Back to GetFilings.com
1 of 94 pages
Exhibit Index
appears on Page 22
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- -----
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For fiscal year ended December 2, 1994
OR
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: 1-4404
THE STRIDE RITE CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-1399290
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
Five Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-491-8800
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock $.25 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required 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 report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
-Continued-
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.
The aggregate market value of the registrant's Common Stock $.25 par value, held
by non-affiliates of the registrant as of February 17, 1995, was $602,824,742
based on the closing price on that date on the New York Stock Exchange. As of
February 17, 1995, 49,541,864 shares of the registrant's Common Stock, $.25 par
value, were outstanding and 6,192,733 of the registrant's Preferred Stock
Purchase Rights, which trade together with the registrant's common stock, were
outstanding.
Documents Incorporated by Reference
Certain portions of the following documents (as more specifically identified
elsewhere in this Annual Report) are incorporated by reference herein:
Part of Form 10-K into
Name of Document which document is incorporated
- ----------------- ------------------------------
Portions of the Registrant's Annual
Report to Stockholders for fiscal year
ended December 2, 1994 Part I and Part II
Portions of the Registrant's Proxy
Statement for 1995 Annual Meeting
of Stockholders Part III
2
PART I
------
Item 1. Business
- ------ --------
General
- -------
The Stride Rite Corporation is the leading marketer of high quality
children's footwear in the United States and a major marketer of athletic and
casual footwear for children and adults. The Company manufactures products in
its own facilities in the United States and in the Dominican Republic and also
imports a significant portion of its products from abroad. Footwear products
are distributed through independent retail stores, Company-owned stores and
footwear departments in department stores. Unless the context otherwise
requires, the "Company" and "The Stride Rite Corporation" refer to The Stride
Rite Corporation and all of its wholly-owned subsidiaries.
Products
- --------
Children's footwear, designed primarily for consumers between the ages of
six months and 12 years, encompasses a complete line of products, including
dress and recreational shoes, boots, sandals and sneakers, in traditional and
contemporary styles. Those products are marketed under the Company's STRIDE
RITE(R) trademark in medium to high price ranges.
The Company also markets sneakers and casual footwear for adults and
children under the KEDS(R) and PRO-Keds(R) trademarks and casual footwear for
women under the GRASSHOPPERS(R) label.
Marine footwear and portions of the Company's outdoor recreational, dress
and casual footwear for adults and children are marketed under the Company's
SPERRY TOP-SIDER(R) trademark. Products sold under the SPERRY TOP-SIDER(R)
label also include sneakers and sandals for men and women.
The Company acquired, in the first quarter of fiscal 1995, the TODDLER
UNIVERSITY(R), KIDS UNIVERSITY(R) and STREET HOT(R) brands from the University
Brands division of Genesco Inc. The Company plans to market these brands
through its newly formed subsidiary, Boston Footwear Group, Inc.
Sales and Distribution
- ----------------------
During the 1994 fiscal year, the Company sold its products nationwide to
customers operating retail outlets, including department stores, sporting goods
stores and marinas, as well as Stride Rite Bootery stores and other shoe stores
operated by independent retailers. In addition, the Company sold footwear
products to consumers through Company-owned stores, including bootery stores,
manufacturers' outlet stores, a Keds store, a new concept store called Great
Feet(TM), and children's footwear departments in department stores. The
Company's largest single customer accounted for less than 6% of consolidated net
sales for the fiscal year ended December 2, 1994.
The Company provides assistance to a limited number of qualified specialty
retailers to enable them to operate independent Stride Rite children's bootery
stores. Such assistance sometimes includes the sublease of a desirable retail
site by the Company to a dealer. There are
3
approximately 60 independent dealers who currently sublease store locations from
the Company.
An automated distribution center located in Louisville, Kentucky provides
520,000 square feet of space and is owned by the Company. Reference is hereby
made to the section of the Company's annual report to stockholders entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations" for additional information concerning the
distribution center in Louisville, Kentucky. The Company also owns a central
warehouse in Boston, Massachusetts, which provides 565,000 square feet of space.
The Company closed, during the first quarter of fiscal year 1994, a warehouse
located in New Bedford, Massachusetts, consisting of approximately 742,000
square feet, which was leased by the Company.
The Company maintains an in-stock inventory of its various branded footwear
in a wide range of sizes and widths for shipment to its wholesale customers. It
is the Company's policy to attempt to ship promptly every order (except for
orders placed in advance of seasonal requirements) received for footwear
included in its in-stock inventory. This policy enables retailers to minimize
the amount of their capital invested in inventory, while providing the
availability of footwear for which customer demand exists. In accordance with
practices in the footwear industry, the Company encourages early acceptance of
merchandise by shipping some products to customers in advance of their seasonal
requirements and permitting payment for such merchandise at specified later
dates.
