-----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, WYEh/d1B0uRvHcAuonPhp+Up1yY6zafwB8Vh+C9RZObdqxJkbSeP51klDxmfu7ds K0WNU/r/cZtsxtnXFFBOYA== 0000085149-96-000010.txt : 19960629 0000085149-96-000010.hdr.sgml : 19960629 ACCESSION NUMBER: 0000085149-96-000010 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960127 FILED AS OF DATE: 19960627 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSES STORES INC CENTRAL INDEX KEY: 0000085149 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 560382475 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00631 FILM NUMBER: 96587015 BUSINESS ADDRESS: STREET 1: PO DRAWER 947 STREET 2: 218 S GARNETT ST CITY: HENDERSON STATE: NC ZIP: 27536 BUSINESS PHONE: 9194302600 10-K/A 1 Item 14(a) 3 Exhibits has been amended to include exhibit 99.5. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K/A (Mark One) (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 27, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No 0-631 ROSE'S STORES, INC. (Exact name of registrant as specified in its charter) Delaware 56-0382475 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 218 S. Garnett Street Henderson, NC 27536 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (919) 430-2600 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, No Par Value Stock Warrants (to purchase Common Stock) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( X ) (continued on following page) (continued from previous page) APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and report required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No As of February 19, 1996, of the 10,000,000 shares of common stock delivered to First Union National Bank of North Carolina as Escrow Agent pursuant to the Modified and Restated First Amended Joint Plan of Reorganization, the Company has 8,158,316 shares of common stock outstanding. The remaining 865,936 shares held in escrow will be distributed by FUNB in satisfaction of disputed Class 3 claims as and when such claims are resolved. If all pending claims are resolved adversely to the Company, approximately 8,852,901 shares of common stock will be outstanding. If all pending claims are resolved in accordance with the Company's records, approximately 8,601,172 shares of common stock will be outstanding. The foregoing estimates do not include any additional shares that may be issued with respect to late-filed claims which the Bankruptcy Court may allow which have not been filed as of the date hereof or the effect of nego- tiated settlements made for amounts in excess of amounts shown in the Company's records. To the extent that escrowed shares of common stock are not used to satisfy claims, they will revert to the Company and will be retired or held in the treasury of the Company. As of March 21, 1996, the aggregate market value of common stock held by non-affiliates (assuming all pending claims are resolved adversely to the Com- pany) of the Registrant was approximately $18,046,671. PAGE PART IV ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. FINANCIAL STATEMENTS Independent Auditors' Report Statements of Operations for the thirty-nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the years ended January 28, 1995 and January 29, 1994 Balance Sheets - January 27, 1996 and January 28, 1995 Statements of Stockholders' Equity for the thirty-nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the years ended January 28, 1995 and January 29, 1994 Statements of Cash Flows for the thirty-nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the years ended January 28, 1995 and January 29, 1994 Notes to the Financial Statements 2. FINANCIAL STATEMENT SCHEDULES All schedules are omitted because they are not applicable or not required, or because the required information is included in the financial statements or notes thereto. 3. EXHIBITS Exhibit No. 10.1 Employment Agreement with R. Edward Incorporated Anderson, Chairman of the Board, by reference President and Chief Executive Officer, dated May 29, 1995 (Incorporated by reference to Exhibit 10.1 to Registrant's Form 10-Q for the quarter ended July 29, 1995). 10.2 New Retirement Benefits Savings Plan, Incorporated effective July 1, 1995. (Incorporated by by reference reference to Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended July 29, 1995). 10.3 Order of the United States Bankruptcy Court, Incorporated Eastern District of North Carolina, Raleigh by reference Division dated February 13, 1995, approving the amendment changing the record date for distributions of the New Rose's Warrants and New Rose's Common Stock Secondary Distribution to the Effective Date of the Plan (Incorporated by reference to Registrant's Form 8-K dated February 13, 1995). 