UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 28, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-1394
EDISON BROTHERS STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 43-0254900
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 N. Broadway, St. Louis, Missouri 63102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 331-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $1 per share New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of April 7, 1995:
Common Stock, $1 par value - $327,807,664
It is assumed for purposes of this calculation that the registrant has no
"affiliates". Information as to the shareholdings of directors of the
registrant is provided in the proxy statement for the 1995 annual meeting
of stockholders.
The number of shares outstanding of each of the registrant's classes of
common stock, as of April 7, 1995:
Common Stock, $1 par value - 22,037,490 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to stockholders for the fiscal year ended
January 28, 1995 ("1994 Annual Report") are incorporated by reference
into Parts I and II.
Portions of the proxy statement for the 1995 annual stockholders meeting
are incorporated by reference into Part III.
PART I
Item 1. BUSINESS
Edison Brothers Stores, Inc. (the "Company") is a leading specialty
retailer of fashion apparel and footwear operating more than 2,700
stores in all fifty of the United States, Puerto Rico, the Virgin
Islands, Mexico, and Canada. The Company conducts its operations through
subsidiaries and divisions in two business segments: apparel and
footwear. See Note 4 of Notes to Consolidated Financial Statements in the
1994 Annual Report for information with respect to the total assets and the
contribution to net sales and earnings from operations of the Company's
principal business segments. Both the apparel and the footwear segments
feature primarily private label merchandise in the moderate price range.
The stores operated by the Company are located primarily in shopping malls.
During 1994 the Company opened 110 stores including 31 acquired by
purchase, and closed 215 stores. A brief description of the Company's
chains follows.
Apparel Segment
Edison Brothers' men's apparel chains and other operations include
J. Riggings, JW/Jeans West, Zeidler & Zeidler/Webster, Oaktree, Coda, Repp,
Ltd. Big & Tall, and Phoenix catalog operations. The women's-wear chains
include 5-7-9 Shops and Spirale.
J. Riggings focuses on providing updated traditional apparel to a broad age
group of 16 to 40 year-old men. Its mainstream merchandise and classic
store design are targeted at a more conservative customer. J. Riggings
operated 498 and 476 stores at the end of fiscal 1994 and 1993,
respectively.
The JW/Jeans West (JW) chain had 425 and 450 stores at the end of fiscal
1994 and 1993, respectively. JW stores are generally smaller than stores
in the Company's other menswear chains and are designed to maximize the
amount of apparel displayed on the sales floor. This chain targets young
men in the 14 to 25 year-old age group.
The Zeidler & Zeidler/Webster (Zeidler & Zeidler) store group markets
upscale contemporary clothing for men. New stores being opened by this
group are using the Zeidler & Zeidler name. Zeidler & Zeidler had 152
and 164 stores at the end of fiscal 1994 and 1993, respectively.
Oaktree offers a mix of sportswear for 18 to 29 year-old men. Its larger
store size accommodates Oaktree's presentation on custom fixtures in a
modern setting. Oaktree operated 279 and 306 stores at the end of fiscal
1994 and 1993, respectively.
Coda presents branded and private label current fashion to 18 to 29 year-
old men. Coda's larger stores utilize a variety of merchandising
techniques, including visual displays and advanced sound systems. At the
end of fiscal 1994 and 1993 Coda operated 39 and 42 stores, respectively.
Repp, Ltd. Big & Tall (Repp) is a chain of 185 big and tall mens stores
up from 147 in 1993. Repp markets sportswear and clothing to men who are
6 foot 3 inches or taller or have a 44 inch or larger waist.
Phoenix Big & Tall is a catalog operation that markets sportswear and
clothing to big and tall men.
5-7-9 Shops primarily markets sportswear, dresses and accessories to the
small size junior customer. 5-7-9 Shops operated 363 and 393 stores at
the end of fiscal 1994 and 1993, respectively.
Footwear Segment
The Company's footwear chains include Bakers/Leeds, Precis, and The Wild
Pair.
The Bakers/Leeds stores, which are operated as a single chain, form the
company's third largest chain with 418 and 457 stores at the end of fiscal
1994 and 1993, respectively. Bakers/Leeds offers a wide variety of
popularly-priced fashion shoes and accessories to women and teenage girls.
Precis offers fashion footwear and accessories at reasonable prices in a
very high-style setting. Precis operated 29 and 28 stores at the end of
fiscal 1994 and 1993, respectively.
The Wild Pair offers advanced shoe fashion for young women and men and a
selection of trend setting accessories. The Wild Pair operated 234 and
266 stores at the end of fiscal 1994 and 1993, respectively.
Entertainment
Edison Brothers Entertainment (EBE) includes Time-Out, Space Port, Party
Zone and Exhilarama family entertainment centers, Dave & Buster's
restaurant/entertainment complexes and Horizon, which is involved with the
marketing of new interactive entertainment technologies. Horizon provides
high tech interactive attractions to the corporate event market and other
chains in the Entertainment division.
Edison Brothers Mall Entertainment operated 129 primarily mall-based Time-
Out, Space Port, and Party Zone family amusement centers and 5 larger mall-
based Exhilarama family entertainment centers at the end of fiscal 1994.
The centers are located throughout the United States and Puerto Rico.
Dave & Buster's operated 3 restaurant/entertainment complexes in Texas,
1 in Georgia, and 1 in Pennsylvania at the end of fiscal 1994. On
February 1, 1995, the board of directors of the Company authorized a
distribution to the Company's stockholders of its entire majority interest
in its Dave & Buster's division. The distribution is expected to take
place later this spring.
Additional information related to this item is set forth under the captions
"To Our Shareholders" and under "Note 4: Business Segments" and "Note 16:
Subsequent Events" of the Notes to Consolidated Financial Statements in
the 1994 Annual Report. Such information is incorporated herein by
reference.
Operations, Inventory and Distribution
The specialty retailing business is subject to fluctuations resulting from
changes in customer preferences dictated by fashion and season. This is
especially true for stores emphasizing fashion over classic basics. In
addition, merchandise usually must be ordered a significant time in advance
of the season and sometimes before fashion trends are evidenced by customer
purchases. It has been the general practice of the Company and other
apparel retailers to build up inventory levels prior to peak selling
seasons, which further increases the vulnerability of the Company to demand
and pricing shifts and to errors in selection and timing of the purchases
of merchandise.
Substantially all of the Company's merchandise information, accounting, and
financial control systems are operated centrally from the Company's
headquarters in St. Louis, Missouri. Daily polling of activity from the
point-of-sale registers in each store provides current data for updated
sales, merchandise, and bank activity reporting. Integration of this data
with the Company's merchandise system enables each chain's team of
merchandise controllers and distributors to monitor performance and
replenish and control inventory.
The Company must carry large amounts of inventory to meet the rapid
delivery requirements of its stores. The Company operates four main
distribution centers located in Washington, Missouri; Rialto, California;
Rome, Georgia; and Princeton, Indiana. The centers are receiving points
for merchandise from foreign and domestic suppliers and coordinate
distribution of individual shipments via common carrier to the stores
serviced by the center.
Purchasing
The Company purchases approximately three-quarters of its merchandise
from foreign suppliers and the balance from domestic suppliers. The
Company has no long-term purchase commitments with any of its suppliers,
and is not dependent on any one supplier. The Company's importing
operations are subject to the contingencies generally associated with
foreign operations, including fluctuations in currency values, customs
duty increases, quota limitations and any other foreign development that
could cause a disruption of supply. The Company opened international
buying offices in Taiwan in 1987; in Hong Kong in 1989; in Dalian, China
and Indonesia in 1991; and in Korea, Honduras, and the Philippines in
1993, giving it improved control over overseas sourcing.
The Company does not manufacture any merchandise, but it markets most of
its merchandise under private labels. Each chain of stores maintains a
staff of buyers, and buying decisions are made at the chain level.
Competition
The apparel and footwear retailing industries are highly competitive. The
Company's stores are in competition with numerous other independent
retailers, department stores, mail order companies and discount and
manufacturer's outlets, many of which have greater sales, assets and
financial resources than the Company. Because the Company's stores are
primarily in regional shopping malls, each faces several nearby
competitors. In competing for customers, the Company emphasizes the
fashion orientation of its merchandise, customer service, store appearance
and price.
Employees
During fiscal 1994, the Company employed an average of 23,400 persons with
approximately 21,900 of them engaged in retail operations at the store
level (approximately 30% full-time and 70% part-time). In addition, a
substantial number of temporary employees are hired during peak selling
seasons. The Company believes its employee benefits package is competitive
with those offered in the industry. The Company's employees are virtually
all non-union with minor exceptions in certain foreign operations.
Seasonal Business
The Company experiences a significant peak in sales during the Christmas
selling season. Sales during that season accounted for 16.8% of total
sales during 1994 compared with 17.3% in 1993.
The Company's inventory is generally increased significantly prior to this
peak selling period. The increase may be financed in part by short-term
bank loans and commercial paper borrowings.
Trademarks
The Company holds a number of trademarks covering its products. The
Company believes that the loss of any of these trademarks would not have a
material effect on the Company's business.
Item 2. PROPERTIES
Stores are located nationwide, and most are leased with initial terms
generally from ten to twenty years. The rentals under most leases are
based upon a percentage of sales with a provision for a minimum annual
rental. Many of the leases provide for additional payments for real estate
taxes and other items. The stores generally range in size from 1,300 to
3,000 square feet. The Company owns three locations containing its Dave &
Buster's restaurant/entertainment complexes, two in Texas and one in
Georgia, and leases one Dave & Buster's location in Texas and one in
Pennsylvania. The complexes range in size from 25,000 to 70,300 square
feet. Subsequent to year end 1994, the board of directors of the Company
authorized a distribution to its stockholders of its entire majority
interest in its Dave & Buster's division.
The Company-owned headquarters building in St. Louis, Missouri, was
completed in 1985 and is the home office for all divisions. The building
contains approximately 500,000 square feet, a portion of which the Company
leases to others. The Rialto, California and Princeton, Indiana
distribution centers are owned by the Company. The distribution centers in
Washington, Missouri and in Rome, Georgia are operated under long term
lease arrangements. The Rialto, Washington, and Rome centers service
primarily the apparel segment while Princeton services primarily the
footwear segment. The Company also operates a small distribution center in
Georgia to service its catalog operations.
Item 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter.
<TABLE>
Item 4a. EXECUTIVE OFFICERS OF THE REGISTRANT
<CAPTION>
Position in the Company <F1>
Name Age Title Term
<S> <C> <C> <C>
Lester D. Cherry 60 President of The Wild Pair Since 1986
David B. Cooper, Jr. 39 Director Since 1995
Executive Vice President and
Chief Financial Officer Since 1994
Peter A. Edison 39 Senior Executive Vice President
and Director of Corporate
Development Since 1995
President of Edison Big & Tall Since 1994
Executive Vice President
and Director of Corporate
Development 1992-1995
General Manager of Repp, Ltd.
Big & Tall 1991-1994
Director Since 1990
Vice President - Corporate
Development 1989-1992
President of Sacha London 1986-1990
Paul D. Eisen 40 President of Oaktree Since 1994
President and General Merchandise
Manager of Jeans West Since 1989
Michael J. Fine 43 President of 5-7-9 Shops Since 1994
Eric A. Freesmeier 42 Executive Vice President-
Human Resources Since 1992
Vice President-Human Resources 1986-1992
Michael H. Freund 55 Executive Vice President-
Administration Since 1992
Director Since 1984
Vice President - Administration 1982-1992
Andrew R. Halliday 41 President of Edison Brothers Mall
Entertainment Since 1990
Vice President and General Manager
of Sacha London 1987-1990
Frank C. Juarez 45 President and General Merchandise
Manager of J. Riggings Since 1990
President of Zeidler & Zeidler/
Webster 1994-1995
Vice President and General
Merchandise Manager of J. Riggings 1989-1990
Roger L. Koehnecke 50 Executive Vice President and
Chief Information Officer Since 1992
Vice President and Chief
Information Officer 1988-1992
Harry A. Looks 42 President of Edison Brothers
Stores International, Inc. Since 1989
General Manager of Fashion
Conspiracy 1988-1992
Karl W. Michner 47 Senior Executive Vice President Since 1995
Director Since 1989
President of Edison Menswear Group Since 1987
Alan D. Miller 42 Chairman of the Board, President
and Chief Executive Officer Since 1995
President of Edison Footwear Group 1993-1995
Director Since 1992
President of Bakers/Leeds/Precis 1991-1993
President of 5-7-9 Shops 1987-1991
Andrew E. Newman 50 Chairman of the Board 1987-1995
Director Since 1978
Alan A. Sachs 48 Executive Vice President and
General Counsel Since 1992
Vice President and General Counsel 1990-1992
Director Since 1990
Secretary Since 1987
Vice President-Law 1985-1990
Martin Sneider 52 President 1987-1995
Director Since 1978
Les Wagner 54 President of Bakers/Leeds Since 1993
General Merchandise Manager of
Bakers/Leeds 1989-1994
<FN>
<F1>Previous experience with other companies is as follows:
David B. Cooper, Jr. was Executive Vice President and Chief Financial
Officer of Del Monte Fresh Produce Company from 1993 to 1994, and
Treasurer of Dole Food Company, Inc. from 1986 to 1993.
Michael J. Fine was a Buyer for the Payless Shoe division of May
Company from 1992 to 1994 and President of John Douglas from 1989 to
1992.
</FN>
</TABLE>
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
Information required by Item 5 is contained in "Note 6: Common Stock"
of the Notes to Consolidated Financial Statements and under the
caption "Quarterly Information" in the 1994 Annual Report. Such
information is incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
Information required by Item 6 is contained under the caption "Five-
Year Financial Summary" in the 1994 Annual Report. Such information
is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required by Item 7 is presented under the captions "To
Our Shareholders" and "Management's Discussion and Analysis" in the
1994 Annual Report. Such information is incorporated herein by
reference. In addition, the Company reported comparable store sales
decreases of 3.3% and 8.4% in 1994 and 1993, respectively, and an
increase of 3.8% in 1992.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by Item 8, as listed below, is included in the
1994 Annual Report. Such information is incorporated herein by
reference.
Consolidated Statements of Income - fiscal years 1994, 1993, and 1992
Consolidated Balance Sheets - 1994 and 1993 fiscal year-ends
Consolidated Statements of Cash Flows - fiscal years 1994, 1993,
and 1992
Consolidated Statements of Common Stockholders' Equity - fiscal years
1994, 1993, and 1992
Notes to Consolidated Financial Statements
Quarterly Information
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding nominees for director as set forth under the
caption "Election of Directors" in the proxy statement for the 1995
annual stockholders' meeting is incorporated by reference.
