-----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, Hh6hh1ilV4379/+Te2+yGyc+Xq7oiim6ejNFK4anUQD8xo4lbrDXlCSbzK4Ujweb OYl5TcqLbArZBFgaG2GQqg== 0000950135-05-003543.txt : 20050628 0000950135-05-003543.hdr.sgml : 20050628 20050628141926 ACCESSION NUMBER: 0000950135-05-003543 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050628 DATE AS OF CHANGE: 20050628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLMAN INC CENTRAL INDEX KEY: 0000812708 STANDARD INDUSTRIAL CLASSIFICATION: PLASTIC MAIL, SYNTH RESIN/RUBBER, CELLULOS (NO GLASS) [2820] IRS NUMBER: 041671740 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10033 FILM NUMBER: 05919917 BUSINESS ADDRESS: STREET 1: 595 SHREWSBURY AVENUE CITY: SHREWSBURY STATE: NJ ZIP: 07702 BUSINESS PHONE: (732)212-3300 MAIL ADDRESS: STREET 1: P.O. BOX 31331 CITY: CHARLOTTE STATE: NC ZIP: 28231 11-K 1 b55319wne11vk.htm WELLMAN , INC. Wellman, Inc.
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

     
(Mark One)
    
 
    
þ
  ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
    
For the fiscal year ended December 31, 2004
 
    
 
  OR
 
    
o
  TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

     For the transition period from                    to

Commission file number 1-10033

  A.   Full title of the plan: Wellman, Inc. Retirement Plan
 
  B.   Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Wellman, Inc.

1041 521 Corporate Center Drive
Fort Mill, South Carolina 29715
 
 

 

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Audited Financial Statements and Supplemental Schedule

Wellman, Inc. Retirement Plan
Years Ended December 31, 2004 and 2003

 

Wellman, Inc. Retirement Plan

Audited Financial Statements
and Supplemental Schedule

Years Ended December 31, 2004 and 2003

Contents

         
    1  
 
        
Audited Financial Statements
        
 
        
    2  
    3  
    4  
 
        
Supplemental Schedule
        
 
        
    10  
 Ex-23 Consent of Independent Registered Public Accounting Firm

 

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Report of Independent Registered Public Accounting Firm

The Employee Benefits Committee
Wellman, Inc.

We have audited the accompanying statements of net assets available for benefits of Wellman, Inc. Retirement Plan as of December 31, 2004 and 2003, 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 Employee Benefits Committee. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits 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. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004, is presented for purposes of additional analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP                    

June 28, 2005

1

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Wellman, Inc. Retirement Plan

Statements of Net Assets Available for Benefits

                 
    December 31,  
    2004     2003  
     
Assets
                
Investments
   $ 141,214,062     $ 136,583,299  
Employer contributions receivable
     2,742,343       3,339,612  
Accrued income receivable
     197,582       170,582  
     
Net assets available for benefits
   $ 144,153,987     $ 140,093,493  
     

See accompanying notes.

2

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Wellman, Inc. Retirement Plan

Statements of Changes in Net Assets Available for Benefits

                 
    Years Ended December 31,  
    2004     2003  
     
Additions
                
Participant contributions
   $ 2,843,692     $ 3,154,987  
Employer contributions
     2,742,343       3,965,474  
 
                
Net investment income:
                
Interest and dividends
     5,299,310       3,849,120  
Net appreciation in fair value of investments
     7,183,171       14,892,161  
     
Net investment income
     12,482,481       18,741,281  
     
Total additions
     18,068,516       25,861,742  
 
                
Deductions
                
Distributions to participants
     13,996,334       12,880,574  
Administrative expenses
     11,688       12,295  
     
Total deductions
     14,008,022       12,892,869  
     
Increase in net assets available for benefits
     4,060,494       12,968,873  
Net assets available for benefits at beginning of year
     140,093,493       127,124,620  
     
Net assets available for benefits at end of year
   $ 144,153,987     $ 140,093,493  
     

See accompanying notes.

3

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Wellman, Inc. Retirement Plan

Notes to Financial Statements

December 31, 2004

1. Description of the Plan

The following description of the Wellman, Inc. Retirement Plan (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan covering all domestic non-bargaining employees of Wellman, Inc. and its subsidiaries (the “Company”) who are age twenty-one or older and who have at least three months of service to be eligible to make employee contributions, and who have at least one year of service to be eligible to receive Company contributions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).

Contributions

The Plan includes 401(k), money purchase plan (the “Pension”) and discretionary performance provisions. The Pension component is totally funded by Company contributions. For the 2004 and 2003 plan years, the Company’s Pension contribution was 6% of each participant’s eligible compensation plus an additional 5% of the portion of such compensation in excess of the Social Security taxable wage base but less than the statutory defined contribution plan compensation limits. The Plan has met the minimum funding standards of ERISA and the permitted disparity provisions of the Internal Revenue Code (the “Code”).

The Company also sponsors an Employee Stock Ownership Plan (the “ESOP”) to which eligible employees may contribute up to 2% of eligible compensation. For the 2004 and 2003 plan years, Participants could contribute to their 401(k) accounts (as maintained under both the Plan and the ESOP) 1% to 17% and 1% to 12%, respectively, on a before-tax or after-tax basis of their compensation through payroll deductions up to the maximum amount per calendar year defined by the Code.