10.4 Order dated April 24, 1995, approving the Incorporated Modified and Restated First Amended Joint by reference Plan of Reorganization dated April 19, 1995 (Incorporated by reference to Exhibit (c)(2) to Registrant's Current Report on Form 8-K dated April 24, 1995). PAGE 10.5 The Registrant's Revolving Credit and related Incorporated agreements (Incorporated by reference to by reference Exhibit (c)(1) through (c)(10) to Registrant's Current Report on Form 8-K dated April 28, 1995): (a) Revolving Credit Agreement dated as of April 28, 1995, among the Registrant as Borrower, the lending institutions listed on Schedule 1 to the Agreement and The First National Bank of Boston and The CIT Group/Business Credit, Inc., as Facility Agents and The First National Bank of Boston as Administrative Agent (the "Credit Agreement"). (b) Security Agreement dated as of April 28, 1995, between the Registrant and The First National Bank of Boston as Collat- eral Agent for the lending institutions who are parties to the Credit Agreement. (c) $62,500,000 Revolving Credit Note dated April 28, 1995, issued to The First National Bank of Boston pursuant to the Credit Agreement. (d) $62,500,000 Revolving Credit Note dated April 28, 1995, issued to The CIT Group/ Business Credit, Inc., pursuant to the Credit Agreement. (e) Deed of Trust, Assignment of Rents and Security Agreement dated as of April 27, 1995 by and among Registrant, First National Bank of Boston, The CIT Group/ Business Credit, Inc., pursuant to the Credit Agreement. (f) Master Release Agreement dated as of April 28, 1995 by and between General Electric Capital Corporation and Registrant. (g) Post-Effective Date GE Assumption Agree- ment dated as of April 28, 1995 by and between General Electric Capital Corpora- tion and Registrant. (h) GE Deferred Obligations Agreement dated as of April 28, 1995 by and between General Electric Capital Corporation and Registrant. PAGE (i) Warrant Agreement dated as of April 28, 1995, between the Registrant and First Union National Bank of North Carolina as Warrant Agent. (j) Escrow Agreement dated as of April 28, 1995, between the Registrant and First Union National Bank of North Carolina as Escrow Agent. 10.6 Letter of Credit and Mortgage Trust Agreement Incorporated dated May 8, 1995 (Incorporated by reference by reference to Exhibit (c)(1) to Registrant's Current Report on Form 8-K dated April 28, 1995). 10.7 Second Deed of Trust dated May 8, 1995 Incorporated (Incorporated by reference to Exhibit (c)(2) by reference to Registrant's Current Report on Form 8-K dated April 28, 1995). 10.8 Standby Letter of Credit dated May 8, 1995 Incorporated (Incorporated by reference to Exhibit (c)(3) by reference to Registrant's Current Report on Form 8-K dated April 28, 1995). 10.9 Severance Pay Plan dated as of December 14, 1995. 27. Financial Data Schedule 99.1 Waiver and Amendment No. 1 dated as of Incorporated July 31, 1995 (Incorporated by reference to by reference Exhibit 99.1 to Registrant's Current Report on Form 8-K dated July 31, 1995). 99.2 Waiver and Amendment No. 2 dated as of Incorporated September 8, 1995 (Incorporated by reference to by reference Exhibit 99.2 to Registrant's Current Report on Form 8-K dated July 31, 1995). 99.3 Waiver and Amendment No. 3 dated as of Incorporated September 29, 1995 (Incorporated by reference by reference to Exhibit 99.3 to Registrant's Current Report on Form 8-K dated July 31, 1995). 99.4 Waiver and Amendment No. 4 dated as of January 31, 1996. 99.5 Annual Report for the Rose's Stores, Inc., Retirement Savings 401(k) Plan for the year ended December 31, 1995. PAGE (b) REPORTS ON FORM 8-K The Registrant filed the following reports on Form 8-K during the last quarter of the period covered by this report: Report on Form 8-K dated October 28, 1995, Incorporated reporting under Item 5 the monthly and year- by reference to-date financial results and other financial data for the period ended October 28, 1995, together with projected financial information for similar periods as contained in the Company's plan for the year ended January 27, 1996. The financial results were included as an exhibit in Item 7. Report on Form 8-K dated December 2, 1995, Incorporated reporting under Item 5 the monthly and year-to- by reference date financial results and other financial data for the period ended December 2, 1995, together with projected financial information for similar periods as contained in the Company's revised plan for the year ended January 27, 1996. The financial results were included as an exhibit in Item 7. Report on Form 8-K dated December 30, 1995, Incorporated reporting under Item 5 the monthly and year-to by reference date financial results and other financial data for the