WINN-DIXIE STORES, INC.
5050 EDGEWOOD COURT
JACKSONVILLE, FLORIDA 32254-3699
Notice of Annual Meeting of Shareholders
To be held October 2, 1996
To all Shareholders of Winn-Dixie Stores, Inc.:
Notice is Hereby Given that the Annual Meeting of Shareholders of Winn-Dixie
Stores, Inc. (the "Company") will be held in the headquarters office of the
Company, 5050 Edgewood Court, Jacksonville, Florida at 9:00 a.m., on Wednesday,
October 2, 1996, for the following purposes:
1. To elect three Class III Directors for terms expiring in 1999.
2. To approve the material terms of the incentive compensation performance
goals provided in the Company's Annual Incentive Plan, Performance Unit
Plan, Restricted Stock Plan and Key Employee Stock Option Plan.
3. To take action with respect to the adoption of an amendment to the Revised
Winn-Dixie Stock Purchase Plan for Employees to (i) make available for sale
thereunder an additional 2,000,000 shares of the Company's Common Stock, (ii)
clarify that the maximum number of shares of the Company's Common Stock
available under such Plan shall be correspondingly increased if the Company's
Common Stock is split up, divided or otherwise reclassified into a greater
number of shares and (iii) reapprove and readopt such Plan, as so amended.
4. To take action with respect to the ratification of the appointment by the
Board of Directors of the Company of KPMG Peat Marwick LLP as auditors of the
Company for the fiscal year commencing June 27, 1996.
5. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
Notice is Further Given that the Board of Directors has fixed August 12, 1996,
as the record date, and only holders of the Company's Common Stock of record at
the close of business on that date will be entitled to notice of, and to vote
at, the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors
Judith W. Dixon
Secretary
Jacksonville, Florida
August 30, 1996
EACH SHAREHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY.
IN THE EVENT A SHAREHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF
SO DESIRED, REVOKE THE PROXY AND VOTE HIS OR HER SHARES IN PERSON.
<PAGE>
WINN-DIXIE STORES, INC.
5050 Edgewood Court
Jacksonville, Florida 32254-3699
PROXY STATEMENT AND CONSOLIDATED FINANCIAL STATEMENTS
for
Annual Meeting of Shareholders
To be held October 2, 1996
GENERAL INFORMATION
The Board of Directors of Winn-Dixie Stores, Inc. (the "Company") solicits
your proxy for use at the 1996 Annual Meeting of Shareholders to be held on
October 2, 1996, at the Company's headquarters offices at the address above,
commencing at 9:00 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, this Notice of Meeting and Proxy Statement and
the enclosed form of proxy to the beneficial owners of such shares of stock.
The Annual Report of the Company to its shareholders for the 1995-96 fiscal
year is being mailed with this Proxy Statement to shareholders entitled to vote
at the Annual Meeting.
Securities and Exchange Commission ("SEC") rules require that an annual report
precede or be included with the Company's proxy materials. Shareholders with
multiple accounts may be receiving more than one annual report, which is costly
to the Company and may be inconvenient to these shareholders. Such
shareholders may authorize the Company to discontinue mailing extra reports by
marking the appropriate box in the proxy card for selected accounts. Such an
election will take effect at the end of the Company's 1996-97 fiscal year.
At least one account must continue to receive an annual report. Eliminating
these duplicate mailings will not affect receipt of future proxy statements
and proxy cards nor the mailing of dividend checks, dividend reinvestment
statements, or special notices. To resume the mailing of an annual report to
an account, please make a written request to: First Chicago Trust Company of
New York, P. O. Box 2500, Jersey City, New Jersey 07303-2500.
The mailing address of the principal executive offices of the Company is 5050
Edgewood Court, Jacksonville, Florida 32254-3699. The approximate date on
which this Proxy Statement and form of proxy are first being sent or given to
shareholders is August 30, 1996.
VOTING PROCEDURES
All properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. Regarding the election of Directors to serve until the 1999 Annual
Meeting of Shareholders, in voting by proxy, shareholders may vote in favor of
all nominees or withhold their votes as to all nominees or withhold their votes
as to specific nominees. With respect to the other proposals to be voted upon,
shareholders may vote in favor of a proposal, against a proposal or may abstain
from voting. Shareholders should specify their choices on the enclosed form of
proxy. If no specific instructions are given with respect to the matters to be
acted upon, the shares represented by a signed proxy will be voted FOR the
election of all nominees, FOR the proposal to approve the material terms of the
incentive compensation performance goals provided in certain Company plans, FOR
the proposal to amend the Revised Winn-Dixie Stock Purchase Plan for Employees
and FOR the proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors. Directors will be elected by a plurality of the votes
cast by the shareholders voting in person or by proxy at the Annual Meeting.
Approval of the amendment to the Revised Winn-Dixie Stock Purchase Plan for
Employees will require the affirmative vote of the holders of a majority of the
shares of Common Stock present or represented at the Annual Meeting and
entitled to vote. Approval of the material terms of the incentive compensation
performance goals provided in certain Company plans and ratification of the
appointment of KPMG Peat Marwick LLP as independent auditors will require the
affirmative vote of the holders of a majority of the shares of Common Stock
voting on the proposal in person or by proxy at the Annual Meeting. Thus, in
the case of approval of the adoption of the amendment of the Revised Winn-Dixie
Stock Purchase Plan for Employees, abstentions will have the same effect as a
negative vote, but abstentions will have no effect on the vote for election of
Directors, ratification of the appointment of independent auditors or approval
of the material terms of the incentive compensation performance goals. Broker
non-votes will not be included in vote totals and will have no effect on the
outcome of any vote. A broker non-vote generally occurs when a broker who
holds shares in street-name for a customer does not have authority to vote on
certain non-routine matters because its customer has not provided any voting
instructions on the matter.
If a shareholder is a participant in the Dividend Reinvestment Plan of
Winn-Dixie Stores, Inc., the proxy card serves as voting instruction for the
number of full shares in the dividend reinvestment plan account, as well as
other shares registered in the participant's name. If a shareholder is a
participant in the Winn-Dixie Stores, Inc. Profit Sharing/401(k) Plan (the
"401(k) Plan"), the proxy card will also serve as voting instruction for the
trustee of the 401(k) Plan where all accounts are registered in the same name.
If voting instructions are not received for shares in the 401(k) Plan, those
shares will be voted in the same proportion as the shares in such plan for
which voting instructions are received.
Only owners of record of shares of Common Stock of the Company at the close of
business on August 12, 1996, are entitled to vote at the meeting or
adjournments or postponements thereof. Each owner of record on the record
date is entitled to one vote for each share of Common Stock of the Company so
held. On August 12, 1996, there were 151,445,312 shares of Common Stock of
the Company issued and outstanding.
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 Annual
Meeting of Shareholders, three Directors are to be elected in Class III to hold
office until the 1999 Annual Meeting of Shareholders or until their successors
are elected and qualified. The persons designated as nominees for election as
Directors in Class III are Armando M. Codina, Radford D. Lovett and Julia B.
North. Each of such nominees is currently a Director of the Company.
Should any one or more of these nominees become unable to serve for any reason,
or for good cause will not serve, which is not anticipated, the Board of
Directors may, unless the Board by resolution provides for a lesser number of
Directors, designate substitute nominees, in which event the persons named in
the enclosed proxy will vote proxies that would otherwise be voted for all
named nominees for the election of such substitute nominee or nominees.
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 three nominees.
BOARD OF DIRECTORS OF WINN-DIXIE STORES, INC.
Has Been
Age A Director
Name, Principal Occupation for the as of Continuously
Past Five Years, Directorships August 12, 1996 Since
CLASS III DIRECTOR NOMINEES
FOR TERMS EXPIRING IN 1999
Armando M. Codina - For more than the last five years,
Chairman of the Board and President of Codina Group,
Inc.; also a Director of American Bankers Insurance
Group, Inc., BellSouth Corporation, AMR, Inc., and
FPL Group, Inc. .......................................... 49 1987
Radford D. Lovett - For more than the last five years,
Chairman of the Board of Commodores Point Terminal
Corporation; also a Director of First Union Corporation,
American Heritage Life Investment Corporation, Florida
Rock Industries, Inc., and FRP Properties, Inc. ........... 62 1983
Julia B. North - April 1996 to date, President of Consumer
Services, a business unit of BellSouth Telecommunications,
Inc.; for more than five years prior thereto, Vice
President of BellSouth Telecommunications, Inc. ........... 48 1994
INCUMBENT CLASS I DIRECTORS WHOSE
TERMS EXPIRE IN 1998
A. Dano Davis - For more than the last five years, Chairman
of the Board and Principal Executive Officer of the Company;
with the Company since 1968; also a Director of First Union
National Bank of Florida, and American Heritage Life
Investment Corporation .................................... 51 1981
T. Wayne Davis - For more than the last five years, a
private investor; with the Company 1971-1987; Chairman of
the Board of General Parcel Service, Inc.; also a Director
of Enterprise National Bank, Enstar Group, Inc., and
AccuStaff, Incorporated ................................... 49 1981
Carleton T. Rider - August 1993 to date, Continuous
Improvement Officer, Mayo Foundation; 1985 to July 1993,
Administrator, Mayo Clinic Jacksonville; also a Director
of St. Luke's Hospital .................................... 51 1992
Charles P. Stephens - For more than the last five years,
Vice President, Director and a principal stockholder of
Norman W. Paschall Co., Inc. (brokers, importers, exporters
and processors of textile fibers and by-products) ......... 58 1982
INCUMBENT CLASS II DIRECTORS
WHOSE TERMS EXPIRE IN 1997
Robert D. Davis - For more than the last five years,
Chairman of the Board of D.D.I., Inc.; with the Company
1955-1990; also a Director of American Heritage Life
Investment Corporation, First Union Corporation, Stein
Mart, Inc., and Florida Rock Industries, Inc. ............ 64 1972
James Kufeldt - For more than the last five years,
President of the Company; with the Company since 1961;
also a Director of Barnett Bank of Jacksonville, N.A. .... 58 1988
Charles H. McKellar - For more than the last five years,
Executive Vice President of the Company; with the Company
since 1957 ............................................... 58 1988
David F. Miller - March 1996 to date, President and Chief
Operating Officer of What A World, Inc.; for more than the
last five years, Chairman of the Board of PureIce of the
South, Inc.; prior to that time was Vice Chairman of the
Board of JC Penney Company, Inc. and President and Chief
Operating Officer of JC Penney Stores and Catalog ........ 67 1987
The Company was founded by Messrs. A.D., James E., M. Austin and Tine W. Davis
(the "Founding Brothers"), all of whom are deceased. Mr. A. Dano Davis, the
Company's Chairman and Principal Executive Officer, is the son of Mr. James E.
Davis. Mr. Robert D. Davis is the son of Mr. A. D. Davis. Mr. T. Wayne
Davis is the son of Mr. Tine W. Davis. Mr. Charles P. Stephens is the
son-in-law of Mr. M. Austin Davis.
PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of the Company's Common
Stock by each person who, as of June 30, 1996, 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) 60,337,056 39.78
c/o D.D.I., Inc.
5050 Edgewood Court
Jacksonville, FL 32254
(1) Relatives of the Founding Brothers, trusts, estates, corporations and other
entities involving them and their associates (collectively, 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. 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 58,154 shares, those in excess of the pro
rata beneficial interest of the Davis Family in 100,000 shares held by
American Heritage Life Investment Corporation.
SECURITIES OWNERSHIP OF MANAGEMENT
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 June 30, 1996.
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 ....... 12,882 12,882 *
A. Dano Davis ........... 1,770,704 5,148,989 6,919,693 4.56
Robert D. Davis ......... 356,894 2,781,355 3,138,249 2.07
T. Wayne Davis .......... 504,450 2,105,167 2,609,617 1.72
James Kufeldt ........... 355,414 14,740 370,154 .24
Radford D. Lovett ....... 15,168 15,168 *
Charles H. McKellar ..... 185,414 185,414 .12
David F. Miller ......... 800 800 *
Julia B. North .......... 2,586 2,586 *
Carleton T. Rider ....... 900 900 *
Charles P. Stephens ..... 20,788 2,765,335 2,786,123 1.84
E. T. Walters ........... 108,888 108,888 *
Charles E. Winge ........ 111,764 111,764 *
Directors and Executive
Officers as a Group
(30 persons).......... 4,361,124 12,815,586 17,176,710 11.32
* Less than .1% of issued and outstanding shares of Common
Stock of the Company.
(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: Robert D. Davis, 621,577; T. Wayne
Davis, 419,509; James Kufeldt, 14,740; Radford D. Lovett, 148; Charles H.
McKellar, 10,523; Carleton T. Rider, 900; Charles P. Stephens, 2,765,325; and
Charles E. Winge, 17,224. The holdings set forth above exclude 33,158,872
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.
Dano Davis, Robert D. Davis, T. Wayne Davis, Charles P. Stephens and Charles P.
Stephens' wife have direct or indirect voting and/or investment powers, but no
pecuniary interests, and as to which they disclaim beneficial ownership.
Finally, the holdings set forth above exclude 7,674,747 shares held indirectly
by the Estate of A. D. Davis whose personal representative, Robert D. Davis,
has indirect shared voting and dispositive powers with respect to such shares.
The holdings set forth above include restricted shares awarded as Long-Term
Incentive Awards pursuant to the Company's Officer Compensation Program.
Certain 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, 6,640 shares; Mr. McKellar, 4,836 shares; Mr.
