FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _________________
Commission File No. 0-11682
S & K FAMOUS BRANDS, INC.
................................................................................
(Exact name of registrant as specified in its charter)
Virginia 54-0845694
......................................... .............................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11100 West Broad Street, P. O. Box 31800, Richmond, Virginia 23294-1800
................................................................................
(Address of principal executive offices)
Registrant's telephone number, including area code: (804) 346-2500
............................
Not Applicable
................................................................................
Former name, former address and former fiscal year, if changed
since last report.
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 the number of shares outstanding of each of the Registrant's
classes of common stock as of July 31, 1999.
4,694,933 shares of Common Stock, $0.50 par value
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
S & K FAMOUS BRANDS, INC.
Statements of Income
(In thousands, except per share amounts)
(unaudited)
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
July 31, August 1, July 31, August 1,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales........................................ $ 35,667 $ 33,852 $ 75,466 $ 70,961
Cost of sales ................................... 18,833 17,872 39,345 37,189
---------- ---------- ---------- ----------
Gross profit .................................... 16,834 15,980 36,121 33,772
Other costs and expenses:
Selling, general and administrative .......... 15,201 13,588 31,250 28,100
Interest...................................... 287 186 502 295
Depreciation and amortization ................ 760 688 1,489 1,340
Other, net ................................... (16) (38) (20) (41)
---------- ---------- ---------- ----------
Income before income taxes ...................... 602 1,556 2,900 4,078
Provision for income taxes ...................... 229 591 1,102 1,550
---------- ---------- ---------- ----------
Net income ...................................... $ 373 $ 965 $ 1,798 $ 2,528
========== ========== ========== ==========
Net income per common share:
Basic......................................... $ 0.08 $ 0.19 $ 0.38 $ 0.50
========== ========== ========== ==========
$ $
Diluted....................................... $ 0.08 $ 0.19 0.38 0.49
========== ========== ========== ==========
Weighted average common shares
outstanding - basic........................... 4,747 5,076 4,763 5,052
========== ========== ========== ==========
Weighted average common shares outstanding
including dilutive potential common shares.... 4,766 5,181 4,780 5,160
========== ========== ========== ==========
See Notes to Financial Statements.
</TABLE>
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<TABLE>
S & K FAMOUS BRANDS, INC.
Balance Sheets
(In thousands, except per share amounts)
(unaudited)
<CAPTION>
July 31, August 1, January 30,
1999 1998 1999
------------ ----------- --------------
Assets
<S> <C> <C> <C>
Current assets:
Cash.............................................. $ 535 $ 482 $ 547
Accounts receivable............................... 353 399 862
Merchandise inventories........................... 53,056 48,382 50,779
Prepaid income taxes.............................. 705 421 --
Other current assets.............................. 3,550 2,288 3,286
------------ ----------- --------------
Total current assets............... 58,199 51,972 55,474
Property and equipment, at cost:
Land and buildings............................... 7,237 7,250 7,229
Furniture, fixtures and equipment ............... 15,496 13,710 14,550
Leasehold improvements........................... 16,447 14,540 15,699
------------ ----------- --------------
39,180 35,500 37,478
Less: Accumulated depreciation and amortization. 18,634 16,776 17,765
------------ ----------- --------------
20,546 18,724 19,713
Other assets ....................................... 4,483 3,660 4,109
------------ ----------- --------------
$ 83,228 $ 74,356 $ 79,296
============ =========== ==============
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt ............ $ 180 $ 180 $ 180
Accounts payable ................................ 4,905 4,130 6,345
Accrued expenses:
Accrued compensation and related items....... 735 1,014 1,599
Current and deferred income taxes............ -- -- 624
Other current liabilities.................... 1,734 1,601 1,705
------------ ----------- --------------
Total current liabilities............. 7,554 6,925 10,453
Industrial Development Revenue Bond................. 1,710 1,890 1,800
Long-term debt...................................... 19,915 11,374 11,707
Deferred income taxes............................... 1,649 1,542 1,619
Commitments
Shareholders' equity:
Preferred stock, $1 par value; authorized shares,
500; issued outstanding shares, none..........
Common stock, $.50 par value, authorized shares,
10,000; issued and outstanding shares, 4,695,
5,074 and 4,874, respectively................. 2,347 2,537 2,437
Capital in excess of par value.................. 4,209 7,634 5,819
Notes receivable--Stock Purchase Loan Plan....... (2,537) (1,171) (1,122)
Retained earnings............................... 48,381 43,625 46,583
------------ ----------- --------------
52,400 52,625 53,717
------------ ----------- --------------
$ 83,228 $ 74,356 $ 79,296
============ =========== ==============
See Notes to Financial Statements.
</TABLE>
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<PAGE>
<TABLE>
S & K FAMOUS BRANDS, INC.
Statements of Cash Flows
Increase (Decrease) in Cash
(in thousands)
(unaudited)
<CAPTION>
Six Months Ended
----------------
July 31, August 1,
1999 1998
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income....................................................... $ 1,798 $ 2,528
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization................................ 1,702 1,550
Loss on property dispositions, net........................... 88 54
Other ....................................................... 31 45
Changes in assets and liabilities:
Accounts receivable....................................... 509 155
Inventories............................................... (2,277) (4,486)
Other current assets...................................... (264) 882
Other assets.............................................. (374) (260)
Accounts payable and accrued expenses..................... (2,147) (5,199)
Income taxes and deferred income taxes.................... (1,299) (892)
-------------- --------------
Net cash used for operating activities........................... (2,233) (5,623)
-------------- --------------
Cash flows from investing activities:
Capital expenditures.............................................. (2,623) (2,495)
-------------- --------------
Cash flows from financing activities:
Net borrowings under revolving bank lines of credit............... 8,177 8,006
Proceeds from exercise of stock options........................... -- 234
Principal paydown on Stock Purchase Loan Plan..................... 36 118
Reduction of long-term debt....................................... (90) (90)
Repurchase of common stock........................................ (3,279) (261)
-------------- --------------
Net cash provided by financing activities......................... 4,844 8,007
-------------- --------------
Net decrease in cash................................................. (12) (111)
Cash at beginning of period.......................................... 547 593
-------------- --------------
Cash at end of period................................................ $ 535 $ 482
============== ==============
Supplemental cash flow information:
Cash paid during the period for:
Interest....................................................... $ 462 $ 261
Income taxes................................................... 2,400 2,512
See Notes to Financial Statements.
</TABLE>
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<PAGE>
S & K FAMOUS BRANDS, INC.
Notes to Financial Statements
(unaudited)
A. Accounting Policies
The accompanying unaudited interim financial statements have been prepared
by the Company in accordance with the regulations of the Securities and Exchange
Commission in regard to quarterly reporting. In the opinion of the Company, the
statements include all adjustments, consisting only of normal recurring
adjustments, which are necessary for a fair representation of the financial
position and results of operations for interim periods.
B. Interim Results of Operations
The Company's business is highly seasonal, with peak sales periods
occurring during its fourth fiscal quarter which includes the Christmas season.
The net earnings of any interim quarter are seasonally disproportionate to net
sales since administrative and certain operating expenses remain relatively
constant during the year. Consequently, interim results should not be considered
necessarily indicative of the results for the entire fiscal year.
C. Expansion
Since the end of the first quarter, the Company has opened three new
stores totaling approximately 14,000 square feet.
S&K Store Locations Date Opened Square Footage
------------------- ----------- --------------
Ohio: Columbus May 21, 1999 5,000
Huber Heights May 21, 1999 5,000
Virginia: Lynchburg August 3, 1999 4,135
Since January 30, 1999 the Company has opened a total of ten new stores totaling
approximately 52,000 square feet.
During the second quarter, the Company closed four under-performing
stores: Terrell, Texas (3,000 square feet); Martinsburg, West Virginia (3,580);
one of its stores in Raleigh, North Carolina (4,000) and one of its stores in
Nashville, Tennessee (4,000). These stores had not met the Company's sales and
profitability expectations. In addition, the Company relocated a store in
Lynchburg, Virginia (3,150). Year-to-date, the Company has closed nine stores.
