<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Prospectus Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
THE VONS COMPANIES, INC.
(Name of Registrant as Specified In Its Charter)
THE VONS COMPANIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF THE VONS COMPANIES, INC.]
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS MAY 11, 1994
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The Vons
Companies, Inc. ("Vons") will be held at The Vons Companies, Inc. headquarters
building, 618 Michillinda Avenue, Arcadia, California 91007, on Wednesday, May
11, 1994, at 9:00 a.m., Pacific Daylight Savings Time, for the following
purposes:
1. To elect three directors;
2. To transact such other business as may be properly brought before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 18, 1994, will be
entitled to vote at said meeting or any adjournment thereof.
The Board of Directors urges each shareholder to read carefully the enclosed
proxy statement.
Shareholders are requested to vote for their choices and to date, sign and
return the enclosed proxy card in the enclosed envelope, to which no postage
need be affixed if mailed in the United States. If you plan to attend the
meeting and wish to vote your shares personally, you may do so at any time
before the proxy is voted.
All shareholders are cordially invited to attend the meeting.
/s/ TERRENCE J. WALLOCK
Terrence J. Wallock,
Secretary
April 4, 1994
<PAGE>
[LOGO OF THE VONS COMPANIES, INC.]
----------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS MAY 11, 1994
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of The Vons Companies, Inc., a Michigan corporation ("Vons"
or the "Company"), of proxies to be used at the Annual Meeting of Shareholders
to be held at The Vons Companies, Inc. headquarters building, 618 Michillinda
Avenue, Arcadia, California 91007, on Wednesday, May 11, 1994, at 9:00 a.m.,
Pacific Daylight Savings Time (the "Meeting"), and at any adjournments thereof,
for the purpose of electing three directors. A form of proxy is enclosed for
use at the Meeting.
Unless contrary instructions are indicated on the proxy, all shares
represented by valid proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted for all the directors named below.
As for any other business which may properly come before the Meeting and be
submitted to a vote of shareholders, proxies received by the Board of Directors
will be voted in accordance with the best judgment of the designated proxy
holders.
A proxy may be revoked at any time before it is exercised by giving written
notice of revocation to the Secretary of Vons or by submitting prior to the
time of the Meeting a properly executed proxy bearing a later date.
Shareholders who have executed and returned a proxy and who then attend the
Meeting and desire to vote in person are requested to so notify the Secretary
prior to the time of the Meeting.
The mailing address of Vons is 618 Michillinda Avenue, Arcadia, California
91007, and its telephone number is 818/821-7000. The approximate date when this
Proxy Statement and form of proxy are being first sent to shareholders is April
5, 1994.
GENERAL INFORMATION
VOTING SECURITIES AND SOLICITATION OF PROXIES
The close of business on March 18, 1994, has been fixed by the Board of
Directors as the Record Date for the determination of shareholders entitled to
notice of and to vote at the Meeting or at any adjournments thereof.
Shares of Vons common stock, of which 43,341,926 shares were outstanding as
of the Record Date, are the only voting securities of Vons. Each shareholder of
record at the close of business on the Record Date is entitled to one vote for
each share of Vons common stock then held on each matter to come before the
Meeting, including the election of directors.
Vons will bear the cost of solicitation of proxies. In addition to the use of
mail, proxies may be solicited by personal interview, telephone or telegraph,
by officers, directors and other employees of Vons. Vons will
1
<PAGE>
also request persons, firms and corporations holding shares in their names, or
in the names of their nominees, which are beneficially owned by others, to send
or cause to be sent proxy material to, and obtain proxies from, such beneficial
owners and will reimburse such holders for their reasonable expenses in so
doing. In addition, Vons has retained Georgeson & Company Inc. ("Georgeson") to
assist in the solicitation of proxies. Georgeson may solicit proxies by mail,
telephone, telegraph and personal solicitation, and will request brokerage
houses and other nominees, fiduciaries and custodians nominally holding shares
of record of Vons common stock to forward proxy soliciting material to the
beneficial owners of such shares. For these services, Vons will pay Georgeson a
fee estimated not to exceed $6,500, plus reimbursement of expenses.
BUSINESS HISTORY
Vons' grocery business began operations in 1906. From 1969 until December
1985 it was owned, along with certain other merchandising businesses, by
Household International, Inc. ("Household"). In 1985 HMI Holdings, Inc.,
subsequently renamed The Vons Companies, Inc., a newly organized Delaware
corporation ("Vons Delaware"), acquired these businesses in a leveraged buy-out
that was organized, in part, by Vons' present management. During 1986 all of
the merchandising businesses acquired from Household, other than the grocery
business, were sold.
On July 22, 1987, Vons Delaware was merged (the "Allied Merger") with and
into Allied Supermarkets, Inc., a Michigan corporation, ("Allied") and the
surviving corporation was renamed The Vons Companies, Inc., a Michigan
corporation. On the same date as the Allied Merger, substantially all of the
business previously operated by Allied was sold to a company organized by the
former management of Allied, leaving the Company with operations located only
in Southern California, as they existed prior to the Allied Merger.
In August 1988, Vons acquired four indirect subsidiaries (the "Safeway
Subsidiaries") of Safeway Stores, Incorporated, now known as Safeway Inc.
("Safeway"), which conducted substantially all of Safeway's operations in
Southern California (the "Acquisition"). As a result of the Acquisition and
other purchases of Vons common stock, Safeway Southern California, Inc.
("Safeway Southern California") is Vons' largest shareholder, with
approximately 35% of the outstanding shares of Vons common stock on the Record
Date. Safeway Southern California is an indirect subsidiary of Safeway, which
is an affiliate of Kohlberg Kravis Roberts & Co. ("KKR").
ELECTION OF DIRECTORS
The Board of Directors of Vons is currently comprised of ten directors
divided into three classes serving staggered terms, normally of three years
each. The term of office of one class of directors expires each year, and, at
each annual meeting, the successors to the directors of the class whose term is
expiring in that year are elected to hold office for a term of three years and
until their successors are elected and qualified. The current terms of three
directors expire in 1995, four expire in 1996 and three expire this year. In
the event that a nominee for director should become unavailable for election,
it is intended that the shares represented by proxies voted in favor of the
nominee will be voted for such substitute nominee as may be named by the Board
of Directors.
Under Article III, Section 2, of Vons' By-Laws, nominations of persons for
election to the Board, other than those made by or at the direction of the
Board, may be made at the Annual Meeting only if pursuant to a timely notice
delivered or mailed to the Secretary of Vons. To be timely, a shareholder's
notice must be delivered to or mailed and received at Vons' principal executive
offices not less than 50, nor more than 75, days prior to the Meeting, unless
less than 65 days' notice or prior public disclosure of the date of the Meeting
is given or made to shareholders, in which case notice of a nomination must be
received not later than the close of business on the 15th day following the day
on which notice of the date of the Meeting was mailed to shareholders or public
disclosure of the Meeting date was made, whichever is earlier. A notice of
nomination must set forth each nominee's name, age, business and residential
addresses, principal occupation or
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<PAGE>
employment, beneficial ownership of Vons capital stock and any other
information relating to the nominee that is required to be disclosed in
solicitations for proxies pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The notice must
additionally set forth the name and record address of the shareholder making
the nomination, as well as such shareholder's beneficial ownership of Vons
capital stock. Vons may require any proposed nominee to furnish such other
information as may reasonably be required by Vons to determine the eligibility
of such proposed nominee. At the Annual Meeting, nominations by or at the
direction of the Board will be made on its behalf by Roger E. Stangeland, the
Chairman of the Board, or by such other person or persons as the Board may
direct.
The following table sets forth certain information about the directors
standing for election at the Meeting:
NOMINEES FOR ELECTION AS DIRECTOR
<TABLE>
<CAPTION>
YEAR
DIRECTOR NEW TERM
AGE SINCE WILL EXPIRE
--- -------- -----------
<S> <C> <C> <C>
Steven A. Burd...................................... 44 1993 1997
Fritz L. Duda....................................... 56 1987 1997
Roger E. Stangeland................................. 64 1987 1997
</TABLE>
Mr. Burd has been President of Safeway since October 1992, serving initially
as Chief Operating Officer and, commencing May 1993 to the present, as Chief
Executive Officer. From 1987 to October 1992, Mr. Burd was a principal of Burd
& Associates, a management consulting firm. Mr. Burd is also a director of
Safeway and is one of the four representatives of Safeway on Vons' Board of
Directors. See "Principal and Management Shareholders".
Mr. Duda has been President of the Fritz Duda Company, a real estate
investment, building and development firm, for the past ten years.
Mr. Stangeland has been Chairman and Chief Executive Officer of Vons for more
than the past five years.
