-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZRfzOTg/zgg9kFChm1V2xux/QeFe41iUtiCYcRV87g+pODzdc3EPw/YOlrkrVmJ TQgXfDLD7a5d16BkOuiZOw== 0000893877-97-000658.txt : 19971117 0000893877-97-000658.hdr.sgml : 19971117 ACCESSION NUMBER: 0000893877-97-000658 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19971114 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUALITY FOOD CENTERS INC CENTRAL INDEX KEY: 0000804333 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911330075 STATE OF INCORPORATION: WA FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-38578 FILM NUMBER: 97717616 BUSINESS ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2064622210 MAIL ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 FORMER COMPANY: FORMER CONFORMED NAME: QUALITY FOOD CENTER DATE OF NAME CHANGE: 19870726 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER INC CENTRAL INDEX KEY: 0001043273 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 911826443 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FORMER COMPANY: FORMER CONFORMED NAME: MEYER SMITH HOLDCO INC DATE OF NAME CHANGE: 19970730 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. __)* Quality Food Centers, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.001 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 747565109 ------------------------------ (CUSIP Number) Roger A. Cooke, Senior Vice President Fred Meyer, Inc. 3800 SE 22nd Avenue Portland, Oregon 97242 (503) 232-8844 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 6, 1997 ------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 6 SCHEDULE 13D ------------ CUSIP No. 747565109 Page 2 of 6 Pages 1) Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person: Fred Meyer, Inc. 91-1826443 -------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] 3) SEC Use Only _____________________________________________________________ 4) Source of Funds OO -------------------------------------------------------------------------- 5) Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6) Citizenship or Place of Organization Delaware -------------------------------------------------------------------------- 7) Sole Voting Power -------------------------------------------------- Number 8) Shared Voting Power of Shares 5,473,982** Beneficially -------------------------------------------------- Owned by Each 9) Sole Dispositive Power Reporting Person With -------------------------------------------------- 10) Shared Dispositive Power 5,473,982** -------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 5,473,982** -------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] 13) Percent of Class Represented by Amount in Row (11) 26.1% -------------------------------------------------------------------------- 14) Type of Reporting Person* CO -------------------------------------------------------------------------- 2 of 6 Item 1. Security and Issuer This Statement relates to shares of Common Stock, $0.001 par value ("Common Stock"), of Quality Food Centers, Inc., a corporation organized under the laws of Washington ("QFC"). QFC's principal executive offices are located at 10112 N.E. 10th Street, Bellevue, Washington 98004. Item 2. Identity and Background This Statement is filed by Fred Meyer, Inc., a corporation organized under the laws of Delaware ("Fred Meyer"), whose business address is 3800 SE 22nd Avenue, Portland, Oregon 97202. Fred Meyer's principal business is retailing a wide range of food, apparel, fine jewelry and products for the home. During the past five years, Fred Meyer has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), nor has it been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Set forth below are the names, principal occupations and business addresses of the executive officers and directors of Fred Meyer. Each executive officer and director is a citizen of the United States of America. During the past five years, none of the executive officers or directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Executive Officers of Fred Meyer: Name Position with Fred Meyer - ---- ------------------------ Robert G. Miller President and Chief Executive Officer Sammy K. Duncan Executive Vice President, Food Group Kenneth Thrasher Executive Vice President and Chief Administrative Officer Mary F. Sammons Executive Vice President, Apparel, PEM and Home Group Roger A. Cooke Senior Vice President, Director of Legal Group and General Counsel and Secretary David R. Jessick Senior Vice President, Director of Finance Group and Chief Financial Officer The business address of each executive officer is 3800 SE 22nd Avenue, Portland, Oregon 97202. Directors of Fred Meyer: Principal Occupation, Address of Employer and Business Name Address of Director - ---- ------------------- Ronald W. Burkle General Partner, The Yucaipa Companies 10000 Santa Monica Boulevard, Fifth Floor, Los Angeles, California 90067 Robert G. Miller* President and Chief Executive Officer, Fred Meyer, Inc. Vivian A. Bull President, Linfield College 900 S.E. Baker Street, McMinnville, Oregon 97128-6894 3 of 6 James J. Curran* Retired Chairman of the Board and Chief Executive Officer of First Interstate Bank, Northwest Region A. M. Gleason* Retired Chief Executive Officer of PacifiCorp Roger S. Meier President, AMCO, Inc. 1211 SW Fifth Avenue, Ste. 2900, Portland, Oregon 97204 Steven R. Rogel President and Chief Executive Officer, Willamette Industries, Inc. 1300 S.W. Fifth Avenue, Suite 3800, Portland, Oregon 97201 John G. King President and Chief Executive Officer, Legacy