WINN-DIXIE STORES, INC.
5050 EDGEWOOD COURT * JACKSONVILLE, FLORIDA 32254
PROXY STATEMENT AND CONSOLIDATED FINANCIAL STATEMENTS
for
Annual Meeting of Shareholders
To be held October 5, 1994
Approximate Date of First Mailing to Shareholders: September 1, 1994
GENERAL INFORMATION
The Board of Directors of Winn-Dixie Stores, Inc. (the "Company") solicits your
proxy for use at the 1994 Annual Meeting of Shareholders to be held on October
5, 1994, at the Company's headquarters offices at the address above,
commencing at 9 o'clock A.M., and any adjournments thereof. A form of proxy is
enclosed herewith. Any shareholder who executes and delivers the proxy may
revoke it at any time prior to its use.
The cost of soliciting the proxies will be borne by the Company. Directors,
officers and employees of the Company may solicit proxies by telephone,
telegram or personal interview. In addition, the Company will, upon the
request of brokers, dealers, banks and voting trustees, and their nominees,
who are holders of record of shares of the Company's stock on the record date
referred to below, pay their reasonable expenses for completing the mailing of
copies of the Annual Report, of this Notice of Meeting and Proxy Statement and
of the enclosed form of proxy to the beneficial owners of such shares of
stock.
VOTING PROCEDURES
Only holders of issued and outstanding shares of Common Stock of the Company,
of record at the close of business on August 15, 1994, are entitled to notice
of and to vote at the meeting. Each shareholder is entitled to one vote per
share held as to each item to be voted upon.
The proxy cards, ballots and voting tabulations will be by tabulators and
inspectors who are Company associates, with the tabulators appointed by the
Chairman of the Company. Under Florida law, abstentions from voting are
included in determining whether a majority of the issued and outstanding
shares are represented or present at the meeting as required to establish a
quorum, but once a quorum is established, the abstentions are not included in
determining whether the requisite number of affirmative votes are received on
matters submitted to the shareholders for vote. If a quorum is established at
the meeting, (i) the four nominees for Class II and the nominee for Class III
who receive the greatest number of votes cast for the election of directors at
the meeting by the shares present in person or by proxy and entitled to vote
shall be elected directors, and (ii) any other matter (except as set forth
below) submitted to a vote of the shareholders must be approved by the
affirmative vote of the majority of shares voted at the meeting in person or
by proxy. Under Securities and Exchange Commission rules, the amendment to the
Key Employee Stock Plan requires abstentions to be treated as "no" votes, added
to the denominator of the vote calculation fraction, while broker non-votes are
disregarded. If a broker indicates that it does not have discretionary
authority as to certain shares to vote on a particular matter, then the shares
will not be considered as present or entitled to vote on that matter.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board is divided into three classes of Directors. Each class of Directors
is elected to serve for a term of three years, so that the terms of office of
approximately one-third of the Directors will expire each year. At the meeting
of the shareholders, four Directors are to be elected in Class II to hold
office for 3-year terms expiring at the 1997 Annual Meeting of Shareholders.
The persons designated as nominees for election as Directors in Class II are
Robert D. Davis, James Kufeldt, Charles H. McKellar and David F. Miller. Each
of such nominees is currently a Director of the Company. Also standing for
election is Julia (Judi) B. North, appointed by the Board on July 25, 1994, as
a Class III director with a term expiring at the 1996 Annual Meeting.
It is the intention of the persons named in the enclosed form of proxy to vote
such proxy, unless otherwise instructed, for the election of the five persons
named above as Directors of the Company. Although proxies cannot be voted for
the election of more than four persons in Class II and for Ms. North in Class
III, if any of the five nominees named above should become unavailable for
election for any reason (none being presently foreseen), the persons named in
the proxy will have the right to use their discretion to vote for a
substitute.
Certain information with respect to each of the nominees and Directors
relating to principal occupations and directorships, and the approximate
number of shares of the Company's Common Stock beneficially owned by them,
directly or indirectly, has been furnished to the Company by such nominees and
Directors.
The Board of Directors recommends a vote FOR all five nominees.
Director
Has Been Class
Age A Director and
Name, Principal Occupation for the as of Continuously Expiration
Past Five Years, Directorships August 15, 1994 Since of Term
- ---------------------------------- --------------- ------------ ----------
Nominees for terms expiring in
1997:
Robert D. Davis -- 1984 to date
Chairman of the Board of D.D.I.,
Inc.; 1988 to 1990 Vice Chairman
of the Board of the Company;1983-
1988 Chairman of the Board; 1982-
1983 Vice Chairman of the Board;
1965-1982 Vice President (with
Company 1955-1990); also a
Director of American Heritage Life
Investment Corporation, First
Union Corporation, II
and Stein Mart, Inc. 62 1972 1997
James Kufeldt -- 1988 to date
President of the Company; 1983-
1988 Senior Vice President;
1979-1983 Vice President (with
Company since 1961); also a
Director of Barnett Bank of II
Jacksonville, Inc. 56 1988 1997
Charles H. McKellar -- 1988 to
date Executive Vice President of
the Company; 1983-1988 Senior
Vice President; 1980-1983 Vice
President (with Company since II
1957) 57 1988 1997
David F. Miller -- 1990 to date
Chairman of the Board of
PureIce of the South, Inc.;
1987-1990 Vice Chairman of the
Board of J.C. Penney Company, Inc.
and Chief Operating Officer of
JC Penney Stores and Catalog;
1983-1987 President of JC Penney
Stores and Catalog; also a
Director of the Barnett Bank of II
Jacksonville, Inc. 65 1987 1997
Nominee for term expiring in 1996:
Julia (Judi) B. North -- 1989
to date Vice President of BellSouth
Telecommunications, Inc., with
Southern Bell and affiliated
companies since 1972 in III
various positions. 46 1994 1996
Other Directors:
Armando M. Codina -- 1980 to date
Chairman of the Board and President
of The Codina Group, Inc.; also a
Director of American Bankers
Insurance Group, Inc., BellSouth
Corporation, CSR America, and III
Barnett Banks, Inc. 47 1987 1996
A. D. Davis -- retired; 1965-1982
Vice Chairman of the Board; 1940-
1965 President (with Company III
1925-1982) 88 1939 1996
A. Dano Davis -- 1988 to date
Chairman of the Board and
Principal Executive Officer
of the Company; 1982 to 1988
President and Principal Executive
Officer; 1980-1982 Senior Vice
President; 1978-1980 Vice President
(with Company since 1968); also
a Director of the First Union
National Bank of Florida and
American Heritage Life Investment I
Corporation 49 1981 1995
T. Wayne Davis -- private investor;
1980-1987 Vice President of the
Company (with Company 1971-1987);
Chairman of the Board of General
Parcel Service, Inc.; and also a
Director of Enterprise National Bank,
Enstar Group, Inc., Russell Security
Services, Inc., American Savings of
Florida, SSB, and AccuStaff, I
Incorporated 47 1981 1995
Radford D. Lovett -- 1982 to date
Chairman of the Board of Commodores
Point Terminal Corp.; also a
Director of First Union Corporation,
American Heritage Life Investment
Corporation, Florida Rock
Industries, Inc., and FRP III
Properties, Inc. 60 1983 1996
Carleton T. Rider -- August 1993
to date Continuous Improvement
Officer, Mayo Foundation; 1985 to
July 1993 Administrator, Mayo Clinic
Jacksonville; also a Director I
of St. Luke's Hospital 49 1992 1995
Charles P. Stephens -- For more
than 5 years, Vice President,
Director and a principal
stockholder of Norman W. Paschall
Co., Inc. (brokers, importers,
exporters and processors of I
textile fibers and by-products) 56 1982 1995
The Company was founded by Messrs. A.D., James E., M. Austin and Tine W. Davis
(the "Founding Brothers") Mr. A. Dano Davis, Company Chairman and Principal
Executive Officer, is the son of Mr. James E. Davis, deceased. Robert D. Davis
is the son of Mr. A. D. Davis. T. Wayne Davis is the son of Mr. Tine W. Davis,
deceased. Charles P. Stephens is the son-in-law of Mr. M. Austin Davis,
deceased.
EQUITY SECURITIES AND PRINCIPAL HOLDERS
There were 74,114,668 shares of Common Stock issued and outstanding on August
15, 1994.
The following table sets forth the beneficial ownership of the
Company's Common Stock by each person who, as of August 15, 1994, is known to
the Company to be the beneficial owner of 5% or more of the Common Stock.
Name and Amount and
Address Nature of Percent
of Beneficial Beneficial of
Title of Class Owner Ownership Class
- -------------- -------------- ------------ --------
Common Stock Davis Family (1) 30,628,299 41.33
c/o D.D.I., Inc.
5050 Edgewood Court
Jacksonville, FL 32254
(1)
Mr. A. D. Davis, relatives of the Founding Brothers, trusts, estates,
corporations and other entities involving them and their associates (collect-
ively, the "Davis Family") own beneficially for the Davis Family, directly
or indirectly, the shares listed in this table. These shares include those
listed for Messrs. A. D., A. Dano, Robert D. and T. Wayne Davis and Charles P.
Stephens in the following table setting forth the beneficial ownership by
directors, nominees and executive officers. The figures exclude 143,446
shares, those in excess of the pro rata beneficial interest of the Davis
Family in 240,000 shares held by American Heritage Life Investment
Corporation.
The following table sets forth the beneficial ownership of the Company's
Common Stock by each of the directors and nominees, each of the executive
officers named in the Summary Compensation Table and all of the Company's
directors and executive officers as a group as of August 15, 1994.
Amount and Nature of
Beneficial Ownership (1)
-------------------------
Direct or
Indirect
with Sole Indirect with
Voting and Shared Voting
Investment and Investment Percent
Name of Beneficial Owner Power Power Total of Class
- ------------------------ ---------- ------------- --------- --------
Armando M. Codina 5,272 5,272 .01
A. D. Davis 103,249 4,608,916 4,712,165 6.36
A. Dano Davis 888,582 2,263,967 3,152,549 4.25
Robert D. Davis 177,510 1,077,579 1,255,089 1.69
T. Wayne Davis 199,310 1,020,924 1,220,234 1.65
James Kufeldt 177,345 7,314 184,659 .25
Radford D. Lovett 6,323 6,323 .01
Charles H. McKellar 142,486 142,486 .19
David F. Miller 400 400 .00
Julia (Judi) B. North 200 200 .00
Carleton T. Rider 450 450 .00
Charles P. Stephens 9,739 319,863 329,602 .44
E. T. Walters 78,703 78,703 .11
Charles E. Winge 84,569 84,569 .11
Directors and Executive
Officers as a Group
(32 persons) 2,316,949 9,298,563 11,615,512 15.67
(1)
Includes shares held by the wives and children of certain of the persons
named, as to which such persons disclaim beneficial ownership. The numbers of
such shares so disclaimed are as follows: A. D. Davis, 66,214; Robert D.
Davis, 304,685; T. Wayne Davis, 201,852; James Kufeldt, 3,657; Charles H.
McKellar, 192; Carleton T. Rider, 450; Charles P. Stephens, 319,840; and
Charles E. Winge, 10,155. The shares reported exclude 746,645 shares of common
stock of the Company which are held directly or indirectly by trusts of which
A. Dano Davis is a Trustee and Charles P. Stephens' wife and children are the
beneficiaries. Also, excluded are 285,666 shares of common stock of the
Company which are held indirectly by Trusts of which Charles P. Stephens' wife
and Robert D. Davis are co-trustees and Charles P. Stephens' wife and children
are beneficiaries. A. Dano Davis, Robert D. Davis and Charles P. Stephens
disclaim beneficial ownership of such shares. The holdings set forth above
exclude 14,067,525 shares of common stock of the Company, included in the
Davis Family holdings shown on page 4 hereof, held by various entities as to
which one or more of A. D. Davis, A. Dano Davis, Robert D. Davis, T. Wayne
Davis, Charles P. Stephens and Charles P. Stephens' wife have direct or
indirect voting and investment powers, but no pecuniary interests, and as to
which they disclaim beneficial ownership.
