<PAGE> 1
As filed with the Securities and Exchange Commission on March 31, 2000
- --------------------------------------------------------------------------------
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, 1999
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-
<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, 1998 and
1999, 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/ RONALD A. UNKEFER March 31, 2000
- ----------------------------------------
(Ronald A. Unkefer)
/s/ VANCE R. SCHRAM March 31, 2000
- ----------------------------------------
(Vance R. Schram)
-2-
<PAGE> 3
APPENDIX 1
THE GOOD GUYS!
DEFERRED PAY PLAN
FINANCIAL STATEMENTS AS OF AND
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
SEPTEMBER 30, 1999 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, 1999 and 1998 2
Statements of Changes in Assets Available for Benefits
for the Years Ended September 30, 1999 and 1998 2
Notes to Financial Statements 3-8
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE
YEAR ENDED SEPTEMBER 30, 1999:
Item 27a - Schedule of Assets Held for Investment Purposes 9
Item 27d - Schedule of Reportable Transactions (series of transactions exceeding 5% of plan assets) 10
Item 27f - Schedule of Non Exempt Transactions 11
</TABLE>
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
Administrative Committee of
The Good Guys!
Deferred Pay Plan:
We have audited the accompanying statements of assets available for benefits of
The Good Guys! Deferred Pay Plan (the "Plan") as of September 30, 1999 and 1998,
and the related statements of changes in 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 assets available for benefits of the Plan at September 30, 1999
and 1998, and the changes in 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 listed in the
table of contents 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. 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 1999 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.
/s/ DELOITTE & TOUCHE LLP
- ------------------------------
March 22, 2000
<PAGE> 6
THE GOOD GUYS! DEFERRED PAY PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS:
Investments, at fair value:
Investment Company of America $ 5,416,380 $ 4,754,313
New Perspective Fund 4,371,594 3,461,616
Bond Fund of America 500,057 594,911
American Balanced Fund 2,330,678 2,160,772
Merrill Lynch Retirement Preservation Trust 1,147,578 1,146,563
The Good Guys! Company Stock Fund 1,842,400 993,738
Loans to participants 1,302,589 1,066,343
-----------------------------
ASSETS AVAILABLE FOR BENEFITS $16,911,276 $14,178,256
=============================
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest income $ 73,676 $ 71,813
Net appreciation in fair value of investments 3,092,745 168,068
----------------------------
Total investment income 3,166,421 239,881
Contributions 2,852,383 3,180,867
----------------------------
Total additions 6,018,804 3,420,748
DEDUCTIONS FROM ASSETS -
Payments to participants 3,285,784 1,839,687
----------------------------
NET INCREASE 2,733,020 1,581,061
ASSETS AVAILABLE FOR BENEFITS:
At beginning of year 14,178,256 12,597,195
----------------------------
At end of year $16,911,276 $14,178,256
============================
</TABLE>
See notes to financial statements.
2
<PAGE> 7
THE GOOD GUYS! DEFERRED PAY PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
- --------------------------------------------------------------------------------
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
provided they have completed twelve months of continuous service (six months
of continuos service for Plan years commencing on and after October 1,
1999). Participants may contribute up to 20% 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 with the investment choice elected by the
participant. The participants have a choice of six investments, four of
those investments are mutual funds, one is a collective trust and one is
Company Stock. 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 Preservation Trust (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).
3
<PAGE> 8
The Good Guys! Company Stock Fund - Funds are invested in The Good Guys!
common stock.
VESTING - All employee 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.
USE OF ESTIMATES - In preparing the Plan's financial statements, the
administrator is required to make estimates and assumptions that affect the
reported amounts of assets and disclosure of contingent assets at the date
of the financial statements, and the reported amounts of additions and
deductions to assets during the reporting periods. Actual results could
differ from these estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at estimated fair value, which is determined by quoted market prices.
The Plan holds units of a common collective trust fund, the underlying
assets of which are guaranteed investment contracts 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.
4
<PAGE> 9
RECLASSIFICATIONS - Certain items have been reclassified to conform with
current year presentation for comparative purposes.
