================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 [Mark One] [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number to 01-19826 MOHAWK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Registrant's telephone number, including area code: (706) 629-7721 Securities Registered Pursuant to Section 12(b) of the Act:
Delaware 52-1604305 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) P. O. Box 12069, 160 S. Industrial Blvd., Calhoun, Georgia 30701 (Address of principal executive offices) (Zip Code) Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. [_] The aggregate market value of the Common Stock of the Registrant held by non-affiliates of the Registrant (45,299,684 shares) on June 24, 2002 was $2,892,384,823. The aggregate market value was computed by reference to the closing price of the Common Stock on such date. Number of shares of Common Stock outstanding as of June 24, 2002: 67,552,828 shares of Common Stock, $.01 par value.
Title of Each Class Name of Each Exchange on Which Registered ------------------- ----------------------------------------- Common Stock, $.01 par value New York Stock Exchange SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Mohawk Industries, Inc. Dated: June 28, 2002 By: /s/ JEFFREY S. LORBERBAUM -------------------------------------- Jeffrey S. Lorberbaum, President and Chief Executive Officer (principal executive officer) Dated: June 28, 2002 /s/ JOHN D. SWIFT ----------------------------------------- John D. Swift, Chief Financial Officer, Vice President- Finance and Assistant Secretary (principal financial and accounting officer) 2 Item 14. Exhibits Financial Statements Schedules and Reports on 8-K (a) 3. Exhibits Exhibit 23.3 Independent Auditors' Consent Exhibit 99.1 Mohawk Carpet Corporation Retirement Savings Plan Independent Auditors' Report Statements of Net Assets Available for Plan Benefits as of December 31, 2001 and 2000 Statement of Changes in Net Assets Available for Plan Benefits for the Year ended December 31, 2001 Notes to the Financial Statements Schedule H, Line 4i-Schedule of Assets (Held at Year End)- December 31, 2001 3 Exhibit Index Exhibit Number Description Exhibit 23.3 Independent Auditors' Consent Exhibit 99.1 Mohawk Carpet Corporation Retirement Savings Plan Independent Auditors' Report Statements of Net Assets Available for Plan Benefits as of December 31, 2001 and 2000 Statement of Changes in Net Assets Available for Plan Benefits for the Year ended December 31, 2001 Notes to the Financial Statements Schedule H, Line 4i-Schedule of Assets (Held at Year End)- December 31, 2001 4
Exhibit 23.3 INDEPENDENT AUDITORS' CONSENT The Board of Directors Mohawk Industries, Inc.: We consent to the incorporation by reference in the registration statement (No. 33-87998) on Form S-8 for the Mohawk Carpet Corporation Retirement Savings Plan of Mohawk Industries, Inc. of our report dated May 3, 2002, relating to the statements of net assets available for plan benefits of the Mohawk Carpet Corporation Retirement Savings Plan as of December 31, 2001 and 2000, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2001 and related supplemental schedule, which report appears in the December 31, 2001 Annual Report on Form 10-K/A Amendment No. 1 of Mohawk Industries, Inc. /s/ KPMG LLP Atlanta, Georgia June 24, 2002 5
Exhibit 99.1 Independent Auditors' Report The Administrator Mohawk Carpet Corporation Retirement Savings Plan: We have audited the accompanying statements of net assets available for plan benefits of the Mohawk Carpet Corporation Retirement Savings Plan (Plan) as of December 31, 2001 and 2000 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2001. 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 auditing standards generally accepted in the United States of America. 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 of the Plan as of December 31, 2001 and 2000 and the changes in net assets available for plan benefits for the year ended December 31, 2001 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 at end of year) 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's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to 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. /s/ KPMG LLP Atlanta, Georgia May 3, 2002 6 MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Statements of Net Assets Available for Plan Benefits December 31, 2001 and 2000 See accompanying notes to financial statements. 7
2001 2000 ------------------ ------------------ Assets: Investments (notes 3 and 4): Mutual funds, at fair value $ 112,824,624 104,065,096 Mohawk Industries, Inc. common stock, at fair value 38,045,527 21,766,298 Money market funds, at cost 82,104,332 69,147,930 Loans to participants, at cost 12,135,000 10,343,989 ------------------ ------------------ Total investments 245,109,483 205,323,313 Contributions receivable from employer 71,455 314,866 Contributions receivable from participants 167,314 904,948 ------------------ ------------------ Net assets available for plan benefits $ 245,348,252 206,543,127 ================== ================== MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 2001 See accompanying notes to financial statements. 8
Additions: Investment income: Interest and dividends $ 6,505,032 Net appreciation (depreciation) in fair value of investments: Mutual funds (7,333,948) Mohawk Industries, Inc. common stock 19,504,377 ------------------- Net investment income 18,675,461 Contributions from employer 9,043,105 Contributions from participants 21,168,711 Transfers from other plan (note 7) 5,553,885 ------------------- Total additions 54,441,162 ------------------- Deductions: Participants' benefits 15,564,312 Administrative expenses 71,725 ------------------- Total deductions 15,636,037 ------------------- Increase in net assets available for plan benefits 38,805,125 Net assets available for plan benefits at beginning of year 206,543,127 ------------------- Net assets available for plan benefits at end of year $ 245,348,252 =================== MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Notes to Financial Statements December 31, 2001 and 2000 (1) Summary of Significant Accounting Policies The following is a summary of significant accounting policies followed by the Plan in preparing its financial statements. (a) Basis of Presentation The records of the Plan are maintained on the cash basis of accounting. The accompanying financial statements of the Mohawk Carpet Corporation Retirement Savings Plan (the Plan) have been prepared on the accrual basis of accounting and present the net assets available for plan benefits and changes in those net assets. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. (b) Investments Investments in mutual funds and common stock are stated at fair value based on quoted market prices or as determined by Scudder Kemper Investments (Trustee). Investments in money market funds and loans to participants are stated at cost which approximates fair value. Securities transactions are accounted for on a trade date basis. Realized and unrealized investment gains and losses are included in net appreciation in fair value of investments in the accompanying statement of changes in net assets available for plan benefits. (c) Fair Value of Financial Instruments Investments in securities are stated at fair value. In addition, management of the Plan believes that the carrying amount of receivables is a reasonable approximation of the fair value due to the short-term nature of these instruments. (2) Description of the Plan The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. (a) General The Plan is a defined contribution plan and covers all employees of Mohawk Carpet Corporation (the Company), a wholly owned subsidiary of Mohawk Industries, Inc. The Plan provides for retirement savings to qualified active participants through both participant and employer contributions and is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Employees are eligible to participate in the Plan at the beginning of a calendar month after the completion of 90 days of service. (Continued) 9 MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Notes to Financial Statements December 31, 2001 and 2000 The Plan is administered by an Administrative Committee appointed by the Company. The Administrative Committee is responsible for the control, management, and administration of the Plan and the assets held in trust at Scudder Kemper Investments as of December 31, 2001 and 2000 and for the year ended December 31, 2001. (b) Contributions Contributions to the Plan are made by both participants and the Company. Participants may contribute a maximum of 16% of their gross compensation, subject to certain limitations. Participants may allocate their contributions in multiples of 1% to various investment funds of the Plan. The employer makes a 50% matching contribution up to the first 4% of each participant's gross compensation contributed to the Plan. The Company amended the Plan effective January 1, 2000 to match an additional $0.25 for every $1.00 of employee contributions in excess of 4% up to a maximum of 6%. The terms of the Plan also provide for discretionary employer profit sharing contributions to the Mohawk Stock Fund for plan participants employed on the last day of the plan year or terminated during the plan year on account of death, disability, or retirement. (c) Participant Accounts Each participant's account is credited with their contribution for the period as well as the employer's matching contribution and an allocation of any employer profit sharing contribution. Investment income, realized gains/losses, and the change in unrealized appreciation or depreciation on plan investments are credited to participants' accounts monthly based on the proportion of each participant's account balance to the total account balance within each investment fund at the beginning of the month. Participant accounts may be invested in one or more of the investment funds available under the Plan at the direction of the participant. The Plan provides for monthly valuation of accounts. Current investment funds available within the Plan include the following: (Continued) 10
Investment fund Fund objective ----------------------- ---------------------------------------------------------------------- Scudder Stable Value To provide fixed rate of return for a fixed period of time. Money in Fund: this fund is invested in investment contracts, money market securities, and managed bond portfolios. PIMCO Total Return To provide the opportunity for higher earnings than the stable value Fund: fund. Money in this fund is invested primarily in intermediate term, high-quality, fixed income securities. Scudder Balanced Fund: To provide capital growth and current income while minimizing the risk of principal loss associated with common stocks by investing in a changing mix of seasoned stocks and investment grade bonds. Kemper-Dreman High- To provide long-term capital growth through investing in large Return Equity Fund: capitalization stocks in undervalued sectors of the stock market. MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Notes to Financial Statements December 31, 2001 and 2000 (d) Distributions to Participants Upon termination of employment, the participant's account shall be distributed in a lump-sum cash payment as soon as administratively practicable, unless the participant elects otherwise. A participant may elect to receive his distribution in approximate equal installments over a period designated by the participant, not to exceed the lesser of 15 years or the life expectancy of the last survivor of the participant and his beneficiary. Under the terms of the Plan, participants may make hardship withdrawals from their accounts upon furnishing proof of hardship as specified in the Plan agreement. Participants may also borrow the lesser of $50,000 or 50% of the value of their accounts subject to limitations provided by the Plan. Loans must be paid back to the Plan generally within four years of the loan date. Amounts due to participants who have withdrawn from the Plan but have not been paid at December 31, 2001 and 2000 totaled $-0- and $170,697, respectively. (Continued) 11
