Item 1. Business.
General
Schultz Sav-O Stores, Inc. is engaged in distributing food and related products at wholesale and retail. As of January 2, 1999, we franchised 68 and owned 18 retail supermarkets under the Piggly Wiggly (R) name. While we have a presence in some larger metropolitan areas, we have attempted to develop a niche for serving the food shopping needs of customers in smaller and suburban communities within our market areas.
We are the primary supplier to our 86 franchised and corporate-owned Piggly Wiggly supermarkets. We also serve as a wholesaler to a number of smaller, independently operated retail supermarkets and convenience stores in our market areas.
We believe that we have established ourselves as a niche food marketer in small to mid-size markets by delivering the product variety, quality of perishable products, pricing and promotional programs traditionally found only in large metropolitan markets. As a hybrid of retailer and wholesaler, we have created a "virtual chain" of retail stores served by a vertically-integrated wholesaler. In 1998, our virtual chain had approximately $730 million
in retail sales. Virtually all Piggly Wiggly supermarkets, both franchised and owned, participate in a single, coordinated merchandising and advertising program which typically includes:
o a weekly newspaper ad insert;
o outdoor boards;
o television and radio spots;
o sponsorship of entertainment and charitable events; and
o our Piggly Wiggly Preferred Club (R) Card program.
We believe that this coordinated program allows us to leverage the combined buying power of all our franchised and corporate stores and deliver a powerful and effective promotional vehicle for our participating vendor partners. Additionally, we believe that we provide our franchised stores with cost-effective administrative support services and financial resources that enable the operation of efficient, contemporary supermarkets, while the independent retail ownership of our franchisees provides the entrepreneurial spirit and community involvement that we believe is an integral part of marketing in smaller markets. The successful combination of these elements creates the partnership between us and our franchisee retailers that results in a virtual chain of coordinated and integrated retail food distribution. By operating as a virtual chain, we are able to achieve superior performance compared to traditional wholesalers, yet avoid having to make large direct capital investments at the retail level to grow our business. The franchisee retailer, as part of the virtual chain, benefits from lower cost of products and the coordinated promotional activity normally associated only with larger retail grocery chains. We believe that this structure enables us to leverage the favorable elements of both a wholesaler and a retailer, giving us and our franchisees a unique advantage in our marketplace. We believe that this advantage has been a key component in our success over the past few years as the virtual chain concept has evolved.
We supply a variety of products to our franchised and corporate supermarkets and other wholesale customers, primarily from our warehouse and distribution center in Sheboygan, Wisconsin. We also provide our franchised and corporate supermarkets and other customers with fresh, frozen and processed meat, eggs and deli products from a third-party distribution facility in Milwaukee, Wisconsin. Through arrangements with several vendors, we also offer a line of carbonated soft drinks, fruit drinks and drinking and distilled water under our Springtime (TM) label.
We are a Wisconsin corporation organized in 1912 and maintain our corporate headquarters at 2215 Union Avenue, Sheboygan, Wisconsin 53081. You can visit our internet website at http://www.shopthepig.com.
Wholesale Operations
For several years, we have emphasized our more profitable wholesale distribution business and the associated refinement of our franchise store base which, combined with our unique marketing and merchandising program, has created an effective and efficient virtual chain.
We believe that one of the competitive advantages we provide to our franchised supermarkets through our "virtual chain" strategy is our value-oriented customer merchandising and community-specific marketing support program, pursuant to which franchisees participate with corporate stores in systemwide promotions and other merchandising events. Through a variety of partnering, merchandising and marketing programs, we benefit our franchisees through additional sales resulting from heightened consumer name recognition and in-store merchandising programs, combined with special promotional pricing. Additional services that we provide to our franchisees include:
o retail accounting;
o preparation of store payrolls;
o preparation of print, electronic and outdoor media advertising (including various point- of-sale materials);
o assistance in the selection and analysis of store locations;
o financing and lease negotiations;
o store design and floor layout;
o merchandising planning;
o equipment selection and sourcing;
o engineering and architectural services;
o retail technology implementation and support;
o labor planning and scheduling; and
o product category supervision.
We provide some of these services as part of the franchise relationship, while other services are provided under a separate fee arrangement intended to cover our costs.
