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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1996
REGISTRATION NO. 333-04049
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8/A. NO. 1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RYKOFF-SEXTON, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2134693
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(State or other jurisdiction or (IRS Employer
incorporation or organization) Identification No.)
1050 Warrenville Road
Lisle, Illinois, 60532-5201
(Address, including zip code of principal executive offices)
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AMENDED AND RESTATED MANAGEMENT STOCK OPTION PLAN
OF WS HOLDINGS CORPORATION
AMENDED AND RESTATED US FOODSERVICE INC. 1992 STOCK OPTION PLAN
AMENDED AND RESTATED US FOODSERVICE INC. 1993 STOCK OPTION PLAN
(Full title of plan)
------------------------------------
Mark Van Stekelenburg
President, Chairman of the Board and Chief Executive Officer
1050 Warrenville Road
Lisle, Illinois, 60532-5201
(708) 964-1414
(Name, and address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Neil I. Sell, Esq.
Maslon Edelman Borman & Brand,
a Professional Limited Liability Partnership
3300 Norwest Center
Minneapolis, Minnesota 55402
(612) 672-8200
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PART II
INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT
ITEM 8. EXHIBITS.
5. Opinion of Maslon Edelman Borman & Brand, a Professional Limited
Liability Partnership.*
10.1 Amended and Restated Management Stock Option Plan of WS Holdings
Corporation
10.2 Amended and Restated US Foodservice Inc. 1992 Stock Option Plan
10.3 Amended and Restated Us Foodservice Inc. 1993 Stock Option Plan
23A. Consent of Arthur Andersen LLP*
23B. Consent of Maslon Edelman Borman & Brand, a Professional Limited
Liability Partnership (contained in Exhibit 5)*
24. Power of Attorney (included on signature page)*
*previously filed
II-1
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lisle, State of Illinois, on June 17, 1996.
RYKOFF-SEXTON, INC.
By/s/ Mark Van Stekelenburg
--------------------------
Mark Van Stekelenburg
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on the 17th day of June, 1996, by
the following persons in the capacities indicated:
Signature Title
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/s/ Mark Van Stekelenburg
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Mark Van Stekelenburg Chairman of the Board and Chief Executive
Officer (Principal Executive Officer)
*
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Frank H. Bevevino President
/s/ Richard J. Martin
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Richard J. Martin Senior Vice President, Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)
*
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Mathias B. Bowman Director
*
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Albert J. Fitzgibbons, III Director
*
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R. Burt Gookin Director
*
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Jan W. Jeurgens Director
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*
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Sunil C. Khanna Director
*
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James I. Maslon Director
*
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James P. Miscoll Director
*
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Neil I. Sell Director
*
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Bernard Sweet Director
*
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Robert W. Williamson Director
*The undersigned by signing his name hereunto has hereby signed this
Registration Statement on behalf of the above-named officers and directors, as
of June 17, 1996, pursuant to a power of attorney executed on behalf of each
such director and officer and filed with the Securities and Exchange Commission.
*/s/ Mark Van Stekelenburg
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Attorney-in-Fact
II-3
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EXHIBIT INDEX
Exhibit
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10.1 Amended and Restated Management Stock Option Plan of WS Holdings
Corporation
10.2 Amended and Restated US Foodservice Inc. 1992 Stock Option Plan
10.3 Amended and Restated US Foodservice Inc. 1993 Stock Option Plan
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AMENDED AND RESTATED
MANAGEMENT STOCK OPTION PLAN
OF WS HOLDINGS CORPORATION
Section 1. PURPOSE. The purpose of this Plan is to further the best
interests of US Foodservice Inc. and its Subsidiaries by encouraging its key
employees to continue association with Foodservice and its Subsidiaries and by
providing additional incentive for unusual industry and efficiency through a
proprietary stake in Rykoff-Sexton, Inc. and its future growth.
Section 2. CERTAIN DEFINITIONS. For purposes of the Plan, the
following terms shall be defined as set forth below:
(a) "Board" means the Board of Directors of Rykoff-Sexton.
(b) "Cause" means, with respect to any Optionee, the termination
of employment of such Optionee due to (i) after notice, a material neglect of
such Optionee's duties to Rykoff-Sexton, Foodservice or any other Subsidiary,
(ii) willful engagement by such Optionee in conduct which is materially and
demonstrably injurious to Rykoff-Sexton, Foodservice or any other Subsidiary,
(iii) the commission of an act of fraud, subversion, misappropriation or
embezzlement by such Optionee or (iv) a conviction of, or a plea of NOLO
CONTENDERE or a guilty plea or confession by, such Optionee to an act of fraud,
subversion, misappropriation, or embezzlement or to a felony; PROVIDED, HOWEVER,
that if such Optionee is a party to an Employment Agreement, the definition of
Cause provided for in such Employment Agreement, if any, shall apply.
(c) "Change in Control" means (i) the sale or transfer of all or
substantially all of the assets of Foodservice, whether in one transaction or in
a series of related transactions, except a sale or transfer to a successor
corporation in which the holders of the fully-diluted common stock of
Foodservice immediately prior to the transaction hold, directly or indirectly,
more than 50% of the total voting power of the successor corporation immediately
after the transaction or (ii) any merger or consolidation between Foodservice
and another corporation, except a merger or consolidation immediately after
which the holders of the fully diluted common stock of Foodservice immediately
prior to the transaction hold, directly or indirectly, more than 50% of the
total voting power of the surviving corporation immediately after the
transaction.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
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(e) "Committee" means the Management Development Compensation
and Stock Option Committee of the Board, or any other committee the Board may
subsequently appoint to administer the Plan. The Committee shall be composed
entirely of directors who meet the qualifications referred to in Section 5 of
the Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan shall be exercised by the Board.
(f) "Conflict" means (i) a payment which would violate or
conflict with any statute, rule, injunction, regulation, order, judgment or
decree applicable to Rykoff-Sexton or by which it, any Subsidiary or any of its
or its Subsidiaries' properties may be bound or affected; (ii) a payment which
would result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the property or assets of
Rykoff-Sexton or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Rykoff-Sexton or any Subsidiary is a party or
by which Rykoff-Sexton or any Subsidiary or any of their properties is bound or
affected; or (iii) a payment which in the ordinary course would be made out of
the proceeds of a loan, dividend or other payment to Rykoff-Sexton by one of its
Subsidiaries and the making of such payments or loans or payment of such
dividend would result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of lien or encumbrance on any of the
property or assets of Rykoff-Sexton or a Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which a payment which Rykoff-Sexton or a
Subsidiary is a party or by which Rykoff-Sexton or a Subsidiary or any of their
properties is bound or affected.
(g) "Corporation" means the WS Holdings Corporation, a
corporation organized under the laws of the State of Delaware (or any successor
corporation).
(h) "Disability" means the permanent inability of an Optionee to
perform substantially his duties and responsibilities to Rykoff-Sexton,
Foodservice or any Subsidiary by reason of a physical or mental disability or
infirmity (i) for a continuous period of six months or (ii) at such earlier time
as the Optionee, at his option, submits satisfactory medical evidence that he
has a physical or mental disability or infirmity which will likely prevent him
from returning to the performance of his work duties for six months or longer.
The date of such disability shall be on the last day of such six-month period or
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the day on which the Optionee submits such satisfactory medical evidence, as the
case may be.
(i) "Disinterested Persons" shall have the meaning set forth in
Rule 16b-3 as promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, or any successor definition adopted by such
commission.
(j) "Employee" means an employee of Rykoff-Sexton, Foodservice
or a Subsidiary as described in Section 6.
(k) "Fair Market Value" shall mean the fair market value per
share of Stock as determined by the Committee in good faith; PROVIDED, HOWEVER,
that (A) if the Stock is admitted to trading on a national securities exchange,
Fair Market Value on any date shall be the last sale price reported for the
Stock on such exchange on such date or on the last date preceding such date on
which a sale was reported, (B) if the Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or other comparable quotation system and has been designated as a National
Market System ("NMS") security, Fair Market Value on any date shall be the last
sale price reported for the Stock on such system on such date or on the last day
preceding such date on which a sale was reported, or (C) if the Stock is
admitted to quotation on NASDAQ and has not been designated a NMS Security, Fair
Market Value on any date shall be the average of the highest bid and lowest
asked prices of the Stock on such system on such date.
(l) "Foodservice" means US Foodservice Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation).
(m) "Good Reason" means (i) a reduction, without the consent of
the Optionee in the Optionee's base or aggregate compensation, other than an
across-the-board reduction in the compensation of substantially all similarly
situated employees of Rykoff-Sexton and the Subsidiaries, (ii) a material
reduction in the Optionee's responsibilities with Rykoff-Sexton or Foodservice
or a change in the Optionee's title to one of lesser status, or (iii) such other
events of hardship as the Board shall determine on a case by case basis;
PROVIDED, HOWEVER, that if such Optionee is a party to an Employment Agreement,
the definition of Good Reason provided for in such Employment Agreement, if any,
shall apply.
(n) "Involuntary Termination" means termination by Rykoff-
Sexton, Foodservice or a Subsidiary of an Optionee's employment.
(o) "Option" means any option to purchase shares of Stock
granted pursuant to Section 7.
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(p) "Plan" means the Amended and Restated Management Stock
Option Plan of WS Holdings Corporation.
(q) "Retirement" means, with respect to any Optionee, the
Optionee's retirement as an employee of Rykoff-Sexton, Foodservice or a
Subsidiary under a retirement plan of Rykoff-Sexton, Foodservice or such
Subsidiary, as the case may be.
