10-Q 1 l84531ae10-q.txt D.I.Y. HOME WAREHOUSE, INC. 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number 0-21768 D.I.Y. Home Warehouse, Inc. --------------------------- (Exact name of registrant as specified in its charter) State of Ohio 38-2560752 (State of Incorporation) (I.R.S. Employer I.D. No.) 5811 Canal Road Valley View, Ohio 44125 (216) 328-5100 (Address of principal executive offices and telephone number) 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 __X__ No_____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at September 30, 2000 -------------------------- --------------------------------- Common Stock, no par value 7,276,059 2 D.I.Y. HOME WAREHOUSE, INC.

2 3 PART I - FINANCIAL INFORMATION D.I.Y. HOME WAREHOUSE, INC. CONDENSED BALANCE SHEET

See accompanying notes to condensed financial statements. 3 4 D.I.Y. HOME WAREHOUSE, INC. CONDENSED STATEMENT OF OPERATIONS (Unaudited)

See accompanying notes to condensed financial statements. 4 5 D.I.Y. HOME WAREHOUSE, INC. CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (Unaudited)

See accompanying notes to condensed financial statements. 5 6 D.I.Y. HOME WAREHOUSE, INC. CONDENSED STATEMENT OF CASH FLOWS (Unaudited)

See accompanying notes to condensed financial statements. 6 7 D.I.Y. HOME WAREHOUSE, INC. Notes to Condensed Financial Statements (Unaudited) 1. Basis of Presentation In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2000 and the results of operations and cash flows for the three and nine months ended September 30, 2000 and October 2, 1999. The condensed financial statements should be read in conjunction with the financial statements and notes contained in the Company's Annual Report filed on Form 10-K. The results of operations for any interim period should not necessarily be considered indicative of the results of operations for the full year. 2. Earnings Per Share Earnings per share have been computed according to Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 128, "Earnings Per Share" as follows: COMPUTATION OF EARNINGS PER COMMON SHARE (BASIC AND DILUTED)

Options to purchase 820,500 shares of common stock at a weighted average exercise price of $3.01 per share were outstanding at September 30, 2000 but were not included in the computation of diluted earnings per share for the three and nine months then ended because the options would have had an anti-dilutive effect on the net losses for both periods. 7 8 Options to purchase 908,000 shares of common stock at a weighted average exercise price of $3.19 per share were outstanding at October 2, 1999 but were not included in the computation of diluted earnings per share for the three months then ended because the options' exercise prices were greater than the average market price for the common shares during the period. Options to purchase 908,000 shares of common stock at a weighted average exercise price of $3.19 per share were outstanding at October 2, 1999 but were not included in the computation of diluted earnings per share for the nine months then ended because the options would have had an anti-dilutive effect on the net loss for the period. 3. Store Closings On August 14, 2000, the Company announced the closing of its North Randall, Ohio and Tallmadge Avenue (Akron, Ohio), locations. In connection with the store closures, the Company recorded a charge of $1,593,293 for costs expected to be incurred in closing both locations, including $854,575 in net rent obligations for the North Randall store. Additionally, the Company also recorded a $684,890 write-off of the net leasehold improvements and property and equipment related to the closure of the North Randall and Tallmadge Avenue stores. These charges were recorded in the store closing costs line item in the accompanying condensed statement of operations. Concurrent with the closure of these two stores, the Company entered into an agreement (the Agreement) with a third party to act as its agent to sell the merchandise inventories at these closed locations. The Company received a guaranteed amount from the inventory liquidation based on a formula outlined in the Agreement. This Agreement resulted in inventory markdown costs of $1,240,876 which were included in the cost of sales line item in the accompanying condensed statement of operations. The Company is currently in negotiations to sublease the North Randall store. Any sublease rental income generated by the North Randall store will be recorded as a reduction to the net rent obligation accrued for at September 30, 2000. 4. Long-term Financing During the third quarter of fiscal year 2000, the Company permanently reduced its aggregate revolving credit commitment from $20,000,000 to $13,000,000 under the terms of its October 27, 1998 Credit and Security (the "Credit Agreement"). Additionally, during this same period, the Company violated certain of the restrictive covenants under the Credit Agreement arising from the Company's year-to-date fiscal year 2000 financial results. Subsequent to September 30, 2000, the Company entered into an agreement with the bank waiving the restrictive covenant violations and amending the Credit Agreement. The amended Credit Agreement reduced the aggregate revolving credit commitment from $13,000,000 to $10,000,000 and replaced the original financial covenants. 8 9 5. Income Taxes During the third quarter of fiscal year 2000, the Company established a valuation allowance of $1,607,048 against its net deferred tax assets in accordance with the provisions of the FASB Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The establishment of the valuation allowance was based on the Company's current assessment that it was more likely than not that such assets would not be realized through future taxable income or implementation of tax planning strategies. This valuation allowance was recorded in the income tax provision line item in the accompanying condensed statement of operations. Additionally, during the third quarter of fiscal year 2000, the Company reversed the $901,348 of tax benefit previously recognized during the first six months of fiscal year 2000 for that period's net operating loss. The reversal of the tax benefit was based on the Company's current assessment that it is more likely than not that these assets would not be utilized through future taxable income or implementation of tax planning strategies. This charge was recorded in the income tax provision line item in the accompanying condensed statement of operations. 