-----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, A+qKOn6K1COPPqQxY6GwlZW0ipoGGr/DLTTafg8Ih9ynjWlAwRJXvreErWP18esJ G4GD8mon+3xZrEuR8mFVxQ== 0000077449-03-000013.txt : 20030627 0000077449-03-000013.hdr.sgml : 20030627 20030627154910 ACCESSION NUMBER: 0000077449-03-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEP BOYS MANNY MOE & JACK CENTRAL INDEX KEY: 0000077449 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 230962915 STATE OF INCORPORATION: PA FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03381 FILM NUMBER: 03761306 BUSINESS ADDRESS: STREET 1: 3111 W ALLEGHENY AVE CITY: PHILADELPHIA STATE: PA ZIP: 19132 BUSINESS PHONE: 2152299000 11-K 1 r11-kus.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K (Mark One): X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE - -- SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 OR - -- TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition from to ----------- ----------- Commission file number 1-3381 ------ THE PEP BOYS SAVINGS PLAN - ------------------------- (Full title of the plan) The Pep Boys - Manny, Moe & Jack 3111 W. Allegheny Avenue Philadelphia, PA 19132 - -------------------------------- (Name of issuer of the securities held pursuant to the plan and the address of its principal executive offices) Registrant's telephone number, including area code (215)430-9000 Notices and communications from the Securities and Exchange Commission relating to this Report should be forwarded to: Frederick A. Stampone Senior Vice President - Chief Administrative Officer & Secretary The Pep Boys - Manny, Moe & Jack 3111 West Allegheny Avenue Philadelphia, PA 19132 2 THE PEP BOYS SAVINGS PLAN - ------------------------- TABLE OF CONTENTS - ---------------------------------------------------------------------------- PAGE ---- INDEPENDENT AUDITORS' REPORT 3 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits As of December 31, 2002 and December 31, 2001 4 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2002 and December 31, 2001 5 Notes to Financial Statements 6 - 9 SUPPLEMENTAL SCHEDULES: Schedule H, Item 4i - Schedule of Assets Held for Investment Purposes as of December 31, 2002 10 Schedule H, Item 4j - Schedule of Reportable Transactions for the Year Ended December 31, 2002 11 SIGNATURES 12 EXHIBIT INDEX 13 3 INDEPENDENT AUDITORS' REPORT The Administrative Committee The Pep Boys Savings Plan Philadelphia, Pennsylvania We have audited the accompanying statements of net assets available for benefits of The Pep Boys Savings Plan (the "Plan") as of December 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, such financial statements present fairly, in all material respects, the net assets available for benefits of The Pep Boys Savings Plan as of December 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 conducted 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 as of December 31, 2002, and reportable transactions for the year ended December 31, 2002, 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. Such supplemental schedules are the responsibility of the Plan's management. Such supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ Deloitte & Touche LLP Philadelphia, Pennsylvania June 2, 2003 4 THE PEP BOYS SAVINGS PLAN - ------------------------- STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 2002 AND DECEMBER 31, 2001 - ------------------------------------------------------------------------------ 2002 2001 ASSETS - ------ CASH $ 696,856 $ 20,678 --------------- ------------- INVESTMENTS: AET Stable Capital Fund II 30,698,622 28,379,266 AET Equity Index Fund II 15,886,695 19,797,527 Pep Boys Stock Fund 43,452,011 67,331,818 Invesco Total Return Fund (Investor Class) 5,512,752 5,916,808 AXP Bond Fund (Class Y) 2,211,313 1,461,647 AXP Small Company Index Fund (Class Y) 2,451,674 2,106,046 Templeton Foreign Fund (Class A) 1,119,542 929,814 Loan Fund 10,578,443 8,993,830 ------------- ------------- Total investments 111,911,052 134,916,756 ------------- -------------- CONTRIBUTIONS RECEIVABLE: Participant contribution 10,467 119,284 Employer contribution 8,807 62,131 ------------- ------------- Total contributions receivable 19,274 181,415 ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS $ 112,627,182 $135,118,849 =============== ============= See notes to financial statements.
