<TABLE>
<S> <C> <C>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
|x| Annual Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1994
OR
| | Transition Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act of 1934 (No Fee Required)
For the transition period from _______________ to ______________
Commission file number 0-15385
ONE PRICE CLOTHING STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-0779028
(State or other jurisdiction of organization) (I.R.S. Employer Identification No
1875 East Main Street
Highway 290, Commerce Park
Duncan, South Carolina 29334
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 433-8888
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. [ x ]
The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 23, 1995:
Common Stock, $0.01 Par Value - $37,911,313
The number of shares outstanding of the issuer's classes of common stock as of March 23, 1995:
Common Stock, $0.01 Par Value - 10,311,256 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual shareholders meeting to be held April 19, 1995 are incorporated by
reference into Part III.
</TABLE>
PART I
ITEM 1. BUSINESS
General
One Price Clothing Stores, Inc. (the "Registrant" or the "Company")
operates a growing chain of off-price retail women's and children's
specialty stores offering a wide variety of first quality,
contemporary, in-season apparel and accessories for the uniform retail
price of $7. The Company purchases merchandise at heavily discounted
prices in large quantities from a broad mix of manufacturers, jobbers,
importers and other suppliers. Items offered in the Company's stores
typically sell in department and specialty stores for $15 and up. The
Company is able to acquire such merchandise at heavily discounted
prices because of its willingness to purchase large quantities and odd
lots and to buy goods later in the season than most other retailers.
The Company's buyers are able to take advantage of situations such as
over-production, order cancellations and manufacturers' needs to
liquidate stock. This purchasing strategy allows the Company to obtain
a price advantage and to react quickly to seasonal fashion preferences
and weather conditions affecting consumer spending. It is the
Company's policy to offer only first quality apparel; the Company does
not purchase "seconds" or irregular merchandise from its suppliers.
The Company increased its retail price from $6 to $7 on August 5, 1990,
the only price increase since the Company began operations in 1984. At
this time, management does not anticipate increasing the retail price
in the near future.
Company History and Organization
The Company opened its first store in August 1984. The Company changed
its corporate domicile from South Carolina to Delaware on April 9, 1987
and completed the initial public offering of its Common Stock on May
27, 1987. All information contained herein has been adjusted to
reflect the issuance of 10.120811 shares of the Company's Common Stock,
$.01 par value, (the "Common Stock") in exchange for each share of
Common Stock then outstanding in connection with the Company's re-
incorporation in Delaware, a 3-for-2 stock split effected in the form
of a stock dividend paid on October 15, 1987, and a 3-for-2 stock split
effected in the form of a stock dividend paid on April 29, 1994. On
February 9, 1994, a wholly-owned subsidiary of the Company, One Price
Clothing of Puerto Rico, Inc., was incorporated in Puerto Rico. It
commenced operations on May 28, 1994. As used herein, unless the
context otherwise indicates, the "Company" refers to One Price Clothing
Stores, Inc., a Delaware corporation, to its immediate predecessor, a
South Carolina corporation of the same name, to the South Carolina
corporation's predecessor, a North Carolina corporation organized in
1984 under the name J. K. Apparel, Inc. and to One Price Clothing of
Puerto Rico, Inc.
Industry Segments
The Company operates in only one industry segment. All of the
Company's assets and significant revenues and pre-tax earnings relate
to retail sales of women's and children's apparel and accessories to
the general public through Company-operated stores. At the end of
fiscal 1994, 1993 and 1992, the Company's total assets were
$67,930,000, $64,201,000 and $50,718,000, respectively. Net sales were
$283,326,000 in fiscal 1994, $234,698,000 in fiscal 1993 and
$184,149,000 in fiscal 1992. The Company had net income of $4,389,000
in fiscal 1994, $8,724,000 in fiscal 1993 and $6,846,000 in fiscal
1992. Other than operations in Puerto Rico, the Company had no
operations outside the continental United States at the end of fiscal
1994 and no export sales. Reference is hereby made to the financial
statements included in Part II for more detailed information about the
Company's assets.
Operations
The Company operates a chain of off-price retail women's and children's
specialty stores offering a wide variety of first quality,
contemporary, in-season apparel and accessories for the uniform retail
price of $7. The Company registered the trademark "One Price" with the
United States Patent and Trademark Office on June 5, 1990 for a five
year period with the option to renew upon expiration. The Company
intends to apply for renewal for this trademark. The Company applied
for renewal and permanent registration of the trademark "Every Day
Every Item" in June, 1994 with the United States Patent and Trademark
Office. Approval of the application has not yet been obtained. The
Company registered "Every Day Every Item", "Todos Los Dias Todos Los
Articulos", "One Price" and "Un Solo Precio" in Mexico on June 12,
1993. All Mexican trademarks expire May 14, 2003, with the option to
renew them. Management believes that the loss of such trademarks would
not have a material adverse effect on the Company's financial position
or results of operations.
The One Price Store. The Company's typical store has approximately
3,300 square feet, of which approximately 2,400 square feet is devoted
to selling space. All of the Company's stores are located in leased
facilities with convenient access to adequate parking or public
transportation. At December 31, 1994, approximately 93% of the
Company's stores were located in strip shopping centers and the
remaining stores were located in malls. The Company does not franchise
its stores.
The Company's stores are primarily located in or near communities with
a population of at least 40,000 - 50,000 and above, as well as in large
metropolitan areas. Most of the Company's stores are open seven days a
week and typical hours of operation are from 10:00 a.m. until 7:00 or
9:00 p.m., Monday through Saturday, with shorter hours on Sunday. A
typical store employs a full-time manager and two full-time assistant
managers, and most stores employ up to ten additional part-time sales
associates.
The Company's stores are designed for customer convenience and for
attractive presentation of merchandise. All apparel is displayed on
hangers and is organized by classification, style and color, promoting
a pleasant shopping environment and customer convenience.
The Company's store operations department is headed by a Vice President
of Stores who is assisted by two Directors of Store Operations and
Regional and District Sales Managers. Each Regional Sales Manager is
responsible for approximately 9 districts. Each District Sales Manager
is responsible for approximately 10 to 12 stores and visits each store
in his or her district on a regular or as-needed basis to provide
assistance in promoting sales, training, store layout and merchandise
presentation, and to monitor adherence to the Company's operational and
management policies.
Store Locations and Expansion. At December 31, 1994, the Company
operated 641 stores in 28 states, including states in the southwest,
southeast, northeast, midwest and west coast regions of the United
States, and in Puerto Rico.
The Company opened a net of 101 stores in fiscal 1994. The Company's
expansion plans in 1995 include opening a net of approximately 80
stores in new and existing markets. The Company closed 27
underperforming stores in fiscal 1994, and closed 12 such stores in
January and February of 1995. The Company anticipates closing
additional stores during fiscal 1995 if warranted by the operating
performance of such stores.
Purchasing. The Company's practice is to offer value to its
customers by selling desirable women's and children's apparel and
accessories at considerably lower prices than generally would be
available from department stores and other specialty retailers. The
Company purchases its merchandise at heavily discounted prices and on
favorable terms from manufacturers, jobbers, importers and other
vendors.
The Company typically is able to purchase merchandise from vendors at
substantially discounted prices as a result of the following
circumstances: the inability of a manufacturer or importer to dispose
of merchandise through regular channels; the discontinuance of
merchandise because of changes in color or style; over-production by
manufacturers; cancellation of orders by conventional retail stores;
the need of catalog retailers to dispose of inventories of unordered
catalog merchandise; and manufacturers' need for liquidity. The
Company's ability and willingness to purchase in large quantities and
in odd-lot or broken-size assortments and its reputation for
reliability in the industry provide the Company with purchasing
advantages. Typically, the Company buys the majority of its
merchandise close to and during each selling season, later than
department stores and other specialty retailers. This purchasing
strategy permits the Company to react to fashion trends and
opportunistic developments during a selling season. The Company may
also purchase selected merchandise in advance of a selling season.
During fiscal 1994, the Company purchased merchandise from
approximately 870 vendors, including manufacturers, jobbers, importers
and other vendors. No vendor accounted for more than 10% of the
Company's total purchases for the year.
Although there can be no assurance that the Company will be able to
continue to acquire sufficient quantities of first quality merchandise
at such low prices on favorable terms, the Company continues to add new
vendors and believes that adequate sources of first quality merchandise
exist at appropriate price levels to permit the Company to continue its
expansion program. The Company does not maintain long-term or
exclusive purchase commitments or arrangements with any vendor.
Corporate Offices and Distribution Center. The Company's Corporate
Offices and Distribution Center are located in Duncan, South Carolina.
With the exception of functions performed by certain merchandise
buyers, regional directors of real estate, district and regional sales
managers, and certain administrative functions performed in Puerto
Rico, substantially all purchasing, accounting and other administrative
functions are centralized at the Corporate Offices.
Substantially all merchandise is shipped directly from vendors to the
Company's Distribution Center where the goods are processed and sent to
the Company's stores. The majority of shipments to stores are made by
common carriers; however, shipments local to the Company's Distribution
Center are made in tractor-trailers leased and operated by the Company.
Merchandising. The Company's merchandising strategy emphasizes
contemporary and in-season apparel for juniors, misses, large-sized
women and children. The Company's target customers are value- and
fashion-conscious women, primarily in lower and middle income brackets.
The Company offers only first quality merchandise at the retail price
of $7 per item and emphasizes the value of its merchandise compared to
similar merchandise sold elsewhere at higher prices. Women's apparel
sold by the Company includes contemporary sportswear such as knit tops,
pants, blouses, shirts, skirts, sweaters, jackets and shorts. In
addition, the Company occasionally sells other types of merchandise
such as dresses, swimsuits, jumpsuits, raincoats, lingerie and other
related items. The Company also offers selected accessories such as
scarves, socks, belts, handbags, jewelry and fragrances, in addition to
apparel. Accessory sales as a percentage of net sales were 10.7% in
fiscal 1994, 11.6% in fiscal 1993 and 11.7% in fiscal 1992. Sales of
children's clothing comprised less than 10% of net sales in each of the
last three fiscal years.
Management Information System. The Company's management information
system, featuring point-of-sale cash registers and a computerized
inventory management system, permits management to review each store's
inventory on a daily and a weekly basis thereby enabling the Company to
tailor its purchasing strategies and merchandise shipments to stores
based on customer demand.
The Company is currently implementing a new warehouse management system
to improve the management of the location and flow of merchandise
within the Distribution Center. Implementation of the new system is
expected to be completed during the summer of 1995.
Seasonality
The Company's sales and operating results are seasonal, as is typical
in the women's retail apparel industry. The Company's sales
historically have been lowest during the first quarter (January-March)
and the third quarter (July-September) and highest during the second
quarter (April-June) and the fourth quarter (October-December).
Reduced sales volumes in first and third quarters coincide with the
transition of seasonal merchandise. Therefore, increased levels of
markdowns generally occur during these transitional periods and
operating expenses, when expressed as a percentage of net sales, are
typically higher. Management expects this seasonality to continue.
Working Capital Requirements
Historically, the Company's primary needs for liquidity and capital
have been to fund the cost of its new store expansion, the related
growth in merchandise inventories, and the expansion of the Corporate
Offices and Distribution Center. These needs have been met through
cash provided by operations and the Company's available line of credit.
The Company had an amended agreement with a bank for a $20,000,000
unsecured line of credit and a $10,000,000 letter of credit facility,
expiring April 30, 1995. This agreement was superseded on March 16,
1995 when the Company and the bank executed a credit agreement for a
$25,000,000 unsecured line of credit and a $15,000,000 letter of credit
facility which will expire May 31, 1996. The agreement contains
certain covenants described in Item 7 of this report. The Company has
never used long-term debt or capital leases as a source of capital;
however, the Company may use such permanent financing, if deemed by
management to be in the best interest of the Company.
Merchandise inventories are typically purchased on credit, including
the use of letters of credit. Letters of credit are primarily used to
purchase merchandise inventories from foreign suppliers. All such
purchases are paid in United States dollars; thus, the Company is not
subject to foreign currency risks. As a result of the Company's
opportunistic buying strategy and to ensure that an adequate supply of
merchandise is available for shipment to its stores, the Company may,
at times, invest a significant amount of its working capital in
merchandise inventories.
Revenues from retail sales are recognized at the time of the sale. The
Company accepts cash, checks, and, in selected stores, certain major
credit cards. All stores offer a liberal exchange and return policy.
Merchandise returns are recorded in the period the merchandise is
returned by the customer. The amount of unrecorded merchandise returns
is not significant to the Company's financial position or results of
operations.
Customers
No material part of the business of the Company is dependent upon a
single customer or a few customers.
Competition
The women's retail apparel industry is highly competitive. In order to
compete effectively, the Company is dependent upon its ability to
purchase merchandise at substantial discounts. The Company does not
know of any direct competition from other specialty apparel retailers
having a $7 one-price concept. However, the Company does compete with
department stores, specialty stores, discount stores, other off-price
retailers and manufacturer-owned outlet stores, many of which are owned
by large national or regional chains with substantially greater
resources than the Company. There can be no assurance that other
retailers with substantially greater financial resources than the
Company will not adopt a purchasing and marketing concept similar to
that of the Company. Management believes that the primary competitive
factors in the retail apparel industry are price, quality, variety of
merchandise, good site selection and low cost of operation. The
Company believes that it is well positioned in all of these areas to
compete in its markets.
Environmental Factors
The Company is not aware of any federal, state or local environmental
regulations which will materially affect its operations or competitive
position or require material capital expenditures. The Company cannot
predict, however, the impact of possible future legislation or
regulation on its operations.
Employees
At December 31, 1994, the Company had approximately 4,900 employees, of
which approximately 48 percent were full-time employees. The Company,
like other retailers, experiences a high turnover rate of part-time
store employees but has generally not experienced difficulties in
hiring qualified personnel. None of the Company's employees are
covered by a collective bargaining agreement, and management believes
that the Company's relationship with its employees is good.
ITEM 2. PROPERTIES
The Company leases all of its store locations. At December 31, 1994,
the Company had 641 stores operating in 28 states and Puerto Rico. The
Company leases its stores under operating leases generally with initial
terms of five to ten years and with one to two renewal option periods
of five years each. The leases typically contain kickout provisions
based on that store's annual sales volume or the shopping center's
occupancy. The leases generally provide for increased rents resulting
from increases in operating costs and property taxes. Certain of the
leases provide contingent or percentage rentals based upon sales
volume, and other stores are leased on a month-to-month basis. To
date, the Company has not experienced difficulty in obtaining leases
for suitable locations for its stores on satisfactory terms.
Approximately 64 existing store leases expire or have initial lease
terms containing lessee renewal options which may be exercised during
fiscal 1995. Management believes that the Company will not experience
a significant increase in lease expense as a result of exercising
renewal options or negotiating additional lease terms for such
locations. The following is a list of store locations by state:
<TABLE>
<S> <C>
NUMBER OF
STATE STORES
Alabama........................................................................... 15
Arizona........................................................................... 9
Arkansas.......................................................................... 5
California........................................................................ 33
Florida........................................................................... 55
Georgia........................................................................... 42
Illinois.......................................................................... 32
Indiana........................................................................... 17
Kansas............................................................................ 3
Kentucky.......................................................................... 11
Louisiana......................................................................... 15
Maryland.......................................................................... 13
Michigan.......................................................................... 17
Mississippi....................................................................... 11
Missouri.......................................................................... 15
North Carolina.................................................................... 45
New Jersey........................................................................ 7
New Mexico........................................................................ 8
New York.......................................................................... 16
Ohio.............................................................................. 28
Oklahoma.......................................................................... 8
Pennsylvania...................................................................... 32
Puerto Rico....................................................................... 13
South Carolina.................................................................... 39
Tennessee......................................................................... 28
Texas............................................................................. 86
Virginia.......................................................................... 28
West Virginia..................................................................... 3
Wisconsin......................................................................... 7
TOTAL STORES...................................................................... 641
</TABLE>
The Company's Corporate Offices and Distribution Center are located in
Duncan, South Carolina on approximately 82 acres which are owned by the
Company. In fiscal 1993, the Company completed a 28,000 square foot
expansion of its Corporate Offices. The expansion increased the total
size of the Corporate Offices and Distribution Center to approximately
390,000 square feet at January 1, 1994. Additionally, the Company is
currently expanding the Distribution Center by approximately 90,000
square feet. With the addition of certain equipment and systems in
fiscal 1995, the expanded Distribution Center should be able to support
the Company's growth over the next several years.
ITEM 3. LEGAL PROCEEDINGS
On September 22, 1994, two separate lawsuits making certain securities
and common law allegations and seeking unspecified damages were filed
in the United States District Court for the District of South Carolina,
Columbia Division against the Company and its Chairman and Chief
Executive Officer Henry D. Jacobs, Jr. A motion to consolidate these
cases is pending. The lawsuits, which seek certification as class
actions, allege that the Chairman and Chief Executive Officer and the
Company made materially false, misleading and untimely projections and
statements on earnings. The plaintiffs in these cases, sought to be
consolidated, are Leonard Pitten, Katherine Hogan and Anthony J.
Mallozzi. The Company has moved to dismiss the lawsuits, and a ruling
on that motion is currently pending. Although the Company cannot
predict the outcome of these lawsuits at this time, management intends
to vigorously defend these actions and believes that as a result of its
legal defenses and insurance arrangements, the final outcome should not
have a material adverse effect on the Company's consolidated financial
condition or results of operations.
Occasionally the Company is a defendant in legal actions involving
claims arising in the normal course of its business. The Company
believes that, as a result of its legal defenses and insurance
arrangements, none of these other actions presently pending, if decided
adversely, would have a material adverse effect on its financial
position and results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the Company's fiscal year.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS
The Company's common stock is traded under the symbol ONPR in the
National Market System of NASDAQ. As of March 23, 1995, there were
approximately 430 shareholders of record.
The Company has never paid cash dividends since its inception. The
Company's credit agreement contains covenants which, among other
things, restricts the Company from paying dividends without prior
approval. Currently, the Board of Directors intends to continue its
policy of retaining earnings for operations and expansion of the
business.
The quarterly high and low sales prices as quoted by NASDAQ are shown
below. Prices have been adjusted to reflect a 3-for-2 stock split
effected in the form of a dividend to shareholders of record on April
15, 1994.
<TABLE>
<S> <C> <C> <C> <C>
1994 1993
High Low High Low
First ........................................ 17 2/3 11 1/2 13 9 2/3
Second ....................................... 20 14 7/8 12 6
Third ........................................ 18 8 1/2 13 1/6 10 1/2
Fourth ....................................... 11 1/4 6 7/8 15 2/3 10 1/4
The closing price on December 30, 1994 was $7.88 per share compared to $15.67 per share at December 31, 1993.
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected financial data for the Company
for each of the five fiscal years ended December 29, 1990 through
December 31, 1994. All of the selected financial data are extracted
from the Company's audited financial statements and should be read in
conjunction with the financial statements and the notes thereto
included under Item 8 of this Form 10-K.
<TABLE>
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended
Dec. 31, Jan. 1, Jan. 2, Dec. 28, Dec. 29,
1994 1994 1993 b 1991 1990
Dollars in thousands except per share amounts
1 Net sales $ 283,326 234,698 184,149 130,213 110,849
2 Income before taxes and cumulative effect
of a change in accounting principle $ 7,138 13,959 10,913 7,180 7,152
3 Income before cumulative effect of a change
in accounting principle $ 4,389 8,724 6,846 4,487 4,426
4 Cumulative effect on prior years of a change
in accounting principle $ -- -- -- 186 --
5 Net income $ 4,389 8,724 6,846 4,673 4,426
6 Current assets $ 31,252 35,336 27,253 22,081 16,897
7 Long-term assets $ 36,678 28,865 23,465 17,626 15,655
8 Total assets $ 67,930 64,201 50,718 39,707 32,552
9 Current liabilities $ 13,035 14,798 10,861 8,668 6,371
10 Deferred income taxes $ 1,449 1,166 1,061 1,052 912
11 Other noncurrent liabilities $ 372 411 447 -- --
12 Shareholders' equity $ 53,074 47,826 38,349 29,987 25,268
13 Net operating profit after taxes $ 4,501 8,790 6,833 4,541 4,217
14 Total investment $ 53,226 48,158 39,228 30,636 25,592
15 Stores opened during the year, net # 101 94 81 70 69
16 Stores operating at year-end # 641 540 446 365 295
17 Number of employees # 4,907 4,199 3,723 2,829 2,300
18 Weighted average common shares (000) # 10,525 10,404 10,304 9,996 9,929
19 Income per share before cumulative effect
of a change in accounting principle $ 0.42 0.84 0.66 0.45 0.45
20 Cumulative effect on prior years per share
of a change in accounting principle (a) $ -- -- -- 0.02 --
21 Net income per common share $ 0.42 0.84 0.66 0.47 0.45
22 Book value per share $ 5.04 4.60 3.72 3.00 2.54
23 Asset turnover X 4.41 4.63 4.64 4.00 3.63
24 Return on sales % 1.55 3.72 3.72 3.59 3.99
25 Return on assets % 6.84 17.20 17.24 14.36 14.50
26 Return on investment % 9.35 22.41 22.30 17.74 20.29
27 Return on equity % 9.18 22.75 22.83 18.49 21.62
28 Equity ratio % 78.13 74.49 75.61 75.52 77.62
29 Current ratio X 2.40 2.39 2.51 2.55 2.65
30 Dividends $ 0 0 0 0 0
</TABLE>
Notes to Summary of Selected Financial Data
a The proforma effect on prior years of the change in
accounting principle made in 1991 is immaterial
b Fiscal year 1992 was a 53 week year, while all other years
presented consisted of 52 weeks
Line Definitions
13 Net operating profit after taxes -- Net income
excluding interest income and interest expense (net of
tax effect).
14 Total investment -- Total of all interest-bearing
debt, capitalized leases, net deferred taxes, and
shareholders' equity.
17 Number of employees -- Number of full and part-time
employees at year-end.
22 Book value per share -- Book value of shareholders'
equity per weighted average common share (line 12
divided by line 18).
23 Asset turnover -- The ratio of sales per dollar of
assets employed during the year. It measures
efficiency in using assets and is calculated by
dividing sales by beginning total assets (line 1
divided by line 8).
24 Return on sales -- The percentage of income earned on
each dollar of sales (line 5 divided by line 1).
25 Return on assets -- The percentage of income earned on
beginning total assets (line 5 divided by line 8). It
measures how profitably assets are used.
26 Return on investment -- The percentage of net
operating profit after taxes earned during the year on
the beginning total investment (line 13 divided by
line 14). It shows how effectively the Company
invested all shareholders' and borrowed monies.
27 Return on equity -- The percentage of income earned
during the year on beginning shareholders' equity
(line 5 divided by line 12). It shows how effectively
funds are invested and managed.
28 Equity ratio -- Shows the proportion of total assets
owned by shareholders as opposed to outside sources
and is calculated by dividing year-end shareholders'
equity by year-end total assets (line 12 divided by
line 8).
29 Current ratio -- The ratio of current assets to
current liabilities (line 6 divided by line 9). It
measures the immediate availability of resources to
cover current obligations.
<TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL SUMMARY
The following table sets forth, for the three most recent fiscal years,
certain financial statement elements as a percentage of net sales:
<S> <C> <C> <C>
Fiscal Year Ended
Dec.31, Jan.1, Jan. 2,
1994 1994 1993
(52 weeks) 52 weeks) (53 weeks)
PERCENT OF NET SALES:
Net sales 100.0% 100.0% 100.0%
Cost of sales 60.0% 58.3% 58.8%
Gross margin 40.0% 41.7% 41.2%
Selling, general and administrative expenses 29.0% 27.7% 27.5%
Store rent expenses 7.1% 6.6% 6.4%
Depreciation and amortization expense 1.3% 1.4% 1.4%
Interest expense 0.1% 0.1% 0.0%
37.5% 35.8% 35.3%
Interest income 0.0% 0.0% 0.0%
Net expenses 37.5% 35.8% 35.3%
Income before income taxes 2.5% 5.9% 5.9%
Provision for income taxes 1.0% 2.2% 2.2%
Net income 1.5% 3.7% 3.7%
Stores in operation at year-end 641 540 446
</TABLE>
RESULTS OF OPERATIONS
Net sales for the fiscal year ended December 31, 1994 increased 21% to
$283.3 million from $234.7 million primarily due to the 101 net new
stores opened during the fiscal year. Net income was $4.4 million or
$0.42 per share in fiscal 1994 compared to $8.7 million or $0.84 per
share in fiscal 1993. In general, the decrease in net income in fiscal
1994 resulted from less than expected net sales during the third and
fourth quarters, reduced gross margins and increased selling, general
and administrative expenses as discussed below.
FISCAL 1994 COMPARED TO FISCAL 1993
In fiscal 1994, average store sales increased 19% in the first quarter,
increased 5% in the second quarter, were flat in the third quarter and
declined 9% in the fourth quarter compared to last year. Management
believes sales for fiscal 1994 were negatively impacted by an industry-
wide decline in consumer spending on women's apparel throughout the
latter part of the year, coupled with unseasonably warm fall
temperatures. Intense promotional pricing in the fall season by
competitors in the women's retail apparel industry, in response to the
above factors, also is believed to have further negatively impacted the
Company's sales and margins. In the latter part of the third quarter
of fiscal 1994, the Company changed its method of processing
merchandise within its Distribution Center which temporarily caused a
disruption in its ability to sufficiently restock the Company's stores,
thus further negatively impacting sales.
Net sales in fiscal 1994 were $283.3 million, an increase of 21% over
fiscal 1993 net sales of $234.7 million. The increase resulted from
the net addition of 101 new stores during fiscal 1994. The Company
opened 128 stores and closed 27 underperforming stores in fiscal 1994
compared to opening 125 stores and closing 31 underperforming stores in
fiscal 1993. Average net sales per store increased 1% in fiscal 1994
to $488,000 compared to $481,000 in fiscal 1993, primarily due to an
increase in sales for stores opened during fiscal 1993. In fiscal
1994, comparable store sales, those stores in operation at least 18
months, increased 14% in the first quarter, were flat in the second
quarter and declined 5% and 13% in the third and fourth quarters,
respectively. Comparable store sales decreased 3% for the year.
Average new store sales decreased 12% compared to last year. The
decrease in average new store sales compared to last year is partially
due to: (1) an industry-wide decline in consumer spending on women's
apparel throughout the latter part of the year; (2) entering a greater
number of metropolitan markets in 1993, particularly those in the
states of Michigan, New York and New Jersey which, on average,
outperformed the new markets entered into in fiscal 1994; and (3) the
impact of opening stores later in the spring selling season in 1994
compared to the previous year which negatively affected aggregate and
average store sales.
Through the end of fiscal February 1995, average store and comparable
store sales were down substantially compared to the same period in
fiscal 1994. Net sales in the first quarter of fiscal 1995 are
anticipated to be further impacted by the shift in Easter from April 2,
1994 to April 16, 1995 which effectively shifts pre-Easter sales from
the first quarter in fiscal 1994 to the second quarter in fiscal 1995.
In September 1994, management decided to reduce the planned rate of
growth for the next several quarters to allow the Company to further
strengthen its infrastructure to support its goal of approaching 1,000
stores and $500 million in sales over the next four years. The Company
is making investments in management and infrastructure believed to be
necessary to support its continued growth. In fiscal 1995, the Company
plans to open a net of approximately 80 stores compared to a net of 101
stores in fiscal 1994, including additional stores in California,
Puerto Rico and other existing markets.
The Company closed 27 underperforming stores in fiscal 1994 and
anticipates closing approximately 30 such stores in fiscal 1995.
Typically, the majority of fixtures and equipment located in stores
that are closed is transferred to other locations. The provision for
unexpired lease commitments and write-off of leasehold improvements has
historically averaged less than $12,000 per location. The Company does
not anticipate incurring unusual expenses relating to unexpired lease
commitments for stores to be closed in fiscal 1995.
The Company's sales and operating results are seasonal, as is typical
in the women's retail apparel industry. The Company's sales
historically have been lowest during the first quarter (January-March)
and the third quarter (July-September) and highest during the second
quarter (April-June) and the fourth quarter (October-December).
Reduced sales volumes in first and third quarters coincide with the
transition of seasonal merchandise. Therefore, increased levels of
markdowns occur during these transitional periods and operating
expenses, when expressed as a percentage of net sales, are typically
higher. Management expects this seasonality to continue.
Gross margin as a percentage of net sales decreased to 40.0% in fiscal
1994 compared to 41.7% in fiscal 1993. The reduction in the gross
margin percentage resulted primarily from: (1) a slight reduction in
accessory sales as a percentage of total net sales; (2) increased
markdowns on slow-moving segments of the Company's inventories; and (3)
increased shrinkage. The Company has a higher markup on accessories
than on apparel, and accessory sales decreased from 12% of total net
sales in fiscal 1993 to 11% of total net sales in fiscal 1994. The
increase in the rate of markdowns in fiscal 1994 primarily resulted
from: (1) stocking stores that opened late in the summer season with
warm weather type merchandise that subsequently was found predominantly
to have too short a remaining selling season; and (2) the sluggish
sell-through of merchandise as a result of the industry-wide decline in
consumer spending on women's apparel during the latter part of the year
coupled with the unseasonably warm weather experienced late in the fall
season. The increase in shrinkage experienced during the second and
third quarters was addressed by management and reduced to more
historical levels by the fourth quarter.
Selling, general and administrative ("SG&A") expenses increased as a
percentage of net sales to 29.0% in fiscal 1994 compared to 27.7% in
fiscal 1993. Generally, net sales were substantially below
expectations for the second half of fiscal 1994, which resulted in
increased SG&A expenses when expressed as a percentage of net sales.
This increase in SG&A expenses is primarily attributable to increased
transportation costs and increased costs in the Company's stores as
well as a slight increase in expenses at the Corporate Offices.
Transportation costs increased approximately 0.5 percentage points
when expressed as a percentage of net sales compared to last year due
to a change in transportation strategy effected during the third
quarter of fiscal 1993. Due to the expanding geographic boundaries of
the Company's stores and a need to increase the frequency of shipments
to selected stores, the Company changed from the use of a leased fleet
to the use of common carriers for the delivery of merchandise to the
majority of the Company's stores.
During the second half of fiscal 1994, the Company completed its
conversion of the Distribution Center's production process from a
hanging operation to a flatpack operation. In conjunction with this
change in the production process and to facilitate distribution to the
increasing number of stores, the Company is currently expanding the
Distribution Center by approximately 90,000 square feet and installing
a new warehouse management system. Upon completion, management
believes that these changes should ultimately result in reduced
processing and transportation costs. These anticipated cost savings
will be offset, in part, by additional store labor necessary to hang
the merchandise. However, until the expansion and installation are
completed, higher than desired costs may be incurred due to processing
inefficiencies. The Distribution Center expansion and warehouse
management system installation process are scheduled for completion
during the summer of 1995.
The increased costs in the Company's stores primarily resulted from
additional store labor and increases in other store operating expenses.
The increase in store labor resulted in a 0.4 percentage point increase
in SG&A expenses compared to last year. Other store operating expenses
increased 0.2 percentage points when expressed as percentage of net
sales.
