<TABLE>
<CAPTION>
<S> <C>
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, 1998
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)
</TABLE>
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
See Index to Financial Statements and Schedule at page 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)Amendment No. 8 to the Savings Plan is incorporated herein by reference
from Exhibit 10(e)(v) to the Company's Annual Report on Form 10-K for the
year ended January 3, 1998.
10(h)Amendment No. 9 to the Savings Plan incorporated herein by reference from
Exhibit 10(f) to the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1999.
10(i)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/ Richard F. Zannino
Richard F. Zannino
Member of Administrative
Committee
June 29, 1999
<PAGE>
LIZ CLAIBORNE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 2
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Participants
as of December 31, 1998 and 1997 3 to 4
Statements of Changes in Net Assets Available for Plan
Participants for the Years Ended December 31, 1998,
1997 and 1996 5 to 7
NOTES TO FINANCIAL STATEMENTS 8 to 13
SUPPLEMENTAL SCHEDULE:
Schedule I. Investments 14
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.
<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,
1998 and 1997, 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,
1998. 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 and schedule 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, 1998 and 1997, and the changes in net assets available
for plan participants for each of the three years in the period ended December
31, 1998, 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 supplemental 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.
/s/Arthur Andersen LLP
New York, New York
June 25, 1999
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Net Assets Available for Plan Participants
As of December 31, 1998
AMER EXP IDS FED IDS AMER EXP IDS NEW OPPEN TEMPLETON LIZ CO SELF
FUNDS INCOME INCOME MUTUAL EQUITY INDEX DIMENSIONS DISCOVERY FOREIGN STOCK DIRECT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Cash ............$ 65,300 $ 23,234 $ 46,228 $ 82,914 $ 82,595 $ 17,302 $ 10,303 $ 46,038 $ 0 $ 373,914
Investments,
at market value..19,583,440 3,787,408 7,236,561 21,541,715 16,641,539 1,116,982 1,228,342 8,224,719 857,952 80,218,658
Accrued dividends
and interest ... -- -- -- -- -- -- -- 1,086 -- 1,086
Loans to
participants... 719,070 165,467 298,470 516,344 616,723 64,514 36,195 353,551 -- 2,770,334
----------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- -------- -----------
TOTAL PLAN
ASSETS ... .. 20,367,810 3,976,109 7,581,259 22,140,973 17,340,857 1,198,798 1,274,840 8,625,394 857,952 83,363,992
----------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- -------- -----------
PLAN LIABILITIES
Due to Plan
Sponsor-
forfeitures 83,050 -- -- -- -- -- -- -- -- 83,050
----------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- -------- -----------
TOTAL PLAN
LIABILITIES 83,050 -- -- -- -- -- -- -- -- 83,050
----------- ---------- ---------- ----------- ----------- ---------- ---------- ---------- -------- -----------
NET ASSETS
AVAILABLE FOR
PLAN
PARTICIPANTS $20,284,760 $3,976,109 $7,581,259 $22,140,973 $17,340,857 $1,198,798 $1,274,840 $8,625,394 $857,952 $83,280,942
=========== ========== ========== =========== =========== ========== ========== ========== ======== ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Net Assets Available for Plan Participants
As of December 31, 1997
LIZ INC IDS FED IDS AMER EXP IDS NEW OPPEN TEMPLETON LIZ CO
FUNDS INCOME INCOME MUTUAL EQUITY INDEX DIMENSIONS DISCOVERY FOREIGN STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Cash ..........................$ 67,896 $ 21,448 $ 48,377 $ 73,358 $ 88,444 $ 10,476 $ 10,264 $ 53,199 $ 373,462
Investments, at market value... 20,433,019 2,792,666 6,211,052 16,193,963 12,326,985 543,670 952,983 10,650,387 70,104,725