Information regarding executive officers is included as Item 4a
hereof.
Information regarding the filing of reports required by Section 16(a)
of the Securities Exchange Act as set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" in
the proxy statement for the 1995 annual stockholders' meeting is
incorporated by reference.
Item 11. EXECUTIVE COMPENSATION
Information regarding executive compensation, except for the sections
titled "Reports of the Compensation Committees" and "Stock Price
Performance" as set forth under the caption "Executive Compensation",
and information regarding compensation of directors under the caption
"Election of Directors" in the proxy statement for the 1995 annual
stockholders meeting is incorporated by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners
and management as set forth under the captions "Election of
Directors" and "Security Ownership of Certain Beneficial Owners and
Management" in the proxy statement for the 1995 annual stockholders
meeting is incorporated by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions to be reported under this item.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report.
(a) (3) Listing of exhibits:
<TABLE>
<CAPTION>
Exhibit No. Exhibit No.
<S> <C> <C>
3(a) Bylaws of the Company, as amended February 21, 1995. EX-3.a
3(b) The Company's Certificate of Incorporation, as
amended June 28, 1990, was filed as an Exhibit to
the Company's annual report on Form 10-K for the
year ended February 2, 1991, and is incorporated
herein by reference.
4(a) Rights Agreement dated as of January 26, 1988, and
amendments thereto dated November 30, 1989 and
September 29, 1992, between Edison Brothers Stores,
Inc. and Mellon Securities Trust Company, as Rights
Agent, were filed as Exhibits 1 to the Company's
current reports on Form 8-K dated February 17, 1988,
December 11, 1989, and October 28, 1992,
respectively (file 1-1394), and are incorporated
herein by reference.
4(b) Note Agreements and Senior Notes, dated March 1,
1993, between Edison Brothers Stores, Inc. and a
number of institutional lenders relating to $150
million of unsecured debt were filed as an Exhibit
to the Company's annual report on Form 10-K for the
year ended January 30, 1993, and are incorporated
herein by reference.
4(c) Amendment Agreements, dated as of January 15, 1994,
and February 1, 1994, amending the Note Agreements
dated March 1, 1993 between Edison Brothers Stores,
Inc. and a number of institutional lenders relating
to $150 million of unsecured debt were filed as
Exhibits to the Company's annual report on Form 10-K
for the year ended January 29, 1994, and are
incorporated herein by reference.
4(d) Amendment Agreement, dated as of April 1, 1995, EX-4.d
amending the Note Agreements dated March 1, 1993,
as amended January 15, 1994 and February 1, 1994,
between Edison Brothers Stores, Inc. and a number
of institutional lenders relating to $150 million of
unsecured debt.
10(a) Form of Indemnification Agreement between the
Company and each of its directors was filed as
Exhibit 10 (b) to the Company's annual report on
Form 10-K for the year ended January 3, 1987
(file 1-1394), and is incorporated herein by
reference.
10(b) Form of Termination Agreement entered into by the EX-10.b
Company with Alan D. Miller, Chairman of the Board
President and Chief Executive Officer of the Company.
10(c) Form of Termination Agreement entered into by the
Company with other executive officers of the Company
was filed as Exhibit 10(b) to the Company's annual
report on Form 10-K for the year ended February 3,
1990 (file 1-1394), and is incorporated herein by
reference.
10(d) The Edison Brothers Stores, Inc. 1992 Stock Option
Plan, as amended March 3, 1994, was filed as an
Exhibit to the Company's annual report on Form 10-K
for the year ended January 29, 1994, and is
incorporated herein by reference.
10(e) The Edison Brothers Stores, Inc. 1986 Stock Option
Plan, as amended April 27, 1987 and March 3, 1994,
was filed as an Exhibit to the Company's annual report
on Form 10-K for the year ended January 29, 1994, and
is incorporated herein by reference.
10(f) The Edison Brothers Stores, Inc. 1982 Incentive
Stock Option Plan, as amended effective October 25,
1983, January 28, 1986 and March 3, 1986, is
incorporated by reference from the Company's
Registration Statement on Form S-8 (No. 2-84838)
filed with the Commission.
10(g) Non-Qualified Retirement Plan for Outside Directors
is described under the caption "Election of
Directors" in the proxy statement for the Company's
1995 annual stockholders meeting, which description
is incorporated herein by reference.
11 Computation of per share earnings EX-11
13 1994 Annual Report to Stockholders EX-13
21 Subsidiaries EX-21
23 Consent of Independent Auditors EX-23
27 Financial Data Schedule EX-27
</TABLE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(continued)
(b) There were no reports on Form 8-K filed during the quarter.
(c) Exhibits:
The response to this portion of Item 14 is submitted as
a separate section of this report.
(d) Financial statement schedules:
The response to this portion of Item 14 is submitted as
a separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
EDISON BROTHERS STORES, INC.
(Registrant)
By /s/ Alan D. Miller 4/7/95 By /s/ David B. Cooper, Jr. 4/7/95
Chairman of the Board, (date) Executive Vice President (date)
President and Chief and Chief Financial Officer
Executive Officer
By /s/ Norman Gold 4/10/95
Vice President and (date)
Corporate Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following directors on behalf of the
registrant on the dates indicated.
By /s/David B. Cooper, Jr. 4/7/95 By /s/ Julian I. Edison 4/10/95
(date) (date)
See Page 14a
By /s/ Peter A. Edison 4/7/95 Jane Evans (date)
(date)
By /s/ Michael H. Freund 4/10/95 By /s/ Karl W. Michner 4/10/95
(date) (date)
By /s/ Alan D. Miller 4/7/95 By /s/ Andrew E. Newman 4/10/95
(date) (date)
By /s/ Eric P. Newman 4/10/95 By /s/ Alan A. Sachs 4/7/95
(date) (date)
See Page 14b
Craig D. Schnuck (date) By /s/ Martin Sneider 4/6/95
(date)
See Page 14c
Robert W. Staley (date)
SIGNATURES (continued)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following director on behalf of the
registrant and on the date indicated.
By /s/ Jane Evans 4/11/95
(date)
SIGNATURES (continued)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following director on behalf of the
registrant and on the date indicated.
By /s/ Craig D. Schnuck 4/10/95
(date)
SIGNATURES (continued)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following director on behalf of the
registrant and on the date indicated.
By /s/ Robert W. Staley 4/10/95
(date)
ANNUAL REPORT ON FORM 10-K
ITEM 14(a) (1) and (2) and ITEM 14(d)
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
YEAR ENDED JANUARY 28, 1995
EDISON BROTHERS STORES, INC.
ST. LOUIS, MISSOURI
FORM 10-K - ITEM 14(a) (1) and (2) and Item 14(d)
EDISON BROTHERS STORES, INC. AND SUBSIDIARIES
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES
The following consolidated financial statements of Edison Brothers Stores,
Inc. and subsidiaries, included in the 1994 annual report of the registrant
to its stockholders, are incorporated by reference in Item 8:
Consolidated Statements of Income - fiscal years 1994, 1993, and 1992
Consolidated Balance Sheets - 1994 and 1993 fiscal year-ends
Consolidated Statements of Cash Flows - fiscal years 1994, 1993, and 1992
Consolidated Statements of Common Stockholders' Equity - fiscal years
1994, 1993, and 1992
Notes to consolidated financial statements
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions, or are inapplicable, and therefore have been
omitted.
Individual financial statements of the registrant have been omitted as the
registrant is primarily an operating company and all subsidiaries included
in the consolidated financial statements filed, in the aggregate, do not
have minority equity interests and/or indebtedness to any person other than
the registrant or its consolidated subsidiaries in amounts which together
(excepting indebtedness incurred in the ordinary course of business which
is not overdue and matures within one year from the date of its creation,
whether or not evidenced by securities, and indebtedness of subsidiaries
which is collateralized by the registrant by guarantee, pledge, assignment,
or otherwise) exceed five percent of the total assets as shown by the most
recent year-end consolidated balance sheet.
EDISON BROTHERS STORES, INC.
____________________
BY-LAWS
____________________
ARTICLE I.
OFFICES
SECTION 1. Registered Office in Delaware. The registered office of the
Corporation in the State of Delaware shall be in the City of Dover, County
of Kent.
SECTION 2. Other Offices. The principal executive offices of the
Corporation shall be in St. Louis, Missouri. The Corporation may also have
offices in such other places as the Board of Directors may from time to
time determine or the business of the Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of the stockholders shall
be held at the executive offices of the Corporation in St. Louis, Missouri.
SECTION 2. Annual Meetings. An annual meeting of the stockholders, for
the election of directors and for the transaction of such other business as
may properly come before the meeting, shall be held on the second Wednesday
in June of each year at 11:00 A.M., Central Time, or on such other date or
at such other time as the Board of Directors may designate.
Written notice of an annual meeting of stockholders, stating the place,
date and hour of the meeting, shall be mailed to each stockholder entitled
to vote thereat, at such address as appears on the records of the
Corporation, not less than ten nor more than sixty days prior to the date
of the meeting.
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (b) otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a stockholder. For
business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than sixty days prior to the meeting; provided,
however, that in the event that less than seventy days' notice or prior
public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received
not later than the close of business on the tenth day following the date on
which such notice of the date of the annual meeting was mailed or such
public disclosure was made. A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the
annual meeting (a) a brief description of the business desired to be
brought before the annual meeting, (b) the name and address, as they appear
on the Corporation's books, of the stockholder proposing such business,
(c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the By-laws to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2. The presiding
officer of an annual meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting in accordance with the
provisions of this Section 2, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before
the meeting shall not be transacted.
SECTION 3. Special Meetings. Except as otherwise required by law and
subject to the rights of the holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation,
special meetings of the stockholders may be called only by the Chairman of
the Board, the President, or the Board of Directors pursuant to a
resolution approved by a majority of the entire Board of Directors.
Written notice of a special meeting of the stockholders, stating the
place, date and hour of the meeting, and the purpose or purposes for which
the meeting is called, shall be mailed to each stockholder entitled to vote
thereat, at such address as appears on the records of the Corporation, not
less than ten nor more than sixty days prior to the date of the meeting.
The business transacted at any special meeting of the stockholders shall
be confined to the purpose or purposes stated in the call.
SECTION 4. Organization. Each meeting of the stockholders shall be
presided over by the Chairman of the Board, or, in the absence of the
Chairman, by the President; if neither is present, the meeting shall be
presided over by a chairman to be chosen at the meeting. The Secretary of
the Corporation shall act as secretary of the meeting; if he is not
present, the secretary of the meeting shall be such person as the presiding
officer appoints.
SECTION 5. Voting. At each meeting of the stockholders, each
stockholder shall have one vote for each share of stock having voting power
registered in his name on the books of the Corporation. Each stockholder
having the right to vote may vote in person or by proxy appointed either by
an instrument in writing or by a transmission permitted by
Section 212(c)(2) of the Delaware General Corporation Law subscribed or
transmitted, as the case may be, by such stockholder or by his authorized
agent, except that no proxy shall be voted after three years from its date
unless such proxy provides for a longer period.
SECTION 6. Quorum. At all meetings of the stockholders, the presence,
in person or by proxy, of the holders of record of a majority of the shares
issued and outstanding and entitled to vote thereat shall constitute a
quorum for the transaction of business, except as otherwise provided by
law, by the Certificate of Incorporation or by these By-Laws. In the
absence of a quorum, the holders of record of a majority of the shares
present in person or by proxy and entitled to vote at the meeting may
adjourn the meeting from time to time until a quorum is present. No notice
need be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless the
adjournment is for more than thirty days or a new record date is fixed for
the adjourned meeting, in which event a notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote thereat. At
any such adjourned meeting at which a quorum is present, any business may
be transacted that might have been transacted at the meeting as originally
called.
SECTION 7. Vote Required for Action. At each meeting of the
stockholders, if a quorum is present, the affirmative vote of the holders
of a majority of the shares represented in person or by proxy and entitled
to vote shall decide all matters brought before the meeting, except as
otherwise provided by law, by the Certificate of Incorporation or by these
By-Laws.
SECTION 8. List of Stockholders. A complete list of the stockholders
entitled to vote at any meeting of stockholders, arranged in alphabetical
order and showing the address of each stockholder and the number of shares
registered in his name, shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten days prior to the meeting at
the place where the meeting is to be held. The list shall also be kept at
the place of the meeting during the whole time thereof and shall be open to
inspection by any stockholder who is present.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed by the Board of Directors. Except as otherwise provided
by law, by the Certificate of Incorporation or by these By-Laws, the Board
of Directors may exercise all powers and do all such acts and things as may
be exercised or done by the Corporation.
SECTION 2. Number, Election, Term of Office and Qualification. Unless
and until changed by amendment to this By-Law, the number of directors
constituting the Board of Directors shall be thirteen [changed, effective
June 14, 1995, to "twelve"]; provided, however, that if and whenever by the
terms and provisions of the Certificate of Incorporation the holders of any
class of stock other than the common stock shall be entitled to elect
additional directors, the number of directors shall be increased in
accordance with the terms and provisions of the Certificate of
Incorporation; and if and whenever the common stock shall become revested
with the exclusive voting right for the election of directors, the number
of directors shall be reduced by the number of additional directors chosen
by the holders of such other class of stock. Directors need not be
stockholders. All elections of directors by the holders of the common
stock shall be by a plurality of the votes cast. Except as otherwise
provided in this Article III, the directors to be chosen by the holders of
the common stock shall be elected at the annual meeting of the
stockholders. Each such director shall continue in office until the annual
meeting of the stockholders held next after his election and until his
successor shall have been elected and shall qualify, or until his earlier
resignation or removal. The directors, if any, to be chosen by the holders
of any class of stock other than the common stock shall be elected in the
manner, and their tenure of office shall be limited, as set forth in the
Certificate of Incorporation. No person shall be eligible for election as
a director if such person shall have attained the age of seventy, unless
such person is or was an employee of the Corporation and is eligible to
receive or is receiving pension benefits under the Edison Brothers Stores
Pension Plan or any successor or similar plan then in effect.
Subject to the rights of holders of any class or series of stock having
a preference over the common stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the Board of
Directors or a committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of directors generally.
