ITEM 1. Business
GENERAL
Russell Corporation (together with its subsidiaries, the "Company") is a vertically integrated international manufacturer and marketer of activewear, athletic uniforms, better knit shirts, licensed sports apparel, sports and casual socks, and a line of yarn-dyed woven fabrics. The Company's manufacturing operations include the entire process of converting raw fibers into finished apparel and fabrics. Products are marketed to sporting goods dealers, department and specialty stores, mass merchandisers, wholesale clubs, golf pro shops, college bookstores, screen printers, distributors, mail-order houses, and other apparel manufacturers.
On July 22, 1998, the Company announced its intention to undertake a major restructuring and reorganization to improve the Company's global competitiveness. Elements of the multi-year strategic plan that were announced include: the closing of approximately 25 of the Company's 90 worldwide facilities over the next three years, including selected manufacturing plants, distribution centers and offices; expanding production outside the United States; consolidating and downsizing the licensed products businesses; disposing of owned shopping center real estate; reorganizing the corporate structure; establishing a dual headquarters in the metropolitan Atlanta area; and other cost savings activities. It is anticipated that the three-year plan will ultimately reduce costs by approximately $80 million pre-tax annually and result in the elimination of 4,000 domestic positions.
During 1998, the Company exited the business of certain licensing markets of various professional sport leagues and teams, and certain other licensing agreements as part of the Company's licensed products operation. The Company remains active in the collegiate licensing business and continues to be a major supplier to certain outlets of licensed products, such as college bookstores and sports shops. The discontinued businesses include headwear, or logoed caps, a business which was sold in the fourth quarter of 1998.
Also during 1998, as part of the multi-year strategic plan, the Company moved substantial sewing operations to both company owned and contractor locations in Central America and Mexico. At year-end 1998, approximately 40% of the Company's sewing capacity for domestic consumption was domiciled outside the U.S. The Company closed four domestic sewing facilities and reconfigured two others. The Company has realigned the remaining operation in order to accommodate a more orderly and efficient product flow of goods throughout the Company's manufacturing processes. Management also reassessed its decoration and distribution capabilities' system and facilities and also closed 34 company operated retail outlet stores in 13 states during 1998.
In total, approximately 2,000 employees had been notified of their termination and separation and had received the details of their individual severance packages as of year-end.
Of the Company's total revenues, more than 95 percent was derived from the sale of completed apparel, with the balance from woven fabrics. During the two previous fiscal years ending January 3, 1998 and January 4, 1997, completed apparel accounted for more than ninety percent of total revenues. Foreign and export sales for 1998 were 10.7%. In each of the immediately preceding two years foreign and export sales were 11.0% and 10.5%,
I-1
respectively. One customer, Wal-Mart Stores, Inc. and affiliates, accounted for 19.0 percent of total revenues in 1998, 18.8 percent in 1997 and 17.1 percent in 1996.
The Company produces athletic uniforms for most recognized sports activities and for players of all ages and sizes. These products are marketed to professional, collegiate, high school, and other teams as well as to individuals. Knitted apparel, such as T-shirts, fleece sweatshirts and sweatpants, pullovers, jackets, and other similar knitted products, is produced for the general consumer market. Product lines also include placket shirts, turtlenecks and other golf apparel. The Company also produces sports and casual socks including tube, quarter anklet and crew socks for men, women and children. Woven fabrics are produced and sold to other apparel manufacturers.
The Company's principal manufacturing facilities are located in and around Alexander City, Alabama. It also operates additional plants in other communities in Alabama, Florida, Georgia, North Carolina and Virginia. The Company owns apparel assembly facilities in Mexico and Honduras. Warehousing and shipping is conducted in Alexander City, Ft. Payne and Montgomery, Alabama; and Mt. Airy, North Carolina. The primary manufacturing and distribution facilities for the International Division are at Russell Corp. UK Limited, located in and around Livingston, Scotland. The Company also maintains warehouses in Mexico, Brazil and Australia.
As a vertically integrated operation, the Company converts raw fibers into finished apparel and fabrics utilizing company-owned facilities, as well as contractors and general suppliers for spinning, knitting and weaving, dyeing and finishing, and cutting and sewing operations. Generally, the Company produces most of the yarns, other than textured and filament yarns, used in the manufacturing process. As a result of its integrated production process, all functions required to produce finished apparel and fabrics can be performed by the Company without reliance upon outside contractors. The Company is not, however, solely reliant on owned facilities and operations, particularly in apparel assembly. Approximately 40 percent of its products for domestic consumption were assembled at offshore contractors, owned offshore operations, and other vendors at year end 1998.
