UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended November 2, 1996
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to _____________
Commission File Number: 0-21360
Shoe Carnival, Inc.
(Exact name of registrant as specified in its charter)
Indiana 35-1736614
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
8233 Baumgart Road
Evansville, Indiana 47711
(Address of principal executive offices) (Zip Code)
(812) 867-6471
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Common Stock, no par value, 13,027,656 shares outstanding as of November 30,
1996.
<PAGE> 1
Shoe Carnival, Inc.
Index to Financial Statements
Page
----
Part I Financial Information
Item 1 - Financial Statements (Unaudited)
Condensed Balance Sheets 3
Condensed Statements of Income 4
Condensed Statement of Shareholders' Equity 5
Condensed Statements of Cash Flows 6
Notes to Condensed Financial Statements 7-8
Item 2 - Management's Discussion and Analysis 9-13
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
2
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SHOE CARNIVAL, INC.
CONDENSED BALANCE SHEETS
Unaudited
November 2, February 3, October 28,
1996 1996 1995
----------- ----------- -----------
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,414 $ 900 $ 1,083
Accounts receivable 930 986 676
Notes receivable from shareholders 40 40 42
Merchandise inventories 65,759 62,699 70,979
Deferred income tax benefit 797 1,820 941
Other 333 4,660 1,870
-------- -------- --------
Total Current Assets 69,273 71,105 75,591
Property and equipment-net 30,686 31,160 30,579
-------- -------- --------
Total Assets $ 99,959 $102,265 $106,170
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 14,239 $ 12,783 $ 10,051
Accrued and other liabilities 6,601 7,504 4,414
Current portion of long-term debt 676 612 581
-------- -------- --------
Total Current Liabilities 21,516 20,899 15,046
Long-term debt 12,398 18,922 18,737
Deferred lease incentives 1,514 1,948 1,962
Deferred income taxes 910 925 2,122
-------- -------- --------
Total Liabilities 36,338 42,694 37,867
-------- -------- --------
Shareholders' Equity:
Common stock, no and $.10 par value,
50,000 shares authorized, shares
issued and outstanding 13,028 at
November 2, 1996 and 13,019 at
February 3, 1996 and October 28, 1995 0 1,302 1,302
Additional paid-in capital 61,378 60,035 60,035
Retained earnings (deficit) 2,243 (1,766) 6,966
-------- -------- --------
Total Shareholders' Equity 63,621 59,571 68,303
-------- -------- --------
Total Liabilities and Shareholders'
Equity $ 99,959 $102,265 $106,170
======== ======== ========
See Notes to Condensed Financial Statements
3
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SHOE CARNIVAL, INC.
CONDENSED STATEMENTS OF INCOME
Unaudited
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
----------- ----------- ----------- -----------
(In thousands, except per share data)
Net sales $ 63,882 $ 60,166 $ 179,687 $ 170,712
Cost of sales (including
buying, distribution and
occupancy costs) 44,864 43,882 128,392 125,388
---------- ---------- ---------- ----------
Gross profit 19,018 16,284 51,295 45,324
Selling, general and
administrative expenses 15,047 14,784 43,482 41,451
---------- ---------- ---------- ----------
Operating income 3,971 1,500 7,813 3,873
Interest expense, net 248 367 1,019 1,201
---------- ---------- ---------- ----------
Income before income
taxes 3,723 1,133 6,794 2,672
Income taxes 1,526 499 2,785 1,130
---------- ---------- ---------- ----------
Net income $ 2,197 $ 634 $ 4,009 $ 1,542
========== ========== ========== ==========
Net income per share $ .17 $ .05 $ .31 $ .12
========== ========== ========== ==========
Weighted average common
shares and common
equivalent shares
outstanding 13,027,648 13,028,582 13,022,427 13,034,574
========== ========== ========== ==========
See Notes to Condensed Financial Statements
4
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SHOE CARNIVAL, INC.
CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
Unaudited
Common Stock Additional Retained
---------------- Paid-In Earnings
Shares Amount Capital (Deficit) Total
------ ------ ------- -------- -----
(In thousands)
Balance at February 3, 1996 13,019 $1,302 $60,035 $(1,766) $59,571
Employee Stock Purchase
Plan purchases 9 41 41
Elimination of par value (1,302) 1,302
Net income 4,009 4,009
------ ------ ------- ------- -------
Balance at November 2, 1996 13,028 $ 0 $61,378 $ 2,243 $63,621
====== ====== ======= ======= =======
See Notes to Condensed Financial Statements
5
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SHOE CARNIVAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
November 2, October 28,
1996 1995
----------- -----------
(In thousands)
Cash flows from operating activities:
Net income $ 4,009 $ 1,542
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,870 3,410
Loss on retirement of assets 274 0
Deferred income taxes 1,008 257
Other (132) (185)
Changes in operating assets and liabilities:
Merchandise inventories (3,060) (609)
Accounts receivable 3,582 (114)
Accounts payable and accrued liabilities 1,765 (176)
Other 799 1,578
-------- --------
Net cash provided by operating activities 12,115 5,703
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (4,719) (3,010)
Notes from shareholders 0 32
Lease incentives (303) 444
Other 2 7
-------- --------
Net cash used in investing activities (5,020) (2,527)
-------- --------
Cash flows from financing activities:
Borrowings under lines of credit 138,900 81,425
Payments on lines of credit (145,050) (84,825)
Payments on capital lease obligations (472) (452)
Proceeds from issuance of stock 41 0
-------- --------
Net cash used in financing activities (6,581) (3,852)
-------- --------
Net increase (decrease) in cash and cash equivalents 514 (676)
Cash and cash equivalents at beginning of period 900 1,759
-------- --------
Cash and cash equivalents at end of period $ 1,414 $ 1,083
======== ========
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ 1,096 $ 1,377
Cash paid (refunded) during period for income taxes $ (2,207) $ 534
Supplemental disclosure of noncash investing activities:
Capital lease obligations incurred $ 162 $ 146
See Notes to Condensed Financial Statements
6
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SHOE CARNIVAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Unaudited
Note 1 - Basis of Presentation
- ------------------------------
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments necessary to present fairly the
financial position of the Company and the results of its operations and its
cash flows for the periods presented. Certain information and disclosures
normally included in notes to financial statements have been condensed or
omitted according to the rules and regulations of the Securities and Exchange
Commission, although the Company believes that the disclosures are adequate to
make the information presented not misleading.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year.
