AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1994
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ECKERD CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 5912 13-3302437
(State or other jurisdiction of (Primary standard (IRS employer
incorporation or organization) industrial classification identification
code number) number)
8333 BRYAN DAIRY ROAD
LARGO, FLORIDA 34647
(813) 399-6000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
ROBERT E. LEWIS, ESQ.
VICE PRESIDENT/GENERAL COUNSEL
8333 BRYAN DAIRY ROAD
LARGO, FLORIDA 34647
(813) 399-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
ALAN C. MYERS, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As
soon as practicable after this registration statement becomes
effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box: ( )
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box: (X)
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount
Title of each maximum maximum of
class of Amount to offering aggregate registr-
securities to be be price per offering ation
registered registered share (1) price (1) fee
________________ __________ __________ _________ _________
Common Stock
($.01 par value) 303,060 $29.00 $8,788,740 $3,031
(1) Estimated solely for the purpose of calculating the
registration fee. Pursuant to Rule 457(c) under the
Securities Act of 1933, the registration fee applicable to
the Common Stock is calculated upon the basis of the
average high and low sales prices of the Common Stock as
reported on the New York Stock Exchange Composite Tape on
October 25, 1994.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
SUBJECT TO COMPLETION, DATED OCTOBER 31, 1994
PROSPECTUS
303,060 SHARES
ECKERD CORPORATION
COMMON STOCK
_________________
The 303,060 shares of common stock, par value $.01 per share (the
"Common Stock"), of Eckerd Corporation (the "Company") described in
this Prospectus are held by the Selling Stockholders (as defined
herein) who may from time to time offer for sale such shares of
Common Stock. See "Selling Stockholders." The Company will not
receive any proceeds from the sale of Common Stock by the Selling
Stockholders.
The Common Stock offered hereby may be sold from time to time
directly by the Selling Stockholders. Alternatively, the Common
Stock may be offered to or through broker-dealers or underwriters who
may act solely as agents, or who may acquire Common Stock as
principals. The distribution of the Common Stock being offered by
the Selling Stockholders may be effected in one or more transactions
that may take place through the New York Stock Exchange (the "NYSE"),
including block trades or ordinary broker's transactions, through
privately negotiated transactions, through an underwritten public
offering or through a combination of any such methods of sale, at
market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling
Stockholders may pay usual and customary or specifically negotiated
brokerage fees or commissions in connection with such sales. See
"Plan of Distribution." The Company has agreed to pay all expenses
(other than commissions or discounts of underwriters, broker-dealers
or agents, broker fees, state and local transfer taxes and fees and
expenses of counsel or other advisers to the Selling Stockholders) in
connection with the registration of the Common Stock being offered by
the Selling Stockholders.
The Common Stock is listed on the NYSE under the trading symbol
"ECK." The last reported sale price of the Common Stock on the NYSE
Composite Tape on October 28, 1994 was $31.00 per share.
To the extent required, the identity of, and certain other
information relating to the Selling Stockholders, the terms of each
sale of Common Stock offered hereby, including the initial public
offering price, the names of any underwriters, broker-dealers or
agents, the compensation, if any, of such underwriters, broker-
dealers or agents and the other terms in connection with the sale of
the Common Stock in respect of which this prospectus is delivered
will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement"). The aggregate proceeds to the Selling
Stockholders from the sale of the Common Stock so offered will be the
purchase price of the Common Stock sold less the aggregate agents'
commissions and underwriters' discounts, if any, and other expenses
of issuance and distribution not borne by the Company.
The Selling Stockholders and such broker-dealers, underwriters or
agents that participate with the Selling Stockholders in the
distribution of the Common Stock may be deemed to be underwriters
under the Securities Act of 1933, as amended (the "Securities Act"),
and any commissions received by them and any profit on the resale of
the Common Stock purchased by them might be deemed to be underwriting
discounts and commissions under the Securities Act.
________________________
FOR INFORMATION CONCERNING CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS."
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
________________________
The date of this Prospectus is , 1994.
Information contained herein is subject to completion or
amendment. A registration statement relating to these
securities has been filed with the Securities and
Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This
prospectus shall not constitute an offering to sell or
the solicitation of an offer to buy nor shall there be
any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws
of any such State.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY SECURITIES OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT OR AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO SUCH DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by the
Company with the Commission, may be inspected at the public
reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and should also be available for inspection and copying at the
regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048; and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material may also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Additionally,
such reports and other information concerning the Company are
available for inspection at the offices of the New York Stock
Exchange located at 20 Broad Street, New York, New York 10005, on
which the Common Stock is listed, and at the offices of the
American Stock Exchange located at 86 Trinity Place, New York,
New York 10006, on which the Company's 11 1/8% Subordinated
Debentures due 2001 (the "11 1/8% Debentures") are listed.
This Prospectus constitutes a part of a Registration
Statement on Form S-3 filed by the Company with the Commission
under the Securities Act. This Prospectus omits certain of the
information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the
exhibits relating thereto for further information with respect to
the Company and the Common Stock offered hereby. Any statements
contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is
made to such copy filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits thereto may be inspected
without charge at the office of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
thereof may be obtained from the Commission at prescribed rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the
Commission (File No. 1-4844) pursuant to the Exchange Act, are
incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the
fiscal year ended January 29, 1994.
2. The Company's Annual Report on Form 10-K/A for the
fiscal year ended January 29, 1994.
3. The description of the Common Stock contained in
the Registration Statement on Form 8-A dated July
14, 1993, as amended by Amendment No. 1 to the
Registration Statement on Form 8-A dated August 5,
1993.
4. The Company's Quarterly Reports on Form 10-Q for
the quarters ended April 30, 1994 and July 30,
1994.
5. The Company's Proxy Statement dated April 18, 1994
for its annual meeting of stockholders held on May
17, 1994.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the shares of Common Stock offered hereby shall be deemed to be
incorporated in this Prospectus by reference and to be a part
hereof from the date of filing of such documents.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, on the written or
oral request of any such person, a copy of any and all of the
documents incorporated herein by reference (other than exhibits
unless such exhibits are specifically incorporated herein by
reference). Requests for such copies should be directed to the
Treasurer, Eckerd Corporation, 8333 Bryan Dairy Road, Largo,
Florida 34647.
Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
THE COMPANY
The Company operates the Eckerd Drug store chain, which is
one of the five largest drug store chains in the United States.
At July 30, 1994, the Eckerd Drug store chain consisted of 1,714
stores in 13 states located primarily in the Sunbelt, including
550 stores in Florida and 481 stores in Texas. Over its 40-year
history, the Eckerd Drug store chain has built a strong market
position in areas where demographic characteristics are favorable
to drug store growth. The Company's stores are concentrated in 10
of the 12 metropolitan statistical areas with the largest
percentage growth in population from 1980 to 1990, and, according
to industry sources, the Company ranks first or second in terms
of drug store sales in 12 of the 14 major metropolitan markets in
which it operates.
The primary focus of Eckerd Drug stores is the sale of
prescription and over-the-counter drugs. During fiscal 1993, the
Company filled more than 81 million prescriptions, and sales of
prescription and over-the-counter drugs generated approximately
59% of the Company's drug store sales. During the period from
fiscal 1989 to fiscal 1993, the dollar volume of sales of
prescription drugs by the Company increased 55.4%.
Another significant focus of Eckerd Drug stores is photo
finishing. The Company is among the top three retail photo
finishers in the United States, and the Company believes that it
is the leading source of photo finishing in all of the major
markets in which it operates. The Company processed over 28
million rolls of film in its own photo labs in fiscal 1993 and
has several well known branded processing programs.
Merrill Lynch Capital Partners, Inc. ("Merrill Lynch Capital
Partners") formed the Company for the purpose of acquiring, in
April 1986, the former Jack Eckerd Corporation (the
"Acquisition"). Prior to the Acquisition, the Company had no
activities other than those connected to the Acquisition. On
August 12, 1993, the Company completed an initial public offering
(the "IPO") in which it issued and sold 5,175,000 shares of
Common Stock for $14.00 per share. The stockholders of the
Company include (i) certain partnerships affiliated with Merrill
Lynch Capital Partners, (ii) certain other affiliates of Merrill
Lynch & Co., Inc. ("ML & Co.") ((i) and (ii), collectively, the
"Merrill Lynch Investors"), (iii) approximately 25 members of
current and former management (the "Management Investors"), (iv)
the Company's Employees' Profit Sharing Plan and (v) certain
affiliates of the banks which provided part of the financing for
the Acquisition and other institutional investors. As of
September 24, 1994, the Merrill Lynch Investors owned
approximately 12,889,809 shares, or 40.67%, of the Common Stock,
and the Management Investors owned approximately 1,529,424
shares, or 4.83%, of the Common Stock.
