SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[x] Annual Report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended June 30, 2000.
[ ] Transition Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___ to ____.
Commission file number 0-26265
Garden.com, Inc.
-----------------------------------
(Exact name of Registrant as Specified in Its Charter)
Delaware 74-2765381
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(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
3301 Steck Avenue, Austin, TX 78757
--------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 512-532-4000
--------------
Securities registered pursuant to Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
NA NA
-- --
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, Par Value $.01 Per Share
------------------------------------------------
(Title of class)
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
-- --
Check 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
<PAGE>
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of the Registrant's common stock held by
nonaffiliates as of August 31, 2000: $17,346,542. Shares of common stock held
by any executive officer or director of the Registrant and any person who
beneficially owns 10% or more of the outstanding common stock have been excluded
from this computation because such persons may be deemed to be affiliates. This
determination of affiliate status is not a conclusive determination for other
purposes.
Number of shares of the Registrant's common stock outstanding as of August
31, 2000: 17,739,845.
DOCUMENTS INCORPORATED BY REFERENCE
None.
2
<PAGE>
Garden.com, Inc. (the "Company") is amending Part III of its Annual Report
on Form 10-K for the year ended June 30, 2000, as filed with the Securities and
Exchange Commission on October 13, 2000 (the "Annual Report"), to include the
information required by the items of Part III. Accordingly, Items 10, 11, 12
and 13 of Part III of the Annual Report are hereby amended in their entirety as
follows:
3
<PAGE>
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The Board of Directors of the Corporation is divided into three classes,
with the term of office of each class ending in successive years.
<TABLE>
<CAPTION>
DIRECTOR
NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND DIRECTORSHIPS AGE SINCE
-------------------------------------------------------------------------------------------- --- --------
<S> <C> <C>
CLASS OF 2000:
GERALD R. GALLAGHER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 1997
Mr. Gallagher has served as a general partner of Oak Investment Partners, a venture
capital investment firm, since 1987.
LISA W.A. SHARPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 1995
Ms. Sharples is a founder of the Corporation and has served as its Chief Merchandising
and Marketing Officer since August 1998 and served as its Vice President of Marketing
from December 1995 to August 1998. Prior to founding the Corporation, she served as
Director of Marketing for pcOrder.com, Inc., an online computer merchant, from May
1995 to August 1995. From October 1993 to May 1995, Ms. Sharples was employed at
Silicon Graphics, Inc., a computer workstation company, as a marketing manager for the
Channel Development Group. Ms. Sharples is the wife of Clifford A. Sharples.
CLASS OF 2001:
STEVEN J. DIETZ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 1998
Mr. Dietz is a principal of Global Retail Partners, L.P., a venture capital investment firm,
which he joined when it was established in 1996. Prior to 1996, Mr. Dietz was an officer
in the investment banking division of the Donaldson, Lufkin & Jenrette Securities
Corporation focusing on the retail industry.
JAMES N. O'NEILL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 1995
Mr. O'Neill is a founder of the Corporation and has served as its Chief Operating Officer
since April 1998, and served as its Vice President of Operations and Chief Financial
Officer from December 1995 to August 1998. Prior to founding the Corporation,
Mr. O'Neill was employed as a marketing manager by Trilogy Software, Inc., an
enterprise software company, from May 1995 to August 1995. From June 1993 to May
1995, Mr. O'Neill served as an internal consultant for top management at W.W. Grainger,
Inc., a nationwide distributor of maintenance, repair and operations products.
JOHN D. THORNTON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1995
Mr. Thornton is a general partner of Austin Ventures, a venture capital investment firm,
which he joined in 1991. Mr. Thornton currently serves on the Board of Directors of
Vignette Corporation, Metasolv Software, Inc. and Mission Critical Software, Inc., which
are all independent computer software companies.
