-----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, BnEiAGc/sVq1VhAL7jW77dkdFo5erTq5Eoi989xuGU0dHkLtkeYntLPnN19DF9id 8jOPRlM/I0496vqROM8r0A== 0000895447-97-000010.txt : 19970616 0000895447-97-000010.hdr.sgml : 19970616 ACCESSION NUMBER: 0000895447-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970503 FILED AS OF DATE: 19970613 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHOE CARNIVAL INC CENTRAL INDEX KEY: 0000895447 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-SHOE STORES [5661] IRS NUMBER: 351736614 STATE OF INCORPORATION: IN FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21360 FILM NUMBER: 97623618 BUSINESS ADDRESS: STREET 1: 8233 BAUMGART ROAD CITY: EVANSVILLE STATE: IN ZIP: 47711 BUSINESS PHONE: 8128676471 MAIL ADDRESS: STREET 1: 8233 BAUMGART RD CITY: EVANSVILLE STATE: IN ZIP: 47711 10-Q 1 1ST QUARTER UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 3, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-21360 Shoe Carnival, Inc. (Exact name of registrant as specified in its charter) Indiana 35-1736614 (State or other jurisdiction of (IRS Employer Identification incorporation or organization) Number) 8233 Baumgart Road, Evansville, Indiana 47711 (Address of principal executive offices) (Zip Code) (812) 867-6471 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value, 13,039,418 shares outstanding as of June 1, 1997. SHOE CARNIVAL, INC. INDEX TO FINANCIAL STATEMENTS Page Part I Financial Information Item 1 - Financial Statements (Unaudited) Condensed Balance Sheets ............................. 3 Condensed Statements of Income........................ 4 Condensed Statement of Shareholders' Equity........... 5 Condensed Statements of Cash Flows.................... 6 Notes to Condensed Financial Statements............... 7 Item 2 - Management's Discussion and Analysis............ 8-10 Part II Other Information Item 6. Exhibits and Reports on Form 8-K................ 11 Signature................................................ 12 2 SHOE CARNIVAL, INC. CONDENSED BALANCE SHEETS Unaudited May 3, February 1, May 4, 1997 1997 1996 ---------- ------------ ---------- (In thousands) ASSETS Current Assets: Cash and cash equivalents........... $ 1,762 $ 1,625 $ 1,607 Accounts receivable................. 780 916 912 Notes receivable from shareholders.. 22 22 40 Merchandise inventories............. 64,173 59,240 61,197 Deferred income tax benefit......... 441 400 1,070 Other............................... 777 906 3,622 ---------- ---------- ---------- Total Current Assets................... 67,955 63,109 68,448 Property and equipment-net............. 30,831 30,817 31,044 ---------- ---------- ---------- Total Assets........................... $ 98,786 $ 93,926 $ 99,492 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable.................... $ 8,637 $ 12,159 $ 8,402 Accrued and other liabilities....... 6,191 5,172 7,491 Current portion of long-term debt... 702 688 650 ---------- ---------- ---------- Total Current Liabilities.............. 15,530 18,019 16,543 Long-term debt......................... 14,939 9,621 19,878 Deferred lease incentives.............. 1,416 1,458 1,668 Deferred income taxes.................. 1,130 1,056 911 ---------- ---------- ---------- Total Liabilities...................... 33,015 30,154 39,000 ---------- ---------- ---------- Shareholders' Equity: Common stock, no and $.10 par value, 50,000 shares authorized, 13,037, 13,032, 13,019 shares issued and outstanding at May 3, 1997, February 1, 1997 and May 4, 1996.... 0 0 1,302 Additional paid-in capital.......... 61,579 61,398 60,035 Retained earnings (deficit)......... 4,192 2,374 (845) ---------- --------- ---------- Total Shareholders' Equity............. 65,771 63,772 60,492 ---------- --------- ---------- Total Liabilities and Shareholders' Equity................. $ 98,786 $ 93,926 $ 99,492 ========== ========= ========== See Notes to Condensed Financial Statements 3 SHOE CARNIVAL, INC. CONDENSED STATEMENTS OF INCOME Unaudited Thirteen Thirteen Weeks Ended Weeks Ended May 3, 1997 May 4, 1996 ------------- ------------- (In thousands, except per share data) Net sales............................... $ 59,328 $ 58,208 Cost of sales (including buying, distribution and occupancy costs)..... 40,998 41,859 --------- --------- Gross profit............................ 18,330 16,349 Selling, general and administrative expenses.............................. 15,044 14,349 Operating income........................ 3,286 2,000 Interest expense, net................... 231 439 --------- --------- Income before income taxes.............. 3,055 1,561 Income taxes............................ 1,237 640 --------- --------- Net income.............................. $ 1,818 $ 921 ========= ========= Net income per share.................... $ .14 $ .07 ========= ========= Weighted average common shares and common equivalent shares outstanding.. 