FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[NO FEE REQUIRED]
For the transition period from .....to......
Commission Title Number 0-9831
LIZ CLAIBORNE SAVINGS PLAN
(FULL TITLE OF PLAN)
LIZ CLAIBORNE, INC.
(NAME OF ISSUER OF THE SECURITIES HELD
PURSUANT TO THE PLAN)
1441 BROADWAY
NEW YORK, NEW YORK 10018
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
See Index to Financial Statements and Schedule at page F-1 and the accompanying
Financial Statements.
Exhibits
10(a) Liz Claiborne Savings Plan ("Savings Plan"), as amended and
restated, is incorporated herein by reference from Exhibit 10(f) to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 1989.
10(b)Amendment Nos. 1 and 2 to the Savings Plan are incorporated herein by
reference from Exhibit 10(g) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 26, 1992.
10(c)Amendment Nos. 3 and 4 to the Savings Plan are incorporated herein by
reference from Exhibit 10(g)(i) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 25, 1993.
10(d)Amendment No. 5 to the Savings Plan is incorporated herein by reference
from Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for the
period ended July 2, 1994.
10(e)Amendment No. 6 to the Savings Plan, is incorporated herein by reference
from Exhibit 10(e)(iii) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1996 (the "1996 Annual Report").
10(f)Amendment No. 7 to the Savings Plan is incorporated herein by reference
from Exhibit 10(e)(iv) to the Company's 1996 Annual Report.
10(g) Trust Agreement dated as of July 1, 1994 between the Company
and IDS Trust Company (the "Trust") related to the Plan is
incorporated herein by reference from Exhibit 10(b) to the
Company's Quarterly Report on Form 10-Q for the period ended July
2, 1994.
24 Consent of Independent Public Accountants
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
LIZ CLAIBORNE SAVINGS PLAN
(Name of Plan)
By /s/ Samuel M. Miller
Samuel M. Miller
Member of Administrative
June 27, 1997 Committee
<PAGE>
LIZ CLAIBORNE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
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Page
Number
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS F-2
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Participants
as of December 31, 1996 and 1995 F-3 to F-4
Statements of Changes in Net Assets Available for Plan
Participants for the Years Ended December 31, 1996,
1995 and 1994 F-5 to F-7
Notes to Financial Statements F-8 to F-12
Supplemental Schedule:
Schedule I. Investments F-13
Note: Schedules other than that referred to above have been omitted as
inapplicable or not required under the instructions contained in Regulation S-X
or the information is included elsewhere in the financial statements or the
notes thereto.
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of
The Liz Claiborne Savings Plan:
We have audited the accompanying statements of net assets available for plan
participants of the Liz Claiborne Savings Plan (the "Plan") as of December 31,
1996 and 1995, and the related statements of changes in net assets available for
plan participants for each of the three years in the period ended December 31,
1996. These financial statements and the schedule referred to below 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 generally accepted auditing
standards. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan participants of the
Plan as of December 31, 1996 and 1995, and the changes in net assets available
for plan participants for each of the three years in the period ended December
31, 1996, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedule of
investments is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not a required part of the
basic financial statements. In addition, the Fund Information in the statements
of net assets available for plan participants and the statements of changes in
net assets available for plan participants is presented for purposes of
additional analysis rather than to present the net assets available for plan
participants and changes in net assets available for plan participants of each
fund. The schedule and Fund Information 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.
