<PAGE> 1
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.
As filed with the Securities and Exchange Commission on November 9, 1998
REGISTRATION NO. 333-_______
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> <C>
DELAWARE SAFEWAY INC. 94-3019135
(State or Other Jurisdiction 5918 STONERIDGE MALL ROAD (I.R.S. Employer
of Incorporation or Organization) PLEASANTON, CALIFORNIA 94588 Identification Number)
(925) 467-3000
</TABLE>
(Address, including ZIP code, and
telephone number, including area code,
of registrant's principal executive offices)
MICHAEL C. ROSS, ESQ.
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:
SCOTT R. HABER, ESQ.
TRACY K. EDMONSON, ESQ.
LATHAM & WATKINS
505 Montgomery Street, Suite 1900
San Francisco, California 94111
(415) 391-0600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective.
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 of 1933, please check the
following box and list the Securities Act of 1933 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 of 1933, 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>
<CAPTION>
========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($0.01 par value)(2) 20,000,000 $47.28125 $945,625,000 $278,960.00
- ------------------------------------------------------------------------------------------------------------------------
Warrants to Purchase Common Stock (3) 2,985,310 $46.78125 $139,656,533.44 N/A (3)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For common stock and warrants, estimated solely for the purpose of
computing the amount of registration fee, based on the average of the high
and low prices for the common stock as reported on the New York Stock
Exchange on November 2, 1998, in accordance with Rule 457(c) promulgated
under the Securities Act of 1933.
(2) Includes 2,985,310 shares issuable upon exercise of warrants.
(3) Registration Fee of $278,960 includes the fee payable for the
registration of 2,985,310 shares of common stock issuable upon exercise of
warrants. This Registration Statement also registers the issuance and
sale of 2,985,310 shares of common stock upon the exercise of such
warrants.
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
PROSPECTUS
SUBJECT TO COMPLETION, DATED NOVEMBER 9, 1998
SAFEWAY INC.
20,000,000 SHARES OF COMMON STOCK
($0.01 PAR VALUE PER SHARE)
This prospectus relates to the offer and sale of up to 20,000,000
shares of common stock, par value $0.01 per share, of Safeway Inc., a Delaware
corporation. This prospectus also relates to the offer and sale of up to
2,985,310 warrants to purchase common stock and the issuance and sale of
2,985,310 shares of common stock upon the exercise of the warrants. All of the
common stock and warrants being registered may be offered and sold from time to
time by certain of our stockholders. See "The Selling Stockholders" and "Plan of
Distribution." Such shares of common stock include 17,014,690 presently
outstanding shares and 2,985,310 shares to be issued upon the exercise of
outstanding warrants. We will not receive any proceeds from the sale of the
common stock or warrants by the selling stockholders other than $1,492,655
representing the exercise price of the warrants.
Our common stock is traded on the New York Stock Exchange under the
symbol "SWY." On November 6, 1998, the last reported sale price for our common
stock was $50.00 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 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 ANY ACCOMPANYING SUPPLEMENT TO
THIS PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT AS IF WE HAD AUTHORIZED IT. THIS PROSPECTUS AND ANY
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 ANY 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 ANY 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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information ............... 2
Disclosure Regarding Forward-Looking Statements ... 4
The Company ....................................... 5
The Selling Stockholders .......................... 7
Description of Capital Stock and Warrants ......... 9
Use of Proceeds ................................... 10
Plan of Distribution .............................. 10
Legal Matters ..................................... 12
Experts ........................................... 12
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (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 our
common stock. 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
2
<PAGE> 4
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, October 19,
1998 and November 9, 1998;
- Description of our common stock contained in our registration
statement on Form 8-A filed with the Commission on February 20,
1990, including the amendment on Form 8 dated March 26, 1990; 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 the offering the common stock thereby
is stopped (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).
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.
3
<PAGE> 5
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/deflation, 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;
- conditions to the acquisitions of Dominick's Supermarkets,
Inc. and Carr-Gottstein Foods Co., including regulatory approval, which could
affect the timing of or ability to complete these acquisitions; 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.
4
<PAGE> 6
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. There have
been several previously announced mergers or acquisitions in the food retailing
business, including acquisitions we are making and those of our competitors.
After the completion of these transactions, we expect to be the third largest
food and drug chain in North America. 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 principally 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. At August 8, 1998, Dominick's had outstanding approximately $646
million of debt, most of which we will repay in connection with that
transaction.
