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Registration No. ____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM S-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
______________
UNITED GROCERS, INC.
(Exact name of registrant as specified in its charter)
Oregon 93-0301970
(State of incorporation) (I.R.S. Employer Identification No.)
6433 S. E. Lake Road (Milwaukie, Oregon), Post Office Box 22187,
Portland, Oregon 97222
(503) 833-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
ALAN C. JONES, President
United Grocers, Inc.
6433 S. E. Lake Road (Milwaukie, Oregon), Post Office Box 22187,
Portland, Oregon 97222
(503) 833-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Miller, Nash, Wiener, Hager & Carlsen
111 S. W. Fifth Avenue
Portland, Oregon 97204-3699
Attention: Erich W. Merrill, Jr.
Approximate date of commencement of proposed sale to the public:
From time to time following the effective date
of this registration statement.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to
Item 11(a)(1) of this form, check the following box. [X]
Title of each Proposed Proposed
class of maximum maximum
securities offering aggregate Amount of
being Amount being price per offering registration
registered registered unit price fee
-------------- -------------- --------- ----------- ------------
Common Stock, 250,000 shares $59.50 $14,875,000 $5,129.35
$5 par value
Series J Notes $50,000,000 100% $50,000,000 $17,241.50
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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UNITED GROCERS, INC.
Cross Reference Sheet Between
the Items of Part I of Form S-2 and the Prospectus
<CAPTION>
Location or Caption
Items in Form S-2 in Prospectus
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<S> <C> <C>
1. Forepart of the Registration Statement andCover page
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover PagesStatement of Available
of Prospectus Information; Incorporation
of Certain Documents by
Reference; Table of Contents
3. Summary Information, Risk Factors and RatioProspectus Summary
of Earnings to Fixed Charges
4. Use of Proceeds Introduction
5. Determination of Offering Price Introduction
6. Dilution *
7. Selling Security Holders *
8. Plan of Distribution Introduction
9. Description of Securities to be Introduction;
Registered Description of Membership
Stock; Description of Notes
10. Interests of Named Experts and Counsel *
11. Information with Respect to Prospectus Summary;
the Registrant Introduction;
The Company; Incorporation of Certain
Documents by Reference
12. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference
13. Disclosure of Commission Position on *
Indemnification for Securities
Act Liabilities
- --------------
* Omitted either because the item is inapplicable or because the answer is in the
negative.
</TABLE>
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UNITED GROCERS, INC.
(Portland, Oregon)
250,000 Shares
Common Stock, $5 Par Value
$50,000,000 Series J 5% Subordinated
Redeemable Capital Investment Notes
Maturing Approximately 10 Years from Date of Issue
Common stock ("Membership Stock") is sold solely to members of United
Grocers, Inc. ("United"), at adjusted book value determined for each calendar
year as of the end of United's preceding fiscal year. In addition to shares
sold to newly admitted members as a prerequisite for membership, Membership
Stock may be issued to existing members for cash or in payment of patronage
dividends. See "The Company."
Notes are issued in registered form in denominations of $100 or
multiples of $100 at 100% of principal amount, with interest payable
quarterly. Notes are issued in noncertificated form. Notes are redeemable
at United's option during the 7 years prior to maturity at a price equal to
principal plus accrued interest. United does not expect any public market
for Notes to develop. Although it is not legally obligated to do so, United
intends to prepay any Note, at any time, upon request of the holder. See
"Introduction."
The board of directors of United has decided to pay interest at the
rate of 6.5% per annum during the period December 16, 1994, to March 15,
1995, on all Notes outstanding at any time during that period. On March 16,
1995, the interest rate on all Notes will revert to the stated rate of 5% per
annum unless the board of directors takes further action. The decision to
pay interest at 6.5% per annum is a voluntary action taken by the board of
directors in recognition of prevailing interest rates. There can be no
assurance that the interest rate on Notes after March 15, 1995, will exceed
5% per annum. The only right evidenced by the Notes is to receive timely
payment of principal and interest at 5% per annum.
Price to Underwriting Proceeds
public discounts and to United
commissions
-------- ------------- ---------
Per Share $59.50 None $59.50
Per Note 100% None 100%
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-------------------
This offering is not underwritten; all sales will be made by United
through its regular employees. United reserves the right to withdraw, cancel
or modify the offer without notice and to reject orders in whole or in part.
The date of this prospectus is January ___, 1995
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TABLE OF CONTENTS
Page
Statement of Available Information 2
Incorporation of Certain Documents by Reference 2
Prospectus Summary 3
Introduction 6
The Company 8
Description of Membership Stock 11
Description of Notes 13
Legal Matters 16
Experts 16
Additional Information 16
No person is authorized to give any information or to make any
representations other than those contained herein, and, if given or made,
such information or representations must not be relied upon as having been
authorized. Neither the delivery hereof nor any sale hereunder shall, under
any circumstances, create any implication that there has been no change in
the affairs of United since the date hereof. This prospectus does not
constitute an offer to sell or a solicitation of any such offer in any state
to any person to whom it is unlawful to make such an offer in such state.
STATEMENT OF AVAILABLE INFORMATION
United is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports and
other information with the Securities and Exchange Commission ("Commission").
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission in Washington, D.C., at 450
Fifth Street, N.W., Washington, D.C., and at the Commission's regional
offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies can be
obtained at prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington,
D.C. 20549.
United intends to provide its security holders annual reports
containing audited financial statements which have been examined and reported
on by independent certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
United incorporates herein by reference (i) its annual report on
Form 10-K for the fiscal year ended September 30, 1994, and (ii) the material
under the captions "Board of Directors" and "Management" and the information
on pages 6 through 24 of United's annual report to its security holders for
the year ended September 30, 1994.
This prospectus is accompanied by a copy of United's 1994 annual
report to security holders. United will provide, without charge, to each
person to whom a copy of this prospectus is delivered, upon the written or
oral request of any such person, a copy of the above mentioned Form 10-K
(other than certain exhibits). Requests should be directed to John W. White,
Vice President, United Grocers, Inc., Post Office Box 22187, Portland, Oregon
97269-2187, telephone (503) 833-1000.
<PAGE>
PROSPECTUS SUMMARY
The following material summarizes certain matters described in the
prospectus. It is necessarily incomplete and is qualified in its entirety by
reference to the remainder of the prospectus.
United
The Company United Grocers, Inc., 6433 S. E. Lake Road
(Milwaukie, Oregon), Post Office Box 22187,
Portland, Oregon 97269-2187; telephone
(503) 833-1000.
Principal Business A wholesale grocery distributor which operates
as a cooperative. United sells groceries and
related products at wholesale to approximately
360 independent retail grocery stores operated
by its members in Oregon, western Washington
and northern California.
Use of Proceeds of Working capital and general corporate purposes.
Offering
See "Introduction--Use of Proceeds" and "The Company."
Membership Stock
Shares Offered to Retail grocers who have been accepted as
members of United on the basis of 200 shares
per retail store. Membership Stock will also
be issued to members in payment of patronage
dividends and to members who wish to acquire
additional shares for cash.
Price Adjusted book value computed as of the end of
each fiscal year (the Friday nearest
September 30) to be effective for the following
calendar year ($59.50 per share, or $11,900 for
200 shares, during 1995).
Repurchase Under its present bylaws United is obligated to
repurchase shares held by terminated members at
the price at which Membership Stock is then
being offered (book value as of the end of the
fiscal year preceding the year of termination,
adjusted for certain items). A portion of the
repurchase price may, under certain
circumstances, be paid in installments on such
terms as the board of directors determines.
Voting Rights One vote for each shareholder of record.
Transfer Membership Stock is not transferable.
Dividends and Federal It is United's policy not to declare dividends
Tax Consequences other than patronage dividends based upon
members' purchases. The total amount of
patronage dividends (including Membership
Stock) is taxable to individual members when
distributed.
See "Introduction," "The Company" and "Description of Membership Stock."
<PAGE>
Notes
Notes Offered Series J Subordinated Redeemable Capital
Investment Notes.
Interest 5% per annum, payable quarterly. The board of
directors of United has decided to pay interest
at the rate of 6.5% per annum during the period
December 16, 1994, to March 15, 1995, on all
Notes outstanding at any time during that
period. On March 16, 1995, the interest rate
on all Notes will revert to the stated rate of
5% per annum unless the board of directors
takes further action. The decision to pay
interest at 6.5% per annum is a voluntary
action taken by the board of directors in
recognition of prevailing interest rates.
There can be no assurance that the interest
rate on Notes after March 15, 1995, will exceed
5% per annum. The only right evidenced by the
Notes is to receive timely payment of principal
and interest at 5% per annum.
Denominations $100 and multiples thereof.
Price 100% of the principal amount.
Certificates Notes will be noncertificated. The rights of
holders of Notes will be evidenced by the
Investment Note Register maintained by United.
United will provide holders of Notes with
quarterly statements of their Note holdings.
Maturity of Principal On the interest payment date coinciding with,
or next following, the expiration of 10 years
from date of issue.
Prepayment In the event of death of a registered holder or
joint registered holder of a Note, United will
be legally obligated to prepay the Note upon
request of the person entitled to the Note.
Although United has no other obligation to
prepay Notes, its present intention is to
prepay any Note, at any time, upon request of
the holder. Although United's present
intention is to continue this prepayment policy
indefinitely, it may discontinue such policy at
any time. See "Introduction--Notes Offered."
The prepayment price is the principal amount
plus accrued interest.
Type Unsecured, subordinated to Senior Indebtedness.
The amount of Senior Indebtedness outstanding
as of September 30, 1994, was approximately
$67,597,000.
Redemption Redeemable at the option of United during the 7
years prior to maturity at a price equal to
principal plus accrued interest.
Transfer Notes are transferable but no market for Notes
exists or is expected to develop.
Indenture Trustee First Bank National Association.
See "Introduction" and "Description of Notes."
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Selected Financial Data
Fiscal years ended
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Sept. 30 Oct. 1 Oct. 2 Sept. 27 Sept. 28
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income Statement(1):
Net sales and
operating revenues $954,220 $876,985 $896,587 $882,878 $873,685
Income before members'
patronage dividends,
income taxes, and
accounting change 11,294 11,291 13,314 13,126 12,408
Patronage dividends 8,730 9,000 10,211 10,427 10,000
Net income(2)(3) 1,563 1,714 2,723 1,712 1,394
Balance Sheet:
Working capital(4) 45,258 41,819 53,326 61,032 49,912
Total assets(7) 306,836 285,342 261,289 249,205 218,143
Liabilities
Current 147,443 136,809 113,759 112,256 101,179
Long-term 114,669 105,539 104,645 98,685 82,918
Members' equity 40,425 39,112 39,141 36,431 33,299
Adjusted book value 59.50 57.00 53.94 48.99 46.24
per share(5)
Ratio of adjusted income
to fixed charges(1)(6) 1.79 1.85 1.97 2.07 2.05
----------------
(1) In fiscal 1993, United changed its method of accounting for inventories
to the first-in, first-out method. Amounts for prior periods have been
restated to reflect the change. See Note 4 to the consolidated financial
statements appearing in the accompanying annual report to shareholders
("Consolidated Financial Statements").
(2) Earnings per share are not shown because earnings are distributed only in
the form of patronage dividends; under United's policy no earnings are
available for the purpose of paying dividends on the Membership Stock.
(3) In fiscal 1992, United changed its method of accounting for income taxes,
resulting in a one-time increase in net income of $526,314. See Note 7
to the Consolidated Financial Statements.
(4) In fiscal 1992, United changed its method of accounting for investments,
resulting in an increase in current assets at October 2, 1992, of
$26,684,291 and a corresponding decrease in non-current assets. Amounts
for prior periods have been restated to reflect the change. See Note
1.f. to the Consolidated Financial Statements.
(5) Adjusted book value per share, which is the offering price per share, is
computed by subtracting from total members' equity at fiscal year end,
stock to be issued from patronage and paid-in capital on such stock and
undistributed equity from investments accounted for on the equity method
and dividing the resulting amount by shares outstanding at fiscal year
end.
(6) Adjusted income used to compute the ratio of adjusted income to fixed
charges represents net income to which has been added income taxes,
patronage dividends and fixed charges, less capitalized interest. Fixed
charges consist of interest on all indebtedness and that portion of
rentals considered to be the interest factor.
(7) In fiscal 1994, United changed its method of accounting for reinsurance.
Amounts for fiscal 1993 have been restated to reflect the change. See
Note 12 to the Consolidated Financial Statements.
For additional information, reference is made to the Consolidated Financial
Statements and other information incorporated herein by reference as described
under "Incorporation of Certain Documents by Reference."