The Company benefits from flexibility in its production scheduling capability, permitting it to shift product emphasis as markets improve, change or temporarily decline for particular products. This ability to respond quickly to market changes has enabled the Company to manage the utilization of its manufacturing capacity.
The Company's revenue and income are subject to seasonal variations in all segments. However, due to the time which may elapse between the placement of orders and shipment of goods, prices may or may not immediately reflect changes in the Company's cost of raw materials and other costs. Working capital needs may change with the increase or decrease in inventories or accounts receivable as a result of a variety of credit terms and time between production and shipments. Production schedules are based upon current orders, the history of customer orders, market research, and similar factors. The Company has no meaningful backlog figures.
The Company does not hold any significant patents, franchises or concessions in any of its segments. The Company's ability to manufacture and sell certain licensed apparel products is dependent upon licenses held by the Company to utilize various trademarks and tradenames on such apparel. The licenses are subject to periodic renewal and negotiation and certain minimum payments.
I-2
SEGMENTS
The Company has three reportable segments: Activewear, International and "All Other". These reportable segments offer various similar products and/or operate in various locations. The reportable segments are each managed separately because they manufacture and distribute different types of products. The segment information found in Note 11 on pages 40 and 41 of the 1998 Annual Report to Shareholders is hereby incorporated by reference.
Activewear - The Company's Activewear segment consists of three brands that sell the following products to sporting goods dealers, department and specialty stores, mass merchants, wholesale clubs, college bookstores, screen printers, distributors, golf pro shops, and mail order catalogs: t-shirts, fleece products, such as sweat shirts and pants, athletic uniforms, and knit shirts.
The Activewear segment consists of the primary operations of the Company's Jerzees(R), Russell Athletic(R) and Cross Creek(R) brands. Activewear is sold by a combination of a salaried, company-employed sales force and commission agents.
The Activewear segment utilizes company owned manufacturing facilities to produce product, as well as utilizing contractors or other vendors for components in the manufacturing process or for the procurement of finished product. Generally, company-owned and operated manufacturing facilities for Activewear consist of fabrication, dyeing and finishing, cutting, and sewing.
Fabrication is the process of converting yarn, provided by the Company's yarn unit (included in "All Other") or purchased from a third party, into cloth or fabrics. This is done through the process of single knitting, supplemented by smaller operations of double knitting and warp knitting. These operations are conducted in three plant locations in Alexander City with additional locations in Wetumpka, Alabama and Mt. Airy, North Carolina.
These fabrics are then dyed and finished by a contractor or in company-owned facilities in Alexander City, Wetumpka and Sylacauga, Alabama and Mt. Airy, North Carolina. The dyeing and finishing processes impart and affect the appearances, the hand (feel), color fastness, uniformity, shade, and stability (retention and form) of the fabric.
Cutting and sewing operations for Activewear are currently located in plants in United States, Mexico and Honduras.
International - The International strategic business unit manufactures and distributes activewear products under the Jerzees(R), Russell Athletic(R) and Cross Creek(R) brands throughout various countries outside the United States and Canada. This segment's major market is Europe, where the Company engages in both manufacturing and marketing of activewear, similar to the processes described above for the Activewear segment.
All Other - Other segments that do not meet the quantitative thresholds for determining reportable segments manufacture yarn, manufacture and sell fabrics to other apparel manufacturers and manufacture and sell socks to mass merchants.
I-3
Russell Fabrics designs, manufactures and markets quality woven fabrics of cotton, polyester and cotton/polyester blends in a variety of patterns, colors and constructions to other apparel manufacturers, primarily for the manufacture of school and industrial uniforms.
DeSoto Mills is a manufacturer of popularly priced socks for men, women and children under the Company's Jerzees(R) and Russell Athletic(R) brands, through a company-employed sales force principally to discount retailers and wholesale clubs markets.
Russell Yarn consists of the spinning of yarns, the process by which fibers of raw cotton or blends of cotton and synthetic fibers are converted into continuous strands. Yarn uniformity and strength are the principal characteristics which materially affect the efficiency of subsequent manufacturing processes and the quality of the finished fabrics or apparel. This unit manufactures a variety of yarn sizes primarily for use in the balance of the Company's manufacturing processes.
Russell Yarn purchases synthetic fibers from one principal supplier. There are approximately four major producers of such fibers in the United States. The Company purchases cotton from various merchants.