It is suggested that these financial statements be read in conjunction
with the financial statements and financial notes thereto included in the
Company's 1995 Annual Report.
Note 2 - Long-Term Debt
- -----------------------
During fiscal 1995, the Company had an unsecured $40 million credit agreement
(the "Credit Agreement") with a bank group which provided for a $30 million
revolving line of credit and a $10 million line of credit reserved for the
issuance of letters of credit. The Company was in violation of certain
financial ratio covenants contained in the Credit Agreement for the year ended
February 3, 1996. These covenant violations were waived by the bank group on
April 3, 1996.
On April 10, 1996, the Credit Agreement, including the financial covenants
contained therein, was amended, reducing the total credit facility to $35
million. Sublimits for cash borrowings and letter of credit issuances were
eliminated under the amended Credit Agreement. Borrowings are based on
eligible inventory and bear interest, at the Company's option, at the agent
bank's prime rate or the applicable London Inter-Bank Offered Rate (LIBOR)
plus from 1.0% to 2.0%, depending on the Company's achievement of certain
performance criteria. A commitment fee of .25% per annum is charged on the
unused portion of the first $30 million of the bank group's commitment. The
Credit Agreement contains various restrictive and financial covenants,
including the maintenance of specific financial ratios, and a limitation on
the payment of dividends. The most restrictive covenant limits capital
expenditures to $8 million in fiscal 1996. The Company was in compliance with
all covenants in the amended agreement for the first three quarters of 1996,
and expects to maintain compliance for the remainder of fiscal 1996. The
Credit Agreement expires on November 14, 1997.
7
<PAGE> 7
Note 3 - Restructuring Charge
- -----------------------------
In the fourth quarters of 1995 and 1994, the Company recorded restructuring
charges related to its plan to close a total of nine unprofitable stores. Of
the nine stores, one was closed in January 1995, six in the first half of
1996 and one in September 1996. The remaining store is expected to be closed
during the fourth quarter of 1996. An analysis of the amounts charged against
the reserve are outlined in the following table:
Thirteen
Weeks Ended
November 2, 1996
----------------
(In thousands)
Restructuring reserve at August 3, 1996 $1,303
Costs applied against reserve:
Store closing and lease termination costs (286)
Equipment and leasehold improvements
write-offs (177)
------
Restructuring reserve at November 2, 1996 $ 840
======
Sales generated by the eight stores which have either been closed or are
expected to be closed were $373,000 in the third quarter of 1996 and $3.6
million for the first nine months of 1996, compared to $2.7 million in the
third quarter of 1995 and $7.2 million for the first nine months of 1995. An
aggregate loss of approximately $120,000 was incurred in the operation of
these eight stores in the third quarter of 1996 and $1.3 million for the first
nine months of 1996, compared to an aggregate loss of approximately $300,000
incurred by these stores in the third quarter of 1995 and $1.0 million for the
first nine months of 1995.
The restructuring charges include management's best estimates of amounts
required to be paid for store closing and lease termination costs. The total
amount of the cash payments ultimately required could differ from the amounts
recorded.
Note 4 - Stock Option and Incentive Plan
- ----------------------------------------
On September 19, 1996, the Stock Option Committee granted options for an
aggregate of 327,500 shares of the Company's common stock to certain officers
and key employees. Each option was granted at an exercise price of $5.375,
which was market price at the date of grant and has a term of 10 years. The
options become exercisable in thirds on April 1 of 1997, 1998 and 1999. In
conjunction with the stock option grant, previously granted options for
226,000 shares of the Company's common stock with exercise prices ranging from
$7.00 to $14.50 were canceled.
8
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Number of Stores Store Square Footage
------------------------------ --------------------
Beginning End Of Net End of Comparable
Quarter Ended of Period Opened Closed Period Change Period Store Sales
- -------------- --------- ------ ------ ------ ------- --------- -----------
May 4, 1996 95 2 4 93 (2,000) 1,022,000 (4.4%)
August 3, 1996 93 2 2 93 2,000 1,024,000 (3.2%)
November 2, 1996 93 1 1 93 2,000 1,026,000 2.7%
Year-to-date 95 5 7 93 2,000 1,026,000 (1.6%)
April 29, 1995 87 3 1 89 22,000 962,000 (9.2%)
July 29, 1995 89 0 0 89 0 962,000 (5.4%)
October 28, 1995 89 2 0 91 20,000 982,000 (10.4%)
Year-to-date 87 5 1 91 42,000 982,000 (8.2%)
Restructuring
- -------------
In the fourth quarter of 1995 the Company's management adopted a plan to close
eight unprofitable stores during its 1996 fiscal year. Seven stores have been
closed in the first nine months of 1996.
The reserve established for expected restructuring costs was $3.5 million at
February 3, 1996. Costs incurred by the Company and applied against such
reserve were $2.6 million in the first nine months of 1996, including $1.2
million for the write-off of fixed assets. Cash expenditures for lease
termination and store closing costs and the repayment of lease incentives were
$1.7 million in the first nine months. (See Note 3 of Notes to Condensed
Financial Statements)
The restructuring charges include management's best estimates of amounts
required to be paid for store closing and lease termination costs. The total
amount of the cash payments ultimately required could differ from the amounts
recorded.
9
<PAGE> 9
The following table sets forth the Company's results of operations expressed
as a percentage of net sales for the periods indicated:
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
-------------- ------------- -------------- -------------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales (including
buying, distribution and
occupancy costs) 70.2 72.9 71.4 73.5
------ ------ ------ ------
Gross profit 29.8 27.1 28.6 26.5
Selling, general and
administrative expenses 23.6 24.6 24.2 24.2
------ ------ ------ ------
Operating income 6.2 2.5 4.4 2.3
Interest expense .4 .6 .6 .7
------ ------ ------ ------
Income before income taxes 5.8 1.9 3.8 1.6
Income taxes 2.4 .8 1.6 .7
------ ------ ------ ------
Net income 3.4% 1.1% 2.2% .9%
====== ====== ====== ======
Net Sales
- ---------
Net sales increased $3.7 million to $63.9 million in the third quarter of
1996, a 6.2% increase over net sales of $60.2 million in the comparable prior
year period. The increase was attributable to sales generated by nine new
stores opened in 1995 and the five new stores opened in 1996 and a comparable
store sales increase of 0.2% when compared to the thirteen week quarter ended
October 28, 1995, partially offset by the reduction in sales for the seven
stores closed during the first nine months of 1996. Due to the inclusion of
53 weeks in the Company's 1995 fiscal year, the ending date of each quarter in
1996 is one week later than the ending date of each quarter in 1995. On a
comparable week basis, comparable store sales increased by 2.7%. Comparable
store sales results exclude in both years the sales generated by stores the
Company has either closed or expects to close in 1996. Sales of private label
and non-name brand footwear constituted 16.9% of total footwear sales in the
third quarter of 1996 as compared with 16.7% in the prior year quarter.
