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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 3, 1998
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 of (I.R.S. Employer Identification No.)
incorporation or organization
5918 Stoneridge Mall Road
Pleasanton, California 94588
------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (925) 467-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Common Stock, $0.01 par value per share New York Stock Exchange
9.30% Senior Secured Debentures due 2007 New York Stock Exchange
10% Senior Notes due 2002 New York Stock Exchange
9.35% Senior Subordinated Notes due 1999 New York Stock Exchange
10% Senior Subordinated Notes due 2001 New York Stock Exchange
9.65% Senior Subordinated Debentures due 2004 New York Stock Exchange
9.875% Senior Subordinated Debentures due 2007 New York Stock Exchange
6.85% Senior Notes due 2004 New York Stock Exchange
7.00% Senior Notes due 2007 New York Stock Exchange
7.45% Senior Debentures due 2027 New York Stock Exchange
(Cover continued on following page)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(Title of Class)
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 17, 1998, was $13.2 billion.
As of March 17, 1998, there were issued and outstanding 478.7 million 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
-------------------- ---------
1997 Annual Report to Stockholders I, II, III, IV
1998 Proxy Statement dated March 27, 1998 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 12
of the Company's 1997 Annual Report to Stockholders is incorporated herein by
this reference.
RETAIL OPERATIONS:
Information appearing under the captions "Retail Operations" and "Distribution"
on pages 12 and 13 of the Company's 1997 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 13 of the Company's 1997 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. 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 pages
13 and 14 of the Company's 1997 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 1997 1996 1995 1994 1993
----- ---- ---- ---- ---- ----
New stores:
New locations 53 15 14 10 6 8
Replacements 80 22 16 22 14 6
--- -- -- -- -- --
133 37 30 32 20 14
=== == == == == ==
Remodels: (Note A)
Expansions 110 34 29 13 7 27
"Four-Wall" remodels 436 147 112 95 64 18
--- --- --- -- -- --
546 181 141 108 71 45
=== === === === == ==
Vons stores acquired 316 316 - - - -
Closures 184 37 37 35 36 39
Stores at year-end 1,368 1,052 1,059 1,062 1,078
Note A. Defined as store projects (other than maintenance) generally requiring
expenditures in excess of $200,000.
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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
or pending in the United States Patent and Trademark Office, including its
product line names such as Safeway, Safeway SELECT, Lucerne and Mrs. Wright's,
and the marks Vons and Pavilions. Each trademark registration is for an initial
period of 10 or 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 1997, working capital deficit was composed of $2.0 billion of
current assets and $2.5 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. 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, supercenters, 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.
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 relate to the protection of the environment has not had
and is not expected to have a material adverse effect upon the financial
position or results of operations of the Company.
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 1. BUSINESS AND ITEM 2. PROPERTIES (CONTINUED)
EMPLOYEES:
At year-end 1997, Safeway Inc. ("Safeway" or the "Company") had approximately
147,000 full and part-time employees. Approximately 90% of Safeway's employees
in the United States and Canada are covered by collective bargaining agreements
negotiated with local unions affiliated with one of 12 different international
unions. There are approximately 400 such agreements, typically having three-year
terms, with some agreements having terms of up to five years. Accordingly,
Safeway renegotiates a significant number of these agreements every year.
By year-end 1997, Safeway had concluded early negotiations and signed new labor
contracts covering employees whose collective bargaining agreements had been due
to expire in 1998. Certain of these contracts were with employees represented by
the United Food and Commercial Workers Union in northern California and Spokane,
Washington. In addition, union members in British Columbia ratified a new labor
contract. Management considers the terms of these new contracts to be
satisfactory. As a result of these early negotiations, the only significant
remaining labor contracts due to expire in 1998 are in the Seattle and Winnipeg
operating areas covering approximately 110 stores.