This unit has experienced no material difficulty in purchasing adequate supplies, and does not presently anticipate any difficulties in the future. Russell Yarn has no long-term contracts for the supply of raw materials and is, therefore, subject to market price fluctuations.
COMPETITION
The textile-apparel industry in all of the Company's business segments is keenly competitive, and the Company has many domestic and foreign competitors, both large textile-apparel companies and smaller concerns. While the sales of a number of manufacturers are substantially greater than those of the Company, no single manufacturer dominates the industry.
EMPLOYEES
As of January 2, 1999, the Company had 15,737 employees in total, as follows:
The Company has never had a strike or work stoppage and considers its relationship with its employees to be good.
REGULATION
The Company is subject to federal, state, and local laws and regulations affecting its business, including those promulgated under the Occupational Safety and Health Act (OSHA), the Consumer Product Safety Act (CPSA), the Flammable Fabrics Act, the Textile Fiber Product Identification Act, and the rules and regulations of the Consumer Products Safety Commission (CPSC). The Company believes that it is in substantial compliance with all applicable governmental regulations under these statutes. The Company believes it has complied with all known current environmental requirements and expects no major additional expenditures in this area in the foreseeable future.
I-4
FORWARD-LOOKING INFORMATION
With the exception of historical information, the matters and statements discussed, made or incorporated by reference in this Annual Report on Form 10-K constitute forward-looking statements and are discussed, made or incorporated by reference, as the case may be, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Wherever possible, the Company has identified these "forward-looking" statements (as defined in Section 21E of the Securities and Exchange Act of 1934) by words such as "anticipates," "believes," "estimates," "expects" and similar phrases. In addition, the Company and its representatives may from time to time make other oral or written statements that are also forward-looking statements.
Some forward-looking statements concern anticipated sales levels, cost estimates and resulting earnings that are not necessarily indicative of subsequent periods due to the mix of future orders, at once orders and product mix changes, which may vary significantly from year to year or quarter to quarter, and the timing and effect of the Company's restructuring and reorganization program. These forward-looking statements are based upon assumptions the Company believes are reasonable; however, such statements are subject to risks and uncertainties which could cause the Company's actual results, performance and achievements to differ materially from those expressed in, or implied or contemplated by, these statements. These risks and uncertainties include, but are not limited to, the overall level of consumer spending for apparel; the financial strength of the retail industry; actions by competitors that may impact the Company's business (including in particular changes in pricing); the existence of excess capacity in the Company's industry; changes in prices of raw materials used in the Company's manufacturing processes; the ability of the Company to reduce cost in more labor-intensive segments of the manufacturing process; the success of planned advertising, marketing and promotional campaigns and international activities; changes in customer relationships; the impact of economic changes in the markets where the Company competes, such as changes in interest rates, currency exchange rates, inflation rates, recession, and other external economic and political factors over which the Company has no control; and other risks and uncertainties discussed or indicated in other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
ITEM 2.
ITEM 2. Properties
The Company's principal executive offices, manufacturing plants and research facilities are located in Alexander City, Alabama, with additional plants in Alabama, Florida, Georgia, North Carolina, Virginia, Mexico, Honduras, and Scotland. As previously noted, the Company will be establishing a dual headquarters in Atlanta, Georgia during 1999. The Company has no material mortgages on any of its real property or manufacturing machinery except for capitalized lease obligations (see Note 2 of Notes to Consolidated Financial Statements), and believes that all of its properties are well maintained and suitable for its operations and are currently fully utilized for such purposes, excluding plants closed in 1998 that are held for resale.
I-5
The Company utilizes an aggregate of approximately 10,422,000 square feet of manufacturing, warehousing and office facilities. The following table summarizes the approximate areas of such facilities:
All presently utilized facilities in the U.S. are owned, except the sewing plant located in Columbia, Alabama, and the regional sales offices (see Notes 2 and 9 of Notes to Consolidated Financial Statements).
ITEM 3.
ITEM 3. Legal Proceedings
The Company is a party to various lawsuits arising out of the conduct of its business, the majority of which, if adversely determined, would not have a material adverse effect upon the Company.
