SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended April 28, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________to____________
Commission file number 33-31502
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
LA-Z-BOY CHAIR COMPANY MATCHED
RETIREMENT SAVINGS PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
LA-Z-BOY INCORPORATED
1284 North Telegraph Road
Monroe, Michigan 48162
Telephone (734) 242-1444
This report contains 18 pages
REQUIRED INFORMATION
(a) Financial Statements.
1. Report of Independent Accountants
2. Statements of Net Assets Available for Benefits-as of December 31, 2001
and December 31, 2000
3. Statements of Changes in Net Assets Available for Benefits-for the year
ended December 31, 2001
4. Notes to Financial Statements
(b) Exhibit
Consent of PricewaterhouseCoopers LLP
SIGNATURE
---------
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.
LA-Z-BOY INCORPORATED MATCHED
RETIREMENT SAVINGS PLAN
By La-Z-Boy Incorporated
Plan Administrator
Date: June 28, 2002 /s/Mark A. Stegeman
-------------------------------
Mark A. Stegeman
Treasurer
La-Z-Boy Incorporated
Matched Retirement Savings Plan
Financial Statements and
Supplemental Information
December 31, 2001 and 2000
La-Z-Boy Incorporated
Matched Retirement Savings Plan
Index to Financial Statements and Supplemental Information
- --------------------------------------------------------------------------------
Page(s)
Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits at
December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 2001 3
Notes to Financial Statements 4-10
Supplemental Information:*
Schedule H, line 4i - Schedule of Assets (Held at
End of Year) Schedule I
Schedule H, line 4j - Schedule of Reportable Transactions
for the Year Ended December 31, 2001 Schedule II
* Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
Report of Independent Accountants
To the Participants and Administrator of
La-Z-Boy Incorporated
Matched Retirement Savings Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of La-Z-Boy Incorporated Matched Retirement Savings Plan (the "Plan") at
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. 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 of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Schedule H,
line 4i - Assets (Held at End of Year) and Schedule H, line 4j - Reportable
Transactions for the Year Ended December 31, 2001 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. These supplemental schedules have been
subjected to the auditing procedures applied in the audits 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.
/s/PricewaterhouseCoopers LLP
Toledo, Ohio
June 27, 2002
La-Z-Boy Incorporated 2
Matched Retirement Savings Plan
Statement of Net Assets Available for Benefits
- --------------------------------------------------------------------------------
December 31,
2001 2000
Assets:
Investments $109,512,952 $91,837,206
Receivables:
Interest/dividends receivable 771 2,501
------------ -----------
Net assets available for benefits $109,513,723 $91,839,707
============ ===========
The accompanying notes are an integral part of these financial statements.
La-Z-Boy Incorporated 3
Matched Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
- --------------------------------------------------------------------------------
Year Ended
December 31,
2001
Additions:
Additions to net assets attributed to:
Investment income
Interest and dividend income $3,536,760
Net appreciation in fair value of investments 7,710,134
------------
11,246,894
------------
Contributions:
Employee deferrals 9,481,328
Employer match 3,705,163
Rollovers 190,755
------------
13,377,246
------------
Total additions 24,624,140
------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 6,803,882
Administrative expenses 146,242
------------
Total deductions 6,950,124
------------
Net increase 17,674,016
Net assets available for benefits:
Beginning of year 91,839,707
------------
End of year $109,513,723
============
The accompanying notes are an integral part of these financial statements.
La-Z-Boy Incorporated 4
Matched Retirement Savings Plan
Notes to Financial Statements
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1. Description of the Plan
The following description of the La-Z-Boy Incorporated Matched Retirement
Savings Plan (the Plan) is provided for general information purposes
only. Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
General
La-Z-Boy Incorporated (the Company) sponsors the Plan, which is a defined
contribution plan covering eligible participants. The Plan is
administered by a Central Board of Administration (the Board) appointed
by the Board of Directors of the Company. The Company has appointed Key
Trust Company of Ohio, N.A. (Trustee), as the Plan's trustee. The Plan is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
In June 2002, it was announced that the Trustee would discontinue its
employee benefit plan services. The Company intends to transfer the
assets of the Plan to a new trustee in plan year 2002 or 2003.
