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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 2, 1999
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:
Title of each class Name of each exchange on 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
5.75% Notes due 2000 New York Stock Exchange
5.875% Notes due 2001 New York Stock Exchange
6.05% Notes due 2003 New York Stock Exchange
6.50% Notes due 2008 New York Stock Exchange
(Cover continued on following page)
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(Cover continued from previous page)
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 16, 1999, was $25.0 billion.
As of March 16, 1999, there were issued and outstanding 495.6 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
-------------------- ---------
1998 Annual Report to Stockholders I, II, III, IV
1999 Proxy Statement dated March 24, 1999 III
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SAFEWAY INC. AND SUBSIDIARIES
PART I
ITEM 1. BUSINESS AND ITEM 2. PROPERTIES
GENERAL:
Information appearing on pages 4 through 14 of the Company's 1998 Annual Report
to Stockholders is incorporated herein by this reference.
CAPITAL EXPENDITURES:
Information appearing under the caption "Capital Expenditure Program" on page 14
of the Company's 1998 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 1998 1997 1996 1995 1994
----- ----- ----- ----- ----- -----
New stores:
New locations 73 28 15 14 10 6
Replacements 92 18 22 16 22 14
----- ----- ----- ----- ----- -----
165 46 37 30 32 20
===== ===== ===== ===== ===== =====
Remodels: (Note A)
Expansions 111 28 34 29 13 7
"Four-Wall" remodels 624 206 147 112 95 64
----- ----- ----- ----- ----- -----
735 234 181 141 108 71
===== ===== ===== ===== ===== =====
Dominick's stores acquired 113 113 -- -- -- --
Vons stores acquired 316 -- 316 -- -- --
Closures 175 30 37 37 35 36
Stores at year-end 1,497 1,368 1,052 1,059 1,062
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:
Note L to the consolidated financial statements, included on page 36 of the
Company's 1998 Annual Report to Stockholders, is incorporated herein by this
reference.
TRADEMARKS:
Safeway Inc. ("Safeway" or 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, Pavilions and Dominick's. 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 1998, working capital deficit was composed of $2.3 billion of
current assets and $2.9 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 Company's 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 the Company's markets.
RAW MATERIALS:
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.
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 1998, Safeway had approximately 170,000 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.
In the last three years there have been three 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. 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 and that the combined impact of the disputes in
Denver and British Columbia reduced 1996 earnings by approximately $0.07 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 1998 Annual Report to Stockholders and incorporated herein by this
reference, contains financial information by geographic area.
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 pages 35 and
36 of the Company's 1998 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 1998.
EXECUTIVE OFFICERS OF THE COMPANY
The names and ages of the current executive officers of the Company and their
positions as of March 16, 1999, 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 Present
Held at March 16, 1999 Age Officer Office
- --------------------------------------- --- ------- -------
Steven A. Burd 49 1992 1993
Chairman, President and Chief Executive Officer
Kenneth W. Oder 51 1993 1993
Executive Vice President
Labor Relations, Human Resources, Law, Public Affairs
and Information Technology
David G. Weed 47 1992 1998
Executive Vice President and
Chief Financial Officer
David F. Bond (1) 45 1997 1997
Senior Vice President
Finance and Control
David T. Ching (2) 46 1994 1994
Senior Vice President and
Chief Information Officer
Dick W. Gonzales (3) 52 1998 1998
Senior Vice President
Human Resources
Lyman C. Gordon 52 1993 1998
Senior Vice President
Strategic Development
Lawrence V. Jackson (4) 45 1997 1997
Senior Vice President
Supply Operations
Melissa C. Plaisance 39 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 Present
Held at March 16, 1999 Age Officer Office
- --------------------------------------- --- ------- -------
Larree M. Renda 40 1991 1994
Senior Vice President
Corporate Retail Operations
Michael C. Ross 51 1993 1993
Senior Vice President
Secretary and General Counsel
Gary D. Smith 56 1988 1995
Senior Vice President and
Director of Marketing
Richard A. Wilson 65 1988 1988
Vice President
Tax
Donald P. Wright 46 1991 1991
Senior Vice President
Real Estate and Engineering
- ----------
(1) Mr. Bond was previously a partner at the accounting firm of Deloitte &
Touche LLP.
(2) 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.
(3) Mr. Gonzales held the positions of Group Vice President -- Human
Resources, and Senior Vice President --Human Resources at The Vons
Companies, Inc. from 1993 to 1998.
