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 December 31, 1999
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
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 CHAIR COMPANY MATCHED
RETIREMENT SAVINGS PLAN
By La-Z-Boy Incorporated
Plan Administrator
Date: June 28, 2000 By /s/Gene M. Hardy
------------- ---------------------------
Gene M. Hardy
Chairman Central Board of
Administration
La-Z-Boy Chair Company
Matched Retirement Savings Plan
Financial Statements and
Supplemental Information
December 31, 1999 and 1998
La-Z-Boy Chair Company
Matched Retirement Savings Plan
Index to Financial Statements and Supplemental Information
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Page
Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits
at December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1999 3
Notes to Financial Statements 4-11
Supplemental Information:*
Schedule of Assets Held for Investment Purposes
at End of Year Schedule I
Schedule of Reportable Transactions Schedule II
* Other schedules required by Section 2520.103-10 of 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 Chair Company
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 Chair Company Matched Retirement Savings Plan (the Plan) at December
31, 1999 and 1998, and the changes in net assets available for benefits for the
year ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. 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 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 the opinion expressed above.
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 at End of Year and Reportable Transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the 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
June 28, 2000
La-Z-Boy Chair Company 2
Matched Retirement Savings Plan
Statement of Net Assets Available for Benefits
- -----------------------------------------------------------------------------
December 31,
1999 1998
Assets:
Investments $ 80,617,879 $ 70,224,503
Receivables:
Interest/dividends receivable 2,093 1,080
Participant loans receivable 8,203,833 6,535,884
---------------- ---------------
Total receivables 8,205,926 6,536,964
---------------- ---------------
Net assets available for benefits $ 88,823,805 $ 76,761,467
================ ===============
The accompanying notes are an integral part of these financial statements.
La-Z-Boy Chair Company 3
Matched Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
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Year Ended
December 31,
1999
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 4,479,365
Interest and dividends 2,875,798
-------------
7,355,163
Contributions:
Employer 10,658,797
Rollovers 474,245
-------------
11,133,042
Total additions 18,488,205
-------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 6,319,855
Administrative expenses 106,012
-------------
Total deductions 6,425,867
-------------
Net increase 12,062,338
Net assets available for benefits:
Beginning of year 76,761,467
-------------
End of year $ 88,823,805
=============
The accompanying notes are an integral part of these financial statements.
La-Z-Boy Chair Company
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 Chair Company 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).
Participation
Employees who have completed 1,000 hours of service in a six month period
and have attained age twenty-one 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.
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. compensation deferral contributions authorized by the participant
in an amount up to fifteen percent of eligible compensation for
participants who do not participate in the La-Z-Boy Chair Company
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;
b. an employer matching contribution equal to fifty percent of each
participant's compensation deferral contribution, to a maximum of
two percent of the participant's eligible compensation during the
plan year;
c. eligible Plan participants who do not participate in the Profit
Sharing Plan, are entitled to an additional contribution equal to
twenty-five percent of the participant's eligible compensation in
excess of two percent, but not to exceed three percent or four
percent (depending on eligibility);
1. Description of the Plan (continued)
Contributions (continued)
d. during 1998, the Plan was amended to allow employees, who do not
participate in the Profit Sharing Plan, whose sum of age and years
of service is greater than seventy-five, to receive an additional
amount of employer match from the Company;
e. any forfeiture restoration amount; and
f. 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 individual retirement arrangements.
However, total individual participant contributions shall not exceed the
lesser of:
a. fifteen 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 Service Code (IRS Code).
Included in employer contributions for 1999 and 1998 are participant
compensation deferrals of $8,241,060 and $7,260,148, respectively. The
Company's matching contributions for 1999 and 1998 included $2,417,737
and $1,982,020 in non-cash contributions, respectively.
The forfeited, nonvested portion of a terminated participant's account
may be used to reduce the Company's matching contribution. During 1999
and 1998, $63,011 and $86,185, respectively, of employer matching
contributions were forfeited by terminated employees before those amounts
became vested.
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
accounts will normally be paid within sixty days after the end of the
month in which he or she retires.
If a participant's total vested account balance is below $3,500, the
benefit payment will be made in the form of a lump sum cash payment. If
the total vested account balance exceeds $3,500, the participant may
elect to receive the portion of their account which is invested in the
La-Z-Boy Incoprorated Common Stock Fund (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.
1. Description of the Plan (continued)
Death Benefits
Upon the death of a participant, the value of his or her account becomes
fully vested. As soon as administratively feasible after the end of the
plan year following the death, 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 $50,000 or fifty percent of the participant's
vested account balance in the Plan. Interest rates on any loans granted
are determined by the Board.
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.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of 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 and management fees are paid by the Plan. All other
Plan expenses and professional fees are paid by the Company.
2. Summary of Significant Accounting Policies (continued)
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. Fund investments are valued based on
the market value of the underlying investments as of the last business
day of the 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 assets from the fair value of the assets at the beginning of
the plan year, or at the time of purchase if acquired during the current
plan year. Unrealized appreciation and depreciation of investments is
calculated by taking the fair value of the assets at the end of the plan
year less the fair value of the assets at the beginning of the plan year,
or at the time of purchase if acquired during the current plan year.
Reclassification
Certain amounts in the prior year have been reclassified to conform with
the current year's presentation.
Allocation of Assets
A participant's salary deferral contributions are allocated to the
individual's account each pay period. The Company's matching
contributions are allocated to each participant's account monthly.
Changes in the fair market value of assets, investment income and gains
and losses on the disposition of assets are allocated to participants'
accounts on a daily basis in proportion to their account balance.
