<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SAFEWAY INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-3019135
(STATE OR OTHER JURISDICTION OF INCORPORATION
OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
5918 STONERIDGE MALL ROAD
PLEASANTON, CALIFORNIA 94588
(510) 467-3000
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MICHAEL C. ROSS
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
SAFEWAY INC.
5918 STONERIDGE MALL ROAD
PLEASANTON, CALIFORNIA 94588
(510) 467-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
SCOTT R. HABER
TRACY K. EDMONSON
LATHAM & WATKINS
505 MONTGOMERY STREET, SUITE 1900
SAN FRANCISCO, CALIFORNIA 94111-2562
(415) 391-0600
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement, as
determined by the Registrant.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
==================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------------------------
Debt Securities................. $920,000,000 100% $920,000,000 $278,788
==================================================================================================================
</TABLE>
(1) Or, if any Debt Securities are issued at an original issue discount, such
greater principal amount as shall result in an aggregate offering price
equal to $920,000,000.
(2) Estimated solely for purposes of calculating the registration fee, which is
calculated in accordance with Rule 457(o).
------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
------------------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS WHICH RELATES
TO REGISTRATION STATEMENT NO. 33-51552, AS AMENDED, PREVIOUSLY FILED BY THE
COMPANY ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE
AMENDMENT NO. 1 WITH RESPECT TO REGISTRATION STATEMENT NO. 33-51552, AS AMENDED,
PURSUANT TO WHICH $80,000,000 IN SECURITIES REMAIN TO BE ISSUED; A FILING FEE OF
$25,000 WAS PREVIOUSLY PAID WITH RESPECT TO SUCH $80,000,000 AGGREGATE OFFERING
PRICE OF SECURITIES UNDER SUCH PRIOR REGISTRATION STATEMENT.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 4, 1997
$1,000,000,000
SAFEWAY INC.
DEBT SECURITIES
------------------------
Safeway Inc. ("Safeway" or the "Company"), directly or through agents,
dealers or underwriters designated from time to time, may offer, issue and sell,
in one or more series or issuances, up to $1,000,000,000 aggregate initial
public offering price of secured or unsecured debt securities (the "Debt
Securities") of the Company, in one or more series, each on terms to be
determined at the time of sale. When a particular series of Debt Securities is
offered, a supplement to this Prospectus (each a "Prospectus Supplement") will
be delivered with this Prospectus. The Prospectus Supplement will set forth the
specific terms of the offering and sale of the offered Debt Securities.
The Company has not yet determined whether any of the Debt Securities
offered hereby will be listed on any exchange or over-the-counter market. If the
Company decides to seek listing of any such Debt Securities, the Prospectus
Supplement relating thereto will disclose such exchange or market.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Debt Securities will be sold directly to purchasers, to or through
agents, underwriters or dealers, as designated from time to time, or through a
combination of such methods. The Company reserves the sole right to accept, and
together with its agents, from time to time, to reject in whole or in part any
proposed purchase of Debt Securities to be made directly or through agents. If
agents of the Company or any underwriters are involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts will be
set forth in or may be calculated from the Prospectus Supplement with respect to
such Debt Securities. See "Plan of Distribution."
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by the applicable Prospectus Supplement.
The date of this Prospectus is , 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Debt Securities
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, part of which has been omitted in
accordance with the rules and regulations of the Commission. For further
information about the Company and the Debt Securities offered hereby, reference
is made to the Registration Statement, including the exhibits filed as a part
thereof and otherwise incorporated therein. Statements made in this Prospectus
as to the contents of any agreement or other document referred to herein are
qualified by reference to the copy of such agreement or other document filed as
an exhibit to the Registration Statement or such other document, each such
statement being qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Commission. The Registration Statement, including the exhibits thereto, as
well as such reports and other information filed by the Company with the
Commission, can be inspected, without charge, and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington D.C., 20549; 7 World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov.,
which contains reports, proxy statements and other information regarding
registrants that file electronically with the Commission and certain of the
Company's filings are available at such web site. Copies of such materials can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended
December 28, 1996 (the "Form 10-K");
(2) the portions of the Company's 1996 Annual Report to Stockholders
that have been incorporated by reference into the Form 10-K;
(3) the portions of the Company's Proxy Statement on Schedule 14A
dated March 24, 1997 that have been incorporated by reference into the Form
10-K;
(4) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 22, 1997 and June 14, 1997;
(5) the Company's Amendment to Quarterly Report on Form 10-Q/A for the
quarterly period ended June 14, 1997;
(6) the Company's Current Reports on Form 8-K filed with the
Commission on January 10, 1997, March 14, 1997, April 7, 1997, April 23,
1997, June 4, 1997 and June 12, 1997;
(7) the Company's Amendment to Current Report on Form 8-K/A filed with
the Commission on May 1, 1997; and
(8) all other documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and before the termination of the offering of all Debt
Securities to which this Prospectus relates shall be deemed to be a part
hereof from the date of filing of such documents.
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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 Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or 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 Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any documents incorporated into this Prospectus by reference (other than
exhibits incorporated by reference into such document). Requests for documents
should be submitted to Investor Relations, Safeway Inc., 5918 Stoneridge Mall
Road, Pleasanton, California 94588 (telephone 510/467-3790). The information
relating to the Company contained in this Prospectus does not purport to be
comprehensive and should be read together with the information contained in the
documents incorporated or deemed to be incorporated by reference herein.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including the documents that are incorporated by reference
as set forth in "Information Incorporated by Reference," contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such statements relate to, among other
things, capital expenditures, cost reduction, cash flow and operating
improvements and are indicated by words or phrases such as "anticipate,"
"estimate," "plans," "projects," "management believes," "the Company believes,"
"the Company intends" and similar words or phrases. Such statements are subject
to inherent uncertainties and risks, including among others: general business
and economic conditions in the Company's operating regions; pricing pressures
and other competitive factors; results of the Company's programs to reduce
costs; the ability to integrate The Vons Companies, Inc. ("Vons") and achieve
operating improvements at Vons; relations with union bargaining units; and the
availability and terms of financing. Consequently, actual events and results may
vary significantly from those included in or contemplated or implied by such
statements.
3
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THE COMPANY
The Company was founded in 1926 and, as of June 14, 1997, operated 1,367
stores in the United States and Canada. Based on sales, the Company is the
second largest food and drug chain in North America. U.S. retail operations are
located principally in northern California, southern California, Oregon,
Washington, Colorado, Arizona and the MidAtlantic region. Canadian retail
operations are located primarily in British Columbia, Alberta and
Manitoba/Saskatchewan. For each of its ten retail operating areas, the Company
believes that it holds the number one or number two market share position for
the total area served. In support of its retail operations, the Company has an
extensive network of distribution, manufacturing and food processing facilities.
On April 8, 1997, the Company completed the acquisition of Vons pursuant to
which the Company issued 41.6 million shares of the Company's common stock for
all of the shares of Vons common stock that it did not already own. Vons is now
a wholly owned subsidiary of the Company. As of June 14, 1997, the Vons stores
operated by the Company consisted of 315 supermarket and food and drug
combination stores, primarily in southern California, under the names "Vons" and
"Pavilions." In connection with the acquisition, the Company repurchased 32
million shares of the Company's common stock from a partnership affiliated with
Kohlberg Kravis Roberts & Co. at $43 per share, for an aggregate purchase price
of $1.376 billion. This reduction of 32 million shares partially offsets the
increase of 41.6 million shares issued pursuant to the acquisition. To finance
the repurchase, the Company borrowed funds under a new $3.0 billion bank credit
agreement, and has since refinanced a significant portion of these borrowings
with commercial paper.
Since 1992, the Company has focused on three priorities for improving its
operating results: (1) controlling costs; (2) increasing sales; and (3)
improving capital management. The Company plans to apply these priorities to
Vons' operations, but there can be no assurance as to the results the Company
will be able to achieve in this regard.
The Company also holds a 49% interest in Casa Ley, S.A. de C.V., which, as
of June 14, 1997, operated 71 food and general merchandise stores in western
Mexico.
Unless the context otherwise requires or as otherwise expressly stated,
references herein to "Safeway" or the "Company" include Safeway Inc. and its
subsidiaries. The principal executive offices of the Company are located at 5918
Stoneridge Mall Road, Pleasanton, California 94588, and the telephone number is
(510) 467-3000.
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USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company anticipates that any net proceeds from the sale of Debt Securities will
be used for general corporate purposes, which may include but are not limited to
working capital, capital expenditures, acquisitions and the repayment or
refinancing of the Company's indebtedness, including the Company's outstanding
long-term public debt securities. The factors which the Company will consider in
any refinancing will include the amount and characteristics of any Debt
Securities issued and may include, among others, the impact of such refinancing
on the Company's liquidity, debt-to-capital ratio and earnings per share. When a
particular series of Debt Securities is offered, the Prospectus Supplement
relating thereto will set forth the Company's intended use for the net proceeds
received from the sale of such Debt Securities. Pending the application of the
net proceeds, the Company expects to invest such proceeds in short-term,
interest-bearing instruments or other investment-grade debt securities or to
reduce indebtedness under the Company's bank credit agreement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated.
<TABLE>
<CAPTION>
FISCAL YEAR
----------------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)............. 3.63x 2.81x 2.28x 1.51x(b) 1.39x
</TABLE>
- ---------------
(a) For purposes of calculating the ratio of earnings to fixed charges, earnings
represents income before income taxes, extraordinary loss, the cumulative
effect of accounting changes, equity in earnings of unconsolidated
affiliates, minority interest in subsidiary and fixed charges (other than
capitalized interest). Fixed charges represents interest on indebtedness
(including capitalized interest) and a share of rental expense which is
deemed to be representative of the interest factor.
