Annual Report (Form 10-K), fiscal year 1994

ITEM 1. Business. 	--------- 				 GENERAL 				 ------- Roundy's, Inc. and its subsidiaries (collectively the "Company") are engaged principally in the wholesale distribution of food and nonfood products to supermarkets and warehouse food stores located in Wisconsin, Illinois, Michigan, Indiana, Ohio, Iowa, Kentucky, Missouri, Pennsylvania, Tennessee and West Virginia. The Company also owns and operates 12 retail warehouse food stores under the name "Pick 'n Save," one limited assortment food store under the name "Price Less Foods," one limited assortment food store under the name "Mor For Less" and five conventional stores under the name "Cardinal Food Gallery" or "Buy Low Foods." The Company offers its retail customers a complete line of nationally-known name brand merchandise, as well as its own private labels, including "Roundy's," "Old Time," "Scot Lad," "Spring Lake," "Perfect Match," "Shurfine," "Price Saver," "Buyers' Choice," "Super Choice," "Sunny Valley," "Sunny Acres," "Sunny Acre Farms," "Classic," "Bonnie Blue," "Valu-Check'd," "Gold Coin," and "Meadow Moor Farms." The Company services 1,130 retail grocery stores and 682 convenience stores.
In addition to the distribution and sale of food and nonfood products, the Company provides specialized support services for retail grocers, including promotional merchandising and advertising programs, accounting and inventory control, store development and financing and assistance with other aspects of store management. The Company maintains a staff of trained retail counselors who advise and assist individual owners and managers with store operations.
Roundy's, Inc. was incorporated in 1952 under the Wisconsin Business Corporation Law. The Company's executive offices are located at 23000 Roundy Drive, Pewaukee, Wisconsin 53072, and its telephone number is (414) 547-7999. Unless the context indicates otherwise, as used herein, the term "Company" refers to Roundy's, Inc. and its subsidiaries and the term "Roundy's" refers to Roundy's, Inc. without its subsidiaries.
		 OPERATION AS A COOPERATIVE 		 -------------------------- Roundy's operates its food wholesale business as a cooperative and determines its Federal income tax liabilities under Subchapter T of the Internal Revenue Code, which governs the taxation of corporations operating on a cooperative basis. Approximately 69% of the outstanding Common Stock of Roundy's [including all Class A (Voting) Common Stock] is owned by the owners ("stockholder-customers") of 155 retail grocery stores serviced by the cooperative. These stockholder-customers receive patronage dividends from Roundy's based on the sales of Roundy's to such stockholder-customers. The patronage dividend is payable in at least 20% in cash and the remainder in Class B Common Stock. Patronage dividends for the last three fiscal years were payable 30% in cash and 70% in Class B Common Stock. Under Subchapter T of the Internal Revenue Code, patronage dividends are deducted by Roundy's, and are generally taxable to the stockholder-customers (including the value of the Class B Common Stock), for Federal income tax purposes.
The subsidiaries of Roundy's do not operate as cooperatives. The customers serviced by these subsidiaries are independent grocers, operating 975 retail stores and 682 convenience stores and do not receive patronage dividends. In addition, approximately 31% of the outstanding Common Stock of Roundy's is held by employees or former customers of Roundy's and, although they participate in the accumulation of equity in the consolidated Company, they do not receive patronage dividends and do not own any Class A (Voting) Common Stock.
The applicable laws, regulations, rulings and judicial decisions affecting the determination of whether a corporation qualifies as a cooperative for Federal income tax purposes under Subchapter T of the Internal Revenue Code are subject to interpretation. Management believes that Roundy's qualifies as a cooperative for such purposes. If the Internal Revenue Service were to challenge the cooperative status of Roundy's, and if Roundy's were to be unsuccessful in defending such status, Roundy's might incur a Federal income tax liability with respect to patronage dividends previously paid to stockholder-customers during the tax years in question and deducted by Roundy's. Roundy's thereafter might incur significantly increased consolidated Federal income tax liabilities in future tax years.
		 WHOLESALE FOOD DISTRIBUTION 		 --------------------------- The Company distributes a broad range of food and 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 general merchandise. The Company has no long-term purchase commitments and management believes that the Company is not dependent upon any single source of supply. No source of supply accounted for more than 5% of the Company's purchases in fiscal 1993.