The following table sets forth certain information about the continuing
directors of Vons:
DIRECTORS CONTINUING IN OFFICE
<TABLE>
<CAPTION>
YEAR
DIRECTOR CURRENT TERM
AGE SINCE WILL EXPIRE
--- -------- ------------
<S> <C> <C> <C>
William S. Davila.................................. 62 1989 1996
James H. Greene, Jr. .............................. 43 1993 1996
Robert I. MacDonnell............................... 56 1988 1995
Peter A. Magowan................................... 51 1988 1995
Charles E. Rickershauser........................... 65 1991 1996
Elizabeth A. Sanders............................... 48 1991 1996
William Y. Tauscher................................ 44 1987 1995
</TABLE>
Mr. Davila served as President of Vons and its predecessor from 1984 until
his retirement on March 31, 1992, after which he became President Emeritus.
From July 1987 to February 1990, he was President and Chief Operating Officer
of Vons. Mr. Davila also serves on the Boards of Directors of Wells Fargo Bank,
Pacific Gas and Electric Company and Geo. A. Hormel & Co.
3
<PAGE>
Mr. Greene has been an executive of KKR for the last five years and a General
Partner of KKR since January 1, 1993. Affiliates of KKR may be deemed to be
controlling persons of Safeway. Mr. Greene is also a director of Safeway,
Owens-Illinois, Inc., Owens-Illinois Group, Inc., RJR Nabisco Holdings Corp.,
RJR Nabisco, Inc., The Stop & Shop Companies, Inc. and Union Texas Petroleum
Holdings, Inc. He is one of four representatives of Safeway on Vons' Board of
Directors. See "Principal and Management Shareholders."
Mr. MacDonnell has been a General Partner of KKR since 1982. Affiliates of
KKR may be deemed to be controlling persons of Safeway. Mr. MacDonnell is also
a director of Safeway, Owens-Illinois Group, Inc., Owens-Illinois, Inc. and
AutoZone, Inc. He is one of four representatives of Safeway on Vons' Board of
Directors. See "Principal and Management Shareholders."
Mr. Magowan is Chairman of the Board of Safeway and President and Managing
General Partner of the San Francisco Giants. Mr. Magowan was Chief Executive
Officer of Safeway from 1980 to May 1, 1993. He served as President of Safeway
from March 1988 to October 1992. He also serves on the Board of Directors of
Chrysler Corporation and Caterpillar, Inc. He is one of four representatives of
Safeway on Vons' Board of Directors. See "Principal and Management
Shareholders."
Mr. Rickershauser served as Chairman of the Board and Chief Executive Officer
of the Pacific Stock Exchange Incorporated from January 1980 to March 1986, at
which time he joined the law firm of Fried, Frank, Harris, Shriver & Jacobson
of Los Angeles as a partner. In November 1990, Mr. Rickershauser retired. He
now serves as Chairman of the Board of PS Group, Inc., a position he has held
since April 1991. In addition to PS Group, Inc., Mr. Rickershauser also serves
on the Boards of Directors of City National Corporation and its subsidiary,
City National Bank, and Lee Enterprises, Inc.
Ms. Sanders served as Vice President & General Manager of Nordstrom, Inc., a
retail fashion chain, from February 1987 to February 1990. Since February 1990
she has been engaged as a management consultant and professional speaker for
The Sanders Partnership. Ms. Sanders also serves on the Boards of Directors of
H. F. Ahmanson & Co., Carl Karcher Enterprises, Inc., Wal-Mart Stores, Inc. and
Sports Chalet, Inc.
Mr. Tauscher served as Chairman and Chief Executive Officer of FoxMeyer
Corporation, a drug wholesaler, from 1979 to 1988, and since 1988 has been
Chairman, Chief Executive Officer and President of Vanstar, Inc. formerly
ComputerLand Corporation.
MEETINGS OF BOARD OF DIRECTORS AND BOARD COMMITTEES
During the 1993 fiscal year, Vons' Board of Directors held six meetings and
took action once by Unanimous Written Consent. Vons' Board has a standing
Executive Committee, Audit Committee and Compensation Committee. The Executive
Committee, composed of Mr. Stangeland, Chairman, Mr. Duda, Mr. MacDonnell, and
Mr. Tauscher, met twice in 1993. Its functions are to exercise such powers as
the full Board of Directors may delegate to the Executive Committee from time
to time. The Audit Committee, composed of Mr. Magowan, Chairman, and Ms.
Sanders, met two times during the fiscal year. Its functions are (1) to meet
periodically with Vons' management and independent public accountants to make
inquiries regarding the manner in which the responsibilities of each are being
discharged and to report thereon to the Board; (2) to recommend for the
approval of Vons' Board of Directors the annual appointment of independent
public accountants; and (3) to review with the independent public accountants
the scope of audit and non-audit assignments, the accounting principles being
applied by Vons, the scope of internal financial and auditing procedures and
the adequacy of internal controls. The Compensation Committee, composed of Mr.
Tauscher, Chairman, and Mr. Rickershauser, met six times during the fiscal year
and took action once by unanimous written consent. Its functions have been
(1) to review Vons' general compensation strategy; (2) to establish the
salaries of, and review and administer the annual bonus and benefit and
compensation programs for, Vons' officers; (3) to review and administer the
Vons 1990 Stock Option and Restricted Stock Plan; and (4) to approve any
contractual obligations relating to employment of officers. However, in the
Fall
4
<PAGE>
of 1993, following the Board's decision to institute a search for a new Chief
Executive Officer to succeed Mr. Stangeland upon his retirement in 1994, the
Board assumed responsibility for executive compensation matters, other than
certain ministerial duties for which the Compensation Committee is still
responsible. For additional information with respect to the Compensation
Committee, see "Executive Compensation-Compensation Committee Interlocks and
Insider Participation."
No current member of the Board of Directors attended fewer than 75% of the
total number of meetings of the Board or of the Committees, if any, on which
such member served that were held during the fiscal year ended January 2, 1994.
PRINCIPAL AND MANAGEMENT SHAREHOLDERS
PRINCIPAL SHAREHOLDERS
Except as set forth below, the management of Vons is not aware of any
beneficial holder of 5% or more of outstanding Vons common stock as of the
Record Date.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT
OWNED ON OF
RECORD DATE CLASS
------------ -------
<S> <C> <C>
Safeway, Inc.(1)........................................... 15,126,000 34.9
Safeway Southern California, Inc.
Fourth and Jackson Streets
Oakland, California 94660
</TABLE>
- --------
(1) Safeway Southern California is an indirect wholly-owned subsidiary of
Safeway, approximately 64% of the outstanding stock of which is owned by
two limited partnerships, of which the sole general partner is KKR
Associates, a New York limited partnership and an affiliate of KKR. KKR
Associates, in its capacity as general partner, may be deemed to
beneficially own such shares of common stock of Safeway. George R. Roberts,
Henry R. Kravis, Robert I. MacDonnell, Paul E. Raether, Michael W.
Michelson, Saul A. Fox, James H. Greene, Jr. and Michael T. Tokarz are the
general partners of KKR Associates and, in such capacity, may be deemed to
have beneficial ownership of any shares of common stock of Safeway
beneficially owned by KKR Associates, but disclaim any such beneficial
ownership. Steven A. Burd, a director of Vons and President and Chief
Executive Officer of Safeway, James H. Greene, Jr., a director of Vons and
a general partner of KKR Associates, Robert I. MacDonnell, a director of
Vons and a general partner of KKR Associates, and Peter A. Magowan, also a
Vons director and Chairman of the Board of Safeway, all disclaim beneficial
ownership of Vons common stock owned by Safeway Southern California and
Safeway.
5
<PAGE>
MANAGEMENT SHAREHOLDERS
The following table sets forth as to each director, nominee and certain
executive officers, individually, and all executive officers and directors as a
group, the number of shares of Vons common stock beneficially owned by such
person or group as of the Record Date.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------------
CURRENTLY
SHARES OF EXERCISABLE TOTAL AS
COMMON STOCK PERCENT
NAME OF BENEFICIAL OWNER CAPACITY STOCK OPTIONS(2) OF CLASS
------------------------ -------- --------- ----------- --------
<S> <C> <C> <C> <C>
Steven A. Burd(6)..................... Director 0 1,697 *
Neill F. Crowley, III................. Executive Vice President 0 49,740 *
William S. Davila..................... Director 173,494 7,003 *
Fritz L. Duda(3)(4)................... Director 1,035,506 10,361 2.41%
Dennis K. Eck(5)...................... Former President and 60,000 146,000 *
Chief Operating Officer
James H. Greene, Jr.(6)............... Director 0 1,697 *
Michael F. Henn(7)(8)................. Executive Vice President 236,639 25,000 *
Peter M. Horn, III.................... Executive Vice President 70,368 35,000 *
Robert J. Kelly....................... Executive Vice President 29,847 24,875 *
Robert I. MacDonnell(6)............... Director 0 8,644 *
Peter A. Magowan(6)................... Director 0 12,359 *
Garrett R. Nelson(5)(8)............... Former Executive 213,970 13,000 *
Vice President
Charles E. Rickershauser, Jr.(8)...... Director 5,000 5,815 *
Elizabeth A. Sanders.................. Director 2,500 5,815 *
Roger E. Stangeland(9)(10)(11)........ Chairman and Chief 940,692 47,500 2.28%
Executive Officer
William Y. Tauscher................... Director 88,500 6,359 *
Directors and Executive Officers as a
Group (17 persons)(3)(4)(5)(6)(7)
(8)(9)(10)(11)....................... 2,856,516 417,704 7.48%
</TABLE>
- --------
* Less than 1%
(1) Unless otherwise indicated, (i) beneficial ownership is direct, and (ii)
the person indicated has sole voting and investment power over the shares
of common stock indicated.