(r) "Rykoff-Sexton" means Rykoff-Sexton, Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation).
(s) "Stock" means the Common Stock, par value $.10 per share, of
Rykoff-Sexton.
(t) "Subsidiary" means any corporation, partnership, joint
venture or other entity of which Rykoff-Sexton owns, directly or indirectly, a
majority of the capital stock or is a general partner, or which it controls.
(u) "Voluntary Termination" means the voluntary termination by
an Optionee of his employment with Rykoff-Sexton, Foodservice or a Subsidiary by
voluntary resignation or any other means (i) other than because of such
Optionee's Retirement, Disability or death, or (ii) other than simultaneously
with or following termination for Cause or the occurrence of an event which if
known to Rykoff-Sexton, Foodservice or such Subsidiary at the time of such
voluntary termination by the Optionee of his employment would constitute Cause.
Section 3. OPTION SHARES. The shares of Stock which may be made
subject to Options granted pursuant to this Plan shall be no more than a total
of 333,500 shares of Stock except as such number may be adjusted as provided in
Section 15. Any shares of Stock remaining unissued at the termination of this
Plan shall cease to be reserved for the purpose of the Plan, but until
termination of the Plan, Rykoff-Sexton shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan. To the extent
that an Option expires or is otherwise terminated without being exercised, such
shares shall again be available for issuance in connection with future grants
under the Plan.
Section 4. EFFECTIVE DATE OF PLAN. The Plan shall take effect upon
its adoption by the Board of Directors of the Corporation, provided that it is
approved by the stockholders of the Corporation.
Section 5. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Board or by the Committee composed of not less than three
Disinterested Persons, provided that if the Committee is not composed of three
or more Disinterested Persons, then the Plan shall be administered by the Board
or such other
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committee as determined by the Board. The Board may authorize the Committee to
exercise any and all of the powers and functions of the Board pursuant to the
Plan. The interpretation and construction by the Committee or the Board of any
provisions of the Plan or of any Options granted under it shall be final and
conclusive. No member of the Committee or of the Board shall be personally
liable for any action or determination made in good faith with respect to the
Plan or any Options granted under it.
Section 6. ELIGIBILITY. The persons eligible to participate in the
Plan as recipients of Options shall include only the employees of Rykoff-Sexton,
Foodservice or of any Subsidiary who hold executive or other responsible
positions in the management of the affairs of Rykoff-Sexton, Foodservice and of
the Subsidiaries. The term Employee does not include directors of Rykoff-Sexton
as such, but does include directors of Rykoff-Sexton who are otherwise employed
by Rykoff-Sexton, Foodservice or the Subsidiaries.
Section 7. GRANT OF OPTIONS. Rykoff-Sexton, by action of the
Committee and subject to the provisions of this Plan, may, from time to time,
grant Options to purchase shares of Stock to such Employees as may be selected
by the Committee and for such number or numbers of shares of Stock as may be
determined by the Committee. Options granted pursuant to this Plan are not
intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Code but are intended to constitute nonqualified stock
options. Each Option outstanding pursuant to this Plan shall be evidenced by an
instrument in writing and upon such terms and conditions as may be determined by
the Committee, subject to the provisions and limitations set forth in this Plan.
The grant of such Option shall be evidenced by written notice executed by an
authorized officer of Rykoff-Sexton so long as such officer is not the recipient
of the Option.
Section 8. OPTION PRICE. The purchase price for each share of Stock
placed under Option pursuant to this Plan (hereinafter called the "Option
Price") shall be determined by the Committee on the date of grant but unless the
Board otherwise determines in its discretion, shall be not less than 100% of the
Fair Market Value of the Stock on such date.
Section 9. EXERCISABILITY OF OPTIONS. Subject to Section 11 hereof,
an Option granted pursuant to this Plan may be exercised only within the time
limits and subject to the terms prescribed by the Committee in the grant of the
particular Option.
Options held by persons whose employment is terminated for Cause shall
be forfeited and cancelled effective upon such termination for Cause and no
payment shall be made with respect thereto.
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Section 10. PROCEDURE FOR EXERCISE AND PAYMENT FOR SHARES. Exercise
of an Option shall be made by the giving of written notice to Rykoff-Sexton by
the Optionee. Such written notice shall be deemed sufficient for this purpose
only if delivered to Rykoff-Sexton at its principal office and only if such
written notice states the number of shares of Stock with respect to which the
Option is being exercised and, further, states the date, not more than ninety
(90) days after the date of such notice, upon which the shares of Stock shall be
purchased and payment therefore shall be made. The payments for shares of Stock
purchased pursuant to exercise of an Option shall be made at the principal
offices of Rykoff-Sexton. An Optionee may specify in any exercise notice that
only shares of Stock shall be issued and that if Rykoff-Sexton may not then
issue shares of Stock the effectiveness of such exercise shall be delayed until
such time as Rykoff-Sexton may issue shares of Stock. Upon the exercise of any
Option, in compliance with the provisions of this Section and upon receipt by
Rykoff-Sexton of the payment for the Stock so purchased together with the
payment of the amount of any taxes required to be collected or withheld as a
result of the exercise of this Option, Rykoff-Sexton shall deliver or cause to
be delivered to the Optionee so exercising an Option a certificate or
certificates for the number of shares of Stock with respect to which the Option
is so exercised and payment is so made. The shares of Stock shall be registered
in the name of the exercising Employee, provided that, in no event, shall any
shares of Stock be issued pursuant to exercise of an Option until full payment
therefore shall have been made by cash or certified or bank cashier's check and
not until the shares of Stock have been issued shall the exercising Optionee
have any of the rights of a shareholder of Rykoff-Sexton. For purposes of this
Section, the date of issuance shall be the date upon which payment in full has
been received by Rykoff-Sexton as provided herein.
Section 11. DURATION OF OPTIONS. The period for which each Option
granted hereunder shall be effective shall commence upon the date of the grant
of the Option and shall continue until such Option shall be terminated according
to its terms or as hereinafter provided, but in no event shall such period
exceed ten (10) years and one (1) day (the "Option Period"). In addition to and
in limitation of the above, the Option Period of any Option granted pursuant to
this Plan shall terminate upon the earliest of the following dates:
(a) Prior to the third anniversary of the date of grant of the
Option, the date upon which the Employee holding such Option (hereinafter called
the "Optionee") ceases to be an employee of Rykoff-Sexton, Foodservice or a
Subsidiary, or, after such third anniversary, three months after the Optionee
ceases to be an employee of Rykoff-Sexton, Foodservice or a Subsidiary unless
such Optionee ceases to be an employee by reason of the Optionee's death,
Disability, Retirement, Voluntary Termination with Good Reason or termination
for without Cause; PROVIDED, HOWEVER, that during such period after the Optionee
ceases to be
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an employee, such Option shall be exercisable only to the extent it was
exercisable on the date of such Optionee's cessation of employment.
(b) Three (3) months after the Optionee ceases to be an employee
by reason of the Optionee's death, Disability, Retirement, or Voluntary
Termination with Good Reason; PROVIDED, HOWEVER, that during such period after
the Optionee ceases to be an employee, such Option shall be exercisable only to
the extent it was exercisable on the date of such Optionee's cessation of
employment.
(c) At the time of the Optionee's termination for Cause.
Nothing contained herein shall limit whatever right Rykoff-Sexton,
Foodservice or any Subsidiary might otherwise have to terminate the employment
of any Employee.
Successive Options may be granted to the same Employee whether or not
the Option or Options first granted to such Employee remain unexercised.
Section 12. PUT AND CALL RIGHTS.
If the employment of the Optionee with Rykoff-Sexton, Foodservice and
the Subsidiaries terminates for any reason, in the Committee's sole discretion,
Rykoff-Sexton may, for a period of 180 days beginning on the date of termination
elect to pay such Optionee the difference (the "Spread"), if any, between the
Option Price and the Fair Market Value with respect to any Options that are
vested on the date of termination.
In the event of a Change in Control, Rykoff-Sexton shall have the
right, but not the obligation, to pay the Optionee an amount equal to the Spread
times the number of shares of Stock allocable to the vested portion of the
Option (to the extent exercisable at the time of the Change in Control,
assuming, for the avoidance of doubt, that such Change in Control has occurred).
Rykoff-Sexton may elect to pay a portion, not to exceed one half (or
such greater percentage as may be required to avoid the occurrence of a
Conflict) of the Spread in the form of an unsecured junior subordinated
promissory note made by Rykoff-Sexton and payable to the Optionee (a
"Corporation Note") or in other securities of Rykoff-Sexton. Each Corporation
Note will mature on the later to occur of the second anniversary of the date
such Corporation Note was issued and the date payment of such payment of such
Corporation Note would not give rise to a Conflict. Each Corporation Note will
bear interest at a rate equal to the lower of (i) 10% per annum or (ii) the
average time-weighted reference rate of Bank of America National Trust and
Savings Association, payable annually in arrears.
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Section 13. NON-TRANSFERABILITY. No Option granted pursuant to this
Plan may be transferred by the Optionee except to the estate of a deceased
Optionee, and, further, during the lifetime of the Optionee, the Option may be
exercised only by such Optionee.
