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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
JP Foodservice, Inc.
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(Name of Issuer)
Common Stock, Par Value $.10 Per Share
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(Title of Class of Securities)
46623210-5
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(CUSIP Number)
Richard J. Martin
Executive Vice President and Chief Financial Officer
Rykoff-Sexton, Inc.
613 Baltimore Dr.
East Mountain Corporate Center
Wilkes-Barre, PA 18702-7944
(717) 830-7100
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 30, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
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SCHEDULE 13D
<TABLE>
<CAPTION>
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<S> <C>
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rykoff-Sexton, Inc.
I.R.S. Identification No. 95-2134693
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4 WC, OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
5 REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
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SOLE VOTING POWER
7
NUMBER OF 4,495,149 shares (1) (See Item 5)
SHARES
BENEFICIALLY -------------------------------------------------------
OWNED BY SHARED VOTING POWER
EACH
REPORTING 8
PERSON WITH
-------------------------------------------------------
SOLE DISPOSITIVE POWER
9 4,495,149 shares (1) (See Item 5)
-------------------------------------------------------
SHARED DISPOSITIVE POWER
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 4,495,149 shares (1) (See Item 5)
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
12 [_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13 16.8% (2)
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TYPE OF REPORTING PERSON
14 CO, HC
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</TABLE>
(1) The reporting person disclaims beneficial ownership of all such shares
pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as amended.
Beneficial ownership of such shares is being reported hereunder solely as a
result of the option (the "Option") granted pursuant to the JP Stock Option
Agreement described in Item 4 hereof. Rykoff-Sexton, Inc. ("RSI") expressly
disclaims any beneficial ownership of such shares of JP Common Stock which are
obtainable by RSI upon exercise of the Option because the Option is exercisable
only in the circumstances set forth in Item 4, none of which has occurred as of
the date hereof.
(2) Gives effect to the issuance of JP Common Stock subject to this option.
2
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Item 1. Security and Issuer
This statement relates to shares of common stock, par value $.10 per share
(the "JP Common Stock"), of JP Foodservice, Inc. ("JP"). The address of JP's
principal executive offices is 9830 Patuxent Woods Drive, Columbia, Maryland
21046.
Item 2. Identity and Background
(a) - (c) and (f). This Schedule 13D is being filed by Rykoff-Sexton,
Inc., a corporation organized and existing under the laws of the State of
Delaware. RSI is a distributor of food and related non-food items to
restaurants and to other food providers. RSI's principal offices are located at
613 Baltimore Dr., East Mountain Corporate Center, Wilkes-Barre, Pennsylvania
18702-6980.
Each executive officer and each director of RSI is a citizen of the United
States, other than Mark Van Stekelenburg and Jan W. Jeurgens, who are both
citizens of the Netherlands. The name, business address, and present principal
occupation of each executive officer and director is set forth in Annex A to
this Schedule 13D, which is specifically incorporated herein by reference.
Merrill Lynch Capital Partners, Inc., Merrill Lynch Capital Appreciation
Partnership No. B-XVIII, L.P., Merrill Lynch Kecalp L.P. 1994, ML Offshore LBO
Partnership No. B-XVIII, ML IBK Positions, Inc., MLCP Associates L.P. No. II,
MLCP Associates L.P. No. IV, Merrill Lynch Kecalp L.P. 1991, Merrill Lynch
Capital Appreciation Partnership No. XIII, L.P., ML Offshore LBO Partnership No.
XIII, ML Employees LBO Partnership NO. I, L.P., Merrill Lynch Kecalp L.P. 1981,
and Merchant Banking L.P. No. II (each, an "ML Entity" and collectively, the "ML
Entities") beneficially own approximately 36.4% of the outstanding RSI common
stock. However, the ML Entities have entered into a Standstill Agreement, dated
May 17, 1996, and, as a result thereof, are not deemed to be controlling persons
of RSI.
The preceding summary of the Standstill Agreement is qualified in its
entirety by reference to the full text of such agreement, which is included as
Exhibit 10.38 to RSI's Annual Report on Form 10-K for the fiscal year ended June
28, 1997, filed September 24, 1997 ("RSI 10-K"), and is hereby incorporated
herein by reference.
(d) - (e). During the last five years, neither RSI nor, to the best
knowledge of RSI, any executive officer or director of RSI, has been (i)
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors), or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
has been or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Fund or Other Consideration
Pursuant to the JP Stock Option Agreement described in Item 4 (the "JP
Stock Option Agreement"), JP has granted to RSI an option (the "Option") to
purchase up to 4,495,149 shares of JP Common Stock at a price of $30.125 per
share, exercisable only upon the occurrence of certain events. The exercise of
the Option to purchase the full number of shares of JP Common Stock currently
covered thereby would require aggregate funds of approximately $135,416,364. If
RSI were to purchase shares of JP Common Stock pursuant to the JP Stock Option
Agreement, RSI currently anticipates that such funds would be provided from
RSI's working capital and from borrowings from other sources yet to be
determined.
Item 4. Purpose of Transaction
On June 30, 1997, RSI, Hudson Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of JP ("Acquisition Corp."), and JP entered into a
Agreement and Plan of Merger (as amended, the "Merger Agreement"), pursuant to
which RSI will be merged with and into Acquisition Corp. (the "Merger"). On
September 3, 1997, the parties to the Merger Agreement entered into Amendment
No. 1 to Merger Agreement ("Amendment No. 1"). On November 5, 1997, the parties
to the Merger Agreement entered into Amendment No. 2 to the Agreement and Plan
of Merger ("Amendment No. 2").