(2) Shares that may be acquired pursuant to options exercisable within 60 days
of the Record Date. All expressions of percentage of shares held assume
that the options of the particular person or group in question have been
exercised and no others.
(3) Shares held in trust, of which Mr. Duda is the trustee.
(4) Does not include 4,000 shares of Vons common stock held by Duda Children's
Trust No. 3. Mr. Duda disclaims any beneficial ownership of such shares,
inasmuch as they are administered by an independent trustee, and he has no
shared or other voting power over them.
(5) Shares owned jointly with spouse.
(6) Does not include 15,126,000 shares of Vons common stock presently owned by
Safeway Southern California and Safeway. See the immediately preceding
table for information regarding shares owned by Safeway Southern
California and Safeway. Mr. Burd, Mr. Greene, Mr. MacDonnell and
Mr. Magowan each disclaim beneficial ownership of the shares of Vons
common stock owned by Safeway Southern California and Safeway.
(7) Does not include 80,000 shares of Vons common stock held by three
children's trusts. Mr. Henn disclaims any beneficial ownership of such
shares, inasmuch as they are administered by an independent trustee and he
has no shared or other voting power over them.
(8) Shares held jointly in trust with spouse.
6
<PAGE>
(9) Does not include 76,072 shares of Vons common stock held by three
children's trusts. Mr. Stangeland disclaims any beneficial ownership of
such shares, inasmuch as they are administered by an independent trustee
and he has no shared or other voting power over them.
(10) Includes 858,692 shares registered in the name of a corporation as to
which Mr. Stangeland claims beneficial ownership and an aggregate of
80,000 shares held by three trusts for which Mr. Stangeland is the
trustee, but in which neither he nor any member of his family has a
pecuniary interest.
(11) Includes 2,000 shares held in a charitable foundation, of which Mr.
Stangeland is a director.
CHANGES IN CONTROL AND VOTING AGREEMENTS
As of December 3, 1987, Vons entered into an Acquisition Agreement and Plan
of Merger and Reorganization, as amended (the "Acquisition Agreement"), among
Vons, certain Vons subsidiaries, Safeway Southern California, Safeway, and
certain subsidiaries of Safeway Southern California, whereby the Safeway
Subsidiaries were acquired by merger, including 162 supermarkets and certain
distribution and processing facilities (the "Acquisition"). At the same time
that it executed the Acquisition Agreement, Vons entered into a Standstill
Agreement with KKR, Safeway Southern California, Safeway and certain of their
affiliates (collectively, the "Safeway Holders") with regard to the Vons common
stock that Safeway Southern California would ultimately receive pursuant to the
Acquisition Agreement and any additional shares that the Safeway Holders may
acquire.
The term of the Standstill Agreement was five years from the date of the
Acquisition, and it expired on August 29, 1993. However, certain provisions
thereof remain operative after expiration of the term. As long as the Safeway
Holders beneficially own at least 10% of the voting stock of Vons, Vons has
agreed to nominate to its Board of Directors two persons designated by the
Safeway Holders; if the Safeway Holders beneficially own between 5% and 10% of
the voting stock of Vons, Vons will nominate one such person. The Standstill
Agreement provides further that, until the later of five years from the date of
the Acquisition or the time that the Safeway Holders in the aggregate own less
than 3% of the voting stock of Vons, the Safeway Holders will have the right
twice to require Vons at its expense to use its best efforts to effect a
registration under the Securities Act of the Vons common stock owned by them.
The Safeway Holders additionally may require Vons at its expense, subject to
the terms of the Standstill Agreement and to certain exceptions, to include
their shares in any registered securities offering commenced by Vons.
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<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation. The materials set forth below contain information on
certain cash and non-cash compensation provided to the following present and
former officers of the Company (the "Named Officers"): (i) Vons' Chief
Executive Officer, (ii) the four other executive officers of the Company
serving at the end of the year who were the most highly compensated executive
officers for fiscal year 1993 and (iii) two former officers who would have been
among the four most highly compensated officers had they been an executive
officer at year-end. The table shows total annual and long-term compensation of
such individuals during the last two fiscal years and certain information for
the previous fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------
LONG-TERM
COMPENSATION
AWARDS
--------------
SECURITIES
PRINCIPAL BASE OTHER ANNUAL UNDERLYING ALL OTHER
NAME POSITION YEAR SALARY (1) BONUS (2) COMPENSATION (3) OPTIONS (#)(4) COMPENSATION(5)
- ---- --------- ---- ---------- --------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Roger E. Stangeland.. Chairman and 1993 $700,660 $ 0 $ 0 40,000 $ 70,061
Chief Executive 1992 $690,000 $689,718 $17,493 40,000 $ 52,255
Officer 1991 $600,000 $375,000 N/A 25,000 N/A
Dennis K. Eck........ Former President 1993 $487,077 $ 0 $ 0 30,000 $1,385,000
and Chief 1992 $534,000 $435,825 $16,554 30,000 $ 41,781
Operating Officer 1991 $485,000 $303,126 N/A 20,000 N/A
Michael F. Henn...... Executive Vice President 1993 $360,788 $ 0 $ 0 20,000 $ 35,657
and Chief Financial and 1992 $328,000 $267,698 $ 7,495 20,000 $ 36,766
Chief Administrative 1991 $290,000 $184,875 N/A 10,000 N/A
Officer
Garrett R. Nelson.... Former Executive 1993 $296,585 $ 0 $ 0 17,000 $ 99,230
Vice President and 1992 $296,000 $219,638 $ 6,979 17,000 $ 37,272
Chief Development 1991 $275,000 $171,875 N/A 10,000 N/A
Officer
Neill F. Crowley III. Executive Vice 1993 $251,012 $ 0 $ 0 14,000 $ 18,812
President, Store 1992 $246,100 $200,854 $ 8,177 14,000 $ 12,266
Support 1991 $142,000(6) $143,750 N/A 52,800(7) N/A
Robert J. Kelly...... Executive Vice 1993 $246,252 $ 0 $ 0 14,000 $ 22,554
President, Procurement/ 1992 $214,000 $174,656 $ 7,007 14,000 $ 22,280
Marketing 1991 $185,000 $115,625 N/A 10,000 N/A
Peter M. Horn, III... Executive Vice President, 1993 $246,066 $ 0 $ 0 14,000 $ 24,826
Store Operations 1992 $228,267 $186,300 $ 9,165 14,000 $ 23,639
1991 $205,000 $128,125 N/A 10,000 N/A
</TABLE>
- --------
(1) Represents the dollar value of cash base salary earned by each Named
Officer during the fiscal year indicated, reflecting base salary reductions
implemented in late 1993 and continuing in 1994. See "Report of the
Compensation Committee." No non-cash base salary was earned by any of the
Named Officers during the fiscal years indicated.
(2) Represents the dollar value of cash bonus earned by the Named Officer with
respect to the fiscal year indicated. No non-cash bonus was earned by any
of the Named Officers with respect to the fiscal years indicated.
(3) Represents reimbursement of income taxes payable by the Named Officer on
account of contributions made by the Company for 1992 profit sharing plan
in excess of applicable tax limits.
(4) Represents the number of stock options granted during the period. No tandem
stock appreciation rights ("SARs") were issued nor were any long-term
incentive plan payouts made.
8
<PAGE>
(5) Represents (i) Company contributions to the profit sharing plan consisting
in 1993 of $8,994 for Messrs. Stangeland, Henn and Crowley, $8,404 for Mr.
Kelly and $8,753 for Mr. Horn; (ii) the Company's matching contribution to
the profit sharing plan in 1993 consisting of $4,717 for Messrs.
Stangeland, Henn, Crowley, Kelly and Horn; (iii) contributions to the 401
(k) wrap-around plan for 1993 of $45,841 for Mr. Stangeland, $12,007 for
Mr. Henn, $5,101 for Mr. Crowley, $3,687 for Mr. Kelly and $4,036 for Mr.
Horn; (iv) above-market interest (as defined in applicable regulations)
accrued on compensation deferred under the 1987 deferred income plan for
1993 of $10,509 for Mr. Stangeland, $9,939 for Mr. Henn, $11,422 for Mr.