However, any stockholder entitled to vote in the election of directors
generally may nominate one or more persons for election as directors at a
meeting only if the stockholder has given timely notice in writing to the
Secretary of the Corporation of such stockholder's intent to make such
nomination or nominations. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of
the Corporation not later than (i) with respect to an election to be held
at an annual meeting of stockholders, ninety days prior to the anniversary
date of the immediately preceding annual meeting, and (ii) with respect to
an election to be held at a special meeting of stockholders for the
election of directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to stockholders. Each
such notice shall set forth: (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominee been
nominated by the Board of Directors; and (e) the consent of each nominee to
serve as a director of the Corporation, if so elected. The presiding
officer of the meeting shall refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
SECTION 3. Resignation. Any director may resign at any time by written
notice to the Corporation, addressed to the attention of the Chairman of
the Board, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect on receipt thereof.
SECTION 4. Vacancies. If the position of any director elected, or
entitled to be elected, by the holders of the common stock becomes vacant
by reason of death, resignation, removal, increase in the number of
directors or otherwise, such vacancy may be filled by the vote of a
majority of the remaining directors elected, or entitled to be elected, by
the holders of the common stock, though less than a quorum. If the
position of any director elected, or entitled to be elected, by the holders
of stock other than the common stock becomes vacant by reason of death,
resignation, removal from office (otherwise than by reason of the revesting
in the common stock of the exclusive voting right for the election of
directors), or otherwise, such vacancy may be filled by the vote of a
majority of the remaining directors elected, or entitled to be elected, by
the holders of such stock other than the common stock, though less than a
quorum.
SECTION 5. Annual and Regular Meetings. As soon as practicable after
the annual meeting of the stockholders in each year, an annual meeting of
the Board of Directors shall be held for the election of officers and for
the transaction of such other business as may properly come before the
meeting.
Annual and regular meetings of the Board of Directors may be held at
such times and places (within or without the State of Delaware) as the
Board may from time to time determine. No notice of any such meeting need
be given.
SECTION 6. Special Meetings. A special meeting of the Board of
Directors may be called at any time by the Chairman of the Board or by the
President, and shall be called by the Chairman, the President or the
Secretary upon the written request of two directors. The person calling
such meeting shall fix the time and place therefor. Notice of such meeting
shall be given (a) by written notice delivered personally, sent by telegram
or mailed to each director at his business or home address or (b) by verbal
notice communicated personally or by telephone to each director. Such
notice shall be given at least six hours prior to the meeting, except that
if given by mail such notice shall be given at least two days prior to the
meeting. If mailed, such notice shall be deemed delivered when deposited
in the United States mail. If given by telegram, such notice shall be
deemed delivered when the telegram is delivered to the telegraph company.
No such notice need be given to any director if waived by such director in
writing, whether before or after such meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of the Board need be
specified in the notice or waiver of notice of such meeting.
SECTION 7. Quorum and Vote Required for Action. At all meetings of the
Board of Directors, the presence in person of a majority of the total
number of directors shall constitute a quorum for the transaction of
business, and, except as otherwise provided by law, by the Certificate of
Incorporation or by these By-Laws, if a quorum is present, the act of a
majority of the directors present shall be the act of the Board of
Directors. In the absence of a quorum, a majority of the directors
present, without notice other than by announcement at the meeting, may
adjourn the meeting to another date, time or place.
SECTION 8. Participation in a Meeting by Conference Telephone. A
member of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a
meeting pursuant to this section shall constitute presence in person at
such meeting.
SECTION 9. Written Consent in Lieu of Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the
Board or of such committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of
the Board or committee.
SECTION 10. Compensation. Directors, as such, may receive such
compensation for their services, including their services as members of
committees of the Board of Directors, as the Board of Directors may fix
from time to time.
ARTICLE IV
COMMITTEES OF THE BOARD OF DIRECTORS
SECTION 1. Designation and Powers. The Board of Directors may, by
resolution or resolutions adopted by a majority of the whole Board,
designate one or more committees, each committee to consist of two or more
directors, which, to the extent specified in such resolution or
resolutions, and except as otherwise provided by law, shall have and may
exercise all of the powers of the Board of Directors in the management of
the business and affairs of the Corporation.
The members of each committee shall be appointed by the Board of
Directors. Any member of a committee may resign at any time by written
notice addressed to the Chairman of the Board, the President or the
Secretary. Unless otherwise specified therein, such resignation shall take
effect on receipt thereof. Any member of a committee may be removed at any
time, either with or without cause, by a majority vote of the directors
then in office. Any committee designated pursuant to this Article IV may
at any time thereafter be dissolved by resolution of the Board of
Directors.
SECTION 2. Meetings. Each committee may provide for the holding of
regular meetings at such times and places (within or without the State of
Delaware) as it may from time to time determine. No notice of any such
meeting need be given. A special meeting of a committee may be called at
any time by the chairman of such committee (if one has been appointed) or
by the Chairman of the Board or by the President. The person calling such
meeting shall fix the time and place therefor. Notice of such meeting
shall be given (a) by written notice delivered personally, sent by telegram
or mailed to each member of the committee at his business or home address
or (b) by verbal notice communicated personally or by telephone to each
member of the committee. Such notice shall be given at least six hours
prior to the meeting, except that if given by mail such notice shall be
given at least two days prior to the meeting. If mailed, such notice shall
be deemed delivered when deposited in the United States mail. If given by
telegram, such notice shall be deemed delivered when the telegram is
delivered to the telegraph company. Such notice need not state the purpose
of the meeting. Each committee shall keep minutes of its proceedings and
shall report the same to the Board of Directors when so requested by the
Board. At any meeting of a committee, the presence in person of a majority
of the members of the committee shall constitute a quorum for the
transaction of business, and, except as otherwise provided by law, by the
Certificate of Incorporation or by these By-Laws, if a quorum is present,
the act of a majority of the members present shall be the act of such
committee. In the absence of a quorum, a majority of the members present,
without notice other than by announcement at the meeting, may adjourn the
meeting to another date, time or place.
ARTICLE V
NOTICES
SECTION 1. Waiver of Notice. Whenever any notice is required to be
given by law, by the Certificate of Incorporation or by these By-Laws, a
written waiver thereof signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to such notice. Neither the business to be transacted at, nor
the purpose of, any meeting need be specified in such waiver.
SECTION 2. Attendance at Meeting. Attendance of a person at any
meeting shall constitute a waiver of notice of such meeting, except when
the person attends such meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE VI
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be a Chairman
of the Board, a President, one or more Executive Vice Presidents, one or
more Vice Presidents, a Secretary, a Treasurer, and such other officers as
the Board of Directors may from time to time appoint. Any number of
offices may be held by the same person.
SECTION 2. Selection, Term of Office and Duties. All officers shall be
elected by the Board of Directors. Each officer shall hold office until
his successor is elected and qualified or until his earlier resignation or
removal. Each officer shall have such authority and perform such duties as
may be prescribed by these By-Laws or by the Board of Directors.
SECTION 3. Resignation. Any officer may resign at any time by written
notice to the Corporation, addressed to the attention of the Chairman of
the Board, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect on receipt thereof.
SECTION 4. Removal. Any officer may be removed at any time, either
with or without cause, by the affirmative vote of a majority of the
directors then in office.
SECTION 5. Vacancies. If an office becomes vacant by reason of death,
resignation, removal or otherwise, such vacancy may be filled by the Board
of Directors.
SECTION 6. Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board of Directors or such committee
thereof as the Board may designate.
SECTION 7. Chairman of the Board. The Chairman of the Board shall be
chosen from among the directors and shall, if present, preside at all
meetings of the stockholders and of the Board of Directors. Except where
by law the signature of the President is required, the Chairman of the
Board shall possess the same power as the President to sign all
certificates, contracts and other instruments of the Corporation. The
Chairman of the Board shall, subject to the direction and control of the
Board of Directors, have overall responsibility for the management and
supervision of the business and affairs of the Corporation. He shall, in
general, perform all duties incident to the office of the Chairman of the
Board and such other duties as from time to time may be assigned to him by
the Board of Directors.
SECTION 8. President. The President shall, subject to the direction
and control of the Board of Directors, share with the Chairman of the Board
responsibility for the management and supervision of the business and
affairs of the Corporation. He shall have the power to sign all
certificates, contracts and other instruments of the Corporation. In
general, the President shall perform all duties incident to the office of
President and shall have such other duties as the Board of Directors may
from time to time prescribe.
SECTION 9. Executive Vice Presidents and Vice Presidents. Each
Executive Vice President and Vice President shall have such duties as may
be assigned to him from time to time by the Board of Directors. In the
absence of both the Chairman of the Board and the President, or in the
event of their death or disability, the Executive Vice President having the
greatest seniority with the Corporation shall perform the duties and
exercise the powers of the Chairman of the Board and the President.
SECTION 10. Secretary and Assistant Secretaries. The Secretary shall
give, or cause to be given, notice of all meetings of the stockholders and
of the Board of Directors in accordance with these By-Laws, shall attend
all meetings of the stockholders and of the Board of Directors, and shall
record their proceedings in a book to be kept for that purpose. The
Secretary shall have custody of the corporate seal and affix the seal to
any instrument requiring it. He shall perform such other duties as the
Board of Directors may from time to time prescribe.
The Assistant Secretary or Assistant Secretaries, if any, shall, in the
absence or disability of the Secretary, or at his request, perform his
duties and exercise his powers and authority.
SECTION 11. Treasurer and Assistant Treasurers. The Treasurer shall
have custody of the funds and securities of the Corporation, shall keep
full and accurate accounts of receipts and disbursements in books belonging
to the Corporation, and shall deposit all money and other valuable effects
in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors. The Treasurer shall disburse
the funds of the Corporation as may be prescribed by the Board of
Directors, taking proper vouchers for such disbursements, and shall render
to the Board of Directors, at meetings of the Board of Directors or
whenever the Board may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. The Treasurer
shall perform such other duties as the Board of Directors may from time to
time prescribe.
The Assistant Treasurer or Assistant Treasurers, if any, shall, in the
absence or disability of the Treasurer, or at his request, perform his
duties and exercise his powers and authority.
SECTION 12. Delegation of Authority. Notwithstanding any provision
hereof, the Board of Directors may from time to time delegate the powers or
duties of any officer to any other officer.
SECTION 13. Surety Bonds. In the event that the Board of Directors
shall so require, any officer of the Corporation shall execute to the
Corporation a bond in such sum and with such surety or sureties as the
Board of Directors may direct, conditioned on the faithful performance of
his duties to the Corporation.
SECTION 14. Proxies. Subject to such limitations as the Board of
Directors may from time to time prescribe, the Chairman of the Board, the
President and any other officer of the Corporation so authorized by the
Chairman of the Board or the President shall have full power and authority
on behalf of the Corporation to attend, to vote at, and to waive notice of,
any meeting of stockholders of any other corporation, shares of stock of
which are owned by or stand in the name of the Corporation, to execute and
deliver proxies and actions in writing, and otherwise to exercise on behalf
of the Corporation any and all rights and powers incident to the ownership
of such shares.
ARTICLE VII
STOCK
SECTION 1. Certificates of Stock. The interest of each stockholder
shall be evidenced by a certificate or certificates representing shares of
stock of the Corporation which shall be in such form as the Board of
Directors may from time to time adopt. Each such certificate shall exhibit
the stockholder's name and the number of shares represented thereby, shall
be signed by the President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, shall be
sealed with the seal of the Corporation, and shall be countersigned and
registered in such manner, if any, as the Board of Directors may prescribe.
If such certificate is signed by a transfer agent of the Corporation, the
signature of any such officer and the seal of the Corporation on such
certificate may be facsimile. If any officer who has signed, or whose
facsimile signature has been used, on any such certificate shall cease to
be such officer of the Corporation before such certificate is issued and
delivered by the Corporation, such certificate may nevertheless be issued
and delivered with the same effect as if the person who signed such
certificate, or whose facsimile signature was used thereon, had not ceased
to be such officer. There shall be entered on the stock books of the
Corporation the number of each certificate issued, the number of shares
represented thereby, the name of the person to whom such certificate was
issued and the date of issuance thereof.
SECTION 2. Transfer of Stock. Transfers of shares of the stock of the
Corporation shall be made only on the books of the Corporation by the
holder of record thereof, or by his attorney thereunto duly authorized by a
power of attorney, upon the surrender of the certificate or certificates
for such shares properly endorsed, with such evidence of the authenticity
of such transfer, authorization and other matters as the Corporation or its
agents may reasonably require, and accompanied by all necessary federal and
state stock transfer stamps.
SECTION 3. Lost, Stolen or Destroyed Certificates. A certificate for
shares of stock of the Corporation may be issued in place of any
certificate alleged to have been lost, stolen or destroyed, but only upon
delivery to the Corporation of such evidence of loss, theft or destruction
as the Board of Directors may require, and, if the Board of Directors so
requires, of a bond of indemnity, in form and amount and with one or more
sureties satisfactory to the Board.
SECTION 4. Regulations, Transfer Agents and Registrars. The Board of
Directors may establish such other rules and regulations as it deems
appropriate concerning the issuance and transfer of certificates for shares
of the stock of the Corporation and may appoint one or more transfer agents
or registrars, or both.
SECTION 5. Record Date. (a) In order that the Corporation may
determine the stockholders entitled to notice of and to vote at any meeting
of stockholders, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record
date is adopted, and which record date shall not be more than sixty days
nor less than ten days before the date of such meeting. If no record date
is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of and to vote at a meeting of stockholders
shall be the close of business on the day next preceding the day on which
notice of the meeting is given. A determination of the stockholders of
record entitled to notice of and to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or the stockholders entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for
the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than sixty days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be the close of business on the date on which the Board of Directors
adopts the resolution relating thereto.
SECTION 6. Dividends and Reserves. Dividends shall be declared and
paid at such times as the Board of Directors may determine, provided that
no dividends shall be paid or declared contrary to applicable provisions of
law or of the Certificate of Incorporation. The Board of Directors may,
from time to time, set aside out of any funds of the Corporation available
for dividends such sum or sums as the Board, in its discretion, deems
proper as a reserve fund for working capital, or to meet contingencies, or
for repairing or maintaining the property of the Corporation, or for any
other purpose that the Board deems to be in the best interests of the
Corporation. The Board of Directors may modify or abolish any such reserve
at any time.
SECTION 7. Record Ownership. The Corporation shall be entitled to
treat the holder of record of any shares of stock of the Corporation as the
holder in fact thereof and shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have express or other notice thereof,
except as otherwise provided by law.
ARTICLE VIII
CORPORATE SEAL
The corporate seal of the Corporation shall be circular and shall have
inscribed thereon the name of the Corporation, the year of its
organization, and the words "Corporate Seal, Delaware." In all cases in
which the corporate seal is authorized to be used, it may be used by
causing it or a facsimile of it to be impressed, affixed, reproduced,
engraved or printed.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall be either a 52 or 53 week year
which shall commence on the Sunday occurring on or nearest to February 1
and shall end on the Saturday occurring on or nearest to the following
January 31.
