ITEM 1. BUSINESS.
INTRODUCTION
The registrant, Jacobson Stores Inc., a Michigan corporation, operates specialty department stores catering to discerning customers with preferences for fine merchandise. The Company emphasizes quality merchandise, fully staffed stores, personalized customer service and attractive, comfortable shopping surroundings. Each store features a full line of fashion apparel and accessories for women, men and children, and most offer accessories for the home.
The Company owns a substantial portion of the real property used in its business, primarily through its consolidated, wholly-owned real estate subsidiary, Jacobson Stores Realty Company ("Jacobson Realty"). The Company finances customer receivables through Jacobson Credit Corp. ("Jacobson Credit"), its consolidated, wholly-owned finance subsidiary. As used in this report, the terms "registrant", "Company" and "Jacobson's" refer to Jacobson Stores Inc. and its subsidiaries unless the context indicates otherwise.
Jacobson's operates in two regions, with stores in twenty-five cities in Michigan, Ohio, Indiana and Florida. The Company maintains separate staffs of buyers for each region in order to better respond to customers' lifestyles and merchandise preferences. The principal merchandising and distribution functions are performed through regional distribution facilities. Functions common to all stores, such as management coordination, sales promotion, data processing and accounting, are centralized at the corporate headquarters in Jackson, Michigan.
MERCHANDISE AND MARKETING
Merchandise. Jacobson's directs its primary merchandising and marketing efforts to discerning customers with preferences for fine merchandise. Stores are merchandised with a full line of fashion apparel and accessories for women, men and children, and most offer accessories for the home.
The percentage contribution to sales by major class of merchandise for the last three fiscal years was as follows:
The Company's beauty salons are operated under license agreements which provide for a commission based on sales of the licensee.
PERSONAL SERVICE. Jacobson's stores are fully staffed with knowledgeable salespeople to ensure that customers receive prompt personal attention. Jacobson's salespeople are experienced and well-trained through video presentations, seminars and close working relationships with buyers and merchandise managers. Salespeople maintain personal trade lists of their customers' sizes, colors, fashion preferences, and important dates, and contact customers by telephone or personal note to alert them to the arrival of new merchandise or to remind them of birthdays or anniversaries. Management believes that personal relationships between salespeople and their clientele promote customer loyalty and contribute to the Company's growth. Other special services include free gift wrapping and free parking. All regularly scheduled Jacobson's salespeople are compensated on some form of commission program.
SALES PROMOTION. The Company uses newspaper, radio, television and direct mail advertising, as well as in-store events and billing statement enclosures, to stimulate sales. Advertising generally is institutional and focuses on current fashions and merchandise classifications. The Company's policy is to price merchandise fairly and competitively and to avoid sale events other than end-of-season clearances. Although advertisements usually mention price, Jacobson's refrains from comparative pricing (comparing the advertised price to a higher original price) in its advertising. Management believes that this practice enhances credibility and customer loyalty. Jacobson's in-store events include fashion shows and wardrobing seminars to communicate fashion trends to customers.
STORE DESIGN. Jacobson's stores are designed to project an attractive, comfortable atmosphere similar to the style customers find in their own homes. All aspects of the store interiors and fixturing are coordinated by the Company's store planning personnel, using quality fixtures, carpeting, lighting and displays.
CREDIT POLICY
Jacobson's issues its own credit card as a customer service. The Company offers two credit plans to its cardholders: an option plan requiring a minimum monthly payment of 20% of the outstanding balance, and an extended payment plan available primarily for furs, fine jewelry, and furniture purchases in the Company's stores which carry furniture (see "General Development of Business" on page 6).
Sales under Jacobson's credit plans averaged 50.6% of sales for the last three fiscal years and accounted for 48.4% of the Company's sales in fiscal 1993. In addition, sales under third party credit cards (VISA, MasterCard and American Express) averaged 29.0% of sales for the last three fiscal years and accounted for 31.6% of the Company's sales in fiscal 1993. Credit losses relating to the Company's credit card have averaged 0.52% of credit sales over the last three years (ranging from 0.40% to 0.61%).
The Company maintains purchasing and payment history on its 306,000 active account holders, which permits targeting of direct mail advertising and automatic increases of credit limits.
OPERATIONS
The Company operates in two regions, the Midwest and Florida. The principal merchandising and distribution functions for the Michigan, Ohio and Indiana stores are performed at the Company's central distribution facility in Jackson, Michigan. The principal merchandising and distribution functions for the Florida stores are performed in Winter Park, Florida. Functions common to all stores, such as management coordination, sales promotion, data processing and accounting, are centralized at the corporate headquarters in Jackson, Michigan.
Jacobson's stores in Michigan are located in Birmingham, Dearborn, Grosse Pointe, Livonia and Rochester (all suburbs of Detroit), Ann Arbor, East Grand Rapids, East Lansing, Jackson, Kalamazoo and Saginaw; in Ohio, in Columbus and Toledo; in Indiana, in Indianapolis; and in Florida, in Clearwater, Fort Myers, Jacksonville, Longwood, Naples, North Palm Beach, Osprey, Sarasota, Tampa and Winter Park. In addition, the Company has a clearance center in Troy, Michigan, a suburb of Detroit. Stores in Michigan, Ohio and Indiana range from 101,000 to 210,000 square feet, except for the clearance center, which is 34,000 square feet. The Florida stores range from 23,000 to 90,000 square feet.
In most of its stores, Jacobson's maintains a policy of limited evening hours, except during the holiday season. Stores are generally open a maximum of 59 hours each week, except during the holiday season.