9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS - Three Months Ended September 30, 2000 Compared to Three Months Ended October 2, 1999 Net sales for the third quarter ended September 30, 2000 decreased $10,616,000 or 36.2% to $18,693,000 from $29,310,000 during the third quarter ended October 2, 1999. The decrease in total net sales between the two periods was due to additional competition from national warehouse retailers in the Company's markets and fewer Company stores. Continuing store net sales, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, decreased $8,481,000 or 32.6% between the third quarter ended September 30, 2000 and the same period a year ago. The decrease in continuing store net sales between the two periods was the result of additional competition from national warehouse retailers in the Company's markets. The Company anticipates that continuing store net sales for the remainder of fiscal year 2000 will be below the continuing store net sales recorded during the same period in the prior year. Gross profit as a percentage of net sales decreased to 20.0% during the third quarter ended September 30, 2000 from 27.6% during the third quarter ended October 2, 1999. Negatively impacting the gross profit percentage during the third quarter ended September 30, 2000 was $1,241,000 of inventory markdown costs included in cost of sales for the liquidation of the merchandise inventory at the two stores closed during the current quarter. Continuing store gross profit as a percentage of net sales, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, decreased to 26.8% during the third quarter ended September 30, 2000 from 27.8% during the same period a year ago. The Company anticipates that the continuing store gross profit percentage for the remainder of fiscal year 2000 will be comparable with the continuing store gross profit percentage experienced during the same period in the prior year. Store operating, general and administrative expenses decreased $743,000 or 10.2% to $6,529,000 during the third quarter ended September 30, 2000 from $7,272,000 during the third quarter ended October 2, 1999. The decrease in total store operating, general and administrative expenses between the two periods was due to the Company's continued management of controllable expenses and the reduction of costs associated with fewer Company stores. Continuing store operating, general and administrative expenses, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, decreased $276,000 or 4.4% during the third quarter ended September 30, 2000 from comparable results recorded during the same period a year ago. The decrease in continuing store operating, general and administrative expenses reflects the Company's continued management of controllable expenses. This management of controllable expenses included lower personnel costs resulting from reduced 10 11 store and corporate staffing levels, a reduction in the utilization of outside services and an overall reduction in general operating expenses. The Company anticipates that continuing store operating, general and administrative expenses for the remainder of fiscal year 2000 will be below the continuing store operating, general and administrative expenses recorded during the same period in the prior year. During the third quarter of fiscal 2000, the Company announced the closing of its North Randall, Ohio and Tallmadge Avenue (Akron, Ohio), locations. In connection with the store closures, the Company recorded a charge of $1,593,000 for costs expected to be incurred in closing both locations, including $855,000 in net rent obligations for the North Randall store. Additionally, the Company also recorded a $685,000 write-off of the net leasehold improvements and property and equipment related to the closure of the North Randall and Tallmadge Avenue stores. These charges were recorded in the store closing costs line item in the accompanying condensed statement of operations. The Company is currently in negotiations to sublease the North Randall store. Any sublease rental income generated by the North Randall store will be recorded as a reduction to the net rent obligation accrued for at September 30, 2000. Other expense, net, increased $27,000 or 18.6% to $174,000 during the third quarter ended September 30, 2000 from $147,000 during the third quarter ended October 2, 1999. The increase in other expense, net between the two periods was due primarily to the increase in the weighted average interest rate on the Company's revolving credit facility borrowings. During the third quarter ended September 30, 2000, the Company established a valuation allowance of $1,607,000 against its net deferred tax assets in accordance with the provisions of the FASB Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The establishment of the valuation allowance was based on the Company's current assessment that it was more likely than not that such assets would not be realized through future taxable earnings or implementation of tax planning strategies. This valuation allowance was recorded in the income tax provision line item in the accompanying condensed statement of operations. Additionally, during the third quarter ended September 30, 2000, the Company reversed the $901,000 of tax benefit previously recognized during the first six months of fiscal year 2000 for that period's net operating loss. The reversal of the tax benefit was based on the Company's current assessment that it is more likely than not that these assets would not be utilized through future taxable income or implementation of tax planning strategies. This charge was recorded in the income tax provision line item in the accompanying condensed statement of operations. 11 12 OPERATIONS - Nine Months Ended September 30, 2000 Compared to Nine Months Ended October 2, 1999 Net sales for the nine months ended September 30, 2000 decreased $42,502,000 or 40.6% to $62,057,000 from $104,559,000 during the nine months ended October 2, 1999. The decrease in total net sales between the two periods was due to additional competition from national warehouse retailers in the Company's markets and fewer Company stores. Continuing store net sales, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, decreased $27,645,000 or 33.2% between the nine months ended September 30, 2000 and the same period a year ago. The decrease in continuing store net sales between the two periods was the result of additional competition from national warehouse retailers in the Company's markets. Gross profit as a percentage of net sales was 25.8% during the nine months ended September 30, 2000 in comparison to 25.6% during the nine months ended October 2, 1999. Negatively impacting the gross profit percentage for the nine months ended September 30, 2000 was $1,241,000 of inventory markdown costs included in cost of sales for the liquidation of the merchandise inventory at the two stores closed during the third quarter of fiscal year 2000. Conversely, the gross profit percentage for the nine months ended October 2, 1999 was negatively impacted by $1,773,000 of inventory markdown costs included in cost of sales for the liquidation of the merchandise inventory at the three stores closed during the second quarter of fiscal year 1999. Continuing store gross profit as a percentage of net sales, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, was 27.9% during the nine months ended September 30, 2000 in comparison to 27.7% during the same period a year ago. Store operating, general and administrative expenses decreased $5,578,000 or 21.3% to $20,658,000 during the nine months ended September 30, 2000 from $26,236,000 during the nine months ended October 2, 1999. Continuing store operating, general and administrative expenses, which excludes the operations of closed stores from the fiscal year 2000 and 1999 results, decreased $2,056,000 or 10.1% during the nine months ended September 30, 2000 from comparable results recorded during the same period a year ago. The decrease in continuing store operating, general and administrative expenses between the two periods reflects the Company's continued management of controllable expenses. This management of controllable expenses included lower personnel costs resulting from reduced store and