As filed with the Securities and Exchange Commission on August 4, 1995AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1996.
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE KROGER CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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OHIO 31-0345740
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1014 VINE STREET
CINCINNATI, OHIO 45202
(513) 762-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------------
PAUL W. HELDMAN, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
THE KROGER CO.
1014 VINE STREET
CINCINNATI, OHIO 45202
(513) 762-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copies of all communications, including communications sent to the agent for
service, should be sent to:
ROBERT W. REEDER, ESQ.
SULLIVAN & CROMWELL
250 PARK AVENUE
NEW YORK, NEW YORK 10177
(212) 558-4000----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM
MAXIMUM AMOUNT OF
TITLE OF SECURITIES AGGREGATE REGISTRATION
TO BE AMOUNT TO BEREGISTERED OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICEPRICE(1) FEE
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Common Stock, par value 10,706,638
$1 per share........... shares $31.9375(1) $341,943,251(1) $117,911.47Debt Securities........................... $500,000,000(2) $172,413.79(3)
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Common Stock Purchase
Rights................. (2) (2) (2) (2)
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(1) PursuantEstimated solely for purposes of determining the amount of the
registration fee.
(2) In U.S. dollars or equivalent thereof.
(3) Includes $100,000,000 of Securities registered pursuant to Registration
No. 33-60946 carried forward pursuant to Rule 457(c), estimated solely for the purpose of calculating
the429. The registration fee
and based on the average high and low sales prices
reported on the New York Stock Exchange on August 3, 1995.
(2) Common Stock Purchase Rights will be issued in a number equalattributable to the shares
of Common Stock to be issued for no additional consideration and therefore
no registration feethose Securities is required. Prior to the occurrence of certain events,
the Common Stock Purchase Rights will not be exercisable or evidenced
separately from the Common Stock.
---------------$34,482.76.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED AUGUST 4, 1995
10,706,638 SHARESJUNE 25, 1996
THE KROGER CO.
COMMON STOCK
(PAR VALUE $1 PER SHARE)DEBT SECURITIES
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This Prospectus covers the issuance of a maximum of 10,706,638 shares of
common stock, par value $1.00 per share (the "Common Stock"), of
The Kroger Co. (the(together with its consolidated subsidiaries, the "Company")
undermay offer for sale from time to time, in one or more series up to $500,000,000
aggregate principal amount of its debt securities (the "Debt Securities") on
terms determined at the standby arrangements described under "Standby
Arrangements"time of sale. The specific designation, aggregate
principal amount, authorized denominations, purchase price, initial public
offering price, maturity, rate (which may be fixed or variable) and the reofferingtime of
payment of any Common Stock issued upon conversioninterest, any redemption terms or other specific terms and any
listing on a securities exchange of any Debt Securities offered, in respect of
which this Prospectus is being delivered, will be set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"), together with the terms
for the offering of the Company's outstanding 6 3/8% Convertible Junior Subordinated Notes due 1999
(the "Notes") into Common Stock by Goldman, Sachs & Co. (the "Purchaser") or
pursuant to such standby arrangements.
On August 4, 1995,Debt Securities. At the option of the Company, called for redemption on September 5, 1995
(the "Redemption Date") allDebt
Securities may be issued as Senior Debt Securities or as Subordinated Debt
Securities. This Prospectus may not be used to consummate the sale of its outstanding Notes atDebt
Securities unless accompanied by a redemption priceProspectus Supplement.
The Debt Securities may be sold in one or more transactions directly, through
agents designated from time to time, or through underwriters or dealers, which
may be a group of 104.554%underwriters represented by underwriters' representatives. If
any agents of the Company or any underwriters are involved in the sale of the
Debt Securities, the names of such agents or underwriters, the principal
amount, of Notes, plus accrued interest thereon from
June 1, 1995if any, to be purchased by the underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement. The
net proceeds to the Redemption Date (the "Redemption Price"). The Notes (or any
portion thereof which is $1,000Company from each sale will also be set forth in the
Prospectus Supplement. As used herein, Debt Securities shall include securities
denominated in United States dollars or, an integral multiple thereof) may be
converted into the Common Stock of the Company at a conversion price of $18.68
of principal amount of Notes per share of Common Stock or approximately 53.5
shares of Common Stock for each $1,000 principal amount of Notes at any time
prior to 5:00 p.m. Eastern Daylight Time on September 5, 1995 (the "Expiration
Time"). Cash will be paid in lieu of any fractional shares of Common Stock
issuable upon conversion of the Notes. No payment or adjustment to the
conversion price will be made on account of accrued interest on the Notes. ANY
NOTES NOT SO SURRENDERED FOR CONVERSION PRIOR TO THE EXPIRATION TIME WILL BE
REDEEMED FOR CASH ON THE REDEMPTION DATE.
The Company has made arrangements with the Purchaser pursuant to which the
Purchaser has agreed to purchase from the Company, at the option of the Company up to the number of shares (the "Shares") of Common Stock equal to the
positive difference, if any, between (i) the number of shares (the "Redemption
Shares") of Common Stock that would have been issuable upon conversion of the
Notes that are not surrendered for conversion on or prior to the Expiration
Time, minus (ii) (A) if on the Expiration Time the closing price of the Common
Stock is greater than $19.84, 535,332 shares of Common Stock or (B) if such
closing price is not greater than $19.84, zero, at a price per share of $19.34,
if there are fewer than 2,675,000 Redemption Shares, and $19.10 per share if
there are 2,675,000 or more Redemption Shares. The Purchaser has agreed to
remit to the Company not less than 50% of the amount, if any, by which the
aggregate net proceeds received by the Purchaser from sales of the Shares
exceeds the purchase price of the Shares. The Purchaser may also purchase Notesso
specified in the open marketProspectus Supplement, in any other currency or otherwise priorin composite
currencies or in amounts determined by reference to the Expiration Time and has agreed to
convert into Common Stock all Notes which it so purchases. See "Standby
Arrangements" for a description of the Purchaser's compensation and
indemnification arrangements with the Company.an index.
SEE "CERTAIN INVESTMENT CONSIDERATIONS""RISK FACTORS" AT PAGE 3 HEREIN FOR A DISCUSSION OF CERTAIN FACTORSINFORMATION RELEVANT TO AN
INVESTMENT IN THE SHARES OF COMMON STOCK. SO LONG AS THE MARKET
PRICE OF THE COMMON STOCK IS GREATER THAN $19.84 PER SHARE AT THE TIME OF
CONVERSION, A HOLDER OF NOTES WHO EXERCISES SUCH HOLDER'S CONVERSION RIGHTS
WILL RECEIVE COMMON STOCK WITH A MARKET VALUE, PLUS CASH IN LIEU OF ANY
FRACTIONAL SHARE, GREATER THAN THE AMOUNT OF CASH THE HOLDER WOULD OTHERWISE BE
ENTITLED TO RECEIVE UPON THE REDEMPTION OF THE NOTES, BEFORE DEDUCTING ANY
APPLICABLE TRANSFER TAXES.DEBT SECURITIES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THEHASTHE 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.
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GOLDMAN, SACHS & CO.
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The date of this Prospectus is AugustTHE DATE OF THIS PROSPECTUS IS , 1995.
On August 3, 1995, the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape was $32 per share. If a holder of $1,000
principal amount of Notes on that date had converted such principal amount,
such holder would have received Common Stock (and cash in lieu of a fractional
share) having a market value equal to $1,713, based on the closing price of
$32. The market price of the Common Stock received upon conversion is subject
to fluctuation, and the holder may incur various transaction costs if the
Common Stock is sold. So long as the market price of the Common Stock is
greater than $19.84 per share at the time of conversion, a holder of Notes who
exercises such holder's conversion rights will receive Common Stock with a
market value, plus cash in lieu of any fractional share, greater than the
amount of cash the holder would otherwise be entitled to receive upon the
redemption of the Notes, before deducting any applicable transfer taxes. See
"Redemption of the Notes and Alternatives to Redemption".
Prior to, on or after the Redemption Date, the Purchaser may offer shares of
Common Stock pursuant to this Prospectus directly to the public, at prices set
from time to time by it, including shares acquired through conversion of Notes
acquired by the Purchaser. Each such price when set will not exceed the greater
of the last sale or current offering price of the Common Stock on the New York
Stock Exchange plus the amounts of any concession to dealers, and an offering
price on any calendar day will not be increased more than once during such day.
In effecting such transactions, the Purchaser may realize profits or losses
independent of the compensation referred to under "Standby Arrangements". The
Purchaser may also make sales to dealers at prices which represent concessions
from the prices at which such shares are then being offered to the public. The
amount of such concessions will be determined from time to time by the
Purchaser. Any Common Stock so offered is offered subject to prior sale, when,
as and if received by the Purchaser, and subject to its right to reject orders
in whole or in part. This Prospectus does not constitute an offer to sell any
securities other than the Common Stock offered by the Purchaser.
The outstanding shares of Common Stock and any shares acquired through
conversion of Notes are listed, and the Shares will be listed, on the New York
Stock Exchange.
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IN CONNECTION WITH THIS OFFERING, THE PURCHASER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OR THE
COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
21996
AVAILABLE INFORMATION
The Kroger Co. (together with its consolidated subsidiaries, the "Company")
is subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed with the Commission can be inspected and copied at the
Commission's public reference facilities at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048. Copies
of such material can be obtained by mail from the Commission's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information also
can be inspected at the offices of the New York Stock Exchange, Inc. ("NYSE"),
20 Broad Street, New York, New York 10005.
The Company has filed a registration statement on Form S-3 (herein, together
with all amendments and exhibits, referred to as the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement and the exhibits filed as a part thereof. Statements contained
herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such references.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1994,30, 1995,
as amended.
2. Quarterly ReportsReport on Form 10-Q for the quartersquarter ended March 25, 1995
and June 17, 1995.23, 1996.
3. Reports on Form 8-K dated January 31, 1995,25, 1996 and April 18, 1995 and July
18, 1995.17, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Common Stock herebyDebt Securities shall be deemed to be
incorporated herein by reference and to be a part hereof from the respective
dates of filing of such documents.
Any statement contained in a document incorporated or deemed incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus and the Registration Statement of which it is a part to the
extent that a statement contained herein or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or such Registration Statement.