4
<PAGE>
CLASS OF 2002:
CLIFFORD A. SHARPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 1995
Mr. Sharples is a founder of the Corporation and has served as Chief Executive Officer
and President of the Corporation since December 1995. Prior to founding the
Corporation, he served as Director of Business Development for pcOrder.com, Inc., an
online computer merchant, from May 1995 to August 1995. From December 1994 to
April 1995, Mr. Sharples worked as a consultant at Enterprise Integration Technologies, a
research and development company specializing in electronic commerce over the
Internet. Mr. Sharples is the husband of Lisa W.A. Sharples.
DOUGLAS R. STERN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 1997
Mr. Stern has served as President and Chief Executive Officer of Scripps Ventures, the
venture capital operations of The E.W. Scripps Company, since June 1996. Mr. Stern has
also served as President and Chief Executive Officer of United Media, a licensing and
newspaper syndication company that is wholly owned by The E.W. Scripps Company,
since August 1993.
</TABLE>
EXECUTIVE OFFICERS
The following table sets forth the name, age, current position and
principal occupation and employment during the past five years of the executive
officers of the Corporation who are not directors:
5
<PAGE>
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION OTHER POSITIONS
------------------- --- --------------------------------- ------------------------------------------------------
<S> <C> <C> <C>
Andrew R. Martin. . 37 Chief Technology Officer since Prior to joining the Corporation in January 1996,
March 1996. from April 1994 to December 1995, Dr. Martin was
a chief programmer in the DCE Client/Server
division of Trilogy Software, Inc., an enterprise
software company.
Douglas A. Jimerson 48 Vice President of Publishing and Prior to April 1996, Mr. Jimerson worked for over
Editor-in-Chief since April 1996. 19 years with Meredith Corporation, most recently as
Editor-in-Chief of Home Garden, a national
gardening publication, and prior to Home Garden, as
Executive Garden Editor of Better Homes and
Gardens from 1977 to 1995.
Joel P. Toner . . . 42 Vice President of Business Prior to joining the Corporation, from 1988 to
Development since September 1999. September 1999, Mr. Toner served as Group
Publisher of Primedia Inc., a publishing company.
Jana D. Wilson. . . 35 Chief Financial Officer of the Ms. Wilson served as the Corporation's Controller
Corporation since August 1998. from February 1998 to August 1998. Prior to
joining the Corporation, from March 1994 to
December 1997, Ms. Wilson served as Controller of
Gadzooks, Inc., a specialty retailer of casual apparel
for teenagers.
6
<PAGE>
Bradley J. Clark. . 35 Vice President of Enterprise Mr. Clark served as the Corporation's Supply Chain
Development since February 1999. Manager from September 1998 to February 1999.
Prior to joining the Corporation, from February 1998
to September 1998, Mr. Clark served as Pre-Sales
Software Consultant to i2 Technologies, a consultant
to electronic businesses. From August 1996 to
February 1998, Mr. Clark served as Consulting
Manager to Trilogy Software, Inc., an enterprise
software company. Mr. Clark served as Software
Consultant to Cap Gemini Sogeti, an enterprise
software company, from June 1993 to August 1996.
Dionn M. Schaffner. 29 Vice President of Marketing since Prior to joining the Corporation, Ms. Shaffner served
February 1999. as Director of Operations for Comlink Information
Systems, Inc., a business management software
development company, from September 1997 to February
1999. From August 1996 to September 1997, Ms. Shaffner
served as a Senior Consultant of Deloitte & Touche
Consulting Group.
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's directors and executive officers,
and persons who own more than 10% of a registered class of the Corporation's
equity securities, to file with the Securities and Exchange Commission (the
"Commission") initial reports of beneficial ownership on Form 3 and reports of
changes in beneficial ownership of the Corporation's equity securities on Form 4
or 5. The rules promulgated by the Commission under section 16(a) of the
Exchange Act require those persons to furnish the Corporation with copies of all
reports filed with the Commission pursuant to section 16(a). Based solely upon
a review of such forms actually furnished to the Corporation, and written
representations of certain of the Corporation's directors and executive officers
that no forms were required to be filed, all directors, executive officers and
10% stockholders have filed with the Commission on a timely basis all reports
required to be filed under section 16(a) of the Exchange Act, except Mr. Toner
reported on a June 2000 Form 5 report a purchase that occurred in September 1999
and Mr. Martin reported on a June 2000 Form 5 report stock option exercises that
occurred in October 1999, December 1999 and January 2000.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION. The following table sets forth certain
information for the years indicated below concerning compensation paid to,
earned by or awarded to the Corporation's Chief Executive Officer and the four
other most highly compensated executive officers in fiscal year 2000
(collectively, the "named executive officers").
