|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: ASSOCIATED ESTATES REALTY CORP, SC 13D, 1998-07-08 |
Next: MMA PRAXIS MUTUAL FUNDS, DEFS14A, 1998-07-08 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K/A
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Amendment No.1
For the Fiscal Year Ended December 31, 1997
HORIZON GROUP, INC. PROFIT SHARING / 401(k) PLAN
------------------------------------------------
(Full Title of Plan)
Commission File Number 33-89152
HORIZON GROUP, INC.
5000 Hakes Drive
Norton Shores, MI 49441
-----------------------
Name of Issuer of the
Securities Held Pursuant to the Plan and the
Address of the Principal Executive Office
<PAGE> 2
Index to Form 11-K/A
Required information: Page No.
- --------------------- --------
1. Not applicable
2. Not applicable
3. Not applicable
4. Financial information 2 - 17
Signatures 18
Exhibit Index 19
Consent of Independent Auditors Exhibit 23
1
<PAGE> 3
Report on Financial Statements
Horizon Group, Inc. Profit Sharing/401(k) Plan
December 31, 1997 and 1996
2
<PAGE> 4
Independent Auditors' Report
To the Participants and Administrator of
Horizon Group, Inc. Profit Sharing/401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the Horizon Group, Inc. Profit Sharing/401(k) Plan as of December 31, 1997
and 1996 and the related statements of changes in net assets available for
benefits for the years then ended. 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 audit.
We conducted our audit 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above represent fairly, in
all material respects, the net assets available for benefits of the Horizon
Group, Inc. Profit Sharing/401(k) Plan as of December 31, 1997 and 1996 and the
changes in its net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions 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.
CONN, GENEVA & ROBINSON
Muskegon, Michigan
July 1, 1998
3
<PAGE> 5
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
December 31,
1997 1996
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market value (cost of
$3,078,403 in 1997 and $1,982,804 in 1996) $3,107,166 $2,219,475
Cash and equivalents 69,401 256,783
Company contribution receivable -0- 82,994
Participant contribution receivable -0- 45,210
Accrued interest and dividends receivable -0- 2,291
Loans to participants (9.25% to 10%) 19,698 25,661
---------- ----------
Net assets available for benefits $3,196,265 $2,632,414
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 6
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADDITIONS
Contributions:
Company $ 214,311 $ 437,600 $ 91,524
Participant 565,872 689,491 235,728
Rollover 18,353 632,049 201,135
------------ ----------- -----------
Total contributions 798,536 1,759,140 528,387
Investment income:
Interest 21,712 3,992 6,169
Dividends 80,672 67,039 16,753
Net appreciation in
market value of investments 303,357 263,429 75,188
------------ ----------- -----------
Net investment income 405,741 334,460 98,110
------------ ----------- -----------
Total additions 1,204,277 2,093,600 626,497
------------ ----------- -----------
DEDUCTIONS
Benefits to participants (635,822) (546,387) (3,736)
Loan transactions (4,565) - 112
Administrative Expenses (39) - -
------------ ----------- -----------
Total deductions (640,426) (546,387) (3,624)
------------ ----------- -----------
NET INCREASE 563,851 1,547,213 622,873
------------ ----------- -----------
Net assets available for benefits
Beginning of year 2,632,414 1,085,201 462,328
------------ ----------- -----------
End of year $ 3,196,265 $ 2,632,414 $ 1,085,201
============ =========== ===========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 7
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Net Assets Available for Benefits
December 31, 1997
<TABLE>
<CAPTION>
Pegasus Stable FPA Strong Strong
Money Pegasus Asset Para- FPA Oppor- Int'l. Horizon Loan Reserve Sub-
Market Bond Income mount Capital tunity Stock Stock Account Account Total
------- ---- ------ ----- ------- ------- ----- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair
value (cost of
$3,078,403 in 1997 and
$1,982,804 in 1996) $ - $ - $ - $121,499 $359,715 $ - $ - $51,557 $ - $ - $532,771
Cash and equivalents - - - - - - - - - - -
Company contribution
receivable - - - - - - - - - - -
Participant contribution
receivable - - - - - - - - - - -
Accrued interest and
dividends receivable - - - - - - - - - - -
Loans to participants - - - - - - - - 19,698 - 19,698
