-----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, Lj1JkxTXV0iFmqWQlhDnsKcV4TAuXwHR7h0xm6+QoCyJgO70iwWDeBjsThZgrU7p ynUDjc/fT76MLquIS7SAyQ== 0000950152-97-004948.txt : 19970702 0000950152-97-004948.hdr.sgml : 19970702 ACCESSION NUMBER: 0000950152-97-004948 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970701 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FABRI CENTERS OF AMERICA INC CENTRAL INDEX KEY: 0000034151 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 340720629 STATE OF INCORPORATION: OH FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06695 FILM NUMBER: 97633543 BUSINESS ADDRESS: STREET 1: 5555 DARROW RD CITY: HUDSON STATE: OH ZIP: 44236 BUSINESS PHONE: 2166562600 MAIL ADDRESS: STREET 1: 5555 DARROW ROAD CITY: HUDSON STATE: OH ZIP: 44236 FORMER COMPANY: FORMER CONFORMED NAME: CLEVELAND FABRIC SHOPS INC DATE OF NAME CHANGE: 19681216 FORMER COMPANY: FORMER CONFORMED NAME: CLEVELAND FABRIC SHOPS INC NUMBER THREE DATE OF NAME CHANGE: 19681216 11-K 1 FABRI-CNTRS. EMPLOYEES' SAVS. & PROFIT 11-K 1 As filed with the Securities and Exchange Commission on June 30, 1997 --------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM 11-K /X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 ------------------------------------------- Commission File No: 1-6695 -------------------------- FABRI-CENTERS OF AMERICA, INC. EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN ------------------------------------------ (Full title of the plan and the address of the plan, if different from that of the issuer named below) Fabri-Centers of America, Inc. 5555 Darrow Road Hudson, OH 44236 ---------------- (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) Page 1 of 3 2 REQUIRED INFORMATION Fabri-Centers of America, Inc. Employees' Savings and Profit Sharing Plan (the "Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and schedules of the Plan for the two fiscal years ended December 31, 1996 and 1995, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Exhibit 99 and incorporated herein by this reference. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. FABRI-CENTERS OF AMERICA, INC. EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN By: Fabri-Centers of America, Inc. Employees' Savings and Profit Sharing Plan Committee /S/ Rosalind Thompson - ------------------------------------- Rosalind Thompson June 30, 1997 Committee Chairperson Page 2 of 3 3 FABRI-CENTERS OF AMERICA, INC. EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN EXHIBIT INDEX
Official Exhibit No. Description - --------------------- -------------------------------------------- 23 Consent of Independent Public Accountants 99 Fabri-Centers of America, Inc. Employees' Savings and Profit-Sharing Plan Financial Statements As of December 31, 1996 and 1995 Together With Report of Independent Public Accountants
Page 3 of 3 EX-23 2 EXHIBIT 23 1 Exhibit 23 Consent of Independent Public Accountants As independent public accountants, we hereby consent to the incorporation of our report on the financial statements of the Fabri-Centers of America, Inc. Employees' Savings and Profit Sharing Plan dated April 23, 1997, included in this Form 11-K into the Company's previously filed Registration Statement (Form S-8) pertaining to the Fabri-Centers of America, Inc. Employees' Savings and Profit Sharing Plan (33-32809). Arthur Andersen LLP Cleveland, Ohio June 30, 1997 EX-99 3 EXHIBIT 99 1 EXHIBIT 99 FABRI-CENTERS OF AMERICA, INC. EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Advisory Committee of the Fabri-Centers of America, Inc. Employees' Savings and Profit-Sharing Plan: We have audited the accompanying statements of net assets of the Fabri-Centers of America, Inc. Employees' Savings and Profit-Sharing Plan (the Plan) as of December 31, 1996 and 1995, and the related statement of changes in net assets for the year ended December 31, 1996, as listed in the accompanying index. These financial statements and schedules referred to below are the responsibility of the Plan's management. 