(4) 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 1999
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 N to the consolidated financial statements on page 38 of
the Company's 1998 Annual Report to Stockholders and is incorporated herein by
this reference. There were 9,979 stockholders of record as of March 16, 1999;
however, approximately 88% 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 $55 13/16 at the close of business on March 16, 1999.
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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 1998 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 1998 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.
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 captions "Capital Expenditure Program" and "Market Risk from
Financial Instruments" on page 14 of the Company's 1998 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 28 and 29 of the Company's
1998 Annual Report to Stockholders is incorporated herein by this reference.
Information appearing under the caption "Year 2000 Compliance" on page 18 of the
Company's 1998 Annual Report to Stockholders is incorporated herein by this
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information appearing under the caption "Market Risk from Financial Instruments"
on page 14 of the Company's 1998 Annual Report to Stockholders is incorporated
herein by this reference.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
Pages 19 through 39 of the Company's 1998 Annual Report to Stockholders, which
include the consolidated financial statements 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.
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SAFEWAY INC. AND SUBSIDIARIES
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 1999 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 1999 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 1999 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 1999 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 1998 Annual Report to Stockholders, and the captions "Certain
Relationships and Transactions" and "Compensation Committee Interlocks and
Insider Participation" in the Company's 1999 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 1998, 1997, and 1996.
Consolidated Balance Sheets as of the end of fiscal 1998 and 1997.
Consolidated Statements of Cash Flows for fiscal 1998, 1997, and 1996.
Consolidated Statements of Stockholders' Equity and Comprehensive Income
for fiscal 1998, 1997, and 1996.
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 October 13, 1998,
by and among Safeway Inc., Windy City Acquisition Corp. and
Dominick's Supermarkets, Inc. (incorporated by reference to
Exhibit (c)(1) of the Schedule 14D-1 of Safeway Inc., dated
October 19, 1998).
Exhibit 2.2 Stockholders Agreement, dated as of October 13, 1998, by and
among Safeway Inc., Windy City Acquisition Corp. and each of the
stockholders of Dominick's Supermarkets, Inc. (incorporated by
reference to Exhibit (c)(2) of the Schedule 14D-1 of Safeway
Inc., dated October 19, 1998).
Exhibit 2.3 Agreement and Plan of Merger Dated as of August 6, 1998 among
Carr-Gottstein Foods Co., Safeway Inc. and ACG Merger Sub, Inc.
and Stockholder Support Agreement dated August 6, 1998 entered
into by Green Equity Investors, L.P. for the benefit of Safeway
Inc. (incorporated by reference to Exhibit 2.1 of the
Registrant's Form 10-Q for the quarterly period ended September
12, 1998).
Exhibit 2.4 Amended and Restated Stock Purchase 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
Registrant's Quarterly Report on Form 10-Q for the quarterly
period ended June 15, 1996) and Certificate of Amendment of
Restated Certificate of Incorporation of Safeway Inc.
(incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended June
20, 1998).
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
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 (incorporated by reference to Exhibit 4(i).3 to
Registrant's Form 10-K for the year ended January 3, 1998).
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
(incorporated by reference to Exhibit 4(i).6 to Registrant's Form
10-K for the year ended January 3, 1998).
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 (incorporated by reference to Exhibit 4(i).7 to
Registrant's Form 10-K for the year ended January 3, 1998).
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).
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
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 (incorporated by
reference to Exhibit 4(i).9 to Registrant's Form 10-K for the
year ended January 3, 1998).
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).
Exhibit 4(i).13 Common Stock Purchase Warrants to purchase 14,148,969 shares of
Safeway Inc. common stock (incorporated by reference to Exhibit
4(i).13 to Registrant's Form 10-K for the year ended January 3,
1998) and Amendment to Safeway Inc. Common Stock Purchase
Warrant dated as of January 29, 1999 (incorporated by reference
to Exhibit A to Registrant's Form 8-K dated February 11, 1999).
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, including the forms of Notes (incorporated
by reference to Exhibits 4.2, 4.3, 4.4, 4.5 and 4.6 to
Registrant's Form 8-K dated September 10, 1997).
Exhibit 4(i).17 Form of Officers' Certificate establishing the terms of the
Registrant's 5.75% Notes due 2000, 5.875% Notes due 2001, 6.05%
Notes due 2003, and 6.50% Notes due 2008, including forms of
Notes (incorporated by reference to Exhibits 4.2, 4.3, 4.4, 4.5
and 4.6 to Registrant's Form 8-K dated November 9, 1998).
