As Filed with the United States Securities and Exchange
Commission on April 26, 1996
Registration No. 33-57505
________________________________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
POST-EFFECTIVE 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
3,800 Shares Class A (Voting) Common Stock
246,917 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
stockholder-customers of Roundy's who have ceased to do
business with Roundy's. See "EXCHANGE OF CLASS A COMMON FOR
CLASS B COMMON."
This offering is not underwritten. There can be no
assurance that all or any part of the securities offered
hereby will be sold. The transfer of shares is restricted
and there is and will be no market for
Roundy's Stock.
CERTAIN CONSIDERATIONS RELATED TO THE SECURITIES OFFERED
HEREBY ARE DISCUSSED UNDER "FACTORS TO BE CONSIDERED"
ORS 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
ENTATION 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 $ 323,570
________________________________________________________________________
Class B Common Book Value None $21,024,983
========================================================================
(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 30, 1995, was $85.15.
The date of this Prospectus is May __, 1996.
<PAGE>
TABLE OF CONTENTS
Items Page
Available
Information................................................... i
Incorporation of Certain Documents by Reference............... ii
Prospectus Summary............................................ 1
Factors to be Considered...................................... 4
Market for Roundy's Stock and Related Stockholder Matters..... 6
Plan of Distribution.......................................... 7
Terms of Offering............................................. 7
Use of Proceeds............................................... 10
Exchange of Class A Common for Class B Common................. 10
Repurchase of Shares.......................................... 10
Capitalization................................................ 13
Selected Financial Information................................ 14
Management's Discussion and Analysis of
Results of Operations and Financial Condition............... 15
The Company................................................... 19
Management.................................................... 31
Description of Stock.......................................... 33
Voting Trust.................................................. 35
Legal Matters................................................. 37
Experts....................................................... 37
Indemnification............................................... 37
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
<PAGE>
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.
i
Roundy's has filed a Registration Statement under the
Securities Act of 1933, as amended, with respect to the
issuance of the shares of Roundy's Stock offered hereby.
For further information, reference is made to such
Registration Statement, of which this Prospectus is a part,
and to the exhibits thereto, which are listed in such
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates certain documents by
reference which are not delivered herewith. The following
documents filed with the Commission under the 1934 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 30,
1995 (the "1995 Form 10-K");
(b) All other reports filed pursuant to Section 13(a)
or 15(d) of the 1934 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.
<PAGE>
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, Kentucky, Missouri, Arkansas,
Pennsylvania, Tennessee and West Virginia. References in
this Prospectus to the "Company" mean Roundy's, Inc. and its
subsidiaries. References in this Prospectus to "Roundy's"
mean Roundy's, Inc. excluding its subsidiaries. The Company
also owns and operates ten retail warehouse food stores
under the name "Pick 'n Save," five limited assortment food
stores under the name "Mor For Less" and seven conventional
stores under the name "Cardinal Foods," "Village Market" 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 896 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 68% of Roundy's Stock (including 100% of
the outstanding Class A Common) is owned by the owners of
134 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.
<PAGE>
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 stockholder-
customers, if and when any such patronage dividends are
declared. See "Basic Features of Offering" below. While
dividends, other than patronage dividends, may be paid on
either class of Roundy's Stock, it is not anticipated that
any such dividends will be paid in the foreseeable future.
See "MARKET FOR ROUNDY'S STOCK AND RELATED STOCKHOLDER
MATTERS" below. In the event of the liquidation of
Roundy's, shares of Class A Common and Class B Common
will share ratably in the net assets of the Company.
See "DESCRIPTION OF STOCK."
All Class A Common outstanding on the date of this
Prospectus is owned of record by the Trustees of 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."
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:
<PAGE>
(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."
<PAGE>
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
----------------------------------------
1995 1994 1993
(Dollars in Thousands)
Earnings Statement Data:
Net Sales and Service Fees..........$2,488,196 $2,461,510 $2,480,254
Earnings Before Patronage
Dividends and Income Taxes....... 20,251 11,055 20,053
Patronage Dividends................. 5,129 0 5,301
Net Earnings........................ 9,022 6,554 8,028
Balance Sheet Data:
Total Assets........................ 407,337 404,652 380,092
Working Capital..................... 90,740 91,814 113,643
Long-term Debt (less current
maturities)...................... 78,850 88,227 113,045
Stockholders' Equity(1)............. 100,033 90,419 86,066
(1) Includes redeemable common stock. Also includes patronage
dividends payable in Class B Common of $3,405,000 and
$3,263,000 in 1995 and 1993, 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."
<PAGE>
FACTORS TO BE CONSIDERED
Lack of Market for Roundy's Stock
The shares offered hereby may not be sold or otherwise
transferred or pledged by the record holder thereof without
Roundy's written consent. Although Roundy's is obligated
under its current Stock Redemption Policy to repurchase its
shares from a customer which has terminated its business
relationship with Roundy's and which tenders such stock for
repurchase, this obligation is limited in various respects,
including (without limitation) as to the maximum amount
which Roundy's will pay for stock repurchases in any fiscal
year. Further, the Stock Redemption Policy, and therefore,
Roundy's obligation to repurchase shares of Roundy's stock,
may be modified or rescinded at any time without prior
notice. See "REPURCHASE OF SHARES."
Limitations on Investment Return
Although Roundy's may pay patronage dividends to its
stockholder-customers in certain circumstances, no assurance
can be given as to when or whether patronage dividends will
be paid in the future. 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.
<PAGE>
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."
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. With respect to the election of four
Retailer Directors (one in each year and 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.
<PAGE>
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."
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. As of December 30, 1995, all of the outstanding
shares of Roundy's Class A (voting) Common Stock were held
of record by the Roundy's, Inc. Voting Trust. There is also
no market for Roundy's Voting Trust Certificates and there
were 76 holders of such Certificates on December 30, 1995.
On December 30, 1995 an aggregate of 225 persons held shares
of Roundy's Class B Common and/or Voting Trust Certificates.
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.
<PAGE>
PLAN OF DISTRIBUTION
The shares offered hereby are being offered only by
Roundy's, through its officers, directors and employees.
Roundy's is primarily concerned with attracting
stockholders who can effectively use the services of
Roundy's and whose trade with Roundy's will be mutually
beneficial. Sale of shares offered hereby is limited
primarily to individuals, partnerships or corporations which
are engaged in the operation of retail food stores and which
purchase merchandise from or through Roundy's. Company
employees whose duties consist of sales of merchandise to
retail food stores are not authorized to accept stock
subscriptions or to sell shares of stock to any person. No
salesmen or securities dealers are or ever have been
employed for the sale of Roundy's Stock, and no officer,
director or employee directly or indirectly receives any
commission, bonus, or other separate compensation for sales
of Roundy's Stock.
TERMS OF OFFERING
Limitation on Offerees and 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
<PAGE>
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.
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.
<PAGE>
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 1997 (for example)
as patronage dividends accrued with respect to purchases
from Roundy's during 1996 will be valued at the Book Value
of outstanding shares determined as of the end of the
Roundy's 1996 fiscal year.
The Book Value of outstanding Roundy's Stock (both
Class A Common and Class B Common) at the end of the 1995
fiscal year was $85.15 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."
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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), 36,663 shares of Class B Common are expected
to be repurchased in 1996 at the Book Value per share as of
December 30, 1995 of $85.15, for a total repurchase
obligation of $3,121,854. In addition, based upon such pend
ing requests, Roundy's presently expects to repurchase
21,776 shares in 1997, 15,764 shares in 1998, 11,591 shares
in 1999, and 9,708 shares in 2000. The repurchase price in
each year after 1996 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 1996 may change based upon receipt of additional
repurchase requests after December 30, 1995 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
<PAGE>
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.
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.
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated
capitalization of the Company as of December 30, 1995:
To Be Out-
standing If
All Stock
Offered Here-
Outstanding by is Sold(1)
------------ -------------
SHORT-TERM INDEBTEDNESS:
Current maturities of
long-term debt.................$ 3,776,500 $ 3,776,500
----------- -----------
Total short-term debt....$ 3,776,500 $ 3,776,500
=========== ===========
LONG-TERM INDEBTEDNESS:
Senior unsecured notes payable:
9.26%, due 1997 to 2001.....$12,500,000 $12,500,000
7.57% to 8.26%, due
1997 to 2008................ 20,900,000 20,900,000
6.94%, due 1997 to 2003..... 45,000,000 45,000,000
Other long-term debt........... 450,200 450,200
----------- -----------
Total long-term debt $78,850,200 $78,850,200
=========== ===========
CAPITAL STOCK:
Class A Common, $1.25 par
value, 60,000 shares
authorized.................. 13,400 shares 17,200 shares
Class B Common, $1.25 par
value, 2,400,000 shares
authorized (2).............. 1,121,399 shares 1,408,644 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) Share amounts include redeemable common stock. Over the past
several years, Roundy's has issued shares of Roundy's Class B
Common as the major portion of its patronage dividend payments.
(See "THE COMPANY.") It is expected that shares of Roundy's Class
B Common will be issued in this manner in the future.
<PAGE>
SELECTED FINANCIAL INFORMATION
The selected financial information for the five-year
period ended December 30, 1995 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)
1995 1994 1993 1992 1991
Net sales and
service fees.....$2,488,196 $2,461,510 $2,480,254 $2,491,293 $2,534,418
Earnings before
patronage dividends
and income taxes.. 20,21 11,055 20,053 16,528 14,826
Patronage dividends 5,129 0 5,301 5,135 3,305
Earnings before income
taxes............ 15,122 11,055 14,752 11,393 11,521
Net earnings........ 9,022 6,554 8,028 7,353 6,813
Total assets........ 407,337 404,652 380,092 390,148 390,797
Long-term debt...... 78,850 88,227 113,045 135,420 139,283
Stockholders'
equity(1)........ 100,033 90,419 86,066 78,573 70,917
Book Value per share 85.15 77.40 71.65 65.10 58.75
Ratio of current
assets to current
liabilities...... 1.43:1 1.43:1 1.64:1 1.70:1 1.66:1
Ratio of long-term
debt to stockholders'
equity............ .79:1 .98:1 1.31:1 1.72:1 1.96:1
(1) Includes redeemable common stock. Also includes patronage
dividends payable in Class B Common of $3,405,000,
$3,263,000, $3,210,000 and $2,212,000 for 1995, 1993, 1992
and 1991, 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%.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES. Roundy's took a giant step
toward growing the Company and reshaping it to meet the
challenges of the year 2000 and beyond. This giant step
began with the development and implementation of a strategic
plan.
The strategic plan addresses all of the essential
elements of the Company necessary to sustain its growth, to
increase its profitability levels and to identify its short-
range technological and operational capital needs.
A fundamental element of the plan is the underlying
strength of the Company - its balance sheet. The financial
results of fiscal 1995 more than ever, reflect a strong
balance sheet with sufficient reserves, decreased debt and
increased stockholders' equity. The Company continued to
focus on cash management with the objective of further
reducing debt. This effort enabled Roundy's to pay down
high interest rate debt in 1995 and improve its long-term
debt to equity ratio. In 1994 the long-term debt to equity
ratio fell below a one to one ratio for the first time in
over ten years, achieving a .98:1 ratio compared to 1.31:1
in 1993. The 1994 level was certainly a milestone for the
Company. However, the 1995 ratio showed even greater
improvement achieving a .79:1 long-term debt to equity
ratio.
The ability to achieve this low debt level was
predicated on several factors. A major effort was directed
at controlling notes and accounts receivable. Average
accounts receivable days outstanding improved 8.2% in 1995
compared to 1994 and 3.2% compared to 1993. Additionally,
the Company continues to receive the benefits of its
centralized accounts payable function which provides for
standardization of payment terms. Although inventory levels
increased slightly in 1995 compared to 1994 with average
equity in inventory increasing 7.3%, it was still 5.9%
better than 1993 average levels. Finally, the Company
continued to concentrate its borrowing on low, fixed rate
debt. In 1995, the Company prepaid $6,000,000 of 10.31%
outstanding Senior Unsecured Notes, reducing its average
cost of long-term debt to 7.6% versus 7.8% for 1994 and 7.9%
for 1993.
In addition to lowering its cost of long-term debt, the
Company continues to decrease its borrowing levels. Average
daily borrowings declined $11.5 million in 1995 compared to
1994 and $47.1 million compared to 1993. Lower average
daily borrowing levels and the pay down of higher interest
rate debt were the main reasons Roundy's was able to reduce
interest expense $1.6 million in 1995 compared to 1994 and
$4.2 million compared to 1993.
<PAGE>
Another significant element of Roundy's strategic plan
is to maintain a strong capital structure. The benefits of
such a structure are numerous including the ability to
secure low, fixed rate debt, improve earnings and increase
flexibility for reacting to opportunities.