Net sales increased $9.0 million to $179.7 million in the first nine months of
1996, a 5.3% increase over net sales of $170.7 million in the comparable prior
year period. The increase was attributable to the sales generated by the new
stores opened in 1995 and 1996, partially offset by the reduction in sales for
the seven stores closed during 1996 and a comparable store sales decrease of
1.6% when compared to the thirty-nine weeks ended October 28, 1995. On a
10
<PAGE> 10
comparable week basis, comparable store sales declined by 1.6%. Sales of
private label and non-name brand footwear constituted 17.4% of total footwear
sales in the first nine months of 1996 as compared with 19.1% in the
comparable prior year period.
Gross Profit
- ------------
Gross profit increased $2.7 million to $19.0 million in the third quarter of
1996, a 16.8% increase over gross profit of $16.3 million in the comparable
prior year period. The Company's gross profit margin increased to 29.8% from
27.1%. As a percentage of sales, merchandise gross profit margin increased
2.3% and buying, distribution and occupancy costs decreased 0.4%. The increase
in merchandise gross profit margin resulted primarily from increased gross
profit margins on the sale of women's private label footwear and children's
footwear.
Gross profit increased $6.0 million to $51.3 million in the first nine months
of 1996, an 13.2% increase over gross profit of $45.3 million in the
comparable prior year period. The Company's gross profit margin increased to
28.6% from 26.5%. As a percentage of sales, merchandise gross profit margin
increased 1.7% and buying, distribution and occupancy costs decreased 0.4%.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses increased $263,000 to $15.0
million in the third quarter of 1996 from $14.8 million in the comparable
prior year period. As a percentage of sales, these expenses decreased 1.0% as
a result of the positive effect of the increase in net sales and lower
advertising costs. Total pre-opening costs for the one store opened in the
third quarter of 1996 was $56,000 or 0.1% of sales, as compared to $128,000,
or 0.2% of sales, for the two stores opened in the third quarter of 1995.
Selling, general and administrative expenses increased $2.0 million to $43.5
million in the first nine months of 1996 from $41.5 million in the comparable
prior year period. As a percentage of sales, these expenses did not change.
Total pre-opening costs for the five stores opened in the first nine months of
1996 were $427,000 or 0.2% of sales, as compared to $286,000 or 0.2% of sales,
for the five stores opened in the first nine months of 1995.
11
<PAGE> 11
Interest Expense
- ----------------
The reduction in net interest expense in the third quarter and the first nine
months of 1996 as compared with the third quarter and the first nine months of
1995 resulted from a combination of reduced borrowings and lower interest
rates.
Income Taxes
- ------------
The effective income tax rate of 41.0% in the third quarters and the first
nine months of 1996 and 1995 differed from the statutory federal rates due
primarily to state and local income taxes, net of the federal tax benefit.
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of funds are cash flows from operations and
borrowings under its revolving credit facility. Net cash provided by
operating activities was $12.1 million during the first nine months of 1996.
Excluding changes in operating assets and liabilities, cash provided by
operating activities was $9.0 million in the first nine months of 1996. The
decrease in working capital to $47.8 million at November 2, 1996 from $50.2
million at February 3, 1996 resulted from the reduction of long-term debt of
$6.6 million, including net payments against the revolving credit facility in
the amount of $6.2 million. Long-term debt as a percentage of total capital
was 16.3% at November 2, 1996, compared to 24.1% at February 3, 1996.
Capital expenditures were $4.9 million in the first nine months of 1996
(including $162,000 of capital lease assets). Of these expenditures,
approximately $1.7 million was incurred for new stores. The remaining capital
expenditures in the first nine months of 1996 were primarily for the
remodeling of certain stores and computer equipment.
The Company has opened five stores in 1996, including the two stores opened in
each of the first and second quarters and one store in the third quarter. The
Company opened three stores in the first quarter of 1995 and two stores in the
third quarter of 1995.
The actual amount of the Company's cash requirements for capital expenditures
depends in part on the number of new stores opened, the amount of lease
incentives, if any, received from landlords and the number of stores
remodeled. The opening of new stores will be dependent upon, among other
things, the availability of desirable locations, the negotiation of acceptable
lease terms and general economic and business conditions affecting consumer
spending in areas the Company targets for expansion.
The average inventory investment in a new store is expected to range from
$550,000 to $850,000, depending on the size and sales expectations of the
store and the timing of the new store opening. Capital expenditures for the
12
<PAGE> 12
new stores are expected to average approximately $450,000, including point-of-
sale equipment which is generally acquired through equipment leasing
transactions. In addition, pre-opening expenses, such as advertising,
salaries, supplies and utilities, typically average $60,000 to $70,000 per
store.
The Company's $35 million credit facility provides for a combination of cash
advances on a revolving basis and the issuance of commercial letters of
credit. Borrowings under the revolving credit line are based on eligible
inventory. Borrowings and letters of credit outstanding under this facility
at November 2, 1996 were $11.1 million and $4.1 million, respectively.
The credit agreement to which the credit facility is subject contains certain
restrictive and financial covenants, including the maintenance of specific
financial ratios and a limitation on the payment of dividends. The most
restrictive covenants limit capital expenditures to $8 million in fiscal 1996
and require a minimum net worth (as defined) of $59.5 million at the end of
the first and second quarters and $60.0 million at the end of the third and
fourth quarters of 1996. The Company was in compliance with all covenants for
the first three quarters of fiscal 1996 and expects to maintain compliance for
the remainder of the fiscal year.
