SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
Amendment Number One to
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended September 27, 1996
Commission File Number 2-60487
UNITED GROCERS, INC.
OREGON 93-0301970
6433 S.E. Lake Road (Milwaukie, Oregon)
Post Office Box 22187, Portland, Oregon 97222
Registrant's telephone number, including area code: (503) 833-1000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. __X__
State the aggregate market value of the voting stock held by non-affiliates of
the registrant.
$38,706,820 (computed on basis of 1996 offering price and number of shares
outstanding at December 22, 1996).
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
622,897 shares of common stock, $5 par value, as of December 22, 1996.
Documents incorporated by reference: None
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Item 13. Certain Relationships and Related Transactions.
A. Transactions with Management and Others
All directors and nominees (or their firms), as members of United,
purchase groceries and related products from United in the ordinary course of
business at prices available to members generally.
In the ordinary course of business, United enters into prime leases and
subleases property to qualified members. United presently is a party to
subleases with entities affiliated with Ray Nidiffer, Craig Danielson, Ron
Mancasola, Gaylon Baese and Robert Lamb, who were directors or nominees for
director of United in fiscal year 1996. At September 27, 1996, monthly payments
due pursuant to the subleases were as follows:
Danielson $91,049
Nidiffer $51,660
Mancasola $16,054
Baese $20,078
Lamb $47,841
United guarantees members' indebtedness under certain conditions and
loans money to members through its financing department. The Company has
guaranteed certain loan obligations of C&K Markets, Inc., a corporation owned
and controlled by Ray Nidiffer, who was a director in fiscal year 1996. In
addition, United agreed to pay to C&K Markets, Inc., an amount up to $165,808
over three years as a rebate for an increased volume of purchases by C&K
Markets, Inc.
During 1996, the company acquired one store in satisfaction of
indebtedness from a corporation in which David Neal, a director in fiscal year
1996, had an ownership interest.
B. Certain Business Relationships
During fiscal year 1996, C&K Markets, Inc., a corporation controlled by
Ray Nidiffer, a director in fiscal year 1996, purchased groceries and other
products in the ordinary course of business from United in the amount of
$89,279,472. As noted above, United has agreed to rebate certain payments in
exchange for increased purchases. United owned a 22% equity interest in C&K
Markets, Inc., in fiscal year 1996.
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C. Indebtedness of Management
The following directors, officers, nominees or related persons or entities were
indebted to United during the fiscal year ended September 27, 1996, or
thereafter and prior to December 27, 1996:
Largest
aggregate
amount of debt
outstanding # of
during Balance at Notes
year ended November 30, & Rate of
Name of Debtor September 27, 1996 Interest
1996
- -------------- --------------- ------------ ---------
Quality Food Investments,
Inc. 75,000 -0-
Peter J O'Neal - Director
SMN Company 14,948,277 1,567,065 1 @ 10.00%
David Neal - Director
C & K Market, Inc. 6,901,839 1,653,480 3 @ 10.00%
Ray Nidiffer - Director
Wiley & Sons, Inc. 27,304 -0-
James e. wiley - Nominee
Robert Lamb/Gale Lasko,
Partnership
Robert Lamb, Director 233,101 -0-
Howard's on Scholls, Inc. 1,319,484 -0-
Gaylon Baese - Nominee
All of the above loans were for purchase of inventory and equipment and are
secured by inventory and equipment. Variable rate loans bear interest at prime
plus 1.75 percent to 2.25 percent.
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as part of the report
1. The following financial statements were previously filed as part of this
report:
Independent Auditor's Report on Financial Statements Consolidated Balance
Sheets Consolidated Statements of Income Consolidated Statements of Members'
Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial
Statements Independent Auditor's Report on Supplemental Information
Supplemental Information Independent Auditor's Report on Financial Statement
Schedules
2. The following financial statement schedules were previously filed as part
of this report:
Schedule I - Condensed financial information of registrant
Schedule II - Valuation and qualifying accounts
Schedule V - Supplementary information concerning property - casualty
insurance operations
3. Exhibits. The exhibits listed on the accompanying index to exhibits are
filed as part of this report.
