<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1999
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
SAFEWAY INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5918 Stoneridge Mall Road 94-3019135
(State or other jurisdiction Pleasanton, California 94588 (I.R.S. Employer
of incorporation or (Address of principal executive Identification Number)
organization) offices) (Zip)
</TABLE>
--------------------
SAFEWAY INC.
1999 AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
(Full title of the plan)
--------------------
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 and telephone number, including area code, of agent for service)
Copies to:
Scott R. Haber, Esq.
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111
(415) 391-0600
--------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
=================================================================================================
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered Registered Per Share (1) Price (1) Fee(1)
=================================================================================================
<S> <C> <C> <C> <C>
Common Stock, 5,600,000 N/A $272,472,429.89 $75,747.34
$0.01 par value
=================================================================================================
</TABLE>
(1) Estimated for the purpose of calculating the registration fee (i)
pursuant to Rule 457(h) on the basis of the aggregate price
($148,291,650.06) at which outstanding options to purchase an aggregate
of 2,739,107 shares may be exercised, and (ii) pursuant to Rule 457(c)
for the remaining 2,860,893 shares registered hereunder (the average
($43.4063) of the high ($44.6875) and low ($42.125) prices for the
Company's Common Stock quoted on the New York Stock Exchange on
September 13, 1999).
1
<PAGE> 2
EXPLANATORY NOTE
In this registration statement, Safeway Inc. is sometimes
referred to as "we," "us" or "our."
We have adopted the 1999 Amended and Restated Equity
Participation Plan of Safeway Inc. (the "1999 Equity Plan") which amended and
restated our 1994 Amended and Restated Stock Option and Incentive Plan for Key
Employees of Safeway Inc., Stock Option Plan for Consultants of Safeway Inc. and
Outside Director Equity Purchase Plan, each as amended from time to time
(collectively, the "Prior Plans"). We previously filed the following
registration statements with respect to the Prior Plans:
o Form S-8 filed with the Commission on September 11, 1990
(Commission file number 33-36753) with respect to the
Outside Director Equity Purchase Plan.
o Forms S-3 and S-8 filed with the Commission on August 12,
1991 (Commission file number 33-42232) with respect to the
1994 Amended and Restated Stock Option and Incentive Plan
for Key Employees of Safeway Inc.
o Form S-8 filed with the Commission on June 26, 1992
(Commission file number 33-48884) with respect to the 1994
Amended and Restated Stock Option and Incentive Plan for Key
Employees of Safeway Inc.
o Form S-8 filed with the Commission on November 22, 1993
(Commission file number 33-51119) with respect to the Stock
Option Plan for Consultants of Safeway Inc.
o Form S-8 filed with the Commission on October 30, 1995
(Commission file number 33-63803) with respect to the 1994
Amended and Restated Stock Option and Incentive Plan for Key
Employees of Safeway Inc.
Giving effect to increases under the Prior Plans as a result of
two two-for-one stock splits, we previously registered a total of 98,000,000
shares of our common stock reserved for issuance from time to time under the
Prior Plans. Of the 98,000,000 shares, we transferred 18,400,000 shares from the
prior registration statements to this registration statement and those shares
are issuable under the 1999 Equity Plan. Concurrently with the filing of this
registration statement, we amended each of the prior registration statements to
effect that transfer of shares. By this registration statement and
post-effective amendments amending each of the prior registration statements,
the transferred shares are now reserved for issuance under the 1999 Equity Plan.
Under this registration statement, we are registering an additional 5,600,000
shares of the common stock, bringing the total number of shares registered under
this registration statement, and issuable under the 1999 Equity Plan, to
24,000,000.
The contents of the prior registration statements, each as
amended by post-effective amendments, are incorporated herein by reference
except for the items that are set forth below. Pursuant to Instruction E to Form
S-8, the relevant opinions and consents are hereby provided, we have paid the
additional filing fee required in respect of the additional 5,600,000 shares,
and this registration statement contains such information required by Form S-8
that is not otherwise included in the prior registration statements.
PART I.
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
This Registration Statement on Form S-8 covers 24,000,000 shares
of our common stock, par value $0.01 per share, reserved for issuance under the
1999 Equity Plan, adopted effective as of May 11, 1999. Of the 24,000,000 shares
being registered under this registration statement, we have transferred
18,400,000 shares from our prior registration statements and are registering
5,600,000 additional shares under this registration statement.
2
<PAGE> 3
The information called for in Part I of Form S-8 is not being
filed with or included in this Form S-8 (by incorporation by reference or
otherwise) in accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission").
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
We incorporate by reference the following documents we filed with
the Commission pursuant to Section 13 of the Exchange Act (Commission file
number 1-41):
o Annual Report on Form 10-K for the fiscal year ended January
2, 1999;
o Quarterly Report on Form 10-Q for the period ended March 27,
1999;
o Quarterly Report on Form 10-Q for the period ended June 19,
1999;
o Current Reports on Form 8-K dated February 11, 1999,
February 23, 1999, April 23, 1999 and August 4, 1999;
o 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
o 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 completed (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).
Information that we file later with the Commission will
automatically update and supersede this information.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the common stock that we
are offering are being passed upon by Michael C. Ross, Esq., our General
Counsel. Mr. Ross is also our Senior Vice President and the Secretary. Mr. Ross
holds common stock and options to purchase common stock which in the aggregate
constitute less than 1% of our common stock.
ITEM 6. 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,
3
<PAGE> 4
Section 13 of the Company's bylaws, 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 bylaws.
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 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 bylaws. 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 bylaws 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 bylaws
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 bylaws. 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
4
<PAGE> 5
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
bylaws.
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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 1999 Amended and Restated Equity Participation Plan. (Incorporated by
reference to Exhibit 10.1 to the Registrant's Registration Statement
No. 1-41 on Form 10-Q for the period ended June 19, 1999).
4.2 Forms of 1999 Equity Participation Plan Stock Option and Purchase
Agreement for use for (i) Employees, (ii) Directors (initial grants),
(iii) Directors (annual grants) and (v) Consultants.
5.1 Opinion of Michael C. Ross, Esq., General Counsel, as to the legality
of the Common 23.1 Stock being registered.
23.1 Consent of Michael C. Ross, Esq. (Incorporated in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney. (Incorporated by reference in the signature page to
the Registration Statement).
- ---------------
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
5
<PAGE> 6
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pleasanton, State of California on this 17th day of
September 1999.
SAFEWAY INC.