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Item 2. MANAGEMENT'S DISCUSSION AND FINANCIAL REVIEW
Information regarding forward-looking statements.
The statements contained in this quarterly report that are not historical
facts, including statements about management's expectation for fiscal 2000 and
beyond, may be forward-looking statements. The forward-looking statements are
subject to certain risks and uncertainties which could cause actual results to
differ materially from historical results or those anticipated. Readers are
cautioned not to place undue reliance on these forward-looking statements.
Factors that could cause the Company's actual results to differ materially from
management's projections, forecasts, estimates and expectations include, but are
not limited to, those discussed in the Company's Annual Report on Form 10-K.
Three Months and Six Months Ended July 31, 1999 Compared to Three Months and Six
Months Ended August 1, 1998.
RESULTS OF OPERATIONS
The following table sets forth certain items in the Statements of Income
as a percentage of net sales for the three months and six months ended July 31,
1999 and August 1, 1998.
<TABLE>
<CAPTION>
Percentage of Net Sales
----------------------------------------------------------
Three Months Ended Six Months Ended
------------------------- --------------------------
7/31/99 08/01/98 7/31/99 08/01/98
------- -------- ------- --------
<S> <C> <C> <C> <C>
Net sales........................................ 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales.................................... 52.8 52.8 52.1 52.4
------- -------- ------- --------
Gross profit..................................... 47.2 47.2 47.9 47.6
Other costs and expenses:
Selling, general and administrative........... 42.6 40.1 41.4 39.6
Interest...................................... 0.8 0.6 0.7 0.4
Depreciation and amortization................. 2.1 2.0 2.0 1.9
Other, net.................................... -- (0.1) -- --
------- -------- ------- --------
Income before incomes taxes...................... 1.7 4.6 3.8 5.7
Provision for income taxes....................... 0.6 1.8 1.4 2.2
------- -------- ------- --------
Net income....................................... 1.1 % 2.8 % 2.4 % 3.5 %
======= ======== ======= ========
</TABLE>
Net sales in the second quarter ended July 31, 1999 increased by 5%, or
$1.8 million, over the same period last year, and reflects the net addition of
15 new stores. For the six-month period, net sales increased by 6%, or $4.5
million, over the same period last year. Comparable store sales, which were
approximately even with last year for the second quarter and for the first six
months, have been impacted by reduced customer traffic in a group of outlet
stores, lower than planned sales in sportcoats and the openings of new stores in
existing markets. During the second quarter, the Company opened three new
stores, closed four stores which were not meeting the Company's sales and
earnings expectations and relocated another. There were 233 stores in operation
as of July 31, 1999, compared to 218 stores at August 1, 1998.
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<PAGE>
Cost of sales in the second quarter of both fiscal 2000 and fiscal 1999
was 52.8% of net sales. For the six-month period, cost of sales was 52.1% of net
sales compared to 52.4% last year. The six-month .3% of net sales reduction was
primarily due to improved leveraging of central office and distribution center
expenses related to buying and processing merchandise.
Selling, general and administrative expenses in the second quarter ended
July 31, 1999 were 42.6% of net sales compared to 40.1% of net sales for the
second quarter of last year. This 2.5% of net sales increase was due primarily
to incurring planned store payroll and rent costs while sales were less than
plan, and to a lesser degree, higher group health claims. For the six-month
period, selling, general and administrative expenses were 41.4% of net sales
compared to 39.6% of net sales last year. This 1.8% of net sales increase was
primarily attributable to incurring planned store payroll, rent and other costs
while sales were less than plan.
Interest expense in the second quarter ended July 31, 1999 was .8% of net
sales compared to .6% of net sales for the second quarter last year. For the
six-month period, interest expense was .7% of net sales compared to .4% of net
sales last year. These increases were primarily attributable to higher average
borrowings this year which were used for the Company's stock repurchase program
and to fund the openings of new stores.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operating activities, including capital
expenditures for the openings of new stores, from internally generated funds and
from bank borrowings. The Company plans to open 20-25 new stores in fiscal 2000
and expects to close approximately fifteen under-performing stores. Through the
first six months ended July 31, 1999, the Company opened ten new stores, closed
nine under-performing stores and remodeled several others. The Company also
expects to continue to repurchase the Company's common stock in the open market.
The Company believes that its sources of liquidity and capital resources will
continue to be sufficient to fund its operations, capital expenditures and stock
repurchase initiatives.
Operating activities during the first six months of fiscal years 2000 and
1999 used net cash of $2.2 million and $5.6 million, respectively. This
fluctuation was primarily attributable to a reduction in the rate of growth of
inventory and related accounts payables in the current year.
Net cash used in investing activities in fiscal years 2000 and 1999 was
primarily for the purpose of store expansion and remodeling as well as point of
sale (POS) register purchases. Capital expenditures for the first six months of
fiscal years 2000 and 1999 approximated $2.6 million and $2.5 million,
respectively. In the first six months of fiscal 2000, the Company opened ten new
stores, converted one store to its superstore format, remodeled two others and
converted approximately 100 stores to its new POS register. For the same period
last year, the Company opened 11 new stores, converted one to its superstore
format, remodeled nine others and converted approximately 40 stores to its new
POS register.
Financing activities for the first six months of fiscal years 2000 and
1999 provided net cash of approximately $4.8 million and $8.0 million,
respectively. Financing activities primarily relate to fluctuations in the
borrowing levels under the Company's revolving credit agreements which have an
aggregate borrowing capacity of $30.0 million. During the first six months of
fiscal years 2000, and 1999, the Company used approximately $3.3 million and $.3
million, respectively, for the repurchase of its common stock. As of July 31,
1999, the Company had net unused commitments of approximately $11.4 million
under its revolving credit agreements.
7
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) a. Amended and Restated Articles of Incorporation
(conformed to include amendments to date).
b. Amended and restated Bylaws (conformed to include
amendments to date).
(4) a. Amendment dated August 3, 1999 extending the maturity
of the Credit Agreement dated March 10, 1994 between
the registrant and Crestar Bank.
b. Second Amendment dated July 30, 1999 to Amended and
Restated Credit Agreement dated May 31, 1997 between
registrant and First Union National Bank as
successor-in-interest to Signet Bank/Virginia.
(27) Financial Data Schedule (quarter ended July 31, 1999)
(b) There were no reports filed on Form 8-K during the three
months ended July 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
S & K FAMOUS BRANDS, INC.
(Registrant)
Date: September 8, 1999 /s/ Robert E. Knowles
- -------------------------- -------------------------------
Robert E. Knowles
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
(Principal Financial Officer)
Date: September 8, 1999 /s/ Janet L. Jorgensen
- -------------------------- -------------------------------
Janet L. Jorgensen
Vice President and Controller
Chief Accounting Officer
(Principal Accounting Officer)
8
Exhibit (3) a.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
S & K FAMOUS BRANDS, INC.
I.
NAME
The name of the Corporation is S & K FAMOUS BRANDS, INC.
II.
PURPOSES
The purpose for which the Corporation is organized is to engage in any
lawful business not required by the Virginia Stock Corporation Act to be stated
in Articles of Incorporation.
The Corporation shall have all of the corporate powers of any character
which are not prohibited by law or required to be stated in the Articles of
Incorporation.
III.
CAPITAL STOCK
A. The aggregate number of shares that the Corporation shall have
authority to issue is 500,000 shares of Preferred Stock, par value $1.00 per
share, and 10,000,000 shares of Common Stock, par value $.50 per share.
B. Preferred and Common Stock. The designations, preferences, voting
powers and relative, participating, optional and other special rights of the
Preferred Stock and the Common Stock, and the qualifications, limitations and
restrictions of such preferences and rights, shall be in accordance with
paragraphs B(1) through B(6) of this Article III.
