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 May 3, 1997
[ ] 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
incorporation or organization) Number)
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, no par value, 13,039,418 shares outstanding as of June 1, 1997.
<PAGE>
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
Item 2 - Management's Discussion and Analysis............ 8-10
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K................ 11
Signature................................................ 12
2
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SHOE CARNIVAL, INC.
CONDENSED BALANCE SHEETS
Unaudited
May 3, February 1, May 4,
1997 1997 1996
---------- ------------ ----------
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents........... $ 1,762 $ 1,625 $ 1,607
Accounts receivable................. 780 916 912
Notes receivable from shareholders.. 22 22 40
Merchandise inventories............. 64,173 59,240 61,197
Deferred income tax benefit......... 441 400 1,070
Other............................... 777 906 3,622
---------- ---------- ----------
Total Current Assets................... 67,955 63,109 68,448
Property and equipment-net............. 30,831 30,817 31,044
---------- ---------- ----------
Total Assets........................... $ 98,786 $ 93,926 $ 99,492
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................... $ 8,637 $ 12,159 $ 8,402
Accrued and other liabilities....... 6,191 5,172 7,491
Current portion of long-term debt... 702 688 650
---------- ---------- ----------
Total Current Liabilities.............. 15,530 18,019 16,543
Long-term debt......................... 14,939 9,621 19,878
Deferred lease incentives.............. 1,416 1,458 1,668
Deferred income taxes.................. 1,130 1,056 911
---------- ---------- ----------
Total Liabilities...................... 33,015 30,154 39,000
---------- ---------- ----------
Shareholders' Equity:
Common stock, no and $.10 par
value, 50,000 shares authorized,
13,037, 13,032, 13,019 shares issued
and outstanding at May 3, 1997,
February 1, 1997 and May 4, 1996.... 0 0 1,302
Additional paid-in capital.......... 61,579 61,398 60,035
Retained earnings (deficit)......... 4,192 2,374 (845)
---------- --------- ----------
Total Shareholders' Equity............. 65,771 63,772 60,492
---------- --------- ----------
Total Liabilities and
Shareholders' Equity................. $ 98,786 $ 93,926 $ 99,492
========== ========= ==========
See Notes to Condensed Financial Statements
3
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SHOE CARNIVAL, INC.
CONDENSED STATEMENTS OF INCOME
Unaudited
Thirteen Thirteen
Weeks Ended Weeks Ended
May 3, 1997 May 4, 1996
------------- -------------
(In thousands, except per share data)
Net sales............................... $ 59,328 $ 58,208
Cost of sales (including buying,
distribution and occupancy costs)..... 40,998 41,859
--------- ---------
Gross profit............................ 18,330 16,349
Selling, general and administrative
expenses.............................. 15,044 14,349
Operating income........................ 3,286 2,000
Interest expense, net................... 231 439
--------- ---------
Income before income taxes.............. 3,055 1,561
Income taxes............................ 1,237 640
--------- ---------
Net income.............................. $ 1,818 $ 921
========= =========
Net income per share.................... $ .14 $ .07
========= =========
Weighted average common shares and
common equivalent shares outstanding.. 13,054 13,019
========= =========
See Notes to Condensed Financial Statements
4
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SHOE CARNIVAL, INC.
CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
Unaudited
Additional
Common Stock Paid-In Retained
Shares Amount Capital Earnings Total
------- ------ ---------- --------- ---------
(In thousands)
Balance at February 1, 1997.... 13,032 $ 0 $ 61,398 $ 2,374 $ 63,772
Employee stock purchase
plan purchases............. 5 23 23
Payment on stock purchase.... 158 158
Net income................... 1,818 1,818
------- ---- --------- --------- ---------
Balance at May 3, 1997......... 13,037 $ 0 $ 61,579 $ 4,192 $ 65,771
======= ==== ========= ========= =========
See Notes to Condensed Financial Statements
5
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SHOE CARNIVAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
Thirteen Thirteen
Weeks Ended Weeks Ended
May 3, 1997 May 4, 1996
------------ ------------
(In thousands)
Cash flows from operating activities:
Net income................................... $ 1,818 $ 921
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization.............. 1,364 1,273
Loss on retirement of assets............... 97 48
Deferred income taxes...................... 33 735
Compensation for forgiveness of debt....... 158 0
Other .................................... (41) (41)
Changes in operating assets and liabilities:
Merchandise inventories.................. (4,934) 1,503
Accounts receivable...................... 137 74
Accounts payable and accrued liabilities. (2,333) (3,729)
Other.................................... 129 1,036
---------- ----------
Net cash (used in) provided by operating
activities................................... (3,572) 1,820
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment.......... (1,662) (1,719)
Lease incentives............................. 0 (241)
Other........................................ 16 0
---------- ----------
Net cash used in investing activities........... (1,646) (1,960)
---------- ----------
Cash flows from financing activities:
Borrowings under line of credit.............. 35,125 67,525
Payments on line of credit................... (29,625) (66,525)
Payments on capital lease obligations........ (168) (153)
Proceeds from issuance of stock.............. 23 0
---------- ----------
Net cash provided by financing activities....... 5,355 847
---------- ----------
Net increase in cash and cash equivalents....... 137 707
Cash and cash equivalents at beginning of
period....................................... 1,625 900
---------- ----------
Cash and cash equivalents at end of period...... $ 1,762 $ 1,607
========== ==========
Supplemental disclosures of cash flow
information:
Cash paid during period for interest......... $ 219 $ 423
Cash paid (refunded) during period for
income taxes................................ $ 244 $ (1,888)
Supplemental disclosure of noncash
investing activities:
Capital lease obligations incurred........... $ 0 $ 147
See Notes to Condensed Financial Statements
6
<PAGE>
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 1996
Annual Report.
Note 2 - 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. Eight
stores were closed during fiscal years 1995 and 1996, with the remaining store
being closed in February 1997.
During the first quarter of 1997 charges applied against the restructuring
reserve include cash expenditures of $83,000 for store closing costs and
$167,000 for equipment and leasehold improvement write-offs. The remaining
reserve of $68,000 will be utilized primarily for lease termination costs.
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 materially from the
amounts recorded if management is unable to negotiate an acceptable lease
termination agreement with the landlord.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Comparable
Number of Stores Store Square Footage Store Sales
Beginning End of Net End Increase/
Quarter Ended Of Period Opened Closed Period Decrease of Period (Decrease)
- ------------- ---------- ------- ------ ------ --------- --------- -----------
May 3, 1997 93 0 2 91 (19,000) 1,007,000 4.4%
May 4, 1996 95 2 4 93 (2,000) 1,022,000 (4.4%)
The following table sets forth the Company's results of operations expressed as
a percentage of net sales for the periods indicated:
Thirteen Thirteen
Weeks Ended Weeks Ended
May 3, 1997 May 4, 1996
------------ ------------
Net sales................................ 100.0% 100.0%
Cost of sales (including buying,
distribution and occupancy costs)...... 69.1 71.9
---------- ----------
Gross profit............................. 30.9 28.1
Selling, general and administrative
expenses............................... 25.4 24.6
---------- ----------
Operating income......................... 5.5 3.5
Interest expense......................... .4 .8
---------- ----------
Income before income taxes............... 5.1 2.7
Income taxes............................. 2.0 1.1
---------- ----------
Net income............................... 3.1% 1.6%
========== ==========
Net Sales
Net sales increased $1.1 million to $59.3 million in the first quarter of 1997,
a 1.9% increase over net sales of $58.2 million in the comparable prior year
period. The increase was attributable to a 4.4% comparable store sales increase
and the sales generated by the five new stores opened in 1996, partially offset
by the reduction in sales for the nine stores closed in 1996 and 1997. The
comparable store sales increase was supported with increases in all major
product categories. Average footwear unit prices in comparable stores increased
12.6% while footwear unit sales decreased 7.4%. Sales of private label and
non-name brand footwear constituted 16.3% of total footwear sales in the first
quarter of 1997 as compared with 16.0% in the prior year quarter.
Gross Profit
Gross profit increased $2.0 million to $18.3 million in the first quarter of
1997, a 12.1% increase over gross profit of $16.3 million in the comparable
prior year period. The Company's gross profit margin increased to 30.9% from
28.1%. As a percentage of sales, buying, distribution and occupancy costs
decreased 0.3%. The increase in
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
merchandise gross profit margin of 2.5% of sales was broad based with all major
product categories improving over the comparable prior year period.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $695,000 to $15.0 million
in the first quarter of 1997 from $14.3 million in the comparable prior year
period. As a percentage of sales, these expenses increased 0.8%. Excluding the
effect of a $650,000 nonrecurring charge related to the retirement of David H.