corporate staffing levels, a reduction in the utilization of outside services and an overall reduction in general operating expenses. During the third quarter ended September 30, 2000, the Company announced the closing of its North Randall, Ohio and Tallmadge Avenue (Akron, Ohio), locations. In connection with the store closures, the Company recorded a charge of $1,593,000 for costs expected to be incurred in closing both locations, including $855,000 in net rent obligations for the North Randall store. Additionally, the Company also recorded a $685,000 write-off of the net leasehold improvements and property and equipment related to the closure of the North Randall 12 13 and Tallmadge Avenue stores. These charges were recorded in the store closing costs line item in the accompanying condensed statement of operations. During the first quarter ended April 3, 1999, the Company incurred $260,000 of store closing costs related to the Bedford, Ohio and Canton, Ohio stores closed during the fourth quarter of fiscal 1998. These expenses were recorded in the store closing costs line item in the accompanying condensed statement of operations. During the second quarter ended July 3, 1999, the Company announced the closure of three stores located in Boardman, Ohio; Mansfield, Ohio; and Akron, Ohio. Concurrent with the announcement, the Company sold the land and buildings of its Mansfield and Canton stores for $8,600,000, resulting in a pre-tax gain of $1,860,000. The gain on the sale of the property was offset by the expenses to close the three stores which included a $2,620,000 write-off of leasehold improvements and property and equipment, a $463,000 lease termination fee and other store closing costs of $102,000. The gain on the sale of property as well as the offsetting expenses were recorded in the store closing costs line item in the accompanying condensed statement of operations. During the third quarter ended October 2, 1999, the Company incurred $111,000 of store closing costs related to the three stores closed during the second quarter of fiscal 1999. These expenses were recorded in the store closing costs line items in the accompanying condensed statement of operations. Other expense, net, decreased $241,000 or 30.2% to $555,000 during the nine months ended September 30, 2000 from $796,000 during the nine months ended October 2, 1999. The decrease in other expense, net between the two periods was due to the reduction in interest expense associated with the extinguishment of the Company's mortgage loans during the second quarter of fiscal 1999. During the third quarter ended September 30, 2000, the Company established a valuation allowance of $1,607,000 against its net deferred tax assets in accordance with the provisions of the FASB Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The establishment of the valuation allowance was based on the Company's current assessment that it was more likely than not that such assets would not be realized through future taxable earnings or implementation of tax planning strategies. This valuation allowance was recorded in the income tax provision line item in the accompanying condensed statement of operations. Additionally, during the third quarter ended September 30, 2000, the Company reversed the $901,000 of tax benefit previously recognized through the first six months of fiscal year 2000 for that period's net operating loss. The reversal of the tax benefit was based on the Company's current assessment that it is more likely than not that these assets would not be utilized through future taxable income or implementation of tax planning strategies. This charge was recorded in the income tax provision line item in the accompanying condensed statement of operations. 13 14 The Company is currently in negotiations to sublease the North Randall store. Any sublease rental income generated by the North Randall store will be recorded as a reduction to the net rent obligation accrued for at September 30, 2000. LIQUIDITY AND CAPITAL RESOURCES The Company's net use of cash from operating activities increased $2,927,000 to $763,000 during the nine months ended September 30, 2000 from net cash provided by operating activities of $2,164,000 during the nine months ended October 2, 1999. The increase in the net use of cash from operating activities between the two periods was due primarily to the $7,950,000 cash flow impact of the increase in the Company's net loss, the $740,000 cash flow impact of the decrease in depreciation and amortization, the $1,935,000 cash flow impact of the decrease in the loss on the write-off of leasehold improvement and equipment from closed stores, the $660,000 cash flow impact of the reduction in accounts payable and the $400,000 cash flow impact of the accounts receivable for the sale of inventory. These uses of cash were partially offset by the $2,673,000 cash flow impact of the change in deferred income taxes, the absence in the current period of the cash flow impact of the $1,860,000 gain from the sale of property from the closed stores, the $857,000 cash flow impact of the reduction in merchandise inventory and the $3,264,000 cash flow impact of the increase in accrued expenses and other current liabilities. The Company's net use of cash in investing activities increased $7,830,000 to $33,000 during the nine months ended September 30, 2000 from net cash provided by investing activities of $7,797,000 during the nine months ended October 2, 1999. The increase in the net use of cash in investing activities between the two periods was due primarily to the absence, in the current period, of the $8,097,000 in net proceeds from the Company's sale of the land and buildings of its Mansfield and Canton stores during the second quarter of fiscal 1999. The Company's net cash provided by financing activities increased $10,303,000 to $649,000 during the nine months ended September 30, 2000 from net cash used in financing activities of $9,654,000 during the nine months ended October 2, 1999. The increase in the net cash provided by financing activities between the two periods was due primarily to the absence, in the current period, of $5,263,000 in long-term debt principal payments and $300,000 in note principal payments against the note payable, affiliate. Augmenting the impact of these principal payments was a $4,749,000 change in net borrowings against the revolving credit facility between the two periods. Total current and long-term debt amounted to $6,248,000 at September 30, 2000 in comparison to $5,599,000 at October 2, 1999. During the third quarter of fiscal year 2000, the Company permanently reduced its aggregate revolving credit commitment from $20,000,000 to $13,000,000 under the terms of its October 27, 1998 Credit and Security (the "Credit Agreement"). Additionally, during this same period, the Company violated certain of the restrictive covenants under the Credit Agreement arising from the Company's year-to-date fiscal year 2000 financial results. 