Walters, 2,110 shares, and Mr. Winge, 2,110 shares. Such shares are
included because the determination of whether such performance goals have
been met is not made until the audited financials for the Company for the
1995-96 fiscal year have been completed, which occurs in early fiscal year
1996-97. Certain other shares are subject to forfeiture if certain
performance goals are not met within the three fiscal-year period expiring
June 25, 1997, as follows: Mr. Kufeldt, 8,156 shares; Mr. McKellar, 5,942
shares; Mr. Walters, 2,592 shares; and Mr. Winge, 2,592 shares. Certain
other shares are subject to forfeiture if certain performance goals are not
met within the three fiscal-year period expiring June 24, 1998, as follows:
Mr. Kufeldt, 6,762 shares; Mr. McKellar, 4,926 shares; Mr. Walters, 2,150
shares; and Mr. Winge, 2,150 shares. The holdings for the 22 officers
within the Directors and Executive Officers group total 105,614 restricted
shares.
The holdings set forth above include equivalent shares credited to the Stock
Equivalent Accounts of Directors under the Directors' Deferred Fee Plan (see
"Directors' Fees"): Mr. Codina, 9,882 equivalent shares; Mr. Robert D.
Davis, 6,026 equivalent shares; Mr. Lovett, 8,356 equivalent shares; and
Ms. North, 2,186 equivalent shares. These holdings are payable only in cash
upon retirement.
The holdings set forth above also include the equivalent of 6,984 shares
credited to Mr. Kufeldt's account and 19,356 shares to Mr. Winge's account,
allocated by them to the Company stock fund within the Profit Sharing Plan, and
a total of 63,054 shares for all executive officers as a group in such fund.
These holdings further include shares under options granted on June 15, 1992,
which are now exercisable, of 50,000 shares for Mr. Kufeldt, 40,000 shares
for Mr. McKellar, 24,000 shares for Mr. Walters and 24,000 shares for Mr.
Winge. These holdings also include shares under additional options granted
on June 22, 1994, 50% of which are exercisable at June 30, 1996, of 50,000
shares for Mr. Kufeldt, 40,000 shares for Mr. McKellar, 24,000 shares for
Mr. Walters and 24,000 shares for Mr. Winge. These share options are more
fully described in the table on options on page 9.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), 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 SEC
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 recently completed fiscal year ended on June 26,
1996, all filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were complied with, except that
(i) four family trusts for which Mr. Charles P. Stephens serves as
co-trustee each filed a Form 3 that was approximately three months late due to
an oversight with respect to attributed ownership; and (ii) Mr. T. Wayne
Davis and three family trusts for which he serves as trustee each filed a
Form 5 reporting a series of pledges that were not reported at the time such
pledges were made due to an oversight with respect to attributed ownership.
MEETINGS OF THE BOARD AND COMMITTEES
During the most recently completed fiscal year, the Board of Directors held
four regular meetings and took action by unanimous written consent in lieu of a
meeting three times. All current Directors attended at least 75% of the
meetings of the Board and of the committees on which they served, with the
exception of Mr. Armando M. Codina who did not attend two meetings of the
Board and one Audit Committee meeting and Mr. Carleton T. Rider who did not
attend two meetings of the Board and one meeting of each of the Audit
Committee and the Compensation Committee.
The Board of Directors has Audit, Nominating and Compensation Committees. The
Audit Committee is composed of Mr. David F. Miller, Chairman, and Messrs.
Armando M. Codina, Radford D. Lovett, Carleton T. Rider and Charles P.
Stephens, and Ms. Julia B. North. The Audit Committee, whose members are
not officers, employees, or retired employees of the Company, held two
meetings during the fiscal year. 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 did not meet during fiscal year 1995-96. The
Nominating Committee will consider nominees recommended by shareholders, who
may submit names and biographical data and qualifications in writing to the
Secretary of the Company.
Previously, the Board of Directors appointed separate committees to establish,
review and administer the Company's Officer Compensation Program and the Key
Employee Stock Option Plan, including the Long-Term Officer Compensation
Committee, the Base Compensation and Annual Incentive Plan Committee and the
Key Employee Stock Option Committee. The Board of Directors determined it
would be in the best interest of the Company to consolidate the duties and
powers of these committees into the Compensation Committee and for the
Compensation Committee to be composed solely of outside, independent
directors. To accomplish this, on April 17, 1996, the Board of Directors
(i) removed all directors who were not outside, independent directors from
the Compensation Committee, (ii) dissolved the Long-Term Officer Compensation
Committee, the Base Compensation and Annual Incentive Plan Committee, and the
Key Employee Stock Option Committee, and (iii) authorized the Compensation
Committee to exercise all powers, duties and responsibilities of these
dissolved committees.
Prior to April 17, 1996, the Compensation Committee, composed of Mr. David F.
Miller, Chairman, and Messrs. Radford D. Lovett, Armando M. Codina, A. Dano
Davis and James Kufeldt and Ms. Julia B. North, set and reviewed the salary
and benefits structure of the Company for fiscal year 1995-96, including base
salary, cash bonus, and restricted stock and performance unit awards for
executive officers. As of April 17, 1996, the Compensation Committee, composed
of Mr. Radford D. Lovett, Chairman, and Messrs. Armando M. Codina and
Carleton T. Rider and Ms. Julia B. North, establishes and reviews the salary
and benefits structure of the Company applicable to officers and key
employees, as well as the Key Employee Stock Option Plan, including base
salary, cash bonus, restricted stock, long-term stock option and performance
unit awards. The newly composed Compensation Committee met one time during
the most recently completed fiscal year.
Prior to its dissolution, the Long-Term Compensation Committee, composed of
Messrs. A. Dano and Robert D. Davis, recommended restricted stock and
performance unit awards that were then reviewed and approved by the
Compensation Committee. Prior to its dissolution, the Base Compensation and
Annual Incentive Plan Committee, composed of Messrs. A. Dano Davis, Robert
D. Davis and James Kufeldt, recommended base salary and annual cash bonus
awards that were then reviewed and approved by the Compensation Committee.
Prior to its dissolution, the Key Employee Stock Option Committee, composed
of Messrs. A. Dano and Robert D. Davis, determined long-term stock option
awards to officers and key employees. These committees met as a group with
the Compensation Committee two times during the most recently completed
fiscal year, to review performance under the plans established at the end of
the prior fiscal year for 1995-96. After April 16, 1996, the Compensation
Committee reviewed performance under the plans for stock and compensation to
be awarded for fiscal year 1995-96 and set the performance goals and
compensation under the plans for fiscal year 1996-97. The activities of the
Compensation Committee are described further in the Report on Executive
Compensation beginning on page 10.
DIRECTORS' FEES
Directors are paid a retainer fee of $12,000 per annum plus $3,000 for
attendance at each regular meeting of the Board. Directors are also paid $1,000
for each action by written consent in lieu of a meeting. Members of the Audit,
Nominating, and Compensation Committees are paid $3,000 for each committee
meeting attended. Travel expenses of Directors incurred in traveling to
Committee and Directors' meetings are also reimbursed by the Company. Members of
the Board of Directors who are also employees are not paid Director's fees or
fees for attending Committee meetings. Members of the now dissolved Long-Term
Officer Compensation, Base Compensation and Annual Incentive Plan, and Key
Employee Stock Option Committees were not paid for their meetings.
A Director may elect to defer payment of all or any part of the above fees
until termination as a Director under a Deferred Fee Plan for Directors
effective June 30, 1988, with fees credited to an Income Account at a prime
rate of interest or to a Stock Equivalent Account based on the closing market
price of the Company's Common Stock on the date fees are earned. The
deferred fees are payable only in cash in a single payment or annual
installments upon retirement. Messrs. Robert D. Davis, Lovett and Codina and
Ms. North have elected to defer fees during the fiscal year under the
Deferred Fee Plan.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation of the
Principal Executive Officer and the four other most highly compensated
executive officers who served in such capacities as of June 26, 1996, which
was the end of the last completed fiscal year.
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation <F1>
---------------------------- -----------------------------
Awards
--------
Fiscal year Other Restricted Long-Term All Other
Name and Ended Last Annual Stock Incentive Compensa-
Principal Position Wednesday Salary<F2> Compensa- Award<F3> Plan tion,<F4>
in June ($) Bonus ($) tion($) ($) Options(#) Payouts ($) ($)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A. Dano Davis 1996 376,955 376,955 - - - - 58,863
Chairman of the Board 1995 365,976 351,524 - - - - 49,264
1994 365,976 351,524 - - - - 12,004
James Kufeldt 1996 376,955 376,955 - 182,988 - 132,600 58,700
President 1995 365,976 351,524 - 182,988 50,000 130,000 55,006
1994 365,976 351,524 - 176,800 - - 13,860
Charles H. McKellar 1996 343,298 274,638 - 133,320 - 96,608 40,063
Executive Vice President 1995 333,299 254,794 - 133,320 40,000 94,714 44,290
1994 333,299 254,794 - 128,811 - - 13,860
Charles E. Winge 1996 199,679 145,741 - 58,159 - 42,144 30,025
Senior Vice President 1995 193,863 115,874 - 58,159 24,000 41,318 28,895
1994 193,863 115,874 - 56,192 - - 10,835
E. T. Walters 1996 199,679 136,912 - 58,159 - 42,144 29,201
Senior Vice President 1995 193,863 135,182 - 58,159 24,000 41,318 25,762
1994 193,863 135,182 - 56,192 - - 11,315
<FN>
<F1> Long-term compensation amounts are shown for years in which
paid, although earned in the prior year. The summary compensation tables in
prior Company proxy statements reflected long-term compensation in the year
earned.
<F2> Includes compensation amounts earned during the fiscal year but deferred
under the Company's 401(k) plan (except for Mr. A. Dano Davis in 1994 when he
did not participate) and amounts contributed under the Company's Senior
Corporate Officers' Management Security Plan (Mr. A. Dano Davis, $7,467; Mr.
Kufeldt, $9,632; Mr. McKellar, $9,905; Mr. Winge, $8,494; and Mr. Walters,
$12,900).
<F3> Dividends are paid on restricted shares at the ordinary rate. Value is
determined based upon the closing market price of the Company's Common Stock on
the date of grant. The aggregate of restricted shares held and their value at
June 26, 1996, were: Mr. A. Dano Davis, no shares; Mr. Kufeldt, 21,558
shares, $754,530; Mr. McKellar, 15,704 shares, $549,640; Mr. Winge, 6,852
shares, $239,820; and Mr. Walters, 6,852 shares, $239,820. 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.
<F4> Includes (a) Company contributions to the Company's Profit Sharing Plan of
$7,568 for each of the named officers; (b) Company matching payments under the
Company's 401(k) Plan of $2,250 for each of the named officers; and (c) $4,272
of merchandising contest awards for each of Mr. Winge and Mr. Walters. Also
includes (a) Company contributions to the Company's Supplemental Retirement Plan
("SRP") for the 1995-96 fiscal year of $31,791 for Mr. Davis, $31,682 for Mr.
Kufeldt, $16,713 for Mr. McKellar, $9,652 for Mr. Winge and $9,101 for Mr.
Walters and (b) Company matching 401(k) payments under the Company's SRP for the
1995-96 fiscal year of $17,254 for Mr. Davis, $17,200 for Mr. Kufeldt, $13,532
for Mr. McKellar, $6,283 for Mr. Winge and $6,010 for Mr. Walters. The
fiscal year ended June 26, 1996 was the second full year the Company's SRP was
in existence.
</FN>
</TABLE>
Option Exercises and Fiscal Year-End Values
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 26, 1996, and the number and value
of unexercised options held by such executive officers at fiscal year end.
<TABLE>
<CAPTION>
Number of Securities Value of Unexcercised
Underlying Unexercised in-the-Money
Shares Value Options at FY-End (#) Options at FY-End ($)(1)
Acquired on realized ------------------------------------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. Dano Davis --- --- --- --- --- ---
James Kufeldt --- --- 75,000 25,000 1,010,938 314,063
Charles H. McKellar 80,000 1,485,000 60,000 20,000 808,750 251,250
Charles E. Winge --- --- 36,000 12,000 485,250 150,750
E.T. Walters --- --- 36,000 12,000 485,250 150,750
<FN>
<F1> The closing price of the Company's Common Stock of $35.00 as
reported on the New York Stock Exchange composite tape on June 26, 1996, less
the exercise price, was used in calculating the value of unexercised options.
The exercise price is $21.063 per share for the presently exercisable options
for 50,000 shares held by James Kufeldt, 40,000 shares held by Charles H.
McKellar, 24,000 shares held by E. T. Walters and 24,000 shares held by Charles
E. Winge. The exercise price is $22.438 per share for the presently exercisable
options for 25,000 shares held by James Kufeldt, 20,000 shares held by Charles
H. McKellar, 12,000 shares held by E. T. Walters and 12,000 shares held by
Charles E. Winge. The exercise price is $22.438 per share for all unexercisable
options.
</FN>
</TABLE>
LONG-TERM INCENTIVE PLANS AWARDS IN LAST FISCAL YEAR
Restricted Stock Plan. In connection with the Company's Officer Compensation
Program, the Company provides its officers with an opportunity to earn shares of
the Company's Common Stock through a restricted stock plan. The restricted
stock awards are designed to motivate the Company's officers to make decisions
and to act in the best interest of the Company's shareholders by having the
restricted stock vest when goals for a three-year period are achieved. For the
awards made during fiscal year 1995-96 for the period ending in fiscal year
1997-98, goals are based upon improving the Company's customer image score. No
award is made for results that are less than the designated threshold. The
restricted stock awards granted during fiscal year 1995-96 are listed in the
Summary Compensation Table.
