<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Good Guys, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
The Good Guys, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
THE GOOD GUYS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 24, 1996
The Annual Meeting of Shareholders of The Good Guys, Inc. will be held at
the A.P. Giannini Auditorium, Bank of America Building, located at 555
California Street, San Francisco, California on Wednesday, January 24, 1996, at
10:30 A.M., for the following purposes:
1. To elect Directors to serve for the ensuing year and until their
successors are duly elected and qualified.
2. To ratify the selection of Deloitte & Touche LLP as independent
certified public accountants for the Company.
3. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on December 13, 1995
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
BY ORDER OF THE
BOARD OF DIRECTORS
Robert A. Gunst
ROBERT A. GUNST
President and Chief Executive Officer
San Francisco, California
December 21, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE. IF
YOU ARE ABLE TO ATTEND THE MEETING, AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU
MAY DO SO AT ANY TIME BEFORE THE PROXY IS EXERCISED.
<PAGE> 3
THE GOOD GUYS, INC.
7000 MARINA BOULEVARD
BRISBANE, CALIFORNIA 94005-1840
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of The
Good Guys, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Shareholders to be held at the A.P. Giannini Auditorium, Bank of
America Building, located at 555 California Street, San Francisco, California,
on Wednesday, January 24, 1996, at 10:30 A.M.
Any proxy given may be revoked by a shareholder at any time before it is
voted by filing with the Secretary of the Company a notice in writing revoking
it, or by duly executing a proxy bearing a later date. Proxies may also be
revoked by any shareholder present at the meeting who expresses a desire to vote
his or her shares in person. Subject to any such revocation, all shares
represented by properly executed proxies which are received prior to the meeting
will be voted in accordance with the specifications on the proxy. If no
specification is made with regard to a proposal set forth in the proxy, the
shares will be voted in favor of the proposal.
A copy of the Annual Report of the Company for its fiscal year ended
September 30, 1995 is being mailed to shareholders with this proxy statement.
The approximate date on which this proxy statement and the accompanying proxy
are being sent to shareholders is December 21, 1995.
VOTING
Only shareholders of record on December 13, 1995 (the "Record Date"), will
be entitled to notice of and to vote at the meeting. At the close of business on
the Record Date, the Company had 13,581,416 shares of Common Stock outstanding.
Each holder of record of Common Stock on the Record Date is entitled to one vote
per share on each matter to be considered at the Annual Meeting of Shareholders.
A majority of all shares represented in person or by proxy at the Annual Meeting
constitutes a quorum for the transaction of business at the meeting. Abstentions
are considered as shares present and entitled to vote and therefore will have
the same effect as a vote against a matter presented at the meeting. Brokers who
hold shares in street name for customers have the authority to vote on certain
matters; with respect to any other matters, shares as to which brokers have not
received discretionary voting authority from their customers are considered as
shares not entitled to vote with respect to such matters, but are counted toward
the establishment of a quorum.
ELECTION OF DIRECTORS
Directors are elected to hold office until the next annual shareholders'
meeting or until their successors have been elected. Unless otherwise instructed
by the shareholder, it is intended that the shares represented by the enclosed
proxy will be voted for the nominees named below. Although management
anticipates that all of the nominees will be able to serve, if any nominee is
unable or unwilling to serve at the time of the meeting, the proxy may be voted
for a substitute nominee chosen by management.
All of the nominees are presently directors of the Company and no nominee
has any family relationship with any other nominee or executive officer. The
beneficial ownership of the Company's stock by the nominees is set forth under
"Certain Shareholders."
<PAGE> 4
The following table and biographical summaries set forth the names and ages
of the nominees, their principal occupations at present, the positions and
offices held by each of them with the Company in addition to the position as
director, and the period during which each of them has served as a director of
the Company.
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
AGE SINCE
NOMINEE --- ------------
------- <C> <C>
Ronald A. Unkefer................................................. 51 1976
Stanley R. Baker(1)............................................... 51 1976
Robert A. Gunst................................................... 47 1986
Russell M. Solomon(1)(2).......................................... 70 1986
W. Howard Lester(1)(2)............................................ 60 1990
John E. Martin(1)(2).............................................. 50 1990
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Ronald A. Unkefer founded the Company's business in 1973, has been the
Chairman of the Board of the Company since it was incorporated in 1976, and was
its Chief Executive Officer until his resignation from that position in January
1993. Mr. Unkefer is also President of First Broadcasting Company, which is a
San Francisco Bay area communications company.
