<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _______________
Commission file number ___________1-5380__________
FULL TITLE OF THE PLAN:
AMES DEPARTMENT STORES, INC. RETIREMENT AND SAVINGS PLAN
NAME OF THE PLAN'S SPONSOR AND
THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE
Ames Department Stores, Inc.
2418 Main Street
Rocky Hill, CT 06067
_______________________________________________________________________________
ITEMS TO BE ANSWERED
ITEM 1. CHANGES IN THE PLAN
There were no material changes to the Ames Department Stores, Inc. Retirement
and Savings Plan (the "Plan") during 1993.
ITEM 2. CHANGES IN INVESTMENT POLICY
In December, 1993, in connection with the transition to IDS Institutional
Retirement Services ("IDS") as the full service provider to the Plan in 1994,
approximately $27.5 million of liquid Plan assets were invested in three IDS
collective investment funds.
The option to invest in the common stock of Ames Department Stores, Inc. (the
"Company"), the Plan's sponsor, was suspended during 1991 due to the Company's
pending reorganization under Chapter 11 of the Bankruptcy Code. In addition,
the remaining common stock of the Company held by the Plan was sold and the
proceeds transferred to general investment funds in January, 1992.
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ITEM 3. CONTRIBUTIONS UNDER THE PLAN
For each participant's contribution (up to a maximum of 5% of such
participant's total compensation), the Company contributes to the Plan an
amount equal to 50% of such contribution. A participant may contribute to the
Plan from 1% to 18% of annual compensation on a pre-tax or after-tax basis, or
a combination of both.
During 1993, the Company contributed $2,236,848 to the Plan.
ITEM 4. PARTICIPATING EMPLOYEES
As of December 31, 1993, approximately 5,800 employees were participating in
the Plan.
ITEM 5. ADMINISTRATION OF THE PLAN
The Plan is administered by the Policy Committee of Ames Department Stores,
Inc. (the "Committee") which is comprised of three persons who are appointed by
the Board of Directors of the Company. Members of the Committee serve at the
sole discretion of the 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.
The business address of the Committee members is 2418 Main Street, Rocky Hill,
Connecticut 06067.
ITEM 6. CUSTODIAN OF INVESTMENTS
During the years presented, the funds of the Plan were held by:
State Street Bank and Trust Company
P.O. Box 1389
Boston, Massachusetts 02104
All fees, commissions and other charges assessed by the custodians are paid by
the Company. Certain investment management fees were paid by the Plan through
January, 1992. No bonds are provided by the custodians of Plan assets.
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES
All participating employees received quarterly statements reflecting the status
of their individual accounts during 1993.
ITEM 8. INVESTMENT OF FUNDS
In January 1993, the Company established a master trust for its three
retirement plans. The master trust permits the combining of assets of the
plans so that all participants within the plans may earn the same rate of
return on invested assets.
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The assets of the Plan are invested in IDS collective investment funds,
guaranteed investment contracts with several insurance companies, a short-term
investment (pooled) fund and a money market fund. There were no brokerage
commissions incurred by the Plan in the years presented.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Ames Department Stores, Inc. Retirement
and Savings Plan.
Report of Independent Public Accountants 5
Financial Statements:
Statements of Net Assets Available for Plan 6
Benefits as of December 31, 1993 and 1992
Statements of Changes in Net Assets Available 7
for Plan Benefits for the Years Ended
December 31, 1993, 1992 and 1991
Notes to Financial Statements 8
Schedules:
Schedule of Assets Held for Investment Purposes 13
as of December 31, 1992
(b) Exhibits - None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement and Savings Plan Policy Committee of Ames Department Stores, Inc.
has duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
Ames Department Stores, Inc. Retirement and Savings Plan
Dated: June 28, 1994 /s/ William C. Najdecki
----------------------------
William C. Najdecki, Senior
Vice President, Chief Accounting
Officer
Ames Department Stores, Inc.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of Ames Department Stores, Inc.
Retirement and Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Ames Department Stores, Inc. Retirement and Savings Plan as of
December 31, 1993 and 1992, and the related statements of changes in net assets
available for plan benefits for the years ended December 31, 1993, December 31,
1992 and December 31, 1991. These financial statements and the schedule referred
to below are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements and schedule 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, 1993 and 1992, and the changes in its net available for plan
benefits for the years ended December 31, 1993, December 31, 1992 and December
31, 1991, in conformity with generally accepted accounting principles.
