-----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, IM86GijShtWK7U6QLFBgCJYs9Pd/Q2EaUcGG+LXqv5TCsJjZwQktaxe4PIROfiE5 khj9hSIlWLraGqQ8Rh7Rxw== 0000085149-97-000004.txt : 19970701 0000085149-97-000004.hdr.sgml : 19970701 ACCESSION NUMBER: 0000085149-97-000004 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970125 FILED AS OF DATE: 19970630 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: 97633115 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 99.1. 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 25, 1997 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) 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 reports 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 March 12, 1997, of the 10,000,000 shares of common stock delivered to First Union National Bank of North Carolina ("FUNB"), as Escrow Agent, pursuant to the Modified and Restated First Amended Joint Plan of Reorganization, the Company has 8,571,964 shares of common stock outstanding. The remaining 430,909 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 8,660,179 shares of common stock will be outstanding. If all pending claims are resolved in accordance with the Company's records, approximately 8,613,609 shares of common stock will be outstanding. 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 31, 1997, the aggregate market value of common stock held by non-affiliates of the Company (assuming all pending claims are resolved adverse- ly to the Company) was approximately $15,300,000. DOCUMENTS INCORPORATED BY REFERENCE Incorporated Document Location in Form 10-K Portions of Registrant's definitive Part III, Items 10, 11, Proxy Statement to be filed in 12 and 13 connection with the Annual Meeting of Shareholders to be held June 26, 1997. 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 year ended January 25, 1997, for the thirty-nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the year ended January 28, 1995 Balance Sheets - January 25, 1997 and January 27, 1996 Statements of Stockholders' Equity for the year ended January 25, 1997, for the thirty- nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the year ended January 28, 1995 Statements of Cash Flows for the year ended January 25, 1997, for the thirty-nine weeks ended January 27, 1996, thirteen weeks ended April 29, 1995, and the year ended January 28, 1995 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 Agreement and Plan of Merger dated as of Incorporated May 7, 1996, by and among Fred's Inc., by reference FR Acquisition Corp. and the Registrant. (Incorporated by reference to Exhibit 10.1 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.2 Loan and Security Agreement among the Incorporated Registrant, as Borrower, the Financial by reference Institutions as listed on the signature pages, as the Lenders, PPM Finance, Inc., as Co-Agent, and Foothill Capital Corporation, as Agent, dated as of May 21, 1996. (Incorporated by reference to Exhibit 10.2 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.3 Deed of Trust, Assignment of Rents and Incorporated Security Agreement for the headquarters by reference property, dated as of May 21, 1996, by and among Registrant, Foothill Capital Corporation, and David L. Huffstetler, pursuant to the Loan and Security Agreement. (Incorporated by reference to Exhibit 10.3 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.4 Deed of Trust, Assignment of Rents and Incorporated Security Agreement for the warehouse by reference property, dated as of May 21, 1996, by and among Registrant, Foothill Capital Corporation, and David L. Huffstetler, pursuant to the Loan and Security Agreement. (Incorporated by reference to Exhibit 10.4 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.5 Subordination Agreement dated as of May 21, Incorporated 1996, among Registrant, Foothill Capital by reference Corporation, M.J. Sherman & Associates, Inc., and Alan H. Peterson. (Incorporated by reference to Exhibit 10.5 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.6 Intellectual Property Security Agreement Incorporated dated as of May 21, 1996, among Registrant by reference and Foothill Capital Corporation, pursuant to the Loan and Security Agreement. (Incorporated by reference to Exhibit 10.6 to Registrant's Form 10-Q for the quarter ended April 27, 1996). 10.7 Termination Agreement dated as of August 20, Incorporated 1996 between the Company, Fred's, Inc., and by reference FR Acquisition Corp. (Incorporated by reference to Exhibit 10.1 to Registrant's Form 10-Q for the quarter ended July 27, 1996). 