<PAGE>
UNITED STATES
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
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission file number 0-00000
-------
FRIEDMAN'S INC. RETIREMENT SAVINGS PLAN
A Delaware Corporation
IRS Employer Identification Number 58-2058362
Four West State Street
Savannah, Georgia 31401
Telephone (912) 233-9333
<PAGE>
Friedman's Inc. Retirement Savings Plan
Financial Statements and Supplemental Schedule
Year ended December 31, 1999 and as of December 31, 1998
Contents
<TABLE>
<S> <C>
Report of Independent Auditors....................................................... 1
Statements of Net Assets Available for Benefits...................................... 3
Statement of Changes in Net Assets Available for Benefits............................ 4
Notes to Financial Statements........................................................ 5
Supplemental Schedule
Schedule H, Line 4i--Schedule of Assets Held for Investment Purposes at End of Year.. 10
Signature............................................................................ 11
Exhibit
Consent (Exhibit 23)................................................................. 12
</TABLE>
<PAGE>
Report of Independent Auditors
The Plan Committee
Friedman's Inc. Retirement Savings Plan
Savannah, Georgia
We have audited the accompanying statements of net assets available for
benefits of Friedman's Inc. Friedman's Inc. Retirement Savings Plan as of
December 31, 1999 and 1998, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1999. 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 auditing standards generally
accepted in the United States. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
1
<PAGE>
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at end of year as of December 31, 1999 is
presented for purposes of additional analysis and is not a required part of the
financial statements but is 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. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 9, 2000
Atlanta, Georgia
2
<PAGE>
Friedman's Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
----------------------------
Assets
Investments, at fair value $4,281,836 $3,368,593
Contributions receivable:
Participants 63,707 51,409
Employer 18,664 15,410
----------------------------
82,371 66,819
----------------------------
Net assets available for benefits $4,364,207 $3,435,412
============================
See accompanying notes.
3
<PAGE>
Friedman's Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
Additions to net assets attributed to:
Net appreciation in fair value $ 283,183
Contributions:
Participants 828,703
Employer 207,519
-------------
1,319,405
Deductions from net assets attributed to:
Distributions to participants 378,771
Administrative expenses 11,839
-------------
390,610
-------------
Net increase in net assets 928,795
Net assets available for benefits at beginning of year 3,435,412
-------------
Net assets available for benefits at end of year $4,364,207
=============
See accompanying notes.
4
<PAGE>
Friedman's Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 1999
1. Description of the Plan
A complete description of the Friedman's Inc. Retirement Savings Plan (the Plan)
provisions is included in the Summary Plan Description and the Plan Document.
Copies of these documents are available from the Friedman's Inc. Benefits
Department. The following summary should be read in conjunction with the
aforementioned documents.
General
The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA) and covers
substantially all employees of Friedman's Inc. (the Company or the Employer).
The Plan was established and became effective January 1, 1996.
Contributions
Participants are allowed to make contributions to the Plan in accordance with
Section 401(k) of the Internal Revenue Code (IRC) ranging from 1% to 15% of
their pre-tax compensation, as defined in the Plan document. Except for rollover
contributions, participants may not make additional after-tax contributions. In
addition, the Company makes matching contributions on behalf of each participant
equal to 50% of the first 4% of each participant's contribution to the Plan.
Vesting, Withdrawals and Distributions
Participants are immediately vested in their contributions made to their
accounts plus actual earnings thereon. Vesting in Employer contributions plus
actual earnings thereon is based on years of continuous service. A participant
vests 20% in Employer contributions after two years of service and an additional
20% each year thereafter until they are 100% vested after six years of service.
Any forfeitures are used to reduce Company matching contributions. Upon
retirement, death, disability or termination of employment, the vested balance
in the participant's account is payable to the participant or designated
beneficiary as a lump sum.
5
<PAGE>
Friedman's Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Loans to Participants
Participants are permitted to borrow, under the loan provisions of the Plan, not
less than $1,000 up to a maximum of the lesser of $50,000 or 50% of the
participant's vested account balance. Effective August 1, 1998 participants may
have up to two loans outstanding which must be repaid within five years unless
the loan is for the purchase of a primary residence, in which case the loan must
be repaid within ten years. The loans are secured by the balance in the
participant's account and bear interest at the prime rate plus 2% in effect at
the beginning of the month in which the loan originated.