(9.25% to 10%) ------ ------- ------ --------- -------- ------- ------- ------- ------- ----- --------
Net assets available
for benefits $ - $ - $ - $121,499 $ 359,715 $ - $ - $51,557 $19,698 $ - $552,469
==== ===== ===== ======== ========= ==== ===== ======= ======= ===== ========
</TABLE>
6
<PAGE> 8
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Net Assets Available for Benefits - by Fund
December 31, 1997
<TABLE>
<CAPTION>
Guaranteed Bond Stock Large Medium Small
Interest Money & Index Company Company Company Int'l Profit
Account Market Mortgage 500 Growth Blend Blend Stock Sharing Total
------- ------ -------- --- ------ ----- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair
value (cost of
$3,078,403 in 1997 and
$1,982,804 in 1996) $1,174,608 $ - $129,841 $327,661 $272,528 $1,408 $234,099 $182,471 $251,779 $3,107,166
Cash and equivalents 2,981 - - - - - 66,420 69,401
Company contribution
receivable - - - - - - - - - -
Participant contribution
receivable - - - - - - - - - -
Accrued interest and
dividends receivable - - - - - - - - - -
Loans to participants - - - - - - - - - 19,698
(9.25% to 10%)
---------- ------ -------- -------- -------- ------ -------- -------- -------- ----------
Net assets available
for benefits $1,174,608 $2,981 $129,841 $327,661 $272,528 $1,408 $234,099 $182,471 $318,199 $3,196,265
========== ====== ======== ======== ======== ====== ======== ======== ======== ==========
</TABLE>
7
<PAGE> 9
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Net Assets Available for Benefits - by Fund
December 31, 1996
<TABLE>
<CAPTION>
Pegasus Stable FPA Strong
Money Pegasus Asset Para- FPA Oppor-
Market Bond Income mount Capital tunity
------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value
(cost of $1,982,804 in 1996
and $779,779 in 1995) $ -- $ 76,889 $ 171,843 $ 523,835 $ 715,339 $ 357,746
Cash and equivalents 119,266 -- -- -- -- --
Company contribution
receivable 1,035 1,197 1,300 3,205 5,741 3,067
Participant contribution
receivable 1,444 2,813 3,391 7,250 15,413 7,240
Accrued interest and
dividends receivable 19 -- -- -- -- --
Loans to participants (9.25%
to 10%) -- -- -- -- -- --
-------- ---------- ---------- ---------- ---------- -----------
Net assets available for benefits $121,764 $ 80,899 $ 176,534 $ 534,290 $ 736,493 $ 368,053
======== ========== ========== ========== ========== ==========
<CAPTION>
Strong
Int'l. Horizon Loan Profit
Stock Stock Account Sharing Total
---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value
(cost of $1,982,804 in 1996
and $779,779 in 1995) $ 137,887 $ 85,204 $ -- $ 150,732 $2,219,475
--
Cash and equivalents -- 20 -- 137,497 256,783
Company contribution
receivable 1,637 812 -- 65,000 82,994
Participant contribution
receivable 3,816 3,843 -- -- 45,210
Accrued interest and
dividends receivable -- 2,272 -- -- 2,291
Loans to participants (9.25%
to 10%) -- -- 25,661 -- 25,661
---------- -------- ---------- ---------- ----------
Net assets available for benefits $ 143,340 $ 92,151 $ 25,661 $ 353,229 $2,632,414
========== ======== ========== ========== ==========
</TABLE>
8
<PAGE> 10
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Changes in Net Assets Available for Benefits - by Fund
For Year Ended December 31, 1997
<TABLE>
<CAPTION>
Pegasus Stable FPA Strong
Money Pegasus Asset Para- FPA Oppor-
Market Bond Income mount Capital tunity
---------- -------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets
Contributions
Company contributions $ 6,637 $ 2,263 $ 3,529 $ 12,792 $ 24,225 $ 6,021
Participant contributions 6,801 13,533 19,005 59,417 103,317 40,459
Rollover 6,953 3,703 3,703 - 1,985 -
--------- -------- --------- --------- -------- ---------
Total contributions 20,391 19,499 26,237 72,209 129,527 46,480
Investment income
Interest - - - - - -
Dividends 4,580 4,104 - 15,367 42,419 885
Net appreciation
(depreciation) in market (17,868) 2,133 13,792 16,466 102,410 127,086
value of investments --------- -------- --------- --------- -------- ---------
Total investment income (13,288) 6,237 13,792 31,833 144,829 127,971
--------- -------- --------- --------- -------- ---------
Total additions 7,103 25,736 40,029 104,042 274,356 174,451
Deductions
Benefits paid to participants (20,189) (10,409) (18,156) (66,095) (111,969) (83,178)
Loan transactions - - - - - -
Administrative expenses - - - (4) (4) -
--------- -------- --------- --------- -------- ---------
Total deductions (20,189) (10,409) (18,156) (66,099) (111,973) (83,178)
Net increases prior to
interfund transfers (13,086) 15,327 21,873 37,943 162,383 91,273