14 15 Subsequent to September 30, 2000, the Company entered into an agreement with the bank waiving the restrictive covenant violations and amending the Credit Agreement. The amended Credit Agreement reduced the aggregate revolving credit commitment from $13,000,000 to $10,000,000 and replaced the original financial covenants. The home improvement, hardware and garden businesses are all highly competitive. The Company competes against traditional hardware, plumbing, electrical and home supply retailers, as well as warehouse-format and discount retail stores and many of the Company's competitors have substantially greater resources than the Company. Builders Square and Lowe's Company have had stores in the Company's markets since fiscal years 1985 and 1994, respectively. However, Builders Square exited the Northeastern Ohio marketplace during fiscal year 1999. Lowe's has continued to expand, opening additional locations in fiscal years 1996, 1997, 1998 and 2000. Beginning in the fourth quarter of fiscal year 1997 and continuing into fiscal year 2000, Home Depot has opened operations in several of the Company's markets. Both Home Depot and Lowe's have announced further expansion plans for the remainder of fiscal year 2000. In addition, there has been increasing consolidation within the home improvement industry, which may provide certain entities increased competitive advantages. Specifically, increased competition including, but not limited to, additional competitors' store locations, price reductions, and advertising and marketing campaigns could have a material adverse effect on the Company's business. Management believes that cash on hand, cash from operations and cash available through the Company's financing agreements will be sufficient to meet short-term and long-term working capital requirements. FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors. Accordingly, actual results may differ materially from those expressed in the forward-looking statements and the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. Important risk factors include, but are not limited to, the following: general economic conditions; consumer spending and debt levels; housing turnover; weather; impact on sales and margins from both existing and new competition; changes in operating expenses; changes in product mix; interest rates; changes in and the application of accounting policies and practices; adverse results in significant litigation matters; adverse state and federal regulations and legislation; the occurrence of extraordinary events including events and acts of nature or accidents; and the risks described from time to time in the Company's Securities and Exchange Commission filings. 15 16 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-K: 3.1 Articles of Incorporation of D.I.Y. Home Warehouse, Inc., as amended, incorporated herein by reference to Exhibit 3.1 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 3.2 Amended and Restated Code of Regulations of D.I.Y. Home Warehouse, Inc., incorporated herein by reference to Exhibit 3.2 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1 Compensation and Employee Benefit Plans of the Registrant 10.1.1 D.I.Y. Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended February 23, 1994 and Approved by Stockholders May 25, 1994, incorporated herein by reference to Exhibit 10.18 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.2 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Clifford L. Reynolds, incorporated herein by reference to Exhibit 10.22 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.3 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and R. Scott Eynon, incorporated herein by reference to Exhibit 10.23 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.4 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Dennis C. Hoff, incorporated herein by reference to Exhibit 10.24 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.5 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and John M. Erb, incorporated herein by reference to Exhibit 10.25 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.6 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Fred A. Erb, incorporated herein by reference to Exhibit 10.26 to the 16 17 Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.7 Tax Indemnification Agreement among D.I.Y. Home Warehouse, Inc. and Fred A. Erb, Clifford L. Reynolds, R. Scott Eynon, Dennis C. Hoff and John M. Erb, incorporated herein by reference to Exhibit 10.27 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.8 D.I.Y. Home Warehouse, Inc.'s 401K Plan, incorporated herein by reference to Exhibit 10.28 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1.9 1994 D.I.Y. Home Warehouse, Inc. Employee Bonus Plan dated May 25, 1994, incorporated herein by reference to Exhibit 10.48 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.1.10 Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. 10.1.10.a Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated November 21, 1996, incorporated herein by reference to Exhibit 10.51 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. 10.1.10.b Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.4 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.10.c Amendment No. 3 to Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.69 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. 10.1.10.d Amendment No. 4 to Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated November 30, 1999, incorporated herein by reference to Exhibit 10.1.10.d to the Registrant's 17 18 Report on Form 10-K for the fiscal year ended January 1, 2000. 10.1.11 Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. 10.1.11.a Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.11.b Amendment No. 2 to Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.70 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. 10.1.11.c Amendment No. 3 to Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated November 30, 1999, incorporated herein by reference to Exhibit 10.1.11.c to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. 10.1.12 Amended and Restated Employment Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.3 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. 10.1.12.a Amended and Restated Employment Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.13 Form of Non-Qualified Stock Option Agreement under the D.I.Y. Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended, incorporated herein by reference to Exhibit 10.14 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.1.14 1995 D.I.Y. Home Warehouse, Inc. Employee Bonus Plan dated May 24, 1995, incorporated herein by reference to Exhibit 10.44 to the 18 19 Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.1.15 D.I.Y. Home Warehouse, Inc. 1996 Retainer Stock Plan for Non-Employee Directors, incorporated herein by reference to Exhibit 10.49 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.1.16 Employment Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.17 Transaction Bonus Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.8 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.18 Transaction Bonus Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.19 Transaction Bonus Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.10 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.20 Transaction Bonus Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.11 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.1.21 Amendment No. 1 to Amended and Restated Employment Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.71 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. 