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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 (NO FEE REQUIRED)
For the Year Ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
SHOPKO STORES, INC.
700 PILGRIM WAY
GREEN BAY, WISCONSIN 54304
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SHOPKO STORES, INC.
PROFIT SHARING AND SUPER
SAVER PLAN
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1999 AND 44 WEEKS ENDED
DECEMBER 31, 1998, SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 1999 AND INDEPENDENT
AUDITORS' REPORT
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SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
TABLE OF CONTENTS
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<TABLE>
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PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1999 AND 44 WEEKS
ENDED DECEMBER 31, 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO THE DEPARTMENT OF LABOR'S RULES AND
REGULATIONS AS OF DECEMBER 31, 1999:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes 8
Other schedules are omitted due to the absence of conditions under which they
are required.
EXHIBITS -
Exhibit I - Independent Auditors' Consent 9
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INDEPENDENT AUDITORS' REPORT
Retirement Committee
ShopKo Stores, Inc. Profit Sharing and Super Saver Plan
Green Bay, Wisconsin
We have audited the accompanying financial statements of ShopKo Stores, Inc.
Profit Sharing and Super Saver Plan (the "Plan") as of December 31, 1999 and
1998, and for the year ended December 31, 1999 and the 44 weeks ended December
31, 1998, listed in the Table of Contents. 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 auditing standards generally accepted
in the United States of America. 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 the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the year ended December 31, 1999 and the 44 weeks ended December 31, 1998,
in conformity with accounting principles generally accepted in the United States
of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents 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. This schedule is the responsibility of the Plan's management. Such
schedule has been subjected to the auditing procedures applied in our audit of
the basic 1999 financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 15, 2000
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SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS
INVESTMENTS:
Mutual funds $ 244,500,768 $ 201,066,636
Pooled collective fund 43,037,158 33,709,504
Common stock - ShopKo Stores, Inc. 31,884,785 38,203,086
Money market fund 4,207,365 3,293,658
Investment contracts 5,000,000 11,485,280
Participants' loans 11,639,604 11,090,159
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TOTAL INVESTMENTS 340,269,680 298,848,323
RECEIVABLES:
Employer contribution 9,204,276 8,429,691
Accrued interest and dividends 160,606 351,522
CASH 2,359 323
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TOTAL ASSETS 349,636,921 307,629,859
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NET ASSETS AVAILABLE FOR BENEFITS $ 349,636,921 $ 307,629,859
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</TABLE>
See notes to financial statements.
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SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999 AND
44 WEEKS ENDED DECEMBER 31, 1998
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<TABLE>
<CAPTION>
44 WEEKS
YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31,
1999 1998
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 25,827,949 $ 14,725,338
Interest and dividends - net 17,224,146 15,599,847
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43,052,095 30,325,185
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Contributions:
Employer 13,977,109 12,215,714
Participants 13,053,902 10,211,881
Transfers from other plans 929,505 9,201,900
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27,960,516 31,629,495
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Total additions 71,012,611 61,954,680
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 28,917,209 24,456,030
Administrative expenses 88,340 53,882
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Total deductions 29,005,549 24,509,912
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NET INCREASE 42,007,062 37,444,768
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF PERIOD 307,629,859 270,185,091
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $ 349,636,921 $ 307,629,859
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</TABLE>
See notes to financial statements.
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SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
AND 44 WEEKS ENDED DECEMBER 31, 1998
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1. DESCRIPTION OF PLAN
The following description of the ShopKo Stores, Inc. Profit Sharing and
Super Saver Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
Under provisions of the Plan, all employees of ShopKo Stores, Inc. (the
"Company"), the Plan sponsor, who are full-time (work 1,000 compensated
hours per plan year), and are 20 years of age or older are eligible to
participate in the Plan after completing one or more years of eligible
service as defined. Company profit sharing contributions to the Plan are
determined each year at the discretion of the Company's Board of
Directors. The contributions are limited to the amount deductible for
federal income tax purposes. Company contributions are allocated among the
participants based on the ratio of each participant's compensation, as
defined, to total compensation of all participants for the year, in
accordance with Section 415(d) of the Internal Revenue Code. Allocations
are made only to participants who: 1) have attained age 20, are employed
on the last day of the Plan year and had 1,000 compensated hours in the
Plan year or 2) terminated their employment by reason of death,
disability, normal retirement, or early retirement, which requires ten
years of Company service and attainment of at least age 55. Separate
accounts are maintained for each participant.
Participant profit sharing accounts are fully vested after the third year
of service with no vesting prior to that time. In the event of normal
retirement at age 65 or thereafter, permanent disability, or death,
participants' accounts become 100% vested. The nonvested amounts in
terminated participants' accounts are forfeited and allocated in the same
manner as the Company's discretionary contribution.