In the fourth quarter of 1998, a Jefferson County, Alabama, jury returned a verdict in Sullivan, et al. v. Russell Corporation, et al. Five plaintiff families were awarded a total of $155,200 in compensatory damages for property damage and $52,398,000 in punitive damages from the three defendants, The Company, Avondale Mills and Alabama Power Company. Allegations in the case were that textile discharges of two of the defendants, including The Company, into the Alexander City wastewater treatment plant, the subsequent treatment by the City of Alexander City and discharge into Lake Martin constituted a nuisance and indirect trespass. Alabama Power Company, the third defendant, was alleged to have allowed the nuisance and trespass to continue as the owner of the land under the lake. The plaintiffs alleged mental anguish but no damages were granted for this claim. No allegation of personal injury was made in the case.
The evidence was uncontroverted that The Company is in compliance with its permit issued by the Alabama Department of Environmental Management (ADEM) for the indirect discharge of its wastewater to the Alexander City wastewater treatment plant. Therefore, The Company believes the verdict is contrary to the evidence and under the applicable law, no damages should have been awarded. Subsequent to fiscal year end, the trial court denied motions by the Company and its co-defendants for a judgment in their favor as a matter of law, a new trial or a reduction in the punitive damages awarded. The matter has now been appealed to the Alabama Supreme Court, and the Company will vigorously pursue such appeal. If such appeal proves to be unsuccessful, damages associated with this matter could have a significant adverse effect on the Company's future results from operations and its ability to comply with certain debt covenant requirements. Subsequent to fiscal year end, an additional lawsuit was filed in the same Alabama state court where the Sullivan case was filed. The plaintiffs in this new matter allege substantially the same injuries as were alleged by the Sullivan plaintiffs.
I-6
ITEM 4.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
EXECUTIVE OFFICERS OF THE COMPANY
"Election of Directors" on pages one through four of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
Additional executive officers who are not directors are as follows:
Mr. Forehand, employed by the Company in 1985 as Director of Taxes, served as Assistant Secretary from 1987 to 1988 and Secretary 1989 to 1998. Prior to joining the Company, he was engaged in the private practice of law.
I-7
Mr. Hager was employed by the Company in 1998 in his current position. Prior to joining the company, he was with Banc One Corporation, most recently as Senior Vice President since 1993.
Mr. Hoffman was employed by the Company in 1999 in his current position. Prior to joining the Company, he was most recently Vice President-General Counsel and Secretary for OSI Industries, Inc. since 1996. Prior to that, he was Vice President-Deputy General Counsel and Assistant Secretary for Sara Lee Corporation.
Mr. Holliday, employed by the Company since 1986, was named Vice President, Investor Relations in 1998, and Treasurer in 1996. He served as President of the Licensed Products Division from 1994 to 1996, President of the Knit Apparel Division from 1991 until 1994 and Assistant Treasurer from 1988 to 1991.
Mr. Johnson, employed by the Company since 1989, most recently served as Executive Vice President, Manufacturing. Prior to that, he was Vice President, Greige Manufacturing. Prior to joining Russell, he served as Operations Manager for Eden Yarns, Inc. from 1987 to 1989 and as a Plant Manager for Avondale Mills from 1984 to 1987. Prior to that, Mr. Johnson was employed by Chicopee, a division of Johnson & Johnson.
Mr. Letzler was employed by the Company in 1998 in his current position. Prior to joining the Company, he was with Sara Lee Corporation, since 1980, most recently as President of Hanes Hosiery and prior to that President of the Hanes Printables Division.
Mr. Spires, employed by the Company in 1969, was elected President, Cross Creek Apparel, Inc. in 1993. Prior to that, he served from 1988 to 1993 as Vice President, Services, where he directed the Company's Distribution, Transportation and Information Services activities. Prior to 1988, Mr. Spires held several management positions with Russell in both sales and operations.
Mr. Taunton, employed by the Company since 1973, most recently served as Executive Vice President, Sales and Marketing. Prior to that, he served as President of the Fabrics Division from 1988 to 1993.
Mr. Wachtel, employed by the Company in 1976, was most recently President of the Athletic Division since 1991. He formed the Mid-South Regional Office in 1980 and formed the Mid-Southeast Sales Office in 1986. He was General manager of Russell Athletic, Inc. in Snellville, Georgia from 1989 to 1990 and Vice President, Sales in the Athletic Division from 1990 to 1991.
Mr. Workman, employed by the Company since 1969 as an accountant, served as Manager, Cost Accounting from 1970 to 1987.
Ms. Young was employed by the Company in 1998 in her current role. Prior to joining the Company, she was with Sara Lee Corporation since 1984, most recently as Director, Corporate Affairs and Community Relations.
All executive officers and all other officers of the Company are elected by the Board of Directors and serve at the pleasure of the Board of Directors.