Accrued dividends and interest -- -- -- -- -- -- -- 2,694 2,694
Loans to participants .......... 736,540 174,220 327,506 492,227 662,044 48,162 42,237 387,738 2,870,674
---------- ---------- ---------- ----------- ----------- -------- ---------- ----------- -----------
TOTAL PLAN ASSETS ........... 21,237,455 2,988,334 6,586,935 16,759,548 13,077,473 602,308 1,005,484 11,094,018 73,351,555
----------- ---------- ---------- ----------- ----------- -------- ---------- ----------- -----------
PLAN LIABILITIES
Due to Plan Sponsor-forfeitures 545,095 -- -- -- -- -- -- -- 545,095
---------- ---------- ---------- ----------- ----------- -------- ---------- ----------- -----------
TOTAL PLAN LIABILITIES ........ 545,095 -- -- -- -- -- -- -- 545,095
--------- ---------- ---------- ----------- ----------- -------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR
PLAN PARTICIPANTS .........$20,692,360 $2,988,334 $6,586,935 $16,759,548 $13,077,473 $602,308 $1,005,484 $11,094,018 $72,806,460
=========== ========== ========== =========== =========== ======== ========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the year ended December 31, 1998
AMER EXP IDS FED IDS AMER EXP IDS NEW OPPEN TEMPLETON LIZ CO SELF
FUNDS INCOME INCOME MUTUAL EQUITY INDEX DIMENSIONS DISCOVERY FOREIGN STOCK DIRECT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Interest Income .... $ 58,691 $ 13,665 $ 24,073 $ 42,414 $ 49,475 $ 5,933 $ 4,067 $ 47,048 $ 577 $ 245,943
Dividends ....... 948 235,221 967,745 9 962,361 33,950 126,198 106,571 27,533 2,460,536
Securities Transactions:
Proceeds ........ 25,915,795 1,422,056 1,378,726 3,327,772 2,810,909 229,405 365,274 9,470,035 866,517 45,786,489
Aggregate Cost
(Weighted
Average Basis) 25,633,536 1,415,293 1,351,981 3,020,479 2,569,387 245,516 367,926 9,026,563 868,010 44,498,691
----------- --------- --------- ---------- ---------- --------- --------- --------- ------- ----------
Net Gain (Loss) .. 282,259 6,763 26,745 307,293 241,522 (16,111) (2,652) 443,472 (1,493) 1,287,798
--------- ---------- --------- ---------- ---------- --------- --------- --------- ------- ----------
Changes in
Unrealized
Appreciation/
(Depreciation)
of Investments .. 879,577 (23,131) (381,077) 4,379,687 2,446,119 (44,540) (192,918)(2,343,625) 34,767 4,754,859
CONTRIBUTION AND PAYMENT ACTIVITIES:
Employer Contributions,
net of forfeitures 357,810 115,622 276,998 434,420 459,864 76,762 63,285 267,264 0 2,052,025
Employee
Contributions . 1,224,674 445,197 939,793 1,738,506 1,776,831 330,530 250,757 963,122 0 7,669,410
Employee Transfers (1,006,271) 544,198 (133,796) 729,489 (230,552) 274,721 91,469 (1,065,826) 796,568 0
Amounts Withdrawn
by Participants...(2,205,288) (349,760) (726,157) (2,250,393) (1,442,236) (64,755) (70,850) (886,650) 0 (7,996,089)
---------- -------- -------- ---------- ---------- ------- -------- ------- ------- ----------
Change in Net
Assets Available
for Plan
Participants (407,600) 987,775 994,324 5,381,425 4,263,384 596,490 269,356 (2,468,624) 857,952 10,474,482
NET ASSETS AVAILABLE FOR PLAN
PARTICIPANTS,
BEGINNING BALANCE 20,692,360 2,988,334 6,586,935 16,759,548 13,077,473 602,308 1,005,484 11,094,018 0 72,806,460
----------- ---------- --------- ---------- ---------- ------- --------- ---------- ------- -----------
NET ASSETS
AVAILABLE FOR PLAN
PARTICIPANTS,
ENDING BALANCE ...$20,284,760 $3,976,109 $7,581,259 $22,140,973 $17,340,857 $1,198,798 $1,274,840 $8,625,394 $857,952 $83,280,942
=========== ========== ====================== =========== ========== ========== ========== ======== ===========
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the year ended December 31, 1997
AMER EXP IDS FED IDS AMER EXP IDS NEW OPPEN TEMPLETON LIZ CO
FUNDS INCOME INCOME MUTUAL EQUITY INDEX DIMENSIONS DISCOVERY FOREIGN STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
INVESTMENT ACTIVITIES:
Interest Income ..$372,651 $ 13,726 $ 26,708 $ 39,045 $ 49,788 $ 2,727 $ 4,186 $ 52,182 $ 561,013