In the event a participant elected to contribute to the Plan on a before-tax basis, the Company contributed $.50 for each $1.00 of the participant’s contribution on the first 4% and $1.00 for each $1.00 of the participant’s contribution up to the next 1%, of the participant’s eligible compensation by pay period through September 1, 2003. On September 1, 2003 matching contributions to the Plan were suspended. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions.

4

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Wellman, Inc. Retirement Plan

Notes to Financial Statements (continued)

1. Description of the Plan (continued)

The performance plan provision of the Plan is funded by Company contributions at the discretion of the Company. The Company may contribute that amount for a given plan year as designated by the Company’s Board of Directors. No performance contribution was made in 2004 or 2003.

The annual additions to a participant’s accounts under the Plan and the ESOP are limited by the Code to the lesser of $41,000 or 100% of the participant’s gross compensation. The Plan and the ESOP further limit annual additions.

Vesting

A participant’s Pension account is 100% vested upon completion of five years of vesting service with the Company. A participant’s 401(k) account attributable to before-tax and after-tax contributions by the participant and matching contributions is immediately 100% vested. The portion of the participant’s 401(k) account, if any, attributable to the Company’s discretionary performance contributions is 100% vested after three years of service. A participant is also automatically 100% vested in all accounts under the Plan at age 65 or upon death or disability while employed by the Company.

Participant Accounts

Each participant’s account is credited with the Company’s contributions, the participant’s contributions, and Plan earnings based on the participant’s investment fund choices and the performance of those funds. Such earnings are net of any management fees charged to fund shareholders by the investment funds. Forfeited balances of terminated participants’ nonvested accounts may be used to reduce future Company contributions or to pay certain plan expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account. Forfeitures were $83,547 and $254,616 for the years ended December 31, 2004 and 2003, respectively.

Participant Loans

Effective January 1, 2002, the Plan was amended to allow participant loans. Participants may borrow from the Plan a minimum initial loan amount of $1,000 and a maximum loan amount equal to the lesser of 50% of their vested balance (excluding pension accounts) or $50,000. Loan terms range from one to five years. The loans are secured by the balance in the participant’s account and bear interest at a rate based upon National City Bank’s prime rate.

5

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Wellman, Inc. Retirement Plan

Notes to Financial Statements (continued)

1. Description of the Plan (continued)

Payment of Benefits

Upon retirement at or after age 65 or, if earlier, death, disability, or termination, the vested balance in the participant’s account is paid to the participant or the participant’s beneficiaries in the form of either a lump-sum distribution, substantially equal annual installments, or a nontransferable annuity contract.

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 Plan termination, participants will have a fully-vested nonforfeitable interest in their share of the trust fund.

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial statements have been prepared on the accrual basis of accounting.

Valuation of Investments and Income Recognition

Marketable securities are stated at fair value. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the plan year; investments traded in the over-the-counter market and listed securities for which no sale was reported on the date are valued at the average of the last reported bid and ask prices. The shares of registered investment companies are valued at quoted market prices which represent the net asset values of shares held by the Plan at year-end.

Investment contracts held by the Plan are recorded at their contract values, which approximate fair value, and represent contributions and reinvested income, less any withdrawals plus accrued interest because these investments have fully benefit-responsive features.

Purchases and sales of investments are reflected on the trade dates. Gains and losses on the sale of investments are based on the average cost of the investments. Income from investments is recorded as earned on an accrual basis. Dividends are recorded on the ex-dividend date.

6

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Wellman, Inc. Retirement Plan

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Certain amounts in the 2003 financial statements have been reclassified to conform to the 2004 presentation.

Administrative Expenses

The Company has paid all trustee and record keeping administrative expenses of the Plan; however, the plan was amended in 2004 so that forfeitures can be used to pay certain plan expenses; however, certain brokerage commissions and fees associated with participant loans and in-service withdrawals are paid by the participant. Also, the Plan’s investment funds charge management fees to all shareholders of the respective funds, including those Plan participants who are invested in such funds through the Plan.

3. Investments

During 2004 and 2003, the Plan’s investments (including investments bought, sold, and held during the year) appreciated in fair value by $7,183,171 and $14,892,161, respectively, as follows:

                 
    Years Ended December 31  
    2004     2003  
     
Investments at fair value as determined by quoted market price:
                
Shares of registered investment companies
   $ 6,799,832     $ 17,057,645  
Common Stock
     383,339       (2,165,484 )
     
 
   $ 7,183,171     $ 14,892,161  
     

7

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Wellman, Inc. Retirement Plan

Notes to Financial Statements (continued)

3. Investments (continued)

The fair value of individual investments that represent 5% or more of the Plan’s net assets is as follows:

                 
    December 31  
    2004     2003  
     
Vanguard Institutional Index Fund
   $ 26,487,538     $ 26,933,320  
ABN AMRO Income Plus Fund (formerly LaSalle Income Plus Fund)
     32,934,972       24,778,495  
Wellman, Inc. Common Stock
     7,460,227       7,767,461  
Growth Fund of America
     23,997,344       24,272,791  
MFS Total Return Fund
     18,084,060       17,769,427  

Participants that invest in the ABN AMRO Income Plus Fund are making an investment that has its yield determined based on the yield of this fund and the yield of the following investments contracts held by the trust with a value of $7,726,128 and $15,570,014 as of December 31, 2004 and 2003, respectively. Therefore the aggregate value of the combined investment was $40,661,100 and $40,348,509 at December 31, 2004 and 2003, respectively.

