SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SMITH'S FOOD & DRUG CENTERS, INC.
______________________________
(Name of Issuer)
Class B Common Stock, $.01 Par Value
____________________________
(Title of Class of Securities)
832388-10-2
___________________________
(CUSIP Number)
Michael C. Frei
Senior Vice President and General Counsel
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, Utah 84104
(801) 974-1400
________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 11, 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: [_]
Note. Six copies of this statement, including all exhibits, should be
filed with the Securities and Exchange Commission. See Rule 13d-1 (a) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Act" ) or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
(Continued on following pages)
(Page 1 of 14 Pages)
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 2 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Jeffrey P. Smith
S.S. ####-##-####
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 1,438,447
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,438,447
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,438,447
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.7%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 3 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Fred L. Smith
S.S. ####-##-####
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 911,754
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
17,073
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 911,754
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
17,073
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
928,827
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 4 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Richard D. Smith
S.S. ####-##-####
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 654,537
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 654,537
PERSON -------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
654,537
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 5 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Dee Glen Smith Marital Trust
I.R.S. Identification #87-6198584
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 224,287
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 224,287
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
224,287
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO (TRUST)
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 6 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Trust for the Children of Jeffrey P. Smith
I.R.S. Identification #87-6199200
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 560,353
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 560,353
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
560,353
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.5%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO (TRUST)
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 7 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Trust for the Children of Fred L. Smith
I.R.S. Identification #87-6199255
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 560,353
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 560,353
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
560,353
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.5%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO (TRUST)
- - ------------------------------------------------------------------------------
<PAGE>
- - ----------------------- ---------------------
CUSIP NO. 832388-10-2 SCHEDULE 13D PAGE 8 OF 14
- - ----------------------- ---------------------
- - ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Trust for the Children of Richard D. Smith
I.R.S. Identification #87-6199201
- - ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
- - ------------------------------------------------------------------------------
3 SEC USE ONLY
- - ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
NA
- - ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
- - ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
- - ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 483,952
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 483,952
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- - ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
483,952
- - ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
- - ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
- - ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO (TRUST)
- - ------------------------------------------------------------------------------
<PAGE>
GENERAL.
This Schedule 13D is being jointly filed by Jeffrey P. Smith, Fred L.
Smith, Richard D. Smith, Dee Glen Smith Marital Trust, Trust for the Children
of Jeffrey Paul Smith, Trust for the Children of Richard Dee Smith and Trust
for the Children of Fred Lorenzo Smith (all of such persons or entities are
collectively referred to herein as the "Reporting Persons"). The Reporting
Persons may be deemed to be members of a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended. Prior to May 11,
1997, each of the Reporting Persons (except for the Dee Glen Smith Marital
Trust) filed a Schedule 13G to report the ownership of the Company's capital
stock by such Reporting Person.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Class B Common Stock, par value $.01 per
share ("Class B Common Stock"), of Smith's Food & Drug Centers, Inc., a
Delaware corporation (the "Company"). The principal executive offices of the
Company are located at 1550 South Redwood Road, Salt Lake City, Utah 84104.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed jointly by the Reporting Persons.
(b) The principal business address of each of the Reporting Persons is
c/o Smith's Food & Drug Centers, Inc., 1550 South Redwood Road, Salt Lake City,
Utah 84104.
The Dee Glen Smith Marital Trust was formed under Utah law. The Dee
Glen Smith Marital Trust manages trust investments for the primary benefit of
Ida Smith, the beneficiary. The trustee of the Dee Glen Smith Marital Trust is
Jeffrey P. Smith.
The Trust for the Children of Jeffrey Paul Smith was formed under
Utah law. The Trust for the Children of Jeffrey Paul Smith manages trust
investments for the primary benefit of Sean Dee Smith, Jaci Leigh Smith, and
Joshua Jeff Smith, the beneficiaries. The trustee of the Trust for the
Children of Jeffrey Paul Smith is Jeffrey P. Smith.
The Trust for the Children of Fred Lorenzo Smith was formed under
Utah law. The Trust for the Children of Fred Lorenzo Smith manages trust
investments for the primary benefit of Fred Lloyd Smith, Zachary Dee Smith, and
Stacy Elaine Smith, the beneficiaries. The trustee of the Trust for the
Children of Fred Lorenzo Smith is Fred L. Smith.
The Trust for the Children of Richard Dee Smith was formed under Utah
law. The Trust for the Children of Richard Dee Smith manages trust investments
for the primary benefit of Ryan Dee Smith, Scott Wright Smith, and Nicholas Dee
Glen Smith, the beneficiaries. The trustee of the Trust for the Children of
Richard Dee Smith is Richard D. Smith.
(c) Jeffrey P. Smith is Chairman of the Board of the Company and Fred L.
Smith is a director. Richard D. Smith is retired.