The JP Common Stock issued and outstanding will remain issued and
outstanding shares of common stock of JP and will not be affected by the Merger.
The Merger will be a tax-free reorganization and will be accounted for as a
pooling of interests. The Merger is subject to a number of conditions set forth
in the Merger Agreement. The Merger Agreement, as originally executed and
delivered, is included as Exhibit 1 hereto and is hereby incorporated herein by
reference. Amendment No. 1 is included as Exhibit 1.1 hereto and is hereby
incorporated herein by reference. Amendment No. 2 is included as Exhibit 1.2
hereto and is hereby incorporated herein by reference.
3
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As a condition and inducement to RSI's entering into the Merger Agreement
(and a reciprocal stock option agreement), JP entered into the JP Stock Option
Agreement with RSI. Pursuant to the JP Stock Option Agreement, JP has granted
to RSI an option to purchase up to 4,495,149 shares (the "Option Shares") of JP
Common Stock at a price of $30.125 per share, exercisable only upon the
occurrence of certain events. Under certain circumstances set forth in the JP
Stock Option Agreement, RSI, as grantee of the Option, may surrender the Option
to JP in exchange for a formula payment based on the difference (reduced by the
amount of any termination fee paid by JP to RSI pursuant to the Merger
Agreement) between the price paid to JP or its stockholders in certain competing
transactions involving the acquisition of JP and exercise price of the Option.
The JP Stock Option Agreement is included as Exhibit 2 hereto and is hereby
incorporated herein by reference.
Pursuant to the Merger Agreement, upon completion of the transaction, Jim
Miller, current Chairman, President and Chief Executive Officer of JP, will be
Chairman and Chief Executive Officer of the combined company, and Mark Van
Stekelenburg, current Chairman and Chief Executive Officer of RSI, will be Vice
Chairman and President of the combined company. The company's board will
consist of the nine current JP directors, seven current RSI directors, and one
new independent director to be added after closing.
Pursuant to the Merger Agreement, JP has agreed, during the period prior to
the Merger, that neither it nor its subsidiaries shall pay dividends except for
certain intercompany dividends.
Except as stated in this Item 4, RSI has no plans or proposals which relate
to or would result in any of the matters set forth in clauses (a) through (j) of
Item 4 of Schedule 13D.
The preceding summary of certain provisions of the Merger Agreement,
Amendment No. 1, Amendment No. 2 and the JP Stock Option Agreement, copies of
which are filed as exhibits hereto, is not intended to be complete and is
qualified in its entirety by reference to the full text of such agreements.
Item 5. Interest in Securities of the Issuer
(a) and (b). Pursuant to the JP Stock Option Agreement, RSI has the right,
exercisable only in certain circumstances, none of which has occurred as of the
date hereof, to acquire up to 4,495,149 shares of JP Common Stock, which
represents beneficial ownership of approximately 19.9% of the shares of JP
Common Stock currently outstanding. If RSI were to acquire such shares, it
would have sole voting and, subject to certain restrictions set forth in the JP
Stock Option Agreement, investment power with respect thereto. Because of the
limited circumstances in which the option granted under the JP Stock Option
Agreement is exercisable, RSI disclaims beneficial ownership of such shares of
JP Common Stock subject to the JP Stock Option Agreement.
To the best of RSI's knowledge, no executive officer or director of RSI
beneficially owns any shares of JP Common Stock except that William J. Caskey,
Executive Vice President of RSI and Chief Executive Officer of RSI's Marketing
Division, beneficially owns 100 shares of JP Common Stock, which represents
beneficial ownership of less than 1% of the shares of JP Common Stock currently
outstanding. Mr. Caskey shares voting and investment power with respect to such
shares with his wife, who is, to the best knowledge of RSI, a citizen of the
United States and whose address is c/o William J. Caskey at the address set
forth for Mr. Caskey on Annex A hereto.
(c) Except to the extent of transactions in a fiduciary capacity, there
have been no transactions in shares of JP Common Stock by RSI, or, to the best
knowledge of RSI, any of RSI's executive officers and directors during the past
60 days.
(d) To the best of RSI's knowledge, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the JP Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
On June 30, 1997, in connection with the execution of the Merger Agreement,
the ML Entities, who hold in the aggregate approximately 36.4% of the
outstanding shares (the "ML Shares") of RSI Common Stock as of such date,
entered into a Support Agreement (as amended and restated, the "Support
Agreement"), dated as of June 30, 1997, with JP, and acknowledged by RSI.
Pursuant to the Support Agreement, inter alia, the ML Entities have agreed not
----------
to take certain actions during the term of the Support Agreement relating to the
disposition of the businesses or assets of JP or RSI or their respective
subsidiaries, or the acquisition of the voting securities of JP or RSI or their
respective subsidiaries, or the merger or consolidation of JP or RSI or any of
their respective subsidiaries with or into any corporation or other entity,
other than the Merger or related transactions. The Support Agreement will
terminate in the event that the Merger Agreement is terminated in accordance
with its terms.
The preceding summary of the Support Agreement is qualified in its entirety
by reference to the full text of such Support Agreement, which is included as
Exhibit 3 hereto and is hereby incorporated herein by reference.
4
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A copy of the JP Stock Option Agreement is included as Exhibit 2 hereto and
is incorporated herein by reference. The rights and obligations of RSI and JP
under the JP Stock Option Agreement are subject to all required regulatory
approvals.
