<PAGE>
As filed with the Securities and Exchange Commission on December 29, 1999
Registration No. 333-93453
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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U.S. FOODSERVICE
(Exact name of registrant as specified in its charter)
Delaware 52-1634568
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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9755 Patuxent Woods Drive
Columbia, Maryland 21046
(410) 312-7100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
David M. Abramson, Esq.
Executive Vice President and General Counsel
U.S. Foodservice
9755 Patuxent Woods Drive
Columbia, Maryland 21046
(410) 312-7100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Richard J. Parrino, Esq.
Charles E. Sieving, Esq.
Hogan & Hartson L.L.P.
8300 Greensboro Drive
McLean, Virginia 22102
(703) 610-6100
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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<PAGE>
PROSPECTUS
1,997,846 SHARES
U.S. FOODSERVICE
COMMON STOCK
----------------
U.S. Foodservice is one of the nation's largest broadline foodservice
distributors, offering a comprehensive range of food and related products to
restaurants and other institutional foodservice establishments through our
national distribution network. This prospectus relates to the offer and sale
from time to time of up to 1,997,846 shares of our common stock by the U.S.
Foodservice stockholders named in this prospectus. We will not receive any
proceeds from the sale of these shares.
Our common stock is listed on the New York Stock Exchange and trades on the
exchange under the ticker symbol "UFS." On December 28, 1999, the last reported
sale price of our common stock on the New York Stock Exchange was $15.44 per
share.
Our principal executive offices are located at 9755 Patuxent Woods Drive,
Columbia, Maryland 21046, and our telephone number at that address is (410)
312-7100.
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See "Risk Factors" beginning on page 3 for information that you should
consider before purchasing the shares offered by this prospectus.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------------
The date of this prospectus is December 29, 1999.
<PAGE>
If it is against the law in any state to make an offer to sell the shares,
or to solicit an offer from someone to buy the shares, then this prospectus
does not apply to any person in that state, and no offer or solicitation is
made by this prospectus to any such person.
You should rely only on the information provided or incorporated by
reference in this prospectus or any supplement. Neither we nor any of the
selling stockholders have authorized anyone to provide you with different
information. You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on the front of
such documents.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk Factors................................................................ 3
Cautionary Note Regarding Forward-Looking Statements........................ 7
Where You Can Find More Information......................................... 8
About U.S. Foodservice...................................................... 9
Use of Proceeds............................................................. 9
Selling Stockholders........................................................ 10
Plan of Distribution........................................................ 11
Legal Matters............................................................... 13
Experts..................................................................... 13
</TABLE>
2
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RISK FACTORS
You should carefully consider the following risk factors relating to U.S.
Foodservice and our common stock before purchasing the shares offered by this
prospectus. You should also consider the additional information set forth in
our SEC reports on Form 10-K, 10-Q and 8-K and in the other documents
considered a part of this prospectus. For a description of these reports and
documents, see "Where You Can Find More Information."
Our business has low profit margins and is sensitive to national and
regional economic conditions.
Foodservice distribution companies like U.S. Foodservice purchase, store,
market and transport food and related products to establishments that prepare
and serve meals to be eaten away from home. Our industry is characterized by
relatively high inventory turnover with relatively low profit margins. We sell
a significant portion of our products at prices that are based on the cost of
the products plus a percentage markup. As a result, our profit levels may be
reduced during periods of food price deflation, even though our gross profit
percentage may remain relatively constant. Such a reduction could have a
material adverse effect on our business, operating results and financial
condition.
The foodservice distribution industry is sensitive to national and regional
economic conditions. Economic downturns could have an adverse impact on the
demand for our products. These downturns may reduce consumer spending at
restaurants and other foodservice institutions we supply.
Our distribution and administrative expenses are relatively fixed in the
short term. As a result, unexpected decreases in our net sales, such as those
due to severe weather conditions, can have a significant short-term adverse
impact on our operating income. Our operating results also may be adversely
affected by difficulties we may encounter in collecting our accounts receivable
and in maintaining our profit margins in times of unexpected increases in fuel
costs.
We are subject to risks associated with our acquisitions of other
foodservice businesses.
Since we became a public company in November 1994, we have acquired a
substantial number of foodservice businesses as part of our growth strategy of
supplementing internal expansion with acquisitions. Our acquisitions may not
improve our financial performance in the short or long term as we expect.
Acquisitions will enhance our earnings only if we can successfully integrate
those businesses into our marketing programs, centralized purchasing
operations, distribution network and information systems. Our ability to
integrate acquired businesses may be adversely affected by factors that include
customer resistance to our product brands and distribution system, our failure
to retain management and sales personnel, difficulties in converting different
information systems to our proprietary systems, the size of the acquired
business and the allocation of limited management resources among various
integration efforts. In addition, we may not eliminate as many redundant costs
as we anticipated in selecting our acquisition candidates. One or more of our
acquisition candidates also may have liabilities or adverse operating issues
that we failed to discover prior to the acquisition. Difficulties in
integrating acquired businesses, as well as liabilities or adverse operating
issues relating to acquired businesses, could have a material adverse effect on
our business, operating results and financial condition.
Even if acquired companies eventually contribute to an increase in our
profitability, the acquisitions may adversely affect our earnings in the short
term. Our earnings may decrease as a result of transaction-related expenses we
record for the quarter in which we complete an acquisition. Our earnings may be
further reduced by the higher operating and administrative expenses we
typically incur in the quarters immediately following an acquisition as we seek
to integrate the acquired business into our operations. The amortization of
goodwill and depreciation resulting from acquisitions also may contribute to
reduced earnings.
A significant portion of the growth in our revenues in recent years has
resulted from acquisitions. We may not be able to increase our revenues or
earnings through new acquisitions at the same rates we have achieved
3
<PAGE>
through our past acquisitions. For example, we were able to triple our revenues
directly as a result of our acquisition of Rykoff-Sexton, Inc. in our 1998
fiscal year. As the foodservice distribution industry continues to consolidate,
we may find it more difficult to identify suitable acquisition candidates than
we did in the past. We may also find that the acquisition terms are not as
favorable as those in our prior acquisitions.
The way in which we pay for acquired businesses also involves risks. Many of
our past acquisitions have been structured as stock-for-stock transactions.
Continuing volatility in the U.S. securities markets and fluctuations in our
stock price may increase the risk that our stock-for-stock acquisitions could
dilute our earnings per share. We also pay cash for some businesses. In the
past, we have obtained funds for some of our cash acquisitions through
additional bank borrowings or by issuing common stock. If we increase our bank
borrowings or issue debt securities to finance future acquisitions, we will
increase our level of indebtedness and interest expense, while if we issue
additional common stock, we may dilute the ownership of our stockholders. In
addition, we may not be able to obtain the funds we need on acceptable terms.