(d) None of the Reporting Persons has during the last five years been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(Page 9 of 14)
(e) None of the Reporting Persons has during the last five years been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Each of the individuals referred to in paragraph (a) above is a
United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
All shares reported herein were received by the Reporting Persons through
gift or inheritance except for 5,141 shares of Class B Common Stock held by
Jeffrey P. Smith which were purchased with his personal funds. Prior to
May 11, 1997, each of the Reporting Persons (except for the Dee Glen Smith
Marital Trust) filed a Schedule 13G to report the ownership of the Company's
capital stock by such Reporting Person.
ITEM 4. PURPOSE OF TRANSACTION.
As further described below in Item 6, the Reporting Persons have entered
into a Voting Agreement (the "Voting Agreement"), dated as of May 11, 1997,
with certain other stockholders and Fred Meyer, Inc., a Delaware corporation
("Fred Meyer"). The Voting Agreement was entered into by the parties in
connection with the Merger Agreement (as defined herein) and as more fully
described in Item 6 below.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of May 11, 1997, Jeffrey P. Smith beneficially owns 1,433,306
shares of Class A Common Stock, $.01 par value ("Class A Common Stock") which
is immediately convertible into Class B Common Stock on a one-for-one basis and
5,141 shares of Class B Common Stock, representing approximately 10.7% of the
outstanding Class B Common Stock; Fred L. Smith beneficially owns 928,827
shares of Class A Common Stock which is immediately convertible into Class B
Common Stock on a one-for-one basis, representing approximately 7.2% of the
outstanding Class B Common Stock; and Richard D. Smith beneficially owns
654,537 shares of Class A Common Stock, which is immediately convertible into
Class B Common Stock on a one-for-one basis, representing approximately 5.2% of
the outstanding Class B Common Stock. The Dee Glen Smith Marital Trust
beneficially owns 224,287 shares of Class A Common Stock, which is immediately
convertible into Class B Common Stock on a one-for-one basis, representing
approximately 1.8% of the outstanding Class B Common Stock; the Trust for the
Children of Jeffrey Paul Smith beneficially owns 560,353 shares of Class A
Common Stock, which is immediately convertible into Class B Common Stock on a
one-for-one basis, representing approximately 4.5% of the outstanding Class B
Common Stock; the Trust for the Children of Fred L. Smith beneficially owns
560,353 shares of Class A Common Stock, which is immediately convertible into
Class B Common Stock on a one-for-one basis, representing approximately 4.5% of
the outstanding Class B Common Stock; and the Trust for the Children of Richard
D. Smith beneficially owns 483,952 shares of Class A Common Stock, which is
immediately convertible into Class B Common Stock on a one-for-one basis,
representing approximately 3.9% of the outstanding Class B Common Stock.
As a result of the Voting Agreement, some or all of the parties thereto
may be deemed to constitute a "group." A group consisting of such persons
may be deemed to beneficially own all shares beneficially owned by each of
(Page 10 of 14)
the persons constituting such a group. The Reporting Persons disclaim the
existance of such a group and, except to the extent set forth above, disclaim
beneficial ownership of shares of Class A Common Stock, Class B Common Stock
and Series I Preferred Stock owned by any other person. The Reporting
Persons also disclaim any transfer of the beneficial ownership with respect
to such shares to any other person as a result of the Voting Agreement,
including Fred Meyer.
(b) Jeffrey P. Smith has sole power to vote and dispose of 648,666 shares
of Class A Common Stock and 5,141 shares of Class B Common Stock. In his
capacity as trustee, Jeffrey P. Smith has the sole power to vote and dispose of
(i) 560,353 shares of Class A Common Stock on behalf of the Trust for the
Children of Jeffrey Paul Smith and (ii) 224,287 shares of Class A Common Stock
on behalf of the Dee Glen Smith Marital Trust. Therefore, Jeffrey P. Smith has
the power to vote and dispose of 1,433,306 shares of Class A Common Stock and
5,141 of Class B Common Stock.
Fred L. Smith has sole power to vote and dispose of 252,708 shares of
Class A Common Stock. Fred L. Smith's wife, Elaine Smith, is the record owner
of 17,073 shares of Class A Common Stock and Fred L. Smith has no voting power
over such shares. In his capacity as trustee, Fred L. Smith has the sole power
to vote and dispose of (i) 560,353 shares of Class A Common Stock on behalf of
the Trust for the Children of Fred Lorenzo Smith, (ii) 41,353 shares of Class A
Common Stock on behalf of the Fred Lloyd Smith Trust, (iii) 28,670 shares of
Class A Common Stock on behalf of the Staci Elaine Smith Trust and (iv) 28,670
shares of Class A Common Stock on behalf of the Zachary Dee Smith Trust.
Therefore, Fred L. Smith has the power to vote and dispose of 911,754 shares of
Class A Common Stock.
In his capacity as trustee, Richard D. Smith has the sole power to vote
and dispose of (i) 483,952 shares of Class A Common Stock on behalf of the
Trust for the Children of Richard Dee Smith, (ii) 48,079 shares of Class A
Common Stock on behalf of the Sean D. Smith Trust, (iii) 61,253 shares of Class
A Common Stock on behalf of the Jaci Leigh Smith Trust and (iv) 61,253 shares
of Class A Common Stock on behalf of the Joshua Jeffrey Smith Trust.
