As Filed with the United States Securities and Exchange
Commission on April 24, 1997
Registration No. 33-57505
________________________________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
POST-EFFECTIVE AMENDMENT NO. 2
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;
Risk Factors
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
2,700 Shares Class A (Voting) Common Stock
195,326 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"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting Aggregate
Price to Discounts and Proceeds to
Public(1) Commissions Company
________________________________________________________________________
Class A Common Book Value None $ 254,610
________________________________________________________________________
Class B Common Book Value None $18,419,242
(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 28, 1996, was $94.30.
The date of this Prospectus is ______ __, 1997.
TABLE OF CONTENTS
Items Page
Available
Information................................................... i
Incorporation of Certain Documents by Reference............... ii
Prospectus Summary............................................ 1
Risk Factors ................................................. 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.................................................... 30
Description of Stock.......................................... 32
Voting Trust.................................................. 34
Legal Matters................................................. 36
Experts....................................................... 36
Indemnification............................................... 36
Index to Financial Statements................................. F-1
Exhibit A - Subscription Agreement............................ A-1
Exhibit B - Buying Deposit Agreement.......................... A-2
Exhibit C - Article V of the By-Laws.......................... A-4
Exhibit D - Policy Relating to Redemption of Stock by
Inactive Customer Shareholders and Former
Employees......................................... A-6
Exhibit E -Policy Regarding Issuance and Sales of Roundy's,
Inc. Stock ........................................ A-14
No person has been authorized to give any information
or make any representations other than as contained in this
Prospectus in connection with the offering described herein.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, to any person in any state
in which it is unlawful to make such offer or solicitation.
The delivery of this Prospectus at any time does not imply
that there has been no change in the affairs of the Company
subsequent to its date of issue.
AVAILABLE INFORMATION
Roundy's is subject to the informational requirements
of the Securities Exchange Act of 1934 (the "1934 Act") and
in accordance therewith files reports and other information
with the Securities and Exchange Commission (the "Commission").
Such reports and other information can be inspected and copied
at the public reference facilities maintained by the Commission
at 450 5th Street N.W., Judiciary Plaza, Washington, D.C. 20549
and at the Commission's regional offices at Room 1204, Everett
McKinley Dirksen Building, 219 South Dearborn Street, Chicago,
Illinois 60604 and at Room 1102, Federal Building, 26 Federal
Plaza, New York, New York 10007, and copies of such material
can be obtained from the Public Reference Section of the
Commission at 450 5th Street, N.W., Judiciary Plaza,
Washington, D.C. 20549 at prescribed rates. The Company will
furnish annual reports to its stockholders within 120 days after
the end of each fiscal year, which will include financial
statements examined and reported on by independent certified
public accountants.
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. 33-57505) 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 28,
1996 (the "1996 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.
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 13 retail warehouse food stores under
the name "Pick 'n Save" or "Park & Save," three limited
assortment food stores under the name "Mor For Less" and 11
conventional stores under the name "Cardinal Foods,"
"Village Market," "Park & Shop," "Price Less" 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 890 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 70% of Roundy's Stock (including 100% of
the outstanding Class A Common) is owned by the owners of
130 retail grocery stores serviced by Roundy's. The balance
of the Company's customers are independent grocers which do
not own any Roundy's Stock.
Ownership of Class A Common is limited to 100 shares
for each retail food store operated by the stockholder-
customer (or a corporation which the stockholder-customer
controls). There are also certain restrictions on the
number of shares of Class B Common which a stockholder may
own, pursuant to the terms of certain policies adopted by
Roundy's Board of Directors. These policies may be changed
at any time. See "Basic Features of Offering" below and
"TERMS OF OFFERING." Class B Common shares have been, and
it is anticipated that they will continue to be, distributed
in payment of patronage dividends declared to 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:
(1) Subject to the limitations on purchases of Class B
Common as described under "TERMS OF OFFERING" and
Exhibit E, a stockholder-customer may subscribe for
shares of Class B Common during three "window" periods
each year (consisting of the last two weeks of May,
August and November, respectively), pay the full price
therefore (Book Value as of the close of the fiscal
year prior to subscription) and receive certificates
for the shares subscribed for. A stockholder-customer
may deposit funds with Roundy's pursuant to a written
agreement with Roundy's to fulfill the stockholder-
customer's buying deposit requirement. During the three
"window" periods, the stockholder-customer may
subscribe for shares of Class B Common (within
applicable limits) and allocate some or all of such
deposited funds to the payment for such shares (at the
Book Value as of the close of the fiscal year preceding
the year in which such subscription is received). See
"TERMS OF OFFERING--Buying Deposits; Application of
Deposited Funds."
(2) A stockholder-customer may acquire shares of Class
B Common by receipt of such shares in payment of a
portion of a patronage dividend, if and when any such
patronage dividends are declared.
See "THE COMPANY--Payment of Patronage Dividends."
(3) Stockholder-customers of Roundy's who cease to do
business with Roundy's are required to exchange their
Class A Common for Class B Common, on a share for share
basis. See "EXCHANGE OF CLASS A COMMON FOR CLASS B
COMMON."
In addition, Roundy's may offer shares of Class B
Common to its Directors and certain key employees, and to
Trustees of the Roundy's, Inc. Voting Trust at a price equal
to the Book Value as of the close of the prior fiscal year,
or, in the case of key employees, as bonus shares at the
discretion of the Board of Directors or pursuant to
employees' exercise of stock options.
Use of Proceeds
The proceeds of this offering will be used for general
working capital purposes and for capital expenditures, as
required. See "USE OF PROCEEDS."
Repurchase of Shares
Roundy's is obligated under its current stock
redemption policy as set forth in Exhibit D ("the Stock
Redemption Policy") to repurchase shares of Roundy's Stock
upon request made by or on behalf of a stockholder who has
terminated or substantially reduced its relationship with
Roundy's. This obligation, however, is subject to change
should the Stock Redemption Policy be revised and is limited
with respect to the aggregate dollar amount of repurchases
that may be made at any particular time. With certain
exceptions, shares will be repurchased under the Stock
Redemption Policy over a five-year period beginning on the
first anniversary date of the stockholder-customer's
repurchase request. The repurchase price is the Book Value
at the end of the fiscal year preceding the date of the
actual repurchase. Roundy's is not obligated to repurchase
any Roundy's Stock except under the Stock Redemption Policy
as it may be in effect from time to time. The Stock
Redemption Policy may be amended or rescinded at any time by
the Board of Directors. See "REPURCHASE OF SHARES."
Summary Financial Data
The following table sets forth certain data as to the
Company for, and as of the end of, each of the last three
fiscal years:
Fiscal Years
-----------------------------------------
1996 1995 1994
(Dollars in Thousands)
Earnings Statement Data:
Net Sales and Service Fees...... $2,579,010 $2,488,196 $2,461,510
Earnings Before Patronage
Dividends and Income Taxes... 23,466 20,251 11,055
Patronage Dividends............. 5,568 5,129 0
Net Earnings.................... 10,267 9,022 6,554
Balance Sheet Data:
Total Assets.................... 434,641 407,337 404,652
Working Capital................. 90,498 90,740 91,814
Long-term Debt (less current
maturities).................. 93,615 78,850 88,227
Stockholders' Equity(1)......... 109,945 100,033 90,419
(1) Includes redeemable common stock. Also includes
patronage dividends payable in Class B Common of
$3,779,000 and $3,405,000 in 1996 and 1995,
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."
RISK FACTORS
Lack of Market for Roundy's Stock
The shares offered hereby may not be sold or otherwise
transferred or pledged by the record holder thereof without
Roundy's written consent. Although Roundy's is obligated
under its current Stock Redemption Policy to repurchase its
shares from a customer which has terminated its business
relationship with Roundy's and which tenders such stock for
repurchase, this obligation is limited in various respects,
including (without limitation) as to the maximum amount
which Roundy's will pay for stock repurchases in any fiscal
year. Further, the Stock Redemption Policy, and therefore,
Roundy's obligation to repurchase shares of Roundy's stock,
may be modified or rescinded at any time without prior
notice. See "REPURCHASE OF SHARES."
Limitations on Investment Return
Although Roundy's may pay patronage dividends to its
stockholder-customers in certain circumstances, no assurance
can be given as to when or whether patronage dividends will
be paid in the future. No patronage dividends were paid for
1994. Roundy's only obligation to pay patronage dividends
is that imposed by Article V of its By-Laws (see Exhibit C),
and these By-Law provisions may be amended or repealed at
any time by Roundy's Board of Directors. There can be no
assurance that Roundy's will have in any year sufficient net
earnings from Roundy's cooperative business and consolidated
net earnings to permit the payment of patronage dividends.
See "THE COMPANY -- Payment of Patronage Dividends."
Dividends other than patronage dividends have not been paid
by Roundy's, and it is not anticipated that any such
dividends will be paid. Consequently, owners of Class B
Common who are not stockholder-customers cannot expect to
receive any patronage or other dividends of any kind.
Accordingly, a purchaser of the securities offered hereby
may be unable to realize a return on its investment, or
realize all or a portion of the value of shares purchased,
except in the event of the repurchase of such shares by
Roundy's, or the liquidation of Roundy's.
Limitations on Purchasers
This offering is being made only to persons who are
engaged in the operation of retail food stores which are
customers of Roundy's, and to the Directors and certain key
employees of Roundy's, and to Trustees of the Roundy's, Inc.
Voting Trust. The amount of Class A Common (the only class
having voting rights and substantially all of which is owned
by Roundy's stockholder-customers) which may be purchased by
any such person is limited, no person being permitted to own
more than 100 shares for each Active Customer operated by
such person. The amount of Class B Common which may be
purchased is also limited, pursuant to policies adopted by
the Board of Directors of Roundy's (which policies may be
changed at any time). See "TERMS OF OFFERING" and Exhibit E
attached hereto.
Sale of All Shares Offered Not Assured
Because (a) there are limitations upon who may purchase
shares hereunder and upon how many shares of Class A Common
and Class B Common any person may own or purchase, (b)
there is uncertainty as to whether future patronage
dividends will be paid and, if paid, the amount, if any,
that may be paid in shares of Class B Common, and (c) this
offering is not underwritten, there can be no assurance that
all or any portion of the shares offered hereby will be
sold. See "PLAN OF DISTRIBUTION."
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.
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 28, 1996, 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 70 holders of such Certificates on December 28, 1996.
On December 28, 1996 an aggregate of 214 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.
PLAN OF DISTRIBUTION
The shares offered hereby are being offered only by
Roundy's, through its officers, directors and employees.
Roundy's is primarily concerned with attracting
stockholders who can effectively use the services of
Roundy's and whose trade with Roundy's will be mutually
beneficial. Sale of shares offered hereby is limited
primarily to individuals, partnerships or corporations which
are engaged in the operation of retail food stores and which
purchase merchandise from or through Roundy's. Company
employees whose duties consist of sales of merchandise to
retail food stores are not authorized to accept stock
subscriptions or to sell shares of stock to any person. No
salesmen or securities dealers are or ever have been
employed for the sale of Roundy's Stock, and no officer,
director or employee directly or indirectly receives any
commission, bonus, or other separate compensation for sales
of Roundy's Stock.
TERMS OF OFFERING
Limitation on Offerees and Purchasers
This offering is limited to individuals, partnerships
and corporations engaged in the operation of retail food
stores which are Active Customers of Roundy's. Shares of
Class B Common may also be sold hereunder to the Directors
and certain key employees of Roundy's and to Trustees of the
Roundy's, Inc. Voting Trust.
Required Purchases of Class A Common
Shares of Class A Common offered hereby must be
purchased in units of 100 shares. No person may own any
Class A Common unless such person owns and operates at least
one Active Customer. Each retailer for whom Roundy's is the
primary source of supply is required to purchase and own 100
shares of Class A Common for each Active Customer operated
by such person. No person may own more than 100 shares of
Class A Common for each Active Customer operated by such
person. Under certain policies adopted by Roundy's Board of
Directors, there are limits on the number of shares of Class
B Common which may be purchased. See "Methods Of Acquiring
Shares of Class B Common" below.
Methods of Acquiring Shares of Class B Common
Shares of Class B Common may be purchased or acquired
in one of the following ways:
(1) A stockholder-customer may subscribe for shares of
Class B Common during three "window" periods each year
(consisting of the last two weeks of May, August and
November, respectively), pay the full price therefor
(Book Value as of the close of the fiscal year prior to
subscription adjusted for subsequent stock dividends
and stock splits) and receive certificates for the
shares subscribed for. Pursuant to the terms of
certain policies which have been adopted by Roundy's
Board of Directors as set forth in Exhibit E attached
hereto (the "Issuance Policy"), the total number of
shares that a stockholder-customer may purchase in one
year is limited to 15% of the stockholder-customer's
buying deposit deficit for active customers with a
buying deposit deficit, and 5% of the buying deposit
for active customers without a buying deposit deficit;
provided, that certain new stockholder-customers are
entitled each year to purchase shares up to 30% of
their buying deposit. See "Buying Deposit; Application
of Deposited Funds" below and Exhibit E attached
hereto.
A stockholder-customer may deposit funds with Roundy's
pursuant to a written agreement with Roundy's to
fulfill the stockholder-customer's buying deposit
requirement. During the three "window" periods, the
stockholder-customer may subscribe for shares of Class
B Common (within applicable limits) and allocate some
or all of such deposited funds to the payment for such
shares (at the Book Value as of the close of the fiscal
year preceding the year in which such subscription is
received).
(2) A stockholder-customer may acquire shares of Class
B Common by receipt of such shares in payment of a
portion of a patronage dividend. There can be no
assurance that Roundy's will have in any year
sufficient net earnings from Roundy's cooperative
business and consolidated net earnings to permit the
payment of patronage dividends. See "THE COMPANY--
Payment of Patronage Dividends."
(3) Stockholder-customers of Roundy's who cease to do
business with Roundy's are required to exchange their
Class A Common for Class B Common, on a share for share
basis. See "EXCHANGE OF CLASS A COMMON FOR CLASS B
COMMON."
In addition, Roundy's may offer shares of Class B
Common to its Directors and certain key employees, and to
Trustees of the Roundy's, Inc. Voting Trust at a price equal
to the Book Value as of the close of the prior fiscal year,
or, in the case of key employees, as bonus shares at the
discretion of the Board of Directors or pursuant to
employees' exercise of stock options.
Offering Price
The offering price of each share of Class A Common and
Class B Common is equal to the Book Value as of the close of
the previous fiscal year, adjusted for subsequent stock
dividends and stock splits. Shares are not sold during any
year until the Book Value at the end of the immediately
preceding fiscal year has been determined.
The same value will also be assigned to each share of
Class B Common issued as a portion of a patronage dividend.
That is, shares, if any, distributed in 1998 (for example)
as patronage dividends accrued with respect to purchases
from Roundy's during 1997 will be valued at the Book Value
of outstanding shares determined as of the end of the
Roundy's 1997 fiscal year.
