<PAGE> 1
As filed with the Securities and Exchange Commission on March 28, 1996
- --------------------------------------------------------------------------------
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 [FEE REQUIRED]
For the fiscal year ended September 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
-------- --------
Commission File No: 0-14134
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
THE GOOD GUYS! DEFERRED PAY PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
The Good Guys, Inc.
7000 Marina Boulevard
Brisbane, California 94005-1830
-1-
<PAGE> 2
REQUIRED INFORMATION
The Good Guys! Deferred Pay Plan ("Plan") is subject to the
Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of
the requirements of Items 1-3 of Form 11-K, the financial statements and
schedules of the Plan for the two fiscal years ended September 30, 1994 and
1995, which have been prepared in accordance with the financial reporting
requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein
by this reference.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and
Exchange Act of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE GOOD GUYS! DEFERRED PAY PLAN
By: The Good Guys! Deferred Pay Plan Administrative Committee
/s/ ROBERT A. GUNST March 27, 1996
- --------------------------------
(Robert A. Gunst)
/s/ THOMAS A. HANNAH March 27, 1996
- --------------------------------
(Thomas A. Hannah)
-2-
<PAGE> 3
APPENDIX 1
THE GOOD GUYS!
DEFERRED PAY PLAN
FINANCIAL STATEMENTS AS OF AND
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
SEPTEMBER 30, 1995 AND INDEPENDENT AUDITORS' REPORT
<PAGE> 4
THE GOOD GUYS! DEFERRED PAY PLAN
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits
as of September 30, 1995 and 1994 2
Statements of Changes in Assets Available for Benefits
for the Years Ended September 30, 1995 and 1994 2
Notes to Financial Statements 3-7
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE
YEAR ENDED SEPTEMBER 30, 1995:
Item 27a - Schedule of Assets Held for Investment Purposes 8
Item 27d - Schedule of Reportable Transactions (series of transactions exceeding 5% of plan assets) 9
</TABLE>
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
Administrative Committee
The Good Guys!
Deferred Pay Plan
We have audited the accompanying statements of net assets available for benefits
of The Good Guys! Deferred Pay Plan (the "Plan") as of September 30, 1995 and
1994, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits as of September 30, 1995 and
1994, and the changes in net assets available for benefits for the years then
ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions for the year ended September
30, 1995 are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 ("ERISA"). The supplemental information by fund in the statement of net
assets available for benefits as of September 30, 1995 and 1994 and the
statement of changes in net assets available for benefits for the years ended
September 30, 1995 and 1994 is presented for the purpose of additional analysis
rather than to present the net assets available for benefits and changes in net
assets available for benefits of the individual funds. The supplemental
schedules and supplemental information by fund are the responsibility of the
Plan's management. Such supplemental schedules and supplemental information by
fund have been subjected to the auditing procedures applied in our audit of the
basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
Deloitte & Touche LLP
San Francisco, California
March 15, 1996
<PAGE> 6
THE GOOD GUYS! DEFERRED PAY PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1995 AND 1994
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<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS:
Investments, at fair value:
Investment Company of America $1,290,812 $ 820,565
New Perspective Fund 1,756,367 1,160,275
Bond Fund of America 391,793 266,594
American Balanced Fund 885,041 603,981
Merrill Lynch Retirement Trust 1,150,662 1,040,812
The Good Guys! Stock Fund 956,940 804,321
Loans to participants 422,703 366,162
---------- ----------
ASSETS AVAILABLE FOR BENEFITS $6,854,318 $5,062,710
========== ==========
</TABLE>
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STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED SEPTEMBER 30, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income $ 35,604 $ 30,057
Net appreciation in fair value of investments 627,829 192,584
---------- ----------
Total investment income 663,433 222,641
Contributions from participants 1,834,428 1,547,627
---------- ----------
Total additions 2,497,861 1,770,268
DEDUCTIONS FROM ASSETS -
Payments to participants 706,253 652,779
---------- ----------
NET INCREASE 1,791,608 1,117,489
ASSETS AVAILABLE FOR BENEFITS:
At beginning of year 5,062,710 3,945,221
---------- ----------
At end of year $6,854,318 $5,062,710
========== ==========
</TABLE>
See notes to financial statements.
