<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1999.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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THE KROGER CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
OHIO 31-0345740
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
1014 VINE STREET
CINCINNATI, OHIO 45202
(513) 762-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OR
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PAUL W. HELDMAN, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
THE KROGER CO.
1014 VINE STREET
CINCINNATI, OHIO 45202
(513) 762-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED UNIT(1) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities(4)(5)(10)...........
Preferred Stock(6)(7)(10)...........
Depositary Shares(7)(10)............
Common Stock, $1 par value per share
(including Preferred Stock
Purchase Rights)(8)(10)........... (3) (3) (3) (3)
Warrants(9)(10).....................
Total....................... $2,000,000,000(10) 100% $2,000,000,000(10) $556,000(12)
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</TABLE>
(1) The proposed maximum offering price per unit will be determined by us in
connection with the issuance of the securities.
(2) The proposed maximum aggregate offering price has been estimated solely to
calculate the registration fee under Rule 457(o).
(3) Not applicable under General Instruction II.D. of Form S-3.
(4) Includes guarantees (if any) of Debt Securities by Co-Registrants who are
direct and indirect subsidiaries of the Registrant.
(5) Subject to note (11) below, we are registering an indeterminate principal
amount of Debt Securities. If any Debt Securities are issued at an original
issue discount, then the offering price will be in such greater principal
amount as will result in an aggregate initial offering price not to exceed
$2,000,000,000 less the dollar amount of any securities previously issued.
(6) Subject to note (11) below, we are registering an indeterminate number of
shares of Preferred Stock.
(7) Subject to note (11) below, we are registering an indeterminate number of
Depositary Shares to be evidenced by Depositary Receipts issued under a
Deposit Agreement. If we elect to offer fractional interests in shares of
Preferred Stock, Depositary Receipts will be distributed for such
fractional interests and the shares of Preferred Stock will be issued to
the depositary under the Deposit Agreement.
(8) Subject to note (11) below, we are registering an indeterminate number of
shares of Common Stock. We are also registering an indeterminate number of
shares of Common Stock to be issued, upon conversion or redemption of
Preferred Stock or Debt Securities. Includes associated Preferred Stock
Purchase Rights (the "Rights"). Until the occurrence of certain prescribed
events, none of which has occurred, the Rights are not exercisable, are
evidenced by the certificates representing the Common Stock, and will be
transferred only with the Common Stock.
(9) Subject to note (11) below, we are registering an indeterminate amount and
number of Warrants, representing rights to purchase Debt Securities,
Preferred Stock or Common Stock.
(10) Subject to note (11) below, we are registering an indeterminate number of
shares of Debt Securities, Preferred Stock, Depositary Shares and Common
Stock, to be issued upon conversion or redemption, or upon the exercise of
Warrants, Debt Securities, Preferred Stock or Depositary Shares.
(11) In no event, will the aggregate initial offering price of all securities
exceed $2,000,000,000 or the equivalent in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered is further limited to that which is permissible
under Rule 415(a)(4) under the Securities Act. The registered securities
may be sold separately or as units with other registered securities.
(12) Previously paid relating to the amount of Securities remaining and carried
forward under Rule 429.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT CONTAINS A PROSPECTUS THAT RELATES TO $2,000,000,000 OF
SECURITIES REMAINING AS REGISTERED UNDER REGISTRATION STATEMENT NO. 333-74389 TO
THE EXTENT REMAINING ON THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
The following entities are direct or indirect subsidiaries of Registrant,
and may guarantee one or more issues of Debt Securities, and are Co-Registrants
under this Registration Statement:
<TABLE>
<CAPTION>
STATE OF INCORPORATION/ IRS EMPLOYER
NAME ORGANIZATION IDENTIFICATION NO.
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<S> <C> <C>
Dillon Companies, Inc. Kansas 48-0196590
Drug Distributors, Inc. Indiana 31-1112998
Henpil, Inc. Texas 74-6044519
Inter-American Foods, Inc. Ohio 74-1491846
J. V. Distributing, Inc. Michigan 31-1107025
KRGP Inc. Ohio 31-1569084
KRLP Inc. Ohio 31-1579339
The Kroger Co. of Michigan Michigan 38-0900860
Kroger Dedicated Logistics Co. Ohio 31-1399126
Kroger Limited Partnership I Ohio 31-1569568
Kroger Limited Partnership II Ohio 31-1569087
Peyton's-Southeastern, Inc. Tennessee 61-0942129
Rocket Newco, Inc. Texas 76-0542912
Topvalco, Inc. Ohio 31-0574717
Vine Court Assurance Incorporated Vermont 31-1192645
Wydiv, Inc. Texas 75-6032155
City Market, Inc. Colorado 84-0595476
Dillon Real Estate Co., Inc. Kansas 48-0680105
Jackson Ice Cream Co., Inc. Kansas 48-0686152
Junior Food Stores of West Florida, Inc. Florida 59-0980071
Kwik Shop, Inc. Kansas 48-6112339
Mini Mart, Inc. Wyoming 83-0208334
Quik Stop Markets, Inc. California 94-1610162
THGP Co., Inc. Pennsylvania 23-2922125
THLP Co., Inc. Pennsylvania 23-2922123
Turkey Hill, L.P. Pennsylvania 23-2922126
Wells Aircraft, Inc. Kansas 48-0690719
Fred Meyer, Inc. Delaware 91-1826443
Fred Meyer Stores, Inc. Delaware 93-0798201
CB&S Advertising Agency, Inc. Oregon 93-0587794
Distribution Trucking Company Oregon 93-0786441
FM, Inc. Utah 93-1197669
FM Holding Corporation Delaware 93-0864302
Grand Central, Inc. Utah 87-0277527
FM Retail Services, Inc. Washington 91-1628326
Fred Meyer of Alaska, Inc. Alaska 93-0802793
Fred Meyer of California, Inc. California 93-0979434
Fred Meyer Jewelers, Inc. Delaware 93-1197671
Merksamer Jewelers, Inc. California 68-0202947
Roundup Co. Washington 93-0798202
JH Properties, Inc. Washington 91-1816127
Smith's Food & Drug Centers, Inc. Delaware 87-0258768
Compare, Inc. Delaware 86-0609950
Richie's, Inc. Texas 74-2047032
Saint Lawrence Holding Company Delaware 86-0504830
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
STATE OF INCORPORATION/ IRS EMPLOYER
NAME ORGANIZATION IDENTIFICATION NO.
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<S> <C> <C>
Smith's Beverage of Wyoming, Inc. Wyoming 80-0126833
Smitty's Supermarkets, Inc. Delaware 86-0765032
Smitty's Equipment Leasing, Inc. Delaware 86-0758585
Smitty's Super Valu, Inc. Delaware 13-3054103
Treasure Valley Land Company, L.C Idaho 82-0474377
Western Property Investment Group, Inc. California 87-0485081
Quality Food Centers, Inc. Washington 91-1330075
Hughes Markets, Inc. California 95-1947206
Hughes Realty, Inc. California 95-2253719
KU Acquisition Corporation Washington 91-1765648
Second Story, Inc. Washington 91-1753356
Quality Food, Inc. Delaware 91-1829342
Quality Food Holdings, Inc. Delaware 91-1829339
QFC Sub, Inc. Washington 91-1931177
Food 4 Less Holdings, Inc. Delaware 33-0642810
Ralphs Grocery Company Delaware 95-4356030
Alpha Beta Company California 95-1456805
Bay Area Warehouse Stores, Inc. California 93-1087199
Bell Markets, Inc. California 94-1569281
Cala Co. Delaware 95-4200005
Cala Foods, Inc. California 94-1342664
Crawford Stores, Inc. California 95-0657410
Food 4 Less of California, Inc. California 33-0293011
Food 4 Less of Southern California, Inc. Delaware 33-0483203
Food 4 Less Merchandising, Inc. California 33-0483193
Food 4 Less GM, Inc. California 95-4390406
</TABLE>
<PAGE> 4
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED AUGUST 20, 1999
PROSPECTUS
$2,000,000,000
THE KROGER CO.
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
We may offer any of the following securities from time to time:
- debt securities;
- preferred stock;
- depositary shares relating to preferred stock;
- common stock; and
- warrants to purchase debt securities, common stock or preferred stock.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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August , 1999
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
The Kroger Co............................................... 3
Consolidated Ratio of Earnings to Fixed Charges............. 4
Use of Proceeds............................................. 4
Plan of Distribution........................................ 4
Description of Debt Securities.............................. 5
Description of Capital Stock................................ 9
Description of the Depositary Shares........................ 12
Description of the Warrants................................. 15
Experts..................................................... 17
Legal Opinions.............................................. 17
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell any combination of the securities described in this prospectus in one or
more offerings up to a total dollar amount of $2,000,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
Kroger files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C.
20549, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
Web site at http://www.sec.gov.
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<PAGE> 6
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below, which we have already filed with the
SEC, and any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until we sell all of the
securities.
<TABLE>
<CAPTION>
KROGER SEC FILINGS (FILE NO. 1-303) PERIOD
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<S> <C>
Annual Report on Form 10-K......... Year ended January 2, 1999 (as amended).
Quarterly Reports on Form 10-Q..... Quarter ended May 22, 1999
Current Reports on Form 8-K or Form
8-K/A............................ January 8, 1999; January 15, 1999;
January 28, 1999; April 30, 1999; May 10,
1999; May 28, 1999; May 28, 1999, as
amended; June 17, 1999; June 23, 1999;
June 25, 1999; July 20, 1999; and August
20, 1999.
Registration Statement on Form
8-A/A, dated April 4, 1997, as
amended on Form 8-A/A, dated
October 18, 1998................... Description of preferred stock purchase
rights
</TABLE>
You may request a copy of these filings, other than any exhibits, unless we
have specifically incorporated by reference an exhibit in this prospectus, at no
cost, by writing or telephoning us at the following address:
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45202-1100
(513) 762-4000
Attention: Paul Heldman
This prospectus is part of a registration statement we filed with the SEC.
We have incorporated into this registration statement exhibits that include a
form of proposed underwriting agreement and indenture. You should read the
exhibits carefully for provisions that may be important to you.
You should rely on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone to
provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or the documents incorporated by
reference is accurate as of any date other than the date on the front of this
prospectus or those documents.
THE KROGER CO.
Kroger was founded in 1883 and incorporated in Ohio in 1902. As of January
2, 1999, we were the largest grocery retailer in the United States based on
annual sales. We also manufacture and process food that our supermarkets sell.
Our principal executive offices are located at 1014 Vine Street, Cincinnati,
Ohio 45202-1100, and our telephone number is (513) 762-4000.
3
<PAGE> 7
As of completion of our merger with Fred Meyer, Inc. on May 27, 1999, we
have operated approximately 2,200 supermarkets and multidepartment stores in 31
states, 797 convenience stores in 15 states and 381 fine jewelry stores in 25
states. One hundred thirteen of the convenience stores are franchised to third
parties in three states. We also operate manufacturing facilities that permit us
to offer quality, low-cost private label products.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The table below presents our consolidated ratio of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
QUARTER ENDED FISCAL YEARS ENDED
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MAY 22, MARCH 21, JANUARY 2, DECEMBER 27, DECEMBER 28, DECEMBER 30, DECEMBER 31,
1999 1998 1999 1997 1996 1995 1994
(16 WEEKS) (12 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS)
- ---------- ---------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
3.0 1.7 2.5 2.5 2.2 2.0 1.8
</TABLE>
"Earnings" includes:
- earnings before tax expense; and
- extraordinary loss, plus fixed charges,
and excludes capitalized interest.
"Fixed charges" includes:
- interest, including capitalized interest, on all indebtedness;
- amortization of deferred financing costs; and
- that portion of rental expense that we believe is representative of
interest.
USE OF PROCEEDS
We will use the net proceeds from the sale of the securities to repay
amounts under our bank credit facilities, to retire debt, and for other general
corporate purposes.
PLAN OF DISTRIBUTION
We may sell the securities in any one or more of the following ways:
- directly to investors;
- to investors through agents or dealers;
- through underwriting syndicates led by one or more managing underwriters;
and
- through one or more underwriters acting alone.
