UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 3, 1996
Commission File Number: 0-6731
C.R. ANTHONY COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma 73-0129405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 N. Broadway, Oklahoma City, 73102
Oklahoma
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (405) 278-
7400
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 whether the registrant has filed all
documents and reports required to be filed by Section 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ X ] No [ ]
Number of shares of Common Stock outstanding as of August
22, 1996: 9,035,645
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
C. R. ANTHONY COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
<CAPTION>
August 3, July 30, February 3,
ASSETS 1996 1995 1996
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,576 $ 3,141 $ 2,654
Accounts receivable, less
allowance for doubtful
accounts of $100 12,192 12,730 2,353
Merchandise inventories 88,776 93,993 84,438
Other assets 1,693 861 1,620
Deferred income taxes 1,194 1,894 1,849
Total current assets 109,431 112,619 92,914
PROPERTY AND EQUIPMENT, net 15,110 15,250 15,331
OTHER ASSETS 343 347 376
DEFERRED INCOME TAXES 8,273 9,473 8,439
TOTAL $ 133,157 $137,689 $ 117,060
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 24,212 $ 20,333 $ 14,562
Other liabilities 11,017 10,047 6,673
Accrued compensation 2,074 1,874 1,889
Income taxes payable - - 522
Current maturities of long-term 8,186 19,724 7,069
debt
Total current liabilities 45,489 51,978 30,715
LONG-TERM DEBT, less current 18,064 20,164 18,114
maturities
OTHER LIABILITIES 1,095 1,119 1,096
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
50,000,000 shares authorized;
9,035,645, 9,005,245, and
9,005,245 shares issued and
outstanding 90 90 90
Additional paid-in capital 57,307 57,216 57,216
Retained earnings 11,112 7,122 9,829
Total stockholders' equity 68,509 64,428 67,135
TOTAL $ 133,157 $137,689 $ 117,060
<F1>
See notes to consolidated financial
statements.
</TABLE>
<TABLE>
C. R. ANTHONY COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(Dollars in Thousands, except per share amounts)
<CAPTION>
For the Thirteen For the Twenty-six
Weeks Ended Weeks Ended
August 3, July 30, August 3, July 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET SALES $72,688 $77,203 $133,878 $139,544
COST OF GOODS SOLD 46,974 51,785 89,986 95,076
GROSS MARGIN 25,714 25,418 43,892 44,468
EXPENSES:
Selling, general and
administrative 17,571 18,735 33,515 35,720
Advertising 3,044 3,421 5,095 6,326
Depreciation and amortization 1,278 1,147 2,253 2,189
Interest 502 790 925 1,252
Total expenses 22,395 24,093 41,788 45,487
INCOME (LOSS) BEFORE INCOME TAXES 3,319 1,325 2,104 (1,019)
INCOME TAX (EXPENSE) BENEFIT (1,295) (516) (821) 398
NET INCOME (LOSS) $2,024 $809 $1,283 $ (621)
NET INCOME (LOSS) PER SHARE $ 0.22 $ 0.09 $ 0.14 $ (0.07)
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING 9,023,619 9,005,245 9,014,432 9,005,245
<F2>
See notes to consolidated financial
statements.
</TABLE>
<TABLE>
C. R. ANTHONY COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<CAPTION>
26 Weeks 26 Weeks
Ended Ended
August 3, July 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,283 $ (621)
Adjustments to reconcile net income
(loss) to
net cash provided by (used in)
operating activities:
Depreciation and amortization 2,253 2,189
Deferred tax expense (benefit) 821 (398)
(Gain) loss on disposals of
equipment (18) 1
Common stock issued as compensation
expense 91 -
Changes in other assets and
liabilities:
Accounts receivable (9,839) (10,081)
Merchandise inventories (4,338) (18,072)
Other assets (76) (322)
Accounts payable and other
liabilities 13,471 5,976
Accrued compensation 185 (1,087)
Net cash provided by (used in)
operating activities 3,833 (22,415)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,996) (2,276)
Proceeds from sale of property and
equipment 18 19
Net cash used in investing activities (1,978) (2,257)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings - Revolving Credit
Agreement 1,115 39,560
Payments of long-term debt (48) (15,531)
Net cash provided by financing
activities 1,067 24,029
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,922 (643)
CASH AND CASH EQUIVALENTS, Beginning of
period 2,654 3,784
CASH AND CASH EQUIVALENTS, End of period $ 5,576 $ 3,141
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 884 $ 1,255
Income taxes $ 557 $ 1,150
<F3>
See notes to consolidated financial
statements.
</TABLE>
C. R. ANTHONY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SUMMARY OF INTERIM REPORTING PRACTICES
Basis of presentation - The consolidated financial statements
include the results of operations, account balances and cash
flows of the Company and its wholly owned subsidiary (ANCO
Transportation, which principally transports merchandise to
Company stores). All material intercompany accounts and
transactions have been eliminated.
The consolidated balance sheets as of August 3, 1996 and July 30,
1995 and the statements of operations and cash flows for the
thirteen and twenty-six weeks ended August 3, 1996 and July 30,
1995 have been prepared by the Company without audit. In the
opinion of management, all adjustments (consisting only of
normal, recurring accruals) necessary to state fairly the
Company's financial position and the results of operations and
cash flows for the thirteen and twenty-six weeks ended August 3,
1996 and July 30, 1995 have been made. Due to the seasonal
nature of the business, results for the interim periods are not
necessarily indicative of a full year's operations, and balances
of inventory, receivables, revolving credit agreement borrowings,
and trade payables vary with the seasonal demands of the
business.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these financial statements be read in
connection with the annual consolidated financial statements and
notes thereto.
Earnings per share - Earnings per share is computed based upon
net income divided by the weighted average number of shares
outstanding. The impact of stock options on earnings per share
is not materially dilutive.