Stanley R. Baker has been a director of the Company since its incorporation
in 1976 and was Secretary of the Company from 1976 until his resignation as an
employee of the Company in August 1991. Mr. Baker became Vice President, Video
Merchandising in 1986, and Vice President, Co-Head of Merchandising in 1990.
From August 1991 to the present Mr. Baker has been a private investor.
Robert A. Gunst became the President and Chief Operating Officer of the
Company in May 1990 and its Chief Executive Officer in January 1993.
Russell M. Solomon is the founder and President of MTS Incorporated (dba
Tower Records).
W. Howard Lester has been Chairman and Chief Executive Officer of
Williams-Sonoma, Inc., a publicly-held specialty retailer, since 1987. Mr.
Lester is also a director of Conner Peripherals, Inc.
John E. Martin has been Chief Executive Officer of Taco Bell, a
wholly-owned subsidiary of PepsiCo, since 1983 and became Chairman in June 1994.
Mr. Martin is also a director of Williams-Sonoma, Inc.
The Board of Directors has established an Audit Committee and a
Compensation Committee, but has not established a Nominating Committee. The
Audit Committee met two times during fiscal 1995. Responsibilities of the Audit
Committee include (1) reviewing financial statements and consulting with the
independent auditors concerning the Company's financial statements, accounting
and financial policies, and internal controls, (2) reviewing the scope of the
independent auditors' activities and the fees of the independent auditors, and
(3) maintaining good communications among the Committee, the Company's
independent auditors and the Company's management on accounting matters. The
Compensation Committee met two times during fiscal 1995. The function of the
Compensation Committee is to approve stock plans and option grants and review
and make recommendations to the Board of Directors regarding executive
compensation and benefits.
The total number of meetings of the Board of Directors during fiscal 1995
was four. Each of the incumbent directors attended at least 75% of the aggregate
of (1) the total number of meetings of the Board during the year and (2) the
total number of meetings of all committees of the Board on which he served.
2
<PAGE> 5
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive additional
compensation for their service as directors. During the fiscal year ended
September 30, 1995, directors who were not employees of the Company were
compensated at the rate of $16,000 per year, plus $2,000 per day for each
meeting of the Board of Directors attended. No additional compensation is paid
to directors for their attendance at meetings of Board committees. Directors are
reimbursed for expenses incurred in attending meetings. Mr. Unkefer is serving
as an employee of the Company at a salary of $75,000 per year. Under the
Company's 1985 Stock Option Plan, each person who is not an employee of the
Company, upon becoming a member of the Board of Directors for the first time, is
awarded a non-qualified option to purchase 5,000 shares of Common Stock of the
Company, and immediately after the completion of each annual meeting of the
shareholders of the Company, each non-employee member of the Board is awarded a
non-qualified option to purchase 1,000 shares of Common Stock. Such options have
an exercise price per share equal to the fair market value of the shares of
Common Stock on the date of award, and vest in four equal annual installments
from the date of grant. Under this provision, each of Messrs. Baker, Lester,
Martin and Solomon was granted an option to purchase 1,000 shares of Company
Common Stock at an exercise price of $12.625 per share on January 25, 1995. The
1985 Stock Option Plan expired in September 1995 and a similar provision is
included in the 1994 Stock Incentive Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows specific compensation information, for the fiscal
years ending September 30, 1995, 1994 and 1993, for the Company's Chief
Executive Officer and the next four most highly compensated executive officers
as of September 30, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------- -------------
OTHER ANNUAL STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) (NUMBER)
- -------------------------------------------- ---- -------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Robert A. Gunst............................. 1995 $450,000 $ 80,000 $18,240 50,000
President and 1994 425,000 318,750 19,544 50,000
Chief Executive Officer 1993 381,000 0 18,343 39,500
Thomas A. Hannah............................ 1995 $225,000 $ 32,000 $11,890 20,000
Senior Vice President, 1994 205,000 150,000 48,190 20,000
Operations(2) 1993 60,000 20,000 34,638 15,000
Robert E. Baird............................. 1995 $205,000 $ 30,000 $14,567 18,000
Senior Vice President, 1994 104,000 85,000 7,163 10,000
Marketing and Merchandising(3) 1993 0 0 0 0
William C. Curley........................... 1995 $200,000 $ 23,000 $23,397 15,000
Vice President, 1994 190,000 114,000 22,484 15,000
MIS and Operations 1993 180,000 0 20,811 9,000
Gregory L. Steele........................... 1995 $160,000 $ 38,750 $ 9,746 10,000
Vice President, 1994 150,000 115,000 8,529 10,000
Real Estate 1993 136,000 12,000 10,521 6,000
</TABLE>
- ---------------
(1) Consists of perquisites and other personal benefits, including long term
disability insurance premiums paid by the Company.