As part of implementing our corporate strategy to improve the profitability of our corporate retail operations, we continue to seek opportunities to expand and acquire corporate and franchise stores, to convert or close underperforming stores and to enter new markets. In 1998, we opened one new market franchise store, replaced one older franchise store, completed expansions of two existing franchise stores and consolidated two franchise stores serving the same market. In aggregate, the total number of franchise and corporate stores remained at 86 at the end of 1998, but total store square footage increased by approximately 65,000 square feet. In early 1999, we completed the consolidation of two additional franchise stores and replaced another franchise store. Renovations and expansions continue at six franchise operations. These renovations involve four expansions of existing franchise stores, one replacement franchise unit and development of one new market store. These projects are expected to increase the square footage of selling space at such stores by an average of approximately 40%.
The following table shows our development of, and changes in, our franchised and corporate retail supermarkets for the periods presented:
For 1998, we reported record net earnings, net earnings per share and net earnings as a percentage of sales. The fourth quarter of 1998 was our 24th consecutive quarter of earnings increases over the prior year. The increase in earnings and profitability has been principally the result of expanded and improved operations.
We are the primary supplier to all of our franchised and corporate supermarkets. We also serve as a wholesaler to other smaller independent retail stores in our market area, accounting for approximately 2% of our 1998 net sales.
Franchisees pay us fees, determined by the retail sales of their supermarkets. We do not charge an initial fee to franchisees for granting a franchise. Consistent with industry practice, in certain situations, we provide credit enhancements to certain qualified franchisees by (i) leasing the franchisee's supermarket premises and, in turn, subleasing the premises to the franchisee and/or (ii) guaranteeing a portion of the franchisee's bank borrowings.
As a result of an amendment to our Piggly Wiggly Master Franchise Agreement entered into in June 1998, we have expanded our franchise territory to include additional counties in Wisconsin, Illinois and Michigan, as well as portions of Iowa and Minnesota. We now have exclusive rights to grant Piggly Wiggly franchises in:
o the entire state of Wisconsin;
o the upper peninsula of Michigan;
o designated counties in northern Illinois;
o designated counties in southeastern Minnesota; and
o designated counties in eastern Iowa.
We believe that the increase in our franchise territory will provide additional opportunities for us to pursue our plans to expand the areas that we serve as a food wholesaler and retailer. Our franchise rights are of unlimited duration and are not subject to any specific termination provision. We are not required to pay franchise fees to the current franchisor in the market areas we were able to serve prior to June 1998. In the new territories in Wisconsin, Minnesota, Michigan, Iowa and Illinois, we are required to pay franchise fees. The only other material obligation imposed on us in our expanded franchise territory is that the supermarkets operated under the Piggly Wiggly and certain other names must comply with the standards imposed on supermarkets in the Piggly Wiggly system. We believe that our own franchised and corporate store standards exceed the Piggly Wiggly system standards.
Retail Operations
Our franchised and corporate supermarkets stock a comprehensive selection of groceries, frozen foods, prepared foods, fresh produce, meat, poultry, eggs and dairy products. Our franchised and corporate supermarkets also allocate display space to non-food items, such as health and beauty aids, housewares, magazines and periodicals, video cassette rentals, flowers and plants, greeting cards and general merchandise. Our franchised and corporate supermarkets carry a broad range of branded merchandise and private-label product alternatives to branded merchandise. In general, the private-label products carried by our franchised and corporate supermarkets have lower selling prices, but higher gross profit margins, than branded merchandise. Consistent with trends generally within the industry, we continue to experience increases in retail customer demand for private-label store brands and believe that our Topco-procured line of branded private-label products is satisfying this consumer trend. See "Purchasing and Distribution." Based on our internal wholesale price index, inflation did not have a significant effect on sales between 1998 and 1997, except with regard to tobacco products.
1998 was our first full year with the Piggly Wiggly Preferred Club (R) Card, a customer-friendly, card-based marketing program. We designed the Piggly Wiggly Preferred Club Card to reward current customers and attract new customers by offering "clipless coupons" on weekly advertised specials and "automatic" savings on monthly store specials. The card allows us to maintain a valuable, integrated database that we use to identify our best customers and their preferences so that the virtual chain of stores can better serve its customers. We will never sell customer-specific information in our data base for use by third parties. The card also doubles as a check-cashing and video rental identification card. Additionally, the Piggly Wiggly Preferred Club Card program affords the ability to issue point-of-sale coupons redeemable on future purchases. We believe that the Piggly Wiggly Preferred Club Card and the coordinated marketing and merchandising program it supports will be key components to our future growth.
