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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 January 12, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________________
Commission File Number 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 January 12, 2000 there were 146,160,591 shares outstanding of the
registrant's common stock, $1 par value.
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
Part I: Financial Information
Page
Condensed Consolidated Statements of Earnings
(Unaudited), For the 16 and 28 Weeks Ended
January 12, 2000 and January 6, 1999 1
Condensed Consolidated Balance Sheets (Unaudited),
January 12, 2000 and June 30, 1999 2
Condensed Consolidated Statements of Cash Flows
(Unaudited), For the 28 Weeks Ended
January 12, 2000 and January 6, 1999 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
Part II: Other Information
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Amounts in thousands except per share data
For the 16 Weeks Ended
---------------------------------------
MOST RECENT QUARTER Jan. 12, 2000 Jan. 6, 1999
------------------ -----------------
Net sales $ 4,276,024 4,264,207
Cost of sales 3,133,715 3,108,207
------------------ -----------------
Gross profit 1,142,309 1,156,000
Operating & administrative expenses 1,136,844 1,093,302
------------------ -----------------
Operating income 5,465 62,698
Cash discounts & other income 40,211 33,609
Interest expense (Note H) (26,803) (11,170)
------------------ -----------------
Earnings before income taxes 18,873 85,137
Provision for income taxes (Note H) 37,666 32,778
------------------ -----------------
Net earnings (loss) $ (18,793) 52,359
================== =================
Basic earnings (loss) per share $ (0.13) 0.35
================== =================
Diluted earnings (loss) per share $ (0.13) 0.35
================== =================
Dividends per share $ 0.34 0.34
================== =================
FISCAL YEAR-TO-DATE For the 28 Weeks Ended
---------------------------------------
Jan. 12, 2000 Jan. 6, 1999
------------------ -----------------
Net sales $ 7,438,195 7,454,962
Cost of sales 5,449,239 5,457,687
------------------ -----------------
Gross profit 1,988,956 1,997,275
Operating & administrative expenses 1,966,094 1,929,249
------------------ -----------------
Operating income 22,862 68,026
Cash discounts & other income 65,286 60,061
Interest expense (Note H) (33,390) (19,292)
------------------ -----------------
Earnings before income taxes 54,758 108,795
Provision for income taxes (Note H) 51,482 41,886
------------------ -----------------
Net earnings $ 3,276 66,909
================== =================
Basic earnings per share $ 0.02 0.45
================== =================
Diluted earnings per share $ 0.02 0.45
================== =================
Dividends per share $ 0.51 0.51
================== =================
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 Jan. 12, 2000 June 30, 1999
------------- -------------
Current Assets:
Cash and cash equivalents $ 23,147 24,746
Trade and other receivables 130,337 188,314
Merchandise inventories less LIFO reserve 1,437,695 1,425,098
of $224,274 ($217,274 at June 30, 1999)
Deferred income taxes 117,282 112,869
Prepaid expenses 33,755 46,963
----------- -----------
Total current assets 1,742,216 1,797,990
----------- -----------
Investments and other assets 106,177 128,524
Net property, plant and equipment 1,233,768 1,222,633
----------- -----------
Total assets $ 3,082,161 3,149,147
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 630,348 662,172
Short-term borrowings 385,000 465,000
Reserve for insurance claims and self-insurance 77,691 75,461
Accrued wages and salaries 114,825 108,826
Accrued rent 117,421 99,734
Accrued expenses 222,326 122,641
Current obligations under capital leases 2,708 2,751
Income taxes 32,954 10,739
----------- -----------
Total current liabilities 1,583,273 1,547,324
----------- -----------
Obligations under capital leases 37,158 38,493
Defined benefit plan 43,047 41,234
Reserve for insurance claims and self-insurance 117,830 92,256
Other liabilities 18,575 18,072
Deferred income taxes 19,880 689
----------- -----------
Shareholders' equity:
Common stock 146,161 148,577
Retained earnings 1,116,302 1,259,597
Accumulated other comprehensive income - 3,069
Associates' stock loans (65) (164)
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Total shareholders' equity 1,262,398 1,411,079
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Total liabilities and shareholders' equity $ 3,082,161 3,149,147
=========== ===========
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 28 Weeks Ended
------------------------------------
FISCAL YEAR-TO-DATE Jan. 12, 2000 Jan. 6, 1999
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Net earnings $ 3,276 66,909
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 142,103 164,842
Deferred income taxes 12,856 8,756
Defined benefit plan 1,813 2,167
Reserve for insurance claims
and self-insurance 27,804 (1,443)
Stock compensation plans 1,198 3,136
Change in cash from:
Receivables 57,977 (50,360)
Merchandise inventories (12,597) (57,955)
Prepaid expenses 13,208 24,484
Accounts payable (31,784) (75,370)
Income taxes 22,215 21,804
Other current accrued expenses 123,500 86,417
----------------- ----------------
Net cash provided by
operating activities 361,569 193,387
----------------- ----------------
Cash flows from investing activities:
Purchases of property, plant and
equipment, net (150,981) (192,796)
Decrease in investments and other assets 19,074 5,594
----------------- ----------------
Net cash used in investing activities (131,907) (187,202)
----------------- ----------------
Cash flows from financing activities:
Increase (decrease) in short-term borrowings (80,000) 62,351
Payments on capital lease obligations (1,491) (1,620)
Purchase of common stock (74,559) (128)
Proceeds of sales under associates'
stock purchase plan 99 2,464
Dividends paid (75,340) (75,588)
Other 30 7,150
----------------- ----------------
Net cash used in financing activities (231,261) (5,371)
----------------- ----------------
Increase (decrease) in cash and cash equivalents (1,599) 814
Cash and cash equivalents at beginning of year 24,746 23,566
----------------- ----------------
Cash and cash equivalents at end of period $ 23,147 24,380
================= ================
Supplemental cash flow information:
Interest paid $ 10,971 12,391
Interest and dividends received $ 319 440
Income taxes paid $ 14,148 11,742
================= ================
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) Basis of Presentation: 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 1999 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) Change in Estimated Lives: During the second quarter of fiscal
1999, the Company increased the estimated useful lives used to
compute depreciation for certain assets, principally store
equipment (5 to 8 years) and leaseholds (8 to 15 years). Store
equipment and leaseholds associated with larger, full-service
store formats are expected to have a longer life because of the
types of equipment and the expected timing of store remodels. In
addition, the change results in useful lives more consistent with
the predominant industry practices for these types of assets. The
change has been accounted for as a change in estimate and
resulted in an increase in earnings before income tax of $14.4
million ($8.8 million after tax, or $0.06 per diluted share) for
the 28 weeks ended January 12, 2000.