The Company anticipates that its existing cash and cash flow from operations,
supplemented by borrowings under the credit facility will be sufficient to
fund its planned expansion and other operating cash requirements for at least
the next 12 months.
Seasonality
- -----------
The Company's quarterly results of operations have fluctuated, and are
expected to continue to fluctuate in the future primarily as a result of
seasonal variances and the timing of sales and costs associated with opening
new stores. Non-capital expenditures, such as advertising and payroll,
incurred prior to opening of a new store are charged to expense in the month
the store is opened. Therefore, the Company's results of operations may be
adversely affected in any quarter in which the Company opens new stores.
The Company has three distinct selling periods: Easter, back-to-school
and Christmas.
13
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SHOE CARNIVAL, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3-B) By-laws of Registrant, as amended to date p.16-31
(12) Financial Data Schedule p.32
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
November 2, 1996.
14
<PAGE> 14
SHOE CARNIVAL, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed, on its behalf by the
undersigned thereunto duly authorized.
Date: December 16, 1996 SHOE CARNIVAL, INC.
(Registrant)
By: /s/ W. Kerry Jackson
______________________
W. Kerry Jackson
Vice President and
Chief Financial Officer
15
<PAGE> 15
BY-LAWS OF SHOE CARNIVAL, INC.
(As last amended effective September 19, 1996
to amend Article IV, Sections 6 through 11)
Article I
Identification
Section 1. Name. The name of the Corporation is Shoe Carnival,
Inc.
Section 2. Registered Office. The registered office of the
Corporation in the State of Indiana shall be 8233 Baumgart Road, Evansville,
Indiana 47711.
Section 3. Principal Office. The principal office of the
Corporation shall be 8233 Baumgart Road, Evansville, Indiana 47711.
Section 4. Other Offices. The Corporation may also have an office
or offices, and keep the books and records of the Corporation, except as may
otherwise be required by law, at such other place or places, either within or
without the State of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation require.
Article II
Meetings of Shareholders
Section 1. Place of Meeting. All meetings of the shareholders of
the Corporation shall be held at the principal office of the Corporation or at
such other places, within or without the State of Indiana, as may from time to
time be fixed by the Board of Directors.
Section 2. Annual Meetings. The annual meeting of the shareholders
of the Corporation for the election of directors and for the transaction of
such other business as may properly come before the meeting shall be held on
the second Thursday in June in each year, if not a legal holiday under the
laws of the place where the meeting is to be held, and, if a legal holiday,
then on the next succeeding day not a legal holiday under the laws of such
place, or on such other date and at such hour as may from time to time be
fixed by the Board of Directors.
16
<PAGE> 16
Section 3. Special Meetings. Subject to the rights of the holders
of any class or series of Preferred Stock, special meetings of the
shareholders for any purpose or purposes may be called only by the Chairman of
the Board or a majority of the entire Board of Directors. Only such business
as is specified in the notice of any special meeting of the shareholders shall
come before such meeting.
Section 4. Notice of Meetings. Written notice of each meeting of
the shareholders, whether annual or special, shall be given, either by
personal delivery or by mail, not less than 10 nor more than 60 days before
the date of the meeting to each shareholder of record entitled to notice of
such meeting. If mailed, such notice shall be deemed given when deposited in
the United States mail, postage prepaid, directed to the shareholder at such
shareholder's address as it appears on the records of the Corporation. Each
such notice shall state the place, date and hour of the meeting, and the
purpose or purposes for which the meeting is called. Notice of any meeting of
shareholders shall not be required to be given to any shareholder who shall
attend such meeting in person or by proxy without protesting, prior to or at
the commencement of the meeting, the lack of proper notice to such
shareholder, or who shall waive notice thereof as provided in Article VIII of
these By-Laws. Notice of adjournment of a meeting of shareholders need not be
given if the time and place to which it is adjourned are announced at such
meeting, unless the adjournment is for more than 30 days or, after
adjournment, a new record date is fixed for the adjourned meeting.
Section 5. Quorum. The holders of a majority of the votes entitled
to be cast by the shareholders entitled to vote, which if any vote is to be
taken by classes shall mean the holders of a majority of the votes entitled to
be cast by the shareholders of each such class, present in person or by proxy,
shall constitute a quorum for the transaction of business at any meeting of
the shareholders.
Section 6. Adjournments. In the absence of a quorum, the holders
of a majority of the votes entitled to be cast by the shareholders, present in
person or by proxy, may adjourn the meeting from time to time. At any such
adjourned meeting at which a quorum may be present, any business may be
transacted which might have been transacted at the meeting as originally
called.
17
<PAGE> 17
Section 7. Order of Business. At each meeting of the shareholders,
the Chairman of the Board, or, in the absence of the Chairman of the Board,
the President or such other person designated by the Board of Directors, shall
act as chairman. At each annual meeting only such business shall be conducted
as shall have been brought before the annual meeting (i) by or at the
direction of the Board of Directors or (ii) by any shareholder who complies
with the procedures set forth in this Section 7.
For business properly to be brought by a shareholder before an
annual meeting, the shareholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal office of the Corporation not less than 30 days nor more than
60 days prior to the annual meeting; provided, however, that in the event that
less than 40 days' notice or prior public disclosure of the date of the annual
meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. To be in proper written form, a
shareholder's notice to the Secretary shall set forth in writing as to each
matter the shareholder proposes to bring before the annual meeting: (i) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting;
(ii) the name and address, as they appear on the Corporation's books, of the
shareholder proposing such business; (iii) the class and number of shares of
stock of the Corporation which are beneficially owned by the shareholder; and
(iv) any material interest of the shareholder in such business.
Notwithstanding anything in these By-Laws to the contrary, no business shall
be conducted at an annual meeting except in accordance with the procedures set
forth in this Section 7. The chairman of an annual meeting shall, if the
facts warrant, determine and declare to the annual meeting that business was
not properly brought before the annual meeting in accordance with the
provisions of this Section 7 and, if he should so determine, he shall so
declare to the annual meeting and any such business not properly brought
before the annual meeting shall not be transacted.
