-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B5c8LQp++hMopGnH7R1q+NAfEvwX/IgMvYSpggRkSFVZbr9846V9AUop4piTxHnT 2kVP/MnrhDb/U8GI2+Ss1Q== 0000948688-99-000016.txt : 19990518 0000948688-99-000016.hdr.sgml : 19990518 ACCESSION NUMBER: 0000948688-99-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990327 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JITNEY JUNGLE STORES OF AMERICA INC /MI/ CENTRAL INDEX KEY: 0001005408 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 640280539 STATE OF INCORPORATION: MI FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-80833 FILM NUMBER: 99628451 BUSINESS ADDRESS: STREET 1: 3800 I 55 NORTH STREET 2: STE 200 CITY: JACKSON STATE: MS ZIP: 39211 BUSINESS PHONE: 6019658625 MAIL ADDRESS: STREET 1: JITNEY JUNGLE STORES OF AMERICA INC STREET 2: 3800 I 55 NORTH CITY: JACKSON STATE: MS ZIP: 39211 FORMER COMPANY: FORMER CONFORMED NAME: JJ ACQUISITIONS CORP DATE OF NAME CHANGE: 19951227 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Pursuant To Section 13 or 15 (d) of The Securities and Exchange Act of 1934 QUARTER ENDED March 27, 1999 COMMISSION FILE NO. 33-80833 JITNEY-JUNGLE STORES OF AMERICA, INC. (Exact name of registrant as specified in its charter) STATE OF INCORPORATION I.R.S. EMPLOYER I.D. NO. Mississippi 64-0280539 ADDRESS OF PRINCIPAL EXECUTIVE OFFICE 1770 Ellis Avenue, Suite 200, Jackson, MS 39204 REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE 601-965-8600 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, and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO The number of shares of Registrant's Common Stock, par value one cent ($.01) per share, outstanding at May 17, 1999, was 425,180 shares. CAUTIONARY NOTICE This Quarterly Report on Form 10-Q may contain forward- looking statements regarding future expectations about the Company's business, management's plans for future operations or similar matters. The Company's actual results could differ materially from those anticipated in such forward-looking statements due to several important factors including the following: deterioration in economic conditions generally or in the Company's markets, unusual or unanticipated costs or consequences relating to, or changes in any acquisition and/or divestiture plans, demands placed on management by the substantial increase in the Company's size due to the acquisition of Delchamps, unanticipated or unusual distribution problems, breakdown of quality control, competitive pressures, relationships with its major suppliers, restrictions and costs associated with the Company's leveraged capital structure and limitations imposed by its debt agreements, labor disturbances, and customer dissatisfaction. Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they may occur. JITNEY-JUNGLE STORES OF AMERICA, INC. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Page Item 1.Financial Statements: Condensed Consolidated Balance Sheets March 27, 1999 (Unaudited) and January 2, 1999 2 Condensed Consolidated Statements of Operations Twelve (12) Week Period Ended March 27, 1999 (Unaudited) and Twelve (12) Week Period Ended March 28, 1998 (Unaudited) 3 Condensed Consolidated Statements of Changes in Stockholders' Deficit Twelve (12) Week Periods Ended March 27, 1999 (Unaudited) and March 28, 1998 (Unaudited) 4 Condensed Consolidated Statements of Cash Flows Twelve (12) Week Periods Ended March 27, 1999 (Unaudited) and March 28, 1998 (Unaudited) 5 Notes to Condensed Consolidated Financial Statements March 27, 1999 (Unaudited) March 28, 1998 (Unaudited) 6-8 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13 PART II.OTHER INFORMATION Item 1.Legal Proceedings 12 Item 2.Change in Securities 12 Item 3.Defaults Upon Senior Securities 12 Item 4.Submission of Matters to a Vote of Security Hold 12 Item 5.Other Information 12 Item 6.Exhibits and Reports on Form 8-K 12-13
PART I. ITEM 1. FINANCIAL STATEMENTS JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands,except per share amounts) March 27, January 2, 1999 1999 (Unaudited) ASSETS ----------- ----------- Current assets: Cash and cash equivalents $ 9,246 $ 18,041 Receivables 25,832 28,197 Refundable income taxes 4,046 16,862 Merchandise inventories 183,303 166,774 Prepaid expenses and other 1,269 5,655 ---------- ---------- Total current assets 223,696 235,529 ---------- ---------- PROPERTY AND EQUIPMENT - net 296,723 297,454 ---------- ---------- Other assets Goodwill, net of amortization of $5,186 at March 27, 1999 and $4,250 at January 2, 1999 130,244 131,206 Other assets - net 25,820 26,957 ---------- ---------- Total other assets 156,064 158,163 ---------- ---------- TOTAL ASSETS $ 676,483 $ 691,146 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 104,960 $ 138,087 Accrued expenses 71,333 69,995 Current portion of capitalized leases 5,789 5,789 Restructuring obligations 10,880 10,880 ---------- ---------- Total current liabilities 192,962 224,751 Noncurrent liabilities: Long-term debt 544,862 517,071 Obligations under capitalized leases, excluding current installments 63,527 62,935 Restructuring obligations, excluding current installments 20,049 21,407 ---------- ---------- Total liabilities 821,400 826,164 Commitments and contingencies Redeemable Preferred stock (aggregate liquidation preference value of $75,332 at March 27, 1999 and $73,279 at January 2, 1999) 73,553 71,452 Stockholders' deficit: Class C Preferred stock - Series 1(at liquidation value) 10,203 9,973 Common stock ($.01 par value, authorized 5,000,000 shares, issued and outstanding 425,180 and 425,280 shares, respectively) 4 4 Additional paid-in capital (302,305) (302,305) Retained earnings 73,628 85,858 ---------- ---------- Total (218,470) (206,470) ---------- ---------- Total stockholder's deficit (218,470) (206,470) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 676,483 $ 691,146 ========= ========= See notes to condensed consolidated financial statements.
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands except per share amounts) Twelve Weeks Ended March 27, March 28, 1999 1998 (Unaudited) (Unaudited) ---------- ----------- NET SALES $ 459,991 $ 474,209 ---------- ----------- COSTS AND EXPENSES: Cost of goods sold 338,027 358,122 Direct store expenses 93,495 94,223 Warehouse, administrative and general expenses 21,270 18,121 Interest expense - net 17,100 15,223 Acquisition integration costs and other special charges 13,996 ---------- ----------- Total costs and expenses 469,892 499,685 ---------- ----------- Loss before taxes on income (9,901) (25,476) Income tax benefit - (9,151) ---------- ----------- NET LOSS $ (9,901) $ (16,325) ========== =========== LOSS PER COMMON SHARE $ (28.77) $ (43.57) ========== =========== LOSS PER COMMON SHARE-DILUTED $ (28.77) $ (43.57) ========== =========== See notes to condensed consolidated financial statements.
