<PAGE> 1
As filed with the Securities and Exchange Commission on March 27, 1997
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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-
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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, 1995 and
1996, 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/ THOMAS A. HANNAH March 27, 1997
- ---------------------------------
(Thomas A. Hannah)
/s/ DENNIS C. CARROLL March 27, 1997
- ---------------------------------
(Dennis C. Carroll)
March , 1997
- ---------------------------------
(Robert A. Gunst)
-2-
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APPENDIX 1
THE GOOD GUYS!
DEFERRED PAY PLAN
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
SEPTEMBER 30, 1996 AND 1995, SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1996
AND INDEPENDENT AUDITORS' REPORT
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THE GOOD GUYS! DEFERRED PAY PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits
as of September 30, 1996 and 1995 2
Statements of Changes in Assets Available for Benefits
for the Years Ended September 30, 1996 and 1995 2
Notes to Financial Statements 3-7
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE
YEAR ENDED SEPTEMBER 30, 1996:
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,
1996 and 1995, 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 of the Plan as of September 30,
1996 and 1995, 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, 1996 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 schedules are the responsibility of the
Plan's management. Such supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic 1996 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 14, 1997
<PAGE> 6
THE GOOD GUYS! DEFERRED PAY PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1996 1995
<S> <C> <C>
ASSETS:
Investments, at fair value:
Investment Company of America $2,081,090 $1,290,812
New Perspective Fund 2,397,095 1,756,367
Bond Fund of America 487,989 391,793
American Balanced Fund 1,327,227 885,041
Merrill Lynch Retirement Trust 1,081,241 1,150,662
The Good Guys! Stock Fund 684,670 956,940
Loans to participants 594,084 422,703
-------------------------
ASSETS AVAILABLE FOR BENEFITS $8,653,396 $6,854,318
=========================
</TABLE>
- -------------------------------------------------------
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1996 1995
<S> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income $44,608 $35,604
Net appreciation in fair value of investments 408,232 627,829
-------------------------
Total investment income 452,840 663,433
Contributions from participants 2,146,921 1,834,428
-------------------------
Total additions 2,599,761 2,497,861
DEDUCTIONS FROM ASSETS -
Payments to participants 800,683 706,253
-------------------------
NET INCREASE 1,799,078 1,791,608
ASSETS AVAILABLE FOR BENEFITS:
At beginning of year 6,854,318 5,062,710
-------------------------
At end of year $8,653,396 $6,854,318
=========================
</TABLE>
See notes to financial statements.
2
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THE GOOD GUYS! DEFERRED PAY PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
____________________________________________________________
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! (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.
Each participant's share of assets is segregated in an individual account
and invested in accordance to the investment choice elected by the
participant. 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!
common stock.
3
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VESTING - All employee and employer 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 February 21,
1997, in which the Internal Revenue Service stated that the Plan is in
compliance with the applicable requirements of the Internal Revenue Code.
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 (See Note 4).
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, 1996 and 1995, net
assets available for benefits included benefits of $900,375 and $721,016 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
4
<PAGE> 9
periods 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, 1996, there are 211 loans to participants,
maturing from 1996 to 2001 with interest rates ranging between 9% and 11%.
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 or Aa2 from Moody's at the time of purchase.
The GIC issuer is subject to an analysis of asset quality, 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 GICs 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, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Merrill The Good
Investment New Bond American Lynch Guys!