By: /s/ MICHAEL C. ROSS
--------------------------------
Michael C. Ross
Senior Vice President, Secretary
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 17, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Chairman, President and Chief Executive
/s/ Steven A. Burd Officer
- ------------------------------------------ (Principal Executive Officer)
Steven A. Burd
Executive Vice President, Chief Financial
/s/ David G. Weed Officer
- ------------------------------------------ (Principal Financial Officer and Principal
David G. Weed Accounting Officer)
/s/ James H. Greene, Jr. Director
- ------------------------------------------
James H. Greene, Jr.
/s/ Paul Hazen Director
- ------------------------------------------
Paul Hazen
/s/ Henry R. Kravis Director
- ------------------------------------------
Henry R. Kravis
/s/ Robert I. MacDonnell Director
- ------------------------------------------
Robert I. MacDonnell
/s/ Peter A. Magowan Director
- ------------------------------------------
Peter A. Magowan
/s/ George R. Roberts Director
- ------------------------------------------
George R. Roberts
/s/ Rebecca A. Stirn Director
- ------------------------------------------
Rebecca A. Stirn
/s/ William Y. Tauscher Director
- ------------------------------------------
William Y. Tauscher
</TABLE>
4
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
-------
<S> <C>
4.1 1999 Amended and Restated Equity Participation Plan. (Incorporated by
reference to Exhibit 10.1 to the Registrant's Registration Statement
No. 1-41 on Form 10-Q for the period ended June 19, 1999).
4.2 Forms of 1999 Equity Participation Plan Stock Option and Purchase
Agreement for use for (i) Employees, (ii) Directors (initial grants),
(iii) Directors (annual grants) and (iv) Consultants.
5.1 Opinion of Michael C. Ross, Esq., General Counsel, as to the legality
of the 23.1 Common Stock being registered.
23.1 Consent of Michael C. Ross, Esq. (Incorporated in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24 Power of Attorney. (Incorporated by reference in the signature page to
the Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.2
1999 AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
OF
SAFEWAY INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
(U.S. EMPLOYEES)
You have been selected to be a participant in the 1999 Amended and Restated
Equity Participation Plan of Safeway Inc., as specified below:
Employee: <<name>> SSN: <<ssn>>
Date of Grant: <<grantdate>> Grant #: <<grant>>
Date of Expiration: <<expdate>>
Number of Options Granted: <<shares>>
Exercise Price per Share: $<<price>>
IN WITNESS WHEREOF, the parties have caused the Option Agreement set forth below
to be executed as of the Date of Grant.
SAFEWAY INC.
By: __________________________
------------------------------
Employee's Signature/<<name>>
------------------------------
Street or P.O. Box
------------------------------
City, State ZIP
5
<PAGE> 2
THIS AGREEMENT is made on and as of the Date of Grant set forth above
between SAFEWAY INC., a Delaware corporation (the "Company") and the Employee
named above pursuant to the provisions of the 1999 Amended and Restated Equity
Participation Plan of Safeway Inc. (the "Plan"). The parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Terms not otherwise defined
in this Agreement shall have the meaning specified in the Plan.
SECTION 1.1 - OPTION
"Option" shall mean the option to purchase Common Stock of the Company
granted under this Agreement.
SECTION 1.2 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the Company or a
Subsidiary is terminated for any reason, with or without cause, including, but
not by way of limitation, a termination by resignation, discharge, death,
Disability or retirement; but excluding terminations where there is a
simultaneous reemployment or continuing employment of the Employee by the
Company or a Subsidiary, (b) at the discretion of the Committee, terminations
which result in a temporary severance of the employer-employee relationship, and
(c) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the Employee. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether a particular leave of absence constitutes a Termination of
Employment.
SECTION 1.3 - CHANGE IN CONTROL OF THE COMPANY
A "Change in Control of the Company" shall be deemed to have occurred,
subject to subparagraph (d) hereof, if any of the events (an "Event") in
subparagraphs (a), (b) or (c) occur during the term of the Agreement:
(a) Any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than an employee benefit plan of the Company, a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or an underwriter who acquires such securities for the purpose
of resale in an underwritten public offering of such securities, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 25% or more of the Company's
then outstanding voting securities carrying the right to vote in
elections of persons to the Board, regardless of comparative voting
power of such voting securities; or
(b) As a result of a tender offer or exchange offer for the purchase of
securities of the Company (other than such an offer by the Company for
its own securities), or as a result of a proxy contest, merger,
consolidation or sale of assets, or as a result of any combination of
the foregoing, individuals who at the beginning of any two-year period
constitute the Board plus new directors (other than a director
designated by a person who shall have entered into an agreement with the
Company to effect a transaction described in clauses (a) or (c) of this
Subsection) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of such two year period or whose election or nomination for
election was previously so approved (collectively, the "Continuing Board
Members"), cease for any reason to constitute a majority thereof; or
(c) The holders of securities of the Company entitled to vote thereon
approve the following:
(i) A merger or consolidation of the Company with any other
corporation regardless of which entity is the surviving company,
other than a merger or consolidation which would result in the
voting securities of the Company carrying the right to vote in
elections of persons to the Board outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving
entity) at least 80% of the Company's then outstanding voting
securities carrying the right to vote in elections of persons to
the Board, or such securities of such surviving entity
outstanding immediately after such
<PAGE> 3
merger or consolidation, or
(ii) A plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
(d) Notwithstanding the definition of a "Change in Control of The
Company" as set forth in this Section 1.3, no such Event described in
subparagraphs (a), (b) or (c) shall constitute a Change in Control of
the Company if prior to the occurrence of any such Event the Continuing
Board Members unanimously approve such Event.
SECTION 1.4 - DEMOTION
"Demotion" shall mean the demotion of the Employee to a position within
the Company which is not then eligible for grants of stock options or to a
position that is eligible for stock option grants at a lower level than the
level for which the Employee was eligible on the Date of Grant. Notwithstanding
the foregoing, the Chief Executive Officer of the Company may make adjustments,
in his discretion, in the foregoing definition in the event of the transfer,
illness or disability of the Employee, the occurrence of a force majeure event
(including without limitation acts of God, strikes or labor disturbances)
affecting the Employee's position or other similar circumstances.
SECTION 1.5 - DISABILITY
"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Internal Revenue Code, as amended.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of the Employee's agreement to remain in the employ of
the Company or a Subsidiary and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Employee the option to
purchase any part or all of the number of shares of its Common Stock upon the
terms and conditions set forth in this Agreement. This Option is not intended to
constitute an "incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code, as amended.