Therefore, Richard D. Smith has the power to vote and dispose of 654,537 shares
of Class A Common Stock.
Pursuant to the Amended and Restated Standstill Agreement, dated as of
January 29, 1996 (the "Standstill Agreement" ), by and among the Company, the
Reporting Persons and the Yucaipa Group (as defined therein), the parties
thereto holding an aggregate of 3,016,670 shares of Class A Common Stock,
2,256,955 shares of Class B Common Stock and 3,253,623 shares of Series I
Preferred Stock are required to vote their respective shares to elect to the
Company's seven-member Board of Directors two persons nominated by the Yucaipa
Group and two persons nominated by the Smith family. As a result of the
Standstill Agreement, some or all of the parties thereto may be deemed to
constitute a "group." A group consisting of such persons may be deemed to
beneficially own all shares beneficially owned by each of the persons
constituting such a group. The Reporting Persons disclaim the existence
of such a group and, except to the extent set forth above, disclaim beneficial
ownership of shares of Class A Common Stock, Class B Common Stock and Series I
Preferred Stock owned by any other person.
The foregoing summary of the Standstill Agreement is qualified in its
entirety by reference to the agreement attached hereto as Exhibit 3 and
incorporated herein by reference.
(c) There have not been any transactions in the Class B Common Stock
effected by or for the account of the Reporting Persons during the past 60
days.
(Page 11 of 14)
(d) Except as stated in this Item 5, to the best knowledge of the
Reporting Persons, no other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Class B Common Stock owned by the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On May 11, 1997, the Company and Fred Meyer entered into an Agreement and
Plan of Reorganization and Merger (the "Merger Agreement"), a copy of which
is attached as Exhibit 99.1 to the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission on May 14, 1997. Prior to the
execution of the Merger Agreement, the Reporting Persons and certain other
stockholders (collectively, together with the Reporting Persons, the
"Stockholders" ) of the Company entered into a Voting Agreement (the "Voting
Agreement") with Fred Meyer pursuant to which the Stockholders agreed, among
other things, to vote the shares of the Company's capital stock owned or
acquired by them (i) in favor of approval and adoption of the Merger Agreement
and (ii) against any other merger agreement or Acquisition Proposal (as defined
in the Voting Agreement) and against any amendment of the Company's certificate
of incorporation or bylaws or any other proposals or transactions which would
in any manner impede the transactions contemplated by the Merger Agreement. In
addition, until the termination of the Voting Agreement, the Stockholders
agreed not to convert or dispose of, or enter into any other voting agreement
with respect to, their shares of the Company's capital stock, subject to
certain limited exceptions. In the event that the Merger Agreement is
terminated pursuant to Sections 7.2(c) or 7.4 thereof, and at the time of such
termination less than 50.1% of the aggregate voting power of the Company is
subject to the Voting Agreements (as defined below), each Stockholder has
agreed to pay to Fred Meyer an amount equal to the Profit (as defined in the
Voting Agreement) of such Stockholder from the consummation of any Acquisition
Proposal within 18 months of such termination. Certain other stockholders of
the Company have entered into similar voting agreements (collectively, together
with the Voting Agreement, the "Voting Agreements") with Fred Meyer. As of
May 11, 1997, the shares subject to the Voting Agreements represented
approximately 70% of the aggregate voting power of the Company.
The foregoing summary of the Voting Agreement is qualified in its entirety
by reference to the agreement which is attached hereto as an exhibit and
incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Joint Filing Agreement dated as of May 21, 1997.
Exhibit 2. Voting Agreement, dated as of May 11, 1997, by and among
Fred Meyer, Inc. and the persons listed on the signature
pages thereto.
Exhibit 3. Standstill Agreement dated as of January 29, 1996
(incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-3, File No. 333-01601).
(Page 12 of 14)
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 21, 1997 /S/ JEFFREY P. SMITH
--------------------
JEFFREY P. SMITH
/S/ FRED L. SMITH
-----------------
FRED L. SMITH
/S/ RICHARD D. SMITH
--------------------
RICHARD D. SMITH
THE DEE GLEN SMITH MARITAL TRUST
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF JEFFREY P. SMITH
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF FRED L. SMITH
By: /S/ FRED L. SMITH
-----------------
Name: Fred L. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF RICHARD D. SMITH
By: /S/ RICHARD D. SMITH
--------------------
Name: Richard D. Smith
Title: Trustee
(Page 13 of 14)
EXHIBIT INDEX
Exhibit 1. Joint Filing Agreement dated as of May 21, 1997.
Exhibit 2. Voting Agreement, dated as of May 11, 1997, by and among
Fred Meyer, Inc. and the persons listed on the signature
pages thereto.