(C) Impact of Franks and Sliced Luncheon Meat Recall: During the
second quarter of fiscal 1999, the Company voluntarily recalled
certain franks and sliced luncheon meats manufactured by its
wholly-owned subsidiary, Dixie Packers, Inc. As a result of this
recall, sales and profits were negatively impacted. The impact on
earnings was approximately $10.5 million pre-tax ($6.4 million
after tax, or $0.04 per diluted share).
(D) Inventories: Merchandise inventories are stated at the lower of
cost or market, approximately 86% of which are valued under the
LIFO method.
(E) LIFO: Results for the quarter reflect a pre-tax LIFO inventory
charge of $4.0 million in fiscal 2000 and $4.0 million in fiscal
1999. The cumulative current year LIFO charge is $7.0 million, as
compared with $8.0 million in fiscal 1999. If the FIFO method had
been used, current quarter net earnings (loss) would have been
$(16.3) million, or $(0.11) per diluted share, as compared with
net earnings of $54.8 million, or $0.37 per diluted share in the
previous year. The cumulative current year net earnings would
have been $7.6 million, or $0.05 per diluted share, as compared
with $71.8 million, or $0.48 per diluted share in the previous
year. An actual valuation of inventory under the LIFO method can
be made only at the end of each year based on the inventory
levels and costs at that time. Accordingly, interim LIFO
calculations are based on management's estimates of expected
year-end inventory levels and costs. Because these are subjected
to many forces beyond management's control, interim results are
subject to the final year-end LIFO inventory valuations.
Page 4
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd.
(F) Comprehensive Income: Comprehensive income (loss) for the
quarters ended January 12, 2000 and January 6, 1999 was
approximately $(21.9) million and $54.9 million, respectively.
Year-to-date, comprehensive income at January 12, 2000 and
January 6, 1999 was approximately $0.2 million and $67.5 million,
respectively. These amounts differ from net income due to changes
in the net unrealized holding gains (losses) generated from
available-for-sale securities.
(G) Credit Arrangements: On January 4, 2000, the Company increased
its authorized commercial paper program from $500.0 million to
$700.0 million. In support of this program, or as an independent
source of funds, the Company entered into a $700.0 million
revolving credit facility, which is syndicated to a group of 17
banks, with The Chase Manhattan Bank as administrative agent. The
facility was entered into on November 17, 1999 and is renewable
on an annual basis. Outstanding amounts under the credit facility
bear interest at certain floating rates as specified by the
credit facility. The credit facility contains certain financial
and non-financial covenants relating to the Company's operations,
including maintaining certain financial ratios. In addition to
the $700.0 million syndicated credit facility, the Company also
has $65.0 million available in short-term lines of credit. As of
January 12, 2000, the Company had $385.0 million in commercial
paper and no amounts from short-term lines of credit outstanding,
as compared to $300.0 million in commercial paper and $165.0 from
short-term lines of credit outstanding on June 30, 1999.
(H) Income Taxes: 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 years 2000 and
1999 is 38.5%.
The Company reserved $30.4 million for taxes and $17.5 million
for interest ($41.2 million after tax, or $0.28 per diluted
share) after receiving an unfavorable opinion in October 1999 and
a computational decision on January 11, 2000 from the U.S. Tax
Court. The Tax Court upheld the Internal Revenue Service's
position that interest related to loans on broad-based, company
owned life insurance policies in 1993 was not deductible for
income tax purposes. Congress passed legislation phasing out such
deductions over a three-year period in the fall of 1996. The
Company held such policies and deducted interest on outstanding
loans from March 1993 through December 1997. Management disagrees
with the Tax Court's decision and intends to appeal. While the
ultimate outcome of this litigation cannot be predicted with
certainty, in the opinion of management, the ultimate resolution
of this matter will not have any additional material adverse
impact on the Company's financial condition or results of
operations.
Page 5
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd.
(I) Earnings Per Share: 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. Due to the loss reported
for the second quarter of fiscal 2000, dilutive shares for the
second quarter are not included in the calculation of the diluted
weighted average for the quarter and year-to-date of the current
year.
2000 1999
------ ------
Basic:
Quarter 146,456,936 148,285,782
Year-to-Date 147,263,092 148,307,729
Diluted:
Quarter 146,456,936 148,693,682
Year-to-Date 147,405,604 148,686,581
(J) Common Stock: In October 1999, the Board of Directors formalized
the Company's common stock repurchase program. The program
authorizes the repurchase, on the open market or in private
transactions, of up to five million shares of the Company's
outstanding common stock. The Company can use its discretion on
the timing of purchases based on open market conditions and
available funds. To facilitate this program, the Company sold
1,000,000 put warrants, each of which entitles the holder to
purchase one share of common stock at prices between $32.47 and
$34.68. These warrants were exercised in December 1999.
