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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SAFEWAY INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-3019135
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
ORGANIZATION)
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5918 STONERIDGE MALL ROAD
PLEASANTON, CALIFORNIA 94588
(925) 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
(925) 467-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
TRACY K. EDMONSON
SCOTT K. MILSTEN
LATHAM & WATKINS
505 MONTGOMERY STREET, SUITE 1900
SAN FRANCISCO, CALIFORNIA 94111-2562
(415) 391-0600
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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. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(2) FEE
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Debt Securities.......... $1,600,000,000 100% $1,600,000,000 $472,000
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(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 $1,600,000,000.
(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.
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SUBJECT TO COMPLETION, DATED OCTOBER 20, 1998
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SAFEWAY INC.
DEBT SECURITIES
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We may from time to time sell up to $1,600,000,000 aggregate initial
offering price of our debt securities. These debt securities may consist of
debentures, notes or other types of debt. We will provide specific terms of
these securities in supplements to this prospectus. You should read this
prospectus and any supplement carefully before you invest.
------------------
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have these organizations
determined that this prospectus is accurate or complete. Any representation to
the contrary is a criminal offense.
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, 1998
<PAGE> 3
WE HAVE NOT AUTHORIZED ANY DEALER, SALESMAN OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE ACCOMPANYING SUPPLEMENT TO
THIS PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT AS IF WE HAD AUTHORIZED IT. THIS PROSPECTUS AND THE
ACCOMPANYING SUPPLEMENT TO THIS PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH THEY RELATE, NOR DO THIS PROSPECTUS AND THE ACCOMPANYING
SUPPLEMENT TO THIS PROSPECTUS CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE
INFORMATION CONTAINED IN THIS PROSPECTUS AND THE SUPPLEMENT TO THIS PROSPECTUS
IS ACCURATE AS OF THE DATES ON THEIR COVERS. WHEN WE DELIVER THIS PROSPECTUS OR
A SUPPLEMENT OR MAKE A SALE PURSUANT TO THIS PROSPECTUS, WE ARE NOT IMPLYING
THAT THE INFORMATION IS CURRENT AS OF THE DATE OF THE DELIVERY OR SALE.
-------------------------
TABLE OF CONTENTS
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PAGE
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About this Prospectus....................................... 1
Where You Can Find More Information......................... 1
Disclosure Regarding Forward-Looking Statements............. 2
The Company................................................. 2
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 11
Legal Matters............................................... 12
Experts..................................................... 12
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "Commission") utilizing a "shelf"
registration process. Under this shelf registration process, we may sell any
combination of the debt securities described in this prospectus in one or more
offerings up to a total dollar amount of $1,600,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described under the next heading "Where You
Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Commission. You can inspect and copy these reports, proxy
statements and other information at the public reference facilities of the
Commission, in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7
World Trade Center, Suite 1300, New York, New York 10048; and Suite 1400,
Citicorp Center, 500 W. Madison Street, Chicago, Illinois 60661-2511. You can
also obtain copies of these materials from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Please call the Commission at 1-800-SEC-0330 for further information on
the public reference rooms. The Commission also maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission
(http://www.sec.gov). You can inspect reports and other information we file at
the office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
We have filed a registration statement and related exhibits with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
The registration statement contains additional information about us and the debt
securities. You may inspect the registration statement and exhibits without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and you may obtain copies from the Commission at prescribed rates.
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the Commission
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"):
- Annual Report on Form 10-K for the year ended January 3, 1998
(including information specifically incorporated by reference into our
Form 10-K from our 1997 Annual Report to Stockholders and Proxy
Statement for our 1998 Annual Meeting of Stockholders) and Form 10-K/A
filed March 10, 1998;
- Quarterly Reports on Form 10-Q for the quarters ended March 28, 1998,
June 6, 1998 and September 12, 1998;
- Current Reports on Form 8-K filed on July 15, 1998 and October 19,
1998; and
- all documents filed by us with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and before we stop offering the debt securities (other than
those portions of such documents described in paragraphs (i), (k), and
(l) of Item 402 of Regulation S-K promulgated by the Commission).