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<PAGE>
INTRODUCTION
General. United is offering to sell 250,000 shares of its
Membership Stock and $50,000,000 in principal amount of Notes. All sales
will be made by United through its regular employees, who will not receive
any additional remuneration in connection with the sales. No sales will be
made through brokers and there are no underwriters. Membership Stock is not
transferable and there is, therefore, no public market for it. United does
not expect that any public market for Notes will develop. United anticipates
that the securities offered hereby will not all be sold in the immediate
future and that the offerings will, therefore, be made on a continuous basis
over a period of time. There is no assurance that any portion of the
offerings will be sold.
Use of Proceeds. United expects to use the proceeds from the sale
of the securities offered hereby for working capital and general corporate
purposes. To the extent that proceeds are insufficient to meet United's
requirements for working capital at any particular time, United intends to
rely upon increased borrowing from banks. Although United has not in the
past experienced any substantial difficulty in obtaining bank financing,
there can be no assurance that United will be able to obtain additional bank
financing or that it will be able to obtain such financing at interest rates
which it considers reasonable.
Membership Stock Offered. Membership Stock is sold only upon
approval by United's board of directors to retail grocers who have applied
for and been accepted for membership in United. Retail grocers accepted for
membership will thereby gain the right to purchase groceries and related
products from United on a cooperative basis. See "The Company." Membership
Stock is sold in units of 200 shares for each retail store accepted for
membership. Shares will be sold from time to time as United's board of
directors admits additional members and as existing members are accepted for
membership with respect to additional stores. Membership Stock will also be
issued to existing members in partial payment of patronage dividends (see
"The Company") and to members who wish to purchase additional shares for
cash.
Membership Stock is offered at its adjusted book value, as
determined by United's annual audited balance sheet as of the end of each
fiscal year, effective the following January 1. Adjusted book value per
share is computed by subtracting from total members' equity at fiscal year
end, stock to be issued from patronage and paid-in capital on such stock and
undistributed equity from investments accounted for on the equity method, net
of the tax effect, and dividing the resulting amount by shares outstanding at
fiscal year end. At September 30, 1994, the only adjustment for investments
accounted for on the equity method was United's investment in Western Family
Holding Company. The adjusted book value at September 30, 1994, was
$59.50 per share. Thus, the offering price for 200 shares during calendar
year 1994 is $11,900.
From time to time, United sells Membership Stock to new members on
an installment basis. If the board of directors determines that an
applicant's financial standing merits such treatment, Membership Stock may be
issued upon receipt of a cash down payment plus a promissory note or other
undertaking to pay the balance of the purchase price. The amount of the down
payment, interest rate and other terms of installment sales may vary
depending on the applicant's financial standing.
United's bylaws provide that, upon termination of membership,
Membership Stock will be repurchased by United at the price at which
Membership Stock is then being offered (adjusted book value). United's board
of directors may elect to pay the repurchase price in installments upon such
terms as the board of directors determines with respect to any shares held
over and above the number of shares a member was initially required to
purchase upon acceptance to membership. For additional information, see
"Description of Membership Stock." Although United has no other obligation to
repurchase Membership Stock, the board of directors has indicated that it
will consider requests for repurchase of Membership Stock from members which
are corporations upon a bona fide transfer of ownership of the corporate
member.
It is United's policy not to declare dividends other than patronage
dividends based on a member's purchases from United. The total amount of
patronage dividends (including Membership Stock) is taxable to individual
members when distributed. See "The Company."
United's bylaws provide that the number of shares of Membership
Stock which a member is required to purchase shall be established by the
board of directors. The board of directors has decided that, at present,
members must purchase a unit of 200 shares for each retail store for which
they are admitted as members. This number is subject to change from time to
time. There will not be any refund on or redemption of any shares already
purchased as a result of any decrease in the number of shares required for
new stores. Existing members will not be required to purchase additional
shares as a result of any future increase in the number of shares required
per store.
United's bylaws and articles of incorporation also provide that
each holder of record of Membership Stock is entitled to one vote regardless
of the number of shares owned. Thus, a newly admitted member purchasing
200 shares of Membership Stock will have the same voting rights as an
existing member directly holding a greater or lesser number of shares.
Certain members control family corporations or other separate entities that
own shares. Those members may control more than one vote because each
controlled entity is a separate holder of record. See "Description of
Membership Stock."
Under United's present policies, members acquiring additional
Membership Stock may have (i) the possibility, under certain circumstances,
of receiving a greater portion of future patronage dividends in cash (see
"The Company--Deposit") and (ii) the possibility of realizing gain in the
event of future appreciation in the book value of Membership Stock (see
"Description of Membership Stock"). Members considering acquiring additional
shares of Membership Stock should be aware that there can be no assurance
that United's future operations will result in the payment of patronage
dividends or in any appreciation in book value. In the event of losses in
future years, the book value of Membership Stock could decline. Also, as
described more fully under "The Company" and "Description of Membership
Stock," the proportion of patronage dividends to be paid in cash and the
method of payment for repurchased shares of Membership Stock are all subject
to the discretion of United's board of directors, and the right to repurchase
at book value upon termination of membership is subject to change by a vote
of United's members. Acquisition of additional shares of Membership Stock
will not give a member any additional voting rights.
Any increase in the total number of shares outstanding will, of
course, proportionately reduce the effect of future changes in total members'
equity upon book value per share. In other words, future increases or
decreases in members' equity resulting from earnings or losses will have a
lesser effect per share if the total number of shares outstanding is
increased.
Notes Offered. United is offering Notes only in fully registered
form without coupons in denominations of $100 or multiples of $100 at 100% of
principal amount. Notes bear interest at 5% per annum, payable quarterly,
and mature on the interest payment date coinciding with, or next following,
the expiration of 10 years from the date of issue. The board of directors of
United has decided to pay interest at the rate of 6.5% per annum during the
period December 16, 1994, to March 15, 1995, on all Notes outstanding at any
time during that period. On March 16, 1995, the interest rate on all Notes
will revert to the stated rate of 5% per annum unless the board of directors
takes further action. The decision to pay interest at 6.5% per annum is a
voluntary action taken by the board of directors in recognition of prevailing
interest rates. The board expects to review the interest rate paid on Notes
from time to time in light of prevailing interest rates and other factors.
There can be no assurance that the interest rate on Notes after March 15,
1995, will exceed 5% per annum. The only right evidenced by the Notes
offered hereby is to receive timely payment of principal and interest at 5%
per annum.
Notes are issued as noncertificated Notes. The rights of Note
holders are evidenced by the Investment Note Register. Note holders are
therefore dependent on the Investment Note Registrar to maintain accurate
records regarding their Note holdings. United presently serves as Investment
Note Registrar. Because there is no certificate, Notes may not be readily
saleable. However, no market for Notes exists or is expected to develop.
Notes are unsecured and are subordinated in right of payment to
Senior Indebtedness (as defined, see "Description of Notes--Subordination")
in the event of any liquidation or dissolution. The amount of Senior
Indebtedness at September 30, 1994, was approximately $67,597,000 (consisting
of approximately $61,991,000 in unsubordinated long-term debt and
approximately $5,606,000 in current liabilities). Notes may be redeemed at
United's option during the 7 years prior to maturity at a redemption price
equal to their principal amount plus accrued interest. For additional
information, see "Description of Notes."
Upon the death of a registered holder or joint registered holder,
United will be legally obligated to prepay the Note upon request of the
person entitled to the Note. United may require evidence of death before
making prepayment. Although United has no other legal obligation to prepay
Notes, its present intention is to prepay any Note, at any time, upon request
of the holder. The prepayment price upon death or under United's prepayment
policy is the principal amount of the Note plus accrued interest.
United's prepayment policy may provide holders of Notes with
liquidity which they might not otherwise have. Although United's present
intention is to continue its prepayment policy indefinitely, it may
discontinue such policy at any time. In the event that United discontinues
its prepayment policy, holders of Notes might, because of the absence of an
established market, be unable to sell their Notes prior to maturity or might
be unable to sell the Notes other than at a price below their principal
amount.
It is anticipated that most sales of Notes will be made to members
of United, friends and relatives of members, key employees and other persons
with existing relationships with United. United allows members to purchase
Notes on a regular basis by adding the purchase price to any such member's
weekly invoice for grocery purchases.
THE COMPANY
General. United, a wholesale grocery distributor, is an Oregon
business corporation organized in 1915 which operates and is taxed as a
cooperative.
It supplies groceries and related products to independent retail
grocers located in Oregon, western Washington and northern California.
United's goal is both to supply grocery products to retailers at prices which
enable them to compete effectively in the retail market and to furnish them
other services, such as marketing assistance, engineering, accounting,
financing, and insurance, which are important to the successful operation of
a retail grocery business.
United also sells groceries and related products at wholesale
through 28 cash-and-carry depots, principally to nonmember grocers,
restaurants, and institutional buyers.
United's board of directors consists of nine members serving
staggered three-year terms, and they may not be elected to consecutive terms.
Directors, all grocers, must either be proprietors or partners owning a
membership in United or the holder of a substantial interest in a corporation
owning a membership in United. United's directors are Gilbert A. Foster,
H. Lawrence Montgomery, Marlin A. Smythe, Dennis Blasingame, Craig Danielson,
James C. Vickers, David Neal, Peter J. O'Neal, and Raymond L. Nidiffer.
The management of the corporation is under the direction of a
President and Chief Executive Officer who is employed and guided by the board
of directors.
Additional information is set forth in the documents incorporated
herein by reference.
Membership. United has approximately 250 members operating a total
of approximately 360 retail grocery stores. All applicants for membership,
who must be retail grocers, are subject to approval by United's board of
directors on the basis of financial responsibility and operational ability.
On approval, applicants are required to purchase shares of United's
Membership Stock.
Upon termination of membership, a member's shares of Membership
Stock are redeemed. Sales and redemptions of Membership Stock are made at
adjusted book value. Adjusted book value for this purpose is determined
according to United's most recent annual audited balance sheet, adjusted for
certain items, effective for the following calendar year. See "Description
of Membership Stock."
United's board of directors may elect to pay the repurchase price
in installments with respect to any shares held over and above the number of
shares a member was initially required to purchase upon acceptance to
membership. See "Description of Membership Stock."
The following table shows the adjusted book value per share of
Membership Stock for the past five years:
Fiscal years ended
--------------------------------------------------------
Sept. 30 Oct. 1 Oct. 2 Sept. 27 Sept. 28
1994 1993 1992 1991 1990
-------- ------ ------ -------- --------
Adjusted book
value per share $59.50 $57.00 $53.94 $48.99 $46.24
The issuance of the additional shares offered hereby may result in
substantial dilution of the rate of increase or decrease in adjusted book
value per share. See "Introduction."
Cost Savings. By pooling the buying power of its members, United
is able to purchase goods in large quantities at prices lower than the prices
generally available to independent retail grocers. The savings from the bulk
purchases are passed along to members in the form of rebates, allowances and
patronage dividends.
Sales to members are invoiced to their accounts at prices contained
in United's order guide. While the complex pricing systems used in the
wholesale grocery industry make item-by-item price comparisons impracticable,
United believes that its pricing structure, including the various cost
savings available to members, compares favorably on an overall basis with the
pricing structures of its competitors. A cost equalization program results
in the addition or subtraction of a percentage of the member's weekly invoice
cost based on the member's average weekly purchases for the preceding four
weeks, excluding drop shipment purchases. The cost equalization percentages
are designed to reflect the economies of scale realized by United in
servicing larger accounts.
Rebates and allowances are paid to members periodically based upon
their purchases of particular items or their promotional and advertising
performance. Generally, such rebates and allowances stem from United's
margins and the merchandising or promotional programs of United's suppliers.
The amount of rebates and allowances paid to members with respect to
particular items may vary from the amount realized by United from its
suppliers.
United also pays its members annual patronage dividends based on
the overage, or excess of revenues over expenses, on sales to members for the
year. Each year United's board of directors determines the portion of the
overage which is to be distributed as patronage dividends. For fiscal year
1994, the board decided to distribute 95% of the overage that was available
for distribution. Decisions concerning the portion of overage to be retained
are based upon various factors, including United's future capital needs and
the amount of earnings available from operations not qualifying for
distribution as patronage dividends. The patronage dividends are allocated
among the members in proportion to the contribution to United's gross profit
(before rebates and allowances) attributable to their purchases from United.
The patronage dividends are paid partly in cash and partly in Membership
Stock. See "Deposit."
As a result of cost equalization, rebates, allowances and patronage
dividends, the total cost savings each member realizes will vary depending on
the member's volume of purchases and merchandising of particular products.
Patronage Dividends and Tax Matters. The following discussion
summarizes the operation of certain aspects of the federal income tax
treatment of cooperatives. The tax treatment of cooperatives is subject to
change from time to time as the Internal Revenue Code of 1986, as amended
("Code"), is amended and as new regulations and interpretations are
periodically adopted.