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE TWELVE (12) WEEK PERIODS ENDED MARCH 27, 1999 (Unaudited) AND MARCH 28, 1998 (Unaudited) (Dollars in thousands) Class C Preferred Stock, Series 1 Common Stock Additional Treasury No. of No. of Paid-In Retained Stock at Shares Amount Shares Amount Capital Earnings Cost -------- -------- ------- ------- ------------ ----------- ---------- Balance Jan 3, 1998 76,042 $ 9,071 425,000 $ 4 $ (302,326) $ 125,351 $ - Net loss (16,325) Purchase of 850 shares of treasury stock (10) Accretion of discount on Class A Preferred stock (48) Cumulation of dividends on Preferred stock 208 (2,101) Balance ------ -------- ------- ------- ------------ ----------- -------- March 28, 1998 76,042 $ 9,279 425,000 $ 4 $ (302,326) $ 106,877 $ (10) ====== ======== ======= ======= ============ =========== ======== Balance Jan 2, 1999 76,042 $ 9,973 425,280 $ 4 $ (302,305) $ 85,858 $ - Net loss (9,901) Purchase of 100 shares of treasury stock (100) (1) Accretion of discount on Class A Preferred stock (48) Cumulation of dividends on Preferred stock 230 (2,281) Balance ------ -------- ------- ------- ------------ ----------- -------- March 27, 1999 76,042 $ 10,203 425,180 $ 4 $ (302,305) $ 73,628 $ (1) ====== ======== ======= ======= ============ =========== ======== See notes to condensed consolidated financial statements.
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Twelve Weeks Ended March 27, March 28, 1999 1998 OPERATING ACTIVITIES: ------------ ----------- Net loss $ (9,901) $ (16,325) Adjustment to reconcile net loss to net cash used in operating activities: Depreciation and amortization 14,243 13,473 Amortization of deferred loan costs 790 564 Gain on disposition of property and other assets (39) Deferred income tax benefit (4,462) Changes in current assets and liabilities, net of effects of acquisition: Receivables 2,365 (184) Store and warehouse inventories (16,529) 9,561 Refundable income taxes 12,816 Prepaid expenses 4,386 (1,339) Accounts payable (33,127) (5,341) Accrued expenses and other 925 (13,812) Restructuring obligations (1,358) (4,027) ---------- ---------- Net cash used in erating activities (25,390) (21,931) ---------- ---------- INVESTING ACTIVITIES: Capital expenditures (10,062) (6,064) Proceeds from sale of property and other assets 920 Purchase of Delchamps, Inc. (9,559) Change in other assets 349 (3,302) ---------- ---------- Net cash used in investing activities (9,713) (18,005) ---------- ---------- FINANCING ACTIVITIES: Proceeds (payments) on long-term debt - net 27,791 40,283 Payments on capitalized lease obligation (1,483) (1,312) Other (806) Purchase of treasury stock (10) Restructuring obligations (1,358) (3,313) ---------- ---------- Net cash provided by financing activities 24,950 34,842 ---------- ---------- DECREASE IN CASH AND CASH EQUIVALENTS (8,795) (1,781) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 18,041 11,984 ---------- ---------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 9,246 $ 10,203 ========== ========== SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ 29,457 $ 25,534 ========== ========== Cash paid for income taxes, net of refunds $ (12,851) $ 11 ========== ========== Noncash investing and financing activities: Capital lease obligations incurred $ 2,075 ========== See notes to condensed consolidated financial statements.
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 27, 1999 (Unaudited) AND MARCH 28, 1998 (Unaudited) (Dollars in thousands) 1. BASIS OF PRESENTATION The unaudited condensed consolidated financial statements include those of Jitney-Jungle Stores of America, Inc. and its wholly-owned subsidiaries, Southern Jitney Jungle Company, Interstate Jitney- Jungle Stores, Inc., McCarty-Holman Co., Inc. and subsidiary, Jitney-Jungle Bakery, Inc., Delchamps Inc. and subsidiary and JJ Construction Corp. All material intercompany profits, transactions and balances have been eliminated. The condensed consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the Form 10-K filed by the Company for fiscal year ending January 2, 1999. The accompanying condensed financial statements have not been audited by independent accountants in accordance with generally accepted auditing standards, but in the opinion of management such condensed financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Company's financial position and results of operations. The results of operations of the Company for the twelve weeks ended March 27, 1999, are not necessarily indicative of the results which may be expected for the entire year. 2. ACQUISITION In September 1997, the Company acquired the majority of the common stock of Delchamps, Inc. Certain shareholders dissented from the merger and indicated that they will pursue their appraisal remedy under Alabama law. Management does not expect this matter to have a material affect on operations or the price of the acquisition. The acquisition was accounted for as a purchase and, accordingly, Delchamps' results of operations were included in the Company's consolidated financial statements subsequent to the acquisition date. The purchase price could be affected by a final determination of amounts to be paid to former shareholders of Delchamps who dissented from the merger ( and related professional fees). The purchase price, net of cash acquired of $84 and including direct acquisition costs, has been allocated to the assets acquired and liabilities assumed based upon the fair values at the date of acquisition, as set forth below.