5 THE PEP BOYS SAVINGS PLAN - ------------------------- STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2002 AND DECEMBER 31, 2001 - ------------------------------------------------------------------------------- 2002 2001 ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income: Dividend and interest income $ 1,381,954 $ 1,455,802 Interest on loans 662,457 568,123 Net realized and unrealized (loss) gain in fair value of investments (25,422,087) 50,624,480 ------------- ------------- Total investment (loss) income (23,377,676) 52,648,405 ------------- ------------- Contributions: Participants 12,050,856 12,410,079 Employer 3,946,366 4,533,003 ------------- ------------- Total contributions 15,997,222 16,943,082 ------------- ------------- Earnings refund 0 (252,467) ------------- ------------- Total (Reductions) Additions (7,380,454) 69,339,020 DEDUCTIONS TO NET ASSETS ATTRIBUTED TO: Distributions paid to participants (15,111,213) (13,857,526) ------------- ------------- NET (DECREASE)INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS (22,491,667) 55,481,494 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 135,118,849 79,637,355 ------------- ------------- End of year $112,627,182 $135,118,849 ============= ============= See notes to financial statements.
6 THE PEP BOYS SAVINGS PLAN - ------------------------- NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2002 AND DECEMBER 31, 2001 - ---------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation --------------------- The accompanying financial statements have been prepared on the accrual basis of accounting. Use of Estimates ---------------- The preparation of the 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 net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results may differ from those estimates and assumptions. Risks and Uncertainties ----------------------- The Plan provides for investment options in mutual funds and common stock of the Plan sponsor. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. Investments ----------- The loan fund is stated at cost plus accrued interest (see note 3). Investments in all other funds are stated at fair value based on quoted market prices as reported on the last business day of the plan year. 2. DESCRIPTION OF THE PLAN ----------------------- The information in these notes regarding The Pep Boys Savings Plan (the "Plan"), is provided for general purposes only. The participant should refer to the Plan document for a more complete description of the Plan provisions. The Plan was established on September 1, 1987. The Plan provides a vehicle for participating Company employees to increase savings. The Plan was structured to comply with the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). Participation ------------- All employees of The Pep Boys - Manny, Moe & Jack and subsidiaries (the "Company") who have attained both the age of 21 and completed one year of service as defined by the Plan, other than those employees whose terms and conditions of employment are determined by a collective bargaining agreement unless such collective bargaining agreement provides to the contrary, may join the Plan any time on or after the start of the quarter, which immediately follows the employee's anniversary date. These quarter dates are January 1, April 1, July 1, or October 1. 7 Funding ------- Contributions to the Plan are made by participants and the Company. Participant's contributions, made through salary reduction, may be any whole percentage from 1% to 15% of their compensation as defined by the Plan. The Company contributes the lesser of 50% of the first 6% of the participant's pre-tax contributions or a maximum 3% of the participant's compensation. Participant contributions to the Plan, up to $11,000 and $10,500 during 2002 and 2001 respectively, are not subject to income tax until their withdrawal from the Plan. Additionally, participants are not subject to tax on the Company's contributions to the Plan, appreciation in Plan assets or income earned thereon until withdrawn from the Plan. Through August 30, 2002, company contributions were invested in the Pep Boys Stock Fund. Effective September 1, 2002, company contributions are invested in same fund(s) and in the same proportion chosen by the participant for their contributions. Through August 30, 2002, participants age 55 or over had the option to transfer all of the Company's contributions into any of the other funds. Also effective September 1, 2002, any participant has the ability to transfer all or a portion of the balance from the Pep Boys Stock Fund into one or more of the other investment funds. Vesting ------- The Plan provides that the participant's contributions are fully vested when made. The Company's contribution for a particular year becomes vested if the participant is actively employed on December 31 of that year or if the participant's employment terminated due to death, disability or retirement prior to December 31. Loan Provisions --------------- Participants may borrow 50% of their account balance subject to a minimum of $500 and a maximum of $50,000. The maximum duration of a loan is five years unless the loan is used to purchase a primary residence. In such a case, the loan term is permitted for up to a 30 year duration (effective October 1, 1998). The interest rate is commensurate with current fixed rates charged by institutions in the business of lending money for similar types of loans. 