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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 1, 1994
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 1-41
SAFEWAY INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3019135
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
Fourth and Jackson Streets
Oakland, California 94660
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, (510) 891-3000
including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
Common Stock, $0.01 par New York Stock Exchange
value per share
Warrants to purchase Common New York Stock Exchange
Stock
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
(Cover continued on following page)
2
(Cover continued from previous page)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K ___.
Aggregate market value of the voting stock held by non-
affiliates of Registrant as of March 15 1994, was $887
million.
As of March 15, 1994, there were issued and outstanding
102,164,599 shares of the Registrant's common stock.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference to the
extent specified herein:
Document Description 10-K Part
-------------------- ---------
1993 Annual Report to Stockholders I, II, III, IV
1994 Proxy Statement dated March 29, 1994 III
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SAFEWAY INC. AND SUBSIDIARIES
PART I
Item 1. Business and Item 2. Properties
General:
Information appearing under the caption "Company in Review"
beginning on page 10 of the Company's 1993 Annual Report to
Stockholders is incorporated herein by this reference.
Retail Operations:
Information appearing under the caption "Retail Operations"
on pages 10 and 11 of the Company's 1993 Annual Report to
Stockholders is incorporated herein by this reference.
Manufacturing and Wholesale Operations:
Information appearing under the caption "Manufacturing and
Wholesale Operations" on page 11 of the Company's 1993
Annual Report to Stockholders is incorporated herein by this
reference.
Various agricultural commodities constitute the principal
raw materials used by the Company in the manufacture of its
food products. The Company's non-food products are
manufactured from a wide variety of minerals, chemicals,
fabrics, plastics, and metals. Management believes that raw
materials for its products are not in short supply, and all
are readily available from a wide variety of independent
suppliers.
Capital Expenditures:
Information appearing under the caption "Capital Expenditure
Program" on page 11 of the Company's 1993 Annual Report to
Stockholders is incorporated herein by this reference.
Safeway's new stores, remodels, and closures during the last
five years were as follows:
Total
Five
Years 1993 1992 1991 1990 1989
----- ---- ---- ---- ---- ----
New stores:
New locations 55 8 12 9 19 7
Replacements 90 6 23 24 11 26
--- ----- ----- ----- ----- -----
145 14 35 33 30 33
--- ----- ----- ----- ----- -----
--- ----- ----- ----- ----- -----
Remodels:
Expansions 104 27 23 22 11 21
"Four-Wall" remodels 306 18 40 55 79 114
--- ----- ----- ----- ----- -----
410 45 63 77 90 135
--- ----- ----- ----- ----- -----
--- ----- ----- ----- ----- -----
Closures 211 39 49 37 26 60
Stores at year-end 1,078 1,103 1,117 1,121 1,117
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SAFEWAY INC. AND SUBSIDIARIES
Item 1. Business and Item 2. Properties (continued)
Financial Information About Industry Segments:
This information is omitted because the Company has no
significant lines of business or industry segments except
the principal business of operating retail supermarkets.
Trademarks:
The Company has invested significantly in the development
and protection of the "Safeway" name. The right to use the
"Safeway" name is considered to be an important asset.
Safeway also owns approximately 100 other trademarks
registered in the United States Patent and Trademark Office,
including its product line names such as Lucerne, Bel-air,
TownHouse, and SELECT. Each trademark registration is for
an initial period of 20 years and is renewable for as long
as the use of the trademark continues. Safeway considers
certain of its trademarks to be of material importance to
its business and actively defends and enforces such
trademarks. Safeway has also registered certain of its
trademarks in Canada.
Working Capital:
At year-end 1993, working capital deficit was composed of
$1.5 billion of current assets and $1.7 billion of current
liabilities. Normal operating fluctuations in these
substantial balances can result in changes to cash flow from
operations presented in the Consolidated Statements of Cash
Flows that are not necessarily indicative of long-term
operating trends; however, during 1993 Safeway significantly
increased cash flow from operations through improved working
capital management. There are no unusual industry practices
or requirements relating to working capital items.
Competition:
Food retailing is intensely competitive. The number of
competitors and the amount of competition experienced by
Safeway's stores vary by market area. The principal
competitive factors that affect the Company's business are
location, quality, service, price and consumer loyalty to
other brands and stores.
Local, regional, and national food chains as well as
independent food stores and markets comprise the principal
competition, although Safeway also faces substantial
competition from convenience stores, liquor retailers,
membership warehouse clubs, specialty retailers, and large-
scale drug and pharmaceutical chains. Safeway and its
competitors engage in price competition which, from time to
time, has adversely affected operating margins in many of
its markets.
