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
<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
<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
<PAGE>
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.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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
<PAGE>
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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator, Rose's Stores, Inc., has duly caused this annual report to
be signed by the undersigned, thereunto duly authorized.
ROSE'S STORES, INC.
RETIREMENT SAVINGS 401(k) PLAN
BY: /s/Camilla Wheeler
Camilla Wheeler
Director, Human Resources
Date: June 30, 1997
PAGE
<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
<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
<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
<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
<TABLE>
<CAPTION>
1996
FUNB Invesco
Diversified Fidelity Total Fidelity
Bond Magellan Return Advisor
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1996
Templeto Evergreen
Growth Evergreen Treasury Loan
Fund Fund Fund Fund Total
Assets:
<S> <C> <C> <C> <C> <C>
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
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Rose's Invesco
Stable Diversified Fidelity Total
Income Bond Magellan Return
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Fidelity Templeton
Advisor Growth Evergreen Loan
Fund Fund Fund Fund Total
Assets:
<S> <C> <C> <C> <C> <C>
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
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<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
<TABLE>
<CAPTION>
1996
Templeton Evergreen
Growth Evergreen Treasury Loan
Fund Fund Fund Fund Total
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C> <C>
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
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Guaranteed Diversified Rose's
Income Equity Stock Temporary
Fund Fund Fund Fund
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Life Bond American
Insurance Fund of Balanced Sub
Option America Fund Total
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Rose's Invesco
Stable Diversified Fidelity Total
Income Bond Magellan Return
Fund Fund Fund Fund
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1995
Fidelity Templeton
Advisor Growth Evergreen Loan
Fund Fund Fund Fund Total
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
1994
Guaranteed Diversified Rose's
Income Equity Stock Temporary
Fund Fund Fund Fund
Additions to net assets attributed to:
Investment income:
<S> <C> <C> <C> <C>
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)
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C>
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
</TABLE>
See accompanying notes to financial statements.
PAGE
<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
<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
<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):
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
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)
</TABLE>
PAGE
<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.
<PAGE>
<PAGE>
Schedule 1
ROSE'S STORES, INC. RETIREMENT SAVINGS 401(K) PLAN
(FORMERLY VARIABLE INVESTMENT PLAN)
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 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
<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
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C>
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
</TABLE>
(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.
