SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended January 28, 1995.
[ ] Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 (No Fee
Required)
For the transition period from to
Commission file number 0-14628
Brendle's Incorporated (Exact Name of Registrant as Specified in Charter)
North Carolina 56-497852
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1919 North Bridge Street, Elkin, North Carolina 28621
(Address of Principal Executive Offices) (Zip Code)
(910) 526-5600
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value per share
(Title of Class)
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
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.
State the aggregate market value of the voting
stock held by non- affiliates of the Registrant. The
aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid
and asked prices of such stock, as of a specified date
within sixty (60) days prior to the date of filing:
$3,265,953 based on the average of the high and low sales
prices as of April 10, 1995, of the Registrant's Common
Stock (which is the Registrant's only outstanding class of
voting equity security) on the National Association of
Securities Dealers Automated Quotation System for National
Market Issues. The foregoing market value excludes the
dollar amount attributable to 6,226,811 shares of the
Registrant's Common Stock held by certain executive
officers and directors of the Registrant. A determination
of "affiliate" status for a particular individual for the
purpose of providing information in response to the
foregoing inquiry shall not be deemed a determination of
"affiliate" status for any other purpose.
Indicate by check mark whether the registrant has
filed all documents and reports required to be filed by
Section 12, 13, or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes X No
Indicate the number of shares outstanding of each
of the registrant's classes of common stock, as of the
latest practicable date.
Number outstanding at
Class April 10, 1995
Common Stock, $1.00 Par Value
Per Share. . . . . . . . . . . . . 12,758,717
Documents Incorporated by Reference: A part of the
Registrant's Annual Report to Security Holders for the
fiscal year ended January 28, 1995, pursuant to Rule
14a-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is incorporated by
reference into Part I, Part II and Part IV of this
Annual Report on Form 10-K. A part of the Registrant's
definitive Proxy Statement for the Annual Meeting of
the Registrant's shareholders for the fiscal year ended
January 28, 1995, filed or to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A
promulgated under the Exchange Act is incorporated by
reference into Part III of this Annual Report on Form 10-K.
2
Part I
Item 1. Business
Description and Development of Business
General
Brendle's Incorporated (the "Company") and its
subsidiaries originated in 1919 as a rural supply company,
and the parent company was incorporated in 1947 in North
Carolina. As of January 28, 1995, the Company operated
30 retail stores in North Carolina, South Carolina,
Virginia, and Tennessee offering, for the most part,
nationally advertised, brand-name merchandise at everyday
low prices. The operation of these stores constitutes
the sole industry segment in which the Registrant
operates and the above-named southeastern states
encompass its sole geographic area of operation. The
Registrant's stores, operating under the name "Brendle's,"
are merchandised as if they were a group of specialty
stores under one roof, and offer in-depth lines of
jewelry, consumer electronics, small appliances,
photographic equipment, sporting goods, toys, gifts,
house-wares, juvenile items, silver, crystal, lamps,
clocks, and other miscellaneous products. All sales
operations are the Registrant's and there are no leased
department sales. On April 29, 1994, Brendle's Stores,
Inc., the Company's wholly-owned operating subsidiary, was
merged into the Company. See "Holding Company Status."
Brendle's stores average approximately 50,000
square feet in size, approximately 55% of which is
selling space. The stores generally are among the
principal or so-called "anchor" tenants in strip
shopping centers, as opposed to shopping malls. While many
of the Registrant's stores are located in cities of less
than 100,000 people, the Registrant also competes in larger
markets including Greensboro, Raleigh, and
Winston-Salem, North Carolina. During Fiscal 1994, the
Company introduced its mail order business.
The Registrant monitors its inventory and sales,
both by store and by item, at cost, on a daily basis
through its computerized management information system
consisting of a central computer, point-of-sale terminals,
and administrative terminals. The Company commenced
implementation of a new computerized management information
system in Fiscal 1995 which is expected to be fully
operational by the end of the current fiscal year. The new
system has more powerful reporting capabilities and will
allow management to better monitor sales, inventory
levels, accounting data and trends in the Company's
performance. Specific item data captured at point-of-sale
using bar code and price look-up technology allows the
Registrant's merchandising staff to monitor sales and
inventory levels by reference to each inventory item's own
stock-keeping number, thus enabling prompt response to
rapidly selling or out- of-stock items. A typical store
carries approximately 15,000 different types of inventory
and is designed to direct customer attention and traffic
to higher profit margin products such as jewelry and gifts.
3
The Registrant sells few apparel or soft goods
items. The Registrant believes that it offers broader
assortments of jewelry and other hard goods than are
normally carried by other retailers of similar size. In
addition, the Registrant maintains a program of direct
import purchases of jewelry which assists in a more
timely delivery and improved profit margins for jewelry
products.
Chapter 11 Proceedings
Near the end of the fiscal year ended February 1,
1992 ("Fiscal 1992"), significant steps were taken to
develop and implement a strategic turnaround plan for
the Company. The plan included restructuring bank
debt, organizational and administrative changes, and
strategic adjustments necessary, in management's
opinion, to meet the competition in the market place and
to manage in the current economic environment in retailing
in the Company's market area. The stated objective of the
Company's turnaround plan for the fiscal year ended January
30, 1993 ("Fiscal 1993"), was to reverse the trend of
declining earnings from recent years while developing an
improved merchandising strategy to become a more focused
specialty retailer.
The Company achieved moderate success during the
first two quarters of Fiscal 1993 in the implementation
of its strategic turnaround plan. As the Company previously
reported, pre-tax earnings for the second quarter and first
six months of Fiscal 1993 were improved over the results for
the corresponding periods in the previous year. The
Company was also encouraged by the fact that the results
for the second quarter and first six months of Fiscal 1993
were $1.5 million better than the Company's plan for the
second quarter and $1.9 million better than the Company's
planned six months results.
In September and October 1992, however, the Company
began experiencing increased pressure from its vendors and
a diminution in the credit terms that were available from
its vendors. This tightening of available credit terms from
vendors, coupled with unexpected significant decreases in
sales during the third quarter of Fiscal 1993, created
substantial cash management difficulties. The Company's
inability to obtain inventory on historical terms and the
decrease in sales prevented the Company from being able to
maintain required inventory levels and to purchase at
planned levels the inventory it required for the 1992
Christmas season. As the restriction in credit terms from
vendors persisted, the resulting decrease in inventory
levels compounded the Company's sales decrease due to lack
of sufficient inventory.
