-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, tUiKU54fHUvxWlbSRAuxlB9Xk9wOjTt4lo+uhOfXYsOr9nEH6kTxQxR4r0PeVRMO lH143vI/lLKIvWKbtojsCQ== 0000950123-94-001068.txt : 19940702 0000950123-94-001068.hdr.sgml : 19940702 ACCESSION NUMBER: 0000950123-94-001068 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANOVER DIRECT INC /DE// CENTRAL INDEX KEY: 0000320333 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94534948 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. FORM 11-K 1 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 year ended December 31, 1993 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 the 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 2 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN DECEMBER 31, 1993 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE ---- FINANCIAL STATEMENTS Report of Independent Public Auditors 1 Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to the Financial Statements 4 SUPPLEMENTAL SCHEDULES Form 5500 - Item 27A - Schedule of Assets Held for Investment Purposes 8 Form 5500 - Item 27D - Schedule of Reportable Transactions 9
3 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, 1993 and 1992, and the related statements of changes in net assets available for benefits for the three years ended December 31, 1993. These financial statements and the supplemental schedules 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 as of December 31, 1993 and 1992, and the changes in net assets available for benefits for the years ended December 31, 1993, 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 referred to in the index are presented for the purpose 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. These supplemental schedules 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. ARTHUR ANDERSEN & CO. New York, New York June 8, 1994 4 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1993 AND 1992
December 31, 1993 ------------------------------------------------------------------------------------- Fixed Conservative Capital Conservative Balanced Hanover Income Bond Growth Equity Value Direct, Inc. Fund Fund Fund Fund Fund StockFund Combined ------------------------------------------------------------------------------------- Assets: - - - - - ------------------------------------------ Fund Receivable (Payable) $48,794 $3,307 $5,368 $5,924 $6,849 ($1,748) $68,494 Interfund Receivable (Payable) 38,352 (38,352) 0 Plan Participant Loan Receivable 208,526 208,526 Unallocated Contributions 38,168 6,210 14,055 10,488 15,455 5,902 90,278 Investment in Group Annuity Contract 11,641 11,641 Investment in GIC Fund - PW Trust 2,775,053 2,775,053 Investment in Bond Fund - PW Trust 493,213 493,213 Investment in Growth Fund - PW Trust 948,678 948,678 Investment in Equity Fund - PW Trust 982,663 982,663 Investment in Balanced Value Fund - PW Trust 1,267,462 1,267,462 Investment in Hanover Direct, Inc. Common Stock (at market) - Chemical Bank 76,575 76,575 Investment in Hanover Direct, Inc. Common Stock (at market) - PW Trust 1,326,883 1,326,883 ------------------------------------------------------------------------------------- Total Assets 3,120,534 502,730 968,101 999,075 1,289,766 1,369,259 8,249,465 Liabilities and Fund Balance: Contributions Payable: Hanover Direct, Inc. & Subsidiaries 0 Due to HDI Union Fund 5,045 322 1,400 910 1,248 685 9,610 Accrued Cash Withdrawals 0 ------------------------------------------------------------------------------------- Net Assets Available for Benefits $3,115,489 $502,408 $966,701 $998,165 $1,288,518 $1,368,574 $8,239,855 =====================================================================================
The accompanying Notes to the Financial Statements are an integral part of these statements.