Annual sales, percentage increase in sales, average gross square footage of stores in operation during the fiscal year, and approximate sales per average gross square foot were as follows:
PURCHASING, CONTROL AND DISTRIBUTION OF INVENTORY
Jacobson's purchases merchandise from several thousand suppliers, no one of which accounted for as much as 3% of the Company's net purchases during fiscal 1993. The Company maintains separate staffs of buyers for its Midwest and Florida stores to better respond to customer lifestyles and merchandise preferences. Merchandising decisions are directed by 3 general merchandise managers, 11 divisional merchandise managers, 76 buyers and 13 assistant buyers. In addition, the Company is a member of Frederick Atkins, Inc., a domestic and foreign buying office serving approximately 30 retailers, which provides merchandising counsel, product information, direct store import capability, and other services.
An on-line computerized merchandise information system provides the Company's buyers with detailed reports of current sales and inventory levels for each store, by department, vendor, class, style, color and size. This system permits the Company's merchandising staff to analyze trends on a daily basis, to identify fast-selling and slow-selling merchandise and to respond to customer buying preferences when making reorder and markdown decisions.
Merchandise is generally shipped directly from vendors to the Company's regional distribution centers in Jackson, Michigan and in Winter Park, Florida, where it is inspected for quality by the Company's buyers, priced and shipped to the stores by Jacobson's fleet of trucks.
Jacobson's adopted the LIFO method of inventory valuation in 1968. At the end of fiscal 1993, LIFO reserves totalled $19,839,000, or approximately 19.7% of pre-LIFO inventory values. Physical inventories are taken at least once each year. Inventory shrinkage at retail over the past three fiscal years has averaged 2.2% to owned retail sales.
EXPANSION
Jacobson's current strategy is to open one new store each year, to the extent feasible, and to renovate one store each year.
In September 1993, the Company relocated its Ann Arbor, Michigan store to a 101,000 square foot building and related parking area in Briarwood Mall. The Company owns its building and related parking area.
The Company has signed a lease for a 161,000 square foot store and related parking area in Oxmoor Center, Louisville, Kentucky, for a November 1994 opening.
The Company intends to continue expanding its operations in its Midwest and Florida regions as desirable opportunities arise and resources permit.
REAL ESTATE POLICY
Jacobson's strategy is to own or obtain long-term leases of the real estate used in the operation of its business. Through Jacobson Realty, the Company owns approximately 72% of the total square footage used in its business. The Company uses cash flow equal to depreciation to maintain a continuing program of property improvements and renewal of existing stores and support facilities. New stores and major expansion projects generally are financed by mortgage loans or comparable financing, or through long-term leases. At January 29, 1994, mortgage loans and related secured financings comprised approximately 47% of consolidated debt.
COMPETITION
The specialty department store business is highly competitive. The Company's stores are in active competition with other department and specialty stores and with regional and national department store chains, some of which are considerably larger than the Company and have substantially greater financial and other resources. Jacobson's competes principally on the basis of availability of fashion merchandise, quality, personalized service and attractive store surroundings, as well as fair pricing and advertising. The Company believes it is a respected retail merchandiser in the communities it serves, and that its merchandising policies and reputation enable it to maintain its competitive position.
EMPLOYEES
Jacobson's believes that its employees are among its key resources. Management stresses development programs for employees and promotion from within. The Company employs approximately 5,200 employees, 4,000 full-time and 1,200 part-time. During the holiday season, the number of employees increases to approximately 5,900.
From February to June 1992, the Company sustained a strike of 225 employees at its Central Distribution Center in Jackson, Michigan. The Company hired 75 permanent replacements. During fiscal 1993, the Company experienced picketing at some of its stores, and has responded to unfair labor practice charges filed by the Teamsters with the National Labor Relations Board.
At the date of filing this report, the terms of a new contract have been agreed on and ratified by the local union members.
- - - - -
(a) GENERAL DEVELOPMENT OF BUSINESS.
Some of the principal developments in Jacobson's business during fiscal 1993 and the current year to date are summarized on page 5 of this report under the caption "Expansion." To finance this expansion, the Company has a 10-year term loan agreement which provides for borrowings of up to $40 million on an unsecured basis. At January 29, 1994, the Company had borrowed $20 million under this facility. In addition, the Company's wholly-owned finance subsidiary has an unsecured line of credit of $35 million under a 3-year revolving credit agreement.
In August 1993, the Company announced its decision to phase out furniture departments in six stores, in order to provide increased space for fashion apparel, accessories and home decorative departments. Furniture had comprised less than 2% of Company-wide annual sales. The six stores affected were Birmingham, Dearborn, East Lansing, Jackson, Kalamazoo and Livonia, Michigan. The phase-out of furniture operations in these six stores was completed in November 1993.
At fiscal year-end, furniture inventories had been reduced to 25% of July 1993 furniture inventory levels, and were 1.0% of total Company inventory levels. Furniture departments will remain in the Company's Saginaw, Michigan and Sarasota, Florida stores.
(b) INDUSTRY SEGMENTS AND LINES OF BUSINESS.
Jacobson's operates in a single industry, the specialty department store industry.
The percentage contribution to sales by major classes of merchandise for each of the last three fiscal years is set forth on page 2 of this report.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
The nature of Jacobson's business, the categories of merchandise it sells, and the percentage contribution to sales by merchandise categories during the past three fiscal years, are set forth on pages 1-2 of this report.
The specialty department store business is seasonal. The holiday season (from the day after Thanksgiving to January 1) generally accounts for 15-20% of Jacobson's net sales.
By reason of the seasonal nature of the business, Jacobson's and others in the industry experience significant build-up of inventory and accounts receivable at certain times of the year. To support the seasonal requirements, Jacobson Credit has an unsecured line of credit of $35,000,000 under a revolving credit agreement. Further information on this line of credit is set forth in the Notes to the Company's Consolidated Financial Statements for the three fiscal years ended January 1994, filed as part of this report (see "Financing" on page).