Exhibit 4(i).18 The 1996 Equity Participation Plan of Dominick's Supermarkets,
Inc. (incorporated by reference to Exhibit 10.13 to Dominick's
Supermarkets, Inc.'s Form 10-K, Number 1-12353).
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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 The 1995 Amended and Restated Stock Option Plan of
Dominick's Supermarkets, Inc. (incorporated by reference to
Exhibit 10.12 to Dominick's Supermarkets, Inc.'s Form 10-K,
Number 1-12353).
Exhibit 4(i).20 Form of Amendment to Stock Option Agreements under The 1996
Equity Participation Plan of Dominick's Supermarkets, Inc.,
and the 1995 Amended and Restated Stock Option Plan of
Dominick's Supermarkets, Inc. (incorporated by reference to
Exhibit 4.5 to Registrant's Registration on Form S-8 No.
333-67575 dated November 19, 1998).
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).
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 10(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 (incorporated
by reference to Exhibit 10(iii).7 of Registrant's Form 10-K
for the year ended January 2, 1998). -------------- *
Management contract, or compensatory plan or arrangement.
13
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SAFEWAY INC. AND SUBSIDIARIES
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONTINUED)
Exhibit 10(iii).8* Capital Performance Bonus Plan for Executive Officers of
Safeway Inc. (incorporated by reference to Exhibit 10(iii).8
of Registrant's Form 10-K for the year ended January 2,
1998).
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). Exhibit 11.1 Computation
of Earnings per Share (incorporated by reference to page 37
of the Company's 1998 Annual Report to Stockholders).
Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges.
Exhibit 13.1 Registrant's 1998 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.
14
15
SAFEWAY INC. AND SUBSIDIARIES
(b) REPORTS ON FORM 8-K:
On October 19, 1998 the Company filed a Current Report on Form 8-K stating under
"Item 5. Other Events" that on that date it had entered into an agreement and
plan of merger with Dominick's Supermarkets, Inc. pursuant to which it would
acquire all of the outstanding shares of Dominick's common stock at $49 per
share, or a total of approximately $1.2 billion.
On November 9, 1998, the Company filed a Current Report on Form 8-K stating
under "Item 5. Other Events" that on that date it had completed an underwritten
offering of $400 million aggregate principal amount of its 5.75% Notes due 2000,
$400 million aggregate principal amount of its 5.875% Notes due 2001, $350
million aggregate principal amount of its 6.05% Notes due 2003, and $250 million
aggregate principal amount of its 6.50% Senior Debentures due 2008 under its
Registration Statement on Form S-3 filed with the Securities and Exchange
Commission on October 20, 1998 (File no. 333-65903).
On November 24, 1998, the Company filed a Current Report on Form 8-K stating
under "Item 5. Other Events" that it had completed the previously announced
acquisition of Dominick's Supermarkets, Inc.
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, 1999
------------------
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/ David G. Weed /s/ David F. Bond
- ---------------------------------- ---------------------
David G. Weed David F. Bond
Executive Vice President and Senior Vice President
Chief Financial Officer Finance and Control
Date: March 24, 1999 Date: March 24, 1999
Director Date
-------- ----
/s/Steven A. Burd March 24, 1999
- -----------------------------------
Steven A. Burd
/s/ James H. Greene, Jr. March 24, 1999
- -----------------------------------
James H. Greene, Jr.
/s/ Paul Hazen March 24, 1999
- -----------------------------------
Paul Hazen
/s/ Henry R. Kravis March 24, 1999
- -----------------------------------
Henry R. Kravis
/s/ Robert I. MacDonnell March 24, 1999
- -----------------------------------
Robert I. MacDonnell
/s/ Peter A. Magowan March 24, 1999
- -----------------------------------
Peter A. Magowan
/s/ George R. Roberts March 24, 1999
- -----------------------------------
George R. Roberts
/s/ William Y. Tauscher March 24, 1999
- -----------------------------------
William Y. Tauscher
16
17
SAFEWAY INC. AND SUBSIDIARIES
Exhibit Index
LIST OF EXHIBITS FILED WITH FORM 10-K FOR THE PERIOD
ENDED JANUARY 2, 1999
Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges
Exhibit 13.1 Registrant's 1998 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).