Section 14. REQUIREMENTS OF LAW AND OF CERTAIN AGREEMENTS. If any
law or any regulation of any commission or agency having jurisdiction shall
require Rykoff-Sexton or the exercising Optionee to take any action with respect
to the shares of Stock acquired by the exercise of an Option, then the date upon
which Rykoff-Sexton shall issue or cause to be issued the certificate or
certificates of the shares of Stock shall be postponed until full compliance has
been made with all such requirements of law or regulation, PROVIDED, that
Rykoff-Sexton shall use its best efforts to take all necessary action to comply
with such requirements of law or regulation. Further, if requested by Rykoff-
Sexton, at or before the time of the issuance of the shares of Stock with
respect to which exercise of an Option has been made, the exercising Optionee
shall deliver to Rykoff-Sexton such Optionee's written statement satisfactory in
form and content to Rykoff-Sexton, that such Optionee intends to hold the shares
of Stock so acquired by such Optionee on exercise of such Optionee's Option, for
investment and not with a view to resale or other distribution thereof to the
public in violation of the Securities Act of 1933. Moreover, in the event that
Rykoff-Sexton shall determine that, in compliance with the Securities Act of
1933 or other applicable statutes or regulations, it is necessary to register
any of the shares of Stock with respect to which an exercise of an Option has
been made, or to qualify any such shares of Stock for exemption from any of the
requirements of the Securities Act of 1933 or any other applicable statute or
regulation, no Options may be exercised and no shares of Stock shall be issued
to the exercising Optionee until the required action has been completed.
Section 15. ADJUSTMENTS. In the event of the declaration of any
stock dividend on the Stock or in the event of any reorganization, merger,
consolidation, acquisition, separation, recapitalization, split-up, combination
or exchange of the Stock or like adjustment, the number of shares of Stock and
the class of shares of stock available pursuant to this Plan and the number and
class of shares of Stock subject to any Option granted pursuant to this Plan,
and the Option Prices, shall be adjusted by appropriate change in this Plan and
in any Options outstanding pursuant to this Plan. Any such adjustment to the
Plan or to Options or Option Prices shall be made by action of the Board or the
Committee, whose determination shall be conclusive.
Section 16. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board may,
insofar as permitted by law, amend, suspend, or discontinue this Plan at any
time without restriction; PROVIDED, HOWEVER, that the Board may not alter or
amend or discontinue or
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revoke or otherwise impair any outstanding Options which have been granted
pursuant to this Plan and which remain unexercised, except (i) with respect to
amendments affecting all Options (vested and unvested), with the consent of the
holders of vested Options representing the right to purchase a majority of the
total number of shares of Stock subject to Options which are vested; PROVIDED,
HOWEVER, that if no Options are vested then the requisite consent shall be the
consent of holders of unvested Options representing the right to purchase a
majority of the total number of shares of Stock subject to Options which are
unvested, (ii) with respect to amendments affecting only Performance Options
(vested and unvested) or Normal Options (vested and unvested), or only a single
series of Normal Options (vested or unvested) or Performance Options (vested or
unvested) with the consent of the holders of vested Normal Options or vested
Performance Options, as the case may be, representing the right to purchase a
majority of the total number of shares of Stock subject to Normal Options which
are vested, Performance Options which are vested, Normal Options of such series
which are vested, or Performance Options of such series which are vested, as the
case may be; PROVIDED, HOWEVER, that if none of the Performance Options or none
of the Performance Options of such series, as the case may be, is vested then
the requisite consent with respect to the Performance Options or such series of
Performance Options, as the case may be, shall be the consent of the holders of
unvested Performance Options or unvested Performance Options of such series, as
the case may be, representing the right to purchase a majority of the total
number of shares of stock subject to Performance Options which are unvested, or
Performance Options of such series which are unvested, as the case may be,
(iii) in the event of a merger, reorganization, or other adjustment referred to
in Section 15 above, or (iv) with the written consent of the holder of the
outstanding Option proposed to be so altered or amended. The Board may not,
without the approval of the stockholders of Foodservice and the Corporation
amend, alter or revise the Plan to increase the number of shares of Stock
subject to the Plan, change the description of the class of employees eligible
to receive Options or decrease the price at which Options may be granted except
as provided in Section 15. The Option Period of any outstanding Option shall
not be extended by any amendment or suspension or discontinuance of the Plan
unless the resolutions reflecting such amendment, suspension or discontinuance
expressly provide otherwise. The Board may agree to amend a previously granted
Option (including an Option with respect to which the exercise period has
previously terminated) to extend the period during which it may be exercised.
For purposes of this Section 16, a Performance Option shall be considered vested
if it has become exercisable under the relevant Performance Option Agreement and
a Normal Option shall be considered vested if it has become exercisable under
the relevant Normal Option Agreement.
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Section 17. LIQUIDATION OF RYKOFF-SEXTON. In the event of the
complete liquidation or dissolution of Rykoff-Sexton other than as an incident
to a merger, reorganization, or other adjustment referred to in Section 15
above, any Options granted pursuant to this Plan and remaining unexercised shall
be deemed cancelled without regard to or limitation by any other provision of
this Plan.
Section 18. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after the tenth
anniversary of the date on which the Board of Directors of the Corporation
approved the Plan, but Options theretofore granted may be extended beyond that
date.
<PAGE>
AMENDED AND RESTATED
US FOODSERVICE INC.
1992 STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of this Plan is to further the best
interests of US Foodservice Inc. and its Subsidiaries by encouraging its key
employees to continue association with the Corporation and its Subsidiaries and
by providing additional incentive for unusual industry and efficiency through
offering an opportunity to acquire a proprietary stake in Rykoff-Sexton, Inc.
and its future growth.
Section 2. CERTAIN DEFINITIONS. For purposes of the Plan, the
following terms shall be defined as set forth below:
(a) "Affiliate" means with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person.
(b) "Board" means the Board of Directors of Rykoff-Sexton.
(c) "Cause" means, with respect to any Optionee, the termination of
employment of such Optionee due to (i) after notice, a material neglect of such
Optionee's duties to Rykoff-Sexton, the Corporation or any Subsidiary, (ii)
willful engagement by such Optionee in conduct which is materially and
demonstrably injurious to Rykoff-Sexton, the Corporation or any Subsidiary,
(iii) the commission of an act of fraud, subversion, misappropriation or
embezzlement by such Optionee or (iv) a conviction of, or a plea of NOLO
CONTENDERE or a guilty plea or confession by, such Optionee to an act of fraud,
subversion, misappropriation, or embezzlement or to a felony; PROVIDED, HOWEVER,
that if such Optionee is a party to an Employment Agreement, the definition of
Cause provided for in such Employment Agreement, if any, shall apply.
(d) "CEO" means the Chief Executive Officer, or if there are two,
both Chief Executive Officers, of the Corporation.
(e) "Change in Control" means, (i) the sale or transfer of all or
substantially all of the assets of the Corporation, whether in one transaction
or in a series of related transactions, except a sale or transfer to a successor
corporation in which the holders of the fully-diluted common stock of the
Corporation immediately prior to the transaction hold, directly or indirectly,
more than 50% of the total voting power of the successor corporation immediately
after the transaction; or (ii) any merger or consolidation between the
Corporation and another corporation, except a merger or consolidation
immediately after which the holders of the fully-diluted common stock of the
Corporation immediately prior to the transaction hold, directly or indirectly,
more than 50% of
<PAGE>
the total voting power of the surviving corporation immediately after the
transaction.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
(g) "Committee" means the Management Development -- Compensation and
Stock Option Committee of the Board, or any other committee the Board may
subsequently appoint to administer the Plan. The Committee shall be composed
entirely of directors who meet the qualifications referred to in Section 5 of
the Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan shall be exercised by the Board.
(h) "Consulting Agreement" means any consulting, personal service,
advisory or other agreement between Rykoff-Sexton, the Corporation or any
Subsidiaries and any Optionee, the terms of which have been approved by the
Committee as a Consulting Agreement for purposes of the Plan. For purposes of
the Plan, termination of a Consulting Agreement pursuant to the terms thereof
shall be deemed a termination of such Optionee's employment.
(i) "Corporation" means US Foodservice Inc. a corporation organized
under the laws of the State of Delaware (or any successor corporation).
(j) "Disability" means the permanent inability of an Optionee to
perform substantially his duties and responsibilities to Rykoff-Sexton, the
Corporation or any Subsidiary by reason of a physical or mental disability or
infirmity (i) for a continuous period of six months or (ii) at such earlier time
as the Optionee, at his option, submits satisfactory medical evidence that he
has a physical or mental disability or infirmity which will likely prevent him
from returning to the performance of his work duties for six months or longer.
The date of such disability shall be on the last day of such six-month period or
the day on which the Optionee submits such satisfactory medical evidence, as the
case may be.
(k) "Disinterested Persons" shall have the meaning set forth in Rule
16b-3 as promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, or any successor definition adopted by such
commission.
(l) "Eligible Director" means any director of Rykoff-Sexton, the
Corporation or any Subsidiary.
(m) "Employee" means any employee or officer of Rykoff-Sexton, the
Corporation or any Subsidiaries or any person party to a Consulting Agreement,
provided that BONA FIDE services shall be rendered by any consultant or adviser
and such services are not in connection with the offer and sale of securities in
a
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<PAGE>
capital-raising transaction, and provided, further, that the term Employee shall
not include a director of Rykoff-Sexton, the Corporation or any Subsidiary in
his capacity as such, but shall include a director of Rykoff-Sexton, the
Corporation or a Subsidiary who is otherwise employed by Rykoff-Sexton, the
Corporation or a Subsidiary.
