================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 26, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-08140
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
THE FLEMING 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FLEMING COMPANIES, INC.
15150 Preston Road
Dallas, Texas 75248
================================================================================
THE FLEMING 401(K) PLAN
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm ..................... 3
Financial Statements
Statements of Net Assets Available for Benefits, December 26, 2003 and
December 27, 2002 .................................................. 4
Statement of Changes in Net Assets Available for Benefits, Year ended
December 26, 2003 .................................................. 5
Notes to Financial Statements ........................................... 6
Supplemental Schedule
Schedule of Assets Held for Investment Purposes, December 26, 2003 ...... 12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan Sponsor and Trustee
The Fleming 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of The Fleming 401(k) Plan as of December 26, 2003 and December 27, 2002, and
the related statement of changes in net assets available for benefits for the
year ended December 26, 2003. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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.
As discussed in Note A to the financial statements, the Board of Directors of
Fleming Companies, Inc., the Plan's sponsor, adopted resolutions on October 15,
2003 to terminate the Plan. In accordance with accounting principles generally
accepted in the United States of America, the Plan has changed its basis of
accounting from the ongoing plan basis to the liquidation basis; however, such
change had no effect on the financial statements.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of The Fleming
401(k) Plan as of December 26, 2003 and December 27, 2002, and the changes in
net assets available for benefits for the year ended December 26, 2003 in
conformity with accounting principles generally accepted in the United States of
America.
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 supplemental
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
Such 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.
GRANT THORNTON LLP
Oklahoma City, Oklahoma
June 24, 2004
3
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 26, December 27,
2003 2002
---- ----
ASSETS
Investments $204,753,498 $312,350,841
Receivables
Employer contributions -- 9,542,805
Participant contributions 926 237,326
Accrued interest, dividends and other 5 5,173
----------- -----------
931 9,785,304
Cash 1,828 188,268
----------- -----------
Total assets 204,756,257 322,324,413
LIABILITIES
Accrued expenses -- 42,117
Excess contribution payable 239,292 --
----------- -----------
239,292 42,117
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $204,516,965 $322,282,296
=========== ===========
The accompanying notes are an integral part of these statements.
4
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 26, 2003
Additions
Participant contributions $ 15,469,903
Interest and dividend income 6,348,228
Net appreciation in fair value of investments 29,417,797
----------
51,235,928
Deductions
Benefits paid to participants 201,832,022
Administrative fees 307,715
-----------
202,139,737
-----------
Net decrease before transfers (150,903,809)
Net transfers from other plans 33,138,478
----------
NET DECREASE (117,765,331)
Net assets available for benefits at beginning of year 322,282,296
-----------
Net assets available for benefits at end of year $ 204,516,965
===========
The accompanying notes are an integral part of this statement.
5
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS
December 26, 2003 and December 27, 2002
NOTE A - DESCRIPTION OF PLAN
On October 15, 2003, the Board of Directors of the Plan Sponsor (Fleming
Companies, Inc.) adopted resolutions to terminate The Fleming 401(k) Plan
(the "Plan") effective January 31, 2004 and, as a result, all participants
became fully vested in their benefits under the Plan as of January 31,
2004. Subsequently, in October 2003, participants were notified of the
Plan's termination. Furthermore, the participants will be required to
elect a distribution option (rollover or lump-sum distribution) before
December 24, 2004.
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
The Plan, established in 1980, and amended and restated at various times,
is a defined contribution plan subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan was
designed to provide retirement benefits to eligible employees of Fleming
Companies, Inc. and its subsidiaries (the "Company").
The Plan provides for the appointment of a committee responsible for Plan
administration. Historically, that committee was the Retirement Committee
of Fleming Companies, Inc. However, as a result of the bankruptcy
reorganization efforts and management departures, the Retirement Committee
has not met since December 18, 2002. Subsequent to the bankruptcy filing,
all Plan amendments have been approved by the Finance Committee of the
Board of Directors.
In January 2003, the Head Distributing Company 401(k) Plan and the
Core-Mark International Nest Egg Savings Plan were merged into the Plan.
The Plan recognized transfers of net assets at fair value of approximately
$33.1 million.