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 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 of the Plan as of December 31, 1996 and 1995, and the changes in its net assets for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes (Schedule I) and reportable transactions (Schedule II), as listed in the accompanying index, 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 supplemental schedules have been subjected to the auditing procedures applied in the audit 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. Cleveland, Ohio, April 23, 1997. 3 FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ INDEX TO FINANCIAL STATEMENTS ----------------------------- DECEMBER 31, 1996 ----------------- Statement of Net Assets as of December 31, 1996 Statement of Net Assets as of December 31, 1995 Statement of Changes in Net Assets for the Year Ended December 31, 1996 Notes to Financial Statements Schedule I-Item 27a--Schedule of Assets Held for Investment Purposes as of December 31, 1996 Schedule II-Item 27d--Schedule of Reportable Transactions for the Year Ended December 31, 1996 4 FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ STATEMENT OF NET ASSETS ----------------------- DECEMBER 31, 1996 -----------------
Participant Directed ------------------------------------------------------------------------------ Fidelity Company Company Stock Magellan EB Magic Intermediate Stock Stock Index Fund Fund Fund Income Fund Fund A Fund B ---------- ---- ---- ----------- ------ ------ ASSETS: Investments, at market- Corporate Stocks $ - $ - $ - $ - $ 3,467,393 $ 1,782,558 Insurance Company Investment Contracts - - 700,000 - - - Key Bank- Prism Fidelity Magellan Fund - 2,830,066 - - - - Victory Stock Index Fund 4,108,003 - - - - - Prism Magic Fund - - 4,170,205 - - - Victory Intermediate Income Fund - - - 1,387,723 - - Loan Fund - - - - - - ----------- ----------- ----------- ----------- ----------- ----------- 4,108,003 2,830,066 4,870,205 1,387,723 3,467,393 1,782,558 Employer contribution receivable - - - - - - Participant contribution receivable 25,371 18,156 14,507 10,625 26,581 4,160 Accrued interest receivable 11 20 29 4 - - ----------- ----------- ----------- ----------- ----------- ----------- Total assets 4,133,385 2,848,242 4,884,741 1,398,352 3,493,974 1,786,718 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES: Accrued administrative expenses 3,638 2,547 3,638 1,273 2,351 1,254 ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities 3,638 2,547 3,638 1,273 2,351 1,254 ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS $ 4,129,747 $ 2,845,695 $ 4,881,103 $ 1,397,079 $ 3,491,623 $ 1,785,464 =========== =========== =========== =========== =========== =========== Nonparticipant Directed ------------------------------------------------ Stock Stock Company Company Ownership Ownership Stock Stock Participant Fund A Fund B Fund A Fund B Loans Total ------ ------ ------ ------ ----- ----- ASSETS: Investments, at market- Corporate Stocks $ 229,341 $ 218,796 $ 2,702,346 $ 2,353,307 $ - $10,753,741 Insurance Company Investment Contracts - - - - - 700,000 Key Bank- Prism Fidelity Magellan Fund - - - - - 2,830,066 Victory Stock Index Fund - - - - - 4,108,003 Prism Magic Fund - - - - - 4,170,205 Victory Intermediate Income Fund - - - - - 1,387,723 Loan Fund - - - - 209,695 209,695 ----------- ----------- ----------- ----------- ----------- ----------- 229,341 218,796 2,702,346 2,353,307 209,695 24,159,433 Employer contribution receivable - - 16,039 15,160 - 31,199 Participant contribution receivable - - - - 1,612 101,012 Accrued interest receivable - - - - 501 565 ----------- ----------- ----------- ----------- ----------- ----------- Total assets 229,341 218,796 2,718,385 2,368,467 211,808 24,292,209 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES: Accrued administrative expenses - - 1,832 1,656 - 18,189 ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities - - 1,832 1,656 - 18,189 ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS $ 229,341 $ 218,796 $ 2,716,553 $ 2,366,811 $ 211,808 $24,274,020 =========== =========== =========== =========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement. 