<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1999
REGISTRATION NO. 333-84749
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
ON
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>
DELAWARE 94-3019135
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
5918 STONERIDGE MALL ROAD
PLEASANTON, CA 94588
(925) 467-3000
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
------------------------
RANDALL'S FOOD MARKETS, INC. STOCK OPTION AND RESTRICTED STOCK PLAN
AMENDED AND RESTATED 1997 STOCK PURCHASE AND OPTION PLAN FOR KEY EMPLOYEES FOR
RANDALL'S FOOD MARKETS, INC. AND SUBSIDIARIES
(FULL TITLE OF THE PLAN)
------------------------
MICHAEL C. ROSS
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
SAFEWAY INC.
5918 STONERIDGE MALL ROAD
PLEASANTON, CA 94588
(925) 467-3000
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
SCOTT R. HABER, ESQ.
TRACY K. EDMONSON, ESQ.
LATHAM & WATKINS
505 MONTGOMERY STREET, SUITE 1900
SAN FRANCISCO, CALIFORNIA 94111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Filed as a Post-Effective Amendment on Form S-8 to such Registration Statement
pursuant to the procedure described herein. See "Introductory Statement."
<PAGE> 2
INTRODUCTORY STATEMENT
We hereby amend our Registration Statement on Form S-4 (No. 333-84749),
effective August 13, 1999, by filing this Post-Effective Amendment No. 1 on Form
S-8 relating to an aggregate of 1,100,000 shares of Safeway Inc. ("Safeway")
common stock issuable upon exercise of outstanding stock options granted under
the Amended and Restated 1997 Stock Purchase and Option Plan for Key Employees
for Randall's Food Markets, Inc. and Subsidiaries, as amended (the "Randall's
1997 Plan"), and the Randall's Food Markets, Inc. Stock Option and Restricted
Stock Plan, as amended. The shares of Safeway common stock issuable upon the
exercise of the Randall's stock options were registered under the S-4
Registration Statement.
On September 11, 1999, Randall's Food Markets, Inc., a Texas corporation,
merged with and into SI Merger Sub, Inc., a Texas corporation and a wholly owned
subsidiary of Safeway. As a result of the merger, (i) Randall's became a wholly
owned subsidiary of Safeway, (ii) each then outstanding share of common stock of
Randall's was converted into the right to receive cash and shares of Safeway
common stock, and (iii) each outstanding stock option either was converted into
an option to purchase Safeway common stock or was canceled in exchange for cash
and Safeway common stock. Randall's stock options that were converted into
Safeway stock options became options to acquire, on the same terms and
conditions as were applicable under such stock option prior to the effective
time of the merger, shares of Safeway common stock equal to
- $42.9375 divided into
- the product of (a) the per share value of the merger consideration of
approximately $38.81, multiplied by (b) the total number of shares of
Randall's common stock subject to the Randall's stock option that is to
be converted.
Prior to the merger, the shares of Randall's common stock issuable upon
exercise of the stock options granted under the Randall's 1997 Plan were
registered by Randall's under on a registration statement on Form S-8 (No.
333-44157).
The designation of this Post-Effective Amendment as Registration No.
333-84749 denotes that this Post-Effective Amendment relates only to shares of
Safeway common stock issuable upon exercise of the stock options and that this
is the first Post-Effective Amendment to the S-4 Registration Statement.
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.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the Commission
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"):
- Annual Report on Form 10-K for the year ended January 2, 1999 (including
information specifically incorporated by reference into our Form 10-K
from our 1998 Annual Report to Stockholders and Proxy Statement for our
1999 Annual Meeting of Stockholders);
- Quarterly Reports on Form 10-Q for the quarters ended March 27, 1999 and
June 19, 1999;
- Current Reports on Form 8-K filed on February 11, 1999, February 23,
1999, April 23, 1999, and August 4, 1999;
- Description of our Common Stock contained in our Registration Statement
on Form 8-A filed with the Commission on February 20, 1990, including the
amendment on Form 8 dated March 26, 1990; and
- all documents filed by us with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold
(other than those portions of such documents described in paragraphs (i),
(k), and (l) of Item 402 of Regulation S-K promulgated by the
Commission).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
INVESTOR RELATIONS
SAFEWAY INC.
5918 STONERIDGE MALL ROAD
PLEASANTON, CALIFORNIA 94588
(925) 467-3790
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the Common Stock offered hereby
have been passed upon for the Company by Michael C. Ross, Esq., Senior Vice
President, General Counsel and Secretary of Safeway.
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,
Section 13 of the Company's By-laws, under certain circumstances, provide for
the indemnification of the Company's officers, directors, employees and agents
against liabilities which they may
II-1
<PAGE> 4
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but that description is
qualified in its entirety by reference to Article III, Section 13 of the
Company's By-laws.
In general, any officer, director, employee or agent will be indemnified
against expenses, including attorney's fees, fines, settlements or judgments,
which were actually and reasonably incurred, in connection with a legal
proceeding, other than one brought by or on behalf of the Company, to which he
was a party as a result of such relationship, if he acted in good faith, and in
the manner he believed to be in or not opposed to the Company's best interest
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. If the action is brought by or on behalf of
the Company, the person to be indemnified must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to 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 By-laws. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Company's board of directors deems appropriate.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 13 of the Company's By-laws is not deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any by-laws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. If a claim for
indemnification or payment of expenses under Section 13 of the Company's By-laws
is not paid in full within ninety (90) days after a written claim therefor has
been received by the Company, the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part, shall be entitled
to be paid the expense of prosecuting such claim. In any such action, the
Company has the burden of proving that the claimant was not entitled to the
requested indemnification or payment of expenses under applicable law.