The Book Value of outstanding Roundy's Stock (both
Class A Common and Class B Common) at the end of the 1996
fiscal year was $94.30 per share. Roundy's By-Laws prohibit
the payment of any patronage dividend in any year unless
sufficient earnings have been retained to increase the Book
Value of the outstanding Roundy's Stock by 10% during that
year. See "THE COMPANY."
Buying Deposits; Application of Deposited Funds
Each stockholder-customer of Roundy's is required to
maintain a buying deposit for each Active Customer it
operates in an amount equal to the greater of $20,000 or the
estimated amount of purchases by the Active Customer from
Roundy's over a two week period (subject to Roundy's
reserved right to increase the amount of the deposit
required of any Active Customer). This buying deposit
requirement may be satisfied by either a cash deposit in the
specified amount (bearing no interest), or the collateral
pledge of Class A Common and/or Class B Common. In either
case, a stockholder-customer may make its entire buying
deposit by a payment in cash at the outset of its customer
relationship, or it may fulfill part or all of its buying
deposit requirement by means of weekly or monthly payments,
in accordance with an amortization schedule forming a part of
the Buying Deposit Agreement between such stockholder-
customer and Roundy's (the form of Buying Deposit Agreement
is attached hereto as Exhibit B). If a stockholder-customer
elects to fulfill its buying deposit requirements through
periodic installment payments, such stockholder-customer may
apply amounts so deposited toward the subscription price of
shares (in accordance with the limitations described above)
at the time such shares are subscribed for. Neither the
execution of a Buying Deposit Agreement, nor the deposit of
funds by a stockholder-customer pursuant to such Buying Deposit
Agreement, will constitute a subscription agreement or an
agreement of any kind on the part of the stockholder-
customer to purchase, or on the part of Roundy's to sell,
any shares of Roundy's Stock. See "THE COMPANY--Stockholder-
Customers" and Exhibit B attached hereto. Buying deposits
satisfied by deposit of cash are reflected on the Company's
balance sheet as accounts payable.
Stockholder-customers who have already satisfied their
buying deposit requirements may nevertheless elect to
subscribe for and purchase shares subject to the limitations
described above under "Methods of Acquiring Shares of Class
B Common."
Issuance of Class B Common As Patronage Dividends
If shares of Class B Common are issued as patronage
dividends, such shares, when issued, will be fully paid and
non-assessable at the time of issuance, except as otherwise
provided by Wisconsin law (see "DESCRIPTION OF STOCK").
Further, such shares shall be subject to Roundy's lien
against all outstanding shares to secure the payment of the
stockholder-customer's obligations to the Company. See "THE
COMPANY--Stockholder-Customers." Finally, such shares shall
be applied to satisfy (in whole or in part) the buying
deposit deficit of stockholder-customers with a buying
deposit deficit. If such stockholder-customer has elected
to pay its buying deposit in periodic installments, such
shares shall be applied to such installments in the inverse
order of their due dates.
USE OF PROCEEDS
The net proceeds to be received from the sale of the
Class A Common and Class B Common offered hereby will be
added to the working capital of the Company and used for
general working capital purposes, including the purchase of
merchandise to be resold by Roundy's and the maintenance of
adequate inventories of such merchandise, and for capital
expenditures as required. The Company's principal source of
working capital has been from borrowings, rather than from
the proceeds of the sale of equity securities, and it is
expected that this will continue to be true in the future.
EXCHANGE OF CLASS A COMMON FOR CLASS B COMMON
Stockholder-customers of Roundy's, upon termination of
Active Customer status, are required to surrender their
shares of Class A Common in exchange for Class B Common, on
a share for share basis, in accordance with a provision of
Roundy's By-Laws. Roundy's has imposed this requirement to
comply with the Internal Revenue Code and the regulations
thereunder governing federal income taxation of corporations
operating on a cooperative basis. See "THE COMPANY-
Operation as a Cooperative." Under Section 1036 of the
Internal Revenue Code, as amended, no gain or loss is
recognized for federal income tax purposes by a stockholder
who exchanges common stock of a corporation for other common
stock of the same corporation. See "REPURCHASE OF SHARES."
REPURCHASE OF SHARES
The following description of the Stock Redemption
Policy is necessarily selective and is qualified in its
entirety by the full text of the Stock Redemption Policy
which is attached as Exhibit D.
Roundy's Articles of Incorporation provide that the
Board of Directors may cause Roundy's to repurchase or
redeem shares of Roundy's Stock on such terms as the Board
deems appropriate (without consent of the stockholders)
subject to applicable Wisconsin law. The Board of Directors
has adopted the Stock Redemption Policy setting forth
conditions under which Roundy's will repurchase or redeem
its Common Stock (See Exhibit D). Absent the Stock
Redemption Policy, Roundy's would have no obligation
(whether under its Articles of Incorporation, By-Laws or
otherwise) to repurchase any Roundy's Stock. Considering
the restrictions on ownership and resale of Roundy's Stock
(See "DESCRIPTION OF STOCK - Restrictions on Transfer"), a
stockholder might have no means to liquidate an investment
in Roundy's Stock if no redemption policy were to exist
requiring Roundy's to repurchase such shares.
The Stock Redemption Policy provides that Roundy's will
repurchase shares of Roundy's Stock following a request by
the stockholder or his or her legal representative made
during one of three open "window periods" (the last two
weeks of May, August and November of each year) after the
occurrence of a "customer-shareholder termination" or an
"employee-shareholder termination" as defined in the Stock
Redemption Policy. A "customer-shareholder termination"
occurs whenever a retail food store principally supplied by
Roundy's (an "Active Customer") which is owned by a
stockholder either ceases to be an Active Customer or ceases
to be owned or operated by such stockholder. An "employee-
shareholder termination" occurs when a stockholder's
employment relationship with the Company is terminated for
any reason. Under the Stock Redemption Policy, Roundy's is
not required to repurchase Roundy's Stock held by a
stockholder during the period he or she is an Active
Customer or is employed by the Company.
The Stock Redemption Policy requires Roundy's to
acknowledge promptly in writing receipt of a repurchase
request. Once a repurchase request is so acknowledged by
Roundy's, the request becomes irrevocable except with the
prior written consent of the Board of Directors.
The obligation to repurchase stock under the Stock
Redemption Policy arises, as to the number of shares
covered by a repurchase request, in annual 20% increments
during the five year period beginning on the repurchase
request date. On each of the first through the fifth
anniversary dates of the repurchase request date (a
"repurchase target date"), Roundy's is obligated to purchase
20% of the aggregate number of shares of Roundy's Stock for
which a proper repurchase request has been received.
However, if a "customer-shareholder termination" or an
"employee-shareholder termination" occurs as a result of the
death of the stockholder, the estate of such stockholder may
elect (by written notice to Roundy's within 180 days after
such death) to have not more than the first $50,000 in value
of stock repurchased on an accelerated basis within 180 days
after Roundy's receipt of such election notice. Each share
shall continue to be outstanding for all purposes until
actually repurchased.
The repurchase price for the shares under the Stock
Redemption Policy shall be the Book Value as of the end of
the fiscal year preceding the actual date of repurchase, as
adjusted for subsequent stock splits and stock dividends.
Because the repurchase price will fluctuate based on changes
in Book Value from year to year, the repurchase price
payable for any 20% increment to be repurchased at a later
repurchase target date may be greater or less than that
payable for a 20% increment repurchased at an earlier date
pursuant to the same repurchase request. There is no
assurance that Book Value will increase from one year to the
next and it may decline.
Under the Stock Redemption Policy, based upon pending
repurchase requests received by Roundy's on or prior to the
end of its preceding fiscal year (but without taking into
account any requests for accelerated repurchase, if any,
which may have been received from an estate of a deceased
shareholder), 23,409 shares of Class B Common are expected
to be repurchased in 1997 at the Book Value per share as of
December 28, 1996 of $94.30, for a total repurchase
obligation of $2,207,469. In addition, based upon such pend
ing requests, Roundy's presently expects to repurchase
17,130 shares in 1998, 12,956 shares in 1999, 11,072 shares
in 2000, and 1,362 shares in 2001. The repurchase price in
each year after 1997 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 1997 may change based upon receipt of additional
repurchase requests after December 28, 1996 or if Roundy's
should exercise its discretion to effect one or more "Non-
Policy Redemptions," or otherwise agree to repurchase shares
other than on the terms prescribed by the Stock Redemption
Policy, as discussed below.
Roundy's obligation to repurchase shares under the
Stock Redemption Policy is subject to any limitations on
repurchases that may be contained in present or future
lending or other agreements of the Company (the "Contract
Limits"). These generally consist of covenants and
restrictions of a type frequently encountered in similar
transactions, such as stockholders' equity to capital
ratios, debt to capital ratios, liability to net worth
ratios and maintenance of certain amounts of working capital
and stockholders' equity. There is no assurance that these
Contract Limits will not be modified. In the event the
Contract Limits preclude Roundy's during a given period of
time from repurchasing shares which are the subject of a
repurchase request, or if required repurchases are delayed
for any other reason (in either case, a "Suspension"),
repurchases shall be resumed promptly thereafter in the
order of the redemption target dates which occurred during
the period of the Suspension regardless of the dates the
repurchase requests were received and such suspended
repurchases shall be made under the Stock Redemption
Policy prior to redemptions becoming due on any
subsequent redemption target dates. Notwithstanding
the foregoing provisions, stock having a repurchase price
of not in excess of $50,000 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.
CAPITALIZATION
The following table sets forth the consolidated
capitalization of the Company as of December 28, 1996:
To Be Out-
standing If
All Stock
Offered Here-
Outstanding by is Sold(1)
----------- -------------
SHORT-TERM INDEBTEDNESS:
Current maturities of
Long-term debt................ $10,225,800 $10,225,800
----------- -----------
Total short-term debt.... $10,225,800 $10,225,800
=========== ===========
LONG-TERM INDEBTEDNESS:
Senior unsecured notes payable:
9.26%, due 1998 to 2001.....$10,000,000 $10,000,000
7.57% to 8.26%, due
1998 to 2008................ 19,700,000 19,700,000
6.94%, due 1998 to 2003..... 38,571,400 38,571,400
7.86%, due 2000 to 2006..... 25,000,000 25,000,000
Other long-term debt........... 343,200 343,200
----------- -----------
Total long-term debt $93,614,600 $93,614,600
=========== ===========
Redeemable Common Stock (3) $ 6,217,100 $ 6,217,100
=========== ===========
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A), $1.25 par
value, 60,000 shares authorized,
13,000 issued and outstanding,
15,700 as adjusted............. 16,300 19,600
Non-Voting (Class B), $1.25 par
value, 2,400,000 shares
authorized, 1,060,180 issued,
1,255,506 as adjusted.......... 1,325,200 1,569,400
----------- ------------
Total Common Stock............. 1,341,500 1,589,000
Amount related to recording
minimum pension liability.... (232,800) (232,800)
Patronage dividends payable in
common stock (2)............. 3,779,000 3,779,000
Additional paid-in capital..... 24,920,600 43,346,900
Reinvested earnings............ 75,051,100 75,051,100
------------ ------------
104,859,400 123,533,200
Less treasury stock, at cost... 1,131,200 1,131,200
------------ ------------
$103,728,200 $122,402,000
============ ============
(1) The column "To Be Outstanding" reflects the sale and issuance of
Roundy's shares of Class A Common and Class B Common hereunder,
although this offering is not underwritten and there is no
assurance that any of such shares offered will be sold.
(2) Over the past several years, Roundy's has issued shares of
Roundy's Class B Common as the major portion of its patronage
dividend payments. (See "THE COMPANY.") It is expected that
shares of Roundy's Class B Common will be issued in this manner
in the future.
(3) As of December 28, 1996, 65,929 shares were subject to redemption.
SELECTED FINANCIAL INFORMATION
The selected financial information for the five-year
period ended December 28, 1996 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)
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Net sales and
service fees... $2,579,010 $2,488,196 $2,461,510 $2,480,254 $2,491,293
Earnings before
patronage
dividends
and income
taxes......... 23,466 20,251 11,055 20,053 16,528
Patronage
dividends..... 5,568 5,129 0 5,301 5,135
Earnings before
income taxes... 17,898 15,122 11,055 14,752 11,393
Net earnings.... 10,267 9,022 6,554 8,028 7,353
Total assets.... 434,641 407,337 404,652 380,092 390,148
Long-term debt.. 93,615 78,850 88,227 113,045 135,420
Stockholders'
equity(1)...... 109,945 100,033 90,419 86,066 78,573
Book Value
per share...... 94.30 85.15 77.40 71.65 65.10
Ratio of current
assets to
current
liabilities.... 1.42:1 1.43:1 1.43:1 1.64:1 1.70:1
Ratio of long-
term debt to
stockholders'
equity......... 85:1 .79:1 .98:1 1.31:1 1.72:1
(1) Includes redeemable common stock. Also includes patronage
dividends payable in Class B Common of $3,779,000,
$3,405,000, $3,263,000 and $3,210,000 for 1996, 1995, 1993
and 1992, respectively. There were no patronage dividends
for 1994 because the Company did not meet the requirement
to increase the Book Value of its Common Stock by 10%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES. The long-term viability of
a Company like Roundy's is predicated on maintaining a sound
financial foundation. It is a challenge to maintain a
strong financial position when demands for capital, to
support our growth, continue to increase.
Fiscal 1996 was a year in which Roundy's experienced
many challenges. Capital expenditures exceeded $39 million,
a grocery retail business costing approximately $14 million
was acquired and the Company consolidated two Ohio divisions
into one expanded warehouse complex in Lima, Ohio.
The Company made several strategic improvements
designed at enhancing divisional operational efficiencies
both in the short and long-term. The most comprehensive
improvement, as noted above, was the consolidation of two
Ohio Divisions. This consolidation will create long-term
savings which will be achieved through reduced capital,
lower operating costs, increased volume with less
administrative overhead and lower inventory requirements.
Essential to the success of the consolidation was the
construction of a new frozen food facility which eliminated
the need for outside facilities and allowed for expanded
product variety necessary to satisfy retailer and market
demands. Based on the results to date, this new frozen food
warehouse is expected to be a significant factor in the
division's growth and a contributor to its financial
strength.
The Company completed a private placement of $25
million in 7.86% Senior Unsecured Notes during the second
quarter of 1996. A large portion of these funds were used
to finance the acquisition of the Westville Division
warehouse which had been leased. Ownership of this facility
was an important part of the strategic plan for the Company.
The remainder of this new debt was utilized to acquire the
five store grocery retailer.
Even with a 62% increase in capital expenditures
compared to 1995, the average daily borrowing of the Company
only increased $13 million compared to 1995. Further, the
Company continued to maintain its long-term debt to equity
ratio below the 1.00:1 level at .85:1. This was slightly
greater than the .79:1 ratio achieved in 1995, but better
than anticipated in view of the strategic initiatives
undertaken during the year. At December 28, 1996, the
Company had $60 million available under its revolving credit
agreements which management believes is adequate to finance
its operations.
The strong long-term debt to equity ratio was achieved
with the significant net cash flows provided by operations.