Reclassifications - Certain reclassifications have been made to
prior year balances to conform with the classifications of such
amounts in the current period.
Accounting pronouncements - In March 1995, the Financial
Accounting Standards Board issued SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of," which establishes accounting standards for such
assets. In October 1995, the Financial Accounting Standards
Board issued SFAS 123, "Accounting for Stock-Based Compensation."
SFAS 123 establishes a fair value method and disclosure standards
for stock-based employee compensation arrangements, such as stock
purchase plans and stock options. As allowed by SFAS 123, the
Company will continue to follow the provisions of Accounting
Principles Board Opinion 25 for such stock based compensation
arrangement and disclose the proforma effects of applying SFAS
123, if any, in the financial statements. The Company adopted
these new standards effective February 4, 1996. The adoption of
these standards had no material impact on the Company's financial
position, results of operations or related disclosures to the
Notes to Consolidated Financial Statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. With the exception of historical
information, the matters discussed or incorporated by reference
herein are forward-looking statements that involve risks and
uncertainties including, but not limited to: the risks
indicated in filings with the Securities and Exchange Commission;
changes in law, regulation, technology, and economic conditions;
the loss of key personnel; an increased presence of competition
in the Company's markets; the seasonality of demand for apparel
which can be significantly affected by weather patterns,
competitors' marketing strategies and changes in fashion trends;
availability of product and favorable financing from suppliers
and lending institutions; and failure to achieve the expected
results of merchandising and marketing plans, store opening or
closing plans, and other facility expansion plans. The
occurrence of any of the above could have a material adverse
impact on the Company's operating results.
Results of Operations
Thirteen Weeks Ended August 3, 1996 Compared to the Thirteen
Weeks Ended July 30, 1995. Due to the seasonal nature of the
Company's business, the results of operations for interim periods
are not necessarily indicative of the results of operations for
the full fiscal year. The following table presents selected
results of operations expressed as a percent of net sales:
13 Weeks Ended
August 3, July 30,
1996 1995
Net sales 100.0% 100.0%
Gross margin 35.4% 32.9%
Selling, general and
administrative expense 24.2% 24.3%
Advertising 4.2% 4.4%
Depreciation & amortization 1.7% 1.5%
Interest expense 0.7% 1.0%
Income before income taxes 4.6% 1.7%
Net sales. Comparable store sales declined 4.5% during the
thirteen weeks ended August 3, 1996 ("fiscal 1997 second
quarter") compared to the thirteen weeks ended July 30, 1995
("fiscal 1996 second quarter"). The decline in comparable store
sales is primarily attributable to following a strategy of less
aggressive advertising and maintaining lower inventory levels in
the fiscal 1997 second quarter compared to the fiscal 1996 second
quarter. In addition, net sales during the quarter also reflect
the effect of a net decrease of $1,320,000 associated with store
openings and closings. The Company was operating 211 stores as
of August 3, 1996 compared to 203 as of July 30, 1995. Although
the Company has opened 22 stores and closed 14 since July 30,
1995, the total selling square footage decreased to 2,941,963 at
August 3, 1996 from 2,984,135 at July 30, 1995 due to the
Company's strategy of opening smaller stores in rural markets
while closings have been larger or metropolitan stores. The
Company opened 5 new stores while closing 5 during fiscal 1997
second quarter.
Gross margin. Although the Company had a decline in net
sales, gross margin dollars and percent increased in comparing
fiscal 1997 second quarter to fiscal 1996 second quarter. The
increase in these margins for the quarter was primarily related
to reduced markdowns while controlling inventory levels and
establishing higher initial mark-ups. Average inventory per
selling square foot was 5.9% lower during the fiscal 1997 second
quarter as compared to the prior year second quarter.
Selling, general and administrative expense. The decline in
selling, general and administrative expense in fiscal 1997 second
quarter as compared to fiscal 1996 second quarter is primarily
due to a $1,136,000 expense reduction achieved in comparable
stores. The decreases were the result of lower handling costs
associated with a reduction in merchandise purchases during the
current year and lower personnel costs from improved business
processes and management practices, the first phases of which
were initiated in the second half of last fiscal year.
Management intends to continue implementing business process
improvements to achieve further operating efficiencies. However,
the rate of improvement over the prior year in personnel costs
will diminish as the implemented process improvements reach their
first anniversary and as the effect of higher hourly wages are
absorbed as a result of increases to minimum wages effective
October 1, 1996 and September 1, 1997. The costs associated with
new stores were offset by savings realized from stores closed as
the net decrease in non-comparable stores (new and closed stores)
was $249,000.
Advertising expense. Advertising expense decreased
$377,000, or 11.0%, in fiscal 1997 second quarter compared to
fiscal 1996 second quarter. The decrease is primarily
attributable to reductions in the quantity of pre-printed inserts
and broadcast commercials run in fiscal 1997 second quarter. In
the prior year, the Company was introducing a campaign of "Every
Jean On Sale Everyday." While this promotional strategy
continues to be utilized, the marketing costs of maintaining the
program are lower than were incurred in the prior year. In
addition, since the first of the fiscal year management has been
pursuing a strategy of reducing reliance on more expensive pre-
printed inserts and broadcast media and has increased usage of
newspaper and direct marketing programs. While the trend of
lower advertising expense is expected to continue in the third
quarter due to the costs associated with a non-recurring
marketing campaign run in the prior year third quarter, this
trend is not expected to continue into the fourth quarter.
Interest expense. Interest expense during the fiscal 1997
second quarter was lower than the fiscal 1996 second quarter due
to lower average borrowings and interest rates. Average
borrowings were $23,511,000 during the fiscal 1997 second quarter
as compared to $29,530,000 in the fiscal 1996 second quarter.
The interest rate was lower due to the new revolving credit
agreement entered into in July 1995 (see "Liquidity and Capital
Resources").