United operates and is taxed as a cooperative. Accordingly,
patronage dividends are not included in United's taxable income but are
instead taxed to the individual members receiving the patronage dividends.
The Code requires that not less than 20% of each member's patronage
dividend be paid in cash. It is United's policy to at least meet that
minimum requirement and to pay the balance of patronage dividends in
Membership Stock. See "Deposit" for information regarding the method used by
United to determine the patronage dividends to be paid in cash in excess of
the Code's minimum requirement.
Members are required to agree to abide by all United's bylaw
provisions, including those applicable to federal income taxation of
patronage dividends. Accordingly, members must report as taxable income the
total amount of patronage dividends, including the adjusted book value of
Membership Stock, in the year such patronage dividends are received, and such
amounts are not taxable to United.
United is taxed on income which does not qualify for distribution
as patronage dividends and on the portion of overage which is not distributed
to members. United's subsidiaries generally retain all profits (or losses)
from their operations and are subject to all applicable income taxes.
Deposit. Members are encouraged to accumulate holdings of
Membership Stock. Such holdings are referred to in the cooperative grocery
trade as "Deposits," although the Membership Stock is not physically
deposited with United. The amount of a member's Deposit is defined to be the
adjusted book value of his or her Membership Stock. The Deposit does not
include notes representing United's obligation to pay the deferred balance of
the price of Membership Stock repurchased from members or Capital Investment
Notes. The Deposit is used to:
a. Provide a guarantee fund for the member's purchases on open
account.
b. Ensure the funding of United's operations.
c. Serve as a basis for calculating cash patronage dividends. The
method of calculation is intended to encourage members to maintain
Deposits of at least one and one half times their average weekly
purchases ("AWP") from United. AWP is the average of a member's weekly
purchases of all items from United during the fiscal year for which
patronage dividends are being calculated.
In recent years, the noncash portion of patronage dividends has
been paid in Membership Stock, and it is anticipated that future payments
will also be made in Membership Stock. The board's present policy is to pay
patronage dividends as follows:
1. If the Deposit is less than one and one half times AWP, the
member's patronage dividend is paid 20% in cash and 80% in Membership
Stock.
2. If the Deposit equals or exceeds one and one half times AWP but
is less than 4,000 shares, the member's patronage dividend is paid 80%
in cash and 20% in Membership Stock.
3. If the Deposit equals or exceeds one and one half times AWP and
is at least 4,000 shares, the member's patronage dividend is paid 100%
in cash.
4. In the case of multiple store operations, Deposit and AWP
requirements are applied on a per store basis.
5. If a member's Deposit exceeds 4,000 shares of Membership Stock
per store, excess shares may be submitted for redemption over a five-
year period. Twenty percent of the shares submitted for each store
will be redeemed each year at the current share price for that year.
The board's Deposit policy is subject to change from time to time.
Although the board expects to retain the general principle of paying
increasing portions of patronage dividends in cash as a member's Deposit
increases, the board may, in the future, decide to consider additional
factors in the payment of patronage dividends. Therefore, there can be no
assurance that the purchase of Membership Stock by a member will result in
the member's receiving any particular portion of future patronage dividends
in cash.
DESCRIPTION OF MEMBERSHIP STOCK
United's authorized Membership Stock consists of 10,000,000 shares
of Membership Stock, $5 par value. Membership Stock is sold only to members
of United. All members must be actively engaged in the retail grocery
business and must be approved by the board of directors, primarily on grounds
of financial responsibility and operational ability, before being admitted to
membership.
Each member must purchase the number of shares of Membership Stock
as determined by the board of directors for each retail store the member
operates. Each shareholder of record is entitled to one vote, regardless of
the number of shares owned. Certain members control family corporations or
other separate entities that own shares. Those members may control more than
one vote because each controlled entity is a separate holder of record.
Voting for directors is noncumulative.
Membership Stock is not transferable and is not negotiable. Under
United's bylaws all shares are sold at adjusted book value and, upon a
member's death, retirement, voluntary withdrawal, expulsion or cessation of
purchases from United, will be repurchased by United at adjusted book value
as determined by United's annual audited balance sheet as of the end of each
fiscal year, effective the following January 1. Adjusted book value per
share is computed by subtracting from total members' equity, stock to be
issued from patronage and paid-in capital on such stock and undistributed
equity from investments accounted for on the equity method, net of the tax
effect, and dividing the resulting amount by shares outstanding at fiscal
year end (as restated for any stock splits, stock dividends or similar
changes). United's bylaws provide that the repurchase price for any shares
over and above the number of shares the member was required to purchase as a
condition of membership for a retail store or stores may, in the discretion
of United's board of directors, be paid in 20 quarterly installments with
interest at the same rate being paid from time to time (presently 6.5%) on
United's Capital Investment Notes then being offered or in such other manner
as the board of directors may from time to time determine.
United's board has adopted a policy, subject to change without
notice, requiring United to repurchase on request the number of shares a
member owns in excess of 4,000. The excess shares are repurchased over a
five-year period at the current adjusted book value each year, payable in
cash.
United's obligation to repurchase the shares of members is subject
to the general limitations imposed by the Oregon Business Corporation Act
that United may not purchase shares if, after giving the purchase effect,
United would not be able to pay its debts as they become due in the usual
course of business or United's total assets would be less than its total
liabilities.
A member is subject to expulsion by the board of directors for the
following reasons: (l) disclosure to nonmembers of confidential information
relating to United's business, (2) abuse of office by officers, (3) purchase
of goods for the benefit of a nonmember, (4) commission of a felony, (5)
violation of the corporation's bylaws, or (6) action to the detriment of the
corporation. Since 1954, no members have been expelled. Patronage dividends
for the fiscal year in which a membership is terminated are paid in cash
following the end of the fiscal year, based on the member's purchases from
United during the fiscal year. All bylaw provisions, including those
relating to the repurchase of Membership Stock at adjusted book value, are
subject to amendment by a vote of a two-thirds majority of the quorum of
shares voting on such amendment.
Shares of Membership Stock are issued from time to time upon
payment of less than the full purchase price. Upon payment of the full
purchase price, shares of Membership Stock are fully paid and nonassessable.
A member's interest in the adjusted book value of shares of Membership Stock,
is, however, subject to being set off against any debts of the member to
United or its subsidiaries.
The shares of Membership Stock are entitled to share pro rata in
any liquidating distributions and dividends other than patronage dividends.
It is not the policy of the board of directors to declare any dividends other
than patronage dividends. In the event of any liquidation of United, the
rights of holders of Membership Stock with respect to any liquidating
distributions and the rights of former holders of Membership Stock with
respect to any deferred payments due them would be subordinated to all other
claims against United's assets.
Shares of Membership Stock are not subject to any sinking fund
provisions and have no conversion rights.
DESCRIPTION OF NOTES
The Notes offered hereby are issued as the ninth series of Capital
Investment Notes under an indenture dated as of February 1, 1978, between
United and United States National Bank of Oregon, as trustee ("U. S. Bank"),
as supplemented by supplemental indentures dated as of August 15, 1979,
November 11, 1981, December 15, 1984, December 15, 1986, January 27, 1989,
January 22, 1991, July 6, 1992, and January __, 1995, (which indenture, as so
supplemented, is herein referred to as the "Indenture"). First Bank National
Association ("Trustee") has assumed U. S. Bank's rights and obligations as
trustee under the Indenture. A copy of the Indenture is on file with the
Securities and Exchange Commission as an exhibit to the registration
statement of which this prospectus forms a part. The following description
summarizes certain provisions of the Indenture and is subject to the detailed
provisions of the Indenture, to which reference is hereby made for a complete
statement of such provisions. Whenever particular Sections or terms defined
in the Indenture are referred to herein, such Sections or definitions are
incorporated by reference. References in parentheses are to Sections of the
indenture dated as of February 1, 1978, except that references marked with an
asterisk (*) are to Sections of the supplemental indenture dated as of
January __, 1995. See "Additional Information."
General. Notes bear interest from the date of issue at the stated
annual rate indicated on the cover page of this prospectus. United may,
under the Indenture, issue Notes at other interest rates, but no change in
interest rates may affect the stated interest rate on Notes then outstanding.
Interest is paid on the 15th day of March, June, September, and December for
the quarters ending on those dates to the persons in whose names the Notes
are registered as of the last business day of the calendar month preceding
the payment date. (Secs. 3.06 and 4.02*)
Notes mature on the interest payment date which is on, or next
following, the date ten years from the date of issue, are unsecured
obligations of United and are limited to $50,000,000 aggregate principal
amount, all of which is being offered pursuant to this prospectus. Notes are
issuable only in registered form, without coupons, in denominations of $100
or any multiple of $100 approved by United. Notes are issued as
noncertificated Notes. (Secs. 1.15, 3.02, 2.01*, 4.01* and 4.02*)
Principal and interest on all Notes are payable at the principal
office of United in Clackamas County, Oregon, provided that, at the option of
United, interest and principal payments on Notes may be made by check mailed
to the address of the registered holders of the Notes. United intends to pay
interest and principal by check. (Secs. 3.01, 7.02 and 3.03*) United will
exchange Notes for other Notes of the same series and of a like principal
amount and having the same terms and conditions upon written request of the
holder. No service charge will be made to the holder for any exchange or
transfer, except for any tax or governmental charge incidental thereto.
(Secs. 3.04 and 3.04*) United is required to mail quarterly statements of
Note holdings to holders of Notes. (Sec. 4.03*)
United may from time to time without the consent of any holder of
an outstanding Note issue under the Indenture, by means of an indenture
supplemental thereto, additional Capital Investment Notes having different
terms and of a series other than the Notes. The amount of additional Capital
Investment Notes or other debt which may be issued by United is not limited
by the Indenture. (Sec. 4.01)
The Indenture does not contain any covenant or provision that
protects the holders of Notes against a reduction in the value of the Notes
resulting from a highly leveraged transaction, whether or not such
transaction involves a change in control of United. Similarly, no holder of
Senior Indebtedness of United at September 30, 1994, is protected against a
reduction in the value of Senior Indebtedness held by such holder resulting
from a highly leveraged transaction, except that certain agreements relating
to Senior Indebtedness require that United maintain specified financial
ratios.
Prepayment. Although United is not obligated to prepay Notes
except in the event of the death of a registered holder, United's present
intention is to prepay the principal amount of any Note, together with
accrued interest to the date of payment, at any time upon the request of the
holder.
In the event of the death of a registered holder or joint
registered holder of a Note, United is obligated, at the option of the person
legally entitled to become the holder of the Note, to prepay the principal
amount of the Note, together with accrued interest to the date of payment.
Any request for prepayment must be made to United in writing. United may, as
a condition precedent to the prepayment, require the submission of evidence
satisfactory to United of the death of the registered holder or joint
registered holder and such additional documents or other material as it may
consider necessary to establish the person entitled to become the holder of
the Note or such other facts as it considers relevant to the fulfillment of
its prepayment obligation. (Sec. 5.01*)
Redemption. The Notes may be redeemed at the election of United
during the seven years prior to maturity at their principal amount, plus
accrued interest, upon not less than 30 days' notice by mail to the
registered holder. United, in its sole discretion, may designate for
redemption Notes maturing on specified dates or bearing specified interest
rates. If less than all the Notes with a specified maturity date or interest
rate are to be redeemed, the Trustee shall select the particular Notes to be
redeemed in whole or in part. (Secs. 5.02* and 5.03*) No interest on Notes
selected for redemption will accrue after the date fixed for redemption.
(Sec. 5.04*)
Subordination. Payment of the principal of, and interest on, the
Notes is subordinated in the manner and to the extent set forth in the
Indenture in right of payment to the prior payment in full of all Senior
Indebtedness. (Sec. 6.01*) Senior Indebtedness is defined as indebtedness of
United, whether outstanding on the date of the Indenture or thereafter
incurred, (a) for money borrowed by United (other than indebtedness evidenced
by Capital Investment Notes and Registered Redeemable Building Notes);
(b) for money borrowed by others and guaranteed by United; (c) constituting
purchase money indebtedness incurred for the purchase of tangible property
and for the payment of which United is directly or contingently liable;
(d) arising under any document creating an absolute or contingent obligation
of United to purchase promissory notes and related documents from third
parties; or (e) for fees, expenses, and other obligations of United due in
connection with indebtedness of United that constitutes Senior Indebtedness,
unless by the terms of the instrument creating or evidencing the indebtedness
it is provided that such indebtedness is not superior in right of payment to
the Notes. (Secs. 1.01* and 6.01*) The Indenture does not limit the amount
of Senior Indebtedness which United may incur.