Nelson, $5,746 for Mr. Kelly, and $7,320 for Mr. Horn; (v) $87,808 paid to
Mr. Nelson representing 1993 profit sharing contribution, and other amounts
paid in connection with his resignation as an officer; and (vi) $1,250,000
paid to Mr. Eck in settlement of claims and a relocation allowance of
$135,000 incurred at the time of his hire. See "Executive Compensation--
Employment Contracts, Severance Agreements and Change in Control
Arrangements".
(6) Represents partial year salary. Mr. Crowley was employed by the Company in
April 1991.
(7) Includes discounted stock options awarded to Mr. Crowley to acquire 42,800
shares of common stock at $2.50 per share. Such options were awarded as a
one-time incentive upon becoming employed by the Company. Twenty percent of
such options vested upon employment and twenty percent vested upon each
anniversary date thereafter.
Option Grants. Shown below is information on grants of stock options during
the last fiscal year under the Company's 1990 Stock Option and Restricted Stock
Plan to the Named Officers. No restricted stock was awarded under the Plan
during 1993.
OPTION GRANTS IN 1993 FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED GRANT DATE
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE VALUE(2)
- ---- ----------- ---------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Roger E. Stangeland..... 40,000 6.84% $23.71 2/23/2003 $570,400
Dennis K. Eck........... 30,000 5.13% $23.71 2/23/2003 $427,800
Michael F. Henn......... 20,000 3.42% $23.71 2/23/2003 $285,200
Garrett R. Nelson....... 17,000 2.91% $23.71 2/23/2003 $242,420
Neill F. Crowley, III... 14,000 2.39% $23.71 2/23/2003 $199,640
Robert J. Kelly......... 14,000 2.39% $23.71 2/23/2003 $199,640
Peter M. Horn III....... 14,000 2.39% $23.71 2/23/2003 $199,640
</TABLE>
- --------
(1) All options shown were granted on February 23, 1993 and are exercisable in
cumulative 25% installments commencing one year from date of grant, with
full vesting occurring on the fourth anniversary date. Vesting may be
accelerated in certain events relating to changes in control of the
Company. Options were granted at an exercise price equal to the average
closing price of the Company's common stock for the ten trading days prior
to the grant date. Options are nontransferable other than by will or by the
laws of descent and distribution upon the death of the grantee, and will
terminate one year after termination of employment by reason of retirement,
disability or death, and will terminate 30 days after termination of
employment for any other reason. The grants to Mr. Eck and Mr. Nelson have
been cancelled pursuant to their resignation as officers. See "Employment
Contracts, Severance Agreements and Change in Control Arrangements". The
Plan under which all options were granted is administered by the
Compensation Committee of the Board, which retains discretion, subject to
certain limits, to modify the terms of outstanding options.
(2) Present value determinations were made using a Black-Scholes option pricing
model based on the following assumptions: an expected stock-price
volatility factor of .353, a risk-free rate of return of 6.5%, a dividend
yield of 0.00% and a time of exercise of 10 years. The actual value, if
any, an executive may
9
<PAGE>
realize will depend on the excess of the stock price over the exercise price
on the date the option is exercised, so there is no assurance the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model.
Option Exercises. Shown below is information with respect to the exercise of
stock options during the last fiscal year by each of the Named Officers and the
value of unexercised options held by each of them as of the end of the last
fiscal year.
AGGREGATED OPTION EXERCISES IN 1993 FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
YEAR-END (#) YEAR-END
------------- -------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Roger E. Stangeland..... 0 $ 0 26,250 $ 0
83,750 $ 0
Dennis K. Eck........... 0 $ 0 116,000 $810,000(2)
30,000 $405,000(2)
Michael F. Henn......... 0 $ 0 13,750 $ 0
41,250 $ 0
Garrett R. Nelson....... 0 $ 0 13,000 $ 0
0 $ 0
Neill F. Crowley, III... 0 $ 0 34,180 $346,680(2)
46,620 $231,120(2)
Robert J. Kelly......... 0 $ 0 16,000 $ 12,600
31,375 $ 0
Peter M. Horn III....... 0 $ 0 26,125 $ 80,640
31,375 $ 0
</TABLE>
- --------
(1) Based on closing price of $16.00 for the Company's common stock on the New
York Stock Exchange on December 31, 1993 (the last trading day prior to the
end of the fiscal year).
(2) Includes discounted stock options awarded prior to 1992 and a one time
incentive upon becoming employed by the Company.
Long-Term Incentive Compensation. In February 1992, the Board of Directors
adopted the Company's Long-Term Incentive Compensation Plan for certain of
Vons' most senior executive officers (the "LTIP"). The LTIP is administered by
the Board's Compensation Committee, no member of which is a participant. The
Compensation Committee may adopt, amend and rescind terms and provisions of the
LTIP, subject to the vested rights of participants. Annual awards under the
LTIP are granted in the form of performance units, which provide a payout to
covered executives if performance goals, established at the time of grant, are
achieved over a three-year period. The LTIP is the only plan of the Company
intended to serve as an incentive for performance to occur over a period longer
than one fiscal year, excluding stock option and restricted stock plans.
10
<PAGE>
The following table presents information respecting each award under the LTIP
made to a Named Officer in the last fiscal year. Performance units were awarded
to the Named Officers and other participants in amounts proportionate to the
sum of each individual's annual salary plus target bonus. Performance units
granted in 1993 provide for a payout, if any, in 1996 based upon the
performance of the Company as measured against goals established for the period
covering fiscal 1993, 1994 and 1995. Such goals consist of specified levels of
return on equity and increases in earnings per share that constitute
confidential information of the Company. Payout, if any, in 1996 may range from
zero to twice the target award level, depending upon the Company's performance.
LONG-TERM INCENTIVE PLAN--AWARDS IN 1993 FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERIOD UNTIL UNDER NON-STOCK PRICE-BASED PLANS
NUMBER OF MATURATION ---------------------------------
NAME UNITS (#) OR PAYOUT(1) THRESHOLD(2) TARGET(3) MAXIMUM(4)
---- --------- ------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Roger E. Stangeland... 3,922 3 years $196,100 $392,200 $784,400
Dennis K. Eck(5)...... 2,760 3 years $138,000 $276,000 $552,000
Michael F. Henn....... 1,825 3 years $ 91,250 $182,500 $365,000
Garrett R. Nelson(6).. 1,530 3 years $ 76,500 $153,000 $306,000
Neill F. Crowley, III. 1,271 3 years $ 63,550 $127,100 $254,200
Robert J. Kelly....... 1,271 3 years $ 63,550 $127,100 $254,200
Peter M. Horn III..... 1,271 3 years $ 63,550 $127,100 $254,200
</TABLE>
- --------
(1) Performance units vest ratably over the three-year performance period.
Vesting may be accelerated in certain events relating to changes in control
of the Company. Under such circumstances, the unvested portion of cash
incentive compensation up to the time of such change in control, together
with such amounts as have already become vested, will be calculated and
will become due and payable.
(2) The "threshold" amount is the minimum amount payable for a stated level of
Company performance determined at the time the award was made. If such
stated level of Company performance is not achieved, then the payout in
1996 for awards made in 1993 would be zero.
(3) The "target" amount is the amount payable if the performance targets
established at the time the award was made are achieved.
(4) The "maximum" amount is the maximum amount payable with respect to the
identified fiscal 1993 award under the LTIP.
(5) Mr. Eck's participation in the LTIP terminated pursuant to his severance
arrangements. See "Employment Contracts, Severance Agreements and Change in
Control Arrangements."
(6) Under Mr. Nelson's severance arrangement, his payout will be limited to
one-third of the payout with respect to the 1993 award, if achieved.
11
<PAGE>
DEFINED BENEFIT PLANS
The following table shows the estimated annual retirement benefit payable on
a straight life annuity basis to participating employees, including officers,
in the earnings and years of service classifications indicated, under the Vons
Pension Plan (the "Pension Plan") and the Vons Supplemental Executive
Retirement Plan ("SERP"). SERP benefits have been awarded to officers only, and
an officer qualifying for both the Pension Plan and SERP will be paid a
retirement benefit in accordance with the terms of both plans. The illustration
below assumes retirement at January l, 1994, at the normal retirement age of
65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
BASED UPON INDICATED YEARS OF SERVICE (2)(3)
--------------------------------------------------------------------------
REMUNERATION(1) 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
--------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 100,000.................. $ 30,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
150,000.................. 45,000 60,000 60,000 60,000 60,000
200,000.................. 60,000 80,000 80,000 80,000 80,000
300,000.................. 90,000 120,000 120,000 120,000 120,000
400,000.................. 120,000 160,000 160,000 160,000 160,000
500,000.................. 150,000 200,000 200,000 200,000 200,000
600,000.................. 180,000 240,000 240,000 240,000 240,000
700,000.................. 210,000 280,000 280,000 280,000 280,000
800,000.................. 240,000 320,000 320,000 320,000 320,000
900,000.................. 270,000 360,000 360,000 360,000 360,000
1,000,000.................. 300,000 400,000 400,000 400,000 400,000
1,250,000.................. 375,000 500,000 500,000 500,000 500,000
</TABLE>
- --------
(1) The calculation of retirement benefits generally is based upon average
compensation for the highest five years of the ten years preceding
retirement. Such compensation includes that listed in the Summary
Compensation Table, except that the amounts shown under the column entitled
"All Other Compensation" are excluded (other than the Company's matching
contribution to the profit sharing plan and above-market interest accrued
on compensation deferred under the 1987 deferred income plan).