(b) The Company's ratio of earnings to fixed charges during 1993 was adversely
affected by a $54.9 million charge to operating and administrative expense
for severance payments made to retail employees in the Alberta, Canada
division as part of a voluntary employee buyout. Excluding this charge, the
ratio of earnings to fixed charges for 1993 would have been 1.66x.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby are to be issued under an indenture (the
"Indenture") to be executed by the Company and a trustee, as Trustee (the
"Trustee"). A copy of the form of Indenture has been filed as an exhibit to the
Registration Statement. Section references used in this Prospectus refer to
sections of the Indenture.
The Company may offer under this Prospectus up to $1,000,000,000 aggregate
principal amount of Debt Securities, or if Debt Securities are issued at a
discount, or in a foreign currency or composite currency, such principal amount
as may be sold for an initial public offering price of up to $1,000,000,000.
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities will represent direct, unsecured obligations of the Company and will
rank equally with all other unsecured and unsubordinated indebtedness of the
Company.
The following statements relating to the Debt Securities and the Indenture
are summaries and do not purport to be complete. Such summaries may make use of
certain terms defined in the Indenture and are qualified in their entirety by
express reference to the Indenture. Certain other specific terms of any series
of Debt Securities will be described in the applicable Prospectus Supplement. To
the extent that any particular terms of the Debt Securities described in a
Prospectus Supplement differ from any of the terms described herein, then such
terms described herein shall be deemed to have been superseded by such
Prospectus
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Supplement. As used in this "Description of Debt Securities," all references to
the "Company" shall mean Safeway Inc. excluding, unless the context otherwise
requires or as otherwise expressly stated, its subsidiaries.
GENERAL
The terms of each series of Debt Securities will be established by or
pursuant to a resolution of the Board of Directors of the Company and set forth
or determined in the manner provided in an Officers' Certificate or by a
supplemental indenture. (Indenture sec. 2.2) The particular terms of each series
of Debt Securities will be described in a Prospectus Supplement relating to such
series (including any pricing supplement thereto).
The Debt Securities that may be offered under the Indenture are not limited
in aggregate principal amount. The Debt Securities may be issued in one or more
series with the same or various maturities, at par, at a premium, or at a
discount. The Prospectus Supplement (including any Pricing Supplement thereto)
will set forth the initial offering price, the aggregate principal amount and
the following terms of the Debt Securities in respect of which this Prospectus
is delivered: (1) the title of such Debt Securities; (2) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Debt Securities will be issued; (3) any limit on the aggregate principal
amount of such Debt Securities; (4) the date or dates on which principal on such
Debt Securities will be payable; (5) the rate or rates (which may be fixed or
variable) per annum or, if applicable, the method used to determine such rate or
rates (including any commodity, commodity index, stock exchange index or
financial index) at which such Debt Securities will bear interest, if any, the
date or dates from which such interest, if any, will accrue, the date or dates
on which such interest, if any, will commence and be payable and any regular
record date for the interest payable on any interest payment date; (6) the place
or places where principal of, premium, if any, and interest, if any, on such
Debt Securities will be payable; (7) the period or periods within which, the
price or prices at which and the terms and conditions upon which the Debt
Securities may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase the Debt
Securities pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof; (9) the dates, if any, on which and the price or prices at
which the Debt Securities will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations; (10) the denominations in which such Debt Securities may be
issuable, if other than denominations of $1,000 and any integral multiple
thereof; (11) whether the Debt Securities are to be issuable in the form of
Certificated Debt Securities (as defined below) or Global Debt Securities (as
defined below); (12) the portion of principal amount of such Debt Securities
that shall be payable upon declaration of acceleration of the maturity date
thereof, if other than the principal amount thereof; (13) the currency of
denomination of such Debt Securities; (14) the designation of the currency,
currencies or currency units in which payment of principal of, premium, if any,
and interest, if any, on such Debt Securities will be made; (15) if payments of
principal of, premium, if any, or interest, if any, on the Debt Securities are
to be made in one or more currencies or currency units other than that or those
in which such Debt Securities are denominated, the manner in which the exchange
rate with respect to such payments will be determined; (16) the manner in which
the amounts of payment of principal of, premium, if any, or interest, if any, on
such Debt Securities will be determined, if such amounts may be determined by
reference to an index based on a currency or currencies other than that in which
the Debt Securities are denominated or designated to be payable or by reference
to a commodity, commodity index, stock exchange index or financial index; (17)
the provisions, if any, relating to any security provided for such Debt
Securities; (18) any addition to or change in the Events of Default described
herein or in the Indenture with respect to such Debt Securities and any change
in the acceleration provisions described herein or in the Indenture with respect
to such Debt Securities; (19) any addition to or change in the covenants
described herein or in the Indenture with respect to such Debt Securities; (20)
any other terms of such Debt Securities, which may modify or delete any
provision of the Indenture insofar as it applies to such series; and (21) any
depositaries, interest rate calculation agents, exchange rate calculation agents
or other agents with respect to the Debt Securities. (Indenture sec. 2.2)
Debt Securities may be issued that provide for an amount less than the
stated principal amount thereof to be due and payable upon declaration of
acceleration of the maturity thereof pursuant to the terms of the
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<PAGE> 8
Indenture ("Discount Securities"). Federal income tax considerations and other
special considerations applicable to any such Discount Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units, or if the
principal of and any premium and interest, if any, on any series of Debt
Securities is payable in a foreign currency or currencies or a foreign currency
unit or units, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such issue of Debt Securities and
such foreign currency or currencies or foreign currency unit or units will be
set forth in the applicable Prospectus Supplement.
TRANSFER AND EXCHANGE
Each Debt Security will be represented by either one or more global
securities (a "Global Debt Security") registered in the name of The Depository
Trust Company, as Depository (the "Depository") or a nominee of the Depository
(each such Debt Security represented by a Global Debt Security being herein
referred to as a "Book-Entry Debt Security"), or a certificate issued in
definitive registered form (a "Certificated Debt Security"), as set forth in the
applicable Prospectus Supplement. Except as set forth under "-- Global Debt
Securities and Book-Entry System" below, Book-Entry Debt Securities will not be
issuable in certificated form.
CERTIFICATED DEBT SECURITIES. Certificated Debt Securities may be
transferred or exchanged at the Trustee's office or paying agencies in
accordance with the terms of the Indenture. No service charge will be made for
any transfer or exchange of Certificated Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The transfer of Certificated Debt Securities and the right to receive the
principal of, premium, if any, and interest, if any, on such Certificated Debt
Securities may be effected only by surrender of the certificate representing
such Certificated Debt Securities and either reissuance by the Company or the
Trustee of such certificate to the new Holder or the issuance by the Company or
the Trustee of a new certificate to the new Holder.
GLOBAL DEBT SECURITIES AND BOOK-ENTRY SYSTEM. Each Global Debt Security
representing Book-Entry Debt Securities will be deposited with, or on behalf of,
the Depository, and registered in the name of the Depository or a nominee of the
Depository. Except as set forth below, Book-Entry Debt Securities will not be
exchangeable for Certificated Debt Securities and will not otherwise be issuable
as Certificated Debt Securities.
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depository for the related Global
Debt Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Global Debt Security, the Depository will
credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal amounts of the Book-Entry Debt Securities
represented by such Global Debt Security beneficially owned by such
participants. The accounts to be credited shall be designated by any dealers,
underwriters or agents participating in the distribution of such Book-Entry Debt
Securities. Ownership of Book-Entry Debt Securities will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depository for the related Global Debt Security (with respect
to interests of participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to own, transfer
or pledge beneficial interests in Book-Entry Debt Securities.
So long as the Depository for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, the Depository or such
nominee, as the case may be, will be considered the sole owner or Holder of the
Book-Entry Debt Securities represented by such Global Debt Security for all
purposes under
7
<PAGE> 9
the Indenture. Except as set forth below, beneficial owners of Book-Entry Debt
Securities will not be entitled to have such securities registered in their
names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing such securities and will not be
considered the owners or Holders thereof under the Indenture. Accordingly, each
person beneficially owning Book-Entry Debt Securities must rely on the
procedures of the Depository for the related Global Debt Security and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a Holder under the
Indenture.
The Company understands, however, that under existing industry practice,
the Depository will authorize the persons on whose behalf it holds a Global Debt
Security to exercise certain rights of Holders of Debt Securities, and the
Indenture provides that the Company, the Trustee and their respective agents
will treat as the Holder of a Debt Security the persons specified in a written
statement of the Depository with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by Holders
of the Debt Securities pursuant to the Indenture. (Indenture sec. 2.14.6)
Payments of principal of, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depository or its nominee, as the case may be, as
the registered Holder of the related Global Debt Security. (Indenture
sec. 2.14.5) None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in such Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depository, upon receipt of any payment of
principal of, premium, if any, or interest, if any, on a Global Debt Security,
will immediately credit participants' accounts with payments in amounts
proportionate to the respective amounts of Book-Entry Debt Securities held by
each such participant as shown on the records of such Depository. The Company
also expects that payments by participants to owners of beneficial interests in
Book-Entry Debt Securities held through such participants will be governed by
standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants.
If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depository registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue
Certificated Debt Securities in exchange for each Global Debt Security. In
addition, the Company may at any time and in its sole discretion determine not
to have the Book-Entry Debt Securities of any series represented by one or more
Global Debt Securities and, in such event, will issue Certificated Debt
Securities in exchange for the Global Debt Securities of such series. Global
Debt Securities will also be exchangeable by the Holders for Certificated Debt
Securities if an Event of Default with respect to the Book Entry Debt Securities
represented by such Global Debt Securities has occurred and is continuing. Any
Certificated Debt Securities issued in exchange for a Global Debt Security will
be registered in such name or names as the Depository shall instruct the
Trustee. It is expected that such instructions will be based upon directions
received by the Depository from participants with respect to ownership of
Book-Entry Debt Securities relating to such Global Debt Security.
The foregoing information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless otherwise set forth in the Prospectus Supplement, the Debt
Securities will not contain any provisions which may afford Holders of the Debt
Securities protection in the event of a change in control of the Company or in
the event of a highly leveraged transaction (whether or not such transaction
results in a change in control of the Company) which could adversely affect
Holders of Debt Securities.