If we use underwriters in the sale, the obligations of the underwriters to
purchase the securities will be subject to conditions. The underwriters will be
obligated to purchase all the securities offered, if any are purchased. The
underwriters will acquire the securities for their own account. The underwriters
may resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The underwriters may change from time to time any initial
4
<PAGE> 8
public offering price and any discounts or concessions allowed or re-allowed or
paid to dealers.
We may use agents in the sale of securities. Unless indicated in the
prospectus supplement, the agent will be acting on a best efforts basis for the
period of its appointment.
If we use a dealer in the sale of the securities, we will sell the
securities to the dealer as principal. The dealer may then resell the securities
to the public at varying prices it determines at the time of resale.
We also may sell the securities in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment, by a remarketing firm
acting as principal for its own account or as our agent. Remarketing firms may
be deemed to be underwriters in connection with the securities they remarket.
We may authorize underwriters, dealers or agents to solicit offers to
purchase the securities under a delayed delivery contract providing for payment
and delivery at a future date.
We will identify any underwriters or agents and describe their
compensation, including any discounts or commissions, in a prospectus
supplement. Underwriters, dealers and agents that participate in the
distribution of the offered securities may be underwriters as defined in the
Securities Act of 1933. Any discounts or commissions received by them from us
and any profit on the resale of the securities by them may be treated as
underwriting discounts and commissions.
We may have agreements with the underwriters, dealers and agents to
indemnify them against some civil liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments that the underwriters,
dealers or agents may be required to make. Underwriters, dealers or agents may
engage in transactions with, or perform services for, us in the ordinary course
of their business.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes the terms and provisions of the debt securities.
When we offer to sell a particular series of debt securities, we will describe
the specific terms of the securities in a supplement to this prospectus. The
prospectus supplement also will indicate whether the general terms and
provisions described in this prospectus apply to the particular series of debt
securities.
The debt securities will be issued under an indenture between Kroger and a
trustee to be selected by us. The indenture allows us to have different trustees
for each debt security offering.
We have summarized the material terms of the indenture below. The indenture
is included as an exhibit to the registration statement for these securities
that we have filed with the SEC. You should read the indenture for the
provisions that are important to you.
PRINCIPAL TERMS OF THE DEBT SECURITIES
The debt securities will rank equally and ratably with all of our other
unsecured and unsubordinated indebtedness.
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A prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to that series of debt securities.
These terms will include some or all of the following:
- their type and title;
- their total principal amount and currency or currency unit;
- the denominations in which they are authorized to be issued;
- the percentage of their principal amount at which they will be issued;
- the date on which they will mature;
- if they bear interest, the interest rate or the method by which the
interest rate will be determined;
- the times at which any interest will be payable or the manner of
determining the interest payment dates;
- any optional or mandatory redemption periods and the redemption or
purchase price;
- any guarantees by our direct and indirect subsidiaries;
- any sinking fund requirements;
- any special United States federal income tax considerations;
- whether they are to be issued in the form of one or more temporary or
permanent global securities and, if so, the identity of the depositary
for the global securities;
- any information with respect to book-entry procedures;
- the manner in which the amount of any payments of principal and interest
determined by reference to an index are determined; and
- any other specific terms not inconsistent with the indenture.
DENOMINATIONS, REGISTRATION, TRANSFER AND PAYMENT
We will issue the debt securities in registered form without coupons or in
the form of one or more global securities, as described below under "Global
securities." We will issue registered securities denominated in U.S. dollars
only in denominations of $1,000 or any integral multiple of $1,000. We will
issue global securities in a denomination equal to the total principal amount of
outstanding debt securities of the series represented by the global security. We
will describe the denomination of debt securities denominated in a foreign or
composite currency in a prospectus supplement.
You may present registered securities for registration of transfer at the
office of the registrar or at the office of any transfer agent designated by us.
We will pay principal and any premium and interest on registered securities
at the office of the paying agent. We may choose to make any interest payment
(1) by check mailed to the holder's address appearing in the register or (2) by
wire transfer to an account maintained by the holder as specified in the
register. We will make interest payments to the person in whose name the debt
security is registered at the close of business on the day or days specified by
us.
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<PAGE> 10
The trustee's principal office in the City of New York, Chicago,
Cincinnati, or other location, will be designated as the sole paying agent for
payments on registered securities.
GLOBAL SECURITIES
We will deposit global securities with the depositary identified in the
prospectus supplement. A global security is a security, typically held by a
depositary, that represents the beneficial interests of a number of purchasers
of the security.
After we issue a global security, the depositary will credit on its
book-entry registration and transfer system the respective principal amounts of
the debt securities represented by the global security to the accounts of
persons that have accounts with the depositary. These account holders are known
as "participants." The underwriters or agents participating in the distribution
of the debt securities will designate the accounts to be credited. Only a
participant or a person that holds an interest through a participant may be the
beneficial owner of a global security. Ownership of beneficial interests in the
global security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the depositary and its
participants.
We and the trustee will treat the depositary or its nominee as the sole
owner or holder of the debt securities represented by a global security. Except
as set forth below, owners of beneficial interests in a global security will not
be entitled to have the debt securities represented by the global security
registered in their names. They also will not receive or be entitled to receive
physical delivery of the debt securities in definitive form and will not be
considered the owners or holders of the debt securities.
Principal, any premium and any interest payments on debt securities
represented by a global security registered in the name of a depositary or its
nominee will be made to the depositary or its nominee as the registered owner of
the global security. None of Kroger, the trustee or any paying agent will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global
security or for maintaining, supervising or reviewing any records relating to
the beneficial ownership interests.
We expect that the depositary, upon receipt of any payments, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the global
security as shown on the depositary's records. We also expect that payments by
participants to owners of beneficial interests in the global security will be
governed by standing instructions and customary practices, as is the case with
the securities held for the accounts of customers registered in "street names"
and will be the responsibility of the participants.
If the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by us within ninety days,
we will issue registered securities in exchange for the global security. In
addition, we may at any time in our sole discretion determine not to have any of
the debt securities of a series represented by global securities. In that event,
we will issue debt securities of that series in definitive form in exchange for
the global securities.
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<PAGE> 11
EVENTS OF DEFAULT
When we use the term "Event of Default" in the indenture, here are examples
of what we mean:
- we fail to pay the principal or any premium on any debt security when
due;
- we fail to deposit any sinking fund payment when due;
- we fail to pay interest when due on any security for 30 days;
- we fail to comply with any other covenant in the debt securities and this
failure continues for 60 days after we receive written notice of it;
- we default in any of our other indebtedness in excess of $50,000,000, and
that results in an acceleration of maturity; or
- we take specified actions relating to our bankruptcy, insolvency or
reorganization.
The supplemental indenture or the form of security for a particular series
of debt securities may include additional Events of Default or changes to the
Events of Default described above. You should refer to the prospectus supplement
for the Events of Default relating to a particular series of debt securities. A
default under one series of debt securities will not necessarily be a default
under another series.
If an Event of Default for debt securities of any series occurs and is
continuing, the trustee or the holders of at least 25% in principal amount of
all of the debt securities of that series outstanding may require us to
immediately repay all of the principal and interest due on the debt securities
of that series. The holders of a majority in principal amount of all of the debt
securities of that series may rescind this accelerated payment requirement, if
the rescission would not conflict with any judgment or decree by a court and if
all existing Events of Default have been cured or waived.
If an Event of Default occurs and is continuing, the trustee may pursue any
remedy available to it to collect payment or to enforce the performance of any
provision of the debt securities or the indenture.
The holders of a majority in principal amount of the debt securities may
generally waive an existing default and its consequences.
MODIFICATION OF THE INDENTURE
The indenture may be amended without the consent of any holder of debt
securities:
- to cure any ambiguity, defect or inconsistency;
- to permit a successor to assume our obligations under the indenture;
- to add additional covenants for the benefit of holders;
- to add additional Events of Default;
- to add or change provisions necessary to facilitate the issuance of
securities; or
- to entitle the securities to the benefit of security.
The indenture may be amended with the written consent of the holders of at
least 50% in principal amount of the debt securities of the series affected by
the amendment. Holders of at least 50% in principal amount of the debt
securities may waive our
8
<PAGE> 12
compliance with any provision of the indenture or the debt securities by giving
notice to the trustee.
However, no amendment or waiver that
- changes the maturity of principal or any installment of principal or
interest;
- reduces the amount of principal or interest or premium payable on
redemption;
- reduces the amount of debt securities whose holders must consent to an
amendment or waiver;
- modifies provisions related to rights of holders to redeem securities at
their option; or
- changes other rights of holders as specifically identified in the
indenture
will be effective against any holder without the holder's consent.
OTHER DEBT SECURITIES
In addition to the debt securities described above, we may issue
subordinated debt securities that rank junior to our senior debt securities.
These debt securities will be described in a prospectus supplement and will be
issued pursuant to an indenture entered into between Kroger and a trustee that
we select. The indenture will be filed with the SEC and qualified under the
Trust Indenture Act.
OTHER LIMITATIONS
The prospectus supplement may contain provisions that limit our ability to
consolidate or merge with other companies. It also may contain provisions that
limit our right to incur liens and to engage in sale and leaseback transactions.
DESCRIPTION OF CAPITAL STOCK
Our Amended Articles of Incorporation authorize us to issue 1,000,000,000
shares of common stock, $1 par value per share, and 5,000,000 shares of
cumulative preferred stock, $100 par value per share. At our annual meeting of
shareholders in 1999, our shareholders authorized an increase in the authorized
shares of common stock to 2,000,000,000, but that increase has not yet been
implemented. As of May 22, 1999, there were outstanding 515,577,928 shares of
common stock, adjusted for the distribution in the nature of a two for one stock
split made on June 28, 1999, and no shares of cumulative preferred stock.
COMMON STOCK
All outstanding common stock is, and any stock issued under this prospectus
will be, fully paid and nonassessable. Subject to rights of preferred
stockholders if any preferred stock is issued and outstanding, holders of common
stock
- are entitled to any dividends validly declared;
- will share ratably in our net assets in the event of a liquidation; and
- are entitled to one vote per share, unless they are entitled to
cumulative voting for the election of directors.
The common stock has no conversion rights. Holders of common stock have no
preemption, subscription, redemption, or call rights related to those shares.
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<PAGE> 13
The Bank of New York is the transfer agent and registrar for our common
stock.
PREFERRED STOCK
This prospectus describes the terms and provisions of our preferred stock.
When we offer to sell a particular series of preferred stock, we will describe
the specific terms of the securities in a supplement to this prospectus. The
prospectus supplement will also indicate whether the terms and provisions
described in this prospectus apply to the particular series of preferred stock.
The preferred stock will be issued under a certificate of designations relating
to each series of preferred stock. It is also subject to our Amended Articles of
Incorporation.
We have summarized the material portions of the certificate of designations
below. The certificate of designations will be filed with the SEC in connection
with an offering of preferred stock.
Our Amended Articles of Incorporation authorize us to issue 5,000,000
shares of preferred stock, par value $100 per share. Our Board is authorized to
designate any series of preferred stock and the powers, preferences and rights
of the preferred stock without further shareholder action. As of March 3, 1999,
we had no shares of preferred stock outstanding. On that same date, 50,000
shares were reserved for issuance under our warrant dividend plan. These shares
are designated "Series A Preferred Shares."
Our Board is authorized to determine or fix the following terms for each
series of preferred stock, which will be described in a prospectus supplement:
- the designation and number of shares;
- the dividend rate;
- the payment date for dividends and the date from which dividends are
cumulative;
- our redemption rights and the redemption prices;
- amounts payable to holders on our liquidation, dissolution or winding up;
- the amount of the sinking fund, if any;
- whether the shares will be convertible or exchangeable, and if so the
prices and terms; and
- whether future shares of the series or any future series or other class
of stock is subject to any restrictions, and if so the nature of the
restrictions.
When we issue shares of preferred stock, they will be fully paid and
nonassessable.
Dividends
The holders of preferred stock will be entitled to receive cash dividends
if declared by our Board of Directors out of funds we can legally use for
payment. The prospectus supplement will indicate the dividend rates and the
dates on which we will pay dividends. The rates may be fixed or variable or
both. If the dividend rate is variable, the formula used to determine the
dividend rate will be described in the prospectus supplement. We will pay
dividends to the holders of record as they appear on the record dates fixed by
our Board.
