11-K 1 c06386e11vk.htm ANNUAL REPORT e11vk
 

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission file number: 33-56626
     A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
MARSH SUPERMARKETS, INC. 401(k) PLAN
     B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
MARSH SUPERMARKETS, INC.
9800 Crosspoint Boulevard
Indianapolis, Indiana 46256
 
 

 


 

TABLE OF CONTENTS

Item 4.
SIGNATURES
REQUIRED INFORMATION
     
Item 4.
  The Plan is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Plan’s financial statements and schedules have been prepared in accordance with the financial reporting requirements of ERISA. Such financial statements and schedules are included in this Report in lieu of the information required by Items 1-3 of Form 11-K.
Financial Statements and Exhibits
(a)   Financial Statements:
Report of Independent Registered Public Accounting Firm
Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2005 and 2004
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2005
Notes to Financial Statements
(b)   Supplemental Schedules:
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
Schedule H, Line 4j – Schedule of Reportable Transactions
(Supplemental schedules not listed are omitted due to the absence of conditions under which they are required).
(c)   Signature Page
 
(d)   Exhibits
     23.1 Consent of Ernst & Young LLP

 


 

Report of Independent Registered Public Accounting Firm
Retirement Committee
Marsh Supermarkets, Inc. 401 (k) Plan
We have audited the accompanying statements of net assets available for benefits of Marsh Supermarkets, Inc. 401 (k) Plan as of December 31, 2005 and 2004, and the related statement of changes in net assets available for benefits for the year ended December 31, 2005. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 at December 31, 2005 and 2004, and the changes in its net assets available for benefits for the year ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2005, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the 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 are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Indianapolis, Indiana
June 26, 2006

1


 

Marsh Supermarkets, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits
                 
    December 31  
    2005     2004  
     
Assets
               
Investments, at fair value:
               
Money market funds
  $ 265,047     $ 862,168  
Marsh common stock
    17,546,078       23,634,720  
Mutual funds
    46,611,338       39,745,103  
Corporate bonds
    15,923,489       14,202,793  
Loans to participants
    5,271,154       4,652,762  
     
Total investments
    85,617,106       83,097,546  
 
               
Accrued income
    86,864       65,788  
Cash
    45,416       29,202  
     
 
    85,749,386       83,192,536  
 
               
Liabilities
               
Due to broker
    45,651        
Administrative expenses
    50,070       51,715  
     
Net assets available for benefits
  $ 85,653,665     $ 83,140,821  
     
See accompanying notes.

2


 

Marsh Supermarkets, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2005
         
Additions:
       
Investment income
  $ 2,194,045  
Contributions:
       
Employee
    5,802,165  
Employer
    2,025,378  
Rollovers
    29,330  
 
     
Total additions
    10,050,918  
 
       
Deductions:
       
Benefits paid to participants or their beneficiaries
    (5,839,258 )
Administrative expenses
    (257,841 )
 
     
Total deductions
    (6,097,099 )
 
       
Net realized and unrealized depreciation in fair value of investments
    (1,440,975 )
 
     
Net increase
    2,512,844  
 
       
Net assets available for benefits:
       
Beginning of year
    83,140,821  
 
     
End of year
  $ 85,653,665  
 
     
See accompanying notes.

3


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements
December 31, 2005
1. Description of the Plan
The following description of the Marsh Supermarkets, Inc. 401(k) Plan (the Plan) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions.
General
The Plan was established by Marsh Supermarkets, Inc. (the Company or Employer) to provide retirement benefits for participating eligible employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Retirement Committee of the Employees’ Pension Plan of Marsh Supermarkets, Inc. and Subsidiaries, appointed by the Board of Directors of the Company, serves as the Plan Administrative Committee. The trustee of the Plan is National City Bank.
The Plan is a defined-contribution retirement plan covering employees of the Company and its subsidiaries who have met certain requirements for participation. The Plan provides for normal retirement at age 65, but includes a provision that allows participants to elect to receive benefits prior to their normal retirement age. The Plan also has provisions allowing for hardship withdrawals and loans.
Contributions
The Plan provides for employees to contribute from 1% to 50% (up to the IRS maximum) of their compensation on a pretax basis. The Company has contributed amounts equal to 25% of employee before tax contributions (excluding contributions in excess of 6% of compensation) (the Employer Matching Contributions) in cash to the Plan’s Marsh Stock Fund. The Plan also provides for Grandfathered Contributions and discretionary Profit Sharing Contributions, as determined by the Board of Directors of the Company. The Grandfathered Contributions are nondiscretionary and are allocated to certain longer service employees who participated in the Employees’ Pension Plan of Marsh Supermarkets, Inc and Subsidiaries (the Pension Plan) to offset benefits that would have accrued under the Pension Plan had it not been frozen as of December 31, 1996. Grandfathered Contributions of $837,130 were made in 2005.