(K) Business Reporting Segments: During fiscal 1999, the Company
adopted Statement of Financial Accounting Standards No. 131,
"Disclosure about Segments of an Enterprise and Related
Information" ("SFAS 131"). SFAS 131 provides for the disclosure
of financial information disaggregated by the way management
organizes the segments of the enterprise for making operating
decisions. Based on the information monitored by the Company's
operating decision-makers to manage the business, the Company has
identified that its operations were within one reportable
segment. Accordingly, financial information on industry segments
is omitted because, apart from the principal business of
operating retail self-service food stores, the Company has no
other industry segments. All sales of the Company are to
customers within the United States and the Bahama Islands. All
assets of the Company are located within the United States and
the Bahama Islands. Sales and assets related to and located in
the Bahama Islands represent less than 1% of the Company's total
sales and assets.
Page 6
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WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd.
(L) New Accounting Pronouncements: In June 1998, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). 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 133 in the first quarter of fiscal year 2001. The
Company is still determining how SFAS 133 will impact the
financial statements.
(M) Sale of Business: In November 1999, the Company agreed to sell
substantially all of the assets of its wholly-owned subsidiary,
Winn-Dixie Texas, Inc., to The Kroger Co. for cash. The assets
consist of 69 stores in Texas, 5 stores in Oklahoma and the
distribution center and a dairy plant in Fort Worth. Completion
of the sale is subject to receipt of governmental approvals and
the satisfaction of other customary conditions.
(N) 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 that 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 7
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) cont'd.
(N) Litigation, continued:
In July 1999, the Company, without admitting any wrongdoing,
reached a settlement with the named plaintiffs in a
discrimination class action lawsuit filed on behalf of certain
female and African-American present and former associates. The
settlement has been approved by the U. S. District Court in
Jacksonville, Florida, and the process of implementation will
begin upon receipt of signed authorization from the Court. The
settlement amount is approximately $33.0 million, which the
Company will pay from accruals over the next seven years. In the
opinion of management, the settlement will not have a material
impact on the Company's financial condition or results of
operations.
See note (H) "Income Taxes" with respect to certain litigation
pending before the U.S. Tax Court.
Page 8
<PAGE>
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 second quarter of fiscal 2000 were $4.3 billion, up $11.8
million, or 0.3%, compared with the same quarter last year. Year-to-date,
sales were $7.4 billion, a $16.8 million decrease, or 0.2%, under the prior
year. Identical store sales decreased 2.2% for the quarter and decreased
2.9% year-to-date. Comparable store sales, which include replacement
stores, decreased 1.1% for the quarter and decreased 1.8% year-to-date.
Average store sales decreased 0.4% for the quarter and decreased 1.0%
year-to-date. The increase in sales for the second quarter reflects an
increase in promotional activities and additional pharmacies opened during
the quarter.
For the 28 weeks ended January 12, 2000, the Company opened and/or acquired
21 new stores, averaging 53,000 square feet, closed 24 older stores,
averaging 38,000 square feet and enlarged or remodeled 24 store locations,
for a total of 1,185 locations in operation on January 12, 2000, compared
to 1,179 last year. As of January 12, 2000, retail space totaled 52.4
million square feet, a 2.9% increase over the prior year. There are 22 new
stores and 15 store enlargements or remodels under construction.
Gross profit decreased $13.7 million for the quarter and $8.3 million
year-to-date. As a percent to sales, gross profit for the current quarter
was 26.7%, compared to 27.1% in the same quarter of the previous year.
Year-to-date, gross profit as a percent to sales was 26.7% in the current
year, compared to 26.8% in the previous year. The decrease in the gross
profit margins reflects an increase in promotional activity during the
second quarter. During the second quarter of fiscal 1999, the Company
voluntarily recalled certain franks and sliced luncheon meats manufactured
by its wholly-owned subsidiary, Dixie Packers, Inc. As a result of this
recall, the previous year operating margins were negatively impacted by
approximately $10.5 million.
Operating and administrative expenses increased $43.5 million for the
current quarter and $36.8 million year-to-date. As a percent to sales,
operating and administrative expenses for the current quarter were 26.6%,
compared to 25.6% last year. Year-to-date, operating and administrative
expenses, as a percent to sales, were 26.4% for the current year and 25.9%
for the previous year. The increase for the quarter, as well as
year-to-date, is primarily due to an increase in payroll and occupancy
costs relating to new and enlarged stores and an increase in the number of
pharmacies. During the second quarter of fiscal 1999, the Company increased
the estimated useful lives used to compute depreciation for certain assets,
principally store equipment (5 to 8 years) and leaseholds (8 to 15 years).
Store equipment and leaseholds associated with larger, full-service store
formats are expected to have a longer life because of the types of
equipment
Page 9
<PAGE>
Results of Operations, continued
and the expected timing of store remodels. In addition, the change resulted
in useful lives more consistent with the predominant industry practices for
these types of assets. The change has been accounted for as a change in
estimate and resulted in a reduction in operating and administrative
expenses of $14.4 million for the 28 weeks ended January 12, 2000.
Cash discounts and other income totaled $40.2 million for the second
quarter, compared to $33.6 million last year. Year-to-date, cash discounts
and other income totaled $65.3 million, compared to $60.1 million last
year. Investment income for the current quarter totaled $5.4 million,
compared to $0.1 million last year. Year-to-date, investment income totaled
$5.6 million for the current year, compared to $0.1 million in the previous
year. The increase in investment income reflects a $5.2 million gain
generated from the sale of available-for-sale securities.
Interest expense totaled $26.8 million for the current quarter, compared to
$11.2 million for the comparable period last year. Year-to-date, interest
expense totaled $33.4 million for the current year, compared to $19.3
million in the previous year. The increase in interest expense for the
quarter reflects a $17.5 million interest reserve booked after receiving an
unfavorable opinion from the U.S. Tax Court in October 1999. See note (H)
"Income Tax."
Earnings before income taxes were $18.9 million for the current quarter,
compared to $85.1 million for the comparable period last year.
Year-to-date, earnings before income taxes were $54.8 million and $108.8
million in the previous year. The decrease in pre-tax earnings is primarily
a result of a decrease in the gross profit margin and an increase in the
operating and administrative expenses as previously mentioned. Income taxes
have been accrued at an effective rate of 38.5% for the current and
previous years. This rate is expected to approximate the effective rate for
the full 2000 fiscal year. The Company reserved $30.4 million for taxes
after receiving an unfavorable opinion in October 1999 and a computational
decision on January 11, 2000 from the U.S. Tax Court. See note (H) "Income
Tax."
