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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 23, 1997
JP Foodservice, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-24954 52-1634568
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
9830 Patuxent Woods Drive, Columbia, Maryland 21046
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 312-7100
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective December 23, 1997, Rykoff-Sexton, Inc., a Delaware
corporation ("Rykoff-Sexton"), merged (the "Merger") with and into Hudson
Acquisition Corp. ("Merger Sub"), a Delaware corporation and a wholly-owned
subsidiary of JP Foodservice, Inc. (the "Registrant"), pursuant to an Agreement
and Plan of Merger, dated as of June 30, 1997, as amended as of September 3,
1997 and November 5, 1997, among Rykoff-Sexton, Merger Sub and the Registrant
(the "Merger Agreement"). Merger Sub was the surviving corporation in the
Merger (the "Surviving Corporation"), was renamed Rykoff-Sexton, Inc. as of the
effective time of the Merger (the "Effective Time") and will continue to be a
wholly-owned subsidiary of the Registrant. A copy of the press release
announcing the consummation of the Merger is filed as Exhibit 99.1 to this
Current Report on Form 8-K.
At the Effective Time, each issued and outstanding share of Common
Stock, par value $.10 per share, of Rykoff-Sexton (the "Rykoff-Sexton Common
Shares") (other than Rykoff-Sexton Common Shares, if any, owned by the
Registrant, Merger Sub or Rykoff-Sexton, which were canceled) was converted into
the right to receive 0.775 (the "Exchange Ratio") of a share of Common Stock,
par value $.01 per share, of the Registrant (the "JP Foodservice Common
Shares"). No fractional JP Foodservice Common Shares will be issued in
connection with the Merger. In lieu of such fractional shares, a holder of
Rykoff-Sexton Common Shares will receive an amount in cash equal to the
fractional portion of a JP Foodservice Common Share such holder would have
received based on the Exchange Ratio multiplied by the average closing price of
a JP Foodservice Common Share over the ten trading days preceding the fifth
trading day prior to consummation of the Merger. In connection with the Merger,
holders of Rykoff-Sexton Common Shares immediately before the Merger are
expected to receive JP Foodservice Common Shares representing approximately 50%
of the JP Foodservice Common Shares outstanding giving effect to the Merger.
Entities (the "ML Investors") holding Rykoff-Sexton Common Shares immediately
before the Merger who are affiliated with Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an international investment banking and advisory firm, are
expected to receive JP Foodservice Common Shares representing approximately 17%
of the JP Foodservice Common Shares outstanding giving effect to the Merger.
At the Effective Time, the Registrant assumed each option to purchase
Rykoff-Sexton Common Shares outstanding under certain Rykoff-Sexton director and
employee stock plans immediately before the Merger and all warrants to purchase
Rykoff-Sexton Common Shares outstanding immediately before the Merger. In
connection with the Merger, each assumed option and each assumed warrant was
converted into an option or warrant, as the case may be, to purchase, on the
same terms and conditions as were applicable to such options (subject to
adjustment of the applicable exercise prices thereunder based on the Exchange
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Ratio) and warrants, an adjusted number of JP Foodservice Common Shares based on
the Exchange Ratio.
It is intended that the Merger will be accounted for by the Registrant
as a pooling of interests in accordance with generally accepted accounting
principles. The Registrant expects that the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended.
The Registrant's Registration Statement on Form S-4 (Registration No.
333-32711), which was declared effective by the Securities and Exchange
Commission on November 24, 1997 (the "Registration Statement"), sets forth
certain information regarding the Merger, the Registrant and Rykoff-Sexton.
Such information in the Registration Statement includes, but is not limited to,
information regarding the date and manner of the Merger, a description of the
assets involved, the nature and amount of consideration paid by the Registrant
therefor, the method used for determining the amount of such consideration, the
nature of any material relationship between Rykoff-Sexton and the Registrant,
any affiliate, director or officer of the Registrant or any associate of any
such director or officer, the nature of Rykoff-Sexton's business and the
Registrant's intended use of the assets acquired in the Merger.
The information set forth under Item 5 of this Current Report on Form
8-K is incorporated herein by reference.
ITEM 5. OTHER EVENTS.
BOARD OF DIRECTORS. Pursuant to the Merger Agreement, prior to the
Effective Time, the Registrant increased the size of the Registrant's Board of
Directors from nine to 17 directors. Immediately following the Effective Time,
the Registrant's Board of Directors consisted of (i) the nine incumbent members
of the Registrant's Board of Directors immediately prior to the Effective Time
and (ii) the following seven individuals who were serving as members of the
Rykoff-Sexton Board of Directors immediately prior to the Effective Time and who
were designated pursuant to the Merger Agreement: Mark Van Stekelenburg, James
I. Maslon, James P. Miscoll, Neil I. Sell, Bernard Sweet, Matthias B. Bowman and
Albert J. Fitzgibbons, III. Pursuant to the Merger Agreement, Messrs. Bowman
and Fitzgibbons were designated by Merrill Lynch Capital Partners, Inc., the
general partner of certain of the ML Investors. Pursuant to the Merger
Agreement, a 17th director may be designated by the Chairman of the Board of the
Registrant after the Merger. No such designation had been made as of the date
of this Current Report on Form 8-K.
Pursuant to the Merger Agreement, the Registrant increased from three
to six directors the size of the classes of the Registrant's Board of Directors
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with directors whose terms expire in 1998 (the "1998 class") and 1999 (the "1999
class") and increased from three to five directors the size of the class with
directors whose terms expire in the year 2000 (the "2000 class"). Effective
immediately following the Effective Time, Messrs. Van Stekelenburg, Maslon and
Sell were appointed to the 1998 class, Messrs. Sweet, Miscoll and Fitzgibbons
were appointed to the 1999 class and Mr. Bowman was appointed to the 2000 class.
AMENDMENT OF BY-LAWS. Pursuant to the Merger Agreement, the
Registrant amended its By-laws. A copy of the Registrant's Amended and Restated
By-laws, as so amended, is filed as Exhibit 3.1 to this Current Report on Form
8-K.
AMENDMENT OF RIGHTS AGREEMENT. Pursuant to the Merger Agreement, as
of the Effective Time, the Registrant amended the Rights Agreement, dated as of
February 19, 1996, as amended, between the Registrant and The Bank of New York,
as Rights Agent. A copy of such amendment is filed as Exhibit 10.1 to this
Current Report on Form 8-K.