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You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Investor Relations
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, California 94588
(925) 467-3790
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with different information.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate 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," "continuing," "ongoing,"
"expects," "management believes," "the Company believes," "the Company intends,"
"we believe," "we intend" and similar words or phrases. The following factors
are among the principal factors that could cause actual results to differ
materially from the forward-looking statements: general business and economic
conditions in our operating regions, including the rate of inflation,
population, employment and job growth in our markets; pricing pressures and
other competitive factors, which could include pricing strategies, store
openings and remodels; results of our programs to reduce costs; the ability to
integrate any companies we acquire and achieve operating improvements at those
companies; relations with union bargaining units; issues arising from addressing
year 2000 information technology issues; opportunities or acquisitions that we
pursue; 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.
THE COMPANY
We are currently the second largest food and drug chain in North America
(based on sales), with 1,381 stores at September 12, 1998. Our U.S. retail
operations are located principally in northern California, southern California,
Oregon, Washington, Colorado, Arizona and the Mid-Atlantic region. Our Canadian
retail operations are located primarily in British Columbia, Alberta and
Manitoba/Saskatchewan. In support of our retail operations, we have an extensive
network of distribution, manufacturing and food processing facilities.
In April 1997, we completed a merger with The Vons Companies, Inc. ("Vons")
pursuant to which we issued 83.2 million shares of our common stock for all of
the shares of Vons common stock that we did not already own. We also hold a 49%
interest in Casa Ley, S.A. de C.V. which, as of September 12, 1998, operated 75
food and general merchandise stores in western Mexico.
Our principal executive offices are located at 5918 Stoneridge Mall Road,
Pleasanton, California 94588, and our telephone number is (925) 467-3000.
RECENT DEVELOPMENTS
Dominick's Acquisition. On October 13, 1998, we signed a definitive
agreement to acquire all of the outstanding shares of Dominick's Supermarkets,
Inc. ("Dominick's") for $49 cash per share, or a total of approximately $1.2
billion. In addition, we will assume approximately $646 million of Dominick's
debt.
Dominick's operates 112 stores in the greater Chicago metropolitan area and
had fiscal 1997 revenues of $2.6 billion. Dominick's also owns and operates two
primary distribution facilities and a dairy processing plant.
We commenced a cash tender offer for all of Dominick's outstanding shares
on October 19, 1998, and that tender offer is currently set to expire on
November 16, 1998. The Yucaipa Companies and Apollo
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Advisors, whose affiliates own approximately 41% of the outstanding shares, have
agreed to tender their shares in the tender offer and have granted us options to
buy their shares at $49 cash per share upon termination of the definitive
agreement in certain circumstances. Following the successful completion of the
tender offer, the definitive agreement provides that a wholly owned subsidiary
of Safeway will be merged with Dominick's, with Dominick's surviving as our
wholly owned subsidiary.
The acquisition of Dominick's is subject to a number of conditions,
including the valid tender of a majority of Dominick's outstanding shares in the
tender offer on a fully diluted basis, excluding shares issuable upon exercise
of a warrant held by The Yucaipa Companies, certain regulatory approvals and
other customary closing conditions. Although we cannot assure you that any or
all of these conditions will be satisfied, we believe we will complete the
transaction before the end of 1998.
Carr-Gottstein Acquisition. On August 6, 1998, we signed a definitive
agreement to acquire all of the outstanding shares of Carr-Gottstein Foods Co.
("Carr-Gottstein") for $12.50 per share, or a total of approximately $110
million, in a cash merger transaction. In addition, Carr-Gottstein has
approximately $220 million of debt.
Carr-Gottstein is the leading food and drug retailer in Alaska, with 49
stores primarily located in Anchorage, as well as Fairbanks, Juneau, Kenai and
other Alaska communities. Carr-Gottstein is Alaska's highest-volume alcoholic
beverage retailer through its chain of 17 wine and liquor stores operated under
the name Oaken Keg Spirit Shops. Carr-Gottstein also operates seven specialty
tobacco stores under the name The Great Alaska Tobacco Company. In addition,
Carr-Gottstein's vertically integrated organization includes freight
transportation operations and a full-line food warehouse and distribution
center.