Arthur Andersen LLP
New York, New York
June 27, 1997
F-2
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<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Net Assets Available for Plan Participants
As of December 31, 1996
INCOME FEDERAL EQUITY NEW COMPANY
FUNDS ACCOUNT INCOME MUTUAL INDEX DIMENSIONS STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments at market value $ 20,763,118 $ 2,106,225 $ 4,740,770 $ 11,986,514 $ 8,786,923 $ 10,296,867 $ 58,680,417
Accrued interest and dividends -- -- -- -- -- 2,256 2,256
Loans to participants 722,542 163,858 340,965 430,241 580,673 343,986 2,582,265
TOTAL PLAN ASSETS 21,485,660 2,270,083 5,081,735 12,416,755 9,367,596 10,643,109 61,264,938
PLAN LIABILITIES
Due to Plan participants 153,851 -- -- -- -- -- 153,851
Due to Plan sponsor-forfeitures 194,582 -- -- -- -- -- 194,582
TOTAL PLAN LIABILITIES 348,433 -- -- -- -- -- 348,433
NET ASSETS AVAILABLE FOR
PLAN PARTICIPANTS $ 21,137,227 $ 2,270,083 $ 5,081,735 $ 12,416,755 $ 9,367,596 $ 10,643,109 $ 60,916,505
The accompanying notes to financial statements are an
integral part of this statement.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Net Assets Available for Plan Participants
As of December 31, 1995
INCOME FEDERAL EQUITY NEW COMPANY
FUNDS ACCOUNT INCOME MUTUAL INDEX DIMENSIONS STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments at market value $ 21,205,410 $ 1,616,348 $ 3,060,558 $ 9,064,721 $ 4,056,761 $ 7,603,404 $ 46,607,202
Accrued interest and dividends -- -- -- -- 180,568 1,378 181,946
Loans to participants 572,422 166,918 294,062 341,518 361,661 268,779 2,005,360
TOTAL PLAN ASSETS 21,777,832 1,783,266 3,354,620 9,406,239 4,598,990 7,873,561 48,794,508
PLAN LIABILITIES
Due to Plan sponsor-forfeitures 202,051 -- -- -- -- -- 202,051
TOTAL PLAN LIABILITIES 202,051 -- -- -- -- -- 202,051
NET ASSETS AVAILABLE FOR
PLAN PARTICIPANTS $ 21,575,781 $ 1,783,266 $ 3,354,620 $ 9,406,239 $ 4,598,990 $ 7,873,561 $ 48,592,457
The accompanying notes to financial statements are an
integral part of this statement.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the Year Ended December 31, 1996
INCOME FEDERAL EQUITY NEW COMPANY
FUNDS ACCOUNT INCOME MUTUAL INDEX DIMENSIONS STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Interest Income $ 789,013 $ 12,903 $ 24,138 $ 27,141 $ 35,951 $ 38,660 $ 927,806
Dividends -- 122,245 434,850 -- 334,070 116,554 1,007,719
Securities Transactions:
Proceeds 14,959,684 718,802 1,029,238 1,777,349 1,038,177 4,503,918 24,027,168
Aggregate Adjusted Cost
(Weighted Average Basis) 14,843,581 731,738 1,004,693 1,634,643 957,037 4,271,577 23,443,269
Net Gain (Loss) 116,103 (12,936) 24,545 142,706 81,140 232,341 583,899
Changes in Unrealized Appreciation/
Depreciation of Investments 459,809 (25,593) 73,355 1,988,416 955,002 2,669,086 6,120,075
FROM CONTRIBUTION AND PAYMENT ACTIVITIES:
Employer Contributions,net of forfeitures 464,391 151,618 324,069 344,517 479,809 251,896 2,016,300
Employee Contributions 1,512,647 534,553 1,121,883 1,194,448 1,732,824 879,932 6,976,287
Employee Transfers (1,634,340) (81,058) 191,450 282,438 1,877,952 (636,442) --
Amounts Withdrawn by Participants (2,146,177) (214,915) (467,175) (969,150) (728,142 (782,479) (5,308,038)
Change in Net Assets Available
for Plan Participants (438,554) 486,817 1,727,115 3,010,516 4,768,606 2,769,548 12,324,048
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS, BEGINNING BALANCE 21,575,781 1,783,266 3,354,620 9,406,239 4,598,990 7,873,561 48,592,457
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS, ENDING BALANCE $21,137,227 $2,270,083 $5,081,735 $12,416,755 $ 9,367,596 $10,643,109 $60,916,505
