-----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, E8RWFSn4qI6SsrESQDu7+KdzdRSLajBAgrn4WDP9KuwygeFaxvzCWH/vfq4a5rgy rWvw2JZ7FBmxupPOC4WbFg== 0000081061-97-000016.txt : 19970329 0000081061-97-000016.hdr.sgml : 19970329 ACCESSION NUMBER: 0000081061-97-000016 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961228 FILED AS OF DATE: 19970328 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIX SUPER MARKETS INC CENTRAL INDEX KEY: 0000081061 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 590324412 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-00981 FILM NUMBER: 97566461 BUSINESS ADDRESS: STREET 1: PO BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802-0407 BUSINESS PHONE: 9416887407 MAIL ADDRESS: STREET 2: P O BOX 407 CITY: LAKELAND STATE: FL ZIP: 33802 10-K 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 28, 1996 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______________ to ____________ Commission File Number 0-981 ----- PUBLIX SUPER MARKETS, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Florida 59-0324412 - ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1936 George Jenkins Boulevard Lakeland, Florida 33815 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (941) 688-1188 -------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock $1.00 Par Value Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) 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 aggregate market value of the voting stock held by non-affiliates of the Registrant as of March 4, 1997 was approximately $2,761,432,191. The number of shares of Registrant's common stock outstanding as of March 4, 1997 was 219,559,931. DOCUMENTS INCORPORATED BY REFERENCE Pages 2 through 8 of Proxy Statement solicited for the 1997 Annual Meeting of Stockholders to be held on May 13, 1997 are incorporated by reference in Items 10, 11 and 13 of Part III hereof. 2 PART I Item 1. Business - ----------------- Publix Super Markets, Inc. is based in Lakeland, Florida and was incorporated in Florida on December 27, 1921. Publix Super Markets, Inc. and its wholly owned subsidiary, hereinafter collectively referred to as the "Company," is in the business of operating retail food supermarkets in Florida, Georgia, South Carolina and Alabama. The Company's supermarkets sell groceries, dairy, produce, deli, bakery, meat, seafood, housewares and health and beauty care items. In addition, some stores have pharmacy, photo and floral departments. The Company's lines of merchandise include a variety of nationally advertised and private label brands, as well as unbranded merchandise such as produce, meat and seafood. Private label items are produced in the Company's manufacturing facilities or are manufactured for the Company by outside suppliers. The Company manufactures dairy, bakery and deli products. The Company's dairy plants are located in Lakeland and Deerfield Beach, Florida, and Lawrenceville, Georgia. The bakery and deli plants are located in Lakeland, Florida. The Company receives the food and non- food items it distributes from many sources. These products are generally available in sufficient quantities to enable the Company to adequately satisfy its customers. The Company believes that its sources of supply of these products and raw materials used in manufacturing are adequate for its needs and that it is not dependent upon a single or relatively few suppliers. The Company operated 534 supermarkets at the end of 1996, compared with 508 at the beginning of the year. In 1996, 34 stores were opened, eight stores were closed, and 12 stores were expanded or remodeled. The net increase in square footage was 1.4 million or 6.2% since 1995. The Company entered the Georgia market in 1991, the South Carolina market in 1993, and the Alabama market in 1996. At the end of 1996, the Company had 446 stores located in Florida, 73 located in Georgia, 13 located in South Carolina and two located in Alabama. As of year end, the Company had 12 stores under construction in Florida, 10 in Georgia, three in South Carolina and one in Alabama. The Company is engaged in a highly competitive industry. Competition, based primarily on price, quality of goods and service, convenience and product mix, is with several national and regional chains, independent stores and mass merchandisers throughout its market areas. The Company anticipates continued competitor format innovation and location additions in 1997. The influx of winter residents to Florida and increased purchases of food during the traditional Thanksgiving, Christmas and Easter holidays typically results in seasonal sales increases between November and April of each year. The Company has experienced no significant changes in the kinds of products sold or in its methods of distribution since the beginning of the fiscal year. The Company had approximately 103,000 employees at the end of 1996, compared with 95,000 at the end of 1995. Of this total, approximately 64,000 at the end of 1996 and 60,000 at the end of 1995 were not full-time employees. The Company's research and development expenses are insignificant. Compliance by the Company with Federal, state and local environmental protection laws during 1996 had no material effect upon capital expenditures, earnings or the competitive position of the Company. 3 Item 2. Properties - ------------------- At year end, the Company operated approximately 23.9 million square feet of retail space. The Company's stores vary in size. Current store prototypes range from 27,000 to 65,000 square feet. Stores are often located in strip shopping centers where the Company is the anchor tenant. The majority of the Company's retail stores are leased. Substantially all of these leases will expire during the next 20 years. However, in the normal course of business, it is expected that the leases will be renewed or replaced by leases on other properties. At 45 locations both the building and land are owned and at 29 other locations the building is owned while the land is leased. The Company supplies its retail stores from eight distribution centers located in Lakeland, Miami, Jacksonville, Sarasota, Orlando, Deerfield Beach and Boynton Beach, Florida, and Lawrenceville, Georgia. The Company's corporate offices, distribution facilities and manufacturing plants are owned with no outstanding debt. All of the Company's properties are well maintained and in good operating condition and suitable and adequate for operating its business. Item 3. Legal Proceedings - -------------------------- The Company was the subject of a notice of charge (the "Charge") issued by the Equal Employment Opportunity Commission (the "EEOC") in March 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., alleging that the Company had and was engaged in violations of Title VII of the Federal Civil Rights Act by discriminating against women with respect to job assignments and promotions because of their gender. The Charge was subsequently expanded to include allegations of race discrimination. The Company was also a defendant in a certified class action filed in July 1995 in the Federal District Court for the Middle District of Florida, Tampa Division (the "Court"), by certain present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Shores case"). The plaintiffs alleged that the Company had and was then engaged in a policy and pattern or practice of gender-based discriminatory treatment of female employees with respect to job assignments, promotional opportunities, management positions, equal pay, full-time status, bonuses, and other benefits and conditions of employment, all in violation of Title VII of the Federal Civil Rights Act, as well as the Florida Civil Rights Act of 1992. The litigation class certified by the Court consisted of all female employees of the Company who from May 22, 1991 (Florida and South Carolina operations) or from October 19, 1991 (Georgia operations) had worked or were working in the Company's retail operations; expressly excluded were females who had worked only in the Company's pharmacy operations. On January 24, 1997, the Company, the EEOC and the plaintiffs in the Shores case entered into a settlement agreement (the "Shores Agreement") with respect to all matters related to the case. On January 27, 1997, the Court preliminarily approved the Shores Agreement. All parties intend to diligently pursue final approval of the Shores Agreement with the Court. Under the Shores Agreement, the Company will pay $81.5 million to the plaintiffs, their counsel and other class members. The Company agreed to establish a formal system by which employees will be considered for promotion. Promotions will be based on qualifications and expressed interest of employees. The Company has also agreed to make certain other procedural changes. 4 Also on January 24, 1997, the Company agreed with the EEOC (the "EEOC Agreement") to settle all pending EEOC charges related to gender and race discrimination that were not included in the Shores Agreement. Under the EEOC Agreement, the Company agreed to pay an additional $3.5 million to members of the affected classes. The Company also agreed to follow procedures with respect to class members similar to those established under the Shores Agreement. The settlement agreements recognize that the Company continues to deny that it has engaged in any unlawful discriminatory activity. The Company will pay the settlements from liquid investment funds currently on hand and the settlements were charged against the Company's fiscal 1996 fourth quarter results. Management does not believe that the settlements will cause any cash flow or liquidity problems or will have any material impact on the Company's future financial results. The Company is also a party in various other legal claims and actions considered in the normal course of business. Management believes that the ultimate disposition of these matters will not have a material effect on the Company's liquidity, results of operations or financial condition. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None 5
EXECUTIVE OFFICERS OF THE COMPANY Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since ---- --- -------- ---------------- ----- Howard M. Jenkins 45 Chairman of Cousin of 1976 the Board and Charles H. Jenkins, Chief Executive Jr., uncle of Officer W. Edwin Crenshaw and brother-in-law of Hoyt R. Barnett Charles H. Jenkins, Jr. 53 Chairman of the Cousin of 1974 Executive Committee Howard M. Jenkins and cousin of W. Edwin Crenshaw W. Edwin Crenshaw 46 President Nephew of 1990 Howard M. Jenkins and cousin of Charles H. Jenkins, Jr. William H. Vass 47 Executive 1986 Vice President Hoyt R. Barnett 53 Executive Brother-in-law of 1977 Vice President Howard M. Jenkins Jesse L. Benton 54 Vice President 1988 S. Keith Billups 64 Secretary 1968 Bennie F. Brown 55 Vice President 1992 R. Scott Charlton 38 Vice President 1992 William R. Curry 56 Vice President 1990 Carolyn C. Day 51 Assistant Secretary 1992 Glenn J. Eschrich 52 Vice President 1995 William V. Fauerbach 50 Vice President 1997 John R. Frazier 46 Vice President 1997 M. Clayton Hollis, Jr. 40 Vice President 1994 Mark R. Irby 41 Vice President 1989 Tina P. Johnson 37 Vice President 1990 and Treasurer James J. Lobinsky 57 Vice President 1992 Thomas M. McLaughlin 46 Vice President 1994 Sharon A. Miller 53 Assistant Secretary 1992 Robert H. Moore 54 Vice President 1994
6
EXECUTIVE OFFICERS OF THE COMPANY Served as Nature of Family Officer of Relationship Company Name Age Position Between Officers Since ---- --- -------- ---------------- ----- Thomas M. O'Connor 49 Vice President 1992 David P. Phillips 37 Vice President 1990 and Controller James H. Rhodes II 52 Vice President 1995 Daniel M. Risener 56 Vice President 1985 Edward T. Shivers 57 Vice President 1985 James F. Slappey 54 Vice President 1992
The terms of all officers expire at the annual meeting of the Company in May 1997, with the exception of Bennie F. Brown and William R. Curry whose retirements were effective December 31, 1996. 7
Name Business Experience During Last Five Years - ---- ------------------------------------------ Howard M. Jenkins Chairman of the Board and Chief Executive Officer of the Company. Charles H. Jenkins, Jr. Chairman of the Executive Committee of the Company. W. Edwin Crenshaw Vice President of the Company to January 1994, Executive Vice President to January 1996, President thereafter. William H. Vass Vice President and Treasurer of the Company to November 1992, Executive Vice President and Trustee of the ESOT thereafter. Hoyt R. Barnett Executive Vice President of the Company to March 1992, Executive Vice President and Trustee of the Profit Sharing Plan thereafter. Jesse L. Benton Vice President of the Company. S. Keith Billups Secretary of the Company. Bennie F. Brown Vice President of the Company. R. Scott Charlton Vice President of the Company. William R. Curry Vice President of the Company. Carolyn C. Day Capital Stock Registrar and Transfer Agent of the Company to July 1992, Capital Stock Registrar and Transfer Agent and Assistant Secretary thereafter. Glenn J. Eschrich Assistant Director of Information Systems of the Company to February 1992, Director of Strategy Support to March 1995, Vice President thereafter. William V. Fauerbach Assistant Director of Retail Operations - Miami Division of the Company to January 1994, Regional Director of Retail Operations - Miami Division to January 1997, Vice President thereafter. John R. Frazier Real Estate Manager of the Company to August 1996, Director of Real Estate to January 1997, Vice President thereafter. M. Clayton Hollis, Jr. Director of Government Relations of the Company to June 1994, Vice President thereafter. Mark R. Irby Vice President of the Company. Tina P. Johnson Assistant Secretary of the Company to September 1992, Treasurer to January 1995, Treasurer and Trustee of the 401(k) Plan - Publix Stock Fund to March 1996, Vice President, Treasurer and Trustee of the 401(k) Plan - Publix Stock Fund thereafter. James J. Lobinsky Vice President of the Company Thomas M. McLaughlin Director of Retail Operations - Lakeland Division of the Company to January 1994, Regional Director of Retail Operations - Lakeland Division to June 1994, Vice President thereafter.
8
Name Business Experience During Last Five Years - ---- ------------------------------------------ Sharon A. Miller Director of Administration of the Company to July 1992, Director of Administration and Assistant Secretary thereafter. Robert H. Moore Director of Retail Operations - Atlanta Division of the Company to January 1994, Vice President thereafter. Thomas M. O'Connor Director of Distribution - Miami Division of the Company to November 1992, Vice President thereafter. David P. Phillips Controller of the Company to March 1996, Vice President and Controller thereafter. James H. Rhodes II Director of Human Resources of the Company to April 1995, Vice President thereafter. Daniel M. Risener Vice President of the Company. Edward T. Shivers Vice President of the Company. James F. Slappey Director of Warehousing and Distribution - Lakeland Division of the Company to November 1992, Vice President thereafter.