ARTICLE X
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation, these By-
Laws may be amended or repealed at any regular meeting of the stockholders,
or at any special meeting thereof duly called for that purpose, at which a
quorum is present, by a majority vote of the shares represented and
entitled to vote at such meeting. Subject to the laws of the State of
Delaware, the Certificate of Incorporation and these By-Laws, the Board of
Directors may, by majority vote of those directors present at any meeting
of the Board at which a quorum is present, amend these By-Laws or adopt
such other By-Laws as in their judgment may be advisable for the regulation
of the conduct of the affairs of the Corporation.
</text
<TABLE>
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS
EDISON BROTHERS STORES, INC.
AND SUBSIDIARIES
<CAPTION>
1994 1993 1992
(restated) (restated)
(In thousands, except per share data)
<S> <C> <C> <C>
Income from continuing operations $ 20,470 $ 20,880 $ 70,421
Preferred stock dividends (10) (26) (29)
Income before cumulative effect of a
change in accounting principle 20,460 20,854 70,392
Cumulative effect on prior years'
income of the change in post-
retirement benefits accounting method (23,111)
Net income applicable to common stock $ 20,460 $ 20,854 $ 47,281
SIMPLE AND PRIMARY
Weighted average shares outstanding 22,007 21,998 21,744
Net effect of dilutive stock options
- based on the treasury method 90 206 374
TOTAL 22,097 22,204 22,118
Per common share amounts: Simple
Income before cumulative effect of a
change in accounting principle $ .93 $ .95 $ 3.24
Cumulative effect on prior years'
income of the change in post-
retirement benefits accounting
method (1.06)
Net Income applicable to common
stock $ .93 $ .95 $ 2.18
Per common share amounts: Primary
Income before cumulative effect of a
change in accounting principle $ .93 $ .94 $ 3.18
Cumulative effect on prior years'
income of the change in
postretirement benefits accounting
method (1.04)
Net Income applicable to common
stock $ .93 $ .94 $ 2.14
FULLY DILUTED
Weighted average shares outstanding 22,007 21,998 21,744
Net effect of dilutive stock options
- based on treasury method 120 225 390
TOTAL 22,127 22,223 22,134
Per common share amounts: Fully
diluted
Income before cumulative effect of a
change in accounting principle $ .92 $ .94 $ 3.18
Cumulative effect on prior years'
income of the change in
postretirement benefits accounting
method (1.04)
Net Income applicable to common
stock $ .92 $ .94 $ 2.14
</TABLE>
TO OUR SHAREHOLDERS:
Our 1994 sales were slightly ahead of those in 1993, up 0.9 percent to
$1.48 billion. Total earnings declined 1.9 percent to $20.5 million.
Excluding a benefit resulting from recovery of prior merchandise-related
expenses, income for 1994 was $6.5 million, down 68.9 percent compared
with $20.9 million in 1993. (Please see the financial statements for
complete details.)
Throughout the year, two influences held down sales and earnings in
our stores along with many other fashion specialty chains. First, the
fashion picture was lackluster, providing few temptations for customers.
Consequently, we found it necessary to promote heavily to stimulate
sales. Second, consumers directed their spending away from fashion
apparel, toward electronics and hardgoods. Favorable interest rates and
increased confidence about the economic future made these higher-ticket
items more appealing to consumers than they had been during previous
years.
While our results surely were affected by those factors, we recognize
also that several of our chains missed their targets because they did
not accurately interpret the mood of their markets. With recent
organizational and merchandising changes in these chains, we expect
stronger execution and improved results in 1995.
Despite these negatives, we were able to remain profitable. We
allowed only a modest increase in inventory over the reduced levels
established in 1993. We held corporate overheads steady at 1989 levels.
Profits also were bolstered by the strong performances of our
Bakers/Leeds footwear chain and JW/Jeans West menswear chain, which
together account for almost one-third of our stores.
As we look forward, we will be concentrating on expansion of those of
our existing chains that have the greatest profit potential.
Additionally, we will be examining new concepts that will complement our
current operations.
Just after the end of fiscal 1994 we announced the planned spin-off of
our Dave & Buster's operation as a separate corporation. This action
will allow Edison Brothers and Dave & Buster's each to concentrate on
the operational needs of its business and will give Dave & Buster's
independent access to capital markets to serve its expansion program.
We are pleased that Dave & Buster's was able to grow under the Edison
umbrella to the point where it is ready to stand alone as a public
corporation. We expect that your shares in Dave & Buster's will be sent
to you later this spring.
During 1994 we added 110 stores (including 31 through acquisition) and
closed 215, ending the year with 2,761 units in operation. We expect to
open about 80 stores in 1995, not including any possible acquisitions.
In February 1995 our board of directors elected David B. Cooper, Jr.,
as a director. He joined Edison Brothers last fall as chief financial
officer and an executive vice president.
Robert W. Staley, vice chairman of Emerson Electric Co., has moved to
Hong Kong to accept a special assignment for Emerson and therefore will
not be standing for re-election to our board of directors. We greatly
valued his contribution and are sorry to lose him.
As announced in January, Andrew Newman and Martin Sneider have retired
as chairman and president, but will continue to serve the company as
members of the board of directors and consultants to senior management.
Alan Miller, president of Edison Footwear Group, has been named
chairman, president, and chief executive officer. Karl W. Michner,
president of Edison Menswear Group, and Peter A. Edison, executive vice
president and director of corporate development, have been named senior
executive vice presidents in the newly created Office of the Chairman.
These appointments took effect on April 3.
This succession is evidence of our company's commitment to orderly
continuity of leadership. The new team was carefully selected and
developed over several years and is ready to meet the challenges of the
next decade.
/s/ Alan Miller,
Chairman, President and CEO
/s/ Andrew E. Newman,
Retired Chairman
/s/ Martin Sneider,
Retired President
St. Louis, Missouri
April 3, 1995
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
<CAPTION>
1994 1993 1992
(52 Weeks) (52 Weeks) (52 Weeks)
(restated) (restated)
<S> <C> <C> <C>
Net Sales $1,476.4 $1,462.9 $1,508.8
Cost of goods sold, occupancy
and buying expenses 1,017.4 990.8 967.1
Store operating and
administrative expenses 360.3 352.6 348.1
Depreciation and amortization 69.6 67.1 63.0
Interest expense, net 19.0 19.7 18.7
Other operating (22.3)
1,444.0 1,430.2 1,396.9
Income before Income Taxes 32.4 32.7 111.9
Income tax provision 11.9 11.8 41.5
Income before the Effect of a
Change in Accounting Method 20.5 20.9 70.4
Cumulative effect of the change
in postretirement benefits accounting
method (23.1)
Net Income $ 20.5 $ 20.9 $ 47.3
Per Common Share:
Income before the Effect of
a Change in Accounting Method $ .93 $ .95 $ 3.24
Cumulative Effect of the
Change in Postretirement
Benefits Accounting Method (1.06)
Net Income $ .93 $ .95 $ 2.18
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
<CAPTION>
ASSETS
1994 1993
Year-end Year-end
(restated)
<S> <C> <C>
Current Assets:
Cash and short-term investments $ 27.0 $ 32.6
Merchandise inventories 318.4 295.0
Deferred income taxes 9.6 17.4
Prepaid expenses 8.2 9.4
Other current assets 33.9 12.5
Total Current Assets 397.1 366.9
Property and Equipment, net 347.0 353.8
Intangible Assets, net 96.2 102.4
Prepaid Pension Expense 38.7 36.2
Other Assets 14.8 13.8
Total Assets $893.8 $873.1
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 75.4 $ 72.2
Notes payable and commercial paper 115.9 44.8
Current portion of long-term debt 35.1
Payroll and vacations 16.4 16.8
Other taxes 10.1 11.6
Other current liabilities 38.4 40.9
Total Current Liabilities 256.2 221.4
Long-Term Debt 173.5 159.2
Postretirement Benefits 40.0 38.8
Other Liabilities 33.2 38.5
Deferred Income Taxes 3.7 7.3
Common Stockholders' Equity:
Common stock, par value $1 22.0 22.0
Capital in excess of par value 76.5 75.6
Retained earnings 303.8 310.6
Foreign currency translation
adjustment and other (15.1) (.3)
Total Common Stockholders' Equity 387.2 407.9
Total Liabilities and Equity $893.8 $873.1
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
<CAPTION>
1994 1993 1992
(52 Weeks) (52 Weeks) (52 Weeks)
(restated) (restated)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 20.5 $ 20.9 $ 47.3
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 69.6 67.1 63.0
Provision for deferred income
taxes 8.8 2.5 (20.5)
Change in assets and liabilities
net of effects from
acquisitions and dispositions:
Merchandise inventories (26.7) 55.5 (61.5)
Other assets (24.9) (18.6) (2.2)
Accounts payable, accrued
expenses and other
liabilities (5.0) 60.8
Other 7.6 3.6 8.9
Total Operating Activities 49.9 131.0 95.8
Cash Flows from Investing Activities:
Payment for companies and assets
purchased, net of cash acquired (11.8) (39.2) (13.4)
Capital expenditures (61.7) (78.4) (92.9)
Net proceeds from disposal of
subsidiary 7.3
Other (.9) (2.5) (1.8)
Total Investing Activities (74.4) (120.1) (100.8)
Cash Flows from Financing Activities:
Principal payments of long-term debt (35.7) (75.2) (45.1)
Short-term debt (payments)
borrowings 71.1 (48.0) 63.0
Dividends on common stock (27.3) (27.3) (25.0)
Common stock purchased (5.5)
Proceeds from long-term debt
issuance 15.0 150.0
Other 1.0 4.3 9.8
Total Financing Activities 24.1 (1.7) 2.7
Effect of exchange rate changes on cash (5.2)
Cash Provided (Used) (5.6) 9.2 (2.3)
Beginning cash and short-term investments 32.6 23.4 25.7
Ending Cash and Short-Term Investments $ 27.0 $ 32.6 $ 23.4
Cash payments for:
Interest expense $ 20.4 $ 19.0 $ 19.4
Income taxes $ 4.5 $ 21.7 $ 38.9
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
(Dollars in millions, except per share data)
<CAPTION>
Foreign
Currency
Capital in Retained Translation
Common excess of earnings Adjustment
stock par value (restated) and Other
<S> <C> <C> <C> <C>
Balance at Beginning of 1992 $ 21.6 $ 67.1 $294.7 $ .0
Net income 47.3
Stock options exercised and
employee benefit plans .4 9.5
Dividends on common stock -
$1.15 per share (25.0)
Balance at End of 1992 22.0 76.6 317.0 .0
Net income 20.9
Stock options exercised and
employee benefit plans .2 4.3 (.2)
Common stock purchased -
195,600 shares (.2) (5.3)
Foreign currency
translation adjustment (.1)
Dividends on common stock -
$1.24 per share (27.3)
Balance at End of 1993 22.0 75.6 310.6 (.3)
Net income 20.5
Stock options exercised
and employee benefit
plans 1.0 .1
Common stock purchased -
9,000 shares (.1)
Foreign currency
translation adjustment (14.9)
Dividends on common stock -
$1.24 per share (27.3)
Balance at End of 1994 $ 22.0 $ 76.5 $303.8 $(15.1)
<FN>
See accompanying notes.
</FN>
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data)
Note 1: Summary of Significant Accounting Policies
Consolidation - The financial statements include the accounts of all
subsidiaries; intercompany accounts and transactions have been eliminated.
Short-term investments are stated at the lower of cost or market, consist
of highly liquid debt instruments with maturities of three months or less,
and are considered to be cash equivalents for consolidated statements of
cash flows.
Inventories - A portion of the inventories (72%) is determined using the
retail method and is based on the lower of cost or market. The other
portion (28%) is stated at the lower of cost, principally average cost, or
market, based principally on anticipated realizable values.
Depreciation and amortization of property and equipment and intangible
assets are computed principally on the straight-line basis. Lease rights
acquired are amortized on a straight-line basis over remaining lease terms
and anticipated renewals.
Income Taxes - The liability method is used to compute deferred income
taxes resulting from temporary differences in the recognition of income and
expense items for tax and financial reporting purposes. Financial
Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes," adopted in 1992, had no material effect on the company's accounting
for income taxes.
Interest Expense - 1994, 1993, and 1992 interest expense has been reduced
by interest income of $1.6, $.7, and $1.2, respectively.
Store opening and closing costs - Store preopening costs are charged
against income as incurred. Closing costs are accrued when the decision is
made to close a store.
Earnings Per Share - Earnings per common share is based on the weighted
average number of shares outstanding (22,007,000 in 1994; 21,998,000 in
1993; and 21,744,000 in 1992). Shares issuable under the stock option and
stock bonus plans did not have a significant dilutive effect on earnings
per share.
Reclassifications - Certain prior-year items have been reclassified to
conform to the current-year presentation.
Fiscal Year - The company's fiscal year ends on the Saturday closest to
January 31. References to 1994, 1993, and 1992 are to the 52 weeks ended
January 28, 1995, January 29, 1994, and January 30, 1993, respectively.
Note 2: Leases
Most operations are conducted in leased premises. Some of the leases
include options for renewal or extension on various terms. For 1994, 1993,
and 1992, respectively, minimum rentals for operating leases were $140.6,
$129.9, and $125.7; additional percentage rentals based on sales were $4.8,
$5.3, and $9.2. Most leases also require the payment of common area
expenses and real estate taxes.
At year-end 1994 future minimum lease payments required under operating
leases are $130.0, 1995; $120.1, 1996; $108.8, 1997; $97.2, 1998; $85.0,
1999 and $745.9, total.
In accordance with Financial Accounting Standards Board Technical Bulletin
85-3, the company accrues non-cash rent expense for leases with scheduled
increases in minimum lease payments such that minimum rent expense is
recognized on a straight-line basis over the lease term. Minimum rent
expense accrued in excess of cash rent payments was $1.7, $3.8, and $4.5,
in 1994, 1993, and 1992, respectively.
Note 3: Acquisitions
During 1994 the company made several acquisitions for an aggregate of
$11.8. The acquisitions were accounted for by the purchase method, and
operating results of the acquired entities have been included in the
consolidated financial statements since their respective acquisition dates.
