As Filed with the United States Securities and Exchange
Commission on January 30, 1995
Registration No. 33-57505
________________________________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
AMENDMENT NO. 1
TO 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. __
_____________________________________________________________________
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
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
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 and Trustees of the Roundy's, Inc.
Voting Trust. 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
stockholdercustomers 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 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE UNITED STATES 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 $ 309,600
_______________________________________________________________________
Class B Common Book Value None $23,220,000
- -----------------------------------------------------------------------
(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 $77.40.
The date of this Prospectus is May __, 1995.
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
The Company................................................... 18
Management.................................................... 28
Description of Stock.......................................... 30
Voting Trust.................................................. 32
Legal Matters................................................. 34
Experts....................................................... 34
Indemnification............................................... 34
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 facilities 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 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.
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
December 31, 1994 (the "1994 Form 10-K");
(b) Roundy's current report filed with the
Commission on Form 8-K dated October 14, 1994;
(c) Roundy's current report filed with the
Commission on Form 8-K dated November 21, 1994; and
(d) 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 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, Virginia
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 ten 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 961 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 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 stockholdercustomers, 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 the
Roundy's, Inc. Voting Trust. 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."
(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, and to Trustees of
the Roundy's, Inc. Voting Trust 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."
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's 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. See "REPURCHASE OF SHARES."
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:
Fiscal Years
----------------------------------------
1994 1993 1992
(Dollars in Thousands)
Earnings Statement Data:
Net Sales and Service Fees...$2,461,510 $2,480,254 $2,491,293
Earnings Before Patronage
Dividends and Income Taxes.. 11,055 20,053 16,528
Patronage Dividends.......... 0 5,301 5,135
Net Earnings.................... 6,554 8,028 7,353
Balance Sheet Data:
Total Assets....................404,652 380,092 390,148
Working Capital................. 91,814 113,643 119,153
Long-term Debt (less current
maturities).................. 88,227 113,045 135,420
Stockholders' Equity(1)......... 90,419 86,066 78,573
(1) Includes patronage dividends payable in Class B Common of
$3,263,000 and $3,210,000 in 1993 and 1992, respectively.
There were no patronage dividends for 1994 because the
Company did not meet the requirement to increase the Book
Value of its Common Stock by 10%.
See "SELECTED FINANCIAL INFORMATION" and "INDEX TO FINANCIAL
STATEMENTS."
3
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. No patronage dividends were
paid for 1994. 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 Roundy's, and to Trustees of the
Roundy's, Inc. Voting Trust. 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 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 of Roundy's Directors. Roundy's By-Laws were
recently amended to increase the total number of directors
from nine to ten, and to increase the number of "Retailer
Directors" (that is, Directors who are stockholder-customers
of Roundy's) from three to four. Conforming amendments to
the Voting Trust are proposed but have not yet been
adopted. With respect to the election of three Retailer
Directors (one in each year) (following the conforming
amendments to the Voting Trust this will be increased to
four Retailer Directors, adding an additional one every
third year), and on most other matters, 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 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 December 31, 1994 an aggregate of 244 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 82 holders of such Certificates on December 31,
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
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 Purchasers
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 Roundy's and to Trustees of the
Roundy's, Inc. Voting Trust.
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 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, and to Trustees of
the Roundy's, Inc. Voting Trust 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 1994 fiscal
year was $77.40 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 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 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.
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 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
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 $77.40, for a total repurchase
obligation of $2,188,330. In addition, based upon such pend
ing 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 preceding
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 Roundy's 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
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 shares 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
CAPITALIZATION
The following table sets forth the consolidated
capitalization of the Company as of December 31, 1994:
To Be Out
standing If
All Stock
Offered Here-
Outstanding by is Sold(1)
------------ -------------
SHORT-TERM INDEBTEDNESS:
Current maturities of
long-term debt................. $ 5,678,600 $5,678,600
------------ ------------
Total short-term debt.... $ 5,678,600 $5,678,600
============ ============
LONG-TERM INDEBTEDNESS:
Senior unsecured notes payable:
10.31%, due 1996 to 1999.... $ 6,000,000 $ 6,000,000
9.26%, due 1996 to 2001..... 15,000,000 15,000,000
7.57% to 8.26%, due
1996 to 2008................ 21,600,000 21,600,000
6.94%, due 1997 to 2003..... 45,000,000 45,000,000
Other long-term debt........... 391,800 391,800
Obligations under capitalized
leases...................... 234,900 234,900
----------- -----------
Total long-term debt $88,226,700 $88,226,700
=========== ===========
CAPITAL STOCK:
Class A Common, $1.25 par
value, 60,000 shares
authorized.................. 14,000 shares 18,000 shares
Class B Common, $1.25 par
value, 2,400,000 shares
authorized (2)................. 1,154,363 shares 1,454,363 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, although no patronage dividends were paid for
1994. (See "THE COMPANY.") It is expected that shares of
Roundy's Class B Common will be issued in this manner in the
future.
13
SELECTED FINANCIAL INFORMATION
The selected financial information for the five-year
period ended December 31, 1994 should be read in conjunction
with the Roundy's, Inc. and Subsidiaries Consolidated Financial
Statements and notes thereto included elsewhere in this Prospectus.
Fiscal Year
(Dollars in thousands, except per-share data and ratios)
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
Net sales and service
fees.................$2,461,510 $2,480,254 $2,491,293 $2,534,418 $2,501,465
Earnings before
patronage dividends
and income taxes..... 11,055 20,053 16,528 14,826 16,724
Patronage dividends... 0 5,301 5,135 3,305 5,549
Earnings before income
taxes................ 11,055 14,752 11,393 11,521 11,175
Net earnings.......... 6,554 8,028 7,353 6,813 6,507
Total assets.......... 404,652 380,092 390,148 390,797 390,356
Long-term debt........ 88,227 113,045 135,420 139,283 140,435
Stockholders' equity(1) 90,419 86,066 78,573 70,917 65,236
Book Value per share.. 77.40 71.65 65.10 58.75 53.10
Ratio of current assets
to current liabilities 1.43:1 1.64:1 1.70:1 1.66:1 1.59:1
Ratio of long-term debt to
stockholders' equity .98:1 1.31:1 1.72:1 1.96:1 2.15:1
(1) Including patronage dividends payable in Common Stock of
$3,263,000, $3,210,000, $2,212,000 and $3,414,000 for 1993,
1992, 1991 and 1990, respectively. There were no patronage
dividends for 1994 because the Company did not meet the
requirement to increase the Book Value of its Common Stock
by 10%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES. During 1994, Roundy's
took a major step forward in solidifying its future and
strengthening its overall balance sheet. Recognizing
the need to "re-engineer" the Company, management and
the Board of Directors strengthened Roundy's balance sheet
through increasing the allowance for bad debts and
closed facility reserve. It is the consensus of both
management and the Board of Directors that the Company
needs to address this issue of "re-engineering" now, in
order to ensure our future as a leading food wholesaler
in the Midwest.
Improving the long-term debt to equity ratio of the
Company over the past several years has been a major
objective of management. By placing emphasis on this
objective, the desired result was finally achieved. The
long-term debt to equity ratio was 1.72:1 in 1992,
1.31:1 in 1993 and .98:1 in 1994. The long-term debt to
equity ratio of .98:1, less than 1.00:1, is a milestone
for the Company. This ratio is below one for the first
time in over ten years. During 1994, Roundy's has been
able to minimize its borrowings under its floating rate
revolving credit agreement. The Company has concentrated
its borrowings in low, fixed rate monies and reduced
floating rate debt, enabling us to reduce interest expense
$2.7 million from 1993 and $3.6 million from 1992.