Tax expense. The Company's effective tax rate was 39% in
the fiscal 1997 second quarter and the fiscal 1996 second
quarter. The principal differences from the federal statutory
rate were state income taxes.
Net income. As a result of the above factors, results of
operations improved as net income increased $1,215,000, or 150%,
to $2,024,000 in the fiscal 1997 second quarter compared to
$809,000 in the fiscal 1996 second quarter.
Twenty-six Weeks Ended August 3, 1996 Compared to the Twenty-
six Weeks Ended July 30, 1995. Due to the seasonal nature of the
Company's business, the results of operations for interim periods
are not necessarily indicative of the results of operations for
the full fiscal year. The following table presents selected
results of operations expressed as a percent of net sales:
26 Weeks Ended
August 3, July 30,
1996 1995
Net sales 100.0% 100.0%
Gross margin 32.8% 31.9%
Selling, general and
administrative expense 25.0% 25.6%
Advertising 3.8% 4.5%
Depreciation & amortization 1.7% 1.6%
Interest expense 0.7% 0.9%
Income (loss) before income taxes 1.6% (0.7%)
Net sales. Comparable store sales have declined 3.8% during
the twenty-six weeks ended August 3, 1996 compared to the twenty-
six weeks ended July 30, 1995. Except for the February clearance
period, the Company has been focused on following a strategy of
less aggressive advertising and maintaining lower inventory
levels as compared to the twenty-six weeks ended July 30, 1995.
Net sales during the twenty-six weeks ended August 3, 1996 also
reflect a net decrease of $797,000 associated with store openings
and closings. The Company opened 12 new stores while closing 9
during the twenty-six weeks ended August 3, 1996.
Gross margin. Gross margin dollars declined in comparing
the twenty-six weeks ended August 3, 1996 to the twenty-six weeks
ended July 30, 1995 while the gross margin percent improved. The
decline in gross margin dollars occurred during the first quarter
and was primarily related to a strategy of positioning inventory
through clearance activity which occurred principally in
February. Subsequent to this repositioning, the gross margin
percent has improved as the result of reduced markdowns and
establishing higher initial mark-ups. This margin percent
improvement increased gross margin dollars $296,000 on a net
sales decline of $4,515,000 during the second quarter. Average
inventory per selling square foot was 4.2% lower during the
twenty-six weeks ended August 3, 1996 as compared to the twenty-
six weeks ended July 30, 1995.
Selling, general and administrative expense. The decline in
selling, general and administrative expense in the twenty-six
weeks ended August 3, 1996 as compared to the twenty-six weeks
ended July 30, 1995 is primarily due to the continuing trend of
lower handling costs associated with a reduction in merchandise
purchases and lower personnel costs from implementing improved
business processes and management practices. Expense reductions
achieved from comparable stores were $2,054,000. The costs
associated with new stores were more than offset by savings
realized from stores closed as the net decrease in non-comparable
stores (new and closed stores) was $191,000.
Advertising expense. Advertising expense decreased
$1,231,000, or 19.5%, in the twenty-six weeks ended August 3,
1996 compared to the twenty-six weeks ended July 30, 1995. See
factors in discussion of second quarter results above.
Interest expense. Interest expense was lower in the twenty-
six weeks ended August 3, 1996 compared to the twenty-six weeks
ended July 30, 1995 due to lower average borrowings and interest
rates. Average borrowings were $21,806,000 during the twenty-six
weeks ended August 3, 1996 as compared to $23,204,000 in the
twenty-six weeks ended July 30, 1995. The interest rate was lower
due to the new revolving credit agreement entered into in July
1995 (see "Liquidity and Capital Resources").
Tax expense. The Company's effective tax rate was 39%
during the twenty-six weeks ended August 3, 1996 and July 30,
1995. The principal differences from the federal statutory rate
were state income taxes.
Net income (loss). As a result of the above factors,
results of operations improved as the Company is reporting net
income of $1,283,000 for the twenty-six weeks ended August 3,
1996 as compared to a net loss of $621,000 in the twenty-six
weeks ended July 30, 1995.
Liquidity and Capital Resources
The Company's primary cash requirements are for seasonal
working capital and capital expenditures in connection with its
new store expansion and remodeling programs, equipment and
software for information systems and distribution center
facilities. The Company's inventory levels build in early spring
for the Easter and spring selling season, in early summer for the
back-to-school selling season, and throughout the fall, peaking
during the Christmas selling season. Accounts receivable,
consisting principally of layaway receivables, peak during July
due to the back-to-school layaway promotion and decrease during
the third quarter as payments are received. Capital expenditures
typically occur throughout the year.
The Company's primary sources of funds are cash flow from
operations, borrowings under its working capital and letter of
credit facility and trade accounts payable. Terms for trade
accounts payable are generally 30 days with the total of trade
accounts payable fluctuating with the timing of merchandise
receipts.
The Company also has a private label charge card program.
The charge card receivables are sold to a third party processor
on a non-recourse basis at 100% of face value, less a stated
discount rate. The Company is also obligated to pay a fee to the
third party processor for bad debt losses equal to 50% of such
losses in excess of 2.25% of annual private label charge card
sales. The Company records the discount and accrues for its
estimated obligation for bad debt expense at the time the
receivables are sold.
The Company had net operating loss carryforwards of
approximately $16,800,000 at the end of fiscal 1996. The benefit
of the net operating loss carryforwards has been fully recorded
as a deferred tax asset. The Company can deduct approximately
$2,700,000 of the loss carryforward each year through fiscal 2007
which, at current effective income tax rates, produces a tax
savings annually of approximately $1,050,000.