Through year-end 1992, new store openings by competitors
with labor costs substantially below Safeway's were
threatening the Company's long-term viability in its
Alberta, Canada division. This competitive wage disparity
was significantly reduced during the first quarter of 1993,
when retail employees in the Alberta division approved a new
contract which reduced wages, established a gain-sharing
plan, and provided for a voluntary buyout program. Several
weeks before employees approved the new contract, Safeway
dramatically reduced prices in the Alberta division. The
savings that Safeway began realizing in the second quarter
of 1993 from the new labor contract were offset through the
third quarter by the increased training costs and reduced
productivity associated with the new employees. By the
fourth quarter, the Alberta division had improved
productivity.
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SAFEWAY INC. AND SUBSIDIARIES
Item 1. Business and Item 2. Properties (continued)
Compliance with Environmental Laws:
The Company's compliance with the federal, state, and local
provisions, which have been enacted or adopted regulating
the discharge of materials into the environment, or
otherwise relating to the protection of the environment, has
not had and is not expected to have a material adverse
effect upon the capital expenditures, earnings or
competitive position of the Company.
Employees:
At year-end 1993, the Company had approximately 105,900 full
and part-time employees. Approximately 90% of the Company's
employees are covered by collective bargaining agreements
negotiated with local unions affiliated with one of 13
different international unions. There are approximately 575
such agreements, typically having three-year terms, with
some agreements having terms up to five years. The Company
renegotiates a significant number of these agreements every
year. While the Company believes that its relationship with
its employees is good, work stoppages that could result from
failure to renew contracts covering a significant number of
employees could have an adverse effect on Safeway's
operations.
Financial Information About Foreign and Domestic Operations
and Export Sales:
Note K to the consolidated financial statements, included on
page 35 of the Company's 1993 Annual Report to Stockholders
and incorporated herein by this reference, contains financial
information by geographic area. At year-end 1993, the Company's
foreign operations were composed of retail grocery, manufacturing,
and wholesale operations in Canada and a 49% equity investment
in Casa Ley, S.A. de C.V. ("Casa Ley"), a Mexican company. Other
than the competitive nature of the retail food business, the Company
is not aware of anyother significant risks of operating in these
foreign countries.
Casa Ley had total assets of $365.5 million and $294.5
million as of September 30, 1993 and 1992, respectively,
based on financial information provided by Casa Ley.
According to Casa Ley's financial statements, sales and net
income were $925.8 million and $39.5 million, respectively,
for the 12 months ended September 30, 1993, and $752.7
million and $33.8 million for the 12 months ended September
30, 1992.
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SAFEWAY INC. AND SUBSIDIARIES
Item 1. Business and Item 2. Properties (continued)
Terms of Outstanding Indebtedness:
Information appearing in Note B to the consolidated
financial statements on pages 25 through 27 of the Company's
1993 Annual Report to Stockholders is incorporated herein by
this reference.
The following description of the Bank Credit Agreement and
the Working Capital Credit Agreement (the "Bank Agreements")
and the indentures related to the 9.35% Senior Subordinated
Notes due 1999, the 9.65% Senior Subordinated Debentures due
2004, the 9.875% Senior Subordinated Debentures due 2007 and
the 10% Senior Subordinated Notes due 2001 (collectively,
the "Notes and Debentures"), the 9.30% Senior Secured
Debentures due 2007 (the "9.30% Senior Debentures") and the
10% Senior Notes due 2002 (the "10% Senior Notes") does not
purport to be complete and is subject to and qualified in
its entirety by reference to the Bank Agreements and such
indentures, which have been filed with the Commission.
Capitalized terms used herein which are not otherwise
defined shall have the meanings assigned to them in the
definitive agreements and instruments governing such
indebtedness.
Negative covenants contained in the Bank Agreements prohibit
the Company from paying cash dividends on its capital stock
and restrict the ability of the Company and, in some cases,
its subsidiaries, to, among other things: (i) incur debt,
(ii) incur liens, (iii) make investments or enter into joint
ventures, (iv) incur or create contingent obligations, (v)
make distributions on or redemptions of its capital stock,
(vi) make capital expenditures, (vii) prepay or repay
subordinated indebtedness, including the Notes and the
Debentures, (viii) make certain fundamental changes in
corporate structure or business activities including certain
mergers or consolidations, liquidations, dissolutions, or
disposing of material amounts of assets other than in the
ordinary course of business, (ix) incur obligations as
lessee with respect to the lease of any property, (x) become
liable in sale and leaseback transactions, (xi) sell or
discount receivables, (xii) enter into certain transactions
with shareholders and affiliates, (xiii) dispose of
subsidiary equity securities, (xiv) engage in unrelated
business activities, (xv) amend or modify the documents
governing subordinated indebtedness, and (xvi) engage in
transactions or fail to make payments which result in
penalties under ERISA.