The definitive agreement requires Carr-Gottstein to call a special meeting
of its stockholders where they will be asked to approve the merger of one of our
wholly owned subsidiaries with Carr-Gottstein, with Carr-Gottstein surviving as
our wholly owned subsidiary. An affiliate of Leonard Green & Associates owns
approximately 35% of the outstanding shares and has agreed to vote its shares in
favor of the transaction. Upon completion of the merger, each outstanding
Carr-Gottstein share will be converted into the right to receive $12.50 in cash.
The acquisition of Carr-Gottstein is subject to a number of conditions,
including the approval of a majority of Carr-Gottstein's outstanding shares,
certain regulatory approvals and other customary closing conditions. Safeway and
Carr-Gottstein have received a request for additional information from the
Federal Trade Commission, and we and Carr-Gottstein are in the process of
compiling information in response to this request. Although we cannot assure you
that any or all of these conditions will be satisfied, we believe we will
complete the transaction in early 1999.
Financing the Acquisitions. We intend to finance the acquisitions of
Dominick's and Carr-Gottstein with a combination of bank borrowings and
commercial paper proceeds. In addition to our existing credit agreement and
commercial paper program, we have recently secured the commitment of a group of
lenders to provide up to $500 million of borrowings under a 364-day credit
facility. We may also choose to make public offerings of debt securities.
USE OF PROCEEDS
Unless we indicate otherwise in the applicable prospectus supplement, we
anticipate that any net proceeds will be used for general corporate purposes,
which may include but are not limited to funding our obligations in the
acquisitions of Dominick's and Carr-Gottstein, including repaying or refinancing
bank borrowings or commercial paper proceeds, and for working capital, capital
expenditures and other acquisitions. The factors which we 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 our
interest coverage, debt-to-capital ratio, liquidity and earnings per share. We
will set forth in the prospectus supplement our intended use for the net
proceeds received from the sale of any series of debt securities. Pending the
application of the net proceeds, we expect to reduce indebtedness under our
commercial paper program or bank credit agreement.
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RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the periods indicated are as
follows:
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FISCAL YEAR
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1997 1996 1995 1994 1993
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Ratio of earnings to fixed charges (a)................. 4.10x 3.63x 2.81x 2.28x 1.51x
</TABLE>
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(a) For these ratios, "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.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of our debt
securities. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement whether the general terms
and provisions described in this prospectus apply to a particular series of debt
securities.
We may offer under this prospectus up to $1,600,000,000 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 $1,600,000,000. Unless otherwise
specified in a supplement to this prospectus, the debt securities will be our
direct, unsecured obligations and will rank equally with all of our other
unsecured and unsubordinated indebtedness.
The debt securities will be issued under an indenture between us and The
Bank of New York, as trustee. We have summarized select portions of the
indenture below. The summary is not complete. The form of the indenture has been
incorporated by reference as an exhibit to the registration statement and you
should read the indenture for provisions that may be important to you. In the
summary below, we have included references to the section numbers of the
indenture so that you can easily locate these provisions. Capitalized terms used
in the summary have the meaning specified in the indenture.
When we refer to "we," "our" and "us" in this section, we mean Safeway Inc.
excluding, unless the context otherwise requires or as otherwise expressly
stated, our subsidiaries.
GENERAL
The terms of each series of debt securities will be established by or
pursuant to a resolution of our Board of Directors and set forth or determined
in the manner provided in an officers' certificate or by a supplemental
indenture. (Section 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).
