As Filed with the Securities and Exchange Commission on January __, 1995
Registration No. 33-
________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ROUNDY'S, INC.
(Exact name of Registrant as specified in its charter)
WISCONSIN 39-0854535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23000 Roundy Drive
Pewaukee, Wisconsin 53072
Telephone: (414) 547-7999
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Mr. Robert D. Ranus
Vice President and Chief Financial Officer
Roundy's, Inc.
23000 Roundy Drive
Pewaukee, WI 53072
(Name, address, including zip code and telephone number, including area
code, of agent for service)
With Copies to:
Andrew J. Guzikowski, Esq.
Whyte Hirschboeck Dudek S.C.
111 East Wisconsin Avenue, Suite 2100
Milwaukee, Wisconsin 53202
Telephone: (414) 273-2100
Approximate date of commencement of proposed sale to the public:
As promptly as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. X
--
If the registrant elects to deliver its latest annual report to
security holders or a complete and legible facsimile thereof, pursuant
to Item 11(a)(1) of this Form, check the following box. __
_____________________________________________________________________
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
<PAGE>
Securities Act of 1933, as amended or until the Registration
Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may
determine.
CALCULATION OF REGISTRATION FEE
Title of each Amount to be Proposed Proposed Amount of
class of registered maximum maximum registration
securities to offering price aggregate fee
be registered per unit price
- --------------- ------------- --------------- ----------- -------------
Class A 4,000 shares $78.90* $315,600 $108.83
(Voting)
Common Stock,
$1.25 par
value
- --------------- ------------- --------------- ----------- ------------
Class B (Non- 300,000 $78.90* $23,670,000 $8,162.12
voting) Common shares
Stock, $1.25
par value
- --------------- ------------- --------------- ------------- ------------
TOTAL 304,000 shares $78.90* $23,985,600 $8,270.95
- --------------- -------------- --------------- ------------- ------------
* All of the securities offered hereby will be offered at a price
per share equal to the book value per share of Roundy's
outstanding common stock as of the end of the fiscal year prior to
the year of purchase, adjusted for subsequent stock dividends and
stock splits. The book value per share of Roundy's common stock
at December 31, 1994 was $78.90.
<PAGE> CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
between
Prospectus and Items in Part I of Form S-2
Item Number and Caption Prospectus Caption
- ----------------------- ------------------
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus.................. (Cover Page)
2. Inside Front and Outside Back
Cover Pages of Prospectus................. Available
Information;
Incorporation of
Certain Documents
by Reference;
Table of Contents
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed Charges....... Prospectus
Summary;
Factors to be
Considered
4. Use of Proceeds.............................. Use of Proceeds
5. Determination of Offering
Price........................................ Terms of Offering
6. Dilution..................................... Not Applicable
7. Selling Security Holders..................... Not Applicable
8. Plan of Distribution......................... Plan of
Distribution
9. Description of Securities
to be Registered............................. Description of
Stock
10. Interests of Named Experts
and Counsel.................................. Voting Trust
<PAGE>
11. Information With Respect to
the Registrant............................... The Company;
Financial
Statements;
Selected Financial
Information;
Management's
Discussion and
Analysis of
Results of
Operations and
Financial
Condition;
Management
12. Incorporation of Certain
Information by Reference.................... Incorporation of
Certain Documents by
Reference
13. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities.................................. Indemnification
<PAGE>
PROSPECTUS
ROUNDY'S, INC.
23000 Roundy Drive
Pewaukee, Wisconsin 53072
4,000 Shares Class A (Voting) Common Stock
300,000 Shares Class B (Non-voting) Common Stock
Roundy's, Inc. ("Roundy's") hereby offers from time to time shares
of Class A Common Stock ("Class A Common") and Class B Common Stock
("Class B Common") (together "Roundy's Stock") at an offering price per
share equal to the Book Value per share of Roundy's outstanding stock at
the end of the fiscal year prior to the year of purchase, adjusted for
subsequent stock dividends and stock splits. This offer is being made
exclusively to certain persons purchasing for investment who are engaged
in the operation of retail food stores and who are customers of
Roundy's, and to the Directors and certain key employees of Roundy's.
Each share of Class A Common is entitled to one (1) vote on all matters
on which the stockholders of Roundy's have voting rights. The Class B
Common has no voting rights except as provided by law. See "DESCRIPTION
OF STOCK." Purchasers of Class A Common must purchase exactly 100 shares
for each retail food store operated by such purchaser. The number of
shares of Class B Common which may be purchased is limited pursuant to
certain policies adopted by Roundy's Board of Directors. See "TERMS OF
OFFERING" and Exhibit E attached hereto. This Prospectus also relates to
shares of Class B Common which may be issued to stockholder-customers of
Roundy's as part of a patronage dividend (see "THE COMPANY--Payment of
Patronage Dividends") and in exchange for shares of Class A Common held
by stockholder-customers of Roundy's who have ceased to do business with
Roundy's. See "EXCHANGE OF CLASS A COMMON FOR CLASS B COMMON."
This offering is not underwritten. There can be no assurance that
all or any part of the securities offered hereby will be sold. The
transfer of shares is restricted and there is and will be no market for
Roundy's Stock.
CERTAIN CONSIDERATIONS RELATED TO THE SECURITIES OFFERED HEREBY ARE
DISCUSSED UNDER "FACTORS TO BE CONSIDERED"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------
Underwriting Aggregate
Price to Discounts and Proceeds to
Public(1) Commissions Company
_________________________________________________________________________
Class A Common Book Value None $
_________________________________________________________________________
Class B Common Book Value None $
- -------------------------------------------------------------------------
<PAGE>
(1) The offering price per share is equal to the Book Value per share
of Roundy's outstanding stock at the end of the fiscal year prior
to the year of purchase, adjusted for subsequent stock dividends
and stock splits. The Book Value per share of Roundy's Stock at
December 31, 1994, was $__________.
The date of this Prospectus is March __, 1995.
<PAGE>
TABLE OF CONTENTS
Items Page
Available Information......................................... i
Incorporation of Certain Documents by Reference............... ii
Prospectus Summary............................................ 1
Factors to be Considered...................................... 4
Market for Roundy's Stock and Related Stockholder Matters..... 6
Plan of Distribution.......................................... 7
Terms of Offering............................................. 7
Use of Proceeds............................................... 10
Exchange of Class A Common for Class B Common................. 10
Repurchase of Shares.......................................... 10
Capitalization................................................ 13
Selected Financial Information................................ 14
Management's Discussion and Analysis of
Results of Operations and Financial Condition............... 15
Developments Since the End of the Fiscal Year Ended
January 1, 1994............................................. 18
The Company................................................... 21
Management.................................................... 31
Description of Stock.......................................... 33
Voting Trust.................................................. 35
Legal Matters................................................. 36
Experts....................................................... 36
Indemnification............................................... 36
Index to Financial Statements................................. F-1
Exhibit A - Subscription Agreement............................ A-1
Exhibit B - Buying Deposit Agreement.......................... A-2
Exhibit C - Article V of the By-Laws.......................... A-4
Exhibit D - Policy Relating to Redemption of Stock by
Inactive Customer Shareholders and Former
Employees ........................................ A-6
Exhibit E - Policy Regarding Issuance and Sales of Roundy's,
Inc. Stock ....................................... A-12
No person has been authorized to give any information or make any
representations other than as contained in this Prospectus in connection
with the offering described herein. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, to any person in
any state in which it is unlawful to make such offer or solicitation.
The delivery of this Prospectus at any time does not imply that there
has been no change in the affairs of the Company subsequent to its date
of issue.
AVAILABLE INFORMATION
Roundy's is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance
therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other
information can be inspected and copied at the public reference facili-
ties maintained by the Commission at 450 5th Street N.W., Judiciary
Plaza, Washington, D.C. 20549 and at the Commission's regional offices
at Room 1204, Everett McKinley Dirksen Building, 219 South Dearborn
Street, Chicago, Illinois 60604 and at Room 1102, Federal Building, 26
Federal Plaza, New York, New York 10007, and copies of such material can
be obtained from the Public Reference Section of the Commission at 450
<PAGE>
5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed
rates. The Company will furnish annual reports to its stockholders
within 120 days after the end of each fiscal year, which will include
financial statements examined and reported on by independent certified
public accountants.
i
Roundy's has filed a Registration Statement under the Securities
Act of 1933, as amended, with respect to the issuance of the shares of
Roundy's Stock offered hereby. For further information, reference is
made to such Registration Statement, of which this Prospectus is a part,
and to the exhibits thereto, which are listed in such Registration
Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates certain documents by reference which
are not delivered herewith. The following documents filed with the
Commission under the 34 Act (Commission File No. 2-66296) are
incorporated herein by reference but are not delivered herewith:
(a) Roundy's annual report filed with the Commission on Form 10-
K for the fiscal year ended January 1, 1994 (the "1993 Form 10-K");
(b) Roundy's quarterly report filed with the Commission on Form
10-Q for the quarterly period ended April 2, 1994;
(c) Roundy's quarterly report filed with the Commission on Form
10-Q for the quarterly period ended July 2, 1994;
(d) Roundy's quarterly report filed with the Commission on Form
10-Q for the quarterly period ended October 1, 1994 (the "Third
Quarter Form 10-Q");
(e) Roundy's current report filed with the Commission on Form 8-
K dated October 14, 1994;
(f) Roundy's current report filed with the Commission on Form 8-
K dated November 21, 1994; and
(g) All other reports filed pursuant to Section 13(a) or 15(d)
of the 34 Act since the end of the fiscal year covered by the
annual report referred to in (a), above.
Roundy's will provide, without charge to each person to whom this
Prospectus is delivered, a copy of any or all of such documents (other
than exhibits to such documents which are not specifically incorporated
by reference into the text of such documents) upon the oral or written
request of such person. Any such request should be directed to:
Roundy's, Inc., 23000 Roundy Drive, Pewaukee, Wisconsin 53072,
Attention: Robert D. Ranus, Telephone: (414) 547-7999.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated herein by reference
modifies or supersedes such statement. Any statement so modified or
<PAGE>
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus and investors should rely on such
modified, superseded or replaced information and not on the information
contained in the documents incorporated by reference.
ii
PROSPECTUS SUMMARY
The following is a brief summary of certain information contained
elsewhere in this Prospectus. The summary is necessarily incomplete and
selective and is qualified in its entirety by the detailed information
and financial statements appearing elsewhere and incorporated by
reference herein.
____________________
Factors to be Considered
- ------------------------
An investment in Roundy's Stock is subject to certain risks, which
should be carefully considered by investors. See "FACTORS TO BE
CONSIDERED."
The Company and Its Business
- ----------------------------
Roundy's, Inc. and its subsidiaries (collectively the "Company")
are engaged principally in the wholesale distribution of food and non-
food products to supermarkets and warehouse food stores located in
Wisconsin, Illinois, Michigan, Indiana, Ohio, Iowa, Kentucky, Missouri,
Pennsylvania, Tennessee and West Virginia. References in this
Prospectus to the "Company" mean Roundy's, Inc. and its subsidiaries.
References in this Prospectus to "Roundy's" mean Roundy's, Inc.
excluding its subsidiaries. The Company also owns and operates 10
retail warehouse food stores under the name "Pick 'n Save," one limited
assortment store under the name "Mor For Less" and four conventional
stores under the name "Cardinal Food Gallery" or "Buy Low Foods." The
Company provides various ancillary services, including financial,
engineering, advertising, accounting, insurance and promotional services
to its retail customers. The Company services approximately 1,015
retail grocery stores. See "THE COMPANY" and "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION."
Basic Distinctions Between Classes of Stock; Voting Trust
- ---------------------------------------------------------
The issued and outstanding shares of Roundy's Stock are divided
into two classes: Class A Common, having voting rights on all matters
submitted to a vote of stockholders, and Class B Common, having no
voting rights other than those provided by law.
Approximately 66% of Roundy's Stock (including 100% of the
outstanding Class A Common) is owned by the owners of 140 retail grocery
stores serviced by Roundy's. The balance of the Company's customers are
independent grocers which do not own any Roundy's Stock.
Ownership of Class A Common is limited to 100 shares for each
retail food store operated by the stockholder-customer (or a corporation
which the stockholder-customer controls). There are also certain
restrictions on the number of shares of Class B Common which a
stockholder may own, pursuant to the terms of certain policies adopted
<PAGE>
by Roundy's Board of Directors. These policies may be changed at any
time. See "Basic Features of Offering" below and "TERMS OF OFFERING."
Class B Common shares have been, and it is anticipated that they will
continue to be, distributed in payment of patronage dividends declared
to stockholder-customers, if and when any such patronage dividends are
declared. See "Basic Features of Offering" below. While dividends,
other than patronage dividends, may be paid on either class of Roundy's
Stock, it is not anticipated that any such dividends will be paid in the
foreseeable future. See "MARKET FOR ROUNDY'S STOCK AND RELATED
STOCKHOLDER MATTERS" below. In the event of the liquidation of
Roundy's, shares of Class A Common and Class B Common will share ratably
in the net assets of the Company. See "DESCRIPTION OF STOCK."
All Class A Common outstanding on the date of this Prospectus is
owned of record by the Trustees of a Voting Trust, which by its terms
will expire in 1997. Roundy's will request, but not require, all
purchasers of Class A Common offered hereby to deposit such shares in
the Voting Trust in exchange for Voting Trust Certificates. See "VOTING
TRUST."
1
Basic Features of Offering
- --------------------------
The offering price of shares offered hereunder is the Book Value
per share of outstanding shares of such stock as reflected on the
Company's audited financial statements ("Book Value") as of the close of
the Company's fiscal year prior to the purchase of such stock, adjusted
for subsequent stock dividends and stock splits.
Each customer for whom Roundy's is the primary supplier is
required to subscribe for and purchase exactly one hundred (100) shares
of Class A Common for each retail store owned by such customer which
store is principally supplied by Roundy's (an "Active Customer").
Shares of Class B Common may be purchased or acquired by
stockholder-customers in one of the following ways:
(1) Subject to the limitations on purchases of Class B Common as
described under "TERMS OF OFFERING" and Exhibit E, a stockholder-
customer may subscribe for shares of Class B Common during three
"window" periods each year (consisting of the last two weeks of
May, August and November, respectively), pay the full price
therefore (Book Value as of the close of the fiscal year prior to
subscription) and receive certificates for the shares subscribed
for. A stockholder-customer may deposit funds with Roundy's
pursuant to a written agreement with Roundy's to fulfill the
stockholder-customer's buying deposit requirement. During the
three "window" periods, the stockholder-customer may subscribe for
shares of Class B Common (within applicable limits) and allocate
some or all of such deposited funds to the payment for such shares
(at the Book Value as of the close of the fiscal year preceding
the year in which such subscription is received). See "TERMS OF
OFFERING--Buying Deposits; Application of Deposited Funds."
(2) A stockholder-customer may acquire shares of Class B Common
by receipt of such shares in payment of a portion of a patronage
dividend, if and when any such patronage dividends are declared.
See "THE COMPANY--Payment of Patronage Dividends."
<PAGE>
(3) Stockholder-customers of Roundy's who cease to do business
with Roundy's are required to exchange their Class A Common for
Class B Common, on a share for share basis. See "EXCHANGE OF
CLASS A COMMON FOR CLASS B COMMON."
In addition, the Company may offer shares of Class B Common to its
Directors and certain key employees, at a price equal to the Book Value
as of the close of the prior fiscal year, or, in the case of key
employees, as bonus shares at the discretion of the Board of Directors
or pursuant to employees' exercise of stock options.
Use of Proceeds
- ---------------
The proceeds of this offering will be used for general working
capital purposes and for capital expenditures, as required. See "USE OF
PROCEEDS."
2
Repurchase of Shares
- --------------------
Roundy's is obligated under its current stock redemption policy as
set forth in Exhibit D ("the Stock Redemption Policy") to repurchase
shares of Roundy's Stock upon request made by or on behalf of a
stockholder who has terminated or substantially reduced its relationship
with Roundy's. This obligation, however, is subject to change should
the Stock Redemption Policy be revised and is limited with respect to
the aggregate dollar amount of repurchases that may be made at any
particular time. With certain exceptions, shares will be repurchased
under the Stock Redemption Policy over a five-year period beginning on
the first anniversary date of the stockholder-customer repurchase
request. The repurchase price is the Book Value at the end of the
fiscal year preceding the date of the actual repurchase. Roundy's is
not obligated to repurchase any Roundy's Stock except under the Stock
Redemption Policy as it may be in effect from time to time. The Stock
Redemption Policy may be amended or rescinded at any time by the Board
of Directors of Roundy's. See "REPURCHASE OF SHARES."
<PAGE>
Summary Financial Data
- ----------------------
The following table sets forth certain data as to the Company for,
and as of the end of, each of the last three fiscal years:
<TABLE>
<CAPTION>
Fiscal Years
---------------------------------------------------------------
1994 1993
(39-Weeks) (39-Weeks) 1993 1992 1991
---------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Earnings Statement Data:
Net Sales and Service
Fees................ $1,831,506 $1,843,036 $2,480,254 $2,491,293 $2,534,418
Earnings Before Patronage
Dividends and Income
Taxes............... 10,594 10,351 20,053 16,528 14,826
Patronage Dividends.... 1,750 1,750 5,301 5,135 3,305
Net Earnings........... 5,240 5,096 8,028 7,353 6,813
Balance Sheet Data:
Total Assets........... 398,059 414,745 380,092 390,148 390,797
Working Capital........ 92,497 115,351 113,643 119,153 116,940
Long-term Debt (less
current maturities). 92,004 120,148 113,045 135,420 139,283
Stockholders' Equity(1) 90,143 82,209 86,066 78,573 70,917
</TABLE>
(1) Includes patronage dividends payable in Class B Common of
$1,225,000 and $1,225,000 as of October 1, 1994 and October 2,
1993, respectively. Also includes patronage dividends payable
in Class B Common of $3,263,000, $3,210,000 and $2,212,000 in
1993, 1992, and 1991, respectively.
See "SELECTED FINANCIAL INFORMATION" and "INDEX TO FINANCIAL
STATEMENTS."
3
<PAGE>
FACTORS TO BE CONSIDERED
Lack of Market for Roundy's Stock
- ---------------------------------
The shares offered hereby may not be sold or otherwise transferred
or pledged by the record holder thereof without Roundy's written
consent. Although Roundy's is obligated under its current Stock
Redemption Policy to repurchase its shares from a customer which has
terminated its business relationship with Roundy's and which tenders
such stock for repurchase, this obligation is limited in various
respects, including (without limitation) as to the maximum amount which
Roundy's will pay for stock repurchases in any fiscal year. Further,
the Stock Redemption Policy, and therefore, Roundy's obligation to
- ------------------------------------------------------------------
repurchase shares of Roundy's stock, may be modified or rescinded at any
- ------------------------------------------------------------------------
time without prior notice. See "REPURCHASE OF SHARES."
- -------------------------
Limitations on Investment Return
- --------------------------------
Although Roundy's may pay patronage dividends to its stockholder-
customers in certain circumstances, no assurance can be given as to when
or whether patronage dividends will be paid in the future. Roundy's
only obligation to pay patronage dividends is that imposed by Article V
of its By-Laws (see Exhibit C), and these By-Law provisions may be
amended or repealed at any time by Roundy's Board of Directors. There
can be no assurance that Roundy's will have in any year sufficient net
earnings from Roundy's cooperative business and consolidated net
earnings to permit the payment of patronage dividends. See "THE COMPANY
- -- Payment of Patronage Dividends." Dividends other than patronage
dividends have not been paid by Roundy's, and it is not anticipated that
any such dividends will be paid. Consequently, owners of Class B Common
who are not stockholder-customers cannot expect to receive any patronage
or other dividends of any kind. Accordingly, a purchaser of the
securities offered hereby may be unable to realize a return on its
investment, or realize all or a portion of the value of shares
purchased, except in the event of the repurchase of such shares by
Roundy's, or the liquidation of Roundy's.
Limitations on Purchasers
- -------------------------
This offering is being made only to persons who are engaged in the
operation of retail food stores which are customers of Roundy's, and to
the Directors and certain key employees of the Company. The amount of
Class A Common (the only class having voting rights and substantially
all of which is owned by Roundy's stockholder-customers) which may be
purchased by any such person is limited, no person being permitted to
own more than 100 shares for each Active Customer operated by such
person. The amount of Class B Common which may be purchased is also
limited, pursuant to policies adopted by the Board of Directors of
Roundy's (which policies may be changed at any time). See "TERMS OF
OFFERING" and Exhibit E attached hereto.
Sale of All Shares Offered Not Assured
- --------------------------------------
Because (a) there are limitations upon who may purchase shares
hereunder and upon how many shares of Class A Common and Class B Common
any person may own or purchase, (b) there is uncertainty as to whether
future patronage dividends will be paid and, if paid, the amount, if
<PAGE>
any, that may be paid in shares of Class B Common, and (c) this offering
is not underwritten, there can be no assurance that all or any portion
of the shares offered hereby will be sold. See "PLAN OF DISTRIBUTION."
4
Limitations on Stockholders' Ability to Elect Directors
- -------------------------------------------------------
As of the date of this Prospectus, all of the outstanding Class A
Common has been deposited in a Voting Trust, the Trustees of which are
authorized to vote the shares in their discretion for the election of a
majority (all but three) of the Directors. On most other matters,
including the election of three Directors (one in each year), the
Trustees must vote shares held in the Voting Trust as directed by a vote
of the holders of outstanding Voting Trust Certificates (with each share
of Class A Common in the Trust entitling the certificate holder thereof
to one vote). The seven Trustees of the Voting Trust, one of whom is a
Director of Roundy's, may be deemed to be in "control" of the Company.
Purchasers of the Class A Common offered hereby will be requested, but
not required, to deposit such shares in the Voting Trust. Shares of
Class A Common deposited in the Voting Trust are subject to a limited
right of withdrawal after such shares have been on deposit for five
years. See "VOTING TRUST."
Lien on Shares
- --------------
Roundy's has a lien on all Roundy's Stock held by its
stockholders, whether presently outstanding or issued in the future, as
security for the payment, from time to time and as often as the same may
become due and payable, of any and all obligations of the owner thereof
to the Company. See "DESCRIPTION OF STOCK."
Cooperative Tax Status
- ----------------------
Although Roundy's is incorporated as a Wisconsin business
corporation, it has historically operated and anticipates that it will
(although it is not obligated to) continue to operate as a cooperative,
reporting its tax liability in accordance with rules applicable to
corporations operating on a cooperative basis. The applicable laws,
regulations, rulings and judicial interpretations do not precisely
define a cooperative for income tax purposes. Therefore, no assurance
can be given that the cooperative income tax status of Roundy's could
not be challenged successfully by the Internal Revenue Service. If such
status were to be challenged successfully, Roundy's would incur a
significant income tax liability.
Income Tax Liability for Patronage Dividends
- --------------------------------------------
A purchaser of shares will be required to report as gross income,
for federal income tax purposes, the patronage dividends, if any,
distributed by Roundy's to such purchaser. Shares of Class B Common
issued as a portion of a patronage dividend must be reported as income
at their full stated dollar amount, along with cash received as the
other portion of such dividends. Although a minimum of 20% of each
recipient's total annual patronage dividend is required to be paid by
Roundy's in cash, the cash portion may be insufficient, depending upon
the income tax bracket of each recipient, to provide funds for the full
payment of the federal income tax liability incurred by the recipient
with respect to such patronage dividends. Shares of Class B Common
distributed as patronage dividends are subject to state income taxes in
<PAGE>
Wisconsin, and may be subject to such taxes in other states. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION" and "THE COMPANY."
5
Competition
- -----------
The grocery industry, including the wholesale food distribution
business, is characterized by intense competition and low profit
margins. The Company competes with a number of local and regional
grocery wholesalers and with a number of major businesses which market
their products directly to retailers, including companies having greater
assets and larger sales volume than the Company. The Company's
customers and the Company's corporate stores also compete at the retail
level with several chain store organizations which have integrated
wholesale and retail operations.