Russell, former vice chairman, president and chief executive officer, selling,
general and administrative expenses as a percent of sales decreased 0.3% to
24.3%. Total pre-opening costs for the two stores opened in the first quarter of
1996 were $240,000 or 0.4% of sales. No stores were opened in the first quarter
of 1997.
Interest Expense
The reduction in net interest expense to $231,000 in the first quarter of 1997
from $439,000 in the first quarter of 1996 resulted from a combination of
reduced borrowings and lower interest rates.
Income Taxes
The effective income tax rate of 40.5% and 41.0% in the first quarters of 1997
and 1996 respectively 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 used in operating
activities was $3.6 million during the first quarter of 1997. Excluding changes
in operating assets and liabilities, cash provided by operating activities was
$3.4 million in the first quarter of 1997. An increase in merchandise
inventories of $4.9 million and a reduction in accounts payable and accrued
liabilities of $2.3 million were partially offset by the $3.4 million in cash
generated by operations before changes in operating assets and liabilities. The
increase in merchandise inventories was primarily due to seasonal fluctuations.
Working capital increased to $52.4 million at May 3, 1997 from $45.1 million at
February 1, 1997 and the current ratio improved to 4.4 to 1 from 3.5 to 1.
Long-term debt as a percentage of total capital was 18.5% at May 3, 1997,
compared to 13.1% at February 1, 1997.
Capital expenditures were $1.7 million in the first quarter of 1997. Of these
expenditures, approximately $1.1 million was incurred for the remodeling of
certain stores. The remaining capital expenditures in the first quarter of 1997
were primarily for technological improvements in the stores and distribution
center.
The Company intends to open three or four stores in the second half of 1997. Two
stores were closed in the first quarter of 1997. The Company opened two stores
in the first quarter of 1996 and closed four stores.
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.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
As part of the Company's effort to upgrade the image of its stores, a new
prototype design has been utilized in all new and remodeled stores since the
fourth quarter of 1995. The size of stores utilizing the new prototype design
has increased from 10,000 square feet to between 12,000 and 18,000 square feet
depending upon, among other factors, the location of the store and the
population base the store is expected to service. Accordingly, capital
expenditures for new stores have increased to an average of approximately
$450,000, including point-of-sale equipment which is generally acquired through
equipment leasing transactions. The average inventory investments in a new store
is expected to range from $550,000 to $850,000, depending on the size and sales
expectation of the store and the timing of the new store opening. Pre-opening
expenses, such as advertising, salaries, supplies and utilities, are expected to
average $60,000 to $80,000 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. The
credit agreement limits capital expenditures in 1997 to $12 million. Borrowings
and letters of credit outstanding under this facility at May 3, 1997 were $14
million and $4.6 million, respectively.
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.
10
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SHOE CARNIVAL, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10-N) Employment agreement dated April 14, 1997, between the
Registrant and Cliff Sifford
(12) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
May 3, 1997
11
<PAGE>
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: June 13, 1997 SHOE CARNIVAL, INC.
(Registrant)
By: /s/ W. Kerry Jackson
W. Kerry Jackson
Vice President and
Chief Accounting Officer
12
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and dated as of April 14,
1997, by and between SHOE CARNIVAL, INC., ("Employer") an Indiana corporation
and CLIFF SIFFORD ("Employee").
WITNESSETH
WHEREAS, the Employer desires to employ the Employee and the Employee
desires to become employed by the Employer, and
WHEREAS, Employer desires to assure the continued service of Employee; and
WHEREAS, Employee is willing to provide such service on the terms and
conditions specified herein;
NOW THEREFORE, in consideration of these premises, the mutual covenants and
undertakings herein contained, Employer and Employee, each intending to be
legally bound, covenant and agree as follows:
1. Continuation of Employment. The parties agree that the employment of
Employee shall continue for the term provided for in section 3. While employed
by Employer, Employee shall devote substantially all of his business time and
efforts to Employer's business.