The holdings set forth above include restricted shares awarded as Long-Term
Incentive Awards pursuant to the Company's Officer Compensation Program, a
portion of which shares vested upon certain performance goals being met within
the three-year period which expired June 29, 1994, as follows: Mr. A. Dano
Davis, 4,622 shares; Mr. Kufeldt, 4,622 shares; Mr. McKellar, 3,368 shares;
Mr. Walters, 1,469 shares; and Mr. Winge, 1,469 shares. The holdings include
additional restricted shares which are subject to forfeiture if certain
performance goals are not met within the three-year period expiring June 28,
1995, as follows: Mr. Kufeldt, 4,197 shares; Mr. McKellar, 3,058 shares; Mr.
Walters, 1,334 shares; and Mr. Winge, 1,334 shares. Other shares included are
subject to forfeiture if certain performance goals are not met within the
three fiscal-year period expiring June 26, 1996, as follows: Mr. Kufeldt,
3,320 shares; Mr. McKellar, 2,418 shares; Mr. Walters, 1,055 shares; and Mr.
Winge, 1,055 shares. Part of them are subject to forfeiture if certain
performance goals are not met within the three fiscal-year period expiring in
June 25, 1997, as follows: Mr. Kufeldt, 4,078 shares; Mr. McKellar, 2,971
shares; Mr. Walters, 1,296 shares; and Mr. Winge, 1,296 shares. The holdings
for the 32 officers within the Directors and Executive Officers group total
58,553 restricted shares.
The holdings set forth above also include equivalent shares credited to the
Stock Equivalent Accounts of Directors under the Directors' Deferred Fee Plan
(see "Directors' Fees"): Mr. Codina, 3,772 equivalent shares; Mr. A. D. Davis,
3,249 equivalent shares; Mr. Robert D. Davis, 2,076 equivalent shares; and Mr.
Lovett, 2,991 equivalent shares. These holdings are payable only in cash upon
retirement.
The holdings set forth above also include the equivalent of 3,229 shares
credited to Mr. Kufeldt's account, 14,175 shares to Mr. McKellar's account and
8,834 shares to Mr. Winge's account, allocated by them to the Company stock
fund within the Profit Sharing Plan, and a total of 47,573 shares for all
executive officers as a group in such fund.
The holdings further include 40,000 shares for Mr. McKellar and 24,000 shares
for Mr. Walters, and a total of 132,000 shares for all executive officers
included in the group, which represent options which have not yet been
exercised, granted January 24, 1990. These options will expire on December 31,
1996, if not exercised before then. These holdings also include shares under
additional options granted on June 15, 1992, which are now exercisable, of
25,000 shares for Mr. Kufeldt, 20,000 shares for Mr. McKellar, 12,000 shares
for Mr. Walters and 12,000 shares for Mr. Winge. These holdings also include
shares under additional options granted on June 22, 1994, not presently
exercisable, of 25,000 shares for Mr. Kufeldt, 20,000 shares for Mr. McKellar,
12,000 shares for Mr. Walters and 12,000 shares for Mr. Winge. These share
options are more fully described in the tables on options on page 8 below.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its review
of the copies of such forms received by it and written representations from
certain reporting persons that no Forms 5 were required for them, the Company
believes that during the Company's most recent completed fiscal year ended on
June 29, 1994, all filing requirements applicable to its officers, directors,
and greater than ten percent beneficial owners were complied with, except that
Mr. Codina had a filing approximately 13 days late due to oversight in
connection with the purchase of 1,500 shares.
MEETINGS OF THE BOARD AND COMMITTEES
During the fiscal year the Board of Directors held four regular meetings and
four special meetings by written consent. All current Directors attended at
least 75% of the meetings of the Board and of the committees on which they
served.
The Board of Directors has Audit, Nominating, Long-Term Officer Compensation,
Key Employee Stock Option and Compensation Committees. The Audit Committee is
composed of Mr. Radford D. Lovett, Chairman, and Messrs. Armando M. Codina,
David F. Miller, Carleton T. Rider and Charles P. Stephens. The Audit
Committee, whose members are not officers, employees, or retired employees of
the Company, held two meetings during the fiscal year and all members attended
both meetings, except Mr. Codina who did not attend one meeting. The Audit
Committee reviews the scope and results of the audit, approves types of
non-audit services provided to the Company and recommends selection of the
Company's independent auditors. It also reviews the scope of internal audits,
systems of internal controls and accounting policies and procedures. The
Nominating Committee is composed of Mr. T. Wayne Davis, Chairman, and Messrs.
A. Dano Davis, Robert D. Davis, Radford D. Lovett and Charles P. Stephens. The
Nominating Committee recommends qualified candidates to fill vacancies on the
Board of Directors. The Nominating Committee held two formal meetings during
the fiscal year. The Committee will consider nominees recommended by
shareholders, who may submit names and biographical data and qualifications in
writing to the Secretary of the Company.
The Compensation Committee, composed of Mr. David F. Miller, Chairman, and
Messrs. Radford D. Lovett, Armando M. Codina, A. Dano Davis and James Kufeldt,
sets and reviews the salary and benefits structure of the Company, including
base salary, cash bonus, restricted stock and performance unit awards for
executive officers. It met twice during the fiscal year. The Key Employee
Stock Option Committee, composed of Messrs. A. Dano and R. D. Davis,
determines long-term stock option awards to executive officers. The committee
met once. The Long-Term Officer Compensation Committee, composed of Messrs. A.
Dano Davis and R. D. Davis, determines restricted stock and performance unit
plan awards, reviewed and approved by the Compensation Committee, and met once
during the year. These three committees jointly met twice at the middle and
end of the fiscal year as a group to review performance under the plans
established at the end of the prior fiscal year for 1993-94 and to set the
plans for 1994-95. Their activities are described further in the Report on
Executive Compensation beginning on page 9.
DIRECTORS' FEES
Directors who are not employees of the Company are paid a retainer fee of
$12,000 per annum plus $2,000 for attendance at each regular meeting of the
Board. Directors are also paid $500 for each meeting held by written consent.
Members of the Audit, Nominating, and Compensation Committees are paid $2,000
for each committee meeting attended. Travel expenses of Directors incurred in
traveling to Committee and Directors' meetings are also reimbursed by the
Company. Members of the Board of Directors who are also employees are not paid
Director's fees or fees for attending Committee meetings. Members of the
Long-Term Officer Compensation and Key Employee Stock Option Committees are
not paid for their meetings.
A Director may elect to defer payment of all or any part of the above fees
until termination as a Director under a Deferred Fee Plan for Directors
effective June 30, 1988, with fees credited to an Income Account at prime
interest rate or to a Stock Equivalent Account based on the closing market
price of the shares on the date fees are earned. The deferred fees are payable
only in cash in a single payment or annual installments upon retirement.
Messrs. A. D. Davis, Robert D. Davis, Lovett and Codina have elected to defer
fees during the fiscal year under the Deferred Fee Plan.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation of the
Principal Executive Officer and the four other most highly compensated
executive officers who served in such capacities as of June 29, 1994.
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation
----------------------------------- -------------------------------------------
Awards
--------------------
Fiscal Year Other Restricted Long-Term All Other
Ended Last Annual Stock Incentive Compensa-
Name and Wednesday Salary<F1> Compensa- Award<F3> Plan<F4> tion<F2><F5>
Principal Position In June ($) Bonus ($) tion($)<F2> ($) Options(#) Payouts($) ($)
- ------------------- ---------- ----------- --------- ----------- ------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A. Dano Davis 1994 365,976 351,524 -- -- -- -- 12,004
Chairman of the Board 1993 353,600 395,200 -- -- -- -- 12,035
and Principal 1992 346,666 346,666 -- -- -- -- --
Executive Officer
James Kufeldt 1994 365,976 351,524 -- 182,988 25,000 130,000 13,860
President 1993 353,600 395,200 -- 176,800 -- -- 16,515
1992 346,666 346,666 -- 173,333 25,000 -- --
Charles H. McKellar 1994 333,299 254,794 -- 133,320 20,000 94,714 13,860
Executive Vice President 1993 322,028 291,720 -- 128,811 -- -- 18,063
1992 315,714 252,571 -- 126,286 20,000 -- --
E. T. Walters 1994 193,863 135,182 -- 58,159 12,000 41,318 11,315
Senior Vice President 1993 187,307 137,361 -- 56,192 -- -- 24,688
1992 183,635 95,525 -- 55,090 12,000 -- --
Charles E. Winge 1994 193,863 115,874 -- 58,159 12,000 41,318 10,835
Senior Vice President 1993 187,307 126,577 -- 56,192 -- -- 16,563
1992 183,635 118,777 -- 55,090 12,000 -- --
<FN>
<F1>
Includes compensation amounts earned during the fiscal year but deferred under
401(k) plan (except for Mr. Davis, who did not participate) and amounts
contributed under the Company's Senior Corporate Officers' Management Security
Plan (Mr. Davis, $7,467; Mr. Kufeldt, $9,632; Mr. McKellar, $9,905; Mr.
Walters, $12,900; and Mr. Winge, $8,494).
<F2>
Disclosure of "Other Annual Compensation" and "All Other Compensation" is not required
for the fiscal year ended June 24, 1992. Merchandising contest awards for the
1993 fiscal year shown under Other Annual Compensation last year is included
under All Other Compensation this year.
<F3>
Dividends are paid on restricted shares at the ordinary rate. Value is at
grant date price of $44.875. The aggregate of restricted shares held and value
at June 29, 1994, were: Mr. Davis, no shares; Mr. Kufeldt, 11,595 shares,
$505,832; Mr. McKellar, 8,447 shares, $368,500; Mr. Walters, 3,685 shares,
$160,758; and Mr. Winge, 3,685 shares, $160,758. These shares all vest, if at
all, over a period of three fiscal years from grant, if certain performance
goals are attained. The values above do not reflect the risk of forfeiture.
The number of shares exclude those which vested effective June 29, 1994, upon
satisfaction of the performance goals, as set forth in footnote 1 to the table
on Amount and Nature of Beneficial Ownership on page 5.
<F4>
Performance Unit Plan payments earned in fiscal year 1994 under the 1992 plan
awards by performance during fiscal years 1992, 1993 and 1994, paid in early
fiscal year 1995.
<F5>
Includes (a) Company contributions to the Company's Profit Sharing Plan of
$12,004 for each of the named officers; and (b) $4,620 each for Messrs.
Kufeldt and McKellar, $3,774 for Mr. Walters and $3,611 for Mr. Winge as
Company matching of officer's contribution to 401(k) Plan (Mr. Davis did not
participate); and (c) $4,917 of merchandising contest awards and $3,000 of
moving expenses for Mr. Walters and $6,305 of merchandising contest awards for
Mr. Winge. The Company does not have a defined benefit or actuarial pension
plan.
</FN>
</TABLE>
Option Grants During the Fiscal Year Ended June 29, 1994 The following table
sets forth all options to acquire shares of the Company's Common Stock granted
to the named executive officers on June 22, 1994, relating to fiscal years
ending after June 29, 1994.
<TABLE>
<CAPTION>
Individual Grants <F1> Potential realizable
- --------------------------------------------------------------------------------- value at assumed annual
rates of stock price
appreciation for
option term <F2>
-----------------------
Number of
securities Percent of total
underlying options granted Exercise or
options to employees base price Expiration
Name granted (#) in fiscal year ($/Sh) date <F3> 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. Dano Davis -- -- -- -- -- --
James Kufeldt 25,000 10.7% 44.875 1/15/2001 435,418 1,036,894
Charles H. McKellar 20,000 8.6% 44.875 1/15/2001 348,334 829,515
E. T. Walters 12,000 5.2% 44.875 1/15/2001 209,000 497,709
Charles E. Winge 12,000 5.2% 44.875 1/15/2001 209,000 497,709
<FN>
<F1>
The exercise price was the market value of the Company's Common Stock on the
date of grant. The grants were at the end of the 1994 fiscal year, but relate
to performance during fiscal years 1995-2000. Options are exercisable as to
one-half of the shares at the end of a full fiscal year in which the Company
earns a Return on Equity, as defined, of 20% or more, and as to the other
half, after the end of a second consecutive fiscal year during which such a
return is earned, if the option was outstanding throughout the two consecutive
fiscal years. The officer must remain employed during the option period, but
the option may be exercised to the extent vested within three months after
cessation of employment for any reason other than death, for which the period
to exercise is one year.