MARKET FOR ROUNDY'S STOCK AND RELATED STOCKHOLDER MATTERS
The transfer of shares of Class A Common and Class B Common is
restricted and there is no market for Roundy's Stock. On January 1,
1994 an aggregate of 250 persons held shares of Roundy's Class A and/or
Class B Common. There is also no market for Roundy's Voting Trust
Certificates and there were 83 holders of such Certificates on January
1, 1994. Except for patronage dividends (see "THE COMPANY--Payment of
Patronage Dividends"), no dividends have ever been paid on the Common
Stock of Roundy's. There is no intention of paying dividends, other
than patronage dividends, in the foreseeable future.
6
<PAGE>
PLAN OF DISTRIBUTION
The shares offered hereby are being offered only by Roundy's,
through its officers, directors and employees.
Roundy's is primarily concerned with attracting stockholders who
can effectively use the services of Roundy's and whose trade with
Roundy's will be mutually beneficial. Sale of shares offered hereby is
limited primarily to individuals, partnerships or corporations which are
engaged in the operation of retail food stores and which purchase
merchandise from or through Roundy's. Company employees whose duties
consist of sales of merchandise to retail food stores are not authorized
to accept stock subscriptions or to sell shares of stock to any person.
No salesmen or securities dealers are or ever have been employed for the
sale of Roundy's Stock, and no officer, director or employee directly or
indirectly receives any commission, bonus, or other separate
compensation for sales of Roundy's Stock.
TERMS OF OFFERING
Limitation on Offerees and Purchases
- ------------------------------------
This offering is limited to individuals, partnerships and
corporations engaged in the operation of retail food stores which are
Active Customers of Roundy's. Shares of Class B Common may also be sold
hereunder to the Directors and certain key employees of the Company.
Required Purchases of Class A Common
- ------------------------------------
Shares of Class A Common offered hereby must be purchased in units
of 100 shares. No person may own any Class A Common unless such person
owns and operates at least one Active Customer. Each retailer for whom
Roundy's is the primary source of supply is required to purchase and own
100 shares of Class A Common for each Active Customer operated by such
person. No person may own more than 100 shares of Class A Common for
each Active Customer operated by such person. Under certain policies
adopted by Roundy's Board of Directors, there are limits on the number
of shares of Class B Common which may be purchased. See "Methods Of
Acquiring Shares of Class B Common" below.
Methods of Acquiring Shares of Class B Common
- ---------------------------------------------
Shares of Class B Common may be purchased or acquired in one of
the following ways:
(1) A stockholder-customer may subscribe for shares of Class B
Common during three "window" periods each year (consisting of the
last two weeks of May, August and November, respectively), pay the
full price therefor (Book Value as of the close of the fiscal year
prior to subscription adjusted for subsequent stock dividends and
stock splits) and receive certificates for the shares subscribed
for. Pursuant to the terms of certain policies which have been
adopted by Roundy's Board of Directors as set forth in Exhibit E
attached hereto (the "Issuance Policy"), the total number of
shares that a stockholder-customer may purchase in one year is
limited to 15% of the stockholder-customer's buying deposit
deficit for active customers with a buying deposit deficit, and 5%
of the buying deposit for active customers without a buying
deposit deficit; provided, that certain new stockholder-customers
are entitled each year to purchase shares up to 30% of their
<PAGE>
buying deposit. See "Buying Deposit; Application of Deposited
Funds" below and Exhibit E attached hereto.
7
A stockholder-customer may deposit funds with Roundy's pursuant to
a written agreement with Roundy's to fulfill the stockholder-
customer's buying deposit requirement. During the three "window"
periods, the stockholder-customer may subscribe for shares of
Class B Common (within applicable limits) and allocate some or all
of such deposited funds to the payment for such shares (at the
Book Value as of the close of the fiscal year preceding the year
in which such subscription is received).
(2) A stockholder-customer may acquire shares of Class B Common
by receipt of such shares in payment of a portion of a patronage
dividend. There can be no assurance that Roundy's will have in any
year sufficient net earnings from Roundy's cooperative business
and consolidated net earnings to permit the payment of patronage
dividends. See "THE COMPANY--Payment of Patronage Dividends."
(3) Stockholder-customers of Roundy's who cease to do business
with Roundy's are required to exchange their Class A Common for
Class B Common, on a share for share basis. See "EXCHANGE OF
CLASS A COMMON FOR CLASS B COMMON."
In addition, Roundy's may offer shares of Class B Common to its
directors and certain key employees, at a price equal to the Book Value
as of the close of the prior fiscal year, or, in the case of key
employees, as bonus shares at the discretion of the Board of Directors
or pursuant to employees' exercise of stock options.
Offering Price
- --------------
The offering price of each share of Class A Common and Class B
Common is equal to the Book Value as of the close of the previous fiscal
year, adjusted for subsequent stock dividends and stock splits. Shares
are not sold during any year until the Book Value at the end of the
immediately preceding fiscal year has been determined.
The same value will also be assigned to each share of Class B
Common issued as a portion of a patronage dividend. That is, shares, if
any, distributed in 1996 (for example) as patronage dividends accrued
with respect to purchases from Roundy's during 1995 will be valued at
the Book Value of outstanding shares determined as of the end of the
Roundy's 1995 fiscal year.
The Book Value of outstanding Roundy's Stock (both Class A Common
and Class B Common) at the end of the 1993 fiscal year was $71.65 per
share. Roundy's By-Laws prohibit the payment of any patronage dividend
in any year unless sufficient earnings have been retained to increase
the Book Value of the outstanding Roundy's Stock by 10% during that
year. See "THE COMPANY."
Buying Deposits; Application of Deposited Funds
- -----------------------------------------------
Each stockholder-customer of Roundy's is required to maintain a
buying deposit for each Active Customer it operates in an amount equal
to the greater of $20,000 or the estimated amount of purchases by the
Active Customer from Roundy's over a two week period (subject to
Roundy's reserved right to increase the amount of the deposit required
<PAGE>
of any Active Customer). This buying deposit requirement may be
satisfied by either a cash deposit in the specified amount (bearing no
interest), or the collateral pledge of Class A Common and/or Class B
Common. In either case, a stockholder-customer may make its entire
buying deposit by a payment in cash at the outset of its customer
relationship, or it may fulfill part or all of its buying deposit
requirement by means of weekly or monthly payments, in accordance with
an amortization schedule forming a part of the Buying Deposit Agreement
between such stockholder-customer and Roundy's (the form of Buying
Deposit Agreement is attached hereto as Exhibit B). If a stockholder-
customer elects to fulfill its buying deposit requirements through
periodic installment payments, such stockholder-customer may apply
amounts so deposited toward the subscription price of shares (in
8
accordance with the limitations described above) at the time such shares
are subscribed for. Neither the execution of a Buying Deposit
Agreement, nor the deposit of funds by a stockholder-customer pursuant
to such Buying Deposit Agreement, will constitute a subscription
agreement or an agreement of any kind on the part of the stockholder-
customer to purchase, or on the part of Roundy's to sell, any shares of
Roundy's Stock. See "THE COMPANY--Stockholder-Customers" and Exhibit B
attached hereto. Buying deposits satisfied by deposit of cash are
reflected on the Company's balance sheet as accounts payable.
Stockholder-customers who have already satisfied their buying
deposit requirements may nevertheless elect to subscribe for and
purchase shares subject to the limitations described above under
"Methods of Acquiring Shares of Class B Common."
Issuance of Class B Common As Patronage Dividends
- -------------------------------------------------
If shares of Class B Common are issued as patronage dividends,
such shares, when issued, will be fully paid and non-assessable at the
time of issuance, except as otherwise provided by Wisconsin law (see
"DESCRIPTION OF STOCK"). Further, such shares shall be subject to
Roundy's lien against all outstanding shares to secure the payment of
the stockholder-customer's obligations to the Company. See "THE
COMPANY--Stockholder-Customers." Finally, such shares shall be applied
to satisfy (in whole or in part) the buying deposit deficit of
stockholder-customers with a buying deposit deficit. If such
stockholder-customer has elected to pay its buying deposit in periodic
installments, such shares shall be applied to such installments in the
inverse order of their due dates.
9
USE OF PROCEEDS
The net proceeds to be received from the sale of the Class A
Common and Class B Common offered hereby will be added to the working
capital of the Company and used for general working capital purposes,
including the purchase of merchandise to be resold by Roundy's and the
maintenance of adequate inventories of such merchandise, and for capital
expenditures as required. The Company's principal source of working
capital has been from borrowings, rather than from the proceeds of the
sale of equity securities, and it is expected that this will continue to
be true in the future.
<PAGE>
EXCHANGE OF CLASS A COMMON FOR CLASS B COMMON
Stockholder-customers of Roundy's, upon termination of Active
Customer status, are required to surrender their shares of Class A
Common in exchange for Class B Common, on a share for share basis, in
accordance with a provision of Roundy's By-Laws. Roundy's has imposed
this requirement to comply with the Internal Revenue Code and the
regulations thereunder governing federal income taxation of corporations
operating on a cooperative basis. See "THE COMPANY-Operation as a
Cooperative." Under Section 1036 of the Internal Revenue Code, as
amended, no gain or loss is recognized for federal income tax purposes
by a stockholder who exchanges common stock of a corporation for other
common stock of the same corporation. See "REPURCHASE OF SHARES."
REPURCHASE OF SHARES
The following description of the Stock Redemption Policy is
necessarily selective and is qualified in its entirety by the full text
of the Stock Redemption Policy which is attached as Exhibit D.
Roundy's Articles of Incorporation provide that the Board of
Directors may cause Roundy's to repurchase or redeem shares of Roundy's
Stock on such terms as the Board deems appropriate (without consent of
the stockholders) subject to applicable Wisconsin law. The Board of
Directors has adopted the Stock Redemption Policy setting forth
conditions under which Roundy's will repurchase or redeem its Common
Stock (See Exhibit D). Absent the Stock Redemption Policy, Roundy's
would have no obligation (whether under its Articles of Incorporation,
By-Laws or otherwise) to repurchase any Roundy's Stock. Considering the
restrictions on ownership and resale of Roundy's Stock (See "DESCRIPTION
OF STOCK - Restrictions on Transfer"), a stockholder-customer might have
no means to liquidate an investment in Roundy's Stock if no redemption
policy were to exist requiring Roundy's to repurchase such shares.
The Stock Redemption Policy provides that Roundy's will repurchase
shares of Roundy's Stock following a request by the stockholder or his
or her legal representative made during one of three open "window
periods" (the last two weeks of May, August and November of each year)
after the occurrence of a "customer-shareholder termination" or an
"employee-shareholder termination" as defined in the Stock Redemption
Policy. A "customer-shareholder termination" occurs whenever a retail
food store principally supplied by Roundy's (an "Active Customer") which
is owned by a stockholder either ceases to be an Active Customer or
ceases to be owned or operated by such stockholder. An "employee-
shareholder termination" occurs when a stockholder's employment
relationship with the Company is terminated for any reason. Under the
Stock Redemption Policy, Roundy's is not required to repurchase Roundy's
Stock held by a stockholder during the period he or she is an Active
Customer or is employed by the Company.
The Stock Redemption Policy requires Roundy's to acknowledge
promptly in writing receipt of a repurchase request. Once a repurchase
request is so acknowledged by Roundy's, the request becomes irrevocable
except with the prior written consent of the Board of Directors.
10
<PAGE>
The obligation to repurchase stock under the Stock Redemption
Policy arises, as to the number of shares covered by a repurchase
request, in annual 20% increments during the five year period beginning
on the repurchase request date. On each of the first through the fifth
anniversary dates of the repurchase request date (a "repurchase target
date"), Roundy's is obligated to purchase 20% of the aggregate number of
shares of Roundy's Stock for which a proper repurchase request has been
received. However, if a "customer-shareholder termination" or an
"employee-shareholder termination" occurs as a result of the death of
the stockholder, the estate of such stockholder may elect (by written
notice to Roundy's within 180 days after such death) to have not more
than the first $50,000 in value of stock repurchased on an accelerated
basis within 180 days after Roundy's receipt of such election notice.
Each share shall continue to be outstanding for all purposes until
actually repurchased.
The repurchase price for the shares under the Stock Redemption
Policy shall be the Book Value as of the end of the fiscal year
preceding the actual date of repurchase, as adjusted for subsequent
stock splits and stock dividends. Because the repurchase price will
fluctuate based on changes in Book Value from year to year, the
repurchase price payable for any 20% increment to be repurchased at a
later repurchase target date may be greater or less than that payable
for a 20% increment repurchased at an earlier date pursuant to the same
repurchase request. There is no assurance that Book Value will increase
from one year to the next and it may decline.
Under the Stock Redemption Policy, based upon pending repurchase
requests received by Roundy's on or prior to the end of its preceding
fiscal year (but without taking into account any requests for
accelerated repurchase, if any, which may have been received from an
estate of a deceased shareholder), 28,273 shares of Class B Common are
expected to be repurchased in 1995 at the Book Value per share as of
December 31, 1994 of $______, for a total repurchase obligation of
$______________. In addition, based upon such pending requests,
Roundy's presently expects to repurchase 19,426 shares in 1996, 13,354
shares in 1997, 7,344 shares in 1998, and 3,174 shares in 1999. The
repurchase price in each year after 1995 will be Book Value per share of
the Roundy's Stock as of the end of the fiscal year immediately pre-
ceding the date of repurchase, assuming the Stock Redemption Policy
remains unchanged. The number of shares of Class B Common subject to
repurchase requests in years after 1995 may change based upon receipt of
additional repurchase requests after December 31, 1994 or if the Company
should exercise its discretion to effect one or more "Non-Policy
Redemptions," or otherwise agree to repurchase shares other than on the
terms prescribed by the Stock Redemption Policy, as discussed below.
Roundy's obligation to repurchase shares under the Stock
Redemption Policy is subject to any limitations on repurchases that may
be contained in present or future lending or other agreements of the
Company (the "Contract Limits"). These generally consist of covenants
and restrictions of a type frequently encountered in similar
transactions, such as stockholders' equity to capital ratios, debt to
capital ratios, liability to net worth ratios and maintenance of certain
amounts of working capital and stockholders' equity. There is no
assurance that these Contract Limits will not be modified. In the event
the Contract Limits preclude Roundy's during a given period of time from
repurchasing shares which are the subject of a repurchase request, or if
required repurchases are delayed for any other reason (in either case, a
"Suspension"), repurchases shall be resumed promptly thereafter in the
<PAGE>
order of the redemption target dates which occurred during the period of
the Suspension regardless of the dates the repurchase requests were
received and such suspended repurchases shall be made under the Stock
Redemption Policy prior to redemptions becoming due on any subsequent
redemption target dates. Notwithstanding the foregoing provisions,
stock having a repurchase price of not in excess of $25,000 may be
repurchased on an accelerated basis in the sole discretion of Roundy's
in cases of demonstrated hardship.
11
The Stock Redemption Policy may be amended or rescinded at any
time by the Board of Directors of Roundy's, subject only to the
provision that no such amendment or rescission may reduce the price
payable for shares which have been properly tendered for redemption
prior to the date on which the Board of Directors takes action to effect
such amendment or rescission. Any such changes could have a material
adverse effect upon a stockholder-customer's right to cause Roundy's to
repurchase shares of Roundy's stock.
Any stockholder-customer who fails to surrender its Class A Common
for an equal number of Class B Common (See "EXCHANGE OF CLASS A COMMON
FOR CLASS B COMMON") within 90 days following a customer-shareholder
termination is not eligible for repurchase of shares under the Stock
Redemption Policy. In addition, the Stock Redemption Policy does not
apply, according to its terms, to any person who, at the time of such
repurchase, is asserting a challenge to the authority of Roundy's or its
Board of Directors to have adopted any prior, then current or pending
redemption policy or is then asserting a challenge to the enforceability
or validity of Roundy's interpretation or application of any provision
of the then current or any prior redemption policy.
Notwithstanding the Stock Redemption Policy, the Board of
Directors may cause Roundy's to repurchase or redeem stock of active or
inactive customers or current or former employees on any other terms or
under such other circumstances as the Board deems appropriate, all
without the consent or approval of the other stockholders. For example,
the Board may authorize an accelerated repurchase for hardship purposes
on terms differing from those provided for in the Stock Redemption
Policy (a "Non-Policy Redemption"). The fact that any one stockholder
may be given a Non-Policy Redemption shall not give rise to similar
redemption rights for any other stockholders and shall not be construed
to modify the Stock Redemption Policy.
12
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated
capitalization of the Company as of October 1, 1994:
To Be Out-
standing If
All Stock
Offered Here-
Outstanding by is Sold(1)
------------- -----------------
SHORT-TERM INDEBTEDNESS:
Current maturities of long-term
debt........................ $ 6,462,300 $ 6,462,300
------------- ----------------
Total short-term debt.... $ 6,462,300 $ 6,462,300
============ ================
LONG-TERM INDEBTEDNESS (3):
Other long-term debt, 9% to
10%, due 1995 to 2006....... $ 1,148,700 $ 1,148,700
Obligations under capitalized
leases...................... 755,300 755,300
Senior unsecured notes payable:
10.31%, due 1996 to 1999.... 6,000,000 6,000,000
9.26%, due 1995 to 2001..... 17,500,000 17,500,000
7.57% to 8.26%, due
1995 to 2008................ 21,600,000 21,600,000
6.94%, due 1997 to 2003..... 45,000,000 45,000,000
------------ ------------
Total long-term debt $ 92,004,000 $ 92,004,000
============ ============
CAPITAL STOCK:
Class A Common, $1.25 par
value, 60,000 shares
authorized.................. 14,200 shares 18,200 shares
Class B Common, $1.25 par
value, 2,400,000 shares
authorized (2).............. 1,153,805 shares 1,453,805 shares
(1) The column "To Be Outstanding" reflects the sale and issuance of
Roundy's shares of Class A Common and Class B Common hereunder,
although this offering is not underwritten and there is no
assurance that any of such shares offered will be sold.
(2) Over the past several years, Roundy's has issued shares of
Roundy's Class B Common as the major portion of its patronage
dividend payments. (See "THE COMPANY.") It is expected that
shares of Roundy's Class B Common will be issued in this manner in
the future.
(3) The prime interest rate was 7.75% at October 1, 1994.
13
<PAGE>
SELECTED FINANCIAL INFORMATION
(Dollars in thousands, except per-share data and ratios)
The selected financial information for the 39 week period ended
October 1, 1994 and October 2, 1993, and five-year period ended January 1,
1994 should be read in conjunction with the Roundy's, Inc. and Subsidiaries
Consolidated Financial Statements and notes thereto included elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
Fiscal Year
----------------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
(39-Weeks) (39-Weeks)
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales and service fees $1,831,506 $1,843,036 $2,480,254 $2,491,293 $2,534,418 $2,501,465 $2,331,091
Earnings before patronage
dividends and income taxes 10,594 10,351 20,053 16,528 14,826 16,724 15,617
Patronage dividends 1,750 1,750 5,301 5,135 3,305 5,549 5,007
Earnings before income taxes 8,844 8,601 14,752 11,393 11,521 11,175 7,924
Net earnings 5,240 5,096 8,028 7,353 6,813 6,507 6,053
Total assets 398,059 414,745 380,092 390,148 390,797 390,356 371,221
Long-term debt 92,004 120,148 113,045 135,420 139,283 140,435 149,349
Stockholders' equity (1) 90,143 82,209 86,066 78,573 70,917 65,236 59,389
Book Value per share 71.65 65.10 71.65 65.10 58.75 53.10 47.35
Ratio of current assets to
current liabilities 1.44:1 1.56:1 1.64:1 1.70:1 1.66:1 1.59:1 1.69:1
Ratio of long-term debt to
stockholders' equity 1.02:1 1.46:1 1.31:1 1.72:1 1.96:1 2.15:1 2.51:1
</TABLE>
(1) Including patronage dividends payable in Class B Common of $1,225,000
and $1,225,000 as of October 1, 1994 and October 2, 1993, respectively.
Also, including patronage dividends payable in Common Stock of
$3,263,000, $3,210,000, $2,212,000, $3,414,000 and $3,312,000 for 1993,
1992, 1991, 1990 and 1989, respectively.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES. During 1993, the Company continued to
improve its capital structure through increased stockholders' equity,
lower debt and refinancing of high interest rate debt with lower
interest rate long-term debt. The combination of an excellent capital
market and low interest rates together with the Company's improved debt
ratios, enabled Roundy's to access the long-term debt market at very
favorable rates. The Company, in December 1993, replaced $25 million of
11.26% notes with $45 million of 6.94% notes with a ten year term and
used the remaining proceeds to reduce its borrowings under its revolving
credit agreement. The Company plans to prepay $9.75 million of its
10.31% senior notes on the first available prepayment date in late 1994.
The Company's goal is to continue to reduce its long-term debt to
equity ratio which was 1.31:1 in 1993 and 1.72:1 in 1992, yet keep all
options for providing capital resources, available to management. With
the additional reduction in floating rate debt, the Company continued to
minimize its exposure to major fluctuations in interest rates. The
percentage of floating rate debt to total long-term debt declined to
approximately 9% in 1993 from 30% in 1992.
As a result of the long-term refinancing, there was a need to
modify a portion of the Company's revolving credit agreement which was
due to expire in March, 1995. The entire agreement was modified and
extended until March, 1997. The revised agreement includes a provision
for a lower spread on interest rates indexed to the London Interbank
Offered Rate ("LIBOR"). Management views the extension and the positive
modification as an indication of the banking community's support for
Roundy's during a turbulent time within the grocery industry. It is
management's intention to continue to use this type of borrowing
vehicle, particularly when it provides a low cost option as it did
during the last two years.
The Capital Structure table illustrates the growing percentage of
stockholders' equity to total capital which is 43.2% in 1993 compared to
36.7% in 1992. This positive trend was primarily the result of the
$22.4 million decline in total long-term debt in 1993 and $7.5 million
increase in stockholders' equity.
Roundy's average daily borrowings declined $2.6 million in 1993
compared to 1992 and $4.2 million compared to 1991. The more significant
factors which contributed to both the improvement in Roundy's capital
structure in 1993 and the decline in borrowing requirements include an
$11.6 million reduction in inventories, a $7.9 million increase in
proceeds from the sale of property and equipment and other productive
assets versus 1992 proceeds and a reduction in operating and
administrative expenses as a percentage of net sales and service fees
from 8.5% in 1992 to 8.3% in 1993. Net cash flows provided by operations
increased $14.5 million in 1993 compared to 1992. This improvement
demonstrated the commitment of management to reduce inventory and
receivables and take costs out of the system directed at reducing
borrowing levels. From 1990 to 1993, management has reduced average
daily borrowings by $8.0 million.
Although capital expenditures declined approximately $2.0 million
from 1992, they exceeded 1991 levels by $1.5 million. Management is
committed to continuing to invest in physical facilities, its
<PAGE>
transportation fleet and customer related systems. In this regard,
1994's capital expenditure budget has been set at $17 million. The
largest portion of the expenditures is directed at new transportation
equipment, retail store renovations and facility modernization.
15
Management continues to emphasize the necessity to monitor and
control working capital levels. Our goal is to maintain working capital
necessary to meet debt covenant requirements, but to avoid investing
significant funds in nonearning assets. In this regard, total working
capital declined $5.5 million. The key factors affecting this change
were an $11.6 million reduction in inventory, a $5.9 million increase in
cash, an increase in accounts payable of $2.4 million and an increase in
accrued expenses of $2.9 million. During 1993, management implemented
new programs directed at lowering inventory levels and days sales
outstanding in accounts receivable. These continue to be areas of high
scrutiny. Management believes strongly that the continued emphasis on
controlling these areas are important factors in lowering borrowing
levels.
Book Value per share increased to $71.65 or 10.1%. Since 1990,
Book Value per share has increased $18.55 per share or 34.9%. Patronage
dividends paid during this same three year period exceeded $13.7
million. It is important to note that 1991 earnings and patronage
dividends were reduced by the costs incurred during the labor dispute at
our largest wholesale division. During the period of 1991 through 1993,
stockholders' equity increased $20.8 million. This represents a 32%
growth in the net worth of the Company during a very competitive period
within the industry.
