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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K/A
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
(Fee Required)
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<S> <C>
FOR THE FISCAL YEAR ENDED JULY 1, 1994 COMMISSION FILE NUMBER 1-3344
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SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
(Full title of the plan)
--------------------
SARA LEE CORPORATION
Three First National Plaza
Suite 4600
Chicago, Illinois 60602
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee of
Spring City Knitting Co., Inc.:
We were engaged to audit the accompanying statements of net assets available
for plan benefits of the Spring City Knitting Co., Inc. Retirement Savings Plan
as of December 31, 1994 and 1993, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1994. These
financial statements are the responsibility of the Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 3, which was certified by Wachovia Bank of North Carolina,
N.A., the trustee of the Plan, except for comparing such information with the
related information included in the 1994 and 1993 financial statements. We
have been informed by the plan administrator that the trustee holds the Plan's
investment assets and executes investment transactions. The plan administrator
has obtained a certification from the trustee as of and for the years ended
December 31, 1994 and 1993, that the information provided to the plan
administrator by the trustee is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements taken as a whole. The form and content of the information included
in the financial statements, other than that derived from the information
certified by the trustee, have been audited by us in accordance with generally
accepted auditing standards and, in our opinion, are presented in compliance
with the Department of Labor Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974.
/s/ Arthur Andersen LLP
Greensboro, North Carolina,
May 9, 1995.
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SPRING CITY KNITTING CO., INC. RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1994 AND 1993
TOGETHER WITH AUDITORS' REPORT
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SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994 AND 1993
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<CAPTION>
1994 1993
---- ----
<S> <C> <C>
ASSETS:
Contributions-
Employer contributions receivable (Note 4) $ 96,247 $ 233,876
Employee contributions receivable (Note 5) 8,660 152,482
Refunds receivable 0 17,187
Income receivable (Note 6) 0 5,230
Accrued interest income 22,015 21,999
Investment in master trust 1,267,973 2,648,655
---------- ----------
1,394,895 3,079,429
LIABILITIES - Administrative fees payable 88 0
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,394,807 $3,079,429
========== ==========
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The accompanying notes to financial statements
are an integral part of these statements.
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SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
INTEREST DIVERSIFIED INTERNATIONAL SMALL STOCK
INCOME EQUITY FUND EQUITY FUND
FUND ------------ FUND -----------
------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $ 1,849,507 $116,209 $ 0 $ 0
------------ -------- ---- ------
ADDITIONS TO NET ASSETS:
Investment income-
Interest 108,268 4,024 16 114
Realized gains 0 1,234 0 0
Contributions-
Employer 40,759 13,038 112 366
Employee 222,081 4,603 833 3,006
Transfers from another plan 39,416 7,190 0 0
------------ -------- ---- ------
Total additions 410,524 30,089 961 3,486
------------ -------- ---- ------
DEDUCTIONS TO NET ASSETS:
Benefits paid to participants 1,728,463 7,222 0 0
Administrative expenses 283 0 0 0
Realized losses 0 0 0 1
Unrealized losses 6,976 3,954 35 83
------------ -------- ---- ------
Total deductions 1,735,722 11,176 35 84
------------ -------- ---- ------
NET INCREASE (DECREASE) IN PLAN ASSETS
(1,325,198) 18,913 926 3,402
------------ -------- ---- ------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 524,309 $135,122 $926 $3,402
============ ======== ==== ======
<CAPTION>
EMPLOYER
SARA LEE MONEY
CORPORATION PURCHASE
BALANCED COMMON STOCK CONTRIBUTION
FUND FUND FUND TOTAL
--------- ------------ ------------ -----
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $ 0 $ 0 $1,113,713 $ 3,079,429
------ ------ ---------- -----------
ADDITIONS TO NET ASSETS:
Investment income-
Interest 52 77 59,461 172,012
Realized gains 0 0 0 1,234
Contributions-
Employer 309 483 96,247 151,314
Employee 2,352 4,251 0 237,126
Transfers from another plan 0 0 0 46,606
------ ------ ---------- -----------
Total additions 2,713 4,811 155,708 608,292
------ ------ ---------- -----------
DEDUCTIONS TO NET ASSETS:
Benefits paid to participants 0 0 545,683 2,281,368
Administrative expenses 0 0 172 455
Realized losses 6 0 0 7
Unrealized losses 36 0 0 11,084
------ ------ ---------- -----------
Total deductions 42 0 545,855 2,292,914
------ ------ ---------- -----------
NET INCREASE (DECREASE) IN PLAN ASSETS
2,671 4,811 (390,147) (1,684,622)
------ ------ ---------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $2,671 $4,811 $ 723,566 $ 1,394,807
====== ====== ========== ===========
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The accompanying notes to financial statements are an
integral part of this statement.