In the last three years there have been four significant work stoppages. During
the second quarter of 1997, Safeway was engaged in a 75-day labor dispute
affecting 74 stores in the Alberta, Canada operating area. The Company continued
to operate the affected stores with a combination of replacement workers,
management and employees who returned to work. During the second and third
quarters of 1996, Safeway was engaged in a labor dispute in British Columbia
which lasted 40 days and affected 86 stores. Under Provincial law in British
Columbia, replacement workers could not be hired, and therefore all the affected
stores were closed throughout the strike-lockout. Separately, the Company was
engaged in a strike-lockout in the Denver operating area which lasted 44 days
also during the second and third quarters of 1996. All of the Denver stores
operated during the strike-lockout, largely with replacement workers. A nine-day
strike during the second quarter of 1995 affected 208 stores in northern
California. These work stoppages were resolved in a manner that management
considered generally satisfactory. Safeway estimates that the Alberta strike
reduced 1997 net income by approximately $0.04 per share, that the combined
impact of the disputes in Denver and British Columbia reduced 1996 earnings by
approximately $0.07 per share, and that the dispute in northern California
reduced 1995 earnings by an estimated $0.01 per share.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES:
Note L to the consolidated financial statements, included on page 36 of the
Company's 1997 Annual Report to Stockholders and incorporated herein by this
reference, contains financial information by geographic area. At year-end 1997,
the Company's foreign operations were composed of retail grocery 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 and the economic situation in Mexico, the Company is not aware of
any significant risks of operating in these foreign countries.
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SAFEWAY INC. AND SUBSIDIARIES
The Company's policy for translating Casa Ley's financial statements into U.S.
dollars is described under the caption "Translation of Foreign Currencies" on
page 25 of the Company's 1997 Annual Report to Stockholders. Casa Ley had total
assets of $319.0 million and $263.1 million as of September 30, 1997 and 1996,
based on financial information provided by Casa Ley. Sales and net income for
Casa Ley were as follows (in millions):
12 months ended September 30,
----------------------------------
1997 1996 1995
------ ------ ------
Sales $943.8 $810.1 $861.4
====== ====== ======
Net income $ 38.6 $ 33.8 $ 17.9
====== ====== ======
ITEM 3. LEGAL PROCEEDINGS
Information about legal proceedings appearing under the caption "Legal Matters"
as reported in Note K to the consolidated financial statements on page 35 of the
Company's 1997 Annual Report to Stockholders is incorporated herein by this
reference.
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SAFEWAY INC. AND SUBSIDIARIES
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 1997.
EXECUTIVE OFFICERS OF THE COMPANY
The names and ages of the current executive officers of the Company and their
positions as of March 17, 1998, 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 17, 1998 Age Officer Present Office
- ---------------------- --- ------- --------------
Steven A. Burd 48 1992 1992
President and Chief Executive Officer
Kenneth W. Oder(1) 50 1993 1993
Executive Vice President
Labor Relations, Human Resources, Law and Public Affairs
Julian C. Day(2) 45 1993 1993
Executive Vice President and
Chief Financial Officer
David F. Bond(3) 44 1997 1997
Senior Vice President
Finance and Control
David T. Ching(4) 45 1994 1994
Senior Vice President and
Chief Information Officer
Lawrence V. Jackson(5) 44 1997 1997
Senior Vice President
Supply Operations
Diane Peck 49 1990 1995
Senior Vice President
Human Resources
Melissa C. Plaisance 38 1993 1995
Senior Vice President
Finance and Public Affairs
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 4. EXECUTIVE OFFICERS OF THE COMPANY (CONTINUED)
Year First Elected
Name and all Positions with the Company -------------------------
Held at March 17, 1998 Age Officer Present Office
- ---------------------- --- ------- --------------
Larree M. Renda 39 1991 1994
Senior Vice President
Corporate Retail Operations
Michael C. Ross(1) 50 1993 1993
Senior Vice President
Secretary and General Counsel
Gary D. Smith 55 1988 1995
Senior Vice President and
Director of Marketing
Richard A. Wilson 64 1988 1988
Vice President
Tax
Donald P. Wright 45 1991 1991
Senior Vice President
Real Estate and Engineering
- ----------
(1) Mr. Oder and Mr. Ross were previously partners at the law firm of Latham &
Watkins.
(2) Mr. Day was previously self-employed as an independent
consultant.