RESULTS OF OPERATIONS. Net sales and service fees declined $11.0 million
in 1993 from 1992 and $54.2 million from 1991. The 0.4% decline from
1992 can be attributed to several factors, including the loss of $15
million in sales resulting from the sale of Roundy's dairy and ice cream
operations in the early Fall of 1993; secondly, 1992 was a 53 week year
for Roundy's compared to 52 weeks for 1993; and finally, a $10 million
reduction in sales created by a major price decline in cigarettes
in 1993. After adjusting for these factors, 1993 net sales and service
fees increased in 1993 versus 1992 by $61 million or 2.4%. The decline
from 1991 is attributable to the loss of a major customer who sold his
entire retail operation to another wholesaler. Management believes, in
view of events happening in our market area that 1994 net sales and
service fees will increase due to the addition of new customers and
increased concentration from our existing customer base.
With the industry's continuing trend toward an "every day low
price" (EDLP) concept, there has been continuing pressure on margins.
The Company has experienced a decline in gross profit margins as a
percentage of net sales and service fees from 9.6% in 1991 and 1992 to
9.4% in 1993. It is management's belief that the pressures on margins
will continue in 1994 and wholesalers will have to seek alternative
methods to replace the declines in gross profit margins.
Operating and administrative expenses continued to decline in
1993, both in dollars and as a percent of net sales and service fees. In
1993, these expenses were 8.3% of net sales and service fees compared to
8.5% in 1992 and 8.6% in 1991. Management continues to look at this
category for further reductions which will help offset projected future
declines in gross profit margins. Accordingly, a major effort was
<PAGE>
undertaken during the past year to review and modify all compensation
and health care benefit programs, to evaluate possible consolidation of
functions within divisions, to consider further reductions in inventory
and thereby reduce related handling costs and to implement new systems
directed at improving efficiencies and the faster flow of information at
all levels within the Company. In this regard, management members are
active participants in the industry studies currently being conducted on
Efficient Consumer Response ("ECR") as they relate to inventory. It is
believed that all or some portion of this concept will benefit the
Company in lowering operating costs and benefit our customers in
enabling us to continue to provide them with the lowest cost of goods
available.
16
Management continued to seek opportunities to reduce debt,
strengthen its balance sheet and reduce interest expense. As mentioned,
the Company took several steps to achieve these goals including reduced
inventory levels, implementing automatic clearing house ("ACH") payment
programs to reduce receivables, seeking extended terms from vendors and
looking at charging vendors fees for poor performance. A major step was
taken in December 1993, when Roundy's elected to retire early, $25
million of 11.26% notes. The financial impact of this early retirement
was an extraordinary loss of $1.3 million, which was reflected in the
1993 Statement of Consolidated Earnings. Interest expense as a result of
both a decline in average daily borrowings and an improvement in rates
declined $1.0 million in 1993 compared to 1992 and $3.4 million compared
to 1991. At the end of 1993, Roundy's average cost of long-term debt was
7.9% compared to 8.6% in 1992 and 9.2% in 1991.
Effective income tax rates for 1993, 1992 and 1991 were 40.5%,
41.3% and 40.9%, respectively. The 1993 effective income tax rate
reflects increases resulting from President Clinton's new tax program as
well as the impact of the various state tax rates and jobs and other tax
credits. In 1992, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," issued by the
Financial Accounting Standards Board. The $660,000 cumulative effect of
adopting this statement is included in 1992 earnings.
Net earnings of Roundy's were the highest in the history of the
Company. Net earnings in 1993 were .32% of net sales and service fees
compared to .30% for 1992 and .27% for 1991. Net earnings in 1993 were
positively impacted by the gain from the sale of the Company's dairy and
ice cream operations. Management made the decision that these businesses
were not part of the "core" business in which the Company wanted to
concentrate future capital and management energies. It is believed that
these resources could be better deployed in retail and wholesale
operations to strengthen the Company for the future. Offsetting the
gain was the cost of the early retirement of debt. Management believes
that the recent influx of new business, coupled with the major emphasis
on cost reduction and control, will offset the continuing decline in
margins and increase net earnings in 1994.
<PAGE>
________________________________________________________________________
Capital Structure (in millions) 1993 1992
________________________________________________________________________
Long-term debt $111.7 56.1% $133.7 62.5%
Capitalized lease
obligations 1.3 0.7% 1.7 0.8%
________________________________________________________________________
Total long-term debt 113.0 56.8% 135.4 63.3%
Stockholders' equity 86.1 43.2% 78.6 36.7%
________________________________________________________________________
Total capital $199.1 100.0% $214.0 100.0%
________________________________________________________________________
17
<PAGE>
DEVELOPMENTS SINCE THE END OF THE
FISCAL YEAR ENDED JANUARY 1, 1994
Financial Condition at and Financial Results for the 39-Week Period
- -------------------------------------------------------------------
Ended October 1, 1994
- ---------------------
Roundy's unaudited financial statements (including consolidated
balance sheets at October 1, 1994 and January 1, 1994, and statements of
consolidated earnings and cash flows for the periods ended October 1,
1994 and October 2, 1993) are presented as part of this Prospectus.
Such unaudited financial statements, together with the notes
thereto, appear on pages F-14 through F-17. The following "Management's
Discussion and Analysis" section should be read in conjunction with such
unaudited financial statements.
18
<PAGE>
Management's Discussion And Analysis Of Results Of Operations And
- -----------------------------------------------------------------
Financial Condition At and For the Periods Ended October 1, 1994 and
- --------------------------------------------------------------------
October 2, 1993
- ---------------
Results of Operations
---------------------
The following is management's discussion and analysis of certain
significant factors which have affected the Company's results of
operations during the periods included in the accompanying statements of
consolidated earnings.
A summary of the period to period changes in the principal items
included in the statements of consolidated earnings is shown below:
Comparison of
-----------------------------------------------
13 Weeks Ended Oct. 1, 39 Weeks Ended Oct. 1,
1994 & Oct. 2, 1993 1994 & Oct. 2, 1993
-----------------------------------------------
Net sales and service fees $(15,382,100) (2.5)% $(11,529,800) (0.6)%
Cost of sales (15,312,700) (2.7)% ( 9,021,500) (0.5)%
Operating and admin. expenses 472,200 0.9 % (738,800) (0.5)%
Interest expense (648,400) (21.9)% (1,980,400) (21.8)%
Earnings before income taxes 196,800 6.8 % 242,700 2.8 %
Net sales and service fees decreased approximately $15.4 million during
the third quarter of 1994 as compared to the third quarter of 1993. The
loss of wholesale customers resulted in a decrease in sales of
approximately $6.2 million. The sale of manufacturing facilities
resulted in a decrease of $6.1 million. The closing or sale of three
Company-owned stores resulted in a decrease of approximately $4.1
million. Sales to new and existing wholesale customers increased $1.0
million.
Net sales and service fees increased approximately $11.5 million during
the first three quarters of 1994 as compared to the first three quarters
of 1993. The loss of wholesale customers resulted in a decrease in sales
of approximately $36.3 million. The sale of manufacturing facilities
resulted in a decrease of $24.4 million. The closing or sale of six
Company-owned stores resulted in a decrease of approximately $14.6
million. Sales to new and existing wholesale customers increased $63.8
million.
Cost of sales approximated 90.5% and 90.7% of net sales and service fees
for the thirteen weeks ended October 1, 1994 and October 2, 1993,
respectively. Year-to-date cost of sales approximated 90.7% and 90.6%
of net sales and service fees for the thirty-nine weeks ended October 1,
1994 and October 2, 1993, respectively.
Operating and administrative expenses approximated 8.6% and 8.3% of net
sales and service fees for the thirteen weeks ended October 1, 1994 and
October 2, 1993, respectively. Year-to-date operating and
administrative expenses approximated 8.5% of net sales and service fees
for the thirty-nine weeks ended October 1, 1994 and October 2, 1993,
respectively.
Interest expense decreased primarily as a result of lower borrowing
levels during the thirty-nine weeks ended October 1, 1994 as compared to
the thirty-nine weeks ended October 2, 1993.
Patronage dividends in the amount of $1,750,000 have been accrued as of
October 1, 1994 and October 2, 1993. The Company's By-Laws require
that, to the extent permitted by the Internal Revenue Code, patronage
dividends be paid out of earnings from business done with stockholder-
customers in an amount which will reduce net earnings of the Company to
such amount as will result in a 10 percent increase in the Book Value of
<PAGE>
its common stock.
The income tax rate used for calculating the provision for income taxes
for the interim periods was 40.8% in 1994 and 1993.
19
Liquidity and Capital Resources
-------------------------------
The Company's current ratio decreased from 1.64:1 at year-end to 1.44:1
at October 1, 1994. The consolidated long-term debt to equity ratio has
decreased from 1.31:1 at January 1, 1994 to 1.02:1 at October 1, 1994,
primarily due to lower borrowing levels.
Stockholders' equity increased approximately $4.1 million due to
reinvested earnings of $5.3 million, proceeds from the sale of common
stock of $0.2 million and the 1994 patronage dividend payable in common
stock of $1.2 million partially offset by common stock purchases of $2.6
million.
Other Developments
- ------------------
Proposed Merger with Spartan Stores, Inc.
-----------------------------------------
On September 30, 1994, the Boards of Directors of Roundy's and
Spartan Stores, Inc. ("Spartan Stores") announced that on September 29,
1994, the companies signed a Memorandum of Intent to merge their
respective companies. Under the terms of the proposed transaction,
shareholders of each company would exchange the shares that they own in
Spartan Stores or Roundy's for shares of common stock in a new
corporation. Spartan Stores and Roundy's would operate as wholly owned
subsidiaries of the new corporation.
On November 14, 1994, the companies announced that merger
discussions were terminated. With respect to the foregoing, reference
is specifically made to the Current Reports on Form 8-K filed by the
Company with the Commission on October 14, 1994 and November 21, 1994,
which are incorporated in this Prospectus by reference (see
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE").
20
<PAGE>
THE COMPANY
General
- -------
Roundy's, Inc. and its subsidiaries (collectively the "Company")
are engaged principally in the wholesale distribution of food and
nonfood products to supermarkets and warehouse food stores located in
Wisconsin, Illinois, Michigan, Indiana, Ohio, Iowa, Kentucky, Missouri,
Pennsylvania, Tennessee and West Virginia. The Company also owns and
operates 10 retail warehouse food stores under the name "Pick 'n Save,"
one limited assortment food store under the name "Mor For Less" and four
conventional stores under the name "Cardinal Food Gallery" or "Buy Low
Foods." The Company offers its retail customers a complete line of
nationally-known name brand merchandise, as well as a number of its own
private and controlled labels. The Company services 1,015 retail
grocery stores.
In addition to the distribution and sale of food and nonfood
products, the Company provides specialized support services for retail
grocers, including promotional merchandising and advertising programs,
accounting and inventory control, store development and financing and
assistance with other aspects of store management. The Company
maintains a staff of trained retail counselors who advise and assist
individual owners and managers with store operations.
Roundy's, Inc. was incorporated in 1952 under the Wisconsin
Business Corporation Law. The Company's executive offices are located
at 23000 Roundy Drive, Pewaukee, Wisconsin 53072, and its telephone
number is (414) 547-7999.
Operation as a Cooperative
- --------------------------
Roundy's has historically operated its food wholesale business on
a cooperative basis, and therefore determined its Federal income tax
liabilities under Subchapter T of the Internal Revenue Code, which
governs the taxation of corporations operating on a cooperative basis.
Substantially all of the outstanding Class A Common is owned by the
owners ("stockholder-customers") of 140 retail grocery stores serviced
by Roundy's. These stockholder-customers, who own approximately 66% of
the combined total of Class A Common and Class B Common, receive
patronage dividends from Roundy's based on the sales of Roundy's to such
stockholder-customers. The patronage dividend is payable at least 20%
in cash and the remainder in Class B Common. Patronage dividends for
the last three fiscal years were payable 30% in cash and 70% in Class B
Common. See "Payment Of Patronage Dividends". Under Subchapter T of
the Internal Revenue Code, patronage dividends are deducted by Roundy's
in determining taxable income, and are generally taxable to the
stockholder-customers (including the value of the Class B Common), for
Federal income tax purposes.
Roundy's anticipates that in the future it will continue to
operate on a cooperative basis in substantially this manner, although it
is not required to do so and its operation on this basis, as well as its
practice of paying patronage dividends, could be terminated at any time
by action of the Board of Directors.
21
<PAGE>
The subsidiaries of Roundy's do not operate as cooperatives. The
customers serviced by these subsidiaries are independent grocers,
operating 875 retail stores. They do not receive patronage dividends.
In addition, approximately 34% of the outstanding Roundy's Stock is held
by employees or former customers of Roundy's and, although they
participate in the accumulation of equity in the Company, they do not
receive patronage dividends and do not own any Class A Common.
The applicable laws, regulations, rulings and judicial decisions
affecting the determination of whether a corporation is operating on a
cooperative basis for Federal income tax purposes under Subchapter T of
the Internal Revenue Code are subject to interpretation. Although
management believes that Roundy's qualifies as a cooperative for such
purposes, Roundy's has not obtained, and does intend to seek, a ruling
or other assurance from IRS that this is the case. If the Internal
Revenue Service were to challenge the cooperative status of Roundy's,
and if Roundy's were to be unsuccessful in defending such status,
Roundy's might incur a Federal income tax liability with respect to
patronage dividends previously paid to stockholder-customers during the
tax years in question and deducted by Roundy's. Roundy's thereafter
might incur significantly increased consolidated Federal income tax
liabilities in future tax years.
Wholesale Food Distribution
- ---------------------------
The Company distributes a broad range of food and non-food products to
its customers and to corporate-owned retail stores. The Company has
seven product lines: dry grocery, frozen food, fresh produce, meat,
dairy products, bakery goods and general merchandise. The Company has
no long-term purchase commitments and management believes that the
Company is not dependent upon any single source of supply. No source of
supply accounted for more than 5% of the Company's purchases in fiscal
1993.
The Company sells brand name merchandise of unrelated manufacturers,
including most nationally advertised brands. In addition, the Company
sells numerous products under private and controlled labels, including
"Roundy's," "Old Time," "Scot Lad," "Spring Lake," "Perfect Match,"
"Shurfine," "Price Saver," "Buyers' Choice," "Super Choice," "Sunny
Valley," "Sunny Acres," "Sunny Acre Farms," "Classic," "Bonnie Blue,"
"Valu-Check'd," "Gold Coin," and "Meadow Moor Farms." Private label
product sales for the Company accounted for $137,176,000, $148,074,000
and $128,132,000 of the Company's sales during fiscal 1993, 1992, and
1991, respectively.
As described above, Roundy's, exclusive of its subsidiaries, has
historically operated on a cooperative basis with respect to its
wholesale food distribution business. Roundy's cooperative operations
accounted for approximately 36%, 34% and 31% of the Company's
consolidated net sales and service fees for the fiscal years ended
January 1, 1994, January 2, 1993 and December 28, 1991, respectively.
At January 1, 1994, Roundy's had 83 stockholder-customers actively
engaged in the retail grocery business, operating a total of 155 retail
grocery stores. Roundy's cooperative wholesale food business is focused
primarily in Wisconsin, where all but 21 of these 155 retail grocery
stores are located (8 are in Illinois and 13 are in Indiana). At January 1,
1994 the Company (including its subsidiaries) had as customers 975
independent retail food stores and 682 convenience stores. Sales by the
Company to the independent retail food and convenience stores accounted for
55%, 56% and 56% of the Company's consolidated net sales and service fees for
the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991,
respectively.
The Company's primary marketing objective is to be the principal source
of supply to both its stockholder-customers and other independent
retailers. In an 11 state area the Company serviced 155 retail grocery
stores operated by its stockholder-customers, 975 retail stores and 682
convenience stores operated by non-stockholders, and 19 Company-owned and
operated retail stores during the fiscal year ended January 1, 1994. Of the
Company's
22
consolidated net sales and service fees for this period, $459,206,000 or
18.5% were attributable to five customers, with one customer accounting
for $169,193,700 or 6.8% of such sales. Approximately 83% or 941 retail
store customers purchased less than $3,000,000 each from the Company in
the fiscal year ended January 1, 1994. 102 customers owned more than
one retail food store, with one customer owning 13 retail food stores.
The Company generally distributes its various product lines by a fleet
of 270 tractor cabs and 650 trailers and some products are shipped
direct from manufacturers to customer locations. Most customers order
for their stores on a weekly basis and receive deliveries from one to
five days a week. Orders are generally transmitted directly to a
warehouse computer center for prompt assembly and dispatch of shipments.
The Company has retail counselors and merchandising specialists who
serve its customers in a variety of ways, including the analysis of and
recommendation on store facilities and equipment; development of
programs and objectives for establishing efficient methods and
procedures for receipt, handling, processing, checkout and other
operations; informing customers on latest industry trends; assisting and
dealing with training needs of customers; and, if the need arises,
acting as liaison or problem solver between the Company and the
customers. The retail counselors and specialists are assigned a
specific geographic area and periodically visit each customer within
their assigned area.
The Company renders statements to its customers on a weekly basis to
coincide with regular delivery schedules. Roundy's accounts of single
store owners are considered delinquent if not paid on the statement
date. Accounts of multiple store owners are considered delinquent if
not paid within three days of the statement date. Accounts of Roundy's
subsidiaries are considered delinquent if not paid within seven days of
the statement date. The majority of accounts are collected via the
Automated Clearing House ("ACH") system. Delinquent accounts are
charged interest at the rate of prime plus 5%, computed on a daily
basis. During each of the past three fiscal years, the Company's bad
debt expense has been less than .28% of sales. In 1993, 1992 and 1991,
the Company's bad debt expense was $6,738,600, $5,772,900 and
$4,030,300, respectively.
Retail Food Stores
- ------------------
The Company operates three types of corporate stores (high volume-
limited service retail "warehouse" stores, high value-limited assortment
retail stores and conventional retail stores). The high volume-limited
service warehouse stores are designated as "Pick 'n Save" which
generally offer, at discount prices, complete food and general
merchandise lines to the customer, emphasizing higher demand items, with
<PAGE>
stores ranging in square footage from 34,000 to 65,000 square feet per
store. The high value-limited assortment retail stores are designated
as "Mor For Less" which emphasize low cost, high value lines to the
customer, with stores ranging in square footage from 15,000 to 24,000
square feet per store. Conventional retail stores operated under the
name "Cardinal Food Gallery" or "Buy Low Foods" generally emphasize full
service to the customer at competitive prices. These stores range in
square footage from 25,000 to 42,000 square feet. The number of stores
operated by the Company at the end of its three most recent fiscal years
was as follows:
Type of Store 1993 1992 1991
------------- ---- ---- ----
High Value-Limited Assort-
ment and High Volume-Limited
Service Stores (Warehouse
food stores...................... 14 14 19
Conventional Retail Stores....... 5 5 5
23
Sales by Company-operated stores during the three most recent fiscal
years were $238,724,000, $263,189,000 and $304,676,000 for 1993, 1992,
and 1991, respectively. The additional volume of wholesale sales
generated by the retail stores owned and operated by the Company helps
to reduce the overhead of the business and increases the Company's
return to its stockholders.
Employees
- ---------
At the end of fiscal year 1993, the Company had employed full-time 1,183
executive, administrative and clerical employees, 1,463 warehouse and
processing employees and drivers and 563 retail employees and had
employed 1,952 part-time employees. Substantially all of the Company's
warehouse employees, drivers and retail employees are represented by
unions, with contracts expiring in 1995 through 1998. The Company
considers its employee relations to be normal. However, during the
third quarter of 1991 the Company experienced a 12-week labor dispute at
the Milwaukee Division. There have been no other significant work
stoppages during the last five years. Substantially all full-time
employees are covered by group life, accident, and health and disability
insurance.
Competition
- -----------
The grocery industry, including the wholesale food distribution
business, is characterized by intense competition and low profit
margins. The shifting of market share among competitors is typical of
the wholesale food business as competitors attempt to increase sales in
any given market. In order to compete effectively, the Company must
have the ability to meet rapidly fluctuating competitive market prices,
provide a wide range of perishable and nonperishable products, make
prompt and efficient delivery, and provide the related services which
are required by modern supermarket operations.
<PAGE>
The Company competes with a number of local and regional grocery
wholesalers and with a number of major businesses which market their
products directly to retailers, including companies having greater
assets and larger sales volume than the Company. The Company's
customers and the Company's corporate stores also compete at the retail
level with several chain store organizations which have integrated
wholesale and retail operations. The Company's competitors range from
small local businesses to large national and international businesses.
The Company's success is in large part dependent upon the ability of its
independent retail customers to compete with larger grocery store
chains.
In the Milwaukee area, the "Pick 'n Save" group, which consists of both
independently-owned and Company-owned stores, continues to be the market
share leader with 47% of households in the Milwaukee metropolitan
statistical area purchasing "most of their groceries" from "Pick 'n
Save" as reported in the Milwaukee Journal Consumer Analysis Survey
taken in the Fall of 1993.
In competing for customers, emphasis is placed on high quality and a
wide assortment of product, low service fees and reliability of
scheduled deliveries. The Company believes that the range and quality
of other business services provided to retail store customers by the
wholesaler are increasingly important factors, and that success in the
wholesale food industry is dependent upon the success of the Company's
customers who are also engaged in an intensely competitive, low profit
margin industry.
Stockholder-Customers
- ---------------------
Substantially all of Roundy's (but not its subsidiaries) customers are
also stockholders of Roundy's. Roundy's does not require that its
stockholders buy merchandise exclusively from Roundy's or that they
purchase a minimum amount of merchandise in order to remain
24
stockholders; however, for a stockholder-customer to remain a holder of
Class A Common, Roundy's must be such stockholder-customer's principal
source of supply. See "EXCHANGE OF CLASS A COMMON FOR CLASS B COMMON."
In order to continue to be supplied by Roundy's, stockholders must meet
certain minimum order quantities.
Generally, Roundy's will stop selling to a shareholder only when there
has been nonpayment for merchandise delivered or indebtedness payable to
Roundy's or the stockholder defaults in the payment of indebtedness that
Roundy's has guaranteed. In the event of such a termination, Roundy's
will repurchase such person's Common Stock subject to the limitations
described under "REPURCHASE OF SHARES."
Each customer of Roundy's is required to maintain a buying deposit for
each Active Customer it operates in an amount equal to the greater of
$20,000 or the estimated amount of purchases by the Active Customer from
Roundy's over a two week period (subject to Roundy's reserved right to
increase the amount of the deposit required of any stockholder-
customer). This deposit requirement may be satisfied by either a cash
deposit in the specified amount (bearing no interest), or the collateral
pledge of Class A Common and/or Class B Common. In either case, a
<PAGE>
stockholder-customer may make its entire deposit or payment in cash at
the outset of its customer relationship, or it may fulfill part or all
of its buying deposit requirement by means of weekly or monthly
payments, in accordance with an amortization schedule forming a part of
the Buying Deposit Agreement between such stockholder-customer and
Roundy's. See "TERMS OF OFFERING--Buying Deposits; Application Of
Deposited Funds," and Exhibit B attached hereto.
In addition to the buying deposit described above, Roundy's By-Laws
provide that Roundy's has a lien against all outstanding Class A Common
and Class B Common as security for the payment, from time to time and as
often as the same may become due and payable, of any and all obligations
of the holder to Roundy's and no shares of stock held by a stockholder-
customer will be transferred on the books of Roundy's until all
obligations of the stockholder-customer to Roundy's have been paid in
full. To perfect its lien, Roundy's retains physical possession of the
stock certificate and provides the stockholder with a photocopy thereof.
If, at the time of a repurchase of stock from a stockholder-customer,
that person has an unpaid obligation to Roundy's, or to any of its
subsidiaries, the amount of that obligation will be deducted from the
proceeds payable upon the repurchase of that stock. For a description
of other restrictions on transfer of stock contained in the Company's
By-Laws, see "DESCRIPTION OF STOCK--Restrictions on Transfer."