13,054 13,019 ========= ========= See Notes to Condensed Financial Statements 4 SHOE CARNIVAL, INC. CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY Unaudited Additional Common Stock Paid-In Retained Shares Amount Capital Earnings Total ------- ------ ---------- --------- --------- (In thousands) Balance at February 1, 1997.... 13,032 $ 0 $ 61,398 $ 2,374 $ 63,772 Employee stock purchase plan purchases............. 5 23 23 Payment on stock purchase.... 158 158 Net income................... 1,818 1,818 ------- ---- --------- --------- --------- Balance at May 3, 1997......... 13,037 $ 0 $ 61,579 $ 4,192 $ 65,771 ======= ==== ========= ========= ========= See Notes to Condensed Financial Statements 5 SHOE CARNIVAL, INC. CONDENSED STATEMENTS OF CASH FLOWS Unaudited Thirteen Thirteen Weeks Ended Weeks Ended May 3, 1997 May 4, 1996 ------------ ------------ (In thousands) Cash flows from operating activities: Net income................................... $ 1,818 $ 921 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization.............. 1,364 1,273 Loss on retirement of assets............... 97 48 Deferred income taxes...................... 33 735 Compensation for forgiveness of debt....... 158 0 Other .................................... (41) (41) Changes in operating assets and liabilities: Merchandise inventories.................. (4,934) 1,503 Accounts receivable...................... 137 74 Accounts payable and accrued liabilities. (2,333) (3,729) Other.................................... 129 1,036 ---------- ---------- Net cash (used in) provided by operating activities................................... (3,572) 1,820 ---------- ---------- Cash flows from investing activities: Purchases of property and equipment.......... (1,662) (1,719) Lease incentives............................. 0 (241) Other........................................ 16 0 ---------- ---------- Net cash used in investing activities........... (1,646) (1,960) ---------- ---------- Cash flows from financing activities: Borrowings under line of credit.............. 35,125 67,525 Payments on line of credit................... (29,625) (66,525) Payments on capital lease obligations........ (168) (153) Proceeds from issuance of stock.............. 23 0 ---------- ---------- Net cash provided by financing activities....... 5,355 847 ---------- ---------- Net increase in cash and cash equivalents....... 137 707 Cash and cash equivalents at beginning of period....................................... 1,625 900 ---------- ---------- Cash and cash equivalents at end of period...... $ 1,762 $ 1,607 ========== ========== Supplemental disclosures of cash flow information: Cash paid during period for interest......... $ 219 $ 423 Cash paid (refunded) during period for income taxes................................ $ 244 $ (1,888) Supplemental disclosure of noncash investing activities: Capital lease obligations incurred........... $ 0 $ 147 See Notes to Condensed Financial Statements 6 SHOE CARNIVAL, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS Unaudited Note 1 - Basis of Presentation In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to present fairly the financial position of the Company and the results of its operations and its cash flows for the periods presented. Certain information and disclosures normally included in notes to financial statements have been condensed or omitted according to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and financial notes thereto included in the Company's 1996 Annual Report. Note 2 - Restructuring Charge In the fourth quarters of 1995 and 1994, the Company recorded restructuring charges related to its plan to close a total of nine unprofitable stores. Eight stores were closed during fiscal years 1995 and 1996, with the remaining store being closed in February 1997. During the first quarter of 1997 charges applied against the restructuring reserve include cash expenditures of $83,000 for store closing costs and $167,000 for equipment and leasehold improvement write-offs. The remaining reserve of $68,000 will be utilized primarily for lease termination costs. The restructuring charges include management's best estimates of amounts required to be paid for store closing and lease termination costs. The total amount of the cash payments ultimately required could differ materially from the amounts recorded if management is unable to negotiate an acceptable lease termination agreement with the landlord. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Comparable Number of Stores Store Square Footage Store Sales Beginning End of Net End Increase/ Quarter Ended Of Period Opened Closed Period Decrease of Period (Decrease) - ------------- ---------- ------- ------ ------ --------- --------- ----------- May 3, 1997 93 0 2 91 (19,000) 1,007,000 4.4% May 4, 1996 95 2 4 93 (2,000) 1,022,000 (4.4%) The following table sets forth the Company's results of operations expressed as a percentage of net sales for the periods indicated: Thirteen Thirteen Weeks Ended Weeks Ended May 3, 1997 May 4, 1996 ------------ ------------ Net sales................................ 