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. In the event of termination of the Plan, the interest of the participants or their beneficiaries will remain fully vested and not be subject to forfeiture in whole or in part and distributions shall be made to them in cash and/or stock as applicable. Income Tax Status ----------------- The Internal Revenue Service has issued a determination letter (April 30, 2002) indicating that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code (the "Code"). Accordingly, the Plan's related trust is exempt from federal taxation under Section 501(a) of the Code. The Plan Committee believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 8 Administration -------------- All costs associated with administering the Plan are borne by the Company, except the loan administration fees. The Plan is administered by a Plan Committee of three employees of the Company. At December 31, 2002, the members of the Plan Committee and their positions with the Company were: Mark L. Page Senior Vice President - Store Operations Frederick A. Stampone Senior Vice President - Chief Administrative Officer & Secretary Bernard K. McElroy Vice President - Chief Accounting Officer & Treasurer At December 31, 2002, the Plan trustee was: American Express Trust Company Under the provisions of ERISA, all of the above are "parties-in-interest." 3. INVESTMENT PROGRAMS ------------------- Participant contributions - Each participant, via the Internet or through an interactive voice response system, may direct that his/her contributions be invested in one or more of the following investment programs in increments of 1%. The prospectuses for these investment programs describe the funds as follows: AET STABLE CAPITAL FUND II -------------------------- The American Express Trust Stable Capital Fund II is designed to provide the lowest risk of all seven investment funds. This fund's goal is to preserve principal and income while maximizing current income. To meet this goal, the fund invests primarily in stable value contracts, as well as short-term investments and the American Express Trust Stable Capital I (a stable value pooled fund). AET EQUITY INDEX FUND II ------------------------ The American Express Trust Equity Index Fund II seeks to achieve a rate of return as close as possible to the return of the Standard & Poor's 500 Stock Index (S&P 500). To mirror this return, the fund invests primarily in some or all of the securities that make up the S&P 500. Because the S&P 500 contains many large, well-established companies, representing most major industries, this type of fund is less volatile than a growth fund like the AXP Small Company Index Fund or Templeton Foreign Fund. PEP BOYS STOCK FUND ------------------- The Pep Boys Stock Fund is invested primarily in The Pep Boys-Manny, Moe & Jack common stock and a small amount of short-term investments. This fund gives the participant the opportunity to acquire an ownership interest in the Company. The value of the amount invested in this fund will depend on the price of the stock at any given time and will tend to be more volatile. At December 31, 2002 and 2001, the Pep Boys Stock Fund held 3,703,159 shares ($11.60 per share) and 3,856,000 shares ($17.15 per share), respectively, of The Pep Boys - Manny, Moe & Jack common stock. 9 INVESCO TOTAL RETURN FUND (Investor Class) ------------------------------------------ The Invesco Total Return Fund seeks to provide long-term growth of capital, as well as current income. To meet this objective, the fund invests in common stocks of companies generally listed on major exchanges. Although the fund manager looks for stocks that perform well over a variety of market cycles, the value of the contributions to the plan may go up or down as stock market values change. AXP BOND FUND (Class Y) ------------------------ The AXP Bond Fund invests in a diversified portfolio of high-quality corporate bonds. To increase its return, the fund may also invest in lower-quality bonds and foreign bonds. The primary goal of this fund is to earn a high level of interest income; a secondary consideration is long-term bond appreciation. This fund offers low to moderate risk and moderate returns. AXP SMALL COMPANY INDEX FUND (Class Y) -------------------------------------- The AXP Small Company Index Fund attempts to mirror the return of the Standard & Poor's Small Capitalization Stock Index (S&P SmallCap 600). To achieve this, the fund invests primarily in some or all of the securities that make up the S&P 600. Because this fund invests in stocks of small companies, it is generally one of the most volatile of the Plan's funds. At the same time, the potential for growth over the long term is one of the highest. TEMPLETON FOREIGN FUND (Class A) -------------------------------- The Templeton Foreign Fund seeks long-term capital growth. To achieve this goal, the fund invests primarily in stocks and debt obligations of companies and governments outside the United States. Because this fund invests in foreign companies, it is one of the most volatile of the Plan's funds. However, it should normally have higher returns over longer periods of time. THE LOAN FUND ------------- The Loan Fund is the cumulative balance of all participant loans outstanding. This fund is not a fund available to participants for investing purposes, but instead is a result of a participant utilizing the loan provision previously defined in an earlier section. The interest rate is commensurate with current fixed rates charged by institutions in the business of lending money for similar types of loans. 