SECTION 2.2 - PURCHASE PRICE
The purchase price per share of the shares of stock covered by the
Option shall be the price indicated above (which shall be no less than 100% of
the Fair Market Value of a share of the Company's Common Stock on the date of
grant), without commission or other charge.
SECTION 2.3 - CONSIDERATION TO COMPANY
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries, which are hereby expressly reserved, to discharge
the Employee at any time for any reason whatsoever, with or without cause.
<PAGE> 4
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) Subject to Section 3.2, the Option shall become exercisable in seven
(7) cumulative installments as follows:
<TABLE>
<CAPTION>
% OF SHARES SUBJECT
RELATION TO DATE TO THIS OPTION THAT
OF THIS AGREEMENT MAY BE PURCHASED
- ----------------- --------------------
<S> <C>
On and before first anniversary none
After the first anniversary 15%
After the second anniversary 15%
After the third anniversary 15%
After the fourth anniversary 15%
After the fifth anniversary 15%
After the sixth anniversary 15%
After the seventh anniversary 10%
</TABLE>
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each such
installment that becomes exercisable pursuant to Section 3.l shall remain
exercisable until it becomes unexercisable under Section 3.3. No portion of an
Option that is unexercisable at Termination of Employment shall thereafter
become exercisable. No portion of an Option that is unexercisable upon a
Demotion shall thereafter become exercisable. Notwithstanding the foregoing, in
the event of a Demotion to a position that is eligible for stock option grants
at a lower level than the level for which the Employee was eligible on the Date
of Grant, the immediately preceding sentence shall apply only to that part (if
any) of the unexercisable portion of the Option which exceeds the minimum number
of stock options to which such position is eligible.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first
to occur of the following events:
(a) The expiration of ten years and one day from the date the Option was
granted; or
(b) The expiration of three months from the date of the Employee's
Termination of Employment unless such Termination of Employment results from his
or her death, his or her retirement on or after age 55 in accordance with the
Company's retirement policies as then in effect, or his or her Disability; or
(c) The expiration of one year from the date of the Employee's
Termination of Employment by reason of his or her death or Disability or his or
her retirement on or after age 55 in accordance with the Company's retirement
policies as then in effect; or
(d) The engagement by the Employee in willful misconduct which injures
the Company or any of its Subsidiaries; or
(e) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or 80%
or more of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, unless the Committee waives this provision in
connection with such transaction. At least ten days prior to the effective date
of such merger, consolidation, acquisition, liquidation or dissolution the
Committee shall give the Employee notice of such event if the Option has then
neither been fully exercised nor become unexercisable under this Section 3.3.
<PAGE> 5
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
Upon the occurrence of a Change in Control of the Company, this Option
shall be exercisable as to all shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1(a).
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Employee, only the Employee may exercise the
Option or any portion thereof. After the death of the Employee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his or her personal
representative or by any person empowered to do so under the Employee's will or
under the then applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
100 shares (or the minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely
by delivery to the Secretary or his or her office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Employee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(b) Full payment (in cash or by check) for the shares with respect to
which such Option or portion is thereby exercised; provided, however,
that the Committee may, in its discretion: (i) allow a delay in payment
of up to thirty (30) days from the date the Option, or portion thereof,
is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the Employee
for at least six months, duly endorsed for transfer to the Company, with
a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof; (iii) allow
payment, in whole or in part, through the surrender of shares of Common
Stock then issuable upon exercise of the Option having a Fair Market
Value of the date of Option exercise equal to the aggregate exercise
price of the Option or exercised portion thereof; (iv) allow payment, in
whole or in part, through the delivery of property of any kind which
constitutes good and valuable consideration; (v) allow payment, in whole
or in part, through the delivery of a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as
may be prescribed by the Committee; (vi) allow payment, in whole or in
part, through the delivery of a notice that the Employee has placed a
market sell order with a broker with respect to shares of Common Stock
then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the Option exercise price, provided that
payment of such proceeds is then made to the Company upon settlement of
such sale; or (vii) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii), (iv),
(v) and (vi).
(c) On or prior to the date the same is required to be withheld, full
payment (in cash or by check) of any amount that must be withheld by the
Company for federal, state and/or local tax purposes; provided, however,
that the Committee may, in its discretion, allow for such payment to be
in the form of consideration used by the Holder to pay for such shares
under Section 4.3(b).
(d) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or
state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends
on share certificates and issuing stop-transfer orders to transfer
agents and registrars; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.l by any person or persons other than the Employee,
appropriate proof of the right of such person or persons to exercise the
Option.
<PAGE> 6
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons of
administrative convenience; and
(e) Unless a Registration Statement under the Securities Act of 1933 is
in effect with respect to the shares to be issued, the receipt of the written
representation of Employee that the shares of Common Stock are being acquired by
him for investment and with no present intention of selling or transferring them
and that he will not sell or otherwise transfer the shares except in compliance
with all applicable securities laws.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement, to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret or revoke any
such rules, and to amend this Agreement provided such amendment does not impair
the rights of the Employee granted hereunder. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Option. In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of Employee hereunder are subject
to all the terms and conditions of the Plan, as the same may be amended from
time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. Any inconsistency between this Option
Agreement and the Plan shall be resolved in favor of the Plan.
SECTION 5.3 - OPTION NOT TRANSFERABLE
The Option may not be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, unless and
until the Option has been exercised, or the shares underlying the Option have
been issued. Subject to the preceding sentence, neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his or her successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that this Section 5.3 shall not prevent transfers by will or by the
applicable laws of descent and distribution.
<PAGE> 7
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him or her at the address given
beneath his signature hereto or the last known address for the Employee
contained in the Company's personnel records. By a notice given pursuant to this
Section 5.4, either party may hereafter designate a different address for
notices to be given to him or her. Any notice which is required to be given to
the Employee shall, if the Employee is then deceased, be given to the Employee's
personal representative if such representative has previously informed the
Company of his or her status and address by written notice under this Section
5.4. Any notice shall be deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in
a post office or branch post office regularly maintained by the United States
Postal Service.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
SECTION 5.6 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
[Signatures on 1st page of Agreement]
<PAGE> 8
1999 AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
OF
SAFEWAY INC.
INDEPENDENT DIRECTOR
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, ____, is made by and between SAFEWAY
INC., a Delaware corporation (the "Company"), and _____________________, an
Independent Director of the Company.