Dominick's operates 111 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. Affiliates of The Yucaipa Companies and Apollo Advisors, L.P.
that 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 in the tender offer of a majority of Dominick's
outstanding shares (determined on a fully diluted basis, excluding shares
issuable upon exercise of a warrant held by The Yucaipa Companies), the receipt
of certain regulatory approvals and other customary closing conditions. Although
we cannot assure you that all of these conditions will be satisfied or
waived, we believe we will complete the transaction before the end of 1998.
5
<PAGE> 7
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, at June 28, 1998,
Carr-Gottstein had approximately $224 million of debt, substantially all of
which we will repay in connection with that transaction.
Carr-Gottstein is the leading food and drug retailer in Alaska, with 49
stores (including liquor and tobacco 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,
receipt of 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. In late October 1998, an
Alaska consumer group and five individuals filed a purported class-action
lawsuit in Alaska state court seeking an injunction to prevent our merger with
Carr-Gottstein. We and Carr-Gottstein believe the lawsuit is without merit and
intend to defend the lawsuit vigorously. Although we cannot assure you that all
of these conditions to the merger will be satisfied or waived, or that this
lawsuit will be resolved to our satisfaction, 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. On November 9, 1998, we closed the public offering of
$1.4 billion in aggregate principal amount of debt securities. We used most of
the proceeds of that offering to repay outstanding indebtedness under our
commercial paper program and our bank credit agreement.
After we complete these acquisitions, we will operate more than 1,500
stores in 19 states, the District of Columbia and five Canadian provinces. We
intend to continue to focus on three key priorities, (1) controlling costs, (2)
increasing sales and (3) improving capital management, to enhance the
performance of our operations, including the operations of Dominick's and
Carr-Gottstein.
Our sales and net income for 1997 were $22.5 billion and $557.4
million, respectively. Dominick's had 1997 revenues of $2.6 billion, and
Carr-Gottstein's 1997 revenues were $589 million.
Other Acquisitions. Our management believes that the supermarket
industry in North America is fragmented and that there may be opportunities to
make other acquisitions that would enhance our long-term growth. Our criteria
for considering acquisition targets include, but are not limited to, strong
market share and the potential for improving operating cash flow margin. These
criteria are subject to review and modification from time to time. We cannot
assure you that we will complete any such acquisition or that, if completed, the
business acquired will make any contribution to our long-term growth.
6
<PAGE> 8
THE SELLING STOCKHOLDERS
All of the shares of common stock are being sold by the selling
stockholders of the Company identified in the following table (including the
footnotes). The table (including the footnotes) also sets forth information
regarding the beneficial ownership of our outstanding common stock as of
October 13, 1998 for each of the selling stockholders. Except as indicated by
the notes to the following table, the holders listed below have sole voting
power and investment power over the shares beneficially held by them. The
address of SSI Associates, L.P., KKR Partners II, L.P., KKR Associates, L.P.,
SSI Equity Associates, L.P. and SSI Partners, L.P. is 9 West 57th Street, New
York, New York 10019.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES(1) PERCENTAGE (3) SHARES OFFERED
--------- -------------- --------------
<S> <C> <C> <C>
KKR Associates, L.P.(1) 81,352,329 16.7 17,014,690
SSI Equity Associates, L.P.(2) 18,376,851 3.6 2,985,310
</TABLE>
(1) The shares are owned by KKR Associates, L.P. ("KKR Associates") and two
limited partnerships, SSI Associates, L.P. ("SSI Associates") and KKR
Partners II, L.P. (the "Common Stock Partnerships"). KKR Associates is
the general partner of each of the Common Stock Partnerships. KKR
Associates, in its capacity as general partner, may be deemed to
beneficially own shares that are owned of record by the Common Stock
Partnerships. James H. Greene, Jr., Henry R. Kravis, Robert I.
MacDonnell, George R. Roberts, Edward A. Gilhuly, Perry Golkin, Michael
W. Michelson, Paul E. Raether, Clifton S. Robbins, Scott Stuart and
Michael T. Tokarz are the general partners of KKR Associates. In their
capacity as general partners, they may be deemed to share beneficial
ownership of any shares beneficially owned by KKR Associates, but
disclaim any such beneficial ownership. Messrs. Greene, Kravis,
MacDonnell, and Roberts are members of Safeway's Board of Directors.