(n) "Employment Agreement" means any employment agreement entered
into between Rykoff-Sexton, the Corporation or any Subsidiary with each of Frank
H. Bevevino, Thomas G. McMullen and David F. McAnally, as the same may be
amended from time to time.
(o) "Fair Market Value" means the fair market value per share of
Stock as determined by the Committee in good faith; PROVIDED, HOWEVER, that (A)
if the Stock is admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the Stock on
such exchange on such date or on the last date preceding such date on which a
sale was reported, (B) if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or other
comparable quotation system and has been designated as a National Market System
("NMS") security, Fair Market Value on any date shall be the last sale price
reported for the Stock on such system on such date or on the last day preceding
such date on which a sale was reported, or (C) if the Stock is admitted to
quotation on NASDAQ and has not been designated as NMS Security, Fair Market
Value on any date shall be the average of the highest bid and lowest asked
prices of the Stock on such system on such date.
(p) "Good Reason" means (i) a reduction, without the consent of the
Optionee, in the Optionee's base or aggregate compensation, other than an
across-the-board reduction in the compensation of substantially all similarly
situated employees of Rykoff-Sexton and the Subsidiaries, (ii) a material
reduction in the Optionee's responsibilities with Rykoff-Sexton or the
Corporation or a change in the Optionee's title to one of lesser status, or
(iii) such other events of hardship as the Board shall determine on a case by
case basis; PROVIDED, HOWEVER, that if such Optionee is a party to an Employment
Agreement, the definition of Good Reason provided for in such Employment
Agreement, if any, shall apply.
(q) "Involuntary Termination" means termination by Rykoff-Sexton, the
Corporation or a Subsidiary of an Optionee's employment.
(r) "Management Investors" means the individuals listed on Annex A
hereto.
(s) "Non-employee Director" means an Eligible Director who is not an
Employee on the date of grant of the relevant Option.
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<PAGE>
(t) "Option" means any option to purchase shares of Stock granted
pursuant to Section 7.
(u) "Optionee" means a person to whom an Option has been granted
under the Plan.
(v) "Person" means any corporation, association, partnership, joint
venture, organization, business, individual, trust or any other entity or
organization, including a government or any subdivision or agency thereof.
(w) "Plan" means the Amended and Restated US Foodservice Inc. 1992
Stock Option Plan.
(x) "Retirement" means, with respect to any Optionee, the Optionee's
retirement as an employee of Rykoff-Sexton, the Corporation or a Subsidiary
under a retirement plan of Rykoff-Sexton, the Corporation or such Subsidiary, as
the case may be.
(y) "Rykoff-Sexton" means Rykoff-Sexton, Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation).
(z) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
(aa) "Spread" means the difference between the Fair Market Value and
the exercise price per share pursuant to the Option. If such Fair Market Value
is less than the Exercise Price, then the Spread shall equal $0.
(bb) "Stock" means the Common Stock, $0.10 par value, of Rykoff-
Sexton.
(cc) "Subsidiary" means any corporation, partnership, joint venture or
other entity of which Rykoff-Sexton owns, directly or indirectly, a majority of
the capital stock or is a general partner, or which it controls.
(dd) "Voluntary Termination" means the voluntary termination by an
Optionee of his employment with Rykoff-Sexton, the Corporation or a Subsidiary
by voluntary resignation or any other means (i) other than because of such
Optionee's Retirement, Disability or death, or (ii) other than simultaneously
with or following termination for Cause or the occurrence of an event which if
known to Rykoff-Sexton, the Corporation or such Subsidiary at the time of such
voluntary termination by the Optionee of his employment would constitute Cause.
Section 3. OPTION SHARES. (a) The shares of Stock which may be made
subject to Options granted pursuant to this Plan shall be no more than a total
of 429,100 shares of Stock except as such number may be adjusted as provided in
Section 15. Any
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<PAGE>
shares of Stock remaining unissued at the termination of this Plan shall cease
to be reserved for the purpose of the Plan, but until termination of the Plan,
Rykoff-Sexton shall at all times reserve a sufficient number of shares of Stock
to meet the requirements of the Plan.
(b) Whenever any outstanding Option or portion thereof expires, is
canceled or is otherwise terminated (other than by exercise of the Option or
such portion thereof or payment of the Spread) (collectively, an "Event"),
Options (the "Regranted Options") relating to the number of shares of Stock
allocable to the unexercised portion of such Option and the portion, if any, of
such Options as to which the Spread was payable may be granted to the Management
Investors and such other members of the Corporation's management as shall be
jointly selected by the CEO and the Committee in such manner as the CEO and the
Committee shall jointly decide (the "New Acquirors") within the twelve month
period (or such longer time as may be agreed to by the CEO) following the date
of the Event. Notwithstanding the provisions of Section 8 hereof, the exercise
price under each Regranted Option shall be Fair Market Value.
Section 4. EFFECTIVE DATE OF PLAN. The Plan shall take effect upon its
adoption by the Board of the Directors of the Corporation, provided that it is
approved by the stockholders of the Corporation.
Section 5. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by the Board or by the Committee composed of not less than three Disinterested
Persons, provided that if the Committee is not composed of three or more
Disinterested Persons, then the Plan shall be administered by the Board or such
other committee as determined by the Board. The Board may authorize the
Committee to exercise any and all of the powers and functions of the Board
pursuant to the Plan. The interpretation and construction by the Committee or
the Board of any provisions of the Plan or of any Options granted under it shall
be final and conclusive. No member of the Committee or of the Board shall be
personally liable for any action or determination made in good faith with
respect to the Plan or any Options granted under it.
Section 6. ELIGIBILITY. The persons eligible to participate in the
Plan as recipients of Options shall include only Employees and Eligible
Directors.
Section 7. GRANT OF OPTIONS. Rykoff-Sexton, by action of the Committee
and subject to the provisions of this Plan, may, from time to time, grant
Options to purchase shares of Stock to such Employees as may be selected by the
Committee and for such number or numbers of shares of Stock as may be determined
by the Committee. Options granted pursuant to this Plan are intended to not
qualify as "incentive stock options" within the meaning of Section 422 of the
Code but are intended to constitute non-qualified stock options. Each Option
outstanding pursuant to
5
<PAGE>
this Plan shall be evidenced by an instrument in writing and upon such terms and
conditions as may be determined by the Committee, subject to the provisions and
limitations set forth in this Plan. The grant of such Option shall be evidenced
by written notice executed by an authorized officer of Rykoff-Sexton so long as
such officer is not the recipient of the Option.
Section 8. OPTION PRICE. The purchase price for each share of Stock
placed under Option pursuant to this Plan (hereinafter called the "Option
Price") shall be determined by the Committee on the date of grant but unless the
Board otherwise determines in its discretion, shall be not less than 100% of the
Fair Market Value of the Stock on such date; PROVIDED, HOWEVER, that the Option
Price for Regranted Options shall be set as provided for in Section 3(b).
Section 9. EXERCISABILITY OF OPTIONS. Subject to Section 11 hereof, an
Option granted pursuant to this Plan may be exercised only within the time
limits and subject to the terms prescribed by the Committee in the grant of the
particular Option.
Section 10. PROCEDURE FOR EXERCISE AND PAYMENT FOR SHARES. Exercise of
an Option shall be made by the giving of written notice to Rykoff-Sexton by the
Optionee. Such written notice shall be deemed sufficient for this purpose only
if delivered to Rykoff-Sexton at its principal office and only if such written
notice states the number of shares of Stock. Payment upon the exercise of an
Option, if payment is due, shall be made in full at the time the Option is
exercised by delivery of such payment to Rykoff-Sexton at the principal offices
of Rykoff-Sexton. Upon the exercise of any Option, in compliance with the
provisions of this Section and (except as otherwise provided in Section 12) upon
receipt by Rykoff-Sexton of the payment for the Stock so purchased together with
the payment of the amount of any taxes required to be collected or withheld as a
result of the exercise of this Option, Rykoff-Sexton shall deliver or cause to
be delivered to the Optionee so exercising an Option either a certificate or
certificates for the number of shares of Stock with respect to which the Option
is so exercised and payment is so made or the Spread as provided by Section 12.
The shares of Stock shall be registered in the name of the exercising Optionee,
provided that, in no event, shall any shares of Stock be issued pursuant to
exercise of an Option until full payment therefor shall have been made by cash
or certified or bank cashier's check. Until the shares of Stock have been
issued, the exercising Optionee shall not have any of the rights of a
shareholder of Rykoff-Sexton with respect to such shares of Stock. For purposes
of this Section, the date of issuance shall be the date upon which payment in
full has been received by Rykoff-Sexton as provided herein.
