<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
SAFEWAY INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 94-3019135
(State or other jurisdiction of 5918 Stoneridge Mall Road (I.R.S. Employer
incorporation or organization) Pleasanton, CA 94588-3229 Identification Number)
(510) 467-3000
</TABLE>
(Address of principal executive offices)
--------------------
STOCK OPTION PLAN
FOR CONSULTANTS OF
SAFEWAY STORES, INCORPORATED
(Full title of the plan)
--------------------
Michael C. Ross
Senior Vice President, Secretary
and General Counsel
SAFEWAY INC.
5918 Stoneridge Mall Road
Pleasanton, CA 94588-3229
(510) 467-3000
(Name, address and telephone number, including area code, of agent for service)
--------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
==============================================================================================================================
Proposed maximum
Title of each class of securities to be Amount to be Proposed maximum aggregate offering Amount of
registered registered offering price per share price registration fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per
share............................ 550,500 (1) $1.00 (2) $550,500(2) $166.82
==============================================================================================================================
</TABLE>
(1) Represents the maximum number of shares which may be distributed
pursuant to the Registration Statement, absent operation of the
anti-dilution provisions of the Plan. Such additional undeterminable
number of shares as may be required by reason of such anti-dilution
provisions are hereby also registered.
(2) Estimated for the purpose of calculating the registration fee
pursuant to Rule 457(h) on the basis of the exercise price per share
of outstanding options for 550,500 shares at $1.00 per share.
Total Pages 9
Exhibit Index on Page 9
<PAGE> 2
This Registration Statement on Form S-8 of Safeway Inc., a Delaware
corporation (the "Company"), covers 550,500 shares of common stock, par
value $.01 per share, of the Registrant (the "Common Stock") reserved for
issuance under the Registrant's Plan for Consultants of Safeway Stores,
Incorporated (the "Plan"). Options for all of such 550,500 shares, were
issued to consultants in 1987.
The information called for in Part I of Form S-8 is not being filed
with or included in this Form S-8 (by incorporation by reference or
otherwise) in accordance with the rules and regulations of the Securities
and Exchange Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Company are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995;
(b) The Company's Current Report on Form 8-K dated January 25,
1996;
(c) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 23, 1996;
(d) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 15, 1996; and
(e) The description of the Common Stock which is contained in the
Registrant's Registration Statement on Form 8-A filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on February 20, 1990.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
II-1
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
(Not Applicable)
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the Common Stock offered
hereby are being passed upon for the Company by Michael C. Ross, Esq., General
Counsel of the Company. Mr. Ross is also a Senior Vice President and the
Secretary of the Company. The Company has granted Mr. Ross options to purchase
Common Stock of the Company, upon the exercise of which he would own less than
1% of the Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Delaware General Corporation Law, the Company's
Restated Certificate of Incorporation provides that a director of the Company
will not be personally liable to the Company or the stockholders for monetary
damages for any breach of fiduciary duty as a director, except for liability (i)
for breach of the duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law (governing distributions to stockholders), or (iv) for any
transaction for which a director derives an improper personal benefit. In
addition, Section 145 of the Delaware General Corporation Law and Article III,
Section 13 of the Company's By-laws, under certain circumstances, provide for
the indemnification of the Company's officers, directors, employees and agents
against liabilities which they may incur in such capacities. A summary of the
circumstances in which such indemnification is provided for is contained herein,
but that description is qualified in its entirety by reference to Article III,
Section 13 of the Company's By-laws.
In general, any officer, director, employee or agent will be
indemnified against expenses including attorneys' fees, fines, settlements or
judgments which were actually and reasonably incurred in connection with a legal
proceeding, other than one brought by or on behalf of the Company, to which he
was a party as result of such relationship, if he acted in good faith, and in
the manner he believed to be in or not opposed to the Company's best interest
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. If the action is brought by or on behalf of
the Company, the person to be indemnified must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the Company's best
interest, but no indemnification will be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Company unless and only to the extent that the Court of Chancery of Delaware, or
the court in which such action was brought, determines upon application that,
despite adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem proper.
II-2
<PAGE> 4
Any indemnification under the previous paragraphs (unless ordered by a
court) will be made by the Company only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent
is proper under the circumstances because he has met the applicable standard of
conduct set forth above. Such determination will be made (i) by the Board of
Directors by a majority vote of a quorum of disinterested directors who were not
parties to such action, (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the stockholders. To the extent that a
director, officer, employee or agent of the Company is successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in the
previous paragraph, he will be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that he is not entitled to be indemnified by the
Company as authorized by the By-laws. Such expenses incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 13 of the By-laws is not deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office. If a claim for
indemnification or payment of expenses under Section 13 of the By-laws is not
paid in full within ninety (90) days after a written claim therefor has been
received by the Company the claimant may file suit to recover the unpaid amount
of such claim and, if successful in whole or in part, shall be entitled to be
paid the expense of prosecuting such claim. In any such action, the Company has
the burden of proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
The Board of Directors may authorize, by a vote of a majority or a
quorum of the Board of Director, the Company to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of Section 13 of the By-laws. The Board of
Directors may authorize the Company to enter into a contract with any person who
is or was a director, officer, employee or agent of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
providing for indemnification rights equivalent to or, if the Board of Directors
so determines, greater than those provided for in Section 13 of the By-laws.
II-3
<PAGE> 5
Safeway has also purchased insurance for its directors and officers for
certain losses arising from claims or charges made against them in their
capacities as directors and officers of Safeway
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
(Not applicable)
ITEM 8. EXHIBITS
Exhibit No. Description
4.1 Form of Subscription Agreement between the Company and
certain consultants, including a form of Non-Qualified
Stock Option Agreement, form of secured promissory
note and stock pledge agreement attached as exhibits
thereto
5 Opinion of Michael C. Ross, Esq.
23.1 Consent of Michael C. Ross, Esq. (Incorporated in
Exhibit 5).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney (included on page II-5 of this
Registration Statement).
