-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M44OSymJlYbcj5WZBUB4/5sj2mkCFcFIbhVGwMB6tkpNrYyNsFNX/ULqHzNMIVQR FLCB0ge2Crkb74IsBhvXFA== 0000912057-96-017628.txt : 19960816 0000912057-96-017628.hdr.sgml : 19960816 ACCESSION NUMBER: 0000912057-96-017628 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN BEN RETAIL STORES INC /DE/ CENTRAL INDEX KEY: 0000880928 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISC DURABLE GOODS [5090] IRS NUMBER: 251552155 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20079 FILM NUMBER: 96611772 BUSINESS ADDRESS: STREET 1: 500 E NORTH AVE CITY: CAROL STREAM STATE: IL ZIP: 60188-2168 BUSINESS PHONE: 7084626100 MAIL ADDRESS: STREET 1: 500 E NORTH AVE CITY: CAROL STREAM STATE: IL ZIP: 60188 10-K/A 1 10-K/A - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 1996 COMMISSION FILE NUMBER 0-20079 BEN FRANKLIN RETAIL STORES, INC. -------------------------------------- (Exact Name of Registrant as Specified in its Charter) DELAWARE 25-1552155 -------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 500 E. North Avenue, Carol Stream, Illinois 60188-2168 - ------------------------------------------- ------------ (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's Telephone Number, Including Area Code 708-462-6100 -------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of each class Common Stock - par value $.01 per share 7-1/2% Convertible Subordinated Notes Due June 1, 2003 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No. X. Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. [X] At June 14, 1996 the aggregate market value of voting stock held by non- affiliates of the registrant was approximately $7,573,358. At June 14, 1996 there were 5,462,750 shares of registrant's common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None THIS AMENDMENT TO THE FORM 10-K FILED ON JULY 15, 1996, BY BEN FRANKLIN RETAIL STORES, INC. (THE "COMPANY") IS BEING MADE SOLELY TO PROVIDE THE INFORMATION REQUIRED BY PART III OF FORM 10-K AND SHOULD NOT BE CONSTRUED AS AN INDICATION THAT NO MATERIAL CHANGES HAVE OCCURRED WITH RESPECT TO THE INFORMATION CONTAINED IN THE JULY 15, 1996 10-K FILING. AS DISCLOSED IN THE COMPANY'S PRESS RELEASE OF JULY 26, 1996, AND THE COMPANY'S FORM 8-K, FILED WITH THE COMMISSION ON AUGUST 9, 1996, THE COMPANY AND CERTAIN OF ITS SUBSIDIARIES HAVE FILED FOR PROTECTION FROM THEIR CREDITORS PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE. PART III ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information as of July 31, 1996 with respect to those persons who are presently directors or executive officers of the Company. Each director holds office until the annual meeting of the Company's shareholders held for the year indicated below and each officer holds office until the next annual meeting of directors:
Principal Occupation and Period of Business Experience During Service as Name Age the Past Five Years Directorships Company Director ---- --- ----------------------------------- --------------- ---------------- DIRECTORS Terms expiring in 1996: Alfred H. Kingon 65 Principal of Kingon International, FoxMeyer Health 1991-Present Inc., an international investment Corporation and consulting firm. Robert A. Kendig 49 1995-Present: President and 1996-Present Chief Operating Officer of the Company. 1994-1995: Sr. Vice President- Merchandising and Advertising of the Company. 1993-1994: President of Office America Corp. 1991-1993: Executive Vice President and Chief Operating Officer of Office America Corp.
Principal Occupation and Period of Business Experience During Service as Name Age the Past Five Years Directorships Company Director ---- --- ----------------------------------- --------------- ---------------- Terms Expiring in 1997: Abbey J. Butler (Co-Chairman) 59 1991-Present: Co-Chief FoxMeyer Health 1991-Present Executive Officer of FoxMeyer Corporation; FWB Health Corporation, a holding Bancorporation company involved in health care services, managed care services, and distribution of pharmaceutical products and health and beauty aids. Melvyn J. Estrin (1) 1991-Present; Co-Chief FoxMeyer Health 1991-Present (Co-Chairman) Executive Officer of FoxMeyer Corporation, Health Corporation. Washington Gas Light Company; FWB Bancorporation Terms Expiring in 1998: Harvey A. Fain 58 1982-Present: President and 1991-Present Chief Executive Officer of Harvey A. Fain & Co., Inc., a computer consulting company. Sheldon W. Fantle 73 1990-Present: Chairman and FoxMeyer Health 1991-Present Chief Executive Officer of Fantle Corporation Enterprises, Inc., a venture capital, consulting and public relations firm. William A. Lemer (1) 55 Private investor and real estate 1991-Present developer. EXECUTIVE OFFICERS David A. Brainard 37 1994-Present: Sr. Vice President- Chief Financial Officer of the Company. 1991-1993: Vice President-Accounting and Finance of the Company. Richard T. Krubeck 51 1991-Present: Sr. Vice President- General Counsel and Secretary of the Company.