These risks in the way we finance acquisitions could have a material adverse
effect on our business, operating results and financial condition.
Our stock price has fluctuated over a wide range, and could fluctuate
significantly in the future, as a result of our operating performance and
conditions in our industry.
From time to time, there may be significant volatility in the market price
for our common stock. Since our common stock began to trade publicly in
November 1994, its market price has fluctuated over a wide range. During our
last four complete fiscal quarters, after giving effect to the two-for-one
stock split we completed on August 4, 1999, the high last reported sale price
of our common stock on the New York Stock Exchange was $26.25 and the low last
reported sale price of our common stock was $17.56. A number of factors
involving U.S. Foodservice and the foodservice distribution industry could
contribute to future fluctuations in our stock price. These factors include the
following:
. quarterly operating results of U.S. Foodservice or other distributors of
food and related goods, which could affect the attractiveness of our
stock compared to the securities of foodservice companies with better
results or companies in other businesses;
. changes in general conditions in the economy or the foodservice
distribution industry, which could affect the demand for our products
and our operating results;
. our failure to complete and successfully integrate acquisitions of other
foodservice companies, which could adversely affect our operating
results and our ability to grow; and
. severe weather conditions, which could result in unexpected decreases in
our net sales.
The failure to attain year 2000 compliance may have an adverse impact on our
business.
We and other companies we do business with rely on numerous computer
programs in managing day-to-day operations. We have undertaken a program to
address the Year 2000 issue, which is a general term used to describe the
various problems that may result from the improper processing of dates and
date-sensitive calculations by computers and other machinery as the year 2000
is approached and reached. Our failure to correct a Year 2000 problem could
result in a material interruption in, or a material failure of, our normal
business activities or operations. Our Year 2000 program has focused on both
our internal computer systems and third-party computer systems, including the
systems of some of our important suppliers and customers. As of October 2,
1999, the end of our last complete fiscal quarter, we expect to continue to
incur additional costs, excluding internal staff costs, of up to $ 0.3 million
to complete our Year 2000 compliance work with respect to our major information
systems. It is possible that we will have to increase this estimate as we
complete our assessment of the impact of the Year 2000 issue on our business.
In addition, we may have to replace or upgrade systems or equipment at a
substantial cost. We cannot be sure that we will be able to resolve the Year
2000 issue in 1999. If we fail to resolve the Year 2000 issue, or if our
important suppliers and customers fail to resolve their Year 2000 issues as
they relate to U.S. Foodservice, the Year 2000 problem could have a material
adverse effect on our business, operating results and financial condition.
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A labor dispute or work stoppage involving our employees, many of whom are
union members, could adversely affect our business.
As of July 3, 1999, the end of our last complete fiscal year, approximately
3,500 of our employees were members of approximately 40 different local unions
associated with the International Brotherhood of Teamsters and other labor
organizations. These employees represented approximately 27% of our full-time
employees and approximately 27% of the employees employed in our warehouse and
distribution operations. In the last three quarters of our 2000 fiscal year,
collective bargaining contracts covering approximately 1,200 of our employees
will expire by May 31, 2000. A labor dispute or work stoppage resulting from
our failure to conclude new collective bargaining agreements or from other
factors could have a material adverse effect on our business, operating results
and financial condition.
The foodservice distribution industry is highly competitive.
Our industry is extremely fragmented, with over 3,000 companies in operation
in 1998. The number and diverse nature of these companies result in highly
competitive conditions. Our competition includes not only other broadline
distributors, which provide a comprehensive range of food and related products
from a single source of supply, but also specialty distributors and system
distributors. Specialty distributors generally supply one or two product
categories, while system distributors typically supply a narrow range of
products to a limited number of multi-unit businesses operating in a broad
geographical area. We compete in each of our markets with at least one other
large national distribution company, generally SYSCO Corporation or Alliant
Foodservice, Inc., as well as with numerous regional and local distributors. In
seeking acquisitions of other foodservice businesses, we compete against both
other foodservice distribution companies and financial investors. Our failure
to compete successfully could have a material adverse effect on our business,
operating results and financial condition.
We currently have significant indebtedness and may incur additional
indebtedness in the future.
At October 2, 1999, our ratio of total debt to total capitalization was
approximately 43.8%. Our total capitalization is the sum of our total debt and
capital lease obligations plus our stockholders' equity. Our ratio of total
debt to total capitalization as of October 2, 1999 would have been
approximately 54.4% if we had included as debt $353 million of accounts
receivable securitization arrangements. In accordance with generally accepted
accounting principles, we do not account for these arrangements as debt on our
balance sheet, but many lenders consider these arrangements in their credit
decisions. We may incur additional indebtedness in the future, subject to
limitations contained in the instruments governing our indebtedness, to finance
capital expenditures or for other general corporate purposes, including
acquisitions. We cannot assure you that our business will continue to generate
cash flow at or above the levels required to service our indebtedness and meet
our other cash needs. If our business fails to generate sufficient operating
cash flow in the future, or if we fail to obtain cash from other sources such
as asset sales or additional financings, we will be restricted in our ability
to continue to make acquisitions for cash and to invest in expansion or
replacement of our distribution facilities, information systems and equipment.
Such a failure could have a material adverse effect on our business, operating
results and financial condition. In addition, because a majority of our
indebtedness bears interest at floating rates, a material increase in interest
rates could adversely affect our ability to meet our liquidity requirements.
Our success largely depends on our ability to retain our senior management.
We largely depend for our success on the efforts of members of our senior
management. Our key senior managers have many years of experience in broadline
foodservice distribution with U.S. Foodservice and other companies, as well as
in the acquisition and integration of foodservice businesses. They have
developed and coordinated implementation of U.S. Foodservice's business
strategy since our formation in 1989. If we were to lose the services of one or
more of our key senior managers, our business, operating results and financial
condition could be materially adversely affected.
5
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Product liability claims could have an adverse effect on our business.
Like any other seller of food and processor of meats, we face an inherent
risk of exposure to product liability claims if the products we sell cause
injury or illness. We have obtained primary and excess umbrella liability
insurance with respect to product liability claims. We cannot assure you,
however, that this insurance will continue to be available at a reasonable
cost, or, if available, will be adequate to cover liabilities. We generally
seek contractual indemnification from parties supplying our products, but any
such indemnification is limited, as a practical matter, to the creditworthiness
of the indemnifying party. If we do not have adequate insurance or contractual
indemnification available, product liabilities relating to defective products
could have a material adverse effect on our business, operating results and
financial condition.
