SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Quality Food Centers, Inc.
--------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
---------------------------------------
(Title of Class of Securities)
747565109
-------------
(CUSIP Number)
Alisa Singer, Esq.
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza
Chicago, Illinois 60606
(312) 466-3196
------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 6, 1997
----------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this Schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Page 1 of 11 Pages
Exhibit Index Appears on Page 5
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This Amendment No. 2 (this "Amendment") amends and
supplements the Schedule 13D filed on April 7, 1995, as
previously amended (the "Schedule 13D"), by Zell/Chilmark Fund,
L.P. ("Zell/Chilmark") with respect to the common stock, par
value $.001 per share ("Common Stock"), of Quality Food Centers,
Inc. (the "Issuer"). Only those Items amended are reported
herein. All capitalized terms used in this Amendment and not
otherwise defined herein have the meanings ascribed to such terms
in the Schedule 13D.
Item 4. Purpose of Transaction.
and
Item 5. Interest in Securities of the Issuer.
and
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
On November 6, 1997, Fred Meyer, Inc. ("Fred Meyer"),
its wholly owned subsidiary, Q-Acquisition Corp. ("Acquisition
Sub"), and the Issuer entered into an Agreement and Plan of
Merger (the "Merger Agreement") providing for the merger (the
"Merger") of Acquisition Sub into the Issuer, with the Issuer
becoming a wholly owned subsidiary of Fred Meyer. As an
inducement and a condition to Fred Meyer's entering into the
Merger Agreement, Fred Meyer and Zell/Chilmark entered into a
Shareholders Agreement, dated as of November 6, 1997 (the
"Shareholders Agreement").
Pursuant to the Shareholders Agreement, Zell/Chilmark
has agreed, among other things: (1) at any meeting of the holders
of Common Stock called to vote upon the Merger and the Merger
Agreement or in connection with any other vote, consent or other
approval with respect to the Merger and the Merger Agreement, to
be present and to vote (or cause to be voted) its 3,975,000
shares of Common Stock in favor of the Merger and the Merger
Agreement; (2) to vote (or cause to be voted) such shares of
Common Stock against any merger agreement (other than the Merger
Agreement) or merger or similar transaction (other than the
Merger); (3) not to sell, transfer, pledge, assign or otherwise
dispose of, or enter into any contract, option or other
arrangement with respect to the transfer of such shares of Common
Stock; (4) not to enter into any voting arrangement in connection
with any other takeover proposal; and (5) not to solicit,
initiate or encourage the submission of any takeover proposal or
participate in any discussions or negotiations regarding a
takeover proposal except to the extent consistent with the Merger
Agreement.
Pursuant to the Shareholders Agreement, Zell/Chilmark
has also agreed to execute, prior to the Merger, a letter
agreement (an "Affiliate Letter") pursuant to which Zell/Chilmark
will, if the Merger is to be accounted for as a pooling of
interests, (i) represent and confirm that it has not sold,
transferred or otherwise disposed of any shares of Common Stock
in the 30 days prior to the date of such Affiliate Letter and
(ii) agree not to sell, transfer or otherwise dispose of any shares
of stock of Fred Meyer received in the Merger ("Merger Stock")
Page 2 of 11 Pages
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until after such time as financial results covering at least 30
days of combined operations of the Issuer and Fred Meyer have
been published by Fred Meyer. Such Affiliate Letter will also
contain Zell/Chilmark's agreement not to sell, assign or transfer
any shares of Merger Stock except (i) pursuant to an effective
registration statement, (ii) in conformity with Rule 145 under
the Securities Act of 1933, as amended (the "Act"), or (iii) in a
transaction meeting certain conditions which is not required to
be registered under the Act.
The Shareholders Agreement, including the foregoing
obligations, terminate upon the earliest of (a) the termination
of the Merger Agreement, (b) the withdrawal, modification or
amendment by the Board of Directors of the Issuer in any respect
adverse to Fred Meyer of the Board's approval or recommendation
of the Merger and the Merger Agreement and (c) the effective time
of the Merger.
The Issuer and the Board of Directors of the Issuer,
by action of its independent directors, waived the provisions of
the Standstill Agreement to the extent necessary to permit the
execution by Zell/Chilmark of the Shareholders Agreement and the
performance by Zell/Chilmark of its obligations thereunder.
The summary contained in this Statement of certain
provisions of the Shareholders Agreement is not intended to be
complete and is qualified in its entirety by reference to the
Shareholders Agreement attached as Exhibit 4 hereto and
incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
Exhibit 4 - Shareholders Agreement, dated as of
November 6, 1997, between Fred Meyer
and Zell/Chilmark.
Page 3 of 11 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in the statement
is true, complete and correct.
