UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM 11-K
(Mark One)
|X|ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1999
-----------------------------------
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _____________________ to _____________________
Commission file number 1-6853
A. Full title of the plan:
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
SHAW INDUSTRIES, INC.
P.O. Drawer 2128
Dalton, Georgia 30722-2128
<PAGE>
Shaw Industries, Inc.
Retirement Savings Plan
Financial Statements and Schedule
as of December 31, 1999 and 1998
Together With Auditors' Report
<PAGE>
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits--December 31, 1999 and
1998
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1999
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
SCHEDULE SUPPORTING FINANCIAL STATEMENTS
Schedule I: Schedule H, Line 4i -- Assets Held for Investment Purposes --
December 31, 1999
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Shaw Industries, Inc.
Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of SHAW INDUSTRIES, INC. RETIREMENT SAVINGS PLAN as of December 31,
1999 and 1998 and the related statement of changes in net assets available for
plan benefits for the year ended December 31, 1999. 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 the schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 benefits as of December
31, 1999 and 1998 and the changes in net assets available for plan benefits for
the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Atlanta, Georgia
May 26, 2000
<PAGE>
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
1999 1998
------------- -------------
ASSETS
Investments (Notes 2 and 3) ............... $445,700,764 $338,166,885
------------- -------------
Receivables:
Employee contributions ................. 0 285,503
Employer contributions ................. 0 116,620
Interest and dividend income ........... 12,444 513,306
------------- -------------
Total receivables ................ 12,444 915,429
------------- -------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ....... $445,713,208 $339,082,314
============= =============
The accompanying notes are an integral part of these statements.
<PAGE>
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
ADDITIONS:
Investment income:
Net appreciation in fair value of investments (Note 3) .. $ 15,072,361
Interest and dividends .................................. 20,411,059
-------------
Total investment income .......................... 35,483,420
-------------
Contributions:
Employee contributions .................................. 33,027,676
Employer contributions .................................. 14,489,939
Transfers from other plans (Note 1) ..................... 60,934,941
Rollovers ............................................... 498,770
-------------
Total contributions .............................. 108,951,326
-------------
Total additions .................................. 144,434,746
-------------
DEDUCTIONS:
Administrative expenses .................................... 512,107
Benefit payments to participants ........................... 37,291,745
-------------
Total deductions ................................. 37,803,852
-------------
Net increase ...................................... 106,630,894
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year .......................................... 339,082,314
-------------
End of year ................................................ $445,713,208
=============
The accompanying notes are an integral part of this statement.
<PAGE>
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS and SUPPORTING Schedule
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION AND ADMINISTRATION OF THE PLAN
The following description of the Shaw Industries, Inc. Retirement Savings
Plan (the "Plan") is provided for general information purposes only. More
complete information regarding the Plan's provisions may be found in the
plan document.
General
The Plan was adopted by the board of directors of Shaw Industries, Inc.
(the "Company") effective April 1, 1986. The Plan was formed under Sections
401(a) and 401(k) of the Internal Revenue Code ("IRC") as a defined
contribution, tax-exempt profit-sharing/savings plan. Eligible plan members
make tax-deferred contributions to the Plan, and the Company matches these
employee contributions on a percentage basis. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 , as
amended ("ERISA").
Employees are eligible to participate on the January 1, April 1, July 1, or
October 1 coinciding with or following the date they complete one year of
service with the Company.
Effective June 1 1999, the Queen Carpet Corporation 401k Plan (the "Queen
plan") was merged into the Plan as a result of the Company's acquisition of
Queen Carpet Corporation ("Queen") on October 6, 1998. Queen participants
began participating in the Plan at the merger date. Participant balances
totaling $57,663,664 were transferred into the Plan from the Queen plan.
These balances are presented on the Statement of Changes in Net Assets as
"Transfers from other plans". The remaining amount relates to smaller plans
rolled into the Plan during the year.
Contributions
Under the terms of the Plan, a participant may defer up to 15% of their
annual salary, subject to certain IRC limits on pretax deferrals. The
Company matches 50% of a participant's contribution up to 5% of their
salary and 25% on contributions greater than 5% up to 15%.