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<PAGE>
Section 11. DURATION OF OPTIONS. The period for which each Option granted
hereunder shall be effective shall commence upon the date of the grant of the
Option and shall continue until such Option shall be terminated according to its
terms or as hereinafter provided, but in no event shall such period exceed ten
(10) years and one (1) day (the "Option Period"). In addition to and in
limitation of the above, the Option Period of any Option granted to an Employee
or Eligible Director pursuant to this Plan shall terminate as follows:
(a) If (x) the Optionee's employment is terminated due to (i) such
Optionee's death, Disability, Retirement, Involuntary Termination without Cause,
or Voluntary Termination with Good Reason or (ii) termination of a Consulting
Agreement other than for cause (as defined in the relevant Consulting Agreement)
or (y) the Optionee is a Non-employee Director and is removed as a director
without cause, the Option (to the extent exercisable at the time of the
Optionee's termination of employment) shall be exercisable by the Optionee or
the Optionee's personal representative, but only upon (A) the death of the
Optionee or (B) the incompetency of the Optionee for purposes of protection and
management of the Optionee's assets (a "Personal Representative"), for a period
of six (6) months following such termination of employment, and shall thereafter
terminate;
(b) If (x) the Optionee's employment is terminated due to (i) such
Optionee's Involuntary Termination with Cause or (ii) termination of a
Consulting Agreement by the Company for cause (as defined in the relevant
Consulting Agreement) or by the Optionee voluntarily without cause (as defined
in the relevant Consulting Agreement) or (y) the Optionee is a Non-employee
Director and is removed as a director with cause or voluntarily resigns as a
director, the Option shall terminate on the date of the Optionee's termination
of employment or, in the case of such Non-employee Director, the date he ceases
to be a director, except that with respect to Optionees listed in Annex B
hereto, the Option (to the extent exercisable at the time of the Optionee's
termination of employment) shall be exercisable by the Optionee or the
Optionee's Personal Representative for a period of six months following such
termination of employment, and shall thereafter terminate;
(c) If the Optionee's employment is terminated due to such Optionee's
Voluntary Termination without Good Reason, then the Option (to the extent
exercisable at the time of the Optionee's termination of employment) shall be
exercisable by the Optionee or the Optionee's Personal Representative for a
period of three (3) months following such termination of employment and shall
thereafter terminate; and
(d) In the event of a Change in Control, Rykoff-Sexton may elect to
pay the Optionee the Spread on such date and, upon payment thereof by Rykoff-
Sexton, the Option shall terminate.
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To the extent any Option is not exercisable at the time of (x) the
Optionee's termination of employment (for whatever reason), or (y) a Non-
employee Director ceasing to be an Eligible Director, such Option shall
terminate on the date of the Optionee's termination of employment.
Notwithstanding the foregoing, the Committee may provide, either at
the time an Option is granted or thereafter, that the Option may be exercised
after the periods provided for in this Section 11, but in no event beyond the
term of the Option.
Nothing contained herein shall limit whatever right Rykoff-Sexton, the
Corporation or any Subsidiary might otherwise have to terminate the employment
of any Employee.
Successive Options may be granted to the same Employee whether or not
the Option or Options first granted to such Employee remain unexercised.
Section 12. PAYMENT OF THE SPREAD. In the event that (x) an Optionee
that is an Employee ceases to be employed by Rykoff-Sexton, the Corporation or
any Subsidiary or (y) a Non-employee Director ceases to be a director of Rykoff-
Sexton, the Corporation or a Subsidiary:
(a) If an Optionee's termination of employment or ceasing to be a
director, is due to such Optionee's death, Disability or Retirement, Rykoff-
Sexton shall have the right, but not the obligation, to pay to the Optionee or
the Optionee's Personal Representative an amount equal to the Spread times the
number of shares of Stock allocable to the vested portion of the Option (to the
extent exercisable at the time of the Optionee's termination of employment),
except that this subsection (a) shall not apply to Optionees listed on Annex B
hereto; and
(b) If (x) the employment of an Optionee that is an Employee
terminates due to such Optionee's (A) Involuntary Termination without Cause, (B)
Voluntary Termination without Good Reason, (C) Voluntary Termination with Good
Reason, (D) Consulting Agreement terminating (other than for cause as provided
therein) or (y) an Optionee that is a Non-employee Director ceases to be a
director due to such Optionee's (i) removal as a Director without cause or (ii)
resignation as a director under circumstances that would not permit his removal
for cause, Rykoff-Sexton shall have the right, but not the obligation, to pay to
the Optionee an amount equal to the Spread times the number of shares of Stock
allocable to the vested portion of the Option (to the extent exercisable at the
time of the Optionee's termination of employment or ceasing to be a director),
except that this subsection (b) shall not apply to Optionees listed on Annex B
hereto.
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<PAGE>
(c) In the event of a Change in Control, Rykoff-Sexton shall have the
right, but not the obligation, to pay the Optionee an amount equal to the Spread
times the number of shares of Stock allocable to the vested portion of the
Option (to the extent exercisable at the time of the Change in Control,
assuming, for the avoidance of doubt, that such Change in Control had occurred).
No amount shall be payable to any Optionee pursuant to this Section 12
if (x) the employment of an Optionee that is an Employee terminates due to (i)
his Involuntary Termination with Cause or (ii) the termination of his Consulting
Agreement for cause (as defined therein) or (y) a Non-employee Director is
removed as a director for cause or resigns under circumstances that would permit
his removal for cause. Any amount required to be paid pursuant to Section
12(a), 12(b), or 12(c), shall be paid within sixty (60) days of the Optionee's
termination of employment or the date of the Change in Control, as the case may
be. To the extent Rykoff-Sexton pays the Optionee the Spread for any Option,
such Option shall be canceled to the extent of the number of shares of Stock as
to which the Spread has been paid.
Notwithstanding anything to the contrary set forth herein, Rykoff-
Sexton may defer payment of the Spread if it elects to pay the Spread pursuant
to this Section 12 to the extent: (i) such payment would violate or conflict
with any statute, rule, injunction, regulation, order, judgment or decree
applicable to Rykoff-Sexton or any Subsidiary or by which it, any Subsidiary or
any of its or its Subsidiaries' properties may be bound or affected; (ii) such
payment would result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the property or assets
of Rykoff-Sexton or any Subsidiary pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Rykoff-Sexton or any Subsidiary is a party or
by which Rykoff-Sexton or any Subsidiary or any of their properties is bound or
affected; or (iii) in the ordinary course such payment would be made out of the
proceeds of a loan, dividend or other payment to Rykoff-Sexton by one of its
Subsidiaries and the making of such payments or loans or payment of such
dividend would result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of Rykoff-Sexton or a Subsidiary pursuant to any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Rykoff-Sexton or any
Subsidiary is a party or by which Rykoff-Sexton or any Subsidiary or any of
their properties is bound or affected (each event, a "Conflict"). In the event
of a
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<PAGE>
Conflict, the obligation of Rykoff-Sexton to pay the Spread shall be suspended
for the duration of such Conflict and such obligation shall resume upon
termination of such Conflict; PROVIDED, HOWEVER, that (a) Rykoff-Sexton shall be
required to make such payment upon termination of such Conflict; (b) Rykoff-
Sexton shall use its reasonable best efforts to obtain the consent, approval,
authorization or permit of the payment of the Spread without the occurrence of
such Conflict; and (c) all rights hereunder enjoyed by the Optionee on and as of
the date on which such payment would have been made but for such Conflict shall
be preserved and shall not be altered, reduced or adversely affected by such
Conflict, PROVIDED FURTHER, HOWEVER, that the proviso set forth in this
subparagraph (c) shall not be construed to create, add to or supplement any
rights not otherwise enjoyed by the Optionee on and as of such date and no
additional Options of such Optionee shall become vested subsequent to such date.
Rykoff-Sexton may elect to pay a portion, not to exceed such
percentage as may be required to avoid the occurrence of a Conflict, of the
Spread in the form of an unsecured junior subordinated promissory note made by
Rykoff-Sexton and payable to the stockholder (a "Company Note") or in other
securities of Rykoff-Sexton. Each Company Note will mature on the later to
occur of the second anniversary of the date such Company Note was issued and the
date payment of such Company Note will not give rise to a Conflict. Each
Company Note will bear interest at a rate equal to the lower of (i) 7% per annum
or (ii) the average time weighted reference rate of The Chase Manhattan Bank,
N.A. Such interest shall be paid annually; provided, however, that if payment
of such interest would give rise to a Conflict, it shall accrue and shall not be
paid until such time as payment of it would not give rise to a Conflict.
Section 13. NON-TRANSFERABILITY. No Option granted pursuant to this
Plan may be transferred by the Optionee except to the Personal Representative of
a deceased Optionee, and, further, during the lifetime of the Optionee, the
Option may be exercised only by such Optionee or such Optionee's Personal
Representative.
Section 14. REQUIREMENTS OF LAW AND OF CERTAIN AGREEMENTS. If any law,
regulation or interpretation of any commission or agency having jurisdiction
shall require Rykoff-Sexton or the exercising Optionee to take any action with
respect to the shares of Stock acquired by the exercise of an Option, then the
date upon which Rykoff-Sexton shall issue or cause to be issued the certificate
or certificates of the shares of Stock shall be postponed until full compliance
has been made with all such requirements of law, regulation or interpretation,
provided, that Rykoff-Sexton shall use its reasonable best efforts to fully
comply with such requirements of law, regulation or interpretation; PROVIDED,
FURTHER, that all rights hereunder enjoyed by the Optionee on and as of the date
on which such certificates would have been issued but for the lack of such
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<PAGE>
compliance shall be preserved and shall not be altered, reduced or adversely
affected by any such lack of compliance; and PROVIDED, FURTHER, HOWEVER, that
the immediately preceding proviso shall not be construed to create, add to or
supplement any rights not otherwise enjoyed by the Optionee on and as of such
date and no additional Options of such Optionee shall become vested subsequent
to such date. Further, if requested by Rykoff-Sexton, at or before the time of
the issuance of the shares of Stock with respect to which exercise of an Option
has been made, the exercising Optionee shall deliver to Rykoff-Sexton such
Optionee's written statement satisfactory in form and content to Rykoff-Sexton,
that such Optionee intends to hold the shares of Stock so acquired by such
Optionee on exercise of such Optionee's Option, for investment and not with a
view of resale or other distribution thereof to the public in violation of the
Securities Act. Moreover, in the event that Rykoff-Sexton shall determine that,
in compliance with the Securities Act or other applicable statutes or
regulations, it is necessary to register any of the shares of Stock with respect
to which an exercise of an Option has been made, or to qualify any such shares
of Stock for exemption from any of the requirements of the Securities Act or any
other applicable statute or regulation, no shares of Stock shall be issued to
the exercising Optionee until the required action has been completed; PROVIDED,
that all rights hereunder and under the Plan enjoyed by the Optionee on and as
of the date on which such Options would have been exercised or shares of Stock
issued, as the case may be, but for such required action not having been taken
shall be preserved and shall not be altered, reduced or adversely affected by
the failure to take any such required action; and PROVIDED, FURTHER, HOWEVER,
that the preceding proviso shall not be construed to create, add to or
supplement any rights not otherwise enjoyed by the Optionee on and as of such
date and not additional Options of such Optionee shall become vested subsequent
to such date.