Our Board will not declare and pay a dividend on any series of preferred
stock unless full dividends for all series of preferred stock ranking equal as
to dividends have been
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<PAGE> 14
declared or paid and sufficient funds are set aside for payment. If dividends
are not paid in full, we will declare any dividends pro rata among the preferred
stock of each series and any series of preferred stock ranking equal to any
other series as to dividends. A "pro rata" declaration means that the dividends
we declare per share on each series of preferred stock will bear the same
relationship to each other that the full accrued dividends per share on each
series of the preferred stock bear to each other.
Unless all dividends on the preferred stock have been paid in full, we will
not declare or pay any dividends or set aside sums for payment of dividends or
distributions on any common stock or on any class of security ranking junior to
the series of preferred stock, except for dividends or distributions paid for
with securities ranking junior to the preferred stock. We also will not redeem,
purchase, or otherwise acquire any securities ranking junior to the series of
preferred stock as to dividends or liquidation preferences, except by conversion
into or exchange for stock junior to the series of preferred stock.
Convertibility
We will not convert or exchange any series of preferred stock for other
securities or property, unless otherwise indicated in the prospectus supplement.
Redemption and sinking fund
We will not redeem or pay into a sinking fund any series of preferred
stock, unless otherwise indicated in the prospectus supplement.
Liquidation rights
If we voluntarily or involuntarily liquidate, dissolve or wind up our
business, holders of any series of preferred stock will be entitled to receive
the liquidation preference per share specified in the prospectus supplement and
all accrued and unpaid dividends. We will pay these amounts to the holders of
each series of the preferred stock, and all amounts owing on any preferred stock
ranking equally with that series of preferred stock as to distributions upon
liquidation. These payments will be made out of our assets available for
distribution to shareholders before any distribution is made to holders of
common stock or any class of stock ranking junior to the series of preferred
stock as to dividends and liquidation preferences.
In the event there are insufficient assets to pay the liquidation
preferences for all equally-ranked classes of preferred stock in full, we will
allocate the remaining assets equally among all series of equally-ranked
preferred stock based upon the aggregate liquidation preference for all
outstanding shares for each series. This distribution means that the
distribution we pay to the holders of all shares ranking equal as to
distributions if we dissolve, liquidate or wind up our business will bear the
same relationship to each other that the full distributable amounts for which
the holders are respectively entitled if we dissolve, liquidate or wind up our
business bear to each other. After we pay the full amount of the liquidation
preference to which they are entitled, the holders of shares of a series of
preferred stock will not be entitled to participate in any further distribution
of our assets.
Voting rights
Holders of preferred stock will be entitled to one vote per share, unless
otherwise indicated in the prospectus supplement or otherwise required by law.
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<PAGE> 15
Transfer agent and registrar
The prospectus supplement for each series of preferred stock will name the
transfer agent and registrar.
PREFERRED STOCK PURCHASE RIGHTS
On February 28, 1996, we adopted a shareholders' rights plan providing for
stock purchase rights to owners of Kroger common shares. The shareholders'
rights plan was amended and restated on April 4, 1997, and further amended on
October 18, 1998. Each right, when exercisable, entitles the holder to purchase
from us one ten-thousandth of a share. The rights will become exercisable, and
separately tradeable, ten days after a person or group acquires 10% or more of
our common shares or ten business days following a tender offer or exchange
offer resulting in a person or group having beneficial ownership of 10% or more
of our common shares. In the event the rights become exercisable, each right
will entitle the holder the right, if that holder pays the exercise price, to
purchase Kroger common shares, having a market value of twice the exercise price
of the right. Under other circumstances, including some acquisitions of Kroger
in a merger or other business combination transaction, or if 50% or more of our
assets or earning power are sold under some circumstances, each right will
entitle the holder to receive upon payment of the exercise price, shares of
common stock of the acquiring company with a market value of twice the exercise
price. At our option, the rights, before becoming exercisable, are redeemable in
their entirety at a price of $.01 per right. The rights may be adjusted and
expire March 19, 2006.
This summary is qualified by the full text of the shareholders' rights
plan. A copy of this plan is filed as an exhibit to the registration statement
and is incorporated into this prospectus by reference.
DESCRIPTION OF THE DEPOSITARY SHARES
This prospectus describes the terms and provisions of our depositary
shares. When we offer to sell depositary shares, we will describe the specific
terms for the securities in a supplement to this prospectus. The prospectus
supplement also will indicate whether the terms and provisions described in this
prospectus apply to the depositary shares being offered.
We have summarized the material portions of the deposit agreement below.
The deposit agreement will be filed with the SEC in connection with an offering
of depositary shares.
We may offer fractional interests in preferred stock, rather than full
shares of preferred stock. If we do, we will provide for a depositary to issue
to the public receipts for depositary shares, each of which will represent
ownership of and entitlement to all rights and preferences of a fractional
interest in a share of preferred stock of a specified series. These rights
include dividend, voting, redemption and liquidation rights. The applicable
fraction will be specified in a prospectus supplement. The shares of preferred
stock represented by the depositary shares will be deposited with a depositary
named in a prospectus supplement, under a deposit agreement among us, the
depositary and the holders of the depositary receipts.
The depositary shares will be evidenced by depositary receipts issued under
the deposit agreement. The depositary will be the transfer agent, registrar and
dividend
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<PAGE> 16
disbursing agent for the depositary shares. Holders of depositary receipts agree
to be bound by the deposit agreement, which requires holders to file proof of
residence and pay charges.
DIVIDENDS
The depositary will distribute all cash dividends or other cash
distributions received to the record holders of depositary receipts in
proportion to the number of depositary shares owned by them on the relevant
record date. The record date will be the same date as the record date we fix for
the applicable series of preferred stock.
If we make a non-cash distribution, the depositary will distribute property
to the holders of depositary receipts, unless the depositary determines, after
consultation with us, that it is not feasible to make this distribution. If this
occurs, the depositary may, with our approval, adopt any other method for the
distribution as it deems appropriate, including the sale of the property and
distribution of the net proceeds from the sale.
LIQUIDATION PREFERENCE
If we voluntarily or involuntarily liquidate, dissolve or wind up our
business, the holders of each depositary share will receive the fraction of the
liquidation preference accorded each share of the applicable series of preferred
stock.
REDEMPTION
If we redeem the series of preferred stock underlying the depositary
shares, we will redeem the depositary shares from the redemption proceeds of the
preferred stock held by the depositary. Whenever we redeem any preferred stock
held by the depositary, the depositary will redeem on the same redemption date
the number of depositary shares representing the preferred stock being redeemed.
The depositary will mail the notice of redemption between 30 to 60 days prior to
the date fixed for redemption to the record holders of the depositary receipts.
VOTING
The depositary will promptly mail information contained in any notice of
meeting it receives from us to the record holders of the depositary receipts.
Each record holder of depositary receipts will be entitled to instruct the
depositary as to its exercise of its voting rights pertaining to the number of
shares of preferred stock represented by its depositary shares. The depositary
will try, if practical, to vote the preferred stock underlying the depositary
shares according to the instructions received. We will agree to try to take all
action that the depositary finds necessary in order to enable the depositary to
vote the preferred stock in that manner. The depositary will not vote any of the
preferred stock for which it does not receive specific instructions from the
holders of depositary receipts.
WITHDRAWAL OF PREFERRED STOCK
If holders surrender depositary receipts at the principal office of the
depositary and pay any unpaid amount due to the depositary, the owner of the
depositary shares is entitled to receive the number of whole shares of preferred
stock and all money and other property represented by the depositary shares.
Partial shares of preferred stock will not be issued. If the holder delivers
depositary receipts evidencing a number of depositary shares that represent more
than a whole number of shares of preferred stock, the depositary will issue a
new depositary receipt evidencing the excess number of depositary shares to that
holder.
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<PAGE> 17
Holders of preferred stock received in exchange for depositary shares will no
longer be entitled to deposit these shares under the deposit agreement or to
receive depositary receipts.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement between us and
the depositary. However, any amendment that materially and adversely alters the
rights of the holders, other than any change in fees, of depositary shares will
not be effective unless approved by the holders of at least a majority of the
depositary shares then outstanding. An amendment may not impair the right of any
owner of any depositary shares to surrender its depositary receipt with
instructions to the depositary in exchange for preferred stock, money and
property, except in order to comply with mandatory provisions of applicable law.
The deposit agreement may be terminated by us or the depositary only if:
- all outstanding depositary shares have been redeemed; or
- there has been a final distribution to the holders of the preferred stock
in connection with the liquidation, dissolution or winding up of our
business, and the distribution has been made to all the holders of
depositary shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
attributable solely to the depositary arrangements. We will pay the depositary's
charges for the initial deposit of the preferred stock and the initial issuance
of the depositary shares, any redemption of the preferred stock and all
exchanges for preferred stock. Holders of depositary receipts will pay transfer,
income and other taxes and governmental charges and other charges stated in the
deposit agreement to be for their accounts. In some circumstances, the
depositary may refuse to transfer depositary shares, may withhold dividends and
distributions and may sell the depositary shares if those charges are not paid.
OBLIGATIONS OF DEPOSITARY
The depositary will forward to the holders of depositary receipts all
reports and communications from us that are delivered to it and that we are
required to furnish to the holders of the preferred stock. In addition, the
depositary will make available for inspection by holders of depositary receipts
at its principal office, and at other places it deems advisable, any reports and
communications received from us.
We will not assume, and the depositary will not assume, any obligation or
any liability under the deposit agreement to holders of depositary receipts
other than for gross negligence or willful misconduct. We will not be liable,
and the depositary will not be liable, if we are prevented or delayed by law or
any circumstance beyond our control in performing our obligations under the
deposit agreement. Our obligations and the depositary's obligations under the
deposit agreement will be limited to performance in good faith of our and their
duties. We and the depositary will not be obligated to prosecute or defend any
legal proceeding related to any depositary shares or preferred stock unless we
receive satisfactory indemnity. We and the depositary may rely on written advice
of our counsel or accountants, on information provided by holders of depositary
receipts or other persons believed in good faith to be competent to give this
information. We also may rely on documents believed to be genuine and to have
been signed or presented by the proper party or parties.
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<PAGE> 18
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of its
election to do so. At any time we may remove the depositary. The resignation or
removal will take effect after a successor depositary is appointed and has
accepted the appointment. We must appoint a successor within 60 days after
delivery of the notice for resignation or removal and the successor depositary
must be a bank or trust company having its principal office in the United States
and having a combined capital and surplus of at least $150,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of the depositary shares will be treated for federal income tax
purposes as if they were owners of the preferred stock underlying the depositary
shares. Accordingly, the owners will be entitled to take into account for
federal income tax purposes income and deductions to which they would be
entitled if they were holders of the preferred stock. In addition:
- no gain or loss will be recognized for federal income tax purposes upon
the withdrawal of preferred stock in exchange for depositary shares;
- the tax basis of each share of preferred stock to an exchanging owner of
depositary shares will, when exchanged, be the same as the aggregate tax
basis of the depositary shares being exchanged; and
- the holding period for preferred stock in the hands of an exchanging
owner of depositary shares will include the period during which that
person owned the depositary shares.
DESCRIPTION OF THE WARRANTS
This prospectus describes the terms and provisions of the warrants. When we
offer to sell warrants, we will describe the specific terms of the warrants and
warrant agreement in a supplement to this prospectus. The prospectus supplement
also will indicate whether the terms and provisions described in this prospectus
apply to the warrants being offered.
We have summarized the material portions of the warrant agreement below.
The warrant agreement will be filed with the SEC in connection with an offering
of warrants. You should read the warrant agreement for the provisions that are
important to you.
We may issue warrants for the purchase of our debt securities, preferred
stock or common stock. Warrants may be issued alone or together with debt
securities, preferred stock or common stock offered by any prospectus supplement
and may be attached to or separate from those securities. Each series of
warrants will be issued under a separate warrant agreement to be entered into
between us and a bank or trust company, as warrant agent. The warrant agent will
act solely as our agent in connection with the warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of warrants.
