-----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, DWLn9/QV7WM4Zym4Kz3cqKgHrjvvtd/ghVCBmjoxApQ5s79jnKk04itxFyL+nN8y 5aLP9BXOk9TCRBU0JOF1hg== 0000014707-96-000009.txt : 19960613 0000014707-96-000009.hdr.sgml : 19960613 ACCESSION NUMBER: 0000014707-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960504 FILED AS OF DATE: 19960611 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROWN GROUP INC CENTRAL INDEX KEY: 0000014707 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 430197190 STATE OF INCORPORATION: NY FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02191 FILM NUMBER: 96579357 BUSINESS ADDRESS: STREET 1: 8400 MARYLAND AVE STREET 2: P O BOX 29 CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3148544000 MAIL ADDRESS: STREET 1: P O BOX 29 CITY: ST LOUIS STATE: MO ZIP: 63166 FORMER COMPANY: FORMER CONFORMED NAME: BROWN SHOE CO INC DATE OF NAME CHANGE: 19720327 10-Q 1 1 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 4, 1996 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ ____________ Commission file number 1-2191 ____________ BROWN GROUP, INC. (Exact name of registrant as specified in its charter) New York 43-0197190 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 8300 Maryland Avenue St. Louis, Missouri 63105 (Address of principal executive offices) (Zip Code) (314) 854-4000 (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 [ ] As of June 1, 1996, 17,968,702 shares of the registrant's common stock were outstanding. 2 BROWN GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands)
(Unaudited) ---------------------------------- May 4, April 29, February 3, 1996 1995 1996 ---------- --------- ----------- ASSETS - ------ Current Assets Cash and Cash Equivalents $ 22,146 $ 20,457 $ 35,058 Receivables, net of allowances of $10,916 at May 4, 1996, $12,012 at April 29, 1995, and $11,267 at February 3, 1996 76,582 91,159 86,417 Inventories, net of adjustment to last-in, first-out cost of $24,968 at May 4, 1996, $37,566 at April 29, 1995, and $27,672 at February 3, 1996 374,272 336,746 342,282 Other Current Assets 42,340 54,753 41,581 --------- --------- --------- Total Current Assets 515,340 503,115 505,338 Property and Equipment 198,374 208,783 191,457 Less allowances for depreciation and amortization (112,089) (114,436) (103,737) --------- --------- --------- 86,285 94,347 87,720 Other Assets 68,881 62,895 67,998 --------- --------- --------- $ 670,506 $ 660,357 $ 661,056 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current Liabilities Notes Payable $ 144,500 $ 75,231 $ 112,000 Accounts Payable 95,847 105,925 106,113 Accrued Expenses 63,925 87,051 71,491 Income Taxes 4,400 9,262 4,335 Current Maturities of Long-Term Debt 2,000 52,799 2,000 --------- --------- --------- Total Current Liabilities 310,672 330,268 295,939 Long-Term Debt and Capitalized Lease Obligations 104,022 57,465 105,470 Other Liabilities 27,167 33,169 28,011 Shareholders' Equity Common Stock 67,224 67,261 67,242 Additional Capital 45,892 46,634 46,015 Cumulative Translation Adjustment (4,574) (4,507) (4,913) Unamortized Value of Restricted Stock (7,056) (9,483) (7,822) Retained Earnings 127,159 139,550 131,114 --------- --------- --------- 228,645 239,455 231,636 --------- --------- --------- $ 670,506 $ 660,357 $ 661,056 ========= ========= =========
See Notes to Condensed Consolidated Financial Statements. 3 BROWN GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (Thousands, except per share)
Three Months Ended -------------------- May 4, April 29, 1996 1995 -------- --------- Net Sales $355,785 $357,442 Cost of Goods Sold 219,908 237,247 -------- -------- Gross Profit 135,877 120,195 -------- -------- Selling and Administrative Expenses 130,684 123,916 Interest Expense 4,733 3,916 Other (Income) Expense (401) (608) -------- -------- Earnings (Loss) Before Income Taxes 861 (7,029) Income Tax (Provision) Benefit (334) 2,618 -------- -------- NET EARNINGS (LOSS) $ 527 $ (4,411) ======== ======== NET EARNINGS (LOSS) PER COMMON SHARE $ .03 $ (.25) ======== ======== Weighted Average Number of Outstanding Shares of Common Stock 17,615 17,608 ======== ======== DIVIDENDS PER COMMON SHARE $ .25 $ .40 ======== ========
See Notes to Condensed Consolidated Financial Statements. 4 BROWN GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Thousands)
Three Months Ended ---------------------- May 4, April 29, 1996 1995 ---------- ---------- Net Cash Provided (Used) by Operating Activities $ (36,119) $ 6,505 Investing Activities: Capital expenditures (4,185) (7,537) Other 824 1,120 --------- --------- Net Cash Provided (Used) by Investing Activities (3,361) (6,417) Financing Activities: Increase/(decrease) in short-term notes payable 32,500 9,146 Principal payments of long-term debt (1,450) (13) Dividends paid (4,482) (7,181) Payments for purchase of treasury stock -- (824) Proceeds from issuance of common stock -- 319 --------- --------- Net Cash Provided (Used) by Financing Activities 26,568 1,447 --------- --------- Increase (Decrease) in Cash and Cash Equivalents (12,912) 1,535 Cash and Cash Equivalents at Beginning of Period 35,058 18,922 --------- --------- Cash and Cash Equivalents at End of Period $ 22,146 $ 20,457 ========= =========