8
<PAGE> 10
COVENANTS
The applicable Prospectus Supplement will set forth any restrictive
covenants applicable with respect to any issue of Debt Securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
Person (a "successor Person") unless (i) the Company is the surviving
corporation or the successor Person (if other than the Company) is a
corporation, partnership, trust or other entity organized and validly existing
under the laws of any U.S. domestic jurisdiction and expressly assumes the
Company's obligations on the Debt Securities and under the Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing under the Indenture and (iii)
certain other conditions are met. (Indenture sec. 5.1)
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in the payment of any interest upon
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days (unless the entire amount of
such payment is deposited by the Company with the Trustee or with a paying agent
prior to the expiration of such period of 30 days); (b) default in the payment
of principal of or premium, if any, on any Debt Security of that series when due
and payable; (c) default in the deposit of any sinking fund payment, when and as
due in respect of any Debt Security of that series; (d) default in the
performance or breach of any other covenant or warranty of the Company in the
Indenture (other than a covenant or warranty that has been included in the
Indenture solely for the benefit of a series of Debt Securities other than that
series), which default continues uncured for a period of 60 days after written
notice to the Company by the Trustee or to the Company and the Trustee by the
Holders of not less than a majority in principal amount of the outstanding Debt
Securities of that series as provided in the Indenture; (e) certain events of
bankruptcy, insolvency or reorganization with respect to the Company; and (f)
any other Event of Default provided with respect to Debt Securities of that
series that is described in the Prospectus Supplement accompanying this
Prospectus. No Event of Default with respect to a particular series of Debt
Securities (except as to certain events in bankruptcy, insolvency or
reorganization with respect to the Company) necessarily constitutes an Event of
Default with respect to any other series of Debt Securities. (Indenture
sec. 6.1). The occurrence of an Event of Default may constitute an event of
default under the Company's bank credit agreements in existence from time to
time. In addition, the occurrence of certain Events of Default or an
acceleration under the Indenture may constitute an event of default under
certain other indebtedness of the Company outstanding from time to time.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than a majority in principal amount of the
outstanding Debt Securities of that series may, by a notice in writing to the
Company (and to the Trustee if given by the Holders), declare to be due and
payable immediately the principal (or, if the Debt Securities of that series are
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of and accrued and unpaid interest, if any, on all
Debt Securities of that series. In the case of an Event of Default resulting
from certain events of bankruptcy, insolvency or reorganization, the principal
(or such specified amount) of and accrued and unpaid interest, if any, on all
outstanding Debt Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of outstanding Debt Securities. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the Holders of a majority in principal amount of the outstanding
Debt Securities of that series may rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal and
interest, if any, with respect to Debt Securities of that series, have been
cured or waived as provided in the Indenture. (Indenture sec. 6.2) For
information as to waiver
9
<PAGE> 11
of defaults see the discussion set forth below under "-- Modification and
Waiver." Reference is made to the Prospectus Supplement relating to any series
of Debt Securities that are Discount Securities for the particular provisions
relating to acceleration of a portion of the principal amount of such Discount
Securities upon the occurrence of an Event of Default.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
Holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture
sec. 7.1(e)) Subject to certain rights of the Trustee, the Holders of a majority
in principal amount of the outstanding Debt Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Debt Securities of that series. (Indenture
sec. 6.12)
No Holder of any Debt Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for the appointment of a receiver or trustee, or for any remedy under the
Indenture, unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to Debt Securities of that
series and unless also the Holders of at least a majority in principal amount of
the outstanding Debt Securities of that series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. (Indenture sec. 6.7) Notwithstanding the foregoing,
the Holder of any Debt Security will have an absolute and unconditional right to
receive payment of the principal of, premium, if any, and any interest on such
Debt Security on or after the due dates expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (Indenture sec. 6.8)
The Indenture requires the Company, within 120 days after the end of each
of its fiscal years, to furnish to the Trustee a statement as to compliance with
the Indenture. (Indenture sec. 4.3) The Indenture provides that the Trustee may
withhold notice to the Holders of Debt Securities of any series of any Default
or Event of Default (except in payment on any Debt Securities of such series)
with respect to Debt Securities of such series if it in good faith determines
that withholding such notice is in the interest of the Holders of such Debt
Securities. (Indenture sec. 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by the
Company and the Trustee with the consent of the Holders of at least a majority
in principal amount of the outstanding Debt Securities of each series affected
by such modifications or amendments; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Debt Security affected thereby: (a) change the amount of Debt
Securities whose Holders must consent to an amendment or waiver; (b) reduce the
rate of or extend the time for payment of interest (including default interest)
on any Debt Security; (c) reduce the principal of or premium, if any, on or
change the fixed maturity of any Debt Security or reduce the amount of, or
postpone the date fixed for, the payment of any sinking fund or analogous
obligation with respect to any series of Debt Securities; (d) reduce the
principal amount of Discount Securities payable upon acceleration of the
maturity thereof; (e) waive a default in the payment of the principal of,
premium, if any, or interest, if any, on any Debt Security (except a rescission
of acceleration of the Debt Securities of any series by the Holders of at least
a majority in aggregate principal amount of the then outstanding Debt Securities
of such series and a waiver of the payment default that resulted from such
acceleration); (f) make the principal of or premium, if any, or interest, if
any, on any Debt Security payable in currency other than that stated in the Debt
Security; (g) make any change to certain provisions of the Indenture relating
to, among other things, the right of Holders of Debt Securities to receive
payment of the principal of, premium, if any, and interest, if any, on such Debt
Securities and to institute suit for the enforcement of any such payment and to
waivers or amendments; or (h) waive a redemption payment with respect to any
Debt Security. (Indenture sec. 9.3)
10
<PAGE> 12
The Holders of at least a majority in principal amount of the outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Company with provisions of the Indenture other than certain specified
provisions. (Indenture sec. 9.2) The Holders of a majority in principal amount
of the outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of such series waive any past default under the
Indenture with respect to such series and its consequences, except a default in
the payment of the principal of, premium, if any, or any interest, if any, on
any Debt Security of that series or in respect of a covenant or provision which
cannot be modified or amended without the consent of the Holder of each
outstanding Debt Security of such series affected; provided, however, that the
Holders of a majority in principal amount of the outstanding Debt Securities of
any series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration. (Indenture
sec. 6.13)
DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
LEGAL DEFEASANCE. The Indenture provides that, unless otherwise provided by
the terms of the applicable series of Debt Securities, the Company may be
discharged from any and all obligations in respect of the Debt Securities of any
series (except for certain obligations to register the transfer or exchange of
Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by paying agents) upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
or, in the case of Debt Securities denominated in a single currency other than
U.S. Dollars, Foreign Government Obligations, that, through the payment of
interest and principal in respect thereof in accordance with their terms, will
provide money in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants to pay and discharge each installment of
principal (and premium, if any) and interest, if any, on and any mandatory
sinking fund payments in respect of the Debt Securities of such series on the
stated maturity of such payments in accordance with the terms of the Indenture
and such Debt Securities. Such discharge may occur only if, among other things,
the Company shall have delivered to the Trustee an opinion of counsel stating
that the Company has received from, or there has been published by, the United
States Internal Revenue Service a ruling or, since the date of execution of the
Indenture, there has been a change in the applicable United States federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Debt Securities of such series
will not recognize income, gain or loss for United States federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to United States federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred. (Indenture sec. 8.3)
DEFEASANCE OF CERTAIN COVENANTS. The Indenture provides that, unless
otherwise provided by the terms of the applicable series of Debt Securities,
upon compliance with certain conditions, (i) the Company may omit to comply with
the covenants described above under "-- Consolidation, Merger and Sale of
Assets" and certain other covenants set forth in the Indenture, as well as any
additional covenants which may be set forth in the applicable Prospectus
Supplement, and any omission to comply with such covenants will not constitute a
Default or an Event of Default with respect to the Debt Securities of such
series ("covenant defeasance"). The conditions include: the deposit with the
Trustee of money and/or U.S. Government Obligations or, in the case of Debt
Securities denominated in a single currency other than U.S. Dollars, Foreign
Government Obligations, that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent public
accountants to pay and discharge each installment of principal of, premium, if
any, and interest, if any, on and any mandatory sinking fund payments in respect
of the Debt Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities; and the
delivery to the Trustee of an opinion of counsel to the effect that the Holders
of the Debt Securities of such series will not recognize income, gain or loss
for United States federal income tax purposes as a result of such deposit and
related covenant defeasance and will be subject to United States federal income
tax on the same amounts and in the same manner and at the same times as would
have been the case if such deposit and related covenant defeasance had not
occurred. (Indenture sec. 8.4)
11
<PAGE> 13
COVENANT DEFEASANCE AND EVENTS OF DEFAULT. In the event the Company
exercises its option to effect covenant defeasance with respect to any series of
Debt Securities and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default, the amount of money
and/or U.S. Government Obligations or Foreign Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series at the time of their stated maturity but may not be sufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments.
"FOREIGN GOVERNMENT OBLIGATIONS" means, with respect to Debt Securities of
any series that are denominated in a currency other than U.S. Dollars, (i)
direct obligations of the government that issued or caused to be issued such
currency for the payment of which obligations its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by or acting as
an agency or instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable or
redeemable at the option of the issuer thereof.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the internal laws of the State of New York. (Indenture
sec. 10.10)
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to one or more underwriters for
public offering and sale by them and may also sell the Debt Securities to
investors directly or through agents. Any such underwriter or agent involved in
the offer and sale of Debt Securities will be named in the applicable Prospectus
Supplement. The Company has reserved the right to sell or exchange Debt
Securities directly to investors on its own behalf in those jurisdictions where
and in such manner as it is authorized to do so.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Company may also, from
time to time, authorize dealers, acting as the Company's agents, to offer and
sell Debt Securities upon the terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Debt
Securities, underwriters may receive compensation from the Company in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of the Debt Securities for whom they may act as agent. Underwriters
may sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agent. Unless otherwise indicated in a Prospectus Supplement, an agent will be
acting on a best efforts basis and a dealer will purchase Debt Securities as a
principal, and may then resell such Debt Securities at varying prices to be
determined by the dealer.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Dealers and agents
participating in the distribution of Debt Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Debt Securities may be deemed to be
underwriting discounts and commissions. Underwriters, dealers and agents may be
entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act, and to reimbursement by the Company for certain
expenses.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for the Company in the ordinary
course of business, including refinancing of the Company's indebtedness. See
"Use of Proceeds."