Management of the Company explored various
alternatives to the cash management crisis it faced,
including discussions with its primary lenders regarding
modification to its then existing Loan Agreements. After
careful consideration of all their alternatives on
November 12, 1992, management of the Company and its
Board of Directors determined that in order to give the
Company the time that it needed to implement its strategic
turnaround plan, it was in the best interest of its
shareholders, employees, and customers to seek protection
under Chapter 11 of the United States Bankruptcy Code.
4
Ten days later, on November 22, 1992,
the Company and its then wholly-owned principal
operating subsidiary, Brendle's Stores, Inc. ("BSI"),
initiated Chapter 11 reorganization proceedings by filing
petitions with the United States Bankruptcy Court (the
"Bankruptcy Court") for the Middle District of North
Carolina (the "Chapter 11 Proceeding").
Significant Post-Petition Events
Subsequent to the filing of the voluntary petitions,
the Company and BSI sought and obtained numerous orders
from the Bankruptcy Court which were intended to
stabilize its business. These orders included, among
others, orders (i) authorizing the Company and BSI to
operate its cash management system substantially as it was
operated prior to the filing; (ii) approving a Vendor
Assurance Facility giving post-petition trade vendors a
super priority lien on inventory; (iii) approving the
assumption of certain credit card arrangements for the
processing of credit card purchases, including Discover,
Mastercard, Visa, and Brendle's credit cards; (iv)
authorizing certain pre- petition customer claims
including layaway and special order purchases; (v)
authorizing the Company and BSI to honor certain
pre-petition wages and benefits owing to its active
employees; (vi) approving a plan to pay the Company and
BSI's qualifying vendors reclamation claims; (vii)
authorizing Brendle's to return defective merchandise
to its vendors for pre-petition credit; (viii) approving a
$25 million post-petition line of credit from The CIT
Group/Business Credit, Inc. See also "Item 3 - Legal
Proceedings" for additional information regarding the
Chapter 11 Proceedings.
Following the date the Chapter 11 proceeding was
filed, the Company worked diligently to develop a Joint Plan
of Reorganization (the "Plan") which would set forth the
payment terms to creditors and provide for other
organizational and operational changes of the reorganized
Company. A Plan and D i sclosure Statement were
submitted to the Bankruptcy Court, and on November
10, 1993, a hearing was held resulting in the
approval of the Disclosure Statement. The Plan was
then voted on and accepted by the creditors and
stockholders. An Order confirming the Plan was entered
on December 20, 1993, for the Company and on December
23, 1993, for BSI. A Notice of Appeal of the Order
confirming the Plan was filed on December 28, 1993 by three
individual creditors and certain retiree claimants. The
appeal was subsequently dismissed pursuant to agreements
reached with the appellants.
The Plan developed by the Company and confirmed by
the Bankruptcy Court generally provided for the full
payment of all claims of The CIT Group/Business
Credit, Inc., the Company's debtor-in-possession lender,
and all allowed secured claims, priority claims and
administrative claims (as those claims were defined in
the Plan). The Plan further provided that general
unsecured creditors could elect to receive either (i) a
cash payment equal in amount to fifty-two percent (52%)
of the amount of their allowed unsecured claim, or (ii) a
Reorganization Note equal to eighty percent (80%) of their
allowed unsecured claims. The Reorganization Notes, which
were dated as of April 30, 1994, bear interest at
5
the rate of eight percent (8%) per annum and are payable
over a ten (10)-year term. For the first two (2) years, the
Reorganization Notes accrue interest only, and no payments
are to be made to Reorganization Note holders. At the
end of two (2) years, the principal amount of the
Reorganization Note, plus accrued but unpaid interest, shall
be capitalized, and during the third year, interest on the
capitalized principal balance shall be paid
semi-annually. Thereafter, interest on the unpaid
principal balance shall be due and payable semi-annually.
Annual principal payments will be made at the end of years
four (4) through ten (10) in their respective amounts as
follows: 11%, 12%, 13%, 14.1%, 15.3%, 16.6%, and 18%. The
Reorganization Notes also include standard default
provisions. The creditors were solicited to make their
election in November, 1993, and over 99% of the
creditors, representing approximately $85 million in
unsecured obligations, elected to receive the cash
payment, with less than 1% of the creditors, representing
approximately $160,000 in unsecured obligations electing
to receive the Reorganization Notes.
In addition to the items set forth above, all
general unsecured creditors received, with respect to
their allowed claims, a pro rata distribution of stock
in the Company, which, in the aggregate, constitutes
thirty-five percent (35%) of the outstanding stock of the
Company at April 29, 1994, the date the Plan of
Reorganization was substantially consummated. As of April
10, 1995, the Company has outstanding 12,758,717 shares of
Common Stock, which includes 4,469,201 shares of Common
Stock that was issued for the benefit of the unsecured
creditors pursuant to the Plan of Reorganization. The stock
was initially issued to Arnold Zahn of Zahn & Associates,
Inc., as Escrow Agent for the unsecured creditors,
pending the resolution of certain disputed claims. As of
the date of this report, 4,112,000 shares have been
distributed to creditors and the remaining shares are
expected to be distributed during the current fiscal year.
The Plan further provided that certain of the
Company's creditors would have a right to appoint two (2)
directors to serve on the Company's Board of Directors for
a period of one (1) year following substantial
consummation. The creditors appointed Robert R. Dunn and
John A. Northen to serve as members of the Company's
Board of Directors for a period of one year. Information
regarding these directors is set forth in the Company's
Proxy Statement being used in connection with its Annual
Meeting of Shareholders to be held June 1, 1995. Both of
these directors are nominees for election to the Board of
Directors for the upcoming year, although the Plan of
Reorganization does not require the Company to afford
such right to creditors. The Nominating Committee of
the Board of Directors believes that these individuals have
made a valuable contribution to the Company and that the
Company will benefit from their continued service as
Directors.
The Plan also contained certain default provisions,
which, among other things, provided that if the cash
distributions contemplated by the Plan were not made on or
before April 30, 1994, an entity described in the Plan as
the Creditor Management Committee would take over
management of the Company and would be vested with the
powers and authorities of a Chapter 11 Trustee and the Board
of Directors. The Company achieved substantial consummation
of this Plan of Reorganization on April 29, 1994, and has
made
6
its required payments to creditors under the terms of the
Plan. See "Item 3. Legal Proceedings."
Distribution Center
The Company's distribution and warehousing
activities have been conducted principally through a
distribution center which it previously owned. The
distribution center contains in excess of 388,000
square feet and is located in Elkin, North Carolina.