PART II Item 5. Market for the Company's Common Stock and Related Stockholder Matters - ------------------------------------------------------------------------------ (a)Market Information ------------------ Substantially all transactions of the Company's common stock have been among the Company, its employees, former employees, their families and various benefit plans established for the Company's employees. The market price of the Company's common stock is determined by the Board of Directors based upon appraisals prepared by an independent appraiser. The market price for 1996 and 1995 was as follows:
1996 1995 ---- ---- January - February $16.25 $13.75 March - April 16.75 14.25 May - July 18.50 14.25 August - October 20.00 15.50 November - December 20.75 16.25
(b)Approximate Number of Equity Security Holders --------------------------------------------- As of March 4, 1997, the approximate number of holders of record of the Company`s common stock was 67,000. (c)Dividends --------- The Company paid cash dividends of $.13 per share of common stock in 1996 and $.11 per share in 1995. Payment of dividends is within the discretion of the Company's Board of Directors and depends on, among other factors, earnings, capital requirements and the operating and financial condition of the Company. It is expected that comparable cash dividends will be paid in the future. 9 Item 6. Five Year Summary of Selected Financial Data - -----------------------------------------------------
1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Sales: Sales $10,431,302 9,393,021 8,664,795 7,472,652 6,664,309 Percent increase 11.1% 8.4% 16.0% 12.1% 8.5% Comparable store sales percent increase 5.6% 2.8% 5.2% 6.4% 4.6% Earnings: Gross profit $ 2,424,799 2,124,036 1,952,043 1,638,044 1,479,788 Earnings before income tax expense and cumulative effect of changes in accounting principles $ 416,584 381,500 378,300 288,709 253,677 Net earnings before cumulative effect of changes in accounting principles $ 265,176 242,141 238,567 183,811 166,455 Net earnings $ 265,176 242,141 238,567 180,317 166,455 Net earnings as a percent of sales 2.54% 2.58% 2.75% 2.41% 2.50% Common stock: Weighted average shares outstanding* 221,195,884 225,852,938 231,514,459 236,249,110 239,248,081 Net earnings per common share, based on weighted average shares outstanding* $ 1.20 1.07 1.03 .76 .70 Dividends per share* $ .13 .11 .09 .08 .08 Financial data: Capital expenditures $ 226,752 256,629 374,190 320,167 202,597 Working capital $ 317,265 232,570 159,971 137,160 241,191 Current ratio 1.35 1.31 1.24 1.23 1.48 Total assets $ 2,921,084 2,559,365 2,302,336 2,054,315 1,791,247 Long-term debt $ 108 1,765 3,031 4,930 6,938 Stockholders' equity $ 1,751,179 1,614,717 1,473,154 1,308,009 1,168,091 Other: Number of stores 534 508 470 425 400
NOTE: Amounts are in thousands, except per share and share amounts. Fiscal year 1994 includes 53 weeks. All other years include 52 weeks. * Restated to give retroactive effect for 5-for-1 stock split in July 1992. 10 Item 7. Management's Discussion and Analysis of Financial Condition - -------------------------------------------------------------------- and Results of Operations ------------------------- Business Environment - -------------------- As of December 28, 1996, the Company operated 534 retail grocery stores representing approximately 23.9 million square feet of retail space. Historically, the Company's primary competition has been from national and regional chains and smaller independents located throughout its market areas. The Company has continued to experience increased competition from mass merchandisers. The products offered by these retailers include many of the same items sold by the Company. At the end of fiscal 1996, the Company had 446 stores located in Florida, 73 located in Georgia, 13 located in South Carolina and two located in Alabama. The Company opened its first store in Georgia during the fourth quarter of 1991, its first store in South Carolina in the fourth quarter of 1993, and its first store in Alabama in the third quarter of 1996. The Company opened 13 stores in Florida, 17 stores in Georgia, two stores in South Carolina and two stores in Alabama during 1996. The Company intends to continue to pursue vigorously new locations in Florida and other states. Liquidity and Capital Resources - ------------------------------- Operating activities continue to be the Company's primary source of liquidity. Net cash provided by operating activities was approximately $639.9 million in 1996, compared with $488.3 million in 1995 and $428.4 million in 1994. Working capital was approximately $317.3 million as of December 28, 1996, as compared with $232.6 million and $160.0 million as of December 30, 1995 and December 31, 1994, respectively. Cash and cash equivalents aggregated approximately $457.4 million as of December 28, 1996 as compared with $276.7 million and $188.9 million as of December 30, 1995 and December 31, 1994, respectively. Capital expenditures totaled $226.8 million in 1996. These expenditures were primarily incurred in connection with the opening of 34 new stores and remodeling or expanding 12 stores which added 1.4 million square feet. In addition, the Company closed eight stores. Capital expenditures totaled $256.6 million in 1995. These expenditures were primarily incurred in connection with the opening of 44 new stores and remodeling or expanding 19 stores which added 2.2 million square feet. Construction was completed on a new distribution center and dairy processing plant in Lawrenceville, Georgia. In addition, the Company closed six stores. Capital expenditures totaled $374.2 million in 1994. These expenditures were primarily incurred in connection with the opening of 50 new stores and remodeling or expanding 18 stores which added 2.6 million square feet. Construction was completed on a new general merchandise warehouse in Lakeland, Florida, and significant expenditures were incurred in the continued construction of a new distribution center in Lawrenceville, Georgia. In addition, the Company closed five stores. The Company hopes to open as many as 44 stores in 1997. Although real estate development is unpredictable, the Company's 1997 new store growth represents a reasonable estimate of anticipated future growth. Capital expenditures for 1997, primarily made up of new store construction and the remodeling or expanding of several existing stores, are expected to be approximately $300 million. This capital program is subject to continuing change and review. The 1997 capital expenditures are expected to be financed by internally generated funds and current liquid assets. In the normal course of operations, the Company replaces stores and closes unprofitable stores. The impact of future store closings is not expected to be material. 11 The Company is self-insured, up to certain limits, for health care, fleet liability, general liability and workers' compensation claims. Reserves are established to cover estimated liabilities for existing and anticipated claims based on actual experience including, where necessary, actuarial studies. The Company has insurance coverage for losses in excess of varying amounts. The provision for self-insured reserves was $122.0 million, $103.1 million and $89.6 million in fiscal 1996, 1995 and 1994, respectively. The Company does not believe its self-insurance program will have a material adverse impact on its future liquidity, financial condition or results of operations. The Company has committed lines of credit totaling $100.0 million and one uncommitted line of credit for $25.0 million. These lines are reviewed annually by the banks. The interest rates for these lines are at or below the prime rate. No amounts were outstanding on the lines of credit as of December 28, 1996 or December 30, 1995. Cash generated in excess of the amount needed for current operations and capital expenditures is invested in short-term and long- term investments. Short-term investments were approximately $65.6 million in 1996 compared with $74.3 million in 1995. Long-term investments, primarily comprised of tax exempt bonds and preferred stocks, were approximately $172.5 million in 1996 compared with $119.4 million in 1995. Management believes the Company's liquidity will continue to be strong. The Company currently repurchases common stock at the stockholders' request in accordance with the terms of the Company's Employee Stock Purchase Plan. The Company expects to continue to repurchase its common stock, as offered by its stockholders from time to time, at its then currently appraised value. However, such purchases are not required and the Company retains the right to discontinue them at any time. Results of Operations - --------------------- The Company's fiscal year ends on the last Saturday in December. Fiscal years 1996 and 1995 included 52 weeks and fiscal year 1994 included 53 weeks. Sales for fiscal 1996 were $10,431.3 million as compared with $9,393.0 million in fiscal 1995, an 11.1% increase. This reflects an increase of $526.0 million or 5.6% in sales from stores that were open for all of both years (comparable stores) and sales of $512.3 million or 5.5% from the net impact of new and closed stores since the beginning of 1995. Net new stores contributed an increase of 6.2% or approximately 1.4 million square feet in retail space in fiscal 1996. Sales for fiscal 1995 were $9,393.0 million as compared with $8,664.8 million in fiscal 1994, an 8.4% increase. On a comparative 52 week basis, the Company estimates that sales rose 10.3%. This reflects an increase of $243.6 million or 2.8% in sales from comparable stores and sales of $653.7 million or 7.5% from the net impact of new and closed stores since the beginning of 1994. Net new stores contributed an increase of 9.8% or approximately 2.0 million square feet in retail space in fiscal 1995. Cost of merchandise sold including store occupancy, warehousing and delivery expenses was approximately 76.8% of sales in 1996 as compared with 77.4% and 77.5% in 1995 and 1994, respectively. In 1996 and 1995, cost of merchandise sold decreased as a percentage of sales due to buying and merchandising efficiencies. Operating and administrative expenses, as a percent of sales, were 19.3%, 19.4% and 19.1% in 1996, 1995 and 1994, respectively. The significant components of operating and administrative expenses are payroll costs, employee benefits and depreciation. In recent years, the impact of inflation on the Company's food prices has been lower than the overall increase in the Consumer Price Index. 12 Nonrecurring Charge - ------------------- An $89.0 million nonrecurring charge was recorded in the fourth quarter of 1996 to cover the settlements of class action litigation against the Company involving alleged violations of the Federal Civil Rights Act and Florida law with respect to certain of the Company's retail employees and certain other allegations resulting from a notice of charge issued by the Equal Employment Opportunity Commission. The nonrecurring charge covers the full cost of the settlements, including the agreed payments to class members and their counsel, as well as the estimated cost of implementing and complying with the procedures agreed to be established under the settlements. The impact of the nonrecurring charge on net earnings was $46.4 million or $.21 per share for fiscal 1996. The liability for the settlements is reflected as a current nonrecurring accrued liability in the Company's consolidated balance sheet as of December 28, 1996. Accounting Standards - -------------------- The Company adopted Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities," in the first quarter of 1994. This Standard requires the reporting of certain securities at fair value except for those securities which the Company has the positive intent and ability to hold to maturity. The Company adopted the provisions of this Standard for investments held as of, or acquired after, the beginning of fiscal 1994. The cumulative effect of adopting the Standard as of the beginning of fiscal 1994 was not material. In accordance with the Standard, prior period financial statements were not restated to reflect the change in accounting principle. The Company adopted Financial Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in the first quarter of 1996. This Standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This Standard also requires that long-lived assets and certain identifiable intangibles to be disposed of be reported at the lower of the carrying amount or fair value less costs to sell. The effect of adopting the Standard as of the beginning of fiscal 1996 was not material. Item 8. Financial Statements and Supplemental Data - --------------------------------------------------- The Company's financial statements, together with the independent auditors' report thereon, are included in the section following Part IV of this report. Item 9. Changes in and Disagreements with Accountants on Accounting - ---------------------------------------------------------------------- and Financial Disclosure ------------------------ None 13 PART III Item 10. Directors, Executive Officers, Promoters and Control Persons - ---------------------------------------------------------------------- of the Registrant ----------------- Certain information concerning the directors of the Company is incorporated by reference to pages 2 through 5 of the Proxy Statement of the Company (1997 Proxy Statement) which the Company intends to file no later than 120 days after its fiscal year end. Certain information concerning the executive officers of the Company is set forth in Part I under the caption "Executive Officers of the Company." Item 11. Executive Compensation - -------------------------------- Information regarding executive compensation is incorporated by reference to pages 5 through 8 of the 1997 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management - ------------------------------------------------------------------------ The following table sets forth, as of March 4, 1997, the information with respect to common stock ownership of all directors, including some who are 5% or more beneficial owners, and all officers and directors as a group. Also, listed are others known by the Company to own beneficially 5% or more of the shares of the Company's common stock.