In addition, the Bank Agreements require that the Company
meet specific financial ratio tests, including a ratio of
consolidated cash flow available for fixed charges to
consolidated fixed charges and a ratio of consolidated total
debt to consolidated capitalization.
The indentures related to the Notes and the Debentures
restrict the ability of the Company, and in some cases, its
subsidiaries, to, among other things: (i) pay cash
dividends or make other distributions on or redemptions of
its capital stock, (ii) incur debt, (iii) incur liens, (iv)
enter into transactions with stockholders and affiliates,
and (v) consolidate, merge or dispose of all or
substantially all of its assets. In particular, the
indentures limit the ability of the Company to incur debt in
certain circumstances, unless the Company meets a specified
consolidated fixed charge ratio.
Item 3. Legal Proceedings
Information about legal proceedings appearing under the
caption "Legal Matters" as reported in Note H to the
consolidated financial statements on pages 32 and 33 of the
Company's 1993 Annual Report to Stockholders is incorporated
herein by this reference.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the stockholders
during the fourth quarter of 1993.
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SAFEWAY INC. AND SUBSIDIARIES
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Company's common stock, $0.01 par value, is listed on
the New York Stock Exchange. Information as to quarterly
sales prices for the Company's common stock appears in Note
L to the consolidated financial statements on page 36 of the
Company's 1993 Annual Report to Stockholders and is
incorporated herein by this reference. There were 4,833
stockholders of record as of March 15, 1994, however,
approximately 34% of the Company's outstanding stock is held
in "street name" by depositories or nominees on behalf of
beneficial holders. The price per share of common stock was
$24.625 as of the close of business on March 15, 1994.
Holders of common stock are entitled to receive dividends
if, as, and when declared by the Board of Directors out of
funds legally available therefor, subject to the dividend
and liquidation rights of any preferred stock that may be
issued and subject to the dividend restrictions in the Bank
Agreements and the indentures relating to the Notes and
Debentures. The Bank Agreements provide that the Company
may not declare or pay any dividend or make any distribution
with respect to its common stock (other than dividends or
distributions payable in its common stock). Under the
indentures relating to the Notes and Debentures and the
9.30% Senior Debentures, the Company may declare or pay
dividends or make distributions with respect to its common
stock (other than dividends or distributions payable in its
common stock) if at the time of such payment or distribution
(i) no default or event of default under such indentures
shall have occurred and be continuing and (ii) certain
aggregate payment limitations set forth in such indentures
shall have been satisfied provided that the foregoing is not
violated by the payment of dividends up to 6% per annum of
the net proceeds received by the Company in the initial
public offering and in any subsequent public offerings of
Common Stock. Net proceeds from the 1990 initial public
offering and the 1991 public offering of Common Stock were
approximately $120 million and $340 million, respectively.
The Company has not paid dividends on common stock through
1993 and has no current plans for dividend payments.
Item 6. Selected Financial Data
The "Five-Year Summary Financial Information" included on
page 12 of the Company's 1993 Annual Report to Stockholders
is incorporated herein by this reference. The Five-Year
Summary should be read in conjunction with the Company's
consolidated financial statements and accompanying notes
included under Item 8, Consolidated Financial Statements and
Supplementary Data.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Information appearing under the caption "Financial Review"
on pages 13 through 16 and under the caption "Capital
Expenditure Program" on page 11 of the Company's 1993 Annual
Report to Stockholders is incorporated herein by this
reference.
Item 8. Consolidated Financial Statements and Supplementary
Data
Pages 17 through 41 of the Company's 1993 Annual Report to
Stockholders, which include the consolidated financial
statements, consolidated financial statement schedules,
Computation of Earnings Per Common Share and Common Share
Equivalent listed as Exhibit 11.1 to Item 14(a)3, and the
Independent Auditors' Reports as listed in Item 14(a)1 and
14(a)2.2, are incorporated herein by this reference.
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SAFEWAY INC. AND SUBSIDIARIES
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
and Compliance with Section 16(a) of the Exchange
Act
Directors of the Company. Information on the nominees for
election as Directors and the continuing Directors of the
Company, which appears under the caption "Election of
Directors" in the Company's 1994 Proxy Statement, is
incorporated herein by this reference.
Executive Officers of the Company. The names and ages of
the current executive officers of the Company and their
positions as of March 15, 1994, are set forth below. Unless
otherwise indicated, each of the executive officers served
in various managerial capacities with the Company over the
past five years. None of the executive officers named below
is related to any other executive officer or director by
blood, marriage or adoption. Officers serve at the
discretion of the Board of Directors.