The Company will provide without charge to each person, including a
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to The Kroger Co.,
1014 Vine Street, Cincinnati, Ohio 45202, Attention: Paul W. Heldman, (513)
762-4000.
32
CERTAIN INVESTMENT CONSIDERATIONSRISK FACTORS
The following factors, in addition to other information set forth in this
Prospectus, should be considered carefully in evaluating the Company and its
business before acquiring any Common StockDebt Securities offered by this Prospectus.
The Indentures, as hereinafter defined, will not provide any protection to
the Holders of the Debt Securities in the event of a decline in credit quality
resulting from takeovers, recapitalizations or similar restructurings.
SUBSTANTIAL INDEBTEDNESS
At June 17, 1995,March 23, 1996, the Company had $3.7$3.6 billion of indebtedness outstanding,
including $999.5$1,117.4 million outstanding under the Senior Competitive Advance
and Revolving Credit Facility Agreement (the "Credit Agreement"), dated as of
July 19, 1994, as amended, among the Company and Chemical Bank and Citibank,
N.A., as administrative agents, and the lenders named therein (collectively,
the "Senior Lenders") (with an additional $626.9$438.1 million available for
borrowing under the Working Capital Facility thereof). This degree of leverage
has important consequences to investors in the Common Stock.Debt Securities. The Company
has significant interest payment and principal repayment obligations and the
ability of the Company to satisfy such interest and principal obligations is
subject to prevailing economic, financial and business conditions and to other
factors beyond the Company's control. A significant portion of the Company's
indebtedness bears interest at floating rates causing the Company's results of
operations to be sensitive to prevailing interest rates.
RESTRICTIONS IMPOSED BY THE CREDIT AGREEMENT AND OTHER AGREEMENTS
The Credit Agreement contains numerous restrictive covenants which, among
other things, restrict the ability of the Company to dispose of assets, incur
debt, pay dividends, make capital expenditures and make certain investments or
acquisitions and which otherwise restrict corporate activities. In addition,
the Company is required to maintain specified financial ratios and levels,
including fixed charge coverage, total debt and totalsenior debt ratios. The
ability of the Company to comply with such provisions depends on its future
performance, which is subject to prevailing economic, financial and business
conditions and to other factors beyond the Company's control.
The indentures relating to the Company's outstanding public debt securities
place limitations on, among other things, the Company's ability to incur
indebtedness, pay dividends, acquire assets and enter into leases and sale and
leaseback transactions. The indentures, however, do not contain any covenant
requiring the Company to meet or maintain on a day-to-day basis any specific
financial test or ratio.
RESTRICTION ON PAYMENT OF DIVIDENDS
As long as any amount remains outstanding under the Credit Agreement, the
Company may not (i) make or declare, or permit any subsidiary to make or
declare, any dividend or other distribution on account of any shares of any
class of capital stock, including the Common Stock, of the Company or (ii)
purchase, redeem or otherwise acquire, or permit any subsidiary to purchase,
redeem or otherwise acquire, any shares of capital stock, including the Common
Stock, of the Company, except for dividends on the Common Stock payable in
shares of Common Stock and the repurchase of odd-lot shares of Common Stock in
an amount not exceeding $10 million in aggregate and $2 million in any one
fiscal year. The indentures relating to the Company's outstanding public debt
securities also contain restrictions on the payment of dividends and the
repurchase of Common Stock. See "Dividends." Until the amounts outstanding
under the Credit Agreement are paid, and subject to the restrictions contained
in the indentures, the Company will not be able to pay a dividend on the
Common Stock.
NOTEHOLDER CONSIDERATIONS ON CONVERSION OR REDEMPTION
On August 3, 1995, the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape was $32 per share. If a holder of
$1,000 principal amount of Notes on that date had converted such principal
amount, such holder would have received Common Stock (and cash in lieu of a
fractional share) having a market value equal to $1,713, based on the closing
price of $32. The market price of the Common Stock received upon conversion is
subject to fluctuation, and the holder may incur various transaction costs if
the Common Stock is sold. So long as the market price of the Common Stock is
greater than $19.84 per share at the time of conversion, a holder of Notes who
4
exercises such holder's conversion rights will receive Common Stock with a
market value, plus cash in lieu of any fractional share, greater than the
amount of cash the holder would otherwise be entitled to receive upon the
redemption of the Notes, before deducting any applicable transfer taxes. See
"Redemption of the Notes and Alternatives to Redemption".
LABOR AGREEMENTS
The Company is party to more than 200 collective bargaining agreements with
local unions representing approximately 150,000 of the Company's employees.
Among the contracts that have expired or will expire in 19951996 are those
covering food clerks in Memphis, Houston, IndianapolisDallas, Toledo and Columbus.Denver. Typical agreements are 3 to
5 years in duration, and as such agreements expire, the Company expects to
negotiate with the unions and to enter into new collective bargaining
agreements. There can be no assurance, however, that such agreements will be
reached without work stoppage. A prolonged work stoppage affecting a
substantial number of stores could have a material adverse effect on the
Company's results of operations or financial position.
LEGAL PROCEEDINGS
There are pending against the Company various claims and lawsuits arising in
the normal course of business, including suits charging violations of certain
antitrust and civil rights laws. Some of these suits purport or have been
determined to be class actions and/or seek substantial damages. Any damages
that may be awarded in antitrust cases will be automatically trebled. Although
it is not
3
possible at this time to evaluate the merits of these claims and lawsuits, nor
their likelihood of success, the Company is of the opinion that any resulting
liability will not have a material adverse effect on the Company's results of
operations or financial position.
Fry's Food Stores of Arizona, Inc. ("Fry's"), a subsidiary of the Company,
is currently a defendant and cross-defendant in actions pending in the U.S.
District Court for the Southern District of Florida (the "Court") entitled
Harley S. Tropin v. Kenneth Thenen, et. al., No. 93-2502-CIV-MORENO and Walco
Investments, Inc., etet. al. v. Kenneth Thenen, et. al., No. 93-2534-CIV-MORENO.
The plaintiff and cross-claimants in these actions seek unspecified damages
against numerous defendants and cross-defendants, including Fry's. Plaintiffs
and cross-
claimantscross-claimants allege that a former employee of Fry's supplied false
information to third parties in connection with purported sales transactions
between Fry's and affiliates of Premium Sales Corporation or certain limited
partnerships. Claims have been alleged against Fry's for breach of implied
contract, aiding and abetting conspiracy, conversion and civil theft,
negligent supervision, fraud, and violations of 18 U.S.C. (S)(S) 1961 and
1962(d) and Chapter 895, Florida Statutes. Fry's believes that it has substantial meritorious defensesentered into an agreement
with Harley S. Tropin as trustee and receiver for the Premium Sales
Corporation and certain affiliates to settle all claims against Fry's. That
agreement is subject to the claims alleged against it,execution of a definitive settlement agreement and
Fry's intends to defend the litigation
vigorously.approval of the Court.
THE COMPANY
The Company was founded in 1883, incorporated in 1902, and maintains its
principal executive offices in Cincinnati, Ohio. The Company is the nation's
largest supermarket operator measured by total sales for 1994.1995. At December 31,
1994,30,
1995, the Company operated 1,3011,325 supermarkets in 24 states and 932694 convenience
stores in 1615 states. Additionally the Company had 125 franchised convenience
stores in 4 states. The Company also operates food processing facilities which
enable the Company's stores to offer quality, low-cost private label
perishable and non-perishable products, and an efficient warehouse and
distribution system which supplies products to its stores.
The Company's principal executive offices are located at 1014 Vine Street,
Cincinnati, Ohio 45202, and its telephone number at that address is (513) 762-
4000.
REDEMPTIONCONSOLIDATED RATIO OF NOTES AND ALTERNATIVESEARNINGS TO REDEMPTION
The Company has called for redemption at 5:00 p.m., Eastern Daylight time, on
September 5, 1995 (the "Redemption Date"), all of the Company's outstanding
Notes. As of August 3, 1995, $199,843,000 principal amount of Notes was
outstanding.FIXED CHARGES
The following alternatives are availabletable presents the consolidated ratio of earnings to holdersfixed
charges for the Company. For purposes of Notes:
1. Conversion into Common Stock. Convertdetermining the Notes (or anyratio of earnings to
fixed charges, "earnings" includes earnings before tax expense, cumulative
effect of change in accounting for income taxes and extraordinary loss, plus
fixed charges (excluding capitalized interest) and "fixed charges" consists of
interest (including capitalized interest) on all indebtedness, amortization of
deferred financing costs and that portion thereofof rental expense which is $1,000 or an integral multiple thereof) into the Common Stock of the Company
at a conversion pricebelieves to be representative of $18.68 of principal amount of Notes per share
of Common Stock or approximately 53.5 shares of Common Stock
5
for each $1,000 principal amount of Notes. Cash will be paid in lieu of any
fractional share in an amount equal to such fraction multiplied by the last
reported sale price per share of Common Stock, regular way, on the day prior to
the day of conversion or, if no such sale takes place on such day, the average
of the reported closing bid and asked prices, regular way, on the NYSE. No
payment or adjustment to the conversion price will be made on account of
accrued interest on the Notes. On August 3, 1995, the last reported sale price
of the Common Stock on the NYSE Composite Tape was $32 per share. On the basis
of such last reported sale price of the Common Stock, 53.5 shares of the Common
Stock had a value (including cash in lieu of any fractional share, determined
as set forth above) of $1,713. THE CONVERSION RIGHT EXPIRES AT 5:00 P.M.,
EASTERN DAYLIGHT TIME, ON SEPTEMBER 5, 1995.
The Notes are currently held in book-entry form through the facilities of The
Depository Trust Company (the "Depository"). Accordingly, in order for a
beneficial owner of an interest in a Note to exercise such person's conversion
rights, such person must comply with the procedures of the Depository, if a
participant in the Depository (a "participant"), or if such person is not a
participant in the Depository, through the procedures of the participant
through which such person owns its interest in the Notes, to effect a
conversion.interest.