DEBT WARRANTS
The prospectus supplement relating to a particular issue of warrants to
issue debt securities will describe the terms of the debt warrants, including
the following:
- their title;
- their offering price;
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<PAGE> 19
- their aggregate number;
- the designation and terms of the debt securities that can be purchased
when they are exercised;
- the designation and terms of the debt securities that are issued with the
warrants and the number of warrants issued with each debt security;
- the date when they and any debt securities issued will be separately
transferable;
- the principal amount of debt securities that can be purchased when they
are exercised and the purchase price;
- the date on which the right to exercise warrants begins and the date on
which the right expires;
- the minimum or maximum amount of warrants that may be exercised at any
one time;
- whether they and the debt securities that may be issued when they are
exercised will be issued in registered or bearer form;
- information about book-entry procedures;
- the currency or currency units in which the offering price and the
exercise price are payable;
- a discussion of material United States federal income tax considerations;
- the antidilution provisions; and
- the redemption or call provisions.
STOCK WARRANTS
The prospectus supplement relating to any particular issue of warrants to
issue common stock or preferred stock will describe the terms of the stock
warrants, including the following:
- their title;
- their offering price;
- their aggregate number;
- the designation and terms of the common stock or preferred stock that can
be purchased when they are exercised;
- the designation and terms of the common stock or preferred stock that is
issued and the number of warrants issued with shares of each common stock
or preferred stock;
- the date when they and any common stock or preferred stock issued will be
separately transferable;
- the number of shares of common stock or preferred stock that can be
purchased when they are exercised and the purchase price;
- the date on which the right to exercise them begins and the date on which
the right expires;
- the minimum or maximum amount that may be exercised at any one time;
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<PAGE> 20
- the currency or currency units in which the offering price and the
exercise price are payable;
- a discussion of material United States federal income tax considerations;
- the antidilution provisions; and
- the redemption or call provisions.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of The Kroger Co. for the year ended January 2,
1999 and to the Current Report on Form 8-K dated August 20, 1999 have been so
incorporated in reliance on the reports (which contain an explanatory paragraph
relating to the Company's change in its application of the LIFO method of
accounting for store inventories as of December 28, 1997) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements incorporated in this prospectus by reference to
the Current Report on Form 8-K dated May 10, 1999, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
The supplemental consolidated financial statements incorporated in this
prospectus by reference to the Current Report on Form 8-K dated May 28, 1999,
have been so incorporated in reliance on the report (which contains an
explanatory paragraph that describes a change in the Company's application of
the LIFO method of accounting for store inventories and an explanatory paragraph
that discloses that the supplemental financial statements give retroactive
effect to the merger of The Kroger Co. and Fred Meyer, Inc. on May 27, 1999,
which has been accounted for as a pooling of interests) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of Fred Meyer, Inc., as of January
30, 1999 and January 31, 1998 and for the fiscal years ended January 30, 1999,
January 31, 1998, and February 1, 1997, incorporated in this prospectus by
reference to Kroger's Current Report on Form 8-K dated May 28, 1999, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
Documents incorporated by reference in the future in this prospectus will
include financial statements, related schedules, if required, and auditors'
reports. The financial statements and schedules will have been audited to the
extent and for the periods identified in the reports by the firm submitting the
report. If audited financials are incorporated by reference, it will be based on
reports given on the authority of the issuing firm as experts in accounting and
auditing.
LEGAL OPINIONS
The validity of the securities we are offering will be passed upon for us
by Paul Heldman, Esq., Senior Vice President, Secretary and General Counsel of
Kroger. As of May 30, 1999, Mr. Heldman owned approximately 44,137 shares of
Kroger common stock, and had options to acquire an additional 204,583 shares.
17
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting compensation, are estimated
as follows:
<TABLE>
<S> <C>
Registration Fee for Registration Statement........ $ 556,000
Accounting Fees and Expenses....................... 75,000
Blue Sky Fees and Expenses......................... 15,000
Legal Fees and Expenses............................ 100,000
Printing and Engraving Fees........................ 100,000
Miscellaneous...................................... 50,000
----------
TOTAL............................................ $ 896,000*
==========
</TABLE>
- -------------------------
* All amounts are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Registrant's Regulations (bylaws) each present or former
director, officer or employee of the Registrant and each person who is serving
or shall have served at the request of the Registrant as a director, officer, or
employee of another corporation (and his heirs, executors and administrators)
will be indemnified by the Registrant against expenses actually and necessarily
incurred by him, and also against expenses, judgments, decrees, fines,
penalties, or amounts paid in settlement, in connection with the defense of any
pending or threatened action, suit, or proceeding, criminal or civil, to which
he is or may be made a party by reason of being or having been such director,
officer, or employee, provided (1) he is adjudicated or determined not to have
been negligent or guilty of misconduct in the performance of his duty to the
Registrant or such other corporation, (2) he is determined to have acted in good
faith in what he reasonably believed to be the best interest of the Registrant
or of such other corporation, and (3) in any matter the subject of a criminal
action, suit, or proceeding, he is determined to have had no reasonable cause to
believe that his conduct was unlawful. See also Ohio Revised Code, Section
1701.13.
The Registrant also maintains directors' and officers' reimbursement and
liability insurance pursuant to policies with aggregate limits of $125 million.
ITEM 16. EXHIBITS
<TABLE>
<C> <C> <S>
1.1 -- Form of Underwriting Agreement.
4.1 -- Amended Articles of Incorporation of The Kroger Co. are
incorporated by reference to Exhibit 3.1 of The Kroger Co.'s
Quarterly Report on Form 10-Q for the quarter ended October
3, 1998. The Kroger Co.'s Regulations are incorporated by
reference to Exhibit 4.2 of The Kroger Co.'s Registration
Statement on Form S-3 (Registration No. 33-57552) filed with
the SEC on January 28, 1993.
</TABLE>
II-1
<PAGE> 22
<TABLE>
<C> <C> <S>
4.2 -- Rights Agreement, including form of Rights Certificate,
incorporated by reference to The Kroger Co.'s Registration
Statements on Form 8-A/A dated April 4, 1997 and October 18,
1998.
4.3 -- Form of Senior Indenture (including form of securities).
Incorporated by reference to Exhibit 4.3 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-74389).
*4.4 -- Certificate of Designation of series of preferred shares.
*4.5 -- Form of Deposit Agreement for depositary shares.
*4.6 -- Form of Warrant Agreement, including form of warrant
certificate.
5.1 -- Opinion of Paul Heldman, Esq., including his consent.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.3 -- Consent of Paul Heldman, Esq., included in Exhibit 5.1.
24.1 -- Powers of Attorney.
25.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939. Incorporated by reference
to Exhibit 25.1 to the Registrant's Current Report on Form
8-K dated April 30, 1999.
</TABLE>
- -------------------------
* To be filed as an Exhibit to a document to be incorporated by reference for
the specific offering of securities, if any, to which it relates.
ITEM 17. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the Securities registered hereby, a post-effective amendment to this
Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (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 this Registration Statement; (iii) to include any
material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change
to such information in this Registration Statement; provided, however, that
the undertakings set forth in clauses (1)(i) and (1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
II-2
<PAGE> 23
(b) The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions of Item 15 of Part II 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 said 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 Securities
Act, and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
<PAGE> 24
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on August 20, 1999.
THE KROGER CO.
BY /s/ BRUCE M. GACK
------------------------------------
Bruce M. Gack
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
REGISTRANT
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
* /s/ REUBEN V. ANDERSON Director
- ------------------------------------------
Reuben V. Anderson
Director
- ------------------------------------------
Robert D. Beyer
Director
- ------------------------------------------
Ronald W. Burkle
* /s/ JOHN L. CLENDENIN Director
- ------------------------------------------
John L. Clendenin
* /s/ DAVID B. DILLON Director and President
- ------------------------------------------
David B. Dillon
Director
- ------------------------------------------
Carlton J. Jenkins
Director
- ------------------------------------------
Bruce Karatz
* /s/ JOHN T. LAMACCHIA Director
- ------------------------------------------
John T. LaMacchia
</TABLE>
II-4
<PAGE> 25
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* /s/ EDWARD M. LIDDY Director
- ------------------------------------------
Edward M. Liddy
* /s/ W. RODNEY MCMULLEN Executive Vice President and
- ------------------------------------------ Chief Financial Officer
W. Rodney McMullen
Vice Chairman of the Board of
- ------------------------------------------ Directors, Chief Operating
Robert G. Miller Officer, and Director
* /s/ CLYDE R. MOORE Director
- ------------------------------------------
Clyde R. Moore
* /s/ T. BALLARD MORTON, JR. Director
- ------------------------------------------
T. Ballard Morton, Jr.
* /s/ THOMAS H. O'LEARY Director
- ------------------------------------------
Thomas H. O'Leary
* /s/ KATHERINE D. ORTEGA Director
- ------------------------------------------
Katherine D. Ortega
* /s/ JOSEPH A. PICHLER Chairman of the Board of
- ------------------------------------------ Directors, Chief Executive
Joseph A. Pichler Officer, and Director
Director
- ------------------------------------------
Steven R. Rogel
* /s/ J. MICHAEL SCHLOTMAN Vice President and Corporate
- ------------------------------------------ Controller -- Principal
J. Michael Schlotman Accounting Officer
* /s/ MARTHA ROMAYNE SEGER Director
- ------------------------------------------
Martha Romayne Seger
* /s/ BOBBY S. SHACKOULS Director
- ------------------------------------------
Bobby S. Shackouls
</TABLE>
II-5
<PAGE> 26
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* /s/ JAMES D. WOODS Director
- ------------------------------------------
James D. Woods
*By /s/ BRUCE M. GACK
- ------------------------------------------
Bruce M. Gack
As Attorney-in-fact
August 20, 1999
</TABLE>
CO-REGISTRANT OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
All as of
August 20, 1999
<S> <C> <C>
Dillon Companies, Inc.
/s/ DAVID B. DILLON Director and Chairman of
- --------------------------------------------- the Board (Principal
David B. Dillon Executive Officer)
/s/ FRANK J. REMAR Director and Vice
- --------------------------------------------- President, Secretary and
Frank J. Remar Treasurer (Principal
Financial Officer)
/s/ SCOTT M. HENDERSON Vice President and
- --------------------------------------------- Controller (Principal
Scott M. Henderson Accounting Officer)
Director
- ---------------------------------------------
Warren F. Bryant
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Assistant Secretary
Paul W. Heldman
Director and Vice
- --------------------------------------------- President
W. Rodney McMullen
Drug Distributors, Inc.
/s/ J. ROBERT RICE Director and President
- --------------------------------------------- (Principal Executive
J. Robert Rice Officer)
</TABLE>
II-6
<PAGE> 27
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ LAWRENCE M. TURNER Treasurer (Principal
- --------------------------------------------- Financial and Accounting
Lawrence M. Turner Officer)
/s/ PAUL W. HELDMAN Director and Secretary
- ---------------------------------------------
Paul W. Heldman
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
Henpil, Inc.
/s/ LEE BREWER President and Director
- --------------------------------------------- (Principal Executive
Lee Brewer Officer)
/s/ STEVEN MCMILLAN Director, Treasurer, and
- --------------------------------------------- Secretary (Principal
Steven McMillan Financial and Accounting
Officer)
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
Inter-American Foods, Inc.
/s/ GEOFFREY J. COVERT President (Principal
- --------------------------------------------- Executive Officer)
Geoffrey J. Covert
/s/ W. RODNEY MCMULLEN Vice President and Chief
- --------------------------------------------- Financial Officer
W. Rodney McMullen (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Treasurer (Principal
- --------------------------------------------- Accounting Officer)
Lawrence M. Turner
/s/ PAUL W. HELDMAN Director and Vice
- --------------------------------------------- President
Paul W. Heldman
</TABLE>
II-7
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
/s/ BRUCE M. GACK Director
- ---------------------------------------------
Bruce M. Gack
J. V. Distributing, Inc.
/s/ W. RODNEY MCMULLEN President (Principal
- --------------------------------------------- Executive Officer)
W. Rodney McMullen
/s/ LAWRENCE M. TURNER Treasurer (Principal
- --------------------------------------------- Financial and Accounting
Lawrence M. Turner Officer)
/s/ PAUL W. HELDMAN Director and Vice
- --------------------------------------------- President
Paul W. Heldman
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
/s/ BRUCE M. GACK Director and Secretary
- ---------------------------------------------
Bruce M. Gack
KRGP Inc.
