-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N7zdReDDc7djK5iTTuJoNxAKnxo5FqDJo6Jx878MU8emvqohT6tAxbK8zYM0MjWe vqGB6mXBbk4MI6eAcix5ew== 0000927796-99-000038.txt : 19990208 0000927796-99-000038.hdr.sgml : 19990208 ACCESSION NUMBER: 0000927796-99-000038 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19990205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LINENS N THINGS INC CENTRAL INDEX KEY: 0001023052 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700] IRS NUMBER: 223463939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-12381 FILM NUMBER: 99522768 BUSINESS ADDRESS: STREET 1: 6 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07015 BUSINESS PHONE: 9737781300 MAIL ADDRESS: STREET 1: 6 BRIGHTON RD CITY: CLIFTON STATE: NJ ZIP: 07015 11-K 1 ANNUAL REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (MARK ONE): [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _____ to _____ Commission File No. 1-12381 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: LINENS 'N THINGS, INC. 401(k) PLAN B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: LINENS 'N THINGS, INC. 6 Brighton Road Clifton, New Jersey 07015 ================================================================================ REQUIRED INFORMATION The following financial statements of the Linens 'n Things, Inc. 401(k) Plan, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Securities Act of 1974, as amended, are filed herewith. LINENS 'N THINGS, INC. 401(k) PLAN Financial Statements and Schedules December 31, 1997 (With Independent Auditors' Report Thereon) Index Independent Auditors' Report Statement of Net Assets Available for Plan Benefits - December 31, 1997 Statement of Changes in Net Assets Available for Plan Benefits - Year ended December 31, 1997 Notes to Financial Statements Schedule Item 27(a) - Schedule of Assets Held for Investment Purposes - December 31, 1997 1 Item 27(d) - Schedule of Reportable Transactions - Year ended December 31, 1997 2 INDEPENDENT AUDITORS' REPORT The Plan Administrator and Trustee Linens 'n Things, Inc. 401(k) Plan: We have audited the accompanying statement of net assets available for plan benefits of the Linens 'n Things, Inc. 401(k) Plan as of December 31, 1997, and the related statement of changes in net assets available for plan 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. We conducted our audit 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 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 plan benefits as of December 31, 1997 and the changes in net assets available for plan benefits for year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules 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. KPMG LLP August 31, 1998
LINENS 'N THINGS, INC. 401(K) PLAN Statement of Net Assets Available for Plan Benefits December 31, 1997 Assets: Investments managed by the Bank of New York - mutual funds at fair value (note 4): Principle Protection Fund $ 523,302 Intermediate Return Fund 1,446,141 Maximum Appreciation Fund 1,494,365 Fidelity Growth & Income Fund 4,011,474 Retirement Preservation Trust 3,107,139 American Europacific Fund 616,100 Collective Short Term Investment Fund 33,311 --------------- Total investments 11,231,832 Loans to participants 319,316 --------------- Net assets available for plan benefits $ 11,551,148 =============== See accompanying notes to financial statements.