QUARTERS ENDED FISCAL YEARS ENDED
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MARCH 23, MARCH 25, DECEMBER 30, DECEMBER 31, JANUARY 1, JANUARY 2, DECEMBER 28,
1996 1995 1995 1994 1994 1993 1991
(12 WEEKS) (12 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (53 WEEKS) (52 WEEKS)
---------- ---------- ------------ ------------ ---------- ---------- ------------
2.1 1.9 2.0 1.8 1.5 1.3 1.2
USE OF PROCEEDS
The Company will decide, in its sole discretion, all questions as toapply the form
of documents and the validity, eligibility (including time of receipt) and
acceptance for conversion by the Company of any Notes. Any defect or
irregularity in the surrender or delivery of any document in connection with
the conversion of Notes may result in such Notes not being converted into
Common Stock and, therefore, being redeemed on the Redemption Date.
SINCE IT IS THE TIME OF ACTUAL RECEIPT THAT DETERMINES WHETHER NOTES HAVE
BEEN PROPERLY PRESENTED FOR CONVERSION, SUFFICIENT TIME SHOULD BE ALLOWED FOR A
BOOK-ENTRY TRANSFER TO BE MADE, PRIOR TO 5:00 P.M., EASTERN DAYLIGHT TIME, ON
SEPTEMBER 5, 1995. NOTES NOT ACTUALLY RECEIVED FOR CONVERSION BY A BOOK-ENTRY
TRANSFER PRIOR TO SUCH TIME WILL BE REDEEMED AS SET FORTH BELOW.
2. Sale in Open Market. Sell the Notes in the open market. Holders of Notes
who wish to sell their Notes in the open market should consult with their own
advisors regarding if and when they should sell their Notes and the tax
consequences thereof. Holders may incur various fees and expenses in connection
with any such sale.
3. Redemption. Allow the Notes to be redeemed. Pursuant to the terms of the
Indenture between the Company and Chemical Bank, as Trustee, dated December 1,
1992, holders of the Notes will be entitled to receive upon redemption 104.554%
of the principal amount of Notes, plus accrued interest thereon from June 1,
1995 to the Redemption Date (the "Redemption Price"). The holder of $1,000
principal amount of Notes redeemed at the Redemption Price would receive $1,062
in cash. Payment of the Redemption Price will be made by Chemical Bank, as
Trustee as redemption agent (the "Redemption Agent"), on the Redemption Date.
On and after the Redemption Date, interest will cease to accrue and holders of
Notes will not have any rights as such holders other than the right to receive
the Redemption Price upon such surrender for redemption.
NOTES NOT ACTUALLY RECEIVED FOR CONVERSION BY BOOK-ENTRY TRANSFER PRIOR TO
5:00 P.M., EASTERN DAYLIGHT TIME, ON SEPTEMBER 5, 1995, WILL BE REDEEMED AS SET
FORTH ABOVE ON THE REDEMPTION DATE.
6
Based on the above-stated last reported sale price of the Common Stock on
August 3, 1995, the market value of the Common Stock into which $1,000
principal amount of Notes is convertible (including cash in lieu of any
fractional share, determined as set forth above) would be $1,713, which amount
is higher than the amount ($1,062) to be received upon redemption. The market
price of the Common Stock received upon conversion, however, is subject to
fluctuation, and the holder may incur various transaction costs if such Common
Stock is sold. Holders of Notes are urged to obtain current market quotations
for the Common Stock.
SO LONG AS THE MARKET PRICE OF THE COMMON STOCK IS GREATER THAN $19.84 PER
SHARE AT THE TIME OF CONVERSION, A HOLDER WHO CONVERTS HIS OR HER NOTES WILL
RECEIVE COMMON STOCK AND CASH IN LIEU OF ANY FRACTIONAL SHARE (DETERMINED AS
SET FORTH ABOVE) WITH A MARKET VALUE GREATER THAN THE AMOUNT OF CASH RECEIVABLE
UPON THE REDEMPTION OF THE NOTES.
USE OF PROCEEDS
The net proceeds from the sale of the Common StockDebt Securities
initially to the Purchaser pursuant
to the arrangements described under "Standby Arrangements" will be used to
redeem any Notes not surrendered for conversion.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is listed on the NYSE. The following table sets
forth, for each period shown, the range of high and low sale prices of the
Common Stock on the NYSE:
COMMON STOCK
PRICE RANGE
---------------
HIGH LOW
------- -------
1993
1st Quarter............................................... $19 1/2 $14
2nd Quarter............................................... 19 5/8 16 5/8
3rd Quarter............................................... 21 3/4 16 1/4
4th Quarter............................................... 20 7/8 17 1/2
1994
1st Quarter............................................... 25 7/8 19 3/8
2nd Quarter............................................... 25 3/8 21 1/8
3rd Quarter............................................... 26 7/8 23
4th Quarter............................................... 26 7/8 21 3/4
1995
1st Quarter............................................... 27 7/8 23 3/8
2nd Quarter............................................... 28 25
3rd Quarter (through August 3, 1995)...................... 33 26 1/2
On August 3, 1995, the last reported sale price for the Company's Common
Stock on the NYSE was $32 per share.
7
DIVIDENDS
As long as any amount remainsrepay amounts outstanding under the Credit Agreement, the
Company may not (i) declareFacility (as hereafter
defined) and thereafter, from time to time will use Facility borrowings to
repurchase or make, or permit any subsidiary to declare or
make, any dividend or other distribution on accountredeem outstanding indebtedness of any class of shares of
its capital stock, including the Common Stock, or (ii) purchase, redeem or
otherwise acquire, or permit any subsidiary to purchase, redeem or otherwise
acquire, shares of its capital stock, including the Common Stock, except for
dividends of Common Stock on its outstanding shares of Common Stock and
repurchases of odd-lot shares of its Common Stock for a maximum aggregate value
of $10 million, not to exceed $2 million in any fiscal year.
The indentures for the Company's outstanding public debt contain covenants
restricting the payment of dividends on, or the redemption or repurchase of,
capital stock by the Company, or any subsidiary.for other
general corporate purposes.
4
DESCRIPTION OF THE CREDIT AGREEMENT
GENERAL
The following constitutes only a summary of the principal terms and
conditions of the Credit Agreement, and is qualified in its entirety by the
actual terms of the Credit Agreement, which was filed as an exhibit to the
Company's Form 8-K, dated July 20, 1994 and thereafter was amended on July 20,
1995.1995, on November 17, 1995, on April 16, 1996 and on June 14, 1996. Whenever
particular provisions or defined terms of the Credit Agreement are referred
to, such provisions or defined terms are incorporated herein by reference as
part of the statements made herein. For purposes of this description of the
Credit Agreement, the term "Company" refers only to The Kroger Co. and does
not include The Kroger Co.'s consolidated subsidiaries.
The Credit Agreement provides for a seven-year $1.750 billion Senior Competitive
Advance and Revolving Credit Facility Agreement (the "Facility").
COMMITMENT REDUCTIONS
The Credit Agreement expires on July 20, 2002 and is not otherwise subject
to amortization.
INTEREST RATES
Borrowings under the Facility bear interest at the option of the Company at
a rate equal to either (i) the highest, from time to time, of (A) the average
of the publicly announced prime rate of Chemical Bank and Citibank, N.A., (B)
1/2% over a moving average of secondary market morning offering rates for 3
month certificates of deposit adjusted for reserve requirements, and (C) 1/2%
over the federal funds rate (the "Base Rate") plus the Applicable Percentage
or (ii) an adjusted Eurodollar rate based upon the London Interbank Offered
Rate ("Eurodollar Rate") plus the Applicable Percentage. The Applicable
Percentage is zero for the Base Rate. The Applicable Percentage for Eurodollar
Rate advances is 0.3125% as of July 21, 1995.March 23, 1996.
COLLATERAL
The Company's obligations under the Facility areoriginally were collateralized
by a pledge of a substantial portion of the Company's and certain of its
Subsidiaries' assets, including substantially all of the Company's and such
Subsidiaries' inventory and equipment and the stock of all Subsidiaries. SuchSubsidiaries, which
collateral also securessecured the Company's obligations under its Secured
Debentures and also may
serve as security for other Senior Secured Debt.Debentures. On April 29, 1996, pursuant to the terms of the Credit Agreement,
the Company elected to release all Collateral.
PREPAYMENT
The Company may prepay the Facility, in whole or in part, at any time,
without a prepayment penalty.
8
CERTAIN COVENANTS
The Credit Agreement contains covenants which, among other things, (i)
restrict investments, capital expenditures, and other material outlays and
commitments relating thereto, (ii) restrict the incurrence of debt, including
the incurrence of debt by subsidiaries, (iii) restrict dividends and payments,
prepayments, and repurchases of capital stock, (iv) restrict mergers and
acquisitions and changes of business or conduct of business, (v) restrict
transactions with affiliates, (vi) restrict certain sales of assets, (vii)
restrict changes in accounting treatment and reporting practices except as
permitted under generally accepted accounting principles, (viii) require the
maintenance of certain financial ratios and levels, including fixed charge
coverage ratios, total debt ratios and totalsenior debt ratios and (ix) require the
Company to maintain interest rate protection providing that at least 50% of
the Company's indebtedness for borrowed money is maintained at a fixed rate of
interest. See "Certain Investment Considerations"Risk Factors -- Restrictions Imposed by the Credit Agreement
and Other Agreements."
The following is a summary of certain of the covenants contained in the
Credit Agreement.
5
Maintenance of Fixed Charge Coverage Ratio. The Company is required to
maintain a ratio, for the Rolling Period in respect of each Fiscal Quarter,
determined as of the last day of each Fiscal Quarter of (i) the sum of (a)
Consolidated EBITDA for such Rolling Period and (b) Consolidated Rental
Expense for such Rolling Period to (ii) the sum of (a) Consolidated Cash
Interest Expense for such Rolling Period and (b) Consolidated Rental Expense
for such Rolling Period of not less than 1.7:1.
The Company's ratio of Consolidated EBITDA Available for Fixed Charges to
Consolidated Fixed Charges for the Rolling Period ended June 17, 1995March 23, 1996 was
2.3:2.46:1.
Maintenance of Net Total Debt/Consolidated EBITDA Ratio. TheFollowing the
release of the security interest in all the Collateral the Company is required
to maintain a ratio, determined as of the last day of each Fiscal Quarter for
the Rolling Period ending on such day, of (i) Net Total Debt on such day to
(ii) the sum of (a) Consolidated EBITDA for such Rolling Period and (b) from
and after the making of certain investments or acquisitions, the Acquired
EBITDA for any Acquired Entity so invested in or acquired with respect to any
Acquired Entity Fiscal Quarter ending during such period,Rolling Period of not moreno greater
than the ratio set
forth below opposite such Fiscal Quarter.
