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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 16, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________________
Commission File Number 1-3657
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WINN-DIXIE STORES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-0514290
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5050 Edgewood Court, Jacksonville, Florida 32254-3699
(Address of principal executive offices) (Zip Code)
(904) 783-5000
(Registrant's telephone number, including area code)
Unchanged
Former name, former address and former fiscal year,if changed since last report)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No___
As of September 30, 1998, there were 148,587,739 shares outstanding of the
registrant's common stock, $1 par value.
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WINN-DIXIE STORES, INC.
FORM 10-Q
TABLE OF CONTENTS
Part I: Financial Information
Page
Condensed Consolidated Statements of Earnings
(Unaudited), For the 12 Weeks Ended
September 16, 1998 and September 17, 1997 1
Condensed Consolidated Balance Sheets (Unaudited),
September 16, 1998 and June 24, 1998 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 12 Weeks Ended
September 16, 1998 and September 17, 1997 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4-6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
Part II: Other Information
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 12
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Amounts in thousands except per share data
For the 12 Weeks Ended
--------------------------------------
Sept. 16, 1998 Sept. 17, 1997
------------------- ------------------
Net sales $ 3,190,755 3,056,203
Cost of sales 2,349,480 2,233,380
------------- -------------
Gross profit 841,275 822,823
Operating & administrative expenses 835,947 765,976
------------- -------------
Operating income 5,328 56,847
Cash discounts & other income 26,452 26,249
Interest expense (8,122) (7,080)
-------------- -------------
Earnings before income taxes 23,658 76,016
Provision for income taxes 9,108 28,506
-------------- -------------
Net earnings $ 14,550 47,510
============== =============
Basic earnings per share $ 0.10 0.32
============== =============
Diluted earnings per share $ 0.10 0.32
============== =============
Dividends per share $ 0.17 0.17
============== =============
See accompanying notes to Condensed Consolidated Financial Statements.
Page 1
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
ASSETS Sept. 16, 1998 June 24, 1998
---------------- ---------------
Cash and cash equivalents $ 23,092 23,566
Trade and other receivables 176,870 146,166
Merchandise inventories less LIFO reserve of
$216,869 ($212,869 at June 24, 1998) 1,423,424 1,404,917
Prepaid expenses 123,846 161,141
----------- -----------
Total current assets 1,747,232 1,735,790
----------- -----------
Investments and other assets 130,329 140,450
Deferred income taxes 22,242 22,626
Net property, plant and equipment 1,162,527 1,169,848
----------- -----------
Total assets $ 3,062,330 3,068,714
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 593,134 660,539
Short-term borrowings 453,000 420,000
Reserve for insurance claims and self-insurance 69,734 71,779
Accrued wages and salaries 107,753 107,590
Accrued rent 102,263 96,987
Accrued expenses 172,376 135,287
Current obligations under capital leases 2,955 2,908
Income taxes 20,144 12,119
----------- -----------
Total current liabilities 1,521,359 1,507,209
----------- -----------
Obligations under capital leases 47,985 48,580
Defined benefit plan 38,134 37,102
Reserve for insurance claims and self-insurance 93,214 93,514
Other liabilities 12,789 13,426
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Shareholders' equity:
Common stock 148,588 148,531
Retained earnings 1,199,482 1,217,592
Accumulated other comprehensive income 779 2,760
----------- -----------
Total shareholders' equity 1,348,849 1,368,883
----------- -----------
Total liabilities and shareholders' equity $ 3,062,330 3,068,714
=========== ===========
See accompanying notes to Condensed Consolidated Financial Statements.
Page 2
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands
For the 12 Weeks Ended
----------------------------------
FISCAL YEAR-TO-DATE Sept. 16, 1998 Sept. 17, 1997
----------------------------------
Cash flows from operating activities:
Net earnings $ 14,550 47,510
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 78,223 72,737
Deferred income taxes 3,945 4,025
Defined benefit plan 1,032 876
Reserve for insurance claims and self-insurance(2,345) (3,268)
Stock compensation plans 1,178 2,162
Change in cash from:
Receivables (30,704) 6,622
Merchandise inventories (18,507) (41,338)
Prepaid expenses 38,847 17,058
Accounts payable (67,105) (21,761)
Income taxes 4,080 17,502
Other current accrued expenses 42,548 26,131
----------- ----------
Net cash provided by operating activities 65,742 128,256
----------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment, net (70,125) (72,982)
Decrease (increase) in investments and other assets 5,291 (2,749)
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Net cash used in investing activities (64,834) (75,731)
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Cash flows from financing activities:
Increase (decrease) in short-term borrowings 33,000 (4,000)
Payments on capital lease obligations (694) (1,127)
Purchase of common stock (74) (2,809)
Proceeds of sales under associates'
stock purchase plan 1,401 2,460
Dividends paid (25,201) (25,281)
Other (9,814) (12,708)
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Net cash used in financing activities (1,382) (43,465)
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Increase (decrease) in cash and cash equivalents (474) 9,060
Cash and cash equivalents at beginning of year 23,566 14,116
----------- ----------
Cash and cash equivalents at end of period $ 23,092 23,176
=========== ==========
Supplemental cash flow information:
Interest paid $ 2,294 3,644
Interest and dividends received $ 91 247
Income taxes paid $ 1,083 7,016
=========== ==========
See accompanying notes to Condensed Consolidated Financial Statements.