Performance Unit Plan. In connection with the Company's Officer Compensation
Program, the Company provides its officers with an opportunity to earn
additional cash compensation through a performance unit plan. The performance
units are designed to reward officers for improvements in specified areas of
Company performance for a three-year period. For the awards made during fiscal
year 1995-96 for the period ending in fiscal year 1997-98, goals are based upon
a matrix of the increase in identical store sales and average sales for stores
over 35,000 square feet. No award is made for improvements that are less than
the designated threshold. Such performance unit grants, as outlined below, if
earned, would be paid in early fiscal year 1998-99 for results in the
performance period ending in fiscal year 1997-98.
Estimated Future Payouts
Number of Under Non-Stock Price-Based Plans
Performance Performance ---------------------------------
Units Granted Period
Name Last FY Covered Threshold Target($) Maximum($)
- ----------------- -------------- ----------- --------- --------- ----------
A. Dano Davis --- --- --- --- ---
James Kufeldt 122,510 1996-98 --- 122,510 183,478
Charles H. McKellar 89,257 1996-98 --- 89,257 133,886
Charles E. Winge 38,937 1996-98 --- 38,937 58,406
E.T. Walters 38,937 1996-98 --- 38,937 58,406
REPORT ON EXECUTIVE COMPENSATION
The Company's compensation for its executive officers has developed over the
years and reflects the overall compensation philosophy of the Company and the
Founding Brothers. The Company's Officer Compensation Program (the "Program")
for fiscal year 1995-96 incorporated recommendations of a consultant designed to
fairly compensate executives for their performance and contribution to the
Company. Overall objectives are to motivate executive officers, as well as
other officers, to achieve the Company's long and short-term performance goals
and to reward them based in part upon performance of the Company and in part
upon their individual contributions to that performance; to motivate such
persons 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 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, as well as a discretionary portion
to allow adjustments for extraordinary circumstances; and (3) long-term
incentive compensation, based upon a restricted stock plan and a performance
unit plan. Under the restricted stock plan, grants of restricted stock that
pay dividends are given to the Company's officers, but these shares do not
vest unless and until certain performance requirements are met over a
three-year period. The performance requirements established in fiscal year
1995-96 under the restricted stock plan were based on improving the Company's
customer image score. Under the performance unit plan, participants can earn
a cash bonus based upon three-year performance goals. The performance goals
established in fiscal year 1995-96 under the performance unit plan were based
on improvements in certain sales parameters.
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 Senior Vice Presidents, it is approximately
equally weighted between long-term and annual compensation. The other
executive officers' compensation is weighted toward annual compensation.
The Chairman of the Board and Principal Executive Officer of the Company, Mr.
A. Dano Davis (the "PEO"), for the fiscal year ended June 26, 1996, received a
three percent (3%) increase in base compensation from the prior fiscal year.
Because of his substantial stock ownership, Mr. Davis again chose not to
participate in both the restricted stock and performance unit aspects of the
Program's long-term incentive compensation for the 1995-96 fiscal year. Had he
participated, the grants made in June of 1995 for fiscal year 1995-96 and later
would have been in the amount of approximately $188,478 of value of restricted
stock and a maximum performance unit payment of approximately $183,478. Under
the concept of the Program, the PEO normally would participate in these plans
and if the PEO had participated in fiscal year 1995-96, his compensation would
have approximated that of the Company's President, Mr. James Kufeldt, as shown
in the Summary Compensation Table on page 8. The provisions of the Key Employee
Stock Option Plan do not allow the PEO to participate in that plan.
Both salary increases and annual incentive awards are based in major part on
the Company's financial performances for the fiscal years involved. The
performance targets for annual incentive award cash bonuses for fiscal year
1995-96 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
1995-96, 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 1995. The restricted stock and performance
unit awards and performance goals for the fiscal year 1995-96 were
established by the Compensation Committee upon recommendations of the
Long-Term Officer Compensation Committee. The performance goals for
restricted stock issued in fiscal year 1995-96 focused on improving the
Company's customer image score. The performance goals for performance units
issued in fiscal year 1995-96 focused on increasing identical store sales and
average sales for stores over 35,000 square feet.
Also included in the Company's compensation for its executive officers are
various employee benefits. Generally, the benefits offered to such persons
serve a different purpose than do the other components of compensation. In
general, these benefits provide protection against financial loss that can
result from illness, disability or death. Benefits offered to these employees
are mainly those that are offered to the Company's other employees, with some
variation primarily to promote tax efficiency and replacement of benefit
opportunities lost due to regulatory limits.
In 1993, Congress enacted Section 162(m) of the U. S. Internal Revenue Code of
1986, as amended (the "Code"), effective for tax years beginning in 1994.
Section 162(m) precludes a public corporation from taking a federal income tax
deduction for compensation paid in excess of $1 million per year to a "covered
employee." A "covered employee" under Section 162(m) is the Chief Executive
Officer on the last day of the taxable year and any other officer who is among
the four highest compensated officers (other than the Chief Executive Officer)
as reported in the proxy statement. Generally, this would include the
Company's Chairman of the Board and Principal Executive Officer and the four
other officers named each year in the Summary Compensation Table in the Proxy
Statement.
The $1 million limit on deductibility does not apply to compensation that meets
the requirements for "qualified performance-based compensation" under
regulations adopted under the Code. In order for compensation to qualify as
performance-based the following conditions must be met: (i) the compensation
must be paid solely on account of the attainment of one or more
pre-established, objective performance goals, (ii) the performance goals must
be established in a timely manner by a compensation committee comprised
solely of two or more outside directors, (iii) the material terms of the
performance goals must be disclosed to and approved by the shareholders, and
(iv) the compensation committee must certify in writing prior to payment of the
compensation (other than stock option exercises) that the performance goals and
any material terms were in fact satisfied.
The Compensation Committee determined that the incentive compensation of the
"covered employees" of the Company should be structured to qualify as
"qualified performance-based compensation" so that such compensation can qualify
for full tax deductibility under the Code. As a result, the Compensation
Committee recommended that the material terms of the performance goals of the
Annual Incentive Plan, the Performance Unit Plan and the Restricted Stock Plan
of the Program, and the material terms of the performance goals of the Key
Employee Stock Option Plan, all as set forth in Proposal 2, be approved by the
shareholders.
This report is submitted by the members of the Compensation Committee: Radford
D. Lovett, Chairman; Armando M. Codina; Carleton T. Rider; and Julia B. North.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to April 17, 1996, the Compensation Committee in fiscal year 1995-96
included 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. During that time period, the Chairman was Mr. David F.
Miller. Mr. Miller and his son own controlling interests in PureIce of the
South, Inc. and Quality Food Equipment Distributors. During fiscal year
1995-96, the Company purchased ice and equipment in the amount of $3,427,270
from those companies. No similar relationship existed between the Company
and the members of the Compensation Committee as reconstituted on April 17,
1996. During the most recently completed fiscal year, no executive officer
of the Company served as a director of, or 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 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 26, 1996, 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 26, 1991 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
6/26/91 6/24/92 6/30/93 6/29/94 6/28/95 6/26/96
------- ------- ------- ------- ------- -------
Winn-Dixie $100 $120.26 $153.75 $121.35 $166.74 $211.23
S & P Retail (Food Chains) $100 $90.27 $112.65 $109.61 $133.24 $184.52
S & P 500 Index $100 $113.41 $128.87 $130.68 $164.75 $207.59
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, Giant Food Class A, Great A&P, Kroger and Winn-Dixie.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
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.
The Company is self-insured for purposes of employee group, medical, accident
and sickness insurance, with the Insurance Company providing administrative
services and expenses. During the fiscal year ended June 26, 1996, the Company
paid the Insurance Company $3,201,936 for administrative services, state
premium taxes, and expenses of the group medical and accident plan. The
Company also paid $10,597,197 in net premiums on life insurance policies and
$11,201,365 in interest on policy loans to fund the corporate senior officers
management security plan for 33 officers (including 22 executive officers) and
a similar contributory plan for 578 other eligible key management personnel.
The plans also provide benefits to former participants who have retired and
beneficiaries of deceased participants.
During the fiscal year ended June 26, 1996, the Company purchased ice and
equipment in the amount of $3,427,270 from entities in which Mr. David F.
Miller and his son own a controlling interest.
In the fiscal year ended June 26, 1996, the Company received payments from
D.D.I., Inc., a corporation controlled by the Davis Family, in the aggregate
amount of $159,600 for group insurance, office rentals and related expenses,
and legal services.
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 June 30, 1996, owned directly and indirectly
40,817,609 shares of Common Stock of the Company, is controlled by the Davis
Family. Such shares are included in the Davis Family holdings shown on page 4
hereof.
Subject to certain exceptions, the Agreement prohibits disposition of DDI
shares by a DDI shareholder except with the written consent of DDI and all
other DDI shareholders. If any DDI 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 DDI 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 DDI shares.
DDI shareholders who are parties to the Agreement include Robert D. Davis, A.
Dano Davis, T. Wayne Davis, and Charles P. Stephens, spouses, children,
grandchildren, relatives, in-laws, trusts for the benefit of Davis Family
members, and corporations and other entities controlled by them.
PROPOSAL 2 - APPROVAL OF INCENTIVE COMPENSATION PERFORMANCE GOALS UNDER COMPANY
PLANS
General
To comply with Section 162(m) of the Code, the Company has included this
proposal for shareholder approval of the material terms of the incentive
compensation performance goals of the Annual Incentive Plan, the Performance
Unit Plan, the Restricted Stock Plan and the Key Employee Stock Option Plan.
Section 162(m) precludes a public corporation from taking a federal income tax
deduction for compensation paid in excess of $1 million per year to a "covered
employee." A "covered employee" under Section 162(m) is the Chief Executive
Officer on the last day of the taxable year and any other officer who is among
the four highest compensated officers (other than the Chief Executive Officer)
as reported in the proxy statement. Generally, this would include the
Company's Principal Executive Officer and the four other officers named each
year in the Summary Compensation Table in the Proxy Statement.
The $1 million limit on deductibility does not apply to compensation that meets
the requirements for "qualified performance-based compensation" under
regulations adopted under the Code. In order for compensation to qualify as
performance-based the following conditions must be met: (i) the compensation
must be paid solely on account of the attainment of one or more pre-established,
objective performance goals, (ii) the performance goals must be established in a
timely manner by a compensation committee comprised solely of two or more
outside directors, (iii) the material terms of the performance goals must be
disclosed to and approved by the shareholders, and (iv) the compensation
committee must certify in writing prior to payment of the compensation (other
than stock option exercises) that the performance goals and any material terms
were in fact satisfied.
The Compensation Committee determined that the incentive compensation of the
"covered employees" of the Company should be structured to qualify as "qualified
performance-based compensation" so that such compensation can qualify for full
tax deductibility under the Code. The material terms of the performance goals
of the Annual Incentive Plan, the Performance Unit Plan, the Restricted Stock
Plan and the Key Employee Stock Option Plan, as set forth below, are thus
included in this proposal for shareholder approval.
The Annual Incentive Plan
The Annual Incentive Plan is administered by the Compensation Committee which is
composed of two or more outside directors. Eligible employees include the PEO,
President and other officers of the Company. Award opportunities are expressed
as a percent of salary, the highest of which pertains to the PEO and President
positions. At a target performance result, the PEO and President can receive a
bonus payment of 50% of their present salary, and at a maximum performance
result the PEO and President can receive a bonus payment of 100% of their
present salary. Other eligible employees have defined target award levels at
lower percentages of base salary (i.e., 40%, 30%, 25%, etc.). Because Section
162(m) of the Code requires a stated maximum award either as a dollar amount or
as a percent of the total amount funded, the maximum annual payment to any
individual under this plan is limited to $1 million, which is significantly
greater than any past or anticipated individual award.
The performance criteria under the Annual Incentive Plan for funding purposes
are established at the beginning of each fiscal year based on a business plan,
and they are reviewed and approved by the Compensation Committee. The measures
approved for fiscal year 1996-97 at the corporate level are those of (1) sales
volume and (2) return on sales. The former is expressed as increases in average
store sales and the latter in the form of pretax earnings as a percent of sales.
At the business unit level, either (1) division sales volume and pretax profit
as a percent of sales or (2) sales volume and retail and warehouse gross profits
are used. The measures used may change from year to year based upon the
business plan, but are likely to continue to include both a growth and a profit
goal for the Company, as well as the various business units. In all instances,
they will be reviewed and approved by the Compensation Committee within the
first quarter of each fiscal year.
While eligible employees under the Annual Incentive Plan, other than the PEO,
President, and Executive Vice President have 20-33.3% of their incentive
opportunity based upon an assessment of their individual contribution to the
Company's financial results, the application of any such discretion will not
result in an aggregate incentive expenditure in excess of the amount generated
by the pre-established funding formula. The Compensation Committee shall
certify in writing prior to payment of the compensation, that the performance
goals and any other material terms were in fact satisfied.
The Performance Unit Plan
The Performance Unit Plan is also administered by the Compensation Committee.
Eligible employees include the PEO (although he has elected not to participate
in the past), the President and other officers of the Company. Award
opportunities are expressed as contingent units and the number granted to each
eligible employee is based upon his or her respective level of responsibility
within the Company.
The value of granted contingent units is based upon the attainment of
pre-established performance goals expressed as threshold, target and maximum
levels, which are reviewed and approved by the Compensation Committee within the
first quarter of each three-year performance period. The specific measures
approved for the three-year performance period beginning fiscal year 1996-97
are: (1) improvement in identical store sales, and/or (2) improvement in
average store sales for all stores. The measures used may change from
three-year performance period to three-year performance period based upon the
Company's strategic plan, but are likely to continue to include measures related
to sales growth.