                         
            December 31  
          2004     2003  
             
Allstate Insurance Co.
   Matured 08/16/2004     —       7.17 %
John Hancock Ins. Co.
   Matured 10/15/2004     —       7.29 %
John Hancock Ins. Co.
   Matures 03/06/2006     5.77 %     5.77 %
Mass Mutual Life Ins. Co.
   Matures 07/14/2006     5.67 %     5.67 %
Monumental Life
   Matured 12/20/2004     —       7.25 %
Pacific Life Ins. Co.
   Matures 10/17/2005     5.51 %     5.51 %
Principal Life Ins. Co.
   Matures 04/15/2006     5.62 %     5.62 %
Travelers Group
   Matured 01/15/2004     —       5.64 %

8

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Wellman, Inc. Retirement Plan

Notes to Financial Statements (continued)

4. Transactions with Parties-in-Interest

Certain investments held by the Plan represent party-in-interest transactions with the trustee. National City Bank is trustee of the Plan and two mutual funds affiliated with National City Bank are investment choices in the Plan. These are the Armada Small Cap Value I Fund and the Armada Government Mortgage Fund I. The Plan offers Wellman, Inc. common stock as an investment option for participants. All transactions of Wellman, Inc. common stock bought or sold pursuant to Plan are effected on the open market by the trustee.

5. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated September 3, 2002 stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Employee Benefits Committee believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended, is qualified and the related trust is tax exempt.

9

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Supplemental Schedule

 

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Wellman, Inc. Retirement Plan
EIN: 04-1671740
Plan Number: 002

Schedule H Line 4(i)

Schedule of Assets (Held at End of Year)

December 31, 2004

                         
            (c)        
        (b)   Description of Investment Including     (e)  
        Identity of Issue, Borrower,   Maturity Date, Rate of Interest,     Current  
(a)     Lessor or Similar Party   Collateral, Par or Maturity Value     Value  
 
       
Shares of Registered Investment Companies:
                
       
Vanguard Institutional Index Fund
   239,252 units   $ 26,487,538  
       
PIMCO Total Return Fund
   289,646 units     3,090,518  
       
MFS Total Return Fund
   1,130,254 units     18,084,060  
       
AIM Basic Value Fund
   87,638 units     2,841,217  
       
Growth Fund of America
   876,455 units     23,997,344  
       
Armada Small Cap Value Fund
   234,383 units     5,177,510  
       
Armada U.S. Gov’t Income Fund
   104,784 units     980,779  
       
ING International Value Fund
   262,988 units     4,641,735  
       
Wells Fargo Advisor Small Cap Value Fund
   207,528 units     6,101,335  
       
ABN AMRO Income Plus Fund
   32,934,972 units     32,934,972  
       
 
              
       
 
             124,337,008  
       
 
                
       
*Wellman, Inc.
   697,745 shares of Common Stock     7,460,227  
       
 
                
       
*Loans to Participants
   Interest rates from 6.00% to 7.00%     1,690,699  
       
 
                
       
Guaranteed Investment Contracts:
                
       
John Hancock Ins. Co.
   Matures 03/06/2006; 5.77% per annum     1,571,262  
       
Mass Mutual Life Ins. Co.
   Matures 07/14/2006; 5.67% per annum     2,052,204  
       
Pacific Life Ins. Co.
   Matures 10/17/2005; 5.51% per annum     2,022,916  
       
Principal Life Ins. Co.
   Matures 04/15/2006; 5.62% per annum     2,079,746  
       
 
              
       
 
             7,726,128  
       
 
              
       
Total
           $ 141,214,062  
       
 
              

 
*Indicates party-in-interest to the Plan.

Note: Column (d) is not presented as all investments are participant directed.

10

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

         
 
      WELLMAN, INC. RETIREMENT PLAN
 
  By:   WELLMAN, INC. EMPLOYEE BENEFITS COMMITTEE
 
        
 
  By:   /s/ Keith R. Phillips
 
       
     
    Name: Keith R. Phillips
    Title: Member

Date: June 28, 2005

 

EX-23 2 b55319wnexv23.txt EX-23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EXHIBIT 23 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statements (Form S-8, No. 33-44877, No. 33-54075, and No. 333-38752) pertaining to the Wellman, Inc. Retirement Plan of our report dated June 28, 2005, with respect to the financial statements and supplemental schedule of the Wellman, Inc. Retirement Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2004. /s/ Ernst & Young LLP Charlotte, North Carolina June 28, 2005 -----END PRIVACY-ENHANCED MESSAGE-----