LINENS 'N THINGS, INC. 401(K) PLAN Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1997 Principal Maximum Fidelity Retirement Protection Intermediate Appreciation Growth & Preservation Fund Return Fund Fund Income Fund Fund ------------ ------------ ------------ ------------- ------------- Additions to net assets attributed to: Investment income: Interest and dividends $ - - - 164,796 176,099 Net appreciation (depreciation) in fair value of investments 40,387 146,540 200,448 476,925 - Realized gain 5,521 17,618 45,276 28,512 - Transfer from other plan (note 1) 389,121 1,025,275 1,160,224 2,313,482 2,876,028 Contributions: Rollover contributions 43,659 82,461 39,639 77,810 20,097 Participants' 62,497 190,504 187,066 507,325 415,021 Employer's 51,335 163,130 157,503 390,470 346,800 ------------ ------------ ------------ ------------- ------------- Total additions 592,520 1,625,528 1,790,156 3,959,320 3,834,045 ------------ ------------ ------------ ------------- ------------- Deductions from net assets attributed to: Benefits paid to participants - - - - - Administrative expenses 5,460 14,426 15,702 - - Withdrawals - - - - - ------------ ------------ ------------ ------------- ------------- Total deductions 5,460 14,426 15,702 - - ------------ ------------ ------------ ------------- ------------- Interfund transfers (63,758) (164,961) (280,089) 52,154 (726,906) ------------ ------------ ------------ ------------- ------------- Net increase, representing net assets at end of period $ 523,302 1,446,141 1,494,365 4,011,474 3,107,139 ============ ============ ============ ============= ============= Collective American Short Term Europacific Investment Participant Fund Fund loans Total ------------ ------------ ------------ ------------- Additions to net assets attributed to: Investment income: Interest and dividends $ 9,462 4,152 17,665 372,174 Net appreciation (depreciation) in fair value of investments (27,219) - - 837,081 Realized gain 38,423 - - 135,350 Transfer from other plan (note 1) 332,503 21,464 235,847 8,353,944 Contributions: Rollover contributions 18,384 - - 282,050 Participants' 102,400 - - 1,464,813 Employer's 73,325 145 - 1,182,708 ------------ ------------ ------------ ------------- Total additions 547,278 25,761 253,512 12,628,120 ------------ ------------ ------------ ------------- Deductions from net assets attributed to: Benefits paid to participants - 779,615 - 779,615 Administrative expenses - 126,298 - 161,886 Withdrawals - 135,471 - 135,471 ------------ ------------ ------------ ------------- Total deductions - 1,041,384 - 1,076,972 ------------ ------------ ------------ ------------- Interfund transfers 68,822 1,048,934 65,804 - ------------ ------------ ------------ ------------- Net increase, representing net assets at end of period $ 616,100 33,311 319,316 11,551,148 ============ ============ ============ =============
See accompanying notes to financial statements. LINENS 'N THINGS, INC. 401(K) PLAN Notes to Financial Statements December 31, 1997 (1) PLAN DESCRIPTION The following description of the Linens 'n Things, Inc. 401(k) Plan (the Plan) provides only general information. Participants should refer to the plan document for a more complete description of the Plan's provisions. (A) BACKGROUND The Plan is a participant directed, defined contribution plan established as of December 1, 1996. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The general administration of the Plan and the responsibility for carrying out the provisions of the Plan are maintained by a committee (the Plan Committee) appointed by Linens 'n Things, Inc. (the Company or Plan Sponsor). In accordance with the provisions of the Plan, the Plan Committee is also the Administrator (the Administrator) and has appointed The Bank of New York as the Trustee (the Trustee). The Administrator maintains participant account records and instructs the Trustee to execute transactions such as benefit payments to participants. The Trustee holds the assets of the Plan and executes transactions at the direction of the Plan Committee. The Trustee also reports to the Plan's management regarding investments and changes in these investments. The Company was a wholly-owned subsidiary of CVS Corporation (CVS) until November 26, 1996, when the Company completed an initial public offering (IPO). Prior to the IPO, the employees of the Company participated in CVS' 401(k) profit sharing plan. Subsequent to the IPO, the Company established the Plan and the net assets of its employees totaling $8,353,944, were transferred to the Plan in 1997. As of December 31, 1996, there were no assets held in the Plan. (B) ELIGIBILITY Eligible employees become a participant in the Plan at the beginning of the first payroll period of the first month following completion of a year of service with at least 1,000 hours worked and attaining age 21. Participants in the CVS 401(k) profit sharing plan were automatically eligible to participate in the Plan. (C) EMPLOYEE CONTRIBUTIONS Each year participants may contribute up to 15% of pretax annual compensation, not to exceed $9,500 in 1997. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. (D) EMPLOYER CONTRIBUTIONS Employer matching contributions are equal to 100% of the first 6% of the employee contributions. Matching contributions made by the Company in 1997 were $1,182,708. Contributions are subject to certain limitations as specified in Plan documentation. (E) INVESTMENT OPTIONS Upon enrollment in the Plan or at select intervals thereafter, a participant may elect to direct contributions or investment balances within six investment options - three individual funds and three lifestyle funds. Lifestyle funds are pre-mixed investment choices that provide diversification within one fund. The following is a brief description of each investment option: INTERNATIONAL EQUITY FUND American Europacific Fund This mutual fund invests primarily in stocks and debt obligations of companies and governments outside the United States, primarily Europe or the Pacific Basin. GROWTH AND INCOME FUND Fidelity Growth & Income Fund This mutual fund's objective is to seek capital appreciation and current income. The fund invests primarily in stocks of companies that pay current dividends and offer potential growth of earnings. STABLE VALUE FUND Retirement Preservation Fund This fund seeks to preserve capital and to provide current income at levels that are typically higher than those provided by money market funds. Its investments consist of guaranteed investment contracts issued by a diversified group of banks, insurance companies and financial services companies. Its portfolio may also include high-quality money market securities. LIFESTYLE FUNDS Aggressive Lifestyle Fund - Maximum Appreciation Fund This lifestyle fund is a collective fund designed for individuals with long-term goals. It invests 10% of its money in bonds, 80% in stock and 10% in stable-value (low-risk) investments. Moderate Lifestyle Fund - Intermediate Return Fund This lifestyle fund is a collective fund designed for individuals with intermediate-term goals. It invests 20% of its money in bonds, 40% in stocks and 40% in stable-value (low risk) investments. Conservative Lifestyle Fund - Principal Protection Fund This lifestyle fund is a collective fund designed for individuals with short-term goals. It invests 10% of its money in bonds, 20% in stocks and 70% in stable-value (low risk) investments. (F) PARTICIPANTS' ACCOUNTS Each participant's account is credited with the participant's contribution and allocations of investment income or loss. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. (G) VESTING Participants are immediately vested in their contributions plus actual earnings or losses thereon. Vesting in the Company's matching contribution portion of their accounts plus actual earnings or losses thereon is based on years of continuous service. A participant is 50% vested after 3 years and 100% vested after five years of credited service. (H) PAYMENT OF BENEFITS Upon reaching normal retirement (age 65 or age 55 with 10 years of vested service) or upon permanent disability, all amounts credited to a participant's account become distributable. Distributions will be made as soon as administratively feasible, following a participant's request, and will be made in a lump-sum cash payment. Upon a participant's death, the participant's beneficiary is entitled to 100% of the participant's vested account balance. Upon termination of service, the Administrator will direct the Trustee to pay to the participant his or her benefit in an immediate lump sum or a deferred lump sum, if certain criteria are met. (I) FORFEITURES Upon a participant's termination date, and prior to the time the participant becomes vested in his or her account, the non-vested portion, if any, shall be forfeited. These accounts will be used to restore amounts previously forfeited by participants but required to be reinstated upon resumption of employment, to pay administrative expenses, or to reduce employer contributions. (J) ADMINISTRATIVE EXPENSES All administrative expenses are paid by the Plan. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) BASIS OF PRESENTATION The accompanying financial statements have been prepared on an accrual basis and present the net assets available for plan benefits of the Plan and the changes in those net assets in conformity with generally accepted accounting principles. (B) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of change in net assets available for plan benefits during the reporting period. Actual results could differ from those estimates. (C) INVESTMENTS Purchases and sales of investments are recorded on a trade-date basis. Investment income is recorded as earned on an accrual basis. Dividend income is recorded on the ex-dividend date. Each investment fund is stated at the market value on the last business day of the