KRLP Inc.
Kroger Limited Partnership I
By KRGP, Inc., the General Partner
Kroger Limited Partnership II
By KRGP, Inc., the General Partner
/s/ JOSEPH A. PICHLER Director, Chairman of the
- --------------------------------------------- Board, and Chief Executive
Joseph A. Pichler Officer (Principal
Executive Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Financial and Accounting
Officer)
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
</TABLE>
II-8
<PAGE> 29
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
/s/ BRUCE M. GACK Director
- ---------------------------------------------
Bruce M. Gack
The Kroger Co. of Michigan
/s/ M. MARNETTE PERRY Director, Chairman of the
- --------------------------------------------- Board, and Chief Executive
M. Marnette Perry Officer (Principal
Executive Officer)
/s/ KENNETH CORNISH Treasurer and Secretary
- --------------------------------------------- (Principal Financial and
Kenneth Cornish Accounting Officer)
Director and Vice
- --------------------------------------------- President
Paul W. Heldman
/s/ JAMES PERUN Director and Vice
- --------------------------------------------- President-Operations
James Perun
Kroger Dedicated Logistics Co.
/s/ PAUL W. HELDMAN Director and President
- --------------------------------------------- (Principal Executive
Paul W. Heldman Officer)
/s/ LAWRENCE M. TURNER Director, Vice President,
- --------------------------------------------- and Treasurer (Principal
Lawrence M. Turner Financial and Accounting
Officer)
Director
- ---------------------------------------------
W. Rodney McMullen
Peyton's Southeastern, Inc.
/s/ J. ROBERT RICE Director and President
- --------------------------------------------- (Principal Executive
J. Robert Rice Officer)
</TABLE>
II-9
<PAGE> 30
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ ROBERT WELTY Treasurer and Secretary
- --------------------------------------------- (Principal Financial and
Robert Welty Accounting Officer)
Director
- ---------------------------------------------
Terry L. Cox
/s/ PAUL W. HELDMAN Director and Assistant
- --------------------------------------------- Secretary
Paul W. Heldman
Rocket Newco, Inc.
/s/ THOMAS P. O'BRIEN, JR. Director and President
- --------------------------------------------- (Principal Executive
Thomas P. O'Brien, Jr. Officer)
/s/ STEVEN MCMILLAN Vice President, Treasurer,
- --------------------------------------------- and Secretary (Principal
Steven McMillan Financial and Accounting
Officer)
Director and Vice
- --------------------------------------------- President
Lee Brewer
Topvalco, Inc.
/s/ JAMES E. HODGE President (Principal
- --------------------------------------------- Executive Officer)
James E. Hodge
/s/ LAWRENCE M. TURNER Director, Vice President,
- --------------------------------------------- Treasurer, and Assistant
Lawrence M. Turner Secretary (Principal
Financial and Accounting
Officer)
Director and Vice
- --------------------------------------------- President
Paul W. Heldman
/s/ THOMAS P. O'BRIEN, JR. Director and Assistant
- --------------------------------------------- Secretary
Thomas P. O'Brien, Jr.
</TABLE>
II-10
<PAGE> 31
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Vine Court Assurance Incorporated
/s/ J. MICHAEL SCHLOTMAN Director and President
- --------------------------------------------- (Principal Executive
J. Michael Schlotman Officer)
/s/ LAWRENCE M. TURNER Treasurer (Principal
- --------------------------------------------- Financial Officer)
Lawrence M. Turner
/s/ DAN L. MCDANIEL Director, Controller, and
- --------------------------------------------- Chief Accounting Officer
Dan L. McDaniel (Principal Accounting
Officer)
/s/ BRUCE M. GACK Director and Vice
- --------------------------------------------- President
Bruce M. Gack
Director and Vice
- --------------------------------------------- President
Robert Dinges
Director and Assistant
- --------------------------------------------- Secretary
Douglas C. Pierson
Wydiv, Inc.
/s/ JACK CANNON Director and President
- --------------------------------------------- (Principal Executive
Jack Cannon Officer)
/s/ STEVEN MCMILLAN Director, Vice President,
- --------------------------------------------- Treasurer and Secretary
Steven McMillan (Principal Financial and
Accounting Officer)
Director
- ---------------------------------------------
Thomas P. O'Brien, Jr.
</TABLE>
II-11
<PAGE> 32
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
City Market, Inc.
/s/ ANTHONY PRINSTER President (Principal
- --------------------------------------------- Executive Officer)
Anthony Prinster
/s/ RONALD WARREN Vice President, Secretary,
- --------------------------------------------- and Treasurer (Principal
Ronald Warren Financial Officer)
/s/ STAN HOSMAN Controller (Principal
- --------------------------------------------- Accounting Officer)
Stan Hosman
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
/s/ FRANK J. REMAR Director
- ---------------------------------------------
Frank J. Remar
Director
- ---------------------------------------------
Warren F. Bryant
Dillon Real Estate Co., Inc.
/s/ FRANK J. REMAR Director and President
- --------------------------------------------- (Principal Executive
Frank J. Remar Officer)
/s/ SCOTT M. HENDERSON Secretary and Treasurer
- --------------------------------------------- (Principal Financial and
Scott M. Henderson Accounting Officer)
/s/ DAVID B. DILLON Director and Vice
- --------------------------------------------- President
David B. Dillon
Director and Vice
- --------------------------------------------- President
Warren F. Bryant
Jackson Ice Cream Co., Inc.
/s/ JOHN D. COX President (Principal
- --------------------------------------------- Executive Officer)
John D. Cox
</TABLE>
II-12
<PAGE> 33
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ FRANK J. REMAR Director, Vice President,
- --------------------------------------------- Secretary, and Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
Junior Food Stores of West Florida, Inc.
/s/ MARK SALISBURY President (Principal
- --------------------------------------------- Executive Officer)
Mark Salisbury
/s/ FRANK J. REMAR Director, Vice President,
- --------------------------------------------- Secretary, and Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
Kwik Shop, Inc.
/s/ HENRY R. WAGUESPACK President (Principal
- --------------------------------------------- Executive Officer)
Henry R. Waguespack
/s/ FRANK J. REMAR Director, Vice President,
- --------------------------------------------- Secretary, and Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
</TABLE>
II-13
<PAGE> 34
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Mini Mart, Inc.
/s/ SAMUEL L. SHARP President (Principal
- --------------------------------------------- Executive Officer)
Samuel L. Sharp
/s/ FRANK J. REMAR Director, Secretary, and
- --------------------------------------------- Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
Quik Stop Markets, Inc.
/s/ VAN S. TARVER President (Principal
- --------------------------------------------- Executive Officer)
Van S. Tarver
/s/ FRANK J. REMAR Director, Vice President,
- --------------------------------------------- Secretary, and Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
</TABLE>
II-14
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
THGP Co., Inc.
THLP Co., Inc.
Turkey Hill, L.P.
By THGP Co., Inc.,
its General Partner
/s/ WARREN F. BRYANT Director and President
- --------------------------------------------- (Principal Executive
Warren F. Bryant Officer)
/s/ FRANK J. REMAR Director, President, Chief
- --------------------------------------------- Financial Officer, and
Frank J. Remar Treasurer (Principal
Financial and Accounting
Officer)
Director, Vice President,
- --------------------------------------------- and Assistant Secretary
Robert Moeder
Wells Aircraft, Inc.
/s/ GARY W. CROW President (Principal
- --------------------------------------------- Executive Officer)
Gary W. Crow
/s/ FRANK J. REMAR Director, Vice President,
- --------------------------------------------- Secretary, and Treasurer
Frank J. Remar (Principal Financial and
Accounting Officer)
/s/ DAVID B. DILLON Director
- ---------------------------------------------
David B. Dillon
Director
- ---------------------------------------------
Warren F. Bryant
Fred Meyer Stores, Inc.
/s/ MARY F. SAMMONS President and Chief
- --------------------------------------------- Executive Officer
Mary F. Sammons (Principal Executive
Officer)
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
</TABLE>
II-15
<PAGE> 36
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director
- ---------------------------------------------
Paul W. Heldman
Fred Meyer, Inc.
CB&S Advertising Agency, Inc.
Distribution Trucking Company
FM, Inc.
FM Holding Corporation
Grand Central, Inc.
FM Retail Services, Inc.
Fred Meyer of Alaska, Inc.
Fred Meyer of California, Inc.
Roundup Co.
JH Properties, Inc.
Smith's Beverage of Wyoming, Inc.
Smitty's Supermarkets, Inc.
Smitty's Super Valu, Inc.
Compare, Inc.
Saint Lawrence Holding Company
Smitty's Equipment Leasing, Inc.
Treasure Valley Land Company, L.C.
Western Property Investment Group, Inc.
Hughes Markets, Inc.
Hughes Realty, Inc.
KU Acquisition Corporation
/s/ WARREN F. BRYANT President and Chief
- --------------------------------------------- Executive Officer
Warren F. Bryant (Principal Executive
Officer)
</TABLE>
II-16
<PAGE> 37
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
Fred Meyer Jewelers, Inc.
Merksamer Jewelers, Inc.
/s/ MICHAEL H. DON Chief Executive Officer
- --------------------------------------------- (Principal Executive
Michael H. Don Officer)
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
</TABLE>
II-17
<PAGE> 38
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Smith's Food & Drug Centers, Inc.
/s/ WARREN F. BRYANT Chief Executive Officer
- --------------------------------------------- (Principal Executive
Warren F. Bryant Officer)
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
Richie's, Inc.
/s/ ARTURO YE Director and President
- --------------------------------------------- (Principal Executive
Arturo Ye Officer)
/s/ KEITH C. LARSON Director, Vice President,
- --------------------------------------------- and Secretary (Principal
Keith C. Larson Financial and Accounting
Officer)
Director
- ---------------------------------------------
Paul W. Heldman
</TABLE>
II-18
<PAGE> 39
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Quality Food Centers, Inc.
Quality Food, Inc.
Quality Food Holdings, Inc.
QFC Sub, Inc.
Second Story, Inc.
/s/ MICHAEL HUSE President and Chief
- --------------------------------------------- Executive Officer
Michael Huse (Principal Executive
Officer)
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
</TABLE>
II-19
<PAGE> 40
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
Food 4 Less Holdings, Inc.
Ralphs Grocery Company
Cala Co.
Bay Area Warehouse Stores, Inc.
Bell Markets, Inc.
Cala Foods, Inc.
Crawford Stores, Inc.
Food 4 Less of Southern California, Inc.
Alpha Beta Company
Food 4 Less GM, Inc.
Food 4 Less of California, Inc.
Food 4 Less Merchandising, Inc.
/s/ SAMMY K. DUNCAN President (Principal
- --------------------------------------------- Executive Officer)
Sammy K. Duncan
/s/ ROBERT B. DIMOND Vice President and Chief
- --------------------------------------------- Financial Officer
Robert B. Dimond (Principal Financial
Officer)
/s/ LAWRENCE M. TURNER Vice President and
- --------------------------------------------- Treasurer (Principal
Lawrence M. Turner Accounting Officer)
Director
- ---------------------------------------------
Joseph A. Pichler
/s/ ROBERT G. MILLER Director
- ---------------------------------------------
Robert G. Miller
/s/ PAUL W. HELDMAN Director, Vice President,
- --------------------------------------------- and Secretary
Paul W. Heldman
</TABLE>
II-20
<PAGE> 41
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
- ------- --------------------
<S> <C> <C> <C>
1.1 -- Form of Underwriting Agreement. .........................
4.1 -- Amended Articles of Incorporation of The Kroger Co. are
incorporated by reference to Exhibit 3.1 of The Kroger
Co.'s Quarterly Report on Form 10-Q for the quarter ended
October 3, 1998. The Kroger Co.'s Regulations are
incorporated by reference to Exhibit 4.2 of The Kroger
Co.'s Registration Statement on Form S-3 (Registration
No. 33-57552) filed with the SEC on January 28, 1993. ...