Due primarily to the reduction of the number of stores
that the Company will operate, management of the Company
determined that it no longer required 388,000 square
feet of distribution space. Consequently, the Company sold
the distribution center on January 31, 1994, for a
purchase price of $5,250,000. Under the terms of the sale,
the Company was permitted to lease back from the purchaser
approximately 224,000 square feet of the distribution
facility. The terms of the lease provide that the Company
will pay initial annual rent in the amount of $504,000
with increases annually fixed in accordance with the lease
terms. The initial term of this lease will expire on
January 31, 2003. The net sale proceeds of the distribution
center were used to pay the Company's secured lenders who
had perfected security interests in the distribution center
securing pre-petition debt.
During the fiscal year ended January 28, 1995
("Fiscal 1995"), the Company paid approximately $504,000 in
rent for its distribution center space and management
believes that leased space will be adequate for its
warehousing needs during the upcoming year.
Holding Company Status
From January 31, 1987, through April 29, 1994,
substantially all of the activities of the Company were
performed through subsidiaries wholly owned, directly or
indirectly, by the Company, thus making the corporate
structure of the Company and its subsidiaries as follows:
Brendle's Incorporated, a North Carolina holding company
owning the active wholly owned subsidiaries; Brendle's
Stores, Inc., which owned more than ninety-one percent (91%)
of the Company's operating assets; Brendle Transport, Inc.,
which owned or leased the transportation equipment utilized
in the Company's operations; The Electronic Sports
Collection USA, Inc., an import buying subsidiary of
the Company; Brendle's Acceptance Corporation, which was
formed to manage the Company's credit finance operations;
and BFS, Inc., an investment management and holding
subsidiary organized under the laws of the State of
Delaware.
As a component of the Company's substantial
consummation of its Plan of Reorganization, Brendle's
Stores, Inc. was merged into the Company effective as of
April 29, 1994. Management of the Company believes that
this merger will help to streamline its operations and that
the benefits once available to the Company through the
7
holding company structure no longer provided the Company
with sufficient operational efficiencies to justify the
expense of retaining the previous corporate structure.
Seasonality
The Company's retail business (its sole industry
segment) is seasonal in nature, being strongest in the
Company's fourth fiscal quarter. The Company typically has
made, and anticipates to make in the future, in excess of
one-third of its revenues for the fiscal year during the
fourth fiscal quarter of operations.
Revenues, Profits, Assets, Working Capital and Other
Financial Items
For information relating to changes in revenues,
profits, assets, working capital and its components and
other financial information, reference is made to
Management's Discussion and Analysis appearing in the
Company's 1994-1995 Annual Report and incorporated
herein by reference and to the Company's financial
statements and the related notes thereto which appear in
such Annual Report.
Customers
No material part of the business of the Company is
dependent on a single customer or a limited number of
customers or a group of commonly controlled or affiliated
customers. No purchases by any such customer or group
comprised ten percent or more of the total revenues of the
Company for the fiscal year ended January 28, 1995.
Research and Development Activities
The Company is not engaged in manufacturing
operations. During the last three fiscal years, the Company
has not expended substantial dollar amounts in research and
development activities relating to its products or
services. However, the executive officers of the Company,
as well as its merchandising managers and staff, are
continually engaged, individually and through focus groups,
in evaluating the sales performance of various products
and in the development of operating efficiencies by the
use of marketing focus groups, normal market visits, and
discussions with key suppliers.
Inventory and Supplies: Products and Services
The Company has no long-term contracts with its
suppliers for inventory or supplies, but believes that
there are adequate sources of supply available for the
products which it
8
sells or anticipates selling. The Company believes that it
is among the largest customers of many of its suppliers
in dollar volume of purchases and therefore believes that
it can purchase from these suppliers on terms at least as
favorable as those available to most of its competitors
from such suppliers. No single supplier accounts for a
material amount of the total inventory purchased by the
Company. During the last three fiscal years of the
Company, no class of similar products or services
accounted for ten percent or more of the Company's
consolidated revenue for such periods.
Competition
The Company has numerous and significant
competitors in the general merchandise retail and
discount retail areas, including large discount
retailers, department stores, catalog showrooms, mail order
houses, and other related operations. Many of these have
substantially greater assets, outlets, and facilities than
the Company. However, the Company believes that its price
structure generally allows it to compete with traditional
retailers, such as department stores, and specialty
retailers, while the environment, merchandise selection,
and services available in its stores generally allow it to
compete with most other discount retailers, and catalog
showrooms.
Employees
As of January 28, 1995, the Company had
approximately 1580 employees. The Company considers its
relations with its employees to be satisfactory.
Environmental Regulation
The Company's business activities are not
significantly affected by federal, state, or local
environmental regulation.
Foreign and Domestic Operations and Export Sales
During each of the Company's last three fiscal
years, the Company's operations and assets in foreign
areas and sales by domestic operations to foreign
customers, if any, were not material to the Company's
business as a whole. All of the Company's domestic
operations are conducted in a single four-state geographic
area of the southeastern United States.
9
Patents and Trademarks
The Company believes that the name "Brendle's," used
both alone and with the distinctive diamond apostrophe,
has acquired commercial value and has helped to promote
the Company's reputation in its business. The Company has
obtained federal registered trademark protection for the
name used in these ways.
Item (unnumbered). Executive Officers of the Company
Pursuant to Item 401 (b) of Regulation S-K and
General Instruction G to Form 10-K, the following
information is furnished concerning the executive officers
of the Company. All officers are elected by the Board of
Directors to serve at the pleasure of the Board of Directors
for a period of one year or until the next annual
meeting of the Board of Directors, and until their
respective successors are duly elected. For information
regarding the share ownership of the executives named in
the Summary Compensation Table included in Item 11, see
"Item 12 - Security Ownership of Certain Beneficial Owners
and Management."
All Positions and Offices with Periods of
Service, and business experience for last
five years (1)
Name Age
Douglas D. Brendle 66 Chairman of the Board of Directors
of the Registrant from February,
1 9 8 6 to February, 1995; Chief
Executive Officer and President of
the Company from April, 1993 to
February, 1995; Member of Office of
Chief Executive, January 15, 1992,
to June 2, 1992; Chief Executive
O f ficer of the Registrant from
November, 1984, to January 15, 1992;
and from November, 1984, to July,
1989, he served as President of the
Registrant.