12
<PAGE> 14
LEGAL MATTERS
Certain legal matters with respect to the Debt Securities offered hereby
will be passed upon for the Company by Latham & Watkins, San Francisco,
California. Certain partners of Latham & Watkins, members of their families,
related persons and others, have an indirect interest, through limited
partnerships, in less than 1% of the Company's common stock. Such persons do not
have the power to vote or dispose of such shares of common stock. Certain legal
matters will be passed upon for any agents or underwriters by counsel for such
agents or underwriters identified in the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company as of December 28,
1996 and December 30, 1995 and for each of the three fiscal years in the period
ended December 28, 1996, incorporated by reference herein from the Company's
Annual Report on Form 10-K for the year ended December 28, 1996 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference herein, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The consolidated financial statements of Vons as of December 29, 1996 and
December 31, 1995 and for each of the years in the three-year period ended
December 29, 1996, appearing in the Company's Amendment to Current Report on
Form 8-K/A filed with the Commission on May 1, 1996, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
13
<PAGE> 15
======================================================
No person has been authorized to give any information or to make any
representations other than contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer or solicitation by
anyone in any state in which such offer or solicitation is not authorized or in
which the person making such offer is not qualified to do so or to anyone to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall under any circumstance create
any implication that there has been no change in the affairs of the Company
since the date hereof or that the information contained herein is correct as of
any time subsequent to its date.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.................. 2
Information Incorporated by
Reference............................ 2
Disclosure Regarding Forward-Looking
Statements........................... 3
The Company............................ 4
Use of Proceeds........................ 5
Ratio of Earnings to Fixed Charges..... 5
Description of Debt Securities......... 5
Plan of Distribution................... 12
Legal Matters.......................... 13
Experts................................ 13
</TABLE>
======================================================
======================================================
(LOGO)
SAFEWAY INC.
$1,000,000,000
DEBT SECURITIES
------------------------------
PROSPECTUS
------------------------------
, 1997
======================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the Company in connection with the distribution
of the securities being registered are as set forth in the following table:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee.......................................... $ 278,788
*Rating Agency Fees.............................................................. 150,000
*Legal Fees and Expenses......................................................... 400,000
*Accounting Fees and Expenses.................................................... 100,000
*Printing Expenses............................................................... 100,000
*Blue Sky Fees................................................................... 30,000
*Trustee/Issuing & Paying Agent Fees and Expenses................................ 25,000
*Miscellaneous................................................................... 416,212
----------
*Total................................................................. $1,500,000
==========
</TABLE>
- ---------------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the 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 its 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 attorney's 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 a 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
expense which such Court of Chancery or such other court shall deem proper.
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 Company's
board of directors by a
II-1
<PAGE> 17
majority vote of a quorum of disinterested directors who were not parties to
such actions, (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
attorney's 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 Company's By-Laws. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Company's board of directors deems appropriate.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 13 of the Company's 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 Company's 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 Company's board of directors may authorize, by a vote of a majority of
a quorum of the Company's board of directors, 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 Company's
By-Laws. The Company's 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 Company's board of directors so determines, greater
than those provided for in Section 13 of the Company's By-Laws.
The Company 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 the Company.
II-2
<PAGE> 18
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
*1 Form of Underwriting Agreement.
4.1 Form of Indenture.
*4.2 Form of Debt Security.
5 Opinion of Latham & Watkins.
12 Statement regarding Computation of Ratios.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Latham & Watkins (included in Exhibit 5).
24 Powers of Attorney (contained on Page II-6).
**25 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ---------------
* To be filed by amendment or by a report on Form 8-K pursuant to Regulation
S-K, Item 601(b).
** To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(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 the information required to be included in a
post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above
may be contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the 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.
(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 undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or
II-3
<PAGE> 19
section 15(d) of the Securities Exchange Act of 1934 and (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) 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.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant 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
of 1933 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 their 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(j) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
Subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-4
<PAGE> 20
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pleasanton, California on July 31, 1997.
SAFEWAY INC.
By: /s/ STEVEN A. BURD
------------------------------------
Steven A. Burd
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Julian C. Day and Michael C.
Ross, and each of them, 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 a registration
statement on Form S-3 and any or all amendments thereto (including without
limitation any post-effective amendments thereto), and any registration
statement for the same offering that is to be effective under Rule 462(b) of the
Securities Act, and to file each of 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 each of the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- --------------------------- --------------
<C> <S> <C>
/s/ STEVEN A. BURD President, Chief July 31, 1997
- ----------------------------------------------- Executive Officer and
Steven A. Burd Director (Principal
Executive Officer)
/s/ JULIAN C. DAY Executive Vice President, July 31, 1997
- ----------------------------------------------- Chief Financial officer
Julian C. Day (Principal Financial
Officer and Principal
Accounting Officer)
/s/ PETER A. MAGOWAN Director July 31, 1997
- -----------------------------------------------
Peter A. Magowan
/s/ SAM GINN Director July 31, 1997
- -----------------------------------------------
Sam Ginn
</TABLE>
II-5
<PAGE> 21
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- --------------------------- --------------
<C> <S> <C>
/s/ JAMES H. GREENE, JR. Director July 31, 1997
- -----------------------------------------------
James H. Greene, Jr.
/s/ PAUL HAZEN Director July 31, 1997
- -----------------------------------------------
Paul Hazen
/s/ HENRY R. KRAVIS Director July 31, 1997
- -----------------------------------------------
Henry R. Kravis
/s/ ROBERT I. MACDONNELL Director July 31, 1997
- -----------------------------------------------
Robert I. MacDonnell
/s/ GEORGE R. ROBERTS Director July 31, 1997
- -----------------------------------------------
George R. Roberts
/s/ MICHAEL T. TOKARZ Director July 31, 1997
- -----------------------------------------------
Michael T. Tokarz
</TABLE>
II-6
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- ----------------------------------------------------------------------------
<S> <C>
*1 Form of Underwriting Agreement.
4.1 Form of Indenture.
*4.2 Form of Debt Security.
5 Opinion of Latham & Watkins.
12 Statement regarding Computation of Ratios.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Latham & Watkins (included in Exhibit 5).
24 Powers of Attorney (contained on Page II-6).
**25 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- ---------------
* To be filed by amendment or by a report on Form 8-K pursuant to Regulation
S-K, Item 601(b).
** To be filed separately pursuant to Trust Indenture Act Section 305(b)(2).
<PAGE> 1
Exhibit 4.1
- --------------------------------------------------------------------------------
SAFEWAY INC.