2
<PAGE> 7
THE GOOD GUYS! DEFERRED PAY PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995 AND 1994
1. SUMMARY DESCRIPTION OF PLAN
The Good Guys! Deferred Pay Plan (the "Plan") is a defined contribution tax
deferred savings plan available to employees of The Good Guys, Inc. (the
"Company"). It is subject to the provisions of the Employee Retirement
Income Security Act of 1974. Employees of the Company may voluntarily
commence participation in the Plan on October 1st or April 1st of each year
providing they have completed six months of continuous service.
Participants may contribute up to 15% of their annual compensation to the
Plan. However, the sum of the participants' contributions to the Plan and
the Company's contribution to The Good Guys! Profit-Sharing Plan on the
participants' behalf may not be in excess of the amount allowed for federal
income tax purposes. Additional contributions may be made to the Plan by
the Company at the option of the Plan's Administrative Committee.
Until April 1, 1994, each participant's share of assets was segregated in
an individual account and was invested in an asset allocation fund, income
accumulation fund, S&P 500 stock fund, The Good Guys! stock fund, or a
combination of these funds by Wells Fargo Bank, the Trustee of the Plan, in
accordance with the investment choice elected by the participant. On April
1, 1994, the trustee and investment management functions were transferred
to Merrill Lynch. Pursuant to the change in investment alternatives, the
participants have a choice of six investments. The prospectuses for these
investment options describe the funds as follows:
Investment Company of America (Equity Growth & Income Fund) - Funds are
invested in marketable securities, principally common stock, for
long-term growth of capital and income.
New Perspective Fund (Global Growth Fund) - Funds are invested in
common stocks of both foreign and domestic companies for long-term
growth of capital.
Bond Fund of America (Fixed Income Fund) - Funds are invested in
marketable fixed-income debt securities, government obligations, and
money-market instruments for current income and the preservation of
capital.
American Balanced Fund (Equity Growth & Income Fund) - Funds are
invested in a diversified array of equities, debt, and cash instruments
for capital preservation, current income, and long-term growth of
capital and income.
Merrill Lynch Retirement Fund (Cash Equivalents; Collective Trust Fund)
- Funds are invested in Guaranteed Investment Contracts, U.S.
Government obligations and money market instruments for current income
and preservation of capital (see Note 4).
The Good Guys! Company Stock Fund - Funds are invested in The Good
Guys! stock.
3
<PAGE> 8
VESTING - All contributions are fully vested at the time of contribution.
DISTRIBUTION OF BENEFITS - Benefits are payable to employees upon
termination of employment, normal retirement, total disability, death, or
for financial hardship as defined by the Internal Revenue Service. The Plan
provides that all administrative costs be paid by the Company.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Company has the right to terminate the Plan at any time, subject to the
provisions of ERISA. Upon termination, all amounts credited to the
participants' accounts will be distributed in accordance with Plan
provisions.
INCOME TAXES - The Plan obtained a determination letter on September 5,
1987, in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has applied for a new determination letter
based on the Plan agreement (see Note 1). The Plan administrator and the
Plan's tax counsel believe that the Plan as newly designed and operated is
in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, they believe that the Plan was qualified and the related
trust is tax-exempt as of September 30, 1995.
Plan administration was transferred from The Wyatt Company to Howard
Johnson & Company effective April 1, 1994.
Participants should refer to the plan agreement for a more complete
description of the Plan's provisions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements of the Plan are
prepared on the accrual method of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at estimated fair value, which is determined by quoted market
prices. The Plan's guaranteed investment contract is valued at contract
value. Participant loans are carried at amortized cost, which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividends are recorded on
the ex-dividend date.
BENEFITS are recorded when paid. As of September 30, 1995 and 1994, net
assets available for benefits included benefits of $721,016 and $515,509
due to participants who have withdrawn from participation in the Plan.
3. PARTICIPANT LOANS
Under the terms of the Plan and subject to certain limitations as defined
in the Plan agreement, participants may borrow against the amount of their
vested accounts. Such loans are payable over periods
4
<PAGE> 9
of up to five years and bear interest at a rate equal to that charged by
institutional lenders for similar loans at the time the loan is made. As of
September 30, 1995, there are 170 loans to participants, maturing from 1995
to 2000 with interest rates ranging between 9.0% and 13.5%.
4. FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK
As required by Financial Accounting Standard No. 105, Disclosure of
Information about Financial Investments with Off-Balance Sheet Risk and
Financial Instruments with Concentrations of Credit Risk," the following
information about the risk characteristics associated with the Merrill
Lynch retirement trust fund (the "Fund") is presented.
