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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended June 30, 2002
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Commission file number: 33-60032
Buckeye Retirement Plan
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Buckeye Technologies Inc.
1001 Tillman Street, Memphis, TN 38112
901-320-8100
Plan Number 002
Internal Revenue Service -- Employer Identification No. 62-1518973
June 30, 2002 and 2001
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BUCKEYE RETIREMENT PLAN
Financial Statements
and Supplemental Schedule
For the Year Ended June 30, 2002
BUCKEYE RETIREMENT PLAN
Contents
Page
Independent Auditor's Report 2
Statements of Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5-8
Supplemental Schedule
Schedule of Assets Held for Investment Purposes Prior to
Transfer of Assets to Other Plan 9
Independent Auditor's Report
To the Buckeye Investment Committee
Buckeye Retirement Plan
Memphis, Tennessee
We have audited the accompanying statements of net assets available for benefits
of Buckeye Retirement Plan as of June 30, 2002 and 2001, and the related
statements of changes in net assets available for benefits for the years then
ended. 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 benefits of Buckeye
Retirement Plan at June 30, 2002 and 2001, and the changes in its net assets
available for benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes prior to transfer of assets to other plan as
of June 30, 2002 is presented for the purpose of complying with the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, and is not a required part of the basic
financial statements. The supplemental schedule has been subjected to the
auditing procedures applied in the audit 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.
Thompson Dunavant PLC
Certified Public Accountants
November 11, 2002
-2-
BUCKEYE RETIREMENT PLAN
Statements of Net Assets Available for Benefits
June 30, 2002 and 2001
2002 2001
--------- ----------
Assets
Investments
Buckeye Master Trust
Mutual funds $ - $ 27,664,376
Common stock of Buckeye Technologies Inc. - 7,500,305
--------- ------------
- 35,164,681
Receivables
Employer contributions - 6,184,181
Other - 12,080
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- 6,196,261
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Net assets available for benefits $ - $ 41,360,942
========= ============
The accompanying notes are an integral
part of these financial statements
-3-
BUCKEYE RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended June 30, 2002 and 2001
2002 2001 .
------------- --------------
Additions to (reductions in) net assets attributed to:
Investment income (loss)
Net depreciation in fair value of investments $ (6,377,436) $ (9,339,118)
Interest and dividends 523,751 2,037,759
-------------- -------------
(5,853,685) (7,301,359)
Employer contributions 5,676,532 6,195,790
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Total additions (reductions) (177,153) (1,105,569)
Deductions from net assets attributed to:
Benefits paid to participants 2,182,929 2,149,925
Administrative expenses 34,420 33,489
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Total deductions 2,217,349 2,183,414
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Net decrease prior to transfer of assets to other plan (2,394,502) (3,288,983)
Transfer of net assets to other plan 38,966,440 -
-------------- -------------
Net decrease in net assets (41,360,942) (3,288,983)
Net assets available for benefits
Beginning of year 41,360,942 44,649,925
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End of year $ - $ 41,360,942
============== =============
The accompanying notes are an integral
part of these financial statements
-4-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements
June 30, 2002 and 2001
Note 1 - Description of Plan
The following description of Buckeye Retirement Plan provides only general
information. Readers should refer to the Plan Agreement for a more complete
description of the Plan's provisions.
General
Buckeye Retirement Plan (the "Plan") was terminated June 30, 2002 (see note 6).
The Plan was a noncontributory defined contribution pension plan covering all
eligible salaried and hourly employees, as defined in the plan document, of
Buckeye Technologies Inc. and its wholly owned subsidiaries Buckeye Florida,
Limited Partnership, Buckeye Florida Corporation, Buckeye Lumberton Inc.,
Buckeye Mt. Holly LLC, and BKI International Inc. (collectively the "Company").
Employees were eligible upon completion of 1,000 hours of service during their
first year of employment or during any Plan year (July 1 to June 30). The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions
Contributions made annually by the Company were computed based upon the
following formula:
Contribution = (A+B)C A=1% B=.5% X number of years service not
to exceed twenty (20) years. C=Plan year compensation. The
minimum is 1 1/2% of eligible compensation and the maximum is
11% of compensation.
Contributions were generally funded in the quarter following the Plan's year
end.
Participant accounts
Each participant's account was credited with the allocation of the employer's
contribution. The value of a participant's account was the contributions made on
their behalf plus a proportionate interest in the investment earnings of the
funds in which the contributions were invested. The benefit to which a
participant was entitled was the benefit that could be provided from the
participant's account.
Vesting
Participants were 100% vested in their accounts after completion of five years
of credited service. In the event of death, disability, normal retirement (age
65) or if the Plan is discontinued, participants became 100% vested in their
account balances.
-5-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2002 and 2001
Note 1 - Description of Plan (continued)
Payment of benefits
Participants could choose to receive account distributions either in the form of
a lump sum payment or installments over a period of time as defined in the Plan
Agreement. However, if the participant's vested balance did not exceed $5,000,
the Plan could distribute funds in the form of a lump sum payment without the
consent of the participant.
Forfeitures
If an employee terminated before his or her account had become fully vested,
such portion of the account was forfeited. Forfeitures are used to reduce future
contributions by the Company. Forfeitures used to reduce employer contributions
totaled $189,210 in 2002.
Note 2 - Summary of significant accounting policies
Investments
Investments are stated at fair value and represent the Plan's share of the
market value of fund holdings or are based upon quoted market prices. Purchases
and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis and dividends are recorded on the ex-dividend
date.