The shares offered include 16,068,032 shares being offered by SSI
Associates and 946,658 shares being offered by KKR Partners II, L.P.
(2) SSI Equity Associates, L.P. ("SSI Equity Associates") is a Delaware
limited partnership, the sole general partner of which is SSI Partners,
L.P., a Delaware limited partnership ("SSI Partners"). SSI Partners in
its capacity as general partner, may be deemed to own any shares
beneficially owned by SSI Equity Associates. Messrs. Kravis,
MacDonnell, Raether and Roberts, as general partners of SSI Partners,
may be deemed to share beneficial ownership of any shares beneficially
owned by SSI Partners, but disclaim any such beneficial ownership.
Messrs. Kravis, MacDonnell and Roberts are members of Safeway's Board
of Directors. All 18,376,851 shares shown as beneficially owned by SSI
Equity Associates represent shares of common stock issuable upon
exercise of warrants to purchase common stock. In connection with the
offering of shares pursuant to this prospectus, SSI Equity Associates
may sell warrants to purchase 2,985,310 shares of common stock.
Assuming that SSI Equity Associates sells all 2,985,310 shares, SSI
Equity Associates also will transfer to Safeway for cancellation
warrants to purchase 5,421,881 shares of common stock, such warrants
representing the pro rata portion of the warrants that are attributable
to the limited partnership interests held by Safeway. Assuming that SSI
Equity Associates sells all 2,985,310 shares listed above, SSI Equity
7
<PAGE> 9
Associates will hold warrants to purchase 9,969,660 shares of
common stock (of which 6,429,533 shares will be attributable to limited
partnership interests held by Safeway).
(3) Based on 486.2 million shares outstanding at October 13, 1998. For
purposes of calculating the percentage of shares owned by SSI Equity
Associates, we have assumed that SSI Equity Associates has exercised
all of the warrants.
Assuming that the Common Stock Partnerships sell all 17,014,690 shares
listed above, the Common Stock Partnerships and KKR Associates will own
64,337,639 shares of common stock, which will represent approximately
13.2% of our outstanding common stock (based on the shares outstanding
at October 13, 1998). The Common Stock Partnerships, KKR Associates,
and their general partners will continue to be able to exercise
influence over Safeway through their representatives, consisting of
four of eight members of the Board of Directors, and to the extent of
their voting power with respect to the election of directors and
actions requiring stockholder approval.
SSI Associates made its investment in Safeway in 1986. The limited
partnership agreement pursuant to which SSI Associates was organized
will, by its terms, expire on December 31, 1998 unless amended by all of the
limited partners to extend the term beyond such date. There can be no assurance
that KKR Associates, the general partner of SSI Associates, will seek such
amendments, or, if sought, that such amendments will be approved by the limited
partners. If such partnership agreement expires, the limited partnership will
dissolve. In the event of the dissolution and winding up of SSI Associates, KKR
Associates will have sole discretion regarding the timing (which may be one or
more years after the expiration of the partnership agreement) and manner of the
disposition of any of our common stock held by such partnership, including
public or private sales of such common stock, the distribution of such common
stock to the limited partners of SSI Associates, or a combination of the
foregoing. KKR Associates will own directly approximately 48 million of the 64.3
million shares referenced above, following the offerings. Such partnership is
not subject to the termination provisions applicable to SSI Associates.
Safeway, the Common Stock Partnerships, SSI Equity Associates and
certain other parties entered into an agreement dated as of November 25, 1986
(the "Registration Agreement"), a copy of which is incorporated by reference as
an exhibit to the registration statement of which this prospectus is a part,
pursuant to which we agreed to register the offer and sale of shares of common
stock held by such parties, including the shares of common stock offered hereby,
under the Securities Act, and such parties and we agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act in
connection with the sale of the shares pursuant to the Registration Agreement.
Pursuant to the Registration Agreement, the Common Stock Partnerships and SSI
Equity Associates are required to pay the underwriting discounts and commissions
and transfer taxes, if any, associated with the offerings, and we are required
to pay substantially all expenses directly associated with the offering of
shares hereby, including, without limitation, the cost of registering the shares
offered hereby, including the applicable registration and filing fees, printing
expenses, certain underwriting expenses and applicable expenses for legal
counsel and accountants incurred by us or the Common Stock Partnerships and SSI
Equity Associates.