The increase in cash flow from operating activities in the
twenty-six weeks ended August 3, 1996 as compared to the twenty-
six weeks ended July 30, 1996 was due in part to improved
operating results. However, the principal cause for improvement
was a reduction during the twenty-six weeks ended August 3, 1996
in required working capital, contrasted to an increase in the
twenty-six weeks ended July 30, 1995. The change in working
capital was due to lower inventory investment during the current
year. Purchases of inventory during the twenty-six weeks ended
August 3, 1996 were approximately $18,806,000 less than during
the twenty-six weeks ended July 30, 1995. Outstanding borrowings
of long-term debt, which were $9,324,000 higher at the end of
fiscal 1996 compared to the end of fiscal 1995, were $13,638,000
lower at August 3, 1996 as compared to July 30, 1995.
Net cash used for capital expenditures was $1,996,000 and
$2,276,000 in the twenty-six weeks ended August 3, 1996 and July
30, 1995, respectively. These amounts included the following
expenditures in the periods presented (dollars in thousands):
26 Weeks Ended
August 3, July 30,
1996 1995
Store expenditures:
New stores $603 $941
Remodels, expansions, and
relocations 224 678
Other 95 255
Information systems 596 221
Distribution center 299 -
Other 179 181
Total $1,996 $2,276
In July 1995, the Company entered into an Amended and
Restated Loan Agreement (the "Agreement") maturing July 26, 2000.
The Agreement provides for revolving credit borrowings, letters
of credit and $20 million of long-term debt. The long-term
portion requires a $2 million annual payment. Maximum borrowings
under the Agreement are $60 million reduced annually by the $2
million long-term principal payment. The rate of interest on
borrowings is at an index rate (thirty-day dealer commercial
paper rate or LIBOR rates for selected terms) plus 2% per annum
plus a fee of 0.25% on the unused portion of the facility. The
Agreement is secured by a lien on substantially all assets of the
Company. Proceeds from the new agreement were used to pay off
the $15,368,000 secured note payable to the former Bank Group
which had provided for $3 million annual principal reductions and
matured June 1, 1999. By paying off the Bank Group secured
note, the Company achieved a slight improvement in interest cost
and reduced annual principal payment obligations of $3.0 million
to $2.0 million.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently subject to certain litigation in
the normal course of business which, in the opinion of
management, will not result in a material adverse effect on the
Company's business, financial position, or results of operations.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1996 Annual Meeting of Shareholders of the Company was
held on June 10, 1996. The following matters were submitted to a
vote of the Company's shareholders:
1. The election of five directors (constituting the entire
board of directors) for the ensuing year and until their
successors are duly elected and qualified. The results of the
election for each such director were as follows:
Director Votes For Votes Withheld
John J. Wiesner 8,033,543 2,411
James J. Gaffney 8,033,543 2,411
Alan Melamed 8,027,238 8,716
Willard C. Shull, III 8,033,543 2,411
Jeffrey I. Werbalowsky 8,027,238 8,716
2. The ratification of the selection of Deloitte & Touche
LLP as independent auditors of the Company for the fiscal year
ending February 1, 1997. The results of the vote with respect to
such proposal were as follows:
Votes Against Abstentions and
Votes For or Withheld Broker Non-
Votes
Ratification of Selection of
Independent Auditors 8,035,954 None None
ITEM 5. OTHER INFORMATION
The Company announced that its common stock was listed for
trading on the Nasdaq National Market System commencing on
Wednesday, August 7, 1996. Previously, trades in the Company's
common stock had been entered on the Nasdaq Bulletin Board by
certain broker dealers. The Company's trading symbol on the
Nasdaq National Market System will continue to be "CRAU."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits are filed as part of
this Form 10-Q:
No. Description
10.1 Form of Stock Option Agreement dated June 10,
1996 evidencing the grant of options to
purchase 5,000 shares of Common Stock of the
Company to each of the following directors of
the Company: James J. Gaffney, Alan Melamed,
Willard C. Shull, III, and Jeffrey I.
Werbalowsky.
10.2 Amended Severance Compensation Agreement dated
May 31, 1996 to Severance Agreement dated April
1, 1995, between the Company and William A.
North.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K: There were no reports on Form 8-K
filed by the Company during the fiscal quarter ended August 3,
1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
C.R. ANTHONY COMPANY
(Registrant)
Dated: August 23, 1996 /s/ Michael E. McCreery
Michael E. McCreery
Vice Chairman, Chief
Administrative Officer and
Treasurer (principal
financial officer)
Dated: August 23, 1996 /s/ Richard E. Stasyszen
Richard E. Stasyszen
Vice President and
Controller (chief accounting
officer)
EXHIBIT INDEX
No. Description
10.1 Form of Stock Option Agreement dated June 10,
1996 evidencing the grant of options to purchase
5,000 shares of Common Stock of the Company to
each of the following directors of the Company:
James J. Gaffney, Alan Melamed, Willard C. Shull,
III, and Jeffrey I. Werbalowsky.
10.2 Amended Severance Compensation Agreement
dated May 31, 1996 to Severance Agreement dated
April 1, 1995, between the Company and William A.
North.
27.1 Financial Data Schedule.
C.R. ANTHONY COMPANY
STOCK OPTION AGREEMENT
(Nonqualified Options)
This Stock Option Agreement ("Agreement") is made
effective June 10, 1996, between C.R. Anthony Company, an
Oklahoma corporation ("Corporation"), and _________________,
a director of the Corporation ("Holder").
WHEREAS, the Board of Directors has determined that it
is in the best interests of the Corporation that Corporation
freeze at current levels monthly retainer fees and fees for
attendance at meetings of the Board of Directors paid to non-
employee directors of the Corporation;
WHEREAS, the Corporation desires to compensate its non-
employee directors for continuing service as directors
through the grant of stock options in lieu of increased cash
fees as provided herein;
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth and for other good and
valuable consideration, the parties hereto agree as follows:
1. Grant of Stock Option. The Corporation hereby
grants to Holder the right and option ("Option") to purchase
an aggregate of 5,000 shares of Common Stock, par value
$0.01 per share ("Common Stock"), of the Corporation on, and
subject to, the terms and conditions set forth herein.