Section 8. List of Shareholders. It shall be the duty of the
Secretary or other officer of the Corporation who has charge of the stock
ledger to prepare and make, at least 5 business days before each meeting of
the shareholders, a complete list of the shareholders entitled to vote
thereat, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in such shareholder's name.
Such list shall be produced and kept available at the times and places
required by law.
Section 9. Voting. Each shareholder of record of any class or
series of Preferred Stock shall be entitled at each meeting of shareholders to
such number of votes for each share of such stock as may be fixed in the
Restated Articles of Incorporation or an amendment thereto adopted by the
Board of Directors providing for the issuance of such stock, and each
shareholder of record of Common Stock shall be entitled at each meeting of
shareholders to one (1) vote for each share of stock registered in such
shareholder's name on the books of the Corporation:
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(1) on the date fixed pursuant to Section 6 of Article VI
of these By-Laws as the record date for the determination of
shareholders entitled to notice of and to vote at such meeting; or
(2) if no such record date shall have been so fixed, then
at the close of business on the day next preceding the day on
which notice of such meeting is given, or, if notice is waived, at
the close of business on the day next preceding the day on which
the meeting is held, or if no record date for determining
shareholders entitled to express consent to corporate action in
writing without a meeting shall have been fixed, the day on which
the first written consent is expressed.
Each shareholder entitled to vote at any meeting of shareholders may
authorize not in excess of three persons to act for such shareholder by a
proxy signed by such shareholder or such shareholder's attorney-in-fact. Any
such proxy shall be delivered to the secretary of such meeting at or prior to
the time designated for holding such meeting, but in any event not later than
the time designated in the order of business for so delivering such proxies.
No such proxy shall be voted or acted upon after eleven (11) months from its
date, unless the proxy provides for a shorter or longer period.
At a meeting of the shareholders, except as provided in Article III,
Section 2 with respect to the election of directors or as required by law, all
corporate actions to be taken by vote of the shareholders shall be authorized
if the number of votes cast in favor of the action exceeds the number of votes
cast opposing the action, and where a separate vote by class is required, the
number of votes cast in favor of the action by the shareholders of such class
exceeds the number of votes cast by the shareholders of such class opposing
the action.
Unless required by law or determined by the chairman of the meeting
to be advisable, the vote on any matter, including the election of directors,
need not be by written ballot. In the case of a vote by written ballot, each
ballot shall be signed by the shareholder voting, or by such shareholder's
proxy, and shall state the number of shares voted.
Section 10. Inspectors. Either the Board of Directors or, in the
absence of designation of inspectors by the Board, the chairman of any meeting
of shareholders may, in its or such person's discretion, appoint two or more
inspectors to act at any meeting of shareholders. Such inspectors shall
perform such duties as shall be specified by the Board or the chairman of the
meeting. Inspectors need not be shareholders. No director or nominee for the
office of director shall be appointed such inspector.
Article III
Board of Directors
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Section 1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, which may exercise all such powers of the Corporation and do all
such lawful acts and things as are not by law or by the Restated Articles of
Incorporation of the Corporation directed or required to be exercised or done
by the shareholders.
Section 2. Number, Qualification and Election. Except as otherwise
fixed by or pursuant to the provisions of the Restated Articles of
Incorporation of the Corporation relating to the rights of the holders of any
class or series of Preferred Stock, the number of directors of the Corporation
shall be determined from time to time by vote of a majority of the entire
Board of Directors, provided that the number thereof may not be less than
three nor more than fifteen.
The directors, other than those who may be elected by the holders of
shares of any class or series of Preferred Stock pursuant to the terms of the
Restated Articles of Incorporation or any resolution or resolutions providing
for the issuance of such stock adopted by the Board, shall be classified, with
respect to the time for which they severally hold office, into three classes
as nearly equal in number as possible: one class whose term expires at the
1997 annual meeting of shareholders, another class whose term expires at the
1998 annual meeting of shareholders and another class whose term expires at
the 1999 annual meeting of shareholders, with each class to hold office until
its successors are elected and qualified. The membership of each class shall
be initially as set forth in the Restated Articles of Incorporation. If the
number of directors is thereafter changed by the Board of Directors, any newly
created directorships or any decrease in directorships shall be so apportioned
among the classes as to make all classes as nearly equal as possible;
provided, however, that no decrease in the number of directors shall shorten
the term of any incumbent director. At each annual meeting of the
shareholders of the Corporation, subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation, the successors of the class
of directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of shareholders held in the
third year following the year of their election.
Directors need not be shareholders of the Corporation.
In any election of directors, the persons receiving a plurality of
the votes cast, up to the number of directors to be elected in such election,
shall be deemed elected.
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Section 3. Notification of Nominations. Subject to the rights of
the holders of any class or series of Preferred Stock, nominations for the
election of directors may be made by the Board of Directors or by any
shareholder entitled to vote for the election of directors, but in the case of
a nomination by a shareholder, only if such shareholder gives timely notice
thereof in proper written form to the Secretary of the Corporation. To be
timely, a shareholder's notice shall be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 30 days nor
more than 60 days prior to the meeting; provided, however, that in the event
that less than 40 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be
timely must be so received not later than the close of business on the tenth
day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. To be in proper written form, such
shareholder's notice shall set forth in writing (i) as to each person whom the
shareholder proposes to nominate for election or re-election as a director,
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required
under the Securities Exchange Act of 1934, as amended, including, without
limitation, such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected; and (ii) as to
the shareholder giving the notice (x) the name and address, as they appear on
the Corporation's books, of such shareholder and (y) the class and number of
shares of stock of the Corporation which are beneficially owned by such
shareholder. At the request of the Board of Directors, any person nominated
by the Board of Directors for election as a director shall furnish to the
Secretary of the Corporation the information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee. In the
event that a shareholder seeks to nominate one or more directors, the
Secretary shall appoint two inspectors, who shall not be affiliated with the
Corporation, to determine whether a shareholder has complied with this
Section 3. If the inspectors shall determine that a shareholder has not
complied with this Section 3, the inspectors shall direct the chairman of the
meeting to declare to the meeting that a nomination was not made in accordance
with the procedures prescribed by the By-Laws of the Corporation, and the
chairman shall so declare to the meeting and the defective nomination shall be
disregarded.