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
---------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)
----------------------------------------- ----------- ---------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Clifford A. Sharples. . . . . . . . . . . 2000 130,100 -- 250 --
Chief Executive Officer and President 1999 113,670 -- 68,200 --
James N. O'Neill. . . . . . . . . . . . . 2000 130,100 -- 250 --
Chief Operating Officer 1999 113,670 -- 68,200 --
Lisa W.A. Sharples. . . . . . . . . . . . 2000 130,100 -- 250 --
Chief Merchandising and 1999 113,670 -- 68,200 12,432 (2)
Marketing Officer
Andrew R. Martin. . . . . . . . . . . . . 2000 182,600 -- 25,250 156,110 (3)
Chief Technology Officer 1999 143,000 -- 40,200 68,150 (3)
Joel P. Toner . . . . . . . . . . . . . . 2000 143,857 60,000 (1) 250 --
Vice President of Business Development
<FN>
(1) Represents compensation received as a signing bonus.
(2) Represents payments for tax preparation.
(3) Represents compensation upon the exercise of a nonstatutory stock option.
</TABLE>
OPTION GRANTS. The following table provides certain information regarding stock
options granted to the named executive officers in fiscal year 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM ($) (4)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% 10%
-------------------- ------------- ------------ -------- ------------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Clifford A. Sharples 250 (1) * 12.38 December 20, 2009 $ 1,946 $ 4,933
James N. O'Neill 250 (1) * 12.38 December 20, 2009 1,946 4,933
Lisa W.A. Sharples 250 (1) * 12.38 December 20, 2009 1,946 4,933
Andrew R. Martin 250 (1) * 12.38 December 20, 2009 1,946 4,933
25,000 (2) 2.2 6.81 February 15, 2010 107,069 271,335
Joel P. Toner 250 (1) * 12.38 December 20, 2009 1,946 4,933
80,000 (3) 7.1 12.00 September 14, 2009 603,739 1,529,993
<FN>
* Less than 1%.
(1) 25% of the option vests on December 20, 2000 and an additional 2.083% vests monthly for the
36 months thereafter.
(2) 20% of the option vests on February 15 of each year from 2001 to 2005.
(3) 20% of the option vests on September 14 of each year from 2000 to 2004.
(4) The dollar amounts under these columns are the result of theoretical calculations at 5% and
10% rates set by the Commission, and therefore are not intended to forecast possible future
appreciation, if any, in the Common Stock.
</TABLE>
8
<PAGE>
FISCAL YEAR-END OPTION VALUES. The following table provides certain information
regarding options held by the named executive officers at June 30, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS OPTIONS/SARS AT
AT FISCAL YEAR-END (#) FISCAL YEAR END ($)(2)
---------------------- ----------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
-------------------- --------------- ---------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Clifford A. Sharples -- -- 27,528/70,842 39,292/67,867
James N. O'Neill -- -- 27,560/70,890 39,362/67,971
Lisa W.A. Sharples -- -- 27,528/70,842 39,292/67,867
Andrew R. Martin 26,120 275,693 8,000/88,850 --/56,739
Joel P. Toner -- -- --/80,250 --/--
<FN>
(1) Value realized is equal to the fair market value of the purchased shares on the date of exercise,
less the exercise price paid for such shares.
(2) Calculated based on closing sale price of $2.375 per share on June 30, 2000.