period ended December 30, 1995, together with projected financial information for similar periods as contained in the Company's revised plan for the year ended January 27, 1996. The financial results were included as an exhibit in Item 7. Report on Form 8-K dated March 1, 1996, Incorporated reporting under Item 5 the agreement in by reference principle regarding the acquisition by merger of Rose's by Fred's. PAGE SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 11-K (Mark One) (X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No 0-631 ROSE'S STORES, INC. RETIREMENT SAVINGS 401(k) PLAN ROSE'S STORES, INC. 218 S. Garnett Street Henderson, NC 27536 Exhibit No. 23 Consent of Independent Certified Public Accountants 99.5 Annual Report for the Rose's Stores, Inc. Retirement Savings 401(k) Plan for the Year ended December 31, 1995 PAGE SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator, Rose's Stores, Inc., has duly caused this annual report to be signed by the undersigned, thereunto duly authorized. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(k) PLAN BY:/s/Camilla Wheeler Camilla Wheeler, Director, Human Resources Date: June 27, 1996 PAGE CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors Rose's Stores, Inc. We consent to incorporation by reference in the registration statement on Form S-8 of Rose's Stores, Inc. of our report dated April 5, 1996 relating to the statements of net assets available for Plan benefits as of December 31, 1995 and 1994 and the related statements of changes in net assets available for Plan benefits for each of the years in the three-year period ended December 31, 1995 of Rose's Stores, Inc. Retirement Savings 401(k) Plan and the related supple- mental schedules 1 and 2 for the year ended December 31, 1995 which report appears in the December 31, 1995 annual report on Form 11-K of Rose's Stores, Inc. Retirement Savings 401(k) Plan. /s/KPMG Peat Marwick LLP KPMG Peat Marwick LLP Raleigh, North Carolina June 26, 1996 PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(k) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Financial Statements and Schedules December 31, 1995 and 1994 (With Independent Auditors' Report Thereon) PAGE INDEPENDENT AUDITORS' REPORT Advisory Committee, Retirement Savings 401(k) Plan Rose's Stores, Inc.: We have audited the accompanying statements of net assets available for plan benefits of the Rose's Stores, Inc. Retirement Savings 401(k) Plan (the "Plan") as of December 31, 1995 and 1994 and the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1995. 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 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 available for plan benefits of the Plan as of December 31, 1995 and 1994 and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1995 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 1 and 2 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. The fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information 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. /s/KPMG Peat Marwick LLP KPMG Peat Marwick LLP April 5, 1996 PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Net Assets Available for Plan Benefits with Fund Information December 31, 1995 and 1994 1995
Rose's Invesco Stable Diversified Fidelity Total Income Bond Magellan Return Fund Fund Fund Fund Assets: FUNB Stable Investment Fund $17,875,534 - - - U.S. Government obligations 17,189,390 - - - FUNB Diversified Bond Fund - 2,133,998 - - Fidelity Magellan Fund - - 9,178,526 - Invesco Total Return Fund - - - 2,591,194 Fidelity Advisor Growth Opportunity Fund (A shares) - - - - Templeton Growth Fund I - - - - Evergreen Fund (Y shares) - - - - Loans to participants - - - - Net investments 35,064,924 2,133,998 9,178,526 2,591,194 Employee contributions receivable 31,139 4,039 23,292 4,710 Total assets $35,096,063 2,138,037 9,201,818 2,595,904 Net assets available for plan benefits $35,096,063 2,138,037 9,201,818 2,595,904
(Continued) See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Net Assets Available for Plan Benefits with Fund Information December 31, 1995 and 1994 1995
Fidelity Templeton Ever- Advisor Growth green Loan Fund Fund Fund Fund Total Assets: FUNB Stable Investment Fund - - - - 17,875,534 U.S. Government obligations - - - - 17,189,390 FUNB Diversified Bond Fund - - - - 2,133,998 Fidelity Magellan Fund - - - - 9,178,526 Invesco Total Return Fund - - - - 2,591,194 Fidelity Advisor Growth Opportunity Fund (A shares) 4,692,184 - - - 4,692,184 Templeton Growth Fund I - 1,077,849 - - 1,077,849 Evergreen Fund (Y shares) - - 758,347 - 758,347 Loans to participants - - - 526,492 526,492 Net investments 4,692,184 1,077,849 758,347 526,492 56,023,514 Employee contributions receivable 11,459 3,879 2,710 - 81,228 Total assets 4,703,643 1,081,728 761,057 526,492 56,104,742 Net assets available for plan benefits 4,703,643 1,081,728 761,057 526,492 56,104,742