We can issue an unlimited amount of debt securities under the indenture
that may be in one or more series with the same or various maturities, at par,
at a premium, or at a discount. We will set forth in a prospectus supplement
(including any pricing supplement) relating to any series of debt securities
being offered, the aggregate principal amount and the following terms of the
debt securities:
- the title of the debt securities;
- the price or prices (expressed as a percentage of the aggregate
principal amount) at which we will sell the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the date or dates on which we will pay the principal on the debt
securities;
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- the rate or rates (which may be fixed or variable) per annum or the
method used to determine the rate or rates (including any commodity,
commodity index, stock exchange index or financial index) at which the
debt securities will bear interest, the date or dates from which
interest will accrue, the date or dates on which interest will
commence and be payable and any regular record date for the interest
payable on any interest payment date;
- the place or places where principal of, premium and interest on the
debt securities will be payable;
- the terms and conditions upon which we may redeem the debt securities;
- any obligation we have to redeem or purchase the debt securities
pursuant to any sinking fund or analogous provisions or at the option
of a holder of debt securities;
- the dates on which and the price or prices at which we will repurchase
debt securities at the option of the holders of debt securities and
other detailed terms and provisions of these repurchase obligations;
- the denominations in which the debt securities will be issued, if
other than denominations of $1,000 and any integral multiple thereof;
- whether the debt securities will be issued in the form of certificated
debt securities or global debt securities;
- the portion of principal amount of the debt securities payable upon
declaration of acceleration of the maturity date, if other than the
principal amount;
- the currency of denomination of the debt securities;
- the designation of the currency, currencies or currency units in which
payment of principal of, premium and interest on the debt securities
will be made;
- if payments of principal of, premium or interest on the debt
securities will be made in one or more currencies or currency units
other than that or those in which the debt securities are denominated,
the manner in which the exchange rate with respect to these payments
will be determined;
- the manner in which the amounts of payment of principal of, premium or
interest on the debt securities will be determined, if these 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;
- any provisions relating to any security provided for the debt
securities;
- any addition to or change in the Events of Default described in this
prospectus or in the indenture with respect to the debt securities and
any change in the acceleration provisions described in this prospectus
or in the indenture with respect to the debt securities;
- any addition to or change in the covenants described in this
prospectus or in the indenture with respect to the debt securities;
- any other terms of the debt securities, which may modify or delete any
provision of the indenture as it applies to that series; and
- any depositaries, interest rate calculation agents, exchange rate
calculation agents or other agents with respect to the debt
securities. (Section 2.2)
We may issue debt securities that provide for an amount less than their
stated principal amount to be due and payable upon declaration of acceleration
of their maturity pursuant to the terms of the indenture. We will provide you
with information on the federal income tax considerations and other special
considerations applicable to any of these debt securities in the applicable
prospectus supplement.
If we denominate the purchase price of any of the debt securities in a
foreign currency or currencies or a foreign currency unit or units, or if the
principal of and any premium and interest on any series of debt securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
we will provide you with information on the restrictions, elections, general tax
considerations, specific terms and other information
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with respect to that issue of debt securities and such foreign currency or
currencies or foreign currency unit or units in the applicable prospectus
supplement.
TRANSFER AND EXCHANGE
Each debt security will be represented by either one or more global
securities registered in the name of The Depository Trust Company, as Depositary
(the "Depositary"), or a nominee (we will refer to any debt security represented
by a global debt security as a "book-entry debt security"), or a certificate
issued in definitive registered form (we will refer to any debt security
represented by a certificated security as a "certificated debt security") as set
forth in the applicable prospectus supplement. Except as set forth under the
heading "Global Debt Securities and Book-Entry System" below, book-entry debt
securities will not be issuable in certificated form.
CERTIFICATED DEBT SECURITIES. You may transfer or exchange certificated
debt securities at any office we maintain for this purpose in accordance with
the terms of the indenture. No service charge will be made for any transfer or
exchange of certificated debt securities, but we may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
with a transfer or exchange.
You may effect the transfer of certificated debt securities and the right
to receive the principal of, premium and interest on certificated debt
securities only by surrendering the certificate representing those certificated
debt securities and either reissuance by us or the trustee of the certificate to
the new holder or the issuance by us 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 Depositary, and registered in the name of the Depositary or a nominee of the
Depositary.
The Depositary has indicated it intends to follow the following procedures
with respect to book-entry debt securities.
Ownership of beneficial interests in book-entry debt securities will be
limited to persons that have accounts with the Depositary for the related global
debt security ("participants") or persons that may hold interests through
participants. Upon the issuance of a global debt security, the Depositary 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 will be designated by any dealers,
underwriters or agents participating in the distribution of the 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 Depositary 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. These laws may impair the ability to own,
transfer or pledge beneficial interests in book-entry debt securities.
So long as the Depositary for a global debt security, or its nominee, is
the registered owner of that global debt security, the Depositary or its
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 the indenture. Except as described below, beneficial owners of
book-entry debt securities will not be entitled to have securities registered in
their names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing securities and will not be
considered the owners or holders of those securities under the indenture.
Accordingly, each person beneficially owning book-entry debt securities must
rely on the procedures of the Depositary 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.