Future sales of our common stock in the public market could adversely affect
our stock price and our ability to raise funds in new stock offerings.
Future sales of substantial amounts of our common stock in the public
market, or the perception that such sales could occur, could adversely affect
prevailing market prices for our common stock and could impair our ability to
raise capital through future offerings of equity securities. Of the 101.8
million shares of our common stock outstanding at the date of this prospectus,
up to approximately 1.9 million shares are eligible for sale in the public
market in accordance with Rule 144 under the Securities Act of 1933.
As of the date of this prospectus, we also were required by various
registration rights agreements, with limited exceptions, to maintain a
continuously effective registration statement covering resales of up to
approximately 2.0 million shares of common stock we issued to stockholders of
acquired businesses. This prospectus forms a part of such a registration
statement. We expect to grant registration rights to the stockholders of other
foodservice businesses we may acquire in the future. The exercise of
registration rights granted by U.S. Foodservice is subject to notice
requirements, timing restrictions and volume limitations which may be imposed
by the underwriters of an offering. U.S. Foodservice is required to bear the
expenses of all these registrations, except for underwriting discounts and
commissions.
We do not anticipate that we will pay cash dividends on our common stock.
We have never paid cash dividends on our common stock and we do not
anticipate that we will pay cash dividends in the foreseeable future. We may
pay cash dividends only if we comply with financial tests and other
restrictions contained in our credit facility agreements.
Provisions in our charter and bylaws and in Delaware law could discourage
takeover attempts we oppose even if our stockholders might benefit from a
change in control of U.S. Foodservice.
Provisions in our charter and bylaws and in the Delaware general corporation
law may make it difficult and expensive for a third party to pursue a takeover
attempt we oppose even if a change in control of U.S. Foodservice would be
beneficial to the interests of our stockholders. The charter and bylaw
provisions include a requirement that our board of directors be divided into
three classes, with approximately one-third of the directors to be elected each
year. This classification of directors makes it more difficult for an acquiror
or for other stockholders to change the composition of the board of directors.
In addition, the board of directors has the authority to issue up to 5,000,000
shares of preferred stock in one or more series and to fix the powers,
preferences and rights of each series without stockholder approval. The ability
to issue preferred stock could discourage unsolicited acquisition proposals or
make it more difficult for a third party to gain control of U.S. Foodservice,
or otherwise could adversely affect the market price of our common stock.
Further, as a Delaware corporation, we are subject to section 203 of the
Delaware general corporation law. This section generally prohibits us from
engaging in mergers and other business combinations with stockholders that
beneficially own 15% or more of our voting stock and with their affiliates,
unless our directors or stockholders approve the business combination in the
prescribed manner.
6
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We have adopted a shareholder rights plan which could discourage hostile
acquisitions of control in which our stockholders may wish to participate.
In 1996, our board of directors adopted a "poison pill" shareholder rights
plan, which may discourage a third party from making a proposal to acquire U.S.
Foodservice which we have not solicited or do not approve, even if the
acquisition would be beneficial to our stockholders. As a result, our
stockholders who wish to participate in such a transaction may not have an
opportunity to do so. Under our shareholder rights plan, preferred share
purchase rights, which are attached to our common stock, generally will be
triggered upon the acquisition, or actions that would result in the
acquisition, of 10% or more of the common stock by any person or group. For
investors eligible to report their ownership of our common stock on Schedule
13G under the Securities Exchange Act of 1934, those rights would be triggered
if such investors acquired, or took actions that would result in the
acquisition of, 15% or more of the common stock. If triggered, these rights
would entitle our stockholders other than the acquiror to purchase, for the
exercise price, shares of our common stock having a market value of two times
the exercise price. In addition, if a company acquires us in a merger or other
business combination, or if we sell more than 50% of our consolidated assets or
earning power, these rights will entitle our stockholders other than the
acquiror to purchase, for the exercise price, shares of the common stock of the
acquiring company having a market value of two times the exercise price.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in it, as well
as any prospectus supplement that accompanies it, include "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. We intend the forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements in
these sections. All statements regarding our expected financial position and
operating results, our business strategy, our financing plans, forecasted
demographic and economic trends relating to our industry, our ability to
complete acquisitions and to recover acquisition-related costs, and similar
matters are forward-looking statements. These statements can sometimes be
identified by our use of forward-looking words such as "may," "will,"
"anticipate," "estimate," "expect" or "intend." We cannot promise you that our
expectations in such forward-looking statements will turn out to be correct.
Our actual results could be materially different from our expectations.
Important factors that could cause our actual results to be materially
different from our expectations include those discussed in this prospectus
under the caption "Risk Factors."
7
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC under the Securities Exchange Act. Our Securities
Exchange Act file number for those SEC filings is 0-24954. You may read and
copy any document we file at the following SEC public reference rooms in
Washington, D.C. and at the following SEC regional offices:
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison
Room 1024 Suite 1300 Street
Washington, D.C. New York, New York Suite 1400
20549 10048 Chicago, Illinois
60661
You may obtain information on the operation of the public reference rooms by
calling the SEC at 1-800-SEC-0330.
We file information electronically with the SEC. Our SEC filings also are
available from the SEC's Internet site at http://www.sec.gov, which contains
reports, proxy and information statements, and other information regarding
issuers that file electronically.
You also may inspect our SEC filings and other information concerning U.S.
Foodservice at the offices of the New York Stock Exchange located at 20 Broad
Street, New York, New York 10005.
This prospectus is part of a registration statement we filed with the SEC.
The SEC allows us to "incorporate by reference" certain documents we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
until all of the selling stockholders sell all of the shares or the offering is
otherwise terminated:
1. our Annual Report on Form 10-K for our fiscal year ended July 3, 1999,
which we filed on October 1, 1999, including the information we
incorporated by reference in our Form 10-K from our definitive proxy
statement for our 1999 annual meeting of stockholders, which we filed on
October 14, 1999;
2. our Quarterly Report on Form 10-Q for our fiscal quarter ended October
2, 1999, which we filed on November 15, 1999;
3. our Current Reports on Form 8-K which we filed on October 4, 1999 and
November 2, 1999;
4. the description of our common stock contained in our registration
statement on Form 8-A which we filed on December 20, 1996 and amended on
June 25, 1999, including any amendments or reports we file for the
purpose of updating this description; and
5. the description of the preferred share purchase rights attached to our
common stock which is contained in our registration statement on Form 8-
A which we filed on December 20, 1996 and amended on June 25, 1999,
including any amendments or reports we file for the purpose of updating
this description.