27. Financial Data Schedule 99.1 Annual Report for the Rose's Stores, Inc., Variable Investment Plan for the year ended December 31, 1996. (b) REPORTS ON FORM 8-K The Registrant filed no reports on Form 8-K during the last quarter of the period covered by this report. 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, 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. RETIREMENT SAVINGS 401(k) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) ROSE'S STORES, INC. 218 S. Garnett Street Henderson, NC 27536 Exhibit No. 23 Consent of Independent Certified Public Accountants 99.1 Annual Report for the Rose's Stores, Inc. Variable Investment Plan for the Year ended December 31, 1996 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 30, 1997 PAGE CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors Rose's Stores, Inc. We consent to incorporation by reference in this Registration Statement on Form S-8 of Rose's Stores, Inc. of our report dated May 29, 1997 relating to the statements of net assets available for Plan benefits as of December 31, 1996, 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, 1996 of Rose's Stores, Inc. Retirement Savings 401(k) Plan and the related supplemental schedules 1 and 2 for the year ended December 31, 1996 which report appears in the December 31, 1996 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 30, 1997 PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(k) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Financial Statements and Schedules December 31, 1996 and 1995 (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, 1996 and 1995 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, 1996. These financial statements are the responsibi- lity 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 stand- ards. 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, 1996 and 1995 and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1996 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 supplement- al 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 state- ments taken as a whole. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP May 29, 1997 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, 1996 and 1995
1996 FUNB Invesco Diversified Fidelity Total Fidelity Bond Magellan Return Advisor Fund Fund Fund Fund Assets: FUNB Diversified Bond Fund $1,580,610 - - - Fidelity Magellan Fund - 8,200,539 - - Invesco Total Return Fund - - 2,948,677 - Fidelity Advisor Growth Opportunity Fund (A shares) - - - 4,914,401 Templeton Growth Fund I - - - - Evergreen Fund (Y shares) - - - - Evergreen Treasury Fund - - - - Loans to participants - - - - Net investments 1,580,610 8,200,539 2,948,677 4,914,401 Employee contributions receivable 2,813 14,255 3,985 7,517 Net assets available for plan benefits $1,583,423 8,214,794 2,952,662 4,921,918 (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 December 31, 1996 and 1995
1996 Templeto Evergreen Growth Evergreen Treasury Loan Fund Fund Fund Fund Total Assets: FUNB Diversified Bond Fund - - - - 1,580,610 Fidelity Magellan Fund - - - - 8,200,539 Invesco Total Return Fund - - - - 2,948,677 Fidelity Advisor Growth Opportunity Fund (A shares) - - - - 4,914,401 Templeton Growth Fund I 1,793,387 - - - 1,793,387 Evergreen Fund (Y shares) - 1,481,800 - - 1,481,800 Evergreen Treasury Fund - - 28,314,160 - 28,314,160 Loans to participants - - - 547,787 547,787 Net investments 1,793,387 1,481,800 28,314,160 547,787 49,781,361 Employee contributions receivable 3,802 3,328 21,771 - 57,471 Net assets available for plan benefits 1,797,189 1,485,128 28,335,931 547,787 49,838,832
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, 1996 and 1995
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. 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, 1996 and 1995
1995 Fidelity Templeton Advisor Growth Evergreen 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
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, 1996, 1995 and 1994
