-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GgCZ55zltB4YtOs/nTmSDSg14N1dxxEcXf+X5/lTAotwgLCl+eSUA6oZ+mN+0DKv 3DJxfQwZGwbyuDfBtYsw3A== 0000950117-96-000667.txt : 19960701 0000950117-96-000667.hdr.sgml : 19960701 ACCESSION NUMBER: 0000950117-96-000667 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANOVER DIRECT INC CENTRAL INDEX KEY: 0000320333 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 138053260 STATE OF INCORPORATION: NV FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08056 FILM NUMBER: 96588480 BUSINESS ADDRESS: STREET 1: 1500 HARBOR BLVD CITY: WEEHAWKEN STATE: NJ ZIP: 07087 BUSINESS PHONE: 2018653800 MAIL ADDRESS: STREET 1: 1500 HARBOR BLVD CITY: WEEHAWKEN STATE: NJ ZIP: 07087 FORMER COMPANY: FORMER CONFORMED NAME: HORN & HARDART CO /NV/ DATE OF NAME CHANGE: 19920703 11-K 1 HANOVER DIRECT, INC, 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities and Exchange Act of 1934 For the fiscal years ended December 31, 1993, 1994 and 1995 A. Full Title of the plan and the address of the plan, if different from that of the issuer named below: HANOVER DIRECT, INC. SAVINGS & RETIREMENT PLAN c/o HANOVER DIRECT, INC. 1500 Harbor Boulevard Weehawken, New Jersey 07087 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: HANOVER DIRECT, INC. 1500 Harbor Boulevard Weehawken, New Jersey 07087 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrative Committee of Hanover Direct, Inc. Savings and Retirement Plan: We have audited the accompanying statements of net assets available for benefits of Hanover Direct, Inc. Savings and Retirement Plan (formerly The Horn & Hardart Company Savings Plan) as of December 31, 1995 and 1994, and the related statements of changes in net assets available for benefits for the three years then ended. These financial statements and the schedules referred to below are the responsibility of the Administrative Committee. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 the Administrative Committee, 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, 1995 and 1994, and the changes in net assets available for benefits for the three years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules attached to the financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements but are 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 Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. New York, New York ARTHUR ANDERSEN LLP June 27, 1996 2 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN (FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN) STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1994 AND 1995
1994 FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER INCOME BOND GROWTH EQUITY VALUE DIRECT, INC. FUND FUND FUND FUND FUND STOCK FUND COMBINED ---------------------------------------------------------------------------------------------- ASSETS: Fund receivable $ 328,925 $ 31,279 $ 65,054 $ 56,356 $ 55,276 $ 9,559 $ 546,449 Plan participant loan receivable 427,989 427,989 Unallocated contributions 41,358 7,782 16,339 13,083 19,239 6,093 103,894 Investment in Fixed Income Fund 3,834,203 3,834,203 Investment in Bond Fund 582,898 582,898 Investment in Growth Fund 1,404,022 1,404,022 Investment in Equity Fund 1,289,586 1,289,586 Investment in Balanced Value Fund 1,624,488 1,624,488 Investment in Hanover Direct Inc. Common Stock (at market)- Chemical Bank 44,538 44,538 Investment in Hanover Direct Inc. Common Stock (at market)-PW Trust 839,506 839,506 ---------------------------------------------------------------------------------------------- Total assets 4,632,475 621,959 1,485,415 1,359,025 1,699,003 899,696 10,697,573 LIABILITIES AND FUND BALANCE: Contributions payable to: Hanover Direct, Inc and Subsidiaries 28,206 858 3,219 1,665 3,828 2,305 40,081 Participants - ---------------------------------------------------------------------------------------------- Net assets available for benefits $4,604,269 $ 621,101 $1,482,196 $ 1,357,360 $1,695,175 $ 897,391 $10,657,492 ---------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------