Expenses at the Company's Corporate Offices increased 0.2 percentage
points when expressed as a percentage of net sales partially due to
investments made in personnel and management training during the latter
part of the year. As noted above, net sales were below expectations
for the year which resulted in increased SG&A expenses when expressed
as a percentage of net sales.
Store rent expense as a percentage of net sales increased to 7.1% in
fiscal 1994 compared to 6.6% in fiscal 1993. This increase resulted
primarily from the Company's new store expansion strategy of entering
larger, metropolitan markets with higher base rent and common area
maintenance charge structures and renewing leases at slightly higher
lease rates. The Company anticipates that the trend of increasing
store rent expense may continue in the future as it continues to enter
into leases in larger, metropolitan markets including markets in Puerto
Rico and California. However, management anticipates that higher net
sales volumes typically generated by these stores should result in
store rent expense as a percentage of net sales that is not
substantially higher than the Company's historical percentage. As
previously noted, net sales were significantly below expectations for
the second half of fiscal 1994, which resulted in increased store rent
expense when expressed as a percentage of net sales. The Company has
approximately 64 existing leases that expire or have initial lease
terms containing lessee renewal options which may be exercised during
fiscal 1995. Management believes that the Company will not experience
a significant increase in store rent as a result of exercising renewal
options or negotiating new lease terms for such locations.
Depreciation and amortization expense decreased to 1.3% of net sales in
fiscal 1994 from 1.4% of net sales in fiscal 1993. Management believes
that depreciation expense may increase slightly when expressed as a
percentage of net sales during fiscal 1995 due to the impact of the
Distribution Center expansion and investments in a new warehouse
management system and other system upgrades.
The effective income tax rate for fiscal 1994 was 38.5% compared to
37.5% in fiscal 1993. This increase was primarily due to the start-up
net operating loss in Puerto Rico for which no tax benefit is currently
recognized. This increase and the effect of slightly higher state and
local statutory income tax rates were minimized by the tax benefit from
charitable contributions of inventory and utilization of state and
Federal tax credits. Management expects the Company's effective tax
rate to increase slightly in fiscal 1995 due to the expiration of the
Federal Targeted Jobs Tax Credit program and due to the Company's
planned geographic expansion into state and local tax jurisdictions
with higher tax rates in fiscal 1995.
On September 22, 1994, three days after the Company issued a press
release revising estimated sales and earnings for the third quarter,
two shareholders filed separate lawsuits making certain securities and
common law allegations and seeking unspecified damages against the
Company and its Chairman and Chief Executive Officer. The lawsuits,
which seek certification as class actions, allege that the Chairman and
Chief Executive Officer and the Company made materially false,
misleading and untimely projections and statements on earnings which
management strongly believes are without merit. Although the Company
cannot predict the likely outcome of these lawsuits at this time,
management intends to vigorously defend these actions and believes that
as a result of its legal defenses and insurance arrangements, the final
outcome should not have a material adverse effect on the Company's
consolidated financial condition or results of operations.
FISCAL 1993 COMPARED TO FISCAL 1992
Net sales in fiscal 1993 increased 27% to $234.7 million compared to
$184.1 million in fiscal 1992. Average net sales per store increased
approximately 5% in fiscal 1993 to $481,000 compared to $460,000 in
fiscal 1992. The improvement in the average net sales per store
reflects the impact of further refinements of the Company's real estate
strategy to include a more disciplined site selection approval process,
closing of underperforming stores, and expansion into larger,
metropolitan markets. The Company opened 125 stores and closed 31
under performing stores in fiscal 1993 compared to opening 115 stores
and closing 34 under performing stores in fiscal 1992.
The increase in average net sales per store was partially offset by a
decrease of 3% in comparable store sales in fiscal 1993. Comparable
store sales were flat the last three quarters of fiscal 1993, after
experiencing a first quarter decline of 16%.
Gross margins as a percentage of net sales increased to 41.7% in fiscal
1993 compared to 41.2% in fiscal 1992. The merchandise planning and
allocation systems installed in fiscal 1992 enabled the Company to
improve its merchandising by establishing better controls over the
merchandise mix and quantity at each of its stores. This resulted in
an approximate reduction of 0.9 percentage points in the level of
markdowns in fiscal 1993 compared to fiscal 1992. In addition, the
Company's average purchase price per unit for apparel decreased by
approximately 2% and the average purchase price for accessories
increased less than 1% compared to fiscal 1992. Net sales of apparel
and of accessories represented approximately 88% and 12% respectively,
of annual net sales in both fiscal 1993 and fiscal 1992.
Selling, general and administrative ("SG&A") expenses increased as a
percentage of net sales to 27.7% in fiscal 1993 compared to 27.5% in
fiscal 1992. In general, decreases in salaries and related benefits
when expressed as a percentage of net sales were more than offset by
increases in security costs of stores located in larger, metropolitan
cities and transportation expense for the delivery of merchandise to
the Company's stores. The increase in average net sales per store in
fiscal 1993 compared to fiscal 1992 combined with increased
productivity in store and distribution labor, resulted in a 0.5
percentage point decrease in salaries and related benefits when
expressed as a percentage of net sales. The change in transportation
strategy previously discussed, which was initiated during the third
quarter of fiscal 1993, resulted in a 0.7 percentage point increase in
transportation costs when expressed as a percentage of net sales.
Store rent expense as a percentage of net sales increased to 6.6% in
fiscal 1993 compared to 6.4% in fiscal 1992. As discussed above, the
Company's new store expansion strategy of entering into larger,
metropolitan markets resulted in higher base rent and common area
charge structures.
Depreciation and amortization expense remained constant at 1.4% of net
sales in fiscal 1993 and in fiscal 1992.
The effective income tax rate for fiscal 1993 was 37.5% compared to
37.3% in fiscal 1992. The effect of the increase in the statutory
Federal income tax rate that resulted from the Omnibus Budget
Reconciliation Act of 1993 and the effect of the slightly higher state
and local statutory income tax rate were minimized by the utilization
of state tax credits.
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes", effective January 3, 1993. The
cumulative effect of adopting SFAS No. 109 at January 3, 1993 on the
Company's financial statements was immaterial.
INFLATION
During its three most recent fiscal years, the Company believes that
the impact of inflation has not been material to its financial
condition or results of operations. Occasionally, the Company may
experience increases in the average purchase price per unit of
merchandise; however, such increases generally reflect the impact of an
increase in the quality of goods purchased rather than inflationary
factors.
LIQUIDITY AND CAPITAL RESOURCES
In each of the last three fiscal years, the Company's primary needs for
liquidity and capital have been to fund the cost of its new store
expansion, the related growth in merchandise inventories, and the
expansion of the Corporate Offices and Distribution Center.
Historically, these needs have been met principally through cash
provided by operations and the Company's available line of credit.
The Company spent approximately $12.3 million on capital expenditures
in fiscal 1994. In fiscal 1995, the Company plans to spend
approximately $11.5 million on capital expenditures. This includes an
addition to the Distribution Center, a new warehouse management system,
upgrading the Company's information systems, and planned capital
expenditures for opening approximately 110 new stores. The Company's
goal is to have 1,000 stores in operation in approximately four years.
At December 31, 1994, average store inventories were down by 5%,
reflecting decreased levels of fall season apparel. The level of
merchandise inventories is subject to fluctuations because of the
Company's opportunistic buying strategy and prevailing business
conditions. In fiscal 1995, the Company intends to continue this
strategy and to opportunistically purchase merchandise in advance of
the selling seasons when it is to the Company's advantage. This
strategy and the increasing number of stores may result in increases in
total merchandise inventories at the end of each quarter in fiscal
1995.
The Company has an amended agreement with a bank which provides for a
$20,000,000 unsecured line of credit and a $10,000,000 letter of credit
facility, expiring April 30, 1995. The credit facilities contain
certain financial covenants which, among other things, have the effect
of limiting amounts available for dividends to approximately $9,217,000
at December 31, 1994, and prohibit the Company from encumbering or
disposing of a material amount of assets. However, the Company has
never paid cash dividends since its inception, and, currently, the
Board of Directors intends to continue its policy of retaining earnings
for operations and expansion of the business. The Company must also
maintain certain ratios regarding net worth, leverage and fixed
charges. The maximum amounts outstanding under the line of credit
during fiscal 1994 and 1993 were approximately $16,421,000 and
$8,616,000, respectively. The average amounts outstanding under the
line of credit were $3,165,000 during fiscal 1994 and $2,057,000 during
fiscal 1993. The weighted average interest rate was 7.6% in fiscal
1994 and 5.6% in fiscal 1993. There were no amounts outstanding
against the Company's line of credit at December 31, 1994 or January 1,
1994.
On February 28, 1995, the Company and the bank executed a commitment
letter which amends and restates their agreement to provide for a
$25,000,000 unsecured line of credit and a $15,000,000 letter of credit
facility. The revised agreement, when executed, will expire May 31,
1996 and will contain certain covenants which, among other things,
restrict or limit the ability of the Company to incur indebtedness, or
encumber or dispose of assets. In addition, the Company will not be
able to repurchase its Common Stock or pay dividends without prior
approval. The Company must also maintain certain ratios regarding net
worth, leverage and fixed charges. The Company may increase the usage
of its available line of credit in fiscal 1995 compared to fiscal 1994
as a result of the Company's planned capital expenditures, the number
of new store openings, and the intent to continue to opportunistically
purchase merchandise.
Management believes that the Company's needs for operating capital and
funds for capital expenditures in fiscal 1995 should be satisfied by
its cash flow from operations and through the use of its available line
of credit. In the past, the Company has not used long-term debt or
capital leases as a source of capital; however, the Company may use
such permanent financing, if deemed by management to be in the best
interest of the Company.
The Company had outstanding letters of credit totaling approximately
$7,656,000 at December 31, 1994. Letters of credit are used primarily
to purchase merchandise from foreign suppliers. All such purchases are
paid in United States dollars; thus, the Company is not subject to
foreign currency risks. Approximately 6% of the Company's purchases in
fiscal 1994 were paid by letters of credit compared to 9% in fiscal
1993. The Company does not anticipate that the proportion of
merchandise thus purchased should vary significantly in fiscal 1995
from fiscal 1994 levels.
Net cash provided by operating activities for fiscal years 1994, 1993,
and 1992 was $3,588,000, $9,085,000 and $7,468,000, respectively. The
decrease in cash provided by operating activities in fiscal 1994 was
primarily the result of the decrease in net income. Additionally, cash
provided by operations in fiscal 1994 was impacted by an increase in
the net investment in merchandise inventories associated with the
growth in the number of stores and a decrease in Federal and state
income taxes payable. In fiscal 1993 and 1992, the additional cash
generated by the increased level of net income and depreciation and
amortization was substantially offset by an increase in merchandise
inventories.
Net cash used in investing activities for fiscal years 1994, 1993, and
1992 was $12,625,000, $9,388,000 and $9,006,000, respectively. The
Company made capital expenditures of $12,294,000, $8,932,000 and
$8,573,000, respectively, in each of the years presented. Capital
expenditures were primarily for leasehold improvements and equipment
for new stores opened and for expansions to the Distribution Center in
each year, as well as the expansion of the Corporate Offices during
fiscal 1993 and 1992, and the purchase of land adjacent to the
Corporate Offices in fiscal 1992.
Proceeds from the exercise of the Company's Common Stock options
resulted in net cash provided by financing activities of $859,000,
$753,000 and $1,516,000 in fiscal 1994, 1993, and 1992, respectively.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
One Price Clothing Stores, Inc.
Duncan, South Carolina
We have audited the accompanying consolidated balance sheets of One
Price Clothing Stores, Inc. and subsidiary as of December 31, 1994 and
January 1, 1994, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three fiscal years
in the period ended December 31, 1994. Our audits also included the
financial statement schedule listed in the Index at Item 14 (d).
These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of the Company as of
December 31, 1994 and January 1, 1994, and the results of its
operations and its cash flows for each of the three fiscal years in the
period ended December 31, 1994 in conformity with generally accepted
accounting principles. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
February 10, 1995
(February 28, 1995 as to Note B)
<TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<S> <C> <C>
December 31, January 1,
1994 1994
Assets
CURRENT ASSETS
Cash and cash equivalents $ 362,000 $ 8,540,000
Miscellaneous receivables, net of allowance for doubtful accounts
of $189,000 (1994) and $135,000 (1993) 907,000 776,000
Merchandise inventories 26,337,000 23,315,000
Prepaid expenses 1,937,000 1,424,000
Deferred income taxes 1,709,000 1,281,000
TOTAL CURRENT ASSETS 31,252,000 35,336,000
PROPERTY AND EQUIPMENT, at cost
Land 914,000 914,000
Land improvements 475,000 462,000
Buildings 11,855,000 9,450,000
Leasehold improvements 10,055,000 6,820,000
Fixtures and equipment 25,697,000 20,731,000
48,996,000 38,377,000
Less accumulated depreciation 13,606,000 10,724,000
35,390,000 27,653,000
OTHER ASSETS 1,288,000 1,212,000
$ 67,930,000 $ 64,201,000
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable $ 6,470,000 $ 5,831,000
Accrued salaries and wages 1,571,000 2,043,000
Taxes accrued and withheld 666,000 621,000
Accrued employee benefits, including $40,000 (1994)
and $36,000 (1993) due to related party -- Note F 2,191,000 1,390,000
Sales tax payable 1,610,000 1,866,000
Other accrued and sundry liabilities 527,000 386,000
Federal and state income taxes payable -- 2,661,000
TOTAL CURRENT LIABILITIES 13,035,000 14,798,000
DEFERRED INCOME TAXES 1,449,000 1,166,000
DUE TO RELATED PARTY-- Note F 372,000 411,000
COMMITMENTS AND CONTINGENCIES -- Notes B, D and H
SHAREHOLDERS' EQUITY -- Notes E and G
Preferred Stock, par value $0.01 -- authorized and unissued 500,000 shares
Common Stock, par value $0.01 -- authorized 35,000,000 shares, issued
and outstanding 10,305,256 (1994) and 10,221,498 (1993) shares 103,000 102,000
Additional paid-in capital 10,891,000 10,033,000
Retained earnings 42,080,000 37,691,000
53,074,000 47,826,000
$ 67,930,000 $ 64,201,000
See notes to consolidated financial statements
</TABLE>
<TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<S> <C> <C> <C>
Fiscal Year Ended
December 31, January 1, January 2,
1994 1994 1993
(52 weeks) (52 weeks) (53 weeks)
NET SALES $ 283,326,000 $ 234,698,000 $ 184,149,000
Cost of sales 170,066,000 136,727,000 108,267,000
GROSS MARGIN 113,260,000 97,971,000 75,882,000
Selling, general and administrative
expenses-- Note F 82,118,000 65,124,000 50,558,000
Store rent expense 20,210,000 15,599,000 11,805,000
Depreciation and amortization expense 3,612,000 3,184,000 2,628,000
Interest expense 271,000 166,000 74,000
106,211,000 84,073,000 65,065,000
Interest income 89,000 61,000 96,000
NET EXPENSES 106,122,000 84,012,000 64,969,000
INCOME BEFORE INCOME TAXES 7,138,000 13,959,000 10,913,000
Provision for income taxes -- Note C 2,749,000 5,235,000 4,067,000
NET INCOME $ 4,389,000 $ 8,724,000 $ 6,846,000
Net income per common share -- Note G $ 0.42 $ 0.84 $ 0.66
Weighted average shares outstanding 10,524,978 10,403,850 10,303,929
See notes to consolidated financial statements
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C>
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings Total
Balance at December 28, 1991 6,611,741 $ 66,000 $ 7,766,000 $22,155,000 $29,987,000
Stock options exercised 137,041 2,000 1,514,000 1,516,000
Net income 6,846,000 6,846,000
Retroactive effect of 3-for-2 stock
split on April 15, 1994 -- Note G 3,374,391 34,000 (34,000) ----
Balance at January 2, 1993 10,123,173 102,000 9,280,000 28,967,000 38,349,000
stock options exercised 98,325 753,000 753,000
Net income 8,724,000 8,724,000
Balance at January 1, 1994 10,221,498 102,000 10,033,000 37,691,000 47,826,000
stock options exercised 83,758 1,000 858,000 859,000
Net income 4,389,000 4,389,000
Balance at December 31, 1994 10,305,256 $ 103,000 $10,891,000 $42,080,000 $53,074,000
See notes to consolidated financial statements
</TABLE>
<TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<S> <C> <C> <C>
Fiscal Year Ended
December 31, January 1, January 2,
1994 1994 1993
(52 weeks) (52 weeks) (53 weeks)
OPERATING ACTIVITIES
Net income $ 4,389,000 $ 8,724,000 $ 6,846,000
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 3,612,000 3,184,000 2,628,000
Deferred income taxes (145,000) (514,000) (250,000)
Loss on disposal of property and equipment 947,000 460,000 397,000
Decrease in other noncurrent assets 253,000 344,000 142,000
Changes in operating assets and liabilities:
(Increase) in miscellaneous receivables
and prepaid expenses (644,000) (638,000) (402,000)
(Increase) in merchandise inventories (3,022,000) (6,376,000) (4,533,000)
Increase in accounts payable and other liabilities 859,000 2,339,000 2,503,000
(Decrease) increase in federal and state income
taxes payable (2,661,000) 1,562,000 137,000
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,588,000 9,085,000 7,468,000
INVESTING ACTIVITIES
Purchases of property and equipment (12,294,000) (8,932,000) (8,573,000)
Purchases of other noncurrent assets (331,000) (456,000) (433,000)
NET CASH USED IN INVESTING ACTIVITIES (12,625,000) (9,388,000) (9,006,000)
FINANCING ACTIVITIES
Proceeds from exercise of Common Stock options 859,000 753,000 1,516,000
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (8,178,000) 450,000 (22,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8,540,000 8,090,000 8,112,000
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 362,000 $ 8,540,000 $ 8,090,000
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 5,330,000 $ 3,953,000 $ 3,767,000
Interest paid 298,000 166,000 74,000
See notes to consolidated financial statements
</TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994
NOTE A - Summary of Significant Accounting Policies
Business: One Price Clothing Stores, Inc. and subsidiary (the
"Company") operates a chain of off-price retail women's and children's
apparel stores in the United States and Puerto Rico. The Company
operated 641, 540, and 446 stores at the end of fiscal 1994, 1993 and
1992, respectively.
Principles of Consolidation: The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary.
All significant intercompany accounts and transactions have been
eliminated in consolidation.
Cash and Cash Equivalents: The Company considers all highly liquid
investments with an original maturity of three months or less when
purchased to be cash equivalents.
Merchandise Inventories: Merchandise inventories are stated at the
lower of average unit cost or market. Average unit cost is determined
by the first-in, first-out (FIFO) method.
Depreciation: Depreciation is computed by the straight-line method,
based on estimated useful lives of 10 years for land improvements, 33
to 40 years for buildings, 5 to 10 years for leasehold improvements and
3 to 15 years for fixtures and equipment.
Income Taxes: The Company had accounted for income taxes since its
inception using the principles of Accounting Principle Board Opinion
No. 11. Effective January 3, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes". The cumulative effect of adopting SFAS No. 109 had no material
effect on the consolidated financial statements.
Under SFAS No. 109, deferred income taxes represent the future income
tax effect of temporary differences between the book and tax bases of
the Company's assets and liabilities, assuming they will be realized
and settled at the amount reported in the Company's financial
statements.
Trademarks: The cost of trademarks is being amortized over their
expected useful lives of 10 years using the straight-line method.
Revenue Recognition: Revenues from retail sales are recognized at the
time of the sale. Merchandise returns are recorded in the period the
merchandise is returned by the customer. The amount of unrecorded
merchandise returns is not significant to the Company's consolidated
financial position or results of operations.
Store Preopening Costs: Costs associated with the opening of new stores
are expensed as incurred.
Store Closing Costs: At the time management commits to close a store, a
provision is made and operations are charged for any remaining store
lease obligation, any estimated write-down of property and equipment,
and any estimated future operating loss.
Income Per Common Share: Net income per common share is computed by
dividing net income by the weighted average number of shares of Common
Stock and dilutive common stock equivalent shares for stock options
(Note E) outstanding during the period.
Fiscal Year: The Company's fiscal year ends on the Saturday nearest
December 31. Fiscal years 1994 and 1993 each consisted of 52 weeks,
while fiscal year 1992 consisted of 53 weeks.
Reclassifications: Certain amounts included in prior years' financial
statements have been reclassified to conform to the fiscal 1994
presentation.
NOTE B - Credit Facilities
The Company has an amended agreement with a bank which provides for a
$20,000,000 line of credit and a $10,000,000 letter of credit facility,
expiring April 30, 1995. The agreement provides for a 0.20% commitment
fee per annum on the line of credit. Borrowings against the line of
credit are unsecured and bear interest at the Company's option of the
bank's prime interest rate, the adjusted LIBOR rate plus 1.25% or the
bank's discount rate for Bankers Acceptances plus 1.00%. The credit
facilities contain certain financial covenants which, among other
things, have the effect of limiting amounts available for dividends to
approximately $9,217,000 at December 31, 1994, and prohibit the Company
from encumbering or disposing of a material amount of assets. The
Company must also maintain certain ratios regarding net worth, leverage
and fixed charges. The maximum amounts outstanding under the line of
credit during fiscal 1994 and 1993 were approximately $16,421,000 and
$8,616,000, respectively. The average amounts outstanding under the
line of credit were $3,165,000 during fiscal 1994 and $2,057,000 during
fiscal 1993. The weighted average interest rate was 7.6% in fiscal
1994 and 5.6% in fiscal 1993. There were no amounts outstanding
against the Company's line of credit at December 31, 1994 or January 1,
1994. The Company had outstanding letters of credit totaling
approximately $7,656,000 at December 31, 1994.
On February 28, 1995, the Company and the bank executed a commitment
letter which amends and restates their agreement to provide for a
$25,000,000 line of credit and a $15,000,000 letter of credit facility.
The revised agreement, when executed, will provide for a 0.25%
commitment fee per annum on the line of credit and will expire May 31,
1996. Borrowings against the line of credit will be unsecured and will
bear interest at the Company's option of a Base Rate (defined as the
higher of the bank's prime interest rate or the Federal Funds rate plus
0.50%) or the adjusted LIBOR rate plus 1.50%. The amended credit
facilities will contain certain covenants which, among other things,
restrict or limit the ability of the Company to incur indebtedness, or
encumber or dispose of assets. In addition, the Company will not be
able to repurchase its Common Stock or pay dividends without prior
approval. The Company must also maintain certain ratios regarding net
worth, leverage and fixed charges.
<TABLE>
NOTE C - Income Taxes
The provision for income taxes consists of the following:
<S> <C> <C> <C>
Fiscal Year
1994 1993 1992
Current:
Federal $2,400,000 $4,809,000 $3,620,000
State and local 494,000 940,000 697,000
Deferred:
Federal (116,000) (428,000) (210,000)
State and local (29,000) (86,000) (40,000)
$2,749,000 $5,235,000 $4,067,000
</TABLE>
Presented below are the elements which comprise deferred income tax assets
and liabilities:
<TABLE>
<C> <C>
December 31, January 1,
1994 1994
Gross deferred income tax assets:
Accrued employee benefits deductible for tax purposes when paid $ 568,000 $ 385,000
Excess of tax over financial statement basis of inventory 1,062,000 891,000
Accrued retirement benefits deductible for tax purposes when paid 162,000 175,000
Miscellaneous 185,000 160,000
Puerto Rico net operating loss carryforward 292,000 --
Valuation allowance for Puerto Rico loss carryforward (292,000) --
Gross deferred income tax assets 1,977,000 1,611,000
Gross deferred income tax liabilities:
Excess of financial statement over tax basis of
property and equipment (1,592,000) (1,341,000)
Excess of financial statement over tax basis of supplies (125,000) (155,000)
Gross deferred income tax liabilities (1,717,000) (1,496,000)
Net deferred income tax asset $ 260,000 $ 115,000
</TABLE>
The net deferred income tax asset is recognized in the accompanying balance
sheets as follows:
<TABLE>
<S> <C> <C>
December 31, January 1,
1994 1994
Current assets $ 1,709,000 $ 1,281,000
Noncurrent liabilities (1,449,000) (1,166,000)
Net deferred income tax asset $ 260,000 $ 115,000
</TABLE>
The Company's subsidiary has a net operating loss carryforward of
approximately $696,000 which is available to offset future taxable
income in Puerto Rico through fiscal 2001. Due to the subsidiary's
short operating history, management cannot be assured that the
deferred income tax asset related to the operating loss
carryforward will be realized. Accordingly, a valuation allowance
for 100% of the deferred income tax asset has been established.
Otherwise, scheduled reversals of temporary differences and
anticipated future taxable income should be sufficient to offset
scheduled losses arising from the net deferred income tax assets.
<TABLE>
A reconciliation of the statutory Federal income tax rate to the annual effective income tax rate follows:
<S> <C> <C> <C>
Fiscal Year
1994 1993 1992
Federal income tax at statutory rate 35.0% 35.0% 34.0%
State and local income tax, net of Federal tax benefit 4.5 4.0 4.0
Puerto Rico net operating loss - no tax benefit
currently recognized 3.4 -- --
Tax benefit from contributions of inventory (2.7) (0.6) (0.3)
Other, net (1.7) (0.9) (0.4)
38.5% 37.5% 37.3%
</TABLE>
NOTE D - Operating Leases
The Company generally leases its stores under operating leases with
initial terms of five to ten years with one to two renewal option
periods of five years each. The leases generally provide for increased
rents resulting from increases in operating costs and property taxes.
Certain of the leases provide for contingent or percentage rentals
based upon sales volume and others are leased on a month-to-month
basis.
In addition, the Company has operating leases for automobiles, trucks,
trailers and certain other equipment with one to ten year terms. The
leases for trucks and trailers also provide for contingent rentals
based upon miles driven.
Future minimum rental commitments as of December 31, 1994 for
noncancelable leases, are approximately as follows:
<TABLE>
<S> <C> <C> <C>
Fiscal Year 1995.......................................... $18,589,000
1996.......................................... 16,794,000
1997.......................................... 13,988,000
1998....... .................................. 9,888,000
1999.......................................... 6,452,000
Later......................................... 12,518,000
$78,229,000
</TABLE>
Total rental expense for operating leases was as follows:
<TABLE>
<S> <C> <C> <C>
Fiscal Year
1994 1993 1992
Minimum rentals ........... $16,962,000 $13,782,000 $10,827,000
Contingent rentals ........ 3,836,000 2,837,000 2,073,000
$20,798,000 $16,619,000 $12,900,000
</TABLE>
NOTE E - Employee Benefits
Stock Option Plans: The Company has three stock option plans (the
1991, 1988, and 1987 Plans) which provide for grants to certain
officers, directors, and key employees of stock options to purchase
shares of Common Stock of the Company. Options granted under the
plans expire ten years from the date of grant and, to date, have
been granted at prices not less than the fair market value at the
date of grant. Effective October 27, 1988, the Board of Directors
retired all unissued options under the Company's 1987 Plan.
Options cancelled subsequent to October 27, 1988 under the 1987
Plan are retired. Options cancelled under the 1991 and 1988 Plans
are available for reissuance.
Information with respect to the stock option plans is as follows:
<TABLE>
<S> <C> <C> <C> <C>
Fiscal Year
1994 1993
Number of Shares Price Per Share Number of Shares Price Per Share
Outstanding at beginning of year 602,000 $2.67--$12.59 573,000 $2.67--$12.17
Options granted 77,000 $9.06--$19.00 171,000 $6.92--$12.59
Options exercised (84,000) $2.67--$11.17 (99,000) $3.50--$10.59
Options cancelled (44,000) $5.33--$16.38 (43,000) $3.50--$10.59
Outstanding at end of year 551,000 $2.67--$19.00 602,000 $2.67--$12.59
Exercisable at end of year 222,000 195,000
Available for future grants 341,000 375,000
</TABLE>
At December 31, 1994, a total of 892,000 shares of Common Stock
were reserved for issuance under the Company's option plans.
Retirement Plan: Effective July 1, 1992, the Company established a
401(k) and profit-sharing plan, the One Price Clothing Stores, Inc.
Retirement Plan (the "Plan"). All employees in the United States
who are 21 years of age or older with at least one year of service
are eligible to participate in the Plan. In fiscal 1994, the
Company was obligated under the Plan to make a matching
contribution of 25% of each participant's contribution with a
maximum matching contribution of 1.25% of the participant's base
compensation. Effective January 1995, the Company's contribution
obligation increased to 50% of each participant's contribution with
a maximum contribution of 2.5% of the participant's base
compensation. In addition, the Company may make an annual
discretionary contribution on behalf of the participants. Employer
contributions (approximately $132,000, $101,000, and $44,000 in
fiscal 1994, 1993, and 1992, respectively) vest ratably over five
years.
Stock Purchase Plan: The Company adopted a Stock Purchase Plan,
effective March 1995, that allows participating employees to
purchase, through payroll deductions, shares of the Company's
Common Stock at prevailing market prices. All full-time associates
who are 18 years of age or older with at least six months of
service are eligible to participate in the Stock Purchase Plan.
The Stock Purchase Plan provides that participants may authorize
the Company to withhold from net earnings and deposit such amounts
with an independent custodian. The custodian will purchase Common
Stock of the Company at prevailing market prices and distribute the
shares purchased to the participants upon request. The Company
will pay expenses associated with the purchase of the Common Stock
and administration of the Stock Purchase Plan.
NOTE F - Related Party Transactions
In fiscal 1992, the Company entered into a deferred compensation
agreement with a former executive officer who is currently a member
of the Company's Board of Directors. The agreement provides for
monthly payments aggregating $75,000 annually (including interest)
through July 2002. In fiscal 1992, the present value of the
obligation, approximately $493,000, was charged to selling, general
and administrative expenses.
NOTE G - Shareholders' Equity
In March 1994, the Company declared a 3-for-2 stock split effected
in the form of a stock dividend payable April 29, 1994 to
shareholders of record as of the close of business on April 15,
1994. Accordingly, Common Stock outstanding, the weighted average
number of common and common equivalent shares and per share amounts
have been retroactively adjusted to give effect to the stock split.
The Company adopted a Shareholder Rights Plan in November 1994.
Each shareholder of record on November 15, 1994 is entitled to one
Right for each share of Common Stock held on such date. Each Right
entitles the registered holder to purchase from the Company one
half share of Common Stock at a specified price. The Rights become
exercisable only upon the occurrence of certain conditions set
forth in the Shareholder Rights Plan relating to the acquisition of
20% or more of the outstanding shares of Common Stock.
NOTE H - Commitments and Contingencies
On September 22, 1994, two shareholders filed separate lawsuits
making certain securities and common law allegations and seeking
unspecified damages against the Company and its Chairman and Chief
Executive Officer. The lawsuits, which seek certification as class
actions, allege that the Chairman and Chief Executive Officer and
the Company made materially false, misleading and untimely
projections and statements on earnings. Although the Company
cannot predict the likely outcome of these lawsuits at this time,
management intends to vigorously defend these actions and believes
that as a result of its legal defenses and insurance arrangements,
the final outcome should not have a material adverse effect on the
Company's consolidated financial condition or results of
operations.