<F2>
The potential realizable value amounts shown illustrate the values that might
be realized upon exercise immediately prior to the expiration of their term
using 5 percent and 10 percent appreciation rates set by the Securities and
Exchange Commission, compounded annually. These amounts, therefore, are not
intended to forecast possible future appreciation, if any, of the Company's
stock price. Additionally, these values do not take into consideration the
provisions of the options providing for nontransferability, vesting
requirements or termination of the options following termination of
employment.
<F3>
Subject to shareholder approval, otherwise December 31, 1998.
</FN>
</TABLE>
Option Exercises and Fiscal Year-End Values
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 29, 1994, and the number and
value of unexercised options held by such executive officers at fiscal year
end.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Value Underlying Unexercised in-the-Money
Acquired on realized Options at FY-End (#) Options at FY-End ($)<F1>
------------------------- -----------------------
Name exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Dano Davis -- -- -- -- -- --
James Kufeldt -- -- 25,000 25,000 37,500 --
Charles H. McKellar -- -- 60,000 20,000 635,000 --
E. T. Walters -- -- 36,000 12,000 381,000 --
Charles E. Winge -- -- 12,000 12,000 18,000 --
<FN>
<F1> The closing price of the Company's Common Stock of $43.625 as
reported on the New York Stock Exchange composite tape on June 29, 1994, less
the exercise price was used in calculating the value of unexercised options.
The exercise price is $28.50 per share for the presently exercisable options
for 40,000 shares held by Mr. McKellar and for 24,000 shares held by Mr.
Walters. The exercise price is $42.125 for the remainder of the presently
exercisable options and $44.875 for all unexercisable options.
</FN>
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
Performance Unit Plan. The restricted stock awards are listed in the table on
page 7. The Long-Term Incentives also include the Company's Performance Unit
Plan, a cash incentive plan. It is designed to reward senior managers for
improvements in specified areas of Company performance over periods of three
fiscal years. For the awards made at the end of fiscal year 1994 for the
period of fiscal years 1995-97, goals were established at the beginning of the
performance period. These goals are based upon a measure of return on invested
capital for the restricted shares (all or none earned) and upon a matrix of
the increase in identical store sales and average sales for stores over 35,000
square feet. No award is made for improvements that are at or less than the
designated threshold. The performance unit grants outlined below, if earned,
would be paid in early fiscal year 1998 for results in the 1995-97 performance
period.
Estimated Future Payouts
Under Non-Stock Price-Based Plans
---------------------------------
Number of
Performance Performance
Units Period Threshold
Granted (#) Covered ($) Target($) Maximum($)
----------- ----------- --------- -------- ----------
A. Dano Davis -- -- -- -- --
James Kufeldt 118,942 1995-97 -- 118,942 178,413
Charles H.McKellar 86,658 1995-97 -- 86,658 129,987
E. T. Walters 37,803 1995-97 -- 37,803 56,705
Charles E. Winge 37,803 1995-97 -- 37,803 56,705
REPORT ON EXECUTIVE COMPENSATION
The Company's Executive Officer Compensation Program has developed over the
years and reflects the overall compensation philosophies of the Company and the
Founding Brothers. The Company's Officer Compensation Program (the "Program")
for fiscal year 1994 again incorporated recommendations of a consultant, design-
ed to fairly compensate executives for their performance and contribution to the
Company. Overall objectives are to motivate officers to achieve the Company's
long and short-term performance goals and to reward them based in part upon
performance of the team and in part upon their individual contributions to that
performance; to motivate the executive officers to think and act as owners of
the Company; to provide levels and forms of compensation to retain high
performing executives; and to reinforce the planning and budgeting process of
the Company for both short and long-term performance.
The Program includes three parts: (1) Base Compensation, designed to reflect
the overall level of responsibility, the position's risk/reward profile,
marketplace salary trends and the performance of the incumbent within the
position; (2) Annual Incentive Compensation, a cash bonus with award
opportunities tied to the position's potential contribution to Winn-Dixie's
performance against predetermined performance goals, with a portion based upon
the Company's performance and a portion based upon the performance of the
primary area of responsibility of the executive, but with some discretionary
portion to allow adjustments for extraordinary circumstances; and (3) Long-Term
Incentive Compensation, based upon grants of restricted stock which pays
dividends but does not vest unless and until certain performance requirements
are met over a three-year period. The Long-Term Incentive plan also includes a
performance unit plan, under which participants can earn a cash bonus based
upon different three-year performance goals, currently related to improvements
in certain retail location sales parameters.
In 1993 the Board of Directors established a Compensation Committee to
establish the base salary and cash bonus targets and to approve recommendations
of the other committees of long term compensation grants or awards, if any.
This committee is also responsible for reviewing the salary and benefit
structure of the Company with respect to its executive officers, including
recommending specific actions concerning that structure to the Board and
retaining outside consultants as deemed appropriate. The Long-Term Incentive
awards are administered by the Long-Term Officer Compensation Committee.
Additionally, as part of the long-term incentives, for members of the Executive
Committee (presently proposed to be extended to division presidents and
managers) there is a non-qualified stock option plan, administered by the Key
Employee Stock Option Committee.
For the Chairman of the Board, who is also the Principal Executive Officer, and
also for the President and Executive Vice President, the Program is weighted
toward long-term compensation. For Regional Directors it is approximately
equally weighted between long-term and annual compensation. The other executive
officers' compensation weighted toward annual compensation.
The Chairman and Principal Executive Officer of the Company, Mr. A. Dano Davis
(the "PEO") for the fiscal year ended June 29, 1994, received a base compen-
sation increase of 3.5% from the prior fiscal year. Because of his substantial
stock ownership, Mr. Davis again chose not to participate in both the restrict-
ed stock and performance unit aspects of the Long-term Incentive Plan of the
Company for the past fiscal year. Had he participated, the grants made in June
1994 for fiscal years 1995 and later would have been in the amount of
approximately $182,988 of value of restricted stock and a maximum performance
unit payment of approximately $178,413. Additionally, the PEO does not
participate in the Key Employee Stock Option Plan. Had he so participated, the
PEO would have received an option to purchase 25,000 shares of Company common
stock at $44.875, the market price at the date of grant. Under the concept of
the Program, the PEO normally would participate in these plans, and if the PEO
had participated in 1994, his compensation would have closely tracked that of
the Company's President, Mr. James Kufeldt, as shown in the Summary
Compensation Table on page 7.
Both salary increases and annual incentive awards are based in major part on
the Company's financial performances for the fiscal years involved. The Company
performance targets for cash bonuses for fiscal year 1994 were based upon sales
volume and pre-tax return on sales and on the position held by each
participating officer. The cash bonuses could range from 0 to 200% of "target"
awards for specific performance goals. For the PEO, the target involved a
matrix of increases in average store sales and earnings before income tax as a
percentage of sales. For the fiscal year ended June 29, 1994, the compensation
levels for the PEO and named executives were determined for both base
compensation and cash bonus targets by the Compensation Committee in June 1993.
The restricted stock and performance unit awards and performance goals, based
upon increases in average customer order size and identical store sales
increases for larger stores respectively, were established by the Compensation
Committee upon recommendations of the Long-Term Officer Compensation Committee,
composed of Messrs. A. Dano Davis and R. D. Davis. The long-term Key Employee
Stock Option Committee, composed of A. Dano Davis and R. D. Davis, approved new
grants for the 1995 fiscal year, as set forth under "Option Grants During the
Fiscal Year Ended June 29, 1994," on page 8.
In June 1994, the Compensation Committee reviewed the performance of the
Company and the effect of the matrix under the cash bonus program and placed a
floor on the overall decrease in annual cash compensation (base salary and cash
bonus combined) set as the same percentage as the Company percentage decrease
in net profit before tax. The committee, with affected participants abstaining,
determined that the matrix established at the end of the 1993 fiscal year was
structured with too sharp of a drop at the lower end and would have resulted
in average total compensation reductions of more than 30%. The targets had
been very ambitious and were capped at the upper end but had no floor, which
resulted in demoralizing results despite reasonably good sales results and net
margins near the desired target range, because net earnings before taxes, one
of the two matrix factors, had decreased due to a number of factors, including
comparison against the 53-week prior fiscal year. Additionally, as
contemplated under the plan structure, payments were authorized to partially
adjust pay for individual officers, none of whom are in the five most highly
compensated, whose pay plans were subjected to special circumstances such as
unexpected competitive changes and position changes.
The Internal Revenue Code, as amended by the Omnibus Budget Reconciliation Act
of 1993, has certain limitations on tax deductibility of compensation in excess
of $1 million. Pay under performance-based variable compensation plans may be
deductible if certain requirements are met, including the nature of the
performance goals, composition of the committee establishing the goals and
shareholder approval of the goals. The Compensation Committee is reviewing the
Company's plans for the feasibility and desirability of compliance. Although
the Company for a number of years has had performance-based compensation under
the Long-Term Incentive Plan and the Key Employee Stock Option Plan, certain of
the regulations may require annual approval after the fact or otherwise may not
be desirable. The Compensation Committee will continue to weigh the
desirability and methods of compliance.
This report is submitted by the following members of the Compensation
Committee, Long-Term Officer Compensation Committee, and the Key Employee Stock
Option Committee:
David F. Miller, Chairman of the Compensation Committee
Radford D. Lovett, Compensation Committee
Armando M. Codina, Compensation Committee
A. Dano Davis, Compensation Committee
Key Employee Stock Option Committee
Long-Term Officer Compensation Committee
James Kufeldt, Compensation Committee
Robert D. Davis, Key Employee Stock Option Committee
Long-Term Officer Compensation Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee includes as members Mr. James Kufeldt, President of
the Company, and Mr. A. Dano Davis, Chairman of the Board of Directors and
Principal Executive Officer of the Company. The Chairman of the Committee, Mr.
David F. Miller, and his son own controlling interests in PureIce of the South,
Inc. and Quality Food Equipment Distributors. During the fiscal year 1994, the
Company purchased ice and equipment in the amount of $899,900 from those
companies. No executive officer of the Company served as a member of the
compensation or equivalent committee of another entity, one of whose executive
officers served on the Company's Compensation Committee; or as a director of
another entity, one of whose executive officers served on the Company's
Compensation Committee; or as a member of the compensation or equivalent
committee of another entity one of whose executive officers served as a
director of the Company.
Stock Performance Graph
The following graph sets forth the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock
during the preceding five fiscal years ended June 29, 1994, compared with the
cumulative total returns of the S & P 500 Index and the S & P Retail (Food
Chains) index. The comparison assumes $100 was invested on June 28, 1989 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG WINN-DIXIE STORES, INC., THE S & P 500 INDEX
AND THE S & P RETAIL (FOOD CHAINS) INDEX (1)
Measurement
Pt. FYE FYE FYE FYE FYE
6/28/89 6/27/90 6/26/91 6/24/92 6/30/93 6/29/94
------- ------- ------- ------- ------- -------
Winn-Dixie $100 $144.70 $166.82 $200.62 $256.48 $202.44
S&P Retail (Food Chains) $100 $123.63 $138.38 $124.92 $155.88 $151.68
S&P 500 Index $100 $116.49 $125.10 $141.88 $161.22 $162.84
Assumes Initial Investment of $100 and reinvestment of dividends
Note: Total Returns Based on Market Capitalization
Data and chart furnished by Zacks Investment Research, Inc.
(1)
Includes the following companies: RETAIL
(FOOD CHAINS)--Albertson's, American Stores, Bruno's, Inc., Giant Food Class
A, Great A&P, Kroger and Winn-Dixie.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
The American Heritage Life Insurance Company (the "Insurance Company") is a
wholly-owned subsidiary of American Heritage Life Investment Corporation, of
which Messrs. A. Dano Davis, Robert D. Davis and Radford D. Lovett are
directors. During part of the fiscal year, the Company leased a store location
from the Insurance Company (since sold by it) for a term expiring in 2004 at an
annual base rental of $192,638 plus taxes, common area maintenance and the
amount by which one percent of sales exceeds the base rent. During the fiscal
year ended June 29, 1994, the Company paid $200,338 to the Insurance Company as
lessor.