We will provide a copy of the information we incorporate by reference, at no
cost, to each person to whom this prospectus is delivered. To request a copy of
any or all of this information, you should write or telephone us at the
following address and telephone number:
Investor Relations
U.S. Foodservice
9755 Patuxent Woods Drive
Columbia, Maryland 21046
Telephone: (410) 312-7100
8
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ABOUT U.S. FOODSERVICE
U.S. Foodservice, formerly JP Foodservice, Inc., is one of the nation's
largest broadline foodservice distributors based on fiscal year 1999 net sales
of $6.2 billion. We sell food and related products to restaurants and other
institutional foodservice establishments through our national distribution
network, which provides geographic access to more than 85% of the U.S.
population. We market and distribute more than 43,000 national and proprietary
brand items to over 130,000 foodservice customers, including restaurants,
hotels, healthcare facilities, cafeterias and schools. This broad product line
allows us to meet substantially all of the food and related supply needs of our
diverse customer base of independent "street" and multi-unit "chain"
businesses, which include Ruby Tuesday, Subway, Buffet's Inc., Perkins Family
Restaurants and Pizzeria Uno.
We supplement our internal expansion with an active program of strategic
acquisitions to take advantage of growth opportunities from ongoing
consolidation in the fragmented foodservice distribution industry. We seek to
increase penetration of our current markets through acquisitions of small,
privately owned distributors which we fold into our existing operations and to
expand into new markets through acquisitions of larger-sized distributors. On
December 23, 1997, we acquired Rykoff-Sexton by merger. At the time of the
acquisition, Rykoff-Sexton was the nation's third largest broadline foodservice
distributor based on net sales.
U.S. Foodservice is a holding company that conducts its operations through
wholly owned subsidiaries. When we refer in this prospectus to U.S.
Foodservice, we mean U.S. Foodservice and its consolidated subsidiaries. On
February 27, 1998, we changed our corporate name from JP Foodservice, Inc. to
U.S. Foodservice to reflect our expanded distribution capabilities throughout
the country. When we refer in this prospectus to U.S. Foodservice prior to
February 27, 1998, we mean JP Foodservice, Inc. and its consolidated
subsidiaries.
USE OF PROCEEDS
The selling stockholders will receive all of the net proceeds from the sale
of their shares. Accordingly, U.S. Foodservice will not receive any proceeds
from the sale of the shares.
9
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SELLING STOCKHOLDERS
The selling stockholders include former owners of two foodservice businesses
we have acquired: the Parkway companies, which include Parkway Provision
Company, Reese Associates, Inc. and Diamond Meat and Food Service Company, and
Joseph Webb Foods, Inc. We issued 204,894 of the shares offered by this
prospectus to the former stockholders of the Parkway companies, David L. Reese
and James H. Reese, in consideration of our acquisition of the Parkway
companies in the second quarter of fiscal 2000. We issued 1,792,952 of the
shares offered by this prospectus to the former stockholders of Joseph Webb
Foods, J. Christopher Reyes, M. Jude Reyes and David K. Reyes, in consideration
for our acquisition of Joseph Webb Foods in the second quarter of fiscal 1999.
We are obligated to issue additional shares to the former stockholders of
Joseph Webb Foods if the business we acquired from them achieves specified
sales targets. We have issued these stockholders 60,838 of the shares shown
below under this agreement. We have registered the shares under the Securities
Act in accordance with registration rights we granted to the selling
stockholders in connection with the acquisition of their businesses. Our
registration of the shares does not necessarily mean that any selling
stockholder will sell all or any of the shares listed below.
The following table sets forth certain information with respect to the
selling stockholders.
<TABLE>
<CAPTION>
Name of Shares Beneficially Shares Shares Beneficially
Beneficial Owner Owned Prior to Offering Offered Owned After Offering
---------------- ----------------------- ------- --------------------
<S> <C> <C> <C>
David L. Reese............. 102,447 102,447 0
James H. Reese............. 102,447 102,447 0
J. Christopher Reyes....... 717,182 717,182 0
M. Jude Reyes.............. 717,182 717,182 0
David K. Reyes............. 358,588 358,588 0
</TABLE>
David Reese served as president and a director and James Reese served as
vice president and a director of each of the Parkway companies before we
acquired those companies. We currently employ David Reese as a division
president.
Before we acquired Joseph Webb Foods, J. Christopher Reyes served as a
director, President and Secretary of Joseph Webb Foods, M. Jude Reyes served as
a director and Vice President of Joseph Webb Foods, and David K. Reyes served
as a director, Vice President and Assistant Treasurer of Joseph Webb Foods. We
do not currently employ any of these persons.
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PLAN OF DISTRIBUTION
The shares may be sold or distributed from time to time by the selling
stockholders named in this prospectus, by their donees or transferees, or by
their other successors in interest. The selling stockholders may sell their
shares at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, at negotiated prices, or at fixed prices, which
may be changed. Each selling stockholder reserves the right to accept or
reject, in whole or in part, any proposed purchase of shares, whether the
purchase is to be made directly or through agents.
The selling stockholders may offer their shares at various times in one or
more of the following transactions:
. in ordinary brokers' transactions and transactions in which the broker
solicits purchasers;
. in transactions involving cross or block trades or otherwise on the New
York Stock Exchange;
. in transactions in which brokers, dealers or underwriters purchase the
shares as principal and resell the shares for their own accounts
pursuant to this prospectus;
. in transactions "at the market" to or through market makers in the
common stock or into an existing market for the common stock;
. in other ways not involving market makers or established trading
markets, including direct sales of the shares to purchasers or sales of
the shares effected through agents;
. through transactions in options, swaps or other derivatives which may or
may not be listed on an exchange;
. in privately negotiated transactions;
. in transactions to cover short sales; or
. in a combination of any of the foregoing transactions.
The selling stockholders also may sell their shares in accordance with Rule
144 under the Securities Act.
From time to time, one or more of the selling stockholders may pledge or
grant a security interest in some or all of the shares owned by them. If the
selling stockholders default in performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares from time to time by
this prospectus. The selling stockholders also may transfer and donate shares
in other circumstances. The number of shares beneficially owned by selling
stockholders will decrease as and when the selling stockholders transfer or
donate their shares or default in performing obligations secured by their
shares. The plan of distribution for the shares offered and sold under this
prospectus will otherwise remain unchanged, except that the transferees,
donees, pledgees, other secured parties or other successors in interest will
be selling stockholders for purposes of this prospectus.