Throughout 1994, the Federal Reserve was very active in
raising short-term interest rates. However, as a result
of our $45,000,000 refinancing at 6.94% in 1993, we were
able to neutralize, to a great degree, major
fluctuations in interest expense. Further, by
centralizing our accounts payable function for all
divisions and putting a major emphasis on controlling
both inventory (average investment in inventory was 34%
in 1994 versus 39% in 1993) and accounts and notes
receivable, we were better able to manage daily cash
requirements and reduce borrowings from our floating
rate debt instrument.
Average daily borrowings declined $35.6 million in 1994
compared to 1993 and $2.6 million in 1993 compared to 1992.
The combination of the decline in average borrowings,
as noted above, and the 1993 debt refinancing are the two
main reasons for our lower interest expense in 1994 versus
1993 and 1992. The average cost of funded debt in 1994
was 7.8% compared to 7.9% in 1993 and 8.6% in 1992.
Outlined below is our capital structure for fiscal 1994
compared to 1993. It should be noted that even with
management's decision to significantly increase its
balance sheet reserves, Roundy's still achieved a $4.3
million increase in stockholders' equity compared to a
$7.5 million increase in 1993 and $7.7 million increase
in 1992.
It is important to note that the table reflects the fact
that equity now represents over 50.6% of Roundy's total
capital compared to 43.2% for 1993 and 36.7% in 1992.
As mentioned, management focused on (1) strengthening
the Company's 1994 balance sheet through increasing
certain reserves, (2) improving cash flow and (3)
reinvesting in facilities, fleet and warehouse equipment
which will provide operational efficiencies and
immediate financial savings. In 1994, Roundy's spent
$22.3 million on capital additions, including new fleet,
corporate store remodels and new equipment in operating
divisions. This was $9.0 million greater than 1993 and
$7.0 million more than 1992. The $22.3 million in
capital expenditures in 1994 was the largest one year
capital expenditure ever made by Roundy's other than the
purchase of another company. The Company's 1995 planned
capital expenditure budget exceeding $21 million, is
also significant. It is management's strong belief that
this level of capital expenditures is necessary for us
to keep our facilities and equipment modern and working
efficiently and in turn, continue to keep operating costs
at the lowest possible level. Approximately $6.6 million of
the 1995 budget will be directed toward transportation
equipment, $5.4 million for the Milwaukee Division
which includes enhancements for the "Target Marketing"
program and $4.0 million will be directed toward retail
store enhancements.
15
Management continues to monitor and control its current
ratio. The objective is to reduce working capital
invested in the business but maintain the level
necessary to meet debt covenant requirements. The
Company's current ratio was 1.43:1, at December 31, 1994,
1.64:1, at January 1, 1994 and 1.70:1, at January 2, 1993.
The declining trend in the ratio is intentional and based
on management's desire to control the investment in
inventory and notes and accounts receivable. Average
inventory turns have steadily improved in the past few years.
These inventory turns were 14.4 in 1994, 14.1 in 1993 and 13.8
in 1992. Current notes and accounts receivable declined
$2.5 million in 1994 compared to 1993 but were $2.1
million greater than 1992. Our intention is to continue
to reduce these assets where practicable. Also, with
the implementation of our new automated purchasing
system and the centralization of the accounts payable
function, we have been able to standardize payment terms
for all Roundy's divisions and explore opportunities for
extended terms.
Book value per share increased to $77.40 or 8.0% in 1994
compared to a 10.1% increase in 1993 and a 10.8%
increase in 1992. The 1994 increase in book value was
less than the 10% increase required for a patronage
dividend payment. As previously noted, management and
the Board of Directors decided that 1994 was the year to
"re-engineer" the Company and enhance its reserves. The
industry has been changing and all our major competitors
have taken significant restructuring charges directed at
enhancing their future operations and making them even
more competitive. It should be noted that during the
threeyear period ending December 31, 1994, stockholders'
equity increased to $19.5 million or 27.5%.
RESULTS OF OPERATIONS. Net sales and service fees
declined .8% in 1994 compared to 1993 and 1.2% compared
to 1992. The $18.7 million decline from 1993 can be
primarily attributed to the sale of Roundy's dairy and
ice cream operations in the Fall of 1993. Wholesale
sales increased $27.7 million or 1.2% over 1993 and
$33.2 million or 1.4% over 1992. Management has been very
aggressive in soliciting both new customers and
improving concentration with existing customers. A
major factor contributing to the increase in wholesale
sales has been due to the success of the "Advantage
Plus" program which was implemented in several
divisions. "Advantage Plus" is an electronic marketing
program which offers the customer product savings at the
store level. Management has directed funds in the 1995
capital expenditure budget to take this program to the
next level. Enhancements include adding "target
marketing" capabilities and satellite technology so the
program can be expanded throughout Roundy's entire
service territory.
In the past few years the industry has undergone a major
change in its approach to generating revenues. With
continued pressure, both from competitors and
manufacturers, gross profit margins as a percentage of
net sales and service fees have remained constant or
declined. With such industry initiatives as Efficient
Consumer Response ("ECR") and manufacturer category
funding, the trend of lower gross profit margins will
continue in the future. Our goal is to continue to seek
ways to reduce costs to offset the loss in margins and
to find alternative sources of revenue. Roundy's 1994
and 1993 gross profit margins were 9.4% compared to 9.6%
in 1992.
Operating and administrative expenses increased in 1994
to 8.7% from 8.3% in 1993 and 8.5% in 1992. In 1994,
management increased its allowance for bad debts and
closed facility reserve, substantially all of which was
charged in the fourth quarter. When you make 1994 Operating
and Administrative expenses comparable to 1993 and 1992 by
adjusting for the increases to these reserves, 1994's
adjusted ratio becomes 8.3%.
16
A second major factor affecting Operating and
Administrative expenses was the cost of implementing a
computerized buying system in all divisions. The cost of
this project exceeded $1 million in 1994. This buying
system allows all divisions to exchange data on buying
opportunities and pricing thereby providing them with
the ability to secure lower cost of goods for our
customers. Management has recognized that it is
becoming more difficult to take costs out of the
"system" without further automation, both in the
warehouse and at the point of interface with the
manufacturer. Accordingly, efforts have been made to
work with selected manufacturers to develop and
implement an ECR initiative at Roundy's. The
opportunities for future savings are believed to be
significant. Additionally, a major effort has been
taken to develop a satellite communications system which
will enable the Company to enhance communication
abilities with customers throughout Roundy's entire
service territory. This network communications system is
required for the target marketing program. Management
believes such a system will position the Company for
significant future revenue generation and cost savings
opportunities for both Roundy's and its customers.
The effective income tax rate was 40.7% for 1994, 40.5%
for 1993, and 41.3% for 1992. The Company continues to
try to minimize income taxes in accordance with Federal and
State income tax regulations.
Net earnings in 1994 were .27% of net sales and service
fees. This compares to .32% in 1993 and .30% in 1992.
The main reason for the decline in net earnings was the
increase in its allowance for bad debts and closed
facility reserve. As a result of strong competitive
pressures in the Company's Eastern service territory,
management re-evaluated its customer base and elected to
take a strong position against continuing to invest in
marginal customers. It is the firm belief of management
that we need to re-engineer our method of servicing our
customers, thereby solidifying the longterm future of
the Company. By increasing these reserves in 1994, it
is projected that the earnings in 1995 and thereafter
will provide sufficient funds to undertake additional re-
engineering of the Company in order to remain competitive
and ensure the future of the Company.