See Notes to Condensed Consolidated Financial Statements. 5 BROWN GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note A - Basis of Presentation ------------------------------ The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and reflect all adjustments which management believes necessary (which include only normal recurring accruals and the effect on LIFO inventory valuation of estimated annual inflationary cost increases and year-end inventory levels) to present fairly the results of operations. These statements, however, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations and cash flow in conformity with generally accepted accounting principles. The Corporation's business is subject to seasonal influences, and interim results may not necessarily be indicative of results which may be expected for any other interim period or for the year as a whole. For further information refer to the consolidated financial statements and footnotes included in the Corporation's Annual Report and Form 10-K for the period ended February 3, 1996. Note B - Earnings Per Share --------------------------- Net earnings per share of Common Stock is computed by dividing net earnings by the weighted average number of shares outstanding. The dilutive effect of stock options is not significant and is therefore excluded from the calculation. Note C - Inventories -------------------- The components of inventory are as follows ($000):
May 4, April 29, February 3, 1996 1995 1996 -------- --------- ----------- Finished Goods $364,997 $318,369 $329,184 Work in Process 2,106 2,215 1,843 Raw Materials and Supplies 7,169 16,162 11,255 -------- -------- -------- $374,272 $336,746 $342,282 ======== ======== ========
During fiscal 1996, the remaining domestically manufactured footwear at Brown Shoe Company will be sold resulting in a liquidation of LIFO inventory layers. The effect of this liquidation was to increase first quarter 1996 pretax earnings by $3.1 million. 6 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations --------------------- Quarter ended May 4, 1996 compared to the Quarter ended April 29, 1995 ---------------------------------------------------------------------- Consolidated net sales for the first quarter ended May 4, 1996, were $355.8 million, a decrease of .5% from last year's first quarter. Net earnings of $.5 million for the first quarter of 1996 compares to a loss of $4.4 million last year. Sales from the footwear retailing operations increased 10% from the first quarter of 1995. Famous Footwear's total sales increased 11% reflecting a same-store sales decrease of 1.9%, offset by the sales from 77 more units in operation. Famous Footwear now operates 789 stores. The Canadian retailing operation's sales increased 20% with a same-store sales increase of 12% and five more units than the prior year. Naturalizer's mall-based stores' total sales increased 6.5% in the quarter and 6.4% on a same-store basis, reflecting strong consumer acceptance of the updated styling of the Naturalizer product and increasing interest in the NaturalSport line of casual and walking shoes. These improved sales were partially offset by lower sales at 40 outlet mall stores transferred from Famous Footwear at the beginning of fiscal 1996. This decline was due to low inventory levels and poor weather during this transition period. Both Famous Footwear and the Naturalizer Retail division's sales and store counts for fiscal 1995 have been restated to reflect the transfer of these stores. Sales from footwear wholesaling businesses decreased from the same period last year. Outside sales at Brown Shoe and Pagoda decreased 5% and 20%, respectively, primarily reflecting lower shipments of private label makeup shoes as a result of the closing of the remaining domestic factories and the timing of Pagoda's shipments compared to last year. Gross profit as a percent of sales increased to 38.2% from 33.6% for the same period last year. This improvement primarily reflects the shift of all remaining production of Brown Shoe products to offshore factories, a pretax LIFO credit of $3.1 million from the liquidation of footwear manufactured in closed domestic plants, and a higher percentage of sales coming from the Corporation's retail operations which carry higher margin rates than the wholesaling operations. Selling and administrative expenses as a percent of sales increased to 36.7% from 34.7% for the same period last year, reflecting a higher percentage of the Corporation's sales occurring at Famous Footwear which carries a higher expense rate than the wholesaling divisions. Other income was $.4 million compared to $.6 million in 1995 and consists primarily of royalty income. 7 In summary, first quarter results are encouraging. They reflect a good consumer response to product improvements and marketing programs, better acceptance of the Corporation's brands and the positive impact of the steps taken last year to reduce costs and improve all aspects of operations. The opportunity has been created for sales increases to bring better earnings to the bottom line, and results are expected to improve in the seasonally stronger second and third quarters. Financial Condition ------------------- A summary of key financial data and ratios at the dates indicated is as follows:
May 4, April 29, February 3, 1996 1995 1996 ------- --------- ----------- Working Capital (millions) $204.7 $172.8 $209.4 Current Ratio 1.7 1.5 1.7 Total Debt as a Percentage of Total Capitalization 52.3% 43.7% 48.7% Net Debt (Total Debt less Cash and Cash Equivalents) as a Percentage of Total Capitalization 50.0% 40.8% 44.3%
Cash flow from operating activities for the first three months of fiscal 1996 was a net use of $36.1 million versus a net generation of $6.5 million last year. The 1996 usage primarily reflects an increase in inventory at Famous Footwear (due to 77 more stores) and lower accounts payable (due to the timing of purchases). In 1995's first quarter, cash was generated from operations primarily due to sizeable reductions in inventory levels at Brown Shoe and Pagoda in anticipation of reduced future sales. Financing activities in the first quarter of fiscal 1996 reflect an increase in notes payable which were drawn under the Corporation's Bank Credit Agreement. The increase in the ratio of total debt as a percentage of total capitalization at May 4, 1996, compared to the end of fiscal 1995, is due primarily to the Corporation's additional borrowings to finance higher inventories. At the end of the quarter, $144.5 million was borrowed under the Corporation's $200 million Bank Credit Agreement. 8 PART II - OTHER INFORMATION Item 1 - Legal Proceedings --------------------------- There have been no material developments during the quarter ended May 4, 1996, in the legal proceedings described in the Corporation's Form 10-K for the period ended February 3, 1996. Item 4 - Submission of Matters to a Vote of Security Holders ------------------------------------------------------------ At the Annual Meeting of Shareholders held on May 23, 1996, two proposals described in the Notice of Annual Meeting of Shareholders dated April 17, 1996, were voted upon. 1. The shareholders elected four directors, Mr. John Peters MacCarthy, Mr. John D. Macomber, Mr. William E. Maritz, and General Edward C. Meyer, Retired, for terms of three years each; Mr. Daniel R. Toll for a term of two years; and Mr. Jerry E. Ritter for a term of one year. The voting for each director was as follows: Directors For Withheld --------- ---------- -------- John Peters MacCarthy 14,447,612 385,563 John D. Macomber 14,450,048 383,127 William E. Maritz 14,439,754 393,421 General Edward C. Meyer, Retired 14,448,541 384,634 Daniel R. Toll 14,439,922 393,253 Jerry E. Ritter 14,459,411 373,764 2. The proposal to ratify and approve an amendment to the Brown Group, Inc. Stock Option and Restricted Stock Plan of 1994 was approved by a vote of 13,760,168 in favor to 852,941 against, with 220,066 abstaining. Item 6 - Exhibits and Reports on Form 8-K ----------------------------------------- (a) Listing of Exhibits (3) (i) (a) Certificate of Incorporation of the Corporation as amended through February 16, 1984, incorporated herein by reference to Exhibit 3 to the Corporation's Report on Form 10-K for the fiscal year ended November 1, 1986. (i) (b) Amendment of Certificate of Incorporation of the Corporation filed February 20, 1987, incorporated herein by reference to Exhibit 3 to the Corporation's Report on Form 10-K for the fiscal year ended January 30, 1988. (ii) Bylaws of the Corporation as amended through May 23, 1996, filed herewith. (Page 11) 9 (11) Computation of Earnings Per Share (Page 10) (27) Financial Data Schedule (Page 24) (b) Reports on Form 8-K: The Corporation filed a current report on Form 8-K dated March 7, 1996, in response to Item 5, which announced a new Shareholders' Rights Plan. 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. BROWN GROUP, INC. Date: June 11, 1996 /s/ Harry E. Rich ------------------- ------------------------------- Executive Vice President and Chief Financial Officer and On Behalf of the Corporation as the Principal Financial Officer 10 EXHIBIT 11 PART II - OTHER INFORMATION COMPUTATION OF EARNINGS PER SHARE BROWN GROUP, INC. (Thousands, except per share)
Three Months Ended ---------------------- May 4, April 29, 1996 1995 ---------- --------- PRIMARY Weighted average shares outstanding 17,615 17,608 Net effect of dilutive stock options based on the treasury stock method using average market price -- 25 ---------- --------- TOTAL 17,615 17,633 ========== ========= Net earnings (loss) $ 527 $ (4,411) ========== ========= Net earnings (loss) per share (1) $ .03 $ (.25) ========== ========= FULLY DILUTED Weighted average shares outstanding 17,615 17,608 Net effect of dilutive stock options based on the treasury stock method using the period-end market price, if higher than the average market price 21 52 ---------- --------- TOTAL 17,636 17,660 ========== ========= Net earnings (loss) $ 527 $ (4,411) ========== ========= Net earnings (loss) per share (1) $ .03 $ (.25) ========== =========