100.0% 100.0% Cost of sales (including buying, distribution and occupancy costs)...... 69.1 71.9 ---------- ---------- Gross profit............................. 30.9 28.1 Selling, general and administrative expenses............................... 25.4 24.6 ---------- ---------- Operating income......................... 5.5 3.5 Interest expense......................... .4 .8 ---------- ---------- Income before income taxes............... 5.1 2.7 Income taxes............................. 2.0 1.1 ---------- ---------- Net income............................... 3.1% 1.6% ========== ========== Net Sales Net sales increased $1.1 million to $59.3 million in the first quarter of 1997, a 1.9% increase over net sales of $58.2 million in the comparable prior year period. The increase was attributable to a 4.4% comparable store sales increase and the sales generated by the five new stores opened in 1996, partially offset by the reduction in sales for the nine stores closed in 1996 and 1997. The comparable store sales increase was supported with increases in all major product categories. Average footwear unit prices in comparable stores increased 12.6% while footwear unit sales decreased 7.4%. Sales of private label and non-name brand footwear constituted 16.3% of total footwear sales in the first quarter of 1997 as compared with 16.0% in the prior year quarter. Gross Profit Gross profit increased $2.0 million to $18.3 million in the first quarter of 1997, a 12.1% increase over gross profit of $16.3 million in the comparable prior year period. The Company's gross profit margin increased to 30.9% from 28.1%. As a percentage of sales, buying, distribution and occupancy costs decreased 0.3%. The increase in 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) merchandise gross profit margin of 2.5% of sales was broad based with all major product categories improving over the comparable prior year period. Selling, General and Administrative Expenses Selling, general and administrative expenses increased $695,000 to $15.0 million in the first quarter of 1997 from $14.3 million in the comparable prior year period. As a percentage of sales, these expenses increased 0.8%. Excluding the effect of a $650,000 nonrecurring charge related to the retirement of David H. Russell, former vice chairman, president and chief executive officer, selling, general and administrative expenses as a percent of sales decreased 0.3% to 24.3%. Total pre-opening costs for the two stores opened in the first quarter of 1996 were $240,000 or 0.4% of sales. No stores were opened in the first quarter of 1997. Interest Expense The reduction in net interest expense to $231,000 in the first quarter of 1997 from $439,000 in the first quarter of 1996 resulted from a combination of reduced borrowings and lower interest rates. Income Taxes The effective income tax rate of 40.5% and 41.0% in the first quarters of 1997 and 1996 respectively differed from the statutory federal rates due primarily to state and local income taxes, net of the federal tax benefit. Liquidity and Capital Resources The Company's primary sources of funds are cash flows from operations and borrowings under its revolving credit facility. Net cash used in operating activities was $3.6 million during the first quarter of 1997. Excluding changes in operating assets and liabilities, cash provided by operating activities was $3.4 million in the first quarter of 1997. An increase in merchandise inventories of $4.9 million and a reduction in accounts payable and accrued liabilities of $2.3 million were partially offset by the $3.4 million in cash generated by operations before changes in operating assets and liabilities. The increase in merchandise inventories was primarily due to seasonal fluctuations. Working capital increased to $52.4 million at May 3, 1997 from $45.1 million at February 1, 1997 and the current ratio improved to 4.4 to 1 from 3.5 to 1. Long-term debt as a percentage of total capital was 18.5% at May 3, 1997, compared to 13.1% at February 1, 1997. Capital expenditures were $1.7 million in the first quarter of 1997. Of these expenditures, approximately $1.1 million was incurred for the remodeling of certain stores. The remaining capital expenditures in the first quarter of 1997 were primarily for technological improvements in the stores and distribution center. The Company intends to open three or four stores in the second half of 1997. Two stores were closed in the first quarter of 1997. The Company opened two stores in the first quarter of 1996 and closed four stores. The actual amount of the Company's cash requirements for capital expenditures depends in part on the number of new stores opened, the amount of lease incentives, if any, received from landlords and the number of stores remodeled. The opening of new stores will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending in areas the Company targets for expansion. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) As part of the Company's effort to upgrade the image of its stores, a new prototype design has been utilized in all new and remodeled stores since the fourth quarter of 1995. The size of stores utilizing the new prototype design has increased from 10,000 square feet to between 12,000 and 18,000 square feet depending upon, among other factors, the location of the store and the population base the store is expected to service. Accordingly, capital expenditures for new stores have increased to an average of approximately $450,000, including point-of-sale equipment which is generally acquired through equipment leasing transactions. The average inventory investments in a new store is expected to range from $550,000 to $850,000, depending on the size and sales expectation of the store and the timing of the new store opening. Pre-opening expenses, such as advertising, salaries, supplies and utilities, are expected to average $60,000 to $80,000 per-store. The Company's $35 million credit facility provides for a combination of cash advances on a revolving basis and the issuance of commercial letters of credit. Borrowings under the revolving credit line are based on eligible inventory. The credit agreement limits capital expenditures in 1997 to $12 million. Borrowings and letters of credit outstanding under this facility at May 3, 1997 were $14 million and $4.6 million, respectively. The Company anticipates that its existing cash and cash flow from operations, supplemented by borrowings under the credit facility will be sufficient to fund its planned expansion and other operating cash requirements for at least the next 12 months. Seasonality The Company's quarterly results of operations have fluctuated, and are expected to continue to fluctuate in the future primarily as a result of seasonal variances and the timing of sales and costs associated with opening new stores. Non-capital expenditures, such as advertising and payroll, incurred prior to opening of a new store are charged to expense in the month the store is opened. Therefore, the Company's results of operations may be adversely affected in any quarter in which the Company opens new stores. The Company has three distinct selling periods: Easter, back-to-school and Christmas. 10 SHOE CARNIVAL, INC. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (10-N) Employment agreement dated April 14, 1997, between the Registrant and Cliff Sifford (12) Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended May 3, 1997 11 SHOE CARNIVAL, INC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed, on its behalf by the undersigned thereunto duly authorized. Date: June 13, 1997 SHOE CARNIVAL, INC. (Registrant) By: /s/ W. Kerry Jackson W. Kerry Jackson Vice President and Chief Accounting Officer 12 EX-10.N 2 EMPLOYMENT AGREEMENT DATED APRIL 14, 1997 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and dated as of April 14, 1997, by and between SHOE CARNIVAL, INC., ("Employer") an Indiana corporation and CLIFF SIFFORD ("Employee"). WITNESSETH WHEREAS, the Employer desires to employ the Employee and the Employee desires to become employed by the Employer, and WHEREAS, Employer desires to assure the continued service of Employee; and WHEREAS, Employee is willing to provide such service on the terms and conditions specified herein; NOW THEREFORE, in consideration of these premises, the mutual covenants and undertakings herein contained, Employer and Employee, each intending to be legally bound, covenant and agree as follows: 1. Continuation of Employment. The parties agree that the employment of Employee shall continue for the term provided for in section 3. While employed by Employer, Employee shall devote substantially all of his business time and efforts to Employer's business. 2. Duties. Employee shall serve as Employer's Senior Vice President and General Merchandise Manager and to perform such duties in that office as are customarily associated with such office or as may be assigned to him by Employer's Board of Directors or Chief Executive Officer. 3. Term. The term of this Agreement (the "Term"), unless terminated earlier in accordance with section 7, shall continue through April 13, 1999. 4. Compensation. a. Employee shall receive an annual salary of $150,000 ("Base Compensation") payable at regular intervals in accordance with Employer's normal payroll practices now or hereafter in effect. b. The Base Compensation may be increased on an annual basis as of April 1 of each calendar year by an amount determined by the Board of Directors. c. The Board of Directors of Employer may consider, from time to time, additional increases to Employee's Base Compensation. d. Employee shall participate in all present and future executive incentive compensation plans of Employer. 