<PAGE>
(1) Issuance of Preferred Stock. The Preferred Stock may be
issued from time to time, in one or more series, each of which series shall be
designated by such appropriate designations as may be stated in such resolution
or resolutions providing for the issuance of the stock of such series as may be
adopted by the Board of Directors from time to time, a copy of which resolution
or resolutions shall have been set forth in articles of serial designation filed
with and made effective by the State Corporation Commission of Virginia as
required by law. Subject to the provisions hereof, all shares of any one series
shall be alike in every particular and except for the relative rights and
preferences as to which there may be variations between different series as set
forth in this Article III, all shares of Preferred Stock shall be alike in every
particular. The Board of Directors shall have power and authority, subject to
all the provisions of these Articles, to state and determine, in the resolution
or resolutions providing for the issue of each series of Preferred Stock, the
number of shares of each such series authorized to be issued and the preferences
and relative, participating, optional and other rights pertaining to each such
series, and the qualifications, limitations or restrictions thereof, including,
full power and authority to determine, as to the Preferred Stock of each such
series (a) the rate of dividend, the time of payment, whether dividends shall be
cumulative and if so, the dates from which dividends shall be cumulative, and
the extent of participation rights, if any, (b) any right to vote with holders
of shares of any other series or class and any right to vote as a class, either
generally or as a condition to specified corporate action, (c) the price at and
the terms and conditions on which shares may be redeemed, (d) the amount payable
upon shares in event of involuntary liquidation, (e) the amount payable upon
shares in event of voluntary liquidation, (f) sinking fund provisions for the
redemption or purchase of shares, (g) the terms and conditions on which shares
may be converted if the shares of any series are issued with the privilege of
conversion, and (h) any other designations, rights, preferences or limitations
that are now or hereafter permitted by law and are not inconsistent with the
provisions of this Article III (B) (1).
(2) Dividends. The holders of the Preferred Stock shall be
entitled to receive dividends as and when declared by the Board of Directors out
of funds legally available therefore in preference to the holders of the Common
Stock. Dividends on the Preferred Stock of each series shall be at such rates or
to such extent, payable in such manner, under such conditions and on such dates
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as shall be stated in the articles of serial designation for each such series of
Preferred Stock. The holders of Common Stock shall be entitled to receive such
dividends as may from time to time be declared by the Board of Directors out of
funds legally available therefore, subject to the rights of the series of
Preferred Stock outstanding from time to time.
(3) Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, there shall be paid
to the holders of shares of Preferred Stock of each series the fixed amount per
share payable in the event of liquidation, dissolution or winding up of the
Corporation, stated in the articles of serial designation for each such series
of Preferred Stock, plus the unpaid dividends accrued thereon, if such dividends
be cumulative, before any sum shall be paid to, or any assets distributed among,
the holders of the Common Stock, but the holders of the Preferred Stock shall be
entitled to no further payment or distribution than the above provided. If
amounts payable to holders of shares of Preferred Stock on liquidation,
dissolution or winding up are not paid in full, the shares of Preferred Stock
shall share ratably on a share for share basis in any distribution of assets
other than by way of dividends in accordance with the sums which would be
payable in such distribution if all sums payable were discharged in full. In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, the holders of the Common Stock shall be entitled, in
proportion to the number of shares of Common Stock so held, to payment or
distribution of any assets remaining after all required payments to holders of
Preferred Stock. A liquidation, dissolution or winding up of the Corporation, as
such terms are used in this Article III (B) (3), shall not be deemed to be
occasioned by or to include any consolidation or merger of the Corporation with
or into any other corporation or corporations or a sale, lease or conveyance of
all or part of its assets.
(4) Redemption. The Preferred Stock of each series shall be
subject to redemption if so provided, and at the prices, and upon the terms and
conditions stated, in the articles of serial designation for each such series of
Preferred Stock.
(5) Voting. The holders of each series of the Preferred Stock
shall have no voting power except as may be required by law, or as may be
provided, and upon the terms and conditions stated, in the articles of serial
designation for each such series of Preferred Stock. Except as set forth
hereinabove, the entire and exclusive voting rights are vested in the holders of
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the Common Stock. Each holder of the Common Stock shall have one vote for each
share held by him, and each holder of the Preferred Stock when and if entitled
to vote shall also have one vote for each share held by him.
(6) Pre-emptive Rights. No holder of any share of capital
stock of the Corporation, whether now or hereafter authorized or outstanding,
shall have any pre-emptive or preferential right to purchase or subscribe to
purchase (i) any shares of stock of any class of the Corporation or other
security that the Corporation may determine to issue, whether the share of stock
or other security to be issued is now or hereafter authorized, (ii) any
warrants, rights or options to purchase any such stock or other security, or
(iii) any obligation convertible into any such stock or other security or into
warrants, rights or options to purchase any such stock or other security.
IV.
DIRECTORS
The number of directors shall be fixed by the by-laws. In the absence
of such a provision in the by-laws, the number of directors shall be three.
V.
LIMIT ON LIABILITY AND INDEMNIFICATION
A. Definitions. For purposes of this Article the following definitions
shall apply:
(i) "Corporation" means this Corporation only and no predecessor
entity or other legal entity;
(ii) "expenses" include counsel fees, expert witness fees, and
costs of investigation, litigation and appeal, as well as any
amounts expended in asserting a claim for indemnification;
(iii) "liability" means the obligation to pay a judgement,
settlement, penalty, fine, or other such obligation,
including, without limitation, any excise tax assessed with
respect to an employee benefit plan;
(iv) "legal entity" means a corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise;
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(v) "predecessor entity" means a legal entity the existence of
which ceased upon its acquisition by the Corporation in a
merger or otherwise; and
(vi) "proceeding" means any threatened, pending or completed
action, suit, proceeding or appeal whether civil, criminal,
administrative or investigative and whether formal or
informal.
B. Limit on Liability. In every instance permitted by the Virginia
Stock Corporation Act, as it exists on the date hereof or may hereafter be
amended, the liability of a director or officer of the Corporation to the
Corporation or its shareholders arising out of a single transaction, occurrence
or course of conduct shall be limited to one dollar.
C. Indemnification of Directors and Officers. The Corporation shall
indemnify any individual who is, was or is threatened to be made a party to a
proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation or
because such individual is or was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation while a director or
officer of the Corporation against all liabilities and reasonable expenses
incurred in the proceeding, except such liabilities and expenses as are incurred
because of such individual's willful misconduct or knowing violation of the
criminal law. Service as a director or officer of a legal entity controlled by
the Corporation shall be deemed service at the request of the Corporation. The
determination that indemnification under this Section C is permissible and the
evaluation as to the reasonableness of expenses in a specific case shall be
made, in the case of a director, as provided by law, and in the case of an
officer, as provided in Section D of this Article; provided, however, that if a
majority of the directors of the Corporation has changed after the date of the
alleged conduct giving rise to a claim for indemnification, such determination
and evaluation shall, at the option of the person claiming indemnification, be
made by special legal counsel agreed upon by the Board of Directors and such
person. Unless a determination has been made that indemnification is not
permissible, the Corporation shall make advances and reimbursements for expenses
incurred by a director or officer in a proceeding upon receipt of an undertaking
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from such director or officer to repay the same if it is ultimately determined
that such director or officer is not entitled to indemnification. Such
undertaking shall be an unlimited, unsecured general obligation of the director
or officer and shall be accepted without reference to such director's or
officer's ability to make repayment. The termination of a proceeding by
judgment, order, settlement, conviction, or upon a pleas of nolo contendere or
its equivalent shall not of itself create a presumption that a director or
officer acted in such a manner as to make such director or officer ineligible
for indemnification. The Corporation is authorized to contract in advance to
indemnify and make advances and reimbursements for expenses to any of its
directors or officers to the same extent provided in this Section C.