The fund invests in guaranteed investment contracts ("GIC") and bank
investment contracts ("BIC") and other synthetic guaranteed investment
contracts issued by selected North American life insurance companies and
U.S. banks. The issuer of each investment contract undertakes to repay the
principal amounts deposited pursuant to the contract plus accrued interest
at fixed or variable rates as specified under its terms. The credit risk of
the issuer of each investment contract is evaluated and monitored by the
trustee.
The Merrill Lynch retirement trust fund's policy is to require that the
investment contract issuer has ratings no lower than: A rating of AAA from
Standard & Poor's and Aa2 from Moody's at the time of purchase.
The GIC issuer is subject to an analysis of asset qualtiy, liquidity,
management quality, surplus adequacy and profitability. Further, the
issuer's mortgage loan portfolio and bond holdings are scrutinized for
exposure to high risk bonds and geographical concentrations.
A credit review of all issuers of IDCs is performed periodically. The
reviews are based upon the external rating services listed above. An
investment contract may be identified as substandard or removed from the
Fund depending on the degree of deterioration of the issuer's rating. The
Trustee may elect to segregate a contract from the Fund, resulting in
separate accounting for the investment contract. As a result, participants
admitted to the Fund after the contract has been segregated from the Fund
will not be affected.
The Fund's policy is to review a variety of factors prior to selecting a
BIC issuer for bidding on BICs. These factors include, but are not limited
to, asset quality, liquidity, management quality, profitability and, as is
the policy of the Trustee, the Trustee's exposure to the issuing bank.
Furthermore, the Fund's investments in BICs are insured by the Federal
Deposit Insurance Corporation within applicable limits. Such coverage was
eliminated effective December 1993, or, for contracts purchased prior to
December 1991, at maturity.
5. FUND INFORMATION
The following information shows the changes in assets available for
benefits by fund type:
5
<PAGE> 10
CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND
YEAR ENDED SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment New Bond American
Company Perspective Fund of Balanced
of America Fund America Fund
---------- ---- ------- ----
<S> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income
Net appreciation (depreciation) in fair
value of investments $ 221,873 $ 260,159 $ 47,166 $138,621
Contributions from participants 385,796 587,613 227,285 238,516
---------- ---------- --------- --------
Total additions 607,669 847,772 274,451 377,137
---------- ---------- --------- --------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 198,525 246,852 46,460 88,310
---------- ---------- --------- --------
Total deductions 198,525 246,852 46,460 88,310
---------- ---------- --------- --------
NET INCREASE BEFORE
INTERFUND TRANSFERS 409,144 600,920 227,991 288,827
INTERFUND TRANSFERS 61,103 (4,828) (102,792) (7,767)
---------- ---------- --------- --------
NET INCREASE 470,247 596,092 125,199 281,060
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 820,565 1,160,275 266,594 603,981
---------- ---------- --------- --------
End of year $1,290,812 $1,756,367 $ 391,793 $885,041
========== ========== ========= ========
<CAPTION>
Merrill The Good
Lynch Guys!
Retirement Stock Participant
Trust Fund Fund Loans Total
---------- ---- ----- -----
<S> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income $ 35,604 $ 35,604
Net appreciation (depreciation) in fair
value of investments $ 62,611 $(102,601) -- 627,829
Contributions from participants 283,476 329,777 (218,035) 1,834,428
---------- --------- --------- ----------
Total additions 346,087 227,176 (182,431) 2,497,861
---------- --------- --------- ----------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 298,189 77,689 (249,772) 706,253
---------- --------- --------- ----------
Total deductions 298,189 77,689 (249,772) 706,253
---------- --------- --------- ----------
NET INCREASE BEFORE
INTERFUND TRANSFERS 47,898 149,487 67,341 1,791,608
INTERFUND TRANSFERS 61,952 3,132 (10,800) --
---------- --------- --------- ----------
NET INCREASE 109,850 152,619 56,541 1,791,608
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 1,040,812 804,321 366,162 5,062,710
---------- --------- --------- ----------
End of year $1,150,662 $ 956,940 $ 422,703 $6,854,318
========== ========= ========= ==========
</TABLE>
6
<PAGE> 11
CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND
YEAR ENDED SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Merrill
Investment New Bond American Lynch
Company Perspective Fund of Balanced Retirement
of America Fund America Fund Trust Fund
---------- ---- ------- ---- ----------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income
Net appreciation (depreciation) in fair
value of investments $ 28,687 $ 37,500 $ (778) $ 19,989 $ 31,114
Contributions from participants 185,030 274,223 49,463 112,559 137,567
--------------------------------------------------------
Total additions 213,717 311,723 48,685 132,548 168,681
--------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 62,306 72,079 13,396 14,281 299,298
--------------------------------------------------------
Total deductions 62,306 72,079 13,396 14,281 299,298
--------------------------------------------------------
NET INCREASE (DECREASE) BEFORE
INTERFUND TRANSFERS 151,411 239,644 35,289 118,267 (130,617)
INTERFUND TRANSFERS 669,154 920,631 231,305 485,714 1,171,429
--------------------------------------------------------
NET INCREASE (DECREASE) 820,565 1,160,275 266,594 603,981 1,040,812
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year -- -- -- -- --
--------------------------------------------------------
End of year $ 820,565 $1,160,275 $266,594 $603,981 $1,040,812
========================================================
<CAPTION>
The Good
Asset Income S & P 500 Guys!