Year First Elected
Name and all Positions with the Company ------------------
Held at March 15, 1994 Age Officer Present Office
- --------------------------------------- --- ------- --------------
Steven A. Burd (1) 44 1992 1992
President and Chief Executive Officer
Frithjof J. Dale 49 1982 1991
Group Vice President
Finance
Julian C. Day (2) 41 1993 1993
Executive Vice President and Chief
Financial Officer
E. Richard Jones 49 1983 1988
Executive Vice President
Supply Operations
George D. Marshall 54 1979 1979
Senior Vice President
Industrial Relations
Kenneth W. Oder (3) 46 1993 1993
Executive Vice President
Labor Relations, Human Resources,
Legal and Public Affairs
Larree M. Renda 35 1994 1994
Senior Vice President
Corporate Retail Operations
Michael C. Ross (4) 46 1993 1993
Senior Vice President
Secretary and General Counsel
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SAFEWAY AND SUBSIDIARIES
Item 10. Directors and Executive Officers of the Registrant
and Compliance with Section 16(a) of the Exchange
Act (continued)
Year First Elected
Name and all Positions with the Company ------------------
Held at March 15, 1994 Age Officer Present Office
- --------------------------------------- --- ------- --------------
Wilber L. Schinner 53 1984 1988
Senior Vice President
Director of Marketing
Richard A. Wilson 60 1988 1988
Vice President
Tax
Donald P. Wright 41 1991 1991
Senior Vice President
Real Estate and Engineering
_______________________________
(1) Previously the owner of Burd & Associates.
(2) Previously self-employed as an independent consultant.
(3) Previously a partner at the law firm of Latham & Watkins.
(4) Previously a partner at the law firm of Latham & Watkins.
Compliance with Section 16(a) of the Exchange Act. Information appearing
under the caption "Compliance with Section 16(a) of the Exchange Act" in the
Company's 1994 Proxy Statement is incorporated herein by this reference.
Item 11. Executive Compensation
Information appearing under the captions "Executive Compensation" and
"Pension Plans" in the Company's 1994 Proxy Statement is incorporated
herein by this reference. Information appearing under the captions
"Report of the Compensation and Stock Option Committee" and "Stock
Performance Graph" in the Company's 1994 Proxy Statement is not
incorporated herein by this reference.
Item 12. Security Ownership of Certain Beneficial Owners
and Management
Information appearing under the caption "Beneficial Ownership of
Securities" in the Company's 1994 Proxy Statement is incorporated herein
by this reference.
Item 13. Certain Relationships and Related Transactions
Note J to the consolidated financial statements, included on page 35 of
the Company's 1993 Annual Report to Stockholders, and the captions
"Certain Relationships and Transactions" and "Compensation Committee
Interlocks and Insider Participation" in the Company's 1994 Proxy Statement
contain information about certain relationships and related transactions
and are incorporated herein by this reference.
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SAFEWAY INC. AND SUBSIDIARIES
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) The following documents are filed as a part of this
report:
1. Consolidated Financial Statements of the Company are
incorporated by reference in PART II, Item 8:
Consolidated Statements of Income for fiscal 1993, 1992,
and 1991.
Consolidated Balance Sheets as of the end of fiscal 1993
and 1992.
Consolidated Statements of Cash Flows for fiscal 1993,
1992, and 1991.
Consolidated Statements of Stockholders' Equity for
fiscal 1993, 1992, and 1991.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
2.1 Consolidated Financial Statement Schedules of the
Company for fiscal 1993, 1992, and 1991 are incorporated
by reference in PART II, Item 8:
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation and Amortization of
Property, Plant and Equipment
Schedule IX Short-term Borrowings
2.2 Schedule II - Amounts Receivable from Related Parties
and Underwriters, Promoters, and Employees Other Than
Related Parties, and Independent Auditors' Report
thereon are included on pages 16 and 17 of this report.
3. The following exhibits are filed as part of this report:
Exhibit 3.1 Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit
3.1 to Registration Statement No. 33-33388).
Exhibit 3.2 Form of By-laws of each of the SSI Companies
except the Company (incorporated by reference to
Exhibit 3.2 to Registration Statement No. 33-9047),
Form of By-laws of the Company as amended
(incorporated by reference to Exhibit 3.2 to
Registration Statement No. 33-33388), and
Amendment to the Company's By-laws effective
March 8, 1993.