In fiscal 1994, in addition to the United States, KEDS(R) brand products
were distributed through third parties in Argentina, Brazil, Chile, Denmark,
England, France, Germany, Greece, Hong Kong, Israel, Japan, Portugal, Singapore,
Sweden and the United Kingdom, as well as in several other countries in Latin
America and Asia, using local distributors. KEDS(R) brand products were also
manufactured and sold by a distributor in Israel under a license agreement,
which terminated in 1994, and PRO-Keds(R) brand products are sold by a
distributor in Japan, also under a license agreement. Further, KEDS(R) products
are sold in Central America, Bolivia, Colombia, Ecuador, Peru, Venezuela and in
the Caribbean countries and territories (except the United States and French
territories) under a license agreement.
In fiscal 1994, in addition to the United States, the Company distributed
its SPERRY TOP-SIDER(R) brand products in Italy, Japan and the United Kingdom,
as well as other countries in Europe, South America and Asia, through local
distributors. During fiscal year 1993, the Company commenced operations to
distribute SPERRY TOP-SIDER(R) products in Belgium, France and the Netherlands,
through a subsidiary.
The Company is also a party to foreign license agreements in which
independent companies operate Stride Rite retail stores outside the United
States. An aggregate of 20 stores are currently operating in Canada, Costa
Rica, Guatemala, Honduras, Mexico and Peru. In addition, the Company also
distributes STRIDE RITE(R) brand products to several retailers in the Caribbean,
South Korea, Mexico and Panama.
The Company also distributes SPERRY TOP-SIDER(R), STRIDE RITE(R) and
KEDS(R) products in Canada through its Canadian subsidiary.
4
International Sourcing
- ----------------------
The Company purchases a significant portion of its product line overseas.
It maintains a staff of approximately 117 professional and technical personnel
in South Korea, Taiwan and Thailand, to supervise a substantial portion of its
canvas and leather footwear production. The Company is a party to a joint
venture agreement with a foreign footwear manufacturer which operates a
manufacturing facility in Thailand. The Company has a 49.5% interest in the
Thai corporation operating this facility, which manufactures vulcanized canvas
and leather footwear. During fiscal 1994, approximately 16% of the Company's
total production requirements for canvas and leather sneakers were fulfilled by
the Thai facility. In addition, the Company uses the services of buying agents
to source merchandise. In December 1994, the Company terminated its
relationship with one buying agent which sourced approximately 33% of the
Company's total production requirements in fiscal year 1994. The Company has
reopened its Taiwan office to perform the services formerly provided by the
buying agent.
Having closed several of its manufacturing facilities in the United States
and the Caribbean over the years, the Company has increased the volume of
leather footwear and leather footwear components for which it contracts from
independent offshore suppliers. It is anticipated that overseas resources will
continue to be utilized in the future. The Company purchases certain raw
materials (particularly leather) from overseas resources.
By virtue of its international activities, the Company is subject to the
usual risks of doing business abroad, such as the risks of expropriation, acts
of war, political disturbances and similar events, including trade sanctions,
loss of most favored nation trading status and other trading restrictions.
Management believes that over a period of time, it could arrange adequate
alternative sources of supply for the products obtained from its present foreign
suppliers. On February 4, 1995, the United States announced that it would, on
February 26, 1995, impose sanctions on China, relating to the export of numerous
products, including certain types of footwear, due to China's failure to enforce
its intellectual property rights. The Company believes that the sanctions will
not have a material adverse effect on it, even if the sanctions are implemented,
which is not certain. However, disruption of such sources of supply could,
particularly on a short-term basis, have a material adverse impact on the
Company's operations. The Company's contracts to procure finished goods and
other materials are denominated in United States dollars, thereby eliminating
short term risks attendant to foreign currency fluctuations.
Retail Operations
- -----------------
As of December 2, 1994, the Company operated 136 Stride Rite Bootery
stores, 103 leased children's shoe departments in leading department stores, one
retail store for KEDS(R) brand products, one new concept store operated under
the name GREAT FEET(TM) and 11 manufacturers' outlet stores for STRIDE RITE(R),
KEDS(R) and SPERRY TOP-SIDER(R) brand products. The product and merchandising
formats of the Stride Rite Bootery stores are utilized in the 103 leased
children's shoe departments which the Company operates in certain Macy's, Jordan
Marsh, Abraham & Straus, Rich's and Lazarus department stores. The Stride Rite
Bootery stores carry a complete line of the Company's STRIDE RITE(R) and SPERRY
TOP-SIDER(R) children's
5
footwear and a portion of the KEDS(R) children's product line. The Keds store,
in the Mall of America in Minneapolis, Minnesota, carries a complete line of
KEDS(R) products. The GREAT FEET(TM) store, in the Natick Mall, Natick,
Massachusetts, carries a full line of products for children aged 0 to 12,
including STRIDE RITE(R), KEDS(R) and SPERRY TOP-SIDER(R) brand products. The
stores are located primarily in larger regional shopping malls, clustered
generally in the major marketing areas of the United States. The manufacturers'
outlet stores are located in malls consisting only of outlet stores.