I-8
PART II
ITEM 5.
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters
"Dividend and Market Information" on the inside back cover and in Note 2 to Consolidated Financial Statements on page 34 of the Annual Shareholders Report for the year ended January 2, 1999 are incorporated herein by reference.
The approximate number of holders of the Company's common stock at March 10, 1999 was 8,000.
ITEM 6.
ITEM 6. Selected Financial Data
"Ten Year Selected Financial Data" on pages 22 and 23 of the Annual Shareholders Report for the year ended January 2, 1999, is incorporated herein by reference with respect to fiscal years 1998, 1997, 1996, 1995 and 1994.
ITEM 7.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 24 through 27 of the Annual Shareholders Report for the year ended January 2, 1999, is incorporated herein by reference.
ITEM 7.A. Quantitative and Qualitative Disclosures About Market Risk
"Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 24 through 27 and Note 4 on pages 34 and 35 of the Annual Shareholders Report for the year ended January 2, 1999, is incorporated herein by reference.
Russell is exposed to market risks relating to fluctuations in interest rates, currency exchange rates and commodity prices. The objective of financial risk management at Russell is to minimize the negative impact of interest rate, foreign exchange rate and commodity price fluctuations on the Company's earnings, cash flows and equity. To manage these risks, Russell uses various derivative financial instruments, including interest rate swap agreements, forward currency exchange contracts and commodity futures contracts. Russell only uses commonly traded instruments. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. Also, refer to Notes 1 and 4 to the consolidated financial statements for a more complete description of Russell's accounting policies and use of such instruments.
The following analyses present the sensitivity of the market value, earnings and cash flows of Russell's financial instruments to hypothetical changes in interest rates, exchange rates and commodity prices as if these changes occurred at January 2, 1999. The range of changes chosen for these analyses reflect Russell's view of changes which are reasonably possible over a one-year period. Market values are the present values of projected future cash flows based on the interest rate assumptions or quoted market prices where available. These forward-looking disclosures are selective in nature and only address the potential impacts from financial instruments. They do
II-1
not include other potential effects, which could impact Russell's business as a result of these changes in interest rates, exchange rates and commodity prices.
Interest Rate and Debt Sensitivity Analysis
At January 2, 1999, Russell has debt totaling $368,165,000 and two interest rate swap agreements with notional values totaling $113,000,000. Interest rate swaps are entered into as a hedge of underlying debt instruments to effectively change the characteristics of the interest rate without altering the debt instrument. At January 2, 1999, the interest rate swap agreements converted $70,000,000 of outstanding variable rate debt to fixed rate debt for a period of time and converted $43,000,000 of outstanding fixed rate debt to variable rate debt for a period of time. For fixed rate debt, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely for variable rate debt, interest rate changes generally do not affect the fair market value but do impact future earnings and cash flows, assuming other factors are held constant.
At January 2, 1999, after adjusting for the effect of interest rate swap agreements, Russell has fixed rate debt of $305,450,000 and variable rate debt of $62,715,000. Assuming all other variables remain constant, a one percentage point increase in interest rates would decrease the fair market value of the fixed rate debt by approximately $21,048,000. At January 2, 1999 the annual pre-tax earnings and cash flow impact resulting from a one percentage point increase in interest rates would be approximately $1,353,000, holding other variables constant.
Currency Rate Exchange Sensitivity
Foreign currency exposures arising from transactions include firm commitments and anticipated transactions denominated in a currency other than an entity's functional currency. The Company and its subsidiaries generally enter into transactions denominated in their respective functional currencies. Therefore foreign currency exposures arising from transactions are not material to the Company. The Company's primary foreign currency exposure arises from foreign denominated revenues and profits translated into U.S. dollars.
The primary currencies to which the Company is exposed are the Mexican peso, British pound and other European currencies.
The company generally views as long-term its investments in foreign subsidiaries with a functional currency other than the U.S. dollar. As a result, the Company does not generally hedge these net investments, and at year end there were no significant hedges.
Commodity Price Sensitivity
The availability and price of cotton is subject to wide fluctuations due to unpredictable factors such as weather conditions, governmental regulations, economic climate or other unforeseen circumstances. To reduce price risk caused by market fluctuations, the Company enters into futures contracts to hedge prices on varying proportions of its cotton needs, thereby minimizing the risk of decreased margins from cotton price increases. A sensitivity analysis has been prepared to estimate the Company's exposure to market risk from its cotton position, excluding inventory on hand and fixed price contracts. The fair value of the Company's position is the fair value calculated by valuing its net position at quoted futures prices. Market risk is estimated as the potential loss in fair value resulting from a
II-2
hypothetical 10% adverse change in such prices. The potential loss in fair value of the Company's cotton futures position at January 2, 1999 from a hypothetical 10% decrease in cotton prices was $5,238,000.