The Company sells brand name merchandise of unrelated manufacturers, including most nationally advertised brands. In addition, the Company sells numerous products under private labels, including "Roundy's," "Old Time," "Scot Lad," "Spring Lake," "Perfect Match," "Shurfine," "Price Saver," "Buyers' Choice," "Super Choice," "Sunny Valley," "Sunny Acres," "Sunny Acre Farms," "Classic," "Bonnie Blue," "Valu-Check'd," "Gold Coin," and "Meadow Moor Farms." Private label product sales for the Company accounted for $137,176,000, $148,074,000 and $128,132,000 of the Company's sales during fiscal 1993, 1992 and 1991, respectively.
Roundy's, exclusive of its subsidiaries, operates as a cooperative with respect to its wholesale food distribution business. Roundy's cooperative operations accounted for approximately 36%, 34% and 31% of the Company's consolidated net sales and service fees for the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991, respectively. At January 1, 1994, Roundy's had 83 stockholder-customers actively engaged in the retail grocery business, operating a total of 155 retail grocery stores. Roundy's cooperative wholesale food business is focused primarily in Wisconsin, where all but 21 of the 155 retail grocery stores are located (8 are in Illinois and 13 are in Indiana). At January 1, 1994 the Company had 975 independent retail food stores and 682 convenience store customers. Sales by the Company to the independent retail food and convenience stores accounted for 55%, 56% and 56% of the Company's consolidated net sales and service fees for the fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991, respectively.
The Company's primary marketing objective is to be the principal source of supply to both its stockholder-customers and other independent retailers. In an 11 state area the Company serviced 155 retail grocery stores operated by its stockholder-customers, 975 independent retail stores, 682 convenience stores, and 19 Company-owned and operated retail stores during the fiscal year ended January 1, 1994. Of the Company's consolidated net sales and service fees for this period, $459,206,000 or 18.5% were attributable to five customers, with one customer accounting for $169,193,700 or 6.8% of such sales. Approximately 83% or 941 retail store customers purchased less than $3,000,000 each from the Company in the fiscal year ended January 1, 1994. 102 customers owned more than one retail food store, with one customer owning 13 retail food stores.
Services to Customers - --------------------- Stockholder-customers are provided, and independent retailers are offered, a variety of services to help them maintain a competitive position within the retail grocery industry. These services include pricing programs, ordering assistance, point-of-sale computer support, detailed reports of purchases, store engineering, retail accounting, group advertising, centralized bakery purchasing, merchandising, insurance, real estate services and retail training. The Company charges its stockholder-customers for some of these services, however, the income generated by such charges is not material. The foregoing services are also available to the Company's independent retailers on a fee basis.
Customer Loans, Guarantees and Leases - ------------------------------------- The Company 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, and has made various loans to these individuals and entities for such purposes.
Loans outstanding as of January 1, 1994 are as follows:
	 		 Outstanding 		 Number Balance Range of Range of 	 	 of Original as of Interest Maturity 		 Loans Amount Jan. 1,1994 Dates Dates 	 ----------- ----------- ----------- --------- --------- Inventory, Equipment Loans 141 $33,967,000 $25,750,400 Variable(1) 1994-2011
- -----------------
	 (1) Variable rates based on the Company's cost of borrowing.
The Company has guaranteed customer bank loans and customer leases amounting to $4,600,100 and $1,170,300, respectively at January 1, 1994.
The Company has a lease program under which it may, in its discretion, lease prime store sites and equipment for sublease to qualified customers. This enables customers to compete with large grocery store chains for choice sites at favorable rates. The Company presently has such real estate and equipment leases with lease terms from 1994 to 2018. Aggregate lease rentals received under this program were $18,985,200, $18,590,300 and $17,326,800 in 1993, 1992 and 1991, respectively.
Marketing and Distribution of Products - -------------------------------------- The Company generally distributes its various product lines by a fleet of 270 tractor cabs and 650 trailers and some products are shipped direct from manufacturers to customer locations. Most customers order for their stores on a weekly basis and receive deliveries from one to five days a week. Orders are generally transmitted directly to a warehouse computer center for prompt assembly and dispatch of shipments. The Company has retail counselors and merchandising specialists who serve its customers in a variety of ways, including the analysis of and recommendation on store facilities and equipment; development of programs and objectives for establishing efficient methods and procedures for receipt, handling, processing, checkout and other operations; informing customers on latest industry trends; assisting and dealing with training needs of customers; and, if the need arises, acting as liaison or problem solver between the Company and the customers. The retail counselors and specialists are assigned a specific geographic area and periodically visit each customer within their assigned area.
