<PAGE> 1
FORM 10-K/A-3
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 3, 1995 Commission File Number 1-5025
REVCO D.S., INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1527876
(State of incorporation) (I.R.S. Employer Identification No.)
1925 ENTERPRISE PARKWAY
TWINSBURG, OHIO 44087
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 216/425-9811
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Common Stock, par value $.01 per share (New York Stock Exchange)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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, 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 the 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. [ ]
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of August 18, 1995 was $961,049,554 (based on total shares
outstanding reduced by the number of shares held by directors and officers, at
the last sale price as reported on the New York Stock Exchange Composite Tape on
August 18, 1995).
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
--- ---
The following documents are incorporated herein by reference: the Registrant's
Annual Report to Stockholders for the fiscal year ended June 3, 1995 (into Part
II of this report); and the Registrant's Proxy Statement for the 1995 Annual
Meeting of Stockholders (into Part III of this report).
As of August 18, 1995, there were 67,110,552 shares of Common Stock outstanding.
The Exhibit Index is located herein beginning at sequential page 2.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) Documents filed as part of this report:
1. Financial Statements: The Registrant hereby amends its
Annual Report on Form 10-K for the fiscal year ended June
3, 1995 (the "Form 10-K") for the purpose of filing, in
accordance with Rule 15d-21 promulgated under the Exchange
Act, the financial statements required by Form 11-K with
respect to the Revco D.S., Inc. 1993 Employee Stock
Purchase Plan, as amended (the "Plan"), short Plan year
ended December 4, 1995. The Registrant previously filed an
amendment to its Form 10-K relating to the full Plan year
ended May 31, 1995. The foregoing financial statements are
set forth beginning on page F-1 of this amendment.
3. Exhibits:
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER EXHIBIT DESCRIPTION NUMBER
- - ------ ------------------- ------
23.1 -Consent of Arthur Andersen LLP, independent public
accountants
23.2 -Consent of Arthur Andersen LLP, independent public
accountants, with respect to Registration Statement
No. 33-67816
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
REVCO D.S., INC.
(Registrant)
Date: April 1, 1996 By: /s/ PAUL N. HARRIS
-------------------
Paul N. Harris
Assistant Secretary
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REVCO D.S., INC.
----------------
1993 EMPLOYEE STOCK PURCHASE PLAN,
---------------------------------
AS AMENDED
----------
Index
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants .................................................... 2
Statements of Net Assets Available for Plan Benefits
as of December 4, 1995 and May 31, 1995 .................................................... 3
Statements of Changes in Net Assets Available for Plan Benefits
for the Six Months Ended December 4, 1995, Twelve Months
Ended May 31, 1995 and Nine Months Ended May 31, 1994 ....................................... 4
Notes to Financial Statements ............................................................... 5
</TABLE>
F-1
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Human Resources Committee of the Board of Directors of
Revco D.S., Inc.:
We have audited the accompanying statements of net assets available for plan
benefits of the Revco D.S., Inc. 1993 Employee Stock Purchase Plan, as amended
(the "Plan") as of December 4, 1995 and May 31, 1995, and the related statements
of changes in net assets available for plan benefits for the six, twelve and
nine months ended December 4, 1995, May 31, 1995 and May 31, 1994, respectively.
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 4, 1995 and May 31, 1995 and the changes in its net assets available
for plan benefits for the six, twelve and nine months ended December 4, 1995,
May 31, 1995 and May 31, 1994, respectively, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
Cleveland, Ohio
March 29, 1996.
F-2
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REVCO D.S., INC.
----------------
1993 EMPLOYEE STOCK PURCHASE PLAN,
----------------------------------
AS AMENDED
----------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
----------------------------------------------------
<TABLE>
<CAPTION>
December 4, May 31,
1995 1995
---------- ----------
<S> <C> <C>
ASSETS:
Cash $4,602,282 $6,065,048
LIABILITIES:
Company common stock distribution payable to participants 4,291,129 --
Cash distribution payable to participants for withdrawals and
residual balances 130,134 --
Cash distribution payable to officers 181,019 --
---------- ----------
4,602,282 --
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ -- $6,065,048
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-3
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REVCO D.S., INC.