A copy of the Merger Agreement is included as Exhibit 1 hereto, a copy of
Amendment No. 1 is included as Exhibit 1.1 hereto and a copy of Amendment No. 2
is included as Exhibit 1.2 hereto, and each is incorporated herein by reference.
Except as set forth in Items 3, 4, 5 and 6 neither RSI nor, to the best
knowledge of RSI, any of its directors or executive officers, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
other person with respect to any securities of JP.
Item 7. Material to Be Filed as Exhibits
1. Agreement and Plan of Merger, dated as of June 30, 1997, by and between
Rykoff-Sexton, Inc., Hudson Acquisition Corp. and JP Foodservice, Inc.
(incorporated by reference to Exhibit 1 to the Schedule 13D of Rykoff-
Sexton, Inc. filed on July 10, 1997).
1.1. Amendment No. 1 to Agreement and Plan of Merger, dated as of September
3, 1997, by and among Rykoff-Sexton, Inc., JP Foodservice, Inc. and
Hudson Acquisition Corp. (incorporated by reference to Exhibit 1.1 to
the Schedule 13D/A of Rykoff-Sexton, Inc. filed on September 15, 1997).
1.2. Amendment No. 2 to Agreement and Plan of Merger, dated as of November 5,
1997, by and among Rykoff-Sexton, Inc., JP Foodservice, Inc. and Hudson
Acquisition Corp.
2. Stock Option Agreement, dated as of June 30, 1997, by and between JP
Foodservice, Inc., as issuer, and Rykoff-Sexton, Inc., as grantee
(incorporated by reference to Exhibit 2 to the Schedule 13D of Rykoff-
Sexton, Inc. filed on July 10, 1997).
3. Amended and Restated Support Agreement, dated as of June 30, 1997, by
and between JP Foodservice, Inc., on the one hand, and the stockholders
of Rykoff-Sexton, Inc. listed on the signature pages thereto, on the
other hand, and acknowledged by Rykoff-Sexton, Inc. (incorporated by
reference to Exhibit 3 to the Schedule 13D/A of Rykoff-Sexton, Inc.
filed on September 15, 1997).
4. Standstill Agreement, dated May 17, 1996, by and between Rykoff-Sexton,
Inc., on the one hand, and the other Persons set forth on the signature
pages thereto, on the other hand (incorporated by reference to Exhibit
10.39 of the RSI 10-K).
5. Stock Option Agreement, dated as of June 30, 1997, by and between
Rykoff-Sexton, Inc., as issuer, and JP Foodservice, Inc., as grantee
(incorporated by reference to Exhibit 99.2 of the RSI Form 8-K, filed
July 10, 1997, dated as of June 30, 1997).
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
RYKOFF-SEXTON, INC.
November 12, 1997 By: /s/ Richard J. Martin
-------------------------- ----------------------------------
Date Richard J. Martin
Executive Vice President and
Chief Financial Officer
5
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ANNEX A
Identity and Background
-----------------------
The following table sets forth the names, addresses and principal
occupations of the executive officers and directors of Rykoff-Sexton, Inc.
("RSI"). Except as set forth below, the principal business address of each
director and executive officer is the address of RSI, 613 Baltimore Dr., East
Mountain Corporate Center, Wilkes-Barre, Pennsylvania 18702-6944. Each of such
directors and executive officers is a citizen of the United States, other than
Mark Van Stekelenburg and Jan W. Jeurgens, who are both citizens of the
Netherlands.
<TABLE>
<CAPTION>
Directors
Name and Business Address Present Principal Occupation or Employment
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Mark Van Stekelenburg Chairman of the Board, President and CEO of
Rykoff-Sexton, Inc.
Matthias B. Bowman Vice Chairman of Investment Banking at Merrill
World Financial Center, Lynch & Co., Inc. and President of
North Tower Merrill Lynch Capital Partners; Director
250 Vesey St. of SMG II Holdings Corporation
New York, NY 10281
Richard Fink Chairman of G & K Services, Inc.
5995 Opus Parkway
Minnetonka, MN 55343
Albert J. Fitzgibbons, III Partner of Stonington Partners,
767 Fifth Avenue, 48th Floor Inc.; Director of Borg-Warner
New York, NY 10153 Automotive, Inc., Borg-Warner Security
Corporation, Dictaphone Corporation
and United Artists Theatre Circuit, Inc.
Jan W. Jeurgens Retired
James I. Maslon Retired
James P. Miscoll Director of American International Group, Inc.,
Coast Federal Financial, Inc., MK Gold Company,
MotivePower Industries, Inc. and U.S. Rentals,
Inc.
Neil I. Sell Partner in the law firm of Maslon Edelman Borman &
3300 Norwest Center Brand, L.L.P.; Director of Grand Casinos, Inc.
90 South Seventh Street
Minneapolis, MN 55402-4140
Bernard Sweet Director of G & K Services, Inc.
Robert W. Williamson President & CEO of Merrill Lynch International
World Financial Center, Banks
North Tower
250 Vesey Street
New York, NY 10281
</TABLE>
6
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<TABLE>
<CAPTION>
Executive Officers
Name and Business Address Present Principal Occupation or Employment
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<S> <C>
Mark Van Stekelenburg Chairman of the Board, President and CEO of
Rykoff-Sexton, Inc.