FISCAL QUARTER RATIO
-------------- ----------
2nd Fiscal Quarter 1995....................................... 4.5 to 1.0
3rd Fiscal Quarter 1995....................................... 4.5 to 1.0
4th Fiscal Quarter 1995....................................... 4.4 to 1.0
1st Fiscal Quarter 1996....................................... 4.4 to 1.0
2nd Fiscal Quarter 1996....................................... 4.4 to 1.0
3rd Fiscal Quarter 1996....................................... 4.4 to 1.0
4th Fiscal Quarter 1996....................................... 4.3 to 1.0
1st Fiscal Quarter 1997....................................... 4.3 to 1.0
2nd Fiscal Quarter 1997....................................... 4.3 to 1.0
3rd Fiscal Quarter 1997....................................... 4.3 to 1.0
4th Fiscal Quarter 1997....................................... 4.2 to 1.0
1st Fiscal Quarter 1998....................................... 4.2 to 1.0
2nd Fiscal Quarter 1998....................................... 4.2 to 1.0
3rd Fiscal Quarter 1998....................................... 4.2 to 1.0
4th Fiscal Quarter 1998....................................... 4.1 to 1.0
1st Fiscal Quarter 1999....................................... 4.1 to 1.0
2nd Fiscal Quarter 1999....................................... 4.1 to 1.0
3rd Fiscal Quarter 1999....................................... 4.1 to 1.0
4th Fiscal Quarter 1999....................................... 4.0 to 1.0
and thereafter
3.65 to 1.
The Ratio at June 17, 1995March 23, 1996 was 3.32:3.05:1.
9
Maintenance of Net Senior Debt/Consolidated EBITDA Ratio. Following the
release of the security interest in all the Collateral the Company is required
to maintain a ratio, determined as of the last day of each Fiscal Quarter for
the Rolling Period ending on such day, of (i) Net Senior Debt to (ii) the sum
of (a) Consolidated EBITDA for such Rolling Period and (b) from and after the
making of certain investments or acquisitions, the Acquired EBITDA for any
Acquired Entity so invested in or acquired with respect to any Acquired Entity
Fixed Quarter ending during such Rolling Period of no greater than 3.0 to 1.
This covenant shall cease to be applicable upon achievement of the Investment
Grade Rating Condition.
The Ratio at March 23, 1996 was 2.19:1.
Interest Rate Protection. The Company is required to obtain interest rate
protection providing that at least 50% of the Company's indebtedness for
borrowed money is maintained at a fixed rate of interest.
Debt. The Company may not create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist any Debt except, among other things,
(i) Debt under the Credit Agreement; (ii) certain designated Debt existing on
July 19, 1994; (iii) Debt secured by permitted liens; (iv) trade accounts
payable in the ordinary course of business and accounted for as current
accounts payable; (v) Commercial Paper issued by the Parent Borrower; (vi)
Debt of the Parent Borrower incurred to prepay, redeem, defease or repurchase
existing Debt of the Parent Borrower or any of the Subsidiaries so long as (a)
such Debt so incurred is subordinated in right of payment to, or pari passu in
right of payment with, the Debt being prepaid, redeemed, defeased or
repurchased and (b) the average life to maturity of such Debt so incurred is
no earlier than the date that is three months following the Termination Date;
provided, however, that up to $625,000,000 of such Debt so incurred may have
an average life to maturity shorter than the date that is three months
following the Termination Date so long as (A) such Debt does not mature before
June 15, 1999, and (B) such Debt is incurred to prepay, redeem, defease or
repurchase Debt that matures earlier than the date that is three months
following the Termination Date;Date and of the $625,000,000 of such Debt, up to
$150,000,000 (or $300,000,000 at any time following the occurrence of an
Investment Grade Rating Condition) may be senior in right of payment to the
Debt being prepaid, redeemed, defeased or repurchased provided that such Debt
is unsecured; (vii) Capital Lease Obligations; (viii) Debt incurred in
connection with the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; (ix)
Debt incurred or assumed in connection with any investment or acquisition
permitted by the Credit Agreement; (x) certain debt owed to the Parent
Borrower by Subsidiaries; (xi) Debt secured by mortgages on (a) any
6
property purchased, acquired or developed between January 21, 1992, and the
Closing Date or (b) any property purchased, acquired or developed with Real
Estate Capital Expenditures, in each case so long as the aggregate amount of
the Debt secured by such mortgages does not exceed 100% of the Fair Market
Value (determined at the time of such transaction) of such property; (xii)
Debt incurred by the Parent Borrower or any of its Subsidiaries in connection
with any Receivables Securitization; (xiii) Debt incurred by the Parent
Borrower in connection with Interest Rate Agreements; (xiv) Debt of the Parent
Borrower not referred to in paragraphs (i) through (xiii) above or in
paragraph (xv) below so long as the average life to maturity of such Debt is
no earlier than the date that is three months following the Termination Date;
and (xv) Debt of the Parent Borrower or any Subsidiary not referred to in
paragraphs (i) through (xiv) above in an aggregate amount outstanding at any
time not in excess of $100,000,000.
Capital Expenditures. ThePrior to the occurrence of the Investment Grade Rating
Condition the Company may not make, and will not permit any of its
Subsidiaries to make, any Capital Expenditures in excess of $450 million$650,000,000 (the
"Base Capital Expenditure Amount") for each Fiscal Year; provided, however,
that if in any Fiscal Year the amount specified exceeds the amount of Base
Capital Expenditures actually made by the Company and its Subsidiaries in such
Fiscal Year, the Company and itits Subsidiaries shall be entitled to make
additional Capital Expenditures in the next succeeding Fiscal Year equal to
45% of the amount of such excess;excess not to exceed 45% of the Base Capital Expenditure
Amount; provided further, however, that (i) the Company is permitted to make additional Capital
Expenditures not to exceed $200 million per year for the development or
acquisition of real property and (ii) the Company and its Subsidiaries shall
be permitted to make additional Capital Expenditures in any Fiscal Year
("Additional Capital Expenditures") in an aggregate amount with respect to the
Parent Borrower and its Subsidiaries equal to a percentage of Consolidated
Free Cash Flow for the immediately preceding Fiscal Year, such percentage with
respect to any Fiscal Year to be equal to (a) 100% in the event that the
Parent Borrower's Consolidated Ratio of Net Total Debt to Consolidated EBITDA
for the immediately preceding Fiscal Year is 3.0 to 1 or lower; (b) 75% in the
event that the Parent Borrower's Consolidated Ratio of Net Total Debt to
Consolidated EBITDA for the immediately preceding Fiscal Year is 3.5 to 1 or
lower; and (c) 50% in the event that the Parent Borrower's Consolidated Ratio
of Net Total Debt to Consolidated EBITDA for the immediately preceding Fiscal
Year is lower than the amount set forth below with respect to such preceding
Fiscal Year:
10
PRECEDING
FISCAL RATIO OF NET TOTAL DEBT TO CONSOLIDATED
FISCAL YEAR EBITDA FOR IMMEDIATELY PRECEDING FISCAL YEAR
--------------------- --------------------------------------------
1994...................... 4.30 to 1.00
1995...................... 4.20 to 1.00
1996...................... 4.10 to 1.00
1997...................... 4.00 to 1.00
1998...................... 3.90 to 1.00
1999...................... 3.80 to 1.00
2000...................... 3.80 to 1.00
The entire amount of Additional Capital Expenditures that are permitted to
be made in any Fiscal Year but are not made in such Fiscal Year may be carried
forward to, and made in the two succeeding Fiscal Years.
Dividends. Under the Credit Agreement, the Company is restricted from making
or declaring cash dividends on the Common Stock.
See "Certain Investment
Considerations -- Restrictions on Payment of Dividends."
CERTAIN DEFINITIONS
"Applicable Percentage" means at any time, with respect to Adjusted
Eurodollar Rate Advances, the Facility Fees, Standby Letters of Credit and
Documentary Letters of Credit, the applicable
7
percentage set forth below based upon (a) the Senior Debt Ratings at such time
or (b) the Applicable Percentage Ratio at such time:
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
----------- ----------- ----------- ---------- ---------- -----------
Moody's/S&P or.......... Baa1 or Baa2 and Baa2 or BBB Baa3 and Baa3 or Lower than
better or BBB BBB- BBB- or equal to
BBB+ or Ba1 and
better lower than
or equal to
BB+
Applicable Percentage 5.25 to 1.0 4.75 to 1.0 4.0 to 1.0 3.5 to 1.0 3.0 to 1.0 Lower than
Ratio...........Ratio.................. or greater or greater or greater or greater or greater 3.0 to 1.0
(spreads expressed in basis points per annum)
Adjusted Eurodollar Rate
Advances............... 12.5 20.0 22.5 31.25 40.0 50.0
The Applicable Percentage for Base Rate Advances is zero.
The Applicable Percentage as of July 21, 1995March 23, 1996 is determined in accordance
with Level 4.
"Applicable Percentage Ratio" means the ratio (determined as of the last day
of each Fiscal Quarter for the Rolling Period ending on such day) of (i)
Consolidated EBITDA for such Rolling Period to (ii) Consolidated Total
Interest Expense for such Rolling Period.
"Capital Expenditures" of any Person means, for any period, all expenditures
of such Person during such period (whether paid in cash or accrued as
liabilities during such period) which, in conformity with generally accepted
accounting principles, are required to be included in or reflected by the
property, plant or equipment or similar fixed asset accounts on the balance
sheet of such Person and certain investments permitted under the Credit
Agreement, including equipment which is purchased simultaneously with the
trade-in of existing equipment owned by such Person to the extent of the gross
amount of the purchase price of such purchased equipment less the book value
of the equipment being traded in at such time, but excluding, among other
things, (i) expenditures made in connection with the
11
replacement or
restoration of assets, to the extent such replacement or restoration is
financed out of (a) insurance proceeds paid on account of the loss of or
damage to the assets so replaced or restored or (b) awards of compensation
arising from the taking by condemnation or eminent domain of the assets so
replaced, (ii) any portion of Capital Lease Obligations which is capitalized
on such person's balance sheet and (iii) interest capitalized during
construction.