(2) "Years of Service" equals the total number of credited years under a plan,
which may be different for purposes of the Pension Plan and the SERP.
(3) Benefits are not subject to any deduction for social security or other
offset amounts.
As of January 3, 1994, the credited years of service under both the Pension
Plan and SERP for the Named Officers were as follows: Mr. Stangeland, 33 years,
5 months; Mr. Henn, 15 years, 8 months; Mr. Nelson, 9 years; Mr. Horn, 38
years, 2 months; Mr. Kelly, 30 years, 6 months; Mr. Eck, 3 years, 11 months
under the Pension Plan and 7 years, 10 months under the SERP; and Mr. Crowley,
2 years, 8 months under the Pension Plan and 5 years, 4 months under the SERP.
With respect to benefits payable to Mr. Eck and Mr. Nelson, see "Employment
Contracts, Severance Agreements and Change in Control Arrangements."
EMPLOYMENT CONTRACTS, SEVERANCE AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
Employment Contracts. The Company has an employment agreement with Neill F.
Crowley, III, Executive Vice President, Store Support, entered into in April
1991. Mr. Crowley's agreement, as amended, provides for a minimum base salary
of $230,000. Mr. Crowley received a $50,000 bonus upon joining the Company and
$50,000 in consideration of his forfeiture of earned but unpaid long-term
incentive pay with his former employer. Mr. Crowley was guaranteed a minimum
$90,000 Performance Incentive Award for 1991. Mr. Crowley received 2 years
credit for participation in the SERP upon employment, receives 2 years credit
for each year of employment until he has 20 years of credit, and thereafter
receives one year of credit for each year of employment. In connection with the
agreement, as amended, he was granted options to acquire 42,800 shares of
Company common stock at an exercise price of $2.50 per share. Upon employment,
12
<PAGE>
20% of such options vested and 20% will vest upon each anniversary date
thereafter. His agreement provides for three years of severance benefits,
declining to 18 months of benefits after three years of employment, in the
event of termination of employment for any reason other than resignation or
cause as defined in the agreement.
Severance Agreements. The Company has entered into severance agreements with
Dennis K. Eck, former President and Chief Operating Officer, dated October 29,
1993, and Garrett R. Nelson, former Executive Vice President and Chief
Development Officer, dated December 2, 1993.
The agreement with Mr. Eck provides that he resign as President and Chief
Operating Officer effective October 31, 1993 and remain as an employee
thereafter for a period of two years at a salary of $130,000 per year
performing advisory and consulting services. Mr. Eck will not be eligible for
any bonus or LTIP payments. He will continue to receive life, medical and
disability insurance benefits until October 31, 1998 unless he obtains earlier
employment, and all unvested stock options of Mr. Eck are terminated and
cancelled. Under his agreement, Mr. Eck will receive a lump sum SERP benefit of
$734,362 payable upon his fifty-fifth birthday, provided he is not in default
of his agreement and will be vested in the Company's health plan for retired
employees. During the remaining term of his employment, Mr. Eck may not compete
with the Company or work for or with anyone who does. Pursuant to the
agreement, Mr. Eck was also paid $1,250,000 in settlement of claims against the
Company and, in connection therewith, the Company and Mr. Eck have given mutual
releases of liability. In a separate arrangement, the Company and Mr. Eck also
agreed for payment of $135,000 to Mr. Eck to terminate the Company's prior
obligation, incurred at the time of his hire, to include a residence of Mr. Eck
in the Company's relocation purchase program.
The agreement with Mr. Nelson provides that he resign as Executive Vice
President and Chief Development Officer effective November 30, 1993 and remain
as a part-time employee of the Company, supervising real estate and
construction matters at an annual salary of $183,600 until he retires on March
31, 1995. At the time of his resignation, Mr. Nelson received payments totaling
$87,808 for accrued vacation, cash equivalent of a 1993 profit sharing benefit,
cost of outplacement counseling and salary in lieu of notice. Mr. Nelson will
continue to receive health care benefits and to accrue interest in his deferred
compensation account until his retirement in March 1995, but he will receive no
other benefits nor will his stock options continue to vest. Mr. Nelson's
participation in the LTIP will terminate with awards for 1992 and 1993, if any,
to be vested at two-thirds and one-third, respectively. Upon his retirement in
1995, Mr. Nelson will receive a lump sum SERP payment of $782,655 and will be
vested in the Company's health plan for retired employees.
Change in Control Arrangements. All officers of the Company (28 persons) have
executed agreements under a Severance Plan for Senior Management and Key
Employees (the "Severance Plan"). The Severance Plan was adopted in 1992.
Under the terms of the Severance Plan, a participating executive will
generally become entitled to receive benefits if the executive's employment is
terminated by the executive for "Good Reason," or by the Company without
"Cause," within two years following a "Change of Control." For purposes of the
Plan, a "Change of Control" is deemed to include (i) any acquisition of stock
if the acquiring person would thereafter be the beneficial owner of 50% or more
of the Company's voting stock, (ii) a merger or consolidation of the Company
resulting in the holders of the Company's voting stock immediately prior to
such transaction holding less than 50% of the total voting common stock of the
surviving corporation after such transaction, (iii) a sale or exchange of all
or substantially all of the property and assets of the Company, or (iv) any
change over a two-year period or less in a majority of the Board of Directors
that is not approved by a majority of the directors either in office at the
commencement of such two-year period or who were elected with the approval of a
majority of directors in office at the commencement of such two-year period.
The term "Cause" is defined to mean the commission of certain crimes, habitual
neglect of duty if such neglect is not cured within five days of notice, or
knowing, intentional or malicious conduct contrary to the Company's best
interests that causes the Company material harm. An executive's termination of
employment is deemed for "Good Reason" if any of the following occur within six
months of such termination without the executive's
13
<PAGE>
consent: (i) substantial change in the nature, or diminution in the status, of
the individual's duties or position, (ii) reduction in the annual base salary
or overall value of benefits provided to the individual, (iii) failure to
continue any incentive compensation plan or a reduction of the employee's
relative participation without providing an alternative plan, (iv) reduction in
vacation days or a material reduction in other benefits, (v) relocation of the
executive's principal place of business by more than 35 miles, or (vi) breach
or failure to assume the Severance Plan or any agreement entered into pursuant
to the Severance Plan; provided, that, for purposes of clause (ii) through
(iv), "Good Reason" will not exist if the aggregate value of all salary,
benefits, incentive compensation and other compensation is reasonably
equivalent to the value of such items before the Change of Control. The Company
considers it unlikely that the employment of all of the executives anticipated
to be covered under the Severance Plan would be terminated following a Change
of Control.
The benefits payable under the Severance Plan consist of a lump sum cash
payment equal to from one to two and one-half times the sum of (a) the higher
of (i) the executive's annual base salary at the time of termination or (ii)
the highest annual base salary of the executive during the three fiscal years
prior to the Change of Control, and (b) the average annual short-term incentive
compensation bonus and average annual profit sharing plan contribution for the
executive with respect to any of the three fiscal years preceding the
executive's termination. Other benefits provided under the Severance Plan
include the addition of between one and two and one-half years of credited
service for all purposes under each of the Company's retirement plans, except
the Profit Sharing Plan, and, subject to certain setoffs for benefits earned in
subsequent employment, continuation of certain health, disability,
dismemberment and life insurance benefits for three years. Participation at the
two and one-half times level has been provided to Messrs. Stangeland, Henn,
Crowley, Horn and Kelly. In lieu of participation at such rate, each of Messrs.
Stangeland and Henn will be entitled to receive severance benefits at the one
and one-half times level if such individual voluntarily resigns his employment
absent "Good Reason" at the end of the first year following a Change of
Control. The Severance Plan is anticipated to have an initial term of two years
and to thereafter be subject to cancellation or amendment by the Company on two
years' prior notice given after the conclusion of such initial term. Benefits
under the Severance Plan may be subject to an excise tax payable by the
executive, and may not be deductible for tax purposes by the Company, to the
extent they exceed certain limits set forth in the Internal Revenue Code and
applicable state tax codes.
The 1990 Stock Option and Restricted Stock Plan provides, under certain
circumstances, for options to vest upon a change of control. The LTIP also
provides, under certain circumstances, for the vesting of certain benefits upon
a change of control. See "Executive Compensation--Compensation of Executive
Officers."