The Company's board of directors may authorize, by a vote of a majority of
a quorum of the Company's board of directors, the Company to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Company would have the power to indemnify
him against such liability under the provisions of Section 13 of the By-laws.
The Company's board of directors may authorize the Company to enter into a
contract with any person who is or was a director, officer, employee or agent of
Safeway or is or
II-2
<PAGE> 5
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise providing for indemnification rights equivalent to or, if the
Company's board of directors so determines, greater than those provided for in
Section 13 of the Company's By-laws.
The Company has also purchased insurance for its directors and officers for
certain losses arising from claims or charges made against them in their
capacities as directors and officers of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Amended and Restated 1997 Stock Purchase and Option Plan for
Key Employees for Randall's Food Markets, Inc. and
Subsidiaries (incorporated by reference to Exhibit 4.3 to
Randall's Food Markets, Inc.'s Registration Statement on
Form S-8 dated January 19, 1999).
4.2 Randall's Food Markets, Inc. Stock Option and Restricted
Stock Plan.
4.3 Amendment dated September 11, 1999 to the Randall's Food
Markets, Inc. Stock Option and Restricted Stock and The
Amended and Restated 1997 Stock Purchase and Option Plan for
Randall's Food Markets, Inc. and Subsidiaries.
*5.1 Opinion of Michael C. Ross, General Counsel to Safeway Inc.
*23.1 Consent of Michael C. Ross, General Counsel to Safeway Inc.
(included in his opinion filed as Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
*24.1 Power of Attorney (included on Page II-5 of this
Registration Statement).
</TABLE>
- ---------------
* Previously filed.
ITEM 9. UNDERTAKINGS
(a) We hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply to
information contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities and Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE> 6
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) We hereby undertake that, for purposes of determining any liability
under the Securities Act of 1933, each filing of our annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Safeway pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by 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 against us by
such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<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 Post-Effective
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pleasanton, State of
California, on the 16th 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, as amended,
this post-effective amendment to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman and President
- --------------------------------------------------------
Steven A. Burd
* Executive Vice President and Chief
- -------------------------------------------------------- Financial Officer (Principal
David Weed Financial Officer and Principal
Accounting Officer)
Director
- --------------------------------------------------------
James H. Greene, Jr.
* Director
- --------------------------------------------------------
Paul Hazen
* Director
- --------------------------------------------------------
Henry R. Kravis
Director
- --------------------------------------------------------
Robert I. MacDonnell
* Director
- --------------------------------------------------------
Peter A. Magowan
* Director
- --------------------------------------------------------
George R. Roberts
Director
- --------------------------------------------------------
Rebecca A. Stirn
* Director
- --------------------------------------------------------
William Y. Tauscher
</TABLE>
*By /s/ MICHAEL C. ROSS
----------------------------------
Michael C. Ross
Attorney-in-fact
II-5
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
4.1 Amended and Restated 1997 Stock Purchase and Option Plan for
Key Employees for Randall's Food Markets, Inc. and
Subsidiaries (incorporated by reference to Exhibit 4.3 to
Randall's Food Markets, Inc.'s Registration Statement on
Form S-8 dated January 19, 1999).
4.2 Randall's Food Markets, Inc. Stock Option and Restricted
Stock Plan.
4.3 Amendment dated September 11, 1999 to the Randall's Food
Markets, Inc. Stock Option and Restricted Stock and The
Amended and Restated 1997 Stock Purchase and Option Plan for
Randall's Food Markets, Inc. and Subsidiaries.
*5.1 Opinion of Michael C. Ross, General Counsel to Safeway Inc.
*23.1 Consent of Michael C. Ross, General Counsel to Safeway Inc.
(included in his opinion filed as Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
*24.1 Power of Attorney (included on Page II-5 of this
Registration Statement).
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 4.2
RANDALL'S FOOD MARKETS, INC.
STOCK OPTION AND RESTRICTED STOCK PLAN
1. Purpose. The purpose of this Stock Option and Restricted Stock Plan
("Plan") is to encourage ownership of common stock, $.25 par value ("Common
Stock"), of Randall's Food Markets, Inc., a Texas corporation ("the "Company"),
by eligible key employees and directors of the Company and its Affiliates (as
defined below) and to provide increased incentive for such employees and
directors to render services and to exert maximum effort for the business
success of the Company. In addition, the Company expects that this Plan will
further strengthen the identification of employees and directors with the
shareholders. Certain options to be granted under this Plan are intended to
qualify as Incentive Stock Options ("ISOs") pursuant to Section 422 of the
Internal Revenue Code of 1986, as amended ("Code"), while other options granted
under this Plan will be nonqualified options which are not intended to qualify
as ISOs ("Nonqualified Options"), either or both as provided in the agreements
evidencing the options as provided in Section 6 hereof. ISOs and Nonqualified
Options may be referred to hereinafter as "Options." Common Stock to be granted
under this Plan shall have certain restrictions as to the transferability of
such Common Stock ("Restricted Stock") as provided in Section 8 of the Plan. The
grant of any ISO, Nonqualified Option, or Restricted Stock shall hereinafter be
referred to as an "Award." As used in this Plan, the term "Affiliates" means any
"parent corporation" of the Company and any "subsidiary corporation" of the
Company within the meaning of Section 424(e) and (f), respectively, of the Code.
