-----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, C1B/9jb1YpV7kxjmcVX3jvLvzxp0VPBdzxYjcs+vkf8z6g5RfaUYxp9NALkW5q98 Z9zmlZIepj33SGYQpijvug== 0000927796-99-000178.txt : 19990630 0000927796-99-000178.hdr.sgml : 19990630 ACCESSION NUMBER: 0000927796-99-000178 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 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: 99655605 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. [NO FEE REQUIRED] For the fiscal year ended December 31, 1998 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 1-12381 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. 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 DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. REQUIRED INFORMATION Page No. -------- A. FINANCIAL STATEMENTS Independent Auditors' Report 3 Statements of Financial Condition as of December 31, 1998 and 1997 4 Statements of Income and Changes in Plan Equity for the Years Ended December 31, 1998 and 1997 5-6 Notes to Financial Statements 7-10 B. EXHIBITS 23. Independent Accountants' Consent 12 Independent Auditors' Report Compensation Committee Linens 'n Things, Inc. Deferred Compensation Plan of Linens 'n Things, Inc.: We have audited the accompanying statements of financial condition of the Deferred Compensation Plan of Linens 'n Things, Inc. (the "Plan") as of December 31, 1998 and 1997 and the related statements of income and changes in plan equity 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 generally accepted auditing standards. Those standards require that we plan and perform the audits 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 financial condition as of December 31, 1998 and 1997, and the income and changes in plan equity for the years then ended in conformity with generally accepted accounting principles. KPMG LLP New York, New York May 28, 1999
Linens 'n Things, Inc. Deferred Compensation Plan Statements of Financial Condition December 31, 1998 December 31, 1997 ---------------------------- ----------------------------- Assets: Linens 'n Things, Inc. Common Stock Fund $ 19 $1,449,397 (cost $19 and $963,497 in 1998 and 1997, respectively) T. Rowe Price Blue Chip Growth Fund 2,162,648 1,232,554 (cost $2,162,648 and $1,046,326 in 1998 and 1997, respectively) Scudder Value Fund 1,240,677 1,032,128 (cost $1,240,677 and $1,102,427 in 1998 and 1997, respectively) Neuberger & Berman Genesis Fund 1,153,484 1,022,229 (cost $1,153,484 and $815,937 in 1998 and 1997, respectively) Warburg Pincus Emerging Growth Fund 431,042 413,454 (cost $431,042 and $459,577 in 1998 and 1997, respectively) Strong Government Securities Fund 42,918 70,124 (cost $42,918 and $68,383 in 1998 and 1997, respectively) Money Market Fund 27,087 -- (cost $27,087 and $0 in 1998 and 1997, respectively) Contributions receivable - participants 10,531 -- ---------------------------- ----------------------------- Total plan equity $5,068,406 $5,219,886 ============================ =============================
The accompanying notes are an integral part of these financial statements.
LINENS 'N THINGS, INC. DEFERRED COMPENSATION PLAN Statement of Income and Changes in Plan Equity Year ended December 31, 1998 Neuberger Linens 'n & Things, Inc. T. Rowe Price Scudder Berman Warburg Pincus Common Stock Blue Chip Value Genesis Emerging Fund Growth Fund Fund Fund Growth Fund ------------ ------------- --------- ---------- ---------------- Additions to plan equity attributed to: Investment income: Dividend income ..................... $ -- $ 7,916 $ 9,668 $ 9,628 $ 44 Net realized gain (loss) ............ 464,610 622,209 38,450 70,451 (37,438) Net unrealized (depreciation) appreciation in fair value of investments ....................... (485,901) (186,228) 70,300 (206,292) 46,123 Contributions ......................... 1,979,735 -- -- -- -- Transfers among funds ................. 22,774 525,775 98,932 296,648 8,859 ---------- ------------ ------------ ------------ ---------- Total additions ................ 1,981,218 969,672 217,350 170,435 17,588 Deductions from plan equity attributed to: Distributions ......................... (1,733,699) -- -- -- -- Transfers among funds ................. (1,696,897) (39,578) (8,801) (39,180) -- ----------- ------------ ------------ ------------ ---------- Total deductions ................ (3,430,596) (39,578) (8,801) (39,180) -- ----------- ------------ ------------ ------------ ---------- Net (decrease) increase in plan equity.... (1,449,378) 930,094 208,549 131,255 17,588 Plan equity at beginning of year ......... 