The capital structure for fiscal 1995 and 1994 is
summarized in the table outlined below:
________________________________________________________________________
Capital Structure (in millions) 1995 1994
________________________________________________________________________
Long-term debt $ 78.9 44.1% $ 88.2 49.4%
Stockholders' equity 100.0 55.9 90.4 50.6
________________________________________________________________________
Total capital $178.9 100.0% $178.6 100.0%
________________________________________________________________________
At the request of the Securities and Exchange
Commission, in 1995, the Company has reflected common stock
submitted for redemption outside of stockholders' equity.
In Roundy's capital structure table, management has elected
to include this amount in stockholders' equity since it is
still outstanding common stock which is earning appreciation
in book value and will continue to do so until it is
redeemed.
Another key element of Roundy's strategic plan is
prudent reinvestment in facilities, fleet and retail stores.
Capital expenditures were $24.2 million in 1995 compared to
$22.3 million in 1994 and $13.4 million in 1993. Major
investments were made in technology, fleet and buildings.
Management decided to centralize its frozen foods operation
for the Ohio Region in one location. Owned facilities were
inadequate and rented facilities were becoming too
expensive. A major construction project began in the fall
of 1995 at the Lima Division to build a frozen foods
facility designed to meet the growing needs of this Region.
In the Milwaukee Division over half of its capital
expenditures were due to "Target Marketing" equipment which
was installed in retail stores serviced by the Division.
Management strongly believes that new technology such as a
"Target Marketing" system with the objective of better
servicing the customer and reducing the cost of
accomplishing that objective will benefit both its customer
base and the servicing division. Finally, the Company
undertook two major store remodels in 1995. With a growing
customer base, it was deemed essential in the strategic
planning meetings that key stores need to be modernized to
help deter competitors from opening sites in the vicinity of
these locations. All of the aforementioned actions coupled
with ongoing expenditures on new computer and operational
systems are essential factors in management's effort to
continue to lower operating expenses over $10.3 million from
1994 and $2.3 million from 1993.
<PAGE>
An important statistic which management continues to
monitor is the Company's current ratio. It is important to
maintain a good ratio, however, it is equally important to
minimize the amount of working capital invested in the
business. The year end current ratio for 1995 and 1994 was
1.43:1 and for 1993 it was 1.64:1. Even with increased
sales, a significant effort has been devoted to reducing
average days sales in receivables and increasing inventory
turns. Management believes that the ability to keep the
1995 ratio consistent with 1994 was significant and was
favorably impacted by the improvement in its average days
sales in receivable ratio which offset the slight decline in
average inventory turns. Inventory turns were 14.1 in 1995
compared to 14.4 in 1994 and 14.1 in 1993. In accordance
with the Company's strategic plan, an increased amount in
1996 capital expenditures will be directed at improved
inventory control systems which will enable the Company to
better control inventory levels.
Roundy's has already been working with several
manufacturers to develop and implement 1) a continuous
replenishment program (CRP), 2) electronic purchasing (EDI)
and 3) category management. All of these programs will keep
Roundy's in the forefront with respect to new data
processing systems that will help better control inventory
levels, reduce inventory carrying costs and provide
increased value at a lower cost to its customer.
Roundy's book value per share increased to $85.15 or
10.0%. Patronage dividends of $5.1 million were declared
based on 1995 results. Both represent significant increases
from 1994. Stockholders' equity increased $9.6 million from
1994 and $14.0 million from 1993. The changes in
stockholders' equity includes redeemable common stock.
RESULTS OF OPERATIONS. Net sales and fees increased $26.7
million in 1995 compared to 1994 and $7.9 million over 1993
levels. The 1.1% improvement from 1994 and 0.3% improvement
from 1993 are a result of several factors, all of which were
emphasized in the Company's strategic plan. "Advantage
Rewards" and "Advantage Plus Saver's Club" programs have
been significant factors in achieving the documented sales
increases. A second key element was the improved strength
in the "non-foods" divisions which handle health and beauty
care products, general merchandise products, specialty
foods, tobacco and candy items. Sales for these divisions
in 1995 were 5.2% greater than 1994 and 10.8% greater than
1993. The improvement in this segment of Roundy's business
was the result of expanded product lines and increased
emphasis.
Overall, gross profits reflect a modest 0.2% decline
compared to 1994 and 1993. The Company continues to
experience significant pressures on gross profits attributed
to reductions in manufacturers' promotional allowances,
forward buy opportunities and diverting revenues. The
current trend in the industry is to provide customers with
performance based and value-added options, which include
changing pricing practices and programs. Roundy's has been
<PAGE>
working with various manufacturers on category management
and continuous inventory replenishment programs designed to
reduce costs, improve efficiencies and help neutralize the
declining gross profit opportunities.
Operating and administrative expenses continued to
decline both in absolute dollars and as a percent to sales.
Operating and administrative expenses as a percent sales
were 8.2% compared to 8.7% in 1994 and 8.3% in 1993. The
1995 ratio was the lowest in sixteen years. When adjusting
for the significant increase in the closed facility reserve,
1994's operating and administrative ratio to sales would be
8.4%. Management has accepted the fact that the industry is
undergoing significant changes with the largest impact being
on gross profits. To offset the pressures on gross profits,
due to reductions in allowances and a variety of other
revenue sources previously available to wholesalers and
retailers, management recognized the need to reduce costs
and improve efficiencies. In this regard, the Company
closed its flight department in 1995, reduced full-time
equivalent staff by over 75, implemented stronger credit
restrictions (which helped reduce bad debt expense $3.3
million compared to 1994 and $0.9 million from 1993) and
implemented several system enhancements directed at lowering
costs and improving operating efficiencies. Roundy's has
consolidated several administrative functions in divisions
including purchasing, advertising, human resources and
accounting. These consolidations were accomplished with the
implementation of an automated, standardized buying system
in all Divisions, the centralization of accounts payable and
the further standardization of Human Resource systems,
practices and policies. It is management's plan to
accelerate the system standardization process in 1996 with
the objective of attaining further efficiencies and enabling
management, divisional staff and all of Roundy's to better
serve its retailers and the ultimate consumer.
Interest expense declined in 1995 by $1.6 million
compared to 1994 and $4.2 million compared to 1993.
Management continues to believe that good cash management
practices are important and, as such, has emphasized strong
cash management techniques and systems in its strategic
plan. Paramount to this effort has been the centralization
of accounts payable which enabled Roundy's to standardize
vendor payment terms. Additionally, a major emphasis was
placed on credit and improving average days sales in
receivables.
The effective income tax rates for 1995, 1994, and 1993
were 40.3%, 40.7% and 40.5%, respectively. The effective
tax rate has been favorably impacted by lower state income
taxes due to the Company's decision to consolidate various
subsidiaries. The benefits of these efforts were diluted by
the loss of the targeted jobs tax credits in 1995 due to
changes in the federal tax code.
<PAGE>
Net earnings reached a record level of .36% of net
sales and service fees compared to .27% for 1994 and .32%
for 1993. Management emphasized cost reductions and system
improvements in its strategic plan. 1995 net earnings
reflect the positive results of the focus with operating
administrative expenses decreasing as a percent of net sales
and service fees compared to both 1994 and 1993. Interest
expense, as a percent of net sales and service fees was at
its lowest level in sixteen years. The improvement in sales
achieved in 1995, together with the focus of Roundy's
strategic plan on cost reductions and system improvements
will offset the continuing decline in margins, resulting in
increased profitability for Roundy's.
<PAGE>
THE COMPANY
General
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, Kentucky, Missouri, Arkansas,
Pennsylvania, Tennessee and West Virginia. The Company also
owns and operates ten retail warehouse food stores under the
name "Pick 'n Save," five limited assortment food stores
under the name "Mor For Less" and seven conventional food
stores under the name "Cardinal Foods," "Village Market" 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 896 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 Roundy's outstanding Class A (Voting)
Common Stock is owned by the owners ("stockholder-
customers") of 134 retail grocery stores serviced by
Roundy's. These stockholder-customers, who own
approximately 68% 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. Patronage
dividends for the years ended December 30, 1995 and January
1, 1994 were payable 30% in cash and 70% in Class B Common.
There were no patronage dividends paid for the year ended
December 31, 1994 because the Company did not meet the
requirement imposed under its By-Laws which provides that
the book value per share of its Common Stock must increase
by 10% before any patronage dividends may be paid. See
"Payment Of Patronage Dividends". Under Subchapter T of the
<PAGE>
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 762 retail stores. They
do not receive patronage dividends. In addition,
approximately 32% of the outstanding combined Class A Common
and Class B Common 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 not
intend to seek a ruling or other assurance from the 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
reflected as tax deductions 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
nonfood 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 nonfood products. 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 1995.
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 but not limited to
"Roundy's," "Old Time," "Shurfine" and "Buyers' Choice."
Private label product sales for the Company accounted for
$166,045,000, $153,699,000 and $137,176,000 of the Company's
<PAGE>
sales during fiscal years ended December 30, 1995, December
31, 1994 and January 1, 1994, 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%, 37% and 36% of the Company's consolidated
net sales and service fees for fiscal 1995, 1994 and 1993,
respectively. At December 30, 1995, Roundy's had 76
stockholder-customers actively engaged in the retail grocery
business, operating a total of 134 retail grocery stores.
Roundy's cooperative wholesale food business is focused
primarily in Wisconsin, where all but 6 of these 134 retail
grocery stores are located (6 are in Illinois). At December
30, 1995 the Company (including its subsidiaries) had 762
independent retail food store customers. Sales by the
Company to the independent retail food stores accounted for
54%, 54% and 55% of the Company's consolidated net sales and
service fees for fiscal 1995, 1994 and 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 an 11 state area the
Company serviced 134 retail grocery stores operated by its
stockholder-customers, 762 retail stores operated by non-
stockholders and 22 Company-owned and operated retail stores
during fiscal 1995. Of the Company's consolidated net sales
and service fees for this period, $539,854,000 or 21.7% were
attributable to five customers, with one customer accounting
for $219,310,000 or 8.8% of such sales. Approximately 80%
or 717 retail store customers purchased less than $3,000,000
each from the Company in fiscal 1995. 121 customers owned
more than one retail food store, with two customers owning
13 retail food stores.
The Company generally distributes its various product
lines by a fleet of 270 tractor cabs and 620 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.
<PAGE>
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 1995,
1994 and 1993, the Company's bad debt expense was
$5,871,500, $9,166,600 and $6,738,600, 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 from 34,000 to 73,000 square feet
per store. The high value-limited assortment retail stores
are designated as "Mor For Less" which emphasize low cost,
high value lines to the customer, with stores ranging from
9,400 to 24,000 square feet per store. Conventional retail
stores operated under the name "Cardinal Foods," "Village
Market" or "Buy Low Foods" generally emphasize full service
to the customer at competitive prices. These stores range
from 36,000 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 1995 1994 1993
High Value-Limited Assort-
ment and High Volume-Limited
Service Stores (Warehouse
food stores)..................... 15 11 14
Conventional Retail Stores....... 7 4 5
Sales of Company-operated stores during the three most
recent fiscal years were $226,513,000, $231,364,000 and
$238,724,000 for fiscal 1995, 1994 and 1993, 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.
<PAGE>
Employees
At December 30, 1995, the Company had employed full-
time 1,153 executive, administrative and clerical employees,
1,419 warehouse and processing employees and drivers and 678
retail employees and had employed 1,589 part-time employees.
Substantially all of the Company's warehouse employees,
drivers and retail employees are represented by unions, with
contracts expiring in 1996 through 1999. 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.
<PAGE>
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
<PAGE>
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 30, 1995 was $85.15 per share. No patronage
dividends for the year ending December 28, 1996, may be paid
until $8.52 (10% of $85.15) per share is added to such Book
Value. Based upon the number of shares outstanding at
December 30, 1995, earnings in the aggregate amount of
$9,668,487 must be retained before patronage dividends may
be paid. Any increase in Book Value over $8.52 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.
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
1995 10.0% 10%
1994 8.0% 10%
1993 10.1% 10%
<PAGE>
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.
<PAGE>
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:
Securities
Year Ended Total Dividend Cash % % No. of Shares
December 30, 1995 $5,128,500 30 70 39,928
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
In each year in which patronage dividends are paid, the
Board of Directors determines the percentage to be paid in
cash and in Class B Common shares. This percentage is
applied to the dollar amounts determined as the patronage
dividend payable to each respective stockholder-customer, to
determine the number of Class B Common shares to be
distributed to such person. The total dollar amounts
payable in cash and in securities in any given year to all
stockholder-customers will not correspond exactly to the
given percentages, principally because of rounding to avoid
the issuance of fractional shares, and because patronage
dividends payable to former stockholder-customers whose
shares have been redeemed during the fiscal year are, in
most cases, paid entirely in cash. Although a minimum of
20% of each recipient's total annual patronage dividend is
required to be paid by Roundy's in cash, the cash portion
may be insufficient, depending upon the income tax bracket
of each recipient, to provide funds for the full payment of
the federal income tax liability incurred by the recipient
with respect to such patronage dividends.