<TABLE>
Note 4: Business Segments
<CAPTION>
Net Sales Operating Profit (Loss)
1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Apparel $ 975.8 $ 981.6 $ 982.1 $ 7.7 $ 37.2 $ 91.4
Footwear 400.2 394.3 450.8 28.7 22.5 47.9
1,376.0 1,375.9 1,432.9 36.4 59.7 139.3
Corporate
and other 100.4 87.0 75.9 16.6 (6.6) (7.5)
Interest
expense (20.6) (20.4) (19.9)
$1,476.4 $1,462.9 $1,508.8 $ 32.4 $ 32.7 $111.9
</TABLE>
<TABLE>
<CAPTION>
Depreciation Capital
Identifiable assets and amortization expenditures
1994 1993 1992 1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Apparel $492.1 $492.3 $499.4 $39.9 $39.1 $38.0 $28.1 $34.5 $45.8
Footwear 155.5 145.5 153.0 9.6 9.8 9.2 14.8 14.2 18.8
647.6 637.8 652.4 49.5 48.9 47.2 42.9 48.7 64.6
Corporate and
other 246.2 235.3 197.8 20.1 18.2 15.8 18.8 29.7 28.3
$893.8 $873.1 $850.2 $69.6 $67.1 $63.0 $61.7 $78.4 $92.9
<FN>
See Note 14 for amounts affecting 1993 and 1992 operating profit (loss) of
Corporate and other.
</FN>
</TABLE>
Note 5: Investment Disposal
During 1994 the company disposed of its entire investment in the equity
securities of an entertainment software enterprise. The securities were
classified as available-for-sale. The proceeds of the sale and the
realized gain, computed based on the cost of the investment, were $3.0 and
$1.7, respectively. The gain is included in store operating and
administrative expenses on the 1994 Consolidated Statement of Income.
<TABLE>
Note 6: Common Stock
<CAPTION>
1994 year-end 1993 year-end
<S> <C> <C>
Shares:
Issued (100,000,000
authorized) 27,554,232 27,554,116
Less held in treasury 5,531,429 5,571,429
Outstanding 22,022,803 21,982,687
Stockholders of record 4,000 4,200
</TABLE>
The 1982, 1986, and 1992 stock option plans authorize the sale of 1.5, 1.5,
and 1.0 million common shares to executives, including store managers. No
options have been granted under the 1982 and 1986 plans subsequent to
adoption of the 1986 and 1992 plans, respectively. Options are exercisable
over various option terms not exceeding 10 years following the grant. The
1975 Stock Bonus Plan, as amended in 1980, authorized the issuance of 3.0
million shares of common stock to executives, including store managers. At
year-end 1992, there were no shares issuable and, cumulatively, 703,368
shares had been issued. The plan by its terms prohibits any further grants
after December 31, 1990, and no grants of stock units have been
made since 1986. Activity under these plans was as follows:
<TABLE>
<CAPTION>
1994 1993 1992
Option Option Option
Price Price Price
Number of per Number of per Number of per
Options Share Options Share Options Share
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of $11.38- $ 9.56- $9.51-
year 570,521 37.25 801,500 37.25 1,057,957 27.15
23.75-
Granted 711,700 29.81 154,300 37.25
11.38- 9.56- 9.51-
Exercised (44,078) 27.15 (185,771) 27.15 (383,676) 27.15
11.38- 9.56- 9.51-
Canceled (169,912) 37.25 (45,208) 37.25 (27,081) 27.15
Outstanding at 16.13- 11.38- 9.56-
end of year 1,068,231 37.25 570,521 37.25 801,500 37.25
Shares
exercisable
at end of
year 260,091 214,151 226,802
Shares issued
for:
Options
exercised 44,078 185,771 383,676
Bonus units
exercised 219
</TABLE>
At January 28, 1995, 1,450,286 shares of common stock were reserved for
issuance under the stock option and the stock bonus plans.
Each share of outstanding common stock includes a right which entitles the
holder to purchase one common stock share for $93. Rights attach to all
new shares of common stock issued and become exercisable only under certain
conditions involving actual or potential acquisitions of the company's
common stock. Depending on the circumstances, all holders except the
acquiring person may be entitled to purchase at the exercise price
additional shares of common stock of the company and/or of the acquiring
person, having a market value equal to two times the exercise price. The
rights remain in existence until January 26, 1998, unless they are redeemed
(at five cents per right) or terminated.
Note 7: Pension Plan
The pension plan covers employees who have met age and service eligibility
requirements. Benefits are based on each employee's highest average
compensation for any 5 consecutive full calendar years out of the last 15
years of credited service preceding separation. The company funds at least
the minimum amount required by funding standards.
In determining the actuarial present value of projected future benefits for
1994 and 1993 the weighted-average discount rate is 8.75% and 7.50%,
respectively, and the rate of increase in future compensation levels is
5.2%. For 1994, 1993, and 1992, the assumed rate of return on assets is
9.5%.
<TABLE>
The plan's funded status is as follows:
<CAPTION>
1994 1993
Year-end Year-end
<S> <C> <C>
Actuarial present value of accumulated plan
benefits, including vested benefits
of $33.2 and $33.1 $ 38.5 $ 38.3
Net assets available for benefits, primarily
fixed income and equity securities at market
value $ 89.2 $ 88.1
Actuarial present value of projected future
benefits (44.1) (50.4)
Plan assets greater than projected future
benefits $ 45.1 $ 37.7
Net assets as a percentage of:
Present value of accumulated plan
benefits 232% 230%
Present value of projected future benefits 202% 174%
</TABLE>
<TABLE>
The accounting for plan assets greater than projected future benefits is as
follows:
<CAPTION>
1994 1993
Year-end Year-end
<S> <C> <C>
Plan assets not recognized in the company's
balance sheet, principally resulting from
market value gains:
1984 and prior $ .7 $ 1.2
Since 1984 11.0 5.2
Pension prepayment recognized in the company's
balance sheet 37.1 34.6
Unrecognized prior service cost (6.4) (7.3)
Additional minimum liability 2.7 4.0
Plan assets greater than projected future
benefits $45.1 $37.7
</TABLE>
Net pension income for 1994, 1993, and 1992, respectively, of $1.4, $1.1,
and $1.1 consisted of actual return on assets, $2.5, $11.0, and $5.5; plus
partial recognition of prior-period net gains (losses), $(.3), $(.1), and
$(.1); less net gains (losses) deferred to future periods, $(5.4), $3.9,
and $(1.0); less cost of current-year employee service, $2.4, $2.1, and
$1.9; and less interest cost on projected future benefits, $3.8, $3.8, and
$3.4.
<TABLE>
Note 8: Property and Equipment
<CAPTION>
1994 1993
Year-end Year-end
<S> <C> <C>
Land $ 11.5 $ 11.1
Buildings 77.3 71.0
Leasehold improvements 304.0 299.4
Fixtures and equipment 230.7 221.4
Property held under capital leases, principally
buildings 9.6 9.6
Total cost 633.1 612.5
Accumulated depreciation and amortization (286.1) (258.7)
$347.0 $353.8
</TABLE>
Depreciation and amortization expense for 1994, 1993, and 1992 was $56.9,
$54.6, and $49.8, respectively.
<TABLE>
Note 9: Intangible Assets
<CAPTION>
1994 1993
Year-end Year-end
<S> <C> <C>
Leasehold rights $ 46.6 $ 54.0
Goodwill 70.1 62.9
Other 25.8 28.3
Total cost 142.5 145.2
Accumulated amortization (46.3) (42.8)
$ 96.2 $102.4
</TABLE>
Intangibles are amortized over useful lives ranging from 2 to 30 years.
Amortization expense for 1994, 1993, and 1992 was $12.7, $12.5, and $13.2,
respectively.
<TABLE>
Note 10: Financial Arrangements
<CAPTION>
Interest 1994 1993
Rate Maturities Year-end Year-end
<S> <C> <C> <C> <C>
7.09-
Unsecured senior notes 8.04% 1994-2008 $150.0 $185.0
Revolving credit notes 6.88% 1997 15.0
Capital lease obligations 8.4 8.5
Other obligations .1 .8
Total long-term debt 173.5 194.3
Less current maturities .0 35.1
Long-term debt $173.5 $159.2
</TABLE>
Future maturities of long-term debt are $.0, 1995; $9.1, 1996; $32.6, 1997;
$21.8, 1998; and $21.7, 1999. Future interest payments on capital lease
obligations were $6.1 at year-end 1994. The company's financing agreements
contain certain restrictions, including limitations on dividend payments
and the company's acquisition of its capital stock. At year-end 1994,
retained earnings of $76.7 were free of the most restrictive of these
limitations.
The company has a $125.0 credit agreement of which $50.0 expires in
December 1995 and $75.0 expires in May 1997. This credit agreement can be
used to support potential commercial paper borrowing arrangements of up to
$125.0. The weighted average interest rate on short-term borrowings
outstanding on January 28, 1995 was 6.4%.
Based on borrowing rates currently available to the company, the estimated
fair value of long-term debt, including current maturities, at year-end
1994 is $169.6.
Note 11: Income Taxes
<TABLE>
The provision for income taxes consists of:
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Current Expense
Federal $ .4 $ 7.1 $41.3
Foreign 2.6 1.4 .2
State and local .1 .8 6.2
Deferred Expense - Operations 8.8 2.5 (6.2)
Total provision - Operations 11.9 11.8 41.5
Cumulative effect of accounting
change (14.2)
Total provision $11.9 $11.8 $27.3
</TABLE>
Significant components of the deferred tax liabilities and assets in the
consolidated balance sheet are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Accelerated depreciation $11.1 $16.5 $15.9
Pension income 12.2 14.3 11.1
Other 21.2 14.4 14.8
Total deferred tax liabilities 44.5 45.2 41.8
Inventory capitalization 4.6 3.0 3.7
Rent expense accruals 8.0 9.0 6.9
Postretirement benefits 13.0 15.2 14.3
Acquisition-related reserves 2.6 6.7
Other 22.2 21.4 24.6
Total deferred tax assets 50.4 55.3 49.5
Net deferred tax asset $ 5.9 $10.1 $ 7.7
</TABLE>
<TABLE>
Reconciliation of federal statutory rates to effective income tax rates:
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Federal corporate statutory rate 35.0% 35.0% 34.0%
State and local income taxes,
net of federal income tax
benefit 3.5 2.7 2.8
Miscellaneous items, net (1.6) (1.6) (.2)
Actual tax expense 36.9% 36.1% 36.6%
</TABLE>
Pretax earnings from foreign subsidiaries were $8.4 in 1994, $4.8 in
1993, and $1.8 in 1992.
Note 12: Employee Benefits
The company at its discretion provides medical, dental, and life insurance
coverage for its employees and retirees. Medical and life insurance
expenses were $11.8 in 1994, $12.1 in 1993, and $14.3 in 1992 (excluding
the cumulative effect of the accounting change for postretirement
benefits). Dental expenses were $.9 in 1994, $.8 in 1993 and $.7 in 1992.
The company provides an employee savings plan that permits employees to
make contributions in accordance with Internal Revenue Code Section 401(k).
Employees who meet age and service requirements are eligible to participate
by contributing up to 15% of their pretax compensation. The company
matches a portion of the employee's contribution under a predetermined
formula based on the company's return on equity. Company contributions to
the plan may be remitted to the Trustee in the form of company common stock
or cash which is then used to acquire company common stock on the open
market. The company's expense related to the plan was $.3 for 1994, $.2
for 1993, and $.5 for 1992.
Payroll taxes paid by the company primarily for social security and
unemployment compensation totaled $24.1 in 1994, $22.9 in 1993, and $20.9
in 1992.
Note 13: Postretirement Benefits
The company provides a defined-dollar-benefit health and life plan to its
retirees and their eligible spouses. To qualify, an employee must retire
at age 55 or later with at least 15 years of credited service under the
pension plan. The health care portion of the plan is contributory, with
retiree contributions subject to adjustment annually. The life insurance
portion of the plan is noncontributory. The company funds, as needed, plan
costs incurred over and above retiree contributions. The company reserves
the right to modify or terminate these benefits. In 1992, the company
adopted Statement of Financial Accounting Standards No. 106, "Employer's
Accounting for Postretirement Benefits Other Than Pensions", a change from
the cash basis of accounting used in prior years.
<TABLE>
The plan's funded status is as follows:
<CAPTION>
1994 1993
Year-end Year-end
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $ 31.4 $ 33.7
Fully eligible active plan
participants 3.2 3.3
Other active plan participants 3.2 4.3
Unrecognized net gain (loss) 2.3 (2.5)
Prior service cost (.1)
Accrued postretirement benefit cost $ 40.0 $ 38.8
</TABLE>
<TABLE>
Net periodic postretirement benefit cost consists of:
<CAPTION>
1994 1993
<S> <C> <C>
Service cost $ .2 $ .2
Interest cost 3.1 3.0
Net periodic postretirement benefit
cost $ 3.3 $ 3.2
</TABLE>
An increase in the cost of covered health care benefits of 12% for pre-age-
65 participants and 11% for post-age-65 participants was assumed for fiscal
year 1995. This rate is assumed to decrease gradually to 6% by the year
2000 and remain at that level thereafter. A 1% increase in the health care
cost trend rate would increase the accumulated postretirement benefit
obligation by $2.8 at year-end 1994 and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for
1994 by $.2. The weighted average discount rate used in determining the
accumulated postretirement benefit obligation was 8.75% and 7.5% at year-
end 1994 and 1993, respectively.
Note 14: Restatement
Income for 1993 and 1992 has been restated and reduced by $2.3 ($1.2 after
tax or 6 cents per share) and $1.1 ($.7 after tax or 3 cents per share),
respectively, to reflect as annual compensation expense certain amounts
payable under a contingent earn-out related to a 1989 business acquisition;
such amounts were previously considered as additional purchase price to be
reflected upon payment in 1995. In addition, 1992 beginning retained
earnings have been reduced by $2.0 to reflect the effect of restatement for
years prior to 1992.
Note 15: Other Operating
Other operating represents the benefit resulting from recovery of prior
merchandise-related expenses and reversal of related interest expense
accruals.
Note 16: Subsequent Events
Subsequent to 1994, the company announced plans to spin off as a separate
publicly held corporation its interest in subsidiaries that own and operate
the Dave & Buster's restaurant/entertainment complexes. Financial
information for the company's Dave & Buster's operation for the year
ended January 28, 1995 was: total assets, $49.0; net sales, $49.4; and
net income, $2.4.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Stockholders and Board of Directors
Edison Brothers Stores, Inc.
We have audited the accompanying consolidated balance sheets of Edison
Brothers Stores, Inc. as of January 28, 1995, and January 29, 1994,
and the related consolidated statements of income, common stockholders'
equity, and cash flows for each of the three years in the period ended
January 28, 1995. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the over-all financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Edison
Brothers Stores, Inc. at January 28, 1995, and January 29, 1994, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended January 28, 1995, in conformity with
generally accepted accounting principles.