ITEM 9. UNDERTAKINGS
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply to
information contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of
II-4
<PAGE> 6
the Securities and Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pleasanton, State of California, on the 8th day of
October, 1996
SAFEWAY INC.
By: /s/ F. J. Dale
-----------------------------
F. J. Dale
Group Vice President - Finance
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Michael C. Ross and Julian C.
Day with full power of substitution and full power to act without the other, his
true and lawful attorney-in-fact and agent to act for him in his name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully, to all intents
and purposes, as they or he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Peter A. Magowan Chairman of the Board of October 8, 1996
- ----------------------------------------------- Directors
Peter A. Magowan
/s/ Steven A. Burd President, Chief Executive October 8, 1996
- ----------------------------------------------- Officer and Director
Steven A. Burd (Principal Executive Officer)
/s/ Julian C. Day Executive Vice President October 8, 1996
- ----------------------------------------------- and Chief Financial
Julian C. Day Officer (Principal Financial
Officer)
</TABLE>
II-6
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ F. J. Dale Group Vice President - Finance October 8, 1996
- ----------------------------------------------- (Principal Accounting Officer)
F. J. Dale
/s/ Sam Ginn Director October 8, 1996
- -----------------------------------------------
Sam Ginn
Director October _, 1996
- -----------------------------------------------
James H. Greene, Jr.
/s/ Paul Hazen Director October 8, 1996
- -----------------------------------------------
Paul Hazen
- ----------------------------------------------- Director October _, 1996
Henry R. Kravis
/s/ Robert I. MacDonnell Director October 8, 1996
- -----------------------------------------------
Robert I. MacDonnell
Director October _, 1996
- -----------------------------------------------
George R. Roberts
- ----------------------------------------------- Director October _, 1996
Michael T. Tokarz
</TABLE>
II-7
<PAGE> 9
EXHIBIT INDEX
Exhibit
Number Description
- ------------------- -----------------------------------------------------
4.1 Form of Subscription Agreement between the Company
and certain consultants, including a form of
Non-Qualified Stock Option Agreement, form of
secured promissory note and stock pledge agreement
attached as exhibits thereto
5 Opinion of Michael C. Ross, Esq.
23.1 Consent of Michael C. Ross, Esq. (Incorporated in
Exhibit 5).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney (included on page II-5 of this
Registration Statement).
II-8
<PAGE> 1
SUBSCRIPTION AGREEMENT EXHIBIT 4.1
This Subscription Agreement (the "Agreement") is entered into
as of ___________, 1987 between Safeway Stores, Incorporated, a Delaware
corporation (the "Company"), and [Name of Consultant] (the "Purchaser")
(together, the "Parties").
RECITALS
A. The Company was recently incorporated for the purpose of
acquiring all the outstanding capital stock of Safeway Stores, Incorporated, a
Maryland corporation ("Safeway"). In connection with the acquisition of Safeway,
the Company has sold, and will sell, shares of its Common Stock, par value $0.01
per share ("Common Stock"), to a limited number of investors (the "Investors")
for a purchase price of $2.00 per share (the "Per Share Price").
B. The Purchaser desires to subscribe for and purchase, and
the Company desires to sell to the Purchaser, the number of shares of Common
Stock set forth on Schedule I hereto (the "Purchase Stock") at the Per Share
Price, for a total purchase price in the amount set forth on Schedule I hereto
(the "Purchase Price"). The purchase of the Purchase Stock shall be made on
_______, 1987 (the "Purchase Date").
C. The Company desires to issue to the Purchaser non-qualified
stock options to purchase the number of shares of Common Stock set forth on
Schedule I hereto (the "Options") in accordance with the terms of the "Stock
Option Agreement" attached hereto as Exhibit A (the "Option Agreement").
AGREEMENT
In order to implement the foregoing and in consideration of
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties agree as follows:
I. SUBSCRIPTION FOR AND PURCHASE OF STOCK
1.01. Purchase of Stock. Subject to the terms and conditions
hereinafter set forth, the Purchaser hereby subscribes for and agrees to
purchase, and the Company hereby agrees to sell to the Purchaser, the Purchase
Stock at a purchase price per share equal to the Per Share Price.
1.02. Closing of Purchase of Stock. The Purchaser shall
deliver to the Company on the Purchase Date cash or a certified bank check or
checks payable to the order of the Company in the amount set forth on Schedule I
hereto and the Purchaser's full recourse
<PAGE> 2
promissory note in the principal amount set forth on Schedule I hereto (the
"Note"). The form of the Note is attached hereto as Exhibit B. The obligations
of the Purchaser under the Note shall be secured by a pledge of all of the
shares of the Purchase Stock in accordance with the terms of the Pledge
Agreement attached hereto as Exhibit C (the "Pledge Agreement").
On the Purchase Date, in consideration of receipt of the
Purchase Price, the Note and the Pledge Agreement as aforesaid, the Company will
issue a certificate, registered in Purchaser's name, to be held by the Company
pursuant to the Pledge Agreement for such Purchase Stock.
II. ISSUANCE OF OPTIONS
Subject to the terms and conditions hereinafter set forth and
upon and as of the date of consummation of the purchase provided in Article I,
the Company shall issue to the Purchaser the Options at an option exercise price
of $2.00 per share. The Parties shall execute and deliver to one another copies
of the Option Agreement concurrently with the issuance of the Options.
III. PURCHASER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS
3.01. Investment Representation. The Purchaser hereby
represents and warrants that he is acquiring the Purchase Stock and will acquire
the Common Stock issuable upon exercise of the Options (collectively the
"Acquired Securities") for investment for his own account and not with a view
to, or for resale in connection with, the distribution or other disposition
thereof. Except as otherwise provided in Section 3.02 hereof, the Purchaser
agrees and acknowledges that he will not, directly or indirectly, offer,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of
(hereinafter, "Transfer") any of the Acquired Securities unless the Purchaser
has complied with Section 3.03 and (i) the Transfer is pursuant to an effective
registration statement under the Securities Act of 1933, as amended, and the
rules and regulations in effect thereunder (the "Act"), or (ii) counsel for the
Purchaser (which counsel shall be acceptable to the Company) shall have
furnished the Company with an opinion, satisfactory in form and substance to the
Company, to the effect that no such registration is required because of the
availability of an exemption from registration under the Act.