"Consolidated Cash Interest Expense" means, for any period, interest expense
net of interest income, whether paid or accrued (including the interest
component of Capital Lease Obligations) on all debt of the Company and its
Subsidiaries on a Consolidated basis for such period, including, without
limitation (i) cash dividends paid in respect of preferred stock issued by the
Company, (ii) commissions and other fees and charges payable in connection
with Letters of Credit, (iii) net payments payable in connection with certain
interest rate protection contracts and (iv) interest capitalized during
construction, but excluding, however, (v) interest expense not payable in cash
(including amortization of discount and deferred debt expenses), all as
determined in conformity with GAAP.
"Consolidated EBITDA" means, for any period, on a Consolidated basis for the
Company and its Subsidiaries, the sum for such period of (i) Consolidated Net
Income, plus (ii) depreciation and amortization expense, plus (iii) interest
expense net of interest income, plus (iv) federal and state income taxes as
determined in accordance with GAAP, plus (v) extraordinary losses (and any
unusual losses in excess of $1 million$1,000,000 arising in or outside of the ordinary
course of business not included in
8
extraordinary losses determined in accordance with GAAP which have been
included in the determination of Consolidated Net Income), plus (vi) LIFO
charges included in the calculation of Consolidated Net Income, minus (vii)
extraordinary gains (and any unusual gains in excess of $1 million$1,000,000 arising in
or outside of the ordinary course of business not included in extraordinary
losses determined in accordance with GAAP which have been included in the
determination of Consolidated Net Income), and minus (viii) LIFO credits that
have been included in the calculation of Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income of the
Company and its Consolidated Subsidiaries for such period, before the paymentpayments
of dividends on all capital stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the aggregate rental
expense (including any contingent or percentage rental expense) of the Parent
Borrower and its Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance charges) in respect
of all rent obligations under all operating leases for real or personal
property minus any rental income of the Parent Borrower and its Subsidiaries
on a Consolidated basis for such period, all as determined in conformity with
GAAP.
"Consolidated Total Interest Expense" means, for any period, interest
expense net of interest income, whether paid or accrued (including the
interest component of Capital Lease Obligations) on all Debt of the Parent
Borrower and its Subsidiaries on a Consolidated basis for such period,
including (i) commissions and other fees and charges payable in connection
with Letters of Credit, (ii) net payments payable in connection with all
Interest Rate Agreements, (iii) interest capitalized during construction and
(iv) cash dividends paid in respect of any preferred stock issued by the
Parent Borrower, but excluding, however, amortization of deferred debt
expense, all as determined in conformity with GAAP.
"Debt" of any Person means, without duplication, (i) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property
or services (including all obligations, contingent or otherwise, of such
Person in connection with the Letters of Credit, Auction Bid LOCs, letter of
credit facilities, acceptance facilities or other similar facilities and in
connection with any agreement to purchase, redeem, exchange into debt
securities, convert into debt securities or otherwise acquire for value (a)
any capital stock of such Person or (b) any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding), (ii) all
obligations of such Person evidenced by bonds, notes, 12
debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all Capital Lease Obligations of
such Person, (v) all Debt referred to in clause (i), (ii), (iii) or (iv) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any lien, security interest or
other charge or encumbrance upon or in property (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt, (vi) all Guaranteed Debt of
such Person and (vii) any preferred stock of such Person that is classified as
a liability on such Person's Consolidated balance sheet.
"Funded Debt" means the Debt resulting from the Advances under the Credit
Agreement and all other Debt of the Parent Borrower or its Subsidiaries that
(on the date of its incurrence or issuance) matures more than one year from
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of the debtor, to a date more than one
year from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year from such date (in each case including amounts of Funded Debt
required to be paid or prepaid within one year from the date of calculation).
9
"Guaranteed Debt" of any Person means all Debt referred to in clause (i),
(ii), (iii), (iv) or (v) of the definition of the term "Debt" in this Section
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to
pay or purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of
such Debt against loss, (iii) to supply funds to, or in any other manner
invest in, the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, but excluding
leases at a rental at least as favorable to the Parent Borrower as could be
obtained in an arm's-length transaction with a party that is not an Affiliate.
"Investment Grade Rating Condition" means that the Senior Debt Ratings of
the Company's Debt are BBB- or better in the case of Standard & Poor's
Corporation or Baa3 or better in the case of Moody's Investors Service, Inc.
"Net Senior Debt" means, on a Consolidated basis for the Company and its
Subsidiaries as of any date, Net Total Debt as of such date minus the sum as
of such date of (i) the aggregate outstanding amount of any Subordinated Debt
of the Company or any of the Subsidiary Guarantors, (ii) the capitalized
amount of any Capitalized Lease Obligations of the Company or any of its
Subsidiaries and (iii) the aggregate outstanding face amount of any preferred
stock of the Company that is classified as a liability on the Company's
Consolidated balance sheet.
"Net Total Debt" means, on a Consolidated basis for the Parent BorrowerCompany and its
Subsidiaries as of any date, (i) the sum as of such date of (a) the aggregate
outstanding amount of Funded Debt including current maturities thereof, (b)
the aggregate outstanding amount of Commercial Paper and (c) the aggregate
outstanding amount of Subsidiary Commercial Paper minus (ii) the sum as of
such date of (a) the aggregate outstanding face amount of letters of credit
included in Funded Debt, (b) the aggregate outstanding amount of Debt
represented by certain investments made by the Parent Borrower and (c) the
aggregate amount of Permitted Investments in excess of $100 million.
"Rolling Period" means, in respect of any Fiscal Quarter, such Fiscal
Quarter and the three preceding Fiscal Quarters.
"Subordinated Debt" means any Indebtedness which is subordinate to the
Obligations under the Credit Agreement.
EVENTS OF DEFAULT
The Credit Agreement provides that various events shall be "Events of
Default," upon the occurrence of which the Senior Lenders may suspend or cease
making loans or terminate the Facility and declare all amounts outstanding
under the Credit Agreement immediately due and payable, as described below.
Events of Default include, among other things, (i) failure to pay, when due,
any principal payable under the Credit Agreement or the failure to pay any
interest or other amount under
13
the Credit Agreement after the same becomes due and such default continues
unremedied for three business days after written notice from either
Administrative Agent, (ii) material breach of any representation or warranty
in the Credit Agreement or related documents, (iii) failure to comply with any
of the covenants of the Credit Agreement or related documents after specified
grace periods, (iv) failure to pay, or default in performance permitting
acceleration under, certain of the Company's other indebtedness, (v)
bankruptcy or insolvency of the Company or a Subsidiary or failure to
discharge certain judgments of the Company or any Subsidiary, (vi) the Credit
Agreement or security interests thereunder in Collateral with a value in
excess, individually or in the aggregate, of $30,000,000 ceasing to be in full
force and effect, (vii) certain events occurring with respect to the Company's
pension plans potentially giving rise to liability under ERISA, and (viii) the
occurrence of a "Change of Control" of the Company. A "Change of Control" is
defined in the Credit Agreement as (A) the acquisition by any Person or group
(other than the trusts for the Company's employee benefit plans) of securities
representing 20% or more of the voting Power of the Company or (B) during any
24-month period,
10
individuals who were directors of the Company at the beginning of such period
(together with new directors approved by such directors) ceasing to constitute
at least 75% of the Board of Directors of the Company.
The Credit Agreement provides that upon the occurrence of an Event of
Default, the Administrative Agents (i) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Company declare the
obligations of each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, (ii) shall at the request, or may with the
consent, of any Issuing Bank or of the Majority Lenders by notice to the
Company declare the obligation of any Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (iii)
shall at the request, or may with the consent, of the Majority Lenders declare
the Advances, all interest thereon and all other amounts payable under the
Credit Agreement to be forthwith due and payable, whereupon the Advances, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest, prior notice of intention to
accelerate or any other notice, all of which are expressly waived by the
Company.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain anticipated United States
federal income tax consequences to a holder of Notes of the conversion,
redemptionDESCRIPTION OF DEBT SECURITIES
Offered Debt Securities (as defined below) will constitute either senior or
sale of the Notes. It deals only with Notes held as capital
assets and not with special classes of holders, such as dealers in securities
or currencies, banks, tax-exempt organizations, life insurance companies,
persons that hold Notes that are a hedge or that are hedged against currency
risks or that are part of a straddle or conversion transaction, persons that
are not United States holders or persons whose functional currency is not the
U.S. dollar. A United States holder is a beneficial owner that is (i) a citizen
or resident of the United States, (ii) a domestic corporation or (iii)
otherwise subject to United States federal income taxation on a net income
basis in respect of a Note. The summary is based on the Internal Revenue Code
of 1986, as amended (the "Code"), its legislative history, existing and
proposed regulations thereunder, published rulings and court decisions, all as
currently in effect and all subject to change at any time, perhaps with
retroactive effect. The Company has not requested a ruling from the Internal
Revenue Service (the "Service") with respect to the matters discussed herein.
HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
CONSEQUENCES, IN THEIR PARTICULAR CIRCUMSTANCES, UNDER THE CODE AND THE LAWS OF
ANY OTHER TAXING JURISDICTION, OF THE CONVERSION, SALE OR REDEMPTION OF THE
NOTES.
CONVERSION
In general, no gain or loss should be recognized by a holder upon the
conversion of a Note into Common Stocksubordinated debt of the Company except to the extent of
any gain realized upon the receipt of cash in
14
lieu of fractional shares. A holder's basis in the Common Stock received on
conversion (including any fractional shares, which are deemed received and
immediately disposed of) generally will equal the holder's basis at the time of
conversion in the Note converted. A holder's holding period for the Common
Stock received on conversion will include the holder's holding period of the
Note converted.
SALE OR REDEMPTION
In general, the sale or redemption of a Note will result in the recognition
of gain or loss to a holder in an amount equal to the difference between (i)
the cash received in exchange for the Note less the amount attributable to
accrued interest not previously included in income (which amount is taxable as
ordinary income) and (ii) the holder's adjusted tax basis in the Notes. Except
as discussed below under "Market Discount," such gain or loss will be capital
gain or loss and will be long term gain or loss if, at the time of such
disposition, the Notes had been held for more than one year.
MARKET DISCOUNT
Special rules will apply to Notes acquired with market discount. A market
discount note is, generally, a note the stated redemption price at maturity of
which exceeds the holder's basis in the note immediately after acquisition.