INDENTURE
Dated as of _________, 1997
[Name of Trustee]
Trustee
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.......................................1
SECTION 1.1. DEFINITIONS.............................................................1
SECTION 1.2. OTHER DEFINITIONS.......................................................5
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.......................5
SECTION 1.4. RULES OF CONSTRUCTION...................................................6
ARTICLE II. THE SECURITIES..................................................................6
SECTION 2.1. ISSUABLE IN SERIES......................................................6
SECTION 2.2. ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES..........................7
SECTION 2.3. EXECUTION AND AUTHENTICATION............................................9
SECTION 2.4. REGISTRAR AND PAYING AGENT.............................................10
SECTION 2.5. PAYING AGENT TO HOLD MONEY IN TRUST....................................11
SECTION 2.6. SECURITYHOLDER LISTS...................................................11
SECTION 2.7. TRANSFER AND EXCHANGE..................................................11
SECTION 2.8. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.......................12
SECTION 2.9. OUTSTANDING SECURITIES.................................................12
SECTION 2.10. TREASURY SECURITIES...................................................13
SECTION 2.11. TEMPORARY SECURITIES..................................................13
SECTION 2.12. CANCELLATION..........................................................13
SECTION 2.13. DEFAULTED INTEREST....................................................14
SECTION 2.14. GLOBAL SECURITIES.....................................................14
SECTION 2.15. CUSIP NUMBERS.........................................................15
ARTICLE III. REDEMPTION....................................................................15
SECTION 3.1. NOTICE TO TRUSTEE......................................................15
SECTION 3.2. SELECTION OF SECURITIES TO BE REDEEMED.................................16
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 3.3. NOTICE OF REDEMPTION...................................................16
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.........................................16
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE............................................17
SECTION 3.6. SECURITIES REDEEMED IN PART............................................17
ARTICLE IV. COVENANTS......................................................................17
SECTION 4.1. PAYMENT OF PRINCIPAL AND INTEREST......................................17
SECTION 4.2. SEC REPORTS............................................................17
SECTION 4.3. COMPLIANCE CERTIFICATE.................................................17
SECTION 4.4. STAY, EXTENSION AND USURY LAWS.........................................18
SECTION 4.5. CORPORATE EXISTENCE....................................................18
SECTION 4.6. TAXES..................................................................18
ARTICLE V. SUCCESSORS......................................................................18
SECTION 5.1. WHEN COMPANY MAY MERGE, ETC............................................18
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED......................................19
ARTICLE VI. DEFAULTS AND REMEDIES..........................................................19
SECTION 6.1. EVENTS OF DEFAULT......................................................19
SECTION 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.....................20
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE........21
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.......................................22
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES............23
SECTION 6.6. APPLICATION OF MONEY COLLECTED.........................................23
SECTION 6.7. LIMITATION ON SUITS....................................................23
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST.......24
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 6.9. RESTORATION OF RIGHTS AND REMEDIES.....................................24
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE........................................24
SECTION 6.11. DELAY OR OMISSION NOT WAIVER..........................................24
SECTION 6.12. CONTROL BY HOLDERS....................................................25
SECTION 6.13. WAIVER OF PAST DEFAULTS...............................................25
SECTION 6.14. UNDERTAKING FOR COSTS.................................................25
ARTICLE VII. TRUSTEE.......................................................................26
SECTION 7.1. DUTIES OF TRUSTEE......................................................26
SECTION 7.2. RIGHTS OF TRUSTEE......................................................27
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE...........................................28
SECTION 7.4. TRUSTEE'S DISCLAIMER...................................................28
SECTION 7.5. NOTICE OF DEFAULTS.....................................................28
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS..........................................28
SECTION 7.7. COMPENSATION AND INDEMNITY.............................................29
SECTION 7.8. REPLACEMENT OF TRUSTEE.................................................29
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.......................................30
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.........................................30
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....................31
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE.......................................31
SECTION 8.1. SATISFACTION AND DISCHARGE OF INDENTURE................................31
SECTION 8.2. APPLICATION OF TRUST FUNDS; INDEMNIFICATION............................32
SECTION 8.3. LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES...........................33
SECTION 8.4. COVENANT DEFEASANCE....................................................34
</TABLE>
iii
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 8.5. REPAYMENT TO COMPANY...................................................35
ARTICLE IX. AMENDMENTS AND WAIVERS.........................................................36
SECTION 9.1. WITHOUT CONSENT OF HOLDERS.............................................36
SECTION 9.2. WITH CONSENT OF HOLDERS................................................36
SECTION 9.3. LIMITATIONS............................................................37
SECTION 9.4. COMPLIANCE WITH TRUST INDENTURE ACT....................................37
SECTION 9.5. REVOCATION AND EFFECT OF CONSENTS......................................37
SECTION 9.6. NOTATION ON OR EXCHANGE OF SECURITIES..................................38
SECTION 9.7. TRUSTEE PROTECTED......................................................38
ARTICLE X. MISCELLANEOUS...................................................................38
SECTION 10.1. TRUST INDENTURE ACT CONTROLS..........................................38
SECTION 10.2. NOTICES...............................................................38
SECTION 10.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS...........................39
SECTION 10.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT....................39
SECTION 10.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.........................40
SECTION 10.6. RULES BY TRUSTEE AND AGENTS...........................................40
SECTION 10.7. LEGAL HOLIDAYS........................................................40
SECTION 10.8. NO RECOURSE AGAINST OTHERS............................................40
SECTION 10.9. COUNTERPARTS..........................................................41
SECTION 10.10. GOVERNING LAWS.......................................................41
SECTION 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS........................41
SECTION 10.12. SUCCESSORS...........................................................41
SECTION 10.13. SEVERABILITY.........................................................41
</TABLE>
iv
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 10.14. TABLE OF CONTENTS, HEADINGS, ETC.....................................41
SECTION 10.15. SECURITIES IN A FOREIGN CURRENCY OR IN ECU...........................41
SECTION 10.16. JUDGMENT CURRENCY....................................................42
ARTICLE XI. SINKING FUNDS..................................................................43
SECTION 11.1. APPLICABILITY OF ARTICLE..............................................43
SECTION 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.................43
SECTION 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND.............................44
</TABLE>
v
<PAGE> 7
SAFEWAY INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 1997
<TABLE>
<S> <C>
SECTION 310(a)(1) ............................................................. 7.10
(a)(2) ............................................................. 7.10
(a)(3) ............................................................. NOT APPLICABLE
(a)(4) ............................................................. NOT APPLICABLE
(a)(5) ............................................................. 7.10
(b) ............................................................. 7.10
SECTION 311(a) ............................................................. 7.11
(b) ............................................................. 7.11
(c) ............................................................. NOT APPLICABLE
SECTION 312(a) ............................................................. 2.6
(b) ............................................................. 10.3
(c) ............................................................. 10.3
SECTION 313(a) ............................................................. 7.6
(b)(1) ............................................................. 7.6
(b)(2) ............................................................. 7.6
(c)(1) ............................................................. 7.6
(d) ............................................................. 7.6
SECTION 314(a) ............................................................. 4.2, 10.5
(b) ............................................................. NOT APPLICABLE
(c)(1) ............................................................. 10.4
(c)(2) ............................................................. 10.4
(c)(3) ............................................................. NOT APPLICABLE
(d) ............................................................. NOT APPLICABLE
(e) ............................................................. 10.5
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
(f) ............................................................. NOT APPLICABLE
SECTION 315(a) ............................................................. 7.1
(b) ............................................................. 7.5
(c) ............................................................. 7.1
(d) ............................................................. 7.1
(e) ............................................................. 6.14
SECTION 316(a) ............................................................. 2.10
(a)(1)(a) ............................................................. 6.12
(a)(1)(b) ............................................................. 6.13
(b) ............................................................. 6.8
SECTION 317(a)(1) ............................................................. 6.3
(a)(2) ............................................................. 6.4
(b) ............................................................. 2.5
SECTION 318(a) ............................................................. 10.1
</TABLE>
- ------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE> 9
Indenture dated as of ___________, 1997 between Safeway Inc., a
Delaware corporation ("Company"), and [Name of Trustee], a ________________
("Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Securities issued
under this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes imposed on
Holders specified therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language
of the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security, including any interest
coupon appertaining thereto, that does not provide for the identification of the
Holder thereof.
"Board of Directors" means the Board of Directors of the Company
or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant
<PAGE> 10
to authorization by the Board of Directors and to be in full force and effect on
the date of the certificate and delivered to the Trustee.
"Business Day" means, unless otherwise provided by Board
Resolution, Officers' Certificate or supplemental indenture hereto for a
particular Series, any day except a Saturday, Sunday or a legal holiday in The
City of New York or the City of San Francisco, California on which banking
institutions are authorized or required by law, regulation or executive order to
close.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of
the Company by its Chief Executive Officer, a President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered.
"Default" means any event which is, or after notice or passage of
time would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the
Commission of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Foreign Currency" means any currency or currency unit issued by
a government other than the government of The United States of America.
2
<PAGE> 11
"Foreign Government Obligations" means with respect to Securities
of any Series that are denominated in a Foreign Currency, (i) direct obligations
of the government that issued or caused to be issued such currency for the
payment of which obligations its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable or
redeemable at the option of the issuer thereof.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.1
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Holder" or "Securityholder" means a person in whose name a
Security is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
or contemplated hereunder.
"Interest" with respect to any Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
"Maturity," when used with respect to any Security or installment
of principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
"Officer" means the Chief Executive Officer, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company.
"person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
3
<PAGE> 12
"principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on, and any Additional Amounts in
respect of, the Security.
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt
instruments of the Company of any Series authenticated and delivered under this
Indenture.
"Series" or "Series of Securities" means each series of
debentures, notes or other debt instruments of the Company created pursuant to
Sections 2.1 and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect
Subsidiary of the Company that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act of 1933, as amended, as such regulation is in effect on the date hereof, or
(ii) any group of direct or indirect Subsidiaries of the Company that, taken
together as a group, would be a "significant subsidiary" as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of
1933, as amended, as such regulation is in effect on the date hereof.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of
which at least a majority of the outstanding stock having by the terms thereof
ordinary voting power for the election of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by
such person, or by one or more other Subsidiaries, or by such person and one or
more other Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "TIA" means, to the extent required by any such amendment, the
Trust Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee"
4
<PAGE> 13
as used with respect to the Securities of any Series shall mean the Trustee with
respect to Securities of that Series.
"U.S. Government Obligations" means securities which are (i)
direct obligations of The United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
Section 1.2. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN
SECTION
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
5
<PAGE> 14
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
./
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein are used herein as so defined.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(c) references to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect as of the
time when and for the period as to which such accounting principles are
to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the
plural include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II.
THE SECURITIES
Section 2.1. Issuable in Series.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be provided in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate detailing the adoption of the terms
thereof pursuant to the Board Resolution, supplemental indenture hereto or
Officers' Certificate. In the case of Securities of a Series to be issued from
time to time, the Board Resolution, Officers' Certificate or supplemental
indenture hereto may provide for the method by which specified terms (such as
interest rate, maturity date, record date or date from which interest
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should accrue) are to be determined. Securities may differ between Series in
respect of any matters, provided that all Series of Securities shall be equally
and ratably entitled to the benefits of the Indenture.
Section 2.2. Establishment of Terms of Series of Securities.
At or prior to the issuance of any Securities within a Series,
the following shall be established (as to the Series generally, in the case of
Subsections 2.2.1 and 2.2.2 and either as to such Securities within the Series
or as to the Series generally in the case of Subsections 2.2.3 through 2.2.22)
by a Board Resolution, a supplemental indenture hereto or an Officers'
Certificate pursuant to authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Securities of the Series will
be issued;
2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4. the date or dates on which the principal of the Securities
of the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable) per
annum or, if applicable, the method used to determine such rate or rates
(including, but not limited to, any commodity, commodity index, stock exchange
index or financial index) at which the Securities of the Series shall bear
interest, if any, the date or dates from which such interest, if any, shall
accrue, the date or dates on which such interest, if any, shall commence and be
payable and any regular record date for the interest payable on any interest
payment date;
2.2.6. the place or places where the principal of and interest,
if any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.7. the period or periods within which, the price or prices at
which and the terms and conditions upon which the Securities of the Series may
be redeemed, in whole or in part, at the option of the Company;
2.2.8. the obligation, if any, of the Company to redeem or
purchase the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
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2.2.9. the dates, if any, on which and the price or prices at
which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
2.2.10. if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;
2.2.11. the forms of the Securities of the Series in bearer or
fully registered form (and, if in fully registered form, whether the Securities
will be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the portion
of the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section
6.2;
2.2.13. the currency of denomination of the Securities of the
Series, which may be Dollars or any Foreign Currency, including, but not limited
to, the ECU, and if such currency of denomination is a composite currency other
than the ECU, the agency or organization, if any, responsible for overseeing
such composite currency;
2.2.14. the designation of the currency, currencies or currency
units in which payment of the principal of and interest, if any, on the
Securities of the Series will be made;
2.2.15. if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be
determined;
2.2.16. the manner in which the amounts of payment of principal
of or interest, if any, on the Securities of the Series will be determined, if
such amounts may be determined by reference to an index based on a currency or
currencies other than that in which the Securities of the Series are denominated
or designated to be payable or by reference to a commodity, commodity index,
stock exchange index or financial index;
2.2.17. the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.18. any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19. any addition to or change in the covenants set forth in
Article IV which applies to Securities of the Series;
2.2.20. any other terms of the Securities of the Series (which
may modify or delete any provision of this Indenture insofar as it applies to
such Series); and
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2.2.21. any depositories, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to Securities of
such Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same
time and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture hereto or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate.