Health System 1919 NW Lovejoy, Portland, Oregon 97209 Bruce Karatz Chairman of the Board, President and Chief Executive Officer, Kaufman and Broad Home Corporation 10990 Wilshire Boulevard, Seventh Floor, Los Angeles, California 90024 Fred L. Smith Retired President of Fred Smith's Honda Automobiles of Palm Springs and Retired President of Fred Smith's Jaguar/Rolls Royce of Rancho Mirage 2000 Strada Mia, Las Vegas, Nevada 89117 Jeffrey P. Smith Retired Chairman of the Board and Chief Executive Officer of Smith's Food & Drug Centers, Inc. 32 Burning Tree Court, Las Vegas, Nevada 89113 * Business address is 3800 SE 22nd Avenue, Portland, OR 97202 Item 3. Source and Amount of Funds or Other Consideration See Item 4 below. Item 4. Purpose of Transaction On November 6, 1997, QFC, Fred Meyer and Q-Acquisition Corp., a Washington corporation and wholly-owned subsidiary of Fred Meyer ("Q-Acquisition"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), a copy of which is attached hereto as Exhibit 7.3 and incorporated by reference herein. Pursuant to the terms of the Merger Agreement, Q-Acquisition would merge with and into QFC (the "Merger"), subject to certain conditions being satisfied or waived. Pursuant to the Merger Agreement, each outstanding share of QFC Common Stock, $.001 par value, would be converted into the right to receive the greater of either (i) 1.9 shares of Fred Meyer common stock, $.01 par value ("Fred Meyer Common Stock"), or (ii) the lesser of (A) 2.3 shares of Fred Meyer Common Stock or (B) a number of shares equal to $55 divided by the average closing price of the Fred Meyer Common Stock on the New York Stock Exchange for 15 out of the 35 trading days ending on the second trading day preceding the effective date of the Merger, subject to certain adjustments if any divestitures are required under the antitrust laws. Conditions to the consummation of the Merger include the receipt of regulatory approvals and approval by the shareholders of Fred Meyer and QFC. Also on November 6, 1997, Fred Meyer entered into Shareholders Agreements (the "Shareholders Agreements") with certain shareholders of QFC ("Shareholders"), pursuant to which, in consideration of the covenants and agreements of Fred Meyer contained therein and in the Agreement, and as an inducement to Fred Meyer to enter into the Merger Agreement, Shareholders agreed to vote at any meeting of QFC shareholders all of Shareholders' shares of QFC's voting securities (i) in favor of approving the Merger Agreement and the transactions contemplated thereby, (ii) against any other merger agreement or merger, consolidation, combination, dissolution, liquidation or winding up by QFC, or any other acquisition proposal, and (iii) against any amendment to QFC's certificate of incorporation or bylaws or other proposal or transaction that would in any 4 of 6 manner impede, frustrate, prevent, or nullify the Merger. The Shareholders Agreements also impose restrictions upon the transfer of the shares, options and warrants subject to the Shareholders Agreements. The Shareholders Agreements will terminate upon the earlier of (a) the date on which the Merger Agreement terminates, (b) the date on which QFC's Board of Directors withdraws, modifies or amends its approval or recommendation of the Merger Agreement, the Merger or any of the transactions contemplated by the Merger Agreement in such a way as to be adverse to Fred Meyer or Q-Acquisition or (c) the effective time of the Merger. Copies of the Shareholders Agreements are included as Exhibits 7.1 and 7.2 to this Schedule 13D and are specifically incorporated herein by reference. The foregoing summaries of the Merger Agreement and the Shareholders Agreements are qualified in their entirety by reference to the full agreements which are filed as exhibits. Other than the transactions contemplated by the Merger Agreement and Shareholders Agreements, Fred Meyer has no plans or proposals required to be disclosed in this Item 4. Item 5. Interest in Securities of the Issuer (a) - (c) By reason of the Shareholders Agreements, Fred Meyer may be deemed to be the beneficial owner of 5,473,982 shares (the "Shares") of QFC Common Stock. Fred Meyer disclaims beneficial ownership of the Shares. The Shares represent approximately 26.1% of the outstanding shares of QFC Common Stock. Except as described in this Schedule 13D, neither Fred Meyer nor, to the best knowledge of Fred Meyer, any of the persons listed in Item 2 above beneficially owns any shares of QFC Common Stock. Except as described in this Schedule 13D, neither Fred Meyer nor, to the best of its knowledge, any of the persons listed in Item 2 above has effected any transactions in QFC Common Stock during the past 60 days. By virtue of the limited nature of the Shareholders Agreements, Fred Meyer expressly disclaims beneficial ownership of the Shares. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer See Item 4 with respect to the Merger Agreement and the Shareholder Agreements. Item 7. Material to be Filed as Exhibits The following agreements are filed as exhibits: 7.1 Shareholders Agreement dated as of November 6, 1997 between Fred Meyer, Inc. and Stuart M. Sloan. 7.2 Shareholders Agreement dated as of November 6, 1997 between Fred Meyer, Inc. and Zell/Chilmark Fund L.P. 7.3 Agreement and Plan of Merger by and among Quality Food Centers, Inc., Fred Meyer, Inc. and Q-Acquisition Corp., dated November 6, 1997. (Incorporated by reference to Exhibit 99.1 of Fred Meyer, Inc.'s Form 8-K (File No. 1-13339) filed November 13, 1997). 