WHEREAS, the Company wishes to carry out the 1999 Amended and
Restated Equity Participation Plan of Safeway Inc. (the "Plan") (the terms of
which are hereby incorporated by reference and made a part of this Agreement)
pursuant to which the Independent Director is entitled to a grant of stock
options.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
GRANT OF OPTION
Section 1.1 - Grant of Option
Pursuant to the terms of the Plan, on the date hereof the Company
irrevocably grants to the Independent Director the option to purchase any part
or all of an aggregate of _____ shares of its Common Stock upon the terms and
conditions set forth in this Agreement and the Plan.
Section 1.2 - Purchase Price
The purchase price of the Common Stock covered by the Option
shall be $_____ per share without commission or other charge.
ARTICLE II
PERIOD OF EXERCISABILITY OF OPTION
Section 2.1 - Commencement of Exercisability
(a) Subject to subsection (b) below, the Option shall become
exercisable in three (3) cumulative installments as follows:
(i) The first installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
first anniversary of the date hereof.
(ii) The second installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
second anniversary of the date hereof.
(iii) The third installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
third anniversary of the date hereof.
(b) No portion of an Option which is unexercisable at Termination
of Directorship shall thereafter become exercisable.
Section 2.2 - Duration of Exercisability
<PAGE> 9
The installments provided for in Section 2.1 are cumulative. Each
such installment that becomes exercisable pursuant to Section 2.1 shall remain
exercisable until it becomes unexercisable under Section 2.3.
Section 2.3 - Expiration of Option
This Option may not be exercised to any extent by anyone after
the first to occur of the following events:
(a) The expiration of ten years from the date the Option
was granted;
or
(b) The expiration of three (3) months from the date of
the Independent Director's Termination of Directorship unless such
Termination of Directorship results from his or her death or his or her
Disability; or
(c) The expiration of twelve (12) months from the date of
the Independent Director's Termination of Directorship by reason of his
or her death or his or her Disability; or
(d) The effective date of either the merger or
consolidation of the Company with or into another corporation, or the
acquisition by another corporation or person of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding
voting stock, or the liquidation or dissolution of the Company, unless
the Board waives this provision in connection with such transaction. At
least ten days prior to the effective date of such merger,
consolidation, acquisition, liquidation or dissolution, the Board shall
give the Independent Director notice of such event if the Option has
then neither been fully exercised nor become unexercisable under this
Section 2.3.
ARTICLE III
EXERCISE OF OPTIONS
Section 3.1 - Person Eligible to Exercise
During the lifetime of the Independent Director, only the
Independent Director may exercise the Option or any portion thereof. After the
death of the Independent Director, any exercisable portion of the Option may,
prior to the time when such portion becomes unexercisable under Section 2.3, be
exercised by his or her personal representative or by any person empowered to do
so under the deceased Independent Director's will or under the then applicable
laws of descent and distribution.
Section 3.2 - Partial Exercise
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
Section 2.3, such Option or portion thereof may be exercised in whole or in
part; provided, however, that the Company shall not be required to issue
fractional shares and the Board may, by the terms of the Option, require any
partial exercise to be with respect to a specified minimum number of shares.
Section 3.3 - Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his or her office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under Section 2.3:
(a) Notice in writing signed by the Independent Director
or other person then entitled to exercise such Option or portion,
stating that such Option or portion is exercised, such notice complying
with all applicable rules established by the Board; and
<PAGE> 10
(b) Full payment (in cash or by check) for the shares
with respect to which such Option or portion is thereby exercised;
provided, however, that the Board may, in its discretion: (i) allow a
delay in payment of up to thirty (30) days from the date the Option, or
portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by
the Independent Director for at least six months, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value of the date of Option
exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; (iv) allow payment, in whole or in part,
through the delivery of property of any kind which constitutes good and
valuable consideration; (v) allow payment, in whole or in part, through
the delivery of a full recourse promissory note bearing interest (at no
less than such rate as shall then preclude the imputation of interest
under the Code) and payable upon such terms as may be prescribed by the
Board; (vi) allow payment, in whole or in part, through the delivery of
a notice that the Director has placed a market sell order with a broker
with respect to shares of Common Stock then issuable upon exercise of
the Option, and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction
of the Option exercise price, provided that payment of such proceeds is
then made to the Company upon settlement of such sale; or (vii) allow
payment through any combination of the consideration provided in the
foregoing subparagraphs (ii), (iii), (iv), (v) and (vi); and
(c) On or prior to the date the same is required to be
withheld, full payment (in cash or by check) of any amount that must be
withheld by the Company for federal, state and/or local tax purposes;
provided, however, that the Board may, in its discretion, allow for such
payment to be in the form of consideration used by the Holder to pay for
such shares under Section 3.3(b); and
(d) Such representations and documents as the Board, in
its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer orders
to transfer agents and registrars; and
(e) In the event that the Option or portion thereof shall
be exercised pursuant to Section 3.1 by any person or persons other than
the Independent Director, appropriate proof of the right of such person
or persons to exercise the Option or portion thereof.
Section 3.4 - Rights as Stockholder
The holder of the Option shall not be, nor have any of the rights
or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares have been issued by the Company to such
holder.
<PAGE> 11
ARTICLE IV
OTHER PROVISIONS
Section 4.1 - Administration
The Board shall have the power to interpret the Plan and this
Agreement, to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret or revoke any
such rules, and to amend this Agreement provided such amendment does not impair
the rights of the Independent Director granted hereunder. All actions taken and
all interpretations and determinations made by the Board in good faith shall be
final and binding upon the Independent Director, the Company and all other
interested persons. No member of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the Agreement.
Section 4.2 - Agreement Subject to Terms of Plan
This Agreement and the rights of the Independent Director
hereunder are subject to all the terms and conditions of the Plan, as the same
may be amended from time to time, as well as to such rules and regulations as
the board may adopt for administration of the Plan. Any inconsistency between
this Agreement and the Plan shall be resolved in favor of the Plan.
Section 4.3 - Option Not Transferable
The Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or, unless
and until the Option has been exercised, or the shares underlying the Option
have been issued. Subject to the preceding sentence, neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Independent Director or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.3 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
Section 4.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Independent Director shall be addressed to him or her
at the address given beneath his or her signature hereto or the last known
address contained in the Company's records. By a notice given pursuant to this
Section 4.4, either party may hereafter designate a different address for
notices to be given to him or her. Any notice which is required to be given to
the Independent Director shall, if the Independent Director is then deceased, be
given to the Independent Director's personal representative if such
representative has previously informed the Company of his or her status and
address by written notice under this Section 4.4. Any notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
Section 4.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
6
<PAGE> 12
Section 4.6 - Construction
This Agreement shall be administered, interpreted and enforced
under the laws of the State of Delaware.