Participation
Employees who have completed 1,000 hours of service in a six month period
and have attained age eighteen are eligible to become participants as of
January 1 or July 1 following their qualification, with the exception of
employees of the Company's ineligible subsidiaries. Prior to December 31,
2000, employees must have attained the age of twenty-one to be eligible
to participate in the Plan.
Vesting
Participants are always fully vested in their own deferral accounts and
become fully vested in the Company's matching contribution accounts after
five years of service.
Contributions
Contributions to the Plan consist of the following:
a. prior to December 31, 2000, authorized participant compensation
deferral contributions in an amount up to fifteen percent of
eligible compensation for participants who do not actively
participate in the La-Z-Boy Incorporated Profit Sharing Plan
(Profit Sharing Plan), another Company sponsored benefit plan, or
up to seven percent for those participants who do participate in
the Profit Sharing Plan; or the adjusted equivalent of $10,500,
whichever is less.
b. subsequent to December 31, 2000, authorized participant
compensation deferral contributions in an amount up to fifteen
percent of eligible compensation for participants who are
classified as factory hourly or employees of the Sam Moore
division, or up to seven percent for those participants classified
as executive, salaried, office hourly or factory supervisor; or
the adjusted equivalent of $10,500, whichever is less.
La-Z-Boy Incorporated 5
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
1. Description of the Plan (continued)
Contributions (continued)
c. the Plan provides for employer matching contributions of 50% of
the first 2% of participant deferrals, with the exception of
employees of the Sam Moore division, who are not eligible for an
employer matching contribution; supplemental employer matching
contributions based upon a number of factors including age, years
of service, employee classification (factory hourly, factory
supervisor, executive, salaried, office hourly) and division of
the Company are provided for in the Plan. All employer
contributions are made to the Company Stock Fund, which consists
of La-Z-Boy Incorporated common stock and money market
investments, and remain in that fund until retirement or
withdrawal from the Plan.
d. any forfeiture restoration amount; and
e. amounts that participants have the ability, under certain
circumstances, to contribute that have been received as
distributions from pension benefit plans or "rollovers" from
selected eligible individual retirement arrangements.
However, total individual participant contributions shall not exceed the
lesser of:
a. prior to July 1, 2001, fifteen percent of the eligible
compensation of the participant during the plan year; subsequent
to July 1, 2001, ninety-nine percent of the eligible compensation
of the participant during the plan year; or
b. the aggregate individual participant limitations set forth under
Section 415 of the Internal Revenue Code (IRC).
The forfeited, nonvested portion of a terminated participant's account
may be used to reduce the Company's matching contribution. During 2001
and 2000, $169,717 and $81,866, respectively, of employer matching
contributions were forfeited by terminated employees before those amounts
became vested. During 2001 and 2000, forfeited nonvested balances in the
amounts of $197,000 and $236,886, respectively, were used to offset the
Company's matching contributions.
La-Z-Boy Incorporated 6
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
1. Description of the Plan (continued)
Plan Benefits
Participants having five years of service under the Plan are entitled to
the full value of their accounts beginning at normal retirement age
(sixty-five). Participants with at least ten years of participation are
eligible for early retirement at age fifty-five. The value of a retiree's
account will be paid as soon as administratively feasible after the date
on which he or she retires.
If a participant's total vested account balance is $5,000 or less, the
benefit payment will be made in the form of a lump sum cash payment. The
participant also may elect to receive the entire portion of their account
that is invested in the Company Stock Fund in cash or in La-Z-Boy
Incorporated common stock. The remainder of the account balance is paid
in the form of a lump sum cash payment.
Death Benefits
Upon the death of a participant, the value of his or her account becomes
fully vested. As soon as administratively feasible thereafter, the value
of the participant's account will be paid to any beneficiary designated
by the participant or as stipulated in the Plan.
Disability Benefits
Participants who become totally and permanently disabled are eligible for
disability retirement benefits. The participant shall have the value of
his or her account fully vested and payable in the same manner as normal
retirement benefits.
Hardship or Financial Need
Upon application by the participant, the Board may direct distribution of
such participant's funds to alleviate extreme hardship. In no event shall
the amount exceed eighty percent of the participant's total compensation
deferral contribution balance. The distribution shall be subject to
personal income and excise taxes.