Interfund transfers (108,678) (96,226) (198,407) (450,734) (539,161) (459,326)
--------- -------- --------- --------- -------- ---------
Net increase (decrease) (121,764) (80,899) (176,534) (412,791) (376,778) (368,053)
Net assets available for benefits
Beginning of year 121,764 80,899 176,534 534,290 736,493 368,053
--------- -------- --------- --------- --------- ---------
End of year $ - $ - $ - $ 121,499 $359,715 $ -
========= ======== ========= ========= ======== =========
<CAPTION>
Strong
Int'l. Horizon Loan Reserve Sub-
Stock Stock Account Account Total
---------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Contributions
Company contributions $ 3,478 $ 9,856 $ (178) $ - $ 68,623
Participant contributions 19,672 30,955 803 55,524 349,486
Rollover - - (533) - 15,811
---------- -------- --------- --------- ----------
Total contributions 23,150 40,811 92 55,524 433,920
Investment income
Interest - - 185 - 185
Dividends 2,682 4,738 - 527 75,302
Net appreciation
(depreciation) in market 7,688 (10,721) - - 240,986
value of investments ---------- -------- --------- --------- ----------
Total investment income 10,370 (5,983) 185 527 316,473
---------- -------- --------- --------- ----------
Total additions 33,520 34,828 277 56,051 750,393
Deductions
Benefits paid to participants (33,421) (8,579) - - (351,996)
Loan transactions - - (4,565) - (4,565)
Administrative expenses - - - - (8)
---------- -------- --------- --------- ----------
Total deductions (33,421) (8,579) (4,565) - (356,569)
Net increases prior to 99 26,249 (4,288) 56,051 393,824
interfund transfers
Interfund transfers (143,439) (66,843) (1,675) (56,051) (2,120,540)
---------- -------- --------- --------- ----------
Net increase (decrease) (143,340) (40,594) (5,963) - (1,726,716)
Net assets available for benefits
Beginning of year 143,340 92,151 25,661 - 2,279,185
---------- -------- --------- --------- ----------
End of year $ - $ 51,557 $ 19,698 $ - $ 552,469
========== ========= ========= ========= ==========
</TABLE>
9
<PAGE> 11
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Changes in Net Assets Available for Benefits - by Fund
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Guaranteed Stock Large Medium
Interest Money Bond Index Company Company
Account Market Mortgage 500 Growth Blend
------- ------ -------- --- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Additions
Contributions:
Company contributions $ 8,316 $ 352 $ 7,758 $ 18,297 $ 14,953 $ 5
Participant contributions 23,035 944 20,338 51,281 40,849 9
Rollover 1,517 - - 53 - -
----------- ----------- ----------- ----------- ----------- ---------
Total contributions 32,868 1,296 28,096 69,631 55,802 14
Investment income:
Interest 19,856 43 - - - -
Dividends - - - - - -
Net appreciation
(depreciation) in
market value of investments 27,616 - 4,278 14,138 19,461 (17)
----------- ----------- ----------- ----------- ----------- ---------
Total investment income 47,472 43 4,278 14,138 19,461 (17)
----------- ----------- ----------- ----------- ----------- ---------
Total additions 80,340 1,339 32,374 83,769 75,263 (3)
Deductions
Benefits paid to participants (164,350) - (782) (1,454) (3,011) (2,192)
Loan transactions - - - - - -
Administrative Expenses - - (3) (5) (8) -
----------- ----------- ----------- ----------- ----------- ---------
Total deductions (164,350) - (785) (1,459) (3,019) -
Net increases prior to
interfund transfers (84,010) 1,339 31,589 82,310 72,244 (3)
Interfund transfers 1,258,618 1,642 98,252 245,354 200,284 1,411
----------- ----------- ----------- ----------- ----------- ---------
Net increase (decrease) 1,174,608 2,981 129,841 327,661 272,528 1,408
Net assets available for
benefits:
Beginning of year - - - - - -
----------- ----------- ----------- ----------- ----------- ---------
End of year $ 1,174,608 $ 2,981 $ 129,841 $ 327,661 $ 272,528 $ 1,408
=========== =========== =========== =========== =========== =========
<CAPTION>
Small
Company Int'l Profit
Blend Stock Sharing Total
----- ----- ------- -----
<S> <C> <C> <C> <C>
Additions
Contributions:
Company contributions $ 18,164 $ 12,843 $ 65,000 $ 214,311
Participant contributions 43,620 36,310 - 565,872
Rollover 865 107 - 18,353
----------- ----------- ----------- -----------
Total contributions 62,649 49,260 65,000 798,536
Investment income:
Interest - - 1,628 21,712
Dividends - - 5,370 80,672
Net appreciation
(depreciation) in
market value of investments (2,569) (3,718) 3,182 303,357
----------- ----------- ----------- -----------
