-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cnh+jzXnwWuPUpfpjNyt2fdQpuW2+3xaZX3dbWyuSpnD+OX4NRaP/JdtoZmFhWq+ GkN0arRpo4Iv8datm7qNAg== 0000950149-98-001918.txt : 19981120 0000950149-98-001918.hdr.sgml : 19981120 ACCESSION NUMBER: 0000950149-98-001918 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981119 EFFECTIVENESS DATE: 19981119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAFEWAY INC CENTRAL INDEX KEY: 0000086144 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 943019135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-67575 FILM NUMBER: 98755553 BUSINESS ADDRESS: STREET 1: 5918 STONERIDGE MALL RD CITY: PLEASANTON STATE: CA ZIP: 94588 BUSINESS PHONE: 5104673000 MAIL ADDRESS: STREET 1: 5918 STONERIDGE MALL ROAD CITY: PLEASANTON STATE: CA ZIP: 94588 FORMER COMPANY: FORMER CONFORMED NAME: SAFEWAY STORES INC DATE OF NAME CHANGE: 19900226 S-8 1 FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1998 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) DELAWARE 94-3019135 (State of Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) 5918 STONERIDGE MALL ROAD PLEASANTON, CALIFORNIA 94588 (925) 467-3000 (Address and telephone number of principal executive office) -------------------------- THE 1996 EQUITY PARTICIPATION PLAN OF DOMINICK'S SUPERMARKETS, INC. AND THE 1995 AMENDED AND RESTATED STOCK OPTION PLAN OF DOMINICK'S SUPERMARKETS, INC. (Full Title of the Plans) -------------------------- MICHAEL C. ROSS SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL SAFEWAY INC. 5918 STONERIDGE MALL ROAD PLEASANTON, CALIFORNIA 94588 (Name and Address including ZIP Code of Agent For Service) (925) 467-3000 (Telephone Number, Including Area Code, of Agent For Service) Copies to: SCOTT R. HABER, ESQ. TRACY K. EDMONSON, ESQ. LATHAM & WATKINS 505 MONTGOMERY STREET SUITE 1900 SAN FRANCISCO, CALIFORNIA 94111 (415) 391-0600 CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Amount Offering Maximum Amount Of Title of Securities to be Price Per Aggregate Registration to be Registered Registered(1) Share(2) Offering Price Fee ---------------- ------------- --------- -------------- ------------- Common Stock, 923,016 $19.71 $18,189,000 $5,057 $0.01 par value per share $19.71
2 (1) Pursuant to Rule 416 under the Securities Act of 1933 (the "Securities Act"), additional shares of the common stock of the Company (the "Common Stock") issued or which become issuable in order to prevent dilution resulting from any future stock split, stock dividend or similar transaction are also being registered. (2) Estimated for the purpose of calculating the registration fee pursuant to Rule 457(h) under the Securities Act on the basis of the exercise price per share of outstanding options for 923,016 shares issued under the Plans at an average price of $19.71 per share. 3 PART I ITEM 1. PLAN INFORMATION Not required to be filed with this Registration Statement. ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION Not required to be filed with this Registration Statement. PART II ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The Securities and Exchange Commission (the "Commission") allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information in this Registration Statement by referring to those documents. The information incorporated by reference is an important part of this Registration Statement, and information that we file later with the Commission will automatically update and supersede this information. We incorporate by reference the following documents we filed with the Commission pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"): - Annual Report on Form 10-K for the year ended January 3, 1998 (including information specifically incorporated by reference into our Form 10-K from our 1997 Annual Report to Stockholders and Proxy Statement for our 1998 Annual Meeting of Stockholders) and Form 10-K/A filed March 10, 1998; - Quarterly Reports on Form 10-Q for the quarters ended March 28, 1998, June 6, 1998 and September 12, 1998; - Current Reports on Form 8-K filed on July 15, 1998, October 19, 1998 and November 9, 1998; - Description of our common stock contained in our registration statement on Form 8-A filed with the Commission on February 20, 1990, including the amendment on Form 8 dated March 26, 1990; and - All documents filed by us with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act 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). ITEM 4. DESCRIPTION OF SECURITIES Not applicable. 4 ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Certain legal matters in connection with the Common Stock offered hereby are being passed upon for the Company by Michael C. Ross, Esq., General Counsel of the Company. Mr. Ross is also a Senior Vice President and the Secretary of the Company. The Company has granted Mr. Ross options to purchase Common Stock of the Company, upon the exercise of which he would own less than 1% of the 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, Section 13 of the Company's By-laws, under certain circumstances, provide for the indemnification of the Company's officers, directors, employees and agents against liabilities which they may incur in such capacities. A summary of the circumstances in which such indemnification is provided for is contained herein, but that description is qualified in its entirety by reference to Article III, Section 13 of the Company's By-laws. In general, any officer, director, employee or agent will be indemnified against expenses, including attorney's fees, fines, settlements or judgments, which were actually and reasonably incurred, in connection with a legal proceeding, other than one brought by or on behalf of the Company, to which he was a party as a result of such relationship, if he acted in good faith, and in the manner he believed to be in or not opposed to the Company's best interest