Our franchised supermarkets range in size from 8,340 square feet to 47,000 square feet, with an average of 24,720 square feet. Our corporate supermarkets range in size from 19,980 square feet to 54,850 square feet, with an average of 33,945 square feet. All of our franchised and corporate supermarkets contain several perishable or specialty service departments, including:
o fresh and processed meat;
o take-home entrees and snacks;
o fresh fruits and vegetables;
o fresh seafood;
o delicatessen;
o flowers and plants; and
o baked goods.
Several supermarkets also contain or provide one or more of the following:
o wine and spirit sales;
o video rentals;
o lottery sales;
o photo processing services;
o TicketMaster (R) ticket centers;
o in-house banking services;
o automated teller machines; and
o on-line debit and credit card check-out services.
During 1998, certain of our stores continued to fail to meet certain financial performance goals. We closed one such store during 1998 as part of a consolidation with another franchise supermarket. In order to further improve our results of operations, we continue to evaluate various business alternatives relating to our underperforming operations, including the sale or conversion of these stores, closing stores and implementing other operational changes.
Purchasing and Distribution
We purchase groceries in sufficient volume to qualify for favorable price brackets for most items. We purchase brand name grocery merchandise directly from the manufacturers or processors and purchase produce, meat and seafood from a variety of sources. We purchase substantially all of our private label items and fresh meats through Topco Associates, Inc. Topco is a national purchasing cooperative whose member-owners consist of 30 regional supermarket chains and food services organizations who collectively operate approximately 2,200 stores. According to Topco data, its member-owners accounted for approximately 14% of United States grocery store sales volume in 1998. In 1998, purchases through Topco accounted for approximately 15% of our total inventory purchases. We also purchase store and warehouse equipment and supplies, primarily bags and packaging material, through Topco. Topco's size and purchasing power enable it to employ large-volume, low-cost purchasing techniques on behalf of its member-owners.
We and our direct-contract, third-party distribution center supplied approximately 79% of the products supplied to our stores in 1998. The remainder were supplied by direct store delivery vendors. We own our 364,000 square-foot distribution center in Sheboygan, Wisconsin. With the exception of fresh, frozen and processed meat, eggs and deli products, we distribute all products that we supply from our Sheboygan facility. While we perform the buying function, a third-party contractor in Milwaukee, Wisconsin performs the distribution services for our meat operations. We believe that this arrangement provides us with operating cost efficiencies and the ability to expand our wholesale product offerings and better satisfy wholesale customer delivery schedules through improved capacity.
As described above under "Wholesale Operations," we believe that one of our competitive advantages is the community-oriented marketing programs that we provide to franchisees as part of our "virtual chain" strategy. Coordinated weekly newspaper ad inserts, high-visibility outdoor billboard advertising and television and radio advertising stress the value and customer service provided by our local Piggly Wiggly supermarkets. We also sponsor local events and festivals throughout the marketing area to improve our Piggly Wiggly name recognition, such as the Midwest's largest fireworks display at Milwaukee's Summerfest lakefront music festival.
We operate a leased, full-service trucking fleet, which consists of 22 tractors and 41 refrigerated trailers. We augment our transportation requirements with temporary leasing arrangements as conditions warrant. PW Trucking, Inc., our wholly-owned subsidiary, provides contract and common carrier services throughout our operating territory. Revenues from unrelated parties generated by this business were nominal in 1998 and are expected to be nominal in 1999.
Competition
The wholesale and retail food industry is highly competitive. At the wholesale level, we compete with regional and national wholesalers, such as Fleming Companies, Inc., SuperValu Inc., Roundy's, Inc. and Nash Finch Co. Key competitive factors include the provision of the following services to franchise customers:
o credit support;
o advertising;
o accounting and financial services;
o merchandising;
o facilities engineering;
o design and project management; and
o retail technology support.
We believe that our distribution facilities and the wide range of support and marketing services provided to our franchised and corporate retail supermarkets allow us to provide prompt and efficient, low-priced, high-quality products and important supplemental services to our franchised and corporate supermarkets and other customers.
The degree of competition at the retail level varies with store location. In most of our franchised and corporate supermarket locations, we compete primarily with local retail operators, virtually all of whom are affiliated with competing wholesalers through arrangements similar to those we have with our franchisees. In some of our supermarket locations, however, we also compete with national and regional retail chain stores, such as Sentry Food Stores, Pick `N Save, SuperSaver, Cub Foods, Jewel Food Stores, Dominicks Finer Foods, Copp's Supermarkets and Kohl's Food Stores. Other competitors include the general merchandise, wholesale club and supercenter format stores of Wal-Mart Stores, Inc., K-Mart Corp. and ShopKo Stores, Inc. and others. We believe that the principal retail competitive factors include:
o price;
o product quality and variety;
o store location and appearance; and
o the quality of a store's perishable product and service departments.