5 of 6 Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: November 13, 1997 FRED MEYER, INC. By: THOMAS R. HUGHES ------------------------------------- Thomas R. Hughes Vice President and Controller 6 of 6 EXHIBIT INDEX Sequential Exhibit No. Description Page No. - ----------- ----------- -------- 7.1 Shareholders Agreement dated as of November 6, 1997 between Fred Meyer, Inc. and Stuart M. Sloan. 7.2 Shareholders Agreement dated as of November 6, 1997 between Fred Meyer, Inc. and Zell/Chilmark Fund L.P. 7.3 Agreement and Plan of Merger by and among Quality Food Centers, Inc., Fred Meyer, Inc. and Q-Acquisition Corp., dated November 6, 1997. (Incorporated by reference to Exhibit 99.1 of Fred Meyer, Inc.'s Form 8-K (File No. 1-13339) filed November 13, 1997). EX-7.1 2 SLOAN SHAREHOLDERS AGREEMENT SHAREHOLDERS AGREEMENT, dated as of November 6, 1997, between FRED MEYER, INC., a Delaware corporation ("Parent"), and Stuart M. Sloan ("Shareholder"). WHEREAS, Parent, Q-Acquisition Corp., a Washington corporation and a wholly owned subsidiary of Parent ("Sub"), and Quality Food Centers, Inc., a Washington corporation (the "Company"), propose to enter into an Agreement and Plan of Merger dated as of the date hereof (as the same may be amended or supplemented, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement) providing for the merger of Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth in the Merger Agreement; WHEREAS, Shareholder owns 1,498,982 shares of Common Stock, par value $.001 per share, of the Company (the "Company Common Stock") (such shares of Company Common Stock, together with any other shares of capital stock of the Company acquired by such Stockholder after the date hereof and during the term of this Agreement, being collectively referred to herein as the "Subject Shares"); and WHEREAS, as a condition to its willingness to enter into the Merger Agreement, Parent has requested that Shareholder enter into this Agreement; NOW, THEREFORE, to induce Parent to enter into, and in consideration of its entering into, the Merger Agreement, and in consideration of the premises and the representations, warranties and agreements contained herein, the parties agree as follows: 1. Representations and Warranties of Shareholder. Shareholder hereby represents and warrants to Parent as of the date hereof in respect of himself as follows: (a) Authority. The Shareholder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Shareholder and constitutes a valid and binding obligation of the Shareholder enforceable in accordance with its terms. Except for the Standstill Agreement, dated as of January 14, 1995 (the "Standstill Agreement"), by and between the Company and Shareholder (the relevant provisions of which have been waived by the Company to permit Shareholder to enter into and perform this Agreement, as set forth in the agreement between the Company and Shareholder dated November 6, 1997', the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other 2 agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to the Shareholder or to the Shareholder's property or assets. If Shareholder is married and the Shareholder's Subject Shares constitute community property or otherwise need spousal or other approval to be legal, valid and binding, this Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, the Shareholder's spouse, enforceable against such spouse in accordance with its terms. No trust of which Shareholder is a trustee requires the consent of any beneficiary to the execution and delivery of this Agreement or to the consummation of the transactions contemplated hereby. (b) The Subject Shares. The Shareholder is the record and beneficial owner of, and has good and marketable title to, the Subject Shares, free and clear of any Encumbrances. The Shareholder does not own, of record or beneficially, any shares of capital stock of the Company other than the Subject Shares. The Shareholder has the sole right to vote, and the sole power of disposition with respect to, such Subject Shares, and none of such Subject Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting or disposition of such Subject Shares, except for the Standstill Agreement and except as contemplated by this Agreement. 2. Representations and Warranties of Parent. Parent hereby represents and warrants to Shareholder that Parent has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly executed and delivered by Parent and constitutes a valid and binding obligation of Parent enforceable in accordance with its terms. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or by-laws of Parent, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to Parent or to Parent's property or assets. 3. Covenants of Shareholder. Until the termination of this Agreement in accordance with Section 7, Shareholder agrees as follows: 3 (a) At any meeting of shareholders of the Company called to vote upon the Merger and the Merger Agreement or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval with respect to the Merger and the Merger Agreement is sought, the Shareholder shall be present (in person or by proxy) and shall vote (or cause to be voted) the Subject Shares in favor of the Merger, the adoption by the Company of the Merger Agreement and the approval of the terms thereof and each of the other transactions contemplated by the Merger Agreement. (b) At any meeting of shareholders of the Company or at any adjournment thereof or in any other circumstances upon which the Shareholder's vote, consent or other approval is sought, the