_______________________________________________________________________
Capital Structure (in millions) 1994 1993
_______________________________________________________________________
Long-term debt $ 88.0 49.3% $111.7 56.1%
Capitalized lease
obligations 0.2 0.1% 1.3 0.7%
_______________________________________________________________________
Total long-term debt 88.2 49.4% 113.0 56.8%
Stockholders' equity 90.4 50.6% 86.1 43.2%
_______________________________________________________________________
Total capital $178.6 100.0% $199.1 100.0%
_______________________________________________________________________
17
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, Virginia and West Virginia. The Company also owns
and operates ten 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 961 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 inven tory 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,
may 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.
No patronage dividends were paid for 1994. Patronage dividends for
the three fiscal years prior to 1994 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.
The subsidiaries of Roundy's do not operate as cooperatives. The
customers serviced by these subsidiaries are independent
grocers, operating 821 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 1994.
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," "Spring
Lake," "Shurfine," "Price Saver," "Buyers' Choice," "Super
Choice," "Sunny Valley," "Sunny Acres," "Sunny Acre Farms,"
"Bonnie Blue" and "Valu-Check'd." Private label product sales
for the Company accounted for $153,699,000, $137,176,000 and
$148,074,000 of the Company's sales during fiscal 1994, 1993,
and 1992, 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 37%, 36% and 34% of the
Company's consolidated net sales and service fees for the fiscal
years ended December 31, 1994, January 1, 1994, and January 2,
1993, respectively. At December 31, 1994, Roundy's had 82
stockholder-customers actively engaged in the retail grocery
business, operating a total of 140 retail grocery stores.
Roundy's cooperative wholesale food business is focused
primarily in Wisconsin, where all but 8 of these 140 retail
grocery stores are located (8 are in Illinois). At December 31,
1994 the Company (including its subsidiaries) had 821 independent
retail food store customers. Sales by the Company to the independent
retail food stores accounted for 54%, 55% and 56% of the
Company's consolidated net sales and service fees for the fiscal
years ended December 31, 1994, January 1, 1994 and January 2,
1993, 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 a 12 state area the Company serviced
140 retail grocery stores operated by its stockholder-customers,
821 retail stores operated by nonstockholders and 15 Company-
owned and operated retail stores during the fiscal year ended
December 31, 1994.
19
Of the Company's consolidated net sales and service fees for
this period, $508,454,000 or 20.7% were attributable to five
customers, with one customer accounting for $196,627,000 or 8.0%
of such sales. Approximately 81% or 780 retail store customers
purchased less than $3,000,000 each from the Company in the
fiscal year ended December 31, 1994. 123 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 280 tractor cabs and 680 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 .38% of
sales. In 1994, 1993 and 1992, the Company's bad debt
expense was $9,166,600, $6,738,600 and $5,772,900,
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 stores ranging in square footage from
34,000 to 65,000 square feet per store. The high value-
limited assortment retail store is designated as "Mor For
Less" which emphasize low cost, high value lines to the
customer, maintaining square footage of 24,000 square
feet. 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 1994 1993 1992
------------- ---- ---- ----
High Value-Limited Assort-
ment and High Volume-Limited
Service Stores (Warehouse
food stores)................ 11 14 14
Conventional Retail Stores.. 4 5 5
Sales by Company-operated stores during the three most
recent fiscal years were $231,364,000, $238,724,000 and
$263,189,000 for 1994, 1993 and 1992, 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 1994, the Company had employed
full-time 1,110 executive, administrative and clerical
employees, 1,451 warehouse and processing employees and
drivers and 475 retail employees and had employed 1,739
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.
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 46%
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 1994.
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 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
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 December 31, 1994
was $77.40 per share. No patronage dividends for the
year ending December 30, 1995, may be paid until $7.74
(10% of $77.40) per share is added to such Book Value.
Based upon the number of shares outstanding at December
31, 1994, earnings in the aggregate amount of $9,043,130
must be retained before patronage dividends may be paid.
Any increase in Book Value over $7.74 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.
22
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:
Fiscal Increase in Book Minimum Requirement
Year Value Per Share Per Article V of By-Laws
- ------ ----------------- ------------------------
1994 8.0% 10%
1993 10.1% 10%
1992 10.8% 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:
23
Securities
Year Ended Total Dividend Cash % % No. of Shares
- ----------------- -------------- ------ -- -------------
December 31, 1994 $ 0 - - 0
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
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 stockholdercustomers 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 ByLaws, 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.
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 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 41% 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
stockholdercustomer 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 stockholdercustomers
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 11% of the stockholdercustomers 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
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 December 31, 1994 are summarized in the
table below (2).
Outstanding
Number Balance Range of Range of
of Original as of Interest Maturity
Loans Amount Dec. 31,1994 Rates Dates
------ -------- ------------ -------- --------
Inventory,
Equipment
Loans 134 $30,377,300 $22,900,500 Variable(1) 1995-2009
________________
(1) Variable rates based on the Company's cost of borrowing.
(2) The Company has guaranteed customer and employee bank loans and
customer leases amounting to $3,879,400 and $924,800, respectively
at December 31, 1994. These amounts are not included in the table
above.
25
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 1995 to 2018. Aggregate lease rentals
received under this program were $22,329,500,
$18,985,200 and $18,590,300 in 1994, 1993 and 1992,
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 84 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.
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.
26
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 December 31, 1994, consisted of 280
tractor cabs, 680 trailers and 10 straight delivery
trucks. In addition, the Company owns 60 automobiles
and an airplane. Approximately 79% of the fleet is owned
by the Company and the balance is leased.
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.
27
MANAGEMENT
The Directors and Executive Officers of Roundy's are as
follows:
Position(s) Held with Roundy's
Name Age and Business Experience
- ----------------- --- ------------------------------
Gerald F. Lestina 52 President and Chief Executive
Officer since 1995; President
and Chief Operating Officer
1993-1995; 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 1994; Vice President of
Human Resources 1990-1993
Edward G. Kitz 41 Vice President, Secretary & Treasurer
since 1995; Vice President & Treasurer
1989-1994
Thomas A. Loggia 40 Vice President-Wholesale since 1995;
President of Cardinal Foods, Inc. 1994-
1995 (a subsidiary of the Company); Vice
President-Logistics, Food 4 Less, Inc.
1993-1994; Vice President-Operations,
Wetterau, Inc. 1988-1993
Michael J. Schmitt 46 Vice President-Sales and Development since
1995; Vice President, Northern Region
1992-1994; Vice President and General
Manager of Milwaukee Division 1991; Vice
President of Retail Development 1990-1991
Marion H. Sullivan 48 Vice President of Marketing since 1989
Roger W. Alswager 46 Vice President of Real Estate since 1989
Londell J. Behm 44 Vice President of Advertising since 1987
John M. Granger 48 Vice President of Management Information
Services since 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
Robert E. Bartels 57 Director since 1994 (term expires 1997);
President and Chief Executive Officer of
Martin's Super Markets, Inc., South Bend,
Indiana
28
Charles R. Bonson 48 Director since 1994 (term expires 1997);
President of Bonson's Foods, Inc., Eagle
River, Wisconsin
Lloyd E. Coppersmith54 Director since 1995 (term expires 1998);
President of Ron & Lloyd's, Inc., New
London, 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 1998);
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
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. On April 12, 1995, Roundy's Board of Directors amended the
Roundy's, Inc. By-Laws to increase the number of directors from nine to
ten, and to increase the number of "Retailer Directors" (that is, directors
who are stockholder-customers of Roundy's) to four. There are currently
two vacancies on the Board of Directors. Of the eight current members of
the Board of Directors, two are currently Executive Officers of Roundy's
(Messrs. Lestina and Ranus) and three are "Retailer Directors" (Messrs.
Bonson, Coppersmith and Gundlach). 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; however,
the Roundy's, Inc. Voting Trust is proposed to be amended to provide that
in every third year, Voting Trust Certificate Holders will choose two
Retailer Directors. Therefore, assuming the Roundy's, Inc. Voting Trust
is amended, at any time there should be four Retailer Directors serving.