In fiscal 1996, these cash flows were $39.3 million versus
$25.3 million in 1995 or a $14.0 million increase. A major
factor influencing this growth was a $10.3 million decrease
in inventories which was achieved while enjoying a $90.8
million increase in net sales. Equity in inventory in 1996
also reflected a positive trend declining 3.2% to 35.8% from
37.0% in 1995. The reasons for Roundy's ability to increase
sales, yet decrease inventory, include (1) the Ohio
consolidation, (2) the implementation of a standard,
automated buying/inventory management system in all
divisions, (3) expanded utilization of ECR and EDI
applications in all divisions, and (4) continued management
focus on improved inventory/category management approaches
at all levels.
A second significant factor in the strong cash flow
improvement was the decrease in notes receivable in 1996 of
$3.9 million with a 3.6% sales increase compared to a $6.3
million increase in 1995. The reduction in notes receivable
was accomplished with an increased focus on customer
liquidity and a concentrated credit program. This credit
program was developed and implemented in all divisions to
further standardize credit terms and reduce the Company's
credit exposure with weaker customers. Corresponding to the
decreases in inventory, accounts payable decreased $7.2
million in 1996 compared to a $0.5 million decrease in 1995.
It is anticipated that there will be further reductions in
accounts payable with the continued growth of EDI to
transmit orders and receive invoices.
A critical component of the Company's strategic plan is
to maintain a strong balance sheet while strengthening the
business. The capital structure for fiscal 1996 and 1995 is
summarized in the table below:
_______________________________________________________________________
Capital Structure (in millions) 1996 1995
________________________________________________________________________
Long-term debt $ 93.6 46.0% $ 78.9 44.1%
Stockholders' equity 109.9 54.0% 100.0 55.9
________________________________________________________________________
Total capital $203.5 100.0% $178.9 100.0%
________________________________________________________________________
Roundy's growth in total capital was needed to finance
the aforementioned acquisition and strategic initiatives
completed during 1996. These strategic moves made during
1996 will better enable the Company to continue the positive
trends into 1997, including enhanced performance in the
consolidated Ohio Division and from the retail stores which
were acquired during the year.
The Company continued its plan of reinvesting resources
in its facilities. In 1996, capital expenditures were the
largest in over five years at $39.3 million versus $24.2
million for 1995. The largest expenditures include the
purchase of the Westville Division complex for $18.9 and a
state of the art freezer in Lima, Ohio for $5.4 million. In
addition, $5.4 million was expended to acquire and upgrade
retail facilities Company-wide. The fourth area of
significance was in the Company's transportation fleet where
$2.7 million was expended. These fleet expenditures were
made in addition to redeploying tractors and trailers made
available as the result of closing the Columbus, Ohio
facility. Maintaining a low freight cost is a critical
element in providing competitive pricing to our customers.
Therefore, one strategic goal of the Company is to make
available, to all operating divisions, newer, lower
maintenance and more reliable transportation equipment.
A key ratio that illustrates the strength of the
Company is its current ratio. It is important to keep this
ratio at a prudent level by minimizing the investment in
assets, such as receivables and inventory. With the
continued implementation of modern purchasing and warehouse
systems, as well as accounts receivable reporting systems,
the Company has been able to minimize its investments in
these types of assets, yet maintain a prudent current ratio.
In fiscal 1996, this ratio was 1.42:1 versus 1.43:1 in 1995.
Total working capital was also relatively flat at $90.5
million in 1996 compared to $90.7 million in 1995.
Maintaining this level while realizing a $90.8 million
growth in net sales in 1996 versus 1995, was a positive
achievement requiring a Company-wide effort.
Senior management realizes the importance of quality
systems to manage and grow the Company in an industry
undergoing major technological change. To maximize the
benefits of funds expended in this area, a program was
established in 1996 to standardize all systems in all
divisions. This standardization will enable Company-wide
communication and uniform evaluation of the buying,
warehousing and financial functions. Additional benefits of
standard systems include reduced programming and maintenance
costs. This will also enable the Company to have more
timely access to information regarding inventory costs. The
resulting lower inventory levels and improved operations
will provide cost savings and benefits which can then be
passed to customers and to stockholders.
Roundy's 1996 book value per share increased 10.75%
over 1995 to $94.30 per share. Patronage dividends were
approximately $5.6 million which represented an 8.6%
increase over 1995 which was a record for the Company.
Stockholders' equity, including redeemable common stock,
increased 9.9% compared to 1995.
RESULTS OF OPERATIONS. Net sales and service fees increased
$90.8 million over 1995 and $117.5 million over 1994. This
represents a 3.6% increase over 1995 sales and a 4.8%
increase over 1994. The five store retail grocery business
acquired in June accounted for 35.9% of the increase over
1995 and 27.6% over 1994. Other factors include (1)
expanded usage of the Company's target marketing/frequent
shopper programs relative to 1995 and 1994, (2) growth in
retail sales, and (3) a 3.8% growth in our "non-foods"
wholesale sales compared to 1995 and a 9.2% improvement over
1994. The Company continues to experience positive growth
trends in non-foods which have been stimulated by expanded
product lines and enhanced retailer programs.
Gross profits improved .36% over 1995 and .15% over
1994. The modest improvements over both 1995 and 1994 are
attributable to the Company's growth in retail stores.
Gross profits at the wholesale level continue to decline,
.04% from 1995 and .22% from 1994. The gradual erosion of
gross profits at the wholesale level is the result of
several factors including (1) manufacturers changing
programs and reducing buy-in opportunities, (2) the increase
in passing of deal monies directly to the retailers and
diminishing the wholesaler's role in the funding process,
and (3) the continued competitive pressures to make the best
price always available to the independent retailer. As in
the past, Roundy's continues to work with both the
manufacturers and the retailers to maximize cost reductions
and offer "everyday low prices" to our retailers and their
customers.
Operating and administrative expenses increased .27%
over 1995, but were .23% below 1994 levels, as a percent to
net sales. The fluctuation in operating and administrative
expenses as a percent to net sales can be attributed to the
following: (1) a decline in closed store and bad debt
expenses of $0.5 million compared to 1995 and $11.2 million
compared to 1994, (2) the incurrence of $2.1 million in
costs associated with the consolidation of the Ohio
warehouses in 1996, (3) an increase in corporate retail
stores over the prior years which maintain a significantly
higher wage expense, as a percent to net sales, and (4) an
increase of .08% in depreciation expense, as a percent of
net sales, in 1996 compared to 1995 and .11% compared to
1994. These changes in operating costs were the result of
strategic plan initiatives which had been implemented in
1996. The continuing challenge is to maximize productivity
opportunities in all divisions while keeping the related
implementation costs at reasonable levels.
Interest expense was $0.6 million greater than 1995,
but was $1.0 million below 1994. The increase over 1995 in
dollars is attributable to the increased debt which was
needed in 1996 to finance the purchase of the Westville
warehouse and the acquisition of the five store grocery
retail business. Even with the increase in debt necessary
to finance these initiatives, interest expense was only .33%
of net sales in 1996 compared to .32% in 1995 and .39% in
1994. The ability of the Company to borrow at favorable
rates continues to facilitate our growth as well as provide
continued balance sheet strength.
The effective income tax rates for 1996, 1995 and 1994
were 42.6%, 40.3% and 40.7%, respectively. The slight
increase in the 1996 effective tax rate compared to prior
years was the result of an increase in non-deductible
goodwill which increased with the five store retail grocery
business acquisition.
The positive trend in earnings continued in 1996 with
net earnings achieving .40% of net sales and fees compared
to .36% in 1995 and .27% in 1994. The 1996 net earnings of
$10.3 million is a Company record. The percent of these net
earnings to net sales has been the highest percentage in 14
years and was achieved on a sales base which grew by $90.8
million compared to 1995 and $117.5 million compared to
1994. Further, the Company declared record patronage
dividends to be paid to active stockholders. As a result of
record sales in 1996, coupled with a reduction in
administrative staff and standardization of the buying
system in all divisions, Roundy's was able to achieve its
strategic goals for 1996 and posture itself for continued
growth in 1997.
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 13 retail warehouse food stores under the
name "Pick 'n Save" or "Park & Save," three limited
assortment food stores under the name "Mor For Less" and 11
conventional food stores under the name "Cardinal Foods,"
"Village Market," "Park & Shop," "Price Less" 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 890 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 is owned by the owners ("stockholder-customers") of
130 retail grocery stores serviced by Roundy's. These
stockholder-customers, who own approximately 70% 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 28, 1996 and December 30, 1995 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 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 760 retail stores. They
do not receive patronage dividends. In addition,
approximately 30% of the outstanding combined Class A Common
and Class B Common 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 1996.
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
$175,459,000, $166,045,000 and $153,699,000 of the Company's
sales during fiscal years ended December 28, 1996, December
30, 1995 and December 31, 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% of the Company's consolidated net sales
and service fees for fiscal 1996, 1995 and 1994. At
December 28, 1996, Roundy's had 70 stockholder-customers
actively engaged in the retail grocery business, operating a
total of 130 retail grocery stores. Roundy's cooperative
wholesale food business is focused primarily in Wisconsin,
where all but 6 of these 130 retail grocery stores are
located (6 are in Illinois). At December 28, 1996 the
Company (including its subsidiaries) had 760 independent
retail food store customers. Sales by the Company to the
independent retail food stores accounted for 52%, 54% and
54% of the Company's consolidated net sales and service fees
for fiscal 1996, 1995 and 1994, 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 130 retail grocery stores operated by its
stockholder-customers, 760 retail stores operated by non-
stockholders and 27 Company-owned and operated retail stores
during fiscal 1996. Of the Company's consolidated net sales
and service fees for this period, $582,278,000 or 22.6% were
attributable to five customers, with one customer accounting
for $242,679,000 or 9.4% of such sales. Approximately 80%
or 733 retail stores purchased less than $3,000,000 each
from the Company in fiscal 1996. 116 customers owned more
than one retail food store, with one customer owning 14
retail food stores.
The Company generally distributes its various product
lines by a fleet of 280 tractor cabs and 670 trailers and
some products are shipped direct from manufacturers to
customer locations. Most customers order for their stores
on a weekly basis and receive deliveries from one to five
days a week. Orders are generally transmitted directly to
a warehouse computer center for prompt assembly and dispatch
of shipments. The Company has retail counselors and
merchandising specialists who serve its customers in a variety
of ways, including the analysis of and recommendation on store
facilities and equipment; development of programs and
objectives for establishing efficient methods and procedures
for receipt, handling, processing, checkout and other
operations; informing customers on latest industry trends;
assisting and dealing with training needs of customers; and,
if the need arises, acting as liaison or problem solver
between the Company and the customers. The retail counselors
and specialists are assigned a specific geographic area and
periodically visit each customer within their assigned area.
The Company renders statements to its customers on a
weekly basis to coincide with regular delivery schedules.
Roundy's accounts of single store owners are considered
delinquent if not paid on the statement date. Accounts of
multiple store owners are considered delinquent if not paid
within three days of the statement date. Accounts of
Roundy's subsidiaries are considered delinquent if not paid
within seven days of the statement date. The majority of
accounts are collected via the Automated Clearing House
("ACH") system. Delinquent accounts are charged interest at
the rate of prime plus 5%, computed on a daily basis.
During each of the past three fiscal years, the Company's
bad debt expense has been less than .38% of sales. In 1996,
1995 and 1994, the Company's bad debt expense was
$5,302,600, $5,871,500 and $9,166,600, 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" or "Park & Save"
which generally offer, at discount prices, complete food and
general merchandise lines to the customer, emphasizing
higher demand items, with stores ranging from 33,000 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 12,800 to 24,000 square feet per
store. Conventional retail stores operated under the name
"Cardinal Foods," "Village Market," "Park & Shop," "Price
Less" or "Buy Low Foods" generally emphasize full service to
the customer at competitive prices. These stores range from
9,000 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 1996 1995 1994
- -------------------------------- ---- ---- ----
High Value-Limited Assort-
ment and High Volume-Limited
Service Stores (Warehouse
food stores)..................... 16 15 11
Conventional Retail Stores....... 11 7 4
Sales of Company-operated stores during the three most
recent fiscal years were $275,761,000, $226,513,000 and
$231,364,000 for fiscal 1996, 1995 and 1994, respectively.
The additional volume of wholesale sales generated by the
retail stores owned and operated by the Company helps to
reduce the overhead of the business and increases the
Company's return to its stockholders.
Employees
At December 28, 1996, the Company had employed full-
time 1,144 executive, administrative and clerical employees,
1,324 warehouse and processing employees and drivers and 813
retail employees and had employed 2,200 part-time employees.
Substantially all of the Company's warehouse employees,
drivers and retail employees are represented by unions, with
contracts expiring in 1997 through 2001. The Company
considers its employee relations to be normal. There have
been no 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 50% 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 1996.
In competing for customers, emphasis is placed on high
quality and a wide assortment of product, low service fees
and reliability of scheduled deliveries. The Company
believes that the range and quality of other business
services provided to retail store customers by the
wholesaler are increasingly important factors, and that
success in the wholesale food industry is dependent upon the
success of the Company's customers who are also engaged in
an intensely competitive, low profit margin industry.
Stockholder-Customers
Substantially all of Roundy's (but not its
subsidiaries) customers are also stockholders of Roundy's.
Roundy's does not require that its stockholders buy
merchandise exclusively from Roundy's or that they purchase
a minimum amount of merchandise in order to remain
stockholders; however, for a stockholder-customer to remain
a holder of Class A Common, Roundy's must be such
stockholder-customer's principal source of supply. See
"EXCHANGE OF CLASS A COMMON FOR CLASS B COMMON." In order
to continue to be supplied by Roundy's, stockholders must
meet certain minimum order quantities.
Generally, Roundy's will stop selling to a shareholder
only when there has been nonpayment for merchandise
delivered or indebtedness payable to Roundy's or the
stockholder defaults in the payment of indebtedness that
Roundy's has guaranteed. In the event of such a
termination, Roundy's will repurchase such person's Common
Stock subject to the limitations described under "REPURCHASE
OF SHARES."
Each customer of Roundy's is required to maintain a
buying deposit for each Active Customer it operates in an
amount equal to the greater of $20,000 or the estimated
amount of purchases by the Active Customer from Roundy's
over a two week period (subject to Roundy's reserved right
to increase the amount of the deposit required of any
stockholder-customer). This deposit requirement may be
satisfied by either a cash deposit in the specified amount
(bearing no interest), or the collateral pledge of Class A
Common and/or Class B Common. In either case, a stockholder-
customer may make its entire deposit or payment in cash at
the outset of its customer relationship, or it may fulfill
part or all of its buying deposit requirement by means of
weekly or monthly payments, in accordance with an
amortization schedule forming a part of the Buying Deposit
Agreement between such stockholder-customer and Roundy's.
See "TERMS OF OFFERING--Buying Deposits; Application Of
Deposited Funds," and Exhibit B attached hereto.