3.02. Certain Permitted Transfers. Notwithstanding the general
restriction on Transfers contained in Section 3.01 hereof, the Company
acknowledges and agrees that any of the following Transfers are deemed to be in
compliance with the Act and this Agreement, and no opinion of counsel is
required in connection therewith:
(a) a Transfer upon the death of the Purchaser to his
executors, administrators, testamentary trustees, legatees or
beneficiaries (the "Purchaser's Estate") or a Transfer to the
executors, administrators, testamentary trustees, legatees or
beneficiaries of a person who has become a holder of the Acquired
Securities in accordance with the terms of this Agreement; provided,
however, that no such Transfer
2
<PAGE> 3
shall be given effect on the books of the Company unless the transferee
shall deliver to the Company a valid undertaking and become bound by
the terms of this Agreement; and
(b) a Transfer made after the Purchase Date in
compliance with the Act to a trust the beneficiaries of which include
only the Purchaser, his spouse or his lineal descendants (a
"Purchaser's Trust"); provided, however, that no such transfer shall be
of any force or effect or shall be given effect on the books of the
Company unless the transferee shall deliver to the Company a valid
undertaking and become bound by the terms of this Agreement.
3.03. Right of First Refusal. If at any time the Purchaser
receives a bona fide offer (the "Offer") to purchase any or all of his Acquired
Securities from a third party (the "Offeror") which the Purchaser wishes to
accept, the Purchaser shall cause the Offer to be reduced to writing and shall
notify the Company in writing of his wish to accept the Offer. The Purchaser's
notice shall contain an irrevocable offer to sell such Acquired Securities to
the Company (in the manner set forth below) at a purchase price equal to the
price contained in, and on the same terms and conditions of, the Offer and shall
be accompanied by a true copy of the Offer (which shall identify the Offeror).
Any time within 45 days after the date of the receipt by the Company of the
Purchaser's notice, the Company shall have the right and option to purchase all,
but not less than all, of the Acquired Securities covered by the Offer either
(i) at the same price and on the same terms and conditions as the Offer or (ii)
if the Offer includes any consideration other than cash, then, at the sole
option of the Company, at the equivalent all cash price, determined in good
faith by the Company's board of directors, by delivering a certified bank check
or checks in the appropriate amount to the Purchaser against delivery of
certificates or instruments representing the Acquired Securities so purchased,
appropriately endorsed by the Purchaser. If at the end of such 45-day period the
Company has not tendered the purchase price for such Acquired Securities in the
manner set forth above, the Purchaser may during the succeeding 30-day period
sell not less than all of the Acquired Securities covered by the Offer to the
Offeror on terms no less favorable to the Purchaser than those contained in the
Offer. No sale may be made to any Offeree unless the Offeree agrees in writing
with the Company to be bound by the provisions of this Section 3.03 in
connection with any resale by the Offeree. Promptly after such sale, the
Purchaser shall notify the Company of the consummation thereof and shall furnish
such evidence of the completion and time of completion of such sale and of the
terms thereof as may reasonably be requested by the Company. If, at the end of
30 days following the expiration of the 45-day period for the Company to
purchase the Acquired Securities, the Purchaser has not completed the sale of
such shares of the Acquired Securities as aforesaid, all the restrictions on
Transfer contained in this Agreement shall again be in effect with respect to
such Acquired Securities.
3.04. Legend. Each certificate or instrument representing
Acquired Securities shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
3
<PAGE> 4
OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF A SUBSCRIPTION AGREEMENT DATED AS OF ___________, 1987 (A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). EXCEPT AS
OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER,
SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER."
3.05. Securities Unregistered. The Purchaser acknowledges that
he has been advised that (a) the Acquired Securities have not been registered
under the Act, (b) the Acquired Securities must be held indefinitely, and the
Purchaser must continue to bear the economic risk of the investment in the
Acquired Securities unless they are subsequently registered under the Act or an
exemption from such registration is available, (c) it is not anticipated that
there will be any public market for the Acquired Securities, (d) Rule 144
promulgated under the Act is not presently available with respect to the sale of
any securities of the Company, and the Company has made no covenant to make such
Rule available (except as provided in Section 4.02 hereof), (e) when and if
Acquired Securities may be disposed of without registration in reliance on Rule
144, such disposition can be made only in limited amounts in accordance with the
terms and conditions of such Rule, (f) if the Rule 144 exemption is not
available, public sale without registration will require compliance with
Regulation A or some other exemption under the Act, (g) a restrictive legend in
the form heretofore set forth shall be placed on the certificates or instruments
representing the Acquired Securities, and (h) a notation shall be made in the
appropriate records of the Company indicating that the Acquired Securities are
subject to restrictions on transfer and, if the Company should at some time in
the future engage the services of a stock transfer agent, appropriate stop
transfer restrictions will be issued to such transfer agent with respect to the
Acquired Securities.
3.06. Rule 144 Sales. If any of the Acquired Securities are to
be disposed of in accordance with Rule 144 under the Act or otherwise, the
Purchaser shall promptly notify the Company of such intended disposition and
shall deliver to the Company at or prior to the time of such disposition such
documentation as the Company may reasonably request in connection with such sale
and, in the case of a disposition pursuant to Rule 144, shall deliver to the
Company an executed copy of any notice on Form 144 required to be filed with the
Securities and Exchange Commission.
4
<PAGE> 5
3.07. Standstill Agreement. The Purchaser agrees that, if any
shares of the capital stock of the Company are offered to the public pursuant to
an effective registration statement under the Act, the Purchaser will not effect
any public sale or distribution of any of the Acquired Securities not covered by
such registration statement within seven days prior to, or within 120 days
after, the effective date of such registration statement.