Receivables and other current assets $ 12,569 Inventory 101,199 Property, equipment and leasehold improvements 116,431 Deferred income tax asset 10,428 Other assets 2,106 Goodwill 135,454 Accounts payable and accrued expenses (74,643) Notes payable and long-term debt , immediately repaid (14,463) Capital lease obligations (10,794) Restructuring obligation (41,967) ____________ Net purchase price $ 236,320 ============
3. ACQUSITION INTEGRATION COSTS AND OTHER SPECIAL CHARGES The Company incurred significant costs during the year ended January 2, 1999 as a result of integrating the Delchamps and Jitney-Jungle operations. Certain of these costs (principally related to store closures) were allocated to goodwill. However, other costs attributable to the Delchamps acquisition, including costs incurred in consolidating warehouse operations, remerchandising of Delchamps stores, and training of Delchamps employees have been expensed as acquisition integration costs in accordance with the guidelines set forth in EITF 95-3 ("Recognition of Liabilities in Connection with a Purchase Business Combination"). Acquisition integration costs and other special charges include the following: $13,452 of business integration costs related to Delchamps, severance benefits of $250 and loss of $294 on stores sold under the consent decree with the Federal Trade Commission in the Delchamps acquisition. 4. LONG-TERM DEBT Long-term debt consisted of the following:
March 27, January 2, 1999 1999 --------- --------- Senior notes at 12%, maturing in 2006 $ 200,000 $ 200,000 Senior subordinated notes at 10.38% maturing in 2007 200,000 200,000 Senior Credit Facility 140,740 112,950 Other long-term debt 4,122 4,121 --------- --------- Long-term debt $ 544,862 $ 517,071 ========= =========
The Company has available a Senior Credit Facility of $162.3 million under which letters of credit aggregating $6.3 million were outstanding at March 27, 1999. 5. LOSS PER COMMON AND COMMON EQUIVALENT SHARE Loss per common and common equivalent share is based on the net income (loss) after preferred stock dividend requirements and the weighted average number of shares outstanding during each interim period. Cumulative dividends not declared or paid on preferred shares amounted to $2,286 for the twelve weeks ended March 27, 1999. The number of shares used in computing the loss per share was 425,232 for the twelve weeks ended March 27, 1999 and 424,150 for the twelve weeks ended March 28, 1998. Potential common shares attributed to outstanding warrants were not included in the computation as their effect on the loss per share would be antidilutive. 6. COMMITMENTS AND CONTINGENCIES The Company is a party to certain litigation incurred in the course of business. In the opinion of management, the ultimate liability, if any, which may result from this litigation will not have a material adverse effect on the Company's financial position or results of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands) The following is management's discussion and analysis of significant factors affecting the Company's earnings and liquidity during the periods included in the accompanying condensed consolidated statements of operations. This discussion and analysis should be read in conjunction with the condensed consolidated financial statements included in Item 1. A table showing the percentage of net sales represented by certain items in the Company's condensed consolidated statements of operations is as follows:
Twelve Weeks Ended March 27, March 28, 1999 1998 --------- --------- Net sales 100.0 % 100.0 % Gross profit 26.5 24.5 Direct store expenses 20.3 19.9 Warehouse, administrative and general expenses 4.6 3.8 Operating income 1.6 0.8 Interest expense, net 3.7 3.2 Acquisition integration costs and other special charges 3.0 Loss before income taxes (2.1) (5.4) Income tax benefit 0.0 (1.9) Net loss (2.1) (3.4) EBITDA 4.7 3.6
A summary of the period to period changes in certain items included in the condensed consolidated statements of operations for the twelve week periods ended March 27, 1999 and March 28, 1998 is as follows:
Period-to-Period Changes Twelve Weeks Ended March 27, 1999 $ % -------- -------- Net sales $(14,218) (3.0)% Gross profit 5,877 5.1 Direct store expenses (728) (0.7) Warehouse, administrative and general expenses 3,147 17.4 Operating income 3,456 n/m Interest expense, net 1,877 12.3 Acquisition integration and other special charges (13,996) n/m Loss before income taxes 15,577 n/m Income tax benefit 9,151 n/m Net loss 6,426 n/m EBITDA 4,227 24.6 (n/m - not meaningful comparison)
RESULTS OF OPERATIONS NET SALES Net sales decreased $14,218 or 3.0% in the twelve week period ended March 27, 1999 compared to the corresponding period ended March 28, 1998. The net sales decrease was primarily attributable to closing 23 stores (17 of which were closed during the first quarter of the prior year in connection with the Delchamps acquisition including 10 stores which were required to be sold by the Federal Trade Commission); 40 new competitive openings over the past four quarters; low overall price inflation; and pricing and promotional changes by certain competitors over the last year. Partially offsetting these factors were the impact of opening 4 new "Premier" stores, remodeling 17 stores during the year, and additional promotional activities during the quarter. Same store sales decreased approximately 0.3% for the twelve week period ended March 27, 1999. The Company's store count at the end of the quarter was 198 supermarkets (21 combination stores, 161 conventional stores and 16 discount stores) and 54 gasoline stations compared to 200 supermarkets (11 combination stores, 169 conventional stores and 20 discount stores) and 53 gasoline stations at March 29, 1997. GROSS PROFIT Gross profit for the first quarter of fiscal 1999 increased $5,877 to $121,964, or 26.5% of net sales, compared to $116,087, or 24.5% of net sales, for the first quarter of fiscal 1998. Gross margin improvements were attributable to improved procurement costs as a result of the Delchamps acquisition, partially offset by the increased promotional activities, competitive influences and low inflation discussed above. DIRECT STORE EXPENSES Direct store expenses were $93,495, or 20.3% of net sales, and $94,223, or 19.9% of net sales, for the twelve week period ended March 27, 1999 and March 28, 1998, respectively. Direct store expenses increased primarily as a result of increased cash shortages, services and supplies. They were partially offset by improvements in store labor, repairs and maintenance, insurance and utilities (fewer stores). WAREHOUSE, ADMINISTRATIVE AND GENERAL EXPENSES Warehouse, administrative and general expenses were $21,270, or 4.6% of net sales and $18,121, or 3.8% of net sales, for the twelve week period ended March 27, 1999 and March 28, 1998 respectively. Warehouse, administrative and general expenses increased primarily due to increased costs associated with the employer portion of group medical expense, relocation expense, litigation settlements and increased depreciation due to additional capital expenditures placed in service during fiscal year 1998 and the beginning of 1999. ACQUISITION INTEGRATION CHARGES AND OTHER SPECIAL CHARGES The Company incurred significant costs during the year ended January 2, 1999 as a result of integrating the Delchamps and Jitney-Jungle operations. Certain of these costs (principally related to store closures) were allocated to goodwill. However, other costs attributable to the Delchamps acquisition, including costs incurred in consolidating warehourse operations, remerchandising of Delchamps stores, and training of Delchamps employees have been expensed as acquisition intergration costs in accordance with the guidelines set forth in EITF 95-3 ("Recognition of Liabilities in Connection with a Purchase Business Combination"). These Acquisition integration charges and other special charges were $13,996 for the twelve week period ended March 28, 1998 consisting of severance benefits of $250 and loss of $294 on stores sold under the consent decree with the Federal Trade Commission in the Delchamps acquisition and business integration costs of $13,452 related to Delchamps. There were no acquisition integration charges and other special charges during the first quarter of fiscal 1999. OPERATING INCOME Operating income was $7,199, or 1.6% of net sales for the twelve week period ended March 27, 1999, as compared to $3,743, or 