We believe our supermarkets' emphasis on low-cost, high-quality products, community-based multi-media marketing and merchandising programs and a high degree of in-store customer service and friendliness provide our franchised and corporate supermarkets with a competitive advantage in many retail market areas.
Certain of our competitors at both the wholesale and retail level may have a competitive advantage resulting from utilizing lower-cost, non-union workforces. Certain of our competitors have greater financial resources and marketing budgets than we do. Also, certain competitors using the general merchandise, wholesale club format or supercenter format may choose to carry and market a less extensive variety of products, which may allow them to sell such items at a lower per unit cost than we do.
Employees
As of January 2, 1999, we employed approximately 1,700 persons, including approximately 1,250 in the operation of our corporate retail supermarkets. A majority of our corporate retail employees are employed on a part-time basis. Of our remaining employees, approximately 210 are engaged in warehousing and trucking activities and approximately 240 are corporate and administrative personnel. Two collective bargaining agreements, covering a total of approximately 115 employees expire in 1999. We do not currently anticipate any strikes, work stoppages or slowdowns in connection with renewing such agreements.
Item 1A.
Item 1A. Executive Officers.
Messrs. Dickelman, Houser, Dahly and Jacobson are also members of our Board of Directors.
Executive officers are generally elected annually at the annual meeting of our Board of Directors held on the date of our annual meeting of shareholders. Each executive officer holds office until his successor has been elected or until his prior death, resignation or removal.
All of our executive officers have served in the positions indicated or in other management positions with Schultz Sav-O Stores for more than five years.
Item 2.
Item 2. Properties.
As is typical in our industry, a substantial portion of our capital assets are leased. As of January 2, 1999, we leased 17 corporate supermarkets and owned one supermarket. The leased supermarkets range in size from 19,980 to 54,850 square feet, with an average of 33,220 square feet.
We generally lease our supermarkets from nonaffiliated real estate developers under long-term leases. Such leases generally contain initial terms of 15 to 20 years, with several five-year renewal options. None of such existing lease arrangements contain repurchase options; nor do we own the land underlying any of such supermarkets. As of January 2, 1999, we subleased 51 of our leased supermarkets and leased one owned supermarket to independent operators who are our wholesale customers and franchisees.
Renovations and expansions continue at six franchise operations. These renovations involve four expansions of existing franchise stores, one replacement franchise unit and development of one new market store. These projects are expected to increase the square footage of selling space at such stores by an average of approximately 40%.
We own our distribution center and headquarters complex in Sheboygan, Wisconsin which occupies approximately nine acres of a 16-acre site that we own. The facility provides approximately 30,500 square feet of space for offices and related activities and approximately 364,000 square feet of warehouse space. We also lease approximately 14,500 square feet of office space in Sheboygan under a four-year lease expiring in August 2000, which is used for customer support services.
We own approximately 5 acres of commercially zoned property in Wisconsin. We have entered into brokerage arrangements for the sale of this property.
Item 3.
Item 3. Legal Proceedings.
There are no material legal proceedings to which we are a party or to which any of our property is subject, other than routine litigation incidental to our business. No material legal proceedings were terminated during the fourth quarter of 1998.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of our shareholders during the fourth quarter of 1998.
PART II
Item 5.
Item 5. Market for Our Common Stock and Related Shareholder Matters.
Pursuant to our program for compensation of independent directors, we issued 300 shares of our common stock to each of our three nonemployee directors (other than those who receive fees for professional services provided to Schultz Sav-O Stores) on January 28, 1999. Such issuances were exempt from registration under the Securities Act of 1933 in accordance with Section 4(2) of that act.
Pursuant to General Instruction G to Form 10-K ("Instruction G"), the other information required by this Item is incorporated herein by reference from information included under the caption entitled "Common Stock Information" set forth in our 1998 Annual Report to Shareholders (the "Annual Report").
Item 6.
Item 6. Selected Financial Data.