In addition to the buying deposit described above,
Roundy's By-Laws provide that Roundy's has a lien against
all outstanding Class A Common and Class B Common as
security for the payment, from time to time and as often as
the same may become due and payable, of any and all
obligations of the holder to Roundy's and no shares of stock
held by a stockholder-customer will be transferred on the
books of Roundy's until all obligations of the stockholder-
customer to Roundy's have been paid in full. To perfect its
lien, Roundy's retains physical possession of the stock
certificate and provides the stockholder with a photocopy
thereof. If, at the time of a repurchase of stock from a
stockholder-customer, that person has an unpaid obligation
to Roundy's, or to any of its subsidiaries, the amount of
that obligation will be deducted from the proceeds payable
upon the repurchase of that stock. For a description of
other restrictions on transfer of stock contained in the
Company's By-Laws, see "DESCRIPTION OF STOCK--Restrictions
on Transfer."
Payment of Patronage Dividends
Roundy's is obligated by Article V of its By-Laws, as
amended, to pay a patronage dividend to its stockholder-
customers out of and based upon net earnings from business
done by Roundy's with such stockholder-customers in any
fiscal year in an amount which would reduce the net earnings
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 28, 1996 was $94.30 per share. No patronage
dividends for the year ending January 3, 1998, may be paid
until $9.43 (10% of $94.30) per share is added to such Book
Value. Based upon the number of shares outstanding at
December 28, 1996, earnings in the aggregate amount of
$10,616,520 must be retained before patronage dividends may
be paid. Any increase in Book Value over $9.43 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
- ------ ---------------- ------------------------
1996 10.7% 10%
1995 10.0% 10%
1994 8.0% 10%
There can be no assurance that patronage dividends will
be paid in the future, or, if paid, the amount or form of
payment thereof. Roundy's is under no obligation to pay
patronage dividends except to the extent provided by Article
V of its By-Laws, and these By-Law provisions are subject to
modification or repeal at any time by the Board of
Directors. A copy of Article V of the By-Laws, as amended,
is attached hereto as Exhibit C.
Patronage dividends, when paid, are payable in the
fiscal year following the fiscal year in which accrued. At
least 20% of the amount of patronage dividend must be paid
in cash, but a greater percentage may be paid in cash
depending on the cash needs of the Company at the time and
the necessity of compliance with the terms of the Company's
credit agreements.
Patronage dividends, if any, are determined on the
basis of qualifying sales by Roundy's to its stockholder-
customers. The amount distributed to any customer-
stockholder is therefore based on that customer's sales
volume and not its stock holdings. While stockholder-
customers effecting larger purchases from Roundy's may have
a greater stock equity interest in Roundy's, the voting
power of such customers will not increase in proportion
because each stockholder-customer is permitted to hold only
100 shares of Class A Common for each retail store it
operates, and the shares of Class B Common distributed as
patronage dividends are non-voting shares. (See
"DESCRIPTION OF STOCK" and "VOTING TRUST".)
Sections 1381 through 1388 of the Internal Revenue Code
provide that if 20% or more of the total patronage dividend
is paid in cash and the balance in "qualified written
notices of allocation", then Roundy's, when computing its
taxable income, may deduct the total patronage dividend in
determining its taxable income. Stockholder-customers who
receive "qualified written notices of allocation" (Class B
Common issued by Roundy's) are, in turn, required to include
the full stated dollar amount of the Class B Common and the
cash received in their respective tax returns as income when
received. A "written notice of allocation" becomes
"qualified" when the stockholder-customer consents to take
the Class B Common into its income at the stated dollar
amount. This consent occurs when a person signs a written
consent or when such person becomes a stockholder or remains
a stockholder after receiving written notice and a copy of
Roundy's By-Law provision stating that a person becoming or
remaining a stockholder of Roundy's shall be deemed to have
given the requisite consent. Each new stockholder-customer
is required to sign a consent which makes the certificates
representing shares of Class B Common issued to that
stockholder qualified written notices of allocation. The
requirement to pay 20% of the patronage dividend in cash has
had no material adverse effect on Roundy's.
The following table sets forth the total amount of
patronage dividends paid to stockholder-customers with
respect to purchases during the past four years, the
percentage paid in cash and in securities and the number of
shares of Class B Common issued:
Securities
---------------------------------
Year Ended Total Dividend Cash % % No. of Shares
- ---------- -------------- ------- --- -------------
December 28, 1996 $5,568,300 30 70 40,013
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
In each year in which patronage dividends are paid, the
Board of Directors determines the percentage to be paid in
cash and in Class B Common shares. This percentage is
applied to the dollar amounts determined as the patronage
dividend payable to each respective stockholder-customer, to
determine the number of Class B Common shares to be
distributed to such person. The total dollar amounts
payable in cash and in securities in any given year to all
stockholder-customers will not correspond exactly to the
given percentages, principally because of rounding to avoid
the issuance of fractional shares, and because patronage
dividends payable to former stockholder-customers whose
shares have been redeemed during the fiscal year are, in
most cases, paid entirely in cash. Although a minimum of
20% of each recipient's total annual patronage dividend is
required to be paid by Roundy's in cash, the cash portion
may be insufficient, depending upon the income tax bracket
of each recipient, to provide funds for the full payment of
the federal income tax liability incurred by the recipient
with respect to such patronage dividends.
The preceding discussion is only a summary of the most
significant aspects of the taxation of cooperatives under
the Internal Revenue Code, based on the understanding of the
management of Roundy's, and should not be construed as tax
advice to any individual stockholder, each of which should
consult its own tax advisor for individual tax advice.
Roundy's may in its sole discretion pay patronage
dividends to nonstockholder-customers. No such dividends
have been paid in the last four years. Persons who are not
customers of Roundy's are not entitled to receive patronage
dividends. Computation of the amount of patronage dividends
payable to stockholder-customers in any year is made after
the determination of patronage dividends, if any, payable to
nonstockholder-customers.
For further information with respect to patronage
dividends, reference is made to Article V of Roundy's By-
Laws, attached hereto as Exhibit C.
Stockholder-Customer Services
Roundy's provides a variety of services described below
to its stockholder-customers to help them maintain a
competitive position within the retail grocery industry.
Roundy's charges for certain of these services and provides
other services as a general stockholder-customer benefit.
Such services are generally not offered to customers who are
not stockholders, but upon specific request of such a
customer some of these services may be rendered for a fee,
in the discretion of the officers of Roundy's. Overall, the
net income generated by these services is not material.
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 44% 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 56% 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.
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 and
independent retailers to remodel and expand existing retail
locations and to develop new retail outlets. The Company's
loans receivable as of December 28, 1996 are summarized in
the table below(2).
Outstanding
Number Balance Range of Range of
of Original as of Interest Maturity
Loans Amount Dec. 28,1996 Rates Dates
Inventory,
Equipment
Loans 145 $38,263,000 $28,152,500 Variable(1) 1997-2011
________________
(1) Variable rates based on the Company's cost of borrowing.
(2) The Company has guaranteed customer bank loans and
customer leases amounting to $645,700 and $983,500,
respectively at December 28, 1996. 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
1997 to 2018. Aggregate lease rentals received under this
program were $21,628,300, $22,045,500 and $22,329,500 in
1996, 1995 and 1994, respectively.
8. Retail Accounting. Roundy's has a retail accounting
program available for stockholder-customers using its data
processing equipment and expertise. The service includes
general ledger, payroll, personnel reports, sales and income
tax returns, accounts payable and financial reporting.
Stockholder-customers may select any one or more parts of
the program or the complete package. Approximately 68
stores participate in this program. The service charges
depend on the services received by the stockholder-customer.
9. Group Advertising. Roundy's regularly sponsors
institutional brand advertising of Roundy's and Old Time
products for all stores on a continuing basis. This
advertising, which may include TV, radio, newspaper and
anniversary sales is intended to help promote the sales of
the Roundy's private label products. All stockholder-
customers may utilize Roundy's Group Advertising Program.
Each week these retailers receive ad planners with suggested
feature items together with window signs, shelf talkers and
newspaper layouts. The Group Advertising Staff assists the
stores in the improvement of their local advertising program.
10. Bakery Program. Retailers participate in Roundy's
bakery program, taking advantage of centralized buying.
Three programs are offered: rack service stocked by the
bakery representative, with and without returns on unsold
merchandise, and drop shipments without returns. All
programs are delivered directly from the supplier to the
retailer, but are billed through Roundy's.
11. Merchandising. Roundy's merchandising service advises
customers on such matters as in-store promotions, internal
store arrangements and shelf utilization.
12. Insurance. Roundy's has a general insurance agency
that markets commercial property and casualty, personal
lines, all group products, and life insurance. The agency
primarily specializes in programs for the food industry.
13. Real Estate. Roundy's has a real estate department
that provides site surveys, financial projections, business
valuations, lease negotiations, and sales of supermarkets
and residential properties.
14. Retail Training Programs. Roundy's has instituted and
maintained an ongoing training program for its stockholder-
customers. The planned programs include professionally
conducted seminars relating to all departments of the store
and management. The programs are also geared to present the
retailers with up-to-date information on market changes and
new innovations on energy, productivity and scanning. The
program also makes available to the retailer a film library,
home study courses, programmed instructions, manuals and an
audiscan program to train fully all of the retailer's
employees.
15. Miscellaneous Advisory Services. Roundy's has retail
counselors and merchandising specialists, who serve the
stockholder-customers in a variety of ways, including the
analysis of and recommendations on store facilities and
equipment; development of programs and objectives for
establishing efficient methods and procedures for receipt,
handling, processing, checkout and other operations;
informing stockholder-customers on latest industry trends;
assisting in dealing with training needs of stockholder-
customers; and, if the need arises, acting as liaison or
problem-solver between Roundy's and the stockholder-
customer. The retail counselors and specialists are
assigned specific geographic areas and periodically visit
each customer within their assigned areas.
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 (O)
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
Van Wert, Ohio Nonfood products 115,000 (L)
Evansville, Indiana Frozen foods and 94,000 (O)
meat
South Bend, Indiana Frozen foods 84,000 (L)
Muskegon, Michigan All product lines, 215,000 (O)
except produce
O = Owned L = Leased
The Company 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 28, 1996 consisted of 280 tractor
cabs, 670 trailers and 10 straight delivery trucks. In
addition, the Company owns 45 automobiles. Approximately
93% 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. Although, the Company
is involved in various claims and litigation arising in the
normal course of business, in the opinion of management, the
ultimate resolution of these actions will not materially affect
the consolidated financial position, results of operations or
cash flows of the Company.
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 54 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 48 Vice President of Real Estate since 1989
Londell J. Behm 46 Vice President of Advertising since 1987
Ralph D. Beketic 50 Vice President-Wholesale since 1996;
Vice President-Wisconsin Region 1996;
President of Milwaukee Division since
1993; Vice President of Sales- Milwaukee
Division 1991-1993
David C. Busch 48 Vice President of Administration since
1993; Vice President of Human Resources
1990-1993
Edward G. Kitz 43 Vice President, Secretary & Treasurer
since 1995; Vice President & Treasurer
since 1989
Charles H. 54 Vice President of Logistics and Planning
Kosmaler, Jr. since 1993; Vice President of Adminis-
trative Efficiencies 1992-1993
Debra A. Lawson 41 Vice President of Human Resources since
1997; Vice President Administration-
Milwaukee Division 1994-1996; Director of
Consumer Affairs, Training and Development
1991-1993
John E. Paterson 49 Vice President-Distribution since 1997;
Vice President of Operations-Milwaukee
Division 1993-1996; Vice President of
Distribution for Quincy, Florida Division
of Super Value Stores, Inc. 1991-1993
Robert D. Ranus 56 Vice President and Chief Financial Officer
since 1987; Director since 1987 (term
expires 2000)
Michael J. Schmitt 48 Vice President-Sales and Development since
1995; Vice President, Northern Region
1992-1995
Marion H. Sullivan 50 Vice President of Marketing since 1989
Robert E. Bartels 59 Director since 1994 (term expires 2000);
President and Chief Executive Officer of
Martin's Super Markets, Inc., South Bend,
Indiana
Charles R. Bonson 50 Director since 1994 (term expires 2000);
President of Bonson's Foods, Inc., Eagle
River, Wisconsin
Lloyd E. Coppersmith 56 Director since 1995 (term expires 1998);
President of Ron & Lloyd's, Inc., New
London, Wisconsin
Gary N. Gundlach 53 Director since 1990 (term expires 1999);
Owner of Pick 'n Save retail grocery
stores in Columbus, DeForest, McFarland,
Stoughton and Sun Prairie, Wisconsin
George C. Kaiser 64 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. 56 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 47 Director since 1995 (term expires 1998);
General Manager and Treasurer of McAdams,
Inc., Oconomowoc, Wisconsin
Brenton H. Rupple 72 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.
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 28, 1996, 13,000 shares of Class A Common and
1,112,824 shares of Class B Common were outstanding.
Voting Rights
Holders of Class A Common are entitled to one vote for
each share held, on all matters which are submitted to a
vote of stockholders. Stockholders are not entitled to
cumulative voting rights. All of the shares of Class A
Common outstanding as of the date of this Prospectus are
owned of record by the Trustees of the Voting Trust. Shares
deposited in the Voting Trust will be voted in the manner
provided in the Voting Trust Agreement. See "VOTING TRUST."
Except as otherwise required by law, holders of Class B
Common are not entitled to vote on any matter submitted to a
vote of the stockholders. The Wisconsin Statutes provide
that the holders of the outstanding shares of a class of
stock must be entitled to vote as a class upon any proposed
merger, share exchange, sale of all or substantially all
assets of a company or any amendment to the articles of
incorporation which would, in either case, alter the rights,
preferences, or relative status of the shares in any of a
number of specified ways. These are the only circumstances
in which holders of Class B Common are entitled to vote as
stockholders.
Dividend Rights
Holders of Class A Common and Class B Common are
entitled to such dividends as may be declared by the Board
of Directors. However, Roundy's does not expect to pay any
dividends in the foreseeable future other than patronage
dividends as described under "THE COMPANY--Payment of
Patronage Dividends." Stockholders who are not customers of
Roundy's are not entitled to receive patronage dividends.
Liquidation Rights
In the event of the voluntary or involuntary
liquidation of Roundy's, the holders of Class A Common and
Class B Common will be entitled to share ratably in the
assets of Roundy's remaining after payment of all Roundy's
liabilities.
Repurchase of Shares
Subject to certain limitations, Roundy's is obligated
to repurchase Class A Common and Class B Common upon written
request from stockholders who have terminated or
substantially reduced their customer or employee
relationships with Roundy's. Roundy's may, but is not
obligated to, purchase shares held by other stockholders.
See "REPURCHASE OF SHARES."
Restrictions on Transfer
Roundy's Articles of Incorporation provide that no
shares of Class A Common or Class B Common may be
transferred for any purpose (including, but not limited to,
sales, gifts, testate or intestate inheritance or pledge)
unless and until (i) such transfer has received the prior
written consent of Roundy's or (ii) Roundy's has agreed in
writing to repurchase such shares and has failed to satisfy
such obligation.
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.
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
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.
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 Victor C.
Burnstad, Robert S. Gold 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. Burnstad is President and stockholder of Burnstad
Bros., Inc. a stockholder-customer of Roundy's. Mr. Gold is
President and stockholder of B. & H. Gold Corporation, 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.