As described in Notes 1 and 13 to the consolidated financial statements, in
1992 the company changed its method of accounting for income taxes and
postretirement benefits.
/s/ Ernst & Young LLP
St. Louis, Missouri
March 8, 1995
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION
Management is responsible for the integrity and objectivity of the
financial statements and other information included in this annual report.
The financial statements have been prepared in conformity with generally
accepted accounting principles. Information that is not subject to
objective determination has been developed based upon management's best
judgement.
The company maintains accounting systems that management believes are
sufficient to provide reasonable assurance of reliable financial statements
and to maintain accountability for assets. These systems are supported by
careful selection and training of qualified personnel. The extent of
internal accounting controls implemented must be related to the benefits
derived, and the balancing of the cost of controls to the benefits derived
requires management's estimates and judgements. The systems are tested and
reviewed by internal auditors. In addition, as part of its audit of the
company's financial statements, Ernst & Young LLP completed a study and
evaluation of selected internal accounting controls to establish a basis
for reliance thereon in determining the nature, timing, and extent of audit
tests to be applied.
The Board of Directors has an Audit Committee, which is comprised totally
of members of the board who are not employees of the company. The
committee meets with the independent auditors, internal auditors, and
representatives of management to discuss auditing and financial reporting
matters. Both the independent auditors and the company's own internal
auditors meet with the Audit Committee, with and without management
representatives present, to discuss the scope and results of their
examinations, the quality of financial reporting, and the propriety of
management's conduct of the business.
Management is committed to conducting its business affairs in accordance
with the highest ethical standards and in conformity with the law.
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in millions, except per share data)
BUSINESS
Edison Brothers Stores, Inc. (the company) is a leading specialty retailer
of fashion apparel and footwear operating more than 2,700 stores in all
fifty states, Puerto Rico, the Virgin Islands, Mexico, and Canada. The
company conducts its principal operations primarily through subsidiaries in
two segments: apparel and footwear. Stores within the apparel and
footwear segments, with the exception of the Repp Ltd. chain of big-and-
tall mens stores, are almost exclusively mall-based and generally range in
size from 1,300 to 3,000 square feet. Merchandise is acquired from many
vendors, and the company is not dependent on any one supplier. Four main
distribution centers serve as receiving points for merchandise and
coordinate the distribution of shipments to the stores via common or
contract carrier. The company also operates an entertainment division
composed of predominantly mall-based entertainment centers and five free-
standing Dave & Buster's restaurant/entertainment complexes. In February
1995 the company announced plans to spin off its interest in the
subsidiaries that own and operate the five Dave & Buster's restaurant/
entertainment complexes as a separate publicly-held corporation later
in the spring of 1995.
At year-end 1994 the apparel segment operated 1,941 stores in eight chains.
Six chains focus on menswear: JW/Jeans West, Oaktree, J.Riggings, Coda,
Repp Ltd., and Zeidler & Zeidler/Webster (Zeidler & Zeidler). Phoenix, the
company's first catalog operation, supplies menswear to big-and-tall
consumers. Each menswear chain targets a specific age group of men, with a
different product mix. The women's wear chain, 5-7-9 Shops, primarily
markets casual wear and accessories to young adults, teens, and pre-teens.
The footwear segment operated 681 stores in three chains at the end of
fiscal 1994. The footwear chains are Bakers/Leeds and Precis, which offer
popular-priced women's fashion shoes, and Wild Pair, which focuses on
advanced shoe fashion for young men and women.
FINANCIAL CONDITION
Year-end 1994 merchandise inventories increased modestly from year-end 1993
as the company responded to higher demand in the footwear segment and the
JW/Jeans West menswear chain. Growth of the Repp Ltd. chain also
contributed to the increase. Conversely, inventories in poorly performing
operations approximated or were below 1993 levels. The company believes
its inventories are well controlled and not subject to any significant
valuation risk. The decrease in net current deferred income tax assets was
caused principally by the benefit resulting from recovery of prior
merchandise-related expenses and related interest expense accruals. The
recovery also resulted in the recording of receivable balances that caused
the majority of the increase in the other current assets account. Property
and equipment, net, decreased during 1994 because the company reduced
annual capital expenditures by just over 20% and there were no significant
acquisitions.
The significant changes in liabilities were in the debt structure. A
combination of operating cash flow, short-term borrowings and $15.0 of
intermediate-term debt were used to repay senior notes that matured
during 1994, to increase inventory and to finance capital expenditures
and acquisitions. See Capital Resources and Liquidity below for further
discussion. The foreign currency translation adjustment was caused by
the devaluation of the Mexican peso near the end of 1994.
CAPITAL RESOURCES AND LIQUIDITY
In 1994, cash flow from operations decreased by $81.1 or 61.9%. The
decrease was attributable almost entirely to the increase in inventory as
compared with the $55.5 decrease in 1993. At the end of 1994, working
capital was $140.9 as compared to $145.5 and $232.1 at the end of 1993 and
1992, respectively. The lack of change from 1993 to 1994 reflects the
offsetting effects of the inventory and other current asset increases
against the short-term debt increase. The 1993 decrease from 1992 resulted
from inventory reduction and short-term debt increase.
During 1995 the company plans to reduce capital improvements to a level
somewhat lower than those of 1994. That does not include funds which, in
connection with the spin-off of the Dave & Buster's operations, the company
has committed to provide for the construction of two new
restaurant/entertainment complexes. However, the company expects to recoup
those advances from the proceeds of a planned stock offering by Dave &
Buster's within one year of the spin-off. The company will continue to
seek opportunities to expand through acquisitions when appropriate.
The company has available a $125.0 credit facility of which $110.0 was
unused at the end of 1994. The company uses short-term financing
to provide additional working capital when necessary. During 1995
the company plans to pursue a long-term refinancing of a portion of its
outstanding short-term bank debt. The company believes that funds
from operations and the appropriate combination of existing resources
or alternative financing resources will provide adequate working capital.
OPERATING RESULTS
Net sales for 1994 increased by $13.5 or .9% from 1993 levels. Comparable
store sales, that is, sales reported by stores open throughout both years,
improved in the footwear segment but declined in apparel and entertainment.
Especially in apparel, a lackluster fashion environment prompted reliance
on off-price promotions to stimulate sales; the level of promotional
activity was consistent with the company's 1993 experience. Because of
favorable interest rates and demand for higher-ticket items, consumers
seemed to shift their purchases to electronics and hardgoods. It is not
clear if this trend will continue, but the company is seeking to improve
the operating results of its existing businesses by making organizational
and merchandising changes, and controlling inventories. The company is
also currently studying the possibility of closing a significant number
of unprofitable apparel stores, the majority of which are in the Oaktree
chain. The company will evaluate the operating results, long-term
potential and other criteria of the stores under consideration for closing
and, if appropriate, will establish a reserve to cover the cost of closing
those units. In addition, the company has been actively looking for
opportunities outside its traditional mall-based market. In 1993 net
sales decreased by $45.9 or 3.0% from 1992. Comparable-store sales were
down in all segments. This decrease was offset to a great extent by the
contribution of acquired locations in the Repp Ltd. chain and new outlets
in J.Riggings, Zeidler & Zeidler, and entertainment.
Cost of goods sold, including occupancy and buying expenses, as a
percentage of sales increased in 1994 because of increases in both
merchandise-related and occupancy and buying expenses. The direct cost of
merchandise increased, and the level of shrinkage was somewhat higher.
Markdown activity was consistent with that reported in 1993. Minimum rent
and related common area maintenance charges and the shutdown costs
associated with closing the company's St. Louis distribution center also
contributed to the increase. The 1993 increase over 1992 was caused by
higher levels of promotional markdown activity and increased rent costs for
store locations.
Store operating and administrative expenses as a percentage of sales
increased modestly in both 1994 and 1993. Nearly all of the modest
percentage increases in both 1994 and 1993 were in the area of store
operating expenses. In 1994, the footwear segment was able to decrease
store expenses as a percentage of sales from 1993 levels by tightly
controlling costs and increasing sales. However, the improvement in the
footwear segment was partially offset by an increase in store expenses
as a percentage of sales in the apparel segment, largely due to declining
sales. The opening of a new Dave & Buster's unit during first quarter
1994 also increased the store expense rate. These large restaurant/
entertainment centers are more labor intensive than the company's other
retail units and tend to distort expense performance as measured against
sales. In 1993, a portion of the increase was caused by the decrease in
sales. The balance of the 1993 change resulted from minor increases in
several categories of store expenses. None of the fluctuations was
considered significant. Administrative costs as a percentage of sales
were held constant in both years, with 1994 benefiting somewhat from some
nonrecurring items.
Depreciation and amortization rose slightly in both 1994 and 1993,
primarily from increased levels of property and equipment. The
amortization component declined somewhat in 1993 from 1992, despite the
higher ending balance of intangible assets, as the 1993 acquisitions that
generated the increases in intangibles took place at mid-to-late year.
The reduction in interest expense in 1994 was attributable to the
discontinuance and partial reversal of an accrual along with greater
interest earnings, all partially offset by higher expense on borrowings.
Net interest expense in 1993 was slightly above the 1992 level.
Approximately one-half of the change resulted from decreased interest
income. The balance of the increase reflected the new long-term debt in
1993 at a rate above that available on short-term borrowings.
Excluding the benefit resulting from recovery of prior merchandise-related
expenses, pretax income declined 69.1% in 1994 compared with 1993 levels,
primarily due to lower margins and higher store operating expenses.
Although JW/Jeans West increased its operating profits 80% in 1994, the
apparel segment as a whole reported significant declines in operating
profit. The footwear segment was able to achieve gross margins somewhat
above 1993 levels and to improve store expense performance, which
contributed to a 28% increase in operating profit from 1993. In 1993,
lower sales, margin erosion resulting from promotional markdowns, and
slightly higher store operating expenses combined to produce a 71% decline
in pretax income compared with 1992 levels before the cumulative effect of
the accounting change. The 1993 downturn affected operations fairly
equally as both the footwear and apparel segments reported significant
declines in operating profit.
On a seasonal average basis the company employed approximately 23,400
people during 1994. Salaries and wages in 1994, 1993, and 1992, were
$252.6, $245.4, and $235.2, respectively.
The company's Dave & Buster's operations, which the company plans to spin
off in the spring of 1995, reported pretax income of $4.1, $2.0, and $.9
in 1994, 1993 and 1992, respectively.
<TABLE>
FIVE-YEAR FINANCIAL SUMMARY
(Dollars in millions, except per share data)
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Stores at the end of the
year 2,761 2,866 2,787 2,781 2,733
Net sales $1,476.4 $1,462.9 $1,508.8 $1,385.3 $1,253.6
Income from continuing operations 20.5 20.9 70.4 58.9 59.0
Net income 20.5 20.9 47.3 58.9 59.0
Total assets 893.8 873.1 850.2 759.6 725.3
Long-term debt 173.5 159.2 194.4 119.5 145.1
Common stockholders' equity 387.2 407.9 415.6 383.4 343.3
Return on common
stockholders' equity 5.2% 5.1% 11.8% 16.2% 20.1%
Per common share:
Income from continuing
operations $ .93 $ .95 $ 3.24 $ 2.74 $ 2.78
Net income .93 .95 2.18 2.74 2.78
Dividends on common stock 1.24 1.24 1.15 1.06 1.04
Common stockholders'
equity 17.58 18.56 18.91 17.76 16.05
</TABLE>
See Management's Discussion and Analysis for significant items affecting
data comparability between 1992, 1993, and 1994.
See Note 14 to the consolidated financial statements for discussion of
the restatement of income in 1993 and 1992. The effect in 1991 was a $2.0
(9 cents per share) reduction of income.
<TABLE>
QUARTERLY INFORMATION
(Dollars in millions, except per share data)
<CAPTION>
Quarter
1st 2nd 3rd 4th Fiscal Year
13 weeks 13 weeks 13 weeks 13 weeks 52 weeks
1994 1993 1994 1993 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $326.7 $329.2 $351.0 $338.0 $353.6 $343.9 $445.1 $451.8 $1,476.4 $1,462.9
Cost of goods sold,
occupancy and
buying expenses 212.9 212.7 241.6 228.1 242.1 231.2 320.7 318.8 1,017.3 990.8
Net income 1.9 6.8 .8 2.3 .6 1.9 17.2 9.9 20.5 20.9
Per common share:
Net income .09 .31 .03 .11 .03 .09 .78 .45 .93 .95
Dividends .31 .31 .31 .31 .31 .31 .31 .31 1.24 1.24
Common stock
market price:
High 32.13 49.13 29.75 42.63 26.00 32.50 24.63 33.50 32.13 49.13
Low 28.38 36.50 23.13 30.00 21.50 26.25 12.00 28.25 12.00 26.25
Decrease in net
income resulting
from restatements:
Net income .3 .1 .2 .9 .2 .3 - (.1) - 1.2
Per common share .01 - .02 .04 .01 .01 - - - .06
</TABLE>
Amounts presented for the first three quarters of 1993 and 1994 differ from
amounts previously reported on Form 10-Q because of the restatement
discussed in Note 14 of the Notes to consolidated financial statements.
Edison Brothers Stores, Inc. common stock is listed on the New York Stock
Exchange.
Transfer Agent and Registrar: Boatmen's Trust Company, St. Louis, MO
63101
EXHIBIT 21 - SUBSIDIARIES
EDISON BROTHERS STORES, INC.
AND SUBSIDIARIES
JANUARY 28, 1995
The following is a grouping of subsidiary corporations by segment. All of
the outstanding capital stock of the subsidiaries (except for 20% of
certain of the Dave and Buster's subsidiaries) is owned, directly or
indirectly, by the Company. All of the subsidiaries are included in the
consolidated financial statements filed herein. Subsequent to year end
1994, the board of directors of the Company authorized a distribution to
its stockholders of its majority interest in its Dave & Buster's division.
Seven subsidiaries involved in the spin-off are included in the "other"
segment below.
<TABLE>
<CAPTION>
No. of
Principal State of subsidiary
Segment business names incorporation corporations
<S> <C> <C> <C>
Apparel JW/Jeans West, Oaktree,
J. Riggings, Coda, Maryland 1
Zeidler & Zeidler/Webster, Missouri 3
Repp, Ltd. Big & Tall, California 1
5-7-9 Shops, Spirale Delaware 1
Footwear Bakers, Leeds, Precis,
The Wild Pair, Sacha London Various 47
Other Dave and Buster's, Time-Out,
Space Port, Party Zone,
Exhilarama, Horizon
Entertainment, Inc.,
Other: Corporate-Related
Functions Various 24
Foreign subsidiaries involved in Canada 2
retail operations or acquisition Mexico 3
of merchandise for Apparel and Taiwan 1
Footwear segments Hong Kong 1
84
</TABLE>
EXHIBIT 23 - CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Edison Brothers Stores, Inc. of our report dated March 8, 1995,
included in the 1994 Annual Report to Stockholders of Edison Brothers
Stores, Inc.