The Company was incorporated in Delaware in 1985. The
Company's principal executive offices are located at 8333 Bryan
Dairy Road, Largo, Florida 34647; telephone number (813) 399-
6000.
RISK FACTORS
Prior to making an investment decision, prospective
purchasers should carefully consider all of the information
contained in this Prospectus, and, in particular, should evaluate
the following risk factors.
SUBSTANTIAL INDEBTEDNESS
As a result of the Acquisition, the related financing and
refinancings thereof, the Company is highly leveraged. At July
30, 1994, the Company had long-term debt (including current
maturities) of approximately $973.7 million and a stockholders'
deficit of approximately $146.4 million. The Company may incur
additional indebtedness in the future, including (i) unused and
available borrowing commitments under the revolving credit
facility portion of the Credit Agreement (as defined herein) of
$169.6 million on July 30, 1994 and (ii) up to an additional
$150.0 million aggregate principal amount of debt securities (the
"Debt Securities") which are registered pursuant to an effective
shelf registration statement, subject in all cases to certain
restrictions contained in the Credit Agreement, the 9 1/4% Notes
(as defined herein) and the Company's other debt instruments. See
"-- Restrictions Imposed by Terms of the Company's Indebtedness."
As of October 15, 1994, the Company had borrowed an additional
$31.5 million under the revolving credit facility portion of the
Credit Agreement.
The ability of the Company to make cash payments to satisfy
its substantial indebtedness will depend upon its future
operating performance, which is subject to prevailing economic
conditions, and to financial, business and other factors beyond
the Company's control. Based upon the Company's ability to
generate cash flow from operating activities, the available
unused portion of the working capital revolving loans under the
Credit Agreement and other existing financing sources, the
Company believes that it will have the funds necessary to meet
the principal and interest payments on its debt as they become
due and to operate and expand its businesses. However, there can
be no assurance that the Company will be able to do so. If the
Company is unable to generate sufficient earnings and cash flow
to meet its obligations with respect to its outstanding
indebtedness, refinancing of certain of these debt obligations or
asset dispositions might be required. In the event debt
refinancing is required, there can be no assurance that the
Company can effect such refinancing on satisfactory terms or that
the refinancing will be permitted by the lenders under the Credit
Agreement, by the terms of the 9 1/4% Notes or by the other
creditors of the Company. In addition, asset dispositions may be
made under circumstances which might not be favorable to
realizing the best price for such assets. Moreover, there can be
no assurance that assets can be sold promptly enough, or for
amounts sufficient to satisfy outstanding debt obligations. The
Credit Agreement and the 9 1/4% Notes contain certain
restrictions on the Company's ability to sell assets and on the
use of proceeds from permitted asset sales. For information
regarding restrictions on debt refinancing and asset
dispositions, see "Description of Certain Indebtedness."
While certain transactions consummated in 1993 and 1994,
such as the IPO, the issuance of the 9 1/4% Notes and amendments
to the Credit Agreement, have improved the Company's financial
flexibility, the substantial interest and principal payment
requirements on borrowings under the Credit Agreement, the 9 1/4%
Notes and the Company's other indebtedness could have important
consequences to holders of Common Stock, including (i) limiting
the Company's ability to effect future financings and otherwise
restricting corporate activities, including the Company's ability
to respond to market conditions, to provide for capital
expenditures or to take advantage of acquisition opportunities
and (ii) reducing the funds available to the Company for its
operations. The Credit Agreement, the 9 1/4% Notes and certain
other financing agreements impose other operating and financial
restrictions on the Company, the failure to comply with which may
result in an event of default which, if not cured or waived,
would have a material adverse effect on the Company. See "--
Restrictions Imposed by Terms of the Company's Indebtedness."
All of the Company's indebtedness under the Credit Agreement
is at variable rates of interest, causing the Company to be
sensitive to prevailing interest rates. As required by the Credit
Agreement, the Company has entered into certain interest rate
protection agreements with respect to $200.0 million of its
floating rate exposure. Such interest rate protection agreements
will remain in full force and effect through August 1996. At
July 30, 1994, the Company had an additional $385.5 million of
borrowings under the Credit Agreement ($404.0 million at October
15, 1994), which are at variable rates of interest. To the extent
interest rates rise, the Company's ability to pay principal and
interest on borrowings under the Credit Agreement and its other
indebtedness could be adversely affected. See "Description of
Certain Indebtedness -- The Credit Agreement."
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The terms and conditions of the Credit Agreement and the 9
1/4% Notes Indenture (as defined herein) impose restrictions that
affect, among other things, the ability of the Company and its
subsidiaries to incur debt, pay dividends, make acquisitions,
create liens and make capital expenditures. See "Description of
Certain Indebtedness -- The Credit Agreement" and "-- The 9 1/4%
Notes." The Credit Agreement also requires the Company to
satisfy certain financial covenants on a quarterly basis. The
ability of the Company to comply with such financial covenants
can be affected by events beyond the Company's control, and there
can be no assurance that the Company will achieve operating
results that will comply with such covenants. A breach of any of
these covenants could result in a default under the Credit
Agreement, the 9 1/4% Notes Indenture and other indebtedness of
the Company. In the event of any such default, the lenders under
the Credit Agreement could elect to declare all amounts borrowed
thereunder, together with accrued interest, to be due and
payable. If the Credit Agreement indebtedness were to be
accelerated, there can be no assurance that the assets of the
Company would be sufficient to repay in full such Credit
Agreement indebtedness and the other indebtedness of the Company.
COMPETITION
The Company operates in highly competitive industries. In
addition to traditional competition from independent drug stores
and other drug store chains, Eckerd Drug stores face competition
from mass merchants (including discounters and deep discounters),
supermarkets, combination food and drug stores, mail order
distributors, hospitals and HMOs and other managed care
providers. These other formats have experienced significant
growth in their market share of the prescription and over-the-
counter drug business. Many of these competitors have greater
financial resources than the Company. The Company competes with
these competitors primarily on the basis of customer service,
convenience and price.
SALES TO THIRD PARTY PAYORS
A growing percentage of the Company's prescription drug
volume has been accounted for by sales to customers who are
covered by third-party payment programs. Third-party prescription
sales accounted for approximately 63.2%, 58.0%, 49.6%, 43.1%,
36.0% and 30.7% of the Company's prescription sales in the first
half of fiscal 1994, fiscal 1993, fiscal 1992, fiscal 1991,
fiscal 1990 and fiscal 1989, respectively. Prescription sales to
third-party payors, in terms of both dollar volume and as a
percentage of total prescription sales, continued to increase in
fiscal 1993, and the Company expects this trend to continue.
Although contracts with third-party payors may increase the
volume of prescription sales and gross profits, third-party
payors typically negotiate lower prescription prices than those
on non third-party prescriptions. Accordingly, there has been
downward pressure on gross profit margins on sales of
prescription drugs which is expected to continue in future
periods.
PRESCRIPTION DRUG SALES AND FUTURE REGULATION
The Company relies on prescription drug sales for a
significant portion of its revenues and profits, and prescription
drug sales represent a growing segment of the Company's business.
Prescription drug sales accounted for approximately 50.9%, 48.3%,
45.4%, 44.0%, 42.6% and 40.3% of the Company's drug store sales
for the first half of fiscal 1994, fiscal 1993, fiscal 1992,
fiscal 1991, fiscal 1990 and fiscal 1989, respectively. These
revenues are affected by changes within the health care industry,
including changes in programs providing for reimbursement of the
cost of prescription drugs by third-party payors, such as
government and private sources, and regulatory changes relating
to the approval process for prescription drugs. The Clinton
Administration has stated that health care reform is one of its
top priorities. A health care reform plan by President Clinton
as well as a number of competing health care reform proposals
were introduced in Congress. Although Congress has recently
announced that no federal legislation will be passed this year,
the Company cannot predict whether any federal health care reform
legislation will eventually be passed, and if so, the impact
thereof on the Company's financial position or results of
operations. Health care reform, if implemented, could adversely
affect the pricing of prescription drugs or the amount of
reimbursement from governmental agencies and third-party payors,
and consequently could be adverse to the Company. However, to the
extent health care reform expands the number of persons receiving
health care benefits covering the purchase of prescription drugs,
it would also result in increased purchases of such drugs and
could thereby have a favorable impact on both the Company and the
retail drug industry in general. Nevertheless, there can be no
assurance that any such future legislation or any similar
legislation adopted by any states in which the Company operates
will not adversely affect the Company or the retail drug store
industry generally.