Terms of Sales and Bad Debt Experience - -------------------------------------- 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 sold on a prearranged "blank check with order" basis, and an account is 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. Delinquent accounts are charged interest at the rate of prime plus 5%, computed on a daily basis. During each of the past three fiscal years, the Company's bad debt expense has been less than .28% of sales. In 1993, 1992 and 1991, the Company's bad debt expense was $6,738,600, $5,772,900 and $4,030,300, respectively.
Roundy's stockholder-customers are required to maintain buying deposits with Roundy's equal to the greater of the average amount of a stockholder-customer's purchases over a two-week period of $20,000. The book value of Class A and Class B Common Stock of Roundy's owned by a stockholder-customer is credited against the buying deposit requirement, and Roundy's has a lien against all such stock to secure any indebtedness to Roundy's.
			 RETAIL FOOD STORES 			 ------------------ The Company operates three types of corporate stores (high volume- limited service retail "warehouse" stores, high value-limited assortment retail store and conventional retail stores). The high volume-limited service warehouse stores are designated as "Pick 'n Save" which generally offer, at discount prices, complete food and general merchandise lines to the customer, emphasizing higher demand items, with stores ranging in square footage from 34,000 to 65,000 square feet per store. The high value-limited assortment retail stores are designated as "Mor For Less" or "Price Less Foods" which emphasize low cost, high value lines to the customer, with stores ranging in square footage from 15,000 to 24,000 square feet per store. Conventional retail stores operated under the name "Cardinal Food Gallery" or "Buy Low Foods" generally emphasize full service to the customer at competitive prices. These stores range in square footage from 25,000 to 42,000 square feet. The number of stores operated by the Company at the end of its three most recent fiscal years was as follows:
Type of Store 1993 1992 1991 ------------- ---- ---- ---- High Value-Limited Assort- ment and High Volume-Limited Service Stores (Warehouse food stores...................... 14 14 19
Conventional Retail Stores....... 5 5 5
Sales of Company-operated stores during the three most recent fiscal years were $238,724,000, $263,189,000 and $304,676,000 for 1993, 1992 and 1991, respectively. The additional volume of wholesale sales generated by the retail stores owned and operated by the Company helps to reduce the overhead of the business and increases the Company's return to its stockholders.
				EMPLOYEES 				--------- At the end of fiscal year 1993, the Company had employed full-time 1,183 executive, administrative and clerical employees, 1,463 warehouse and processing employees and drivers and 563 retail employees and had employed 1,952 part-time employees. Substantially all of the Company's warehouse employees, drivers and retail employees are represented by unions, with contracts expiring in 1994 through 1998. The Company considers its employee relations to be normal. However, during the third quarter of 1991 the Company experienced a 12-week labor dispute at the Milwaukee Division. There have been no other significant work stoppages during the last five years. Substantially all full-time employees are covered by group life, accident, and health and disability insurance.
			 COMPETITION 			 ----------- The grocery industry, including the wholesale food distribution business, is characterized by intense competition and low profit margins. The shifting of market share among competitors is typical of the wholesale food business as competitors attempt to increase sales in any given market. In order to compete effectively, the Company must have the ability to meet rapidly fluctuating competitive market prices, provide a wide range of perishable and nonperishable products, make prompt and efficient delivery, and provide the related services which are required by modern supermarket operations.
The Company competes with a number of local and regional grocery wholesalers and with a number of major businesses which market their products directly to retailers, including companies having greater assets and larger sales volume than the Company. Roundy's stockholder- customers and the Company's corporate stores also compete 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 and its stockholder-customers to compete with larger grocery store chains.
In the Milwaukee area, the "Pick 'n Save" group, which consists of both independently and Company-owned stores, continues to be the market share leader with 47% as reported in the Milwaukee Journal Consumer Analysis Survey taken in the Fall of 1993.