The Indenture provides that, in the event of and during the
continuation of any default on any Senior Indebtedness, no payment may be
made on the Notes or for the redemption or purchase of Notes. (Sec. 6.03*)
Upon any distribution of assets of United, upon any liquidation, dissolution,
winding up or reorganization of United, whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors,
or other proceeding, all principal of (and premium, if any) and interest on
all Senior Indebtedness must be paid in full before the holders of the Notes
are entitled to receive or retain any payment. Subject to the payment in
full of all Senior Indebtedness, the holders of the Notes are subrogated to
the rights of the holders of the Senior Indebtedness to receive distributions
of assets of United applicable to Senior Indebtedness until the Notes are
paid in full. (Sec. 6.02*) By reason of such subordination, in the event of
insolvency, creditors of United who are holders of Senior Indebtedness may
recover more, ratably, than the holders of the Notes, and creditors of United
who are not holders of Senior Indebtedness or of the Notes may recover less,
ratably, than the holders of Senior Indebtedness, and may recover more,
ratably, than the holders of the Notes.
Modification of Indenture. Modifications and amendments of the
Indenture may be made by United and the Trustee with the consent of the
holders of 66 2/3% in principal amount of the Capital Investment Notes of all
series then outstanding, provided that no such modification or amendment may,
without the consent of the holder of each Note affected thereby, (a) change
the maturity date of the principal or the interest payment dates; (b) reduce
the principal amount of or the interest on any Note; (c) change the currency
of payment; (d) impair the right to institute suit for the enforcement of any
such payment on or after the maturity date or the Redemption Date, as the
case may be; or (e) reduce the above-stated percentage of holders of Capital
Investment Notes necessary to modify or amend the Indenture. (Sec. 13.02)
Events of Default; Notice and Waiver. The following constitute
Events of Default: (a) default in the payment of any interest continued for
30 days; (b) default in the payment of the principal of (or premium, if any,
on) any Capital Investment Note at its maturity; (c) default in the
performance of any other covenant or warranty of United, continued for 60
days after written notice as provided in the Indenture; (d) acceleration of
any Senior Indebtedness of United as a result of a default with respect
thereto if such acceleration is not rescinded within 30 days after written
notice as provided in the Indenture; and (e) certain events in bankruptcy,
insolvency or reorganization. (Sec. 9.01) If an Event of Default shall
happen and be continuing, the Trustee or the holders of not less than 25% in
principal amount of outstanding Capital Investment Notes may declare the
principal of all the Capital Investment Notes to be due and payable
immediately. (Sec. 9.02)
The Indenture provides that the Trustee will, within 90 days after
the occurrence of a default, give to the holders of Capital Investment Notes
notice of such default known to it, unless such default shall have been cured
or waived; but, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any of the Capital
Investment Notes, the Trustee shall be protected in withholding such notice
if it in good faith determines that the withholding of such notice is in the
interest of such holders. (Sec. 9.14)
The holders of a majority in principal amount of the outstanding
Capital Investment Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any
trust or power conferred on the Trustee, provided that such direction shall
not be in conflict with any rule of law or the Indenture. (Sec. 9.12) Before
proceeding to exercise any right or power under the Indenture at the
direction of such holders, the Trustee is entitled to receive from such
holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with any such
direction. (Sec. 10.02)
The holders of not less than a majority in principal amount of the
outstanding Capital Investment Notes may, on behalf of the holders of all the
Capital Investment Notes, waive any past default except (a) a default in the
payment of principal of (or premium, if any) or interest on any Capital
Investment Note, and (b) a default in respect of a covenant or provision of
the Indenture which cannot be amended without the consent of the holder of
each Capital Investment Note affected. (Sec. 9.13)
United is required to furnish to the Trustee annually a statement
as to the fulfillment by United of all its obligations under the Indenture.
(Sec. 7.06)
Other. The Notes have no sinking fund provisions. The Indenture
contains no restrictions on the dividends that may be paid by United and
imposes no obligations with respect to the maintenance of reserves, levels of
net worth, liabilities, working capital or the like.
Regarding the Trustee. United has no agreements or business
relationships with the Trustee other than those contained in or contemplated
by the Indenture. The Trustee is required to furnish annual reports to
holders of Notes as to certain matters relating to the Notes, the Trustee's
performance and the Trustee's eligibility to act as Trustee. (Sec. 8.03)
LEGAL MATTERS
The validity of the Membership Stock and Notes offered hereby have
been passed upon for United by Miller, Nash, Wiener, Hager & Carlsen,
Portland, Oregon, who have acted as special counsel to United in connection
with this offer.
EXPERTS
The consolidated financial statements of United incorporated in
this prospectus by reference have been audited by DeLap, White & Raish,
independent certified public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of
said firm as experts in auditing and accounting in giving said report.
ADDITIONAL INFORMATION
This prospectus omits certain information contained in a
registration statement filed by United with the Securities and Exchange
Commission. For further information, reference is made to
the registration statement, including the financial schedules and exhibits
filed as a part thereof. See "Statement of Available Information."
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
a. Registration fees $ 22,370.85
b. Printing, mailing and engraving costs 6,000.00*
c. Legal fees 25,000.00*
d. Accounting fees 20,000.00*
e. Blue sky fees 4,196.88
f. Other 7,432.27*
-----------
Total $85,000.00*
==========
* Expense is estimated.
Item 15. Indemnification of Directors and Officers
Section 60.367 of Oregon Revised Statutes (a part of the Oregon
Business Corporation Act) provides in substance that any director held liable
pursuant to that section for the unlawful payment of a dividend or other
distribution of assets of a corporation shall be entitled to contribution
from the shareholders who accepted the dividend or distribution, knowing the
same to have been made in violation of said Act or the articles of
incorporation. The section also provides that any such director shall be
entitled to contribution from the other directors who voted for or assented
to the dividend or distribution without complying with the applicable
standards of conduct prescribed by said Act.
As authorized by said Act, Article V of the registrant's restated
articles of incorporation provides:
"ARTICLE V
"A. Indemnification; Actions and Suits Other than by the
Corporation. Any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or by
reason of any action taken or not taken in his capacity as such
director, officer, employee or agent may be indemnified by the
corporation against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding, including any appeal relating thereto, if he acted
in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person
(i) did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the
corporation or (ii) with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
"B. Indemnification; Actions and Suits by the Corporation.
Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by
or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action
taken or not taken in his capacity as such director, officer,
employee or agent, may be indemnified by the corporation against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit, including any appeal relating thereto, if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the
extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
"C. Indemnification as a Matter of Right. To the extent
that a person referred to in Sections A and B of this Article has
been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections A and B of
this Article, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him in
connection therewith, as a matter of right.
"D. Indemnification Other Than as a Matter of Right. Any
indemnification under Sections A and B of this Article of a
person referred to therein (unless ordered by a court) shall be
made by the corporation only as authorized in the specific case
upon a determination that indemnification is proper in the
circumstances because the applicable standard of conduct set
forth in Sections A and B of this Article, as the case may be,
has been met. Such determination shall be made (i) by the Board
of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or
proceeding, (ii) if such a quorum is not obtainable, or, even if
obtainable, and a quorum of disinterested directors so directs by
independent legal counsel in a written opinion, or (iii) by the
shareholders.
"E. Payment of Expenses in Advance. Expenses incurred in
defending a civil or criminal action, suit or proceeding, may be
paid by the corporation in advance of the final disposition of
such action, suit or proceeding, as authorized in the manner
provided in Section D of this Article upon receipt of an
undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
"F. Provision Not Exclusive. The indemnification provided
by this Article shall not be deemed exclusive of any other rights
to which those indemnified may be entitled under any other
provision of these Restated Articles of Incorporation, or any
bylaw, agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
"G. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising
out of his status as such, whether or not the corporation has the
authority or obligation to indemnify him against such liability
under the provisions of this Article."
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("1933 Act") 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 1933 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 the 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 1933 Act and will be governed by
the final adjudication of such issue.
The registrant maintains a policy of insurance (incorporated by
reference in Exhibit 10-B hereto) which provides for coverage of certain of
the registrant's obligations under this provision. The undertaking of the
registrant in the preceding paragraph shall not apply to insurance against
liability arising under the 1933 Act.
Item 16. Exhibits.
The exhibits are listed in the accompanying index to exhibits.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the 1933 Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in
the information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is specifically incorporated
by reference in the prospectus to provide such interim financial information.
See Item 15 regarding the Securities and Exchange Commission's
position on indemnification.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Milwaukie, State of Oregon, on
January 6, 1995.
UNITED GROCERS, INC.
(Registrant)
By:/s/ JOHN W. WHITE
John W. White, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 6, 1995.
Name Title
Principal executive officer
* ALAN C. JONES President
Alan C. Jones Secretary and Treasurer
Principal financial officer and
principal accounting officer
/s/ JOHN W. WHITE Vice President and
John W. White Chief Financial Officer
A majority of the Board of Directors
* GILBERT A. FOSTER Director
Gilbert A. Foster
* H. LAWRENCE MONTGOMERY Director
H. Lawrence Montgomery
* MARLIN A. SMYTHE Director
Marlin A. Smythe
* DENNIS BLASINGAME Director
Dennis Blasingame
* CRAIG DANIELSON Director
Craig Danielson
* JAMES C. VICKERS Director
James C. Vickers
* DAVID NEAL Director
David Neal
* PETER J. O'NEAL Director
Peter J. O'Neal
* RAYMOND L. NIDIFFER Director
Raymond L. Nidiffer
* By /s/ JOHN W. WHITE
John W. White
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.A. Form of certificate representing shares of the registrant's
common stock, $5 par value (incorporated by reference to
Exhibit 4-A to the registrant's registration statement on
Form S-2, No. 33-26631).
4.B. Copy of indenture dated as of February 1, 1978, between the
registrant and United States National Bank of Oregon, as
trustee, relating to the registrant's Capital Investment Notes
(incorporated by reference to Exhibit 4-I to the registrant's
registration statement on Form S-1, No. 2-60488).
4.C. Form of supplemental indenture between the registrant and First
Bank National Association, as trustee, relating to the
registrant's Series J 5% Subordinated Redeemable Capital
Investment Notes.
4.D. Copy of the registrant's restated articles of incorporation, as
amended (incorporated by reference to Exhibit 4-E to the
registrant's registration statement on Form S-2, No. 33-26631).
4.E. Copy of the registrant's bylaws, as amended (incorporated by
reference to Exhibit 4-F to the registrant's registration
statement on Form S-2, No. 33-26631).
5. Opinion of Miller, Nash, Wiener, Hager & Carlsen.
10.A1. Copy of United Grocers, Inc. pension plan and trust agreement
dated as of October 1, 1985 (incorporated by reference to
Exhibit 10-A to the registrant's registration statement on
Form S-2, No. 33-11212).
10.A2. Copy of first amendment to United Grocers, Inc. pension plan
and trust agreement dated as of October 1, 1987 (incorporated
by reference to Exhibit 10-B to post-effective amendment No. 1
to the registrant's registration statement on Form S-2,
No. 33-11212).
10.A3. Copy of policy summary and related documents pertaining to a
life insurance policy for Alan C. Jones, President of the
registrant, purchased pursuant to the registrant's supplemental
executive retirement plan (incorporated by reference to Exhibit
10-E to the registrant's Form 10-K for the fiscal year ended
September 28, 1990).
10.A4. Copy of registrant's executive deferred compensation plan
(incorporated by reference to Exhibit 10-U to the registrant's
Form 10-K for the fiscal year ended September 27, 1991).
10.A5. Copy of executive compensation agreement dated March 1, 1991
(incorporated by reference to Exhibit 10-T to the registrant's
Form 10-K for the fiscal year ended September 27, 1991).
10.B. Copy of binder of insurance with respect to indemnification of
officers and directors, as described under Item 15
(incorporated by reference to Exhibit 10-C to the registrant's
Form 10-K for the fiscal year ended October 1, 1993).
10.C1. Copy of credit agreement of July 31, 1991, among the
registrant, United States National Bank of Oregon,
Seattle-First National Bank, and Security Pacific Bank Oregon
(incorporated by reference to Exhibit 4-H to the registrant's
Form 10-K for the fiscal year ended September 27, 1991).
10.C2. Copy of amendments 1, 2, and 3 to credit agreement of July 31,
1991, among the registrant, United States National Bank of
Oregon, Seattle-First National Bank, and Security Pacific Bank
Oregon, dated as of August 19, 1991, December 20, 1991, and
March 13, 1992 (incorporated by reference to Exhibit 4-C2 to
the registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.C3. Copy of amendment 4 to credit agreement of July 31, 1991, among
the registrant, United States National Bank of Oregon, Seattle-
First National Bank, and Bank of America Oregon (successor
organization to Security Pacific Bank Oregon), dated as of
April 20, 1993 (incorporated by reference to Exhibit 4-C3 to
the registrant's Form 10-K for the fiscal year ended October 1,
1993).