Competitive conditions in the specialty department store business are discussed on page 5 of this report.
Information with respect to the Company's employees is provided on pages 5-6 of this report.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES.
The registrant has no foreign operations and no material export sales.
ITEM 2.
ITEM 2. PROPERTIES.
(a) The following table shows the location and approximate size of Jacobson's stores and its offices and principal warehouse and distribution facilities; whether owned by the registrant or leased; and the expiration dates (including renewal options) of principal real estate leases. Most such owned properties are subject to mortgage. In several cities, the store consists of two or more buildings.
Jacobson's management considers that these properties, as well as its furniture, fixtures, machinery and equipment, are well maintained, suitable and adequate for their intended purposes, and in general fully utilized.
(1) Approximately 28,000 square feet owned; balance leased. (2) Building is owned; approximately half of land is owned and half leased. (3) Approximately 29,000 square feet leased from month to month; balance owned. (4) Birmingham Fashion Apparel Store (98,000 square feet) is owned. The Men's Store and Store for the Home (81,000 square feet) include approximately 64,000 square feet owned; the balance is leased. The Children's Store (31,000 square feet) is leased from an 80%-owned subsidiary of Jacobson Stores Realty Company; see Exhibit 21.
(5) Kalamazoo Apparel Store (83,000 square feet) is leased pursuant to lease purchase contract with The Economic Development Corporation of the City of Kalamazoo. The Store for the Home (48,000 square feet) is leased. (6) Approximately 71,000 square feet and related parking area are owned. The balance of the shopping center is leased, of which 35,000 square feet are operated as part of Jacobson's store. (7) Building is owned on leased land. (8) Building is owned; land and parking area are leased.
(b) Not applicable.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
No material legal proceedings are pending to which Jacobson Stores Inc. or any of its subsidiaries is a party or to which any of their property is subject, other than ordinary routine litigation incidental to the registrant's business, and no such proceeding is known by the registrant to be contemplated.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT.
The table below sets forth the name and age of each executive officer of the registrant, all positions and offices with Jacobson Stores Inc. and its wholly-owned subsidiaries held by each such person, and the period during which the officer has served in such positions. Each has been elected to hold office until the 1994 Annual Meeting or until a successor is elected and qualified.
*Mr. Forman retired as Senior Vice President- General Merchandise Manager in February 1994.
There is no arrangement or understanding between any of the officers and any other person pursuant to which the officer was selected as an officer.
Each executive officer except Mr. Kelly and Mr. Kolman has held managerial or executive positions with Jacobson's for more than five years.
Before joining Jacobson's as Senior Vice President - General Merchandise Manager in February 1994, Mr. Kelly was Chairman and Chief Executive Officer, Marshall Field & Co., 1978-83, President, Mallard's Enterprises, Inc., 1984-1992, and Chief Operating Officer, Brands of Indiana, 1993-1994.
Before joining Jacobson's in 1990, Mr. Kolman was Senior Vice President and General Merchandise Manager, Robinson's of Florida, Inc., 1982-1987, and Assistant to the Chief Executive Officer, Cohoes Specialty Stores, 1987-1990. He was General Merchandise Manager-Home Furnishings Division, Jacobson Stores Inc., from 1990 to 1991, and has been Senior Vice President-General Merchandise Manager since May 1991.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded on the NASDAQ National Market, under the symbol "JCBS."
The quarterly range of high and low price quotations of Jacobson's Common Stock and dividends paid per share are shown in the following schedule:
The approximate number of shareholders of Jacobson common stock of record as of March 1, 1994 was 1,485.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for fiscal 1989 through 1993 is as follows:
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table shows the percentage relationship to sales of the items presented for the periods indicated.
1993 versus 1992
Sales in 1993 totalled $403,816,000, a decrease of 1.9% from 1992. The 1992 fiscal year included 53 weeks. On an equivalent 52 week basis, 1993 sales increased 0.1% and comparable store sales decreased 2.0%.
Women's apparel and accessories represented 64.6% of the Company's total business in 1993. Other major components were men's 12.5%, home accessories 9.5%, children's 9.1% and miscellaneous 2.4%. Leased department sales amounted to 1.9% of net sales in 1993.
The Company's gross profit percentage increased to 33.9% in 1993 from 33.7% in 1992, reflecting a higher markup percentage and lower markdowns. These improvements were partially offset by occupancy costs associated with a new store opened in November 1992 and higher inventory shortage. The 1993 LIFO benefit (including liquidation of most furniture LIFO reserves, as discussed below) reduced cost of merchandise sold by $181,000. The 1992 LIFO benefit totalled $201,000.
Selling, general and administrative expenses, as a percentage of sales, were 31.1% compared to 30.4% in 1992. This increase is due primarily to the decrease in sales and resulting lack of expense leverage. Selling, general and administrative expense dollars were essentially unchanged from 1992, principally reflecting the impact of one less week in 1993 and a reduction in health care expenses.
Interest expense in 1993 was substantially unchanged from 1992. The first full year impact of interest on $20,000,000 borrowed in November 1992 under the Company's term loan facility was offset by lower interest on real estate debt and interest capitalized on construction projects.
The Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", as of the beginning of the 1993 fiscal year. Adoption had an immaterial impact on net earnings.
1993 net earnings totalled $3,014,000 or 52 cents per common share, compared to 1992 net earnings of $3,910,000 or 68 cents per share. As a percentage of sales, net earnings were 0.7% in 1993 as compared to 0.9% in 1992.
Net earnings in 1993 include an after-tax gain on sale of property of $636,000 or 11 cents per share.
In the Fall 1993, the Company phased out furniture departments in six stores to provide increased space for fashion apparel, accessories and home decorative departments. Furniture comprised less than 2 percent of Company-wide annual sales. Operating results for 1993 include a $1,400,000 reduction in the LIFO provision to reflect liquidation of most furniture LIFO reserves, largely offset by a charge to write down furniture inventories to net realizable value. The impact on net earnings was immaterial.