Amount and Nature Percent Name of Beneficial Ownership (1) of Class - ---- --------------------------- -------- Carol Jenkins Barnett 12,299,237 (2) 5.60 Hoyt R. Barnett 22,594,229 (3) 10.29 W. Edwin Crenshaw 641,812 * Mark C. Hollis 1,432,188 (4) * Charles H. Jenkins, Jr. 1,791,593 * Howard M. Jenkins 13,683,037 (5) 6.23 Tina P. Johnson 1,681,624 (6) * E. V. McClurg 1,987,892 * William H. Vass 32,590,655 (7) 14.84 All Officers and Directors as a group (28 individuals) 88,063,160 (8) 40.11 All Other Beneficial Owners: - ---------------------------- Publix Super Markets, Inc. Profit Sharing Plan and Trust 21,200,000 9.66 Publix Super Markets, Inc. Employee Stock Ownership Plan and Trust 32,556,845 14.83 Nancy E. Jenkins 14,703,305 6.70
*Shares represent less than 1% of class. Note references are explained on the following page. 14 (1) As used in the table on the preceding page, "beneficial ownership" means the sole or shared voting or investment power with respect to the Company's common stock. Holdings of officers include shares allocated to their individual accounts in the Company's Employee Stock Ownership Plan, over which each officer exercises sole voting power and shared investment power. In accordance with the beneficial ownership regulations, the same shares of common stock may be included as beneficially owned by more than one individual or entity. The address for all beneficial owners is 1936 George Jenkins Boulevard, Lakeland, Florida 33815. (2) Includes 1,268,316 shares which are also shown as beneficially owned by Carol Jenkins Barnett's husband, Hoyt R. Barnett, but excludes all other shares beneficially owned by Hoyt R. Barnett, as to which Carol Jenkins Barnett disclaims beneficial ownership. (3) Hoyt R. Barnett is Trustee of the Profit Sharing Plan which is the record owner of 21,200,000 shares of common stock over which he exercises sole voting and investment power. Total shares beneficially owned include 1,268,316 shares also shown as beneficially owned by his wife, Carol Jenkins Barnett, but exclude all other shares of common stock beneficially owned by Carol Jenkins Barnett, as to which Hoyt R. Barnett disclaims beneficial ownership. (4) All shares are owned in a family trust over which Mark C. Hollis is Co-Trustee with his wife. As Co-Trustee, Mark C. Hollis has shared voting and investment power for these shares. (5) Howard M. Jenkins has sole voting and sole investment power over 2,802,490 shares of common stock which are held directly, sole voting and sole investment power over 162,103 shares which are held indirectly and shared voting and shared investment power over 10,700,373 shares which are held indirectly. (6) Tina P. Johnson is Trustee of the 401(k) Plan - Publix Stock Fund which is the record owner of 1,634,149 shares of common stock over which she has sole voting and shared investment power. (7) William H. Vass is Trustee of the Employee Stock Ownership Plan (ESOT) which is the record owner of 32,556,845 shares of common stock over which he has shared investment power. As Trustee, William H. Vass exercises sole voting power over 643,923 shares in the ESOT because such shares have not been allocated to participants' accounts. For ESOT shares allocated to participants' accounts, William H. Vass will vote shares as instructed by participants. Additionally, William H. Vass will vote ESOT shares for which no instruction is received. (8) Includes 55,390,994 shares of common stock owned by the Profit Sharing Plan, ESOT and 401(k) Plan. Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------- Information regarding certain relationships and related transactions is incorporated by reference to pages 2 through 5 and 8 of the 1997 Proxy Statement. 15 PART IV Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K - ------------------------------------------------------------------------ (a) Consolidated Financial Statements and Schedule ---------------------------------------------- The consolidated financial statements and schedule listed in the accompanying Index to Consolidated Financial Statements and Schedule are filed as part of this Annual Report on Form 10-K. (b) Reports on Form 8-K ------------------- The Company filed a report on Form 8-K dated January 24, 1997, reporting the Shores Agreement and the EEOC Agreement as described in Part I, Item 3. (c) Exhibits -------- 3(a). Articles of Incorporation of the Company, together with all amendments thereto are incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 25, 1993. 3(b). Amended and Restated By-laws of the Company. 9. Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 31, 1988. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective March 8, 1990, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 30, 1989. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective June 14, 1991, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 28, 1991. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective November 3, 1992, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1992. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective February 26, 1993, is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 26, 1992. Amendment to Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins, effective March 1, 1994 is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 31, 1994. Deed of Termination of Voting Trust Agreement dated September 12, 1986, between Howard M. Jenkins, Julia J. Fancelli, Nancy E. Jenkins and David F. Jenkins effective June 9, 1995 is incorporated by reference to the exhibits to the Annual Report of the Company on Form 10-K for the year ended December 30, 1995. 21. Subsidiary of the Company. 27. Financial Data Schedule for the year ended December 28, 1996. 16 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PUBLIX SUPER MARKETS, INC. March 4, 1997 By: /s/ S. Keith Billups -------------------- S. Keith Billups Secretary Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. Chairman of the Board, Chief Executive Officer and Director /s/ Howard M. Jenkins (Principal Executive Officer) March 4, 1997 - --------------------------- Howard M. Jenkins Chairman of the Executive /s/ Charles H. Jenkins, Jr. Committee and Director March 4, 1997 - --------------------------- Charles H. Jenkins, Jr. /s/ W. Edwin Crenshaw President and Director March 4, 1997 - --------------------------- W. Edwin Crenshaw Executive Vice President and Director /s/ William H. Vass (Principal Financial Officer) March 4, 1997 - --------------------------- William H. Vass Executive Vice President /s/ Hoyt R. Barnett and Director March 4, 1997 - --------------------------- Hoyt R. Barnett Vice President, /s/ Tina P. Johnson Treasurer and Director March 4, 1997 - --------------------------- Tina P. Johnson Vice President and Controller /s/ David P. Phillips (Principal Accounting Officer) March 4, 1997 - --------------------------- David P. Phillips 17 PUBLIX SUPER MARKETS, INC. Index to Consolidated Financial Statements and Schedule Independent Auditors' Report Consolidated Financial Statements: Consolidated Balance Sheets - December 28, 1996 and December 30, 1995 Consolidated Statements of Earnings - Years ended December 28, 1996, December 30, 1995 and December 31, 1994 Consolidated Statements of Stockholders' Equity - Years ended December 28, 1996, December 30, 1995 and December 31, 1994 Consolidated Statements of Cash Flows - Years ended December 28, 1996, December 30, 1995 and December 31, 1994 Notes to Consolidated Financial Statements The following consolidated supporting schedule of Publix Super Markets, Inc. for the years ended December 28, 1996, December 30, 1995 and December 31, 1994 is submitted herewith: Schedule: II - Valuation and Qualifying Accounts All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. 18 INDEPENDENT AUDITORS' REPORT ---------------------------- To the Stockholders of Publix Super Markets, Inc.: We have audited the consolidated financial statements of Publix Super Markets, Inc. (the "Company") as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the consolidated financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Publix Super Markets, Inc. as of December 28, 1996 and December 30, 1995 and the results of its operations and its cash flows for each of the years in the three-year period ended December 28, 1996 in conformity with generally accepted accounting principles. Also in our opinion, the related consolidated financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Tampa, Florida February 26, 1997 19 PUBLIX SUPER MARKETS, INC. Consolidated Balance Sheets December 28, 1996 and December 30, 1995
Assets 1996 1995 ------ ---- ---- (Amounts in thousands) Current assets: Cash and cash equivalents $ 457,405 276,700 Short-term investments 65,586 74,292 Trade receivables (principally due from suppliers) 61,221 44,492 Merchandise inventories 570,254 542,886 Deferred tax assets 71,027 36,475 Prepaid expenses 1,339 3,269 ---------- ---------- Total current assets 1,226,832 978,114 ---------- ---------- Long-term investments 172,486 119,412 Other noncurrent assets 11,491 9,091 Property, plant and equipment: Land 87,052 77,741 Buildings and improvements 577,129 547,647 Furniture, fixtures and equipment 1,747,854 1,599,133 Leasehold improvements 282,922 256,517 Construction in progress 33,509 59,167 ---------- ---------- 2,728,466 2,540,205 Less accumulated depreciation 1,218,191 1,087,457 ---------- ---------- Net property, plant and equipment 1,510,275 1,452,748 ---------- ---------- $2,921,084 2,559,365 ========== ==========
See accompanying notes to consolidated financial statements. 20 PUBLIX SUPER MARKETS, INC. Consolidated Balance Sheets December 28, 1996 and December 30, 1995
Liabilities and Stockholders' Equity 1996 1995 ------------------------------------ ---- ---- (Amounts in thousands) Current liabilities: Current installments of long-term debt $ 130 1,265 Accounts payable 523,497 500,399 Accrued expenses: Salaries and wages 47,115 41,276 Contribution to retirement plans 73,555 67,348 Self-insurance reserves 64,250 58,442 Other 90,984 75,496 Nonrecurring charge 89,000 --- ---------- ---------- Total accrued expenses 364,904 242,562 ---------- ---------- Federal and state income taxes 21,036 1,318 ---------- ---------- Total current liabilities 909,567 745,544 Long-term debt, excluding current installments 108 1,765 Deferred tax liabilities, net 100,127 103,707 Self-insurance reserves 73,336 60,435 Accrued postretirement benefit cost 37,295 33,197 Other noncurrent liabilities 49,472 --- ---------- ---------- Total liabilities 1,169,905 944,648 ---------- ---------- Stockholders' equity: Common stock of $1 par value. Authorized 300,000,000 shares; issued and outstanding 219,942,912 shares in 1996 and 225,746,454 shares in 1995 219,943 225,746 Additional paid-in capital 91,991 85,280 Reinvested earnings 1,437,902 1,303,287 ---------- ---------- 1,749,836 1,614,313 Unrealized gain on investment securities available-for-sale, net 1,343 404 ---------- ---------- Total stockholders' equity 1,751,179 1,614,717 Commitments and contingencies ---------- ---------- $2,921,084 2,559,365 ========== ==========
See accompanying notes to consolidated financial statements. 21 PUBLIX SUPER MARKETS, INC. Consolidated Statements of Earnings Years ended December 28, 1996, December 30, 1995 and December 31, 1994
1996 1995 1994 ---- ---- ---- (Amounts in thousands, except per share amounts) Revenues: Sales $10,431,302 9,393,021 8,664,795 Other income, net 94,667 77,685 77,693 ----------- ---------- ---------- Total revenues 10,525,969 9,470,706 8,742,488 ----------- ---------- ---------- Costs and expenses: Cost of merchandise sold including store occupancy, warehousing and delivery expenses 8,006,503 7,268,985 6,712,752 Operating and administrative expenses 2,013,655 1,819,792 1,650,768 Nonrecurring charge 89,000 --- --- Interest expense 227 429 668 ----------- ---------- ---------- Total costs and expenses 10,109,385 9,089,206 8,364,188 ----------- ---------- ---------- Earnings before income tax expense 416,584 381,500 378,300 Income tax expense 151,408 139,359 139,733 ----------- ---------- ---------- Net earnings $ 265,176 242,141 238,567 =========== ========== ========== Net earnings per common share, based on weighted average shares outstanding $ 1.20 1.07 1.03 =========== ========== ==========
See accompanying notes to consolidated financial statements. 22 PUBLIX SUPER MARKETS, INC. Consolidated Statements of Stockholders' Equity Years ended December 28, 1996, December 30, 1995 and December 31, 1994
Common Unrealized stock gain (loss) acquired on investment Total Additional from securities stock- Common paid-in Reinvested stock- available- holders' stock capital earnings holders for-sale, net equity ----- ------- -------- ------- ------------- ------ (Amounts in thousands) Balances at December 25, 1993 $238,157 73,240 1,020,565 (23,953) --- 1,308,009 Net earnings for the year --- --- 238,567 --- --- 238,567 Cash dividends, $.09 per share --- --- (20,782) --- --- (20,782) Contribution of 3,306,417 shares to retirement plans --- 5,181 --- 39,302 --- 44,483 9,255,992 shares acquired from stockholders --- --- --- (114,350) --- (114,350) Sale of 1,498,300 shares to stockholders --- --- --- 19,207 --- 19,207 Change in valuation allowance --- --- --- --- (1,980) (1,980) Retirement of 6,571,887 shares (6,572) --- (73,222) 79,794 --- --- -------- ------ --------- ------- ----- --------- Balances at December 31, 1994 231,585 78,421 1,165,128 --- (1,980) 1,473,154 Net earnings for the year --- --- 242,141 --- --- 242,141 Cash dividends, $.11 per share --- --- (25,250) --- --- (25,250) Contribution of 3,369,603 shares to retirement plans --- 6,859 --- 47,898 --- 54,757 11,196,418 shares acquired from stockholders --- --- --- (162,137) --- (162,137) Sale of 1,987,772 shares to stockholders --- --- --- 29,668 --- 29,668 Change in valuation allowance --- --- --- --- 2,384 2,384 Retirement of 5,839,043 shares (5,839) --- (78,732) 84,571 --- --- -------- ------ --------- ------- ----- --------- Balances at December 30, 1995 225,746 85,280 1,303,287 --- 404 1,614,717 Net earnings for the year --- --- 265,176 --- --- 265,176 Cash dividends, $.13 per share --- --- (29,184) --- --- (29,184) Contribution of 3,156,519 shares to retirement plans --- 6,711 --- 57,487 --- 64,198 11,161,186 shares acquired from stockholders --- --- --- (206,235) --- (206,235) Sale of 2,200,962 shares to stockholders --- --- --- 41,568 --- 41,568 Change in valuation allowance --- --- --- --- 939 939 Retirement of 5,803,705 shares (5,803) --- (101,377) 107,180 --- --- -------- ------ --------- ------- ----- --------- Balances at December 28, 1996 $219,943 91,991 1,437,902 --- 1,343 1,751,179 ======== ====== ========= ======= ===== =========
See accompanying notes to consolidated financial statements. 23 PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows Years ended December 28, 1996, December 30, 1995 and December 31, 1994