EXPERTS
The consolidated financial statements of Roundy's, Inc.
and subsidiaries and the related consolidated financial
statement schedules as of December 28, 1996 and December 30,
1995 and for each of the three years in the period ended
December 28, 1996 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.
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 28, 1996 F-3
Consolidated Balance Sheets at December 28, 1996
and December 30, 1995 F-4
Statements of Consolidated Stockholders' Equity
for each of the three years in the period
ended December 28, 1996 F-6
Statements of Consolidated Cash Flows for each of
the three years in the period ended December 28, 1996 F-7
Notes to Financial Statements F-8
F-1
Independent Auditors' Report
To the stockholders and Directors of Roundy's, Inc.:
We have audited the accompanying consolidated balance
sheets of Roundy's, Inc. and its subsidiaries as of December
28, 1996 and December 30, 1995 and the related statements of
consolidated earnings, stockholders' equity and cash flows
for each of the three years in the period ended December 28,
1996. 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 28, 1996 and December
30, 1995, and the results of their operations and their cash
flows for each of the three years in the period ended
December 28, 1996 in conformity with generally accepted
accounting principles.
Milwaukee, Wisconsin
February 21, 1997
F-2
Statements of Consolidated Earnings
For The Years Ended December 28, 1996, December 30, 1995 and December 31, 1994
1996 1995 1994
-------------- ------------- ---------------
Revenues:
Net sales and service fees $2,579,010,200 $2,488,196,200 $2,461,509,600
Other-net 4,494,700 3,966,100 3,892,300
-------------- -------------- --------------
2,583,504,900 2,492,162,300 2,465,401,900
-------------- -------------- --------------
Costs and Expenses:
Cost of sales 2,333,216,600 2,260,039,400 2,230,645,500
Operating and administrative 218,342,700 203,943,400 214,221,900
Interest 8,479,900 7,929,000 9,479,300
-------------- -------------- --------------
2,560,039,200 2,471,911,800 2,454,346,700
-------------- -------------- --------------
Earnings Before Patronage
Dividends 23,465,700 20,250,500 11,055,200
Patronage Dividends 5,568,300 5,128,500
-------------- -------------- -------------
Earnings Before Income Taxes 17,897,400 15,122,000 11,055,200
Provision (Credit) for Income Taxes:
Current-Federal 5,396,400 7,361,200 7,863,700
- State 859,800 1,177,400 2,290,100
-Jobs & other tax credits (141,200) (105,700) (448,700)
-Deferred 1,515,000 (2,333,000) (5,204,000)
-------------- -------------- -------------
7,630,000 6,099,900 4,501,100
-------------- -------------- -------------
Net Earnings $ 10,267,400 $ 9,022,100 $ 6,554,100
============== ============== =============
See notes to consolidated financial statements.
F-3
Consolidated Balance Sheets
As of December 28, 1996 and December 30, 1995
1996 1995
------------- --------------
Assets
Current Assets:
Cash and cash equivalents $ 40,342,300 $ 26,382,000
Notes and accounts receivable,
less allowance for losses,
$6,314,700 and $8,431,300,
respectively 98,593,300 99,727,000
Merchandise inventories 155,562,300 163,204,100
Prepaid expenses 2,741,000 5,060,700
Refundable and future income
tax benefits 7,817,400 8,496,800
------------- -------------
Total current assets 305,056,300 302,870,600
------------- -------------
Other Assets:
Notes receivable, less
allowance for losses,
$5,576,000 and $4,641,000,
respectively 12,386,600 17,249,100
Other real estate 4,439,700 4,659,400
Goodwill and other assets 12,100,600 5,300,600
Deferred income tax benefit 1,922,000 2,706,000
------------- -------------
Total other assets 30,848,900 29,915,100
------------- -------------
Property and Equipment - At Cost:
Land 5,343,900 5,042,700
Buildings 69,084,600 43,021,900
Equipment 101,679,800 94,499,200
Leasehold improvements 13,467,600 12,412,000
------------- -------------
189,575,900 154,975,800
Less accumulated depreciation
and amortization 90,840,100 80,424,900
------------- -------------
Property and equipment - net 98,735,800 74,550,900
------------- -------------
$ 434,641,000 $ 407,336,600
============= =============
See notes to consolidated financial statements.
F-4
Liabilities and Stockholders' Equity
Current Liabilities:
Current maturities of
long-term debt $ 10,225,800 $ 3,776,500
Accounts payable 159,038,100 165,539,300
Accrued expenses 44,358,400 42,231,400
Income taxes 936,100 583,600
------------- -------------
Total current liabilities 214,558,400 212,130,800
Long-Term Debt, Less
Current Maturities 93,614,600 78,850,200
Other Liabilities 16,522,700 16,322,500
------------- -------------
Total liabilities 324,695,700 307,303,500
Commitments and Contingencies (Note 10)
Redeemable Common Stock 6,217,100 8,132,000
------------- -------------
Stockholders' Equity:
Common stock:
Voting (Class A) 16,300 16,700
Non-voting (Class B) 1,325,200 1,282,400
------------- -------------
Total common stock 1,341,500 1,299,100
Amount related to recording
minimum pension liability (232,800) (283,600)
Patronage dividends payable
in common stock 3,779,000 3,405,000
Additional paid-in capital 24,920,600 21,222,100
Reinvested earnings 75,051,100 66,258,500
------------- -------------
104,859,400 91,901,100
Less treasury stock, at cost 1,131,200
------------- -------------
Total stockholders' equity 103,728,200 91,901,100
------------- -------------
$ 434,641,000 $ 407,336,600
============= =============
F-5
<TABLE>
Statements of Consolidated Stockholders' Equity
For The Years Ended December 28, 1996, December 30, 1995 and December 31, 1994
<CAPTION>
Common Stock
------------------------------------ Patronage
Class A Class B Dividends Additional
------------------------------------ Payable in Paid-in Retained
Shares Amount Shares Amount Common Stock Capital Earnings
------------------------------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
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 6,554,100
Common stock issued 700 900 52,138 65,200 (3,263,000) 3,516,200
Common stock purchased (2,200) (2,800) (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 9,022,100
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
Net earnings 10,267,400
Common stock issued 600 800 51,806 64,800 (3,405,000) 4,312,900
Common stock purchased (1,000) (1,200) (10,433) (13,100) (449,200) (980,300)
Redeemable common stock (7,090) (8,900) (165,200) (494,500)
Patronage dividends
payable in common stock 3,779,000
-------------------------------------------------------------------------
Balance, December 28, 1996 13,000 $16,300 1,060,180 $1,325,200 $3,779,000 $24,920,600 $75,051,100
=========================================================================
Treasury Stock, December 28, 1996 13,285 $1,131,200
========= ==========
<FN>
See notes to consolidated financial statements.
</end table>
F-6
Statements of Consolidated Cash Flows
For The Years Ended December 28, 1996, December 30, 1995 and December 31, 1994
1996 1995 1994
------------ ------------ ------------
Cash Flows From Operating Activities: $ 10,267,400 $ 9,022,100 $ 6,554,100
Net earnings
Adjustments to reconcile
net earnings to net cash flows
provided by operating activities:
Depreciation and amortization 16,326,800 13,594,400 12,756,500
Allowance for losses 5,302,600 5,871,500 9,166,600
(Gain) loss on sale of
property and equipment (1,233,500) 451,900 (1,087,700)
Closed facility reserve 620,200 42,300 8,000,000
Patronage dividends payable
in common stock 3,779,000 3,405,000
(Increase) decrease in operating
assets:
Accounts receivable (2,818,400) (6,768,000) (5,012,600)
Merchandise inventories 10,319,700 (6,008,400) (4,026,200)
Prepaid expenses 2,453,500 713,500 1,182,600
Refundable and future income
tax benefits 679,400 (2,805,000) (1,410,000)
Other real estate 219,700 1,924,800 758,800
Goodwill and other assets (413,400) 1,208,700 323,300
Deferred income tax benefit (860,100) 472,000 (3,060,000)
Increase (decrease) in operating
liabilities:
Accounts payable (7,237,800) (485,400) 35,837,100
Accrued expenses 850,400 6,018,200 (1,582,700)
Income taxes 864,300 (3,899,600) 4,072,300
Deferred income taxes (734,000)
Other liabilities 200,200 2,538,200 3,015,300
------------- ------------ -----------
Net cash flows provided by
operating activities 39,320,000 25,296,200 64,753,400
------------- ------------ -----------
Cash Flows From Investing Activities:
Capital expenditures (39,291,800) (24,216,300) (22,316,600)
Proceeds from sale of property
and equipment 5,763,400 5,296,500 1,753,200
Payment for business acquisition
net of cash acquired (13,918,700)
Decrease (increase) in
notes receivable 3,927,500 (6,342,800) 830,400
------------- ------------ -----------
Net cash flows used in investing
activities (43,519,600) (25,262,600) (19,733,000)
------------- ------------ -----------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 25,000,000
Principal payments of long-term debt (10,235,600) (9,376,500) (24,818,000)
Increase (decrease) in current
maturities of long-term debt 6,449,300 (1,902,100) (3,381,700)
Proceeds from sale of common stock 973,500 947,600 319,300
Common stock purchased (4,027,300) (3,589,400) (2,716,800)
------------- ------------ ------------
Net cash flows provided by
(used in) financing activities 18,159,900 (13,920,400) (30,597,200)
------------- ------------ ------------
Net Increase (Decrease) in Cash and
Cash Equivalents 13,960,300 (13,886,800) 14,423,200
Cash And Cash Equivalents,
Beginning Of Year 26,382,000 40,268,800 25,845,600
------------- ------------ ------------
Cash And Cash Equivalents,
End Of Year $ 40,342,300 $ 26,382,000 $ 40,268,800
============= ============= ============
Cash Paid During The Year For:
Interest $ 8,545,900 $ 8,116,000 $ 9,775,300
Income Taxes 6,965,100 12,319,000 5,163,300
Supplemental Noncash Financing
Activities - Patronage
Dividends Payable in
Common Stock 3,779,000 3,405,000
See notes to consolidated financial statements.
F-7
Notes to Consolidated Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Description of business-The Company is primarily engaged in
the wholesale distribution of food products and related non-
food items through retail supermarkets, primarily located in
the Great Lakes Region of the Midwestern United States, 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 28, 1996
included 52 weeks.
Consolidated financial statements-The consolidated financial
statements include the accounts of the Company and its
subsidiaries. Significant intercompany balances and
transactions are eliminated in consolidation. 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 primarily recorded at the lower
of cost, on the first-in, first-out method, or market.
Goodwill-The excess of cost over the fair value of net
assets of businesses acquired (goodwill) is being amortized
on a straight-line basis over 20 years. Accumulated
amortization at December 28, 1996 and December 30, 1995 was
$3,517,800 and $2,989,800, respectively.
Long-lived assets-The Company periodically evaluates the
carrying value of long-lived assets in accordance with
Statement of Financial Accounting Standards ("SFAS") 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 are
amortized over the terms of the respective leases.
Closed facility costs-When a facility is closed the
remaining investment, net of expected salvage value, is
expensed. For properties under lease agreements, the present
value of any remaining future liability under the lease, net
of expected sublease recovery, is also expensed. The amounts
charged to operations for the present value of these
remaining future liabilities were $620,000, $42,300 and
$8,000,000 in 1996, 1995 and 1994, respectively.
Income Taxes-The Company provides income taxes in accordance
with SFAS 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. ACQUISITION
On June 22, 1996, the Company purchased all of the
outstanding stock of a grocery retailer for $13,918,700 in
cash. The acquisition has been accounted for as a purchase
and the results of operations have been included in the
Consolidated Financial Statements since the date of
acquisition. On an unaudited pro-forma basis, the effect of
the acquisition was not significant to the Company's 1996
results of operations.
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 28, 1996 and December
30, 1995 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%.
F-8
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,
equipment, personal assets and pledges of company stock.
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 $10,190,000 and $9,305,500 at December 28,
1996 and December 30, 1995, respectively.
5. LONG-TERM DEBT
Long-term debt, exclusive of current maturities, consists of
the following at the respective year-ends:
1996 1995
------------ -------------
Senior unsecured notes payable:
9.26%, due 1998 to 2001 $ 10,000,000 $ 12,500,000
7.57% to 8.26%, due 1998 to 2008 19,700,000 20,900,000
6.94%, due 1998 to 2003 38,571,400 45,000,000
7.86%, due 2000 to 2006 25,000,000
Other long-term debt 343,200 450,200
------------ -------------
Total $ 93,614,600 $ 78,850,200
============ =============
At December 28, 1996, $60,000,000 was available to the
Company under its revolving credit agreements, all of which
was unused. The loan agreements include, among other
provisions, minimum working capital and net worth
requirements and limit stock repurchases and total debt
outstanding.
Repayment of principal on long-term debt outstanding is as follows:
1997.........................................$10,225,800
1998......................................... 10,156,800
1999......................................... 10,159,700
2000......................................... 24,734,400
2001......................................... 13,738,000
Thereafter................................... 34,825,700
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments, as defined in SFAS
No. 107, "Disclosures About Fair Value of Financial
Instruments," consist primarily of accounts and notes
receivable, accounts payable, notes payable and long-
term debt. The carrying amounts for accounts and notes
receivable, accounts payable and notes payable approximate
their fair values. Based on the borrowing rates currently
available to the Company for long-term debt with similar
terms and maturities, the fair value of long-term debt,
including current maturities, is approximately
$102,750,000 and $81,100,000 as of December 28, 1996 and
December 30, 1995, respectively.
F-9
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 $94.30, $85.15 and $77.40 for 1996, 1995
and 1994, 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. Redeemable common
stock is held by inactive customers and former employees. As
of December 28, 1996 and December 30, 1995, 65,929 and
95,502 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
23,409, 17,130, 12,956, 11,072 and 1,362 in 1997, 1998,
1999, 2000 and 2001, respectively.
In conjunction with the acquisition discussed in Note 2,
13,285 shares of Class B common stock were owned by the
acquired company. The fair market value of the shares as of
the June 22, 1996 acquisition date has been reflected in the
Consolidated Balance Sheet as treasury stock.
Effective November 1991, the Board of Directors adopted the
1991 Stock Incentive Plan (the "Plan") under which up to
75,000 shares of Class B common stock may be issued pursuant
to the exercise of stock options. The Plan also authorizes
the grant of up to 25,000 stock appreciation rights
("SARs"). Options and SARs may be granted to senior
executives and key employees of the Company by the Executive
Compensation Committee of the Board of Directors. No options
or SARs may be granted under the Plan after November 30,
2001.
Option and SAR transactions are as follows:
Options SARs Price
------- ------ -----------
Outstanding, 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
Exercised...................... (1,600) (2,266) 53.10-77.40
Cancelled...................... (500) (834) 77.40
------- ------ ------------
Outstanding, December 28, 1996.... 41,500 16,000 $53.10-77.40
======= ====== ============
Available for grant after
December 28, 1996.............. 9,500 5,184
======= ======
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 28, 1996,
options were exercisable for 34,633 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
1996, 1995 and 1994. As of December 28, 1996, 9,882 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.
The Company has adopted the disclosure-only provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," but
applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for its plans.