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 of up to five years, or
up to 30 years for the purchase of a primary residence, 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, 1999, there are 315 loans,
maturing from 1999 to 2029 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 Preservation Trust (the "Fund") is presented.
The Fund invests in guaranteed investment contracts ("GIC"), 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 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.
5
<PAGE> 10
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. INVESTMENTS
Investments that represent 5% or more of the Plan's net assets at September
30, 1999 and 1998 are separately identified in the following table:
<TABLE>
<CAPTION>
1999 1998
----------------------- ------------------------
Cost Fair Value Cost Fair Value
<S> <C> <C> <C> <C>
Investment Company of America $4,422,991 $5,416,380 $4,086,382 $4,754,313
New Perspective Fund 3,227,526 4,371,594 2,973,381 3,461,616
American Balanced Fund 2,111,745 2,330,678 2,089,574 2,160,772
Merrill Lynch Retirement
Preservation Trust 1,147,578 1,147,578 1,146,563 1,146,563
The Good Guys! Company Stock Fund 1,785,010 1,842,400 1,372,550 993,738
Loans to participants 1,302,589 1,302,589 1,066,343 1,066,343
</TABLE>
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are units of common collected funds managed by
Merrill Lynch. Merrill Lynch is the Trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
7. FUND INFORMATION
The following information shows the changes in assets available for benefits
by fund type:
6
<PAGE> 11
CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND
YEAR ENDED SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MERRILL THE GOOD
LYNCH GUYS!
INVESTMENT NEW BOND AMERICAN RETIREMENT COMPANY
COMPANY PERSPECTIVE FUND OF BALANCED PRESERVATION STOCK PARTICIPANT
OF AMERICA FUND AMERICA FUND TRUST FUND LOANS TOTAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest income $ 73,676 $ 73,676
Net appreciation (depreciation)
in fair value of investments $1,116,913 $1,287,456 $ 16,827 $ 264,425 $ 66,734 $ 340,390 - 3,092,745
Contributions from participants 973,760 620,854 109,214 372,075 271,477 870,927 (365,924) 2,852,383
-----------------------------------------------------------------------------------------------
Total additions 2,090,673 1,908,310 126,041 636,500 338,211 1,211,317 (292,248) 6,018,804
-----------------------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 1,450,951 1,054,045 163,287 505,821 333,651 287,548 (509,519) 3,285,784
-----------------------------------------------------------------------------------------------
NET INCREASE PRIOR TO
INTERFUND TRANSFERS 639,722 854,265 (37,246) 130,679 4,560 923,769 217,271 2,733,020
INTERFUND TRANSFERS 22,345 55,713 (57,608) 39,227 (3,545) (75,107) 18,975 -
-----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) 662,067 909,978 (94,854) 169,906 1,015 848,662 236,246 2,733,020
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 4,754,313 3,461,616 594,911 2,160,772 1,146,563 993,738 1,066,343 14,178,256
-----------------------------------------------------------------------------------------------
End of year $5,416,380 $4,371,594 $500,057 $2,330,678 $1,147,578 $1,842,400 $1,302,589 $16,911,276
===============================================================================================
</TABLE>
7
<PAGE> 12
CHANGES IN ASSETS AVAILABLE FOR BENEFITS BY FUND
YEAR ENDED SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MERRILL THE GOOD
LYNCH GUYS!