(1) The dilutive effect of stock options was not included in weighted average shares outstanding for purposes of calculating earnings per share EX-3 2 BROWN GROUP, INC. A NEW YORK CORPORATION BYLAWS ADOPTED BY THE STOCKHOLDERS JANUARY 11, 1946 AMENDED THROUGH MAY 23, 1996 BYLAWS OF BROWN GROUP, INC. ------------------ ARTICLE I. Meetings of Stockholders. SECTION 1. Annual Meeting. The annual meeting of the Stockholders shall be held at such place within or without the State of New York as may from time to time be fixed by resolution of the Board of Directors on the fourth Thursday in May in each and every year (or if said day be a legal holiday, then on the next succeeding day not a legal holiday), at eleven o'clock in the forenoon, for the purpose of electing directors and of transacting only such other business as may be properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, the Chairman of the Board, or the President, (b)otherwise properly brought before the meeting by or at the direction of the Board of Directors, the Chairman of the Board, or the President, or (c), subject to ARTICLE II, Section 8 hereof, otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Company. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Company, not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Company's books, of the stockholder proposing such business, (c) the class and number of shares of the Company which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in the Bylaws to the contrary, but subject to ARTICLE II, Section 8 hereof, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 1. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 1, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. The meeting may be adjourned from time to time until its business is completed. SECTION 2. Special Meetings. Special meetings of the stockholders may be held upon call by the majority of the Board of Directors, the Chairman of the Board, or the President, at such time as may be fixed by the Board of Directors, the Chairman of the Board, or the President, and at such place within or without the State of New York as may be stated in the call and notice. The meeting may be adjourned from time to time until its business is completed. SECTION 3. Notice of Meetings. Written notice of the time, place and purpose or purposes of every meeting of stockholders, signed by the Chairman of the Board or the President or a Vice-President or the Secretary or an Assistant Secretary, shall be served either personally or by mail, not less than ten days nor more than fifty days before the meeting, upon each stockholder of record entitled to vote at such meeting and upon each other stockholder of record who, by reason of any action proposed at such meeting, would be entitled to have his stock appraised if such action were taken. If mailed, such notice shall be directed to each such stockholder at his address as it appears on the stock book unless he shall have filed with the Secretary of the Company a written request that notices intended for him be mailed to some other address, in which case it shall be mailed to the address designated in such request. Such further notice shall be given by mail, publication or otherwise, as may be required by the Certificate of Incorporation of the Company or by law. SECTION 4. Quorum. At every meeting of the stockholders, the holders of record of shares entitled in the aggregate to a majority of the number of votes which could at the time be cast by the holders of all shares of the capital stock of the Company then outstanding and entitled to vote if all such holders were present or represented at the meeting, shall constitute a quorum. If at any meeting there shall be no quorum, the holders of a majority of the shares of stock entitled to vote so present or represented may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. SECTION 5. Voting. At all meetings of the stockholders, each holder of record of outstanding shares of stock of the Company, entitled to vote thereat, may so vote either in person or by proxy appointed by instrument in writing executed by such holder or by his duly authorized attorney. No proxy shall be valid after the expiration of eleven months from the date of its execution unless the stockholder executing it shall have specified therein a longer time during which it is to continue in force. SECTION 6. Record of Stockholders. The Board of Directors may prescribe a period, not exceeding fifty days nor less than ten days prior to any meeting of the stockholders, during which no transfer of stock on the books of the company may be made. In lieu of prohibiting the transfer of stock as aforesaid, the Board of Directors may fix a day or hour, not more than fifty days prior to the day of holding any meeting of stockholders, as the time as of which stockholders entitled to notice of and to vote at such meeting shall be determined, and all persons who were holders of record of voting stock at such time, and no others, shall be entitled to notice of and to vote at such meeting. SECTION 7. Inspectors of Election. At all elections of directors by the stockholders, the chairman of the meeting shall appoint two Inspectors of Election. Before entering upon the discharge of his duties, each such inspector shall take and subscribe an oath or affirmation faithfully to execute the duties of inspector at such meeting as provided by law with strict impartiality and according to the best of his ability and thereupon the inspectors shall take charge of the polls and after the balloting shall make a certificate of the result of the vote taken. No director or candidate for the office of director