2. Administration.
2.1 Executive Committee. This Plan shall be administered by the
Executive Committee (the "Committee") of the Board of Directors of the Company
(the "Board").
2.2 Committee Action. The Committee shall hold its meetings at such
times and places as it may determine. A majority of its members shall constitute
a quorum, and all determinations of the Committee shall be made by not less than
a majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully effective as if it had been
made by a majority vote of its members at a meeting duly called and held. The
Committee may designate the Secretary of the Company or other Company employees
to assist the Committee in the administration of this Plan, and may grant
authority to such persons to execute award agreements or other documents on
behalf of the Committee and the Company.
2.3 Committee Expenses. All expenses and liabilities incurred by the
Committee in the administration of this Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons.
3. Stock Subject to the Plan.
3.1 Stock Reserved. Subject to adjustment as provided in Section 3.2
hereof, the aggregate number of shares of Common Stock that may be subject to
Awards under this Plan is one million five hundred thousand (1,500,000). The
shares subject to this Plan shall consist of authorized but unissued shares of
Common Stock or treasury Common Stock and such number of shares shall be and is
hereby reserved for sale for such purpose. Any of such shares which may remain
unsold and which are not subject to outstanding Awards at the termination of
this Plan shall cease to be reserved for the purpose of this Plan, but until
termination of this Plan or the termination of the last of the Awards granted
under this Plan, whichever last occurs, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of this Plan. Should any
Award expire or be cancelled prior to its exercise in full, the shares
theretofore subject to such Award may again be made subject to an Award under
this Plan.
3.2 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Common Stock that occurs after ratification of the Plan by
the shareholders of the Company by reason of a common stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares or
<PAGE> 2
other similar corporate change, the aggregate number of shares of Common Stock
subject to each Award and its stated price, shall be adjusted appropriately by
the Committee or the Board, whose determination shall be conclusive; provided,
however, that fractional shares shall be rounded to the nearest whole share. In
such event, the Committee or the Board also shall have discretion to make
appropriate adjustments in the number and type of shares subject to an Award
under the Plan pursuant to the terms of such an Award.
4. Eligibility. The persons eligible to participate in this Plan as a
recipient of Awards ("Participant") shall include only key employees and
directors of the Company or its Affiliates at the time the Award is granted. An
employee who has been granted an Award hereunder may be granted additional
Awards, if the Committee shall so determine.
5. Options.
5.1 Committee Discretion. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those key
employees and directors of the Company or its Affiliates who are to receive
Options under this Plan, (ii) to determine the number of shares of Common Stock
to be covered by such Options and the terms thereof, and (iii) to determine the
type of Option granted: ISOs, Nonqualified Options or a combination of ISOs and
Nonqualified Options; provided that a director may not receive any ISOs. The
Committee shall thereupon grant Options in accordance with such determinations
as evidenced by a written option agreement. Subject to the express provisions of
this Plan, the Committee shall have discretionary authority to prescribe, amend
and rescind rules and regulations relating to this Plan, to interpret this Plan,
to prescribe and amend the terms of the option agreements (which need not be
identical) and to make all other determinations deemed necessary or advisable
for the administration of this Plan.
5.2 Shareholder Approval. All Options granted under this Plan are
subject to, and may not be exercised before, the approval of this Plan by the
shareholders prior to the first anniversary date of the Board meeting held to
approve this Plan, by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by proxy, and entitled
to vote thereat or by written consent in accordance with the laws of the State
of Texas; provided that if such approval by the shareholders of the Company is
not forthcoming, all Options previously granted under this Plan shall be void.
5.3 Limitation on Incentive Stock Options. The aggregate Fair Market
Value (determined in accordance with Section 6.2, of this Plan at the time the
option is granted) of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Participant during any calendar year under
all such plans of the Company and its Affiliates shall not exceed $100,000.
6. Terms and Conditions. Each Option granted under this Plan shall be
evidenced by an agreement, in a form approved by the Committee, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
6.1 Option Period. The Committee shall promptly notify the Participant
of the Option grant and a written agreement shall promptly be executed and
delivered by and on behalf of the Company and the Participant, provided that the
Option grant shall expire if a written agreement is not signed by said
Participant (or his agent or attorney) and returned to the Company within 60
days from date of receipt by the Participant of such agreement. The date of
grant shall be the date the Option is actually granted by the Committee, even
though the written agreement may be executed and delivered by the Company and
the Participant after that date. Each Option agreement shall specify the period
for which the Option thereunder is granted (which in no event shall exceed ten
years from the date of grant in the case of an ISO) and shall provide that the
Option shall expire at the end of such period. If the original term of an Option
is less than ten years from the date of grant, the Option may be amended prior
to its expiration, with the approval of the Committee and the Participant, to
extend the term so that the term as amended is not more than ten years from the
date of grant. However, in the case of an ISO granted to an individual who, at
the time of grant, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or its Affiliate
("Ten Percent Stockholder"), such period shall not exceed five years from the
date of grant.