Dividends ..... 0 147,829 885,353 0 919,052 11,218 99,893 108,542 2,171,887
Securities Transactions:
Proceeds ......12,235,293 915,376 1,037,557 2,859,795 1,936,763 236,154 322,942 6,235,501 25,779,381
Aggregate Cost
(Weighted Average
Basis) ......12,104,897 909,548 967,492 2,515,751 1,745,814 241,662 308,231 6,001,487 24,794,882
------------ ----------- ----------- ------------ ------------ --------- ----------- ------------ ------------
Net Gain (Loss) .130,396 5,828 70,065 344,044 190,949 (5,508) 14,711 234,014 984,499
------- ----------- ----------- ------------ ------------ --------- ----------- ------------ ------------
Changes in Unrealized
Appreciation/
(Depreciation)
of Investments . 769,340 35,147 (6,413) 3,585,529 1,215,714 20,804 (94,492) 626,036 6,151,665
CONTRIBUTION AND PAYMENT ACTIVITIES:
Employer
Contributions,
net of forfeitures 343,665 96,914 262,536 276,807 403,077 38,478 46,911 204,062 1,672,450
Employee
Contributions 1,415,234 410,911 990,276 1,422,793 1,888,531 159,906 179,197 1,028,621 7,495,469
Employee
Transfers .. (1,369,873) 324,172 (139,612) 294,074 48,657 393,257 927,110 (477,785) 0
Amounts Withdrawn
by Participants 2,106,280) (316,276) (583,713) (1,619,499) (1,005,891) (18,574) (172,032) (1,324,763) (7,147,028)
---------- ----------- ----------- ------------ ------------ --------- ----------- ------------ ------------
Change in Net
Assets Available
for Plan
Participants (444,867) 718,251 1,505,200 4,342,793 3,709,877 602,308 1,005,484 450,909 11,889,955
NET ASSETS AVAILABLE
FOR PLAN
PARTICIPANTS,
BEGINNING
BALANCE 21,137,227 2,270,083 5,081,735 12,416,755 9,367,596 0 0 10,643,109 60,916,505
------------ ----------- ----------- ------------ ------------ --------- ----------- ------------ ------------
NET ASSETS AVAILABLE
FOR PLAN
PARTICIPANTS,
ENDING BALANCE $20,692,360 $2,988,334 $6,586,935 $ 16,759,548 $ 13,077,473 $ 602,308 $ 1,005,484 $ 11,094,018 $ 72,806,460
=========== =========== =========== ============ ============ ========= =========== ============ ============
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Participants
For the year ended December 31, 1996
LIZ INC IDS FED IDS AMER EXP IDS NEW LIZ CO
FUNDS INCOME INCOME MUTUAL EQUITY INDEX DIMENSIONS STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Interest Income .............. $ 789,013 $ 12,903 $ 24,138 $ 27,141 $ 35,951 $ 38,660 $ 927,806
Dividends .................... 0 122,245 434,850 0 334,070 116,554 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 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
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) 0
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.
</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. The Company pays all administrative expenses incurred by
the Plan. 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 ("ERISA"), as amended. The provisions of the Plan comply with the
requirements of ERISA. The Plan trustee and recordkeeper is American Express
Trust Company.
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 age
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%
Participants' interest in their Company matching contribution account is fully
vested and non-forfeitable 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, 1998, 1997 and
1996, forfeitures amounted to $313,512, $710,166 and $194,582, respectively.
<PAGE>
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 $5,000, distribution will be processed in the next quarter
following the participant's separation from the employer, or (ii) if the account
balance is in excess of $5,000, payments can be requested over a period from two
to ten years, or (iii) if the account balance is in excess of $5,000 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, 1998 was 8.750%.
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.
The financial statements and accounts of the Plan are prepared using the accrual
method of accounting.