We also consent to the incorporation by reference in Registration
Statements (Form S-8 Number 2-72334) pertaining to the Edison Brothers
Stores, Inc. 1975 Stock Bonus Plan, (Form S-8 Number 2-84838) pertaining to
the Edison Brothers Stores, Inc. 1982 Incentive Stock Option Plan,
(Form S-8 Number 33-13297) pertaining to the Edison Brothers Stores, Inc.
1986 Stock Option Plan, and (Form S-8 Number 33-54754) pertaining to the
Edison Brothers Stores, Inc. 1992 Stock Option Plan and in the related
Prospectuses of our report dated March 8, 1995, with respect to the
consolidated financial statements incorporated, by reference
in the Annual Report (Form 10-K) of Edison Brothers Stores, Inc. for
the year ended January 28, 1995.
ERNST & YOUNG LLP
St. Louis, Missouri
April 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet as of January 28, 1995 and the consolidated
statement of income for the 52 weeks ended January 28, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000031575
<NAME> EDISON BROTHERS STORES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-END> JAN-28-1995
<CASH> 27,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 318,400
<CURRENT-ASSETS> 397,100
<PP&E> 633,100
<DEPRECIATION> (286,100)
<TOTAL-ASSETS> 893,800
<CURRENT-LIABILITIES> 256,200
<BONDS> 173,500
<COMMON> 22,000
0
0
<OTHER-SE> 365,200
<TOTAL-LIABILITY-AND-EQUITY> 893,800
<SALES> 1,476,400
<TOTAL-REVENUES> 1,476,400
<CGS> 1,017,400
<TOTAL-COSTS> 429,900
<OTHER-EXPENSES> (22,300)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,000
<INCOME-PRETAX> 32,400
<INCOME-TAX> 11,900
<INCOME-CONTINUING> 20,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,500
<EPS-PRIMARY> .93
<EPS-DILUTED> .92
</TABLE>
EDISON BROTHERS STORES, INC.
AMENDMENT AGREEMENT
Dated as of April 1, 1995
Re:
NOTE AGREEMENTS DATED AS OF MARCH 1, 1993
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AMENDMENTS 1
Section 1.1. Amendment of Section 5.8 1
Section 1.2. Amendment of Section 6.1 2
SECTION 2. PAYMENT OF FEE 3
SECTION 3. MISCELLANEOUS 3
Section 3.1. Representation by Company 3
Section 3.2. Execution in Counterparts 3
Section 3.3. Fees and Expenses 3
Section 3.4. Governing Law 4
Section 3.5. Captions 4
Signature 5
EDISON BROTHERS STORES, INC.
AMENDMENT AGREEMENT
To the Institutions Named on
Schedule I Hereto
Ladies and Gentlemen:
Reference is made to those certain separate Note Agreements,
each dated as of March 1, 1993, as amended by that certain
Amendment Agreement dated as of January 15, 1994 and that certain
Amendment Agreement dated as of February 1, 1994 (collectively,
the "Note Agreements"), between Edison Brother Stores, Inc., a
Delaware corporation (the "Company"), and the Purchasers named in
Schedule I attached thereto, under which $45,000,000 aggregate
principal amount of 7.09% Series A Senior Notes due March 1,
2000, $60,000,000 aggregate principal amount of 7.52% Series B
Senior Notes due March 1, 2003 and $45,000,000 aggregate
principal amount of 8.04% Series C Senior Notes due March 1, 2008
of the Company (the "Notes") were originally issued.
The Company hereby certifies that Schedule I hereto contains
the names of all of the registered holders of all of the Notes
outstanding on the date hereof under each of the Note Agreements.
The Company desires to amend certain provision of the Note
Agreements and, upon the execution and delivery of this Amendment
Agreement by the company and the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes, the following
provisions of the various Note Agreements shall by amended as of
the date hereof as follows:
SECTION 1. AMENDMENTS.
Section 1.1. Amendment of Section 5.8 Section 5.8 of each
of the Note Agreements is hereby amended in its entirety so that
the same shall henceforth read as follows:
"Section 5.8. Fixed Charges Coverage Ratio.
The Company will keep and maintain the ratio of
Net Income Available for Fixed Charges to Fixed
Charges for:
(a) each period of four (4) consecutive
fiscal quarters up to an including the fiscal
quarter ending October 30, 1993, at not less than
1.25 to 1.00;
(b) the fiscal quarter ending January 29,
1994, at not less than 1.25 to 1.00;
(c) each period of four (4) consecutive
fiscal quarters beginning with the period that
ends with the first fiscal quarter of fiscal year
1994 to and including the period that ends with
the fourth fiscal quarter of fiscal year 1994, at
not less than 1.10 to 1.00;
(d) each period of four (4) consecutive
fiscal quarters ending on the final day of each of
the first three fiscal quarters of fiscal year
1995, at not less than 1.05 to 1.00;
(e) each period of four (4) consecutive
fiscal quarters ending on the final day of (i) the
last fiscal quarter of fiscal year 1995, and
(ii) each of the first three fiscal quarters of
fiscal year 1996, at not less than 1.10 to 1.00;
(f) each period of four (4) consecutive
fiscal quarters ending on the final day of (i) the
last fiscal quarter of fiscal year 1996, and (ii)
each of the first three fiscal quarters of fiscal
year 1997, at not less than 1.175 to 1.00;
(g) each period of four (4) consecutive
fiscal quarters beginning with the period that
ends with the fourth fiscal quarter of fiscal year
1997, and thereafter, at not less than 1.25 to
1.00; and
(h) each year of the fourth fiscal quarters
of fiscal years 1994 through 1997, at not less
than 1.25 to 1.00."
Section 1.2. Amendment of Section 6.1. Clauses (d), (e)
and (f) of Section 6.1 of each of the Note Agreements is hereby
amended as follows:
(d) The Company or any Restricted Subsidiary
shall fail to pay when due (whether by lapse of
time, by declaration, by call for redemption or
otherwise) the principal of or interest on any
Current Debt or Funded Debt in an aggregate
principal amount of $2,000,000 or more of the
Company or any Restricted Subsidiary (other than
the Notes) or shall fail to perform or observe any
covenant or agreement of any indenture, agreement
or other instrument under which such Current Debt
of Funded Debt is issued and outstanding, and,
in each such case, such failure shall continue
beyond the period of grace, if any, allowed with
respect thereto (whether or not any default
resulting from such failure shall have been waived
by the holders of such Current Debt or Funded
Debt); or
(e) [INTENTIONALLY OMITTED]
"(f) (i) the Company shall fail to observe
or perform any covenant or agreement contained in
Section 5.6 through Section 5.11 or Section 6.2 or
(ii) Consolidated Net Income for each of any two
consecutive fiscal quarters during fiscal years
1994, 1996 or 1997 is a net loss and the loss
reported for the second such consecutive fiscal
quarter is greater than the loss reported for the
first such fiscal quarter; or"
SECTION 2. PAYMENT OF FEE.
In consideration of the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes entering into
this Amendment Agreement, the Company shall pay each Purchaser
(whether or not such Purchaser has executed this Amendment
Agreement) an amount equal to .20% of the then outstanding
principal amount of the Notes held by such Purchaser as set forth
on Schedule I attached hereto. The Company shall pay such
amounts in accordance with the payment instructions set forth on
Schedule I to the Note Agreements by Noon, Chicago time, on the
date when at least one counterpart has been executed by the
Company and the holders of at least 66-2/3% in aggregate
principal amount of outstanding Notes (if evidence of such
execution is received by the Company prior to 11:00 a.m., Chicago
time, on such date) or by Noon, Chicago time, on the immediately
succeeding business day.
SECTION 3. MISCELLANEOUS.
Section 3.1. Representation by Company. The Company
hereby represents to each of you that on the date hereof and
after giving effect to this Amendment Agreement, no Default or
Event of Default (as such terms are defined in the Note
Agreements) has occurred and is continuing.
Section 3.2. Execution in Counterparts. Two or more
duplicate originals of this Amendment Agreement may be signed by
the parties hereto, each of which shall be an original but all of
which together shall constitute one and the same instrument.
This Amendment Agreement may be executed in one or more
counterparts and will be effective (as the effective date set
forth below), when at least one counterpart has been executed by
the Company and the holders of at least 66-2/3% in aggregate
principal amount of outstanding Notes, and each set of
counterparts which, collectively, show execution by each such
party shall constitute one duplicate original.
Section 3.3. Fees and Expenses. All fees and expenses
relating to the subject matter of this Amendment Agreement,
including, without limitation, all fees and expenses of special
counsel to the holders of the Notes, shall be paid by the
Company.
Section 3.4. Governing Law. This Amendment Agreement
shall be governed by and construed in accordance with Illinois
law.
Section 3.5. Captions. The descriptive headings of the
various Sections or parts of this Amendment Agreement are for
convenience only and shall not affect the meaning or construction
of any of the provisions hereof.
If this Amendment Agreement is satisfactory to you, please
so indicate by signing the acceptance at the foot of a
counterpart of this Amendment Agreement and return such
counterpart to the Company, and upon receipt by the Company of
counterparts of this Amendment Agreement executed by the holders
of at least 66-2/3% in aggregate principal amount of outstanding
Notes, each of the Note Agreements shall be amended as set forth
above, but all other terms and provisions of the Note Agreements
shall remain unchanged and are in all respects ratified,
confirmed and approved. If and to the extent that any of the
terms or provisions of the Note Agreements, as amended prior to
the date hereof, are in conflict with or are inconsistent with
any of the terms or provisions of this Amendment Agreement, this
Amendment Agreement shall govern.
This Amendment Agreement shall be effective as of April 1, 1995.
EDISON BROTHERS STORES, INC.
By /s/ David B. Cooper, Jr.
Its Executive Vice President and
Chief Financial Officer
Accepted and Agreed to:
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By /s/ Stephen G. Skrivanek
Its Counsel
By /s/ Clint Woods
Its Counsel
CIGNA PROPERTY AND CASUALTY
INSURANCE COMPANY
By CIGNA Investments, Inc.
By /s/ Stephen J. Myott
Its Vice President
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By CIGNA Investments, Inc.
By /s/ Stephen J. Myott
Its Vice President
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf
of one or more separate
accounts
By CIGNA Investments, Inc.
By /s/ Stephen J. Myott
Its Vice President
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By CIGNA Investments, Inc.
By /s/ Stephen J. Myott
Its Vice President
ALLSTATE LIFE INSURANCE
COMPANY
By /s/ Patricia W. Wilson
Its Authorized Signatory
By /s/ Gary W. Fridley
Its Authorized Signatory
FARMLAND LIFE INSURANCE
COMPANY
By /s/ Jeffrey G. Milburn
Its Attorney-In-Fact
FINANCIAL HORIZONS LIFE
INSURANCE COMPANY
By /s/ Jeffrey G. Milburn
Its Vice President
Corporate Fixed-Income Securities
NATIONWIDE LIFE INSURANCE
COMPANY
By /s/ Jeffrey G. Milburn
Its Vice President
Corporate Fixed-Income Securities
WEST COAST LIFE INSURANCE
COMPANY
By /s/ Jeffrey G. Milburn
Its Attorney-In-Fact
WOODMEN OF THE WORLD LIFE
INSURANCE SOCIETY
By /s/ Wayne Graham
Its Executive Vice President
By /s/ James L. Mounce
Its Secretary
GENERAL AMERICAN LIFE
INSURANCE COMPANY
By /s/ Leonard M. Rubenstein
Its Executive Vice President -
Investments
ATWELL & CO., as nominee for
Century Life of America
By /s/ Thomas Pugliese
Its Financial Officer
ATWELL & CO., as nominee for
CUNA Mutual Insurance Society
By /s/ Thomas Pugliese
Its Financial Officer
NATIONAL LIFE INSURANCE
COMPANY
By /s/ Scott Higgins
Its Vice President
National Life Investment
Management Co., Inc.
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA
By
Its
PROVIDENT MUTUAL LIFE AND
ANNUITY COMPANY OF AMERICA
By
Its
PROVIDENT MUTUAL LIFE
INSURANCE COMPANY - CALIC
By
Its
MODERN WOODMEN OF AMERICA
By /s/ W.B. Foster
Its President
GUARANTEE MUTUAL LIFE
COMPANY
By /s/ Steven A. Scanlan
Its Senior Investment Officer -
Securities
WOODMEN ACCIDENT AND LIFE
COMPANY
By /s/ M. F. Wilder
Its Senior Vice President
and Treasurer
<TABLE>
SCHEDULE I
<CAPTION>
PRINCIPAL AMOUNT OF NOTES
NAME OF REGISTERED HOLDER HELD BY SUCH HOLDER
<S> <C>
Principal Mutual Life Insurance Company $35,000,000
CIG & Co. (as nominee for Cigna Property and $6,000,000
Casualty Insurance Company)
CIG & Co. (as nominee for Connecticut General $13,000,000
Life Insurance Company)
CIG & Co. (as nominee for Connecticut General $6,000,000
Life Insurance Company, on behalf
of one or more separate accounts)
ZANDE & Co. (as nominee for Life $5,000,000
Insurance Company of North America)
Allstate Life Insurance Company $25,000,000
Farmland Life Insurance Company $500,000
Financial Horizons Life Insurance Company $2,000,000
Nationwide Life Insurance Company $12,000,000
West Coast Life Insurance Company $2,000,000
Woodmen of the World Life Insurance Society $10,000,000
GALICO (as nominee of General American $7,500,000
Life Insurance Company)
ATWELL & CO. (as nominee for Century $3,000,000
Life of America)
ATWELL & CO. (as nominee for Cuna Mutual $4,000,000
Insurance Society)
National Life Insurance Company $7,000,000
Provident Mutual Life Insurance $1,500,000
Company of Philadelphia
Provident Mutual Life and Annuity Company $2,000,000
of America
Provident Mutual Life Insurance $1,500,000
Company - CALIC
Modern Woodmen of America $3,000,000
Guarantee Mutual Life Company $2,000,000
Woodmen Accident and Life Company $2,000,000
</TABLE>
AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 3rd day
of April, 1995, between Edison Brothers Stores, Inc., a
Delaware corporation (the "Company") and Alan D. Miller
("Employee").