(Continued) See accompanying notes to financial statements. PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Net Assets Available for Plan Benefits with Fund Information, Continued December 31, 1995 and 1994
1994 Guaranteed Diversified Rose's Income Equity Stock Temporary Fund Fund Fund Fund Assets: Investments at current value: Variable rate deposits - BB&T $5,084,814 - - - Fidelity Magellan Equity Fund - 3,526,971 - - Common stock of Rose's Stores, Inc. - - 17,617 - Bond Fund of America - - - - Money market funds - - 700 45,700 American Balanced Fund - - - - Loans to participants - - - 569,691 Net investments 5,084,814 3,526,971 18,317 615,391 Cash - - 94 55 Employee contributions receivable - - - 72,025 Accrued income receivable - - 3 423 Total assets 5,084,814 3,526,971 18,414 687,894 Net assets available for plan benefits $5,084,814 3,526,971 18,414 687,894
(Continued) See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Net Assets Available for Plan Benefits with Fund Information, Continued December 31, 1995 and 1994 1994
Bond American Fund Balanced of America Fund Total Assets: Investments at current value: Variable rate deposits - BB&T - - 5,084,814 Fidelity Magellan Equity Fund - - 3,526,971 Common stock of Rose's Stores, Inc. - - 17,617 Bond Fund of America 467,439 - 467,439 Money market funds - - 46,400 American Balanced Fund - 123,886 123,886 Loans to participants - - 569,691 Net investments 467,439 123,886 9,836,818 Cash - - 149 Employee contributions receivable - - 72,025 Accrued income receivable 13 5 444 Total assets 467,452 123,891 9,909,436 Net assets available for plan benefits 467,452 123,891 9,909,436
See accompanying notes to financial statements. PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Changes in Net Assets Available for Plan Benefits with Fund Information Years ended December 31, 1995, 1994 and 1993 1995
Guaranteed Diversified Rose's Income Equity Stock Temporary Fund Fund Fund Fund Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ - 548,252 (15,218) - Dividends - 16,039 - - Interest 123,929 - 2 1,320 123,929 564,291 (15,216) 1,320 Employee contributions and roll-overs - - - 344,466 Other - - - 30,034 Total additions 123,929 564,291 (15,216) 375,820 Deductions from net assets attributed to: Plan benefits paid - - 2,195 1,080,164 Other - - - - Insurance premiums paid - - - - Transfer to successor trustee 4,992,193 3,811,005 - 570,902 Total deductions 4,992,193 3,811,005 2,195 1,651,066 Net transfers of assets among funds (216,550) (280,257) (1,003) 587,352 Net increase (decrease) (5,084,814) (3,526,971) (18,414) (687,894) Net assets available for plan benefits: Beginning of year 5,084,814 3,526,971 18,414 687,894 End of year $ - - - -
See accompanying notes to financial statements. (Continued) ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Changes in Net Assets Available for Plan Benefits with Fund Information Years ended December 31, 1995, 1994 and 1993
1995 Life Bond American Insurance Fund of Balanced Sub Option America Fund Total Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ - 27,549 11,494 572,077 Dividends - 16,577 2,648 35,264 Interest - 19 21 125,291 - 44,145 14,163 732,632 Employee contributions and roll-overs 25,512 - - 369,978 Other - - - 30,034 Total additions 25,512 44,145 14,163 1,132,644 Deductions from net assets attributed to: Plan benefits paid - - - 1,082,359 Other - - - - Insurance premiums paid 25,512 - - 25,512 Transfer to successor trustee - 451,357 108,752 9,934,209 Total deductions 25,512 451,357 108,752 11,042,080 Net transfers of assets among funds - (60,240) (29,302) - Net increase (decrease) - (467,452) (123,891) (9,909,436) Net assets available for plan benefits: Beginning of year - 467,452 123,891 9,909,436 End of year $ - - - -
See accompanying notes to financial statements. (Continued) PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements Changes in Net Assets Available for Plan Benefits with Fund Information, Continued December 31, 1995, 1994 and 1993 1995
Rose's Invesco Stable Diversified Fidelity Total Income Bond Magellan Return Fund Fund Fund Fund Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 866,613 141,380 608,841 251,756 Dividends 24,755 663 - - Interest 59,385 2,618 9,612 3,049 950,753 144,661 618,453 254,805 Employee contributions and roll-overs 501,588 66,665 431,886 76,660 Transfer from predecessor trustee 4,992,193 450,694 3,811,668 108,752 Transfer from Profit Sharing Plan - - - - Other 28,016 2,386 19,266 5,131 Total additions 6,472,550 664,406 4,881,273 445,348 Deductions from net assets attributed to: Plan benefits paid 8,581,632 97,700 488,922 134,344 Other - 21 338 - Trustee fees 24,966 4,148 9,434 37,019 Insurance premiums paid - - - - Transfer to successor trustee - - - - Total deductions 8,606,598 101,869 498,694 171,363 Net transfers of assets among funds 37,230,111 1,575,500 4,819,239 2,321,919 Net increase (decrease) 35,096,063 2,138,037 9,201,818 2,595,904 Net assets available for plan benefits: Beginning of year - - - - End of year $35,096,063 2,138,037 9,201,818 2,595,904