A selling stockholder may sell short the common stock. The selling
stockholder may deliver this prospectus in connection with such short sales
and use the shares offered by this prospectus to cover such short sales.
A selling stockholder may enter into hedging transactions with broker-
dealers. The broker-dealers may engage in short sales of the common stock in
the course of hedging the positions they assume with the selling stockholder,
including positions assumed in connection with distributions of the shares by
such broker-dealers. A selling stockholder also may enter into option or other
transactions with broker-dealers that involve the delivery of the shares to
the broker-dealers, who may then resell or otherwise transfer such shares. In
addition, a selling stockholder may loan or pledge shares to a broker-dealer,
which may sell the loaned shares or, upon a default by the selling stockholder
of the secured obligation, may sell or otherwise transfer the pledged shares.
The selling stockholders may use brokers, dealers, underwriters or agents
to sell their shares. The persons acting as agents may receive compensation in
the form of commissions, discounts or concessions. This compensation may be
paid by the selling stockholders or the purchasers of the shares for whom such
persons may act as agent, or to whom they may sell as principal, or both. The
compensation as to a particular person may be
11
<PAGE>
less than or in excess of customary commissions. The selling stockholders and
any agents or broker-dealers that participate with the selling stockholders in
the offer and sale of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act. Any commissions they receive and any profit they
realize on the resale of the shares by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Neither we nor any selling
stockholders can presently estimate the amount of such compensation.
If a selling stockholder sells shares in an underwritten offering, the
underwriters may acquire the shares for their own account and resell the shares
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. In such event, we will set forth in a supplement to this
prospectus the names of the underwriters and the terms of the transactions,
including any underwriting discounts, concessions or commissions and other
items constituting compensation of the underwriters and broker-dealers. The
underwriters from time to time may change any public offering price and any
discounts, concessions or commissions allowed or reallowed or paid to broker-
dealers. Unless otherwise set forth in a supplement, the obligations of the
underwriters to purchase the shares will be subject to certain conditions, and
the underwriters will be obligated to purchase all of the shares specified in
the supplement if they purchase any of the shares.
We have advised the selling stockholders that during such time as they may
be engaged in a distribution of the shares, they are required to comply with
Regulation M under the Securities Exchange Act. With exceptions, Regulation M
prohibits any selling stockholder, any affiliated purchasers and other persons
who participate in such a distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
Under our registration rights agreements with the selling stockholders, we
are required to bear the expenses relating to this offering, excluding any
underwriting discounts or commissions, stock transfer taxes and fees of legal
counsel to the selling stockholders. We estimate these expenses will total
approximately $145,000.
We have agreed to indemnify the selling stockholders and any underwriters,
brokers, dealers or agents and their respective controlling persons against
certain liabilities, including certain liabilities under the Securities Act.
It is possible that a significant number of shares could be sold at the same
time. Such sales, or the perception that such sales could occur, may adversely
affect prevailing market prices for the common stock.
This offering by any selling stockholder will terminate on the date
specified in the selling stockholder's registration rights agreement with U.S.
Foodservice or, if earlier, on the date on which the selling stockholder has
sold all of his shares.
12
<PAGE>
LEGAL MATTERS
For purposes of this offering, Miles & Stockbridge P.C., Baltimore,
Maryland, has given its opinion as to the validity of the shares offered by the
selling stockholders.
EXPERTS
The consolidated financial statements of U.S. Foodservice as of June 27,
1998 and July 3, 1999 and for each of the years in the three-year period ended
July 3, 1999 incorporated by reference in this prospectus have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated herein by reference and upon the authority of said firm as experts
in auditing and accounting.
The audited consolidated financial statements of Rykoff-Sexton and
subsidiaries as of and for the fiscal year ended June 28, 1997 incorporated by
reference in this prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale and distribution of the securities being registered. All amounts
except the SEC registration fee are estimated.
<TABLE>
<CAPTION>
Item Amount
---- -------
<S> <C>
SEC registration fee................................................ $ 795
Printing expenses................................................... 10,500
Legal fees and expenses............................................. 6,500
Accounting fees and expenses........................................ 6,500
Miscellaneous....................................................... 705
-------
Total............................................................. $25,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Reference is made to the provisions of Article XII of the registrant's
Restated Certificate of Incorporation filed as Exhibit 4.1 hereto and the
provisions of Article XII of the registrant's Amended and Restated By-laws
filed as Exhibit 4.2 hereto.
The registrant is a Delaware corporation, subject to the applicable
indemnification provisions of the General Corporation Law of the State of
Delaware (the "DGCL"). Section 145 of the DGCL provides for the
indemnification, under certain circumstances, of any person in connection with
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than derivative actions), brought or threatened involving
such persons because of such person's service in any such capacity with respect
to another corporation or other entity at the request of such corporation.
The registrant's Amended and Restated By-Laws provide for the
indemnification of the officers and directors of the registrant to the fullest
extent permitted by the DGCL. Article XII of the By-Laws provides that each
person who was or is made a party to (or is threatened to be made a party to)
any civil or criminal action, suit or proceeding by reason of the fact that
such person is or was a director or officer of the registrant shall be
indemnified and held harmless by the registrant to the fullest extent
authorized by the DGCL against all expense, liability and loss (including,
without limitation, attorneys' fees) incurred by such person in connection
therewith, if such person acted in good faith and in a manner such person
reasonably believed to be or not opposed to the best interests of the
registrant and had no reason to believe that such person's conduct was illegal.
Article XII of the registrant's Restated Certificate of Incorporation
provides that, to the fullest extent permitted by the DGCL, the registrant's
directors will not be personally liable to the registrant or its stockholders
for monetary damages resulting from a breach of their fiduciary duties as
directors. However, nothing contained in such Article XII shall eliminate or
limit the liability of directors (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
the law, (iii) under Section 174 of the DGCL or (iv) for any transaction from
which the director derived an improper personal benefit.
The registrant maintains directors and officers liability insurance, which
covers directors and officers of the registrant against certain claims or
liabilities arising out of the performance of their duties.
II-1
<PAGE>
In the registration rights agreements with the registrant pursuant to which
the securities offered hereby are being registered, the selling stockholders
have agreed to indemnify the registrant, its directors, officers and agents and
each person, if any, who controls the registrant against certain liabilities,
including certain liabilities under the Securities Act.
Item 16: Exhibits
The following Exhibits are filed herewith or incorporated herein by
reference:
<TABLE>
<C> <S>
*4.1 Restated Certificate of Incorporation of the Company, as amended.
