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Form 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Annual Report Pursuant to Section 15(d) of
The Securities Exchange Act of 1934 (Fee Required)
X For the fiscal year ended September 30, 1996
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or
Transition report Pursuant to Section 15(d) of
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The Securities Exchange Act of 1934 (No Fee Required)
Commission File No. 0-3747
A. Full title of plan and address of the Plan, if different from that of the
issuer named below:
THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
THE CATO CORPORATION
Human Resources Department
8100 Denmark Road
Charlotte, NC 28273
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THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
FORM 11-K
September 30, 1996
Table of Contents
Page
No.
Part I - Exhibit Index and Related Exhibits .................. 2
Part II - Financial Information
Independent Auditors' Report................................ 3
Statements of Net Assets.................................... 4
Statements of Changes in Net Assets ........................ 5
Notes to Financial Statements............................. 6-7
Other Information .......................................... 8
Independent Auditors' Consent............................... 9
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THE CATO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
INDEX
Form 11-K for the Years Ended
September 30, 1996 and September 30, 1995
Exhibit Description Page
No. Of Exhibit No.
------- ------------ ----
23. Consent of Deloitte & Touche LLP, Independent Auditors..... 9
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DELOITTE & TOUCHE LLP [LOGO] Page 3
1100 Carillon Telephone: (704)372-3560
227 West Trade Street
Charlotte, North Carolina 28202-1675
INDEPENDENT AUDITORS' REPORT
The Employee Benefit Plan Administrative Committee
The Cato Corporation
We have audited the accompanying statements of net assets of the Cato
Corporation Stock Purchase Plan (The "Plan"), as of September 30, 1996 and
1995, and the related statements of changes in net assets for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
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 new assets of the Plan at September 30, 1996 and
1995, and the changes in net assets for the years then ended in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
December 11, 1996
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS
September 30,
----------------
1996 1995
------- -------
Receivable from Company $ 0 $2,999
------- -------
Liabilities of the Plan $ 0 $2,999
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Net Assets $ 0 $ 0
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See accompanying notes to financial statements.
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1996
AND SEPTEMBER 30, 1995
1996 1995
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Increases:
Employee Contributions $306,865 $425,869
Decreases:
Purchases of The Cato Corporation
Common Stock (51,010 and 68,473 shares
for the years ended September 30, 1996
and 1995, respectively) 277,488 379,755
Cash Withdrawals 29,377 46,741
-------- --------
306,865 426,496
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Net Increase (Decrease) 0 (627)
Net Assets at Beginning of Year 0 627
-------- --------
Net Assets at End of Year $ 0 $ 0
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See accompanying notes to financial statements.
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THE CATO CORPORATION EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
Year Ended September 30, 1996 and 1995
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements of The Cato Corporation Employee Stock
Purchase Plan ("the Plan") have been prepared on the accrual basis. The
Plan's fiscal year ends on September 30.
NOTE 2 - PLAN DESCRIPTION AND SUMMARY OF SIGNIFICANT PLAN PROVISIONS
The Board of Directors of The Cato Corporation adopted the Plan on September
23, 1993 and the Plan was approved by Shareholders of the Company at the Annual
Meeting of Shareholders on May 19, 1994. The Plan became effective as of
November 1, 1993 and will terminate on September 20, 2003, unless extended by
the Board of Directors or terminated sooner by the sale of all Shares offered
under the Plan. Of the 250,000 shares of the Cato Corporation Common stock
originally reserved under the Plan, 88,989 shares remained available at
September 30, 1996 and 139,999 shares remained available at September 30, 1995.
The purpose of the Plan is to provide eligible employees with an opportunity to
participate in the accumulation and potential appreciation in value of the
Common Stock of The Cato Corporation. Eligible employees are those who are
regularly scheduled to work at least 20 hours each week and more than 5 months
each calendar year and are actively employed on the first and last day of the
purchase period. Under the terms of the Plan, all eligible employees of the
Company, through payroll deductions, are allowed to purchase, at six-month
intervals specified in the Plan, shares of Common Stock at a 15% discount from
the last reported sale price of the Common Stock on the NASDAQ National Market
System. In addition to the Common Stock which may be purchased through payroll
deductions, Common Stock discounted 15% may also be purchased by each plan
participant by a one-time election on April 15 of each year in an amount not to
exceed $10,000. The purchase price at which shares will be sold during each
offering period is 85% of the lower of the fair market value at (1) the
beginning date of an offering period or (2) ending date of an offering period.
The purchase price for the one-time election is 85% of the last sale price on
or before the April 15 date as listed on the NASDAQ National Market System.
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NOTE 2 - PLAN DESCRIPTION AND SUMMARY OF SIGNIFICANT PLAN PROVISIONS -
CONTINUED
Contributions are limited to 10 percent of compensation for the biannual
purchases made through payroll deductions. The aggregate fair market value of
Shares of Common Stock that may be purchased by any participant during any
calendar year may not exceed $25,000. Pending investment, funds may be held by
The Cato Corporation. In addition to employee contributions, all dividends
paid on Common Shares purchased through the plan are automatically reinvested
in additional shares.
A participant may withdraw all or any portion of the full shares held in the
participant's account under the Plan by notifying The Cato Corporation in
writing. A participant may suspend payroll deductions at any time and
applicable payroll deductions will be returned to the participant.
The Plan is a stock plan as defined in Section 423 of the Internal Revenue Code
of 1986, as amended. Substantial tax benefits are allowed to participants with
respect to the treatment of the stock purchased within the plan, provided
certain holding period requirements are met.
All costs to administer the Plan are paid by the Company.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: December 19, 1996
The Cato Corporation
By: /s/ Robert Sandler
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Senior Vice President
Controller
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DELOITTE & TOUCHE LLP [LOGO] Page 9
1100 Carillon Telephone: (704)372-3560
227 West Trade Street
Charlotte, North Carolina 28202-1675
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-69844 on Form S-8 of The Cato Corporation Employee Stock Purchase Plan of
our report dated December 11, 1996, appearing in this Annual Report on Form
11-K of The Cato Corporation Employee Stock Purchase Plan for the year ended
September 30, 1996.
/s/Deloitte & Touche LLP
December 17, 1996