6.2 Exercise Price. The exercise price of each share of Common Stock
subject to each Option granted pursuant to this Plan shall be determined by the
Committee at the time the Option is granted and, in
2
<PAGE> 3
the case of ISOs, shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date the Option is granted, as determined by the
Committee. In the case of ISOs granted to a Ten Percent Stockholder, the
exercise price shall not be less than 110% of the Fair Market Value of a share
of Common Stock on the date the Option is granted. The exercise price of each
share of Common Stock subject to a Nonqualified Option under this Plan shall be
determined by the Committee prior to granting the Option. The Committee shall
set the exercise price for each share subject to a Nonqualified Option at such
price as the Committee in its sole discretion shall determine.
For all purposes under this Plan, the fair market value ("Fair Market
Value") of a share of Common Stock on a particular date shall be equal to the
amount set forth in the latest appraisal of Common Stock made pursuant to the
Randall's Food Markets, Inc. Employee Stock Ownership Plan.
6.3 Exercise Period. The Committee may provide in the option agreement
that an Option may be exercised immediately or over the period of the grant and
it whole or in increments. However, no portion of any Option may be exercisable
by a Participant prior to the approval of this Plan by the shareholders of the
Company.
6.4 Procedure for Exercise. Options shall be exercised by the delivery
by the Participant of written notice to the Secretary of the Company setting
forth the number of shares of Common Stock with respect to which the Option is
being exercised. The notice shall be accompanied by, at the election of the
Participant and agreed to by the Committee, (i) cash, cashier's check, bank
draft, or postal or express money order payable to the order of the Company,
(ii) certificates representing shares of Common Stock theretofore owned by the
Participant duly endorsed for transfer to the Company, (iii) an election by the
Participant to have the Company withhold the number of shares of Common Stock
the Fair Market Value, less the exercise price, of which is equal to the
aggregate exercise price of the shares of Common Stock issuable upon exercise of
the Option, or (iv) any combination of the preceding, equal in value to the fall
amount of the exercise price. Notice may also be delivered by telecopy provided
that the exercise price of such shares is received by the Company via wire
transfer on the same day the telecopy transmission is received by the Company,
The notice shall specify the address to which the certificates for such shares
are to be mailed. An Option to purchase shares of Common Stock in accordance
with this Plan, shall be deemed to have been exercised immediately prior to the
close of business on the date (i) written notice of such exercise and (ii)
payment in full of the exercise price for the number of shares for which Options
are being exercised, are both received by the Company and the Participant shall
be treated for all purposes as the record holder of such shares of Common Stock
as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to the Participant certificates for the
number of shares with respect to which such Option has been so exercised, issued
in the Participant's name or such other name as the Participant directs;
provided, however, that such delivery shall be deemed effected for all purposes
when a stock transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the Participant at the
address specified pursuant to this Section 6.4.
6.5 Termination of Employment. If an employee to whom an Option is
granted ceases to be employed by the Company or its Affiliates for any reason
other than the employee's voluntary termination of his or her employment with
the Company or its Affiliates (not including retirement), death, disability or
retirement or is terminated by the Company or its Affiliates other than "for
cause", or if a director to whom an Option is granted ceases to serve on the
Board for any reason other than the director's voluntary termination of his or
her membership on the Board of the Company or its Affiliates (not including
retirement), death, disability or retirement or is terminated from the Board
other than "for cause", the Options previously granted the Participant may be
exercised (to the extent the Participant would have been entitled to do so at
the date of cessation of employment or service on the Board) at any time and
from time to time, within a three month period after such date of cessation of
employment or cessation from the Board; provided, however, the Committee, in its
sole discretion, may allow a Participant to exercise all or a portion of the
Options granted but unexercised for a period of time after the Participant's
termination of employment or cessation of serving on the Board. If an employee
to whom an Option is granted ceases to be employed by the Company or its
3
<PAGE> 4
Affiliates "for cause" or voluntarily terminates his or her employment with the
Company or its Affiliates (not including retirement), or if a director to whom
an Option is granted ceases to serve on the Board "for cause" or voluntarily
terminates his or her membership on the Board (not including retirement), any
Option which is exercisable on the date of such termination of employment or
such cessation of serving on the Board shall expire on such date of such
termination of employment or such cessation of serving on the Board. For
purposes of this Section, "for cause" shall mean: (a) the Optionee's
misappropriation of funds or property of the Company; (b) the Optionee's
attempting to or securing any personal profit not thoroughly disclosed to and
approved by the Company in connection with any transaction entered into on
behalf of the Company or an Affiliate; (c) the Optionee's action, even if not in
connection with the performance of his duties hereunder, which results in his
conviction of a felony; (d) the Optionee's commission of an act of fraud upon or
material evidence of bad faith, dishonesty or disloyalty towards the Company; or
(e) the Optionee's unreasonable and gross neglect of his duties as a key
employee of the Company.