No predictions can be made as to the effect, if any, that future sales
of shares, or the availability of shares for future sales, will have on the
market price of the common stock prevailing from time to time. Sales of
substantial amounts of common stock (including shares issued upon the exercise
of stock options or warrants), or the perception that such sales could occur,
could adversely affect prevailing market prices for the common stock.
8
<PAGE> 10
DESCRIPTION OF CAPITAL STOCK AND WARRANTS
GENERAL
Pursuant to our Restated Certificate of Incorporation, as amended (the
"Restated Certificate"), our authorized capital stock consists of 1,500,000,000
shares of common stock, par value $0.01 per share, and 25,000,000 shares of
preferred stock, par value $0.01 per share. At October 13, 1998, Safeway had
outstanding 486.2 million shares of common stock and no outstanding shares of
preferred stock. All shares of common stock are fully paid and nonassessable.
COMMON STOCK
Each holder of common stock is entitled to one vote for each share
owned of record on all matters voted upon by stockholders, and a majority vote
is required for all action to be taken by stockholders. In the event of a
liquidation, dissolution or winding-up of Safeway, the holders of common stock
are entitled to share equally and ratably in our assets, if any, remaining after
the payment of all of our debts and liabilities and the liquidation preference
of any outstanding preferred stock. The common stock has no preemptive rights,
no cumulative voting rights and no redemption, sinking fund or conversion
provisions.
The Restated Certificate provides for a classified board of directors
consisting of three classes as nearly equal in size as practicable. Each class
will hold office until the third annual meeting for election of directors
following the election of such class.
Our By-laws provide for additional notice requirements for stockholder
nominations and proposals at our annual or special meetings. At annual meetings,
stockholders may submit nominations for directors or other proposals only upon
written notice to us at least 50 days prior to the annual meeting.
The common stock is listed on the New York Stock Exchange. The transfer
agent and registrar for the common stock is First Chicago Trust Company of New
York.
PREFERRED STOCK
Our board of directors is authorized without further stockholder
action, to divide any or all shares of the authorized preferred stock into
series and to fix and determine the designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereon, of any series so established, including voting powers,
dividend rights, liquidation preferences, redemption rights and conversion
privileges. As of the date of this prospectus, the board of directors has not
authorized any series of preferred stock and there are no plans, agreements or
understandings for the issuance of any shares of preferred stock.
DIVIDENDS
Holders of common stock are entitled to receive dividends if, as and
when declared by the board of directors out of funds legally available therefor,
subject to the dividend and liquidation rights of any preferred stock that may
be issued and subject to certain limitations in our bank credit agreement.
WARRANTS
Each holder of a warrant is entitled to purchase one share of common
stock at an exercise price of $.50 per share. The warrants were issued in 1986
to SSI Equity Associates. There are currently outstanding warrants to purchase
an aggregate of 18,376,851 shares of common stock, all of which are held by SSI
Equity Associates. The warrants are exercisable until they expire on November
15, 2001. The exercise price of the warrants is subject to adjustment in the
event we effect a stock dividend, subdivision of stock and certain other
distributions described in the warrant. A copy of the warrant is filed as an
exhibit to the registration statement of which this prospectus is a part and is
incorporated herein by reference. The determination of when or whether to
exercise the warrants is within the sole discretion of the general partner of
SSI Equity Associates, except under certain limited circumstances following the
sale of common stock by the Common Stock Partnerships.
9
<PAGE> 11
USE OF PROCEEDS
The common stock is being sold by the selling stockholders for their
own accounts, and we will not receive any of the proceeds from the sale of the
selling stockholders' common stock or warrants other than $1,716,553
representing the exercise price of the warrants.
PLAN OF DISTRIBUTION
The selling stockholders or their respective pledgees, donees,
transferees or other successors in interest may offer shares of our common stock
from time to time pursuant to this registration statement, depending on market
conditions and other factors, in one or more transactions on the New York Stock
Exchange or other national securities exchanges on which our common stock is
traded, in the over the counter market or otherwise, at market prices prevailing
at the time of sale, at negotiated prices or at fixed prices. SSI Equity
Associates also may sell such shares through the sale and exercise of warrants.
Sales of warrants may be made based on the market prices of the common stock
prevailing at the time of sale (less the exercise price of 50 cents per share),
at negotiated prices or at fixed prices. Common stock and warrants may be
offered in any manner permitted by law, including through underwriters, licensed
brokers, dealers or agents, and directly to one or more purchasers.