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNITED GROCERS, INC.
(Registrant)
Dated: July 11, 1997 By: /s/ John W. White
John W. White
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Charles E. Carlbom Acting President, July 11, 1997
(Principal
executive officer)
/s/ John W. White Vice President July 11, 1997
John W. White (Principal financial officer
and principal accounting officer)
/s/ Robert A. Lamb* Director
Robert A. Lamb July 11, 1997
/s/ Harry R. (Dick) Leonard* Director July 11, 1997
Harry R. (Dick) Leonard
/s/ Dean Ryan Director July 11, 1997
Dean Ryan
/s/ Gordon Smith* Director July 11, 1997
Gordon Smith
/s/ Ron L. Mancasola* Director July 11, 1997
Ron L. Mancasola
/s/ H. Larry Montgomery* Director July 11, 1997
H. Larry Montgomery
/s/ Gaylon Baese* Director July 11, 1997
Gaylon Baese
/s/ Ken Findley* Director July 11, 1997
Ken Findley
/s/ Jim Glassel* Director July 11, 1997
Jim Glassel
* By /s/ John W. White
John W. White
Attorney-in-fact
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EXHIBIT INDEX
2.A Copy of agreement for sale and purchase of business assets dated
December 7, 1994, between Commissary Cash & Carry, Inc., and the
registrant (incorporated by reference to Exhibit 10.1 to the
registrant's quarterly report on Form 10-Q for the period ended
March 31, 1995).
2.B Copy of agreement for sale and purchase of business assets dated
December 22, 1994, between Rich and Rhine, Inc., and the registrant
(incorporated by reference to Exhibit 10.2 to the registrant's
quarterly report on Form 10-Q for the period ended March 31, 1995).
2.C Copy of asset purchase agreement dated as of November 10, 1995,
between Bay Area Foods, Inc., and the registrant (incorporated by
reference to Exhibit 2 to the registrant's current report on Form
8-K dated December 13, 1995).
3.A 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).
3.B 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).
4.A 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.B1 Copy of supplemental indenture dated as of December 15, 1984,
between the registrant and United States National Bank of Oregon, as
trustee, relating to the registrant's Series D 5% Subordinated
Redeemable Capital Investment Notes (incorporated by reference to
Exhibit 4-F to the registrant's registration statement on Form S-2,
No. 33-95213).
4.B2 Copy of supplemental indenture dated as of December 15, 1986,
between the registrant and United States National Bank of Oregon, as
trustee, relating to the registrant's Series E 5% Subordinated
Redeemable Capital Investment Notes (incorporated by reference to
Exhibit 4-G to the registrant's registration statement on Form S-2,
No. 33-11212).
4.B3 Copy of supplemental indenture dated as of January 27, 1989, between
the registrant and United States National Bank of Oregon, as
trustee, relating to the registrant's Series F 5% Subordinated
Redeemable Capital Investment Notes (incorporated by reference to
Exhibit 4-G to the registrant's Form 10-K for the fiscal year ended
September 30, 1989).
4.B4 Copy of supplemental indenture dated as of January 22, 1991, between
the registrant and United States National Bank of Oregon, as
trustee, relating to the registrant's Series G 5% Subordinated
Redeemable Capital Investment Notes (incorporated by reference to
Exhibit 4-D to the registrant's registration statement on Form S-2,
No. 33-38617).
4.B5 Copy of supplemental indenture dated as of July 6, 1992, between the
registrant and United States National Bank of Oregon, as trustee,
relating to the registrant's Series H 5% Subordinated Redeemable
Capital Investment Notes (incorporated by reference to Exhibit 4-C
to the registrant's registration statement on Form S-2, No.
33-49450).
4.B6 Copy of supplemental indenture dated as of January 9, 1995, between
the registrant and First Bank National Association, as trustee,
relating to the registrant's Series J 5% Subordinated Redeemable
Capital Investment Notes (incorporated by reference to Exhibit 4-C
to the registrant's registration statement on Form S-2, No.