During the 1994 fiscal year, the Company opened 51 leased departments, nine
manufacturers' outlet stores and the GREAT FEET(TM) store. In addition during
fiscal 1994, the Company commenced operating 11 Stride Rite booteries, ten of
which were purchased from independent dealers. During 1994, the Company also
closed 10 booteries. The Company currently plans to open approximately 25
retail stores during fiscal 1995 and close or sell approximately three Stride
Rite retail stores during fiscal 1995.
Sales through the Company's retail operations accounted for approximately
14.4% of consolidated net sales for the fiscal year ended December 2, 1994.
Apparel Licensing Activities
- ----------------------------
The Company has a license agreement under which hosiery for men, women and
children is marketed under the KEDS(R) and PRO-Keds(R) brands for distribution
in the United States and Canada, a license agreement under which apparel, using
the KEDS(R) trademark, is marketed in Japan and a license agreement under which
handbags for women are marketed under the KEDS(R) trademark in the United
States. License royalties accounted for less than one percent of the Company's
sales in fiscal year 1994. The Company continually evaluates new licensees, for
both footwear and non-footwear products.
Raw Materials
- -------------
The Company purchases its raw materials from a number of domestic and
foreign sources. See "International Sourcing". The Company does not believe
that any particular raw materials supplier is dominant.
Backlog
- -------
At December 2, 1994 and December 3, 1993, the Company had a backlog of
orders amounting to approximately $184,000,000 and $201,000,000, respectively.
To a significant extent, the backlog at the end of each fiscal year represents
orders for the Company's spring footwear styles, and traditionally substantially
all of such orders are delivered during the first two quarters of the next
fiscal year. For a discussion of the impact on backlog in 1994 and 1993 of the
opening and operation of the Company's distribution center in Louisville,
Kentucky, reference is hereby made to the portion of the Company's annual report
to stockholders entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Results of Operations".
6
Competition
- -----------
The Company competes with a number of suppliers of children's footwear, a
few of which are divisions of companies which have substantially greater net
worth and/or sales revenue than the Company. Management believes, however, that
on the basis of sales, the Company is the largest supplier of nationally branded
children's footwear.
In the highly fragmented sneaker, casual and recreational footwear
industry, numerous domestic and foreign competitors, some of which have
substantially greater net worth and/or sales revenue than the Company, produce
and/or market goods which are comparable to, and compete with, the Company's
products in terms of price and general level of quality. In addition, the
domestic shoe industry has experienced substantial foreign competition, which is
expected to continue.
Management believes that creation of attractive styles, together with
specialized engineering for fit, durability and quality, and high service
standards are significant factors in competing successfully in the marketing of
all types of footwear. Management believes that the Company is competitive in
all such respects.
In operating its own retail outlets, the Company competes in the children's
retail shoe industry with numerous businesses, ranging from large retail chains
to single store operators.
Employees
- ---------
As of December 2, 1994, the Company employed approximately 3,700 full-time
and part-time employees, approximately 700 of whom were represented by
collective bargaining units. Management believes that its relations with its
employees are good. The Company entered into an amendment to a collective
bargaining agreement and a new collective bargaining agreement in 1993, in
connection with the closing of its distribution center in New Bedford,
Massachusetts and the proposed closing of its distribution center in Boston,
Massachusetts, respectively.
Environmental Matters
- ---------------------
The Company has been named as a potentially responsible party under the
Resource Conservation and Recovery Act of 1976, as amended, with respect to a
hazardous waste site in Saco, Maine. The Company is investigating its potential
responsibility with respect to this site and believes that its liability will be
immaterial. There can be no assurance, however, that this will be the case.
The Company is vigorously defending itself with respect to this action. Except
as specified above, compliance with federal, state, local and foreign
regulations with respect to the environment have had, and are expected to have,
no material effect on the capital expenditures, earnings or competitive position
of the Company.