(2) Mr. Hannah became an employee of the Company in June 1993. Other annual
compensation for Mr. Hannah includes $34,942 and $29,952 in fiscal years
1994 and 1993, respectively, for payments made in consideration of his
becoming an employee of the Company.
(3) Mr. Baird became an employee of the Company in February 1994.
3
<PAGE> 6
STOCK OPTION TABLES
The following table shows information concerning stock options granted to
the individuals named in the Summary Compensation Table above during the fiscal
year ended September 30, 1995.
OPTION GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
-------------------------------------------------- AT ASSUMED
% OF TOTAL RATES OF
OPTIONS STOCK PRICE
NUMBER OF GRANTED TO APPRECIATION
SECURITIES EMPLOYEES FOR OPTION
UNDERLYING IN EXERCISE TERM(2)(3)
OPTIONS FISCAL PRICE EXPIRATION --------------------
NAME GRANTED(1) YEAR ($/SH) DATE 5% 10%
- ------------------------------ ---------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Gunst............... 50,000 14.78% $12.00 11/14/04 $377,337 $956,245
Thomas A. Hannah.............. 20,000 5.91% $12.00 11/14/04 $150,935 $382,498
Robert E. Baird............... 18,000 5.32% $12.00 11/14/04 $135,841 $344,248
William C. Curley............. 15,000 4.43% $12.00 11/14/04 $113,201 $286,874
Gregory L. Steele............. 10,000 2.95% $12.00 11/14/04 $ 75,467 $191,249
</TABLE>
- ---------------
(1) All of such options were granted pursuant to the 1985 Stock Option Plan. The
options are non-qualified stock options that were granted at 100% of the
fair market value of the Common Stock on the date of grant. The options
expire ten years from the date of grant, unless otherwise earlier terminated
upon the occurrence of certain events related to termination of employment.
The options vest 25% per year on each of the first four anniversaries of the
option grant date. Additional vesting of the right to exercise the options
ceases when the optionee's employment terminates.
(2) The 5% and the 10% assumed rates of appreciation applied to the option
exercise price over the ten-year option term are prescribed by the rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future price of Common Stock. If the Company's
Common Stock does not appreciate relative to the exercise price, the named
executive officers will receive no benefit from the options.
(3) At assumed annual rates of appreciation of 5% and 10%, the aggregate
potential realizable increase in value for shares held by all stockholders
as of September 30, 1995 for the ten-year period from November 14, 1994 to
November 14, 2004 would be $102,495,354 and $259,743,352.
4
<PAGE> 7
The following table shows the number of shares covered by both exercisable
and non-exercisable stock options held by the individuals named in the Summary
Compensation Table above as of September 30, 1995 and the value of unexercised
options as of that date.
AGGREGATE OPTIONS EXERCISED(1) IN FISCAL 1995
AND SEPTEMBER 30, 1995 OPTION VALUES
<TABLE>
<CAPTION>
VALUE(2) OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT 9/30/95 9/30/95
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Gunst.......... -- -- 236,750 114,750 $ 659,281 $ 2,031
Thomas A. Hannah......... -- -- 12,500 42,500 $ 2,812 $ 2,812
Robert E. Baird.......... -- -- 2,500 25,500 -- --
William C. Curley........ -- -- 30,875 32,125 $ 58,375 $ 562
Gregory L. Steele........ -- -- 17,255 21,625 $ 42,571 $ 375
</TABLE>
- ---------------
(1) No options were exercised by any of the named executive officers during
fiscal 1995.