Benefit payments
Benefit payments to participants are recorded upon distribution.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions which affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Note 3 - Investments
At June 30, 2001, the Plan's investment assets were held in a trust account by
Fidelity Management Trust Company and consisted of an interest in the Buckeye
Master Trust. The Master Trust also includes the investment assets of Buckeye
Retirement Plus Savings Plan. The Master Trust was composed of the common stock
of Buckeye Technologies Inc. and interests in ten mutual funds at June 30, 2001.
-6-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2002 and 2001
Note 3 - Investments (continued)
The Plan allowed participants to invest varying portions of their account
balances in eleven different investment options which included the common stock
of Buckeye Technologies Inc. and ten different mutual funds offered by Fidelity
Investments.
The net investment income of the Master Trust for the years ended June 30, 2002
and 2001 is summarized as follows:
2002 2001
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Interest and dividends $ 1,102,601 $ 4,609,734
Net depreciation in fair value of investments (16,131,979) (24,061,690)
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$(15,029,378) $(19,451,956)
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The Plan's interest in the Master Trust as a percentage of net assets of the
Master Trust was 41.6% at June 30, 2001.
The fair value of individual investments which represent five percent (5%) or
more of the Plan's net assets available for benefits as of June 30, 2002 and
2001 is as follows:
2002 2001
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Fidelity Growth & Income Fund $ - $ 11,213,216
Buckeye Technologies Inc. common stock - 7,500,305
Fidelity Spartan U.S. Equity Index Fund - 6,025,511
Fidelity Retirement Money Market Portfolio - 2,260,874
Fidelity Puritan Fund - 2,607,633
During 2002 and 2001, the Plan's investments (including investments bought, sold
and held during the year) appreciated (depreciated) in value as follows:
2002 2001
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Mutual funds $ (4,052,037) $ (4,369,002)
Common stock of Buckeye Technologies Inc. (2,325,399) (4,970,116)
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$ (6,377,436) $ (9,339,118)
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Note 4 - Related party transactions
The Plan purchased $2,414,756 and sold $5,554,649 of the Plan Sponsor's common
stock during the year ended June 30, 2002. During the year ended June 30, 2001,
the Plan purchased $2,317,837 and sold $2,530,150 of the Plan Sponsor's common
stock. The stock held by the Plan at June 30, 2001 had a market value of
$7,500,305.
-7-
BUCKEYE RETIREMENT PLAN
Notes to Financial Statements (Continued)
June 30, 2002 and 2001
Note 4 - Related party transactions (continued)
Plan investments include interests in certain mutual funds managed by Fidelity
Investments Institutional Operations Company, Inc. during the years ended June
30, 2002 and 2001. An affiliate of Fidelity Investments Institutional Operations
Company, Inc. is the trustee as defined by the Plan and therefore, these
investments and related investment transactions qualify as party-in-interest.
Fees paid to Fidelity totaled $34,420 and $33,489 for the years ended June 30,
2002 and 2001, respectively.
The Company provides the Plan with certain management and administrative
services for which no fees are charged.
Note 5 - Tax status
The Plan has received a determination letter from the Internal Revenue Service
stating that the Plan qualifies under the applicable sections of the Internal
Revenue Code (IRC), and is, therefore, not subject to tax under present income
tax law. The Plan, which has been amended since receiving the determination
letter, is required to operate in conformity with the IRC to maintain its
qualification. Management is not aware of any course of action or series of
events that have occurred that might adversely affect the Plan's qualified
status.
Note 6 - Plan merger and termination
The net assets of the Plan were merged with the assets of Buckeye Retirement
Plus Savings Plan on June 28, 2002 and the Plan was terminated on June 30, 2002.
The transferred net assets have been recognized in the accounts of Buckeye
Retirement Plus Savings Plan as of June 28, 2002 at their balances as previously
carried in the accounts of Buckeye Retirement Plan.
-8-
SUPPLEMENTAL SCHEDULE
BUCKEYE RETIREMENT PLAN
Schedule of Assets Held for Investment Purposes Prior to
Transfer of Assets to Other Plan
EIN: 62-1518973 / Plan Number: 002
June 30, 2002
Current
(a) (b)(c) Identity of Issue/Description (e) Value
--- ---------------------------------------------- ---------
Buckeye Master Trust
Mutual funds
* Fidelity Growth & Income Fund $10,506,684
* Fidelity Spartan U.S. Equity Index Fund 5,010,601
* Fidelity Retirement Money Market Portfolio 2,992,019
* Fidelity Puritan Fund 2,639,957
Davis NY Venture A Fund 1,842,146
NB Genesis Trust Fund 1,527,650
Strong Government Securities Fund 890,028
Alger Capital Appreciation Fund 842,892
PIMCO Capital Appreciation Fund 712,168
* Fidelity Diversified International Fund 502,193
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27,466,338
* Buckeye Technologies Inc. common stock 5,823,570
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Total assets held for investment purposes prior to
transfer of assets to other plan $33,289,908
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* Represents a party-in-interest.
-9-
BUCKEYE RETIREMENT PLAN
Exhibit Index
Exhibit No. Description
23 Consent of Independent Auditors
-10-
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Retirement Plan Committee of the Employee Retirement Plans for Buckeye
Technologies Inc. has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BUCKEYE RETIREMENT PLAN
By: /S/ GAYLE L. POWELSON
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Gayle L. Powelson, Senior Vice President, Chief Financial Officer
Date: December 26, 2002
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