<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d)
of the Securities and Exchange Act of 1934
For the fiscal years ended December 31, 1993, 1994 and 1995
A. Full Title of the plan and the address of the plan, if different from that of
the issuer named below:
HANOVER DIRECT, INC. SAVINGS & RETIREMENT PLAN
c/o HANOVER DIRECT, INC.
1500 Harbor Boulevard
Weehawken, New Jersey 07087
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
HANOVER DIRECT, INC.
1500 Harbor Boulevard
Weehawken, New Jersey 07087
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of
Hanover Direct, Inc. Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of Hanover Direct, Inc. Savings and Retirement Plan (formerly The Horn & Hardart
Company Savings Plan) as of December 31, 1995 and 1994, and the related
statements of changes in net assets available for benefits for the three years
then ended. These financial statements and the schedules referred to below are
the responsibility of the Administrative Committee. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Administrative Committee, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1995 and 1994, and the changes in net assets available for benefits
for the three years then ended 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 attached to
the financial statements are presented for purposes of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the statements of net assets available for
benefits and the statements of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
New York, New York ARTHUR ANDERSEN LLP
June 27, 1996
2
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HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN
(FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1994 AND 1995
<TABLE>
<CAPTION>
1994
FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER
INCOME BOND GROWTH EQUITY VALUE DIRECT, INC.
FUND FUND FUND FUND FUND STOCK FUND COMBINED
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
ASSETS:
Fund receivable $ 328,925 $ 31,279 $ 65,054 $ 56,356 $ 55,276 $ 9,559 $ 546,449
Plan participant loan
receivable 427,989 427,989
Unallocated
contributions 41,358 7,782 16,339 13,083 19,239 6,093 103,894
Investment in Fixed
Income Fund 3,834,203 3,834,203
Investment in Bond
Fund 582,898 582,898
Investment in Growth
Fund 1,404,022 1,404,022
Investment in Equity
Fund 1,289,586 1,289,586
Investment in Balanced
Value Fund 1,624,488 1,624,488
Investment in Hanover
Direct Inc. Common
Stock (at market)-
Chemical Bank 44,538 44,538
Investment in Hanover
Direct Inc. Common
Stock (at market)-PW
Trust 839,506 839,506
----------------------------------------------------------------------------------------------
Total assets 4,632,475 621,959 1,485,415 1,359,025 1,699,003 899,696 10,697,573
LIABILITIES AND FUND
BALANCE:
Contributions payable
to:
Hanover Direct, Inc
and Subsidiaries 28,206 858 3,219 1,665 3,828 2,305 40,081
Participants -
----------------------------------------------------------------------------------------------
Net assets
available for
benefits $4,604,269 $ 621,101 $1,482,196 $ 1,357,360 $1,695,175 $ 897,391 $10,657,492
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1995
FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER
INCOME BOND GROWTH EQUITY VALUE DIRECT, INC.
FUND FUND FUND FUND FUND STOCK FUND COMBINED
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
ASSETS:
Fund receivable $ 40,474 $ 13,984 $ 45,556 $ 34,818 $ 33,862 $ 11,521 $ 180,215
Plan participant loan
receivable 425,939 425,939
Unallocated
contributions 16,613 6,975 22,534 18,380 20,669 6,045 91,216
Investment in Fixed
Income Fund 4,225,843 4,225,843
Investment in Bond
Fund 741,289 741,289
Investment in Growth
Fund 2,140,680 2,140,680
Investment in Equity
Fund 1,896,783 1,896,783
Investment in Balanced
Value Fund 2,322,203 2,322,203
Investment in Hanover
Direct Inc. Common
Stock (at market)-
Chemical Bank -
Investment in Hanover
Direct Inc. Common
Stock (at market)-PW
Trust 416,849 416,849
-----------------------------------------------------------------------------------------------
Total assets 4,708,869 762,248 2,208,770 1,949,981 2,376,734 434,415 12,441,017
LIABILITIES AND FUND
BALANCE:
Contributions payable
to:
Hanover Direct, Inc
and Subsidiaries 10,985 5,532 18,638 6,499 8,302 14,020 63,976
Participants 29,439 4,753 18,147 6,830 13,222 5,328 77,719
-----------------------------------------------------------------------------------------------
Net assets
available for
benefits $4,668,445 $ 751,963 $2,171,985 $ 1,936,652 $2,355,210 $ 415,067 $12,299,322
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN
(FORMERLY THE HORN & HARDART COMPANY SAVINGS PLAN)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
<TABLE>
<CAPTION>
1993
PARTICIPANT
DIRECTED
FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER
INCOME BOND GROWTH EQUITY VALUE DIRECT, INC.