5 FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ STATEMENT OF NET ASSETS ----------------------- DECEMBER 31, 1995 -----------------
Participant Directed --------------------------------------------------------------------------------- Equity Insurance Company Company S&P 500 Growth Contract Government Stock Stock Stock Fund Fund Fund Bond Fund Fund A Fund B ----------- ----------- ----------- ----------- ----------- ----------- ASSETS: Cash and cash equivalents $ - $ 28,435 $ 2,780 $ 7,762 $ 29,275 $ 17,152 ----------- ----------- ----------- ----------- ----------- ----------- Investments, at market- Corporate Stocks - - - - 2,565,526 1,477,978 Insurance Company Investment Contracts - - 700,000 - - - Society National Bank- Victory Special Value Stock Fund - 1,821,172 - - - - Victory Stock Index Fund 2,740,115 - - - - - EB Magic Fund - - 3,794,723 - - - Victory Government Mortgage Fund - - - 1,203,753 - - ----------- ----------- ----------- ----------- ----------- ----------- 2,740,115 1,821,172 4,494,723 1,203,753 2,565,526 1,477,978 Employer contribution receivable - - - - - - Participant contribution receivable 53,239 42,293 45,937 26,765 90,482 11,554 Accrued interest receivable - 37 38 24 127 82 ----------- ----------- ----------- ----------- ----------- ----------- Total assets 2,793,354 1,891,937 4,543,478 1,238,304 2,685,410 1,506,766 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES: Accrued administrative expenses 2,244 4,020 4,579 1,937 1,271 236 Other 11,131 - - - - - ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities 13,375 4,020 4,579 1,937 1,271 236 ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS $ 2,779,979 $ 1,887,917 $ 4,538,899 $ 1,236,367 $ 2,684,139 $ 1,506,530 =========== =========== =========== =========== =========== =========== Nonparticipant Directed ----------------------------------------------------- Stock Stock Company Company Ownership Ownership Stock Stock Fund A Fund B Fund A Fund B Total ----------- ----------- ----------- ----------- ----------- ASSETS: Cash and cash equivalents $ - $ - $ 22,909 $ 17,639 $ 125,952 ----------- ----------- ----------- ----------- ----------- Investments, at market- Corporate Stocks 207,919 170,807 2,007,605 1,519,950 7,949,785 Insurance Company Investment Contracts - - - - 700,000 Society National Bank- Victory Special Value Stock Fund - - - - 1,821,172 Victory Stock Index Fund - - - - 2,740,115 EB Magic Fund - - - - 3,794,723 Victory Government Mortgage Fund - - - - 1,203,753 ----------- ----------- ----------- ----------- ----------- 207,919 170,807 2,007,605 1,519,950 18,209,548 Employer contribution receivable - - 51,229 34,017 85,246 Participant contribution receivable - - - - 270,270 Accrued interest receivable - - 100 85 493 ----------- ----------- ----------- ----------- ----------- Total assets 207,919 170,807 2,081,843 1,571,691 18,691,509 ----------- ----------- ----------- ----------- ----------- LIABILITIES: Accrued administrative expenses 142 232 994 244 15,899 Other 2,309 2,282 - - 15,722 ----------- ----------- ----------- ----------- ----------- Total liabilities 2,451 2,514 994 244 31,621 ----------- ----------- ----------- ----------- ----------- NET ASSETS $ 205,468 $ 168,293 $ 2,080,849 $ 1,571,447 $18,659,888 =========== =========== =========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement. 6 FABRI-CENTERS OF AMERICA ------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ STATEMENT OF CHANGES IN NET ASSETS ---------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------