Allocation Accumulation Stock Stock Participant
Fund Fund Fund Fund Loans Total
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income $ 30,057 $ 30,057
Net appreciation (depreciation) in fair
value of investments $ (57,848) $ 11,172 $ (16,159) $ 138,907 -- 192,584
Contributions from participants 263,138 159,534 129,135 394,423 (157,445) 1,547,627
---------------------------------------------------------------------------
Total additions 205,290 170,706 112,976 533,330 (127,388) 1,770,268
---------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 133,468 84,783 44,199 120,873 (191,904) 652,779
---------------------------------------------------------------------------
Total deductions 133,468 84,783 44,199 120,873 (191,904) 652,779
---------------------------------------------------------------------------
NET INCREASE (DECREASE) BEFORE
INTERFUND TRANSFERS 71,822 85,923 68,777 412,457 64,516 1,117,489
INTERFUND TRANSFERS (1,439,914) (896,531) (844,220) (297,568) -- --
---------------------------------------------------------------------------
NET INCREASE (DECREASE) (1,368,092) (810,608) (775,443) 114,889 64,516 1,117,489
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 1,368,092 810,608 775,443 689,432 301,646 3,945,221
---------------------------------------------------------------------------
End of year $ -- $ -- $ -- $ 804,321 $ 366,162 $5,062,710
============================================================================
</TABLE>
7
<PAGE> 12
THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1995
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<TABLE>
<CAPTION>
INVESTMENTS UNITS/SHARE COST FAIR VALUE
<S> <C> <C> <C>
INVESTMENT COMPANY OF AMERICA 59,359 $1,118,375 $1,290,812
NEW PERSPECTIVE FUND 103,283 1,560,106 1,756,367
BOND FUND OF AMERICA 28,753 381,322 391,793
AMERICAN BALANCED FUND 63,120 774,919 885,041
MERRILL LYNCH RETIREMENT TRUST 1,147,046 1,150,662 1,150,662
THE GOOD GUYS! STOCK FUND 84,095 1,055,732 956,940
LOANS TO PARTICIPANTS (See Note 3) 422,703 422,703
---------- ----------
TOTAL INVESTMENTS $6,463,819 $6,854,318
========== ==========
</TABLE>
8
<PAGE> 13
THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
(SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS)
YEAR ENDED SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES DISPOSITIONS
--------------------- --------------------------------
NUMBER OF NUMBER OF GAIN
FUND TRANSACTIONS COST TRANSACTIONS PROCEEDS (LOSS)
<S> <C> <C> <C> <C> <C>
Investment Company of America 46 $500,804 22 $201,611 $ 14,278
New Perspective Fund 47 678,903 24 258,953 13,939
Bond Fund of America 47 261,050 22 154,281 (1,504)
American Balanced Fund 40 283,199 21 109,319 5,587
Merrill Lynch Retirement Fund 281 457,499 22 399,451 --
The Good Guys! Stock Fund 35 271,049 19 57,172 (7,780)
</TABLE>
9
<PAGE> 14
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-39421 of The Good Guys!, Inc. on Form S-8 of our report dated March 15,
1996, appearing in this Annual Report on Form 11-K of The Good Guys! Deferred
Pay Plan for the year ended September 30, 1995.
DELOITTE & TOUCHE LLP
San Francisco, California
March 15, 1996