6.6 Disability Death or Retirement. In the event the Participant dies,
is determined under this Plan to be disabled while the Participant is employed
by the Company or its Affiliates or while the Participant serves on the Board or
attains his or her Retirement Date (as defined in the Randall's Food Markets,
Inc. Employee Stock Ownership Plan), the Options previously granted to the
Participant may be exercised (to the extent the Participant would have been
entitled to do so at the date of death or the determination of disability) at
any time and from time to time, within a one year period after such death, or
determination of disability or attaining his or her Retirement Date, by the
Participant, the guardian of the Participant's estate, the executor or
administrator of the Participant's estate or by the person or persons to whom
the Participant's rights under the Option shall pass by will or the laws of
descent and distribution, but in no event may the Option be exercised after its
expiration under the terms of the option agreement. A Participant shall be
deemed to be disabled if, in the opinion of a physician selected by the
Committee, the Participant is incapable of performing services for the Company
of the kind the Participant was performing at the time the disability occurred
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or to be of long, continued and indefinite
duration. The date of determination of disability for purposes hereof shall be
the date of such determination by such physician.
6.7 Transferability. An Option granted pursuant to this Plan shall not
be assignable or otherwise transferable by the Participant otherwise than by the
Participant's will or by the laws of descent and distribution. During the
lifetime of a Participant, an Option shall be exercisable only by such
Participant. Any heir or legatee of the Participant shall take rights granted
herein and in the option agreement subject to the terms and conditions hereof
and thereof No such transfer of any Option to heirs or legatees of the
Participant shall be effective to bind the Company unless the Company shall have
been finished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
Upon the divorce of a Participant, any transfer or assignment of an Option shall
occur in accordance with the option agreement.
6.8 Incentive Stock Options. Each option agreement may contain such
terms and provisions as the Committee may determine to be necessary or desirable
in order to qualify under the Code an Option designated as an incentive stock
option.
6.9 No Rights as Shareholder. No Participant shall have any rights as a
shareholder with respect to shares covered by an Option until the Option is
exercised by written notice and accompanied by payment as provided in Section
6.4 above.
6.10 Extraordinary Corporate Transactions. The existence of outstanding
Options shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, exchanges, or other changes in the Company's capital structure
or its business, or any merger or consolidation of the Company, or any issuance
of Common Stock or other securities or subscription rights thereto, or any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or
4
<PAGE> 5
proceeding, whether of a similar character or otherwise. If the Company
recapitalizes or otherwise changes its capital structure, or merges,
consolidates, sells all of its assets or dissolves (each of the foregoing a
"Fundamental Change"), then thereafter upon any exercise of an Option
theretofore granted the Participant shall be entitled to purchase under such
Option, in lieu of the number of shares of Common Stock as to which such Option
shall then be exercisable, the number and class of shares of stock and
securities to which the Participant would have been entitled pursuant to the
terms of the Fundamental Change if, immediately prior to such Fundamental
Change, the Participant had been the holder of record of the number of shares of
Common Stock as to which such Option is then exercisable. If (i) the Company
shall not be the surviving entity in any merger or consolidation (or survives
only as a subsidiary of another entity), (ii) the Company sells all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) any person or entity (including a "group" as
contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934)
acquires or gains ownership or control of (including, without limitation, power
to vote) more than 50% of the outstanding shares of Common Stock, (iv) the
Company is to be dissolved and liquidated, or (v) as a result of or in
connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such, event in clauses (i) through (v) above is
referred to herein as a "Corporate Change"), the Committee, in its sole
discretion, may accelerate the time at which all or a portion of a Participant's
Option may be exercised for a limited period of time before or after a specified
date.
6.11 Acceleration of Options. Except as hereinbefore expressly
provided, (i) the issuance by the Company of shares of stock of any class of
securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, (ii) the payment of a dividend
in property other than Common Stock, or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Options theretofore granted or the purchase
price per share, unless the Committee shall determine in its sole discretion
that an adjustment is necessary to provide equitable treatment to the
Participant. Notwithstanding anything to the contrary contained in this Plan,
the Committee may in its sole discretion accelerate the time at which any Option
may be exercised, including, but not limited to, upon the occurrence of the
events specified in this Section 6.10 and is authorized at any time (with the
consent of the Participant) to purchase options pursuant to Section 7.
6.12 Shareholders Agreement. The Committee shall provide in the option
agreement that prior to receiving any shares of Common Stock or other securities
on the exercise of the Option, the Participant (or the Participant's
representative upon the Participant's death or disability) shall be required to
execute the Shareholders Agreement for Participants in the Randall's Food
Markets, Inc. Stock Option and Restricted Stock Plan.