4.2 Amended and Restated By-Laws of the Company (incorporated by reference
to Exhibit 4.2 to the Company's Registration Statement on Form S-3
(Commission File No. 333-81323)).
+4.3 Specimen certificate representing common stock, par value $.01 per
share, of the Company.
+4.4 Rights Agreement, dated as of October 4, 1999, between U.S. Foodservice
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
*5.1 Opinion of Miles & Stockbridge P.C., counsel to the Company, regarding
the validity of the securities being offered by certain of the selling
stockholders.
+23.1 Consent of KPMG LLP, Independent Accountants.
+23.2 Consent of Arthur Andersen LLP, Independent Accountants.
*23.3 Consent of Miles & Stockbridge P.C. (included in Exhibit 5.1).
+24 Power of Attorney.
</TABLE>
- --------
* Filed herewith.
+Previously filed.
II-2
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the General Corporation Law of the State of Delaware,
the Restated Certificate of Incorporation or the Amended and Restated By-Laws
of registrant, indemnification agreements entered into between registrant and
its officers and directors, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbia, State of Maryland, on December 29, 1999.
U.S. FOODSERVICE
/s/ George T. Megas
By: _________________________________
George T. Megas
Senior Vice President and Chief
Financial Officer (Duly
Authorized Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James L. Miller* Chairman of the Board, December 29, 1999
______________________________________ President and Chief
James L. Miller Executive Officer
(Principal Executive
Officer)
/s/ George T. Megas Senior Vice President and December 29, 1999
______________________________________ Chief Financial Officer
George T. Megas (Principal Financial
Officer)
/s/ Robert A. Soule* Vice President and Chief December 29, 1999
______________________________________ Accounting Officer
Robert A. Soule (Principal
Accounting Officer)
/s/ Lewis Hay, III* Director December 29, 1999
______________________________________
Lewis Hay, III
/s/ Michael J. Drabb* Director December 29, 1999
______________________________________
Michael J. Drabb
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David M. Abramson* Director December 29, 1999
______________________________________
David M. Abramson
/s/ Eric E. Glass* Director December 29, 1999
______________________________________
Eric E. Glass
/s/ Mark P. Kaiser* Director December 29, 1999
______________________________________
Mark P. Kaiser
/s/ Paul I. Latta, Jr.* Director December 29, 1999
______________________________________
Paul I. Latta, Jr.
/s/ Dean R. Silverman* Director December 29, 1999
______________________________________
Dean R. Silverman
/s/ Jeffrey D. Serkes* Director December 29, 1999
______________________________________
Jeffrey D. Serkes
/s/ George T. Megas
*By:__________________________________
George T. Megas
(Attorney-in-fact)
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibits
------- --------
<C> <S>
*4.1 Restated Certificate of Incorporation of the Company, as amended.
4.2 Amended and Restated By-Laws of the Company (incorporated by reference
to Exhibit 4.2 to the Company's Registration Statement on Form S-3
(Commission File No. 333-81323)).
+4.3 Specimen certificate representing common stock, par value $.01 per
share, of the Company.
+4.4 Rights Agreement, dated as of October 4, 1999, between U.S.
Foodservice and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent.
*5.1 Opinion of Miles & Stockbridge P.C., counsel to the Company, regarding
the validity of the securities being offered by certain of the selling
stockholders.
+23.1 Consent of KPMG LLP, Independent Accountants.
+23.2 Consent of Arthur Andersen LLP, Independent Accountants.
*23.3 Consent of Miles & Stockbridge P.C. (included in Exhibit 5.1).
+24 Power of Attorney.
</TABLE>
- --------
* Filed herewith.
+Previously filed.
<PAGE>
Exhibit 4.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
U.S. FOODSERVICE
U.S. Foodservice, a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that:
1. ARTICLE IV of the Certificate of Incorporation of the Corporation,
as heretofore amended, is hereby further amended to read in its entirety as
follows:
ARTICLE IV
CAPITAL STOCK
The Corporation shall have the authority to issue a total of four
hundred five million (405,000,000) shares of capital stock, each with
a par value of $0.01, consisting of four hundred million (400,000,000)
shares of Common Stock and five million (5,000,000) shares of
Preferred Stock.
2. The foregoing amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, U.S. Foodservice has caused this Certificate of
Amendment to be executed by its duly authorized officer on this 1st day of
December 1999.
U.S. FOODSERVICE
By: /s/ David M. Abramson
------------------------------
Name: David M. Abramson
Title: Executive Vice President
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
U.S. FOODSERVICE
U.S. Foodservice, a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name under which the corporation was originally incorporated is JPF
Holdings, Inc. and the original Certificate of Incorporation of the corporation
was filed with the Secretary of State of the State of Delaware on June 22, 1989.
2. This Restated Certificate of Incorporation restates and integrates and
does not further amend the provisions of the Certificate of Incorporation of the
corporation as heretofore amended or supplemented, and there is no discrepancy
between those provisions and the provisions of this Restated Certificate of
Incorporation.
3. This Restated Certificate of Incorporation has been duly adopted in
accordance with the provisions of Section 245 of the General Corporation Law of
the State of Delaware.
4. The text of the Certificate of Incorporation of the corporation is
hereby restated and integrated to read in its entirety as follows:
ARTICLE I
NAME
The name of the corporation is U.S. Foodservice (the "Corporation").
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's registered office in the State of Delaware
is 1013 Centre Road, in the City of Wilmington, County of New Castle. The name
of the Corporation's registered agent at such address is Corporation Service
Company.
<PAGE>
ARTICLE III
PURPOSE
The purpose or purposes for which the Corporation is organized are to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware as from time to time
amended (the "General Corporation Law").
ARTICLE IV
CAPITAL STOCK
The Corporation shall have the authority to issue a total of one hundred
fifty-five million (155,000,000) shares of capital stock, each with a par value
of $0.01, consisting of one hundred fifty million (150,000,000) shares of Common
Stock and five million (5,000,000) shares of Preferred Stock.
ARTICLE V
COMMON STOCK
Except as required by law, all shares of Common Stock shall be identical in
all respects and shall entitle the holders thereof to the same rights and
privileges, subject to the same qualifications, limitations and restrictions.
Except as required by law, the holders of shares of Common Stock shall be
entitled to one vote per share of Common Stock on all matters on which
stockholders of the Corporation have the right to vote.