INCREASES: Interest and dividend income $ 16,184 $ 58,469 $ 9,631 $ 15,286 $ 75 $ 272 $ 20,620 $ 67,296 Employer contributions -- -- -- -- -- -- -- -- Participant contributions 138,582 611,150 94,139 649,186 105,870 218,826 65,104 246,477 Net realized gain (loss) on sale of investments 2,676 103,348 1,939 13,387 1,357 20,663 (791) 794 Net unrealized gain (loss) on investments 141,555 383,129 78,362 231,376 59,867 158,288 (22,990) 8,099 Other 1,405 111 17 398 13 32,895 21 25 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 300,402 1,156,207 184,088 909,633 167,182 530,944 61,964 322,691 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- DECREASES: Distributions to former participants 57,256 173,110 84,561 235,321 117,177 253,773 52,664 67,033 Administrative expenses -- 14,428 -- 13,089 -- 15,042 -- 8,211 Other -- 158 -- 333 4,997 24 -- 5 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 57,256 187,696 84,561 248,743 122,174 268,839 52,664 75,249 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET INCREASE FOR THE YEAR 243,146 968,511 99,527 660,890 45,008 262,105 9,300 247,442 BALANCE BEGINNING OF YEAR 2,779,979 -- 1,887,917 -- 4,538,899 -- 1,236,367 -- INTERFUND TRANSFERS: Investment election 143,496 (5,385) 166,898 30,463 1,747 33,344 47,770 (143,800) Transfer to new funds (3,166,621) 3,166,621 (2,154,342) 2,154,342 (4,585,654) 4,585,654 (1,293,437) 1,293,437 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- BALANCE END OF YEAR $ -- $4,129,747 $ -- $2,845,695 $ -- $4,881,103 $ -- $1,397,079 ========== ========== ========== ========== ========== ========== ========== ========== NonParticipant Directed --------------------- --------------------------------------------- Company Company Stock Stock Company Company Stock Stock Ownership Ownership Stock Stock Participant Fund A Fund B Fund A Fund B Fund A Fund B Loans Total ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------- INCREASES: Interest and dividend income $ 646 $ 1,751 $ -- $ 2 $ 504 $ 2,312 $ 3,728 $ 196,776 Employer contributions -- -- -- -- 472,997 384,174 -- 857,171 Participant contributions 779,351 92,266 -- -- -- -- -- 3,100,951 Net realized gain (loss) on sale of investments 30,123 18,079 4,926 6,581 23,477 23,867 -- 247,426 Net unrealized gain (loss) on investments 547,874 506,731 37,923 65,795 426,991 668,979 -- 3,291,979 Other 382 24 -- -- 297 32 15,156 50,776 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- 1,358,376 618,851 42,849 69,378 924,266 1,079,364 18,884 7,745,079 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- DECREASES: Distributions to former participants 274,277 178,640 21,956 20,736 213,760 235,839 -- 1,986,103 Administrative expenses 8,825 5,092 -- -- 6,877 6,722 -- 78,286 Other 17,217 7,267 -- -- 13,419 9,594 13,544 66,558 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- 300,319 90,999 21,956 20,736 234,056 252,155 13,544 2,130,947 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- NET INCREASE FOR THE YEAR 1,058,057 427,852 20,893 48,642 690,210 827,209 5,340 5,614,132 BALANCE BEGINNING OF YEAR 2,684,139 1,506,530 205,468 168,293 2,080,849 1,571,447 -- 18,659,888 INTERFUND TRANSFERS: Investment election (250,573) (148,918) 2,980 1,861 (54,506) (31,845) 206,468 -- Transfer to new funds -- -- -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- BALANCE END OF YEAR $3,491,623 $1,785,464 $ 229,341 $ 218,796 $2,716,553 $2,366,811 $ 211,808 $24,274,020 ========== ========== ========== ========== ========== ========== ========== =========== The accompanying notes to financial statements are an integral part of this statement.