3.08. Additional Investment Representations. The Purchaser
further represents and warrants that (a) he has received and reviewed the
Private Placement Memorandum dated ________ 1987 previously delivered to the
Purchaser (the "Memorandum") and the documents referred to therein; (b) he has
been given the opportunity to obtain any additional information or documents and
to ask questions and receive answers about such documents, the Company and the
business and prospects of the Company which he deems necessary to evaluate the
merits and risks related to his investment in the Acquired Securities and to
verify the information contained in the Memorandum and the information received
as indicated in this Section 3.08; (c) his net worth is not less than the amount
set forth in the questionnaire previously delivered by him to the Company and
his financial condition is such that he can afford to bear the economic risk of
holding the unregistered Acquired Securities for an indefinite period of time
and has adequate means for providing for his current needs and personal
contingencies; (d) he can afford to suffer a complete loss of his investment in
the Acquired Securities; (e) all information which he has provided to the
Company concerning himself and his financial position is correct and complete as
of the date of this Agreement; (f) he understands and has taken cognizance of
all risk factors related to the purchase of the Acquired Securities, including
those set forth in the Memorandum; and (g) his knowledge and experience in
financial and business matters are such that he is capable of evaluating the
merits and risks of his purchase of the Acquired Securities as contemplated by
this Agreement.
IV. THE COMPANY'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS
4.01. The Company's Representations and Warranties. The
Company represents and warrants to the Purchaser that: (i) this Agreement has
been duly authorized, executed and delivered by the Company, and (ii) the
Acquired Securities, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable.
4.02. Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or engaged in a public offering of
shares of Common Stock pursuant to an effective registration statement under the
Act (a "Public Offering" ), (i) the Company shall use reasonable efforts to
register the Options and the Common Stock to be acquired on exercise thereof on
a Form S-8 Registration Statement or any successor to Form S-8 to the extent
that such registration is then available with respect to such Options and Common
Stock, and (ii) the Company will file the reports required to be filed by it
under the Act and the Exchange Act and the rules and regulations adopted by the
Securities and Exchange Commission ("SEC") thereunder, to the extent required
from time to time to enable the Purchaser to sell shares of Stock without
registration under the Act within the limitations of the exemptions provided by
(A)
5
<PAGE> 6
Rule 144 under the Act, as such Rule may be amended from time to time, or (B)
any similar rule or regulation hereafter adopted by the SEC. Notwithstanding
anything contained in this Section 4.02, the Company may deregister under
Section 12 of the Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
V. "PIGGYBACK" REGISTRATION RIGHTS
5.01. Purchaser's Right to Request Registration. If the
Company plans to register any shares of Common Stock for holders of Common Stock
of the Company ("Investors") for public offering pursuant to the Act, in
connection with the first two such offerings the Company will promptly notify
the Purchaser in writing (a "Notice") of such proposed registration (a "Proposed
Registration"). If within ten business days of the receipt by the Purchaser of
such Notice the Company receives from the Purchaser a written request (a
"Request") to register shares of Common Stock held by the Purchaser ("Stock")
(which Request will be irrevocable unless otherwise mutually agreed to in
writing by the Purchaser and the Company), shares of Stock will be so registered
as provided in this Article V.
5.02. Number of Shares of Stock to be Registered. The number
of shares of Stock which will be registered pursuant to a Request will be the
lesser of (i) the number of shares of Stock then held by the Purchaser (which
for purposes of this Section shall include shares held by the Purchaser's Estate
or a Purchaser's Trust) or (ii) the sum of the shares of Stock then held by the
Purchaser, multiplied by a percentage calculated by dividing the number of
shares of Common Stock being registered by all other Investors in the Proposed
Registration by the total number of shares of Common Stock beneficially owned by
the Investors or (iii) the maximum number of shares which the Purchaser (pro
rata based upon the aggregate number of shares of Common Stock the Purchaser and
all Investors have requested be registered) and all Investors are permitted to
register under any Registration Rights Agreement entered into among the Company
and the Investors.
5.03. Terms of Registration. Except as may otherwise be
provided in this Article V, shares of Stock will be registered by the Company
and offered to the public pursuant to this Article V on the same terms and
subject to the same conditions applicable to the registration in a Proposed
Registration of shares of Common Stock held by an Investor. Such terms and
conditions shall include, without limitation: the public offering price; the
payment of fees, commissions and expenses; the provision of, and representation
and warranty to, information requested by the Company; and the provision of
requisite indemnifications.
5.04. Custody Agreement and Power of Attorney. Upon delivering
a Request the Purchaser will, if requested by the Company, execute and deliver a
custody agreement and power of attorney in form and substance satisfactory to
the Company with respect to the shares of Stock to be registered pursuant to
this Article V (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Purchaser will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Stock (duly endorsed in
6
<PAGE> 7
blank by the registered owner or owners thereof or accompanied by duly executed
stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as the Purchaser's agent and attorney-in-fact with full power
and authority to act under the Custody Agreement and Power of Attorney on the
Purchaser's behalf with respect to the matters specified therein. The Purchaser
agrees that he will execute such other agreements as the Company may reasonably
request to further evidence and effectuate the provisions of this Article V.
VI. MISCELLANEOUS
6.01. State Securities Laws. The Company hereby agrees to use
its best efforts to comply with all state securities or "blue sky" laws which
might be applicable to the sale of the Purchase Stock and the issuance of the
Options. Notwithstanding the foregoing, this Agreement shall have no force or
effect if the Company is unable to comply with such laws.
6.02. Binding Effect. The provisions of this Agreement shall
be binding upon and inure to the benefit of the Parties hereto and their
respective heirs, legal representatives, successors and assigns. In the case of
a transferee permitted under Section 3.02(a) or 3.02(b) hereof, such transferee
shall be deemed the Purchaser hereunder; provided, however, that no transferee
(including without limitation, transferees referred to in Sections 3.02(a) and
3.02(b) hereof) shall derive any rights under this Agreement unless and until
such transferee has delivered to the Company a valid undertaking and becomes
bound by the terms of this Agreement.