At December 31, 1994, the Company had commitments of approximately
$1,300,000 related to the addition of a new warehouse management
system and the expansion of the Distribution Center.
<TABLE>
NOTE I - Quarterly Results (Unaudited)
The following is a summary of quarterly (13 weeks) operations for the fiscal years ended December 31, 1994 and January
1, 1994 (in thousands except per share data).
<S> <C> <C> <C> <C>
Fiscal 1994
First Quarter Second Quarter Third Quarter Fourth Quarter
Net sales $56,0007 $82,566 $65,877 $78,876
Gross margin 21,119 36,508 23,736 31,897
Net income (loss) (872) 5,992 (1,835) 1,104
Net income (loss) per common share $ (0.08) $ 0.57 $(0.17) $ 0.11
Fiscal 1993
First Quarter Second Quarter Third Quarter Fourth Quarter
Net sales $39,500 $67,145 $55,322 $72,731
Gross margin 14,973 29,815 21,878 31,305
Net income (loss) (1,553) 5,204 614 4,459
Net income (loss) per common share $(0.15) $0.50 $0.06 $0.43
</TABLE>
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There are no matters which are required to be reported under Item 9.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required under this item is incorporated herein
by reference to the sections entitled "Election of Directors"
and "Executive Officers of the Company" of the Company's
definitive Proxy Statement (the "Proxy Statement") filed with
the Securities and Exchange Commission in connection with the
Annual Meeting of Shareholders to be held April 19, 1995.
ITEM 11. EXECUTIVE COMPENSATION
The information required under this item is incorporated herein
by reference to the sections entitled "Compensation Committee
Interlocks and Insider Participation", "Compensation of
Executive Officers", "Stock Options", "Employment Contracts and
Deferred Compensation Arrangements", "Compensation Committee
Report on Executive Compensation", "Performance Graph" and
"Election of Directors - Directors' Fees" of the Proxy
Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required under this item is incorporated herein
by reference to the sections entitled "Security Ownership of Certain
Beneficial Owners and Management", "Election of Directors" and
"Executive Officers of the Company" of the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required in this item is incorporated herein by
reference to the section entitled "Compensation Committee Interlocks
and Insider Participation" and "Employment Contracts and Deferred
Compensation Arrangements" of the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following financial statements of One
Price Clothing Stores, Inc are included in
Part II, Item 8:
Independent Auditors' Report
Consolidated Balance Sheets as of
December 31, 1994 and January 1, 1994
Consolidated Statements of Income for
the years ended December 31, 1994,
January 1, 1994 and January 2, 1993
Consolidated Statements of
Shareholders' Equity for the years
ended December 31, 1994, January 1,
1994 and January 2, 1993
Consolidated Statements of Cash Flows
for the years ended December 31, 1994,
January 1, 1994 and January 2, 1993
Notes to Consolidated Financial
Statements
(a) 2. Financial Statement Schedule
The following financial statement schedule of
One Price Clothing Stores, Inc. is included in
Item 14 (d):
Schedule II -- Valuation and
Qualifying Accounts.
Schedules not listed above have been omitted
because they are not applicable or the information
is included in the financial statements or notes
thereto.
(a) 3. Exhibits including those incorporated by
reference:
Exhibit
Number Description
3(a) Certificate of Incorporation of the
Registrant, as amended through April
1987: Incorporated by reference to
exhibit of the same number in
Registrant's Registration Statement on
Form S-1, filed April 10, 1987, (File No.
33-13321) ("the S-1").
3(a)(1) Certificate of Amendment of Certificate
of Incorporation of the Registrant:
Incorporated by reference to exhibit of
same number in Registrant's Annual Report
on Form 10-K for the year ended January
1, 1994, (File No. 0-15385) ("the 1993
Form 10-K").
3(b) Restated By-Laws of the Registrant, as of
July 22, 1992 and amended as of July 20,
1994.
4(a) See Exhibits 3(a), 3(a)(1), and 3(b).
4(b) Specimen of Certificate of the
Registrant's Common Stock: Incorporated
by reference to Exhibit 1 of the
Registrant's Registration Statement on
Form 8-A filed with the Securities and
Exchange Commission on June 23, 1987,
(File No. 0-15385).
4(c) One Price Clothing Stores, Inc. and
Wachovia Bank of North Carolina, N. A. as
Rights Agent Shareholder Rights Agreement
dated November 3, 1994: Incorporated by
reference to Exhibit 2 to the
Registrant's Form 8-K filed November 10,
1994 (File No. 0-15385).
Material Contracts -- Executive Compensation Plans and
Arrangements:
10(a)* Stock Option Plan of the Registrant dated
February 20, 1987 and related forms of
Incentive and Non-qualified Stock Option
Agreements: Previously filed as exhibit
10(d) of the S-1.
10(b)* Stock Option Plan of the Registrant dated
December 12, 1988 and related forms of
Incentive and Non-qualified Stock Option
Agreements: Incorporated by reference to
exhibit 10(a) in the Registrant's Annual
Report on Form 10-K for the year ended
December 31, 1988, (File No. 0-15385)
("the 1988 Form 10-K").
10(c)* One Price Clothing Stores, Inc. 1991
Stock Option Plan: Incorporated by
reference to exhibit 10(b) in the
Registrant's Annual Report on Form 10-K
for the year ended December 28, 1991,
(File No. 0-15385) ("the 1991 Form 10-
K").
10(d)* Summary of Officer Bonus Plan: Previously
filed as exhibit of the same number in
Registrant's Annual Report on Form 10-K
for the year ended January 2, 1993, (File
No. 0-15385) ("the 1992 Form 10-K").
10(e)* Form of Employment Agreement between
Registrant and Henry D. Jacobs, Jr.:
Previously filed as exhibit 10(j) in the
1988 Form 10-K.
10(f)* Employment Agreement dated February 1,
1991 between the Registrant and Ethan S.
Shapiro: Incorporated by reference to
exhibit 10(m) in the Registrant's Annual
Report on Form 10-K for the year ended
December 29, 1990, (File No. 0-15385)
("the 1990 Form 10-K").
10(g)* Key man term insurance policy, issued
February 20, 1993, on the life of Henry
D. Jacobs, Jr.: Previously filed as
exhibit of the same number in the 1992
Form 10-K.
10(h)* Employment Agreement dated January 16,
1995 between the Registrant and Stephen
A. Feldman.
10(i)* Disability Income Policy for the benefit
of Henry D. Jacobs, Jr.: Previously filed
as exhibit of the same number in the 1992
Form 10-K.
10(j)* Disability Income Policy for the benefit
of Ethan S. Shapiro: Previously filed as
exhibit of the same number in the 1992
Form 10-K.
10(k)* Agreement between the Registrant and Jane
R. Shapiro, Trustee of the Ethan S.
Shapiro Life Insurance Trust: Previously
filed as exhibit of the same number in
the 1992 Form 10-K.
10(l)* Agreement dated June 24, 1992 between the
Registrant and Raymond S. Waters:
Previously filed as exhibit of the same
number in the 1992 Form 10-K.
10(m)* Proposed Directors' Stock Option Plan to
be effective April 19, 1995 and submitted
for shareholders' approval at the Annual
Shareholders' Meeting to be held April
19, 1995.
Material Contracts -- Other:
10(n) The Corporate Plan for Retirement Profit
Sharing / 401 (k) Plan - A Fidelity
Prototype Plan Non-Standardized Adoption
Agreement 002, Basic Plan No. 07, as
amended September 1, 1994
10(o) Letter of agreement for an unsecured
$15,000,000 line of credit and
$15,000,000 letter of credit facility by
and between the Registrant and
NationsBank dated April 14, 1994 and
unsecured Promissory Note of the
Registrant to NationsBank dated April 14,
1994: Incorporated herein by reference to
exhibit 10 in the Registrant's quarterly
report on Form 10-Q for the quarter ended
April 2, 1994, (File No. 0-15385).
10(p) First Amendment to Letter of agreement,
dated December 31, 1994, by and between
the Registrant and NationsBank and
unsecured Promissory Note of the
Registrant to NationsBank dated February
27, 1995.
10(q) Credit Agreement dated March 16, 1995 by
and between the Registrant and
NationsBank (as agent) for an unsecured
$25,000,000 line of credit facility and a
$15,000,000 letter of credit facility.
11 Statement regarding computation of per
share earnings.
21 Subsidiary of the Registrant.
23 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule (electronic
filing only).
---------------------------------------
* Denotes a management contract or compensatory plan or
agreement.
(b) Reports on Form 8-K.
On October 21, 1994, the Company filed a report on Form 8-K
dated September 29, 1994 to report the legal proceedings
discussed in Item 3.
On November 10, 1994, the Company filed a report on Form 8-K
dated November 3, 1994 to report the adoption of Shareholder
Rights Plan by the Board of Directors.
No other reports on Form 8-K were filed during the last
quarter of the period covered by this report.
(c) Exhibits.
The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) Financial Statement Schedules.
The response to this portion of Item 14 is submitted as a
separate section of this report.
<TABLE>
<S> <C>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ONE PRICE CLOTHING STORES, INC.
Date: March 29, 1995 /s/ Henry D. Jacobs, Jr.
Henry D. Jacobs, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date: March 29, 1995 /s/ Henry D. Jacobs, Jr.
Henry D. Jacobs, Jr.
Chairman of the Board,
Chief Executive Officer and Director
(principal executive officer)
Date: March 29, 1995 /s/ Ethan S. Shapiro
Ethan S. Shapiro
President, Chief Operating Officer and
Director
Date: March 29, 1995 /s/ Raymond S. Waters
Raymond S. Waters
Secretary and Director
Date: March 29, 1995 /s/ Stephen A. Feldman
Stephen A. Feldman
Chief Financial Officer and Treasurer
(principal financial officer)
Date: March 29, 1995 /s/ David F. Bellet
David F. Bellet
Director
Date: March 29, 1995 /s/ Charles D. Moseley, Jr.
Charles D. Moseley, Jr.
Director
Date: March 29, 1995 /s/ Laurie M. Shahon
Laurie M. Shahon
Director
Date: March 29, 1995 /s/ Malcolm L. Sherman
Malcolm L. Sherman
Director
Date: March 29, 1995 /s/ James M. Shoemaker, Jr.
James M. Shoemaker, Jr.
Director
Date: March 29, 1995 /s/ Cynthia C. Turk
Cynthia C. Turk
Director
</TABLE>
<TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<S> <C> <C> <C> <C> <C>
COL. A COL. B COL. C COL. D COL. E
DESCRIPTION Balance at ADDITIONS
Beginning of Charged to Charged Deduction - Balance
Period Cost & to Other- Describe (1) at End of
Expenses Describe Period
YEAR ENDED
DECEMBER 31, 1994:
Allowance for
doubtful accounts $135,000 $822,000 $768,000 $189,000
YEAR ENDED
JANUARY 1, 1994:
Allowance for
doubtful accounts $100,000 $723,000 $ 688,000 $135,000
YEAR ENDED
JANUARY 2, 1993:
Allowance for
doubtful accounts $ 30,000 $553,000 $ 483,000 $100,000
(1) Write-offs charged against the allowance for returned customer checks
</TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT INDEX
Exhibit
Number Description
3(a) Certificate of Incorporation of the
Registrant, as amended through April
1987: Incorporated by reference to
exhibit of the same number in
Registrant's Registration Statement on
Form S-1, filed April 10, 1987, (File No.
33-13321) ("the S-1").
3(a)(1) Certificate of Amendment of Certificate
of Incorporation of the Registrant:
Incorporated by reference to exhibit of
same number in Registrant's Annual Report
on Form 10-K for the year ended January
1, 1994, (File No. 0-15385) ("the 1993
Form 10-K").
3(b) Restated By-Laws of the Registrant, as of
July 22, 1992 and amended as of July 20,
1994.
4(a) See Exhibits 3(a), 3(a)(1), and 3(b).
4(b) Specimen of Certificate of the
Registrant's Common Stock: Incorporated
by reference to Exhibit 1 of the
Registrant's Registration Statement on
Form 8-A filed with the Securities and
Exchange Commission on June 23, 1987,
(File No. 0-15385).
4(c) One Price Clothing Stores, Inc. and
Wachovia Bank of North Carolina, N. A. as
Rights Agent Shareholder Rights Agreement
dated November 3, 1994: Incorporated by
reference to Exhibit 2 to the
Registrant's Form 8-K filed November 10,
1994 (File No. 0-15385).
Material Contracts -- Executive Compensation Plans and
Arrangements:
10(a)* Stock Option Plan of the Registrant dated
February 20, 1987 and related forms of
Incentive and Non-qualified Stock Option
Agreements: Previously filed as exhibit
10(d) of the S-1.
10(b)* Stock Option Plan of the Registrant dated
December 12, 1988 and related forms of
Incentive and Non-qualified Stock Option
Agreements: Incorporated by reference to
exhibit 10(a) in the Registrant's Annual
Report on Form 10-K for the year ended
December 31, 1988, (File No. 0-15385)
("the 1988 Form 10-K").
10(c)* One Price Clothing Stores, Inc. 1991
Stock Option Plan: Incorporated by
reference to exhibit 10(b) in the
Registrant's Annual Report on Form 10-K
for the year ended December 28, 1991,
(File No. 0-15385) ("the 1991 Form 10-
K").
10(d)* Summary of Officer Bonus Plan: Previously
filed as exhibit of the same number in
Registrant's Annual Report on Form 10-K
for the year ended January 2, 1993, (File
No. 0-15385) ("the 1992 Form 10-K").
10(e)* Form of Employment Agreement between
Registrant and Henry D. Jacobs, Jr.:
Previously filed as exhibit 10(j) in the
1988 Form 10-K.
10(f)* Employment Agreement dated February 1,
1991 between the Registrant and Ethan S.
Shapiro: Incorporated by reference to
exhibit 10(m) in the Registrant's Annual
Report on Form 10-K for the year ended
December 29, 1990, (File No. 0-15385)
("the 1990 Form 10-K").
10(g)* Key man term insurance policy, issued
February 20, 1993, on the life of Henry
D. Jacobs, Jr.: Previously filed as
exhibit of the same number in the 1992
Form 10-K.
10(h)* Employment Agreement dated January 16,
1995 between the Registrant and Stephen
A. Feldman.
10(i)* Disability Income Policy for the benefit
of Henry D. Jacobs, Jr.: Previously filed
as exhibit of the same number in the 1992
Form 10-K.
10(j)* Disability Income Policy for the benefit
of Ethan S. Shapiro: Previously filed as
exhibit of the same number in the 1992
Form 10-K.
10(k)* Agreement between the Registrant and Jane
R. Shapiro, Trustee of the Ethan S.
Shapiro Life Insurance Trust: Previously
filed as exhibit of the same number in
the 1992 Form 10-K.
10(l)* Agreement dated June 24, 1992 between the
Registrant and Raymond S. Waters:
Previously filed as exhibit of the same
number in the 1992 Form 10-K.
10(m)* Proposed Directors' Stock Option Plan to
be effective April 19, 1995 and submitted
for shareholders' approval at the Annual
Shareholders' Meeting to be held April
19, 1995.
Material Contracts -- Other:
10(n) The Corporate Plan for Retirement Profit
Sharing / 401(k) Plan - A Fidelity
Prototype Plan Non-Standardized Adoption
Agreement 002, Basic Plan No. 07, as
amended September 1, 1994
10(o) Letter of agreement for an unsecured
$15,000,000 line of credit and
$15,000,000 letter of credit facility by
and between the Registrant and
NationsBank dated April 14, 1994 and
unsecured Promissory Note of the
Registrant to NationsBank dated April 14,
1994: Incorporated herein by reference to
exhibit 10 in the Registrant's quarterly
report on Form 10-Q for the quarter ended
April 2, 1994, (File No. 0-15385).
10(p) First Amendment to Letter of agreement,
dated December 31, 1994, by and between
the Registrant and NationsBank and
unsecured Promissory Note of the
Registrant to NationsBank dated February
27, 1995.
10(q) Credit Agreement dated March 16, 1995 by
and between the Registrant and
NationsBank (as agent) for an unsecured
$25,000,000 line of credit facility and a
$15,000,000 letter of credit facility.
11 Statement regarding computation of per
share earnings.
21 Subsidiary of the Registrant.
23 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule (electronic
filing only).
--------------------------------------
* Denotes a management contract or compensatory plan or agreement.
(b) Reports on Form 8-K.
On October 21, 1994, the Company filed a report on Form 8-K dated
September 29, 1994 to report the legal proceedings discussed in
Item 3.
On November 10, 1994, the Company filed a report on Form 8-K
dated November 3, 1994 to report the adoption of Shareholder
Rights Plan by the Board of Directors. No other reports on
Form 8-K were filed during the last quarter of the period
covered by this report.
(c) Exhibits.
The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) Financial Statement Schedules.
The response to this portion of Item 14 is submitted as a
separate section of this report.
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 10(n)-- The Corporate Plan for Retirement Profit Sharing/401(k) Plan-
A Fidelity Prototype Plan Non-Standardized Adoption Agreement 002, Basic Plan
No. 07, as amended September 1, 1994.
THE CORPORATEplan FOR RETIREMENT
(PROFIT SHARING/401(k)PLAN)
A Fidelity Prototype Plan
Non-Standardized Adoption Agreement 002
Basic Plan No.07
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
(a) Name of Plan:
This is the One Price Clothing Stores, Inc. Retirement Plan
(the "Plan").
(b) Type of Plan:
(1)xx 401(k) and Profit Sharing
(2) Profit Sharing Only
(3) 401(k) Only
(c) Name of Plan Administrator, if not the Employer:
(d) Limitation Year (check one)
(1)xx Calendar Year
(2) Plan Year
(3) Other:
(e) Three Digit Plan Number: 002
(f) Plan Year End (month/day): December 31
(g) Plan Status: (check one)
(1) Effective Date of new plan:_______
(2)xx Amendment Effective Date: 01/01/94.
except Article 1.14(B)4--- effective
4/1/94.
This is (check one):
(A)xx an amendment of The CORPORATEplan for
Retirement Adoption Agreement previously
executed by the Employer; or
(B) a conversion from another plan document
into The CORPORATEplan for Retirement.
The original effective date of the Plan:
July 1, 1992
The substantive provisions of the Plan
shall apply prior to the Effective Date to
the extent required by the Tax Reform Act
of 1986 or other applicable laws.
1.02 EMPLOYER
(a) The Employer is: One Price Clothing Stores, Inc.
Highway 290 Commerce Park
Duncan, SC 29334
Contact's Name: David W. Young
Telephone Number: 803-433-8888
(1) Employer's Tax Identification Number:
057-0779028
(2) Business form of Employer(check one)
(A)xx Corporation
(B) Sole proprietor or partnership
(C) Subchapter S Corporation
(D) Governmental
(E) Tax-exempt organization
(F) Rural Electric Cooperative
(3) Employer's fiscal year end: Saturday
nearest 12/31
(4) Date business commenced: 04/09/87
(b) The term "Employer" includes the following Related
Employer(s)
(as defined in Section 2.01(a)(26)):
1.03 COVERAGE
(a) All Employees who meet the conditions specified below will
be eligible to participate in the Plan:
(1) Service requirement(check one):
(A) no service requirement.
(B) three consecutive months of service(no
minimum number Hours of Service can be
required).
(C) six consecutive months of service(no
minimum number Hours of Service can be
required).
(D)xx one Year of Service(1,000 Hours of Service
is required during the Eligibility
Computation Period.)
(2) Age Requirement(check one):
(A) no age requirement
(B)xx must have attained age 21(not to exceed
21).
(3) The class of Employees eligible to participate in
the Plan (Check one:
(A) includes all Employees of the Employer.
(B)xx includes all Employees of the Employer
except for(check the appropriate box(es)):
(i)xx Employees covered by a collective
bargaining agreement.
(ii) Highly Compensated Employees as
defined in Code section 414(q).
(iii) Leased Employees as defined in
Section 2.01(a)(18).
(iv) Nonresident aliens who do not
receive any earned
income from the Employer which
constitutes United States source
income.
(v) Other
Note: No exclusion in this section may create a
discriminatory class of employees. An Employer's plan must
still pass the Internal Revenue Code coverage and
participation requirements if one or more of the above
groups of Employees have been excluded from the Plan.
(b) The Entry Date(s) shall be (check one):
(1) the first day of each Plan Year(not if Section
1.03(a)(1)(D) is elected).
(2)xx the first day of each Plan Year and the date six
months later.
(3) the first day of each Plan Year and the first day
of the fourth, seventh, and tenth months.
(4) the first day of each month.
(c) Date of Initial Participation-An Employee will become a
Participant unless excluded by Section 1.03(a)(3) above on
the Entry Date immediately following the date Employee
completes the service and age requirement(s) in Section
1.03(a), if any, except(check one):
(1) No exceptions
(2) Employees employed on the Effective Date in
Section 1.01(g) will become Participants on that
date.
(3)xx Employees who meet the age and service
requirement(s) of Section 1.03(a) on the original
Effective Date in Section 1.01(g) will become
Participants on that date.
1.04 COMPENSATION
(a) For purposes of determining Contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7), but
excluding(check the appropriate box(es)):
(1) Overtime Pay
(2) Bonuses
(3) Commissions.
(4) The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer to
the extent such value is includable in
the Employee's taxable income.
Note: These exclusions shall not apply for
purposes of the "Top Heavy" requirements
in Section 9.03, or allocating
Discretionary Employer Contributions if an
Integrated Formula is elected in Section
1.05(a)(2)(B).
(5)xx No exclusions.
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee first
becomes a Participant shall be determined based on the
Employee's Compensation (Check one)
(1)xx For the entire Plan Year.
(2) For the portion of the Plan Year in which the
Employee is eligible to participate in the Plan.
1.05 CONTRIBUTIONS
(a)xx Employer Contributions
(1) Fixed Formula-Nonintegrated
Formula(check(A)or(B)
(A) Fixed Percentage Employer
Contributions:
For each Plan Year, the Employer
will contribute for each
eligible Participant an amount
equal to____%(not to exceed
15%) of such Participant's
Compensation.
(B) Fixed Flat Dollar Employer
Contribution:
For each Plan Year, the Employer
will contribute for each eligible
Participant an amount equal to
$___.
(2)xx Discretionary Formula
The Employer may decide each Plan Year
whether to make a Discretionary Employer
Contribution on behalf of eligible
Participants in accordance with Section
4.06. Such contributions may only be
funded by the Employer after the Plan
year ends and shall be allocated to
eligible Participants upon the
following:(check(A) or (B):
(A)xx Nonintegrated Allocation
Formula:In the ratio that each
eligible Participant's
Compensation bears
to the total
Compensationpaid to all eligible
Participants for the Plan Year.
(B) Integrated Allocation Formula:
In accordance with Section 4.06
Note: An Employer who maintains
any other plan that
provides for Social Security
Integration(permitted
disparity) may not elect(2)(B).
(3) Eligibility Requirement(s)
A Participant shall be entitled to Employer
Contributions for a Plan Year under this
Subsection (a) if the participant satisfies the
following requirement(s). (Check the appropriate
box(es)-Options (B) and (C) may not be elected
together):
(A)xx is employed by the Employer on the last
day of the Plan Year.
(B) earns at least 500 Hours of Service during
the Plan Year.
(C) earns at least 1,000 Hours of Service
during the Plan Year.
(D) no requirements.
Note: If option(A), (B) or (C) above is selected
then Employer Contributions can only be
funded by the Employer after
Plan Year end.
(b)xx Deferral Contributions
(1) Regular Contributions
The Employer shall make a Deferral Contribution in
accordance with Section 4.01 on behalf of each Participant
who has an executed salary reduction agreement in effect
with the Employer for the payroll period in question, not
to exceed 15%(no more than 15%) of Compensation for that
period.
(A) A Participant may increase or decrease, on a
prospective basis, his salary reduction agreement
percentage(check one):
(i) As of the beginning of each payroll
period.
(ii) As of the first day of each month.
(iii) As of the next Entry Date.
(iv)xx (Specify, but must be at least one per
Plan Year) To a maximum of 4 times per
plan year.
(B) A Participant may revoke, on a prospective basis,
a salary reduction agreement at any time upon
proper notice to the Administrator but in such
case may not file a new salary reduction agreement
until(check one)
(i) The first day of the next Plan Year.
(ii)xx Any subsequent Plan Entry Date.
(iii) (Specify, but must be at least once per
Plan Year)
(2) Catch-Up Contributions
The Employer may allow Participants upon proper notice and
approval to enter into a special salary reduction agreement
to make additional Deferral Contributions in an amount up
to 100% of their Compensation for the payroll period(s) in
the final month of the Plan Year.
(3) Bonus Contributions
The Employer may allow Participants upon proper notice and
approval to enter into a special salary reduction agreement
to make Deferral Contributions in an amount up to 100% of
any Employer paid cash bonuses made for such Participants
during the Plan Year. The Compensation definition elected
by the Employer in Section 1.04(a) must include bonuses if
bonus contributions are permitted.
Note: A Participant's Contributions under(2) and/or(3)
may not cause the Participant to exceed the percentage
limit specified by the Employer in(1) after the Plan
Year. The Employer has the right to restrict a
Participant's right to make Deferral Contributions if
they will adversely effect the Plan's ability to pass
the Actual Deferral Percentage and/or the Actual
Contribution Percentage test.
(4) Qualified Discretionary Contributions
The Employer may contribute an amount which it designated
as a Qualified Discretionary Contribution to be included in
the Actual Deferral Percentage or Actual Contribution
Percentage test. Qualified Discretionary Contributions
shall be allocated to Non-highly Compensated
Employees(check one):
(A) in the ratio which each Participant's Compensation
for the Plan Year bears to the total of all such
Participants Compensation for the Plan Year.
(B) as a flat dollar amount for each such Participant
for the Plan Year.
AMENDMENT TO ADOPTION AGREEMENT
401K Plan
WHEREAS, One Price Clothing Stores, Inc. desires to amend its Adoption
Agreement for its 401K, with regard to employer contributions made
thereunder, which Plan is known as the One Price Clothing Stores, Inc.
Retirement Plan(The "Plan"); and
WHEREAS, pursuant to the provisions of Section 10 a written modification is
required;
NOW, therefore the parties agree as follows:
1. The parties adopted the Plan on March 23, 1992 for implementation
effective July 1, 1992. The provisions of Section 1.04 subparagraph(b)
indicate the matching contribution of the employer to be in an amount equal
to "twenty-five percent" ("25%").
2. Effective January 1, 1995, Section 1.03(b) shall be changed so that
the employer may make a matching contribution in the amount of fifty
percent (50%).
3. All other provisions of the Plan shall remain unchanged.
This Amendment is made this the 1st day of September 1994.
ONE PRICE CLOTHING STORES, INC. FIDELITY MANAGEMENT TRUST CO.
By
Rebecca A. Luce Title
Vice President of Corporate Development Date:
Date: 09/01/94
Witness: Witness:
David W. Young
(c)xx Matching Contributions (only if Section 1.05(b)
is checked)
(1) The Employer shall make a Matching Contribution on
behalf of each Participant in an amount equal
to the following percentage of a Participant's
Deferral Contributions during the Plan Year.
(check one):
(A)xx 50%
(B) 100%
(C) 25%
(D) (Tiered Match)____% of the first
_____% of the Participant's
Compensation contributed to the
Plan, _______%of the next____% of
the Participant's Compensation
contributed to the Plan, _______%
of the next ___% of the
Participant's Compensation
contributed to the Plan.
Note: The percentages specified above for
Matching Contributions may not
increase as the percentage of
Compensation contributed
increases.
(E) The percentage declared for the
year, if any, by a Board of
Directors' resolution.
(2) The Employer may at Plan Year end make an additional
Matching contribution equal to a percentage declared by the
Employer, through a Board of Directors' resolution, of the
Deferral Contributions made by each Participant during the
Plan Year(only if an option is checked under
Section 1.05(c)(1)).
(3)xx Matching Contribution Limits(check the appropriate
box(es)):
(A)xx Deferral Contributions in excess
of 5% of ompensation for the
period in question shall not
be considered for Matching
Contributions.
Note: If the Employer elects a percentage
limit in (A) above and
requests the Trustee to account
separately for matched and
unmatched Deferral Contributions,
the matching Contributions
allocated to each Participant
must be computed, and the
percentage limit applied, based
upon each payroll period.
(B) Matching Contributions for each
Participant for each Plan
Year shall be limited to
$________.
(4) Eligibility Requirement(s)
A Participant who makes Deferral Contributions during the
Plan Year under Section 1.05(b)shall be entitled to
Matching Contributions for that Plan Year if the
Participant satisfies the following requirements(s)(Check
the appropriate box(es). Options(B) and (C) may not be
elected together):
(A)xx Is employed by the Employer on the last day of the
Plan Year.
(B) Earns at least 500 Hours of Service during the
Plan Year.
(C) Earns at least 1,000 Hours of Service during the
Plan Year.
(D) Is not a Highly Compensated Employee for the Plan
Year.
(E) Is not a Partner of the Employer, if the Employer
is a partnership.
(F) No requirements.
Note: If option (A), (B) or (C) above is selected then
Matching Contributions can only be funded by the
Employer after the Plan Year ends. Any Matching
Contribution funded before Plan Year end shall not
be subject to the eligibility requirements of this
Section 1.05(c)(4)). If option (A), (B), or (C)
is adopted during a Plan Year, such option shall
not become effective until the first day of the
next Plan Year.
(d) Employee After-Tax Contributions(check one):
(1) Future Contributions
Participants may make voluntary non-deductible
Employee Contributions pursuant to Section 4.09 of
the Plan. This option may only be elected if the
Employer has elected to permit Deferral
Contributions under Section 1.05(b). Matching
Contributions by the Employer are not allowed on
any voluntary nondeductible Employee
Contributions. Withdrawals are limited to one per
year unless Employee Contributions were allowed
under a previous plan document which authorized
more frequent withdrawals.
(2) Frozen Contributions
Participants may not make voluntary nondeductible
Employee Contributions but the Employer does
maintain frozen Participant voluntary
nondeductible Employee Contribution accounts.
1.06 RETIREMENT AGE(s)
(a) The Normal Retirement Age under the Plan is(check one)
(1)xx age 65.
(2) age____(specify between 55 and 64).
(3) later of the age___(cannot exceed 65) or the fifth
anniversary of the Participant's Commencement
Date.
(b) The Early Retirement Age is the first day of the month
after the Participant attains age___(specify
55 or greater) and completes___Years of Service for
Vesting.
(c)xx A Participant is eligible for Disability Retirement if
he/she(check the appropriate box(es)):
(1)xx satisfies the requirements for benefits under the
Employer's Long-term Disability Plan.
(2) satisfies the requirements for Social Security
disability benefits.
(3) is determined to be disabled by a physician
approved by the Employer.
<TABLE>
1.07 VESTING SCHEDULE
(a) The Participant's vested percentage in Employer Contributions(Fixed or Discretionary) elected in Section
1.05(a) and/or Matching Contributions elected in Section 1.05(c) shall be based upon the schedules(s)
selected below, except with respect to any Plan Year during which the Plan is Top-Heavy. The schedule
elected in Section 1.12(d) shall automatically apply for a Top-Heavy Plan Year and all Plan years thereafter
unless the Employer has already elected a more favorable
vesting schedule below.