Partial Plan terminations occurred during 2003 and 2002 due to the
Company's bankruptcy restructuring in 2003 and other restructuring
activities in 2002. Participants who were affected by the partial Plan
terminations became fully vested in Company contributions in their
account.
Prior to January 31, 2004, employees were eligible to participate in the
Plan after achieving three months of service and attaining 21 years of
age, or participation in a prior plan. Through January 31, 2004,
participants could have made deferrals of compensation contributions in
accordance with the provisions of Internal Revenue Code (the "Code")
section 401(k) of at least 1%, but not more than 25%, of the participant's
compensation, subject to certain limitations. Participant deferral
accounts are 100% vested. For the participants employed on the last day of
the 2002 Plan year, the Plan provided for a matching contribution equal to
(1) 100% of the participant's deferrals of compensation but not to exceed
the first 2% of such participant's compensation for such Plan year and (2)
25% of the participant's additional deferrals of compensation on the next
4% of such participant's compensation for such Plan year. No contributions
were made by the Company for the 2003 Plan year. A participant was 100%
vested in the Company's contribution after three years of credited
service.
For the 2002 Plan year, the Company made an annual contribution on behalf
of certain participants of the Plan, as defined by the Plan, based on the
following years of service:
6
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 26, 2003 and December 27, 2002
NOTE A - DESCRIPTION OF PLAN - CONTINUED
Contribution rate as
Years of credited service percentage of compensation
------------------------- --------------------------
1-7 1%
8-15 2%
16-23 3%
24 or more 4%
Due to the Company's bankruptcy reorganization, for the year ended
December 26, 2003, the Company eliminated its obligation to make Company
matching and other annual contributions.
Until all assets are distributed from the Plan, separate accounts will be
maintained for each remaining participant. Accounts are classified as
follows:
- Accounts attributable to Company contributions and related
investment earnings.
- Accounts attributable to contributions by participants under
section 401(k) of the Code and related investment earnings.
- Accounts attributable to contributions by participants on an
after-tax basis and related investment earnings.
Prior to January 31, 2004, participants or beneficiaries, with certain
limitations, could have borrowed from their vested accounts a minimum of
$500 up to a maximum of $50,000 or 50% of their vested account balance,
whichever is less. Each loan was collateralized by the balance in the
borrower/participant's accounts and accrued interest at rates that, at
December 26, 2003, ranged from 5.0% to 11.5%. Loans mature at various
dates; however, all loans become due and payable upon distribution of the
borrower/participant's accounts.
Benefits of the Plan are payable upon reaching normal retirement, early
retirement or termination of employment, or in the event of death or
disability. Lump-sum distributions are the only distribution option
available.
Historically, upon termination of a participant's employment with the
Company, the nonvested portion of the Company contribution was forfeited.
Forfeitures were used first to pay Plan expenses and then to reduce future
Company contributions. At December 26, 2003, forfeited nonvested accounts
totaled approximately $16,000.
Until an account is distributed, participants may direct the investments of
their accounts into various investment funds. Participants should refer to
the information provided by Fidelity Management Trust Company for a
complete description of the investment options.
7
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 26, 2003 and December 27, 2002
NOTE B - SUMMARY OF ACCOUNTING POLICIES
A summary of the Plan's significant accounting policies consistently
applied in the preparation of the accompanying financial statements
follows.
1. Plan Year End
The Plan's fiscal year ends on the Friday before the last Saturday in
December.
2. Basis of Accounting
The financial statements have been prepared using the accrual method of
accounting. As discussed in Note A, during 2003, the Plan was terminated
and currently is in the process of liquidating. In accordance with
accounting principles generally accepted in the United States of America,
the Plan has changed its basis of accounting from the ongoing plan basis
to the liquidation basis. Because plan assets and liabilities are very
liquid and short-term in nature and were carried at fair values, changing
to the liquidation basis had no effect on the realizability or carrying
amounts of the assets and liabilities and had no effect on the financial
statements.
3. Investments
Mutual funds are stated at net asset value as determined based on the
closing market prices of the underlying investments held. Investments in
shares of collective trust funds are valued at their estimated fair
values, as determined in good faith by the trustee. Corporate common
stocks are valued based upon quoted market prices. Participant loans are
valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect the amounts
reported in the statements of net assets available for benefits.