PRINCIPAL STOCKHOLDERS
As of September 24, 1994, the Merrill Lynch Investors owned
approximately 40.67% of the outstanding shares of Common Stock and
the Management Investors owned approximately 4.83% of the
outstanding shares of Common Stock. As a result of such stock
ownership, if the Merrill Lynch Investors and the Management
Investors were to vote together, they would likely be in a
position to elect the Board of Directors of the Company, to
approve or disapprove of other matters requiring stockholder
approval and to effectively control the affairs and policies of
the Company. The Merrill Lynch Investors are affiliates of
Merrill, Lynch, Pierce, Fenner & Smith Incorporated. In
addition, certain provisions of the Company's Certificate of
Incorporation and By-laws could make more difficult non-
negotiated acquisitions of the Company. These provisions include
a staggered board of directors, limitation on actions by written
consent of stockholders and advance notice procedures for
nominations of directors and other stockholder proposals. See
"Description of Capital Stock -- Certificate of Incorporation and
By-laws."
SHARES ELIGIBLE FOR FUTURE SALE
At September 24, 1994, the Company had 31,996,286 shares of
Common Stock outstanding (assuming that all of the shares of
Common Stock to be offered by the Selling Stockholders pursuant
to this Prospectus were outstanding as of such date). All of the
303,060 shares of Common Stock, when sold hereby, together with
approximately 11,314,042 shares (consisting of 5,175,000 shares
sold in the IPO, 3,199,056 shares sold in an underwritten public
offering of Common Stock for the account of certain stockholders
of the Company which was consummated in May 1994, approximately
1,314,861 shares of Common Stock issued upon exercise of options
granted pursuant to the Company's 1993 Stock Option and Incentive
Plan and approximately 1,625,125 shares of Common Stock sold
pursuant to Rule 144 as described below) will be freely
transferable without restriction under the Securities Act, unless
held by an affiliate of the Company. The remaining outstanding
shares of Common Stock held by existing stockholders are
"restricted securities" of the Company within the meaning of Rule
144 under the Securities Act and may not be sold unless they are
registered under the Securities Act or sold pursuant to an
exemption from registration thereunder, including the exemption
contained in Rule 144, which contains certain volume and other
resale limitations. Pursuant to Rule 144(k), however, a person
(or persons whose shares are aggregated) who is not deemed to
have been an affiliate of the Company at the time of sale and has
not been an affiliate during the three months immediately
preceding the sale may sell such shares without regard to such
volume and other resale limitations of Rule 144 provided that a
period of at least three years has elapsed since the later of the
date the securities were acquired from the issuer or from an
affiliate of the issuer.
The Merrill Lynch Investors, the Management Investors and
the other existing stockholders of the Company were granted
rights entitling them, under specified circumstances, to cause
the Company to register for sale all or part of their shares of
Common Stock and to include such shares in any registered public
offerings of Common Stock by the Company. The Company has
obtained waivers of such registration rights in connection with
the registration of the shares of Common Stock to be offered by
the Selling Stockholders pursuant to this Prospectus. See
"Description of Capital Stock -- Registration Rights."
No prediction can be made as to the effect, if any, that
future sales of Common Stock or the availability of Common Stock
for future sale will have on the market price of the Common Stock
prevailing from time to time. Sales of substantial amounts of
Common Stock (including shares issued upon exercise of employee
stock options) in the public market, or the perception that such
sales could occur, could adversely affect prevailing market
prices of the Common Stock.
Future sales of Common Stock could also cause the Company to
experience an "ownership change" within the meaning of Section
382 of the Internal Revenue Code of 1986, as amended. If such
"ownership change" occurs, the Company's ability to use its net
operating loss carryovers existing at such time to offset its
taxable income, if any, generated thereafter, would be subject to
certain limitations.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of
Common Stock offered by the Selling Stockholders.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following summaries of the principal terms of certain
outstanding indebtedness of the Company do not purport to be
complete and are subject to the detailed provisions of, and
qualified in their entirety by reference to, the respective
financing agreements, copies of which have been filed or
incorporated by reference as exhibits to the Registration
Statement of which this Prospectus is a part and to which
exhibits reference is hereby made. Whenever particular provisions
of such documents are referred to, such provisions are
incorporated by reference as a part of the statements made, and
the statements are qualified in their entirety by such reference.
THE CREDIT AGREEMENT
The Company is party to the Credit Agreement dated as of
June 14, 1993 as amended and restated as of August 3, 1994 (the
"Credit Agreement") with the financial institutions party thereto
(the "Lenders"), Chemical Bank, a New York banking corporation
("Chemical Bank"), NationsBank of Florida, N.A., a national
banking association, as managing agents for the Lenders (in such
capacity, each a "Managing Agent") and as swingline lenders (in
such capacity, each a "Swingline Lender"), and Chemical Bank as
administrative agent for the Lenders, the Swingline Lenders and
the fronting banks with respect to letters of credit ("Letters of
Credit") and bankers' acceptances ("Bankers' Acceptances") issued
in connection with the Credit Agreement.
The Lenders extended credit (i) on a term basis in an
aggregate principal amount not to exceed $500.0 million (the
"Term Loans") and (ii) on a revolving basis at any time and from
time to time prior to July 29, 2000, in an aggregate principal
amount outstanding not in excess of $350.0 million (the
"Revolving Loans") of which up to (a) $30.0 million of such
amount is available as swingline loans (the "Swingline Loans")
and (b) $155.0 million of such amount is available as Letters of
Credit and Bankers' Acceptances. At October 15, 1994, the
Company had approximately $500.0 million outstanding under the
Term Loans, $104.0 million outstanding under the Revolving Credit
Facility and $23.0 million of Bankers' Acceptances and had unused
and available borrowing commitments under the Revolving Credit
Facility of $147.5 million. The term of the Credit Agreement
expires on July 29, 2000.
The Company uses the proceeds of Revolving Loan borrowings
from time to time for general corporate purposes of the Company
and its subsidiaries. The proceeds of Swingline Loans are also
used for general corporate purposes of the Company and its
subsidiaries. Letters of Credit and Bankers' Acceptances are
used to support obligations of the Company and its subsidiaries
incurred in the ordinary course of business.
The obligations of the Company under the Credit Agreement
are unconditionally guaranteed by each of the active subsidiaries
of the Company (each, a "Guarantor"). The Company and certain of
the Guarantors have in addition pledged capital stock of the
Guarantors, and all borrowings under the Credit Agreement are
secured by a first priority lien on all accounts, accounts
receivable, equipment, inventory, proceeds, intellectual
property, and certain other property of the Company and first
priority mortgages on two distribution centers of the Company
located in Texas and the Company's headquarters located in
Florida.
The Term Loans and the Revolving Loans bear interest at a
rate per annum equal to, at the Company's option, (i) the
Alternate Base Rate ("ABR") (defined in the Credit Agreement as
the highest of (a) the prime rate, (b) the federal funds
effective rate plus 1/2 of 1%, and (c) the base CD rate plus 1%)
or (ii) the Adjusted LIBO rate ("LIBOR") (defined in the Credit
Agreement as the product of (a) LIBOR in effect for the
applicable interest period and (b) statutory reserves) plus, in
each case, the applicable LIBOR or ABR spread (the "Interest
Spread"), as the case may be. The Interest Spread is determined
by reference to the ratio of funded debt to earnings before
interest, taxes, depreciation and amortization (the "Ratio"). If
the Ratio is (w) less than or equal to 2.5 ("Level I Ratio"),
the Interest Spread is 0% on ABR loans and 3/4 of 1% on LIBOR
loans, (x) less than or equal to 3.0 but greater than 2.5 ("Level
II Ratio"), the Interest Spread is 0% on ABR loans and 1% on
LIBOR loans, (y) less than or equal to 3.5 but greater than 3.0
("Level III Ratio"), the Interest Spread is 1/4 of 1% on ABR
loans and 1 and 1/4% on LIBOR loans, and (z) greater than 3.5
("Level IV Ratio"), the Interest Spread is 1/2 of 1% on ABR loans
and 1 and 1/2% on LIBOR loans. Interest is computed on the basis
of actual number of days elapsed over a 360-day year except when
the rate is determined by reference to the prime rate, in which
case it is computed on the basis of actual number of days
elapsed over a 365- or 366-day year. The Swingline Loans bear
interest at the rate applicable to ABR Revolving Loans.
Interest on ABR borrowings are payable quarterly. Interest
on LIBOR borrowings are payable at the end of the relevant
interest period (one, two, three or six-month periods, except
that with respect to six-month periods, interest shall be payable
every three months). The Company pays the Lenders a commitment
fee on the undrawn amount of the revolving facilities determined
by reference to the Ratio. If the Company has achieved a (x)
Level I Ratio, the commitment fee is 1/4 of 1%; (y) Level II
Ratio or Level III Ratio, the commitment fee is 3/8 of 1%; or (z)
Level IV Ratio, the commitment fee is 1/2 of 1%. The Company
also pays Letter of Credit fees and Bankers' Acceptance fees, and
has paid commitment and other fees to the Managing Agents and the
Lenders.