1992 versus 1991
Sales in 1992 totalled $411,631,000, an increase of 4.0% over 1991. Comparable store sales increased 2.9%. The 1992 fiscal year included 53 weeks. On an equivalent 52 week basis, the total sales gain was 2.4% and comparable store sales increased 1.4%. The 1992 comparable store sales increase reflects a sluggish economy, particularly in Michigan, with moderate price inflation primarily responsible for the reported sales gain.
Women's apparel and accessories represented 64.3% of the Company's total business in 1992. Other major components were men's 12.6%, home accessories 9.3%, children's 9.3%, and miscellaneous 2.5%. Leased department sales amounted to 2.0% of net sales in 1992.
The Company's gross profit percentage was 33.7% in 1992, down from 34.0% in 1991. This change reflects higher markdown levels and inventory shortage, the result of a sluggish economy and the general business activity level in Michigan stores, and of a four-month strike by distribution center employees and truck drivers in the Company's Jackson, Michigan, central distribution facility from February through May. This work stoppage delayed receipt of seasonal merchandise in the Company's Midwestern stores, resulting in significantly higher markdowns throughout the Spring/Summer season and into the early Fall. These additional costs were substantially offset by a LIFO benefit which reduced cost of merchandise sold by $201,000 in 1992 compared to a LIFO charge of $2,076,000 in 1991.
Selling, general and administrative expenses, as a percentage of sales, were 30.4% in 1992 compared to 30.3% in 1991. This change was primarily associated with increased health care expense offset by lower operating payrolls.
Interest expense decreased in 1992 from 1991, resulting from the March 1992 redemption of the Company's $10,000,000 10% Subordinated Debentures, partially offset by interest on $20,000,000 borrowed by the Company in November 1992 under its term loan facility and by lower short-term investment income.
1992 net earnings totalled $3,910,000 or 68 cents per common share, compared to 1991 net earnings of $4,218,000 or 73 cents per common share. As a percentage of sales, net earnings were 0.9% in 1992 as compared to 1.1% in 1991.
INFLATION
The Company cannot determine the precise effects of inflation on its business. Because of inflation, the Company experienced increases in the cost of merchandise and in certain operating expenses. The Company generally has been able to offset the effects of these increased expenses by adjusting prices, by using the LIFO method for valuing all merchandise inventories and by controlling expenses. The Company's ability to adjust prices is limited by competitive pressures in its market areas. The Department Store Inventory Price Indexes, published by the Bureau of Labor Statistics, are used to measure inflation's impact on inventories in the LIFO valuation. The BLS Index increased 1.3% overall in 1993, 0.6% in 1992, and 2.3% in 1991.
LIQUIDITY AND CAPITAL RESOURCES
At January 29, 1994, the Company's current ratio was 3.13 to 1 and working capital totalled $93,348,000, including $5,899,000 of cash and cash equivalents. At January 30, 1993, the current ratio was 3.07 to 1 and working capital totalled $100,779,000, including $8,301,000 of cash and cash equivalents. At January 25, 1992, the current ratio was 2.96 to 1 and working capital approximated $92,215,000, including $5,111,000 of cash and cash equivalents.
The Company utilizes cash flows from operations and short-term borrowings to fund its seasonal working capital needs. To support its seasonal requirements, the Company maintains a $35,000,000 unsecured revolving credit line through its consolidated, wholly-owned finance subsidiary, Jacobson Credit Corp. This facility provides for either or both of two interest rate alternatives. At January 29, 1994, no borrowings were outstanding under this facility. The Company also maintains a 10-year term loan facility which provides for borrowings of up to $40,000,000 on an unsecured basis at market rates in effect at the time of such borrowings. At January 29, 1994, the Company had borrowed $20,000,000 under this facility. These facilities provide sufficient capacity to fund present and anticipated working capital requirements.
A part of the Company's financial strategy is to own, or obtain long-term leases of its properties. Capital expenditures to modernize and refixture existing stores and support facilities generally are financed with internally-generated funds. New stores and major expansion projects generally are financed by first mortgages or comparable financing through the Company's consolidated, wholly-owned real estate subsidiary, Jacobson Stores Realty Company, or through long-term leases. Future expansion is expected to be financed in a similar manner.
CASH FLOWS
Cash and cash equivalents decreased $2,402,000 in 1993, increased $3,190,000 in 1992 and decreased $1,415,000 in 1991. Cash flows are impacted by operating, investing and financing activities. In 1993, operating activities provided $16,303,000 of cash, up from $7,684,000 in 1992 and $14,623,000 in 1991. The increase in 1993 versus 1992 reflects principally reductions in inventory levels, including discontinuance of most furniture departments. The reduction in 1992 versus 1991 reflects primarily start-up working capital requirements for a new store opened in late 1992.
Investing activities used cash of $18,263,000, $8,381,000 and $5,092,000 in 1993, 1992 and 1991, respectively. Investing activities included capital expenditures for the acquisition and fixturing of new stores, and expansion, modernization and refixturing of existing stores and support facilities totalling $17,519,000, $6,034,000 and $3,619,000 in 1993, 1992, and 1991, respectively. In addition, the Company incurred capital lease obligations (not included in cash investing activities above) primarily for computer hardware and related software totalling $1,085,000, $1,257,000 and $2,143,000 in 1993, 1992 and 1991, respectively.