REGISTRATION RIGHTS AGREEMENT. In connection with the Merger, as of
the Effective Time, the Registrant assumed the rights and obligations of Rykoff-
Sexton under a registration rights agreement with the ML Investors and other
former stockholders of Rykoff-Sexton named therein. Under the registration
rights agreement, as so amended, the ML Investors have certain "demand" rights
and the ML Investors and such other former stockholders of Rykoff-Sexton have
certain "piggyback" rights requiring the Registrant, subject to specified
limitations and qualifications, to register the transfer under the Securities
Act of 1933 of all or a portion of the JP Foodservice Common Shares issued to
them in the Merger in exchange for Rykoff-Sexton Common Shares entitled to
registration rights prior to the Effective Time.
INDENTURE. In connection with the Merger, the Surviving Corporation
succeeded to the rights and obligations of Rykoff-Sexton under the indenture
(the "Indenture") pursuant to which approximately $130 million principal amount
of Rykoff-Sexton's 8 7/8% Senior Subordinated Notes due 2003 (the "Rykoff-Sexton
Public Notes") were outstanding as of December 27, 1997. Pursuant to the
Indenture, within 30 business days after the Merger is consummated, the
Surviving Corporation will be required to make an offer to purchase the Rykoff-
Sexton Public Notes at a purchase price equal to 101% of their principal
amount, plus accrued interest from the most recent preceding semi-annual
interest payment date to the redemption date.
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NEW CREDIT FACILITY. In connection with the Merger, immediately
following the Effective Time, the Registrant, through its subsidiaries, entered
into a new revolving credit facility and a new 364-day revolver/term loan
facility (collectively, the "New Credit Facility") with a syndicate of banks
which will provide the Registrant with funding of up to $750 million. The
Registrant has applied a portion of such funds to refinance indebtedness of the
Registrant and Rykoff-Sexton outstanding at the Effective Time under their
former senior bank credit facilities and has applied and will apply a portion of
such funds to repay all amounts outstanding under the Registrant's 8.55% Senior
Notes due 2004. The Registrant will use other borrowings under the New Credit
Facility to pay fees and expenses incurred in connection with the Merger and to
finance capital expenditures and on-going capital needs.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The financial
statements required by this Item 7(a) will be filed by amendment to this Current
Report on Form 8-K.
(b) PRO FORMA FINANCIAL INFORMATION. The following pro forma
combining consolidated financial statements of the Registrant giving effect to
the Merger under the pooling of interests method of accounting are incorporated
herein by reference from the Registration Statement:
Unaudited Pro Forma Combining Consolidated Balance Sheet as of
September 27, 1997.
Unaudited Pro Forma Combining Consolidated Statements of
Operations for the Fiscal Year ended July 1, 1995.
Unaudited Pro Forma Combining Consolidated Statements of
Operations for the Fiscal Year ended June 29, 1996.
Unaudited Pro Forma Combining Consolidated Statements of
Operations for the Fiscal Year ended June 28, 1997.
Unaudited Pro Forma Combining Consolidated Statements of
Operations for the Three Months ended September 28, 1996.
Unaudited Pro Forma Combining Consolidated Statements of
Operations for the Three Months ended September 27, 1997.
Notes to Unaudited Pro Forma Combining Consolidated Financial
Statements.
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(c) EXHIBITS (LISTED ACCORDING TO THE NUMBER ASSIGNED IN ITEM 601 OF
REGULATION S-K UNDER THE SECURITIES ACT OF 1933):
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of June 30, 1997, among
JP Foodservice, Inc. (the "Company"), Hudson Acquisition Corp.
and Rykoff-Sexton, Inc. (incorporated by reference to Exhibit
2.1 to the Company's Current Report on Form 8-K dated June 30,
1997 and filed with the Securities and Exchange Commission on
July 2, 1997).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of
September 3, 1997, among the Company, Hudson Acquisition Corp.
and Rykoff-Sexton, Inc. (incorporated by reference to Exhibit
2.2 to the Company's Current Report on Form 8-K dated
September 3, 1997 and filed with the Securities and Exchange
Commission on September 9, 1997).
2.3 Amendment No. 2 to Agreement and Plan of Merger, dated as of
November 5, 1997, among the Company, Hudson Acquisition Corp.
and Rykoff-Sexton, Inc. (incorporated by reference to Exhibit
2.3 to the Company's Current Report on Form 8-K dated November
5, 1997 and filed with the Securities and Exchange Commission on
November 7, 1997).
3.1 Amended and Restated By-Laws of the Company.
10.1 Amendment No. 4 to Rights Agreement, dated as of December 23,
1997, between the Company and The Bank of New York, as Rights
Agent.
99.1 Press Release dated December 23, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JP FOODSERVICE, INC.
By: /s/ Lewis Hay, III
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Lewis Hay, III
Executive Vice President and
Chief Financial Officer
Date: January 7, 1998
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EXHIBIT 3.1
AMENDED AND RESTATED
BY-LAWS
OF
JP FOODSERVICE, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation in the State of Delaware is 1013 Centre Road, in the City of
Wilmington, Delaware 19805, in the County of New Castle. The name of its
registered agent at such address is Corporation Service Company.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 1. Places of Meetings. All meetings of stockholders shall be
held at such place or places in or outside of the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of meeting or waiver of notice thereof, subject to any provisions of the laws of
the State of Delaware.
Section 2. Annual Meetings. Unless otherwise determined from time to
time by the Board of Directors, the annual meeting of stockholders shall be held
each year for the election of directors and the transaction of such other
business as may properly come before the meeting at such date and time as may be
designated by the Board of Directors. Written notice of the time and place of
the annual meeting shall be given by mail to each stockholder entitled to vote
at such meeting, at the stockholder's address as it appears on the records of
the Corporation, not less than ten (10) nor more than sixty (60) days prior to
the scheduled date thereof.
Section 3. Special Meetings. A special meeting of the stockholders
of the Corporation may be called at any time by the Chairman of the Board or by
the Board of Directors pursuant to a resolution adopted by a majority of the
total number of directors which the Corporation would have if there were no
vacancies. Written notice of the date, time, place and specific purpose or
purposes for which such meeting is called shall be given by mail to each
stockholder entitled to vote thereat at such stockholder's address as it appears
on the records of the Corporation not less than (10) nor more than sixty (60)
days prior to the scheduled date thereof.
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Business transacted at any special meeting of stockholders shall be limited to
the purposes stated in the notice.