Principal of the Term Loans will be amortized on the
following schedule:
Date Amount Date Amount
October 29, $10,000,000 January 31, 40,000,000
1994 1998
January 28, 35,000,000 May 2, 1998 15,000,000
1995
April 29, 1995 10,000,000 August 1, 1998 15,000,000
July 29, 1995 10,000,000 October 31, 15,000,000
1998
October 28, 10,000,000 January 30, 50,000,000
1995 1999
February 3, 35,000,000 May 1, 1999 15,000,000
1996
April 27, 1996 15,000,000 July 31, 1999 15,000,000
August 3, 1996 15,000,000 October 30, 15,000,000
1999
November 2, 15,000,000 January 29, 55,000,000
1996 2000
February 1, 35,000,000 April 29, 2000 15,000,000
1997
May 3, 1997 15,000,000 July 29, 2000 15,000,000
August 2, 1997 15,000,000
November 1, 15,000,000
1997
The Company is required to prepay borrowings under the
Credit Agreement with (i) in any fiscal year, the excess of (a)
the aggregate net proceeds of dispositions of assets of the
Company and its subsidiaries over (b) $6.0 million, (ii) in any
fiscal year, the net proceeds of any incurrence of debt (other
than indebtedness permitted under the Credit Agreement), and
(iii) 50% of the excess of (a) net proceeds of any equity
issuance over (b) the amount of such proceeds applied to redeem
or repurchase the 11 1/8% Debentures. Mandatory prepayments are
to be applied (i) first, pro rata against remaining scheduled
installments of principal due in respect of Term Loans and (ii)
second, to prepay Swingline Loans and then other Revolving Loans.
In addition, upon the closing of the sale of the Company's
subsidiary, Insta-Care Holdings, Inc. ("Insta-Care") (which, in
fiscal 1993, accounted for approximately 2.5% of the Company's
sales and 2.6% of the Company's earnings before interest and
taxes), the Company is required to prepay borrowings under the
Credit Agreement with any net proceeds of such sale that are not
applied to repurchase or redeem the 11 1/8% Debentures. Pursuant
to the Credit Agreement, the Company may use the greater of (x)
the lesser of (1) 100% of the net proceeds from the sale of
Insta-Care and (2) $50.0 million and (y) 75% of the net proceeds
from the sale of Insta-Care, to redeem the 11 1/8% Debentures.
On September 12, 1994, the Company entered into an agreement for
the sale of Insta-Care for $112.0 million, subject to adjustment,
the consummation of which is subject to certain closing
conditions.
The Company has the right to prepay any borrowings under the
Credit Agreement in whole or in part at any time. Optional
prepayments of Term Loans are to be applied (i) first, in the
order of maturity of the scheduled installments of principal due
on the repayment dates occurring during the twelve-month period
beginning on the date of such prepayment and (ii) second, pro
rata against the remaining scheduled installments of principal
due in respect of Term Loans.
The Credit Agreement contains various restrictive covenants
prohibiting the Company and its subsidiaries from (subject to
certain exceptions), (i) incurring or permitting to exist any
indebtedness, other than, among other things, (a) certain
indebtedness specified existing on the date the Company restated
the Credit Agreement, (b) indebtedness that consists of purchase
money indebtedness or capital lease obligations and is either (x)
incurred by the Company in the ordinary course of business to
finance capital expenditures or (y) exists with respect to an
acquired entity if such indebtedness exists at the time of
acquisition; provided, that indebtedness described in (x) and (y)
shall not exceed $10.0 million in any fiscal year and
indebtedness described in (x) must be incurred within 90 days
after the making of the capital expenditure financed thereby, (c)
certain deferred purchase price obligations in an amount not to
exceed $5.0 million, (d) reimbursement obligations in limited
amounts, (e) certain intercompany indebtedness, (f) indebtedness
in respect of interest rate protection agreements, (g) the 11
1/8% Debentures, (h) the 9 1/4% Notes, (i) subordinated
indebtedness incurred solely to redeem the 11 1/8% Debentures or
the 9 1/4% Notes in whole at an interest rate more favorable than
that in effect under the 11 1/8% Debentures or the 9 1/4% Notes,
as the case may be, and on terms no less favorable to the Company
than those in effect under the 11 1/8% Debentures or the 9 1/4%
Notes, and (j) obligations of the Company and certain
subsidiaries under various stock or option purchase agreements;
(ii) incurring or permitting to exist any liens, other than,
among other things, (a) certain specified liens existing on the
date the Company restated the Credit Agreement, (b) liens
existing on property or assets prior to the acquisition thereof
by the Company, (c) purchase money security interests in real
property, improvements thereto or equipment, and (d) liens on
consigned goods; (iii) entering into sale and leaseback
transactions other than those specified in the Credit Agreement;
(iv) making investments, loans or advances in excess of $7.0
million in the aggregate at any time outstanding, other than,
among others, the acquisitions of entities engaged in one or more
lines of business substantially similar to those engaged in on
the date the Credit Agreement was restated, not to exceed $50.0
million in any instance or $100.0 million in any fiscal year
(subject, in the case of any such acquisition exceeding $15.0
million, to certain pro forma financial ratio compliance tests);
(v) merger, consolidation, sale of all or any substantial part of
any asset or any capital stock of a subsidiary, or acquisitions
(including leases of all or any substantial part of the assets of
any entity), except for, among other things, (a) the sale of
inventory in the ordinary course of business, (b) the sale of
accounts receivable on an ongoing basis; provided that the
purchaser of such receivables may at no time invest more than
$75.0 million, (c) the sale or other disposal of Insta-Care and
certain specified real estate, and (d) the sale of $35.0 million
of assets, provided that sales not exceed $10.0 million in any
twelve-month period; (vi) declaring or paying dividends or
distributions, except for, among other things, purchases or
redemptions of stock in connection with certain existing
management subscription agreements; (vii) engaging in any
transaction with any affiliate other than, subject to limited
exceptions, on arms-length terms; (viii) engaging in business
activities not reasonably related to their current business
activities; (ix) subject to limited exceptions, prepaying or
redeeming indebtedness; (x) amending, waiving, modifying or
terminating certain documents, including, among others, their
respective charter documents and the terms of material
indebtedness of the Company, unless such amendment, waiver
modification or termination is not adverse to the Lenders; and
(xi) maintaining a bank account with a financial institution
other than a Lender, except as expressly specified.
The Credit Agreement requires the Company to satisfy certain
financial covenants, including, among other things, on a
quarterly basis, with respect to the four immediately preceding
quarters: (i) the Ratio; (ii) interest coverage ratio; and
(iii) fixed charge coverage.
"Events of Default" under the Credit Agreement include (i)
default in the payment when due of any principal payable on the
loans under the Credit Agreement; (ii) default in the payment of
any interest, fees or other amounts payable under the Credit
Agreement for a period of three business days; (iii) the failure
to comply with any covenant, condition or agreement contained in
the Credit Agreement or related loan documents; (iv) the failure
to pay any principal or interest due in respect to any
indebtedness in a principal amount in excess of $3.0 million
(after giving effect to any applicable grace period); (v) the
commencement of a bankruptcy, insolvency, receivership or similar
action by or against the Company or any subsidiary; (vi) one or
more judgments in an aggregate amount in excess of $250,000 (to
the extent not covered by insurance) rendered against the Company
or any subsidiary which shall remain undischarged for a period of
10 days; (vii) certain events under the Employee Retirement
Income Security Act of 1975; and (viii) a change in control
("Change in Control") which shall occur, if, among other things,
(a) any person or group other than Merrill Lynch Capital Partners
and its affiliates shall own shares representing more than 30% of
the ordinary voting power of the Company, and (b) certain
specified changes in the composition of the board of directors of
the Company occur.
THE 9 1/4% NOTES
The 9 1/4% Senior Subordinated Notes due 2004 (the "9 1/4%
Notes") are senior subordinated obligations of the Company,
subordinated in right of payment to all existing and future
senior debt of the Company. The 9 1/4% Notes are senior to the 11
1/8% Debentures. The 9 1/4% Notes are redeemable at the option of
the Company, in whole or in part, at specified redemption prices,
and upon a Change in Control. The 9 1/4% Notes bear interest at
9 1/4% per annum and mature on February 15, 2004.
The indenture pursuant to which the 9 1/4% Notes were issued
(the "9 1/4% Notes Indenture") contains certain covenants that,
among other things, restrict (i) the incurrence of additional
indebtedness by the Company and its Restricted Subsidiaries (as
defined in the 9 1/4% Notes Indenture), (ii) the payment of
dividends on, and redemptions of, capital stock of the Company
and the making of other restricted payments, (iii) the incurrence
of restrictions on the ability of Restricted Subsidiaries to pay
dividends or other payments to the Company, (iv) the incurrence
of liens, (v) transactions with affiliates, (vi) the use of
proceeds from the disposition of certain assets of the Company or
the sale of the stock of Restricted Subsidiaries, (vii) the
issuance of certain guarantees and pledges by Restricted
Subsidiaries, (viii) the issuance and sale of capital stock by
Restricted Subsidiaries, (ix) the incurrence of other senior
subordinated indebtedness and (x) the ability of the Company to
engage in certain mergers or consolidations or to transfer all or
substantially all of its assets to another person.