10.1.22 DIY Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended March 17, 1999 and Approved by the Board of Directors March 17, 1999, incorporated herein by reference to Exhibit 10.13 to the Registrant's Report on Form 10-Q for the quarter ended July 3, 1999. 19 20 10.2 Material Leases of the Registrant 10.2.1 Sublease between D.I.Y. Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc., dated August 1, 1992, incorporated herein by reference to Exhibit 10.1 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.2 Indenture of Lease between Smith - D.I.Y. Center Limited Partnership and D.I.Y. Home Warehouse, Inc., dated December 27, 1985, incorporated herein by reference to Exhibit 10.2 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.3 Amendment to Lease between D.I.Y. Center Associates (successor in interest to Smith - D.I.Y. Center Limited Partnership) and D.I.Y. Home Warehouse, Inc., dated July 2, 1991, incorporated herein by reference to Exhibit 10.3 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.3.a Amendment to Lease between D.I.Y. Center Associates, L.P. and D.I.Y. Home Warehouse, Inc. dated March 21, 1995, incorporated herein by reference to Exhibit 10.51 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.2.4 Lease between Fred A. Erb and D.I.Y. Home Warehouse, Inc., dated March 1, 1993, incorporated herein by reference to Exhibit 10.4 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.5 Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc. dated August 2, 1991, incorporated herein by reference to Exhibit 10.5 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.5.a Addendum #1 to Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc., dated September 2, 1991, incorporated herein by reference to Exhibit 10.6 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.5.b Addendum #2 to Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc., dated September 16, 1991, incorporated herein by reference to Exhibit 10.7 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 20 21 10.2.6 Sublease between The Wholesale Club, Inc. and D.I.Y. Home Warehouse, Inc., dated May 14, 1992, incorporated herein by reference to Exhibit 10.8 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.7 Sublease between The Wholesale Club, Inc. and D.I.Y. Home Warehouse, Inc., dated November 25, 1992, incorporated herein by reference to Exhibit 10.9 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.8 Lease between Myron S. Viny, dba Central Valley Properties, and D.I.Y. Home Warehouse, Inc., dated February 26, 1993, but effective beginning May 1, 1993, incorporated herein by reference to Exhibit 10.12 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.2.8.a Modification and Supplement to lease between the Estate of Myron S. Viny (formerly DBA Central Valley Properties) and D.I.Y. Home Warehouse, Inc. dated November 27, 1995, incorporated herein by reference to Exhibit 10.12 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.2.8.b Modification and Supplement of lease between the Estate of Myron S. Viny (formerly DBA Central Valley Properties) and D.I.Y. Home Warehouse, Inc. dated March 30, 2000, incorporated herein by reference to Exhibit 10.2.8.b to the Registrant's Report on Form 10-Q for the quarter ended April 1, 2000. 10.2.9 Agreement of Lease (Boardman Facility) between DIY Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc. dated as of October 1, 1993, incorporated herein by reference to Exhibit 10.38 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. 10.2.9.a Second Amendment to Agreement Lease (Boardman facility) between D.I.Y. Home Warehouse, Inc. and D.I.Y. Ohio Real Estate Associated Limited Partnership (the Landlord) and assignment of the lease to V&V 224, Limited by the Landlord dated October 22, 1998, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 21 22 10.2.10 Lease between Elmhurst Properties, Inc. and D.I.Y. Home Warehouse, Inc., dated May 26, 1993, incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. 10.2.11 Assignment and Assumption of Lease and Sublease between Kmart Corporation and D.I.Y. Home Warehouse, Inc. dated December 22, 1994, incorporated herein by reference to Exhibit 10.49 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.2.12 Shopping Center Lease between KCHGC, Inc. and D.I.Y. Home Warehouse, Inc. dated January 12, 1995, incorporated herein by reference to Exhibit 10.50 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.3 Credit Agreements of the Registrant 10.3.1 $1,250,000 Promissory Note from D.I.Y. Home Warehouse, Inc. to Edgemere, Inc. f/k/a Erb Lumber Co., dated July 1, 1991, incorporated herein by reference to Exhibit 10.29 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.3.2 Security Agreement between D.I.Y. Home Warehouse and Erb Lumber Co., dated November 14, 1985, incorporated herein by reference to Exhibit 10.30 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.3.3 Revolving Credit Agreement and Security Agreement dated December 7, 1994 between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus, and Old Kent Bank and Trust Company, incorporated herein by reference to Exhibit 10.40 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.3.4 Loan and Co-lender Agreement and Open-End Mortgage, Assignment of Rents and Security Agreement dated December 23, 1994 between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus, and Old Kent Bank and Trust Company, incorporated herein by reference to Exhibit 10.41 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.3.4.a First Amendment to Loan and Co-Lender Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.41 to the 22 23 Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995 10.3.4.b Second Amendment to Loan and Co-Lender Agreement dated December 23, 1996 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.52 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. 10.3.4.c Third Amendment to Loan and Co-Lender Agreement dated October 24, 1997 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended September 27, 1997. 10.3.4.d Fourth Amendment to Loan and Co-Lender Agreement dated April 4, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.3.4.e Fifth Amendment to Loan and Co-Lender Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.4 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.5 Line of Credit Agreement for Real Estate Loans, Open-end Mortgage, Assignment of Rents and Security Agreement, and Mortgage Notes between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus and Old Kent Bank dated April 28, 1995, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended April 1, 1995. 10.3.5.a First Amendment to Line of Credit Agreement; Open-end Mortgage, Assignment of Rents and Security Agreement (Leasehold) for Trumbull County; Open-end Mortgage, Assignment of Rents and Security Agreement for Summit County; Mortgage Note to National City Bank, Columbus dated September 15, 1995; Mortgage Note to Old Kent Bank dated September 15, 1995, incorporated herein by reference 23 24 to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1995. 10.3.5.b Second Amendment to Line of Credit Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.3.5.c Third Amendment to Line of Credit Agreement Dated December 23, 1996 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.53 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. 10.3.5.d Fourth Amendment to Line of Credit Agreement dated October 24, 1997 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.3 to the Registrant's Report on Form 10-Q for the quarter ended September 27, 1997. 