4.2 -- Rights Agreement, including form of Rights Certificate,
incorporated by reference to The Kroger Co.'s
Registration Statements on Form 8-A/A dated April 4, 1997
and October 18, 1998.....................................
4.3 -- Form of Senior Indenture (including form of securities).
Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-3
(Registration No. 333-74389). ...........................
*4.4 -- Certificate of Designation of series of preferred
shares. .................................................
*4.5 -- Form of Deposit Agreement for depositary shares. ........
*4.6 -- Form of Warrant Agreement, including form of warrant
certificate. ............................................
5.1 -- Opinion of Paul Heldman, Esq., including his consent. ...
12.1 -- Computation of Ratio of Earnings to Fixed Charges. ......
23.1 -- Consent of PricewaterhouseCoopers LLP. ..................
23.2 -- Consent of Deloitte & Touche LLP. .......................
23.3 -- Consent of Paul Heldman, Esq., included in Exhibit
5.1. ....................................................
24.1 -- Powers of Attorney. .....................................
25.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939. Incorporated by
reference to Exhibit 25.1 to the Registrant's Current
Report on Form 8-K dated April 30, 1999. ................
</TABLE>
- -------------------------
* To be filed as an Exhibit to a document to be incorporated by reference for
the specific offering of securities, if any, to which it relates.
<PAGE> 1
Exhibit 1.1
The Kroger Co.
Debt Securities
---------------
Underwriting Agreement
To the Representatives of the _______________
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Dear Sirs:
From time to time The Kroger Co., an Ohio corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain of its debt securities (the "Securities") specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery to such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts),
<PAGE> 2
and may be evidenced by an exchange of telegraphic communications or any other
rapid transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus contained therein,
to the Representatives for each of the other Underwriters, have been
declared effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"), being
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such part of
the registration statement became effective, being hereinafter called the
"Registration Statement"; the prospectus relating to the Securities, in
the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule
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<PAGE> 3
424(b) under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) The Company and its subsidiaries have not sustained since the
date of the latest audited financial statements included or incorporated
by reference in the Prospectus any material loss or interference with
their businesses, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital stock or
long-term debt of the Company and its subsidiaries on a consolidated basis
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position,
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<PAGE> 4
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be qualified in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(h) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities against
payment of the consideration specified in the Pricing Agreement, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles and will be entitled to the benefits provided by
the Indenture under which they are to be issued which will be
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will constitute
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform, in all
material
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<PAGE> 5
respects, to the descriptions thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Securities;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation, as amended,
or the Regulations of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by this Agreement or
any Pricing Agreement or the Indenture, except such as have been, or will
have been prior to the Time of Delivery, obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(j) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject with respect to which there is a
reasonable likelihood of a determination which would individually or in
the aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(k) None of the transactions contemplated by this Agreement, any
Pricing Agreement or the Indenture (including, without limitation, the use
of the proceeds from the sale of the Securities) will violate or result in
a violation of Section 7 of the Exchange Act, or any regulation
promulgated thereunder, including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System;
(l) The Company is not subject to regulation under the Investment
Company Act of 1940, as amended;
(m) The Company will apply the net proceeds from the sale of
Securities for the purpose set forth in the Prospectus under the caption
"Use of Proceeds"; and
(n) PricewaterhouseCoopers L.L.P. and Deloitte & Touche LLP,
respectively, who have audited certain financial statements of the Company
and its subsidiaries
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<PAGE> 6
and Fred Meyer, Inc. and its subsidiaries (collectively, the "Companies"),
respectively, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives and the Company may agree upon in writing, such time and
date being herein called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating
to such Securities and prior to the Time of Delivery for such Securities
which shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after such Time of Delivery
and furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Securities, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to
the Securities, of the suspension of the qualification of such Securities
for offering or sale in any jurisdiction, of the initiation of or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
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<PAGE> 7
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions in the
United States as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Securities, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of any
Designated Securities and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify the Representatives and upon their request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales
of any Designated Securities at any time nine months or more after the
time of issue of the Prospectus as amended or supplemented with respect to
such Designated Securities, upon the request of the Representatives but at
the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as it may request of a further amended or
supplemented Prospectus for such Designated Securities complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) ),
an earning statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11 (a) of the Act and the rules and
regulations of the Commission thereunder (including at the option of the
Company Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Company by the Representatives,
and (ii) the Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of any debt
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<PAGE> 8
securities of the Company which mature more than one year after such Time
of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the Securities; (iii) all
expenses in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) any filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the
fees and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; (viii) the fees and disbursements of counsel for the
Underwriters to the extent they exceed such amount as may be specified in the
Pricing Agreements; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters will
pay all of their own costs and expenses, including, but not limited to, the fees
and disbursements of their counsel up to such amount as may be specified in the
Pricing Agreements, transfer taxes on resale of any of the Securities by them,
and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5 (a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional
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<PAGE> 9
information on the part of the Commission shall have been complied with to
the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the Time of Delivery for
such Designated Securities, with respect to the incorporation of the
Company, the validity of the Indenture, the Designated Securities, the
Registration Statement, the Prospectus as amended or supplemented and
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Paul Heldman, Senior Vice President, Secretary and General
Counsel of the Company, shall have furnished to the Representatives his
written opinion, dated the Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Ohio,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that he believes that both the Underwriters
and he are justified in relying upon such opinions and certificates);
(iv) Each subsidiary of the Company, with respect to which
the Company owns, directly or indirectly, an equity interest of more
than 50% (each a "subsidiary"), has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; and all of the issued shares of
capital stock of each such subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except
for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims, other than as described in the Prospectus (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided
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<PAGE> 10
that such counsel shall state that he believes that both the
Underwriters and he are justified in relying upon such opinions and
certificates);
(v) The Company and its subsidiaries have good and
marketable title in fee simple to all real property owned by them, in
each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and
its subsidiaries (in giving the opinion in this clause, such counsel
may state that no examination of record titles for the purpose of
such opinion has been made, and that he is relying upon a general
review of the titles of the Company and its subsidiaries, upon
opinions of local counsel and abstracts, reports and policies of
title companies rendered or issued at or subsequent to the time of
acquisition of such property by the Company or its subsidiaries, upon
opinions of counsel to the lessors of such property and, in respect
of matters of fact, upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that he
believes that both the Underwriters and he are justified in relying
upon such opinions, abstracts, reports, policies and certificates);
(vi) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject with respect to which there is
a reasonable likelihood of determinations which would individually or
in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly authorized,
executed and delivered by the Company;
(viii) The Designated Securities have been duly
authorized, executed, authenticated, issued and delivered, and the
Designated Securities (assuming that (i) the Trustee has all
requisite power and authority to perform its obligations under the
Indenture and has made all necessary filings and received all
necessary consents, (ii) the Indenture has been duly authorized,
executed and delivered by the Trustee and (iii) the Trustee's
certificates of authentication have been manually executed by an
authorized officer of the Trustee) constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and are entitled to the benefits of the
Indenture, except that (a) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, or other laws now
or hereafter in effect affecting creditors' rights generally, and (b)
the enforceability
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<PAGE> 11
thereof is subject to the general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law);
provided, however, that such counsel need express no opinion as to
the application or effect of any applicable fraudulent conveyance,
fraudulent transfer, fraudulent obligation or preferential transfer
laws or any laws governing the distribution of assets of the Company
to its stockholders; and the terms of the Designated Securities and
the Indenture conform in all material respects to the descriptions
thereof in the Prospectus as amended or supplemented;
(ix) The Indenture (i) has been duly authorized, executed
and delivered by the Company and (ii) (assuming that (a) the Trustee
has all requisite power and authority to perform its obligations
under the Indenture and has made all necessary filings and received
all necessary consents, and (b) the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a
valid and binding instrument of the Company, enforceable in
accordance with its terms, except (a) that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium, or
other laws now or hereafter in effect affecting creditors' rights
generally, and (b) that the enforceability thereof is subject to
general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law); provided, however,
that such counsel need express no opinion as to the application or
effect of any applicable fraudulent conveyance, fraudulent transfer,
fraudulent obligation or preferential transfer laws or any laws
governing the distribution of assets of the Company to its
stockholders; and the Indenture has been duly qualified under the
Trust Indenture Act;
(x) The issuance and sale of the Designated Securities and
the compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, this Agreement and the Pricing
Agreement with respect to the Designated Securities and the
consummation of the transactions herein and therein contemplated, to
the best of such counsel's knowledge, will not conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of the
Articles of Incorporation, as amended, or the Regulations of the
Company or any statute of the United States of America or of Ohio or
any other statute known to such counsel or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; provided, however, that such counsel need express
no opinion as to the application or effect of any applicable
fraudulent conveyance, fraudulent transfer, fraudulent obligation or
preferential transfer laws or any laws governing the distribution of
assets of the Company to its stockholders;
(xi) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for
the issuance and sale of the Designated Securities or the
consummation of the other transactions
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<PAGE> 12
contemplated by this Agreement or such Pricing Agreement or the
Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters and as
may be required due to the Underwriters' or the Trustees' legal or
regulatory status;
(xii) The Company is not subject to regulation under the
Investment Company Act of 1940, as amended;
(xiii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than (a) the financial
statements, notes and schedules thereto included or incorporated by
reference therein and (b) other financial and statistical information
included or incorporated by reference therein, as to all of which
such counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that
any of such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(xiv) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than (a) the financial statements, notes
and schedules thereto included or incorporated by reference therein,
(b) other financial and statistical information included or
incorporated by reference therein or (c) the Forms T-1 filed as
exhibits to the Registration Statement, as to all of which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; such counsel has no reason
to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to the
Time of Delivery (other than (a) the financial statements, notes and
schedules thereto included or incorporated by reference therein, (b)
other financial and statistical information included or incorporated
by reference therein or (c) the Forms T-1 filed as exhibits to the
Registration Statement, as to all of which such counsel need express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than (a) the financial statements, notes
and
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<PAGE> 13
schedules thereto included or incorporated by reference therein, (b)
other financial and statistical information included or incorporated
by reference therein or (c) the Forms T-1 filed as exhibits to the
Registration Statement, as to all of which such counsel need express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than (a) the financial
statements, notes and schedules thereto included or incorporated by
reference therein, (b) other financial and statistical information
included or incorporated by reference therein or (c) the Forms T-1
filed as exhibits to the Registration Statement, as to all of which
such counsel need express no opinion) contains an untrue statement
of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading; and such counsel does not know of
any amendment to the Registration Statement required to be filed or
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which are not
filed or incorporated by reference or described as required;
(d) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives letters, dated the respective dates of delivery of such
letters, to the effect set forth in Annex II hereto, in form and substance
satisfactory to the Representatives;
(e) [Intentionally Omitted]
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented there
shall not have been any change in the capital stock or long-term debt of
the Companies or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Companies,
otherwise than as set forth or contemplated in the Prospectus as amended
or supplemented, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public
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<PAGE> 14
offering or the delivery of the Designated Securities on the terms and in
the manner contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Companies' debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g) (2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Companies' debt securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York
State authorities; or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in
this Clause (iii) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated by the Prospectus as amended and supplemented;
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties
of the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (f) of this Section and as to such other
matters as the Representatives may reasonably request; and
(j) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities, the
independent accountants of Fred Meyer, Inc. who have certified the
financial statements of Fred Meyer, Inc. and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives letters, dated the respective dates of
delivery of such letters, to the effect set forth in Annex III hereto, in
form and substance satisfactory to the Representatives.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
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<PAGE> 15
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
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<PAGE> 16
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters,
in each case as set forth in the table on the cover page of the Prospectus as
amended or supplemented to relate to a particular offering of Designated
Securities. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Underwriters
of Designated Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in
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<PAGE> 17
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any
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<PAGE> 18
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement.
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<PAGE> 19
No purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
The Kroger Co.
By:......................
Name:
Title:
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<PAGE> 20
ANNEX I
Pricing Agreement
-----------------
[NAMES OF CO-REPRESENTATIVE(S),]
As Representatives of the several
Underwriters named in Schedule I hereto,
...................., 19..