Total investment income (2,569) (3,718) 10,180 405,741
----------- ----------- ----------- -----------
Total additions 60,080 45,542 75,180 1,204,277
Deductions
Benefits paid to participants (2,192) (1,832) (110,205) (635,822)
Loan transactions - - - (4,565)
Administrative Expenses (4) (7) (4) (39)
----------- ----------- ----------- -----------
Total deductions (2,196) (1,839) (110,209) (640,426)
Net increases prior to
interfund transfers 57,884 43,703 (35,029) 563,851
Interfund transfers 176,213 138,768 - -
----------- ----------- ----------- -----------
Net increase (decrease) 234,098 182,470 (35,030) 563,852
Net assets available for
benefits:
Beginning of year - - 353,229 2,632,414
----------- ----------- ----------- -----------
End of year $ 234,098 $ 182,470 $ 318,199 $ 3,196,264
=========== =========== =========== ===========
</TABLE>
10
<PAGE> 12
Horizon Group, Inc. Profit Sharing/401(k) Plan
Statement of Changes in Net Assets Available for Benefits - by Fund
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Pegasus Stable FPA Strong
Money Pegasus Asset Para- FPA Oppor-
Market Bond Income mount Capital tunity
------ ---- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Additions
Contributions:
Company contributions $ 15,214 $ 18,793 $ 22,636 $ 46,435 $ 87,096 $ 64,637
Participant contributions 34,014 36,626 53,414 103,981 221,142 156,309
Rollover 603,681 -- 4,771 4,196 14,388 2,607
---------- ---------- ---------- ---------- ---------- ----------
Total contributions 652,909 55,419 80,821 154,612 322,626 223,553
Investment income:
Interest -- -- -- -- -- --
Dividends 4,318 5,483 747 6,331 26,503 2,419
Net appreciation
(depreciation) in
market value of
investments -- (150) 8,232 98,001 147,789 16,129
---------- ---------- ---------- ---------- ---------- ----------
Total investment income 4,318 5,333 8,979 104,332 174,292 18,548
---------- ---------- ---------- ---------- ---------- ----------
Total additions 657,227 60,752 89,800 258,944 496,918 242,101
Deductions
Benefits paid to participants (105,036) (30,276) (15,913) (52,066) (175,520) (111,822)
---------- ---------- ---------- ---------- ---------- ----------
Net increases prior to
interfund transfers 552,191 30,476 73,887 206,878 321,398 130,279
Interfund transfers (509,194) 27,212 (1,715) 14,811 258,865 128,283
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) 42,997 57,688 72,172 221,689 580,263 258,562
Net assets available for benefits:
Beginning of year 78,767 23,211 104,362 312,601 156,230 109,491
---------- ---------- ---------- ---------- ---------- ----------
End of year $ 121,764 $ 80,899 $ 176,534 $ 534,290 $ 736,493 $ 368,053
========== ========== ========== ========== ========== ==========
<CAPTION>
Strong
Int'l. Horizon Loan Profit
Stock Stock Account Sharing Total
----- ----- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Additions
Contributions:
Company contributions $ 26,833 $ 25,256 $ -- $ 130,700 $ 437,600
Participant contributions 59,633 24,372 -- -- 689,491
Rollover 1,326 1,080 -- -- 632,049
---------- ---------- ---------- ---------- ----------
Total contributions 87,792 50,708 -- 130,700 1,759,140
Investment income:
Interest -- -- 60 3,932 3,992
Dividends 1,249 9,215 -- 10,774 67,039
Net appreciation
(depreciation) in
market value of
investments (4,913) (7,457) -- 5,798 263,429
---------- ---------- ---------- ---------- ----------
Total investment income (3,664) 1,758 60 20,504 334,460
---------- ---------- ---------- ---------- ----------
Total additions 84,128 52,466 60 151,204 2,093,600
Deductions
Benefits paid to participants (30,354) (10,375) -- (15,025) (546,387)
---------- ---------- ---------- ---------- ----------
Net increases prior to
interfund transfers 53,774 42,091 60 136,179 1,547,213
Interfund transfers 43,045 14,999 23,694 -- --
---------- ---------- ---------- ---------- ----------
Net increase (decrease) 96,819 57,090 23,754 136,179 1,547,213
Net assets available for benefits:
Beginning of year 46,521 35,061 1,907 217,050 1,085,201
---------- ---------- ---------- ---------- ----------
End of year $ 143,340 $ 92,151 $ 25,661 $ 353,229 $2,632,414
========== ========== ========== ========== ==========
</TABLE>
11
<PAGE> 13
Horizon Group, Inc. Profit Sharing/401(k) Plan
Notes to Financial Statements
Note 1: Summary of Accounting Policies
Basis of Accounting
The accounts of the Horizon Group, Inc. Profit Sharing/401(k) Plan (the "Plan")
are maintained on the accrual basis of accounting. Expenses of administration
are paid by the Plan and the Plan sponsor.