In competing for customers, emphasis is placed on high quality and a wide assortment of product, low service fees and reliability of scheduled deliveries. The Company believes that the range and quality of other business services provided to retail store customers by the wholesaler are increasingly important factors, and that success in the wholesale food industry is dependent upon the success of the Company's customers who are also engaged in an intensely competitive, low profit margin industry.
ITEM 2.



ITEM 2. Properties. 	 ----------- The Company's principal executive offices are located in Pewaukee, Wisconsin. These offices are on an 85-acre site.
Wholesale activities are conducted by the Company from the following warehouses:
	 					 Approximate 						 Warehouse Location Products Distributed Square Footage - -------- -------------------- -------------- Wauwatosa, Wisconsin All product lines, 745,000 (O) 			 except nonfood products
Mazomanie, Wisconsin Dry groceries and 225,000 (L) 	 		 nonfood products
Westville, Indiana All product lines, 557,000 (L) 	 		 except nonfood products
Lima, Ohio All product lines, 460,000 (O) 	 		 except produce and 	 		 nonfood products
Eldorado, Illinois Dry groceries and 384,000 (O) 	 		 dairy products
Columbus, Ohio All product lines, 320,000 (L) 	 		 except produce
Parkersburg, West Virginia All product lines, 80,000 (O) 	 		 except produce
Van Wert, Ohio Nonfood products 115,000 (L)
Evansville, Indiana Frozen foods and 94,000 (O) 	 		 meat
South Bend, Indiana Frozen foods 84,000 (L)
Muskegon, Michigan All product lines, 215,000 (O) 	 		 except produce
	 		 O = Owned L = Leased
The Company is subject to regulation by the United States Food and Drug Administration and to certain state and local health regulations in connection with the operations of its facilities and its wholesale food business. The Company has not been subject to any actions brought under such regulations in the past five years.
Transportation - -------------- The Company's transportation fleet for distribution operations as of January 1, 1994 consisted of 270 tractor cabs, 650 trailers and 20 straight delivery trucks. In addition, the Company owns 60 automobiles and an airplane. Approximately 75% of the fleet is owned by the Company and the balance is leased.
Computers - --------- The Company owns most of its computer 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.
ITEM 3.

ITEM 3. Legal Proceedings. 	 ------------------ Roundy's 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.
ITEM 4.

ITEM 4. Submission of Matters to a Vote of Security Holders. 	 ---------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the 1993 fiscal year.
				PART II
ITEM 5.

ITEM 5. Market for the Registrant's Common Stock and Related 	 Stockholder Matters. 	 ---------------------------------------------------- The transfer of shares of Roundy's Class A Common Stock and Roundy's Class B Common Stock is restricted and there is no market for Roundy's stock. On January 1, 1994 an aggregate of 250 persons held shares of Roundy's Class A and/or Class B Common Stock. There is also no market for Roundy's Voting Trust Certificates and there were 83 holders of such Certificates on January 1, 1994. Except for patronage dividends (see Item 1, Business, and Note 3 to Roundy's financial statements), 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.
ITEM 6.

ITEM 6. Selected Financial Data. 	 ------------------------ The information required by this Item is incorporated by reference from the Registrant's Annual Report to Stockholders for the fiscal year ended January 1, 1994 (the "Annual Report") under the caption "Selected Financial Data."
ITEM 7.

ITEM 7. Management's Discussion and Analysis of Financial Conditions 	 and Results of Operations. 	 ------------------------------------------------------------ The information required by this Item is incorporated by reference from the Annual Report under the caption "Financial and Operational Review."
ITEM 8.


ITEM 8. Financial Statements and Supplementary Data. 	 -------------------------------------------- The required Financial Statements are incorporated by reference from the Annual Report; see response to Item 14(a)(1), of this report. The required financial statement schedules are filed with this report; see the response to Item 14(a)(2) of this report. Supplementary data is not furnished pursuant to Item 30(a)(5) of Regulation S-K.
ITEM 9.

ITEM 9. Changes in and Disagreements with Accountants on Accounting 	 and Financial Disclosure. 	 ----------------------------------------------------------- None.
			 PART III
ITEM 10.