FUND FUND FUND FUND FUND STOCK FUND COMBINED
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
Interest income $ 73,172 $ 139 $ 275 $ 275 $ 313 $ 101 $ 74,275
Change in plan participant
loan receivable 208,526 208,526
Contributions
Participants 2,057,907 2,057,907
Hanover Direct, Inc. and
subsidiaries (net of
credited forfeitures
of $0, $36,579 and
$44,691 in 1993, 1994
and 1995, respectively 428,289 428,289
Interfund transfers (3,767,622) 493,687 934,526 968,591 1,246,768 124,050 --
----------- ------------ -------- ------------ ---------- ------------ -----------
(1,281,426) 493,687 934,526 968,591 1,246,768 124,050 2,486,196
----------- ------------ -------- ------------ ---------- ------------ -----------
Total additions (999,728) 493,826 934,801 968,866 1,247,081 124,151 2,768,997
DECREASE IN NET ASSETS:
Disbursements,
withdrawals,
terminations and
administrative costs 1,200,843 4,126 9,389 9,273 12,488 3,083 1,239,202
Unallocated forfeitures 24,135 384 759 555 777 9,969 36,579
Change in contribution
receivable rollover --
Net change in depreciation
(appreciation) on fund
investments (46,751) (13,092) (42,048) (39,127) (54,702) (1,098,589) (1,294,309)
----------- ------------ -------- ------------ ---------- ------------ -----------
Total deductions
(additions) 1,178,227 (8,582) (31,900) (29,299) (41,437) (1,085,537) (18,528)
----------- ------------ -------- ------------ ---------- ------------ -----------
Net increase
(decrease) (2,177,955) 502,408 966,701 998,165 1,288,518 1,209,688 2,787,525
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of
year 5,293,444 -- -- -- -- 158,886 5,452,330
----------- ------------ -------- ------------ ---------- ------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 3,115,489 $ 502,408 $966,701 $ 998,165 $1,288,518 $ 1,368,574 $ 8,239,855
----------- ------------ -------- ------------ ---------- ------------ -----------
----------- ------------ -------- ------------ ---------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
1994
PARTICIPANT
DIRECTED
FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED HANOVER
INCOME BOND GROWTH EQUITY VALUE DIRECT, INC.
FUND FUND FUND FUND FUND STOCK FUND COMBINED
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
Interest income $ 8,258 $ 284 $ 678 $ 477 $ 688 $ 969 $ 11,354
Change in plan participant
loan receivable 219,463 219,463
Contributions
Participants 2,732,479 2,732,479
Hanover Direct, Inc. and
subsidiaries (net of
credited forfeitures
of $0, $36,579 and
$44,691 in 1993, 1994
and 1995, respectively 610,792 610,792
Interfund transfers (1,403,579) 107,684 495,778 316,174 389,186 94,757 --
----------- ------------ ---------- ------------ ---------- ------------ ------------
1,939,692 107,684 495,778 316,174 389,186 94,757 3,343,271
----------- ------------ ---------- ------------ ---------- ------------ ------------
Total additions 2,167,413 107,968 496,456 316,651 389,874 95,726 3,574,088
DECREASE IN NET ASSETS:
Disbursements,
withdrawals,
terminations and
administrative costs 1,208,284 4,230 13,572 12,886 17,032 833 1,256,837
Unallocated forfeitures 17,142 1,211 3,828 1,665 3,219 2,305 29,370
Change in contribution
receivable rollover (346,412) (23,321) (52,789) (42,377) (36,076) (4,966) (505,941)
Net change in depreciation
(appreciation) on fund
investments (200,381) 7,155 16,350 (14,718) (958) 568,737 376,185
----------- ------------ ---------- ------------ ---------- ------------ ------------
Total deductions
(additions) 678,633 (10,725) (19,039) (42,544) (16,783) 566,909 1,156,451
----------- ------------ ---------- ------------ ---------- ------------ ------------
Net increase
(decrease) 1,488,780 118,693 515,495 359,195 406,657 (471,183) 2,417,637
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of
year 3,115,489 502,408 966,701 998,165 1,288,518 1,368,574 8,239,855
----------- ------------ ---------- ------------ ---------- ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 4,604,269 $ 621,101 $1,482,196 $ 1,357,360 $1,695,175 $ 897,391 $ 10,657,492
----------- ------------ ---------- ------------ ---------- ------------ ------------
----------- ------------ ---------- ------------ ---------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
1995
PARTICIPANT
DIRECTED HANOVER
FIXED CONSERVATIVE CAPITAL CONSERVATIVE BALANCED DIRECT,
INCOME BOND GROWTH EQUITY VALUE INC.