Joseph M. McLeish, Jr. 46 President and Chief Executive Officer of
t h e Registrant since February, 1995;
President of Merchandisers Association,
Inc. from January, 1992 to February, 1995;
Executive Director of Merchandisers
Association, Inc. from February, 1991 to
December, 1991; Vice President of David
Weis Wholesale Jewelers, Inc. from
January, 1980 to February, 1991.
William V. Grady 48 Senior Vice President of Marketing -
Advertising and Store Operations of the
Registrant since
10
December, 1992. National
Director of Field Marketing for General
Electric Capital Corporation from
February, 1988, to December, 1992.
Previously Mr. Grady was Operating Vice
President of Marketing and Sales Promotion
for Service Merchandise. Prior to Service
Merchandise, Mr. Grady retired from Lowe's
Companies, Inc., holding a variety of
positions over 19 years.
David R. Renegar 43 Vice President and Chief Financial Officer
of the Registrant since February, 1992.
Treasurer of the Registrant since April,
1990; Secretary and Controller of the
Registrant since February, 1986.
Gregory S. Stegall 43 Senior Vice President of Merchandise
for the Registrant since April,
1995; Vice President of Jewelry
Merchandising for the Registrant
from August, 1994 to March, 1995;
Divisional Vice President - Jewelry
for the Registrant from July, 1989
to August, 1994.
(1) Each executive officer of the Company held the
identical offices held at such time (if any) with
Brendle's Stores Inc., previously a wholly owned subsidiary
of the Company which was merged into the Company
effective April 29, 1994. Brendle's Stores, Inc.
previously owned the substantial part of the operating
assets of the Company.
(2) Everett V. Purdy served as the Company's Sr.
Vice President of Merchandising from July, 1994 to
March, 1995 when he resigned his position with the Company.
Item 2. Properties
The corporate headquarters and principal
executive offices of the Company are located at 1919
North Bridge Street, Elkin, North Carolina 28621 in leased
premises of approximately 135,000 square feet (a substantial
portion of which is contiguous warehouse space) under a
lease, with an affiliate of the Company, scheduled to expire
on October 1, 1995, with options to renew for up to 20
additional years.
The Company's distribution center, opened in
December, 1986 in Elkin, North Carolina, previously
encompassed over 388,000 square feet of space. On February
1, 1994, the Company sold the distribution center for a
purchase price of $5,250,000. Pursuant to the terms of the
sales contract, the Company was permitted to lease back
244,000 square feet of distribution center space. The terms
of this lease are summarily described under "Item 1. -
Description of Business - Distribution Center."
11
Set forth below is a list of all the
Company's stores open on January 28, 1995, the cities
in which the stores are located, the year in which the
stores were first opened in that city, and their present
approximate square footage, separately indicating both
selling space and warehouse (storage) space at each
store. Certain stores have changed or may change locations
within a given city.
Year of Approximate Approximate
Store Open- Selling Area Warehouse Total
ing in Square Square Square
City Location Footage Footage Footage
1967 (1) Elkin, NC 26,260 15,463 41,723
1968 (2) Winston-Salem, NC 25,000 35,000 60,000
1971 (3) Hickory, NC 24,000 38,000 62,000
1972 (4) Greensboro, NC 28,500 21,852 50,352
1974 (5) Chapel Hill, NC 32,067 27,933 60,000
1976 (6) Asheville, NC 33,000 37,000 70,000
1977 (7) Kingsport, TN 23,100 14,700 37,800
1978 (8) Concord, NC 30,277 7,881 38,158
1978 (9) Raleigh, NC 32,067 27,933 60,000
1978 (10) Winston-Salem, NC 20,000 7,000 27,000
1980 (11) Burlington, NC 35,000 25,000 60,000
1982 (12) Wilson, NC 30,993 29,007 60,000
1982 (13) Myrtle Beach, SC 30,993 29,007 60,000
1982 (14) Raleigh, NC 28,700 35,300 64,000
1982 (15) Greensboro, NC 32,000 31,747 63,747
1983 (16) Jacksonville, NC 23,000 29,471 52,471
1983 (17) Roanoke, VA 31,971 11,657 43,628
1985 (18) Boone, NC 30,000 27,000 57,000
1985 (19) Kinston, NC 28,516 33,024 61,540
1985 (20) Roanoke Rapids, NC 30,000 21,000 51,000
1985 (21) Salisbury, NC 28,779 15,221 44,000
1985 (22) Anderson, SC 20,000 20,000 40,000
1985 (23) Spartanburg, SC 20,000 25,000 45,000
1985 (24) Florence, SC 28,084 11,916 40,000
1986 (25) Enka/Candler, NC 27,263 32,612 59,875
1987 (26) Wilmington, NC 28,993 21,007 50,000
1988 (27) Greenville, NC 28,993 21,007 50,000
1989 (28) Christiansburg, VA 28,912 11,088 40,000
1989 (29) New Bern, NC 24,241 5,759 30,000
1990 (30) Fayetteville, NC 23,843 10,469 34,312
TOTAL FOR 30 OPEN STORES 834,552 679,054 1,513,606
12
The Company owned in fee two of these stores, one
each in Salisbury and Enka, North Carolina. These stores
are not pledged or encumbered under the terms of the
Company's credit facility with Foothills Capital
Corporation; however, they may at some future date
become additional collateral for the loan. See
"Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity." Thirteen (13) of
these stores are leased from affiliates of the Registrant,
and the remaining fifteen (15) stores are leased from third
parties.
For a discussion of capital and operating lease
commitments for the Company's store, equipment and
corporate headquarters facility, reference is made in
Notes to Consolidated Financial Statements, which
discussion is incorporated herein by reference.
Leases on stores closed during Fiscal 1994 were
rejected or assumed and assigned to third parties pursuant
to Bankruptcy Court orders.
Item 3. Legal Proceedings.
On November 22, 1992, the Company and BSI, its
then wholly-owned subsidiary of the Company which owned
the primary operating assets of the Company, filed for
protection under Chapter 11 of the United States Bankruptcy
Code. The following discussion provides general
background information regarding the Chapter 11
Proceeding, but it is not intended to be an exhaustive
summary. For additional information regarding the effect of
these cases on the Company, reference should be made to
the Bankruptcy Code and to the Bankruptcy Court proceedings
themselves.