2. Duties. Employee shall serve as Employer's Senior Vice President and
General Merchandise Manager and to perform such duties in that office as are
customarily associated with such office or as may be assigned to him by
Employer's Board of Directors or Chief Executive Officer.
3. Term. The term of this Agreement (the "Term"), unless terminated earlier
in accordance with section 7, shall continue through April 13, 1999.
4. Compensation.
a. Employee shall receive an annual salary of $150,000 ("Base
Compensation") payable at regular intervals in accordance with
Employer's normal payroll practices now or hereafter in effect.
b. The Base Compensation may be increased on an annual basis as of April
1 of each calendar year by an amount determined by the Board of
Directors.
c. The Board of Directors of Employer may consider, from time to time,
additional increases to Employee's Base Compensation.
d. Employee shall participate in all present and future executive
incentive compensation plans of Employer.
1
<PAGE>
5. Benefit Plans. Employee shall be included as a participant in all
present and future employee benefit, retirement and compensation plans generally
available to employees of Employer, consistent with his Base Compensation and
position with Employer, including, without limitation, any pension plan, profit
sharing plan, 401(k) plan, stock option plans, and hospitalization, major
medical, disability and group life insurance plans, upon the terms set forth in
such plans, as amended from time to time. Employer may amend or eliminate any
such plan in its discretion to the extent permitted by law, as long as the
change does not apply solely to Employee to the exclusion of all other
participants in such plan.
6. Expenses; Vacations. So long as Employee is employed by Employer
pursuant to this Agreement, Employee shall receive reimbursement from Employer
for all reasonable business expenses incurred in the course of his employment by
Employer, upon submission to Employer of written vouchers and statements for
reimbursement in accordance with Employer's policies and procedures. So long as
Employee is employed by Employer pursuant to the terms of this Agreement,
Employee shall participate in Employer's vacation policies for executives at a
level commensurate with his position.
7. Termination. Subject to the respective continuing obligation of the
parties, Employee's employment may be terminated prior to the expiration of the
Term of this Agreement as follows:
a. Employer, by action of its Board of Directors and upon written notice
to Employee, may terminate Employee's employment at any time effective
immediately for cause. For purposes of this subsection 7a, "cause"
shall be defined as any (i) dishonest or fraudulent conduct in
connection with his employment, (ii) conviction of Employee by a
federal or state court for the commission of a felony, (iii) repeated
failure on the part of Employee, after written notice specifying in
reasonable detail the alleged failure, to perform the duties assigned
to him under this Agreement or any other executive level duties
hereafter designated by the Board of Directors; or (iv) unlawful
taking or misappropriation of any material and substantial tangible or
intangible property (other than corporate opportunities) or
misappropriation of any corporate opportunity belonging to Employer or
any subsidiary or in which any of them has an interest.
b. Employer, by action of its Board of Directors, may terminate
Employee's employment at any time without cause.
c. Employee, by written notice to Employer, may terminate his employment
at any time.
d. Employee's employment shall terminate in the event of Employee's death
or disability. For purposes hereof, "disability" shall be defined as
Employee's inability by reason of illness or other physical or mental
incapacity to perform the duties required by his employment for any
consecutive one hundred eighty (180) day period.
8. Compensation Upon Termination or During Disability. In the event of
termination of Employee's employment pursuant to section 7 hereof, the parties
agree that the following terms set forth the exclusive severance arrangements
between the parties relating to such termination:
a. In the event of termination pursuant to subsection 7a or 7c, Employee
shall be entitled to receive the compensation provided for herein
(including Base Compensation ) through the date of termination
specified in the notice of termination. Employee shall only
2
<PAGE>
participate in the employee benefit, retirement, and compensation
plans and other perquisites as provided in sections 5 and 6 hereof,
through the date of termination. Any benefits payable under insurance,
health, retirement and bonus plans as a result of Employee's
participation in such plans through such date shall be paid when due
under those plans.
b. In the event of termination pursuant to subsection 7b, Employee shall
be entitled to receive an amount equal to his then current monthly
Base Compensation until April 13, 1999. Employee shall only
participate in the employee benefit, retirement, and compensation
plans and other perquisites as provided in sections 5 and 6 hereof,
through such date of termination. Any benefits payable under
insurance, health, retirement and bonus plans as a result of
Employee's participation in such plans through such date shall be paid
when due under those plans.
c. In the event of termination pursuant to subsection 7d, Employee shall
be entitled to receive the compensation provided for herein (including
Base Compensation) through the date of termination. Employee shall
only participate in the employee benefit, retirement, and compensation
plans and other perquisites as provided in sections 5 and 6 hereof,
(i) in the event of Employee's death, or (ii) in the event of
Employee's disability, through the date of proper notice of disability
as required by subsection 7d. Any benefits payable under insurance,
health, retirement and bonus plans as a result of Employer's
participation in such plans through such date shall be paid when due
under those plans.