Section 15. ADJUSTMENTS. In the event of the declaration of any stock
dividend on the Stock or in the event of any reorganization, merger,
consolidation, acquisition, separation, recapitalization, reclassification,
split-up, combination or exchange of the Stock or like adjustment, the number of
shares of Stock and the class of shares of stock available pursuant to this
Plan, the performance targets applicable to Performance Options, and the number
and class of shares of Stock subject to any Option granted pursuant to this
Plan, and the Option Prices, shall be adjusted by appropriate change in this
Plan and in any Options outstanding pursuant to this Plan. Any such adjustments
to the Plan or to Options or Option Prices shall be made by action of the Board
in good faith, whose good faith determination shall be conclusive.
Section 16. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board may,
insofar as permitted by law, amend, suspend or discontinue this Plan at any time
without restriction, PROVIDED, HOWEVER, that the Board may not alter or amend or
discontinue or
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revoke or otherwise impair any outstanding Options which have been granted
pursuant to this Plan and which remain unexercised, except (i) with respect to
amendments affecting all Options (vested and unvested), with the consent of the
holders of vested Options representing the right to purchase a majority of the
total number of shares of Stock subject to Options which are vested; provided,
however, that if no Options are vested then the requisite consent shall be the
consent of holders of unvested Options representing the right to purchase a
majority of the total number of shares of Stock subject to Options which are
unvested, (ii) with respect to amendments affecting only Performance Options
(vested and unvested) or Normal Options (vested and unvested), with the consent
of the holders of vested Normal Options or vested Performance Options, as the
case may be, representing the right to purchase a majority of the total number
of shares of Stock subject to Normal Options which are vested or Performance
Options which are vested, as the case may be; provided, however, that if none of
the Performance Options are vested then the requisite consent shall be the
consent of the holders of unvested Performance Options, representing the right
to purchase a majority of the total number of shares of Stock subject to
Performance Options which are unvested, (iii) in the event of a merger,
reorganization, or other adjustment referred to in Section 15 above, or (iv)
with the written consent of the holder of the outstanding Option proposed to be
so altered or amended. The Board may not, without the approval of the
stockholders of the Corporation amend, alter or revise the Plan to increase the
number of shares of Stock subject to the Plan, change the description of the
class of employees eligible to receive Options or decrease the price at which
Options may be granted except as provided in Section 15. The Option Period of
any outstanding Option shall not be extended by any amendment or suspension or
discontinuance of the Plan. For purposes of this Section 16 a Performance
Option shall be considered vested if it has become exercisable under the
relevant Performance Option Agreement.
Section 17. LIQUIDATION OF THE CORPORATION. In the event of the
complete liquidation or dissolution of Rykoff-Sexton other than as an incident
to a merger, reorganization, or other adjustment referred to in Section 15
above, any Options granted pursuant to this Plan and remaining unexercised shall
be deemed canceled without regard to or limitation by any other provision of
this Plan.
Section 18. TERM OF PLAN. No Option shall be granted pursuant to the
Plan on or after the tenth anniversary of the date on which the Corporation's
Board of Directors approved the Plan, but Options theretofore granted may be
extended beyond that date.
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ANNEX A
MANAGEMENT INVESTORS
F. Bevevino
T. McMullen
J. Bevevino
T. Bevevino
K. Kozel
M. Crampton
D. McAnally
B. Smith
D. Shelor
O. Biggers
J. Scott
D. Taylor
D. Cooper
C. Davis
T. Brown
W. Howell
R. Saunders
D. Brown
W. McCallum
R. Conley
B. Mays
C. Black
R. Zinmeister
L. Collins
B. Duane
C. Phillips
M. Arrowood
T. Orlando
R. Lee
B. Cogswell
B. Cassetori
L. Lawrence
M. Dawson
L. Nathanson
J. Chavez
S. Erwin
L. Luman
B. Weeaks
<PAGE>
ANNEX B
CERTAIN OPTIONEES
Frank Bevevino
Thomas Bevevino
John Bevevino
Margaret Bevevino Crampton
Thomas McMullen
Kenneth Kozel
William Waltrip
Ronald E. Elmquist
<PAGE>
AMENDED AND RESTATED
US FOODSERVICE INC.
1993 STOCK OPTION PLAN
Section 1. PURPOSE. The purpose of this Plan is to further the best
interests of US Foodservice Inc. and its Subsidiaries by encouraging its key
employees to continue association with the Corporation and its Subsidiaries and
by providing additional incentive for unusual industry and efficiency through
offering an opportunity to acquire a proprietary stake in Rykoff-Sexton, Inc.
and its future growth.
Section 2. CERTAIN DEFINITIONS. For purposes of the Plan, the
following terms shall be defined as set forth below:
(a) "Affiliate" means with respect to any Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person.
(b) "Board" means the Board of Directors of Rykoff-Sexton.
(c) "Cause" means, with respect to any Optionee, the termination
of employment of such Optionee due to (i) after notice, a material neglect of
such Optionee's duties to Rykoff-Sexton, the Corporation or any Subsidiary,
(ii) willful engagement by such Optionee in conduct which is materially and
demonstrably injurious to Rykoff-Sexton, the Corporation or any Subsidiary,
(iii) the commission of an act of fraud, subversion, misappropriation or
embezzlement by such Optionee or (iv) a conviction of, or a plea of NOLO
CONTENDERE or a guilty plea or confession by, such Optionee to an act of fraud,
subversion, misappropriation, or embezzlement or to a felony.
(d) "Change in Control" means (i) the sale or transfer of all or
substantially all of the assets of the Corporation, whether in one transaction
or in a series of related transactions, except a sale or transfer to a successor
corporation in which the holders of the fully-diluted common stock of the
Corporation immediately prior to the transaction hold, directly or indirectly,
more than 50% of the total voting power of the successor corporation immediately
after the transaction or (ii) any merger or consolidation between the
Corporation and another corporation, except a merger or consolidation
immediately after which the holders of the fully-diluted common stock of the
Corporation immediately prior to the transaction hold, directly or indirectly,
more than 50% of the total voting power of the surviving corporation immediately
after the transaction.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
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(f) "Committee" means the Management Development -- Compensation
and Stock Option Committee of the Board, or any other committee the Board may
subsequently appoint to administer the Plan. The Committee shall be composed
entirely of directors who meet the qualifications referred to in Section 5 of
the Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan shall be exercised by the Board.
(g) "Corporation" means US Foodservice Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation).
(h) "Disability" means the permanent inability of an Optionee to
perform substantially his duties and responsibilities to Rykoff-Sexton, the
Corporation or any Subsidiary by reason of a physical or mental disability or
infirmity (i) for a continuous period of six months or (ii) at such earlier time
as the Optionee, at his option, submits satisfactory medical evidence that he
has a physical or mental disability or infirmity which will likely prevent him
from returning to the performance of his work duties for six months or longer.
The date of such disability shall be on the last day of such six-month period or
the day on which the Optionee submits such satisfactory medical evidence, as the
case may be.
(i) "Disinterested Persons" shall have the meaning set forth in
Rule 16b-3(c)(2)(i) as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, or any successor definition adopted
by such commission.
(j) "Employee" means any employee or officer of Rykoff-Sexton,
the Corporation or any Subsidiary, provided that the term Employee shall not
include a director of Rykoff-Sexton, the Corporation or any Subsidiary in his
capacity as such, but shall include a director of Rykoff-Sexton, the Corporation
or a Subsidiary who is otherwise employed by Rykoff-Sexton, the Corporation or a
Subsidiary.
(k) "Fair Market Value" means the fair market value per share of
Stock as determined by the Committee in good faith; PROVIDED, HOWEVER, that
(A) if the Stock is admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the Stock on
such exchange on such date or on the last date preceding such date on which a
sale was reported, (B) if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or other
comparable quotation system and has been designated as a National Market System
("NMS") security, Fair Market Value on any date shall be the last sale price
reported for the Stock on such system on such date or on the last day preceding
such date on which a sale was reported, or (C) if the Stock is admitted to
quotation on NASDAQ
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and has not been designated a NMS Security, Fair Market Value on any date shall
be the average of the highest bid and lowest asked prices of the Stock on such
system on such date.