Included among investments on the statements of net assets available for plan
benefits as of December 31, 1993 and 1992, are investments in Executive Life
Insurance Company, which was seized by insurance regulators in April 1991. As
discussed in Note 7 to the financial statements, the Plan administrator is
unable to determine whether the carrying amount of these investments will be
realizable.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, subject to the effect of such adjustments related to
investments in Executive Life Insurance Company, if any, as might have been
required had the outcome been known, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
New York, New York
June 27, 1994
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<TABLE>
Ames Department Stores, Inc. Retirement and Savings Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 1993 and 1992
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Cash $916 $616
Interest receivable (Note 8) - 21,953
Contribution receivable (Note 3)
Employee 559,169 593,722
Employer 201,675 231,318
Employee promissory notes 1,557,463 1,406,060
Investments at fair value (Notes 1, 7 and 8) 49,842,541 50,847,357
------------ ------------
Net assets available for plan benefits $52,161,764 $53,101,026
============ ============
<FN>
The accompanying notes and schedules are an integral part of these financial statements.
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</TABLE>
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<TABLE>
Ames Department Stores, Inc. Retirement and Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 1993, 1992, and 1991
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Investment Income
Interest income $104,707 $2,080,411 $2,506,089
Pooled income
Master Trust (Notes 1 and 8) 2,260,421 - -
Other 137,997 1,109,473 1,217,144
Administrative expense - (6,994) (85,305)
--------- --------- ---------
Net Investment Income 2,503,125 3,182,890 3,637,928
Realized losses - (31,561) (70,997)
Provision for Executive Life (Note 7) (65,779) (460,453) -
Net appreciation
in fair value of investments - - 17,658
Transfer of assets from the
Zayre Stores Retirement and
Savings Plan (Note 6) - 17,824 15,150,029
Interest income on employee loans 113,610 85,217 6,932
Contributions (Note 2)
Employee 5,947,377 6,587,377 7,334,237
Employer 2,236,848 2,483,105 2,743,921
Participant withdrawals and
benefit payments (Note 2) (11,674,443) (14,636,665) (15,896,476)
------------ ------------ ------------
Net increase (decrease) in net assets
available for plan benefits (939,262) (2,772,266) 12,923,232
Net assets available for plan benefits,
beginning of year 53,101,026 55,873,292 42,950,060
------------ ------------ ------------
Net assets available for plan benefits,
end of year $52,161,764 $53,101,026 $55,873,292
============ ============ ============
<FN>
The accompanying notes and schedules are an integral part of these financial statements.
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Ames Department Stores, Inc. Retirement and Savings Plan
Notes to Financial Statements
December 31, 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
For the periods presented, investments of the Ames Department Stores, Inc.
Retirement and Savings Plan (the "Plan") were held by State Street Bank and
Trust Company ("State Street"). The funds held by State Street consisted
of IDS Institutional Retirement Services ("IDS") collective investment
funds managed by its Stable Capital Management Group; short-term investment
(pooled) funds; money market funds; and guaranteed investment contracts.
The collective investment funds and pooled funds can participate directly
in market appreciation or depreciation. The guaranteed investment
contracts are carried at cost, are guaranteed as to principal, have
guaranteed interest rates for specified periods of time, and do not
participate in market appreciation or depreciation.
Under the terms of the guaranteed investment contracts, the election of a
lump sum withdrawal prior to the maturity of the contract is subject to a
market value adjustment.
The Policy Committee of Ames Department Stores, Inc., (the "Committee") has
the sole authority to appoint trustees with exclusive authority and
discretion to manage and control part or all of the assets of the Plan.
The option to invest in the common stock of Ames Department Stores, Inc.
("Ames" or the "Company"), the Plan's sponsor, was suspended effective May,
1991, due to the Company's pending reorganization under Chapter 11 of the
Bankruptcy Code. This option had been previously available to participants
in the Plan. In addition, the remaining common stock of the Company held
by the Plan was sold and the proceeds transferred to general investment
funds in January 1992.
In December 1993, in connection with the transition to IDS Institutional
Retirement Services ("IDS") as the full service provider to the Plan in
1994, $27.5 million of liquid Plan assets were invested in three IDS
collective investment funds.
In January 1993, the Company established a Master Trust (Note 8) for its
three retirement plans. The Master Trust permits the combining of assets
of the plans so that all participants within the plans may earn the same
rate of return on invested assets.
OTHER
Interest and dividend income are recorded on the accrual basis. All Plan
expenses, including custodian fees, are paid by the Company. Through
January, 1992, certain investment management fees were paid by the Plan.
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Certain amounts in the 1991 financial statements have been reclassified to
conform with the 1993 and 1992 presentation and with the requirements of
the American Institute of Certified Public Accountants Audit and Accounting
Guide, "Audits of Employee Benefit Plans." Withdrawal and benefit payments
authorized prior to year-end but distributed subsequent to year-end were
$1,186,059, $908,921 and $1,038,533 for 1993, 1992 and 1991, respectively.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
2. DESCRIPTION OF THE PLAN
ELIGIBILITY AND BENEFITS PROVISIONS
Employees are eligible to participate in the Plan upon attaining age
twenty-one and one year of service (of at least 1,000 hours) at specified
enrollment dates. The Plan provides for lump-sum withdrawal of employee
benefits upon termination of employment, disability or death. Benefits are
payable upon the request of a participant after separation of employment,
but no later than age 70 1/2.