Shareholder shall vote (or cause to be voted) the Subject Shares against (i) any merger agreement or merger (other than the Merger Agreement and the Merger), consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding-up of or by the Company or any other takeover proposal (collectively, "Takeover Proposal") or (ii) any amendment of the Company's certificate of incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries, which amendment or other proposal or transaction would in any manner impede, frustrate, prevent or nullify the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement or change in any manner the voting rights of any class of capital stock of the Company. The Shareholder further agrees not to commit or agree to take any action inconsistent with the foregoing. (c) Except as provided in the immediately succeeding sentence of this Section 3(c), the Shareholder agrees not to (i) sell, transfer, pledge, assign or otherwise dispose of (including by gift) (collectively, "Transfer"), or enter into any contract, option or other arrangement (including any profit-sharing arrangement) with respect to the Transfer of, the Subject Shares to any person other than pursuant to the terms of the Merger or (ii) enter into any voting arrangement, whether by proxy, voting agreement or otherwise, in connection with, directly or indirectly, any Takeover Proposal and agrees not to commit or agree to take any of the foregoing actions. Notwithstanding the foregoing, the Shareholder shall have the right, for estate planning purposes, to Transfer Subject Shares to a transferee only following the due execution and delivery to Parent by each transferee of a legal, valid and binding counterpart to this Agreement. (d) During the term of this Agreement, the Shareholder shall not, nor shall he permit any of his affiliates or any director, officer, employee, investment banker, attorney or 4 other adviser or representative of the Shareholder to, (i) directly or indirectly solicit, initiate or encourage the submission of, any Takeover Proposal or (ii) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any Takeover Proposal. Notwithstanding the foregoing provisions of this Section 3(d), Shareholder and all other persons described in the first sentence of this Section 3(d), shall be entitled to take all actions and to exercise all rights with respect to any Transaction as the Company may take or exercise pursuant to Section 5.4 of the Merger Agreement; provided, that the Company, in connection with such actions and the exercise of such rights, complies with Section 5.4 of the Merger Agreement. (e) Until after the Merger is consummated or the Merger Agreement is terminated, the Shareholder shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by the Merger Agreement. 4. Affiliate Letter; Tax Certificates. Shareholder shall execute and deliver the agreement contemplated by the last sentence of Section 5.11(a) of the Merger Agreement and, if requested by tax counsel of Parent or for the Company in connection with the rendering of the tax opinions contemplated by the Merger Agreement, a tax certificate substantially in the form attached hereto as Exhibit A. 5. Further Assurances. Shareholder will, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as Parent may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement. 6. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 7. Termination. This Agreement shall terminate upon the earlier of (a) the termination of the Merger Agreement, (b) the withdrawal, modification or amendment by the Board of Directors of the Company in any respect adverse to Parent or Sub 5 of its approval or recommendation of the Merger Agreement, the Merger or any of the transactions contemplated by the Merger Agreement or (c) the Effective Time. 8. Waiver of Appraisal and Dissenter's Rights. Until the termination of this Agreement in accordance with Section 7, Shareholder hereby waives and agrees not to exercise any rights of appraisal or rights to dissent from the Merger that Shareholder may have with respect to Shareholder's Subject Shares. 9. General Provisions. (a) Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto. (b) Notice. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to Parent in accordance with Section 8.2 of the Merger Agreement and to the Shareholders at their respective addresses set forth on Schedule A attached hereto (or at such other address for a party as shall be specified by like notice). (c) Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". (d) Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when two or more of the counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart. (e) Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and instruments referred to herein) (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 6 (f) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. 10. Shareholder Capacity. No person executing this Agreement who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding herein in his capacity as such director or officer. Shareholder signs solely in his capacity as the record holder and beneficial owner of Shareholder's Subject Shares and nothing herein shall limit or affect any actions taken by a Shareholder in his or her capacity as an officer or director of the Company to the extent specifically permitted by the Merger Agreement. 11. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of Delaware or in a Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit such party to the personal jurisdiction of any Federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the transactions contemplated hereby, (ii) agrees that such party will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (iii) agrees that such party will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than a Federal court sitting in the state of Delaware or a Delaware state court and (iv) waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby. 7 IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by its officer thereunto duly authorized and the Shareholder has signed this Agreement, all as of the date first written above. FRED MEYER, INC. By: KENNETH THRASHER ------------------------------------- Name: Kenneth Thrasher Title: EVP Shareholder: STUART M. SLOAN ----------------------------------------- Name: Stuart M. Sloan EX-7.2 3 ZELL SHAREHOLDERS AGREEMENT SHAREHOLDERS AGREEMENT, dated as of November 6, 1997, between FRED MEYER, INC., a Delaware corporation ("Parent"), and Zell/Chilmark Fund L.P. ("Shareholder"). WHEREAS, Parent, Q-Acquisition Corp., a Washington corporation and a wholly owned subsidiary of Parent ("Sub"), and Quality Food Centers, Inc., a Washington corporation (the "Company"), propose to enter into an Agreement and Plan of Merger dated as of the date hereof (as the same may be amended or supplemented, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement) providing for the merger of Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth in the Merger Agreement; WHEREAS, Shareholder owns 3,975,000 shares of Common Stock, par value $.001 per share, of the Company (the "Company Common Stock") (such shares of Company Common Stock, together with any other shares of capital stock of the Company acquired by such Stockholder after the date hereof and during the term of this Agreement, being collectively referred to herein as the "Subject Shares"); and WHEREAS, as a condition to its willingness to enter into the Merger Agreement, Parent has requested that Shareholder enter into this Agreement; NOW, THEREFORE, to induce Parent to enter into, and in consideration of its entering into, the Merger Agreement, and in consideration of the premises and the representations, warranties and agreements contained herein, the parties agree as follows: 1. Representations and Warranties of Shareholder. Shareholder hereby represents and warrants to Parent as of the date hereof in respect of itself as follows: (a) Authority. The Shareholder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Shareholder and constitutes a valid and binding obligation of the Shareholder enforceable in accordance with its terms. Except for the Standstill Agreement, dated as of January 14, 1995 (the "Standstill Agreement"), by and between the Company and Shareholder (the relevant provisions of which have been waived by the Company to permit Shareholder to enter into and perform this Agreement, as set forth in the agreement between the Company and Shareholder dated November 6, 1997', the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) 2 under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to the Shareholder or to the Shareholder's property or assets. (b) The Subject Shares. The Shareholder is the record and beneficial owner of, and has good and marketable title to, the Subject Shares, free and clear of any Encumbrances. The Shareholder does not own, of record or beneficially, any shares of capital stock of the Company other than the Subject Shares. The Shareholder has the sole right to vote, and the sole power of disposition with respect to, such Subject Shares, and none of such Subject Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting or disposition of such Subject Shares, except for the Standstill Agreement and except as contemplated by this Agreement. 2. Representations and Warranties of Parent. Parent hereby represents and warrants to Shareholder that Parent has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly executed and delivered by Parent and constitutes a valid and binding obligation of Parent enforceable in accordance with its terms. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or by-laws of Parent, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to Parent or to Parent's property or assets. 3. Covenants of Shareholder. Until the termination of this Agreement in accordance with Section 7, Shareholder agrees as follows: (a) At any meeting of shareholders of the Company called to vote upon the Merger and the Merger Agreement or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval with respect to the Merger and the Merger Agreement is sought, the Shareholder shall be present (in person or by proxy) and shall vote (or cause to be voted) the Subject Shares in favor of the Merger, the adoption by the Company of the Merger Agreement and the approval of the terms thereof and 3 each of the other transactions contemplated by the Merger Agreement. (b) At any meeting of shareholders of the Company or at any adjournment thereof or in any other circumstances upon which the Shareholder's vote, consent or other approval is sought, the Shareholder shall vote (or cause to be voted) the Subject Shares against (i) any merger agreement or merger (other than the Merger Agreement and the Merger), consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding-up of or by the Company or any other takeover proposal (collectively, "Takeover Proposal") or (ii) any amendment of the Company's certificate of incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries, which amendment or other proposal or transaction would