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Principal Occupation and Period of Business Experience During Service as Name Age the Past Five Years Directorships Company Director ---- --- ----------------------------------- --------------- ---------------- Robert M. Spencer 56 1996-Present: Executive Vice President-Operations of the Company. 1993-1996: Private Investor. 1988-1993: President and Chief Executive Officer of McCrory Stores Corp. Edward Walker 63 1991-Present: Sr. Vice President- Franchise Business Services of the Company. David J. Laroche 34 1996-Present: Vice President- Controller and Chief Accounting Officer of the Company. 1995: Controller for SportsTown, Inc. 1993-1995: Senior Manager, Merchandise Accounting for The Home Depot, Inc. 1990-1993: Director of Financial Operations for Ames Department Stores, Inc. Michele M. Benoit 40 1995-Present: Vice President- Human Resources of the Company. 1994-1995: Vice President and Managing Director of Kennedy and Company. 1987-1993: Director of Human Resources for Montgomery Ward & Co., Inc. Phyllis A. DiNaro 38 1992-Present: Vice President- Financial Planning of the Company. 1991-1992: Senior Financial Analyst for Macmillan/McGraw Hill Publishing Co. David J. Larson 49 1987-Present: Vice President- North Central Region of the Company. C. Wayne Pyrant 46 1991-Present: Vice President- Franchise Sales of the Company. Scott E. Sayers 45 1995-Present: Vice President- Information Systems of the Company. 1989-1994: Director of PC Systems for the Company. Donald V. Streu 64 1991-Present: Vice President- Merchandising of the Company.
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Principal Occupation and Period of Business Experience During Service as Name Age the Past Five Years Directorships Company Director ---- --- ----------------------------------- --------------- ---------------- Kent Wise 50 1995-Present: Vice President- Eastern Region of the Company. 1993-1995: Vice President - Western Region of the Company. 1986-1993: Executive Vice President of McCrory Stores Corp. Tom Gasperini 47 1995-Present: Vice President- Western Region of the Company. 1994-1995: District Manager for Circuit City, Inc. 1985-1994: Regional Vice President of McCrory Stores Corp.
- ------------------------------ (1) Mr. Estrin and Mr. Lemer are brothers-in-law. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Section 16(a) of the Securities and Exchange Act of 1934 requires the Company's Directors, executive officers and persons who beneficially own more than 10% of the Company's Common Stock to file with the Securities and Exchange Commission initial reports of beneficial ownership of the Common Stock and reports of changes in such ownership. To the Company's knowledge, based solely upon a review of copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended March 31, 1996, its officers, Directors and greater than 10% beneficial owners complied with all applicable Section 16(a) filing requirements. ITEM 11 - EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The Summary Compensation Table below includes, for each of the fiscal years ended March 31, 1996, 1995 and 1994, individual compensation for services to the Company and its subsidiaries paid to the two persons who served as Chief Operating Officer of the Company in Fiscal 1996 and the four other most highly paid executive officers of the Company in Fiscal 1996 whose salary and bonus exceeded $100,000 (the "Named Executives"). -4-
Long Term Annual Compensation Compensation Securities Name and Principal Other Annual Underlying All Other Position Bonus Compensation Options Compensation Year Salary ($) ($)(3) ($)(4) (#)(5) ($)(6) - ------------------- ----- ---------- ------- ------------ --------- ----------------- Robert A. Kendig 1996 240,385 -- 12,400 71,000 -- President and Chief 1995 184,692 24,750 8,400 46,000 37,087(7) Operating Officer(1) 1994 -- -- -- -- -- John B. Menzer 1996 164,184 -- 6,498 -- 4,005 President and Chief 1995 260,000 112,700 14,400 50,000 6,724 Operating 1994 223,333 -- 12,200 18,000 7,773 Officer(2) Richard T. Krubeck 1996 137,500 -- 9,600 56,000 7,045 Senior Vice 1995 127,250 37,250 9,600 21,000 5,951 President, General 1994 120,048 5,000 9,600 10,000 6,754 Counsel and Secretary David A. Brainard 1996 128,000 -- 9,600 46,000 6,721 Senior Vice 1995 100,000 24,350 9,600 21,000 4,725 President and Chief 1994 86,547 13,750 9,600 10,000 4,513 Financial Officer Kenneth L. Fisher 1996 124,557 4,000 -- 14,500 5,965 Vice President - 1995 120,345 4,000 -- 7,000 5,416 Distribution and 1994 117,985 -- -- -- 5,309 Transportation(9) Kent Wise 1996 117,540 7,500 -- 14,500 65,395(8) Vice President - 1995 103,000 6,500 -- 7,000 4,303 Western Region 1994 61,026 263 -- 7,500 17,723