(3) Mr. Bond was previously a partner at the accounting firm of Deloitte &
Touche LLP.
(4) During 1994, Mr. Ching was the General Manager -- North America for the
British American Consulting Group. From 1979 to 1994, he was employed by
Lucky Stores, Inc., where he was the Senior Vice President of Information
Systems beginning in 1989.
(5) Mr. Jackson was previously the Senior Vice President, Worldwide Operations
of PepsiCo Food Systems, a division of PepsiCo, Inc. from 1995-97, and Vice
President and General manager of Pepsi-Cola Company, a unit of PepsiCo,
Inc., from 1992-95.
Section 16(a) Beneficial Ownership. Information appearing under the caption
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's 1998
Proxy Statement is incorporated herein by this reference.
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 M to the consolidated financial statements on page 37 of
the Company's 1997 Annual Report to Stockholders and is incorporated herein by
this reference. There were 9,162 stockholders of record as of March 17, 1998;
however, approximately 76% 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, as reported on the New York Stock Exchange
Composite Tape, was $35 1/2 at the close of business on March 17, 1998.
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(CONTINUED)
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. The Company has not paid dividends on common stock through 1997 and
has no current plans for dividend payments.
ITEM 6. SELECTED FINANCIAL DATA
The "Five-Year Summary Financial Information" included on page 15 of the
Company's 1997 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 incorporated
by reference in 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 16 through
18 and under the caption "Capital Expenditure Program" on pages 13 and 14 of the
Company's 1997 Annual Report to Stockholders is incorporated herein by this
reference.
Information regarding the terms of outstanding indebtedness appearing in Note C
to the consolidated financial statements on pages 27 through 28 of the Company's
1997 Annual Report to Stockholders is incorporated herein by this reference.
YEAR 2000 COMPLIANCE
The Year 2000 issue is the result of computer programs that were written using
two digits rather than four to define the applicable year. For example,
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. To the extent that the
Company's software applications contain source code that is unable to
appropriately interpret the uncoming calendar year 2000 and beyond, some level
of modification or replacement of such applications will be necessary to avoid
system failures and the temporary inability to process transactions or engage
in other normal business activities.
The Company utilizes a significant number of computer software programs and
operating systems across its entire organization, including applications used in
stores, manufacturing, product development, financial business systems and
various administrative functions. In addition, the Company is communicating
with major vendors to determine the extent to which the Company is vulnerable
to third-party Year 2000 compliance issues.
Given information known at this time about the Company's systems that are
non-compliant, coupled with the Company's ongoing, normal course-of-business
efforts to upgrade or replace critical systems, as necessary, management does
not expect Year 2000 compliance costs to have any material adverse impact on
the Company's liquidity or ongoing results of operations.
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SAFEWAY INC. AND SUBSIDIARIES
By year-end 1997, Safeway had concluded early negotiations and signed new labor
contracts covering employees whose collective bargaining agreements had been due
to expire in 1998. Certain of these contracts were with employees represented by
the United Food and Commercial Workers Union in northern California and Spokane,
Washington. In addition, union members in British Columbia ratified a new labor
contract. Management considers the terms of these new contracts to be
satisfactory. As a result of these early negotiations, the only significant
remaining labor contracts due to expire in 1998 are in the Seattle and Winnipeg
operating areas covering approximately 110 stores.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pages 19 through 39 of the Company's 1997 Annual Report to Stockholders, which
include the consolidated financial statements, Computation of Earnings Per
Common Share and Common Share Equivalent (listed as Exhibit 11.1 to
Item 14(a)3), and the Independent Auditors' Report as listed in Item 14(a)1, are
incorporated herein by this reference.
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 1998 Proxy Statement, is incorporated
herein by this reference.
Executive Officers of the Company. See PART I under the caption "Executive
Officers of the Company".
ITEM 11. EXECUTIVE COMPENSATION
Information appearing under the captions "Executive Compensation" and "Pension
Plans" in the Company's 1998 Proxy Statement is incorporated herein by this
reference. Information appearing under the captions "Report of the Compensation
and Stock Option Committee; Report of the Section 162(m) Committee" and "Stock
Performance Graph" in the Company's 1998 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 1998 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 34 of the
Company's 1997 Annual Report to Stockholders, and the captions "Certain
Relationships and Transactions" and "Compensation Committee Interlocks and
Insider Participation" in the Company's 1998 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 1997, 1996, and 1995.