The Company changed the plan year-end from the last Saturday in February
to a calendar year-end; effective for the plan year ended December 31,
1998. Consequently, the 1998 plan year statement of net assets and
statement of changes in net assets are presented for the 44 week period
ended December 31, 1998. Further, the compensated hours eligibility
requirement was reduced to 833 hours for the 1998 plan year.
On July 9, 1998; the Company transferred assets from the Penn Daniels
401(k) plan into the Plan. The related Penn Daniels assets transferred
into the plan consisted of investments and loans of approximately
$8,770,000. The effective date of the transfer was March 1, 1998.
Subsequent to March 1, 1998, all Penn Daniels participants are subject to
the Plan document and applicable Plan amendments.
A 401(k) plan, referred to as the Super Saver Agreement, is part of the
Plan. This agreement allows for employee contributions under Section
401(k) of the Internal Revenue Code under which participants may
contribute up to 15% (limited to 6% for highly-compensated participants)
of their recognized compensation, as defined. The Plan provides for an
employer matching contribution, which is allocated in accordance with the
participants' elections. The matching contribution will equal 50% of the
amount of the first 6% of compensation contributed by participating
employees. Participant contributions and
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employer matching contributions are 100% vested at all times. Participants
currently employed can only withdraw their 401(k) contributions in
financial hardship situations. Participants may borrow from their Super
Saver accounts subject to certain limitations.
Participants are permitted to take out loans against their Super Saver
Account and Rollover Account. Loans are subject to the approval of the
Retirement Committee. Loans may not exceed the lessor of $50,000 or
one-half of the participant's vested total account balance. Loans may not
be less than $1,000. The duration of each loan is determined by the
participant, up to a maximum of five years. Loan payments are made
together with interest, through payroll deductions. Loans bear interest
equal to the prime rate plus one percent.
Vested benefits may be withdrawn in a lump sum or retained in the account,
at the option of the participant, upon termination or retirement.
Participants may elect to have their account balances invested in one or
more of the following funds:
AXP Mutual Fund - Is a growth and income fund which divides its
investments between common stocks, preferred stocks and bonds. The
prospectus of this fund states that the goal of this fund is to
provide a balance of growth of capital and current income.
AXP New Dimensions Fund - Invests primarily in common stocks of
companies showing potential for significant growth and operating in
areas where economic or technological changes are occurring. The
prospectus of this fund states that income is not an investment
objective. Instead, this fund seeks long-term growth of capital.
AXP Blue Chip Advantage Fund - Invests in selected stocks from a
major market index. Securities purchased are those recommended as
the best from each industry represented on the index. The prospectus
of this fund states that it seeks long-term growth as well as
dividend income.
Templeton Foreign Fund - Invests in stocks and debt obligations of
companies and governments outside the United States. The prospectus
of this fund states that the goal of this fund is to provide
long-term capital growth through a flexible policy of investing in
stocks and debt obligations of international companies.
Conservative Fund - Invests in individual common stocks, investment
contracts and pooled collective funds which are part of the American
Express Trust Collective Investment Funds available only to employee
benefit trusts. The Collective Investment Funds invest primarily in
bonds, investment contracts and money market investments. Each
participating trust investing in the Funds is credited with units of
the fund.
AIM Constellation Fund - Invests primarily in the common stocks of
small to medium size companies with an emphasis on emerging growth
companies. The prospectus of this fund states that income is not an
investment objective. Instead, the objective is to seek capital
appreciation.
ShopKo Stock Fund - Invests primarily in the common stock of ShopKo
Stores, Inc. and pooled collective funds which are part of the
American Express Trust Collective Investment Funds available only to
employee benefits trusts. The Collective Investment Funds invest
primarily in bonds and money market investments. Each participating
trust investing in the funds is credited with units in the Fund.
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Benefits payable which were authorized but not yet paid as of December 31,
1999 and December 31, 1998 aggregated $192,068 and $0, respectively, and
are included in net assets available for benefits for reporting purposes.
Administrative expenses are paid by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are presented on the accrual basis of
accounting. The current value of investments is determined by the Trustee
based on the closing market prices, if available, at fiscal year-end. For
those investments that have no quoted market price, current value
represents estimated fair value, as determined by the Trustee. Investment
contracts are valued at contract value, which approximates fair value.
Investments in pooled collective funds that in turn hold investment
contracts are valued at the contract value of the underlying investment
contracts, which approximate fair value. Contract value represents
contributions made under the contract, plus interest at the contract rate,
less funds used to pay administrative expenses.
The financial statements reflect the adoption of Statement of Position
99-3, "Accounting and Reporting of Certain Defined Contribution Benefit
Plan Disclosures and Other Disclosure Matters." As a result, the 1998
financial statements have been reclassified to eliminate the by-fund
disclosures previously required and to conform certain other information
to the 1999 presentation.