Chapter 11 Reorganization Under the Bankruptcy Code
Although the Company and BSI were
authorized to operate the Company's business as a
debtor-in-possession, they were not permitted to
engage in transactions outside the ordinary course
of business without first complying with the notice
and hearing provisions of the Bankruptcy Code and
obtaining Bankruptcy Court approval when
necessary. The requirement to comply with the
notice and hearing provisions in the Bankruptcy Code
terminates once a Plan of Reorganization, having been
confirmed by the Bankruptcy Court, is substantially
consummated. The Company achieved substantial
consummation of its Plan of Reorganization on or
about April 30, 1994. By virtue of the
provisions of the Bankruptcy Code and the Plan,
substantial consummation of the Plan effected a
discharge of all indebtedness of the Company not
otherwise provided for in the Plan.
13
Plan of Reorganization - Procedures
For 120 days after the date of the filing of the
voluntary Chapter 11 petition (or such larger period
as the Bankruptcy Court may allow), the
debtor-in-possession has the exclusive right to
propose and file a plan of reorganization with the
Bankruptcy Court. If the debtor-in- possession files
a plan of reorganization during the 120-day
exclusivity period (or such longer period as the
Bankruptcy Court may allow), no other party may file
a plan of reorganization until 180 days after the date
of filing of the Chapter 11 petition, during
which period the debtor-in-possession has the
exclusive right to solicit acceptances of the plan.
If a Chapter 11 debtor fails to file its plan during
the 120- day exclusivity period, or such additional
time period ordered by the Bankruptcy Court or
after such plan has been filed, fails to obtain
acceptance of such plan from impaired classes of
creditors and equity security holders during the
exclusive solicitation period, any party in interest,
including the debtor, a creditor, an equity security
holder, or a committee of creditors or equity
security holders may file a plan of reorganization for
such Chapter 11 debtor.
Given the magnitude of the Company's operations
and the number of interested parties possessing
claims that have to be resolved in the Chapter 11
Proceeding, the plan formulation process was very
complex. Accordingly, the Company and BSI were
granted an extension of the exclusivity period to
September 21, 1993. A plan of reorganization was
filed by the Company on that date and was
subsequently amended on November 10, 1993. A hearing
on the confirmation of the Company's Plan of
Reorganization was held on December 14, 1993, and an
Order approving the Plan was entered on December
20, 1993, for the Company, and on December 23, 1993,
for BSI. The Plan that was developed by the Company
and was confirmed by the Bankruptcy Court provided
for the full payment of all claims of The CIT
Group/Business Credit, Inc., the Company's
debtor-in-possession lender, and all allowed
secured claims, priority claims, and administrative
claims (as those claims are defined in the Plan). The
Plan further provided that general unsecured creditors
could elect to receive either (i) a cash payment
equal in amount to fifty-two percent (52%) of the
amount of their unsecured claim, or (ii) a
Reorganization Note equal to eighty percent
(80%) of their allowed unsecured claims. The
Reorganization Notes, which were dated as of April
30, 1994, bear interest at the rate of eight
percent (8%) per annum and will be payable over a ten
(10)-year term. For the first two (2) years, the
Reorganization Notes accrue interest only, and no
payments will be made to Reorganization Note holders.
At the end of two (2) years, the principal amount of
the Reorganization Note, plus accrued but unpaid
interest, shall be capitalized, and during the third
year, interest on the capitalized principal
balance shall be payable semi- annually. Thereafter,
interest on the unpaid principal balance shall be due
and payable semi-annually. Annual principal payments
will be made at the end of years four (4)
through ten (10) in their respective amounts as
follows: 11%, 12%, 13%, 14.1%, 15.3%, 16.6%, and 18%.
The Reorganization Notes also include standard
default
14
provisions. The creditors were solicited to make
their election in November, 1994, and over 99% of the
creditors, representing approximately $85 million in
unsecured obligations, elected to receive the cash
payment, with less than 1% of the creditors,
representing approximately $160,000 in unsecured
obligations, electing to receive the Reorganization
Notes.
In addition to the items set forth above, all
general unsecured creditors have received, with
respect to their allowed claims, a pro rata
distribution of stock in the Company, which, in the
aggregate, will constitute thirty-five percent
(35%) of the outstanding stock of the Company. As
of the date of this report, the Company has
outstanding 12,758,717 shares of common stock,
which includes 4,469,201 shares of common stock that
were issued for the benefit of the unsecured
creditors. The stock was initially issued to
Arnold Zahn of Zahn & Associates, Inc., as Escrow
Agent for the unsecured creditors, pending the
resolution of certain disputed claims. As of the
date of this report, 4,112,000 shares have been
distributed to creditors and the remaining shares
are expected to be distributed during the current
fiscal year.
The Plan further provides that certain of the
Company's creditors have a right to appoint two
(2) directors to serve on the Company's Board of
Directors for a period of one year following
substantial consummation. The creditors have
appointed Robert R. Dunn and John A. Northen to
serve as directors on the Company's Board of
Directors. Information regarding these directors is
set forth under Item 10 hereof entitled "Directors and
Executive Officers of the Registrant."
The Plan also contained certain default
provisions, which, among other things, provided
that if the cash distributions contemplated by the
Plan were not made on or before April 30, 1994, an
entity described in the Plan as the Creditor
Management Committee would take over management of
the Company and would be vested with the powers
and authorities of a Chapter 11 Trustee and the
Board of Directors. The Company achieved substantial
consummation of this Plan of Reorganization on April
29, 1994 and has made its required payments to
creditors under the terms of the Plan.
The Company is involved in various other
litigation matters in the ordinary course of
business. In the opinion of management, settlement of
these matters will not have a material effect on
the financial condition of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security
holders of the Company during the fourth quarter of the
Company's fiscal year covered by this report.
15
Part II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
The Company's Common Stock is traded on the
NASDAQ National Market system under the symbol BRDL. At
January 28, 1995, there were approximately 2585
shareholders of record. The Company has not declared any
cash dividends since January 31, 1983. The current
policy of the Board of Directors is to retain earnings in
order to help finance the Company's business. Other
information required by Item 5 of Form 10-K appears under
the heading "Market and Dividend Information" on page
28 of the Registrants 1994-1995 Annual Report to
Shareholders and is incorporated herein by reference.
ITEM 6. Selected Financial Data.
The information required by Item 6 of Form 10-K
appears under the heading "Selected Financial Data" on
page 3 of the Registrant's 1994-1995 Annual Report to
Shareholders and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
The information required by Item 7 of Form 10-K
appears under the heading "Management's Discussion and
Analysis" on pages 4 through 7 of the Registrant's
1994-1995 Annual Report to Shareholders and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements of the
Registrant and the related notes (including unaudited
quarterly data), together with the report thereon of Price
Waterhouse LLP, dated March 17, 1995, appearing on pages 8
through 26 of the Registrant's 1994-1995 Annual Report to
Shareholders are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
No such changes in accountants or disagreements
on accounting or financial disclosure occurred in Fiscal
1995.