D. Indemnification of Others. The Corporation may, to a lesser extent
or to the same extent that it is required to provide indemnification and make
advances and reimbursements for expenses to its directors and officers pursuant
to Section C, provide indemnification and make advances and reimbursements for
expenses to its employees and agents, the directors, officers, employees and
agents of its subsidiaries and predecessor entities, and any person serving any
other legal entity in any capacity at the request of the Corporation, and may
contract in advance to do so. The determination that indemnification under this
Section D is permissible, the authorization of such indemnification and the
evaluation as to the reasonableness of expenses in a specific case shall be made
as authorized from time to time by general or specific action of the Board of
Directors, which action may be taken before or after a claim for indemnification
is made, or as otherwise provided by law. No person's rights under Section C of
this Article shall be limited by the provisions of this Section D.
E. Miscellaneous. The rights of each person entitled to indemnification
under this Article shall inure to the benefit of such person's heirs, executors
and administrators. Special legal counsel selected to make determinations under
this Article may be counsel for the Corporation. Indemnification pursuant to
this Article shall not be exclusive of any other right of indemnification to
which any person may be entitled, including indemnification pursuant to a valid
contract, indemnification by legal entities other than the Corporation and
indemnification under policies of insurance purchased and maintained by the
Corporation or others. However, no person shall be entitled to indemnification
by the Corporation to the extent such person is indemnified by another,
including an insurer. The Corporation is authorized to purchase and maintain
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insurance against any liability it may have under this Article or to protect any
of the persons named above against any liability arising from their service to
the Corporation or any other legal entity at the request of the Corporation
regardless of the Corporation's power to indemnify against such liability. The
provisions of this Article shall not be deemed to preclude the Corporation from
entering into contracts otherwise permitted by law with any individuals or legal
entities, including those named above. If any provision of this Article or its
application to any person or circumstance is held invalid by a court of
competent jurisdiction, the invalidity shall not affect other provisions or
applications of this Article, and to this end the provisions of this Article are
severable.
F. Application; Amendments. The provisions of this Article shall be
applicable from and after its adoption even though some or all of the underlying
conduct or events relating to a proceeding may have occurred before its
adoption. No amendment, modification or repeal of this Article shall diminish
the rights provided hereunder to any person arising from conduct or events
occurring before the adoption of such amendment, modification or repeal.
7
Exhibit (3) b.
RESTATED BYLAWS
OF
S & K FAMOUS BRANDS, INC.
ARTICLE I
OFFICES
Section 1.1. Principal Office. The principal office of the Corporation
shall be at 11100 West Broad Street, Richmond, Virginia.
Section 1.2. Registered Office. The Registered Office of the
Corporation in Virginia (as required by law) shall be at such place as the Board
of Directors shall from time to time by resolution determine, and may, but need
not, be at the principal office of the Corporation.
Section 1.3. Other Offices. The Corporation may, in addition to its
principal office, have offices at such other places either within or without
Virginia as the Board of Directors may from time to time appoint or as the
business of the Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 2.1. Annual Meetings. The annual meeting of the stockholders of
the Corporation shall be held on the last Thursday in May of each year, if not a
legal holiday in Virginia, and if a legal holiday, then on the next succeeding
business day. If, in the judgment of the President or the Board of Directors, an
annual meeting of stockholders should not be held on the day designated in these
Bylaws because of the unavailability of necessary information, or for other
sufficient reason, a substitute annual meeting may be called in accordance with
the provisions of Section 2.2 of this Article. Any meeting so called shall be
designated and treated for all purposes as the annual meeting.
Section 2.2. Special Meetings. A special meeting of the stockholders
may be called by the Chairman of the Board of Directors, the President, or the
Board of Directors, or by Stockholders if required by law, or, at the direction
of any of the foregoing, the Secretary. Only business within the purpose or
purposes described in the notice for a special meeting of Stockholders may be
conducted at the meeting.
Section 2.3. Place of Meetings. Each annual and special meeting of the
stockholders shall be held at the principal office of the Corporation or at such
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other place, within or without Virginia, as the Board of Directors may designate
in the notice of the meeting.
Section 2.4. Notice of Meetings. Written notice of each annual and
special meeting of the stockholders shall be given by or at the direction of the
officer or other persons calling the meeting. The notice shall state the place,
day and hour of the meeting and such other information as may be required by law
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Except as otherwise required herein or by law, a copy of the
notice shall be delivered personally or mailed to each stockholder of record
entitled to vote at such meeting not less than ten days nor more than fifty days
before such meeting. If mailed, such notice shall be deemed given when deposited
in the United States mail, postage prepaid, addressed to the stockholder at his
or her address as it appears on the stock transfer books of the Corporation,
unless he or she shall have filed with the Secretary of the Corporation a
written request that notices be mailed to some other address, in which case it
shall be mailed to the address designated in such request.
Notice of a stockholders' meeting to act on an amendment of the
articles of incorporation or on a reduction of stated capital or on a plan of
merger, consolidation or exchange shall be given in the manner provided above
not less than twenty-five nor more than fifty days before the date of the
meeting. Any such notice shall be accompanied by a copy of the proposed
amendment or plan of reduction or merger, consolidation or exchange.
Section 2.5. Waiver of Notice. Any notice herein or by law required may
be waived in a writing signed by the person entitled to the notice before or
after the time of the event for which notice was required to be given, and such
waiver shall be the equivalent of the giving of notice. A stockholder who
attends a meeting shall be deemed to have had timely and proper notice of the
meeting, unless such stockholder attends for the express purpose of objecting to
the transaction of any business because the meeting is not lawfully called or
convened. No notice of the reconvening of any adjourned or recessed meeting need
be given.
Section 2.6. Quorum. Except as otherwise provided by law or in the
articles of incorporation, at any meeting of the stockholders of the
Corporation, the presence in person or by proxy of the holders of a majority in
number of the outstanding shares of stock entitled to vote at such meeting shall
constitute a quorum for the transaction of business. In the absence of a quorum,
a majority in voting power of the stockholders present in person or by proxy and
entitled to vote may adjourn the meeting from time to time and from place to
place until a quorum is obtained. 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.
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Section 2.7. Organization. At any meeting of the stockholders, the
Chairman of the Board or, if he or she is absent or no Chairman of the Board is
in office, the President or, in their absence, a person chosen by a majority
vote of the stockholders present in person or by proxy and entitled to vote
shall act as chairman of the meeting. The Secretary or an Assistant Secretary
or, in the discretion of the chairman, any person designated by him or her shall
act as secretary of the meeting.
Section 2.8. Business and Order of Business. At any meeting of the
stockholders, such business may be transacted as may properly be brought before
such meeting, whether or not such business is stated in the notice of meeting or
in waiver of notice thereof, except as otherwise by law or by these bylaws
expressly provided. The order of business of all meetings of stockholders shall
be as determined by the chairman, but such order of business may be changed by a
majority in voting power of the stockholders present in person or by proxy and
entitled to vote at the meeting.
Section 2.9. Voting. Except as otherwise provided by law, only the
holders of shares given voting power by and as provided in the articles of
incorporation shall be entitled to vote upon matters to be voted upon by the
stockholders. At any meeting of stockholders held for any purpose, each holder
of record of stock entitled to vote thereat shall be entitled to vote the shares
of such stock standing in his or her name on the books of the Corporation on the
date determined in accordance with Section 6.7. Except for the election of
directors, the holders of shares permitted to vote shall be entitled to one vote
for each outstanding share held on each matter submitted to a vote at a meeting
of stockholders; and if a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number or voting by classes is required by law or the articles of
incorporation. Directors shall be elected upon the vote provided in Section 3.3.
Section 2.10. Method of Voting. Any stockholder entitled to vote may
vote either in person or by proxy executed in writing by the stockholder or his
duly authorized attorney-in-fact and delivered to the secretary of the meeting
or other designated person. No proxy shall be valid after eleven months from its
date unless the proxy provides for a longer period. No authorization of an
attorney-in-fact to execute a proxy shall be valid after ten years from its
date, but such proxies may be accepted as valid in the absence of notice to the
contrary. At any time before the shares to which a proxy relates are voted, the
proxy may be revoked by a written notice to the secretary of the meeting, which
revocation may be in the form of a substitute proxy.