shall be appointed such inspector. ARTICLE II. SECTION 1. Number. The number of directors within the maximum and minimum limits provided for in the Certificate of Incorporation may be changed from time to time by the shareholders or by the Board of Directors by an amendment to these Bylaws. Subject to amendment of these Bylaws, as aforesaid, the number of directors of the Corporation shall be eleven. Such directors shall be classified in respect of the time for which they shall severally hold office, by dividing them into two classes consisting of four directors each and one class consisting of three directors. At each annual election, the successors of the directors of the class whose term shall expire in that year, shall be elected to hold office for the term of three years so that the term of office of one class of directors shall expire in each year. The Board of Directors shall not choose as a director to fill a temporary vacancy any person over the age of seventy years, and shall not recommend to the stockholders any person for election as a director for a term extending beyond the Annual Meeting of Stockholders following the end of the calendar year during which he attains his seventieth birthday, provided, however, that this shall not apply to directors elected or holding office, at the time of the Annual Meeting of Stockholders in 1967; and provided further, that this shall not prevent the designation by the Board of such person as an Honorary Director, to serve without vote. SECTION 2. Meetings of the Board. Meetings of the Board of Directors shall be held at such place within or without the State of New York as may from time to time be fixed by resolution of the Board, or as may be specified in the call of any meeting. Regular meetings of the Board of Directors shall be held at such times as may from time to time be fixed by resolution of the Board. Notice need not be given of the regular meetings of the Board held at times fixed by resolution of the Board. Special meetings of the Board may be held at any time upon the call of the Chairman of the Board or the President or any two directors by telegraphic or written notice, duly served on or sent or mailed to each director not less than three days before such meeting. Special meetings of the Board of Directors may be held without notice, if all of the directors are present or if those not present waive notice of the meeting in writing or by telegraph. Any one or more of the directors may participate in a meeting of the Board of Directors by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. SECTION 3. Quorum. The attendance of a majority of the Board of Directors shall be necessary to constitute a quorum for the transaction of business. SECTION 4. Vacancies. Vacancies in the Board of Directors may be filled by a vote of a majority of the directors in office even though less than a quorum; provided that, in case of an increase in the number of directors pursuant to an amendment of these Bylaws made by the stockholders, the stockholders may fill the vacancy or vacancies so created at the meeting at which the bylaw amendment is effected. The directors so chosen shall hold office, unless they are removed therefrom by the stockholders, for the unexpired portion of the term of the directors whose place shall be vacant and until the election of their successors. SECTION 5. Resignations. Any director of the Company may resign at any time by giving written notice to the President or to the Secretary of the Company. Such resignation shall take effect at the time specified therein; and unless otherwise specified therein the acceptance of such resignation shall not be necessary to make it effective. SECTION 6. Organization. The Board of Directors shall have general power to direct the management of the business and affairs of the Company, and may adopt such rules and regulations as they shall deem proper, not inconsistent with law or with these Bylaws, for the conduct of their meetings and for the management of the business and affairs of the Company. Directors need not be stockholders. SECTION 7. Compensation. Directors, as such, shall not receive any stated salary for their services, but by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board, and directors shall be entitled to compensation other than a stated salary in such form and in such amounts as the Board may determine. However, this Bylaw shall not be construed to preclude any director from serving in any other capacity and receiving compensation therefor. Members of the Executive Committee and all other committees may be allowed a fixed sum and expenses of attendance, if any, for attendance at committee meetings. SECTION 8. Notice and Qualification of Stockholder Nominees to Board of Directors. Only persons who are nominated in accordance with procedures set forth in this Section 8 shall be qualified for election as Directors. Nominations of persons for election to the Board of Directors of the Company may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Company entitled to vote for the election of Directors at the meeting who complies with the procedures set forth in this Section 8. In order for persons nominated to the Board of Directors, other than those persons nominated by or