The accompanying notes to financial statements are an
integral part of this statement.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the Year Ended December 31, 1995
INCOME FEDERAL EQUITY NEW COMPANY
FUNDS ACCOUNT INCOME MUTUAL INDEX DIMENSIONS STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Interest Income $ 1,122,917 $ 10,096 $ 18,061 $ 20,033 $ 23,100 $ 34,596 $1,228,803
Dividends -- 65,815 121,936 -- 180,568 116,551 484,870
Securities Transactions:
Proceeds 8,284,162 280,007 430,239 1,435,758 405,650 1,646,973 12,482,789
Aggregate Adjusted Cost
(Weighted Average Basis) 8,161,651 273,642 401,317 1,223,681 357,307 1,642,150 12,059,748
Net Gain 122,511 6,365 28,922 212,077 48,343 4,823 423,041
Changes in Unrealized Appreciation
of Investments 269,569 55,564 263,192 2,186,211 493,185 2,822,198 6,089,919
FROM CONTRIBUTION AND PAYMENT ACTIVITIES:
Employer Contributions,net of forfeitures 547,959 187,363 354,748 282,660 442,295 228,691 2,043,716
Employee Contributions 1,896,647 627,755 1,129,910 1,014,653 1,429,228 740,023 6,838,216
Employee Transfers (1,833,389) 336,762 508,247 146,786 830,223 11,371 --
Amounts Withdrawn by Participants (2,477,864) (145,568) (212,006) (992,249) (230,913) (804,547) (4,863,147)
Change in Net Assets Available
for Plan Participants (351,650) 1,144,152 2,213,010 2,870,171 3,216,029 3,153,706 12,245,418
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS, BEGINNING BALANCE 21,927,431 639,114 1,141,610 6,536,068 1,382,961 4,719,855 36,347,039
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS, ENDING BALANCE $21,575,781 $1,783,266 $3,354,620 $9,406,239 $ 4,598,990 $7,873,561 $48,592,457
The accompanying notes to financial statements are an
integral part of this statement.
F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the Year Ended December 31, 1994
INCOME FEDERAL EQUITY NEW MONEY COMPANY
FUNDS ACCOUNT INCOME MUTUAL INDEX DIMENSIONS EQUITY MARKET STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Interest Income $ 1,350,154 $ 3,809 $ 7,451 $ 7,098 $ 8,622 $ 23,523 $ 20,958 $ 21,790 $1,443,405
Dividends 132,893 6,536 51,927 83,360 48,388 40,439 -- 116,999 480,542
Securities Transactions:
Proceeds 1,755,381 16,681 20,660 705,526 79,340 5,674,096 -- 354,147 8,605,831
Aggregate Adjusted Cost
(Weighted Average Basis) 1,752,741 16,773 20,989 683,828 81,448 6,034,489 -- 401,331 8,991,599
Net Gain (Loss) 2,640 (92) (329) 21,698 (2,108) (360,393) -- (47,184) (385,768)
Transfer of assets 1,193,234 -- -- 6,391,343 -- (6,391,343)(1,193,234) -- --
Changes in Unrealized
Appreciation/Depreciation
of Investments (5,112) (4,159) (59,844) 157,474 (46,497) -- -- (1,452,213) (1,410,351)
FROM CONTRIBUTION AND
PAYMENT ACTIVITIES:
Employer Contributions,
net of forfeitures 786,443 101,758 193,085 126,891 226,043 268,677 41,134 338,212 2,082,243
Employee Contributions 2,657,127 305,678 554,195 453,269 653,122 1,041,770 146,614 1,085,213 6,896,988
Employee Transfers (361,642) 234,143 405,594 (393,367) 510,408 321,694 (128,107) (588,723) --
Amounts Withdrawn by (2,733,141) (8,559) (10,469) (311,698) (15,017) (639,434) (109,169) (742,202) (4,569,689)
Participants
Change in Net Assets
Available for Plan
Participants 3,022,596 639,114 1,141,610 6,536,068 1,382,961 (5,695,067)(1,221,804)(1,268,108) 4,537,370
NET ASSETS AVAILABLE
FOR PLAN PARTICIPANTS,
BEGINNING BALANCE 18,904,835 0 0 0 0 5,695,067 1,221,804 5,987,963 31,809,669
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS, ENDING BALANCE$21,927,431 $639,114 $1,141,610 $6,536,068 $1,382,961 $ 0 $ 0 $4,719,855 $36,347,039
The accompanying notes to financial statements are an
integral part of this statement.