PARTICIPANT ACCOUNTS
Each participant's account is credited with (a) the participant's
contribution, (b) the Company's pro rata contribution, which includes
forfeitures of terminated participants' nonvested accounts and (c) plan
earnings. Allocations are based on participant earnings or account
balances, as defined in the Plan. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
VESTING
Employee contributions are 100% vested in the Plan. One-half of Company
contributions are vested immediately and the remainder are vested in
increasing percentages until fully vested after five years of service.
Vesting refers to benefits to which participants are entitled regardless of
future service with the Company.
CONTRIBUTIONS
Participants may contribute to the plan from 1% to 18% of their annual
compensation on a pre-tax or after-tax basis, or a combination of both.
For each participant's contribution (up to a maximum of 5% of such
participant's annual compensation), the Company will contribute an amount
equal to 50% of such contribution.
Company contributions, participants' pre-tax contributions and the invest-
ment income related to all contributions are excluded from the
participants' income for federal income tax purposes until such amounts are
withdrawn or distributed. Under the Tax Reform Act of 1986, participants
were limited to 1993 pre-tax contributions of $8,994. This limit is
subject to adjustment due to inflation in each plan year.
LOAN PROVISION
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Effective July 1, 1991, participants who are active employees may borrow up
to 50% of their vested account balance with a minimum loan amount of $500
and a maximum of $50,000 or limits prescribed by the Internal Revenue
Service ("IRS"). The loans must be repaid through weekly payroll
deductions over a period not to exceed three years at an interest rate that
is 2% above the prime rate. Participants may prepay the entire unpaid
balance at any time without penalty.
3. CONTRIBUTIONS RECEIVABLE
Contributions receivable represent the retirement and savings contribution
due from the Company for amounts contributed by employees in December and
the Company's related matching contribution.
4. TAX STATUS
The Plan obtained its latest determination letter on November 2, 1992, in
which the IRS stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The
Committee believes that the Plan was qualified under the Internal Revenue
Code as exempt from federal income taxes as of the financial statement
dates.
5. PLAN TERMINATION
The Company expects to continue the Plan, but retains the right at any time
to discontinue it. Upon any termination or partial termination of the Plan
or the complete discontinuance of contributions thereunder, the interest of
each affected participant in their account at the date of such termination,
partial termination or discontinuance shall be nonforfeitable and all
unallocated contributions and forfeitures shall become nonforfeitable.
6. TRANSFER FROM THE ZAYRE STORES RETIREMENT AND SAVINGS PLAN
Effective May 1, 1991, $15,150,029 of assets of the Zayre Retirement and
Savings Plan (the "Zayre Plan") were transferred into the Plan. This
represented the assets attributable to 2,881 participants of the Zayre
Plan, excluding the union employees at the Company's Clinton and Mansfield,
Massachusetts distribution facilities. In 1992, $17,824 of assets of the
Zayre Plan, representing certain participants transferred out of the
distribution facilities to other functions within the Company, were
transferred into the Plan.
7. INVESTMENT IN EXECUTIVE LIFE INSURANCE COMPANY
The Plan had investments totaling $3,288,951 (at cost) issued by Executive
Life Insurance Company ("Executive Life"). Executive Life was seized by
insurance regulators in April, 1991, resulting in the suspension of income
payments and withdrawals from these investments. Interest is not being
accrued on these investments. For the year ended December 31, 1992, the
Plan recorded an adjustment of $460,453 for an estimated loss on these
investments based upon the latest Executive Life rehabilitation plan. At
that time, the rehabilitation plan was being considered by the California
courts. In August, 1993, a rehabilitation plan was approved by the courts
and is currently being implemented. The Committee currently estimates an
84% recovery (based on present value) on the cost of the Executive Life
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investments and, accordingly, the Plan has recorded an additional
adjustment of $65,779 for the year ended December 31, 1993 to reduce the
investments to estimated fair value.
In September 1993, the Master Trust received $521,261 for the Plan's share
of the initial receipt of funds under the Executive Life payment plan and,
accordingly, the Plan's Executive Life investments were reduced by that
amount. Through April 1994, the Plan has received in cash, including the
September 1993 distribution, approximately 58% of the cost of its Executive
Life investments, with the remaining cash payments due in installments
through approximately 1998. The Committee is currently in the process of
arranging the allocation of the funds received among the participants. The
Committee is unable to determine with certainty if the remaining carrying
amount of the Executive Life investments will be fully realizable.