at the direction of the Board of Directors, to be qualified to serve on the Board of Directors, such nomination shall be made pursuant to timely notice in writing to the Secretary of the Company. To be timely, stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a Director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Company which are beneficially owned by such person and (iv) any other information relating to such person that is required to be disclosed in solicitation of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended from time to time (including without limitation such person's written consent to be named in the proxy statement as a nominee and to serving as a Director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Company's books, of such stockholder and (ii) the class and number of shares of the Company which are beneficially owned by such stockholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Company that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be qualified for election as a Director of the Company unless nominated in accordance with the procedure set forth in this Section 8. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with procedures prescribed by the Bylaws, and if he should so determine, he shall so declare to the meeting, and the defective nomination shall be disregarded. ARTICLE III. Committees. SECTION 1. Executive Committee. The Board of Directors may, by resolution passed by a majority of the whole Board, designate an Executive Committee to consist of three or more of the directors, including the President ex officio, one of whom shall be designated Chairman of the Executive Committee. The Executive Committee shall have and may exercise, so far as may be permitted by law, all of the powers of the Board in the direction of the management of the business and affairs of the Company during the intervals between meetings of the Board of Directors, and shall have power to authorize the seal of the Company to be affixed to all papers which may require it; but the Executive Committee shall not have the power to fill vacancies in the Board, or to change the membership of, or to fill vacancies in, the Executive Committee, or to make or amend bylaws of the Company. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, the Executive Committee. The Executive Committee may hold meetings and make rules for the conduct of its business and appoint such committees and assistants as it shall from time to time deem necessary. A majority of the members of the Executive Committee shall constitute a quorum. All action of the Executive Committee shall be reported to the Board at its meeting next succeeding such action. Any one or more members of the Executive Committee may participate in a meeting of the Executive Committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. SECTION 2. Other Committees. The Board of Directors may, in its discretion, by resolution, appoint other committees, composed of two or more members, which shall have and may exercise such powers as shall be conferred or authorized by the resolution appointing them. A majority of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide. The Board shall have power at any time to change the membership of any such committee, to fill vacancies, and to discharge any such committee. ARTICLE IV. Officers. SECTION 1. Officers. The Board of Directors, as soon as may be after the election of directors held in each year, shall elect a Chairman of the Board of Directors, a President of the Company, one or more Vice- Presidents, a Secretary, and a Treasurer, and from time to time may appoint such Assistant Secretaries, Assistant Treasurers and such other officers, agents and employees as it may deem proper. Any two of such offices, except that of President and Secretary, may be held by the same person. The Chairman of the Board and the President shall be chosen from among the directors, but no other officer need be a director. SECTION 2. Term of Office. The term of office of all officers shall be one year or until their respective successors are chosen and qualified; but at any meeting the Board may, by a three-fourths vote of its entire number, suspend or remove any one or more of the officers for a cause satisfactory to the Board, and the action thus taken shall be conclusive. Previous notice of five days of such intended action shall be given to the person affected thereby. In the event of the suspension of an officer, the Board shall fix the term of such suspension. SECTION 3. Powers and Duties. The officers, agents and employees of the Company shall each have such powers and duties in the management of the property and affairs of the Company, subject to the control of the Board of Directors, as generally pertain to their respective offices, as well as such powers and duties as from time to time may be prescribed by the Board of Directors. The Board of Directors may require any such officer, agent or employee to give security for the faithful performance of his duties. ARTICLE V. Powers to Contract; Indemnification SECTION 1. Contracts. All contracts and agreements purporting to be the act of this Company shall be signed by the President, or by a Vice- President, or by such other officer or other