1996 Rose's Diver- Invesco Stable sified Fidelity Total Fidelity Income Bond Magellan Return Advisor Fund Fund Fund Fund Fund Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 720,991 24,098 885,054 359,451 771,750 Dividends - - - - - Interest 2,195 190 (850) 414 114 723,186 24,288 884,204 359,865 771,864 Employee contributions and roll-overs 282,487 81,476 500,210 111,153 261,929 Other 1,207 - - - - Total additions 1,006,880 105,764 1,384,414 471,018 1,033,793 Deductions from net assets attributed to: Plan benefits paid 3,285,545 333,277 1,459,359 529,846 628,455 Other - - - - - Trustee fees - 1,102 5,614 2,033 3,267 Insurance premiums paid 6,736 1,012 2,399 621 1,282 Total deductions 3,292,281 335,391 1,467,372 532,500 633,004 Net transfers of assets among funds (32,810,662) (324,987) (904,066) 418,240 (182,514) Net increase (decrease) (35,096,063) (554,614) (987,024) 356,758 218,275 Net assets available for plan benefits: Beginning of year 35,096,063 2,138,037 9,201,818 2,595,904 4,703,643 End of year $ - 1,583,423 8,214,794 2,952,662 4,921,918 (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 Years ended December 31, 1996, 1995 and 1994
1996 Templeton Evergreen Growth Evergreen Treasury Loan Fund Fund Fund Fund Total Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments 281,526 196,460 867,229 - 4,106,559 Dividends - - 235 - 235 Interest 264 (31) 776 41,840 44,912 281,790 196,429 868,240 41,840 4,151,706 Employee contributions and roll-overs 103,404 81,684 379,390 - 1,801,733 Other - - - - 1,207 Total additions 385,194 278,113 1,247,630 41,840 5,954,646 Deductions from net assets attributed to: Plan benefits paid 330,734 136,950 5,328,619 138,476 12,171,261 Other - - - - - Trustee fees 1,220 928 22,275 - 36,439 Insurance premiums paid 298 508 - - 12,856 Total deductions 332,252 138,386 5,350,894 138,476 12,220,556 Net transfers of assets among funds 662,519 584,344 32,439,195 117,931 - Net increase (decrease) 715,461 724,071 28,335,931 21,295 (6,265,910) Net assets available for plan benefits: Beginning of year 1,081,728 761,057 - 526,492 56,104,742 End of year 1,797,189 1,485,128 28,335,931 547,787 49,838,832
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, 1996, 1995 and 1994
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 $ - - - - (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, 1996, 1995 and 1994
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 - - - - (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 December 31, 1996, 1995 and 1994
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. 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 December 31, 1996, 1995 and 1994
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. 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, 1996, 1995 and 1994
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 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 (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, 1996, 1995 and 1994
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 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
See accompanying notes to financial statements. PAGE ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN (FORMERLY VARIABLE INVESTMENT PLAN) Notes to Financial Statements December 31, 1996 and 1995 (l) 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 The investments of the Plan are held on behalf of the Plan by the trustee, First Union National Bank, in a unitized fund. Investments in securities and mutual funds are stated at current value based on quotations from National Securities Exchanges of brokerage firms adjusted for dividends, capital gains, and fees. Participants own units of the unitized fund. Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). (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 additions to and deviations from net assets available for benefits during the reporting period. Actual results could differ from those estimates. (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. During the Plan year, the IRS completed its evaluation of the work force reduction which occurred from 1993 to 1994. In the IRS Letter of Determination dated August 9, 1996, the IRS determined the reduction to be a "partial plan termination". As a result, all affected employees who voluntarily terminated are considered properly vested and their previously forfeited accounts, approximately $585,000 which includes earnings from date thereon are being analyzed to determine what is immediately eligible for allocation pursuant to Section 7.2 of the Plan. PAGE (2) Description of the Plan, Continued 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 First Union National Bank Diversified Bond Fund, the Fidelity Magellan Fund, the Invesco Total Return Fund, the Fidelity Advisor Fund, the Templeton Growth Fund, the Evergreen Fund and the Evergreen Treasury Fund. Participants may change their elections daily. 