2. Purchase Price. The purchase price of the
shares of Common Stock subject to the Option shall be $3.00
per share. The purchase price may be paid in cash or by
certified check, bank draft or money order payable to the
Corporation.
3. Option Vesting Schedule. The Option shall be
exercisable as follows:
Number of Shares First Date of Exercise
1,666 June 10, 1997
1,667 June 10, 1998
1,667 June 10, 1999
Such shares may be purchased either in whole or in part
at any time and from time to time on or after the First Date
of Exercise (as set forth immediately above) and prior to
the expiration of the Option set forth in Section 5 below.
4. Acceleration of Right to Exercise. Anything
above to the contrary notwithstanding, if the Holder dies or
becomes disabled, or there is a change in control of the
Corporation, the Option shall be immediately exercisable in
full.
Disability shall have the same meaning as is then
applicable to the Corporation's welfare benefit plan
governing long term disability income payments.
Change of control means the occurrence of any of the
following events:
(I) The acquisition by any "Person" (as such
term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act")), of "Beneficial Ownership" (within the
meaning of Rule 13d-3 under the Exchange Act) of voting
securities of the Corporation constituting in excess of
50% of the combined voting power of the Corporation's
then outstanding voting securities. For purposes of
the preceding sentence, the term "Person" shall not
include any member or members of the management of the
Corporation, any employee benefit plan (including,
without limitation, any employee stock ownership or
purchase plan), or a trust forming a part thereof,
maintained by the Corporation or any Subsidiary (as
hereinafter defined), or the Corporation or any
corporation or other Person of which a majority of its
voting power or equity securities or equity interest is
owned, directly or indirectly, by the Corporation (a
"Subsidiary");
(ii) The consummation of any merger,
consolidation or reorganization pursuant to which the
shareholders of the Corporation immediately prior to
such merger, consolidation or reorganization do not
have Beneficial Ownership immediately following such
merger, consolidation or reorganization of at least 51%
of the combined voting power of the outstanding voting
securities of the corporation or other Person resulting
from such merger, consolidation or reorganization;
(iii) Any sale, lease, exchange or other transfer
of assets of the Corporation (other than in the
ordinary course of business) to any Person (other than
a Subsidiary) that results in the reduction of the
total square footage of retail space maintained by the
Corporation in an amount equal to or greater than 40%
of the total square footage of retail space maintained
by the Corporation as of the date of the first such
sale, lease, exchange or other transfer subsequent to
the date hereof; or
(iv) The approval by the shareholders of the
Corporation of any plan or proposal for the liquidation
or dissolution of the Corporation."
5. Term of Option. The Option shall expire on the
earlier of: (a) 5:00 p.m., Oklahoma time, on June 10, 2006;
(b) 90 days after termination of the Holder's service (by
resignation, removal, failure to stand for reelection or
otherwise) as a director of the Corporation; or (c) such
reasonable time as is set by action of the Board of
Directors of the Corporation prior to or following any
change of control of the Corporation as set forth in
Section 4 above.
If the Holder dies or becomes disabled while serving as
a director of the Corporation or within the period of time
after termination of service during which the Holder was
entitled to exercise the Holder's Option as herein provided,
the Holder, the Holder's estate, personal representative, or
beneficiary shall have the right to exercise his Option at
any time within 12 months from the date of the Holder's
death or disability.
The Holder shall have none of the rights of a
shareholder with respect to the shares of Common Stock
subject to the Option until such shares shall be issued to
the Holder upon the exercise of the Option.
6. Nontransferability. Neither the Option nor any
other right under this Agreement shall be assignable or
transferable by Holder, other than by the Holder's will or
the laws of descent and distribution. During the life of
Holder, the rights and privileges of Holder hereunder may be
exercised only by Holder. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the
Option, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without
effect.
7. Recapitalization. The number of shares of
Common Stock covered by the Option, and the price per share
thereof, shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of
Common Stock resulting from a subdivision or consolidation
of shares or other capital adjustment, or the payment of a
stock dividend or other increase or decrease in such shares,
effected without receipt of consideration by the
Corporation; provided, however, any fractional shares
resulting from any such adjustment shall be eliminated.
8. Reorganization of Corporation. If the
Corporation shall be the surviving or resulting corporation
in any merger or consolidation which does not result in
change of control of the Corporation, the Option shall
pertain to and apply to the securities to which a holder of
the number of shares of Common Stock subject to the Option
would have been entitled.
9. Exercise of Option. Subject to the terms and
conditions of the Agreement, the Option may be exercised by
written notice to the Corporation, C.R. Anthony Company, 701
North Broadway, Oklahoma City, Oklahoma 73102, Attn:
Secretary, which notice shall state the election to exercise
the Option and the number of shares in respect of which it
is being exercised; shall fix a date (not less than 10
business days from the date such notice is received by the
Corporation) for the delivery of the certificate or
certificates for said shares and the payment of the purchase
price therefor; and shall be signed by the Holder. On the
date so fixed and provided all of the conditions of this
Agreement are satisfied, a certificate or certificates for
the shares as to which the Option shall have been so
exercised, registered in the name of the Holder, shall be
issued by the Corporation and delivered to or upon the order
of such person or persons, against payment in full at the
above mentioned address of the purchase price of said shares
in accordance with Section 2 above. All shares issued as
provided herein will be fully paid and nonassessable.
10. Availability of Shares. The Corporation shall
at all times during the term of the Option reserve and keep
available in the form of authorized and unissued shares of
Common Stock or shares of Common Stock held as treasury
stock such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement and
shall pay all fees and expenses necessarily incurred by the
Corporation in connection with the issuance of such shares
and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of
counsel for the Corporation, shall be applicable thereto.
11. Investment Intent. If, at the time of any
exercise of the Option, it is necessary or desirable, in
order to comply with any applicable laws or regulations
relating to the sale of securities, that the Holder shall
agree that the Holder will purchase the shares that are
subject to the Option for investment and not with any
present intention to resell those shares, the Holder will
execute and deliver to the Corporation an agreement to such
effect in form and substance requested by the Corporation.