Generally, any gain recognized on the sale or redemption of a market discount
note will be treated as ordinary income to the extent of the accrued market
discount on such note not previously included in income. Market discount
accrues either ratably or at a constant yield to maturity, at the election of
the holder. A holder of a market discount note also may elect to take market
discount into income as it accrues.
Although the matter is not free from doubt, a holder of a Note with market
discount should not have to recognize income on the conversion of the Note,
even with respect to market discount that has accrued but has not been taken
into account. Market discount not recognized on conversion will carry over to
the Common Stock acquired upon conversion thereof and will be recognized as
ordinary income to the extent of gain recognized upon the disposition of such
Common Stock, including any deemed disposition of fractional shares of Common
Stock for cash at the time of conversion.
BACKUP WITHHOLDING
In general, backup withholding at a rate of 31% will apply to payments of the
proceeds of a sale, redemption or conversion of a Note if the holder is not an
"exempt recipient" and fails to provide an accurate taxpayer identification
number or to report all interest and dividends required to be shown on its
federal income tax returns. Individuals generally are not exempt recipients,
whereas corporations and certain other entities generally are exempt
recipients.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 350,000,000 shares of
Common Stock, par value $1 per share, and 5,000,000 shares of cumulative
preferred stock, par value $100 per share. As of July 15, 1995, 111,645,443
shares of Common Stock were issued and outstanding. No shares of preferred
stock are outstanding.
COMMON STOCK
All of the outstanding shares of Common Stock are, and the shares of Common
Stock issuable hereunder will be when issued, fully paid and nonassessable.
Subject to the rights of the holders of any
15
shares of preferred stock that may be issued, in the future, the holderscase of Common Stock (i) are entitled to such dividends as the Board of Directors in
its discretion may validly declare, (ii) in the event of liquidation,Offered
Debt Securities that will share ratably in the net assets ofbe senior debt ("Senior Debt Securities"), under an
Indenture (the "Senior Indenture"), between the Company and (iii)a trustee to be
selected by the Company (the "Senior Trustee"), and, in the case of Offered
Debt Securities that will be subordinated debt ("Subordinated Debt
Securities"), under an Indenture (the "Subordinated Indenture"), between the
Company and a trustee to be selected by the Company (the "Subordinated
Trustee"). The Senior Indenture and the Subordinated Indenture are entitledsometimes
hereinafter referred to cast
one vote per share except that theyindividually as an "Indenture" and collectively as the
"Indentures", and the Senior Trustee and the Subordinated Trustee are
entitledhereinafter referred to cumulative votes foras the election of directors."Trustee". The Common Stock has no conversion rights, nor are there
any preemptive, subscription, redemption or call provisions applicablestatements under this caption
relating to the Common Stock.
COMMON STOCK PURCHASE RIGHTS
The Company has adopted a warrant dividend planDebt Securities and the Indentures are summaries and do not
purport to be complete. Such summaries make use of terms defined in which each holder of
Common Stock is entitled to one common stock purchase right for each share of
Common Stock owned. When exercisable, the
nonvoting rights entitle the
registered holder to purchase one share of Common Stock at a price of $60 per
share. The rights will become exercisable,Indentures and separately tradeable, ten days
after a person or group acquires 20% or more of the Company's Common Stock. In
the event the rights become exercisable and thereafter the Company is acquired
in a merger or other business combination, each right will entitle the holder
to purchase common stock of the surviving corporation, for the exercise price,
having a market value of twice the exercise price of the right. Under certain
circumstances, including the acquisition of 25% or more of the Company's Common
Stock, each right will entitle the holder to receive upon payment of the
exercise price, shares of Common Stock with a market value of two times the
exercise price. At the Company's option, the rights, prior to becoming
exercisable, are redeemablequalified in their entirety at a priceby express reference to the
Indentures and the cited provisions thereof, the forms of $.025 per right.
The rightswhich are subjectfiled as
exhibits to adjustment and expire March 19, 1996.
PREFERRED STOCK
No sharesthe Registration Statement. For purposes of preferred stock are currently outstanding. If issued, such
shares could affect the rightsthis description of
the holdersDebt Securities the term "Company" refers only to The Kroger Co. and does
not include The Kroger Co.'s consolidated subsidiaries.
The particular terms of shareseach issue of Common Stock. SharesDebt Securities (the "Offered Debt
Securities"), as well as any modifications or additions to the following
general terms which may be applicable in the case of preferred stocksuch Offered Debt
Securities, will be described in the Prospectus Supplement relating to such
Offered Debt Securities. Accordingly, for a description of the terms of a
particular issue of Offered Debt Securities, reference must be made both to
the Prospectus Supplement relating thereto and the following description.
GENERAL
The Debt Securities will represent general unsecured senior or subordinated
obligations of the Company. The Debt Securities may be issued in one or more
series. Each share is entitled
to one vote. Holders of preferred stockseries with the same or various maturities. Capitalized terms used herein
shall have no preemptive rightsthe meanings established in the Indenture unless otherwise defined
herein.
The Debt Securities relating to subscribethis Prospectus will be issued from time to
time up to an aggregate principal amount of $500,000,000 or the equivalent
thereof. Reference is made to the Prospectus Supplement for the following
terms of the Offered Debt Securities: (i) the title, aggregate principal
amount and authorized denominations of the Offered Debt Securities; (ii) the
percentage of their
11
principal amount at which such Offered Debt Securities will be issued; (iii)
the date or purchasedates on which the Offered Debt Securities will mature; (iv) the
rate or rates (which may be fixed or variable) per annum, if any, shares of any class of stock.
The Board of Directors may fix by resolutionat which the
designationsOffered Debt Securities will bear interest and the powers,
preferencesdate from which such
interest may accrue; (v) the times and relative, participating, optionalplaces at which principal and any such
interest will be payable; (vi) any redemption or sinking fund provisions;
(vii) the currency of payment of principal of, premium, if any, and interest
on the Offered Debt Securities; (viii) any index or other special rights,basis used to
determine the amount of payments of principal of and interest on the qualifications, limitations or restrictionsOffered
Debt Securities; (ix) whether the Offered Debt Securities of any series will
be represented by a single global note registered in the name of sharesa
depositary's nominee and, if so, the depositary for and the method of
preferred stock, including without limitation,transferring beneficial interests in the dividend rate, redemption
rightsglobal note; (x) whether the Offered
Debt Securities will be issuable in registered form or bearer form or both
and, price, liquidation price, sinking fund requirements, conversion
rightsif Offered Debt Securities in bearer form are issuable, restrictions
applicable to the exchange of one form for another and restrictions onto the issuanceoffer, sale and
delivery of shares ofOffered Debt Securities in bearer form; (xi) ranking as
Subordinated Debt Securities, if applicable, and the same series or of any
other class or series. The Board of Directors may also fix the number of shares
constituting any such series and increase or decrease the number of sharesterms of any such
series (butsubordination; and (xii) any other terms relating to the Offered Debt
Securities not belowinconsistent with the numberIndentures, including any terms which may
be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of shares thereof then outstanding).
TRANSFER AGENT
The First Chicago Trust Company of New York, New York, isOffered Debt Securities.
Offered Debt Securities may be presented for transfer in the transfer agent
and registrar formanner, at the
Company's Common Stock.
STANDBY ARRANGEMENTS
Under the termsplaces and subject to the conditionsrestrictions set forth in the Offered Debt
Securities and the Prospectus Supplement. Such services will be provided
without charge, other than any tax or other governmental charge payable in
connection therewith, but subject to the limitations provided in the
Indentures. Offered Debt Securities in bearer form and the coupons, if any,
appertaining thereto will be transferable by delivery.
The Indentures under which certain of the Company's outstanding indebtedness
was issued restrict the Company's ability to redeem, defease or otherwise
acquire the Debt Securities.
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other considerations
applicable thereto will be described in the Prospectus Supplement relating
thereto.
EVENTS OF DEFAULT AND NOTICE THEREOF
The Indentures will define "Events of Default" with respect to any series of
Debt Securities as being any one of the following events and such other events
as may be established for a particular series of Debt Securities: (a) failure
to pay interest on Debt Securities of such series for 30 days after it becomes
due; (b) failure to pay principal (or premium or sinking fund payment, if any)
on Debt Securities of such series when due at maturity, upon redemption, by
declaration or otherwise; (c) failure to perform any other covenants for 60
days after notice (other than a covenant included in the Indentures solely for
the benefit of Debt Securities of any series other than such Debt Securities);
(d) a default under any indebtedness for borrowed money in excess of
$30,000,000 constituting a failure to pay when due or resulting in such
indebtedness becoming due prior to maturity; (e) certain events of bankruptcy,
insolvency or reorganization; and (f) any other Event of Default provided with
respect to Debt Securities of such series. (Section 501.) No Event of Default
(except an Event of Default described in (c), (d) or (e) above) with respect
to a particular series of Debt Securities issued under the Indenture
necessarily constitutes an Event of Default with respect to any other series
of Debt Securities issued thereunder.
Each Indenture will provide that the Trustee shall, within 90 days after the
occurrence of a Standby Agreementdefault with respect to any series of Debt Securities or all
Debt Securities, give to the holders of such series of Debt Securities or all
Debt Securities, as the case may be, notice of all uncured defaults known to
it (the "Standby Agreement"), Goldman, Sachs & Co. (the "Purchaser"term "default" to include the events specified above without grace
periods); provided, that except in the case of default in the payment of
principal (or premium or sinking fund payment, if any) or
12
interest on any series of the Debt Securities, the Trustee shall be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interest of the holders of the Debt Securities of
such series. (Section 602.)
has agreedThe Company will be required to purchase fromfurnish to the Company, atTrustee annually after the
optionfirst issue of the Debt Securities under the Indenture a statement of certain
officers of the Company up to the number of
shares (the "Shares") of Common Stock equaleffect that to the positive difference, if any,
between (i)best of their knowledge the
number of shares (the "Redemption Shares") of Common Stock that
would have been issuable upon conversionCompany is not in default in the performance and observance of the Notesterms of
the Indenture or, if they have knowledge that arethe Company is in default,
specifying such default. (Section 1004.)