Section 2.11. Taking of Votes. Any vote taken at a meeting of
stockholders shall be viva voce or by ballot as the chairman of the meeting may
decide, except that upon demand for a vote by ballot on any question or election
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made in person or by proxy by any stockholder or stockholders holding in the
aggregate at least one-fifth of the stock entitled to vote on any question, such
vote shall be by ballot.
Section 2.12. Voting List. At least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at any such
meeting or any adjournment thereof, with the address of and the number of shares
held by each, shall be prepared and kept on file subject to inspection by any
stockholder during regular business hours at the principal office of the
Corporation, at its registered office or at the office of its transfer agent or
registrar. Such list shall also be produced and kept open at the time and place
of the meeting and shall be subject to inspection by any stockholder during the
meeting. The original stock transfer books shall be prima facie evidence who are
the stockholders entitled to examine such list or transfer books or to vote at
any meeting of stockholders.
Section 2.13. Election Inspectors. Two or more inspectors of election
may be appointed by the Board of Directors before each meeting of the
stockholders; and if no such appointment has been made, or if any inspector thus
appointed shall not be present, the chairman of the meeting may, and if
requested by stockholders holding in the aggregate at least one-fifth of the
stock entitled to vote at the meeting shall, appoint such an inspector or
inspectors to determine the qualifications of voters, the validity of proxies
and the number of shares represented at the meeting, to supervise voting and to
ascertain the results thereof.
Section 2.14. Action by Stockholders Without a Meeting. Any action
required to be taken at a meeting of the stockholders of the Corporation, or
which may be taken at such a meeting, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the stockholders entitled to vote with respect to the subject matter thereof.
Such consent shall have the same force and effect as a unanimous vote of
stockholders.
ARTICLE III
DIRECTORS
Section 3.1. General Powers. The business and affairs of the
Corporation shall be managed by the Board of Directors, and all corporate powers
shall be exercised by the Board of Directors, except as otherwise expressly
required by these bylaws, by the articles of incorporation or by law.
Section 3.2. Number, Term of Office and Qualifications. The number of
directors shall be eight (8). A Board of Directors shall be elected annually in
the manner provided in these bylaws, and each director shall hold office until
the annual meeting next following his election and until his or her successor
shall have been elected, or until his or her death, resignation or removal. No
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decrease in the number of directors by amendment to these bylaws shall have the
effect of shortening the term of any incumbent director. Directors need not be
stockholders or residents of Virginia unless the articles of incorporation so
require.
Section 3.3 Election. At any meeting of stockholders for the election
of directors, a quorum being present, every stockholder entitled to vote on the
election of directors shall have the right to vote in person or by proxy the
number of shares owned by him or her for as many persons as there are directors
to be elected at that time and for whose election he or she has a right to vote.
The persons receiving the greatest number of votes shall be the directors even
though not receiving a majority. If the election of directors shall not be held
on the day designated for the annual meeting of stockholders or at any
adjournment of such meeting, the Board of Directors shall cause the election to
be held at a special meeting of the stockholders as soon thereafter as may be
convenient.
Section 3.4. Annual Meeting. The Board of Directors may meet, without
notice of such meeting for the purpose of the election of officers and the
transaction of other business, on the same day as, at the place at which and as
soon as practicable after each annual election of directors is held. Such annual
meeting may be held at any other time or place specified in a notice given
hereinafter provided for special meetings of the Board of Directors or in a
waiver of notice thereof.
Section 3.5. Regular Meetings. Regular meetings of the Board of
Directors may be held at such times and places as may be fixed from time to time
by action of the Board of Directors.
Section 3.6. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, the
President, any two or more directors or, at the direction of any of the
foregoing, the Secretary.
Section 3.7. Place of Meeting, etc. The Board of Directors may hold its
meetings at such place or places within or without Virginia as the Board of
Directors may from time to time by resolution designate or (unless contrary to
resolution of the Board of Directors) at such place as shall be designated in
the respective notices or waivers of notice thereof. In the absence of any
designation, the meeting shall be held at the principal office of the
Corporation.
Section 3.8. Participation by Conference Telephone. Unless otherwise
restricted by the articles of incorporation, members of the Board of Directors
or any committee designated thereby may participate in any meeting of the Board
of Directors or committee by means of a conference telephone or similar
communications equipment whereby all persons participating in the meeting can
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hear each other, and participation by such means shall constitute presence in
person at such meeting. When such a meeting is conducted my means of a
conference telephone or similar communications equipment, a written record shall
be made of the action taken at such meeting.
Section 3.9. Notice of Meetings. Unless required by resolution of the
Board of Directors, notice of any regular meeting of the Board need not be
given. Notice of each special meeting shall be mailed to each director at his or
her residence or usual place of business at least three days before the date on
which the meeting is to be held; or such notice shall be sent to each director
at such place by telegraph, cable, or wireless or be delivered to him or her
personally or by telephone not later than twenty-four hours before the time at
which the meeting is to be held. Every such notice shall state the time and
place of the meeting, but need not state the business to be transacted nor the
purposes of the meeting. No notice of the reconvening of any adjourned or
recessed meeting need be given.
Section 3.10. Waivers of Notice of Meeting. Anything in these bylaws or
in any resolution adopted by the Board of Directors to the contrary
notwithstanding, proper notice of any meeting of the Board of Directors shall be
deemed to have been given to any director if such notice shall be waived by him
in writing (including telegraph, cable or wireless) before or after the meeting.
Neither the business to be transacted nor the purpose of the meeting, whether
regular or special, need be specified in the waiver. A director who attends a
meeting shall be deemed to have had timely and proper notice thereof, unless he
or she attends for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Section 3.11. Organization of Meeting. At each meeting of the Board of
Directors, the Chairman of the Board or, if he or she is absent or no Chairman
of the Board is in office, the President or, in their absence, a director chosen
by the majority of the directors present shall act as chairman. The Secretary of
the Corporation or an Assistant Secretary or, in the discretion of the chairman,
any person appointed by the Secretary shall act as secretary of the meeting.
Section 3.12. Quorum and Manner of Acting. A majority of the number of
directors at the time fixed by these bylaws shall constitute a quorum for the
transaction of business. The act of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the Board of Directors.
In the absence of a quorum, a majority of the directors present may adjourn the
meeting from time to time until a quorum be had. The directors shall act only as
a Board, and the individual directors shall have no power as such.
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Section 3.13. Action by Directors Without a Meeting. Any action
required to be taken at a meeting of the Board of Directors or that may be taken
at a meeting of the Board of Directors or of a committee established by the
Board of Directors may be taken without a meeting if a consent in writing
setting forth the action shall be signed either before or after such action by
all of the directors or all of the members of the committee, as the case may be.
Such consent shall have the same force and effect as an unanimous vote.
Section 3.14. Resignations. Any director of the Corporation may resign
at any time, orally or in writing, by notifying the Chairman of the Board,
President or Secretary of the Corporation. Such resignation shall take effect at
the time therein specified, and, unless otherwise specified, the acceptance of
such resignation shall not be necessary to make it effective.
Section 3.15. Removal of Directors. Any director may be removed at any
time, either with or without cause, by the affirmative vote of a majority in
voting power of the stockholders of record of the Corporation entitled to elect
a successor, given in person or by proxy at a special meeting of such
stockholders called expressly for that purpose, at which a quorum shall be
present.
Section 3.16. Vacancies. Any vacancy in the Board of Directors, caused
by death, resignation, removal, disqualification or any other cause (other than
an increase by more than two in the number of directors) may be filled for the
unexpired term by the majority vote of the remaining directors then in office,
though less than a quorum, at any regular or special meeting of the Board of
Directors.