Patents, Trademarks and Licenses; Research and Development
- ----------------------------------------------------------
The Company believes that its patents and trademarks are important to its
business and are generally sufficient to permit the Company to carry on its
business as presently conducted. In January, 1995, the Company acquired the
trademarks, patents and other intellectual property of the University Brands
division of Genesco, Inc., including TODDLER UNIVERSITY(R), KIDS UNIVERSITY(R)
and STREET HOT(R).
7
The Company depends principally upon its design, engineering, manufacturing
and marketing skills and the quality of its products for its ability to compete
successfully. The Company conducts research and development for footwear
products; however, the level of expenditures with respect to such activity is
not significant.
Executive Officers of the Registrant
- ------------------------------------
The information with respect to the executive officers of the Company listed
below is as of February 17, 1995.
Executive Officers of the Registrant
- ------------------------------------
Name Position with Company Age
- ---- --------------------- ---
Robert C. Siegel Chairman of the Board of Directors, 58
President and Chief Executive Officer
of the Company since December 1993.
Previously, Mr. Siegel was President
of the Dockers division of Levi Strauss
& Co., an apparel manufacturer and
distributor from December 1986 to
December 1993.
Stephen R. DuMont Executive Vice President, of the 51
Company from October 1994. Prior to
joining the Company, Mr. DuMont served
as a principal of DuMont and Associates,
an international management consulting
firm from August 1993 to September 1994,
as the Chief Executive Officer and Chief
Operating Officer of The Antigua Group,
Inc., an apparel and accessories
manufacturer and wholesale and retail
distributor from May 1992 to July 1993
and as Executive Vice President and
Chief Financial Officer of Mast
Industries, Inc. (a wholly owned
subsidiary of The Limited, Inc.), an
apparel manufacturer and wholesale
distributor from February 1986 to April 1992.
Jonathan D. Caplan President of The Keds Corporation from 41
February 1994. Mr. Caplan served as
President of Stride Rite Children's
Group, Inc. from June 1992 to February
1994. Prior to joining the Company, Mr.
Caplan was President of the Laredo and
Code West division of Genesco, Inc.
beginning in November 1985, having been
employed at Genesco, Inc. from June 1982.
8
Executive Officers of the Registrant
- ------------------------------------
Name Position with Company Age
- ---- --------------------- ---
Robert B. Moore, Jr. President, Sperry Top-Sider, Inc. since 44
October 1992. From October 1987 until
he joined the Company, Mr. Moore was
President of Bostonian Shoe Co., a
division of C & J Clark, Inc.
Dennis Garro President, Retail division, since 47
joining the Company in April 1994.
Prior to joining the Company, Mr.
Garro served as Senior Vice President
and General Merchandise Manager for
Mervyns division of Dayton Hudson
Corp. from May 1992 to September 1993
and as Senior Vice President and
General Merchandise Manager of DFS
Group, Ltd. from November 1989 to
April 1992.
Gerrald B. Silverman President, Stride Rite International 36
Corp., since joining the Company in
April 1994. Prior to joining the
Company, Mr. Silverman served as the
national sales manager of the Dockers
division of Levi Strauss & Co. from
October 1992 to April 1994, as West
Coast regional manager of the Dockers
division of Levi Strauss & Co. from
April 1991 to October 1992, as East
Coast district manager of the Dockers
division of Levi Strauss & Co. from
May 1990 to April 1991 and as
national account manager of the
Dockers division of Levi Strauss & Co.
from September 1987 to May 1990.
C. Madison Riley III Vice President and General Manager, 36
Boston Footwear Group, Inc. since
November 1994. Mr. Riley served as
Director, Strategic Planning of the
Company from June 1993 to September
1993, as Vice President, Strategic
Planning of The Keds Corporation from
September 1993 to January 1994 and as
Vice President, Strategic Planning of
the Company from January 1994 to
November 1994. Prior to joining the
Company, Mr. Riley served as a partner
and regional director of Kurt Salmon
Associates from July 1985 to June 1993.
9
Executive Officers of the Registrant
- ------------------------------------
Name Position with Company Age
- ---- --------------------- ---
John M. Kelliher Vice President, Finance, Treasurer and 43
Controller of the Company since
February 1993. Mr. Kelliher has been
Corporate Controller of the Company
since March 1982.
John P. McMahon, Jr. Vice President, Human Resources since 42
February 1994. Mr. McMahon served the
Company as Corporate Director of
Human Resources from January 1993 to
February 1994. From 1988 to 1992, Mr.
McMahon served as Director of Human
Resources of the ITT Electron Technology
Division of ITT Corporation.
Karen K. Crider General Counsel of the Company since 49
October 1992, Clerk of the Company
since November 1992 and Secretary of
the Company since April 1994.
Ms. Crider was U.S. Counsel to
British Airways, Plc., from May
1988 to September 1992.