WITNESSETH THAT:
WHEREAS, should the Company receive a proposal from a third
person concerning a possible business combination with, or
acquisition of equity securities of, the Company, the Board of
Directors of the Company (the "Board") believes it imperative
that the Company and Board be able to rely upon Employee to
continue in his position with the Company, and that they be able
to receive and rely upon his advice, if they request it, as to
the best interests of the Company and its shareholders, without
concern that he might be distracted or his advice affected by the
personal uncertainties and risks created by such a proposal;
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of Employee and the availability of his
advice and counsel notwithstanding the possibility, threat or
occurrence of a bid to take over control of the Company, and to
induce Employee to remain in the employ of the Company, and for
other good and valuable consideration, the Company and Employee
agree as follows:
1. Definitions.
(i) "Change in Control" shall mean the occurrence of
either of the following events:
(a) at any time during any 24-month period, the
membership of the Board of Directors of the Company is not at
least two-thirds constituted by (1) individuals who were
directors at the beginning of such period or (2) individuals
whose election, or nomination for election by the Company's
stockholders, to the Board during such period was approved by the
vote of two-thirds of those directors then still in office who
were directors at the beginning of such period; or
(b) The Board determines in its sole and absolute
discretion that there has been a change in control of the
Company.
(ii) "Good Reason," when used with reference to a
voluntary termination by Employee of his employment with the
Company, shall mean:
(a) the assignment to Employee of any duties
inconsistent with, or the reduction of powers or functions
associated with, his positions, duties, responsibilities or
status with the Company immediately prior to a Change in Control,
or any removal of Employee from or any failure to re-elect
Employee to any positions or offices Employee held immediately
prior to Change in Control, except in connection with the
termination of Employee's employment by the Company for Cause or
for Disability;
(b) a reduction in Employee's base salary as in
effect on the date hereof or as the same may be increased from
time to time;
(c) the mandatory transfer of Employee to another
geographic location, except for required travel on the Company's
business to an extent substantially consistent with Employee's
business travel obligations immediately prior to a Change in
Control;
(d) the failure by the Company to continue in
effect any employee benefit plan, program or arrangement in which
Employee was participating immediately prior to a Change in
Control (or plans, programs or arrangements providing Employee
with substantially similar benefits), or the taking of any action
by the Company which would adversely affect Employee's
participation in, or materially reduce Employee's benefits under,
any of such plans, programs or arrangements, or the failure by
the Company to provide Employee with the number of paid vacation
days to which Employee was entitled immediately prior to a Change
in Control;
(e) the failure by the Company to obtain an
assumption of the obligations of the Company to perform this
Agreement by any successor to the Company; or
(f) any purported termination of Employee's
employment by the Company during the Contract Period which is not
effected pursuant to the requirements of this Agreement.
(iii) "Contract Period" shall mean the period
commencing on the day immediately preceding a Change in Control
and ending on the third anniversary of the Change in Control.
(iv) "Disability" shall mean the inability of
Employee to engage in any substantial gainful activity by reason
of a medically determined physical or mental impairment which has
existed for a continuous period of at least 52 weeks and which,
in the judgment of a physician who certifies to such judgment, is
expected to be of indefinite duration or to result in imminent
death.
(v) "Cause," when used in connection with the
termination of Employee's employment by the Company, shall mean
(a) the willful and continued failure by Employee substantially
to perform his duties and obligations to the Company (other than
any such failure resulting from his Disability) which failure
continues after the Company has given notice thereof to Employee
or (b) the willful engaging by Employee in any act of
misconduct, dishonesty or moral turpitude of more than trifling
significance.
(vi) "Without Cause," when used in connection with
the termination of Employee's employment by the Company, shall
mean any termination of the employment of Employee by the Company
which is not a termination of employment for Cause or for
Disability.
(vii) "Termination Date" shall mean the effective
date as provided hereunder of the termination of Employee's
employment.
2. Application of this Agreement. This Agreement shall
apply with respect to any termination of employment of Employee
which occurs during the Contract Period. It shall not apply to
any termination of employment of Employee which occurs other than
during the Contract Period. Except as otherwise provided in
Sections 5 and 8, this Agreement shall terminate automatically
upon the death of Employee.
3. Termination of Employment of Employee By the Company
During the Contract Period.
(i) During the Contract Period, the Company shall
have the right to terminate Employee's employment for Disability,
for Cause or Without Cause upon following the procedures
hereinafter specified.
(ii) Termination of Employee's employment for
Disability shall become effective upon the giving to Employee of
a written notice of termination, specifying Disability as the
basis for such termination.
(iii) Employee's employment may be terminated for
Cause at any time, effective upon the giving to Employee of a
written notice of termination specifying in detail the
particulars of the conduct of Employee deemed by the Company to
justify such termination for Cause.
(iv) Employee's employment may be terminated
Without Cause at any time by vote of a majority of the whole
Board. Termination of Employee's employement Without Cause shall
be effective upon the giving to Employee of a written notice
of termination, specifying that such termination is Without Cause.
(v) Upon a termination of Employee's employment
for Cause or for Disability, Employee shall have no right to
receive any compensation or benefits hereunder. Upon a
termination of Employee's employment Without Cause, Employee
shall be entitled to receive the benefits provided in Section 5
hereof.
4. Termination of Employment By Employee During Contract
Period. During the Contract Period, Employee shall be entitled
to terminate his employment with the Company and, if such
termination is for Good Reason, to receive the benefits in Section
5 hereof. Employee shall give the Company notice of voluntary
termination of employment, which notice need specify only
Employee's desire to terminate his employment and, if such
termination is for Good Reason, set forth in reasonable detail
the facts and circumstances claimed by Employee to constitute
Good Reason. Any notice by Employee pursuant to this Section
shall be effective five (5) business days after the date it is
given by Employee.
5. Benefits Upon Termination in Certain Circumstances.
Upon the termination of the employment of Employee by the Company
pursuant to Section 3(iv) or by Employee for Good Reason pursuant
to Section 4 hereof, Employee shall be entitled to receive the
following benefits:
(i) The Company shall pay to Employee on the
Termination Date (a) the full base salary earned by him through
the Termination Date and unpaid at the Termination Date, plus (b)
credit for any vacation earned by him but not taken at the
Termination Date, plus (c) all other amounts earned by Employee
and unpaid at the Termination Date.
(ii) The Company shall pay to Employee on the
Termination Date a lump sum cash amount equal to the product of
(1) Employee's monthly salary at the highest rate in effect
during the twelve months immediately preceding the Termination
Date multiplied by (2) the number of months remaining during the
Contract Period, including partial months.
(iii) The Company shall maintain in full force and
effect for Employee's continued benefit until the earlier of (a)
the end of the Contract Period or (b) Employee's commencement of
full-time employment with a new employer, all life insurance,
medical, health and disability plans, programs or arrangements in
which Employee was entitled to participate immediately prior to
the Termination Date, provided that Employee's continued
participation is possible under the terms and provisions of such
plans, programs or arrangements. In the event that Employee's
participation in any such plan, program or arrangement is barred
by the terms thereof, the Company shall arrange to provide
Employee with benefits substantially similar to those which
Employee would otherwise be entitled to receive under such plans,
programs or arrangements.
(iv) The Company shall pay to Employee (or his
beneficiary upon his death) the excess, if any, of (a) the
benefit Employee (or his beneficiary, as the case may be) would
have been entitled to receive under the Edison Brothers Stores
Pension Plan and any supplemental pension plans or any successor
or similar plans then in effect (collectively the "Plan") had he
remained an employee of the Company until the earlier of the end
of the Contract Period or his death at a salary at the highest
rate of Employee's compensation in effect during the twelve
months immediately preceding the Termination Date, over (b) the
benefit actually payable to Employee (or his beneficiary, as the
case may be) under the Plan. Such excess benefit shall be
determined, and payment thereof shall commence, in accordance
with the provisions, rules and assumptions of the Plan but shall
be actually paid from the general assets of the Company.
Employee shall not be required to mitigate the amount of any
payment provided for in this Section 5 by seeking other
employment or otherwise, nor shall the amount of any payment
provided for in this Section 5 be reduced by any compensation or
other amounts paid to or earned by Employee as the result of
employment by another employer after the Termination Date or
otherwise.
6. Tax Indemnity. If any payments, reimbursements or
benefits payable by the Company to Employee pursuant to this
Agreement or any other plan, agreement or arrangement of the
Company are determined to be subject to an excise or similar tax
pursuant to Section 4999 of the Internal Revenue Code of 1986, as
amended, or any successor or other comparable federal, state or
local tax laws, the Company shall pay to Employee such additional
sum as is necessary (after taking into account all federal, state
and local income taxes payable by the Employee as a result of the
receipt of such additional sum) to place Employee in the same
after-tax position he would have been in had no such excise or
similar purpose tax been paid or incurred.
7. Employee's Expenses. All costs and expenses (including
reasonable legal, accounting and other advisory fees) incurred by
Employee to (a) defend the validity of this Agreement, (b)
contest the termination of his employment by the Company or any
determinations by the Company concerning the amounts payable by
the Company under this Agreement or (c) otherwise obtain or
enforce any right or benefit provided to Employee by this
Agreement (including, without limitation, any right or benefit
under this Section 7), shall be paid by the Company if Employee
is the prevailing party.
8. Successors; Binding Agreement.
(i) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company, upon or prior to such succession, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would have been
required to perform it if no such succession had taken place. A
copy of such assumption and agreement shall be delivered to
Employee promptly after its execution by the successor. Failure
of the Company to obtain such agreement upon or prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Employee to benefits from the Company
in the same amounts and on the same terms as Employee would be
entitled hereunder if Employee terminated his employment for Good
Reason after a Change in Control. For purposes of implementing
the foregoing, the date on which any such succession becomes
effective shall be deemed the Termination Date. As used in this
Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for
in this Section 8(i) or which otherwise becomes bound by the
terms and provisions of this Agreement by operation of law.
(ii) This Agreement is personal to Employee and
Employee may not assign or transfer any part of his rights or
duties hereunder to any other person, except that this Agreement
shall inure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators,
heirs, distributees, legatees or beneficiaries.
9. Modification; Waiver. No provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in a writing signed by
Employee and by the Chairman of the Executive Committee of the
Board of Directors of the Company or such other director or
officer as may be specifically designated by the Board.
Waiver by a party of any breach of any provision of this
Agreement by the other party shall not be construed as or
constitute a continuing waiver of such breach or a waiver of any
other breach of that provision or any other provision of this
Agreement.
10. Arbitration of Disputes.
(i) Any disagreement, dispute, controversy or
claim arising out of or relating to this Agreement shall be
settled exclusively and finally by arbitration.
(ii) The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the
"AAA").
(iii) The arbitral tribunal shall consist of one
arbitrator. The parties to the arbitration jointly shall
directly appoint such arbitrator within 30 days of initiation of
the arbitration. If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed
by the AAA as provided in the Arbitration Rules and shall be a
person who (a) maintains his principal place of business in the
City or County of St. Louis, Missouri and (b) has had substantial
experience in business transactions. The Company shall pay all
of the fees, if any, and expenses of such arbitrator.
(iv) The arbitration shall be conducted in the
City or County of St. Louis, Missouri or such other place in the
United States of America as the parties to the dispute may
designate by mutual written consent.
(v) At any oral hearing of evidence in connection
with the arbitration, each party thereto or its legal counsel
shall have the right to examine such party's witnesses and
to cross-examine the witnesses of any opposing party. No evidence
of any witness shall be presented in written form unless the
opposing party or parties shall have the opportunity to
cross-examine such witness, except as the parties to the dispute
otherwise agree in writing or except under extraordinary
circumstances where the interests of justice require a different
procedure.
(vi) Any decision or award of the arbitral
tribunal shall be final and binding upon the parties to the
arbitration proceeding. The parties hereto hereby waive to the
extent permitted by law any rights to appeal or to seek review of
such award by any court or tribunal. Notwithstanding the
foregoing, any determination by the arbitral tribunal that all or
any part of this Agreement is invalid or unenforceable shall be
appealable by the parties and subject to review in the manner
ordinarily provided by law. The parties hereto agree that the
arbitral award may be enforced against the parties to the
arbitration proceeding or their assets wherever they may be found
and that a judgment upon the arbitral award may be entered in any
court having jurisdiction.
(vii) Nothing herein contained shall be deemed to
give the arbitral tribunal any authority, power or right to
amend, modify, add to or subtract from any of the provisions of
this Agreement.
11. Notice. All notices, requests, demands and other
communications required or permitted to be given by either party
to the other party to this Agreement (including, without
limitation, any notice of termination of employment and any
notice under the Arbitration Rules of an intention to arbitrate)
shall be in writing and shall be deemed to have been duly given
when delivered personally or sent by certified or registered
mail, return receipt requested, postage prepaid, to the address
of the other party, as follows:
If to the Company, to:
Edison Brothers Stores, Inc.
501 North Broadway
St. Louis, Missouri 63102
ATTENTION: Board of Directors and Secretary
If to Employee, to:
Alan D. Miller
4 Deer Creek Woods
St. Louis, Missouri 63124
Either party may change its address for purposes of this Section
11 by giving fifteen (15) days' prior notice to the other party.
12. Severability. If any provision of this Agreement or
the application thereof to any person or circumstance shall to
any extent be held to be invalid or unenforceable, the remainder
of this Agreement or the application of such provision to persons
or circumstances other than those as to which it is held invalid
or unenforceable shall not be affected thereby, and each
provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
13. Headings. The headings in this Agreement are inserted
for convenience of reference only and shall not in any way affect
the meaning or interpretation of this Agreement.
14. Counterparts. This agreement may be executed in
several counterparts, each of which shall be deemed an original.
15. Governing Law. This Agreement has been executed and
delivered in the State of Missouri and shall in all respects be
governed by, and construed and enforced in accordance with, the
laws of the State of Missouri.
16. Payroll and Withholding Taxes. All payments to be
made or benefits to be provided hereunder by the Company shall
be subject to reduction for any applicable payroll-related or
withholding taxes.
17. Entire Agreement. This Agreement constitutes the
entire agreement of the parties relating to the subject matter
hereof and supersedes any prior oral or written agreements between
the parties concerning the same subject matter, provided that this
Agreement shall not limit or in any way affect any rights
Employee may have under any employee benefit plan, program or
arrangement sponsored or maintained by the Company (including,
without limitation, any life insurance, medical or pension plans,
programs and arrangements).
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EDISON BROTHERS STORES, INC.
By /s/ Andrew E. Newman
Co-Chairman of the Executive
Committee of the Board of
Directors
By /s/ Alan D. Miller
Employee