</TABLE>
EMPLOYMENT AGREEMENTS
On July 12, 1999, the Corporation entered into separate employment
agreements with Clifford A. Sharples, James N. O'Neill and Lisa W.A. Sharples.
Each of these employment agreements has a term of three years and each provides
for a base salary of $130,000 per year. The employment agreements also provide
that Messrs. Sharples and O'Neill and Ms. Sharples are eligible to participate
in a cash bonus program and in any other employee benefit programs for which
other senior executives of the Corporation are generally eligible. Under the
employment agreements, the Corporation may terminate the executive officer's
employment upon the executive officer's death or disability or if the Board of
Directors determines that termination is in the Corporation's best interest.
Each executive officer may resign at any time. If the Corporation terminates
employment without cause, or if there is a constructive termination, the
executive officer is entitled to receive payment of his or her base salary and
to continue to receive other employee benefits for 12 months from the date of
termination. If employment is terminated for any other reason, the executive
officer is not entitled to receive any base salary or other benefits for periods
after the termination date. If the Corporation experiences a change of control
at any time more than six months after the date of the employment agreement, all
options held by Messrs. Sharples or O'Neill or by Ms. Sharples will immediately
vest. Each of Clifford A. Sharples, James N. O'Neill and Lisa W.A. Sharples has
also entered into a nondisclosure agreement under which each executive officer
has agreed not to compete with the Corporation during employment and for a
period of two years following termination of employment and has agreed to
maintain the confidentiality of the Corporation's proprietary information and
trade secrets.
On March 1, 1996, the Corporation entered into an employment agreement with
Andrew R. Martin. This employment agreement may be terminated by either party
for any reason with 30 days' prior written notice and provides for a base salary
of $100,000 per year. The employment agreement also provides that Mr. Martin is
eligible to receive an annual cash bonus of $20,000 and other benefits as are
generally made available to the Corporation's executive-level employees.
Pursuant to the employment agreement, Mr. Martin has agreed not to compete with
the Corporation during employment and for a period of two years following
termination of employment and has agreed to maintain the confidentiality of the
Corporation's proprietary information and trade secrets.
9
<PAGE>
On September 14, 1999, the Corporation entered into an employment agreement
with Joel P. Toner. The employment agreement may be terminated by either party
for any reason with 30 days' prior written notice and provides for a base salary
of $200,000 per year. The employment agreement also provides that Mr. Toner is
eligible to receive other benefits as are generally made available to the
Corporation's employees. Under the employment agreement, the Corporation may
terminate Mr. Toner's employment upon Mr. Toner's death or disability or for
cause. Mr. Toner may resign at any time. If the Corporation terminates Mr.
Toner's employment without cause, or if there is a constructive termination, Mr.
Toner is entitled to receive payment of his base salary and to continue to
receive other employee benefits for up to six months from the date of
termination. If employment is terminated for any other reason, Mr. Toner is not
entitled to receive any base salary or other benefits for periods after the
termination date. If the Corporation experiences a change of control at any
time more than six months after the date of the employment agreement, all
options held by Mr. Toner will immediately vest. Pursuant to the employment
agreement, Mr. Toner has agreed not to compete with the Corporation during
employment and for a period of two years following termination of employment and
has agreed to maintain the confidentiality of the Corporation's proprietary
information and trade secrets.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of shares of Common Stock as of August 31, 2000 by (i) each director
and named executive officer (as defined above), (ii) all directors and executive
officers as a group, and (iii) each person or other entity known by the
Corporation to beneficially own more than 5% of the outstanding Common Stock.
The Corporation has determined beneficial ownership in accordance with the
rules of the Securities and Exchange Commission. Unless otherwise indicated,
the persons and entities included in the table have sole voting and investment
power with respect to all shares beneficially owned, subject to community
property laws where applicable. Shares of Common Stock subject to options that
are either currently exercisable or exercisable within 60 days of August 31,
2000 are deemed to be outstanding and to be beneficially owned by the option
holder for the purpose of computing the percentage ownership of the option
holder. However, these shares are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.