10.C4. Copy of amendment 5 to credit agreement of July 31, 1991, and
amendment to notes, among the registrant, United States
National Bank of Oregon, Seattle-First National Bank, and Bank
of America Oregon (successor organization to Security Pacific
Bank Oregon), dated as of May 28, 1993 (incorporated by
reference to Exhibit 4-C4 to the registrant's Form 10-K for the
fiscal year ended October 1, 1993).
10.C5. Copy of promissory notes to United States National Bank of
Oregon, Seattle-First National Bank, and Bank of America Oregon
(successor organization to Security Pacific Bank Oregon), dated
as of April 20, 1993 (incorporated by reference to Exhibit 4-C5
to the registrant's Form 10-K for the fiscal year ended
October 1, 1993).
10.C6. Copy of amendments 6 and 7 to credit agreement and amendments
to notes of July 31, 1991 among the registrant, United States
National Bank and Seattle First National Bank, dated as of
October 29, 1993 and January 28, 1994 (incorporated by
reference to Exhibits 10.A. and 10.B. to the registrant's Form
10-Q for the quarterly period ended April 1, 1994).
10.C7. Copy of amendment 8 to credit agreement and amendment to
revolving line notes and operating line notes of July 31, 1991,
among the registrant, United States National Bank of Oregon and
Seattle-First National Bank, dated as of February 22, 1994
(incorporated by reference to Exhibit 4.C7 to the registrant's
Form 10-K for the fiscal year ended September 30, 1994).
10.C8. Copy of amendment 9 to credit agreement and amendment to
revolving line notes and operating line notes of July 31, 1991,
among the registrant, United States National Bank of Oregon and
Seattle-First National Bank, dated as of April 30, 1994
(incorporated by reference to Exhibit 4.C8 to the registrant's
Form 10-K for the fiscal year ended September 30, 1994).
10.C9. Copy of note agreement dated as of September 20, 1991, and
Senior Notes dated September 24, 1991, among the registrant and
various purchasers (incorporated by reference to Exhibit 4-I to
the registrant's Form 10-K for the fiscal year ended
September 27, 1991).
10.C10. Copy of Promissory Note, Assignment of Rents and Leases, Deed
of Trust, Financing Agreement and Security Agreement, and
Environmental Indemnity Agreement dated as of September 30,
1993, between the registrant and United of Omaha Life Insurance
Company, relating to the registrant's construction of a new
office building (incorporated by reference to Exhibit 4-E to
the registrant's Form 10-K for the fiscal year ended October 1,
1993).
10.C11. Interest rate and currency exchange agreement dated as of
April 22, 1993, between the registrant and Bank of America
National Trust and Savings Association (incorporated by
reference to Exhibit 10-C19 to Post-Effective Amendment No. 1
to the registrant's registration statement on Form S-2, No. 33-
57272).
10.C12. Copy of Loan Purchase and Servicing Agreement dated as of
May 13, 1994, between United Resources, Inc., as Seller and
Servicer, the registrant, as Guarantor, and National Consumer
Cooperative Bank, as Buyer, relating to the selling of loans
originated by the registrant's subsidiary, United Resources,
Inc. (incorporated by reference to Exhibit 4.F1 to the
registrant's Form 10-K for the fiscal year ended September 30,
1994).
10.C13. Copy of First Amendment to Loan Purchase and Servicing
Agreement dated as of May 13, 1994, between United Resources,
Inc., the registrant, and National Consumer Cooperative Bank
(incorporated by reference to Exhibit 4.F2 to the registrant's
Form 10-K for the fiscal year ended September 30, 1994).
10.C14. Copy of Note Agreement dated October 10, 1994, between the
registrant and Phoenix Home Life Mutual Insurance Company
(incorporated by reference to Exhibit 4.G to the registrant's
Form 10-K for the fiscal year ended September 30, 1994).
10.D1. Typical forms executed in connection with loans to members,
including directors:
10.D1a. Installment note (Stevens-Ness form 217), with optional
interest rate riders (incorporated by reference to
Exhibit 10-D1a to the registrant's Form 10-K for the fiscal
year ended October 2, 1992).
10.D1b. Promissory note (Stevens-Ness form 216), with optional interest
rate riders (incorporated by reference to Exhibit 10-D16 to the
registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.D1c. Subsequent note (three forms) (incorporated by reference to
Exhibit 10-D1c to the registrant's Form 10-K for the fiscal
year ended October 2, 1992).
10.D1d. Loan agreement (two forms) (incorporated by reference to
Exhibit 10-D1d to the registrant's Form 10-K for the fiscal
year ended October 2, 1992).
10.D1e. Loan agreement for subsequent notes (incorporated by reference
to Exhibit 10-D1e to the registrant's Form 10-K for the fiscal
year ended October 2, 1992).
10.D1f. Amendment to loan and security agreements, including optional
clauses (incorporated by reference to Exhibit 10-D1f to the
registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.D1g. Security agreement (Stevens-Ness form 1201) (incorporated by
reference to Exhibit 10-D1g to the registrant's Form 10-K for
the fiscal year ended October 2, 1992).
10.D1h. Purchase money security agreement (Stevens-Ness form 1202)
(incorporated by reference to Exhibit 10-D1h to the
registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.D1i. Security agreement for equipment (Stevens-Ness form 1203)
(incorporated by reference to Exhibit 10-D1i to the
registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.D1j. Inventory loan and security agreement (Stevens-Ness form 1206)
(incorporated by reference to Exhibit 10-D1j to the
registrant's Form 10-K for the fiscal year ended October 2,
1992).
10.D1k. Security agreement (equipment and inventory) (incorporated by
reference to Exhibit 10-D1k to the registrant's Form 10-K for
the fiscal year ended October 2, 1992).
10.D1l. Security agreement for subsequent notes (incorporated by
reference to Exhibit 10-D1l to the registrant's Form 10-K for
the fiscal year ended October 2, 1992).
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the
registrant has filed the forms listed above in lieu of filing
each document executed in connection with loans to directors.
A schedule showing the principal amount and interest rate of
each director loan at November 26, 1994, appears in Item 13.C
of the registrant's Form 10-K for the fiscal year ended
September 30, 1994. The registrant agrees to furnish a copy of
any omitted loan document to the Securities and Exchange
Commission upon request.
10.D2a. Typical form of residual stock redemption note executed in
connection with redemption of common stock from members,
including directors (incorporated by reference to Exhibit 10-D2
to the registrant's Form 10-K for the fiscal year ended
October 2, 1992).
10.D2b. Schedule listing material details of residual stock redemption
notes payable to directors and nominees.
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the
registrant has filed the form and schedule listed above in lieu
of filing each document executed in transactions with
directors. The registrant agrees to furnish a copy of any
omitted document to the Securities and Exchange Commission upon
request.
10.E1. Copy of sublease agreement for Aloha store dated January 3,
1994, between the registrant and CTD, L.L.C., a limited
liability company controlled by Craig Danielson, a director of
the registrant (incorporated by reference to Exhibit 10.E to
the registrant's Form 10-Q for the quarterly period ended April
1, 1994).
10.E2. Copy of sublease agreement for Tigard store dated January 3,
1994, between the registrant and CTD, L.L.C., a limited
liability company controlled by Craig Danielson, a director of
the registrant (incorporated by reference to Exhibit 10.D to
the registrant's Form 10-Q for the quarterly period ended
April 1, 1994).
10.E3. Copy of sublease agreement for Sandy store dated May 4, 1994,
between the registrant and Dan Inc Oregon, a corporation
controlled by Craig Danielson, a director of the registrant
(incorporated by reference to Exhibit 10.G3 to the registrant's
Form 10-K for the fiscal year ended September 30, 1994).
10.E4. Copy of Asset Purchase and Sale Agreement dated May 4, 1994,
for Sandy store between the registrant and Dan Inc Oregon, a
corporation controlled by Craig Danielson, a director of the
registrant (incorporated by reference to Exhibit 10.G4 to the
registrant's Form 10-K for the fiscal year ended September 30,
1994).
10.E5. Copy of Asset Purchase and Sale Agreement dated January 3,
1994, for Aloha and Tigard stores between the registrant and
CTD, L.L.C., a limited liability company controlled by Craig
Danielson, a director of the registrant (incorporated by
reference to Exhibit 10.C to the registrant's Form 10-Q for the
quarterly period ended April 1, 1994).
10.F. Copy of sublease agreement for Orland store dated August 19,
1994, between the registrant and Gil's Supermarkets, Inc., a
corporation controlled by Gil Foster, a director of the
registrant (incorporated by reference to Exhibit 10.H to the
registrant's Form 10-K for the fiscal year ended September 30,
1994).
10.G1. Copy of sublease agreement for Coos Bay store dated
February 28, 1991, between the registrant and Raymond L.
Nidiffer, a director of the registrant (incorporated by
reference to Exhibit 10-I19 to the registrant's Form 10-K for
the fiscal year ended September 27, 1991).
10.G2. Copy of sublease agreement for Arcata store dated August 11,
1977, between the registrant and Raymond L. Nidiffer, a
director of the registrant (incorporated by reference to
Exhibit 10-Q2 to the registrant's registration statement on
Form S-2, No. 33-26631).
10.G3. Copy of sublease agreement for Gold Beach store dated July 6,
1979, between the registrant and Raymond L. Nidiffer, a
director of the registrant (incorporated by reference to
Exhibit 10-Q3 to the registrant's registration statement on
Form S-2, No. 33-26631).
10.G4. Copy of assignment of lease and related documents for Mt.
Shasta store between the registrant and C & K Market, Inc., an
affiliate of Raymond L. Nidiffer, a director of the registrant
(incorporated by reference to Exhibit 10-Q4 to the registrant's
registration statement on Form S-2, No. 33-26631).
10.G5. Copy of sublease agreement for Rogue River store dated June 25,
1976, between the registrant and Raymond L. Nidiffer, a
director of the registrant (incorporated by reference to
Exhibit 10-Q5 to the registrant's registration statement on
Form S-2, No. 33-26631).
10.G6. Copy of lease agreement for Coos Bay store dated February 28,
1991, between the registrant and Raymond L. Nidiffer, a
director of the registrant (incorporated by reference to
Exhibit 10-I20 to the registrant's Form 10-K for the fiscal
year ended September 27, 1991).
10.G7. Copy of loan guaranties dated June 12, 1980 and September 30,
1988 given by registrant for the benefit of C & K Market, Inc.,
an affiliate of Raymond L. Nidiffer, a director of the
registrant (incorporated by reference to Exhibit 10-I12 to the
registrant's Form 10-K for the fiscal year ended September 30,
1989).
10.G8. Copy of stock purchase agreement dated as of June 20, 1994,
between the registrant and C&K Market, Inc., an affiliate of
Raymond L. Nidiffer, a director of registrant (incorporated by
reference to Exhibit 10.F8 to the registrant's Form 10-K for
the fiscal year ended September 30, 1994).
12. Statement of computation of ratio of adjusted income to fixed
charges (incorporated by reference to Exhibit 12 to the
registrant's Form 10-K for the fiscal year ended September 30,
1994).
13. Portions of annual report to security holders incorporated by
reference in the prospectus forming a part of this registration
statement.*
23.A. Consent of Miller, Nash, Wiener, Hager & Carlsen (filed as part
of Exhibit 5).
23.B. Consent of DeLap, White & Raish.
24. Power of attorney.
25. Statement of Eligibility of Trustee.
28. Copy of schedule P of the annual statement for Grocers
Insurance Company, a subsidiary of the registrant, as filed
with the state insurance departments where the company
operates, for the year ended December 31, 1993 (incorporated by
reference to Exhibit 28 to the registrant's Form 10-K for the
fiscal year ended September 30, 1994).
* To be filed by pre-effective amendment.
<PAGE>
EXHIBIT 4.C
UNITED GROCERS, INC.