Harold E. Feather Executive Vice President, Strategic Planning of
Rykoff-Sexton, Inc. and Executive Vice President,
Operations of Rykoff-Sexton, Inc.'s Distribution
Division
William J. Caskey Executive Vice President of Rykoff-Sexton, Inc.
and Chief Executive Officer of Rykoff-Sexton,
Inc.'s Marketing Division
Robert J. Harter, Jr. Senior Vice President, Administration, General
Counsel and Secretary of Rykoff-Sexton, Inc.
Richard J. Martin Executive Vice President and Chief Financial
Officer of Rykoff-Sexton, Inc.
Timothy Buckley Vice President of Rykoff-Sexton, Inc. and
President of Rykoff-Sexton, Inc.'s Targeted
Specialty Services, Inc. subsidiary
Kenneth B. Kozel Vice President and Treasurer of Rykoff-Sexton,
Inc.
Christopher Mellon Vice President and Controller of Rykoff-Sexton,
Inc.
</TABLE>
7
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<TABLE>
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Exhibit Number Description
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<S> <C>
1. Agreement and Plan of Merger, dated as of June 30, 1997, by and
between Rykoff-Sexton, Inc., Hudson Acquisition Corp. and JP
Foodservice, Inc. (incorporated by reference to Exhibit 1 to the
Schedule 13D of Rykoff-Sexton, Inc. filed on July 10, 1997).
1.1. Amendment No. 1 to Agreement and Plan of Merger, dated as of
September 3, 1997, by and among Rykoff-Sexton, Inc., JP
Foodservice, Inc. and Hudson Acquisition Corp. (incorporated by
reference to Exhibit 1.1 to the Schedule 13D/A of Rykoff-Sexton,
Inc. filed on September 15, 1997).
1.2. Amendment No. 2 to Agreement and Plan of Merger, dated as of
November 5, 1997, by and among Rykoff-Sexton, Inc., JP
Foodservice, Inc. and Hudson Acquisition Corp.
2. Stock Option Agreement, dated as of June 30, 1997, by and between
JP Foodservice, Inc., as issuer, and Rykoff-Sexton, Inc., as
grantee (incorporated by reference to Exhibit 2 to the Schedule
13D of Rykoff-Sexton, Inc. filed on July 10, 1997).
3. Amended and Restated Support Agreement, dated as of June 30,
1997, by and between JP Foodservice, Inc., on the one hand, and
the stockholders of Rykoff-Sexton, Inc. listed on the signature
pages thereto, on the other hand, and acknowledged by Rykoff-
Sexton, Inc. (incorporated by reference to Exhibit 3 to the
Schedule 13D/A of Rykoff-Sexton, Inc. filed on September 15,
1997).
4. Standstill Agreement, dated May 17, 1996, by and between Rykoff-
Sexton, Inc., on the one hand, and the other Persons set forth on
the signature pages thereto, on the other hand (incorporated by
reference to Exhibit 10.39 of the RSI 10-K).
5. Stock Option Agreement, dated as of June 30, 1997, by and between
Rykoff-Sexton, Inc., as issuer, and JP Foodservice, Inc., as
grantee (incorporated by reference to Exhibit 99.2 of the RSI
Form 8-K, filed July 10, 1997, dated as of June 30, 1997).
</TABLE>
8
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EXHIBIT 2.3
CONFORMED COPY
--------------
AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 2 ("Amendment No. 2"), dated as of November 5, 1997, to
the Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 30,
1997, by and among JP Foodservice, Inc., a Delaware corporation ("JPFI"),
Rykoff-Sexton, Inc., a Delaware corporation ("RSI"), and Hudson Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of JP Foodservice
("Merger Sub").
WHEREAS, JPFI, RSI and Merger Sub have previously executed and
delivered the Merger Agreement; and
WHEREAS, JPFI, RSI and Merger Sub have previously executed and
delivered Amendment No. 1 to the Agreement and Plan of Merger ("Amendment No.
1"); and
WHEREAS, JPFI, RSI and Merger Sub desire to further amend the Merger
Agreement as set forth herein and pursuant to Section 7.3 thereof (it being
understood that all references to the Merger Agreement herein or any provision
thereof refer to such Merger Agreement or provision as amended by Amendment No.
1);
NOW, THEREFORE, JPFI, RSI and Merger Sub agree as follows:
1. Definitions. Capitalized terms used but not expressly defined
herein shall have the meanings accorded such terms in the Merger Agreement.
2. Amendment of Section 2.1(b) of Merger Agreement. The first
sentence of Section 2.1(b) of the Merger Agreement is hereby amended to read, in
its entirety, as follows:
Subject to Section 2.2(e), each issued and outstanding share of RSI
Common Stock (other than shares to be canceled in accordance with
Section 2.1(a)) shall be converted into the right to receive 0.775
(the "Exchange Ratio") validly issued, fully paid and non-assessable
shares of common stock, par value $.01 per share ("JPFI Common
Stock"), of JPFI.
All references to the Exchange Ratio in the Merger Agreement or in any other
instrument or agreement contemplated thereby shall be deemed to refer to the
Exchange Ratio as amended hereby.
<PAGE>
3. Amendment of Section 2.1(e)(iii). Section 2.1(e)(iii) of the
Merger Agreement is hereby amended and restated in its entirety as follows:
"(iii) At the Effective Time, the warrants, dated May 17, 1996,
between RSI and each of Teachers Insurance and Annuity Association of
America, the Nippon Credit Bank, Ltd. and Dresdner Bank AG (each, an
"Assumed Warrant") shall be assumed by JPFI and shall constitute a
warrant to acquire, otherwise on the same terms and conditions as were
applicable under such Assumed Warrant, a number of shares of JPFI
Common Stock determined pursuant to the terms of Sections 2 and 3 of
the Assumed Warrants, copies of which have been delivered to JPFI.