Payment of Patronage Dividends
- ------------------------------
Roundy's is obligated by Article V of its By-Laws, as amended, to pay a
patronage dividend to its stockholder-customers out of and based upon
net earnings from business done by Roundy's with such stockholder-
customers in any fiscal year in an amount which would reduce the net
income of the Company to such amount as will result in an increase of
10% in the Book Value of the outstanding Roundy's Stock as of the close
of such fiscal year (calculated after the payment of patronage
dividends). For example, Book Value at January 1, 1994 was $71.65 per
share. No patronage dividends for the year ending December 31, 1994,
may be paid until $7.17 (10% of $71.65) per share is added to such Book
Value. Based upon the number of shares outstanding at January 1, 1994,
earnings in the aggregate amount of $8,287,100 must be retained before
patronage dividends may be paid. Any increase in Book Value over $7.17
must be distributed in the form of patronage dividends to the extent
permitted by the Internal Revenue Code. Income from the operations of
subsidiaries and other income, from such sources as investments in
securities and the sale or exchange of capital assets, constitutes
income derived from sources other than patronage and is not distributed
as patronage dividends. Consequently, the Book Value may increase by
more than 10% in any year.
25
Previous to the December 13, 1988 and the December 9, 1986 amendments to
the By-Laws, which required the Book Value to increase by 12% and 15%,
respectively, before patronage dividends were to be paid the specified
Book Value increase was 12%. The Board of Directors annually reviews
Article V of its By-Laws to insure the requirements contained therein
are consistent with Company goals. The increases in Book Value of
Roundy's Stock outstanding for the last three years are as follows:
<PAGE>
Fiscal Increase in Book Minimum Requirement
Year Value Per Share Per Article V of By-Laws
- ------ ----------------- ------------------------
1993 10.1% 10%
1992 10.8% 10%
1991 10.6% 10%
There can be no assurance that patronage dividends will be paid in the
future, or, if paid, the amount or form of payment thereof. Roundy's is
under no obligation to pay patronage dividends except to the extent
provided by Article V of its By-Laws, and these By-Law provisions are
subject to modification or repeal at any time by the Board of Directors.
A copy of Article V of the By-Laws, as amended, is attached hereto as
Exhibit C.
Patronage dividends, when paid, are payable in the fiscal year following
the fiscal year in which accrued. At least 20% of the amount of
patronage dividend must be paid in cash, but a greater percentage may be
paid in cash depending on the cash needs of the Company at the time and
the necessity of compliance with the terms of the Company's credit
agreements.
Patronage dividends, if any, are determined on the basis of qualifying
sales by Roundy's to its stockholder-customers. The amount distributed
to any customer-stockholder is therefore based on that customer's sales
volume and not its stock holdings. While stockholder-customers
effecting larger purchases from Roundy's may have a greater stock equity
interest in Roundy's, the voting power of such customers will not
increase in proportion because each stockholder-customer is permitted to
hold only 100 shares of Class A Common for each retail store it
operates, and the shares of Class B Common distributed as patronage
dividends are non-voting shares. (See "DESCRIPTION OF STOCK" and
"VOTING TRUST".)
Sections 1381 through 1388 of the Internal Revenue Code provide that if
20% or more of the total patronage dividend is paid in cash and the
balance in "qualified written notices of allocation", then Roundy's,
when computing its taxable income, may deduct the total patronage
dividend in determining its taxable income. Stockholder-customers who
receive "qualified written notices of allocation" (Class B Common issued
by Roundy's) are, in turn, required to include the full stated dollar
amount of the Class B Common and the cash received in their respective
tax returns as income when received. A "written notice of allocation"
becomes "qualified" when the stockholder-customer consents to take the
Class B Common into its income at the stated dollar amount. This
consent occurs when a person signs a written consent or when such person
becomes a stockholder or remains a stockholder after receiving written
notice and a copy of Roundy's By-Law provision stating that a person
becoming or remaining a stockholder of Roundy's shall be deemed to have
given the requisite consent. Each new stockholder-customer is required
to sign a consent which makes the certificates representing shares of
Class B Common issued to that stockholder qualified written notices of
allocation. The requirement to pay 20% of the patronage dividend in
cash has had no material adverse effect on Roundy's.
The following table sets forth the total amount of patronage dividends
paid to stockholder-customers with respect to purchases during the past
four years, the percentage paid in cash and in securities and the number
of shares of Class B Common issued:
<PAGE>
Securities
---------------------
Year Ended Total Dividend Cash % % No. of Shares
- ----------------- -------------- ------ -- --------------
January 1, 1994 $5,300,700 30 70 45,490
January 2, 1993 5,134,700 30 70 46,259
December 28, 1991 3,304,600 30 70 37,230
December 29, 1990 5,549,200 30 70 58,928
In each year in which patronage dividends are paid, the Board of
Directors determines the percentage to be paid in cash and in Class B
Common shares. This percentage is applied to the dollar amounts
determined as the patronage dividend payable to each respective
stockholder-customer, to determine the number of Class B Common shares
to be distributed to such person. The total dollar amounts payable in
cash and in securities in any given year to all stockholder-customers
will not correspond exactly to the given percentages, principally
because of rounding to avoid the issuance of fractional shares, and
because patronage dividends payable to former stockholder-customers
whose shares have been redeemed during the fiscal year are, in most
cases, paid entirely in cash. Although a minimum of 20% of each
recipient's total annual patronage dividend is required to be paid by
Roundy's in cash, the cash portion may be insufficient, depending upon
the income tax bracket of each recipient, to provide funds for the full
payment of the federal income tax liability incurred by the recipient
with respect to such patronage dividends.
The preceding discussion is only a summary of the most significant
aspects of the taxation of cooperatives under the Internal Revenue Code,
based on the understanding of the management of Roundy's, and should not
be construed as tax advice to any individual stockholder, each of which
should consult its own tax advisor for individual tax advice.
Roundy's may in its sole discretion pay patronage dividends to
nonstockholder-customers. No such dividends have been paid in the last
four years. Persons who are not customers of Roundy's are not entitled
to receive patronage dividends. Computation of the amount of patronage
dividends payable to stockholder-customers in any year is made after the
determination of patronage dividends, if any, payable to nonstockholder-
customers.
For further information with respect to patronage dividends, reference
is made to Article V of Roundy's By-Laws, attached hereto as Exhibit C.
Stockholder-Customer Services
- -----------------------------
Roundy's provides a variety of services described below to its
stockholder-customers to help them maintain a competitive position
within the retail grocery industry. Roundy's charges for certain of
these services and provides other services as a general stockholder-
customer benefit. Such services are generally not offered to customers
who are not stockholders, but upon specific request of such a customer
some of these services may be rendered for a fee, in the discretion of
the officers of Roundy's. Overall, the net income generated by these
services is not material.
<PAGE>
Roundy's services to stockholder-customers include the following:
1. Pricing Services. Substantially all of the stockholder-customers
of Roundy's participate in one of three voluntary pricing program
options. Under each option, the individual retailer retains full resale
pricing discretion.
a. Zone Pricing. For each item Roundy's delivers to
stockholder-customer stores there have been established several
suggested retail price zones. The stockholder-customer elects to have
his merchandise invoiced and priced at one of these zones based on his
competitive situation and location in the trading area. The retail
27
price that he chooses will be indicated on all of his invoices and on up
to ten cases of each item in every delivery. Approximately 45% of the
stockholder-customers participate in the suggested zone pricing service.
b. Custom Pricing. Stockholder-customers who wish to create
and maintain their own unique pricing structure participate in the
"custom pricing" program. Subscribing stockholder-customers provide
Roundy's with the retail price they wish to maintain on each item, and
Roundy's indicates these figures on the invoices and on up to ten cases
of each item in each delivery. The stockholder-customer may update this
pricing structure weekly in accordance with changes in wholesale costs
and competitive activity in his particular market area. Approximately
48% of the stockholder-customers participate in custom pricing.
c. Special Individual Pricing ("SIP"). Those stockholder-
customers desiring a more competitive pricing structure than zone
pricing but with less administrative requirements than custom pricing
may choose a SIP schedule. This allows a stockholder-customer to select
from each of the zones certain categories of merchandise to meet his
particular competitive needs. Suggested retail prices are changed
periodically to reflect changes in the wholesale cost of the item. In
all cases the stockholder-customer may make price changes on merchandise
within their stores as required by their own competitive market
situation. Approximately 7% of the stockholder-customers subscribe to
SIP pricing.
2. Ordering Assistance. Roundy's provides various programs to
increase the speed and efficiency of the order transmittal process. It
sells or rents to retailers electronic units with which the retailer can
transmit his orders electronically by telephone.
3. Point of Sale Host-Computer Support. Upon request, Roundy's will
provide assistance to the retailer and computer support in connection
with the retailer's adoption and use of scanners at the checkout
counter.
4. Velocity Reports. If desired, Roundy's can provide detailed
summaries of all items ordered by the retailer from Roundy's, together
with pricing, prior period, and profit margin data.
5. Store Engineering. Roundy's Store Engineering department aids
stockholder-customers in equipment procurement, store engineering and
site development activities. For a fee, Roundy's will provide plat
<PAGE>
plans, floor plans, elevations and other drawings for new or remodeled
stores, construction cost estimates and design consultation. In
addition, the department can procure many types of store fixtures and
equipment at a price reflecting a volume discount.
6. Customer Loans. Roundy's has maintained a continuous effort to
assist qualified stockholder-customers to remodel and expand existing
retail locations and to develop new retail outlets. The Company's loans
receivable as of January 1, 1994 are summarized in the table below (2).
Outstanding
Number Balance Range of Range of
of Original as of Interest Maturity
Loans Amount Jan. 1,1994 Dates Dates
------ ----------- ------------ ----------- -----------
Inventory,
Equipment
Loans 141 $33,967,000 $25,750,400 Variable(1) 1994-2011
________________
(1) Variable rates based on the Company's cost of borrowing.
(2) The Company has guaranteed customer bank loans and customer
leases amounting to $4,600,100 and $1,170,300, respectively at January
1, 1994. These amounts are not included in the table above.
28
7. Lease Program. The Company has a lease program under which it may
in its discretion lease store sites and equipment for sublease to
qualified customers. This enables customers to compete with large
grocery store chains for store sites at favorable rates. The Company
presently has such real estate and equipment leases with lease terms
from 1994 to 2018. Aggregate lease rentals received under this program
were $18,985,200, $18,590,300 and $17,326,800 in 1993, 1992 and 1991,
respectively.
8. Retail Accounting. Roundy's has a retail accounting program
available for stockholder-customers using its data processing equipment
and expertise. The service includes general ledger, payroll, personnel
reports, sales and income tax returns, accounts payable and financial
reporting. Stockholder-customers may select any one or more parts of
the program or the complete package. Approximately 73 stores
participate in this program. The service charges depend on the services
received by the stockholder-customer.
9. Group Advertising. Roundy's regularly sponsors institutional
brand advertising of Roundy's and Old Time products for all stores on a
continuing basis. This advertising, which may include TV, radio,
newspaper and anniversary sales is intended to help promote the sales of
the Roundy's private label products. All stockholder-customers may
utilize Roundy's Group Advertising Program. Each week these retailers
receive ad planners with suggested feature items together with window
signs, shelf talkers and newspaper layouts. The Group Advertising Staff
assists the stores in the improvement of their local advertising
program.
<PAGE>
10. Bakery Program. Retailers participate in Roundy's bakery program,
taking advantage of centralized buying. Three programs are offered:
rack service stocked by the bakery representative, with and without
returns on unsold merchandise, and drop shipments without returns. All
programs are delivered directly from the supplier to the retailer, but
are billed through Roundy's.
11. Merchandising. Roundy's merchandising service advises customers
on such matters as in-store promotions, internal store arrangements and
shelf utilization.
12. Insurance. Roundy's has a general insurance agency that markets
commercial property and casualty, personal lines, all group products,
and life insurance. The agency primarily specializes in programs for
the food industry.
13. Real Estate. Roundy's has a real estate department that provides
site surveys, financial projections, business valuations, lease
negotiations, and sales of supermarkets and residential properties.
14. Retail Training Programs. Roundy's has instituted and maintained
an ongoing training program for its stockholder-customers. The planned
programs include professionally conducted seminars relating to all
departments of the store and management. The programs are also geared
to present the retailers with up-to-date information on market changes
and new innovations on energy, productivity and scanning. The program
also makes available to the retailer a film library, home study courses,
programmed instructions, manuals and an audiscan program to train fully
all of the retailer's employees.
15. Miscellaneous Advisory Services. Roundy's has retail counselors
and merchandising specialists, who serve the stockholder-customers in a
variety of ways, including the analysis of and recommendations on store
facilities and equipment; development of programs and objectives for
establishing efficient methods and procedures for receipt, handling,
processing, checkout and other operations; informing stockholder-
customers on latest industry trends; assisting in dealing with training
needs of stockholder-customers; and, if the need arises, acting as
liaison or problem-solver between Roundy's and the stockholder-customer.
The retail counselors and specialists are assigned specific geographic
areas and periodically visit each customer within their assigned areas.
29
<PAGE>
Real Estate
- -----------
The Company's principal executive offices are located in Pewaukee,
Wisconsin. These offices are on a 63-acre site.
Wholesale activities are conducted by the Company from the following
warehouses:
Approximate
Warehouse
Location Products Distributed Square Footage
- -------- -------------------- --------------
Wauwatosa, Wisconsin All product lines, 745,000 (O)
except nonfood products
Mazomanie, Wisconsin Dry groceries and 225,000 (L)
nonfood products
Westville, Indiana All product lines, 557,000 (L)
except nonfood products
Lima, Ohio All product lines, 460,000 (O)
except produce and
nonfood products
Eldorado, Illinois Dry groceries and 384,000 (O)
dairy products
Columbus, Ohio All product lines, 320,000 (L)
except produce
Van Wert, Ohio Nonfood products 115,000 (L)
Evansville, Indiana Frozen foods and 94,000 (O)
meat
South Bend, Indiana Frozen foods 84,000 (L)
Muskegon, Michigan All product lines, 215,000 (O)
except produce
O = Owned L = Leased
The Company is subject to regulation by the United States Food and Drug
Administration and to certain state and local health regulations in
connection with the operations of its facilities and its wholesale food
business. The Company has not been subject to any actions brought under
such regulations in the past five years.
Transportation
- --------------
The Company's transportation fleet for distribution operations as of
January 1, 1994, consisted of 270 tractor cabs and 650 trailers and 20
straight delivery trucks. In addition, the Company owns 60 automobiles
and an airplane. Approximately 75% of the fleet is owned by the Company
and the balance is leased.
<PAGE>
Computers
- ---------
The Company owns most of its computers and related peripheral equipment.
The computers are used for inventory control, billing and all other
general accounting purposes. The computer systems are adequate for the
Company's operations.
Legal Proceedings
- -----------------
The Company is not involved in any material litigation as either a
plaintiff or defendant, nor is any other material litigation
contemplated by Roundy's or, to the best of its knowledge, threatened
against it.
30
<PAGE>
MANAGEMENT
The Directors and Executive Officers of Roundy's are as follows:
Position(s) Held with Roundy's
Name Age and Business Experience
- ----------------- ----- ------------------------------------------
John R. Dickson 64 Chairman and Chief Executive Officer since
1993; President and Chief Executive
Officer 1986-1993; Director since 1986
(term expires 1995)
Gerald F. Lestina 52 President and Chief Operating Officer
since 1993; Vice President of Wisconsin
Region 1992-1993; President of Milwaukee
Division 1986-1993; Director since 1991
(term expires 1996)
Robert D. Ranus 54 Vice President and Chief Financial Officer
since 1987; Director since 1987 (term
expires 1997)
David C. Busch 46 Vice President of Administration since
1993; Vice President of Human Resources
1990-1993; Director of Human Resources
1988-1989
Edward G. Kitz 41 Vice President & Treasurer since 1989;
Vice President & Controller 1985-1988
Secretary since 1995
Michael J. Schmitt 46 Vice President, Northern Region since
1992; Vice President and General Manager
of Milwaukee Division 1991; Vice President
of Retail Development 1990-1991; Director
of Retail Development 1988-1990
Roger W. Alswager 46 Vice President of Real Estate and Develop-
ment since 1989; Director of Real Estate
and Development 1986-1988
Londell J. Behm 44 Vice President of Advertising since 1987
John M. Granger 48 Vice President of Management Information
Services since 1990; Vice President of
Management Information Systems, Richfood,
Inc. 1987-1990
Charles H. 52 Vice President, Logistics and Planning
Kosmaler, Jr. since 1993; Vice President of Adminis-
trative Efficiencies 1992-1993; Vice
President and Financial Operating Officer
1990-1991; Vice President of Finance,
Milwaukee Division 1988-1989
Marion H. Sullivan 48 Vice President of Marketing since 1989;
President of Pick 'n Save 1989-1990;
Executive Vice President and Chief
Operating Officer, Pick 'n Save 1987-1988
<PAGE>
Robert E. Bartels 57 Director since 1994 (term expires 1997);
President and Chief Executive Officer of
Martin's Super Markets, Inc., South Bend,
Indiana
31
Charles R. Bonson 48 Director since 1994 (term expires 1997);
President of Bonson's Foods, Inc., Eagle
River, Wisconsin
Gary N. Gundlach 51 Director since 1990 (term expires 1996);
President of G.E.M., Inc., McFarland,
Wisconsin
George C. Kaiser 62 Director since 1986 (term expires 1995);
Chairman and Chief Executive Officer,
Hanger Tight Company since 1988; Chief
Executive Officer, George C. Kaiser and
Co. since 1988; Director of The Baird
Funds, Inc. since 1992
George E. Prescott 47 Director since 1986 (term expires 1995);
President and Chief Executive Officer of
Prescott's Supermarkets, Inc., West Bend,
Wisconsin
Brenton H. Rupple 70 Director since 1993 (term expires 1996);
Retired Chairman of Robert W. Baird & Co.,
Milwaukee, Wisconsin
Directors of Roundy's are elected by class and generally serve three-
year terms; approximately one-third of the Board of Directors is elected
annually. Of the nine members of the Board of Directors, three are
currently Executive Officers of Roundy's (Messrs. Dickson, Lestina and
Ranus) and three are stockholder-customers of Roundy's (Messrs. Bonson,
Gundlach and Prescott). The terms of the Roundy's, Inc. Voting Trust
provide that each year the Trustees will vote to elect one stockholder-
customer, chosen by a plurality vote of the Voting Trust Certificate
Holders, to serve a three-year term as Director; therefore, at any time
there should be three "Retailer Directors" serving.
32
<PAGE>
DESCRIPTION OF STOCK
Authorized Shares
- -----------------
Roundy's is authorized by its Articles of Incorporation to issue 60,000
shares of Class A Common, $1.25 par value, and 2,400,000 shares of Class
B Common, $1.25 par value. On October 1, 1994, 14,200 shares of Class
A Common and 1,153,805 shares of Class B Common were outstanding.
Voting Rights
- -------------
Holders of Class A Common are entitled to one vote for each share held,
on all matters which are submitted to a vote of stockholders.
Stockholders are not entitled to cumulative voting rights. All of the
shares of Class A Common outstanding as of the date of this Prospectus
are owned of record by the Trustees of the Voting Trust. Shares
deposited in the Voting Trust will be voted in the manner provided in
the Voting Trust Agreement. See "VOTING TRUST."
Except as otherwise required by law, holders of Class B Common are not
entitled to vote on any matter submitted to a vote of the stockholders.
The Wisconsin Statutes provide that the holders of the outstanding
shares of a class of stock must be entitled to vote as a class upon any
proposed merger, share exchange, sale of all or substantially all assets
of a company or any amendment to the articles of incorporation which
would, in either case, alter the rights, preferences, or relative status
of the shares in any of a number of specified ways. These are the only
circumstances in which holders of Class B Common are entitled to vote as
stockholders.
Dividend Rights
- ---------------
Holders of Class A Common and Class B Common are entitled to such
dividends as may be declared by the Board of Directors. However,
Roundy's does not expect to pay any dividends in the foreseeable future
other than patronage dividends as described under "THE COMPANY--Payment
of Patronage Dividends." Stockholders who are not customers of Roundy's
are not entitled to receive patronage dividends.
Liquidation Rights
- ------------------
In the event of the voluntary or involuntary liquidation of Roundy's,
the holders of Class A Common and Class B Common will be entitled to
share ratably in the assets of Roundy's remaining after payment of all
Roundy's liabilities.
Repurchase of Shares
- --------------------
Subject to certain limitations, Roundy's is obligated to repurchase
Class A Common and Class B Common upon written request from stockholders
who have terminated or substantially reduced their customer or employee
relationships with Roundy's. Roundy's may, but is not obligated to,
purchase shares held by other stockholders. See "REPURCHASE OF SHARES."
Restrictions on Transfer
- ------------------------
Roundy's Articles of Incorporation provide that no shares of Class A
Common or Class B Common may be transferred for any purpose (including,
but not limited to, sales, gifts, testate or intestate inheritance or
pledge) unless and until (i) such transfer has received the prior
<PAGE>
written consent of Roundy's or (ii) Roundy's has agreed in writing to
repurchase such shares and has failed to satisfy such obligation.
33
The certificates representing Class A and Class B Common bear a legend
setting forth the foregoing limitations on the resale of such shares.
Other Restrictions and Rights
- -----------------------------
The Class A Common and Class B Common, the full consideration for which
has been paid, will not be subject to any further calls or assessments
by Roundy's. However, Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law imposes on stockholders personal liability in an amount
equal to the par value of their respective shares, or in an amount equal
to the consideration paid for such shares in the case of no-par value
stock, for all debts owing to employees of Roundy's for services
performed for Roundy's, not exceeding six months' service in any one
case. In a split decision without precedential value, the Supreme Court
of Wisconsin has affirmed a lower court ruling holding that "par value,"
for purposes of this statute, should be construed to mean the
"subscription price paid for the stock."
Roundy's has a first lien upon any shares of its stock held by any
stockholder for the amount of any indebtedness payable to the Company by
such stockholder, and no sale or transfer of any such stock shall be
made until all such indebtedness to the Company shall have been paid in
full. See "THE COMPANY--Stockholder-Customers."
Transfer Agent
- --------------
Roundy's acts as its own transfer agent for its Class A and Class B
Common.
Reports to Stockholders
- -----------------------
Roundy's will furnish annual reports to its stockholders within 120 days
after the end of each fiscal year which will include financial
statements audited by independent certified public accountants.
34
<PAGE>
VOTING TRUST
Each purchaser of Class A Common is requested, but not required, to
deposit such shares in the Roundy's, Inc. Voting Trust (the "Trust").
Such requests will be made only by means of a Prospectus relating to the
Voting Trust Certificates.
The Trust was established in August, 1971, (amended and restated in 1983
and amended in 1986), as the successor to an initial voting trust
created at the time of the organization of Roundy's and will terminate
in 1997. The main purpose for the establishment of the Trust, and its
predecessor, was to insure the stability of management necessary to
obtain long-term warehouse and other financing. At present, the Trust
owns of record all of the outstanding Class A Common.
Stockholders depositing shares of Class A Common in the Trust will
receive Voting Trust Certificates evidencing beneficial ownership of the
number of shares deposited. Such certificates are not negotiable or
transferrable.
The Voting Trust Agreement authorizes the Trustees to vote all shares
deposited in the Trust, in their discretion, for the election of all but
three of the Directors (there are currently nine Directors). On other
matters submitted to a vote of stockholders (including the election of
one Director each year), the Trustees are required to vote the shares
deposited in the Trust as a block as directed by a vote of the holders
of outstanding Voting Trust Certificates (with each share of Class A
Common in the Trust entitling the depositor thereof to one vote). With
respect to the election of the Director to be elected by the Voting
Trust Certificate holders, the candidate receiving the greatest number
of votes from among the Voting Trust Certificate holders shall receive
all of the votes represented by shares held in the Voting Trust. On all
other matters submitted to a vote of the Voting Trust Certificate
holders, the shares of Class A Common held in the Voting Trust shall be
voted as directed by a majority of the Voting Trust Certificate holders
(except that, with respect to certain fundamental matters submitted to a
vote of stockholders, including the merger of Roundy's, liquidation or
sale of all its assets, the requisite approval is increased to a two-
thirds majority of Voting Trust Certificate holders unless such action
has been recommended by the Board of Directors). Because shares
deposited in the Trust are voted as a block, a holder of Voting Trust
Certificates who opposes a transaction such as a merger may have no
statutory right to dissent from such transaction and demand payment for
his shares of Class A Common deposited in the Voting Trust. A meeting
of Voting Trust Certificate holders is held prior to each meeting of
stockholders for the purpose of presenting to the Certificate holders
the matters to be voted upon at the stockholders' meeting. The format
of the Voting Trust Certificate holders' meeting follows that of a
customary meeting of stockholders with respect to notice and the
opportunity to vote in person or by proxy.