ITEM 10. Directors, Executive Officers, Promoters and Control Persons 	 of the Registrant. 	 ------------------------------------------------------------ The Directors and Executive Officers of Roundy's are as follows:
	 		 Position(s) Held with Roundy's Name Age and Business Experience - ------------------ ---- ------------------------------ John R. Dickson 63 Chairman and Chief Executive Officer since 			 1993; President and Chief Executive 			 Officer 1986-1993; Director since 1986 	 		 (term expires 1995)
Gerald F. Lestina 51 President and Chief Operating Officer 	 		 since 1993; Vice President of Wisconsin 			 Region 1992-1993; President of Milwaukee 			 Division 1986-1993; Director since 1991 			 (term expires 1996)
Robert D. Ranus 53 Vice President and Chief Financial Officer 	 		 since 1987; Director since 1987 (term 			 expires 1994)
David C. Busch 45 Vice President of Administration since 	 		 1993; Vice President of Human Resources 			 1990-1993; Director of Human Resources 			 1988-1989
Edward G. Kitz 40 Vice President & Treasurer since 1989; 	 	 Vice President & Controller 1985-1988
Michael J. Schmitt 45 Vice President, Northern Region since 	 		 1992; Vice President and General Manager 			 of Milwaukee Division 1991; Vice President 			 of Retail Development 1990-1991; Director 			 of Retail Development 1988-1990
Robert G. Turcott 49 Vice President, Secretary and General 	 		 Counsel since 1987
Roger W. Alswager 45 Vice President of Real Estate and Develop- 	 		 ment since 1989; Director of Real Estate 			 and Development 1986-1988
Londell J. Behm 43 Vice President of Advertising since 1987
John M. Granger 47 Vice President of Management Information 	 		 Services since 1990; Vice President of 			 Management Information Systems, Richfood, 			 Inc. 1987-1990
Charles H. 51 Vice President, Logistics and Planning Kosmaler, Jr. since 1993; Vice President of Adminis- 	 		 trative Efficiencies 1992-1993; Vice 			 President and Financial Operating Officer 			 1990-1991; Vice President of Finance, 			 Milwaukee Division 1988-1989
Marion H. Sullivan 47 Vice President of Marketing since 1989; 	 		 President of Pick 'n Save 1989-1990; 			 Executive Vice President and Chief 			 Operating Officer, Pick 'n Save 1987-1988
Robert A. Farrell 40 Director since 1991 (term expires 1994); 	 		 President of Ultra Mart, Inc., Menomonee 			 Falls, Wisconsin
Gary N. Gundlach 50 Director since 1990 (term expires 1996); 	 		 President of G.E.M., Inc., McFarland, 		 Wisconsin
George C. Kaiser 61 Director since 1986 (term expires 1995); 	 		 Chairman and Chief Executive Officer, 		 Hanger Tight Company since 1988; Chief 			 Executive Officer, George C. Kaiser and 			 Co. since 1988; Director of The Baird 			 Funds, Inc. since 1992
George E. Prescott 46 Director since 1986 (term expires 1995); 	 		 President and Chief Executive Officer of 			 Prescott's Supermarkets, Inc., West Bend, 			 Wisconsin
Brenton H. Rupple 69 Director since 1993 (term expires 1996); 	 		 Retired Chairman of Robert W. Baird & Co., 			 Milwaukee, Wisconsin
Robert R. Spitzer 71 Director since 1991 (term expires 1994); 	 		 President Emeritus of Milwaukee School of 			 Engineering, Milwaukee, Wisconsin
Directors of Roundy's are elected by class and generally serve three- year terms; approximately one-third of the Board of Directors is elected annually. Of the nine members of the Board of Directors, three are currently Executive Officers of Roundy's (Messrs. Dickson, Lestina and Ranus) and three are stockholder-customers of Roundy's (Messrs. Farrell, Gundlach and Prescott). The terms of the Roundy's, Inc. Voting Trust provide that each year the Trustees will vote to elect one stockholder- customer, chosen by a plurality vote of the Voting Trust Certificate Holders, to serve a three-year term as Director; therefore, at any time there should be three "Retailer Directors" serving.
ITEM 11.

ITEM 11. Executive Compensation. 	 ----------------------- The following table shows the compensation for the past three years of Roundy's five most highly compensated executive officers performing policy making functions for Roundy's, including the Chief Executive Officer (the "Named Executive Officers").