9. Notice of Termination. Any termination of Employee's employment with
Employer as contemplated by section 7 hereof, except in the circumstances of
Employee's death, shall be communicated by written notice of termination by the
terminating party to the other party hereto. Any notice of termination pursuant
to subsection 7a or 7c shall indicate the specific provision of this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.
10. Confidential Information. It is understood that Employee may acquire
knowledge of and will continue to be informed of confidential information and
trade secrets of Employer. Employee agrees that all such confidential
information is in the nature of trade secrets and is the sole property of
Employer. Employee will keep confidential, and will not reproduce, copy or
disclose to any other person or firm, any information relating to such
confidential information and trade secrets. Employee agrees that upon
termination of this Agreement, he shall surrender promptly to Employer any and
all trade secrets, internal memoranda and other documents disclosing any
confidential information which he may possess and that such trade secrets,
memoranda and documents shall be and remain the sole property of Employer. All
of the terms of this section 10 shall remain in full force and effect both
during the Term of this Agreement and after the termination of this Agreement
for any reason.
11. Noncompetition During Agreement. Employee agrees that during the term
of this Agreement, he will not, directly or indirectly, engage in as an
employee, officer, partner or stockholder of, or provide consultation to, any
other person engaged in the retail footwear industry (except as the holder of 5%
or less of the stock of a publicly held corporation).
12. Remedies. The parties hereto agree and acknowledge that many of the
rights conveyed by this Agreement are of a unique and special nature and that
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<PAGE>
Employer will not have an adequate remedy at law in the event that Employee
fails to abide by its terms and conditions, nor will money damages adequately
compensate for such injury. It is therefore, agreed between the parties that in
the event of breach by Employee of his obligations contained in sections 10 or
11 of this Agreement, Employer shall have the rights, among other rights, to
damages sustained thereby and to an injunction to restrain Employee from the
prohibited acts. Employee agrees that this section shall survive the termination
of this Agreement and Employee shall be bound by its terms at all times
subsequent to the termination thereof for so long a period as Employer continues
to conduct the same business it was conducting during the Term of this
Agreement. Nothing herein contained shall in any way limit or exclude any and
all other rights granted by law or equity to Employer.
13. Attorneys' Fees. In any action at law or in equity to enforce any
provisions or rights under this Agreement, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree, shall pay
attorneys' fees incurred by the successful party (including without limitation,
costs, expenses, and fees on any appeals), and if the successful party recovers
judgment in any such action or proceeding, such costs, expenses, or attorneys'
fees shall be included as part of the judgment.
14. Successors. Should Employee die after termination of his employment
with Employer while any amounts are payable to him hereunder, this Agreement
shall inure to the benefit of and be enforceable by Employee's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this Agreement
to Employee's devisee, legatee or other designee or, if there is no such
designee, to his estate.
15. Notice. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Employee: 118 Norcross Lane
Mooresville, NC 28115
If to Employer: Shoe Carnival, Inc.
8233 Baumgart Road
Evansville, IN 47711
Attn: Chief Executive Officer
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
16. Indiana Law. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Indiana.
17. Amendment and Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Employee and Employer. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of dissimilar provisions or conditions at the same or
any prior or subsequent time. No agreements or representation, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
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18. Severability. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.
19. Assignment. This Agreement is personal in nature and neither party
hereto shall, without consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder, except as provided in section 14 above.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
SHOE CARNIVAL, INC.
By: /s/ Mark L. Lemond
Mark L. Lemond
President and Chief Executive Officer
"Employer"
By: /s/ Cliff Sifford
Cliff Sifford
"Employee"
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE PERIOD ENDED MAY 3, 1997, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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