These executive officers are generally elected at the Board of Director's Annual
Meeting and serve at the pleasure of the Board.
Item 2. Properties
- ------ ----------
The Company manufactures footwear and footwear components at three
factories located in Missouri. The Company is constructing a 50,000 square foot
facility in Missouri, to replace one of the leased facilities, consisting of
approximately 18,400 square feet of manufacturing space. The Company also
manufactures footwear components at a 30,000 square foot facility in the
Dominican Republic. The Company closed a 45,000 square foot leased
manufacturing facility in Puerto Rico during fiscal 1994. In addition, the
Company leases approximately 17,000 square feet of space for a technical center
in Lawrence, Massachusetts. The Company is seeking space for this center closer
to the Company's new corporate headquarters in Lexington, Massachusetts, as
described below.
Present manufacturing space totals approximately 170,000 square feet.
Approximately 44,000 square feet is owned by the Company and the balance is
leased. Such leases include either renewal options or favorable purchase
options. Management believes that all leases are at commercially reasonable
rates.
An automated distribution center located in Louisville, Kentucky provides
520,000 square feet of space and is owned by the Company. Reference is hereby
made to the section of the Registrant's annual report to stockholders entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations" for additional information concerning the
distribution center in Louisville, Kentucky. The Company also owns a central
warehouse in Boston, Massachusetts, which provides 565,000 square feet of space
and leased a warehouse located in New
10
Bedford, Massachusetts, consisting of approximately 742,000 square feet, which
closed during the first quarter of 1994. The Company's Canadian subsidiary
leases approximately 28,000 square feet for warehousing in Mississauga, Ontario.
The Company leases approximately 132,000 square feet for its headquarters
and administrative offices in Cambridge, Massachusetts in office buildings, one
of which is owned by a partnership in which the Company is a limited partner.
The Company has signed a lease for a 162,700 square foot building in Lexington,
Massachusetts and anticipates moving its headquarters in fiscal 1996. The
Company leases 6,000 square feet of space for sales offices and showrooms in New
York City, New York; Dallas, Texas and St. Louis, Missouri and subleases 17,000
square feet of space in Richmond, Indiana for its Keds order processing and
telemarketing functions. In addition, the Company leases approximately 1,700
square feet of office space in Paris, France for its Sperry Top-Sider Europe
distribution subsidiary and 20,200 square feet of space for its liaison offices
in Korea, Taiwan and Thailand.
At December 2, 1994, the Company operated 149 retail stores throughout the
country on leased premises which, in the aggregate, covered approximately
203,000 square feet of space. The Company also operates 103 children's footwear
departments in five major department store chains. In addition, the Company is
the lessee of 62 retail locations totaling approximately 68,000 square feet
which are subleased to independent Stride Rite dealers and other tenants.
For further information concerning the Company's lease obligations, see
Note 8 to the Company's consolidated financial statements, which are contained
in the annual report to stockholders and are incorporated by reference herein.
Management believes that, except as stated above, all properties and
facilities of the Company are suitable, adequate and fit for their intended
purposes.
Item 3. Legal Proceedings
- ------ -----------------
On September 27, 1993, the Company announced that The Keds Corporation, a
wholly owned subsidiary of the Company, entered into settlement agreements with
the Attorneys General of all 50 states, the Corporation Counsel of the District
of Columbia and the Federal Trade Commission, to resolve various investigations
into Keds' adoption and enforcement of its suggested retail pricing policy. In
entering into these settlements, Keds, without admitting any liability, fully
settled suits brought by the Attorneys General in the United States District
Court for the Southern District of New York, in their parens patriae capacity,
on behalf of all consumers who purchased certain KEDS(R) shoes during the
relevant period. The settlements required Keds to pay $5.7 million to several
charities nationwide, as well as $1.5 million to provide nationwide notice to
potential class members and other administrative expenses. Keds has agreed to
the imposition of certain injunctive relief for a period of five years ending
August 31, 1998. Following preliminary Court approval on September 27, 1993,
Keds paid the administrative costs and part of the settlement amount. Following
final court approval on March 28, 1994, Keds made the remaining payments.
11
The Company is a party to various litigation arising in the normal course
of business. Having considered facts which have been ascertained and opinions
of counsel handling these matters, management does not believe the ultimate
resolution of such litigation will have a material adverse effect on the
Company's financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
- ------ ----------------------------------------------------
None
12
PART II
-------
Item 5. Market for the Registrant's Common Stock and Related Stockholder
- ------ -----------------------------------------------------------------
Matters
-------
The information required by this item is included in the Registrant's 1994
Annual Report to Stockholders on pages 17, 30 and 33, and is incorporated herein
by reference.