<TABLE>
<CAPTION>
TOTAL NUMBER
OF SHARES
BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED OF CLASS
----------------------------------------------------------------- ------------ --------
<S> <C> <C>
Douglas J. Stern. . . . . . . . . . . . . . . . . . . . . . . . . 2,690,154 14.9
Entities affiliated with The
E.W. Scripps Company (1)
Steven J. Dietz . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,998 9.0
Entities affiliated with Global Retail
Partners, L.P. (2)
John D. Thornton. . . . . . . . . . . . . . . . . . . . . . . . . 1,452,611 8.2
Entities affiliated with Austin
Ventures (3)
Gerald R. Gallagher . . . . . . . . . . . . . . . . . . . . . . . 1,127,127 6.3
Entities affiliated with Oak Investment
Partners (4)
Entities affiliated with Attractor LP (5) . . . . . . . . . . . . 1,194,682 6.7
BT&T Focus 4 Fund Public Limited
Company and BT&T
Telekommunikations Und
Technologie AG (6) . . . . . . . . . . . . . . . . . . . . . . . 1,347,000 7.6
10
<PAGE>
Entities affiliated with Patricof & Co.
Ventures, Inc. (7) . . . . . . . . . . . . . . . . . . . . . . . 909,090 5.1
Pequot Capital Management, Inc. (8) . . . . . . . . . . . . . . . 1,261,277 7.1
Clifford A. Sharples (9). . . . . . . . . . . . . . . . . . . . . 309,964 1.7
James N. O'Neill (10) . . . . . . . . . . . . . . . . . . . . . . 300,546 1.7
Lisa W.A. Sharples (11) . . . . . . . . . . . . . . . . . . . . . 309,964 1.7
Andrew R. Martin (12) . . . . . . . . . . . . . . . . . . . . . . 207,406 1.2
Joel P. Toner (13). . . . . . . . . . . . . . . . . . . . . . . . 17,000 *
All directors and executive officers as a group (13 persons) (14) 8,118,330 44.2
<FN>
* Represents beneficial ownership of less than 1%.
(1) Represents (i) 1,990,854 shares held of record by Scripps Ventures, LLC,
including 275,862 shares issuable upon exercise of outstanding warrants, and (ii) 699,300
shares held of record by Scripps Howard Broadcasting Company d/b/a Home & Garden
Television, Inc. Mr. Stern disclaims beneficial ownership of these shares. The address
for Mr. Stern and each of these entities is 200 Madison Avenue, New York, New York
10016.
(2) Represents (i) 1,025,834 shares held of record by Global Retail Partners, L.P.,
(ii) 306,677 shares held of record by DLJ Diversified Partners, L.P., (iii) 113,519
shares held of record by DLJ Diversified Partners-A, L.P., (iv) 66,687 shares held of
record by GRP Partners, L.P., (v) 70,626 shares held of record by Global Retail Partners
Funding, Inc., and (vi) 17,655 shares held of record by DLJ ESC II, L.P. Mr. Dietz is a
Principal of Global Retail Partners, L.P. Each of the foregoing entities is an affiliate
of Global Retail Partners, L.P., whose parent company is AXA Financial Inc. Mr. Dietz
disclaims beneficial ownership of these shares except to the extent of his pecuniary
interest in such shares. The address for Mr. Dietz and each of these entities is 2121
Avenue of the Stars, Suite 1630, Los Angeles, California 90067. The address for AXA
Financial Inc. is 1290 Avenue of the Americas, New York, New York 10104.
(3) Represents (i) 468,886 shares held of record by Austin Ventures IV-A, L.P.,
including 7,420 shares issuable upon exercise of outstanding warrants, and (ii) 983,725
shares held of record by Austin Ventures IV-B, L.P., including 15,568 shares issuable
upon exercise of warrants. Mr. Thornton has shared voting and investment power over all
of these shares, and he disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest in such shares. The address for Mr. Thornton and each
of these entities is 1300 Norwood Tower, 114 West Seventh Street, Austin, Texas 78701.