See VOTING TRUST.
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 December 31, 1994, 14,000 shares of Class A
Common and 1,154,363 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 written consent of Roundy's or (ii) Roundy's
has agreed in writing to repurchase such shares and has
failed to satisfy such obligation.
30
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.
To perfect its lien, Roundy's retains physical
possession of the stock certificate and provides the
stockholder with a photocopy thereof. 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-StockholderCustomers."
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.
31
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, (was amended
and restated in 1983 and was further amended in 1986 and
in 1995), as the successor to an initial voting trust
created at the time of the organization of Roundy's.
The Trust has an indefinite term, although it may be
terminated upon the vote of the Voting Trust Certificate
Holders as provided therein. 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 transferable.
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 eight Directors and two
vacancies on Roundy's Board of 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). The Wisconsin Business Corporation Law
provides shareholders of Wisconsin business
corporations, such as Roundy's, with the right to
dissent from certain corporate actions (for example, a
merger, consolidation, certain amendments to the
Articles of Incorporation, and certain other specified
corporate transactions) and receive "fair value" for
their shares in lieu of any other consideration offered
for such shares in connection with the proposed
transaction or action ("Dissenter's Rights"). Although
the shares of Class A common are held of record by the
Trustees of the Voting Trust, the Voting Trust Agreement
specifies that Voting Trust Certificate holders are
entitled to exercise any Dissenter's Rights which arise
from a proposed corporate action or transaction on the
part of Roundy's, and the Voting Trust Agreement specifies
the procedure for a Voting Trust Certificate holder to notify
the Trustess of his, her or its intention to exercise such
Dissenters' Rights. The Voting Trust Agreement provides
further that: (a) in the event the Voting Trust is
terminated upon the effectiveness of such corporate
action or transaction on the part of Roundy's, then
shares of Class A Common shall be distributed to the
Voting Trust Certificate holder who shall thereafter be
responsible for complying with the appropriate statutory
procedures for obtaining "fair value" for such shares,
and (b) that, if the Voting Trust is not terminated upon
the effectiveness of such corporate action or
transaction on the part of Roundy's, then a Voting Trust
Certificate holder who has notified the Trustees of his,
her or its intention to exercise Dissenters' Rights
shall be deemed to have withdrawn such shares from the
Voting Trust and such shares will be distributed to such
dissenting shareholder in accordance with the Voting
32
Trust Agreement. 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 September 16, 1983 who agreed to the amended
and restated Voting Trust Agreement prior to December
17, 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, and all withdrawals
must take place during the months of February or March.
In addition to the revisions to the Voting Trust
Agreement constituting Amendment 1995-1, the Trustees at
their meeting on April 12, 1995 unanimously voted to
further amend the Voting Trust Agreement to increase the
number of retailer directors to four, and to make
corresponding amendments to the related provisions of
the Voting Trust Agreement (for example, the number of
Retailer-Trustees' terms expiring will now be two in
every third year, meaning there will be two vacancies to
be filled every third year and that the advisory
committee will nominate 5 instead of three to fill 2
seats instead of one). These amendments are not yet
effective and will not become effective until voted on
by the Voting Trust Certificate holders. It is
anticipated that this will occur at a special meeting to
be called as soon as practical, at which meeting the
Voting Trust Certificate holders will also be asked to
vote for the election of the fourth retailer director.
The Trustees do not expect that his will occur for at
least the next several months.
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 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 and Edward G. Kitz), who
shall be officers of Roundy's; two "Independent
Trustees" (currently Robert R. Spitzer serves as one
Independent Trustee - the other Independent Trustee
position is vacant), 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. 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 and Mr. Kitz see "MANAGEMENT."
33
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 December 31, 1994 and January
1, 1994 and for each of the three years in the period
ended December 31, 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 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 United States
Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities
Act and is therefore unenforceable.
34
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 December 31, 1994 F-3
Consolidated Balance Sheets at December 31, 1994
and January 1, 1994 F-4
Statements of Consolidated Stockholders' Equity
for each of the three years in the period
ended December 31, 1994 F-6
Statements of Consolidated Cash Flows for each of
the three years in the period ended December 31, 1994 F-7
Notes to Financial Statements F-8
F-1
Independent auditors' report
To the Stockholders & Directors of Roundy's, Inc.
We have audited the accompanying consolidated balance
sheets of Roundy's Inc. and its subsidiaries as of
December 31, 1994 and January 1, 1994 and the related
statements of consolidated earnings, stockholders'
equity and cash flows for each of the three years in the
period ended December 31, 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 December 31, 1994 and
January 1, 1994 and the results of their operations and
their cash flows for each of the three years in the
period ended December 31, 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 (signature)
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 24, 1995
STATEMENTS of consolidated earnings
For the years ended December 31, 1994, January 1, 1994,
and January 2, 1993
1994 1993 1992
Revenues: -------------- -------------- --------------
Net sales and service fees $2,461,509,600 $2,480,254,200 $2,491,292,900
Other-net 3,892,300 6,526,600 3,290,100
-------------- -------------- --------------
2,465,401,900 2,486,780,800 2,494,583,000
-------------- -------------- --------------
Costs and Expenses:
Cost of sales 2,230,645,500 2,248,336,000 2,252,976,400
Operating and administrative 214,221,900 206,253,600 211,949,500
Interest 9,479,300 12,138,100 13,128,900
-------------- -------------- --------------
2,454,346,700 2,466,727,700 2,478,054,800
-------------- -------------- --------------
Earnings Before Patronage
Dividends 11,055,200 20,053,100 16,528,200
Patronage Dividends 5,300,700 5,134,700
-------------- -------------- -------------
Earnings Before Income Taxes 11,055,200 14,752,400 11,393,500
-------------- -------------- -------------
Provision (Credit) for Income Taxes:
Current-Federal 7,863,700 5,797,000 4,521,500
-State 2,290,100 1,740,200 1,237,000
-Jobs and other tax
credits (448,700) (485,500) (452,100)
Deferred (5,204,000) (1,078,000) (606,000)
-------------- -------------- -------------
4,501,100 5,973,700 4,700,400
-------------- -------------- -------------
Earnings Before Extraordinary Items
and Cumulative Effect of
Accounting Change 6,554,100 8,778,700 6,693,100
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 $ 6,554,100 $ 8,027,700 $ 7,353,100
============== ============== =============
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED balance sheets As of December 31, 1994 and
January 1, 1994
1994 1993
------------ ------------
Assets
Current Assets:
Cash and cash equivalents $ 40,268,800 $ 25,845,600
Notes and accounts receivable,
less allowance for losses,
$11,000,400 and $8,766,500,
respectively 95,105,500 99,826,500
Merchandise inventories 157,195,700 153,169,500
Prepaid expenses 5,774,200 6,956,800
Future income tax benefits 5,691,800 4,281,800
------------ ------------
Total current assets 304,036,000 290,080,200
------------ ------------
Other Assets:
Notes receivable 14,631,300 14,894,700
Other real estate 6,584,200 7,343,000
Deferred expenses and other 7,066,200 7,885,100
Deferred income tax benefit 3,060,000
------------ ------------
Total other assets 31,341,700 30,122,800
------------ ------------
Property and Equipment:
Land 5,883,000 5,100,600
Buildings 43,934,300 39,668,000
Equipment 82,413,000 71,508,900
Capitalized equipment leases 1,550,000 2,300,000
Leasehold improvements 13,429,100 11,939,300
------------ ------------
147,209,400 130,516,800
Less accumulated depreciation
and amortization:
Owned 76,561,200 68,721,000
Leased 1,373,700 1,906,700
------------ ------------
Property and equipment-net 69,274,500 59,889,100
------------ ------------
$404,652,200 $380,092,100
============ ============
See notes to consolidated financial statements.