Financing activities used cash of $442,000 in 1993, provided cash of $3,887,000 in 1992 and used cash of $10,946,000 in 1991. In 1993, the Company obtained $8,000,000 first mortgage financing, and used $5,552,000 of cash to service current maturities of long-term debt and to retire the mortgage debt on its former downtown store facility in Ann Arbor. The Company borrowed $20,000,000 in 1992 at a fixed rate of 7.73% under its term loan facility, and used $13,224,000 of cash to redeem its $10,000,000 10% Subordinated Debentures due April 1993 and to service current maturities of long-term debt. In 1991, the Company retired a $5,000,000 unsecured Term Loan at maturity and used $3,056,000 of cash to service current maturities of long-term debt. The Company paid common stock dividends of $2,890,000 in each of 1993, 1992 and 1991.
The Company believes its cash flows from operations, along with its borrowing capacity and access to financial markets are adequate to fund its operations, debt maturities and strategies for future growth.
CORPORATE DEVELOPMENT
The Company's strategy is to achieve consistent, long-term growth both by maintaining and improving market share in its existing communities and by entering new markets.
In 1992, the Company completed a 37,000 square foot expansion of its Florida regional distribution center using internally generated funds and opened a 46,000 square foot leased store in a new shopping center, Waterside Shops at Pelican Bay, Naples, Florida.
In January 1993, the Company purchased a 101,000 square foot building and related parking in Briarwood Mall, Ann Arbor, Michigan, and relocated its store operations to that location in September 1993. The Company obtained mortgage financing to fund the purchase and renovation of the Briarwood store. The Company sold its interest in its former downtown store facility.
In March 1994, the Company signed a lease for a 161,000 square foot building and related parking in the Oxmoor Center, Louisville, Kentucky. The Company is currently renovating the building and plans to open the store in November 1994.
An Equal Employment Opportunity Commissioner's Charge was filed against the Company in June 1984, alleging discriminatory recruiting and hiring practices in three of the Company's stores. In September 1992, the Commission issued its determination that there was reasonable cause to believe that the Company had engaged in certain unlawful employment practices at those three locations in violation of Title VII of the Civil Rights Act of 1964. In June 1993, the Company and the Commission executed a Conciliation Agreement to settle the Charge. The settlement did not have a material effect on the Company's operating results and financial condition.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following financial statements and supplementary financial information are filed as part of this report on pages through and S-1 through S-5:
Consolidated Statements of Earnings, Three Fiscal Years Ended January 29, 1994.
Consolidated Statements of Cash Flows, Three Fiscal Years Ended January 29, 1994.
Consolidated Balance Sheets, January 29, 1994, January 30, 1993, and January 25, 1992.
Consolidated Statements of Shareholders' Equity, Three Fiscal Years Ended January 29, 1994.
Notes to Consolidated Financial Statements.
Summary of Significant Accounting Policies.
Report of Independent Public Accountants.
Quarterly Information (Unaudited).
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information called for by Part III is incorporated by reference from those portions of the registrant's definitive proxy statement for its 1994 Annual Meeting of Shareholders to be held May 26, 1994, filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K, appearing under the following captions:
"Voting Securities and Principal Holders Thereof" (pages 1-3, inclusive, of the proxy statement).
"Election of Directors" (pages 3-7, inclusive, thereof).
"Executive Compensation" (pages 8-11, inclusive, thereof); but excluding from this incorporation by reference everything appearing under the captions "Organization and Compensation Committee Report on Executive Compensation" and "Performance Graph" (pages 11-13, inclusive, thereof).
For the purpose of stating the aggregate market value of voting stock held by non-affiliates, on the cover of this report, the registrant considers that the directors of the registrant, the executive officers listed on pages 9-10 of this report, Marjorie L. Rosenfeld, David A. Rosenfeld, the Jacobson's Retirement Savings and Profit Sharing Plan, the Jacobson Pension Plan, and The Jacobson Stores Foundation are affiliates, and that all other shareholders are non-affiliates. This statement is without prejudice to the classification of any shareholder at other times or for other purposes.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following financial statements, financial statement schedules, and exhibits are filed as part of this report:
All schedules, except those set forth above, have been omitted since the information required to be submitted has been included in the consolidated financial statements or notes thereto or has been omitted as not applicable or not required.
In addition, the previously-filed exhibits listed below are incorporated herein by reference. (All references are to Securities and Exchange Commission File #0-6319 unless otherwise noted.)
With the exception of Exhibits 4(b), 4(d) and 4(e), instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries have been omitted. The amount of debt authorized under each such instrument is less than 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
In addition to Exhibits 10(a) to 10(d), inclusive, and 10(f), the registrant has employment agreements with four other executive officers, which are not considered material in amount or significance.
(b) The registrant did not file any report on Form 8-K during the last quarter of the period covered by this report.
(c) See Item 14(a) (3).
(d) See Item 14(a) (2).
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.
DATE: April 14, 1994 JACOBSON STORES INC.
By: /s/ Mark K. Rosenfeld -------------------------- Mark K. Rosenfeld, Chairman of the Board and Chief Executive Officer
By: /s/ Paul W. Gilbert -------------------------- Paul W. Gilbert, Vice Chairman of the Board (Principal Financial Officer)
By: /s/ Timothy J. Spalding -------------------------- Timothy J. Spalding, Vice President and Controller (Principal Accounting Officer)
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.