1,449,397 1,232,554 1,032,128 1,022,229 413,454 ----------- ------------ ------------ ------------ ---------- Plan equity at end of year ............... $ 19 $ 2,162,648 $ 1,240,677 $ 1,153,484 $ 431,042 ============ ============ =========== ============ ========== The accompanying notes are an integral part of these financial statements. Strong Government Money Contributions Securities Market receivable - Fund Fund participants Total ----------- ------- ------------- ------ Additions to plan equity attributed to: Investment income: Dividend income ..................... $ 4,156 $ 713 $ -- $ 32,125 Net realized gain (loss) ............ 4,354 -- -- 1,162,636 Net unrealized (depreciation) appreciation in fair value of investments ....................... (1,741) -- -- (763,739) Contributions ......................... -- 744,705 10,531 2,734,971 Transfers among funds ................. 22,283 1,583,774 -- 2,559,045 ----------- ------------ -------- ----------- Total additions ................ 29,052 2,329,192 10,531 5,725,038 Deductions from plan equity attributed to: Distributions ......................... -- (1,583,774) -- (3,317,473) Transfers among funds ................. (56,258) (718,331) -- (2,559,045) ----------- ------------ -------- ----------- Total deductions ................ (56,258) (2,302,105) -- (5,876,518) ----------- ------------ -------- ----------- Net (decrease) increase in plan equity.... (27,206) 27,087 10,531 (151,480) Plan equity at beginning of year ......... 70,124 -- -- 5,219,886 ----------- ------------ -------- ----------- Plan equity at end of year ............... $ 42,918 $ 27,087 $10,531 $ 5,068,406 ========== ============ ======== ===========
The accompanying notes are an integral part of these financial statements.
LINENS 'N THINGS, INC. DEFERRED COMPENSATION PLAN Statement of Income and Changes in Plan Equity Year ended December 31, 1997 Neuberger Linens 'n & Things, Inc. T. Rowe Price Scudder Berman Warburg Pincus Common Stock Blue Chip Value Genesis Emerging Fund Growth Fund Fund Fund Growth Fund ------------ ------------- ----------- ---------- --------------- Additions to plan equity attributed to: Investment income: Dividend income ..................... $ -- $ 6,083 $ 10,275 $ -- $ -- Net realized (loss) gain ............ (258) 168,183 70,646 60,188 24,514 Net unrealized appreciation (depreciation) in fair value of investments ....................... 485,900 186,228 (70,299) 206,292 (46,123) Contributions ......................... 977,097 1,148,256 60,679 326,167 6,671 Transfers among funds ................. -- 814,450 960,827 608,014 428,392 ----------- ------------- ------------ ------------ ----------- Total additions ................ 1,462,739 2,323,200 1,032,128 1,200,661 413,454 Deductions from plan equity attributed to: Distributions ......................... (13,342) (46,044) -- (10,509) -- Transfers among funds ................. -- (1,044,602) -- (167,923) -- ----------- ------------- ----------- ----------- --------- Total deductions ................ (13,342) (1,090,646) -- (178,432) -- ----------- ------------ ----------- ----------- --------- Net increase in plan equity .............. 1,449,397 1,232,554 1,032,128 1,022,229 413,454 Plan equity at beginning of year ......... -- -- -- -- -- ----------- ----------- ----------- ----------- --------- Plan equity at end of year ............... $ 1,449,397 $ 1,232,554 $ 1,032,128 $ 1,022,229 $ 413,454 =========== =========== =========== =========== ========= The accompanying notes are an integral part of these financial statements. Strong Government Money Securities Market Fund Fund Total ---------- ------------ ------------ Additions to plan equity attributed to: Investment income: Dividend income ..................... $ 5,896 $ 30,321 $ 52,575 Net realized (loss) gain ............ 3,745 (2,496) 324,522 Net unrealized appreciation (depreciation) in fair value of investments ....................... 1,741 -- 763,739 Contributions ......................... 163,084 3,101,951 5,783,905 Transfers among funds ................. 69,939 1,382,681 4,264,303 ----------- ----------- ---------- Total additions ................ 244,405 4,512,457 11,189,044 Deductions from plan equity attributed to: Distributions ......................... (4,125) (1,630,835) (1,704,855) Transfers among funds ................. (170,156) (2,881,622) (4,264,303) ----------- ----------- ---------- Total deductions ................ (174,281) (4,512,457) (5,969,158) ----------- ----------- ---------- Net increase in plan equity .............. 70,124 -- 5,219,886 Plan equity at beginning of year ......... -- -- -- ----------- ----------- ---------- Plan equity at end of year ............... $ 70,124 $ -- $ 5,219,886 ----------- ----------- ----------