Page 3
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(A) Financial information reflects all adjustments, which, in the opinion
of management, are necessary to reflect the results of operations and
financial position for the quarters shown. These condensed financial
statements should be read in conjunction with the fiscal 1998 Form
10-K Annual Report of the Company. 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.
(B) Merchandise inventories are stated at the lower of cost or market,
approximately 88% of which are valued under the LIFO method.
(C) Results for the quarter reflect a pretax LIFO inventory charge of
$4.0 million in 1999 and $5.0 million in 1998. If the FIFO method had
been used, current quarter net earnings would have been $17.0 million
or $0.11 per diluted share as compared with net earnings of $50.6
million or $0.34 per diluted share in the previous year.
(D) The Company has an authorized $500.0 million Commercial Paper program
and short-term lines of credit totaling $530.0 million. On September
16, 1998, there were $450.0 million in commercial paper and $3.0
million from bank lines of credit outstanding, as compared to $420.0
million in commercial paper and no amounts from bank lines of credit
outstanding on June 24, 1998.
(E) The provision for income taxes reflects management's best estimate of
the effective tax rate expected for the fiscal year. The effective
tax rate for fiscal year 1999 is 38.5% as compared to 37.5% in 1998.
The effective tax rate during fiscal 1998 reflects a change made by
the Health Insurance Portability and Accountability Act of 1996
whereby certain deductions for interest relating to indebtedness with
respect to certain Corporate Owned Life Insurance (COLI) policies are
being phased out over a three-year period.
(F) Earnings Per Share: The Company adopted Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128") during
the second quarter of fiscal 1998. The adoption of this statement did
not materially affect the Company's earnings per share. All prior
period earnings per share amounts have been restated to conform with
the provisions of SFAS 128.
Page 4
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd
The following weighted average number of shares of common stock was
used in the calculation for earnings per share. The diluted weighted
average number of shares includes the net shares that would be issued
upon the exercise of stock options using the treasury stock method.
1999 1998
------ ------
Basic:
Quarter 148,336,991 148,932,346
Diluted:
Quarter 148,677,114 149,133,999
(G) Comprehensive Income: The Company adopted the provisions of Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS 130"), effective June 25, 1998. SFAS 130 relates to
the change in the equity of a business during a reporting period from
transactions of the business. Comprehensive income for the quarters
ended September 16, 1998 and September 17, 1997 was approximately
$12.6 and $46.8 million, respectively. These amounts differ from net
income due to changes in the net unrealized holding gains (losses)
generated from available-for-sale securities.
(H) New Accounting Pronouncements: In June 1997 and June 1998, the
Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards No. 131 "Disclosure about Segments of
an Enterprise and Related Information" ("SFAS 131") and Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), respectively. SFAS
131 supersedes Statement of Financial Accounting Standards No. 14
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
provides for the disclosure of financial information desegregated by
the way management organizes the segments of the enterprise formaking
operating decisions. SFAS 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and hedging activities. The
Company intends to adopt SFAS 131 in the fourth quarter of thisfiscal
year and SFAS 133 in the first quarter of fiscal year 2000. The
Company is still determining how SFAS 131 and SFAS 133 will impact
the financial statements.
Page 5
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd
(I) Reclassification: Certain prior year amounts have been reclassified
to conform to the current year's presentation.
(J) 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 and various
proceedings arising under federal, state or local regulations
protecting the environment.
Among the suits charging violations of certain civil rights laws,
there are actions which purport to be class actions and which allege
sexual harassment, retaliation and/or a pattern and practice of
race-based and gender-based discriminatory treatment of employees and
applicants. The plaintiffs seek, among other relief, certification of
the suits as proper class actions, declaratory judgment that the
Company's practices are unlawful, back pay, front pay, benefits and
other compensatory damages, punitive damages, injunctive relief and
reimbursement of attorneys' fees and costs. The Company is committed
to full compliance with all applicable civil rights laws. Consistent
with this commitment, the Company has firm and long-standing policies
in place prohibiting discrimination and harassment. The Company
denies the allegations of the various complaints and is vigorously
defending the actions.
While the ultimate outcome of litigation cannot be predicted with
certainty, in the opinion of management the ultimate resolution of
these actions will not have a material adverse effect on the
Company's financial condition or results of operations.
Page 6
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This analysis should be read in conjunction with the Condensed Consolidated
Financial Statements.
Results of Operations
Sales for the first quarter totaled $3.2 billion, up $134.6 million, or 4.4%
over the previous year. For the first quarter, average store sales increased
5.3% and identical store sales increased 1.6% from the previous year.