AND
FIRST BANK NATIONAL ASSOCIATION
TRUSTEE
________________
SUPPLEMENTAL INDENTURE
Dated as of January ____, 1994
________________
Series J Capital Investment Notes
<PAGE>
TABLE OF CONTENTS
Page
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Provisions of General Application. . . . . . . . . . . 3
Section 1.03. Provisions Specially Applicable to Series J Notes. . . 3
Section 1.04. Effect of Headings and Table of Contents . . . . . . . 3
Section 1.05. Successors and Assigns . . . . . . . . . . . . . . . . 4
Section 1.06. Separability Clause. . . . . . . . . . . . . . . . . . 4
Section 1.07. Governing Law. . . . . . . . . . . . . . . . . . . . . 4
Section 1.08. Counterparts . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE TWO
Series J Note Forms
Section 2.01. Forms Generally. . . . . . . . . . . . . . . . . . . . 4
ARTICLE THREE
Series J Notes
Section 3.01. Authorization of Series J Notes. . . . . . . . . . . . 5
Section 3.02. Entry in Investment Note Register of Series J
Investment Notes . . . . . . . . . . . . . . . . . . . 5
Section 3.03. Form, Issue, Dating, Payment of Principal at
Maturity and Cancellation of Series J Notes. . . . . . 6
Section 3.04. Registration of Transfer and Exchange of Series J
Notes. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.05. Persons Deemed Owners. . . . . . . . . . . . . . . . . 7
ARTICLE FOUR
Designation and Entry in Investment
Note Register, Stated Maturity, and
Rate of Interest of Series J Notes
Section 4.01. Designation and Entry in Investment Note Register. . . 8
Section 4.02. Stated Maturity and Rate of Interest . . . . . . . . . 8
Section 4.03. Quarterly Statement of Series J Note Holdings. . . . . 9
ARTICLE FIVE
Prepayment and Redemption of Series J Notes
Section 5.01. Prepayment . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.02. Election to Redeem . . . . . . . . . . . . . . . . . . 10
Section 5.03. Procedure for Redemption . . . . . . . . . . . . . . . 10
Section 5.04. Effect of Redemption . . . . . . . . . . . . . . . . . 11
ARTICLE SIX
Subordination of Series J Notes
Section 6.01. Agreement of Subordination . . . . . . . . . . . . . . 12
Section 6.02. Distribution on Dissolution and Reorganization;
Subrogation of Series J Notes. . . . . . . . . . . . . 12
Section 6.03. Payments on Series J Notes . . . . . . . . . . . . . . 15
Section 6.04. Trustee Authorized to Effectuate Subordination . . . . 16
Section 6.05. Rights of Trustee as a Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 16
Section 6.06. Reliance by Holders of Senior Indebtedness . . . . . . 16
Section 6.07. Subordination Not to Be Prejudiced by Certain Acts . . 16
ARTICLE SEVEN
Miscellaneous
Section 7.01. No Alteration of Prior Series of Investment Notes. . . 17
Section 7.02. Additional Supplemental Indentures . . . . . . . . . . 17
Section 7.03. Amendment of Section 9.01 of Indenture . . . . . . . . 17
Section 7.04. Satisfaction and Discharge of Indenture. . . . . . . . 18
Testimonium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Signatures and Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
<PAGE>
THIS SUPPLEMENTAL INDENTURE dated as of January ____, 1994, between
UNITED GROCERS, INC., an Oregon corporation (hereinafter called the
"Company"), having its principal offices at 6433 S.E. Lake Road, Milwaukie,
Oregon, and FIRST BANK NATIONAL ASSOCIATION, a national banking association
(hereinafter called the "Trustee") having its principal corporate trust
office at 1000 S.W. Broadway, Suite 1750, Portland, Oregon 97205,
W I T N E S S E T H :
WHEREAS the Company and the Trustee, as successor to the corporate
trust business of United States National Bank of Oregon, are parties to an
Indenture dated as of February 1, 1978 (hereinafter called the "Indenture"),
providing for the issuance by the Company of its Capital Investment Notes
(hereinafter called "Investment Notes");
WHEREAS the Indenture provides for the issuance of one or more series
of Investment Notes, each series to have such provisions as set forth in the
Indenture and indentures supplemental thereto;
WHEREAS the Company and the Trustee, as successor to the corporate
trust business of United States National Bank of Oregon, are parties to
supplemental indentures dated as of the dates set forth below, providing for
the issuance by the Company of the series of Investment Notes indicated:
Date Series
August 15, 1979 B
November 11, 1981 C
December 15, 1984 D
December 15, 1986 E
January 27, 1989 F
January 22, 1991 G
July 6, 1992 H
WHEREAS the Company has duly authorized the creation of an issue of an
additional series of Investment Notes (hereinafter sometimes called "Series J
Notes"); and
WHEREAS all things have been done that are necessary (1) to make the
Series J Notes the valid obligations of the Company once the Terms (as
defined herein) of the Series J Notes have been entered in the Investment
Note Register (as defined herein) and notice thereof has been given to the
Trustee and (2) to make this Supplemental Indenture a valid agreement of the
Company, in accordance with the terms of the Series J Notes and of this
Supplemental Indenture;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that, in
consideration of the premises and the purchase of Series J Notes by the
Holders thereof, the Company covenants and agrees to and with the Trustee,
for the equal and proportionate benefit of all present and future Holders of
Series J Notes, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 1.01. Definitions.
Unless otherwise defined herein, the terms defined in the Indenture
have the meanings assigned to them therein and the rules of construction
specified therein shall apply hereto.
"Senior Indebtedness" means all indebtedness of the Company of every
kind and character, whether outstanding on the date of the Indenture or
thereafter created (other than indebtedness evidenced by the Investment Notes
and the Building Notes), (i) for money borrowed by the Company, (ii) for
money borrowed by others and guaranteed by the Company, (iii) constituting
purchase money indebtedness incurred for the purchase of tangible property
and for the payment of which the Company is directly or contingently liable,
(iv) arising under any document creating an absolute or contingent obligation
of the Company to purchase promissory notes and related documents from third
parties, or (v) for fees, expenses, and other obligations of the Company due
in connection with indebtedness of the Company that constitutes Senior
Indebtedness; unless in each case by the terms of the instrument creating or
evidencing the indebtedness or obligation it is provided that such
indebtedness or obligation is not superior in right of payment to the
Investment Notes.
"Series J Notes" means the Series J Capital Investment Notes provided
for by this Supplemental Indenture once the Terms of the Series J Notes have
been entered in the Investment Note Register and notice thereof has been
given to the Trustee pursuant to Section 4.01.
"Terms," with respect to any Series J Note, means all of the following
items of information: number, name and address of Holder, date from which
interest is payable, date of issue, maturity date, principal sum, and annual
rate of interest.
References to Articles or Sections are references to the Articles or
Sections hereof unless such references are specifically identified as being
references to Articles or Sections of the Indenture.
Section 1.02. Provisions of General Application.
Except as otherwise specifically provided herein, the provisions of
Article One of the Indenture, Sections 3.01 through 3.06, 3.08, and 3.10 of
the Indenture and Articles Seven through Thirteen of the Indenture, as
amended with respect to Series J Notes by Article Seven of this Supplemental
Indenture, which provisions are applicable to the rights, privileges, duties,
and obligations of the Company, the Trustee, the Holders, and other Persons
with respect to Investment Notes generally, shall apply to the Series J Notes
as fully to all intents and purposes as though set forth in full herein, it
being the intent hereof that the Series J Notes authorized hereby shall
constitute Additional Investment Notes which are Investment Notes as
contemplated by the Indenture.
This Supplemental Indenture shall be construed as supplemental to the
Indenture and shall form a part thereof. The Indenture, including
specifically but without limitation Section 1.06 thereof, is hereby
incorporated by reference herein and is hereby ratified, approved, and
confirmed.
Section 1.03. Provisions Specially Applicable to Series J Notes.
To the extent the provisions of the Indenture govern the Series J Notes
as provided in Section 1.02:
(1) The reference to "Article Six" contained in Section 9.08 of the
Indenture shall be deemed to include a reference to Article Six hereof.
(2) The references to "Series A Notes" contained in Section 13.01 of
the Indenture shall be deemed to be references to "Series A Notes, Series B
Notes, Series C Notes, Series D Notes, Series E Notes, Series F Notes,
Series G Notes, Series H Notes and Series J Notes."
(3) Pursuant to Sections 1.01 and 13.05 of the Indenture, references
to the Trust Indenture Act in the Indenture and references therein to terms
defined in the Trust Indenture Act to the extent the same form a part of this
Supplemental Indenture shall mean the Trust Indenture Act as in effect at the
date as of which this Supplemental Indenture is executed.
Section 1.04. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience of reference only, are not to be considered a part hereof,
and shall not affect the construction hereof.
Section 1.05. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
Section 1.06. Separability Clause.
In case any provision in this Supplemental Indenture or in the
Investment Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 1.07. Governing Law.
This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the state of Oregon.
Section 1.08. Counterparts.
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
ARTICLE TWO
Series J Note Forms
Section 2.01. Forms Generally.
Notwithstanding any provision in the Indenture to the contrary,
Series J Notes will be issued as noncertificated Series J Notes. Except as
otherwise expressly provided herein, each Holder of a Series J Note shall be
entitled to receive payments of principal and interest in the same amounts
and currency and at the same time and place and shall be entitled to all
other rights under the Indenture and this Supplemental Indenture as if the
Holder of said Series J Note were a Holder of a certificated Series J Note
having the same Terms. Except as otherwise expressly provided herein, each
reference in the Indenture or in this Supplemental Indenture to
authentication and delivery of Investment Notes shall, when made with respect
to Series J Notes, be deemed to include a reference to the entry of the Terms
thereof in the Investment Note Register and the giving of notice thereof to
the Trustee and each Series J Note as to which the Terms have been entered in
the Investment Note Register and notice thereof has been given to the Trustee
pursuant to Section 4.01 shall be deemed to be a duly authenticated and
delivered Investment Note, notwithstanding the provisions to the contrary in
the third and fifth paragraphs of Section 3.03 of the Indenture.
ARTICLE THREE
Series J Notes
Section 3.01. Authorization of Series J Notes.
Pursuant to the provisions of Sections 3.01, 3.10, and 13.01(6) of the
Indenture, there is hereby authorized for issuance a series of Additional
Investment Notes which shall be the Series J Notes as specified herein.
Section 3.02. Entry in Investment Note Register of Series J Investment
Notes.
Upon Company Order, without any further action by the Company, the
Terms of the Series J Notes authorized herein shall be entered in the
Investment Note Register and notice shall be given to the Trustee as provided
in Section 4.01. The Trustee acknowledges receipt of the following documents
pursuant to and in satisfaction of the provisions of Section 3.10 of the
Indenture:
(1) A Board Resolution authorizing the execution of this Supplemental
Indenture and the issuance of Series J Notes of up to the principal amount
specified in Section 4.01 and requesting the entry by the Investment Note
Registrar in the Investment Note Register of the Terms of such Series J Notes
and notification thereof to the Trustee.
(2) An Officers' Certificate stating that no event has occurred and is
continuing which is, or after notice or lapse of time or both would become,
an Event of Default and that all conditions precedent provided for in the
Indenture and in this Supplemental Indenture relating to the entry in the
Investment Note Register of the Terms of the Series J Notes and notification
thereof to the Trustee have been complied with.
(3) A counterpart of this Supplemental Indenture authorizing the
issuance of the Series J Notes executed by the Company and the Trustee.
(4) An Opinion of Counsel:
(A) Specifying all conditions precedent provided for in the Indenture
and in this Supplemental Indenture relating to the issuance of Series J Notes
and the entry in the Investment Note Register of the Terms of such Series J
Notes and notification thereof to the Trustee and stating that all such
conditions have been complied with;
(B) Stating that once the Terms of the Series J Notes have been
entered in the Investment Note Register and notice thereof has been given to
the Trustee, such Series J Notes will constitute legal, valid, and binding
obligations of the Company, enforceable in accordance with their terms and
entitled to the benefits of the Indenture and this Supplemental Indenture
subject to applicable bankruptcy, reorganization, insolvency or other laws
relating to or affecting the enforcement of creditors' rights;
(C) Stating that all applicable stamp taxes or other governmental
charges (if any) in respect of the original issue of the Series J Notes have
been paid;
(D) Stating that the Supplemental Indenture constitutes the valid and
binding obligation of the Company enforceable in accordance with its terms
except as enforcement may be limited by laws affecting creditor's rights
generally or by principles of equity or public policy; and
(E) Stating that the amendments and supplements to the Indenture made
by this Supplemental Indenture are permitted by Section 13.01 of the
Indenture.
The acts and documents specified above with respect to the
authorization and issuance of Series J Notes shall be deemed to be the
equivalent of the acts and documents specified in Section 3.10 of the
Indenture with respect to the execution, authentication, delivery, and issue
of certificated Investment Notes.
Section 3.03. Form, Issue, Dating, Payment of Principal at Maturity
and Cancellation of Series J Notes.
Series J Notes will be noncertificated. A Series J Note is issued upon
both the entry of its Terms in the Investment Note Register and notification
thereof by an officer of the Company to the Trustee. The date of
authentication of a Series J Note, as well as its date of issue, shall be the
date on which both its Terms are entered in the Investment Note Register and
notice is given by an officer of the Company to the Trustee.
All payments of principal and interest shall be made in lawful money of
the United States of America at the office or agency of the Company
maintained for that purpose in the county of Clackamas, Oregon, provided that
the Company may pay the principal of and interest on Series J Notes by
mailing a check to the Holder at the Holder's last address as it appears in
the Investment Note Register.