- --------------------------------------- (1) Mr. Kendig was named to the office of President and Chief Operating Officer of the Company on August 25, 1995. He previously held the position of Senior Vice President-Merchandising and Advertising of the Company. (2) Mr. Menzer resigned from the Company on August 25, 1995. (3) Pursuant to the Company's Executive Incentive Compensation Plan. (4) These amounts represent a car allowance for each Named Executive. (5) 1996 option grants reflect the cancellation of options granted in prior years and the issuance of new options in identical amounts. See "Option Grants in the Last Year" below. (6) Except as otherwise indicated, represents amounts contributed to the accounts of the Named Executives pursuant to the Company's Employees' Savings Plan. (7) Includes $16,223 of moving and related expenses of joining the employ of the Company. -5- (8) Includes $59,503 of moving and related expenses of relocation. (9) Mr. Fisher left the employ of the Company during Fiscal 1997. OPTION GRANTS IN THE LAST YEAR Shown below is information on grants of stock options pursuant to the Company's Stock Option and Performance Award Plan (the "Option Plan") during the fiscal year ended March 31, 1996, to the Named Executives who are reflected in the Summary Compensation Table.
INDIVIDUAL GRANTS IN FISCAL 1996(1) NUMBER OF POTENTIAL REALIZABLE VALUE AT SECURITIES PERCENTAGE OF ASSUMED ANNUAL RATES OF STOCK UNDERLYIING TOTAL OPTIONS PRICE APPRECIATION OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ---------------- (#)(2) FISCAL YEAR PER SHARE DATE 5% 10% ------ ----------- --------- ----------- --------- -------- Kendig.......... 71,000 9.3% $1.8125 2/8/06 $173,025 $438,478 Menzer.......... --- --- --- --- --- --- Krubeck......... 56,000 7.3% $1.8125 2/8/06 $136,470 $345,842 Fisher.......... 14,500 1.9% $1.8125 2/8/06 $35,336 $89,548 Wise........... 14,500 1.9% $1.8125 2/8/06 $35,336 $89,548 Brainard........ 46,000 6.0% $1.8125 2/8/06 $112,100 $284,085
- ---------------------------------- (1) All options were granted to the Named Executives on February 9, 1996. The exercise price of each option was the closing sale price of the Common Stock as quoted on the Nasdaq Stock Market National Market System on the grant date. One-third of the options will become exercisable on each of the first, second, and third anniversaries of the grant date, unless otherwise provided in the Option Plan. (2) Immediately prior to the option grants set forth below, all outstanding options held by the Named Executives were cancelled. All of the option grants set forth below were in an amount equal to the options so cancelled. Among those options cancelled were options for 25,000 shares of Common Stock granted to Mr. Kendig on September 27, 1995, immediately subsequent to his election as President and Chief Operating Officer of the Company. No other grants of options to Named Executives occurred in Fiscal 1996, prior to the grants set forth below. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES Shown below is information with respect to (i) options exercised by the Named Executives pursuant to the Option Plan during Fiscal 1996; and (ii) unexercised options granted in Fiscal 1996 and prior years under the Option Plan to the Named Executives and held by them at March 31, 1996. -6-
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN- OPTIONS AT 3/31/96 THE-MONEY OPTIONS AT SHARES ACQUIRED EXERCISABLE/ 3/31/96(1) EXERCISEABLE/ NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE (#) UNEXERCISABLE ---- -------------- ----------------- ----------------- ------------- Kendig........... -0- -0- 0 / 71,000 $0 / $22,188 Menzer........... -0- -0- 75,000/0 $0/$0 Krubeck.......... -0- -0- 0 / 56,000 $0 / $17,500 Fisher........... -0- -0- 0 / 14,500 $0 /$ 4,531 Wise............. -0- -0- 0 / 14,500 $0 /$ 4,531 Brainard......... -0- -0- 0 / 46,000 $0 / $14,375
- -------------------------------- (1) Based on the closing sale price as quoted on the Nasdaq Stock Market National Market System on that date. DIRECTOR COMPENSATION Messrs. Butler and Estrin each receive compensation at the rate of $108,000 per annum for employment services as Co-Chairman of the Board of Directors of the Company. In such capacities, Messrs. Butler and Estrin provide substantial, but not full-time, services to the Company, including strategic planning, supervisory and managerial assistance with respect to stockholder communications, financial community relations, and other matters. In February 1995, the Company entered into employment agreements with Messrs. Butler and Estrin pursuant to which Messrs. Butler and Estrin each agreed to serve as Co-Chairman of the Company for a three-year term ending on January 31, 1998 at a minimum annual base salary of $108,000 each, subject to periodic adjustment at the discretion of the Board of Directors of the Company. Messrs. Butler and Estrin are also entitled to participate in the Company's employee benefit programs. Neither Mr. Butler nor Mr. Estrin was paid any bonus for