DIRECTOR COMPENSATION
Directors who are not also employees of Vons receive an annual retainer fee
of $20,000 per year, as well as a fee of $1,000 paid for each Board of
Directors' meeting attended and a fee of $1,000 for each Committee meeting
attended. In addition, the Chairpersons of the Compensation and Audit
Committees each receive an annual chairperson retainer fee of $4,000.
On September 19, 1991, the Board of Directors adopted the Directors' Stock
Option Plan (the "DSOP") covering the grant of up to 225,000 shares of common
stock. The DSOP was approved by shareholder vote at the Annual Meeting of
Shareholders held on May 13, 1992, and became effective on that date. Members
of the Board of Directors who are not also employees of Vons are eligible to
receive options under the DSOP for up to a maximum of 30,000 shares of common
stock. Options are granted pursuant to a formula, under which there is an
appointment grant (the "Appointment Grant") which was made for all current
eligible directors at the effective date of the DSOP and which will be made for
new eligible directors joining thereafter. In addition, annual grants (the
"Annual Grants") are awarded to all eligible directors on the date of each
annual meeting of shareholders including the meeting at which a director is
first elected. Appointment Grants are made in the amount of shares which, at
"fair market value", on the date of grant are equal in value to six times the
annual retainer then paid to directors (currently $20,000) as adjusted from
time to time. Annual
14
<PAGE>
Grants will be in an amount of Vons common stock equal in value on the date of
grant to twice the annual retainer. "Fair market value" of a share for purposes
of the DSOP equals the average closing price for the ten trading days prior to
the exercise or grant date of a share of Vons common stock on the NYSE.
During 1993, Appointment Grants of 6,788 shares were made to Messrs. Burd and
Greene and Annual Grants of 1,828 shares were made to the other non-executive
directors.
Under the DSOP, eligible directors may also elect to forego cash payment of
all or a portion of their annual retainer fee, including Chairperson fees, and
receive additional stock option grants instead. The exercise price of each
option so granted will be discounted 20% from the "fair market value" of a
share of Company common stock on the date of grant, and the number of options
to be granted will be determined by dividing the discount into the non-cash
retainer fee.
Options under the DSOP are non-transferable except by inheritance upon an
optionee's death, terminate one year after the retirement, disability or death
of the optionee, and are otherwise granted for ten year terms. Director options
are exercisable in cumulative 25% installments commencing six months from the
date of grant and continuing on each anniversary of the date of grant
thereafter, with full vesting occurring on the third anniversary date. Vesting
may be accelerated in certain events relating to changes in control of the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of two directors: Mr. Tauscher,
Chairman, and Mr. Rickershauser. However, as indicated below, in the fall of
1993, the independent members of the Board of Directors assumed responsibility
for executive compensation matters other than certain ministerial duties for
which the Compensation Committee is still responsible. Consequently, commencing
at that time, the Compensation Committee, as well as the other independent
members of the Board of Directors, Mssrs. Burd, Duda, Greene, MacDonnell, and
Magowan, and Ms. Sanders, constitute the Compensation Committee for purposes of
the below report. For a description of the background of each of these
individuals and their term of service on the Board of Directors, see "Election
of Directors."
Mr. Tauscher is a partner with Mr. Duda, Mr. Stangeland and other unrelated
parties in Newport Via Lido Associates, a California limited partnership formed
in 1986 to acquire a shopping center containing office, commercial and retail
space, including a Vons store. Vons makes annual fixed lease payments of
$85,000 in connection with such supermarket. In the Company's opinion, the
lease was negotiated by Vons on an "arm's length" basis on terms and conditions
no less favorable to Vons than were otherwise available from independent third
parties.
Mr. Tauscher is a general partner with Mr. Duda, Mr. Stangeland, their wives
and other unrelated parties in Warehouse Investment Partners, a California
general partnership ("Warehouse Partners"). In December 1986, Vons Delaware
entered into an agreement to sell certain leaseholds including two located in
New Jersey and up to $200,000 of other miscellaneous assets to Warehouse
Partners. Vons Delaware's ownership of the leaseholds and the other assets
resulted from the 1985 leveraged buy-out of other businesses from HMI, along
with Vons' grocery business, and the properties were never used in the
operations of Vons or Vons Delaware. Because of various intervening factors,
the Company has been unable to perform its obligation to close the transaction.
A special committee of directors having no interest in the transaction reviewed
the agreement, and with the assistance of an independent appraisal firm and
advice of outside legal counsel, determined that it was in the best interests
of the Company, as both a worthwhile investment in the leaseholds and an
elimination of potential legal exposure, to enter into an agreement with
Warehouse Partners to terminate the transaction. After consultation with
outside counsel and review of the independent appraisal, the special committee
recommended and the Board approved, with interested directors abstaining, a
termination agreement with Warehouse Partners wherein the transaction was
terminated and the Company
15
<PAGE>
received from Warehouse Partners a general release of all liability in
consideration for the payment of $2,250,000.
Vons leases a San Diego warehouse facility from Miramar Associates, a
California general partnership. The general partners of Miramar Associates are
Vons (50%) and Fritz Duda Interests, a Texas general partnership (50%), of
which Mr. Duda, a director of Vons, is a general partner. The lease payments to
Miramar Associates approximate $2 million per annum. The lease was negotiated
by a predecessor of Vons on an "arm's length" basis on terms and conditions no
less favorable to Vons than were otherwise available from independent third
parties.
Property Development Associates is a partnership 80% owned by a subsidiary of
Safeway and 20% owned by M&T Group, which is a subsidiary of Pacific Resources
Associates L.P., which is, in turn, an affiliate of KKR ("PDA"). PDA and
Safeway have interests in eight supermarket properties located in Southern
California which are leased to Vons. Rentals under such leases in 1993 totaled
$710,000. In addition, Vons is secondarily liable under four leases, for which
the annual minimum rental is $175,000, all of which is currently being paid by
assignees. All of the leases relating to the above properties were negotiated
by Vons or its predecessors on an "arm's length" basis, and none of the lease
terms have been modified or amended since PDA's or Safeway's acquisition.
In 1993, Safeway and its affiliates sold certain inventory and other items to
the Company for an aggregate amount of approximately $2.5 million. Vons sold
certain inventory items to Safeway and its affiliates in 1993 for an aggregate
amount of approximately $2.4 million. All such sales between the parties were
on an "arm's length" basis.
In the Acquisition (see "General Information--Business History"), Vons paid
$288.5 million in cash (including $20 million allocable to an Agreement Not to
Compete and estimated post-closing adjustments) and issued 11,667,800 shares of
Vons common stock to Safeway Southern California. The parties also agreed to
share certain of the expenses incurred in connection with the Acquisition and
entered into various other agreements. The Agreement Not to Compete provides
that, for stated periods of time, Safeway, Safeway Southern California, its
immediate parent, and their affiliates may not (a) engage in the retail grocery
business in any county in California or Nevada where the Safeway Subsidiaries
did business immediately prior to the Acquisition, (b) permit or license any
entity to use trademarks, trade rights or similar rights owned or used by them
in any such county or (c) disclose any of Vons' confidential information or
trade secrets. Mr. MacDonnell, a director of Safeway, and Mr. Magowan, a
director and chief executive officer of Safeway, became directors of Vons after
the Acquisition. Mr. Burd, President, Chief Executive Officer and a director of
Safeway, and Mr. Greene, a director of Safeway, have subsequently become
directors of Vons. Under the Acquisition Agreement, each party agreed to
indemnify other parties for liability arising from or relating to a breach of,
or a failure to perform, certain of such party's representation(s),
warrant(ies), covenant(s) or agreement(s) in the Acquisition Agreement and in
certain other agreements and documents entered into or furnished pursuant to
the Acquisition Agreement or any document furnished or to be furnished under
the Acquisition Agreement.
In accordance with a Board of Directors' policy encouraging stock ownership
by directors and authorizing loans to facilitate such ownership, Mr.
Rickershauser borrowed funds from the Company in 1992 to purchase 5,000 shares
of Vons common stock. The indebtedness is evidenced by promissory notes secured
by the common stock purchased. The notes accrue interest at the Federal mid-
term rate in effect each month and the notes and accrued interest are due on
December 31, 1997. As a result, at March 27, 1994, Mr. Rickershauser was
indebted to the Company in the aggregate amount of approximately $132,230,
including accrued interest (the highest amount outstanding since the beginning
of the 1993 fiscal year).
16
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The independent members of the Board of Directors have furnished the
following report on employee compensation. Such report shall not be deemed to
be incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent that Vons
specifically incorporates the report by reference, and shall not otherwise be
deemed soliciting material or be deemed filed under such Acts.
