11-K: Annual report of employee stock purchase, savings and similar plans
Published on June 29, 2001
As filed with the Securities and Exchange Commission on June 29, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-96816
A. Full title of the plan and the address of the plan:
Central Garden & Pet Company Investment Growth Plan
3697 Mt. Diablo Boulevard
Lafayette, California 94549
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
Central Garden & Pet Company
3697 Mt. Diablo Boulevard
Lafayette, California 94549
REQUIRED INFORMATION
1. Financial statements filed as a part of this annual report: Report of
Deloitte & Touche LLP, independent auditors, Audited Statements of Net Assets
Available for Benefits, With Supplemental Information (Modified Cash Basis) as
of December 31, 2000 and 1999, Audited Statement of Changes in Net Assets
Available for Benefits, With Supplemental Information (Modified Cash Basis) for
the Year Ended December 31, 2000, and Notes to Financial Statements for the Year
Ended December 31, 2000.
2. Exhibit filed as part of this annual report: Exhibit 23 - Consent of
Deloitte and Touche LLP, independent auditors.
SIGNATURES
The Plan. 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.
CENTRAL GARDEN & PET COMPANY INVESTMENT
GROWTH PLAN
Date: June 29, 2001
By: /s/ Elaine Fabbri
------------------------------------
Elaine Fabbri
Director of Benefits and Compensation
CENTRAL GARDEN &
PET COMPANY
INVESTMENT GROWTH PLAN
Financial Statements (Modified Cash Basis) as of
December 31, 2000 and 1999 and for the Year Ended
December 31, 2000, Supplemental Schedule as of
December 31, 2000, and Independent Auditors' Report
CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
TABLE OF CONTENTS
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[LETTERHEAD OF DELOITTE & TOUCHE]
INDEPENDENT AUDITORS' REPORT
Trustees and Participants
Central Garden & Pet Company
Investment Growth Plan
We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of the Central Garden & Pet Company Investment Growth Plan
(the "Plan") as of December 31, 2000 and 1999, and the related statement of
changes in net assets available for benefits (modified cash basis) for the year
ended December 31, 2000. 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 our 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.
As discussed in Note 2, these financial statements and supplemental schedule
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than accounting principles generally accepted in the
United States of America.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2000 and 1999, and the changes in net assets available for benefits for the year
ended December 31, 2000 on the basis of accounting described in Note 2.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
table of contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is 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. The supplemental schedule has been subjected to the auditing procedures
applied in our audits of the basic 2000 financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Deloitte & Touche LLP
June 18, 2001
CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
DECEMBER 31, 2000 AND 1999
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2000 1999
ASSETS:
Investments at fair value:
Mutual funds $26,089,128 $ 2,963
Common stock 2,447,614 3,886,458
Participant loans 1,096,106 432,474
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Total 29,632,848 4,321,895
Investments at contract value:
Investment contract with insurance company 11,665,059 7,313,212
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Total investments 41,297,907 11,635,107
Cash - 12,566,231
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NET ASSETS AVAILABLE FOR BENEFITS $41,297,907 $24,201,338
=========== ===========
See notes to financial statements.
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CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
YEAR ENDED DECEMBER 31, 2000
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ADDITIONS:
Investment income (loss):
Net depreciation in fair value of investments $(4,563,577)
Interest and dividend income 1,835,244
-----------
Total investment loss (2,728,333)
-----------
Contributions:
Employer 464,699
Participant 4,024,144
-----------
Total contributions 4,488,843
-----------
Net additions 1,760,510
-----------
DEDUCTIONS:
Benefits paid to participants 5,249,539
Fees 8,670
-----------
Total deductions 5,258,209
-----------
TRANSFERS IN FROM MERGED PLANS:
Wellmark International Investment Growth Plan 12,131,037
Kaytee Products, Incorporated 401(k) Retirement Savings Plan 8,463,231
-----------
Total assets transferred in 20,594,268
-----------
NET INCREASE 17,096,569
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 24,201,338
-----------
End of year $41,297,907
===========
See notes to financial statements.