Section 4. Voting. At all meetings of stockholders, each stockholder
entitled to vote on the record date as determined under these By-Laws or, if not
so determined, as prescribed under the laws of the State of Delaware, shall be
entitled to one vote for each share of stock standing on record in such
stockholder's name, subject to any restrictions or qualifications set forth in
the Restated Certificate of Incorporation of the Corporation or any amendment
thereto (the "Restated Certificate of Incorporation").
Section 5. Quorum; Voting. At any stockholders meeting, a majority
of the number of shares of stock outstanding and entitled to vote thereat,
present in person or by proxy, shall constitute a quorum, but a smaller interest
may adjourn any meeting from time to time, and the meeting may be held as
adjourned without further notice, subject to such limitations as may be imposed
under the laws of the State of Delaware. When a quorum is present at any
meeting, the affirmative vote of the holders of a majority of the number of
shares of stock entitled to vote thereon, present in person or by proxy, shall
decide any question brought before such meeting unless such question is one upon
which a different vote is required by express provision of the Restated
Certificate of Incorporation, these By-Laws, the rules or regulations of the New
York Stock Exchange, Inc. or any law or other rule or regulation applicable to
the Corporation, in which case such express provision shall govern.
Section 6. Inspectors of Election; Opening and Closing the Polls.
The Board of Directors may, by resolution, appoint one or more inspectors, which
inspector or inspectors may include individuals who serve the Corporation in
other capacities, including, without limitation, as officers, employees, agents
or representatives of the Corporation, to act at a meeting of stockholders and
make a written report thereof. One or more persons may be designated as
alternative inspectors to replace any inspector who fails to act. If no
inspector or alternate has been appointed to act, or if all inspectors or
alternates who have been appointed are unable to act at a meeting of
stockholders, the chairman of the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by the General Corporation Law of
the State of Delaware.
The chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at the meeting.
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Section 7. List of Stockholders. At least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address and the
number of shares registered in the name of each stockholder, shall be prepared
by the secretary or the transfer agent in charge of the stock ledger of the
Corporation. Such list shall be open for examination by any stockholder as
required by the laws of the State of Delaware. The stock ledger shall be the
only evidence as to who are the stockholders entitled to examine such list or
the books of the Corporation or to vote in person or by proxy at such meeting.
Section 8. Written Consent in Lieu of Meeting. Except as otherwise
provided for or fixed pursuant to the provisions of the Restated Certificate of
Incorporation relating to the rights of the holders of any series of preferred
stock, no action that is required or permitted to be taken by the stockholders
of the Corporation at any annual or special meeting of stockholders may be
effected by written consent of stockholders in lieu of a meeting of
stockholders.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Number and Qualification. The authorized number of
directors that shall constitute the full Board of Directors of the Corporation
shall be fixed from time to time by resolution of the Board of Directors. The
Board of Directors, other than those directors elected by the holders of any
series of preferred stock, shall be divided into three classes, as nearly equal
in number as the then-authorized number of directors constituting the Board
permits, with the term of office of one class expiring each year and with each
director serving for a term ending at the third annual meeting of stockholders
of the Corporation following the annual meeting at which such director was
elected. One class of directors shall be initially elected for a term expiring
at the annual meeting of stockholders to be held in 1995, another class shall be
initially elected for a term expiring at the annual meeting of stockholders to
be held in 1996, and another class shall be initially elected for a term
expiring at the annual meeting of stockholders to be held in 1997. Members of
each class shall hold office until their successors are elected and qualified.
At each succeeding annual meeting of the stockholders of the Corporation, the
successors of the class of directors whose term expires at that meeting shall be
elected by a plurality vote of all votes cast at such meeting to hold office for
a term expiring at the annual meeting of stockholders held in the third year
following the year of their election. Directors need not be stockholders of the
Corporation. Notwithstanding any other provision of these By-Laws, (i) no
person who has attained 70 years of age may be elected to the Board, other than
pursuant to the Agreement and Plan of Merger dated as of June 30, 1997 among the
Corporation, Hudson Acquisition Corp. and Rykoff-Sexton, Inc., and (ii) any
director who attains 70 years of age after such director's election to the Board
may serve for the entire term of the class of the Board to which such director
was elected. The
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requirements of the preceding sentence shall not apply to any director of the
Corporation elected to the Board prior to June 29, 1997.
Section 2. Powers. The business and affairs of the Corporation shall
be carried on by or under the direction of the Board of Directors, which shall
have all the powers authorized by the laws of the State of Delaware, subject to
such limitations as may be provided by the Restated Certificate of Incorporation
or these By-Laws. Except as otherwise expressly provided herein or in the
Restated Certificate of Incorporation, the vote of the majority of directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 3. Compensation. The Board of Directors may from time to
time by resolution authorize the payment of fees or other compensation to the
directors for services as such to the Corporation, including, but not limited
to, fees for attendance at all meetings of the Board or of the executive or
other committees, and determine the amount of such fees and compensation.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor in amounts authorized or otherwise approved from time to time by the
Board.
Section 4. Meetings and Quorum. Meetings of the Board of Directors
may be held either in or outside of the State of Delaware. At all meetings of
the Board, a majority of the then authorized number of directors shall
constitute a quorum. If a quorum shall not be present at any meeting of the
Board of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.
The first meeting of the Board of Directors after the election of a
new class of directors shall be held immediately after the annual meeting of
stockholders and at the same place, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event such meeting is not
held at such time and place, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, or as shall be specified in a written waiver
signed by all the directors.
Regular meetings of the Board of Directors may be held without notice
at such time and at such place as shall from time to time be determined by the
Board. Notice of special meetings shall be given to each director on one (1)
day's notice to each director, either personally, by mail, telegram, facsimile,
personal delivery or similar means. Special meetings may be called by the
president or the Chairman of the Board of Directors and shall be called by the
president or secretary in the manner and on the notice set forth above upon the
written request of a
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majority of the total number of directors which the Corporation would have if
there were no vacancies.
Notice of any meeting shall state the time and place of such meeting,
but need not state the purposes thereof unless otherwise required by the laws of
the State of Delaware, the Restated Certificate of Incorporation, these By-Laws
or the Board of Directors.