4. Amendment of Article III. Article III of the Merger Agreement is
hereby amended and restated in its entirety to read as set forth on Schedule IV
hereto.
5. Amendment of Section 4.1(a) of Merger Agreement. (a) The
introductory paragraph to Section 4.1(a) of the Merger Agreement is hereby
amended in its entirety as follows:
"(a) Conduct of Business by RSI. Except (i) as disclosed to an
executive officer of JPFI in writing prior to the date of Amendment
No. 2 to this Agreement ("Amendment No. 2"), or (ii) as disclosed in
(A) the RSI Disclosure Schedule, (B) any RSI Filed SEC Document, or
(C) any press release issued by RSI prior to the date of this
Amendment (each, an "RSI Press Release"), (iii) as otherwise expressly
contemplated by this Agreement or the transactions contemplated
thereby, or (iv) as consented to by JPFI in writing, such consent not
to be unreasonably withheld or delayed, during the period from the
date of this Agreement to the Effective Time, (I) RSI shall, and shall
cause its subsidiaries to, carry on their respective businesses in the
ordinary course consistent with past practice and in compliance in all
material respects with all applicable laws and regulations, and, to
the extent consistent therewith, use all reasonable efforts to
preserve intact their current business organizations, (II) except as
may be required by law or any plan, program, contract or arrangement
in effect on the date of Amendment No. 2, during the period from the
date of this Agreement to the Effective Time, RSI shall not, and shall
not permit any of its subsidiaries to, (A) grant to any current or
former director, officer, any regional vice president or president of
any division of RSI or its subsidiaries any increase in compensation,
bonus or other benefits, except as required by employment agreements
in effect as of April 27, 1996; (B) grant to any such current or
former director, officer, any regional vice president or president of
any division any increase in severance or termination pay; or (C)
enter into, or amend, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with
any such current or former director, officer, regional vice president
or president of any division, or (III) except as may be required by
law or any plan, program, contract or arrangement in effect on the
date of Amendment No. 2,
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<PAGE>
during the period from the date of Amendment No. 2 to the Effective
Time, RSI shall not, and shall not permit any of its subsidiaries to
adopt or amend, and to RSI's knowledge since October 8, 1997, RSI has
not and has not permitted any of its subsidiaries to, adopt or amend,
any collective bargaining agreement (other than renegotiations
required by any such collective bargaining agreement), employment
agreement, consulting agreement, severance agreement or any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former employee, officer or
director of RSI or any of its wholly-owned subsidiaries (collectively,
the "RSI Benefit Plans"), in any manner which would, individually, or
in the aggregate, involve amounts in excess of $1,000,000. Anything in
this Section 4.1(a) to the contrary notwithstanding, RSI and any RSI
subsidiary shall not be deemed in violation of this Section 4.1(a) if
such violation is cured prior to the Effective Time. Without limiting
the generality of the foregoing (but subject to the above exceptions),
during the period from the date of this Agreement to the Effective
Time, RSI shall not, and shall not permit any of its subsidiaries to:"
(b) Existing Section 4.1(a)(vi) of the Merger Agreement is hereby
deleted in its entirety and replaced with the following:
"make any tax election that individually or in the aggregate
would have a material adverse effect on RSI or any of its tax
attributes or settle or compromise any material income tax liability"
6. Amendment of Section 4.1(b) of Merger Agreement. (a) The
introductory paragraph to Section 4.1(b) of the Merger Agreement is hereby
amended in its entirety as follows:
"(b) Conduct of Business by JPFI. Except (i) as disclosed to an
executive officer of RSI in writing prior to the date of Amendment
No.2, or (ii) as disclosed in (A) the JPFI Disclosure Schedule as
amended by Schedule V to Amendment No. 2, (B) any JPFI Filed SEC
Document, or (C) any press release issued by JPFI prior to the date of
Amendment No. 2 (each, a "JPFI Press Release"), (iii) as otherwise
expressly contemplated by this Agreement or the transactions
contemplated thereby, or (iv) as consented to by RSI in writing, such
consent not to be unreasonably withheld or delayed, during the period
from the date of this Agreement to the Effective Time, (I) JPFI shall,
and shall cause its
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<PAGE>
subsidiaries to, carry on their respective businesses in the ordinary
course consistent with past practice and in compliance in all material
respects with all applicable laws and regulations, and, to the extent
consistent therewith, use all reasonable efforts to preserve intact
their current business organizations , (II) except as may be required
by law or any plan, program, contract or arrangement in effect on the
date of Amendment No. 2, during the period from the date of this
Agreement to the Effective Time, JPFI shall not, and shall not permit
any of its subsidiaries to, (A) grant to any current or former
director, officer, any regional vice president or president of any
division of JPFI or its subsidiaries any increase in compensation,
bonus or other benefits, except as required by employment agreements
in effect as of June 29, 1996; (B) grant to any such current or former
director, officer, any regional vice president or president of any
division any increase in severance or termination pay, or (C) enter
into, or amend, any employment, deferred compensation, consulting,
severance, termination or indemnification agreement with any such
current or former director, officer or any regional vice president or
president of any division, or (III) except as may be required by law
or any plan, program, contract or arrangement in effect on the date of
Amendment No. 2, during the period from the date of Amendment No. 2 to
the Effective Time, JPFI shall not, and shall not permit any of its
subsidiaries to adopt or amend, and to JPFI's knowledge since October
8, 1997, JPFI has not and has not permitted any of its subsidiaries
to, adopt or amend, any collective bargaining agreement (other than
renegotiations required by any such collective bargaining agreement),
employment agreement, consulting agreement, severance agreement or any
bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former employee, officer or
director of JPFI or any of its wholly-owned subsidiaries
(collectively, the "JPFI Benefit Plans"), in any manner which would,
individually, or in the aggregate, involve amounts in excess of
$1,000,000. Anything in this Section 4.1(b) to the contrary
notwithstanding, JPFI and any JPFI subsidiary shall not be deemed in
violation of this Section 4.1(b) if such violation is cured prior to
the Effective Time. Without limiting the generality of the foregoing
(but subject to the above exceptions), during the period from the date
of this Agreement to the Effective Time, JPFI shall not, and shall not
permit any of its subsidiaries to:"
(b) Existing Section 4.1(b)(vi) of the Merger Agreement is hereby
deleted in its entirety and replaced with the following:
"make any tax election that individually or in the aggregate
would have a material adverse effect on JPFI or any of its tax
attributes or settle or compromise any material income tax liability"