Persons holding certificates issued with respect to shares deposited in
the Trust (as amended and restated) prior to December 16, 1983 have an
annual right to withdraw such shares from the Trust. All other Voting
Trust Certificate holders must wait until their shares of Class A Common
have been on deposit for five full years before becoming entitled to
withdrawal rights. No more than one-third of the total number of shares
of Class A Common outstanding may be withdrawn in any single calendar
year. The Trustees give notice of this right of withdrawal to each
person entitled to withdraw shares on or before January 31 of each year,
<PAGE>
and all withdrawals must take place during the months of February or
March.
All cash dividends received by the Trustees on the shares of Class A
Common deposited in the Trust will be paid by them to the Voting Trust
Certificate holders. Any stock dividends payable in Class A Common will
be retained by the Trustees and a like number of additional Voting Trust
Certificates will be issued to the depositors. In the event of a
35
liquidation of Roundy's, all money or property received by the Trustees
with respect to the stock deposited in the Trust will be distributed
among the depositors in proportion to their respective stock interests
in the Trust.
The Voting Trust Agreement provides that there shall be seven Trustees,
consisting of two "Officer Trustees" (currently Gerald F. Lestina serves
as one Officer Trustee - the other Officer Trustee position is vacant,
but is expected to be filled in the near future), who shall be officers
of Roundy's; two "Independent Trustees" (currently Robert R. Spitzer and
Charles E. Stenicka), who shall be persons having executive business
management experience who are independent from the management and
stockholders of Roundy's; and three "Retailer Trustees" (currently John
A. McAdams, Duane G. Tate and David A. Ulrich), who shall be
stockholder-customers of Roundy's but may not be Directors. The term of
an Officer Trustee is determined by the Board of Directors, and an
Officer Trustee automatically ceases to be a Trustee upon ceasing to be
an officer of Roundy's. Retailer Trustees and Independent Trustees
serve five-year terms. Successor trustees are appointed by majority
vote of the remaining Trustees.
Mr. Stenicka is President of MR--The Management Association, Inc. Mr.
McAdams is President and stockholder of McAdams, Inc., a stockholder-
customer of Roundy's. Mr. Tate is President and principal stockholder
of Tate Foods, Inc., a stockholder-customer of Roundy's. Mr. Ulrich is
principal stockholder of Mega Marts, Inc., a stockholder-customer of
Roundy's. For information concerning Mr. Lestina see "MANAGEMENT."
The Voting Trust may be deemed to be an "affiliate" of Roundy's, and the
Trustees of the Voting Trust, as a group, may be considered to be
"parents" of Roundy's, as these terms are defined in the Securities Act
of 1933, as amended, and the regulations thereunder.
LEGAL MATTERS
The legality of the Class A Common and Class B Common offered hereby has
been passed upon by Whyte Hirschboeck Dudek S.C., 111 East Wisconsin
Avenue, Suite 2100, Milwaukee, Wisconsin 53202.
EXPERTS
The consolidated financial statements of Roundy's, Inc. and subsidiaries
and the related consolidated financial statement schedules as of January 1,
1994 and January 2, 1993 and for each of the three years in the period ended
January 1, 1994 included and incorporated by reference in this
prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are included and
<PAGE>
incorporated by reference herein, and have been so included and
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
INDEMNIFICATION
Roundy's has, in its By-Laws, established a policy indemnifying officers
and directors for liabilities and expenses arising out of their actions
in their capacities as officers and directors. This would include
indemnification for certain liabilities on the part of officers and
directors under the Securities Act of 1933 (the "Securities Act"). It
is the public policy of the state of Wisconsin, as expressed in Section
180.0859 of the Wisconsin Business Corporation Law, to require or permit
indemnification against claims arising under federal law and state
securities laws.
However, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling Roundy's pursuant to the foregoing provisions, Roundy's has
been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
36
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Roundy's, Inc. and Subsidiaries Audited Financial Statements:
Independent Auditors' Report F-2
Statements of Consolidated Earnings for each of
the three years in the period ended January 1, 1994 F-3
Consolidated Balance Sheets at January 1, 1994
and January 2, 1993 F-4
Statements of Consolidated Stockholders' Equity
for each of the three years in the period
ended January 1, 1994 F-6
Statements of Consolidated Cash Flows for each of
the three years in the period ended January 1, 1994 F-7
Notes to Financial Statements F-8
Unaudited Financial Statements of Roundy's, Inc. and Subsidiaries:
Consolidated Balance Sheets -
October 1, 1994 and January 1, 1994 F-14
Statements of Consolidated Earnings -
Thirteen Weeks and Thirty-Nine Weeks
Ended October 1, 1994 and October 2, 1993 F-15
Statements of Consolidated Cash Flows -
Thirty-Nine Weeks Ended October 1, 1994
and October 2, 1993 F-16
Notes to Consolidated Financial Statements F-17
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of Roundy's, Inc.:
We have audited the accompanying consolidated balance sheets of Roundy's, Inc.
and its subsidiaries as of January 1, 1994 and January 2, 1993 and the related
statements of consolidated earnings, stockholders' equity and cash flows for
each of the three years in the period ended January 1, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the companies at January 1, 1994
and January 2, 1993 and the results of their operations and their cash flows
for each of the three years in the period ended January 1, 1994 in conformity
with generally accepted accounting principles.
As discussed in Notes 1 and 9 to the financial statements, the companies
changed their method of accounting for income taxes effective December 29,
1991, to conform with Statement of Financial Accounting Standards No. 109.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 28, 1994
F-2
<PAGE>
STATEMENTS OF CONSOLIDATED EARNINGS
As of January 1, 1994 and January 2, 1993
1993 1992 1991
-------------- -------------- --------------
Revenues:
Net sales and service fees ..$2,480,254,200 $2,491,292,900 $2,534,418,400
Other-net ................... 6,526,600 3,290,100 5,047,300
-------------- -------------- --------------
2,486,780,800 2,494,583,000 2,539,465,700
-------------- -------------- --------------
Costs and Expenses:
Cost of sales ............... 2,248,336,000 2,252,976,400 2,291,962,200
Operating and administrative 206,253,600 211,949,500 217,096,400
Interest .................... 12,138,100 13,128,900 15,580,800
-------------- -------------- --------------
2,466,727,700 2,478,054,800 2,524,639,400
-------------- -------------- --------------
Earnings Before Patronage
Dividends ................ 20,053,100 16,528,200 14,826,300
Patronage Dividends ......... 5,300,700 5,134,700 3,304,600
-------------- -------------- --------------
Earnings Before Income Taxes 14,752,400 11,393,500 11,521,700
-------------- -------------- --------------
Provision (Credit) for
Income Taxes:
Current-Federal ........ 5,797,000 4,521,500 4,027,800
-Jobs and other
tax credits .. (485,500) (452,100) (485,100)
-State .......... 1,740,200 1,237,000 1,174,700
-Deferred ....... (1,078,000) (606,000) (9,000)
-------------- -------------- --------------
5,973,700 4,700,400 4,708,400
-------------- -------------- --------------
Earnings Before Extraordinary
Item and Cumulative Effect
of Accounting Change ..... 8,778,700 6,693,100 6,813,300
Extraordinary Loss on Early
Extinguishment of Long-
Term Debt (Net of Income
Tax Benefit of $511,000).. (751,000)
Cumulative Effect of
Accounting Change ....... 660,000
-------------- -------------- --------------
Net Earnings.................$ 8,027,700 $ 7,353,100 $ 6,813,300
============== ============== ==============
[FN]
See notes to financial statements.
<PAGE>
CONSOLIDATED BALANCE SHEETS
As of January 1, 1994 and January 2, 1993
ASSETS 1993 1992
------------ ------------
CURRENT ASSETS:
Cash and short-term investments $ 25,845,600 $ 19,912,000
Notes and accounts receivable,
less allowance for losses,
$8,766,500 and $7,578,200.... 99,826,500 96,420,200
Merchandise inventories......... 153,169,500 164,719,900
Prepaid expenses ............... 6,956,800 4,347,400
Future income tax benefits...... 4,281,800 4,576,800
------------ ------------
Total current assets......... 290,080,200 289,976,300
------------ ------------
OTHER ASSETS:
Notes receivable................ 14,894,700 19,497,200
Other real estate............... 7,343,000 6,540,700
Deferred expenses and other..... 7,885,100 8,654,500
------------ ------------
Total other assets........... 30,122,800 34,692,400
------------ ------------
PROPERTY AND EQUIPMENT:
Land............................ 5,100,600 4,647,200
Buildings....................... 39,668,000 40,529,900
Equipment....................... 71,508,900 76,275,100
Capitalized equipment leases.... 2,300,000 2,300,000
Leasehold improvements.......... 11,939,300 16,005,900
------------ ------------
130,516,800 139,758,100
Less accumulated depreciation
and amortization:
Owned....................... 68,721,000 72,602,300
Leased...................... 1,906,700 1,676,600
------------ ------------
Property and equipment-net 59,889,100 65,479,200
------------ ------------
$380,092,100 $390,147,900
============ ============
[FN]
See notes to financial statements.
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY:
1993 1992
------------ ------------
CURRENT LIABILITIES:
Notes payable...................$ 139,600 $ 502,400
Current maturities of
long-term debt............... 8,920,700 7,542,800
Accounts payable................ 130,187,600 127,775,500
Accrued expenses................ 36,778,500 33,867,100
Income taxes.................... 410,900 1,135,300
------------ ------------
Total current liabilities.... 176,437,300 170,823,100
Long-Term Debt, Less Current
Maturities...................... 113,044,700 135,420,100
Deferred Income Taxes.............. 600,000 2,184,000
Other Liabilities.................. 3,944,000 3,147,800
------------ ------------
Total liabilities ........... 294,026,000 311,575,000
Commitments and Contingencies (Note 10)
STOCKHOLDERS' EQUITY:
Common stock:
Voting (Class A)............. 19,400 20,100
Non-voting (Class B)......... 1,425,400 1,427,000
----------- -----------
Total common stock....... 1,444,800 1,447,100
Amount related to recording
minimum pension liability.... (308,700)
Patronage dividends payable in
common stock................. 3,263,000 3,210,000
Additional paid-in capital...... 20,388,900 16,867,000
Reinvested earnings............. 61,278,100 57,048,800
------------ ------------
Total stockholders' equity.... 86,066,100 78,572,900
------------ ------------
$380,092,100 $390,147,900
============ ============
<PAGE>
<TABLE>
STATEMENTS of CONSOLIDATED STOCKHOLDERS' EQUITY
For the years ended January 1, 1994, January 2, 1993 and December 28, 1991
<CAPTION>
Common Stock
------------------------------------- Patronage
Class A Class B Dividends Additional
-------------------------------------- Payable in Paid-in Reinvested
Shares Amount Shares Amount Common Stock Capital Earnings
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 29, 1990 17,200 $21,500 1,146,745 $1,433,400 $3,414,000 $11,682,600 $48,684,200
Net earnings........... 6,813,300
Common stock issued..... 1,100 1,400 75,845 94,800 (3,414,000) 3,910,600
Common stock purchased..(2,300) (2,900) (69,106) (86,300) (852,400) (2,995,600)
Patronage dividends
payable in common stock 2,212,000
---------------------------------------------------------------------------
Balance, December 28, 1991 16,000 20,000 1,153,484 1,441,900 2,212,000 14,740,800 52,501,900
Net earnings............ 7,353,100
Common stock issued..... 1,200 1,500 52,184 65,200 (2,212,000)
Common stock purchased..(1,100) (1,400) (64,110) (80,100) (903,100) (2,806,200)
Patronage dividends
payable in common stock 3,210,000
---------------------------------------------------------------------------
Balance, January 2, 1993 16,100 20,100 1,141,558 1,427,000 3,210,000 16,867,000 57,048,800
Net earnings............ 8,027,700
Common stock issued..... 700 900 82,193 102 700 (3,210,000) 5,058,100
Common stock purchased..(1,300) (1,600) (83,449) (104,300) (1,536,200) (3,798,400)
Patronage dividends
payable in common stock 3,263,000
---------------------------------------------------------------------------
Balance, January 1, 1994 15,500 $19,400 1,140,302 $1,425,400 $3,263,000 $20,388,900 $61,278,100
===========================================================================
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS of CONSOLIDATED CASH FLOWS
For the years ended January 1, 1994, January 2, 1993 and December 28, 1991
1993 1992 1991
------------ ------------ ------------
Cash Flows From Operating
Activities:
Net earnings.................$ 8,027,700 $ 7,353,100 $ 6,813,300
Adjustments to reconcile
net earnings to net
cash flows provided by
operating activities:
Depreciation and
amortization............. 12,913,200 13,350,100 12,892,700
Extraordinary loss on
early extinguishment
of debt.................. 751,000
Cumulative effect of
accounting change........ (660,000)
Allowance for losses....... 6,738,600 5,772,900 4,030,300
Gain on sale of property
and equipment and other
productive assets........ (3,680,300) (1,105,700) (1,804,800)
Patronage dividends payable
in common stock.......... 3,263,000 3,210,000 2,212,000
(Increase) decrease in operating
assets, net of the effects
of disposition:
Accounts receivable....... (13,819,500) (3,462,100) (6,676,200)
Merchandise inventories... 11,038,700 (2,273,400) (1,789,000)
Prepaid expenses.......... (2,105,000) (219,900) (359,800)
Future income tax benefits 295,000 (1,218,000) (293,000)
Other real estate......... (802,300) 245,200 456,300
Deferred expenses and other
assets.................... (27,700) (330,700) (38,000)
Increase (decrease) in operating
liabilities, net of the
effects of disposition:
Accounts payable.......... 7,715,000 (4,432,700) (5,528,100)
Accrued expenses.......... 772,900 1,893,000) 1,982,900
Income taxes.............. (724,400) (16,700) 432,300
Deferred income taxes..... (1,373,000) 232,000 157,000
Other liabilities......... 796,200 757,800 (1,325,300)
------------ ------------ ------------
Net cash flows provided by
operating activities 29,779,100 15,308,900 11,162,600
------------ ------------ ------------
Cash Flows From Investing Activities:
Capital expenditures......... (13,354,800) (15,332,300) (11,894,000)
Proceeds from sale of property
and equipment and other
productive assets.......... 11,017,900 3,096,800 14,574,300
(Increase) decrease in notes
receivable................. 4,602,500 (3,976,500) (7,034,400)
------------ ------------ ------------
Net cash flows provided by
(used in) investing activities 2,265,600 (16,212,000) (4,354,100)
------------ ------------ ------------
<PAGE>
Cash Flows From Financing Activities:
Proceeds from long-term
borrowings................. 45,000,000 48,000,000 8,475,000
Principal payments and
defeasance of long-term
debt....................... (68,637,400) (51,862,400) (9,627,600)
Increase in notes payable and
current maturities of long-
term debt.................. 1,015,100 909,200 194,100
Proceeds from sale of common
stock...................... 1,951,700 884,000 870,000
Common stock purchased....... (5,440,500) (3,790,800) (4,214,400)
------------ ------------ ------------
Net cash flows (used in)
financing activities....... (26,111,100) (5,860,000) (4,302,900)
------------ ------------ ------------
Net Increase (Decrease) in Cash
and Short-Term Investments... 5,933,600 (6,763,100) 2,505,600
Cash And Short-Term Investments,
Beginning Of Year............ 19,912,000 26,675,100 24,169,500
------------ ------------ ------------
Cash And Short-Term Investments,
End Of Year..................$ 25,845,600 $ 19,912,000 $ 26,675,100
============ ============ ============
Cash Paid During The Year For:
Interest.....................$ 13,100,200 $ 14,482,100 $ 14,918,900
Income Taxes................. 7,805,700 5,703,300 4,478,200
[FN]
See notes to financial statements.
<PAGE>
NOTES to FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Description of business-The company is primarily engaged in the distribution of
food products and related non-food items through retail supermarkets, many of
which are owned by stockholder-customers or the company.
Fiscal year-The company's fiscal year is the 52 or 53 week period ending the
Saturday nearest to December 31. The years ended January 1, 1994 and December
28, 1991 included 52 weeks. The year ended January 2, 1993 included 53 weeks.
Consolidation practice-The financial statements include the accounts of the
company and its subsidiaries. Significant intercompany balances and
transactions are eliminated.
Short-term investments-Short-term investments (maturing within three months)
are recorded at cost which approximates market value.
Inventories-Inventories are recorded at the lower of cost, on the first-in,
first-out method, or market.
Depreciation-Depreciation and amortization of property and equipment are
computed primarily on the straight-line method over their estimated useful
lives, which are generally thirty-one years for buildings, three to ten years
for equipment and five to twenty years for leasehold improvements. Equipment
under capitalized leases are amortized over the terms of the respective leases.
Income Taxes-Prior to 1992, the company provided deferred income taxes in
accordance with Statement of Financial Accounting Standards No. 96. Effective
December 29, 1991, the company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," which requires an asset and
liability approach to financial accounting and reporting for income taxes.
Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income.
2. DISPOSITION
On August 28, 1993, the company completed the sale of its dairy and ice cream
operations. The sale price of $14,976,500 consisted of cash of $9,649,600 and
liabilities assumed by the purchaser of $5,326,900. The sale resulted in a
pretax gain of $3,254,100 which is included in other revenues in the 1993
Statement of Consolidated Earnings.
3. PATRONAGE DIVIDENDS
The company's By-Laws require that for each of the last three fiscal years, to
the extent permitted by the Internal Revenue Code, patronage dividends are to
be paid out of earnings from business done with stockholder-customers in an
amount which will reduce the net earnings of the company to an amount which
will result in a 10% increase in the book value of its common stock. The
dividends are payable at least 20% in cash and the remainder in Class B common
stock. Dividends for the last three fiscal years were payable 30% in cash.
4. NOTES RECEIVABLE
The company extends long-term credit to certain independent retailers it serves
to be used primarily for store expansion or improvements. Loans to independent
retailers are primarily collateralized by the retailer's inventory and
equipment. Interest rates are generally in excess of the prime rate and terms
of the notes are up to 10 years. Included in current notes and accounts
receivable are amounts due within one year totalling $9,661,400 and $10,755,200
at January
<PAGE>
1, 1994 and January 2, 1993, respectively. Long-term notes receivable at
January 1, 1994 and January 2, 1993 are net of an allowance for losses of
$1,483,000.
5. LONG-TERM DEBT
Long-term debt, exclusive of current maturities, consists of the following at
the respective year-ends:
1993 1992
------------ ------------
Mortgage note payable at 9.75%, due 1994...... $ 1,579,200
Other long-term debt, 9% to 10%, due 1995
to 2006.......................................$ 1,162,700 2,741,800
Obligations under capitalized leases........... 1,310,800 1,738,400
Industrial development bonds, 73% of the
prime rate, due 1995 to 1997.................. 521,200 1,610,700
Senior unsecured notes payable:
10.31%, due 1995 to 1999...................... 15,250,000 18,750,000
11.26%, due 1995 to 1999...................... 25,000,000
9.26%, due 1995 to 2001...................... 17,500,000 20,000,000
7.57% to 8.26%, due 1995 to 2008............. 22,300,000 23,000,000
6.94%, due 1997 to 2003...................... 45,000,000
Notes payable under revolving credit
agreements at 6%, due 1997.................... 10,000,000 41,000,000
----------- ------------
Total..................................$113,044,700 $135,420,100
============ ============
Interest rates noted above are at January 1, 1994. The prime interest rate was
6.0% at January 1, 1994 and January 2, 1993.
At January 1, 1994, $60,000,000 was available to the company under its
revolving credit agreements. Certain property and equipment aggregating
approximately $3,000,000 are pledged as collateral to long-term debt and other
obligations at January 1, 1994. The loan agreements include, among other
provisions, minimum working capital and net worth requirements and limit stock
repurchases and total debt outstanding.
In December 1993, the company completed a private placement of $45,000,000 of
6.94% Senior Unsecured Notes. Proceeds were used to prepay the $25,000,000 of
11.26% outstanding Senior Unsecured Notes and to reduce notes payable under
revolving credit agreements. Proceeds used to prepay the 11.26% Senior
Unsecured Notes were placed in an irrevocable trust and, as a result, this debt
is considered to be defeased and the liability has been removed from the
consolidated financial statements. The extraordinary loss on the early
extinguishment of the 11.26% Senior Unsecured Notes totalled $1,262,000, before
applicable income tax benefit of $511,000.
Repayment of principal on long-term debt outstanding, excluding obligations
under capitalized leases (see Note 10), is as follows:
1994............................................................$ 8,512,500
1995............................................................ 6,929,400
1996............................................................ 7,681,600
1997............................................................ 25,508,300
1998............................................................ 11,656,800
Thereafter...................................................... 59,957,800
<PAGE>
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The company's financial instruments, as defined in Statement of Financial
Accounting Standards No. 107, "Disclosures About Fair Value of Financial
Instruments," consist primarily of accounts and notes receivable, accounts
payable, notes payable and long-term debt. The carrying amounts for accounts
and notes receivable, accounts payable and notes payable approximate their fair
values. Based on the borrowing rates currently available to the company for
long-term debt with similar terms and maturities, the fair value of long-term
debt, including current maturities, is approximately $126,700,000.
7. COMMON STOCK
The authorized capital stock of the company is 60,000 shares of Class A common
stock and 2,400,000 shares of Class B common stock with a par value of $1.25 a
share. Inactive customers are required to exchange Class A voting stock held
for Class B non-voting stock.
The issuance and redemption of common stock is based on the book value thereof
as of the preceding year-end. The year-end book value was $71.65, $65.10 and
$58.75 for 1993, 1992 and 1991, respectively. The company is obligated, upon
request, to repurchase common stock held by inactive customers or employees.
The amount available for such repurchases in any year is subject to limitations
under certain loan agreements.
Effective November 1991, the Board of Directors adopted the 1991 Stock
Incentive Plan (the "Plan") under which up to 75,000 shares of Class B common
stock may be issued pursuant to the exercise of stock options. The Plan also
authorizes the grant of up to 25,000 stock appreciation rights ("SARs").
Options and SARs may be granted to senior executives and key employees of the
company by the Executive Compensation Committee of the Board of Directors. No
options or SARs may be granted under the Plan after November 30, 2001.
Option and SAR transactions are as follows:
Options SARs Price
------- -------- -------------
Outstanding, December 29, 1990..... 0 0 -
Granted......................... 30,000 10,000 $53.10
------- -------- -------------
Outstanding, December 28, 1991..... 30,000 10,000 53.10
Granted......................... 15,000 5,000 58.75
------- -------- -------------
Outstanding, January 2, 1993....... 45,000 15,000 53.10-58.75
Granted......................... 15,000 5,000 65.10
Exercised....................... (15,333) 53.10-65.10
Cancelled....................... (1,500) (1,500) 53.10-58.75
------- -------- -------------
Outstanding, January 1, 1994....... 43,167 18,500 $53.10-$65.10
======= ======== =============
Available for grant after
January 1, 1994................. 16,500 6,500
======= ========
Options granted become exercisable based on the vesting rate which ranges from
20% at the date of grant to 100% eight years from the date of grant. As of
January 1, 1994, options were exercisable for 21,015 shares at $53.10-$65.10
per share.