The final dollar value of contingent units granted to any participant under the
Performance Unit Plan can vary from $0 if the threshold performance goals are
not met to $50 per unit at threshold, $100 per unit at target, and a maximum of
$150 per unit if the maximum performance goals are met. The final dollar value
of contingent units will be determined by a standard method of interpolation for
performance results that fall either between: (1) threshold and target or (2)
target and maximum. Based upon the grant award guideline, the maximum cash
award potential to any participant is less than 50% of the participant's salary
at the time the contingent units are granted. Because section 162(m) of the
Code requires that a maximum award amount be established either as a dollar
amount or as a percent of the total amount funded; the maximum payment at the
end of each three-year performance period to any individual is limited to
$500,000, which is significantly greater than any past or anticipated individual
award.
No discretionary adjustments can be made to either: (1) the value of contingent
units, or (2) the number of units granted to any individual during or at the
conclusion of any given three-year performance period. The Compensation
Committee shall certify in writing, prior to payment, that the performance goals
and any other material terms were in fact satisfied.
The Restricted Stock Plan
The Restricted Stock Plan is administered by the Compensation Committee.
Eligible employees include the PEO (although he has elected not to participate
in the past), the President, and other officers. In the past, grants have been
made to approximately 35 employees each year. Thus, eligibility is likely to
remain under 50 employees each year. The maximum award grant to any individual
in any given year is limited to not more than 10,000 shares, which is
significantly greater than any past or anticipated individual award.
Each grant is conditioned upon (1) the fulfillment of a three-year continuing
employment obligation and (2) the fulfillment of a three-year Company
performance obligation that is reviewed and approved by the Compensation
Committee within the first quarter of each three-year performance period. In
the past, the performance obligation has been stated as a threshold return on
equity, a threshold return on capital, an increase in an average customer order
size and/or an improvement in the Company's customer image score as determined
by an independent consultant and approved by the Compensation Committee. It is
anticipated that one or more of these or similar measures will continue to serve
as the basis to determine whether granted restricted shares will vest at the end
of each three-year performance period. The performance obligation for the
three-year performance period beginning fiscal year 1996-97 is based upon
obtaining an increased average customer order size.
Grants are also conditioned by the fact that no discretionary adjustments can be
made to either: (1) the value of the restricted shares or (2) the number of
restricted shares granted to any individual during or at the conclusion of any
given three-year vesting period. The Compensation Committee shall certify in
writing prior to the vesting of such restricted shares, that the performance
goals and any other material terms were in fact satisfied.
The Key Employee Stock Option Plan
The Key Employee Stock Option Plan provides for grants of stock options to
employees who are members of the Executive Committee of the Company, other than
the Chairman of the Board, or who are Division Presidents. The plan is
administered by the Compensation Committee and is limited to the granting of
stock options at no less than the fair market value of a share at its time of
grant. The plan provides for an exercise period as to options granted after
June 1, 1994, of not later than January 15th following the sixth fiscal year
after the grant, but in no event later than January 15, 2011. Exercisability is
conditioned upon the attainment of a minimum return on equity in any given year
(e.g., 50% of the option shares become exercisable whenever the annual Return on
Equity is 20% or more and the remainder can be exercised upon meeting this
threshold for a second consecutive year).
In order to determine the number of option shares to be granted to an
individual, a method of assigning a present value to a Winn-Dixie stock option
is utilized. This then is applied to a targeted grant value as a percent of
salary wherein the position's impact on longer term results is a primary
consideration. The maximum number of shares granted to an individual will not
exceed 50,000 per year, which is substantially more than what has ever been
granted to any individual in the past.
The Board of Directors recommends a vote FOR Proposal 2.
PROPOSAL 3 - AMENDMENT TO THE REVISED WINN-DIXIE STOCK PURCHASE PLAN FOR
EMPLOYEES
The Company has in effect the Revised Winn-Dixie Stock Purchase Plan for
Employees (the "Employee Stock Purchase Plan") under which the Company may grant
options to eligible employees. The exercise price per share, in the case of
each option granted, shall be determined by a committee of the Board of
Directors (the"Committee") and shall not be less than the greater of 85% of the
fair market value of the Company's Common Stock on the date such option is
granted or one dollar. Eligible employees include those employees who (i) have
been employed by the Company or a subsidiary of the Company for at least one
year prior to the date of the grant of such options, (ii) are of legal age to
purchase stock in the state of their residences and (iii) are actively employed
by the Company or a subsidiary of the Company at the date of the grant of such
options (the "Eligible Employees").
At the 1995 Annual Meeting of Shareholders, the shareholders approved an
amendment to the Employee Stock Purchase Plan to increase the total number of
shares available under the Employee Stock Purchase Plan by 1,000,000 shares.
This provided a balance of 1,265,564 shares available for future offerings under
the Employee Stock Purchase Plan. In October 1995, following the annual
meeting, the Company offered options to the Eligible Employees and, as a result
of a very positive response from the Eligible Employees, 1,069,251 shares were
purchased for an aggregate purchase price of $54,531,801. After adjusting for
that offering and the 2-for-1 stock split of the Company's Common Stock on
November 30, 1995, a balance of 392,626 shares remains for future offerings
under the Employee Stock Purchase Plan, which amount is insufficient for future
offerings. Therefore, on April 17, 1996, the Board of Directors approved an
amendment to the Employee Stock Purchase Plan, subject to approval by the
shareholders, to increase the total number of shares available under the
Employee Stock Purchase Plan by 2,000,000 shares. As so amended, the total
number of shares available under the Employee Stock Purchase Plan would be
increased from 34,173,236 to 36,173,236 (adjusted for the stock split), of which
33,780,610 shares previously have been issued, leaving a balance of 2,392,626
shares for future offerings.
Accordingly, the Company's shareholders are being asked to approve the
authorization of an additional 2,000,000 shares of the Company's Common Stock
for issuance under the Employee Stock Purchase Plan and to approve the language
clarifying that in the event the Company's Common Stock shall be split up,
divided or otherwise reclassified into a greater number of shares or any other
class, then the maximum number of shares of common stock available under the
Employee Stock Purchase Plan shall be correspondingly increased. Since under
certain federal tax regulations any change in the aggregate number of shares
that may be issued under the Employee Stock Purchase Plan will be considered to
have created a new plan requiring shareholder approval within 12 months of such
change, the shareholders also are being asked to reapprove and readopt the
Employee Stock Purchase Plan as previously approved and adopted by them, as
further amended by the amendment increasing the number of shares that may be
issued under the Employee Stock Purchase Plan and clarifying that the maximum
number of shares of common stock available under the Employee Stock Purchase
Plan shall be correspondingly increased if the Company's Common Stock is split
up, divided or otherwise reclassified into a greater number of shares. In the
event the Company's shareholders do not adopt the amendment containing the
clarification language and increasing the number of shares that may be issued
under the Employee Stock Purchase Plan, such amendment shall become null and
void, and the Employee Stock Purchase Plan, as in effect prior to the amendment,
shall continue in full force and effect.
Description of Employee Stock Purchase Plan
The following summary of the Employee Stock Purchase Plan, as amended, is
qualified in its entirety by reference to the text of the Employee Stock
Purchase Plan, as amended, which is attached hereto as Exhibit A. The Committee
determines on the first business day of each month whether or not to grant
options for that month and, if options are to be granted, what the option price
per share shall be. If any options are granted for any month, options are
granted to all Eligible Employees. Subject to the share limitations of the
Employee Stock Purchase Plan, each Eligible Employee is granted an option to
purchase up to 6,000 shares of stock less the number of shares previously
purchased by the employee during the calendar year in which such option is
granted. In addition, there are other limitations required by law with respect
to employees to whom options may be granted and as to the number of shares which
may be covered by such options. The options, and the corresponding right to
purchase the Company's Common Stock, expire at the close of business on the last
business day of the month in which the options were granted. Because all
Eligible Employees have the same ability to participate in the Employee Stock
Purchase Plan and the decision to take advantage of that ability is dependent
upon the individual investment decisions of the Eligible Employees, it is not
possible to determine the benefits that the executive officers of the Company
will receive under the Employee Stock Purchase Plan.
Eligible Employees may exercise their rights under the Employee Stock Purchase
Plan by executing a subscription agreement (the "Subscription Agreement") and
(i) tendering the full cash purchase price or (ii) tendering at least $1.00 per
share and executing and delivering a promissory note (the "Promissory Note")
payable to the Company for the balance of the purchase price. Eligible
Employees may purchase up to 50 shares by executing and delivering a
non-interest bearing Promissory Note and, subject to approval by the Committee
in its discretion from time to time at the time of granting options, up to 25
shares by executing and delivering an interest bearing Promissory Note, the
terms of which are determined by the Committee.
The Subscription Agreement provides that any shares purchased pursuant to the
Employee Stock Purchase Plan must first be tendered to the Company before such
shares can be sold. If such tender occurs within two years of the purchase of
the shares, the Company may purchase the shares so tendered for the same price
that the Eligible Employee paid for the shares. If such tender occurs more than
two years after the purchase of the shares, the Company may purchase the shares
so tendered for the market price of such shares. If the Company does not accept
the tender of the shares, the shares may be sold free of any restrictions or
limitations.
The maximum number of shares that may be sold pursuant to the Employee Stock
Purchase Plan, as well as the number of shares that 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 similar
events. Options granted pursuant to the Employee Stock Purchase Plan may not be
sold, pledged, assigned or transferred by their holders. Upon the death of such
holder, the option immediately ceases and terminates.
The Board of Directors has the power, among other things, to add to, amend or
repeal any of the provisions of the Employee Stock Purchase 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 may in any way affect the
rights of the holders of outstanding options to purchase shares of Common Stock
in accordance with the provisions of such options.
Unless authorized or ratified by the shareholders of the Company, no amendment
to the Employee Stock Purchase Plan may become effective that will (i) change
the method of determining the aggregate number of shares available thereunder,
(ii) permit the granting of options to persons other than Eligible Employees,
(iii) change the minimum option price or (iv) eliminate the transfer
restrictions on the options.
Federal Income Tax Consequences
For federal income tax purposes, an employee will not realize income at the date
of grant or date of exercise. If no disposition of such shares is made within
two years of the date of grant or within one year from the date of exercise,
then upon subsequent disposition of the stock, ordinary income will be realized
by the employee to the extent of the lesser of (i) the amount by which the fair
market value at such disposition exceeds the price paid, or (ii) the amount by
which the fair market value on the date of grant exceeds the option price. Any
further gain will be capital gain. No income tax deduction will be allowed the
Company for shares transferred to an employee, provided such shares are held for
the periods described above. If the shares are disposed of within the periods
described above, the employee will recognize ordinary income for the taxable
year of the disposition equal to the excess of the fair market value of the
shares on the date of exercise over the price paid, and the Company will,
generally, be entitled to a deduction equal to the amount of ordinary income
recognized by the employee.
General Information
The net proceeds of sales of Common Stock sold pursuant to the Employee Stock
Purchase Plan will be added to the general funds of the Company. The Company is
unable to state at this time for what purposes such proceeds may be used other
than as working capital.
At June 30, 1996, the Company and its wholly owned subsidiaries had
approximately 126,000 employees of whom approximately 71,309 (including 21
executive officers, 2 of whom are also Directors of the Company) were eligible
to participate under the Employee Stock Purchase Plan.
Following is a tabulation showing, with respect to each grant of options
pursuant to the Employee Stock Purchase Plan since the fiscal year ended June
30, 1993, (i) the number of shares of Common Stock purchased by all employees,
(ii) the aggregate purchase price of the shares so purchased and (iii) the
aggregate market value of the shares so purchased at the date of each such
grant:
Number Aggregate Aggregate
Month of Of Shares Purchase Market
Employee Sale Purchased Price Value
- --------------- ----------- ------------- -------------
October 1994 602,546 $25,909,478 $30,240,277
October 1995 1,069,251 $54,531,801 $63,954,575
Of the shares referred to above, persons who are now executive officers
(including officers who are now also Directors of the Company), purchased 7,470
shares in 1994 at an aggregate exercise price of $321,210 and 6,288 shares in
1995 at an aggregate exercise price of $320,688. Subsequent to the purchases
under the Employee Stock Purchase Plan, on November 30, 1995, the Company's
Common Stock underwent a 2-for-1 stock split.
The closing price of the Company's Common Stock as reported on the New York
Stock Exchange Composite Listing on June 28, 1996, was $35.375 per share. The
market value of the 392,626 shares remaining available for sale under the
Employee Stock Purchase Plan on that date was $13,889,144.
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 of Shareholders 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 27, 1996. 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.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order to be presented at the Company's 1997 Annual Meeting of Shareholders, a
shareholder proposal must be received at the principal office of the Company,
5050 Edgewood Court, Jacksonville, Florida 32254-3699, by May 2, 1997.
MISCELLANEOUS
The Company's audited financial statements and certain other financial
information for its fiscal year ended June 26, 1996, are included as pages F-1
to F-18, inclusive, annexed to this Proxy Statement.
As of the date of this Proxy Statement, Management does not know of any other
matter that 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.
By Order of the Board of Directors
Judith W. Dixon
Secretary
August 30, 1996
EACH SHAREHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY. IN
THE EVENT A SHAREHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF SO
DESIRED, REVOKE THE PROXY AND VOTE HIS OR HER SHARES IN PERSON.