FUND FUND FUND FUND FUND STOCK FUND COMBINED
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
Interest income $ 4,953 $ 283 $ 719 $ 561 $ 782 $ 1,442 $ 8,740
Change in plan participant
loan receivable (2,050) (2,050)
Contributions
Participants 2,101,045 2,101,045
Hanover Direct, Inc. and
subsidiaries (net of
credited forfeitures
of $0, $36,579 and
$44,691 in 1993, 1994
and 1995, respectively 565,861 565,861
Interfund transfers (814,105) 66,472 263,508 195,330 242,071 46,724 --
----------- ------------ ---------- ------------ ---------- ---------- ------------
1,852,801 66,472 263,508 195,330 242,071 46,724 2,666,906
----------- ------------ ---------- ------------ ---------- ---------- ------------
Total additions 1,855,704 66,755 264,227 195,891 242,853 48,166 2,673,596
DECREASE IN NET ASSETS:
Disbursements,
withdrawals,
terminations and
administrative costs 1,700,905 5,756 22,630 20,028 24,840 13,052 1,787,211
Unallocated forfeitures 10,985 2,829 18,638 6,499 5,571 14,020 58,542
Change in contribution
receivable rollover 346,412 23,321 52,789 42,377 36,076 4,966 505,941
Net change in depreciation
(appreciation) on fund
investments (266,774) (96,013) (519,619) (452,305) (483,669) 498,452 (1,319,928)
----------- ------------ ---------- ------------ ---------- ---------- ------------
Total deductions
(additions) 1,791,528 (64,107) (425,562) (383,401) (417,182) 530,490 1,031,766
----------- ------------ ---------- ------------ ---------- ---------- ------------
Net increase
(decrease) 64,176 130,862 689,789 579,292 660,035 (482,324) 1,641,830
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of
year 4,604,269 621,101 1,482,196 1,357,360 1,695,175 897,391 10,657,492
----------- ------------ ---------- ------------ ---------- ---------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 4,668,445 $ 751,963 $2,171,985 $ 1,936,652 $2,355,210 $ 415,067 $ 12,299,322
----------- ------------ ---------- ------------ ---------- ---------- ------------
----------- ------------ ---------- ------------ ---------- ---------- ------------
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<PAGE>
HANOVER DIRECT, INC.
SAVINGS AND RETIREMENT PLAN
(formerly The Horn & Hardart Company Savings Plan)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 and 1995
NOTE 1. DESCRIPTION OF THE PLAN
The Hanover Direct, Inc. Savings and Retirement Plan (the "Plan"),
formerly The Horn & Hardart Company Savings Plan, commenced April 1, 1983.
Participation in the Plan is available to all eligible employees of Hanover
Direct, Inc. and its subsidiaries (the "Company") that have attained the age of
21, have credit for not less than one year of service (1000 hours), and have
applied for participation in the Plan.
Participants whose annual base salary is under $66,000 may make pre-tax
contributions of up to 10% of their total annual compensation ("Basic
Contribution"). The Company matches one-third of these pre-tax contributions up
to 6% of their total annual compensation ("Employer Contribution"). These same
participants may contribute up to 10% of their total annual compensation on a
voluntary basis ("Voluntary Contribution"). The Voluntary Contributions are not
tax-deferred and must, therefore, be considered an after-tax contribution.