7. Amendment of Section 5.7.
------------------------
(a) Section 5.7(a) of the Merger Agreement is hereby amended to add
at the end of the penultimate sentence the following:
"The certificate of incorporation and bylaws of the Surviving
Corporation shall contain the provisions (and the Surviving
Corporation's Certification of Incorporation and by-laws may be
amended to incorporate such provisions) with respect to
indemnification that are set forth in the certificate of incorporation
and
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bylaws of RSI (in each case in effect as of June 30, 1997 and as
provided to JPFI prior to such date), which provisions shall not be
amended, repealed or otherwise modified, except as required by law,
for a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at (or
at any time prior to) the Effective Time were directors or officers of
RSI or its subsidiaries (or any of its predecessors).
(b) Section 5.7(b) of the Merger Agreement is hereby amended and
restated in its entirety as follows:
"(b) In the event that JPFI, the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, proper provision
will be made so that the successors and assigns of JPFI or the
Surviving Corporation (as the case may be) assume the obligations set
forth in this Section 5.7."
(c) The Merger Agreement is hereby amended by the addition of
the following new Section 5.7(e):
"(e) Without limiting the generality of the foregoing, the
provisions of this Section 5.7 shall apply to any litigation,
action, suit, claim, investigation or proceeding described in
Item 11 to Schedule II to Amendment No. 2."
8. Amendment of Section 5.18. Section 5.18 of the Merger
Agreement is hereby amended to add at the end thereof the following:
"Notwithstanding the foregoing, each of RSI and JPFI agrees
that taking into account the modification of the Exchange Ratio,
substantial authority exists as of the date of Amendment No. 2
that, as of the Effective Time, the position set forth in this
Section 5.18 shall continue to be applicable. Without the prior
written consent of RSI, JPFI agrees that it shall not, and shall
not permit any of its subsidiaries to, take any action not
required by any binding contract or plan in effect as of the date
of Amendment No. 2 or by applicable law that would prevent the
statement set forth in the preceding sentence from being true and
correct as of the Effective Time, including without limitation,
any action with respect to the issuance of shares of its capital
stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, whether or
not permitted by any other provision of this Agreement."
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9. Amendment of Section 6.2(a) of the Merger Agreement.
Section 6.2(a) of the Merger Agreement shall be amended to read in its
entirety as follows:
"(a) Representations and Warranties. The representations
and warranties of RSI set forth herein shall be true and correct
both when made, and at and as of the Closing Date, as if made at
and as of such time (except (i) to the extent expressly made as
of an earlier date, in which case such representations and
warranties shall be true and correct as of such date, and (ii)
for the representations and warranties set forth in Sections
3.1(f) and 3.1(g)(i), in which case such representations and
warranties shall be true and correct as of the date of Amendment
No. 2) except where the failure of such representations and
warranties to be so true and correct (without giving effect to
any limitation to "materiality" or "material adverse effect" set
forth therein) does not have, and is not likely to have,
individually or in the aggregate, a material adverse effect on
RSI.
10. Amendment of Section 6.2(b) of Merger Agreement. Section
6.2(b) of the Merger Agreement is hereby amended by deleting the period at
the end thereof and by substituting therefor the following:
"; provided, however, that the obligations of RSI set forth
in Clauses (II) and (III) of Section 4.1(a) shall have been
performed in all respects, without reference to any limitation on
such RSI obligations in respect of "materiality" or "material
adverse effect."
11. Amendment of Section 6.3(a) of the Merger Agreement.
Section 6.3(a) of the Merger Agreement shall be amended to read in its
entirety as follows:
"(a) Representations and Warranties. The representations
and warranties of JPFI set forth herein shall be true and correct
both when made, and at and as of the Closing Date, as if made at
and as of such time (except (i) to the extent expressly made as
of an earlier date, in which case such representations and
warranties shall be true and correct as of such date, and (ii)
for the representations and warranties set forth in Sections
3.2(f) and 3.2(g)(i), in which case such representations and
warranties shall be true and correct as of the date of Amendment
No. 2) except where the failure of such representations and
warranties to be so true and correct (without giving effect to
any limitation to "materiality" or "material adverse effect" set
forth therein) does not have, and is not likely to have,
individually or in the aggregate, a material adverse effect on
JPFI.