Consolidated Balance Sheets as of the end of fiscal 1997 and 1996.
Consolidated Statements of Cash Flows for fiscal 1997, 1996, and 1995.
Consolidated Statements of Stockholders' Equity for fiscal 1997, 1996,
and 1995.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
2. Consolidated Financial Statement Schedules:
None required
3. The following exhibits are filed as part of this report:
Exhibit 2.1 Agreement and Plan of Merger dated as of December 15, 1996,
by and among Safeway Inc., SSCI Merger Sub, Inc. and The
Vons Companies, Inc., as amended on January 8, 1997
(incorporated by reference to Exhibit 2.1 to Registrant's
Registration on Form S-4 No. 333-22837 dated March 5, 1997).
Exhibit 2.2 Amended and Restated Stock Repurchase Agreement, dated
as of January 8, 1997 by and between Safeway Inc. and SSI
Associates, L.P. (incorporated by reference to Exhibit 2.1
to Registrant's Current Report on Form 8-K dated January 8,
1997).
Exhibit 3.1 Restated Certificate of Incorporation of the Company and
Certificate of Amendment of Restated Certificate of
Incorporation by the Company (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 15, 1996).
Exhibit 3.2 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 (incorporated by reference to Exhibit 3.2 to
Registrant's Form 10-K for the year ended January 2, 1993).
Exhibit 4(i).1 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4(i).2 to Registration Statement No.
33-33388).
Exhibit 4(i).2 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).3 Indenture dated as of November 20, 1991 between 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), as supplemented by the
Supplemental Indenture dated as of September 4, 1997.
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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 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).5 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).6 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 2007,
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(i).14 of Registrant's Form 10-K for the year ended
December 28, 1991), as supplemented by the Supplemental
Indenture dated as of September 4, 1997.
Exhibit 4(i).7 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), as supplemented by the Supplemental
Indenture dated as of September 4, 1997.
Exhibit 4(i).8 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).9 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), as supplemented by the
Supplemental Indenture dated as of September 4, 1997.
Exhibit 4(i).10 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).11 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).
Exhibit 4(i).12 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).
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
Exhibit 4(i).13 Common Stock Purchase Warrants to purchase 14,148,969 shares
of Safeway Inc. common stock.
Exhibit 4(i).14 Credit Agreement dated as of April 8, 1997 among Safeway
Inc., The Vons Companies, Inc. and Canada Safeway Limited as
Borrowers; Bankers Trust Company as Administrative Agent;
The Chase Manhattan Bank as Syndication Agent; The Bank of
Nova Scotia and Bank of America National Trust and Savings
Association as Documentation Agents; the agents listed
therein as Agents; and the lenders listed therein as
Lenders. (incorporated by reference to Exhibit 4(i).1 of the
Registrant's Form 10-Q for the quarterly period ended March
22, 1997).
Exhibit 4(i).15 Indenture, dated as of September 10, 1997, between Safeway
Inc. And The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.1 to Registrant's Form 8-K dated
September 10, 1997).
Exhibit 4(i).16 Form of Officers' Certificate establishing the terms of the
Registrant's 6.85% Senior Notes due 2004, the Registrant's
7.00% Senior Notes due 2007 and the company's 7.45% Senior
Debentures due 2027 (incorporated by reference to Exhibit
4.2 to Registrant's Form 8-K dated September 10, 1997).
Exhibit 4(i).17 Form of 6.85% Senior Note due 2004 (incorporated by
reference to Exhibit 4.3 to Registrant's Form 8-K dated
September 10, 1997).
Exhibit 4(i).18 Form of 7.00% Senior Note due 2007 (incorporated by
reference to Exhibit 4.4 to Registrant's Form 8-K dated
September 10, 1997).
Exhibit 4(i).19 Form of 7.45% Senior Debenture due 2027 (incorporated by
reference to Exhibit 4.6 to Registrant's Form 8-K dated
September 10, 1997).