<S> <C> <C> <C>
(1) Employer Contributions (2) Matching Contributions
(check one) (check one)
(A) N/A - No Employer Contributions (A) N/A- No Matching
Contributions
(B) 100% Vesting immediately (B) 100% Vesting immediately
(C) 3 year cliff (see C below) (C) 3 year cliff (see C below)
(D) 5 year cliff (see D below) (D) 5 year cliff (see D below)
(E) 6 year graduated (see E ) E) 6 year graduated (see E
(Below)
(F) 7 year graduated (see F below) (F) 7 year graduated (see F
(Below)
(G)xx Other vesting (complete G1 below) (G)xx Other vesting (complete G2
below)
</TABLE>
<TABLE>
Years of Vesting Schedule
Service for Vesting
<S> <C> <C> <C> <C> <C> <C>
C D E F G1 G2
0 0% 0% 0% 0% 0% 0%
1 0% 0% 0% 0% 20% 20%
2 0% 0% 20% 0% 40% 40%
3 100% 0% 40% 20% 60% 60%
4 100% 0% 60% 40% 80% 80%
5 100% 100% 80% 60% 100% 100%
6 100% 100% 100% 80% 100% 100%
7 100% 100% 100% 100% 100% 100%
</TABLE>
Note: A schedule elected under G1 or G2 above must be at least as
favorable as one of the schedules in C, D, E or F
above.
(b) Years of Service for Vesting shall exclude (check one)
(1) for new plans, service prior to the Effective<PAGE>
Date as defined in Section 1.01(g)(1).
(2) for existing plans converting from another plan
document, service prior to the original Effective
Date as defined in Section 1.01(g)(2)
1.08 PREDECESSOR EMPLOYER SERVICE
Service for purposes of eligibility in Section 1.03(a)(1)
and vesting in Section1.07(a) of this Plan shall include
service with the following employer(s):
(a)
(b)
(c)
(d)
1.09 PARTICIPANT LOANS
Participant loans(check(a) or (b)):
(a)xx will be allowed in accordance with Section 7.09, subject to
a $1000. minimum amount and will be granted(check(1)or(2)):
(b) will not be allowed.
1.10 HARDSHIP WITHDRAWALS
Participant withdrawals for hardship prior to termination of
employment(check one):
(a)xx will be allowed in accordance with Section 7.10, subject
to a $1000 minimum amount.
(b) will not be allowed.
1.11 DISTRIBUTIONS
(a) Subject to Articles 7 and 8 and (b) below, distributions
under the Plan will be paid
(Check the appropriate box(es)):
(1)xx as a lump sum.
(2) under a systematic withdrawal plan(installments)
(b)xx Check if a Participant will be entitled to receive a
distribution of all or any portion of the following Accounts
without terminating employment upon attainment of
age 59 1/2 (check one):
(1) Deferral Contribution Account
(2)xx All accounts
(c) Check if the Plan was converted (by plan amendment) from
another defined contribution plan, and the benefits were
payable as (check the appropriate box(es):
(1) a form of single or joint and survivor life
annuity.
(2) an in-service withdrawal of vested Employer
Contributions maintained in a Participant's
Account(check (A) and/or (B)):
(A) for at least _____(24 or more)
months.
(B) after the Participant has at
least 60 months of participation
(3) another distribution option that is a "protected
benefit" under Section 411(d)(6) of the Internal
Revenue Code. Please attach a separate page
identifying the distribution option(s).
These additional forms of benefit may be provided for such
plans under Articles 7 or 8.
Note: Under Federal Law, distributions to Participants
must generally begin no later than April 1 following
the year in which the Participant attains age 70 1/2.
1.12 TOP HEAVY STATUS
(a) The Plan shall be subject to the Top-Heavy Plan
requirements of Article 9 (check one):
(1) for each Plan Year.
(2)xx for each Plan Year, if any, for which the Plan is
Top-Heavy as defined in
Section 9.02.
(3) Not applicable. (This option is available for
plans covering only employees subject to a
collective bargaining agreement and there are no
Employer or Matching Contributions elected in
Section 1.05.)
(b) In determining Top-Heavy status, if necessary, for an
employer with at least one defined benefit plan, the
following assumptions shall apply:
(1) Interest rate: ______% per annum
(2) Mortality table: __________
(3)xx Not applicable.
(c) In the event that the Plan is treated as Top-Heavy for a
Plan Year, each non-key Employee shall receive an Employer
Contribution of at least 3% (3, 4, 5 or 71/2)% of Compensation
for the Plan Year in accordance with Section 9.03(check one):
(1)xx under this Plan in any event.
(2) under this Plan only if the Participant is not
entitled to such contribution under another
qualified plan of the Employer.
(3) Not applicable. (This option is available for
plans covering only employees subject to
acollective bargaining agreement and there is no
Employer or Matching Contributions elected in
Section 1.05.)
Note: Such minimum Employer contribution may be
less than the percentage indicated in (c)
above to the extent provided in Section
9.03(a).
(d) In the event that the Plan is treated as Top-Heavy for a
Plan Year, the following vesting schedule shall apply
instead of the schedule(s) elected in Section 1.07(a)
for such Plan Year and each Plan Year thereafter(check one)
(1) 100% vested after_______(not in excess of 3)
Years of Service for Vesting.
<TABLE>
(2)xx Years of Service for Vesting Vesting Percentage Must be at Least
<S> <C> <C>
0 0% 0%
1 20% 0%
2 40% 20%
3 60% 40%
4 80% 60%
5 100% 80%
6 100% 100%
Note: If one or both schedules elected in Section 1.07(a) is (are) more
favorable in all cases than the schedules elected in (d) above then
such schedule(s) will continue to apply even in Plan
Years in which the Plan is Top-Heavy.
</TABLE>
1.13 TWO OR MORE PLANS - Code Section 415 limitation on annual additions
If the Employer maintains or ever maintained another
qualified plan in which any Participant in this Plan is(or
was) a participant or could become a participant, the
Employer must complete this section. The Employer must
also complete this section if it maintains a welfare
benefit fund, as defined in Section 419(e) of the
Code, or an individual medical account, as defined in
Section 415(1)(2) of the Code, under which amounts are
treated as annual additions with respect to any Participant
in this Plan.
(a) If the Employer maintains, or had maintained, any
other defined contribution plan or plans which are
not Master or Prototype Plans, Annual Additions
for any Limitation Year to this Plan will be
limited (check one):
(1) in accordance with Section 5.03 of this
Plan.
(2) in accordance with another method set
forth on an attached separate sheet.
(3)xx Not applicable.
(b) If the Employer maintains, or had maintained, a
defined benefit plan or plans, the sum of the
Defined Contribution Fraction and Defined Benefit
Fraction for a Limitation Year may not exceed the
limitation specified in Code Section 415(e),
modified by section 416(H)(1) of the Code. This
combined plan limit will be met as follows(check
one):
(1) Annual Additions to this Plan are limited
so that the sum of the Defined
Contribution Fraction and the Defined
Benefit Fraction does not exceed 1.0.
(2) another method of limiting Annual
Additions or reducing projected
annual benefits is set forth on an
attached schedule.
(3)xx Not applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(a) Investment Directions
Participant Accounts will be invested(check one):
(1) in accordance with investment directions provided
to the Trustee by the
Employer for allocating all Participant Accounts
among the options listed in (b) below.
(2)xx in accordance with investment directions provided
to the Trustee by each Participant for allocating
his entire Account among the options listed in (b)
below.
(3) in accordance with investment directions provided
to the Trustee by each Participant for all
contribution sources in a Participant's Account
except the following sources shall be invested as
directed by the Employer(check (A) and/or(B)):
(A) Fixed or Discretionary Employer
Contributions
(B) Employer Matching Contributions
The Employer must direct the applicable
sources among the same investment options
made available for Participant directed
sources listed in (b) below.
(b) Plan Investment Options
The Employer hereby establishes a Trust under the plan in
accordance with the provisions of Article 14, and the
Trustee signifies acceptance of its duties under Article 14
by its signature below. Participant Accounts under the
Trust will be invested among the Fidelity Funds listed
below pursuant to Participant and/or Employer directions.
Fund Name Fund Number
(1) Managed Income Portfolio 632
(2) Intermediate Bond Fund 032
*effective (3) Magellan Fund 021
4/1/94 (4)* Fidelity Balanced Fund 304
Note: An additional annual recordkeeping fee will be
charged for each fund in excess of five funds.
To the extent that the Employer selects as an
investment option the Managed Income Portfolio of
the Fidelity Group Trust for Employee Benefit
Plans (the "Group Trust"), the Employer hereby (A)
agrees to the terms of the Group Trust and adopts
said terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee
a copy of the Group Trust , the Declaration of
Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed
Income Portfolio.
Note: The method and frequency for change of investments
will be determined under the rules applicable to
the selected funds or, if applicable, the rules of
the Employer adopted in accordance with Section
6.03. Information will be provided regarding
expenses, if any, for changes in investment
options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence
that this Plan is qualified under Section 401 of the Code. If the
Employer wishes to obtain reliance that his or her plan(s) are
qualified, application for a determination letter should be made to
the appropriate Key District Director of the Internal Revenue
Service. Failure to properly fill out the Adoption Agreement may
result in disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with
Fidelity Prototype Plan Basic Plan Document No. 07. The Prototype
Sponsor shall inform the adopting Employer of any amendments made
to the Plan or of the discontinuance or abandonment of the
prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to the
following telephone number:
1-800-343-9184
EXECUTION PAGE
(Fidelity's Copy)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this _____day of _____, 19______.
Employer______________________________
By____________________________________
Title___________________________________
Employer_______________________________
By____________________________________
Title___________________________________
Accepted by
Fidelity Management Trust Company, as Trustee
By________________________________ Date____________________
Title______________________________
EXECUTION PAGE
(Employer's Copy)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this 22nd day of February, 1994.
Employer One Price Clothing Stores, Inc.
By Rebecca Luce
Title Vice President Corporate
Development
Employer ____________________________________
By__________________________________________
Title________________________________________
Accepted by
Fidelity Management Trust Company, as Trustee
By Gary Yerke Date 4-22-94
Title Legal Counsel/Authorized Signatory
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 10(h)--Employment Agreement dated January 16, 1995 between the
Registrant and Stephen A. Feldman.
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 16th day of January, 1995,
by and between One Price Clothing Stores, Inc., a Delaware corporation with
its principal place of business in Spartanburg County, South Carolina,
hereinafter referred to as "Employer," and Stephen A. Feldman, a resident
of Lincoln, State of Rhode Island, hereinafter referred to as "Employee."
W I T N E S S E T H :
For and in consideration of the mutual covenants and promises of
the parties hereto and the benefits inuring to the parties hereto,
Employer and Employee agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer employs Employee as its Chief Financial Officer and Employee
accepts such employment with Employer. The employment hereunder shall
commence on the date Employee reports for full time work, and shall continue
until terminated as hereinafter provided.
2. TERMINATION. The employment hereunder shall terminate at the will
of either party at any time, with or without cause, or upon the mutual
agreement of the parties hereto.
3. DUTIES OF EMPLOYEE. Employee shall serve Employer faithfully
and to the best of his ability. Employee shall devote his full time and
efforts to his duties as an employee of Employer.
4. COMPENSATION AND BENEFITS.
(a) Salary. For all services rendered to Employer under this
Agreement, Employer shall pay Employee an annual base salary of not less than
$225,000, subject to annual review, payable in bi-weekly installments in
accordance with the usual payroll practice of Employer, less all legally
required deductions.
(b) Bonus. In addition to the above salary, the Board of Directors
Employer, in its sole discretion, may award to Employee an annual bonus in
accordance with a bonus plan that has been adopted by the Board of Directors.
(c) Special Stock Option. Employee shall be granted an option for
20,000 shares of Employer's common stock at the market price on the day of
grant, exercisable twenty (20%) percent annually commencing twelve (12)
months from the day of grant. This option shall be granted on the day
Employee reports for full-time work.
(d) Other Benefits.
(i) During the term of his employment, Employee shall be entitled
to participate in all employee benefits as are customarily provided to its
officers by Employer, and to participate in such other employee benefits as
may from time to time be instituted by Employer's Board of Directors.
(ii) Employee shall also be entitled to reimbursement of all
reasonable hotel, travel, entertainment and other business expenses actually
incurred by Employee in the course of Employee's employment upon submission
to Employer of satisfactory documentation thereof.
(e) Moving Expenses. Employer shall reimburse Employee for:
(i) Employer agrees to reimburse Employee for air travel up
to eight (8) round trip airline tickets, other than first-class, to and
from Greenville/Spartanburg, SC/Providence, RI.
(ii) Transportation of household goods and effects, and not more
than two (2) automobiles.
(iii) Upon reporting for work Employer agrees to reimburse
Employee for up to six (6) months for the cost of interim living expenses,
such reimbursement to cover lodging only. Total cost of interim living
expenses not to exceed $4,000.00.
(iv) Employer agrees to reimburse Employee for lodging,
meals, etc., for a maximum of three (3) trips, which includes the actual
moving event.
(f) Employer shall pay Employee up to $35,000 of documented expenses
for brokerage fees, closing costs, double mortgage payments and any and all
other related relocation expenses. This payment will be made upon
presentation of documentation on or after the first day of employment.
(g) Payments Upon Termination.
(i) In the event Employee is terminated by Employer, with or
without cause, except for fraud, theft, dishonesty or criminal intent, and
provided Employee has been continuously employed for a period of ninety (90)
days, Employer shall continue Employee's salary following Employee's
termination for six (6) additional months at the annual base salary in
effect at the date of Employee's termination, payable in accordance with
Employer's usual payroll practices.
(ii) In the event Employee has not taken a position with another
Company by the end of six months from the date of Employee's involuntary
termination, Employer shall pay to Employee up to an additional three (3)
months salary continuation on a bi-weekly basis so long as other employment
has not begun.
(iii) In the event Employee voluntarily terminates his employment
with Employer, he shall be entitled to no additional payment upon such
termination other than any then accrued but unpaid salary, vacation pay, or
other normal reimbursement items.
(iv) In the event Employee shall voluntarily terminate his
employment with Employer prior to his first anniversary of employment,
Employee shall reimburse Employer fifty (50%) percent of payments received
for moving expenses and relocation expense reimbursement set forth in
paragraph (e) and paragraph (f) above.
5. CONFIDENTIAL INFORMATION. Employee acknowledges that during
his employment he will have access to confidential information belonging to
the Employer. Such confidential information shall consist of all information
disclosed to Employee as a result of employment by Employer not generally
known in the retail business in which Employer is engaged including
information concerning Employer's suppliers, including the costs, quantities
and types of goods supplied, and the identity of such suppliers; information
concerning the Employer's marketing and/or sales strategy or plans; real estate
strategy and expansion plans; all pricing information relating to merchandise
offered for sale by Employer; customers'list and all information dealing with
customers' needs or preferences; all data processing information; all financial
information including financial statements, financing plans and forecasts, and
any and all information designated or marked as confidential. Employee will
not use or disclose, or otherwise make available, such confidential information
to any other person or entity without prior express written consent of
Employer, either during or following the termination of Employee's employment.
Upon termination of employment, Employee shall turn over to Employer all
property then in his possession or custody belonging to Employer and shall
not retain any copies or reproductions of correspondence, memoranda, reports,
notebooks, drawings, photographs, or other documents relating in any way to
the affairs of Employer.
6. NON-COMPETITION.
(a) Upon termination of Employee's employment with Employer,
whether voluntary or involuntary and whether with or without cause, Employee
will not for a period of one (1) year from date of such termination conduct
or engage in, directly or indirectly, alone or jointly, with any other person
or corporation as agent, consultant, employee, manager, purchaser, proprietor,
stockholder, co-partner, or otherwise, any type of retail apparel business
which uses the one price concept or a substantially similar concept, such as
a ceiling price point. This restriction applies to the continental United
States.
(b) Employee agrees not to employ or cause to be employed any
other employee of Employer for a period of three (3) years after Employee's
termination of employment. This restriction applies to any type of business
which Employee may enter.
7. NOTICES. All notices, consents, changes of address and other
communications (hereinafter referred to as "Notice(s)") required or permitted
to be made under the terms of this Agreement shall be in writing and shall be
(i) personally delivered by an agent of the relevant Party, or (ii)
transmitted by postage prepaid, certified or registered mail:
To Employer: One Price Clothing Stores, Inc.
Post Office Box 2487
Spartanburg, SC 29304
To Employee: Stephen A. Feldman
14 Fair Oaks Drive
Lincoln, RI 02865.
8. WAIVER OF BREACH. The waiver of Employer of a breach by
Employee of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by Employee. No waiver shall be valid
unless in writing and signed by any authorized officer of Employer.
9. ASSIGNMENT. Employee acknowledges that the services to be
rendered by Employee are unique and personal. Accordingly, Employee may not
assign any of Employee's rights or delegate any of Employee's duties or
obligations under this Agreement. The rights and obligations of Employer
under this Agreement shall inure to the benefit of and all be binding upon
the Employer, and its successors and assigns.
10. REPRESENTATIONS AND WARRANTIES. Employee represents and
warrants to Employer that he is under no obligation to or bound by any
contract with any person, corporation or other entity which would prohibit
or in any way interfere with the performance of his duties and obligations
to Employer under this Agreement.
11. SEVERABILITY. If any provision of this Agreement as applied
to either party or to any circumstance shall be adjudged by a court to be
invalid or unenforceable, the same shall in no way affect any other
provision of this Agreement, or the application of each provision to any
other fact or circumstances.
12. ENTIRE AGREEMENT, MODIFICATION OR AMENDMENT. This Agreement
constitutes the entire agreement of the parties with respect to its subject
matter and supersedes all prior oral or written agreements. This Agreement
may be modified or amended from time to time by the mutual agreement of the
parties hereto. No modification or amendment of this Agreement shall be
binding upon either party unless it is in writing and executed by the party
sought to be charged.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
14. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina, without
giving effect to South Carolina's rules of conflicts of law, and regardless of
the place or places of its physical execution and performance.
16. ENFORCEMENT. This Agreement may only be enforced in a court of
competent jurisdiction in Spartanburg County, South Carolina. Employee
agrees to submit to the jurisdiction of a court of competent jurisdiction in
Spartanburg County, South Carolina, whether or not then residing in South
Carolina. The prevailing party shall be entitled to recover from the other
party the cost of any court action, including reasonable attorneys fees.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Witnesses: One Price Clothing Stores, Inc.
Ethan Shapiro By: /s/ Henry D. Jacobs, Jr. (SEAL)
Henry D. Jacobs, Jr.
Diane O'Bryant Chairman of Board of Directors
As to Employer
"EMPLOYER"
Rebecca Luce /s/ Stephen A. Feldman (SEAL)
Stephen A. Feldman
Keith Holtz
As to Employee "EMPLOYEE"
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 10(p)--First Amendment to Letter of Agreement, dated December 31,
1994, by and between the Registrant and NationsBank and unsecured
Promissory Note of the Registrant to NationsBank dated February 27, 1995.
FIRST AMENDMENT TO LETTER AGREEMENT
THIS FIRST AMENDMENT TO LETTER AGREEMENT (the
"First Amendment"), dated as of December 31, 1994, is made
by and between
ONE PRICE CLOTHING STORES, INC. (the "Borrower");
and
NATIONSBANK, N.A. (CAROLINAS), a national banking
association organized and existing under the laws of the
United States and having offices in Charlotte, North
Carolina (the "Bank").
RECITALS:
A. The Borrower and the Bank entered into a
letter agreement, dated as of April 14, 1994 (the "Letter
Agreement").
B. The Borrower and the Bank have agreed to
amend the Letter Agreement as set forth herein.
NOW THEREFORE, the parties hereto agree as
follows:
1. The Letter Agreement is amended as
follows:
(a) all references to "NationsBank of
North Carolina, N.A." are replaced with references to
"NationsBank, N.A. (Carolinas)";
(b) Financial Covenant 5) on page 3
is amended in its entirety so that such Financial
Covenant now reads as follows:
5) Minimum Fixed Charge
Coverage Ratio of 0.85 to 1.00 for the fiscal quarter
ending December 31, 1994 and 1.00 to 1.00 for each fiscal
quarter ending thereafter.
2. Except as hereby modified, all the terms
and provisions of the Letter Agreement and exhibits thereto
remain in full force and effect.
3. The Borrower will execute such additional
documents as are reasonably requested by the Bank to
reflect the terms and conditions of this First Amendment
and will cause to be delivered such certificates, legal
opinions and other documents as are reasonably required by
the Bank. In addition, the Borrower will pay all costs and
expenses in connection with the preparation, execution and
delivery of the documents executed in connection with this
transaction, including, without limitations, the reasonable
fees and out-of-pocket expenses of special counsel to the
Bank as well as any and all filing and recording fees and
stamp and other taxes with respect thereto and to save the
Bank harmless from any and all such costs, expenses and
liabilities.
4. This First Amendment may be executed in
any number of counterparts, each of which when so executed
and delivered shall be deemed an original, and it shall not
be necessary in making proof of this First Amendment to
produce or account for more than one counterpart.
5. This First Amendment and all other
documents executed pursuant to the transactions
contemplated herein shall be deemed to be contracts made
under, and for all purposes shall be construed in
accordance with, the internal laws and judicial decisions
of the State of North Carolina. The Borrower hereby
submits to the jurisdiction and venue of the state and
federal courts of North Carolina for the purposes of
resolving disputes hereunder and thereunder or for purposes
of collection.
IN WITNESS WHEREOF, the parties hereto have caused
this First Amendment to be executed by their fully
authorized officers as of the day and year first above
written.
ONE PRICE CLOTHING STORES, INC.
By: Stephen A. Feldman
Title: Chief Financial Officer
NATIONSBANK, N.A. (CAROLINAS)
By: Mark D. Halmrast
Title: Assistant Vice President
NATIONSBANK
Promissory Note
Amount Date
$5,000,000.00 2-27-95
Lease
For Value Received, One Price Clothing Stores, Inc.
("Borrower") unconditionally (and jointly and severally, if
more than one promise(s) to pay to the order of NationsBank
of North Carolina, N.A. ("Bank"), at its offices at
Charlotte, North Carolina, or at such other place as may be
designated by Bank, in immediately available funds, the
principal sum of five million and no/100 dollars
($5,000,000), together with interest from the date hereof
on the unpaid principal balance hereunder, computed daily
at the interest Rate indicated below, payable in accordance
with the Payment Schedule indicated below.
Rate
__ the Rate shall be the Prime Rate of Bank (defined
below) plus_____________ (_______%) Percent
X the Rate shall be as defined accompanying Letter
Agreement of April 14, 1994.
__ If this block is checked also, this is a variable rate,
consumer purpose loan secured by a one to four unit
residential structure and shall have a maximum interest
rate of ____% or the maximum rate authorized by applicable
law, whichever is less.
Interest will be payable:___ In arrears ___ in advance
Interest at the Rate set forth above, unless otherwise
indicated, will be calculated on the basis of the 365/360
method, which computes a daily amount of interest for a
hypothetical year of 360 days, then multiplies such amount
by the actual number of days elapsed in an interest
calculation period. If interest is not to be computed
using this method, describe the method to be used:
___________________________________________________________
___________________________________________________________
The "Prime Rate of Bank" is the fluctuating rate of
interest established by Bank from time to time as its
"Prime Rate," whether or not such rate shall be otherwise
published. Such Prime Rate is established by Bank as an
index or base rate and may or may not at any time be the
best or lowest rate charged by Bank on any loan. Any Rate
based on a fluctuating index or base rate will, unless
otherwise provided, change each time and as of the date
that the index or base rate changes. If the Rate is to
change on any other date or at any other interval, please
describe:_________________________________________________
Whenever there is a default under this note (this "Note")
or, if this Note is a demand note, whenever there is non-
payment upon demand, the Rate of the interest on the unpaid
principal and interest shall, at the option of Bank, become
the Default Rate (defined on the reverse side).
Notwithstanding any other provision contained in this Note,
Bank does not intend to charge and Borrower shall not be
required to pay any amount of interest or other fees or
charges that is in excess of the maximum permitted by
applicable law. Any payment in excess of such maximum
shall be refunded to Borrower or credited against
principal, at the option of Bank.
Payment Schedule
All payments received hereunder may be applied, at Bank's
option, first to the payment of any expenses or charges
payable hereunder and accrued interest, with the balance
being applied to principal, or in such other order as Bank
shall determine. Borrower may not prepay this Note, in
whole or in part, without the express consent of Bank or
any holder hereof. If any payment is not made in
immediately available funds, Bank may postpone the
crediting of such payment until the payment is actually
collected.
<TABLE>
<S> <C>
X Demand/Time Principal shall be in a single payment on Demand or, if demand is not sooner made
(with Demand on April 30, 1995; interest thereon shall be paid: ____ monthly or ____ quarterly,
Feature) or X Per Letter Agreement commencing on ___________, 19___, and continuing on the
same day of each successive month/quarter/or other period (as applicable) thereafter,
with a final payment of all unpaid interest at the time ofthe payment of the principal.
___ Term Principal shall be paid in _________ (___) equal;___monthly, ____ quarterly, or
_____ installments of $_________ each, commencing on_______________, 19___, together
with accrued interest thereon atthe Rate set forth above, and continuing on the same
day of each successive month/quarter/or other period (as applicable) thereafter, with
a final payment of all unpaid principal and interest thereon on______________, 19_____.
___ Term-Level Principal and interest shall be paid in __________ (_____) equal; ___ monthly, __
Payments ___ quarterly or _____________ installments of $____________ each,
commencing on __________, 19___, and continuing on the same day of each
successive month/quarter/or other period (as applicable) thereafter, with a final
payment of all unpaid principal and interest thereon on ____________, 19____;
provided that, if accrued interest on any payment date exceeds the installment amount
set forth above, Borrower will pay an additional amount equal to such excess interest.
___ Other ______________________________________________________________________________________
_____________________________________________________________________________________
___ If this box is checked, Borrower authorizes Bank to effect payment of sums due under this Note by means of
debiting Borrower's account number _____________________; provided, that such authorization shall not affect the
obligation of Borrower to pay such sums when due, without notice, if there are insufficient funds in such account
to make such payment in full on the due date thereof.
Jury Trial Borrower, Obligors (defined onthe reverse side) and Bank each waive trial
Waiver and by jury with respect to any action, claim, suit or proceedings on or arising out
Venue Agreement of this note, the obligations, the conduct of the relationship between Bank and
Borrower, and/or the conduct of the relationship between Bank and Obligors. Any
litigations arising hereunder or related hereto may be tried by the North Carolina
Courts for Mecklenburg County or the Federal Court of the Western District of
North Carolina.
</TABLE>
The Security Provisions and Additional Terms and Conditions
Set Forth On The Reverse Side Of This Note Are A Part Of
This Note.
Witness the hand(s) and seal(s) of the undersigned, each of
the undersigned having adopted the word (Seal) as its seal
for the purpose of executing and delivering this Note under
Seal.
<TABLE>
<S> <C>
Witness/Attest: Borrower:
_____________________________________ _____________________________(Seal)
Individual
_____________________________________ _____________________________(Seal)
Individual
One Price Clothing Stores, Inc.
Name of Corporation, Partnership, etc.
By: Stephen A. Feldman (Seal)
__________________________ Title: Chief Financial Officer
</TABLE)
(Reverse Side of Promissory Note)
Security
If this box is checked, repayment of this Note and all other obligations of
Borrower to Bank or any holder hereof is secured by and Borrower hereby
grant(s) a security interest in all collateral given by Borrower in
connection with the loan evidenced by this Note, including any
modifications, extensions or renewals thereof. "Obligations" of Borrower as
used herein shall include this Note and all other obligations, liabilities
or indebtedness of every kind of any party to this Note in whatever capacity
to Bank, whether direct or indirect, absolute or contingent, due or to
become due, or now or hereafter existing or arising. Bank is entitled to
the benefits of the security agreements, pledge agreements, deeds of trust
or other collateral documents executed in connection with this Note for all
obligations. All collateral documents now or hereafter securing this Note
and the obligations of Borrower are referred to herein as the "Security
Documents." Failure to check this box shall not, however, affect the
validity or enforceability of any security interest for the obligations
created by the Security Documents or otherwise. A description of the
collateral follows:
The collateral also includes the proceeds and products thereof and any and
all additions, accessions and substitutions to or for the collateral, as
well as any personal property or funds belonging to Borrower, which now or
hereafter are in the control or possession of or on deposit in or with Bank
for any reason or purpose.
Additional Terms and Conditions
1. The maker and any co-maker, any endorser hereof or any other party
hereto or any guarantor hereof (collectively "Obligors") and each of them:
(i) waive(s) presentment, demand, notice of demand and notice of
acceleration of maturity, protest, notice of protest and notice of
nonpayment, notice of dishonor, and any other notice required to be given
under the law to any Obligors, in connection with the delivery, acceptance,
performance, default or enforcement of this Note, of any endorsement or
guaranty of this Note or of any of the Security Documents; (ii) consent(s)
to any and all delays, extensions, renewals or other modifications of this
Note or the Security Documents, or waivers of any term hereof or of the
Security Documents, or release or discharge by Bank of any of Obligors, or
release, substitution or exchange of any security for the payment hereof or
the failure to act on the part of Bank or any indulgence shown by Bank, from
time to time and in one or more instances (without notice to or further
assent from any of Obligors) and agree(s) to no such action, failure to act
or failure to exercise any rights or remedy on the part of Bank shall in any
way affect or impair the obligations of any Obligors or be construed as a
waiver by Bank of, or otherwise affect, any of Bank's rights under this
Note, under any endorsement or guaranty of this Note or under any of the
Security Documents; and (iii) agree(s) to pay, on demand, all costs and
expenses of collection of this Note or of any endorsement or guaranty hereof
and/or the enforcement of Bank's rights with respect to, or the
administration, supervision, preservation, protection of, or realization
upon, any property securing payment hereof, including, without limitations,
reasonable attorney's fees.
2. This Note is delivered in and shall be construed under the internal law
and judicial decisions of the State of North Carolina, and the laws of the
United States as the same might be applicable. In any litigation in
connection with or to enforce this Note or any endorsement or guaranty of
this Note or any of the Security Documents, Obligors, and each of them,
irrevocably consent(s) to and confer(s) personal jurisdiction on the courts
of the State of North Carolina or the United States courts located within
the State of North Carolina, and expressly waive(s) any objections to the
venue of the courts described on the front of this Note, and agree(s) that
service of process may be made on Obligors by mailing a copy of the summons
and complaint by registered or certified mail, return receipt requested, to
their respective addresses. Nothing contained herein shall, however,
prevent Bank from bringing any action or exercising any rights within any
other state or jurisdiction or from obtaining personal jurisdiction by any
other means available by applicable law. The term "Bank" as used in this
Note shall include Bank's successors, endorsees and assigns. The terms
"Borrower" and "Obligors" as used in this Note shall include the respective
successors, assigns, heirs and personal representatives thereto or thereof,
provided, however, that no obligations of Borrower or Obligors hereunder
can be assigned without the prior written consent of Bank.