The preceding description of the Liz Claiborne Savings Plan provides only
general information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(2) Investment programs:
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.
Each employee may direct American Express Trust Company to invest their
contributions and their matching contributions in one or more of the following
investment funds:
American Express Trust Income Fund II
A collective investment fund managed by American Express Trust Company that
invests mainly in fixed income contracts issued by insurance companies and
banks, and other stable value contracts. The fund's investment goal is to
preserve principal while maximizing current income. The fund had 1,497 and 1,695
participants at December 31, 1998 and 1997, respectively.
IDS Federal Income
A diversified income mutual fund managed by American Express Financial
Corporation 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. The fund
had 769 and 796 participants at December 31, 1998 and 1997, respectively.
IDS Mutual
A diversified mutual fund managed by American Express Financial Corporation
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. The fund had 1,397 and 1,489
participants at December 31, 1998 and 1997, respectively.
<PAGE>
American Express Trust Equity Index II
A collective 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. The fund had 1,842 and 1,862
participants at December 31, 1998 and 1997, respectively.
IDS New Dimensions
A diversified mutual fund managed by American Express Financial Corporation 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. The fund had 1,742 and 1,809 participants at December 31, 1998 and
1997, respectively.
Oppenheimer Discovery
An aggressive growth fund managed by Oppenheimer Funds that invests primarily in
common stocks of medium sized companies involved in new technologies and
companies with new or innovative products and services. The fund's investment
goal is to achieve long-term growth of capital. The fund had 446 and 275
participants at December 31, 1998 and 1997, respectively.
Templeton Foreign
An international specialty growth fund managed by the Franklin Templeton Group
that invests primarily in common stock of companies outside the United States,
preferred stocks and certain debt securities. The fund's investment goal is to
achieve long-term capital growth. The fund had 385 and 322 participants at
December 31, 1998 and 1997, respectively.
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 9). The fund had 1,595 and 1,742 participants at
December 31, 1998 and 1997, respectively.
Self Directed Brokerage Account
Effective April 1, 1998, participants are permitted to invest funds under the
Plan in a Self-Directed Brokerage Account that allows them access to more than
200 mutual funds from eleven mutual fund families. Initially, a $3,000 minimum
amount is required to open an account, which will be transferred from current
account balances in the Plan. Once the account is opened, all future transfers
to the account must be at least $500 and must be transferred from a
participant's other investment funds in the Plan. Deferrals may not be deposited
directly into the account and direct withdrawals and loans are prohibited.
Transfers from the Self-Directed Brokerage Account to the Plan will be deposited
into the American Express Trust Income Fund. An administrative fee of $75 is
charged by American Express to the participant when the account is opened.
Participants may incur penalties for early redemptions of a mutual fund that is
not held for 90 days (except in the case of IDS funds). The fund had 13
participants at December 31, 1998.
<PAGE>
(3) Investments:
Investments are carried at 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, 1998
and 1997 were as follows:
1998 1997
American Express Trust Income Fund II $ 19,583,440 $ 20,433,019
IDS Mutual 7,236,561 6,211,052
American Express Trust Equity Index II 21,541,715 16,193,963
IDS New Dimensions 16,641,539 12,326,985
Liz Claiborne, Inc. Common Stock 8,080,600 10,388,107
(4) 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 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:
Participants' 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 determined 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. The Plan
has been amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the Internal Revenue Code.
<PAGE>
(8) Plan termination:
The Plan may be terminated at any time at the Company's sole discretion subject
to the provisions of ERISA. Upon termination, contributions by the Company and
participants cease and all Company contributions that 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; Senior Vice President Finance and Administration, Chief Financial
Officer; Vice President, Treasury and Investor Relations and Vice President,
Cash and Risk Management. One of the investment funds of the Plan invests
exclusively in shares of the Company's Common Stock (Note 2). The Plan owned
256,019 shares of Common Stock at December 31, 1998, with a cost based on
beginning market value of $10,424,225 and a market value of $8,080,600 and at
December 31, 1997, owned 248,445 shares of Common Stock with a cost based on
beginning market value of $9,759,653 and a market value of $10,388,107. Certain
plan investments are units of income funds managed by American Express Trust
Company. The American Express Trust Company is the trustee as defined by the
Plan and therefore, the investments qualify as party-in-interest.