Section 4.7 - Definitions
Capitalized terms not otherwise defined in this Agreement shall
have the meaning specified in the Plan.
Section 4.8 - No Right to Continued Membership On the Board
Nothing in this Agreement or in the Plan shall confer upon the
Independent Director any right to continue in his or her capacity as a member of
the Board of Directors of the Company or shall interfere with or restrict in any
way the rights of the Company or its stockholders, which are hereby expressly
reserved, to remove the Independent Director at any time for any reason
whatsoever, with or without cause.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Date set forth above.
SAFEWAY INC.
By:
---------------------------------
ATTEST:
- --------------------------------------
----------------------------------
[Name of Independent Director]
<PAGE> 13
1999 AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
OF
SAFEWAY INC.
INDEPENDENT DIRECTOR
STOCK OPTION AND PURCHASE AGREEMENT
THIS AGREEMENT, dated ____________, ____, is made by and between SAFEWAY
INC., a Delaware corporation (the "Company"), and _____________________, an
Independent Director of the Company.
WHEREAS, the Company wishes to afford the Independent Director the
opportunity to purchase shares of Common Stock; and
WHEREAS, the Company wishes to carry out the 1999 Amended and Restated
Equity Participation Plan of Safeway Inc. (the "Plan") (the terms of which are
hereby incorporated by reference and made a part of this Agreement) pursuant to
which the Independent Director is entitled to a grant of stock options and to
purchase shares of Common Stock of the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
PURCHASE OF PURCHASE STOCK
Section 1.1 - Sale of Purchase Stock
In consideration of the Independent Director's agreement to
remain as a director of the Company and in exchange for the consideration and
other payments described in Sections 1.2 and 1.3 below, concurrently with the
execution of this Agreement the Company shall irrevocably issue to the
Independent Director _____ shares of its Common Stock (the "Purchase Stock")
upon the terms and conditions set forth in this Agreement.
Section 1.2 - Consideration to the Company
As consideration for the issuance of the Purchase Stock by the
Company, concurrently with the execution of this Agreement the Independent
Director shall deliver to the Company cash or a check in the amount of $_____
and execute and deliver a full recourse promissory note in the form attached
hereto as Exhibit A in the original principal amount of $-------.
Section 1.3 - Income Tax Withholding
As a condition to the receipt of the Purchase Stock, the
Independent Director shall concurrently deliver to the Company full payment (in
cash or by check) of any amounts that must be withheld by the Company, as
determined by the Committee in its sole discretion, for federal, state and/or
local tax purposes.
<PAGE> 14
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
Pursuant to the terms of the Plan but subject to the Independent
Director purchasing the Purchase Stock, on the date hereof the Company
irrevocably grants to the Independent Director the option to purchase any part
or all of an aggregate of _____ shares of its Common Stock upon the terms and
conditions set forth in this Agreement and the Plan.
Section 2.2 - Purchase Price
The purchase price of the Common Stock covered by the Option
shall be $_____ per share without commission or other charge.
ARTICLE III
PERIOD OF EXERCISABILITY OF OPTION
Section 3.1 - Commencement of Exercisability
(a) Subject to subsection (b) below, the Option shall become
exercisable in three (3) cumulative installments as follows:
(i) The first installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
first anniversary of the date hereof.
(ii) The second installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
second anniversary of the date hereof.
(iii) The third installment shall consist of one-third of
the shares covered by the Option and shall become exercisable on the
third anniversary of the date hereof.
(b) No portion of an Option which is unexercisable at Termination
of Directorship shall thereafter become exercisable.
Section 3.2 - Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each
such installment that becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3 - Expiration of Option
This Option may not be exercised to any extent by anyone after
the first to occur of the following events:
(a) The expiration of ten years from the date the Option
was granted;
or
(b) The expiration of three (3) months from the date of
the Independent Director's Termination of Directorship unless such
Termination of Directorship results from his or her death or his or her
Disability; or
(c) The expiration of twelve (12) months from the date of
the Independent Director's Termination of Directorship by reason of his
or her death or his or her Disability; or
<PAGE> 15
(d) The effective date of either the merger or
consolidation of the Company with or into another corporation, or the
acquisition by another corporation or person of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding
voting stock, or the liquidation or dissolution of the Company, unless
the Board waives this provision in connection with such transaction. At
least ten days prior to the effective date of such merger,
consolidation, acquisition, liquidation or dissolution, the Board shall
give the Independent Director notice of such event if the Option has
then neither been fully exercised nor become unexercisable under this
Section 3.3.
ARTICLE IV
EXERCISE OF OPTIONS
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Independent Director, only the
Independent Director may exercise the Option or any portion thereof. After the
death of the Independent Director, any exercisable portion of the Option may,
prior to the time when such portion becomes unexercisable under Section 3.3, be
exercised by his or her personal representative or by any person empowered to do
so under the deceased Independent Director's will or under the then applicable
laws of descent and distribution.
Section 4.2 - Partial Exercise
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
Section 3.3, such Option or portion thereof may be exercised in whole or in
part; provided, however, that the Company shall not be required to issue
fractional shares and the Board may, by the terms of the Option, require any
partial exercise to be with respect to a specified minimum number of shares.