(l) "Good Reason" means (i) a reduction, without the consent of
the Optionee, in the Optionee's base or aggregate compensation, other than an
across-the-board reduction in the compensation of substantially all similarly
situated employees of Rykoff-Sexton and the Subsidiaries, (ii) a material
reduction in the Optionee's responsibilities with Rykoff-Sexton or the
Corporation or a change in the Optionee's title to one of lesser status, or
(iii) such other events of hardship as the Board shall determine on a case by
case basis.
(m) "Involuntary Termination" means termination by
Rykoff-Sexton, the Corporation or a Subsidiary of an Optionee's employment.
(n) "Option" means any option to purchase shares of Stock
granted pursuant to Section 7.
(o) "Optionee" means a person to whom an Option has been granted
under the Plan.
(p) "Person" means any corporation, association, partnership,
joint venture, organization, business, individual, trust, or any other entity or
organization, including a government or any subdivision or agency thereof.
(q) "Plan" means the Amended and Restated US Foodservice Inc.
1993 Stock Option Plan.
(r) "Retirement" means, with respect to any Optionee, the
Optionee's retirement as an employee of Rykoff-Sexton, the Corporation or a
Subsidiary under a retirement plan of Rykoff-Sexton, the Corporation or such
Subsidiary, as the case may be.
(s) "Rykoff-Sexton" means Rykoff-Sexton, Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation).
(t) "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
(u) "Spread" means the difference between the Fair Market Value
and the exercise price per share pursuant to the Option. If such Fair Market
Value is less than the Exercise Price, then the Spread shall equal $0.
(v) "Stock" means the Common Stock, $0.10 par value, of
Rykoff-Sexton.
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(w) "Subsidiary" means any corporation, partnership, joint
venture or other entity of which Rykoff-Sexton owns, directly or indirectly, a
majority of the capital stock or is a general partner, or which it controls.
(x) "Voluntary Termination" means the voluntary termination by
an Optionee of his employment with Rykoff-Sexton, the Corporation or a
Subsidiary by voluntary resignation or any other means (i) other than because of
such Optionee's Retirement, Disability or death, or (ii) other than
simultaneously with or following termination for Cause or the occurrence of an
event which if known to Rykoff-Sexton, the Corporation or such Subsidiary at the
time of such voluntary termination by the Optionee of his employment would
constitute Cause.
Section 3. OPTION SHARES. (a) The shares of Stock which may be made
subject to Options granted pursuant to this Plan shall be no more than a total
of 319,700 shares of Stock except as such number may be adjusted as provided in
Section 15. Any shares of Stock remaining unissued at the termination of this
Plan shall cease to be reserved for the purpose of the Plan, but until
termination of the Plan, Rykoff-Sexton shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan.
(b) Whenever any outstanding Option or portion thereof expires,
is cancelled or is otherwise terminated (other than by exercise of the Option or
such portion thereof) Options (the "Regranted Options") relating to the number
of shares of Stock allocable to the unexercised portion of such Option shall be
available for granting.
Section 4. EFFECTIVE DATE OF PLAN. The Plan shall take effect upon
its adoption by the Board of Directors of the Corporation, provided that it is
approved by the stockholders of the Corporation.
Section 5. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Board or by the Committee composed of not less than three
Disinterested Persons, provided that if the Committee is not composed of three
or more Disinterested Persons, then the Plan shall be administered by the Board
or such other committee as determined by the Board. The Board may authorize the
Committee to exercise any and all of the powers and functions of the Board
pursuant to the Plan. The interpretation and construction by the Committee or
the Board of any provisions of the Plan or of any Options granted under it shall
be final and conclusive. No member of the Committee or of the Board shall be
personally liable for any action or determination made in good faith with
respect to the Plan or any Options granted under it.
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<PAGE>
Section 6. ELIGIBILITY. The persons eligible to participate in the
Plan as recipients of Options shall include only Employees.
Section 7. GRANT OF OPTIONS. Rykoff-Sexton, by action of the
Committee and subject to the provisions of this Plan, may, from time to time,
grant Options to purchase shares of Stock to such Employees as may be selected
by the Committee and for such number or numbers of shares of Stock as may be
determined by the Committee. Options granted pursuant to this Plan are intended
to not qualify as "incentive stock options" within the meaning of Section 422 of
the Code but are intended to constitute non-qualified stock options. Each
Option outstanding pursuant to this Plan shall be evidenced by an instrument in
writing and upon such terms and conditions as may be determined by the
Committee, subject to the provisions and limitations set forth in this Plan.
The grant of such Option shall be evidenced by written notice executed by an
authorized officer of Rykoff-Sexton so long as such officer is not the recipient
of the Option.
Section 8. OPTION PRICE. The purchase price for each share of Stock
placed under Option pursuant to this Plan (hereinafter called the "Option
Price") shall be determined by the Committee on the date of grant but unless the
Board otherwise determines in its discretion, shall be not less than 100% of the
Fair Market Value of the Stock on such date.
Section 9. EXERCISABILITY OF OPTIONS. Subject to Section 11 hereof,
an Option granted pursuant to this Plan may be exercised only within the time
limits and subject to the terms prescribed by the Committee in the grant of the
particular Option.
Section 10. PROCEDURE FOR EXERCISE AND PAYMENT FOR SHARES. Exercise
of an Option shall be made by the giving of written notice to Rykoff-Sexton by
the Optionee. Such written notice shall be deemed sufficient for this purpose
only if delivered to Rykoff-Sexton at its principal office and only if such
written notice states the number of shares of Stock. Payment upon the exercise
of an Option, if payment is due, shall be made in full at the time the Option is
exercised by delivery of such payment to Rykoff-Sexton at the principal offices
of Rykoff-Sexton. Upon the exercise of any Option, in compliance with the
provisions of this Section and (except as otherwise provided in Section 12) upon
receipt by Rykoff-Sexton of the payment for the Stock so purchased together with
the payment of the amount of any taxes required to be collected or withheld as a
result of the exercise of this Option, Rykoff-Sexton shall deliver or cause to
be delivered to the Optionee so exercising an Option either a certificate or
certificates for the number of shares of Stock with respect to which the Option
is so exercised and payment is so made or the Spread as provided by Section 12.
The shares of Stock shall be registered in the name of the exercising Optionee,
provided that, in no event, shall any shares
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<PAGE>
of Stock be issued pursuant to exercise of an Option until full payment therefor
shall have been made by cash or certified or bank cashier's check. Until the
shares of Stock have been issued, the exercising Optionee shall not have any of
the rights of a shareholder of Rykoff-Sexton with respect to such shares of
Stock. For purposes of this Section, the date of issuance shall be the date
upon which payment in full has been received by Rykoff-Sexton as provided
herein.
Section 11. DURATION OF OPTIONS. The period for which each Option
granted hereunder shall be effective shall commence upon the date of the grant
of the Option and shall continue until such Option shall be terminated according
to its terms or as hereinafter provided, but in no event shall such period
exceed ten (10) years and one (1) day (the "Option Period"). In addition to and
in limitation of the above, the Option Period of any Option granted pursuant to
this Plan shall terminate as follows:
(a) If the Optionee's employment is terminated due to such
Optionee's death, Disability, Retirement, Involuntary Termination without Cause
or Voluntary Termination with Good Reason, the Option (to the extent exercisable
at the time of the Optionee's termination of employment) shall be exercisable by
the Optionee or the Optionee's personal representative, but only upon (A) the
death of the Optionee or (B) the incompetency of the Optionee for purposes of
protection and management of the Optionee's assets (a "Personal
Representative"), for a period of six (6) months following such termination of
employment, and shall thereafter terminate;
(b) If the Optionee's employment is terminated due to such
Optionee's Voluntary Termination without Good Reason or Involuntary Termination
with Cause, the Option shall terminate on the date of the Optionee's termination
of employment; and
(c) In the event of a Change in Control, Rykoff-Sexton may elect
to pay the Optionee the Spread on such date and, upon payment thereof by
Rykoff-Sexton, the Option shall terminate.
To the extent any Option is not exercisable at the time of the
Optionee's termination of employment (for whatever reason), such Option shall
terminate on the date of the Optionee's termination of employment.
Notwithstanding the foregoing, the Committee may provide, either at
the time an Option is granted or thereafter, that the Option may be exercised
after the periods provided for in this Section 11, but in no event beyond the
term of the Option.
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<PAGE>
Nothing contained herein shall limit whatever right Rykoff-Sexton, the
Corporation or any Subsidiary might otherwise have to terminate the employment
of any Employee.
Successive Options may be granted to the same Employee whether or not
the Option or Options first granted to such Employee remain unexercised.
Section 12. PAYMENT OF THE SPREAD. In the event that an Optionee
ceases to be employed by Rykoff-Sexton, the Corporation or any Subsidiary:
(a) If an Optionee's termination of employment is due to such
Optionee's death, Disability or Retirement, Rykoff-Sexton shall have the right,
but not the obligation, to pay to the Optionee or the Optionee's Personal
Representative an amount equal to the Spread times the number of shares of Stock
allocable to the vested portion of the Option (to the extent exercisable at the
time of the Optionee's termination of employment); and
(b) If the employment of an Optionee terminates due to such
Optionee's (A) Involuntary Termination without Cause or (B) Voluntary
Termination with Good Reason, Rykoff-Sexton shall have the right, but not the
obligation, to pay to the Optionee an amount equal to the Spread times the
number of shares of Stock allocable to the vested portion of the Option (to the
extent exercisable at the time of the Optionee's termination of employment).