December 31, 1992 ------------------------------------------- Fixed Hanover Income Direct, Inc. Fund StockFund Combined ------------------------------------------ Assets: - - - - - ----------------------------------------------- Fund Receivable (Payable) $0 Interfund Receivable (Payable) ($106,739) $106,739 0 Plan Participant Loan Receivable 0 Unallocated Contributions 0 Investment in Group Annuity Contract 1,681,673 1,681,673 Investment in GIC Fund - PW Trust 3,785,036 3,785,036 Investment in Bond Fund - PW Trust 0 Investment in Growth Fund - PW Trust 0 Investment in Equity Fund - PW Trust 0 Investment in Balanced Value Fund - PW Trust 0 Investment in Hanover Direct, Inc. Common Stock (at market) - Chemical Bank 0 Investment in Hanover Direct, Inc. Common Stock (at market) - PW Trust 56,983 56,983 ------------------------------------------ Total Assets 5,359,970 163,722 5,523,692 Liabilities and Fund Balance: Contributions Payable: Hanover Direct, Inc. & Subsidiaries 66,526 66,526 Due to HDI Union Fund 0 Accrued Cash Withdrawals 4,836 4,836 ------------------------------------------ Net Assets Available for Benefits $5,293,444 $158,886 $5,452,330 ==========================================
The accompanying Notes to the Financial Statements are an integral part of these statements. 2 5 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE THREE YEARS ENDED DECEMBER 31, 1993
December 31, 1991 December 31, 1992 --------------------------------------- ------------------------------------------ Fixed Hanover Fixed Hanover Income Direct, Inc. Income Direct, Inc. Fund StockFund Combined Fund StockFund Combined --------------------------------------- ------------------------------------------ Increases in Net Assets Attributed to: Interest Income $360,623 $360,623 $354,811 $354,811 Plan Participant Loan Receivable 0 0 Contributions : Participants 810,261 38,833 849,094 966,694 966,694 Hanover Direct, Inc. & Subsidiaries (net of credited forfeitures of $49,886, $45,223 and $0 in 1991, 1992 and 1993, respectively) 233,077 20,845 253,922 283,821 283,821 Interfund Transfers 32,646 (32,646) 0 (90,627) 90,627 0 --------------------------------------- ------------------------------------------ 1,075,984 27,032 1,103,016 1,159,888 90,627 1,250,515 --------------------------------------- ------------------------------------------ Total Additions 1,436,607 27,032 1,463,639 1,514,699 90,627 1,605,326 Decreases in Net Assets Attributed to: Disbursements, Withdrawals, and Terminations 1,409,904 7,644 1,417,548 657,195 657,195 Unallocated Forfeitures 0 95,292 95,292 Unrealized Depreciation (Appreciation) on Fund Investments 12,580 12,580 (2,407) (2,407) --------------------------------------- ------------------------------------------ Total Deductions 1,409,904 20,224 1,430,128 752,487 (2,407) 750,080 --------------------------------------- ------------------------------------------ Net Increase (Decrease) 26,703 6,808 33,511 762,212 93,034 855,246 Net Assets Available for Benefits: Begining of Year 4,504,529 59,044 4,563,573 4,531,232 65,852 4,597,084 --------------------------------------- ------------------------------------------ End of Year $4,531,232 $65,852 $4,597,084 $5,293,444 $158,886 $5,452,330 ======================================= ==========================================
The accompanying Notes to the Financial Statements are an integral part of these statements.
December 31, 1993 ------------------------------------------------------------------------------- Fixed Conservative Capital Conservative Balanced Hanover Income Bond Growth Equity Value Direct, Inc. Fund Fund Fund Fund Fund StockFund ------------------------------------------------------------------------------- Increases in Net Assets Attributed to: Interest Income $73,172 $139 $275 $275 $313 $101 Plan Participant Loan Receivable 208,526 Contributions : Participants 2,057,907 Hanover Direct, Inc. & Subsidiaries (net of credited forfeitures of $49,886, $45,223 and $0 in 1991, 1992 and 1993, respectively) 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 ------------------------------------------------------------------------------- Total Additions (999,728) 493,826 934,801 968,866 1,247,081 124,151 Decreases in Net Assets Attributed to: Disbursements, Withdrawals, and Terminations 1,200,843 4,126 9,389 9,273 12,488 3,083 Unallocated Forfeitures 24,135 384 759 555 777 9,969 Unrealized Depreciation (Appreciation) on Fund Investments (46,751) (13,092) (42,048) (39,127) (54,702) (1,098,589) ------------------------------------------------------------------------------- Total Deductions 1,178,227 (8,582) (31,900) (29,299) (41,437) (1,085,537) ------------------------------------------------------------------------------- Net Increase (Decrease) (2,177,955) 502,408 966,701 998,165 1,288,518 1,209,688 Net Assets Available for Benefits: Begining of Year 5,293,444 158,886 ------------------------------------------------------------------------------- End of Year $3,115,489 $502,408 $966,701 $998,165 $1,288,518 $1,368,574 ===============================================================================
The accompanying Notes to the Financial Statements are an integral part of these statements.