INVESTMENT NEW BOND AMERICAN RETIREMENT COMPANY
COMPANY PERSPECTIVE FUND OF BALANCED PRESERVATION STOCK PARTICIPANT
OF AMERICA FUND AMERICA FUND TRUST FUND LOANS TOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO ASSETS:
Investment income:
Interest income $ 71,813 $ 71,813
Net appreciation (depreciation)
in fair value of investments $ 226,890 $ 80,541 $ 24,161 $ 59,267 $ 62,660 $(285,451) - 168,068
Contributions from participants 1,164,492 801,572 136,687 459,479 314,641 768,074 (464,078) 3,180,867
---------------------------------------------------------------------------------------------
Total additions 1,391,382 882,113 160,848 518,746 377,301 482,623 (392,265) 3,420,748
---------------------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS -
Participants' withdrawals 850,674 795,152 79,503 308,993 275,316 213,040 (682,991) 1,839,687
---------------------------------------------------------------------------------------------
NET INCREASE PRIOR TO
INTERFUND TRANSFERS 540,708 86,961 81,345 209,753 101,985 269,583 290,726 1,581,061
INTERFUND TRANSFERS 290,999 (368,184) (22,685) 51,507 (83,249) 75,260 56,352 -
---------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) 831,707 (281,223) 58,660 261,260 18,736 344,843 347,078 1,581,061
ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 3,922,606 3,742,839 536,251 1,899,512 1,127,827 648,895 719,265 12,597,195
---------------------------------------------------------------------------------------------
End of year $4,754,313 $3,461,616 $594,911 $2,160,772 $1,146,563 $ 993,738 $1,066,343 $14,178,256
=============================================================================================
</TABLE>
8
<PAGE> 13
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1999
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<TABLE>
<CAPTION>
INVESTMENTS UNITS/SHARE COST FAIR VALUE
<S> <C> <C> <C>
INVESTMENT COMPANY OF AMERICA 160,926 $ 4,422,991 $ 5,416,380
NEW PERSPECTIVE FUND 164,072 3,227,526 4,371,594
BOND FUND OF AMERICA 40,481 568,213 500,057
AMERICAN BALANCED FUND 138,677 2,111,745 2,330,678
MERRILL LYNCH RETIREMENT PRESERVATION TRUST 1,147,578 1,147,578 1,147,578
THE GOOD GUYS! COMPANY STOCK FUND 268,247 1,785,010 1,842,400
LOANS TO PARTICIPANTS (See Note 3) 1,302,589 1,302,589
-----------------------------
TOTAL INVESTMENTS $14,565,652 $ 16,911,276
=============================
</TABLE>
9
<PAGE> 14
THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
(SERIES OF TRANSACTIONS EXCEEDING 5% OF PLAN ASSETS)
YEAR ENDED SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<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 65 $ 1,663,497 40 $ 1,689,239 $ 322,638
New Perspective Fund 56 1,143,809 39 1,219,951 295,706
American Balanced Fund 56 662,911 37 714,859 57,850
Merrill Lynch Retirement Preservation
Trust 284 430,831 31 438,761 -
The Good Guys! Company Stock Fund 124 1,129,207 54 325,819 (76,621)
</TABLE>
10
<PAGE> 15
THE GOOD GUYS! DEFERRED PAY PLAN
ITEM 27f -- SCHEDULE OF NONEXEMPT TRANSACTIONS
(TRANSACTIONS EXCEEDING MAXIMUM TIME PERIOD ALLOWED BY ERISA)
YEAR ENDED SEPTEMBER 30, 1999
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<TABLE>
<CAPTION>
(b)RELATIONSHIP (c)DESCRIPTION OF TRANSACTION (g)
PLAN EMPLOYER INCLUDING MATURITY DATE, (d) (e) COST PLUS
(a)IDENTITY OF PARTY OR OTHER PARTY RATE OF INTEREST, COLLATERAL, COST OF DAYS (f) INTEREST
INVOLVED IN INTEREST PAR OR MATURITY VALUE ASSET LATE INTEREST (b)+(f)
<S> <C> <C> <C> <C> <C> <C>
The Good Guys, Inc. Plan Sponsor The Plan breached DOL Regulation 3,079 12 7 $ 3,086
2501.3-102 which requires contribution
of defined contribution plans to be 728 8 1 $729
remitted within 15 business days
after the month in which participant 112,550 3 66 $112,616
contribution amounts were withheld
by the employer. The interest will 110,336 5 107 $110,443
be remitted to the trust in April 2000.
98,431 5 96 $ 98,527
--------------------------------------------
325,124 277 $325,401
</TABLE>
11