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
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 26, 1996, June 28, 1995 and June 29, 1994 F-5
Consolidated Balance Sheets, June 26, 1996 and June 28, 1995 F-6
Consolidated Statements of Cash Flows, Years ended
June 26, 1996, June 28, 1995 and June 29, 1994 F-7
Consolidated Statements of Shareholders' Equity, Years ended
June 26, 1996, June 28, 1995 and June 29, 1994 F-8
Notes to Consolidated Financial Statements F-9
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
1996 1995 1994 1993<F1> 1992
Dollars in millions except per share data
<S> <C> <C> <C> <C> <C>
Sales
Net sales . . . . . . . . . . $ 12,955 11,788 11,082 10,832 10,337
Percent increase. . . . . . . 9.9 6.4 2.3 4.8 2.6
Average annual sales per store . $ 11.0 10.0 9.6 9.4 8.7
Earnings Summary
Gross profit. . . . . . . . . $ 3,093 2,723 2,534 2,446 2,360
Percent of sales . . . . . . 23.9 23.1 22.9 22.6 22.8
LIFO charge (credit). . . . . $ 10 7 (2) 1 (11)
Operating and administrative expenses. $ 2,803 2,462 2,270 2,197 2,137
Percent of sales . . . . . . 21.6 20.9 20.5 20.3 20.7
Net earnings. .. . . . . . . $ 256 232 216 236 196
Per Share. . . . . . . . . . $ 1.69 1.56 1.45 1.56 1.28
Percent of net earnings to sales. . . 2.0 2.0 2.0 2.2 1.9
Percent of net earnings to average equity. 19.9 20.3 21.2 24.6 21.9
EBITDA . . . . . . . . . . . . $ 656.9 569.3 520.2 522.9 469.9
Dividends
Dividends paid. . . . . . . . $ 134.0 116.5 107.4 100.5 92.0
Percent of net earnings . . . 52.4 50.2 49.7 42.5 46.9
Per share (present rate $0.96) . $ .885 .78 .72 .66 .60
Common Stock (WIN)
Total shares outstanding (000,000). . 151.7 151.1 148.4 150.0 153.8
NYSE-Stock price range
Common - High. . . . . . . . $ 38.38 28.94 33.88 39.88 22.32
Low. . . . . $ 28.06 21.32 21.75 20.82 17.32
Financial Data
Cash flow information:
Net cash provided by operating activities .$ 559.4 416.4 436.3 213.0 338.3
Net cash used in investing activities . . .$ 390.4 381.5 214.7 81.4 216.9
Net cash used in financing activities . . .$ 167.3 35.9 212.4 128.7 109.2
Capital expenditures, net . . $ 362.0 371.6 277.7 194.8 164.5
Depreciation and amortization. . $ 248.3 200.9 157.4 141.1 126.9
Working capital . . . . . . . $ 388.7 414.9 486.2 540.0 539.4
Current ratio . . . . . . . . 1.4 1.4 1.6 1.6 1.7
Total assets. . . . . . . . . $ 2,649 2,472 2,145 2,058 1,966
Obligations under capital leases. . . $ 61 78 85 87 90
Shareholders' equity. . . . . $ 1,342 1,231 1,056 980 941
Book value per share. . . . . $ 8.85 8.14 7.12 6.54 6.12
Stores
In operation at year-end. . . 1,178 1,175 1,159<F2>1,151 1,189
Opened and acquired during year. 61 108 60 40 35
Closed or sold during year. . 58 92 66 78 53
Enlarged or remodeled during year . . 128 86 87 73 65
New/enlarged/remodeled in last five years. . 743 654 535 475 464
Percent to total stores in operation. . . . 63.1 55.7 46.2 41.3 39.0
Year-end retail square footage (000,000) . . 45.7 43.8 40.7 39.0 38.6
Average store size at year-end (000). 38.8 37.3 35.1 33.9 32.4
Other Year-end Data
Associates (000). . . . . . . 126 123 112 105 102
Shareholder accounts (000). . 56.3 44.8 39.5 41.4 42.8
Shareholders per store. . . . 48 38 34 36 36
Taxes
Federal, state and local. . . $ 288 261 261 255 233
Per share . . . . . . . . . . $ 1.90 1.75 1.75 1.68 1.52
<FN>
<F1> 53 Weeks
<F2> Includes 14 stores from Bahamas consolidation
</TABLE>
F-1
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations.
Sales for 1996 were $13.0 billion, compared to $11.8 billion for 1995 and $11.1
billion for 1994. This reflects a 9.9%, 6.4% and 2.3% increase in sales per
year for 1996, 1995 and 1994, respectively. Average weekly store sales
increased 8.4%, 6.8% and 5.0% for each of the last three fiscal years, while
comparable store sales increased 4.4%, 3.0% and 2.0% per year for 1996, 1995 and
1994, respectively. Fourth quarter sales were $3.0 billion, $2.9 billion and
$2.6 billion for 1996, 1995 and 1994, respectively. For the fourth quarter,
average store sales increased 4.5% in 1996, 9.5% in 1995 and 3.6% in 1994.
Comparable store sales for the fourth quarter increased 1.7%, 3.8% and 1.4% in
1996, 1995 and 1994, respectively.
In fiscal year 1996, the Company opened and acquired 61 stores averaging 48,500
square feet, enlarged or remodeled 128 stores and closed 58 stores, averaging
29,400 square feet.
As a percent of sales, gross profit margins were 23.9%, 23.1% and 22.9% in
fiscal 1996, 1995 and 1994, respectively. The increase in gross profit margins
is a result of an improved inventory mix in our larger stores.
Approximately 91% of the Company's inventories are valued under the LIFO
(last-in, first-out) method. The LIFO calculations resulted in a $9.9 million
pre-tax decrease in gross profit in 1996, a pre-tax decrease in gross profit of
$7.3 million in 1995 and a pre-tax increase in gross profit of $2.0 million in
1994.
Operating and administrative expenses, as a percent of sales, were 21.6%, 20.9%
and 20.5% in fiscal 1996, 1995 and 1994, respectively. Our major increases in
operating and administrative expenses are due to a higher payroll percentage in
our larger stores, advertising, insurance premiums, occupancy cost and
depreciation expense.
Cash discounts and other income amounted to $118.0 million, $106.9 million and
$98.1 million in 1996, 1995 and 1994, respectively. The increase in 1996 and
1995 is due to an increase in cash discounts resulting from an increase
in purchases of merchandise for resale and gains from the disposal of capital
assets. Gains (losses) on the sales of securities and other assets amounted to
none for 1996 and 1995 compared to $(3.2) million in 1994. Investment income
amounted to $0.6 million, $0.5 million and $4.0 million in fiscal 1996, 1995 and
1994, respectively.
Interest expense totaled $21.2 million, $14.3 million and $14.3 million in
fiscal 1996, 1995 and 1994, respectively. Interest expense primarily reflects a
computation of interest on capital lease obligations and short-term borrowings.
The 1996 increase in other interest expense is due to an increase in short-term
borrowings.
Earnings before income taxes were $387.3 million, $354.0 million and $348.5
million in fiscal 1996, 1995 and 1994, respectively. The 1996 increase in
pre-tax earnings is primarily a result of an increase in operating income.
The 1995 increase is the result of an increase in gross profit margin from a
better inventory mix and an increase in cash discounts and other income. The
effective income tax rates were 34.0%, 34.4% and 38.0% for fiscal 1996, 1995 and
1994, respectively.
Net earnings amounted to $255.6 million, or $1.69 per share for 1996, $232.2
million, or $1.56 per share for 1995 and $216.1 million, or $1.45 per share for
1994. The LIFO calculations decreased net earnings by $6.0 million,
or $0.04 per share in 1996, decreased net earnings by $4.6 million, or $0.03
per share for 1995 and increased net earnings by $1.1 million, or $0.01 per
share for 1994.
F-2
<PAGE>
Liquidity and Capital Resources.
The Company's financial condition remains sound and strong at year end. Cash
and cash equivalents amounted to $32.2 million, $30.4 million and $31.5 million
at the end of fiscal years 1996, 1995 and 1994, respectively. Cash provided
by operating activities amounted to $559.4 million in 1996, $416.4 million in
1995 and $436.3 million in 1994.
Net capital expenditures totaled $362.0 million, $371.6 million and $277.7 in
fiscal 1996, 1995 and 1994, respectively. These expenditures were for new store
locations, store enlargements and remodelings, and the expansion of warehouse
facilities. Total capital investment in Company retail and support facilities,
including operating leases, is estimated to be $600 million in 1996 and
projected to be $750 million in 1997. The Company has no material construction
or purchase commitments outstanding as of June 26, 1996.
Working capital amounted to $388.7 million and $414.9 million at the end of
fiscal years 1996 and 1995, respectively. Inventories on a FIFO (first-in,
first-out) basis increased $29.4 million in 1996 and $108.0 million in 1995.
The increase is primarily due to the increase in the number of stores and our
store enlargement program, both in 1996 and 1995.
The Company has an authorized $300 million commercial paper program. In support
of this program, or as an independent source of funds, the Company also has $340
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 were no
amounts outstanding against the bank lines of credit at the end of 1996 as
compared to $5.0 million at the end of 1995. There was $110.0 million in
commercial paper outstanding at the end of 1996, compared to $125.0 million in
commercial paper outstanding at the end of 1995. The average interest rate on
the commercial paper outstanding on June 26, 1996 was 5.5% as compared to 6.1%
on June 28, 1995.
Excluding capital lease obligations, the Company had no outstanding long-
term debt as of June 26, 1996 or June 28, 1995.
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 is a party to various proceedings arising under federal, state and
local regulations protecting the environment. Management is of the opinion that
any liability which might result from any such proceedings will not have a
material adverse effect on the Company's consolidated earnings or financial
position.
Impact of Inflation.
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
<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 26, 1996 and June 28, 1995, and the
related consolidated statements of earnings, shareholders' equity, and cash
flows for each of the years in the three-year period ended June 26, 1996. 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 26, 1996 and June 28, 1995, and the results of
their operations and their cash flows for each of the years in the three-year
period ended June 26, 1996, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Certified Public Accountants
Jacksonville, Florida
July 29, 1996
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 Richard P. McCook
Chairman of the Board Financial Vice President
and Principal Executive Officer and Principal Financial Officer
F-4
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended June 26, 1996, June 28, 1995 and June 29, 1994
1996 1995 1994
Amounts in thousands except per share data
Net sales $ 12,955,488 11,787,843 11,082,169
Cost of sales, including warehousing
and delivery expense 9,862,244 9,064,536 8,547,681
Gross profit on sales 3,093,244 2,723,307 2,534,488
Operating and administrative expenses 2,802,712 2,461,883 2,269,803
Operating income 290,532 261,424 264,685
Cash discounts and other income, net 118,038 106,901 98,085
408,570 368,325 362,770
Interest:
Interest on capital lease obligations 8,199 10,086 11,285
Other interest 13,046 4,244 2,986
Total interest 21,245 14,330 14,271
Earnings before income taxes 387,325 353,995 348,499
Income taxes 131,691 121,808 132,382
Net earnings $ 255,634 232,187 216,117
Earnings per share $ 1.69 1.56 1.45
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
CONSOLIDATED BALANCE SHEETS
June 26, 1996 and June 28, 1995
1996 1995
Amounts in thousands
Assets
Current Assets:
Cash and cash equivalents $ 32,208 30,414
Trade and other receivables, less allowance for
doubtful items of $1,860,000 ($1,105,000 in 1995) 158,445 151,912
Merchandise inventories at lower of cost or market
less LIFO reserve of $222,341,000
($212,485,000 in 1995) 1,179,126 1,159,584
Prepaid expenses 131,161 103,135
Total current assets 1,500,940 1,445,045
Investments and other assets:
Cash surrender value of life insurance, net 55,769 41,411
Other assets 70,322 58,873
Total investments and other assets 126,091 100,284
Deferred income taxes 22,732 29,025
Net property, plant and equipment 998,849 897,823
$ 2,648,612 2,472,177
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 599,297 555,551
Short-term borrowings 110,000 130,000
Reserve for insurance claims and self-insurance 61,760 59,373
Accrued wages and salaries 84,691 77,396
Accrued rent 62,237 54,888
Accrued expenses 148,715 130,285
Current obligations under capital leases 2,974 3,298
Income taxes 42,554 19,331
Total current liabilities 1,112,228 1,030,122
Obligations under capital leases 60,853 77,653
Defined benefit plan 34,197 28,328
Reserve for insurance claims and self-insurance 97,209 103,384
Other liabilities 1,829 2,098
Shareholders' equity:
Common stock of $1 par value. Authorized
200,000,000 shares; issued 151,684,943 shares in
1996 and 151,121,974 shares in 1995 151,685 75,561
Retained earnings 1,190,611 1,155,031
Total shareholders' equity 1,342,296 1,230,592
Commitments and contingent liabilities (Note 10)
$ 2,648,612 2,472,177
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended June 26, 1996, June 28, 1995 and June 29, 1994
1996 1995 1994
Amounts in thousands
<S>
Cash flows from operating activities: <C> <C> <C>
Net earnings $ 255,634 232,187 216,117
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 248,287 200,931 157,392
Deferred income taxes (7,698) 10,360 4,414
Defined benefit plan 5,869 5,476 3,398
Reserve for insurance claims and self-insurance (3,788) (3,170) 624
Change in cash from:
Receivables (6,533) 14,101 (9,264)
Merchandise inventories (19,542) (69,900) (17,432)
Prepaid expenses (14,037) (1,392) 1,754
Accounts payable 42,199 23,474 23,616
Income taxes 23,223 (10,456) 11,825
Other current accrued expenses 35,829 14,772 43,830
Net cash provided by operating activities 559,443 416,383 436,274
Cash flows from investing activities:
Purchases of property, plant and equipment, net (361,961) (371,563) (277,657)
Decrease (increase) in investments and other assets (28,413) (9,928) 62,938
Net cash used in investing activities (390,374) (381,491) (214,719)
Cash flows from financing activities:
Increase (decrease) in short-term borrowings (20,000) 120,500 (70,500)
Payment on notes payable - (17,008) -
Payments on capital lease obligations (3,077) (3,111) (3,122)
Purchase of common stock (51,581) (34,896) (39,993)
Proceeds of sales under associates' stock purchase 40,205 15,297 2,871
Dividends paid (134,042) (116,506) (107,384)
Other 1,220 (205) 5,722
Net cash used in financing activities (167,275) (35,929) (212,406)
Increase (decrease) in cash and cash equivalents 1,794 ( 1,037) 9,149
Cash and cash equivalents at the beginning of the year 30,414 31,451 22,302
Cash and cash equivalents at end of the year $ 32,208 30,414 31,451
Supplemental cash flow information:
Interest paid $ 14,569 16,213 15,366
Interest and dividends received $ 8,049 1,510 4,059
Income taxes paid $ 114,572 121,904 115,788
See accompanying notes to consolidated financial statements.