Section 5. Executive Committee. The Board of Directors may, by
resolution adopted by a majority of the total number of directors which the
Corporation would have if there were no vacancies, designate an Executive
Committee to exercise, subject to applicable provisions of law, all the powers
of the Board in the management of the business and affairs of the Corporation
when the Board is not in session, including without limitation the power to
declare dividends and to authorize the issuance of the Corporation's capital
stock, and may, by resolution similarly adopted, designate one or more other
committees, including such committees specified in Section 6 of this Article
III. The Executive Committee shall consist of two or more directors of the
Corporation. The Board may designate one or more directors as alternate members
of the Executive Committee, who may replace any absent member at any meeting of
the Executive Committee. The members of the Executive Committee present at any
meeting, whether or not constituting a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent
member. The Executive Committee shall keep written minutes of its proceedings
and shall report such proceedings to the Board when required.
A majority of the Executive Committee may determine its action and fix
the time and place of its meetings, unless the Board shall otherwise provide.
Notice of such meetings shall be given to each member of the Executive Committee
in the manner provided for in Section 4 of this Article III. The Board shall
have power at any time to fill vacancies in, to change the membership of, or to
dissolve the Executive Committee.
Section 6. Other Committees.
(a) The Board shall appoint the following standing committees, the
members of which shall serve at the pleasure of the Board: a Nominating
Committee, a Compensation Committee and an Audit Committee. The Board may
appoint such other committees among the directors of the Corporation as it deems
necessary and appropriate for the proper conduct of the Corporation's business
and may appoint such officers, agents or employees of the Corporation to assist
the committees of the Board as it deems necessary and appropriate. Meetings of
committees may be called by the chairman of the committee on one (1) day's
notice to each committee member, either personally, by mail, telegram, facsimile
or similar means and shall be called by the chairman of the committee in like
manner
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and on like notice on the written request of a committee member. Each committee
shall keep regular minutes of its meetings and report the same to the Board of
Directors when required.
(b) One or more directors of the Corporation shall be appointed to act
as a Nominating Committee. The Nominating Committee shall be responsible for
proposing to the Board nominees for election as directors and shall possess and
may exercise such additional powers and authority as may be delegated to it by
the Board from time to time. The Nominating Committee shall report its actions
to the Board at the next meeting of the Board following such actions. Vacancies
in the membership of the Nominating Committee shall be filled by the Board of
Directors.
(c) One or more directors of the Corporation shall be appointed to act
as a Compensation Committee, each of whom shall be directors who are not also
officers or employees of the Corporation or its subsidiaries or any other
individual having a relationship which, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director (each such director, an "Unaffiliated
Director"). The Compensation Committee shall be responsible for establishing
salaries, bonuses and other compensation for the executive officers of the
Corporation and for administering the Corporation's benefit plans, and shall
possess and may exercise such additional powers and authority as may be
delegated to it by the Board from time to time. The Compensation Committee
shall report its actions to the Board at the next meeting of the Board following
such actions. Vacancies in the membership of the Compensation Committee shall
be filled by the Board of Directors.
(d) One or more Unaffiliated Directors of the Corporation shall be
appointed to act as an Audit Committee. The Audit Committee shall have general
oversight responsibility with respect to the Corporation's financial reporting.
In performing its oversight responsibility, the Committee shall make
recommendations to the Board of Directors as to the selection, retention, or
change in the independent accountants of the Corporation, review with the
independent accountants the scope of their examination and other matters
(relating to both audit and non-audit activities), and review generally the
internal auditing procedures of the Corporation. In undertaking the foregoing
responsibilities, the Audit Committee shall have unrestricted access, if
necessary, to personnel of the Corporation and documents and shall be provided
with the resources and assistance necessary to discharge its responsibilities,
including periodic reports from management assessing the impact of regulation,
accounting, and reporting of other significant matters that may affect the
Corporation. The Audit Committee shall review the financial reporting and
adequacy of internal controls of the Corporation, consult with the internal
auditors and certified public accountants, and from time to time, but not less
than annually, report to the Board. Vacancies in the membership of the Audit
Committee shall be filled by the Board of Directors.
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Section 7. Conference Telephone Meetings. Any one or more members of
the Board of Directors or any committee thereof may participate in meetings by
means of a conference telephone or similar communications equipment and such
participation in a meeting shall constitute presence in person at the meeting.
Section 8. Action Without Meetings. Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting to the extent and in the manner authorized by the
laws of the State of Delaware.
Section 9. Transactions With Affiliates. No transaction, agreement
or understanding between the Corporation (or any of its subsidiaries) and any
affiliate of the Corporation that, along with its affiliates and associates,
beneficially owns 10% or more of the outstanding common stock of the Corporation
shall be valid and effective unless such transaction, agreement or understanding
shall have been approved or adopted or authorized, as the case may be, by the
Board of Directors or the Executive Committee.
ARTICLE IV
OFFICERS
Section 1. Titles and Election. The officers of the Corporation
shall be the president, a secretary and a treasurer, who shall initially be
elected as soon as convenient by the Board of Directors and thereafter, in the
absence of earlier resignations or removals, shall be elected at the first
meeting of the Board following the annual meeting of stockholders. Each officer
shall hold office at the pleasure of the Board except as may otherwise be
approved by the Board, or until such officer's earlier resignation, removal
under these By-Laws or other termination of employment. Any person may hold
more than one office if the duties can be consistently performed by the same
person, to the extent permitted by the laws of the State of Delaware.
The Board of Directors, in its discretion, may also at any time elect
or appoint a Chairman of the Board of Directors, who shall be a director, a Vice
Chairman of the Board, who shall be a director, and one or more vice presidents,
assistant secretaries and assistant treasurers and such other officers as it may
deem advisable, each of whom shall hold office at the pleasure of the Board,
except as may otherwise be approved by the Board, or until such officer's
earlier resignation, removal or other termination of employment, and shall have
such authority and shall perform such duties as shall be prescribed or
determined from time to time by the Board or, in case of officers other than the
Chairman of the Board or the Vice Chairman of the Board, if not so prescribed or
determined by the Board, as the chief executive officer or the then senior
executive officer may prescribe or determine. The Board of Directors may
require any officer or other
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employee or agent to give bond for the faithful performance of duties in such
form and with such sureties as the Board may require.