1 5. Benefit Plans. Employee shall be included as a participant in all present and future employee benefit, retirement and compensation plans generally available to employees of Employer, consistent with his Base Compensation and position with Employer, including, without limitation, any pension plan, profit sharing plan, 401(k) plan, stock option plans, and hospitalization, major medical, disability and group life insurance plans, upon the terms set forth in such plans, as amended from time to time. Employer may amend or eliminate any such plan in its discretion to the extent permitted by law, as long as the change does not apply solely to Employee to the exclusion of all other participants in such plan. 6. Expenses; Vacations. So long as Employee is employed by Employer pursuant to this Agreement, Employee shall receive reimbursement from Employer for all reasonable business expenses incurred in the course of his employment by Employer, upon submission to Employer of written vouchers and statements for reimbursement in accordance with Employer's policies and procedures. So long as Employee is employed by Employer pursuant to the terms of this Agreement, Employee shall participate in Employer's vacation policies for executives at a level commensurate with his position. 7. Termination. Subject to the respective continuing obligation of the parties, Employee's employment may be terminated prior to the expiration of the Term of this Agreement as follows: a. Employer, by action of its Board of Directors and upon written notice to Employee, may terminate Employee's employment at any time effective immediately for cause. For purposes of this subsection 7a, "cause" shall be defined as any (i) dishonest or fraudulent conduct in connection with his employment, (ii) conviction of Employee by a federal or state court for the commission of a felony, (iii) repeated failure on the part of Employee, after written notice specifying in reasonable detail the alleged failure, to perform the duties assigned to him under this Agreement or any other executive level duties hereafter designated by the Board of Directors; or (iv) unlawful taking or misappropriation of any material and substantial tangible or intangible property (other than corporate opportunities) or misappropriation of any corporate opportunity belonging to Employer or any subsidiary or in which any of them has an interest. b. Employer, by action of its Board of Directors, may terminate Employee's employment at any time without cause. c. Employee, by written notice to Employer, may terminate his employment at any time. d. Employee's employment shall terminate in the event of Employee's death or disability. For purposes hereof, "disability" shall be defined as Employee's inability by reason of illness or other physical or mental incapacity to perform the duties required by his employment for any consecutive one hundred eighty (180) day period. 8. Compensation Upon Termination or During Disability. In the event of termination of Employee's employment pursuant to section 7 hereof, the parties agree that the following terms set forth the exclusive severance arrangements between the parties relating to such termination: a. In the event of termination pursuant to subsection 7a or 7c, Employee shall be entitled to receive the compensation provided for herein (including Base Compensation ) through the date of termination specified in the notice of termination. Employee shall only 2 participate in the employee benefit, retirement, and compensation plans and other perquisites as provided in sections 5 and 6 hereof, through the date of termination. Any benefits payable under insurance, health, retirement and bonus plans as a result of Employee's participation in such plans through such date shall be paid when due under those plans. b. In the event of termination pursuant to subsection 7b, Employee shall be entitled to receive an amount equal to his then current monthly Base Compensation until April 13, 1999. Employee shall only participate in the employee benefit, retirement, and compensation plans and other perquisites as provided in sections 5 and 6 hereof, through such date of termination. Any benefits payable under insurance, health, retirement and bonus plans as a result of Employee's participation in such plans through such date shall be paid when due under those plans. c. In the event of termination pursuant to subsection 7d, Employee shall be entitled to receive the compensation provided for herein (including Base Compensation) through the date of termination. Employee shall only participate in the employee benefit, retirement, and compensation plans and other perquisites as provided in sections 5 and 6 hereof, (i) in the event of Employee's death, or (ii) in the event of Employee's disability, through the date of proper notice of disability as required by subsection 7d. Any benefits payable under insurance, health, retirement and bonus plans as a result of Employer's participation in such plans through such date shall be paid when due under those plans. 9. Notice of Termination. Any termination of Employee's employment with Employer as contemplated by section 7 hereof, except in the circumstances of Employee's death, shall be communicated by written notice of termination by the terminating party to the other party hereto. Any notice of termination pursuant to subsection 7a or 7c shall indicate the specific provision of this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination. 