The Company matched 25% of a participant's contribution up to 15% of their
salary for the retail business unit until its disposition in August, 1998.
Participant contributions are deducted from payroll and, as directed by the
participants, are deposited in any combination of several investment
options, as long as the allocations to each of the options are in 5%
increments. The Company's contributions are directed in the same manner as
the employee's contribution.
<PAGE>
Participant Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions and related employer matching
contributions as well as an allocation of investment income and
administrative expenses.
Net investment income of each fund is determined separately by the Plan's
trustees and is allocated to the members of that fund in the same
proportion that the value of their accounts in the fund bears to the total
value of all accounts in that fund.
Vesting and Benefit Distribution
Participants are 100% vested and have nonforfeitable interests in their
contributions and subsequent investment growth. Employees are 100% vested
in the company matching contributions after three years of service unless
the Plan is terminated, in which case employees are fully vested. Employees
are also fully vested in the event of death or permanent disability. Upon
retirement at age 65, retirement at age 62 with five years of service, or
termination of employment, the balance in the participant's account will
either be paid to the participant or his designated beneficiary or rolled
over to another destination. Payment will be made either in a lump sum or
in installments over a period not to exceed ten years, at the option of the
participant. The Plan has established provisions for participants to make
withdrawals from their accounts under certain "hardship" conditions if
approved by the plan administrator, and for in-service withdrawals by
participants who have reached the age of 59 1/2.
Forfeitures
Forfeitures of nonvested company matching contributions are used to reduce
company matching contributions. Unutilized forfeitures at December 31, 1999
and 1998 were $243,633 and $704,727, respectively.
Plan Termination
Although it has not expressed any intent to do so, the Company reserves the
right to terminate the Plan at any time subject to the provisions of ERISA.
In the event of termination, participants will become fully vested in their
account balances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
Basis of Accounting
The accompanying financial statements and schedule are presented on the
accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
use estimates and assumptions that affect the net assets available for plan
benefits and the changes therein. Actual results could differ from these
estimates.
Recent Accounting Pronouncement
The Accounting Standards Executive Committee issued Statement of Position
("SOP") 99-3, "Accounting for and Reporting of Certain Defined Contribution
Plan Investments and Other Disclosure Matters" which eliminates the
requirement for a defined contribution plan to disclose participant
directed investment programs. SOP 99-3 was early adopted for the 1999
financial statements and as such, the 1998 financial statements have been
reclassified to eliminate the participant-directed fund investment program
disclosures.
<PAGE>
Investment Valuation and Fund Composition
The Plan's assets are held by a bank-administered trust and are invested in
eight funds: the Stable Value Fund, the Large Company Stock Fund, the
Balanced Fund, the Bond Fund, the International Company Stock Fund, the
Small Company Stock Fund, the Medium Company Stock Fund, and the Shaw
Industries Stock Fund. Investments of the trust, except for the guaranteed
investment contracts ("GICs"), are stated at fair value based on quoted
market prices. Fully benefit-responsive GICs are valued at contract value,
which represents the principal balance of the investment contracts plus
accrued interest at the stated contract rate, less payments received and
contract charges by the insurance company. At December 31, 1999, the
weighted average crediting interest rate was 6.59%. For the year ended
December 31, 1999, the annual yield on the GICs was 6.34%. The fair value
of the investment contracts as of December 31, 1999 and 1998 was
approximately $157,621,111 and $117,581,747, respectively.
The Stable Value Fund is invested in contracts with insurance companies, in
contracts with banks, or in one or more mutual funds which invest solely in
interest-bearing obligations. The fund is actively managed by Dwight Asset
Management Company for the year ended December 31, 1999. This investment
option has the lowest level of risk and the lowest anticipated long-term
rate of return. At present, the Stable Value Fund is invested in
interest-bearing contracts with major, top-rated insurance companies, in
one mutual fund, and in one collective investment trust.
The Large Company Stock Fund does not guarantee a fixed rate of return. It
is invested in the Vanguard Institutional Index Fund, which is a Standard &
Poor's 500 index fund. This mutual fund invests in common stocks and
similar equity securities. The fund seeks long-term growth of capital and
income from dividends.