(Continued) See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements Changes in Net Assets Available for Plan Benefits with Fund Information, Continued December 31, 1995, 1994 and 1993 1995
Fidelity Templeton Advisor Growth Evergreen Loan Fund Fund Fund Fund Total Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 350,623 25,456 296,676 - 3,113,422 Dividends - - - - 60,682 Interest 5,168 1,305 756 25,363 232,547 355,791 26,761 297,432 25,363 3,406,651 Employee contributions and roll-overs 184,282 63,334 45,558 - 1,739,951 Transfer from predecessor trustee - - - 570,902 9,934,209 Transfer from Profit Sharing Plan - - 51,722,696 - 51,722,696 Other 8,082 1,356 798 - 95,069 Total additions 548,155 91,451 52,066,484 596,265 66,898,576 Deductions from net assets attributed to: Plan benefits paid 154,867 19,661 30,385 71,534 10,661,404 Other 36 11 12 - 418 Trustee fees 6,160 - - - 81,727 Insurance premiums paid - - - - 25,512 Transfer to successor trustee - - - - 9,934,209 Total deductions 161,063 19,672 30,397 71,534 20,703,270 Net transfers of assets among funds 4,316,551 1,009,949 (51,275,030) 1,761 - Net increase (decrease) 4,703,643 1,081,728 761,057 526,492 46,195,306 Net assets available for plan benefits: Beginning of year - - - - 9,909,436 End of year $4,703,643 1,081,728 761,057 526,492 56,104,742
(Continued) See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Changes in Net Assets Available for Plan Benefits with Fund Information, Continued Years ended December 31, 1995, 1994 and 1993 1994
Guaranteed Diversified Rose's Income Equity Stock Temporary Fund Fund Fund Fund Additions to net assets attributed to: Investment income: Net depreciation in fair value of investments $ - (246,171) (51,354) - Dividends - 175,341 - - Interest 232,108 - 776 6,969 232,108 (70,830) (50,578) 6,969 Employee contributions and roll-overs - - - 1,224,583 Other - - - - Total additions (deductions) 232,108 (70,830) (50,578) 1,231,552 Deductions from net assets attributed to: Plan benefits paid - - 6,760 5,063,376 Insurance premiums paid - - - - Other - - - 42,957 Total deductions - - 6,760 5,106,333 Net transfers of assets among funds (2,643,692) (732,379) (101,726) 3,580,734 Net increase (decrease) (2,411,584) (803,209) (159,064) (294,047) Net assets available for plan benefits: Beginning of year 7,496,398 4,330,180 177,478 981,941 End of year $ 5,084,814 3,526,971 18,414 687,894
See accompanying notes to financial statements. (Continued) ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements Changes in Net Assets Available for Plan Benefits with Fund Information, Continued December 31, 1995, 1994 and 1993 1994
Wachovia Bond/ Biltmore Fixed Life Bond American Income Insurance Fund Balanced Fund Option of America Fund Total Additions to net assets attributed to: Investment income: Net depreciation in fair value of investments $ (42,397) - (27,698) (906) (368,526) Dividends 13,335 - 27,931 3,433 220,040 Interest 224 - 265 48 240,390 (28,838) - 498 2,575 91,904 Employee contributions and roll-overs - 85,148 - - 1,309,731 Other - - - - - Total additions (deductions) (28,838) 85,148 498 2,575 1,401,635 Deductions from net assets attributed to: Plan benefits paid - - - - 5,070,136 Insurance premiums paid - 85,148 - - 85,148 Other 578 - - - 43,535 Total deductions 578 85,148 - - 5,198,819 Net transfers of assets among funds (691,207) - 466,954 121,316 - Net increase (decrease) (720,623) - 467,452 123,891 (3,797,184) Net assets available for plan benefits: Beginning of year 720,623 - - - 13,706,620 End of year $ - - 467,452 123,891 9,909,436
(Continued) See accompanying notes to financial statements. PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Changes in Net Assets Available for Plan Benefits with Fund Information, Continued Years ended December 31, 1995, 1994 and 1993 1993