A Series J Note shall be canceled by entering a notation to that effect
in the Investment Note Register and giving notice thereof to the Trustee.
Section 3.04. Registration of Transfer and Exchange of Series J Notes.
Upon written request to the Company by the Holder for registration of
transfer of a Series J Note, the Investment Note Registrar shall enter upon
the Investment Note Register the Terms of a new Investment Note or Notes
bearing interest at the same rate and with the same Stated Maturities of
principal and interest of authorized denominations for the same aggregate
principal amount and issued in the name of the transferee. Notwithstanding
any provision in the Indenture to the contrary, the new Investment Note or
Notes will be issued as a noncertificated Series J Note or Notes. There
shall be no service charge for registration of transfer of Investment Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Upon written request to the Company by the Holder for exchange of a
Series J Note, the Investment Note Registrar shall enter upon the Investment
Note Register the Terms of a new Investment Note or Notes bearing interest at
the same rate and with the same Stated Maturities of principal and interest
of authorized denominations for the same aggregate principal amount.
Notwithstanding any provision in the Indenture to the contrary, the new
Investment Note or Notes will be issued as a noncertificated Series J Note or
Notes. There shall be no service charge for exchange of Investment Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
The Company or the Investment Note Registrar may require the written
request for registration of transfer or exchange to be in form satisfactory
to the Company and the Investment Note Registrar and duly executed by the
Holder of the Series J Note or his attorney duly authorized in writing.
The office or agency maintained by the Company pursuant to Section 7.02
of the Indenture shall be the place where Holders of Series J Notes may
submit written requests for registration of transfer or exchange.
Section 3.05. Persons Deemed Owners.
Prior to receipt by the Company of a written request from the Holder of
a Series J Note for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name
any Series J Note is registered as the owner of such Series J Note for the
purpose of receiving payment of principal of, and (subject to Section 3.06 of
the Indenture) interest on, such Series J Note and for all other purposes
whatsoever, whether or not such Series J Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Receipt by the Company of a written request for registration of
transfer from the Holder of a Series J Note shall be deemed the equivalent of
due presentment of a certificate for registration of transfer by the Holder.
ARTICLE FOUR
Designation and Entry in Investment
Note Register, Stated Maturity, and
Rate of Interest of Series J Notes
Section 4.01. Designation and Entry in Investment Note Register.
The series of Investment Notes designated in accordance with
Section 3.01 shall be "Series J Capital Investment Notes" (herein sometimes
referred to as the "Series J Notes").
The aggregate principal amount of Series J Notes which may be issued is
limited to $50,000,000, except for Series J Notes issued upon registration of
transfer of or in exchange for or in lieu of other Series J Notes pursuant to
Sections 3.04 of the Indenture or Sections 3.04 or 5.03 hereof.
Forthwith upon the execution and delivery of this Supplemental
Indenture, or from time to time thereafter, the Company may authorize the
issuance of Series J Notes up to such aggregate principal amount, and
thereupon and upon Company Order, without any further action by the Company,
the Terms of the Series J Notes shall be entered in the Investment Note
Register and notice thereof shall be given to the Trustee.
Section 4.02. Stated Maturity and Rate of Interest.
The Stated Maturity of principal of any Series J Note other than a
Series J Note issued upon registration of transfer of or in exchange for or
in lieu of another Series J Note pursuant to Sections 3.04 of the Indenture
or Sections 3.04 or 5.03 hereof, shall be the Interest Payment Date of such
Series J Note which is ten years from its date of issue as specified in the
Investment Note Register or, if the expiration of ten years from the date of
issue shall not fall on an Interest Payment Date, then the Stated Maturity of
principal of such Series J Note shall be the Interest Payment Date next
following the expiration of ten years from its date of issue. Each Series J
Note shall bear interest at the rate per annum specified in the Investment
Note Register from the date so specified or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the
case may be. Such interest shall be payable quarterly on March 15, June 15,
September 15, and December 15, to the person in whose name such Series J Note
is registered at the close of business on the last Business Day of the
calendar month next preceding the calendar month in which an interest payment
is due, except as otherwise provided in the Indenture and this Supplemental
Indenture, until the principal of such Series J Note is paid or made
available for payment. The interest rates on Series J Notes shall be
determined by Board Resolution and shall be subject to change by Board
Resolution from time to time, but no such change shall affect any Series J
Notes theretofore issued. The denominations, dates from which interest is
payable and Stated Maturities of principal and interest of Series J Notes
shall be subject to change by the Company from time to time by an indenture
supplemental hereto executed as permitted by the Indenture and this
Supplemental Indenture and authorizing the change in such denominations,
dates, and Stated Maturities, but no such change shall affect any Series J
Notes theretofore issued.
Section 4.03. Quarterly Statement of Series J Note Holdings.
The Company shall mail or cause to be mailed not earlier than 30 days
before and not later than 30 days after each Interest Payment Date to each
Holder of a Series J Note to the Holder's address as it appears in the
Investment Note Register a statement which provides the following information
with regard to each Series J Note held by such Holder: number, date from
which interest is payable, date of issue, maturity date, principal sum, and
annual rate of interest.
<PAGE>
ARTICLE FIVE
Prepayment and Redemption of Series J Notes
Section 5.01. Prepayment.
Subject to the provisions of Article Six, in the event of the death of
the registered Holder of any Series J Note or of any joint registered Holder,
the Company shall, at the option of the person legally entitled to become the
Holder of the Series J Note, prepay the principal amount of the Series J Note
together with all accrued interest to the date of payment. Any request for
prepayment shall be made to the Company in writing. The Company may, as a
condition precedent to the prepayment herein provided for, require the
submission of evidence satisfactory to the Company of the death of the
registered Holder or joint registered Holder and such additional documents or
other material as it may consider necessary to establish the Person entitled
to become the Holder of the Series J Note, or such other facts as it
considers relevant to the fulfillment of its obligations hereunder.
Section 5.02. Election to Redeem.
Subject to the provisions of Article Six, the Series J Notes may be
redeemed at the election of the Company evidenced by Board Resolution, as a
whole or from time to time in part, at any time during the seven-year period
prior to maturity at Redemption Prices equal to the principal amount of the
Series J Notes to be redeemed plus accrued interest thereon. The Company may
for the purpose of redeeming Series J Notes classify the Series J Notes then
subject to redemption into one or more classes on the basis of their maturity
or their annual rate of interest or any combination thereof and designate for
redemption a specified principal amount of any such class or classes of
Series J Notes.
Section 5.03. Procedure for Redemption.
In case the Company shall desire to exercise its right to redeem
Series J Notes which are subject to redemption, it shall give notice of such
redemption to Holders of the Series J Notes to be redeemed as hereinafter
provided in this Section.
In the event the principal amount of Series J Notes to be redeemed
shall not be equal to the principal amount of the class or classes of
Series J Notes designated by the Company for redemption, or in the event no
such class has been so designated and if less than all the Series J Notes
subject to redemption are to be redeemed, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Series J Notes to be redeemed by class,
if applicable. Thereupon the Trustee shall select (giving effect to the
designation, if any, of a class or classes of Series J Notes to be redeemed),
in such manner as it shall deem appropriate and fair in its sole discretion
and which may provide for the selection of portions (equal to $100 or an
integral multiple of $100) of the principal of Series J Notes of a
denomination larger than $100, the particular Series J Notes to be redeemed
in whole or in part and shall thereafter promptly notify the Company and each
Investment Note Registrar in writing, by designating the numbers thereof or
by any other method, which Series J Notes or portions thereof are to be
redeemed.
Notice of redemption shall be given to the Holders of Series J Notes to
be redeemed as a whole or in part by mailing by first class mail a notice of
such redemption not less than 30 nor more than 60 days prior to the date
fixed for redemption to their last addresses as they shall appear upon the
Investment Note Register, but failure to give such notice by mail to the
Holder of any Series J Note or any defect in such notice shall not affect the
validity of the proceedings for the redemption of any other Series J Note or
portion thereof. Any notice mailed in the manner provided in this paragraph
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice.
Each notice to be mailed to the Holders of Series J Notes as aforesaid
shall state the following: (a) the Redemption Date; (b) if less than all of
the Series J Notes are to be redeemed, the distinguishing numbers (which may
be given by individual numbers of Series J Notes, by specifying all Series J
Notes ending in certain key numbers and/or by specifying all Series J Notes
between two stated numbers) or other characteristics of the Series J Notes to
be redeemed (indicating the extent of any partial redemption thereof),
together with such other description of the Series J Notes (and portions of
Series J Notes, if any) as may be necessary in order to identify the same,
provided that any such notice to be mailed need describe only the Series J
Notes to be redeemed from the Holder to whom such notice is mailed; (c) the
Redemption Price; (d) that interest on such Series J Notes (or on the portion
to be redeemed of any of such Series J Notes so designated for redemption in
part) shall cease on the Redemption Date; and (e) that on said date the
Company will mail a check for the Redemption Price to each Holder of Series J
Notes which are to be redeemed to the last address of such Holder as it
appears in the Investment Note Register.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 7.03 of the
Indenture) an amount of money sufficient to pay the Redemption Price of, and
(except with respect to any Series J Note or portion thereof for which the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Series J Notes or portions thereof which are to be redeemed on that date.
Section 5.04. Effect of Redemption.
If notice of redemption shall have been given as above provided, the
Series J Notes or portions of Series J Notes specified in such notice shall
become due and payable on the Redemption Date by mail at the applicable
Redemption Price, together with interest accrued to the Redemption Date, and
on and after such Redemption Date (unless the Company shall default in the
payment of such Series J Notes at the Redemption Price, together with
interest accrued to the Redemption Date) interest on the Series J Notes or
portions thereof so called for redemption shall cease to accrue. Without any
action by the Holder of a Series J Note, such Series J Note or portion
thereof shall be paid and redeemed by the Company at the applicable
Redemption Price, together with interest accrued to the Redemption Date by
mailing a check to the Holder at such Holder's last address as it appears in
the Investment Note Register; provided that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holder in whose name the Series J Note (or Predecessor Series J Note) was
registered at relevant record dates according to its terms and the provisions
of Section 3.06 of the Indenture, as amended by this Supplemental Indenture.
In the case of a Series J Note which is redeemed in part only, the
Company shall request the Investment Note Registrar to reflect in the
Investment Note Register the principal amount of the unredeemed portion of
the Series J Note.
ARTICLE SIX
Subordination of Series J Notes
Section 6.01. Agreement of Subordination.
The Company agrees, and each Holder of a Series J Note, by his purchase
or acceptance thereof, likewise agrees, that the payment of the principal of
and interest on each and all of the Series J Notes is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right
of payment to the prior payment in full of all Senior Indebtedness.
Section 6.02. Distribution on Dissolution and Reorganization;
Subrogation of Series J Notes.
Upon any distribution of assets of the Company upon any liquidation,
dissolution, winding up or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other liquidation, dissolution, winding up,
or reorganization of the Company):
(1) The holders of all Senior Indebtedness shall first be entitled to
receive payment in full, or have provision made for payment in full, of the
principal thereof, and the premium, if any, and interest thereon, before the
Holders of the Series J Notes are entitled to receive any payment on account
of the principal of or interest on the Series J Notes;
(2) Any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders
of the Series J Notes or the Trustee would be entitled except for the
provisions of this Article shall be paid by the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or other trustee or agent,
direct to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been
issued, ratably (subject to any subordination of any class of Senior
Indebtedness, by the provisions thereof, to any other class or classes of
Senior Indebtedness) according to the aggregate amounts remaining unpaid on
account of the principal of, and the premium, if any, and interest on, the
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution, or provision
therefor, to the holders of such Senior Indebtedness; and
(3) In the event that, notwithstanding the foregoing, any such payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or the Holders
of the Series J Notes before all Senior Indebtedness is paid in full, or
provision made for its payment, such payment or distribution shall be paid
over to the holders of Senior Indebtedness remaining unpaid or unprovided for
or their representative or representatives or to the trustee or trustees
under any indenture under which any instrument evidencing any of such Senior
Indebtedness may have been issued, as provided in the foregoing
subparagraph (2), for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution, or provision therefor, to
the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Series J Notes shall be subrogated pro rata (based on the respective
amounts paid over for the benefit of the holders of Senior Indebtedness) with
the holders of any other subordinated indebtedness of the Company that by its
terms ranks pari passu with the Series J Notes (such subordinated
indebtedness being hereafter in this Section referred to as "pari passu
indebtedness") to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of and interest on
the Series J Notes shall be paid in full; and, for purposes of such
subrogation, no such payments or distributions to the holders of Senior
Indebtedness, which, but for the provisions of this Article, would have been
payable or distributable to Holders of the Series J Notes or the pari passu
indebtedness, shall, as between the Company, its creditors other than the
holders of Senior Indebtedness and the Holders of the Series J Notes and the
pari passu indebtedness be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of
this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Series J Notes and the holders of the
pari passu indebtedness and the holders of the Senior Indebtedness. Nothing
contained in this Article, elsewhere in this Supplemental Indenture, in the
Indenture or in the Series J Notes is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the Holders of the Series J Notes, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Series J Notes the
principal of and interest on the Series J Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Series J Notes and
creditors of the Company other than the holders of the Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Series J Note from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy. Upon any distribution of assets of the Company referred to in this
Article, the Trustee, subject to the provisions of Section 10.01 of the
Indenture, and the Holders of the Series J Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such liquidation, dissolution, winding up or reorganization proceedings are
pending or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or to the Holders of the Series J
Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Section, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, as to the extent to which such person is
entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such person under this Section, and, if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Holders of Series J
Notes or the Company or any other Person, moneys or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
The terms "paid in full" and "payment in full" as used in this Section
with respect to Senior Indebtedness mean the receipt, in cash or securities
(taken at their market value at the time of the receipt thereof), of the
principal amount of the Senior Indebtedness (and any premium due thereon) and
full interest thereon to the date of such payment of principal.