3. The occurrence of any one or more of the following events shall
constitute a default under this Note: (i) the failure to pay or perform any
obligation, liability or indebtedness of any of Obligors to Bank, whether
under this Note or any other agreement, note or instrument now or hereafter
existing, as and when due (whether upon demand, at maturity or by
acceleration, no prior demand therefor by Bank being necessary); (ii) the
failure to pay or perform any other obligation, liability or indebtedness of
any of Obligors whether to Bank or some other party, the security for which
constitutes an encumbrance on the security for this Note; (iii) death of
any of Obligors (if an individual), or a proceeding being filed or commenced
against any of Obligors for dissolution or liquidation, or any of Obligors
voluntarily or involuntarily terminating or dissolving or being terminated
or dissolved; (iv) insolvency of, business failure of, the appointment of a
custodian, trustee, liquidator or receiver for or for any of the property
of, or an assignment for the benefit of creditors by, or the filing of a
petition under any bankruptcy, insolvency or debtor's relief law or for any
adjustment of indebtedness, composition or extension by or against any of
Obligors; (v) any attachment, lien or additional security interest being
placed upon, or any seizure or forfeiture or, any of the property which is
security for this Note; (vi) acquisition at any time or from time to time of
title to the whole or any part of the property which is security for this
Note by any person, partnership, corporation or other entity other than any
of Obligors; (vii) Bank determining that any representation or warranty made
by any of Obligors to Bank is, or was, untrue or materially misleading;
(viii) any default under the Security Documents; or (ix) Bank reasonably
deeming itself insecure for any reason.
4. Whenever there is a default under this Note (a) the entire balance
outstanding hereunder and all other obligations of Obligors to Bank (however
acquired or evidenced) shall, at the option of Bank, become forthwith due
and payable, without presentment, notice, protest or demand of any kind for
the payment of the whole or any part hereof (all of which are expressly
waived by Obligors), and/or (b) to the extent permitted by law, the rate of
interest on the unpaid principal shall, at the option of Bank, be increased
to the greater of (i) three percent (3%) over the contract rate (as shown on
the face of this Note) or (ii) three percent (3%) over the Prime Rate of
Bank (the rates of interest set forth in paragraph 4(b)(i) and 4(b)(ii) are
herein alternatively called the "Default Rate"); and/or (c) to the extent
permitted by law, a delinquency charge ("Late Fee") may be imposed in an
amount not to exceed four percent (4%) of the unpaid portion of any payment
in default for more than fifteen days in the event interest is payable in
arrears or for more than thirty days in the event interest is payable in
advance. Unless the terms of this Note call for repayment of the entire
balance of this Note (both principal and interest) in a single payment and
not for installments of interest or principal and interest, the four percent
(4%) Late Fee may be imposed not only with respect to regular installments
of principal, interest, or interest and principal, but also with respect to
any other payment in default under this Note (other than a previous Late
Fee), including, without limitation, a single payment of principal due at
maturity of this Note. In the event any installment, or portion thereof, is
not paid in a timely fashion, subsequent payments will be applied first to
the past due balance (which shall not include any previous Late Fees),
specifically to the oldest maturing installment, and a separate late Fee
will be imposed for each payment that becomes due until the default is
cured. The provisions herein for a Default Rate an/or a Late Fee shall not
be deemed to extend the time for any payment hereunder or to constitute a
"grace period" giving Obligors a right to cure any default. If the Default
Rate is a factor of the Prime Rate, the Default Rate will change each time
and as of the date that the Prime Rate of Bank changes. At Bank's option,
any accrued and unpaid interest, fees or charges may, for purposes of
computing and accruing interest on a daily basis after the due date of this
Note or any payment hereunder, be deemed to be a part of the principal
balance under this Note, and interest shall accrue on a daily compounded
basis after such date at the rate provided in this Note until the entire
outstanding balance of principal and interest is paid in full. Failure at
any time to exercise any of the aforesaid options or any other rights of
Bank shall not constitute a waiver thereof, nor shall it be a bar to the
exercise of any of the aforesaid options or rights at a later date. All
rights and remedies of Bank shall be cumulative and may be pursued singly,
successively or together, at the option of Bank. If this Note is payable on
demand, the acceptance by Bank of any partial payment from any of Obligors
shall not affect the demand tenor of this Note. Bank is hereby authorized
at any time to charge against any deposit accounts of any party of this
Note, as well as any other property of such party at or under the control
of Bank, without notice, any and all obligations of such party, whether due
or not.
5. In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in
part or in any respect, or in the event any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note,
then and in any of those events, such provision or provisions only shall be
deemed null and void and shall not affect any other provision of this Note
and the remaining provisions of this Note shall remain operative and in full
force and effect and shall in no way be affected, prejudiced or disturbed
thereby.
</TABLE>
<TABLE>
Endorsements:
The undersigned endorser(s) hereby unconditionally undertake and agree to pay this Note in accordance with its terms and all
other obligations of Borrower to Bank.
<S> <C>
(Seal) (Seal)
Individual (Name of Corporation,Partnership, etc).
By:
(Seal)
Individual Title:
</TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 10(m)--Proposed Director Stock Option Plan to be effective
April 19, 1995 and submitted for shareholders' approval at the
Annual Shareholders' Meeting to be held April 19, 1995.
ONE PRICE CLOTHING STORES, INC.
DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of the One Price Clothing Stores, Inc. Director Stock
Option Plan (the "Plan") is to promote the growth and profitability of
One Price Clothing Stores, Inc. (the "Company") from time to time by
increasing the personal participation of non-employee directors in the
financial performance of the Company, by enabling the Company to
attract and retain non-employee directors of outstanding competence and
by providing such directors with an equity opportunity in the Company.
This purpose will be achieved through the grant of stock options under
this Plan ("Options") to purchase shares of common stock of the
Company, $0.01 par value per share ("Common Stock").
2. ADMINISTRATION
The Plan shall be administered by the Company's Board of Directors
(the "Board").
The Board shall have complete authority, consistent with and
subject to the terms of this Plan, to: (i) interpret all terms and
provisions of the Plan consistent with law; (ii) prescribe the form of
instrument(s) evidencing Options granted under this Plan; (iii) adopt,
amend and rescind general and special rules and regulations for the
Plan's administration; and (iv) make all other determinations necessary
or advisable for the administration of the Plan.
Any action which the Board is authorized to take may be taken
without a meeting if all the members of the Board sign a written
document authorizing such action to be taken, unless different
provision is made by the By-Laws of the Company or by resolution of the
Board.
The Board may designate selected Board members or certain employees
of the Company to assist the Board in the administration of the Plan
and may grant authority to such persons to execute documents, including
Options, on behalf of the Board; subject in each such case to the
requirements of Rule 16b-3 promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended,
and any successor rule ("Rule 16b-3").
No member of the Board or employee of the Company assisting the
Board pursuant to the preceding paragraph shall be liable for any
action taken or determination made in good faith.
3. STOCK SUBJECT TO PLAN
The stock to be offered under the Plan shall be authorized but
unissued shares of Common Stock, shares of Common Stock previously
issued and thereafter acquired by the Company, or any combination
thereof. An aggregate of 105,000 shares of Common Stock are reserved
for the grant under the Plan of Options and may be subject to Options.
The number of shares which may be granted under the Plan shall be
adjusted to reflect any change in the capitalization of the Company as
contemplated by Section 9 of the Plan and occurring after the adoption
of the Plan. The Board will maintain records showing the cumulative
total of all shares subject to Options outstanding under the Plan.
4. OPTIONS FOR DIRECTORS WHO ARE NOT EMPLOYEES
The grant of Options under this Plan shall be limited to those
directors of the Company who, on the date of grant, are not employees
of the Company (each an "Eligible Director").
On each Grant Date (as hereinafter defined), each Eligible Director
shall automatically receive from the Company an option for 1,500 shares
of Common Stock, with an exercise price per share equal to the average
of the high and low sales price per share of the Common Stock on such
Grant Date (as reported on NASDAQ). For purposes of this Plan, the
Grant Date shall be March 31 of each calendar year commencing with the
1996 calendar year (or, if March 31 is not a business day, the
immediately preceding business day).
Each Option shall be immediately exercisable commencing on the date
of its grant and at any time and from time to time thereafter (subject
to Section 6 hereof) until and including the date which is the business
day immediately preceding the tenth anniversary of the Grant Date.
Notice of each Option granted on a Grant Date shall be given to each
Eligible Director within a reasonable time after the Grant Date. For
purposes of this Plan, "business day" shall mean each day other than
Saturday, Sunday and any day on which commercial banks are authorized
or required by law to close in New York City.
This Section 4, Section 3 hereof, Section 6 hereof and any other
provision of this Plan which is subject to paragraph (c)(2)(ii)(B) of
Rule 16b-3 (or any successor provision), shall not be amended more
frequently than once every six months, other than to comport with
changes in the Internal Revenue Code (the "Code"), the Employee
Retirement Income Security Act, or the rules thereunder.
5. NON-TRANSFERABILITY
An Option granted to a participant under this Plan shall not be
transferable by him or her except: (i) by will; (ii) by the laws of
descent and distribution; or (iii) pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as
amended, or Title I of the Employee Retirement Income Security Act, or
the rules thereunder. An Option is exercisable during the grantee's
lifetime only by the grantee.
6. EXERCISABILITY OF OPTIONS
Subject to the provisions of this Plan, an Option granted under
this Plan shall be exercisable in accordance with the provisions of
Section 4 hereof.
For a period of six months commencing on the date of grant of an
Option hereunder to a participant, such participant may not sell any
share(s) of Common Stock acquired upon exercise of such Option.
Any Option granted under this Plan shall terminate in full prior to
the expiration of its term on the date which is one year after the date
the optionee ceases to be a director of the Company for any reason
whatsoever. If the optionee shall die while a director of the Company,
the director's legatee(s) under his or her last will or the director's
personal representative or representatives may exercise all or part of
the previously unexercised portion of such Option at any time within
one year after the director's death to the extent the optionee could
have exercised the Option immediately prior to his or her death.
Notwithstanding any other provision of this Plan, in no event may
an Option be exercised after the expiration of its fixed term.
7. METHOD OF EXERCISE
Each Option (or portion thereof) granted under the Plan shall be
deemed exercised when the holder (a) shall indicate the decision to do
so in writing delivered to the Company and (b) shall at the same time
tender to the Company payment in full in cash of the exercise price for
the shares for which the Option is exercised.
No person, estate or other entity shall have any of the rights of a
shareholder with reference to shares subject to an Option until a
certificate for the shares has been issued.
An Option granted under this Plan may be exercised for any lesser
number of shares than the full amount for which it could be exercised.
Such a partial exercise of an Option shall not affect the right to
exercise the Option for the remaining shares subject to the Option.
8. TERMINATION OF OPTIONS
An Option granted under this Plan shall be considered terminated in
whole or part, to the extent that, in accordance with the provisions of
this Plan and such Option, it can no longer be exercised for any shares
originally subject to the Option. The shares subject to any Option or
portion thereof, which terminates, shall no longer be charged against
the limitation provided in Section 3 of this Plan and may again become
shares available for the purposes, and subject to the same limitation,
of this Plan.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any recapitalization, reorganization, merger, stock
dividend, stock split, stock consolidation or similar transaction
affecting the Common Stock, the number and kind of shares available for
purposes of this Plan, the number and kind of shares to be covered by
subsequent grants and the number and kind of shares under option in
outstanding option agreements pursuant to this Plan and the exercise
price under such agreements shall be proportionately and appropriately
adjusted so as to (a) preserve, but not increase, the benefits of this
Plan to the Company and the Plan's participants and the benefits and
value to the holders of such Options and (b) provide for treatment
equivalent to that provided for the holders of outstanding shares of
the Common Stock.
Adjustments under this Section shall be made by the Board pursuant
to its administrative authority under Section 2 of this Plan.
10. COMPLIANCE WITH SECURITIES LAWS AND OTHER REQUIREMENTS
No certificate(s) for shares shall be executed and delivered upon
exercise of an Option until the Company shall have taken such action,
if any, as is then required to comply with the provisions of the
Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the South Carolina Uniform Securities Act, as
amended, any other applicable state securities law(s) and the
requirements of any exchange on which the Common Stock may, at the
time, be listed.
In the case of the exercise of an Option by a person or estate
acquiring the right to exercise the Option by bequest or inheritance,
the Board may require reasonable evidence as to the ownership of the
Option and may require such consents and releases of taxing authorities
as it may reasonably deem advisable.
11. NO RIGHT TO CONTINUE AS DIRECTOR
Neither the adoption of the Plan nor its operation, nor any
document describing or referring to the Plan, or any part thereof,
shall confer upon any director participant under the Plan any right to
continue as a director of the Company, or shall in any way affect the
right and power of the Company to terminate the position with the
Company of any participant under this Plan at any time with or without
assigning a reason therefor to the same extent as the Company might
have done if this Plan had not been adopted.
12. AMENDMENT AND TERMINATION
Subject to Section 4 hereof and this Section 12, the Board may at
any time suspend, amend or terminate this Plan. Subject to the
provisions of this Plan, the Board may make such corrections to the
terms and conditions of a holder's Option as shall be reasonably
required to conform the Option to the terms of this Plan. No Option
may be granted during any suspension or after the termination of this
Plan. Not withstanding the foregoing provisions of this Section, no
amendment, suspension or termination shall, without the consent of the
holder of an Option, alter or impair any rights or obligations under
any Option theretofore granted under the Plan.
In addition to Board approval of an amendment, if the amendment
would: (i) materially increase the benefits accruing to participants;
(ii) increase the number of securities issuable under this Plan (other
than an increase pursuant to Section 9 hereof); (iii) change the class
or classes of individuals eligible to receive Options; or (iv)
otherwise materially modify the requirements for eligibility, then such
amendment must be approved by the holders of a majority of the
Company's outstanding capital stock present or represented by proxy and
entitled to vote at a meeting duly held of the stockholders of the
Company.
13. USE OF PROCEEDS
The proceeds received by the Company from the sale of shares
pursuant to Options granted under the Plan shall be used for general
corporate purposes as determined by the Board.
14. INDEMNIFICATION OF BOARD
In addition to such other rights of indemnification as they may
have as members of the Board, the members of the Board shall, to the
fullest extent permitted by law, be indemnified by the Company against
the reasonable expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any action, suit
or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure
to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof
(provided the settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding
that such Board member is liable for gross negligence or misconduct in
the performance of his or her duties; provided that within 60 days
after institution of any such action, suit or proceeding the Board
member shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
15. EFFECTIVE DATE OF THE PLAN
This Plan was adopted by the Board of the Company as of February 9,
1995 and shall be effective as of April 19, 1995, subject to its
approval by the holders of a majority of the Company's outstanding
capital stock present or represented by proxy and entitled to vote at
the 1995 annual meeting of shareholders of the Company.
16. DURATION OF THE PLAN
Unless previously terminated by the Board, this Plan shall
terminate at the close of business on April 18, 2005 and no Option
shall be granted under it thereafter, but such termination shall not
affect any Option theretofore granted under this Plan.
[Date]
Dear :
Pursuant to the Director Stock Option Plan (the "Plan") of One
Price Clothing Stores, Inc. (the "Company"), you, as a non-employee
director of the Company, were granted on [date], an option to purchase
shares of the common stock of the Company upon the following terms
and conditions:
(1) The exercise price shall be $ per share equal to the
average of the high and low sales price per share of the
Company's common stock on the date of grant; and
(2) This Option will become exercisable, and once exercisable
may be exercised, in accordance with and subject to the
terms and conditions of the Plan, which is incorporated
herein by reference. This Option is granted subject to the
Plan and shall be construed in all respects in accordance
with the Plan.
This Option is not transferable except pursuant to the terms and
conditions of the Plan.
Very truly yours,
ONE PRICE CLOTHING STORES, INC.
By:_____________________________
Title:
I hereby accept the within stock Option and acknowledge receipt of a
copy of the Plan.
____________________________
Optionee
Date:_______________________
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 10(q)--Credit Agreement dated March 16, 1995 by and between the
Registrant and NationsBank (as agent) for an unsecured $25,000,000 line of
credit facility and a $15,000,000 letter of credit facility.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Credit Agreement"), dated as of March
17, 1995 is by and among ONE PRICE CLOTHING STORES, INC., the banks listed
on the signature pages hereof, and NATIONSBANK, N.A. (CAROLINAS), as agent
for such banks.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. The following terms, as used herein,
have the following meanings:
"Acquisition" means any purchase or acquisition (including any such
transaction effected by way of merger, amalgamation or consolidation) by the
Borrower or any of its Subsidiaries subsequent to the date hereof of any
business or part of a business in any form including the acquisition of
assets or stock of any other Person.
"Adjusted Eurodollar Rate" means, for any Interest Period, a per
annum interest rate equal to the per annum rate obtained by dividing (a) the
rate of interest determined by the Agent to be the average (rounded upward
to the nearest whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the per annum rate at which Dollar deposits are
offered to the Eurodollar Reference Bank in the interbank eurocurrency
market at 11:00 A.M. London time two Eurodollar Business Days before the
first day of such Interest Period in an amount substantially equal to the
Eurodollar Loan of the Eurodollar Reference Bank to which such Interest
Period is to apply and for a period of time equal to such Interest Period by
(b) a percentage equal to 100% minus the Adjusted Eurodollar Rate Reserve
Percentage for such Interest Period.
"Adjusted Eurodollar Rate Reserve Percentage" means, for any
Interest Period, the percentage applicable two Eurodollar Business Days
before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor or any other applicable authority) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurodollar Liabilities (or with respect to
any other category of liabilities which includes deposits by reference to
which the interest rate on Adjusted Eurodollar Rate Advances is determined).
"Affiliate" means, with respect to any designated Person, (i) any
officers or directors of such Person or (ii) any other Person (other than a
Subsidiary of such designated Person) that has a relationship with the
designated Person whereby either of such Persons directly or indirectly
controls or is controlled by or is under common control with the other of
such persons. The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct or cause the
direction of the management or policies of any Person, whether through
ownership of voting securities, by contract or otherwise.
"Agent" means NationsBank, N.A. (Carolinas), in its capacity as
agent for the Banks hereunder, and its successors in such capacity.
"Asset Sale" means any sale, lease or other disposition (including
any such transaction effected by way of merger, amalgamation or
consolidation) by the Borrower or any of its Subsidiaries subsequent to the
date hereof of any asset (including stock), including without limitation any
Sale-Leaseback Transaction, whether or not involving a capital lease, but
excluding (a) any sale, lease or other disposition of inventory in the
ordinary course of business (including bulk sales of excess and obsolete
inventory), (b) any sale, lease or other disposition of raw materials,
supplies or other non-fixed assets in the ordinary course of business, (c)
any sale, lease or other disposition of surplus, obsolete or worn out
fixtures, machinery or equipment in the ordinary course of business, (d) any
sale, lease or other disposition to the Borrower or any Wholly-Owned
Consolidated Subsidiary of the Borrower, (e) any sale or other disposition
in the ordinary course of business of readily marketable securities and (f)
any disposition of cash not prohibited hereunder.
"Assignee" shall have the meaning given to such term in Section
9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"Base Rate" means, for any day, the per annum interest rate equal
to the greater of the (a) Prime Rate or the (b) Federal Funds Rate plus
1/2%.
"Base Rate Borrowing" means a Borrowing consisting of Base Rate
Loans.
"Base Rate Loan" means a Loan hereunder which bears interest at the
Base Rate plus the applicable margin pursuant to the applicable Notice of
Borrowing or Notice of Interest Rate Election or the provisions of Article
VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Borrower" means One Price Clothing Stores, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
"Borrowing" means a borrowing under this Credit Agreement
consisting of Loans made to the Borrower by the Banks on a pro rata basis
determined with reference to each Bank's Commitment Percentage pursuant to
Section 2.01.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close.
"Capitalized Operating Lease Obligations" means the present value
of future minimum rental commitments for non-cancellable leases for opened
stores (to be calculated by utilizing the "S&P Method", discounting
operating lease obligations at 10%) excluding charges for executory
expenses.
"Closing Date" means the date on which the conditions set forth in
Article III to the making of the initial Loan hereunder shall have been
fulfilled and on which such initial Loan shall have been made.
"Commitment" means, with respect to each Bank, the Revolving Loan
Commitment and the Letter of Credit Commitment of such Bank.
"Commitment Percentage" means, with respect to each Bank, the
percentage that such Bank's Commitment constitutes of the aggregate amount
of the Commitments.
"Consolidated Capitalization" means, at any time, the sum of (a)
stockholders' equity of the Borrower and its Consolidated Subsidiaries at
such time, determined in accordance with generally accepted accounting
principles applied on a consistent basis, with no upward adjustments due to
a revaluation of assets plus (b) Consolidated Funded Indebtedness plus (c)
Consolidated Contingent Liabilities (if positive) plus (d) Capitalized
Operating Lease Obligations of the Borrower and its Subsidiaries.
"Consolidated Contingent Liabilities" means all obligations,
liabilities and indebtedness of the Borrower and its Subsidiaries of the
types described in subsections (f) and (g) of the definition of Debt less an
amount equal to $25,000,000.00 less the outstanding principal balance of the
Revolving Loans.
"Consolidated Current Assets" means, at any time, all items which,
in accordance with generally accepted accounting principles, would be
classified as current assets on a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries prepared as of such time.
"Consolidated Current Liabilities" means, at any time, all items
which, in accordance with generally accepted accounting principles, would be
classified as current liabilities on a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries prepared as of such time.
"Consolidated Current Ratio" means, at any time, the ratio of
Consolidated Current Assets to Consolidated Current Liabilities, in each
case as of such time prepared as of such time.
"Consolidated EBITDA" means, for any period, the sum of (i) the
consolidated net income of the Borrower and its Consolidated Subsidiaries
for such period plus (ii) to the extent deducted in determining such
consolidated net income, the sum of (A) Consolidated Interest Expense and
(B) consolidated depreciation, amortization and other similar non-cash
charges of the Borrower and its Consolidated Subsidiaries for such period
plus (iii) the amount of any consolidated income taxes (or minus the amount
of any consolidated tax benefits) of the Borrower and its Consolidated
Subsidiaries for such period.
"Consolidated Fixed Charge Coverage Ratio" means as of the last day
of any fiscal quarter of the Borrower, the ratio of (x) Consolidated EBITDA
plus rent expense (each computed for the four fiscal quarterly periods then
ending) to (y) the sum of Consolidated Interest Expense plus rent expense
plus New Store Capital Expenditures (each computed for the four fiscal
quarterly periods then ending).
"Consolidated Funded Indebtedness" means, without duplication, all
obligations, liabilities and indebtedness of the Borrower and its
Subsidiaries of the types described in subsections (a)-(f) of the definition
of Debt.
"Consolidated Interest Expense" means, for any period, the cash
interest expense of the Borrower and its Consolidated Subsidiaries
(including facility fees but excluding letter of credit fees) determined on
a consolidated basis for such period.
"Consolidated Leverage Ratio" means the ratio of (x) the sum of (1)
Consolidated Funded Indebtedness plus (2) Consolidated Contingent
Liabilities (if positive) plus (3) all Capitalized Operating Lease
Obligations of the Borrower and its Subsidiaries to (y) Consolidated
Capitalization.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Tangible Net Worth" means, at any time, consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such time in accordance with generally accepted accounting
principles applied on a consistent basis, with no upward adjustments due to
a revaluation of assets, minus all Intangible Assets and minus all leasehold
improvements.
"Constitutional Documents" in relation to any corporate Person
means the Certificate of Incorporation and By-Laws or other constitutional
documents of such corporate Person.
"Credit Agreement" shall have the meaning given to such term in the
introductory paragraph hereof.
"Debt" of any Person means at any date, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable and accrued
expenses arising in the ordinary course of business, (d) all capitalized
lease indebtedness, (e) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person (to the
extent of the lesser of the amount of such Debt and the book value of any
assets subject to such Lien), (f) the maximum amount of all letters of
credit issued or acceptance facilities established for the account of such
Person and, without duplication, all drafts drawn thereunder (other than
letters of credit and acceptance facilities supporting other Debt of such
Person), and (g) all Debt of others Guaranteed by such Person (to the extent
of the lesser of the amount of such Debt Guaranteed or the amount of such
Guarantee).
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Dollars" and "$" means lawful money of the United States of
America.
"Dollar Amount" means, in relation to any Debt denominated in
Dollars, the amount of such Debt.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, grants, licenses, agreements or other governmental
restrictions including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Clean Air Act and the Clean Water Act relating
to the environment or to emissions, discharges or releases of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, surface water, ground water or land) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial,
toxic or hazardous substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
"Eurodollar Borrowing" means any Borrowing consisting of Eurodollar
Loans.
"Eurodollar Business Day" means any Business Day on which the Agent
and the Eurodollar Reference Bank are open for international business
(including dealings in Dollar deposits) in London.
"Eurodollar Loan" means a Loan which bears interest at the Adjusted
Eurodollar Rate plus the applicable margin pursuant to the applicable Notice
of Borrowing or Notice of Interest Rate Election.
"Eurodollar Reference Bank" means NationsBank.
"Event of Acceleration" means any of the events or conditions set
forth in Sections 6.01(h) or (i) with respect to the Borrower.
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1% per annum, if such average is
not such a multiple) equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers on such date, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (i) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii)
if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such date shall be the average rate quoted to
NationsBank on such date on such transactions as determined by the Agent.
"Financing Documents" means the Credit Agreement, the Notes and the
Subsidiary Guarantee, in each case as amended and in effect from time to
time.
"Foreign Government" means any government other than that of the
United States of America or any political subdivision thereof.
"Foreign Person" means (a) any Foreign Government, (b) any agency
of a Foreign Government, (c) any form of business enterprise organized under
the laws of any country other than the United States of America or its
possessions or any political subdivision thereof or (d) any form of business
enterprise owned or controlled by any of the persons described in clauses
(a), (b) or (c) of this definition.
"Government" means the federal government of the United States of
America or any agency thereof.
"Group" or "Group of Loans" means at any time a group of Loans
consisting of (a) all Base Rate Loans at such time or (b) all Eurodollar
Loans having the same Interest Period at such time; provided that, if a Loan
of any particular Bank is converted to or made as a Base Rate Loan pursuant
to Section 8.02 or 8.04, such Loan shall be included in the same Group or
Groups of Loans from time to time as if it had not been so converted or made
as a Base Rate Loan.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term Guarantee
shall not include endorsement for collection or deposit in the ordinary
course of business.
"Intangible Assets" shall mean, as of the date of any determination
thereof, the total amount of all assets of the Borrower and its Subsidiaries
consisting of goodwill, patents, tradenames, trademarks, copyrights,
franchises, experimental expense, organization expense, unamortized debt
discount and expense, deferred assets (other than prepaid insurance and
deferred or prepaid taxes), the excess of cost of shares acquired over book
value of related assets and such other assets as are properly classified as
"intangible assets" in accordance with generally accepted accounting
principles.
"Interest Period" means, with respect to each Eurodollar Loan, a
period commencing on the date of Borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending, one, two, three or six months thereafter,
as the Borrower may elect in the applicable Notice; provided that:
(i) any Interest Period which would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to the
next succeeding Eurodollar Business Day unless such Eurodollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business
Day;
(ii) any Interest Period which begins on the last
Eurodollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Eurodollar
Business Day of a calendar month; and
(iii) any Interest Period with respect to a Revolving
Loan that would otherwise extend beyond the Termination Date shall
end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, time deposit, warrant, option
or otherwise.
"Issuing Bank" means NationsBank, N.A. (Carolinas).
"Letter of Credit Application" shall have the meaning provided in
Section 2.14.
"Letter of Credit Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank under the heading "Letter of
Credit Commitment" on the signature pages hereof.
"Letter of Credit Obligations" means, at any time, the sum of (i)
the maximum amount which is available to be drawn under Letters of Credit
then outstanding, assuming compliance with all requirements for drawings
referred to in such Letters of Credit plus (ii) the aggregate amount of all
drawings under Letters of Credit honored by the Issuing Bank and not
theretofore reimbursed.
"Letters of Credit" shall have the meaning provided in Section
2.14.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Credit Agreement, the Borrower or any
Subsidiary of the Borrower shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sales agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Eurodollar Loan or a Base Rate Loan and "Loans"
means Eurodollar Loans or Base Rate Loans or any combination of the
foregoing.
"Majority Banks" means NationsBank until NationsBank makes an
assignment pursuant to Section 9.06(c) hereof, and NationsBank and one other
Bank thereafter.
"Margin Stock" has the meaning assigned to such term in Regulation
U or Regulation G (to the extent applicable).
"Material Plan" means a Plan or Plans having aggregate Unfunded
Liabilities in excess of $1,000,000.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"NationsBank" means NationsBank, N.A. (Carolinas), a national
banking association.
"New Store Capital Expenditures" means Consolidated Expenditures
and capitalized expenses associated with new stores and the expansion,
relocation and remodeling of existing stores. "New Store Capital
Expenditures" shall include, without limitation, construction expenditures,
capitalized development costs, furniture, fixtures, equipment and leasehold
improvements.
"Notes" means the promissory notes of the Borrower evidencing the
obligations of the Borrower to repay the Loans.
"Notice of Borrowing" has the meaning given to such term in Section
2.03(a).
"Notice of Interest Rate Election" has the meaning given to such
term in Section 2.09(a).
"Participant" means a bank or other institution which assumes, in
accordance with Section 9.06(b), a participating interest with respect to
the Loans, the Notes and this Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" means (a) cash and demand deposits, (b)
investments in direct obligations of the Government of the United States of
America or any agency or instrumentality thereof or any obligations
guaranteed by the full faith and credit of the Government of the United
States of America, in each case maturing within 360 days after the date of
investment therein, (c) commercial paper in an aggregate amount of up to
$5,000,000 per issuer outstanding at any time, issued by any corporation
organized in any State of the United States of America, rated at least A-1
(or the then equivalent grade) by Standard & Poor's Corporation ("S&P") or
P-1 (or the then equivalent grade) by Moody's Investor Services, Inc.