We understand, however, that under existing industry practice, the
Depositary 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 we, the trustee and our respective agents will treat as
the holder of a debt security the
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persons specified in a written statement of the Depositary with respect to that
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. (Section 2.14.6)
We will make payments of principal of, and premium and interest on
book-entry debt securities to the Depositary or its nominee, as the case may be,
as the registered holder of the related global debt security. (Section 2.14.5)
Safeway, the trustee and any other agent of ours or agent of the trustee will
not have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a global
debt security or for maintaining, supervising or reviewing any records relating
to beneficial ownership interests.
We expect that the Depositary, upon receipt of any payment of principal of,
premium or interest 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 participant as shown on the
records of such Depositary. We also expect that payments by participants to
owners of beneficial interests in book-entry debt securities held through those
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 those participants.
We will issue certificated debt securities in exchange for each global debt
security if the Depositary is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by us within 90 days. In addition, we may at any time and
in our sole discretion determine not to have the book-entry debt securities of
any series represented by one or more global debt securities and, in that event,
will issue certificated debt securities in exchange for the global debt
securities of that 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 those 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 Depositary shall instruct the trustee. We expect that such instructions will
be based upon directions received by the Depositary from participants with
respect to ownership of book-entry debt securities relating to such global debt
security.
We have obtained the foregoing information concerning the Depositary and
the Depositary's book-entry system from sources we believe to be reliable, but
we take no responsibility for the accuracy of this information.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless we state otherwise in the applicable prospectus supplement, the debt
securities will not contain any provisions which may afford holders of the debt
securities protection in the event we have a change in control or in the event
of a highly leveraged transaction (whether or not such transaction results in a
change in control) which could adversely affect holders of debt securities.
COVENANTS
We will set forth in the applicable prospectus supplement any restrictive
covenants applicable to any issue of debt securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all of our properties and assets to, any person (a
"successor person") unless:
- we are the surviving corporation or the successor person (if other
than Safeway) is a corporation organized and validly existing under
the laws of any U.S. domestic jurisdiction and expressly assumes our
obligations on the debt securities and under the indenture;
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<PAGE> 11
- 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
- certain other conditions are met. (Section 5.1)
EVENTS OF DEFAULT
"Event of Default" means with respect to any series of debt securities, any
of the following:
- default in the payment of any interest upon any debt security of that
series when it becomes due and payable, and continuance of that
default for a period of 30 days (unless the entire amount of the
payment is deposited by us with the trustee or with a paying agent
prior to the expiration of the 30 day period);
- default in the payment of principal of or premium on any debt security
of that series when due and payable;
- default in the deposit of any sinking fund payment, when and as due in
respect of any debt security of that series;
- default in the performance or breach of any other covenant or warranty
by us 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 we receive written notice from
the trustee or we and the trustee receive written notice from the
holders of not less than a majority in principal amount of the
outstanding debt securities of that series as provided in the
indenture;
- certain events of bankruptcy, insolvency or reorganization; and
- any other Event of Default provided with respect to debt securities of
that series that is described in the applicable 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)
necessarily constitutes an Event of Default with respect to any other series of
debt securities. (Section 6.1) The occurrence of an Event of Default may
constitute an event of default under our 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 of our other indebtedness 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 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 us (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, that 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 will 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 the
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. (Section 6.2) We refer
you 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.
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<PAGE> 12
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. (Section 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 will 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. (Section 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:
- that holder has previously given to the trustee written notice of a
continuing Event of Default with respect to debt securities of that
series; and
- the holders of at least a majority in principal amount of the
outstanding debt securities of that series have made written request,
and offered reasonable indemnity, to the trustee to institute the
proceeding as trustee, and the trustee has not received from the
holders of a majority in principal amount of the outstanding debt
securities of that series a direction inconsistent with that request
and has failed to institute the proceeding within 60 days. (Section
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
and any interest on that debt security on or after the due dates expressed in
that debt security and to institute suit for the enforcement of payment.
(Section 6.8)
The indenture requires us, within 120 days after the end of our fiscal
year, to furnish to the trustee a statement as to compliance with the indenture.