1996 1995 1994 ---- ---- ---- (Amounts in thousands) Cash flows from operating activities: Cash received from customers $10,482,420 9,451,659 8,725,307 Cash paid to employees and suppliers (9,589,610) (8,758,575) (8,102,577) Dividends and interest received 28,816 21,649 17,344 Interest paid (256) (432) (763) Income taxes paid (170,412) (124,884) (136,533) Payment for self-insured claims (103,286) (93,250) (80,044) Other operating cash receipts 626 548 12,231 Other operating cash payments (8,395) (8,376) (6,610) ----------- ---------- ---------- Net cash provided by operating activities 639,903 488,339 428,355 ----------- ---------- ---------- Cash flows from investing activities: Payment for property, plant and equipment (226,752) (256,629) (374,190) Proceeds from sale of property, plant and equipment 11,072 3,559 1,500 Payment for investment securities - available-for-sale (AFS) (453,334) (241,414) (207,051) Payment for investment securities - held-to-maturity (HTM) --- --- (14,735) Proceeds from sale and maturity of investment securities - AFS 408,808 252,009 257,396 Proceeds from sale and maturity of investment securities - HTM --- --- 16,527 Other, net (2,349) 1,290 301 ----------- ---------- ---------- Net cash used in investing activities (262,555) (241,185) (320,252) ----------- ---------- ---------- Cash flows from financing activities: Payment of long-term debt (2,792) (1,620) (2,290) Proceeds from sale of common stock 41,568 29,668 19,207 Payment for acquisition of common stock (206,235) (162,137) (114,350) Dividends paid (29,184) (25,250) (20,782) ----------- ---------- ---------- Net cash used in financing activities (196,643) (159,339) (118,215) ----------- ---------- ---------- Net increase (decrease) in cash and cash equivalents 180,705 87,815 (10,112) Cash and cash equivalents at beginning of year 276,700 188,885 198,997 ----------- ---------- ---------- Cash and cash equivalents at end of year $ 457,405 276,700 188,885 =========== ========== ==========
See accompanying notes to consolidated financial statements. (Continued) 24 PUBLIX SUPER MARKETS, INC. Consolidated Statements of Cash Flows (Continued)
1996 1995 1994 ---- ---- ---- (Amounts in thousands) Reconciliation of Net Earnings to Net Cash Provided by Operating Activities Net earnings $265,176 242,141 238,567 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 158,454 144,717 128,993 Contribution to retirement plans 36,313 32,500 27,500 Deferred income taxes (38,721) 15,886 12,981 Loss on sale of property, plant and equipment 242 5,891 3,672 (Gain) loss on sale of investments 126 (681) 3,234 Self-insurance reserves in excess of current payments 18,709 9,872 9,553 Postretirement accruals in excess of current payments 4,098 2,867 3,865 Increase (decrease) in advance purchase allowances 60,773 (3,358) (3,358) Other, net 967 1,236 (1,201) Changes in current assets and liabilities: (Increase) decrease in trade receivables (16,729) (3,643) 3,528 Increase in merchandise inventories (27,368) (62,010) (76,274) (Increase) decrease in prepaid expenses 1,930 (1,502) (36) Increase in accounts payable and accrued expenses 156,215 105,834 82,855 Increase (decrease) in federal and state income taxes payable 19,718 (1,411) (5,524) -------- ------- ------- Total adjustments 374,727 246,198 189,788 -------- ------- ------- Net cash provided by operating activities $639,903 488,339 428,355 ======== ======= =======
See accompanying notes to consolidated financial statements. 24 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements December 28, 1996, December 30, 1995 and December 31, 1994 (1) Summary of Significant Accounting Policies ------------------------------------------ (a)Business -------- The Company is in the business of operating retail food supermarkets in Florida, Georgia, South Carolina and Alabama. (b)Principles of Consolidation --------------------------- The consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. (c)Definition of Fiscal Year ------------------------- The fiscal year ends on the last Saturday in December. Fiscal years 1996 and 1995 include 52 weeks. Fiscal year 1994 includes 53 weeks. (d)Cash Equivalents ---------------- The Company considers all liquid investments with maturities of three months or less to be cash equivalents. (e)Investments ----------- At the beginning of fiscal year 1994, the Company adopted Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities," for investments held as of, or acquired after, the beginning of fiscal 1994, without restating prior years' financial statements. The cumulative effect of adopting the Standard as of the beginning of fiscal 1994 was not material. (f)Inventories ----------- Inventories are valued at cost (principally the dollar value last-in, first-out method) including store inventories which are calculated by the retail method. (g)Property, Plant and Equipment and Depreciation ---------------------------------------------- Maintenance and repairs are charged to expense as incurred. Expenditures for renewals and betterments are capitalized. The gain or loss on traded items is applied to the asset accounts or reflected in income for disposed items. Assets are recorded at cost. Assets acquired subsequent to fiscal year 1991 are depreciated using the straight-line method. Assets acquired prior to fiscal year 1992 are depreciated using the straight-line or declining balance method. (h)Self-insurance -------------- Self-insurance reserves are established for health care, fleet liability, general liability and workers' compensation claims. These reserves are determined based on actual experience including, where necessary, actuarial studies. The Company has insurance coverage for losses in excess of varying amounts. (Continued) 26 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (i)Long-Lived Assets ----------------- At the beginning of fiscal year 1996, the Company adopted Financial Accounting Standard No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This Standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. This Standard also requires that long-lived assets and certain identifable intangibles to be disposed of be reported at the lower of the carrying amount or fair value less costs to sell. The effect of adopting the Standard as of the beginning of fiscal 1996 was not material. (j)Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (k)Reclassification ---------------- Certain 1994 and 1995 amounts have been reclassified to conform with the 1996 presentation. (2) Merchandise Inventories ----------------------- If the first-in, first-out method of valuing inventories had been used by the Company, inventories and current assets would have been higher than reported by approximately $101,531,000, $96,231,000 and $90,276,000 as of December 28, 1996, December 30, 1995 and December 31, 1994, respectively. Also, net earnings would have increased by approximately $2,764,000 or $.01 per share in 1996, $3,106,000 or $.01 per share in 1995 and $3,408,000 or $.01 per share in 1994. (3) Fair Value of Financial Instruments ----------------------------------- The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents: The carrying amount for cash and cash equivalents approximates fair value. Investment securities: The fair values for marketable debt and equity securities are based on quoted market prices. Long-term debt, including current installments: The carrying amount for long-term debt approximates fair value based on current interest rates. The carrying amount of the Company's financial instruments as of December 28, 1996 and December 30, 1995 approximated their respective fair values. 2 (Continued) 27 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (4) Investments ----------- Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. The Company had no held-to-maturity securities as of December 28, 1996 and December 30, 1995. All of the Company's debt securities and marketable equity securities are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of stockholders' equity. The cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in other income, net. Realized gains and losses and declines in value judged to be other- than-temporary on available-for-sale securities are included in other income, net. The cost of securities sold is based on the specific identification method. Following is a summary of available-for-sale securities as of December 28, 1996 and December 30, 1995:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value ---- ----- ------ ----- (Amounts in thousands) 1996: Tax-free bonds $156,694 713 416 156,991 Equity securities 79,191 2,584 694 81,081 -------- ----- ----- ------- $235,885 3,297 1,110 238,072 ======== ===== ===== ======= 1995: Tax-free bonds $169,366 1,121 304 170,183 Equity securities 23,681 843 1,003 23,521 -------- ----- ----- ------- $193,047 1,964 1,307 193,704 ======== ===== ===== =======
For the fiscal years ended December 28, 1996 and December 30, 1995, the realized gains on sales of available-for-sale securities totaled $451,000 and $887,000, respectively, and the realized losses totaled $577,000 and $663,000, respectively. The unrealized gains on available-for-sale securities, net of applicable income taxes, included as a separate component of stockholders' equity, was $1,343,000 at the end of 1996 and $404,000 at the end of 1995. The amortized cost and estimated fair value of debt and marketable equity securities classified as available-for-sale as of December 28, 1996 and December 30, 1995, by expected maturity, are as follows:
1996 1995 ---------------------- ---------------------- Amortized Fair Amortized Fair Cost Value Cost Value ---- ----- ---- ----- (Amounts in thousands) Due in one year or less $ 65,487 65,586 74,255 74,292 Due after one year through three years 57,795 57,985 39,809 40,077 Due after three years 33,412 33,420 55,302 55,814 ------- ------- ------- ------- 156,694 156,991 169,366 170,183 Equity securities 79,191 81,081 23,681 23,521 ------- ------- ------- ------- $235,885 238,072 193,047 193,704 ======== ======= ======= =======
3 (Continued) 28 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (5) Postretirement Benefits ----------------------- The Company provides life insurance benefits for salaried and hourly full-time employees. Such employees retiring from the Company on or after attaining age 55 and having ten years of credited service are entitled to postretirement life insurance benefits. The Company funds the life insurance benefits on a pay- as-you-go basis. During 1996, 1995 and 1994, the Company made benefit payments to beneficiaries of retirees of approximately $1,420,000, $1,310,000 and $657,000, respectively. Net postretirement benefit cost consists of the following components:
1996 1995 1994 ---- ---- ---- (Amounts in thousands) Service cost attributed to service during the year $ 1,980 1,362 1,440 Interest cost on postretirement benefit obligation 3,208 2,815 2,405 Net amortization 330 --- 145 ------- ----- ----- Net periodic postretirement benefit cost $ 5,518 4,177 3,990 ======= ===== =====
The following summarizes the reconciliation of the amounts recognized in the Company's consolidated balance sheets as of December 28, 1996 and December 30, 1995:
1996 1995 ---- ---- (Amounts in thousands) Accumulated postretirement benefit obligation: Retirees $15,337 13,820 Fully eligible active plan participants 12,981 10,951 Other active plan participants 18,201 17,979 ------- ------ Accumulated postretirement benefit obligation 46,519 42,750 Unrecognized net loss (9,224) (9,553) ------- ------ Accrued postretirement benefit cost $37,295 33,197 ======= ======
The following actuarial assumptions were used in the calculation of the year end accumulated postretirement benefit obligation:
1996 1995 1994 ---- ---- ---- Discount Rate 7.75% 7.25% 8.25% Salary Increase Rate 4.00% 4.00% 4.00%
The change in the discount rate from 8.25% to 7.25% in 1995 increased the accumulated postretirement benefit obligation by $5,922,000. The change in the discount rate from 7.25% to 7.75% in 1996 decreased the accumulated postretirement benefit obligation by $4,064,000 and is expected to decrease annual postretirement benefit costs by $637,000 beginning in 1997. 4 (Continued) 29 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (6) Retirement Plans ---------------- The Company has a trusteed, noncontributory profit sharing plan for the benefit of eligible employees. The amount of the Company's contribution to this plan is determined by the Board of Directors. The contribution cannot exceed 15% of compensation paid to participants. The expense recorded for contributions to this plan amounted to $49,010,000 in 1996, $44,941,000 in 1995 and $44,564,000 in 1994. The Company has an Employee Stock Ownership Trust (ESOT). Annual contributions to the ESOT are determined by the Board of Directors and can be made in Company stock or cash. In 1996, the Company contributed 1,750,000 shares of its common stock to the ESOT at an appraised value resulting in an expense to the Company of $36,313,000. In 1995 and 1994, the Company contributed 2,000,000 shares of its common stock to the ESOT at an appraised value resulting in an expense to the Company of $32,500,000 in 1995 and $27,500,000 in 1994. During 1996, 1995 and 1994, the Board of Directors approved additional contributions to the ESOT of $24,505,000, $22,444,000 and $22,257,000, respectively. The additional contributions are made to the ESOT during the subsequent year. Effective January 1, 1995, the Company adopted a 401(k) plan for the benefit of eligible employees. The 401(k) plan is a voluntary defined contribution plan. Eligible employees may contribute up to 6% of their annual compensation, subject to certain maximum contribution restrictions. The Company may make a discretionary annual matching contribution to eligible participants of this plan as determined by the Board of Directors. During 1996 and 1995, the Board of Directors approved a match of 50% of eligible contributions up to 3% of eligible wages not to exceed a maximum of $750 per employee. The match, which is made in the subsequent year, is in the form of common stock of the Company. The expense recorded for the Company's match to the 401(k) plan was approximately $7,421,000 and $5,441,000 in 1996 and 1995, respectively. The Company intends to continue the profit sharing plan, ESOT and 401(k) plan indefinitely; however, the right to modify, amend or terminate these plans has been reserved. In the event of termination, all amounts contributed under the plans must be paid to the participants or their beneficiaries. (7) Nonrecurring Charge ------------------- An $89.0 million nonrecurring charge was recorded in the fourth quarter of 1996 to cover the settlements of class action litigation against the Company involving alleged violations of the Federal Civil Rights Act and Florida law with respect to certain of the Company's retail employees and certain other allegations resulting from a notice of charge issued by the Equal Employment Opportunity Commission. The nonrecurring charge covers the full cost of the settlements, including the agreed payments to class members and their counsel, as well as the estimated cost of implementing and complying with the procedures agreed to be established under the settlements (see note 9). The liability for the settlements is reflected as a current nonrecurring accrued liability in the Company's consolidated balance sheet as of December 28, 1996. 5 (Continued) 30 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (8) Income Taxes ------------ The provision for income taxes consists of the following:
Current Deferred Total ------- -------- ----- (Amounts in thousands) 1996: Federal $162,460 (33,073) 129,387 State 27,669 (5,648) 22,021 -------- ------ ------- $190,129 (38,721) 151,408 ======== ====== ======= 1995: Federal $104,996 13,546 118,542 State 18,477 2,340 20,817 -------- ------ ------- $123,473 15,886 139,359 ======== ====== ======= 1994: Federal $107,798 11,090 118,888 State 18,954 1,891 20,845 -------- ------ ------- $126,752 12,981 139,733 ======== ====== =======
The actual tax expense for 1996, 1995 and 1994 differs from the "expected" tax expense for those years (computed by applying the U.S. Federal corporate tax rate of 35% to earnings before income taxes) as follows:
1996 1995 1994 ---- ---- ---- (Amounts in thousands) Computed "expected" tax expense $145,804 133,525 132,405 State income taxes (net of Federal income tax benefit) 14,309 13,532 13,550 Tax exempt interest (7,066) (5,530) (4,589) Other, net (1,639) (2,168) (1,633) -------- ------- ------- $151,408 139,359 139,733 ======== ======= =======