Investment fund Fund objective ----------------------- ---------------------------------------------------------------------- Scudder S&P 500 Index To track the performance of the Standard and Poor's 500 Composite Fund: Stock Price Index, which emphasizes stocks of large U.S. companies. Baron Asset Fund: To provide long-term capital growth through investing in the stocks of small, and medium-sized companies with undervalued assets. Scudder International To provide long-term capital growth through a flexible policy of Fund: investing in stocks and debt obligations of companies and governments outside the U.S. Mohawk Stock Fund: To provide capital appreciation through the ownership of Mohawk Industries shares. Scudder 21st Century To provide long-term growth of capital through investing primarily Growth Fund in emerging growth companies poised to become leaders in 21st Century. Transamerica Premier To provide long-term growth through investing in a diversified Equity Fund portfolio of equity securities of domestic growth companies of any size. AIM Value Fund To provide long-term growth of capital through investing in stocks of companies that are undervalued relative to the stock market as a whole. MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Notes to Financial Statements December 31, 2001 and 2000 (e) Vesting Participants are immediately vested in their contributions and the Company's matching and discretionary contributions and the income earned on such contributions. Effective January 1, 2001, participants whose entry date is on or after January 1, 2001 are vested in the Company's matching and discretionary contributions in accordance with the following schedule: Amounts forfeited by participants who terminate from the Plan prior to being 100% vested are applied to reduce subsequent Company contributions to the Plan. Forfeitures totaled $3,700 in 2001. (f) Administrative Expenses Certain administrative expenses of the Plan are paid by the Company. These costs include legal, accounting, and certain administrative fees. (3) Transactions with Parties-in-Interest At December 31, 2001 and 2000, the Plan held investments in trust funds and money market accounts sponsored by the trustee with current values of $175,845,632 and $160,915,675, respectively. The Plan also held investments in 693,249 and 795,119 shares of Mohawk Industries, Inc. common stock at December 31, 2001 and 2000, respectively. (4) Investments The following investments represent 5% or more of the Plan assets at December 31, 2001 and 2000:
Years of vesting service Percent vested ------------------------------------------------ -------------------- Less than one year 0% One year or more 100% All of the Plan's investments are held by a party-in-interest to the Plan. (Continued) 12
2001 2000 -------------------- -------------------- Mutual funds: Scudder Balanced Fund $ 15,710,066 15,250,186 Scudder S&P 500 Index Fund 12,441,812 12,537,715 Kemper-Dreman High-Return Equity Fund 59,078,307 57,646,310 Mohawk Industries, Inc. common stock 38,045,527 21,766,298 Money market fund - Scudder Stable Value Fund 82,104,332 69,147,930 MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Notes to Financial Statements December 31, 2001 and 2000 (5) Income Tax Status The Internal Revenue Service made a favorable ruling on the application for determination of qualification submitted by the Company in September 1995. The Plan has been amended since receiving the determination letter and the Plan has filed an application for an updated determination letter. The administrative committee of the Plan is not aware of any course of action or series of events that might adversely affect the Plan's qualification under Section 401(a) of the Internal Revenue Code, and under which the Plan would be subject to tax under present income tax law. (6) Plan Termination While it is the Company's intention to continue the Plan indefinitely, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA and the Plan agreement. In the event of Plan termination, participants will become 100% vested in their accounts. (7) Plan Merger During 2001, the assets of Durkan Patterned Carpet 401(k) Profit Sharing Plan were merged with the Plan. Plan assets at December 31, 2001 include assets of $5,553,885 transferred from Durkan Patterned Carpet 401(k) Profit Sharing Plan. (8) Subsequent Events Effective January 1, 2002, account balances attributable to employees of Karastan Bigelow Group (KBY) and Lauren Park Mill (LPM) were transferred into Mohawk Carpet Corporation Retirement Savings Plan II. Also, account balances attributable to all salaried, sales employees, and nonexempt employees were transferred into Mohawk Carpet Corporation Retirement Savings Plan II. 13 Schedule 1 MOHAWK CARPET CORPORATION RETIREMENT SAVINGS PLAN Schedule H, Line 4i - Schedule of Assets (Held at Year End) - December 31, 2001 December 31, 2001 *Scudder Kemper Investments, Trustee, and Mohawk Industries, Inc. are parties- in-interest to the Plan. (1) Loans are consummated at a fixed rate (then current prime rate plus 1%) for terms up to four years. Interest rates range from 7% to 10% on loans outstanding. See accompanying independent auditors' report. 14
Current Identity of the issue Description of investments value - ------------------------------------------------ ------------------------------------------------- ------------------- Mutual funds: PIMCO Total Return Fund 611,045 mutual fund units $ 6,391,526 *Scudder Balanced Fund 898,745 mutual fund units 15,710,066 *Scudder S&P 500 Index Fund 380,367 mutual fund units 12,441,812 *Scudder International Fund 102,548 mutual fund units 3,759,412 *Kemper-Dreman High-Return Equity Fund 1,600,604 mutual fund units 59,078,307 Baron Asset Fund 77,635 mutual fund units 3,451,632 AIM Value Fund 157,678 mutual fund units 1,713,956 Transamerica Premier Equity Fund 439,872 mutual fund units 7,526,210 *Scudder 21st Century Growth Fund 159,057 mutual fund units 2,751,703 *Mohawk Industries, Inc. - common stock 693,249 shares of common stock 38,045,527 *Money Market Fund - Scudder Stable Value Fund 82,104,332 Money Market Fund 82,104,332 Loans to participants (1) 12,135,000 ------------------- Total $ 245,109,483 ===================