Item 6. Selected Financial Data
- ------ -----------------------
The information required by this item is included in the Registrant's 1994
Annual Report to Stockholders on pages 17, 25 and 30 and is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
- ------ -----------------------------------------------------------
and Results of Operations
-------------------------
The information required by this item is included in the Registrant's 1994
Annual Report to Stockholders on pages 18 through 20 and is incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data
- ------ -------------------------------------------
The information required by this item is included in the Registrant's 1994
Annual Report to Stockholders on pages 21 through 30 and is incorporated herein
by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
- ------ -----------------------------------------------------------
and Financial Disclosure
------------------------
None.
13
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
- ------- --------------------------------------------------
Reference is made to the information set forth under the caption "Executive
Officers of the Registrant" in Item 1 of Part I of this report and to
information under the captions "Information as to Directors and Nominees for
Director", "Meetings of the Board of Directors and Committees" and "Compliance
with Section 16(a) of the Securities and Exchange Act of 1934" in the
Registrant's definitive proxy statement relating to its 1995 Annual Meeting of
Stockholders, which will be filed with the Commission within 120 days after the
close of the Registrant's fiscal year ended December 2, 1994, all of which
information is incorporated herein by reference.
Item 11. Executive Compensation
- ------- ----------------------
Reference is made to the information set forth in the Registrant's
definitive proxy statement relating to its 1995 Annual Meeting of Stockholders
under the caption "Compensation Committee Interlocks and Insider Interlocks" and
continuing through the caption "Certain Transactions with Management" (excluding
the information set forth under the caption "Compensation Committee Report")
which will be filed with the Commission within 120 days after the close of the
Registrant's fiscal year ended December 2, 1994, which information is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------- --------------------------------------------------------------
Reference is made to the information set forth under the caption
"Ownership of Equity Securities" in the Registrant's definitive proxy statement
relating to its 1995 Annual Meeting of Stockholders, which will be filed with
the Commission within 120 days after the close of the Registrant's fiscal year
ended December 2, 1994, which information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
- ------- -----------------------------------------------
Reference is made to the information set forth under the caption "Certain
Transactions with Management" in the Registrant's definitive proxy statement
relating to its 1995 Annual Meeting of Stockholders, which will be filed with
the Commission within 120 days after the close of the Registrant's fiscal year
ended December 2, 1994, which information is incorporated herein by reference.
14
PART IV
-------
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
- ------- ------------------------------------------------------------------
(a) Financial Statements. The following financial statements and
financial statement schedules are contained herein or are incorporated herein by
reference:
Page in
Form 10-K
---------
Consolidated Balance Sheets as of December 2, 1994
and December 3, 1993 *
Consolidated Statements of Income for the years ended
December 2, 1994, December 3, 1993 and
November 27, 1992 *
Consolidated Statements of Cash Flows for the years
ended December 2, 1994, December 3, 1993 and
November 27, 1992 *
Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 2, 1994,
December 3, 1993 and November 27, 1992 *
Notes to Consolidated Financial Statements *
Report of Independent Accountants *
Report of Independent Accountants on Financial
Statement Schedules F-1
Financial Statement Schedule for the years ended
December 2, 1994, December 3, 1993 and
November 27, 1992:
Schedule II - Valuation and Qualifying
Accounts F-2
Schedules other than those listed above are omitted because they are either not
required or the information is otherwise included.
* Incorporated herein by reference. See Part II, Item 8 on page 13 of this
Annual Report on Form 10-K.
15
Exhibits. The following exhibits are contained herein or are incorporated
- --------
herein by reference:
Exhibit No. Description of Exhibit
- ----------- ----------------------
3 (i) Restated Articles of Organization of the Registrant with amendments
thereto through November 28, 1986 -- Such document was filed as
Exhibit 3(i) to the Registrant's Form 10-K for the fiscal year
ended November 28, 1986 and is incorporated herein by reference.
(ii) Articles of Amendment dated April 7, 1987 to Restated Articles of
Organization -- Such document was filed as Exhibit 3 to
Registrant's Form 10-Q for the fiscal period ended February 27,
1987 and is incorporated herein by reference.
(iii) Articles of Amendment dated December 16, 1987 to Restated Articles
of Organization of the Registrant -- Such document was filed as
Exhibit 3(iii) to Registrant's Form 10-K for the fiscal year ended
November 27, 1987 and is incorporated herein by reference.
(iv) Articles of Amendment dated December 3, 1991 to the Restated
Articles of Organization of the Registrant -- Such document was
filed as Exhibit 3(iv) to Registrant's Form 10-K for the fiscal
year ended November 29, 1991 and is incorporated herein by
reference.