Guaranteed Diversified Rose's Income Equity Stock Temporary Fund Fund Fund Fund Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ - 454,382 (878,689) - Dividends - 411,565 - - Interest 304,855 - 1,050 3,562 304,855 865,947 (877,639) 3,562 Employee contributions and roll-overs - - - 1,586,451 Other - - - 74,821 Total additions (deductions) 304,855 865,947 (877,639) 1,664,834 Deductions from net assets attributed to: Plan benefits paid - - 100,280 2,463,611 Insurance premiums paid - - - - Other - - - 80 Total deductions - - 100,280 2,463,691 Net transfers of assets among funds (973,412) (45,518) 143,766 654,993 Net increase (decrease) (668,557) 820,429 (834,153) (143,864) Net assets available for plan benefits: Beginning of year 8,164,955 3,509,751 1,011,631 1,125,805 End of year $7,496,398 4,330,180 177,478 981,941
See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Statements of Changes in Net Assets Available for Plan Benefits with Fund Information, Continued Years ended December 31, 1995, 1994 and 1993 1993
Wachovia Bond/ Biltimore Fixed Life Income Insurance Fund Option Total Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 7,193 - (417,114) Dividends 45,115 - 456,680 Interest - - 309,467 52,308 - 349,033 Employee contributions and roll-overs - 128,251 1,714,702 Other - - 74,821 Total additions (deductions) 52,308 128,251 2,138,556 Deductions from net assets attributed to: Plan benefits paid - - 2,563,891 Insurance premiums paid - 128,251 128,251 Other - - 80 Total deductions - 128,251 2,692,222 Net transfers of assets among funds 220,171 - - Net increase (decrease) 272,479 - (553,666) Net assets available for plan benefits: Beginning of year 448,144 - 14,260,286 End of year $ 720,623 - 13,706,620
See accompanying notes to financial statements. ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Notes to Financial Statements (1) Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying financial statements of the Rose's Stores, Inc. Retirement Savings 401(k) Plan (the Plan) have been prepared on an accrual basis and present the net assets available for plan benefits and the changes in those net assets. (b) Investments in Securities Investments in marketable securities are stated at current value based on quotations obtained from national securities exchanges or brokerage firms. The cost basis of marketable securities is average cost and first-in first- out (FIFO) for Rose's Stores, Inc. common stock. The valuation of common trust fund units is based on the quoted market prices of the underlying securities. Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). The Plan adopted AICPA Statement of Position 94-4 (SOP 94-4) Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined- Contribution Pension Plans for the year ended December 31, 1994. The provisions of SOP-94-4 require the Plan to report guaranteed investment contracts at fair value. The difference between contract value and fair value at December 31, 1994 is not significant. There were no guaranteed investment contracts held at December 31, 1995. (c) Use of Estimates In preparing the financial statements, the plan administrator is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. PAGE (2) Description of the Plan The Plan is a defined-contribution plan sponsored by Rose's Stores, Inc. (Rose's) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). All Rose's employees are eligible to participate in the Plan after one year of continuous employment in which they have worked at least 1,000 hours. Effective January 1, 1991, the Plan was amended to adopt the "safe harbor" minimum coverage provisions of the Internal Revenue Code, and eliminated life insurance as a new investment option effective December 31, 1991. Participants, who were enrolled in the life insurance option prior to the Plan's amendment were allowed to continue with this investment option. By an agreement entered into on January 1, 1994, and effective January 1, 1989, the Plan was restated bringing it into compliance with the Tax Reform Act of 1986 and subsequent legislation through 1993, and to incorporate all plan amendments. The IRS is evaluating the work force reduction from 1993 and 1994 for its classification as a "partial plan termination". If the work force reduction is considered a "partial plan termination", all of the employees who voluntarily terminate would become fully vested and their previously forfeited accounts, approximately $552,000, would be reestablished and paid out. Because the IRS has not made this determination, the forfeitures for 1995, 1994, and 1993 were not allocated to participant accounts. The annual net investment income is allocated to individual participants' accounts proportionally based on account balances at the beginning of the Plan's fiscal year. On May 31, 1995, the Rose's Stores, Inc. Variable Investment Plan, changed trustees from Central Carolina Bank to First Union National Bank. The Company amended the Variable Investment Plan as required in order to facilitate the merger with the Rose's Stores, Inc. Profit Sharing Plan. As a result of these amendments the plan changed its name to the Rose's