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CENTRAL GARDEN & PET COMPANY
INVESTMENT GROWTH PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2000
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1. PLAN DESCRIPTION
The following brief description of the Central Garden & Pet Company
Investment Growth Plan (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan Document for more
complete information.
General - The Plan is a defined contribution plan sponsored by Central Garden
& Pet Company (the "Company"). The Plan is intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code ("IRC"). The purpose
of the Plan is to provide retirement and other benefits for employees of the
Company. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). Employees whose compensation is not
determined by a collective bargaining agreement become eligible to
participate in the Plan at age 21 or older after at least 1,000 hours of
service in a year.
Plan Mergers - In March 2000, the net assets available for benefits of the
Wellmark International, Inc. Investment Growth Plan and Kaytee Products,
Incorporated 401(k) Retirement Savings Plan were merged into the Plan (see
Note 7).
Contributions - Participants of the Plan can elect to defer pretax
contributions between 1% and 15% of compensation, up to a maximum of $10,500
in 2000 and $10,000 in 1999, as allowed by the IRC.
For the year ended December 31, 1999, the Company made a discretionary
matching contribution equal to 25% of the first 6% of compensation
contributed to the Plan. The Company's matching contribution for the year
ended December 31, 1999 was paid in 2000, and consisted of 44,414 shares of
Company stock, valued at $417,355. As allowed under the Plan, the Company
also made a $47,344 cash discretionary profit sharing contribution that was
paid in 2000.
In February 2001, the Company's board of directors adopted an amendment to
commit the Company to a fixed match of 25% of the first 8% of compensation
contributed to the Plan, retroactive to the year ended December 31, 2000. The
Company's matching contribution for the year ended December 31, 2000 was paid
in 2001 and consisted of $821,316 of cash. The Company did not elect to
contribute a discretionary profit sharing contribution for year ended
December 31, 2000.
Vesting - Participants are immediately vested in their voluntary
contributions plus any associated earnings. Vesting in the Company matching
contributions, plus any earnings thereon, is based on years of continuous
service. A participant is 100% vested after five years of credited service.
Participant Accounts - Each participant's account is credited with the
participant's contributions, an allocation of the Plan's investment income
and/or losses, and the Company's contributions. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the vested
account.
Participant Loans - Participant loans are available to active employees for
up to 50% of an employee's account balance, with a minimum borrowing of $500
and a maximum of $50,000. Loan terms are a
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maximum of five years or, for the purchase of a primary residence, a maximum
of ten years. Participants are allowed only one outstanding loan at a time.
Loans are secured by the participant's account balance and bear interest at a
rate commensurate with prevailing rates at the time the loan is made as
determined by the Plan administrator.
Payment of Benefits - Upon termination of service for any reason, including
death and disability, participants with vested account values of less than
$5,000 will be required to receive a lump-sum distribution of such amounts.
If the value of the vested portion of the vested accounts exceeds $5,000, the
terminated participant can elect to receive his or her distribution
immediately or at any time prior to attaining the normal retirement age as
defined by the plan (age 65). When a participant attains the normal
retirement age, the participant can withdraw all or any portion of his or her
accounts under the plan without restriction.
Forfeitures - Forfeitures are used to reduce future Company matching
contributions. Total forfeitures during 2000 were $38,604.
Plan Termination - Although it has not expressed any intent to do so, the
Company may completely discontinue its contributions and terminate the Plan
at any time by resolution of its Board of Directors. In the event of Plan
termination or complete discontinuance of Company contributions, each Plan
participant will become fully vested in his or her account.
Tax Status - The Plan obtained its latest determination letter on September
1, 1995, in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the IRC. The
Plan's Administrative Committee believes that the Plan is currently designed
and being operated in compliance with the applicable requirements of the IRC.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
Reclassifications - Certain prior year amounts have been reclassified to
conform with the current year presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying financial statements have been
prepared on the modified cash basis under which certain revenues are
recognized when received, disbursements are recognized when made and
contributions are recorded as received. Additionally, investments are
reflected at fair value. Accordingly, the financial statements are not
intended to present net assets of the Plan in conformity with accounting
principles generally accepted in the United States of America.