Section 2. Duties. Subject to such extension, limitations, and other
provisions as the Board of Directors or these By-Laws may from time to time
prescribe or determine, the following officers shall have the following powers
and duties:
(a) Chairman, Vice Chairman and Chief Executive Officer. The Chairman
of the Board, when present, shall preside at all meetings of the stockholders
and of the Board of Directors and shall be charged with general supervision of
the management and policy of the Corporation, and shall have such other powers
and perform such other duties as the Board of Directors may prescribe from time
to time. The Chairman of the Board shall be the chief executive officer of the
Corporation, shall exercise the powers and authority and perform all of the
duties commonly incident to such office and shall perform such other duties as
chief executive officer as the Board of Directors shall specify from time to
time. The Vice Chairman of the Board of Directors shall, during the absence at
a meeting of stockholders of the Corporation or of the Board, or disability, of
the Chairman of the Board, have the powers and perform the duties of the
Chairman of the Board and shall also perform such other duties and may exercise
such other powers as from time to time may be assigned to him by the Board.
(b) President. The president shall act in a general executive
capacity, shall report to the Chairman of the Board and chief executive officer
and shall assist the Chairman of the Board in the administration and operation
of the Corporation's business and general supervision of its policies and
affairs. The president shall, in the absence at a meeting of stockholders of
the Corporation or of the Board, or because of the inability to act, of the
Chairman of the Board and the Vice Chairman of the Board, perform all duties of
the Chairman of the Board and preside at all meetings of the stockholders and of
the Board of Directors, if he is a director.
(c) Vice President. The vice president or vice presidents shall
perform such duties as may be assigned to them from time to time by the Board of
Directors or by the president if the Board does not do so. In the absence or
disability of the president, the vice presidents in order of seniority may,
unless otherwise determined by the Board, exercise the powers and perform the
duties pertaining to the office of president, except that if one or more senior
vice presidents has been elected or appointed, the person holding such office in
order of seniority shall exercise the powers and perform the duties of the
office of president.
(d) Secretary. The secretary, or in the secretary's absence, an
assistant secretary shall keep the minutes of all meetings of stockholders and
of the Board of Directors, give and serve all notices, attend to such
correspondence as may
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be assigned to such officer, keep in safe custody the seal of the Corporation,
and affix such seal to all such instruments properly executed as may require it,
and shall have such other duties and powers as may be prescribed or determined
from time to time by the Board of Directors or by the president if the Board
does not do so.
(e) Treasurer. The treasurer, subject to the order of the Board of
Directors, shall have the care and custody of the moneys, funds, valuable papers
and documents of the Corporation (other than such officer's own bond, if any,
which shall be in the custody of the president), and shall have, under the
supervision of the Board of Directors, all the powers and duties commonly
incident to such office. The treasurer shall deposit all funds of the
Corporation in such bank or banks, trust company or trust companies, or with
such firm or firms doing a banking business as may be designated by the Board of
Directors or by the president if the Board does not do so. The treasurer may
endorse for deposit or collection all checks, notes and similar instruments
payable to the Corporation or to its order. The treasurer shall keep accurate
books of account of the Corporation's transactions, which shall be the property
of the Corporation and, together with all of the property of the Corporation in
such officer's possession, shall be subject at all times to the inspection and
control of the Board of Directors. The treasurer shall be subject in every way
to the order of the Board of Directors, and shall render to the Board of
Directors and/or the president of the Corporation, whenever they may require it,
an account of all transactions and of the financial condition of the
Corporation. In addition to the foregoing, the treasurer shall have such duties
as may be prescribed or determined from time to time by the Board of Directors
or by the president if the Board does not do so.
(f) Delegation of Authority. The Board of Directors may at any time
delegate the powers and duties of any officer for the time being to any other
officer, director or employee.
(g) Compensation. The compensation of the Chairman of the Board, the
Vice Chairman of the Board and the chief executive officer shall be fixed by the
Board of Directors, and the fact that any officer is a director shall not
preclude such officer from receiving compensation or from voting upon the
resolution providing the same. The compensation of all other officers of the
Corporation shall be fixed by the chief executive officer or, during his absence
or disability, by the Board.
ARTICLE V
RESIGNATIONS AND VACANCIES
Section 1. Resignations. Any director or officer may resign at any
time by giving written notice thereof to the Board of Directors, the president
or the secretary. Any such resignation shall take effect at the time specified
therein or, if
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the time be not specified, upon receipt thereof; and unless otherwise specified
therein, the acceptance of any resignation shall not be necessary to make it
effective.
Section 2. Vacancies.
(a) Directors. Except for the rights of the holders of any series of
preferred stock to elect additional directors, newly created directorships
resulting from any increase in the authorized number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal, or other cause shall be filled only by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or in which the vacancy occurred and until such director's successor is
duly elected and has been qualified. The directors also may reduce the
authorized number of directors by the number of vacancies on the Board, provided
that such reduction does not reduce the Board to less than the minimum
authorized by the laws of the State of Delaware. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
(b) Officers. The Board of Directors may at any time or from time to
time fill any vacancy among the officers of the Corporation.
ARTICLE VI
CAPITAL STOCK
Section 1. Certificate of Stock. Every stockholder shall be entitled
to a certificate or certificates for shares of the capital stock of the
Corporation in such form as may be prescribed or authorized by the Board of
Directors, duly numbered and setting forth the number and kind of shares
represented thereby. Such certificates shall be signed by the Chairman of the
Board, the president or a vice president and by the treasurer or an assistant
treasurer or by the secretary or an assistant secretary. Any or all of such
signatures may be in facsimile if and to the extent authorized under the laws of
the State of Delaware.
In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before the certificate has been issued,
such certificate may nevertheless be issued and delivered by the Corporation
with the same effect as if such person were such officer, transfer agent or
registrar at the date of issue.
Section 2. Transfer of Stock. Shares of the capital stock of the
Corporation shall be transferable only upon the books of the Corporation upon
the surrender of the certificate or certificates properly assigned and endorsed
for
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transfer. If the Corporation has a transfer agent or agents or transfer clerk
and registrar of transfers acting on its behalf, the signature of any officer or
representative thereof may be in facsimile.
The Board of Directors may appoint a transfer agent and one or more
co-transfer agents and a registrar and one or more co-registrars of transfer and
may make or authorize the transfer agents to make all such rules and regulations
deemed expedient concerning the issue, transfer and registration of shares of
stock.
Section 3. Record Dates.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix in advance a record date
which, in the case of a meeting, shall not be less than ten (10) nor more than
sixty (60) days prior to the scheduled date of such meeting and which, in the
case of any other action, shall be not more than the maximum number of days
prior to any such action permitted by the laws of the State of Delaware.
(b) If no such record date is fixed by the Board, the record date
shall be that prescribed by the laws of the State of Delaware.
