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FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 2000
Commission file number 0-21250
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Gymboree 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Gymboree Corporation
700 Airport Boulevard
Suite 200
Burlingame, CA 94010-1912
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrator has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
The Gymboree Corporation
Date: June 27, 2001 By /s/Alison L. May
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Alison L. May
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GYMBOREE 401(k) PLAN
Financial Statements
December 31, 2000 and 1999
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GYMBOREE 401(k) PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
TABLE OF CONTENTS
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PAGE
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Independent Accountants' Report...............................................4
Financial Statements:
Statements of Net Assets Available for Benefits...............................5
Statements of Changes in Net Assets Available for Benefits....................6
Notes to Financial Statements.................................................7
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INDEPENDENT ACCOUNTANTS' REPORT
TO THE PARTICIPANTS AND
PLAN ADMINISTRATOR OF THE
GYMBOREE 401(k) PLAN
We have audited the financial statements of the Gymboree 401(k) Plan (the Plan)
as of December 31, 2000 and 1999, and for the years then ended, as listed in the
accompanying table of contents. 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 audits 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 the Plan's 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 benefits of the Plan as of
December 31, 2000 and 1999, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
By /s/ Mohler, Nixon & Williams
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MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 8, 2001
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GYMBOREE 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31,
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2000 1999
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Assets:
Investments, at fair value $6,400,840 $6,771,083
Participant loans 172,063 186,272
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Assets held for investment purposes 6,572,903 6,957,355
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Employer's contribution receivable -- 3,015
Participants' contributions receivable -- 35,996
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Total receivables -- 39,011
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Net assets available for benefits $6,572,903 $6,996,366
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See notes to financial statements.
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GYMBOREE 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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YEARS ENDED
DECEMBER 31,
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2000 1999
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Additions to net assets attributed to:
Investment income:
Dividends and interest $ 413,799 $ 293,435
Net realized and unrealized appreciation
(depreciation) in fair value of investments (1,223,750) 1,532,942
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(809,951) 1,826,377
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Contributions:
Participants' 1,361,461 1,254,911
Employer's 242,529 214,702
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1,603,990 1,469,613
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Total additions 794,039 3,295,990
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Deductions from net assets attributed to:
Withdrawals and distributions (1,217,502) (619,513)
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Total deductions (1,217,502) (619,513)
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Net increase (decrease) in net assets (423,463) 2,676,477
Net assets available for benefits:
Beginning of year 6,996,366 4,319,889
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End of year $ 6,572,903 $ 6,996,366
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See notes to financial statements.
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GYMBOREE 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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NOTE 1 - THE PLAN AND ITS SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The following description of the Gymboree 401(k) Plan (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 is a defined contribution plan that was established in 1992 by the
Gymboree Corporation (the Company) to provide benefits to eligible employees, as
defined in the Plan document. The Plan administrator believes that the Plan is
currently designed and operated in compliance with the applicable requirements
of the Internal Revenue Code and the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended.
ADMINISTRATION - The Company has appointed an Administrative Committee (the
Committee) to manage the operation and administration of the Plan. The Company
has contracted with a third-party administrator who processes and maintains the
records of participant data and Putnam Fiduciary Trust Company (Putnam) to act
as the custodian and trustee. Substantially all expenses incurred for
administering the Plan are paid by the Company.
ESTIMATES - 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 and liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared on the
accrual method of accounting.
INVESTMENTS - Investments of the Plan are held by Putnam and invested based
solely upon instructions received from participants.
The Plan's investments in mutual funds and company stock are valued at fair
value as of the last day of the Plan year, as measured by quoted market prices.
Participant loans are valued at cost, which approximates fair value.
INCOME TAXES - The Plan has been amended since receiving its latest favorable
determination letter dated June 1995. The Company believes that the Plan is
operated in accordance with, and continues to qualify under, the applicable
requirements of the Internal Revenue Code and related state statutes, and that
the trust, which forms a part of the Plan, is exempt from federal income and
state franchise taxes.
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RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 - The differences between
the information reported in the financial statements and the information
reported in the Form 5500 arise primarily from presenting the financial
statements on the accrual basis of accounting.
RECLASSIFICATIONS - Certain reclassifications were made in the 1999 financial
statements to conform with the 2000 presentation.
RISKS AND UNCERTAINTIES - The Plan provides for various investment options in
any combination of mutual funds and Company stock offered by the Plan.
Investment securities are exposed to various risks, such as interest rate,
market fluctuations and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statements of net assets available for benefits
and the statements of changes in net assets available for benefits.
NOTE 2 - RELATED PARTY TRANSACTIONS
Certain Plan investments in mutual funds are managed by Putnam. Putnam is also
the trustee of the Plan. Any purchases and sales of these funds are performed in
the open market at fair value and qualify as party-in-interest. Such
transactions, while considered party-in-interest transactions under ERISA
regulations, are permitted under the provisions of the Plan and are specifically
exempt from the prohibition of party-in-interest transactions under ERISA.