Exhibit 3. Standstill Agreement dated as of January 29, 1996
(incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-3, File No. 333-01601).
(Page 14 of 14)
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to the joint
filing with all other Reporting Persons (as such term is defined in the
Schedule 13D referred to below) on behalf of each of them of a statement on
Schedule 13D (including amendments thereto) with respect to the Class B common
stock, par value $.01 per share (the "Class B Common Stock" ), of Smith's Food
& Drug Centers, Inc., a Delaware corporation, and that this Agreement may be
included as an Exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as
of May 21, 1997.
/S/ JEFFREY P. SMITH
--------------------
JEFFREY P. SMITH
/S/ FRED L. SMITH
-----------------
FRED L. SMITH
/S/ RICHARD D. SMITH
--------------------
RICHARD D. SMITH
THE DEE GLEN SMITH MARITAL TRUST
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF JEFFREY P. SMITH
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF FRED L. SMITH
By: /S/ FRED L. SMITH
-----------------
Name: Fred L. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF RICHARD D. SMITH
By: /S/ RICHARD D. SMITH
--------------------
Name: Richard D. Smith
Title: Trustee
1
EXHIBIT 2
VOTING AGREEMENT
among
FRED MEYER, INC.
and
EACH OF THE INDIVIDUALS AND ENTITIES
LISTED ON THE SIGNATURE PAGE HERETO
Dated as of May 11, 1997
<PAGE>
VOTING AGREEMENT (this "Agreement") dated as of May 11, 1997, among Fred
Meyer, Inc., a Delaware corporation ("Fred Meyer") and the individuals and
entities (other than the University of Utah and the Corporation of the
President of the Church of Jesus Christ of Latter-Day Saints (the "Other
Stockholders")) listed on Schedule A attached hereto and each of such
individuals and entities being a "Stockholder" and, collectively, the
"Stockholders").
WHEREAS, Fred Meyer and Smith's Food & Drug Centers, Inc., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Reorganization and Merger dated as of the date hereof (as the same may be
amended or supplemented in a manner not adverse to the Stockholders, the
"Reorganization Agreement"; capitalized terms used but not defined herein shall
have the meanings set forth in the Reorganization Agreement) providing for the
formation of a new Delaware holding company, Meyer-Smith Holdco, Inc.
("Holdings"), the formation of two subsidiaries wholly-owned by Holdings ("Fred
Meyer Merger Sub, Inc." and "Smith's Merger Sub, Inc.") and the simultaneous
merger of Fred Meyer Merger Sub, Inc. with and into Fred Meyer and Smith's
Merger Sub, Inc. with and into the Company (the "Merger") so that each of Fred
Meyer and the Company become wholly-owned subsidiaries of Holdings, upon the
terms and subject to the conditions set forth in the Reorganization Agreement;
WHEREAS, pursuant to the Merger the Common Stock (as defined below) will
be converted into shares of common stock, par value $.01 per share, of Holdings
and each share of the Series I Preferred Stock (as defined below) shall be
converted into the right to receive thirty-three and one-third cents ($.33
1/3) (the "Preferred Consideration)";
WHEREAS, simultaneously with the execution hereof, Fred Meyer is entering
into voting agreements (the "Other Voting Agreements", and together with this
Agreement, the "Voting Agreements") with the Other Stockholders, dated as of
the date hereof;
WHEREAS, immediately prior to the Effective Time, Fred Meyer will assign
each of the Voting Agreements and all of its rights, interests and obligations
hereunder and thereunder to Holdings;
WHEREAS, each Stockholder and each Other Stockholder owns beneficially and
(except as set forth on Schedule A attached hereto) of record (i) the number of
shares of Class A Common Stock, par value $.01 per share, of the Company (the
"Class A Common Stock"), of Class B Common Stock, par value $.01 per share, of
the Company (the "Class B Common Stock"), of Class C Common Stock, par value
$.01 per share, of the Company (the "Class C Common Stock" and, together with
the Class A Common Stock and the Class B Common Stock, the "Common Stock") and
of Series I Preferred Stock, par value $.01 per share, of the Company (the
"Series I Preferred Stock") set forth opposite his or its name on Schedule A
attached hereto (such shares of Common Stock and of Series I Preferred Stock,
together with any other shares of capital stock of the Company acquired
(including, without limitation, through the exercise of Options or Warrants or
by reason of any split, reclassification, stock dividend or other distribution
with respect to the capital stock of the Company) by such Stockholder or such
Other Stockholder after the date hereof and during the term of the Voting
Agreements, being collectively referred to herein as the "Subject Shares") and
(ii) options issued under any Stock Option Plan (the "Options") and warrants
(the "Warrants") issued under the Warrant Agreement, dated as of May 23, 1996,
between the Company and The Yucaipa Companies, a California general partnership
(the "Partnership") (the "Warrant Agreement") to acquire the number of shares
of Common Stock or of Series I Preferred Stock, if any, set forth opposite his
or its name on Schedule A attached hereto;
WHEREAS, the Common Stock and the Series I Preferred Stock set forth on
Schedule A attached hereto represent at least 50.1% of the voting power of the
issued and outstanding shares of capital stock of the Company entitled to vote
on each of the matters set forth in Section 3 hereof; and
WHEREAS, as a condition to its willingness to enter into the
Reorganization Agreement, Fred Meyer has required that the Other Stockholders
enter into the Other Voting Agreements and that each Stockholder enter into
this Agreement.