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
.................... (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of each of the Underwriters of the Designated Securities pursuant
to Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us __ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall
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<PAGE> 21
be submitted to the Company for examination upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
The Kroger Co.
By:..........................
Name:
Title:
Accepted as of the date hereof:
[NAME(S) OF CO-REPRESENTATIVE(S)]
On behalf of each of the Underwriters
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<PAGE> 22
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
- ----------------------------------------------------------------
[Name(s) of Co-Representative(s) . . . . . . . . . $
[Names of other Underwriters] . . . . . . . . . .
-------
Total . . . . . . . . . . . . . . .$
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<PAGE> 23
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest from to
[and accrued amortization, if any, from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to
[and accrued amortization, if any, from to ]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[New York] Clearing House funds
INDENTURE:
Indenture dated , 19 , between the Company and , as Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$] or an integral multiple thereof, [on or after ,
at the following redemption prices (expressed in percentages of principal
amount). If [redeemed on or before , %, and if] redeemed during the
12-month period beginning ,
REDEMPTION
YEAR PRICE
- --------------------------------------------------------------------------------
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.] [on any interest payment
date falling in or after , at the election of the Company, at a redemption
price equal to the principal amount thereof, plus accrued interest to the
date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$] principal amount of Designated Securities on in each of
the years through at 100% of their principal amount plus accrued
interest][,together with [cumulative] [noncumulative]
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<PAGE> 24
redemptions at the option of the Company to retire an additional [$]
principal amount of Designated Securities in the years through at
100% of their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert --
EXTENDABLE PROVISIONS:
Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be %, and thereafter annual interest
rate will be adjusted on , and to a rate not less than % of the
effective annual interest rate on U.S. Treasury obligations with -year
maturities as of the [insert date 15 days prior to maturity date] prior to
such [insert maturity date].]
[If Securities are Floating Rate debt Securities, insert --
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ] [to an annual rate of
% above the average rate for -year [month] [securities] [certificates
of deposit] issued by and [insert names of banks].] [and the annual
interest rate [thereafter] [from through ] will be the interest yield
equivalent of the weekly average per annum market discount rate for -month
Treasury bills plus % of Interest Differential (the excess, if any, of
(i) then current weekly average per annum secondary market yield for
-month certificates of deposit over (ii) then current interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills); [from and thereafter the rate will be the then
current interest yield equivalent plus % of Interest Differential].]
DEFEASANCE PROVISIONS:
TIME OF DELIVERY:
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
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<PAGE> 25
ANNEX II
Pursuant to Section 7 (d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by reference in
the Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis for the
audited consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included or
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial
-25-
<PAGE> 26
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus, and sales of capital stock to employee benefit plans of
the Company) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or net assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(v) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above, they have
carried out certain specified procedures, not constituting an audit
in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference),
or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
-26-
<PAGE> 27
ANNEX III
Pursuant to Section 7 (k) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to Fred Meyer, Inc. and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by reference in
the Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of Fred Meyer, Inc. for the
periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of Fred Meyer, Inc. and its subsidiaries, inspection of the
minute books of Fred Meyer, Inc. and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of Fred Meyer, Inc.
and its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in Fred Meyer, Inc. 's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies
to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with the basis for the audited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in Fred Meyer, Inc. 's Annual
Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in Fred
Meyer, Inc. 's Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent
-27-
<PAGE> 28
with the basis for the audited financial statements included or
incorporated by reference in Fred Meyer, Inc. 's Annual Report on Form
10-K for the most recent fiscal year; and
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of Fred Meyer, Inc. and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference),
or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of Fred Meyer, Inc. and its subsidiaries and
have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
<PAGE> 1
Exhibit 5.1
The Kroger Co.
1014 Vine Street
Cincinnati, OH 45202-1100
August 20, 1999
Board of Directors
The Kroger Co.
1014 Vine Street
Cincinnati, OH 45202
Ladies and Gentlemen:
I am familiar with the proceedings taken and proposed to be taken by The Kroger
Co., an Ohio corporation (the "Company"), in connection with the issuance of up
to $2,000,000,000 aggregate principal amount of debt securities, preferred
stock, depositary shares, common stock, and warrants (collectively, the
"Securities"). I have acted as counsel to the Company and the co-registrant
guarantors ("Co-Registrants") in connection with its preparation of a
Registration Statement relating to such issuance of the Securities and the
public sale thereof on Form S-3 filed by the Company and the Co-Registrants with
the Securities and Exchange Commission (the "Registration Statement") for the
registration of the Securities under the Securities Act of 1933, as amended (the
"Act"). I have examined the Registration Statement and the exhibits thereto; the
Amended Articles of Incorporation and Regulations of the Company and the
Co-Registrants; the corporate minutes of the proceedings of the directors and
shareholders of the Company and the Co-Registrants; and such other records and
documents as I have deemed necessary in order to express the opinions
hereinafter set forth.
Based upon the foregoing, I am of the opinion that, when the indenture (in the
case of debt securities) and the warrant agreement (in the case of warrants) has
been duly executed and delivered, and the Securities have been duly executed and
authenticated in accordance with the terms of the instruments under which they
are being issued, and issued and sold in accordance with the underwriting
agreement related thereto, the Securities will constitute the valid and binding
obligations of the Company.
The foregoing opinion is subject to applicable bankruptcy, insolvency, or other
laws affecting creditors' rights generally, as from time to time in effect, and
to general equity principles.
<PAGE> 2
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me in the Registration Statement under the
caption "Legal Opinions" therein. In giving such consent, I do not admit that
I am in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
(Paul W. Heldman)
Paul W. Heldman
Senior Vice President, Secretary
and General Counsel
<PAGE> 1
EXHIBIT 12.1
Schedule of computation of ratio of earnings to fixed charges of The Kroger Co.
and consolidated subsidiary companies and unconsolidated companies as if
consolidated for the periods shown:
<TABLE>
<CAPTION>
Quarter Ended Fiscal Year Ended
------------------------ -----------------------------------------------------------------------
May 22, March 21, January 2, December 27, December 28, December 30, December 31,
1999 1998 1999 1997 1996 1995 1994
(16 weeks) (12 weeks) (53 weeks) (52 weeks) (52 weeks) (52 weeks) (52 weeks)
---------- ---------- ---------- ------------ ------------ ------------ ------------
(In millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings before
tax expense, and
extraordinary loss..... $ 280 $ 83 $ 713 $ 713 $ 567 $ 510 $ 421
Fixed charges ............. 139 113 479 482 483 490 501
Capitalized interest ...... (2) (2) (8) (9) (11) (7) (3)
------- ------- ------- ------- ------- ------- -------
$ 417 $ 194 $ 1,184 $ 1,186 $ 1,039 $ 993 $ 919
======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest .................. $ 79 $ 66 $ 276 $ 295 $ 312 $ 320 $ 331
Portion of rental
payments deemed
to be interest ........ 60 47 203 187 171 170 170
------- ------- ------- ------- ------- ------- -------
$ 139 $ 113 $ 479 $ 482 $ 483 $ 490 $ 501
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to
fixed charges ............. 3.0 1.7 2.5 2.5 2.2 2.0 1.8
Dollar deficiency of
coverage .................. N/A N/A N/A N/A N/A N/A N/A
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement of The Kroger Co. on Form S-3 of our report (which contains an
explanatory paragraph relating to the Company's change in its application of the
LIFO method of accounting for store inventories) dated January 28, 1999, on our
audits of the consolidated financial statements of The Kroger Co. as of January
2, 1999 and December 27, 1997, and for the years ended January 2, 1999, December
27, 1997, and December 28, 1996, which report is included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 2, 1999, our report
dated April 30, 1999, on our audit of the financial statements of The Kroger Co.
as of and for the twenty-eight days ended January 30, 1999, which report is
included in the Company's Current Report on Form 8-K dated May 10, 1999, our
report (which contains an explanatory paragraph that describes a change in the
Company's application of the LIFO method of accounting for store inventories and
an explanatory paragraph that discloses that the supplemental financial
statements give retroactive effect to the merger of The Kroger Co. and Fred
Meyer, Inc. on May 27, 1999, which has been accounted for as a pooling of
interests), dated May 28, 1999 on our audit of the supplemental consolidated
financial statements of The Kroger Co. as of January 2, 1999 and December 27,
1997, and for the years ended January 2, 1999, December 27, 1997, and December
28, 1996, which report is included in the Company's Current Report on Form 8-K
dated May 28, 1999, and our report (which contains an explanatory paragraph
relating to the Company's change in its application of the LIFO method of
accounting for store inventories) dated January 28, 1999, except for the
Guarantor Subsidiaries note, as to which the date is August 13, 1999, on our
audits of the consolidated financial statements of The Kroger Co. as of January
2, 1999 and December 27, 1997, and for the years ended January 2, 1999, December
27, 1997, and December 28, 1996, which report is included in the Company's
Current Report on Form 8-K dated August 20, 1999. We also consent to the
references to our firm under the caption "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Cincinnati, Ohio
August 20, 1999
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Kroger Co. on Form S-3 of our report dated March 10, 1999 on the
consolidated financial statements of Fred Meyer, Inc., appearing in the Annual
Report on Form 10-K of Fred Meyer, Inc. for the year ended January 30, 1999, and
to the use of our report dated March 10, 1999, appearing in the Current Report
on Form 8-K dated May 28, 1999 of The Kroger Co., and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Portland, Oregon
August 20, 1999
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned directors of THE KROGER
CO. (the "Company") hereby make, constitute and appoint Paul W. Heldman and
Bruce M. Gack, or either one of them, his or her true and lawful
attorneys-in-fact to sign and execute for and on his or her behalf, a
registration statement and any and all amendments thereto with respect to the
issuance and sale by the Company of up to $2,500,000,000 of Securities to be
filed with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended, in such form as they, or either of them, may approve and to
do any and all other acts which said attorneys-in-fact, or either one of them,
may deem necessary or desirable to enable The Kroger Co. to comply with said Act
and the rules and regulations thereunder in connection with such sale.
IN WITNESS WHEREOF, the undersigned directors have hereunto set their hands and
seal, as of the 22nd day of April, 1999.
<TABLE>
<CAPTION>
<S> <C>
(John L. Clendenin) (James D. Woods)
- ------------------------ -----------------------
John L. Clendenin James D. Woods
(Katherine D. Ortega) (Reuben V. Anderson)
- ------------------------ -----------------------
Katherine D. Ortega Reuben V. Anderson
(T. Ballard Morton, Jr.) (Clyde R. Moore)
- ------------------------ -----------------------
T. Ballard Morton, Jr. Clyde R. Moore
(Thomas H. O'Leary) (Martha R. Seger)
- ------------------------ -----------------------
Thomas H. O'Leary Martha R. Seger
(John T. LaMacchia) (Bobby S. Shackouls)
- ------------------------ -----------------------
John T. LaMacchia Bobby S. Shackouls
(Edward M. Liddy) (Joseph A. Pichler)
- ------------------------ -----------------------
Edward M. Liddy Joseph A. Pichler
(David B. Dillon)
-----------------------
David B. Dillon
</TABLE>
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE KROGER
CO. (the "Company") hereby makes, constitutes and appoints Paul W. Heldman and
Bruce M. Gack, or either one of them, his true and lawful attorneys-in-fact to
sign and execute for and on his behalf, a registration statement and any and all
amendments thereto with respect to the issuance and sale by the Company of up to
$2,500,000,000 of Securities to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, in such form as
they, or either of them, may approve and to do any and all other acts which said
attorneys-in-fact, or either one of them, may deem necessary or desirable to
enable The Kroger Co. to comply with said Act and the rules and regulations
thereunder in connection with such sale.
IN WITNESS WHEREOF, I have hereunto set my hand.
(W. Rodney McMullen) April 26, 1999
- --------------------
W. Rodney McMullen
Executive Vice President and
Chief Financial Officer
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer and director of
THE KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W.