The Compensation Committee of the Board of Directors has been responsible for
the review and administration of the Company's various compensation plans,
including its stock option plan, annual salary and bonus plan and its Long Term
Incentive Plan ("LTIP"). The Compensation Committee fulfilled these
responsibilities for most of 1993; however, in the Fall of 1993, following the
Board's decision to institute a search for a new Chief Executive Officer to
succeed the incumbent CEO upon his retirement in 1994, the Board of Directors
assumed responsibility for executive compensation matters other than certain
ministerial duties for which the Compensation Committee is still responsible.
Consequently, commencing at that time, the Compensation Committee, as well as
the non-management members of the Board of Directors, constitute the
Compensation Committee for purposes of this report.
The Company's overall compensation plans, as well as the compensation of all
officers, is reviewed by the Committee, including applicable performance
criteria. In late 1991, the Committee, with the assistance of a nationally
recognized compensation consulting firm, undertook a comprehensive review of
the Company's compensation plans, which resulted in the adoption of appropriate
compensation levels and the basic structure of the compensation plans currently
in effect. The Committee's review considered several factors, including the
Company's performance, its performance relevant to its peers, and market
compensation levels for similar executive positions at similarly situated
companies. These included a diversified group of high performance retailers, as
well as a group of supermarket retailers, including seven of the ten companies
currently included in the Company's Top Ten Supermarkets peer group index
described under the caption Stock Price Performance in the Company's Proxy
Statement. Performance measures which were reviewed included absolute levels of
and/or changes in total shareholder return, return on equity, cash flow return
on assets and sales and earnings per share. These measures were not assigned
specific weights in the analysis. The Committee's analysis and subsequent
decisions resulted in compensation rankings for executive officers, including
Mr. Stangeland, within an approximate range of the 50th to 75th percentile of
compensation at that time for comparable positions at similarly situated
companies.
Subsequent to the 1991 review, the overall structure and makeup of and
policies respecting the Company's compensation programs has not changed
materially. Inasmuch as the 1993 total compensation of no current executive
officer exceeded the limitations for deductibility recently adopted for 1994 in
Section 162(m) of the Internal Revenue Code, the Committee has not yet
addressed the application of this change to its compensation programs. The
Committee will consider whether any amendments to such plans are appropriate to
comply with Section 162(m).
The compensation policy of the Company is that a significant portion of the
compensation of members of middle and upper management should be contingent
upon the performance of the Company, its stock price, and/or the individual
contribution of each such manager. Therefore, the annual compensation of all
store managers and assistant managers, and most administrative managers, as
well as all officers, includes a bonus component subject to performance.
Performance for purposes of the annual bonus award is generally measured
against the annual budgeted earnings per share or operating profit set at the
beginning of the year for the total Company and/or the particular segment of
the Company applicable to a given individual. Long term compensation is
affected by the Company's stock price as it relates to stock options and by the
financial performance of the Company with respect to specified levels of return
on equity and increases in earnings per share versus targets established under
the LTIP. As a result, a significant portion of the management structure's
compensation is "at risk". For Mr. Stangeland, approximately 55% of his total
targeted compensation, inclusive of LTIP payouts but exclusive of stock
options, is at risk based on Company
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performance. For executive officers other than Mr. Stangeland who also
participate in the LTIP, approximately 50% of total targeted compensation,
inclusive of LTIP payouts but exclusive of stock options, is at risk.
Compensation for other officers and managers is at risk with respect to lesser
(but still significant) levels, depending upon the nature of the position and
level of responsibility.
The following discussion summarizes the compensation decisions undertaken for
1993, for the various components of the Company's compensation programs,
utilizing the aforesaid overall structure.
Base Salary. The Company's base salary structure for 1993 generally was
increased by 3.25%, in keeping with market place changes and inflation. Mr.
Stangeland's salary was increased at the beginning of the year to an annual
rate of $713,000, which reflected a 3.25% increase, consistent with the overall
salary structure change. Other executive officer salaries were similarly
increased, plus adjustments were made where appropriate in light of increased
responsibilities. These changes were consistent with the Company's record year
in 1992 for operating income and earnings per share, especially in relation to
the performance of peer companies. In the third quarter of 1993, however, the
Company implemented a strategic repositioning and restructuring plan (the
"Restructuring Plan") in response to poor sales and, in the latter half of
1993, deteriorating earnings performance. In conjunction with the Restructuring
Plan, which included aggressive staff and expense reduction programs, Mr.
Stangeland and the other executive officers of Vons voluntarily agreed to
immediate salary reductions of 15% and 10%, respectively. In addition, no
overall salary structure increase was effected at year-end for those officers
or the remainder of the non-union work force. Currently, Mr. Stangeland's base
salary is $606,000 per year.
Annual Bonus. Under the annual bonus plan, target bonuses (expressed as a
percentage of annual salary), are set for each participant. For 1993, the
target bonus for Mr. Stangeland was set at 65% of base salary, with a range of
potential bonus payouts between zero and 2 1/2 times target bonus. The target
bonus for other executive officers was set at 50% of base salary, with a range
of potential payout between zero and 2 1/2 times the target bonus. The
aforementioned target bonus and payout ranges were unchanged versus 1992. Other
officers and managers are subject to a similar plan, with lesser target bonus
and payout ranges appropriate to their responsibilities and positions in the
Company. A total of approximately 977 employees were included in the bonus plan
for 1993. The Committee may also make discretionary changes to bonus payouts in
the event of unusual, unforeseen circumstances affecting the Company. The
Company's performance for 1993 (or that of the unit, department or store, as
the case may be), was generally measured for purposes of bonus determination
against annual budgeted earnings per share or operating profit approved by the
Board at the beginning of the year. Mr. Stangeland's bonus was based 100% upon
the performance of the total Company in meeting its budgeted earnings per share
goal, while other senior executive officer bonuses were weighted 90% based upon
the earnings per share performance of the total Company and 10% on
discretionary factors including the Committee's assessment of the officer's
performance of his specific functional responsibilities. Other officers' and
managers' bonuses were based upon a combination of total Company operating
income performance and/or performance of his or her individual unit, department
or store, and, to a small extent, discretionary factors.
In 1993, the Company generally failed to meet minimum performance
requirements under the bonus plan. This resulted in no bonus payouts for Mr.
Stangeland and the other executive officers. Certain plan participants,
principally store management, qualified for a bonus payout under the terms of
the plan; but those payouts were generally below target. Discretionary bonus
payouts not exceeding 20% of target bonus were made to certain non-executive
officers and other plan participants.
LTIP. Senior executive officers, including Mr. Stangeland, participate in the
LTIP, which was instituted in 1992. That plan's primary purpose is to achieve
attractive long term performance of the Company. The plan provides a cash bonus
payable, at the end of a 36 month period, if the Company has achieved the
specified performance goals over that period. The annual awards under the LTIP
are granted to Mr. Stangeland and other participants in the form of performance
units in amounts proportionate to their respective annual cash compensation,
inclusive of target bonus. The first such performance unit awards were made in
May of 1992, payable in 1995, for the performance period covering fiscal 1992,
1993, and 1994. In
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<PAGE>
February of 1993, performance unit awards were made under the program for the
performance period covering fiscal 1993, 1994 and 1995. Payout, if any, in 1995
and subsequent years, may range from zero to twice the target award level
depending upon the Company's performance against goals established by the
Committee when the award was made. For both the 1992 and 1993 awards, these
goals consisted of specified levels of return on equity and increases in
earnings per share which, if achieved, should meaningfully enhance shareholder
value over time.
Stock Options. Under the terms of the stock option plan, the Committee is
authorized to grant all stock options. In determining the amount of the 1993
award, the Committee reviewed prior years' stock option awards. The 1992 award
for executive officers was determined by granting an aggregate value of options
proportionate to each officer's targeted annual cash compensation (including
salary and target bonus) using a variation of the Black-Scholes methodology to
value each option. The application of the 1992 methodology for purposes of the
1993 award would have resulted in an increase in the aggregate number of
options awarded versus 1992, due to a change in the Black-Scholes value of an
option. In light of this result and the Committee's desire to limit the
potential increased dilution associated with a larger aggregate award of
options, the Committee decided to limit the option awards in 1993 to generally
the same number per executive officer as in 1992. Thus, Mr. Stangeland was
awarded options for 40,000 shares in 1993, the same as in 1992. Option awards
for other participants were similarly limited, in general. A total of
approximately 596 individuals, including other officers, store managers, and
middle managers, received option awards in February of 1993, and the strike
price for all options issued in 1993 was $23.71 per share, which was determined
based upon the price of the Company's stock at the time of the award, in
accordance with the terms of the plan.
No member of the Committee, and no member of the Board of Directors who voted
on the compensation matters covered by this letter, is a former officer or
current officer, or employee of the Company or any of its subsidiaries, or is
employed by a company whose Board of Directors includes a member of the
management of the Company.
Steven A. Burd Peter A. Magowan
Fritz L. Duda Charles E. Rickershauser, Jr.