7 FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ NOTES TO FINANCIAL STATEMENTS ----------------------------- DECEMBER 31, 1996 AND 1995 -------------------------- 1. SUMMARY OF PLAN: ---------------- The original Fabri-Centers of America, Inc. Employees' Profit-Sharing Plan was adopted as of September 1, 1974, and has been amended on occasion in order to, among other things, maintain compliance with the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). Effective January 1, 1983, the plan was amended, restated and renamed the Fabri-Centers of America, Inc. Employees' Savings and Profit-Sharing Plan (the Plan), which included a payroll-based employee stock ownership feature (PAYSOP). Effective August 2, 1995, the Plan was amended to reflect the recapitalization of the Fabri-Centers of America, Inc. common stock whereby each existing common share was exchanged for one Class A share and one Class B share. Effective July 1, 1996, the Committee amended the Plan into the form of the Prism Prototype Retirement Plan and Trust. This amendment allows participants to make investment election changes on a monthly basis in addition to allowing for participant loans against their existing accounts subject to certain limitations. The principal provisions of the Plan are as follows: Eligibility - ----------- All active employees of Fabri-Centers of America, Inc. (the Company) and wholly owned subsidiaries that have adopted the Plan, who have been continuously employed as employees of the Company for a period of one year, have attained the age of 21, have completed at least 1,000 hours of service and are not a member of a recognized collective bargaining organization, are eligible to participate in the Plan. Deferred Income Contributions - ----------------------------- Pursuant to a Compensation Deferral Agreement permitted under Section 401(k) of the Internal Revenue Code, plan participants may elect to defer from 1% to 10% of their compensation, subject to an annual limitation under the Internal Revenue Code, and such amount will be contributed to the Plan by the Company as a deferred income contribution. Employer Matching Contributions - ------------------------------- The Company will contribute to the Plan, subject to the forfeiture provision outlined below, an adjustable percentage of the deferred income contributions made by participants, (up to a 4% employee deferred compensation contribution), as well as such additional amounts as the Board of Directors may determine. These contributions are allocated among participants in proportion to the deferred income contributions made on their behalf for such period and credited to their separate accounts. The Company's matching contribution can range from 0% to 100% and can be modified prior to the beginning of a month by a duly authorized officer of the Company. For the 1996 and 1995 plan years, the Company's matching contribution was 50% (of the first 4% contributed 8 -2- by the participant). All company matching contributions are in the form of common stock of the Company and are invested in Company Stock Fund A and Company Stock Fund B. Company contributions are funded only to the extent that they exceed cumulative forfeitures of participants terminated from the Plan. Investment of Employee Contributions - ------------------------------------ Under the Plan, each participant selects the manner in which deferred income contributions to their account are to be invested. Contributions are invested in 5% increments, up to 100%, in any one of the following investment options: a. Victory Stock Index Fund -- Investments are made in a portfolio of stocks attempting to match the Standard & Poor's 500 index with a rate of return that may fluctuate substantially and providing for no guarantee against loss. This fund replaced the S&P 500 Stock Fund. There are 1,589 participants in this fund. b. Fidelity Magellan Fund -- Investments are made in common stocks of domestic, foreign and multi-national companies believed to have growth potential and providing for no guarantee against loss. This fund replaced the Equity Growth Fund. There are 1,261 participants in this fund. c. Prism EB Magic Fund -- Investments are made in investment contracts issued by insurance companies and banks providing for stability of principal and attractive rates of interest. This fund replaced the Insurance Contract Fund. There are 1,082 participants in this fund. d. Victory Intermediate Income Fund -- Investments are made in investment- grade debt securities issued by corporations and obligations of the U.S. Government and its agencies or instrumentalities dependent upon the prevailing interest rates and providing for a lower risk of loss. This fund replaced the Government Bond Fund. There are 981 participants in this