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 28, 1996 and December 30, 1995 are as follows:
1996 1995 ---- ---- (Amounts in thousands) Deferred tax assets: Self-insurance reserves $ 50,363 43,529 Nonrecurring charge 34,390 --- Advance purchase allowances 23,483 --- Postretirement benefit cost 14,356 12,806 Retirement plan contributions 9,432 9,133 Inventory capitalization 7,552 5,216 Other 11,161 12,909 ________ _______ Total deferred tax assets $150,737 83,593 ======== ======= Deferred tax liabilities: Property plant and equipment, principally due to depreciation $179,570 150,721 Other 267 104 -------- ------- Total deferred tax liabilities $179,837 150,825 ======== =======
The Company expects the results of future operations to generate sufficient taxable income to allow utilization of deferred tax assets. 6 (Continued) 31 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (9) Commitments and Contingencies ----------------------------- (a)Operating Leases ---------------- The Company conducts a major portion of its retail operations from leased store and shopping center premises generally under 20 year leases. Contingent rentals paid to lessors of certain store facilities are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain cases, reimbursement of taxes and insurance. Total rental expense, net of sublease rental income, for the years ended December 28, 1996, December 30, 1995 and December 31, 1994, is as follows:
1996 1995 1994 ---- ---- ---- (Amounts in thousands) Minimum rentals $135,273 129,288 101,918 Contingent rentals 9,892 9,525 11,942 Sublease rental income (3,086) (2,600) (2,364) -------- ------- ------- $142,079 136,213 111,496 ======== ======= =======
As of December 28, 1996, future minimum lease payments for all noncancelable operating leases and related subleases are as follows:
Minimum Sublease Rental Rental Year Commitments Income Net ---- ----------- ------ --- (Amounts in thousands) 1997 $ 142,698 3,311 139,387 1998 141,716 2,910 138,806 1999 140,405 2,424 137,981 2000 138,717 2,039 136,678 2001 137,658 1,393 136,265 Thereafter 1,381,368 1,945 1,379,423 ---------- ------ --------- $2,082,562 14,022 2,068,540 ========== ====== =========
The Company also owns shopping centers which are leased to tenants for minimum monthly rentals plus, in certain instances, contingent rentals. Contingent rentals received are determined on the basis of a percentage of sales in excess of stipulated minimums plus, in certain instances, taxes. Contingent rentals were estimated at December 28, 1996 and are included in trade receivables. Rental income was approximately $9,491,000 in 1996, $9,443,000 in 1995 and $8,624,000 in 1994. The approximate amounts of minimum future rental payments to be received under operating leases are $7,308,000, $5,950,000, $4,436,000, $3,144,000 and $2,157,000 for the years 1997 through 2001, respectively, and $7,085,000 thereafter. (b)Lines of Credit --------------- The Company has committed lines of credit totaling $100,000,000 and one uncommitted line of credit for $25,000,000 available for short-term borrowings, with interest rates at or below the prime rate. There were no amounts outstanding as of December 28, 1996 or December 30, 1995. The Company pays no fees related to these lines. 7 (Continued) 32 PUBLIX SUPER MARKETS, INC. Notes to Consolidated Financial Statements (c)Litigation ---------- The Company was the subject of a notice of charge (the "Charge") issued by the Equal Employment Opportunity Commission (the "EEOC") in March 1992, In the Matter of: Kemp v. Publix Super Markets, Inc., alleging that the Company had and was engaged in violations of Title VII of the Federal Civil Rights Act by discriminating against women with respect to job assignments and promotions because of their gender. The Charge was subsequently expanded to include allegations of race discrimination. The Company was also a defendant in a certified class action filed in July 1995 in the Federal District Court for the Middle District of Florida, Tampa Division (the "Court"), by certain present or former employees of the Company, individually and on behalf of all other persons similarly situated (the "Shores case"). The plaintiffs alleged that the Company had and was then engaged in a policy and pattern or practice of gender-based discriminatory treatment of female employees with respect to job assignments, promotional opportunities, management positions, equal pay, full-time status, bonuses, and other benefits and conditions of employment, all in violation of Title VII of the Federal Civil Rights Act, as well as the Florida Civil Rights Act of 1992. The litigation class certified by the Court consisted of all female employees of the Company who from May 22, 1991 (Florida and South Carolina operations) or from October 19, 1991 (Georgia operations) had worked or were working in the Company's retail operations; expressly excluded were females who had worked only in the Company's pharmacy operations. On January 24, 1997, the Company, the EEOC and the plaintiffs in the Shores case entered into a settlement agreement (the "Shores Agreement") with respect to all matters related to the case. On January 27, 1997, the Court preliminarily approved the Shores Agreement. All parties intend to diligently pursue final approval of the Shores Agreement with the Court. Under the Shores Agreement, the Company will pay $81.5 million to the plaintiffs, their counsel and other class members. The Company agreed to establish a formal system by which employees will be considered for promotion. Promotions will be based on qualifications and expressed interest of employees. The Company has also agreed to make certain other procedural changes. Also on January 24, 1997, the Company agreed with the EEOC (the "EEOC Agreement") to settle all pending EEOC charges related to gender and race discrimination that were not included in the Shores Agreement. Under the EEOC Agreement, the Company agreed to pay an additional $3.5 million to members of the affected classes. The Company also agreed to follow procedures with respect to class members similar to those established under the Shores Agreement. The settlement agreements recognize that the Company continues to deny that it has engaged in any unlawful discriminatory activity. The Company will pay the settlements from liquid investment funds currently on hand and the settlements were charged against the Company's fiscal 1996 fourth quarter results (see note 7). Management does not believe that the settlements will cause any cash flow or liquidity problems or will have any material impact on the Company's future financial results. The Company is also a party in various legal claims and actions considered in the normal course of business. Management believes that the ultimate disposition of these matters will not have a material effect on the Company's liquidity, results of operations or financial condition. 8 33 Schedule II - ----------- PUBLIX SUPER MARKETS, INC. Valuation and Qualifying Accounts Years ended December 28, 1996, December 30, 1995 and December 31, 1994 (Amounts in thousands)
Balance at Additions Deductions Balance at beginning charged to from end of Description of year income reserves year ----------- ------- ------ -------- ---- Year ended December 28, 1996 Reserves not deducted from assets: Self-insurance reserves: -Current $ 58,442 109,094 103,286 64,250 -Noncurrent 60,435 12,901 --- 73,336 -------- ------- ------- ------- $118,877 121,995 103,286 137,586 ======== ======= ======= ======= Year ended December 30, 1995 Reserves not deducted from assets: Self-insurance reserves: -Current $ 49,295 102,397 93,250 58,442 -Noncurrent 59,710 725 --- 60,435 -------- ------- ------- ------- $109,005 103,122 93,250 118,877 ======== ======= ======= ======= Year ended December 31, 1994 Reserves not deducted from assets: Self-insurance reserves: -Current $ 48,918 80,421 80,044 49,295 -Noncurrent 50,534 9,176 --- 59,710 -------- ------- ------- ------- $ 99,452 89,597 80,044 109,005 ======== ======= ======= =======
34 PUBLIX SUPER MARKETS, INC. Index to Exhibits EXHIBIT 3(b) Amended and Restated By-Laws of the Company EXHIBIT 21 Subsidiary of the Company EXHIBIT 27 Financial Data Schedule for the year ended December 28, 1996 EX-3.(II) 2 AMENDED AND RESTATED BY-LAWS OF THE COMPANY 1 * * * * * * * AMENDED AND RESTATED BY-LAWS OF PUBLIX SUPER MARKETS, INC. (Effective as of November 19, 1996) * * * * * * * 2 AMENDED AND RESTATED BY-LAWS OF PUBLIX SUPER MARKETS, INC. (Effective as of November 19, 1996) TABLE OF CONTENTS Title Page ARTICLE I OFFICES 1 Section 1. Principal Office. 1 Section 2. Other Offices. 1 ARTICLE II STOCKHOLDERS 1 Section 1. Annual Meeting 1 Section 2. Special Meetings 1 Section 3. Place of Meeting 1 Section 4. Notice of Meeting 2 Section 5. Notice of Adjourned Meeting 2 Section 6. Waiver of Call and Notice of Meeting 2 Section 7. Quorum 2 Section 8. Adjournment; Quorum for Adjourned Meeting 2 Section 9. Voting on Matters Other than Election of Directors 3 Section 10. Voting for Directors 3 Section 11. Voting Lists 3 Section 12. Voting of Shares 3 Section 13. Proxies 3 Section 14. Informal Action by Stockholders 4 Section 15. Inspectors 4 ARTICLE III BOARD OF DIRECTORS 4 Section 1. General Powers 4 Section 2. Number, Election, Tenure and Qualifications 4 Section 3. Annual Meeting 5 Section 4. Regular Meetings 5 Section 5. Special Meetings 5 Section 6. Notice 5 Section 7. Quorum 5 Section 8. Adjournment; Quorum for Adjourned Meeting 5 Section 9. Manner of Acting 6 i 3 Section 10. Removal 6 Section 11. Vacancies 6 Section 12. Compensation 6 Section 13. Presumption of Assent 6 Section 14. Informal Action by Board 6 Section 15. Meeting by Telephone, Etc. 7 ARTICLE IV OFFICERS 7 Section 1. Number 7 Section 2. Appointment and Term of Office 7 Section 3. Resignation 7 Section 4. Removal 7 Section 5. Vacancies 7 Section 6. Duties of Officers 7 Section 7. Salaries 8 Section 8. Delegation of Duties 8 ARTICLE V EXECUTIVE AND OTHER COMMITTEES 8 Section 1. Creation of Committees 8 Section 2. Executive Committee 8 Section 3. Other Committees 9 Section 4. Removal or Dissolution 9 Section 5. Vacancies on Committees 9 Section 6. Meetings of Committees 9 Section 7. Absence of Committee Members 10 Section 8. Quorum of Committees 10 Section 9. Manner of Acting of Committees 10 Section 10. Minutes of Committees 10 Section 11. Compensation 10 Section 12. Informal Action 10 ARTICLE VI INDEMNIFICATION OF DIRECTORS AND OFFICERS 10 Section 1. General 10 Section 2. Actions by or in the Right of the Corporation 11 Section 3. Determination that Indemnification Is Proper 12 Section 4. Evaluation and Authorization 12 Section 5. Prepayment of Expenses 12 Section 6. Prompt Consideration 13 Section 7. Nonexclusivity and Limitations 13 Section 8. Continuation of Indemnification Right 13 Section 9. Insurance 14 ii 4 ARTICLE VII INTERESTED PARTIES 14 Section 1. General 14 Section 2. Determination of Quorum 14 Section 3. Approval by Stockholders 14 ARTICLE VIII CERTIFICATES OF STOCK 15 Section 1. Certificates for Shares 15 Section 2. Signatures of Past Officers 15 Section 3. Transfer Agents and Registrars 15 Section 4. Transfer of Shares 16 Section 5. Lost Certificates 16 ARTICLE IX RECORD DATE 16 Section 1. Record Date for Stockholder Actions 16 Section 2. Record Date for Dividend and Other Distributions 17 ARTICLE X DIVIDENDS 17 ARTICLE XI FISCAL YEAR 17 ARTICLE XII SEAL 17 ARTICLE XIII STOCK IN OTHER CORPORATIONS 17 ARTICLE XIV AMENDMENTS 18 ARTICLE XV EMERGENCY BY-LAWS 18 Section 1. Scope of Emergency By-laws 18 Section 2. Call and Notice of Meeting 18 Section 3. Quorum and Voting 18 Section 4. Appointment of Temporary Directors 18 Section 5. Modification of Lines of Succession 19 Section 6. Change of Principal Office 19 Section 7. Limitation of Liability 19 Section 8. Amendment or Repeal 19 iii 5 ARTICLE XVI PRECEDENCE OF LAW AND ARTICLES OF INCORPORATION 19 iv 6 AMENDED AND RESTATED BY-LAWS OF PUBLIX SUPER MARKETS, INC. (Effective as of November 19, 1996) ARTICLE I OFFICES Section 1. Principal Office. The principal office of Publix Super Markets, Inc. (the "Corporation") shall initially be located in Polk County, Florida. Its location may thereafter be changed to be at such place within or without the State of Florida as the Board of Directors of the Corporation (the "Board of Directors" or the "Board") shall from time to time determine. Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Florida as the Board of Directors or the officers of the Corporation acting within their authority may from time to time determine or the business of the Corporation may require. ARTICLE II STOCKHOLDERS Section 1. Annual Meeting. The annual meeting of the stockholders shall be held between January 1 and December 31, inclusive, in each year for the purpose of electing directors and for the transaction of such other proper business as may come before the meeting. The exact date of the meeting shall be established by the Board of Directors from time to time. Section 2. Special Meetings. Special meetings of the stockholders may be called, for any purpose or purposes, by the Board of Directors or the Chairman of the Board. Special meetings of the stockholders shall be called by the Chairman of the Board, the President or the Secretary if the holders of not less than ten (10) percent of all the votes entitled to be cast on any issue proposed to be considered at such special meeting sign, date and deliver to the Secretary one or more written demands for a special meeting, describing the purpose(s) for which it is to be held. Special meetings of the stockholders of the Corporation may not be called by any other person or persons. Notice and call of any such special meeting shall state the purpose or purposes of the proposed meeting, and business transacted at any special meeting of the stockholders shall be limited to the purposes stated in the notice thereof. Section 3. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Florida, as the place of meeting for any annual or special meeting of the stockholders. If no designation is made, the place of meeting shall be the principal office of the Corporation in the State of Florida. 1 7 Section 4. Notice of Meeting. Written notice stating the place, day and hour of an annual or special meeting and, in the case of a special meeting, the purpose or purposes for which it is called shall be given no fewer than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, except that no notice of a meeting need be given to any stockholders for which notice is not required to be given under applicable law. Notice may be delivered personally, via United States mail, telegraph, teletype, facsimile or other electronic transmission, or by private mail carriers handling nationwide mail services, by or at the direction of the President, the Secretary, the Board of Directors, or the person(s) calling the meeting. If mailed via United States mail, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at the stockholder's address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid. If the notice is mailed at least thirty (30) days before the date of the meeting, the mailing may be by a class of United States mail other than first class. Section 5. Notice of Adjourned Meeting. If a stockholders' meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if the new date, time or place is announced at the meeting before an adjournment is taken; and any business may be transacted at the adjourned meeting that might have been transacted on the original date of the meeting. If, however, a new record date for the adjourned meeting is or must be fixed under law, notice of the adjourned meeting must be given to persons who are stockholders as of the new record date and who are otherwise entitled to notice of such meeting. Section 6. Waiver of Call and Notice of Meeting. Call and notice of any stockholders' meeting may be waived by any stockholder before or after the date and time stated in the notice. Such waiver must be in writing signed by the stockholder and delivered to the Corporation. Neither the business to be transacted at nor the purpose of any meeting need be specified in such waiver. A stockholder's attendance at a meeting (a) waives such stockholder's ability to object to lack of notice or defective notice of the meeting, unless the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (b) waives such stockholder's ability to object to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter when it is presented. Section 7. Quorum. Except as otherwise provided in these By-laws or in the Articles of Incorporation of the Corporation , a majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of the stockholders. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or must be set for that adjourned meeting; and the withdrawal of stockholders after a quorum has been established at a meeting shall not affect the validity of any action taken at the meeting or any adjournment thereof. Section 8. Adjournment; Quorum for Adjourned Meeting. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum 2 8 shall be present, any business may be transacted which might have been transacted at the meeting as originally noticed. Section 9. Voting on Matters Other than Election of Directors. At any meeting at which a quorum is present, action on any matter other than the election of directors shall be approved if the votes cast by the holders of shares represented at the meeting and entitled to vote on the subject matter favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes or voting by classes is required by law, the Articles of Incorporation of the Corporation or these By-laws. Section 10. Voting for Directors. Directors shall be elected by a plurality of the votes cast by the shares entitled to vote at a meeting at which a quorum is present. Section 11. Voting Lists. At least ten (10) days prior to each meeting of stockholders, the officer or agent having charge of the stock transfer books for shares of the Corporation shall make a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, with the address and the number, class and series (if any) of shares held by each. The list shall be subject to inspection by any stockholder during normal business hours for at least ten (10) days prior to the meeting. The list also shall be available at the meeting and shall be subject to inspection by any stockholder at any time during the meeting or its adjournment. The list shall be prima facie evidence as to who are the stockholders entitled to examine such list or the transfer books and to vote at any meeting of the stockholders. If the requirements of this Section have not been substantially complied with, the meeting shall be adjourned on the demand of any stockholder (in person or by proxy) until there has been substantial compliance with the requirements. If no demand for adjournment is made, failure to comply with the requirements of this Section does not affect the validity of any action taken at the meeting. Section 12. Voting of Shares. Except as otherwise provided in the Articles of Incorporation of the Corporation, each stockholder entitled to vote shall be entitled at every meeting of the stockholders to one vote in person or by proxy on each matter for each share of voting stock held by such stockholder. Such right to vote shall be subject to the right of the Board of Directors to fix a record date for voting stockholders as hereinafter provided. Treasury shares, and shares of stock of the Corporation owned directly or indirectly by another corporation the majority of the voting stock of which is owned or controlled by the Corporation, shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares. Section 13. Proxies. At all meetings of stockholders, a stockholder may vote by proxy, executed in writing and delivered to the Corporation in the original or transmitted via telegram, or as a photographic, photostatic or equivalent reproduction of a written proxy by the stockholder or by the stockholder's duly authorized attorney-in-fact. No proxy shall be valid after eleven (11) months from its date, unless the proxy provides for a longer period. Each proxy shall be filed with the Secretary before or at the time of the meeting. A proxy may be revoked at the pleasure of the record owner of the shares to which it relates, unless the proxy provides otherwise. In the event 3 9 that a proxy shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one is present, that one, shall have all of the powers conferred by the proxy upon all the persons so designated, unless the instrument shall provide otherwise. Section 14. Informal Action by Stockholders. Unless otherwise provided in the Articles of Incorporation of the Corporation, any action required or permitted to be taken at a meeting of the stockholders may be taken by means of one or more written consents that satisfy the requirements set forth below. In such event, no meeting, prior notice or formal vote shall be required. To be effective, a written consent (which may be in one or more counterparts) shall set forth the action taken and shall be signed by stockholders holding shares representing not less than the minimum number of votes of each voting group entitled to vote thereon that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. No written consent shall be effective unless, within sixty (60) days of the date of the earliest dated consent delivered to the Secretary, written consent signed by the number of stockholders required to take action is delivered to the Secretary. If authorization of an action is obtained by one or more written consents but less than all stockholders so consent, then within ten (10) days after obtaining the authorization of such action by written consents, notice must be given to each stockholder who did not consent in writing and to each stockholder who is not entitled to vote on the action. The notice shall fairly summarize the material features of the authorized action and, if the action be such for which dissenters' rights are provided under the Florida Business Corporation Act, the notice shall contain a clear statement of the right of stockholders dissenting therefrom to be paid the fair value of their shares upon compliance with the provisions of the Florida Business Corporation Act regarding the rights of dissenting stockholders. Section 15. Inspectors. For each meeting of the stockholders, the Board of Directors or the Chairman of the Board may appoint two inspectors to supervise the voting. If inspectors are so appointed, all questions respecting the qualification of any vote, the validity of any proxy and the acceptance or rejection of any vote shall be decided by such inspectors. Before acting at any meeting, the inspectors shall take an oath to execute their duties with strict impartiality and according to the best of their ability. If any inspector shall fail to be present or shall decline to act, the Chairman of the Board shall appoint another inspector to act in his or her place. In case of a tie vote by the inspectors on any question, the presiding officer shall decide the issue. ARTICLE III BOARD OF DIRECTORS Section 1. General Powers. The business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Articles of Incorporation of the Corporation or these By-laws directed or required to be exercised or done only by the stockholders. Section 2. Number, Election, Tenure and Qualifications. The number of directors of the Corporation shall be not less than three (3) nor more than fifteen (15). The exact number of directors shall be fixed by resolution adopted by a vote of a majority of the then authorized number of directors; provided 4 10 that no decrease in the number of directors shall have the effect of shortening the term of any then incumbent director. At each annual meeting of stockholders, the stockholders shall elect directors to hold office until the next succeeding annual meeting. Each director shall hold office until his or her term of office expires and until such director's successor is elected and qualifies, unless such director sooner dies, resigns or is removed by the stockholders at any annual or special meeting. It shall not be necessary for directors to be stockholders or residents of the State of Florida. All directors shall be natural persons who are 18 years of age or older. Section 3. Annual Meeting. Promptly after each annual meeting of stockholders, the Board of Directors shall hold its annual meeting for the purpose of the election of officers and the transaction of such other business as may come before the meeting. If such meeting is held at the same place as and immediately following such annual meeting of stockholders and if a majority of the directors are present at such place and time, no prior notice of such meeting shall be required to be given to the directors. Section 4. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall be determined from time to time by the Board of Directors. Section 5. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix the place for holding any special meetings of the Board of Directors called by such person or persons. If no such designation is made, the place of meeting shall be the principal office of the Corporation in the State of Florida. Section 6. Notice. Whenever notice of a meeting is required, written notice stating the place, day and hour of the meeting shall be delivered at least two (2) days prior thereto to each director, either personally, or by first-class United States mail, telegraph, teletype, facsimile or other form of electronic communication, or by private mail carriers handling nationwide mail services, to the director's business address. If notice is given by first-class United States mail, such notice shall be deemed to be delivered five (5) days after deposited in the United States mail so addressed with postage thereon prepaid or when received, if such date is earlier. If notice is given by telegraph, teletype, facsimile transmission or other form of electronic communication or by private mail carriers handling nationwide mail services, such notice shall be deemed to be delivered when received by the director. Any director may waive notice of any meeting, either before, at or after such meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened and so states at the beginning of the meeting or promptly upon arrival at the meeting. Section 7. Quorum. A majority of the total number of directors as determined from time to time to comprise the Board of Directors shall constitute a quorum. Section 8. Adjournment; Quorum for Adjourned Meeting. If less than a majority of the total number of directors are present at a meeting, a majority of the directors so present may 5 11 adjourn the meeting from time to time without further notice. At any adjourned meeting at which a quorum shall be present, any business may be transacted that might have been transacted at the meeting as originally noticed. Section 9. Manner of Acting. If a quorum is present when a vote is taken, the act of a majority of the directors present at the meeting shall be the act of the Board of Directors unless otherwise provided in the Articles of Incorporation of the Corporation. Section 10. Removal. Any director may be removed by the stockholders, with or without cause, at any meeting of the stockholders called expressly for that purpose. Any such removal shall be without prejudice to the contract rights, if any, of the person removed. Section 11. Vacancies. Any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, or by the stockholders, unless otherwise provided in the Articles of Incorporation of the Corporation. The term of a director elected to fill a vacancy shall expire at the next following annual meeting of stockholders, and the person elected shall hold office until such time and until such director's successor is elected and qualifies, unless such director sooner dies, resigns or is removed by the stockholders at any annual or special meeting. Section 12. Compensation. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors, a stated salary as directors and/or such other reasonable compensation as may be determined by the Board from time to time. No payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 13. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless such director objects at the beginning of the meeting (or promptly upon his or her arrival) to the holding of the meeting or the transacting of specified business at the meeting or such director votes against such action or abstains from voting in respect of such matter. Section 14. Informal Action by Board. Any action required or permitted to be taken by any provisions of law, the Articles of Incorporation of the Corporation or these By-laws at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if each and every member of the Board or of such committee, as the case may be, signs a written consent thereto and such written consent is filed in the minutes of the proceedings of the Board or such committee, as the case may be. Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date, in which case it is effective on the date so specified. 6 12 Section 15. Meeting by Telephone, Etc. Directors or the members of any committee thereof shall be deemed present at a meeting of the Board of Directors or of any such committee, as the case may be, if the meeting is conducted using a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. ARTICLE IV OFFICERS Section 1. Number. The officers of the Corporation shall consist of a Chairman of the Board, a Chairman of the Executive Committee, a President, a Secretary and a Treasurer, each of whom shall be appointed by the Board of Directors. The Board of Directors may also appoint one or more vice presidents, one or more assistant secretaries and assistant treasurers and such other officers as the Board of Directors shall deem appro priate. The same individual may simultaneously hold more than one office in the Corporation. Section 2. Appointment and Term of Office. The officers of the Corporation shall be appointed annually by the Board of Directors at its annual meeting. If the appointment of officers shall not be made at such meeting, such appointment shall be made as soon thereafter as is convenient. Each officer shall hold office until such officer's successor is appointed and qualifies, unless such officer sooner dies, resigns or is removed by the Board. The appointment of an officer does not itself create contract rights. The failure to elect a Chairman of the Board, a Chairman of the Executive Committee, a President, a Secretary or a Treasurer shall not affect the existence of the Corporation. Section 3. Resignation. An officer may resign at any time by delivering notice to the Corporation. A resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. An officer's resignation shall not affect the Corporation's contract rights, if any, with the officer. Section 4. Removal. The Board of Directors may remove any officer at any time with or without cause. An officer's removal shall not affect the officer's contract rights, if any, with the Corporation. Section 5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors for the unexpired portion of the term. Section 6. Duties of Officers. (a) The Chairman of the Board of the Corporation shall be the chief executive officer of the Corporation and shall, subject to the direction of the Board, have general charge of the business and affairs of the Corporation. The Chairman of the Board shall preside at all meetings of the Board of Directors and of the stockholders. 