JACOBSON STORES INC. Date
By: /s/ Mark K. Rosenfeld April 14, 1994 --------------------------- Mark K. Rosenfeld, Chairman of the Board and Chief Executive Officer, and Director
By: /s/ Paul W. Gilbert April 14, 1994 ----------------------------- Paul W. Gilbert, Vice Chairman of the Board, and Director
By: /s/ James B. Fowler April 14, 1994 ------------------------------ James B. Fowler, President and Director
JACOBSON STORES INC. Date
By: /s/ Herbert S. Amster April 14, 1994 ----------------------------- Herbert S. Amster, Director
By: /s/ Frank Couzens, Jr. April 14, 1994 ----------------------------- Frank Couzens, Jr., Director
By: /s/ J. R. Fowler April 14, 1994 ----------------------------- J. R. Fowler, Director
By: /s/ Herman S. Kohlmeyer, Jr. April 14, 1994 ----------------------------- Herman S. Kohlmeyer, Jr., Director
By: /s/ Kathleen McCree Lewis April 14, 1994 ----------------------------- Kathleen McCree Lewis, Director
By: April 14, 1994 ----------------------------- Patricia Shontz Longe, Director
By: /s/ Michael T. Monahan April 14, 1994 ----------------------------- Michael T. Monahan, Director
By: /s/ Philip H. Power April 14, 1994 ----------------------------- Philip H. Power, Director
By: /s/ Richard Z. Rosenfeld April 14, 1994 ----------------------------- Richard Z. Rosenfeld, Director
By: /s/ Robert L. Rosenfeld April 14, 1994 ----------------------------- Robert L. Rosenfeld, Director
By: /s/ James L. Wolohan April 14, 1994 ----------------------------- James L. Wolohan, Director
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
The accompanying notes (pages through) and summary of significant accounting policies (page) are an integral part of these statements.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SUPPLEMENTARY CASH FLOW INFORMATION
The Company considers all short-term investments with a maturity at date of purchase of three months or less to be cash equivalents.
Investing and financing activities not reported in the Consolidated Statements of Cash Flows, because they do not involve cash, include equipment acquired through capital lease obligations of $1,085,000 in 1993, $1,257,000 in 1992 and $2,143,000 in 1991.
Interest paid (net of interest capitalized) was $7,165,000 in 1993, $7,218,000 in 1992 and $7,995,000 in 1991. Income tax payments were $753,000 in 1993, $1,670,000 in 1992 and $2,235,000 in 1991.
The accompanying notes (pages through) and summary of significant accounting policies (page) are an integral part of these statements.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
The accompanying notes (pages through) and summary of significant accounting policies (page) are an integral part of these statements.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
PREFERRED STOCK Authorized 1,000,000 shares, $1 par value; no shares outstanding at January 25, 1992, January 30, 1993 and January 29, 1994.
COMMON STOCK Authorized 15,000,000 shares, $1 par value; 5,966,141 shares issued at January 25, 1992, and 5,966,221 shares issued at January 30, 1993 and January 29, 1994. Shares issued include 187,200 shares in treasury at January 25, 1992, January 30, 1993 and January 29, 1994.
The accompanying notes (pages through) and summary of significant accounting policies (page) are an integral part of these statements.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTEREST EXPENSE
CUSTOMER Credit sales under Jacobson credit plans were 48.4% of CREDIT AND total sales in 1993, 50.7% in 1992 and 52.8% 1991. RECEIVABLES Credit plans consist of option and extended payment accounts.
The finance charge rate assessed under the Company's credit plans has remained unchanged for 1993, 1992 and 1991. Allocated interest expense is computed at the average rate of interest incurred by Jacobson Credit Corp. (the Company's consolidated, wholly-owned finance subsidiary) applied to the average total receivables from customers. The average rate was 3.8% in 1993, 4.0% in 1992 and 6.3% in 1991.
Accounts written off, net of recoveries, were $791,000 in 1993, $1,115,000 in 1992 and $1,272,000 in 1991 (0.40%, 0.53% and 0.61%, respectively, of credit sales).
MERCHANDISE INVENTORIES
The change in LIFO reserves from January 1993 to January 1994 includes a $1,400,000 liquidation of most furniture LIFO reserves as a result of the Company's phase-out of furniture departments in six stores in 1993.
PROPERTY AND EQUIPMENT
Depreciation and amortization amounted to $9,404,000 in 1993, $8,865,000 in 1992 and $8,877,000 in 1991.
CAPITAL AND MAINTENANCE EXPENDITURES
Stores and store modernization expenditures include those made for the acquisition of land, buildings and improvements, and related fixtures and equipment for new stores and expansion and re-fixturing of existing stores. Support facilities and equipment expenditures relate to corporate office and distribution centers and other non-store expenditures.
Repairs and maintenance expense totalled $1,737,000 in 1993, $1,630,000 in 1992 and $1,621,000 in 1991.
LONG-TERM At January 29, 1994, the Company was obligated under LEASES non-cancellable long-term leases for certain stores or portions of stores, and for certain fixtures and equipment. Many of the leases contain renewal options. Most require payment of taxes, insurance, and other costs applicable to the property, and some require additional rentals based on percentages of sales.
Capital leases provide the Company with the economic benefits and risks of ownership. These leases are capitalized and treated as installment purchases of depreciable property. Capital leases are included in the balance sheets as property and equipment while the related lease obligations are included in current portion of long-term debt. Interest based on these obligations and amortization based on the lease terms are charged to current operations in lieu of rental expense.
All other leases are considered operating leases. Operating leases are accounted for by recording rental expense over the terms of the leases. Additional rentals based on percentages of sales are recorded as rental for both capital and operating leases.
FINANCING Jacobson Credit Corp. has available an unsecured line of credit of $35,000,000 under a three year Revolving Credit Agreement with two banks. The Agreement provides for either or both of two interest rate alternatives, at the Company's option, which historically are below the prime rate of interest of the lending banks. Borrowings under this Agreement mature on June 30, 1996. On each June 30, this maturity date extends one year unless terminated by written notice. The Agreement requires a facility fee equal to 1/4 of 1% of the line per annum. Compensating balances are not required. There were no borrowings outstanding under the Agreement at January 29, 1994.