10.3.5.e Fifth Amendment to Line of Credit Agreement dated April 4, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. 10.3.5.f Sixth Amendment to Line of Credit Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.6 First Amendment to Security Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.38 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.3.7 First Amendment to Subordination Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and 24 25 Old Kent Bank, and Edgemere Enterprises, Inc., incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.3.8 Partial Release of Mortgage to Open-End Mortgage Assignment of Rents and Security Agreement for Richland County, Stark County, Summit County, Trumball County and Medina County by Old Kent Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.9 Modification to Revolving Credit Agreement, Line of Credit Agreement, and Loan and Co-lender Agreement between D.I.Y. Home Warehouse, Inc., National City Bank, Columbus, and Old Kent Bank dated February 20, 1996, incorporated herein by reference to Exhibit 10.42 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. 10.3.10 General Business Lease Agreement with IBM Credit Corporation dated May 30, 1996, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended June 29, 1996. 10.3.11 Amendment No. 1 to Open-End Mortgage, Assignment of Rents and Security Agreement for Richland County, Stark County, Summit County, Trumball County and Medina County between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.12 First Amendment to Mortgage Note between D.I.Y. Home Warehouse, Inc. and National City Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.8 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.13 Second Amendment to Security Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.14 Second Amendment to Subordination Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank, incorporated herein by reference to Exhibit 10.3 to the 25 26 Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.3.15 Credit and Security Agreement dated October 27, 1998 among D.I.Y. Home Warehouse, Inc. and the Lenders which are signatures hereto and National City Commercial Finance, Inc, as agent and National City Bank as Letter of Credit Bank, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 10.4 Real Estate Purchase Agreement (Mansfield) between DIY Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc. dated as of March 1, 1994, incorporated herein by reference to Exhibit 10.40 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. 10.5 Real Estate Purchase Agreement (Mansfield and Canton) between D.I.Y. Home Warehouse, Inc. and Gabriel Brothers, Inc. dated March 3, 1999, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. 10.6 Sale of Merchandise Agreement (Mansfield and West Market) between D.I.Y Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated June 3 1999, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. 10.7 Sale of Merchandise Agreement (Boardman) between D.I.Y Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated June 11, 1999, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. 10.8 Sale of Merchandise Agreement (North Randall and Tallmadge Avenue) between D.I.Y. Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated August 4, 2000, filed herewith. 27.1 Financial Data Schedule for the nine months ended September 30, 2000, filed herewith. (b) Reports on Form 8-K: During the third quarter of fiscal year 2000 to which this Quarterly Report on Form 10-Q relates, the Registrant filed the following Current Report on Form 8-K: Current Report bearing a cover date of August 14, 2000, reporting the closure of its North Randall, Ohio and Tallmadge Avenue (Akron, Ohio) stores (included as Appendix A in the Form 8-K were (1) a pro forma condensed balance sheet as of July 1, 2000, giving effect to (A) the closure of the North Randall and Tallmadge Avenue stores, and (B) related pro forma 26 27 adjustments, all as though the transaction occurred at July 1, 2000; and (2) unaudited pro forma condensed statements of operations for the fiscal year ended January 1, 2000, and for the six months ended July 1, 2000, giving effect to (A) the elimination of the results of operations of the Registrant's closed stores, as described in Note (E), and (F) related pro forma adjustments, all as though the transaction occurred on January 3, 1999). 27 28 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. D.I.Y. HOME WAREHOUSE, INC. (Registrant) DATED: November 14, 2000 By: /s/ Todd Ayers ------------------------------- Todd Ayers Controller 28 29 D.I.Y. Home Warehouse, Inc. Exhibits to Form 10-Q for the Third Quarter Ended September 30, 2000 Index to Exhibits Where Filed ----- * 3.1 Articles of Incorporation of D.I.Y. Home Warehouse, Inc., as amended, incorporated herein by reference to Exhibit 3.1 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 3.2 Amended and Restated Code of Regulations of D.I.Y. Home Warehouse, Inc., incorporated herein by reference to Exhibit 3.2 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 10.1 Compensation and Employee Benefit Plans of the Registrant * 10.1.1 D.I.Y. Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended February 23, 1994 and Approved by Stockholders May 25, 1994, incorporated herein by reference to Exhibit 10.18 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.2 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Clifford L. Reynolds, incorporated herein by reference to Exhibit 10.22 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.3 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and R. Scott Eynon, incorporated herein by reference to Exhibit 10.23 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.4 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Dennis C. Hoff, incorporated herein by reference to Exhibit 10.24 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.5 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and John M. Erb, incorporated herein by reference to Exhibit 10.25 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 30 * 10.1.6 Indemnification Agreement between D.I.Y. Home Warehouse, Inc. and Fred A. Erb, incorporated herein by reference to Exhibit 10.26 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.7 Tax Indemnification Agreement among D.I.Y. Home Warehouse, Inc. and Fred A. Erb, Clifford L. Reynolds, R. Scott Eynon, Dennis C. Hoff and John M. Erb, incorporated herein by reference to Exhibit 10.27 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.8 D.I.Y. Home Warehouse, Inc.'s 401K Plan, incorporated herein by reference to Exhibit 10.28 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.1.9 1994 D.I.Y. Home Warehouse, Inc. Employee Bonus Plan dated May 25, 1994, incorporated herein by reference to Exhibit 10.48 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. * 10.1.10 Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. * 10.1.10.a Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated November 21, 1996, incorporated herein by reference to Exhibit 10.51 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. * 10.1.10.b Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.4 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.10.c Amendment No. 3 to Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.69 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. 