Sales of common stock may involve:
o sales to underwriters who will acquire shares of common stock for
their own account and resell them in one or more transactions at fixed prices or
at varying prices determined at time of sale;
o block transactions in which the broker or dealer so engaged may sell
shares as agent or principal;
o purchases by a broker or dealer as principal who resells the shares
for its account;
o an exchange distribution in accordance with the rules of any such
exchange;
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
o privately negotiated sales, which may include sales directly to
institutions.
Sales of warrants may involve
o sales to underwriters who will acquire warrants for their own
account, exercise the warrants and resell the shares of common stock issued
upon exercise in one or more transactions at fixed prices or at varying prices
determined at time of sale;
o block transactions in which the broker or dealer so engaged may
acquire the warrants, exercise the warrants and sell shares of common stock
issued upon exercise as agent or principal;
o purchases by a broker or dealer as principal who exercises the
warrants and sells the shares of common stock issued upon exercise for its
account;
o an exchange distribution in accordance with the rules of any such
exchange;
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
o privately negotiated sales, which may include sales directly to
institutions.
Brokers and dealers will receive customary compensation in the form of
underwriting discounts, concessions or commissions from the selling stockholders
and/or purchasers of our common stock in respect of transactions described above
(other than privately negotiated sales). The selling stockholders and any broker
or dealer that participates in the distribution of common stock and warrants may
be deemed to be underwriters and any commissions received by them and any profit
on the resale of our common stock positioned by a broker or dealer may be deemed
to be underwriting discounts and commissions under the Securities Act. In the
event the selling stockholders engage an underwriter in connection with the sale
of our common stock or warrants, to the extent required, a prospectus supplement
will be distributed, which will set forth the number of shares of common stock
and warrants being offered and the terms of the offering, including the names of
the underwriters, any discounts, commissions and other items constituting
compensation to underwriters, dealers or agents, the public offering price and
any discounts, commissions or concessions allowed or reallowed or paid by
underwriters to dealers.
In addition, the selling stockholders may, from time to time, sell
shares in transactions under Rule 144 promulgated under the Securities Act.
Certain of the underwriters, brokers, dealers or agents and their
associates may engage in transactions with and perform other services for
Safeway in the ordinary course of their business.
10
<PAGE> 12
LEGAL MATTERS
Latham & Watkins of San Francisco, California, will issue an opinion
about certain legal matters with respect to the common stock and warrants of
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.
11
<PAGE> 13
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 Act Registration Fee ................. $ 278,960
* Legal Fees and Expenses (other than Blue Sky) ... 400,000
* Accounting Fees and Expenses .................... 150,000
* Printing Expenses ............................... 150,000
* Blue Sky Fees and Expenses ...................... 30,000
* Miscellaneous ................................... 16,040
----------
Total ........................................... $1,025,000
==========
</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.
II-1
<PAGE> 14
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 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> 15
ITEM 16. EXHIBITS.
The following documents are filed as part of this registration
statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company and
Certificate of Amendment of Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 15, 1996)
4.2 Form of By-laws of the Company as amended (incorporated by
reference to Exhibit 3.2 to Registration Statement No.
33-33388), and Amendment to the Company's By-laws effective
March 8, 1993 (incorporated by reference to Exhibit 3.2 to the
Company's Form 10-K for the Fiscal year ended January 2, 1993)
4.3 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4(i).1 to Registration Statement No. 33-33388)
4.4 Registration Rights Agreement dated as of November 25, 1986 by
and between Safeway Stores Holdings Corporation (predecessor to
the Company) and certain limited partnerships (incorporated by
reference to Exhibit 4(i).4 to Registration Statement No.
33-33388)
4.5 Common Stock Purchase Warrants to purchase shares of Safeway
Inc. common stock (incorporated by reference to Exhibit 4(i).13
to Annual Report on Form 10-K for the year ended January 3,
1998)
5.1 Opinion of Latham & Watkins
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Latham & Watkins (included in Exhibit 5.1)
24 Powers of Attorney (contained on page II-5)
</TABLE>
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 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
II-3
<PAGE> 16
(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 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.
(c) 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 our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE> 17
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 November 9, 1998.
SAFEWAY INC.