6.03. Amendment. This Agreement may be amended only by a
written instrument signed by the Parties hereto which specifically states that
it is amending this Agreement.
6.04. Applicable Law. The laws of the State of Delaware
shall govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under principles of
conflicts of law.
6.05. Notices. All notices and other communications provided
for herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, to the Party to whom it is directed:
(a) If to the Company, to it at:
c/o Kohlberg, Kravis, Roberts & Co.
101 California Street, Suite 4550
San Francisco, CA 94111
Attn: Robert I. MacDonnell
7
<PAGE> 8
with copy to:
Latham & Watkins
555 South Flower Street
Los Angeles, California 90071
Attn: John P. McLouglin, Esq.
(b) If to the Purchaser, to him at the address
set forth below under his signature;
or at such other address as either Party shall have specified by notice in
writing to the other.
6.06. Notice of Change of Beneficiary. Immediately prior to
any Transfer of Acquired Securities to a Purchasers' Trust, Purchaser shall
provide the Company with a copy of the instruments creating the Purchasers'
Trust and with the identity of the beneficiaries of the Purchasers' Trust. The
Purchaser shall notify the Company immediately prior to any change in the
identity of any beneficiary of the Purchasers' Trust.
IN WITNESS HEREOF, the Parties have executed this Agreement as
of the date first above written.
The Company: SAFEWAY STORES INCORPORATED
By:
------------------------
Its
-------------------
Purchaser:
---------------------------
[Name of Consultant]
Address of Purchaser:
8
<PAGE> 9
SCHEDULE I
<TABLE>
<S> <C>
Number of shares of Purchase Stock
Total purchase price for Purchase Stock $
Number of Options
Amount of cash payable on the Purchase Date $
Principal amount of Note $
</TABLE>
I
<PAGE> 10
EXHIBIT A TO
SUBSCRIPTION AGREEMENT
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, 1987, is made by and between
Safeway Stores, Incorporated (formerly Safeway Stores Holdings Corporation), a
Delaware corporation hereinafter referred to as "Company," and [Name of
Consultant], hereinafter referred to as "Optionee."
WHEREAS, the Company wishes to afford Optionee the opportunity to
purchase shares of its $0.01 par value Common Stock; and
WHEREAS, the Company has determined that it would be to the
advantage and best interests of the Company and its shareholders to grant the
Non-Qualified Option provided for herein to Optionee as an incentive for
increased efforts on behalf of the Company or its subsidiaries;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they
shall have the meaning specified below unless the context clearly indicates to
the contrary.
Section 1.1 - Option
"Option" shall mean the non-qualified option to purchase common
stock of the Company granted under this Agreement.
Section 1.2 - Pronouns
The masculine pronoun shall include the feminine and neuter, and
the singular the plural, where the context so indicates.
Section 1.3 - Secretary
"Secretary" shall mean the Secretary of the Company.
A-1
<PAGE> 11
Section 1.4 - Subscription Agreement
"Subscription Agreement" shall mean that certain Subscription
Agreement dated as of ___________, 1987 between Optionee and the Company.
Section 1.6 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
For good and valuable consideration, on the date hereof the
Company irrevocably grants to Optionee the option to purchase any part or all of
an aggregate of the number of shares set forth on the signature page hereof of
its $0.01 par value Common Stock upon the terms and conditions set forth in this
Agreement.
Section 2.2 - Purchase Price
The purchase price of the shares of stock covered by the Option
shall be $2.00 per share without commission or other charge.
Section 2.3 - Adjustments in Option
In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of shares, the Company shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
Optionee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in the Option shall be made without change in the
total price applicable to the unexercised portion of the Option (except for any
change in the aggregate price resulting from rounding-off of share quantities or
prices) and with any necessary corresponding adjustment in the option price per
share. Any such adjustment made by the Company shall be final and binding upon
Optionee, the Company and all other interested persons.
A-2
<PAGE> 12
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
The Option shall be and become exercisable in full on the date
hereof.
Section 3.2 - Expiration of Option
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option
was granted; or
(b) The effective date of either the merger or consolidation
of the Company into another corporation, or the acquisition by another
corporation of all or substantially all of the Company's assets or 80%
or more of the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company, unless the Company waives
this provision in connection with such transaction. At least ten (10)
days prior to the effective date of such merger, consolidation,
acquisition, liquidation or dissolution, the Company shall give
Optionee notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.2.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of Optionee, only he may exercise the Option
or any portion thereof. After the death of Optionee, any exercisable portion of
the Option may, prior to the time when the Option becomes unexercisable under
Section 3.2, be exercised by his personal representative or by any person
empowered to do so under Optionee's will or under the then applicable laws of
descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under
Section 3.2; provided, however, that any partial exercise shall be for whole
shares only.
A-3
<PAGE> 13
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.2:
(a) Notice in writing signed by Optionee or the other person
then entitled to exercise the Option or portion, stating that the
Option or portion is thereby exercised, such notice complying with all
applicable rules established by the Company; and
(b) (i) Full payment (in cash, by check or by a combination
thereof) for the shares with respect to which such Option or portion is
exercised;
(ii) With the consent of the Company, shares of the
Company's Common Stock owned by Optionee duly endorsed for transfer to
the Company with a fair market value (as determined in good faith by
the Board of Directors of the Company) on the date of delivery equal to
the aggregate purchase price of the shares with respect to which such
Option or portion is exercised; or
(iii) Any combination of the consideration provided in
the foregoing subparagraphs (i) and (ii), and
(c) A bona fide written representation and agreement, in a
form satisfactory to the Company, signed by Optionee or other person
then entitled to exercise such Option or portion, stating that the
shares of stock are being acquired for his own account, for investment
and without any present intention of distributing or reselling said
shares or any of them except as may be permitted under the Securities
Act of 1933, as amended (the "Act"), and then applicable rules and
regulations thereunder, and that Optionee or other person then entitled
to exercise such Option or portion will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the
shares by such persons contrary to the representation and agreement
referred to above. The Company may, in its absolute discretion, take
whatever additional actions it deems appropriate to insure the
observance and performance of such representation and agreement and to
effect compliance with the Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Company may require an opinion of counsel acceptable to
it to the effect that any subsequent transfer of shares acquired on an
Option exercise does not violate the Act, and may issue stop-transfer
orders covering such shares. Share certificates evidencing stock issues
on exercise of this Option shall bear an appropriate legend referring
to the provisions of this subsection (c) and the agreements herein. The
written representation and agreement referred to in the first sentence
of this subsection (c) shall, however, not be required if the shares to
be
A-4
<PAGE> 14
issued pursuant to such exercise have been registered under the Act,
and such registration is then effective in respect of such shares; and
(d) Full payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon exercise
of the Option; and
(e) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than Optionee,
appropriate proof of the right of such person or persons to exercise
the Option.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the
Option, or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. Such
shares shall be fully paid and nonassessable. The Company shall not be required
to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification
of such shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, which the Company shall, in, its absolute
discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Company shall, in its
absolute discretion, determine to be necessary or advisable; and
(d) The payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon exercise
of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Company may from time to time reestablish
for reasons of administrative convenience.