Upon a Change in Control, (i) the Company will have the
option to redeem the 9 1/4% Notes and (ii) subject to certain
conditions, the Company will be required to make an offer to
purchase each holder's 9 1/4% Notes at 101% of the principal
amount thereof plus accrued interest to the date of redemption.
In addition, the Company will, under certain circumstances, be
obligated to make an offer to purchase 9 1/4% Notes in the event
of Asset Sales (as defined in the 9 1/4% Notes Indenture). The
Credit Agreement, however, prohibits the Company from optionally
redeeming the 9 1/4% Notes.
THE 11 1/8% DEBENTURES
The 11 1/8% Debentures are subordinated to all existing and
future senior debt of the Company, and are redeemable at the
option of the Company, in whole and in part, at 100% of their
principal amount plus accrued interest to the date of redemption.
Interest on the 11 1/8% Debentures accrues and is payable at the
rate of 11 1/8% per annum. The final maturity date of the 11 1/8%
Debentures is May 1, 2001. As of September 24, 1994 the accreted
value of 11 1/8% Debentures outstanding was approximately $135.2
million.
THE INDUSTRIAL DEVELOPMENT REVENUE BONDS
The Company has issued and outstanding $18.25 million in
Variable Rate Demand Industrial Development Revenue Refunding
Bonds including $8.25 million due March 1, 2009 and $10.0 million
due May 1, 2013. The variable rate demand industrial development
revenue refunding bonds currently have an interest rate which is
a daily rate established by J.P. Morgan Securities, Inc. and is
indicative of current bid-side yields of high grade tax-exempt
securities. At the Company's option, and under certain
conditions, the interest rate may be changed to a monthly rate or
a fixed rate. The bonds are secured by the related buildings,
leases and letters of credit and are guaranteed obligations of
the Company. The reimbursement agreement relating to the letters
of credit incorporates the restrictive covenants and limitations
of the Credit Agreement.
THE IFS SALE AND LEASEBACK
On June 15, 1993, the Company entered into the IFS Sale and
Leaseback, which is an agreement for a sale and leaseback of
certain assets related to its photo processing business. The
Company has sold certain photo processing equipment to Imaging
Financial Services, Inc., a Delaware corporation for
approximately $35.0 million, and entered into a five-year lease
with respect to such equipment. At the end of the five years, the
Company may renew the agreement or terminate the lease and return
the equipment. The IFS Sale and Leaseback also provides the
Company with up to $10.0 million per year in new five-year
operating leases for future expansion or upgrade of photo
processing equipment.
DESCRIPTION OF CAPITAL STOCK
The following summary is subject to the detailed provisions
of, and is qualified in its entirety by reference to, the
Company's Restated Certificate of Incorporation and Restated By-
laws, copies of which have been incorporated by reference as
exhibits to the Registration Statement of which this Prospectus
is a part. The authorized capital stock of the Company consists
of 100 million shares of Common Stock and 20 million shares of
preferred stock, par value $.01 per share.
COMMON STOCK
The Company's authorized common stock consists of 100
million shares of Common Stock, par value $.01 per share (of
which 3,518,728 shares are Non-Voting Common Stock (Series I),
par value $.01 per share). At September 24, 1994, there were
31,996,286 shares of Common Stock (including 605,022 shares
of Non-Voting Common Stock and assuming that all of the shares
of Common Stock to be offered by the Selling Stockholders pursuant
to this Prospectus were outstanding as of such date) issued and
outstanding and employee stock options to purchase an aggregate
of 1,314,861 shares of Common Stock outstanding (of which options
to purchase an aggregate of 421,124 shares of Common Stock were
exercisable. In addition, 258,418 shares of Common Stock were
reserved for issuance pursuant to the Company's 1993 Stock Option
and Incentive Plan. Subject to certain conditions, shares of Common
Stock held by any Regulated Banking Stockholder (as defined in
the Restated Certificate of Incorporation) may be converted into
the same number of shares of Non-Voting Common Stock and shares
of Non-Voting Common Stock held by any holder may be converted
into the same number of shares of Common Stock.
Voting Rights
Each share of Common Stock entitles the holder thereof to
one vote in elections of directors and all other matters
submitted to a vote of stockholders. The Common Stock does not
have cumulative voting rights, which means that holders of a
majority of the outstanding Common Stock voting for the election
of directors can elect all directors then being elected. Each
share of Non-Voting Common Stock does not entitle the holder
thereof to any vote on matters on which the holders of Common
Stock are entitled to vote, except on any amendment, repeal or
modification of any provision of the Company's Restated
Certificate of Incorporation which adversely affect the rights of
the holders of Non-Voting Common Stock or as otherwise required
by law.
Dividends
Subject to the rights of any preferred stock which may be
issued by the Board of Directors, each share of Common Stock and
Non-Voting Common Stock has an equal and ratable right to receive
dividends to be paid from the Company's assets legally available
therefor when, as and if declared by the Board of Directors. The
terms of the Company's outstanding indebtedness restrict the
declaration and payment of dividends on the Common Stock.
Liquidation
In the event of the dissolution, liquidation or winding up
of the Company, the holders of Common Stock and Non-Voting Common
Stock are entitled to share equally and ratably in the assets
available for distribution after payments are made to the
Company's creditors and to the holders of any preferred stock of
the Company that may be outstanding at the time.
Other
The holders of shares of Common Stock and Non-Voting Common
Stock have no preemptive, subscription, redemption or conversion
rights and are not liable for further call or assessment. All of
the outstanding shares of Common Stock are fully paid and
nonassessable.
Registrar and Transfer Agent
Mellon Securities Trust Company acts as Registrar and
Transfer Agent for the Common Stock.
PREFERRED STOCK
The Company's Restated Certificate of Incorporation provides
that the Company may issue up to 20 million shares of preferred
stock and the Board of Directors of the Company is authorized,
without further stockholder action, to divide any or all shares
of authorized preferred stock into series and to fix and
determine the designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereon, of any
series so established, including voting powers, dividend rights,
liquidation preferences, redemption rights and conversion
privileges. As of the date of this Prospectus, the Board of
Directors of the Company has not authorized any series of
preferred stock and there are no plans, agreements or
understandings for the issuance of any shares of preferred stock.
MANAGEMENT RESTRICTED STOCK
As of September 24, 1994, the Management Investors held
100,732 shares of Common Stock subject to certain restrictions
(the "Management Restricted Stock"). The Management Restricted
Stock will vest automatically on July 31, 1998 provided that the
holder thereof is then employed by the Company. The Management
Restricted Stock may vest earlier over a three-year period upon
the achievement by the Company of certain levels of performance
as indicated by the market price of the Common Stock of the
Company during each of the 12-month periods ended July 31, 1994,
1995 and 1996.
CERTIFICATE OF INCORPORATION AND BY-LAWS
Certain provisions of the Company's Restated Certificate of
Incorporation and Restated By-laws could make more difficult non-
negotiated acquisitions of the Company. The Board of Directors
believes that these provisions will help to assure the continuity
and stability of the Board of Directors and the business
strategies and policies of the Company as determined by the Board
of Directors. These provisions could have the effect, however, of
discouraging a third party from making a tender offer or
otherwise attempting to obtain control of the Company even though
such an attempt might be beneficial to the Company and its
stockholders.
Pursuant to the Company's Restated Certificate of
Incorporation, the Board of Directors of the Company is divided
into three classes serving staggered three-year terms. Directors
can be removed from office only for cause and only by the
affirmative vote of the holders of a majority of the then-
outstanding shares of capital stock entitled to vote generally in
an election of directors. Vacancies on the Board of Directors may
be filled only by the remaining directors and not by the
stockholders.
The Restated Certificate of Incorporation also provides that
any action required or permitted to be taken by the stockholders
of the Company may be effected only at an annual or special
meeting of stockholders, and prohibits stockholder action by
written consent in lieu of a meeting. The Company's Restated By-
laws provide that special meetings of stockholders may be called
only by the chairman, the president or the secretary of the
Company and must be called by any such officer at the request in
writing of the Board of Directors. Stockholders may call a
special meeting if the holders of not less than 50% of all votes
entitled to be cast at a special meeting send a written demand to
the Company's Secretary.