Voluntary Contributions are not matched by the Company. The participants have
the right to elect that contributions (Basic, Employer, and Voluntary
Contributions) be allocated to any combination of six funds. The six funds are
Fixed Income Fund, Hanover Direct, Inc. Stock Fund, which invests only in common
stock of the Company, a party in interest, Conservative Bond Fund, Capital
Growth Fund, Conservative Equity Fund, and a Balanced Value Fund.
A participant whose total annual compensation is in excess of $66,000,
or a highly compensated employee ("HCE"), is limited to pre-tax contributions of
4-1/2% of their total annual compensation. The Company matches one-third of
these contributions. No Voluntary Contributions are permitted by an HCE.
The maximum limitation on employee pre-tax contributions for 1995 and
1994 was $9,240. In 1995 the HCE maximum compensation limit for contributions
was $150,000. The Plan elected to maintain a 4-1/2% maximum contribution level
on HCE's, limiting this group to a maximum contribution of $6,750.
There were 1,621, 2,086 and 1,706 participants in the Plan at December
31, 1993, 1994 and 1995, respectively.
A participant will become 100% vested in the account value of the
Employer's Contribution upon the earlier of: the completion of five calendar
years of vesting service, retirement or
5
<PAGE>
<PAGE>
termination after reaching age 62, death while an employee, or because of
permanent disability. Participants are fully vested in their Basic Contributions
immediately. A participant may elect to withdraw from his Voluntary Contribution
account an amount not to exceed his vested account value. Forfeitures by reason
of termination, withdrawal or lapse of participation are used to reduce the
Company's contribution for that particular year. Forfeitures of $29,370 from the
1994 Plan year were used to reduce Company contributions to participants in
1995. In 1995, forfeitures amounted to $74,215 of which $15,321 were used to
reduce Company contributions for 1995. The remainder will be used to reduce
Company contributions to participants in 1996.
Participants are allowed to take out loans of up to 50% of their
individual vested balance as of the most current Plan valuation. The minimum
loan is $500 while the maximum is $50,000. The loans can be for a period between
one to five years, in whole year increments, bearing a fixed rate of interest of
the Prime Rate plus one percent, determined at the time of loan issuance. Each
participant can have only one loan outstanding at any one time and the loan can
be repaid before the end of the original term.
The Plan participant loan receivable amounted to $425,939 and $427,989
at December 31, 1995 and 1994, respectively with interest rates ranging from 7%
to 10% at the end of 1995.
The Plan is administered by the 401-K Committee (the "Committee") which
is comprised of two persons who serve at the sole discretion of the Company's
Board of Directors without compensation from the Plan. The Committee has general
authority to control and manage the operation and administration of the Plan,
including authority to appoint and remove trustees and to adopt rules
interpreting or implementing the Plan.
Administrative costs of the Plan are borne by the Plan and were,
$94,981 and $63,712 in 1995 and 1994, respectively. These costs are included in
disbursements, withdrawals, terminations and administrative costs.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Investments in the Company's common stock are stated at market value as
determined by reference to published market data. Purchases and sales of
securities are recorded on a trade date basis, and interest is recorded on the
accrual basis. Investments in the Fixed Income Fund, Conservative Bond Fund,
Balanced Value Fund, Conservative Equity Fund, and Capital Growth Fund are
stated at market value.
The accompanying financial statements have been prepared on the accrual
basis of accounting. Certain prior year amounts have been reclassified to
conform to the current year presentation.
6
<PAGE>
<PAGE>
NOTE 3. INVESTMENTS
In December 1992, the Company appointed Pain Webber Trust Company
("PWTC") as the Investment Advisor/Custodian of the Plan funds. Five funds plus
Company stock were made available to all plan participants as investment options
effective April 1, 1993.
A brief description of the investment strategies of each funds is as
follows: Contributions to the Conservative Bond Fund are invested in investment
grade bonds and other fixed income securities. The fund may maintain a cash
equivalent position not exceeding 25% of the Fund's total value. Balanced Value
Fund contributions are invested in equity and fixed income securities.