----------------
1993 EMPLOYEE STOCK PURCHASE PLAN,
----------------------------------
AS AMENDED
----------
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Twelve Months Nine Months
Ended Ended Ended
December 4, 1995 May 31, 1995 May 31, 1994
---------------- ------------ ------------
<S> <C> <C> <C>
ADDITIONS:
Participant contributions $ 4,771,102 $ 6,115,470 $ 3,570,171
DEDUCTIONS:
Purchase of Company common stock 10,260,998 3,158,195 --
Distributions to terminated participants 199,664 230,765 87,870
Distributions for withdrawals 141,776 118,590 25,173
Distributions for residual balances 52,693 -- --
Distributions to officers 181,019 -- --
------------ ------------ ------------
Total deductions 10,836,150 3,507,550 113,043
------------ ------------ ------------
NET ADDITIONS (DEDUCTIONS) (6,065,048) 2,607,920 3,457,128
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
Beginning of plan year 6,065,048 3,457,128 --
------------ ------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
End of plan year $ -- $ 6,065,048 $ 3,457,128
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-4
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REVCO D.S., INC.
----------------
1993 EMPLOYEE STOCK PURCHASE PLAN,
----------------------------------
AS AMENDED
----------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 4, 1995
----------------
1. SUMMARY OF PLAN
---------------
The Revco D.S., Inc. 1993 Employee Stock Purchase Plan, as amended (the "Plan")
is "an employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), covering all eligible
employees of Revco D.S., Inc. and its subsidiaries (the "Company"). Plan years
are defined in the Plan document as generally beginning on June 1 and ending on
May 31 of the following year, with the exceptions of the 1994 Plan year which
began September 1, 1993 and ended May 31, 1994 and the 1996 Plan year which
began June 1, 1995 and ended December 4, 1995.
The Plan grants to eligible employees at the beginning of the Plan year an
option to purchase Company common stock, using participant contributions
collected through payroll deductions. The common stock is issued on the first
day following the end of the Plan year at an option price equal to the lesser of
85% of the closing New York Stock Exchange price ("closing price") on the first
day or the last day of the Plan year ("Purchase Price"). Only whole shares are
purchased for each participant with any residual amounts remaining in the
participants' accounts for the following Plan year. For the 1996 Plan year,
residual amounts were distributed in cash to the participants immediately after
the end of the Plan year in connection with a proposed merger transaction (see
Note 2 below). Distributions are accrued at December 4, 1995 since these are
immediate liabilities of the Plan as a result of the merger.
Eligibility
- - -----------
All full-time and part-time employees of the Company as of the beginning of the
Plan year, or other offering period as designated by the Human Resources
Committee of the Board of Directors (the "Committee"), are eligible to
participate in the Plan.
Contributions
- - -------------
Participants can elect to contribute from 1% to 10% of their gross compensation
(at a minimum of $10 per pay period) excluding overtime, commissions and
bonuses. The contribution percentage may not change during the year; however,
deductions may be discontinued at any time during the year with or without
withdrawing from the Plan.
No employees will be entitled to receive shares of common stock of the Company
in excess of an aggregate fair market value of $25,000 in any calendar year.
Cash Distributions
- - ------------------
F-5
<PAGE> 9
Upon termination of a participant from the Company or upon a participant's
elective withdrawal from the Plan, amounts contributed by the participant during
the Plan year are refunded and the right to purchase shares under the Plan is
canceled.
Stock Distributions
- - -------------------
Plan purchases of Company common stock are distributed to participants with no
restrictions.
Termination
- - -----------
The Committee has the right to amend or terminate the Plan. Upon termination of
the Plan, amounts contributed by participants will be refunded at the time of
termination.