7 13 (b) The Chairman of the Executive Committee shall, during the absence, sickness or other disability of the Chairman of the Board, serve as the chief executive officer of the Corporation. The Chairman of the Executive Committee shall preside over meetings of the Executive Committee. (c) The President shall be the chief operating and administrative officer of the Corporation. (d) The Secretary shall (i) be responsible for preparing minutes of the directors' and stockholders' meetings and for authenticating records of the Corporation, (ii) see that all notices are duly given in accordance with the provisions of the Articles of Incorporation of the Corporation, these By-laws or as required by law, (iii) maintain custody of the corporate records and the corporate seal, and (iv) have general charge of the stock transfer books of the Corporation. (e) The Treasurer shall (i) have charge and custody of and be responsible for all funds of the Corporation and (ii) receive and give receipts for monies due and payable to the Corporation from any source whatsoever, and deposit monies in the name of the Corporation in the banks, trust companies or other depositaries as shall be selected by the Corporation. (f) Subject to the foregoing, the officers of the Corporation shall have such powers and duties as ordinarily pertain to their respective offices and such additional powers and duties specifically conferred by law, the Articles of Incorporation of the Corporation and these By-laws, or as may be assigned to them from time to time by the Board of Directors or an officer authorized by the Board of Directors to prescribe the duties of other officers. Section 7. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving a salary by reason of the fact that the officer is also a director of the Corporation. Section 8. Delegation of Duties. In the absence or disability of any officer of the Corporation, or for any other reason deemed sufficient by the Board of Directors, the Board may delegate the powers or duties of such officer to any other officer or to any other director for the time being. ARTICLE V EXECUTIVE AND OTHER COMMITTEES Section 1. Creation of Committees. The Board of Directors may designate an Executive Committee and one or more other committees. Each committee so designated shall consist of two (2) or more of the directors of the Corporation. Section 2. Executive Committee. The Executive Committee, if there shall be one, shall consult with and advise the officers of the Corporation in the management of its business. It shall have, and may exercise, except to the extent otherwise provided in the resolution of the Board of Directors 8 14 creating such Executive Committee, such powers of the Board of Directors as can be lawfully delegated by the Board. Included solely for information purposes, the following is a list of the actions that, under Florida law in effect at the time of the adoption of these By-laws, may not be delegated to a committee, but the list shall be deemed automatically revised without further action by the Board of Directors or the stockholders of this Corporation upon and to the extent of any amendment to such law: (a) approve or recommend to stockholders actions or proposals required by law to be approved by stockholders; (b) fill vacancies on the Board of Directors or any committee of the Board; (c) adopt, amend or repeal these By-laws; (d) authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the Board of Directors; or (e) authorize or approve the issuance or sale of shares, or any contract to sell shares, or designate the terms of a series or class of shares. Section 3. Other Committees. Such other committees, to the extent provided in the resolution or resolutions creating them, shall have such functions and may exercise such powers of the Board of Directors as can be lawfully delegated by the Board. Notwithstanding the foregoing, no committee shall have the authority to take any action listed in subsections (a) through (e), inclusive, of Section 2 of this Article V. Section 4. Removal or Dissolution. Any Committee of the Board of Directors may be dissolved by the Board at any meeting; and any member of such committee may be removed by the Board of Directors with or without cause. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 5. Vacancies on Committees. Vacancies on any committee of the Board of Directors shall be filled by the Board of Directors at any meeting. Section 6. Meetings of Committees. Regular meetings of any committee of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by such committee. Special meetings of any such committee may be called by any member thereof upon two (2) days notice of the date, time and place of the meeting given to each of the other members of such committee, or on such shorter notice as may be agreed to in writing by each of the other members of such committee. Notice shall be given either personally or in the manner provided in Section 6 of Article III of these By-laws (pertaining to notice for directors' meetings). 9 15 Section 7. Absence of Committee Members. The Board of Directors may designate one or more directors as alternate members of any committee of the Board of Directors, who may replace at any meeting of such committee any member not able to attend. Section 8. Quorum of Committees. At all meetings of committees of the Board of Directors, a majority of the total number of members of the committee as determined from time to time shall constitute a quorum for the transaction of business. Section 9. Manner of Acting of Committees. If a quorum is present when a vote is taken, the act of a majority of the members of any committee of the Board of Directors present at the meeting shall be the act of such committee. Section 10. Minutes of Committees. Each committee of the Board of Directors shall keep regular minutes of its proceedings and report the same to the Board of Directors when requested. Section 11. Compensation. Members of any committee of the Board of Directors may be paid compensation in accordance with the provisions of Section 12 of Article III of these By- laws (pertaining to compensation of directors). Section 12. Informal Action. Any committee of the Board of Directors may take such informal action and hold such informal meetings as allowed by the provisions of Sections 14 and 15 of Article III of these By-laws. ARTICLE VI INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1. General. (a) To the fullest extent permitted by law and consistent with the principles set forth in Section 1(c) below, the Corporation shall indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or other type of proceeding (other than an action by or in the right of the Corporation), whether civil, criminal, administrative, investigative or otherwise, and whether formal or informal, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, trustee or fiduciary of another corporation, partnership, joint venture, trust (including without limitation an employee benefit trust), or other enterprise. (b) To the fullest extent permitted by law and consistent with the principles set forth in Section 1(c) below, the Corporation shall be entitled but shall not be obligated to indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or other type of proceeding (other than an action by or in the right of the Corporation), whether civil, criminal, administrative, investigative or otherwise, and whether formal or informal, by reason of the fact that such person is or was an 10 16 employee or agent of the Corporation or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. (c) Any person for whom indemnification is required or authorized under Section 1(a) or Section 1(b) above shall be indemnified against all liabilities, judgments, amounts paid in settlement, penalties, fines (including an excise tax assessed with respect to any employee benefit plan) and expenses (including attorneys' fees, paralegals' fees and court costs) actually and reasonably incurred in connection with any such action, suit or other proceeding, including any appeal thereof. Indemnification shall be available only if the person to be indemnified acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any such action, suit or other proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner that such person reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful. Section 2. Actions by or in the Right of the Corporation. (a) To the fullest extent permitted by law and consistent with the principles set forth in Section 2(c) below, the Corporation shall indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or other type of proceeding (as further described in Section 1 of this Article VI) by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, trustee or fiduciary of another corporation, partnership, joint venture, trust or other enterprise. (b) To the fullest extent permitted by law and consistent with the principles set forth in Section 2(c) below, the Corporation shall be entitled but shall not be obligated to indemnify any person who is or was a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or other type of proceeding (as further described in Section 1 of this Article VI) by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. (c) Any person for whom indemnification is required or authorized under Section 2(a) or Section 2(b) above shall be indemnified against expenses (including attorneys' fees, paralegals' fees and court costs) and amounts paid in settlement not exceeding, in the judgment of the Board of Directors, the estimated expenses of litigating the action, suit or other proceeding to conclusion, that are actually and reasonably incurred in connection with the defense or settlement of such action, suit or other proceeding, including any appeal thereof. Indemnification shall be available only if the person to be indemnified acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best 11 17 interests of the Corporation. Notwithstanding the foregoing, no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such action, suit or other proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses that such court shall deem proper. Section 3. Determination that Indemnification Is Proper. Indemnification pursuant to Section 1 or Section 2 of this Article VI, unless otherwise made pursuant to a determination by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that the indemnification is proper in the circumstances because the indemnified person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VI. Such determination shall be made under one of the following procedures: (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit or other proceeding to which the indemnification relates; (b) if such a quorum is not obtainable or, even if obtainable, by majority vote of a committee duly designated by the Board of Directors (the designation being one in which directors who are parties may participate) consisting solely of two or more directors not at the time parties to such action, suit or other proceeding; (c) by independent legal counsel (i) selected by the Board of Directors in accordance with the requirements of subsection (a) or by a committee designated under subsection (b) or (ii) if a quorum of the directors cannot be obtained and a committee cannot be designated, selected by majority vote of the full Board of Directors (the vote being one in which directors who are parties may participate); or (d) by the stockholders by a majority vote of a quorum consisting of stockholders who were not parties to such action, suit or other proceeding or, if no such quorum is obtainable, by a majority vote of stockholders who were not parties to such action, suit or other proceeding. Section 4. Evaluation and Authorization. Evaluation of the reasonableness of expenses and authorization of indemnification shall be made in the same manner as is prescribed in Section 3 of this Article VI for the determination that indemnification is permissible; provided, however, that if the determination as to whether indemnification is permissible is made by independent legal counsel, the persons who selected such independent legal counsel shall be responsible for evaluating the reasonableness of expenses and may authorize indemnification. Section 5. Prepayment of Expenses. Expenses (including attorneys' fees, paralegals' fees and court costs) incurred by a director or officer in defending a civil or criminal action, suit or other proceeding referred to in Section 1 or Section 2 of this Article VI may, in the discretion of this Corporation, to the full extent permitted by law, be paid by the Corporation 12 18 in advance of the final disposition thereof. Any such payment shall be made only upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if such person is ultimately found not to be entitled to indemnification by the Corporation pursuant to this Article VI. Section 6. Prompt Consideration. Any request for indemnification or advancement of expenses shall be promptly considered by the Corporation. Section 7. Nonexclusivity and Limitations. The indemnification and advancement of expenses provided pursuant to this Article VI shall not be deemed exclusive of any other rights to which a person may be entitled under any law, By-law, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person's official capacity and as to action in any other capacity while holding office with the Corporation. Such indemnification and advancement of expenses shall continue as to any person who has ceased to be a director or officer and shall inure to the benefit of such person's heirs and personal representatives. The Board of Directors may, at any time, approve indemnification of or advancement of expenses to any other person that the Corporation has the power by law to indemnify. In all cases not specifically provided for in this Article VI, indemnification or advancement of expenses shall not be made to the extent that such indemnification or advancement of expenses is expressly prohibited by law. Section 8. Continuation of Indemnification Right. (a) The right of indemnification and advancement of expenses under this Article VI for directors and officers shall be a contract right inuring to the benefit of the directors and officers entitled to be indemnified hereunder. No amendment or repeal of this Article VI shall adversely affect any right of such director or officer existing at the time of such amendment or repeal. Indemnification and advancement of expenses as provided for in this Article VI shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. (b) Unless expressly otherwise provided when authorized or ratified by this Corporation, indemnification and advancement of expenses that have been specifically authorized and approved by the Corporation for a particular employee or agent shall continue as to a person who has ceased to be an employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. (c) For purposes of this Article VI, the term "corporation" includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director or officer of a constituent corporation, or is or was serving at the request of a constituent corporation as a director, officer, trustee or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, is in the same position under this Article VI with respect to the resulting or surviving corporation as such person would have been with respect to such constituent corporation if its separate existence had continued. 13 19 Section 9. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a director, officer, trustee, fiduciary, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Such insurance may cover any liability asserted against such person and incurred by such person in any such capacity or arising out of such person's status as such, whether or not the Corporation is obligated to or would have the power to indemnify such person against the liability under Section 1 or Section 2 of this Article VI. ARTICLE VII INTERESTED PARTIES Section 1. General. No contract or other transaction between the Corporation and any one or more of its directors or any other corporation, firm, association or entity in which one or more of its directors are directors or officers or are finan cially interested shall be either void or voidable because of such relationship or interest, because such director or directors were present at the meeting of the Board of Directors or of a committee thereof that authorizes, approves or ratifies such contract or transaction, or because such director's or directors' votes are counted for such purpose, as long as one or more of the following requirements is satisfied: (a) the fact of such relationship or interest is disclosed or known to the Board of Directors or committee that authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors; (b) the fact of such relationship or interest is disclosed or known to the stockholders entitled to vote on the matter, and they authorize, approve or ratify such contract or transaction by vote or written consent; or (c) the contract or transaction is fair and reasonable as to the Corporation at the time it is authorized by the Board of Directors, a committee thereof or the stockholders. Section 2. Determination of Quorum. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof that authorizes, approves or ratifies a contract or transaction referred to in Section 1 of this Article VII. Section 3. Approval by Stockholders. For purposes of Section 1(b) of this Article VII, a conflict of interest transaction shall be authorized, approved or ratified if it receives the vote of a majority of the shares entitled to be counted under this Section 3. Shares owned by or voted under the control of a director who has a relationship or interest in the transaction described in Section 1 of this Article VII may not be counted in a vote of stockholders to determine whether to authorize, approve or ratify a conflict of interest transaction under Section 1(b) of this Article VII. The vote of the shares owned by or voted under the control of a director who has a relationship or interest in the transaction described in 14 20 Section 1 of this Article VII shall be counted, however, in determining whether the transaction is approved under other sections of these By-laws and applicable law. A majority of those shares that would be entitled, if present, to be counted in a vote on the transaction under this Section 3 shall constitute a quorum for the purpose of taking action under this Section 3. ARTICLE VIII CERTIFICATES OF STOCK Section 1. Certificates for Shares. Shares may but need not be represented by certificates. The rights and obligations of stockholders shall be identical whether or not their shares are represented by certificates. If shares are represented by certificates, each certificate shall be in such form as the Board of Directors may from time to time prescribe and shall be signed (either manually or in facsimile) by the Chairman of the Board or the President (and may be signed (either manually or in facsimile) by the Secretary or an Assistant Secretary and/or sealed with the seal of the Corporation or its facsimile). Each certificate shall set forth the holder's name and the number of shares represented by the certificate, and shall state such other matters as may be required by law. The certificates shall be numbered and entered on the books of the Corporation as they are issued. If shares are not represented by certificates, then, within a reasonable time after issue or transfer of shares without certificates, the Corporation shall send the stockholder a written statement in such form as the Board of Directors may from time to time prescribe, certifying as to the number of shares owned by the stockholder and as to such other information as would have been required to be on certificates for such shares. If and to the extent the Corporation is authorized to issue shares of more than one class or more than one series of any class, every certificate representing shares shall set forth or fairly summarize upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge a full statement of: (a) the designations, relative rights, preferences and limitations of the shares of each class or series authorized to be issued; (b) the variations in rights, preferences and limitations between the shares of each such series, if the Corporation is authorized to issue any preferred or special class in series insofar as the same have been fixed and determined; and (c) the authority of the Board of Directors to fix and determine the variations, relative rights and preferences of future series. Section 2. Signatures of Past Officers. If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate shall nevertheless be valid. Section 3. Transfer Agents and Registrars. The Board of Directors may, in its discretion, appoint responsible banks or trust companies in such city or cities as the Board may deem 15 21 advisable from time to time to act as transfer agents and registrars of the stock of the Corporation. When such appointments shall have been made, no stock certificate shall be valid until countersigned by one of such transfer agents and registered by one of such registrars. Section 4. Transfer of Shares. Transfers of shares of the Corporation shall be made upon its books by the holder of the shares in person or by the holder's lawfully constituted representative, upon surrender of the certificate of stock for cancellation if such shares are represented by a certificate of stock or by delivery to the Corporation of such evidence of transfer as may be required by the Corporation if such shares are not represented by certificates. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes; and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Florida. Section 5. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation and alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or the owner's legal representative, to pay a reasonable charge for issuing the new certificate, to advertise the matter in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed. ARTICLE IX RECORD DATE Section 1. Record Date for Stockholder Actions. The Board of Directors is authorized from time to time to fix in advance a date as the record date for the determination of the stockholders entitled to notice of and to vote at any meeting of the stockholders and any adjournment thereof (unless a new record date must be established by law for such adjourned meeting), or of the stockholders entitled to give such consent or take such action, as the case may be. In no event may a record date so fixed by the Board of Directors precede the date on which the resolution establishing such record date is adopted by the Board of Directors; and such record date may not be more than seventy (70) nor less than ten (10) days before the date of any meeting of the stockholders, before a date in connection with the obtaining of the consent of stockholders for any purpose, or before the date of any other action requiring a determination of the stockholders. Only those stockholders listed as stockholders of record as of the close of business on the date so fixed as the record date shall be entitled to notice of and to vote at such meeting and any adjournment thereof, or to exercise such rights or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. If the Board of Directors fails to establish a record date as provided herein, the record date shall be deemed to be the date ten (10) days prior to the date of the stockholders' meeting. 16 22 Section 2. Record Date for Dividend and Other Distributions. The Board of Directors is authorized from time to time to fix in advance a date as the record date for the determination of the stockholders entitled to receive a dividend or other distribution. Only those stockholders listed as stockholders of record as of the close of business on the date so fixed as the record date shall be entitled to receive the dividend or other distribution, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. If the Board of Directors fails to establish a record date as provided herein, the record date shall be deemed to be the date of authorization of the dividend or other distribution. ARTICLE X DIVIDENDS The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares of capital stock in the manner and upon the terms and conditions provided by the Articles of Incorporation of the Corporation and by law. Subject to the provisions of the Articles of Incorporation of the Corporation and to law, dividends may be paid in cash or property, including shares of stock or other securities of the Corporation. ARTICLE XI FISCAL YEAR The fiscal year of the Corporation shall be the period selected by the Board of Directors as the fiscal year. Unless and until changed by the Board of Directors, the fiscal year of the Corporation shall end on the last Saturday of each year. ARTICLE XII SEAL The corporate seal shall have the name of the Corporation and the word "SEAL" inscribed thereon. It may be a facsimile, engraved, printed or impression seal. ARTICLE XIII STOCK IN OTHER CORPORATIONS Shares of stock in other corporations held by the Corporation shall be voted by such officer or officers or other agent of the Corporation as the Board of Directors shall from time to time designate for the purpose or by a proxy thereunto duly authorized by said Board. 17 23 ARTICLE XIV AMENDMENTS These By-laws may be altered, amended or repealed and new By-laws may be adopted either by the Board of Directors or by the holders of a majority of the issued and outstanding shares of stock of the Corporation entitled to vote; provided, however, that the Board of Directors may not alter, amend or repeal any By-law adopted by the stockholders if the stockholders specifically provided that the By-law is not subject to amendment or repeal by the Board. ARTICLE XV EMERGENCY BY-LAWS Section 1. Scope of Emergency By-laws. The emergency By-laws provided in this Article XV shall be operative during any emergency, notwithstanding any different provision set forth in the preceding Articles hereof; provided, however, that to the extent not inconsistent with the provisions of this Article XV and the emergency By-laws, the By-laws provided in the preceding Articles shall remain in effect during such emergency. For purposes of the emergency By-law provisions of this Article XV, an emergency shall exist if a quorum of the Corporation's directors cannot readily be assembled because of some catastrophic event. Upon termination of the emergency, these emergency By-laws shall cease to be operative. Section 2. Call and Notice of Meeting. During any emergency, a meeting of the Board of Directors may be called by any officer or director of the Corporation. Notice of the date, time and place of the meeting shall be given by the person calling the meeting to such of the directors as it may be feasible to reach by any available means of communication. Such notice shall be given at such time in advance of the meeting as circumstances permit in the judgment of the person calling the meeting. Section 3. Quorum and Voting. At any such meeting of the Board of Directors, a quorum shall consist of any one or more directors, and the act of the majority of the directors present at such meeting shall be the act of the Corporation. Section 4. Appointment of Temporary Directors. (a) The director or directors who are able to be assembled at a meeting of directors during an emergency may assemble for the purpose of appointing, if such directors deem it necessary, one or more temporary directors (the "Temporary Directors") to serve as directors of the Corporation during the term of any emergency. (b) If no directors are able to attend a meeting of directors during an emergency, then such stockholders as may reasonably be assembled shall have the right, by majority vote of those assembled, to appoint Temporary Directors to serve on the Board of Directors until the termination of the emergency. 18 24 (c) If no stockholders can reasonably be assembled in order to conduct a vote for Temporary Directors, then the Chairman of the Board or his or her successor as determined under an emergency succession plan adopted by the Board of Directors under Section 5 of this Article XV shall be deemed a Temporary Director of the Corporation, and such Chairman of the Board or his or her successor, as the case may be, shall have the right to appoint additional Temporary Directors to serve with him or her on the Board of Directors of the Corporation during the term of the emergency. (d) Temporary Directors shall have all of the rights, duties and obligations of directors appointed pursuant to Article III hereof; provided, however, that a Temporary Director may be removed from the Board of Directors at any time by the person or persons responsible for appointing such Temporary Director, or by vote of the majority of the stockholders present at any meeting of the stockholders during an emergency. In any event, the Temporary Director shall automatically be deemed to have resigned from the Board of Directors upon the termination of the emergency in connection with which the Temporary Director was appointed. Section 5. Modification of Lines of Succession. Either before or during any emergency, the Board of Directors may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the Corporation shall for any reason be rendered incapable of discharging their duties. Section 6. Change of Principal Office. The Board of Directors may, either before or during any such emergency, and effective during such emergency, change the principal office of the Corporation or designate several alternative head offices or regional offices, or authorize the officers of the Corporation to do so. Section 7. Limitation of Liability. No officer, director or employee acting in accordance with these emergency By-laws during an emergency shall be liable except for willful misconduct. Section 8. Amendment or Repeal. These emergency By- laws shall be subject to amendment or repeal by further action of the Board of Directors or by action of the stockholders, but no such amendment or repeal shall modify the provisions of Section 7 above with regard to actions taken prior to the time of such amendment or repeal. Any amendment of these emergency By-laws may make any further or different provision that may be practical or necessary under the circumstances of the emergency. ARTICLE XVI PRECEDENCE OF LAW AND ARTICLES OF INCORPORATION Any provision of the Articles of Incorporation of this Corporation shall, subject to law, control and take precedence over any provision of these By-laws inconsistent therewith. 19 EX-21 3 SUBSIDIARY OF THE COMPANY EXHIBIT 21 PUBLIX SUPER MARKETS, INC. Subsidiary of the Company Publix Alabama, Inc. (incorporated in Alabama) EX-27 4 FINANCIAL DATA SCHEDULE FOR THE YEAR ENDED DECEMBER 28, 1996
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENT OF PUBLIX SUPER MARKETS, INC. FOR THE YEAR ENDED DECEMBER 28, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000081061 PUBLIX SUPER MARKETS, INC. 1,000 U.S. DOLLARS YEAR DEC-28-1996 DEC-31-1995 DEC-28-1996 1 457,405 65,586 61,221 0 570,254 1,226,832 2,728,466 1,510,275 2,921,084 909,567 108 0 0 219,943 1,531,236 2,921,084 10,431,302 10,525,969 8,006,503 10,020,158 89,000 0 227 416,584 151,408 265,176 0 0 0 265,176 1.20 1.20
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