Section 4. Quorum and Manner of Acting. Except as otherwise
provided by these By-Laws, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the
Board, and, except as so provided, the vote of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board. In the absence of a quorum, a majority of the directors present may
adjourn the meeting to another time and place. At any adjourned meeting at
which a quorum is present, any business may be transacted which might have
been transacted at the meeting as originally called.
Section 5. Place of Meeting. The Board of Directors may hold its
meetings at such place or places within or without the State of Indiana as the
Board may from time to time determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
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Section 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as the Board shall from time
to time by resolution determine. If any day fixed for a regular meeting shall
be a legal holiday under the laws of the place where the meeting is to be
held, the meeting which would otherwise be held on that day shall be held at
the same hour on the next succeeding business day.
Section 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board or by a
majority of the directors.
Section 8. Notice of Meetings. Notice of regular meetings of the
Board of Directors or of any adjourned meeting thereof need not be given.
Notice of each special meeting of the Board shall be mailed to each director,
addressed to such director at such director's residence or usual place of
business, at least two days before the day on which the meeting is to be held
or shall be sent to such director at such place by telegraph or be given
personally or by telephone, not later than the day before the meeting is to be
held, but notice need not be given to any director who shall, either before or
after the meeting, submit a signed waiver of such notice or who shall attend
such meeting without protesting, prior to or at its commencement, the lack of
notice to such director. Every such notice shall state the time and place but
need not state the purpose of the meeting.
Section 9. Rules and Regulations. The Board of Directors may adopt
such rules and regulations not inconsistent with the provisions of these
By-Laws for the conduct of its meetings and management of the affairs of the
Corporation as the Board may deem necessary or proper. In the absence of the
Chairman of the Board, such person designated by the Board of Directors shall
preside at meetings of the Board.
Section 10. Participation in Meeting by Means of Communications
Equipment. Any one or more members of the Board of Directors or any committee
thereof may participate in any meeting of the Board or of any such committee
by means of conference telephone or similar communications 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.
Section 11. 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 if all of the members of the
Board or of any such committee consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of the Board or of such
committee.
Section 12. Resignations. Any director of the Corporation may at
any time resign by giving written notice to the Board of Directors, the
Chairman of the Board, the President or the Secretary of the Corporation.
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 such resignation shall not be necessary to make it
effective.
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Section 13. Removal of Directors. Directors may be removed only as
provided in the Restated Articles of Incorporation of the Corporation.
Section 14. Vacancies. Subject to the rights of the holders of any
class or series of Preferred Stock, any vacancies on the Board of Directors
resulting from death, resignation, removal or other cause shall only be filled
by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors, or by a sole
remaining director, and newly created directorships resulting from any
increase in the number of directors shall be filled by the Board, or if not so
filled, by the shareholders at the next annual meeting thereof or at a special
meeting called for that purpose in accordance with Section 3 of Article II of
these By-Laws. Any director elected in accordance with the preceding sentence
of this Section 14 shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified.
Section 15. Compensation. Each director who shall not at the time
also be an officer or employee of the Corporation or any of its subsidiaries
(hereinafter referred to as an "outside director"), in consideration of such
person serving as a director, shall be entitled to receive from the
Corporation such amount per annum and such fees for attendance at meetings of
the Board of Directors or of committees of the Board, or both, as the Board
shall from time to time determine. In addition, each director, whether or not
an outside director, shall be entitled to receive from the Corporation
reimbursement for the reasonable expenses incurred by such person in
connection with the performance of such person's duties as a director.
Nothing contained in this Section shall preclude any director from serving the
Corporation or any of its subsidiaries in any other capacity and receiving
proper compensation therefor.
Section 16. Committees. The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate one or more of its
members to constitute members or alternate members of a committee. Such
committee, to the extent provided in the resolution of the Board, shall have
and may exercise the powers and authority of the Board in the management of
the business and affairs of the Corporation, including without limitation, if
such committee is so empowered and authorized in the resolution of the Board,
the power and authority to declare a dividend and to authorize the issuance of
stock, and may authorize the seal of the Corporation, if any, to be affixed to
all papers which may require it, except that no committee shall have such
power or authority in reference to:
(a) authorize dividends or other distributions, except a
committee (or an executive officer of the Corporation designated
by the Board of Directors) may authorize or approve a
reacquisition of stock or other distribution, if done according to
a formula or method, or within a range, prescribed by the Board of
Directors;
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(b) approve or propose to shareholders action that is
required to be approved by shareholders;
(c) fill vacancies on the Board of Directors or on any of
its committees;
(d) except to the extent permitted by clause (g) below,
amend the Corporation's Restated Articles of Incorporation;
(e) adopt, amend, repeal, or waive provisions of these
By-Laws;
(f) approve a plan of merger not requiring shareholder
approval; or
(g) authorize or approve the issuance or sale or a
contract for sale of stock, or determine the designation and
relative rights, preferences, and limitations of a class or series
of Preferred Stock, except the Board of Directors may authorize a
committee (or an executive officer of the Corporation designated
by the Board of Directors) to take the action described herein
within limits prescribed by the Board of Directors.
A majority of all the members of such committee may determine its action and
fix the time and place of its meetings, unless the Board shall otherwise
provide. The Board shall have power at any time to change the membership of,
to fill all vacancies in and to discharge any such committee, either with or
without cause.
Article IV
Officers
Section 1. Number; Term of Office. The officers of the Corporation
shall be a Chairman of the Board, a President, one or more Vice-Presidents,
one or more of whom may be designated as Executive or Senior Vice-Presidents,
a Treasurer, a Secretary, and such other officers or agents with such titles
and such duties as the Board of Directors may from time to time determine,
each to have such authority, functions or duties as in these By-Laws provided
or as the Board may from time to time determine, and each to hold office for
such term as may be prescribed by the Board and until such person's successor
shall have been chosen and shall qualify, or until such person's death or
resignation, or until such person's removal in the manner hereinafter
provided. The Chairman of the Board shall be elected from among the
directors. One person may hold the offices and perform the duties of any two
or more of said officers; provided, however, that no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law, the Restated Articles of Incorporation of the
Corporation or these By-Laws to be executed, acknowledged or verified by two
or more officers. The Board may from time to time authorize any officer to
appoint and remove any such other officers and agents and to prescribe their
powers and duties. The Board may require any officer or agent to give
security for the faithful performance of such person's duties.