Section 2.3. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual
or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution, supplemental indenture hereto or Officers' Certificate,
upon receipt by the Trustee of a Company Order. If provided for in such
procedures, such Company Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company or its duly
authorized agent or agents, which oral instructions shall be promptly confirmed
in writing. Each Security shall be dated the date of its authentication unless
otherwise provided by a Board Resolution, a supplemental indenture hereto or an
Officers' Certificate.
The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution, supplemental indenture
hereto or Officers' Certificate delivered pursuant to Section 2.2, except as
provided in Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee
shall have received and (subject to Section 7.2) shall be fully protected in
relying on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action
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may not be taken lawfully; or (b) if the Trustee in good faith by its board of
directors or trustees, executive committee or a trust committee of directors
and/or vice-presidents shall determine that such action would expose the Trustee
to personal liability to Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.4. Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series may
be presented or surrendered for payment ("Paying Agent"), where Securities of
such Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect of
the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the name or address of any such
co-registrar, additional paying agent or additional service agent. The term
"Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.
The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.
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Section 2.5. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust, for the
benefit of Securityholders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal of or interest on
the Series of Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary of the Company) shall have no further liability
for the money. If the Company or a Subsidiary of the Company acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
Securityholders of any Series of Securities all money held by it as Paying
Agent.
Section 2.6. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with
TIASection312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
Section 2.7. Transfer and Exchange.
Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).
Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for the
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
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Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.9. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to
be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
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If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of the Company) holds on the Maturity of Securities of a
Series money sufficient to pay such Securities payable on that date, then on and
after that date such Securities of the Series cease to be outstanding and
interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security.
In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
Section 2.10. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any direction, waiver or
consent, Securities of a Series owned by the Company shall be disregarded,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
of a Series that the Trustee knows are so owned shall be so disregarded.
Section 2.11. Temporary Securities.
Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities upon a
Company Order. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary securities shall have the same rights
under this Indenture as the definitive Securities.
Section 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
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Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
Section 2.14. Global Securities.
2.14.1. Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.
2.14.2. Transfer and Exchange. Notwithstanding any provisions to
the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as the Depository shall direct in writing in an aggregate principal amount
equal to the principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may
not be transferred except as a whole by the Depository with respect to such
Global Security to a nominee of such Depository, by a nominee of such Depository
to such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3. Legend. Any Global Security issued hereunder shall bear a
legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository,
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by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such a successor Depository."
2.14.4. Acts of Holders. The Depository, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.
2.14.5. Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest, if any, on any Global Security shall be made to
the person specified therein.
2.14.6. Consents, Declaration and Directions. Except as provided
in Section 2.14.5, the Company, the Trustee and any Agent shall treat a person
as the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations or directions required to be given by the Holders
pursuant to this Indenture.
Section 2.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
Section 3.1. Notice to Trustee.
The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).
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Section 3.2. Selection of Securities to be Redeemed.
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, if less
than all the Securities of a Series are to be redeemed, the Trustee shall select
the Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. Notice of Redemption.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must
be surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for
redemption ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and
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at the redemption price. A notice of redemption may not be conditional. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price plus accrued interest to the redemption date.
Section 3.5. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with
the Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.
Section 3.6. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE IV.
COVENANTS
Section 4.1. Payment of Principal and Interest.
The Company covenants and agrees for the benefit of each Series
of Securities that it will duly and punctually pay the principal of and
interest, if any, on the Securities of that Series in accordance with the terms
of such Securities and this Indenture.
Section 4.2. SEC Reports.
The Company shall deliver to the Trustee within 15 days after it
files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
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The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.4. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
Section 4.5. Corporate Existence.
Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory), licenses and franchises of the
Company; provided, however, that the Company shall not be required to preserve
any such right, license or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries taken as a whole and that the loss
thereof is not adverse in any material respect to the Holders.
Section 4.6. Taxes.
The Company shall pay prior to delinquency all taxes, assessments
and governmental levies, except as contested in good faith and by appropriate
proceedings.
ARTICLE V.
SUCCESSORS
Section 5.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of its properties and assets
to, any person (a "successor person") unless:
(a) the Company is the surviving corporation or the successor
person (if other than the Company) is a corporation, partnership,
trust or other entity organized and validly existing under the laws of
any U.S. domestic jurisdiction and expressly assumes the Company's
obligations on the Securities and under this Indenture and
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(b) immediately after giving effect to the transaction, no
Default or Event of Default, shall have occurred and be continuing.
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and any supplemental indenture comply with this Indenture.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall be released from
all obligations and covenants under this Indenture and the Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the
establishing Board Resolution, supplemental indenture hereto or Officers'
Certificate, it is provided that such Series shall not have the benefit of said
Event of Default:
(a) default in the payment of any interest on any Security of
that Series when it becomes due and payable, and continuance of such
default for a period of 30 days (unless the entire amount of such
payment is deposited by the Company with the Trustee or with a Paying
Agent prior to the expiration of such period of 30 days); or
(b) default in the payment of the principal of any Security of
that Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and
as due in respect of any Security of that Series; or
(d) default in the performance or breach of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty that has been included in this Indenture solely for the
benefit of Series of Securities other than that Series), which default
continues uncured for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by
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the Holders of not less than a majority in principal amount of the
outstanding Securities of that Series a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(e) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is unable to pay its debts as the same become
due; or
(f) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case,
(ii) appoints a Custodian of the Company or for all or
substantially all of its property, or
(iii) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days; or
(g) any other Event of Default provided with respect to
Securities of that Series, which is specified in a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate, in
accordance with Section 2.2.18.
No Event of Default with respect to a particular Series of
Securities (except with respect to subsections (e) and (f) above) necessarily
constitutes an Event of Default with respect to any other Series of Securities.
The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any Series
at the time outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than a majority in principal amount of the
outstanding Securities of that Series may declare
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the principal amount (or, if any Securities of that Series are Discount
Securities, such portion of the principal amount as may be specified in the
terms of such Securities) of all of the Securities of that Series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable. If an Event of
Default specified in Section 6.1(e) or (f) shall occur, the principal amount (or
specified amount) of all outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration with respect
to any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if all Events of Default
with respect to Securities of that Series, other than the non-payment of the
principal and interest, if any, of Securities of that Series which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair
any right consequent thereon.
Section 6.3. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of principal of any Security
at the Maturity thereof, or
(c) default is made in the deposit of any sinking fund payment
when and as due by the terms of a Security,
then, the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such
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Securities and collect the moneys adjudged or deemed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to any Securities of any
Series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such Series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
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Section 6.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 6.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.7; and
Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7. Limitation on Suits.
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that Series;
(b) the Holders of at least a majority in principal amount of the
outstanding Securities of that Series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Securities of that
Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 6.8. Unconditional Right of Holders to Receive Principal and
Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Security on
the Stated Maturity or Stated Maturities expressed in such Security (or, in the
case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 6.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from
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time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 6.12. Control by Holders.
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall
have the right to decline to follow any such direction if the Trustee
in good faith shall, by a Responsible Officer of the Trustee,
determine that the proceeding so directed would involve the Trustee in
personal liability.
Section 6.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default (i) in the payment of the
principal of or interest on any Security of such Series (provided, however, that
the Holders of a majority in principal amount of the outstanding Securities of
any Series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration) or (ii) in respect
of a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each outstanding Security. Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of
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Holders, holding in the aggregate more than 10% in principal amount of the
outstanding Securities of any Series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or interest on any
Security on or after the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the redemption date).
ARTICLE VII.
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; however, in
the case of any such Officers' Certificates or Opinions of
Counsel which by any provisions hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine such
Officers' Certificates and Opinions of Counsel to determine
whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b)
of this Section.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect
to Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of
the outstanding Securities of such Series relating to the time,
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method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to
the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk
is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care
as are set forth in paragraphs (a), (b) and (c) of this Section with
respect to the Trustee.
Section 7.2. Rights of Trustee.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care. No Depository shall be deemed an agent of the Trustee
and the Trustee shall not be responsible for any act or omission by
any Depository.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers, provided that the Trustee's conduct does
not constitute negligence or bad faith.
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(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder without negligence and in good faith and in
reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee is also subject
to Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Securityholder of the
Securities of that Series and, if any Bearer Securities are outstanding, publish
on one occasion in an Authorized Newspaper, notice of a Default or Event of
Default within 90 days after it occurs or, if later, after a Responsible Officer
of the Trustee has knowledge of such Default or Event of Default. Except in the
case of a Default or Event of Default in payment of principal of or interest on
any Security of any Series, the Trustee may withhold the notice if and so long
as its corporate trust committee or a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Securityholders of that Series.
Section 7.6. Reports by Trustee to Holders.
Within 60 days after May 15 in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the Security Register, and, if any Bearer Securities are outstanding, publish in
an Authorized Newspaper, a brief report dated as of such May 15, in accordance
with, and to the extent required under, TIA Section 313.
