-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I9jAh12eS/nVLVZSw+/u7Xw1k5UYY/XJOepFuM20BV7ivHF8/1XsAZEaMmJdbfQT gk4ERyo0ETdBybE7LnkKmA== 0000950152-02-005258.txt : 20020702 0000950152-02-005258.hdr.sgml : 20020702 20020701172113 ACCESSION NUMBER: 0000950152-02-005258 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020701 DATE AS OF CHANGE: 20020701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAIRY MART CONVENIENCE STORES INC CENTRAL INDEX KEY: 0000721675 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CONVENIENCE STORES [5412] IRS NUMBER: 042497894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11627 FILM NUMBER: 02694277 BUSINESS ADDRESS: STREET 1: 300 EXECUTIVE PARKWAY WEST CITY: HUDSON STATE: OH ZIP: 44236 BUSINESS PHONE: 330-342-6600 MAIL ADDRESS: STREET 1: 300 EXECUTIVE PARKWAY WEST CITY: HUDSON STATE: OH ZIP: 44236 11-K 1 l95157ae11vk.txt DAIRY MART CONVENIENCE STORES 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------ FORM 11-K ------------ Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2001 ------------ Commission file number 0-12497 ------------ DAIRY MART CONVENIENCE STORES, INC. 401(K) SAVINGS AND PROFIT SHARING PLAN DAIRY MART CONVENIENCE STORES, INC. ONE DAIRY MART WAY, 300 EXECUTIVE PARKWAY WEST, HUDSON, OHIO 44236 AUDIT REPORT DAIRY MART CONVENIENCE STORES, INC. 401(k) SAVINGS AND PROFIT SHARING PLAN DECEMBER 31, 2001 AND 2000 DAIRY MART CONVENIENCE STORES, INC. 401(k) SAVINGS AND PROFIT SHARING PLAN INDEX - ----- Report of Independent Public Accountants Grant Thorton LLP Report of Independent Public Accountants Arthur Anderson LLP Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2001 and 2000 Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2001 Notes to Financial Statements Supplemental Schedule as of December 31, 2001: Schedule H, Line 4i - Schedule of Assets (Held at End of Year) REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE PLAN ADMINISTRATORS OF DAIRY MART CONVENIENCE STORES, INC. 401(k) SAVINGS AND PROFIT SHARING PLAN We have audited the accompanying statement of net assets available for benefits of the Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan (the Plan) as of December 31, 2001, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements and the supplemental schedule, as listed in the accompanying index, are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and supplemental schedule based on our audit. The financial statements of the Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan as of and for the year ended December 31, 2000 were audited by other auditors whose report dated June 8, 2001 expressed an unqualified opinion on those statements. We conducted our audit in accordance with auditing standards generally accepted in the United States. 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 audit provides 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, 2001, and the changes in its net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for purposes 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. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Grant Thornton LLP Cleveland, Ohio June 26, 2002 [ARTHUR ANDERSEN LOGO] THIS IS A COPY OF A PREVIOUSLY ISSUED ANDERSEN REPORT. THIS REPORT HAS NOT BEEN REISSUED BY ANDERSEN REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrators of Dairy Mart Convenience Stores, Inc. 401(k) Saving and Profit Sharing Plan: We have audited the accompanying statements of net assets available for benefits of the Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan (the Plan) as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. These financial statements and supplemental schedule, as listed in the accompanying index, are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and supplemental schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 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, 2000 and 1999, and the changes in its net assets available for benefits for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes is presented for purposes 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 Rule and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen LLP Cleveland, Ohio, June 8, 2001. Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan NOTES TO FINANCIAL STATEMENTS December 31, 2001 and 2000 1. PLAN DESCRIPTION The following description of the Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan agreement for a more complete description of the Plan. GENERAL - ------- The Plan, known as the Dairy Mart Convenience Stores, Inc. Cash or Deferred Profit Sharing Plan, is a defined contribution plan covering eligible employees of Dairy Mart Convenience Stores, Inc. and its wholly-owned subsidiaries (the Company) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is available to employees who have completed at least six months of continuous service during which they are credited with 500 hours of service. On September 24, 2001, the Company and all of its subsidiaries (with the exception of Financial Opportunities, Inc.) filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of New York. The Company currently is operating their business as debtors-in-possession in accordance with provisions of the Bankruptcy Code. CONTRIBUTIONS - ------------- Eligible employees may make participant directed contributions to the 401(k) portion of the Plan up to 15% of their annual compensation subject to certain limitations under the Internal Revenue Code (the IRC). Until March 31, 2001, the Company matched 50% of contributions up to 6% of the employee's annual compensation. Effective April 1, 2001, the Company matches 25% of employee deferrals up to 3% of the employee's annual compensation. In addition, the Plan permits rollover contributions from another qualified plan on behalf of an eligible employee. Under the provisions of the Plan, each plan year the Company may contribute an additional profit sharing amount as determined by the Company's Board of Directors. Contributions to participants' accounts are based on the percentage of each participant's eligible compensation to total compensation, as defined. The Company did not make any discretionary contributions during 2001. VESTING - ------- Participants are immediately vested in their voluntary contributions and earnings thereon. Participants vest in Company contributions and earnings thereon as follows: NUMBER OF YEARS OF SERVICE PERCENTAGE ----------------------------------------- ------------ Less than 1 year 0% At least 1, but less than 2 years 20% At least 2, but less than 3 years 40% At least 3, but less than 4 years 60% At least 4, but less than 5 years 80% At least 5 years 100% Participants also become fully vested in their share of the Company's contribution upon retirement at or after age 65, or death. Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 2001 and 2000 1. PLAN DESCRIPTION (CONTINUED) BENEFIT PAYMENTS - ---------------- Upon termination of service, a participant may elect to receive either a lump-sum amount or an installment payment equal to the vested portion of his or her account, as defined in the Plan. Prior to termination of employment or age 59-1/2, contributions may only be withdrawn in the event of financial hardship, as defined by the IRC. PARTICIPANT LOANS - ----------------- Participants may borrow against their vested balances pursuant to the loan provision of the Plan. The maximum loan amount available to participants is fifty percent of their vested account balance not to exceed $50,000. The maximum term of a loan is five years. Participant loans are repaid through payroll deductions with interest charged at the prime rate. During 2001, interest rates ranged from 5.5% to 9.5%. ADMINISTRATIVE EXPENSES - ----------------------- In plan years 2001 and 2000, administrative expenses were paid by the Plan, except for certain legal and audit professional fees which were paid by the Company. FORFEITURES - ----------- Forfeitures occur when non-fully vested participants terminate from employment. Profit sharing forfeitures are used to offset Plan administrative expenses and forfeitures of matching contributions are used to reduce the Company's matching contribution on and after the date of such forfeiture. Such forfeitures amounted to approximately $27,000 in 2001. The amount of unutilized forfeitures as of December 31, 2001 was approximately $80,000. PLAN TERMINATION - ---------------- Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, participants become 100% vested in all contributions and earnings thereon. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - ------------------- The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. Investments are reported at market value based on quoted market prices. Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 2001 and 2000 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - ----------------------------------------------------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management of the Plan 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 and deductions during the reporting period. Actual results could differ from those estimates. 3. INVESTMENTS Contributions made to the Plan by participants and the Company matching contributions are invested as directed by the participants. Participants may direct their contributions to the following investment options: Chicago Trust Safety of Principal Fund, American Funds Distributors, Inc. Bond Fund of America, Putnam Investor Services Voyager Fund, Oppenheimer Funds Distributors, Inc. Quest Opportunity Value Fund, MFS Fund Distributors, Inc. Massachusetts Investors Fund, First Data Distributors, Inc. Montag and Caldwell Growth Fund, ABN AMRO/Chicago Capital Balanced Fund, PIMCO Renaissance Fund, Pilgrim International Value "A" Fund, and Dairy Mart Stock Fund. Investment holdings comprising 5% or more of plan assets at fair value as determined by quoted market price are as follows:
2001 2000 ------------- --------------- American Funds Distributors, Inc. Bond Fund of America $ 611,557 $ 621,682 ABN AMRO/Chicago Capital Balanced Fund 1,339,543 1,597,625 Chicago Trust Safety of Principal Fund 1,280,489 1,252,410 MFS Fund Distributors, Inc. Massachusetts Investors Fund 1,097,789 1,564,295 First Data Distributors, Inc. Montag and Caldwell Growth Fund 428,766 435,490 Oppenheimer Funds Distributors, Inc. Quest Opportunity Value Fund 522,729 349,409 Putnam Investor Services Voyager Fund 468,153 614,754
4. TAX STATUS In October of 1995, the Plan received a favorable determination letter from the Internal Revenue Service (IRS) indicating that the Plan and related trust are designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan, as amended, is designed and is currently being operated in compliance with the applicable requirements of the IRC. Dairy Mart Convenience Stores, Inc. 401(k) Savings and Profit Sharing Plan NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 2001 and 2000 5. RELATED PARTY TRANSACTIONS The Plan's investments include 49,660 and 48,660 shares of the Company's common stock as of December 31, 2001 and 2000, respectively. These investments were purchased at the then prevailing market value. Certain Plan investments include shares of publicly traded mutual funds and common/collective trust funds managed by ABN AMRO Asset Management, which acquired the former trustee, Chicago Trust Company, in 2001. ABN AMRO Asset Management serves as trustee of the Plan and, therefore, transactions of these funds qualify as party-in-interest transactions. There were no prohibited party-in-interest transactions in 2001 or 2000, as defined by ERISA. SIGNATURE The Plan. 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, thereunto duly authorized. DAIRY MART CONVENIENCE STORES, INC. 401(K) SAVINGS AND PROFIT SHARING PLAN (Name of Plan) Date: July 1, 2002 By: /s/ Gregory G. Landry ------------------------------------ Gregory G. Landry President and Chief Executive Officer Exhibit Index ------------- Ex 23 Consent of Independent Public Accountants EX-23 3 l95157aexv23.txt EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We have issued our report dated June 26, 2002, accompanying the financial statements and schedule included in the Form 11-K for the year ended December 31, 2001. We hereby consent to the incorporation by reference of said report in the Company's previously filed Registration Statement File No. 333-56377. /s/GRANT THORNTON LLP Cleveland, Ohio June 30, 2002 -----END PRIVACY-ENHANCED MESSAGE-----