(10) Reconciliation to Form 5500:
As of December 31, 1998 and 1997, there was $2,230,407 and $1,267,818,
respectively, of vested benefits payable to terminated participants that were
paid in the first quarter of 1999 and 1998, 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 years ended December 31, 1998 and 1997:
1998 1997
1998 Net Assets Net Assets
Benefits Available for Available for
Paid Plan Benefits Plan Benefits
Per financial statements $7,996,089 $83,280,942 $72,806,460
Accrued benefit payments 2,230,407 (2,230,407) (1,267,818)
Reversal of 1997 accrual for
benefit payments (1,267,818) -- --
Per Form 5500 $8,958,678 $81,050,535 $71,538,642
As of December 31, 1998 and 1997, there was approximately $24,923,000 and
$17,758,000, respectively, of vested benefits payable to terminated
participants.
(11) Other Information:
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.
<PAGE>
<TABLE>
<CAPTION>
LIZ CLAIBORNE SAVINGS PLAN
SCHEDULE OF INVESTMENTS
AS OF DECEMBER 31, 1998
NUMBER OF COST BASED CURRENT
FUNDS SHARES ON BEG MKT VALUE
<S> <C> <C> <C>
American Express Trust Income II* 1,061,894 $18,703,863 $19,583,440
IDS Federal Income* 750,725 3,810,539 3,787,408
IDS Mutual* 555,633 7,617,638 7,236,561
American Express Trust Equity Index II* 648,730 17,162,028 21,541,715
IDS New Dimensions* 576,930 14,195,420 16,641,539
Oppenheimer Discovery 24,517 1,161,522 1,116,982
Templeton Foreign 146,406 1,421,260 1,228,342
Liz Claiborne Company Stock
Liz Claiborne, Inc. Common Stock* 256,019 10,424,225 8,080,600
American Express Trust Money Market* 144,119 144,119 144,119
---------------- ----------------
10,568,344 8,224,719
---------------- ----------------
Self Directed Brokerage Account
Dreyfus Laurel 907 29,047 30,085
Dreyfus Small Company Value 1,599 37,918 31,583
Dreyfus Emerging Leaders 215 6,010 5,736
Dreyfus Appreciation 1,764 60,939 74,219
Invesco Dynamics 363 5,500 5,718
Invesco International 4,981 40,263 36,015
Invesco Income 9,448 69,743 60,842
Invesco Strategic Fixed 1,723 54,264 50,288
Invesco Strategic Portfolio Equity 188 2,001 1,901
Invesco Strategic Portfolio Fixed 109 6,344 6,651
Invesco Strategic Portfolio Short Term 187 5,500 6,544
Janus Investment Equity 2,998 115,884 159,027
Janus Investment Fixed 821 21,081 23,891
Janus Investment Balanced 877 15,278 17,208
Janus Overseas 2,847 59,398 57,170
Janus Flex Income 3,868 38,753 38,484
Janus World Wide 185 8,533 8,773
American Century Equity 544 11,381 12,349
American Century Income & Growth 250 6,804 7,301
American Century Ultra Investors 1,391 43,925 46,480
Strong Conservative Equity 142 2,149 2,385
Strong Schafer Value 260 15,094 15,415
Strong Short Term 2,646 25,863 25,372
Scudder International 516 13,091 13,702
Scudder Growth & Income 1,354 40,655 35,630
Stein Roe Intermediate 4,625 41,522 41,118
Neurberger & Berman Partners 1,997 38,823 36,077
Warburg Pincus Emerging Growth 189 6,975 7,541
Cash Reserve Fund 447 447 447
---------------- ----------------
823,185 857,952
---------------- ----------------
$75,463,799 $80,218,658
================ ================
Loans to participants, at interest rates ranging from 7% to 10%
and maturity dates to 6/2003 $2,770,334 $2,770,334
================ ================
* Represents a party in interest in the Plan
</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.
/s/Arthur Andersen LLP
New York, New York
June 29, 1999