Dated: November 12, 1997
Zell/Chilmark Fund, L.P.
By: ZC Limited Partnership,
general partner
By: ZC Partnership,
general partner
By: ZC, Inc.,
general partner
By: /s/ Sheli Z. Rosenberg
---------------------------
Name: Sheli Z. Rosenberg
Title: Vice President
Page 4 of 11 Pages
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EXHIBIT INDEX
Exhibit Page
Number Description Number
- ------ ----------- ------
1 Recapitalization and Stock Purchase *
and Sale Agreement, dated as of
January 14, 1995.
2 Stock Purchase and Sale Agreement, *
dated as of January 14, 1995.
3 Standstill Agreement, dated as of *
January 14, 1995.
4 Shareholders Agreement, dated as 6
of November 6, 1997.
- -----------
* Previously filed.
Page 5 of 11 Pages
Exhibit 4
---------
SHAREHOLDERS AGREEMENT, dated as of November 6, 1997,
between FRED MEYER, INC., a Delaware corporation ("Parent"), and
ZELL/CHILMARK FUND L.P. ("Shareholder").
WHEREAS, Parent, Q-Acquisition Corp., a Washington
corporation and a wholly owned subsidiary of Parent ("Sub"), and
Quality Food Centers, Inc., a Washington corporation (the
"Company"), propose to enter into an Agreement and Plan of Merger
dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement"; capitalized terms used but
not defined herein shall have the meanings set forth in the
Merger Agreement) providing for the merger of Sub with and into
the Company (the "Merger"), upon the terms and subject to the
conditions set forth in the Merger Agreement;
WHEREAS, Shareholder owns 3,975,000 shares of Common
Stock, par value $.001 per share, of the Company (the "Company
Common Stock") (such shares of Company Common Stock, together
with any other shares of capital stock of the Company acquired by
such Stockholder after the date hereof and during the term of
this Agreement, being collectively referred to herein as the
"Subject Shares"); and
WHEREAS, as a condition to its willingness to enter
into the Merger Agreement, Parent has requested that Shareholder
enter into this Agreement;
NOW, THEREFORE, to induce Parent to enter into, and in
consideration of its entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties
and agreements contained herein, the parties agree as follows:
1. Representations and Warranties of Shareholder.
Shareholder hereby represents and warrants to Parent as of the
date hereof in respect of itself as follows:
(a) Authority. The Shareholder has all requisite power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Shareholder and
constitutes a valid and binding obligation of the Shareholder
enforceable in accordance with its terms. Except for the
Standstill Agreement, dated as of January 14, 1995 (the
"Standstill Agreement"), by and between the Company and
Shareholder (the relevant provisions of which have been waived by
the Company to permit Shareholder to enter into and perform this
Agreement, as set forth in the agreement between the Company and
Shareholder dated November 6, 1997, the execution and delivery of
this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any
provision of, any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's
property or assets.
(b) The Subject Shares. The Shareholder is the record
and beneficial owner of, and has good and marketable title to,
the Subject Shares, free and clear of any Encumbrances.
Page 6 of 11 Pages
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The Shareholder does not own, of record or beneficially, any
shares of capital stock of the Company other than the Subject
Shares. The Shareholder has the sole right to vote, and the sole
power of disposition with respect to, such Subject Shares, and
none of such Subject Shares is subject to any voting trust or
other agreement, arrangement or restriction with respect to the
voting or disposition of such Subject Shares, except for the
Standstill Agreement and except as contemplated by this
Agreement.
2. Representations and Warranties of Parent. Parent
hereby represents and warrants to Shareholder that Parent has all
requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent, and the
consummation of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Parent. This Agreement has been duly executed and delivered by
Parent and constitutes a valid and binding obligation of Parent
enforceable in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance with the terms
hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time or both) under
any provision of, the certificate of incorporation or by-laws of
Parent, any trust agreement, loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable to
Parent or to Parent's property or assets.
3. Covenants of Shareholder. Until the termination of
this Agreement in accordance with Section 7, Shareholder agrees as
follows:
(a) At any meeting of shareholders of the Company
called to vote upon the Merger and the Merger Agreement or at any
adjournment thereof or in any other circumstances upon which a
vote, consent or other approval with respect to the Merger and
the Merger Agreement is sought, the Shareholder shall be present
(in person or by proxy) and shall vote (or cause to be voted) the
Subject Shares in favor of the Merger, the adoption by the
Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the
Merger Agreement.