(v) Certificate of Vote of Directors establishing a series of a Class
of Stock dated July 2, 1987 -- Such document was filed as Exhibit A
to Exhibit 1 to Registrant's Form 8-K dated July 20, 1987 and is
incorporated herein by reference.
(vi) By-laws of the Registrant, as amended -- Such document was filed as
Exhibit 3 of the Registrant's Form 10-Q for the fiscal period ended
June 1, 1990 and is incorporated herein by reference.
4 (i) Reference is made to Exhibit 3(i), (ii), (iii) and (iv) referred to
above, which are expressly incorporated herein by reference.
(ii) Rights Agreement dated July 2, 1987, as amended on May 1, 1989,
between the Registrant and The First National Bank of Boston --
Such document was filed as an exhibit to Registrant's Form 8 dated
May 4, 1989 and its Form 8-K dated June 27, 1989 and is
incorporated herein by reference.
(iii) Note Purchase Agreement dated September 23, 1977 -- Such document
was filed as Exhibit 4(ii) to the Registrant's Form 10-K for the
fiscal year ended November 28, 1986 and is incorporated herein by
reference.
16
Exhibit No. Description of Exhibit
- ----------- ----------------------
10 (i)* Supplemental Retirement Income Agreement dated as of January 29,
1988 between the Registrant and Arnold Hiatt -- Such document was
filed as Exhibit 10 (i) to Registrant's Form 10-K for the fiscal
year ended November 27, 1987 and is incorporated herein by
reference.
(ii)* 1975 Executive Incentive Stock Purchase Plan of the Registrant--
Such document was filed as Appendix A to the Registrant's
Prospectus relating to such Plan, dated April 18, 1986, which was
filed with the Commission pursuant to Rule 424(b) promulgated under
the Securities Act of 1933, as amended, and is incorporated herein
by reference.
(iii)* Employee Stock Purchase Plan of the Registrant -- Such document was
filed as Appendix A to the Registrant's Prospectus relating to such
plan, dated October 15, 1991, which was filed with the Commission
pursuant to Rule 424(b) promulgated under the Securities Act of
1933, as amended, and is incorporated herein by reference.
(iv)* Annual Executive Incentive Compensation Plan -- Such document was
filed as Exhibit 10 to the Registrant's Form 10-Q for the quarter
ended May 30, 1986 and is incorporated herein by reference.
(v)* Key Executive Long-Term Incentive Plan, as amended and restated on
November 25, 1987 and February 4, 1992 -- Such documents were filed
as Exhibits 28.1 and 28.2 to the Registrant's Registration
Statement on Form S-8 (#33-19562) and as an amended prospectus
thereto, respectively, and are incorporated herein by reference.
(vi)* 1995 Long-Term Growth Incentive Plan of the Registrant
(vii)* Annual Executive Incentive Compensation Plan (dated as of
December 4, 1994)
(viii)* Form of executive termination agreement, as amended and restated on
February 17, 1995. All officers with whom the Registrant entered
into such agreement and which are currently in effect and have not
been terminated and the date of each such agreement are listed on
Addendum 10(viii) attached hereto.
(ix)* Form of executive termination agreement, as amended and restated on
January 29, 1990. Such document was filed as Exhibit 10(xi) to the
Registrant's Form 10-K for the fiscal year ended November 30, 1990
and is incorporated herein by reference. All executive officers
with whom the Registrant entered into such agreement and which are
currently in effect and have not been terminated and the date of
each such agreement are listed on Addendum 10(ix) attached hereto.
*Denotes a management contract or compensatory plan or arrangement.
17
Exhibit No. Description of Exhibit
- ----------- ----------------------
(x)* Employment Agreement between the Registrant and Robert C. Siegel
dated as of October 21, 1993 -- Such Agreement was filed as Exhibit
10(x) to the Registrant's Annual Report on Form 10-K for the fiscal
period ended December 3, 1993 and is incorporated herein by
reference.
(xi) 1994 Non-Employee Director Stock Ownership Plan -- Such Plan was
filed as Appendix A to the Registrant's Proxy Statement for its
1994 annual meeting of stockholders, portions of which were filed
with the Commission on March 1, 1994 and is incorporated herein by
reference.
(xii)* Form of severance agreement dated February 22, 1995. All
executive officers with whom the Registrant entered into such
an agreement are listed on Addendum 10(xii) attached hereto.
11 Calculation of Net Income Per Share
13 Registrant's 1994 Annual Report to Stockholders
21 Subsidiaries of the Registrant
23 Consent of Independent Accountants
27 Financial Data Schedules
(b) Reports on Form 8-K
None
*Denotes a management contract or compensatory plan or arrangement.
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.