(c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 4. Lost Certificates. In case of loss or mutilation or
destruction of a stock certificate, a duplicate certificate may be issued upon
such terms as may be determined or authorized by the Board of Directors or by
the president if the Board does not do so.
ARTICLE VII
FISCAL YEAR, BANK DEPOSITS, CHECK, ETC.
Section 1. Fiscal Year. The fiscal year of the Corporation shall
commence or end at such time as the Board of Directors may designate.
Section 2. Bank Deposits, Checks, etc. The funds of the Corporation
shall be deposited in the name of the Corporation or of any division thereof in
such banks or trust companies in the United States or elsewhere as may be
designated from time to time by the Board of Directors, or by such officer or
officers as the Board may authorize to make such designations.
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All checks, drafts or other orders for the withdrawal of funds from
any bank account shall be signed by such person or persons as may be designated
from time to time by the Board of Directors. The signatures on checks, drafts
or other orders for the withdrawal of funds may be in facsimile if authorized in
the designation.
ARTICLE VIII
BOOKS AND RECORDS
Section 1. Place of Keeping Books. Unless otherwise expressly
required by the laws of the State of Delaware, the books and records of the
Corporation may be kept outside of the State of Delaware.
Section 2. Examination of Books. Except as may otherwise be provided
by the laws of the State of Delaware, the Restated Certificate of Incorporation
or these By-Laws, the Board of Directors shall have power to determine from time
to time whether and to what extent and at what times and places and under what
conditions any of the accounts, records and books of the Corporation are to be
open to the inspection of any stockholder. No stockholder shall have any right
to inspect any account or book or document of the Corporation except as
prescribed by statute or authorized by express resolution of the stockholders or
of the Board of Directors.
ARTICLE IX
NOTICES
Section 1. Requirements of Notice. Whenever notice is required to be
given by statute, the Restated Certificate of Incorporation or these By-Laws, it
shall not mean personal notice unless so specified, but such notice may be given
in writing by depositing the same in a post office, letter box, or mail chute
postpaid and addressed to the person to whom such notice is directed at the
address of such person on the records of the Corporation, and such notice shall
be deemed given at the time when the same shall be thus mailed.
Section 2. Waivers. Any stockholder, director or officer may, in
writing or by telegram or cable, at any time waive any notice or other formality
required by statute, the Restated Certificate of Incorporation or these By-Laws.
Such waiver of notice, whether given before or after any meeting or action,
shall be deemed equivalent to notice. Presence of a stockholder either in
person or by proxy at any stockholders meeting and presence of any director at
any meeting of the Board of Directors shall constitute a waiver of such notice
as may be required by any statute, the Restated Certificate of Incorporation or
these By-Laws.
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ARTICLE X
SEAL
The corporate seal of the Corporation shall consist of two concentric
circles between which shall be the name of the Corporation and the date of its
incorporation, and in the center of which shall be inscribed "Corporate Seal,
Delaware."
ARTICLE XI
POWERS OF ATTORNEY
The Board of Directors may authorize one or more of the officers of
the Corporation to execute powers of attorney delegating to named
representatives or agents power to represent or act on behalf of the
Corporation, with or without power of substitution.
In the absence of any action by the Board, the president, any vice
president, the secretary or the treasurer of the Corporation may execute for and
on behalf of the Corporation waivers of notice of stockholders meetings and
proxies for such meetings in any company in which the Corporation may hold
voting securities.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Definitions. As used in this article, the term "person"
means any past, present or future director or officer of the Corporation or any
subsidiary or operating division thereof.
Section 2. Indemnification Granted. The Corporation shall indemnify,
to the full extent and under the circumstances permitted by the General
Corporation Law of the State of Delaware in effect from time to time, any person
as defined above, made or threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director or officer of the Corporation or a subsidiary or operating
division thereof, or is or was an employee or agent of the Corporation, or is or
was serving at the specific request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges, expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person or on such person's behalf in connection with such
action, suit or proceeding and any appeal therefrom, if such person acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his or her conduct
was unlawful. The termination of any action, suit, or proceeding by
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judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that such
conduct was unlawful.
Section 3. Requirements for Indemnification. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation, or a
subsidiary thereof or a designated officer of an operating division of the
Corporation, or is or was serving at the specific request of the Corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any action alleged to
have been taken or omitted in such capacity, against costs, charges and expenses
(including attorneys' fees) actually and reasonably incurred by such person or
on such person's behalf in connection with the defense or settlement of such
action or suit and any appeal therefrom, if such person acted in good faith and
in a manner that such person reasonably believed to be in or not opposed to the
best interest of the Corporation except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such costs, charges and expenses
which the Court of Chancery or such other court shall deem proper.
Section 4. Success on Merits of Any Action. Notwithstanding any
other provision of this Article, to the extent that a director, officer,
employee or agent of the Corporation or any subsidiary or operating division
thereof has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit or proceeding referred to in this Article, or in defense of any
claim, issue or matter therein, such person shall be indemnified against all
costs, charges and expenses (including attorneys' fees) actually and reasonably
incurred by such person or on such person's behalf in connection therewith.
Section 5. Determination of Standard of Conduct. Any indemnification
under Sections 2 and 3 of this Article (unless ordered by a court) shall be paid
by the Corporation only after a determination has been made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such quorum is not
obtainable, or even if obtainable, a quorum of disinterested directors so
directs, by
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independent legal counsel in a written opinion, or (3) by the stockholders, that
indemnification of the director, officer, employee or agent is proper in the
circumstances of the specific case because such person has met the applicable
standard of conduct set forth in Sections 2 and 3 of this Article.
Section 6. Advance Payment; Representation by Corporation. Costs,
charges and expenses (including attorneys' fees) incurred by a person referred
to in Sections 2 and 3 of this Article in defending a civil or criminal action,
suit or proceeding shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding; provided, however, that the
payment of such costs, charges and expenses incurred by a director or officer in
such capacity as officer or director (and not in any other capacity and which
service was or is rendered by such person while a director or officer) in
advance of the final disposition of such action, suit or proceeding shall be
made only upon receipt of an undertaking by or on behalf of the director or
officer to repay all amounts so advanced in the event that it shall ultimately
be determined that such director or officer is not entitled to be indemnified by
the Corporation as authorized in this Article. Such costs, charges and expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate. The
Corporation may, in the manner set forth above, and upon approval of such
director, officer, employee or agent, authorize the Corporation's counsel to
represent such person, in any action, suit or proceeding, whether or not the
Corporation is a party to such action, suit or proceeding.