Contributions to the Conservative Equity Fund are invested in equity securities
of conservative companies with medium to large market capitalizations.
Contributions to the Capital Growth Fund are invested in the equity of
companies. Contributions to the Hanover Direct, Inc. Stock Fund are invested in
the common stock of the Company, a party in interest. As of December 31, 1994
and December 31, 1995, the stock fund held 242,669 and 254,915 shares
respectively, at corresponding market values of $884,044 and $416,849. The stock
price at June 18, 1996, was $1.75 per share. All contributions and distributions
are made to/from the Fixed Income Fund. All of the above mentioned investments
exceed 5% of the Plan's net assets available for benefits as of December 31,
1995 and December 31, 1994.
NOTE 4. UNALLOCATED CONTRIBUTIONS
The Unallocated contributions consist of employee and employer
contributions that as of December 31, 1994 and December 31, 1995 have not been
allocated to the proper participant elected funds. These amounts were invested
in a money market fund earning interest until the allocations were made in the
first quarter of 1995 and 1996, respectively.
NOTE 5. FUND RECEIVABLE
The Fund receivable consists of unallocated employee and employer
contributions owed to the fund for 1994 and 1995. These amounts were received by
the fund in 1995 and 1996, respectively, and then subsequently allocated among
the proper funds.
NOTE 6. CONTRIBUTION PAYABLE
The December 31, 1994 contribution payable consisted of unvested
Employer Contributions forfeited by terminated Plan participants and excess
Employer Contributions made by Hanover Direct, Inc. The forfeited amounts and
the excess contribution were used to reduce the Company's contributions to
participants in 1995. Some participants requesting loan withdrawals at the end
of the 1994 plan year were not paid until 1995. These withdrawals amounted to
$2,000.
7
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<PAGE>
The December 31, 1995 contribution payable consists of unvested
Employer Contributions forfeited by terminated plan participants and participant
requested withdrawals not disbursed by the end of the plan year. The forfeited
amounts will be used to reduce the Company's contributions to participants in
1996. The participant requested withdrawals included loan withdrawals which
amounted to approximately $20,000. All requested withdrawals will be paid out to
participants in 1996.
NOTE 7. CHANGE IN CONTRIBUTION RECEIVABLE ROLLOVER
During the 1994 Plan year, the Plan recorded a receivable of $505,941
due from the Tweeds, Inc. Profit sharing Plan (the "Tweeds Plan") (Tweeds, Inc.
is a subsidiary of the Company which was acquired in September 1993). This
receivable was recorded in anticipation of the rollover of assets from the
Tweeds Plan based on the fair market value of the Tweeds Plan assets at December
31, 1994. During the 1991 Plan year, all of the assets of the Tweeds Plan which
were held by MBL Life Assurance Corporation ( a Trustee of the Tweeds Plan) were
placed into a frozen trust by the State of New Jersey Department of Insurance as
a result of bankruptcy proceedings against the fund sponsor. The assets in
the frozen trust have been guaranteed by a consortium of life insurance
companies and state guaranty associations for a seven year rehabilitation
period. In addition, the individual participants of Tweeds Plan may elect not to
rollover their accounts into the Plan when assets are released from the frozen
trust. Because of these uncertainties, the Plan removed this receivable from its
assets during the 1995 Plan year. At such a time when the remaining assets of
the Tweeds Plan are transferred to the Plan, they will be accounted for as a
rollover contribution.
NOTE 8. NET DEPRECIATION (APPRECIATION) ON FUND INVESTMENTS
The net (appreciation)/depreciation on fund investments at December 31,
1995 and December 31, 1994 consists of unrealized (appreciation)/depreciation of
approximately ($1,230,000) and $578,000 and an aggregate realized gain of
approximately $90,000 and $202,000, respectively. The Plan sold investments
during Plan years 1995 and 1994 with approximate aggregate costs of $1,362,000
and $965,000, resulting in aggregate proceeds of approximately $1,452,000 and
$1,167,000 respectively. The realized gain/loss on the investments sold is the
difference between the market value at the beginning of the Plan year (or on the
purchase date if purchased during the Plan year) and the date of sale.