The preceding discussion is only a summary of the most
significant aspects of the taxation of cooperatives under
the Internal Revenue Code, based on the understanding of the
management of Roundy's, and should not be construed as tax
advice to any individual stockholder, each of which should
consult its own tax advisor for individual tax advice.
Roundy's may in its sole discretion pay patronage
dividends to nonstockholder-customers. No such dividends
have been paid in the last four years. Persons who are not
customers of Roundy's are not entitled to receive patronage
dividends. Computation of the amount of patronage dividends
payable to stockholder-customers in any year is made after
the determination of patronage dividends, if any, payable to
nonstockholder-customers.
For further information with respect to patronage
dividends, reference is made to Article V of Roundy's By-
Laws, attached hereto as Exhibit C.
<PAGE>
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 43% of the stockholder-customers
participate in the suggested zone pricing service.
b. Custom Pricing. Stockholder-customers who wish to
create and maintain their own unique pricing structure
participate in the "custom pricing" program. Subscribing
stockholder-customers provide Roundy's with the retail price
they wish to maintain on each item, and Roundy's indicates
these figures on the invoices and on up to ten cases of each
item in each delivery. The stockholder-customer may update
this pricing structure weekly in accordance with changes in
wholesale costs and competitive activity in his particular
market area. Approximately 57% of the stockholder-
customers participate in custom pricing.
c. Special Individual Pricing ("SIP"). Those
stockholder-customers desiring a more competitive pricing
structure than zone pricing but with less administrative
requirements than custom pricing may choose a SIP schedule.
This allows a stockholder-customer to select from each of
the zones certain categories of merchandise to meet his
particular competitive needs. Suggested retail prices are
changed periodically to reflect changes in the wholesale
cost of the item. In all cases the stockholder-customer may
make price changes on merchandise within their stores as
required by their own competitive market situation.
<PAGE>
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 30, 1995 are summarized in the table below(2).
Outstanding
Number Balance Range of Range of
of Original as of Interest Maturity
Loans Amount Dec. 30,1995 Rates Dates
Inventory,
Equipment
Loans 146 $40,938,700 $31,030,500 Variable(1) 1996-2011
________________
(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 $1,908,000 and
$1,288,400, respectively at December 30, 1995. These
amounts are not included in the table above.
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
1996 to 2018. Aggregate lease rentals received under this
program were $22,045,500, $22,329,500 and $18,985,200 in
1995, 1994 and 1993, respectively.
<PAGE>
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 74
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.
<PAGE>
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.
Real Estate
The Company's principal executive offices are located
in Pewaukee, Wisconsin. These offices are on a 5-acre site.
A portion of these facilities are owned by Roundy's and the
remainder are leased from a third party.
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
<PAGE>
The Company believes its current properties are well
maintained and, in general, are adequately sized to house
existing operations. 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 30, 1995 consisted of 270 tractor
cabs, 620 trailers and 10 straight delivery trucks. In
addition, the Company owns 50 automobiles. Approximately
89% 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.
<PAGE>
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 53 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 1999)
Roger W. Alswager 47 Vice President of Real Estate since 1989
Londell J. Behm 45 Vice President of Advertising since 1987
Ralph D. Beketic 49 Vice President-Wisconsin Region since
1996; President of Milwaukee Division
since 1993; Vice President of Sales-
Milwaukee Division 1991-1993
David C. Busch 47 Vice President of Administration since
1993; Vice President of Human Resources
1990-1993
Edward G. Kitz 42 Vice President, Secretary & Treasurer
since 1995; Vice President & Treasurer
since 1989
Charles H. 53 Vice President of Logistics and Planning
Kosmaler, Jr. since 1993; Vice President of Adminis-
trative Efficiencies 1992-1993; Vice
President and Financial Operating Officer
1990-1991
Thomas A. Loggia 41 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
Robert D. Ranus 55 Vice President and Chief Financial Officer
since 1987; Director since 1987 (term
expires 1997)
Michael J. Schmitt 47 Vice President-Sales and Development since
1995; Vice President, Northern Region
1992-1995; Vice President and General
Manager of Milwaukee Division 1991-1992
Marion H. Sullivan 49 Vice President of Marketing since 1989
<PAGE>
Robert E. Bartels 58 Director since 1994 (term expires 1997);
President and Chief Executive Officer of
Martin's Super Markets, Inc., South
Bend, Indiana
Charles R. Bonson 49 Director since 1994 (term expires 1997);
President of Bonson's Foods, Inc., Eagle
River, Wisconsin
Lloyd E.Coppersmith 55 Director since 1995 (term expires 1998);
President of Ron & Lloyd's, Inc., New
London, Wisconsin
Gary N. Gundlach 52 Director since 1990 (term expires 1999);
President of G.E.M., Inc., McFarland,
Wisconsin
George C. Kaiser 63 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
Henry Karbiner, Jr. 55 Director since 1995 (term expires 1998);
President and Chief Operating Officer, Tri
City National Bank; Vice President and
Chief Financial Officer and Director, Tri
City Bankshares Corporation, Oak Creek,
Wisconsin
Patrick D. McAdams 46 Director since 1995 (term expires 1998);
General Manager and Treasurer of McAdams,
Inc., Oconomowoc, Wisconsin
Brenton H. Rupple 71 Director since 1993 (term expires 1999);
Retired Chairman of Robert W. Baird & Co.,
Milwaukee, Wisconsin
Directors of Roundy's are elected by class and generally serve
three-year terms; approximately one-third of the Board of Directors
is elected annually. Of the ten current members of the Board of
Directors, two are currently Executive Officers of Roundy's
(Messrs. Lestina and Ranus) and four are "Retailer Directors"
(Messrs. Bonson, Coppersmith, Gundlach and McAdams). 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 provides that in every third
year, Voting Trust Certificate Holders will choose two
Retailer Directors. Therefore, at any time there should be
four Retailer Directors serving. See VOTING TRUST.
<PAGE>
DESCRIPTION OF STOCK
Authorized Shares
Roundy's is authorized by its Articles of Incorporation
to issue 60,000 shares of Class A Common, $1.25 par value,
and 2,400,000 shares of Class B Common, $1.25 par value. On
December 30, 1995, 13,400 shares of Class A Common and
1,121,399 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.
<PAGE>
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.
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--Stockholder-
Customers."
Transfer Agent
Roundy's acts as its own transfer agent for its Class A
and Class B Common.
<PAGE>
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.
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 four of the Directors (there are
currently ten 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
<PAGE>
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 Trustees 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 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.
<PAGE>
In addition to the revisions to the Voting Trust
Agreement constituting Amendment 1995-1, the Voting Trust
Agreement was amended to increase the number of retailer
directors to four, and corresponding amendments were made 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).
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 and Gary R. Sarner), 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 Robert S.
Gold, 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. Gold is President and stockholder of B. & H. Gold
Corporation, 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."
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.
<PAGE>
EXPERTS
The consolidated financial statements of Roundy's, Inc.
and subsidiaries and the related consolidated financial
statement schedules as of December 30, 1995 and December 31,
1994 and for each of the three years in the period ended
December 30, 1995 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.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Roundy's, Inc. and Subsidiaries Audited Financial Statements:
Independent Auditors' Report F-2
Statements of Consolidated Earnings for each of the
three years in the period ended December 30, 1995 F-3
Consolidated Balance Sheets at December 30, 1995
and December 31, 1994 F-4
Statements of Consolidated Stockholders' Equity
for each of the three years in the period
ended December 30, 1995 F-6
Statements of Consolidated Cash Flows for each of
the three years in the period ended December 30, 1995 F-7
Notes to Financial Statements F-8
<PAGE>
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 30,
1995 and December 31, 1994 and the related statements of
consolidated earnings, stockholders' equity and cash flows
for each of the three years in the period ended December
30, 1995. 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 30, 1995 and December
31, 1994, and the results of their operations and their cash
flows for each of the three years in the period ended
December 30, 1995 in conformity with generally accepted
accounting principles.
Doloitte & Touche LLP
Milwaukee, Wisconsin
February 23, 1996
<PAGE>
Statements of Consolidated Earnings
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
1995 1994 1993
Revenues:
Net sales and
service fees $2,488,196,200 $2,461,509,600 $2,480,254,200
Other-net 3,966,100 3,892,300 6,526,600
-------------- -------------- --------------
2,492,162,300 2,465,401,900 2,486,780,800
-------------- -------------- --------------
Costs and Expenses:
Cost of sales 2,260,039,400 2,230,645,500 2,248,336,000
Operating and
administrative 203,943,400 214,221,900 206,253,600
Interest 7,929,000 9,479,300 12,138,100
-------------- -------------- --------------
2,471,911,800 2,454,346,700 2,466,727,700
-------------- -------------- --------------
Earnings Before
Patronage Dividends 20,250,500 11,055,200 20,053,100
Patronage Dividends 5,128,500 5,300,700
-------------- -------------- --------------
Earnings Before
Income Taxes 15,122,000 11,055,200 14,752,400
-------------- -------------- --------------
Provision (Credit) for
Income Taxes:
Current-Federal 7,361,200 7,863,700 5,797,000
-State 1,177,400 2,290,100 1,740,200
-Jobs and other
tax credits (105,700) (448,700) (485,500)
-Deferred (2,333,000) (5,204,000) (1,078,000)
-------------- -------------- --------------
6,099,900 4,501,100 5,973,700
-------------- -------------- --------------
Earnings Before
Extraordinary Item 9,022,100 6,554,100 8,778,700
Extraordinary Loss on
Early Extinguishment
of Long-Term Debt (Net
of Income Tax Benefit
of $511,000) (751,000)
-------------- -------------- --------------
Net Earnings $ 9,022,100 $ 6,554,100 $ 8,027,700
============== ============== ==============
See notes to consolidated financial statements.
<PAGE>
Consolidated Balance Sheets
As of December 30, 1995 and December 31, 1994
Assets 1995 1994
------------ ------------
Current Assets:
Cash and cash equivalents $ 26,382,000 $ 40,268,800
Notes and accounts receivable,
less allowance for losses,
$8,431,300 and $11,000,400,
respectively 99,727,000 95,105,500
Merchandise inventories 163,204,100 157,195,700
Prepaid expenses 5,060,700 5,774,200
Future income tax benefits 8,496,800 5,691,800
------------ ------------
Total current assets 302,870,600 304,036,000
------------ ------------
Other Assets:
Notes receivable 17,249,100 14,631,300
Other real estate 4,659,400 6,584,200
Deferred expenses and other 5,300,600 7,066,200
Deferred income tax benefit 2,706,000 3,060,000
------------ ------------
Total other assets 29,915,100 31,341,700
------------ ------------
Property and Equipment-At Cost:
Land 5,042,700 5,883,000
Buildings 43,021,900 43,934,300
Equipment 94,499,200 83,963,000
Leasehold improvements 12,412,000 13,429,100
------------ ------------
154,975,800 147,209,400
Less accumulated depreciation
and amortization 80,424,900 77,934,900
------------ ------------
Property and equipment-net 74,550,900 69,274,500
------------ ------------
$407,336,600 $404,652,200
============ ============
See notes to consolidated financial statements.