Stores, Inc. Retirement Savings 401(k) Plan. On July 31, 1995, the assets of the Rose's Stores, Inc. Profit Sharing Plan were merged into the Rose's Stores, Inc. Retirement Savings 401(k) Plan. The Plan currently offers seven investment options for employee contributions: the Rose's Stable Income Fund, the Diversified Bond Fund, the Fidelity Magellan Fund, the Invesco Total Return Fund, the Fidelity Advisor Fund, the Templeton Growth Fund, and the Evergreen Fund. Participants may change their elections daily. Due to the Plan sponsor's filing of Chapter 11 bankruptcy, the Rose's Stock Fund has not been available as an investment option since September 1, 1993. Each participant's account is credited with the participant's contribution, an allocation of Rose's contribution, if any, and Plan earnings. Allocations are based on participant compensation or account balances as defined in the Plan. Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the remainder of their accounts is based on the number of years of continuous service at a rate of 20% per year of credited service. The Plan permits withdrawals in the event of termination of employment, disability, death, age 59-l/2 or retirement. Withdrawals may also be made to meet certain financial hardships, as defined. PAGE (2) Description of the Plan, Continued In the event the Plan is terminated, the Trustee will assume full responsibility for the management and administration of the Plan. Upon termination of the Plan, participants may elect to receive benefits immediately, or may elect to defer benefits until they terminate their employment with Rose's or reach retirement age. (3) Contributions Employer contributions to the Plan are discretionary. The Company may elect to match 50% of participant contributions up to 6% of the participants compensation. Additional amounts may be contributed at the option of the Board of Directors. For the years ending December 31, 1995, 1994 and 1993, Rose's Stores, Inc. made no matching contributions to the Plan. Participants may contribute up to 20% of their gross annual wages not to exceed the IRS allowable limit. (4) Investments The following investments exceeded 5% of the Plan's net assets at December 31, 1995 and 1994: Investment 1995 1994 BB&T - Variable rate deposits $ - 5,084,814 Fidelity Magellan Fund 9,178,526 3,526,971 Fidelity Advisor Growth Opportunity Fund 4,692,184 - FUNB Stable Investment Fund 17,862,220 - U.S. Government obligations 17,202,704 - The Bond Fund of America - 467,439 Loans to participants - 569,691 PAGE (4) Investments, Continued The Plan's investments were administered by Central Carolina Bank & Trust Company, N.A. through June 1995 and by First Union National Bank from July 1995 through December 31, 1995. During the years ended December 31, 1995, 1994 and 1993, the Plan had the following net appreciation (depreciation) in its investments (including investments bought and sold during the year):
1995 1994 1993 Fidelity Magellan Fund - FUNB administered $ 608,841 - - Fidelity Magellan Fund - CCB administered 548,252 (246,171) 454,382 Common stocks - Rose's Stores, Inc. non-voting Class B (15,218) (51,354) (878,689) Wachovia Bond/Biltmore Fixed Income Fund - (42,397) 7,193 Bond Fund of America 27,549 (27,698) - American Balanced Fund 11,494 (906) - U.S. Government obligations 203,552 - - FUNB Stable Investment Fund 663,061 - - FUNB Diversified Bond Fund 141,380 - - Invesco Total Return Fund 251,756 - - Fidelity Advisor Growth Opportunities Fund 350,623 - - Templeton Growth Fund 25,456 - - Evergreen Fund 296,676 - - $3,113,422 (368,526) (417,114)
(5) Loans to Participants The Plan permits participants to borrow 50% of their account balance, up to $50,000. These loans must be repaid through payroll deductions over a period not to exceed four and one-half years. Prior to January 1, 1993, the interest rate to be paid on the amounts borrowed was equal to the average interest rate of the Home Equity Loan Rate at the five major commercial banks in the area at the time of the loan. The interest rate for monies borrowed in 1993 and later was equal to the average prime rate at the sponsor's banks, plus one percent. At December 31, 1995 and 1994, there were $526,492 and $569,691 in loans outstanding, respectively. These loans bear interest at rates ranging from 7.0% to 11.5% and are due at various dates through 2000. (6) Related Party Transactions The Plan owned 93,956 shares of Rose's Stores, Inc. non-voting Class B stock at December 31, 1994. The stock was purchased at prevailing market prices. The Plan received no dividends from Rose's Stores, Inc. during the three year period ended December 31, 1995. All expenses of the Plan were paid by the plan sponsor, Rose's Stores, Inc., in 1994 