Exhibit 4(i).1 Form of Warrant Agreement between the Company
and The First National Bank of Boston as Warrant
Agent relating to Warrants to purchase shares of
common stock of the Company (incorporated by
reference to Exhibit 4.5 to Registration
Statement No. 33-9913) and Amendment to the
Warrant Agreement between the Company and The
First National Bank of Boston as Warrant Agent
relating to Warrants to purchase shares of
common stock of the Company (incorporated by
reference to Exhibit 4(i).6 to Registrant's Form
10-K for the year ended December 30, 1989).
Exhibit 4(i).2 Specimen Warrant (incorporated by reference to
Exhibit 4(i).5 to Registration Statement No. 33-33388).
Exhibit 4(i).3 Specimen Common Stock Certificate (incorporated
by reference to Exhibit 4 (i).2 to Registration
Statement No. 33-33388).
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SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K (continued)
Exhibit 4(i).4 Registration Rights Agreement dated November 25,
1986, between the Company and certain limited
partnerships (incorporated by reference to
Exhibit 4(i).4 to Registration Statement No. 33-
33388).
Exhibit 4(i).5 Indenture dated as of November 20, 1991, among
the Company and The Bank of New York, as
Trustee, relating to the Company's Senior
Subordinated Debt Securities (incorporated by
reference to Exhibit 4.1 of Registrant's Form 8-
K dated November 13, 1991).
Exhibit 4(i).6 Form of Officers' Certificate establishing the
terms of the 10% Senior Subordinated Notes due
December 1, 2001, including the form of Note
(incorporated by reference to Exhibit 4.4 of
Registrant's Form 8-K dated November 13, 1991).
Exhibit 4(i).7 Form of Officers' Certificate establishing the
terms of the 9.65% Senior Subordinated
Debentures due January 15, 2004, including the
form of Debenture (incorporated by reference to
Exhibit 4.1 of Registrant's Form 8-K dated
January 15, 1992).
Exhibit 4(i).8 Indenture dated as of February 1, 1992, between
the Company and The First National Bank of
Chicago, as Trustee, relating to the Company's
9.30% Senior Secured Debentures due 2001,
including the form of Debenture and the forms of
Deed of Trust and Environmental Indemnity
Agreement attached as exhibits thereto
(incorporated by reference to Exhibit 4.14 of
Registrant's Form 10-K for the year ended
December 28, 1991).
Exhibit 4(i).9 Indenture dated as of March 15, 1992, between
the Company and Harris Trust and Savings Bank,
as Trustee, relating to the Company's Senior
Subordinated Debt Securities (incorporated by
reference to Exhibit 4.1 of Registrant's Form 8-
K dated March 17, 1992).
Exhibit 4(i).10 Form of Officers' Certificate establishing the
terms of the 9.35% Senior Subordinated Notes due
March 15, 1999, and the 9.875% Senior
Subordinated Debentures due March 15, 2007,
including the form of Note and form of Debenture
(incorporated by reference to Exhibit 4.2 of
Registrant's Form 8-K dated March 17, 1992).
Exhibit 4(i).11 Indenture dated as of September 1, 1992, between
the Company and The Chase Manhattan Bank
(National Association), as Trustee, relating to
the Company's Debt Securities (incorporated by
reference to Exhibit 4.1 of Registrant's Form 8-
K dated September 16, 1992).
Exhibit 4(i).12 Form of Officers' Certificate relating to the
Company's Fixed Rate Medium-Term Notes and the
Company's Floating Rate Medium-Term Notes, form
of Fixed Rate Note and form of Floating Rate
Note (incorporated by reference to Exhibits 4.2,
4.3 and 4.4 of Registrant's Form 8-K dated
September 16, 1992).
Exhibit 4(i).13 Form of Officers' Certificate establishing the
terms of a separate series of Safeway Inc.'s
Medium-Term Notes entitled 10% Senior Notes due
November 1, 2002, including the form of Note
(incorporated by reference to Exhibits 4.1 and
4.2 of Registrant's Form 8-K dated November 5,
1992).
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SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K (continued)
Exhibit 4(i).14 Form of Officers' Certificate establishing the
terms of a separate series of Safeway Inc.'s
Medium-Term Notes entitled Medium-Term Notes due
June 1, 2003 (Series OPR-1), including the form
of Note (incorporated by reference to Exhibits
4.1 and 4.2 of Registrant's Form 8-K dated June
1, 1993).
Exhibit 4(i).15 Company Pledge Agreement, dated as of November
24, 1986, between the Company and Bankers Trust
Company, as collateral agent, form of First
Amendment thereto dated as of June 12, 1990, and
form of the Second Amendment thereto dated as of
November 8, 1991 (incorporated by reference to
Exhibit 4.5 of Registrant's Form 8-K dated
November 13, 1991) and Third Amendment dated as
of January 28, 1992, to Company Pledge Agreement
between the Company and Bankers Trust Company,
as collateral agent and interest rate exchanger
(incorporated by reference to Exhibit 4.3 of
Registrant's Form 8-K dated March 17, 1992).