NOW, THEREFORE, to induce Fred Meyer to enter into, and in consideration
of its entering into, the Reorganization 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 each Stockholder. Each Stockholder
hereby, severally and not jointly, represents and warrants to Fred Meyer as of
the date hereof in respect of himself or itself as follows:
(a) Authority. The Stockholder 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 Stockholder (or in the case of any Stockholder which
is a trust, by the trustee on behalf of such trust, or in the case of any
Stockholder which is a partnership by a general partner on behalf of such
partnership) and constitutes a valid and binding obligation of the
Stockholder 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, 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 Stockholder or to the Stockholder's property
or assets. If the Stockholder is married and the Stockholder's Subject
Shares, Option or Warrants constitute community property or otherwise need
spousal or other approval for this Agreement to be legal, valid and
binding, this Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and binding agreement of, the Stockholder's
spouse, and is enforceable against such spouse in accordance with its
terms. No trust which is a Stockholder requires the consent of any
beneficiary to the execution and delivery of this Agreement or to the
consummation of the transactions contemplated hereby.
(b) The Subject Shares, Options and Warrants. The Stockholder is
the beneficial and (except as set forth on Schedule A attached hereto)
record owner of, and has good and marketable title to, the Subject Shares,
Options and Warrants set forth opposite such Stockholder's name on
Schedule A attached hereto, free and clear of any claims, liens,
encumbrances and security interests whatsoever (other than as set forth on
Schedule A attached hereto). The Stockholder does not own, of record or
beneficially, any shares of capital stock of the Company other than the
Subject Shares and the shares of Common Stock subject to any Options or
Warrants set forth opposite such Stockholder's name on Schedule A attached
hereto. The Stockholder has the sole right to vote 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 of such
Subject Shares, except as contemplated by this Agreement or as otherwise
set forth on Schedule A attached hereto. The Partnership has not
transferred, sold, pledged, assigned or otherwise disposed of (including
by gift) (collectively, "Transfer") any Warrants issued to it pursuant to
the Warrant Agreement and the Warrants set forth opposite the
Partnership's name on Schedule A attached hereto constitute all of the
Warrants issued and outstanding under the Warrant Agreement.
2. Representations and Warranties of Fred Meyer. Fred Meyer hereby
represents and warrants to each Stockholder that Fred Meyer 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 Fred Meyer, and the consummation of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on the part
of Fred Meyer. This Agreement has been duly executed and delivered by Fred
Meyer and constitutes a valid and binding obligation of Fred Meyer enforceable
in accordance with its terms.
3. Covenants of each Stockholder. Until the termination of this
Agreement in accordance with Section 7 hereof, each Stockholder, severally and
not jointly, agrees as follows:
(a) Vote for the Merger. At any duly noticed meeting of
stockholders of the Company called to vote upon the Merger and the
Reorganization Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Reorganization
Agreement is sought, the Stockholder shall, including by initiating a
written consent solicitation if requested by Fred Meyer, vote (or cause to
be voted) the Subject Shares in favor of the Merger, the adoption by the
Company of the Reorganization Agreement and the approval of the terms
thereof and, to the extent presented to the stockholders of the Company
for a vote, each of the other transactions contemplated by the
Reorganization Agreement. The Stockholder hereby waives any appraisal
rights granted pursuant to Section 262 of the General Corporation Law of
the State of Delaware (the "DGCL") (or any successor provision) to which
it may otherwise be entitled as a result of the Merger or the other
transactions contemplated by the Reorganization Agreement.
(b) Vote Against Acquisition Proposals. At any duly noticed meeting
of stockholders of the Company or at any adjournment thereof or in any
other circumstances upon which the Stockholder's vote, consent or other
approval is sought, the Stockholder shall be present (in person or by
proxy) and shall vote (or cause to be voted) the Subject Shares against
(i) any merger agreement or merger (other than the Reorganization
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 Acquisition Proposal as such
term is defined in the Reorganization Agreement relating to the Company
(an "Acquisition 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 Reorganization Agreement or any of the other
transactions contemplated by the Reorganization Agreement or change in any
manner the voting rights of any class of capital stock of the Company.
Subject to Section 9, the Stockholder further agrees not to commit or
agree to take any action inconsistent with the foregoing.