F-7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended June 26, 1996, June 28, 1995 and June 29, 1994
1996 1995 1994
Amounts in thousands
<S> <C> <C> <C>
Common stock:
Beginning of year $ 75,561 74,176 74,956
Add par value of shares issued for associates' stock purchase
plan, acquisition and management incentive plan 2,149 2,044 19
Add par value of common stock issued in connection with
2-for-1 stock split 75,580 - -
Deduct par value of common stock acquired 1,605 659 799
End of year 151,685 75,561 74,176
Retained earnings:
Beginning of year 1,155,031 981,509 905,362
Net earnings 255,634 232,187 216,117
Deduct excess of cost over par value of common stock
acquired 49,976 34,237 39,194
Deduct cash dividends on common stock of $0.885, $0.78
and $0.72 per share in 1996, 1995, and 1994 respectively 134,042 116,506 107,384
Deduct par value of common shares issued in
connection with 2-for-1 stock split 75,580 - -
Add excess of cost over par value of shares issued for
associates' stock purchase plan, acquisition and
management incentive plan 50,172 100,962 3,792
Add (deduct) associates' stock loans, net of payments (14,330) (8,839) 2,871
Other 3,702 (45) (55)
End of year. 1,190,611 1,155,031 981,509
Total shareholders' equity $ 1,342,296 1,230,592 1,055,685
See accompanying notes to consolidated financial statements.
F-8
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies and Other Information.
(a) Fiscal Year: The fiscal year ends on the last Wednesday in June.
Fiscal years ended 1996, 1995 and 1994 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 fourteen states and the Bahama
Islands.
(c) Acquisition: On March 26, 1995, the Company acquired Thriftway,
Inc., a twenty-five store supermarket chain operating in Ohio and
Kentucky in a stock-for-stock transaction which is not reflected in
the statement of cash flows. This acquisition has been accounted for
using the purchase method.
(d) 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.
(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 91% 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
short-term borrowings approximates fair value because of their
short-term maturity. See Note 6(b) for information on interest rate
swap agreements.
(g) Income Taxes: Deferred tax asset s 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.
(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 and $1,000,000 for workers' compensation. Self-insurance
reserves are established for property losses with a maximum annual
aggregate of $5,000,000 and a $100,000 per occurrence deductible
after the aggregate is obtained. The Company is insured for
insurance costs in excess of these limits.
(i) Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
F-9
<PAGE>
(j) 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.
(k) Store Opening and Closing Costs: The costs of opening new stores and
closing of old stores are charged to earnings in the year incurred.
(l) Earnings Per Share: The number of shares used in the calculation for
1996, 1995 and 1994 amounted to 151,577,205, 149,434,006 and
149,288,072, respectively, which is the weighted average number of
shares of common stock outstanding during each year. All share and
per share amounts have been retroactively restated to reflect the
2-for-1 stock split effected on November 10,1995.
(m) Stock-Based Compensation: During fiscal year 1996, the Company adopted
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (FASB Statement No.123), which establishes a
fair value based method of accounting for stock-based compensation
plans. Prior to fiscal year 1996, the Company followed the intrinsic
value method set forth in APB Opinion 25, "Accounting for Stock Issued
to Employees." The adoption of this Standard in 1996 had no material
effect on the Company's financial statements (see Notes 7 and 8).
(n) New Accounting Standard: In March 1995, the Financial Accounting
Standards Board issued Financial Accounting Standard No.121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," which requires impairment losses
to be recorded on long-lived assets used in operations when indicators
of impairment are present and the flows estimated to be generated by
those assets are less than the asset's carrying amount. This
Standard also addresses the accounting for long-lived assets that are
expected to be disposed of. The Company has historically reserved for
losses related to the impairment of long-term assets. The adoption of
this Standard in 1996 had no material effect on the Company's
financial statements.
(o) Reclassification: Loans to associates for the purchase of Company
stock has been reclassified as a reduction of shareholders' equity
rather than a current asset. Certain prior year amounts have been
reclassified to conform with the presentation adopted in 1996.
2. Accounts Receivable.
Accounts receivable at year-end were as follows:
1996 1995
Amounts in thousands
Trade and other receivables $ 78,698 67,183
Construction advances 81,607 85,834
160,305 153,017
Less: Allowance for doubtful items. 1,860 1,105
$ 158,445 151,912
3. Inventories.
At June 26, 1996, inventories valued by the LIFO method would have been
$222,341,000 higher ($212,485,000 higher at June 28, 1995) 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 26, 1996, reported net
earnings would have been $6,022,000 or $0.04 per share higher ($4,625,000
or $0.03 per share higher in 1995 and $1,088,000 or $0.01 per share lower
in 1994).
F-10
<PAGE>
4. Property, Plant and Equipment.
Property, plant and equipment consists of the following:
1996 1995
Amounts in thousands
Land $ 2,459 2,441
Buildings 25,962 25,368
Furniture, fixtures, machinery and equipment 1,915,937 1,735,949
Transportation equipment 117,242 122,322
Improvements to leased premises 397,464 333,460
Construction in progress 49,493 44,349
2,508,557 2,263,889
Less: Accumulated depreciation and amortization 1,553,990 1,425,601
954,567 838,288
Leased property under capital leases, less
accumulated amortization of $37,373,000
($40,779,000 in 1995) 44,282 59,535
Net property, plant and equipment $ 998,849 897,823
The Company had no non-cash additions to leased property for 1996 and 1995 as
compared to $10.3 million for 1994.
5. Income Taxes.
The provision for income taxes consisted of:
Current Deferred Total
Amounts in thousands
1996
Federal $ 117,136 (7,523) 109,613
State 22,251 (173) 22,078
$ 139,387 (7,696) 131,691
1995
Federal $ 89,648 9,326 98,974
State 21,800 1,034 22,834
$ 111,448 10,360 121,808
1994
Federal $ 108,163 (217) 107,946
State 19,805 4,631 24,436
$ 127,968 4,414 132,382
The following reconciles the above provision to the Federal statutory income
tax rate:
1996 1995 1994
Federal statutory income tax rate 35.0 % 35.0 % 35.0 %
State and local income taxes, net of
federal income tax benefits 3.5 4.3 3.8
Other tax credits (0.2) (1.1) (1.1)
Life insurance (3.1) (2.1) (1.1)
Other, net (1.2) (1.7) 1.4
34.0 % 34.4 % 38.0 %
F-11
<PAGE>
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 effective tax rate during the fourth quarter of fiscal 1995 reflects the
final settlement with the Internal Revenue Service of transactions pursuant to
Section 1804(e)(4) of the Tax Reform Act of 1986 whereby certain subsidiaries of
the Company were able to utilize the benefits of the net operating losses of
certain unaffiliated corporations.
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred liabilities at June 26, 1996, June 28,
1995 and June 29, 1994 are presented below:
1996 1995 1994
Amounts in thousands
Deferred tax assets:
Reserve for insurance claims and self-insurance $ 58,501 60,050 61,766
Reserve for vacant store leases 10,319 7,738 11,248
Unearned promotional allowance 7,568 3,642 3,909
Reserve for accrued vacations 9,278 8,827 8,021
State net operating loss carry forwards 6,962 7,174 6,683
Excess of book over tax depreciation 10,026 9,088 9,283
Excess of book over tax rent expense 1,133 923 902
Excess of book over tax retirement expense 10,750 8,046 7,127
Uniform capitalization of inventory 5,181 4,602 4,418
Other, net 25,464 14,824 13,406
Total gross deferred tax assets 145,182 124,914 126,763
Less: Valuation allowance 6,896 6,487 6,325
Net deferred tax assets 138,286 118,427 120,438
Deferred tax liabilities:
Excess of tax over book depreciation (18,514) (16,036) (8,811)
Bahamas subsidiary foreign earnings (11,506) (11,535) (9,375)
Other, net (13,429) (3,717) (4,753)
Total gross deferred tax liabilities (43,449) (31,288) (22,939)
Net deferred tax assets $ 94,837 87,139 97,499
Current deferred income taxes of $72,105,000 and $58,114,000 for 1996 and 1995,
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.
F-12
<PAGE>
6. Financing.
(a) Credit Arrangements: The Company has available a $300.0 million
Commercial Paper Program. As of June 26, 1996, there was $110.0
million outstanding as compared to $125.0 million outstanding on June
28, 1995. The average interest rate on the commercial paper outstanding
on June 26, 1996 was 5.5% as compared to 6.1% on June 28, 1995. The
Company also has short-term lines of credit totaling $340.0 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 26, 1996, there were no amounts outstanding under these bank
lines of credit, compared to $5.0 million outstanding on June 28, 1995.
(b)Interest Rate Swap: The Company has entered into interest rate swap
agreements to reduce the impact of changes in rental payments on retail
locations, distribution facilities and manufacturing facilities that
have a lease term of 25 years and whose primary rent expense fluctuates
with the commercial paper interest rate. At June 26, 1996, the Company
had outstanding four 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 a
7.7% interest rate. The interest rate swap agreements mature on June
30, 1996, 1998, 2002 and 2004. In addition, the Company has entered
into two additional interest rate swap agreements, having a notional
principal amount of $50 million each, that do not become effective until
the termination date of the interest rate swap agreements that mature on
June 30, 1996 and June 30, 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 at June 26, 1996, are below the
7.7% rate of these contracts, the estimated negative value of these
swaps was approximately $7.5 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 not less than the greater of
85% of the fair market value at the date of grant or $1.00. During fiscal
year 1996, 1,069,251 shares of common stock were sold to associates at an
aggregate price of $54,531,801. There are 392,626 shares of the Company's
common stock available for the grant of options under the Plan.
Under FASB Statement No. 123, purchase discounts granted to associates are
recognized as compensation cost over the vesting period. The 1996
compensation cost that has been charged against net income was $2.0 million.
Under APB Opinion 25, no compensation cost was recorded in 1995 or 1994.
8. Stock Options.
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 1,000,000 shares. Under this plan adopted by
the Board of Directors on June 22, 1992, options to acquire 226,000 shares of
common stock were granted to key employees at an exercise price of $21.063
per share. Of the options granted, 113,000 became exercisable on June 30,
1993. The remaining 113,000 became exercisable on June 29, 1994. Options
under this plan expire on December 31, 1998.
F-13
<PAGE>
On June 22, 1994, the Board of Directors 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 2,000,000 shares. This amendment was
approved by shareholders on October 5, 1994. Under this plan, options to
acquire 466,000 shares at an exercise price of $22.438 per share were granted
to key employees. Of the options granted, 233,000 shares became exercisable
on June 28, 1995 and the remaining 233,000 shares are exercisable on June
27, 1996, if earned. These options expire on January 15, 2001. Also, an
additional option to acquire 8,000 shares at $27.938 was granted on June 21,
1995. This option is exercisable on June 27, 1996, if earned, and will
expire on January 15, 2001.
Changes in options under these plans during the years ended June 26, 1996,
June 28, 1995 and June 29, 1994 were as follows:
Number of Option Price
Shares Per Share
Outstanding - June 30, 1993 490,000 $14.250-21.063
Granted 466,000 $22.438
Exercised - -
Canceled - -
Outstanding - June 29, 1994 956,000 $14.250-22.438
Granted 8,000 $27.938
Exercised (58,000) $14.250-21.063
Canceled (30,000) $22.438
Outstanding - June 28, 1995 876,000 $14.250-27.938
Granted - $ -
Exercised (236,000) $14.250-22.438
Canceled (10,000) $22.438
Outstanding - June 26, 1996 630,000 $21.063-27.938
Exercisable - June 26, 1996 389,000 $21.063-22.438
Shares available for additional grant 928,000
Options granted under the Company's Key Employee Stock Option Plan are
exercisable upon the achievement of specified operating results. The
Company's adoption of FASB Statement No. 123 in fiscal 1996 did not
materially impact the Company's financial statements, which historically
have reflected compensation expense under APB Opinion 25.
9. Leases.
(a) Leasing Arrangements: There were 1,432 leases in effect on store
locations and other properties at June 26, 1996. Of these 1,432 leases,
52 store leases and 2 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 twenty-five 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 percentage 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.
F-14
<PAGE>
(b) Leases: The following is an analysis of the leased property under
capital leases by major classes:
Asset balances at
June 26, 1996 June 28, 1995
Amounts in thousands
Store facilities $ 65,933 74,653
Warehouses and manufacturing facilities 15,722 25,661
81,655 100,314
Less: Accumulated amortization 37,373 40,779
$ 44,282 59,535
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 26, 1996.
Capital Operating
Amounts in thousands
Fiscal Year:
1997 $ 11,345 265,851
1998 11,140 258,856
1999 10,731 254,271
2000 10,539 250,010
2001 10,545 243,925
Later years 77,949 2,341,514
Total minimum lease payments 132,249 3,614,427
Less: Amount representing estimated taxes,
maintenance and insurance costs included
in total minimum lease payments 3,707
Net minimum lease payments 128,542
Less: Amount representing interest 64,715
Present value of net minimum lease payments $ 63,827
Rental payments under operating leases including, where applicable, real
estate taxes and other expenses are as follows:
1996 1995 1994
Amounts in thousands
Minimum rentals $ 254,705 218,921 190,830
Contingent rentals 3,320 3,323 3,352
$ 258,025 222,244 194,182
F-15
<PAGE>
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 $62,200,000,
$55,250,000 and $54,225,000 in 1996, 1995 and 1994, 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 140 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 578 qualified associates of the Company. Total
MSP cost charged to operations was $4,942,000, $4,979,000 and $4,557,000
in 1996, 1995 and 1994, respectively. The projected benefit obligation at
June 26, 1996 was approximately $35,146,000. The effective discount rate
used in determining the net periodic MSP cost was 8.0% for 1996, 1995
and 1994.