During the quarter, the Company opened 18 new stores averaging 50,700 square
feet, closed 14 older stores averaging 35,300 square feet and enlarged or
remodeled 17 store locations, for a total of 1,172 locations in operation on
September 16, 1998, compared to 1,184 last year. As of September 16, 1998,
retail space totaled 50.1 million square feet, a 2.8% increase over the prior
year. There are 54 new stores and 45 store enlargements or remodels under
construction.
Gross profit increased $18.5 million for the quarter. As a percent to sales,
gross profit for the current quarter was 26.4%, compared to 26.9% in the same
quarter of the previous year. The decrease in gross profit margin is a result
of continued aggressive pricing to build sales.
Operating and administrative expenses increased $70.0 million for the current
quarter. As a percent to sales, operating and administrative expenses for the
current quarter were 26.2%, compared to 25.1% last year. Heavy advertising
spending on our "While You're at the Marketplace" marketing campaign and a
major training program for our associates with the purpose of creating
"Exceptional Customer Service" were the major contributing factors of the
increase in operating and administrative expenses.
Cash discounts and other income totaled $26.5 million for the first quarter,
compared to $26.2 million last year. The increase in cash discounts and other
income is a result of an increase in purchases of product for resale.
Interest expense totaled $8.1 million for the current quarter compared to
$7.1 million for the comparable period last year. The increase in interest
expense for the quarter is related to the increase in short-term borrowings.
Page 7
<PAGE>
Results of Operations, continued
Earnings before income taxes were $23.7 million for the current quarter
compared to $76.0 million in the same quarter of the previous year. The
decrease in pre-tax earnings is primarily a result of aggressive pricing to
build sales and the increase in operating expenses as previously mentioned.
Income taxes have been accrued at an effective rate of 38.5% for the current
year and 37.5% for the previous year. This rate is expected to approximate
the effective rate for the full 1999 fiscal year. The effective tax rate
during fiscal 1998 reflects a change made by the Health Insurance Portability
and Accountability Act of 1996 whereby certain deductions for interest
relating to indebtedness with respect to certain Corporate Owned Life
Insurance (COLI) policies are being phased out over a three-year period.
Net earnings amounted to $14.6 million, or $0.10 per diluted share for the
current quarter compared to $47.5 million or $0.32 per diluted share for the
comparable period last year. The LIFO charge reduced net earnings by $2.4
million, or $0.01 per diluted share for the current quarter compared to $3.1
million or $0.02 per diluted share in the previous year.
Liquidity and Capital Resources
The Company's financial condition remains sound and strong. Cash and cash
equivalents amounted to $23.1 million at September 16, 1998 compared to $23.2
million at September 17, 1997. Net cash provided by operating activities
amounted to $65.7 million for the 12 weeks ending September 16, 1998 compared
to $128.3 million for the comparable period last year. Capital expenditures
totaled $70.1 million compared to $73.0 million for the comparable period
last year. These expenditures were for new store locations, remodeling and
enlargement of store locations and maintenance and expansion of support
facilities. Total capital investment in Company retail and support
facilities, including operating leases, is estimated to be $800 million in
1999. The Company has no material construction or purchase commitments
outstanding as of September 16, 1998.
Working capital amounted to $225.9 million at September 16, 1998, compared to
$228.6 million at June 24, 1998.
The Company has an authorized $500.0 million Commercial Paper program. In
addition, the Company has $530.0 million of short-term lines of credit. These
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 September 16, 1998,
$450.0 million of commercial paper was outstanding as compared to $420.0
million on June 24, 1998. The average interest rate on the commercial paper
outstanding on September 16, 1998 was 5.6% as compared to 5.6% on June 24,
1998. The Company had $3.0 million in short-term borrowings against bank
lines of credit as of September 16, 1998 as compared to none on June 24,
1998. The interest rate on the bank lines of credit on September 16, 1998 was
6.3%.
Page 8
<PAGE>
Liquidity and Capital Resources, continued
Excluding capital leases, the Company had no outstanding long-term debt as of
either September 16, 1998 or June 24, 1998.
The Company's cash flow from operations and available credit facilities are
considered adequate to fund 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
The Company'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.
Year 2000 Compliance
In 1996, the Company created a Year 2000 Project Office to address potential
problems within the Company's operations, which could result from the century
change in the Year 2000. The Project Office was authorized by the Company's
Executive Committee, is staffed primarily with representatives of the
Company's Corporate Information Systems Department, and has access to key
associates in all areas of the Company's operations. The Project Office also
uses outside consultants on an as-needed basis.
To address the Year 2000 issues, the Project Office is identifying all
computer-based systems and applications (including embedded systems) that
might not be Year 2000 compliant; determining what revisions or replacements
would be necessary to achieve compliance and prioritizing and implementing
the revisions or replacements; conducting tests necessary to verify that the
revised systems are operational; and transitioning the compliant systems into
the everyday operations of the Company. Management believes that these
actions are approximately sixty-seven percent (67%) complete. Winn-Dixie
estimates that all critical systems will be compliant with the century change
by June 30, 1999.