33-57199).
4.C Copy of amended and restated credit agreement of May 31, 1995, among
the registrant, United States National Bank of Oregon, and
Seattle-First National Bank. (incorporated by reference to Exhibit
4-C to the registrant's Form 10-K for the fiscal year ended
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September 29, 1995).
4.D 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).
4.E 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).
4.F1 Copy of Loan Purchase and Servicing Agreement dated as of May 13,
1994, among 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).
4.F2 Copy of First Amendment to Loan Purchase and Servicing Agreement of
May 13, 1994, dated as of July 15, 1994, among 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).
4.F3 Copy of Second Amendment to Loan Purchase and Servicing Agreement of
May 13, 1994, dated as of September 28, 1995, among United
Resources, Inc., the registrant, and National Consumer Cooperative
Bank.(incorporated by reference to Exhibit 4.F3 to the registrant's
Form 10-K for the fiscal year ended September 29,
1995).
4.F4 Copy of Loan Purchase and Servicing Agreement (Holdback Program)
dated as of September 28, 1995, between United Resources, Inc., as
Seller and Servicer, and National Consumer Cooperative Bank, as
Buyer, and related guaranty agreement between the registrant and
National Consumer Cooperation Bank (incorporated by reference to
Exhibit 4.F4 to the registrant's Form 10-K for the fiscal year ended
September 29, 1995).
4.G 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).
Pursuant to Item 601 (b)(4)(iii) of Regulation S-K, the registrant is not filing
certain instruments with respect to its long-term debt because the amount
authorized under any such instrument does not exceed 10 percent of the total
consolidated assets of the registrant at September 27, 1996. The registrant
agrees to furnish a copy of any such instrument to the Securities and Exchange
Commission upon request.
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).
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10.B* 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.C* Copy of binder of insurance with respect to indemnification of
officers and directors (incorporated by reference to Exhibit 10.C to
the registrant's Form 10-K for the fiscal year ended October 1,
1993).
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-D1b to the
registrant's Form 10-K for the fiscal year ended October 2, 1992).
10.D1c Installment note.(incorporated by reference to Exhibit 10-D1c to the
registrant's Form 10-K for the fiscal year ended September 29,
1995).
10.D1d Renewal note for fixed rate loan.(incorporated by reference to
Exhibit 10-D1d to the registrant's Form 10-K for the fiscal year
ended September 29, 1995).
10.D1e 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.D1f 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.D1g 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.D1h 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.D1i Amendment to installment note and security agreements. (incorporated
by reference to Exhibit 10-D1i to the registrant's Form 10-K for the
fiscal year ended September 29, 1995).
10.D1j 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.D1k 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.D1l 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.D1m 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.D1n 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.D1o 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 copy executed in connection
with loans to directors. A schedule showing the principal amount and interest
rate of each director loan at November 30, 1996, appears in Item 13.C of this
Form 10-K. The registrant agrees to furnish a copy of any omitted loan document
to the Securities and Exchange Commission upon request.
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10.D2 Typical form of residual stock redemption note executed in
connection with redemption of common stock from members
(incorporated by reference to Exhibit 10-D2 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 form listed above in lieu of filing each copy 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 T. Danielson (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 T. Danielson (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 T. Danielson (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 T. Danielson (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 T. Danielson
(incorporated by reference to Exhibit 10.C to the registrant's Form
10-Q for the quarterly period ended April 1, 1994).
10.F1 Copy of sublease agreement for Troutdale store dated December 15,
1993, between the registrant and a partnership in which Robert A.
Lamb is a partner (incorporated by reference to Exhibit 10-F1 to the
registrant's Form 10-K for the fiscal year ended September 29,
1995).
10.F2 Copy of sublease agreement for Wilsonville store dated June 25,
1991, between the registrant and a partnership in which Robert A.