12. Amendment of Section 6.2(c) of Merger Agreement. Section
6.2(c) of the Merger Agreement and any cross references thereto are hereby
deleted in their entirety.
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13. Amendment of Section 6.3(b) of Merger Agreement. Section
6.3(b) of the Merger Agreement is hereby amended by deleting the period at
the end thereof and by substituting therefor the following:
"; provided, however, that the obligations of JPFI set forth
in Clauses (II) and (III) of Section 4.1(b) shall have been
performed in all respects, without reference to any limitation on
such JPFI obligations in respect of "materiality" or "material
adverse effect."
14. Amendment of Section 6.3(c) of the Merger Agreement.
Section 6.3(c) of the Merger Agreement and any cross references thereto are
hereby deleted in their entirety.
15. Amendment of Section 7.1(c) of Merger Agreement. Section
7.1(c) of the Merger Agreement is hereby amended by inserting the following
between the phrases "agreements contained in this Agreement," and "which
breach or failure to perform":
"or if RSI shall have breached or failed to perform in any
respect its covenants and agreements set forth in Clause (II) or
Clause (III) of the first paragraph of Section 4.1(a),"
16. Amendment of Section 7.1(d) of Merger Agreement. Section
7.1(d) of the Merger Agreement is hereby amended by inserting the following
between the phrases "agreements contained in this Agreement," and "which
breach or failure to perform":
"or if JPFI shall have breached or failed to perform in any
respect its covenants and agreements set forth in Clause (II) or
Clause (III) of the first paragraph of Section 4.1(b),"
17. Amendment of Section 8.3. (a) Section 8.3(b) of the Merger
Agreement is hereby amended by adding the following to the end thereof:
"provided, however, that no change, effect, event,
occurrence or state of facts relating to, or arising or resulting
from, any of the following matters, regardless of the amounts
involved shall constitute a "material adverse change" or
"material adverse effect": (i) any actions taken or omitted to
be taken with the prior written approval of JPFI in anticipation
or reliance upon the consummation of the Merger or the
transactions contemplated thereby, (ii) any failure by RSI or its
subsidiaries to keep available the services of their current
officers or other employees, or to preserve any relationships
with those persons having business dealings with them; or (iii)
any of the matters disclosed in the RSI Disclosure Schedule, in
any RSI Filed SEC Document, in any RSI Press Release, or
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<PAGE>
otherwise disclosed to an executive officer of JPFI in writing by
RSI prior to the date of Amendment No. 2."
(b) Section 8.3 of the Merger Agreement is hereby amended to add
the following new Sections 8.3(f), (g), (h), (i) and (j):
"(f) "Securities Act" means the Securities Act of 1933, as
amended."
"(g) "RSI SEC Documents" means all required reports,
schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) filed
with the SEC by RSI since June 28, 1997, and the Form S-4 as
filed prior to the date of Amendment No. 2."
"(h) "JPFI SEC Documents" means all required reports,
schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) filed
with the SEC by JPFI since June 28, 1997 and the Form S-4 as
filed prior to the date of Amendment No. 2."
"(i) "To RSI's knowledge" shall mean the actual knowledge,
without any inquiry or investigation whatsoever, of Mark Van
Stekelenburg, RSI's Chairman, CEO and President, Robert J. Harter
Jr., RSI's Senior Vice President and General Counsel, Richard J.
Martin, RSI's Executive Vice President and Chief Financial
Officer, and Christopher Mellon, RSI's Vice President and
Controller. "To JPFI's knowledge" shall mean the actual
knowledge, without any inquiry or investigation whatsoever, of
Jim Miller, JPFI's Chairman of the Board, President and CEO,
David Abramson, JPFI's Senior Vice President and General
Counsel, Lewis Hay, III, JPFI's Senior Vice President and Chief
Financial Officer and George T. Megas, JPFI's Vice President-
Finance."
"(j) "Form S-4" means the registration statement on Form
S-4 to be filed with the SEC by JPFI in connection with the
issuance of JPFI Common Stock in the Merger."
18. Deemed Disclosure.
(a) The parties hereto agree that the matters set forth on the
Schedules to this Amendment (i) shall be, and hereby are, deemed to
have been disclosed in such sections of the RSI Disclosure Schedule
with respect to which such matters are relevant, in each case as of
the date of the Merger Agreement, and accordingly such disclosures
shall be, and hereby are, deemed to modify the representations and
warranties of RSI in the Merger Agreement as of such date; (ii) shall
not be
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asserted by JPFI as a breach of the Merger Agreement; and (iii) shall
not be asserted by JPFI as the cause of a failure to be satisfied any
condition set forth in the Merger Agreement.
(b) Section 4.1 of the RSI Disclosure Schedule shall be amended
by adding Schedule I hereto thereto. Section 4.1 of the JPFI
Disclosure Schedule shall be amended by adding Schedule V hereto
thereto.
(c) The introduction to the JPFI and RSI Disclosure Schedules
shall be amended by adding the following sentence:
"All information set forth in the agreements, documents and
instruments referred to herein shall be deemed disclosed in the
following schedules as fully and completely as if set forth
herein. Any information disclosed in any of the following
schedules shall be deemed disclosed and incorporated into any
other schedule to the Merger Agreement where such disclosure
would be relevant."