THE STRIDE RITE CORPORATION THE STRIDE RITE CORPORATION
- --------------------------- ---------------------------
/s/ John M. Kelliher /s/ Robert C. Siegel
- ----------------------------------- -------------------------------
By: John M. Kelliher, Vice By: Robert C. Siegel, Chairman
President, Finance of the Board, President and
Treasurer and Controller Chief Executive Officer
(Principal Accounting Officer)
Date: February 27, 1995 Date: February 27, 1995
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.
/s/ Robert C. Siegel /s/ Donald R. Gant
- ----------------------------------- -------------------------------
Robert C. Siegel, Chairman of the Donald R. Gant, Director
Board of Directors, President and
Chief Executive Officer
Date: February 27, 1995 Date: February 27, 1995
/s/ Theodore Levitt /s/ Margaret A. McKenna
- ----------------------------------- -------------------------------
Theodore Levitt, Director Margaret A. McKenna, Director
Date: February 27, 1995 Date: February 27, 1995
/s/ Myles J. Slosberg /s/ W. Paul Tippett, Jr.
- ----------------------------------- -------------------------------
Myles J. Slosberg, Director W. Paul Tippett, Director
Date: February 27, 1995 Date: February 27, 1995
/s/ Robert Seelert /s/ Jeanette S. Wagner
- ----------------------------------- -------------------------------
Robert Seelert, Director Jeanette S. Wagner, Director
Date: February 27, 1995 Date: February 27, 1995
19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Directors
of The Stride Rite Corporation:
Our report on the consolidated financial statements of The Stride Rite
Corporation has been incorporated by reference in this Annual Report on Form 10-
K from the 1994 Annual Report to Stockholders of The Stride Rite Corporation and
appears on page 31 therein. In connection with our audits of such financial
statements, we have also audited the related financial statement schedules
listed in the index on page 15 of this Annual Report on Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 19, 1995
20
THE STRIDE RITE CORPORATION
Schedule II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
----------
Balance at Additions Deductions Balance at
Beginning Charged to End of
Period Costs and Period
Description Expenses
- ----------- ---------- ---------- ---------- ----------
Fiscal year ended
November 27, 1992:
Deducted from assets:
Allowance for doubt-
ful accounts $3,426 $3,288 $2,221(a) $4,493
Allowance for sales
discounts 1,492 2,230 2,280(b) 1,442
------ ------ ------ ------
$4,918 $5,518 $4,501 $5,935
====== ====== ====== ======
Fiscal year ended
December 3, 1993:
Deducted from assets:
Allowance for doubt-
ful accounts 4,493 2,256 2,904(a) 3,845
Allowance for sales
discounts 1,442 2,625 2,310(b) 1,757
------ ------ ------ ------
$5,935 $4,881 $5,214 $5,602
====== ====== ====== ======
Fiscal year ended
December 2, 1994:
Deducted from assets:
Allowance for doubt-
ful accounts 3,845 3,117 1,101(a) 5,861
Allowance for sales
discounts 1,757 2,579 1,566(b) 2,770
------ ------ ------ ------
$5,602 $5,696 $2,667 $8,631
====== ====== ====== ======
(a) Amounts written off as uncollectible.
(b) Amounts charged against the reserve.
21
THE STRIDE RITE CORPORATION
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 2, 1994
Index to Exhibits
- -----------------
Exhibit No. Description of Exhibit Page No.
- ----------- ---------------------- --------
10 (vi) 1995 Long-Term Growth Incentive Plan 23
(vii) Annual Executive Incentive Compensation Plan 32
(viii)* Form of executive termination agreement, as 39
amended and restated on February 17, 1995.
All officers with whom the Registrant
entered into such agreement and which are
currently in effect and have not been
terminated and the date of each such
agreement are listed on Addendum 10(viii)
attached hereto.
(ix)* Form of executive termination agreement, as 53
amended and restated on January 29, 1990. Such
document was filed as Exhibit 10(xi) to the
Registrant's Form 10-K for the fiscal year ended
November 30, 1990 and is incorporated herein
by reference. All officers with whom the
Registrant entered into such agreement and
which are currently in effect and have not
been terminated and the date of each such
agreement are listed on Addendum 10(ix)
attached hereto.
(xii)* Form of severance agreement dated 54
February 22, 1995. All executive officers with
whom the Registrant entered into such an agreement
are listed on Addendum 10(xii) attached hereto.
11 Calculation of Net Income Per Share 57
13 Registrant's 1994 Annual Report to Stockholders 58
21 Subsidiaries of the Registrant 91
23 Consent of Independent Accountants 92
27 Financial Data Schedules 93
*Denotes a management contract or compensatory plan or arrangement.