ARTICLE VI
PREFERRED STOCK
Section A. Preferred Stock. The Corporation is authorized to issue shares
---------------
of Preferred Stock from time to time in one or more series as may from time to
time be determined by the Board of Directors of the Corporation (the "Board"),
each of such series to be distinctly designated. The voting powers, preferences
and relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, if any, of each such series
may differ from those of any and all other series of Preferred Stock at any time
outstanding, and the Board is hereby expressly granted authority to fix or
alter, by resolution or resolutions, the designation, number, voting powers,
preferences and relative, participating, optional, and other special rights, and
the qualifications, limitations and restrictions, of each such series,
including, but without limiting the generality of the foregoing, the following:
2
<PAGE>
1. The distinctive designation of, and the number of shares of Preferred
Stock that shall constitute, such series, which number (except where otherwise
provided by the Board in the resolution establishing such series) may be
increased (but not above the total number of shares of Preferred Stock) or
decreased (but not below the number of shares of such series then outstanding)
from time to time by like action of the Board.
2. The rights in respect of dividends, if any, of such series of Preferred
Stock, the extent of the preference or relation, if any, of such dividends to
the dividends payable on any other class or classes or any other series of the
same or other class or classes of capital stock of the Corporation, and whether
such dividends shall be cumulative or noncumulative.
3. The right, if any, of the holders of such series of Preferred Stock to
convert the same into, or exchange the same for, shares of any other class or
classes or of any other series of the same or any other class or classes of
capital stock of the Corporation, and the terms and conditions of such
conversion or exchange.
4. Whether or not shares of such series of Preferred Stock shall be
subject to redemption, and the redemption price or prices and the times at
which, and the terms and conditions on which, shares of such series of Preferred
Stock may be redeemed.
5. The rights, if any, of the holders of such series of Preferred Stock
upon the voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation or in the event of any merger or consolidation of or sale of assets
by the Corporation.
6. The terms of any sinking fund or redemption or purchase account, if
any, to be provided for shares of such series of the Preferred Stock.
7. The voting powers, if any, of the holders of any series of Preferred
Stock generally or with respect to any particular matter, which may be less
than, equal to or greater than one vote per share, and which may, without
limiting the generality of the foregoing, include the right, voting as a series
by itself or together with the holders of any other series of Preferred Stock or
all series of Preferred Stock as a class, to elect one or more directors of the
Corporation generally or under such specific circumstances and on such
conditions as shall be provided in the resolution or resolutions of the Board
adopted pursuant hereto, including, without limitation, in the event there shall
have been a default in the payment of dividends on or redemption of any one or
more series of Preferred Stock.
3
<PAGE>
Section B. Rights of Preferred Stock.
-------------------------
1. After the provisions with respect to preferential dividends on any
series of Preferred Stock (fixed in accordance with the provisions of Section
(A) of this Article VI), if any, shall have been satisfied and after the
Corporation shall have complied with all the requirements, if any, with respect
to redemption of, or the setting aside of sums as sinking funds or redemption or
purchase accounts with respect to, any series of Preferred Stock (fixed in
accordance with the provisions of Section (A) of this Article VI), and subject
further to any other conditions that may be fixed in accordance with the
provisions of Section (A) of this Article VI, then and not otherwise the holders
of Common Stock shall be entitled to receive such dividends as may be declared
from time to time by the Board.
2. In the event of the voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, after distribution in full of the preferential
amounts, if any (fixed in accordance with the provisions of Section (A) of this
Article VI), to be distributed to the holders of Preferred Stock by reason
thereof, the holders of Common Stock shall, subject to the additional rights, if
any (fixed in accordance with the provisions of Section (A) of this Article VI),
of the holders of any outstanding shares of Preferred Stock, be entitled to
receive all of the remaining assets of the Corporation, tangible or intangible,
of whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them respectively.
3. Except as may otherwise be required by law, and subject to the
provisions of such resolution or resolutions as may be adopted by the Board
pursuant to Section (A) of this Article VI granting the holders of one or more
series of Preferred Stock exclusive voting powers with respect to any matter,
each holder of Common Stock may have one vote in respect to each share of Common
Stock held on all matters voted upon by the stockholders.
4. The number of authorized shares of Preferred Stock and each class of
Common Stock may, without a class or series vote, be increased or decreased from
time to time by the affirmative vote of the holders of shares having a majority
of the total number of votes which may be cast in the election of directors of
the Corporation by all stockholders entitled to vote in such an election, voting
together as a single class.
The Certificate of Designations with respect to the Corporation's Series A
Junior Participating Preferred Stock, as filed with the Secretary of State of
the State of Delaware on February 28, 1996 and attached hereto as Annex A, is
hereby incorporated by reference herein and made a part hereof.
4
<PAGE>
ARTICLE VII
BY-LAWS
The Board is expressly authorized to adopt, amend or repeal the By-laws of
the Corporation.
ARTICLE VIII
ELECTION OF DIRECTORS
The directors of the Corporation shall not be required to be elected by
written ballots unless the By-laws of the Corporation so provide.
ARTICLE IX
BOARD OF DIRECTORS
Section A. Classified Board. The Board, other than those directors
----------------
elected by the holders of any series of Preferred Stock as provided for or fixed
pursuant to the provisions of Article VI hereof, 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.
Section B. Vacancies. Except as otherwise provided for or fixed pursuant
---------
to the provisions of Article VI hereof relating to 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 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. 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
5
<PAGE>
shall have been duly elected and qualified. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent
director.
Section C. Directors Elected by Holders of Preferred Stock. During any
-----------------------------------------------
period when the holders of any series of Preferred Stock have the right to elect
additional directors as provided for or fixed pursuant to the provisions of
Article VI hereof, then upon commencement and for the duration of the period
during which such right continues (i) the then otherwise total authorized number
of directors of the Corporation shall automatically be increased by such
specified number of directors, and the holders of such Preferred Stock shall be
entitled to elect the additional directors so provided for or fixed pursuant to
such provisions, and (ii) each such additional director shall serve until such
director's successor shall have been duly elected and qualified, or until such
director's right to hold such office terminates pursuant to such provisions,
whichever occurs earlier. Except as otherwise provided by the Board in the
resolution or resolutions establishing such series, whenever the holders of any
series of Preferred Stock having such right to elect additional directors are
divested of such right pursuant to the provisions of such stock, the terms of
office of all such additional directors elected by the holders of such stock, or
elected to fill any vacancies resulting from death, resignation,
disqualification or removal of such additional directors, shall forthwith
terminate and the total and authorized number of directors of the Corporation
shall be reduced accordingly. Notwithstanding the foregoing, whenever, pursuant
to the provisions of Article VI hereof, the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a series or together
with holders of other such series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of the
Restated Certificate of Incorporation and the Certificate of Designation
applicable thereto, and such directors so elected shall not be divided into
classes pursuant to this Article IX unless expressly provided by such terms.