Participant Accounts
Each participant's account is credited with the participant's contributions, the
appropriate portion of the Employer's contributions and an allocation of Plan
earnings. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's account. Participant contributions, Company
matching contributions, and the related investment income are at all times 100%
vested and nonforfeitable. Participants become vested in Employer contributions
and actual earnings thereon according to the vesting schedule described above.
Plan Termination
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of termination, the total
amount in each participant's account will be distributed to the participant or
continue to be held in trust for his or her benefit.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accounting records of the Plan are maintained on the accrual basis. All
securities transactions of the Plan are recorded as of the trade date.
6
<PAGE>
Friedman's Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Valuation of Investments
Investments in mutual funds, common stock and common collective trust fund are
stated at fair value as determined by First Union National Bank (Trustee), using
the unitization method of accounting. Unit values are generally based upon
quoted market prices and are adjusted to reflect the impact of interest,
dividends, realized and unrealized gains /losses, and fund expenses. The
investments in mutual funds, common stock and the common collective trust fund
are expressed in unit values which are calculated daily based on the total fair
value of the underlying assets of the unitized fund. Investments in loans to
participants are valued at fair value, which is approximated by cost.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that could affect the reported amounts of assets, liabilities and other
additions to or deductions from net assets. Actual results could differ from
those estimates.
Reclassification
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 financial statement presentation.
7
<PAGE>
Friedman's Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments
On July 1, 1998, the Company registered 100,000 shares of its Class A common
stock with the Securities and Exchange Commission thus allowing the Plan to
provide participants with the option to invest in the Friedman's Inc. Stock Fund
subsequent to July 1, 1998.
Investments that represent 5 percent or more of the Plan's net assets at
December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------------
<S> <C> <C>
Investments at fair value as determined by trustee:
Units in mutual funds:
Evergreen Treasury Money Market Fund $1,766,426 $1,548,110
Fidelity Magellan Fund 1,017,641 546,362
Weiss, Peck and Greer Tomorrow Medium-Term Fund
356,880 311,314
Units in collective trust fund:
First Union Enhanced Stock Fund 471,249 322,610
Units in common stock:
Friedman's Inc. Stock Fund - 216,003
Participant loans 228,832 184,918
</TABLE>
During 1999, the Plans investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$283,183 as follows:
<TABLE>
<S> <C>
Mutual funds $265,003
Friedman's Inc. Stock Fund (51,141)
First Union Enhanced Stock Fund 69,321
-----------
Net appreciation $283,183
===========
</TABLE>
8
<PAGE>
Friedman's Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated September 2, 1997, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue (the "Code") and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan's Administrative Committee
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
5. Transactions with Parties-in-Interest
The Trustee routinely invests assets in the Enhanced Stock Fund of First Union
National Bank. For the year ended December 31, 1999, transactions with this fund
included 46 purchases at a total cost of $193,320 and 34 sales with a fair value
of $114,001. For the year ended December 31, 1998, transactions with this fund
included 60 purchases at a total cost of $171,698 and 46 sales with a fair value
of $106,721.
9
<PAGE>
Friedman's Inc. Retirement Savings Plan
EIN: 58-0249470
Plan No.: 002
Schedule H Line 4i
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
(b) (e)
Identity of Issue, Borrower, Current
(a) Lessor, or Similar Party (c) Value
Issuer Description of Investment
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mutual Funds:
Evergreen Funds Distributor, Inc. Treasury Money Market Fund $1,766,426
Evergreen Funds Distributor, Inc. Short-Intermediate Bond Fund 49,097
Fidelity Management Trust Company Magellan Fund 1,017,641
Weiss, Peck and Greer Investments Tomorrow Short-Term Retirement Fund 134,918
Weiss, Peck and Greer Investments Tomorrow Medium-Term Retirement Fund 356,880
Weiss, Peck and Greer Investments Tomorrow Long-Term Retirement Fund 96,384
Collective Trust Fund:
* First Union National Bank 4,503 units, Enhanced Stock Fund 471,249
Common Stock:
* Friedman's Inc. 19,320 units, Stock Fund 160,409
-----------
4,053,004
Participant loans Interest rates ranging from
7.75%-8.50%, due no later than 2004 228,832
-----------
$4,281,836
===========
</TABLE>
*Indicates a party-in-interest to the Plan.
Note: Cost information has not been included in column (d) because all
investments are participant directed.
10
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the plan
committee members have duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
RETIREMENT SAVINGS PLAN OF FRIEDMAN'S INC.
By: /s/ Victor M. Suglia
----------------------
Victor M. Suglia
Senior Vice President and Chief Financial
Officer
Date: June 28, 2000
11