Page 9
<PAGE>
2000 Compliance, continued
The Company has budgeted approximately $15.0 million to address the Year 2000
issues, which includes the estimated costs of all modifications, the salaries
of associates and the fees of consultants addressing the issues.
Approximately $10.7 million of this amount had been expended through
September 16, 1998.
As a part of the Year 2000 review, the Company is examining its relationships
with certain key outside vendors and others with whom it has significant
business relationships to determine to the extent practical the degree of
such parties' Year 2000 compliance and to develop strategies for working with
them through the century change. The Company does not have a relationship
with any third-party vendor which is material to the operations of the
Company and, therefore, believes that the failure of any such party to be
Year 2000 compliant would not have a material adverse effect on the Company.
Should the Company or a third party with whom the Company deals have a
systems failure due to the century change, the Company believes that the most
significant impact would likely be the inability to timely deliver inventory
to a group of stores or to electronically process sales to the customer at
store level. While the Company does not expect any such impact to be
material, it is developing contingency plans for alternative methods of
product delivery and transaction processing and estimates that such plans
will be finalized by June 30, 1999.
Cautionary Statement Regarding Forward-Looking Information and Statements
This Form 10-Q contains certain information that constitutes Aforward-looking
statements@ within the meaning of the Private Securities Litigation Reform
Act, which involves risks and uncertainties. Actual results may differ
materially from the results described in the forward-looking statements. When
used in this document, the words, Aestimate,@ Aproject,@ Aintend@ and
Abelieve@ and other similar expressions, as they relate to the Company, are
intended to identify such forward-looking statements. Such statements reflect
the current views of the Company and are subject to certain risks and
uncertainties that include, but are not limited to, growth, competition,
inflation, pricing and margin pressures, law and taxes. Please refer to
discussions of these and other factors in this Form 10-Q and other Company
filings with the Securities and Exchange Commission. The Company disclaims
any intent or obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or otherwise.
Page 10
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1998 Annual Meeting of Shareholders of the Company took
place on October 7, 1998.
(b) Four matters were voted on at the meeting:
1. The election of four (4) Class I Directors for terms
expiring in 2001;
2. Approval of the material terms of the incentive compensation
performance goals under the Company's Annual Incentive Plan
and the Performance-Based Restricted Stock Plan;
3. Approval and ratification of amendments to the Company's Key
Employee Stock Option Plan; and
4. 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 25, 1998.
With respect to the election of Directors, the votes were as follows:
Class I, for terms expiring in 2001 Shares for Shares Withheld
----------------------------------- ---------- ---------------
A. Dano Davis 122,937,799 1,092,479
T. Wayne Davis 122,945,939 1,084,339
Carleton T. Rider 122,909,683 1,120,595
Charles P. Stephens 122,955,946 1,074,332
With respect to approval of the material terms of the incentive
compensation performance goals under the Company's Annual Incentive
Plan and the Performance-Based Restricted Stock Plan; the vote was:
120,928,377 shares for; 1,973,252 shares against; 1,128,649 shares
abstained. There were zero broker non-votes.
With respect to the approval and ratification of amendments to the
Company's Key Employee Stock Option Plan; the vote was: 117,715,912
shares for; 5,188,406 shares against; 1,125,960 shares abstained.
There were zero broker non-votes.
Page 11
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information, continued
With respect to the appointment of KPMG Peat Marwick LLP as auditors
of the Company for the fiscal year commencing June 25, 1998, the vote
was: 123,086,108 shares for; 352,137 shares against; 592,033 shares
abstained. There were zero broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
10.1 Annual Incentive Plan effective June 15, 1998.
10.2 Performance-Based Restricted Stock Plan effective June 15, 1998.
10.3 Key Employee Stock Option Plan dated January 24, 1990, as
subsequently amended by the shareholders, including an amendment
and restatement on October 7, 1998, effective June 15, 1998.
Report on Form 8-K
There were no reports on Form 8-K filed for the quarter ended September 16,
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WINN-DIXIE STORES, INC.
Date: October 14, 1998 RICHARD P. MC COOK
----------------------------
Richard P. McCook
Financial Vice President and
Principal Financial Officer
Date: October 14, 1998 DAVID H. BRAGIN
-----------------------------
David H. Bragin
Corporate Treasurer and
Principal Accounting Officer
Page 12
<PAGE>
EXHIBIT 10.1
WINN-DIXIE STORES, INC.
ANNUAL INCENTIVE PLAN
I. PURPOSE OF THE PLAN
The purpose of the Annual Incentive Plan (the "Plan") is to provide Participants
with financial incentives to exert their maximum efforts on behalf of the
Company. By rewarding Participants with additional cash compensation when
significant financial goals have been achieved, the Company believes that the
Plan will promote increased personal interest in the welfare of the Company by
those primarily responsible for its continued growth and profitability.