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, or retirement. The Plan also permits the withdrawals of assets previously held by participants under the Profit Sharing Plan (now held in the Retirement Savings 401(k) Plan as profit sharing assets) upon the participant reaching age 55, and assets held under the Retirement Savings 401(k) Plan upon the participant reaching age 59- l/2. Withdrawals may also be made to meet certain financial hardships, as defined by the Plan. 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, 1996, 1995 and 1994, 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. PAGE (4) Investments The following investments exceeded 5% of the Plan's net assets at December 31, 1996 and 1995: Investment 1996 1995 Fidelity Magellan Fund $ 8,200,539 9,178,526 Invesco Total Return Fund 2,948,677 - Fidelity Advisor Growth Opportunity Fund 4,914,401 4,692,184 Evergreen Treasury Fund 28,314,160 - FUNB Stable Investment Fund - 17,875,534 U.S. Government obligations - 17,189,390 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, 1996. During the years ended December 31, 1996, 1995 and 1994, the Plan had the following net appreciation (depre- ciation) in its investments (including investments bought and sold during the year):
1996 1995 1994 Fidelity Magellan Fund - FUNB administered $ 885,054 608,841 - Fidelity Magellan Fund - CCB administered - 548,252 (246,171) Common stocks - Rose's Stores, Inc. non-voting Class B - (15,218) (51,354) Wachovia Bond/Biltmore Fixed Income Fund - - (42,397) Bond Fund of America - 27,549 (27,698) American Balanced Fund - 11,494 (906) U.S. Government obligations - 203,552 - Rose's Stable Investment Fund 720,991 663,061 - Rose's Diversified Bond Fund 24,098 141,380 - Invesco Total Return Fund 359,451 251,756 - Fidelity Advisor Fund 771,750 350,623 - Templeton Growth Fund 281,526 25,456 - Evergreen Fund 196,460 296,676 - Evergreen Treasury Fund 867,229 - - $4,106,559 3,113,422 (368,526)
PAGE (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 five years. The interest rate for monies borrowed is equal to the average prime rate at the sponsor's banks, plus one percent. At December 31, 1996 and 1995, there were $547,787 and $526,492 in loans outstanding, respectively. These loans bear interest at rates ranging from 7.0% to 10% and are due at various dates through 2000. (6) Related Party Transactions All expenses of the Plan were paid by the plan sponsor, Rose's Stores, Inc., in 1994. In 1996 and 1995 the Plan paid the investment management fees and the sponsor paid the administrative fees. (7) Federal Income Taxes The Internal Revenue Service issued its latest determination letter in August 1996 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. 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. The Plan has been amended since receiving the determination letter, and a request for a new determination letter was subsequently sent to the Internal Revenue Service. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and is tax exempt. (8) Reconciliation to Form 5500 The accompanying financial statements have been prepared on an accrual basis and show employee contributions receivable of $57,471 and $81,228 at December 31, 1996 and 1995, respectively, 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. As well, the December 31, 1996 net assets available for plan benefits and net transfers of assets among funds have been adjusted for $18,933 on loan payments receivable. The Form 5500 has been prepared on a cash basis and does not reflect these amounts. 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. 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, 1996 Identity of party and Market Units description of assets Cost value 72,783 Diversified Bond Fund $ 1,452,437 1,580,610 81,034 Fidelity Magellan Fund 7,109,896 8,200,539 114,010 Invesco Total Return Fund 2,495,844 2,948,677 121,304 Fidelity Advisor Fund 3,962,451 4,914,401 76,518 Templeton Growth Fund 1,544,014 1,793,387 76,046 Evergreen Fund* 1,286,387 1,481,800 27,485,206 Evergreen Treasury Fund* 27,506,580 28,314,160 547,787 Loans to participants with interest rates ranging from 7% to 10% with payments through 2000 547,787 547,787 $45,905,396 49,781,361 *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, 1996
Aggregate cost Aggregate Aggregate of assets purchase selling sold or Net Identity of party and price price distributed realized description of assets (2) (3) (2) (3) (2) gain Rose's Stable Income Fund $ 887,323 36,673,238 55,202,806 1,470,432 Fidelity Magellan Fund 1,044,250 2,907,291 2,759,523 147,768 Evergreen Treasury Money Market Fund 33,815,940 6,369,009 6,309,360 59,649
(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, 1996. (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-----