12. Registration under Securities Act of 1933. If,
at the time of any exercise of the Option, the Corporation
is filing reports with the Securities and Exchange
Commission pursuant to Section 15(d) of the Securities
Exchange Act of 1934, as amended, or has a class of equity
securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, the Corporation
will use its best efforts to cause the Common Stock which
may be acquired pursuant to the exercise of the Option to be
registered under the Securities Act of 1933, as amended.
13. Governing Law. This Agreement shall be subject
to, governed by, the laws of the State of Oklahoma
irrespective of the fact that one or more of the parties now
is, or may become, a resident of a different state.
14. Amendment. This Agreement may be amended only
by an instrument in writing signed by each of the parties
hereto.
15. Section Headings. Section headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its officer thereunto duly
authorized, and the Holder has hereunto set the Holder's
hand, all on the day and year first above written.
CORPORATION:
C.R. Anthony Company
By:_________________________________
Authorized Officer
HOLDER:
____________________________________
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> AUG-03-1996
<CASH> 5576
<SECURITIES> 0
<RECEIVABLES> 12292
<ALLOWANCES> 100
<INVENTORY> 88776
<CURRENT-ASSETS> 109431
<PP&E> 28230
<DEPRECIATION> 13120
<TOTAL-ASSETS> 133157
<CURRENT-LIABILITIES> 45489
<BONDS> 18064
0
0
<COMMON> 90
<OTHER-SE> 68419
<TOTAL-LIABILITY-AND-EQUITY> 133157
<SALES> 133878
<TOTAL-REVENUES> 133878
<CGS> 89986
<TOTAL-COSTS> 89986
<OTHER-EXPENSES> 2253
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 925
<INCOME-PRETAX> 2104
<INCOME-TAX> 821
<INCOME-CONTINUING> 1283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1283
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
Exhibit 10.2
C.R. ANTHONY COMPANY
AMENDED SEVERANCE COMPENSATION AGREEMENT
This Amended Severance Compensation Agreement is entered
into as of this 31st day of May, 1996, between C.R. Anthony
Company, an Oklahoma corporation (the "Company"), and William A.
North ("North").
WHEREAS, the Company and North entered into that certain
North Severance Compensation Agreement dated as of April 1, 1995
(the "1995 Agreement"); and
WHEREAS, the Company and North desire to amend and restate
in its entirety the 1995 Agreement;
NOW, THEREFORE, in consideration of the promises and mutual
agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree to restate and amend in
its entirety the 1995 Agreement as follows:
1. Definitions. For purposes of this Agreement, the
following capitalized terms shall have the following meanings:
(a) "Cause" shall mean (i) committing fraud, theft,
misappropriation, embezzlement, larceny or other felony,
willful misconduct, gross malfeasance or breach of trust by
North resulting or intended to result directly or indirectly
in gain or personal enrichment to North at the expense of
the Company, (ii) committing any other crime involving moral
turpitude which materially impairs North's ability to
perform his duties or the business reputation of the
Company, or (iii) continued and deliberate failure by North
to substantially perform North's employment duties with the
Company. However, anything in the preceding sentence to the
contrary notwithstanding, "Cause" shall not include the
following: (i) any act or omission that was the result
solely of poor business judgement or simple negligence; (ii)
any act or omission believed by North in good faith to have
been in or not opposed to the interests of the Company;
(iii) any act or omission in respect of which North met the
applicable standard of conduct for indemnification against
liabilities and expenses under the Company's Certificate of
Incorporation; or (iv) any act or omission which occurred
more than 12 months prior to the Company's giving to North
the Notice of Intended Termination for Cause (as defined in
Section 3), unless the commission of such act or omission
was not at the time of commission or omission known to a
majority of the members of the Board of Directors of the
Company, in which case more than 12 months from the date the
commission or omission was known by a majority of the
members of the Board of Directors.
(b) "Corporate Transaction" shall mean a lease or sale
of all or substantially all of the Company's assets or a
merger, consolidation or reorganization in which the Company
is not the surviving entity.
(c) "Death" shall mean the death of North.
(d) "Disability" shall have the same meaning as is
then applicable under the Company's welfare benefit plan
governing long term disability income payments. If no such
plan is in effect at the time of any determination of
Disability, then Disability shall mean North's absence as a
result of physical or mental illness from his duties with
the Company on a full-time basis for six months and provided
that within 30 days after written notice of termination is
thereafter given by the Company to North as provided in
Section 3 North shall not have returned to the full-time
performance of North's duties with the Company.
(e) "Good Reason" shall mean the occurrence of any of
the following without North's prior written consent:
(i) Except as mutually agreed to by the Company
and North, the assignment to North by the Company of
duties that constitute a substantial reduction or
diminishment of the importance of North's position,
duties, responsibilities and status with the Company,
or a change in North's titles or offices that
constitutes a substantial reduction or diminishment of
importance of North's titles or offices;
(ii) A substantial reduction by the Company in
North's base salary as in effect on the date hereof or
as the same may be increased from time to time during
the term of this Agreement, other than as follows:
North's base salary for any fiscal year may be reduced
without giving rise to "Good Reason" if the base salary
of substantially all of the executive officers of the
Company and the members of the Operating Committee, or
similar successor committee or equivalent management
personnel (such committees and management personnel
being collectively hereinafter referred to as the
"Operating Committee") experience a percentage
reduction in base salary for such fiscal year that is
not more than 10 percentage points less than the
percentage reduction in the base salary of North for
such fiscal year, unless the effect of such reduction
is to reduce North's base salary to less than 80% of
his base salary as in effect on the date hereof (in
which case such reduction shall constitute "Good
Reason");
(iii) The failure by the Company to permit
North (a) to participate in any bonus or other cash or
equity incentive compensation plan, program or
arrangement made generally available to members of the
Operating Committee of the Company and in which North
is entitled to participate and (b) to have performance
goals, if applicable, and target bonus or other
incentive awards under any such plan program or
arrangement that are reasonable in relation to the
performance goals and awards established for members of
the Operating Committee.