Section 4.5 - Rights as Shareholder
The holder of the Option shall not be, nor have any of the rights
or privileges of, a shareholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issues by the Company to
such holder.
A-5
<PAGE> 15
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Board of Directors of the Company shall have the power to
interpret this Agreement and to adopt such rules for the administration,
interpretation and application of this Agreement as are consistent therewith and
to interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Board of Directors of the Company shall be final
and binding upon Optionee, the Company and all other interested persons. No
member of the Board of Directors of the Company shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Agreement or the Option.
Section 5.2 - Option Not Transferable
Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of Optionee or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to Optionee shall be addressed to him at the address given
beneath his signature hereto. By a notice given pursuant to this Section 5.4,
either party may hereafter designate a different address for notices to be given
to him. Any notice which is required to be given to Optionee shall, if Optionee
is then deceased, be given to Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall have been deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
A-6
<PAGE> 16
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Transfer and Repurchase of Shares
This Option and the shares of the Company's Common Stock issued to
Optionee upon exercise of this Option shall be subject to all of the terms and
provisions of the Subscription Agreement.
Section 5.7 - Amendment
This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this Agreement.
Section 5.8 - Governing Law
The laws of the State of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.
A-7
<PAGE> 17
IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the parties hereto.
SAFEWAY STORES, INCORPORATED
By _________________________________
Its ___________________________
__________________________________ Aggregate number of shares
Name of Consultant Optionee of Common Stock for which this
option is exercisable:
Optionee
Address
Optionee's Taxpayer
Identification Number
A-8
<PAGE> 18
EXHIBIT B TO
SUBSCRIPTION AGREEMENT
SECURED PROMISSORY NOTE
$ , 1987
FOR VALUE RECEIVED, the undersigned, [Name of Consultant]
("Borrower"), hereby promises to pay to Safeway Stores, Incorporated, a Delaware
corporation ("Holdings"), the principal sum of ________________ Dollars
($_______) in lawful money of the United States of America, in nine equal
installments of $______ each, commencing __________, 1988, with the following
payments due _______ of each year, 1989-1994 and with all remaining principal
and accrued interest payable on _________, 1995. This Note bears interest at the
rate of 6.97% per annum (the "applicable mid-term federal rate" on the date
hereof) or such other rate as may at any time be required to avoid the
imputation of interest under Section 483 or 1274 or other similar provisions of
the Internal Revenue Code. Interest on the outstanding principal balance is
payable in arrears on the ___ day of each ________ thereafter, commencing
________, 1988.
If the date set for payment of principal or interest hereunder is
a Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day. This Note has been delivered in partial payment for the
purchase of Common Stock, $0.01 par value, of Holdings in accordance with the
terms of a certain Subscription Agreement, dated as of ____________, 1987,
between Holdings and Borrower (the "Subscription Agreement"), and this Note is
the "Note" referred to in the Subscription Agreement. Capitalized terms used
herein shall have the same meaning as in the Subscription Agreement unless the
context requires otherwise. Payment of the principal of and interest on this
Note is secured pursuant to the terms of a Stock Pledge Agreement, of even date
herewith, between Borrower and Holdings. This Note is subject to the following
further terms and conditions:
1. Payment and Prepayment. All payments of principal of and
interest on this Note shall be made to Holdings or its order in lawful money of
the United States of America at the offices of Holdings at its then principal
place of business (or at such other place as the holder hereof shall notify
Borrower in writing). Borrower may, at his option, prepay this Note in whole or
in part at any time or from time to time without penalty or premium.
Any prepayments hereunder shall be applied first to accrued
interest ant then to outstanding principal hereunder. Concurrently with any
prepayment of any portion of the principal amount of this Note, Holdings shall
make a notation of such payment on this Note. To the extent this Note is prepaid
in part, remaining principal payments due hereunder shall be
B-1
<PAGE> 19
reduced pro rata by the amount of such prepayment. If full payment of all unpaid
principal of and accrued interest on this Note is made, this Note shall be
cancelled.
2. Mandatory Prepayments. Immediately upon receipt of any cash
dividends or distributions or other cash payments received in respect of
Borrower's ownership of Stock, Borrower shall apply the amount of such cash
dividend, distribution or other payment, as reduced by the amount of Federal and
state income taxes estimated to be payable on such dividend, distribution or
other payment based upon Borrower's tax rate as in effect for the year such
dividend, distribution or other payment is received (the "After-tax Proceeds"),
first to the prepayment of accrued interest hereon and then to the prepayment of
unpaid principal hereof to the extent of such After-tax Proceeds. Promptly upon
the receipt of proceeds from the sale by Borrower of shares of Stock to anyone
other than a transferee referred to in Section 3.02(b) or 3.02(c) of the
Subscription Agreement, proceeds from the sale of such shares shall be applied
to the prepayment first of accrued and unpaid interest hereon and then to the
unpaid principal, hereof to the extent of such proceeds.