If an Event of Default described in clause (a) or (b) above with respect to
Debt Securities of any series at the time Outstanding or an Event of Default
specified pursuant to clause (f) with respect to Debt Securities of a
particular series occurs and is continuing, then in every such case, unless
the principal of all such Debt Securities shall have become due and payable,
the Trustee or the Holders of not surrendered
for conversion on or priorless than 25% in principal amount of the
Outstanding Securities of that series may in writing to the Expiration Time, minus (ii) (A)Company and the
Administrative Agents declare the principal amount (or, if on the Expiration TimeDebt Securities
of that series are Original Issue Discount Securities (as defined in the
closing priceIndenture), such portion of the Common Stock is greater than $19.84,
535,332 shares of Common Stock or (B) if such closing price is not greater than
$19.84, zero, at a price per share of $19.34, if there are fewer than 2,675,000
Redemption Shares, and $19.10 per share if there are 2,675,000 or more
Redemption Shares.
The Purchaserprincipal amount as may purchase Notesbe specified in the
market or otherwise prior to the
Expiration Date and has agreed to convert into Common Stockterms of that series) of all of the Notes
which it so purchases.
16
TheDebt Securities of that series, to be due
and payable five business days after the receipt by the Company and the
Administrative Agents of such written notice. If an Event of Default described
in clause (c), (d) or (e) above occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of
all the Debt Securities then Outstanding may in writing to the Company and the
Administrative Agents declare the principal amount (or, if any such Debt
Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of
the Debt Securities to be due and payable five business days after the receipt
by the Company and the Administrative Agents of such written notice; provided,
that each of the two preceding provisions shall not restrict the availability
of other rights or remedies that the Trustee or the holders may have. However,
at any time after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Outstanding Securities, as the case may
be) has been advisedmade, but before the maturity thereof, the Holders of a majority
in principal amount of Outstanding Securities of such series (or of all
Outstanding Securities, as the case may be) may, subject to certain
conditions, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal (or specified portion
thereof) with respect to Debt Securities of such series (or of all Outstanding
Securities, as the case may be) have been cured or waived as provided in the
Indenture. (Section 502.)
Each Indenture also provides that the Purchaser proposesHolders of not less than a majority in
principal amount of the Debt Securities of a series (or of all Outstanding
Securities, as the case may be) may, subject to offercertain limitations, waive
certain defaults. Subject to certain limitations, the Holders of not less than
a majority of the principal amount of the Debt Securities of any Common
Stock purchased fromseries may
direct the Companytime, method and place of conducting any proceeding for any remedy
available to the Trustee or acquired on conversion by the Purchaser of
Notes for resale as set forthexercising any trust or power conferred on the
cover pageTrustee. (Sections 512 and 513.) Each Indenture will provide that in case an
Event of this Prospectus. The
Purchaser may also make salesDefault shall occur (which shall not have been cured or waived), the
Trustee will be required to certain securities dealersexercise such of its rights and powers under the
Indenture and to use the degree of care and skill in their exercise that a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs. (Section 601.) Subject to such provisions, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at prices which may
reflect concessions from the prices at whichrequest of any of the shares are then beingHolders of the Debt Securities unless
they shall have offered to the public. TheTrustee reasonable security or indemnity.
(Section 603.)
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such concessionsOriginal Issue Discount Securities upon the occurrence of an
Event of Default and the continuation thereof.
13
MODIFICATION OF THE INDENTURE
Each Indenture will provide that with certain exceptions, the Indenture, the
rights and obligations of the Company and the rights of the holders of the
Debt Securities may be modified by the Company and the Trustee with the
consent of the holders of not less than 50% in aggregate principal amount of
all series of Debt Securities directly affected by such modification; but no
such modification may be made, without the consent of each holder of such Debt
Securities affected thereby, which would (i) change the stated maturity of any
Debt Security, or any installment of interest, if any, on any such Debt
Security, or reduce the principal amount thereof, or reduce any premium
payable upon the redemption thereof, or reduce the rate of interest thereon,
or reduce the principal amount payable on acceleration with respect to an
Original Issue Discount Security, or change the place or currency of payment
of principal or any premium or interest on any such Debt Security; (ii) reduce
the above-stated percentage of Debt Securities, the consent of the holders of
which is required to modify or alter the Indenture; (iii) impair the right to
institute suit for the enforcement of any payment of the principal of, and
premium, if any, and interest on any such Debt Security; (iv) modify the
foregoing requirements except to increase the percentage of outstanding Debt
Securities or to provide that certain other provisions cannot be modified or
waived without the consent of the holders of all outstanding Debt Securities;
or (v) modify the provisions of the Subordinated Indenture with respect to the
subordination of the Subordinated Debt Securities in a manner adverse to the
holders of such Debt Securities. (Section 902.) The Company may set a record
date for any Act of the holders with respect to consenting to any amendment.
(Section 104.)
THE TRUSTEES
Each Indenture contains limitations on the right of the Trustee, as a
creditor of the Company, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. In addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time of a default
under the Indenture it is a creditor of the Company.
As of the date hereof, the Company has not selected a Trustee for either the
Senior Indenture or the Subordinated Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Prospectus Supplement will contain provisions regarding the ability of
the Company to consolidate or merge with or into, or convey, transfer or lease
its properties or assets to any Person.
CERTAIN DEFINITIONS
"Indebtedness" means (without duplication), with respect to any Person, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every obligation of such Person issued or assumed as the
deferred purchase price of property, every conditional sale obligation and
every obligation under any title retention agreement, in each case if on terms
permitting any portion of the purchase price to be paid beyond one year from
the date of purchase (but excluding trade accounts payable arising in the
ordinary course of business which are not overdue by more than 90 days or
which are being contested in good faith), (iv) every obligation of such Person
issued or contracted for as payment in consideration of the purchase by such
Person or an Affiliate of such Person of the stock or substantially all of the
assets of another Person or a merger or consolidation to which such Person or
an Affiliate of such Person was a party, (v) every obligation of the type
referred to in clauses (i) through (iv) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, and (vi) every obligation of the type referred to in clauses (i)
through (v) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
14
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured. "Indebtedness,"
however, does not include any obligation of any Person under any interest rate
swap, cap, collar or similar arrangement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
If Subordinated Debt Securities are issued, a Prospectus Supplement relating
thereto will describe the terms whereby such Subordinated Debt Securities will
be determinedmade subordinate and subject in right of payment to the prior payment in
full of senior indebtedness of the Company, and such description will include
a definition of what constitutes "senior indebtedness" of the Company.
PLAN OF DISTRIBUTION
The Company may offer the Debt Securities directly to purchasers or to or
through underwriters, dealers or agents. Any such underwriter(s), dealer(s) or
agent(s) involved in the offer and sale of the Debt Securities in respect of
which this Prospectus is delivered will be named in the Prospectus Supplement.
The Prospectus Supplement with respect to such Debt Securities will also set
forth the terms of the offering of such Debt Securities, including the
purchase price of such Debt Securities and the proceeds to the Company from
such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Debt Securities may be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Debt Securities.
If underwriters are used in an offering of Debt Securities, the name of each
managing underwriter, if any, and any other underwriters and the terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement relating to such offering and the Debt Securities will
be acquired by the Purchaser. The salesunderwriters for their own accounts and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of Common Stock so offered are offered bysale. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time. It
is anticipated that any underwriting agreement pertaining to any Debt
Securities will (1) entitle the Purchaser subjectunderwriters to prior sale, when, as, and if received by the Purchaser,
and subject to its right to reject orders in whole or in part. The Purchaser
has agreed to remit to the Company not less than 50% of the amount, if any, by
which the aggregate net proceeds received by the Purchaser from sales of the
Shares exceeds the purchase price of the Shares.
Pursuant to the Standby Agreement, the Company has agreed to pay to the
Purchaser for the commitments undertaken by it under the Standby Agreement an
amount equal to $250,000. If the Purchaser does not purchase any Shares, the
Company has agreed to reimburse the Purchaser for the fees and disbursements of
its counsel.
During the period beginning from the date of this Prospectus and continuing
to and including the Redemption Date, and, if the Purchaser purchases any
Shares, further continuing and including the date ending 180 days after the
Redemption Date, the Company has agreed not to offer, sell, contract to sell or
otherwise dispose of, any shares of Common Stock of the Company, any securities
of the Company substantially similar to the Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or any such
substantially similar security (except for any securities, issued, offered,
sold or disposed ofindemnification by the Company
against certain civil liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters may be required to make in
respect thereof, (2) provide that the obligations of the underwriters will be
subject to certain conditions precedent and (3) provide that the underwriters
will be obligated to purchase all Debt Securities offered in a particular
offering if any such Debt Securities are purchased.
If a dealer is used in an offering of Debt Securities, the Company will sell
such Debt Securities to the dealer, as principal. The dealer may then resell
such Debt Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
If any agent is used in an offering of Debt Securities, the agent will be
named, and the terms of the agency will be set forth, in the Prospectus
Supplement relating thereto. Unless otherwise indicated in such Prospectus
Supplement, an agent will act on a best efforts basis for the period of its
stock optionappointment.
15
Dealers and other benefit plans
maintained for its officers, directorsagents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Debt Securities
described therein and, employees or Common Stock issued or
distributed in connectionunder agreements which may be entered into with the
conversion of any security ofCompany, may be entitled to indemnification by the Company outstanding on the date of the Prospectus) without the Purchaser's prior
written consent.
The Company has agreed to indemnify the Purchaser against certain
liabilities, includingcivil liabilities under the Securities Act. The PurchaserUnderwriters, dealers and agents
may assistbe customers of, engage in the solicitation of conversions by holders of
Notes but will receive no commission therefor.
Purchaser performs investment bankingtransactions with, or perform services for, the
Company in the ordinary course of business.
Offers to purchase Debt Securities may be solicited, and sales thereof may
be made, by the Company directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will be set forth
in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutional investors to purchase Debt Securities from the Company pursuant
to contracts providing for payment and delivery at a future date.
Institutional investors with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such purchasers must be approved by the Company. The obligations of any
person under any such contract will not be subject to any conditions except
that (1) the purchase of the Debt Securities shall not at the time of delivery
be prohibited under the laws of any jurisdiction to time.which such purchaser is
subject and (2) if the Debt Securities are also being sold to underwriters,
the Company shall have sold to such underwriters the Debt Securities not
subject to delayed delivery. Underwriters and other agents will not have any
responsibility in respect of the validity or performance of such contracts.
The anticipated date of delivery of Debt Securities will be set forth in the
Prospectus Supplement relating to each offering.