Net earnings (loss) amounted to $(18.8) million, or $(0.13) per diluted
share for the current quarter, compared to $52.4 million, or $0.35 per
diluted share, for the comparable period last year. Year-to-date, net
earnings amounted to $3.3 million, or $0.02 per diluted share, compared to
$66.9 million, or $0.45 per diluted share, for the previous year. The LIFO
charge reduced net earnings by $2.4 million, or $0.02 per diluted share,
for the current quarter, compared to $2.4 million, or $0.02 per diluted
share, in the previous year. Year-to-date, the LIFO charge reduced net
earnings by $4.3 million, or $0.03 per diluted share, compared to $4.9
million, or $0.03 per diluted share, in the previous year.
Page 10
<PAGE>
Liquidity and Capital Resources
The Company's financial condition remains sound and strong. Cash and cash
equivalents amounted to $23.1 million at January 12, 2000, compared to
$24.4 million at January 6, 1999. Net cash provided by operating activities
amounted to $361.6 million for the 28 weeks ending January 12, 2000,
compared to $193.4 million for the comparable period last year. Capital
expenditures totaled $151.0 million, compared to $192.8 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 $500.0 million in 2000. The Company has no material construction or
purchase commitments outstanding as of January 12, 2000.
Working capital amounted to $158.9 million at January 12, 2000, compared to
$250.7 million at June 30, 1999.
On January 4, 2000, the Company increased its authorized commercial paper
program from $500.0 million to $700.0 million. In support of this program,
or as an independent source of funds, the Company entered into a $700.0
million revolving credit facility, which is syndicated to a group of 17
banks, with The Chase Manhattan Bank as administrative agent. The facility
was entered into on November 17, 1999 and is renewable on an annual basis.
Outstanding amounts under the credit facility bear interest at certain
floating rates as specified by the credit facility. The credit facility
contains certain financial and non-financial covenants relating to the
Company's operations, including maintaining certain financial ratios. In
addition to the $700.0 million syndicated credit facility, the Company also
has $65.0 million available in short-term lines of credit. As of January
12, 2000, the Company had $385.0 million in commercial paper outstanding,
as compared to $300.0 million in commercial paper outstanding on June 30,
1999. The average interest rate on the commercial paper outstanding on
January 12, 2000 was 6.4%, as compared to 5.4% on June 30, 1999. The
Company had no amounts in borrowings against short-term lines of credit as
of January 12, 2000, as compared to $165.0 million on June 30, 1999. The
interest rate on the short-term lines of credit on June 30, 1999 was 5.5%.
Excluding capital leases, the Company had no outstanding long-term debt as
of either January 12, 2000 or June 30, 1999.
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 that might result from any such proceedings will
not have a material adverse effect on the Company's consolidated earnings
or financial position.
Page 11
<PAGE>
Impact of Inflation
The Company's primary costs, inventory and labor, increase with inflation.
Recovery of these costs must 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 that could result from
the century change in the Year 2000. The Project Office identified the
critical computer-based systems and applications (including embedded
systems) that might not be Year 2000 compliant. Before the end of 1999, the
Project Office implemented revisions or replacements necessary to make
these critical systems compliant, conducted tests of the revised systems
and transitioned the compliant systems into the everyday operations of the
Company. The Company also examined its relationships with certain key
outside vendors and others with whom it had significant business
relationships regarding their Year 2000 compliance and developed strategies
for working with them through the century change.
The Company expenditure was approximately $27.1 million to address the Year
2000 issues, which included the estimated costs of all systems
modifications, the salaries of associates and the fees of consultants
addressing the issues. As of the date of this filing, the Company has not
experienced any material adverse effects on the operations or results of
operations of the Company relating to the Year 2000 issues associated with
its systems or those of third parties with whom it has significant business
relationships.
Cautionary Statement Regarding Forward-Looking Information and Statements
This Form 10-Q contains certain information that constitutes
"forward-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,
"estimate," "project," "intend" and "believe" 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 12
<PAGE>
WINN-DIXIE STORES, INC. AND SUBSIDIARIES
Part II - Other Information
Item 5. Other Information
Charles H. McKellar, Executive Vice President and Director of the
Company, retired after 43 years of service. D. Michael Byrum,
former Director of Accounting Systems and Procedures with 27
years of service, was elected Corporate Controller and Chief
Accounting Officer. Ted M. Moon, Vice President of the Company
and former Director of Deli/Bakery Merchandising, was appointed
Director of Special Merchandising Projects. W. Robert Baxley,
formerly Vice President, Deli, Bakery and Manufacturing at
Smith's Food & Drug Centers, was elected Vice President and
Director of Deli/Bakery Merchandising.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.2 Restated By-laws of the Registrant as amended through
January 26, 2000.
(b) Report on Form 8-K
During the second quarter ended January 12, 2000, the
Company filed a current report on Form 8-K, dated November
23, 1999, reporting the election of Allen R. Rowland as
President, Chief Executive Officer, and a Director of the
Company, effective November 23, 1999.
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: February 1, 2000 RICHARD P. MCCOOK
------------------------------
Richard P. McCook
Financial Vice President and
Chief Financial Officer
Date: February 1, 2000 D. MICHAEL BYRUM
-----------------------------
D. Michael Byrum
Corporate Controller and
Chief Accounting Officer
Page 13
<PAGE>
Exhibit 3.2
BY-LAWS
OF
WINN-DIXIE STORES, INC.
* * * * * * * * * * * *
ARTICLE I.
Offices
Section 1. Registered Office and Principal Office: The registered office and
principal office of the Corporation shall be located at 5050 Edgewood
Court, in the City of Jacksonville, County of Duval, and State of Florida.