Exhibit 4(i).16 Trademark Security Agreement and Conditional
Assignment, dated as of November 24, 1986,
between the Company and Bankers Trust Company,
as collateral agent, form of First Amendment
thereto dated as of June 12, 1990, and form of
the Second Amendment thereto dated as of
November 8, 1991, (incorporated by reference to
Exhibit 4.6 of Registrant's Form 8-K dated
November 13, 1991) and Third Amendment dated as
of January 28, 1992, to Safeway Pledge Agreement
between the Company and Bankers Trust Company,
as collateral agent and interest rate exchanger
(incorporated by reference to Exhibit 4.4 of
Registrant's Form 8-K dated March 17, 1992).
Exhibit 4(i).17 Pledge and Security Agreement, dated as of
November 26, 1986, between the Company and
Bankers Trust Company, as collateral agent, form
of First Amendment thereto dated as of June 12,
1990, and form of the Second Amendment thereto
dated as of November 8, 1991 (incorporated by
reference to Exhibit 4.7 of Registrant's Form 8-
K dated November 13, 1991) and Third Amendment
dated as of January 28, 1992, to Company Pledge
and Security Agreement (Inventory) between the
Company and Bankers Trust Company, as collateral
agent and interest rate exchanger (incorporated
by reference to Exhibit 4.5 of Registrant's Form
8-K dated March 17, 1992).
Exhibit 4(i).18 Intercreditor Agreement (Company Pledge), dated
as of November 24, 1986, among the Company,
Bankers Trust Company, as agent and collateral
agent, Harris Trust and Savings Bank and Norwest
Bank Minneapolis, N.A., and form of the First
Amendment thereto dated as of November 8, 1991
(incorporated by reference to Exhibit 4.8 of
Registrant's Form 8-K dated November 13, 1991)
and Second Amendment dated as of January 28,
1992, to Intercreditor Agreement (Company
Pledge), among the Company, Bankers Trust
Company, as agent, collateral agent and interest
rate exchanger, Harris Trust and Savings Bank,
Norwest Bank Minneapolis, N.A. and The Bank of
New York (incorporated by reference to Exhibit
4.6 of Registrant's Form 8-K dated March 17,
1992).
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SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K (continued)
Exhibit 4(i).19 Intercreditor Agreement (Substitute Collateral),
dated as of November 24, 1986, among the
Company, Bankers Trust Company, as agent and
collateral agent, Harris Trust and Savings Bank
and Norwest Bank Minneapolis, N.A., and form of
the First Amendment thereto dated as of November
8, 1991 (incorporated by reference to Exhibit
4.9 of Registrant's Form 8-K dated November 13,
1991) and Second Amendment dated as of January
28, 1992, to Intercreditor Agreement (Substitute
Collateral) among the Company, Bankers Trust
Company, as agent, collateral agent and interest
rate exchanger, Harris Trust and Savings Bank,
Norwest Bank Minneapolis, N.A. and The Bank of
New York (incorporated by reference to Exhibit
4.7 of Registrant's Form 8-K dated March 17,
1992).
Exhibit 4(i).20 Form of Second Amended and Restated Credit
Agreement dated as of June 12, 1990,
incorporating changes through the Third
Amendment dated as of August 7, 1991, the Fourth
Amendment dated November 8, 1991, and the Fifth
Amendment dated January 28, 1992, among the
Company, the banks listed therein and Bankers
Trust Company as Lead Manager and Agent
(incorporated by reference to Exhibit 4(1).19 of
Registrant's Form 10-K for the year ended
January 2, 1993).
Exhibit 4(i).21 Form of Second Amended and Restated Working
Capital Credit Agreement dated as of June 14,
1990, incorporating changes through the Third
Amendment dated as of August 7, 1991, the Fourth
Amendment dated November 8, 1991, and the Fifth
Amendment dated January 28, 1992, among the
Company, the Banks listed therein and Bankers
Trust Company as Lead Manager and Agent
(incorporated by reference to Exhibit 4(1).20 of
Registrant's Form 10-K dated January 2, 1993).
Exhibit 4(iii) Registrant agrees to provide the Securities and
Exchange Commission, upon request, copies of
instruments defining the rights of holders of
long-term debt of Registrant and all of its
subsidiaries for which consolidated financial
statements are required to be filed with the
Securities and Exchange Commission.
