities. Investments are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.
4. PARTY-IN-INTEREST TRANSACTIONS:
Certain Plan investments are in shares of pooled separate accounts managed by the Trustee or common stock shares of the Plan sponsor; therefore, these transactions qualify as party-in-interest transactions.
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service dated April 28, 2004, stating that the Plan is qualified, in form, under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan qualifies and the related trust is tax exempt.
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Maxwell Technologies, Inc. 401(k) Savings Plan
EIN: 95-2390133
Plan No.: 001
Schedule of Assets Held for Investment Purposes - Schedule H, Line 4i
December 31, 2002
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(a) |
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(b) |
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(c) |
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(e) |
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* |
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CIGNA Guaranteed Long-Term Fund |
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Declared rate fund |
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$ |
18,835,331 |
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* |
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CIGNA Stock Market Index Fund |
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Pooled separate account |
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2,716,043 |
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* |
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CIGNA Lifetime 20 Fund |
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Pooled separate account |
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423,769 |
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* |
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CIGNA Lifetime 30 Fund |
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Pooled separate account |
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429,627 |
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* |
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CIGNA Lifetime 40 Fund |
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Pooled separate account |
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2,979,274 |
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* |
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CIGNA Lifetime 50 Fund |
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Pooled separate account |
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227,802 |
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* |
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CIGNA Lifetime 60 Fund |
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Pooled separate account |
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53,101 |
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* |
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Janus Worldwide Fund |
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Pooled separate account |
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1,430,236 |
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* |
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Core Bond Enhanced Index Fund |
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Pooled separate account |
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384,631 |
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* |
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Charter Large Company Stock Value I – Levin |
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Pooled separate account |
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216,790 |
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* |
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Charter Large Company Stock Growth II – Morgan |
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Pooled separate account |
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2,984,869 |
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* |
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Charter Small Company Stock Value I – Berger |
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Pooled separate account |
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487,819 |
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* |
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Charter Small Company Stock Growth II – Timessquare |
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Pooled separate account |
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176,035 |
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* |
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Mid Cap Value Wellington Management |
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Pooled separate account |
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161,478 |
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* |
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Mid Cap Growth Artisan Partners |
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Pooled separate account |
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1,782,049 |
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Participant loans |
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5.75% - 9.5% interest; various maturities |
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181,377 |
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* |
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Maxwell Technologies, Inc. Common Stock |
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Company stock |
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168,069 |
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Total |
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$ |
33,638,300 |
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* Party-in-interest to the Plan.
Cost of assets is not required to be disclosed since investments are participant directed.
See Report of Independent Registered Public Accounting Firm.
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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 annual report to be signed on its behalf by the undersigned hereunto duly authorized.
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Maxwell Technologies, Inc. 401(k) Savings Plan |
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Date: June 28, 2004 |
/s/ Tesfaye Hailemichael |
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Tesfaye Hailemichael,
Vice President, Finance, |
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