Fiscal 1996. Each Director of the Company, other than Messrs. Butler, Estrin and Kendig, receive an annual fee of $12,000 for their services as Directors. Such Directors also receive $850 for each meeting attended of the Board of Directors or of a committee of the Board of Directors (other than the Executive Committee). Chairmen of each of the committees, other than Messrs. Butler and Estrin, also receive $500 for each meeting of the committee attended. Directors are reimbursed for travel and lodging expenses in connection with board and committee meetings. The Company's Option Plan presently provides that options to purchase 4000 shares of Common Stock are automatically granted to each non-employee Director annually on the third trading date following the later of: (i) the date of the annual meeting of stockholders or (ii) the date on which the Company's earnings for the fiscal quarter immediately preceding such annual meeting date are released to the public. Individuals who are first elected or appointed to serve as Directors will receive an initial grant of an option to purchase 5,000 shares, but will not be entitled to receive the automatic grant of 4,000 shares in the year first elected or appointed as a Director. This initial grant is made on the third trading date following such election or appointment. EMPLOYMENT AGREEMENT Mr. Menzer, who resigned from the Company on August 25, 1995, and the Company were parties to an employment agreement pursuant to which Mr. Menzer was to have been employed by the Company until May 5, 1997, and was entitled to a minimum annual base salary of $260,000 and to participate in the Company's employee benefit programs. -7- COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Option, Personnel and Compensation Committee of the Board (the "Compensation Committee") reviews the performance of corporate management and makes recommendations to the full Board with respect to the compensation of management and the establishment of management compensation plans. The Compensation Committee also grants options pursuant to the Company's Stock Option and Performance Award Plan and determines the number, price and terms of granted options. This Committee is presently comprised of Mr. Fantle, who is the Chairman, and Messrs. Fain and Lemer. ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the number of shares of the Company's Common Stock beneficially owned as of July 31, 1996 by: (i) persons known by the Company to own more than 5% of the Company's outstanding Common Stock; (ii) Directors of the Company; (iii) each of the Named Executives identified in the Summary Compensation Table under "Compensation of Directors and Executive Officers"; and (iv) all Directors and executive officers of the Company as a group.
NATURE OF SHARES NAME AND ADDRESS AND NATURE OF PERCENT OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS - -------------------- -------------------- -------- FoxMeyer Health Corporation(1).......................... 953,877 17.46% 1220 Senlac Drive Carrollton, Texas 75006 Wechsler & Co., Inc.(2)................................. 731,293(3) 12.03% Suite 310 105 South Bedford Road Mount Kisco, New York 10549 Wellington Management Company(4)........................ 722,968(5) 12.01% 75 State Street Boston, Massachusetts 02109 Tweedy, Browne Company, L.P.(6)......................... 475,465(6) 8.70% 52 Vanderbilt Avenue New York, New York 10017 State of Wisconsin Investment Board(7).................. 396,142(7) 7.25% P.O. Box 7842 Madison, Wisconsin 53707 Butler Equities II, L.P.(8)............................. 314,667(8) 5.76% 207 Dune Road Box 137 Westhampton Beach, New York 11978 Abbey J. Butler(1)...................................... 13,609(9) * Melvyn J.Estrin(1)(10).................................. 68,499(11) 1.25% John B. Menzer.......................................... 75,000(12) 1.35% Robert Kendig........................................... 14,100 * Harvey A. Fain.......................................... 7,000(13) * -8-
NATURE OF SHARES NAME AND ADDRESS AND NATURE OF PERCENT OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS - -------------------- -------------------- -------- Sheldon W. Fantle....................................... 7,150(14) * Alfred H. Kingon........................................ 7,000(15) * William A. Lemer........................................ 11,506(16) * Richard T. Krubeck...................................... 8,736(17) * David A. Brainard....................................... 16,100 * Kenneth L. Fisher....................................... 1,500 * Kent Wise............................................... -0- * All Directors and executive officers as a group......... 284,149(18) 5.10% (21 persons)