<PAGE>
Liabilities and
Stockholders' Equity 1995 1994
------------ ------------
Current Liabilities:
Current maturities of
long-term debt $ 3,776,500 $ 5,678,600
Accounts payable 165,539,300 166,024,700
Accrued expenses 42,231,400 36,036,000
Income taxes 583,600 4,483,200
------------ ------------
Total current liabilities 212,130,800 212,222,500
------------ ------------
Long-Term Debt,
Less Current Maturities 78,850,200 88,226,700
Other Liabilities 16,322,500 13,784,300
------------ ------------
Total liabilities 307,303,500 314,233,500
------------ ------------
Commitments and Contingencies (Note 10)
Redeemable Common Stock 8,132,000 5,539,600
------------ ------------
Stockholders' Equity:
Common stock:
Voting (Class A) 16,700 17,500
Non-voting (Class B) 1,282,400 1,353,500
------------ ------------
Total common stock 1,299,100 1,371,000
Amount related to recording
minimum pension liability (283,600) (112,700)
Patronage dividends payable
in common stock 3,405,000
Additional paid-in capital 21,222,100 21,741,200
Reinvested earnings 66,258,500 61,879,600
------------ ------------
Total stockholders' equity 91,901,100 84,879,100
------------ ------------
$407,336,600 $404,652,200
============ ============
<PAGE>
<TABLE>
Statements of Consolidated Stockholders' Equity
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
<CAPTION>
Common Stock
----------------------------------------- Patronage
Class A Class B Dividends Additional
----------------- --------------------- Payable in Paid-in Reinvested
Shares Amount Shares Amount Common Stock Capital Earnings
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 2, 1993 16,100 $20,100 1,028,222 $1,285,300 $ 3,210,000 $15,215,700 $51,463,600
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) (40,875) (51,100) (1,133,100) (1,946,600)
Redeemable common stock (21,473) (26,800) (378,800) (1,132,900)
Patronage dividends payable
in common stock 3,263,000
--------------------------------------------------------------------------------
Balance, January 1, 1994 15,500 19,400 1,048,067 1,310,100 3,263,000 18,761,900 56,411,800
Net earnings
Common stock issued 700 900 52,138 65,200 (3,263,000) 3,516,200
Common stock purchased (2,200) (2,800) (1,533) (1,900) (222,200) (191,800)
Redeemable common stock (15,880) (19,900) (314,700) (894,500)
--------------------------------------------------------------------------------
Balance, December 31, 1994 14,000 17,500 1,082,792 1,353,500 0 21,741,200 61,879,600
Net earnings
Common stock issued 200 200 12,755 16,000 931,400
Common stock purchased (800) (1,000) (17,446) (21,800) (384,500) (1,329,300)
Redeemable common stock (52,204) (65,300) (1,066,000) (3,313,900)
Patronage dividends payable
in common stock 3,405,000
---------------------------------------------------------------------------------
Balance, December 30, 1995 13,400 $16,700 1,025,897 $1,282,400 $ 3,405,000 $21,222,100 $66,258,500
=================================================================================
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Statements of Consolidated Cash Flows
For The Years Ended December 30, 1995, December 31, 1994 and
January 1, 1994
1995 1994 1993
------------ ------------ ------------
Cash Flows From Operating Activities:
Net earnings $ 9,022,100 $ 6,554,100 $ 8,027,700
Adjustments to reconcile
net earnings to net cash flows
provided by operating activities:
Depreciation and amortization 13,594,400 12,756,500 12,913,200
Extraordinary loss on early
extinguishment of debt 751,000
Allowance for losses 5,871,500 9,166,600 6,738,600
Loss (gain) on sale of
property and equipment and other
productive assets 451,900 (1,087,700) (3,680,300)
Closed facility reserve 42,300 8,000,000 1,000,000
Patronage dividends payable
in common stock 3,405,000 3,263,000
(Increase) decrease in operating
assets, net of the effects
of disposition:
Accounts receivable (6,768,000) (5,012,600) (13,819,500)
Merchandise inventories (6,008,400) (4,026,200) 11,038,700
Prepaid expenses 713,500 1,182,600 (2,105,000)
Future income tax benefits (2,805,000) (1,410,000) 295,000
Other real estate 1,924,800 758,800 (802,300)
Deferred expenses and
other assets 1,208,700 323,300 (27,700)
Deferred income tax benefit 472,000 (3,060,000)
Increase (decrease) in operating
liabilities, net of the effects
of disposition:
Accounts payable (485,400) 35,837,100 7,715,000
Accrued expenses 6,018,200 (1,582,700) (227,100)
Income taxes (3,899,600) 4,072,300 (724,400)
Deferred income taxes (734,000) (1,373,000)
Other liabilities 2,538,200 3,015,300 796,200
----------- ----------- -----------
Net cash flows provided by
operating activities 25,296,200 64,753,400 29,779,100
----------- ----------- -----------
Cash Flows From Investing Activities:
Capital expenditures (24,216,300) (22,316,600) (13,354,800)
Proceeds from sale of property
and equipment and other
productive assets 5,296,500 1,753,200 11,017,900
(Increase) decrease in
notes receivable (6,342,800) 830,400 4,602,500
----------- ----------- -----------
Net cash flows (used in) provided
by investing activities (25,262,600) (19,733,000) 2,265,600
----------- ----------- -----------
<PAGE>
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 45,000,000
Principal payments and defeasance
of long-term debt (9,376,500) (24,818,000) (68,637,400)
Increase (decrease) in notes
payable and current maturities (1,902,100) (3,381,700) 1,015,100
of long-term debt
Proceeds from sale of common stock 947,600 319,300 1,951,700
Common stock purchased (3,589,400) (2,716,800) (5,440,500)
----------- ----------- -----------
Net cash flows (used in)
financing activities (13,920,400) (30,597,200) (26,111,100)
----------- ----------- -----------
Net (Decrease) Increase in
Cash and Cash Equivalents (13,886,800) 14,423,200 5,933,600
Cash And Cash Equivalents,
Beginning Of Year 40,268,800 25,845,600 19,912,000
----------- ----------- -----------
Cash And Cash Equivalents,
End Of Year $26,382,000 $40,268,800 $25,845,600
=========== =========== ===========
Cash Paid During The Year For:
Interest $ 8,116,000 $ 9,775,300 $13,100,200
Income Taxes 12,319,000 5,163,300 7,805,700
See notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Description of business-The company is primarily engaged in
the distribution of food products and related non-food items
through retail supermarkets, many of which are owned by
stockholder-customers or the company.
Fiscal year-The company's fiscal year is the 52 or 53 week
period ending the Saturday nearest to December 31. Each of
the three years in the period ended December 30, 1995
included 52 weeks.
Financial statements-The financial statements include the
accounts of the company and its subsidiaries. Significant
intercompany balances and transactions are eliminated.
Revenue from product sales are recognized upon shipment of
the product for food distribution and at the point of sale
for retail food. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
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.
Long-lived assets-The company periodically evaluates the
carrying value of long-lived assets in accordance with
Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." The company analyzes
the future recoverability of the long-lived assets using the
related undiscounted future cash flows of the business and
recognizes any adjustment to its carrying value on a current
basis.
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 is
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
increases in the balance of the closed facility reserve were
$42,300, $8,000,000 and $1,000,000 in 1995, 1994 and 1993, respectively.
<PAGE>
Income Taxes-The company provides income taxes in accordance
with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," which requires an asset and
liability approach to financial accounting and reporting for
income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial
statement and tax bases of assets and liabilities that will
result in taxable or deductible amounts in the future based
on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income.
2. DISPOSITION
On August 28, 1993, the company completed the sale of its
dairy and ice cream operations. The sale price of
$14,976,500 consisted of cash of $9,649,600 and liabilities
assumed by the purchaser of $5,326,900. The sale resulted in
a pretax gain of $3,254,100 which is included in other
revenues in the 1993 Statement of Consolidated Earnings.
3. PATRONAGE DIVIDENDS
The company's By-Laws require that for each of the last
three fiscal years, to the extent permitted by the Internal
Revenue Code, patronage dividends are to be paid out of
earnings from business done with stockholder-customers in an
amount which will reduce the net earnings of the company to
an amount which will result in a 10% increase in the book
value of its common stock. The dividends are payable at
least 20% in cash and the remainder in Class B common stock.
Dividends for the years ended December 30, 1995 and January
1, 1994 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 15 years.
Included in current notes and accounts receivable are
amounts due within one year totalling $9,305,500 and
$7,569,700 at December 30, 1995 and December 31, 1994,
respectively. Long-term notes receivable at December 30,
1995 and December 31, 1994 are net of an allowance for
losses of $4,641,000 and $916,000, respectively.
<PAGE>
5. LONG-TERM DEBT
Long-term debt, exclusive of current maturities, consists of
the following at the respective year-ends:
1995 1994
------------ ------------
Senior unsecured notes payable:
10.31%, prepaid in 1995 $ 6,000,000
9.26%, due 1997 to 2001 $ 12,500,000 15,000,000
7.57% to 8.26%, due 1997 to 2008 20,900,000 21,600,000
6.94%, due 1997 to 2003 45,000,000 45,000,000
Other long-term debt 450,200 626,700
------------ ------------
Total $ 78,850,200 $ 88,226,700
============ ============
At December 30, 1995, $69,600,000 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. 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
is as follows:
1996 $ 3,776,500
1997 10,235,600
1998 10,156,800
1999 10,159,700
2000 21,163,000
Thereafter 27,135,100
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 and long-term debt. The
carrying amounts for accounts and notes receivable and
accounts 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 $81,500,000 and $91,240,000 as of December 30,
1995 and December 31, 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 with a par value of $1.25 a share. Inactive
customers are required to exchange Class A voting stock held
for Class B non-voting stock.
The issuance and redemption of common stock is based on the
book value thereof as of the preceding year-end. The year-
end book value was $85.15, $77.40 and $71.65 for 1995, 1994
and 1993, 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.
Class B common stock which is subject to redemption is
reflected outside of stockholders' equity. The December 31,
1994 consolidated balance sheet and statements of
consolidated stockholders' equity have been reclassified in
order to be comparable. Redeemable common stock is held by
inactive customers and former employees. As of December 30,
1995 and December 31, 1994, 95,502 and 71,571 shares,
respectively, were subject to redemption. The Class B common
stock subject to redemption is payable over a five year
period based upon the book value at the preceding fiscal
year end. The company expects to repurchase shares of
36,663, 21,776, 15,764, 11,591 and 9,708 in 1996, 1997,
1998, 1999 and 2000, respectively.
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.
<PAGE>
Option and SAR transactions are as follows:
Options SARs Price
------- ------- -------------
Outstanding, January 2, 1993 45,000 15,000 $53.10-$58.75
Granted 15,000 5,000 65.10
Exercised (15,333) 53.10-65.10
Cancelled (1,500) (1,500) 53.10-58.75
------- ------- -------------
Outstanding, January 1, 1994 43,167 18,500 53.10-65.10
Exercised (3,667) 58.75-65.10
------- ------- -------------
Outstanding, December 31, 1994 39,500 18,500 53.10-65.10
Granted 9,500 4,500 77.40
Exercised (3,400) (1,550) 53.10-65.10
Cancelled (2,000) (2,350) 53.10-65.10
------- ------- -------------
Outstanding, December 30, 1995 43,600 19,100 $53.10-$77.40
======= ======= =============
Available for grant
after December 30, 1995 9,000 4,350
======= =======
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 30, 1995,
options were exercisable for 31,916 shares at $53.10-$77.40
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
1995, 1994 and 1993. As of December 30, 1995, 9,247 SARs
were exercisable at $53.10-$77.40 per SAR.
In the event of a change in control of the company, all
options and SARs previously granted and not exercised,
become exercisable.
8. EMPLOYEE BENEFIT PLANS
Substantially all non-union employees of the company and
employees of its subsidiaries are covered by defined benefit
pension plans. Benefits are based on either years of service
and the employee's highest compensation during five of the
most recent ten years of employment or on stated amounts for
each year of service. The company intends to annually
contribute only the minimum contributions required by
applicable regulations.
<PAGE>
The following sets forth the funded status of the plans at
December 30, 1995 and December 31, 1994:
1995 1994
--------------------------- ----------------------------
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
------------ ------------- -------------- --------------
Acturial present value of:
Vested benefit
obligation $23,977,700 $ 3,473,300 $18,742,100 $ 2,816,400
=========== =========== =========== ============
Accumulated benefit
obligation $26,054,300 $ 3,592.200 $20,704,000 2,994,100
=========== =========== =========== ============
Projected benefit
obligation $30,750,300 $ 3,592,200 $24,009,500 2,994,100
Plan assets (primarily
listed stocks and bonds)
at market value 26,928,100 2,465,900 24,006,500 2,119,400
----------- ----------- ----------- ------------
Projected benefit
obligation in
excess of plan
assets (3,822,200) (1,126,300) (3,000) (874,700)
Unrecognized net
(gain) loss 1,419,500 478,600 (945,200) 189,700
Prior service cost
not yet recognized
in net periodic
pension cost 359,800 63,400 395,700 68,200
Unrecognized net
asset (1,069,500) (1,243,500)
Adjustment required to
recognize minimum
liability (542,000) (257,900)
----------- ----------- ----------- ------------
Accrued pension cost $(3,112,400) $(1,126,300) $(1,796,000) $ (874,700)
=========== =========== =========== ============
The assumptions used in the accounting were as follows:
1995 1994 1993
----- ----- -----
Discount rate 7.75% 8.25% 7.50%
Rate of increase in compensation levels 4.00% 4.00% 4.00%
Expected long-term rate of return of assets 9.00% 9.00% 9.00%
The changes in actuarial assumptions in 1995 resulted in a
$4,500,000 increase in the projected benefit obligation in
1995, and are expected to result in an increase in the 1996
pension expense of approximately $370,000. In accordance
with Statement of Financial Accounting Standards No. 87,
"Employers' Accounting for Pensions," the company has
recorded a minimum liability of which $283,600 and $112,700,
net of income taxes, is reflected as a reduction of
stockholders' equity in 1995 and 1994, respectively.