<PAGE>
1994 1993
------------ ------------
Liabilities and Stockholders' Equity
Current Liabilities:
Notes payable $ $ 139,600
Current maturities of long-term debt 5,678,600 8,920,700
Accounts payable 166,024,700 130,187,600
Accrued expenses 36,036,000 36,778,500
Income taxes 4,483,200 410,900
------------ ------------
Total current liabilities 212,222,500 176,437,300
Long-Term Debt, Less Current Maturities 88,226,700 113,044,700
Deferred Income Taxes 600,000
Other Liabilities 13,784,300 3,944,000
------------ ------------
Total liabilities 314,233,500 294,026,000
------------ ------------
Commitments and Contingencies (Note 10)
Stockholders' Equity:
Common stock:
Voting (Class A) 17,500 19,400
Non-voting (Class B) 1,443,000 1,425,400
------------ ------------
Total common stock 1,460,500 1,444,800
Amount related to recording
minimum pension liability (112,700) (308,700)
Patronage dividends payable
in common stock 3,263,000
Additional paid-in capital 23,159,700 20,388,900
Reinvested earnings 65,911,200 61,278,100
------------ ------------
Total stockholders' equity 90,418,700 86,066,100
------------ ------------
$404,652,200 $380,092,100
============ ============
<PAGE>
<TABLE>
STATEMENTS of consolidated stockholders' equity
For the years ended December 31, 1994, January 1, 1994 and
January 2, 1993
<CAPTION>
Common Stock Patronage
---------------------------------------Dividends Additional
Class A Class B Payable in Paid-in Reinvested
Shares Amount Shares Amount Common Stock Capital Earnings
----------------------------------------------------------------------------
<S> <> <C> <C> <C> <C> <C> <C>
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) 3,029,300
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
Net earnings 6,554,100
Common stock issued 700 900 52,138 65,200 (3,263,000) 3,516,200
Common stock purchased (2,200) (2,800) (38,077) (47,600) (745,400) (1,921,000)
----------------------------------------------------------------------------
Balance, December 31, 1994 14,000 $17,500 1,154,363 $1,443,000 $ 0 $23,159,700 $65,911,200
============================================================================
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
STATEMENTS of consolidated cash flows
For the years ended December 31, 1994, January 1, 1994 and
January 2, 1993
1994 1993 1992
------------ ------------ ------------
Cash Flows From Operating
Activities:
Net earnings $ 6,554,100 $ 8,027,700 $ 7,353,100
Adjustments to reconcile
net earnings to net
cash flows provided by
operating activities:
Depreciation and
amortization 12,756,500 12,913,200 13,350,100
Extraordinary loss on
early extinguishment
of debt 751,000
Cumulative effect of
accounting change (660,000)
Allowance for losses 9,166,600 6,738,600 5,772,900
Gain on sale of property
and equipment and other
productive assets (1,087,700) (3,680,300) (1,105,700)
Increase in closed
facility reserve 8,000,000 1,000,000 500,000
Patronage dividends payable
in common stock 3,263,000 3,210,000
(Increase) decrease in operating
assets, net of the effects
of disposition:
Accounts receivable (5,012,600) (13,819,500) (3,462,100)
Merchandise inventories (4,026,200) 11,038,700 (2,273,400)
Prepaid expenses 1,182,600 (2,105,000) (219,900)
Future income tax benefits (1,410,000) 295,000 (1,218,000)
Other real estate 758,800 (802,300) 245,200
Deferred expenses and
other assets 323,300 (27,700) (330,700)
Deferred income tax benefit (3,060,000)
Increase (decrease) in operating
liabilities, net of the
effects of disposition:
Accounts payable 35,837,100 7,715,000 (4,432,700)
Accrued expenses (1,582,700) (227,100) (2,393,000)
Income taxes 4,072,300 (724,400) (16,700)
Deferred income taxes (734,000) (1,373,000) 232,000
Other liabilities 3,015,300 796,200 757,800
------------ ------------ -------------
Net cash flows provided by
operating activities 64,753,400 29,779,100 15,308,900
------------ ------------ -------------
Cash Flows From Investing Activities:
Capital expenditures (22,316,600) (13,354,800) (15,332,300)
Proceeds from sale of
property and equipment and
other productive assets 1,753,200 11,017,900 3,096,800
(Increase) decrease in notes
receivable 830,400 4,602,500 (3,976,500)
<PAGE>
------------ ------------ -------------
Net cash flows (used in)
provided by investing
activities (19,733,000) 2,265,600 (16,212,000)
------------ ------------ -----------
- -
Cash Flows From Financing Activities:
Proceeds from long-term
borrowings 45,000,000 48,000,000
Principal payments and
defeasance of long-term
debt (24,818,000) (68,637,400) (51,862,400)
Increase (decrease) in notes
payable and current
maturities of long-term debt (3,381,700) 1,015,100 909,200
Proceeds from sale of common
stock 319,300 1,951,700 884,000
Common stock purchased (2,716,800) (5,440,500) (3,790,800)
------------ ------------ ------------
Net cash flows (used in)
financing activities (30,597,200) (26,111,100) (5,860,000)
------------ ------------ ------------
Net Increase (Decrease) in Cash
and Cash Equivalents 14,423,200 5,933,600 (6,763,100)
Cash And Cash Equivalents,
Beginning Of Year 25,845,600 19,912,000 26,675,100
------------ ------------ -------------
Cash And Cash Equivalents,
End Of Year $ 40,268,800 $ 25,845,600 $ 19,912,000
============ ============ =============
Cash Paid During The Year For:
Interest $ 9,775,300 $ 13,100,200 $ 14,482,100
Income Taxes 5,163,300 7,805,700 5,703,300
See notes to consolidated financial statements.
<PAGE>
NOTES to consolidated financial statements
1. SUMMARY OF 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 December 31, 1994 and January 1, 1994
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.
Cash and cash equivalents--The company considers all
highly liquid investments, with maturities of three months
or less when acquired, to be cash equivalents.
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.
Closed facility costs--When a facility is closed the
remaining investment, net of expected salvage value, is
expensed. For properties under lease agreements, the
present value of any remaining future liability under the
lease, net of expected sublease recovery, is also
expensed. The amounts charged to operations for the
present value of these remaining future liabilities were
$8,000,000, $1,000,000 and $500,000 in 1994, 1993 and
1992, respectively.
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.
<PAGE>
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 transacted 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 years
ended January 1, 1994 and January 2, 1993 were payable 30%
in cash. There were no patronage dividends for the year
ended December 31, 1994 because the company did not meet
the requirement to increase the book value of its common
stock by 10%.
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
$7,569,700 and $9,661,400 at December 31, 1994 and January
1, 1994, respectively. Long-term notes receivable at
December 31, 1994 and January 1, 1994 are net of an
allowance for losses of $916,000 and $1,483,000,
respectively.
<PAGE>
5. LONG-TERM DEBT
Long-term debt, exclusive of current maturities, consists
of the following at the respective year-ends:
1994 1993
------------ ------------
Senior unsecured notes payable:
10.31%, due 1996 to 1999 $ 6,000,000 $ 15,250,000
9.26%, due 1996 to 2001 15,000,000 17,500,000
7.57% to 8.26%, due 1996 to 2008 21,600,000 22,300,000
6.94%, due 1997 to 2003 45,000,000 45,000,000
Notes payable under revolving
credit agreements 10,000,000
Other long-term debt 391,800 1,683,900
Obligations under capitalized leases 234,900 1,310,800
------------ ------------
Total $ 88,226,700 $113,044,700
============ ============
At December 31, 1994, $70,000,000 was available to the
company under its revolving credit agreements. 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 $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 was considered to be defeased and the
liability was 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:
1995 5,470,900
1996 4,723,100
1997 11,654,100
1998 11,656,800
1999 11,659,700
Thereafter 48,298,100
<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, was approximately $91,240,000 and
$126,700,000 as of December 31, 1994 and January 1, 1994,
respectively.