person as may be designated by the Board of Directors or Executive Committee in order that the same shall be binding upon the Company. SECTION 2. Indemnification. a. Actions Involving Directors and Officers. The Company shall indemnify each person who at any time is serving or has served as a director or officer of the Company or at the request of the Company is serving or has served as a director or officer (or in a similar capacity) of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any claim, liability or expense incurred as a result of such service, to the maximum extent permitted by law. b. Actions Involving Employees or Agents 1. The Company may, if it deems appropriate, indemnify any person who at any time is or has been an employee or agent of the Company or who at the request of the Company is or has been an employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any claim, liability or expense incurred as a result of such service, to the maximum extent permitted by law or to such lesser extent as the Company, in its discretion, may deem appropriate. 2. To the extent that any person referred to in subsection 2(b) of this Section 2 has been successful, on the merits or otherwise, in the defense of a civil or criminal proceeding arising out of the services referred to therein, he shall be entitled to indemnification as authorized in such subsection. c. Advance Payment of Expenses. Expenses incurred by a person who is or was a director or officer of the Company or who is or was at the request of the Company serving as a director or officer (or in a similar capacity) of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in defending a civil or criminal action or proceeding shall be paid by the Company in advance of the final disposition of such action or proceeding, and expenses incurred by a person who is or was an employee or agent of the Company or who is or was at the request of the Company serving as an employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in defending a civil or criminal action or proceeding may be paid by the Company in advance of the final disposition of such action or proceeding as authorized by the Board of Directors, in either case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amounts as, and to the extent, required by law. d. Not Exclusive. The indemnification and advancement of expenses provided or permitted by this Section 2 shall not be deemed exclusive of any other rights to which any person who is or was a director, officer, employee or agent of the Company or who is or was at the request of the Company serving as a director or officer (or in a similar capacity), employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise may be entitled, whether pursuant to the Company's Certificate of Incorporation, Bylaws, the terms of any resolution of the shareholders or Board of Directors of the Company, any agreement or contract or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. e. Indemnification Agreements Authorized. Without limiting the other provisions of this Section 2, the Company is authorized from time to time to enter into agreements with any director, officer, employee or agent of the Company or with any person who at the request of the Company is serving as a director or officer (or in a similar capacity), employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, providing such rights of indemnification as the Board of Directors may deem appropriate, up to the maximum extent permitted by law; provided that any such agreement with a director or officer of the Company shall not provide for indemnification of such director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Any such agreement entered into by the Company with a director may be authorized by the other directors, and such authorization shall not be invalid on the basis that similar agreements may have been or may thereafter be entered into with such other directors. f. Insurance. The Company may purchase and maintain insurance to indemnify itself or any person who is or was a director, officer, employee or agent of the Company or who is or was at the request of the Company serving as a director or officer (or in a similar capacity), employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, to the maximum extent allowed by law, whether or not the Company would have the power to indemnify such person under the provisions of this Section 2. g. Certain Definitions. For the purposes of this Section 2: 1. Any director or officer of the Company who shall serve as a director or officer (or in a similar capacity), employee or agent of any other corporation, partnership, joint venture, trust or other enterprise of which the Company, directly or indirectly, is or was the owner of a majority of either the outstanding equity interests or the outstanding voting stock (or comparable interests) shall be deemed to be serving as such director or officer (or in a similar capacity), employee or agent at the request of the Company, unless the Board of Directors of the Company shall determine otherwise. In all other instances where any person shall serve as a director or officer (or in a similar capacity), employee or agent of another corporation, partnership, joint venture, trust or other enterprise of which the Company is or was a stockholder or creditor, or in which it is or was otherwise interested, if it is not otherwise established that such person is or was serving as such director or officer (or in a similar capacity), employee or agent at the request of the Company, the Board of Directors of the Company may determine whether such service is or was at the request of the Company, and it shall not be necessary to show any actual or prior request for such service. 