The Restated By-laws establish an advance notice procedure
for the nomination, other than by or at the direction of the
Board of Directors, of candidates for election as directors as
well as for other stockholder proposals to be considered at
annual meetings of stockholders. In general, notice of intent to
nominate a director or raise business at such meetings must be
received by the Company not less than 60 nor more than 90 days
prior to the anniversary of the previous year's annual meeting,
and must contain certain specified information concerning the
person to be nominated or the matters to be brought before the
meeting and concerning the stockholder submitting the proposal.
The foregoing summary is qualified in its entirety by the
provisions of the Company's Restated Certificate of Incorporation
and Restated By-laws, copies of which have been incorporated by
reference as exhibits to the Registration Statement of which this
Prospectus constitutes a part.
LIMITATIONS ON DIRECTORS' LIABILITY
The Company's Restated Certificate of Incorporation provides
that, to the fullest extent permitted by the General Corporation
Law of the State of Delaware (the "DGCL"), directors of the
Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as
a director. Section 102(7) of the DGCL, however, states that such
a provision may not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL,
relating to unlawful dividends, distributions or the repurchase
or redemption of stock or (iv) for any transaction from which the
director derives an improper personal benefit.
The Company's Restated By-laws provide that the Company
shall indemnify and hold harmless, to the fullest extent
permitted by the DGCL, any person against expenses (including
attorney's fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection with
any threatened, pending or completed legal proceedings in which
such person is involved by reason of the fact that he is or was a
director, officer, employee or agent of the Company (or serving
in any such capacity with another business organization at the
request of the Company) if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal
action or proceeding, if he had no reasonable cause to believe
that his conduct was unlawful. If the legal proceeding, however,
is by or in the right of the Company, such director, officer,
employee or agent may not be indemnified in respect of any claim,
issue or matter as to which he shall have been adjudged to be
liable to the Company unless a court determines otherwise.
The Company has entered into agreements to indemnify its
directors and officers in addition to the indemnification
provided for in the Restated Certificate of Incorporation. These
agreements, among other things, indemnify the Company's directors
and officers for certain expenses (including attorneys' fees),
judgments, fines and settlement amounts incurred by such person
in any action or proceeding, including any action by or in the
right of the Company, on account of services as a director or
officer of the Company or as a director or officer of any
subsidiary of the Company, or as a director or officer of any
other company or enterprise to which the person provides services
at the request of the Company.
REGISTRATION RIGHTS
Pursuant to a registration rights agreement, as amended,
among the Company, the Merrill Lynch Investors, the Management
Investors and the other stockholders of Eckerd who held shares
immediately prior to the IPO (the "Registration Rights
Agreement"), holders of at least 25% of the Common Stock have the
right to demand registration under the Securities Act of their
shares of Common Stock. Subject to certain exceptions, the
Company will be required, at its expense, to register such shares
and to include in the registration on request all other shares
owned by parties to the Registration Rights Agreement (or their
permitted transferees) who notify the Company of their request.
In addition, in the event the Company proposes to register any of
its equity securities under the Securities Act, each party to the
Registration Rights Agreement (or its permitted transferee) has
the incidental right, subject to certain exceptions, to have the
shares of the Common Stock then owned by it included in such
registration. The Company has agreed that, in the event of any
registration of securities owned by a party to the Registration
Rights Agreement (or permitted transferee) in accordance with the
provisions thereof, it will indemnify such person, and certain
related persons, against liabilities incurred in connection with
such registration, including liabilities arising under the
Securities Act.
The registration rights of the existing stockholders are
subject to certain limitations intended to prevent undue
interference with the Company's ability to distribute securities,
including, without limitation, the provisions that (i) demand
registration rights may not be exercised within six months after
the effective date of the Company's most recent registration
statement (other than registration on Form S-4 or S-8) and (ii)
the holders of more than 1% of the outstanding Common Stock will
not offer for public sale any shares owned by them during the
seven days before or 120 days after the effective date of any
registration statement filed pursuant to the Registration Rights
Agreement.
The Company has obtained waivers of such registration rights
in connection with the registration of the shares of Common Stock
to be offered by the Selling Stockholders pursuant to this
Prospectus.
SELLING STOCKHOLDERS
On August 30, 1994, the Company acquired from S-3, Inc., a
Texas corporation d/b/a Drug-Sav Discount Drugstores ("Drug-
Sav"), certain drugstores and related assets of Drug-Sav pursuant
to a Purchase and Sale Agreement dated as of August 23, 1994 (the
"Purchase Agreement"). Pursuant to the Purchase Agreement, the
Company acquired such assets from Drug-Sav for certain
consideration, including the 303,060 shares of Common Stock
offered hereby and cash. Among the assets acquired by the
Company was a one-year promissory note in the principal amount
of $1.0 million, which was issued by an affiliate of Drug-Sav and
guaranteed by Drug-Sav. Drug-Sav has pledged to the Company
50,000 shares of Common Stock to secure such guarantee.
The Selling Stockholders have agreed not to sell shares
of Common Stock pursuant to this Prospectus from the date
of receipt of notice by the Company of the occurrence of
certain material events not disclosed in the Prospectus
until such date that the Company (a) furnishes the
Selling Stockholders with an amended or supplemented
Prospectus or (b) advises the Selling Stockholders that
they may resume sales of the Common Stock pursuant to
this Prospectus (such period during which sales must be
discontinued being referred to as a "Blackout Period").
The Company has agreed that if the Selling Stockholders
give notice to the Company of their intention to sell
Common Stock (the "Intended Sale Notice") during a
Blackout Period, and if such Selling Stockholders sell
any shares of Common Stock on the first business day
immediately following a Blackout Period, the Company will
pay to such Selling Stockholders the amount, if any, by
which the closing price of the Common Stock on the NYSE
on the date of the Intended Sale Notice exceeds the sales
price (before commissions) actually received by such
Selling Stockholders.
As of the date hereof, the only Selling Stockholder is Drug-
Sav. Pursuant to the Purchase Agreement, it is contemplated that
Drug-Sav will distribute its shares of Common Stock to its
shareholders (Michael W. Simpson, Gerald H. Simpson and Hatton W.
Simpson) or to a qualified liquidating trust by August 30, 1995
(Drug-Sav, together with its distributees, transferees, pledgees
(other than the Company), donees, or other successors in interest
(including, but not limited to, the Michael William Simpson Family
Limited Partnership, the Hatton William Simpson Family Limited
Partnership and/or the Gerald Hatton Simpson Family Limited
Partnership), offering Common Stock, the "Selling Stockholders").
If necessary, the identity of, and other information relating to,
any such additional Selling Stockholders will be set forth in a
Prospectus Supplement with respect hereto. None of the Selling
Stockholders has held any position or office or had any other
material relationship with the Company or any of its predecessors
or affiliates within the past three years except as a result of
the Purchase Agreement. As of the date of this Prospectus, Drug-Sav
beneficially owns 303,060 shares of Common Stock, which would have
represented approximately 0.95% of the outstanding Common Stock
on September 24, 1994. Because the Selling Stockholders may offer
pursuant to this Prospectus all or some part of the Common Stock
which they hold, and because the offering may or may not be an
underwritten offering on a firm commitment basis, no estimate can
be given as of the date hereof as to the number of shares of Common
Stock to be offered for sale by the Selling Stockholders or as to the
number of shares of Common Stock that will be held by the Selling
Stockholders upon termination of the offering. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
Any or all of the shares of Common Stock offered hereby may
be sold from time to time directly by the Selling Stockholders.
Alternatively, the Common Stock may from time to time be offered
by the Selling Stockholders to or through broker-dealers or
underwriters, who may act solely as agents or who may acquire
Common Stock as principals. The distribution of shares of the
Common Stock being offered by the Selling Stockholders may be
effected in one or more transactions that may take place through
the NYSE or in the over-the-counter market, including block
trades or ordinary broker's transactions, through privately
negotiated transactions, through an underwritten public offering
or through a combination of any such methods of sale, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Such prices
will be determined by the Selling Stockholders or by agreement
between the Selling Stockholders and their underwriters, broker-
dealers or agents. The Company will not receive any proceeds
from the sale of Common Stock by the Selling Stockholders.
The aggregate proceeds to the Selling Stockholders from the
sale of the Common Stock so offered will be the purchase price of
the Common Stock sold less the aggregate agents' commissions and
underwriters' discounts, if any, and other expenses of issuance
and distribution not borne by the Company. The Selling
Stockholders may pay usual and customary or specifically
negotiated underwriting discounts, concessions or commissions in
connection with such sales. The Selling Stockholders and such
broker-dealers, underwriters or agents that participate with the
Selling Stockholders in the distribution of the Common Stock may
be deemed to be underwriters under the Securities Act, and any
commissions received by them and any profit on the resale of the
Common Stock purchased by them might be deemed to be underwriting
discounts and commissions under the Securities Act. Those
persons who act as broker-dealers, underwriters or agents in
connection with the sale of the Common Stock will be selected by
the Selling Stockholders and may have other business
relationships with, and perform services for, the Company or its
affiliates in the ordinary course of business.