("Moody's"), or the successor of either of them, (d) Dollar denominated
certificates of deposit of, eurodollar certificates of deposit of, bankers
acceptances of, or time deposits with, (x) any Bank or (y) any commercial
bank the short-term securities of which are rated at least A-1 (or the then
existing equivalent) by S&P or at least P-1 (or the then existing
equivalent) by Moody's or which has a bank rating of at least B/C (or the
then existing equivalent) by Thomson Bank Watch, in each case maturing
within 360 days after the date of purchase, acceptance or deposit and (e)
taxable or tax-free money market funds rated at least A (or the then
equivalent grade) by S&P or Moody's, or the successor of either of them, (f)
taxable or tax-exempt money market preferred stock funds rated at least A
(or the then equivalent grade) by S&P or Moody's, or the successor or
either of them, (g) tax-exempt variable rate demand notes backed by
municipal bonds (low floaters) supported by a letter of credit from a
commercial bank rated at least AA (or the then equivalent grade) by S&P or
Moody's, or the successor of either of them, (h) asset-backed securities
rated at least A (or the then equivalent grade) by S&P or Moody's, or the
successor or either of them, maturing within 90 days after the date of
investment therein, with a maximum investment of $5,000,000, (i) asset-
backed certificates of participation with a long-term rating of at least A
(or the then equivalent grade) by S&P or Moody's or a short term rating of
no less than A-1 by S&P or P-1 by Moody's, or the successor of either of
them, with an interest accrual period of 90 days or less whose certificate
is deemed to be automatically tendered at par at the end of each interest
accrual period and (j) municipal notes maturing in six months or less and
rated at least SP-2 (or the then equivalent grade) by S&P, or its successor,
or at least Mig 2 (or the then equivalent grade) by Moody's, or its
successor.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan as
defined in Subsection 3(2) of ERISA (other than a Multiemployer Plan) which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained,
or contributed to, by any member of the ERISA Group for employees of any
member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at
such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
NationsBank in Charlotte, North Carolina from time to time as its "prime
rate", which shall not necessarily be the best or lowest rate of interest
offered by NationsBank.
"Quarterly Period" means the periods ending on April 1, 1995, July
1, 1995, September 30, 1995, December 30, 1995 and March 30, 1996.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Responsible Officers" means the chairman, president, chief
financial officer and any treasurer of the Borrower; and "Responsible
Officer" means any one of such Responsible Officers.
"Revolving Loan Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank under the heading "Revolving
Loan Commitment" on the signature pages hereof, as such amount may be
reduced from time to time pursuant to Section 2.06.
"Revolving Loan" means a Eurodollar Loan or a Base Rate Loan made
under Section 2.01.
"Revolving Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the obligations of
the Borrower to repay the Revolving Loans.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Borrower or any of its Subsidiaries of any
property that has been or is to be sold, assigned, transferred or otherwise
disposed of by the Borrower or any of its Subsidiaries to such Person with
the intention of entering into such lease.
"Solvent" means, with respect to any person on a particular date,
that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value
of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Person's property
would constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is engaged.
In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at such time directly or indirectly
owned by such Person.
"Subsidiary Guarantee" means the Subsidiary Guarantee to be
executed and delivered by the Subsidiary Guarantor, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiary Guarantor" means One Price Clothing of Puerto Rico,
Inc. and any other Subsidiaries which execute a guarantee pursuant to
Section 5.10 hereof.
"Termination Date" means May 31, 1996.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under
such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability of a member
of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any
Person, any Consolidated Subsidiary of such Person all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by such
Person.
1.02 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements and
certificates required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles in effect as of the
Closing Date consistently applied; provided that, if the Borrower notifies
the Agent that the Borrower wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Majority Banks wish to amend Article V for such purpose),
then the Borrower's compliance with such covenant shall be determined on the
basis of generally accepted accounting principals in effect immediately
before the relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Majority Banks.
1.03 Other Definitional Provisions. References to "Articles",
"Sections", "subsections", "Schedules" and "Exhibits" shall be to Articles,
Sections, subsections, Schedules and Exhibits, respectively, of this Credit
Agreement unless otherwise specifically provided. Any of the terms defined
in Section 1.01 or referred to in Section 1.02 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference. In this Credit Agreement, the word "including" means "including
without limitation" and the word "includes" means "includes without
limitation." Terms defined in this Credit Agreement and used, but not
otherwise defined in the Exhibits and Schedules, shall have the meaning
ascribed to such terms in this Credit Agreement.
ARTICLE II
THE LOANS AND THE LETTERS OF CREDIT
SECTION 2.01 Revolving Loans. Each Bank severally agrees, on
the terms and conditions set forth in this Credit Agreement (including the
conditions set forth in Section 3.02 hereof) and in reliance on the
representations and warranties set forth herein, to make Revolving Loans to
the Borrower pursuant to this Section 2.01 from time to time and including
the Closing Date to but not including the Termination Date in amounts such
that the aggregate principal amount of such Revolving Loans by such Bank at
any one time outstanding shall not exceed the Revolving Loan Commitment of
such Bank; provided, however, no Bank shall be obligated to make any
Revolving Loan if immediately after the making of such Revolving Loan the
outstanding principal balance of all Revolving Loans of all of the Banks
would exceed the sum of the Revolving Loan Commitments. Within the
foregoing limits, the Borrower may borrow under this Section 2.01, prepay
Revolving Loans and reborrow pursuant to this Section 2.01. Each Borrowing
under Section 2.01 which consists of Eurodollar Loans shall be in an
aggregate principal amount of $100,000.00 or any larger multiple of
$100,000.00 and shall be made from the several Banks ratably in proportion
to their respective Revolving Loan Commitments. Each Borrowing under
Section 2.01 which consists of Base Rate Loans shall be in an aggregate
principal amount of $1.00 and shall be made from the several Banks ratably
in proportion to their respective Revolving Loan Commitments.
SECTION 2.02 Method of Borrowing.
(a) The Borrower shall give the Agent notice (a
"Notice of Borrowing") not later than (i) 12:00 Noon (Charlotte,
North Carolina time) on the date of each Base Rate Borrowing and
(ii) 11:00 A.M. (Charlotte, North Carolina time) on the third
Eurodollar Business Day before each Eurodollar Borrowing,
specifying:
(i) the amount of the proposed Borrowing;
(ii) the date of such
Borrowing, which shall be a Business Day in the
case of a Base Rate Borrowing or a Eurodollar
Business Day in the case of a Eurodollar
Borrowing;
(iii) whether the Loans
comprising such Borrowing are to be Base Rate
Loans or Eurodollar Loans, or a combination
thereof; and
(iv) in the case of a
Eurodollar Borrowing, the duration of the initial
Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Borrowing and such Notice of Borrowing
shall not thereafter be revocable by the Borrower.
(c) Not later than (x) 2:00 P.M., (Charlotte, North
Carolina time) on the date of each Base Rate Borrowing, and (y)
11:00 A.M. (Charlotte, North Carolina time) on the date of each
Eurodollar Borrowing, each Bank shall make available its ratable
share of such Borrowing, in federal or other funds immediately
available in Charlotte, North Carolina, to the Agent at its address
specified in or pursuant to Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III
has not been satisfied, the Agent will make the funds so received
from the Banks available to the Borrower at an account of the
Borrower with the Agent in Charlotte, North Carolina promptly after
being made available to the Agent at the Agent's aforesaid address
in immediately available funds.
SECTION 2.03 Notes.
(a) The Revolving Loans of each Bank shall be
evidenced by one Revolving Note payable to the order of such Bank
for the account of its applicable lending office in an amount equal
to the aggregate unpaid principal amount of such Bank's Revolving
Loans.
(b) Upon receipt of each Bank's Notes pursuant to
Section 3.01(b), the Agent shall forward such Notes to such Bank
via overnight courier service. Each Bank shall record on its
Revolving Note the date, amount and maturity of each Revolving Loan
made by it and the date and amount of each payment of principal
made by the Borrower with respect thereto, and prior to any
transfer of its Revolving Note shall endorse on the schedule
forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Revolving Loan then
outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under such Revolving Note. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its
Revolving Note and to attach to and make a part of its Revolving
Note a continuation of any such schedule as and when required.
SECTION 2.04 Scheduled Termination of Revolving Loan Commitments
and Maturity of Revolving Loans. The Revolving Loan Commitments shall
terminate on the Termination Date and any Revolving Loans then outstanding
(together with accrued interest thereon) and all accrued fees and other
amounts payable hereunder shall be due and payable in full on such date.
Each repayment pursuant to this Section 2.04(a) shall be made together with
accrued interest to the date of payment, and shall be applied ratably to
payment of the Revolving Loans of the several Banks in proportion to the
aggregate outstanding principal amounts of their Revolving Loans.
SECTION 2.05 Interest Rates.
(a) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate equal to the Base
Rate for such day. Such interest shall be payable quarterly in
arrears on the last day of each Quarterly Period. Any overdue
principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the sum of 2.000% plus the rate otherwise applicable to
Base Rate Loans for such day.
(b) Each Eurodollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate equal to the Adjusted Eurodollar Rate
for such Interest Period plus 1 1/2%. Such interest shall be
payable for each interest period on the last day thereof and, if
such Interest Period is longer than 3 months, at intervals of 3
months after the first day thereof. Any overdue principal of or
interest on any Eurodollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the
sum of 2.000% plus (i) for each day during any Interest Period
applicable to such Eurodollar Loan, the rate applicable to such
Eurodollar Loan for such day, and (ii) for each day after the end
of such Interest Period, the sum of 2.000% plus the rate applicable
to Base Rate Loans for such day.
(c) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt
notice to the Borrower and the Banks by facsimile, telex or cable
of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
SECTION 2.06 Optional Termination or Reduction of Revolving Loan
Commitments. The Borrower may at any time, upon at least three Business
Days' written notice to the Agent, terminate the Revolving Loan Commitments
in whole or reduce the Revolving Loan Commitments in part up to the amount
by which the Revolving Loan Commitments exceed the aggregate principal
amount of the Revolving Loans and the Letter of Credit Obligations;
provided, however, any such partial reduction shall be in a minimum amount
of $1,000,000.00 (or such lesser aggregate amount of the Revolving Loan
Commitments as may then be in effect) or any larger multiple of $500,000.00;
provided further, any such reduction shall be made ratably among the Banks.
SECTION 2.07 Prepayments.
(i) The Borrower may, upon notice delivered to
the Agent not later than 2:00 P.M. (Charlotte, North Carolina time)
on the date of such prepayment, prepay a Group of Base Rate Loans
in whole at any time, or from time to time in part in amounts
aggregating $100,000.00 or any larger multiple of $25,000.00 by
paying (in Dollars) the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Base
Rate Loans of the several Banks included in such Group.
(ii) The Borrower may, upon at least three
Eurodollar Business Days' notice to the Agent, prepay a Group of
Eurodollar Loans in whole at any time, or from time to time in part
in amounts aggregating $100,000.00 or any larger multiple of
$100,000.00, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment; provided
that the Borrower shall reimburse each Bank for any loss or expense
incurred by it as a result of any such prepayment in accordance
with Section 2.10. Each such optional prepayment shall be applied
to prepay ratably the Loans of the several Banks included in such
Group.
(iii) The Borrower shall reduce the outstanding
principal balance of the Revolving Loans to zero for at least
thirty consecutive days during the period commencing on the date of
the making of the initial Loan hereunder through the Termination
Date.
(iv) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify each Bank
of the contents thereof and of such Bank's ratable share of such
prepayment and such notice shall not thereafter be revocable by the
Borrower.
SECTION 2.08 Method of Electing Interest Rates.
(a) The Loans included in each Borrowing shall bear
interest initially at the type of rate specified by the Borrower in
the applicable Notice of Borrowing. Thereafter the Borrower may
from time to time elect to change or continue the type of interest
rate borne by each Group of Loans (subject in each case to the
provisions of Article VIII), as follows:
(i) if such Loans are Base Rate
Loans, the Borrower may elect to convert such Loans to
Eurodollar Loans as of any Eurodollar Business Day; and
(ii) if such Loans are Eurodollar
Loans, the Borrower may elect to convert such Loans to Base
Rate Loans or elect to continue such Loans as Eurodollar
Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest
Period applicable to such Loans;
provided, that the Borrower may not elect to continue any
Eurodollar Loan or convert any Loan into a Eurodollar Loan after
the occurrence and during the continuation of a Default. Each such
election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent no later than 11:00 A.M.
(Charlotte, North Carolina time) (x) if the relevant Loans are to
be converted to Base Rate Loans, the second Business Day before
such conversion or continuation is to be effective and (y) if the
relevant Loans are to be converted to Eurodollar Loans or continued
as Eurodollar Loans for an additional Interest Period, the third
Eurodollar Business Day before such conversion or continuation is
to be effective. A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided that (i) such
portion is allocated ratably among the Loans comprising such Group
and (ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each at least
$100,000 and no more than one of such portions is other than a
multiple of $25,000.
(b) Each Notice of Interest Rate Election shall
specify:
(i) the Group of Loans (or portion
thereof) to which such notice applies;
(ii) the date on which the conversion
or continuation selected in such notice is to be effective,
which shall comply with subsection (a) above,
(iii) if the Loans comprising such
Group are to be converted, the new type of Loans and, if
such new Loans are Eurodollar Loans, the duration of the
initial Interest Period applicable thereto, and
(iv) if such Loans are to be continued
as Eurodollar Loans for an additional Interest Period, the
duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period. No more
than 5 Groups of Loans shall be outstanding at any one time.
(c) Upon receipt of a Notice of Interest Rate Election
from the Borrower pursuant to Section 2.08(a) above, the Agent
shall promptly notify each Bank of the contents thereof and such
notice shall not thereafter be revocable by the Borrower. If the
Borrower fails to deliver a timely Notice of Interest Rate Election
to the Agent for any Group of Eurodollar Loans, such Loans shall be
converted into Base Rate Loans on the last day of the then current
Interest Period applicable thereto.
SECTION 2.09 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal
of, and interest on, the Loans and of fees hereunder, not later
than 3:00 p.m. (Charlotte, North Carolina time) on the date when
due, in federal or other funds immediately available in Charlotte,
North Carolina, to the Agent at its address referred to in Section
9.01 and any of such payments received after 3:00 p.m. on the
required due date shall be deemed to have been paid by the Borrower
on the next succeeding Business Day. Any such payment with respect
to a Loan shall be made in Dollars. The Agent will promptly
distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Base Rate Loans or of
fees shall be due on a day which is not a Business Day, the date
for payment thereof shall be extended to the next succeeding
Business Day. Whenever any payment of principal of, or interest
on, the Eurodollar Loans shall be due on a day which is not a
Eurodollar Business Day, the date for payment thereof shall be
extended to the next succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar month, in which
case the date for payment thereof shall be the next preceding
Eurodollar Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payments
in full to the Agent, on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such
payments, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Agent,
at the Federal Funds Rate.
SECTION 2.10 Funding Losses. If the Borrower makes any payments
of principal with respect to any Eurodollar Loan or any Eurodollar Loan is
converted to another type of Loan (pursuant to Article II, VI, VIII, or
otherwise) on any day other than the last day of an Interest Period
applicable thereto, or if the Borrower fails to borrow or prepay any
Eurodollar Loans after notice has been given to any Bank in accordance with
the terms hereof, the Borrower shall reimburse each applicable Bank within
ten Business Days after demand for any resulting loss or expense incurred by
it (or by an existing or prospective Participant in the related Loan, to the
extent provided in the relevant participation agreement), including (without
limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties to fund or maintain such Loan or proposed Loan,
but excluding loss of margin for the period after any such payment or
conversion or failure to borrow or prepay, provided that such Bank shall
have delivered to the Borrower (with a copy to the Agent) a certificate
prior to requesting reimbursement setting forth in reasonable detail its
calculation of the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
SECTION 2.11 Computation of Interest. All interest and fees
hereunder shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.12 Withholding Tax Exemption. At least five Business
Days prior to the first date on which interest or fees are payable hereunder
for the account of any Bank, each Bank that is not incorporated under the
laws of the United States of America or a state thereof agrees that it will
deliver to the Borrower and the Agent two duly and properly completed copies
of United States Internal Revenue Service Form 1001 or 4224 (or any
successor form, in either case), certifying in either case that such Bank is
entitled to receive payments under this Credit Agreement and the Notes
without deduction or withholding of any United States federal income taxes.
Each Bank which so delivers a Form 1001 or 4224 (or any successor form, in
either case) further undertakes to deliver to the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case certifying
that such Bank is entitled to receive payments under this Credit Agreement
and the Notes without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises the
Borrower and the Agent that it is not capable of receiving payments without
any deductions or withholding of United States federal income tax, in which
case such Bank shall have appropriate amounts withheld pursuant to
applicable law.
SECTION 2.13 Letters of Credit.
(a) Issuance. Subject to the terms and conditions
hereof and of the letter of credit application executed in
connection with the issuance of each letter of credit (the "Letter
of Credit Application"), the Issuing Bank will from time to time
issue such letters of credit, and extend, renew, modify and replace
such letters of credit (as extended, renewed, modified or replaced
from time to time, the "Letters of Credit"), from the Closing Date
until the Termination Date as the Borrower may request in a form
acceptable to the Issuing Bank; provided, that (A) with regard to
each Bank individually, the Bank's pro rata share of the
outstanding Letter of Credit Obligations shall not exceed such
Bank's Letter of Credit Commitment, (B) with regard to the Banks
collectively, the outstanding principal balance of the Letter of
Credit Obligations shall not exceed the sum of the Letter of Credit
Commitments and (C) immediately after the issuance of or the
extension, renewal, modification or replacement of any Letter of
Credit the Letter of Credit Obligations shall not exceed
$15,000,000.00. No Letter of Credit shall have an original expiry
date of more than 210 days from its original issuance date. If the
expiration date of any Letter of Credit extends beyond the
Termination Date, (A) this Credit Agreement and the other Financing
Documents shall remain in full force and effect until such time as
all Letter of Credit Obligations with respect to such Letter of
Credit are satisfied in full and (B) the Borrower shall pay to the
Agent on the Termination Date an amount equal to the then
outstanding Letter of Credit Obligations with respect to such
Letter of Credit to be held in a cash collateral account as
security for the reimbursement obligations which thereafter may
arise on account of subsequent drawings or payments on any such
Letter of Credit.
(b) Notice. The request for the issuance of a Letter
of Credit shall be submitted to the Issuing Bank at least one
Business Day prior to the requested date of issuance. Upon
issuance of a Letter of Credit, the Issuing Bank shall promptly
notify the Banks of the amount and terms thereof. The Issuing Bank
shall notify the Banks promptly of all payments, reimbursements,
expirations, transfers and other activity with respect to
outstanding Letters of Credit.
(c) Participations. Each Bank, upon issuance of a
Letter of Credit, shall be deemed to have purchased without
recourse a participation from the Issuing Bank in such Letter of
Credit, in each case in an amount equal to its pro rata share of
the amount of such Letter of Credit. Without limiting the scope
and nature of each Bank's participation in any Letter of Credit, to
the extent that the Issuing Bank has not been reimbursed by the
Borrower for an amount drawn under any Letter of Credit in
accordance with subsection (d) below, each Bank shall pay to the
Issuing Bank its pro rata share of such unreimbursed drawing in
same day funds on the day of notification by the Issuing Bank
thereof. The obligation of each Bank to so reimburse the Issuing
Bank shall be absolute and unconditional and shall not be affected
by the occurrence of a Default, an Event of Default or any other
occurrence or event; provided, however, the foregoing shall not
limit any liability of the Issuing Bank to any Bank hereunder on
account of the gross negligence or willful misconduct of the
Issuing Bank. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Bank under any Letter of Credit, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under
any Letter of Credit, the Issuing Bank will promptly notify the
Borrower. Unless the Borrower shall immediately notify the Issuing
Bank of its intent to otherwise reimburse the Issuing Bank, the
Borrower shall be deemed to have requested a Revolving Loan
consisting of a Base Rate Loan in the amount of the drawing, the
proceeds of which will be used to satisfy the reimbursement
obligations; provided, however, the Borrower shall only be entitled
to receive such Revolving Loan if the Borrower shall have satisfied
(or the Banks shall have waived in accordance with Section 9.05)
the conditions under Section 3.02 with respect thereto. The
Borrower shall reimburse the Issuing Bank on the day of drawing
under any Letter of Credit (either with the proceeds of a Revolving
Loan obtained hereunder or otherwise) in same day funds. If the
Borrower shall fail to reimburse the Issuing Bank as provided
hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Base Rate plus 2%. The
Borrower's reimbursement obligations hereunder shall be absolute
and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower
may claim or have against the Issuing Bank, the Agent, the Banks,
the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any
failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit.
The Issuing Bank will promptly notify the other Banks of the amount
of any unreimbursed drawing and each Bank will promptly pay the
Issuing Bank for its pro rata share of such unreimbursed drawing as
provided in subsection (c) hereof. Each Bank that has reimbursed
the Issuing Bank pursuant to subsection (c) for its pro rata share
of any payment made by the Issuing Bank under a Letter of Credit
shall thereupon acquire a participation, to the extent of such
reimbursement, in the claim of the Issuing Bank against the
Borrower under this subsection (d). The Issuing Bank shall
promptly pay to each such participant such participant's pro rata
share of all payments made by the Borrower to the Issuing Bank on
account of the claim of the Issuing Bank against the Borrower under
this subsection (d).
(e) Modification, Extension. The issuance of any
material supplement, material modification, material amendment,
renewal or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(f) Indemnification; Nature of Issuing Bank's Duties.
In addition to its other obligations under this Section 2.13, the
Borrower hereby agrees to protect, indemnify, pay and save the
Issuing Bank and each Bank harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Bank or such Bank may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance, amendment or transfer of
any Letter of Credit or (B) the failure of the Issuing Bank to
honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such
acts or omissions, herein called "Government Acts").
(i) As between the Borrower
and the Issuing Bank, the Borrower shall, in the
absence of the Issuing Bank's gross negligence or
wilful misconduct, assume all risks of the acts,
omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Bank
shall not be responsible: (A) for the
form, validity, sufficiency, accuracy,
genuineness or legal effect of any
document submitted by any party in connec-
tion with a drawing under a Letter of
Credit, even if it should in fact prove to
be in any or all respects invalid,
insufficient, inaccurate, fraudulent or
forged; (B) for the validity or
sufficiency of any instrument transferring
or assigning or purporting to transfer or
assign any Letter of Credit or the rights
or benefits thereunder or proceeds
thereof, in whole or in part, that may
prove to be invalid or ineffective for any
reason; (C) for failure of the beneficiary
of a Letter of Credit to comply fully with
conditions required in order to draw upon
a Letter of Credit; (D) for errors,
omissions, interruptions or delays in
transmission or delivery of any messages,
by mail, cable, telegraph, telex or
otherwise, whether or not they be in
cipher; (E) for errors in interpretation
of technical terms; (F) for any loss or
delay in the transmission or otherwise of
any document required in order to make a
drawing under a Letter of Credit or of the
proceeds thereof; and (G) for any
consequences arising from causes beyond
the control of the Issuing Bank,
including, without limitation, any
Government Acts. None of the above shall
affect, impair or prevent the vesting of
the Issuing Bank's rights or powers
hereunder.
(ii) In furtherance and
extension and not in limitation of the specific
provisions hereinabove set forth, any action taken
or omitted by the Issuing Bank or any Bank, under
or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good
faith, shall not put such Issuing Bank or such
Bank under any resulting liability to the
Borrower. It is the intention of the parties that
this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Bank
and each Bank against any and all risks involved
in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks
of the acts or omissions, whether rightful or
wrongful, of any present or future Government
Acts. Neither the Issuing Bank nor any
Bank shall, in any way, be liable for any
failure by the Issuing Bank or anyone else
to pay any drawing under any Letter of
Credit as a result of any Government Acts
or any other cause beyond the control of
the Issuing Bank or any Bank.
(iii) Nothing in this
subsection (f) is intended to limit the
reimbursement obligation of the Borrower contained
in subsection (d) hereof. The obligations of the
Borrower under this subsection (f) shall survive
the termination of this Loan Agreement. No act or
omissions of any current or prior beneficiary of a
Letter of Credit shall in any way affect or impair
the rights of the Issuing Bank to enforce any
right, power or benefit under this Loan Agreement.
(iv) Notwithstanding anything
to the contrary contained in this subsection (f),
the Borrower shall have no obligation to indemnify
the Issuing Bank in respect of any liability
incurred by such Issuing Bank arising solely out
of the gross negligence or willful misconduct of
the Issuing Bank, as determined by a court of
competent jurisdiction.
SECTION 2.14 Fees.
(a) Facility Fee. From and after the Closing Date,
the Borrower agrees to pay the Agent for the ratable benefit of the
Banks a facility fee for each calendar quarter in an amount equal
to 1/4% per annum on the average daily amount of the Revolving Loan
Commitments for such quarter. Such commitment fee shall be payable
quarterly in arrears on the last day of each Quarterly Period
commencing March 31, 1995. The Agent shall distribute such
facility fees to the Banks pro rata in accordance with the
respective Revolving Loan Commitments of the Banks.
(b) Letter of Credit Fees. The Borrower agrees to pay
the fees and charges with respect to the Letters of Credit as
described on Schedule 2.14(b) hereof.
(c) Agent's Fees. The Borrower agrees to pay the
Agent such fees as may be agreed upon by the Agent and the Borrower
from time to time.
ARTICLE III
CONDITIONS
SECTION 3.01 Conditions to Initial Loans. The obligation of each
Bank to make its initial Loan hereunder (or the Issuing Bank to issue the
initial Letter of Credit hereunder if the date of such issuance is prior to
the date of the making of the initial Loan hereunder) is subject to the
satisfaction of such of the following conditions on or prior to the Closing
Date as shall not have been expressly waived in accordance with Section
9.05:
(a) The Agent shall have received counterparts hereof
signed by each of the parties hereto (or, in the case of any party
(other than the Borrower) as to which an executed counterpart shall
not have been received, receipt by the Agent in form satisfactory
to it of telegraphic, facsimile, telex or other written
confirmation from such party of execution of a counterpart hereof
by such party); provided, however, in any event, the Agent shall
distribute to each Bank promptly after the Closing Date an original
Credit Agreement executed by the Borrower, the Banks and the Agent;
(b) The Agent shall have received a duly executed
Revolving Note for the account of each Bank, complying with Section
2.03 and the Agent shall have received the duly executed Subsidiary
Guarantee;
(c) The Agent and each Bank shall have received legal
opinions of counsel to the Borrower, substantially to the effect of
Exhibit B hereto;
(d) The Agent shall have received all documents it may
reasonably request relating to the existence of the Borrower and
the Subsidiary Guarantor, the corporate authority for and the
validity of each of the Financing Documents, and any other matters
relevant hereto, all in form and substance satisfactory to the
Agent.
(e) The Agent shall receive the applicable Notice of
Borrowing relating to such Loan;
(f) No Default shall have occurred and be continuing
immediately before the making of such Loan and no Default shall
exist immediately thereafter;
(g) The representations and warranties of the Borrower
made in or pursuant to the Financing Documents to which it is a
party shall be true in all material respects as of the date of the
making of such Loan;
(h) The proceeds of the Loans will be extended in
compliance with all applicable governmental laws and regulations
(including without limitation Regulations U, G, T and X);
(i) The Agent and the Banks shall have been paid all
fees due and payable pursuant to Section 2.14 hereof and the Agent
shall have been reimbursed for such of its costs and expenses as
shall have been notified to the Borrower at least three Business
Days prior to the date of the first borrowing in accordance with
the terms hereof;
(j) Except as set forth on Exhibit C attached hereto,
no litigation shall be pending or threatened which would be likely
to materially and adversely affect the assets, operations, business
or condition, financial or otherwise, of the Borrower, or which
could reasonably be expected to affect materially and adversely the
ability of the Borrower to fulfill its obligations hereunder (or
otherwise materially impair the interests in respect thereof of the
Agent and the Lenders);
(k) There shall not have occurred or become known any
material adverse change with respect to the condition (financial or
otherwise), operations, business or assets of the Borrower and its
subsidiaries taken as a whole, since December 31, 1994.
The certificates and opinions referred to in this Section shall be
dated not earlier than the date hereof and not later than the date of such
initial Loans.
SECTION 3.02 Conditions to Revolving Loans and Letters of Credit.
The obligation of any Bank to make any Revolving Loan or the Issuing Bank to
issue any Letter of Credit is subject to the satisfaction of such of the
following conditions on or prior to the proposed date of the making of such
Loan or the issuance of such Letter of Credit:
(a) The Agent shall receive the applicable Notice of
Borrowing relating to such Loan or the Issuing Bank shall receive
the applicable notice relating to the issuance of such Letter of
Credit pursuant to Section 2.13(b) hereof;
(b) No Default shall have occurred and be continuing
immediately before the making of such Loan and no Default shall
exist immediately thereafter;
(c) The representations and warranties of the Borrower
made in or pursuant to the Financing Documents to which it is a
party shall be true in all material respects on and as of the date
of such Borrowing; and
(d) Immediately following the making of such Loan or
the issuance of such Letter of Credit the sum of the outstanding
principal balance of the Revolving Loans plus the Letter of Credit
Obligations shall not exceed the sum of the Revolving Commitments.
The making of such Loan or the issuance of such Letter of Credit hereunder
shall be deemed to be a representation and warranty by the Borrower on the
date thereof as to the facts specified in clauses (b), (c) and (d) of this
Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01 Corporate Existence and Power. The Borrower and each
of its Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted except any of such licenses, authorizations, consents or
approvals the failure of which to have would not constitute a material
adverse effect on the business or operations of the Borrower and its
Subsidiaries, taken as a whole.
SECTION 4.02 Corporate and Governmental Authorization; No
Contravention. The execution and delivery by the Borrower of the Financing
Documents to which the Borrower is a party and the performance by the
Borrower of its obligations thereunder are within the corporate power of the
Borrower, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental
body, agency or official (except for any such action or filing that has been
taken and is in full force and effect) and do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
Constitutional Documents of the Borrower or of any material agreement,
judgment, injunction, order, decree or other material instrument binding
upon the Borrower or result in the creation or imposition of any Lien on any
asset of the Borrower other than Liens created pursuant to the Financing
Documents.
SECTION 4.03 Binding Effect. This Credit Agreement constitutes a
valid and binding agreement of the Borrower, and the other Financing
Documents to which the Borrower is a party, when executed and delivered as
contemplated by this Credit Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04 Litigation. Except as set forth on Exhibit C
attached hereto, there is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which would materially adversely affect
the business or the consolidated results of operations of the Borrower and
its Subsidiaries, or which in any manner draws into question the validity of
any Financing Document.
SECTION 4.05 Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations in all material aspects under the
minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the Internal Revenue
Code in respect of any Plan, (ii) failed to make any contribution or payment
to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement,
or made any amendment to any Plan or Benefit Arrangement, which in either
event has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability under Title IV
of ERISA other than a liability to the PBGC for premiums or similar items
under Section 4007 of ERISA.
SECTION 4.06 Subsidiaries. Set forth on Schedule 4.07 hereto is a
complete and accurate list of all of the Subsidiaries of the Borrower as of
the Closing Date.
SECTION 4.07 Not an Investment Company. Neither the Borrower nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.08 Margin Stock. No proceeds of any Loan will be used
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock in violation of
Regulations U, G, T or X.
SECTION 4.09 Compliance With Laws. The Borrower and each of its
Subsidiaries is in compliance in all material respects with all applicable
laws, rules and regulations (including all Environmental Laws), and is not
in violation of, or in default under, any term or provision of any charter,
bylaw, mortgage, indenture, agreement, instrument, statute, rule,
regulation, judgment, decree, order, writ or injunction applicable to it,
except for any such non-compliance, violation, default or failure to comply
which would not be reasonably expected, individually or in the aggregate, to
have a material adverse effect on the business, financial position or
results of operations of the Borrower or any of its Subsidiaries, or on the
ability of the Borrower or any of its Subsidiaries to perform its
obligations under the Financing Documents.