	 	 SUMMARY COMPENSATION TABLE
	 					 Long-Term 			 			 Compensation 		 				 ------------ 						 Securities Name and Underlying All Other Principal Annual Compensation (A)Options Compensation Position Year Salary Bonus(1) (B)SARs (2) (3) - ------------------------------------------------------------------------------- 					 		(A) (B) 						 ----- ----- John R. Dickson 1993 $456,675 $60,000 6,000 - $25,621 Chairman and 1992 436,047 20,750 5,000 - 56,804 Chief Executive 1991 397,500 51,680 10,000 - - Officer
Gerald F. Lestina 1993 193,605 63,127 4,000 - 7,367 President and Chief 1992 170,682 34,059 2,500 - 6,699 Operating Officer 1991 119,000 15,833 5,000 - -
Robert D. Ranus 1993 181,125 62,500 3,000 - 9,527 Vice President and 1992 178,365 30,000 2,500 - 9,054 Chief Financial 1991 167,500 34,000 5,000 - - Officer
Terrance Kapron 1993 155,000 50,000 - - 6,734 Vice President of 1992 144,846 7,500 500 500 6,462 Operations 1991 125,000 20,400 1,000 1,000 -
Marion H. Sullivan 1993 116,000 22,936 - 500 7,324 Vice President of 1992 114,154 31,157 500 500 6,730 Marketing 1991 107,000 41,186 1,000 1,000 -
(1) Represents amounts paid in the year indicated for performance in the previous year. (2) Information for years ending prior to December 15, 1992 is not required to be disclosed in the "All Other Compensation" column. (3) The amounts shown in this column for 1993 and 1992, respectively, were derived from the following figures. Mr. Dickson: $13,390 and $44,640 representing the current dollar value of the benefit to Mr. Dickson of the premium paid by Roundy's for the split dollar life insurance policy covering Mr. Dickson; $9,982 and $9,982 - Roundy's paid term life insurance premium; $2,249 and $2,182 - Roundy's contribution to the 401(k) plan. Term life insurance premiums paid by Roundy's and Roundy's contributions to the 401(k) plan, respectively, for the other named executive officers are shown below. For 1993 - Mr. Lestina: $5,118 and $2,249. Mr. Ranus: $7,278 and $2,249. Mr. Kapron: $4,945 and $1,789. Mr. Sullivan: $5,584 and $1,740. For 1992 - Mr. Lestina: $4,883 and $1,816. Mr. Ranus: $7,161 and $1,893. Mr. Kapron: $4,920 and $1,542. Mr. Sullivan: $5,519 and $1,211.
The executive officers of Roundy's are each covered by $250,000 of executive equity life insurance. In addition, executives, except Mr. Dickson, are covered by a group life carve-out plan in the amount of three times salary, which is in lieu of the group term life insurance provided to substantially all nonunion employees under a Roundy's- sponsored Plan. Mr. Dickson is covered under a split dollar insurance program in the amount of $1,500,000 for a 10-year term of which Roundy's will pay 90% of the premium and Mr. Dickson 10% of the premium with Roundy's retaining all cash value in the policy unless Mr. Dickson exercises an option to purchase the cash value. The executive officers of Roundy's are also covered by an executive disability income insurance wrap-around plan which is in addition to the disability income insurance provided to substantially all nonunion employees under a Roundy's- sponsored Plan.
The Board of Directors of the Company has authorized the Company to guarantee the repayment of any loans incurred by senior executives and key employees for the purpose of exercising certain stock options granted by the Company. The guarantee is limited to a total aggregate principal amount of loans of $3,000,000. Under this authority, there is one guaranty outstanding at January 1, 1994 for a loan in the amount of $400,000 for John R. Dickson.
The Company has Deferred Compensation Agreements with certain executive officers, including Messrs. Dickson, Lestina, Ranus and Sullivan. The Deferred Compensation Agreements provide generally that upon the occurrence of a change in control of the Company, the Company shall pay to the employee deferred compensation equal to the sum of the employee's then current annual salary plus any bonus which may have been paid to the employee within the fiscal year of the Company preceding the change in control plus any other deferred compensation which may accrue to the employee for the fiscal year of the Company preceding the change in control under any deferred compensation plan or agreement plus the value of any health or life insurance benefits. The deferred compensation amount must be paid in a single payment six months following the date of occurrence of the change in control or, if employee should be terminated following the change in control, within thirty days of the date of such termination, whichever occurs earlier.