(2) The value of unexercised options is calculated by multiplying the number of
options outstanding by the difference between the option exercise price and
the September 30, 1995 closing price of $11.375 per share of the Company's
Common Stock as reported on the Nasdaq National Market. Options with an
exercise price in excess of the September 30, 1995 closing price were not
included in this calculation.
EMPLOYMENT AGREEMENTS
Robert A. Gunst is employed at will by the Company at a minimum annual
salary of $275,000 per year (his present salary being at the rate of $475,000
per year). The Company may terminate Mr. Gunst's employment at any time with or
without cause, provided that if the termination is without cause, Mr. Gunst
would be entitled to the payment of an amount equal to his then-current annual
base salary plus a pro-rated bonus amount.
On June 1, 1993 the Company entered into an employment agreement with
Thomas A. Hannah, Senior Vice President, Operations, under which he will receive
an annual salary of not less than $195,000. In the event the Company terminates
Mr. Hannah's employment without cause, the Company will continue to pay Mr.
Hannah's base salary for 12 months.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee (the "Committee") of the Board of Directors is
composed entirely of outside directors, none of whom is or was an officer or
employee of the Company or any of its subsidiaries. The Committee is responsible
for establishing the Company's policies and administering the Company's programs
governing stock incentive plans and executive compensation, including annual
salaries, bonuses (if any), and awards under stock and long-term cash incentive
plans.
The Committee has engaged a nationally recognized compensation and benefits
consulting firm to assist the Committee and the Company in reviewing the
compensation program of the Company's executive officers.
The objectives of the Company's executive compensation program are to
provide the following:
-- Overall compensation opportunities that are competitive within the
Company's executive labor markets and that enable the Company to attract
and retain highly talented, experienced executives capable of furthering
the Company's objectives;
-- Annual cash incentive compensation tied primarily to the overall
financial performance of the Company, but also recognizing business unit
and individual performance as appropriate; and
5
<PAGE> 8
-- Long term incentives which directly align the financial interests of
management with those of the shareholders and which provide an incentive
to remain in the Company's employ.
To achieve compensation opportunities that are competitive, the Company focuses
on compensation survey data for retailers of comparable size. Although not
determinative, the Company takes into consideration 75th percentile competitive
executive pay levels and average annual percentage increases in executive
compensation granted by comparable companies.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation, long-term incentive compensation in
the form of stock options, and various other common benefits.
BASE SALARY
Base salary levels for the Company's executive officers are competitively
set relative to companies in the Company's industry and other comparable
companies. In determining salaries, the Committee also takes into account the
Company's financial performance and the executive's demonstrated skill,
experience and performance.
ANNUAL INCENTIVE COMPENSATION
The Company's system of annual cash incentive compensation for its
executive officers takes the form of cash bonuses that are determined by overall
Company performance as measured by earnings per share in relation to budgeted
earnings per share, and, where appropriate, individual performance. The target
bonus for an executive officer (other than the Chief Executive Officer)
determined by earnings per share is multiplied by a percentage, ranging from
zero to 125%, that can be adjusted by the Chief Executive Officer based on his
assessment of the officer's job performance. For officers with responsibility
for sales, merchandising, real estate and store operations, a portion of their
annual bonus is directly tied to the achievement of specific financial or other
goals developed at the beginning of the year. No bonuses are paid under the
Company's plans in the event the Company does not achieve at least 75% of its
budgeted earnings per share, which was the case in fiscal 1993. The Chairman of
the Board is not eligible for bonus payments under the Company's plans.
STOCK OPTION PROGRAM
The stock option program is the Company's principal long-term incentive
plan for executive officers and key managers. The objectives of the program are
to align executive and shareholder long-term interests by creating a strong and
direct link between executive compensation and shareholder return, and to enable
executives to develop and maintain a significant, long-term ownership position
in the Company's Common Stock. The Committee attempts to grant options
sufficient to deliver competitive gains assuming the Company's stock price
performance is competitive, but the Committee also considers the dilutive impact
of options granted.
Stock options are granted at an option price equal to the fair market value
of the Company's Common Stock on the date of grant, have ten-year terms and vest
ratably over a four-year period.