(4) Represents (i) 1,099,515 shares held of record by Oak Investment Partners VII,
Limited Partnership, including 134,552 shares issuable upon exercise of outstanding
warrants, and (ii) 27,612 shares held of record by Oak VII Affiliates Fund, Limited
Partnership, including 3,379 shares issuable upon exercise of outstanding warrants. Mr.
Gallagher has shared voting and investment power over all of these shares, and he
disclaims beneficial ownership of these shares except to the extent of his pecuniary
interest in such shares. The address for Mr. Gallagher and each of these entities is
4550 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402.
(5) Attractor LP and related entities (collectively, "Attractor"), 1110 Burlingame
Avenue, Suite 211, Burlingame, California 94010, filed a Schedule 13G dated September 27,
1999, reporting that as of September 27, 1999 it was the beneficial owner of 1,194,682
shares of Common Stock. The shares of Common Stock beneficially owned by Attractor
include (i) 1,032,398 shares held of record by Attractor LP, with sole voting and
investment power as to all of such shares, (ii) 68,304 shares held of record by Attractor
Institutional LP, with sole voting and investment power as to all of such shares, (iii)
71,580 shares held of record by Attractor Ventures LLC, with sole voting and investment
power as to all of such shares and shared voting and investment power as to an additional
1,100,702 shares, and (iv) 22,400 shares held of record by Attractor Offshore Ltd., with
sole voting and investment power as to all of such shares (Attractor Investment
Management, Inc. may be deemed to share voting and investment power as to all of such
shares). Gigi Brisson and Harvey Allison may be deemed to share voting and investment
power as to all of the shares held by Attractor, and they disclaim beneficial ownership
of such shares.
11
<PAGE>
(6) BT&T Focus 4 Fund Public Limited Company, Grand Canal House, 1 Upper Grand Canal
Street, Dublin 4, Ireland, and BT&T Telekommunikations Und Technologie AG,
Roetelistrasse, Bufour Park 16, St. Gallen, Switzerland 9000, filed a Schedule 13G dated
August 3, 2000, reporting that as of August 3, 2000 it was the beneficial owner of
1,347,000 shares of Common Stock with shared voting and investment power as to all of
such shares.
(7) Patricof & Co. Ventures, Inc. and related entities (collectively, "Patricof"),
445 Park Avenue, 11th Floor, New York, New York 10022, filed a Schedule 13G dated
February 4, 2000, reporting that as of February 4, 2000 it was the beneficial owner of
909,090 shares of Common Stock. The shares of Common Stock beneficially owned by
Patricof include (i) 746,181 shares held of record by APA Excelsior V, L.P., with sole
voting and investment power as to all of such shares, (ii) 153,846 shares held of record
by The P/A Fund III, L.P., with sole voting and investment power as to all of such
shares, and (iii) 9,063 shares held of record by Patricof Private Investment Club II,
L.P., with sole voting and investment power as to all of such shares. Alan Patricof may
be deemed to have sole voting and investment power as to all of the shares held by
Patricof, and he disclaims beneficial ownership of such shares.
(8) Pequot Capital Management, Inc., 500 Nyala Farm Road, Westport, Connecticut
06880, filed a Schedule 13G dated February 11, 2000, reporting that as of February 11,
2000 it was the beneficial owner of 1,261,277 shares of Common Stock, with sole voting
and investment power as to all of such shares.
(9) Includes 35,048 shares subject to exercise of stock options held by Mr. Sharples.
Excludes (i) 274,916 shares held of record by Mr. Sharples' spouse and (ii) 35,048 shares
subject to exercise of stock options held by Mr. Sharples' spouse.
(10) Includes 35,080 shares subject to exercise of stock options.
(11) Includes 35,048 shares subject to exercise of stock options held by Ms.
Sharples. Excludes (i) 274,916 shares held of record by Ms. Sharples' spouse and (ii)
35,048 shares subject to exercise of stock options held by Ms. Sharples' spouse.