NOTE 9. PLAN TERMINATION
The Plan may be terminated at any time at the Company's sole
discretion although the Company has not expressed any intention to do so
currently. Upon termination, contributions by the Company and participants cease
and all Company contributions which had been credited to each participants'
account become fully vested immediately.
8
<PAGE>
<PAGE>
NOTE 10. TAX STATUS
The Plan has received a favorable determination letter from the
Internal Revenue Service stating that the Plan, as of October 6, 1994 is
qualified under Section 401(k) of the Internal Revenue Code and, accordingly, is
exempt from federal income taxes. The Plan was amended and restated during the
year ended December 31, 1989 to reflect the impact of the Tax Reform Act of 1986
and the Technical and Miscellaneous Revenue Act of 1988. In the Committee's
opinion, based on the advice of counsel, the Plan continues to be a qualified
plan as defined by the Internal Revenue Code.
NOTE 11. SUBSEQUENT EVENT
In November 1995, the Company appointed T. Rowe Price Retirement Plan Services,
Inc. ("Price") as the new investment advisor/custodian of the Plan's funds. Five
funds plus Company Stock were made available to all Plan participants as
investment options effective April 1, 1996. On that date, the balances in the
PWTC Funds were transferred to one or more of the new Price funds with the most
similar investment objectives.
9
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the members of the Administrative Committee have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
HANOVER DIRECT, INC. SAVINGS &
RETIREMENT PLAN
Date: June 27, 1996 s/Wayne P. Garten
-----------------
Wayne P. Garten
Executive Vice President
Chief Financial Officer
s/Edward J. O'Brien
-------------------
Edward J. O'Brien
Senior Vice President
Treasurer and Secretary
10
<PAGE>
<PAGE>
HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN
(FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN)
FORM 5500-ITEM 27A
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT
DESCRIPTION COST VALUE
- ------------------------------------------------------------------------- --------------------------
<S> <C> <C>
Investment in Fixed Income Portfolio-
Paine Webber Trust $ 3,748,454 $ 4,225,843
Investment in Conservative Bond Portfolio-Paine Webber Trust 644,122 741,289
Investment in Capital Growth Portfolio-Paine Webber Trust 1,613,792 2,140,680
Investment in Conservative Equity Portfolio-Paine Webber Trust 1,420,553 1,896,783
Investment in Balanced Value Portfolio-Paine Webber Trust 1,813,338 2,322,203
Investment in Hanover Direct, Inc. Common Stock(1) 691,256 416,849
Plan Participant Loan Receivable(2) 425,939 425,939
----------- -----------
Total assets held for investment purposes 10,357,454 12,169,586
----------- -----------
----------- -----------
</TABLE>
(1) Represents party in interest.
(2) Terms of these loans generally range from 1 to 5 years and bear interest
ranging from 7.0% to 10.0%.
<PAGE>
<PAGE>
HANOVER DIRECT, INC. SAVINGS AND RETIREMENT PLAN
(FORMERLY THE HORN AND HARDART COMPANY SAVINGS PLAN)
FORM 5500-ITEM 27D
SCHEDULE OF REPORTABLE TRANSACTIONS(1)
FOR THE YEAR ENDED DECEMBER 31, 1995
SERIES OF TRANSACTIONS
<TABLE>
<CAPTION>
IDENTITY OF EXPENSE
PARTY PURCHASE SELLING LEASE INCURRED WITH CURRENT NET
INVOLVED DESCRIPTION PRICE(2) PRICE(2) RENTAL TRANSACTION COST VALUE GAIN
- ------------------------------------------------ ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paine Webber Investment in Fixed Income
Trust Portfolio $17.09 $ -- $ -- $-- $658,717 $658,717 $ --
Paine Webber Investment in Fixed Income
Trust Portfolio $ -- 17.34 $ -- $-- 511,546 561,620 50,074
</TABLE>
(1) Defined as five percent of Plan net assets at beginning of Plan year.
(2) Average price.
<PAGE>
<PAGE>
Exhibit 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into Hanover Direct, Inc.'s (formerly The
Horn & Hardart Company) previously filed Registration Statement File No.
2-94286.
New York, New York ARTHUR ANDERSEN LLP
June 27, 1996