0.8% of net sales for the twelve week period ended March 28, 1998. The increase in operating income was due to the factors discussed above. EBITDA EBITDA (net income before interest income, special charges, interest expense, income taxes, depreciation and amortization and LIFO charges/credits) was $21,444, or 4.7% of net sales, in the first quarter of fiscal compared to $17,216, or 3.6% of net sales, in the first quarter of fiscal 1998. EBITDA as presented is consistent with the definition used for covenant purposes contained in the Indenture. EBITDA is a widely accepted financial indicator of a company's ability to service debt. However, EBITDA should not be construed as an alternative to operating income, net income or cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as an indication of the Company's operating performance or as a measure of liquidity. NET INTEREST EXPENSE Interest expense was $17,100 in the first quarter of fiscal 1999 compared to $15,223 in the first quarter of fiscal 1998. The increase in interest expense was primarily due to interest expense on the credit facility and capital leases. INCOME TAX EXPENSE (BENEFIT) The Company has not recorded an income tax benefit relating to operating losses in 1999 since the Company's operating losses can no longer be carried back and offset against earnings in earlier periods. The Company has a net operating loss carryforward of approximately $51,572 at March 27, 1999. Income taxes were ($9,151) with an effective tax rate of 35.9% for the first quarter of fiscal 1998. LIQUIDITY AND CAPITAL RESOURCES Historically, the Company has funded its working capital requirements, capital expenditures and other needs principally from operating cash flows. Due to the merger and acquisition of Delchamps, however, the Company has become highly leveraged and has certain restrictions on its operations. At March 27, 1999, Jitney-Jungle had $645,107 of total long-term commitments (including long-term debt, capitalized leases and restructuring obligations) and shareholder deficit of $218,470. The Company's principal uses of liquidity have been to fund working capital, meet debt service requirements and finance Jitney-Jungle's strategic plans. The Company's principal sources of liquidity have been cash flow from operations and borrowings under the Senior Credit Facility. Outstanding borrowings at March 27, 1999 were $140,740 under the Senior Credit Facility. At March 27, 1999, the Company breached the leverage ratio in its Senior Credit Facility and such breach has been waived by its senior lenders. As of March 27, 1999, the Company was in compliance with the covenants under its aggreements. Cash used in operating activities during the twelve week period ended March 27, 1999 was $25,390. Cash used by operating activities during the twelve week period ended March 28, 1998 was $21,931. The increase in the cash used in operating activities was primarily attributable to increased inventory levels (new and remodeled stores, buildup in anticipation of the Easter Holiday), reduced accounts payable (cut-off timing difference at year-end and repayment during the quarter of year-end holiday merchandise); partially offset by a smaller net loss and the collection of income tax refunds. Net cash used in investing activities was $9,713 and $18,005 for the twelve week period ended March 27, 1999 and March 28, 1998, respectively. One new store was completed and six remodels were in progress during the first quarter of 1999. Cash used in investing activities included amounts associated with the purchase of Delchamps, Inc. in the prior year. Net cash provided by financing activities was $26,308 and $38,155 for the twelve week period ended March 27, 1999 and March 28, 1998, respectively. The principal sources of funds in financing activities for both periods were borrowings under the Senior Credit Facility. In order for the Company to grow and achieve its long-term operating objectives, it requires sufficient capital resources to build new stores and remodel existing stores in its highly competitive markets. In addition, the Company must maintain its existing facilities, and requires the financial flexibility both to take advantage of inventory acquisition opportunities and to withstand short-term economic and competitive pressures. The Company's capital expenditure program for the remainder of 1999 is subject to various factors including, but not limited to, availability of capital, restrictions under various of the Company's debt instruments, and working capital requirements. In the near term, if the Company were to significantly reduce or postpone its new store and remodel program, there would be no substantial impact on current operations and it is likely that more cash would be available for debt servicing. In the long term, if these programs were substantially reduced, in the Company's opinion, its operating business and ultimately its cash flow would be adversely impacted. To enable the Company to continue to fulfill its working capital needs and to implement its capital expenditure program, the Company and its subsidiaries are currently arranging a $35,000,000 supplemental secured credit facility (the "New Facility") which will be secured by a second lien on substantially all of the Company's and its subsidiaries' assets. The New Facility will be further supported by the guaranty of Bruckmann, Rosser, Sherrill & Co., L.P., the Company's principal shareholder. Completion of arrangements for the New Facility is subject to completion of documentation acceptable to the lenders under the New Facility and the Company, to the consent of the Company's existing secured lenders and to other customary conditions precedent to the extension of a secured credit facility. The Company believes that the New Facility will be available to the Company and will permit it to borrow enough to meet all of its currently anticipated working capital and capital expenditure needs. An important factor in the Company's liquidity is its relationship with its trade suppliers, and management believes that the Company's credit terms with its major suppliers are consistent with those terms offered throughout the industry. Management does not expect that there will be any significant change in the aggregate in credit terms with its major suppliers in the future; however, if credit is curtailed, the Company's liquidity would decrease. The Company's expenditures to comply with environmental laws and regulations at its grocery stores primarily consist of those related to remediation of underground storage tank leaks and spills and retrofitting chlorofluorocarbon ("CFC") chiller units. The Company's unreimbursed cost for remediation at the 16 facilities which have had leaks or spills has not been material. All significant required expenditures in connection with the cleanup of such leaks and spills have been made at such locations except at two locations which are undergoing remediation and three locations which are geing monitored only. In addition, the Company has obtained insurance coverage for bodily injury, property damage and corrective action expenses resulting from releases of petroleum products from underground storage tanks during the covered period at all 58 locations. The Company spent $5,000, $170,000, $130,000, $914,000 and $468,000 for retrofitting CFC-containing chiller units during the first quarter of 1999, fiscal 1998, 1997 stub, fiscal 1997 and fiscal 1996, respectively. Between approximately $175,000 and $200,000 in expenditures are contemplated for retrofitting the CFC units in fiscal 1999. All expenditures necessary to upgrade all Pump and Save tanks to comply with 1998 tank standards were completed in fiscal 1998. These regulatory compliance costs are not covered by insurance. INFLATION The Company's primary costs, inventory and labor, are affected by a number of factors that are beyond its control, including availability and price of merchandise, the competitive climate and general and regional economic conditions. As is typical of the supermarket industry, the Company has generally been able to maintain margins by adjusting its retail prices, but competitive conditions may from time to time render it unable to do so while maintaining its market share. SEASONALITY No material portion of the Company's business is affected by seasonal fluctuations, except that sales are generally stronger in the fourth quarter as a result of the Thanksgiving, Christmas and New Year's