December 31, 1993 ----------------- Combined ----------------- Increases in Net Assets Attributed to: Interest Income $74,275 Plan Participant Loan Receivable 208,526 Contributions : Participants 2,057,907 Hanover Direct, Inc. & Subsidiaries (net of credited forfeitures of $49,886, $45,223 and $0 in 1991, 1992 and 1993, respectively) 428,289 Interfund Transfers 0 ----------------- 2,486,196 ----------------- Total Additions 2,768,997 Decreases in Net Assets Attributed to: Disbursements, Withdrawals, and Terminations 1,239,202 Unallocated Forfeitures 36,579 Unrealized Depreciation (Appreciation) on Fund Investments (1,294,309) ----------------- Total Deductions (18,528) ----------------- Net Increase (Decrease) 2,787,524 Net Assets Available for Benefits: Begining of Year 5,452,330 ----------------- End of Year $8,239,855 =================
The accompanying Notes to the Financial Statements are an integral part of these statements. 3 6 HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1993 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 $64,245 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. 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 (both Basic and Employer matching contribution) be allocated to any combination of six funds. The six funds are Fixed Income ("GIC") 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. In 1992 there were only two funds, the Fixed Income Fund and the Hanover Direct, Inc. Stock Fund. Participants whose total annual compensation is in excess of $64,245 are 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 those participants whose total annual compensation exceeds $64,245. There is an $8,994 maximum limitation on employee pre-tax contributions for 1993 ($8,728 in 1992). There were 841, 868 and 1,621 participants in the Plan at December 31, 1991, 1992 and 1993, respectively. Beginning April 1, 1993, 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. 4 7 A participant is 100% vested in the account value of the employer's contribution upon completion of five calendar years of vesting service, upon retirement or termination after reaching age 62, upon death while an employee, or because of permanent disability. A participant is 20% vested in the Company's matching contribution for each year of service to the Company after a one year eligibility period. A participant may elect to withdraw from his supplemental 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. Unallocated forfeitures of $36,579 will be used to reduce Company contributions to participants in 1994. Administrative costs of the Plan are borne by the contributions and earnings of each fund, and are $34,762 in 1993. These costs are included in disbursements, withdrawals, and terminations. 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 and Guaranteed Income Contract Portfolio (GIC Portfolio) are stated at Contract value which represents cost plus a guaranteed return. Investments in the Conservative Bond Fund, Balanced Value Fund, Conservative Equity Fund, and Capital Growth Fund are stated at initial unit value plus income earned and accrued as of the valuation date, the last bank business day of the month. Certain prior year amounts have been reclassified to conform to the current year presentation. NOTE 3. INVESTMENTS Effective January 1, 1987, New York Life Insurance Company ("New York Life"), 51 Madison Avenue, New York, New York 10010, became the custodian of the funds invested in the Fixed Income Fund. Contributions to the Fixed Income Fund were invested in a Group Annuity Contract with New York Life which guaranteed interest at the rate of 9.45% per annum through 1991 on contributions made in 1989, and for contributions made in 1990 guaranteed interest at a rate of 8.70% per annum through 1992. Effective January 1, 1991, a new Group Annuity Contract (the "Contract") with New York Life was approved. The Contract provides for a guaranteed 8.15% rate of return for 1991 through 1993, on contributions made in 1991. Contributions made during 1993 were invested in the six Paine Webber Funds. In December 1992, the Company appointed Pain Webber Trust Company as the new Investment Advisor/Custodian of the Plan funds. Five new funds plus Company stock were made available to all plan participants as investment options effective on April 1, 1993. Maturing funds that were held at New York Life were rolled over into the GIC Portfolio at Paine Webber Trust Company on December 31, 1992. The Fixed Income Fund, $1.6 million, remained in the 5 8 New York Life Contract earning a rate of 8.15% per annum, until its maturity on December 31, 1993, when it was transferred to the Paine Webber Trust GIC Portfolio. Contributions to the Conservative Bond Fund are invested in investment grade bonds and other fixed income securities offering the best total return prospectus. 