(c) Transfer of Subject Shares, Options and Warrants. Except
pursuant to this Agreement and except as provided in the immediately
succeeding sentence of this Section 3(c), the Stockholder agrees not to
(i) Transfer, or enter into any contract, option or other arrangement
(including any profit sharing arrangement) with respect to the Transfer
of, the Subject Shares, any Option or Warrant or any shares of Common
Stock subject to any Option or Warrant to any person, other than pursuant
to the terms of the Merger, (ii) enter into any voting arrangement,
whether by proxy, power-of-attorney, voting agreement, voting trust or
otherwise, in connection with, directly or indirectly, any Acquisition
Proposal or (iii) convert (or cause to be converted) any of the Subject
Shares consisting of Class A Common Stock into Class B Common Stock, in
whole or in part, and agrees not to commit or agree to take any of the
foregoing actions. Notwithstanding the foregoing, the Stockholder shall
have the right (i) for estate planning purposes, to Transfer Subject
Shares to a transferee if and only if such Transfer will not result in the
automatic conversion of Class A Common Stock or Class C Common Stock to
Class B Common Stock or the reduction in the number of votes allocated to
the Series I Preferred Stock and only following the due execution and
delivery to Fred Meyer by each transferee of a legal, valid and binding
counterpart to this Agreement and (ii) to pledge such Subject Shares for
purposes of securing customary margin or similar loans (and other
customary steps related thereto, including transferring the certificate
evidencing the shares into the name of the lender or its nominee) if and
only if, in the case of the Class A Common Stock or the Series I Preferred
Stock, such pledge will not result in the automatic conversion of Class A
Common Stock to Class B Common Stock or the reduction in the number of
votes allocated to the Series I Preferred Stock and only following the
delivery to Fred Meyer of an acknowledgment by the pledgee of the
existence of this Agreement.
(d) No Solicitation. During the term of this Agreement, the
Stockholder shall not, nor shall it permit any of its Affiliates or any
director, officer, employee, investment banker, attorney or other adviser
or representative of any of the foregoing to, (i) directly or indirectly,
solicit, initiate or encourage the submission of, any Acquisition Proposal
or (ii) subject to the terms of Section 9, 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 Acquisition Proposal.
(e) Stockholder Assistance. Until the Merger is consummated or the
Reorganization Agreement is terminated, the Stockholder shall use all
reasonable efforts to assist and cooperate with the other parties to
consummate and make effective, in the most expeditious manner practicable,
the Merger and the other transactions contemplated by the Reorganization
Agreement, subject, in each case to the requirements of applicable laws,
regulations, decrees or other judicial process and subject to the
fiduciary obligations of any such Stockholder who is also an officer or
director of the Company in his capacity as such.
(f) Treatment of Certain Stockholder Profits. (i) In the event
that the Reorganization Agreement shall have been terminated at any time
pursuant to Section 7.4(a) thereof or Section 7.4(d) thereof, or is
terminated, at any time after an Acquisition Proposal is made, pursuant to
Section 7.2(c) thereof (regardless of whether such termination is by Fred
Meyer or the Company), Section 7.4(b) thereof or Section 7.4(c) thereof,
and at the time of such termination less than 50.1% of the voting power of
the issued and outstanding shares of capital stock of the Company entitled
to vote on each of the matters set forth in Section 3 hereof is subject to
valid and binding Voting Agreements in full force and effect in all
respects. Each Stockholder shall pay to Fred Meyer on demand an amount
equal to all profit (determined in accordance with Section 3(f) (ii) of
such Stockholder from the consummation of any Acquisition Proposal (an
"Acquisition Transaction") within 18 months of such termination.
(ii) For purposes of this Section 3(f), the profit of any
Stockholder from any Acquisition Transaction shall equal (A) the
aggregate consideration received by such Stockholder (or which such
Stockholder is legally entitled to receive) pursuant to such Acquisition
Transaction, valuing any non-cash consideration (including any residual
interest in the Company) at its fair market value on the date of such
consummation plus (B) the fair market value, on the date of disposition,
of all Subject Shares, Options and Warrants of such Stockholder and
shares of Common Stock acquired by such Stockholder upon exercise of any
Option or Warrant (less the exercise price thereof) disposed of after the
termination of the Reorganization Agreement and prior to the date of such
consummation less (C) the fair market value of the aggregate
consideration that would have been issuable or payable to such
Stockholder pursuant to the Reorganization Agreement in effect on the
date hereof, valued as of immediately prior to the first public
announcement of the termination of, or the intention of Fred Meyer or the
Company to terminate, the Reorganization Agreement, as if the Merger had
been consummated on the date of such public announcement. For purposes
of clause (C) above, the fair market value of the common stock of
Holdings that would have been received by the Stockholders pursuant to
the Reorganization Agreement as originally executed shall be deemed to be
the fair market value of the common stock, par value $.01 per share, of
Fred Meyer.