Exhibit 4(iii) Registrant agrees to provide the Securities and Exchange
Commission, upon request, with copies of instruments
defining the rights of holders of long-term debt of the
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), and First Amendment to the Safeway
Inc. Outside Director Equity Purchase Plan dated as of July
5, 1994 (incorporated by reference to Exhibit 10(iii).1 to
Registrant's Form 10-Q for the quarterly period ended
September 10, 1994).
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).
Exhibit 10(iii).4* 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).
* Management contract, or compensatory plan or arrangement.
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
Exhibit 10(iii).5* First Amendment to the Stock Option Plan for Consultants
of Safeway Inc. (incorporated by reference to Exhibit
10(iii).7 to Registrant's Form 10-K for the year ended
January 1, 1994).
Exhibit 10(iii).6* 1994 Amended and Restated Stock Option and Incentive Plan
for Key Employees of Safeway Inc. (incorporated by reference
to Exhibit 10(iii).8 to Registrant's Form 10-K for the year
ended January 1, 1994) and First Amendment thereto dated
March 1, 1995 (incorporated by reference to Exhibit
10(iii).7 of Registrant's Form 10-K/A for the year ended
December 31, 1994).
Exhibit 10(iii).7* Operating Performance Bonus Plan for Executive Officers of
Safeway Inc. (incorporated by reference to Exhibit 10(iii).9
to Registrant's Form 10-K for the year ended January 1,
1994); First Amendment thereto dated January 1, 1997.
(incorporated by reference to Exhibit 110(iii).12 of
Registrant's Form 10-K for the year ended December 28,
1996); Second Amendment thereto dated October 7, 1997; and
Third Amendment thereto dated March 10, 1998.
Exhibit 10(iii).8* Capital Performance Bonus Plan for Executive Officers of
Safeway Inc.
Exhibit 10(iii).9* Retirement Restoration Plan of Safeway Inc. (incorporated
by reference to Exhibit 10(iii).11 to Registrant's Form 10-K
for the year ended January 1, 1994).
Exhibit 10(iii).10* Deferred Compensation Plan for Safeway Directors
(incorporated by reference to Exhibit 10(iii).11 of
Registrant's Form 10-K for the year ended December 31,
1994).
Exhibit 10(iii).11* Form of stock option agreement for former directors of The
Vons Companies, Inc. (incorporated by reference to Exhibit
10(iii).12 of Registrant's Form 10-K for the year ended
December 28, 1996).
Exhibit 10(iii).12* The Vons Companies, Inc. Management Stock Option Plan
(incorporated by reference to Exhibit 10.3 to The Vons
Companies, Inc. Annual Report on Form 10-K for the
twenty-seven weeks ended January 3, 1988).
Exhibit 10(iii).13* The Vons Companies, Inc. 1990 Stock Option and Restricted
Stock Plan (incorporated by reference to Appendix A to The
Vons Companies, Inc. Proxy Statement for its May 17, 1990
Annual Meeting of Shareholders).
Exhibit 10(iii).14* Amendment, dated February 17, 1993, to The Vons Companies,
Inc. 1990 Stock Option and Restricted Stock Plan
(incorporated by reference to Exhibit 10.13.1 to The Vons
Companies, Inc. Form 10-Q for the quarterly period ended
March 28, 1993).
Exhibit 10(iii).15* Amendment, effective as of December 13, 1996, to The Vons
Companies, Inc. 1990 Stock Option and Restricted Stock Plan
(incorporated by reference to Exhibit 10.7.2 to The Vons
Companies, Inc. Form 10-K for the fiscal year ended December
29, 1996).
Exhibit 10(iii).16* Form of Amendments, dated April 8, 1997, to The Vons
Companies, Inc. Management Stock Option Plan and The Vons
Companies, Inc. 1990 Stock Option and Restricted Stock Plan
(incorporated by reference to Exhibit 4.5 to Registrant's
Form S-4 filed on March 5, 1997).
14
15
SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
Exhibit 11.1 Computation of Earnings Per Share (incorporated by
reference to page 38 of the Company's 1997 Annual Report to
Stockholders).
Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges.
Exhibit 13.1 Registrant's 1997 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 22.1 Schedule of Subsidiaries.
Exhibit 23.1 Independent Auditors' Consent.
Exhibit 27 Financial Data Schedule (electronic filing only).
- --------------
* Management contract, or compensatory plan or arrangement.
(b) REPORTS ON FORM 8-K:
On September 10, 1997, the Company filed a Current Report on Form 8-K stating
under "Item 5. Other Events" that on that day it had completed an underwritten
offering of $200 million aggregate principal amount of its 6.85% Senior Notes
due 2004, $250 million aggregate principal amount of its 7.00% Senior Notes due
2007, and $150 million aggregate principal amount of its 7.45% Senior Debentures
due 2027 under its Registration Statement on Form S-3 filed with the Securities
and Exchange Commission on August 4, 1997 (File no. 333-32741).
15
16
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 24, 1998
- ------------------------ ---------------------
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/ David F. Bond
- ------------------ -----------------
Julian C. Day David F. Bond
Executive Vice President and Senior Vice President
Chief Financial Officer Finance and Control
Date: March 24, 1998 Date: March 24, 1998
Director Date
-------- ----
/s/Steven A. Burd March 24, 1998
- ----------------- --------------
Steven A. Burd
/s/ Sam Ginn March 24, 1998
- ------------ --------------
Sam Ginn
/s/ James H. Greene, Jr. March 24, 1998
- ------------------------ --------------
James H. Greene, Jr.
/s/ Paul Hazen March 24, 1998
- -------------- --------------
Paul Hazen
/s/ Henry R. Kravis March 24, 1998
- -------------------------- --------------
Henry R. Kravis
/s/ Robert I. MacDonnell March 24, 1998
- -------------------------- --------------
Robert I. MacDonnell
/s/ Peter A. Magowan March 24, 1998
- -------------------- --------------
Peter A. Magowan
/s/ George R. Roberts March 24, 1998
- --------------------- --------------
George R. Roberts
/s/ Michael T. Tokarz March 24, 1998
- --------------------- --------------
Michael T. Tokarz
16
17
SAFEWAY INC, AND SUBSIDIARIES
Exhibit Index
LIST OF EXHIBITS FILED WITH FORM 10-K FOR THE PERIOD
ENDED JANUARY 3, 1998
Exhibit 4(i).3 Supplemental Indenture dated as of September 4, 1997 between
the Company and The Bank of New York, as Trustee, relating
to the Company's Senior Subordinated Debt Securities.
Exhibit 4(i).6 Supplemental Indenture dated as of September 4, 1997 between
the Company and The First National Bank of Chicago, as
Trustee, relating to the Company's 9.30% Senior Secured
Debentures due 2007.
Exhibit 4(i).7 Supplemental Indenture dated as of September 4, 1997 between
the Company and Harris Trust and Savings Bank, as Trustee,
relating to the Company's Senior Subordinated Debt
Securities.
Exhibit 4(i).9 Supplemental Indenture dated as of September 4, 1997 between
the Company and The Chase Manhattan Bank (National
Association), as Trustee, relating to the Company's Debt
Securities.
Exhibit 4(i).13 Common Stock Purchase Warrants to purchase 14,148,969
shares of Safeway Inc. common stock.
Exhibit 10(iii).7 Second Amendment to the Operating Performance Bonus Plan for
Executive Officers of Safeway Inc. dated October 7, 1997 and
Third Amendment to the Operating Performance Bonus Plan for
Executive Officers of Safeway Inc. dated March 10, 1988.
Exhibit 10(iii).8 The Capital Performance Bonus Plan for Executive Officers of
Safeway Inc.
Exhibit 11.1 Computation of Earnings Per Share (incorporated by reference
to page 38 of the Company's 1997 Annual Report to
Stockholders).
Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges
Exhibit 13.1 Registrant's 1997 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 22.1 Schedule of Subsidiaries
Exhibit 23.1 Independent Auditors' Consent.
Exhibit 27 Financial Data Schedule (electronic filing only)