10 THE PEP BOYS SAVINGS PLAN - ------------------------- SCHEDULE H ITEM 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------------------------------------
CURRENT IDENTITY DESCRIPTION COST VALUE - ---------------------------------------------------------------------------------------------------------------------- AET Stable Capital Fund II* Mutual Fund, $28,106,245 $30,698,622 1,862,986 shares AET Equity Index Fund II* Mutual Fund, 21,240,139 15,886,695 645,084 shares PEP BOYS STOCK FUND The Pep Boys - Manny, Moe & Jack Common Stock* 3,703,159 shares 36,634,198 42,956,644 AET Money Market I* 495,367 shares 495,367 495,367 Invesco Total Return Fund (Investor Class) Mutual Fund, 6,738,164 5,512,752 266,957 shares AXP Bond Fund (Class Y)* Mutual Fund, 2,186,493 2,211,313 464,811 shares AXP Small Company Index Fund (Class Y)* Mutual Fund, 2,847,025 2,451,674 462,371 shares Templeton Foreign Fund (Class A) Mutual Fund, 1,256,485 1,119,542 137,049 shares LOAN FUND 5.25%-10.50% 2003-2031 10,578,443 10,578,443 ------------ ------------ $110,082,559 $111,911,052 ============ ============ * Indicates party-in-interest to the plan.
11 THE PEP BOYS SAVINGS PLAN - ------------------------- SCHEDULE H ITEM 4j - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2002 - ---------------------------------------------- Aggregate of transactions involving the same security exceeding 5% of net assets at January 1, 2002
Number of Aggregate Identity of Party Transactions Description Change - ------------------------------- ------------ --------------------- ----------- Pep Boys Stock Fund The Pep Boys - Manny, Moe & Jack Common Stock 88 Common Stock $6,889,361 AET Money Market I 329 Money Market Fund 24,302,366
Individual transactions in 2002 involving the same security exceeding 5% of net assets at January 1, 2002:
Identity of Party Description Sale Purchase - ------------------------------- --------------------- ----------- ------------ NO TRANSACTIONS QUALIFIED FOR THIS SECTION
12 SIGNATURES - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the Plan) have duly caused this Annual Report to be signed by the undersigned hereunto duly authorized. THE PEP BOYS SAVINGS PLAN ------------------------- DATE: June 27, 2003 BY: /s/Frederick A. Stampone ------------- ---------------------------- Frederick A. Stampone Member of the Administrative Committee 13 EXHIBIT INDEX - ------------- Exhibit No. Item ----------- ---- 23 Consent of Deloitte & Touche LLP 99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 EX-23 4 exh23us.txt Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statements No. 33-31765, No. 333-51585 and No. 333-100224 of The Pep Boys - Manny, Moe, & Jack on Form S-8 of our report dated June 2, 2003, appearing in this Annual Report on Form 11-K of The Pep Boys Savings Plan for the year ended December 31, 2002. /s/ Deloitte & Touche LLP Philadelphia, Pennsylvania June 26, 2003 EX-99 5 exh99111k.txt Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of The Pep Boys Savings Plan (the "Plan") on Form 11-K for the fiscal year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Frederick A. Stampone, who performs the functions equivalent to a chief executive officer of the Plan through his participation on the Administrative Committee, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. A signed original of this written statement required by Section 906 has been provided to the Plan and will be retained by the Plan and furnished to the Securities and Exchange Commission or its staff upon request. Date: June 27, 2003 /s/ Frederick A. Stampone ------------- -------------------------- Member of the Administrative Committee EX-99 6 exh99211k.txt Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of The Pep Boys Savings Plan (the "Plan") on Form 11-K for the fiscal year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard K. McElroy, who performs the functions equivalent to a chief financial officer of the Plan through his participation on the Administrative Committee, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. A signed original of this written statement required by Section 906 has been provided to the Plan and will be retained by the Plan and furnished to the Securities and Exchange Commission or its staff upon request. Date: June 27, 2003 /s/ Bernard K. McElroy ------------- ----------------------- Member of the Administrative Committee -----END PRIVACY-ENHANCED MESSAGE-----