II. PLAN LIFE
The Plan will continue in effect until and unless terminated by the Committee or
the Board of Directors (as defined below).
III. DEFINITIONS
A. "Base Compensation" means the fixed portion of total compensation
payable in equal monthly installments at the end of each calendar
month during the fiscal year:
- Exclusive of any amounts paid pursuant to the Plan, the
Performance-Based Restricted Stock Plan, or the Key Employee Stock
Option Plan.
- Inclusive of any amount of Base Compensation that otherwise would
have been paid but that is deferred pursuant to a written agreement
between the Participant and the Company or any plan adopted by the
Company providing for such deferral (such as a 401(k) plan).
B. "Board of Directors" or "Board" means the Board of Directors of the
Company.
C. "Committee" means a committee of at least two persons appointed by the
Board, each of whom shall be an outside director.
D. "Company" means Winn-Dixie Stores, Inc., a Florida corporation.
E. "Disability" shall have the meaning and definition assigned to the
term in the Company's Long-Term Disability Insurance Plan.
F. "Participant" means an officer or other key employee of the Company or
its subsidiaries who, in the judgment of the Committee, is
significantly responsible for or materially contributes to the
management, growth or profitability of the Company or its
subsidiaries.
<PAGE>
G. "Plan Year" means the fiscal year of the Company.
H. "Retirement" shall have the meaning and definition set forth in the
Profit Sharing Retirement Plan of the Company.
IV. ELIGIBILITY AND PARTICIPATION
The Committee shall determine the Participants who shall participate in the
Plan.
V. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE
A. Administration. The Committee shall be responsible for the
administration of the Plan. The Committee will be
authorized to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to provide for conditions
and assurances deemed necessary or advisable to protect the interests
of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent
not contrary to the express provisions of the Plan. The Committee may
request the assistance of the Board in making any determination under
the Plan or in carrying out its duties hereunder. Determinations,
interpretations, or other actions made or taken by the Committee
pursuant to the provisions of the Plan shall be final and binding and
conclusive for all purposes and upon all persons whomsoever.
B. Amendment, Modification and Termination of the Plan. The Board or the
Committee may at any time terminate, and from time to time may amend
or modify the Plan, except that no such termination shall be effective
with respect to the Plan Year in which it occurs.
VI. DETERMINATION OF PERFORMANCE MEASURES AND GOALS
Before or at the beginning of each Plan Year, the Committee shall approve the
criteria and performance goals upon which performance will be measured.
Under normal business conditions, the criteria and performance goals established
will not be altered or revised once they have been approved. However, unusual
conditions may warrant a reexamination of such criteria and performance goals.
Unusual conditions include, but are not limited to, extraordinary gains and
losses, acquisitions or dispositions of significant operating units and other
nonrecurring events. Revision of criteria and performance goals shall be
approved by the Committee.
VII. AWARD OPPORTUNITIES
At the beginning of the Plan Year, each Participant will be assigned a
Threshold, Target, and Superior incentive award opportunity, stated as a percent
of Base Compensation. The Target percent of Base
<PAGE>
Compensation level is the amount that will be paid for exactly achieving the
Participant's goal. Actual awards can range from 0% to 200+% of the target
awards and will be based on how actual performance during the Plan Year compares
to the predetermined performance goals.
Except for the Chairman, President and Executive Vice-President, performance
will be measured on at least two organization levels:
- Company
- Business Unit (Region, Division, Manufacturing or Merchandising Areas)
- Individual Objectives
VIII. PAYMENT OF AWARDS
All awards made under the Plan shall be paid to Participants within 30 days
after the date on which the independent certified public accountants for the
Company have issued their opinion on the Company's financial statements and the
Committee has determined in writing that the performance goals have been met.
IX. CHANGES IN EMPLOYEE STATUS
When a Participant's employment is changed or terminated, voluntarily or
involuntarily, prior to the last day of the Plan Year, for reasons other than
death, Retirement or Disability, the Participant forfeits all rights to awards
under the Plan unless determined otherwise by the Committee. Participants whose
employment is changed or terminated after the end of the Plan Year but prior to
payment of awards are entitled to all awards earned.
Nothing in the Plan shall interfere with or limit in any way the right of the
Company or its subsidiaries to terminate or change any Participant's employment
at any time, nor shall the Plan confer upon any Participant any right to
continue in the employ of the Company or its subsidiaries.
<PAGE>
EXHIBIT 10.2
WINN-DIXIE STORES, INC.
PERFORMANCE-BASED RESTRICTED STOCK PLAN
Winn-Dixie Stores, Inc. (the "Company") herein adopts the Winn-Dixie
Stores, Inc. Performance-Based Restricted Stock Plan (the "Plan") as part of its
Officer Compensation Program. The Plan shall be effective as of June 15, 1998.