The Balanced Fund does not guarantee a fixed rate of return. It is invested
in the Dodge & Cox Balanced Fund. This mutual fund invests in a combination
of common stocks and fixed income securities. The fund seeks to provide
shareholders with regular income, conservation of principal and an
opportunity for long-term growth of principal and income by investing in a
diversified portfolio of stocks and bonds.
The Bond Fund is invested in the Dodge & Cox Income Fund. This fund invests
the majority of its assets in various debt obligations issued or guaranteed
by the U.S. government or other investment-grade securities. The fund seeks
to provide shareholders with a high and stable rate of current income,
consistent with long-term preservation of capital, by investing in a
diversified portfolio of high-quality bonds and other fixed income
securities.
The International Company Stock Fund is invested in the Templeton Foreign
Fund. This fund invests the majority of its assets in stocks and bonds of
companies and governments outside the United States in order to achieve
long-term capital growth. It maintains a flexible investment policy and can
invest in both developed and underdeveloped foreign countries.
The Small Company Stock Fund was previously invested in the Parkstone Small
Capitalization Institutional Fund. During 1998, this fund was liquidated
and reinvested in the Lazard Small Capitalization Institutional Fund. This
fund seeks to achieve long-term growth of capital investing in the stocks
of small capitalization companies.
Effective July 1, 1998, the Medium Company Stock Fund was added as an
investment option. This fund invests in the PIMCO Advisors Institute of
Cadence Middle Capitalization Growth Fund. This fund seeks to achieve
growth of capital by investing in equity securities of United States
companies with medium market capitalization, targeting companies with
market values between $1 billion and $5 billion.
<PAGE>
The Shaw Industries Stock Fund is invested in shares of Company stock.
Effective January 1, 1999, employees may invest any portion of their
existing account balances or current deferral election in this fund. Prior
to this date, employees were limited to investing 25% of their existing
account balances or current deferral election in this fund.
The net appreciation (depreciation) in fair value of investments in the
accompanying statement of changes in net assets available for plan benefits
reflects both realized and unrealized gains and losses. Purchases and sales
of securities are reflected on a trade-date basis.
Tax Status
The Internal Revenue Service issued a determination letter dated September
25, 1996 stating that the Plan was designed in accordance with applicable
IRC requirements as of June 24, 1994. The Plan has been amended since
receiving the determination letter. However, the plan administrator
believes that the Plan is currently designed and is being operated in
compliance with the applicable requirements of the IRC. Therefore, the plan
administrator believes that the Plan was qualified and the related trust
was tax-exempt as of the financial statement dates.
Administrative Expenses
Administrative expenses include trustee, record-keeping, and investment
management fees, all of which are paid by the Plan.
3. INVESTMENTS
The trustee of the Plan held the Plan's investments and executed
transactions therein. Plan investments at December 31, 1999 and 1998 which
represent 5% or more of the Plan's investments are as follows:
1999
-------------
Caisse Des Depots, guaranteed investment contract,
6.69%, renewable annually ........................... $ 32,463,510
State Street Bank, guaranteed investment contract,
6.27%, renewable annually ........................... 33,547,504
Vanguard Institutional Index Fund ....................... 150,878,751
Dodge & Cox Balanced Fund ............................... 56,506,123
Lazard Small Capitalization Institutional Fund .......... 29,780,957
1998
-------------
Dwight Asset Management Target 5 Fund, 6.6%, due
January 1, 2000 ..................................... $ 24,886,790
Dodge & Cox Balanced Fund .............................. 43,043,256
Vanguard Institutional Index Fund ...................... 108,576,588
Lazard Small Capitalization Institutional Fund ......... 21,809,363
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$15,072,361, as follows:
Mutual funds ......... $ 19,009,511
Common stock ......... (3,764,112)
Insurance contracts .. (173,038)
-------------
$ 15,072,361
=============
<PAGE>
4. RECONCILIATION to FORM 5500
As of December 31, 1999 and 1998, the Plan had $2,634,687 and $2,162,518,
respectively, of pending distributions to participants who elected to
withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability in
the accompanying statements of net assets available for plan benefits in
accordance with accounting principles generally accepted in the United
States.