NOTE 3 - PARTICIPATION AND BENEFITS
PARTICIPANT CONTRIBUTIONS - Participants may elect to have the Company
contribute a percentage up to 20% of their eligible pre-tax compensation not to
exceed the amount allowable under current income tax regulations. Participants
who elect to have the Company contribute a portion of their compensation to the
Plan agree to accept an equivalent reduction in taxable compensation.
Contributions withheld are invested in accordance with the participant's
direction.
Participants are also allowed to make rollover contributions of amounts received
from other tax-qualified employer-sponsored retirement plans. Such contributions
are deposited in the appropriate investment funds in accordance with the
participant's direction and the Plan's provisions.
EMPLOYER CONTRIBUTIONS - The Company is allowed to make discretionary matching
contributions as defined in the Plan and as approved by the Board of Directors.
In 2000 and 1999, the Company matched 50% of each eligible participant's
contribution, not to exceed $500 per year.
VESTING - Participants are immediately vested in all contributions and related
earnings.
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PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution, Plan earnings or losses and an allocation of the
Company's contribution. Allocation of the Company's contribution is based on
participant contributions, as defined in the Plan.
PAYMENT OF BENEFITS - Upon termination, the participant or beneficiary may elect
to leave their account balance in the Plan, receive their total benefits in a
lump sum amount equal to the value of the participant's interest in his or her
account, or annual, semiannual, quarterly, or monthly installments over a period
not to exceed the participants lifetime, the lifetime of their designated
beneficiary or their life expectancy. The Plan allows for automatic lump sum
distribution of participant vested account balances that do not exceed $5,000.
LOANS TO PARTICIPANTS - The Plan allows participants to borrow not less than
$1,000 and up to the lesser of $50,000 or 50% of their account balance. The
loans are secured by the participant's balance. Such loans bear interest at the
available market financing rates and must be repaid to the Plan within a
five-year period, unless the loan is used for the purchase of a principal
residence in which case the maximum repayment period may be extended. The
specific terms and conditions of such loans are established by the Committee.
Outstanding loans at December 31, 2000 carry interest rates which range from
9.0% to 9.5%.
NOTE 4 - NONEXEMPT TRANSACTIONS
Certain contributions of approximately $95,000 made by participants in 2000 were
not deposited with the Plan custodian in accordance with the Department of
Labor's regulations. As a consequence of the delay in the deposit of the
participants' contributions, these contributions are considered prohibited
transactions under the Internal Revenue Code. The Company and Plan sponsor
deposited the contributions with the Plan custodian before the end of 2000 and
have made the necessary filings with the Internal Revenue Service.
NOTE 5 - INVESTMENTS
The following table includes the fair values of investments and investment funds
that represent 5% or more of the Plan's net assets at December 31:
2000 1999
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Putnam:
The George Putnam Fund of Boston $ 274,769 $ 142,007
Investors Fund 2,019,468 2,488,732
Voyager Fund 1,100,508 1,179,192
Diversified Income Trust 194,093 143,899
New Opportunities Fund 801,205 958,282
International Growth Fund 1,066,545 1,154,576
Stable Value Fund 628,406 615,720
Gymboree Common Stock 315,846 88,675
Participant loans 172,063 186,272
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Assets held for investment
purposes $6,572,903 $6,957,355
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The Plan's investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated (depreciated) in value as
follows for the years ended December 31:
2000 1999
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Mutual funds ($1,420,097) $ 1,548,706
Gymboree common stock 196,347 (15,764)
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($1,223,750) $ 1,532,942
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NOTE 6 - PARTY-IN-INTEREST TRANSACTIONS
As allowed by the Plan, participants may elect to invest a portion of their
accounts in the common stock of the Company. Aggregate investment in Company
common stock at December 31, 2000 and 1999 was as follows:
Date Number of shares Fair value Cost
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2000 22,764 $315,846 $288,840
1999 15,764 88,675 258,016
NOTE 7 - PLAN TERMINATION AND/OR MODIFICATION
The Company intends to continue the Plan indefinitely for the benefit of its
participants; however, it reserves the right to terminate and/or modify the Plan
at any time by resolution of its Board of Directors and subject to the
provisions of ERISA.
NOTE 8 - SUBSEQUENT EVENT
As of June 8, 2001, the Nasdaq Composite index has decreased by 12% from its
December 31, 2000 level. The Plan's assets may have significantly decreased in
value subsequent to December 31, 2000.
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 333-74269) of the Gymboree Corporation of our report dated June 8,
2001, with respect to the financial statements and schedule of the Gymboree
401(k) Plan included in this Annual Report on Form 11-K.
By /s/ Mohler, Nixon & Williams
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MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 27, 2001
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