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SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A brief summary of the significant accounting and reporting policies followed
by the Retirement Savings Plan (the Plan) of Spring City Knitting Co., Inc.
(the Company) in the preparation of its financial statements is presented
below.
BASIS OF ACCOUNTING
The Plan's financial statements are presented on the accrual basis of
accounting.
INVESTMENT VALUATION
Investments of the Plan are stated at current market value as determined by the
plan trustee as of the balance sheet date. Securities traded in public markets
are valued at their quoted market prices. Purchases and sales of securities
are reflected on a trade-date basis.
TAX STATUS
The Internal Revenue Service issued a determination letter dated June 14, 1990,
stating that the Plan was in accordance with applicable plan design
requirements as of that date. The Plan has been amended since receiving the
determination letter. However, the plan administrator and management believe
that the Plan was designed and operated within the applicable requirements of
the Internal Revenue Code. Therefore, they believe that the Plan was qualified
and the related trust was tax-exempt through the year ended December 31, 1994,
and; accordingly, no provision for income taxes has been recorded in the
accompanying financial statements.
EXPENSES
Trustee's fees are paid by the Plan; all other administrative expenses are paid
by the Company.
2. DESCRIPTION AND ADMINISTRATION OF THE PLAN:
The Plan is a contributory defined contribution plan covering all hourly and
salaried employees of Spring City Knitting Co., Inc. (the Company), a
subsidiary of Sara Lee Corporation except those employees who participate in a
collective bargaining unit. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). The Plan is composed
of seven funds, the Interest Income Fund (IIF), Diversified Equity Fund,
International Equity Fund, Small Stock Fund, Balanced Fund, Sara Lee
Corporation Common Stock Fund and the Employer Money Purchase Contribution Fund
(EMPCF).
For all funds except the EMPCF, employees may contribute up to 15% of
applicable earnings per pay period. For hourly participants, the Company will
contribute 40% of the participants' contributions up to a maximum of 2% of
applicable earnings per pay period. On July 1, 1993, all salaried employees
were transferred from the Plan into the Sara Lee Supplemental Retirement Plan.
For the six months prior to the transfer, the Company contributed 50% of the
salaried participants' contributions up to a maximum of 3% of applicable
earnings per pay period. In addition, the Company will contribute any amounts
required to restore the nonvested account balance of any reemployed participant
provided the participant repays to the Plan the full amount of the distribution
within five years following his date of reemployment. Employees who are not
highly compensated as defined in the Plan are fully vested in the IIF and Small
Stock Fund at all times. Highly compensated employees become fully vested in
the IIF and Small Stock Fund upon the earlier of completion of two years of
service, attainment of normal retirement date, total and permanent disability,
or death. As of year-end, there were no highly compensated employees in the
Plan. Under the EMPCF, the Company will pay to the Trustee for each plan year
an amount to be allocated among the participant accounts of hourly employees
who have completed 1,000 hours or more of service and who were employed as of
the plan year-end. The amounts to be credited to each individual employer
money purchase contribution account are the lesser of 1 1/2% of the employee's
basic earnings for the plan year or the maximum annual addition allowable for
the plan year as defined in the Plan and are included in employer contributions
in the statements of changes in net assets available for plan benefits.
Participants in this fund become fully vested after five years of service or
upon the attainment of normal retirement date, total and permanent disability,
or death.
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2
A separate account is maintained for each participant, and the account balances
are adjusted monthly for company contributions. Investment income is allocated
to accounts semiannually in proportion to the participant's share of the Plan's
net assets available for plan benefits as of the later of the last day of June
or last day of December in the respective year ("preceding valuation date").
Forfeitures are applied as a credit to subsequent company contributions, thus
reducing the amount deposited to the trust.
Effective June 6, 1994, Spring City Knitting Company, Inc. announced
restructuring plans resulting in the shut-down of several manufacturing
facilities and the related termination of employees. Upon termination, all
participants became 100% vested in their respective participant account
balances. These terminated participants had the option to leave their account
balances within the Trust or receive a distribution of their accumulated
benefits.
The Company has the right under the Plan, although it has not expressed any
intent to do so, to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of discontinuance of
the Plan, all participants' accounts become fully vested.
3. INFORMATION CERTIFIED BY THE TRUSTEE:
The assets of the Plan are held in the Sara Lee Corporation Investment Trust
(the Investment Trust) at Wachovia Bank of North Carolina, N.A. (Wachovia).