16
Part III
Item 10. Directors and Executive Officers of the
Registrant.
With respect to the directors of the
Registrant, the information required by Item 10 of Form
10-K appears on pages 5 through 7 of the Registrant's
1995 Annual Meeting Proxy Statement and is incorporated
herein by reference.
Item 11. Executive Compensation.
The information required by Item 11 of Form 10-K
appears on pages 8 through 18 of the Registrant's 1995
Annual Meeting Proxy Statement and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
The information required by Item 12 of Form 10-K
appears on pages 2 through 4 and pages 5 through 8 of the
Registrant's 1995 Annual Meeting Proxy Statement and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information required by Item 13 of Form 10-K
appears on pages 19 through 21 of Registrant's 1995
Annual Meeting Proxy Statement and is incorporated
herein by reference.
17
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements: Page in
1994-1995
Annual Report*
Report of Independent Accountants 27
Consolidated Balance Sheets at
January 28, 1995 and January 29, 1994 8
Consolidated Statements of Income
for the three years ended January 28, 1995 9
Consolidated Statements of Shareholders' Equity
for the three years ended January 28, 1995 10
Consolidated Statements of Cash Flows
for the three years ended January 28, 1995 11
Notes to Consolidated Financial Statements 12
*Incorporated by Reference from the indicated
pages of the Registrant's 1995 Report to
Shareholders.
(b) The Company did not file any reports on
Form 8-K during the fiscal year ended January 28, 1995.
(c) See the Exhibit Index attached hereto for
reference to the required exhibits to this report.
(d) All required financial statements and
schedules are filed herewith.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
BRENDLE'S INCORPORATED
(Registrant)
Date: April 18, 1995 By:Joseph M. McLeish, Jr. /s/
Joseph M. McLeish, Jr.
President and Chief Executive Officer
19
SIGNATURES
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 Registrant and in the
capacities and on the dates indicated.
Date: April 27, 1995 Douglas D. Brendle /s/
Director and Chairman Emeritus
Date: April 27, 1995 S. Floyd Brendle /s/
S. Floyd Brendle,*
Director
Date: April 27, 1995 William F. Cosby /s/
William F. Cosby,*
Director
Date: April 27, 1995 Thomas H. Davis /s/
Thomas H. Davis,*
Director
Date: April 27, 1995 Robert R. Dunn /s/
Robert R. Dunn,*
Director
Date: April 27, 1995 James B. Edwards /s/
James B. Edwards,*
Director
Date: April 27, 1995 John D. Gray /s/
John D. Gray,*
Director
Date: April 27, 1995 John A. Northen /s/
John A. Northen, *
Director
Date: April 27, 1995 Patty Brendle Redway /s/
Patty Brendle Redway,*
Director
Date: April 27, 1995 David R. Renegar /s/
David R. Renegar,
Chief Financial Officer
(principal accounting officer) *
* Executed pursuant to Power of Attorney included with this
report as an Exhibit.
20
EXHIBIT INDEX
Any document referred to below as being incorporated by reference
is so incorporated to the files of the Securities and Exchange
Commission, Washington, DC 20549. The term "Company" herein refers to
Brendle's Incorporated or its wholly-owned subsidiary, Brendle's Stores,
Inc.
Number in
Exhibit Number per Sequential
Item 601 of Numbering
Regulation S-K Description of Exhibit* System
3 Articles of Incorporation and By-Laws (incorporated
by reference to Exhibit 3 of the Company's Annual
Report on Form 10-K for the fiscal year ended
February 2, 1991)
3.1 The Company's Restated charter, as amended by: (1)
Articles of Amendment dated May 13, 1986, and (2)
Articles of Amendment dated June 3, 1988
(incorporated by reference to Exhibit 3.1 of the
Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1988)
3.2 The Company's By-Laws, as amended on April 20,
1994 (incorporated by reference to Exhibit 3.2 of
the Company's Annual Report on Form 10-K for the
fiscal year ended January 29, 1994)
3.3 Articles of Amendment amending the Company's
Articles of Incorporation effective April 27, 1994
(incorporated by reference to Exhibit 3.3 of the
Company's Annual Report on Form 10-K for the
fiscal year ended January 29, 1994)
3.4 Articles and Plan of Merger providing for the
merger of Brendle's Stores, Inc. into the Company
effective April 29, 1994 (incorporated by
reference to Exhibit 3.4 of the Company's Annual
Report on Form 10-K for the fiscal year ended
January 29, 1994)
4 Instruments defining the rights of security
holders, including indentures: Not Applicable.
(See the Company's Restated Charter, as amended,
incorporated by reference to Exhibit 3.1 above,
and the Company's By-Laws,
as amended, incorporated by reference to Exhibit 3.2
above)
9 Voting Trust Agreement: Not Applicable. (See the
Shareholders' Agreement dated April 10, 1986,
incorporated by reference to Exhibit 10.15 to the
Company's report on Form 10-K for the fiscal year
ended January 31, 1988
10 Material Contracts:
10.1 Brendle's Incorporated Amended and Restated
Employee's Profit-Sharing Plan and Trust Agreement
effective February 1, 1989 (incorporated by
reference to the company's report on Form 10-K for
the fiscal year ended January 31, 1989; as amended
by the First Amendment dated December 29, 1989) as
further amended by the Second Amendment dated
December 1, 1990 (incorporated by reference to the
Company's Annual Report on Form 10-K for the
fiscal year ended February 2, 1991).
10.2 Brendle's Incorporated 1986 Incentive Stock Option
Plan, as amended (incorporated by reference to
Exhibit 4(a) to the Company's Registration
Statement on Form S-8 dated April 24, 1987; Reg.
No. 33-13622)
10.3 Brendle's Incorporated 1986 Nonqualified Stock
Option Plan, as amended (incorporated by reference
to Exhibit 4(b) to the Company's Registration
Statement on Form S-8 dated April 24, 1987; Reg.
No. 33-13622)
10.4 Brendle's Incorporated 1990 Stock Option Plan
(incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
February 2, 1991).
10.5 Aircraft Lease between Brendle Transport, Inc. and
Sky-Lease, Inc. dated February 4, 1990
(incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
February 2, 1991).