Section 2. Registered Agent: The registered agent of the Corporation shall be
located at the registered office of the Corporation in the State of Florida
and shall be designated by resolution of the Board of Directors.
Section 3. Other Offices: The Corporation may have other offices, either within
or outside of the State of Florida, at such place or places as the Board of
Directors may from time to time designate or the business of the
Corporation may require.
ARTICLE II.
Seal
Section 1. The corporate seal shall be circular in form and shall have inscribed
thereon the name of the Corporation, the year of its incorporation (1928)
and the words "Corporate Seal, Florida."
Section 2. The Secretary shall be the custodian of the Seal and shall affix the
same to all writings and documents requiring the Seal of the Company as
authorized by the Board of Directors.
ARTICLE III.
Meetings of Stockholders
Section 1. Place: All meetings of the stockholders shall be held at the
principal office of the Corporation in the City of Jacksonville, County of
Duval and State of Florida, or at such other place, within or without the
State of Florida, as may be designated by the Board of Directors and stated
in the notice of meeting.
Section 2. Annual Meeting: The annual meeting of stockholders shall be held at
9:00 o'clock A.M. on the first Wednesday in October each year, or at such
other time and on such other date as the Board of Directors may determine,
for the election of Directors and for the transaction of such other
business as may be brought before the meeting.
Any general business pertaining to the affairs of the Corporation may be
transacted at the Annual Meeting without special notice.
The directors elected at the annual meeting shall be elected by plurality
vote of the stockholders entitled to vote and present or duly represented
at such meeting.
Section 3. Special Meetings: Special meetings of the stockholders may be called
at any time by the Chairman of the Board, or by the Board of Directors. The
Corporation shall hold a special meeting of stockholders if the holders of
not less than thirty percent (30%) of all votes entitled to vote on any
issue proposed to be considered at the proposed special meeting shall sign,
date and deliver to the Corporation's Secretary one or more written demands
for the meeting describing the purpose or purposes for which it is to be
held. Only business within the purpose or purposes described in the special
meeting notice may be conducted at a special stockholders' meeting.
Section 4. Notice: The Secretary shall notify stockholders of the date, time and
place of the Annual Meeting no fewer than ten (10) or more than sixty (60)
days before the meeting date, and shall send each holder of record of stock
entitled to vote at such meeting, at the stockholder's address as it
appears in the Corporation's current record of stockholders, a notice of
such annual meeting, by mail postage prepaid, stating the time and place of
such meeting. A similar notice shall be given by the Secretary of all
special meetings, and in addition to the requirements for notice of annual
meeting, the notice for special meetings shall include a description of the
purpose or purposes for which the meeting is called; PROVIDED, HOWEVER,
that any action taken at an annual or special meeting of stockholders may
be taken without a meeting, without prior notice, and without a vote, if
(i) the action is taken by the holders of outstanding stock entitled to
vote thereon having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting, (ii) the approving
stockholders shall sign a written consent authorizing such action and
deliver such consent to the Corporation as provided in Section 607.0704,
Florida Business Corporation Act, and (iii) within ten (10) days after such
authorization by written consent is obtained, notice shall be given those
stockholders who have not consented in writing pursuant to provisions of
Section 607.0704(3) of the Florida Business Corporation Act.
Section 5. Waiver of Notice: A stockholder may waive notice of any meeting
before or after the date and time stated in the notice. The waiver must be
in writing, signed by the stockholder and delivered to the Corporation for
inclusion in the minutes or filing with the corporate records. A
stockholder's attendance, in person or by proxy, at a meeting (i) waives
objection to lack of notice or defective notice of the meeting, unless the
stockholder at the beginning of the meeting objects to holding the meeting
or transacting business at the meeting, or (ii) waives objection to
consideration of a particular matter at the meeting that is not within the
purpose or purposes described in the meeting notice, unless the stockholder
objects to considering the matter when it is presented.
Section 6. Quorum: The holders of a majority of the issued and outstanding
shares of Capital Stock of the Company entitled to vote at the meeting,
represented in person or by proxy, shall constitute a quorum for the
transaction of business at all meetings of the stockholders except as may
be otherwise provided by law or the Articles of Incorporation. The holders
of a majority of shares represented, and who would be entitled to vote at a
meeting if a quorum were present, where a quorum is not present, may
adjourn such meeting from time to time.
Once a share is represented for any purpose at the meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is set for the
adjourned meeting.
Section 7. Proxies: Any stockholder entitled to vote at any meeting of
stockholders may be represented and vote at such meeting by proxy duly
authorized by written appointment signed by such stockholder or duly
authorized attorney-in-fact. An executed telegram or cablegram appearing to
have been transmitted by such person, or a photographic, photostatic or
equivalent reproduction of an appointment form, is a sufficient appointment
form. An appointment by proxy is valid for 11 months from date of execution
unless a longer date is expressly provided in the appointment form.
Section 8. Voting of Shares: Unless otherwise provided in the Articles of
Incorporation or these By-Laws, each outstanding share entitled to vote
shall be entitled to one vote on each matter submitted to a vote at a
meeting of stockholders. If a quorum exists, action on a matter is approved
if the votes cast by the stockholders entitled to vote favoring the action
exceeds the votes cast opposing the action, unless a greater vote is
required by Law, the Articles of Incorporation or these By-Laws. If prior
to the voting for the election of directors, demand shall be made by or on
behalf of any shares entitled to vote at such meeting, the election of
directors shall be by ballot.
Section 9. Voting Lists: The Secretary shall prepare, at least ten (10) days
before each meeting of stockholders, an alphabetical list of the
stockholders entitled to notice of the meeting, which shall show the
address of and the number of shares held by each stockholder. Any
stockholder, his attorney or agent, on written demand as provided by
statute may inspect the list during regular business hours at his expense
during the period it is available for inspection. The list shall be open
for examination of any stockholder, or his attorney or agent, at the place
where the meeting is to be held for ten (10) days prior to such meeting and
shall be kept available for inspection by any stockholder at any time
during the meeting.