Section 3.17. Compensation. Each director who is not a salaried
employee of the Corporation may be paid such amount per annum or such fees for
attendance at directors' meetings, or both, and such additional amounts for
service upon committees as the Board of Directors shall from time to time
determine, together with reimbursement for the reasonable expenses incurred by
him or her in connection with the performance of his or her duties. Nothing in
this section shall preclude any director from serving the Corporation or its
subsidiaries in any other capacity and receiving proper compensation therefor.
Section 3.18. Executive Committee. The Board of Directors may, by
resolution adopted by a vote of a majority of the number of directors at the
time fixed by these bylaws, designate two or more of their number as an
Executive Committee. While the Board of Directors is not in session, the
Executive Committee, if there then be such a committee, shall have and exercise
all of the authority of the Board of Directors in the management of the business
and affairs of the Corporation, subject to the restrictions hereinafter set out
and further subject to such limitations upon its authority as the Board of
Directors may from time to time impose. In no event shall the Executive
Committee, or any other committee, have authority to approve an amendment to the
articles of incorporation, a plan of merger or consolidation, a plan of exchange
under which the Corporation would be acquired, the sale, lease or exchange, or
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the mortgage or pledge for a consideration other than money, of all, or
substantially all, of the property and assets of the Corporation otherwise than
in the usual and regular course of the business of the Corporation, or the
voluntary dissolution of the Corporation or revocation of voluntary dissolution
procedures.
Section 3.19. Other Committees. In addition to an Executive Committee,
the Board of Directors may, by resolution adopted by a vote of a majority of the
directors present at a meeting at which a quorum is present, designate other
committees consisting of two or more directors. Such other committees may
include an Audit Committee, which may recommend the selection of auditors and
accountants, review the adequacy of internal financial controls and review the
scope and results of the audit or other financial statements.
Section 3.20. Operation of Committees. Unless the Board of Directors by
resolution otherwise provides, each committee shall choose its own chairman and
secretary and shall record all its acts and proceedings and report the same from
time to time to the Board of Directors.
Regular meetings of any committee, of which no notice shall be
necessary, may be held at such times and in such places as shall be determined
by a majority of the committee. Special meetings of any committee may be called
at the request of any member of the committee. Notice of any special meeting of
a committee shall be given by the person calling the same as provided by these
bylaws for special meetings of the full Board of Directors. Notice of any such
meeting may be waived as provided by these bylaws in the case of meetings of the
full Board of Directors.
A majority of any committee shall constitute a quorum for the
transaction of business, and the act of a majority of those present at any
meeting at which a quorum is present shall be the act of the committee. Action
by a committee may be taken without a meeting as provided in Section 3.13.
Members of any such committee shall act only as a committee and the individual
members shall have no power as such.
The Board of Directors shall have the power at any time to change the
members of, fill vacancies in and discharge any committee, either with or
without cause. The appointment of any director to any committee, if not sooner
terminated, shall automatically terminate upon the expiration of his or her term
as a director or upon the earlier cessation of his or her membership on the
Board of Directors.
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ARTICLE IV
OFFICERS
Section 4.1. Officers. The officers of the Corporation shall be a
President, a Treasurer and a Secretary and, where elected, a Chairman of the
Board, one or more Vice Presidents, and the holders of such other offices as may
be established in accordance with the provisions of Section 4.3. Any two or more
offices may be held by the same person; provided that the same person shall not
hold the offices of both President and Secretary, unless the Corporation has
only one stockholder, in which event such stockholder may hold all offices. The
officers shall have such authority and shall perform such duties as generally
pertain to their offices and as may lawfully be provided by these bylaws or by
resolution of the Board of Directors not inconsistent with these bylaws.
Section 4.2. Election, Term of Office and Qualifications. Except as
provided for subordinate officers in Section 4.3, the officers shall be elected
annually by the Board of Directors as soon as practicable after the annual
election of Directors in each year and may be elected at such other time or
times as the Board of Directors shall determine. Each officer shall hold office
until his or her successor shall have been duly chosen and shall qualify or
until his or her death, resignation or removal in the manner hereinafter
provided.
Section 4.3. Subordinate Officers. The Board of Directors may from time
to time establish officers in addition to those designated in Section 4.1 with
such duties as are provided in these bylaws or as the Board of Directors may
from time to time determine. Such subordinate officers may be elected or
appointed by the Board of Directors or may be appointed by such other officers
as may be designated by the Board of Directors.
Section 4.4. Removal. Any officer may be removed, either with or
without cause, by resolution declaring such removal to be in the best interests
of the Corporation and adopted at any regular or special meeting of the Board of
Directors by a majority of the directors then in office. Any officer appointed
otherwise than by the Board of Directors also may be removed, with or without
cause, by any officer having authority to appoint whenever such officer
considers such removal to be in the best interest of the Corporation.
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Any such removal shall be without prejudice to the recover of damages
for breach of the contract rights, if any, of the person removed. Election or
appointment of an officer or agent shall not of itself, however, create contract
rights.
Section 4.5. Resignations. Any officer may resign at any time by giving
oral or written notice to the Board of Directors, the Chairman of the Board, the
President or the Secretary of the Corporation. Any such resignation shall take
effect at the date of receipt of such notice or at any later time therein
specified; and, unless otherwise specified, the acceptance of such resignation
shall not be necessary to make it effective. No resignation hereunder, however,
or the acceptance thereof by the Board of Directors shall prejudice the contract
or other rights, if any, of the Corporation with respect to the person
resigning.
Section 4.6. Vacancies or Absences. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause shall be filled
for the unexpired portion of the term by the Board of Directors or by such other
officer as may be designated by the Board of Directors. During the absence of
any officer of the Corporation, or his or her disqualification or inability to
act, the President (if not absent, disqualified or unable) may by written order
or the Board of Directors may by resolution delegate the powers of such officer
to any other officer or employee of the Corporation.
Section 4.7. Compensation. Salaries or other compensation of the
officers may be fixed from time to time by the Board of Directors or in such
manner as it shall determine. No officer shall be prevented from receiving his
or her salary by reason of the fact that he or she is also a director of the
Corporation.
Section 4.8. Chairman of the Board of Directors. The Chairman of the
Board of Directors, shall be the chief executive officer of the corporation and
shall have general direction of the business, affairs and property of the
Corporation and over its several offices. He shall see that all orders and
resolutions of the Board of Directors are carried into effect, and he shall have
power to sign all contracts and agreements authorized by the Board of Directors
unless it otherwise directs. He shall do and perform such other duties as from
time to time may be assigned to him by the Board of Directors.
Section 4.9. President. The President shall be the chief operating
officer of the Corporation. He shall perform all duties incident to the office
of President and such other duties as from time to time may be assigned to him
by the Chairman of the Board or the Board of Directors and as may be prescribed
in these Bylaws. He shall have power to sign all contracts and agreements
authorized by the Board of Directors unless it otherwise directs. In addition,
he shall exercise all the powers and discharge all duties of the Chairman of the
Board during the latter's absence or inability to act.
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Section 4.10. Vice Presidents. The Vice President or Vice Presidents
shall perform such duties as from time to time may be assigned by the Board of
Directors, any duly authorized committee of directors or the President, and
shall have such other powers and authorities as are elsewhere in these bylaws
conferred upon them. In the order designated by the Board of Directors from time
to time (and if no such designation is made, in the order of election as Vice
Presidents), the Vice Presidents shall, during the absence, disqualification or
inability to act of the President, exercise all of the functions and perform all
of the duties of the President.
Section 4.11. Treasurer. Except as may otherwise be specifically
provided by the Board of Directors or any duly authorized committee thereof, the
Treasurer shall have the custody of and be responsible for all funds and
securities of the Corporation; receive and receipt for money paid to the
Corporation from any source whatsoever; deposit all such moneys in the name of
the Corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of these bylaws; against proper
vouchers, cause such funds to be disbursed by check or draft on the authorized
depositories of the Corporation signed in such manner as shall be determined in
accordance with the provisions of these bylaws; regularly enter or cause to be
entered in books to be kept by him or her or under his or her direction full and
adequate accounts of all money received and paid for the account of the
Corporation; in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned by the
Board of Directors, any duly authorized committee of directors, or the
President; and have such other powers and authorities as are elsewhere in these
bylaws conferred.