(Section 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 that series) with respect to debt
securities of that series if it in good faith determines that withholding notice
is in the interest of the holders of those debt securities. (Section 7.5)
MODIFICATION AND WAIVER
We may modify and amend the indenture with the consent of the holders of at
least a majority in principal amount of the outstanding debt securities of each
series affected by the modifications or amendments. We may not make any
modification or amendment without the consent of the holders of each affected
debt security then outstanding if that amendment will:
- change the amount of debt securities whose holders must consent to an
amendment or waiver;
- reduce the rate of or extend the time for payment of interest
(including default interest) on any debt security;
- reduce the principal of or premium 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;
- reduce the principal amount of discount securities payable upon
acceleration of maturity;
- waive a default in the payment of the principal of, premium or
interest 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 that series and a waiver of the payment default that
resulted from such acceleration);
- make the principal of or premium or interest on any debt security
payable in currency other than that stated in the debt security;
- 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 and interest on those
9
<PAGE> 13
debt securities and to institute suit for the enforcement of any such
payment and to waivers or amendments; or
- waive a redemption payment with respect to any debt security. (Section
9.3)
Except for certain specified provisions, 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 our compliance
with provisions of the indenture. (Section 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 that series and its consequences, except a
default in the payment of the principal of, premium or any interest 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 the 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 the acceleration. (Section 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, we 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). We will be so discharged 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 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, premium
and interest on and any mandatory sinking fund payments in respect of the debt
securities of that series on the stated maturity of those payments in accordance
with the terms of the indenture and those debt securities.
This discharge may occur only if, among other things, we have delivered to
the trustee an opinion of counsel stating that we have 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 that series will not recognize income, gain or loss for United
States federal income tax purposes as a result of the 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 the deposit, defeasance and discharge had not occurred. (Section 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:
- we may omit to comply with the covenants described under the heading
"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 those covenants will not constitute a
Default or an Event of Default with respect to the debt securities of
that series ("covenant defeasance").
The conditions include:
- depositing with the trustee 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 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
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<PAGE> 14
and interest on and any mandatory sinking fund payments in respect of
the debt securities of that series on the stated maturity of those
payments in accordance with the terms of the indenture and those debt
securities; and
- delivering to the trustee an opinion of counsel to the effect that the
holders of the debt securities of that series will not recognize
income, gain or loss for United States federal income tax purposes as
a result of the 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
the deposit and related covenant defeasance had not occurred. (Section
8.4)
COVENANT DEFEASANCE AND EVENTS OF DEFAULT. In the event we exercise our
option to effect covenant defeasance with respect to any series of debt
securities and the debt securities of that 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 that
series at the time of their stated maturity but may not be sufficient to pay
amounts due on the debt securities of that series at the time of the
acceleration resulting from the Event of Default. However, we shall remain
liable for those payments.
"FOREIGN GOVERNMENT OBLIGATIONS" means, with respect to debt securities of
any series that are denominated in a currency other than U.S. Dollars:
- 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 which are not callable or redeemable at
the option of the issuer thereof; or
- obligations of a person controlled or supervised by or acting as an
agency or instrumentality of that government the timely payment of
which is unconditionally guaranteed as a full faith and credit
obligation by that government which 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. (Section 10.10)
PLAN OF DISTRIBUTION
We 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. We will name any underwriter or agent involved in
the offer and sale of debt securities in the applicable prospectus supplement.
We have reserved the right to sell or exchange debt securities directly to
investors on our own behalf in those jurisdictions where we are authorized to do
so.
We may distribute the debt securities from time to time in one or more
transactions:
- at a fixed price or prices, which may be changed;
- at market prices prevailing at the time of sale;
- at prices related to such prevailing market prices; or
- at negotiated prices.
We may also, from time to time, authorize dealers, acting as our agents, to
offer and sell debt securities upon the terms and conditions set forth in the
applicable prospectus supplement. In connection with the sale of debt
securities, we, or the purchasers of debt securities for whom the underwriters
may act as agents, may compensate underwriters in the form of underwriting
discounts or commissions. Underwriters may sell the debt securities to or
through dealers, and those dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they
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<PAGE> 15
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 the debt securities at varying
prices to be determined by the dealer.