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 where the potential return is greatest and risk is least. Contributions to the Conservative Equity Fund are invested in equity securities of conservative companies with medium to large market capitalizations and strong balance sheets so as to have the Fund perform superior to the Standard and Poors 500 Index in dividend yield, price to earnings ratio and return on shareholders' equity. Contributions to the Capital Growth Fund are invested in the equity of companies capable of consistent long-term above-average growth with favorable earnings potential. Contributions to the Hanover Direct, Inc. Stock Fund are invested in the common stock of the Company. As of December 31, 1992 and December 31, 1993, the stock fund held 23,993 and 227,387 shares, respectively, at corresponding market values of $56,983 and $1,403,356. The stock price at June 8, 1994, was $5.875 per share. All contributions and distributions are made to/from the Fixed Income Fund. NOTE 4. UNALLOCATED CONTRIBUTIONS The unallocated contribution consists of employee and employer contributions that as of December 31, 1993 have not been allocated to the proper participant elected funds. This amount was invested in a money market fund earning interest until the allocation was made in the first quarter of 1994. NOTE 5. FUND RECEIVABLE The fund receivable consists of unallocated employee and employer contributions owed to the fund for 1993. These amounts were received by the fund in 1994 and then subsequently allocated among the proper funds. NOTE 6. CONTRIBUTIONS/WITHDRAWALS PAYABLE Contributions payable for 1992 included unallocated forfeitures which were used to reduce 1993 Company contributions and excess contributions reduced for transaction costs paid by the Plan. The payable for 1993 consists of The Company Store Union Savings and Retirement Plan contributions and earnings deposited in the Plan. The Company acquired Company Store Holdings, Inc. during the 1993 fiscal year. A portion of their employees are covered by a collective bargaining agreement which would prohibit these individuals from participating in the Plan. Contributions by the above mentioned employees were originally made to the Plan until their prohibition was determined. At that time a separate plan was established and substantially all of the contributions were transferred to the new plan. The remaining contributions and earnings were transferred to the new plan in 1994. 6 9 Some participants requesting withdrawals during the 1993 plan year were not paid until 1994. These withdrawals amounted to $10,380. NOTE 7. TAX STATUS The Plan has received a favorable determination letter from the Internal Revenue Service stating that the Plan, as of December 10, 1982, 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 management's opinion, based on the advice of counsel, the Plan continues to be a qualified plan as defined by the Internal Revenue Code. 7 10 HANOVER DIRECT SAVINGS AND RETIREMENT PLAN FORM 5500 - ITEM 27A SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1993
Description Cost Market Value - - - - - -------------------------------------------------------------------- Interest Receivable on Investment in Guaranteed Income Contract - maturity 12/31/93 at 8.15% $0 $11,641 Investment in Guaranteed Income Contract Portfolio - Paine Webber Trust 2,726,722 2,862,015 Investment in Conservative Bond Portfolio - Paine Webber Trust 479,983 502,730 Investment in Capital Growth Portfolio - Paine Webber Trust 906,356 968,101 Investment in Conservative Equity Portfolio - Paine Webber Trust 943,262 999,075 Investment in Balanced Value Portfolio - Paine Webber Trust 1,212,448 1,289,766 Investment in Hanover Direct, Inc. Common Stock (1) 548,401 1,407,611 Plan Participant Loan Receivable $208,526 208,526 ----------- Total assets held for investment purposes $8,249,465 ===========
(1) Represents party in interest. 8 11 HANOVER DIRECT SAVINGS AND RETIREMENT PLAN FORM 5500 - ITEM 27D SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1993
Expense Identity Purchase Selling Lease Incurred With Party Involved Description Price (1) Price (1) Rental Transaction Cost Market Net Gain - - - - - --------------------------------------------------------------------------------------------------------------------------------- Paine Webber Trust Investment in Guaranteed Income Contract Portfolio $15.40 ------- ------- $298,777 $298,777 ------- Paine Webber Trust Investment in Guaranteed Income Contract Portfolio $14.71 ------- ------- $3,183,400 $3,248,502 $65,102 Paine Webber Trust Investment in Capital Growth Portfolio $11.28 ------- ------- $894,724 $894,724 ------- Paine Webber Trust Investment in Balanced Value Portfolio $17.53 ------- ------- $1,199,201 $1,199,201 ------- Paine Webber Trust Investment in Conservative Bond Portfolio $16.93 ------- ------- $474,126 $474,126 ------- Paine Webber Trust Investment in Conservative Equity Portfolio $17.45 ------- ------- $934,874 $934,874 -------
(1) Average price 9 12 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 by the undersigned thereunto duly authorized. HANOVER DIRECT, INC SAVINGS AND RETIREMENT PLAN Date: June 8, 1994 s/Wayne P. Garten ------------------- Wayne P. Garten s/Michael P. Sherman -------------------- Michael P. Sherman s/Edward J. O'Brien -------------------- Edward J. O'Brien 10 13 EXHIBIT I 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 (successor to The Horn & Hardart Company) previously filed Registration Statement File No. 2-94286. /S/ ARTHUR ANDERSEN & CO. ------------------------- New York, New York June 13, 1994 -----END PRIVACY-ENHANCED MESSAGE-----