Section 4.3 - Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his or her office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under Section 3.3:
(a) Notice in writing signed by the Independent Director
or other person then entitled to exercise such Option or portion,
stating that such Option or portion is exercised, such notice complying
with all applicable rules established by the Board; and
(b) Full payment (in cash or by check) for the shares
with respect to which such Option or portion is thereby exercised;
provided, however, that the Board may, in its discretion: (i) allow a
delay in payment of up to thirty (30) days from the date the Option, or
portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by
the Independent Director for at least six months, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value of the date of Option
exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; (iv) allow payment, in whole or in part,
through the delivery of property of any kind which constitutes good and
valuable consideration; (v) allow payment, in whole or in part, through
the delivery of a full recourse promissory note bearing interest (at no
less than such rate as shall then preclude the imputation of interest
under the Code) and payable upon such terms as may be prescribed by the
Board; (vi) allow payment, in whole or in part, through the delivery of
a notice that the Director has placed a market sell order with a broker
with respect to shares of Common Stock then issuable upon exercise of
the Option, and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction
of the Option exercise price, provided that payment of such proceeds is
then made to the Company upon settlement of such sale; or (vii) allow
payment through any
<PAGE> 16
combination of the consideration provided in the foregoing subparagraphs
(ii), (iii), (iv), (v) and (vi); and
(c) On or prior to the date the same is required to be
withheld, full payment (in cash or by check) of any amount that must be
withheld by the Company for federal, state and/or local tax purposes;
provided, however, that the Board may, in its discretion, allow for such
payment to be in the form of consideration used by the Holder to pay for
such shares under Section 4.3(b); and
(d) Such representations and documents as the Board, in
its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer orders
to transfer agents and registrars; and
(e) In the event that the Option or portion thereof shall
be exercised pursuant to Section 4.1 by any person or persons other than
the Independent Director, appropriate proof of the right of such person
or persons to exercise the Option or portion thereof.
Section 4.4 - Rights as Stockholder
The holder of the Option shall not be, nor have any of the rights
or privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares have been issued by the Company to such
holder.
ARTICLE V
OTHER PROVISIONS
Section 5.1 - Administration
The Board shall have the power to interpret the Plan and this
Agreement, to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret or revoke any
such rules, and to amend this Agreement provided such amendment does not impair
the rights of the Independent Director granted hereunder. All actions taken and
all interpretations and determinations made by the Board in good faith shall be
final and binding upon the Independent Director, the Company and all other
interested persons. No member of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the Agreement.
Section 5.2 - Agreement Subject to Terms of Plan
This Agreement and the rights of the Independent Director
hereunder are subject to all the terms and conditions of the Plan, as the same
may be amended from time to time, as well as to such rules and regulations as
the board may adopt for administration of the Plan. Any inconsistency between
this Agreement and the Plan shall be resolved in favor of the Plan.
Section 5.3 - Option Not Transferable
The Option may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or, unless
and until the Option has been exercised, or the shares underlying the Option
have been issued. Subject to the preceding sentence, neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Independent Director or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.3 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
7
<PAGE> 17
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Independent Director shall be addressed to him or her
at the address given beneath his or her signature hereto or the last known
address contained in the Company's records. By a notice given pursuant to this
Section 5.4, either party may hereafter designate a different address for
notices to be given to him or her. Any notice which is required to be given to
the Independent Director shall, if the Independent Director is then deceased, be
given to the Independent Director's personal representative if such
representative has previously informed the Company of his or her status and
address by written notice under this Section 5.4. Any notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
Section 5.6 - Construction
This Agreement shall be administered, interpreted and enforced
under the laws of the State of Delaware.
Section 5.7 - Definitions
Capitalized terms not otherwise defined in this Agreement shall
have the meaning specified in the Plan.
<PAGE> 18
Section 5.8 - No Right to Continued Membership On the Board
Nothing in this Agreement or in the Plan shall confer upon the
Independent Director any right to continue in his or her capacity as a member of
the Board of Directors of the Company or shall interfere with or restrict in any
way the rights of the Company or its stockholders, which are hereby expressly
reserved, to remove the Independent Director at any time for any reason
whatsoever, with or without cause.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Date set forth above.
SAFEWAY INC.
By:
---------------------------------
ATTEST:
- --------------------------------------
----------------------------------
[Name of Independent Director]
<PAGE> 19
EXHIBIT A
PROMISSORY NOTE
$--------------- --------,----
FOR VALUE RECEIVED, the undersigned, ________________
("Borrower"), hereby promises to pay to Safeway Inc., a Delaware corporation
(the "Company"), the principal sum of _________________________________________
Dollars ($_______) in lawful money of the United States of America, with all
remaining principal and accrued interest due and payable on ______, ____. This
Note bears interest at the rate of ____% per annum (the "applicable long-term
federal rate" on the date hereof) compounded annually. Interest on the
outstanding principal balance is due and payable in arrears on ______,_____.
If the date set for payment of principal or interest hereunder is
a Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day.
This Note has been delivered in payment for the purchase of
shares of Common Stock, $0.01 par value, of the Company (the "Purchase Stock")
in accordance with the terms of a certain Stock Option and Purchase Agreement,
dated as of ______, ____, between the Company and Borrower (the "Agreement"),
and this Note is the "Note" referred to in the Agreement. Capitalized terms used
herein shall have the same meaning as in the Agreement unless the context
requires otherwise. This Note is subject to the following further terms and
conditions:
1. Payment and Prepayment. All payments of principal of and
interest on this Note shall be made to the Company or its order in lawful money
of the United States of America at the offices of the Company at its then
principal place of business (or at such other place as the holder hereof shall
notify Borrower in writing). Borrower may, at his option, prepay this Note in
whole or in part at any time or from time to time without penalty or premium.
Any prepayments hereunder shall be applied first to accrued
interest and then to outstanding principal hereunder. Concurrently with any
prepayment of any portion of the principal amount of this Note, the Company
shall make a notation of such payment on this Note. To the extent this Note is
prepaid in part, remaining principal payments due hereunder shall be reduced pro
rata by the amount of such prepayment. If full payment of all unpaid principal
of and accrued interest on this Note is made, this Note shall be canceled.
2. Mandatory Prepayment on Sale of Stock. Promptly upon the
receipt of cash proceeds from the sale by Borrower of shares of Purchase Stock,
proceeds from the sale of such shares shall be applied to the prepayment first
of the accrued and unpaid interest hereon and then to the unpaid principal
hereof.