Exhibit 10(iii).1* Safeway Inc. Outside Director Equity Purchase
Plan (incorporated by reference to Exhibit 4.1
to Registration Statement No. 33-36753).
Exhibit 10(iii).2* Share Appreciation Rights Plan of Canada Safeway
Limited (incorporated by reference to Exhibit
10(iii).17 to Registrant's Form 10-K for the
year ended December 29, 1990) and Amendment No.
1 thereto dated December 13, 1991 (incorporated
by reference to Exhibit 10(iii).17 to
Registrant's Form 10-K for the year ended
December 28, 1991).
Exhibit 10(iii).3* Share Appreciation Rights Plan of Lucerne Foods
Ltd. (incorporated by reference to Exhibit
10(iii).18 to Registrant's Form 10-K for the
year ended December 29, 1990) and Amendment No.
1 thereto dated December 13, 1991 (incorporated
by reference to Exhibit 10(iii).18 to
Registrant's Form 10-K for the year ended
December 28, 1991).
________________________
* Management contract, or compensatory
plan or arrangement
13
14
SAFEWAY INC. AND SUBSIDIARIES
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K (continued)
Exhibit 10(iii).4* Letter Agreement dated March 24, 1993, between
the Company and Peter A. Magowan (incorporated
by reference to Exhibit 10(iii).6 to
Registrant's Form 10-Q for the quarterly period
ending June 19, 1993).
Exhibit 10(iii).5* Settlement Agreement and General Release of
Claims dated October 6, 1993, between the
Company and Robert H. Kinnie (incorporated by
reference to Exhibit 10(iii).8 to Registrant's
Form 10-Q for the quarterly period ending
September 11, 1993).
Exhibit 10(iii).6* Stock Option Plan for Consultants of Safeway
Inc. (incorporated by reference to Exhibit
10(iii).7 to Registrant's Form 10-Q for the
quarterly period ending June 19, 1993).
Exhibit 10(iii).7* First Amendment to the Stock Option Plan for
Consultants of Safeway Inc.
Exhibit 10(iii).8* 1994 Amended and Restated Stock Option and
Incentive Plan for Key Employees of Safeway Inc.
Exhibit 10(iii).9* Operating Performance Bonus Plan for Executive
Officers of Safeway Inc.
Exhibit 10(iii).10* Capital Performance Bonus Plan.
Exhibit 10(iii).11* Retirement Restoration Plan of Safeway Inc.
Exhibit 11.1 Computation of Earnings Per Common Share and
Common Share Equivalent (incorporated by
reference to page 40 of the Company's 1993
Annual Report to Stockholders).
Exhibit 13.1 Registrant's 1993 Annual Report to Stockholders
(considered filed to the extent specified in
Item 1, Item 2, Item 3, Item 5, Item 6, Item 7,
Item 8, Item 13 and Exhibit 11.1 above).
Exhibit 13.2 Registrant's 1994 Proxy Statement (considered
filed to the extent specified in Item 10, Item
11, Item 12 and Item 13 above).
Exhibit 22.1 Subsidiaries of Registrant.
Exhibit 23.1 Independent Auditors' Consent.
Exhibit 27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
On November 1, 1993, the Company filed a Form 8-K listing
under item 7 (Exhibits) its Computation of Ratio of Earnings
to Fixed Charges for the third quarter of 1993.
_________________________
* Management contract, or compensatory
plan or arrangement.
14
15
SAFEWAY INC. AND SUBSIDIARIES
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
By: /s/ STEVEN A. BURD Date: March 25,
1994
SAFEWAY INC.
Steven A. Burd
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities
and on the dates indicated:
/s/ JULIAN C. DAY /s/ F. J. DALE
Julian C. Day F. J. Dale
Executive Vice President and Group Vice
Chief Financial Officer President,
Date: March 25, 1994 Finance
Date: March 25,
1994
Director Date
/s/STEVEN A. BURD March 25, 1994
Steven A. Burd
/s/ SAM GINN March 25, 1994
Sam Ginn
/s/ JAMES H. GREENE, JR. March 25, 1994
James H. Greene, Jr.