Use of Estimates - The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition - Investments in mutual funds and
common stock are stated at fair value, which is determined by quoted market
prices. The benefit responsive investment contract is stated at contract
value (see Note 5). Purchases and sales of securities are recorded on a
trade-date basis. Participant loans are carried at the unpaid principal
balance, which approximates fair value.
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3. INVESTMENTS
Investments that represent 5% or more of the Plan's net assets at December
31, 2000 and 1999, are separately identified in the following table:
*Nonparticipant-directed
During the year ended December 31, 2000, the Plan's investments, including
gains and losses on investments bought and sold, as well as held during the
year, depreciated in value by $4,563,677 as follows:
Mutual funds $ 3,162,187
Common stock 1,401,390
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Total $ 4,563,577
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4. NONPARTICIPANT-DIRECTED INVESTMENTS
The Plan's nonparticipant-directed investments consist entirely of Central
Garden & Pet Company common stock. The fair market value of such investments
was $2,447,614 and $3,886,458 at December 31, 2000 and 1999, respectively.
Information about the significant components of the changes in net assets
relating to the nonparticipant-directed investments for the year ended
December 31, 2000 is as follows:
Employer contributions $ 417,355
Participant contributions 390,350
Net depreciation in fair market value (1,316,987)
Benefits paid to participants (229,860)
Transfers to participant-directed investments (698,693)
Fees and other expenses (1,009)
-----------
Total $(1,438,844)
===========
5. INVESTMENT CONTRACT WITH INSURANCE COMPANY
In 2000, the Plan began offering the Aetna Fixed Account, a benefit-
responsive investment contract, as an investment option to Plan participants.
As of December 31, 2000, the Plan had $11,665,059 invested in this fund.
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Aetna Financial Services ("Aetna") maintains the contributions to this fund
in a general account. The account is credited with earnings on the
underlying investments and charged for participant withdrawals and
administrative expenses. The contract is included in the financial
statements at contract value as reported to the Plan by Aetna. Contract
value represents contributions made under the contract, plus earnings, less
participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value.
There are no reserves against contract value for credit risk of the contract
issuer or otherwise. The average yield and crediting interest rates was
approximately 5.6% for 2000. The crediting interest rate is determined on a
monthly basis by an actuarial formula as designated by Aetna. The crediting
interest rate is subject to a guaranteed minimum floor as defined on an
annual basis by Aetna. The floor rate is currently set at 5.1%
6. PARTY-IN-INTEREST TRANSACTIONS
The Plan's investments include Central Garden & Pet Company common stock and
Aetna Investment Funds, representing party-in-interest transactions that
qualify as exempt prohibited transactions.
7. MERGER WITH WELLMARK INTERNATIONAL, INC. INVESTMENT GROWTH PLAN AND KAYTEE
PRODUCTS, 401(k) RETIREMENT SAVINGS PLAN
Effective January 1, 2000, the Board of Directors adopted an amended and
restated Central Garden & Pet Investment Growth Plan (the "Plan"). Such
amendment included the adoption of the Plan by other subsidiaries of Central
Garden & Pet Company and the merger of plans of other subsidiaries into the
Plan, at the discretion of management. As of March 1, 2000, Wellmark
International, Inc. and Kaytee Products, Inc., wholly-owned subsidiaries of
Central Garden & Pet Company, became sponsoring employers of the Plan, and
the Wellmark International, Inc. Investment Growth Plan and Kaytee Products,
Inc. 401(k) Retirement Savings Plan were merged into the Plan effective March
2, 2000 and March 16, 2000, respectively.
In conjunction with the amendment and restatement, the Board of Directors
further approved the appointment of Fleet National Bank as successor trustee
of the Plan, replacing the prior trustee, Dreyfus Trust Company; and the
appointment of Aetna Financial Services as successor recordkeeper of the
Plan, replacing the prior recordkeeper, Dreyfus Retirement Services. These
trustee and recordkeeper changes were adopted effective January 1, 2000.
Effective August 1, 2000, Aetna Financial Services was appointed as successor
trustee of the plan, replacing Fleet National Bank.
******
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CENTRAL GARDEN & PET COMPANY INVESTMENT GROWTH PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2000
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/(1)/Party-in-interest, as defined by ERISA.
/(2)/Nonparticipant-directed
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