The accompanying notes are an integral part of these financial statements. DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. Notes to Financial Statements 1. Description of the Plan The following brief description of the Deferred Compensation Plan of Linens 'n Things, Inc. (the "Plan") is provided for general information purposes only. Participants should refer to the Plan documents for more complete information. General The Plan is sponsored by Linens 'n Things, Inc. (the "Company"). The Plan was established to enable key employees of the Company to defer compensation, including stock and stock denominated awards, for personal income tax purposes. The participant-directed, non-qualified Plan was adopted on December 30, 1996 and is treated as a plan maintained for a select group of management or highly compensated individuals under the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan is not taxable as a separate entity under the Internal Revenue Code. Eligibility and Vesting The Plan covers key employees, as designated by the Company. Participation is voluntary and participants can elect to make contributions to the Plan. Participants are 100% vested in their own deferrals to the Plan at all times. Participant Accounts An account is maintained for each participant in the Plan which shows the participant's separate interest in each investment fund of the Plan. Each participant shall elect the allocation of contributions to specific funds within the Plan. The participant's account is credited, as of the end of each month, with the amount of deferred compensation contributed and, the appropriate investment income of each fund. Participants are eligible for distribution of their benefits in cash or Company common stock (if the participant has invested in Company common stock) upon retirement, death, termination of service, in the event of a designated change of control of the Company, upon election subject to penalty, and in the event of immediate unexpected financial needs of the participant subject to approval of the Compensation Committee, as the Plan is not subject to the hardship rules of Section 401 of the Internal Revenue Code. In the event of a change in control, payments in settlement of a participant's account shall be made within fifteen business days following such change in control. Grantor Trust The Company established a Grantor (Rabbi) Trust (the "Trust") to hold the assets of the Plan. The Trust shall be governed by and subject to the terms of a trust agreement entered into between the Company, as grantor, and the trustee, Bank of New York. Effective January 1999, the trustee of the Plan was changed to Prudential Trust Company and the Plan assets were transferred to Prudential Trust Company. DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. Notes to Financial Statements, continued 2. Summary of Significant Accounting Policies a) Basis of Presentation The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting. b) Investments The Plan's investments consist of mutual funds, a money market fund and a Company common stock fund. The Plan's investments are presented at their fair market values based on quoted market prices. Purchases and sales of investments are recorded on a trade-date basis. 3. Plan Termination Although the Company has not expressed any intent to terminate the Plan, it may do so at any time. In the event the Plan is terminated, all sums credited to individual accounts would be distributed to participants. 4. Administrative Expenses All administrative costs of the Plan are borne by the Company. 5. Use of Estimates and Concentration of Risks In preparing the Plan's financial statements, management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to present these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. The assets of the Plan are primarily financial instruments which are monetary in nature. As a result, interest rates have a more significant impact on the Plan's performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services as measured by the consumer price index. Investments are subject to risk conditions of the individual fund objectives, the stock market, interest rates, economic conditions and world affairs. 