fund. e. Company Stock Fund A - Investments are made in Fabri-Centers of America, Inc. Class A common stock and providing for no guarantee against loss. There are 2,304 participants in this fund. f. Company Stock Fund B - Investments are made in Fabri-Centers of America, Inc. Class B common stock and providing for no guarantee against loss. There are 2,704 participants in this fund. A participant may change his investment election with respect to future contributions and, separately, past contributions on a monthly basis. PAYSOP Contributions - -------------------- Prior to February 1, 1987, the Company made PAYSOP contributions to the Stock Ownership Fund for each year in an amount equal to the tax credit available under Section 44G of the Internal Revenue Code. This tax credit was eliminated by the Tax Reform Act of 1986 and, therefore, the Company no longer makes PAYSOP contributions. Distributions of the PAYSOP account balances to terminated participants are made in shares of Company 9 -3- common stock unless otherwise specified by the participant. There are 430 participants with account balances in the PAYSOP A and PAYSOP B Funds. Vesting Requirements - -------------------- Contributions allocated to the accounts of participants in accordance with PAYSOP provisions and deferred income contributions made on behalf of participants in accordance with compensation deferral agreements are fully vested and nonforfeitable at all times. Company matching contributions generally vest ratably over a four-year period, based on length of employment. A participant's entire interest under the Plan becomes fully vested upon his death while employed, attainment of age 65, or permanent and total disability. Trustee's Fees and Other Expenses - --------------------------------- Costs incident to the purchase and sale of securities, such as brokerage commissions and stock transfer taxes, are paid by the respective funds, unless otherwise paid by the Company. All other costs and expenses incurred in administering the Plan, including fees of the trustee, are paid by the Plan, unless otherwise paid by the Company. During 1996 and 1995, all trustee fees and other administrative expenses were paid by the Plan. Termination - ----------- Although the Company has no current intentions to terminate the Plan, the Board of Directors, without further approval of shareholders, may terminate the Plan at any time. If the Plan is terminated, the Company contributions credited to each affected participant shall fully vest immediately. 2. SIGNIFICANT ACCOUNTING POLICIES: ------------------------------- Basis of Accounting - ------------------- The accompanying financial statements are prepared on the accrual basis of accounting. As such, management must make certain estimates and assumptions that affect the reported amounts of net assets available for plan benefits and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets available for plan benefits during the period. Actual results could differ from those estimates. Valuation of Investments - ------------------------ All investments, except the Confederation Life Guaranteed Insurance Contracts (the GIC's) (Note 6), which are classified as insurance company investment contracts, are stated at market value based on published market data. A summary of the Plan's investments as of December 31, 1996 is presented on supporting Schedule I of this report. The GIC's are stated at contract value. Contract value represents contributions made under the contract, plus interest at the contract rate, less administration costs and funds distributed as prescribed by the contract. Income Taxes - ------------ In March of 1997, the Plan received a favorable determination letter from the Internal Revenue Service indicating that the Plan is exempt from income taxes under current regulations. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. 10 -4- Estimates - --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. INFORMATION CERTIFIED BY TRUSTEE: --------------------------------- The trustee, Key Trust Company of Ohio, N.A., maintains records of investment transactions and participant accounts and determines the valuation of the investment portfolio of each fund. Information with respect to (1) investments held and their market values as presented in (a) the statements of net assets, and (b) Schedule I, (2) investment income, net realized gain on the sale of investments and net unrealized gain on investments for the year ended December 31, 1996, and (3) Schedule II has been reported by the trustee as being complete and accurate. 