7. Relinquishment of Options.
7.1 The Committee, in granting Options hereunder, shall have discretion
to determine whether or not Options shall include a right of relinquishment as
hereinafter provided by this Section 7. The Committee shall also have discretion
to determine whether an option agreement evidencing an Option initially granted
by the Committee without a right of relinquishment shall be amended or
supplemented to include such a right of relinquishment. Neither the Committee
nor the Company shall be under any obligation or incur any liability to any
person by reason of the Committee's refusal to grant or include a right of
relinquishment in any Option granted hereunder or in any option agreement
evidencing the same. Subject to the Committee's determination in any case that
the grant by it of a right of relinquishment is consistent with Section 7.1.1
hereof, any Option granted under this Plan, and the option agreement evidencing
such Option, may provide:
7.1.1 That the Participant, or his heirs or other legal
representatives to the extent entitled to exercise the Option under the terms
thereof, in lieu of purchasing the entire number of shares subject to purchase
thereunder, shall have the right to relinquish all or any part of the then
unexercised portion of the Option (to the extent then exercisable) for a number
of shares of Common Stock, for an amount of cash or for
5
<PAGE> 6
a combination of Common Stock and cash to be determined in accordance with the
following provisions of this Section 7.1.1.:
7.1.1.1 The written notice of exercise of such right of
relinquishment shall state the percentage, if any, of the Appreciated Value (as
defined below) that the Participant elects to receive in cash ("Cash
Percentage"), such Cash Percentage to be in increments of 10% of such
Appreciated Value up to 100% thereof;
7.1.1.2 The number of shares of Common Stock, if any, issuable
pursuant to such relinquishment shall be the number of such shares, rounded to
the next greater number of full shares, as shall be equal to the quotient
obtained by dividing (y) the difference between (I) the Appreciated Value and
(II) the result obtained by multiplying the Appreciated Value and the Cash
Percentage by (z) the then Fair Market Value per share of Common Stock;
7.1.1.3 The amount of cash payable pursuant to such
relinquishment shall be an amount equal to the Appreciated Value less the
aggregate Fair Market Value of the Common Stock issued pursuant to such
relinquishment, if any, which cash shall be paid by the Company subject to such
conditions as are deemed advisable by the Committee to permit compliance by the
Company with the withholding provisions applicable to employers under the Code
and any applicable state income tax laws;
7.1.1.4 For the purpose of this Section 7.1.1., "Appreciated
Value" means the excess of (y) the aggregate Fair Market Value of the shares of
Common Stock covered by the Option or the portion thereof to be relinquished
over (z) the aggregate purchase price for such shares specified in such Option;
7.1.2 That such right of relinquishment may be exercised only upon
receipt by the Company of a written notice of such relinquishment which shall be
dated the date of election to make such relinquishment; and that, for the
purposes of this Plan, such date of election shall be deemed to be the date when
such notice is sent by registered or certified mail, or when receipt is
acknowledged by the Company, if mailed by other than registered or certified
mail or if delivered by hand or by any telegraphic communications equipment of
the sender or otherwise delivered.
7.1.3 That the Option, or any portion thereof, may be relinquished
only to the extent that (A) it is exercisable on the date written notice of
relinquishment is received by the Company, (13) the Committee, subject to the
provisions of Section 7,2., shall consent to the election of the holder to
relinquish such Option in whole or in part for cash as set forth in such written
notice of relinquishment, and (C) the holder of such Option pays, or makes
provision satisfactory to the Company for the payment of, any taxes which the
Company is obligated to collect with respect to such relinquishment.
7.2 The Committee shall have sole discretion to consent to or
disapprove, and neither the Committee nor the Company shall be under any
liability by reason of the Committee's disapproval of, any election by a holder
of an Option to relinquish such Option in whole or in part for cash as provided
in Section 7.1.
7.3 The Committee, in granting Options hereunder, shall have discretion
to determine the terms upon which such Options shall be relinquishable, subject
to the applicable provisions of this Plan, If an Option is relinquished, such
Option shall be deemed to have been exercised to the extent of the number of
shares of Common Stock covered by the Option or part thereof which is
relinquished, and no further Options may be granted covering such shares of
Common Stock.
7.4 Neither any Option nor any right to relinquish the same to the
Company as contemplated by this Section 7 shall be assignable or otherwise
transferable except by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act, as amended, or the rules thereunder.
8. Restricted Stock.
8.1 Grant of Restricted Stock. Subject to the provisions of Section 3,
the Committee, at any time and from time to time, may grant shares of Restricted
Stock under the Plan to such Participants and in such
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<PAGE> 7
amounts as it shall determine. Each grant of Restricted Stock shall be evidenced
by a Restricted Stock agreement.
8.2 Transferability. Except as provided in this Section, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated for such period of time as
shall be determined by the Committee and shall be specified in the Restricted
Stock agreement ("Period of Restriction"), or upon earlier satisfaction of other
conditions as specified by Committee in its sole discretion and set forth in the
Restricted Stock agreement.
8.3 Other Restrictions. The Committee shall impose such other
restrictions on any shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable Federal or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
8.4 Voting Rights. Participants holding shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those shares
during the Period of Restriction.
8.5 Dividends and Other Distributions. During the Period of
Restriction, Participants holding shares of Restricted Stock granted hereunder
shall be entitled to receive all cash dividends distributed with respect to
those shares while they are so held.
8.6 Termination of Employment. Except as provided by the Committee at
the time of grant or otherwise, if an employee to whom an Award of Restricted
Stock is made ceases to be employed by the Company or its Affiliates for any
reason other than death, disability or retirement or if a director to whom an
Award of Restricted Stock is made ceases to serve on the Board for any reason
other than death, disability or retirement, any shares of Restricted Stock
outstanding and still under the Period of Restriction shall be forfeited by the
Participant, and the Participant's name shall thereupon be deleted from the list
of Company's stockholders with respect to such Restricted Shares.