(c) In the event of a Change in Control, Rykoff-Sexton shall
have the right, but not the obligation, to pay the Optionee an amount equal to
the Spread times the number of shares of Stock allocable to the vested portion
of the Option (to the extent exercisable at the time of the Change in Control,
assuming, for the avoidance of doubt, that such Change in Control had occurred).
No amount shall be payable to any Optionee pursuant to this Section 12
if the employment of an Optionee terminates due to (A) the Involuntary
Termination with Cause of the Employee or (B) the Voluntary Termination without
Good Reason of the Employee. Any amount required to be paid pursuant to Section
12(a), 12(b) or 12(c) shall be paid within sixty (60) days of the Optionee's
termination of employment or the date of the Change in Control, as the case may
be. To the extent Rykoff-Sexton pays the Optionee the Spread for any Option,
such Option shall be cancelled to the extent of the number of shares of Stock as
to which the Spread has been paid.
Notwithstanding anything to the contrary set forth herein,
Rykoff-Sexton may defer payment of the Spread if it elects to pay the Spread
pursuant to this Section 12 to the extent: (i) such payment would violate or
conflict with any
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<PAGE>
statute, rule, injunction, regulation, order, judgment or decree applicable to
Rykoff-Sexton or any Subsidiary or by which it, any Subsidiary or any of its or
its Subsidiaries' properties may be bound or affected; (ii) such payment would
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the property or assets of
Rykoff-Sexton or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Rykoff-Sexton or any Subsidiary is a party or
by which Rykoff-Sexton or any Subsidiary or any of their properties is bound or
affected; or (iii) in the ordinary course such payment would be made out of the
proceeds of a loan, dividend or other payment to Rykoff-Sexton by one of its
Subsidiaries and the making of such payments or loans or payment of such
dividend would result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of Rykoff-Sexton or a Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Rykoff-Sexton or a
Subsidiary is a party or by which Rykoff-Sexton or a Subsidiary or any of their
properties is bound or affected (each such event, a "Conflict"). In the event
of a Conflict, the obligation of Rykoff-Sexton to pay the Spread shall be
suspended for the duration of such Conflict and such obligation shall resume
upon termination of such Conflict; PROVIDED, HOWEVER, that (a) Rykoff-Sexton
shall be required to make such payment upon termination of such Conflict;
(b) Rykoff-Sexton shall use its reasonable best efforts to obtain the consent,
approval, authorization or permit of any Person which would permit the payment
of the Spread without the occurrence of such Conflict; and (c) all rights
hereunder enjoyed by the Optionee on and as of the date on which such payment
would have been made but for such Conflict shall be preserved and shall not be
altered, reduced or adversely affected by such Conflict, PROVIDED FURTHER,
HOWEVER, that the proviso set forth in this subparagraph (c) shall not be
construed to create, add to or supplement any rights not otherwise enjoyed by
the Optionee on and as of such date and no additional Options of such Optionee
shall become vested subsequent to such date.
Rykoff-Sexton may elect to pay a portion, not to exceed such
percentage as may be required to avoid the occurrence of a Conflict, of the
Spread in the form of an unsecured junior subordinated promissory note made by
Rykoff-Sexton and payable to the stockholder (a "Company Note") or in other
securities of Rykoff-Sexton. Each Company Note will mature on the later to
occur of the second anniversary of the date such Company Note was issued and the
date payment of such Company Note will not give
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<PAGE>
rise to a Conflict. Each Company Note will bear interest at a rate equal to the
lower of (i) 7% per annum or (ii) the average time weighted reference rate of
The Chase Manhattan Bank, N.A. Such interest shall be paid annually; provided,
however, that if payment of such interest would give rise to a Conflict it shall
accrue and shall not be paid until such time as payment of it would not give
rise to a Conflict.
Section 13. NON-TRANSFERABILITY. No Option granted pursuant to this
Plan may be transferred by the Optionee except to the Personal Representative of
a deceased Optionee, and, further, during the lifetime of the Optionee, the
Option may be exercised only by such Optionee or such Optionee's Personal
Representative.
Section 14. REQUIREMENTS OF LAW AND OF CERTAIN AGREEMENTS. If any
law, regulation or interpretation of any commission or agency having
jurisdiction shall require Rykoff-Sexton or the exercising Optionee to take any
action with respect to the shares of Stock acquired by the exercise of an
Option, then the date upon which Rykoff-Sexton shall issue or cause to be issued
the certificate or certificates of the shares of Stock shall be postponed until
full compliance has been made with all such requirements of law, regulation or
interpretation, PROVIDED, that Rykoff-Sexton shall use its reasonable best
efforts to fully comply with such requirements of law, regulation or
interpretation; PROVIDED, FURTHER, that all rights hereunder enjoyed by the
Optionee on and as of the date on which such certificates would have been
issued but for the lack of such compliance shall be preserved and shall not
be altered, reduced or adversely affected by any such lack of compliance; and
PROVIDED, FURTHER, HOWEVER immediately preceding proviso shall not be
construed to create, add to or supplement any rights not otherwise enjoyed by
the Optionee on and as of such date and no additional Options of such
Optionee shall become vested subsequent to such date. Further, if requested
by Rykoff-Sexton, at or before the time of the issuance of the shares of
Stock with respect to which exercise of an Option has been made, the
exercising Optionee shall deliver to Rykoff-Sexton such Optionee's written
statement satisfactory in form and content to Rykoff-Sexton, that such
Optionee intends to hold the shares of Stock so acquired by such Optionee on
exercise of such Optionee's Option, for investment and not with a view of
resale or other distribution thereof to the public in violation of the
Securities Act. Moreover, in the event that Rykoff-Sexton shall determine
that, in compliance with the Securities Act or other applicable statutes or
regulations, it is necessary to register any of the shares of Stock with
respect to which an exercise of an Option has been made, or to qualify any
such shares of Stock for exemption from any of the requirements of the
Securities Act or any other applicable statute or regulation, no shares of
Stock shall be issued to the exercising Optionee until the required action
has been completed; PROVIDED, that all rights hereunder and under the Plan
enjoyed by the Optionee on and as of the date on
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<PAGE>
which such Options would have been exercised or shares of Stock issued, as
the case may be, but for such required action not having been taken shall be
preserved and shall not be altered, reduced or adversely affected by the
failure to take any such required action; and PROVIDED, FURTHER, HOWEVER,
that the preceding proviso shall not be construed to create, add to or
supplement any rights not otherwise enjoyed by the Optionee on and as of such
date and no additional Options of such Optionee shall become vested
subsequent to such date.
Section 15. ADJUSTMENTS. In the event of the declaration of any
stock dividend on the Stock or in the event of any reorganization, merger,
consolidation, acquisition, separation, recapitalization, reclassification,
split-up, combination or exchange of the Stock or like adjustment, the number of
shares of Stock and the class of shares of stock available pursuant to this
Plan, the performance targets applicable to Performance Options and the number
and class of shares of Stock subject to any Option granted pursuant to this
Plan, and the Option Prices, shall be adjusted by appropriate change in this
Plan and in any Options outstanding pursuant to this Plan. Any such adjustment
to the Plan or to Options or Option Prices shall be made by action of the Board
in good faith, whose good faith determination shall be conclusive.
Section 16. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board may,
insofar as permitted by law, amend, suspend or discontinue this Plan at any time
without restriction, PROVIDED, HOWEVER, that the Board may not alter or amend or
discontinue or revoke or otherwise impair any outstanding Options which have
been granted pursuant to this Plan and which remain unexercised, except (i) with
respect to amendments affecting all Options (vested and unvested), with the
consent of the holders of vested Options representing the right to purchase a
majority of the total number of shares of Stock subject to Options which are
vested; provided, however, that if no Options are vested then the requisite
consent shall be the consent of holders of unvested Options representing the
right to purchase a majority of the total number of shares of Stock subject to
Options which are unvested, (ii) with respect to amendments affecting only
Performance Options (vested and unvested) or Normal Options (vested and
unvested), with the consent of the holders of vested Normal Options or vested
Performance Options, as the case may be, representing the right to purchase a
majority of the total number of shares of Stock subject to Normal Options which
are vested or Performance Options which are vested, as the case may be;
provided, however, that if none of the Performance Options are vested then the
requisite consent shall be the consent of the holders of unvested Performance
Options, representing the right to purchase a majority of the total number of
shares of Stock subject to Performance Options which are unvested, (iii) in the
event of a merger, reorganization, or other adjustment referred to in Section 15
above, or (iv) with the written consent of the holder of the outstanding Option
proposed to be so altered or
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amended. The Board may not, without the approval of the stockholders of the
Corporation, amend, alter or revise the Plan to increase the number of shares of
Stock subject to the Plan, change the description of the class of employees
eligible to receive Options or decrease the price at which Options may be
granted except as provided in Section 15. The Option Period of any outstanding
Option shall not be extended by any amendment or suspension or discontinuance of
the Plan. For purposes of this Section 16 a Performance Option shall be
considered vested if it has become exercisable under the relevant Performance
Option Agreement.
Section 17. LIQUIDATION OF RYKOFF-SEXTON. In the event of the
complete liquidation or dissolution of Rykoff-Sexton other than as an incident
to a merger, reorganization, or other adjustment referred to in Section 15
above, any Options granted pursuant to this Plan and remaining unexercised shall
be deemed cancelled without regard to or limitation by any other provision of
this Plan.
Section 18. TERM OF PLAN. No Option shall be granted pursuant to the
Plan on or after the tenth anniversary of the date on which the Corporation's
Board of Directors approved the Plan, but Options theretofore granted may be
extended beyond that date.
11