ITEM 8.
ITEM 8. Financial Statements and Supplementary Data
The following consolidated financial statements of the registrant and its subsidiaries included in the Annual Shareholders Report for the year ended January 2, 1999, are incorporated herein by reference:
...Consolidated Balance Sheets - January 2, 1999 and January 3, 1998
...Consolidated Statements of Operations - Years ended January 2, 1999, January 3, 1998 and January 4, 1997
...Consolidated Statements of Cash Flows - Years ended January 2,1999, January 3, 1998 and January 4, 1997
...Consolidated Statements of Stockholders' Equity - Years ended January 2, 1999, January 3, 1998 and January 4, 1997
...Notes to Consolidated Financial Statements - Years ended January 2, 1999, January 3, 1998 and January 4, 1997
...Report of Independent Auditors
ITEM 9.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
II-3
PART III
ITEM 10.
ITEM 10. Directors and Executive Officers of the Registrant
"Election of Directors" on pages one through four of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
"Executive Officers of the Company" on pages I-7 and I-8 of this report is incorporated herein by reference.
"Section 16(a) Beneficial Ownership Reporting Compliance" on page 15 of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
ITEM 11.
ITEM 11. Executive Compensation
"Executive Compensation" on pages 4 through 12 of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
ITEM 12.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
(a) "Principal Shareholders" on pages 13 and 14 of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
(b) Information concerning security ownership of management set forth in the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 under the captions "Security Ownership of Management" on page 14 is incorporated herein by reference.
(c) There are no arrangements known to the registrant the operation of which may at a subsequent date result in a change in control of the registrant.
ITEM 13.
ITEM 13. Certain Relationships and Related Transactions
"Transactions with Management and Others" on page 15 of the Proxy Statement for the Annual Meeting of Shareholders to be held April 21, 1999 is incorporated herein by reference.
III-1
PART IV
ITEM 14.
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) List of Documents filed as part of this Report:
(1) Financial Statements All financial statements of the registrant as set forth under Item 8 of this Report on Form 10-K
(2) Financial Statement Schedule
All other financial statements and schedules not listed have been omitted since the required information is included in the consolidated financial statements or the notes thereto, or is not applicable or required.
(3) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
IV-1
IV-2
(b) Reports on Form 8-K
No reports on form 8-K were filed during the fourth quarter of the year ended January 2, 1999.
For the purpose of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into the undertakings contained in Part II of the registrant's registration statement on Form S-8 numbers 33-24898:
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
IV-3
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS RUSSELL CORPORATION AND SUBSIDIARIES
(1) Uncollectible accounts written off, net of recoveries. (2) Discounts and returns allowed customers during the year. (3) Represents cash paid (4) Represents assets write off (5) Represents assets sold after write-down
IV-4
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, thereunder duly authorized.
RUSSELL CORPORATION (Registrant)
Date 3/29/99 By /s/ John F. Ward ------- ------------------------------ John F. Ward Chairman, President and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ John F. Ward Chairman, President and CEO 3/29/99 ------------------------- ------- John F. Ward Date
Executive Vice President and Chief Financial Officer, and Director (Principal Financial /s/ Eric N. Hoyle Officer) 3/29/99 ------------------------- ------- Eric N. Hoyle Date
/s/ Herschel M. Bloom Director 3/30/99 ------------------------- ------- Herschel M. Bloom Date
------------------------- Director -------- Ronald G. Bruno Date
/s/ Timothy A. Lewis Director 3/29/99 ------------------------- ------- Timothy A. Lewis Date
/s/ C. V. Nalley III Director 3/30/99 ------------------------- ------- C. V. Nalley III Date
IV-5
/s/ Margaret M. Porter 3/29/99 ------------------------- ------- Margaret M. Porter Date
/s/ Benjamin Russell Director 3/29/99 ------------------------- ------- Benjamin Russell Date
/s/ John R. Thomas Director 3/29/99 ------------------------- ------- John R. Thomas Date
Director ------- ------------------------- Date John A. White
/s/ Larry E. Workman Controller 3/29/99 ------------------------- (Principal Accounting Officer) ------- Larry E. Workman Date
IV-6