-2-
10.6 Hold Harmless Agreement between the Company and
John D. Gray (incorporated by reference to Exhibit
10.9 to the Company's Registration Statement on
Form S-1 dated April 11, 1986)
10.7 Hold Harmless Agreement between the Company and
James B. Edwards (incorporated by reference to
Exhibit 10.10 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)]
10.8 Hold Harmless Agreement between the Company and
Thomas H. Davis (incorporated by reference to
Exhibit 10.14 to the Company's report on form 10-K
for the fiscal year ended January 31, 1988)
10.9 Shareholders' Agreement dated April 10, 1986,
among the then shareholders of the Company
(incorporated by reference to Exhibit 10.11 to the
Company's Registration Statement on Form S-1 dated
April 11, 1986)
10.10 Last Will and Testament of James Harold Brendle
(incorporated by reference to Exhibit 10.12 to the
Company's Registration Statement on Form S-1 dated
April 11, 1986)
10.11 Split-Dollar Life Insurance Agreement dated
January 8, 1982, between the Company and the
Trustee of the Douglas D. Brendle Irrevocable Life
Insurance Trust (incorporated by reference Exhibit
10.13 to the Company's Registration Statement on
Form S-1 dated April 11, 1986)
10.12 Split-Dollar Life Insurance Agreement dated
January 8, 1982, between the Company and the
Trustee of the Sidney Floyd Brendle Irrevocable
Life Insurance Trust (incorporated by reference
Exhibit 10.14 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.13 Form of Split-Dollar Life Insurance Trust Agreement
adopted April 7, 1986 (incorporated by reference
Exhibit 10.16 to
-3-
the Company's Registration Statement on Form S-1
dated April 11, 1986)
10.14 Schedule Identifying Omitted Split-Dollar Life
Insurance Agreements dated April 7 and April 8,
1986, which are substantially identical to the
form of Split-Dollar Life Insurance Agreement
(incorporated by reference Exhibit 10.21 to the
Company's report on form 10-K for the fiscal year
ended January 31, 1988) and to the Company's
Registration Statement on form S-1 dated April 11,
1986 (incorporated by reference Exhibit 10.17 to
the Company's Registration Statement on Form S-1
dated April 11, 1986)
10.15 Split-Dollar Life Insurance Agreement dated June
1, 1988, between the Company and Douglas D.
Brendle (incorporated by reference to the
Company's report on Form 10-K for the fiscal year
ended January 31, 1989)
10.16 Split-Dollar Life Insurance Agreement dated
September 13, 1988, between the Company and
Jeffrey D. Mick (incorporated by referenced to the
Company's report on Form 10-K for the fiscal year
ended January 31, 1989)
10.17 Split-Dollar Life Insurance Agreement dated
September 13, 1989, between the Company and
Johanna L. Johnson (wife of Dennis B. Johnson)
10.18 Triple Net Lease between Edna A. Brendle and the
Company dated October 1, 1985 re: a portion of
former Store #1, (now service center location)
Elkin, NC (incorporated by reference to Exhibit
10.18 to the Company's Registration Statement on
Form S-1 dated April 11, 1986)
10.19 Triple Net Lease between Brendle Brothers and the
Company dated October 1, 1985 re: former Store
#1, Elkin, NC (now service center location)
(incorporated by reference to
-4-
Exhibit 10.19 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.20 First Amendment to Triple Net Lease (re: former
Store #1, Elkin, NC) among Brendle Brothers, the
Company and a subsidiary, dated August 2, 1987
(incorporated by reference to Exhibit 10.25 to the
Company's report on Form 10-K for the fiscal year
ended January 31, 1988)
10.21 Triple Net Lease between Brenco and the Company
effective November 18, 1988 re: Store #1, Elkin,
NC (incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year
ended February 2, 1991).
10.22 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #2, Winston-Salem,
NC (incorporated by reference to Exhibit
10.20 to the Company's Registration Statement on
Form S-1 dated April 11, 1986)
10.23 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #3, Hickory, NC
(incorporated by referenced to Exhibit 10.21 to
the Company's Registration Statement on Form S-1
dated April 11, 1986)
10.24 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #5, Chapel Hill,
NC (incorporated by reference to Exhibit 10.22 to
the Company's Registration Statement on Form S-1
dated April 11, 1986)
10.25 Shopping Center Store-Space Lease between Brenco
and the Company dated October 1, 1985 re: Store
#6, Asheville, NC (incorporated by reference to
Exhibit 10.23 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.26 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #7, Kingsport, TN
(incorporated by reference to
-5-
Exhibit 10.24 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.27 Shopping Center Store-Space Lease between Brenco
and the Company dated October 1, 1985 re: Store
#12, Salem, VA (incorporated by reference to
Exhibit 10.25 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.28 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #13, Burlington,
NC (incorporated by reference to Exhibit 10.26 to
the Company's Registration Statement on Form S-1
dated April 11, 1986)
10.29 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #14, Wilson, NC
(incorporated by reference to Exhibit 10.27 to the
Company's Registration Statement on Form S-1 dated
April 11, 1986)
10.30 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #15, Myrtle
Beach, SC (incorporated by reference to Exhibit
10.28 to the Company's Registration Statement on
Form S-1 dated April 11, 1986)
10.31 Shopping Center Store-Space Lease between Brenco
and the Company dated October 1, 1985 re: Store
#16, Raleigh, NC (incorporated by reference to
Exhibit 10.29 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.32 Shopping Center Store-Space Lease between Brenco
and the Company dated October 1, 1985 re: Store
#17, Greensboro, NC (incorporated by reference to
Exhibit 10.30 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.33 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Store #23, Boone, NC
(incorporated by reference to
-6-
Exhibit 10.31 to the Company's Registration
Statement on Form S-1 dated April 11, 1986)
10.34 Triple Net Lease between Brenco and the Company
dated October 1, 1985 re: Elkin, NC Corporate
Headquarters and Warehouse Facility (incorporated
by reference to Exhibit 10.32 to the Company's
Registration Statement on Form S-1 dated April 11,
1986)
10.35 Master First Amendment to Leases (re: Leases
between the Company and Brenco in effect on August
2, 1987) among Brenco, the Company and a
subsidiary, dated August 2, 1987 (incorporated by
reference to Exhibit 10.39 to the Company's report
on Form 10-K for the fiscal year ended January 31,
1988)
10.36 Triple Net Lease between Brenco and the Company
dated as of September 14, 1987, re: Store #38,
Wilmington, NC (incorporated by reference to the
Company's report on Form 10-K for the fiscal year
ended January 31, 1989)
10.37 Triple Net Lease between Brenco and the Company
dated April 29, 1988, re: Store #42, Greenville,
NC (incorporated by reference to the Company's
report on Form 10-K for the fiscal year ended
January 31, 1989)
10.38 Consulting Agreement with S. Floyd Brendle, dated
February 17, 1989 (incorporated by reference to
the Company's report on Form 10-K for the fiscal
year ended February 3, 1990)
10.39 Brendle's Incorporated Stock Savings Plan and
Trust Agreement dated August 1, 1989 (incorporated
by reference to the Company's report on Form 10-K
for the fiscal year ended February 3, 1990)
10.40 Brendle's Key Employee Stock Appreciation Rights
Plan, dated effective August 18, 1989
(incorporated by reference to the Company's report
on Form 10-K for the fiscal year ended February 3,
1990)
-7-
10.41 Brendle's Unaffiliated Directors' Stock
Appreciation Rights Plan, dated effective August
18, 1989 (incorporated by reference to the
Company's report on Form 10-K for the fiscal year
ended February 3, 1990)
10.42 Bill of Sale and Lease Termination dated September
29, 1989 (incorporated by reference to the
Company's report on Form 10-K for the fiscal year
ended February 3, 1990)
10.43 Employment Agreement dated May 12, 1990 between
the Company and Dennis B. Johnson (incorporated by
reference to the Company's Annual Report on Form
10-K for the fiscal year ended February 2, 1991).