(iii) For purposes of this Section 3(f), the fair market
value of any non-cash consideration consisting of:
(A) securities listed on a national securities exchange or
traded on the NASDAQ/NMS shall be equal to the average
closing price per share of such security as reported on the
composite trading system of such exchange or by NASDAQ/NMS
for the five trading days ending on the trading day
immediately prior to the date of value determination; and
(B) consideration which is other than cash or securities of the
form specified in clause (A) of this Section 3(f) (iii)
shall be determined by a nationally recognized independent
investment banking firm mutually agreed upon by the parties
within 10 business days of the event requiring selection of
such banking firm; provided, however, that if the parties
are unable to agree within two business days after the date
of such event as to the investment banking firm, then the
parties shall each select one firm, and those firms shall
select a third investment banking firm, which third firm
shall make such determination; provided further, that the
fees and expenses of such investment banking firm shall be
borne equally by Fred Meyer, on the one hand, and the
Stockholders, on the other hand. The determination of the
investment banking firm shall be binding upon the parties.
(iv) Any payment of profit under this Section 3(f) shall (x) if
paid in cash, be paid by wire transfer of same day funds to an account
designated by Fred Meyer and (y) if paid through a mutually agreed
transfer of securities, to the extent such transfer is permitted by
applicable law and the transfer of such securities to Fred Meyer would not
adversely impact Fred Meyer, or the value of such securities, be paid
through delivery of such securities, suitably endorsed for transfer.
4. Affiliate Letter; Tax Certificates. Each Stockholder (other than any
Stockholder holding only shares of Series I Preferred Stock) shall execute and
deliver an Affiliate Letter contemplated by the Reorganization Agreement and
such tax certificates as may reasonably be requested by tax counsel for Fred
Meyer or for the Company in connection with the rendering of the tax opinions
contemplated by the Reorganization Agreement
5. Further Assurances. Each Stockholder 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 Fred Meyer or Holdings 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 the other parties, except that Fred Meyer may assign,
in its sole discretion, any or all of its rights, interests and obligations
hereunder to Holdings or to any direct or indirect wholly owned subsidiary of
Fred Meyer. 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 heirs, successors and assigns.
7. Termination. This Agreement shall terminate upon the earlier of (a)
the 18 month anniversary of the termination of the Reorganization Agreement or
(b) the Effective Time of the Merger; provided, however, that unless (x) the
Company is in material breach of its material obligations under the
Reorganization Agreement, (y) any Stockholder or any Other Stockholder is in
material breach of its material obligations under this Agreement or the Other
Voting Agreements, as the case may be or (z) a meeting of the Company's
stockholders (or any adjournment thereof) has been held to consider the Merger
and the other transactions contemplated by the Reorganization Agreement and the
Smith's Stockholder Approval was not obtained, this Agreement shall terminate
at the time the Reorganization Agreement is terminated (i) pursuant to Section
7.1 or 7.2(b) thereof, or (ii) by the Company (A) pursuant to Section 7.2(d)
thereof or (B) pursuant to Section 7.2(a) thereof (unless an Acquisition
Proposal is pending at the time of such termination) made) or (C) pursuant to
Section 7.3 thereof. Notwithstanding the foregoing, Section 3(f) shall (if
operative in accordance with its terms) survive the termination of the
Reorganization Agreement for the period of time specified therein.
8. 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, telecopied
(which is confirmed) or sent by overnight courier (providing proof of
delivery) to Fred Meyer in accordance with the notification provision
contained in the Reorganization Agreement and to the Stockholders 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 one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one 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 and other than Holdings, which is an
express beneficiary of this Agreement, 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.
(g) Public Announcements. Each Stockholder will consult with Fred
Meyer and use reasonable efforts to agree upon the text of any press
release, before issuing any press release or otherwise making public
statements with respect to the transactions contemplated by this Agreement
and the Reorganization Agreement and shall not issue any such press
release or make any such public statement without Fred Meyer's prior
consent, which consent shall not be unreasonably withheld, except as may
be required by applicable law (including requirements of stock exchanges
and other similar regulatory bodies).
(h) Severability. If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to any
extent, be held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions herein and the application thereof to any other
circumstances, shall remain in full force and effect, shall not in any way
be affected, impaired or invalidated, and shall be enforced to the fullest
extent permitted by law, and the parties hereto shall reasonably negotiate
in good faith a substitute term or provision that comes as close as
possible to the invalidated and unenforceable term or provision, and that
puts each party in a position as nearly comparable as possible to the
position each such party would have been in but for the finding of
invalidity or unenforceability, while remaining valid and enforceable.
9. Stockholder Capacity. No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his capacity as such director or officer.
Each Stockholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, or the general partner of a partnership which is the
beneficial owner of such Stockholder's Subject Shares or Options or Warrants
and nothing herein shall limit or affect any actions taken by a Stockholder in
his or its capacity as an officer or director of the Company to the extent
specifically permitted by the Reorganization Agreement. Nothing in this
Agreement shall be deemed to constitute a transfer of the beneficial ownership
of the Subject Shares by any Stockholder.
10. Enforcement. The parties agree, and the beneficiaries of each trust
which is a party hereto have agreed, 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 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, (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 and (v) appoints The Corporation Trust
Corporation as such party's agent for service of process in the State of
Delaware.