The following table reconciles net assets available for plan benefits per
the financial statements to the Form 5500 as filed by the Company for the
years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Benefits Payable to Net Assets
Participants 1999 Available for Plan Benefits
----------------------------- Benefits ------------------------------
1999 1998 Paid 1999 1998
------------- ------------- ------------- ------------- -------------
Per financial statements $ 0 $ 0 $ 37,291,745 $ 445,713,208 $ 339,082,314
1999 amounts pending
distribution to
participants ....... 2,634,687 0 2,634,687 (2,634,687) 0
1998 amounts pending
distribution to
participants ....... 0 2,162,518 (2,162,518) 0 (2,162,518)
------------- ------------- ------------- ------------- -------------
Per Form 5500 .......... $ 2,634,687 $ 2,162,518 $ 37,763,914 $ 443,078,521 $ 336,919,796
============= ============= ============= ============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
SCHEDULE H, LINE 4I--ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<S> <C>
Face Amount Current
or Units Identity of Issuer and Description of Asset Value
----------- ----------------------------------------------------------------------------------------------- --------------
1,774,239 * State Street Bank & Trust Company Short-Term Investment Fund $ 1,774,239
6 CNL Income and Growth Fund Limited Partnership 210,000
6 CNL Income and Growth Fund Limited Partnership 231,000
11,426,971 SEI Stable Asset Fund 11,426,971
11,634,447 Caisse Des Depots, synthetic guaranteed investment contract, 6.69%, renewable annually 11,634,447
32,463,510 Caisse Des Depots, guaranteed investment contract, 6.69%, renewable annually 32,463,510
33,547,504 * State Street Bank, guaranteed investment contract, 6.27%, renewable annually 33,547,504
3,028,640 John Hancock Life Insurance Company, guaranteed investment contract, 5.85%, due August 1, 2000 3,028,750
10,220,298 Metropolitan Life, guaranteed investment contract, 7.24%, due June 29, 2001 10,220,298
3,028,209 John Hancock Life Insurance Company, guaranteed investment contract, 5.76%, due August 1, 2000 3,028,209
5,466,624 John Hancock Life Insurance Company, guaranteed investment contract, 6.1%, due January 1, 2001 5,466,624
7,682,043 Life Insurance Company of Virginia, guaranteed investment contract, 6.9%, due December 31, 2001 7,682,043
14,928,521 METLIFE, guaranteed investment contract, 6.85%, renewable annually 14,928,520
8,676,740 Monumental, guaranteed investment contract, 7.24%, due June 29, 2001 8,676,740
16,548,630 Principal Mutual Life, guaranteed investment contract, 5.98%, due December 28, 2000 16,548,630
7,695,024 Security Life of Denver, guaranteed investment contract, 6.98%, due June 28, 2000 7,695,024
1,148,815 * Shaw Industries, Inc. common stock 17,806,633
153,605 * State Street Bank & Trust Company Short-Term Investment Fund 153,605
1,125,877 Vanguard Institutional Index Fund 150,878,751
859,932 Dodge & Cox Balanced Fund 56,506,123
476,430 Dodge & Cox Income Fund 5,431,305
901,989 Templeton Foreign Fund 10,120,311
1,797,282 Lazard Small Capitalization Institutional Fund 29,780,957
248,579 Pimco Advisors Institute of Cadence Middle Capitalization Growth Fund 6,460,570
-------------
$445,700,764
=============
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Shaw Industries, Inc. Retirement Savings Plan Committee has duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
SHAW INDUSTRIES, INC.
RETIREMENT SAVINGS PLAN
/s/ KENNETH G. JACKSON
-----------------------------------
Kenneth G. Jackson
Savings Plan Committee
June 29, 2000
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated May 26, 2000, included in this annual report of
Shaw Industries, Inc. Retirement Savings Plan on Form 11-K for the year ended
December 31, 1999, into the Plan's previously filed Registration Statement No.
333-62915.
Atlanta, Georgia
June 26, 2000