Lamb is a partner (incorporated by reference to Exhibit 10-F2 to the
registrant's Form 10-K for the fiscal year ended September 29,
1995).
10.G Copy of sublease agreement for Magalia store dated March 15, 1994,
between the registrant and Al Mancasola Grocery Markets, Inc., a
corporation controlled by Ronald L. Mancasola (incorporated by
reference to Exhibit 10-G to the registrant's Form 10-K for the
fiscal year ended September 29, 1995).
10.H1 Copy of sublease agreement for Silverton store effective as of
December 14, 1994, between the registrant and a partnership in which
David D. Neal is a partner (incorporated by reference to Exhibit
10-H1 to the registrant's Form 10-K for the fiscal year ended
September 29, 1995).
10.H2 Copy of assignment of real property sale contract dated February 20,
1985, by David D. Neal to the registrant (incorporated by reference
to Exhibit 10-H2 to the registrant's Form 10-K for the fiscal year
ended September 29, 1995).
10.I1 Copy of sublease agreement for Coos Bay store dated February 28,
1991, between the registrant and Raymond Nidiffer (incorporated by
reference to Exhibit 10-I19 to the registrant's Form 10-K for the
fiscal year ended September 27, 1991).
10.I2 Copy of sublease agreement for Arcata store dated August 11, 1977,
between the registrant and Raymond L. Nidiffer (incorporated by
reference to Exhibit 10-Q2 of the registrant's registration
statement on Form S-2, No. 33-26631).
10.I3 Copy of sublease agreement for Gold Beach store dated July 6,
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1979, between the registrant and Raymond L. Nidiffer (incorporated
by reference to Exhibit 10-Q3 of the registrant's registration
statement on Form S-2, No. 33-26631).
10.I4 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 (incorporated by reference to Exhibit 10-Q4 of
the registrant's registration statement on Form S-2, No. 33-26631).
10.I5 Copy of sublease agreement for Rogue River store dated June 25,
1976, between the registrant and Raymond L. Nidiffer (incorporated
by reference to Exhibit 10-Q5 of the registrant's registration
statement on Form S-2, No. 33-26631).
10.I6 Copy of lease agreement for Coos Bay store dated February 28, 1991,
between the registrant and Raymond L. Nidiffer (incorporated by
reference to Exhibit 10-I20 to the registrant's Form 10-K for the
fiscal year ended September 27, 1991).
10.I7 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 (incorporated by reference to
Exhibit 10-I12 to the registrant's Form 10-K for the fiscal year
ended September 30, 1989).
10.I8 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 (incorporated by reference to Exhibit 10.F8 to the
registrant's Form 10-K for the fiscal year ended September 30,
1994).
10.I9 Copy of agreement dated August 29, 1996, between the registrant and
C&K Markets, Inc., an affiliate of Raymond L. Nidiffer, with respect
to purchase volume.
12** Statement of Computation of Ratio of Adjusted Income to Fixed
Charges.
22** Subsidiaries of the registrant.
24** Power of Attorney of certain directors of the registrant.
27** Financial Data Schedule.
* Denotes management contract or compensatory plan or arrangement.
** Previously filed
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EXHIBIT 10.I9
AGREEMENT
This agreement by and between United Grocers, Inc., hereafter referred to as
(U.G.), and C & K Markets, Inc., hereafter referred to as (C & K), is drafted to
address the value of C & K's purchase volume of product from U.G.
C & K agrees to increase their overall purchases from U.G. beginning September
of 1996. U.G. places a value on C & K's said purchase volume, and are hereby
willing to rebate an amount up to $165,808.00 to C & K.
U.G. will issue three equal credits or checks to C & K on November 1, 1996, and
the like amount on November 1, 1997 and November 1, 1998. Both parties will act
in good faith to meet the agreed upon obligations.
/s/ Doug Nidiffer /s/ Alan C. Jones
- ------------------------------- -------------------------------------
C & K Markets, Inc. Alan C. Jones
Doug Nidiffer United Grocers, Inc.
August 29, 1996
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