in any manner impede, frustrate, prevent or nullify the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement or change in any manner the voting rights of any class of capital stock of the Company. The Shareholder further agrees not to commit or agree to take any action inconsistent with the foregoing. (c) Except as provided in the immediately succeeding sentence of this Section 3(c), the Shareholder agrees not to (i) sell, transfer, pledge, assign or otherwise dispose of (including by gift) (collectively, "Transfer"), or enter into any contract, option or other arrangement (including any profit-sharing arrangement) with respect to the Transfer of, the Subject Shares to any person other than pursuant to the terms of the Merger or (ii) enter into any voting arrangement, whether by proxy, voting agreement or otherwise, in connection with, directly or indirectly, any Takeover Proposal and agrees not to commit or agree to take any of the foregoing actions. (d) During the term of this Agreement, the Shareholder shall not, nor shall it permit any of its affiliates or any director, officer, employee, investment banker, attorney or other adviser or representative of the Shareholder to, (i) directly or indirectly solicit, initiate or encourage the submission of, any Takeover Proposal or (ii) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any Takeover Proposal. Notwithstanding the foregoing provisions of this 4 Section 3(d), Shareholder and all other persons described in the first sentence of this Section 3(d), shall be entitled to take all actions and to exercise all rights with respect to any Transaction as the Company may take or exercise pursuant to Section 5.4 of the Merger Agreement; provided, that the Company, in connection with such actions and the exercise of such rights, complies with Section 5.4 of the Merger Agreement. (e) Until after the Merger is consummated or the Merger Agreement is terminated, the Shareholder shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by the Merger Agreement. 4. Affiliate Letter. Shareholder shall execute and deliver the agreement contemplated by the last sentence of Section 5.11(a) of the Merger Agreement. 5. Further Assurances. Shareholder will, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as Parent may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement. 6. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 7. Termination. This Agreement shall terminate upon the earlier of (a) the termination of the Merger Agreement, (b) the withdrawal, modification or amendment by the Board of Directors of the Company in any respect adverse to Parent or Sub of its approval or recommendation of the Merger Agreement, the Merger or any of the transactions contemplated by the Merger Agreement or (c) the Effective Time. 8. Waiver of Appraisal and Dissenter's Rights. Until the termination of this Agreement in accordance with Section 7, Shareholder hereby waives and agrees not to exercise any rights of appraisal or rights to dissent from the Merger that 5 Shareholder may have with respect to Shareholder's Subject Shares. 9. General Provisions. (a) Amendments. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto. (b) Notice. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to Parent in accordance with Section 8.2 of the Merger Agreement and to the Shareholders at their respective addresses set forth on Schedule A attached hereto (or at such other address for a party as shall be specified by like notice). (c) Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". (d) Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when two or more of the counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart. (e) Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and instruments referred to herein) (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. (f) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. 10. Shareholder Capacity. No designee of Shareholder who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding herein in its 6 capacity as such director or officer. Shareholder signs solely in his capacity as the record holder and beneficial owner of Shareholder's Subject Shares and nothing herein shall limit or affect any actions taken by any designee of Shareholder in his or her capacity as an officer or director of the Company to the extent specifically permitted by the Merger Agreement. 11. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of Delaware or in a Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit such party to the personal jurisdiction of any Federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the transactions contemplated hereby, (ii) agrees that such party will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (iii) agrees that such party will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than a Federal court sitting in the state of Delaware or a Delaware state court and (iv) waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby. 7 IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by its officer thereunto duly authorized and the Shareholder has signed this Agreement, all as of the date first written above. FRED MEYER, INC. By: KENNETH THRASHER ------------------------------------- Name: Kenneth Thrasher Title: EVP Shareholder: ZELL/CHILMARK FUND L.P. By: ZC Limited Partnership, general partner By: ZC Partnership, general partner By: ZC Inc., general partner By: SHELI Z. ROSENBERG ------------------------------------- Name: Sheli Z. Rosenberg Title: V.P. -----END PRIVACY-ENHANCED MESSAGE-----