6. A description of the Plan's investments for the years ended December 31, 1998 and 1997 are as follows: Linens 'n Things, Inc. Common Stock Fund -- This fund consists of the Company's common stock. T. Rowe Price Blue Chip Growth Fund -- The fund's objective is long-term capital growth. The fund's strategy is to invest primarily in common stocks of large and medium-sized blue chip companies that have the potential for above-average growth in earnings and are well established in their respective industries. Scudder Value Fund -- The fund seeks long-term growth of capital through investment in equity securities that the fund considers undervalued in the marketplace. The fund invests in common stocks, preferred stocks, and securities convertible into common stocks. It invests primarily in the equity securities of medium-to-large-sized U.S. companies with annual revenues or market capitalization of at least $600 million. DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. Notes to Financial Statements, continued Neuberger & Berman Genesis Fund -- The fund seeks undervalued companies whose current product lines and balance sheets are strong. The fund invests mainly in common stock of companies with market capitalizations of up to $1.5 billion at the time of investment. Warburg Pincus Emerging Growth Fund -- The fund seeks maximum capital appreciation. The fund invests in U.S. equity securities of emerging growth companies. Emerging growth companies are small or medium sized companies that have passed their start-up phase, show positive earnings, and offer the potential for accelerated earnings growth. Strong Government Securities Fund -- The fund seeks total return by investing for a high level of current income with a moderate degree of share-price fluctuation. The fund invests primarily in higher quality bonds issued by the U.S. government or its agencies. At December 31, 1998, there were 13 participants in the Plan. There was one participant in the Linens 'n Things, Inc. Common Stock Fund, eleven participants in the T. Rowe Price Blue Chip Growth Fund, eight participants in the Scudder Value Fund, nine participants in the Neuberger & Berman Genesis Fund, three participants in the Warburg Pincus Emerging Growth Fund, three participants in the Strong Government Securities Fund and three participants in the Money Market Fund. DEFERRED COMPENSATION PLAN OF LINENS 'N THINGS, INC. Notes to Financial Statements, continued The aggregate costs, aggregate proceeds from sales and the net realized gains (losses) by fund for the years ended December 31, 1998 and 1997 were as follows:
1998 Dispositions ----------------- Net Realized Fund Cost Proceeds Gain (Loss) ------------------- ------------------- ------------------- Linens 'n Things, Inc. Common Stock $2,966,260 $3,430,870 $464,610 T. Rowe Price Blue Chip Growth 1,607,073 2,229,282 622,209 Scudder Value 1,256,095 1,294,545 38,450 Neuberger & Berman Genesis 1,149,039 1,219,490 70,451 Warburg Pincus Emerging Growth 468,436 430,998 (37,438) Strong Government Securities 95,705 100,059 4,354 Money Market 27,086 27,086 - ------------------- ------------------- ------------------- $7,569,694 $8,732,330 $1,162,636 =================== =================== ===================
1997 Dispositions ----------------- Net Realized Fund Cost Proceeds Gain (Loss) ------------------- ------------------- ------------------ Linens 'n Things, Inc. Common Stock $ 13,601 $ 13,343 $ (258) T. Rowe Price Blue Chip Growth 923,477 1,091,660 168,183 Scudder Value - 70,646 70,646 Neuberger & Berman Genesis 130,213 190,401 60,188 Warburg Pincus Emerging Growth - 24,514 24,514 Strong Government Securities 170,534 174,279 3,745 Money Market 2,749,899 2,747,403 (2,496) ------------------- ------------------- ------------------ $3,987,724 $4,312,246 $ 324,522 =================== =================== ==================
SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the members of the Deferred Compensation Committee (which is the administrative committee for the Compensation Committee of the Board of Directors of the Company) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Deferred Compensation Plan of Linens 'n Things, Inc. Deferred Compensation Committee BRIAN D. SILVA Dated: June 29, 1999 By:_______________________ Brian D. Silva Senior Vice President, Human Resources and Corporate Secretary and Member of the Deferred Compensation Committee EX-23 2 EX. 23 - CONSENT OF KPMG LLP Independent Accountants' Consent Compensation Committee Linens 'n Things, Inc. Deferred Compensation Plan of Linens 'n Things, Inc.: We consent to incorporation by reference in the Registration Statements Numbers 333-71903, 333-55803, 333-26827, and 333-26819 on Form S-8 of our report dated May 28, 1999 relating to the statements of financial condition of the Deferred Compensation Plan of Linens 'n Things, Inc. as of December 31, 1998 and 1997 and the related statements of income and changes in plan equity for the years then ended, which report appears in the December 31, 1998 Annual Report of the Deferred Compensation Plan of Linens 'n Things, Inc. on Form 11-K. KPMG LLP New York, New York June 29, 1999 -----END PRIVACY-ENHANCED MESSAGE-----