4. Cash
The Plan maintains its cash in accounts which may not be federally
insured. The Plan has not experienced any losses in such accounts and
believes it is not exposed to any significant credit risks on cash.
8
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 26, 2003 and December 27, 2002
NOTE B - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
5. Administrative Fees
Certain expenses incurred in connection with the general administration of
the Plan are paid by the Plan and are recorded as administrative fees.
6. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures;
accordingly, actual results could differ from those estimates.
NOTE C - INVESTMENTS
The Plan's investments are held by Fidelity Management Trust Company
("Fidelity"). The following is a schedule of investments by type at:
December 26, 2003 December 27, 2002
----------------- -----------------
Mutual funds $178,335,200 $274,312,259
Collective trust funds 21,908,659 17,340,547
Corporate common stock - Fleming Companies, Inc. 477 12,678,694
Participant loans 4,509,162 8,019,341
------------ ------------
$204,753,498 $312,350,841
============ ============
The following table presents the fair value of investments that represent
5% or more of the Plan's net assets available for benefits at:
December 26, 2003 December 27, 2002
----------------------------- -----------------------------
Number Fair Number Fair
of shares value of shares value
---------- ---------- ---------- ----------
Fidelity Contrafund 260,816 $12,871,283 572,950 $22,115,868
Fidelity Equity Income Fund 290,568 14,455,767 575,685 22,837,414
Janus Twenty Fund -- -- 668,628 19,396,899
Fidelity Magellan Fund 434,161 42,434,890 834,903 65,923,913
Fidelity Managed Income Portfolio 21,908,659 21,908,659 17,340,547 17,340,547
Fidelity Puritan Fund 1,116,362 20,619,201 2,141,948 33,821,363
Fidelity Retirement Money Market
Portfolio 21,385,189 21,385,189 49,336,964 49,336,964
Fidelity Intermediate Bond Fund -- -- 1,854,927 19,903,364
Pimco Total Return, Institutional Class 1,061,447 11,368,093 -- --
Fidelity Diversified International Fund 501,550 12,097,389 -- --
Pimco RCM Large Cap Growth 1,093,491 13,056,278 -- --
9
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 26, 2003 and December 27, 2002
NOTE C - INVESTMENTS - CONTINUED
The following table presents the net appreciation (depreciation)
(including gains and losses on investments bought and sold, as well as
held during the year) by type of investment for the year ended December
26, 2003:
Mutual funds $ 45,999,822
Corporate common stock - Fleming Companies, Inc. (16,582,025)
------------
$ 29,417,797
============
NOTE D - TAX STATUS
The Internal Revenue Service has determined and informed the Company in a
letter dated March 26, 2003 that the Plan, as amended on November 2, 2001,
meets the requirements of section 401(a) of the Code and that the Plan's
related trust is tax-exempt under section 501(a) of the Code.
However, effective January 1, 2002, the Plan was amended and restated. The
Company has not yet received a determination letter from the Internal
Revenue Service for the amended and restated Plan. The Company believes
that the Plan currently is designed and is being operated in compliance
with the applicable requirements of the Code. Therefore, no provision for
income taxes is included in the Plan's financial statements.
NOTE E - REFUNDS
The Plan approved refunds of $239,292 of excess contributions to highly
compensated members in 2003. Refunds were necessary in order to satisfy
the actual deferral percentage limitation and the actual contribution
percentage limitation under IRC section 401(m) for the year ended December
26, 2003. The Code requires these refunds be made prior to the end of the
following year. These refunds were made within the first four months after
December 26, 2003. No such refunds were required for 2002.
NOTE F - RELATED PARTY TRANSACTIONS
Certain Plan investments are managed by Fidelity. Fidelity is the trustee
as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions.
10
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 26, 2003 and December 27, 2002
NOTE G - REGULATORY MATTERS
By letter dated March 6, 2003, the Employee Benefits Security
Administration of the United States Department of Labor (the "DOL")
confirmed to the Company that it had initiated an investigation of certain
of the retirement plans (including the Plan) sponsored by the Company
(collectively, the "Retirement Plans") pursuant to the authority provided
by Section 504 of ERISA. The investigation consisted of interviews and the
review of records of the Retirement Plans.
The Company has provided access to and copies of documents requested by
the DOL. The Company has not received any formal results or finding from
the DOL with respect to its investigation.
