-----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, Dz5coA1zuNjFAYa2v05EN6YrhLfG54BTzFsJGU7kf7zrFpDY4LhJmOsHQD3tF7Sn wZFO0ACEJfm5QnnMpZx/rQ== 0000950149-99-000536.txt : 19990330 0000950149-99-000536.hdr.sgml : 19990330 ACCESSION NUMBER: 0000950149-99-000536 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOOD GUYS INC CENTRAL INDEX KEY: 0000785931 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731] IRS NUMBER: 942366177 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-14134 FILM NUMBER: 99575387 BUSINESS ADDRESS: STREET 1: 7000 MARINA BLVD CITY: BRISBANE STATE: CA ZIP: 94005 BUSINESS PHONE: 4156155000 MAIL ADDRESS: STREET 2: 7000 MARINA BLVD CITY: BRISBANE STATE: CA ZIP: 94005 11-K 1 FORM 11-K FOR THE FISCAL YEAR ENDED 09-30-1998 1 As filed with the Securities and Exchange Commission on March 29, 1999 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ --------------------------- Commission File No: 0-14134 --------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: THE GOOD GUYS! DEFERRED PAY PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: The Good Guys, Inc. 7000 Marina Boulevard Brisbane, California 94005-1830 - -------------------------------------------------------------------------------- 2 REQUIRED INFORMATION The Good Guys! Deferred Pay Plan ("Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and schedules of the Plan for the two fiscal years ended September 30, 1997 and 1998, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by this reference. SIGNATURES The Plan. Pursuant to the requirements of the Securities and 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. THE GOOD GUYS! DEFERRED PAY PLAN By: The Good Guys! Deferred Pay Plan Administrative Committee /s/ ROBERT A. GUNST March 29, 1999 - ----------------------- (Robert A. Gunst) /s/ DENNIS C. CARROLL March 29, 1999 - ----------------------- (Dennis C. Carroll) -2- 3 APPENDIX 1 THE GOOD GUYS! DEFERRED PAY PLAN FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997, SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1998 AND INDEPENDENT AUDITORS' REPORT 4 THE GOOD GUYS! DEFERRED PAY PLAN TABLE OF CONTENTS - --------------------------------------------------------------------------------
PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Assets Available for Benefits as of September 30, 1998 and 1997 2 Statements of Changes in Assets Available for Benefits for the Years Ended September 30, 1998 and 1997 2 Notes to Financial Statements 3-8 SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1998: Item 27a - Schedule of Assets Held for Investment Purposes 9 Item 27d - Schedule of Reportable Transactions (series of transactions exceeding 5% of plan assets) 10
5 INDEPENDENT AUDITORS' REPORT Administrative Committee The Good Guys! Deferred Pay Plan We have audited the accompanying statements of assets available for benefits of The Good Guys! Deferred Pay Plan (the "Plan") as of September 30, 1998 and 1997, and the related statements of changes in 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 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, such financial statements present fairly, in all material respects, the assets available for benefits of the Plan as of September 30, 1998 and 1997, and the changes in assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted 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 for the year ended September 30, 1998 are presented for purposes 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 ("ERISA"). The supplemental schedules are the responsibility of the Plan's management. Such supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic 1998 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP - ------------------------------- March 24, 1999 6 THE GOOD GUYS! DEFERRED PAY PLAN STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS SEPTEMBER 30, 1998 AND 1997 - --------------------------------------------------------------------------------
1998 1997 ASSETS: Investments, at fair value: Investment Company of America $ 4,754,313 $ 3,922,606 New Perspective Fund 3,461,616 3,742,839 Bond Fund of America 594,911 536,251 American Balanced Fund 2,160,772 1,899,512 Merrill Lynch Retirement Preservation Trust 1,146,563 1,127,827 The Good Guys! Company Stock Fund 993,738 648,895 Loans to participants 1,066,343 719,265 --------------------------- ASSETS AVAILABLE FOR BENEFITS $14,178,256 $12,597,195 ===========================
- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS YEARS ENDED SEPTEMBER 30, 1998 AND 1997 - --------------------------------------------------------------------------------