3. Events of Default. Upon the failure to pay any installment of
the principal of or interest on this Note when due, at maturity, as a result of
a mandatory prepayment or otherwise which shall remain unremedied for ten days
after written notice thereof shall have been given to Borrower "Event of
Default"), then, and in such event, the holder of this Note may declare, by
notice of default given to Borrower, the entire principal amount of this Note to
be forthwith due and payable, whereupon the entire principal amount of this Note
outstanding and all accrued interest hereon shall become due and payable without
presentment, demand, protest and notices of any kind or of dishonor, all of
which are hereby expressly waived. Upon the occurrence of an Event of Default,
the unpaid principal hereunder shall commence to bear interest from the date of
occurrence of such Event of Default until the entire principal amount is paid in
full, at the greater of the stated interest rate herein or the floating annual
rate equal to 2% in excess of the rate announced by Bankers Trust Company from
time to time at its principal office as its prime lending rate for domestic
commercial loans (the "Default Rate"). If any interest payable hereunder is not
paid when due, such interest shall be added to the unpaid principal hereunder
and shall bear interest until paid at the Default Rate, provided however, that
in no event shall Borrower be required to pay any interest hereunder in excess
of the maximum legal rate. If an Event of Default shall occur hereunder,
Borrower shall pay costs of collection, including reasonable attorneys' fees,
incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Note in the exercise of
any right or remedy shall constitute a waiver thereof, and no right and no
single or partial exercise by the holder hereof of any right or remedy shall
preclude other or future exercise thereof or the exercise of any other right or
remedy.
4. Set Off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default (after the giving of any notice and the
expiration of any grace period contained in the
B-2
<PAGE> 20
definition thereof), Holdings and each subsequent holder of this Note is hereby
authorized by Borrower at any time or from time to time, without notice to
Borrower, or to any other person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all indebtedness or any other
liability of any nature whatsoever, whether liquidated or unliquidated, at any
time held or owing by Holdings or a subsequent holder to or for the credit or
the account of Borrower against and on account of the obligations and
liabilities of Borrower to Holdings or a subsequent holder under this Note,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Note, irrespective of whether or not (a) Holdings
or a subsequent holder shall have made any demand hereunder or (b) Holdings or a
subsequent holder shall have declared the principal of and interest on this Note
and other amounts due hereunder to be due and payable and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
5. Miscellaneous.
(a) The provisions of this Note shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law rules thereof.
(b) All notices and other communications hereunder shall be
in writing and will be deemed to have been duly given if delivered or mailed in
accordance with the Subscription Agreement.
(c) This Note is a full recourse promissory note.
(d) The paragraph headings contained in this Note are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the provisions hereof.
IN WITNESS WHEREOF, this Note has been duly executed and delivered
by Borrower on the date first above written.
__________________________
[NAME OF CONSULTANT]
Witness:
_____________________________
B-3
<PAGE> 21
EXHIBIT C TO
SUBSCRIPTION AGREEMENT
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of __________, 1987, is made
and entered into by and between Safeway Stores, Incorporated, a Delaware
corporation (the "Company" ), and NAME OF CONSULTANT (the "Pledgor").
RECITALS
A. The Company has entered into a Subscription Agreement dated as
of ___________, 1987 with the Pledgor (the "Subscription Agreement") whereby the
Company has agreed to issue and sell to Pledgor certain shares of Common Stock
of the Company, and has granted, and may in the future grant, to Pledgor options
to purchase Common Stock of the Company (which shares acquired pursuant to the
Subscription Agreement or upon exercise of any of such options are referred to
collectively herein as the "Stock").
B. As part of the purchase price for the Purchase Stock (as
defined in the Subscription Agreement), the Pledgor is delivering to the Company
the promissory note of the Pledgor, dated the date hereof, in the principal
amount of $______ (the "Note").
C. The Pledgor wishes to grant further security and assurance to
the Company in order to secure the payment of the Note and to that effect to
pledge to the Company the Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. As security for the payment of the principal of and
interest on the Note, the Pledgor hereby delivers, pledges and assigns to the
Company and creates in the Company a security interest in the Stock (the
"Pledged Securities").
2. Administration of Security. The following provisions shall
govern the administration of the Pledged Securities:
(a) So long as no Event of Default has occurred and is
continuing (as used herein, "Event of Default" shall mean the
occurrence of an Event of Default under the Note), the Pledgor shall be
entitled to act with respect to the Pledged Securities in
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any manner not inconsistent with this Pledge Agreement, the
Subscription Agreement, the Note or any document or instrument
delivered or to be delivered pursuant to or in connection with the
Subscription Agreement.
(b) Notwithstanding Section 2 of the Note, upon the
occurrence and during the continuance of an Event of Default at any
time, or from time to time, after the date hereof, if the Pledgor shall
have received or shall have become entitled to receive, any cash
payments or other distributions in respect of the Pledged Securities,
then and in each case the Pledgor shall deliver to the Company such
amount in partial payment of the principal of and interest on the Note,
with such amounts to be applied to accrued interest or principal
payable under the Note, in the Company's uncontrolled discretion.
(c) The Pledgor shall immediately upon request by the Company
and in confirmation of the security interests hereby created, execute
and deliver to the Company such further instruments, deeds, transfers,
assurances and agreements, in form and substance as the Company shall
request, including any financing statement and amendments thereto, or
any other documents, as required under Delaware law and any other
applicable law to protect the security interests created hereunder.