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A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed. The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
compensation for its services as the Company and the Trustee shall from time to
time agree upon in writing. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have one
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld. This indemnification
shall apply to officers, directors, employees, shareholders and agents of the
Trustee.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee or by any officer, director,
employee, shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or
more Series by so notifying the Company at least 30 days prior to the date of
the proposed resignation. The Holders of a majority in principal amount of the
Securities of any Series may remove the Trustee
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with respect to that Series by so notifying the Trustee and the Company. The
Company may remove the Trustee with respect to Securities of one or more Series
if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee with respect to the Securities of any one
or more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least a majority in principal amount of the Securities of the applicable Series
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring Trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always
have a combined capital and surplus of at least
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$25,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Order cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered
(other than Securities that have been destroyed, lost or stolen
and that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity
within one year, or
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(4) are deemed paid and discharged pursuant to Section
8.3, as applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which
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have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.7, and, if money
shall have been deposited with the Trustee pursuant to clause (a) of this
Section or if money or obligations shall have been deposited with or received by
the Trustee pursuant to Section 8.3, the obligations of the Trustee under
Section 8.2 and Section 8.5 shall survive.
Section 8.2. Application of Trust Funds; Indemnification.
(a) Subject to the provisions of Section 8.5, all money deposited
with the Trustee pursuant to Section 8.1, all money and U.S.
Government Obligations or Foreign Government Obligations deposited
with the Trustee pursuant to Section 8.3 or 8.4 and all money received
by the Trustee in respect of U.S. Government Obligations or Foreign
Government Obligations deposited with the Trustee pursuant to Section
8.3 or 8.4, shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine,
to the persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with or received by the
Trustee or to make mandatory sinking fund payments or analogous
payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S.
Government Obligations or Foreign Government Obligations deposited
pursuant to Sections 8.3 or 8.4 or the interest and principal received
in respect of such obligations other than any payable by or on behalf
of Holders.
(c) The Trustee shall deliver or pay to the Company from time to
time upon Company Request any U.S. Government Obligations or Foreign
Government Obligations or money held by it as provided in Sections 8.3
or 8.4 which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited
for the purpose for which such U.S. Government Obligations or Foreign
Government Obligations or money were deposited or received. This
provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations or Foreign Government Obligations held under
this Indenture.
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Section 8.3. Legal Defeasance of Securities of any Series.
Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.20, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of any such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of any such Series,
shall no longer be in effect (and the Trustee, at the expense of the Company,
shall, at Company Request, execute proper instruments acknowledging the same),
except as to:
(a) the rights of Holders of Securities of such Series to
receive, from the trust funds described in subparagraph (d) hereof,
(i) payment of the principal of and each installment of principal of
or interest on the outstanding Securities of such Series on the Stated
Maturity of such principal or installment of principal or interest and
(ii) the benefit of any mandatory sinking fund payments applicable to
the Securities of such Series on the day on which such payments are
due and payable in accordance with the terms of this Indenture and the
Securities of such Series;
(b) the Company's obligations with respect to such Securities of
such Series under Sections 2.4, 2.7 and 2.8; and
(c) the rights, powers, trust and immunities of the Trustee
hereunder and the duties of the Trustee under Section 8.2 and the duty
of the Trustee to authenticate Securities of such Series issued on
registration of transfer or exchange;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for
and dedicated solely to the benefit of the Holders of such Securities
(i) in the case of Securities of such Series denominated in Dollars,
cash in Dollars (or such other money or currencies as shall then be
legal tender in the United States) and/or U.S. Government Obligations,
or (ii) in the case of Securities of such Series denominated in a
Foreign Currency (other than a composite currency), money and/or
Foreign Government Obligations, which through the payment of interest
and principal in respect thereof, in accordance with their terms, will
provide (and without reinvestment and assuming no tax liability will
be imposed on such Trustee), not later than one day before the due
date of any payment of money, an amount in cash, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge each installment of principal
(including mandatory sinking fund or analogous payments) of and
interest, if any, on all the Securities of such Series on the dates
such installments of interest or principal are due;
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<PAGE> 42
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities
of such Series shall have occurred and be continuing on the date of
such deposit or during the period ending on the 91st day after such
date;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
Securities of such Series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of the Securities of such Series
over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(i) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this Section have been complied with.
Section 8.4. Covenant Defeasance.
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional
covenants contained in a supplemental indenture hereto for a particular Series
of Securities or a Board Resolution or an Officers' Certificate delivered
pursuant to Section 2.2.20 (and the failure to comply with any such provisions
shall not constitute a Default or Event of Default under Section 6.1) and the
occurrence of any event described in clause (d) of Section 6.1 or contained in a
supplemental indenture hereto for a particular series of Securities or a Board
Resolution or an Officers' Certificate delivered pursuant to Section 2.2.20 and
designated as an Event of Default shall not constitute a Default or Event of
Default hereunder, with respect to the Securities of such Series, provided that
the following conditions shall have been satisfied:
(a) With reference to this Section 8.4, the Company has deposited
or caused to be irrevocably deposited (except as provided in Section
8.3) with the Trustee as trust
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funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities (i) in the
case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal
tender in the United States) and/or U.S. Government Obligations, or
(ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign
Government Obligations, which through the payment of interest and
principal in respect thereof, in accordance with their terms, will
provide (and without reinvestment and assuming no tax liability will
be imposed on such Trustee), not later than one day before the due
date of any payment of money, an amount in cash, sufficient, in the
opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of
principal of, premium, if any, and interest, if any, on and any
mandatory sinking fund payments in respect of the Securities of such
Series on the dates such installments of interest, principal or
premium are due;
(b) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities
of such Series shall have occurred and be continuing on the date of
such deposit or during the period ending on the 91st day after such
date;
(d) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that Holders of the Securities of such Series will
not recognize income, gain or loss for federal income tax purposes as
a result of such deposit and defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and defeasance had
not occurred; and
(e) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the defeasance
contemplated by this Section have been complied with.
Section 8.5. Repayment to Company.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
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ARTICLE IX.
AMENDMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect the rights
of any Securityholder;
(e) to provide for the issuance of and establish the form and
terms and conditions of Securities of any Series as permitted by this
Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more Series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Section 9.2. With Consent of Holders.
The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental
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indenture or waiver under this section becomes effective, the Company shall mail
to the Holders of Securities affected thereby and, if any Bearer Securities
affected thereby are outstanding, publish on one occasion in an Authorized
Newspaper, a notice briefly describing the supplemental indenture or waiver. Any
failure by the Company to mail or publish such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture or waiver.
Section 9.3. Limitations.
Without the consent of each Securityholder affected, an amendment
or waiver may not:
(a) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation;
(d) reduce the principal amount of Discount Securities payable
upon acceleration of the maturity thereof;
(e) waive a Default or Event of Default in the payment of the
principal of or interest, if any, on any Security (except a rescission
of acceleration of the Securities of any Series by the Holders of at
least a majority in principal amount of the outstanding Securities of
such Series and a waiver of the payment default that resulted from
such acceleration);
(f) make the principal of or interest, if any, on any Security
payable in any currency other than that stated in the Security;
(g) make any change in Sections 6.8, 6.13, or 9.3 (this
sentence); or
(h) waive a redemption payment with respect to any Security.
Section 9.4. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or
more Series shall be set forth in a supplemental indenture hereto that complies
with the TIA as then in effect.
Section 9.5. Revocation and Effect of Consents.
Until an amendment is set forth in a supplemental indenture or a
waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and
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every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date of the supplemental
indenture or the date the waiver becomes effective.
Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (h) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
Section 9.6. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment
or waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
Section 9.7. Trustee Protected.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
Section 10.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. Notices.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by
first-class mail:
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if to the Company:
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, California 94588
Attention: Michael C. Ross
Senior Vice President,
Secretary and General Counsel
if to the Trustee:
[Name of Trustee]
[Address]
________________________________
________________________________
Attention: _____________________
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed
by first-class mail to his address shown on the register kept by the Registrar
and, if any Bearer Securities are outstanding, published in an Authorized
Newspaper. Failure to mail a notice or communication to a Securityholder of any
Series or any defect in it shall not affect its sufficiency with respect to
other Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.
Section 10.3. Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to
TIASection 312(b) with other Securityholders of that Series or any other Series
with respect to their rights under this Indenture or the Securities of that
Series or all Series. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIASection 312(c).
Section 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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<PAGE> 48
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 10.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting
of Securityholders of one or more Series. Any Agent may make reasonable rules
and set reasonable requirements for its functions.
Section 10.7. Legal Holidays.
Unless otherwise provided by Board Resolution, Officers'
Certificate or supplemental indenture hereto for a particular Series, a "Legal
Holiday" is any day that is not a Business Day. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 10.8. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
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Section 10.9. Counterparts.
This Indenture may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.10. Governing Laws.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 10.11. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 10.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
Section 10.13. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.14. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 10.15. Securities in a Foreign Currency or in ECU.
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for
the purpose of taking such action shall be that amount of Dollars
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<PAGE> 50
that could be obtained for such amount at the Market Exchange Rate at such time.
For purposes of this Section 10.15, "Market Exchange Rate" shall mean the noon
Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, however, in the
case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by
the Commission of the European Union (or any successor thereto) as published in
the Official Journal of the European Union (such publication or any successor
publication, the "Journal"). If such Market Exchange Rate is not available for
any reason with respect to such currency, the Trustee shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York or, in the case of ECUs, the rate of exchange as
published in the Journal, as of the most recent available date, or quotations
or, in the case of ECUs, rates of exchange from one or more major banks in The
City of New York or in the country of issue of the currency in question or, in
the case of ECUs, in Luxembourg or such other quotations or, in the case of
ECUs, rates of exchange as the Trustee, upon consultation with the Company,
shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a Series
denominated in currency other than Dollars in connection with any action taken
by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Company and all Holders.