10.44 Loan Agreement between the Company and its Lender
banks dated October 18, 1991 in connection with
its $49,000,000 Revolving Line of Credit and
$20,000,000 Term Loan. (Incorporated by reference
to the Company's report on Form 10-K for the
fiscal year ended February 1, 1992.)
10.45 Agency Agreement between the Company and
Schottenstein Stores Corporation with amendments.
(Incorporated by reference to the Company's report
on Form 10-K for the fiscal year ended February 1,
1992.)
10.46 Master amendment to leases and amended and
restated master amendment to leases entered into
between the Company and Brenco. (Incorporated by
reference to the Company's report on Form 10-K for
the fiscal year ended February 1, 1992.)
10.47 AirCraft Lease Termination Agreement.
(Incorporated by reference to the Company's report
on Form 10-K for the fiscal year ended February 1,
1992.)
-8-
10.48 Letter Agreement between the Company and The GDL
Group, Inc. for consulting services.
(Incorporated by reference to the Company's report
on Form 10-K for the fiscal year ended February 1,
1992.)
10.49 First amendment to Brendle's Incorporated Stock
Savings Plan and Trust Agreement. (Incorporated
by reference to the Company's report on Form 10-K
for the fiscal year ended February 1, 1992.)
10.50 Employment Agreement dated December 9, 1992
between the Company and William V. Grady.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.51 Employment Agreement dated November 17, 1992
between the Company and Steve W. Luka.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.52 Employment Agreement dated November 17, 1992
between the Company and A.L. Miller, Jr.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.53 Employment Agreement dated November 17, 1992
between the Company and David R. Renegar.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.54 Employment Agreement dated November 17, 1992
between the Company and W. Steven Day.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
-9-
10.55 Employment Agreement dated November 17, 1992
between the Company and Gregory S. Stegall.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.56 Letter Amendment Agreement dated June 2, 1992
between the Company and The GDL Group, Inc. for
consulting services. (Incorporated by reference
to the Company's Annual Report on Form 10-K for
the fiscal year ended January 30, 1993.)
10.57 Management and Consulting Contract dated November
17, 1992 between The GDL Group, Inc. and Brendle's
Stores, Inc. for consulting services.
(Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
January 30, 1993.)
10.58 First Amendment to Loan Agreement dated May 14,
1992 between the Company (and Brendle's Stores,
Inc.) and its primary lender banks. (Incorporated
by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended January 30,
1993.)
10.59 Lease Agreement effective February 1, 1994 between
the Company and P.B. Realty, Inc. for the lease of
distribution center space (incorporated by
reference to Exhibit 10.59 of the Company's Annual
Report on Form 10-K for the fiscal year ended
January 29, 1994)
10.60 Loan and Security Agreement between the Company
and Foothill Capital Corporation dated April 21,
1994 (incorporated by reference to Exhibit 10.60
of the Company's Annual Report on Form 10-K for
the fiscal year ended January 29, 1994)
10.61 Employment Agreement between the Company and
Everett V. Purdy dated July 25, 1994.
-10-
10.62 Employment Agreement between the Company and David
R. Renegar dated August 1, 1994.
10.63 Employment Agreement between the Company and
Gregory S. Stegall dated August 1, 1994.
10.64 Retirement and Consulting Agreement between the
Company and Douglas D. Brendle dated March 1,
1995.
10.65 Employment Agreement between the Company and
Joseph M. McLeish, Jr. dated February 27, 1995.
10.66 Employment Severance Agreement between the Company
and Everett V. Purdy dated March 31, 1995.
10.67 Stock Option Grant Agreement between the Company
and Joseph M. McLeish, Jr. dated February 27,
1995.
10.68 Form of Three-Year Vesting Stock Option Grant
Agreement under the Company's 1990 Stock Option
Plan.
10.69 Form of Three-Year Vesting Stock Option Grant
Agreement under the Company's 1986 Incentive Stock
Option Plan.
10.70 Form of Two-Year Vesting Stock Option Grant
Agreement for the Company's 1986 Incentive Stock
Option Plan.
11 Statement regarding computation of per share
earnings: no statement setting forth the
computation of per share earnings has been made
since the computation can be clearly determined
from material contained in this report, including
the consolidated financial statements and related
notes, with particular reference to Note 1
thereto.
12 Statement regarding computation of ratios: Not
Applicable
-11-
16 Letter regarding change in certifying accountants:
Not Applicable
18 Letter regarding change in accounting principles:
Not Applicable
19 Previously unfiled documents: Not Applicable
22 Subsidiaries of the Company: Not Applicable
23 Published report regarding matters submitted to
vote of security holders: Not Applicable
24 Consent of Price Waterhouse LLP
25 Powers of Attorney
28 Additional Exhibits: Not Applicable
29 Information from reports furnished to state
insurance regulatory authorities: Not Applicable
*The Company's Registration Statement on Form S-1 dated April 11, 1986
to which certain documents are incorporated by reference herein is
Registration No. 33-4774.