ARTICLE IV.
Directors
Section 1. Powers: All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Classification of Board and Number of Directors: The Board of
Directors shall consist of ten (10) members who shall be divided into three
classes, with the number of directors in each class to be equal. At each
annual meeting of stockholders, one class of directors shall be elected for
three-year terms and until their successors shall be duly elected and shall
qualify. The number of directors shall be fixed by the Board of Directors.
Section 3. Term of Office: Any Director may be elected to serve for one or more
years (not exceeding three years) and until his successor is chosen and
qualified.
Section 4. Vacancies: Any vacancies in the Board of Directors shall be filled in
accordance with the provisions of Article NINTH of the Articles of
Incorporation. An increase in the number of Directors shall create
vacancies for the purpose of this section.
Section 5. Removal: The Board of Directors or any individual director may be
removed from office only in accordance with the provisions of Article NINTH
of the Articles of Incorporation.
Section 6. Meetings: The Board of Directors shall meet immediately after the
Annual Meeting of Stockholders at the same place as the Annual Meeting of
Stockholders.
Regular meetings of the Board of Directors may be held without notice of
the date, time, place or purpose of the meeting.
Special meetings of the Board of Directors may be called by the Chairman of
the Board or by the President, and shall be called by the Chairman of the
Board or Secretary upon the written request of not less than three (3)
Directors. Notice of special meetings may be communicated in person or by
mail to each Director at least three (3) days in advance, or by telephone,
telegraph, teletype or other form of electronic communication to each
Director at least twenty-four (24) hours in advance of the meeting. Such
notice shall specify the time and place of meeting.
Any or all Directors may participate in a regular or special meeting by, or
conduct the meeting through the use of, any means of communication by which
all Directors participating may simultaneously hear each other during the
meeting.
Section 7. Place of Meetings: Until otherwise prescribed, the regular meetings
of the Board of Directors shall be held in the City of Jacksonville,
Florida, at the office of the Company or at such other place as may be
agreed upon by the Board. The Board of Directors may hold Special Meetings
and may have one or more offices and may keep the books of the Corporation
(except such books as are required by Law to be kept within the State of
Florida) either within or outside of the State of Florida, at such place or
places as it may from time to time determine.
Section 8. Quorum: Unless the Articles of Incorporation or these By-Laws provide
otherwise, a majority of the number of Directors fixed by the By-Laws shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors.
ARTICLE V.
Officers
Section 1. Election: The officers of the Corporation shall be a Chairman of the
Board of Directors, a President, an Executive Vice President, a Secretary,
a Treasurer and a Controller. The Corporation may also have, at the
discretion of the Board of Directors, one or more Vice Chairmen of the
Board of Directors, one or more Senior Vice Presidents, one or more Vice
Presidents, one or more Assistant Secretaries and one or more Assistant
Treasurers as may from time to time be elected by the Board of Directors.
None of these officers, except the President, the Chairman of the Board of
Directors, and the Vice Chairman or Vice Chairmen of the Board of
Directors, need be a Director. The officers shall be elected by the Board
of Directors at the first meeting of the Board after each Annual Meeting.
Section 2. Hold Two Offices: Any officer may hold more than one office, except
that the Chairman of the Board of Directors and the President shall not be
the Secretary or an Assistant Secretary of the Corporation; but no officer
shall execute, acknowledge or verify any instrument in more than one
capacity, if such instrument be required by law or these By-Laws to be
executed, acknowledged or verified by any two or more officers.
Section 3. Term of Office: The officers shall hold office for one year and until
their successors are chosen and qualify. Any vacancy occurring among the
officers shall be filled by the Board of Directors, but the person so
elected to fill the vacancy shall hold office only until the first meeting
of the Board of Directors after the next Annual Meeting of stockholders and
until his successor is chosen and qualifies.
Section 4. Agents: The Board of Directors may appoint such agents as it may deem
necessary, who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 5. Removal: Any officer chosen by the Board of Directors may be removed
with or without cause at any time by the affirmative vote of a majority of
the Board of Directors.
Section 6. Voting Shares in Other Corporations: The Corporation may vote any and
all shares held by it in any other corporation by such officer, agent or
proxy as the Board of Directors may appoint, or, in default of any such
appointment, by the Chairman of the Board or the President.
ARTICLE VI.
The Chairman and Vice Chairmen
of the Board of Directors
Section 1. The Chairman of the Board of Directors:
(a) Duties and Responsibilities: The Chairman of the Board of Directors,
if present, shall preside at all meetings of the Board of Directors,
and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The Chairman shall perform such
other duties as may be prescribed by the Board of Directors.
(b) Annual Reports: The Chairman of the Board of Directors or the
President shall preside at all meetings of the stockholders and one of
them shall, annually, make a full report to the stockholders, at the
annual meeting of stockholders, of the condition of the Corporation,
its resources, liabilities, loans, profits and general financial
condition, which report shall be for the fiscal year ending on the
last Wednesday in the month of June of each year before such annual
meeting.
Section 2. Vice Chairmen of the Board of Directors:
- ---------------------------------------------------
The Vice Chairman of the Board of Directors, if there shall be such an
officer, shall, if present, preside at all meetings of the Board of Directors at
which the Chairman of the Board of Directors shall not be present. If two Vice
Chairmen of the Board of Directors are elected, the one designated by the Board
of Directors shall preside at meetings of the Board of Directors in the absence
of the Chairman. The Vice Chairman or Vice Chairmen of the Board of Directors
shall have such other powers and perform such other duties as may be prescribed
for them by the Board of Directors or the By-Laws.
ARTICLE VII.