<PAGE>
SAR holders are entitled, upon exercise of a SAR, to receive cash in an
amount equal to the excess of the book value per share of the company's common
stock as of the last day of the company's fiscal year immediately preceding the
date the SAR is exercised over the base price of the SAR. SARs granted become
exercisable based on the vesting rate which ranges from 20% on the last day of
the fiscal year of the grant to 100% eight years from the last day of the
fiscal year of the grant. Compensation expense was not material in 1993, 1992
and 1991. As of January 1, 1994, 5,950 SARs were exercisable at $53.10-$65.10
per SAR.
In the event of a change in control of the company, all options and SARs
previously granted and not exercised, become exercisable.
8. EMPLOYEE BENEFIT PLANS
Substantially all non-union employees of the company and employees of its
subsidiaries are covered by defined benefit pension plans. Benefits are based
on either years of service and the employee's highest compensation during five
of the most recent ten years of employment or on stated amounts for each year
of service. The company intends to annually contribute only the minimum
contributions required by applicable regulations.
The following sets forth the funded status of the plans at January 1, 1994 and
January 2, 1993:
1993 1992
----------------------------------------------------
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
----------------------------------------------------
Actuarial present value of:
Vested benefit obligation $18,843,000 $3,234,100 $14,475,700 $2,126,900
=========== ========== =========== ==========
Accumulated benefit
obligation............ $21,103,200 $3,425,600 $15,400,500 $2,186,500
=========== ========== =========== ==========
Projected benefit
obligation............ $25,118,300 $3,425,600 $17,815,300 $2,186,500
Plan assets (primarily
listed stocks and bonds)
at market value........ 25,688,200 1,978,300 21,775,800 1,772,500
----------- ---------- ----------- ----------
Projected benefit obligation
(in excess of) or less
than plan assets....... 569,900 (1,447,300) 3,960,500 (414,000)
Unrecognized net (gain)
or loss................ (688,100) 519,700 (3,920,800) (337,700)
Prior service cost not yet
recognized in net
periodic pension cost.. 595,700 73,100 639,700 3,000
Unrecognized net asset.... (1,404,300) (1,575,500)
Adjustment required to
recognize minimum
liability................. (592,800)
----------- ----------- ----------- ----------
Accrued pension cost...... $ (926,800)$(1,447,300) $ (896,100) $ (748,700)
=========== =========== =========== ==========
<PAGE>
The assumptions used in the accounting were as follows:
1993 1992
-------- --------
Discount rate.......................................... 7.5% 9.5%
Rate of increase in compensation levels................ 4.0% 5.0%
Expected long-term rate of return of assets............ 9.0% 9.5%
The changes in actuarial assumptions in 1993 resulted in a $6,047,000 increase
in the projected benefit obligation in 1993, and is expected to result in an
increase in the 1994 pension expense of approximately $750,000. In 1993, in
accordance with Statement of Financial Accounting Standards No. 87, "Employers'
Accounting for Pensions," the company has recorded a minimum pension liability
of which $308,700, net of income taxes, is reflected as a reduction of
stockholders' equity.
Net pension cost for the foregoing defined benefit plans includes the following
components:
1993 1992 1991
----------- ----------- -----------
Service cost-benefits earned during
the year...............................$ 1,314,800 $ 1,263,200 $ 1,217,300
Interest on projected benefit obligation 1,881,000 1,658,900 1,583,500
Actual return on plan assets............ (2,251,200) (2,007,400) (1,573,400)
Net amortization and deferral........... (247,500) (321,200) (134,700)
----------- ----------- ----------
Net pension cost........................$ 697,100 $ 593,500 $ 1,092,700
=========== =========== ===========
The company and its subsidiaries also participate in various multi-employer
plans which provide defined benefits to employees under collective bargaining
agreements. Amounts charged to pension expense for such plans were $3,437,500,
$3,500,400 and $3,465,800 in 1993, 1992 and 1991, respectively. Also, the
company has a defined contribution plan covering substantially all salaried and
hourly employees not covered by a collective bargaining agreement. Total
expense for the plan amounted to $513,700, $508,200 and $480,000 in 1993, 1992
and 1991, respectively.
Effective January 3, 1993, the Company adopted the provisions of the Statement
of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," which covers health care and
other welfare benefits provided to retirees and Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" issued by the Financial Accounting Standards Board. The adoption of
these statements, using the immediate recognition basis, did not have an effect
on the accompanying consolidated financial statements.
9. INCOME TAXES
Effective December 29, 1991, the company adopted Statement of Financial
Standards No. 109, "Accounting for Income Taxes." The company elected to
reflect the effect of this accounting principle change as a cumulative effect
adjustment as of December 29, 1991.
<PAGE>
Federal income tax at the statutory rates of 35% in 1993 and 34% in 1992 and
1991 and income tax expense as reported, are reconciled as follows:
1993 1992 1991
---------- ---------- ------------
Federal income tax at
statutory rates.........$5,163,300 $3,873,800 $ 3,917,400
State income taxes,
net of federal tax
benefits................ 1,131,100 816,400 775,300
Jobs and other tax
credits................. (485,500) (452,100) (485,100)
Other-net................ 164,800 462,300 500,800
---------- ---------- -----------
Income tax expense.......$5,973,700 $4,700,400 $4,708,400
========== ========== ===========
Deferred (prepaid) taxes on earnings result from the recognition of certain
items in different periods for tax and financial reporting purposes. The
sources and tax effects of these differences are as follows:
1993 1992 1991
------------ ------------ -----------
Depreciation and amortization..$ (423,000) $ 251,000 $1,065,000
Inventory valuation methods.... 59,000 91,000 (202,000)
Disposal of property and
equipment..................... (114,000) (47,000) (520,000)
Allowance for doubtful accounts 697,000 (1,215,000) 42,000
Loss contingencies............. (261,000) (213,000) (105,000)
Employee benefits.............. (1,015,000) 651,000 (224,000)
Other-net...................... (21,000) (124,000) (65,000)
----------- ---------- ----------
Total..........................$(1,078,000) $ (606,000) $ (9,000)
============ =========== ===========
<PAGE>
The approximate tax effects of temporary differences at January 1, 1994 and
January 2, 1993 are as follows:
<TABLE>
<CAPTION>
1993 1992
----------------------------------- ------------------------------------
Assets Liabilities Total Assets Liabilities Total
---------- ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts..............$1,652,000 $1,652,000 $2,349,000 $ 2,349,000
Inventories ........... $ (466,200) (466,200) $ (407,200) (407,200)
Employee benefits...... 2,296,000 2,296,000 1,954,000 1,954,000
Accrued expenses not
currently deductible.. 799,000 799,000 538,000 538,000
Other.................. 1,000 1,000 143,000 143,000
---------- ------------ ------------ ---------- ------------ - ----------
Current................ 4,748,000 (466,200) 4,281,800 4,984,000 (407,200) 4,576,800
---------- ------------ ------------ ---------- ------------ - ----------
Allowance for doubtful
accounts.............. 582,000 582,000 582,000 582,000
Depreciation and
amortization.......... (2,998,000) (2,998,000) (3,502,000) (3,502,000)
Employee benefits...... 1,745,000 1,745,000 668,000 668,000
Other.................. 71,000 71,000 68,000 68,000
---------- ------------ ------------ ---------- ------------ -----------
Noncurrent............. 2,398,000 (2,998,000) (600,000) 1,318,000 (3,502,000) (2,184,000)
---------- ------------ ------------ ---------- ------------ -----------
Total..................$7,146,000 $(3,464,200) $3,681,800 $6,302,000 $ (3,902,200) $ 2,392,800
========== ============ ============ ========== ============= ===========
</TABLE>
<PAGE>
10. LEASE OBLIGATIONS AND CONTINGENT LIABILITIES
Rental payments and related subleasing rentals under operating leases are as
follows:
RENTAL PAYMENTS
------------------------ SUBLEASING
MINIMUM CONTINGENT RENTALS
----------- ------------ ------------
1991........................... $40,735,700 $ 403,000 $17,326,800
1992........................... 36,778,100 363,400 18,590,300
1993........................... 36,675,800 398,800 18,985,200
Contingent rentals may be paid under certain store leases on the basis of the
store's sales in excess of stipulated amounts.
Future minimum rental payments under long-term leases are as follows at
January 1, 1994:
OPERATING CAPITALIZED
LEASES LEASES
------------ ---------
1994......................................... $ 35,161,300 $ 566,100
1995......................................... 33,253,900 566,100
1996......................................... 29,355,800 460,300
1997......................................... 25,424,900 160,300
1998......................................... 23,748,400 84,300
Thereafter................................... 224,569,100 282,200
------------ ---------
Total........................................ $371,513,400 2,119,300
Amount representing interest...................................400,300
---------
Present value of net minimum lease payments................. 1,719,000
Current portion.............................................. 408,200
---------
Long-term portion......................................... $1,310,800
==========
Total minimum rentals to be received in the future under non-cancelable
subleases as of January 1, 1994 are approximately $275,335,000.
The company has guaranteed customer bank loans and customer leases amounting to
$4,600,100 and $1,170,300, respectively, at January 1, 1994.
11. EARNINGS PER SHARE
Earnings per share are not presented because they are not deemed to be
meaningful. See Notes 3 and 7 relating to patronage dividends and common stock
repurchase requirements.
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
CONSOLIDATED BALANCE SHEETS
October 1, 1994 and January 1, 1994
October 1, 1994 January 1, 1994
(Unaudited) (Audited)
ASSETS --------------- ---------------
CURRENT ASSETS:
Cash and short-term investments....... $ 29,776,700 $ 25,845,600
Notes and accounts receivable, less
allowance for losses, $7,734,800
and $8,766,500, respectively........ 98,970,600 99,826,500
Merchandise inventories............... 165,946,800 153,169,500
Prepaid expenses...................... 3,593,300 6,956,800
Future income tax benefits............ 5,381,500 4,281,800
------------ ------------
Total Current Assets............... 303,668,900 290,080,200
------------ ------------
OTHER ASSETS:
Notes receivable...................... 15,457,400 14,894,700
Deferred expenses and other........... 14,103,200 15,228,100
------------ ------------
Total Other Assets................. 29,560,600 30,122,800
------------ ------------
PROPERTY AND EQUIPMENT - Net............... 64,829,600 59,889,100
------------ ------------
$398,059,100 $380,092,100
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable......................... $ 139,600
Current maturities of long-term debt.. $ 6,462,300 8,920,700
Accounts payable...................... 161,449,900 130,187,600
Accrued expenses...................... 43,259,500 36,778,500
Income taxes.......................... 410,900
------------ ------------
Total Current Liabilities 211,171,700 176,437,300
LONG-TERM DEBT, LESS CURRENT MATURITIES.... 92,004,000 113,044,700
DEFERRED INCOME TAXES...................... 600,000 600,000
OTHER LIABILITIES.......................... 4,140,800 3,944,000
------------ ------------
Total Liabilities.................. 307,916,500 294,026,000
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A).................... 17,700 19,400
Non-Voting (Class B)................ 1,442,300 1,425,400
------------ ------------
Total Common Stock................. 1,460,000 1,444,800
<PAGE>
Amount related To recording minimum
pension liability......................... (308,700) (308,700)
Patronage dividends payable in
common stock............................. 1,225,000 3,263,000
Additional paid-in capital................. 22,991,200 20,388,900
Reinvested earnings........................ 64,775,100 61,278,100
------------ ------------
Total Stockholders' Equity......... 90,142,600 86,066,100
------------ ------------
$398,059,100 $380,092,100
============ ============
See Notes to Financial Statements.
<PAGE>
<TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
OCTOBER 1, 1994 AND OCTOBER 2, 1993
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 1, 1994 October 2, 1993 October 1, 1994 October 2, 1993
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees............ $601,014,400 $616,396,500 $1,831,506,300 $1,843,036,100
Other - net........................... 748,000 658,000 1,968,900 1,937,100
-------------- -------------- --------------- ---------------
601,762,400 617,054,500 1,833,475,200 1,844,973,200
-------------- -------------- --------------- ---------------
COSTS AND EXPENSES:
Cost of sales......................... 543,984,600 559,297,300 1,660,488,700 1,669,510,200
Operating and administrative.......... 51,864,900 51,392,700 155,274,200 156,013,000
Interest.............................. 2,307,600 2,956,000 7,118,200 9,098,600
------------- -------------- --------------- ---------------
598,157,100 613,646,000 1,822,881,100 1,834,621,800
------------- -------------- --------------- ---------------
EARNINGS BEFORE PATRONAGE DIVIDENDS..... 3,605,300 3,408,500 10,594,100 10,351,400
PATRONAGE DIVIDENDS..................... 500,000 500,000 1,750,000 1,750,000
------------- -------------- --------------- ---------------
EARNINGS BEFORE INCOME TAXES............ 3,105,300 2,908,500 8,844,100 8,601,400
PROVISION FOR INCOME TAXES.............. 1,266,000 1,199,000 3,604,000 3,505,000
------------- -------------- --------------- ---------------
NET EARNINGS............................ $ 1,839,300 $ 1,709,500 $ 5,240,100 $ 5,096,400
============= ============== =============== ===============
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
ROUNDY'S, INC. AND SUBSIDIARIES
===============================
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 1, 1994 AND OCTOBER 2, 1993
(UNAUDITED)
Thirty-Nine Weeks Ended
October 1, 1994 October 2, 1993
Cash Flows From Operating Activities: --------------- ---------------
Net earnings.......................... $ 5,240,100 $ 5,096,400
Adjustments to reconcile net earnings
to net cash provided by operating
activities:.........................
Depreciation and amortization........ 9,484,400 9,912,600
Allowance for losses................. 1,787,300 2,313,600
Gain on sale of assets............... (127,200) (75,000)
Patronage dividends payable in
common stock....................... 1,225,000 1,225,000
(Increase) Decrease in Operating Assets:
Accounts receivable.................. (931,400) (15,701,500)
Merchandise inventories.............. (12,777,300) (6,794,100)
Prepaid expenses..................... 3,363,500 486,900
Future income tax benefits........... (1,099,700) (638,900)
Other real estate.................... 170,400 100,200
Deferred expenses and other assets... 616,000 (8,000)
Increase (Decrease) in Operating
Liabilities:
Accounts payable.................... 31,262,300 26,664,900
Accrued expenses.................... 6,481,000 3,793,300
Income taxes........................ (410,900) (1,135,300)
Other liabilities................... 196,800 241,100
-------------- ------------
Net cash flows provided by (used in)
operating activities................... 44,480,300 25,481,200
-------------- ------------
Cash Flows from Investing Activities:
Capital Expenditures.................. (14,428,700) (10,232,200)
Proceeds from sale of property and
equipment........................... 469,500 6,510,500
Increase in notes receivable.......... (562,700) 1,384,900
-------------- ------------
Net cash flows provided by (used in)
investing activities.................... (14,521,900) (2,336,800)
-------------- ------------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings....
Principal payments of long-term debt.. (21,040,700) (15,272,100)
Increase (decrease) in notes payable
and current maturities of
long-term debt...................... (2,598,000) 6,669,000
Proceeds from sale of common stock.... 214,600 273,300
Common stock purchased................ (2,603,200) (2,958,900)
-------------- ------------
Net cash flows provided by (used in)
financing activities.................... (26,027,300) (11,288,700)
Net Increase (Decrease) in Cash and
Short-term Investments.................. 3,931,100 11,855,700
-------------- ------------
<PAGE>
Cash and Short-term Investments,
Beginning of Period.................... 25,845,600 19,912,000
-------------- ------------
Cash and Short-term Investments,
End of Period.......................... $ 29,776,700 $ 31,767,700
============= ============
Cash paid during the period: - Interest $ 7,199,200 $ 10,027,400
- Income Taxes 4,668,000 5,384,600
[FN]
See Notes to Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1) In the opinion of the Company, the accompanying
consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to
present fairly the financial position as of October 1, 1994
and January 1, 1994, and the results of operations for the
thirteen and thirty-nine weeks ended October 1, 1994 and
October 2, 1993.
2) The results of operations for the thirteen and thirty-nine
weeks ended October 1, 1994 and October 2, 1993 are not
necessarily indicative of the results to be expected for the
full fiscal year.
3) Earnings per share are not presented because they are not
deemed to be meaningful.
<PAGE>
Exhibit A
ROUNDY'S, INC.
Subscription Agreement
----------------------
The undersigned customer/employee/director of Roundy's, Inc.
("Roundy's") hereby subscribes for and agrees to purchase _________
shares of Class A Common Stock and/or _____________ shares of Class B
Common Stock of Roundy's, at the price per share set forth below, being
equal to the Book Value per share of such Common Stock as of the close
of the most recently ended fiscal year of Roundy's, as determined by
Roundy's audited financial statements and adjusted for subsequent stock
dividends and stock splits. The undersigned acknowledges receipt of a
Prospectus dated ______________, 19__ relating to Roundy's offer of the
Class A or Class B Common Stock subscribed for hereby.
The undersigned represents that the undersigned is purchasing such
securities for the undersigned's own account, for investment only and
not for resale or distribution. The undersigned further acknowledges and
understands that in no event may the Class A nor Class B Common Stock be
pledged, transferred or hypothecated without Roundy's prior written
consent. The undersigned acknowledges and agrees to be bound by the
provisions of Section 7.11 of Roundy's By-Laws (as the same may be
amended and in effect from time to time) imposing limitations on the
ownership of Roundy's Class A Common Stock and providing for the
conversion of shares of Class A Common Stock into shares of Class B
Common Stock, upon the occurrence of a "Customer/Shareholder
Termination" as that term is defined in Roundy's By-Laws.
This paragraph applies only to subscriptions by customers with a
Buying Deposit Deficit: The shares purchased hereby shall become a part
of the undersigned's Buying Deposit pursuant to the Buying Deposit
Agreement previously entered into by the undersigned for the Store
Location (Customer Number) set forth below. If so indicated below, the
undersigned hereby directs Roundy's to apply the amount set forth below,
from funds previously deposited by the undersigned with Roundy's,
against the subscription price provided for herein.
Roundy's, by accepting this Subscription Agreement, agrees to be
bound by the Statement of Policy Regarding Repurchase of Stock set forth
as Exhibit D to Roundy's Prospectus, as such Statement of Policy may be
amended from time to time.
________________________________
Legal Name of Subscriber
Applicable Federal
Identification or
Social Security Number
______________________ By ____________________________
(Name) (Title)
Dated______________, 19____ Customer Number _________
(If applicable)
Mailing Address:
________________________________
City ___________________________
State __________________Zip_____
<PAGE>
Price per Share: $___________________
Total Subscription Price: $___________________
Amount to be applied from funds on deposits: $___________________
Cash remitted with this Subscription Agreement: $___________________
Agreement Accepted:
Roundy's, Inc.
By:________________________________ Date:_____________________________
A-1
<PAGE>
Exhibit B
ROUNDY'S, INC.
Buying Deposit Agreement
------------------------
The undersigned customer of Roundy's, Inc. ("Roundy's") hereby
agrees to establish a Buying Deposit with Roundy's in the total amount
set forth below, and to make monthly installment payments of such Buying
Deposit to Roundy's as set forth below. The amount of the Buying
Deposit has been computed as an amount equal to the estimated amount of
purchases by the undersigned from Roundy's, with respect to the store
location identified below ("Store Location") over a two week period,
with a minimum amount of $20,000. The total Buying Deposit will be
established by periodic payments to be made by the undersigned to
Roundy's in accordance with the amortization schedule set forth below.
It is understood that Roundy's shall have the right to increase the
amount of the Buying Deposit at any time, in which event the
amortization schedule set forth below shall be adjusted accordingly.
To fulfill its obligation to establish such Buying Deposit, the
undersigned may from time to time subscribe for and purchase shares of
Roundy's Class A and/or Class B Common Stock pursuant to Roundy's Policy
Regarding Issuance and Sales of Roundy's Stock (adopted December 7,
1993; effective January 1, 1994, as amended) (a copy of which the
undersigned acknowledges having received as an exhibit to the Prospectus
dated March ____, 1995 for Roundy's Common Stock (the "Prospectus"),
which has been provided to the undersigned). The undersigned
acknowledges that such Policy may be amended, modified, suspended or
terminated at any time and from time to time in the discretion of
Roundy's Board of Directors, and that by accepting this Buying Deposit
Agreement, Roundy's has not undertaken any obligation to issue or sell
any shares of its stock to the undersigned except to the extent provided
in such Policy, as the same may exist and be in effect from time to
time.
Installment payments made to Roundy's from time to time will be
retained by Roundy's as a part of the undersigned's Buying Deposit, and
will be applied to the undersigned's purchase of shares of Roundy's
Common Stock only at such times and in such amounts as the undersigned
may designate (subject to the preceding paragraph and the Policy
described therein) pursuant to a subscription agreement executed by the
undersigned in the form attached hereto.
Roundy's, by accepting this Buying Deposit Agreement, agrees to be
bound by the Statement of Policy Regarding Repurchase of Stock set forth
as Exhibit D to the Prospectus, as such Statement of Policy may be
amended from time to time.
The undersigned understands that patronage dividends, if any, paid
to the undersigned in Class B Common Stock from and after the date
hereof, until the Buying Deposit is satisfied, will be credited against
the installment payments of the undersigned's Buying Deposit in the
inverse order of the due dates of such installments, at a price per
share equal to the Book Value of such shares as of the fiscal year-end
immediately preceding the date of their issuance.
<PAGE>
Upon termination of the customer status of the undersigned with
Roundy's for any reason or if the undersigned at any time shall not have
made payments due from it to Roundy's in the manner and within the time
limits established by Roundy's, Roundy's shall have the right to
reimburse itself out of the undersigned's Buying Deposit for any amounts
owed to Roundy's by the undersigned.
A-2
<PAGE>
Exhibit B
If the undersigned has previously entered into any prior Buying
Deposit Agreement(s) for the Store Location, this Buying Deposit
Agreement supersedes and cancels such prior Agreement(s) in their
entirety.
_______________________ ________________________________
Applicable Federal Legal Name of Subscriber
Identification or
Social Security Number
_______________________ By ____________________________
(Name) (Title)
Dated _________________, 19___ Customer Number
Mailing Address:
________________________________
City ___________________________
State___________________________
Zip Code __________________
BUYING DEPOSIT - MONTHLY INSTALLMENT PAYMENTS
---------------------------------------------
1. Total Buying Deposit _______________________
2. Less down payment _______________________
3. Balance to be amortized _______________________
4. Estimated weekly retail sales _______________________
Check Monthly Buying Deposit Installment
Weekly Retail Sales One 1st Year 2nd Year 3rd Year
- ------------------- ----- -------------------------------------
$ 40,000 - $100,000 _____ $ 300 $ 400 $ 500
$100,000 - $200,000 _____ 750 900 1,050
Over $200,000 _____ 1,000 1,250 1,500
Payment beginning (nearest 15th day of month following down payment)
Approved:_____________________________________________
Retail Counselor, Roundy's, Inc.
Accepted:_____________________________________________
Sales Manager, Roundy's, Inc.
A-3
<PAGE>
Exhibit C
Article V of By-Laws of Roundy's, Inc., as amended by the Board of
Directors on December 12, 1989
FISCAL YEAR
ACCOUNTING AND PATRONAGE REBATES
--------------------------------
The corporation is obligated to its Common stockholders on a
patronage basis or bases for all amounts received by it resulting from
sales to them as defined and limited herein.
5.1 Patronage Dividends. Patronage dividends shall accrue to
Class A Common stockholders of the corporation out of net earnings from
business done with such stockholders and shall be determined and
distributed for each fiscal year pursuant to existing provisions of the
Internal Revenue Code; provided further that patronage dividends of the
corporation will be determined on the basis of the net sales of the
corporation to each Class A Common stockholder and paid in an amount
which will reduce net income of the corporation to such amount as will
result in an increase of ten percent (10%) in the net Book Value (as
determined by the corporation's independent certified public accoun-
tants) of the corporation's outstanding shares as of the close of such
fiscal year. The computation of the amount of patronage dividends
payable to Class A Common stockholders shall be made after the
determination of patronage dividends payable to
nonstockholder-customers.
5.2 Determination of Patronage Dividends. Patronage dividends
shall be determined from the records of the corporation as soon as
practicable after the close of the corporation's fiscal year, and the
Class A Common stockholders shall be promptly advised of the amount of
their respective patronage dividend and the method of payment of such
patronage dividend.