/s/ PAUL HAZEN March 25, 1994
Paul Hazen
/s/ HENRY R. KRAVIS March 25, 1994
Henry R. Kravis
/s/ ROBERT I. MACDONNELL March 25, 1994
Robert I. MacDonnell
/s/ PETER A. MAGOWAN March 25, 1994
Peter A. Magowan
/s/ GEORGE R. ROBERTS March 25, 1994
George R. Roberts
/s/ MICHAEL T. TOKRARZ March 25, 1994
Michael T. Tokarz
15
16
Consolidated Supplemental Financial Schedules
Schedule II
SAFEWAY INC. AND SUBSIDIARIES
Amounts Receivable from Related Parties
and Underwriters, Promoters, and Employees Other Than Related Parties
(in thousands)
Balance at
Beginning Amounts Balance at End of Period
Name of Debtor of Period Additions Payments (5) Written Off (5) Current Not Current
- -------------------------------------- ------------ ----------- -------------- -------------- ------- -----------
1993
- ----
R. H. Kinnie:
7.16% Promissory Note due 1995 (1) $ 61.6 $ (61.6) $ -- $ --
7.88% Promissory Note due 1996 (1) 43.5 (43.5) -- --
7.88% Promissory Note due 1996 (1) 575.4 (575.4) -- --
7.95% Promissory Note due 2002 (2) 385.0 (385.0) -- --
Non-interest bearing Promissory Note
due 2002 (2) 1,100.0 (582.8) $ (517.2) -- --
7.88% Promissory Note due 1996 (3) 165.0 (165.0) -- -- --
7% Promissory Note Due 1996 (4) 2,330.4 (2,330.4) -- -- --
M. C. Ross
Relocation Loan (6) -- $ 170.0 -- -- -- 170.0
------------ ---------- --------- --------- --------- ---------
$ 4,660.9 $ 170.0 $(4,143.7) $ (517.2) $ $ 170.0
============ ========== ========= ========= ========= =========
1992
- ----
R. H. Kinnie:
7.16% Promissory Note due 1995 (1) $ 82.2 $ (20.6) $ 20.5 $ 41.1
7.88% Promissory Note due 1996 (1) 43.5 -- -- 43.5
7.88% Promissory Note due 1996 (1) 575.4 -- -- 575.4
7.95% Promissory Note due 2002 (2) 385.0 -- -- 385.0
Non-interest bearing Promissory Note
due 2002 (2) 1,100.0 -- -- 1,100.0
7.88% Promissory Note due 1996 (3) 165.0 -- -- 165.0
7% Promissory Note Due 1996 (4) $ 2,330.4 -- -- 2,330.4
------------ ---------- --------- --------- --------- ---------
$ 2,351.1 $ 2,330.4 $ (20.6) $ 20.5 $ 4,640.4
============ ========== ========= ========= ========= =========
1991
- ----
R. H. Kinnie:
7.16% Promissory Note due 1995 (1) $ 102.8 $ (20.6) $ 20.6 $ 61.6
7.88% Promissory Note due 1996 (1) 43.5 -- 43.5
7.88% Promissory Note due 1996 (1) $ 575.4 -- -- 575.4
7.95% Promissory Note due 2002 (2) -- 385.0 -- -- 385.0
Non-interest bearing Promissory Note
due 2002 (2) -- 1,100.0 -- -- 1,100.0
7.88% Promissory Note due 1996 (3) -- 165.0 -- -- 165.0
------------ ---------- --------- --------- --------- ---------
$ 146.3 $ 2,225.4 $ (20.6) $ 20.6 $ 2,330.5
============ ========== ========= ========= ========= =========
(1) Loan made to purchase common stock of the Company. Loan was secured by
common stock owned by Mr. Kinnie.
(2) Loan made to purchase personal residence and was secured by Deed of Trust
on the property.
(3) Loan made to purchase personal residence and was secured by common stock of
the Company owned by Mr. Kinnie.
(4) Loan made to pay income tax obligations related to Mr. Kinnie's change of
residence from Canada to the U.S., and was secured by common stock of
the Company owned by Mr. Kinnie.
(5) In June 1993 Mr. Kinnie resigned from his positions as Executive Vice
President and Chief Operations Officer and became an employee of Canada
Safeway Limited. In connection therewith, all outstanding principal and
interest was repaid, with the exception of $517,229 which was forgiven.
(6) Loan made for expenses incurred with relocation of residence to Oakland,
Ca. The loan bears no interest and is due on the date of sale of his
prior residence.
16
17
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULE
The Board of Directors and Stockholders
of Safeway Inc.:
We have audited the consolidated balance sheets of Safeway Inc. and
subsidiaries as of January 1, 1994, and January 2, 1993, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three fiscal years in the period ended January 1, 1994, and have issued
our report thereon dated February 21, 1994; such financial statements and
report are included in your 1993 Annual Report to Stockholders and are
incorporated herein by reference. Our audits also included the Consolidated
Financial Statement Schedule II listed in Item 14(a)2.2 of this Form 10-K.
Such consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on such
consolidated financial statement schedule. In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information shown therein.
DELOITTE & TOUCHE
Oakland, California
February 21, 1994
17