The Company is essentially self-insured for purposes of employee group life,
medical, accident and sickness insurance, with the Insurance Company providing
administrative services, expenses and stop loss coverage for medical and
accident claims above $250,000 per individual. During the fiscal year ended
June 29, 1994, the Company paid (i) $73,730,673 on behalf of its associates and
certain retired officers and their insured dependents for medical and
disability claims and (ii) $1,891,050 for death benefits, and the Insurance
Company received $2,840,893 for administrative services, state premium taxes,
expenses and the stop loss feature of the group medical and accident plan. The
Insurance Company is also the carrier of the life insurance on certain present
and former officers of the Company of which the Company is beneficiary, and the
Company paid premiums aggregating $115,160 for such individual policies during
fiscal year 1994. The Company also paid $4,852,909 in net premiums on life
insurance policies and $7,104,137 in interest on policy loans to fund the
corporate senior officers management security plan for 35 officers (including
23 executive officers) and a similar contributory plan for 553 other eligible
key management personnel. The plans also provide benefits to former
participants who have retired and beneficiaries of deceased participants.
In fiscal year 1994, the Insurance Company paid Mayo Clinic Jacksonville $8,325
and its affiliate St. Luke's Hospital $219,862, affiliates of Mr. Rider's
employer, ultimately reimbursed by the Company under its group medical and
accident plan.
During the fiscal year 1994, the Company purchased ice and equipment in the
amount of $899,900 from entities in which Mr. Miller and his son own a
controlling interest.
In fiscal year 1994, the Company received payments from D.D.I., Inc., a
corporation controlled by the Davis Family, in the aggregate amount of
$202,825 for group insurance, office rentals and related expenses, and legal
services. The Company agreed to pay to Mr. A. D. Davis $75,000 annually for
advisory services plus one-half medical and hospital expenses incurred in
excess of medicare reimbursement until June 24, 1995, or earlier death or
inability to furnish advisory services to the Company for reasons of health.
For the fiscal year ended June 29, 1994, no payment was made for advisory
services, but $101,782 was reimbursed for medical expenses.
AGREEMENT OF SHAREHOLDERS
OF
D.D.I., INC.
On April 19, 1989, an Agreement of Shareholders (the "Agreement") was entered
into by a Florida corporation now known as D.D.I., Inc. ("DDI") and its
shareholders to make provision for future disposition, voting and transfer of
its shares. DDI, which, as of August 15, 1994, owned 20,393,666 shares of Common
Stock of the Company, is controlled by the Davis Family.
Subject to certain exceptions, the Agreement prohibits disposition of shares by
a shareholder except with the written consent of DDI and all other
shareholders. If any shareholder desires to make a disposition of shares of
DDI, such person must offer the shares to DDI, and if DDI does not purchase all
of the shares, then to the other shareholders. The Agreement also restricts
transfers in the event of death, divorce, change in beneficial interest in a
trust or involuntary disposition; and sets out procedures for establishing Fair
Market Value, termination of the Agreement, selection of a Board of Directors
of DDI; and increasing the capital surplus of DDI if necessary to purchase
shares.
Shareholders who are parties to the Agreement include Messrs. A. D. Davis, the
Estate of James E. Davis, the Estate of M. Austin Davis, Robert D. Davis, A.
Dano Davis and T. Wayne Davis; spouses, children, grandchildren, relatives,
in-laws, trusts for the benefit of Davis family members (including Eunice Davis
McNeill, former spouse of Tine W. Davis, deceased), and corporations and other
entities controlled by them.
PROPOSAL 2 -- APPROVAL OF AMENDMENT TO
KEY EMPLOYEE STOCK OPTION PLAN
On October 3, 1990, the Shareholders approved a Key Employee Stock Option Plan
(the "Key Employee Plan") which permitted the granting of options covering up to
an aggregate of 300,000 shares to eligible employees, who at the time such
Options are granted, are serving as the President, the Executive Vice
President, the Financial Vice President or a Senior Vice President of the
Company ("Eligible Employees"), at a price per share, in the case of each
option granted, equal to the fair market value of the Company's Common Stock on
the date such option is granted.
In June 1992 the Key Employee Plan was amended to (1) increase the number of
authorized shares available for grant under the Plan to 500,000, (2) amend the
definition in the Key Employee Plan of the Company's Common Stock to the
Company's Common Stock as constituted October 31, 1990 recognizing a 1990
splitup of the stock, (3) provide that the option period shall end on December
31, 1998, as to options granted after June 1, 1992, and (4) revise the
definition of "Eligible Employee" to include any member of the Executive
Committee of the Company, other than the Chairman of the Board, adding two
vice Presidents for a then total of nine "Eligible Employees."
On June 22, 1994, the Board of Directors approved amendments to the Key
Employee Plan, subject to approval by the Shareholders, to revise the
definition of "Eligible Employees" under the Plan to include the Division
Presidents and Managers. At the present time there are 12 Division Presidents
affected, for a present total of 21 Eligible Employees upon approval. Division
Presidents are the executives directly responsible for obtaining the
performance results of the domestic operating divisions. Additionally, the
Board of Directors approved amendments (1) increasing the total number of
shares available under the Plan to one million from 500,000 (of which 319,000
had been previously granted), (2) providing that the option performance period
shall be up to the January 15 following the sixth fiscal year from grant, not
later than January 15, 2011, and (3) limiting the number of shares for which
options may be granted to an individual eligible employee to not more than
one-half of the total authorized shares, presently 250,000 and 500,000 if the
amendment is approved.
On June 22, 1994, options for an aggregate of 113,000 shares were granted at an
exercise price of $44.875 per share to nine present "Eligible Employees" of the
Company, including Messrs. Kufeldt, McKellar, Walters and Winge, who were
granted options covering 25,000 shares, 20,000 shares, 12,000 shares and 12,000
shares, respectively. Subject to shareholder approval, 10,000 share grants were
made to each of the twelve Division Presidents. All options granted June 22,
1994, not exercised under the Key Employee Plan, expire December 31, 1998, or
if Proposal 2 is approved, on January 15, 2001. Tables further describing the
number and value of the options are on page 8 above. Such options are
exercisable only upon the fulfillment of the conditions described below under
the caption "Description of Key Employee Plan."
Required Vote for Approval
If a majority of the outstanding shares of the Company's Common Stock vote in
favor of the approval of the amendments to the Key Employee Plan, the same
shall be deemed to have been approved by the Shareholders. In the event that
the affirmative vote of a majority of such shares is not obtained, such
amendments shall become null and void, the Key Employee Plan, as in effect
prior to the amendments adopted on June 22, 1994, shall continue in full force
and effect and the options granted to the Division Presidents shall be void.
The Board of Directors recommends a vote FOR Proposal 2.
Description of Key Employee Plan
A committee appointed by the Board of Directors may grant options at any time
and from time to time to persons who are Eligible Employees for such number of
shares (up to a maximum aggregate of 500,000 shares, to be increased to
1,000,000 shares by the proposed amendment) as the committee in its sole
discretion deems advisable. The option price per share shall be the fair market
value of the Company's Common Stock on the date on which the option is granted.
Each option shall become exercisable on and after such date as the committee
shall determine, to the extent of 50% of the shares covered thereby, at any
time after the end of a fiscal year of the Company for which the Company earned
a Return on Capital (as defined) of 20% or more, if such option was outstanding
throughout such fiscal year. Each option shall become exercisable as to the
remaining 50% of the shares covered thereby at any time after the end of the
second consecutive fiscal year of the Company in each of which two consecutive
fiscal years the Company earned a Return on Capital of 20% or more, if such
option was outstanding throughout such period of two consecutive years. Payment
in full, in cash, is required for the shares to be purchased at the time of
exercise of any option.
The maximum number of shares which may be sold pursuant to the Key Employee
Plan, as well as the number of shares which may be purchased pursuant to the
exercise of any option outstanding thereunder, are subject to anti-dilution
provisions in the event of stock splits, certain stock dividends and the like.
Options granted pursuant to the Key Employee Plan may not be sold, pledged,
assigned or transferred by their holders otherwise than by will or the laws of
descent and distribution and are exercisable, during their respective
lifetimes, only by such holders.
The period within which each option granted under the Key Employee Plan shall
be exercisable shall commence on such date as the committee shall determine and
shall end on December 31, 1996, as to those granted prior to June 1, 1992,
shall end on December 31, 1998, as to those granted after June 1, 1992, and
shall end not later than the January 15 following the end of the sixth fiscal
year after grant for those granted after June 1, 1994, if the amendments
described above are approved by the Shareholders.
The Board of Directors has the power, among other things, to add to, amend or
repeal any of the provisions of the Key Employee Plan, to suspend its operation
for any period or to terminate it in whole or in part, but no such addition,
amendment, repeal, suspension or termination shall in any way affect the rights
of the holders of outstanding options to purchase shares of Common Stock in
accordance with its provisions.
Unless authorized or ratified by the holders of a majority of the shares of
Common Stock of the Company, no amendment to the Key Employee Plan shall become
effective which shall (1) increase the aggregate number of shares available
thereunder, (2) permit the granting of options to persons other than Eligible
Employees, (3) decrease the minimum option price, or (4) extend the maximum
period within which an option may be exercised to any date later than the
January 15 following the end of the sixth fiscal year after grant.
Federal Income Tax Consequences
The following is a summary of the principal Federal income tax consequences
generally applicable to options granted under the Key Employee Plan.
Options granted under the Key Employee Plan will not qualify as incentive stock
options ("ISOs") within the meaning of Section 422A of the Code except to the
extent that (i) the aggregate fair market value of stock with respect to which
options are exercisable for the first time by any employee during any calendar
year (under all plans of the employer) does not exceed $100,000, and (ii) such
options are granted to an employee who (at the time the options are granted)
does not own more than 10 percent of the total combined voting power of all
classes of stock of the Company. The grant of an option under the Key Employee
Plan will have no tax consequences for either the employee or the Company.
However, there are proposals by the Financial Accounting Standards Board and
others to require calculation of some charge against Company earnings for such
options upon grant, although valuation methods continue to be debated.
Upon the exercise of an option which does not qualify as an ISO, the employee
will realize ordinary income in an amount equal to the excess of the fair
market value (on the date of exercise) of the shares acquired over the exercise
price. [Employees who are subject to Section 16(b) of the Securities Exchange
Act of 1934 who acquire shares pursuant to the exercise of an option which
does not qualify as an ISO will realize ordinary income in an amount equal to
the excess of the fair market value of the shares determined six months after
the date of the exercise (rather than on the date of exercise) over the
exercise price.] The Company will be entitled to a deduction in an amount
equal to the amount included in ordinary income by the employee.
Upon the exercise of an option which qualifies as an ISO, the employee will not
realize any income (except that the employee may be subject to the alternative
minimum tax) and the Company will not be allowed any deduction.
The tax consequences to an employee upon disposition of shares acquired under
the Key Employee Plan will depend upon how long the shares have been held and
whether such shares were acquired upon exercise of an option that qualified as
an ISO.
1.Dispositions of Shares Acquired upon Exercise of an Option which does not
Qualify as an ISO. An employee who disposes of shares acquired upon exercise
of an option which does not qualify as an ISO will recognize a capital gain
or loss in an amount equal to the difference between the amount realized upon
disposition and the employee's tax basis in the shares (i.e., the exercise
price plus the amount, if any, taxed as ordinary income upon the exercise).
Such capital gain or loss will be treated as long-term or short-term capital
gain or loss depending upon the length of time between the exercise date and
the date of disposition. The Company will not be entitled to a deduction upon
such disposition.
2.Shares Acquired upon Exercise of an Option which Qualifies as an ISO -
Dispositions Occurring Two Years or More after Date of Grant and One Year or
More after Date of Exercise. An employee who acquires shares upon the exercise
of an option which qualifies as an ISO and who then disposes of such shares
(i) two years or more after the date such option was granted and (ii) one year
or more after the date such option was exercised, will recognize a long-term
capital gain or loss in an amount equal to the difference between the amount
realized upon disposition and the employee's tax basis in the shares (i.e.,
the exercise price). The Company will not be entitled to a deduction upon such
disposition.
