-----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, Q9u9ob9VG8HEYMlNbDr490LMfNL26B6AzrKj/E0vPjzC0LJVCBc/QnjFvK9P5SGf vnrK2dN3fXSXFcZcAie7Qg== 0000897101-00-000495.txt : 20000512 0000897101-00-000495.hdr.sgml : 20000512 ACCESSION NUMBER: 0000897101-00-000495 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991225 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GROW BIZ INTERNATIONAL INC CENTRAL INDEX KEY: 0000908315 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 411622691 STATE OF INCORPORATION: MN FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-22012 FILM NUMBER: 625908 BUSINESS ADDRESS: STREET 1: 4200 DAHLBERG DR CITY: GOLDEN VALLEY STATE: MN ZIP: 55422-4837 BUSINESS PHONE: 6125208500 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 25, 1999 COMMISSION FILE NUMBER: 0-22012 ----------- GROW BIZ INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) MINNESOTA 41-1622691 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 4200 Dahlberg Drive, Minneapolis, MN 55422-4837 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (612) 520-8500 Securities registered pursuant to Section 12 (b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value per share Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [ X ] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing sale price of the Registrant's Common Stock on March 13, 2000, as reported on the NASDAQ SmallCap Market, was $7.0 million. Shares of no par value Common Stock outstanding as of March 13, 2000: 5,381,119 shares. DOCUMENTS INCORPORATED BY REFERENCE None. The Registrant hereby amends Items 11, 12 and 13 of its Annual Report on Form 10-K filed on March 22, 2000 to read as follows: GROW BIZ INTERNATIONAL, INC. AND SUBSIDIARY INDEX TO ANNUAL REPORT ON FORM 10-K/A PART III PAGE - -------------------------------------------------------------------------------- Item 11. Executive Compensation 3 Item 12. Security Ownership of Certain Beneficial Owners and Management 6 Item 13. Certain Relationships and Related Transactions 7 Signatures 8 EXHIBITS - -------------------------------------------------------------------------------- Exhibit 23 Consent of Independent Public Accountants 2 ITEM 11: EXECUTIVE COMPENSATION. The following table sets forth certain information regarding compensation earned or awarded during each of the last three fiscal years to the Company's Chief Executive Officer and the other four most highly compensated executive officers serving as executive officers at the end of fiscal 1999 (the "Named Executive Officers"): SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION ($) ---------------------------------------- LONG-TERM --------- COMPENSATION ------------ FISCAL OTHER ANNUAL OPTION ALL OTHER ------ ------------ ------ --------- NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS (#) COMPENSATION --------------------------- ---- ------ ----- ------------ ---------- ------------ K. Jeffrey Dahlberg(3) 1999 258,300 - - - 43,323(1) Chairman of the Board and 1998 200,000 - - - 43,044 Chief Executive Officer 1997 240,000 - - - 46,283 Ronald G. Olson(3) 1999 241,700 - - - 44,154(1) Vice Chairman 1998 300,000 - - - 42,333 1997 260,000 - - - 45,181 Ted R. Manley 1999 155,000 38,750 - 40,000 9,831(2) President and Chief Operating 1998 147,000 - - - 6,993 Officer 1997 126,000 90,750 - 10,000 5,610 Charles V. Kanan 1999 142,000 26,625 - 20,000 7,713(2) President Play It Again Sports 1998 137,500 43,313 - - 7,234 Division 1997 137,500 - - 5,000 6,239 David J. Osdoba, Jr. 1999 135,000 33,750 - 25,000 8,173(2) Vice President of Finance and 1998 120,000 - - - 6,799 Chief Financial Officer 1997 100,000 40,000 - 10,000 5,497
- ---------------------------- (1) Includes premiums paid in 1999 by the Company for term life insurance coverage and the present value of the benefit to the executive of the remainder of the premiums for split dollar life insurance coverage paid by the Company on behalf of the named executive as follows: Mr. Dahlberg - $34,253 and Mr. Olson - $33,031. Also includes 401(k) Company matching contributions and profit sharing as follows: Mr. Dahlberg - $9,070 and Mr. Olson - $11,123. (2) Consists of 401(k) Company matching contributions and profit sharing. (3) In March 2000, K. Jeffery Dahlberg and Ronald G. Olson resigned their positions with the Company. 3 OPTIONS GRANTED DURING FISCAL 1999 The following table provides information relating to options granted to the Named Executive Officers during the Company's 1999 fiscal year:
INDIVIDUAL GRANTS --------------------------------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK % OF TOTAL PRICE APPRECIATION OPTIONS GRANTED FOR OPTION TERM OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION --------------- NAME GRANTED(1) FISCAL YEAR (#/SH) PRICE ($)(2) DATE 5%($)(3) 10%($)(3) - ---- ---------- ------------------ ------------ ---- -------- --------- K. Jeffrey Dahlberg - - - - - - Ronald G. Olson - - - - - - Ted R. Manley 40,000 26.7% 4.25 11/17/04 46,800 103,600 Charles V. Kanan 20,000 13.3% 4.25 11/17/04 23,400 51,800 David J. Osdoba, Jr. 25,000 16.7% 4.25 11/17/04 29,250 64,750
- ---------------------------- (1) The number indicated is the number of common shares that can be acquired upon exercise of the option. The Company has not granted any stock appreciation rights. Each option is non-transferable, becomes exercisable in four annual installments of 25% per year commencing on the first anniversary of the date of grant, and provides for forfeiture of any unvested portion upon termination of employment. (2) Exercise prices are equal to the fair market value at the date of grant. (3) The assumed 5% and 10% annual rates of appreciation are hypothetical rates selected by the Securities and Exchange Commission and are not intended to, and do not, forecast or assume actual future stock prices. AGGREGATED OPTION EXERCISES DURING FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES The following table provides information relating to options exercised by the Named Executive Officers during fiscal 1999 and the number and value of options held at fiscal year-end. The Company does not have any outstanding stock appreciation rights.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT ------- ------------------ ----------------------- ACQUIRED ON VALUE YEAR-END (#) FISCAL YEAR-END ($)(1) ------------ ------ ------------ ---------------------- NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE ---- ------------ ------------ ------------------------- ------------------------- K. Jeffrey Dahlberg - - - - Ronald G. Olson - - - - Ted R. Manley - - 27,500 / 52,500 - Charles V. Kanan - - 18,750 / 31,250 - David J. Osdoba, Jr. - - 17,750 / 43,250 -
- ---------------------------- (1) Options are "in-the-money" if the fair market value of the underlying shares at fiscal year end is greater than the exercise price. The amounts set forth represent the difference between the fair market value of the common shares on December 25, 1999 and the option exercise price multiplied by the number of shares subject to the option. 4 DIRECTOR COMPENSATION Each nonemployee director of the Company receives $500 for each board and committee meeting attended. Effective August 23, 1993, Dennis J. Doyle and Bruce C. Sanborn, the only nonemployee directors at the time, were each granted an option to purchase 25,000 common shares at an exercise price of $10.00 per share. Effective September 24, 1993, the Board of Directors adopted the Stock Option Plan for Nonemployee Directors ("Directors Plan") which provides for an automatic grant of an option to purchase 25,000 common shares upon the initial election as a director. Pursuant to this Plan, Randel S. Carlock and Robert C. Pohlad were each granted an option to purchase 25,000 common shares at an exercise price of $15.00 per share. Effective November 21, 1995, the options granted to Messrs. Carlock and Pohlad were canceled and replacement options to purchase 25,000 common shares each at $10.00 per share, which was above the market price on the effective date, were granted separate from the Directors Plan. All options granted to nonemployee directors expired in 1999. Each of the nonemployee director nominees will be granted an option to purchase 25,000 shares of the Company's common stock under the Directors Plan, effective as of May 3, 2000. These options vest 20% per year and expire at the end of six years. COMPENSATION COMMITTEE INTERLOCKS The 1999 Compensation Committee of the Board of Directors consists of two nonemployee directors, Dennis J. Doyle and Bruce C. Sanborn. Prior to November 1999, Mr. Sanborn was the Chief Executive Officer of North Central Life Insurance Company and K. Jeffrey Dahlberg, the Company's Chairman, served on the Board of North Central Life Insurance Company. 5 ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. SECURITY OWNERSHIP The following table sets forth the number of shares of Common Stock beneficially owned by (i) each person known by the Company to own 5% or more of the outstanding shares of Common Stock, (ii) each Named Executive Officer, (iii) each director of the Company, (iv) each director nominee and (v) all directors and executive officers as a group. All persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned, unless otherwise noted. The number of shares listed is as of March 24, 2000 unless otherwise noted.
