<PAGE>
U.S. 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 period from October 3, 1996 (inception) through June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER 0-21399
PEERLESS GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
PEERLESS GROUP, INC.
(Name of issuer of the securities held pursuant to the plan)
1212 EAST ARAPAHO ROAD
RICHARDSON, TEXAS 75081
(972) 497-5500
(Address, including zip code, and telephone number,
including area code, of issuer's principal executive offices)
<PAGE>
REQUIRED INFORMATION
The financial statements listed in the accompanying table of contents on page 4
are filed as a part of this Form 11-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Stock Purchase Plan Committee has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized.
PEERLESS GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
By: /s/ Rodney L. Armstrong, Jr.
--------------------------------------
Rodney L. Armstrong, Jr.
Chairman of the Employee Stock
Purchase Plan Committee
Date: September 26, 1997
<PAGE>
Financial Statements
Peerless Group, Inc.
Employee Stock Purchase Plan
Period from October 3, 1996 (Inception)
through June 30, 1997
with Report of Independent Auditors
<PAGE>
Peerless Group, Inc.
Employee Stock Purchase Plan
Financial Statements
Period from October 3, 1996 (Inception) through June 30, 1997
CONTENTS
Report of Independent Auditors........................... 1
Audited Financial Statements
Statement of Financial Condition......................... 2
Statement of Income and Changes in Participants' Equity.. 3
Notes to Financial Statements............................ 4
<PAGE>
Report of Independent Auditors
The Employee Stock Purchase Plan Committee
of Peerless Group, Inc.
We have audited the accompanying statement of financial condition of the
Peerless Group, Inc. Employee Stock Purchase Plan as of June 30, 1997, and the
related statement of income and changes in participants' equity for the period
from October 3, 1996 (inception) through June 30, 1997. 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 audits.
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 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 financial condition of the Plan at June 30, 1997, and
the results of its operations and changes in its participants' equity for the
period from October 3, 1996 (inception) through June 30, 1997, in accordance
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Dallas, Texas
September 23, 1997
<PAGE>
Peerless Group, Inc.
Employee Stock Purchase Plan
Statement of Financial Condition
June 30, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Receivable from Peerless Group, Inc. $189,355
========
PARTICIPANTS' EQUITY
Participants' equity $189,355
========
</TABLE>
See accompanying notes.
<PAGE>
Peerless Group, Inc.
Employee Stock Purchase Plan
Statement of Income and Changes in Participants' Equity
Period from October 3, 1996 (Inception) through June 30, 1997
<TABLE>
<S> <C>
Participant contributions $210,843
Withdrawals from the Plan (21,488)
--------
Increase in participants' equity 189,355
Participants' equity at beginning of period -
--------
Participants' equity at end of period $189,355
========
</TABLE>
See accompanying notes.
<PAGE>
Peerless Group, Inc.
Employee Stock Purchase Plan
Notes to Financial Statements
Period from October 3, 1996 (Inception) through June 30, 1997
1. PLAN DESCRIPTION AND BASIS OF PRESENTATION
Peerless Group, Inc. (the Company) established the Peerless Group, Inc. Employee
Stock Purchase Plan (the Plan) effective as of October 3, 1996. The Plan
qualifies as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended, and is not subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended.
The Plan is administered by the Employee Stock Purchase Plan Committee (the
Committee) comprised of not less than three members as appointed by the Chief
Executive Officer of the Company. All members of the Committee are disinterested
persons, defined as any director who is not at the time he exercises discretion
in administering the Plan eligible and has not at any time within one year been
eligible to purchase common stock under the Plan.
The Company may make periodic offerings to eligible employees to purchase common
stock under the Plan, which offerings shall not be made more often than once
every calendar year. The initial offering period was from the effective date of
the Plan through June 30, 1997. Future offering periods run from each July 1 to
June 30. Each eligible employee has the opportunity to elect to contribute
during the offering period, through payroll deductions, any whole percentage
from 1% up to and including 10% of gross compensation. Contributions shall be
used to purchase the number of whole shares of the Company's common stock that
can be purchased with the amount deducted. Fractional shares may not be
purchased; any funds that are insufficient to purchase whole shares remain in
the Participant's plan account until the following offering period. Participants
are fully vested in all contributions made to the Plan. Interest is not paid to
participants on funds accumulated in their individual accounts. Upon a
Participant's election to cease participation in the Plan, all payroll
deductions credited to a withdrawing Participant's plan account, including
amounts carried over from the prior offering period due to insufficiency to
purchase whole shares, shall be returned to such Participant in cash, without
interest.
Employees of the Company are generally eligible to participate in the Plan as of
the entry date following the attainment of age 21 and the completion of 1,000
hours of service during the prior offering period. The initial entry date for
the Plan was October 3, 1996. Subsequent entry dates will be each January 1 and
July 1 following the initial entry date.
The purchase price for a share of common stock under any offering is the lesser
of 85% of the closing price of the common stock on the first day of the offering
period, or 85% of the closing price of the common stock on the last day of the
offering period. The Company has reserved 250,000 shares of its common stock for
issuance under the Plan.
<PAGE>
Peerless Group, Inc.
Employee Stock Purchase Plan
Notes to Financial Statements (continued)
1. PLAN DESCRIPTION AND BASIS OF PRESENTATION (CONTINUED)
The Company reserves the right to terminate the Plan at any time, upon action of
the Board of Directors of the Company and subject to plan provisions. Upon
termination of the Plan and the exercise or lapse of all offering rights, all
amounts remaining in the Plan accounts of participating employees, without
interest, shall be promptly refunded. The Company bears all costs in connection
with the Plan including administrative fees and all fees associated with the
transfer and issuance of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared on the accrual basis of accounting.
3. TAX STATUS
The Plan is a nonqualified plan for Internal Revenue Service purposes.
Participant contributions to the Plan constitute taxable wages for the taxable
year in which such contributions would have been paid to the participant. The
Plan is not subject to federal income taxes. Plan participants recognize no
taxable income at the time of purchase of shares. However, both ordinary income
and a capital gain or capital loss may be realized upon disposition of shares by
the participant.
4. SUBSEQUENT EVENT
Subsequent to June 30, 1997, a total of 30,679 shares of common stock were
purchased at $6.1625 per share (the purchase price, calculated as described in
Note 1) and transferred to the individual participants based on their relative
account values at June 30, 1997.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-24819) pertaining to the Peerless Group, Inc. Employee Stock
Purchase Plan of our report dated September 23, 1997, with respect to the
financial statements of the Peerless Group, Inc. Employee Stock Purchase Plan
included in this Annual Report (Form 11-K) for the period from October 3, 1996
(inception) through June 30, 1997.
/s/ Ernst & Young LLP
Dallas, Texas
September 23, 1997