Valuation of Investments
Investments are recorded at market value based on closing prices or last
reported bid prices. Purchases and sales of investments are recorded on a
trade-date basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date.
The following investments exceed five percent of the assets available for
benefits at December 31, 1997:
Note: On the 401(k) plan financial statements, Profit Sharing is presented as a
separate fund, although it includes investments in several of The Principal
Financial Group's funds. Profit sharing investments are included in the figures
below for investments exceeding five percent of the assets.
<TABLE>
<CAPTION>
Number Market
Issuer of Shares Value Cost
------ --------- ----- ----
<S> <C> <C> <C>
Guaranteed Interest 1,305,097 1,305,097 1,305,097
Stock Index 500 10,529 351,513 337,370
Large Company Growth 15,329 289,442 270,362
FPA Capital Fund 10,804 392,054 376,161
</TABLE>
The following investments exceed five percent of the assets available for
benefits at December 31, 1996
<TABLE>
<CAPTION>
Number Market
Issuer of Shares Value Cost
------ --------- ----- ----
<S> <C> <C> <C>
Paine Webber Money Market Fund 137,497 $137,497 $137,497
Stable Asset Fund 809 171,843 161,039
FPA Paramount Fund 29,713 523,835 432,169
FPA Capital Fund 21,033 715,339 595,590
Strong Opportunity Fund 10,146 357,746 350,757
Strong International Fund 10,422 137,887 145,743
</TABLE>
12
<PAGE> 14
Horizon Group, Inc. Profit Sharing/401(k) Plan
Notes to Financial Statements - Continued
Note 2: Description of the Plan
The following description of the Horizon Group, Inc. (the "Company") Profit
Sharing/401(k) Official Plan (the "Plan") provides only general information.
Participants should refer to the Official Plan document for a more complete
description of the Plan's provisions.
General. The Plan is a defined contribution plan covering all employees of
the Company who have six months of service and are age twenty-one or older. It
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions. Each year, amounts may be contributed by the Company at the
option of the Company's board of directors. Participants may contribute up to
15% of their annual wages. Contributions are subject to certain limitations.
Participant Accounts. Each participant's account is credited with the
participant's contribution and an allocation of (a) the Company's matching
contribution and any discretionary contribution, (b) Plan earnings, and
(c) forfeitures of terminated participants' nonvested accounts, and charged
with an allocation of administrative expenses. Allocations of Company matching
contributions are based on participants 401(K) contributions, and allocations
of Company discretionary contributions and forfeitures. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting. Participants are immediately vested in their 401(K) contributions
plus actual earnings thereon. Vesting in the Company contributions portion of
their accounts plus earnings thereon is based upon years of continuous service.
A participant is 20% vested after one year of credited service, 40% after two
years, 60% after three years, 80% after four years, and 100% after five years.
Payment of Benefits. Upon termination of employment, a participant may elect
to receive an amount equal to the value of the participant's vested interest
in his or her account in either a lump-sum amount, annual installments, life
or joint and survivor annuities.
Note 3: Plan Termination
The Company has the right under the Plan to terminate the Plan subject
to provisions set forth in ERISA. In the event the Plan terminates, all
participants will be 100% vested in their accounts and the net assets of the
Plan will be distributed to participants as prescribed by ERISA and its
related regulations.