Life insurance policies, which are not considered as MSP assets for
liability accrual computations, were purchased to fund the MSP payments.
These insurance policies are shown on the balance sheet at their cash
surrender values, net of policy loans aggregating $154,438,000 and
$141,416,000 at June 26, 1996 and June 28, 1995, 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
$459,583,000 at June 26, 1996 and $367,423,000 at June 28, 1995.
(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. In addition, the
Company is a party to various proceedings arising under federal, state or
local regulations protecting the environment. Management is of the
opinion that any liability which might result from any such claim,
lawsuit or proceeding will not have a material adverse effect on the
Company's consolidated earnings or financial position.
11. Related Party Transactions.
The Company is self-insured for purposes of employee group life, medical,
accident and sickness insurance, with American Heritage Life Insurance
Company, a related party, providing administrative services and expenses for
medical and accident claims. American Heritage Life Insurance Company also
financed the development and expansion of certain retail stores. Total
payments aggregating $25,001,000, $13,442,000 and $15,109,000 were made in
1996, 1995 and 1994, respectively.
F-16
<PAGE>
12. Quarterly Results of Operations (Unaudited).
The following is a summary of the unaudited quarterly results of operations
for the years ended June 26, 1996, June 28, 1995 and June 29, 1994:
<TABLE>
<CAPTION>
Quarters Ended
Sept. 20 Jan. 10 April 3 June 26
1996 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,934,958 3,972,563 3,035,323 3,012,644
Gross profit on sales $ 677,559 946,312 742,820 726,553
Net earnings $ 45,877 72,460 63,252 74,045
Earnings per share $ 0.30 0.48 0.42 0.49
Net LIFO charge (credit) $ 3,666 2,444 1,833 (1,921)
Net LIFO charge (credit) per share $ 0.03 0.01 0.01 (0.01)
Dividends per share $ 0.140 0.295 0.225 0.225
Market price range $ 30.50-28.06 37.50-29.69 38.38-33.63 35.63-31.88
</TABLE>
<TABLE>
<CAPTION>
Quarters Ended
Sept. 21 Jan. 11 April 5 June 28
1995 (12 Weeks) (16 Weeks) (12 Weeks) (12 Weeks)
Dollars in thousands except per share data
<S> <C> <C> <C> <C>
Net sales $ 2,590,364 3,537,824 2,775,842 2,883,813
Gross profit on sales $ 590,546 809,912 642,018 680,831
Net earnings $ 40,045 67,472 56,936 67,734
Earnings per share. $ 0.27 0.45 0.38 0.45
Net LIFO charge (credit) $ 1,690 2,253 2,816 (2,134)
Net LIFO charge (credit) per share $ 0.01 0.01 0.02 (0.01)
Dividends per share $ 0.13 0.26 0.195 0.195
Market price range $ 26.82-21.32 27.25-24.50 28.57-25.94 28.94-27.32
</TABLE>
<TABLE>
<CAPTION>
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 $ 0.24 0.42 0.35 0.44
Net LIFO charge (credit) $ 1,690 2,253 1,690 (6,721)
Net LIFO charge (credit) per share $ 0.01 0.01 0.01 (0.04)
Dividends per share $ 0.12 0.24 0.18 0.18
Market price range $ 33.88-28.00 30.19-24.50 29.19-24.13 26.13-21.75
</TABLE>
F-17
<PAGE>
During 1996, 1995 and 1994, 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 1.2% to 0.8%, 1.6% to 0.6% and
1.0% to (0.1)%, respectively.
Fourth Quarter Results of Operations
June 26, 1996 June 28, 1995 June 29, 1994
(12 weeks) (12 weeks) (12 weeks)
Amounts in thousands
Net sales $ 3,012,644 2,883,813 2,585,252
Cost of sales 2,286,091 2,202,982 1,977,224
Gross profit on sales 726,553 680,831 608,028
Operating and administrative expenses 647,429 607,460 522,057
Operating income 79,124 73,371 85,971
Cash discounts and other income, net 30,473 25,749 19,166
Interest expense (1,640) (2,083) (1,411)
Earnings before income taxes 107,957 97,037 103,726
Income taxes 33,912 29,303 39,373
Net earnings $ 74,045 67,734 64,353
The effective tax rate during the fourth quarter of fiscal 1995 reflects the
final settlement with the Internal Revenue Service of transactions pursuant
to Section 1804(e)(4) of the Tax Reform Act of 1986 whereby certain
subsidiaries of the Company were able to utilize the benefits of the net
operating losses of certain unaffiliated corporations.
F-18
<PAGE>
EXHIBIT A
WINN-DIXIE STORES, INC.
REVISED STOCK PURCHASE PLAN FOR EMPLOYEES
ARTICLE I
Designation and Purpose of the Plan
The Plan shall be known as the "Revised Winn-Dixie Stock Purchase Plan for
Employees" (the "Plan"). The purpose of the Plan is to encourage employees of
Winn-Dixie Stores, Inc. (the "Company") and of any "Subsidiary" (a corporation
in which all of the outstanding shares of capital stock of every class shall, at
the time or times in question, be owned by the Company or any other Subsidiary
of the Company) to purchase and own the Common Stock of Winn-Dixie Stores, Inc.,
thereby promoting their increased interest in the Company's affairs, growth and
development.
ARTICLE II
Shares Available for Purchase
Subject to the anti-dilution provisions contained herein, a maximum of
36,173,236 shares of the Company's Common Stock, having a par value of $1.00 per
share, as constituted on November 30, 1995 (the "Stock"), whether presently
authorized and unissued or held in the Company's treasury or hereafter
reacquired by the Company, may be issued and sold upon the exercise of options
granted subsequent to October 2, 1964 pursuant to the Plan ("Options"). Such
36,173,236 shares shall consist of the 34,173,236 shares of the Company's Common
Stock heretofore authorized to be so issued and sold, including shares which
were authorized to be issued and sold upon the exercise of options granted
pursuant to the Company's now terminated Stock Purchase Plan for Employees
(adopted in 1958), as amended (the "1958 Plan"), which were not so issued and
sold, plus an additional 2,000,000 shares.
In the event that the Stock shall be split up, divided or otherwise
reclassified into a greater number of shares of Stock or of any other class of
Common Stock of the Company, the term "Stock" shall thereafter mean the Common
Stock of the Company into which the shares of Stock were so split up, divided or
otherwise reclassified; and the maximum number of shares of stock that may be
issued and sold under the Plan, and the remaining number of shares of Stock
that may thereafter be sold pursuant to the Plan or made subject to Options
granted to any Eligible Employee pursuant to the Plan, shall be correspondingly
increased. In case any dividend payable in shares of Stock is paid to the
holders of outstanding shares of Stock, the remaining number of shares of Stock
which may thereafter be sold pursuant to the Plan, and the remaining number of
shares of Stock which may thereafter be made subject to Options granted to any
Eligible Employee pursuant to the Plan shall be increased by the percentage
which the number of shares of Stock so paid as a dividend bears to the total
number of shares of Stock outstanding immediately prior to the payment of such
dividend; provided, however, that no such increase shall be made with respect to
any dividend aggregating less than 20% of the total number of shares of Stock
outstanding immediately prior to the payment thereof.
ARTICLE III
Eligible Employees
Options may be granted under the Plan only to employees of the Company or of a
Subsidiary, (1) who have an employment date of not less than one year prior to
the date of the offering, (2) who are of legal age to purchase stock in the
state of their residence, and (3) who are actively employed at the date of the
offering. "Actively employed" means on the payroll and not on leave of absence
(including workers' compensation, medical, military or other leaves). Such
employees are herein called"Eligible Employees".
ARTICLE IV
Option Price
The exercise price per share of Stock covered by any Option granted pursuant to
the Plan shall be determined by the Committee referred to in Article V hereof,
but shall be not less than 85% of the fair market value of the Stock at the time
such Option is granted nor less than $1.00.
ARTICLE V
Granting of Options
A committee appointed by the Board of Directors of the Company, consisting of
two or more members of the Board of Directors (the "Committee") shall, by
decision of a majority thereof, determine in its sole and final discretion on
the first business day of each month until such time as all shares of Stock
available for purchase under the Plan have been sold, whether or not to grant
Options for that month and, if Options are to be granted, what the option price
per share shall be.
If any Options are granted for any month, as aforesaid, Options shall be granted
to all employees who are Eligible Employees on the first business day of such
month, upon the following terms and conditions:
1. The Committee shall have the authority to limit the maximum number of shares
to be issued and sold upon the exercise of Options granted for any month to a
number not to exceed the number of shares then authorized for sale pursuant to
the Plan. Each Eligible Employee shall be granted an Option for the purchase of
6,000 shares of Stock less the number of shares previously purchased by such
Eligible Employee pursuant to the Plan during the calendar year in which such
Option is granted; provided, however, that no Eligible Employee shall be granted
an Option if such Employee, immediately after the grant of such Option, would
own, within the meaning of Section 423(b)(3) of the Internal Revenue Code of
1986, as amended (the "Code"), stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of a "parent
corporation" or "subsidiary corporation" of the Company, as defined in Section
425(e) and (f) of the Code; and provided further, that no employee shall be
granted an Option which would permit such employee's rights to purchase shares
of stock of any class of the Company or of a "parent corporation" or of a
"subsidiary corporation" of the Company (as defined above) pursuant to all
employee stock purchase plans of the Company and of any such "parent
corporation" or "subsidiary corporation" to accrue at a rate which would exceed
an aggregate of $25,000 of fair market value of such securities (determined at
the time such Option is granted) in any calendar year.
2. Each Option granted hereunder and each right to purchase Stock pursuant to
its exercise shall cease and terminate at the close of business on the last
business day of the month for which said Option shall have been granted.
ARTICLE VI
Options Not Transferable
No Option granted to an employee to purchase shares of Stock pursuant to the
Plan may be sold, pledged, assigned or transferred in any manner during such
employee's lifetime, and upon the death of such employee said Option shall
immediately cease and terminate.
ARTICLE VII
Amendment, Suspension and Termination of the Plan
The Board of Directors of the Company shall have the power at any time to add
to, amend or repeal any of the provisions of the Plan, to suspend the operation
of the entire Plan or of any provision or provisions thereof for any period or
periods or to terminate the Plan in whole or in part, provided, however, that 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
stock in accordance with the provisions hereof; and provided, further, that any
such addition, amendment or repeal which shall change any of the terms of
Articles II, III, IV, VI or VII hereof or which shall change any of the terms of
Article V hereof except the number of shares of Stock which may be purchased by
any Eligible Employee during any one calendar year shall be subject to approval
by the Stockholders of the Company within twelve months after its adoption or
such addition, amendment or repeal shall become null and void and any provision
so attempted to be changed shall continue in full force and effect.
ARTICLE VIII
Provisions with Respect to Granting of Options
Options shall be granted pursuant to the Plan only in accordance with the
provisions set forth in Article V and this Article VIII of the Plan.
For the purpose of determining whether an employee has been employed by the
Company and/or one or more Subsidiaries for less than one year, there shall be
included in the term of such employee's employment any period of employment by
any person, firm, organization or corporation all of whose outstanding shares of
capital stock of every class and/or all or substantially all of whose operating
assets and/or business shall have been acquired by the Company and/or one or
more of its Subsidiaries prior to the time as of which such determination is
made, and transfer from the employment of the Company to that of a Subsidiary or
vice versa, or from the employment of one Subsidiary to that of another
Subsidiary, shall not constitute a termination or interruption of the continuity
of employment.
If the Committee shall determine to grant Options for any month as provided in
the Plan, such determination, and the exercise price per share of Stock covered
thereby, shall be communicated to all Eligible Employees within a reasonable
time thereafter by posting written notice thereof in a conspicuous place in all
offices, stores, warehouses, plants, garages and other facilities where any
Eligible Employees are employed or by giving written notice in such other manner
as the Committee in its sole discretion shall deem advisable.
No option shall be granted pursuant to the Plan unless a Registration Statement
under the Securities Act of 1933, as amended, with respect to the shares of
Stock covered thereby shall have been filed with the Securities and Exchange
Commission or unless an exemption from registration in accordance with
regulations duly promulgated by said Commission under said Act shall then be
applicable, and no Option granted pursuant to the Plan shall be exercisable, and
no shares of Stock shall be sold or issued upon the exercise of any Option,
unless such a Registration Statement shall be in effect and a prospectus with
respect to such shares, which at the time of such exercise, sale or issue, as
the case may be, meets the requirements of Section 10(a) of said Act, shall then
be available for delivery to Eligible Employees or unless an exemption from
registration in accordance with regulations duly promulgated by said Commission
under said Act shall then be applicable.
ARTICLE IX
Exercise of Options
Subject to the provisions of the last paragraph of Article VIII hereof and to
the conditions set forth in Article X hereof, Eligible Employees shall have the
right to purchase shares of Stock upon exercise of Options in accordance with
any of the following three methods:
1. Any Eligible Employee who holds an Option may exercise said Option during the
month for which it was granted in whole at any one time, or in part from time to
time (provided that each exercise shall be for ten or more shares of stock), by
delivering a duly executed subscription agreement to the Company or its duly
authorized agent or representative, such subscription agreement to be
accompanied by payment in full in cash for such shares at the exercise price per
share therefor.