8.7 Disability, Death or Retirement. In the event the Participant dies,
is determined under this Plan to be disabled (as defined in Section 6.6) while
the Participant is employed by the Company or its Affiliates or while the
Participant serves on the Board or attains his or her Retirement Date, any
restrictions on the Restricted Shares shall be deemed to have expired as to the
Restricted Shares as of the date of any such occurrence, and the Restricted
Shares shall thereby be free of restrictions and freely transferable.
8.8 Nontransferability of Restricted Stock. No shares of Restricted
Stock granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the termination of the applicable
Period of Restriction. All rights with respect to Restricted Stock granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant. Upon the divorce of a Participant, any transfer or assignment of
Restricted Stock shall occur in accordance with the Restricted Stock Agreement.
8.9 Corporate Change. If (i) the Company shall not be the surviving
entity in any merger or consolidation (or survives only as a subsidiary of
another entity), (ii) the Company sells all or substantially all of its assets
to any other person or entity (other than a wholly-owned subsidiary), (iii) any
person or entity (including a "group" as contemplated by Section 13(d)(3) of the
Securities Exchange Act of 1934) acquires or gains ownership or control of
(including, without limitation power to vote) more than 50% of the outstanding
shares of Common Stock, (iv) the Company is to be dissolved and liquidated, or
(v) as a result of or in connection with a contested election of directors, the
persons who were directors of the Company before such election shall cease to
constitute a majority of the Board, then the Restricted Shares shall thereby be
free of restrictions and freely transferable.
8.10 Shareholders Agreement. The Committee shall provide in the
Restricted Stock agreement that prior to receiving any shares of Common Stock,
the Participant (or the Participant's representative upon the Participant's
death or disability) shall be required to execute the Shareholders Agreement for
Participants in the Randalls Food Markets, Inc. Stock Option and Restricted
Stock Plan.
9. Amendments or Termination. The Board may amend, alter or discontinue
this Plan, but no amendment or alteration shall be made which would impair the
rights of any Participant, without his consent,
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<PAGE> 8
under any Award theretofore granted, or which, without the approval of the
shareholders, would: (i) except as is provided in Section 3.2. of this Plan,
increase the total number of shares reserved for the purposes of this Plan, (ii)
change the class of persons eligible to participate in this Plan as provided in
Section 4 of this Plan, (iii) extend the applicable maximum option period
provided for in Section 6.1 of this Plan, (iv) extend the expiration date of
this Plan set forth in Section 14 of this Plan, (v) except as provided in
Section 6.11 of this Plan, decrease to any extent the exercise price of any
Award granted under this Plan or (vi) withdraw the administration of this Plan
from the Committee.
10. Compliance With Other Laws and Regulations. This Plan, the grant and
exercise of Awards thereunder, and the obligation of the Company to sell and
deliver shares under such Awards, shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any governmental or
regulatory agency as may be required. The Company shall not be required to issue
or deliver any certificates for shares of Common Stock prior to the completion
of any registration or qualification of such shares under any federal or state
law or issuance of any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or advisable.
Any adjustments provided for in Sections 6.10, 11, and 12 of this Plan shall be
subject to any shareholder action required by Texas corporate law.
11. Purchase for Investment. Unless the Awards and shares of Common Stock
covered by this Plan have been registered under the Securities Act of 1933, as
amended, or the Company has determined that such registration is unnecessary,
each person exercising an Award under this Plan may be required by the Company
to give a representation in writing that such person is acquiring such shares
for his or her own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
12. Taxes. The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in connection
with any Awards granted under this Plan.
13. Replacement of Awards. The Committee from time to time may permit a
Participant under this Plan to surrender for cancellation any unexercised
outstanding Award and receive from the Company in exchange an Award for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding Award, amend such Award, including reducing the exercise price of
any Award to not less than the Fair Market Value of the Common Stock at the time
of the amendment and extending the term thereof.
14. No Right to Employment. Employees shall be considered to be in the
employment of the Company so long as they remain employees of the Company or its
Affiliates. Any questions as to whether and when there has been a termination of
such employment and the cause of such termination shall be determined by the
Committee, and its determination shall be final. Nothing contained herein shall
be construed as conferring upon the Participant the right to continue in the
employ of the Company or its Affiliates, nor shall anything contained herein be
construed or interpreted to limit the "employment at will" relationship between
the Participant and the Company or its Affiliates. The Award agreements may
contain such provisions as the Committee may approve with reference to the
effect of approved leaves of absence.
15. Liability of Company for Non-Issuance of Shares and Tax
Consequences. The Company and any Affiliate which is in existence or hereafter
comes into existence shall not be liable to a Participant or other persons as
to:
15.1 The non-issuance or sale of shares as to which the Company has
been unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any shares hereunder; and
15.2 Any tax consequence expected, but not realized, by any
Participant or other person due to the exercise of any Award granted
hereunder.
16. Effectiveness and Expiration of Plan. This Plan shall be effective on
the date of adoption by the Board, If the shareholders of the Company fail to
approve this Plan within twelve months of the date of the Board adoption, this
Plan shall terminate and all Awards previously granted under this Plan shall
become void
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<PAGE> 9
and of no effect. This Plan shall expire ten years after the date the Board
adopts this Plan and thereafter no Award shall be granted pursuant to this Plan.