3. Events of Default. Upon either (i) the failure to pay any
installment of the principal of or interest on this Note when due, at maturity
or otherwise which shall remain unremedied for ten days after written notice
thereof shall have been given to Borrower or (ii) cessation of the Borrower's
services as a member of the Board of Directors of the Company for any reason,
including without limitation, death, permanent disability, voluntary
resignation, failure to be nominated to the Board, failure to be elected by the
Company's stockholders, or otherwise, ("Event of Default"), then, and in such
event, the holder of this Note may declare, by notice of default given to
Borrower, the entire principal amount of this Note to be forthwith due and
payable, whereupon the entire principal amount of this Note outstanding and all
accrued interest hereon shall become due and payable without presentment,
demand, protest and notices of any kind or of dishonor, all of which are hereby
expressly waived. Upon the occurrence of an Event of Default, the unpaid
principal hereunder shall commence to bear interest from the date of occurrence
of such Event of Default until the entire principal amount is paid in full, at
the greater of the stated interest rate herein or the floating annual rate equal
to 2% in excess of the rate announced by Bankers Trust Company from time to time
at its principal office as its prime lending rate for domestic commercial loans
(the "Default Rate"). If any interest payable hereunder is not paid when due,
such interest shall be added to the unpaid principal hereunder and shall bear
interest until paid at the Default Rate; provided however, that in no event
shall Borrower be required to pay any interest
8
<PAGE> 20
hereunder in excess of the maximum legal rate. If an Event of Default shall
occur hereunder, Borrower shall pay costs of collection, including reasonable
attorneys' fees, incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Note in the exercise of
any right or remedy shall constitute a waiver thereof, and no right and no
single or partial exercise by the holder hereof of any right or remedy shall
preclude other or future exercise thereof or the exercise of any other right or
remedy.
4. Set Off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default (after the giving of any notice and the
expiration of any grace period contained in the definition thereof), the Company
and each subsequent holder of this Note is hereby authorized by Borrower at any
time or from time to time, without notice to Borrower, or to any other person,
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all indebtedness or any other liability of any nature
whatsoever, whether liquidated or unliquidated, at any time held or owing by the
Company or a subsequent holder to or for the credit or the account of Borrower
against and on account of the obligations and liabilities of Borrower to the
Company or a subsequent holder under this Note, including, but not limited to,
all claims of any nature or description arising out of or connected with this
Note, irrespective of whether or not (a) the Company or a subsequent holder
shall have made any demand hereunder or (b) the Company or a subsequent holder
shall have declared the principal of and interest on this Note and other amounts
due hereunder to be due and payable and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
5. Miscellaneous.
(a) The provisions of this Note shall be governed by and
construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law rules
thereof.
(b) All notices and other communications hereunder shall be in
writing and will be deemed to have been duly given if
delivered or mailed in accordance with the Agreement.
(c) This Note is a full recourse promissory note.
(d) The paragraph headings contained in this Note are for
reference purposes only and shall not affect in any way
the meaning or interpretation of the provisions hereof.
IN WITNESS WHEREOF, this Note has been duly executed and
delivered by Borrower on the date first above written.
-----------------------------
Borrower
Witness:
- ------------------------------------
<PAGE> 21
1999 AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
OF
SAFEWAY INC.
STOCK OPTION AGREEMENT
You have been selected to be a participant in the 1999 Amended and Restated
Equity Participation Plan of Safeway Inc. (the "Plan"), as specified below:
Consultant:
Date of Grant:
Number of Optioned Shares:
Exercise Price per Share:
THIS AGREEMENT is made on and as of the Date of Grant set forth above
between Safeway Inc., a Delaware corporation (the "Company") and the Consultant
named above pursuant to the provisions of the Plan. The parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Terms not otherwise defined
in this Agreement shall have the meaning specified in the Plan.
SECTION 1.1 - OPTION
"Option" shall mean the option to purchase Common Stock of the Company
granted under this Agreement.
SECTION 1.2 - TERMINATION OF CONSULTANCY
"Termination of Consultancy" shall mean the time when the engagement of
the Optionee as a consultant to the Company or a Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement; but excluding
terminations where there is a simultaneous commencement of employment with the
Company or a Subsidiary. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Consultancy, including, but not by way of limitation, the question of whether a
Termination of Consultancy resulted from a discharge for good cause, and all
questions of whether a particular leave of absence constitutes a Termination of
Consultancy.
<PAGE> 22
SECTION 1.3 - CHANGE IN CONTROL OF THE COMPANY
A "Change in Control of the Company" shall be deemed to have occurred,
subject to subparagraph (d) hereof, if any of the events (an "Event") in
subparagraphs (a), (b) or (c) occur during the term of the Agreement:
(a) Any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than an employee benefit plan of the Company, a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or an underwriter who acquires such securities for the purpose
of resale in an underwritten public offering of such securities, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 25% or more of the Company's
then outstanding voting securities carrying the right to vote in
elections of persons to the Board, regardless of comparative voting
power of such voting securities; or
(b) As a result of a tender offer or exchange offer for the purchase of
securities of the Company (other than such an offer by the Company for
its own securities), or as a result of a proxy contest, merger,
consolidation or sale of assets, or as a result of any combination of
the foregoing, individuals who at the beginning of any two-year period
constitute the Board plus new directors (other than a director
designated by a person who shall have entered into an agreement with the
Company to effect a transaction described in clauses (a) or (c) of this
Subsection) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of such two year period or whose election or nomination for
election was previously so approved (collectively, the "Continuing Board
Members"), cease for any reason to constitute a majority thereof; or
(c) The holders of securities of the Company entitled to vote thereon
approve the following:
(i) A merger or consolidation of the Company with any other
corporation regardless of which entity is the surviving company,
other than a merger or consolidation which would result in the
voting securities of the Company carrying the right to vote in
elections of persons to the Board outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving
entity) at least 80% of the Company's then outstanding voting
securities carrying the right to vote in elections of persons to
the Board, or such securities of such surviving entity
outstanding immediately after such merger or consolidation, or
(ii) A plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
(d) Notwithstanding the definition of a "Change in Control of The
Company" as set forth in this Section 1.3, no such Event described in
subparagraphs (a), (b) or (c) shall constitute a Change in Control of
the Company if prior to the occurrence of any such Event the Continuing
Board Members unanimously approve such Event.
SECTION 1.5 - DISABILITY
"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Internal Revenue Code, as amended.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of the Consultant's agreement to provide consulting
services to the Company, and for other good and valuable consideration, on the
date hereof the Company irrevocably grants to Optionee the option to purchase
any part or all of the number of shares of its Common Stock upon the terms and
conditions set forth in this Agreement.
<PAGE> 23
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of stock covered by the Option (which
shall be no less than 100% of the Fair Market Value of a share of the Company's
Common Stock on the date of grant), shall be the price indicated above, without
commission or other charge.