3.Shares Acquired Upon the Exercise of an Option which Qualifies as an ISO -
Dispositions Occurring within either Two Years of Date of Grant or One Year of
Date of Exercise. An employee who acquires shares upon exercise of an option
which qualifies as an ISO and who then disposes of such shares within either
(i) two years of the date such option was granted or (ii) one year of the date
such option was exercised, will realize ordinary income in an amount equal to
the lesser of (a) the excess of the fair market value of the shares on the
date of exercise over the exercise price or (b) the excess of the amount
realized upon disposition over the exercise price. [Employees who are subject
to Section 16(b) of the Securities Exchange Act of 1934 will realize ordinary
income in an amount equal to the excess of the fair market value of the shares
determined on the date they will no longer be subject to Section 16(b) with
respect to a disposition of the shares acquired upon exercise (rather than on
the date of exercise) over the exercise price or (b) the excess of the amount
realized upon disposition over the exercise price.] In addition, the employee
will recognize capital gain or loss in an amount equal to the difference
between the amount realized upon disposition and the employee's tax basis in
the shares (i.e., the exercise price plus the amount, if any, taxed as
ordinary income). Such capital gain or loss will be treated as long-term or
short-term capital gain or loss depending upon the length of time between the
exercise date and the date of disposition. The Company will be entitled to a
deduction equal to the amount included by the employee in ordinary income.
PROPOSAL 3 -- AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
Action is to be taken at the annual meeting with respect to the approval and
ratification of an amendment adopted by the Board of Directors to amend the
first sentence of Article Third of the Company's Restated Articles of
Incorporation to increase the authorized total number of shares the Company may
have outstanding at any time from 100,000,000 to 200,000,000, all of which
shall be common stock, having a par value of $1.00 per share. The existing
shares do not have preemptive rights.
At August 15, 1994, of the presently authorized 100,000,000 shares, the Company
had 77,166,024 shares of common stock issued and outstanding, with 3,051,356
shares held as treasury shares. Approximately 478,000 shares of common stock
are needed for issuance under the Key Employee Stock Option Plan if Proposal 2
is approved, or 358,000 shares otherwise. The proposed increase is to assure
that an adequate supply of authorized unissued shares is available for general
corporate needs, such as future stock dividends or splitups, raising additional
capital or financing the acquisition of other business. There are currently no
plans or arrangements relating to the issuance of any of the additional shares
proposed to be authorized, which would be available for issuance without
further action by the shareholders except as might be required by the Company's
Restated Articles of Incorporation, bylaws or applicable law.
Under Article Third of the Restated Articles, the Board of Directors has the
authority to issue such shares on such terms as it deems appropriate, subject
to applicable law. The issuance of additional shares may, among other things,
have a dilutive effect on earnings per share and on the equity and voting power
of existing holders. However, until the Board determines the specific use and
price for such shares as may be issued, if any, the actual effect on the
holders of the presently issued common stock cannot be ascertained. Similarly,
the tax impact, if any, on the Company and existing shareholders cannot be
determined until such determinations are made.
The issuance of additional shares of common stock by the Company also may
potentially have an antitakeover effect by making it more difficult to obtain
shareholder approval of various actions, such as a merger or removal of
management or directors or amendment of the Restated Articles of
Incorporation. The Company has in place certain other provisions which have an
antitakeover effect, including the classified board of directors and a
requirement that special meetings of the stockholders requested by
shareholders be on the request of not less than thirty percent of all votes
entitled to be cast. However, the increase in authorized shares has not been
proposed for an antitakeover-related purpose and the Board and management have
no knowledge of any current efforts to obtain control of the Company or to
effect large accumulations of its common stock.
The Board of Directors recommends a vote FOR Proposal 3.
PROPOSAL 4 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Action is to be taken at the Annual Meeting with respect to the ratification of
the appointment by the Board of Directors of the Company of KPMG Peat Marwick
LLP as independent public accountants to audit the books of the Company for the
fiscal year commencing June 30, 1994. KPMG Peat Marwick LLP has been regularly
employed by the Company for many years to examine its books and accounts, and
for other purposes, for which services their customary fees have been paid.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting and will have an opportunity to make such statements as they
may desire. Such representatives are expected to be available to respond to
appropriate questions from shareholders.
The Board of Directors recommends a vote FOR Proposal 4.
SUBMISSION DATE FOR SHAREHOLDER PROPOSALS FOR
1995 ANNUAL MEETING
In order to be presented at the Company's 1995 Annual Meeting of Shareholders,
a shareholder proposal must be received at the principal office of the Company,
5050 Edgewood Court, Jacksonville, Florida 32254, by May 5, 1995.
MISCELLANEOUS
The Company's audited financial statements and certain other financial
information for its fiscal year ended June 29, 1994, are included as pages F-1
to F-17, inclusive, annexed to this Proxy Statement.
The Annual Report of the Company to its shareholders for such fiscal year is
being mailed with this Proxy Statement to shareholders entitled to vote at the
Annual Meeting.
As of the date of this Proxy Statement, Management does not know of any other
matter which will come before the meeting. In the event that any other matter
properly comes before the meeting, the persons named in the enclosed form of
proxy intend to vote all proxies in accordance with their judgment on such
matter.
All shares represented by proxies sent to the Company to be voted at the Annual
Meeting of Shareholders will be voted if received in time.
By Order of the Board of Directors
Wayne E. Ripley, Jr., Secretary
September 1, 1994
If you do not expect to be personally present at the meeting, please date, fill
in and sign the enclosed proxy and return it promptly in the enclosed return
envelope.
PAGE
<PAGE>
WINN-DIXIE STORES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Selected Financial Data F-1
Management's Discussion and Analysis of Financial Condition
and Results of Operations F-2
Consolidated Financial Statements and Supplemental Data:
Independent Auditors' Report F-4
Report of Management F-4
Consolidated Statements of Earnings, Years ended June 29, 1994,
June 30, 1993 and June 24, 1992 F-5
Consolidated Balance Sheets, June 29, 1994 and June 30, 1993 F-6
Consolidated Statements of Cash Flows, Years ended June 29, 1994,
June 30, 1993 and June 24, 1992 F-7
Consolidated Statements of Shareholders' Equity, Years ended
June 29, 1994, June 30, 1993 and June 24, 1992 F-8
Notes to the Consolidated Financial Statements F-9
PAGE
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
1994 1993* 1992 1991 1990
Dollars in millions except per share data
<S> <C> <C> <C> <C> <C>
Sales
Net sales $ 11,082 10,832 10,337 10,074 9,744
Percent increase 2.3 4.8 2.6 3.4 6.5
Average annual sales per store $ 9.6 9.4 8.7 8.3 8.0
Earnings Summary
Gross profit $ 2,534 2,446 2,360 2,261 2,127
Percent of sales 22.9 22.6 22.8 22.4 21.8
LIFO charge (credit) $ (2) 1 (11) 9 18
Operating and administrative expenses $ 2,270 2,197 2,137 2,100 2,005
Percent of sales 20.5 20.3 20.7 20.8 20.6
Earnings before income taxes and
cumulative effect of change
in accounting principle $ 348 364 328 259 224
Earnings before effect of change
in accounting principle $ 216 236 216 171 153
Per share $ 2.90 3.11 2.82 2.20 1.93
Net earnings $ 216 236 196 171 153
Per share $ 2.90 3.11 2.55 2.20 1.93
Percent of net earnings to:
Sales 2.0 2.2 1.9 1.7 1.6
Average equity 21.2 24.4 21.6 20.4 19.1
Dividends
Dividends paid $ 107.4 100.5 92.0 84.1 77.9
Percent of net earnings 49.7 42.5 46.9 49.2 51.1
Per share (present rate $156) $ 1.44 1.32 1.20 1.08 0.99
Common Stock (WIN)
Total shares outstanding (000,000) 74.2 75.0 76.9 77.1 78.3
NYSE-Stock price range
Common - High $ 67.75 79.75 44.63 41.25 34.06
Low $ 43.50 41.63 34.63 29.00 24.00
Financial Data
Cash flow information:
Net cash provided by
operating activities $ 436.3 213.0 338.3 190.8 316.2
Net cash used in investing activities $ 214.7 81.4 216.9 55.1 214.6
Net cash used in financing activities $ 212.4 128.7 109.2 135.8 125.2
Capital expenditures, net $ 277.7 194.8 164.5 154.7 114.1
Depreciation and amortization $ 157.4 141.1 126.9 113.4 118.1
Working capital $ 488.0 544.7 550.8 435.8 426.4
Current ratio 1.6 1.6 1.7 1.6 1.6
Total assets $ 2,147 2,063 1,977 1,817 1,733
Obligations under capital leases $ 85 87 90 97 83
Shareholders' equity $ 1,057 985 952 860 813
Book value per share $ 14.26 13.14 12.39 11.15 10.39
Stores
At year - end - In operation 1,159 1,151 1,189 1,207 1,217
Opened and acquired during year 60 40 35 46 42
Closed or sold during year 66 78 53 56 54
Remodeled or enlarged during year 87 73 65 54 33
New / remodeled / enlarged -
in last five years 535 475 464 481 514
Year - end retail square footage (000,000) 40.7 39.0 38.6 37.9 37.0
Average store size at year - end (000) 35.1 33.9 32.4 31.4 30.4
Other Year-end Data
Associates (000) 112 105 102 106 101
Shareholders accounts (000) 39.5 41.4 42.8 39.4 33.6
Shareholders per store 34 36 36 33 28
Taxes
Federal, state and local $ 261 255 233 207 186
Per share $ 3.50 3.35 3.04 2.65 2.35
* 53 Weeks
F-1
</TABLE>
PAGE
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations.
Sales for 1994 amounted to $11.1 billion, an increase of 2.3% over
1993, a 53 week year. On a comparable 52 week year basis, the sales
increase would have been 4.3%. The change in comparable store sales
amounted to 2.0%, 2.8% and 1.8% for each of the last three fiscal
years. Comparable store sales for 1994 reflect the softness in the
retail food industry due to a weak economy throughout the year and
increased competitive activity in our trade area. The Company
operated 1,159, 1,151 and 1,189 retail stores with 40.7 million, 39.0
million and 38.6 million square feet at the end of fiscal year 1994,
1993 and 1992, respectively.
In fiscal year 1994, the Company opened and acquired 60 stores
averaging 43,500 square feet, enlarged or remodeled 87 stores and
closed 66 stores, averaging 26,300 square feet.
As a percent of sales, gross profit margins were 22.9%, 22.6% and
22.8% in fiscal 1994, 1993 and 1992, respectively. The increase in
gross profit margins is a result of our computer-assisted merchandise
acquisition systems and our forward-buy purchasing programs.
Approximately 92% of the Company's inventories are valued under the
LIFO (last-in, first-out) method. The LIFO calculations resulted in a
$2.0 million pre-tax increase in gross profit in 1994, a pre-tax
decrease in gross profit of $0.5 million in 1993 and a pre-tax
increase in gross profit of $10.8 million in 1992.
Operating and administrative expenses, as a percent of sales, were
20.5%, 20.3% and 20.7% in fiscal 1994, 1993 and 1992, respectively.
Our major increases in operating and administrative expenses are
depreciation, payroll and occupancy costs.
Cash discounts and other income amounted to $98.1 million, $132.4
million and $119.4 million in 1994, 1993 and 1992, respectively.
Gains (losses) on the sales of securities and other assets amounted to
$(3.2) million in 1994, $4.5 million in 1993 and $3.8 million in 1992.
Investment income amounted to $4.0 million, $8.4 million and $10.0
million in fiscal 1994, 1993 and 1992, respectively. The decrease in
1994 was due to a reduction in financial income, including the
elimination of dividends from our Bahamas subsidiary.
Interest expense totaled $14.3 million, $18.1 million and $15.1
million in fiscal 1994, 1993 and 1992, respectively. Interest expense
primarily reflects a computation of interest on capital lease
obligations. The 1994 decrease in other interest expense is due to a
decrease in short-term borrowings.
Earnings before income taxes and cumulative effect of change in
accounting principle were $348.5 million, $363.7 million and
$328.0 million in fiscal 1994, 1993 and 1992, respectively. The
decrease in pre-tax earnings is primarily a result of the decrease in
cash discounts and other income. The effective income tax rates were
38.0%, 35.0% and 34.0% for fiscal 1994, 1993 and 1992, respectively.
Earnings before cumulative effect of change in accounting principle
were $216.1 million, or $2.90 per share in 1994, $236.4 million,
or $3.11 per share in 1993 and $216.4 million, or $2.82 per share in
1992.
In June 1992, we adopted the Financial Accounting Standards Board
(FASB) Statement Number 109, "Accounting for Income Taxes." This
change in accounting policy resulted in a non-cash charge to the net
earnings of the Company in the amount of $20.5 million, or $0.27 per
share in 1992.