4. REPORTABLE TRANSACTIONS: ------------------------ Schedule II summarizes the Plan's reportable transactions for the year ended December 31, 1996. A reportable transaction is any transaction or series of transactions, as defined, involving amounts in excess of 5% of the current value of the Plan's assets as of the beginning of the Plan year. 5. PARTY-IN-INTEREST TRANSACTIONS: ------------------------------- There have been no prohibited transactions with a party in interest, as defined by ERISA. 6. CONFEDERATION LIFE INSURANCE CONTRACTS: --------------------------------------- On August 12, 1994, the Canadian Superintendent of Financial Institutions took control of the Confederation Life Insurance Company (Confederation Life) with the intent of liquidating Confederation Life's assets. As shown on the accompanying schedule of assets held for investment purposes (Schedule I), at December 31, 1996, the Plan held two GIC's issued by Confederation Life with a total cost of $700,000. Subsequent to the Plan's year-end, the Company agreed to a rehabilitation plan whereby the Plan will receive the original cost of the two GIC's held, plus an undetermined portion of the interest that has accrued. As the interest income to be received is not determinable at this time, no potential gain has been reflected in the accompanying financial statements. 11 SCHEDULE I FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES --------------------------------------------------------- DECEMBER 31, 1996 ----------------- EMPLOYER IDENTIFICATION NUMBER: 34-0720629 ------------------------------------------ PLAN NUMBER: 001 ----------------
Number Market of Shares Issuer Cost Value - ------------ -------------------------------------------------- -------------- -------------- STOCK INDEX FUND: 269,908 Victory Stock Index Fund $ 3,724,874 $ 4,108,003 ------------- ------------- FIDELITY MAGELLAN FUND: 256,565 Prism Fidelity Magellan Fund 2,598,690 2,830,066 ------------- ------------- EB MAGIC FUND: 364,331 Prism Magic Fund 4,011,917 4,170,205 Insurance Company Investment Contracts- Confederation Life Insurance Co., 8.84%, Contract No. GIC GA61897, due 500,000 August 17, 1994 500,000 500,000 Confederation Life Insurance Co., 8.84%, Contract No. GIC GA61900, due 200,000 August 17, 1994 200,000 200,000 ------------- -------------- 700,000 700,000 ------------- -------------- Total EB Magic Fund 4,711,917 4,870,205 ------------- --------------
12 -2- SCHEDULE I Continued
Number Market of Shares Issuer Cost Value - ------------ -------------------------------------------------- -------------- -------------- INTERMEDIATE INCOME FUND: 145,769 Victory Intermediate Income Fund $ 1,379,624 $ 1,387,723 ------------- -------------- COMPANY STOCK FUND A: Fabri-Centers of America, Inc. Class A 382,700 Common Stock 5,862,563 6,169,739 ------------- -------------- COMPANY STOCK FUND B: Fabri-Centers of America, Inc. Class B 269,103 Common Stock 3,978,476 4,135,865 ------------- -------------- STOCK OWNERSHIP FUND A: Fabri-Centers of America, Inc. Class A 14,235 Common Stock 220,646 229,341 ------------- -------------- STOCK OWNERSHIP FUND B: Fabri-Centers of America, Inc. Class B 14,241 Common Stock 211,832 218,796 ------------- -------------- PARTICIPANT LOANS: - Loan Fund 200,902 209,695 ------------- -------------- Total all funds $22,889,524 $24,159,433 ============= ==============
13 SCHEDULE II FABRI-CENTERS OF AMERICA, INC. ------------------------------ EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN ------------------------------------------ ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS --------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------ EMPLOYER IDENTIFICATION NUMBER: 34-0720629 ------------------------------------------ PLAN NUMBER: 001 ----------------
Cost or Number of Purchase Selling Transactions Price Price Gain ------------ ----- ----- ---- SALES: Employee Benefits Money Market Fund 259 $5,425,948 $5,425,948 $ - Victory Special Value Fund 5 1,696,511 2,046,857 350,346 Victory S&P 500 Stock Fund 7 2,472,121 2,486,770 14,649 Society EB Magic Fund 7 3,607,488 3,608,845 1,357 Victory Government Mortgage Fund 5 1,317,415 1,293,636 (23,779) Fabri-Centers of America, Inc. Class A Common Stock 72 453,323 415,203 (38,120) Prism Fidelity Magellan Fund 61 317,661 331,047 13,386 Victory Stock Index Fund 57 219,902 288,801 68,899 Prism Magic Fund 51 334,697 342,739 8,042 Victory Intermediate Income Fund 60 203,331 204,125 794 PURCHASES: Employee Benefits Money Market Fund 318 $5,479,751 $ - $ - Victory Special Value Fund 8 133,240 - - Victory S&P 500 Stock Fund 8 276,367 - - Society EB Magic Fund 6 58,247 - - Victory Government Mortgage Fund 10 113,724 - - Fabri-Centers of America, Inc. Class A Common Stock 30 913,577 - - Prism Fidelity Magellan Fund 42 2,916,350 - - Victory Stock Index Fund 50 3,322,197 - - Prism Magic Fund 49 4,356,614 - - Victory Intermediate Income Fund 39 1,582,954
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