F-7
</TABLE>
<PAGE>
LIZ CLAIBORNE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1) Description of the Plan:
The Liz Claiborne Savings Plan (as amended, the "Plan") was adopted by Liz
Claiborne, Inc. (the "Company") effective January 1, 1985. An administrative
committee (the "Administrative Committee") has been appointed by the Board of
Directors of the Company to supervise the administrative and investment
operations of the Plan. Administrative expenses are paid by the Company. The
Plan is a trusteed, defined contribution plan subject to the reporting and
disclosure requirements, participation and vesting standards, and fiduciary
responsibility provisions of the Employee Retirement Income Security Act of
1974,as amended ("ERISA"). The provisions of the Plan comply with the
requirements of ERISA.
Employees of the Company and certain of its wholly-owned subsidiaries
who are not covered by certain collective bargaining agreements become
eligible to participate in the Plan on the first of the month after they
have attained the age of 21, have completed 12 consecutive months
of service and have worked at least 1,000 hours during those 12 months.
The Plan provides for contributions by the participating employees of
amounts ranging from 1% to 15% of compensation, as defined in the Plan,
and for contributions by the Company, which includes for purposes
hereof, the Company and certain of its wholly-owned subsidiaries, equal
to 50% of each participant's contributions, limited to the first 5% of
compensation contributed. Participants' contributions are made at the
option of each employee, except that certain participants may be
restricted as to the amount of the contribution pursuant to the
provisions of the Internal Revenue Code, as amended (the "Code").
The participants have access to their account information through a
toll-free number and the ability to obtain current account balances,
change contribution rates or investment elections, request a loan or
receive specific information about fund performance on a daily basis.
Participants may suspend elective contributions and enroll again at any
time as long as they are eligible employees.
Participants become vested in their Company matching contribution
account based on their number of years of service with the Company. The
vesting schedule is as follows:
Years of service Vested
with the Company Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
F-8
<PAGE>
Participants' interest in their Company matching contribution account is
fully vested and nonforfeitable in the event of death, disability or
retirement at or after Normal Retirement Date (age 65).
The portion of a participant's Company matching contribution account
balance which is not vested at the time of separation of service with
the Company is retained in the Plan. Pursuant to the terms of the Plan
document, these forfeitures are used to offset any employer
contributions for the current year or in the next succeeding year. For
the years ended December 31, 1996, 1995 and 1994, forfeitures amounted
to $194,582, $202,051 and $276,623, respectively.
Upon termination of employment, the value of a participant's vested
account is payable in stock of the Company, or in cash, or the
participant may elect to roll it over to an IRA or a future employer's
plan. At the participant's election, such distribution may be requested
immediately, or (i) if the balance is less than $3,500, distribution
will be processed by December 31 of that year, or (ii) if the account
balance is in excess of $3,500, in equal installments over a period from
two to ten years, or (iii) if the account balance is in excess of $3,500
and the participant reaches age 65, distribution will be processed for
December 31 of that year.
As allowed under Internal Revenue Service rules, participants may
withdraw funds from their account while employed if needed to satisfy an
immediate and heavy financial need. Any amount withdrawn will be subject
to income taxes and may be subject to an additional tax based on early
withdrawal.
Active participants may borrow up to 50% of their vested account balance
and have multiple loans outstanding at one time. The minimum loan amount
is $1,000 and the maximum amount is $50,000. The interest rate
applicable to a loan is the prime rate at the time the loan is granted
plus one percent. The rate in effect on December 31, 1996 was 9.25%.
The participant has a choice of repaying the loan over a period between
12 to 54 months. Participants repay their loans through payroll
deductions. In addition, any outstanding principal balance may be repaid
in full on any business day. Upon termination of employment, the
participant must repay the outstanding principal balance in full. In the
event the loan is not repaid in full, it is treated as a taxable
distribution.
American Express Trust Company became the Plan's trustee and
recordkeeper on July 1, 1994. Prior to that date, the trustee was First
Fidelity Bank, N.A. and the recordkeeper was Buck Consultants.
(2) Investment programs:
Each employee may direct American Express Trust Company to invest their
contributions in one or more of the following investment funds:
Liz Claiborne Income Account - A fund consisting of fixed income
contracts issued by insurance companies, previously purchased by the
Plan, and investments in the American Express Trust Income Fund II. The
fund's investment goal is to preserve principal while maximizing current
income. The American Express Trust Income Fund II is a collective
investment fund managed by American Express Trust Company. It invests
mainly in fixed income contracts issued by insurance companies and
banks, and other stable value contracts.