VALIDITY OF THE COMMON STOCKDEBT SECURITIES
The validity of the Common StockDebt Securities will be passed upon for the Company by
Paul W. Heldman, Esq., Vice President, Secretary and General Counsel of the
Company
and forCompany. In rendering his opinions on the Purchaser by Sullivan & Cromwell, New York, New York. Sullivan &
Cromwell may relyvalidity of the Debt Securities, Mr.
Heldman will express no opinion as to mattersthe applicability of Ohioany federal or
state law upon the opinion of Mr. Heldman.relating to fraudulent transfers. As of July 7, 1995,March 31, 1996, Mr. Heldman
owned approximately 10,48610,550 shares of the Company's Common Stock and had
options to acquire an additional 113,352 shares.
EXPERTS
The consolidated balance sheetfinancial statements and financial statement schedules of
The Kroger Co. as of December 30, 1995 and December 31, 1994 and January 1, 1994
andfor each of
the consolidated statements of operations and accumulated deficit, and cash
flowsthree fiscal years in the period ended December 30, 1995, which appear in
the Company's Annual Report on Form 10-K for the yearsfiscal year ended December
31, 1994, January 1, 1994 and January 2,
1993,30, 1995, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report which includes an explanatory paragraph
regarding the Company's change in method of accounting for postretirement
benefit costs other than pensions as of January 3, 1993, of Coopers & Lybrand L.L.P., independent
certified public accountants, given on the authority of that firm as experts
in accounting and auditing.
17Documents incorporated herein by reference in the future will include
financial statements, related schedules (if required) and auditors' reports
which financial statements and schedules will have been audited to the extent
and for the periods set forth in such reports by the firm or firms rendering
such reports and, to the extent so audited and consent to incorporation by
reference is given, will be incorporated herein by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting
and auditing.
16
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SO-
LICITATIONTHE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATIONINFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------------------
TABLE OF CONTENTS
PAGE
----
Available Information...................................................... 32
Incorporation of Certain Documents by Reference............................ 2
Risk Factors............................................................... 3
Certain Investment Considerations.......................................... 4
The Company................................................................ 5
Redemption4
Consolidated Ratio of Notes and AlternativesEarnings to Redemption......................... 5Fixed Charges............................ 4
Use of Proceeds............................................................ 7
Price Range of Common Stock................................................ 7
Dividends.................................................................. 84
Description of the Credit Agreement........................................ 8
Certain Federal Income Tax Considerations.................................. 145
Description of Capital Stock...............................................Debt Securities............................................. 11
Plan of Distribution....................................................... 15
Standby Arrangements....................................................... 16
Validity of the Common Stock............................................... 17Debt Securities................................................ 16
Experts.................................................................... 1716
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10,706,638 SHARES$500,000,000
THE KROGER CO.
COMMON STOCK
(PAR VALUE $1 PER SHARE)
----------------
[LOGO OF KROGER]
----------------
GOLDMAN, SACHS & CO.DEBT SECURITIES
-----------------
LOGO
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the sale of the Common StockDebt Securities being
registered hereby, other than underwriting discounts and commissions, are
estimated as follows:
Registration Fee*................................................ $117,911$172,414
Printing and engraving........................................... 50,000
Listing Fees..................................................... 50,000100,000
Legal fees and expenses.......................................... 100,00050,000
Accounting fees and expenses..................................... 15,00075,000
Blue Sky qualifications and related legal fees and expenses...... 10,00015,000
Rating Agency Fees............................................... 40,000
Trustee fees..................................................... 15,000
Miscellaneous.................................................... 30,000
--------
Total.......................................................... $372,911Total........................................................ $497,414
========
- --------
* Actual Fee.*Actual fee
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Company's Regulations (by-laws) each present or former director,
officer or employee of the Company and each person who is serving or shall
have served at the request of the Company as a director, officer or employee
of another corporation (and his heirs, executors and administrators) shall be
indemnified by the Company against expenses actually and necessarily incurred
by him, and also against expenses, judgments, decrees, fines, penalties or
amounts paid in settlement, in connection with the defense of any pending or
threatened action, suit, or proceeding, criminal or civil, to which he is or
may be made a party by reason of being or having been such director, officer
or employee, provided (1) he is adjudicated or determined not to have been
negligent or guilty of misconduct in the performance of his duty to the
Company or such other corporation, (2) he is determined to have acted in good
faith in what he reasonably believed to be the best interest of the Company or
of such other corporation, and (3) in any matter the subject of a criminal
action, suit, or proceeding, he is determined to have had no reasonable cause
to believe that his conduct was unlawful. See also Ohio Revised Code, Section
1701.13.
The Company also maintains directors' and officers' reimbursement and
liability insurance pursuant to policies with aggregate limits of
$100 million.
Reference is made to Section 8 of the Standby Agreement, filed herewith as
Exhibit 1.1 for provisions regarding the indemnification of the Company, its
directors and officers, and its controlling persons against certain
liabilities, including liabilities under the Securities Act of 1933.$125,000,000.
ITEM 16. EXHIBITS:
1.1 Form of StandbyUnderwriting Agreement.
4.1 Amended Articles of Incorporation and Regulations of the
Company are hereby incorporated by reference to Exhibits
4.1 and 4.2 of the Company's Registration Statement on
Form S-3 as filed with the Secu-
ritiesSecurities and Exchange CommissionCommis-
sion on January 28, 1993, and bearing Reg-
istrationRegistration No. 33-57552.33-
57552.
4.2 Rights Agreement, includingForm of Senior Indenture (including form of Rights Certificate incorporated
by referencesecurities)
relating to the Company's Registration Statement onSenior Debt Securities.
4.3 Form 8-A
dated March 6, 1986.of Subordinated Indenture (including form of securi-
ties) relating to the Subordinated Debt Securities.
5.1 Opinion of Paul W. Heldman, Esq., including his consent.
10.1 Competitive Advance and Revolving Credit Facility, dated as12.1 Computation of July
19, 1994, among the Company and Chemical Bank and Citibank, N.A., as
administrative agents, and the lenders named therein is hereby incor-
poratedRatio of Earnings to Fixed Charges incorpo-
rated by reference to Exhibit 99.1 of the Company's Quarterly Report on
Form 8-K, dated
July 20, 1994.
II-1
23.110-Q for the quarter ended March 23, 1996.
24.1 Consent of Coopers & Lybrand L.L.P.
23.224.2 Consent of Paul W. Heldman, Esq., included in Exhibit 5.1
filed herewith.
24.125.1 Powers of Attorney.
99.1 Notice*26.1 Statement of Redemption of Notes.Eligibility on Form T-1.
- --------
*To be filed.
II-1
ITEM 17. UNDERTAKINGS.UNDERTAKINGS
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 this
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
Provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this 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.
(4) That, for purposes of determining liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 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.
(5) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(6) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
(7) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act ("Act") in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions referred to in Item 15 or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in said
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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 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-2
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATMENTSTATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF OHIO, ON AUGUST 4, 1995.JUNE 25, 1996.
The Kroger Co.
/s/ Bruce M. Gack
By____________________________________
BRUCE M. GACK ASSISTANT SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
SIGNATURES TITLE
---------- -----
*/s/ Reuben V. Anderson Director
- -------------------------------------
REUBEN V. ANDERSON
*/s/ Raymond B. Carey, Jr. Director
- -------------------------------------
RAYMOND B. CAREY, JR.
*/s/ John L. Clendenin Director
- -------------------------------------
JOHN L. CLENDENIN
*/s/ David B. Dillon Director, President
- ------------------------------------- and
Chief Operating
DAVID B. DILLON Chief Operating
Officer
*/s/ Richard W. Dillon Director
- -------------------------------------
RICHARD W. DILLON
*/s/ Lyle Everingham Director
- -------------------------------------
LYLE EVERINGHAM
*/s/ John T. LaMacchia Director
- -------------------------------------
JOHN T. LAMACCHIA
*/s/ Edward M. Liddy Director
- -------------------------------------
EDWARD M. LIDDY
*/s/ Patricia Shontz Longe Director
- -------------------------------------
PATRICIA SHONTZ LONGE
II-3
SIGNATURES TITLE
---------- -----
*/s/ W. Rodney McMullen Group Vice President
- ------------------------------------- and Chief Financial
W. RODNEY MCMULLEN Officer
*/s/ T. Ballard Morton, Jr. Director
- -------------------------------------
T. BALLARD MORTON, JR.
*/s/ Thomas H. O'Leary Director
- -------------------------------------
THOMAS H. O'LEARY
*/s/ John D. Ong Director
- -------------------------------------
JOHN D. ONG
*/s/ Katherine D. Ortega Director
- -------------------------------------
KATHERINE D. ORTEGA
*/s/ Joseph A. Pichler Chairman of the
- ------------------------------------- Board of Directors,
JOSEPH A. PICHLER Chief Executive
Officer, and
Director
*/s/ J. Michael Schlotman Vice President and
- ------------------------------------- Corporate
J. MICHAEL SCHLOTMAN Controller--
Principal
Accounting Officer
*/s/ Martha Romayne Seger Director
- -------------------------------------
MARTHA ROMAYNE SEGER
*/s/ James D. Woods
Director
- -------------------------------------
JAMES D. WOODS
/s/ Bruce M. Gack August 4, 1995June 25, 1996
*By _________________________________
BRUCE M. GACK AS ATTORNEY-IN-FACT
II-4
EXHIBIT INDEX
EXHIBIT
NUMBER
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1.1 Form of Underwriting Agreement.
4.1 Amended Articles of Incorporation and Regulations of the Company
are hereby incorporated by reference to Exhibits 4.1 and 4.2 of
the Company's Registration Statement on Form S-3 as filed with
the Securities and Exchange Commission on January 28, 1993, and
bearing Registration No. 33-57552.
4.2 Form of Senior Indenture (including form of securities) relating
to the Senior Debt Securities.
4.3 Form of Subordinated Indenture (including form of securities)
relating to the Subordinated Debt Securities.
5.1 Opinion of Paul W. Heldman, Esq., including his consent.
12.1 Computation of Ratio of Earnings to Fixed Charges incorporated
by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 23, 1996.
24.1 Consent of Coopers & Lybrand L.L.P.
24.2 Consent of Paul W. Heldman, Esq., included in Exhibit 5.1 filed
herewith.
25.1 Powers of Attorney.
*26.1 Statement of Eligibility on Form T-1.
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*To be filed.