Net earnings amounted to $216.1 million, or $2.90 per share for
1994, $236.4 million, or $3.11 per share for 1993 and $195.9 million,
or $2.55 per share for 1992. The LIFO calculations increased net
earnings by $1.1 million, or $0.01 per share in 1994, decreased
earnings by $0.3 million, or $0.00 per share for 1993 and increased
net earnings by $7.1 million, or $0.09 per share for 1992.
F-2
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<PAGE>
Liquidity and Capital Resources.
The Company's financial condition remains very sound and very
strong. Cash and cash equivalents and short-term investments amounted
to $31.5 million at year-end. Cash provided by operating activities
amounted to $436.3 million in 1994, $213.0 million in 1993 and $338.3
million in 1992.
Net capital expenditures totaled $277.7 million, compared to $194.8
million for the previous year. These expenditures were for new store
locations, store enlargements and remodelings, the expansion of a
warehouse facility and a new manufacturing facility. Total capital
investment in Company retail and support facilities, including
operating leases, is estimated to be $525 million in 1994 and
projected to be $600 million in 1995. The Company has no material
construction or purchase commitments outstanding as of June 29, 1994.
Working capital amounted to $488.0 million, $544.7 million and
$550.8 million for 1994, 1993 and 1992, respectively. Inventories on
a FIFO (first-in, first-out) basis increased $15.4 million, primarily
due to the increase in the number of stores and our store enlargement
program.
The Company has an authorized $200 million commercial paper
program. In support of these programs, or as an independent source of
funds, the Company also has $250 million of short-term lines of
credit. These lines of credit are available at any time during the
year and are renewable on an annual basis. There was $9.5 million
borrowed against the bank lines of credit at the end of 1994. There
was $80.0 million in commercial paper outstanding at the end of 1993.
Excluding capital lease obligations, the Company had no outstanding
long-term debt as of June 29, 1994 or June 30, 1993.
The Company's cash flow from operations and available credit
facilities are considered adequate to fund both the short-term and
long-term capital needs of the Company.
The Company has been notified as one of the many Potentially
Responsible Parties by the Environmental Protection Agency with
respect to the clean up of hazardous wastes at five Superfund sites
and two additional sites. The Company is in the process of
determining the potential liability and the most cost-effective way to
clean up such sites. The Company believes its ultimate liability as to
these environmental matters will not necessitate significant capital
outlays, will not materially affect the annual earnings of the
Company, nor cause material changes in the Company's business.
Impact of Inflation.
Inflation in food prices continues to be lower than the overall
increase in the Consumer Price Index. Winn-Dixie's primary costs,
inventory and labor, increase with inflation. Recovery of these costs
has to come from improved operating efficiencies and, to the extent
permitted by our competition, through improved gross profit margins.
F-3
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<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and the Board of Directors
Winn-Dixie Stores, Inc.:
We have audited the accompanying consolidated balance sheets of
Winn-Dixie Stores, Inc. and subsidiaries as of June 29, 1994 and June
30, 1993, and the related consolidated statements of earnings,
shareholders' equity, and cash flows for each of the years in the
three-year period ended June 29, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Winn-Dixie Stores, Inc. and subsidiaries at June 29, 1994 and June
30, 1993, and the results of their operations and their cash flows for
each of the years in the three-year period ended June 29, 1994, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
August 1, 1994
REPORT OF MANAGEMENT
The Company is responsible for the preparation, integrity and
objectivity of the consolidated financial statements and related
information appearing in the Annual Report. The consolidated
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis and
include amounts that are based on management's best estimates and
judgments.
Management is also responsible for maintaining a system of internal
controls that provides reasonable assurance that the accounting
records properly reflect the transactions of the Company, that assets
are safeguarded and that the consolidated financial statements present
fairly the financial position and operating results. As part of the
Company's controls, the internal audit staff conducts examinations in
each of the retail and manufacturing divisions of the Company.
The Audit Committee of the Board of Directors, composed entirely of
outside directors, meets periodically to review the results of audit
reports and other accounting and financial reporting matters with the
independent certified public accountants and the internal auditors.
A. Dano Davis R. P McCook
Chairman of the Board Financial Vice President
and Principal Executive Officer and Principal Financial Officer
F-4
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<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
1994 1993* 1992
Amounts in thousands except per share data
<S> <C> <C> <C>
Net sales $ 11,082,169 10,831,535 10,337,341
Cost of sales, including warehousing and
delivery expense 8,547,681 8,385,412 7,976,843
Gross profit on sales 2,534,488 2,446,123 2,360,498
Operating and administrative expenses 2,269,803 2,196,721 2,136,850
Operating income 264,685 249,402 223,648
Cash discounts and other income, net 98,085 132,398 119,390
362,770 381,800 343,038
Interest:
Interest on capital lease obligations 11,285 11,571 11,768
Other interest 2,986 6,560 3,291
Total interest 14,271 18,131 15,059
Earnings before income taxes and cumulative
effect of change in accounting principle 348,499 363,669 327,979
Income taxes 132,382 127,284 111,560
Earnings before cumulative effect of change in
accounting principle 216,117 236,385 216,419
Cumulative effect of change in
accounting principle for income taxes - - (20,485)
Net earnings $ 216,117 236,385 195,934
Earnings per share:
Earnings before cumulative effect of
change in accounting principle $ 2.90 3.11 2.82
Cumulative effect of change in
accounting principle for income taxes - - (0.27)
Net earnings $ 2.90 3.11 2.55
* 53 Weeks
See accompanying notes to consolidated financial statements.
</TABLE>
F - 5
PAGE
<PAGE>
CONSOLIDATED BALANCE SHEETS
June 29, 1994 and June 30, 1993
1994 1993
Assets Amounts in thousands
Current Assets:
Cash and cash equivalents $ 31,451 22,302
Short - term investments - 85,482
31,451 107,784
Trade and other receivables, less allowance
for doubtful items of $834,000
($732,000 in 1993) 171,854 162,590
Associate stock loans 1,776 4,647
Merchandise inventories at lower of cost or
market less LIFO reserve of $205,172,000
($207,201,000 in 1993) 1,058,883 1,041,451
Prepaid expenses 97,220 96,728
Total current assets 1,361,184 1,413,200
Investments and other assets:
Cash surrender value of life insurance, net 25,094 10,053
Other assets 12,493 4,990
Total investments and other assets 37,587 15,043
Deferred income taxes 41,024 47,684
Net property, plant and equipment 706,779 586,633
$ 2,146,574 2,062,560
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 516,806 493,190
Short-term borrowings 9,500 80,000
Reserve for insurance claims and self-insurance 60,510 65,134
Accrued wages and salaries 68,238 66,821
Accrued rent 58,313 57,557
Accrued expenses 126,550 84,893
Current obligations under capital leases 3,462 2,989
Income taxes 29,787 17,962
Total current liabilities 873,166 868,546
Obligations under capital leases 85,374 87,153
Defined benefit plan 22,852 19,454
Reserve for insurance claims and self-insurance 105,417 100,169
Other liabilities 2,304 2,273
Shareholders' equity:
Common stock of $1 par value Authorized 100,000,000
shares; issued 74,176,356 shares in 1994 and
74,955,846 shares in 1993 74,176 74,956
Retained earnings 983,285 910,009
Total shareholders' equity 1,057,461 984,965
Commitments and contingent liabilities (Note 10)
$ 2,146,574 2,062,560
See accompanying notes to consolidated financial statements.
F-6
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<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
<CAPTION>
1994 1993* 1992
Amounts in thousands
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 216,117 236,385 195,934
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 157,392 141,136 126,884
Cumulative effect of a change in
accounting principle for income taxes - - 20,485
Deferred income taxes 4,414 10,406 (16,231)
Defined benefit plan 3,398 3,239 3,047
Reserve for insurance claims and self- insurance 624 (2,303) 9,260
Change in cash from:
Receivables (9,264) (45,567) (25,217)
Merchandise inventories (17,432) (80,673) (23,923)
Prepaid expenses 1,754 (19,394) (13,900)
Accounts payable 23,616 61,942 2,684
Income taxes 11,825 (27,956) 13,994
Other current accrued expenses 43,830 (64,258) 45,292
Net cash provided by operating activities 436,274 212,957 338,309
Cash flows from investing activities:
Purchases of property, plant and equipment, net (277,657) (194,786) (164,452)
Decrease (increase) in investments and other assets 62,938 113,397 (52,444)
Net cash used in investing activities (214,719) (81,389) (216,896)
Cash flows from financing activities:
Increase (decrease) in short-term borrowings (70,500) 80,000 -
Payments on capital lease obligations (3,122) (2,648) (3,010)
Purchase of common stock (39,993) (123,316) (32,122)
Proceeds of sales under associates' stock
purchase plan 2,871 6,691 18,146
Dividends paid (107,384) (100,518) (91,989)
Other 5,722 11,059 (203)
Net cash used in financing activities (212,406) (128,732) (109,178)
Increase in cash and cash equivalents 9,149 2,836 12,235
Cash and cash equivalents at the beginning of the year 22,302 19,466 7,231
Cash and cash equivalents at end of year $ 31,451 22,302 19,466
Supplemental cash flow information:
Interest paid $ 15,366 14,546 12,017
Interest and dividends received $ 4,059 15,258 14,002
Income taxes paid $ 115,788 138,576 114,221
* 53 Weeks
See accompanying notes to consolidated financial statements.
</TABLE>
F-7
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<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended June 29, 1994, June 30, 1993 and June 24, 1992
<CAPTION>
1994 1993* 1992
Amounts in thousands
<S> <C> <C> <C>
Common stock:
Beginning of year $ 74,956 76,851 77,129
Add par value of shares issued for associate stock
purchase plan and management incentive plan 19 97 587
Deduct par value of common stock acquired 799 1,992 865
End of year 74,176 74,956 76,851
Retained earnings:
Beginning of year 910,009 875,328 782,897
Net earnings 216,117 236,385 195,934
Deduct excess of cost over par value of common
stock acquired 39,194 121,324 31,257
Deduct cash dividends on common stock of $1.44,
$1.32 and $1.20 per share in 1994, 1993 and 1992,
respectively 107,384 100,518 91,989
Consolidation of Bahamas subsidiary - 17,509 -
Add excess of cost over par value of shares issued for
associate stock purchase plan and management
incentive plan 3,792 2,697 19,743
Deduct other 55 68 -
End of year 983,285 910,009 875,328
Total shareholders' equity $ 1,057,461 984,965 952,179
* 53 Weeks
See accompanying notes to consolidated financial statements.
</TABLE>
F-8
PAGE
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.Summary of Significant Accounting Policies.
(a) Fiscal Year: The fiscal year ends on the last Wednesday in June.
The fiscal year ended 1994 comprised 52 weeks, fiscal year 1993
comprised 53 weeks and fiscal year 1992 comprised 52 weeks.
(b) Basis of Consolidation: The consolidated financial statements
include the accounts of Winn-Dixie Stores, Inc. and its
subsidiaries which operate as a major food retailer in the
southeastern and southwestern United States and the Bahamas
Islands. Effective June 30, 1993, the Company consolidated its
Bahamas statements of earnings in accordance with generally
accepted accounting principles. This investment had previously
been accounted for using the cost method. The retroactive
consolidation of the Bahamas operating results did not have a
significant impact on the statements of earnings for all years
presented. Accordingly, the 1993 and prior statements of earnings
have not been restated and the previously unrecorded earnings have
been recorded directly to retained earnings.
(c) Cash and Cash Equivalents: Cash equivalents consist of highly
liquid investments with a maturity of three months or less when
purchased. Cash and cash equivalents are stated at cost plus
accrued interest, which approximates market.
(d) Short-Term Investments: Short-term investments consist of highly
liquid investments with a maturity of more than three months when
purchased. The Company uses these short-term investments in its
cash management program. Short-term investments are stated at
cost plus accrued interest, which approximates market.
(e) Inventories: Inventories are stated at the lower of cost or
market. The "dollar value" last-in, first-out (LIFO) method is
used to determine the cost of approximately 92% of inventories
consisting primarily of merchandise in stores and distribution
warehouses. Manufacturing and produce inventories are valued at
the lower of first-in, first-out (FIFO) cost or market. Elements
of cost included in manufacturing inventories consist of material,
direct labor and plant overhead.