Section 10.16. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or other amount on the Securities of any Series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, to the extent permitted by applicable law, the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, any recovery pursuant to any judgment (whether or not entered in
accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable, and (iii) shall not be affected by judgment being obtained for any
other
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sum due under this Indenture. For purposes of the foregoing, "New York
Banking Day" means any day except a Saturday, Sunday or a legal holiday in The
City of New York on which banking institutions are authorized or required by
law, regulation or executive order to close.
ARTICLE XI.
SINKING FUNDS
Section 11.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of a Series, except as otherwise
permitted or required by any form of Security of such Series issued pursuant to
this Indenture.
The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
Section 11.2. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been repurchased by the Company or redeemed either at
the election of the Company pursuant to the terms of such Series of Securities
(except pursuant to any mandatory sinking fund) or through the application of
permitted optional sinking fund payments or other optional redemptions pursuant
to the terms of such Securities, provided that such Securities have not been
previously so credited. Such Securities shall be received by the Trustee,
together with an Officers' Certificate with respect thereto, not later than 15
days prior to the date on which the Trustee begins the process of selecting
Securities for redemption, and shall be credited for such purpose by the Trustee
at the price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of
cash payments pursuant to this Section 11.2, the principal amount of Securities
of such Series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such Series
for redemption, except upon receipt of a Company Order that such action be
taken, and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment, provided, however, that the
Trustee or such Paying Agent shall from time to time upon receipt of a Company
Order pay over and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent
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upon delivery by the Company to the Trustee of Securities of that Series
purchased by the Company having an unpaid principal amount equal to the cash
payment required to be released to the Company.
Section 11.3. Redemption of Securities for Sinking Fund.
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
44
<PAGE> 53
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed and attested, all as of the day and year first above
written.
Attest: Safeway Inc.
By:________________________________
Name: Michael C. Ross
Its: Senior Vice President,
Secretary and General Counsel
[Name of Trustee]
By:________________________________
Name:
Its:
<PAGE> 1
Exhibit 5
August 4, 1997
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, CA 94588
Re: $1,000,000,000 Aggregate Offering Price of Securities of
Safeway Inc.
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the
"Registration Statement") filed on August 4, 1997 with the Securities Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement also constitutes, pursuant to
Rule 429 under the Securities Act, Post-Effective Amendment No. 1 to
Registration Statement No. 33-51552, you have requested our opinion with respect
to the matters set forth below.
You have provided us with a draft prospectus (the
"Prospectus") which is a part of the Registration Statement. The Prospectus
provides that it will be supplemented in the future by one or more supplements
to the Prospectus (each a "Prospectus Supplement"). The Prospectus as
supplemented by various Prospectus Supplements will provide for the registration
by Safeway Inc., a Delaware corporation (the "Company"), of up to $1,000,000,000
aggregate offering price of debt securities (the "Debt Securities"). The Debt
Securities may be issued pursuant to one or more indentures and one or more
supplements thereto (collectively, the "Indentures"), in each case between the
Company and a trustee (each, a "Trustee").
In our capacity as your special counsel in connection with the
Registration Statement, we are generally familiar with the proceedings taken and
proposed to be taken by the Company in connection with the authorization and
issuance of the Debt Securities. For purposes
<PAGE> 2
Safeway Inc.
August 4, 1997
Page 2
of this opinion, we have assumed that such proceedings will be timely and
properly completed, in accordance with all requirements of applicable federal,
Delaware and New York laws, in the manner presently proposed.
We have made such legal and factual examinations and
inquiries, including an examination of originals and copies certified or
otherwise identified to our satisfaction, of all such documents, corporate
records and instruments of the Company as we have deemed necessary or
appropriate for purposes of this opinion. In our examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity to authentic original documents of all
documents submitted to us as copies.
We have been furnished with, and with your consent have
exclusively relied upon, certificates of officers of the Company with respect to
certain factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject
transaction only of the federal securities laws of the United States, the
General Corporation Law of the State of Delaware and the internal laws of the
State of New York, and we express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or, in the
case of Delaware, any other laws, or as to any matters of municipal law or the
laws of any local agencies within any state.
Subject to the foregoing and the other qualifications set
forth herein, it is our opinion that, as of the date hereof, when: (a) the Debt
Securities have been duly established in accordance with the terms of the
applicable Indentures (including, without limitation, the adoption by the Board
of Directors of the Company of a resolution duly authorizing the issuance and
delivery of the Debt Securities), duly authenticated by the Trustee and duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the applicable Indenture and as
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), and (b) when the Registration Statement and any
required post-effective amendments thereto have all become effective under the
Securities Act, and (c) assuming that the terms of the Debt Securities as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that the
Debt Securities as executed and delivered do not violate any law applicable to
the Company or result in a default under or breach of any agreement or
instrument binding upon the Company, and (e) assuming that the Debt Securities
as executed and delivered comply with all requirements and restrictions, if any,
applicable to the Company, whether imposed by any court or governmental or
regulatory body having jurisdiction over the Company, and (f) assuming that the
Debt Securities are then issued and sold as contemplated in the Registration
Statement, the Prospectus and the related Prospectus
<PAGE> 3
Safeway Inc.
August 4, 1997
Page 3
Supplement(s), the Debt Securities will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
the terms of the Debt Securities.
The opinion rendered in the paragraph above relating to the
enforceability of the Debt Securities is subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors; (ii) the effect
of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before which any
proceeding therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of, or contribution to, a party with respect to a liability
where such indemnification or contribution is contrary to public policy; (iv) we
express no opinion concerning the enforceability of any waiver of rights or
defenses with respect to stay, extension or usury laws; (v) we express no
opinion with respect to whether acceleration of Debt Securities may affect the
collectibility of any portion of the stated principal amount thereof which might
be determined to constitute unearned interest thereon; and (vi) we express no
opinion concerning the enforceability of the judgment currency provision
contained in Section 10.16 of the Indenture.
We assume for purposes of this opinion that (i) the Company
has been duly incorporated and is validly existing as a corporation under the
laws of the State of Delaware and has the corporate power and authority to issue
and sell the Debt Securities; (ii) the Debt Securities have been duly authorized
by all necessary corporate action by the Company; (iii) the applicable Indenture
has been duly authorized by all necessary corporate action by the Company, has
been duly executed and delivered by the Company and constitutes the legally
valid, binding and enforceable obligation of the Company enforceable against the
Company in accordance with its terms; (iv) the Trustee for each Indenture is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (v) the Trustee is duly qualified to engage in the
activities contemplated by the applicable Indenture; (vi) the applicable
Indenture has been duly authorized, executed and delivered by the applicable
Trustee and constitutes a legally valid, binding and enforceable obligation of
the Trustee, enforceable against the Trustee in accordance with its terms; (vii)
the Trustee is in compliance, generally and with respect to acting as Trustee
under the applicable Indenture, with all applicable laws and regulations; and
(viii) the Trustee has the requisite organizational and legal power and
authority to perform its obligations under the applicable Indenture.
<PAGE> 4
Safeway Inc.
August 4, 1997
Page 4
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
SAFEWAY INC. AND SUBSIDIARIES
Exhibit 12
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
Fiscal Year
-----------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Income before income taxes, $ 767.6 $ 556.5 $ 424.1 $ 216.3 $ 197.4
extraordinary loss and cumulative
effect of accounting changes
Add interest expense 178.5 199.8 221.7 265.5 290.4
Add interest on rental expense (a) 90.0 87.5 86.6 88.0 88.0
Less equity in earnings of unconsolidated (50.0) (26.9) (27.3) (33.5) (39.1)
affiliates
Add minority interest in subsidiary 3.4 3.9 3.0 3.5 1.7
--------- --------- --------- --------- ---------
Earnings $ 989.5 $ 820.8 $ 708.1 $ 539.8 $ 538.4
========= ========= ========= ========= =========
Interest expense $ 178.5 $ 199.8 $ 221.7 $ 265.5 $ 290.4
Add capitalized interest 4.4 4.6 2.9 4.2 8.0
Add interest on rental expense (a) 90.0 87.5 86.6 88.0 88.0
--------- --------- --------- --------- ---------
Fixed charges $ 272.9 $ 291.9 $ 311.2 $ 357.7 $ 386.4
========= ========= ========= ========= =========
Ratio of earnings to fixed charges 3.63 2.81 2.28 1.51(b) 1.39
========= ========= ========= ========= =========
</TABLE>
(a) Based on a 10% discount factor on the estimated present value of future
operating lease payments.
(b) Safeway's ratio of earnings to fixed charges during 1993 was adversely
affected by a $54.9 million charge to operating and administrative
expense for severance payments made to retail employees in the Alberta,
Canada division as part of a voluntary employee buyout. Excluding this
charge, the ratio of earnings to fixed charges for 1993 would have been
1.66.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Safeway Inc. on Form S-3, which also constitutes Post-Effective Amendment No. 1
to Registration Statement No. 33-51552 of Safeway Inc. on Form S-3, of our
report dated February 18, 1997 on the consolidated financial statements of
Safeway Inc. as of December 28, 1996 and December 30, 1995 and for each of the
three years in the period ended December 28, 1996, and to the references to us
under the heading "Experts" in the Prospectuses, which are part of these
Registration Statements.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
August 1, 1997
<PAGE> 1
EXHIBIT 23.2
The Board of Directors
Safeway Inc.
We consent to the incorporation by reference in this registration statement on
Form S-3 filed on August 4, 1997 by Safeway Inc., which also constitutes
Post-Effective Amendment No. 1 to registration statement No. 33-51552 of Safeway
Inc., of our report dated January 17, 1997, except for the penultimate sentence
in paragraph five of note 7 which is as of March 27, 1997, with respect to the
consolidated balance sheets of The Vons Companies, Inc. and subsidiaries as of
December 29, 1996 and December 31, 1995, and the related consolidated statements
of earnings, stockholders' equity, and cash flows for the fifty-two week periods
ended December 29, 1996, December 31, 1995 and January 1, 1995, which report
appears in the Form 8-K/A of Safeway Inc. filed May 1, 1997. We also consent to
the reference to our firm under the heading "Experts" in the prospectuses.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
August 1, 1997