2. A corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered fines; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person's duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation. 3. References to a corporation include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director or officer (or in a similar capacity), employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall stand in the same position under the provisions of this Section 2 with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity. h. Survival. Any indemnification rights provided under or granted pursuant to this Section 2 shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Indemnification rights provided under or granted pursuant to this Section 2 shall survive amendment or repeal of this Section 2 with respect to any acts or omissions occurring prior to such amendment or repeal and persons to whom such indemnification rights are given shall be entitled to rely upon such indemnification rights as a binding contract with the Company. ARTICLE VI. Capital Stock. SECTION 1. Stock Certificates. The interest of each stockholder shall be evidenced by a certificate or certificates for shares of stock of the Company in such form as the Board of Directors may from time to time prescribe. The certificates of stock shall be signed by the Chairman of the Board or the President or a Vice-President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary and sealed with the seal of the Company, and shall be countersigned and registered in such manner, if any, as the Board may by resolution prescribe; provided that, in case such certificates are required by such resolution to be signed by a Transfer Agent or Transfer Clerk and by a Registrar, the signatures of the Chairman of the Board or the President or a Vice-President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary and the seal of the Company upon such certificates may be facsimiles, engraved or printed. SECTION 2. Transfers. Shares in the capital stock of the Company shall be transferred only on the books of the Company, by the holder thereof in person or by his attorney, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Company or its agents may reasonably require. SECTION 3. Lost or Destroyed Stock Certificates. No certificates for shares of stock of the Company shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of the loss, theft or destruction and upon indemnification of the Company and its agents to such extent and in such manner as the Board of Directors may from time to time prescribe. ARTICLE VII. Checks, Notes, etc. All checks and drafts on the Company's bank accounts and all bills of exchange and promissory notes and all acceptances, obligations and other instruments for the payment of money, shall be signed by the President, or a Vice-President, or the Treasurer, or by such other officer or officers or agent or agents as shall be thereunto authorized from time to time by the Board of Directors. ARTICLE VIII. Fiscal Year. The fiscal year of the Company shall be determined as ending on the Saturday nearest to each January thirty-first, and each ensuing fiscal year shall commence on the day following the ending date of the immediately preceding fiscal year as so determined. ARTICLE IX. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Company and the words "New York", arranged in a circular form around the words and figures "Corporate Seal 1913". In lieu of the corporate seal, when so authorized by the Board of Directors or a duly empowered committee thereof, a facsimile thereof may be impressed or affixed or reproduced. ARTICLE X. Amendments. The Bylaws of the Company may be amended, added to, rescinded or repealed at any meeting of the stockholders by the vote of the holders of record of shares entitled in the aggregate to more than a majority of the number of votes which could at the time be cast by the holders of all shares of the capital stock of the Company then outstanding and entitled to vote if all such holders were present or represented at the meeting, provided notice of the proposed change is given in the notice of the meeting. The Board of Directors may from time to time, by vote of a majority of the Board, amend these Bylaws or make additional bylaws for the Company at any regular or special meeting at which notice of the proposed change is given, subject, however, to the power of the stockholders to alter, amend, or repeal any bylaws made by the Board of Directors. EX-27 3
5 3-MOS FEB-01-1997 MAY-04-1996 22,146 0 87,498 (10,916) 374,272 515,340 198,374 (112,089) 670,506 310,672 104,022 0 0 67,224 161,421 670,506 355,785 355,785 219,908 350,592 (401) 1,440 4,733 861 334 527 0 0 0 527 .03 .03
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