Day holidays. YEAR 2000 During calendar years 1996, 1997 and 1998, the Company's Information Services Department conducted an extensive information services system review of all primary systems, such as financial, payroll, human resources, employee benefits, purchasing, merchandising, retail/pricing, warehousing and store management as well as secondary systems such as catering, damage reclamation and loss prevention. This review evaluated these systems in terms of their Year 2000 compliance, flexibility to absorb Delchamps' operations, capacity, general efficiency, compatibility and competitive advantage. The Information Services Department recommended, and the Company is implementing, the replacement or upgrading of all the Company's primary and secondary systems, most of which were 10 to 15 years old. From March 1997 to January 2, 1999, the Company spent, excluding license fees, approximately $2,600,000 to replace its financial, payroll, human resources and employee benefits systems. The Company's other primary systems (purchasing, merchandising, retail/pricing, warehousing and store management) are scheduled to be replaced and/or remediated by October 1, 1999, at an estimated cost of $2,850,000, at which time all potential Year 2000 problems in the Company's primary systems should be resolved. Although the Company's operations are not dependent on its secondary systems, the Company has been upgrading these systems and anticipates completing that project by the end of September 1999, at which time all potential Year 2000 problems in the Company's secondary systems should be resolved. No assurances can be given, however, that all Year 2000 problems will be effectively resolved on schedule or before the Year 2000. Any such problems, if not resolved, could have a material adverse effect on the Company's business, financial condition and results of operations. The Company has sent a survey to its third party suppliers, financial institutions and insurance companies (i) inquiring into their Year 2000 compliance status, (ii) seeking commitments of their intention to become Year 2000 compliant and (iii) gathering information to assess the effect of any non-compliance on the Company's operations. No assurances can be given that these third parties will become Year 2000 compliant. Any such non- compliance could have a material adverse effect on the Company's business, financial condition and results of operations. The most reasonably likely worst case Year 2000 scenario would result in the failure to order or acquire new products for warehouse or store replenishment. The Company has established a disaster recovery plan that is available as a reasonable contingency plan. Through this disaster recovery plan, manual processes are outlined that will enable the Company to order and obtain available products for delivery to the stores without reliance on existing primary technology normally used by the Company. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is a party to certain litigation incurred in the course of business. In the opinion of management, the ultimate liability, if any, which may result from this litigation will not have a material adverse effect on the Company's financial position or results of operations. ITEM 2. CHANGE IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit No. -------------- * 4.14 Waier Agreement dated May 17, 1999 to the Amended and Restated Revolving Credit Agreement dated September 15, 1997 by and among Fleet Capital Corporation and the Company * 10.19 Employement Agreement effective as of 1/4/99 by and among the Company and Richard D. Coleman ** * 27.1 Financial Data Schedule * Filed herewith. ** Portions of this exhibit have been omitted and filed seperately with the Securities and Exchange Commission pursuant to a request for confidential treatment. (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JITNEY-JUNGLE STORES OF AMERICA, INC. (Registrant) /s/ Richard D. Coleman ----------------------- Richard D. Coleman Executive Vice President, Chief Financial Officer Dated: May 17, 1999 EX-4.14 2 WAIVER AGREEMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT WAIVER AGREEMENT dated as of May 17, 1999 to the Amended and Restated Revolving Credit Agreement dated as of September 15, 1997 (as heretofore amended, and as may be further amended, restated, modified or supplemented from time to time, the "Credit Agreement") among Jitney-Jungle Stores of America, Inc. ("Jitney Jungle"), Southern Jitney Jungle Company, McCarty-Holman Co., Inc., Jitney-Jungle Bakery, Inc., Pump and Save, Inc., Interstate Jitney Jungle Stores, Inc., and Delchamps, Inc. ("Delchamps") (each a "Borrower" and collectively, the "Borrowers"), the guarantors named therein, the lenders named therein (the "Lenders") and Fleet Capital Corporation, as agent for the Lenders (the "Agent"). Capitalized terms used herein and not defined shall have the respective meanings assigned to such terms in the Credit Agreement. WHEREAS the Borrowers have requested that the Agent and the Required Lenders agree to waive certain provisions in the Credit Agreement; WHEREAS the Agent and the Required Lenders are willing to waive such provisions of the Credit Agreement on the terms and conditions contained herein; NOW, THEREFORE, the Borrowers, the Guarantors, the Required Lenders and the Agent hereby agree as follows: 1. Waiver. Pursuant to the terms and conditions contained herein, the Agent and the Required Lenders hereby agree to waive compliance with Section 7.09 of the Credit Agreement solely as it pertains to the Fiscal Quarter ended March 27, 1999. 2. Effective Date. This Agreement shall become effective upon compliance with the conditions set forth immediately below: (a) The Agent shall have received an original counterpart of this Waiver, duly executed and delivered by the Borrowers, the Guarantors and the Required Lenders. (b) After giving effect to this Waiver no Default or Event of Default shall have occurred. 3. Ratification. Except as expressly waived herein, all terms and conditions of the Credit Agreement and all other Loan Documents remain in full force and effect. All collateral security and guarantees in connection with the Credit Agreement and/or the Loan Documents are hereby confirmed and ratified in all respects. 4. Counterparts. This Waiver may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall be delivered to the Agent. Delivery of an executed counterpart of a signature page to this Waiver by telecopier shall be effective as delivery of a manually executed signature page hereto. 5. Governing Law. THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF). [Remainder of page intentionally left blank.] IN WITNESS WHEREOF, the parties have caused this Waiver Agreement to be executed by their respective officers thereunto duly authorized, as to the date first above written. JITNEY-JUNGLE STORES OF AMERICA, INC., as Borrower and as Guarantor By__________________________________ Name: Title: SOUTHERN JITNEY JUNGLE COMPANY, as Borrower and as Guarantor By_________________________________ Name: Title: McCARTY-HOLMAN CO., INC., as Borrower and as Guarantor By_________________________________ Name: Title: JITNEY-JUNGLE BAKERY, INC., as Borrower and as Guarantor By_________________________________ Name: Title: PUMP AND SAVE, INC., as Borrower and as Guarantor By_________________________________ Name: Title: INTERSTATE JITNEY JUNGLE STORES, INC., as Borrower and as Guarantor By_________________________________ Name: Title: DELCHAMPS, INC., as Borrower and as Guarantor By_________________________________ Name: Title: JJ CONSTRUCTION CORP., as Guarantor By_________________________________ Name: Title: SUPERMARKET CIGARETTE SALES, INC., as Guarantor By_________________________________ Name: Title: FLEET CAPITAL CORPORATION, as Agent By_________________________________ Name: Title: FLEET CAPITAL CORPORATION, as Lender By________________________________ Name: Title: PNC BANK, NATIONAL ASSOCIATION, as Lender By________________________________ Name: Title: HELLER FINANCIAL INC., as Lender By________________________________ Name: Title: IBJ WHITEHALL BUSINESS CREDIT CORP., as Lender By________________________________ Name: Title: NATIONAL BANK OF CANADA, a Canadian Chartered Bank, as Lender By________________________________ Name: Title: NATIONAL BANK OF CANADA, a Canadian Chartered Bank, as Lender By________________________________ Name: Title: NATIONAL CITY BANK, as Lender By________________________________ Name: Title: DEUTSCHE FINANCIAL SERVICES CORPORATION, as Lender By________________________________ Name: Title: FLEET BANK, N.A., as a Letter of Credit Issuer By________________________________ Name: Title: EX-10.19 3 EMPLOYMENT AGREEMENT This Employment Agreement dated effective as of January __, 1999, is made and entered into by and between Jitney-Jungle Stores of America, Inc., a Mississippi corporation (the "Company"), and Richard D. Coleman (the "Executive"), an individual residing at 5005 Garrick Court, Tampa, Florida 33624. RECITALS The Company desires to employ the Executive in the business operated by the Company, according to the terms, covenants and conditions hereinafter set forth. NOW, THEREFORE, the Company and the Executive hereto agree as follows: 1. Employment and Duties. Subject to the terms hereof, the Company employs Executive as Chief Financial Officer and Executive Vice President of the Company and in such capacities with its affiliates and subsidiaries as the Company shall designate, with such duties as are commensurate and normally associated with the position of Chief Financial Officer, subject to the direction of the Company's Chief Executive Officer and Board of Directors. Executive accepts such employment and agrees to devote substantially his entire professional time, attention and energies to the business of the Company and to perform such additional responsibilities and duties consistent with his position as provided in the Bylaws and as may be assigned to him from time to time by the Board of Directors. Executive shall work at the principal office of the Company located in or near the Jackson, Mississippi metropolitan area or at such other location in or near the Jackson, Mississippi metropolitan area as the Board of Directors, in its discretion, may select. 2. Extent of Services. Executive shall devote substantially all his working time (during normal business hours) and attention (other than during any illness and vacations) and give his good faith efforts, skills and abilities to the management and operations of the Company; it being understood and agreed that Executive shall be permitted to manage his own personal affairs and serve as director or officer of any trade association, civic, corporate, educational or charitable organization or governmental entity, provided that Executive's service does not materially interfere with Executive's performance of his duties hereunder. Notwithstanding the above, the Executive shall not be required to perform any duties or responsibilities which would be likely to result in non-compliance with or violation of any applicable law or regulation. 3. Term. The initial term of this Agreement shall commence as of the effective date hereof and, unless earlier terminated pursuant to Section 8, shall continue thereafter until the earliest of (a) December 31, 1999, (b) until terminated by either party upon the giving of at least thirty (30) days' advance written notice, or (c) the day following the consummation of a transaction giving rise to a Change of Control Event (as defined in Section 8(e) of the Agreement). 4. Compensation. Executive's compensation under this Agreement shall be as follows: (a) Base Salary. Company shall pay Executive a base salary ("Base Salary") at a rate of no less than $200,000.00 per year from the date hereof. The Base Salary shall be inclusive of all compensation for any services Executive may be elected or selected to perform (i) as a member of the Board of Directors of the Company and/or any of its affiliates and subsidiaries, or (ii) as a member of any appointed committees of such Boards of Directors, including the Executive Committee. Executive's Base Salary shall be paid in installments in accordance with the Company's normal payment schedule for its senior management. All payments shall be subject to the deduction of payroll taxes and similar assessments as required by law. (b) Bonus. In addition to the Base Salary, Executive shall be paid on December 31, 1999 a cash bonus of $300,000.00 provided any of the following occur: (i) Executive remains employed with Company as the Chief Financial Officer through December 31, 1999; (ii) the Company terminates this Agreement without Cause (as hereinafter defined); or (iii) the Executive terminates this Agreement for Good Reason (as hereinafter defined). 5. Fringe Benefits. (a) The Company agrees to furnish an automobile to Executive and to make such automobile available for the Executive's exclusive use during the period of his employment with the Company. All maintenance, taxes and other operating costs shall be paid by the Company, subject to appropriate withholding requirements. (b) The Company shall also make available to Executive those benefits which are made available to the executive officers of the Company as a group, which benefits currently include, without limitation, 401(k) plans, profit sharing plans, and health, dental, and disability insurance. (c) The Company shall also furnish Executive with suitable living arrangements in Jackson, Mississippi. 6. Vacation. Executive shall be entitled to take three weeks of paid vacation during each fiscal year in which he is employed. Accrued but unused vacation shall be carried over only in accordance with the Company's standard policies. 7. Expense Reimbursement. In addition to the compensation and benefits provided in Sections 4, 5 and 6 hereof, the Company shall, upon receipt of appropriate documentation, reimburse Executive for his reasonable travel, lodging, entertainment, and other ordinary and necessary business expenses incurred in the course of his duties on behalf of the Company, including weekly travel to and from Executive's home in Tampa, Florida. 8. Termination of Employment. (a) Either party may terminate Executive's employment under this Agreement for any reason by giving thirty (30) days' written notice to the other party. In the event of a termination by the Company, the Company may elect that the Executive cease all services and leave the premises immediately. Following the termination of Executive's employment for any reason, Executive shall remain entitled to (i) the portion of his Base Salary then due through the date of such termination, (ii) reimbursement for any reimbursable expenses incurred by Executive prior to such termination and (iii) all benefits which are accrued, vested and earned up to the termination date under the terms of any existing benefit plan of the Company, such as the vested balance of Executive's account under any retirement or deferred compensation plan and any benefits which are legally required to be provided after termination, such as COBRA benefits. If the Company terminates Executive's employment without Cause pursuant to this Section 8(a) or if the Executive resigns at the request (without Cause) of the Board of Directors or terminates his employment for Good Reason, Executive shall be paid, in addition to any amounts described in the preceding sentence, an amount equal to the sum of (x) the balance of the Base Salary that otherwise would be paid through December 31, 1999, plus (y) the bonus to which Executive would be entitled pursuant to Section 4(b) of this Agreement. The Executive shall continue to receive all benefits under the health benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other peer executives of the Company through the earlier of December 31, 1999, or until the date Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan. All cash severance compensation amounts owed pursuant to this Section 8(a) shall be paid through December 31, 1999 following the effective date of Executive's termination in the normal payment schedule as if Executive remained employed except that the bonus deemed earned by Executive on the date of termination specified above in this Section 8(a) shall be paid in a lump sum within thirty (30) days following the effective date of Executive's termination. If Executive notifies the Company of his intention to terminate his employment pursuant to this Section 8(a) for any reason, the Company shall have the right to accelerate the date of termination to a date on or after the date of Executive's notice. The Executive's termination of employment is deemed for "Good Reason," if any of the following occurs without the Executive's written consent: (i) the assignment to Executive of any duties materially inconsistent with, or the substantial reduction of powers or functions associated with, his