<PAGE>
Net pension cost for the foregoing defined benefit plans
includes the following components:
1995 1994 1993
----------- ----------- ------------
Service cost-benefits
earned during the year $ 1,652,800 $ 1,756,800 $ 1,314,800
Interest on projected
benefit obligation 2,191,100 2,020,600 1,881,000
Actual (return) loss
on plan assets (4,424,500) 1,013,200 (2,251,200)
Net amortization and deferral 1,989,200 (3,625,300) (247,500)
----------- ----------- ------------
Net pension cost $ 1,408,600 $ 1,165,300 $ 697,100
=========== =========== ============
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 $3,611,600,
$3,705,300 and $3,437,500 in 1995, 1994 and 1993,
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 $541,500, $507,500
and $513,700 in 1995, 1994 and 1993, 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
Federal income tax at the statutory rates of 35% in 1995,
1994 and 1993 and and income tax expense as reported, are
reconciled as follows:
1995 1994 1993
---------- ---------- ----------
Federal income tax
at statutory rates $5,292,700 $3,869,300 $5,163,300
State income taxes,
net of federal tax benefits 765,300 720,000 1,131,100
Jobs and other tax credits (105,700) (448,700) (485,500)
Other-net 147,600 360,500 164,800
---------- ---------- ----------
Income tax expense $6,099,900 $4,501,100 $5,973,700
========== ========== ==========
The approximate tax effects of temporary differences at
December 30, 1995 and December 31, 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------- --------------------------------------
Assets Liabilities Total Assets Liabilities Total
--------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allowance for
doubtful accounts $ 1,603,000 $ 1,603,000 $ 2,613,000 $ 2,613,000
Inventories $ (975,200) (975,200) $ (817,200) (817,200)
Employee benefits 4,825,000 4,825,000 2,580,000 2,580,000
Accrued expenses
not currently
deductible 3,044,000 3,044,000 1,316,000 1,316,000
------------ ----------- ----------- ----------- ----------- -----------
Current 9,472,000 (975,200) 8,496,800 6,509,000 (817,200) 5,691,800
------------ ----------- ----------- ----------- ----------- -----------
Allowance for
doubtful accounts 1,876,000 1,876,000 359,000 359,000
Depreciation
and amortization (3,739,000) (3,739,000) (2,865,000) (2,865,000)
Employee benefits 3,485,000 3,485,000 2,883,000 2,883,000
Accrued expenses
not currently
deductible 1,068,000 1,068,000 2,676,000 2,676,000
Other 16,000 16,000 7,000 7,000
------------ ----------- ----------- ----------- ----------- -----------
Noncurrent 6,445,000 (3,739,000) 2,706,000 5,925,000 (2,865,000) 3,060,000
------------ ----------- ----------- ----------- ----------- -----------
Total $15,917,000 $(4,714,200) $11,202,800 $12,434,000 $(3,682,200) $ 8,751,800
============ =========== =========== =========== =========== ===========
</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
----------- ---------- -----------
1993 $36,675,800 $398,800 $18,985,200
1994 36,268,800 448,300 22,329,500
1995 35,264,400 422,900 22,045,500
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 30, 1995:
OPERATING
LEASES
------------
1996 $ 33,359,100
1997 29,139,700
1998 27,747,200
1999 26,658,300
2000 25,569,600
Thereafter 218,819,900
------------
Total $361,293,800
============
Total minimum rentals to be received in the future under non-
cancelable subleases as of December 30, 1995 are
$282,292,000.
The company has guaranteed customer bank loans and customer
leases amounting to $1,908,000 and $1,288,400, respectively,
at December 30, 1995.
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.
<PAGE>
________________________________
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 _______, _____ 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
<PAGE>
Deposit Agreement, Roundy's has not undertaken any
obligation to issue or sell any shares of its stock to the
undersigned except to the extent provided in such Policy, as
the same may exist and be in effect from time to time.
Installment payments made to Roundy's from time to time
will be retained by Roundy's as a part of the undersigned's
Buying Deposit, and will be applied to the undersigned's
purchase of shares of Roundy's Common Stock only at such
times and in such amounts as the undersigned may designate
(subject to the preceding paragraph and the Policy described
therein) pursuant to a subscription agreement executed by
the undersigned in the form attached hereto.
Roundy's, by accepting this Buying Deposit Agreement,
agrees to be bound by the Statement of Policy Regarding
Repurchase of Stock set forth as Exhibit D to the
Prospectus, as such Statement of Policy may be amended from
time to time.
The undersigned understands that patronage dividends,
if any, paid to the undersigned in Class B Common Stock from
and after the date hereof, until the Buying Deposit is
satisfied, will be credited against the installment payments
of the undersigned's Buying Deposit in the inverse order of
the due dates of such installments, at a price per share
equal to the Book Value of such shares as of the fiscal year-
end immediately preceding the date of their issuance.
Upon termination of the customer status of the
undersigned with Roundy's for any reason or if the
undersigned at any time shall not have made payments due
from it to Roundy's in the manner and within the time limits
established by Roundy's, Roundy's shall have the right to
reimburse itself out of the undersigned's Buying Deposit for
any amounts owed to Roundy's by the undersigned.
A-2
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:
________________________________
<PAGE>
City ___________________________
State___________________________
Zip Code__________________
BUYING DEPOSIT - MONTHLY INSTALLMENT PAYMENTS
1. Total Buying Deposit _______________________
2. Less down payment _______________________
3. Balance to be amortized _______________________
4. Estimated weekly retail sales _______________________
Check Monthly Buying Deposit Installment
Weekly Retail Sales One 1st Year 2nd Year 3rd Year
$ 40,000 - $100,000 _____ $ 300 $ 400 $ 500
$100,000 - $200,000 _____ 750 900 1,050
Over $200,000 _____ 1,000 1,250 1,500
Payment beginning (nearest 15th day of month following down payment)
Approved:_____________________________________________
Retail Counselor, Roundy's, Inc.
Accepted:_____________________________________________
Sales Manager, Roundy's, Inc.
A-3
<PAGE>
Exhibit C
Article V of By-Laws of Roundy's, Inc., as amended by the
Board of Directors on December 12, 1989
FISCAL YEAR
ACCOUNTING AND PATRONAGE REBATES
The corporation is obligated to its Common stockholders
on a patronage basis or bases for all amounts received by it
resulting from sales to them as defined and limited herein.
5.1 Patronage Dividends. Patronage dividends shall
accrue to Class A Common stockholders of the corporation out
of net earnings from business done with such stockholders
and shall be determined and distributed for each fiscal year
pursuant to existing provisions of the Internal Revenue
Code; provided further that patronage dividends of the
corporation will be determined on the basis of the net sales
of the corporation to each Class A Common stockholder and
paid in an amount which will reduce net income of the
corporation to such amount as will result in an increase of
ten percent (10%) in the net book value (as determined by
the corporation's independent certified public 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.
<PAGE>
5.4 Payment of Patronage Dividends.
(a) Patronage dividends are payable in the fiscal
year following the fiscal year in which accrued, in money,
qualified written notices of allocation (as defined by the
Internal Revenue Code) or other property (except non-
qualified written notices of allocation as defined by the
Internal Revenue Code) provided, however, that at least
twenty percent (20%) of the amount of a patronage dividend
shall be paid in money or by qualified check as defined by
the Internal Revenue Code.
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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.
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<PAGE>
Exhibit D
ROUNDY'S, INC. POLICY RELATING TO REDEMPTION OF STOCK
BY INACTIVE CUSTOMER SHAREHOLDERS AND FORMER EMPLOYEES
ARTICLE 1
Repurchase of Shares by Corporation
1.01 Agreement to Repurchase. Upon the terms and
subject to the conditions set forth in this Policy
(including the applicable provisions of Articles 2 and 3,
below), the Corporation shall be obligated to repurchase its
shares of Class A Common Stock and Class B Common Stock
after proper request by the holder thereof, or his or its
legal representative, at any time after the occurrence of a
Customer/ Shareholder Termination with respect to such stock
or an Employee/ Shareholder Termination with respect to such
holder.
1.02 Repurchase in Increments. The Corporation's
obligation to repurchase stock shall accrue, subject to the
other terms and conditions of this Policy, in annual 20%
increments during the five year period beginning on the
Repurchase Request Date with respect to such stock.
Beginning on the first anniversary date of the Repurchase
Request Date, the Corporation shall become obligated to
purchase in accordance herewith 20% of the aggregate number
of shares of Class A and Class B Common Stock as to which a
proper repurchase request has been received. Such
percentage shall be increased to 40% on the second
anniversary date of the Repurchase Request Date, 60% on the
third anniversary date, 80% on the fourth anniversary date
and 100% on the fifth anniversary date of the Repurchase
Request Date. Regardless of the foregoing, in the event
that a Customer/Shareholder Termination or an
Employee/Shareholder Termination occurs as a result of the
death of the shareholder and the estate of such shareholder
specifically so elects by written notice to the Secretary of
the Corporation within 180 days thereafter, the repurchase
of not more than the first $50,000 in value of stock shall
be accelerated to the date 180 days after receipt by the
Secretary of such written election. Each share shall
continue to be outstanding for all purposes until actually
repurchased.
1.03 Calculation of Repurchase Price. The repurchase
price for each share of stock of the Corporation shall be
the Book Value of such share at the date of repurchase.
1.04 Form of Repurchase Request. A proper repurchase
request for purposes hereof shall consist of a written
notification to the Secretary of the Corporation specifying
the number of shares to be repurchased, the reason for such
repurchase request, and the date or dates on which a
Customer/Shareholder Termination or Employee/Shareholder
Termination occurred with respect to the stock covered by
such repurchase request. Such repurchase request must be
made in accordance with the procedures specified in
Section 2.02, below.
<PAGE>
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.
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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.
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
<PAGE>
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.
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1.09 Adjustments. For all purposes hereof, in the
event of a stock split or similar capital change (excluding
regular stock issuances associated with the Corporation's
patronage dividends), equitable adjustment will be made to
the number of shares to be repurchased and the repurchase
price.
A-8
<PAGE>
ARTICLE 2
Additional Conditions to Repurchase Obligations
2.01 Notification to Corporation of Certain
Termination Events. Each shareholder (or his or its legal
representative) shall, as soon as possible after the
occurrence of a Customer/Shareholder Termination or an
Employee/Shareholder Termination (occurring otherwise than
as a result of the death or retirement of the employee),
give written notice of the same to the Secretary of the
Corporation, stating the nature and date of such event. If
it shall come to the attention of the Corporation that such
an event has occurred and no such notice has been received,
the Secretary shall give written notice of the same to the
record holder of such shares. Any determination so made in
good faith by the Corporation, including any determination
as to the date upon which a retail food store became or
ceased to be an Active Customer, or upon which a
Customer/Shareholder Termination or an Employee/Shareholder
Termination occurred, shall be final and binding on all
persons.
2.02 Timing of Repurchase Requests. Requests by
shareholders to have their shares of stock redeemed or
repurchased pursuant to this policy will be accepted by the
Corporation when made in accordance with the following
procedures:
(a) When Repurchase Requests May Be Made.
Requests by a shareholder to have its stock repurchased or
redeemed will be accepted only if made during one of three
(3) "window" periods each year -- after the first, second
and third fiscal quarters of the Corporation, consisting of
the last two weeks of May, August and November,
respectively. These "window" periods are subject to closure
or modification by management or the Board of Directors of
the Corporation if, in the best judgment of management or
the Board, it would be inappropriate for the Corporation to
be engaged in the purchase or sale of its shares at such
time. Requests for redemption will be deemed to have been
duly made during these periods if they are received in
writing at the Corporation's Pewaukee office during the
window period or, if received thereafter, if they were
postmarked during the window period.
(b) Authority Of The Board To Suspend Or Deviate
From These Requirements. The Board of Directors reserves at
all times the authority to alter, suspend or deviate from
the requirements of this Section 2.02, in its discretion, to
the extent it determines such action to be appropriate.
(c) Effective Date. The provisions of this
Section 2.02 will be effective commencing January 1, 1994.
<PAGE>
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.
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(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.
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<PAGE>
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-11
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.
<PAGE>
(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.
A-12
<PAGE>
(h) "Repurchase Request Date" with respect to a
share of stock means the date of actual receipt by the
Secretary of the Corporation of a written request for
repurchase of such share which complies with Section 1.04 of
this Policy.
(i) "Repurchase Target Date" with respect to a
share of stock means the date upon which the Corporation is
to become obligated to repurchase such share of stock in
accordance with Section 1.02 of this Policy. If such date
is not a day on which business is generally conducted in the
Corporation's main offices, then the "Repurchase Target
Date" shall be the next subsequent business day.