Section 7. Procedure for Obtaining Indemnity. Any indemnification
under Sections 2, 3 and 4, or advance of costs, charges and expenses under
Section 6, of this Article shall be made promptly, and in any event within sixty
(60) days, of the written notice of the director, officer, employee or agent.
The right to indemnification or advances as granted by this Article shall be
enforceable by the director, officer, employee or agent in any court of
competent jurisdiction if the Corporation denies such request, in whole or in
part, or if no disposition thereof is made within sixty (60) days. Such
person's costs and expenses incurred in connection with successfully
establishing a right to indemnification, in whole or in part, in any action
shall also be indemnified by the Corporation. It shall be a defense to any such
action (other than an action brought to enforce a claim for the advance of
costs, charges and expenses under Section 6 of this Article where the required
undertaking, if any, has been received by the Corporation) that the claimant has
not met the standard of conduct set forth in Section 2 or 3 of this Article, but
the burden of proving such defense shall be on the Corporation. Neither failure
of the Corporation (including its Board of Directors, its independent legal
counsel, and its stockholders) to have made a determination that indemnification
of the claimant is proper in the circumstances because such person has met the
applicable standard of conduct set forth in Section 2 or 3 of this Article, nor
the fact that there has been an actual determination by the Corporation
(including its Board of Directors, its independent legal counsel, and its
stockholders) that the claimant
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has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 8. Indemnification Not Exclusive. This right of
indemnification shall not be deemed exclusive of any other rights to which a
person indemnified herein may be entitled by law, agreement, vote of
stockholders or disinterested directors or otherwise, and shall continue as to a
person who has ceased to be a director, officer, designated officer, employee or
agent and shall inure to the benefit of the heirs, executors, administrators and
other legal representatives of such person. It is not intended that the
provisions of this Article be applicable to, and they are not to be construed as
granting indemnity with respect to, matters as to which indemnification would be
in contravention of the laws of Delaware or of the United States of America,
whether as a matter of public policy or pursuant to statutory provision.
Section 9. Invalidity of Certain Provisions. If this Article or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify each director,
officer, employee and agent of the Corporation or any subsidiary or operating
division thereof as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including any action by or in the right of the Corporation, to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
Section 10. Miscellaneous. The Board of Directors may also on behalf
of the Corporation grant indemnification to any individual other than a person
defined herein to such extent and in such manner as the Board in its sole
discretion may from time to time and at any time determine.
ARTICLE XIII
AMENDMENTS
These By-Laws may be adopted, amended or repealed by the affirmative
vote of a majority of the directors then in office.
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EXHIBIT 10.1
AMENDMENT NO. 4 TO RIGHTS AGREEMENT
This AMENDMENT, dated as of December 23, 1997, is between JP
FOODSERVICE, INC., a Delaware corporation (the "Corporation"), and THE BANK OF
NEW YORK (the "Rights Agent").
Recitals
--------
WHEREAS, the Corporation and the Rights Agent are parties to a Rights
Agreement dated as of February 19, 1996, as amended as of May 17, 1996,
September 26, 1996 and June 30, 1997 (the "Rights Agreement"); and
WHEREAS, Rykoff-Sexton, Inc., a Delaware corporation ("Rykoff"),
Hudson Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of the Corporation ("Merger Sub"), and the Corporation have entered into an
Agreement and Plan of Merger, as amended as of September 3, 1997 and November 5,
1997 (the "Rykoff Merger Agreement"), pursuant to which Rykoff will merge with
and into Merger Sub (the "Merger") and stockholders of Rykoff immediately prior
to the consummation of the Merger will become stockholders of the Corporation;
and
WHEREAS, Pursuant to Section 27 of the Rights Agreement, the Board of
Directors of the Corporation has determined that an amendment to the Rights
Agreement as set forth herein is necessary and desirable in connection with the
foregoing and the Corporation and the Rights Agent desire to evidence such
amendment in writing;
NOW, THEREFORE, the parties agree as follows:
I. Amendment of Section 1(a). Section 1(a) of the Rights Agreement
-------------------------
is hereby amended and restated to state in its entirety as follows:
"Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 10% or more (or, in the case
of the ML Entities and the ML Entity Affiliates (as such terms are
hereinafter defined), taken together, more than the ML Entities Share
Amount (as such term is hereinafter defined)) of the Common Shares of the
Company then outstanding, but shall not include (x) the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, and
employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares for or pursuant to the terms of such plan,
or (y) Rykoff-Sexton, Inc., a Delaware corporation ("Rykoff"), or any ML
Entity, but only to the extent that
<PAGE>
Rykoff or such ML Entity would, absent this provision, be deemed to be an
Acquiring Person solely as the result of (i) the execution and delivery of
the Agreement and Plan of Merger (as amended, the "Rykoff Merger
Agreement"), dated as of June 30, 1997, as amended as of September 3, 1997
and November 5, 1997, by and among the Company, Rykoff and Hudson
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
the Company ("Acquisition"), which provides for the merger of Rykoff with
and into Acquisition (the "Rykoff Merger"), (ii) the execution and delivery
of the Stock Option Agreement, dated as of June 30, 1997, by and between
the Company, as issuer, and Rykoff, as grantee, (iii) the Support
Agreement, as amended and restated as of June 30, 1997, by and between the
Company, on the one hand, and the Rykoff stockholders whose names are set
forth on the signature pages thereto (each individually, an "ML Entity" and
collectively, the "ML Entities"), and acknowledged by Rykoff, or (iv) the
consummation of the transactions contemplated thereby, including, without
limitation, the Rykoff Merger; provided, that, notwithstanding the
--------
foregoing, following the Effective Time (as defined in the Rykoff Merger
Agreement) and prior to the termination of the Standstill Agreement, dated
as of May 17, 1996 (the "Standstill Agreement"), by and between Rykoff and
the persons set forth on the signature pages thereto, the ML Entity
Affiliates may acquire beneficial ownership of additional Common Shares
without the ML Entities or ML Entity Affiliates being deemed Acquiring
Persons, provided, and only to the extent, that, after giving effect to
such acquisition of beneficial ownership, the ML Entities and the ML Entity
Affiliates are in compliance with the Standstill Agreement as in effect
from time to time at and after the Effective Time. "ML Entity Affiliate"
shall mean any entity or Person that is an "Affiliate" of an ML Entity, as
such term "Affiliate" is defined in the Standstill Agreement. The number
of Common Shares that may be beneficially owned in the aggregate by the ML
Entities and the ML Entity Affiliates without such entities being deemed
"Acquiring Persons" hereunder pursuant to the foregoing two sentences is
hereinafter referred to as the "ML Entities Share Amount." Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 10% or more (or, in the case of the ML
Entities and the ML Entity Affiliates, taken together, to more than the ML
Entities Share Amount) of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the
-------- -------
Beneficial Owner of 10% or more (or, in the case of the ML Entities and the
ML Entity Affiliates, taken together, more than the ML Entities Share
Amount) of
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the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchase by the
Company, become the Beneficial Owner of any additional Common Shares of the
Company other than in connection with a stock split, stock dividend or
other similar transaction occurring after the date hereof, then such Person
shall be deemed to be an "Acquiring Person." Notwithstanding the foregoing,
if the Board of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be
an "Acquiring Person," as defined pursuant to the foregoing provision of
this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
II. Effectiveness. This Amendment shall be deemed effective as of the
-------------
date first written above, as if executed on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
III. Miscellaneous. This Amendment shall be deemed to be a contract
-------------
made under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable
to contracts to be made and performed entirely within such state. This
amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. If any
provision, covenant or restriction of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
JP FOODSERVICE, INC.