The Series J Notes shall not be superior in right of payment to the
Series A, Series B, Series C, Series D, Series E, Series F, Series G, or
Series H Notes. The Series J Notes are hereby expressly declared to rank
pari passu with the Series A, Series B, Series C, Series D, Series E,
Series F, Series G, and Series H Notes and to constitute "pari passu
indebtedness" with respect to the Series A, Series B, Series C, Series D,
Series E, Series F, Series G, and Series H Notes. The Series J Notes shall
not constitute Senior Indebtedness as defined in the Indenture.
Section 6.03. Payments on Series J Notes.
In the event and during the continuation of any default under any
instrument constituting Senior Indebtedness or pursuant to which any Senior
Indebtedness is issued continuing beyond the period of grace, if any,
specified in such instrument, the Company shall not make any payment of
principal of or interest on the Series J Notes or purchase or redeem or set
aside funds for the redemption of Series J Notes or otherwise acquire any
Series J Notes, and neither the Trustee nor any Holder of Series J Notes
shall be entitled to receive any such payment. Nothing contained in this
Article, elsewhere in this Supplemental Indenture or in the Indenture shall,
however, (a) affect the obligation of the Company to make or prevent the
Company from making, at any time, except during the pendency of any such
liquidation, dissolution, winding up, or reorganization proceedings or during
the continuation of any such default, payments of principal of or interest on
the Series J Notes or (b) prevent the application by the Trustee or any
Paying Agent of any moneys deposited with it hereunder by the Company to the
payment of or on account of the principal of or interest on the Series J
Notes if, not less than two business days prior to such application, the
Trustee or such Paying Agent, as the case may be, did not have written notice
from the Company or a holder of Senior Indebtedness of any event prohibiting
the making of such deposit by the Company or such application by the Trustee.
Prior to the receipt of any such written notice, the Trustee shall be
entitled to assume that no such event exists and shall not be charged with
knowledge of the existence of any such event.
Section 6.04. Trustee Authorized to Effectuate Subordination.
Each Holder of a Series J Note, by his purchase or acceptance thereof,
authorizes and directs the Trustee in his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided for in
this Article and appoints the Trustee his attorney in fact for such purpose.
Section 6.05. Rights of Trustee as a Holder of Senior Indebtedness.
The Trustee shall be entitled to all rights set forth in this Article
with respect to any Senior Indebtedness which may at any time be held by it,
to the same extent as any other holder of Senior Indebtedness; and nothing in
Section 10.12 of the Indenture, or elsewhere in the Indenture or in this
Supplemental Indenture, shall deprive the Trustee of any of its rights as
such holder.
Section 6.06. Reliance by Holders of Senior Indebtedness.
Each Holder of any Series J Note, by his purchase or acceptance
thereof, agrees that the subordination provisions of this Article are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Series J Notes, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness, and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
Section 6.07. Subordination Not to Be Prejudiced by Certain Acts.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part, of the
Company or by any act or failure to act, in good faith, by any such holder or
by any noncompliance by the Company with the terms, provisions, and covenants
of this Indenture, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
ARTICLE SEVEN
Miscellaneous
Section 7.01. No Alteration of Prior Series of Investment Notes.
Nothing contained herein shall alter or amend any provision of the
Indenture insofar as it affects the rights and duties of the Company, the
Trustee, the Holders of Investment Notes or other Persons with respect to
Series A, Series B, Series C, Series D, Series E, Series F, Series G, or
Series H Notes.
Section 7.02. Additional Supplemental Indentures.
Nothing contained herein shall alter or impair the rights of the
Company and the Trustee under the Indenture to enter into one or more
additional supplemental indentures in the manner provided in the Indenture
which may be either supplemental to the Indenture or supplemental to this
Supplemental Indenture and which may be for the purpose of authorizing one or
more series of Additional Investment Notes or for any other purpose provided
by the Indenture.
Section 7.03. Amendment of Section 9.01 of Indenture.
For purposes of the Series J Notes, Sections 9.01(5) and (6) of the
Indenture are hereby amended to read, in full, as follows:
(5) The entry of a decree or order by a court having jurisdiction in
the premises for relief in respect of the Company under the United States
Bankruptcy Code or any other applicable federal or state law or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of or for the Company or any substantial part of
its property or ordering the winding up or liquidation of its affairs and
the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case under the
United States Bankruptcy Code or any other applicable federal or state law
or the consent or acquiescence by it to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
or for the Company or any substantial part of its property or the making by
it of an assignment for the benefit of creditors or its failure to pay its
debts generally as they become due or the taking of corporate action by the
Company in furtherance of any such action.
Section 7.04. Satisfaction and Discharge of Indenture.
Notwithstanding the provisions of Section 11.01 of the Indenture, the
Indenture shall not be satisfied and discharged until (a) all Series J Notes
issued have been paid and canceled or (b) all Series J Notes issued which
have not been paid and canceled have become due and payable, will become due
and payable at their Stated Maturity within one year, or are to be called for
redemption within one year in accordance with Section 11.01(l)(B) of the
Indenture and the Company has provided for their payment pursuant to such
Section.
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Supplemental
Indenture to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
UNITED GROCERS, INC.
By ___________________________
Alan C. Jones
President
Attest:
______________________________
Assistant Secretary
FIRST BANK NATIONAL
ASSOCIATION, as Trustee
By ___________________________
Authorized Officer
Attest:
______________________________
Authorized Officer
STATE OF OREGON )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
January, 1994, by Alan C. Jones, President of United Grocers, Inc., an Oregon
corporation, on behalf of the corporation.
______________________________
Notary Public for Oregon
My commission expires:
STATE OF OREGON )
) SS
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
January, 1994, by __________________________, Authorized Officer of First
Bank National Association, a national banking association, on behalf of First
Trust National Association.
______________________________
Notary Public for Oregon
My commission expires:
<PAGE>
EXHIBIT 5
MILLER, NASH, WIENER, HAGER & CARLSEN
ATTORNEYS AND COUNSELORS AT LAW
3500 U. S. BANCORP TOWER
111 S.W. FIFTH AVENUE
PORTLAND, OREGON 97204-3699
TELEPHONE (503) 224-5858
FACSIMILE (503) 224-0155
January 6, 1995
United Grocers, Inc.
Post Office Box 22187
Portland, Oregon 97222-0082
Subject: United Grocers, Inc.
Registration Statement on Form S-2
Gentlemen:
Reference is made to the Registration Statement on Form S-2 dated
January 6, 1995, to be filed by United Grocers, Inc., an Oregon corporation
("United"), with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended, United's common
stock, $5 par value ("Stock") and $50,000,000 in aggregate principal amount
of United's Series J 5% Subordinated Capital Investment Notes maturing
approximately ten years from date of issue ("Notes").
As special counsel for United, we are familiar with the actions
taken by United with respect to the authorization and issuance of the Stock
and Notes covered by the Registration Statement. We have examined originals
or copies, certified or otherwise identified to our satisfaction, of such
corporate records, certificates of public officials and other documents as we
have deemed necessary or relevant as a basis for the opinion set forth
herein.
Based on the foregoing, it is our opinion that:
(1) Upon the issuance of the Stock covered by the Registration
Statement in the manner described therein and in accordance with applicable
state securities laws and upon receipt of full payment therefor, such Stock
will be legally issued, fully paid and nonassessable.
(2) Upon compliance by United with the provisions of Section 3.10
of the indenture dated as of February 1, 1978, between United States National
Bank of Oregon, as trustee, and United, including the due execution and
delivery of a supplemental indenture between United and First Bank National
Association, as trustee, relating to the Notes in the form filed as an
exhibit to the Registration Statement, and upon issuance of the Notes covered
by the Registration Statement in the manner described therein and in
accordance with applicable state securities laws, such Notes will be legally
issued, fully paid and nonassessable and will be binding obligations of
United.
We hereby consent to the use of this opinion in the Registration
Statement, in any filings required to qualify or register the Notes in the
states of California, Oregon, and Washington, and in any amendments to the
<PAGE>
Registration Statement or such filings, and to the use of our name under the
caption "Legal Matters" in the Registration Statement.
Very truly yours,
MILLER, NASH, WIENER, HAGER & CARLSEN
<PAGE>
RESIDUAL STOCK NOTES
PAYABLE TO
DIRECTORS OR NOMINEES
All information is as of December 15, 1994
Director or Nominee Aggregate Note Amount Interest Rate
- ------------------- --------------------- -------------
Gilbert A. Foster $ 77,446.94 6.5%
Craig Danielson $202,281.49 6.5%
<PAGE>
EXHIBIT 23.B
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference of (i) our
report dated November 30, 1994, with respect to the financial statements of
United Grocers, Inc., and (ii) our report dated November 30, 1994, with
respect to the financial statement schedules, both of which are included in
the annual report on Form 10-K of United Grocers, Inc., for the year ended
September 30, 1994, into the prospectus constituting part of this
Registration Statement on Form S-2 of United Grocers, Inc.
DeLAP, WHITE & RAISH
Certified Public Accountants
Portland, Oregon
January 4, 1994
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints ALAN C. JONES and JOHN W. WHITE and
each of them his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign registration statements on Form S-2
relating to Series J Capital Investment Notes and to Common Stock, $5 par
value per share, of United Grocers, Inc., and any and all amendments
(including post-effective amendments) thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or each of them or
their or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF this power of attorney has been signed by the
following persons in the capacities indicated on December 14, 1994.
Signature Title
/s/ ALAN C. JONES President,
Alan C. Jones Secretary and Treasurer
/s/ JOHN W. WHITE Vice President and
John W. White Chief Financial Officer
/s/ GILBERT A. FOSTER Director
Gilbert A. Foster
/s/ H. LAWRENCE MONTGOMERY Director
H. Lawrence Montgomery
/s/ MARLIN A. SMYTHE Director
Marlin A. Smythe
Signature Title
/s/ DENNIS BLASINGAME Director
Dennis Blasingame
/s/ CRAIG DANIELSON Director
Craig Danielson
/s/ JAMES C. VICKERS Director
James C. Vickers
/s/ DAVID NEAL Director
David Neal
/s/ PETER J. O'NEAL Director
Peter J. O'Neal
/s/ RAYMOND L. NIDIFFER Director
Raymond L. Nidiffer
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0256895
(State of Incorporation) (I.R.S. Employer Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
UNITED GROCERS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0301970
(State of Incorporation) (I.R.S. Employer Identification No.)
6433 S.E. Lake Road
Milwaukie, Oregon 97222
(Address of Principal Executive Offices) (Zip Code)
CAPITAL INVESTMENT NOTES
(Title of the Indenture Securities)
<PAGE>
GENERAL
1. General Information Furnish the following information as to the
Trustee.
(a) Name and Address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification. Each of the exhibits listed
below is incorporated by reference from a previous registration.
Reference Registration: Bally's Park Place, Inc., filed January 1994.
1. Copy of Articles of Association.
2. Copy of Certificate of Authority to Commence Business.
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).
4. Copy of existing By-Laws.
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or what persons are owners
of 10% or more of the voting securities of the obligor, or affiliates, are
based upon information furnished to the Trustee by the obligor. While the
Trustee has no reason to doubt the accuracy of any such information, it
cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Bank National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement
of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed
and attested, all in the City of Portland and State of Oregon on the 6th of
January, 1995.
FIRST BANK NATIONAL ASSOCIATION
[SEAL]
Lawrence J. Bell
Vice President
Linda A. Mercer
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, FIRST BANK NATIONAL ASSOCIATION hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: January 6, 1995
FIRST BANK NATIONAL ASSOCIATION
Lawrence J. Bell
Vice President
<PAGE>