I. KEY FEATURES OF THE PLAN
A. Definition of Restricted Stock
"Restricted Stock" consists of actual shares of Company common stock
that cannot be sold, transferred or pledged until the Restricted Period
lapses. The Restriction Period will lapse within 30 days after the date
on which independent certified public accountants have issued their
opinion on the Company's financial statements and the Committee (the
"Committee") appointed by the Board of Directors of the Company (the
"Board") pursuant to Section II has determined in writing that the
performance requirements have been satisfied. While the restrictions
remain, the holder of the shares has the right to vote the shares and
receive dividends.
B. Definition of Restriction Period
"Restriction Period" means the period commencing on the date an award
is granted and ending on such date or upon the achievement of such
requirements as established for each such award by the Committee.
C. Definition of Key Employee
"Key Employee" means an officer or other key employee of the Company or
its subsidiaries who, in the judgment of the Committee, is
significantly responsible for or materially contributes to the
management, growth or profitability of the business of the Company and
its subsidiaries.
D. Shares Subject to the Plan
-- The total number of shares that may be awarded under the Plan
is 2,000,000 shares.
E. Award of Restricted Stock
-- The Committee shall determine Key Employees who shall
participate in the Plan, the shares of stock awarded to each Key
Employee and the terms and
<PAGE>
conditions for shares to be awarded, including, but not limited
to, the Restriction Period, performance period, performance
requirements and any share ownership obligations of a Key
Employee.
-- The amount of stock to be issued in a participant's name each
year will depend upon: (i) a target award level set for such
participant; and (ii) the price of the stock at the time of the
grant.
-- The maximum number of shares of Restricted Stock that may be
granted under an award to any participant during any one of the
Company's fiscal years shall not exceed 10,000 shares.
-- Unless the Committee determines otherwise, the restrictions
will lapse and the stock will belong to a participant free and
clear of any restrictions when the Restriction Period expires, if
and only if, the participant remains in the employ of the Company
or its subsidiaries and in a Key Employee position throughout the
Restriction Period and the preestablished performance
requirements are satisfied.
-- Except as otherwise provided by the Committee, if a
participant leaves the employ of the Company or its subsidiaries
or a participant ceases to be in a Key Employee position prior to
the expiration of the Restriction Period, all shares of
Restricted Stock shall be forfeited.
-- Forfeited shares will be available for grant by the Committee
to other participants.
F. Contingent Cash Payment
-- Each individual awarded a grant of Restricted Stock by the
Committee may also be eligible to receive, at the Committee's
discretion, a contingent cash payment, the value of which shall
equal the grant value (as determined in the sole discretion of the
Committee) of the restricted stock awarded to such individual.
Payment of the contingent cash payment shall be made upon vesting
(i.e., lapsing of restrictions) of the Restricted Stock award to
which the contingent cash payment relates. No contingent cash
payment will be made to an individual if (i) the Restricted Stock
award to which the cash payment relates does not vest, or (ii) the
Restricted Stock award is otherwise forfeited.
G. Anti-Dilution
-- In the event that any change in the outstanding shares of
Stock (including an exchange of the Stock for stock or other
securities of another corporation) occurs by reason of a Stock
dividend or split, recapitalization, merger, consolidation,
combination, exchange of shares or other similar corporate
<PAGE>
changes, the maximum number of shares of stock that may be
awarded under the Plan and the aggregate number of shares of
Stock subject to Restricted Stock grants then outstanding under
the Plan, shall be appropriately adjusted by the Committee whose
determination shall be conclusive; provided, however that
fractional shares shall be rounded to the nearest whole share.
-- In the event of any other change in the Stock, the Committee
shall in its sole discretion determine whether such change
equitably requires a change in the number or type of shares
subject to any outstanding Restricted Stock grant and any
adjustment made by the Committee shall be conclusive.
H. Employment
-- Nothing in this Plan shall interfere with or limit in any way
the right of the Company or its subsidiaries to terminate or
change any participant's employment at any time, nor shall the
Plan confer upon any participant any right to continue in the
employ of the Company or its subsidiaries.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Committee composed of at least
two outside directors appointed from time to time by the Board, having
the duties and authority set forth herein in addition to any other
authority granted by the Board.
B. The Committee shall have the authority to establish the terms and
conditions of all awards including, but not limited to, establishing
the Restricted Period, performance periods, performance requirements,
and any share ownership obligations.
C. The Committee's decisions and determinations under the Plan need not be
uniform and may be made selectively among individuals whether or not
such individuals are similarly situated.
D. The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof, and
its interpretations and constructions thereof and actions taken
thereunder shall be final, conclusive and binding on all persons for
all purposes.
III. AMENDMENT OR TERMINATION
The Board or the Committee may, at any time, amend or terminate the Plan. No
amendments or termination of the Plan shall retroactively impair the rights of
any person with respect to an award.
<PAGE>
EXHIBIT 10.3
WINN-DIXIE STORES, INC.
Key Employee Stock Option Plan
(Effective January 24, 1990)
(Revised June 22, 1992, effective June 1,
1992; June 22, 1994; July 25, 1994; July 27, 1998,
effective June 1, 1998)
ARTICLE I.