4


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
1. Description of the Plan (continued)
Allocations to Participants
Income on the investments of the funds is allocated daily to participants’ accounts based on their account balance. Forfeited balances of terminated participants’ nonvested accounts are used to pay administrative expenses of the Plan or reduce future Company contributions.
Investment Options
Upon enrollment in the Plan, participants may direct their contributions to any of the investment options offered by the Plan. Company contributions are made in the Marsh Stock Fund.
Payment of Benefits
Upon retirement or termination, a participant may receive contributions made to the Plan, the vested portion of the employer contributions, and an allocable share of the Plan’s earnings or losses. If requested, benefits are payable in a lump sum no later than 60 days after the end of the plan year in which a participant reaches normal retirement age or terminates employment.
Expenses of the Plan
Investment management fees reduce plan earnings. All other plan expenses are paid by the Company.
Vesting Policy
The Employer Matching Contributions and Profit Sharing Contributions are subject to vesting and forfeitures. 401(k) deferrals, rollovers, and Grandfathered Contributions are 100% vested and nonforfeitable. The Employer Matching Contributions and Profit Sharing Contributions are fully vested after three years.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from one to five years. The loans are secured by the balance in the participant’s account and bear an interest rate of Prime plus one. Loans shall bear a fixed interest rate throughout their term. Principal and interest is paid ratably through weekly payroll deductions.

5


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
1. Description of the Plan (continued)
Change in Recordkeeper
Effective January 1, 2005, the plan recordkeeper changed from Federated Retirement Plan Services to Hewitt Associates.
2. Summary of Accounting Policies
Investments
Investments are carried at fair value. The fair value of investments in securities traded on a national securities exchange is determined based on the last reported sale on the last business day of the plan year as quoted in business publications and by security brokers. Dividends are recorded as income on the dividend record date.
Use of Estimates
Preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

6


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
3. Investments
Investments that represent 5% or more of the Plan’s net assets are presented in the following table:
                 
    2005     2004  
     
Investments at fair value as determined by quoted market price:
               
Mutual funds:
               
Fidelity Contrafund
  $ 28,746,782     $ 24,822,216  
PIMCO Total Return Bond Fund
    8,745,709       8,388,784  
Federated Capital Preservation Fund
    6,752,036       5,814,010  
Euro Pac Growth Fund
    4,942,675        
 
Common stock:
               
Marsh Class A Common Stock*
    7,023,637       8,813,220  
Marsh Class B Common Stock*
    10,522,441       14,821,500  
 
*   Includes nonparticipant-directed investments.
During 2005, the Plan’s investments (including investments bought, sold, and held during the year) appreciated (depreciated) as presented in the following table:
         
    Net Realized and  
    Unrealized  
    Appreciation  
    (Depreciation)  
    In Fair Value  
Investments at fair value as determined by quoted market price:
       
Mutual funds
  $ 4,303,545  
Common stock
    (5,744,520 )
 
     
 
  $ (1,440,975 )
 
     

7


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
4. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the changes in net assets related to the nonparticipant-directed investments is as follows:
                 
    December 31  
    2005     2004  
     
Net assets:
               
Marsh common stock*:
               
Class A
  $ 7,023,637     $ 8,813,220  
Class B
    10,522,441       14,821,500  
Money Market
    265,047       862,168  
     
 
  $ 17,811,125     $ 24,496,888  
     
 
The investment in common stock represents both participant-directed and nonparticipant-directed funds as transactions within the fund could not be reasonably segregated.
         
    Year Ended  
    December 31, 2005  
Changes in net assets:
       
Contributions
  $ 2,713,445  
Investment income
    9,669  
Net realized and unrealized depreciation in fair value of investment
    (5,759,363 )
Transfers to participant-directed funds
    (1,853,179 )
Benefits paid to participants
    (1,755,604 )
Administrative expenses
    (40,731 )
 
     
 
  $ (6,685,763 )
 
     
5. Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated June 13, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to the issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator has indicated that it will take the necessary steps, if any, to bring the Plan’s operation into compliance with the Code.