A-13
<PAGE>
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.
<PAGE>
(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
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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
<PAGE>
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.
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(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
<PAGE>
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
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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.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
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.
<PAGE>
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.
II-1
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. Incorporated herein by
reference to Exhibit 3.6 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May 1,
1995.
4.1 Credit Agreement dated March 6, 1989, between Roundy's,
Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.3 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, filed with the Commission
on March 31, 1989, Commission File No. 2-66296.
4.2 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.
4.3 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).
4.4 Amendment No. 2 dated October 9, 1991 (effective
October 24, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference
to Exhibit 4.7 of Registrant's Annual Report on Form 10-
K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.5 Amendment No. 3 dated December 9, 1991 (effective
December 30, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference
to Exhibit 4.8 of Registrant's Annual Report on Form 10-
K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File No. 2-66296.
<PAGE>
4.6 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.
II-2
4.7 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.
4.8 Note Agreement dated December 15, 1992 between
Roundy's, Inc. and Connecticut Mutual Life Insurance
Company, The Ohio National Life Insurance Company,
Provident Mutual Life Insurance Company of
Philadelphia, Providentmutual Life and Annuity Company
of America, Guarantee Mutual Life Company, Woodmen
Accident and Life Company and United of Omaha Life
Insurance Company, incorporated herein by reference to
Exhibit 4.11 of Registrant's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-
66296.
4.9 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).
4.10 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.
4.11 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.
<PAGE>
4.12 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus
which forms a part of this Registration Statement).
4.13 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus
which forms a part of this Registration Statement).
4.14 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).
4.15 Amendment No. 6 dated March 29, 1996 to the Credit
Agreement dated March 6, 1989, between Roundy's, Inc.
and the Chase Manhattan Bank, N.A. (as agent). FILED
HEREWITH.
II-3
5.1 Opinion of Whyte Hirschboeck Dudek S.C. as to legality
of issuance of securities, incorporated herein by
reference to Exhibit 5.1 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May 1,
1995.
9 Amended and Restated Voting Trust Agreement dated
September 16, 1983, incorporated herein by reference to
Exhibit 9 of Registrant's Annual Report on Form 10-K
for the year ended December 31, 1983, filed with the
Commission on March 30, 1984, Commission File No. 2-
66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to Amended
and Restated Voting Trust Agreement, incorporated
herein by reference to Exhibit 9(a) of Registrant's
Registration Statement on Form S-2 (File No. 2-66296),
dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting
Trust Agreement, incorporated herein by reference to
Exhibit 9(b) of Registrant's Registration Statement on
Form S-2 (File No. 2-66296), dated April 29, 1987.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement, incorporated herein by reference to Exhibit
9(c) of Registrant's Registration Statement on Form S-2
(File No. 33-57505), dated May 1, 1995.
9(d) Amendment 1995-2 to the Roundy's, Inc. Voting Trust
Agreement. FILED HEREWITH.
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus 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.
<PAGE>
10.2 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.
10.2(a)Declarations page for renewal through November 1,
1996 of Directors and Officers Liability and
Corporation Reimbursement Policy incorporated herein by
reference to Exhibit 10.2(a) of Registrant's Annual
Report on Form 10-K for the fiscal year ended December
30, 1995, filed with the Commission on March 28, 1996,
Commission File No. 33-57505.
10.3 1991 Stock Incentive Plan, revised February 9, 1993,
incorporated herein by reference to Exhibit 10.6 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993, filed with the Commission
on March 30, 1993, Commission File No. 2-66296.
10.4 Severance and Non-Competition Agreement between the
Registrant and Gerald F. Lestina, incorporated herein
by reference to Exhibit 10.4 of Registrant's Annual
Report on Form 10-K for the fiscal year ended December
30, 1995, filed with the Commission on March 28, 1996,
Commission File No. 33-57505.
II-4
10.5 Roundy's, Inc. Deferred Compensation Plan, effective
March 19, 1996. FILED HEREWITH.
23.1 Consent of Deloitte & Touche LLP.
FILED HEREWITH.
24.1 Powers of Attorney of Certain Officers and Directors of
Registrant
FILED HEREWITH (included as part of Signature Page).
27.1 Financial Data Schedule
FILED HEREWITH.
II-5
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;
<PAGE>
(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.
II-6
<PAGE>
(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.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has
reasonable grounds to believe that it meets all the
requirements for filing on Form S-2 and has duly caused this
Post-Effective 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 26, 1996.
ROUNDY'S, INC.
By ROBERT D. RANUS
-----------------------
Robert D. Ranus
Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Robert D.
Ranus, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent,
full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his
substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, as amended, the Post-Effective Amendment No. 1 to
Registration Statement has been signed this 26th day of
April, 1996 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
<PAGE>
Signature Title
ROBERT E. BARTELS Director
- -----------------
Robert E. Bartels
CHARLES R. BONSON Director
- -----------------
Charles R. Bonson
LLOYD E. COPPERSMITH Director
- --------------------
Lloyd E. Coppersmith
GARY N. GUNDLACH Director
- ----------------
Gary N. Gundlach
GEORGE C. KAISER Director
- ----------------
George C. Kaiser
HENRY KARBINER, JR. Director
- -------------------
Henry Karbiner, Jr.
GERALD F. LESTINA Director
- ------------------
Gerald F. Lestina
PATRICK D. MCADAMS Director
- ------------------
Patrick D. McAdams
ROBERT D. RANUS Director
- ----------------
Robert D. Ranus
BRENTON H. RUPPLE Director
- -----------------
Brenton H. Rupple
<PAGE>
ROUNDY'S, INC.
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INDEX TO EXHIBITS
Exhibit Description and Incorporation by Reference
3.1 Articles of Incorporation of the Registrant, as
amended, incorporated herein by reference to Exhibit
4.1 of Registrant's Registration Statement on Form S-2
(File No. 2-94485), dated December 5, 1984.
3.2 By-Laws of the Company, as amended December 9, 1986,
incorporated herein by reference to Exhibit 3.2 of
Registrant's Annual Report on Form 10-K for fiscal year
ended January 3, 1987, filed with the Commission on
April 3, 1987, Commission File No. 2-66296.
3.3 1988-1 By-Law Amendments, incorporated herein by
reference to Exhibit 3.3 of Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1988,
filed with the Commission on April 1, 1988, Commission
File No. 2-66296.
3.4 Amendment of By-Law Section 5.01, incorporated herein
by reference to Exhibit 3.4 of Registrant's Annual
Report on Form 10-K for the fiscal year ended December
30, 1989, filed with the Commission on March 30, 1990,
Commission File No. 2-66296.
3.5 Amendment of By-Law Sections 7.10, 7.11 and 7.12,
incorporated herein by reference to Exhibit 3.5 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990, filed with the Commission
on March 28, 1991, Commission File No. 2-66296.
3.6 Amendment to By-Laws Relating to Number of Directors,
adopted April 12, 1995, incorporated herein by
reference to Exhibit 3.6 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May 1,
1995.
4.1 Credit Agreement dated March 6, 1989, between Roundy's,
Inc. and The Chase Manhattan Bank, N.A. (as agent),
incorporated herein by reference to Exhibit 4.3 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, filed with the Commission
on March 31, 1989, Commission File No. 2-66296.
4.2 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.
4.3 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).
4.4 Amendment No. 2 dated October 9, 1991 (effective
October 24, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference
to Exhibit 4.7 of Registrant's Annual Report on Form 10-
K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.5 Amendment No. 3 dated December 9, 1991 (effective
December 30, 1991) to the Credit Agreement dated March
6, 1989, between Roundy's, Inc. and The Chase Manhattan
Bank, N.A. (as agent), incorporated herein by reference
to Exhibit 4.8 of Registrant's Annual Report on Form 10-
K for the fiscal year ended December 28, 1991, filed
with the Commission on March 26, 1992, Commission File
No. 2-66296.
4.6 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.
4.7 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.
4.8 Note Agreement dated December 15, 1992 between
Roundy's, Inc. and Connecticut Mutual Life Insurance
Company, The Ohio National Life Insurance Company,
Provident Mutual Life Insurance Company of
Philadelphia, Providentmutual Life and Annuity Company
of America, Guarantee Mutual Life Company, Woodmen
Accident and Life Company and United of Omaha Life
Insurance Company, incorporated herein by reference to
Exhibit 4.11 of Registrant's Annual Report on Form 10-K
for the fiscal year ended January 2, 1993, filed with
the Commission on March 30, 1993, Commission File No. 2-
66296.
4.9 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).
4.10 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.
4.11 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.
4.12 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus
which forms a part of this Registration Statement).
4.13 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus
which forms a part of this Registration Statement).
4.14 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).
4.15 Amendment No. 6 dated March 29, 1996 to the Credit
Agreement dated March 6, 1989, between Roundy's, Inc.
and the Chase Manhattan Bank, N.A. (as agent). FILED
HEREWITH.
5.1 Opinion of Whyte Hirschboeck Dudek S.C. as to legality
of issuance of securities, incorporated herein by
reference to Exhibit 5.1 of Registrant's Registration
Statement on Form S-2 (File No. 33-57505), dated May 1,
1995.
9 Amended and Restated Voting Trust Agreement dated
September 16, 1983, incorporated herein by reference to
Exhibit 9 of Registrant's Annual Report on Form 10-K
for the year ended December 31, 1983, filed with the
Commission on March 30, 1984, Commission File No. 2-
66296.
9(a) Amendments No. 1 and 2, dated April 8, 1986 to Amended
and Restated Voting Trust Agreement, incorporated
herein by reference to Exhibit 9(a) of Registrant's
Registration Statement on Form S-2 (File No. 2-66296),
dated April 29, 1986.
9(b) Amendment No. 1987-1 to Amended and Restated Voting
Trust Agreement, incorporated herein by reference to
Exhibit 9(b) of Registrant's Registration Statement on
Form S-2 (File No. 2-66296), dated April 29, 1987.
9(c) Amendment 1995-1 to the Roundy's, Inc. Voting Trust
Agreement, incorporated herein by reference to Exhibit
9(c) of Registrant's Registration Statement on Form S-2
(File No. 33-57505), dated May 1, 1995.
9(d) Amendment 1995-2 to the Roundy's, Inc. Voting Trust
Agreement. FILED HEREWITH.
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus 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.
10.2 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.
10.2(a)Declarations page for renewal through November 1,
1996 of Directors and Officers Liability and
Corporation Reimbursement Policy, incorporated herein
by reference to Exhibit 10.2(a) of Registrant's Annual
Report on Form 10-K for the fiscal year ended December
30, 1995, filed with the Commission on March 28, 1996,
Commission File No. 33-57505.
10.3 1991 Stock Incentive Plan, revised February 9, 1993,
incorporated herein by reference to Exhibit 10.6 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993, filed with the Commission
on March 30, 1993, Commission File No. 2-66296.
10.4 Severance and Non-Competition Agreement between the
Registrant and Gerald F. Lestina, incorporated herein
by reference to Exhibit 10.4 of Registrant's Annual
Report on Form 10-K for the fiscal year ended December
30, 1995, filed with the Commission on March 28, 1996,
Commission File No. 33-57505.
10.5 Roundy's, Inc. Deferred Compensation Plan, effective
March 19, 1996. FILED HEREWITH.
23.1 Consent of Deloitte & Touche LLP.
FILED HEREWITH.
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.
Exhbit 4.15
AMENDMENT NO. 6
AMENDMENT NO. 6 dated as of March 29, 1996 to the
CREDIT AGREEMENT dated as of March 6, 1989 among ROUNDY'S,
INC., a Wisconsin corporation, the Banks signatory thereto
and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as
Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent are
parties to the Credit Agreement referred to above (as
heretofore amended, the "Credit Agreement") pursuant to
which the Banks have agreed to extend credit to the Borrower
as provided therein.
WHEREAS, the Borrower has requested the Banks and the
Agent to amend the Credit Agreement as provided herein.
WHEREAS, the Banks and the Agent are agreeable to such
amendment on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein it is hereby agreed
as follows:
1. Definitions. All terms defined in the Credit
Agreement shall be used herein as defined in the Credit
Agreement unless otherwise defined herein or the context
otherwise requires.
2. Amendment to the Agreement. Section 7.06(e) of
the Credit Agreement is hereby amended by deleting the
figure "10%" therein and substituting therefor the figure
"5%."
3. Conditions of Effectiveness. This Amendment shall
be effective (as of the date hereof) on the date when
counterparts of this Amendment shall have been executed by
the Borrower and the Required Banks.