BENEFITS
The Company provides benefits to the executive officers that are generally
available to Company employees.
CHIEF EXECUTIVE OFFICER COMPENSATION
After reviewing Mr. Gunst's and the Company's performance during fiscal
1994 and the other factors discussed above relative to determining salaries, it
was concluded that Gunst's salary should be raised from the annual rate of
$425,000 to the annual rate of $450,000 for fiscal 1995. In addition, after
reviewing the option
6
<PAGE> 9
grants to Mr. Gunst in the past and his present stockholdings, Mr. Gunst was
granted an option to acquire 50,000 shares of Common Stock of the Company,
exercisable at a price equal to the fair market value of the Company's stock on
the date of grant. The Committee expects to grant Mr. Gunst additional stock
options in the future, so that a portion of his annual compensation each year
will consist of new stock options.
The Committee has reviewed the total compensation of all executive officers
in fiscal 1995 and has concluded that their compensation is reasonable and
consistent with the Company's compensation philosophy and industry practice.
Section 162(m) of the Internal Revenue Code, enacted in 1993, limits the
amount of compensation a corporation may deduct as a business expense. Section
162(m) generally disallows deductions for compensation in excess of $1 million
to a company's Chief Executive Officer or to any of its four other most highly
compensated executive officers. Compensation that is "performance-based" is not
subject to that limit if certain requirements are met. The Committee does not
contemplate that there will be any nondeductible compensation for 1995 or for
1996 for any of the five executive positions in question.
The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
the Proxy Statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
W. Howard Lester
John E. Martin
Russell M. Solomon
7
<PAGE> 10
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
returns for the Company's Common Stock, the Nasdaq Stock Market (US) Index and
the Nasdaq -- Retail Trade Index, each of which assumes reinvestment of
dividends.
<TABLE>
<CAPTION>
the good Nasdaq
Measurement Period guys! Common Retail Trade Nasdaq (US)
(Fiscal Year Covered) Stock Index Index
<S> <C> <C> <C>
1990 100 100 100
1991 357 181 157
1992 109 182 176
1993 138 206 231
1994 152 203 233
1995 140 223 321
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1995, the Company opened WOW!, MULTIMEDIA SUPERSTORE, in Las
Vegas, Nevada. This 62,000 square foot store is jointly operated with Tower
Records under an Operating Agreement between the Company and Tower Records. The
Company and Tower Records have separate leases for their space in this store,
and the Operating Agreement governs the joint operation of the store. The
Company and Tower Records share equally certain expenses in connection with
operation of this store, but do not share any profits on their respective sales.
Russell M. Solomon, President of MTS Incorporated (dba Tower Records), is a
member of the Company's Board of Directors.
RATIFICATION OF SELECTION OF AUDITORS
Touche Ross & Co. commenced service as the independent certified public
accountants for the Company in 1984. Deloitte, Haskins & Sells and Touche Ross &
Co. merged, effective December 3, 1989. Representatives of Deloitte & Touche LLP
are expected to be present at the shareholders' meeting with the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
This matter is not required to be submitted for shareholder approval, but
the Board of Directors has elected to seek ratification of its selection of
independent public accountants by the affirmative vote of the holders of a
majority of the shares present and entitled to vote at the meeting. Management
has not determined what action it will take in the event the shareholders do not
ratify the selection of independent public accountants.
8
<PAGE> 11
CERTAIN SHAREHOLDERS
The following table sets forth information as of December 13, 1995, unless
otherwise noted, regarding securities ownership by (i) each person who is known
by the Company to own beneficially more than five percent of the Company's
Common Stock, (ii) each executive officer named in the Summary Compensation
Table, (iii) the directors and nominees individually, and (iv) all executive
officers and directors as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
---------------------
NAME NUMBER PERCENT
---- --------- -------
<S> <C> <C>
First Pacific Advisors(2)................................................ 1,230,000 9.1%
11400 Olympic Blvd., Suite 1200
Los Angeles, CA 90064
Fidelity Management & Research Company(2)................................ 1,218,000 9.0%
82 Devonshire Street
Boston, MA 02109
Farmers Group(2)......................................................... 700,000 5.2%
4680 Wilshire Boulevard
Los Angeles, CA 90010
Texas Teacher Retirement System(2)....................................... 700,000 5.2%
1000 Red River Street
Austin, TX 78701
Robert A. Gunst(3)(4).................................................... 369,060 2.7%
Stanely R. Baker(5)...................................................... 156,750 1.2%
Ronald A. Unkefer(6)..................................................... 139,509 1.0%
John E. Martin(7)........................................................ 72,500 *
William C. Curley(8)..................................................... 47,242 *
Gregory L. Steele(9)..................................................... 34,759 *
Thomas A. Hannah(10)..................................................... 28,837 *
Robert E. Baird(11)...................................................... 24,609 *
W. Howard Lester(12)..................................................... 24,500 *
Russell M. Solomon(13)................................................... 12,500 *
All executive officers and directors as a group (14 persons)(14)......... 1,021,784 7.2%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares.