We will describe in the applicable prospectus supplement any compensation
we pay to underwriters or agents in connection with the offering of debt
securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers. 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. We may enter into agreements to indemnify underwriters, dealers and
agents against certain civil liabilities, including liabilities under the
Securities Act, and to reimburse these persons for certain expenses.
To facilitate the offering of debt securities, certain persons
participating in the offering may engage in transactions that stabilize,
maintain, or otherwise affect the price of the debt securities. This may include
over-allotments or short sales of the debt securities, which involves the sale
by persons participating in the offering of more debt securities than we sold to
them. In these circumstances, these persons would cover such over-allotments or
short positions by making purchases in the open market or by exercising their
over-allotment option. In addition, these persons may stabilize or maintain the
price of the debt securities by bidding for or purchasing debt securities in the
open market or by imposing penalty bids, whereby selling concessions allowed to
dealers participating in the offering may be reclaimed if debt securities sold
by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of
the debt securities at a level above that which might otherwise prevail in the
open market. These transactions may be discontinued at any time.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for Safeway in the ordinary
course of our business.
LEGAL MATTERS
Latham & Watkins of San Francisco, California, will issue an opinion about
certain legal matters with respect to the debt securities for Safeway. 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 our common stock. These persons do not have the power to vote or dispose of
such shares of common stock. Any underwriters will be advised about the other
issues relating to any offering by their own legal counsel.
EXPERTS
Our consolidated financial statements as of January 3, 1998 and December
28, 1996 and for each of the three fiscal years in the period ended January 3,
1998, which are incorporated by reference herein from our Annual Report on Form
10-K for the year ended January 3, 1998, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is also incorporated
by reference herein, and have been so included in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
12
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us 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...................... $ 472,000
*Rating Agency Fees......................................... 200,000
*Legal Fees and Expenses.................................... 400,000
*Accounting Fees and Expenses............................... 150,000
*Printing Expenses.......................................... 150,000
*Blue Sky Fees.............................................. 30,000
*Trustee/Issuing & Paying Agent Fees and Expenses........... 25,000
*Miscellaneous.............................................. 23,000
----------
Total.................................................. $1,450,000
==========
</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 majority vote of a quorum of disinterested directors who
were not parties to such actions, (ii) if such quorum
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<PAGE> 17
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>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
*1 Form of Underwriting Agreement.
4.1 Indenture, dated as of September 10, 1997 between Safeway
Inc. and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.1 to Registrant's Form 8-K dated
September 10, 1997).
*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 Latham & Watkins (included in Exhibit 5).
24 Powers of Attorney (contained on Page II-5).
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).
ITEM 17. UNDERTAKINGS
(a) We hereby undertake:
(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% 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 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 Section 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) We hereby undertake that, for purposes of determining any liability under
the Securities Act of 1933, each filing of our annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of
II-3
<PAGE> 19
1934 (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
Safeway pursuant to the provisions described in this registration statement
above, or otherwise, we have been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of us in
the successful defense of any action, suit or proceeding) is asserted against us
by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(j) We hereby undertake 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 October 20, 1998.
SAFEWAY INC.
By /s/ MICHAEL C. ROSS
------------------------------------
Michael C. Ross
Senior Vice President, Secretary and
General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint David Weed 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
--------- ----- ----
<S> <C> <C>
/s/ STEVEN A. BURD Chairman, President and Chief October 20, 1998
- ------------------------------------------------ Executive Officer (Principal
Steven A. Burd Executive Officer)
/s/ DAVID WEED Executive Vice President, Chief October 20, 1998
- ------------------------------------------------ Financial Officer (Principal
David Weed Financial Officer and Principal
Accounting Officer)
/s/ PETER A. MAGOWAN Director October 20, 1998
- ------------------------------------------------
Peter A. Magowan
Director
- ------------------------------------------------
William Y. Tauscher
/s/ JAMES H. GREENE, JR. Director October 20, 1998
- ------------------------------------------------
James H. Greene, Jr.
</TABLE>
II-5
<PAGE> 21
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ PAUL HAZEN Director October 20, 1998
- ------------------------------------------------
Paul Hazen
/s/ HENRY R. KRAVIS Director October 20, 1998
- ------------------------------------------------
Henry R. Kravis
/s/ ROBERT I. MACDONNELL Director October 20, 1998
- ------------------------------------------------
Robert I. MacDonnell
/s/ GEORGE R. ROBERTS Director October 20, 1998
- ------------------------------------------------
George R. Roberts
</TABLE>
II-6
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
*1 Form of Underwriting Agreement.