The President
The President shall be the Chief Executive Officer of the Corporation, and
shall have general supervision, direction and control of the business and
affairs of the Corporation. The President shall sign or countersign all bonds,
mortgages, certificates, contracts or other instruments on behalf of the
Corporation as authorized by the Board of Directors, and shall perform any and
all other duties as are incident to the Office of the President or as may be
required by the Board of Directors. The President shall have general supervision
and direction of all the other officers, employees and agents of the
Corporation. The President shall, if present, preside at all meetings of the
Board of Directors at which the Chairman and all of the Vice Chairmen of the
Board of Directors shall not be present.
ARTICLE VIII.
The Executive Vice President,
Senior Vice Presidents and Vice Presidents
Section 1. The Executive Vice President shall, in the absence or disability of
the President, perform the duties and exercise the powers of the President,
and shall perform such other duties as the Board of Directors shall
prescribe.
Section 2. Senior Vice Presidents, if any such officers shall have been elected,
shall in the absence of the President and Executive Vice President, in the
order designated by the President or, failing such designation, by the
Board of Directors, perform the duties and exercise the powers of the
President. Senior Vice Presidents and other Vice Presidents shall have such
powers and perform such duties as may be assigned to them from time to time
by the Board of Directors or the President.
ARTICLE IX.
The Treasurer
Section 1. Custody of Funds: The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
Corporation in such depositaries as may be designated by the Board of
Directors.
Section 2. Disbursements: The Treasurer shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements. He shall render to the President and
Directors at the regular meetings of the Board of Directors, or whenever
they may request it, an account of all his transactions as Treasurer and of
the financial condition of the Corporation.
Section 3. Bond: The Treasurer shall give the Corporation a bond if required by
the Board of Directors, in a sum and with one or more sureties satisfactory
to the Board of Directors, for the faithful performance of the duties of
his office and for the restoration to the Corporation in case of his death,
resignation, retirement or removal from office of all books, papers,
vouchers, securities, moneys and other property of whatever kind in his
possession or under his control belonging to the Corporation.
Article X.
The Controller
Section 1. Chief Accounting Officer: The Controller shall be the Chief
Accounting Officer of the Corporation.
Section 2. Accounting Supervision: The Controller shall have general supervision
of and responsibility for all accounting matters affecting the Corporation
and shall perform such other duties as may be prescribed by the Board of
Directors or by the President.
ARTICLE XI.
The Secretary
The Secretary shall attend all meetings of the Board of Directors and all
meetings of the stockholders and shall record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give or cause to be given
notice of all meetings of the stockholders and of the Board of Directors, and he
shall perform such other duties as may be prescribed by the Board of Directors,
Chairman of the Board or the President.
ARTICLE XII.
Assistant Treasurers and Assistant Secretaries
The Assistant Treasurers and Assistant Secretaries shall perform such
duties as may be prescribed hereunder, or by the Board of Directors, or by the
President.
In the absence or disability of the Treasurer, his duties may be performed
by any Assistant Treasurer.
In the absence or disability of the Secretary, his duties may be
performed by any Assistant Secretary.
ARTICLE XIII.
Duties of Officers may be Delegated
In case of the absence or disability of any officer of the Corporation, or
for any other reason that the Board of Directors may deem sufficient, the Board
of Directors, by majority vote, may delegate for the time being the powers or
duties or any of them of such officer to any other officer or to any Director or
to any other person.
ARTICLE XIV.
Indemnification
Section 1. The Corporation shall indemnify to the fullest extent permitted by
Law any person who was or is a party to any proceeding (other than an
action by, or in the right of, the Corporation) by reason of the fact that
he is or was a director, officer, employee, or agent of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against liability incurred in connection with
such proceeding, including any appeal thereof, if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any proceeding by judgment, order, settlement, or
conviction or upon a plea of nolo contendere or its equivalent shall not,
of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the Corporation or, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
Section 2. The Corporation shall indemnify to the fullest extent permitted by
Law any person, who was or is a party to any proceeding by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee, or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses and amounts
paid in settlement not exceeding, in the judgment of the Board of
Directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense
or settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made
under this subsection in respect of any claim, issue, or matter as to which
such person shall have been adjudged to be liable unless, and only to the
extent that, the court in which such proceeding was brought, or any other
court of competent jurisdiction, shall determine upon application that,
despite the adjudication of liability but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnity for
such expenses which such court shall deem proper.
Section 3. To the extent that a director, officer, employee, or agent of the
Corporation has been successful on the merits or otherwise in defense of
any proceeding referred to in Section 1 or Section 2, or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.
Section 4. Any indemnification under Section 1 or Section 2, unless pursuant to
a determination by a court, shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section
1 or Section 2. Such determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by majority
vote of a committee duly designated by the Board of Directors (in
which directors who are parties may participate) consisting solely of
two or more directors not at the time parties to the proceeding;
(c) By independent legal counsel:
(i) Selected by the Board of Directors prescribed in paragraph (a) or
the committee prescribed in paragraph (b); or
(ii) If a quorum of the directors cannot be obtained for paragraph (a)
and the committee cannot be designated under paragraph (b),
selected by majority vote of the full Board of Directors (in
which directors who are parties may participate); or
(d) By the stockholders by a majority vote of a quorum consisting of
stockholders who were not parties to such proceeding or, if no such
quorum is obtainable, by a majority vote of stockholders who were not
parties to such proceeding.
Section 5. Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel, persons specified by
Section 4(c) shall evaluate the reasonableness of expenses and may
authorize indemnification.
Section 6. Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the Corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if he is ultimately
found not to be entitled to indemnification by the Corporation pursuant to
this section. Expenses incurred by other employees and agents may be paid
in advance upon such terms or conditions that the Board of Directors deems
appropriate.
Section 7. The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and the Corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office. However, indemnification or advancement of expenses shall not
be made to or on behalf of any director, officer, employee, or agent if a
judgment or other final adjudication establishes that his actions, or
omissions to act, were material to the cause of action so adjudicated and
constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the liability
provisions of Section 607.0834, Florida Statutes, are applicable; or
(d) Willful misconduct or a conscious disregard for the best interests of
the Corporation in a proceeding by or in the right of the Corporation
to procure a judgment in its favor or in a proceeding by or in the
right of a stockholder.