Roundy's has an employment agreement with John R. Dickson. This agreement has a three-year term ending June 30, 1995. The agreement states that as Chief Executive Officer, Mr. Dickson will receive an annual base salary of $445,000 for the first year. Thereafter, each July 1, this base salary shall be increased in an amount equal to the rate of inflation in the Consumer Price Index For All Urban Consumers (CPI-U) for all items for the previous 12 months ended December 31 of the preceding year, but in no event shall the increase be less than 3%. All or part of this salary may be deferred upon Mr. Dickson's request. Mr. Dickson is included in the bonus program for executives at an amount not to exceed 20% of his base salary, which may be deferred upon Mr. Dickson's request. The agreement also provides for certain health insurance, disability income and other benefits for Mr. Dickson and his wife, until their deaths, in addition to those provided to officers in general. During the term of his employment with Roundy's and for a period of one year following termination, either voluntary or involuntary, Mr. Dickson agrees not to compete with Roundy's within 150 miles of any company operated retail or wholesale facility operated at any time during the term of the agreement. Also under certain conditions specified in the agreement, Mr. Dickson may extend the Exercise Period of the stock options granted to him under the 1991 Stock Incentive Plan.
Mr. Dickson also has a Supplemental Pension Plan Agreement with Roundy's which provides additional retirement benefits of $15,625 per month for each month of Mr. Dickson's employment. The benefit may accrue for 96 months to July 1, 1995 at which time the maximum benefit will be $1,500 per month, or $18,000 per year. Mr. Dickson is currently 80% vested in these benefits pursuant to a schedule that results in 100% vesting on July 1, 1995.
Effective November 1, 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. 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. 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. In the event of a change in control of the Company, all options and SARs previously granted and not exercised, become exercisable.
The following tables provide information on the Named Executive Officers' option and SAR grants in 1993, option and SAR exercises in 1993 and the value of unexercised options at January 1, 1994.
			 SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, Roundy's, Inc. has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.
	 					ROUNDY'S, INC.
JOHN R. DICKSON ROBERT D. RANUS - ------------------------ ------------------------ By: John R. Dickson By: Robert D. Ranus (Principal Executive Officer) (Principal Financial 						Officer and Principal 						Accounting Officer)
Date: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons (constituting a majority of the Board of Directors) on behalf of the Registrant and in the capacities and on the dates indicated:
JOHN R. DICKSON GEORGE E. PRESCOTT - ------------------------ ------------------------ John R. Dickson George E. Prescott March 28, 1994 March 28, 1994 (Director) (Director)
GERALD F. LESTINA ROBERT D. RANUS - ------------------------ ------------------------ Gerald F. Lestina Robert D. Ranus March 28, 1994 March 28, 1994 (Director) (Director)
GEORGE C. KAISER GARY N. GUNDLACH - ------------------------ ------------------------ George C. Kaiser Gary N. Gundlach March 28, 1994 March 28, 1994 (Director) (Director)
BRENTON H. RUPPLE ROBERT R. SPITZER - ------------------------ ------------------------ Brenton H. Rupple Robert R. Spitzer March 28, 1994 March 28, 1994 (Director) (Director)
ROBERT A. FARRELL - ------------------------ Robert A. Farrell March 28, 1994 (Director)
	 		 INDEX TO EXHIBITS
Exhibit Description Page - -------- --------------- ----
4.12 Policies relating to Roundy's Issuance and Sales and 27 Redemptions/Repurchases of its stock (effective as of January 1, 1994).
4.13 Amendment No. 5 dated December 15, 1993 (effective 32 December 13, 1993) to the Credit Agreement dated March 6, 1989, between Roundy's, Inc. and The Chase Manhattan Bank, N.A. (as agent).
4.14 Note Agreement dated December 22, 1993 (effective 59 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.
10.4(a)Declarations page for renewal of Directors and 161 Officers Liability and Corporation Reimbursement Policy.
13 1993 Annual Report to Stockholders of Roundy's, Inc. 162
21 Subsidiaries of Roundy's, Inc. 210