5.3 Consent. Each person who hereafter becomes a Class A Common
stockholder of this corporation and each Class A Common stockholder of
this corporation on the effective date of this By-Law who continues as a
Class A Common stockholder after such date shall, by such act alone,
consent that the amount of any distributions with respect to his
patronage occurring after January 3, 1976 which are made in written
notices of allocation (as defined in Section 1388 of the Internal
Revenue Code) and which are received by him from the corporation, will
be taken into account by him at their stated dollar amounts in the
manner provided in Section 1385(a) of the Internal Revenue Code in the
taxable year in which such written notices of allocation are received by
him.
5.4 Payment of Patronage Dividends.
(a) Patronage dividends are payable in the fiscal year
following the fiscal year in which accrued, in money, qualified written
notices of allocation (as defined by the Internal Revenue Code) or other
property (except non-qualified written notices of allocation as defined
by the Internal Revenue Code) provided, however, that at least twenty
percent (20%) of the amount of a patronage dividend shall be paid in
money or by qualified check as defined by the Internal Revenue Code.
A-4
<PAGE>
5.5 Corporate Accounting and Fiscal Year.
(a) The accounts of the corporation shall be kept on the
accrual basis and reflect assets, liabilities, stockholders' equities
and operations in accordance with generally accepted accounting
principles.
(b) The fiscal year of the corporation shall be on a 52-53
week basis ending on the Saturday nearest to December 31st as that
method permits.
5.6 Patronage Dividends to Nonstockholders. The corporation may,
in its sole discretion, enter into written agreements obligating itself
to pay patronage dividends to nonstockholder-customers.
A-5
<PAGE>
Exhibit D
ROUNDY'S, INC. POLICY RELATING TO REDEMPTION OF STOCK
BY INACTIVE CUSTOMER SHAREHOLDERS AND FORMER EMPLOYEES
ARTICLE 1
Repurchase of Shares by Corporation
-----------------------------------
1.01 Agreement to Repurchase. Upon the terms and subject to the
conditions set forth in this Policy (including the applicable provisions
of Articles 2 and 3, below), the Corporation shall be obligated to
repurchase its shares of Class A Common Stock and Class B Common Stock
after proper request by the holder thereof, or his or its legal
representative, at any time after the occurrence of a Customer/
Shareholder Termination with respect to such stock or an Employee/
Shareholder Termination with respect to such holder.
1.02 Repurchase in Increments. The Corporation's obligation to
repurchase stock shall accrue, subject to the other terms and conditions
of this Policy, in annual 20% increments during the five year period
beginning on the Repurchase Request Date with respect to such stock.
Beginning on the first anniversary date of the Repurchase Request Date,
the Corporation shall become obligated to purchase in accordance
herewith 20% of the aggregate number of shares of Class A and Class B
Common Stock as to which a proper repurchase request has been received.
Such percentage shall be increased to 40% on the second anniversary date
of the Repurchase Request Date, 60% on the third anniversary date, 80%
on the fourth anniversary date and 100% on the fifth anniversary date of
the Repurchase Request Date. Regardless of the foregoing, in the event
that a Customer/Shareholder Termination or an Employee/Shareholder
Termination occurs as a result of the death of the shareholder and the
estate of such shareholder specifically so elects by written notice to
the Secretary of the Corporation within 180 days thereafter, the
repurchase of not more than the first $50,000 in value of stock shall be
accelerated to the date 180 days after receipt by the Secretary of such
written election. Each share shall continue to be outstanding for all
purposes until actually repurchased.
1.03 Calculation of Repurchase Price. The repurchase price for
each share of stock of the Corporation shall be the Book Value of such
share at the date of repurchase.
1.04 Form of Repurchase Request. A proper repurchase request for
purposes hereof shall consist of a written notification to the Secretary
of the Corporation specifying the number of shares to be repurchased,
the reason for such repurchase request, and the date or dates on which a
Customer/Shareholder Termination or Employee/Shareholder Termination
occurred with respect to the stock covered by such repurchase request.
Such repurchase request must be made in accordance with the procedures
specified in Section 2.02, below.
1.05 Acknowledgment By Corporation of Repurchase Request.
Subject to the conditions set forth in the Policy (including the
applicable provisions of Articles 2 and 3, below), the Secretary shall
promptly acknowledge in writing receipt of a repurchase request. Such
acknowledgment shall set forth, among other things, the Repurchase
Target Dates with respect to the shares covered by the repurchase
request and the Book Value of the shares at the Repurchase Request Date,
and shall enumerate such documents and instruments as may be reasonably
<PAGE>
required to be delivered to assure the Secretary that the Corporation
will receive unencumbered title to the shares to be repurchased.
Neither such acknowledgement nor any other communication made by the
Corporation pursuant to this Policy shall be deemed to be an agreement
to purchase shares for purposes of this Policy, except subject to all
the terms and conditions hereof. After such acknowledgement has been
given by the Secretary, a stock repurchase request shall be irrevocable
except with the written consent of the Board of Directors.
A-6
<PAGE>
1.06 Payment of Repurchase Price. Subject to the terms and
conditions of this Policy, the Corporation shall repurchase shares
subject to a proper repurchase request by payment of the full purchase
price in cash or by check within 10 days after the later of the
Repurchase Target Date or the date on which the appropriate stock
certificates have been received, in negotiable form, together with any
such other documents or instruments as the Secretary shall have
requested in its acknowledgement notice given under Section 1.05, all in
form reasonably acceptable to the Secretary; provided, however, that in
no event shall the Corporation be obligated to repurchase shares within
90 days after the end of its fiscal year. By mutual agreement of the
Corporation and the shareholder, such shares may be repurchased at any
time prior to the Repurchase Target Date, but only if no other
shareholder has been assigned an earlier Repurchase Target Date and such
shares have not yet been actually repurchased.
1.07 Limitation on Corporation's Obligation to Repurchase. The
Corporation's obligation to repurchase shares hereunder is subject to
(i) all restrictions which may be imposed by applicable law from time to
time, and (ii) the limitations (if any) on repurchases of shares
contained in any lending or other agreements of the Corporation in force
from time to time. In the event the Corporation is precluded during a
given period of time from repurchasing shares which are the subject of a
repurchase request because of such limitations or if required
repurchases are delayed for any other reason (in either case, a
"Suspension"), repurchases shall be resumed promptly thereafter in the
order of the Repurchase Target Dates which occurred during the period of
the Suspension, regardless of the dates the repurchase requests were
received and such suspended repurchases shall be made prior to
repurchases becoming due on any subsequent Repurchase Target Date.
Notwithstanding the foregoing provisions, stock having a repurchase
price of not in excess of $25,000 per shareholder may, in the sole
discretion of the Corporation, be repurchased on an accelerated basis in
cases of demonstrated hardship.
1.08 Authority Reserved.
(a) No provision of this Policy shall be construed as
limiting the Corporation's authority to repurchase outstanding shares of
its stock at the discretion of the Board of Directors or the officers on
any other terms at any time; provided however, that no such
discretionary purchases shall occur if a Repurchase Target Date has
passed with respect to shares required to be repurchased under this
Policy and such shares have not yet been repurchased.
(b) No provision of this Policy shall be construed as
limiting the authority of the Board of Directors to amend, revise or
rescind this Policy. This Policy does not create, and should not be
understood as creating, any vested rights or contractual obligations of
the Corporation except, and only to the extent, that no amendment,
revision or rescission shall reduce the Repurchase Price payable by the
Corporation for shares with respect to which the Repurchase Request Date
precedes the date of the resolution of the Board of Directors effecting
such amendment, revision or rescission.
1.09 Adjustments. For all purposes hereof, in the event of a
stock split or similar capital change (excluding regular stock issuances
associated with the Corporation's patronage dividends), equitable
adjustment will be made to the number of shares to be repurchased and
the repurchase price. A-7
<PAGE>
ARTICLE 2
Additional Conditions to Repurchase Obligations
-----------------------------------------------
2.01 Notification to Corporation of Certain Termination Events.
Each shareholder (or his or its legal representative) shall, as soon as
possible after the occurrence of a Customer/Shareholder Termination or
an Employee/Shareholder Termination (occurring otherwise than as a
result of the death or retirement of the employee), give written notice
of the same to the Secretary of the Corporation, stating the nature and
date of such event. If it shall come to the attention of the
Corporation that such an event has occurred and no such notice has been
received, the Secretary shall give written notice of the same to the
record holder of such shares. Any determination so made in good faith
by the Corporation, including any determination as to the date upon
which a retail food store became or ceased to be an Active Customer, or
upon which a Customer/Shareholder Termination or an Employee/Shareholder
Termination occurred, shall be final and binding on all persons.
2.02 Timing of Repurchase Requests. Requests by shareholders to
have their shares of stock redeemed or repurchased pursuant to this
policy will be accepted by the Corporation when made in accordance with
the following procedures:
(a) When Repurchase Requests May Be Made. Requests by a
shareholder to have its stock repurchased or redeemed will be accepted
only if made during one of three (3) "window" periods each year -- after
the first, second and third fiscal quarters of the Corporation,
consisting of the last two weeks of May, August and November,
respectively. These "window" periods are subject to closure or
modification by management or the Board of Directors of the Corporation
if, in the best judgment of management or the Board, it would be
inappropriate for the Corporation to be engaged in the purchase or sale
of its shares at such time. Requests for redemption will be deemed to
have been duly made during these periods if they are received in writing
at the Corporation's Pewaukee office during the window period or, if
received thereafter, if they were postmarked during the window period.
(b) Authority Of The Board To Suspend Or Deviate From
These Requirements. The Board of Directors reserves at all times the
authority to alter, suspend or deviate from the requirements of this
Section 2.02, in its discretion, to the extent it determines such action
to be appropriate.
(c) Effective Date. The provisions of this Section 2.02
will be effective commencing January 1, 1994.
2.03 Limitations on Ownership of Class A Common Stock.
(a) No person may directly or indirectly beneficially own
shares of Class A Common Stock except a Person who or which directly or
indirectly owns an Active Customer or the trustees of a voting trust
formed by and for the benefit of such Persons. No Person may directly
or indirectly beneficially own more than 100 shares of Class A Common
Stock, except that (i) a Person owning and operating (or controlling)
more than one Active Customer at different locations may own not more
than 100 shares of Class A Common Stock for each such Active Customer,
and (ii) the trustees of a voting trust as set forth in the preceding
sentence may be the record holders of such number of shares as may be
owned in the aggregate by the depositors thereof.
<PAGE>
(b) Any holder of shares of Class A Common Stock shall
immediately present his or its certificate(s) representing the same to
the Secretary of the Corporation, in negotiable form, upon the
occurrence of a Customer/Shareholder Termination with respect to an
Active Customer owned and operated (or controlled) by such shareholder.
A-8
In the event such shareholder has theretofore owned more than 100 shares
of Class A Common Stock, there shall be presented to the Corporation 100
of such shares for each such Active Customer as to which a Customer/
Shareholder Termination has occurred. Upon receipt of such
certificate(s), the Corporation shall issue to and in the name of the
record holder thereof a replacement certificate for a like number of
shares of Class B Common Stock. In the event any holder shall fail to
surrender such certificates to the Corporation within thirty (30) days
after the Customer/Shareholder Termination, the Corporation may, at any
time thereafter, by written notice to the record holder thereof, deem
such shares of Class A Common Stock to have been converted into a like
number of shares of Class B Common Stock; and thereafter, such shares of
Class A Common Stock shall not be deemed outstanding for any purpose and
the certificate(s) therefor shall evidence only the right to receive a
certificate representing a like number of shares of Class B Common Stock
upon proper presentation to the Corporation in negotiable form. The
obligations of a shareholder hereunder to surrender and exchange shares
of Class A Common Stock shall be binding upon the legal representatives
or successors or such shareholder, any purported transferee, and any
nominee or trustee of a voting trust holding shares of Class A Common
Stock for the benefit of such shareholder, upon notice from the
Corporation or otherwise that a Customer/Shareholder Termination has
occurred.
ARTICLE 3
Effective Date
--------------
3.01 Effective Date. The repurchase provisions set forth in
Article 1 of this Policy shall not apply to shares as to which
repurchase requests have been filed before January 1, 1991, provided,
however, that if the second, third, fourth or fifth anniversary dates of
a Repurchase Request Date occur on or after January 1, 1991, the
repurchase provisions set forth in Article 1 shall apply to the 20%
increments which would be purchased on such anniversary dates as if this
Policy had been in effect on the Repurchase Request Date.
3.02 Applicability.
(a) The repurchase provisions set forth in Article 1 of
this Policy shall not apply:
(1) With respect to the shares owned by any person
who directly, indirectly or beneficially owns shares of Class A Common
Stock in violation of the limitations on ownership contained in Section
2.02(a), above (the "Ownership Limitation") if the shares of Class A
Common Stock are determined by the Corporation to have been held in
violation of such Ownership Limitations for a period of ninety (90) days
or more.
<PAGE>
(2) With respect to any shares owned by any person
who is a Claimant, as defined herein.
(b) In the event that a shareholder who filed a repurchase
request on or after January 1, 1991, subsequently becomes subject to the
provisions contained in Sections 3.02(a)(1) or (2), the Corporation
shall be under no obligation at any time thereafter to repurchase (or
continue to repurchase, if the repurchase in increments had already
commenced) any shares from such shareholder.
A-9
<PAGE>
ARTICLE 4
Definitions
-----------
4.01 Whenever used in this Policy;
(a) "Active Customer" means a retail food store whose
principal source of supply is purchases from the Corporation.
(b) "Book Value" at any given date means the Book Value of
a share of Common Stock (determined according to the annual financial
statements prepared by the Corporation, as audited and certified by the
Corporation's independent auditors) as of the end of the fiscal year
immediately preceding the fiscal year in which such date occurs.
(c) "Claimant" means any shareholder of the Corporation who
has asserted and not irrevocably withdrawn such assertion or is
otherwise then asserting (in or in anticipation of any litigation or
other proceeding) a challenge (1) to the authority of the Corporation or
its Board of Directors to adopt any pending Redemption Policy or to have
adopted the then current Redemption Policy or any prior Redemption
Policy or to amend or revise any of the same or (2) to the
enforceability or validity or the Corporation's interpretation or
application of any provision of the then current or any prior Redemption
Policy.
(d) "Customer/Shareholder Termination" occurs whenever an
Active Customer owned and operated (or controlled) by a shareholder of
the Corporation either (A) ceases to be an Active Customer, or (B)
ceases to be owned and operated (or controlled) by such shareholder,
whether by reason of the death, adjudication of incompetency or complete
retirement from business by reason of age or disability of such
shareholder (if an individual), the dissolution or termination of such
shareholder (if a Person other than an individual), adjudication in
bankruptcy, transfer of the Active Customer or the entity owning or
controlling it, or otherwise. In the event the above shall occur with
respect to one or more but not all Active Customers owned and operated
(or controlled) by a single shareholder of the Corporation, a
Customer/Shareholder Termination shall be deemed to have occurred with
respect to that fraction of each class of Common Stock owned by such
shareholder as is equal to the fraction produced by dividing the number
of Active Customers owned and operated (or controlled) by such
shareholder after such event(s) by the number of Active Customers so
owned and operated (or controlled) immediately before such event(s).
(e) "Employee/Shareholder Termination" occurs, with respect
to a shareholder who is an employee of the Corporation, upon the
cessation of such person's employment relationship with the Corporation
for any reason.
(f) "Person" includes any individual, corporation,
partnership, joint venture, trust, estate or any other legal entity.
(g) "Redemption Policy" means any written policy adopted by
the Board of Directors of the Corporation pursuant to Section 3.4 of the
Articles of Incorporation setting forth terms, conditions or provisions
under which the Corporation will (during the term of such policy)
repurchase, redeem or otherwise acquire shares of the Corporation's
stock from shareholders of the Corporation.
<PAGE>
(h) "Repurchase Request Date" with respect to a share of
stock means the date of actual receipt by the Secretary of the
Corporation of a written request for repurchase of such share which
complies with Section 1.04 of this Policy.
A-10
(i) "Repurchase Target Date" with respect to a share of
stock means the date upon which the Corporation is to become obligated
to repurchase such share of stock in accordance with Section 1.02 of
this Policy. If such date is not a day on which business is generally
conducted in the Corporation's main offices, then the "Repurchase Target
Date" shall be the next subsequent business day.
A-11
<PAGE>
Exhibit E
POLICY REGARDING ISSUANCE AND SALES OF ROUNDY'S, INC. STOCK
-----------------------------------------------------------
Roundy's, Inc. will make shares of its Class B Common Stock
("Stock") available for purchase from time to time on the following
terms and conditions:
(1) Persons to Whom Shares Will Be Issued. Shares of the Company's
Stock will be made available for purchase by:
- the Company's existing shareholders who are active
retailers doing business with the Roundy's
Cooperative ("Retailers");
- new Retailers; and
- employees of Roundy's, Inc. ("Employees"), upon the
recommendation of the Chief Executive Officer and the
approval of the Board of Directors or the Compensation
Committee of the Board.
Stock will not be made available to "inactive" retailers, even if
they have not yet tendered their stock for repurchase pursuant to the
inactive shareholder repurchase policy.
(2) Times at Which Stock Will Be Made Available for Purchase.
Stock will be made available for purchase by eligible purchasers during
three (3) "window" periods each year -- after the first, second and
third fiscal quarters of the Company consisting of the first two weeks
of May, August and November, respectively. These "window" periods are
subject to closure or modification by management or the Board of
Directors if, in the best judgment of management or the Board, it would
be inappropriate for the Company to be engaged in the purchase or sale
of its shares at such time.
(3) Price at Which Shares Will Be Issued. When issued pursuant to
this policy, shares will be issued at a price equal to their Book Value
as of the preceding fiscal year end.
(4) Number of Shares Which Any Purchaser Shall Be Eligible to
Purchase. The terms set out in this Paragraph 4 are subject at all
times to the restrictions and limitations with respect to timing of
purchases as set out in Section 2 above.
(i) Retailers. The number of shares a Retailer will be
eligible to purchase will depend in part on the number of shares already
held by such Retailer relative to the number of shares which such
Retailer would be expected to hold under Roundy's "Buying Deposit"
policy. Roundy's encourages each of its Retailers to purchase and hold
shares of the Company's Stock having a total "Book Value" equal to not
less than twice the average amount of such Retailer's weekly purchases
from Roundy's. This amount is referred to as the Retailer's "Buying
Deposit." These shares are pledged to Roundy's to secure the Retailer's
accounts receivable due Roundy's, as well as any other indebtedness of
the Retailer to Roundy's. The excess (if any) of a Retailer's Buying
Deposit over the number of shares of Stock which such Retailer holds at
any time is referred to herein as such Retailer's "Buying Deposit
Deficit." For purposes of this policy, each Retailer's Buying Deposit
<PAGE>
Deficit will be redetermined as of the first day of each of the
Company's fiscal years, based on purchases by such Retailer during the
immediately preceding fiscal year.
A-12
(A) Current Active Retailers Which Have a Buying Deposit
Deficit. Existing active Retailers which have a
Buying Deposit Deficit (other than an "Incremental
Buying Deposit Deficit" or an "Initial Buying Deposit
Deficit" as defined in paragraphs (b) and (c) below)
referred to herein in as a "Regular Buying Deposit
Deficit") will be entitled to purchase, in each
"window" period described in Section 2 above, shares
equal to five percent (5%) of their Regular Buying
Deposit Deficit.
(B) Current Active Retailers Which Create Or Increase
Their Buying Deposit Deficit Through Expansion Or
Addition Of New Store Facilities. In the case of a
Retailer which expands its store facilities or adds
new facilities, and thereby creates a Buying Deposit
Deficit or increases its Buying Deposit Deficit over
its Regular Buying Deposit Deficit (referred to
herein as an "Incremental Buying Deposit Deficit"),
such Retailer will be entitled to purchase (in
addition to shares which may be purchased under the
preceding paragraph A) shares up to but not greater
than fifty percent (50%) of its Incremental Buying
Deposit Deficit, but only if such shares are
purchased in the first "window" period, as described
in Section 2 above, following the date on which the
new or expanded store facility first opens, or in the
immediately following "window" period (unless the
Company does not authorize the sale of its shares
during either of such "window" periods, in which
event such shares must be purchased at the earliest
time thereafter at which the Company authorizes sales
of its shares). The remainder of such Retailer's
Incremental Buying Deposit Deficit will become part
of its Regular Buying Deposit Deficit, and will be
subject to the provisions of Paragraph A above.
Notwithstanding the foregoing, a Retailer to which
Roundy's or any of its subsidiaries has loaned funds
(other than extensions of trade credit in the
ordinary course of business) or with respect to which
Roundy's or any of its subsidiaries has guaranteed
indebtedness (other than a guaranty or other
contingent liability for rentals due under leases of
store facilities or the equipment therein) will not
be eligible to purchase shares up to fifty percent of
the Incremental Buying Deposit Deficit as described
above. In that event, all of such Retailer's
Incremental Buying Deposit Deficit will become part
of its Regular Buying Deposit Deficit, and will be
subject to the provisions of Paragraph A above.
<PAGE> New Retailers. New Retailers (those who do not, as
of January 1, 1994, do business with the Roundy's
Cooperative, either directly or through an affiliated
entity) will be eligible to purchase, in each
"window" period described in Section 2 above, shares
equal to 10% of their Buying Deposit at the level at
which it is initially established ("Initial Buying
Deposit"). If such Retailer's Buying Deposit Deficit
increases in any subsequent fiscal year to a level
greater than its Initial Buying Deposit Deficit, such
increase will constitute a Regular Buying Deposit
Deficit, and will be subject to the provisions of
Paragraph A, above.
A-13
(D) Retailers With No Buying Deposit Deficit. A Retailer
which has no Regular Buying Deposit Deficit and no
Incremental Buying Deposit Deficit, and which is not
a new Retailer eligible to purchase shares equal to
its Initial Buying Deposit under the preceding
paragraph (c), will be eligible to purchase in each
year shares having a total Book Value equal to five
percent (5%) of its Buying Deposit (as such Buying
Deposit is determined as of the first day of each
fiscal year); provided that such shares must be
purchased in the first "window" period of each fiscal
year (unless the Company does not authorize the sale
of its shares during such "window" period, under
Section 2 above, in which event such shares must be
purchased at the earliest time thereafter at which
the Company authorizes sales of its shares).
Notwithstanding the foregoing, a Retailer to which
Roundy's or any of its subsidiaries has loaned funds
(other than extensions of trade credit in the
ordinary course of business) or with respect to which
Roundy's or any of its subsidiaries has guaranteed
indebtedness (other than a guaranty or other
contingent liability for rentals due under leases of
store facilities or the equipment therein) will not
be eligible to purchase shares if it has no Regular
Buying Deposit Deficit, Incremental Buying Deposit
Deficit, or Initial Buying Deposit Deficit.
(ii) Inactive Retailer-Shareholders. Inactive Retailers will not
be permitted to acquire any additional shares.
(iii) Employees. An Employee may purchase shares in such amount
as may be authorized by the Board of Directors or the
Compensation Committee of the Board, upon the recommendation
of the Chief Executive Officer; provided, that any employee
desiring to purchase shares shall advise the Company of his
or her desire to do so prior to the end of the first fiscal
quarter of any year, and, if approval for the purchase of
such shares is granted, such shares shall be purchased in
three approximately equal installments in each of the three
"window" periods occurring during such year.
<PAGE>
(5) Discretion Of The Board To Deviate From Or Modify The
Policy. The Board of Directors of the Company at all
times retains the discretion to alter, suspend, or
deviate from the above policy, in its discretion, to
the extent that it determines such action to be
appropriate. However, it is not anticipated that any
such deviations from, modifications to, or suspensions
of this policy will be made except in the case of
significant transactions or events outside the
ordinary course of the Company's business.
(6) Effective Date. These policies will be effective
commencing January 1, 1994.