(1) The stockholders named in the table have sole voting and investment power
with respect to all shares of stock shown as beneficially owned by them,
subject to community property laws where applicable and the information
contained in the footnotes to this table.
(2) As of June 30, 1995.
(3) Messrs. Gunst and Hannah are members of the administrative committees for
The Good Guys! Profit-Sharing Plan, the trustee of which currently holds
429,121 shares on behalf of plan participants, and The Good Guys! Deferred
Pay Plan, the trustee which currently holds 80,911 shares on behalf of plan
participants.
(4) Includes 1,052 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Gunst's account, as to which Mr. Gunst has sole
voting power, 13,956 shares held by the trustee of The Good Guys! Deferred
Pay Plan and allocated to Mr. Gunst's individual account, as to which Mr.
Gunst has sole voting power; 4,000 shares held as custodian for Mr. Gunst's
children, and 277,375 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days.
(5) Includes 22,500 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days.
(6) Includes 134 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Unkefer's account, as to which Mr. Unkefer has
sole voting power; and 139,375 shares issuable upon exercise of outstanding
stock options that are exercisable within 60 days.
9
<PAGE> 12
(7) Includes 12,500 shares issuable upon exercise of outstanding stock options
that are exercisable with 60 days.
(8) Includes 691 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Curley's account, as to which Mr. Curley has sole
voting power; and 42,000 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days.
(9) Includes 25 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Steele's account, as to which Mr. Steele has sole
voting power; and 24,880 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days.
(10) Includes 337 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Hannah's account, as to which Mr. Hannah has sole
voting power; and 22,500 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days.
(11) Includes 131 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to Mr. Baird's account, as to which Mr. Baird has sole
voting power; and 7,000 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days.
(12) Includes 12,500 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days.
(13) Includes 12,500 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days.
(14) Includes 10,095 shares held by the trustee of The Good Guys! Profit-Sharing
Plan and allocated to the individual accounts of members of the group, as
to which individuals have sole voting power; 14,773 shares held by the
trustee of The Good Guys! Deferred Pay Plan and allocated to the
individuals accounts of such members, as to which such individuals have
sole voting power; and 649,730 shares issuable upon exercise of outstanding
stock options that are exercisable within 60 days.
PROPOSALS BY SHAREHOLDERS
Proposals by shareholders of the Company intended to be presented at the
next annual meeting must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting by August
25, 1996.
EXPENSES OF SOLICITATION
The expense of preparing, assembling, printing and mailing the forms of
proxy and the material used in the solicitation of proxies will be paid by the
Company. In addition to the solicitation of proxies by use of the mails, some of
the officers, directors and regular employees of the Company, none of whom will
receive additional compensation therefor, may solicit proxies by telephone,
telegram or personal interview, the cost of which will be borne by the Company.
Arrangements will also be made for the forwarding of soliciting material by
nominees, custodians and fiduciaries to their principals.
10
<PAGE> 13
OTHER MATTERS
Management knows of no other matters which will be brought before the
meeting, but if such matters are properly presented, the proxies solicited
hereby will be voted in accordance with the judgment of the persons holding such
proxies.
BY THE BOARD OF DIRECTORS
Robert A. Gunst
ROBERT A. GUNST
President and Chief Executive Officer
San Francisco, California
December 21, 1995
11
<PAGE> 14
[RECYCLE LOGO]
<PAGE> 15
THE GOOD GUYS, INC.
