<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995.
-------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934(NO FEE REQUIRED)
For the transition period from ________ to ________.
Commission File Number
--------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Filene's Basement, Inc. Thrift Incentive Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Filene's Basement, Inc.
40 Walnut Street
Wellesley, MA 02181
<PAGE> 2
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES TO
ACCOMPANY 1995 FORM 5500
ANNUAL REPORT OF EMPLOYEE BENEFIT PLAN
UNDER ERISA OF 1974
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<PAGE> 3
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
for the years ended December 31, 1995 and 1994
<CAPTION>
Page(s)
-------
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 1995 and 1994 3-4
Statement of Changes in Net Assets Available for Benefits for the year ended
December 31, 1995 5
Notes to Financial Statements 6-10
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1995 11
Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1995 12-13
<FN>
Schedules other than those listed above have been omitted because they are
either not required or not applicable.
</TABLE>
1
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Committee of Filene's Basement,
Inc. Thrift Incentive Plan:
We have audited the accompanying statements of net assets available for benefits
of the Filene's Basement, Inc. Thrift Incentive Plan (the "Plan") as of December
31, 1995 and 1994 and the related statement of changes in net assets available
for benefits for the year ended December 31, 1995. 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 benefits of Filene's
Basement, Inc. Thrift Incentive Plan at December 31, 1995 and 1994 and the
related statement of changes in net assets available for benefits for the year
ended December 31, 1995 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 as listed in
the accompanying index on page 1 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 supplemental schedules 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 statements taken as a whole.
Boston, Massachusetts
June 18, 1996
2
<PAGE> 5
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1995
<CAPTION>
Prime Limited Growth and Filene's
Money Fixed Term Income Basement
Market Income Income Equity Corp.
Fund Fund Fund Fund Stock Fund Total
------ ------ ------- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $4,477,495 $1,468,472 $1,306,148 $3,155,552 $65,326 $10,472,993
Accrued income 19,376 7,166 5,855 179 1 32,577
Employee contributions receivable 14,744 5,510 4,702 10,615 1,124 36,695
Employer contributions receivable 61,320 26,047 19,447 55,283 4,425 166,522
---------- ----------------------- -------------------- -----------
Total assets 4,572,935 1,507,195 1,336,152 3,221,629 70,876 10,708,787
----------------------- ----------------------- ------- -----------
LIABILITIES
Return of excess contributions payable 27,122 15,798 10,446 35,677 1,216 90,259
Fees payable 2,695 958 842 1,862 125 6,482
------------------------------------ ---------- ------- -----------
Total liabilities 29,817 16,756 11,288 37,539 1,341 96,741
Net assets available for benefits $4,543,118 $1,490,439 $1,324,864 $3,184,090 $69,535 $10,612,046
======================= ========== ========== ======= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 6
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1994
<CAPTION>
Prime Limited Growth and Filene's
Money Fixed Term Income Basement
Market Income Income Equity Corp.
Fund Fund Fund Fund Stock Fund Total
------ ------ ------- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $4,131,246 $1,378,397 $1,262,056 $2,209,463 $88,054 $9,069,216
Accrued income 18,068 113 234 122 19 18,556
Employee contributions receivable 16,136 8,185 6,138 12,214 1,548 44,221
Employer contributions receivable 68,950 29,546 22,658 45,885 7,385 174,424
---------- ---------- ---------- ---------- ------- ----------
Total assets 4,234,400 1,416,241 1,291,086 2,267,684 97,006 9,306,417
---------- ---------- ---------- ---------- ------- ----------
LIABILITIES
Fees payable 2,257 751 689 1,215 62 4,974
---------- ---------- ---------- ---------- ------- ----------
Total liabilities 2,257 751 689 1,215 62 4,974
---------- ---------- ---------- ---------- ------- ----------
Net assets available for benefits $4,232,143 $1,415,490 $1,290,397 $2,266,469 $96,944 $9,301,443
============= ========== ========== ========== ======= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 7
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1995
<CAPTION>
Prime Limited Growth and Filene's
Money Fixed Term Income Basement
Market Income Income Equity Corp.