1998 1997 ADDITIONS TO ASSETS: Investment income: Interest income $ 71,813 $ 59,640 Net appreciation in fair value of investments 168,068 2,144,651 --------------------------- Total investment income 239,881 2,204,291 Contributions from participants 3,180,867 2,671,010 --------------------------- Total additions 3,420,748 4,875,301 DEDUCTIONS FROM ASSETS - Payments to participants 1,839,687 931,502 --------------------------- NET INCREASE 1,581,061 3,943,799 ASSETS AVAILABLE FOR BENEFITS: At beginning of year 12,597,195 8,653,396 --------------------------- At end of year $14,178,256 $12,597,195 ===========================
See notes to financial statements. 2 7 THE GOOD GUYS! DEFERRED PAY PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 1998 AND 1997 - -------------------------------------------------------------------------------- 1. SUMMARY DESCRIPTION OF PLAN The Good Guys! Deferred Pay Plan (the "Plan") is a defined contribution tax deferred savings plan available to employees of The Good Guys, Inc. (the "Company"). It is subject to the provisions of the Employee Retirement Income Security Act of 1974. Employees of the Company may voluntarily commence participation in the Plan on October 1st or April 1st of each year provided they have completed twelve months (six months in 1997) of continuous service. Participants may contribute up to 20% (15% in 1997) of their annual compensation to the Plan. However, the sum of the participants' contributions to the Plan and the Company's contribution to The Good Guys! Profit-Sharing Plan on the participants' behalf may not be in excess of the amount allowed for federal income tax purposes. Additional contributions may be made to the Plan by the Company at the option of the Plan's Administrative Committee. Each participant's share of assets is segregated in an individual account and invested in accordance with the investment choice elected by the participant. The participants have a choice of six investments, four of those investments are mutual funds, one is in a collective trust and one is in Company Stock. The prospectuses for these investment options describe the funds as follows: Investment Company of America (Equity Growth & Income Fund) - Funds are invested in marketable securities, principally common stock, for long-term growth of capital and income. New Perspective Fund (Global Growth Fund) - Funds are invested in common stocks of both foreign and domestic companies for long-term growth of capital. Bond Fund of America (Fixed Income Fund) - Funds are invested in marketable fixed-income debt securities, government obligations, and money-market instruments for current income and the preservation of capital. American Balanced Fund (Equity Growth & Income Fund) - Funds are invested in a diversified array of equities, debt, and cash instruments for capital preservation, current income, and long-term growth of capital and income. Merrill Lynch Retirement Preservation Trust (Cash Equivalents; Collective Trust Fund) - Funds are invested in Guaranteed Investment Contracts, U.S. Government obligations and money market instruments for current income and preservation of capital (see Note 4). 3 8 The Good Guys! Company Stock Fund - Funds are invested in The Good Guys! common stock. VESTING - All employee contributions are fully vested at the time of contribution. DISTRIBUTION OF BENEFITS - Benefits are payable to employees upon termination of employment, normal retirement, total disability, death, or for financial hardship as defined by the Internal Revenue Service. The Plan provides that all administrative costs be paid by the Company. PLAN TERMINATION - Although it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time, subject to the provisions of ERISA. Upon termination, all amounts credited to the participants' accounts will be distributed in accordance with Plan provisions. INCOME TAXES - The Plan obtained a determination letter on February 21, 1997, in which the Internal Revenue Service stated that the Plan is in compliance with the applicable requirements of the Internal Revenue Code. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The accompanying financial statements of the Plan are prepared on the accrual method of accounting. USE OF ESTIMATES - In preparing the Plan's financial statements, the administrator is required to make estimates and assumptions that affect the reported amounts of assets and disclosure of contingent assets at the date of the financial statements, and the reported amounts of additions and deductions to assets during the reporting periods. Actual results could differ from these estimates. INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are stated at estimated fair value, which is determined by quoted market prices. The Plan's guaranteed investment contract is valued at contract value. Participant loans are carried at amortized cost, which approximates fair value (See Note 4). Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date. 4 9 BENEFITS are recorded when paid. As of September 30, 1998 and 1997, assets available for benefits included benefits of $2,319,494 and $1,908,596 due to participants who have withdrawn from participation in the Plan. 3. PARTICIPANT LOANS Under the terms of the Plan and subject to certain limitations as defined in the Plan agreement, participants may borrow against the amount of their vested accounts. Such loans are payable over periods of up to five years, or up to 30 years for the purchase of a primary residence, and bear interest at a rate equal to that charged by institutional lenders for similar loans at the time the loan is made. As of September 30, 1998, there are 246 loans, maturing from 1998 to 2028 with interest rates ranging between 9% and 11%. 4. FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK As required by Financial Accounting Standard No. 105, Disclosure of Information about Financial Investments with Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit Risk," the following information about the risk characteristics associated with the Merrill Lynch Retirement Preservation Trust (the "Fund") is presented. The Fund invests in guaranteed investment contracts ("GIC"), bank investment contracts ("BIC") and other synthetic guaranteed investment contracts issued by selected North American life insurance companies and U.S. banks. The issuer of each investment contract undertakes to repay the principal amounts deposited pursuant to the contract plus accrued interest at fixed or variable rates as specified under its terms. The credit risk of the issuer of each investment contract is evaluated and monitored by the trustee. The Fund's policy is to require that the investment contract issuer has ratings no lower than: a rating of AAA from Standard & Poor's or Aa2 from Moody's at the time of purchase. The GIC issuer is subject to an analysis of asset quality, liquidity, management quality, surplus adequacy and profitability. Further, the issuer's mortgage loan portfolio and bond holdings are scrutinized for exposure to high risk bonds and geographical concentrations. A credit review of all issuers of GICs is performed periodically. The reviews are based upon the external rating services listed above. An investment contract may be identified as substandard or removed from the Fund depending on the degree of deterioration of the issuer's rating. The Trustee may elect to segregate a contract from the Fund, resulting in separate accounting for the investment contract. As a result, participants admitted to the Fund after the contract has been segregated from the Fund will not be affected. 5 10 The Fund's policy is to review a variety of factors prior to selecting a BIC issuer for bidding on BICs. These factors include, but are not limited to, asset quality, liquidity, management quality, profitability and, as is the policy of the Trustee, the Trustee's exposure to the issuing bank. Furthermore, the Fund's investments in BICs are insured by the Federal Deposit Insurance Corporation within applicable limits. Such coverage was eliminated effective December 1993, or, for contracts purchased prior to December 1991, at maturity. 5. INVESTMENTS Investments that represent 5% or more of the Plan's net assets at September 30, 1998 and 1997 are separately identified in the following table:
1998 1997 --------------------- --------------------- Fair Fair Cost Value Cost Value Investment Company of America $4,086,382 $4,754,313 $2,866,067 $3,922,606 New Perspective Fund 2,973,381 3,461,616 2,844,428 3,742,839 American Balanced Fund 2,089,574 2,160,772 1,550,012 1,899,512 Merrill Lynch Retirement Preservation Trust 1,146,563 1,146,563 1,127,827 1,127,827 The Good Guys! Company Stock Fund 1,372,550 993,738 931,609 648,895 Loans to participants 1,066,343 1,066,343 719,265 719,265
6. FUND INFORMATION The following information shows the changes in assets available for benefits by fund type: 6 11 CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND YEAR ENDED SEPTEMBER 30, 1998 - --------------------------------------------------------------------------------