1995 FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER INCOME BOND GROWTH EQUITY VALUE DIRECT, INC. FUND FUND FUND FUND FUND STOCK FUND COMBINED ----------------------------------------------------------------------------------------------- ASSETS: Fund receivable $ 40,474 $ 13,984 $ 45,556 $ 34,818 $ 33,862 $ 11,521 $ 180,215 Plan participant loan receivable 425,939 425,939 Unallocated contributions 16,613 6,975 22,534 18,380 20,669 6,045 91,216 Investment in Fixed Income Fund 4,225,843 4,225,843 Investment in Bond Fund 741,289 741,289 Investment in Growth Fund 2,140,680 2,140,680 Investment in Equity Fund 1,896,783 1,896,783 Investment in Balanced Value Fund 2,322,203 2,322,203 Investment in Hanover Direct Inc. Common Stock (at market)- Chemical Bank - Investment in Hanover Direct Inc. Common Stock (at market)-PW Trust 416,849 416,849 ----------------------------------------------------------------------------------------------- Total assets 4,708,869 762,248 2,208,770 1,949,981 2,376,734 434,415 12,441,017 LIABILITIES AND FUND BALANCE: Contributions payable to: Hanover Direct, Inc and Subsidiaries 10,985 5,532 18,638 6,499 8,302 14,020 63,976 Participants 29,439 4,753 18,147 6,830 13,222 5,328 77,719 ----------------------------------------------------------------------------------------------- Net assets available for benefits $4,668,445 $ 751,963 $2,171,985 $ 1,936,652 $2,355,210 $ 415,067 $12,299,322 ----------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements. HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN (FORMERLY THE HORN & HARDART COMPANY SAVINGS PLAN) STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE THREE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
1993 PARTICIPANT DIRECTED FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER INCOME BOND GROWTH EQUITY VALUE DIRECT, INC. FUND FUND FUND FUND FUND STOCK FUND COMBINED ---------------------------------------------------------------------------------------------- INCREASE IN NET ASSETS: Interest income $ 73,172 $ 139 $ 275 $ 275 $ 313 $ 101 $ 74,275 Change in plan participant loan receivable 208,526 208,526 Contributions Participants 2,057,907 2,057,907 Hanover Direct, Inc. and subsidiaries (net of credited forfeitures of $0, $36,579 and $44,691 in 1993, 1994 and 1995, respectively 428,289 428,289 Interfund transfers (3,767,622) 493,687 934,526 968,591 1,246,768 124,050 -- ----------- ------------ -------- ------------ ---------- ------------ ----------- (1,281,426) 493,687 934,526 968,591 1,246,768 124,050 2,486,196 ----------- ------------ -------- ------------ ---------- ------------ ----------- Total additions (999,728) 493,826 934,801 968,866 1,247,081 124,151 2,768,997 DECREASE IN NET ASSETS: Disbursements, withdrawals, terminations and administrative costs 1,200,843 4,126 9,389 9,273 12,488 3,083 1,239,202 Unallocated forfeitures 24,135 384 759 555 777 9,969 36,579 Change in contribution receivable rollover -- Net change in depreciation (appreciation) on fund investments (46,751) (13,092) (42,048) (39,127) (54,702) (1,098,589) (1,294,309) ----------- ------------ -------- ------------ ---------- ------------ ----------- Total deductions (additions) 1,178,227 (8,582) (31,900) (29,299) (41,437) (1,085,537) (18,528) ----------- ------------ -------- ------------ ---------- ------------ ----------- Net increase (decrease) (2,177,955) 502,408 966,701 998,165 1,288,518 1,209,688 2,787,525 NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 5,293,444 -- -- -- -- 158,886 5,452,330 ----------- ------------ -------- ------------ ---------- ------------ ----------- NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 3,115,489 $ 502,408 $966,701 $ 998,165 $1,288,518 $ 1,368,574 $ 8,239,855 ----------- ------------ -------- ------------ ---------- ------------ ----------- ----------- ------------ -------- ------------ ---------- ------------ -----------