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Section 2. Removal. Any officer may be removed, either with or
without cause, by the Board of Directors at any meeting thereof called for the
purpose, or, except in the case of any officer elected by the Board, by any
committee or superior officer upon whom such power may be conferred by the
Board.
Section 3. Resignation. Any officer may resign at any time by
giving notice to the Board of Directors, the Chairman of the Board, the
President or the Secretary of the Corporation. Any such resignation shall
take effect at the date of receipt of such notice or at any later date
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause may be filled for the unexpired
portion of the term in the manner prescribed in these By-Laws for election to
such office.
Section 5. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the Board of Directors and, if present, preside at
meetings of the shareholders. He shall have such other duties and
responsibilities as may be specified by the Board of Directors.
Section 6. Vice-Chairman of the Board. The Vice-Chairman of the
Board shall have such power and perform such duties as the Board of Directors
or the Chairman of the Board may, from time to time, prescribe.
Section 7. President. The President shall be the chief executive
officer of the Corporation and as such shall have general supervision and
direction of the business and affairs of the Corporation subject to the
control of the Board of Directors. The President shall perform such other
duties as the Board may from time to time determine and shall, in the absence
of the Chairman of the Board, preside at meetings of the shareholders.
Section 8. Vice-Presidents. Each Vice-President shall have such
powers and duties as shall be prescribed by the President or the Board of
Directors.
Section 9. Treasurer. The Treasurer shall perform all duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to the Treasurer by the President or the Board of Directors.
Section 10. Secretary. The Secretary shall see that all notices
required to be given by the Corporation are duly given and served; the
Secretary shall have charge of the stock ledger and also of the other books,
records and papers of the Corporation and of its corporate seal, if any, and
shall see that the reports, statements and other documents required by law are
properly kept and filed; and shall in general perform all the duties incident
to the office of Secretary and such other duties as from time to time may be
assigned to such person by the President or the Board of Directors.
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Section 11. Assistant Treasurers or Secretaries. The Assistant
Treasurers and the Assistant Secretaries, if any, shall perform such duties as
shall be assigned to them by the Treasurer or Secretary, or by the President
or the Board of Directors.
Article V
Indemnification of Directors, Officers,
Employees and Agents
Section 1. Indemnification. To the fullest extent permitted by the
laws of the State of Indiana, the Corporation shall indemnify any person who
is or was a party, or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Corporation) by reason of the fact that such person 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, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, including appeals.
Section 2. Advance of Expenses. To the fullest extent permitted by
the laws of the State of Indiana, the Corporation shall pay expenses incurred
in defending a civil or criminal action, suit or proceeding described in
Section 1 of this Article V in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by
the Corporation.
Section 3. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Article V.
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Section 4. Applicability. The provisions of this Article V shall
be applicable to all actions, claims, suits or proceedings made or commenced
after the adoption hereof, whether arising from acts or omissions to act
occurring before or after its adoption. The provisions of this Article V
shall be deemed to be a contract between the Corporation and each director,
officer, employee or agent who serves in such capacity at any time while this
Article V and the relevant provisions of the laws of the State of Indiana and
other applicable law, if any, are in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing with respect
to any state of facts or any action, suit or proceeding then or theretofore
existing, or any action, suit or proceeding thereafter brought or threatened
based in whole or in part on any such state of facts. If any provision of
this Article V shall be found to be invalid or limited in application by
reason of any law or regulation, it shall not affect the validity of the
remaining provisions hereof. The rights of indemnification provided in this
Article V shall neither be exclusive of, nor be deemed in limitation of, any
rights to which any such officer, director, employee or agent may otherwise be
entitled or permitted by contract, the Restated Articles of Incorporation,
vote of shareholders or directors or otherwise, or as a matter of law, both as
to actions in his official capacity and actions in any other capacity while
holding such office, it being the policy of the Corporation that
indemnification of the specified individuals shall be made to the fullest
extent permitted by law.
Section 5. Certain Definitions. For purposes of this Article V,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; references to "serving at the request of
the Corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries.
Article VI
Capital Stock
Section 1. Certificates for Shares. Certificates representing
shares of stock of each class of the Corporation, whenever authorized by the
Board of Directors, shall be in such form as shall be approved by the Board.
The certificates representing shares of stock of each class, or series within
a class, of such stock shall be consecutively numbered as issued. Each
certificate shall state: the name of the Corporation; that it is organized
under the laws of the State of Indiana; the name of the registered holder; the
number of shares and class and the designation of the series, if any, of the
stock represented thereby; and a summary of the designations, relative rights,
preferences and limitations applicable to such class and, if applicable, the
variations in rights, preferences and limitations determined for each series
and the authority of the Board to determine such variations for future series;
provided, however, that such summary may be omitted if the certificate states
conspicuously on its front or back that the Corporation will furnish the
shareholder such information upon written request and without charge.
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The certificates shall be signed by, or in the name of, the
Corporation by the Chairman of the Board or the President or a Vice-President
and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Corporation. Any or all such signatures may be
facsimiles if countersigned by a transfer agent or registrar. Although any
officer, transfer agent or registrar whose manual or facsimile signature is
affixed to such a certificate ceases to be such officer, transfer agent or
registrar before such certificate has been issued, it may nevertheless be
issued by the Corporation with the same effect as if such officer, transfer
agent or registrar were still such at the date of its issue.
The stock ledger and blank share certificates shall be kept by the
Secretary or by a transfer agent or by a registrar or by any other officer or
agent designated by the Board.
Section 2. Transfer of Shares. Transfers of shares of stock of
each class of the Corporation shall be made only on the books of the
Corporation by the holder thereof, or by such holder's attorney thereunto
authorized by a power of attorney duly executed and filed with the Secretary
of the Corporation or a transfer agent for such stock, if any, and on
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a duly executed stock transfer power and the payment of all
taxes thereon. The person in whose name shares stand on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards the
Corporation; provided, however, that whenever any transfer of shares shall be
made for collateral security and not absolutely, and written notice thereof
shall be given to the Secretary or to such transfer agent, such fact shall be
stated in the entry of the transfer. No transfer of shares shall be valid as
against the Corporation, its shareholders and creditors for any purpose,
except to render the transferee liable for the debts of the Corporation to the
extent provided by law, until it shall have been entered in the stock records
of the Corporation by an entry showing from and to whom transferred.