F-9
<PAGE>
The last contract purchased by the Plan will mature on October 20, 1997
and when it matures, the entire fund will consist solely of an
investment in the American Express Trust Income Fund II.
The rate of return on each participant's investment in the Liz Claiborne
Income Account Fund is based on the mix of rates provided by the
different contracts purchased by the Plan and the contracts and
investments in the American Express Trust Income Fund II.
IDS Federal Income - A diversified income mutual fund managed by
American Express Trust Company which generally invests at least 65% of
its assets in U.S. government and government agency securities. The fund
may also invest in options on governmental securities, pools of mortgage
loans issued by financial or non-governmental mortgage institutions,
non-governmental mortgage related securities and debt, and cash and cash
equivalents. The fund's investment goal is to seek a high level of
current income and safety of principal consistent with investments in
U.S. government and government agency securities.
IDS Mutual - A diversified mutual fund managed by American Express Trust
Company which invests in a balance of common stocks and senior
securities (preferred stocks and debt securities), convertible
securities, derivative instruments and money market instruments issued
by U.S. and foreign companies. The fund's investment goal is to provide
a balance of growth of capital and current income. No more than 65% of
the fund's assets may be invested in common stocks and no less than 35%
in senior securities, convertible securities, derivative instruments and
money market instruments.
American Express Trust Equity Index II - A fund managed by American
Express Trust Company which invests primarily in common stock of U.S.
companies upon which the Standard & Poor's 500 Stock Index is based. The
fund's investment goal is to achieve a total rate of return as close as
possible to that of Standard & Poor's 500 Index. This fund is a
collective investment fund which invests primarily in the American
Express Equity Index Base Fund. The fund may also invest in high-quality
money market securities and stock index futures contracts.
IDS New Dimensions - A diversified mutual fund managed by American
Express Trust Company that invests primarily in common stocks of U.S.
and foreign companies which the fund's manager believes to show
potential for significant growth. The fund's investment goal is to
provide long-term growth of capital. The fund also invests in preferred
stocks, debt securities, derivative instruments and money market
instruments.
Liz Claiborne Company Stock - The fund's investment goal is to provide
participants with a way to invest in Liz Claiborne, Inc. The Plan
Trustee buys shares of Liz Claiborne, Inc. common stock at current
market prices on the New York Stock Exchange. The Company's contribution
may also be made directly to the Plan in shares of Liz Claiborne, Inc.
common stock (Note 8)
A portion of any of the Plan's investment funds may consist of
short-term interest bearing accounts to meet the distribution needs or
administrative requirements of the Plan. The Company will generally make
contributions to the Trustee as soon as administratively practicable
after each biweekly pay date.
F-10
<PAGE>
(3) Investments:
Investments are carried at market value, with the exception of
Guaranteed Investment Contracts held by the Liz Claiborne Income Account
Fund which are carried at contract value which equals market value.
Security transactions are recorded on a settlement date basis. The
difference resulting from the recording of transactions between trade
date and settlement date was not material. Dividend income is recorded
at the ex-dividend date. Income from other investments is recorded as
earned on an accrual basis.
The market value of individual investments that represent 5% or more of
the Plan's total net assets available for plan participants as of
December 31, 1996 and 1995 are as follows:
1996 1995
Metropolitan Life-Fixed Income Contracts $ 6,167,924 $5,798,239
John Hancock Life-Fixed Income Contract -- 4,843,771
New York Life-Fixed Income Contract -- 4,898,797
American Express Trust Income Fund II 14,595,194 5,664,603
IDS Mutual 4,740,770 3,060,558
American Express Trust Equity Index II 11,986,514 9,064,721
IDS New Dimensions 8,786,923 4,056,761
Liz Claiborne, Inc. Common Stock 9,854,744 7,278,575
The Company and certain of its officers and directors are parties to
several pending legal proceedings and claims. Although the effect of
such litigation cannot be determined with certainty, management of the
Company is of the opinion that the final outcome should not have a
material adverse effect on the Company's results of operations or
financial position or on the Plan's net assets.
(4) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates
and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(5) Valuation of accounts:
Participant's accounts are stated at market value at the end of each
business day. In addition an investment adjustment reflecting accrued
earnings is determined for each investment fund and is allocated among
accounts entitled to share in the adjustment.