13
<PAGE> 15
Horizon Group, Inc. Profit Sharing/401(k) Plan
Notes to Financial Statements - Continued
Note 4: Income Tax Status
The Plan administrator has received a favorable letter from the Internal Revenue
Service regarding the Plan's tax exempt qualification under applicable income
tax regulations
Note 5: Service Provider and Trustee Information
Effective July 1, 1997, The Principal Financial Group assumed the
responsibilities of trustee, recordkeeper and custodian of assets from NBD Bank,
N.A.
Note 6: Plan Amendments
Effective January 1, 1996, the Plan was amended to provide for the merger of the
McG 401(k) Plan into the Plan.
Note 7: Merger
On June 15, 1998, the Company completed a merger with Prime Retail, Inc.
("Prime"). As part of this merger, Prime assumed sponsorship of the Plan, and
the option to purchase Company stock was discontinued.
14
<PAGE> 16
Supplemental Information
15
<PAGE> 17
Schedule 1
Horizon Group, Inc. Profit Sharing/401(k) Plan
Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
Identity of Issue, Borrower,
Market
Lessor or Similar Party Description of Investment Cost Value
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund 1,976 Shares $ 69,147 $ 69,401
Guaranteed Interest 1,305,097 Shares 1,305,097 1,305,097
Bond and Mortgage Fund 303 Shares 134,621 138,701
Stock Index 500 10,529 Shares 337,370 351,513
Large Company Growth 15,329 Shares 270,362 289,442
Medium Company Growth 54 Shares 1,672 1,658
Small Company Growth 6,781 Shares 252,081 248,491
International Stock 6,358 Shares 197,865 193,439
FPA Capital 10,803 Shares 376,161 392,054
FPA Paramount 9,329 Shares 138,848 132,547
Horizon Group Inc., Stock 4,597 Shares of common stock 64,326 54,222
---------- ---------
$3,147,550 $3,176,565
============================
</TABLE>
16
<PAGE> 18
Schedule 2
Horizon Group, Inc. Profit Sharing/401(k) Plan
Schedule of Reportable (5%) Transactions
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Identity of Issuer Description of Asset Number of Purchase Price Number Selling Cost Net
- ------------------ -------------------- --------- -------------- ------ ------- ---- ---
Purchases of Sales Price Financial
--------- -------- ----- ---------
Gain or (Loss)
-----
<S><C>
Category (i) - A single transaction in excess of 5% of Plan assets
Pegasus Bond Fund Bond Fund 0 $ - 1 $ 189,764 $ 171,426 $ 18,338
Strong Opportunity Fund Mutual Fund 0 - 1 386,299 328,473 57,826
Strong International Fund Mutual Fund 0 - 1 160,157 162,331 (2,174)
Category (iii) - A series of transactions in excess of 5% of Plan assets
Guaranteed Interest Money Market 43 1,613,071 42 332,462 332,462 -
Stock Index 500 Mutual Fund 41 341,157 14 3,848 3,787 61
Large Company Growth Mutual Fund 40 274,821 14 4,508 4,459 49
FPA Capital Mutual Fund 41 1,035,037 9 708,272 658,876 49,396
FPA Paramount Mutual Fund 37 660,488 8 543,351 521,640 21,711
Stable Asset Income Mutual Fund 4 192,910 8 197,059 192,906 4,153
Strong Opportunity Mutual Fund 1 356,526 2 386,293 356,520 29,773
Strong International Fund Mutual Fund 1 166,855 2 160,153 166,851 (6,698)
Paine Webber Investment Mutual Fund 1 278,885 1 309,033 278,881 30,152
- ---------------------------------------------------------------------------------------------------------------------------------
$4,919,750 $3,381,199 $3,178,612 $202,587
=================================================================================================================================
</TABLE>
There were no category (ii) or (iv) reportable transactions during 1997.
17
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
HORIZON GROUP, INC.
Date: July 1, 1998 /s/ Robert P. Mulreaney
-------------------- --------------------------
Robert P. Mulreaney
Executive Vice President,
Chief Financial Officer
and Treasurer
Prime Retail, Inc.
18
<PAGE> 20
Exhibit Index
Page No.
Exhibit 23 - Consent of Independent Auditors 20
19
<PAGE> 1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-89152) pertaining to the Profit Sharing/401(k) Plan of our report
dated July 1, 1998, with respect to the financial statements and schedules
included in the Annual Report Form 11-K/A of Horizon Group, Inc. Profit
Sharing/401(k) Plan for the year ended December 31, 1997.
CONN, GENEVA & ROBINSON
Muskegon, Michigan
July 1, 1998
20
|
|