Pursuant to Instruction G, the information required by this Item is incorporated herein by reference from information included under the caption entitled "Five-Year Financial Highlights" set forth in the Annual Report.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Pursuant to Instruction G, the information required by this Item is incorporated herein by reference from information included under the caption entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in the Annual Report.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We believe that our exposure to market risk related to changes in foreign currency exchange rates, interest rate fluctuations and trade accounts receivable is immaterial.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Pursuant to Instruction G, the Consolidated Balance Sheets of the Company as of January 2, 1999 and January 3, 1998, the Consolidated Statements of Earnings, Cash Flows and Shareholders' Investment for each of the three fiscal years in the period ended January 2, 1999, together with the related Notes to Consolidated Financial Statements (including supplementary financial data), are incorporated herein by reference from information included under the captions having substantially the same titles as set forth in the Annual Report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Company.
Pursuant to Instruction G, the information required by this Item (other than such information regarding executive officers which appears in Item 1A hereof and information required by Item 405 of Regulation S-K, which is inapplicable) is incorporated by reference from information included under the caption entitled "Election of Directors" set forth in our definitive Proxy Statement for our 1999 annual meeting of shareholders (the "Proxy Statement").*
* The Proxy Statement will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of our fiscal year.
Item 11.
Item 11. Executive Compensation.
Pursuant to Instruction G, the information required by this Item is incorporated by reference from information included under the caption entitled "Executive Compensation" set forth in the Proxy Statement.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Pursuant to Instruction G, the information required by this Item is incorporated by reference from information included under the captions entitled "Stock Ownership of Management and Others" and "Election of Directors" set forth in the Proxy Statement.
Item 13.
Item 13. Certain Relationships and Related Transactions.
Pursuant to Instruction G, the information required by this Item is incorporated by reference from information under the caption entitled "Compensation Committee and Stock Option Committee Interlocks and Insider Participation" set forth in the Proxy Statement.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as a part of this Form 10-K:
1. Financial Statements.
Consolidated Balance Sheets as of January 2, 1999 and January 3, 1998
Consolidated Statements of Earnings, Cash Flows and Shareholders' Investment for the fiscal years 1998, 1997 and 1996
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
The foregoing Financial Statements are incorporated by reference to the pocket part included in the Company's Annual Report to Shareholders for the fiscal year ended January 2, 1999.
The additional information referred to under "Financial Statement Schedules" below is filed as part of this Form 10-K and should be read in conjunction with the financial statements referred to above.
Page Reference: Form 10-K 2. Financial Statement Schedules. Report of Independent Public Accountants
Schedule VIII - Valuation and Qualifying Accounts and Reserves
All other schedules have been omitted as not required or not applicable, or the information required to be shown thereon is included in the financial statements and related notes.
3. Exhibits and Reports on Form 8-K.
(a) The exhibits filed or incorporated by reference herewith are as specified in the Exhibit Index included herein.
(b) We filed no reports on Form 8-K during the fourth quarter of fiscal year 1998.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SCHULTZ SAV-O STORES, INC.
Date: March 25, 1999 By /s/ John H. Dahly --------------------------- John H. Dahly Executive Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed as of the date above by the following persons on behalf of the Company in the capacities indicated.
/s/ James H. Dickelman /s/ William K. Jacobson James H. Dickelman, Chairman of William K. Jacobson, Director Board, President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ John H. Dahly /s/ Michael R. Houser John H. Dahly, Executive Vice President, Michael R. Houser, Director Chief Financial Officer, Secretary and Director (Principal Financial Officer)
/s/ Armand C. Go /s/ Martin Crneckiy, Jr. Armand C. Go, Treasurer and Chief Martin Crneckiy, Jr., Director Accounting Officer (Principal Accounting Officer)
/s/ Howard C. Dickelman /s/ R. Bruce Grover Howard C. Dickelman, Director R. Bruce Grover, Director
/s/ Steven R. Barth Steven R. Barth, Director
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited, in accordance with generally accepted auditing standards, the financial statements included in Schultz Sav-O Stores, Inc.'s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 5, 1999. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the index to financial statements is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states, in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin February 5, 1999.
SCHULTZ SAV-O STORES, INC.
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE FISCAL YEARS 1998, 1997 AND 1996
Allowance for Doubtful Accounts-- Changes in the allowance for doubtful accounts are summarized as follows:
1998 1997 1996 -------------- ------------- ------------ Balance, beginning of year $3,950,000 $3,650,000 $2,565,000 Provision charged to earnings 350,000 656,000 987,000 (Writeoffs)/recoveries, net -- (356,000) 98,000 ---------- ---------- ---------- Balance, end of year $4,300,000 $3,950,000 $3,650,000 ========== ========== ==========
EXHIBIT INDEX
SCHULTZ SAV-O STORES, INC. ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JANUARY 2, 1999
Exhibit No. Description ----------- -----------
3.1 Restated Articles of Incorporated, as amended. Incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended December 31, 1988.