17. Non-Exclusivity of this Plan. Neither the adoption by the Board nor the
submission for approval of this Plan to the shareholders of the Company shall be
construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including without
limitation, the granting of restricted stock or stock options otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
18. Governing Law. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of Texas and
applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Company, Randall's Food Markets, Inc. has caused
these presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of this 28th day of December, 1994.
RANDALL'S FOOD MARKETS, INC.
ATTEST:
<TABLE>
<S> <C>
/s/ LEE STRAUS By: /s/ R. RANDALL ONSTEAD, JR.
- -------------------------------------------- --------------------------------------------
Secretary Name: R. Randall Onstead, Jr.
Title: President
</TABLE>
9
<PAGE> 1
EXHIBIT 4.3
AMENDMENTS TO
THE AMENDED AND RESTATED 1997 STOCK PURCHASE AND OPTION PLAN FOR
RANDALL'S FOOD MARKETS, INC. AND ITS SUBSIDIARIES AND TO
THE RANDALL'S FOOD MARKETS, INC. STOCK OPTION AND RESTRICTED STOCK PLAN
------------------------
Randall's Food Markets, Inc., a Texas corporation ("Randall's"), hereby
approves and adopts the following amendments (collectively, the "Amendments") to
The Amended and Restated 1997 Stock Purchase and Option Plan for Randall's Food
Markets, Inc. and its Subsidiaries, and The Randall's Food Markets Stock Option
and Restricted Stock Plan, each as previously amended (collectively, the
"Plans"), all of said Amendments to be effective upon consummation of the merger
(the "Merger") of Randall's with and into SI Merger Sub, Inc., a Texas
corporation ("Merger Sub") under the Agreement and Plan of Merger dated as of
July 22, 1999 (as amended, the "Merger Agreement"), among Safeway Inc., a
Delaware corporation ("Safeway"), Merger Sub and Randall's (such time of
consummation being referred to hereinafter as the "Effective Time"):
Pursuant to the Merger Agreement, the various option agreements evidencing
outstanding options under the Plans, and the agreements regarding the election
to convert options outstanding under the Plans prior to the Effective Time and
regarding the waiver of the acceleration of vesting of such options
(collectively, the "Election Agreements"), each option previously granted under
the Plans to acquire shares of common stock, par value $0.25 per share, of
Randall's ("Randall's Common Stock") that is outstanding and unexercised
immediately following the Effective Time and that is not cancelled pursuant to
Section 1.9 of the Merger Agreement (each, a "Stock Option") shall constitute an
option (the "Safeway Option") to acquire, on the same terms and conditions as
were applicable under such Stock Option prior to the Effective Time, shares of
common stock, par value $0.01 per share, of Safeway ("Safeway Common Stock") in
the amount and at the exercise price determined below:
(a) the number of shares of Safeway Stock subject to the Safeway
Option shall be equal (i) the product of (A) the "Per Share Merger
Consideration" (as defined below) and (B) the number of shares of Randall's
Common Stock remaining subject to the Stock Option as of the Effective
Time, divided by (ii) $42.9375; and
(b) the exercise price per share of Safeway Common Stock under the
Safeway Option shall be equal to (i) the product of (A) the per share
exercise price of the Randall's Common Stock subject to the Stock Option
and (B) $42.9375, divided by (ii) the per share value of the per share
Merger Consideration; provided that such exercise price shall be rounded
down to the nearest cent.
The "Per Share Merger Consideration" shall be determined as the value per
share of Randall's Common Stock of the "Merger Consideration" as defined in the
Merger Agreement, based on the closing price of Safeway Common Stock on the New
York Stock Exchange on the trading day prior to the date of the Effective Time.
At and after the Effective Time, Safeway will honor all obligations with
respect to Safeway Options under the terms of such Stock Options, the Election
Agreements and the Plans, as amended hereby.
The Plans shall hereafter be administered by the Compensation and Stock
Option Committee of the Board of Directors of Safeway (the "Safeway Committee"),
notwithstanding anything in the Plans to the contrary. The Safeway Committee
may, in its discretion, delegate all or specified administrative duties and
authority to the Chief Executive Officer or the Secretary of Safeway or both.
All references in the Plans and the related Stock Option agreements to the
"Board," the "Corporation" or "Company," the "Common Stock" or "Shares" and the
"Committee" shall hereafter be deemed to be references to the Board of Directors
of Safeway, Safeway, Safeway Common Stock and the Safeway Committee,
respectively, notwithstanding any provisions in those documents to the contrary,
and all terms
<PAGE> 2
used in these Amendments shall have the meanings given to such terms in the
Plans, except as otherwise provided herein. Except as amended and modified by
these Amendments, the Plans shall continue in full force and effect.
Dated: September 11, 1999
RANDALL'S FOOD MARKETS, INC.
By: /s/ MICHAEL C. ROSS
--------------------------------------
Name: Michael C. Ross
Title: Vice President
2
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
No. 333-84749 of Safeway Inc. on Form S-8, which also constitutes Post-Effective
Amendment No. 1 to Registration Statement No. 333-84749 on Form S-4 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