Section 4.12. Secretary. The Secretary shall act as secretary of all
meetings of stockholders and the Board of Directors; shall keep the minutes
thereof in the proper book or books to be provided for that purpose; shall see
that all notices required to be given by the Corporation are duly given and
served; shall be the custodian of the seal of the Corporation and shall affix
the seal or cause it to be affixed to all documents the execution of which on
behalf of the Corporation under its corporate seal is duly authorized in
accordance with the provisions of these bylaws; shall have charge of the books,
records and papers of the Corporation relating to its organization and
management as a corporation and shall see that any reports or statements
relating thereto, required by law or otherwise, are properly kept and filed;
shall, in general, perform all the duties incident to the office of Secretary
and such other duties as from time to time may be assigned by the Board of
Directors, any duly authorized committee of directors or the President; and
shall have such other powers and authorities as are elsewhere in these bylaws
conferred upon him or her.
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Section 4.13. Assistant Treasurers and Assistant Secretaries. Assistant
Treasurers and Assistant Secretaries shall perform such duties as shall be
assigned by the Treasurer and the Secretary, respectively, the Board of
Directors, any duly authorized committee of directors, or the President; and
shall have such other powers and authorities as are elsewhere in these bylaws
conferred upon them.
Section 4.14. Certain Officers to Give Bonds. Every officer, agent or
employee of the Corporation who may receive, handle or disburse money for its
account or who may have any of the Corporation's property in his or her custody
or be responsible for its safety or preservation may be required, in the
discretion of the Board of Directors, to give bond in such sum and with such
sureties and in such form as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of such office and for the restoration to
the Corporation in the event of death, resignation or removal from office of
such officer, of all books, papers, vouchers, moneys and other property of
whatsoever kind in his or her custody belonging to the Corporation.
ARTICLE V
CONDUCT OF BUSINESS
Section 5.1. Execution of Contracts and Other Documents. Except as
otherwise required by law, the articles of incorporation or these bylaws, the
Board of Directors or any duly authorized committee or directors may authorize
any officer or officers, agent or agents, in the name and on behalf of the
Corporation to enter into any contract or execute any deed or other instrument,
and any such authority may be general or confined to specific instances.
Whenever the Board of Directors or duly authorized committee of directors, in
authorizing or directing the execution of any contract, deed or other
instrument, shall fail to specify the officer or officers or other agent or
agents who are to execute the same, such contract, deed, or other instrument
shall be executed on behalf of the Corporation by the Chairman of the Board, the
President or any Vice President and, where necessary or appropriate, the
corporate seal shall be affixed thereto and attested by the Secretary or any
Assistant Secretary.
Section 5.2. Loans. Any officer or officers or agent or agents of the
Corporation authorized by the Board of Directors or by any duly authorized
committee of directors may effect loan or advances at any time for the
Corporation in the ordinary course of the Corporation's business from any bank,
trust company or other institution, or from any firm, corporation or individual,
and for such loans and advances may make, execute and deliver promissory notes,
bonds or other certificates or evidence of indebtedness of the Corporation, and
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when authorized so to do, may pledge, hypothecate or transfer any securities or
other property of the Corporation as security for any such loans or advances.
Such authority conferred by the Board of Directors or any duly authorized
committee of directors may be general or confined to specific instances.
Section 5.3. Checks, Drafts, Etc. All checks, drafts and other orders
for payment of money out of the funds of the Corporation shall be signed on
behalf of the Corporation in such manner as shall from time to time be
determined by resolution of the Board of Directors or any duly authorized
committee of directors.
Section 5.4. Deposits. The funds of the Corporation not otherwise
employed shall be deposited from time to time to the order of the Corporation in
such banks, trust companies or other depositaries as the Board of Directors or
any duly authorized committee of directors may from time to time select, or as
may be selected by an officer or officers or agent or agents of the Corporation
to whom such power may from time to time be delegated by the Board of Directors
or any duly authorized committee of directors.
Section 5.5. Securities Held by Corporation. Unless otherwise provided
by resolution of the Board of Directors, the President may from time to time
himself, or by such proxy or proxies, attorney or attorneys, or other agent or
agents of the Corporation as he or she shall designate, in the name and on
behalf of the Corporation cast the votes to which the Corporation may be
entitled as a stockholder or otherwise in any other corporation or entity at
meetings or consent in writing to any action by any such other corporation or
entity; and the President may instruct the person or persons so appointed as to
the manner of casting such votes or giving such consent and execute or cause to
be executed on behalf of the Corporation and under its corporate seal, or
otherwise, such written proxies, consents, waivers or other instruments as he or
she may deem necessary or desirable.
ARTICLE VI
CAPITAL STOCK
Section 6.1. Stock Certificates. Every stockholder of the Corporation
shall be entitled to a certificate or certificates, in form approved by the
Board of Directors, certifying the number and class of shares of the capital
stock of the Corporation owned by him or her. Each certificate 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 or any other officer of the
Corporation authorized by these bylaws or a resolution of the Board of
Directors. The signatures of the officers upon a certificate may be facsimiles
13
<PAGE>
if the certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or an employee of the Corporation.
If any officer who has signed or whose facsimile signature has been placed upon
a stock certificate shall have ceased to be an officer of the Corporation before
the certificate is issued, it may be issued by the Corporation with the same
effect as if he or she were an officer at the date of its issue. All stock
certificates of the Corporation shall be numbered and shall be entered in the
books of the Corporation as they were issued. No fractional shares shall be
issued.
Section 6.2. Scrip. In lieu of fractional shares, the Board of
Directors may issue scrip in registered or bearer form that shall entitle the
holder to receive a certificate for a full share upon the surrender of such
scrip aggregating a full share. Scrip shall not entitle the holder to exercise
voting rights and except as otherwise provided therein, shall not entitle the
holder to receive dividends thereon or to participate in any of the assets of
the corporation in the event of liquidation. The Board of Directors may cause
scrip to be issued subject to the condition that it shall become void if not
exchanged for certificates representing full shares before a specified date, or
subject to the condition that the shares for which such scrip is exchangeable
may be sold by the Corporation and the proceeds thereof held for the holders of
such scrip, or subject to any other conditions that the Board of Directors may
deem advisable. When a shareholder would otherwise be entitled to a fractional
share upon a conversion of shares or a dividend payable in shares, the Board of
Directors may, in lieu of issuing scrip, authorize payments in cash based on the
fair value of the shares as determined by the Board of Directors and their
determination, in the absence of fraud, shall be final.
Section 6.3. Stock Ledger. A record shall be kept by the Secretary,
transfer agent or by any other officer, employee or agent designated by the
Board of Directors of the name and address of the person, firm or corporation
holding capital stock represented by certificates of the Corporation, the number
of shares of each class or series represented by such certificates,
respectively, the respective dates thereof and, in case of cancellation, the
respective dates of cancellation.
Section 6.4. Registered Stockholders. Only stockholders of record on
the stock records of the Corporation shall be entitled to be treated by the
Corporation as the holders of the stock standing in their respective names, and
except to the extent, if any, required by law, the Corporation shall not be
obligated to recognize any equitable or other claim to or interest in any share
on the part of any other person, whether or not it shall have express or other
notice thereof.
14
<PAGE>
Section 6.5. Registration of Transfers. Registration of transfers of
stock shall be made on the stock transfer books upon surrender of the
certificate therefor, endorsed or accompanied by a written assignment signed by
the holder of record or by the holder's duly authorized attorney-in-fact. The
Board of Directors may from time to time make reasonable regulations governing
transfers of stock and other securities. Unless otherwise required by law, no
transfer shall be registered that would violate the terms of any written
agreement to which the Corporation, and either the transferor or transferee, is
a party.