A participant may also apply to borrow an amount not less than $1,000 or
greater than the lesser of $50,000 or fifty percent of the participant's
vested account balance in the Plan. Terms of the loans are limited to
five years, unless used for the purchase of a principal residence.
Interest rates on loans granted bear commercially reasonable rates of
interest.
La-Z-Boy Incorporated 7
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies
Basis of Accounting
The accounts of the Plan are maintained on the accrual basis of
accounting in accordance with accounting principles generally accepted in
the United States of America.
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 and assumptions that affect the reported
amounts of net assets available for benefits at the date of the financial
statements and the reported changes in net assets available for benefits
during the reporting period. Actual results could differ from those
estimates.
Expenses of the Plan
Investment advisory fees are paid by the Plan. All other Plan expenses,
including administrative and professional fees, are paid by the Company.
Investments
Investments in securities traded on a national securities exchange are
valued based on published quotations on the last business day of the plan
year. Securities not so traded are valued at the latest available and
appropriate bid price on that date. Mutual fund investments are valued
based on the market value of the underlying investments as of the last
business day of the plan year. Participant loans receivable are valued at
cost which approximates fair value.
Net Appreciation and Depreciation of Investments
Realized gains and losses are calculated by subtracting the proceeds from
the sale of investments during the plan year from the fair value of the
investments at the beginning of the plan year, or at the time of purchase
if acquired during the plan year. Unrealized appreciation and
depreciation of investments is calculated by taking the fair value of the
investments at the end of the plan year less the fair value of the
investments at the beginning of the plan year, or at the time of purchase
if acquired during the plan year.
Allocation of Assets
Participant compensation deferral contributions are allocated to
individual participant accounts each pay period. Company matching
contributions are allocated to individual participant accounts monthly.
Changes in the fair market value of investments and gains and losses on
the disposition of investments, and investment income are allocated to
individual participant accounts on a daily basis in proportion to their
account balance.
La-Z-Boy Incorporated 8
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
3. Investment Options
The Plan provides participants with several investment options including
the Company Stock Fund, which consists of La-Z-Boy Incorporated common
stock and the EB Money Market Fund, as well as various mutual funds
selected by the Board.
Allocations to the funds are made in five percent increments.
Participants may change the allocation of contributions among the
investment options and transfer amounts between investment options on a
daily basis. The Company's matching contribution is made in the Company's
common stock.
4. Investments
The following presents investments that represent five percent or more of
the Plan's net assets:
December 31,
2001 2000
La-Z-Boy Incorporated common stock,
2,240,538 and 2,096,212 shares,
respectively $48,850,244* $32,904,806*
Victory Stock Index Fund, 712,326
and 633,626 shares, respectively 12,116,660 13,546,931
Victory Balanced Fund, 927,803 and
817,741 shares, respectively 11,124,359 11,064,040
Victory DCS Reserve Fund, 75,802 and
64,383 shares, respectively 14,213,544 11,243,481
Franklin Small Mid Cap Growth Fund,
259,343 and 247,409 shares,
respectively 8,083,722 9,730,585
Participant loans 9,958,112 9,252,931
* Includes both participant-directed and nonparticipant-directed investments
During 2001, the Plan's investments (including net appreciation and
depreciation on investments bought and sold, as well as held during the
year) appreciated by $7,710,134 as follows:
Mutual funds $(5,608,311)
Company's common stock 13,318,445
------------
$7,710,134
============
La-Z-Boy Incorporated 9
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
5. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to Company Stock Fund, which contains both
participant-directed and nonparticipant-directed investments, is as
follows:
December 31,
2001 2000
Net assets:
Company Stock Fund $49,349,912 $33,340,108
=========== ===========
Year Ended
December 31,
2001
Changes in net assets:
Contributions $5,965,390
Dividends 791,582
Net appreciation 13,318,445
Benefits paid to participants (2,705,959)
Transfers to participant-directed
investments (1,238,732)
Administrative expenses (120,922)
-----------
$16,009,804
===========
6. Party-in-interest
Investments in the Company Stock Fund consist of 2,240,538 and 2,096,212
shares of La-Z-Boy Incorporated common stock at December 31, 2001 and
2000, respectively. Shares for this fund are purchased on the open market
by the Trustee or are issued by the Company at fair market value. At
December 31, 2001 and 2000, the Plan held certain investments in mutual
funds managed by the Trustee. Purchases and sales of these mutual funds
are open market transactions at fair value. Consequently, such
transactions are permitted under the provisions of the Plan and are
exempt from prohibition of party-in-interest transactions under the IRC
and ERISA.