Fund Fund Fund Fund Stock Fund Total
------ ------ ------- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employee contributions (Note A) $ 538,765 $ 169,252 $ 148,957 $ 326,474 $ 32,774 $ 1,216,222
Employer contributions (Note A) 61,320 26,047 19,447 55,283 4,425 166,522
Investment income 254,657 95,242 83,876 260,487 215 694,477
Net appreciation (depreciation) in fair
value of investments (Note B) 0 106,624 45,340 444,068 (62,683) 533,349
---------- ---------- ---------- ---------- -------- -----------
Total additions 854,742 397,165 297,620 1,086,312 (25,269) 2,610,570
Distributions from net assets attributed to:
Distributions to employees 480,454 180,666 159,926 352,454 12,888 1,186,388
Return of excess contributions 27,122 15,798 10,446 35,677 1,216 90,259
Administrative expenses 10,174 3,353 3,108 6,297 388 23,320
Transfers between funds 26,017 122,399 89,673 (225,737) (12,352) 0
---------- ---------- ---------- ---------- -------- -----------
Total deductions 543,767 322,216 263,153 168,691 2,140 1,299,967
Net increase (decrease) 310,795 74,949 34,467 917,621 (27,409) 1,310,603
Net assets available for benefits,
beginning of year 4,232,143 1,415,490 1,290,397 2,266,469 96,944 9,301,443
----------------------------------------------------------------------------
Net assets available for benefits,
end of year $4,543,118 $1,490,439 $1,324,864 $3,184,090 $ 69,535 $10,612,046
============================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 8
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
A. Description of Plan:
-------------------
The Filene's Basement, Inc. Thrift Incentive Plan (the "Plan") provides
employees of Filene's Basement Corp. (the "Company") with an opportunity to
voluntarily save for their retirement. The Plan is a defined contribution
plan covering all employees of the Company who have completed 1,000 hours
of credited service in a given calendar year. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
EMPLOYEE AND COMPANY CONTRIBUTIONS
Employees may contribute any whole percentage between 1% and 10% of their
annual compensation, on either a pre-tax or after-tax basis, to the Plan.
The first 5% contributed by participants who are employees on the last day
of the plan year (December 31) is matched by the Company at rate between
20% and 40% as determined each year at the discretion of the Company. In
certain cases, the Internal Revenue Code (the "Code") may limit the amount
of pre-tax contributions made by participants.
The Code also includes provisions which limit the amount of employer
contributions which may be made on behalf of any individual participant and
in the aggregate.
VESTING
Employees of the Company as of July 29, 1988 were automatically 100% vested
in Company matching contributions; all other participants become one-third
vested with each year of service completed. Participants are 100% vested in
their own contributions at all times. Participants who employment with the
Company terminates because of death, disability or retirement will be
deemed 100% vested in Company contributions and related earnings regardless
of actual service. Generally, participants who terminate their employment
with the Company prior to becoming fully vested will forfeit their right to
any nonvested Company contributions and related earnings. Forfeited funds
are used to offset future years' employer contributions.
DISTRIBUTION OF BENEFITS
On termination of service, retirement, death or disability, a participant
(or beneficiary) may elect to receive either a lump-sum amount equal to the
value of his or her account, a single life annuity, a single life annuity
over ten years, a joint and survivor annuity or a monthly annuity.
Participants with an account balance of $3,500 or less receive a lump-sum
distribution.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and an allocation of (a) the Company's matching contribution (based on the
participant's contribution) and (b) Plan investment earnings (based on the
participant's account balance).