Section 3. Addresses of Shareholders. Each shareholder shall
designate to the Secretary or transfer agent of the Corporation an address at
which notices of meetings and all other corporate notices may be served or
mailed to such person, and, if any shareholder shall fail to designate such
address, corporate notices may be served upon such person by mail directed to
such person at such person's post office address, if any, as the same appears
on the share record books of the Corporation or at such person's last known
post office address.
Section 4. Lost, Destroyed and Mutilated Certificates. The holder
of any share of stock of the Corporation shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of the certificate
therefor; the Corporation may issue to such holder a new certificate or
certificates for shares, upon the surrender of the mutilated certificate or,
in the case of loss, theft or destruction of the certificate, upon
satisfactory proof of such loss, theft or destruction; the Board of Directors,
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or a committee designated thereby, or the transfer agents and registrars for
the stock, may, in their discretion, require the owner of the lost, stolen or
destroyed certificate, or such person's legal representative, to give the
Corporation a bond in such sum and with such surety or sureties as they may
direct to indemnify the Corporation and said transfer agents and registrars
against any claim that may be made on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such new certificate.
Section 5. Regulations. The Board of Directors may make such
additional rules and regulations as it may deem expedient concerning the issue
and transfer of certificates representing shares of stock of each class of the
Corporation and may make such rules and take such action as it may deem
expedient concerning the issue of certificates in lieu of certificates claimed
to have been lost, destroyed, stolen or mutilated.
Section 6. Fixing Date for Determination of Shareholders of Record.
In order that the Corporation may determine the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution
or allotment or 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 shall not be more than 70 days before the date of such meeting. A
determination of shareholders entitled to notice of or to vote at a meeting of
the shareholders shall apply to any adjournment of the meeting unless the
Board of Directors fixes a new record date, which it must do if the adjourned
meeting is not within 120 days of the date fixed for the original meeting.
Article VII
Fiscal Year
The fiscal year of the Corporation shall be determined by resolution
of the Board of Directors. In the absence of such a resolution, the fiscal
year of the Corporation shall end on the Saturday nearest January 31 of each
year.
Article VIII
Waiver of Notice
Whenever any notice whatsoever is required to be given by these
By-Laws, by the Restated Articles of Incorporation of the Corporation or by
law, the person entitled thereto may, either before or after the meeting or
other matter in respect of which such notice is to be given, waive such notice
in writing, which writing shall be filed with or entered upon the records of
the meeting or the records kept with respect to such other matter, as the case
may be, and in such event such notice need not be given to such person and
such waiver shall be deemed equivalent to such notice.
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Article IX
Amendments
Any By-Law (other than this Article IX) may be adopted, repealed,
altered or amended by a majority of the entire Board of Directors at any
meeting thereof, provided that such proposed action in respect thereof shall
be stated in the notice of such meeting.
Article X
Miscellaneous
Section 1. Execution of Documents. The Board of Directors or any
committee thereof shall designate the officers, employees and agents of the
Corporation who shall have power to execute and deliver deeds, contracts,
mortgages, bonds, debentures, notes, checks, drafts and other orders for the
payment of money and other documents for and in the name of the Corporation
and may authorize such officers, employees and agents to delegate such power
(including authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation. Such delegation may be by resolution
or otherwise and the authority granted shall be general or confined to
specific matters, all as the Board of Directors or any such committee may
determine. In the absence of such designation referred to in the first
sentence of this Section, the officers of the Corporation shall have such
power so referred to, to the extent incident to the normal performance of
their duties.
Section 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board of Directors or any committee thereof or any officer
of the Corporation to whom power in that respect shall have been delegated by
the Board of Directors or any such committee shall select.
Section 3. Checks. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation, and all notes or other
evidences of indebtedness of the Corporation, shall be signed on behalf of the
Corporation in such manner as shall from time to time be determined by
resolution of the Board of Directors or of any committee thereof.
Section 4. Proxies in Respect of Stock or Other Securities of Other
Corporations. The Board of Directors or any committee thereof shall designate
the officers of the Corporation who shall have authority from time to time to
appoint an agent or agents of the Corporation to exercise in the name and on
behalf of the Corporation the powers and rights which the Corporation may have
as the holder of stock or other securities in any other corporation, and to
vote or consent in respect of such stock or securities; such designated
officers may instruct the person or persons so appointed as to the manner of
exercising such powers and rights; and such designated officers may execute or
30
<PAGE> 30
cause to be executed in the name and on behalf of the Corporation or
otherwise, such written proxies, powers of attorney or other instruments as
they may deem necessary or proper in order that the Corporation may exercise
its said powers and rights.
Section 5. By-Laws Subject to Law and Restated Articles of
Incorporation of the Corporation. Each provision of these By-Laws is subject
to any contrary provision of the Restated Articles of Incorporation of the
Corporation or of any applicable law as from time to time in effect, and to
the extent any such provision is inconsistent therewith, such provision shall
be superseded thereby for as long as it is inconsistent, but for all other
purposes of these By-Laws shall continue in full force and effect.
Section 6. Definition of Restated Articles of Incorporation. The
term "Restated Articles of Incorporation" as used in these By-Laws means the
Restated Articles of Incorporation of the Corporation as from time to time in
effect.
31
<PAGE> 31
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED NOVEMBER 2, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> NOV-02-1996
<CASH> 1,414
<SECURITIES> 0
<RECEIVABLES> 970
<ALLOWANCES> 0
<INVENTORY> 65,759
<CURRENT-ASSETS> 69,273
<PP&E> 46,855
<DEPRECIATION> 16,169
<TOTAL-ASSETS> 99,959
<CURRENT-LIABILITIES> 21,516
<BONDS> 12,398
0
0
<COMMON> 0
<OTHER-SE> 63,621
<TOTAL-LIABILITY-AND-EQUITY> 99,959
<SALES> 179,687
<TOTAL-REVENUES> 179,687
<CGS> 128,392
<TOTAL-COSTS> 128,392
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,019
<INCOME-PRETAX> 6,794
<INCOME-TAX> 2,785
<INCOME-CONTINUING> 4,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,009
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