The 6-3/4% Convertible Subordinated Debentures are convertible to shares of the Company's common stock at any time prior to maturity, unless previously redeemed, at $32.67 per share, subject to adjustment in certain events. The debentures are redeemable, in whole or in part, at the option of the Company at declining premiums to December 15, 1996, and thereafter at par. Mandatory annual sinking fund payments of $1,725,000 are required beginning December 15, 1996. At January 29, 1994, 1,056,000 shares of authorized common stock were reserved for conversion.
The Company has a ten-year Term Loan Agreement with two banks which provides for borrowings of up to $40,000,000 on an unsecured basis at market rates in effect at the time of such borrowings. The Term Loan Agreement provides for payments of interest only through December 31, 1995, with quarterly principal repayments commencing March 31, 1996. The Company has $20,000,000 outstanding under this facility at January 29, 1994 at a fixed rate of 7.73%.
Loan agreements include, among other things, covenants requiring minimum working capital, minimum net worth and minimum cash flow and restricting capital stock redemptions and dividend payments. Under the most restrictive net worth covenant, at January 29, 1994, $9,051,000 was available for capital stock redemptions and dividend payments.
Based on the quoted market price of the 6-3/4% Convertible Subordinated Debentures due 2011 and on the current rates offered to the Company for other long-term debt of similar remaining maturities, the estimated fair value of total long-term debt, excluding capital lease obligations, was less than the carrying value by approximately $5,700,000 at January 29, 1994 and $3,300,000 at January 30, 1993.
ACCRUED EXPENSES
GAIN ON SALE In 1993, the Company relocated its Ann Arbor, Michigan, store OF PROPERTY operations to the Briarwood Mall and sold its interest in its downtown store facility at an after-tax gain of $636,000.
STOCK OPTIONS At January 29, 1994, 153,160 shares of Jacobson Stores Inc. common stock were reserved for issuance under a stock option plan adopted in 1983. The option price is not less than the fair market value at the date of grant. After December 4, 1993, no more options may be granted under this plan. The Company's shareholders will be asked to approve a proposed new stock option plan at the 1994 Annual Meeting of Shareholders.
PREFERRED The Company has a Preferred Stock Purchase Rights Plan, under STOCK which a Right is attached to each share of the Company's Common PURCHASE Stock. Each Right entitles the registered holder to purchase RIGHTS from the Company one one-hundredth of a share of Series A Preferred Stock at an exercise price of $100, subject to adjustment. The Company has reserved 100,000 shares of Series A Preferred Stock for issuance on exercise of the Rights. The Rights trade with the Company's Common Stock and will become exercisable 10 days after any person or group acquires 25% or more of the Company's Common Stock, or commences or announces an offer for 30% or more of the Company's Common Stock. After the Rights become exercisable, if the Company is acquired in a merger or other business combination or if 50% or more of its assets or earning power are sold, each Right will entitle the holder to purchase, at the then current exercise price of the Right, shares of common stock of the acquiring company having a market value of twice the exercise price of the Right. Alternatively, if a 25% shareholder acquires the Company by means of a reverse merger in which the Company and its stock survive, or if such shareholder engages in self-dealing transactions with the Company or acquires beneficial ownership of 40% or more of the Company's Common Stock other than by means of a fair offer to buy all shares, each Right (except those of the acquiring person or group) will entitle its holder to purchase, on exercise, shares of the Company's Common Stock having a market value of twice the current exercise price of each Right. The Rights may be redeemed by the Company for one cent per Right until 30 days after a person or group acquires 25% or more of the Company's Common Stock, and will expire on October 25, 1998.
RETIREMENT The Company has a trusteed non-contributory defined benefit PLANS pension plan covering substantially all of its employees. Benefits under the plan are based on a career average pay formula. Service cost and the projected benefit obligation under the projected unit credit actuarial method reflect the impact of estimated increases in compensation on future pension benefits. Unrecognized pension costs and credits, including actuarial gains and losses, are amortized over the average remaining service period of those employees expected to receive pension benefits. The Company has no unrecognized prior service cost. Pension expense was $1,160,000 in 1993, $1,083,000 in 1992 and $729,000 in 1991. The Company's funding policy satisfies the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986. Pension plan assets are held and managed by an independent trustee.
The Company contributed and charged to expense $339,000 in 1993, $171,000 in 1992 and $405,000 in 1991 for multi-employer pension plans. These contributions were determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. Under the provisions of the Multi-Employer Pension Plan Amendments Act of 1980, if the Company should substantially or totally withdraw from a multi-employer pension fund, it would be required to continue contributions to such plan to the extent of its portion of the plan's unfunded vested liability. Management has no plans to terminate operations that would subject the Company to such liability.
CONDENSED BALANCE SHEETS
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CHANGE IN ACCOUNTING POLICY. Effective January 31, 1993 (the first day of the fiscal year), the Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Adoption had an immaterial impact on net earnings.
BASIS OF REPORTING. Jacobson Stores Inc. operates specialty department stores in 25 cities in Michigan, Ohio, Indiana and Florida. The consolidated financial statements include the accounts of the Company and two wholly-owned subsidiaries, Jacobson Stores Realty Company and Jacobson Credit Corp. All significant inter-company transactions and balances have been eliminated.
FISCAL YEAR. The Company's fiscal year ends on the last Saturday in January. Fiscal years 1993 and 1991 consisted of 52 weeks and ended January 29, 1994 and January 25, 1992, respectively. Fiscal 1992 consisted of 53 weeks and ended January 30, 1993.
SALES. Sales are net of returns and include sales by leased departments. Restaurant and alteration revenues are reflected as a reduction of cost of merchandise sold. Finance charge revenues are recorded as income when earned and are reflected as a reduction of selling, general and administrative expenses.
RECEIVABLES FROM CUSTOMERS. An account is reviewed for write-off if payment of 20% (one full monthly payment) has not been received during the previous four month period or if it is otherwise determined that the account is uncollectible.