2. Any Eligible Employee who holds an Option granted after July 11, 1969, may
exercise said Option at any time during the month for which it was granted, to
the extent of a maximum of 50 shares (but subject to the proviso that each such
exercise shall be in increments of 5 shares but not less than 10 shares), by
delivering a duly executed subscription agreement to the Company or its duly
authorized agent or representative, such subscription agreement to be
accompanied by payment in cash in the amount of at least $1.00 per share for
each share purchased and by the Eligible Employee's non-interest bearing
promissory note for the balance of the price of the shares to which such note
relates at the exercise price per share therefor. No Eligible Employee may
purchase more than an aggregate of 50 shares pursuant to Options granted after
July 11, 1969 whether at one time or from time to time, through payment by such
non-interest bearing promissory notes.
3. Subject to approval by the Committee in its discretion from time to time at
the time of granting such Options, any Eligible Employee who holds an Option
granted after October 31, 1978 and who has theretofore purchased the maximum of
50 shares through the delivery of a non-interest bearing promissory note as
provided in paragraph 2 above may exercise said Option at any time during the
month for which it was granted, to the extent of a maximum of 25 shares (but
subject to the proviso that each such exercise shall be for 10, 15, 20 or 25
shares), by delivering a duly executed subscription agreement to the Company or
its duly authorized agent or representative, such subscription agreement to be
accompanied by payment in cash in the amount of at least $1.00 per share for
each share purchased and by the Eligible Employee's promissory note, bearing
interest at the rate determined by the Committee at the time of granting such
Option, for the balance of the price of the shares to which such note relates at
the exercise price per share therefor. No Eligible Employee may purchase more
than an aggregate of 25 shares pursuant to Options granted after October 31,
1978 whether at one time or from time to time, through payment by such interest
bearing promissory notes.
Payment for any shares purchased otherwise than through delivery of promissory
notes as provided in paragraphs 2 and 3 above shall be made in cash as provided
in paragraph 1 above.
Such subscription agreement shall provide, with respect to any shares of Stock
purchased pursuant to the Plan subsequent to January 1, 1988, that any such
shares may be sold by the Eligible Employee who purchased such shares or any
successor in interest in the event of such Eligible Employee's death, only by
means of their tender to the Company. If such tender shall occur during the
period of two years following the purchase of the shares of Stock so purchased,
the Company, if it shall accept such tender, shall pay for such shares the same
price paid to the Company by the Eligible Employee therefor. If such tender
shall occur more than two years after the purchase of the shares of Stock so
purchased, the Company, if it shall accept such tender, shall pay for such
shares the market price of such shares on the date of the receipt by the Company
of their tender to the Company. In such subscription agreement such Eligible
Employee shall agree with the Company that certificates for shares of Stock so
purchased by such Employee may bear the following legend:
"The shares of the Common Stock of Winn-Dixie Stores, Inc. represented by this
certificate are subject to the provisions of Article IX of the Revised Stock
Purchase Plan for Employees, as amended, of Winn-Dixie Stores, Inc. Such shares
may be sold by the holder thereof only by means of their tender to Winn-Dixie
Stores, Inc. for the applicable consideration set forth in such Article IX,
unless the Company shall not accept the tender of such shares, in which case the
shares may be sold by the holder thereof, free of any restrictions or
limitations."
In any case in which payment is made in part by promissory note the certificate
representing the shares of Stock purchased shall be issued in the name of the
Eligible Employee so purchasing the same and shall be endorsed by the Eligible
Employee in blank (or accompanied by a duly executed stock power) and delivered
to and pledged with the Company as security for the note, and a pledge agreement
shall be entered into by such Eligible Employee and the Company. The pledge
agreement shall provide that (i) no certificate for pledged shares of Stock
shall be redelivered to the pledgor until the promissory note (together with all
interest thereon, if any) has been paid in full and (ii) provided that there has
been no default under the terms and provisions of the promissory note, the
Company will not cause the certificate for the pledged shares of Stock to be
transferred out of the name of the pledgor and the pledgor shall have the right
to vote such shares of Stock at all meetings of the stockholders of the Company
and shall receive all cash dividends paid on such shares. The pledge agreement
shall contain such other provisions as the Company may deem advisable.
The principal of the promissory note shall be payable in equal installments
payable weekly or monthly depending upon whether the pledgor is paid on a weekly
or monthly basis, of such amount as may be determined by the payroll department
of the division or office in which the pledgor is employed (but which equal
installments shall, in each case, be payable over a period of no less than three
years), and the pledgor shall give a written authorization to such payroll
department, on such form or forms as may be furnished by the Company,
authorizing the deduction each week or month, as the case may be, during the
term of the note of the amount of such weekly or monthly installment. Interest,
if any, on the unpaid portion of such promissory note shall accrue from the date
thereof at the rate per annum determined by the Committee at the time of
granting the Option to which such promissory note relates. The amount of
accrued interest payable, if any, on each payment date shall be added to the
amount payable on account of principal, and shall be included in the payroll
deduction referred to in the preceding sentence. If the pledgor shall cease to
be employed by the Company and/or its Subsidiaries, the pledgor shall continue
to make the same payments as were made while the pledgor was so employed until
the promissory note shall be paid in full.
In the event of a default in the prompt payment of accrued interest on or any
installment due on the principal of, any promissory note, unless such interest
or installment shall have been paid prior to the expiration of 10 days after
notice of such default to the pledgor, the principal balance, if not already due
and payable, shall become due and payable and the Company shall thereafter be
entitled:
(a) To collect and receive all dividends on the pledged shares; and
(b) To sell or cause to be sold at such price or prices as the Company may deem
best all or any of the pledged shares, without demand of performance or notice
of intention to sell.
The proceeds of any such sale and any monies collected, received or otherwise
realized by the Company from the pledged shares, shall be applied as follows:
(a) To the expenses of such sale or realization and all other expenses of the
Company under the pledge agreement;
(b) To the payment of accrued interest, if any, then due and payable on the
note;
(c) To the payment of the principal of the note; and
(d) Any balance thereafter remaining shall be paid to the pledgor or to
whomsoever may be lawfully entitled to receive the same.
In the event that the balance due from the pledgor at the time of any default
exceeds the net proceeds from such sale, the pledgor shall be and remain liable
for such excess.
No installment of the principal upon any promissory note may be prepaid by the
pledgor at any time, either in whole or in part. Upon payment in full of the
final installment of the principal of the promissory note when due, and not
before, the pledged shares of Stock shall be redelivered to the pledgor and
become the pledgor's sole property free of any pledge or lien created hereby.
The date on which a duly executed subscription agreement shall be received by
the Company or its duly authorized agent or representative, in accordance with
any of the above methods, shall be deemed to be the "Date of Subscription" with
respect to the shares subscribed for, for all purposes of the Plan.
ARTICLE X
Conditions on the Exercise of Options
The exercise of Options shall be subject to the following conditions:
1. Each employee exercising an Option must on each Date of Subscription be an
Eligible Employee.
2. In case there shall not be a sufficient number of shares of Stock available,
either because of the limitations imposed by Article II hereof, or because the
Committee shall have limited the maximum number of shares to be issued and sold
in accordance with the provisions of subparagraph 1 of the second paragraph of
Article V hereof, to issue all of the shares otherwise issuable upon the
exercise of Options, subscriptions pursuant to the exercise of Options shall be
filled in the following order of priority:
(a) before any other subscriptions are filled in whole or in part, all
subscriptions pursuant to the exercise of Options pursuant to Paragraph 2 of
Article IX hereof shall be filled in their entirety; or if insufficient shares
are available to fill all such subscriptions in their entirety, the available
shares shall be prorated among Eligible Employees exercising Options pursuant to
Paragraph 2 of Article IX by applying to the number of shares to which each such
exercise relates the ratio of the aggregate number of shares available to the
aggregate number of all such Options exercised.
(b) after all subscriptions referred to in (a) above shall have been filled, the
Committee shall, in its discretion, fix and determine a number of shares of
Stock (but not in excess of 100 shares) for which subscriptions shall be filled
(i) in whole in the case of each Eligible Employee exercising an Option to
purchase up to the number of shares so fixed and determined, and (ii) to the
extent of the number of shares so fixed and determined in the case of each
Eligible Employee exercising an Option to purchase a number of shares greater
than that so fixed and determined.
(c) after all subscriptions referred to in (a) and (b) above shall have been
filled, the remainder of each subscription for a number of shares greater than
that fixed and determined by the Committee pursuant to (b) above shall be filled
by applying to such greater number of shares the ratio of all shares which
remain available after all subscriptions referred to in (a) and (b) above shall
have been filled to the aggregate number of shares for which subscriptions
remain to be filled upon the exercise of Options pursuant to this clause (c).
ARTICLE XI
Issuance of Certificates
Certificates for shares of Stock purchased by an Eligible Employee upon exercise
of an Option shall be issued and delivered to such Employee as soon as
practicable after the end of the month of such exercise. In the case of those
shares payment for which was made in part by promissory note, said shares shall
be immediately redelivered to the Company and pledged as security for the
promissory note as provided in Article IX hereof.
Certificates for shares of Stock purchased by an Eligible Employee upon exercise
of an Option subsequent to January 1, 1988 shall bear the legend set forth in
Article IX hereof.
ARTICLE XII
Rights of Employees
An Eligible Employee shall not have any rights as a stockholder of the Company
by virtue of any Option until the date of issue of the certificate or
certificates for the shares of Stock purchased by such Eligible Employee
pursuant to its exercise.
ARTICLE XIII
Interpretation of the Plan
Determinations of the Committee as to any question which may arise with respect
to the interpretation or administration of any provisions of the Plan shall,
unless otherwise determined by the Board of Directors of the Company, be final.
The Company may prescribe administrative rules under the Plan.
<PAGE>
FORM OF PROXY
The Directors recommend a vote FOR Proposals 1, 2, 3 and 4.
FOR WITHHELD
1. Election of Directors
For all nominees listed below.
Class III (1999)
Armando M. Codina, Radford D.
Lovett and Julia B. North,
For, except vote withheld from
The following nominee(s):
__________________________________
FOR AGAINST ABSTAIN
2. Approve material terms of
compensation performance
goals.
3. Approve Adoption of Amendment
to the Revised Winn-Dixie Stock
Purchase Plan for Employees.
4. Ratification of KPMG Peat
Marwick LLP as auditors.
SPECIAL ACTION
Discontinue Annual Report Mailing for this account due to other accounts of same
address. ______________________________
SIGNATURE(S)__________________________________ Date _________,1996
Please sign this proxy as name(s) appears above and return it promptly whether
or not you plan to attend the meeting. If signing for a corporation or
partnership or as agent,attorney or fiduciary, indicate the capacity in which
you are signing. If you do attend the meeting and decide to vote by ballot,
such vote will supersede this proxy.
<PAGE>
[LOGO]
Dear Fellow Shareholder:
The 68th Annual Meeting of Shareholders of Winn-Dixie Stores, Inc., will be held
at the headquarters office of the Company at 5050 Edgewood Court, Jacksonville,
Florida, at 9:00 a.m. on Wednesday, October 2, 1996.
The enclosed Notice of Annual Meeting of Shareholders and Proxy Statement
describe the items to be considered and acted upon by the shareholders at the
Meeting.
Whether you can or cannot attend, please sign, date and return your proxy form
as soon as possible so that your shares can be voted at the meeting in
accordance with your instructions. If you attend the meeting, you may choose to
revoke your proxy and vote personally. It is important in either case that your
shares be represented.
Sincerely,
/s/ A. Dano Davis
A. Dano Davis
Chairman and Principal Executive Officer
5050 Edgewood Court - Jacksonville, FL 32254-3699
<PAGE>
WINN-DIXIE STORES, INC.
5050 EDGEWOOD COURT - JACKSONVILLE, FLORIDA 32254-3699
Proxy Solicited on Behalf of the Board of Directors for the Annual Meeting of
Shareholders on October 2, 1996
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 that the undersigned would be entitled to vote if
personally present, at the Annual Meeting of Shareholders of the Company on
October 2, 1996, 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
nominees 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 or any adjournments thereof. 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 the proxies named above may or shall do by virtue
hereof.
Nominees for election as Class III Directors are: Armando M. Codina, Radford D.
Lovett and Julia B. North.
This card also provides voting instructions for shares held in the dividend
reinvestment plan and, if registrations are identical, shares held in the
Winn-Dixie Stores, Inc. Profit Sharing/401(k) Plan, as described in the proxy
statement.
Your vote is important. Please sign and date on the reverse and return promptly
in the enclosed postage-paid envelope or otherwise to Inspectors of Election,
Winn-Dixie Stores, Inc., P.O. Box 8999, Edison, NJ 08818-9999, so that your
shares can be represented at the meeting.
<PAGE>
Corporate Profile
Winn-Dixie Stores, Inc., is the nation's fifth largest retail food chain. As of
June 26, 1996, the Company operated 1,178 supermarkets in 14 states and the
Bahamas. The Company also operated a network of distribution centers,
processing and manufacturing plants and a fleet of trucks, providing a
comprehensive support system.
Company Direction
Winn-Dixie is committed to providing our customers with the best quality,
variety and service, while guarding our position as The Low Price Leader and
creating value for our customers, associates and shareholders.
Toward that end, we are engaged in a program of store openings, enlargements
and remodelings to better serve our current and future customers. We also are
adding a variety of new services to our locations to appeal to the changing
needs and tastes of supermarket shoppers.
Our goal is to be the supermarket of choice in the Sunbelt and we will
aggressively pursue our opportunities to increase our market share within our
operating area.