8. MASTER TRUST ALLOCATION
The Plan's interest in the assets of the Ames Department Stores, Inc.
Master Trust (the "Master Trust" - see also Note 1) is included in the
accompanying statement of net assets available for plan benefits for 1993.
A summary of the assets of the Master Trust as of December 31, 1993 is as
follows:
1993
-------------------------
Fair Value Cost
---------- -----------
Investments
IDS collective funds
Income Fund $14,053,522 $14,053,762
Stable Capital Fund 9,832,125 9,832,719
Federal Income Fund 4,214,150 4,222,635
Guaranteed investment contracts
Executive Life Insurance Co. 740,826 910,631
1988 Selection Fund BB (Executive Life) 1,437,885 1,779,512
1988 Selection Fund W (Executive Life) 33,248 41,221
1989 Selection Fund F7 (Executive Life) 86,115 106,271
State Mutual GA - 91364A 463,945 463,945
Provident National - #027-05193-03A 436,185 436,185
Principal Mutual GA - 15646 4,584,348 4,584,348
Prudential GA - 6985 5,465,266 5,465,266
Peoples Security - BDA 00297FR 3,011,261 3,011,261
AIG Life Ins. Co. - #870A 1,746,801 1,746,801
Protective Life Ins. Co. GA - 678A 2,507,913 2,507,913
Peoples Security Life Ins. Co. - BDA 00298FR 36,057 36,057
AIG Life Ins. Co. - 870Z 35,376 35,376
Protective Life Ins. Co. - GA 678B 50,158 50,158
Short-Term Investment (Pooled) Fund 2,078,623 2,078,623
----------- ----------
50,813,804 51,362,684
Interest receivable 6,332 6,332
------------ -----------
Total Assets of the Master Trust $50,820,136 $51,369,016
============ ===========
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Allocations of the fair value of the assets of the Master Trust to
participating plans as of December 31, 1993 are as follows:
1993
-----------------------
Amount Percent
---------- ---------
Ames Department Stores, Inc.
Retirement and Savings Plan $49,842,541 98.08%
Zayre Stores Retirement and
Savings Plan 935,737 1.84
Ames Collective Bargaining Unit Retirement
and Savings Plan - Fredericksburg 41,858 0.08
----------- --------
$50,820,136 100.00%
=========== ========
Master Trust income(loss) allocated to the participating plans for the year
ended December 31, 1993 is as follows:
Interest income $ 679,428
Income on collective funds 105,261
Income on guaranteed investment contracts 1,618,026
Net depreciation in fair value of investments (5,464)
----------
Net investment income $2,397,251
==========
The net depreciation in fair value of investments includes realized
gains(losses) and unrealized appreciation(depreciation). Master Trust
pooled income includes investment income and the net depreciation in fair
value of investments.
9. SUBSEQUENT EVENT
In April, 1994, IDS became the full service provider to the Plan.
Effective July 1, 1994, participants will be able to self-direct their
funds into one or more of four investment options: 1) Ames Fixed Income
Account; 2) IDS Mutual Fund; 3) IDS Stock Fund; and 4) IDS New Dimensions
Fund.
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<TABLE>
Schedule I
Ames Department Stores, Inc. Retirement and Savings Plan
Schedule of Assets Held for Investment Purposes
As of December 31, 1992 (a)
<CAPTION>
1992
Fair Value Cost
------------ ------------
<S> <C> <C>
General Investments
State Street
Guaranteed investment contracts
Executive Life Insurance Co. $883,916 $1,027,809
1988 Selection Fund BB (Executive Life) 1,836,246 2,135,170
Provident National #027-05193-01A 306,779 306,779
1989 Selection Fund F7 (Executive Life) 108,336 125,972
State Mutual GA-91364A 1,161,640 1,161,640
New York Life GA-05457 1,162,239 1,162,239
Provident National #027-05193-02A 95,441 95,441
Aetna Life LT-14148 2,011,777 2,011,777
John Hancock GAC-5393 1,063,227 1,063,227
Provident National #027-05193-03A 1,074,886 1,074,886
Principal Mutual GA-15646 4,240,840 4,240,840
Prudential GA-6985 6,808,363 6,808,363
Peoples Security BDA 00297FR 5,675,409 5,675,409
AIG #870A 1,768,820 1,768,820
Protective Life Ins. Co. GA-678A 2,507,913 2,507,913
Short-Term Investment (Pooled) Fund 5,452,000 5,452,000
Money Market Fund 14,689,525 14,689,525
------------ ------------
Total Investments $50,847,357 $51,307,810
============ ============
Employee Promissory Notes, 8.0%-10.5% $1,406,060 $1,406,060
============ ============
<FN>
(a) As of December 31, 1993, all investments were held by the Master Trust
(Notes 1 and 8).
The accompanying notes are an integral part of this schedule.
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