11. Each Stockholder owning Series I Preferred Stock hereby acknowledges
that it will receive the Preferred Consideration in the Merger and hereby
agrees to accept the Preferred Consideration in exchange for the cancellation
of its Series I Preferred Stock and to take such further actions as Fred Meyer
and the Company may request to evidence such agreement.
(Signature page follows)
<PAGE>
IN WITNESS WHEREOF, Fred Meyer has caused this Agreement to be signed by
its officer thereunto duly authorized and each Stockholder has signed this
Agreement or has caused this Agreement to be signed by its officer thereunto
duly authorized, all as of the date first written above.
FRED MEYER, INC.
By: /S/ ROBERT G. MILLER
--------------------
Name:
Title:
STOCKHOLDERS:
THE YUCAIPA COMPANIES
By: /S/ RONALD W. BURKLE
--------------------
Name:
Title: General Partner
YUCAIPA ARIZONA PARTNERS, L.P.
YUCAIPA SMITTY'S PARTNERS, L.P.
YUCAIPA SMITTY'S PARTNERS II, L.P.
YUCAIPA SSV PARTNERS, L.P.
By: THE YUCAIPA COMPANIES
as the General Partner of each of the
entities listed above
By: /S/ RONALD W. BURKLE
--------------------
Name:
Title: General Partner
/S/ JEFFREY P. SMITH
--------------------
JEFFREY P. SMITH
/S/ FRED L. SMITH
--------------------
FRED L. SMITH
/S/ RICHARD D. SMITH
--------------------
RICHARD D. SMITH
THE DEE GLENN MARITAL TRUST
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF JEFFREY P. SMITH
By: /S/ JEFFREY P. SMITH
--------------------
Name: Jeffrey P. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF FRED L. SMITH
By: /S/ FRED L. SMITH
-----------------
Name: Fred L. Smith
Title: Trustee
TRUST FOR THE CHILDREN OF RICHARD D. SMITH
By: /S/ RICHARD D. SMITH
--------------------
Name: Richard D. Smith
Title: Trustee
<PAGE>
<TABLE>
SCHEDULE A<FN1>
<CAPTION>
Shares of
Shares of Shares of Shares of capital Shares of
Class A Class B Common Series I stock capital stock
Common Stock Stock Preferred subject to subject to
Name Stock Options Warrants
---------------------------- ------------ -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
The Yucaipa Companies
10000 Santa Monica Boulevard 200,000 1,842,555<FN1>
5th Floor
Los Angeles, CA 90067
Yucaipa Arizona Partners, L.P. 273,582
c/o The Yucaipa Companies
10000 Santa Monica Boulevard
5th Floor
Los Angeles, CA 90067
Yucaipa Smitty's Partners, L.P. 300,667
c/o The Yucaipa Companies
10000 Santa Monica Boulevard
5th Floor
Los Angeles, CA 90067
Yucaipa Smitty's Partners II, 136,793
L.P.
c/o The Yucaipa Companies
10000 Santa Monica Boulevard
5th Floor
Los Angeles, CA 90067
Yucaipa SSV Partners, L.P. 1,340,772<FN2>
c/o The Yucaipa Companies
10000 Santa Monica Boulevard
5th Floor
Los Angeles, CA 90067
University of Utah 2,267,731
c/o Treasurer
University of Utah
407 Park Building
Salt Lake City, UT 84112
A-1
Corporation of the President 2,000,010
of the Church of Jesus
Christ of Latter-Day Saints
50 East North Temple
Salt Lake City, UT 84150
Jeffrey P. Smith 648,666 5,141
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84101
Fred L. Smith 252,708
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84101
Richard D. Smith
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
Dee Glen Smith Marital Trust I 224,287 3,253,623
c/o Ida W. Smith
1066 North East Capital Blvd.
Salt Lake City, UT 84103
Trust for the Children of 560,353
Jeffrey P. Smith
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
A-2
Trust for the Children of 560,353<FN3>
Fred L. Smith
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
Trust for the Children of 483,952
Richard D. Smith
c/o Smith's Food & Drug
Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
---------- --------- ---------- --------- ---------
Total Shares 2,730,319 2,256,955 7,521,364 1,842,555
========== ========= ========== ========= =========
Total Voting Power 27,303,190 2,256,955 75,213,640
========== ========= ========== ========= =========
<FN>
<FN1> No shares of Class C Common Stock have been issued. 1,842,555 shares of nonvoting class C
Common Stock are issuable upon exercise of the Yucaipa Warrant.
<FN2> Of this total, 660,000 shares are pledged to Goldman, Sachs & Co. for collateral purposes in
connection with a margin account.
<FN3> The children of Fred L. Smith have individual trusts of shares of Class A Common Stock.
Fred L. Smith is the trustee and the trusts are as follows: Fred Lloyd Smith Trust,
41,353 shares; Staci Elaine Smith Trust, 28,670 shares; and Zachary Dee Smith Trust, 28,670
shares.
A-3
</FN>
</TABLE>