<PAGE>
NOTES to consolidated financial statements continued
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, each 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
yearend book value was $77.40, $71.65 and $65.10 for
1994, 1993 and 1992, 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 28, 1991 30,000 10,000 $53.75
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) 53.10-65.10
-------- ------- ------------
Outstanding, January 1, 1994 43,167 18,500 53.10-65.10
Exercised (3,667) 58.75-65.10
-------- ------- -------------
Outstanding, December 31, 1994 39,500 18,500 $53.10-$65.10
======== ======= =============
Available for grant after
December 31, 1994 16,500 6,500
======== =======
<PAGE>
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 December 31, 1994,
options were exercisable for 26,566 shares at $53.10-$65.10
per share.
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 1994, 1993 and
1992. As of December 31, 1994, 7,800 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.
<PAGE>
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
December 31, 1994 and January 1, 1994:
1994 1993
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
----------- ---------- ----------- ----------
Actuarial present value of:
Vested benefit
obligation $18,742,100 $2,816,400 $18,843,000 $ 3,234,100
=========== ========== =========== ===========
Accumulated benefit
obligation $20,704,000 $2,994,100 $21,103,200 $ 3,425,600
=========== ========== =========== ===========
Projected benefit
obligation $24,009,500 $2,994,100 $25,118,300 $ 3,425,600
Plan assets (primarily
listed stocks and
bonds) at market value 24,006,500 2,119,400 25,688,200 1,978,300
----------- ---------- ----------- ------------
Projected benefit obligation
(in excess of) or less
than plan assets (3,000) (874,700) 569,900 (1,447,300)
Unrecognized net (gain)
or loss (945,200) 189,700 (688,100) 519,700
Prior service cost not yet
recognized in net periodic
pension cost 395,600 68,300 595,700 73,100
Unrecognized net asset (1,243,500) (1,404,300)
Adjustment required to
recognize minimum
liability (257,900) (592,800)
----------- ---------- ----------- -----------
Accrued pension cost $(1,796,100) $ (874,600) $ (926,800) $(1,447,300)
=========== ========== =========== ===========
The assumptions used in the accounting were as follows:
1994 1993 1992
------ ------ ------
Discount rate 8.25% 7.50% 9.50%
Rate of increase in compensation levels 4.00% 4.00% 5.00%
Expected long-term rate of return of assets 9.00% 9.00% 9.50%
<PAGE>
The changes in actuarial assumptions in 1994 resulted in a
$3,218,000 decrease in the projected benefit obligation in
1994, and is expected to result in an insignificant
decrease in the 1995 pension expense. In accordance with
Statement of Financial Accounting Standards No. 87,
"Employers' Accounting for Pensions," the company has
recorded a minimum liability of which $112,700 and
$308,700, net of income taxes, is reflected as a
reduction of stockholders' equity in 1994 and 1993,
respectively.
Net pension cost for the foregoing defined benefit plans
includes the following components:
1994 1993 1992
---------- ---------- ----------
Service cost-benefits earned
during the year $1,756,800 $1,314,800 $1,263,200
Interest on projected benefit
obligation 2,020,600 1,881,000 1,658,900
Actual (return) on plan assets 1,013,200 (2,251,200) (2,007,400)
Net amortization and deferral (3,625,300) (247,500) (321,200)
---------- ---------- ----------
Net pension cost $1,165,300 $ 697,100 $ 593,500
========== ========== ==========
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 $3,705,300, $3,437,500 and $3,500,400 in 1994,
1993 and 1992, 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 $507,500, $513,700 and $508,200 in
1994, 1993 and 1992, 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.
<PAGE>
NOTES to consolidated financial statements continued
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.
Federal income tax at the statutory rates of 35% in 1994
and 1993 and 34% in 1992 and income tax expense as
reported, are reconciled as follows:
1994 1993 1992
--------- ---------- ----------
Federal income tax at statutory rates $3,869,300 $5,163,300 $3,873,800
State income taxes, net of federal
tax benefits 720,000 1,131,100 816,400
Jobs and other tax credits (448,700) (485,500) (452,100)
Other-net 360,500 164,800 462,300
---------- ---------- ----------
Income tax expense $4,501,100 $5,973,700 $4,700,400
========== ========== ==========
The approximate tax effects of temporary differences at
December 31, 1994 and January 1, 1994 are as follows:
<TABLE>
<CAPTION>
1994 1993
-----------------------------------------------------------------------
Assets Liabilities Total Assets Liabilities Total
----------- ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts $ 2,613,000 $2,613,000 $1,652,000 $1,652,000
Merchandise inventories $ (817,200) (817,200) $ (466,200) (466,200)
Employee benefits 2,580,000 2,580,000 2,296,000 2,296,000
Accrued expenses not
currently deductible 1,316,000 1,316,000 799,000 799,000
Other 1,000 1,000
----------- ----------- ---------- ---------- ----------- ----------
Current 6,509,000 (817,200) 5,691,800 4,748,000 (466,200) 4,281,800
----------- ----------- ---------- ---------- ----------- ----------
Allowance for doubtful
accounts 359,000 359,000 582,000 582,000
Depreciation and amortization (2,865,000) (2,865,000) (2,998,000) (2,998,000)
Employee benefits 2,883,000 2,883,000 1,745,000 1,745,000
Accrued expenses not
currently deductible 2,676,000 2,676,000
Other 7,000 7,000 71,000 71,000
----------- ----------- ---------- ---------- ------------ ----------
Noncurrent 5,925,000 (2,865,000) 3,060,000 2,398,000 (2,998,000) (600,000)
----------- ----------- ---------- ---------- ------------ ----------
Total $12,434,000 $(3,682,200) $8,751,800 $7,146,000 $(3,464,200) $3,681,800
=========== =========== ========== ========== ============ ==========
</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
----------- ----------- -----------
1992 $36,778,100 $ 363,400 $18,590,300
1993 36,675,800 398,800 18,985,200
1994 36,268,800 448,300 22,329,500
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 December 31, 1994:
OPERATING CAPITALIZED
LEASES LEASES
------------ -----------
1995 $ 33,920,300 $247,600
1996 29,169,700 180,800
1997 25,811,800 76,000
1998 24,636,400
1999 23,827,700
Thereafter 216,515,700
------------ -----------
Total $353,881,600 504,400
============
Amount representing interest 61,800
-----------
Present value of net minimum lease payments 442,600
Current portion 207,700
-----------
Long-term portion $234,900
===========
Total minimum rentals to be received in the future under non-
cancelable subleases as of December 31, 1994 are $285,161,000.
The company has guaranteed customer and employee bank loans
and customer leases amounting to $3,879,400 and $924,800,
respectively, at December 31, 1994.
The company is involved in various claims and litigation
arising in the normal course of business. In the opinion
of management, the ultimate resolution of these actions
will not have a material effect on the company's
financial position and results of operations.
11.EARNINGS PER SHARE
Earnings per share are not presented because they are
not deemed meaningful. See Notes 3 and 7 relating to
patronage dividends and common stock repurchase
requirements.
<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_____
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
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 April ____, 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 yearend immediately preceding the date of
their issuance.
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.
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
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 accountants) 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
stockhold ers 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 nonqualified 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
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.
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 required to be delivered to assure the
Secretary that the Corporation will receive
unencumbered title to the shares to be repurchased.
Neither such acknowledgment 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 acknowledgment 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
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 acknowledgment 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.