31 * 10.1.10.d Amendment No. 4 to Amended and Restated Employment Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated November 30, 1999, incorporated herein by reference to Exhibit 10.1.10.d to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. * 10.1.11 Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. * 10.1.11.a Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.11.b Amendment No. 2 to Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.70 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. * 10.1.11.c Amendment No. 3 to Amended and Restated Employment Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated November 30, 1999, incorporated herein by reference to Exhibit 10.1.11.c to the Registrant's Report on Form 10-k for the fiscal year ended January 1, 2000. * 10.1.12 Amended and Restated Employment Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated January 1, 1995, incorporated herein by reference to Exhibit 10.3 to the Registrant's Report on Form 10-Q for the quarter ended July 1, 1995. * 10.1.12.a Amended and Restated Employment Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated May 28, 1998, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.13 Form of Non-Qualified Stock Option Agreement under the D.I.Y. Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended, 32 incorporated herein by reference to Exhibit 10.14 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.1.14 1995 D.I.Y. Home Warehouse, Inc. Employee Bonus Plan dated May 24, 1995, incorporated herein by reference to Exhibit 10.44 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.1.15 D.I.Y. Home Warehouse, Inc. 1996 Retainer Stock Plan for Non-Employee Directors, incorporated herein by reference to Exhibit 10.49 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.1.16 Employment Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.17 Transaction Bonus Agreement between Clifford L. Reynolds and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.8 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.18 Transaction Bonus Agreement between R. Scott Eynon and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.19 Transaction Bonus Agreement between Dennis C. Hoff and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.10 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.20 Transaction Bonus Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated July 1, 1998, incorporated herein by reference to Exhibit 10.11 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.1.21 Amendment No. 1 to Amended and Restated Employment Agreement between Eric I. Glassman and D.I.Y. Home Warehouse, Inc. dated March 11, 1999, incorporated herein by reference to Exhibit 10.71 to the Registrant's Report on Form 10-K for the fiscal year ended January 2, 1999. 33 * 10.1.22 DIY Home Warehouse, Inc. 1993 Long Term Incentive Plan as Amended March 17, 1999 and Approved by the Board of Directors March 17, 1999, incorporated herein by reference to Exhibit 10.13 to the Registrant's Report on Form 10-Q for the quarter ended July 3, 1999. 10.2 Material Leases of the Registrant * 10.2.1 Sublease between D.I.Y. Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc., dated August 1, 1992, incorporated herein by reference to Exhibit 10.1 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.2 Indenture of Lease between Smith - D.I.Y. Center Limited Partnership and D.I.Y. Home Warehouse, Inc., dated December 27, 1985, incorporated herein by reference to Exhibit 10.2 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.3 Amendment to Lease between D.I.Y. Center Associates (successor in interest to Smith - D.I.Y. Center Limited Partnership) and D.I.Y. Home Warehouse, Inc., dated July 2, 1991, incorporated herein by reference to Exhibit 10.3 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.3.a Amendment to Lease between D.I.Y. Center Associates, L.P. and D.I.Y. Home Warehouse, Inc. dated March 21, 1995, incorporated herein by reference to Exhibit 10.51 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. * 10.2.4 Lease between Fred A. Erb and D.I.Y. Home Warehouse, Inc., dated March 1, 1993, incorporated herein by reference to Exhibit 10.4 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.5 Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc. dated August 2, 1991, incorporated herein by reference to Exhibit 10.5 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.5.a Addendum #1 to Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc., dated September 2, 1991, incorporated herein by reference to Exhibit 10.6 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. 34 * 10.2.5.b Addendum #2 to Lease Agreement between West Park Limited, Inc. and D.I.Y. Home Warehouse, Inc., dated September 16, 1991, incorporated herein by reference to Exhibit 10.7 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.6 Sublease between The Wholesale Club, Inc. and D.I.Y. Home Warehouse, Inc., dated May 14, 1992, incorporated herein by reference to Exhibit 10.8 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.7 Sublease between The Wholesale Club, Inc. and D.I.Y. Home Warehouse, Inc., dated November 25, 1992, incorporated herein by reference to Exhibit 10.9 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.8 Lease between Myron S. Viny, dba Central Valley Properties, and D.I.Y. Home Warehouse, Inc., dated February 26, 1993, but effective beginning May 1, 1993, incorporated herein by reference to Exhibit 10.12 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.2.8.a Modification and Supplement to lease between the Estate of Myron S. Viny (formerly DBA Central Valley Properties) and D.I.Y. Home Warehouse, Inc. dated November 27, 1995, incorporated herein by reference to Exhibit 10.12 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.2.8.b Modification and Supplement of lease between the Estate of Myron S. Viny (formerly DBA Central Valley Properties) and D.I.Y. Home Warehouse, Inc. dated March 30, 2000, incorporated herein by reference to Exhibit 10.2.8.b to the Registrant's Report on Form 10-Q for the quarter ended April 1, 2000. * 10.2.9 Agreement of Lease (Boardman Facility) between DIY Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc. dated as of October 1, 1993, incorporated herein by reference to Exhibit 10.38 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. * 10.2.9.a Second Amendment to Agreement Lease (Boardman facility) between D.I.Y. Home Warehouse, Inc. and D.I.Y. Ohio Real Estate Associated Limited Partnership (the Landlord) and 35 assignment of the lease to V&V 224, Limited by the Landlord dated October 22, 1998, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.2.10 Lease between Elmhurst Properties, Inc. and D.I.Y. Home Warehouse, Inc., dated May 26, 1993, incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. * 10.2.11 Assignment and Assumption of Lease and Sublease between Kmart Corporation and D.I.Y. Home Warehouse, Inc. dated December 22, 1994, incorporated herein by reference to Exhibit 10.49 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. * 10.2.12 Shopping Center Lease between KCHGC, Inc. and D.I.Y. Home Warehouse, Inc. dated January 12, 1995, incorporated herein by reference to Exhibit 10.50 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 10.3 Credit Agreements of the Registrant * 10.3.1 $1,250,000 Promissory Note from D.I.Y. Home Warehouse, Inc. to Edgemere, Inc. f/k/a Erb Lumber Co., dated July 1, 1991, incorporated herein by reference to Exhibit 10.29 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.3.2 Security Agreement between D.I.Y. Home Warehouse and Erb Lumber Co., dated November 14, 1985, incorporated herein by reference to Exhibit 10.30 to the Registrant's Registration Statement No. 33-60012 on Form S-1 filed May 18, 1993. * 10.3.3 Revolving Credit Agreement and Security Agreement dated December 7, 1994 between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus, and Old Kent Bank and Trust Company, incorporated herein by reference to Exhibit 10.40 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. * 10.3.4 Loan and Co-lender Agreement and Open-End Mortgage, Assignment of Rents and Security Agreement dated December 23, 1994 between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus, and Old Kent Bank and Trust Company, incorporated herein by reference to Exhibit 10.41 to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 1994. 