Compensation expense was immaterial for 1996 and 1995. If
the Company had elected to recognize compensation cost for
the Plan based on the fair value of the options at the grant
dates, consistent with the method prescribed by SFAS No.
123, the decrease in 1996 and 1995 net earnings would have
been less than $60,000.
F-10
8. EMPLOYEE BENEFIT PLANS
Substantially all non-union employees of the Company and
employees of its subsidiaries are covered by defined benefit
pension plans. Benefits are based on either years of service
and the employee's highest compensation during five of the
most recent ten years of employment or on stated amounts for
each year of service. The Company intends to annually
contribute only the minimum contributions required by
applicable regulations.
The following sets forth the funded status of the plans at
December 28, 1996 and December 30, 1995:
1996 1995
------------------------- --------------------------
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
------------------------- --------------------------
Actuarial present value of:
Vested benefit
obligation...........$25,136,600 $ 5,211,100 $23,977,700 $ 3,473,300
=========== ============ =========== ============
Accumulated benefit
obligation...........$27,197,200 $ 5,347,300 $26,054,300 $ 3,592,200
=========== ============ =========== ============
Projected benefit
obligation...........$32,399,900 $ 5,347,300 $30,750,300 $ 3,592,200
Plan assets (primarily
listed stocks and bonds)
at market value........ 28,647,200 4,630,600 26,928,100 2,465,900
----------- ------------ ----------- ------------
Projected benefit
obligation in excess of
plan assets............ (3,752,700) (716,700) (3,822,200) (1,126,300)
Unrecognized net loss.... 907,600 333,900 1,419,500 478,600
Prior service cost not
yet recognized in net
periodic pension cost.. 240,100 83,800 359,800 63,400
Unrecognized net asset... (776,500) (118,900) (1,069,500)
Adjustment required to
recognize minimum
liability.............. (393,900) (542,000)
----------- ------------- ----------- ------------
Accrued pension cost.....$(3,381,500) $ (811,800)$(3,112,400) $ (1,126,300)
=========== ============= =========== ============
The assumptions used in the accounting were as follows:
1996 1995 1994
----- ----- -----
Discount rate 7.75% 7.75% 8.25%
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%
In accordance with SFAS No. 87, "Employers' Accounting for
Pensions," the Company has recorded a minimum liability of
which $232,800 and $283,600, net of income taxes, is
reflected as a reduction of stockholders' equity in 1996 and
1995, respectively.
Net pension cost for the foregoing defined benefit plans
includes the following components:
1996 1995 1994
----------- ----------- -----------
Service cost-benefits earned
during the year $ 2,155,300 $ 1,652,800 $ 1,756,800
Interest on projected benefit obligation 2,608,900 2,191,100 2,020,600
Actual (return) loss on plan assets (3,361,100) (4,424,500) 1,013,200
Net amortization and deferral 575,600 1,989,200 (3,625,300)
----------- ----------- -----------
Net pension cost $ 1,978,700 $ 1,408,600 $ 1,165,300
=========== =========== ===========
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 $4,296,100,
$3,611,600 and $3,705,300 in 1996, 1995 and 1994,
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 $556,600, $541,500
and $507,500 in 1996, 1995 and 1994, respectively.
F-11
Notes to Consolidated Financial Statements Continued
9. INCOME TAXES
Federal income tax at the statutory rates of 35% in 1996, 1995
and 1994 and income tax expense as reported are reconciled as follows:
1996 1995 1994
---------- ---------- ----------
Federal income tax at statutory rates $6,264,100 $5,292,700 $3,869,300
State income taxes, net of federal
tax benefits 930,700 765,300 720,000
Jobs and other tax credits (141,200) (105,700) (448,700)
Other-net 576,400 147,600 360,500
---------- ---------- ----------
Income tax expense $7,630,000 $6,099,900 $4,501,100
========== ========== ==========
</TABLE>
<TABLE>
The approximate tax effects of temporary differences at
December 28, 1996 and December 30, 1995 are as follows:
<CAPTION>
1996 1995
---------------------------------------------------------------------------
Assets Liabilities Total Assets Liabilities Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allowance for
doubtful accounts $ 1,285,000 $ 1,285,000 $ 1,603,000 $ 1,603,000
Inventories $(1,314,200) (1,314,200) $ (975,200) (975,200)
Employee benefits 4,225,000 4,225,000 4,825,000 4,825,000
Accrued expenses
not currently
deductible 1,926,000 1,926,000 3,044,000 3,044,000
---------------------------------------------------------------------------
Current 7,436,000 (1,314,200) 6,121,800 9,472,000 (975,200) 8,496,800
---------------------------------------------------------------------------
Allowance for
doubtful accounts 2,254,000 2,254,000 1,876,000 1,876,000
Depreciation and
amortization (6,989,000) (6,989,000) (3,739,000) (3,739,000)
Employee benefits 3,971,000 3,971,000 3,485,000 3,485,000
Accrued expenses
not currently
deductible 2,906,000 2,906,000 1,068,000 1,068,000
Other (220,000) (220,000) 16,000 16,000
---------------------------------------------------------------------------
Noncurrent 9,131,000 (7,209,000) 1,922,000 6,445,000 (3,739,000) 2,706,000
---------------------------------------------------------------------------
Total $16,567,000 $(8,523,200) $ 8,043,800 $15,917,000 $(4,714,200) $11,202,800
===========================================================================
</end table>
F-12
10. LEASE OBLIGATIONS AND CONTINGENT LIABILITIES
Rental payments and related subleasing rentals under
operating leases are as follows:
RENTAL PAYMENTS
----------------------
SUBLEASING
MINIMUM CONTINGENT RENTALS
----------- ------------ -------------
1994 $36,268,800 $448,300 $22,329,500
1995 35,264,400 422,900 22,045,500
1996 31,711,700 486,600 21,628,300
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 28, 1996:
OPERATING
LEASES
------------
1997 $ 30,644,000
1998 29,566,500
1999 28,297,000
2000 27,163,700
2001 26,079,700
Thereafter 210,877,200
------------
Total $352,628,100
============
Total minimum rentals to be received in the future under non-
cancelable subleases as of December 28, 1996 are $265,510,700.
The Company has guaranteed customer bank loans and customer
leases amounting to $645,700 and $983,500, respectively, at
December 28, 1996.
The Company is involved in various claims and litigation
arising in the normal course of business. In the opinion of
management, the ultimate resolution of these actions will
not materially affect the consolidated financial position,
results of operations or cash flows of the Company.
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.
F-13
Exhibit A
ROUNDY'S, INC.
Subscription Agreement
The undersigned customer/employee/director of Roundy's,
Inc. ("Roundy's") hereby subscribes for and agrees to
purchase _________ shares of Class A Common Stock and/or
_____________ shares of Class B Common Stock of Roundy's, at
the price per share set forth below, being equal to the Book
Value per share of such Common Stock as of the close of the
most recently ended fiscal year of Roundy's, as determined
by Roundy's audited financial statements and adjusted for
subsequent stock dividends and stock splits. The
undersigned acknowledges receipt of a Prospectus dated
______________, 19__ relating to Roundy's offer of the Class
A or Class B Common Stock subscribed for hereby.
The undersigned represents that the undersigned is
purchasing such securities for the undersigned's own
account, for investment only and not for resale or
distribution. The undersigned further acknowledges and
understands that in no event may the Class A nor Class B
Common Stock be pledged, transferred or hypothecated without
Roundy's prior written consent. The undersigned
acknowledges and agrees to be bound by the provisions of
Section 7.11 of Roundy's By-Laws (as the same may be amended
and in effect from time to time) imposing limitations on the
ownership of Roundy's Class A Common Stock and providing for
the conversion of shares of Class A Common Stock into shares
of Class B Common Stock, upon the occurrence of a
"Customer/Shareholder Termination" as that term is defined
in Roundy's By-Laws.
This paragraph applies only to subscriptions by
customers with a Buying Deposit Deficit: The shares
purchased hereby shall become a part of the undersigned's
Buying Deposit pursuant to the Buying Deposit Agreement
previously entered into by the undersigned for the Store
Location (Customer Number) set forth below. If so indicated
below, the undersigned hereby directs Roundy's to apply the
amount set forth below, from funds previously deposited by
the undersigned with Roundy's, against the subscription
price provided for herein.
Roundy's, by accepting this Subscription Agreement,
agrees to be bound by the Statement of Policy Regarding
Repurchase of Stock set forth as Exhibit D to Roundy's
Prospectus, as such Statement of Policy may be amended from
time to time.
________________________________
Legal Name of Subscriber
Applicable Federal
Identification or
Social Security Number
______________________ By ____________________________
(Name) (Title)
Dated______________, 19____ Customer Number _________
(If applicable)
Mailing Address:
________________________________
City ___________________________
State __________________Zip_____
Price per Share: $___________________
Total Subscription Price: $___________________
Amount to be applied from funds on deposits: $___________________
Cash remitted with this Subscription Agreement: $___________________
Agreement Accepted:
Roundy's, Inc.
By:________________________________ Date:_____________________________
A-1
Exhibit B
ROUNDY'S, INC.
Buying Deposit Agreement
The undersigned customer of Roundy's, Inc. ("Roundy's")
hereby agrees to establish a Buying Deposit with Roundy's in
the total amount set forth below, and to make monthly
installment payments of such Buying Deposit to Roundy's as
set forth below. The amount of the Buying Deposit has been
computed as an amount equal to the estimated amount of
purchases by the undersigned from Roundy's, with respect to
the store location identified below ("Store Location") over
a two week period, with a minimum amount of $20,000. The
total Buying Deposit will be established by periodic
payments to be made by the undersigned to Roundy's in
accordance with the amortization schedule set forth below.
It is understood that Roundy's shall have the right to
increase the amount of the Buying Deposit at any time, in
which event the amortization schedule set forth below shall
be adjusted accordingly.
To fulfill its obligation to establish such Buying
Deposit, the undersigned may from time to time subscribe for
and purchase shares of Roundy's Class A and/or Class B
Common Stock pursuant to Roundy's Policy Regarding Issuance
and Sales of Roundy's Stock (adopted December 7, 1993;
effective January 1, 1994, as amended) (a copy of which the
undersigned acknowledges having received as an exhibit to
the Prospectus dated _______, _____ for Roundy's Common
Stock (the "Prospectus"), which has been provided to the
undersigned). The undersigned acknowledges that such Policy
may be amended, modified, suspended or terminated at any
time and from time to time in the discretion of Roundy's
Board of Directors, and that by accepting this Buying
Deposit Agreement, Roundy's has not undertaken any
obligation to issue or sell any shares of its stock to the
undersigned except to the extent provided in such Policy, as
the same may exist and be in effect from time to time.
Installment payments made to Roundy's from time to time
will be retained by Roundy's as a part of the undersigned's
Buying Deposit, and will be applied to the undersigned's
purchase of shares of Roundy's Common Stock only at such
times and in such amounts as the undersigned may designate
(subject to the preceding paragraph and the Policy described
therein) pursuant to a subscription agreement executed by
the undersigned in the form attached hereto.
Roundy's, by accepting this Buying Deposit Agreement,
agrees to be bound by the Statement of Policy Regarding
Repurchase of Stock set forth as Exhibit D to the
Prospectus, as such Statement of Policy may be amended from
time to time.
The undersigned understands that patronage dividends,
if any, paid to the undersigned in Class B Common Stock from
and after the date hereof, until the Buying Deposit is
satisfied, will be credited against the installment payments
of the undersigned's Buying Deposit in the inverse order of
the due dates of such installments, at a price per share
equal to the Book Value of such shares as of the fiscal year-
end immediately preceding the date of their issuance.
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:
________________________________
City ___________________________
State___________________________
Zip Code __________________
BUYING DEPOSIT - MONTHLY INSTALLMENT PAYMENTS
1. Total Buying Deposit _______________________
2. Less down payment _______________________
3. Balance to be amortized _______________________
4. Estimated weekly retail sales _______________________
Check Monthly Buying Deposit Installment
Weekly Retail Sales One 1st Year 2nd Year 3rd Year
- ------------------- -------- -------- -------- --------
$ 40,000 - $100,000 _____ $ 300 $ 400 $ 500
$100,000 - $200,000 _____ 750 900 1,050
Over $200,000 _____ 1,000 1,250 1,500
Payment beginning (nearest 15th day of month following down payment)
Approved:_____________________________________________
Retail Counselor, Roundy's, Inc.
Accepted:_____________________________________________
Sales Manager, Roundy's, Inc.
A-3
Exhibit C
Article V of By-Laws of Roundy's, Inc., as amended by the
Board of Directors on December 12, 1989
FISCAL YEAR
ACCOUNTING AND PATRONAGE REBATES
The corporation is obligated to its Common stockholders
on a patronage basis or bases for all amounts received by it
resulting from sales to them as defined and limited herein.
5.1 Patronage Dividends. Patronage dividends shall
accrue to Class A Common stockholders of the corporation out
of net earnings from business done with such stockholders
and shall be determined and distributed for each fiscal year
pursuant to existing provisions of the Internal Revenue
Code; provided further that patronage dividends of the
corporation will be determined on the basis of the net sales
of the corporation to each Class A Common stockholder and
paid in an amount which will reduce net income of the
corporation to such amount as will result in an increase of
ten percent (10%) in the net book value (as determined by
the corporation's independent certified public accountants)
of the corporation's outstanding shares as of the close of
such fiscal year. The computation of the amount of
patronage dividends payable to Class A Common stockholders
shall be made after the determination of patronage dividends
payable to nonstockholder-customers.
5.2 Determination of Patronage Dividends. Patronage
dividends shall be determined from the records of the
corporation as soon as practicable after the close of the
corporation's fiscal year, and the Class A Common stockhold
ers shall be promptly advised of the amount of their
respective patronage dividend and the method of payment of
such patronage dividend.
5.3 Consent. Each person who hereafter becomes a
Class A Common stockholder of this corporation and each
Class A Common stockholder of this corporation on the
effective date of this By-Law who continues as a Class A
Common stockholder after such date shall, by such act alone,
consent that the amount of any distributions with respect to
his patronage occurring after January 3, 1976 which are made
in written notices of allocation (as defined in Section 1388
of the Internal Revenue Code) and which are received by him
from the corporation, will be taken into account by him at
their stated dollar amounts in the manner provided in
Section 1385(a) of the Internal Revenue Code in the taxable
year in which such written notices of allocation are
received by him.
5.4 Payment of Patronage Dividends.
(a) Patronage dividends are payable in the fiscal
year following the fiscal year in which accrued, in money,
qualified written notices of allocation (as defined by the
Internal Revenue Code) or other property (except 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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Exhibit D
ROUNDY'S, INC. POLICY RELATING TO REDEMPTION OF STOCK
BY INACTIVE CUSTOMER SHAREHOLDERS AND FORMER EMPLOYEES
ARTICLE 1
Repurchase of Shares by Corporation
1.01 Agreement to Repurchase. Upon the terms and
subject to the conditions set forth in this Policy
(including the applicable provisions of Articles 2 and 3,
below), the Corporation shall be obligated to repurchase its
shares of Class A Common Stock and Class B Common Stock
after proper request by the holder thereof, or his or its
legal representative, at any time after the occurrence of a
Customer/ Shareholder Termination with respect to such stock
or an Employee/ Shareholder Termination with respect to such
holder.