The Company has agreed to bear all expenses (other than
commissions or discounts of underwriters, broker-dealers or
agents, brokers' fees, state and local transfer taxes, and fees
and expenses of counsel or other advisors to the Selling
Stockholders) in connection with the registration of the Common
Stock being offered by the Selling Stockholders.
In order to comply with the securities laws of certain
states, if applicable, the shares of Common Stock offered hereby
will be sold in such jurisdictions only through registered or
licensed brokers-dealers. In certain states the Common Stock
offered hereby may not be sold unless the Common Stock has been
registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied
with.
At any time that a particular offer of Common Stock is made
by the Selling Stockholders, to the extent required, a Prospectus
Supplement will be distributed which will set forth the identity
of, and certain information relating to, the particular Selling
Stockholder who is offering the Common Stock, the number of
shares of Common Stock being offered and the terms thereof,
including the name or names of any underwriters, broker-dealers
or agents, any discounts, commissions or other items constituting
compensation from such Selling Stockholder and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be
passed upon by Robert E. Lewis, Esq., Vice President/General
Counsel of the Company.
EXPERTS
The consolidated financial statements and schedules of the
Company and subsidiaries as of January 29, 1994 and January 30,
1993, and for the years ended January 29, 1994, January 30, 1993
and February 1, 1992, included herein and elsewhere in the
Registration Statement of which this Prospectus is a part or
appearing in the Company's Annual Report on Form 10-K for the
period ended January 29, 1994, as amended by the Company's Annual
Report on Form 10-K/A for the period ended January 29, 1994, and
incorporated herein by reference, have been included or
incorporated by reference in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants,
included or incorporated by reference herein, and upon the
authority of that firm as experts in accounting and auditing.
With respect to the unaudited interim financial information
of Eckerd Corporation and subsidiaries for the periods ended July
30, 1994 and July 31, 1993, incorporated by reference herein, the
independent certified public accountants have reported that they
applied limited procedures in accordance with professional
standards for a review of such information. However, their
separate report included in the Eckerd Corporation and
subsidiaries' quarterly report on Form 10-Q for the quarter ended
July 30, 1994, and incorporated by reference herein, states that
they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of
reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied.
The accountants are not subject to the liability provisions of
section 11 of the Securities Act for their report on the
unaudited interim financial information because that report is
not a "report" or a "part" of the registration statement prepared
or certified by the accountants within the meaning of sections 7
and 11 of the Securities Act.
NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS
PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR 303,060 SHARES
MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS
AND ANY PROSPECTUS SUPPLEMENT ECKERD CORPORATION
DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES COMMON STOCK
OFFERED BY THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT OR
AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY _______________
JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE PROSPECTUS
SUCH OFFER OR SOLICITATION IN _______________
SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER
SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE
OF THIS PROSPECTUS OR ANY , 1994
PROSPECTUS SUPPLEMENT, OR THAT
THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SINCE
SUBSEQUENT TO SUCH DATES.
______________________
TABLE OF CONTENTS
PAGE
Available Information . 2
Incorporation of Certain
Information
by Reference . . . . . 3
The Company . . . . . . . 4
Risk Factors . . . . . . 5
Use of Proceeds . . . . . 8
Description of Certain
Indebtedness . . . . . . 9
Description of Capital Stock 14
Selling Stockholders . . 18
Plan of Distribution . . 18
Legal Matters . . . . . . 19
Experts . . . . . . . . . 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses expected
to be incurred in connection with the distribution of the
securities being registered. All of the amounts shown are
estimates except for the Securities and Exchange Commission
filing fee.
Securities and Exchange Commission filing fee $ 3,031
New York Stock Exchange listing fees . 1,500
Costs of printing and engraving . . . . 7,500
Legal fees and expenses . . . . . . . . 50,000
Accounting fees and expenses . . . . . 2,500
Miscellaneous . . . . . . . . . . . . . 469
Total . . . . . . . . . . . . . . $65,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law
permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for payments of
unlawful dividends or unlawful stock repurchases or redemptions,
or (iv) for any transaction from which the director derived an
improper personal benefit. The Registrant's Restated Certificate
of Incorporation contains such a provision.
Under Article VIII of the Registrant's Restated By-Laws as
currently in effect, as well as under Article SEVENTH of the
Registrant's Restated Certificate of Incorporation, each person
who is or was a director or officer of the Registrant, or who
serves or served any other enterprise or organization at the
request of the Registrant, shall be indemnified by the Registrant
to the full extent permitted by the Delaware General Corporation
Law.
Section 145 of the Delaware General Corporation Law provides
that a corporation may indemnify any person who, by reason of the
fact that such person is or was a director or officer of such
corporation, is made (or threatened to be made) a party to an
action other than one brought by or on behalf of the corporation,
against reasonable expenses (including attorneys' fees),
judgments, fines and settlement payments, 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 such corporation and, in
criminal actions, in addition, had no reasonable cause to believe
his conduct was unlawful. In the case of actions on behalf of the
corporation, indemnification may extend only to reasonable
expenses (including attorneys' fees) and only 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,
provided that no such indemnification is permitted in respect of
any claim as to which such person is adjudged liable to such
corporation except to the extent that a court otherwise provides.
To the extent that such person has been successful in defending
any action (even one on behalf of the corporation), he is
entitled to indemnification for reasonable expenses (including
attorneys' fees).
The indemnification provided for by the Delaware General
Corporation Law is not exclusive of any other rights of
indemnification, and a corporation may maintain insurance against
liabilities for which indemnification is not expressly provided
by the Delaware General Corporation Law. The Registrant has
entered into agreements to indemnify its directors and officers
in addition to the indemnification provided for in the Restated
Certificate of Incorporation. These agreements, among other
things, indemnify the Registrant's directors and officers for
certain expenses (including attorneys' fees), judgments, fines
and settlement amounts incurred by such person in any action or
proceeding, including any action by or in the right of the
Registrant, on account of services as a director or officer of
the Registrant or as a director or officer of any subsidiary of
the Registrant, or as a director or officer of any other company
or enterprise to which the person provides services at the
request of the Registrant.
The Registrant maintains a liability insurance policy
providing coverage for its directors and officers in an amount up
to an aggregate limit of $10,000,000 per policy year.
The designees of the Merrill Lynch Investors who serve on
the Company's board of directors also have certain rights to
indemnification by ML & Co. and the Merrill Lynch Investors for
liabilities incurred in connection with actions taken by them in
their capacity as directors of the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
3.1(i) Restated Certificate of Incorporation of the
Registrant (incorporated by reference to
Exhibit 3.1(i) to the Registration Statement
on Form S-3 of the Registrant (No. 33-
50223)).
3.1(ii) Amended and Restated By-laws of the
Registrant (incorporated by reference to
Exhibit 3.2(ii) to the Registration Statement
on Form S-3 of the Registrant (No. 33-
50223)).
4.1 Form of certificate for the Registrant's Common
Stock, par value $.01 per share (incorporated by
reference to Exhibit 4.1 to the Registration
Statement on Form S-2 of the Registrant (No. 33-
64906)).
4.2 Credit Agreement dated as of June 14, 1993, as
amended and restated as of August 3, 1994
(incorporated by reference to Exhibit 10.1 of the
Form 10-Q of the Registrant dated July 30, 1994
(File No. 1-4844)).
4.3 Indenture dated as of November 1, 1993 between
the Registrant and State Street Bank and Trust
Company of Connecticut, National Association, as
Trustee (incorporated by reference to Exhibits
4.01 and 4.02 of the Form 8-K of the Registrant
dated October 26, 1993 (File No. 1-4844)).
4.4 Indenture dated as of May 1, 1986 by and between
the Company and Mellon Bank, N.A. as trustee,
relating to the 11 1/8% Subordinated Debentures
due 2001 (incorporated by reference to the
Registration Statement on Form S-1 of Eckerd
Holdings, Inc. (No. 33-4576)).
5.1 Opinion and consent of Robert E. Lewis, Esq.
15.1 Letter of KPMG Peat Marwick LLP dated October 31,
1994 re Unaudited Interim Financial Information.
15.2 Letter of KPMG Peat Marwick LLP dated October 31,
1994 re Unaudited Interim Financial Information.
23.1 Consent of KPMG Peat Marwick LLP dated October 31,
1994.
23.2 Consent of Robert E. Lewis, Esq. as to the
validity of the Common Stock being registered
(included in Exhibit 5.1 hereto).
24.1 Power of Attorney (included in signature pages
hereto).
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this registration statement to include any
material information with respect to the plan of
distribution not previously disclosed in the
registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered
therein, and the offering of such securities at
that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the city of Largo, State of Florida on October 31, 1994.