1994 PARTICIPANT DIRECTED FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER INCOME BOND GROWTH EQUITY VALUE DIRECT, INC. FUND FUND FUND FUND FUND STOCK FUND COMBINED ------------------------------------------------------------------------------------------------- INCREASE IN NET ASSETS: Interest income $ 8,258 $ 284 $ 678 $ 477 $ 688 $ 969 $ 11,354 Change in plan participant loan receivable 219,463 219,463 Contributions Participants 2,732,479 2,732,479 Hanover Direct, Inc. and subsidiaries (net of credited forfeitures of $0, $36,579 and $44,691 in 1993, 1994 and 1995, respectively 610,792 610,792 Interfund transfers (1,403,579) 107,684 495,778 316,174 389,186 94,757 -- ----------- ------------ ---------- ------------ ---------- ------------ ------------ 1,939,692 107,684 495,778 316,174 389,186 94,757 3,343,271 ----------- ------------ ---------- ------------ ---------- ------------ ------------ Total additions 2,167,413 107,968 496,456 316,651 389,874 95,726 3,574,088 DECREASE IN NET ASSETS: Disbursements, withdrawals, terminations and administrative costs 1,208,284 4,230 13,572 12,886 17,032 833 1,256,837 Unallocated forfeitures 17,142 1,211 3,828 1,665 3,219 2,305 29,370 Change in contribution receivable rollover (346,412) (23,321) (52,789) (42,377) (36,076) (4,966) (505,941) Net change in depreciation (appreciation) on fund investments (200,381) 7,155 16,350 (14,718) (958) 568,737 376,185 ----------- ------------ ---------- ------------ ---------- ------------ ------------ Total deductions (additions) 678,633 (10,725) (19,039) (42,544) (16,783) 566,909 1,156,451 ----------- ------------ ---------- ------------ ---------- ------------ ------------ Net increase (decrease) 1,488,780 118,693 515,495 359,195 406,657 (471,183) 2,417,637 NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 3,115,489 502,408 966,701 998,165 1,288,518 1,368,574 8,239,855 ----------- ------------ ---------- ------------ ---------- ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 4,604,269 $ 621,101 $1,482,196 $ 1,357,360 $1,695,175 $ 897,391 $ 10,657,492 ----------- ------------ ---------- ------------ ---------- ------------ ------------ ----------- ------------ ---------- ------------ ---------- ------------ ------------
1995 PARTICIPANT DIRECTED HANOVER FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED DIRECT, INCOME BOND GROWTH EQUITY VALUE INC. FUND FUND FUND FUND FUND STOCK FUND COMBINED ----------------------------------------------------------------------------------------------- INCREASE IN NET ASSETS: Interest income $ 4,953 $ 283 $ 719 $ 561 $ 782 $ 1,442 $ 8,740 Change in plan participant loan receivable (2,050) (2,050) Contributions Participants 2,101,045 2,101,045 Hanover Direct, Inc. and subsidiaries (net of credited forfeitures of $0, $36,579 and $44,691 in 1993, 1994 and 1995, respectively 565,861 565,861 Interfund transfers (814,105) 66,472 263,508 195,330 242,071 46,724 -- ----------- ------------ ---------- ------------ ---------- ---------- ------------ 1,852,801 66,472 263,508 195,330 242,071 46,724 2,666,906 ----------- ------------ ---------- ------------ ---------- ---------- ------------ Total additions 1,855,704 66,755 264,227 195,891 242,853 48,166 2,673,596 DECREASE IN NET ASSETS: Disbursements, withdrawals, terminations and administrative costs 1,700,905 5,756 22,630 20,028 24,840 13,052 1,787,211 Unallocated forfeitures 10,985 2,829 18,638 6,499 5,571 14,020 58,542 Change in contribution receivable rollover 346,412 23,321 52,789 42,377 36,076 4,966 505,941 Net change in depreciation (appreciation) on fund investments (266,774) (96,013) (519,619) (452,305) (483,669) 498,452 (1,319,928) ----------- ------------ ---------- ------------ ---------- ---------- ------------ Total deductions (additions) 1,791,528 (64,107) (425,562) (383,401) (417,182) 530,490 1,031,766 ----------- ------------ ---------- ------------ ---------- ---------- ------------ Net increase (decrease) 64,176 130,862 689,789 579,292 660,035 (482,324) 1,641,830 NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 4,604,269 621,101 1,482,196 1,357,360 1,695,175 897,391 10,657,492 ----------- ------------ ---------- ------------ ---------- ---------- ------------ NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 4,668,445 $ 751,963 $2,171,985 $ 1,936,652 $2,355,210 $ 415,067 $ 12,299,322 ----------- ------------ ---------- ------------ ---------- ---------- ------------ ----------- ------------ ---------- ------------ ---------- ---------- ------------ The accompanying notes are an integral part of these statements.
HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN (formerly The Horn & Hardart Company Savings Plan) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993, 1994 and 1995 NOTE 1. DESCRIPTION OF THE PLAN The Hanover Direct, Inc. Savings and Retirement Plan (the "Plan"), formerly The Horn & Hardart Company Savings Plan, commenced April 1, 1983. Participation in the Plan is available to all eligible employees of Hanover Direct, Inc. and its subsidiaries (the "Company") that have attained the age of 21, have credit for not less than one year of service (1000 hours), and have applied for participation in the Plan. Participants whose annual base salary is under $66,000 may make pre-tax contributions of up to 10% of their total annual compensation ("Basic Contribution"). The Company matches one-third of these pre-tax contributions up to 6% of their total annual compensation ("Employer Contribution"). These same participants may contribute up to 10% of their total annual compensation on a voluntary basis ("Voluntary Contribution"). The Voluntary Contributions are not tax-deferred and must, therefore, be considered an after-tax contribution. Voluntary Contributions are not matched by the Company. The participants have the right to elect that contributions (Basic, Employer, and Voluntary Contributions) be allocated to any combination of six funds. The six funds are Fixed Income Fund, Hanover Direct, Inc. Stock Fund, which invests only in common stock of the Company, a party in interest, Conservative Bond Fund, Capital Growth Fund, Conservative Equity Fund, and a Balanced Value Fund. A participant whose total annual compensation is in excess of $66,000, or a highly compensated employee ("HCE"), is limited to pre-tax contributions of 4-1/2% of their total annual compensation. The Company matches one-third of these contributions. No Voluntary Contributions are permitted by an HCE. The maximum limitation on employee pre-tax contributions for 1995 and 1994 was $9,240. In 1995 the HCE maximum compensation limit for contributions was $150,000. The Plan elected to maintain a 4-1/2% maximum contribution level on HCE's, limiting this group to a maximum contribution of $6,750. There were 1,621, 2,086 and 1,706 participants in the Plan at December 31, 1993, 1994 and 1995, respectively. A participant will become 100% vested in the account value of the Employer's Contribution upon the earlier of: the completion of five calendar years of vesting service, retirement or 5 termination after reaching age 62, death while an employee, or because of permanent disability. Participants are fully vested in their Basic Contributions immediately. A participant may elect to withdraw from his Voluntary Contribution account an amount not to exceed his vested account value. Forfeitures by reason of termination, withdrawal or lapse of participation are used to reduce the Company's contribution for that particular year. Forfeitures of $29,370 from the 1994 Plan year were used to reduce Company contributions to participants in 1995. In 1995, forfeitures amounted to $74,215 of which $15,321 were used to reduce Company contributions for 1995. The remainder will be used to reduce Company contributions to participants in 1996. Participants are allowed to take out loans of up to 50% of their individual vested balance as of the most current Plan valuation. The minimum loan is $500 while the maximum is $50,000. The loans can be for a period between one to five years, in whole year increments, bearing a fixed rate of interest of the Prime Rate plus one percent, determined at the time of loan issuance. Each participant can have only one loan outstanding at any one time and the loan can be repaid before the end of the original term. The Plan participant loan receivable amounted to $425,939 and $427,989 at December 31, 1995 and 1994, respectively with interest rates ranging from 7% to 10% at the end of 1995. The Plan is administered by the 401-K Committee (the "Committee") which is comprised of two persons who serve at the sole discretion of the Company's Board of Directors without compensation from the Plan. The Committee has general authority to control and manage the operation and administration of the Plan, including authority to appoint and remove trustees and to adopt rules interpreting or implementing the Plan. Administrative costs of the Plan are borne by the Plan and were, $94,981 and $63,712 in 1995 and 1994, respectively. These costs are included in disbursements, withdrawals, terminations and administrative costs. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Investments in the Company's common stock are stated at market value as determined by reference to published market data. Purchases and sales of securities are recorded on a trade date basis, and interest is recorded on the accrual basis. Investments in the Fixed Income Fund, Conservative Bond Fund, Balanced Value Fund, Conservative Equity Fund, and Capital Growth Fund are stated at market value. The accompanying financial statements have been prepared on the accrual basis of accounting. Certain prior year amounts have been reclassified to conform to the current year presentation. 6 NOTE 3. INVESTMENTS In December 1992, the Company appointed Pain Webber Trust Company ("PWTC") as the Investment Advisor/Custodian of the Plan funds. Five funds plus Company stock were made available to all plan participants as investment options effective April 1, 1993. A brief description of the investment strategies of each funds is as follows: Contributions to the Conservative Bond Fund are invested in investment grade bonds and other fixed income securities. The fund may maintain a cash equivalent position not exceeding 25% of the Fund's total value. Balanced Value Fund contributions are invested in equity and fixed income securities. Contributions to the Conservative Equity Fund are invested in equity securities of conservative companies with medium to large market capitalizations. Contributions to the Capital Growth Fund are invested in the equity of companies. Contributions to the Hanover Direct, Inc. Stock Fund are invested in the common stock of the Company, a party in interest. As of December 31, 1994 and December 31, 1995, the stock fund held 242,669 and 254,915 shares respectively, at corresponding market values of $884,044 and $416,849. The stock price at June 18, 1996, was $1.75 per share. All contributions and distributions are made to/from the Fixed Income Fund. All of the above mentioned investments exceed 5% of the Plan's net assets available for benefits as of December 31, 1995 and December 31, 1994. NOTE 4. UNALLOCATED CONTRIBUTIONS The Unallocated contributions consist of employee and employer contributions that as of December 31, 1994 and December 31, 1995 have not been allocated to the proper participant elected funds. These amounts were invested in a money market fund earning interest until the allocations were made in the first quarter of 1995 and 1996, respectively. NOTE 5. FUND RECEIVABLE The Fund receivable consists of unallocated employee and employer contributions owed to the fund for 1994 and 1995. These amounts were received by the fund in 1995 and 1996, respectively, and then subsequently allocated among the proper funds. NOTE 6. CONTRIBUTION PAYABLE The December 31, 1994 contribution payable consisted of unvested Employer Contributions forfeited by terminated Plan participants and excess Employer Contributions made by Hanover Direct, Inc. The forfeited amounts and the excess contribution were used to reduce the Company's contributions to participants in 1995. Some participants requesting loan withdrawals at the end of the 1994 plan year were not paid until 1995. These withdrawals amounted to $2,000. 7 The December 31, 1995 contribution payable consists of unvested Employer Contributions forfeited by terminated plan participants and participant requested withdrawals not disbursed by the end of the plan year. The forfeited amounts will be used to reduce the Company's contributions to participants in 1996. The participant requested withdrawals included loan withdrawals which amounted to approximately $20,000. All requested withdrawals will be paid out to participants in 1996. NOTE 7. CHANGE IN CONTRIBUTION RECEIVABLE ROLLOVER During the 1994 Plan year, the Plan recorded a receivable of $505,941 due from the Tweeds, Inc. Profit sharing Plan (the "Tweeds Plan") (Tweeds, Inc. is a subsidiary of the Company which was acquired in September 1993). This receivable was recorded in anticipation of the rollover of assets from the Tweeds Plan based on the fair market value of the Tweeds Plan assets at December 31, 1994. During the 1991 Plan year, all of the assets of the Tweeds Plan which were held by MBL Life Assurance Corporation ( a Trustee of the Tweeds Plan) were placed into a frozen trust by the State of New Jersey Department of Insurance as a result of bankruptcy proceedings against the fund sponsor. The assets in the frozen trust have been guaranteed by a consortium of life insurance companies and state guaranty associations for a seven year rehabilitation period. In addition, the individual participants of Tweeds Plan may elect not to rollover their accounts into the Plan when assets are released from the frozen trust. Because of these uncertainties, the Plan removed this receivable from its assets during the 1995 Plan year. At such a time when the remaining assets of the Tweeds Plan are transferred to the Plan, they will be accounted for as a rollover