7. Tax Status of the Plan
The Internal Revenue Service has determined and informed the Company by a
letter dated July 6, 1995, that the Plan and related trust are designed
in accordance with applicable sections of the IRC. Although the Plan has
been amended since receiving the determination letter, the Plan
administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with applicable
requirements of the IRC. The Plan administrator has requested a new
determination letter from the Internal Revenue Service.
La-Z-Boy Incorporated 10
Matched Retirement Savings Plan
Notes to Financial Statements
- -------------------------------------------------------------------------------
8. 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, all amounts previously allocated to the participants
shall be fully vested subject only to any charge or lien, which may then
or thereafter exist and be due to the Trustee.
9. Risks and Uncertainties
The Plan's invested assets ultimately consist of only mutual funds and
other investment securities. 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 statement of net assets available for benefits and
statement of changes in net assets available for benefits.
La-Z-Boy Incorporated common stock, included in the Company Stock Fund,
accounts for approximately 45% and 36% of the net assets available for
benefits of the Plan at December 31, 2001 and 2000, respectively.
Fluctuations in the price of La-Z-Boy Incorporated common stock would
materially affect the participants' account balances and the net assets
available for benefits of the Plan as a whole.
10. Plan Amendment
Effective January 1, 2001, the Plan, formerly known as the La-Z-Boy Chair
Company Matched Retirement Savings Plan, was amended and restated to
comply with several recent legislative actions and to change the
eligibility and contribution provisions as stated in Note 1. After
restatement, the plan name was changed to the La-Z-Boy Incorporated
Matched Retirement Savings Plan.
La-Z-Boy Incorporated Schedule I
Matched Retirement Savings Plan
Plan Number 015
EIN 38-0751137
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
- --------------------------------------------------------------------------------
Identity of Current
Issuer or Borrower Description of Investment Cost** Value
*La-Z-Boy Incorporated Common Stock $27,096,622 $48,850,244
*Key Trust Company of
Ohio, N.A. EB Money Market Fund 499,668 499,668
*Key Trust Company of
Ohio, N.A. Victory Stock Index Fund 12,116,660
*Key Trust Company of
Ohio, N.A. Victory Balanced Fund 11,124,359
*Key Trust Company of
Ohio, N.A. Victory DCS Reserve Fund 14,213,544
*Key Trust Company of
Ohio, N.A. Franklin Small Mid Cap Growth Fund 8,083,722
*Key Trust Company of
Ohio, N.A. Victory Financial Reserve Fund 2,461,489
*Key Trust Company of
Ohio, N.A. Janus Worldwide Fund 2,205,925
*Participant Loans Interest rates ranging
from 5.75% through 10.5 %
Maturity dates ranging
from 2002 through 2016 9,958,112
------------
$109,513,723
============
* Key Trust Company of Ohio, N.A., La-Z-Boy Incorporated and participants are
known parties-in-interest of the Plan.
**Cost information for participant-directed investments has been omitted, as
permitted by Section 2520.103-10 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under ERISA.
La-Z-Boy Incorporated Schedule II
Matched Retirement Savings Plan
Plan Number 015
EIN 38-0751137
Schedule H, line 4j - Schedule of Reportable Transactions*
For the Year Ended December 31, 2001
- -----------------------------------------------------------------------------------------------------------------------------------
Identity
of party Number of Purchase Selling Net Gain
Involved Description of Asset Transactions Price Price or (Loss)
Key Trust Company of Ohio, N.A. EB Money Market Fund 97 $6,172,572
Key Trust Company of Ohio, N.A. EB Money Market Fund 151 $6,108,206 -
* Transactions or series of transactions, involving nonparticipant-directed
investments, in excess of five percent of the current value of the Plan's assets
at December 31, 2000, as defined by section 2520.103-6 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-03097) of La-Z-Boy Incorporated of our report
dated June 27, 2002 relating to the financial statements of the La-Z-Boy
Incorporated Matched Retirement Saving Plan, which appears in this Form 11-K.
/s/PricewaterhouseCoopers LLP
Toledo, Ohio
June 27, 2002