3. Investment Options
The Plan provides participants with six investment options as follows:
Bond Fund - funds are invested in shares of a registered investment
company that invests in U.S. Treasury bonds and securities of various
U.S. government agencies.
Balanced Fund - funds are invested in shares of a registered investment
company that invests in corporate stocks and bonds and various U.S.
government agencies.
Company Stock Fund - funds are invested in the Company's common stock.
3. Investment Options (continued)
Equity Fund - funds are invested in shares of a registered investment
company that invests mainly in common stocks that are expected to reflect
Standard and Poor's 500 Composite Index performance.
Growth Fund - funds are invested in shares of a registered investment
company that invests mainly in common stocks that are believed by the
fund manager to have future returns greater than the Standard and Poor's
500 Composite Index performance.
Global Equity Fund - funds are invested in shares of a registered
investment company that invests in common stocks of companies of any size
throughout the world.
Fixed Income Fund - funds are invested in shares of a registered
investment company that invests in money market accounts, short-term
certificates of deposit, U.S. government bonds and corporate notes.
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 every
ninety days. The Company's matching contribution is invested 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,
1999 1998
La-Z-Boy Incorporated common stock, 1,961,151
and 1,881,210 shares, respectively $ 33,196,327* $ 33,509,994*
Victory Stock Index Fund, 612,755 and 581,326
shares, respectively 14,969,616 12,347,365
Victory Balanced Fund, 749,367 and 643,126
shares, respectively 10,588,558 9,447,520
Prism Reserve Fund, 62,214 and 58,894 shares,
respectively 10,103,283 9,376,646
Franklin Small Cap Growth Fund, 216,270 and 0
shares, respectively 9,543,985 -
Participant loans 8,203,833 6,535,884
Victory Special Growth Fund, 0 and 379,009 shares,
respectively - 4,627,700
* Nonparticipant directed
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
by $4,479,365 as follows:
Mutual funds $ 6,423,316
Common stock (1,943,951)
----------------
$ 4,479,365
================
5. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31,
1999 1998
Net assets:
Common stock $ 33,196,327 $ 33,509,994
================ ===============
December 31,
1999
Changes in net assets:
Contributions $ 5,026,249
Dividends 536,374
Net depreciation (1,943,951)
Benefits paid to participants (2,808,583)
Transfers to participant-directed investments (863,768)
Administrative expenses (95,494)
----------------
$ (149,173)
6. Party-in-interest
Investments in the Company Stock Fund consist of 1,961,151 and 1,881,210
shares of La-Z-Boy Incorporated common stock at December 31, 1999 and
1998, respectively. Shares for this fund are purchased on the open market
or from the Company's treasury shares at fair market value. At December
31, 1999 and 1998, the Plan held certain assets in mutual funds managed
by the Trustee. Any purchases and sales of these 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 IRS Code 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 IRS Code. The Plan has been
amended since receiving the determination letter. However, the Plan's
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with applicable
requirements of the IRS Code.
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 the Trustee.
La-Z-Boy Chair Company Schedule I
Matched Retirement Savings Plan
Schedule of Assets Held for Investment Purposes at End of Year
- -----------------------------------------------------------------------------------------------------------------
Identity of Current
Issuer or Borrower Description of Investment Cost Value
* La-Z-Boy Incorporated La-Z-Boy Incorporated Common Stock Fund $ 21,361,121 $ 33,196,327
* Key Trust Company of
Ohio, N.A. Victory Stock Index Fund 10,003,089 14,969,616
* Key Trust Company of
Ohio, N.A. Victory Balanced Fund 9,414,795 10,588,558
* Key Trust Company of
Ohio, N.A. Prism Reserve Fund 8,712,145 10,103,283
* Key Trust Company of
Ohio, N.A. Franklin Small Cap Growth Fund 5,107,683 9,543,985
* Key Trust Company of
Ohio, N.A. Prism Victory Financial Reserve Fund 1,034,510 1,090,908
*Key Trust Company of
Ohio, N.A. Janus Worldwide Fund 510,169 725,903
* Key Trust Company of
Ohio, N.A. Employee Benefit Money Market Fund 399,299 399,299
* Participant Loans Interest rates ranging
from 7.00 % through 10.00 %
Maturity dates ranging
from 2000 through 2014 8,203,833
--------------- ---------------
$ 56,542,811 $ 88,821,712
=============== ===============
* Key Trust Company of Ohio, N.A., La-Z-Boy Incorporated and participants are
known parties-in-interest of the Plan.
This schedule was prepared from data certified by the trustee of the Plan.
La-Z-Boy Chair Company Schedule II
Matched Retirement Savings Plan
Schedule of Reportable Transactions*
- ------------------------------------------------------------------------------------------------------------------------------------
Current Value
Identity of Asset on
of party Purchase Selling Cost of Transaction Net Gain
Involved Description of Asset Price Price Asset Date or (Loss)
Key Trust Company of Ohio, N.A La-Z-Boy Incorporated Common Stock Fund $4,888,637 $4,888,637 $4,888,637
* Transactions or series of transactions, involving nonparticipant-directed
investments, in excess of 5% of the current value of the Plan's assets at
December 31, 1998, as defined by section 2520.103-6 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA.
This schedule was prepared from data certified by the trustee of the Plan.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Forms S-8 (No. 333-03097) of La-Z-Boy Incorporated of our report
dated June 28, 2000 relating to the financial statements of the La-Z-Boy Chair
Company Matched Retirement Saving Plan, which appears in this Form 11-K.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Toledo, Ohio
June 28, 2000