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.
(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.
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.
(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
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 com plete 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.
(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.
(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.
Exhibit E
POLICY REGARDING ISSUANCE AND SALES OF ROUNDY'S, INC. STOCK
(As Adopted by the Board of Directors on December 7, 1993)
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 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 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. Eligible purchasers wishing to
purchase shares during any such "window" period must
deliver to the Company, within such "window" period, a
signed subscription agreement, in the form specified by
the Company, along with full payment of the subscription
price of the shares.
(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
Deficit will be predetermined 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) 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.
(C) 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.
(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.
(E) Closed Window Periods. Except as expressly provided
otherwise in Paragraphs (B) and (D) above, shares which
any Retailer would have been entitled to purchase pursuant
to this subsection (4)(I) in any "window" period, but for
the fact that such "window" period was closed pursuant
to Section (2) above, shall not increase the number of
shares which such Retailer shall be entitled to purchase
in any subsequent "window" period or at any other time.
(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.
(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, except that Section (2)
hereof, as revised, will be effective as of January 1, 1995.
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.
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.
3.6 Amendment to By-Laws Relating to Number of Directors,
Adopted April 12, 1995.
FILED HEREWITH.
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. 266296.
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 10K 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 10K 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 10K 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.
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
10K 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.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement.
FILED HEREWITH.
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. 266296.
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 December 31, 1994, filed with the
Commission on March 31, 1995, 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.
266296.
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.
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.
(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
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.
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 Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the town of Pewaukee, State of Wisconsin,
on April 28, 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
posteffective 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, the Amendment No. 1 to Registration
Statement has been signed this 28th day of April, 1995 by
the following persons in the capacities indicated:
Signature Title
--------- -----
GERALD F. LESTINA Director, President and
- ----------------- Chief Executive Officer
Gerald F. Lestina
ROBERT D. RANUS Director, Vice President and
- --------------- Chief Financial Officer and
Robert D. Ranus Principal Accounting Officer
Signature Title
--------- -----
GERALD F. LESTINA Director
- -------------------
Gerald F. Lestina
ROBERT D. RANUS Director
- -------------------
Robert D. Ranus
ROBERT D. RANUS ATTORNEY-IN-FACT Director
- --------------------------------
Charles R. Bonson
ROBERT D. RANUS ATTORNEY-IN-FACT Director
- --------------------------------
Gary N. Gundlach
LLOYD E. COPPERSMITH Director
- --------------------
Lloyd E. Coppersmith
ROBERT D. RANUS ATTORNEY-IN-FACT Director
- --------------------------------
George C. Kaiser
ROBERT D. RANUS ATTORNEY-IN-FACT Director
- --------------------------------
Brenton H. Rupple
ROBERT D. RANUS ATTORNEY-IN-FACT Director
- --------------------------------
Robert E. Bartels
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 S2 (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.
3.6 Amendment to By-Laws Relating to Number of Directors,
Adopted April 12, 1995.
FILED HEREWITH.
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. 266296.
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 10K 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 10K 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 10K for the fiscal year ended January
2, 1993, filed with the Commission on March 30,
1993, Commission File No. 266296.
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.
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
10K 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.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement.
FILED HEREWITH.
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. 266296.
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 December 31, 1994, filed with
the Commission on March 31, 1995, 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. 266296.
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.
EXHIBIT 3.6
AMENDMENT TO BY-LAWS RELATING
TO NUMBER OF DIRECTORS
ADOPTED APRIL 12, 1995
Article 0.03 of the corporation by-laws is hereby
amended by deleting the words "nine (9)" and replacing
them with "ten (10)"; and
Article 3.02 of the corporation by-laws is hereby
amended by deleting the following words "each class
having three Directors" contained in the first sentence
and replacing them with "two of such classes having
three Directors and the third such class having four
directors"; and
Article 3.02 of the corporation by-laws is hereby
amended by deleting the word "three" contained in the
third sentence and replacing it with "four"; and
Article 3.02 of the corporation by-laws is hereby
amended by adding, at the end of the third sentence,
the words "one of whom shall be a member of each three
director class and two of whom shall be members of the
four-director class."
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 of 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
abasis 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 the
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
EXHIBIT 9(c)
AMENDMENT 1995-1
TO THE ROUNDY'S, INC. VOTING TRUST AGREEMENT
The complete text of Amendment 1995-1 is set out below.
Text deleted is stricken through. Text added is double
underlined.
AMENDMENT 1995-1
Part 1. Amend Paragraph 1 of the Voting Trust Agreement to read
in its entirety as follows:
"1. Extension of Existing Trust. The
existing Voting Trust shall be continued and extended
in accordance with the terms and conditions of this
Agreement, as amended, with respect to all shares of
Voting Stock deposited by the Security Holders
hereunder, until terminated in accordance
with the terms hereof."
***********************
Part 2. Amend subparagraph 5(b)(i) of the Voting Trust
Agreement by inserting after the first sentence thereof
the following:
"Such notice shall contain or be accompanied by
all of the information required by the Wisconsin
Business Corporation Law ("WBCL") to be included in or
provided with the notice of a shareholders' meeting
called for the same purpose or purposes."
***********************
Part 3. Add a new subparagraph 5(e) to the Voting Trust
Agreement, to read as follows (renumbering subsequent
subparagraphs of Paragraph 5 appropriately):
"(e) In the event the holders of the Voting
Stock are called upon to vote to approve a merger,
consolidation, amendment of the Articles of
Incorporation, or any other transaction as to which
such holders are entitled to exercise dissenters'
rights under subchapter 13 of the WBCL (referred to
herein as a "Dissenters' Rights Proposal"), each
Security Holder shall be entitled to exercise such
dissenters' rights with respect to any or all of the
shares deposited by such Security Holder to the Voting
Trust hereunder, as provided in this subparagraph (e).
Prior to the meeting of Security Holders held pursuant
to subparagraph 5(b) hereof at which the Dissenters'
Rights Proposal is to be voted upon, a Security Holder
("Dissenting Security Holder") may notify the Trustees,
in writing, of his or her desire to exercise
dissenters' rights with respect to the Dissenters'
Rights Proposal. Such notice shall be received by the
Trustees not later than five (5) days prior to the
meeting of Security Holders, and shall specify the
number of shares of Voting Stock deposited to the
Voting Trust by such Security Holder as to which such
dissenters' rights are to be exercised ("Dissenting
Shares"). The Dissenting Security Holder shall not
cast the vote attributable to any of his or her
Dissenting Shares in favor of the Dissenters' Rights
Proposal. If the Security Holders vote to approve the
Dissenters' Rights Proposal and direct the Trustees to
vote the shares held hereunder in favor of its
approval, then, notwithstanding the preceding
subparagraph 5(b), the Trustees shall refrain from
voting in favor of the Dissenters' Rights Proposal as
to that number of shares deposited hereunder which is
equal to the total number of all Dissenting Shares.
The Trustees shall also deliver to Roundy's any notice
or other communication, and shall take all such other
actions, as may be required under the WBCL to be
delivered or taken prior to the approval of the
Dissenters' Rights Proposal by the shareholders of
Roundy's, to perfect dissenters' rights as to all
Dissenting Shares. If this Agreement and the Voting
Trust are terminated upon the effectiveness of the
Dissenters' Rights Proposal, the Trustees shall
distribute to the Dissenting Security Holders those
shares deposited hereunder as to which such dissenters'
rights have been so perfected (each such Dissenting
Security Holder to receive that number of such shares
which is equal to the number of his or her Dissenting
Shares). Thereafter, each such Dissenting Security
Holder shall be solely responsible for the continued
perfection and prosecution of his or her dissenters'
rights with respect to such shares, and the Trustees
shall have no liability or responsibility therefor. If
this Agreement and the Voting Trust do not terminate
upon the effectiveness of the Dissenters' Rights
Proposal, then the Dissenting Shares shall be deemed to
have been withdrawn from the Voting Trust hereunder,
effective upon the effectiveness of the Dissenters'
Rights Proposal, and the Trustees shall distribute such
shares to the Dissenting Security Holders in the same
manner and with the same effect as if this Agreement
had so terminated."