Company Perspective Fund of Balanced Retirement Stock Participant
of America Fund America Fund Trust Fund Fund Loans Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest and collective trust fund income $44,608 $44,608
Net appreciation (depreciation) in fair
value of investments $252,891 $214,102 $31,916 $136,060 $61,857 ($288,594) - 408,232
Contributions from participants 639,445 710,739 162,175 350,464 304,908 241,287 (262,097) 2,146,921
---------------------------------------------------------------------------------------
Total additions 892,336 924,841 194,091 486,524 366,765 (47,307) (217,489) 2,599,761
---------------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 277,416 398,807 79,833 171,035 156,208 95,453 (378,069) 800,683
---------------------------------------------------------------------------------------
Total deductions 277,416 398,807 79,833 171,035 156,208 95,453 (378,069) 800,683
---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS 614,920 526,034 114,258 315,489 210,557 (142,760) 160,580 1,799,078
INTERFUND TRANSFERS 175,358 114,694 (18,062) 126,697 (279,978) (129,510) 10,801 0.00
---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) 790,278 640,728 96,196 442,186 (69,421) (272,270) 171,381 1,799,078
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 1,290,812 1,756,367 391,793 885,041 1,150,662 956,940 422,703 6,854,318
---------------------------------------------------------------------------------------
End of year $2,081,090 $2,397,095 $487,989 $1,327,227 $1,081,241 $684,670 $594,084 $8,653,396
======================================================================================
</TABLE>
6
<PAGE> 11
CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND
YEAR ENDED SEPTEMBER 30, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Merrill The Good
Investment New Bond American Lynch Guys!
Company Perspective Fund of Balanced Retirement Stock Participant
of America Fund America Fund Trust Fund Fund Loans Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <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 $221,873 $260,159 $47,166 $138,621 $62,611 ($102,601) - 627,829
Contributions from participants 385,796 587,613 227,285 238,516 283,476 329,777 (218,035) 1,834,428
---------------------------------------------------------------------------------------
Total additions 607,669 847,772 274,451 377,137 346,087 227,176 (182,431) 2,497,861
---------------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 198,525 246,852 46,460 88,310 298,189 77,689 (249,772) 706,253
---------------------------------------------------------------------------------------
Total deductions 198,525 246,852 46,460 88,310 298,189 77,689 (249,772) 706,253
---------------------------------------------------------------------------------------
NET INCREASE BEFORE
INTERFUND TRANSFERS 409,144 600,920 227,991 288,827 47,898 149,487 67,341 1,791,608
INTERFUND TRANSFERS 61,103 (4,828) (102,792) (7,767) 61,952 3,132 (10,800) -
---------------------------------------------------------------------------------------
NET INCREASE 470,247 596,092 125,199 281,060 109,850 152,619 56,541 1,791,608
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 820,565 1,160,275 266,594 603,981 1,040,812 804,321 366,162 5,062,710
---------------------------------------------------------------------------------------
End of year $1,290,812 $1,756,367 $391,793 $885,041 $1,150,662 $956,940 $422,703 $6,854,318
======================================================================================
</TABLE>
7
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THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investments Units/Share Cost Fair Value
<S> <C> <C> <C>
INVESTMENT COMPANY OF AMERICA 86,446 $1,790,301 $2,081,090
NEW PERSPECTIVE FUND 133,504 2,134,006 2,397,095
BOND FUND OF AMERICA 35,213 479,587 487,989
AMERICAN BALANCED FUND 89,361 1,182,109 1,327,227
MERRILL LYNCH RETIREMENT TRUST 1,081,241 1,081,241 1,081,241
THE GOOD GUYS! STOCK FUND 84,952 1,001,744 684,670
LOANS TO PARTICIPANTS (See Note 3) 594,084 594,084
--------------------------
TOTAL INVESTMENTS $8,263,072 $8,653,396
==========================
</TABLE>
8
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THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
(SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS)
YEAR ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------
<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 47 $901,092 24 $283,137 $40,565
New Perspective Fund 42 952,973 24 429,204 43,003
American Balanced Fund 47 565,655 23 185,509 20,862
Merrill Lynch Retirement Fund 285 367,705 22 402,305 -
The Good Guys! Stock Fund 25 205,325 23 197,935 (54,364)
</TABLE>
9
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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 14,
1997, appearing in this Annual Report on Form 11-K of The Good Guys! Deferred
Pay Plan for the year ended September 30, 1996.
DELOITTE & TOUCHE LLP
San Francisco, California
March 14, 1997