/s/
-------------------------------
Name:
Title:
THE BANK OF NEW YORK
/s/
-------------------------------
Name:
Title:
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EXHIBIT 99.1
Contact: Lewis Hay III
Chief Financial Officer
410-312-7512
JP FOODSERVICE, INC.(R) COMPLETES ACQUISITION OF RYKOFF-SEXTON
COLUMBIA, MD, Dec. 23, 1997 -- JP Foodservice, Inc.(R) ("JP(TM)") (NYSE:JPF),
of Columbia, Maryland, today announced that it has completed the previously
announced acquisition of Rykoff-Sexton, Inc. ("Rykoff"), of Wilkes-Barre,
Pennsylvania. The $1.4 billion transaction establishes the company as the
nation's second-largest foodservice distribution company, with annual sales of
about $5.2 billion, more than 12,000 employees, nationwide distribution
capabilities, and a customer base of more than 130,000 restaurant, hotel and
institutional foodservice customers throughout the United States.
Mr. Jim Miller, Chairman and Chief Executive Officer of the company, said: "This
is an important and exciting moment in our company's history. We are now the
nation's second-largest broadline foodservice distribution company.
"While continuing to be known at the holding company level as J.P. Foodservice,
Inc.(R) we have already commenced the transition of our operations and most of
our products to a proud new name and brand -- U.S. Foodservice(TM) -- that
reflects our national footprint covering about 85 percent of the U.S.
population.
"With a strong balance sheet, an outstanding record of operational and financial
performance, and the ability to support a major, ongoing program of capital
spending to further build our business, we are well-positioned to continue to
pursue attractive external and internal growth opportunities. In fact, since
announcing the Rykoff transaction on June 30, we have completed an additional
transaction representing an additional $62 million of annual sales, and have
been awarded two major pieces of new business as a direct result of the
acquisition.
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"Strategic benefits of the Rykoff-Sexton acquisition also include anticipated
cost reductions as well as revenue and margin enhancements. Savings will arise
from consolidated and rationalized branches and a reduction of the combined
company's cost of capital. Leveraging regional relationships with national
chains provides additional revenue opportunities. Further, revenue stabilization
should result from a diversified customer base, and gross margins should improve
with additional purchasing leverage.
"We have nearly 3,000 sales representatives, who have built long-term
relationships with tens of thousands of foodservice customers, from national
accounts to independent restaurants, hotels, schools, health care facilities and
sports stadiums.
"Operating out of distribution centers at strategic locations throughout the
country, we handle more than 40,000 national, private label and signature brand
items.
"We already make extensive use of information technology for processing orders,
logistics management, inventory management, accounting and many other functions.
A new, state-of-the-art information system is now being completed and will be
fully implemented over the next eighteen months. This system will maximize our
efficiency as a single, seamless company, by supporting standardized product
codes across our entire product line and enabling us to service national
accounts on a single system.
"In short, this acquisition represents a unique opportunity to build the value
of the combined enterprise for our many thousands of restaurant, hotel and
institutional foodservice customers, for our employees, vendors and other
business partners and, in turn, ultimately, for our shareholders," Mr. Miller
concluded.
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As announced on November 5, under the amended acquisition agreement between
the companies Rykoff shareholders will receive shares of JP(TM) at a fixed
exchange ratio of 0.775 JP(TM) common shares for each Rykoff common share they
hold. Based on that exchange ratio, JP(TM)'s closing stock price of $34.81 on
December 22, 1997, the approximately 29.6 million shares of Rykoff common
stock on a fully diluted basis, and the assumption by JP(TM) of approximately
$740 million of Rykoff debt, the transaction has a total enterprise value of
$1.4 billion. Also as previously indicated, the acquisition will be accounted
for using the pooling-of-interest method and is intended to qualify as a
tax-free exchange.
U.S. Foodservice(TM), JP Foodservice Inc.(R)'s new operating company, is a
leading distributor of food and related products to restaurants and
institutional foodservice establishments across the United States. U.S.
Foodservice(TM) markets and distributes more than 40,000 national, private
label and signature brand items to over 130,000 foodservice customers,
including restaurants, hotels, healthcare facilities, cafeterias and schools,
and employs more than 12,000 foodservice professionals. U.S. Foodservice(TM)'s
diverse customer base encompasses both independent and chain businesses,
including Old Country Buffet, Perkins Family Restaurants, Subway, Eurest
Dining Services, Cheesecake Factory, Kindercare, Pizzeria Uno and Ruby
Tuesday.
The statements in this press release concerning management's expectations
regarding acquisitions and the results of future operations constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are subject to risks and uncertainties that could cause U.S.
Foodservice(TM)'s actual operating results to differ materially. Such risks
and uncertainties include the sensitivity of the company's
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business to national and regional economic conditions, the effects of
inflation and deflation in food prices, the highly competitive markets in
which the company operates and difficulties or delays in achieving expected
costs savings and operating synergies in integrating the merged businesses.
JP(TM)'s Current Report on Form 8-K filed with the Securities and Exchange
Commission on April 23, 1997 discusses some of the important factors that
could cause actual results to differ materially from those in such
forward-looking statements.
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