MERRILL THE GOOD LYNCH GUYS! INVESTMENT NEW BOND AMERICAN RETIREMENT COMPANY COMPANY PERSPECTIVE FUND OF BALANCED PRESERVATION STOCK PARTICIPANT OF AMERICA FUND AMERICA FUND TRUST FUND LOANS TOTAL ---------------------------------------------------------------------------------------------------- ADDITIONS TO ASSETS: Investment income: Interest income $ $ $ $ $ $ $ 71,813 $ 71,813 Net appreciation (depreciation) in fair value of investments 226,890 80,541 24,161 59,267 62,660 (285,451) -- 168,068 Contributions from participants 1,164,492 801,572 136,687 459,479 314,641 768,074 (464,078) 3,180,867 ---------------------------------------------------------------------------------------------------- Total additions 1,391,382 882,113 160,848 518,746 377,301 482,623 (392,265) 3,420,748 ---------------------------------------------------------------------------------------------------- DEDUCTIONS FROM ASSETS - Participants' withdrawals 850,674 795,152 79,503 308,993 275,316 213,040 (682,991) 1,839,687 ---------------------------------------------------------------------------------------------------- NET INCREASE PRIOR TO INTERFUND TRANSFERS 540,708 86,961 81,345 209,753 101,985 269,583 290,726 1,581,061 INTERFUND TRANSFERS 290,999 (368,184) (22,685) 51,507 (83,249) 75,260 56,352 -- ---------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) 831,707 (281,223) 58,660 261,260 18,736 344,843 347,078 1,581,061 ASSETS AVAILABLE FOR BENEFITS: Beginning of year 3,922,606 3,742,839 536,251 1,899,512 1,127,827 648,895 719,265 12,597,195 ---------------------------------------------------------------------------------------------------- End of year $ 4,754,313 $3,461,616 $594,911 $2,160,772 $1,146,563 $ 993,738 $1,066,343 $14,178,256 ====================================================================================================
7 12 CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND YEAR ENDED SEPTEMBER 30, 1997 - --------------------------------------------------------------------------------
MERRILL THE GOOD LYNCH GUYS! INVESTMENT NEW BOND AMERICAN RETIREMENT COMPANY COMPANY PERSPECTIVE FUND OF BALANCED PRESERVATION STOCK PARTICIPANT OF AMERICA FUND AMERICA FUND TRUST FUND LOANS TOTAL ------------------------------------------------------------------------------------------------------ ADDITIONS TO ASSETS: Investment income: Interest income $ $ $ $ $ $ $59,640 $ 59,640 Net appreciation (depreciation) in fair value of investments 922,591 789,325 53,492 367,821 61,721 (50,299) -- 2,144,651 Contributions from participants 982,512 833,800 164,571 456,634 402,508 164,565 (333,580) 2,671,010 ------------------------------------------------------------------------------------------------------ Total additions 1,905,103 1,623,125 218,063 824,455 464,229 114,266 (273,940) 4,875,301 ------------------------------------------------------------------------------------------------------ DEDUCTIONS FROM ASSETS - Participants' withdrawals 384,413 384,193 103,862 268,727 177,779 86,973 (474,445) 931,502 ------------------------------------------------------------------------------------------------------ NET INCREASE BEFORE INTERFUND TRANSFERS 1,520,690 1,238,932 114,201 555,728 286,450 27,293 200,505 3,943,799 INTERFUND TRANSFERS 320,826 106,812 (65,939) 16,557 (239,864) (63,068) (75,324) 0 ------------------------------------------------------------------------------------------------------ NET INCREASE 1,841,516 1,345,744 48,262 572,285 46,586 (35,775) 125,181 3,943,799 ASSETS AVAILABLE FOR BENEFITS: Beginning of year 2,081,090 2,397,095 487,989 1,327,227 1,081,241 684,670 594,084 8,653,396 ------------------------------------------------------------------------------------------------------ End of year $3,922,606 $3,742,839 $536,251 $1,899,512 $1,127,827 $648,895 $ 719,265 $12,597,195 ======================================================================================================
8 13 THE GOOD GUYS! DEFERRED PAY PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SEPTEMBER 30, 1998 - --------------------------------------------------------------------------------
INVESTMENTS UNITS/SHARE COST FAIR VALUE INVESTMENT COMPANY OF AMERICA 159,491 $ 4,086,382 $ 4,754,313 NEW PERSPECTIVE FUND 164,348 2,973,381 3,461,616 BOND FUND OF AMERICA 41,989 580,326 594,911 AMERICAN BALANCED FUND 141,168 2,089,574 2,160,772 MERRILL LYNCH RETIREMENT PRESERVATION TRUST 1,146,563 1,146,563 1,146,563 THE GOOD GUYS! COMPANY STOCK FUND 130,444 1,372,550 993,738 LOANS TO PARTICIPANTS (See Note 3) 1,066,343 1,066,343 -------------------------- TOTAL INVESTMENTS $13,315,119 $14,178,256 ==========================
9 14 THE GOOD GUYS! DEFERRED PAY PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS) YEAR ENDED SEPTEMBER 30, 1998 - --------------------------------------------------------------------------------
PURCHASES DISPOSITIONS ------------------------ --------------------------------- NUMBER OF NUMBER OF GAIN FUND TRANSACTIONS COST TRANSACTIONS PROCEEDS (LOSS) Investment Company of America 64 $1,911,498 30 $ 868,272 $163,455 New Perspective Fund 53 1,060,852 35 1,161,179 227,335 American Balanced Fund 53 949,063 30 459,996 48,060 Merrill Lynch Retirement Preservation Trust 285 470,181 26 419,171 -- The Good Guys! Company Stock Fund 48 686,417 25 235,886 (4,148)
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