Basis of Accounting
- - -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
2. MERGER AGREEMENT
----------------
On November 30, 1995, the Company and Rite Aid Corporation ("Rite Aid") jointly
announced that they had entered into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which Rite Aid would acquire the Company in a
two-step transaction involving an initial tender offer followed by a merger of a
wholly-owned acquisition subsidiary of Rite Aid with and into the Company, with
the Company being the surviving corporation (the "Merger").
In accordance with the Merger Agreement, the Plan was amended, effective
December 4, 1995, to adopt a short Plan year. Participant account balances, as
of December 4, 1995, were used to purchase shares of Company common stock based
on the lesser of 85% of the closing price on June 1, 1995 or December 4, 1995.
The applicable Purchase Price was $17.96 (85% of closing price on June 1, 1995).
As a result of the Merger, contributions to the Plan were suspended as of
December 4, 1995.
3. ACQUISITION OF HOOK-SUPERX, INC.
--------------------------------
On July 15, 1994, the Company completed its acquisition of Hook-SupeRx, Inc.
("HSI"). Effective January 1, 1995, former HSI employees were eligible to
participate in the Plan. The Plan was amended to extend eligibility to former
employees of HSI. The initial offering period for these employees, as determined
by the Committee, was January 1, 1995 to May 31, 1995. Accordingly, the option
price of the Company common stock for these former HSI employees was based on
the lesser of 85% of the closing price on January 1, 1995 or May 31, 1995. The
Purchase Price used on June 1, 1995 for the issuance of this Company common
stock for former HSI employees was $18.06 (85% of the closing price on January
1, 1995).
F-6
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4. PURCHASE OF COMPANY COMMON STOCK
--------------------------------
On December 21, 1995, for the Plan year ended December 4, 1995, the Plan
purchased 238,927 shares of Company stock at $17.96 per share for a total
purchase price of $4,291,129. The remaining cash in non-officer participant
accounts of $130,134 was distributed during January and February 1996. In lieu
of receiving shares of common stock for the Plan year ended December 4, 1995,
each of the Company's key executives who participated in the Plan during such
Plan year made an irrevocable election to terminate participation in the Plan in
exchange for cash awards pursuant to a cash compensation plan implemented in
connection with the Merger. In February 1996, $181,019 was distributed to key
executives of the Company representing their contributions to the Plan for the
1996 Plan year.
On June 1, 1995, for the Plan year ended May 31, 1995, the Plan purchased
337,719 shares of Company common stock at $14.98 per share and 50,434 shares at
$18.06 per share, for a total purchase price of $5,969,869.
On June 1, 1994, for the Plan year ended May 31, 1994, the Plan purchased
309,627 shares of Company common stock at $10.20 per share, for a total purchase
price of $3,158,195.
5. FEDERAL INCOME TAX STATUS
-------------------------
Under Section 423(a) of the Code, the transfer of a share of stock to an
employee pursuant to the Plan will generally be entitled to the benefits of
Section 421(a) of the Code. Under that Section, participants in the Plan are not
required to recognize income at the time the option to purchase is granted or at
the time the option to purchase is exercised. Provided that certain holding
period requirements are met, the employee's gain on sale will be taxed as
ordinary income to the extent the fair market value on the date of exercise is
greater than the Purchase Price. Any additional gain is taxed as long-term
capital gain. If the fair market value on the date of sale is less than the
Purchase Price, this loss will be treated as a long-term capital loss.
If the holding period requirements are not met, any gain or loss realized upon
the sale of the stock is treated as ordinary income or loss to the employee.
Consummation of the Merger may result in taxable ordinary income to Plan
participants with respect to shares issued to them under the Plan. Participants
will be notified as to the amount of income includable in their forms W-2 for
the 1996 tax year.
F-7
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment to Form 10-K/A-3 of our report dated July 27, 1995
included in Revco D.S., Inc.'s annual report to stockholders. It should be noted
that we have not audited any financial statements of the Company subsequent to
June 3, 1995 or performed any audit procedures subsequent to the date of our
report.
Cleveland, Ohio
March 29, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Amendment to Form 10-K/A-3 into the Company's previously
filed Registration Statement on Form S-8, File No. 33-67816.
Cleveland, Ohio
March 29, 1996