SECTION 4.10 Absence of Liens. There are no Liens of any nature
whatsoever on any properties or assets of the Borrower or any of its
Subsidiaries, except as otherwise permitted under Section 5.08 hereof.
SECTION 4.11 Debt. Other than as set forth on Schedule 4.11
hereto, there is no Debt of the Borrower and its Subsidiaries outstanding as
of the date hereof.
SECTION 4.12 Contingent Liabilities. There are no material
contingent liabilities (other than contingent liabilities that constitute
Debt) of the Borrower or its Subsidiaries as of the date hereof.
SECTION 4.13 Investments. Set forth on Schedule 4.13 is a
complete and accurate list as of the date hereof of all investments by the
Borrower or any of its Subsidiaries in any Person, other than (i) Permitted
Investments and (ii) investments by the Borrower or any of its Subsidiaries
in a Subsidiary.
SECTION 4.14 Solvency. The Borrower is Solvent after giving
effect to the transactions contemplated by the Credit Agreement.
SECTION 4.15 Taxes. The Borrower and its Subsidiaries have filed,
or caused to be filed, all material tax returns (federal, state, local and
foreign) required to be filed and paid all amounts of taxes shown thereon to
be due (including interest and penalties) and have paid all other taxes,
fees, assessments and other governmental charges owing by them, except for
such taxes (i) which are not yet delinquent or (ii) as are being contested
in good faith and by proper proceedings, and against which adequate reserves
are being maintained in accordance with generally accepted accounting
principles. The Borrower is not aware of any proposed material tax
assessments against it or any of its Subsidiaries.
ARTICLE V
COVENANTS
The Borrower hereby covenants and agrees that until the Loans and
the Letter of Credit Obligations, together with interest, fees and other
obligations hereunder, have been paid in full and the Commitments hereunder
shall have terminated, the Borrower shall, and shall cause its Subsidiaries
to, perform and comply with the following covenants:
SECTION 5.01 Information. The Borrower will mail or deliver to
each of the Banks:
(a) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and
its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and consolidated statement of
cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and,
with respect to such financial information for the Borrower, such
consolidated statements shall be audited statements by independent
public accountants of nationally recognized standing and containing
an unqualified opinion of such accountants;
(b) as soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, a consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income for
such quarter and consolidated statements of income and cash flows
for the portion of the Borrower's fiscal year ended at the end of
such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion
of the previous fiscal year, all certified (subject to normal year-
end adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial
officer, the chief accounting officer or the treasurer of the
Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in subsections (a) and (b) of this
Section, a certificate of the treasurer, chief accounting officer
or chief financial officer of the Borrower (i) stating whether, to
the best of such officer's knowledge after due inquiry, there
exists on the date of such certificate any Default and, if any
Default then exists, setting forth the details thereof and the
action that the Borrower is taking or proposes to take with respect
thereto and (ii) stating whether, since the date of the most recent
financial statements previously delivered pursuant to subsection
(a) or (b) of this Section, there has been a change in the
generally accepted accounting principles applied in preparing the
financial statements then being delivered from those applied in
preparing the most recent audited financial statements so delivered
which is material to the financial statements then being delivered,
(iii) furnishing calculations demonstrating the compliance by the
Borrower of the covenants contained in Sections 5.17, 5.18, 5.19
and 5.20 hereof, and (iv) attaching management's summary of the
results contained in such financial statements;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements whether anything has come to their attention to
cause them to believe that any Default existed on the date of such
statements;
(e) within five Business Days after any Responsible
Officer obtains knowledge of any Default, if such Default is then
continuing, a certificate of the treasurer, chief accounting
officer or chief financial officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all financial
statements, reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability with respect to any
Multiemployer Plan under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is not Solvent or has been
terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of its intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) except as previously disclosed to the Banks in
writing prior to the date hereof, fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of
a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code, a certificate of the chief financial
officer, the chief accounting officer or the treasurer of the
Borrower setting forth details as to such occurrence and the
action, if any, which the Borrower or any applicable member of the
ERISA Group is required or proposes to take;
(i) as soon as reasonably practicable after any
Responsible Officer of the Borrower obtains knowledge of the
commencement of, or of a material threat of the commencement of, an
action, suit or proceeding against the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable likelihood
of an adverse decision which would after the application of
applicable insurance materially and adversely affect the business,
financial position or results of operations of the Borrower and its
Consolidated Subsidiaries, in each case considered as a whole, or
which in any manner questions the validity of any Financing
Document, a written report informing the Banks in reasonable detail
of the nature of such pending or threatened action, suit or
proceeding;
(j) from time to time such additional information
regarding the financial position or business of the Borrower and
its Subsidiaries, as the Agent or any Bank may reasonably request.
SECTION 5.02 Payment of Obligations. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, at
or before maturity, all their respective material obligations and
liabilities, including, without limitation, tax liabilities, except where
the same may be contested in good faith by appropriate proceedings, and will
maintain, and will cause each of its Subsidiaries to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.
SECTION 5.03 Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each of its
Subsidiaries to keep, all property materially useful and necessary
in its business in good working order and condition, ordinary wear
and tear excepted.
(b) The Borrower will maintain, and will cause each of
its Subsidiaries to maintain, with financially sound and
responsible insurance companies, insurance on all their respective
properties in at least such amounts and against such risks (and
with such risk retention or self insurance provisions) as are
usually insured against in the same general area by companies of
established repute engaged in the same or a similar business, and
will furnish to the Banks, upon request from the Agent, information
presented in reasonable detail as to the insurance so carried.
SECTION 5.04 Conduct of Business and Maintenance of Existence.
The Borrower will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Borrower
and each of its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each of its Subsidiaries to preserve, renew
and keep in full force and effect their respective corporate existences and,
except for any such rights, privileges and franchises the failure to
preserve which would not in the aggregate have a material adverse effect on
the Borrower and its Subsidiaries or the ability of the Borrower or any
Subsidiary to perform any of their respective obligations under any
Financing Document, their respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided that
nothing in this Section 5.04 shall prohibit (a) the merger of a Subsidiary
of the Borrower into the Borrower or the merger or consolidation of any
Subsidiary of the Borrower with or into another Person if the corporation
surviving such consolidation or merger is a Wholly-Owned Consolidated
Subsidiary of the Borrower and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing or (b) the
termination of the corporate existence of any Subsidiary of the Borrower or
the discontinuation of any line of business of the Borrower or any of its
Subsidiaries if the Borrower in good faith determines that such termination
is in the best interest of the Borrower or such Subsidiary, as the case may
be, and is not materially disadvantageous to the Banks.
SECTION 5.05 Compliance with Laws. The Borrower will comply, and
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) the failure to comply
with which would have a material adverse effect on the Borrower and its
Subsidiaries or their ability to perform any of its obligations under any
Financing Document, except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.06 Inspection of Property, Books and Records. The
Borrower will keep, and will cause each of its Subsidiaries to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and, except to the extent prohibited by applicable law, rule,
regulations or orders, will permit, and will cause each of its Subsidiaries
to permit, representatives of any Bank at such Bank's expense to visit and
inspect any of their respective properties, to examine and make abstracts
from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times
and as often as may reasonably be desired. Each of the Banks agrees to keep
any information obtained pursuant to the foregoing provisions on a
confidential basis except to the extent that such information is public
information or becomes public information and except to the extent that any
Bank is required to disclose such information by law.
SECTION 5.07 Limitation on Debt. Except for existing Debt as set
forth on Schedule 5.07, the Borrower will not nor will it permit any of its
Subsidiaries to incur or at any time be liable with respect to any Debt
other than Debt in favor of the Banks hereunder.
SECTION 5.08 Negative Pledge. The Borrower will not nor will it
permit any of its Subsidiaries to create, assume or suffer to exist any Lien
on any asset now owned or hereafter acquired by it, except:
(a) (i) Liens existing on the date of this Credit
Agreement securing Debt outstanding on such date and identified on
Schedule 5.08 and (ii) Liens in favor of the Bank;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's, statutory banker's or other like Liens
arising in the ordinary course of business and which are not
overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings;
(c) Liens for taxes, assessments or other governmental
charges not yet due or which are being contested in good faith and
by appropriate proceedings;
(d) Liens imposed by law on pledges or deposits in
connection with workmen's compensation, unemployment insurance and
other social security legislation which do not interfere with or
adversely affect in any material respect the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(e) deposits to secure the performance of bids,
tenders, trade or government contracts (other than for borrowed
money), leases, licenses, statutory obligations, surety bonds
(other than in relation to judgments), performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, zoning and similar
restrictions and other encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not interfere with or adversely affect in any
material respect the ordinary conduct of the business of the
Borrower or any of its Subsidiaries; and
(g) leasehold interests in assets subject to leases.
SECTION 5.09 Consolidations, Mergers and Sales of Assets.
(a) The Borrower will not, nor will it permit any of
its Subsidiaries to, consolidate or merge with or into any other
Person except as permitted in accordance with Section 5.04.
(b) The Borrower will not, nor will it permit any of
its Subsidiaries to, make Asset Sales to the extent that the
aggregate net book value of the assets sold with respect thereto
exceeds 10% of consolidated asset holdings as of December 31, 1994.
SECTION 5.10 Creation of Subsidiaries. The Borrower will not, nor
will it permit any of its Subsidiaries to, create any Subsidiary unless such
Subsidiary executes a guarantee in the form of the Subsidiary Guarantee
within 30 days after its formation.
SECTION 5.11 Acquisitions. The Borrower will not, nor will it
permit any of its Subsidiaries to make Acquisitions.
SECTION 5.12 Transactions with Affiliates. The Borrower will not,
nor will it permit any of its Subsidiaries to, directly or indirectly, pay
any funds to or for the account of, make any Investment in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible, to, or
participate in, or effect any transaction in connection with any joint
enterprise or other joint arrangement with, any of their Affiliates;
provided, however, that the foregoing provisions of this Section shall not
prohibit (i) any Subsidiaries of the Borrower from declaring or paying any
lawful dividend to the Borrower or any of its Subsidiaries and (ii) the
Borrower from entering into any of such transactions with the Subsidiary
Guarantor in the ordinary course of business.
SECTION 5.13 Use of Proceeds. The proceeds of the Loans will be
used to finance the short term working capital needs of the Borrower and its
Subsidiaries.
SECTION 5.14 Constitutional Documents. Subject to changes,
including any dissolutions permitted pursuant to this Credit Agreement, the
Borrower will not, nor will it permit any of its Subsidiaries to, amend its
Constitutional Documents in any manner which could materially adversely
affect the rights of the Banks under the Financing Documents or their
ability to enforce the same.
SECTION 5.15 Investments. The Borrower shall not make, nor
shall it permit any of its Subsidiaries to make, any Investment in any other
Person except for (i) Permitted Investments and (ii) investments in their
respective Subsidiaries.
SECTION 5.16 Repurchase, Retirement or Redemption of Capital
Stock; Dividends. The Borrower will not, nor will it permit any of its
Subsidiaries (other than its wholly-owned Subsidiaries) to, repurchase,
retire or redeem any of its capital stock. The Borrower will not pay
dividends on any of its stock.
SECTION 5.17 Consolidated Current Ratio. The Borrower will
maintain a Consolidated Current Ratio of at least 1.25 to 1.0 as of the last
day of each fiscal quarter (commencing with the fiscal quarter ending July
1, 1995.
SECTION 5.18 Consolidated Fixed Charge Coverage Ratio. The
Borrower will maintain a Consolidated Fixed Charge Coverage Ratio of at
least the following amounts as of the last day of the following fiscal
quarters:
Fiscal Quarter Ending Required Ratio
April 1, 1995 0.85
to 1.0
July 1, 1995 0.95
to 1.0
September 30, 1995 1.05
to 1.0
December 30, 1995 and 1.20 to 1.0
each fiscal quarter ending
thereafter
SECTION 5.19 Consolidated Leverage Ratio. The Borrower will not
permit its Consolidated Leverage Ratio to exceed .65 to 1.0 as of the last
day of each fiscal quarter (commencing with the fiscal quarter ending July
1, 1995).
SECTION 5.20 Consolidated Tangible Net Worth. The Borrower shall
maintain Consolidated Tangible Net Worth as of the last day of each fiscal
quarter (commencing with the fiscal quarter ending April 1, 1995) in an
amount at least equal to $36,000,000.00.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. The occurrence of any of the
following events shall constitute an event of default hereunder
(individually, an "Event of Default" and collectively the "Events of
Default"):
(a) The Borrower shall fail to pay (i) when due any
principal of any Loan or Letter of Credit Obligation or (ii) within
five days after the same shall become due, any interest on any Loan
or any fees or any other amount payable hereunder;
(b) The Borrower shall fail to observe or perform any
covenant contained in Section 5.01 hereof (other than in Section
5.01(e) hereof) for 15 days after written notice of such failure
shall have been given to the Borrower by the Agent or any Bank;
(c) The Borrower shall fail to observe or perform any
covenant contained in Section 5.17, 5.18, 5.19 or 5.20;
(d) (i) The Borrower shall fail to observe or perform
any covenant or agreement contained in any Financing Document
(other than those covered by clause (a), (b) or (c) above) for 30
days after written notice of such failure shall have been given to
the Borrower by the Agent or any Bank;
(e) Any representation, warranty, certification or
statement made or deemed made by the Borrower in any Financing
Document or in any certificate, financial statement or other
document delivered pursuant thereto shall prove to have been
incorrect in any material respect when made (or deemed made);
(f) The Borrower or any of its Subsidiaries shall fail
to make any payment in respect of any Debt in excess of $250,000.00
when due or within any applicable grace period;
(g) Any event or condition shall occur which results
in the acceleration of the maturity of any Debt in excess of
$250,000.00 or enables the holder of such Debt or any Person acting
on such holder's behalf to accelerate the maturity thereof;
(h) The Borrower or any of its Subsidiaries shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the
foregoing;
(i) An involuntary case or other proceeding shall be
commenced against the Borrower or any of its Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period
of 60 days; or an order for relief shall be entered against the
Borrower or any of its Subsidiaries under the federal bankruptcy
laws as now or hereafter in effect;
(j) The Borrower shall admit its inability to pay its
debts as and when they fall due;
(k) Except as previously disclosed to the Banks in
writing prior to the date hereof: any member of the ERISA Group
shall fail to pay when due an amount or amounts aggregating in
excess of $250,000 which it shall have become liable to pay under
Title IV of ERISA; or notice of intent to terminate any Plan which
is then a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any
Plan which is then a Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan which is then a Material Plan must be
terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could
cause one or more members of the ERISA Group to incur a current
payment obligation, that is, an obligation or series of obligations
payable within 12 months, in excess of $500,000.00;
(l) An uninsured judgment or order for the payment of
money in excess of $250,000.00 shall be rendered against the
Borrower or any of its Subsidiaries and such judgment or order
shall continue unsatisfied and unstayed for a period of 30 days;
provided, however, such period shall be extended to 90 days so long
as such extension is permitted by applicable law and so long as no
Liens on the assets of the Borrower arise during such extended
period on account of such judgment; or
(m) any change in the control of the Borrower shall
occur;
then, and in every such event, the Agent shall (i) if requested by the
Majority Banks, by notice to the Borrower terminate the Commitments, (ii) if
requested by the Majority Banks, by notice to the Borrower declare the Notes
(together with accrued interest thereon) and all other amounts payable by
the Borrower hereunder to be, and such Notes and amounts shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower,
(iii) if requested by the Majority Banks, direct the Borrower to immediately
pay to the Agent (for the ratable benefit of the Banks), and the Borrower
agrees to immediately pay to the Agent (for the ratable benefit of the
Banks), such additional amounts of cash, to be held in a cash collateral
account in the name of the Agent and under the dominion and control of the
Agent as additional security for the reimbursement obligations which may
thereafter arise on account of subsequent drawings or payments under the
Letters of Credit, in an amount equal to the then outstanding Letter of
Credit Obligations and (iv) take such other actions as are directed by the
Majority Banks; provided that in the case of any Event of Acceleration,
without any notice to the Borrower or any other act by the Agent or any
Bank, the Commitments shall thereupon terminate and the Notes (together with
accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and the Borrower will immediately pay to the
Agent (for the ratable benefit of the Banks) such additional amounts of
cash, to be held in a cash collateral account in the name of the Agent (for
the ratable benefit of the Banks) and under the dominion and control of the
Agent as additional security for the reimbursement obligations which may
thereafter arise on account of subsequent drawings or payments under the
Letters of Credit, in an amount equal to the then outstanding Letter of
Credit Obligations.
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. Each Bank appoints
the Agent to act as its agent in connection herewith and each of the other
Financing Documents.
SECTION 7.02 Agents and Affiliates. NationsBank shall have the
same rights and powers under this Credit Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent
and NationsBank and each of its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower,
any of its Subsidiaries and any of its or their respective Affiliates as if
it were not the Agent.
SECTION 7.03 Action by Agent. The obligations of the Agent under
the Financing Documents are only those expressly set forth herein with
respect to it. Without limiting the generality of the foregoing the Agent
shall not be required to take any action with respect to any Default or
Event of Default, except as expressly provided in Article VI.
SECTION 7.04 Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by the Agent and shall not be liable
for any action taken or omitted to be taken by the Agent in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action
taken or not taken by it in connection with the Financing Documents (a) with
the consent or at the request of the Majority Banks or (b) in the absence of
gross negligence or willful misconduct of the Agent. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (a) any statement,
warranty or representation made in connection with any Financing Document;
(b) the performance or observance of any of the covenants or agreements of
the Borrower; (c) the satisfaction of any condition specified in Article
III, except receipt of items required to be delivered to the Agent; or (d)
the validity, effectiveness or genuineness of any Financing Document or any
other instrument or writing furnished in connection therewith. The Agent
shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire,
facsimile, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.06 Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with the
Financing Documents or any action taken or omitted by the Agent thereunder.
SECTION 7.07 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Credit Agreement.
Each Bank also acknowledges that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under the Financing
Documents.
SECTION 7.08 Successor Agent. The Agent may resign at any time by
giving 30 days prior written notice thereof to the Banks and the Borrower.
Upon any such resignation of the Agent, the Majority Banks shall have the
right to appoint a successor Agent, with the consent of the Borrower (which
consent shall not unreasonably be withheld, but which may in any event be
withheld if (a) such proposed successor Agent fails to deliver evidence
reasonably satisfactory to the Borrower that such proposed successor Agent
is not a Foreign Person, (b) the Borrower in good faith concludes that the
appointment of such proposed successor Agent could result in a violation of
any law, rule, guideline or regulation, or a violation of, revocation of,
failure to renew or modification of any order, facility security clearance
or permit or (c) the credit standing of the proposed successor Agent is
lower than that of the preceding Agent); provided, however, such consent of
the Borrower shall not be required upon the occurrence and during the
continuance of an Event of Default. If no successor Agent shall have been
so appointed by the Majority Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Banks and with
the consent of the Borrower (which consent shall not be unreasonably
withheld except as aforesaid), appoint a successor Agent, which shall have
core capital of at least $500,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent. In the event of any successor agent to
NationsBank, (i) all references herein to NationsBank shall be deemed to
refer to such successor agent and (ii) all references to Charlotte, North
Carolina shall be deemed to mean the City in which the successor Agent's
headquarters is located.
SECTION 7.09 Agent's Fee. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the time previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent is advised by the Eurodollar Reference
Bank that deposits in Dollars (in the applicable amounts) are not
being offered to the Eurodollar Reference Bank in the relevant
market for such Interest Period, or
(b) the Majority Banks advise the Agent that the
Adjusted Eurodollar Rate as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding
their Eurodollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, (i) the obligations of the
Banks to make Eurodollar Loans or to convert outstanding Loans into
Eurodollar Loans shall be suspended and (ii) each outstanding Eurodollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Agent at least one Business Day before the date of any
Eurodollar Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, such Borrowing shall
instead be made as a Base Rate Borrowing.
SECTION 8.02 Illegality. If, on or after the date of this Credit
Agreement, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank (or its eurodollar lending office) with any request or directive
(whether or not having the force of law) of any such authority, central bank
or comparable agency shall make it unlawful or impossible for any Bank (or
its eurodollar lending office) to make, maintain or fund its Eurodollar
Loans and such Bank shall so notify the Agent, the Agent shall forthwith
give notice thereof to the other Banks and the Borrower, whereupon until
such Bank notifies the Borrowers and the Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Bank to make
Eurodollar Loans, or to convert outstanding Loans into Eurodollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different eurodollar lending office if
such designation will avoid the need for giving such notice and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank. If
such notice is given, each Eurodollar Loan of such Bank then outstanding
shall be converted to a Base Rate Loan either (a) on the last day of the
then current Interest Period applicable to such Eurodollar Loan if such Bank
may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may not lawfully continue
to maintain and fund such Loan to such day.
SECTION 8.03 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
any Bank (or its eurodollar lending office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank
(or its applicable lending office) to any tax,
duty or other charge with respect to its
Eurodollar Loans, its Notes or its obligation to
make Eurodollar Loans, or shall change the basis
of taxation of payments to any Bank (or its
eurodollar lending office) of the principal of or
interest on its Eurodollar Loans or any other
amounts due under this Credit Agreement in respect
of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate
of tax imposed on, or contemplated with respect
to, the income of such Bank or its eurodollar
lending office or changes generally affecting the
manner in which the income of such Bank or its
applicable lending office is subjected to
taxation, by the jurisdiction in which such Bank's
principal executive office or eurodollar lending
office is located or the jurisdiction under the
laws of which such Bank is organized); or
(ii) shall impose, modify or
deem applicable any reserve, special deposit or
similar requirement (including, without
limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System,
but excluding with respect to any Eurodollar Loan
any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of,
deposits with or for the account of, or credit
extended by, any Bank (or its applicable lending
office) or shall impose on any Bank (or its
applicable lending office; or on the United States
market for certificates of deposit or the London
interbank market any other condition affecting its
Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to
such Bank (or its eurodollar lending office) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its eurodollar lending
office) under this Credit Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material (except to
the extent that such increased cost or reduction of a sum received
or receivable is attributable to such Bank's failure to perform any
of its obligations under Section 2.13), then, within 15 days after
demand by such Bank (with a copy to the Agent) accompanied by a
certificate setting forth in reasonable detail its calculation of
such increased cost or reduction, the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction.
(b) If any Bank shall have determined that, after the
date hereof, the adoption or change of any applicable law, rule,
guideline or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its parent) as a
consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its parent) could have achieved but for
such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time,
within 15 days after demand by such Bank (with a copy to the Agent)
accompanied by a certificate setting forth in reasonable detail its
calculation of such reduction, the Borrower shall pay such Bank
such additional amount or amounts as will compensate such Bank (or
its parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different applicable
lending office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank.
A certificate of any Bank claiming compensation under this Section
and setting forth in reasonable detail its calculation of the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution
methods. Failure on the part of any Bank to demand compensation
under subsection (a) or (b) with respect to any period shall not
constitute a waiver of such Bank's right to demand compensation
with respect to such period or any other period; provided, however,
that no Bank shall be entitled to compensation for the period which
is more than 90 days prior to the date the Borrower receives the
certificate described in this subsection (c) via facsimile. Each
Bank agrees that it will send the certificate described above via
facsimile to insure immediate receipt by the Borrower.
(d) Nothing contained in this Section 8.03 shall
restrict the Borrower's right to prepay any Loan; provided,
however, any such prepayment shall not relieve any obligation of
the Borrower incurred hereunder prior to such prepayment.
SECTION 8.04 Base Rate Loans Substituted for Affected Eurodollar
Loans. If (i) the obligation of any Bank to make or maintain Eurodollar
Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 and the Borrower shall, by at least
five Eurodollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply to such Bank,
then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such
Bank as (or continued as or converted into) Eurodollar Loans shall
instead be Base Rate Loans (on which interest and principal shall
be payable contemporaneously with the related Eurodollar Loans of
the other Banks), and
(b) after each of its Eurodollar Loans has been repaid
(or converted to a Base Rate Loan), all payments of principal which
would otherwise be applied to repay such Eurodollar Loans shall be
applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to
such notice no longer apply, the principal amount of each such Base Rate
Loan shall be converted into a Eurodollar Loan on the first day of the next
succeeding Interest Period applicable to the related Eurodollar Loans of the
other Banks.
SECTION 8.05 Substitution of Bank. If (i) the obligation of any
Bank to make Eurodollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03, the Borrower
shall have the right, with the assistance of the Agent, to seek a substitute
bank or banks reasonably satisfactory to the Agent and the Borrower (which
may be one or more of the Banks) to purchase the Notes of such Bank, the
participations in Letters of Credit of such Bank and the interest of such
Bank in the commitment fees and letter of credit fees payable pursuant to
Sections 2.15(a) and (b) and to assume the Commitment of such Bank for a
purchase price equal to all amounts payable to such Bank hereunder and under
the Notes, and the Borrower, the Agent, such Bank and such substitute bank
or banks shall execute and deliver an appropriately completed Assignment and
Assumption Agreement pursuant to Section 9.06(c) hereof to effect the
assignment of rights to and assumption of obligations by such substitute
bank or banks.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given
to such party: (a) at its address, facsimile number of telex number set
forth on the signature pages hereof, (b) at such other address, facsimile
number or telex number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in or pursuant to this Section and
the appropriate answerback is received, (ii) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in or pursuant to this Section; provided
that notices to the Agent or the Borrower or any Bank under Article II or
Article VIII shall not be effective until received.
SECTION 9.02 No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03 Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all reasonable out-of-
pocket expenses of the Agent associated with the preparation, due
diligence, administration and syndication of the Loans, including
reasonable fees and disbursements of special counsel for the Agent,
in connection with the administration of the Financing Documents
and the transactions hereunder, any waiver or consent hereunder or
any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-
pocket expenses incurred by the Agent and each Bank, including
reasonable fees and disbursements of counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom. The Borrower
shall indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of this Credit Agreement or
the Notes.
(b) The Borrower shall indemnify and defend the Agent
and each other Bank and their respective directors, officers,
agents, employees, Subsidiaries and Affiliates from, and hold each
of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by
reason of any investigation, litigation or other proceeding brought
or threatened relating to any Loan extended or proposed to be
extended to the Borrower under this Credit Agreement (including,
but without limitation, any use made or proposed to be made by the
Borrower or any of its Subsidiaries of the proceeds of such Loans,
but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful
misconduct of the indemnitee), or any Commitment under this Credit
Agreement, including, but without limitation, amounts paid in
settlement, court costs, and fees and disbursements of no more than
one separate law firm acting as counsel for any or all of the
parties indemnified hereunder, in each case incurred in connection
with any such investigation, litigation or other proceedings.
SECTION 9.04 Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participation in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.05 Amendments and Waivers. Any provision of this Credit
Agreement or any of the other Financing Documents may be modified, amended
or waived if, but only if, such modification, amendment or waiver is in
writing and is signed by the Borrower and the Majority Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided
that no such modification, amendment or waiver shall, unless signed by all
the Banks, (a) increase the Commitment of any Bank or subject any Bank to
any additional obligation, (b) reduce the principal of or rate of interest
on any Loan or any fees or other amounts payable to any Bank hereunder, (c)
postpone the date fixed for any scheduled payment of principal of or
interest on any Loan or any fees hereunder or for any scheduled reduction or
termination of any Commitment or (d) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Credit
Agreement.
SECTION 9.06 Successors and Assigns.
(a) The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights or
obligations under this Credit Agreement without the prior written
consent of all the Banks, and no Bank may assign or otherwise
transfer any of its rights or obligations under this Credit
Agreement except in compliance with this Section 9.06.
(b) Any Bank at any time may, upon prior notice to the
Borrower and upon receipt of the Borrower's consent (such consent
not to be unreasonably withheld), grant to one or more banks or
other institutions (each a "Participant") participating interests
in its Commitment or any or all of its Loans. In the event of any
such grant by a Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Agent, such Bank
shall remain responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Credit Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of the Financing Documents;
provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of
this Credit Agreement described in clause (a), (b) or (c) of
Section 9.05, without the consent of the Participant. An
assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Credit
Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a
proportionate part (such portion to comprise a portion of a
Commitment in an aggregate amount of not less than $5,000,000) of
all of its rights and obligations under this Credit Agreement and
the Notes, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit D hereto executed by such
Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower and the Agent (which consent
shall not unreasonably be withheld); provided that if an Assignee
is an affiliate of such transferor Bank and is not a Foreign
Person, no such consent shall be required. Upon execution and
delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee
shall be a Bank party to this Credit Agreement and shall have all
the rights and obligations of a Bank with a Commitment as set forth
in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for
processing such assignment in the amount of $2,500. If the
Assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall, prior to the first date on
which interest or fees are payable hereunder for its account,
deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income
taxes in accordance with Section 2.13.
(d) Any Bank may at any time assign all or any portion of
its rights under this Credit Agreement and its Notes to a Federal
Reserve Bank. No such assignment shall release the transferor Bank
from its obligations hereunder.
(e) The Borrower agrees that each Participant shall,
to the extent provided in its participation agreement, be entitled
to the benefits of Section 8.03 and 2.11 with respect to its
participating interest; provided that no Participant or other
transferee of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 2.11 (whether individually or
in aggregate with any such payments received by such Bank) than
such Bank would have been entitled to receive with respect to the
rights transferred if such rights had not been transferred, unless
such transfer is made with the Borrower's prior written consent or
by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different applicable lending office under
certain circumstances.
SECTION 9.07 Collateral. Each of the Banks represents to the
Borrower, the Agent and each of the other Banks that it in good faith is not
relying upon any "Margin stock" (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in the Financing
Documents.
SECTION 9.08 Governing Law; Submission to Jurisdiction. This
Credit Agreement and each Note shall be governed by and construed in
accordance with the laws of the State of North Carolina. The Borrower
hereby submits to the nonexclusive jurisdiction of the United States
District Court of the Western District of North Carolina and of any North
Carolina State court sitting in Charlotte for purposes of all legal
proceedings arising out of or relating to this Credit Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 9.09 Counterparts; Integration; Effectiveness. This
Credit Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Credit Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or written, relating
to the subject matter hereof. This Credit Agreement shall become effective
when the Agent shall have received counterparts hereof signed by all of the
parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
ONE PRICE CLOTHING STORES,INC.
By: Stephen A. Feldman
Title: Chief Financial Officer and Treasurer
Address:
One Price Clothing Stores, Inc.
1875 East Main Street
Duncan, South Carolina 29334
Attention: Chief Financial Officer
(with a copy to General Counsel)
Telephone No.: (803) 433-8888
Facsimile No.: (803) 433-9584
NATIONSBANK, N.A.
(CAROLINAS),
in its capacity as
Agent and in its
individual capacity
as a Bank
By: Loy D. Thompson
Title: Senior Vice President
Revolving Loan Commitment: $25,000,000.00
Letter of Credit Commitment: $15,000,000.00
Commitment Percentage: 100%
Address:
NationsBank, N.A. (Carolinas)
NationsBank Corporate Center
Charlotte, North Carolina 28255
Attention: Mark D. Halmrast
Facsimile No.: (704) 386-1270
Telephone No.: (704) 386-0649
RESTATED
BY-LAWS
OF
ONE PRICE CLOTHING STORES, INC.