3.2 By-Laws, as amended and restated as of March 16, 1999.
4.1 Restated Articles of Incorporation, as amended (included as Exhibit 3.1). As summarized in Notes (4) and (8) of the Notes to Financial Statements incorporated by reference from our 1998 Annual Report to Shareholders, as part of Parts II and IV of this Form 10-K, we have various outstanding long-term debt and capital lease obligations. None of such obligations individually exceeds 10% of our total assets. We hereby agree to furnish to the Commission, upon its request, a copy of each instrument with respect to such obligations.
10.1 Master Franchise Agreement, dated April 23, 1982, between Commodores Point Terminal Corporation and Piggly Wiggly Corporation. Incorporated by reference to Exhibit 10.1 to our Annual Report on Form 10-K for the year ended January 1, 1982.
10.2 Agreement, dated August 1, 1982, between Schultz Sav-O Stores and Commodores Point Terminal Corporation. Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K for the year ended January 1, 1982.
10.3 Amendment to Master Franchise Agreement, dated October 15, 1982, between Schultz Sav-O Stores and Piggly Wiggly Corporation. Incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K for the year ended January 1, 1982.
10.4 Amendment No. 2 to Piggly Wiggly Master Franchise Agreement, dated June 3, 1998, between Schultz Sav-O Stores and Piggly Wiggly Corporation. Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended April 25, 1998.
10.5 Form of Director/Officer Indemnity Agreement. Incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the year ended January 2, 1988. This Agreement is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
E-1
Exhibit No. Description ----------- -----------
10.6 Form of Key Executive Employment and Severance Agreement, dated as of October 19, 1990, between Schultz Sav-O Stores and each of James H. Dickelman, John H. Dahly, and Michael R. Houser, and dated as of January 31, 1997, between Schultz Sav-O Stores and William K. Jacobson. Incorporated by reference to Exhibit 10.5 to our Annual Report on Form 10-K for the year ended December 29, 1990. This agreement is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.7 Form of amendment to Key Executive Employment and Severance Agreement between Schultz Sav-O Stores and each of James H. Dickelman, John H. Dahly, Michael R. Houser, and William K. Jacobson. Incorporated by reference to Exhibit 10.13 to our Quarterly Report on Form 10-Q for the period ended July 18, 1998. This agreement is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.8 Membership and Licensing Agreement dated August 1, 1973 by and between Topco Associates, Inc. (Cooperative) and Schultz Sav-O Stores. Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 30, 1996.
10.9 Articles of Incorporation of Topco Associates, Inc. (Cooperative). Incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K for the year ended December 31, 1988.
10.10 Bylaws of Topco Associates, Inc. (Cooperative), as amended through June 7, 1996. Incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the year ended December 30, 1996.
10.11 1990 Stock Option Plan, as amended and restated as of October 15, 1998. Incorporated by reference to Exhibit 10.16 to our Quarterly Report on Form 10-Q for the period ended October 10, 1998. This plan is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.12 1995 Equity Incentive Plan, as amended and restated as of January 28, 1999. This plan is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.13 Form of Nonqualified Stock Option Agreement under 1995 Equity Incentive Plan.. This form of agreement is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.14 Schultz Sav-O Stores, Inc. Executive Benefit Restoration Plan. Incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K for the year ended December 31, 1994. This Plan is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
E-2
Exhibit No. Description ----------- -----------
10.15 Schultz Sav-O Stores, Inc. Officer Annual Incentive Plan, as amended and restated as of January 28, 1999. This plan is required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form 10-K.
10.16 Loan Agreement, dated as of December 3, 1992, among Schultz Sav-O Stores, M&I Marshall & Ilsley Bank and Firstar Bank (Milwaukee), as amended as of December 31, 1998.
13 Portions of the 1998 Annual Report to Shareholders expressly incorporated by reference into this Form 10-K.
21 Subsidiary of Registrant.
23 Consent of Independent Public Accountants.
27 Financial Data Schedule.
99 Definitive Proxy Statement for 1999 Annual Meeting of Shareholders (to be filed with the Commission under Regulation 14A within 120 days after the end of our fiscal year and, upon such filing, incorporated by reference herein to the extent indicated in this Form 10-K).