(b) At any meeting of shareholders of the Company or
at any adjournment thereof or in any other circumstances upon
which the Shareholder's vote, consent or other approval is
sought, the Shareholder shall vote (or cause to be voted) the
Subject Shares against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding-up of or by
the Company or any other takeover proposal (collectively,
"Takeover Proposal") or (ii) any amendment of the Company's
certificate of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries,
which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify the Merger,
the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement or change in any manner
the voting rights of any class of capital stock of the
Page 7 of 11 Pages
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Company. The Shareholder further agrees not to commit or agree to
take any action inconsistent with the foregoing.
(c) Except as provided in the immediately succeeding
sentence of this Section 3(c), the Shareholder agrees not to (i)
sell, transfer, pledge, assign or otherwise dispose of (including
by gift) (collectively, "Transfer"), or enter into any contract,
option or other arrangement (including any profit-sharing
arrangement) with respect to the Transfer of, the Subject Shares
to any person other than pursuant to the terms of the Merger or
(ii) enter into any voting arrangement, whether by proxy, voting
agreement or otherwise, in connection with, directly or
indirectly, any Takeover Proposal and agrees not to commit or
agree to take any of the foregoing actions.
(d) During the term of this Agreement, the Shareholder
shall not, nor shall it permit any of its affiliates or any
director, officer, employee, investment banker, attorney or other
adviser or representative of the Shareholder to, (i) directly or
indirectly solicit, initiate or encourage the submission of, any
Takeover Proposal or (ii) directly or indirectly participate in
any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any
Takeover Proposal. Notwithstanding the foregoing provisions of
this Section 3(d), Shareholder and all other persons described in
the first sentence of this Section 3(d), shall be entitled to
take all actions and to exercise all rights with respect to any
Transaction as the Company may take or exercise pursuant to
Section 5.4 of the Merger Agreement; provided, that the Company,
in connection with such actions and the exercise of such rights,
complies with Section 5.4 of the Merger Agreement.
(e) Until after the Merger is consummated or the
Merger Agreement is terminated, the Shareholder shall use all
reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other
transactions contemplated by the Merger Agreement.
4. Affiliate Letter. Shareholder shall execute and
deliver the agreement contemplated by the last sentence of Section
5.11(a) of the Merger Agreement.
5. Further Assurances. Shareholder will, from time to
time, execute and deliver, or cause to be executed and delivered,
such additional or further consents, documents and other
instruments as Parent may reasonably request for the purpose of
effectively carrying out the transactions contemplated by this
Agreement.
6. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned
by any of the parties without the prior written consent of
Page 8 of 11 Pages
<PAGE>
the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
7. Termination. This Agreement shall terminate upon the
earlier of (a) the termination of the Merger Agreement, (b) the
withdrawal, modification or amendment by the Board of Directors
of the Company in any respect adverse to Parent or Sub of its
approval or recommendation of the Merger Agreement, the Merger or
any of the transactions contemplated by the Merger Agreement or
(c) the Effective Time.
8. Waiver of Appraisal and Dissenter's Rights. Until
the termination of this Agreement in accordance with Section 7,
Shareholder hereby waives and agrees not to exercise any rights
of appraisal or rights to dissent from the Merger that
Shareholder may have with respect to Shareholder's Subject
Shares.
9. General Provisions.
(a) Amendments. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally or sent by overnight courier (providing
proof of delivery) to Parent in accordance with Section 8.2 of
the Merger Agreement and to the shareholders at their respective
addresses set forth on Schedule A attached hereto (or at such
other address for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section to
this Agreement unless otherwise indicated. The headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when two or
more of the counterparts have been signed by each of the parties
and delivered to the other party, it being understood that each
party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred
to herein) (i) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Delaware regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
10. Shareholder Capacity. No designees of Shareholder
who is or becomes during the term hereof a director or officer
of the Company makes any agreement or
Page 9 of 11 Pages
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understanding herein in its capacity as such director or officer.
Shareholder signs solely in his capacity as the record holder and
beneficial owner of Shareholder's Subject Shares and nothing
herein shall limit or affect any actions taken by any designee of
Shareholder in his or her capacity as an officer or director of
the Company to the extent specifically permitted by the Merger
Agreement.
11. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
court of the United States located in the State of Delaware or in
a Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located
in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party
will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court; (iii)
agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court
other than a Federal court sitting in the state of Delaware or a
Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
Page 10 of 11 Pages
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IN WITNESS WHEREOF, Parent has caused this Agreement
to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first
written above.
FRED MEYER, INC.
By: /s/ Kenneth Thrasher
-------------------------------
Name: Kenneth Thrasher
Title: Executive Vice President
Shareholder:
ZELL/CHILMARK FUND L.P.
By: ZC Limited Partnership,
general partner
By: ZC Partnership,
general partner
By: ZC Inc., a general partner
By: /s/ Sheli Z. Rosenberg
-------------------------------
Name: Sheli Z. Rosenberg
Title: Vice President
Page 11 of 11 Pages