Heldman and Bruce M. Gack, or either one of them, his true and lawful
attorneys-in-fact to sign and execute for and on his behalf, a registration
statement and any and all amendments thereto with respect to the issuance and
sale by the Company of up to $2,500,000,000 of Securities to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, in such form as they, or either of them, may approve and to do any and
all other acts which said attorneys-in-fact, or either one of them, may deem
necessary or desirable to enable The Kroger Co. to comply with said Act and the
rules and regulations thereunder in connection with such sale.
IN WITNESS WHEREOF, I have hereunto set my hand.
(Joseph A. Pichler) April 26, 1999
- -------------------
Joseph A. Pichler
Chairman of the Board,
Chief Executive Officer and
Director
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE KROGER
CO. (the "Company") hereby makes, constitutes and appoints Paul W. Heldman and
Bruce M. Gack, or either one of them, his true and lawful attorneys-in-fact to
sign and execute for and on his behalf, a registration statement and any and all
amendments thereto with respect to the issuance and sale by the Company of up to
$2,500,000,000 of Securities to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, in such form as
they, or either of them, may approve and to do any and all other acts which said
attorneys-in-fact, or either one of them, may deem necessary or desirable to
enable The Kroger Co. to comply with said Act and the rules and regulations
thereunder in connection with such sale.
IN WITNESS WHEREOF, I have hereunto set my hand.
(J. Michael Schlotman) April 26, 1999
- ------------------------
J. Michael Schlotman
Vice President and Corporate Controller
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer and director of
THE KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W.
Heldman and Bruce M. Gack, or either one of them, his true and lawful
attorneys-in-fact to sign and execute for and on his behalf, a registration
statement and any and all amendments thereto with respect to the issuance and
sale by the Company of up to $2,500,000,000 of Securities to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, in such form as they, or either of them, may approve and to do any and
all other acts which said attorneys-in-fact, or either one of them, may deem
necessary or desirable to enable The Kroger Co. to comply with said Act and the
rules and regulations thereunder in connection with such sale.
IN WITNESS WHEREOF, I have hereunto set my hand.
(David B. Dillon) April 26, 1999
- ------------------------
David B. Dillon
President, Chief Operating Officer, and
Director
<PAGE> 6
RESOLUTION
WHEREAS, The management of the Company has determined that it is advantageous to
the Company to purchase on the open market or to redeem or repay certain of its
outstanding indebtedness (the "Repurchased Debt");
WHEREAS, The amount of funds that can be expended for such Repurchased Debt is,
under certain circumstances, limited by the terms of the Indentures under its
publicly and privately issued debt (together the "Indentures"); and
WHEREAS, The Company is considering the issuance of debt, equity, and other
forms of securities (the "Securities") through private placement or through
public offering, and the use of the proceeds from the sale of the Securities to
purchase or redeem Repurchased Debt and for other general corporate purposes;
and
WHEREAS, At its regularly scheduled meeting held on December 3, 1998, this
Board authorized the issuance of up to $2,000,000,000 of Securities; and
WHEREAS, Management has determined that it may be in the best interests of the
Company to increase the amount of Securities that can be issued from
$2,000,000,000 to $2,500,000,000; now, therefore,
RESOLVED, That, subject to the limitations set forth in these resolutions and
the Indentures, the Company is authorized to issue, from time to time, up to
$2,500,000,000 of Securities to the public, or to one or more institutional
investors, to be used to repay or refinance existing debt of the Company; and
further
RESOLVED, That as long as the proposed merger with Fred Meyer has been
consummated, debt Securities bearing an interest rate of not more than 8 percent
per annum may be issued by the Company and the determination of all terms and
conditions of the debt Securities is delegated to a Management Committee made up
of Joseph A. Pichler, David B. Dillon, W. Rodney McMullen, and Lawrence M.
Turner, any three of whom can act for the Management Committee; and further
RESOLVED, That Securities not issued under the immediately preceding resolution
may be issued on terms and conditions as determined by a committee of this Board
of Directors (the "Securities Committee") appointed in the next following
resolution; and further
RESOLVED, That in connection with the proposed public offering or private
placement of the Securities or the proposed debt repurchase program, the members
of the Financial Policy Committee are hereby appointed as the Securities
Committee, and that any three of them, at least two of whom have not served as
employees of the Company or its subsidiaries, are empowered to act as and for
the Securities Committee; and that the Securities Committee has all the
authority to act as and for the Board of Directors in the determination of
whether to issue the Securities, and, if issued, whether to offer the Securities
through a public offering or through private transactions, and whether to
purchase the Repurchased Debt; and further
RESOLVED, That the Management Committee or the Securities Committee, as the case
may be, may designate one or more persons, who may or may not be a member of the
1
<PAGE> 7
Committee, to act as and for the Committee in any capacity as the Committee may
direct; and further
RESOLVED, That the Management Committee or the Securities Committee, as the case
may be, may, at any time prior to December 31, 2001, authorize one or more
issuances and sales of the Securities by the Company and authorize one or more
purchases of Repurchased Debt for so long as, or at such times as, economically
advantageous to the Company, and, in connection with any such authorization,
issue, determine, approve, or appoint, as the case may be:
(a) the type of Security or Securities and title or titles thereof;
(b) the aggregate principal amount, not to exceed $2,500,000,000, the
denominations, and terms, of the Securities;
(c) the price at which the Securities are to be sold (which may be issued at
an "original issue discount" within the meaning of the Internal Revenue
Code of 1986, as amended), and the interest rate or rates, if any, to be
established for the Securities, which rate or rates may vary from time to
time;
(d) the issuance of the Securities in any foreign currency or European
currency units and if European currency units are issued, the currency or
currencies in which interest is payable;
(e) the maturity or maturities; and, furthermore, the Securities Committee is
authorized to determine that any issue of Securities may be of varying
maturities and amounts;
(f) the sinking fund, if any, and related redemption prices of the
Securities;
(g) the optional redemption rights, if any, of the Company and of the holders
of the Securities, and related redemption prices and any limitations on
such redemption;
(h) the restrictive covenants, if any, to be imposed upon the Company
relating to any of the Securities;
(i) the form of Registration Statement on Form S-3, or such other form as the
Securities Committee determines (the "Registration Statement"), for the
purpose of registering the Securities, if so required, under the
Securities Act of 1933, as amended, and any amendments thereto;
(j) the amount of Repurchased Debt to be purchased or redeemed by the
Company;
2
<PAGE> 8
(k) the price at which any Repurchased Debt is to be purchased, if purchased;
(l) any underwriting, standby, or similar agreement between the Company and
an underwriter or underwriters;
(m) the use, form, execution, and delivery of the Securities, indentures,
note agreement, loan agreement, distribution agreement, reimbursement
agreement, warrant agreement, notes, or any other contracts or
agreements, including listing applications, as the Securities Committee
deems necessary or appropriate;
(n) any transfer, authenticating, placement, exchange, distribution, or
paying agent, or registrar, trustee or underwriter, or any other person
or entity to act in connection with the Securities or the Repurchased
Debt; including the selection of a financial institution or institutions,
whether foreign or domestic, to advise the Company;
(o) whether the issuance of the Securities or the purchase or redemption of
Repurchased Debt is permitted under the terms of the Indentures; and
(p) any other terms, conditions, and provisions as the Securities Committee
deems necessary or appropriate; and further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized, in the name and on behalf of the Company, to execute the
Registration Statement with such changes therein as the officer executing the
same may approve, such execution to be conclusive evidence of such approval, and
to execute any and all amendments thereto as deemed necessary or desirable; and
further
RESOLVED, That upon the execution of the Registration Statement or any
amendments thereto, including post-effective amendments, by directors and
officers of the Company, as required by law, either in person or by a duly
authorized attorney or attorneys, the elected officers of the Company be, and
each of them hereby is, authorized to cause the Registration Statement and any
amendments thereto to be filed with the Securities and Exchange Commission (the
"Commission") and to execute and file all such instruments, make all such
payments, and to do such other acts and things as, in their opinion or in the
opinion of any of them, may be necessary or desirable in order to effect such
filing, to cause the Registration Statement to become effective, and to maintain
the Registration Statement in effect for as long as they deem it to be in the
best interests of the Company; and further
RESOLVED, That Paul W. Heldman and Bruce M. Gack, or either one of them, be, and
each of them hereby is, made, constituted, and appointed the true and lawful
attorneys-in-fact, with authority to sign and execute on behalf of this Company,
and on behalf of the directors and officers thereof in their official
capacities, the Registration Statement and any and all amendments thereto, which
either of them, in their discretion, deem necessary or advisable to be filed
with the Commission; and further
3
<PAGE> 9
RESOLVED, That Paul W. Heldman, Senior Vice President, Secretary and General
Counsel of the Company, whose address is 1014 Vine Street, Cincinnati, Ohio, be,
and he hereby is, designated as the Agent for Service to be named in the
Registration Statement, with authority to receive notices and communications
with respect to such Registration Statement and with all powers consequent upon
such designation under the rules and regulations of the Commission; and further
RESOLVED, That, subject to the limitations set forth in these resolutions, the
Management Committee or the Securities Committee, as the case may be, may
approve the form of the Securities; that the elected officers of the Company be,
and each of them hereby is, authorized to execute, in the name and on behalf of
the Company, the Securities; that the signature of each of such officers on the
Securities may be manual or by facsimile; that Securities bearing the manual or
facsimile signatures of individuals who were at any time the elected officers of
the Company will bind the Company notwithstanding that such individuals or any
of them cease to hold such offices; that the elected officers of the Company be,
and each of them hereby is, authorized to deliver or cause to be delivered the
Securities for authentication and delivery in the principal amount thereof as
shall have been determined by the Board or a Committee; and further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized and directed, if such officer or officers deems it necessary in
connection with the offering of any of the Securities, to appoint a withholding
agent and attorney for the Company for the purpose of withholding any and all
taxes required to be withheld by the Company, under any Federal or other laws or
regulations from time to time in effect, from the interest paid from time to
time on the Securities, and to authorize and direct such agent to make any and
all payments and reports and to file any and all returns and accompanying
certificates with any governmental authority which such agent may be permitted
or required to make or file as such agent under such laws or regulations; and
further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized in the name and on behalf of this Company to take any and all
action which they deem necessary or advisable to effect the registration or
qualification (or exemptions therefrom) of the Securities for issue, offer,
sale, or trade under the Blue Sky or securities laws of any State of the United
States of America, any Province of Canada, or of any other country and in
connection therewith to sign, execute, acknowledge, verify, deliver, file, and
publish all such applications, issuer's covenants, consents to service of
process, resolutions, and other papers and documents as may be required under
such laws, and to take any and all further action which they deem necessary or
advisable in order to maintain such registration or qualification of the
Securities for as long as they may deem necessary or as required by law; and
further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized in the name and on behalf of this Company to execute and file an
application or applications for the listing of the Securities on the New York
Stock Exchange, to appear
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before officials of the New York Stock Exchange and to take any and all action,
and prepare, execute, and file any and all other applications and agreements,
including an indemnity agreement relating to the use of facsimile signatures in
the execution of the Securities, necessary, incidental, or convenient to
effectuate such listing; and further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized in the name and on behalf of this Company to execute and cause to
be filed with the Commission and the New York Stock Exchange an application on
Form 8-A, or such other form as may be required for the purpose of registering
the Securities on a national securities exchange, pursuant to the Securities
Exchange Act of 1934; and further
RESOLVED, That the elected officers of the Company be, and each of them hereby
is, authorized and directed to advise the Company's senior lenders and the
trustees under the Indentures of the issuance of Securities or the purchase or
redemption of Repurchased Debt, as any such officer deems necessary or
appropriate; and further
RESOLVED, That the Management Committee or the Securities Committee, as the case
may be, and each of the elected officers of the Company be, and each of them
hereby is, authorized and directed to do and perform, or cause to be done and
performed, all such acts, deeds, and things and to make, execute, and deliver,
or cause to be made, executed, and delivered, all such agreements, undertakings,
documents, instruments, or certificates, in the name and on behalf of the
Company or otherwise, including, without limitation, indentures, loan
agreements, underwriting, placement, exchange or agency agreements, and trust
agreements, all as the applicable Committee or any of the elected officers deem
necessary or appropriate to effect the purposes and intent of the foregoing
resolutions.
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