By: /s/ David F. Bond
----------------------------
David F. Bond
Senior Vice President -
Finance and Control
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 November 9, 1998
- ------------------------ Executive Officer (Principal
Steven A. Burd Executive Officer)
/s/ DAVID WEED Executive Vice President, Chief November 9, 1998
- ------------------------ Financial Officer (Principal
David Weed Financial Officer and Principal
Accounting Officer)
/s/ PETER A. MAGOWAN Director November 9, 1998
- ------------------------
Peter A. Magowan
/s/ WILLIAM Y. TAUSCHER Director November 9, 1998
- ------------------------
William Y. Tauscher
</TABLE>
II-5
<PAGE> 18
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAMES H. GREENE, JR. Director November 9, 1998
- ------------------------
James H. Greene, Jr.
/s/ PAUL HAZEN Director November 9, 1998
- ------------------------
Paul Hazen
/s/ HENRY R. KRAVIS Director November 9, 1998
- ------------------------
Henry R. Kravis
/s/ ROBERT I. MACDONNELL Director November 9, 1998
- ------------------------
Robert I. MacDonnell
/s/ GEORGE R. ROBERTS Director November 9, 1998
- ------------------------
George R. Roberts
</TABLE>
II-6
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company and
Certificate of Amendment of Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 15, 1996)
4.2 Form of By-laws of the Company as amended (incorporated by
reference to Exhibit 3.2 to Registration Statement No.
33-33388), and Amendment to the Company's By-laws effective
March 8, 1993 (incorporated by reference to Exhibit 3.2 to the
Company's Form 10-K for the Fiscal year ended January 2, 1993)
4.3 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4(i).1 to Registration Statement No. 33-33388)
4.4 Registration Rights Agreement dated as of November 25, 1986 by
and between Safeway Stores Holdings Corporation (predecessor to
the Company) and certain limited partnerships (incorporated by
reference to Exhibit 4(i).4 to Registration Statement No.
33-33388)
4.5 Common Stock Purchase Warrants to purchase shares of Safeway
Inc. common stock (incorporated by reference to Exhibit
4(i).13 to Annual Report on Form 10-K for the year ended
January 3, 1998)
5.1 Opinion of Latham & Watkins
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Latham & Watkins (included in Exhibit 5.1)
24 Powers of Attorney (contained on page II-5)
</TABLE>
II-7
<PAGE> 1
EXHIBIT 5.1
[LATHAM & WATKINS letterhead]
November 9, 1998
FILE NO. 014029-0276
Safeway Inc.
5918 Stoneridge Mall Rd.
Pleasanton, CA 94588
Re: Safeway Inc. - Registration Statement on Form S-3
Common Stock, $0.01 par value
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the
"Registration Statement") filed on November 9, 1998 with the Securities
and Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), with respect to the registration of up to
20,000,000 shares of the Company's common stock, par value $0.01 per
share (the "Common Stock"), and any shares that may be registered
pursuant to any subsequent registration statement the Company may
hereafter file with the Commission in connection with such transaction
pursuant to Rule 462(b) under the Act (collectively, the "Shares"), you
have requested our opinion with respect to the matters set forth below.
Of the Shares being registered, (i) 17,014,690 shares of
Common Stock are presently issued and outstanding shares of Common
Stock (the "Outstanding Shares") and (ii) 2,985,310 shares of Common
Stock (the "Warrant Shares") are issuable upon the exercise of certain
outstanding warrants issued by the Company on November 25, 1986, as
amended (the "Warrants").
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, issuance and sale of the Shares. For the purposes of
this opinion, we have assumed that such proceedings will be timely and
properly completed, in accordance with all requirements of applicable
federal and Delaware laws, in the manner presently proposed.
<PAGE> 2
LATHAM & WATKINS
Safeway Inc.
November 9, 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 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 are opining herein as to the effect on the subject
transaction only of 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, it is our opinion that:
1. The Outstanding Shares have been duly authorized and
validly issued and are fully paid and nonassessable.
2. The Warrant Shares have been duly authorized, and, upon
issuance, delivery and payment therefor in the manner contemplated by
the Warrants, will be validly issued, fully paid and nonassessable.
3. The Warrants constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject to (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, including
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of 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; and
(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.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under
the heading "Legal Matters" and to the incorporation by reference of
this opinion and consent into a registration statement filed with the
Commission pursuant to Rule 462(b) under the Act relating to the
Shares.
Very truly yours,
/s/ Latham & Watkins
<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
November 6, 1998