James H. Greene, Jr. Elizabeth A. Sanders
Robert I. MacDonnell William Y. Tauscher
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STOCK PRICE PERFORMANCE
The information set forth below shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933 or under the Securities Exchange
Act of 1934, except to the extent Vons specifically incorporates this
information by reference, and shall not otherwise be deemed soliciting material
or be deemed filed under such Acts.
The graph below compares the cumulative total return of Vons common stock
with the cumulative total return of (i) the S&P 400 Mid-Cap Index and (ii) ten
companies described in the footnote to the graph. The comparison covers the
five-year period from the last trading day prior to the end of Vons' 1988
fiscal year to the last trading day prior to the end of Vons' 1993 fiscal year
and assumes that $100 was invested at the beginning of the period in Vons
common stock and in each index.
The past performance shown for Vons common stock is not necessarily
indicative of future performance.
VONS STOCK PRICE PERFORMANCE
FIVE YEAR CUMULATIVE TOTAL SHAREHOLDERS' RETURN (1)
<TABLE>
<CAPTION> TOP 10
Measurement Period S&P SUPERMARKET
(Fiscal Year Covered) VONS MID CAP IND
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $100 $100 $100
FYE 12/31/89 $169.57 $135.49 $134.80
FYE 12/31/90 $195.65 $128.52 $149.07
FYE 12/31/91 $206.52 $192.63 $207.56
FYE 12/31/92 $221.74 $215.63 $179.42
FYE 12/31/93 $139.13 $245.66 $183.66
</TABLE>
- --------
(1) Total shareholders' return assumes reinvestment of dividends on the date
such dividends were declared. The dollar amounts shown at each year-end are
as of the last trading day prior to the end of the Company's fiscal year.
(2) The ten largest United States companies (measured by most recently
available fiscal year revenues) which had publicly traded equity for at
least the most recent three years and which derived revenue predominately
from supermarket retail sales. The companies included are: American Stores
Company, Albertson's, Inc., The Great Atlantic & Pacific Tea Company, Inc.,
Bruno's, Inc., Food Lion, Inc., Giant Food Inc., The Kroger Co., The Penn
Traffic Company, Safeway Inc. and Winn-Dixie Stores, Inc. The Penn Traffic
Company and Safeway Inc. are included in the calculation beginning in 1988
and 1990, respectively, which are the years in which each companies' equity
was first publicly traded. The returns of each component issuer of the
group have been weighted according to each respective issuer's stock market
capitalization.
<PAGE>
- --------
(1) Total shareholders' return assumes reinvestment of dividends on the date
such dividends were declared. The dollar amounts shown at each year-end are
as of the last trading day prior to the end of the Company's fiscal year.
(2) The ten largest United States companies (measured by most recently
available fiscal year revenues) which had publicly traded equity for at
least the most recent three years and which derived revenue predominately
from supermarket retail sales. The companies included are: American Stores
Company, Albertson's, Inc., The Great Atlantic & Pacific Tea Company, Inc.,
Bruno's, Inc., Food Lion, Inc., Giant Food Inc., The Kroger Co., The Penn
Traffic Company, Safeway Inc. and Winn-Dixie Stores, Inc. The Penn Traffic
Company and Safeway Inc. are included in the calculation beginning in 1988
and 1990, respectively, which are the years in which each companies' equity
was first publicly traded. The returns of each component issuer of the
group have been weighted according to each respective issuer's stock market
capitalization.
CERTAIN TRANSACTIONS
In his role as President Emeritus, Mr. Davila provides advisory services to
the Company, primarily in the marketing area, and acts as spokesperson in the
Company's advertising campaigns. For these services, Mr. Davila received
$120,000 in 1993. Commencing January 1994, because of the resignation of the
former Chief Operating Officer and the implementation of an extensive new
marketing campaign by the Company, Mr. Davila has agreed to temporarily
increase the amount of time devoted to these activities. Accordingly, his
compensation has been increased to an annual rate of $377,000 for the period of
his increased activity.
For further information regarding additional certain transactions with
directors, see "Executive Compensation--Compensation Committee Interlocks and
Insider Participation."
VOTES REQUIRED
The nominees for election as directors who receive the vote of a plurality of
the shares cast at the Annual Meeting, a quorum being present, shall become
directors at the conclusion of the tabulation of the votes. Under Michigan law
and the Company's Restated Articles of Incorporation and By-Laws, abstentions,
withheld votes, broker non-votes and other shares not cast will not be counted
as shares cast in the election of any director.
The holders of a majority of the common stock issued and outstanding as of
the record date, present in person or represented by proxy, shall constitute a
quorum at the Meeting.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who are beneficial owners of more than ten
percent of the Company's common stock ("reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Reporting persons are required to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the 1993 fiscal year, all Section 16(a) filing
requirements applicable to reporting persons were complied with, except that
William Y. Tauscher, a director of the Company, filed a report involving the
sale of 4,500 shares on Form 4 eleven days late.
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<PAGE>
OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of its Audit Committee, the Board of Directors of Vons
has selected KPMG Peat Marwick ("KPMG") to serve as independent auditors during
the current fiscal year. A representative of KPMG is expected to be present at
the Meeting, will have an opportunity to make a statement and will be available
to answer questions, if any, from shareholders.
ANNUAL REPORT
A copy of Vons' Annual Report to Shareholders, including financial
statements, is enclosed herewith, but is not to be considered as part of the
proxy solicitation material.
Vons will also furnish without charge a copy of its annual report on Form 10-
K for the year ended January 2, 1994, including the financial statement
schedules but without exhibits, to each person whose vote is solicited by this
Proxy Statement. Upon request Exhibits to the Form 10-K will be furnished to
shareholders of record making a written request for such Exhibits at a fee of
$.50 per page, paid in advance. Requests and inquiries should be addressed to:
Mary McAboy, Vice President, Corporate Communications, The Vons Companies,
Inc., 618 Michillinda Avenue, Arcadia, California 91007.
SHAREHOLDER PROPOSALS
A proposal to be presented at the 1995 annual meeting must be received at
Vons' principal executive offices no later than December 6, 1994, in order to
be considered for inclusion in the proxy materials to be disseminated by the
Board of Directors for such annual meeting. To be eligible for inclusion in
such proxy materials, such proposals must conform to the requirements set forth
in Regulation 14A under the Securities Exchange Act of 1934, as amended, as
well as in Vons' By-Laws.
ADDITIONAL BUSINESS
The Board of Directors does not know of any matter to be presented at the
Meeting which is not listed on the Notice of Meeting and discussed above. If
other matters should properly come before the Meeting, however, the persons
named in the accompanying proxy will vote all proxies in accordance with their
best judgment.
By order of the Board of Directors
/s/ Terrence J. Wallock
Terrence J. Wallock, Secretary
April 4, 1994
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1. The election as directors of Steven A. Burd,
Fritz L. Duda and Roger E. Stangeland for the
terms indicated in the Proxy Statement.
[_] FOR (except as indicated)
[_] WITHHOLD AUTHORITY
[_] EXCEPTIONS
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark
the "Exception" box and write the nominee's name in the space provided
below.)
EXCEPTIONS _______________________________________________________________
2. To vote upon such other business as may properly come before the meeting or
any adjournment or adjournments thereof as to which the undersigned hereby
confers discretionary authority upon said proxies.
Address Change
and/or Comments Mark Here [_]
PROXY DEPARTMENT
NEW YORK, N.Y. 10293-0305
IMPORTANT: Please sign exactly as your name or names appear
hereon. When signing on behalf of a corporation, partnership,
estate, trust or the like, indicate title of person signing.
Dated:________________, 1994
____________________________
SIGNATURE
____________________________
SIGNATURE IF HELD JOINTLY
Votes must be indicated (X) in Black or Blue Ink. [X]
Please sign, date and return this proxy card promptly
using the enclosed envelope.
<PAGE>
PROXY
THE VONS COMPANIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Roger E. Stangeland, Michael F. Henn, and
Terrence J. Wallock, and each of them, as proxies with power of substitution and
hereby authorizes them to represent and to vote, as designated on the reverse
side of this card, all the shares of Common Stock of The Vons Companies, Inc.
("Vons") held of record by the undersigned on March 18, 1994 at the Annual
Meeting of Shareholders to be held at Vons headquarters building, 618
Michillinda Avenue, Arcadia, California 91007, on Wednesday, May 11, 1994, at
9:00 a.m. local time, or any adjournment or adjournments thereof, with respect
to the following matters as more particularly described in the Proxy Statement
dated April 4, 1994, receipt of which is hereby acknowledged.
This proxy, when properly executed, will be voted in the manner indicated
herein by the undersigned. If no direction is made, this proxy will be voted FOR
(i) the election of the persons named on the reverse side of this card, and
(ii) according to the discretion of the proxies on any other properly presented
business. If any nominee named in the Proxy Statement is unable or unwilling to
serve or is otherwise unavailable the proxies shall have discretion and
authority to vote in accordance with their judgment for other nominees.
(Continued and to be signed and dated on other side)