3. PLAN TERMINATION
Although the Company has not expressed an intent to discontinue the Plan,
it may do so at any time subject to provisions set forth in the Employee
Retirement Income Security Act of 1974. In the event of termination of the
Plan, all benefits would fully vest for participants, and the assets of
the Plan would be distributed to the participants based on each individual
participant's interest in the Plan.
4. TRUSTEE AND ADMINISTRATION OF THE PLAN
Effective March 1, 1996, the Retirement Committee appointed as trustee and
recordkeeper, American Express Trust Company, a wholly-owned subsidiary of
American Express Financial Corporation, which is a wholly-owned subsidiary
of American Express Company. Certain Plan investments are managed by
American Express, and therefore, these transactions qualify as
party-in-interest. The trust agreement stipulates that the trustee may
resign at any time by giving 90 days written notice to the Retirement
Committee. The Committee may remove the trustee at any time by giving 30
days written notice of such action to the trustee.
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5. INVESTMENTS
The market value of investments that individually exceeds five percent or
more of the Plan's assets at December 31, 1999 and December 31, 1998 are
as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
<S> <C> <C>
AXP New Dimensions Fund $ 124,577,225 $ 100,453,797
AXP Mutual Fund 48,362,223 48,751,479
American Express Trust Stable Capital Fund I 43,037,158 33,709,504
Common Stock - ShopKo Stores, Inc. 31,884,785 38,203,086
AXP Blue Chip Advantage Fund 27,794,659 20,893,727
Templeton Foreign Fund 27,660,431 21,267,512
</TABLE>
During the years ended December 31, 1999 and 1998, net appreciation
(depreciation) of the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) is as
follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
AXP New Dimensions Fund $ 23,489,529 $ 10,543,571
Templeton Foreign Fund 6,871,744 (5,236,555)
AIM Constellation Fund 3,649,164 659,371
Conservative Fund 2,860,329 2,240,508
AXP Blue Chip Advantage Fund 2,099,770 2,044,540
AXP Mutual Fund (967,923) (4,244,298)
Common Stock - ShopKo Stores, Inc. (12,174,664) 8,718,201
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$ 25,827,949 $ 14,725,338
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</TABLE>
6. TAX STATUS
The Plan obtained its latest determination letter on April 16, 1996, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended and restated since applying for the
determination letter. However, the Retirement Committee believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
* * * * * *
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SUPPLEMENTAL SCHEDULE
FURNISHED PURSUANT TO THE
DEPARTMENT OF LABOR'S RULES AND REGULATIONS
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SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF
ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
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<TABLE>
<CAPTION>
SHARES OR CURRENT
DESCRIPTION FACE VALUE VALUE
<S> <C> <C>
COMMON STOCK - ShopKo Stores, Inc.* 1,386,295 $ 31,884,785
MUTUAL FUNDS:
AIM Constellation Fund 397,587 16,106,230
AXP Blue Chip Advantage Fund* 2,236,095 27,794,659
AXP Mutual Fund* 3,811,050 48,362,223
AXP New Dimensions Fund* 3,478,839 124,577,225
Templeton Foreign Fund 2,465,279 27,660,431
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Total mutual funds 244,500,768
POOLED COLLECTIVE FUND -
American Express Trust Stable Capital Fund I* 2,840,924 43,037,158
MONEY MARKET FUND -
American Express Trust Money Market Fund* 4,207,365 4,207,365
INVESTMENT CONTRACTS:
AIG Life Insurance Co.
#GIC-917, 8/15/00, 6.25% $ 1,000,000 1,000,000
John Hancock Mutual Life
#GAC-8332, 12/15/00, 6.21% $ 2,000,000 2,000,000
Safeco Life Insurance
#LA-1053359, 2/26/01, 5.69% $ 1,000,000 1,000,000
United of Omaha Life Ins. Co.
#SDGA-11024, 5/14/00, 7.17% $ 1,000,000 1,000,000
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Total investment contracts 5,000,000
PARTICIPANTS' LOANS - Interest
at prime plus 1% $ 11,639,604 11,639,604
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TOTAL INVESTMENTS $340,269,680
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</TABLE>
*Party-in-interest
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EXHIBIT I
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-58584 and 333-53577 on Form S-8 of ShopKo Stores, Inc. of our report dated
June 15, 2000, appearing in this Annual Report on Form 11-K of ShopKo Stores,
Inc. Profit Sharing and Super Saver Plan for the year ended December 31, 1999.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 28, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the ShopKo Stores, Inc. Profit Sharing and Super Saver Plan Retirement
Committee, have duly caused this annual report to be signed by the undersigned
there upon duly authorized.
SHOPKO STORES, INC. PROFIT SHARING AND SUPER SAVER PLAN
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(Name of Plan)
Date: June 28, 2000 By: /s/Paul H. Freischlag, Jr.
Paul H. Freischlag, Jr.
ShopKo Stores, Inc. Profit Sharing and Super
Saver Plan Retirement Committee Member