WITHDRAWALS
Withdrawals may be made for financial hardship or other discretionary
reasons. The Plan Committee approves hardship withdrawals. After a
withdrawal for financial hardship an individual cannot contribute to the
Plan for the next twelve months. Withdrawal of certain after-tax
contributions will result in suspension of the Company contribution for
that year.
6
<PAGE> 9
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Employees entering the Plan may make an election to transfer any vested
savings from a previous employer's qualified retirement savings program
into the Plan.
TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated April 16, 1990 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that
the Plan is designed and is currently being operated in compliance with
the applicable requirements of the IRC.
DISCRIMINATION TESTING
To comply with the discrimination rules of Section 401(k), the Plan will
refund contributions of $90,259 to certain highly compensated employees for
the year ended December 31, 1995.
The above brief description of the Plan is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
B. Summary of Significant Accounting Policies:
------------------------------------------
ADMINISTRATIVE EXPENSES
All fees and administrative costs other than investment-related expenses
are paid by the Company.
INVESTMENT VALUATION
The fair value of investments has been determined by the closing market
prices of the investments on December31, 1995 and 1994.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
7
<PAGE> 10
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Dividends are recorded on the ex-dividend date. Interest is recorded on
the accrual basis of accounting.
BENEFITS PAYABLE
In July of 1993, the American Institute of Certified Public Accountants
issued an audit guide entitled "Audits of Employee Benefit Plans, with
Conforming Changes as of May 1, 1993, (the "Guide")". The provisions of the
Guide are effective for plan years beginning after December 15, 1990. The
Guide prohibits the recognition, as a liability, of amounts allocated to
participants who have withdrawn from the Plan as of year-end, but for which
disbursement of those funds has not been made by year end, in the
statements of net assets available for plan benefits. Disclosure of such
amounts, however, is required. Accordingly, $195,875 and $170,185 of
distributions payable have not been recorded as a liability in the
statement of net assets available for plan benefits at December 31, 1995
and 1994, respectively. This amount has been recorded as distributions
payable in the Plan's Form 5500, in accordance with the Department of
Labor's rules and regulations.
USE OF ESTIMATES
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles, which requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
C. INVESTMENTS:
-----------
Participants in the Plan have five investment options available: the Prime
Money Market Fund, the Limited Term Income Fund, the Fixed Income Fund, the
Growth and Income Equity Fund, and the Filene's Basement Corp. Stock Fund.
PRIME MONEY MARKET FUND
The purpose of this fund is to provide a market-rate income return from a
high quality, highly liquid diversified portfolio of money market
instruments maturing in thirteen months or less. This fund invests in
certificates of deposit, commercial paper and U.S. Treasury bills. There
were 661 participants in the Prime Money Market Fund at December 31, 1995.
LIMITED TERM INCOME FUND
The purpose of this fund is to achieve relatively stable income with
limited risk to investment principal. It invests in U.S. Government,
federal agency and investment-grade corporate obligations. The average
maturity is three years or less. There were 308 participants in the Limited
Term Income Fund at December 31, 1995.
8
<PAGE> 11
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
FIXED INCOME FUND
The purpose of this fund is to maximize total return with a managed
portfolio of bonds. At least 65% of the total value of its assets are
invested in fixed income securities. This includes federal agency, U.S.
Treasury, investment-grade corporate obligations and other bonds. The
average maturity is five years. There were 339 participants in the Fixed
Income Fund at December 31, 1995.
GROWTH AND INCOME EQUITY FUND
The purpose of this fund is to provide long-term capital accumulation
through income reinvestment and principal appreciation at a rate which
exceeds inflation. This fund invests in specific stocks, chosen by the fund
manager, which are believed to represent opportunities for superior growth
and value. There were 461 participants in the Growth and Income Equity Fund
at December 31, 1995.