Designation and Purpose of Plan
The Plan shall be known as the "Winn-Dixie Key Employee Stock Option
Plan". The purpose of the Plan is to promote in the Company's key employees
additional incentive by inducing and enabling them to become part owners of the
business or to increase their share of its ownership through the exercise of
options granted pursuant to the Plan.
ARTICLE II.
Definitions
The following words and phrases wherever used herein shall, unless the
context otherwise indicates, have the following meanings:
1. "Committee" shall mean a committee of at least two persons appointed
by the Board of Directors of the Company each of whom shall be an outside
director of the Company.
2. "Board" or "Board of Directors" shall mean the Board of Directors of
the Company.
3. "Company" shall mean Winn-Dixie Stores, Inc.
4. "Eligible Employee" shall mean an officer or other key employee of
the Company or its subsidiaries who, in the judgment of the Committee, is
significantly responsible for or materially contributes to the management,
growth or profitability of the business of the Company or its subsidiaries.
5. "Option" shall mean any option granted or held pursuant to the
provisions of the Plan. Options shall be evidenced by forms prescribed by the
Committee.
6. "Optionee" shall mean any person who at the time in question holds
any Option which then remains unexercised in whole or in part and which has not
expired or terminated.
7. "Plan" shall mean this Winn-Dixie Key Employee Stock Option Plan.
<PAGE>
8. "Return on Equity" shall mean the percentage which the net earnings
of the Company for a particular fiscal year bears to the average net shareholder
equity for such fiscal year, in each case as reflected in the financial
statements of the Company for such fiscal year as reported in the Company's
Annual Report to its stockholders.
9. "Stock" shall mean the Company's Common Stock, having a par value of
$1.00 per share, as constituted on June 1, 1998, whether presently authorized
and unissued or held in the Company's treasury, or hereafter reacquired by the
Company. In the event that any change in the outstanding shares of Stock
(including an exchange of the Stock for stock or other securities of another
corporation) occurs by reason of a Stock dividend or split, recapitalization,
merger, consolidation, combination, exchange of shares or other similar
corporate changes, 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 purchased pursuant to the exercise of any Option then
outstanding shall be appropriately adjusted by the Committee, whose
determination shall be conclusive; provided, however that fractional shares
shall be rounded to the nearest whole share. In the event of any other change in
the Stock, the Committee shall in its sole discretion determine whether such
change equitably requires a change in the number or type of shares subject to
any outstanding Option and any adjustment made by the Committee shall be
conclusive.
ARTICLE III.
Shares Available for Purchase
Subject to the anti-dilution provisions contained in the definition of
Stock in Article II hereof, except as provided in Article VII hereof, the
maximum number of shares of Stock which may be sold pursuant to the exercise of
Options shall be 2,000,000. Except as provided in Article VII hereof, at no time
shall there be Options outstanding for the purchase of more than 2,000,000
shares of Stock (subject to said anti-dilution provisions) less such number of
shares as have previously been sold pursuant to the exercise of Options. If an
Option shall for any reason terminate or expire, any shares of Stock covered by
such Option immediately prior to its termination or expiration shall again
become available for sale pursuant to the exercise of other Options granted or
to be granted pursuant to the Plan.
ARTICLE IV.
Granting Expiration and Termination of Options
The Committee shall, by a vote of a majority thereof, have the
exclusive power to grant Options to purchase shares of Stock to Eligible
Employees. Such Options may be granted at any time and from time to time to such
Eligible Employees, for such number of shares as the Committee in its sole
discretion deems advisable, but in no event more than one-half (1/2) of the
maximum number of
<PAGE>
shares authorized under the Plan to any single "Eligible Employee". In
all cases the option price per share shall be the fair market value of the Stock
on the date on which the Option is granted (but not less than $1.00), and such
Option shall be exercisable, subject to the provisions of Article V hereof,
within the option period, at the end of which period it shall expire and become
void to the extent that it then remains unexercised. The option period within
which each Option granted hereunder shall be exercisable shall commence on such
date as the Committee shall determine and shall end on December 31, 1998, as to
Options granted after June 1, 1992 and prior to May 31, 1994; and shall end not
later than January 15th following the sixth full fiscal year after the grant as
to Options granted on May 31, 1994 or thereafter.
Subject to the provisions of Article V hereof, if the Optionee to whom
an Option was originally granted shall cease to be employed by the Company for
any reason other than death he or she may, within the three months next
succeeding such cessation of employment (unless such Option shall sooner
expire), exercise such Option to the extent that he or she was entitled to
exercise it as of the date of such cessation, and at the expiration of such
three months (unless it shall have sooner expires) such Option shall terminate
and become void to the extent that it then remains unexercised. Leaves of
absence may be granted to Optionees who are employees of the Company because of
illness or for such other reasons as the Committee may determine, without being
considered a termination or cessation of employment.