contribution. NOTE 8. NET DEPRECIATION (APPRECIATION) ON FUND INVESTMENTS The net (appreciation)/depreciation on fund investments at December 31, 1995 and December 31, 1994 consists of unrealized (appreciation)/depreciation of approximately ($1,230,000) and $578,000 and an aggregate realized gain of approximately $90,000 and $202,000, respectively. The Plan sold investments during Plan years 1995 and 1994 with approximate aggregate costs of $1,362,000 and $965,000, resulting in aggregate proceeds of approximately $1,452,000 and $1,167,000 respectively. The realized gain/loss on the investments sold is the difference between the market value at the beginning of the Plan year (or on the purchase date if purchased during the Plan year) and the date of sale. NOTE 9. PLAN TERMINATION The Plan may be terminated at any time at the Company's sole discretion although the Company has not expressed any intention to do so currently. Upon termination, contributions by the Company and participants cease and all Company contributions which had been credited to each participants' account become fully vested immediately. 8 NOTE 10. TAX STATUS The Plan has received a favorable determination letter from the Internal Revenue Service stating that the Plan, as of October 6, 1994 is qualified under Section 401(k) of the Internal Revenue Code and, accordingly, is exempt from federal income taxes. The Plan was amended and restated during the year ended December 31, 1989 to reflect the impact of the Tax Reform Act of 1986 and the Technical and Miscellaneous Revenue Act of 1988. In the Committee's opinion, based on the advice of counsel, the Plan continues to be a qualified plan as defined by the Internal Revenue Code. NOTE 11. SUBSEQUENT EVENT In November 1995, the Company appointed T. Rowe Price Retirement Plan Services, Inc. ("Price") as the new investment advisor/custodian of the Plan's funds. Five funds plus Company Stock were made available to all Plan participants as investment options effective April 1, 1996. On that date, the balances in the PWTC Funds were transferred to one or more of the new Price funds with the most similar investment objectives. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Administrative Committee have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. HANOVER DIRECT, INC. SAVINGS & RETIREMENT PLAN Date: June 27, 1996 s/Wayne P. Garten ----------------- Wayne P. Garten Executive Vice President Chief Financial Officer s/Edward J. O'Brien ------------------- Edward J. O'Brien Senior Vice President Treasurer and Secretary 10 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN (FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN) FORM 5500-ITEM 27A SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995
CURRENT DESCRIPTION COST VALUE - ------------------------------------------------------------------------- -------------------------- Investment in Fixed Income Portfolio- Paine Webber Trust $ 3,748,454 $ 4,225,843 Investment in Conservative Bond Portfolio-Paine Webber Trust 644,122 741,289 Investment in Capital Growth Portfolio-Paine Webber Trust 1,613,792 2,140,680 Investment in Conservative Equity Portfolio-Paine Webber Trust 1,420,553 1,896,783 Investment in Balanced Value Portfolio-Paine Webber Trust 1,813,338 2,322,203 Investment in Hanover Direct, Inc. Common Stock(1) 691,256 416,849 Plan Participant Loan Receivable(2) 425,939 425,939 ----------- ----------- Total assets held for investment purposes 10,357,454 12,169,586 ----------- ----------- ----------- -----------
(1) Represents party in interest. (2) Terms of these loans generally range from 1 to 5 years and bear interest ranging from 7.0% to 10.0%. HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN (FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN) FORM 5500-ITEM 27D SCHEDULE OF REPORTABLE TRANSACTIONS(1) FOR THE YEAR ENDED DECEMBER 31, 1995 SERIES OF TRANSACTIONS
IDENTITY OF EXPENSE PARTY PURCHASE SELLING LEASE INCURRED WITH CURRENT NET INVOLVED DESCRIPTION PRICE(2) PRICE(2) RENTAL TRANSACTION COST VALUE GAIN - ------------------------------------------------ ------------------------------------------------------------------------------ Paine Webber Investment in Fixed Income Trust Portfolio $17.09 $ -- $ -- $-- $658,717 $658,717 $ -- Paine Webber Investment in Fixed Income Trust Portfolio $ -- 17.34 $ -- $-- 511,546 561,620 50,074
(1) Defined as five percent of Plan net assets at beginning of Plan year. (2) Average price. EX-1 2 EXHIBIT 1 Exhibit 1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into Hanover Direct, Inc.'s (formerly The Horn & Hardart Company) previously filed Registration Statement File No. 2-94286. New York, New York ARTHUR ANDERSEN LLP June 27, 1996 -----END PRIVACY-ENHANCED MESSAGE-----