1.02 Repurchase in Increments. The Corporation's
obligation to repurchase stock shall accrue, subject to the
other terms and conditions of this Policy, in annual 20%
increments during the five year period beginning on the
Repurchase Request Date with respect to such stock.
Beginning on the first anniversary date of the Repurchase
Request Date, the Corporation shall become obligated to
purchase in accordance herewith 20% of the aggregate number
of shares of Class A and Class B Common Stock as to which a
proper repurchase request has been received. Such
percentage shall be increased to 40% on the second
anniversary date of the Repurchase Request Date, 60% on the
third anniversary date, 80% on the fourth anniversary date
and 100% on the fifth anniversary date of the Repurchase
Request Date. Regardless of the foregoing, in the event
that a Customer/Shareholder Termination or an
Employee/Shareholder Termination occurs as a result of the
death of the shareholder and the estate of such shareholder
specifically so elects by written notice to the Secretary of
the Corporation within 180 days thereafter, the repurchase
of not more than the first $50,000 in value of stock shall
be accelerated to the date 180 days after receipt by the
Secretary of such written election. Each share shall
continue to be outstanding for all purposes until actually
repurchased.
1.03 Calculation of Repurchase Price. The repurchase
price for each share of stock of the Corporation shall be
the Book Value of such share at the date of repurchase.
1.04 Form of Repurchase Request. A proper repurchase
request for purposes hereof shall consist of a written
notification to the Secretary of the Corporation specifying
the number of shares to be repurchased, the reason for such
repurchase request, and the date or dates on which a
Customer/Shareholder Termination or Employee/Shareholder
Termination occurred with respect to the stock covered by
such repurchase request. Such repurchase request must be
made in accordance with the procedures specified in Section
2.02, below.
1.05 Acknowledgment By Corporation of Repurchase
Request. Subject to the conditions set forth in the Policy
(including the applicable provisions of Articles 2 and 3,
below), the Secretary shall promptly acknowledge in writing
receipt of a repurchase request. Such acknowledgment shall
set forth, among other things, the Repurchase Target Dates
with respect to the shares covered by the repurchase request
and the Book Value of the shares at the Repurchase Request
Date, and shall enumerate such documents and instruments as
may be reasonably required to be delivered to assure the
Secretary that the Corporation will receive unencumbered
title to the shares to be repurchased.
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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 $50,000 per shareholder may, in the sole
discretion of the Corporation, be repurchased on an
accelerated basis in cases of demonstrated hardship.
1.08 Authority Reserved.
(a) No provision of this Policy shall be
construed as limiting the Corporation's authority to
repurchase outstanding shares of its stock at the discretion
of the Board of Directors or the officers on any other terms
at any time; provided however, that no such discretionary
purchases shall occur if a Repurchase Target Date has passed
with respect to shares required to be repurchased under this
Policy and such shares have not yet been repurchased.
(b) No provision of this Policy shall be
construed as limiting the authority of the Board of
Directors to amend, revise or rescind this Policy. This
Policy does not create, and should not be understood as
creating, any vested rights or contractual obligations of
the Corporation except, and only to the extent, that no
amendment, revision or rescission shall reduce the
Repurchase Price payable by the Corporation for shares with
respect to which the Repurchase Request Date precedes the
date of the resolution of the Board of Directors effecting
such amendment, revision or rescission.
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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.
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ARTICLE 2
Additional Conditions to Repurchase Obligations
2.01 Notification to Corporation of Certain
Termination Events. Each shareholder (or his or its legal
representative) shall, as soon as possible after the
occurrence of a Customer/Shareholder Termination or an
Employee/Shareholder Termination (occurring otherwise than
as a result of the death or retirement of the employee),
give written notice of the same to the Secretary of the
Corporation, stating the nature and date of such event. If
it shall come to the attention of the Corporation that such
an event has occurred and no such notice has been received,
the Secretary shall give written notice of the same to the
record holder of such shares. Any determination so made in
good faith by the Corporation, including any determination
as to the date upon which a retail food store became or
ceased to be an Active Customer, or upon which a
Customer/Shareholder Termination or an Employee/Shareholder
Termination occurred, shall be final and binding on all
persons.
2.02 Timing of Repurchase Requests. Requests by
shareholders to have their shares of stock redeemed or
repurchased pursuant to this policy will be accepted by the
Corporation when made in accordance with the following
procedures:
(a) When Repurchase Requests May Be Made.
Requests by a shareholder to have its stock repurchased or
redeemed will be accepted only if made during one of three
(3) "window" periods each year -- after the first, second
and third fiscal quarters of the Corporation, consisting of
the last two weeks of May, August and November,
respectively. These "window" periods are subject to closure
or modification by management or the Board of Directors of
the Corporation if, in the best judgment of management or
the Board, it would be inappropriate for the Corporation to
be engaged in the purchase or sale of its shares at such
time. Requests for redemption will be deemed to have been
duly made during these periods if they are received in
writing at the Corporation's Pewaukee office during the
window period or, if received thereafter, if they were
postmarked during the window period.
(b) Authority Of The Board To Suspend Or Deviate
From These Requirements. The Board of Directors reserves at
all times the authority to alter, suspend or deviate from
the requirements of this Section 2.02, in its discretion, to
the extent it determines such action to be appropriate.
(c) Effective Date. The provisions of this
Section 2.02 will be effective commencing January 1, 1994.
2.03 Limitations on Ownership of Class A Common Stock.
(a) No person may directly or indirectly
beneficially own shares of Class A Common Stock except a
Person who or which directly or indirectly owns an Active
Customer or the trustees of a voting trust formed by and for
the benefit of such Persons. No Person may directly or
indirectly beneficially own more than 100 shares of Class A
Common Stock, except that (i) a Person owning and operating
(or controlling) more than one Active Customer at different
locations may own not more than 100 shares of Class A Common
Stock for each such Active Customer, and (ii) the trustees
of a voting trust as set forth in the preceding sentence may
be the record holders of such number of shares as may be
owned in the aggregate by the depositors thereof.
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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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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.
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ARTICLE 4
Definitions
4.01 Whenever used in this Policy;
(a) "Active Customer" means a retail food store
whose principal source of supply is purchases from the
Corporation.
(b) "Book Value" at any given date means the Book
Value of a share of Common Stock (determined according to
the annual financial statements prepared by the Corporation,
as audited and certified by the Corporation's independent
auditors) as of the end of the fiscal year immediately
preceding the fiscal year in which such date occurs.
(c) "Claimant" means any shareholder of the
Corporation who has asserted and not irrevocably withdrawn
such assertion or is otherwise then asserting (in or in
anticipation of any litigation or other proceeding) a
challenge (1) to the authority of the Corporation or its
Board of Directors to adopt any pending Redemption Policy or
to have adopted the then current Redemption Policy or any
prior Redemption Policy or to amend or revise any of the
same or (2) to the enforceability or validity or the
Corporation's interpretation or application of any provision
of the then current or any prior Redemption Policy.
(d) "Customer/Shareholder Termination" occurs
whenever an Active Customer owned and operated (or
controlled) by a shareholder of the Corporation either (A)
ceases to be an Active Customer, or (B) ceases to be owned
and operated (or controlled) by such shareholder, whether by
reason of the death, adjudication of incompetency or com
plete retirement from business by reason of age or
disability of such shareholder (if an individual), the
dissolution or termination of such shareholder (if a Person
other than an individual), adjudication in bankruptcy,
transfer of the Active Customer or the entity owning or
controlling it, or otherwise. In the event the above shall
occur with respect to one or more but not all Active
Customers owned and operated (or controlled) by a single
shareholder of the Corporation, a Customer/Shareholder
Termination shall be deemed to have occurred with respect to
that fraction of each class of Common Stock owned by such
shareholder as is equal to the fraction produced by dividing
the number of Active Customers owned and operated (or
controlled) by such shareholder after such event(s) by the
number of Active Customers so owned and operated (or
controlled) immediately before such event(s).
(e) "Employee/Shareholder Termination" occurs,
with respect to a shareholder who is an employee of the
Corporation, upon the cessation of such person's employment
relationship with the Corporation for any reason.
(f) "Person" includes any individual, corporation,
partnership, joint venture, trust, estate or any other legal
entity.
(g) "Redemption Policy" means any written policy
adopted by the Board of Directors of the Corporation
pursuant to Section 3.4 of the Articles of Incorporation
setting forth terms, conditions or provisions under which
the Corporation will (during the term of such policy)
repurchase, redeem or otherwise acquire shares of the
Corporation's stock from shareholders of the Corporation.
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(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.
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Exhibit E
POLICY REGARDING ISSUANCE AND SALES OF ROUNDY'S, INC. STOCK
(As Adopted by the Board of Directors on December 7, 1993)
Roundy's, Inc. will make shares of its Class B Common
Stock ("Stock") available for purchase from time to time on
the following terms and conditions:
(1) Persons to Whom Shares Will Be Issued. Shares of
the Company's Stock will be made available for purchase by:
- the Company's existing shareholders who are active
retailers doing business with the Roundy's
Cooperative ("Retailers");
- new Retailers; and
- employees of Roundy's, Inc. ("Employees"), upon the
recommendation of the Chief Executive Officer and the
approval of the Board of Directors or the Compensation
Committee of the Board.
Stock will not be made available to "inactive"retailers, even if
they have not yet tendered their stock for repurchase pursuant to the
inactive shareholder repurchase policy.
(2) Times at Which Stock Will Be Made Available for Purchase.
Stock will be made available for purchase by eligible
purchasers during three (3) "window" periods each year --
after the first, second and third fiscal quarters of the
Company consisting of the last two weeks of May, August and
November, respectively. These "window" periods are subject
to closure or modification by management or the Board of
Directors if, in the best judgment of management or the
Board, it would be inappropriate for the Company to be
engaged in the purchase or sale of its shares at such time.
Eligible purchasers wishing to purchase shares during any
such "window" period must deliver to the Company, within
such "window" period, a signed subscription agreement, in
the form specified by the Company, along with full payment
of the subscription price of the shares.
(3) Price at Which Shares Will Be Issued. When issued
pursuant to this policy, shares will be issued at a price
equal to their book value as of the preceding fiscal year
end.
(4) Number of Shares Which Any Purchaser Shall Be
Eligible to Purchase. The terms set out in this Paragraph 4
are subject at all times to the restrictions and limitations
with respect to timing of purchases as set out in Section
(2) above.
(i) Retailers. The number of shares a Retailer
will be eligible to purchase will depend in part on the
number of shares already held by such Retailer relative to
the number of shares which such Retailer would be expected
to hold under Roundy's "Buying Deposit" policy. Roundy's
encourages each of its Retailers to purchase and hold shares
of the Company's Stock having a total "book value" equal to
not less than twice the average amount of such Retailer's
weekly purchases from Roundy's. This amount is referred to
as the Retailer's "Buying Deposit." These shares are
pledged to Roundy's to secure the Retailer's accounts
receivable due Roundy's, as well as any other indebtedness of
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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
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 liability for rentals due under leases of
store facilities or the equipment therein) will not
be eligible to purchase shares if it has no Regular
Buying Deposit Deficit, Incremental Buying Deposit
Deficit, or Initial Buying Deposit Deficit.
(E) Closed Window Periods. Except as expressly provided
otherwise in Paragraphs (B) and (D) above, shares
which any Retailer would have been entitled to
purchase pursuant to this subsection (4)(I) in any
"window" period, but for the fact that such "window"
period was closed pursuant to Section (2) above, shall
not increase the number of shares which such Retailer
shall be entitled to purchase in any subsequent "window"
period or at any other time.
(ii) Inactive Retailer-Shareholders. Inactive Retailers will not
be permitted to acquire any additional shares.
(iii) Employees. An Employee may purchase shares in such amount
as may be authorized by the Board of Directors or the
Compensation Committee of the Board, upon the recommendation
of the Chief Executive Officer; provided, that any employee
desiring to purchase shares shall advise the Company of his
or her desire to do so prior to the end of the first fiscal
quarter of any year, and, if approval for the purchase of
such shares is granted, such shares shall be purchased in
three approximately equal installments in each of the three
"window" periods occurring during such year.
(5) Discretion Of The Board To Deviate From Or Modify The
Policy. The Board of Directors of the Company at all
times retains the discretion to alter, suspend, or
deviate from the above policy, in its discretion, to
the extent that it determines such action to be
appropriate. However, it is not anticipated that any
such deviations from, modifications to, or suspensions
of this policy will be made except in the case of
significant transactions or events outside the
ordinary course of the Company's business.
(6) Effective Date. These policies will be effective
commencing January 1, 1994, except that Section (2)
hereof, as revised, will be effective as of January 1,
1995.
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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.
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 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).
4.2 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.
4.3 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.
4.4 Policy Regarding Issuance and Sales of Roundy's, Inc.
Stock.
FILED HEREWITH (included as Exhibit E to the Prospectus
which forms a part of this Registration Statement).
4.5 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.
4.6 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus
which forms a part of this Registration Statement).
4.7 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus
which forms a part of this Registration Statement).
II-2
4.8 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).
4.9 First Amendment dated May 1, 1996 to Note Agreements
dated December 15, 1991 and Note Agreements dated
December 15, 1992 and Note Agreements dated December
22, 1993, incorporated herein by reference to Exhibit
4.16 of Registrant's Form 10-Q for the quarterly period
ended June 29, 1996, filed with the Commission on
August 13, 1996, Commission File No. 33-57505.
4.10 Note Agreement dated May 15, 1996 between Roundy's,
Inc. and The Ohio National Life Insurance, Phoenix
American Life Insurance Company, Provident Mutual Life
Insurance, Providentmutual Life and Annuity Company of
America, United of Omaha Life Insurance Company, John
Alden Life Insurance Company, Oxford Life Insurance
Company, The Security Mutual Life Insurance Company of
Lincoln, Nebraska and Woodman Accident and Life
Company, incorporated herein by reference to Exhibit
4.17 of Registrant's Form 10-Q for the quarterly period
ended June 29, 1996, filed with the Commission on
August 13, 1996, Commission File No. 33-57505.
4.11 Credit Agreement dated December 13, 1996, between
Roundy's, Inc. and PNC Bank, NA (as agent),
incorporated herein by reference to Exhibit 4.11 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 28, 1996, filed with the Commission
on March 26, 1997, Commission File No. 33-57505.
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, incorporated herein by reference to Exhibit
9(d) of Registrant's Registration Statement on Form S-2
(File No. 33-57505), dated April 26, 1996.
II-3
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus, Sullivan, Schmitt and Beketic.
FILE HEREWITH.
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,
1997 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
28, 1996, filed with the Commission on March 26, 1997,
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, incorporated herein by reference to
Exhibit 10.5 of Registrant's Registration Statement on
Form S-2 (File No. 33-57505), dated April 26, 1996.
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-4
Item 17. Undertakings.