<TABLE>
FILENE'S BASEMENT CORP. STOCK FUND
This fund invests solely in the common stock of Filene's Basement Corp. An
individual employee may not invest more than 20% of their total investment
in this fund. This fund is subject to a relatively high degree of risk
because it is not a diversified investment and is subject to any potential
volatility in the price of the Company's common stock. There were 147
participants in the Filene's Basement Corp. Stock Fund at December 31,
1995. Investments of the Plan are summarized as follows:
<CAPTION>
1995 1994
----------------------- ---------------------
Fair Value Cost Fair Value Cost
---------- ---- ---------- ----
<S> <C> <C> <C> <C>
Shawmut Prime Money
Market Fund $ 4,477,495 * $ 4,477,495 $4,131,246 * $4,131,246
Shawmut Fixed Income Fund 1,468,472 * 1,465,943 1,378,397 * 1,492,878
Shawmut Limited Term
Income Fund 1,306,148 * 1,340,798 1,262,056 * 1,347,165
Shawmut Growth and
Income Equity Fund 3,155,552 * 2,726,861 2,209,463 * 2,194,425
Filene's Basement Corp.
Stock Fund 65,326 272,327 88,054 253,479
----------- ----------- ---------- ----------
Total $10,472,993 $10,283,424 $9,069,216 $9,419,193
=========== =========== ========== ==========
<FN>
*Denotes investment with fair value in excess of 5% of the Plan's net assets.
</TABLE>
9
<PAGE> 12
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
D. Plan Termination:
----------------
While it is the intention of the Company to continue the Plan indefinitely, the
Company reserves the right to terminate the Plan at any time by vote of its
Board of Directors. In the event of Plan termination, participants will become
fully vested in their accounts including employer contributions.
10
<PAGE> 13
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
<CAPTION>
Description of Investment
including Maturity date,
Rate Number of
Identity of Issue, Borrower, Interest, Collateral, Shares at Current
Lessor, or Similar Party Par or Maturity Value Par Value Cost Value
- ---------------------------- ------------------------- --------- ---- -------
<S> <C> <C> <C> <C>
Shawmut Bank Shares of Prime Money
Market Fund 4,477,495 $ 4,477,495 $ 4,477,495 *
Shawmut Bank Shares of Fixed Income
Fund 135,485 1,465,943 1,468,472 *
Shawmut Bank Shares of Limited Term
Income Fund 131,968 1,340,798 1,306,148 *
Shawmut Bank Shares of Growth and
Income Equity Fund 220,798 2,726,861 3,155,552 *
Shawmut Bank Shares of Filene's
Basement, Corp. Stock Fund 117,738 272,327 65,326
----------- -----------
$10,283,424 $10,472,993
=========== ===========
<FN>
*Denotes investment with fair value in excess of 5% of the Plan's net assets.
</TABLE>
11
<PAGE> 14
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES TRANSACTIONS IN EXCESS OF 5% OF
THE CURRENT VALUE OF PLAN ASSETS
for the year ended December 31, 1995
<CAPTION>
Party Number Net
to the of Purchase Number Sale Gain
Transaction Description of Assets Purchases Price of Sales Price (Loss)
<S> <C> <C> <C> <C> <C> <C>
Shawmut Bank Prime Money Market Fund 76 $8,003,384 72 $7,685,264
Shawmut Bank Fixed Income Fund 8 267,650 6 267,100 $ 9,914
Shawmut Bank Growth and Income Equity Fund 11 704,653 3 210,000 29,341
</TABLE>
12
<PAGE> 15
FILENE'S BASEMENT, INC. THRIFT INCENTIVE PLAN
<TABLE>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES TRANSACTIONS IN EXCESS OF 5% OF
THE CURRENT VALUE OF PLAN ASSETS
for the year ended December 31, 1995
<CAPTION>
Party Number Net
to the of Purchase Number Sale Gain
Transaction Description of Assets Purchases Price of Sales Price (Loss)
<S> <C> <C> <C> <C> <C>
Shawmut Bank Prime Money Market Fund 1 $4,379,745 1 $4,394,068
</TABLE>
13