Amend the first sentence of subparagraph 8(c) to
read as follows:
"(c) The maximum number of shares of Voting
Stock which may be withdrawn from the Voting Trust in
any calendar year (excluding shares deemed to have been
withdrawn pursuant to subparagraph 5(e) hereof) shall
be that number which represents one-third of the number
of shares of Voting Stock outstanding at the beginning
of such calendar year."
**********************
Part 4. Amend subparagraph 5(g) (formerly 5(f)) to read in its
entirety as follows:
"(g) Except with regard to the election
of directors other than directors who are elected
by vote of the Security Holders under subparagraph 5(c),
the Trustees, in their capacity as shareholders of
Roundy's, shall not execute a written consent to any
resolution or action of shareholders taken without a
meeting, nor shall any Trustee propose any action or
make any motion at any meeting of shareholders which
was not part of the agenda as contained in the notice
to shareholders; but if any other shareholder shall
make any such motion or proposal from the floor, the
Trustees may vote in their respective discretion and
all shares held by the Voting Trust shall be voted in
accordance with the vote of a majority of then acting
Trustees, if a majority is then present."
***********************
Part 5. Add a new subparagraph 6(c) to the Voting Trust
Agreement, to read in its entirety as follows:
"(c) Merger or Reorganization. If, in the
case of a merger or other such change in or
reorganization of Roundy's, the Trustees shall receive
stock in any merged, consolidated, new or different
corporation in exchange for or in respect of the Voting
Stock deposited hereunder, the Trustees shall hold the
stock so received, and the rights and obligations of
the Trustees and the Security Holders hereunder shall,
for all purposes, be treated as applying to the stock
so received, as though such stock was part of the
Voting Stock originally deposited hereunder in respect
of or in exchange for which it was received, and the
Trustees may require the Security Holders to surrender
their Voting Trust Certificates to them in exchange for
new Voting Trust Certificates, modified to describe the
interest then represented by such Voting Trust
Certificates. Any revenue stamps or other governmental
charges incident to such exchange shall be paid by the
Security Holders. Following any such merger,
reorganization or change in which Roundy's is not the
surviving or continuing corporation, all references
herein to "Roundy's" shall be deemed references to such
surviving or continuing corporation whose stock is then
registered in the names of the Trustees and held by
them hereunder."
************************
Part 6. Amend subparagraph 5(f) (formerly 5(e)) of the Voting
Trust Agreement by deleting the first sentence thereof,
as follows:
"(f) A majority of the Trustees
may execute a proxy or proxies naming one or more
persons to represent all the Trustees at any meeting of
shareholders, provided that such written proxy shall
specify the issues on which votes are to be cast
pursuant thereto and shall further specify, with
respect to each such issue, whether such vote is being
cast in accordance with the direction of the Security
Holders or of a majority of the Trustees. No person
appointed as proxy by the Trustees shall be granted the
authority to vote in his discretion on any issue in a
meeting of shareholders; if a vote of a majority of
Trustees may not be obtained on any issue as to which
the Trustees are empowered to vote in their discretion,
the shares held by the Trust shall not be voted."
Amend the heading to Paragraph 9 of the Voting
Trust Agreement to read as follows:
"9. Trustees: Appointment, Terms, Resignation,
Removal and Manner of Acting."
Add a new paragraph at the end of Paragraph 9 of
the Voting Trust Agreement reading as follows:
"The Trustees may act in all matters by
unanimous action of all Trustees expressed in writing
and signed without a meeting, or by or through a
majority of their number in person or by proxy at a
meeting duly held, pursuant to such rules and
regulations as they may adopt from time to time. The
act of such majority shall in all respects be the act
of the Trustees. A majority of the Trustees then in
office, present in person or by proxy, shall constitute
a quorum at any meeting of the Trustees. At any
meeting of the Trustees (or in any written consent of
the Trustees), any Trustee may act by proxy, and such
proxy may or may not be a Trustee. The Trustees shall
keep a record of their proceedings (which may be
included in the record of the minutes of the meetings
of Roundy's shareholders) and may adopt their own rules
of procedure."
*************************
Part 7. Make the following additional conforming and clarifying
amendments to the Voting Trust Agreement by amending
the provisions identified below as follows:
Subparagraph 5(b)(i) (first sentence):
"(b)(i) Not less than ten days (but in the
case of a meeting to which subparagraph (e) of this
Paragraph 5 applies, 15 days) before each regular or
special meeting of Roundy's shareholders (or such
greater period as may be required by applicable law),
law for notice to be given of such meeting of
shareholders), each Security Holder shall be given
notice by first class mail of the date, time, place and
purpose of such shareholders' meeting, and of a date
(not sooner than five days after such notice has
been given) and a time and place at which a meeting of
Security Holders shall be held to consider such matters
as shall be submitted to a vote of Security Holders."
Subparagraph 5(b)(i) (second-to-last sentence):
"Every matter to be submitted to a vote of the
Class A shareholders of Roundy's at the subsequent
meeting of shareholders (except such matters as are
specified in subparagraph (c)) shall be submitted to a
vote of Security Holders at such meeting, and (except
as otherwise provided in subparagraphs (d) and (e))
the Trustees shall be bound to vote all shares deposited
to the Voting Trust in accordance with the direction of
a majority of a quorum at the meeting of Security Holders."
Subparagraph 5(b)(ii) (last sentence):
"A majority of the Security Holder votes present
in person or by proxy at such meeting shall be required
to adopt any action and the Trustees shall be bound to
vote all shares deposited to the Voting Trust in
accordance with the direction of a majority of a quorum
at the meeting of Security Holders, excepting as
provided in subparagraphs 5(c), (d) and (e),
and if necessary, to call a meeting of the stockholders
to do so."
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Amendment No. 1 to the Registration Statement of
Roundy's, Inc. on Form S-2 of our reports dated
February 24, 1995, included and incorporated by
reference in the Annual Report on Form 10-K of
Roundy's, Inc. for the year ended December 31, 1994,
and to the use of our report dated February 24, 1995,
appearing in the Prospectus, which is part of this
Registration Statement. We also consent to the
reference to us under the heading "Experts" in such
Prospectus.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
April 28, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROUNDY'S,
INC. FORM 10-K 405 FOR THE PERIOD ENDED 12-31-94 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 40,268,800
<SECURITIES> 0
<RECEIVABLES> 95,105,500
<ALLOWANCES> 0
<INVENTORY> 157,195,700
<CURRENT-ASSETS> 304,036,000
<PP&E> 147,209,400
<DEPRECIATION> (77,934,900)
<TOTAL-ASSETS> 404,652,200
<CURRENT-LIABILITIES> 212,222,500
<BONDS> 88,226,700
<COMMON> 1,460,500
0
0
<OTHER-SE> 88,958,200
<TOTAL-LIABILITY-AND-EQUITY> 404,652,200
<SALES> 2,461,509,600
<TOTAL-REVENUES> 2,465,401,900
<CGS> 2,230,645,500
<TOTAL-COSTS> 2,230,645,500
<OTHER-EXPENSES> 205,055,300
<LOSS-PROVISION> 9,166,600
<INTEREST-EXPENSE> 9,479,300
<INCOME-PRETAX> 11,055,200
<INCOME-TAX> 4,501,100
<INCOME-CONTINUING> 6,554,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,554,100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