and 1993. In 1995 the Plan paid the investment management fees and the sponsor paid the administrative fees. PAGE (7) Federal Income Taxes The Internal Revenue Service issued its latest determination letter on May 7, 1993 which stated that the Plan and its underlying trust qualify under the applicable provisions of the Internal Revenue Code and the trust is therefore exempt from federal income taxes. The Plan and its underlying trust have been amended due to a merger of the Rose's Stores, Inc. Profit Sharing and Variable Investment Plans. The amended Plan documents have been submitted to the Internal Revenue Service for a letter of determination that the Plan continues to qualify under applicable provisions of the Internal Revenue Code. In the opinion of the Plan Administrator, the Plan and its underlying trust have operated within the terms of the Plan and trust and remain qualified and tax exempt, respectively. (8) Subsequent Events On March 1, 1996, the Plan's sponsor and Fred's, Inc. ("Fred's") entered into a letter of intent (the "Letter of Intent"), providing for the acquisition by merger of Rose's by Fred's. Fred's is a publicly traded retailer that operates approximately 200 stores in the southeastern United States. The Letter of Intent provides that the merger is subject to the execution of a definitive agreement and to the occurrence or (to the extent permitted by the definitive merger agreement or applicable law) waiver of a number of conditions, including the approval of the stockholders of Rose's and Fred's. The effect of the merger on the Plan is unknown at the present time. (9) Reconciliation to Form 5500 The accompanying financial statements have been prepared on an accrual basis and show employee contributions receivable of $81,228 as a component of net assets available for plan benefits and as part of the employee contributions in the statements of changes in net assets available for plan benefits, while Form 5500 has been prepared on a cash basis and does not reflect this amount. Certain amounts in the statements of changes in net assets available for plan benefits have been classified differently between the financial statements and the Form 5500. These reclassifications have not affected the increase in net assets available for plan benefits. PAGE Schedule 1 ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1995
Par value Identity of party and Maturity Market or units description of assets date Cost value 101,039.79 Mutual fund investment: Fidelity Magellan Fund - $ 8,825,168 9,178,526 923,208.99 *FUNB Stable Investment Fund - 17,316,476 17,875,534 136,355.82 Fidelity Advisor Growth Opportunities Fund - 4,360,729 4,692,184 113,275.00 Invesco Total Return Fund - 2,389,681 2,591,194 55,466.74 Templeton Growth Fund - 1,053,207 1,077,849 45,950.70 *Evergreen Fund - 703,272 758,347 526,492.00 Loans to participants with interest rates ranging from 7 to 11.5% with payments due through 2000 - 526,492 526,492 Bond funds: 100,556.15 *FUNB - Diversified Fund - 2,000,354 2,133,998 U.S. Government obligations: 8,020,000 United States Treasury Bills 1-25-96 7,999,549 7,999,549 9,409,000 United States Treasury Bills 5-30-96 8,999,603 9,189,841 Total assets held for investment purposes $54,174,531 56,023,514
*Denotes party-in-interest. PAGE Schedule 2 ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Item 27d - Schedule of Reportable Transactions (1) Year ended December 31, 1995
Aggregate cost Aggregate Aggregate of assets Net purchase selling sold or realized Identity of party and price price distributed gain description of assets (2) (3) (2) (3) (2) (loss) BB&T - Variable Rate Deposits $ 583,508 5,668,322 5,668,322 - Employee Benefit Money Market Fund 671,529 717,229 717,229 - The Bond Fund of America 48,134 543,122 539,527 3,595 Rose's Stable Income Fund 23,100,802 10,868,869 10,776,518 92,351 Diversified Bond Fund 2,388,027 841,955 838,368 3,587 Invesco Total Return Fund 2,611,112 353,562 340,339 13,223 Fidelity Advisor Growth Opportunities Fund (A shares) 4,839,846 492,201 479,193 13,008 Templeton Growth Fund I 1,180,642 128,250 127,435 815 Evergreen Fund (Y shares) 776,960 52,027,832 51,786,231 241,601 Fidelity Magellan Fund 7,190,282 2,671,016 2,368,928 302,088 United States Treasury Bill, due January 26, 1996 7,999,549 - - - United States Treasury Bill, due May 30, 1996 8,999,603 - - -
(1) This schedule presents transactions in any security where the aggregate of such transactions in that security exceeds five percent of plan assets at January 1, 1995. (2) The value of securities at the time of purchase or sale is the market value. (3) Brokerage commissions are included in purchase prices and deducted from sales proceeds. -----END PRIVACY-ENHANCED MESSAGE-----