* Less than one percent _____________________________ (1) As of July 31, 1996, Messrs. Butler and Estrin and entities controlled by them beneficially owned 3,589,221 shares, or approximately 20.09%, of the outstanding common stock of FoxMeyer. (2) Weschler & Co., Inc. is a registered securities broker and dealer. Mr. Norman J. Weschler is the majority stockholder, Chairman of the Board and President of Weschler & Co., Inc., and may be deemed to beneficially own the shares held by such company. This information is based upon a Schedule 13G provided to the Company by Weschler & Co., Inc. (3) Includes 614,194 shares issuable upon conversion of the Company's 7-1/2% Convertible Subordinated Notes Due June 1, 2003. (4) Wellington Management Company is a registered investment adviser which is deemed a beneficial owner of shares owned by its investment advisory clients and those investment advisory clients of its wholly-owned subsidiary, Wellington Trust Company, National Association. This information is based upon a Schedule 13G provided to the Company by Wellington Management Company. (5) Includes shares issuable upon conversion of the Company's 7-1/2% Convertible Subordinated Notes Due June 1, 2003. (6) Tweedy, Browne Company, L.P. ("TBC") is a registered securities broker and dealer and investment adviser which is deemed a beneficial owner of shares held in the accounts of its customers. The general partners of TBC are Christopher H. Browne, William H. Browne, James M. Clark, Jr. and John D. Spears, each of whom may be deemed to beneficially own the shares held by TBC. This information is based upon a Schedule 13D, as amended, provided to the Company on behalf of TBC. (7) The State of Wisconsin Investment Board manages public pension funds and is deemed a beneficial owner of the shares owned by such funds. This information is based upon a Schedule 13G provided to the Company by The State of Wisconsin Investment Board. Includes shares issuable upon conversion of the Company's 7-1/2% Convertible Subordinated Notes Due June 1, 2003. -9- (8) Butler Equities II, L.P. is a Delaware limited partnership, the principal business of which is investing in securities. The sole general partner of such partnership is AB Acquisition Corp., all of the outstanding capital stock of which is owned by Mr. Butler. (9) Does not include shares owned by FoxMeyer or Butler Equities II, L.P. (10) Mr. Estrin controls MJE, Inc., a Virginia corporation ("MJE"), and owns a majority of the outstanding capital stock of Human Service Group, Inc., a Delaware corporation with a wholly-owned subsidiary, HSG Acquisition Co., a Delaware corporation ("HSG"). MJE and HSG are the general partners of Estrin Equities Limited Partnership, a Maryland limited partnership which beneficially owns 116,103 shares, or 2.12%, of the Company's outstanding Common Stock. (11) Includes 10,000 shares held as co-trustee for two trusts as to which Mr. Estrin disclaims beneficial ownership. Does not include shares owned by FoxMeyer or Estrin Equities Limited Partnership. (12) Shares subject to options presently exercisable or exercisable within 60 days. (13) Shares subject to options presently exercisable or exercisable within 60 days. (14) Includes 7,000 shares subject to options presently exercisable or exercisable within 60 days. (15) Shares subject to options presently exercisable or exercisable within 60 days. (16) Includes 7,000 shares subject to options presently exercisable or exercisable within 60 days. (17) Includes 1,935 shares issuable upon conversion of the Company's 7-1/2% Convertible Subordinated Notes Due June 1, 2003. (18) The number of shares beneficial owned by all Directors and executive officers as a group (i) excludes shares owned by FoxMeyer, Butler Equities II, L.P., and Estrin Equities Limited Partnership and (ii) includes 103,000 shares subject to options presently exercisable or exercisable within 60 days and 1,935 shares issuable upon conversion of the Company's 7-1/2% Convertible Subordinated Notes Due June 1, 2003. ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company currently leases from FoxMeyer Corporation its executive offices located in Carol Stream, Illinois and a 5,000 square foot data processing center located in Wichita, Kansas. During Fiscal 1996, the aggregate amount charged as rent and shared operating expenses to the Company under the lease for its executive offices was $2,000,000 and the annual rent for the data processing center was approximately $133,000. The lease for the executive offices expires on December 31, 2006 and the lease for the data processing center expires March 31, 1997. Based upon its examination of rents for comparable facilities in such areas, the Company believes that the terms of such leases were consistent with prevailing market rents. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. BEN FRANKLIN RETAIL STORES, INC. August 13, 1996 By: /S/ DAVID A. BRAINARD ---------------------- David A. Brainard, Senior Vice President- Chief Financial Officer -11- -----END PRIVACY-ENHANCED MESSAGE-----