positions, duties, responsibilities and status with the Company (other than changes in reporting or management responsibilities required by applicable federal or state law); (ii) a reduction by the Company of Executive's salary or a material reduction in other benefits taken as a whole (except to the extent such benefits are no longer generally available to members of management of the Company), except in connection with the termination of such Executive's employment by the Company for Cause (it being understood that failure to receive bonus payments at the same level as in prior years or periods shall not be deemed to be a reduction in salary); (iii) a change in Executive's principal work location, except for required travel on the Company's business; or (iv) the willful and continuing failure by the Company substantially to perform its obligations under this Agreement; provided, however, "Good Reason" shall not be deemed to exist hereunder unless the Company shall have failed to cure any breach or nonperformance within thirty (30) days after receipt by the Company of written notice thereof from the Executive, which notice shall be given by Executive promptly and in any event within fifteen (15) days after any event that the Executive believes constitutes "Good Reason." It is hereby expressly acknowledged that the foregoing definition of "Good Reason" shall be effective solely for purposes of this Agreement and shall not be applicable to any other agreement or understanding between Executive and the Company. "Cause" when used in connection with the termination of Executive's employment with the Company, means (A) act or acts of dishonesty or conviction of a felony by Executive; provided acts of "dishonesty" shall not extend to expense account items to the extent the items involved are nominal and any error is attributable to carelessness or committed in good faith within reasonable interpretation of the Company's policies, (B) failure by the Executive in any material respect as to his obligations, services or duties hereunder, which determination shall be made by the Board of Directors of the Company acting in good faith; provided, however, "Cause" shall not be deemed to exist hereunder unless the Executive shall have failed to cure any such breach or nonperformance within thirty (30) days after receipt by the Executive of written notice thereof from the Company, (C) willful and deliberate violations of Executive's obligations (whether such obligations are designated by the Board of Directors or are set forth herein) to the Company that result in material injury to the Company and (D) misappropriation or embezzlement of any funds or property of the Company by the Executive. For purposes of this definition of Cause, no act or failure to act, shall be considered "willful" unless done, or omitted to be done, (1) in bad faith and without reasonable belief that the action or omission was in the best interest of the Company or, (2) in the event the direction of the Board of Directors is unclear, without the reasonable belief that the action or omission was in the best interest of the Company. In the event that there is a disagreement regarding the existence of Good Reason or Cause (other than for conviction of a felony), either party may submit such disagreement to arbitration under the rules of the American Arbitration Association or such other procedure as the parties may agree. The ruling of the arbitration shall be final and binding on both parties. The Company and the Executive shall each pay their own arbitration costs unless the arbitrator's award determines otherwise, in which case such costs, expenses, and fees shall be paid in accordance with the arbitrator's award. The arbitration proceeding shall be conducted in Atlanta, Georgia. (b) Notwithstanding anything to the contrary in Section 8(a), the Company may terminate Executive's employment, effective immediately upon written notice to Executive or on any other dates specified in such notice, for Cause. Termination by the Company of Executive's employment for any other reason shall be deemed for the purposes of this Agreement to be without Cause. (c) Executive's employment hereunder shall terminate immediately upon his death or disability except as to any right which Executive's estate or dependents may have under COBRA or any other federal or state law or which are derived independent of this Agreement by reason of his participation in any plan maintained by the Company. For purposes of this Section 8(c), Executive shall be deemed to be disabled if, on account of illness or other incapacity, he has been unable to perform his duties for seventy-five (75) consecutive days and, in the good faith judgment of the Board of Directors, will be unable to perform his duties hereunder for a period of twelve (12) consecutive months. The Company shall continue to pay Executive his base salary and other employment benefits hereunder prior to the termination by the Board of Directors pursuant to this Section 8(c) even though Executive is disabled during that period of time. (d) Severance payments due under Section 8(a) shall be paid when due regardless whether Executive accepts employment with a new employer. (e) In the event (x) a Change of Control Event occurs prior to the later of (i) December 31, 1999, or (ii) the date that is six (6) months after the termination of Executive's employment, and (y) at the time of the Change of Control Event the Executive's employment has not been terminated by the Company for Cause or the Executive has not terminated his employment without Good Reason, the Company agrees to pay to Executive a transaction bonus in the sum set forth on Schedule "A" less the bonus paid or payable to Executive, if any, pursuant to Section 4(b) above (the "Transaction Bonus"). For purposes of this Agreement, the term "Change of Control Event" shall mean the first to occur of any of the following events: (i) the entry by the Company or any of its shareholders into a binding agreement to effect any transaction or series of related transactions (including, but not limited to, any tender officer, exchange offer, merger or other business combination or other similar transaction), the result of which is that less than a majority of the combined voting power of the then outstanding securities of the Company, or any successor to the Company resulting from such transaction or series of related transactions, would be held in the aggregate by holders of the Company's securities immediately prior to such transaction or the beginning of the series of related transactions; or (ii) the entry by the Company into a binding agreement to sell, lease, exchange or otherwise transfer (in one transaction or a series of related transactions) all or substantially all of the assets of the Company. The Transaction Bonus to which Executive is entitled pursuant to this Section 8(e) shall be due and payable in a lump sum on the closing of the transaction giving rise to the Change in Control Event. Notwithstanding anything herein to the contrary, however, the provisions of this Section 8(e) shall not be effective, and shall be of no force or effect, unless and until such provisions are approved by the separate vote of the holders of more than seventy five percent (75%) of the voting power of all of the outstanding stock of the Company. (f) Excess Parachute Payments. In the event that any payment to be received by Executive hereunder would be subject to an excise tax pursuant to Section 4999 of the Code, whether in whole or in part, as a result of being an "excess parachute payment" within the meaning of such term in Section 280G(b) of the Internal Revenue Code, then the amount payable under this Agreement shall be reduced (if necessary) to an amount that results in the greatest after-tax proceeds to Executive. 9. Confidentiality. From and after the date hereof, Executive shall, and shall cause his affiliates and representatives to, keep confidential and not disclose to any other person or use for his own benefit or the benefit of any other person any trade secrets or other confidential proprietary information in his or their possession or control regarding the Company or its affiliates or their respective businesses and operations. The obligation of Executive under this Section 9 shall not apply to information which (i) is or becomes generally available to the public without breach of the commitment provided for in this Section; or (ii) is required to be disclosed by law, order or regulation of a court or tribunal or governmental authority; provided, however, that, in any such case, Executive shall notify the Company as early as reasonably practicable prior to disclosure to allow the Company to take appropriate measures to preserve the confidentiality of such information. 