4. Miscellaneous. (a) Except as specifically amended
hereby, all the provisions of the Credit Agreement shall
remain unamended and in full force and effect, and the term
"Credit Agreement", and words of like import shall be deemed
to refer to the Credit Agreement as amended by this
Amendment unless otherwise provided herein or the context
otherwise requires. Nothing herein shall affect the
obligations of the Borrower under the Credit Agreement with
respect to any period prior to the effective date hereof.
(b) This amendment shall be governed by and construed
and interpreted in accordance with the laws of the State of
New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers
as of the day and year first above written.
ROUNDY'S, INC.
By EDWARD G. KITZ
--------------------------
Name: Edward G. Kitz
Title: V.P., Secretary & Treasurer
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as Agent
and a Bank
By ELLEN L. GERTZOG
--------------------------
Name: Ellen L. Gertzog
Title: Vice President
BANK ONE, MILWAUKEE, N.A.
By ERIC L. THOMAS
-------------------------
Name: Eric L. Thomas
Title: Vice President
NATIONAL CITY BANK
By PATRICIA A. JACKSON
-------------------------
Name: Patricia A. Jackson
Title: Vice President
NBD BANK
By DONALD J. BUSE
-------------------------
Name: Donald J. Buse
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By RICHARD T. JANDER
--------------------------
Name: Richard T. Jander
Title: Assistant Vice President
Acknowledged and Consented to
as of the Date First Above Written:
CARDINAL FOODS, INC.
By EDWARD G. KITZ
--------------------------
Name: Edward G. Kitz
Title: Vice President & Secretary
SCOT LAD FOODS, INC.
By EDWARD G. KITZ
--------------------------
Name: Edward G. Kitz
Title: Vice President & Secretary
SHOP-RITE, INC.
By EDWARD G. KITZ
--------------------------
Name: Edward G. Kitz
Title: Vice President & Secretary
Exhibit 9(d)
AMENDMENT 1995-2 TO THE ROUNDY'S, INC.
VOTING TRUST AGREEMENT
The complete text of proposed Amendment 1995-2 is set out below:
The first paragraph of subparagraph 5(c) is amended to read in
its entirety as follows. (The second paragraph of subparagraph 5(c)
remains in effect in accordance with its terms and is unaffected by
this amendment):
"(c) The Security Holders shall have no vote with
respect to the election or removal of Directors of Roundy's,
except as provided in this subparagraph (c). Four members
of the Board of Directors (hereinafter the "Retailer
Directors") shall be elected by vote of the Security
Holders. One of the Retailer Director's terms shall expire
at the annual meeting of shareholders each year, except that
two of such Retailer Director's terms shall expire at every
third annual meeting of shareholders (the "Third Annual
Meeting"). At the meeting of Security Holders held
immediately prior to the annual meeting of shareholders each
year, the Advisory Committee of retailers shall present to
the Security Holders a roster of three nominees (in the case
of each Third Annual Meeting, five nominees) chosen by the
Advisory Committee in its discretion who either are
themselves customer-shareholders of Roundy's or are
principal officers of customer-shareholders which are not
natural persons. The Security Holders whose shares are
represented at such meeting shall vote in the manner
provided in subparagraph (b), and the single candidate
receiving the highest total votes (in the case of each Third
Annual Meeting, the two candidates receiving the highest and
next highest total votes) cast by Security Holders shall
receive the votes of all the Trustees to fill the vacancy
created by the expiration of the term of the retiring
Retailer Director (or Directors). No Retailer Director
shall be allowed to serve more than 10 years in succession
as a Director. In the event of the vacancy of any Retailer
Director position prior to the normal expiration of such
Retailer Director's term, such vacancy may be filled by vote
of the remaining Directors as provided in the By-Laws of
Roundy's. In the event a proposal to remove any Retailer
Director is brought before the shareholders of Roundy's at
any regular or special meeting, the Security Holders shall
vote on such proposal in the manner provided in subparagraph
(b), and the Trustees shall vote in all shares deposited to
the Voting Trust as directed."
Exhibit 10.5
ROUNDY'S, INC.
DEFERRED COMPENSATION PLAN
Concept Roundy's, Inc. ("Roundy's") created this Plan,
effective as of March 19, 1996, to assist eligible
employees in deferring income until their
retirement, death, or other termination of
employment.
AdministratorThe Vice President--Chief Financial Officer of
Roundy's is the Administrator for employees of
Roundy's participating in the Plan. If the
Administrator is also a participant, then the Chief
Executive Officer of Roundy's is the Administrator
as to that person.
Eligibility Participation in the Plan is limited to a select
group of management or highly compensated
employees. These employees are defined as the
Elected Officers of Roundy's who are elected by
Roundy's Board of Directors. The Administrator
determines eligibility and may revise the
eligibility requirement if necessary to assure that
the Plan continues to be exempt from the
eligibility, vesting, and funding requirements of
the Employee Retirement Income Security Act of
1974, as amended.
ParticipationEligible persons must complete Deferred Compensa
Requirements tion Agreements and Participant Acknowledgment
Forms, in the forms shown as Exhibit A and B,
respectively, in order to participate. Agreements
completed by newly-eligible participants within
30 days of becoming eligible will be effective
either immediately, or as of a later designated
date, but only as to compensation payable
after the date of the Agreement.
--An eligible person may complete more than one
Deferred Compensation Agreement. Each Agreement
will be treated as a separate program under the
Plan and the person completing an additional
Agreement will be treated as a newly-eligible
participant as to each Agreement.
--A person who ceases to be eligible has no further
right to complete additional Deferred Compensation
Agreements. Agreements in effect at the time
eligibility is lost will remain in effect subject
to the terms of the Plan.
--The Administrator makes all final decisions
regarding eligibility and compliance with the
participation requirements.
Compensation Each Deferred Compensation Agreement must designate
Deferral either a flat dollar amount of deferral or a
percentage amount of deferral, and whether the
amount is to be deducted from salary or bonus, or
from both. Each Agreement shall also specify the
time period during which the deferral is to take
place. A participant may make annual elections
to indicate the amount of deferral for the year
following such election. Roundy's will make the
corresponding reductions in compensation and credit
the Deferred Benefit Account of the participant.
Minimum Each Deferred Compensation Agreement must provide
Deferrals for an aggregate deferral commitment that is not less
than $10,000 over a period not more than 7 years from
the effective date of the Agreement and not less
than $2,000 in any one year. Only whole percentages
may be elected as percentage deferrals. The
Administrator may adjust this minimum and establish
and/or revise maximums in the Administrator's
discretion.
Maximum The aggregate annual deferral may not exceed
Annual $100,000 per calendar year for all participants combined
Aggregate unless Roundy's, Inc. Board of Directors shall approve,
Deferral by specific resolution, an aggregate annual deferral in
excess of such limit.
Deferral An annual deferral election under the Plan is
Elections irrevocable and not subject to are change unless the
Except for participant separates from service with Roundy's or
Unforeseen incurs an Unforeseen Emergency.
Emergency
An "Unforeseen Emergency" is defined as severe
financial hardship to the participant resulting from
a sudden and unexpected illness or accident of the
participant or of a dependent of the participant (as
defined in Section 152(a) of the Internal Revenue
Code), loss of the participant's property due to
casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of
events beyond the control of the participant. The
circumstances that will constitute an Unforeseen
Emergency will depend upon the facts of each case.
Before any amounts are paid or withdrawn from a
participant's Deferred Benefit Account by reason of
an Unforeseen Emergency, as provided below, the
Administrator shall reduce or cease the amount of
deferrals under the Plan to allow the participant
to deal with the severe financial hardship resulting
from such Unforeseen Emergency.
Makeup of A participant whose deferral has been reduced for
Deferrals Unforeseen Emergency may elect, prior to termination
Reduced of employment to reinstate his or her original deferral
for by paying to Roundy's the difference between the reduced
Unforseen deferrals actually paid and the originally scheduled
Emergency amount as in the participant's original Deferred
Compensation Agreement.
Effect of All deferral elections under the Plan shall automatically
Change terminate as of the last day of the month preceding the
of Control occurrence of a Change of Control. The benefits of each
Event participant affected by the automatic termination of
of Deferral deferrals will be adjusted to reflect the reduced deferral.
Elections The method of adjustment is as described and illustrated
in Schedule A to the Plan. The definition of Change of
Control Event is as set forth in Schedule B to the Plan,
which may be revised from time to time, by the
Administrator, to reflect the same definition of this
term used by Roundy's.
Deferred --Roundy's will establish on its books a Deferred Benefit
Benefit Account for each Plan Participant.
Account
--Deferred compensation shall be credited to this
Account as of the last day of the month in which
the participant would otherwise have received the
compensation.
--As of the last day of each month interest at the
Plan's Interest Yield will be credited to the
account. Interest will be calculated by applying
the Interest Yield to the balances of the Account
on such date including contributions or
distributions to be credited or deducted on that
date.
--Distributions shall be charged to this Account as
they are made.
Roundy's may deduct from non-deferred compensation
any taxes it is required to withhold on deferred
amounts.
Incapacity If the Administrator shall find that any person to
whom any payment is payable under this Plan is
unable to care for his or her affairs because of
illness or accident, or is a minor, any payment due
(unless a prior claim therefore shall have been
made by a duly appointed guardian, committee or
other legal representative) may be paid to the
spouse, child, a parent, or a brother or sister, or
to any person deemed by the Administrator to have
incurred expense for such person otherwise entitled
to payment in such manner and proportions as the
Administrator may determine. Any such payment
shall be a complete discharge of the liabilities of
Roundy's under this Plan to the extent of such
payment.
Trust A participant's Deferred Benefit Account is a means
Fund of measuring the value of the participant's deferred
Created compensation. Roundy's has established a Trust (the
"Trust") dated March 19, 1996, to hold assets to be
used to pay benefits under the Plan, and will
contribute to the Trust assets described under this
Plan. Any assets designated by Roundy's to pay
benefits under this Plan shall at all times remain
the property of Roundy's or the Trust. A
participant has no property interest in specific
assets of Roundy's or the Trust because of the Plan.
The rights of any participant, any beneficiary, or
any estate to benefits under the Plan shall be solely
those of an unsecured creditor of Roundy's.
Statement Following the close of each year the Administrator
of Account will provide statements of account to each participant.
Interest Interest Yield means, for each 12 consecutive calendar
Yield months ending after January 1, the Moody's Long Term
Bond Rate in effect on such January 1 (or the last
business day immediately preceding such date if it is a
Saturday, Sunday, or holiday) plus 2% divided by 12.
Payment of Upon a participant's termination of employment, for
Benefits any reason other than death, Roundy's will pay to
Other Than the participant, as compensation for prior services,
Upon Death an amount equal to the participant's Deferred Benefit
Account measured as of the last day of the month in which
employment terminated.
Benefits Upon the death of a participant prior to termination of
Upon Death employment, and before any periodic payments have started,
Before Roundy's will pay to the participant's Designated
Termination Beneficiary, as designated on a Beneficiary Designation
of Form attached as Exhibit B, as compensation for services
Employment rendered prior to the date of death, a pre-
retirement death benefit that is equal to the
participant's Deferred Benefit Account measured as
of the last day of the month coincident with or
immediately preceding the date of death or, if
greater, a pre-retirement death benefit determined
as a multiple of 5 times the total aggregate
deferral commitment of the participant.
Example:
Participant age 50 elects to defer $10,000 each
year for 7 years
Stated Deferral ($10,000) x Deferral Period (7)=
Total Aggregate Deferral Commitment ($70,000)
Total Aggregate Deferral Commitment ($70,000) x
Multiple (5) = Total Pre-Retirement Death Benefit ($350,000)
Total Pre-Retirement Death Benefit ($350,000)
divided by number of years over which benefit payable
(10) = $35,000/year for 10 years
If there is a reduction in the deferral amount or a
premature distribution due to Unforeseen Emergency,
the Administrator will advise the participant as to
the corresponding effect on the participant's pre-
retirement death benefit. If a participant has
made more than one deferral commitment, the
participant's pre-retirement death benefit will be
separately determined for each deferral commitment.
A special rule applies, however, for any
participant who is not insurable for a death
benefit larger than the "guaranteed issue" amount
available to Roundy's at standard rates when the
participant completes a Deferred Compensation
Agreement. In that case, the affected
participant's pre-retirement death benefit will be
limited to the greater of (i) the balance in the
participant's Deferred Benefit Account, or (ii) the
"guaranteed issue" amount of death benefit
available to Roundy's at standard rates at the time
the participant completed his or her Deferred
Compensation Agreement.
Example:
Assume that the guaranteed issue life insurance
available to Roundy's is $300,000 per person.
Assume that an "uninsurable at standard rates" 45-
year old participant elects to defer $70,000 over 7
years.
The participant's formula pre-retirement death
benefit of $350,000 is not available because of the
lack of insurability.