3. Remedies in Case of an Event of Default.
(a) In case an Event of Default shall have occurred and be
continuing, the Company shall be entitled to vote the Pledged
Securities and shall have all of the remedies of a secured party under
the Delaware Uniform Commercial Code, and, without limiting the
foregoing, shall have the right, subject to any necessary regulatory
approvals, to sell, assign and deliver the whole or, from time to time,
any part of the Pledged Securities, or any interest in any part
thereof, at any private sale or at public auction, with or without
demand of performance or other demand, advertisement or notice of the
time or place of sale or adjournment thereof or otherwise (except the
Company shall give 10 days' notice to the Pledgor of the time and place
of any sale pursuant to this Section 3), for cash, on credit or for
other property, for immediate or future delivery, and for such price or
prices and on such terms as the Company shall, in its uncontrolled
discretion, determine, the Pledgor hereby waiving and releasing any and
all right or equity of redemption whether before or after sale
hereunder. At any such sale the Company may bid for and purchase the
whole or any part of the Pledged Securities so sold free from any such
right or equity of redemption. The Company shall apply the proceeds of
any such sale first to the payment of all costs and expenses, including
reasonable attorneys fees, incurred by the Company in enforcing its
rights under this Pledge Agreement and then to the payment of interest
on and principal of the Notes, with such payments to be applied to
accrued interest or principal payable under either of the Notes, in the
Company's uncontrolled discretion.
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(b) The Pledgor recognizes that the Company may be unable to
effect a public sale of all or a part of the Pledged Securities by reason of
certain prohibitions contained in the Securities Act of 1933, as amended (the
"Act"), or in the rules and regulations promulgated thereunder, but may be
compelled to revere to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor agrees that private sales so
made may be at prices and on other terms less favorable to the seller than if
the Pledged Securities were sold at public sale, and that the Company has no
obligation to delay the sale of the Pledged Securities for the period of time
necessary to permit the registration of the Pledged Securities for public sale
under the Act. The Pledgor agrees that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
(c) If any consent, approval or authorization of any state,
municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or disposition by the Company pursuant to this
Section 3 of the Pledged Securities, or any partial disposition of the Pledged
Securities, the Pledgor will execute all such applications and other instruments
as may be required in connection with securing any such consent, approval or
authorization, and will otherwise use his best effort to secure the same.
(d) Neither failure nor delay on the part of the Company to
exercise any right, remedy, power or privilege provided for herein or by statute
or at law or in equity shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
4. Pledgor's Obligations Not Affected. The obligations of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be impaired or affected by: (a) any
subordination, amendment or modification of or addition or supplement to the
Subscription Agreement or the Note, or any assignment or transfer of either
thereof; (b) any exercise or non-exercise by the Company of any right, remedy,
power or privilege under or in respect of this Pledge Agreement, the
Subscription Agreement or the Note, or any waiver of any such right, remedy,
power or privilege; (c) any waiver, consent, extension, indulgence or other
action or inaction in respect of this Pledge Agreement, the Subscription
Agreement or the Note, or any assignment or transfer of any thereof, or (d) any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like, of the Company or its successors, whether or not the
Pledgor shall have notice or knowledge of any of the foregoing.
5. Transfer by Pledgor. The Pledgor will not sell, assign,
transfer or otherwise dispose of, grant any option with respect to, or mortgage,
pledge or otherwise encumber the Pledged Securities or any interest therein.
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6. Attorney-in-Fact. The Company or its successor is hereby
appointed the attorney-in-fact of the Pledgor for the purpose of carrying out
the provisions of this Pledge Agreement and taking any action and executing any
instrument which the Company reasonably may deem necessary or advisable to
accomplish the purposes hereof, including without limitation, the execution of
the applications and other instruments described in Section 3(c), which
appointment as attorney-in-fact is irrevocable as one coupled with an interest.
7. Termination. Upon payment in full of the principal of and
interest on the Note and upon the due performance of and compliance with all the
provisions of the Note, this Pledge Agreement shall terminate, and the Pledgor
shall be entitled to the return of such of the Pledged Securities as has not
theretofore been sold, released pursuant to Section 5 or otherwise applied
pursuant to the provisions of this Pledge Agreement.
8. Notices. All notices or other communications required or
permitted to be given hereunder shall be delivered as provided in the
Subscription Agreement.
9. Miscellaneous. The Company and its assigns shall have no
obligation in respect of the Pledged Securities, except to hold and dispose of
the same in accordance with the terms of this Pledge Agreement. Neither this
Pledge Agreement nor any provisions hereof may be amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the amendment, modification, waiver,
discharge or termination is sought. The provisions of this Pledge Agreement
shall be binding upon the successors and assigns of the Pledgor. The captions in
this Pledge Agreement are for convenience of reference only and shall not define
or limit the provisions hereof. This Pledge Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of laws rules thereof. This Pledge Agreement may
be executed simultaneously in several counterparts, each of which is an
original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be executed ant delivered on the date first above written.
SAFEWAY STORES, INCORPORATED
By _________________________________
Its _____________________________
PLEDGOR
____________________________________
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Exhibit 5
October 8, 1996
Safeway Inc.
5918 Stoneridge Mall Rd.
Pleasanton, CA 94588-3229
Re: Safeway Inc. Common Stock,
par value $0.01 per share
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on
Form S-8 (the "Registration Statement") which Safeway Inc. (the "Company")
intends to file with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of 550,500 shares
of Common Stock, par value $0.01 per share (the "Shares"), in connection with
the Stock Option Plan for Consultants of Safeway Stores Incorporated (the
"Plan"). I am familiar with the proceedings undertaken in connection with the
authorization, issuance and sale of the Shares. Additionally, I have examined
such questions of law and fact as I have considered necessary or appropriate for
purposes of this opinion.
Based on the foregoing, I am of the opinion that the Shares to be
issued under the Plan have been duly authorized, and upon the issuance of Shares
under the terms of the Plan and delivery and payment therefor of legal
consideration in excess of aggregate par value of the Shares issued, such Shares
will be validly issued, fully paid and nonassessable.
I consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to me contained under the heading
"Interests of Named Experts and Counsel" therein.
Very truly yours,
/s/ Michael C. Ross
Michael C. Ross, Esq.
General Counsel
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Safeway Inc. on Form S-8 of our report dated March 8, 1996 incorporated by
reference in the Annual Report on Form 10-K of Safeway Inc. for the fiscal year
ended December 30, 1995.
Deloitte & Touche LLP
Oakland, California
October 8, 1996