(iv) The failure by the Company to permit North to
participate in any retirement plan or arrangement or
any insurance or other welfare benefit plan or
arrangement made generally available to members of the
Operating Committee of the Company and in which North
is entitled to participate on a basis reasonable in
relation to the basis on which the other members of the
Operating Committee of the Company are eligible to
participate;
(v) The relocation of the site from which North
is to perform his principal duties to any place 50 or
more miles outside of Oklahoma City, Oklahoma, except
in connection with the contemporaneous relocation of
the Company's principal executive offices and except
for required travel by North on the Company's business
to an extent substantially consistent with North's
business travel obligations as of the date hereof; or
(vi) The failure by the surviving or successor
entity in a Corporate Transaction to assume or
otherwise be liable for the obligations of the Company
under this Agreement.
(f) "Restriction Period" shall mean the period of two
years after the occurrence of a Severance Event, commencing
on the Termination Date.
(g) "Retirement" shall mean the termination by the
Company or North of North's employment based on North's
having reached age 65 or such other age as shall have been
fixed in any arrangement established with North's consent
with respect to North.
(h) "Severance Event" shall mean the occurrence of
any of the following:
(i) The Termination by North of his employment
with the Company for Good Reason in the manner set
forth in Section 4; or
(ii) The termination by the Company of North's
employment with the Company other than as a result of
the Death, Disability or Retirement of North or other
than for Cause in the manner set forth in Section 3.
(i) "Termination Date" shall mean the date on which
this Agreement terminates after and as a result of a
Severance Event.
2. Term. This Agreement shall commence as of the date
hereof and shall continue in effect through March 31, 2002;
provided, however, that commencing on April 1, 2002 and on each
April I thereafter, the terms of this Agreement shall
automatically be extended for one additional year unless, not
later than September 30 of the preceding year, the Company shall
give written notice to North that it does not wish to extend this
Agreement. In addition, this Agreement shall automatically
terminate following: (i) the termination by the Company of
North's employment with the Company as a result of Death,
Disability or Retirement or for Cause in the manner provided in
Section 3; (ii) the resignation or other termination by North of
his employment with the Company other than for Good Reason; or
(iii) the payment in full by the Company of any Severance Payment
(as defined in Section 5) required to be paid by the Company
pursuant to the terms of this Agreement. Upon termination of
this Agreement, North shall have no right to any payments
pursuant to this Agreement other than the payment of all or any
portion of the Severance Payment, if any, that was payable to
North pursuant to the terms of this Agreement prior to the
termination of this Agreement.
3. Procedures for Termination of Employment By the
Company. Any termination of North's Employment by the Company as
a result of the Death, Disability or Retirement of the Employee
or for Cause shall be communicated in the case of Death,
Disability or Retirement by a "Notice of Termination" or in the
case of termination for Cause by a "Notice of Intended
Termination for Cause". For purposes of this Agreement, a
"Notice of Termination" and a "Notice of Intended Termination for
Cause" shall mean a written notice which shall indicate those
specific provisions in this Agreement relied upon by the Company
and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
North's employment under the provision so indicated. Termination
of North's Employment on the basis of Death or Retirement shall
be deemed effective for purposes of the Agreement as the date of
death or retirement set forth in the Notice of Termination.
Termination of North's employment on the basis of Disability
shall be deemed effective for purposes of this Agreement 30 days
after Notice of Termination is given to North (provided that
North shall not have returned to the performance of North's
duties on a full-time basis during such 30-day period). If the
termination of North's employment is for Cause, such termination
shall be deemed effective for purposes of this Agreement only
after the delivery to North of a copy of a resolution, duly
adopted by the affirmative vote of not less than three-fourths of
the outside members of the Company's Board of Directors then in
office at a meeting of the Board called and held for the purpose,
finding that North was guilty of conduct set forth in the Section
l(a) hereof constituting "Cause" and specifying the particulars
thereof in reasonable detail. Any such meeting shall be held
following the delivery of the Notice of Intended Termination for
Cause and at a time calculated to provide reasonable notice to
North and an opportunity for North, together with North's
counsel, to be heard before the Board.
4. Procedures for Termination of Employment By North for
Good Reason. North shall be entitled to terminate his
employment with the Company for Good Reason. Any termination by
North of his employment with the Company for Good Reason shall be
communicated to the Company by a "Notice of Termination for Good
Reason", which Notice must be given within three months after the
occurrence of the event constituting Good Reason. For purposes
of this Agreement, a "Notice of Termination for Good Reason"
shall mean a written notice which shall indicate those specific
provisions in this Agreement relied upon by North and which sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination by North of his employment with
the Company for Good Reason under the provision so indicated.
Termination by North of his employment for Good Reason shall be
deemed effective for purposes of this Agreement only if within 30
days following receipt by the Company of the Notice of
Termination for Good Reason the Company shall have failed to cure
the circumstances constituting Good Reason.
5. Severance Payment.
(a) Following the occurrence of a Severance Event, the
Company shall pay to North in a lump sum, in cash, on the
thirtieth day following the Termination Date, an amount
equal to (i) North's total cash compensation for the twelve-
month period immediately preceding the Severance Event plus
(ii) the dollar amount of the annual incentive cash bonus
then most recently paid to or earned by North by the Company
multiplied by a fraction the numerator of which is the
number of days elapsed in the Company's fiscal year to the
Termination Date and the denominator of which is 365. Such
amount shall be referred to herein as a "Severance Payment."
(b) The Company shall not under any circumstances be
required to make more than one Severance Payment to North
pursuant to the terms of this Agreement.