Plan year as reported by the Trustee, which is based on the market value of the underlying securities based on quotations from national security exchanges. (3) LOANS TO PLAN PARTICIPANTS Under the terms of the Plan, participants may obtain loans from the Plan, utilizing funds accumulated in their accounts. The minimum amount which may be borrowed is $1,000. Participants can borrow up to a maximum of 50% of their vested account balance but not more than $50,000, less their highest outstanding loan balance during the previous 12 months. The loans are repaid to the Plan through after-tax payroll deductions. The term of the loan is arrived at by mutual agreement between the Plan Committee and the participant, but may not exceed five years unless the loan is to be used in conjunction with the purchase of the principal residence of the participant. (4) INVESTMENTS At December 31, 1997, the Plan's assets were allocated among six investment options as disclosed in note l(e). The investment options are administered by independent investment managers. Employee asset allocations that are awaiting processing are temporarily invested in the Collective Short Term Investment Fund. This fund is also used to account for and administer participants' loans. The loan repayments and interest earned are allocated to each of the investment funds based upon the participant's contribution election percentages. (5) 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. If the Company were to terminate the Plan, all participants in the Plan would become fully vested. (6) FEDERAL INCOME TAXES The Administrator submitted an application and plan document to the Internal Revenue Service for a letter of determination stating that the Plan qualifies as exempt from federal income taxes. In the opinion of the Administrator, the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and the trust is exempt from federal income taxes under Section 501(a) of the Code. Schedule 1
LINENS 'N THINGS, INC. 401(k) PLAN Item 27(a) - Schedule of Assets held For Investment Purposes December 31, 1997 Fair Description Units Cost Value ----------- ----- ---- ----- Investments - managed by the Bank of New York - mutual funds: Principal Protection Fund 35,916 $ 482,914 523,302 Intermediate Return Fund 88,395 1,299,601 1,446,141 Maximum Appreciation Fund 80,515 1,293,917 1,494,365 Fidelity Growth & Income Fund 105,288 3,534,549 4,011,474 Retirement Preservation Fund 3,107,139 3,107,139 3,107,139 American Europacific Fund 23,678 643,320 616,100 Collective Short Term Investment Fund 33,311 33,311 33,311 *Loans to participants -- 319,316 319,316 =========== =============== ============ $ 10,714,067 11,551,148 =============== ============
*Party in interest. See accompanying independent auditors' report.
Schedule 2 LINENS 'N THINGS, INC. 401(k) PLAN Item 27(d) - Schedule of Reportable Transactions Year ended December 31, 1997 Realized Type of Gains Transaction Units Description Cost Proceeds (losses) ----------- ----- ----------- ---- -------- -------- Single transactions: Purchase 71,302 Intermediate Return Fund $ 1,025,275 -- -- Purchase 74,240 Maximum Appreciation Fund 1,160,224 -- -- Purchase 72,873 Fidelity Growth & Income Fund 2,313,482 -- -- Purchase 2,876,028 Retirement Preservation Fund 2,876,028 -- -- Cumulative transactions: Purchases 104,383 Intermediate Return Fund 1,531,342 -- -- Purchases 111,477 Maximum Appreciation Fund 1,777,812 -- -- Purchases 119,671 Fidelity Growth & Income Fund 3,997,300 -- -- Purchases 4,036,716 Retirement Preservation Fund 4,036,716 -- -- Purchases 28,090 American Europacific Fund 763,043 -- -- Purchases 3,880,664 Collective Short Term Investmend Fund 3,880,664 -- -- Sales 929,577 Retirement Preservation Fund 929,577 929,577 -- Sales 3,847,799 Collective Short Term Investment Fund 3,847,799 3,847,799 -- =========== ============= ======
See accompanying independent auditors' report. 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 its behalf by the undersigned hereunto duly authorized. LINENS 'N THINGS, INC. 401(k) PLAN (Name of Plan) BRIAN D. SILVA Date: February 5, 1999 By: ______________________________________ Brian D. Silva Senior Vice President, Human Resources EX-23 2 EX. 23 - CONSENT OF KPMG LLP Consent of Independent Auditors The Plan Administrator and Trustee Linens 'n Things, Inc. Linens 'n Things, Inc. 401(k) Plan: We consent to incorporation by reference in the Registration Statements Numbers 333-26819, 333-26827 and 333-55803 on Form S-8 of our report dated August 31, 1998 relating to the statement of net assets available for Plan benefits of the Linens 'n Things, Inc. 401(k) Plan as of December 31, 1997 and the related statement of changes in net assets available for Plan benefits for the year then ended, which report appears in the December 31, 1997 Annual Report of the Linens 'n Things, Inc. 401(k) Plan on Form 11-K. KPMG LLP New York, New York February 5, 1999 -----END PRIVACY-ENHANCED MESSAGE-----