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Form 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Annual Report Pursuant to Section 15(d) of
The Securities Exchange Act of 1934 (Fee Required)
[X] For the fiscal year ended September 30, 2000
or
[ ] Transition report Pursuant to Section 15(d) of
The Securities Exchange Act of 1934 (No Fee Required)
Commission File No. 0-3747
A. Full title of plan and address of the Plan, if different from that of
the issuer named below:
THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
THE CATO CORPORATION
Human Resources Department
8100 Denmark Road
Charlotte, NC 28273
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THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
FORM 11-K
September 30, 2000
Table of Contents
Page
No.
Part I - Exhibit Index.......................................................2
Part II - Financial Information
Independent Auditors' Report.............................................3
Statements of Net Assets Available for Benefits..........................4
Statements of Changes in Net Assets Available for Benefits...............5
Notes to Financial Statements........................................6 - 7
Other Information........................................................8
Independent Auditors' Consent............................................9
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THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
EXHIBIT INDEX
Form 11-K for the Years Ended
September 30, 2000, 1999, and 1998
Exhibit Description Page
No. of Exhibit No.
------- ----------- ----
1. Consent of Deloitte & Touche LLP, Independent Auditors...........9
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INDEPENDENT AUDITORS' REPORT
The Employee Benefit Plan Administrative Committee
The Cato Corporation Employee Stock Purchase Plan
We have audited the accompanying statements of net assets available for benefits
of The Cato Corporation Employee Stock Purchase Plan as of September 30, 2000
and 1999, and the related statements of changes in net assets available for
benefits each of the three years in the period ended September 30, 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 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 Cato Corporation Employee
Stock Purchase Plan as of September 30, 2000 and 1999, and the changes in net
assets available for benefits for each of the three years in the period ended
September 30, 2000 in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
December 1, 2000
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
September 30,
------------------------------------------
2000 1999
---------------- -----------------
Assets - Cash $ 4,617 $ 0
Liabilities - Participant Refunds 4,617 0
---------------- -----------------
Net Assets Available for Benefits $ 0 $ 0
================ =================
See accompanying notes to financial statements.
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Years Ended September 30,
---------------------------------------------------------
2000 1999 1998
-------------- --------------- --------------
<S> <C> <C> <C>
Increases:
Participant Contributions $ 427,054 $ 426,249 $ 325,722
Dividends Reinvested by Participants 50,030 30,463 20,988
-------------- --------------- --------------
477,084 456,712 346,710
-------------- --------------- --------------
Decreases:
Purchases of The Cato Corporation
Common Stock subsequently
Distributed to Plan participants (44,500,
53,449 and 37,130 shares
for the years ended September 30,
2000, 1999 and 1998, respectively) 442,263 441,632 335,740
Cash Withdrawals 34,821 15,080 10,970
-------------- --------------- --------------
477,084 456,712 346,710
-------------- --------------- --------------
Net Change 0 0 0
Net Assets Available for Benefits at
Beginning of Year 0 0 0
-------------- --------------- --------------
Net Assets Available for Benefits at End of Year
$ 0 $ 0 $ 0
============== =============== ==============
</TABLE>
See accompanying notes to financial statements.
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
Years Ended September 30, 2000, 1999, and 1998
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements of The Cato Corporation Employee Stock
Purchase Plan ("the Plan") have been prepared on the accrual basis.
NOTE 2 - PLAN DESCRIPTION AND SUMMARY OF SIGNIFICANT PLAN PROVISIONS
The Board of Directors of The Cato Corporation ("the Company") adopted the Plan
on September 23, 1993 and the Plan was approved by Shareholders of the Company
at the Annual Meeting of Shareholders on May 19, 1994. The Plan became effective
as of November 1, 1993 and will terminate on September 20, 2003, unless extended
by the Board of Directors or terminated sooner by the sale of all Shares offered
under the Plan. There were 250,000 shares of the Cato Corporation Common Stock
originally reserved under the Plan. On May 21, 1998, the Plan was amended to
increase the maximum number of shares authorized to be issued from 250,000 to
500,000. At September 30, 2000, 156,414 shares remained available.
The purpose of the Plan is to provide eligible employees with an opportunity to
participate in the accumulation and potential appreciation in value of the
Common Stock of The Cato Corporation. Eligible employees are those who are
regularly scheduled to work at least 20 hours each week and more than 5 months
each calendar year and are actively employed on the first and last day of the
purchase period. There are two purchase periods in each plan year. The first
period includes the six months ended March 31, and the second period includes
the six months ended September 30. Under the terms of the Plan, all eligible
employees of the Company, through payroll deductions, are allowed to purchase,
on the last day of each of the purchase periods in the plan year specified in
the Plan, shares of Common Stock at a 15% discount from the lower of the first
or last reported sale price of the Common Stock on the NASDAQ National Market
System. In addition to the Common Stock which may be purchased through payroll
deductions, Common Stock discounted 15% may also be purchased by each plan
participant by a one-time election on April 15 of each year in an amount not to
exceed $10,000. The purchase price at which shares will be sold during each
purchase period is 85% of the lower of the fair market value at (1) the
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NOTE 2 - PLAN DESCRIPTION AND SUMMARY OF SIGNIFICANT PLAN PROVISIONS - CONTINUED
beginning date of a purchase period or (2) ending date of a purchase period. The
purchase price for the one-time election is 85% of the last sale price at the
close of the market on April 15 as listed on the NASDAQ National Market System.
Contributions are limited to 10% of compensation for the biannual purchases made
through payroll deductions. The aggregate fair market value of Shares of Common
Stock that may be purchased by any participant during any calendar year may not
exceed $25,000. Pending investment, funds are held by The Cato Corporation. In
addition to employee contributions, all dividends paid on Common Shares
purchased through the plan are automatically reinvested in additional shares.
A participant may withdraw all or any portion of the full shares held in the
participant's account under the Plan by notifying The Cato Corporation in
writing. A participant may suspend payroll deductions at any time and applicable
payroll deductions will be returned to the participant. No suspended payroll
deductions are permitted within the last 15 days of each purchase period.
The Plan may be amended, restated, supplemented or terminated by The Cato
Corporation through the Board of Directors at any time by hand delivering or by
mailing of appropriate notice at least (30) days prior to the effective date
thereof to the Agent and to each plan participant at his last address of record.
The Plan is a stock plan as defined in Section 423 of the Internal Revenue Code
of 1986, as amended, and is not subject to federal income taxes. Substantial tax
benefits are allowed to participants with respect to the treatment of the stock
purchased within the plan, provided certain holding period requirements are met.
All costs to administer the Plan are paid by the Company.
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 assets, liabilities, and changes therein, and disclosures of
contingent assets and liabilities. Actual results could differ from those
estimates.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 27, 2000
The Cato Corporation
By: /s/ Robert M. Sandler
--------------------------------
Robert M. Sandler
Senior Vice President
Controller