MERCHANDISE INVENTORIES. All merchandise inventories are valued at cost, which is lower than market, as determined by the retail last-in, first-out (LIFO) method.
PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost. Major replacements and improvements are charged to the property and equipment accounts. Maintenance, repairs and minor replacements are charged to expense as incurred. When assets are sold, retired, or fully depreciated, their cost and related accumulated depreciation and amortization are removed from the property and equipment accounts, and any gain or loss is reflected in the statements of earnings.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization are provided on the straight-line basis over the estimated useful lives of the property and equipment, or over the respective lease terms, if such periods are shorter.
CAPITALIZATION OF INTEREST. Interest expense incurred on properties under development is capitalized to reflect properly the costs of properties up to the time they produce revenues. The amounts capitalized are then amortized over the respective lives of the depreciable assets.
PRE-OPENING EXPENSES. Expenditures of a non-capital nature associated with opening a new store are charged to expense using the straight-line method in the twelve months immediately following the opening.
INCOME TAXES. Deferred income taxes result from differences between the tax basis of an asset or liability and its reported amount in the financial statements (temporary differences) and are adjusted for changes in tax laws and rates.
EARNINGS PER SHARE. Primary earnings per share are computed by dividing net earnings by the weighted average shares of common stock and common stock equivalents outstanding during the year. Weighted average shares outstanding, excluding treasury shares, were 5,779,117 in 1993, 5,785,187 in 1992 and 5,786,190 in 1991. Fully diluted earnings per share are computed based on the additional assumption that the Company's 6-3/4% Convertible Subordinated Debentures due 2011 were converted to common stock at the date of issuance with a corresponding increase in net earnings to reflect reduction in related interest expense, net of income taxes. Weighted average shares outstanding used in the computation of fully diluted earnings per share were 6,835,132 in 1993, 6,841,188 in 1992 and 6,846,379 in 1991.
FINANCIAL INSTRUMENTS. With the exception of long-term debt and shareholders' equity, the Company records all financial instruments, including cash equivalents, receivables from customers and accounts payable, at or in amounts approximating market value.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Jacobson Stores Inc.:
We have audited the accompanying consolidated balance sheets of JACOBSON STORES INC. (a Michigan corporation) and subsidiaries as of January 29, 1994, January 30, 1993, and January 25, 1992 and the related consolidated statements of earnings, shareholders' equity and cash flows for each of the three fiscal years in the period ended January 29, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jacobson Stores Inc. and subsidiaries as of January 29, 1994, January 30, 1993, and January 25, 1992 and the results of their operations and their cash flows for each of the three fiscal years in the period ended January 29, 1994, in conformity with generally accepted accounting principles.
As explained in the Notes to Consolidated Financial Statements, effective January 31, 1993, the Company changed its method of accounting for income taxes in accordance with SFAS No. 109, "Accounting For Income Taxes."
Detroit, Michigan March 4, 1994. /s/ ARTHUR ANDERSEN & CO.
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
QUARTERLY INFORMATION (unaudited)
OPERATING The unaudited quarterly operating results shown RESULTS below were prepared using the same accounting policies that are applied to the annual data.
The Company's business is seasonal in nature. Traditionally, a higher proportion of sales and net earnings is generated in the fourth quarter (which includes the Christmas season). The anticipated effective annual tax rate is used to compute income taxes on a quarterly basis. The gross margins used in calculating cost of goods sold for interim periods include an allocation of the estimated annual LIFO provision. This charge cannot be determined precisely until the year-end inventory value is known and the Bureau of Labor Statistics Department Store Index is published in late February.
The impact of LIFO on earnings per share as it was reported and as it would have been had the actual charge (benefit) been known when the quarterly allocations were made is shown below.
ARTHUR ANDERSEN & CO.
Report of Independent Public Accountants
To Jacobson Stores Inc.:
We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements of Jacobson Stores Inc. included in this Form 10-K as pages through and have issued our report thereon dated March 4, 1994. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in Item 14(a)(2) are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN & CO.
Detroit, Michigan March 4, 1994.
S-1 SCHEDULE V JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY AND EQUIPMENT
FOR THE THREE FISCAL YEARS ENDED JANUARY 29, 1994 (in thousands)
S-2 SCHEDULE VI
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE THREE FISCAL YEARS ENDED JANUARY 29, 1994 (in thousands)
S-3 SCHEDULE VIII
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE FISCAL YEARS ENDED JANUARY 29, 1994 (in thousands)
S-4 SCHEDULE X
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION
FOR THE THREE FISCAL YEARS ENDED JANUARY 29, 1994 (in thousands)
S-5 INDEX OF EXHIBITS
Exhibit - ------- 3(a) By-laws, Jacobson Stores Inc., as amended March 17, 1994
10(a) Employment Agreement dated March 23, 1994 between Jacobson Stores Inc. and Mark K. Rosenfeld
10(b) Employment Agreement dated March 23, 1994 between Jacobson Stores Inc. and Paul W. Gilbert
10(c) Employment Agreement dated March 23, 1994 between Jacobson Stores Inc. and James B. Fowler
10(d) Executive Employment Agreement dated March 26, 1994 between Jacobson Stores Inc. and Robert L. Moles
10(e) 1994 Management Incentive Plan
11 Computation of Earnings per Share
21 Schedule of subsidiaries
23 Consent of Arthur Andersen & Co.
In addition, the previously-filed exhibits listed below are incorporated herein by reference. (All references are to Securities and Exchange Commission File #0-6319 unless otherwise noted.)
E-1
With the exception of Exhibits 4(b), 4(d) and 4(e), instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries have been omitted. The amount of debt authorized under each such instrument is less than 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
In addition to Exhibits 10(a) to 10(d), inclusive, and 10(f), the registrant has employment agreements with four other executive officers, which are not considered material in amount or significance.
E-2