(c) Anything herein to the contrary notwithstanding,
any payments required to be made by the Company hereunder to
North or his legal representatives shall be subject to
withholding to the extent required under any applicable
statutes, rules or regulations.
6. No Obligation to Mitigate Damages: No Effect on Other
Contractual Rights; No Right to Employment.
(a) North shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be
reduced by any compensation earned by North as a result of
employment by another employer, or otherwise.
(b) The provisions of this Agreement, and any payment
provided for hereunder, shall be expressly in replacement of
any cash benefits payable to North as a result of the
termination for any reason of the employment of North under
any and all employment, severance or agreements, plans,
programs or arrangements of the Company, whether written or
unwritten. The effect of the termination of the employment
of North on North's continuing participation in (and the
costs to North of such participation) any insurance or other
welfare benefit plans or arrangements maintained by the
Company and on any outstanding stock options held by North
shall be as provided in the plans, documents and agreements
governing such plans, arrangements and stock options.
(c) Nothing in this Agreement shall confer to North a
right to employment by the Company, and his employment by
the Company may be terminated at any time and for any reason
by the Company, subject only to any other express written
agreements between North and the Company and to the
Company's obligation to pay any sums payable to North
pursuant to this Agreement.
7. Confidential Information; Nonsolicitation.
(a) Confidential Information. Except as permitted or
directed by Company's Board of Directors, during the term of
this Agreement or at any time thereafter, North shall not
divulge, furnish or make accessible to anyone or use in any
way (other than in the ordinary course of Company's
business) any confidential or secret knowledge or
information of the Company which North has acquired or
become acquainted with or will acquire or become acquainted
with during the term of his employment, whether developed by
himself or others, concerning any trade secrets or
confidential, secret or proprietary information or plans,
directly or indirectly useful in any aspect of the business
of the Company, any customer or supplier lists of the
Company, any confidential or secret development work of the
Company or any other confidential information or secret or
proprietary aspects of the business of the Company
("Confidential Information"). North acknowledges that the
Confidential Information constitutes a unique and valuable
asset of the Company and represents a substantial investment
of time and expense by the Company, and that any disclosure
or other use of any Confidential Information other than for
the sole benefit of the Company would be wrongful and would
cause irreparable harm to the Company. The foregoing
obligations of confidentiality shall not apply to any
Confidential Information which is now published or which
subsequently becomes generally publicly known other than as
a direct or indirect result of the breach of this Agreement
by North or which is required to be disclosed by North by
order of any court or governmental agency or pursuant to any
statute or governmental regulation. This covenant shall not
be construed to limit in any way North's obligation not to
use or disclose Confidential Information.
(b) Nonsolicitation Covenants.
(1) While North is an employee of the Company and
thereafter during the Restriction Period, without the
Company's prior written approval, North shall not, directly
or indirectly: (i) employ, attempt to employ, solicit for
employment by others or induce or attempt to influence a
termination of employment by any of the Company's employees;
(ii) induce or attempt to induce a consultant or other
independent contractor to sever that person's relationship
with the Company; or (iii) solicit, cause to be solicited or
accept the disclosure of any Confidential Information for
any purpose whatsoever or for any other party.
(2) If, in any judicial proceeding, a court shall
refuse to enforce any provision of this Section 7(b) because
the time limit is too long, the Company and North hereby
expressly understand and agree that for the purpose of such
proceeding, such time limitation shall be deemed reduced to
the extent necessary to permit the enforcement of this
Section 7(b).
(3) If, in any judicial proceeding, a court shall
refuse to enforce any provision of this Section 7(b) because
it is more extensive than necessary to effectuate the
purposes of this Agreement, the Company and North expressly
understand and agree that for the purpose of such
proceeding, such limitation shall be deemed reduced to the
extent necessary to permit the enforcement of the provisions
of this Section 7(b).
(c) Remedies. North acknowledges and agrees that the
restrictions set forth in this Section 7 are reasonable and
necessary to protect the legitimate interests of the
Company, that irreparable harm will be caused to the Company
by a violation hereof, and that the Company therefore shall
be entitled to injunctive and other equitable relief as
appropriate in the event of a breach hereof by North;
provided, however, that such remedy shall not be exclusive
of any other legal remedies available to the Company.
8. Successor to the Company. During the term hereof, the
Company will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to
North, expressly, absolutely and unconditionally to assume and
agree to this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no
such succession or assignment had taken place.
9. Assignability. Neither this Agreement nor any rights
of North hereunder shall be assignable or transferable by North;
provided, however this Agreement shall inure to the benefit of
and be enforceable by North's personal and legal representatives,
executors, administrators, successors, heirs, distributes,
devisee and legatees. If North should die while any amounts are
still payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to North's devisee, legatee, or other
designee, or, if there be no such designee, to North's estate.
10. Notices. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified mail, return
receipt requested, postage prepaid, as follows:
If to the Company:
If by Delivery:
C.R. Anthony Company
701 N. Broadway
Oklahoma City, OK 73102
Attn: Chief Executive Officer
If by Mail:
C.R. Anthony Company
P. O. Box 25725
Oklahoma City, Oklahoma 73125-0725
Attn: Chief Executive Officer
If by mail or delivery to North:
William A. North
4709 Doral Court
Oklahoma City, Oklahoma 73142
or such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
11. Miscellaneous No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification
or discharge is agreed to in a writing signed by North and the
Company. No waiver by either party hereto at any time of any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements
relating hereto, and no agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of State of Oklahoma.
The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full
force and effect. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
12. Legal Fees and Expenses. The Company and North shall
each pay their respective legal fees and expenses which may be
incurred in connection with this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
C.R. ANTHONY COMPANY,
an Oklahoma corporation
By:/s/ John J. Wiesner
John J. Wiesner,
Chairman of the Board and
Chief Executive Officer
"NORTH"
/s/ William A. North
William A. North