The Plan shall not confer upon any Eligible Employee or any Optionee
any right with respect to continuance of employment by the Company, nor shall it
interfere in any way with his or her right, or the Company's right, to terminate
his or her employment at any time.
In the event of the death, while in the employ of the Company, of an
Optionee to whom an option was originally granted, such Option shall be
exercisable (to the extent provided in Article V hereof) within one year of such
date of death (unless it shall sooner expire), but only (a) by the person or
persons to whom such Option shall pass by such Optionee's will or the laws of
descent and distribution, and (b) if and to the extent that he or she was
entitled to exercise such Option at the date of his or her death. At the end of
such one year period the Option (unless it shall have sooner expired) shall
terminate and become void to the extent that it then remains unexercised.
ARTICLE V.
Exercise of Options
Each Option granted pursuant to the Plan prior to June 1, 1998 shall
become exercisable on and after such date as the Committee shall determine, to
the extent of 50% of the shares of Stock covered thereby at any time after the
end of a fiscal year of the Company for which the Company earned a Return on
Equity of 20% or more, if such Option was outstanding throughout such fiscal
<PAGE>
year. Each such Option shall become exercisable as to the remaining 50%
of the shares of Stock covered thereby at any time after the end of the second
consecutive fiscal year of the Company in each of which two consecutive fiscal
years the Company earned a Return on Equity of 20% or more, if such Option was
outstanding throughout such period of two consecutive years.
Each Option granted pursuant to the Plan on June 1, 1998 and thereafter
shall become exercisable on and after such date as the Committee shall determine
that the Company has earned an average Return on Equity for three consecutive
fiscal years equal to or exceeding a percentage rate established by the
Committee at the time the Option is granted, if such Option was outstanding
throughout such period of three consecutive years.
Subject to the preceding two paragraphs hereof, any Optionee shall have
the right to exercise his or her Option in whole at any time or in part from
time to time (provided that each exercise shall be for 1,000 shares of Stock, as
constituted at the date of such exercise, or any multiple thereof unless such
Option shall be for less than 1,000 shares, in which event such exercise shall
be for the full number of shares represented by such Option) by submitting
written notice thereof to the Company or its duly authorized agent or
representative, on such form or forms as may be provided by the Company,
accompanied by payment in full, in cash, for the shares to be purchased.
ARTICLE VI.
Rights of Optionees
An Optionee 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 pursuant to its exercise.
No Option or any right thereunder of an Optionee to purchase shares of
Stock pursuant to the Plan may be sold, pledged, assigned or transferred
otherwise than by will or the laws of descent and distribution, and such Option
shall be exercisable, during the lifetime of the Optionee, only by the Optionee.
ARTICLE VII.
Effectiveness, Interpretation, Amendment,
Suspension and Termination of the Plan
The effectiveness of this Plan is subject to the condition that it
shall have been approved by the Shareholders of the Company within twelve months
after its adoption. Unless such approval by the Shareholders shall have been
obtained, this Plan and any Option granted pursuant hereto shall be null and
void and without effect.
<PAGE>
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 be final unless otherwise determined by the Board of Directors. The
Committee may require Eligible Employees to meet certain share ownership
obligations to receive grants under the Plan. The Committee may also prescribe
administrative rules under the Plan and may in its discretion appoint an
independent agent to act as Option Agent for Options granted pursuant to the
Plan and may empower such Option Agent to handle any or all administrative
maters with regard to Options granted by the Committee.
Unless shareholder approval otherwise is required by applicable law or
the rules of the New York Stock Exchange, the Committee or the Board of
Directors each shall have the power at any time to add to, amend or repeal any
of the provisions of the Plan (including the power to increase the maximum
number of shares of Stock which may be sold pursuant to the exercise of
Options), 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. 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.
Notwithstanding the foregoing, unless authorized or ratified by the
holders of a majority of the shares of Common Stock of the Company present or
represented at a meeting thereof at which a quorum shall be present, no
amendment to the Plan shall become effective which shall extend the maximum
period within which an Option may be exercisable to any date later than December
31, 1998, as to Options granted after June 1, 1992 but prior to May 31, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> All amounts in thousands except per share data.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> Sep-16-1998
<CASH> 23,092
<SECURITIES> 0
<RECEIVABLES> 176,870
<ALLOWANCES> 0
<INVENTORY> 1,423,424
<CURRENT-ASSETS> 1,747,232
<PP&E> 1,162,527
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,062,330
<CURRENT-LIABILITIES> 1,521,359
<BONDS> 0
0
0
<COMMON> 148,588
<OTHER-SE> 1,199,482
<TOTAL-LIABILITY-AND-EQUITY> 1,348,849
<SALES> 3,190,755
<TOTAL-REVENUES> 3,190,755
<CGS> 2,349,480
<TOTAL-COSTS> 835,947
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 8,122
<INCOME-PRETAX> 23,658
<INCOME-TAX> 9,108
<INCOME-CONTINUING> 14,550
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<NET-INCOME> 14,550
<EPS-PRIMARY> 0.10
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</TABLE>