Instead, the participant's pre-retirement death
benefit would be $300,000 divided by 10 years, or
$30,000 per year for 10 years. (Of course, in the
event that the participant's Deferred Benefit
Account paid over 10 years would produce a larger
benefit, that larger amount would then be paid.)
Forms of
Benefit
Payment:
- --TerminationUnless a participant elects an alternative benefit
of payment period as part of the participant's Deferred
Employment Compensation Agreement, a participant will
At or receive payment of his or her benefits upon
After termination of employment at or after age 65 in
Age 65 annual installments of the Deferred Benefit Account,
commencing within 30 days of the date of termination
of employment, over not more than 10 years, as
determined by the Administrator. At the time a
participant completes a Deferred Compensation
Agreement the participant is entitled to select
the number of years over which benefits are to
be paid to the participant, up to a maximum of
15 years. The payment period selected shall not
thereafter be subject to change by the participant.
The amount to be distributed annually is determined
by multiplying the aggregate balance of the
participant's Account by a fraction, the numerator of
which is one (1) and the denominator of which is
the number of years remaining for the payments
to be made (e.g., 1/10, 1/9, 1/8, etc.). Additional
earnings are to be credited to the Account
during the installment payment period in the same
way that earnings are credited while the participant
is employed.
Other Termina-A participant whose benefit is payable for a reason other
tions of than normal retirement at or after age 65 (or an age
Employment earlier than 65, if an alternative benefit age before 65
Except Due has been selected) or death will receive payment in a
to Death single lump sum amount within 30 days following
or Normal termination of employment.
Retirement
- --Pre-retire-If a participant's Deferred Benefit Account is to be paid
ment Death as the participant's pre-retirement death benefit, payment
Benefit will be made in 10 approximately level annual installments
(calculated by the Administrator using reasonable
earnings assumptions) commencing within 30 days of
the date of death. Additional earnings are to be
credited to the Account during the installment
payment period in the same way earnings are
credited while a participant is employed.
If a participant's pre-retirement death benefit is
the multiple of deferral or guaranteed issue
formula amount, described earlier in the Plan,
payment of the benefit will be made in 10 equal
annual installments commencing within 30 days of
the date of death. No additional earnings are
credited during the installment payment period when
the death benefit amount is determined by the
formula amount.
Designated All payments by Roundy's will be made to the
Beneficiary participant, if living. If the participant has died,
then any payment under the Plan will be made to the
Designated Beneficiary of the participant. All
beneficiary designations must be made in writing
and acknowledged by the Administrator. If there
is no beneficiary designation in force when Plan
benefits become payable to a beneficiary, the
deemed beneficiary shall be the participant's
spouse, or if no spouse is then living, the
participant's estate. If a beneficiary dies before
receiving all payments due, the remaining payments
will be made to the beneficiary's estate.
Payments for The Administrator, in his or her sole discretion,
Unforseen upon a determination that a participant has incurred
Emergency an Unforeseen Emergency (see definition above), may
permit such participant to withdraw, all or such
portion of such participant's Deferred Benefit Account
as of the withdrawal date which the Administrator
determines is reasonably needed to satisfy the
emergency hardship.
The circumstances which will constitute an
Unforeseen Emergency will depend on the facts of
each case, but in any case, payment from the Plan
may not be made to the extent that such hardship is
or may be relieved: (i) through reimbursement or
compensation through insurance or otherwise; (ii)
by liquidation of the participant's assets, to the
extent the liquidation of such assets would not
itself cause severe financial hardship; or (iii)
by cessation of deferrals under the Plan.
Withdrawals of amounts because of an Unforeseen
Emergency shall only be permitted to the extent
reasonably necessary to satisfy the emergency need.
Assignment No participant or beneficiary may assign the right
to receive benefits under the Plan.
Not An This Plan may not be construed as giving any person
Employment the right to be retained as an employee of Roundy's.
Contract
Taxes Roundy's will withhold from all benefit payments
Amendment all required taxes. Roundy's may, at any time, amend
and the Plan by action of Roundy's Board of Directors.
Termination Roundy's may, at any time, terminate the Plan as to
its employees. Roundy's may not, however, reduce
any benefit payment to a participant based on
deferrals already made, without the participant's
consent.
Limitation No member of the Board of Directors of Roundy's or
on the Administrator and no officer or employee of
Liability Roundy's shall be liable to any person for any action
taken or omitted in connection with the administration
of this Plan, unless attributable to his or her own
fraud or willful misconduct; nor shall Roundy's be
liable to any person for any such action or omission.
Indemnifi- Roundy's shall indemnify the Administrator for, and
cation hold him or her harmless against, any and all claims,
liabilities, charges and expenses (including
reasonable attorneys' fees) in connection with or
arising out of the individual's performance of his
or her duties hereunder.
Construction The Plan is to be construed under the laws of the
State of Wisconsin.
Binding This Plan is binding upon Roundy's and participants
Agreement and their respective successors, assigns, heirs,
executors, and beneficiaries.
ADOPTED pursuant to authorization of the Board of
Directors of Roundy's as of:
Date: March 19, 1996 ROUNDY'S, INC.
By___________________________________
Gerald F. Lestina
President & Chief Executive Officer
Attest______________________________
Edward G. Kitz
V.P., Secretary & Treasurer
SCHEDULE A
Assumptions:
X is healthy and under age 45.
X elects to defer $10,000/year for 7 years.
X's pre-retirement death benefit is:
Aggregate Deferral $10,000 x 7 years = $ 70,000
Death Benefit Multiple x 5
Pre-retirement Death Benefit $350,000
Further Assume:
After 4 years of deferral X stops contributing
either because of unforeseen emergency or Change of
Control Event.
X's adjusted pre-retirement death benefit is based
on his actual deferrals:
Aggregate Deferral $10,000 x 4 years = $40,000
Death Benefit Multiple x 5
Pre-retirement Death Benefit (adjusted) $200,000
Further Assume:
After 4 years of deferral X did not stop all
deferrals but had them reduced by one-half due to
unforeseen emergency.
X's adjusted pre-retirement death benefit is based on his
actual deferrals:
(one-half for all years) $5,000 x 7 years = $35,000
x 5
$175,000
PLUS
(one-half for years 1-4) $5,000 x 4 years = $ 20,000
x 5
$100,000
Total Adjusted Pre-retirement Death Benefit $275,000
SCHEDULE B
Change of Control Event means any one of the following:
(a) Any person or group of persons (as defined in Rule 13d-5
under the Securities Exchange Act of 1934), together with
its affiliates (but not including the Roundy's, Inc. Voting
Trust), become the beneficial owner, directly or indirectly,
of 30% or more of the then outstanding Common Stock of
Roundy's, Inc. or 30% or more of the then outstanding
securities of Roundy's, Inc. entitled generally to vote for
the election of directors ("Voting Securities") provided,
that if the person so acquiring such Common Stock or Voting
Securities is itself a corporation or other entity such
acquisition shall constitute a Change of Control Event only
if less than 70% of the outstanding Common Stock or Voting
Securities of such corporation or other entity are held by
persons who, immediately before such acquisition, held
Common Stock or Voting Securities of Roundy's, Inc.;
(b) The merger or share exchange of Roundy's, Inc. with any other
corporation, the sale or other disposition of substantially
all of the assets of Roundy's, Inc., or the liquidation or
dissolution, of Roundy's, Inc., unless immediately thereafter
at least 70% of the outstanding Common Stock and 70% of the
outstanding Voting Securities of the corporation or entity
surviving such merger or share exchange, or acquiring such
assets, is held beneficially by persons who, immediately before
such merger or share exchange or acquisition, held beneficially
Common Stock or Voting Securities of Roundy's, Inc., or
(c) At least 2/3 of the directors of Roundy's, Inc. in office
immediately prior to any other action proposed to be taken
by Roundy's, Inc. stockholders or by Roundy's, Inc. Board of
Directors determines that such proposed action, if taken,
would constitute a change of control of Roundy's, Inc. and
such action is taken.
EXHIBIT A
ROUNDY'S, INC.
DEFERRED COMPENSATION PLAN
DEFERRED COMPENSATION AGREEMENT
PARTICIPANT
INFORMATION Name:________________Social Security #:___________________
Address:________________
________________
Total Deferral Commitment $_____________________over the next seven (7)
years, e.g. by the year ending December 31,__. (Minimum deferral is
$10,000 over 7 years.)
[mark one box only]
ANNUAL DEFERRAL ELECTION: $___________ __during the following year only, or
__during each of the following
years, until revoked or modified,
through the year ending
December 31, ____.
Select One:
1.__ This deferral shall be deducted from my base salary during the year
at the rate of $______________per pay period.
2.__ This deferral shall be deducted from my annual bonus payment.
3.__ This deferral shall be deducted from my base salary and any bonus
payments paid to me during the year at the rate of __% per salary
and bonus payment. The total amount deferred for any year will
not exceed the annual deferral amount stated above.
I understand that Roundy's intends to purchase life insurance on
my life in order to cover its liability under the Plan.
NON-PARTICIPATION: __I elect NOT to participate in the Deferred
Compensation Plan at this time.
BENEFIT PAYMENT ELECTION. If no alternative benefit payment period
is elected below, your benefits at or after age 65 will be paid to
you over 10 years. If you elect an alternative payment period you
must specify the payment period and age at which benefits are to
begin. The available alternatives include a lump sum payment or
periodic payments over a period of up to 15 years, beginning at age
55 to 65.
Select One:
1.__I do not choose to elect an alternative benefit payment period.
2. __I choose the following as my alternative benefit payment period:
___Lump Sum
___Payment over __years (Enter number of years not to
exceed 15 years).
___Age at which benefits are to begin (enter age from
55 to 65).
I agree to execute a Participant Acknowledgement Form.
Signature____________________ Receipt ROUNDY'S, INC.
Participant Acknowledged:
___________________ By ____________________
Date Administrator
EXHIBIT B
ROUNDY'S, INC.
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION FORM
I, the undersigned _______________________________, am a Participant
in the Roundy's, Inc. Deferred Compensation Plan dated March 19, 1996.
Under certain conditions set forth in the Plan, benefits
thereunder may be payable to beneficiaries named by me. I hereby
designate the following beneficiaries to receive payments under
the Plan in case of my death.
1. Initial Beneficiary.The Initial Beneficiary shall be:
Name Relationship, if any
______________________ _____________________________
2. Contingent Beneficiary. If I am not survived by the
Initial Beneficiary, or if said Beneficiary shall die before
receiving any benefits under the Plan, the Contingent Beneficiary
shall be:
Name Relationship, if any
---------------------- -----------------------------
Dated this ________ day of ________________, _______.
_____________________________ _______________________
Signature of Witness Participant Signature
_____________________________
Witness (Print Name)
*Cannot be a Beneficiary
Receipt Acknowledged.
ROUNDY'S, INC.
By_____________________________
Title _________________________
EXHIBIT C
ROUNDY'S, INC.
DEFERRED COMPENSATION PLAN
PARTICIPANT ACKNOWLEDGEMENT
I, the undersigned _____________________________________, am a
Participant in the Roundy's, Inc. Deferred Compensation Plan. I have
received and have read a copy of the Plan document and agree to be
bound by all the terms and provisions of the Plan.
Dated this _________ day of ____________________, ________.
____________________________ ___________________________
Witness Signature Participant Signature
____________________________
Witness (Print Name)
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Amendment No. 2 to the Registration Statement of Roundy's,
Inc. on Form S-2 of our reports dated February 23, 1996,
included and incorporated by reference in the Annual Report
on Form 10-K of Roundy's, Inc. for the year ended December
30, 1995, and to the use of our report dated February 23,
1996, 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 26, 1996
<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 12-30-95 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 26,382,000
<SECURITIES> 0
<RECEIVABLES> 99,727,000
<ALLOWANCES> 0
<INVENTORY> 163,204,100
<CURRENT-ASSETS> 302,870,600
<PP&E> 154,975,800
<DEPRECIATION> 80,424,900
<TOTAL-ASSETS> 407,336,600
<CURRENT-LIABILITIES> 212,130,800
<BONDS> 78,850,200
0
0
<COMMON> 1,299,100
<OTHER-SE> 90,602,000
<TOTAL-LIABILITY-AND-EQUITY> 407,336,600
<SALES> 2,488,196,200
<TOTAL-REVENUES> 2,492,162,300
<CGS> 2,260,039,400
<TOTAL-COSTS> 2,260,039,400
<OTHER-EXPENSES> 203,200,400
<LOSS-PROVISION> 5,871,500
<INTEREST-EXPENSE> 7,929,000
<INCOME-PRETAX> 15,122,000
<INCOME-TAX> 6,099,900
<INCOME-CONTINUING> 9,022,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,022,100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