( a Delaware corporation)
<TABLE>
INDEX
<S> <C> <C>
Page
ARTICLE I. Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. Stockholders' Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.1 Places of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.2 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.3 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.4 Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.5 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.6 List of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.7 Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III. Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Numbers and Qualification . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4 Meetings and Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.5 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6 Conference Telephone Meetings . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.7 Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Titles and Election . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Chairman of the Board of Directors . . . . . . . . . . . . . . . . . . . . . 8
(b) President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.3 Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.4 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. Resignation, Vacancies and Removals . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.1 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.2 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.3 Removals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.1 Certificates of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.2 Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.3 Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.4 Lost Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII. Fiscal Year, Bank Deposits, Checks, Etc. . . . . . . . . . . . . . . . . . . . . 13
Section 7.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.2 Bank Deposits, Checks, Etc. . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.1 Place of Keeping Books . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.2 Examination of Books . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.1 Requirements of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.2 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE X. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE XI. Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16
ARTICLE XII. Indemnification of Directors, Officers and Employees . . . . . . . . . . . . 16
Section 12.1 Action Other Than By or in the Right
of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12.2 Action By or in the Right of the
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12.3 Determination of Right of Indmni-
fication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12.4 Indemnification Against Expenses of
Successful Party . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12.5 Advances of Expenses . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12.6 Right of Agent to Indemnification
Upon Application; Procedure Upon
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12.7 Other Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.9 Indemnity Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.10 Indemnification of Other Persons . . . . . . . . . . . . . . . . . . . . . 21
Section 12.11 Survival of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.12 Saving Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12.13 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XIII. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
ONE PRICE CLOTHING STORES, INC.
BY- LAWS
ARTICLE I
OFFICER
The Corporation shall at all times
maintain a registered office in the State of
Delaware and a registered agent at that address but
may have other offices located in or outside of the
State of Delaware as the Board of Directors may
from time to time determine.
ARTICLE II
Stockholders' Meetings
2.1 Places of Meetings. All meetings of
stockholders shall be held at such place or places
in or outside of the State of Delaware as the Board
of Directors may from time to time determine or as
may be designated in the notice of meeting or
waiver of notice thereof, subject to any
provisions of the laws of the State of Delaware.
2.2 Annual Meetings. The annual meeting of
stockholders for the election of directors and the
transaction of such other business as may properly
come before the meeting shall be held on such date
and at such time as may be designated from time to
time by the Board of Directors within four months
after the end of each fiscal year of the
Corporation. If the annual meeting is not held on
the date designated, it may be held as soon
thereafter as convenient and shall be called the
annual meeting. Written notice of the time and
place of the annual meeting shall be given by mail
to each stockholder entitled to vote thereat at
his address as it appears on the records of the
Corporation not less than ten (10) nor more than
sixty (60) days prior to the scheduled date
thereof, unless such notice is waived as provided
by Article IX of these By-laws.
2.3 Special Meetings. Special meetings of
stockholders may be called at any time by the Board
of Directors or the Chairman of the Board of
Directors stating the specific purpose or purposes
thereof. Written notice of the time, place and
specific purposes of such meeting shall be given by
mail to each stockholder entitled to vote thereat
at his address as it appears on the records of the
corporation not less than ten (10) nor more than
sixty (60) days prior to the scheduled date
thereof, unless such notice is waived as provided
by Article IX of these By-laws.
2.4 Voting. At all meetings of
stockholders, each stockholder entitled to vote on
the record date as determined under Article VI,
Section 6.3 of these By-laws or , if not so
determined, as prescribed under the laws of the
State of Delaware, shall be entitled to one vote
for each share of stock standing of record in his
name, subject to any restrictions or
qualifications set forth in the Certificate of
Incorporation or any amendment thereto.
2.5 Quorum. At any meeting of stockholders,
a majority of the number of shares of stock
outstanding and entitled to vote thereat, present
in person or by proxy, shall constitute a quorum,
but a smaller interest may adjourn any meeting from
time to time, and the meeting may be held as adjourned
without further notice, subject to such limitation
as may be imposed under the laws of the State of
Delaware. When a quorum is present at any meeting,
a majority of the number of shares of stock
entitled to vote present thereat shall decide any
question brought before such meeting unless the
question is one upon which a different vote is
required by express provision of the laws of the
State of Delaware, the Certificate of
Incorporation or these By-laws, in which case such
express provision shall govern.
2.6 List of Stockholders. At least ten
(10) days before every meeting, a complete list of
the stockholders entitled to vote at the meeting,
arranged in alphabetical order and showing the
address of and the number of shares registered in
the name of each stockholder, shall be prepared by
the Secretary or the transfer agent in charge of
the stock ledger of the Corporation. Such list
shall be open for examination by any stockholder,
for any purpose germane to the meeting, during
ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be
held, which place shall be specified in the notice
of the meeting, or, if not specified, at the place
where the meeting is to be held. The list shall
also be produced and kept at the time and place of
the meeting during the whole time thereof, and may
be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to
who are the stockholders.
entitled to examine such list or the books of the
corporation or to vote in person or by proxy at
such meeting.
2.7 Action Without Meeting. Any action
required by the laws of the State of Delaware to be
taken at any annual or special meeting of
stockholders, or any action which may be taken at
any annual or special meeting of stockholders, may
be taken without a meeting, without prior notice
and without a vote, if a consent in writing ,
setting forth the action so taken, shall be signed
by all the holders of outstanding stock entitled to
vote at such meeting.
ARTICLE III
Board of directors
3.1 Powers. The business and affairs of
the corporation shall be carried on by or under the
direction of the Board of Directors, which shall
have all the powers authorized by the laws of the
State of Delaware, subject to such limitations as
may be provided by the Certificate of Incorporation
or these By-laws.
3.2 Number and Qualification. The number
of directors shall be not less than three (3) and
not more than nine (9), the exact number within
such minimum and maximum limits to be fixed and
determined from time to time by resolution of a
majority of the Board of Directors. Each director
shall serve until the election and qualification of
his successor or until his earlier resignation or
removal as provided in the Certificate of
Incorporation or these By-laws. In case of an
increase in the number of directors between
elections by the stockholders, the additional
directorships shall be considered vacancies and
shall be filled in the manner prescribed in Article
V of these By-laws. Directors need not be
stockholders.
3.3 Compensation. The Board of Directors,
or a committee thereof, may from time to time by
resolution, including, but not limited to, fees for
attendance at all meetings of the Board of
Directors or any committee thereof, and determine
the amount of such fees and compensation.
3.4 Meeting and Quorum. Meetings of the
Board of Directors may be held either in or outside
of the State of Delaware. A quorum shall be one-
third (1/3) of the then authorized number of
directors, but not less than two (2) directors.
The Board of Directors shall, at the close of
each annual meeting of stockholders and without
further notice other than these By-laws, if a
quorum of directors is then present or as soon
thereafter as may be convenient, hold regular
meeting for the election of officers and the
transaction of any other business.
The Board of Directors may from time to time
provide for the holding of regular meetings with or
without notice and may fix the times and places at
which such meetings are to be held. Meetings other
than regular meetings may be called at any time by
the Chairman of the Board of Directors of the
President and must be called by the Secretary or an
Assistant Secretary upon the request of a majority of the
Board of Directors.
Notice of each meeting other than a regular
meeting (unless required by the Board of
Directors), shall be given to each director by
mailing the same to each director at his residence
or business address at least two (2) days before
the meeting or by delivering the same to him
personally or by telephone or telegraph at least
one (1) day before the meeting unless, in case of
exigency, the Chairman of the Board of Directors,
the President or the Secretary shall prescribe a
shorter notice to be given personally or by
telephone, telegraph, cable or wireless to all or
any one or more of the directors at their
respective residences or places of business.
Notice of any meeting shall state the time
and place of such meeting, but need not state the
proposes thereof unless otherwise required by the
laws of the State of Delaware, the Certificate of
Incorporation or the Board of Directors.
3.5 Committees. The Board of Directors
may, by resolution adopted by a majority of the
whole Board of Directors, provide for committees of
two or more directors and shall elect the members
thereof to serve at the pleasure of the Board of
Directors and may at any time change the membership
of each committee, fill vacancies in it, authorize
the committee to fill vacancies in such committee,
designated alternate members to replace any absent or
disqualified members at any meeting of such Committee,
or dissolve it. Each such committee shall have the powers
and preform such duties, not inconsistent with law, as may
be assigned to it by the Board of Directors. Each committee
may determine its rules of procedure and the notice to be
given of its meeting. A majority of the members of each
committee shall constitute a quorum.
3.6 Conference Telephone Meetings. Any
one or more members of the Board of Directors or
any committee thereof may participate in a meeting
by means of a conference telephone or similar
communication equipment by means of which all
persons participating in the meeting can hear each
other, and such participation in a meeting shall
constitute presence in person at such meeting.
3.7 Action Without Meeting. Any action
required or permitted to be taken at any meeting of
the Board of Directors or any committee thereof may
be taken without a meeting of all members of the
Board of Directors or committee, as the case may
be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings
of the Board of Directors or committee.
ARTICLE IV
OFFICERS
4.1 Titles and Election. The officers of
the Corporation shall be the President, one or more
Vice Presidents, the Secretary and the Treasurer.
The officers of the Corporation shall initially be
elected as soon as convenient by the Board of
Directors and thereafter, in the absence of earlier
resignations or removals, shall be elected at the
first meeting of the Board of Directors following
each annual meeting of stockholders. Each officer
shall hold office at the pleasure of the Board of
Directors except as may otherwise be approved by
the Board of Directors, or until his earlier
resignation, removal under these By-laws or other
termination of his employment. Any person may hold
more than one office if the duties can be
consistently performed by the same person.
The Board of Directors, in its discretion,
may also at any time elect or appoint a Chairman of
the Board of Directors, Assistant Secretaries and
Assistant Treasures and such other officers as it
may deem advisable, each of whom shall hold office
at the pleasure of the Board of Directors or until
his earlier resignation, removal or other
termination of employment, and shall have such
authority and shall perform such duties as may be
prescribed or determined from time to time by the
Board of Directors or , in case of officers other
than the Chairman of the Board of Directors as the
President or the then senior executive officer may
prescribe or determine.
4.2 Duties. Subject to such extension,
limitations, and other provisions as the Board of
Directors may from time to time prescribe or
determine, the following officers shall have the
following powers and duties:
(a) Chairman of the Board of Directors.
The Chairman of the board of Directors, if one is
elected, shall be a director and , when present,
shall preside at all meetings of the stockholders
and of the Board of Directors and shall be charged
with general supervision of the management and
policy of the Corporation and shall have such other
powers and perform such other duties as the Board
of Directors may prescribe from time to time.
Pursuant to the foregoing provision, the Board of
Directors in its discretion may appoint the
Chairman of the Board of Directors as Chief
Executive Officer of the Corporation.
(b) President. The President, if one is
elected, shall be the chief operating officer of
the Corporation, shall exercise the power and
authority and perform all of the duties commonly
incident to his office, shall in the absence of the
Chairman of the Board of Directors preside at all
meetings of the stockholders and of the Board of
Directors if he is a director, and shall perform
such other duties as the Board of Directors may
specify from time to time. Pursuant to the
foregoing provision, the Board of Directors in its
discretion may appoint the President as Chief
Executive Office of the Corporation. The
President or a Vice President, or any officer
specifically authorized by the Board of Directors,
shall sign all certificates for shares, bonds,
debentures, promissory notes, deeds and contracts
of the Corporation.
(c) Vice President. The Vice President or
Vice Presidents shall perform such duties as may be
assigned to them from time to time by the Board of
Directors or by the President if the Board of
Directors does not do so. In the absence or
disability of the President, the Vice Presidents in
order of seniority may, unless otherwise determined
by the Board of Directors, exercise the powers and
perform the duties pertaining to the office of
President.
(d) Secretary. The Secretary, or in his
absence an Assistant Secretary, shall keep the
minutes of all meetings of stockholders and of the
Board of Directors and any committee thereof, give
and serve all notices, attend to such
correspondence as may be assigned to him, keep in
safe custody the seal of the Corporation, and affix
such seal to all such instruments properly executed
as may reacquire, and shall perform all of the
duties commonly incident to his office and shall
have such other duties and powers as may be
prescribed or determined from time to time by the
Board of Directors or by the President if the Board
of Directors does not do so.
(e) Treasurer. The Treasurer, subject to
the order of the Board of Directors, shall have the
care and custody of the monies, funds, and
securities of the Corporation (other than his own
bond, if any, which shall be in the custody of the
President), shall maintain the general accounting
book/accounting records and forms of the
Corporation and shall have, under the supervision
of the Board of Directors, all the powers and
duties commonly incident to his office. In
addition to the foregoing, the Treasurer shall have
such duties as may be prescribed or determined from
time to time by the Board of Directors of by the
President if the Board of Directors does not do so.
4.3 Delegation of Authority. The Board of
Directors may at any time delegate the powers and
duties of any officer for the time being to any
other officer, director or employee.
4.4 Compensation. The compensation of the
officers of the corporation shall be fixed by the
Board of Directors or a committee thereof, and the
fact that any officer is a director shall not
preclude him form receiving compensation or from
voting upon the resolution providing the same.
ARTICLE V
Resignations, Vacancies and Removals
5.1 Resignations. Any director or officer
may resign at any time by giving written notice
thereof to the Board of Directors, the President or
the Secretary. any such resignation shall take
effect at the time specified therein or , if the
time be not specified, upon receipt thereof; and
unless otherwise specified therein, the acceptance
of any resignation shall not be necessary to make
it effective.
5.2 Vacancies.
(a) Directors. Any vacancy in the
Board of Directors caused by reason of death,
incapacity, resignation, removal, increase in the
authorized number of directors or otherwise, shall
be filled by a majority vote of the remaining
directors though less than a quorum, or by the
sole remaining director. Any director so filling
such a vacancy shall serve until the next annual
meeting of stockholders and until election and
qualification of his successor or until his earlier
resignation or removal.
(b) Officers. The Board of Directors
may at any time or from time to time fill any
vacancy among the officers of the Corporation.
5.3 Removals.
(a) Directors. The entire Board of
Directors, or any individual member thereof, maybe
removed, with or without cause, by the holders of a
majority of the shares of capital stock then
entitled to vote at an election of directors.
(b) Officers. Subject to the
provisions of any validly existing agreement, the
Board of Directors may at any meeting remove from
office any officer, with or without cause, and may
appoint a successor.
ARTICLE VI
Capital Stock
6.1 Certificates of Stock. Every
stockholder shall be entitled to a certificate or
certificates for shares of the capital stock of the
Corporation in such form as may be prescribed or
authorized by the Board of Directors, duly numbered
and setting forth the number and kind of shares
represented thereby. Such certificates shall be
signed by the Chairman of the Board of Directors,
or by the President or a Vice President and by the
Treasurer or an Assistant Treasurer or by the
Secretary or an Assistant Secretary. Any or all
of such signatures may be in facsimile. In case
any officer, transfer agent or registrant who has
signed or whose facsimile signature has been placed
on a certificate has ceased to be such officer,
transfer agent or registrar before the certificate
has been issued, such certificate may nevertheless
be issued and delivered by the Corporation with the
same effect as if he were such officer, transfer
agent or registrar at the date of issue.
6.2 Transfer of Stock. Shares of the
capital stock of the Corporation shall be
transferable only upon the books of the Corporation
upon the surrender of the certificate or
certificates properly assigned and endorsed for
transfer. If the corporation has a transfer agent
or registrar acting on its behalf, the signature of
any officer or representative thereof may be in
facsimile. The Board of Directors may appoint a
transfer agent and one or more co-transfer agents
and a registrar and one or more co-registrars and
may make or authorize such agents to make all such
rules and regulations deemed expedient concerning
the issuance, transfer and registration of shares
of stock.
6.3 Record Dates. In order that the
Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to
express consent to corporate action in writing
without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful
action, the Board of Directors may fix in advance a
record date which, in the case of a meeting, shall
not be less than ten (10) nor more than sixty (60)
days prior to the scheduled date of such meeting
and which, in the case of any other action, shall
be not more than sixty (60) days prior to any such
action permitted by the laws of the State of
Delaware. A determination of stockholders of
record entitled to notice of or to vote at a
meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that
the Board of Directors may fix a new record date
for the adjourned meeting.
6.4 Lost Certificates. In case of loss or
mutilation or destruction of a stock certificate, a
duplicate certificate may be issued upon such terms
as may be determined or authorized by the Board of
Directors or by the President if the Board of
Directors does not do so.
ARTICLE VII
Fiscal Year Bank Deposits, Checks, Etc.
7.1 Fiscal Year. The fiscal year of the
Corporation shall be the calendar year unless
otherwise fixed by resolution of the Board of
Directors.
7.2 Bank Deposit, Checks, Etc.. The funds
of the Corporation shall be deposited in the name
of the Corporation or of any division thereof in
such banks or trust companies in the United States
or elsewhere as may be designated from time to time
by the Board of Directors, or by such officer or
officers as the Board of Directors may authorize
to make such designations.
All checks, drafts or other orders for the
withdrawal of funds from any bank account shall be
signed by such person or persons as may be
designated from time to time by the Board of
Directors. The signatures on checks, drafts or
other orders for the withdrawal of funds may be in
facsimile if authorized in the designation.
ARTICLE VII
Books and Records
8.1 Place of Keeping Books. The books and
records of the corporation may be kept outside of
the State of Delaware.
8.2 Examination of Books. Except as may
otherwise be provided by the laws of the State of
Delaware, the Certificate of Incorporation or these
By-laws, the Board of Directors shall have the
power to determine from time to time whether and to
what extent and at what times and places and under
what conditions any of the accounts, records and
books of the Corporation are to be open to the
inspection of any stockholder. No stockholder
shall have any right to inspect any account or book
or document of the Corporation except as
prescribed by law or authorized by express
resolution of the stockholders or of the Board of
Directors.
ARTICLE IX
Notices
9.1 Requirements of Notice. Whenever
notice is required to be given by statute, the
Certificate of Incorporation or these By-laws, it
shall not mean personal notice unless so specified,
but such notice may be given in writing by
deposition the same in a post office, letter box,
or mail chute postage prepaid and addressed to the
person to whom such notice is directed at the
address of such person on the records of the
Corporation, and such notice shall be deemed given
at the time when the same shall be thus mailed.
9.2 Waivers. Any stockholder, director or
officer may, in writing or by telegram or cable, at
any time waive any notice or other formality
required by statute, the Certificate of
Incorporation or these By-laws. Such waiver of
notice, whether given before or after any meeting
or action shall be deemed equivalent to notice.
Presence of a stockholder either in person or by
proxy at any meeting of stockholders and presence
of any director at any meeting of the Board of
Directors shall constitute a waiver of such notice
as may be required by any statute, the Certificate
of Incorporation or these By-laws.
ARTICLE X
Seal
The corporate seal of the Corporation shall
be in such form as the Board of Directors shall
determine from time to time and may consist of a
facsimile thereof or the words "Corporate Seal" or
"Seal" enclosed in parentheses.
ARTICLE XI
Powers of Attorney
The Board of Directors may authorize one or more of
the officers of the Corporation to execute powers
of attorney delegating to named representatives or
agents power to represent or act on behalf of the
Corporation, with or without power of substitution.
In the absence of any action by the Board of
Directors, any officer of the Corporation may
execute for and on behalf of the Corporation
waivers of notice of meeting of stockholders and
proxies for such meetings of any company in which
the Corporation may hold voting securities.
ARTICLE XII
Indemnification of Directors, Officers and
Employees
12.1 Action Other Than by or in the Right of the
Corporation. Subject to Section 12.3 hereof, the
Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to
any threatened, pending or completed action, suit
or proceeding , whether civil, criminal,
administrative, and whether external or internal to
the Corporation, (other than a judicial action or
suit brought by or in the right of the Corporation)
by reason of the fact that he is or was a director
or officer of the Corporation, or is or was serving
at the request of the corporation as a director or
officer of another corporation, partnership, joint
venture, trust or other enterprise (all such
persons being referred to hereafter as an "Agent"),
against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement
actually and reasonable incurred by him in
connection with such action, suit or proceeding if
he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the
best interest of the Corporation, and with respect
to any criminal action or proceeding, had no
reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or
proceeding by judgment, order settlement,
conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a
presumption that the person did not act in good
faith and in a manner which he reasonably believed
to be in or not opposed to the best interest of the
Corporation, and with respect to any criminal
action or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
12.2 Action by or in the Right of the
Corporation. The Corporation shall indemnify any
person who was or is a party or is threatened to be
made a party to any threatened, pending or
completed judicial action or suit brought by or in
the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or
was an Agent against expenses (including attorneys'
fees) actually and reasonably incurred by him in
connection with the defense or settlement of such
action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not
opposed to the best interest of the Corporation,
except that no indemnification shall be made in
respect of any claim, issued or matter as to which
such person shall have been adjudged to be liable
to the Corporation unless and only to the extent
that the Court of Chancery or the court in which
such action or suit was brought shall determine
upon application that, despite the adjudication of
liability but in view of all the circumstances of
the case, such person is fairly and reasonably
entitled to indemnity of such expenses which the
Court of Chancery or other such court shall deem
proper.
12.3 Determination of Right of
Indemnification. Any indemnification under
Section 12.1 or 12.2 hereof (unless ordered by a
court) shall be made by the Corporation unless a
determination is reasonably and promptly made (i)
by the Board of Directors by a majority vote of a
quorum consisting of directors who are or were not
parties to such action, suite or proceeding, or
(ii) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel
in a written opinion, or (iii) by the stockholders,
that such person acted in bad faith and in a manner
that such person did not believe to be in or not
opposed to the best interests of the Corporation,
or , with respect to any criminal proceeding, that
such person believed or had reasonable cause to
believe that his conduct was unlawful.
12.4 Indemnification Against Expense of
Successful Party. Notwithstanding the other
provisions of this Article XII, to the extent that
an Agent has been successful on the merits or
otherwise, including the dismissal or an action
without prejudice or the settlement of an action
without admission of liability, in defense of any
proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified
against all expenses incurred in connection
therewith.
12.5 Advances of Expenses. Except as
limited by Section 12.6 hereof, expenses incurred
in defending or investigating any action, suit
proceeding or investigation shall be paid by the
Corporation in advance of the final disposition of
such matter, if the Agent shall undertake to repay
such amount in the event that is ultimately
determined, as provided herein , that such person
is not entitled to indemnification. However, no
advance shall be made by the Corporation if a
determination is reasonably and promptly made by
the Board of Directors by a majority vote of a
quorum of disinterested directors, or (if such a
quorum is not obtainable or , even if obtainable, a
quorum if disinterested directors so directs) by
independent legal counsel in a written opinion,
that, based upon the facts known to the Board of
Directors or counsel at the time such determination
is made, such person acted in bad faith and in a
manner that such person did not believe to be in or
not opposed to the best interests of the
Corporation, or , with respect to any criminal
proceedings, that such person believed or had
reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in
instances where the Board of Directors or
independent legal counsel reasonably determines
that such person deliberately breached his duty to
the Corporation or its stockholders.
12.6 Right of Agent to Indemnification Upon
Application; Procedure Upon Application. Any
indemnification under Section 12.2, 12.3, and 12.4
hereof, or advance under Section 12.5 hereof, shall
be made promptly and in any event within 45 days,
upon the written request of the Agent, unless with
respect to applications under Section 12.2, 12.3,
or 12.5 hereof, a determination is reasonably and
promptly made by the Board of Directors by a
majority vote of a quorum of disinterested
directors that such Agent acted in a manner set
forth in such Sections as to justify the
Corporation's not indemnifying or making an advance
to the Agent. In the event no quorum if
disinterested directors is obtainable, the board of
Directors shall promptly direct that independent
legal counsel shall decide whether the Agent acted
in the manner set forth in such Sections as to
justify the Corporation's not indemnifying or
making and advance to the Agent. The right to
indemnification or advances as granted by this
Article XII shall be enforceable by the Agent in
any court of competent jurisdiction of the Board of
Directors or independent legal counsel denies the
claim, in whole or in part, or if no disposition of
such claim is made within 45 days. The Agent's
expenses incurred in connection with successfully
establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be
indemnified by the Corporation.
12.7 Other Rights and Remedies. The
indemnification provided by his Article XII shall
not be deemed exclusive of any other rights to
which an Agent seeking indemnification may be
entitled under any agreement, vote of stockholders
or disinterested directors, court order or
otherwise, both as to action in his official
capacity and as to action in another capacity while
holding such office. It is the policy of the
Corporation that indemnification of Agents shall be
made to the fullest extent permitted by law. All
rights to indemnification under this Article XII
shall be deemed to be provided by a contract
between the Corporation and the Agent who serves in
such capacity at any time while these By-laws and
other relevant provisions of the General
Corporation Law of the State of Delaware and other
applicable law, if any, are in effect Any repeal
or modification thereof shall not affect any rights
or obligations then existing.
12.8 Insurance. The corporation may
purchase and maintain insurance on behalf of any
person who is or was an Agent against any liability
asserted against him and incurred by him in any
such capacity, or arising out of his status as
such, whether or not the Corporation would have the
power to indemnify him against such liability under
the provisions of his Article XII.
12.9 Indemnity Fund. Upon resolution
adopted by the Board of Directors, the corporation
may establish a trust or other designated account,
grant a security interest or use other means
(including, without limitation, a letter of
credit), to ensure the payment of certain of its
obligations arising under this Article XII and/or
agreements which may be entered into between the
Corporation and its officers and directors from
time to time.
12.10 Indemnification of Other Persons. The
provisions of this Article XII shall not be deemed
to preclude the indemnification of any person who
is not an agent but whom the corporation has the
power or obligation to indemnify under the
provisions of the General Corporation Law of the
State of Delaware or other vise. The Corporation
may, in its sole discretion, indemnify an employee,
trustee or other agent as permitted by the General
Corporation Law of the State of Delaware. The
Corporation shall indemnify an employee, trustee or
other agent where required by law.
12.11 Survival of Indemnification. The
indemnification and advancement of expenses
provided by, or granted pursuant to, this Article
XII shall continue as to a person who has ceased to
be an Agent and shall inure to the benefit of the
heirs, executors and administrators of such Agent.
12.12 Savings Clause. If this Article XII
or any portion thereof shall be invalidated on any
ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each
Agent against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding,
whether civil, criminal, administrative or
investigative, and whether internal or external,
including a grand jury proceeding and an action or
suit brought by or in the right of the
Corporation, to the full extent permitted by any
applicably portion of this Article XII that shall
not have been invalidated, or by any other
applicable law.
12.13 Certain Definitions. For purposes of
this Article XII, references to "the Corporation"
shall include, in addition to the resulting or
surviving corporation, any constituent corporation
(including any constituent of a constituent
absorbed in a consolidation or merger which, if its
separate existence had continued, would have had
power to indemnify its directors, officers and
employees or agents, so that any person who is or
was a director, officer, employee or agent of such
constituent corporation, or is or was serving at
the request of such constituent corporation as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position
under this Article XII with respect to the
resulting or surviving corporation as he would have
with respect to such constituent corporation if its
separate existence had continued; references to
"other enterprises" shall include employee benefit
plans; references to "fines" shall include any
excise taxes assessed a person with respect to any
employee benefit plan; and references to "serving
at the request of the Corporation" shall include
any service as a director or officer of the
Corporation which imposes duties on, or involves
services by, such director or officer with respect
to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith
and in a manner he reasonable believed to be in the
interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best
interests of the Corporation" as referred to in
this Article XII.
ARTICLE XIII
Amendments
These By-laws may be amended or repealed either:
(a) at any meeting of stockholders at which a
quorum is present by vote of a majority of the
number of shares of stock entitled to vote present
in person or by proxy at such meeting as provided
in Article II, Sections 2.5 and 2.6 of these By-
laws, or
(b) at any meeting of the Board of Directors
by a majority vote of the directors then in office;
provided that the notice of such meeting of
stockholders or directors or waiver of notice
thereof contains a statement of the substance of
the proposed amendment or repeal.
AMENDMENT TO BY-LAWS
OF
ONE PRICE CLOTHING STORES, INC.
ADOPTED JULY 20, 1994
Article II, Shareholders' Meetings is hereby
amended by adding the
following new Section 2.8:
2.8 Notice of Shareholders Proposals. Any
shareholder desiring to submit a proposal to an
annual or special meeting of shareholders shall
submit information regarding the proposal, together
with the proposal to the corporation at least 45
days prior to the shareholders meeting at which
such proposal is to be presented.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 362
<SECURITIES> 0
<RECEIVABLES> 907
<ALLOWANCES> 189
<INVENTORY> 26337
<CURRENT-ASSETS> 31252
<PP&E> 48996
<DEPRECIATION> 13606
<TOTAL-ASSETS> 67930
<CURRENT-LIABILITIES> 13035
<BONDS> 0
<COMMON> 103
0
0
<OTHER-SE> 52971
<TOTAL-LIABILITY-AND-EQUITY> 67930
<SALES> 283326
<TOTAL-REVENUES> 283326
<CGS> 170066
<TOTAL-COSTS> 170066
<OTHER-EXPENSES> 23822
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 271
<INCOME-PRETAX> 7138
<INCOME-TAX> 2749
<INCOME-CONTINUING> 4389
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4389
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
<TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 11 -- STATEMENT RE: Computation of Per Share Earnings
<S> <C> <C> <C>
December 31, January 1, January 2,
1994 1994 1993
PRIMARY
Average shares outstanding 10,287,727 10,167,537 10,020,203
Net effect of dilutive stock options-
based on the treasury stock method
using the average market price 237,251 236,313 283,726
TOTAL 10,524,978 10,403,850 10,303,929
Net income $ 4,389,000 $ 8,724,000 $ 6,846,000
Net income per share $ 0.42 $ 0.84 $ 0.66
FULLY DILUTED
Average shares outstanding 10,287,727 10,167,537 10,020,203
Net effect of dilutive stock options -
based on the treasury stock method
using the greater of ending or
average market price 239,083 316,067 333,912
TOTAL 10,526,810 10,483,604 10,354,115
Net income $ 4,389,000 $ 8,724,000 $ 6,846,000
Net income per share $ 0.42 $ 0.83 $ 0.66
Note: Net income per share for the year ended January 1, 1994 was reported as $0.84 due to the immaterial difference
between fully diluted and primary net income per share.
</TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 21 -- Subsidiary Of The Registrant
On February 9, 1994, a subsidiary of the Company, One Price Clothing of
Puerto Rico, Inc. was incorporated in Puerto Rico.
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
EXHIBIT 23 - Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statements No. 33-20529, 33-31623 and 33-48091 on Form S-8
pertaining to the 1987 Stock Option Plan, the 1988 Stock Option
Plan, and the 1991 Stock Option Plan, respectively, of One Price
Clothing Stores, Inc. of our report dated February 10, 1995
(February 28,1995 as to Note B), appearing in Form 10-K of
One Price Clothing Stores, Inc. for the year ended December 31,
1994.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
March 27, 1995