4.1 Indenture, dated as of September 10, 1997 between Safeway
Inc. and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.1 to Registrant's Form 8-K dated
September 10, 1997).
*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 Latham & Watkins (included in Exhibit 5).
24 Powers of Attorney (contained on Page II-5).
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).
<PAGE> 1
Exhibit 5
[LATHAM & WATKINS LETTERHEAD]
October 20, 1988
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, CA 94588
Re: $1,600,000,000 Aggregate Offering Price of Debt Securities of
Safeway Inc.
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the
"Registration Statement") filed on October 20, 1998 with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), 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 sale by Safeway Inc., a Delaware corporation
(the "Company"), of up to $1,600,000,000 aggregate offering price of debt
securities (the "Debt Securities"). The Debt Securities will be issued pursuant
to an Indenture dated as of September 10, 1997 between the Company and The Bank
of New York, as Trustee (the "Trustee"), and one or more supplements thereto
(the "Indenture").
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 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.
<PAGE> 2
LATHAM & WATKINS
Safeway Inc.
October 20, 1998
Page 2
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.
As to facts material to the opinion, statements and assumptions expressed
herein, we have, with your consent, relied upon oral or written statements and
representations of officers and directors and other representatives of the
Company and others. 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 Indenture
(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 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
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
<PAGE> 3
LATHAM & WATKINS
Safeway Inc.
October 20, 1998
Page 3
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 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 the 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 Indenture; (vi) the Indenture has been duly authorized,
executed and delivered by the 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 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 Indenture.
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
EXHIBIT 12
SAFEWAY INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
Fiscal Year
-------------------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Income before income taxes and
extraordinary loss $ 1,076.3 $ 767.6 $ 556.5 $ 424.1 $ 216.3
Add interest expense 241.2 178.5 199.8 221.7 265.5
Add interest on rental expense (a) 88.5 90.0 87.5 86.6 88.0
Less equity in earnings of unconsolidated
affiliates (34.9) (50.0) (26.9) (27.3) (33.5)
Add minority interest in subsidiary 4.4 3.4 3.9 3.0 3.5
--------- --------- --------- --------- ---------
Earnings $ 1,375.5 $ 989.5 $ 820.8 $ 708.1 $ 539.8
========= ========= ========= ========= =========
Interest expense $ 241.2 $ 178.5 $ 199.8 $ 221.7 $ 265.5
Add capitalized interest 5.7 4.4 4.6 2.9 4.2
Add interest on rental expense (a) 88.5 90.0 87.5 86.6 88.0
--------- --------- --------- --------- ---------
Fixed charges $ 335.4 $ 272.9 $ 291.9 $ 311.2 $ 357.7
========= ========= ========= ========= =========
Ratio of earnings to fixed charges 4.10 3.63 2.81 2.28 1.51
========= ========= ========= ========= =========
</TABLE>
(a) Based on a 10% discount factor on the estimated present value of future
operating lease payments.
<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 of our report dated February 27, 1998, incorporated by
reference in the Annual Report on Form 10-K of Safeway Inc. for the year ended
January 3, 1998 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
San Francisco, California
October 16, 1998
<PAGE> 1
Exhibit 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------
SAFEWAY INC.
(Exact name of obligor as specified in its charter)
Delaware 94-3019135
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
5918 Stoneridge Mall Road
Pleasanton, California 94588
(Address of principal executive offices) (Zip code)
---------------------
Debt Securities
(Title of the indenture securities)
===============================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with
Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 16th day of October, 1998.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
------------------------------------
Name: ROBERT A. MASSIMILLO
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................36,538,242
LESS: Allowance for loan and
lease losses ..............631,725
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ......10,011,422
Interest-bearing .........14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing .........707,820
Interest-bearing .........14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... ( 36,129)
-----------
Total equity capital ................. 5,198,722
-----------
Total liabilities and equity
capital ............................ $55,830,236
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Alan R. Griffith Directors
J. Carter Bacot
- --------------------------------------------------------------------------------
</TABLE>