10. Competition; Solicitation. Executive hereby agrees that during the Term he will not, unless authorized in writing to do so by the Company, (a) directly or indirectly own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed or otherwise connected in any substantial manner with any business which directly or indirectly competes to a material extent with any line of business of the Company or its subsidiaries; provided, that nothing in this Agreement shall prohibit Executive from acquiring up to 2% of any class of outstanding equity securities of any corporation whose equity securities are regularly traded on a national securities exchange or in the "over-the-counter market"; (b) recruit any employee of the Company or solicit or induce, or attempt to solicit or induce, any employee of the Company to terminate his or her employment with, or otherwise cease his or her relationship with, the Company; or (c) solicit, divert or take away, or attempt to solicit, divert or to take away, the business or patronage of any of the clients, customers or accounts as prospective clients, customers or accounts, of the Company. Provided that the Company pays the Executive (i) the severance payment due to Executive in accordance with Section 8(a) hereof or, (ii) an amount equal to the Section 8(a) severance payment within thirty (30) days following the effective date of Executive's termination, the covenants contained in the preceding sentence regarding competition and solicitation shall extend for a period of one year from the termination or expiration of the Term in consideration for such payment. For purposes of the post-termination covenants under this Section 10, the restriction shall be limited to the geographic area in which the Company conducts business as of the day immediately prior to the date of termination of Executive's employment or the Change of Control Event, whichever is earlier. 11. Equitable Relief. The Company and Executive confirm that the restrictions contained in Sections hereof are, in view of the nature of the business of the Company, reasonable and necessary to protect the legitimate interests of the Company and that any violation of any provision of Sections will result in irreparable injury to the Company. Executive hereby agrees that, in the event of any breach or threatened breach of the terms or conditions of this Agreement by Executive, the Company's remedies at law will be inadequate and, in any such event, the Company shall be entitled to commence an action for preliminary and permanent injunctive relief and other equitable relief in any court of competent jurisdiction. 12. Indemnity. The Company agrees to indemnify Executive against all costs, charges and expenses incurred or sustained by Executive in connection with any action, suit or proceeding to which he may be a party by reason of being or having been a director, officer or employee at the request of the Company to the fullest extent permitted by applicable law. 13. Amendment. This Agreement contains and its terms constitute the entire Agreement of the parties and supersedes all prior Agreements regarding employment, and may be amended only by a written document signed by both parties to this Agreement 14. Governing Law. This Agreement shall be governed by the laws of the State of Mississippi. The parties hereby irrevocably consent to, and waive any objection to the exercise of, personal jurisdiction by the state and federal courts located in the State of Mississippi with respect to any action or proceeding arising out of this Agreement. 15. Attorneys' Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (only to the extent the Executive prevails in the outcome thereof) by the Company of the validity or enforceability of, or liability under, any provision of this Agreement (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement). 16. Severability. Should any provision hereof be deemed, for any reason whatsoever, to be invalid or inoperative, that provision shall be deemed severable and shall not affect the force and validity of all other provisions of this Agreement. 17. Survival. All provisions which may reasonably be interpreted or construed to survive the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement. 18. Notices. Any notice, request or instruction to be given hereunder shall be in writing and shall be deemed given when personally delivered or three (3) days after being sent by certified mail, postage prepaid, to the other party at such party's address set forth below. IF TO EXECUTIVE: Richard D. Coleman c/o Jitney-Jungle Stores of America, Inc. P. O. Box 3409 Jackson, Mississippi 39207-3409 IF TO COMPANY: Jitney-Jungle Stores of America, Inc. P. O. Box 3409 Jackson, Mississippi 39207-3409 Attention: Michael E. Julian with a copy to: Bruckmann, Rosser, Sherrill & Co., Inc. 126 East 56th Street, 29th Floor New York, New York 10022 Attention: Harold O. Rosser II Each party may change the address to which notices from the other party are to be sent by notifying such party of its new address in accordance with this Section 18. 19. Waiver. No waiver of any condition, obligation or term hereof shall constitute a waiver of any other or a waiver of a subsequent right to demand strict compliance with all conditions, obligations and terms hereof. 20. Successors. This Agreement, including the documents and instruments referred to herein, shall inure to the benefit of and be binding upon and enforceable against the heirs, legal representatives, successors, and assigns of the parties hereto. 21. Delegation of Duties. Executive may not delegate or assign any of his duties or obligations hereunder. With the exception of assigning duties to the Executive relating to the business of the affiliates or any subsidiaries of the Company and with the exception of an assignment to any acquiror in connection with (i) an acquisition of 50% or more of the Company's voting stock, (ii) a merger or consolidation of the Company resulting in the holders of the Company's voting stock immediately prior to such transaction holding less than 50% of the total voting common stock of the surviving corporation after such termination or (iii) a sale or exchange of all or substantially all of the property or assets of the Company, the Company shall have no right to assign this Agreement without Executive's written consent. 22. Partial Invalidity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall, nevertheless, continue in full force and without being impaired or invalidated in any way. 23. Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby and supersedes all prior arrangements or understandings with respect thereto. Executed as of the day and year first above written. JITNEY-JUNGLE STORES OF AMERICA, INC. ("Company") By: Name: Title: RICHARD D. COLEMAN ("Executive")
SCHEDULE "A" Executive shall be paid the sum indicated in Column A (less the bonus paid, if any, pursuant to Section 4(b) of the Employment Agreement) if the common stock shareholders receive the net purchase price in cash or marketable securities for all common shares (the "Equity Value") of the amounts listed in Column B. A ($000) B ($mm) *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***
To the extent the Equity Value paid shareholders exceeds an identified level in Column B, the payment specified in Column A shall be adjusted pro rata. For example, if the Equity Value is ***, the payment under Column A would be *** (***). In the event that a Change of Control Event occurs and the Equity Value is less than ***, Executive shall still be entitled to a payment of *** less any bonus paid pursuant to Section 4(b). In no event shall the payment calculated pursuant to Schedule "A" exceed ***. *** This information has been omitted and filed separately with the Securities and Exchange Commission and is subject to a confidential treatment request with respect thereto. EX-27 4
5 OTHER JAN-02-1999 JAN-03-1999 MAR-27-1999 9,246 0 25,832 0 183,303 223,696 485,052 188,329 676,483 192,962 0 73,553 10,203 4 (228,677) 676,483 459,991 459,991 338,027 469,892 0 0 17,100 (9,901) 0 (9,901) 0 0 0 (9,901) (28.77) (28.77)
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