ECKERD CORPORATION
By /s/ Samuel G. Wright
______________________
Samuel G. Wright
Senior Vice President/Finance
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints each of James M.
Santo, Esq. and Robert E. Lewis, Esq., his true and lawful
attorney-in-fact and agent, with full power of substitution and
revocation, for him and in his name, place and stead, in any and
all capacities (until revoked in writing), to sign any and all
amendments (including post-effective amendments) to this
Registration Statement and to file the same with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, full power and authority to do and perform
each and every act and thing requisite and necessary to be done
as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or their substitutes may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the date indicated:
Signature Titles Date
/s/ Stewart Turley Chairman October 31, 1994
________________________ of the Board and Chief
Stewart Turley Executive Officer
/s/ Francis A. Newman President, October 31, 1994
_________________________ Chief Operating
Francis A. Newman Officer and Director
/s/ John W. Boyle Vice Chairman of October 31, 1994
__________________________ the Board, Chief Finan-
John W. Boyle cial Officer and Director
(Chief Financial Officer)
/s/ Samuel G. Wright Senior Vice President/ October 31, 1994
__________________________ Finance (Chief Account-
Samuel G. Wright ing Officer)
/s/ James T. Doluisio Director October 31, 1994
__________________________
James T. Doluisio
/s/ Donald F. Dunn Director October 31, 1994
__________________________
Donald F. Dunn
/s/ Albert J. Fitzgibbons, III Director October 31, 1994
___________________________
Albert J. Fitzgibbons, III
/s/ Lewis W. Lehr Director October 31, 1994
__________________________
Lewis W. Lehr
/s/ Rupinder S. Sidhu Director October 31, 1994
__________________________
Rupinder S. Sidhu
/s/ Alexis P. Michas Director October 31, 1994
__________________________
Alexis P. Michas
EXHIBIT INDEX
3.1(i) Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1(i) to the
Registration Statement on Form S-3 of the Registrant
(No. 33-50223)).
3.1(ii) Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 3.2(ii) to the
Registration Statement on Form S-3 of the Registrant
(No. 33-50223)).
4.1 Form of certificate for the Registrant's Common Stock,
par value $.01 per share (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-2
of the Registrant (No. 33-64906)).
4.2 Credit Agreement dated as of June 14, 1993, as amended
and restated as of August 3, 1994 (incorporated by
reference to Exhibit 10.1 of the Form 10-Q of the
Registrant dated July 30, 1994 (File No. 1-4844)).
4.3 Indenture dated as of November 1, 1993 between the
Registrant and State Street Bank and Trust Company of
Connecticut, National Association, as Trustee
(incorporated by reference to Exhibits 4.01 and 4.02 of
the Form 8-K of the Registrant dated October 26, 1993
(File No. 1-4844)).
4.4 Indenture dated as of May 1, 1986 by and between the
Company and Mellon Bank, N.A. as trustee, relating to
the 11 1/8% Subordinated Debentures due 2001
(incorporated by reference to the Registration
Statement on Form S-1 of Eckerd Holdings, Inc. (No.
33-4576)).
5.1 Opinion and consent of Robert E. Lewis, Esq.
15.1 Letter of KPMG Peat Marwick LLP dated October 31, 1994
re Unaudited Interim Financial Information.
15.2 Letter of KPMG Peat Marwick LLP dated October 31, 1994
re Unaudited Interim Financial Information.
23.1 Consent of KPMG Peat Marwick LLP dated October 31,
1994.
23.2 Consent of Robert E. Lewis, Esq. as to the validity of
the Common Stock being registered (included in Exhibit
5.1 hereto).
24.1 Power of Attorney (included in signature pages hereto).
Exhibit 5.1
October 31, 1994
Eckerd Corporation
8333 Bryan Dairy Road
Largo, Florida 34647
Ladies and Gentlemen:
I am Vice President/General Counsel for Eckerd
Corporation, a Delaware corporation (the "Company"). I
am providing the opinions set forth herein in connection
with the preparation of a registration statement on Form
S-3 (the "Registration Statement") relating to the public
offering and sale of 303,060 shares (the "Shares") of the
Company's Common Stock, par value $.01 per share, owned
by S-3, Inc., d/b/a Drug-Sav Discount Drugstores ("Drug-
Sav"). The Registration Statement is being filed by the
Company in satisfaction of certain registration rights
granted to Drug-Sav pursuant to an Agreement of Purchase
and Sale dated as of August 23, 1994 between the Company
and Drug-Sav (the "Purchase Agreement").
This opinion is being delivered in accordance
with the requirements of Item 601(b)(5) of Regulation
S-K under the Securities Act of 1933, as amended (the
"Act").
In connection with this opinion, I and members
of my staff under my supervision, have examined originals
or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement filed
with the Securities and Exchange Commission (the
"Commission") on the date hereof under the Act; (ii) the
Purchase Agreement; (iii) the Company's Restated
Certificate of Incorporation, as in effect as of the
issue date of the Shares; (iv) the Company's Restated By-
laws, as in effect as of the issue date of the Shares;
(v) the resolutions of the Board of Directors of the
Company relating to, among other things, the issuance of
the Shares and the registration of the Shares under the
Act; (vi) the form of a specimen certificate representing
the Shares; and (vii) such other documents as I have
deemed necessary or appropriate as a basis for the
opinions set forth below. I and members of my staff
under my supervision have also examined originals or
copies, certified or otherwise identified to my
satisfaction, of such records of the Company and such
agreements, certificates of public officials,
certificates of officers or other representatives of the
Company and others, and such other documents,
certificates and records as I have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In my and my staff's examination, I have
assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all
documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as
certified or photostatic copies and the authenticity of
the originals of such latter documents. In making my
examination of documents executed by parties other than
the Company, I have assumed that such parties had the
power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or
other, and the execution and delivery by such parties of
such documents and the validity and binding effect
thereof. As to any facts material to the opinions
expressed herein which were not independently established
or verified, I have relied upon oral or written
statements and representations of officers and other
representatives of the Company and others.
I am admitted to practice law in the State of
Florida and I do not purport to be an expert on any law
other than the laws of the State of Florida and the laws
of the United States of America. Insofar as the opinions
contained herein relate to the general corporate law of
the State of Delaware, I have made such investigation of
such laws as I have deemed necessary as a basis for such
opinions.
Based upon and subject to the foregoing and
assuming the conformity of the certificates representing
the Shares to the form of the specimen thereof examined
by me and the due execution and delivery of such
certificates, I am of the opinion that, when issued and
delivered to Drug-Sav pursuant to the terms of the
Purchase Agreement, the Shares will be duly authorized,
validly issued, fully paid and non assessable.
I hereby consent to the use of my name in the
Registration Statement under the caption "Legal Matters"
and to the filing of this opinion as an Exhibit to the
Registration Statement. In giving such consent, I do not
admit that I come within the category of persons whose
consent is required under Section 7 of the Act or the
rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Robert E. Lewis
Robert E. Lewis
Exhibit 15.1
Eckerd Corporation
8333 Bryan Dairy Road
Largo, Florida 34647
Re: Registration Statement on Form
S-3 of Eckerd Corporation
Gentlemen:
With respect to the subject registration statement, we
acknowledge our awareness of the incorporation by
reference therein of our report dated June 8, 1994
related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933
(the "Act"), such report is not considered a part of a
registration statement prepared or certified by an
accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the
Act.
Very truly yours,
/s/KPMG Peat Marwick LLP
Tampa, Florida
October 31, 1994
Exhibit 15.2
Eckerd Corporation
8333 Bryan Dairy Road
Largo, Florida 34647
Re: Registration Statement on Form
S-3 of Eckerd Corporation
Gentlemen:
With respect to the subject registration statement, we
acknowledge our awareness of the incorporation by
reference therein of our report dated September 7, 1994
related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933
(the "Act"), such report is not considered a part of a
registration statement prepared or certified by an
accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the
Act.
Very truly yours,
/s/KPMG Peat Marwick LLP
Tampa, Florida
October 31, 1994
EXHIBIT 23.1
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
ECKERD CORPORATION AND SUBSIDIARIES:
We consent to the use of our audit reports dated March
18, 1994 on the consolidated financial statements and
related financial statement schedules of Eckerd
Corporation and Subsidiaries included in its Annual
Report on Form 10-K as of January 29, 1994 and January
30, 1993, and the fiscal years ended January 29, 1994,
January 30, 1993 and February 1, 1992, as amended by its
Annual Report on Form 10-K/A for such periods,
incorporated by reference into the Prospectus (the
"Prospectus"), which forms a part of the Registration
Statement on Form S-3 of the Company originally filed on
the date hereof, and to the reference to this Firm under
the heading "Experts" in the Prospectus.
/s/ KPMG PEAT MARWICK LLP
TAMPA, FLORIDA
October 31, 1994