36 * 10.3.4.a First Amendment to Loan and Co-Lender Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.41 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995 * 10.3.4.b Second Amendment to Loan and Co-Lender Agreement dated December 23, 1996 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.52 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. * 10.3.4.c Third Amendment to Loan and Co-Lender Agreement dated October 24, 1997 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended September 27, 1997. * 10.3.4.d Fourth Amendment to Loan and Co-Lender Agreement dated April 4, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.2 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.3.4.e Fifth Amendment to Loan and Co-Lender Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.4 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.5 Line of Credit Agreement for Real Estate Loans, Open-end Mortgage, Assignment of Rents and Security Agreement, and Mortgage Notes between D.I.Y. Home Warehouse, Inc. and National City Bank, Columbus and Old Kent Bank dated April 28, 1995, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended April 1, 1995. * 10.3.5.a First Amendment to Line of Credit Agreement; Open-end Mortgage, Assignment of Rents and Security Agreement 37 (Leasehold) for Trumbull County; Open-end Mortgage, Assignment of Rents and Security Agreement for Summit County; Mortgage Note to National City Bank, Columbus dated September 15, 1995; Mortgage Note to Old Kent Bank dated September 15, 1995, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended September 30, 1995. * 10.3.5.b Second Amendment to Line of Credit Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.3.5.c Third Amendment to Line of Credit Agreement Dated December 23, 1996 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.53 to the Registrant's Report on Form 10-K for the fiscal year ended December 28, 1996. * 10.3.5.d Fourth Amendment to Line of Credit Agreement dated October 24, 1997 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.3 to the Registrant's Report on Form 10-Q for the quarter ended September 27, 1997. * 10.3.5.e Fifth Amendment to Line of Credit Agreement dated April 4, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended July 4, 1998. * 10.3.5.f Sixth Amendment to Line of Credit Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank of Columbus and Old Kent Bank, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.6 First Amendment to Security Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, incorporated herein by reference to Exhibit 10.38 to the 38 Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.3.7 First Amendment to Subordination Agreement dated December 22, 1995 between D.I.Y. Home Warehouse, National City Bank, Columbus, and Old Kent Bank, and Edgemere Enterprises, Inc., incorporated herein by reference to Exhibit 10.39 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.3.8 Partial Release of Mortgage to Open-End Mortgage Assignment of Rents and Security Agreement for Richland County, Stark County, Summit County, Trumball County and Medina County by Old Kent Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.9 Modification to Revolving Credit Agreement, Line of Credit Agreement, and Loan and Co-lender Agreement between D.I.Y. Home Warehouse, Inc., National City Bank, Columbus, and Old Kent Bank dated February 20, 1996, incorporated herein by reference to Exhibit 10.42 to the Registrant's Report on Form 10-K for the fiscal year ended December 30, 1995. * 10.3.10 General Business Lease Agreement with IBM Credit Corporation dated May 30, 1996, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended June 29, 1996. * 10.3.11 Amendment No. 1 to Open-End Mortgage, Assignment of Rents and Security Agreement for Richland County, Stark County, Summit County, Trumball County and Medina County between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.12 First Amendment to Mortgage Note between D.I.Y. Home Warehouse, Inc. and National City Bank dated October 28, 1998, incorporated herein by reference to Exhibit 10.8 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.13 Second Amendment to Security Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank, incorporated herein by reference to Exhibit 10.9 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. 39 * 10.3.14 Second Amendment to Subordination Agreement dated October 28, 1998 between D.I.Y. Home Warehouse, Inc., National City Bank and Old Kent Bank, incorporated herein by reference to Exhibit 10.3 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.3.15 Credit and Security Agreement dated October 27, 1998 among D.I.Y. Home Warehouse, Inc. and the Lenders which are signatures hereto and National City Commercial Finance, Inc, as agent and National City Bank as Letter of Credit Bank, incorporated herein by reference to Exhibit 10.1 to the Registrant's Report on Form 10-Q for the quarter ended October 3, 1998. * 10.4 Real Estate Purchase Agreement (Mansfield) between DIY Ohio Real Estate Associates Limited Partnership and D.I.Y. Home Warehouse, Inc. dated as of March 1, 1994, incorporated herein by reference to Exhibit 10.40 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 1994. * 10.5 Real Estate Purchase Agreement (Mansfield and Canton) between D.I.Y. Home Warehouse, Inc. and Gabriel Brothers, Inc. dated March 3, 1999, incorporated herein by reference to Exhibit 10.5 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. * 10.6 Sale of Merchandise Agreement (Mansfield and West Market) between D.I.Y Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated June 3 1999, incorporated herein by reference to Exhibit 10.6 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. * 10.7 Sale of Merchandise Agreement (Boardman) between D.I.Y Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated June 11, 1999, incorporated herein by reference to Exhibit 10.7 to the Registrant's Report on Form 10-K for the fiscal year ended January 1, 2000. ** 10.8 Sale of Merchandise Agreement (North Randall and Tallmadge Avenue) between D.I.Y. Home Warehouse, Inc. and Schottenstein Bernstein Capital Group, LLC, dated August 4, 2000, filed herewith. ** 27.1 Financial Data Schedule for the nine months ended September 30, 2000, filed herewith. ------------------ * Previously filed ** Filed herewith

DIY HOME WAREHOUSE INC 10-Q