(f) Fair Value of Financial Instruments: The carrying amount of the
following financial instruments approximates fair value because of
their short-term maturity: cash and cash equivalents; short-term
investments; trade and other receivables; short-term borrowings;
accounts payable and other accruals. See note 6 (b) for
information on interest rate swap agreements.
(g) Income Taxes: In the fourth quarter of 1992, the Company adopted
Statement of Financial Accounting Standards Number 109,
"Accounting for Income Taxes" (Statement No. 109), which requires
a change from the deferred method to the asset and liability
method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using the enacted
tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The
cumulative effect of the change in method of accounting has been
reported in the 1992 consolidated statement of earnings.
(h) Self-insurance: Self-insurance reserves are established for
automobile and general liability, workers' compensation, and
property loss costs based on claims filed and claims incurred but
not reported, with a maximum per occurrence of $2,000,000 for
automobile and general liability, $1,000,000 for workers'
compensation, $500,000 for property loss, other than windstorm and
flood, and $5,000,000 for damage due to windstorm and flood. The
Company is insured for insurance costs in excess of these limits.
(i) Depreciation and Amortization: Depreciation of plant and
equipment, which is stated at historical cost, is provided over
the estimated useful lives by the straight-line method or by
methods that produce results similar to the straight-line method.
Amortization of improvements to leased premises is provided
principally by the straight-line method over the periods of the
leases or the estimated useful lives of the improvements,
whichever is less.
F-9
PAGE
<PAGE>
(j) Store Opening Costs: The costs of opening new stores are charged
to earnings in the year incurred.
(k) Earnings Per Share: The number of shares used in the calculation
for 1994, 1993 and 1992 amounted to 74,644,036, 76,119,152 and
76,805,335, respectively, which is the weighted average number of
shares of common stock outstanding during each year.
2.Accounts Receivable.
Accounts receivable at year-end were as follows:
1994 1993
Amounts in thousands
Trade and other receivables $52,797 69,222
Construction advances 119,891 94,100
172,688 163,322
Less: Allowance for doubtful items 834 732
$ 171,854 162,590
3.Inventories.
At June 29, 1994, inventories valued by the LIFO method would have been
$205,172,000 higher ($207,201,000 higher at June 30, 1993) if they were
stated at the lower of FIFO cost or market. If the FIFO method
inventory valuation had been used for the year ended June 29, 1994,
reported net earnings would have been $1,088,000 or $0.01 per share
lower ($326,000 or $0.00 per share higher in 1993 and $7,113,000 or
$0.09 per share lower in 1992).
4.Property, Plant and Equipment.
Property, plant and equipment consists of the following:
1994 1993
Amounts in thousands
Land $ 2,724 2,733
Buildings 23,949 25,825
Furniture, fixtures, machinery and equipment 1,537,928 1,431,596
Transportation equipment 104,914 100,045
Improvements to leased premises 267,333 230,494
Construction in progress 45,329 32,770
1,982,177 1,823,463
Less: Accumulated depreciation and amortization 1,342,474 1,305,756
639,703 517,707
Leased property under capital leaes, less
accumulated amortization of
$41,429,000 ($39,697,000 in 1993) 67,076 68,926
Net property, plant and equipment $ 706,779 586,633
The Company had non-cash additions to leased property of $10.3 million,
$1.4 million and $2.9 million for 1994, 1993 and 1992, respectively.
5.Income Taxes.
As discussed in Note 1(g), the Company adopted Statement No. 109 as of
June 27, 1991. The cumulative effect of this change in accounting for
income taxes of $20,485,000 was determined as of June 27, 1991 and is
reported separately in the consolidated statement of earnings for the
year ended June 24, 1992. The cumulative effect of applying Statement
No. 109 reduced earnings for 1992, which resulted from reducing the net
deferred tax assets previously recorded for decreases in the historical
tax rates. This accounting change had no impact on the cash flows of
the Company. The accounting change did not have a significant impact on
the 1992 provision for income taxes.
F-10
PAGE
<PAGE>
The provision for income taxes consisted of:
Current Deferred Total
Amounts in thousands
1994
Federal $ 108,163 (217) 107,946
State 19,805 4,631 24,436
$ 127,968 4,414 132,382
1993
Federal $ 104,006 7,808 111,814
State 12,872 2,598 15,470
$ 116,878 10,406 127,284
1992
Federal $ 119,006 (16,602) 102,404
State 8,785 371 9,156
$ 127,791 (16,231) 111,560
The following reconciles the above provision to the Federal
statutory income tax rate:
1994 1993 1992
Federal statutory income tax rate 35.0 % 34.0 34.0
State and local income taxes, net of
federal income tax benefits 3.8 2.9 2.4
Other tax credits (1.1) (0.6) (1.8)
Other, net 0.3 (1.3) (0.6)
38.0 % 35.0 34.0
The retroactive increase in the federal corporate income tax rate from
34% to 35%, enacted on August 10, 1993 and effective on January 1,
1993, resulted in additional income tax expense in fiscal 1994. This
increase in income tax expense was offset by an increase in prepaid
income taxes resulting from the federal corporate income tax rate
increase as required by Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes."
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred liabilities at June 29, 1994,
June 30, 1993 and June 24, 1992 are presented below:
1994 1993 1992
Amounts in thousands
Deferred tax assets:
Reserve for insurance claims and self-insurance $ 61,766 62,264 64,060
Estimated loss on assets 372 - 5,097
Reserve for vacant store leases 11,248 8,971 10,996
Unearned promotional allowance 3,909 7,608 3,325
Reserve for accrued vacations 8,021 8,133 7,701
State net operating loss carryforwards 6,683 10,190 12,652
Excess of tax over book depreciation 9,283 9,406 9,475
Excess of book over tax rent expense 902 3,814 5,345
Excess of book over tax retirement expense 7,127 6,202 5,318
Uniform capitalization of inventory 4,418 4,080 4,160
Other, net 13,034 12,369 13,323
Total gross deferred tax assets 126,763 133,037 141,452
Less: Valuation allowance 6,325 6,406 6,403
Net deferred tax assets 120,438 126,631 135,049
Deferred tax liabilities:
Excess of book over tax depreciation (8,811) (6,879) (6,694)
Bahamas subsidiary foreign earnings (9,375) (8,967) -
Other, net (4,753) (8,872) (7,069)
Total gross deferred tax liabilities (22,939) (24,718) (13,763)
Net deferred tax assets $ 97,499 101,913 121,286
F-11
PAGE
<PAGE>
As discussed in Note 1 (b), the Company consolidated its Bahamas operations
effective June 30, 1993. The previously unrecorded earnings (net of deferred
income tax liability of $8,967,000) were recorded directly to retained earnings.
The valuation allowance for deferred tax assets as of June 27, 1991
was $6,932,000.
Current deferred income taxes of $56,475,000 and $54,229,000 for 1994 and 1993,
respectively, are included in the prepaid expenses in the accompanying
consolidated balance sheets.
The Company believes the results of future operations will generate sufficient
taxable income to realize the deferred tax assets.
6.Financing.
(a) Credit Arrangements: The Company has available a $200 million
Commercial Paper Program. As of June 29, 1994, there were no amounts
outstanding as compared to $80.0 million outstanding on June 30, 1993.
The Company also has short-term lines of credit totaling $250 million.
The lines of credit are available when needed during the year and are
renewable on an annual basis. The Company is not required to maintain
compensating bank balances in connection with these lines of credit.
As of June 29, 1994 there was $9.5 million outstanding under these
bank lines of credit. On June 30, 1993, there was no amount
outstanding under these bank lines of credit.
(b) Interest Rate Swap: The Company has entered into interest rate swap
agreements to reduce the impact of changes in rental payments which
are indexed to interest rate changes. At June 29, 1994, the Company
had outstanding two interest rate swap agreements, having a notional
principal amount of $50 million each, with an investment bank. These
agreements effectively change the Company's exposure on its leased
real estate with floating rental payments to fixed rental payments
based on an 8.0% interest rate. The interest rate swap agreements
mature in June, 1996 and June, 1998. The Company is exposed to
credit loss in the event of nonperformance by the other party to
these interest rate swap agreements. However, the Company does not
anticipate nonperformance by the counterpart.
Since current short-term interest rates are significantly below the
8% rate of these contracts at June 29, 1994, the estimated negative
value of these swaps was approximately $6.6 million.
7.Common Stock.
The Company has a stock purchase plan in effect for associates. Under the
terms of the Plan, the Company may grant options to associates to purchase
shares of the Company's common stock at a price at least 85% of the fair
market value at the date of grant. During fiscal year 1992, 556,224
shares of common stock were sold to associates at an aggregate price of
$19,189,728. There are 868,110 shares of the Company's common stock
available for the grant of options under the Plan.
8.Stock Options.
Under the Company's Key Employee Stock Option Plan adopted by the Board of
Directors on January 4, 1990 and approved by the shareholders on October
3, 1990, options to acquire up to 300,000 shares of common stock may be
granted to key employees at market. On January 24, 1990, options for
206,000 shares were granted at an exercise price of $28.50 per share. Of
the options granted, 103,000 became exercisable on June 26, 1991 and
103,000 became exercisable on June 24, 1992. Options under this plan
expire on December 31, 1996.
On October 7, 1992, the shareholders approved an amendment to the
Company's Key Employee Stock Option Plan to increase the number of shares
of common stock available for issuance to 500,000 shares. Under this plan
adopted by the Board of Directors on June 22, 1992, options to acquire
113,000 shares of common stock were granted to key employees at an
exercise price of $42.125 per share. Of the options granted, 56,500
became exercisable on June 30, 1993. The remaining 56,500 became
exercisable on June 29, 1994. Options under this plan expire on December
31, 1998.
F-12
PAGE
<PAGE>
On June 22, 1994, the Board of Directors, subject to shareholders
approval, adopted an amendment to the Company's Key Employee Stock Option
Plan to increase the number of shares of common stock available for
issuance to 1,000,000 shares. Under this plan, options to acquire 233,000
shares at an exercise price of $44.875 per share were granted to key
employees. Of the options granted, 116,500 shares are not exercisable
before June 28, 1995 and the remaining 116,500 shares are not exercisable
before June 27, 1996, if earned. These options expire on January 15,
2001.
Changes in options under these plans during the years ended June 29, 1994,
June 30, 1993 and June 24, 1992 were as follows:
Number of Option Price
Shares Per Share
Outstanding - June 26, 1991 206,000 $28.500
Granted -
Exercised -
Canceled -
Outstanding - June 24, 1992 206,000 $28.500
Granted 113,000 $42.125
Exercised (74,000) $28.500
Canceled -
Outstanding - June 30, 1993 245,000 $28.500-42.125
Granted 233,000 $44.875
Exercised -
Canceled -
Outstanding - June 29, 1994 478,000 $28.500-44.875
Exercisble - June 29, 1994 245,000 $28.500-44.875
Shares available for additional grant 448,000
9. Leases.
(a) Leasing Arrangements: There were 1,353 leases in effect on store
locations and other properties at June 29, 1994. Of these 1,353
leases, 70 store leases and 3 warehouse and manufacturing facility
leases are classified as capital leases. Substantially all store
leases will expire during the next twenty years and the warehouse
and manufacturing facility leases will expire during the next thirty
years. However, in the normal course of business, it is expected
that these leases will be renewed or replaced by leases on other
properties.
The rental payments on substantially all store leases are based on a
minimum rental plus a contingent rental which is based on a per-
centage of the store's sales in excess of stipulated amounts. Most
of the Company's leases contain renewal options for five-year
periods at fixed rentals.