19. Filings. As soon as practicable following the date of this
Amendment, RSI and JPFI shall prepare and file with the SEC an amendment to
the Joint Proxy Statement, and JPFI shall prepare and file with the SEC an
amendment to the Form S-4, in which the Joint Proxy Statement will be
included. The parties will use their best efforts to make such filings
within 10 days of the date of this Amendment. Each of RSI and JPFI shall
use best efforts to have the Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing.
20. Release. (a) Each of JPFI and Merger Sub hereby waives,
and releases and discharges RSI, and its stockholders, affiliates,
successors, assigns, officers, directors, agents, representatives and
employees (collectively "Representatives") of RSI from, any claim for
damages (whether for loss of benefit of the bargain, costs or expenses or
otherwise), other claims, liabilities, damages and causes of action, in
each case to the extent related to or based on (i) any breach or alleged
breach of the Merger Agreement prior to the date of this Amendment, or (ii)
this Amendment, the subject matter thereof or any matter set forth on the
Schedules to this Agreement. This paragraph does not limit JPFI's or
Merger Sub's right to terminate the Merger Agreement in accordance with its
terms as amended hereby based on any such breach or alleged breach.
(b) RSI and its affiliates hereby waive, and release and
discharge JPFI, Merger Sub and the Representatives of each of them from,
any claim for damages (whether for loss of benefit of the bargain, costs or
expenses or otherwise), other claims, liabilities, damages and causes of
action, in each case to the extent related to or based on (i) any breach or
alleged breach of the Merger Agreement prior to the date of this Amendment,
or (ii) this Amendment, the subject matter thereof or any matter set forth
on the Schedules to this Agreement. This paragraph does not limit RSI's
right to terminate the Merger Agreement in accordance with its terms as
amended hereby based on any such breach or alleged breach.
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21. Disclaimer of Projections. Each of RSI and JPFI
acknowledges that any financial projections that may have been or are
hereafter delivered to the other party (the "Financial Projections")
reflect a number of estimates and highly subjective assumptions and
judgments concerning anticipated results of operations. These assumptions
and judgments may or may not prove to be correct and there can be no
assurance that any projected results are attainable or will be realized.
Each of JPFI and RSI expressly disclaims any representation or warranty,
express or implied, as to the accuracy or completeness of the Financial
Projections and each of RSI and JPFI acknowledges that it has not relied
and will not rely on the Financial Projections, in connection with its
evaluation of the transactions contemplated by the Merger Agreement and
shall have no right to terminate this Agreement or to not consummate the
Merger on the basis of RSI's or JPFI's failure to achieve any Financial
Projections.
22. Authority.
(a) RSI has all requisite corporate power and authority to enter
into this Amendment. The execution and delivery of this Amendment and
the consummation by RSI of the transactions contemplated hereby has
been duly authorized by all necessary corporate action on the part of
RSI, including without limitation the due approval of this Amendment
by the Board of Directors of RSI (for the purposes contemplated by
Section 3.1(h) of the Agreement and otherwise) and a majority of the
ML Directors. This Amendment has been duly executed and delivered by
RSI and, assuming the due authorization, execution and delivery
thereof by each of JPFI and Merger Sub, constitutes the legal, valid
and binding obligation of RSI, enforceable against RSI in accordance
with its terms.
(b) Each of JPFI and Merger Sub has all requisite corporate
power and authority to enter into this Amendment. The execution and
delivery of this Amendment and the consummation by each of JPFI and
Merger Sub of the transactions contemplated hereby has been duly
authorized by all necessary corporate action on the part of each of
JPFI and Merger Sub, including without limitation the due approval of
this Amendment by the Board of Directors of JPFI (for the purposes
contemplated by Section 3.2(h) of the Agreement and otherwise). This
Amendment has been duly executed and delivered by each of JPFI and
Merger Sub, and assuming due authorization, execution and delivery
thereof by RSI, constitutes the legal, valid and binding obligation of
each of JPFI and Merger Sub, enforceable against each of JPFI and
Merger Sub in accordance with its terms.
23. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of
conflict of laws thereof.
24. Counterparts. This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall
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become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
25. Merger Agreement Confirmed. Except as amended hereby, the
Merger Agreement is ratified and confirmed in all respects. All
representations, warranties, covenants or agreements of the parties set
forth in the Merger Agreement, as amended hereby, shall be deemed to have
been made June 30, 1997 and as of the date hereof, except as otherwise
expressly provided therein or herein, and RSI and JPFI hereby waive any
right to terminate, or not consummate the transactions contemplated by, the
Merger Agreement according to its original terms and agree that any such
rights shall arise only out of the provisions of the Merger Agreement as
amended hereby.
26. Notice of Breaches. JPFI and RSI shall give prompt written
notice to the other party to the extent it has knowledge of breach by it or
such other party of the covenants and agreements set forth in Section
4.1(a) or 4.1(b).
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, JPFI, RSI and Merger Sub have caused this
Amendment to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
JP FOODSERVICE, INC.
By: /s/ James L. Miller
-----------------------------------------
Name: James L. Miller
Title: Chairman, President and Chief
Executive Officer
RYKOFF-SEXTON, INC.
By: /s/ Mark Van Stekelenburg
-----------------------------------------
Name: Mark Van Stekelenburg
Title: Chairman, President and Chief
Executive Officer
HUDSON ACQUISITION CORP.
By: /s/ James L. Miller
-----------------------------------------
Name: James L. Miller
Title: Chairman, President and Chief
Executive Officer
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