Section D. Number of Directors Constituting the Board. The number of
------------------------------------------
directors that shall constitute the full Board, other than any directors elected
by the holders of any series of Preferred Stock as provided for or fixed
pursuant to the provisions of Article VI hereof, shall be fixed by the By-laws
of the Corporation.
ARTICLE X
NO ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
Except as otherwise provided for or fixed pursuant to the provisions of
Article VI hereof 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.
6
<PAGE>
ARTICLE XI
DIRECTOR NOMINATION PROCEDURE;
ANNUAL MEETING BUSINESS
Section A. Director Nomination Procedure. Except as otherwise provided
-----------------------------
for or fixed pursuant to the provisions of Article VI hereof relating to the
rights of the holders of any series of Preferred Stock, nominations for the
election of directors may be made by the affirmative vote of a majority of the
Board or a duly authorized committee thereof or by any holder of record of
shares of capital stock of the Corporation entitled to vote generally for the
election of directors; provided that any stockholder may nominate one or more
--------
persons for election as directors at a meeting only if written notice of such
stockholder's intention to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than (i) with respect to an election to
be held at an annual meeting of stockholders (other than the first annual
meeting of stockholders), ninety (90) days prior to the date that is one year
from the date of the immediately preceding meeting of stockholders and (ii) with
respect to an election to be held at the first annual meeting of stockholders or
at a special meeting of stockholders for the election of directors, the close of
business on the seventh day following the date on which notice of the meeting is
first given to stockholders. For the purposes of this Section (A) of this
Article XI, the date notice of a meeting is deemed to have been first given
shall include, but not be limited to, the date on which disclosure of the date
of the meeting is first made in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service, or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) (or the rules and regulations thereunder) of
the Securities Exchange Act of 1934, as amended. Each such notice to the
Secretary shall set forth the following information: (i) the name and address of
record of the stockholder who intends to make the nomination, (ii) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote generally for the election of directors at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, (iii) the name, age, business and
residential addresses and principal occupation or employment of each nominee,
(iv) a description of all arrangements or understandings between the stockholder
and each proposed nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
stockholder, (v) such other information regarding each proposed nominee as would
be required to be included in a proxy statement filed pursuant to the rules and
regulations of the Securities and Exchange Commission and (vi) the written
consent of each proposed nominee to serve as a director of the Corporation if so
elected. The Corporation may require the proposed nominee to furnish such other
information as may reasonably be required by the Corporation to determine the
eligibility of such
7
<PAGE>
proposed nominee to serve as a director of the Corporation. The presiding
officer of the meeting may, if the facts warrant, determine that a nomination
was not made in accordance with the foregoing procedure, and if such officer
should so determine, such officer shall so declare to the meeting and the
defective nomination shall be disregarded.
Section B. Annual Meeting Business. At an annual meeting of the
-----------------------
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board, (ii) otherwise properly
brought before the meeting by or at the direction of the Board or (iii)
otherwise properly brought before the meeting by a stockholder. For business to
be properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be received at the
principal executive offices of the Corporation (i) not less than sixty (60) days
in advance of such meeting if such meeting is to be held on a day which is
within thirty (30) days preceding the anniversary of the previous year's annual
meeting or ninety (90) days in advance of such meeting if such meeting is to be
held on or after the anniversary of the previous year's annual meeting, and (ii)
with respect to any other annual meeting of stockholders, on or before the close
of business on the 15th day following the date (or the first date, if there be
more than one) of public disclosure of the date of such meeting. For the
purposes of this Section (B) of this Article XI, the date of public disclosure
of a meeting shall include, but not be limited to, the date on which disclosure
of the date of the meeting is first made in a press release reported by the Dow
Jones News Service, Associated Press or comparable national news service, or in
a document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) (or the rules and regulations
thereunder) of the Securities Exchange Act of 1934, as amended. A stockholder's
notice to the Secretary of the Corporation shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name, age and
business and residential addresses, as they appear on the Corporation's records,
of the stockholder proposing such business, (iii) the class and number of shares
of the Corporation which are beneficially owned by the stockholder and (iv) any
material interest of the stockholder in such business. Notwithstanding anything
in the By-laws of the Corporation to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set
forth herein. The Chairman of the annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions hereof, and if the
Chairman should so determine, the Chairman shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted.
8
<PAGE>
ARTICLE XII
DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law or (iv)
for any transaction from which the director derived any improper personal
benefit. If the General Corporation Law is amended after the filing of this
Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law, as so amended. No modification
or repeal of the provisions of this Article XII shall adversely affect any right
or protection of any director of the Corporation existing at the date of such
modification or repeal or create any liability or adversely affect any such
right or protection for any acts or omissions of such director occurring prior
to such modification or repeal.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates and does not further amend the provisions of the
Certificate of Incorporation of the Corporation as heretofore amended or
supplemented and which has been duly adopted in accordance with Section 245 of
the General Corporation Law, as the Corporation has received payment for its
capital stock, has been executed by its Executive Vice President and Secretary
this May 13, 1998.
U.S. FOODSERVICE
By:/s/ LEWIS HAY, III
-------------------------------------
Name: Lewis Hay, III
Title: Executive Vice President
Attest:
By:/s/ DAVID M. ABRAMSON
-------------------------------------
Name: David M. Abramson
Title: Secretary
9
<PAGE>
ANNEX A
-------
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-------------------------------
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 350,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
--------
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or
<PAGE>
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject
to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
<PAGE>
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1 per share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
-------------
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in
<PAGE>
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the
<PAGE>
Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares
of any stock of the Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
<PAGE>
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
--------------------------
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
<PAGE>
any time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change
of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
----
to the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
<PAGE>
Exhibit 5.1
[MILES & STOCKBRIDGE P.C. LETTERHEAD]
December 28, 1999
U.S. Foodservice
9755 Patuxent Woods Drive
Columbia, Maryland 21046
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of 204,894 shares of common stock (the "Common Stock") of
U.S. Foodservice, a Delaware corporation, we have examined such corporate
records, certificates and documents as we deemed necessary for the purpose of
this opinion. Based on that examination, we advise you that in our opinion the
Common Stock has been duly and validly authorized and is legally issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus. In giving our consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Miles & Stockbridge P.C.
By: /s/ John B. Frisch
----------------------------------------------
Principal