(b) Leases: The following is an analysis of the leased property under
capital leases by major classes:
Asset balances at
June 29, 1994 June 30, 1993
Amounts in thousands
Store facilities $ 82,844 80,265
Warehouses and manufacturing facilities 25,661 28,358
108,505 108,623
Less: Accumulated amortization 41,429 39,697
$ 67,076 68,926
F-13
PAGE
<PAGE>
The following is a schedule by year of future minimum lease
payments under capital and operating leases, together with the
present value of the net minimum lease payments as of June 29,
1994:
Capital Operating
Amounts in thousands
Fiscal Year:
1995 $ 15,230 200,868
1996 15,088 195,906
1997 14,719 191,798
1998 14,162 186,976
1999 13,711 181,838
Later years 129,514 1,540,703
Total minimum lease payments 202,424 2,498,089
Less: Amount representing estimated
taxes, maintenance and insurance
costs included in total minimum
lease payments 5,714
Net minimum lease payments 196,710
Less: Amount representing interest 107,874
Present value of net minimum lease payments $ 88,836
Rental payments under operating leases including, where
applicable, real estate taxes and other expenses are as follows:
1994 1993 1992
Amounts in thousands
Minimum rentals $ 190,830 187,055 179,655
Contingent rentals 3,352 4,282 4,257
$ 194,182 191,337 183,912
10. Commitments and Contingent Liabilities.
(a) Associate Benefit Programs: The Company has noncontributory,
trusteed profit-sharing retirement programs which are in effect for
eligible associates and may be amended or terminated at any time.
Charges to earnings for contributions to the programs amounted to
$54,212,000, $54,985,000 and $49,989,000 in 1994, 1993 and 1992,
respectively.
In addition to providing profit sharing benefits, the Company makes
group insurance available to early retirees from the time they
retire until age 65 when they qualify for Medicare/Medicaid.
Currently, the early retiree group constitutes 251 associates.
This group of retirees bear the entire costs of this plan, which is
maintained totally separate from the Company's regular group
insurance plan. The Company reserves the right to modify these
benefits.
(b) Defined Benefit Plan: The Company has a Management Security Plan
(MSP), which is a non-qualified defined benefit plan providing
disability, death and retirement benefits to 588 qualified
associates of the Company. Total MSP cost charged to operations was
$4,557,000, $3,992,000 and $3,868,000 in 1994, 1993 and 1992,
respectively. The projected benefit obligation at June 29, 1994 was
approximately $30,076,000. The effective discount rate used in
determining the net periodic MSP cost was 8.0% for 1994, 1993 and
1992.
Life insurance policies, which are not considered as MSP assets for
liability accrual computations, were purchased to fund the MSP pay-
ments. These insurance policies are shown on the balance sheet at
their cash surrender values, net of policy loans aggregating
$137,640,000 and $130,296,000 at June 29, 1994 and June 30, 1993,
respectively.
The Company holds life insurance on a broad-based group of qualified
associates. These insurance policies are shown on the balance sheet
at their cash surrender value, net of policy loans aggregating
$216,591,000 at June 29, 1994.
F-14
PAGE
<PAGE>
(c) Litigation: There are pending against the Company various claims
and lawsuits arising in the normal course of business, including
suits charging violations of certain civil rights laws.
The U.S. Environmental Protection Agency has notified the Company
that it is one of the many potentially responsible parties (PRPs)
for cleanup of two designated Superfund sites located in Tampa,
Florida, three such sites in Jacksonville (2 related sites) and one
site in Madison, Florida. The Company may be a PRP for cleanup of
one non-Superfund site in Tarrant County, Texas. Although cleanup
costs are believed to be substantial, accurate estimates will not
be available until studies have been completed at the sites.
The Company has entered into orders by consent with numerous other
PRPs to conduct studies and do cleanup for three of the
Superfund sites and is negotiating an agreement with PRPs who are
under an order at another Superfund site to determine the most
cost-effective way to clean up such sites. Although under federal
statutes the Company is jointly and severally liable for cleanup
costs at each location, the Company's share of total costs is
estimated not to exceed $350,000 for four of the Superfund sites
and the Texas site. The Company believes it is not a responsible
party for cleanup of the Madison, Florida, and Tarrant County,
Texas, sites and has no estimate of costs for those matters. Other
than these two and the New Mexico site mentioned below, these
involve wastes the Company paid to be properly disposed, and were
mishandled by disposal companies or public disposal sites.
At one of the Tampa sites, the Company is one of 14 parties named
as respondents in a Unilateral Administrative Order for Remedial
Design and Remedial Action under 47 U.S.C. Section 9606(a) relating
to a disposal site formerly operated by Hillsborough County,
Florida. The parties are ordered to operate, maintain and monitor
a water cleaning system and perform Remedial Design for the site.
The costs to the Company are estimated at $150,000 in fiscal year
1994 with substantial credits for this year, with additional annual
costs for an indefinite period thereafter.
The Company is also involved in the cleanup of a fuel tank leak at
a New Mexico site formerly owned by it. The cleanup costs are to
be prorated with others on the basis of the total time of ownership
of the participants. The Company's share is 15% of the total costs
estimated to be less than $150,000, with minimal annual monitoring
costs thereafter.
It is the Company's policy to accrue and charge against earnings,
the environmental cleanup costs when it is probable that a
liability has been incurred and an amount can be reasonably
estimated, including evaluation of the other PRPs' ability to pay.
The Company believes its ultimate liability as to these
environmental matters will not necessitate significant capital
outlays, will not materially affect the annual earnings of the
Company, nor cause material changes in the Company's business. It
is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in
environmental regulation.
Although the amount of liability with respect to all other claims
and lawsuits cannot be ascertained, management is of the opinion
that any resulting liability will not have a material affect on
the Company's consolidated earnings or financial position.
11. Related Party Transactions.
The Company is essentially self-insured for purposes of employee group
life, medical, accident and sickness insurance, with The American
Heritage Life Insurance Company, a related party, providing
administrative services and expenses for medical and accident claims.
The American Heritage Life Insurance Company also financed the
development and expansion of certain retail stores. Total payments
aggregating $15,109,000, $34,108,000 and $23,329,000 were made in
1994, 1993 and 1992, respectively.
F-15
PAGE
<PAGE>
12. Quarterly Results of Operations (Unaudited).
<TABLE>
<CAPTION>
The following is a summary of the unaudited quarterly results of operations for the years ended June
29, 1994, June 30, 1993 and June 24, 1992
Quarters Ended
Sept. 22 Jan. 12 April 6 June 29
1994 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,464,440 3,380,986 2,651,491 2,585,252
Gross profit on sales $ 556,085 766,461 603,914 608,028
Net earnings $ 35,951 63,781 52,032 64,353
Earnings per share $ 0.48 0.85 0.70 0.87
Net LIFO charge (credit) $ 1,690 2,253 1,690 (6,721)
Net LIFO charge (credit) per share $ 0.02 0.03 0.02 (0.08)
Dividends per share $ 0.24 0.48 0.36 0.36
Market price range $67.75-56.00 60.38-49.00 58.38-48.25 52.25-43.50
</TABLE>
<TABLE>
<CAPTION>
Quarters Ended
Sept. 16 Jan. 6 March 31 June 30
1993 (12 Weeks) (16 Weeks) (12 Weeks) (13 Weeks)
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,392,129 3,244,672 2,504,214 2,690,520
Gross profit on sales $ 531,506 726,066 566,615 621,936
Net earnings $ 33,377 63,031 57,199 82,778
Earnings per share $ 0.44 0.82 0.75 1.10
Net LIFO charge (credit) $ 1,688 2,405 1,688 (5,455)
Net LIFO charge (credit) per share $ 0.02 0.03 0.02 (0.07)
Dividends per share $ 0.22 0.44 0.33 0.33
Market price range $58.63 - 41.63 79.50 - 57.50 79.75 - 66.75 67.38 - 52.75
</TABLE>
<TABLE>
<CAPTION>
Quarters Ended
Sept. 18 Jan. 8 April 1 June 24
1992 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,333,880 3,159,289 2,433,041 2,411,131
Gross profit on sales $ 515,675 700,884 556,205 587,734
Earnings before income taxes and
cumulative effect of a change
in accounting principle $ 40,385 81,535 81,678 124,381
Cumulative effect of a change in
accounting principle $ 20,485 - - -
Net earnings $ 6,169 53,813 53,908 82,044
Earnings per share:
Earnings before cumulative
effect of a change
in accounting principle $ 0.35 0.70 0.70 1.07
Cumulative effect of a change in
accounting principle $ (0.27) - - -
Net earnings $ 0.08 0.70 0.70 1.07
Net LIFO charge (credit) $ 3,688 4,750 2,500 (18,051)
Net LIFO charge (credit) per share $ 0.05 0.06 0.04 (0.24)
Dividends per share $ 0.20 0.40 0.30 0.30
Market price range $39.38 - 34.63 39.88 - 35.50 44.63 - 35.75 44.63 - 40.00
</TABLE>
As discussed in Note 1 (g), the Company adopted Statement No. 109. The first
quarter results have been restated to reflect the cumulative effect of
this change in accounting principle.
F-16
PAGE
<PAGE>
During 1994, 1993 and 1992, the fourth quarter results reflect a change from
the estimate of inflation used in the calculation of LIFO inventory to the
actual rate experienced by the Company of 1.0% to 0.1%, 1.0% to 0.1% and 2.3%
to (0.6)%, respectively.
<TABLE>
<CAPTION>
Fourth Quarter Results of Operations
June 29, 1994 June 30, 1993 June 24, 1992
(12 Weeks) (13 Weeks) (12 Weeks)
Amounts in thousands
<S> <C> <C> <C>
Net sales $ 2,585,252 2,690,520 2,411,131
Cost of sales 1,977,224 2,068,584 1,823,397
Gross profit on sales 608,028 621,936 587,734
Operating and administrative expenses 522,057 523,780 499,290
Operating income 85,971 98,156 88,444
Cash discounts and other income, net 19,166 32,774 38,682
Interest expense (1,411) (3,579) (2,745)
Earnings before income taxes 103,726 127,351 124,381
Income taxes 39,373 44,573 42,337
Net earnings $ 64,353 82,778 82,044
</TABLE>
F-17
PAGE
<PAGE>
Proxy/Voting Instruction Card
WINN-DIXIE STORES, INC.
This Proxy is Solicited on Behalf of the Board of Directors for the Annual
Meeting of Shareholders on October 5, 1994.
The undersigned hereby appoints A. DANO DAVIS, ROBERT D. DAVIS and T. WAYNE
DAVIS, or any of them, as proxies with full power of substitution, to vote all
shares of Common Stock which the undersigned would be entitled to vote if
personally present, at the Annual Meeting of Shareholders of the Company on
October 5, 1994, and at any adjournment thereof, upon all subjects that may
properly come before the meeting, including the matters described in the proxy
statement furnished herewith, subject to any directions indicated on the other
side of this card.
If no directions are given, the proxies will vote for (1) the election of all
nominess listed below, (2) the Directors' proposals 2, 3 and 4 listed on the
other side of the card, and (3) at their discretion, on any other matters that
may properly come before the meeting. The undersigned hereby revokes any
proxy heretofore given to any person or persons whomsoever (other than the
proxies named above) to vote such Common Stock and ratifies and confirms all
that said proxies may or shall do by virtue hereof.
Nominees for election as Class II Directors are: Robert D. Davis, James
Kufledt, Charles H. McKellar and David F. Miller. Nominee for election as
Class III Director is: Julia B. North.
Your vote is important! Please sign and date on the reverse and return
promptly in the enclosed postage-paid envelope or otherwise to Wayne E.
Ripley, Jr., Secretary, P.O. Box B, Jacksonville FL 32203, so that your
shares can be represented at the meeting.
PAGE
<PAGE>
Please mark Votes _____
as in this example: (box with X)
This Proxy will be voted as directed. If no direction is made, it will
be voted "FOR" all proposals set forth below. The Board of Directors
recommends a vote "FOR" the following proposals.
_____________________________________________________________________________
Directors recommend a vote "FOR"
1. ELECTION OF DIRECTORS
_____ FOR all nominees listed below _____ WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
_____ contrary) _____ below
Class II (1997) Robert D. Davis James Kufeldt Charles H. Mckellar
David F. Miller
Class III (1996) Julia B. North
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike out that nominee's name on the list above.)
_________________________________________
Directors recommend a vote "FOR"
For Against Abstain
2. Ratification of
Amendment of
Key Employee
Stock Option
Plan. _____ ______ _____
3. Increase
authorized shares
of Common Stock
to 200,000,000. _____ ______ _____
4. Ratification of
KPMG Peat
Marwick LLP
as auditors. _____ ______ _____
Account No.
Sign her as X_________________________________ Date ___________, 1994
name(s) appears
above X________________________________________________________
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as a fiduciary or for an estate,
trust, corporation or partnership, your title or capacity
should be stated
<PAGE>