(6) Realized and unrealized gains and losses
Realized and unrealized gains and losses on plan assets are based on the
value of the assets at the beginning of the plan year or at the time of
purchase during the year.
(7) Federal income taxes:
On behalf of the Plan, the Company has received a favorable
determination letter, dated March 4, 1996, from the Internal Revenue
Service to the effect that the Plan is qualified under Section 401 of
the Internal Revenue Code. Since the Plan is qualified, participants are
not taxed on contributions or on the related earnings until they receive
distributions from the Plan or default on their loan repayments.
Additionally, the Plan is not taxed on its dividend and interest income
or any capital gains whether realized or unrealized.
F-11
<PAGE>
(8) Plan termination:
The Plan may be terminated at any time at the Company's sole discretion.
Upon termination, contributions by the Company and participants cease
and all Company contributions which had been credited to each
participant's account would fully vest. At this time, management has no
intention to terminate the Plan.
(9) Related party transactions:
The members of the Plan's Administrative Committee currently serve in
the following respective positions: Chairman of the Board and Chief
Executive Officer; and Senior Vice President- Finance and Chief
Financial Officer. One of the investment funds of the Plan invests
exclusively in shares of the Company's Common Stock (Note 2). The Plan
owned 255,139 shares of Common Stock at December 31, 1996, with a cost
based on beginning market value of $7,188,164 and a market value of
$9,854,744 and at December 31, 1995, owned 262,291 shares of Common
Stock with a cost based on beginning market value of $4,456,514 and a
market value of $7,278,575.
(10) Reconciliation to Form 5500:
As of December 31, 1996 and 1995, there was $2,218,460 and $1,166,681,
respectively, of vested benefits payable to terminated participants that
were paid in the first quarter of 1997 and 1996, respectively. These
amounts are recorded as liabilities in the Plan's Form 5500; however,
these amounts are not recorded as liabilities in the accompanying
statements of net assets available for plan participants in accordance
with generally accepted accounting principles.
The following table reconciles net assets available for plan
participants per the accompanying financial statements to the Form 5500
to be filed by the Company for the year ended December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
Net Assets Net Assets
Benefits Available for Available for
Paid Plan Benefits Plan Benefits
<S> <C> <C> <C>
Per financial statements $5,308,038 $60,916,505 $48,592,457
Accrued benefit payments 2,218,460 (2,218,460) (1,166,681)
Reversal of 1995 accrual for
benefit payments (1,166,681) -- --
Per Form 5500 $6,359,817 $58,698,045 $47,425,776
</TABLE>
As of December 31, 1996 and 1995, there was approximately $15,227,000
and $9,983,000, respectively, of vested benefits payable to terminated
participants.
(11) Other Information:
There were no loans, fixed income obligations or leases which were
either in default or classified as uncollectible during the years ended
December 31, 1996, 1995 and 1994.
F-12
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Schedule of Investments SCHEDULE I
As of December 31, 1996
COST BASED
SHARES OR ON BEGINNING MARKET
FUNDS UNITS MARKET VALUE VALUE
<S> <C> <C> <C>
INCOME ACCOUNT
Metropolitan Life 6,167,924 $ 6,167,924 $ 6,167,924
American Express Trust Income Fund II 889,809 14,135,385 14,595,194
20,303,309 20,763,118
IDS Federal Income 423,022 2,131,818 2,106,225
IDS Mutual 351,741 4,667,415 4,740,770
American Express Trust Equity Index II 614,535 9,998,098 11,986,514
IDS New Dimensions 424,325 7,831,921 8,786,923
COMPANY STOCK
Liz Claiborne, Inc. Common Stock 255,139 7,188,164 9,854,744
American Express Trust Money Market 439,617 439,617 442,123
7,627,781 10,296,867
Total Investments $52,560,342 $58,680,417
Loans to Participants, at interest rates ranging from 7% to 10% $ 2,582,265 $ 2,582,265
</TABLE>
EXHIBIT 24
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 Liz Claiborne, Inc.'s previously filed
Registration Statement on Form S-8 File No.
2-95258.
Arthur Andersen LLP
New York, New York
June 27, 1997
<PAGE>