The plan assets included in the Investment Trust represent .4% and 1.7% of the
total Investment Trust assets at December 31, 1994 and 1993, respectively. The
following table summarizes the net value of the Plan's interest (including
accrued income) in each investment account of the Investment Trust at the end
of the plan year:
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<CAPTION>
VALUE AT
INVESTMENT ACCOUNT DECEMBER 31, 1994
------------------ -----------------
<S> <C>
Interest Income Fund $ 499,926
Diversified Equity Fund 134,769
International Equity Fund 888
Small Stock Fund 3,133
Balanced Fund 2,577
Sara Lee Corporation Common Stock Fund 4,540
Employer Money Purchase Contribution Fund 622,140
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$1,267,973
==========
</TABLE>
The total cost, market value and detail of the Investment Trust assets, as well
as the schedule of reportable transactions, are disclosed in a separate filing
as of June 30, 1994.
The information in the financial statements was summarized from information
supplied and certified by Wachovia, except for contributions and contribution
receivables. The information certified by Wachovia was not audited in
accordance with generally accepted auditing standards by independent public
accountants, as permitted by 29 CFR 2520.103-8 of the Department of Labor Rules
and Regulations for Reporting and Disclosure under ERISA.
4. EMPLOYER CONTRIBUTIONS RECEIVABLES:
Employer contributions for the year ended December 31, 1994 and 1993, were
contributed to the trust after the end of the plan year. As a result, as of
December 31, 1994 and 1993, the Plan reflects a receivable from the Company of
$96,247 and $233,876 for employer contributions receivable.
5. EMPLOYEE CONTRIBUTION RECEIVABLE:
Employee contributions for the month ended December 31, 1994 and the period
from July 1993 to December 1993, were contributed to the trust after the end of
the respective plan year. As a result, as of December 31, 1994 and 1993, the
Plan reflects a receivable from the Company of $8,660 and $152,482,
respectively, for unremitted participant contributions.
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3
6. INCOME RECEIVABLE:
In October 1994 and retroactive to July 1993, the Plan was amended to permit
participants to invest in four new investment options within the Sara Lee
Corporation Master Trust. For administrative reasons, these investment options
were not established for the Plan in 1993. As a result, existing account
balances in the original two investment funds, which had been designated by the
participants to be transferred to the four new options, remained in the
previous investment funds.
The Company calculated the investment income that would have been earned by the
participants during the period from July 1993 to December 31, 1993, had the
employee contributions and existing balances been invested according to the
applicable participants' elections. The amount of income that would have been
earned by the participants, as calculated by the Company, in excess of actual
earnings on existing balances which remained in original investment funds was
reflected as a receivable of $5,230 on the accompanying 1993 statements of net
assets available for plan benefits. The Company made the necessary corrective
action in 1994 to make the contribution of this amount to the trust.
7. RECONCILIATION TO FORM 5500:
As of December 31, 1993, the Plan had approximately $36,400 of pending
distributions to participants who elected to withdraw from the operation and
earnings of the Plan. These amounts were recorded as a liability in the Plan's
1993 Form 5500; however, these amounts are not recorded as a liability in
accordance with generally accepted accounting principles on the financial
statements.
As of December 31, 1994, the Plan did not have any pending distributions which
would result in a liability in the Plan's 1994 Form 5500.
The following table reconciles net assets available for plan benefits and
benefits paid to participants as reported in the financial statements to the
Form 5500 as filed by the Company for the year ended December 31, 1994:
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<CAPTION>
NET ASSETS
BENEFITS PAID TO AVAILABLE FOR
PARTICIPANTS PLAN BENEFITS
---------------- -------------
<S> <C> <C>
As reported in the financial statements $2,281,368 $1,394,807
Reversal of 1993 accrued benefit payments (36,400) 0
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As filed in the Form 5500 $2,244,968 $1,394,807
========== ==========
</TABLE>
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Spring City Knitting Co., Inc.
Retirement Savings Plan previously filed Registration Statement File No.
33-35760.
/s/ Arthur Andersen LLP
------------------------
ARTHUR ANDERSEN LLP
Greensboro, North Carolina,
May 9,1995.
<PAGE> 10
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.
Date: June 27, 1995 SPRlNG ClTY KNITTING CO, INC.
RETIREMENT SAVINGS PLAN
/s/ Michael E. Murphy
---------------------------------
Michael E. Murphy, As a Committee
Member on Behalf of the Committee