8


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
6. Plan Termination
Although it has not expressed any intent to do so, the Company has the right to discontinue its plan contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts.
7. Reconciliation to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31:
                 
    2005     2004  
     
Net assets available for benefits per the financial statements
  $ 85,653,665     $ 83,140,821  
Less benefits payable
    (28,402 )      
     
Net assets available for benefits per the Form 5500
  $ 85,625,263     $ 83,140,821  
     
The following is a reconciliation of benefit payments per the financial statements to the Form 5500 for the year ended December 31, 2005:
         
Benefit payments per the financial statements
  $ 5,839,258  
Add benefits payable at December 31, 2005
    28,402  
Less benefits payable at December 31, 2004
     
 
     
Benefit payments to participants per Form 5500
  $ 5,867,660  
 
     
8. Risk and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect a participant’s account balance and the amounts reported in the statement of net assets available for benefits.

9


 

Marsh Supermarkets, Inc. 401(k) Plan
Notes to the Financial Statements (continued)
9. Subsequent Events
On May 2, 2006, the Company signed a definitive merger agreement to be acquired by MSH Supermarkets Holding Corp, an affiliate of Sun Capital Partners Group IV, Inc. No plan to terminate, merge, or otherwise amend the Plan has been made as a result of the agreement.

10


 

Marsh Supermarkets, Inc. 401(k) Plan
Schedule H, Line 4i – Schedule of Assets
(Held at End of Year)
EIN: 35-0918179          Plan Number: 004
December 31, 2005
                     
Identity of Issue, Borrower,   Description of         Current  
Lessor, or Similar Party   Investment     Cost   Value  
Mutual funds:
                   
Allegiant S & P 500 Index Fund
  301,601 shares   **   $ 3,233,159  
American Growth Fund
  12,910 shares   **     396,081  
Barclays Global Invs Fds Inc 2020
  127,874 shares   **     2,026,802  
Barclays Global Invs Fds Inc 2030
  16,911 shares   **     260,256  
Barclays Global Invs Fds Inc 2040
  126 shares   **     2,298  
Euro Pac Growth Fund
  121,651 shares   **     4,942,675  
Excelsior Value and Restructuring Fund
  16,940 shares   **     782,302  
Federated/Kaufmann Fund
  121,959 shares   **     682,971  
Fidelity Contrafund
  443,897 shares   **     28,746,782  
Harbor Fund Small Cap Growth
  328,014 shares   **     4,077,209  
T. Rowe Price Mid Cap Value
  29,542 shares   **     687,742  
Royce Low-Priced Stock Fund
  49,779 shares   **     773,061  
 
                 
 
                46,611,338  
 
                   
Corporate bond funds:
                   
Barclays Global Lifepath
  28,580 shares   **     320,672  
Barclays Global Invs 2010
  8,126 shares   **     105,072  
Federated Capital Preservation Fund
  675,169 shares   **     6,752,036  
PIMCO Total Return Bond Fund
  832,925 shares   **     8,745,709  
 
                 
 
                15,923,489  
 
                   
Money market fund:
                   
Allegiant Government Money Market Fund
  265,047 shares   265,047     265,047  
 
                   
Common stock:
                   
Marsh Supermarkets, Inc. Class A*
  801,785 shares   11,246,715     7,023,637  
Marsh Supermarkets, Inc. Class B*
  1,213,661 shares   15,147,192     10,522,441  
             
 
          26,393,907     17,546,078  
 
                   
Participant loans   Interest rates ranging from
5.25% to 10.0%
    5,271,154  
 
                 
 
              $ 85,617,106  
 
                 
 
*    Indicates party-in-interest to the Plan.
 
**  Cost is not required for participant-directed investments.

11


 

Marsh Supermarkets, Inc. 401(k) Plan
Schedule H, Line 4j – Schedule of Reportable Transactions
EIN: 35-0918179      Plan Number: 004
Year Ended December 31, 2005
                                                 
                                    Current
Value of
       
                                    Asset on        
            Purchase     Selling     Cost of     Transaction     Net Gain  
Identity of Party Involved   Description of Asset     Price     Price     Asset     Date     or (Loss)  
 
Category (iii) – Series of transactions in excess of 5% of plan assets:                                        
Allegiant Government Money Market Fund
          $ 3,917,144     $     $ 3,917,144     $ 3,917,144     $  
 
                  3,652,097       3,652,097       3,652,097        
Information concerning (e) “Lease Rental” and (f) “Expense Incurred with Transaction” has not been presented as it is not applicable. There were no category (i), (ii), or (iv) reportable transactions during 2005.

12


 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Retirement Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
                 
 
               
    MARSH SUPERMARKETS, INC. 401(k) PLAN    
 
               
 
      By:   /s/ P. Lawrence Butt    
 
               
 
          P. Lawrence Butt,    
 
          Secretary    
 
          Retirement Committee    
 
               
June 29, 2006