NUMBER OF SHARES PERCENT OF BENEFICIALLY OWNED OUTSTANDING SHARES ------------------ ------------------ K. Jeffrey Dahlberg 1,363,225(1) 25.3% 455 North Ferndale Drive Wayzata, MN 55391 Ronald G. Olson 1,347,668(2) 25.0% 3400 Fox Street Long Lake, MN 55356 John L. Morgan 566,600(5) 10.5% 4200 Dahlberg Drive Minneapolis, MN 55422 Sheldon T. Fleck 680,800(3) 12.2% 1400 International Centre 900 Second Avenue South Minneapolis, MN 55402 Kirk A. MacKenzie 210,000(6) 3.9% Paul C. Reyelts 0 0.0% William D. Dunlap, Jr. 0 0.0% Mark L. Wilson 0 0.0% Ted R. Manley 23,579(3) 0.4% Charles V. Kanan 22,600(3) 0.4% David J. Osdoba, Jr. 26,045(3) 0.5% Dennis J. Doyle 15,000 0.3% Bruce C. Sanborn 15,100(4) 0.3% Robert C. Pohlad 0 0.0% Randel S. Carlock 0 0.0% All directors and executive officer as a group (10 2,154,721(3) 38.2% persons)
6 - ---------------------------- (1) Includes 279,250 shares held in trust for minor children. (2) Includes 17,900 shares held by Mr. Olson's adult children and 111,600 shares held in trust for these children and 1,500 shares held by Mr. Olson's wife. Mr. Olson disclaims beneficial ownership of these shares. (3) Includes the following shares which may be acquired within 60 days through the exercise of stock options or warrants: Mr. Manley - 22,500; Mr. Osdoba - 23,000; Mr. Kanan - 20,000; Mr. Fleck - 200,000; and all directors and executive officers as a group - 65,500. (4) Includes 100 shares held by Mr. Sanborn's son. Mr. Sanborn disclaims beneficial ownership of these shares. (5) Includes 140,000 shares owned by Rush River LLC, in which Mr. Morgan is a general partner, and 4,300 shares held by Mr. Morgan's wife. (6) Includes 140,000 shares owned by Rush River LLC, in which Mr. MacKenzie is a general partner. CHANGE IN CONTROL On March 22, 2000, John L. Morgan, Chief Executive Officer and a director nominee, Kirk A. MacKenzie, a director nominee, and their associates acquired 700,000 shares of Common Stock from K. Jeffrey Dahlberg, the Company's former Chief Executive Officer, in a private transaction at a purchase price of $7.00 per share. These shares were acquired for cash using personal funds of the acquirers and represent 13.0% of the shares of Common Stock outstanding as of March 24, 2000. In connection with this transaction, K. Jeffrey Dahlberg resigned his position as Chairman and Chief Executive Officer. As a result of the acquisition, Messrs. Morgan and McKenzie beneficially own approximately 10.5% and 3.9% of the Company's outstanding shares of Common Stock. Prior to the acquisition, Mr. Dahlberg beneficially owned approximately 38.3% of the Company's outstanding shares of Common Stock. ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. During 1999, two Play It Again Sports(R) franchises, two Once Upon A Child(R) franchises and one Computer Renaissance(R) franchise, owned by relatives of K. Jeffrey Dahlberg, paid $64,524 in royalties to the Company and purchased $256,407 of merchandise through the Company's buying group. In November 1999, the Company engaged Sheldon T. Fleck, a shareholder of the Company, to act as a non-exclusive financial advisor to the Company. Under the engagement agreement, Mr. Fleck provided services to the Company in the areas of strategic planning and business development through February 29, 2000. On March 22, 2000, the Company issued a warrant to Mr. Fleck to purchase 200,000 shares of the Company's common stock, exercisable immediately for a period of eight years at an exercise price of $6.00 per share. Mr. Fleck owns approximately 12.2% of the outstanding shares of the Company's common stock as of March 24, 2000. The Company leases from PIAS Holdings, a general partnership owned by K. Jeffrey Dahlberg and Ronald G. Olson, certain real property which houses a Company-owned retail store located at 3505 Hennepin Avenue, Minneapolis, Minnesota. Pursuant to this lease, the Company is obligated to make lease payments of $5,500 per month through September 2000. During fiscal 1999, the Company made payments of $66,000 under this lease. 7 SIGNATURES In accordance with Section 13 or 15(d) 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. GROW BIZ INTERNATIONAL, INC. AND SUBSIDIARY By: /s/ JOHN L. MORGAN Date: May 10, 2000 ------------------ John L. Morgan Chairman and Chief Executive Officer KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John L. Morgan and David J. Osdoba, Jr., and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any amendments to this Form 10-K/A, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof. In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- Chairman of the Board of Directors and Chief /s/ JOHN L. MORGAN Executive Officer May 10, 2000 - ---------------------------------------- (principal executive officer) John L. Morgan Senior Vice President of Finance and Chief /s/ DAVID J. OSDOBA, JR. Financial Officer May 10, 2000 - ---------------------------------------- (principal financial and accounting officer) David J. Osdoba, Jr. Vice Chairman of the Board of Directors - ---------------------------------------- Kirk A. MacKenzie /s/ WILLIAM D. DUNLAP, JR. Director May 11, 2000 - ---------------------------------------- William D. Dunlap, Jr. /s/ PAUL C. REYELTS Director May 10, 2000 - ---------------------------------------- Paul C. Reyelts /s/ MARK L. WILSON Director May 10, 2000 - ---------------------------------------- Mark L. Wilson
8 EX-23 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K/A, into the Company's previously filed Registration Statement File Nos. 33-85972, 33-85956, 33-79176, 33-71772, 333-3236, and 333-3066. ARTHUR ANDERSEN LLP Minneapolis, Minnesota, May 10, 2000 -----END PRIVACY-ENHANCED MESSAGE-----