(a) Rule 415 Offering. The undersigned registrant hereby undertakes
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents
by Reference. The undersigned registrant hereby
undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended,
each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended (and, where
applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended) that is
incorporated by reference in the registration statement
shall be deemed to be a new Registration Statement
relating to the securities offered therein and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) Incorporated Annual and Quarterly Reports. The
undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the
latest annual report to security holders that is
incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange
Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference
in the prospectus to provide such interim financial
information.
II-5
(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-6
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. 2 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 24, 1997.
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. 2 to
Registration Statement has been signed this 24th day of
April, 1997 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
Robert D. Ranus and Principal Accounting Officer
Signature Title
- ------------------- ----------------------------
ROBERT E. BARTELS Director
- --------------------
Robert E. Bartels
CHARLES R. BONSON Director
____________________
Charles R. Bonson
LLOYD E. COPPERMSMITH 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
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 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).
4.2 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.
4.3 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.
4.4 Policy Regarding Issuance and Sales of Roundy's, Inc.
Stock.
FILED HEREWITH (included as Exhibit E to the Prospectus
which forms a part of this Registration Statement).
4.5 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.
4.6 Form of Subscription Agreement
FILED HEREWITH (included as Exhibit A to the Prospectus
which forms a part of this Registration Statement).
4.7 Form of Buying Deposit Agreement
FILED HEREWITH (included as Exhibit B to the Prospectus
which forms a part of this Registration Statement).
4.8 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).
4.9 First Amendment dated May 1, 1996 to Note Agreements
dated December 15, 1991 and Note Agreements dated
December 15, 1992 and Note Agreements dated December
22, 1993, incorporated herein by reference to Exhibit
4.16 of Registrant's Form 10-Q for the quarterly period
ended June 29, 1996, filed with the Commission on
August 13, 1996, Commission File No. 33-57505.
4.10 Note Agreement dated May 15, 1996 between Roundy's,
Inc. and The Ohio National Life Insurance, Phoenix
American Life Insurance Company, Provident Mutual Life
Insurance, Providentmutual Life and Annuity Company of
America, United of Omaha Life Insurance Company, John
Alden Life Insurance Company, Oxford Life Insurance
Company, The Security Mutual Life Insurance Company of
Lincoln, Nebraska and Woodman Accident and Life
Company, incorporated herein by reference to Exhibit
4.17 of Registrant's Form 10-Q for the quarterly period
ended June 29, 1996, filed with the Commission on
August 13, 1996, Commission File No. 33-57505.
4.11 Credit Agreement dated December 13, 1996, between
Roundy's, Inc. and PNC Bank, NA (as agent),
incorporated herein by reference to Exhibit 4.11 of
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 28, 1996, filed with the Commission
on March 26, 1997, Commission File No. 33-57505.
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, incorporated herein by reference to Exhibit
9(d) of Registrant's Registration Statement on Form S-2
(File No. 33-57505), dated April 26, 1996.
10.1 Deferred Compensation Agreement plan between the
Registrant and certain executive officers including
Messrs. Lestina, Ranus, Sullivan, Schmitt and Beketic.
FILED HEREWITH.
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,
1997 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
28, 1996, filed with the Commission on March 26, 1997,
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, incorporated herein by reference to
Exhibit 10.5 of Registrant's Registration Statement on
Form S-2 (File No. 33-57505), dated April 26, 1996.
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.
</TABLE>
DEFERRED COMPENSATION AGREEMENT EXHIBIT 10.1
AGREEMENT, made this _____ day of _________________, 1997,
between ROUNDY'S, INC., a Wisconsin corporation ("Roundy's") and
_________________ ("Employee").
RECITALS:
1. Employee is employed by Roundy's (or one of its
subsidiaries or affiliates) in a managerial or officer capacity.
Employee's skills and experience are of great value to Roundy's
(and/or such subsidiary or affiliate) in the conduct of its
business.
2. Roundy's and employee acknowledge that a change in the
ownership or control of Roundy's or its business could result in
a displacement of certain key employees and/or a material change
in the methods of operation of Roundy's business.
3. In order to help secure Employee's continued commitment
to Roundy's, Roundy's is willing to enter into this Agreement and
thereby provide certain financial benefits to Employee in the
event of the termination of Employee's employment following a
Change of Control (as hereinafter defined) of Roundy's.
AGREEMENT:
In consideration of the premises and Employee's continued
employment with Roundy's, Roundy's and Employee hereby agree as
follows:
1. Payment Upon Change Of Control and Termination of
Employment. Roundy's will pay to Employee the "Deferred
Compensation Amount" (determined pursuant to Section 3 below) if,
at any time within three (3) years after (or substantially
concurrently with) the occurrence of a "Change of Control" (as
hereinafter defined) of Roundy's, Employee's employment with
Roundy's (or its subsidiaries or affiliates) is either (a)
terminated by Roundy's (or the subsidiary or affiliate of
Roundy's by which Employee is then employed), other than for
"Good Cause" (as that term is hereinafter defined), or (b)
terminated by Employee for "Good Reason" (as that term is
hereinafter defined); provided, that the termination of
Employee's employment by Roundy's or one of its subsidiaries or
affiliates will not constitute a termination for purposes of this
Agreement if Employee thereafter becomes employed by another
Roundy's subsidiary or affiliate. The date on which the
termination of employment described in either clause (a) or (b)
above occurs is referred to herein as the "Termination Date."
The Deferred Compensation Amount shall be paid to Employee in
full within thirty (30) days after the Termination Date.
2. Continuation of Certain Fringe Benefits. If the
Employee becomes entitled to the payment of any Deferred
Compensation Amount pursuant to the preceding Section 1, Roundy's
will (in addition to the payment of the Deferred Compensation
Amount) continue to provide to Employee, at no cost to Employee,
those health and/or life insurance benefits (if any) to which the
Employee was entitled or which were provided or made available to
the Employee by Roundy's (or the subsidiary or affiliate by which
Employee was employed) as of the Termination Date, for that
number of months following the Termination Date which is equal to
the "Monthly Multiplier" (as determined under the following
Section 3).
3. Deferred Compensation Amount. If the Termination Date
occurs within two (2) years after the date on which a Change of
Control occurs, the "Deferred Compensation Amount" means the
"Monthly Benefit Amount" (as hereinafter defined) times twenty-
four (24). If the Termination Date occurs more than two (2)
years, but not more than three (3) years, after the date on which
a Change of Control occurs, the "Deferred Compensation Amount"
means the "Monthly Benefit Amount" times twenty-four (24) minus
the number of calendar months between the date two years after
the date on which a Change of Control occurs (the "Second
Anniversary Date") and the Termination Date. For this purpose,
in determining the number of months between the Second
Anniversary Date and the Termination Date, the month in which the
Termination Date falls will be included and the month in which
the Second Anniversary Date occurs will be excluded. If the
Termination Date occurs more than three (3) years after the date
on which a Change of Control occurs, the "Deferred Compensation
Amount" shall be zero. The number by which the Monthly Benefit
Amount is multiplied to determine the Deferred Compensation
Amount, pursuant to the first two sentences of this Section 3, is
referred to herein as the "Monthly Multiplier."
4. Monthly Benefit Amount. For purposes of this Agreement,
the "Monthly Benefit Amount" means one-twelfth (1/12) of
Employee's annual base salary as established and in effect as of
the Termination Date (unless such base salary in effect as of the
date of the Change of Control is greater, in which event the
latter will apply)
5. Definition of Change of Control. For purposes of this
Agreement, a "Change of Control" of Roundy's shall be deemed to
occur:
(a) If any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), together with its
affiliates (but not including the Roundy's, Inc. Voting
Trust), becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, of thirty percent (30%) or more of the then
outstanding Common Stock of Roundy's, or thirty percent
(30%) of more of the then outstanding securities of
Roundy's entitled generally to vote for the election of
Directors of Roundy's ("Voting Securities"); provided,
that if the person so acquiring such Common Stock or
Voting Securities is itself a corporation or other
entity, such acquisition will constitute a Change of
Control 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 beneficially Common Stock or Voting
Securities of Roundy's; or
(b) Upon the merger or share exchange of Roundy's with
any other corporation, the sale or other disposition of
substantially all of the assets of Roundy's, or the
liquidation or dissolution of Roundy's, unless, in any
such case, 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 of assets, held beneficially Common Stock
or Voting Securities of Roundy's; or
(c) If the Board of Directors of Roundy's (by the
affirmative vote of at least 2/3 of the directors then
in office), immediately prior to any other action
proposed to be taken by Roundy's or by the stockholders
of Roundy's, determines that such proposed action, if
taken, would constitute a Change of Control of
Roundy's, and such action is thereafter taken.
6. Definitions of "Good Cause" and "Good Reason."
(a) For purposes of this Agreement, the term "Good
Cause" means only (i) the wilful commission by the
Employee of a material act of dishonesty or moral
turpitude involving Roundy's (or one or more of its
subsidiaries or affiliates) (ii) the Employee's
conviction of a felony, or his pleading guilty or nolo
contendere to the same; (iii) the Employee's gross
negligence in the performance of his duties and
responsibilities as an officer of Roundy's (or one or
more of its subsidiaries or affiliates); (iv) the
wilful and continuing failure of the Employee to carry
out the duties and responsibilities of his office, or
to follow a specific and lawful directive of the Board
of Directors of Roundy's (or one or more of its
subsidiaries or affiliates) or an officer of Roundy's
(or one or more of its subsidiaries or affiliates) to
whom he or she reports (provided such directive is
consistent with the Employee's office or position); (v)
the Employee's wilful disclosure of material
proprietary confidential information of Roundy's (or
one or more of its subsidiaries or affiliates) to or
for the benefit of a competitor of Roundy's, to the
extent such information was not available publicly; or
(vi) any intentional misrepresentation by the Employee
to the directors of Roundy's. For purposes of the
preceding definition, no act, failure to act, or
omission on the part of the Employee will be deemed to
have been "wilful" or "intentional" if done or omitted
to be done in good faith and in the reasonable belief
that it was in or not opposed to the best interests of
Roundy's. Any such act or omission or failure to act
based upon the advice of counsel for Roundy's will be
conclusively deemed to have been done or omitted to be
done in good faith and in the best interests of
Roundy's.
(b) For purposes of this Agreement, the term "Good Reason"
means a material diminution or adverse change (effected
by Roundy's (or the subsidiary or affiliate by which
the Employee is employed), without the Employee's
voluntary concurrence) in the nature or scope of the
Employee's authority, powers, functions, duties or
responsibilities or any other material aspect of his
employment, including, without limitation, the
Employee's ceasing to hold the office or offices (if
any) which he or she held prior to the Change of
Control (or the substantial equivalent thereof) (other
by than by reason of the Employee's voluntary
resignation from such office or offices).
7. No Contract of Employment. Nothing herein contained
shall be construed or interpreted to impose on Roundy's any
obligation to continue the employment of Employee, or confer on
Employee any rights to any such continued employment.
8. Notices. All notices under this Agreement shall be in
writing and any notice shall be considered to be given and
received in all respects on the day it is personally delivered or
deposited in the United States mail, first class, postage
prepaid, addressed as follows or to such other address as may be
designated by one party to the other by notice duly given
(provided, that written notice given in any other manner shall
nonetheless be effective when actually received by the party
entitled to receive it):
If to Roundy's: Roundy's, Inc.
23000 Roundy Drive
P.O. Box 473
Pewaukee, WI 53072
Attn: Secretary
If to the Employee:
At his or her address as it
appears from time to time in
the employment records of Roundy's.
9. Miscellaneous.
(a) Assignment. The right of Employee or any other
person to the payment of the Deferred Compensation
Amount or other benefits under this Agreement shall not
be assigned, transferred, pledged or encumbered,
voluntarily or by operation of law; provided that in
the event of Employee's death after the Termination
Date and before the Deferred Compensation Amount has
been paid to Employee, the Deferred Compensation Amount
shall be payable to Employee's estate.
(b) Effect on Retirement Plans. Any amounts payable
to Employee under this Agreement shall not be deemed
salary or other compensation to Employee for the
purpose of computing benefits to which he or she may be
entitled under any profit sharing plan, pension plan,
or other arrangement of the corporation for the benefit
of its employees.
(c) Amendment. This Agreement may only be amended by
an agreement in writing signed by the parties hereto.
(d) Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto,
Roundy's successors and assigns, and the Employee's
heirs and legal representatives. If Roundy's merges or
consolidates with or into any other corporation or
entity (whether or not Roundy's is the surviving entity
in such transaction), or transfers all or substantially
all of its business or assets to another corporation or
other form of business or other entity, all references
herein to Roundy's shall be deemed references to the
corporation or other entity surviving such merger or
consolidation or to which such assets or business are
transferred (as well as to Roundy's, if it remains in
existence).
(e) Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the
State of Wisconsin.
(f) Costs of Enforcement. In the event of any
litigation arising between the parties in connection
with the interpretation or enforcement of this
Agreement, the prevailing party in such litigation
shall be entitled to recover its costs and expenses of
such litigation, including attorney's fees, from the
non-prevailing party.
(g) Termination of Existing Agreement. This Agreement
is intended to supersede in its entirety that certain
Deferred Compensation Agreement between Roundy's and
Employee dated ______________, 199__ (as amended on
November __, 1993) (the "Prior Agreement"). By their
execution of this Agreement, the parties agree that the
Prior Agreement is hereby terminated and extinguished
in all respects, effective immediately upon such
execution.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
ROUNDY'S, INC.
By: ----------------------------------
Gerald F. Lestina, President & CEO
Attest: ----------------------------------
Edward G. Kitz, Vice President,
Secretary & Treasurer
----------------------------------
------------------------, Employee
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-
Effective Amendment No. 2 to the Registration Statement No.
33-57505 of Roundy's, Inc. on Form S-2 of our reports dated
February 21, 1997, included and incorporated by reference in
the Annual Report on Form 10-K of Roundy's, Inc. for the
year ended December 28, 1996, and to the use of our report
dated February 21, 1997, 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 24, 1997
<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 12-28-96 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> DEC-28-1996
<CASH> 40,342,300
<SECURITIES> 0
<RECEIVABLES> 98,593,300
<ALLOWANCES> 0
<INVENTORY> 155,562,300
<CURRENT-ASSETS> 305,056,300
<PP&E> 189,575,900
<DEPRECIATION> 90,840,100
<TOTAL-ASSETS> 434,641,000
<CURRENT-LIABILITIES> 214,558,400
<BONDS> 93,614,600
0
0
<COMMON> 1,341,500
<OTHER-SE> 102,386,700
<TOTAL-LIABILITY-AND-EQUITY> 434,641,000
<SALES> 2,579,010,200
<TOTAL-REVENUES> 2,583,504,900
<CGS> 2,333,216,600
<TOTAL-COSTS> 2,333,216,600
<OTHER-EXPENSES> 218,608,400
<LOSS-PROVISION> 5,302,600
<INTEREST-EXPENSE> 8,479,900
<INCOME-PRETAX> 17,897,400
<INCOME-TAX> 7,630,000
<INCOME-CONTINUING> 10,267,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,267,400
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