DIRECTION TO TRUSTEES,
THE GOOD GUYS! PROFIT-SHARING PLAN
AND THE GOOD GUYS! DEFERRED PAY PLAN
TO: TRUSTEE, THE GOOD GUYS! PROFIT-SHARING PLAN
TRUSTEE, THE GOOD GUYS! DEFERRED PAY PLAN
I direct you as Trustee of The Good Guys! Profit-Sharing Plan and Trustee of
The Good Guys! Deferred Pay Plan, respectively, to vote as I have indicated on
the other side of this card. You will vote my shares of the Common Stock of The
Good Guys, Inc. credited to my account under the Plan(s) at the Annual Meeting
of Shareholders of The Good Guys, Inc. to be held at A.P. Giannini Auditorium,
Bank of America Building, located at 555 California Street, San Francisco,
California 94104 on Wednesday, January 24, 1996, at 10:30 A.M., and at any
adjournment thereof.
PLEASE SIGN AND DATE THE OTHER SIDE OF THIS CARD
(Please fill in the appropriate boxes on the other side)
- -------------------------------------------------------------------------------
<PAGE> 16
Please mark
/X/ your votes
as this
1. ELECTION OF DIRECTORS FOR WITHHOLD
Nominees: Ronald A. Unkefer, Stanley R. Baker, FOR ALL
Robert A. Gunst, Russell M. Solomon, / / / /
W. Howard Lester, John E. Martin.
WITHHELD FOR: To withhold authority for any
individual nominee, cross out the nominee's
name in the list above.
2. APPROVAL OF AUDITORS FOR AGAINST ABSTAIN
To ratify the selection of Deloitte & Touche LLP
as independent Certified Public Accountants for / / / / / /
the Company.
I have filled in the appropriate boxes on the card. In the
absence of any instructions from me as to any item, shares
credited to my account shall NOT be voted with respect to that
item. I may revoke my instructions prior to the time you vote.
Dated:
- ---------------------------------- ---------------------
Signature of Shareholder
Please date and sign exactly as your name appears above. If
acting as beneficiary, trustee, guardian, etc., you should so
indicate in signing. Date and promptly return this card in the
envelope provided.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THE SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
<PAGE> 17
PROXY
THE GOOD GUYS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Robert A. Gunst and Leslie S. Benson,
and each of them, with power of substitution and revocation, as the proxy or
proxies of the undersigned to represent the undersigned and vote all shares of
the Common Stock of The Good Guys, Inc. which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Shareholders of The Good
Guys, Inc. to be held at A.P. Giannini Auditorium, Bank of America Building,
located at 555 California Street, San Francisco, California 94014 on Wednesday,
January 24, 1996, at 10:30 A.M., and at any adjournment thereof, upon the
matters set forth on the reverse side and described in the accompanying Proxy
Statement and upon such other business as may properly come before the meeting
or any adjournment thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
The Annual Meeting may be held as scheduled only if a majority of the
shares outstanding are represented at the meeting by attendance or proxy.
Accordingly, please complete this proxy and return it promptly in the enclosed
envelope.
COMMENTS OR ADDRESS CHANGE (PLEASE MARK COMMENT/ADDRESS CHANGE BOX ON
REVERSE SIDE):
(Continued and to be signed on the other side)
- -------------------------------------------------------------------------------
<PAGE> 18
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR Please mark
ALL LISTED NOMINEES FOR DIRECTOR AND FOR ITEM 2. /X/ your votes
as this
1. ELECTION OF DIRECTORS FOR WITHHOLD
Nominees: Ronald A. Unkefer, Stanley R. Baker, FOR ALL
Robert A. Gunst, Russell M. Solomon, / / / /
W. Howard Lester, John E. Martin.
WITHHELD FOR: To withhold authority for any
individual nominee, cross out the nominee's
name in the list above.
2. APPROVAL OF AUDITORS FOR AGAINST ABSTAIN
To ratify the selection of Deloitte & Touche LLP
as independent Certified Public Accountants for / / / / / /
the Company.
Receipt is hereby acknowledged of The Good Guys, Inc. Notice of Annual Meeting
of Shareholders and Proxy Statement.
Dated:
- ---------------------------------- ---------------------
Signature of Shareholder
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
I PLAN TO ATTEND THE MEETING / /
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THE SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