Section 8. Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized
or ratified.
Section 9. For purposes of this Article, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent)) absorbed in a consolidation
or merger, so that any person who is or was a director, officer, employee,
or agent of a constituent corporation, or is or was serving at the request
of a constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, is in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
Section 10. For purposes of this Article:
(a) The term "other enterprises" includes employee benefit plans;
(b) The term "expenses" includes counsel fees, including those for appeal;
(c) The term "liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and
reasonably incurred with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or completed
action, suit, or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the Corporation
that imposes duties on such persons, including duties relating to an
employee benefit plan and its participants or beneficiaries; and
(g) The term "not opposed to the best interest of the Corporation"
describes the actions of a person who acts in good faith and in a
manner he reasonably believes to be in the best interests of the
participants and beneficiaries of an employee benefit plan.
Section 11. The Corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or
agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
any liability asserted against him and incurred by him in any such capacity
or arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the provisions
of this Article.
Section 12. The foregoing indemnifications shall not be deemed exclusive of any
other rights to which any director, officer, employee or agent may be
entitled under any by-law, agreement, vote of stockholders or as a matter
of law or otherwise.
ARTICLE XV.
Certificates of Stock
The Certificates of stock of the Corporation shall be numbered and shall be
entered in the books of the Corporation as they are issued. They shall exhibit
the holder's name and certify the number of shares owned by the holder and shall
be signed by the President or a Vice President and by the Secretary or an
Assistant Secretary or an Assistant Treasurer of the Corporation and sealed with
the Seal of the Corporation.
ARTICLE XVI.
Transfers of Stock
The shares of stock shall be transferable on the books of the Corporation
by the person named in the Certificate or by attorney, lawfully constituted in
writing, upon surrender of the certificate thereof.
The Board of Directors shall have power and authority to make all such
rules and regulations as it shall deem expedient concerning the issue, transfer
and registration of certificates for shares of stock of the Corporation or scrip
certificates for such stock.
The Board of Directors may appoint and remove transfer agents and
registrars of transfers, and may require all stock certificates and/or scrip
certificates to bear the signature of any such transfer agent and/or of any such
registrar of the transfers.
ARTICLE XVII.
Record Date
The Board of Directors may fix a future date as the record date for
determining the stockholders entitled to notice of a stockholders' meeting, to
demand a special meeting, to vote or to take any other action. Such record date
may not be more than seventy (70) days before the meeting or action requiring a
determination of stockholders. A determination of stockholders entitled to
notice of or to vote at a stockholders' meeting is effective for any adjournment
of the meeting unless the Board of Directors fixes a new record date for the
adjourned meeting, which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
If no record date is fixed by the Board of directors for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders,
the close of business on the day before the first notice of the meeting is
delivered to stockholders shall be the record date for such determination of
stockholders.
The Board of Directors may fix a date as the record date for determining
stockholders entitled to a distribution or share dividend. If no record date is
fixed by the Board of Directors for such determination, it is the date the Board
of Directors authorizes the distribution or share dividend.
ARTICLE XVIII.
Registered Stockholders
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as expressly provided by the Laws of
Florida.
ARTICLE XIX.
Lost Certificates
Any person claiming a certificate of stock to be lost or destroyed shall
make an affidavit or affirmation of that fact and verify the same in such manner
as the Board of Directors may require, and shall if the Board of Directors so
requires, give the Corporation, its transfer agents, registrars and/or other
agents a bond of indemnity in form and with one or more sureties satisfactory to
the Board of Directors before a new certificate may be issued of the same tenor
and for the same number of shares as the one alleged to have been lost or
destroyed.
ARTICLE XX.
Inspection of Books
The Board of Directors shall determine from time to time whether, and if
allowed, when and under what conditions and regulations the accounts and books
of the Corporation, or any of them, shall be open to the inspection of the
stockholders. No stockholder shall have any right to inspect any book or
document of the Corporation except as such right may be conferred by the laws of
the State of Florida or as may be authorized by the Board of Directors or the
stockholders.
ARTICLE XXI.
Checks, Etc.
All checks, drafts, acceptances, notes and other orders, demands or
instruments in respect of the payment of money shall be signed or endorsed in
behalf of the Corporation by such officer or officers or by such agent or agents
as the Board of Directors may from time to time designate.
ARTICLE XXII.
Fiscal Year
The fiscal year of the Corporation shall end on the last Wednesday in the
month of June of each year.
ARTICLE XXIII.
Dividends
Dividends upon the capital stock of the Corporation may be declared at the
discretion of the Board of Directors, at any regular or special meeting, subject
to the provisions of the Articles of Incorporation and the Laws of the State of
Florida.
ARTICLE XXIV.
Notices
Section 1. How Given: Notice required to be given by the Articles of
Incorporation or by these By-Laws is effective when mailed postage prepaid
and correctly addressed to the stockholder, officer or director, as the
case may be, at such address as appears on the current records of the
Corporation.
Section 2. Waiver of Notice: Notice of a meeting of the Board of Directors need
not be given to any Director who signs a waiver of notice either before or
after the meeting. Attendance of a Director at a meeting shall constitute a
waiver of notice of such meeting, except when the Director states at the
beginning of the meeting or promptly upon arrival, any objection to the
transaction of business because the meeting is not lawfully called or
convened.
ARTICLE XXV.
Amendments
Unless otherwise provided in the Articles of Incorporation, these By-Laws
may be altered, amended or repealed by the affirmative vote of a majority of the
holders of Stock issued and outstanding and entitled to vote at any regular or
special meeting of the stockholders, or by the affirmative vote of a majority of
the Board of Directors at any regular or special meeting, if notice of the
proposed alteration, amendment or repeal be contained in the notice of the
meeting.
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</LEGEND>
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<PERIOD-END> Jan-12-2000
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0
0
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