SECTION 2.3 - RESERVATION OF RIGHTS TO TERMINATE CONSULTING SERVICES
Nothing in this Agreement or in the Plan shall confer upon Optionee any
right to continue his or her engagement as a Consultant to, or subsequently as
an Employee of, the Company or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries, which are
hereby expressly reserved, to discharge the Optionee as a Consultant or as an
Employee at any time for any reason whatsoever, with or without cause.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
Subject to Section 3.2, the Option shall become exercisable in seven (7)
cumulative installments as follows:
<TABLE>
<CAPTION>
% OF SHARES SUBJECT
RELATION TO DATE TO THIS OPTION THAT
OF THIS AGREEMENT MAY BE PURCHASED
- ----------------- --------------------
<S> <C>
On and before first anniversary none
After the first anniversary 15%
After the second anniversary 15%
After the third anniversary 15%
After the fourth anniversary 15%
After the fifth anniversary 15%
After the sixth anniversary 15%
After the seventh anniversary 10%
</TABLE>
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3. No portion of an
Option that is unexercisable at Termination of Consultancy shall thereafter
become exercisable.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first
to occur of the following events:
(a) The expiration of ten years and one day from the date the Option was
granted; or
(b) The expiration of three months from the time of Optionee's
Termination of Consultancy unless such Termination of Consultancy
results from his or her death, his or her retirement on or after age 55
in accordance with the Company's retirement policies as then in effect,
or his or her Disability; or
(c) The expiration of one year from the date of Optionee's Termination
of Consultancy by reason of his or her death or Disability or his or her
retirement on or after age 55 in accordance with the Company's
retirement policies as then in effect;
(d) The engagement by Optionee in willful misconduct which injures the
Company or any Subsidiary; or
(e) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's
assets or 80% or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Committee
waives this provision in connection with such transaction. At least ten
days prior to the effective date of such merger, consolidation,
acquisition, liquidation or dissolution, the Committee shall give the
Optionee notice of such event if the
<PAGE> 24
Option has then neither been fully exercised nor become unexercisable
under this Section 3.3.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
Upon the occurrence of a Change in Control of the Company, this Option
shall be exercisable as to all shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1(a).
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of Optionee, only the Optionee may exercise the
Option or any portion thereof. After the death of Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his or her personal
representative or by any person empowered to do so under Optionee's will or
under the then applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
100 shares (or the minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely
by delivery to the Secretary or his or her office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(c) Full payment (in cash or by check) for the shares with respect to
which such Option or portion is thereby exercised; provided, however,
that the Committee may, in its discretion: (i) allow a delay in payment
of up to thirty (30) days from the date the Option, or portion thereof,
is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the Optionee
for at least six months, duly endorsed for transfer to the Company, with
a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof; (iii) allow
payment, in whole or in part, through the surrender of shares of Common
Stock then issuable upon exercise of the Option having a Fair Market
Value of the date of Option exercise equal to the aggregate exercise
price of the Option or exercised portion thereof; (iv) allow payment, in
whole or in part, through the delivery of property of any kind which
constitutes good and valuable consideration; (v) allow payment, in whole
or in part, through the delivery of a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as
may be prescribed by the Committee; (vi) allow payment, in whole or in
part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock
then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the Option exercise price, provided that
payment of such proceeds is then made to the Company upon settlement of
such sale; or (vii) allow payment through any combination of the
consideration provided in the foregoing subparagraphs (ii), (iii), (iv),
(v) and (vi); and
(c) On or prior to the date the same is required to be withheld, full
payment (in cash or by check) of any amount that must be withheld by the
Company for federal, state and/or local tax purposes; provided, however,
that the Committee may, in its discretion, allow for such payment to be
in the form of consideration used by the Holder to pay for such shares
under Section 4.3(b); and
(d) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or
state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends
on share certificates and issuing stop-transfer orders to transfer
agents and registrars; and
<PAGE> 25
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.l by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall, in its absolute discretion,
deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
(e) Unless a Registration Statement under the Securities Act of 1933 is
in effect with respect to the shares to be issued, the receipt of the
written representation of Optionee that the shares of Common Stock are
being acquired by him for investment and with no present intention of
selling or transferring them and that he will not sell or otherwise
transfer the shares except in compliance with all applicable securities
laws.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
<PAGE> 26
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement, to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret or revoke any
such rules, and to amend this Agreement provided such amendment does not impair
the rights of the Optionee granted hereunder. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon Optionee, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Option. In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of Optionee herein are subject to
all the terms and conditions of the Plan, as the same may be amended from time
to time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. Any inconsistency between this Option Agreement and
the Plan shall be resolved in favor of the Plan.
SECTION 5.3 - OPTION NOT TRANSFERABLE
The Option may not be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, unless and
until the Option has been exercised, or the shares underlying the Option have
been issued. Subject to the preceding sentence, neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of Optionee or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that this Section 5.3 shall not prevent transfers by will or by the
applicable laws of descent and distribution.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to Optionee shall be addressed to him or her at the address given beneath
his signature hereto. By a notice given pursuant to this Section 5.4, either
party may hereafter designate a different address for notices to be given to him
or her. Any notice which is required to be given to Optionee shall, if Optionee
is then deceased, be given to Optionee's personal representative if such
representative has previously informed the Company of his or her status and
address by written notice under this Section 5.4. Any notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
<PAGE> 27
SECTION 5.6 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be executed
as of the Date of Grant.
SAFEWAY INC.
By:______________________________
---------------------------------
Consultant's Signature
---------------------------------
Street or P.O. Box
---------------------------------
City, State ZIP
<PAGE> 1
EXHIBIT 5.1
September 17, 1999
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, CA 94588
Re: Safeway Inc. Common Stock
Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on
Form S-8, together with exhibits thereto (the "Registration Statement"), to be
filed by Safeway Inc., a Delaware corporation (the "Company"), relating to the
registration of an additional 5,600,000 shares of common stock, $.01 par value
per share (the "Shares"), issuable in connection with the 1999 Amended and
Restated Equity Participation Plan (the "1999 Plan"), of the Company. I am
familiar with the proceedings undertaken by the Company in connection with the
issuance of the Shares under the Plan and such questions of law and fact as I
have deemed necessary in order to express the opinion hereinafter stated.
Based on the foregoing, I am of the opinion that the Shares have
been duly authorized, and upon issuance of the Shares under the terms of the
Plan and delivery and payment therefor of legal consideration in excess of the
aggregate par value of the Shares issued, such Shares will be validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Michael C. Ross
------------------------------------
Name: Michael C. Ross
Title: Senior Vice President,
Secretary and General Counsel
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Safeway Inc. on Form S-8 of our report dated March 5, 1999, incorporated by
reference in the Annual Report on Form 10-K of Safeway Inc. for the year ended
January 2, 1999.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
September 14, 1999