10. Confidential Information. It is understood that Employee may acquire knowledge of and will continue to be informed of confidential information and trade secrets of Employer. Employee agrees that all such confidential information is in the nature of trade secrets and is the sole property of Employer. Employee will keep confidential, and will not reproduce, copy or disclose to any other person or firm, any information relating to such confidential information and trade secrets. Employee agrees that upon termination of this Agreement, he shall surrender promptly to Employer any and all trade secrets, internal memoranda and other documents disclosing any confidential information which he may possess and that such trade secrets, memoranda and documents shall be and remain the sole property of Employer. All of the terms of this section 10 shall remain in full force and effect both during the Term of this Agreement and after the termination of this Agreement for any reason. 11. Noncompetition During Agreement. Employee agrees that during the term of this Agreement, he will not, directly or indirectly, engage in as an employee, officer, partner or stockholder of, or provide consultation to, any other person engaged in the retail footwear industry (except as the holder of 5% or less of the stock of a publicly held corporation). 12. Remedies. The parties hereto agree and acknowledge that many of the rights conveyed by this Agreement are of a unique and special nature and that 3 Employer will not have an adequate remedy at law in the event that Employee fails to abide by its terms and conditions, nor will money damages adequately compensate for such injury. It is therefore, agreed between the parties that in the event of breach by Employee of his obligations contained in sections 10 or 11 of this Agreement, Employer shall have the rights, among other rights, to damages sustained thereby and to an injunction to restrain Employee from the prohibited acts. Employee agrees that this section shall survive the termination of this Agreement and Employee shall be bound by its terms at all times subsequent to the termination thereof for so long a period as Employer continues to conduct the same business it was conducting during the Term of this Agreement. Nothing herein contained shall in any way limit or exclude any and all other rights granted by law or equity to Employer. 13. Attorneys' Fees. In any action at law or in equity to enforce any provisions or rights under this Agreement, the unsuccessful party to such litigation, as determined by the court in a final judgment or decree, shall pay attorneys' fees incurred by the successful party (including without limitation, costs, expenses, and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding, such costs, expenses, or attorneys' fees shall be included as part of the judgment. 14. Successors. Should Employee die after termination of his employment with Employer while any amounts are payable to him hereunder, this Agreement shall inure to the benefit of and be enforceable by Employee's executors, administrators, heirs, distributees, devisees and legatees and all amounts payable hereunder shall be paid in accordance with the terms of this Agreement to Employee's devisee, legatee or other designee or, if there is no such designee, to his estate. 15. Notice. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Employee: 118 Norcross Lane Mooresville, NC 28115 If to Employer: Shoe Carnival, Inc. 8233 Baumgart Road Evansville, IN 47711 Attn: Chief Executive Officer or to such address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 16. Indiana Law. The validity, interpretation, and performance of this Agreement shall be governed by the laws of the State of Indiana. 17. Amendment and Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee and Employer. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representation, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 4 18. Severability. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement which shall remain in full force and effect. 19. Assignment. This Agreement is personal in nature and neither party hereto shall, without consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except as provided in section 14 above. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year first above set forth. SHOE CARNIVAL, INC. By: /s/ Mark L. Lemond Mark L. Lemond President and Chief Executive Officer "Employer" By: /s/ Cliff Sifford Cliff Sifford "Employee" 5 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED MAY 3, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JAN-31-1998 FEB-02-1997 MAY-03-1997 1,762 0 802 0 64,173 67,955 49,463 18,632 98,786 15,530 14,939 0 0 0 65,771 98,786 59,328 59,328 40,998 40,998 0 0 231 3,055 1,237 1,818 0 0 0 1,818 .14 .14
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