Section 6.6. Cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases provided
for in Section 6.8.
Section 6.7. Record Dates. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders to receive
payment of any dividend, or in order to make a determination of stockholders for
any other proper purpose, the Board of Directors may fix in advance a date as
the record date for any such determination of stockholders, such date to be not
more than fifty days before the date on which the particular action requiring
such determination of stockholders is to be taken. In such event, only those
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to be treated as stockholders of the Corporation for the purposes of
the action for which the determination of stockholders is being made,
notwithstanding any transfer of any stock on the books of the Corporation after
such record date. If no record date is fixed, the date on which the notice of
the meeting is mailed or the date on which the resolution of the Board of
Directors declaring a dividend is adopted, as the case may be, shall be the
record date for such determination of stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
herein provided, such determination shall apply to any adjournment thereof.
Section 6.8. Lost Certificates. Any person claiming a certificate of
stock to be lost, stolen or destroyed shall furnish proof of that fact
satisfactory to an officer of the Corporation and shall agree, with such surety
as may be prescribed by the Board of Directors of the Corporation, to indemnify
and save the Corporation harmless from and against all liabilities, damages,
costs and expenses arising out of the loss, theft or destruction, whereupon a
new certificate may be issued of the same tenor and for the same number of
shares as the one alleged to be lost, stolen or destroyed. The Board of
Directors may at any time authorize the issuance of a new certificate to replace
a certificate alleged to be lost, stolen or destroyed upon such other lawful
terms and conditions as it shall from time to time prescribe.
15
<PAGE>
Section 6.9. Dividends. Dividends upon the capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting as provided by the laws of Virginia and the articles of incorporation.
Before payment of any dividend or making any distribution of profits, there may
be set aside out of the surplus or net profits of the Corporation such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve fund for meeting contingencies, for equalizing
dividends, for repairing or maintaining any property of the Corporation or for
such other purposes as the Directors shall deem in the best interests of the
Corporation.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Seal. The corporate seal of the Corporation shall be in
such form as may be approved from time to time by the Board of Directors.
Section 7.2. Fiscal Year. The books of account of the Corporation shall
be kept and annual financial statements shall be prepared on the basis of a
calendar or other fiscal year to be determined by resolution of the Board of
Directors.
Section 7.3. Books and Records. The Corporation shall maintain correct
and complete books and records of account and shall keep minutes of the
proceedings of its stockholders, the Board of Directors and any designated
committees thereof.
Section 7.4. Inspection of Books and Records. Any person who shall have
been a stockholder of record for at least six months immediately preceding his
or her demand or who shall be the holder of record of at least five percent of
all the outstanding shares of the Corporation's stock, upon written demand
stating the purpose thereof, shall have the right to examine, in person or by
agent or attorney, at any reasonable time or times, for any proper purpose, the
Corporation's books and records of accounts, minutes and records of
stockholders, and to make copies or extracts therefrom.
Section 7.5. Financial Statements. Upon the written request of any
stockholder, the Corporation shall mail to such stockholder its most recent
published financial statement showing in reasonable detail its assets and
liabilities and the results of its operations.
16
<PAGE>
ARTICLE VIII
INDEMNIFICATIONS
Section 8.1. Indemnification. The Corporation shall indemnify any
director, officer, employee, or agent as provided by the laws of Virginia and
the articles of incorporation.
ARTICLE IX
AMENDMENTS
Section 9.1. By the Directors. The Board of Directors by a majority
vote thereof shall have the power to make, alter, amend or repeal the bylaws of
the Corporation at any regular or special meeting thereof. This power shall not
be exercised by the Executive Committee.
Section 9.2. By the Stockholders. All bylaws shall be subject to
amendment, alteration or repeal by the stockholders entitled to vote at any
annual or at any special meeting. The stockholders, at any annual or at any
special meeting, may provide that certain bylaws by them adopted, approved or
designated may not be amended, altered or repealed, except by a certain
specified percentage in interest of the stockholders or by a certain specified
percentage in interest of a particular class of stockholders.
Exhibit (4) a.
Crestar Bank
P. O. Box 26665
Richmond, VA 23261-6665
(804)782-5000
August 3, 1999
Mr. Robert E. Knowles
Executive Vice President
S&K Famous Brands, Inc.
P. O. Box 31800
11100 West Broad Street
Richmond, VA 23294
Dear Bob:
It is my pleasure to confirm that Crestar Bank (the "Bank") has approved your
request to extend the maturity of the existing Credit Agreement (the
"Agreement") dated March 10, 1994, and the subsequent Amendment to the Credit
Agreement dated April 30, 1997, by and between Crestar Bank (the "Bank") and S&K
Famous Brands, Inc. (the "Company"). The effective date of the extension shall
be July 30, 1999.
The Agreement(s) is hereby amended as follows:
Section 2.1, Section 2.3, and Section 2.4 are amended to change the
maturity date of the revolving loan(s) from May 31, 2000 to May 31,
2001.
Section 3.1, Section 3.3, and Section 3.4 are amended to change the
date May 31, 2000 to May 31, 2001, the date June 30, 2000 to June 30,
2001 and the date May 31, 2004 to May 31, 2005.
References in the Revolving Note dated April 30, 1997 in the amount of
$16,000,000 to the maturity date May 31, 2000 shall be changed to May
31, 2001. References to dates in Exhibit B - Term Note shall be changed
to correspond with the amendment above related to Section(s) 3.1, 3.3,
and 3.4.
In addition, the Bank and the Company agree that is our mutual intent to execute
a new Credit Agreement prior to May 31, 2000. Please indicate your acceptance to
the terms and conditions of this letter by signing below and returning the
original to me in the enclosed envelope. If you have any questions, please
contact me at 782-7311.
Sincerely,
/s/William A. Stratton
William A. Stratton
Senior Vice President
<PAGE>
August 3, 1999
Page 2
Agreed and accepted by S&K Famous Brands, Inc. this 30th day of July, 1999:
By: /s/Robert E. Knowles
Title: Executive Vice President
Exhibit (4) b.
SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT is dated
as of July 30, 1999, and is between S & K FAMOUS BRANDS, INC. (the "Company")
and FIRST UNION NATIONAL BANK, as successor-in-interest to Signet Bank/Virginia
(the "Bank").
Recitals
A. The Company and the Bank entered into an Amended and Restated Credit
Agreement dated as of May 31, 1997 (the "Loan Agreement"), which was amended by
a First Amendment to Amended and Restated Credit Agreement dated April 2, 1999.
B. The Company has requested that the Bank further modify certain
provisions in the Loan Agreement, and subject to the terms and conditions of
this Second Amendment, the Bank is willing to modify the Loan Agreement.
Agreement
NOW, THEREFORE, for and in consideration of the terms, conditions and
agreements herein, the Bank and the Company hereby agree as follows:
1. Definitions. Except as provided specifically herein, all defined
terms used herein shall have the meanings ascribed to such terms in the Loan
Agreement.
2. Amendment. The Loan Agreement is hereby amended as follows: The
definition of "Termination Date" in Section 1.1 is hereby amended and restated
to read as follows: "Termination Date" means May 31, 2001, unless such date has
been extended pursuant to Section 2.13.
3. Limited Amendment. Except as provided expressly in this First
Amendment, each term, condition or agreement in the Loan Agreement shall
continue to be fully enforceable in accordance with its terms. WITNESS the
following authorized signatures of the parties hereto:
Company:
S & K FAMOUS BRANDS, INC.
By: /s/ Robert E. Knowles
-------------------------------
Robert E. Knowles
Executive Vice President and
Chief Financial Officer
Bank:
FIRST UNION NATIONAL BANK
(formerly, Signet Bank/Virginia)
By: /s/ Michael S. Diehl
-------------------------------
Michael S. Diehl
Vice-President
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