NOTE H - PLAN SPONSOR BANKRUPTCY / SEC INVESTIGATION
On April 1, 2003, Fleming Companies, Inc. and certain of its affiliates
(collectively, the "Debtors") filed for relief under Chapter 11 of Title
11 of the United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
The bankruptcy cases have been consolidated for procedural purposes only.
The Debtors continue in possession of their properties and are operating
and managing their businesses as debtors and debtors in possession. On May
25, 2004, the Bankruptcy Court entered an order that, among other things,
approved the Third Amended Disclosure Statement filed by the Debtors and
the Official Committee of Unsecured Creditors in support of their Third
Amended Joint Plan of Reorganization. The Bankruptcy Court has set July
26, 2004 as the hearing on the reorganization plan confirmation and July
2, 2004 as the deadline by which parties must object to the reorganization
plan confirmation. Although the Debtors believe that the Third Amended
Joint Plan of Reorganization is a confirmable plan consistent with section
1129 of the Bankruptcy Code, there can be no assurance that the
reorganization plan will be confirmed on July 26 or thereafter. In the
event that the reorganization plan is not confirmed, the Debtors expect to
make the necessary amendments to achieve confirmation.
The Company is the subject of an investigation by the Securities and
Exchange Commission relating to certain accounting transactions and
practices during the years 2001 and 2002 which may have involved certain
members of management or employees who may have had significant roles in
internal controls of Fleming Companies, Inc.
NOTE I - SUBSEQUENT EVENTS
In January 2004, assets totaling approximately $42,960,000, relating to
the employees of the convenience distribution business, were spun off into
their own 401(k) plan.
11
THE FLEMING 401(K) PLAN (IN LIQUIDATION)
SCHEDULE H, LINE 4i - ASSETS HELD FOR INVESTMENT PURPOSES
December 26, 2003
Identity of issuer, borrower, lessor Current
or similar party; description of investment Units Cost value
------------------------------------------- ----- ---- -----
Fidelity investments*
Puritan Fund 1,116,362 ** $ 20,619,201
Magellan Fund 434,161 ** 42,434,890
Contrafund 260,816 ** 12,871,283
Equity Income Fund 290,568 ** 14,455,767
Intermediate Bond Fund 220 ** 2,343
Low-Priced Stock Fund 282,994 ** 9,899,136
Diversified International Fund 501,550 ** 12,097,389
Freedom Income Fund 8,219 ** 91,152
Freedom 2000 Fund 24,473 ** 288,290
Freedom 2010 Fund 229,909 ** 2,993,417
Freedom 2020 Fund 299,354 ** 3,897,584
Freedom 2030 Fund 123,114 ** 1,594,331
Freedom 2040 Fund 44,368 ** 335,425
Retirement Money Market Portfolio 21,385,189 ** 21,385,189
Managed Income Portfolio 21,908,659 ** 21,908,659
Spartan US Equity Index Fund 131,971 ** 5,200,941
------------
Total Fidelity investments 170,074,997
Pimco High Yield Fund, Administrative Class 131,085 ** 1,280,698
Pimco Total Return, Institutional Class 1,061,447 ** 11,368,093
Pimco RCM Large Cap Growth 1,093,491 ** 13,056,278
Templeton Developing Markets, A 96,605 ** 1,448,112
Wasatch Ultra Growth 107,053 ** 3,015,681
Corporate common stock
Fleming Companies, Inc.* 196,028 ** 477
Participant loans* (1) ** 4,509,162
------------
TOTAL $204,753,498
============
*Party in interest
**Cost omitted for participant-directed investments
(1) Participant loans, 5.0% to 11.5%, maturing at various dates through
September 2019; however, all loans become due and payable upon
distribution of the borrower/participant's accounts.
12
EXHIBIT INDEX
The following exhibit has been filed as part of this Form 11-K and is
incorporated herein by reference.
EXHIBIT
NUMBER DESCRIPTION
------ -----------
23 Consent of Grant Thornton LLP
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.
THE FLEMING 401(k) PLAN
By: /s/ CHARLES D. BICKFORD
---------------------------------
Charles D. Bickford
(Member of the Fleming Companies,
Inc. retirement committee which
administers the Plan)
Date: July 8, 2004