(12) Includes 8,000 shares subject to exercise of stock options.
(13) Includes 16,000 shares subject to exercise of stock options.
(14) Includes 209,536 shares subject to exercise of stock options and 436,781 shares
issuable upon exercise of outstanding warrants.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The E.W. Scripps Company, through its wholly-owned subsidiaries, Scripps
Ventures LLC and Scripps Howard Broadcasting Company d/b/a Home & Garden
Television ("HGTV"), beneficially owns 14.9% of the outstanding Common Stock of
the Corporation as of August 31, 2000. Douglas R. Stern, a director of the
Corporation, is the President and Chief Executive Officer of United Media, a
newspaper syndication company and wholly-owned subsidiary of The E.W. Scripps
Company.
On May 24, 1999, 699,300 shares of the Corporation's Series E Preferred
Stock were purchased by HGTV for a total purchase price of $5,000,000, or $7.15
per share. Approximately $1,500,000 of the purchase price was paid in the form
of an advertising credit, of which the Corporation has used approximately
$1,243,000 as of June 30, 2000.
12
<PAGE>
Kenneth Sharples, the brother of Clifford A. Sharples and brother-in-law of
Lisa W.A. Sharples, directors of the Corporation, has provided legal services to
the Corporation. The Corporation incurred expenses of $61,752 during the
Corporation's fiscal year ended June 30, 2000 for these legal services.
Green Cheetah, Inc. ("Green Cheetah") was formed in the first quarter of
fiscal 2001 to pursue software development opportunities. Green Cheetah is
currently proceeding with its first software application project, which involves
developing computer software designed to enhance database performance. The
Corporation owns 80% of the outstanding common stock of Green Cheetah. Green
Cheetah issued restricted stock to the following officers and/or directors of
the Corporation: Andrew R. Martin, Chief Technology Officer of the Corporation,
was issued 10% of Green Cheetah's outstanding common stock; Clifford A.
Sharples, Chief Executive Officer, President and a director of the Corporation,
was issued 3.33% of Green Cheetah's outstanding common stock; Lisa W.A.
Sharples, Chief Merchandising and Marketing Officer and a director of the
Corporation, was issued 3.33% of Green Cheetah's outstanding common stock; and
James N. O'Neill, Chief Operating Officer and a director of the Corporation, was
issued 3.34% of Green Cheetah's outstanding common stock. In the first quarter
of fiscal 2001, Green Cheetah borrowed $300,000 from the Corporation pursuant to
a demand promissory note.
The Corporation believes that all of the transactions set forth above were
made on terms no less favorable to the Corporation than could have been obtained
from unaffiliated third parties. Any future transactions, including loans,
between the Corporation and its officers, directors and principal stockholders
and their affiliates will be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested directors, and will be
on terms no less favorable to the Corporation than could be obtained from
unaffiliated third parties.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Form 10-K/A to be
signed on its behalf by the undersigned, thereunto duly authorized.
GARDEN.COM, INC.
By /s/ Clifford A. Sharples
---------------------------------------------
Clifford A. Sharples, Chief Executive Officer
Date: October 30, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Form 10-K/A has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Clifford A. Sharples President, Chief Executive October 30, 2000
------------------------ Officer (Principal Executive
Clifford A. Sharples Officer) and Director
/s/ Jana D. Wilson Chief Financial Officer (Principal October 30, 2000
------------------------ Financial and Accounting
Jana D. Wilson Officer)
* Director October 30, 2000
------------------------
Steven J. Dietz
* Director October 30, 2000
------------------------
Gerald R. Gallagher
* Director October 30, 2000
------------------------
James N. O'Neill
* Director October 30, 2000
------------------------
Lisa W.A. Sharples
* Director October 30, 2000
------------------------
Douglas R. Stern
* Director October 30, 2000
------------------------
John D. Thornton
/s/ Clifford A. Sharples October 30, 2000
------------------------
Clifford A. Sharples
* Attorney-in-Fact
</TABLE>
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