A-14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated
Item Amount
Registration fees........................... $ 9,770.95
Legal fees.................................. 25,000.00*
Accounting fees............................. 3,500.00*
Printing (Internal Photocopying)............ 500.00*
----------
TOTAL....................................... $38,770.95
*Estimated
Item 15. Indemnification of Directors and Officers.
Article VIII of Roundy's By-Laws provides for indemnification by
Roundy's of its Directors and Officers against liabilities incurred in
their capacities as such. The following summary is subject to the
specific provisions of said Article VIII and the capitalized terms used
therein are specifically defined in said Article VIII:
Generally, Article VIII of Roundy's By-Laws requires
Roundy's to indemnify a Director or Officer for all Liability and
Expenses arising out of any claim made against such person or in a
Proceeding in which such person was a Party, unless such Liability
results from the person's Breach of Duty (which generally includes
a willful failure to deal fairly with Roundy's or its stockholders
while subject to a conflict of interest; a transaction from which
the Director or Officer derived improper personal profit; a
knowing violation of criminal law; willful misconduct; or
intentional or reckless statements or omissions regarding matters
under Board consideration). Indemnification includes the
reimbursement or advancement or expenses. Article VIII sets forth
specific procedures for requesting indemnification and for
determining whether indemnification is proper. Article VIII
provides that it is not the exclusive source for rights of an
Officer or Director to indemnification.
Management believes that Roundy's policy with respect to indemnification
as expressed in Article VIII of the By-Laws is consistent with
application provisions of the Wisconsin Business Corporation Law
respecting indemnification of Directors and Officers.
Item 16. Exhibits.
The following exhibits are filed as part of the Registration
Statement or, where so indicated, have previously been filed with the
Commission by Registrant and are incorporated herein by reference.
3.1 Articles of Incorporation of the Registrant, as amended,
incorporated herein by reference to Exhibit 4.1 of Registrant's
Registration Statement on Form S-2 (File No. 2-94485), dated
December 5, 1984.
<PAGE>
3.2 By-Laws of the Company, as amended December 9, 1986, incorporated
herein by reference to Exhibit 3.2 of Registrant's Annual Report
on Form 10-K for fiscal year ended January 3, 1987, filed with the
Commission on April 3, 1987, Commission File No. 2-66296.
II-1
3.3 1988-1 By-Law Amendments, incorporated herein by reference to
Exhibit 3.3 of Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1988, filed with the Commission on
April 1, 1988, Commission File No. 2-66296.
3.4 Amendment of By-Law Section 5.01, incorporated herein by reference
to Exhibit 3.4 of Registrant's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989, filed with the Commission on
March 30, 1990, Commission File No. 2-66296.
3.5 Amendment of By-Law Sections 7.10, 7.11 and 7.12, incorporated
herein by reference to Exhibit 3.5 of Registrant's Annual Report
on Form 10-K for the fiscal year ended December 29, 1990, filed
with the Commission on March 28, 1991, Commission File No. 2-
66296.
4.1 Modification Letter dated March 1, 1989 to Note Purchase Agreement
dated September 1, 1987 between Roundy's, Inc. and Teachers
Insurance and Annuity Association of America, incorporated herein
by reference to Exhibit 4.1 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, filed with the
Commission on March 31, 1989, Commission File No. 2-66296.
4.2 Modification Letter dated March 20, 1990 to Modification Letter
dated March 1, 1989 and to Note Purchase Agreement dated March 1,
1989 between Roundy's, Inc. and Teachers Insurance and Annuity
Association of America, incorporated herein by reference to
Exhibit 4.3 of Registrant's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989, filed with the Commission on
March 30, 1990, Commission File No. 2-66296.
4.3 Credit Agreement dated March 6, 1989, between Roundy's, Inc. and
The Chase Manhattan Bank, N.A. (as agent), incorporated herein by
reference to Exhibit 4.3 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, filed with the
Commission on March 31, 1989, Commission File No. 2-66296.
4.4 Amendment No. 1 dated April 13, 1990 to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference to Exhibit
4.5 of Registrant's Registration Statement on Form S-2 (File No.
2-66296), dated April 27, 1990.
4.5 Policy Relating to Redemption of Stock by Inactive Customer
Shareholders and Former Employees.
FILED HEREWITH (included as Exhibit D to the Prospectus which forms
a part of this Registration Statement).
<PAGE>
4.6 Amendment No. 2 dated October 9, 1991 (effective October 24, 1991)
to the Credit Agreement dated March 6, 1989, between Roundy's,
Inc. and The Chase Manhattan Bank, N.A. (as agent), incorporated
herein by reference to Exhibit 4.7 of Registrant's Annual Report
on Form 10-K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File No. 2-
66296.
4.7 Amendment No. 3 dated December 9, 1991 (effective December 30,
1991) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.8 of Registrant's
Annual Report on Form 10-K for the fiscal year ended December 28,
1991, filed with the Commission on March 26, 1992, Commission File
No. 2-66296.
II-2
4.8 Note Agreement dated December 15, 1991 (effective December 30,
1991), between Roundy's, Inc. and Massachusetts Mutual Life
Insurance Company and United of Omaha Life Insurance Company,
incorporated herein by reference to Exhibit 4.9 of Registrant's
Annual Report on Form 10-K for the fiscal year ended December 28,
1991, filed with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.9 Amendment No. 4 dated December 14, 1992 (effective December 15,
1992) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.10 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 2,
1993, filed with the Commission on March 30, 1993, Commission File
No. 2-66296.
4.10 Note Agreement dated December 15, 1992 between Roundy's, Inc. and
Connecticut Mutual Life Insurance Company, The Ohio National Life
Insurance Company, Provident Mutual Life Insurance Company of
Philadelphia, Providentmutual Life and Annuity Company of America,
Guarantee Mutual Life Company, Woodmen Accident and Life Company
and United of Omaha Life Insurance Company, incorporated herein by
reference to Exhibit 4.11 of Registrant's Annual Report on Form
10-K for the fiscal year ended January 2, 1993, filed with the
Commission on March 30, 1993, Commission File No. 2-66296.
4.11 Policies relating to Roundy's Issuance and Sales and Redemptions/
Repurchases of its Stock.
FILED HEREWITH (included as Exhibit E to the Prospectus which
forms a part of this Registration Statement).
4.12 Amendment No. 5 dated December 15, 1993 (effective December 13,
1993) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.13 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 1,
1994, filed with the Commission on March 31, 1994, Commission File
No. 2-66296.
<PAGE>
4.13 Note Agreement dated December 22, 1993 (effective December 22,
1993), between Roundy's, Inc. and The Variable Annuity Life
Insurance Company, The Life Insurance Company of Virginia, Phoenix
Home Life Mutual Insurance Company, Phoenix American Life
Insurance Company, Washington National Insurance Company, and TMG
Life Insurance Company, incorporated herein by reference to
Exhibit 4.14 of Registrant's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994, filed with the Commission on
March 31, 1994, Commission File No. 2-66296.
4.14 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus which
forms a part of this Registration Statement).
4.15 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus which
forms a part of this Registration Statement).
4.16 Article V of Registrant's By-Laws "Fiscal Year Accounting and
Patronage Rebates," as amended on December 12, 1989.
FILED HEREWITH (included as Exhibit C to the Prospectus which
forms a part of this Registration Statement).
5.1 Opinion of Whyte Hirschboeck Dudek S.C. as to legality of issuance
of securities.
FILED HEREWITH.
II-3
9 Amended and Restated Voting Trust Agreement dated September 16,
1983, incorporated herein by reference to Exhibit 9 of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1983, filed with the Commission on March 30, 1984,
Commission File No. 2-66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to Amended and
Restated Voting Trust Agreement, incorporated herein by reference
to Exhibit 9(a) of Registrant's Registration Statement on Form S-2
(File No. 2-66296), dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting Trust
Agreement, incorporated herein by reference to Exhibit 9(b) of
Registrant's Registration Statement on Form S-2 (File No. 2-
66296), dated April 29, 1987.
10.1 Employment Agreement dated July 1, 1992 between the Registrant and
John R. Dickson, incorporated herein by reference to Exhibit 10.1
of Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993, filed with the Commission on March 30,
1993, Commission File No. 2-66296.
10.2 Roundy's, Inc. Supplemental Pension Plan Agreement, effective July
1, 1987 between the Registrant and John R. Dickson, incorporated
herein by reference to Exhibit 10.3 of Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-66296.
<PAGE>
10.3 Deferred Compensation Agreement plan between the Registrant and
certain executive officers including Messrs. Dickson, Ranus,
Lestina and Sullivan, incorporated herein by reference to Exhibit
10.4 of Registrant's Annual Report on Form 10-K for the fiscal
year ended December 30, 1989 filed with the Commission on March
30, 1990, Commission File No. 2-66296.
10.4 Directors and Officers Liability and Corporation Reimbursement
Policy issued by American Casualty Company of Reading,
Pennsylvania (CNA Insurance Companies) as of June 13, 1986,
incorporated herein by reference to Exhibit 10.3 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 3,
1987, filed with the Commission on April 3, 1987, Commission File
No. 2-66296.
10.4(a) Declarations page for renewal of Directors and Officers Liability
and Corporation Reimbursement Policy, incorporated herein by
reference to Exhibit 10.4(a) of Registrant's Annual Report on Form
10-K for the fiscal year ended January 1, 1994, filed with the
Commission on March 31, 1994, Commission File No. 2-66296.
10.5 1991 Stock Incentive Plan, revised February 9, 1993, incorporated
herein by reference to Exhibit 10.6 of Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-66296.
23.1 Consent of Deloitte & Touche LLP.
FILED HEREWITH.
23.2 Consent of Whyte Hirschboeck Dudek S.C.
FILED HEREWITH (included as part of Exhibit 5.1).
24.1 Powers of Attorney of Certain Officers and Directors of Registrant
FILED HEREWITH (included as part of Signature Page).
27.1 Financial Data Schedule
FILED HEREWITH.
II-4
<PAGE>
Item 17. Undertakings.
(a) Rule 415 Offering. The undersigned registrant hereby undertakes
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the 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 the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
(2) That, for the purpose of determining any liability under the
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.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, as amended, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended (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, as amended)
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.
<PAGE>
(e) Incorporated Annual and Quarterly Reports. The undersigned
registrant hereby undertakes to deliver or cause to be delivered
with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant
to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under
the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-
X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
(h) Request for Acceleration of Effective Date or Filing of
Registration Statement on Form S-8. The undersigned registrant
hereby undertakes that, insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
II-5
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment for 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 of whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-2 and
has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the town of Pewaukee,
State of Wisconsin, on January 25, 1995.
ROUNDY'S, INC.
By ROBERT D. RANUS
-----------------------
Robert D. Ranus
Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert D. Ranus, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, Registration Statement has been signed this 25th day of January
by the following persons in the capacities indicated:
Signature Title
--------- -----
JOHN R. DICKSON Director, Chairman and
- ------------------------ Chief Executive Officer
John R. Dickson
ROBERT D. RANUS Director, Vice President and
- ------------------------ Chief Financial Officer and
Robert D. Ranus Principal Accounting Officer
<PAGE>
Signature Title
--------- -----
JOHN R. DICKSON Director
- -----------------------
John R. Dickson
GERALD F. LESTINA Director
- -----------------------
Gerald F. Lestina
ROBERT D. RANUS Director
- ------------------------
Robert D. Ranus
CHARLES R. BONSON Director
- ------------------------
Charles R. Bonson
GARY N. GUNDLACH Director
- ------------------------
Gary N. Gundlach
GEORGE E. PRESCOTT Director
- ------------------------
George E. Prescott
GEORGE C. KAISER Director
- ------------------------
George C. Kaiser
BRENTON H. RUPPLE Director
- ------------------------
Brenton H. Rupple
ROBERT E. BARTELS Director
- ------------------------
Robert E. Bartels
<PAGE>
ROUNDY'S, INC.
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INDEX TO EXHIBITS
Exhibit Description and Incorporation by Reference
- ------- ------------------------------------------
3.1 Articles of Incorporation of the Registrant, as amended,
incorporated herein by reference to Exhibit 4.1 of Registrant's
Registration Statement on Form S-2 (File No. 2-94485), dated
December 5, 1984.
3.2 By-Laws of the Company, as amended December 9, 1986, incorporated
herein by reference to Exhibit 3.2 of Registrant's Annual Report
on Form 10-K for fiscal year ended January 3, 1987, filed with the
Commission on April 3, 1987, Commission File No. 2-66296.
3.3 1988-1 By-Law Amendments, incorporated herein by reference to
Exhibit 3.3 of Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1988, filed with the Commission on
April 1, 1988, Commission File No. 2-66296.
3.4 Amendment of By-Law Section 5.01, incorporated herein by reference
to Exhibit 3.4 of Registrant's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989, filed with the Commission on
March 30, 1990, Commission File No. 2-66296.
3.5 Amendment of By-Law Sections 7.10, 7.11 and 7.12, incorporated
herein by reference to Exhibit 3.5 of Registrant's Annual Report
on Form 10-K for the fiscal year ended December 29, 1990, filed
with the Commission on March 28, 1991, Commission File No. 2-
66296.
4.1 Modification Letter dated March 1, 1989 to Note Purchase Agreement
dated September 1, 1987 between Roundy's, Inc. and Teachers
Insurance and Annuity Association of America, incorporated herein
by reference to Exhibit 4.1 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, filed with the
Commission on March 31, 1989, Commission File No. 2-66296.
4.2 Modification Letter dated March 20, 1990 to Modification Letter
dated March 1, 1989 and to Note Purchase Agreement dated March 1,
1989 between Roundy's, Inc. and Teachers Insurance and Annuity
Association of America, incorporated herein by reference to
Exhibit 4.3 of Registrant's Annual Report on Form 10-K for the
fiscal year ended December 30, 1989, filed with the Commission on
March 30, 1990, Commission File No. 2-66296.
4.3 Credit Agreement dated March 6, 1989, between Roundy's, Inc. and
The Chase Manhattan Bank, N.A. (as agent), incorporated herein by
reference to Exhibit 4.3 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, filed with the
Commission on March 31, 1989, Commission File No. 2-66296.
<PAGE>
4.4 Amendment No. 1 dated April 13, 1990 to the Credit Agreement dated
March 6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference to Exhibit
4.5 of Registrant's Registration Statement on Form S-2 (File No.
2-66296), dated April 27, 1990.
4.5 Policy Relating to Redemption of Stock by Inactive Customer
Shareholders and Former Employees.
FILED HEREWITH (included as Exhibit D to the Prospectus which forms
a part of this Registration Statement).
4.6 Amendment No. 2 dated October 9, 1991 (effective October 24, 1991)
to the Credit Agreement dated March 6, 1989, between Roundy's,
Inc. and The Chase Manhattan Bank, N.A. (as agent), incorporated
herein by reference to Exhibit 4.7 of Registrant's Annual Report
on Form 10-K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File No. 2-
66296.
4.7 Amendment No. 3 dated December 9, 1991 (effective December 30,
1991) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.8 of Registrant's
Annual Report on Form 10-K for the fiscal year ended December 28,
1991, filed with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.8 Note Agreement dated December 15, 1991 (effective December 30,
1991), between Roundy's, Inc. and Massachusetts Mutual Life
Insurance Company and United of Omaha Life Insurance Company,
incorporated herein by reference to Exhibit 4.9 of Registrant's
Annual Report on Form 10-K for the fiscal year ended December 28,
1991, filed with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.9 Amendment No. 4 dated December 14, 1992 (effective December 15,
1992) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.10 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 2,
1993, filed with the Commission on March 30, 1993, Commission File
No. 2-66296.
4.10 Note Agreement dated December 15, 1992 between Roundy's, Inc. and
Connecticut Mutual Life Insurance Company, The Ohio National Life
Insurance Company, Provident Mutual Life Insurance Company of
Philadelphia, Providentmutual Life and Annuity Company of America,
Guarantee Mutual Life Company, Woodmen Accident and Life Company
and United of Omaha Life Insurance Company, incorporated herein by
reference to Exhibit 4.11 of Registrant's Annual Report on Form
10-K for the fiscal year ended January 2, 1993, filed with the
Commission on March 30, 1993, Commission File No. 2-66296.
4.11 Policies relating to Roundy's Issuance and Sales and Redemptions/
Repurchases of its Stock.
FILED HEREWITH (included as Exhibit E to the Prospectus which
forms a part of this Registration Statement).
<PAGE>
4.12 Amendment No. 5 dated December 15, 1993 (effective December 13,
1993) to the Credit Agreement dated March 6, 1989, between
Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.13 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 1,
1994, filed with the Commission on March 31, 1994, Commission File
No. 2-66296.
4.13 Note Agreement dated December 22, 1993 (effective December 22,
1993), between Roundy's, Inc. and The Variable Annuity Life
Insurance Company, The Life Insurance Company of Virginia, Phoenix
Home Life Mutual Insurance Company, Phoenix American Life
Insurance Company, Washington National Insurance Company, and TMG
Life Insurance Company, incorporated herein by reference to
Exhibit 4.14 of Registrant's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994, filed with the Commission on
March 31, 1994, Commission File No. 2-66296.
4.14 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus which
forms a part of this Registration Statement).
4.15 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus which
forms a part of this Registration Statement).
4.16 Article V of Registrant's By-Laws "Fiscal Year Accounting and
Patronage Rebates," as amended on December 12, 1989.
FILED HEREWITH (included as Exhibit C to the Prospectus which
forms a part of this Registration Statement).
5.1 Opinion of Whyte Hirschboeck Dudek S.C. as to legality of issuance
of securities.
FILED HEREWITH.
9 Amended and Restated Voting Trust Agreement dated September 16,
1983, incorporated herein by reference to Exhibit 9 of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1983, filed with the Commission on March 30, 1984,
Commission File No. 2-66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to Amended and
Restated Voting Trust Agreement, incorporated herein by reference
to Exhibit 9(a) of Registrant's Registration Statement on Form S-2
(File No. 2-66296), dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting Trust
Agreement, incorporated herein by reference to Exhibit 9(b) of
Registrant's Registration Statement on Form S-2 (File No. 2-
66296), dated April 29, 1987.
10.1 Employment Agreement dated July 1, 1992 between the Registrant and
John R. Dickson, incorporated herein by reference to Exhibit 10.1
of Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993, filed with the Commission on March 30,
1993, Commission File No. 2-66296.
<PAGE>
10.2 Roundy's, Inc. Supplemental Pension Plan Agreement, effective July
1, 1987 between the Registrant and John R. Dickson, incorporated
herein by reference to Exhibit 10.3 of Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-66296.
10.3 Deferred Compensation Agreement plan between the Registrant and
certain executive officers including Messrs. Dickson, Ranus,
Lestina and Sullivan, incorporated herein by reference to Exhibit
10.4 of Registrant's Annual Report on Form 10-K for the fiscal
year ended December 30, 1989 filed with the Commission on March
30, 1990, Commission File No. 2-66296.
10.4 Directors and Officers Liability and Corporation Reimbursement
Policy issued by American Casualty Company of Reading,
Pennsylvania (CNA Insurance Companies) as of June 13, 1986,
incorporated herein by reference to Exhibit 10.3 of Registrant's
Annual Report on Form 10-K for the fiscal year ended January 3,
1987, filed with the Commission on April 3, 1987, Commission File
No. 2-66296.
10.4(a) Declarations page for renewal of Directors and Officers Liability
and Corporation Reimbursement Policy, incorporated herein by
reference to Exhibit 10.4(a) of Registrant's Annual Report on Form
10-K for the fiscal year ended January 1, 1994, filed with the
Commission on March 31, 1994, Commission File No. 2-66296.
10.5 1991 Stock Incentive Plan, revised February 9, 1993, incorporated
herein by reference to Exhibit 10.6 of Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-66296.
23.1 Consent of Deloitte & Touche LLP.
FILED HEREWITH.
23.2 Consent of Whyte Hirschboeck Dudek S.C.
FILED HEREWITH (included as part of Exhibit 5.1).
24.1 Powers of Attorney of Certain Officers and Directors of Registrant
FILED HEREWITH (included as part of Signature Page).
27.1 Financial Data Schedule
FILED HEREWITH.
<PAGE>
EXHIBIT 5.1
January 26, 1995
Roundy's, Inc.
23000 Roundy Drive
Pewaukee, Wisconsin 53072
RE: Form S-2 Registration Statement
Gentlemen:
We have acted as counsel to Roundy's, Inc. ("Registrant") in connection
with the preparation and filing of the above - referenced Registration
Statement and the proposed issuance of up to 4,000 shares of the Registrant's
Class A (Voting) Common Stock, and up to 300,000 shares fo the Registrant's
Class B (Non-voting) Common Stock, in an offering to which the Registration
Statement relates.
We have examined the originals, or photostatic, certified or conformed
copies of such records of Registrant, certificates of its officers and
such other documents as we have deemed relevant and necessary, as a basis for
the opinion, set forth herein. In connection with such examinations,
we have assumed the authenticity of all documents submitted to us as originals
or duplicate originals, the conformity to original documents of all documents
submitted to us as certified, photostatic or conformed copies, the
authenticity of the originals of such latter documents, and the correctness
and completeness of such certificates on which we have relied.
Based on the foregoing, it is our opinion that the securities being
offered by the Registrant when issued as contemplated by the Registration
Statement against payment of the consideration therefor, will be legally
issued, fully paid and nonassessable, subject to limitation contained in
Section 180.0622 (2) (b), Wisconsin Statutes, which makes shareholders
personally liable for debts owing to employees for services performed for the
Registrant not exceeding six months service, up to the par value of the shares
they own. We note that "par value" has been construed by the Wisconsin Supreme
court for this purpose to mean the initial purchase price of the stock.
We consent to the filing of this opinion as an exhibit to the above-
referenced Registration Statement and any amendments thereto (including post-
effective amendments) and to the reference to this firm and to this opinion
in the Registration Statement.
Very truly yours,
WHYTE HIRSCHBOECK DUDEK S.C.
By: ANDREW J. GUZIKOWSKI
------------------------------
Andrew J. Guzikowski
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Roundy's, Inc. on
Form S-2 of our reports dated February 28, 1994, included in and incorporated
by reference in the Annual Report on Form 10-K of Roundy's, Inc. for the year
ended January 1, 1994, and to the use of our report dated February 28,1994,
appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us appearing under the heading "Experts"
in such Prospectus.
DELIOTTE & TOUCHE LLP
Milwaukee, Wisconsin
January 26, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000314423
<NAME> ROUNDY'S, INC.
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> JAN-01-1994 DEC-31-1994
<PERIOD-END> JAN-01-1994 OCT-01-1994
<CASH> 25,845,600 29,776,700
<SECURITIES> 0 0
<RECEIVABLES> 108,593,000 106,705,400
<ALLOWANCES> (8,766,500) (7,734,800)
<INVENTORY> 153,169,500 165,946,800
<CURRENT-ASSETS> 290,080,200 303,668,900
<PP&E> 130,516,800 142,076,200
<DEPRECIATION> (70,627,700) (77,246,600)
<TOTAL-ASSETS> 380,092,100 398,059,100
<CURRENT-LIABILITIES> 176,437,300 211,171,700
<BONDS> 113,044,700 92,004,000
<COMMON> 1,444,800 1,460,000
0 0
0 0
<OTHER-SE> 84,621,300 88,682,600
<TOTAL-LIABILITY-AND-EQUITY> 380,092,100 398,059,100
<SALES> 2,480,254,200 1,831,506,300
<TOTAL-REVENUES> 2,486,780,800 1,833,475,200
<CGS> 2,248,336,000 1,660,488,700
<TOTAL-COSTS> 2,248,336,000 1,660,448,700
<OTHER-EXPENSES> 204,815,700 155,236,900
<LOSS-PROVISION> 6,738,600 1,787,300
<INTEREST-EXPENSE> 12,138,100 7,118,200
<INCOME-PRETAX> 14,752,400 8,844,100
<INCOME-TAX> 5,973,700 3,304,000
<INCOME-CONTINUING> 8,778,700 5,240,100
<DISCONTINUED> 0 0
<EXTRAORDINARY> (751,000) 0
<CHANGES> 0 0
<NET-INCOME> 8,027,700 5,240,100
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