and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. If the action is brought by or on behalf of the Company, the person to be indemnified must have acted in good faith and in a manner he reasonably believed to be in or not opposed to the Company's best interest, but no indemnification will be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery of Delaware, or the court in which such action was brought, determines upon application that, despite adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expense which such Court of Chancery or such other court shall deem proper. Any indemnification under the previous paragraphs (unless ordered by a court) will be made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper under the circumstances because he has met the applicable standard of conduct set forth above. Such determination will be made (i) by the Company's board of directors by a majority vote of a quorum of disinterested directors who were not parties to such actions, (ii) if such quorum is not obtainable or, even if 5 obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent that a director, officer, employee or agent of the Company is successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the previous paragraph, he will be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him in connection therewith. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is ultimately determined that he is not entitled to be indemnified by the Company as authorized by the Company's By-laws. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Company's board of directors deems appropriate. The indemnification and advancement of expenses provided by, or granted pursuant to, Section 13 of the Company's By-laws is not deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. If a claim for indemnification or payment of expenses under Section 13 of the Company's By-laws is not paid in full within ninety (90) days after a written claim therefor has been received by the Company, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, the Company has the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law. The Company's board of directors may authorize, by a vote of a majority of a quorum of the Company's board of directors, the Company to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of Section 13 of the Company's By-laws. The Company's board of directors may authorize the Company to enter into a contract with any person who is or was a director, officer, employee or agent of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise providing for indemnification rights equivalent to or, if the Company's board of directors so determines, greater than those provided for in Section 13 of the Company's By-laws. The Company has also purchased insurance for its directors and officers for certain losses arising from claims or charges made against them in their capacities as directors and officers of the Company. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. 6 ITEM 8. EXHIBITS 4.1 Restated Certificate of Incorporation of the Company and Certificates of Amendment of Restated Certificate of Incorporation by the Company (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 15, 1996 and Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 20, 1998). 4.2 Form of Bylaws of the Company as amended (incorporated by reference to Exhibit 3.2 to the Registration Statement No. 33-33388), and Amendment to the Company's By-laws effective March 8, 1993 (incorporated by reference to Exhibit 3.2 to Registrant's Form 10-K for the year ended January 2, 1993). 4.3 The 1996 Equity Participation Plan of Dominick's Supermarkets, Inc. (incorporated by reference to Exhibit 10.13 to Dominick's Supermarkets, Inc.'s Annual Report on Form 10-K, Number 1-12353). 4.4 The 1995 Amended and Restated Stock Option Plan of Dominick's Supermarkets, Inc. (incorporated by reference to Exhibit 10.12 to Dominick's Supermarkets, Inc.'s Annual Report on Form 10-K, Number 1-12353). 4.5 Form of Amendment to Stock Option Agreements under The 1996 Equity Participation Plan of Dominick's Supermarkets, Inc. and the 1995 Amended and Restated Stock Option Plan of Dominick's Supermarkets, Inc. 4.6 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4(i).2 to the Registration Statement No. 33-33388). 5.1 Opinion of Michael C. Ross, Esq., General Counsel, as to the legality of the Common Stock being registered. 23.1 Consent of Deloitte & Touche LLP, independent auditors. 23.2 Consent of Michael C. Ross, Esq. (incorporated in Exhibit 5.1). 24.1 Power of Attorney of the Company (included on the signature page to this 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: 7 (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 this Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if 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 this 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 that 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 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 this 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 8 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. 9 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, California, on November 19, 1998. SAFEWAY INC. By: /s/ Michael C. Ross -------------------------------- Michael C. Ross Senior Vice President, Secretary and General Counsel POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint David G. Weed and Michael C. Ross, and each of them, with full power of substitution and full power to act without the other, his true and lawful attorney-in-fact and agent to act for him in his name, place and stead, in any and all capacities, to sign any or all amendments (including without limitation any post-effective amendments) to this Registration Statement on Form S-8, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully, to all intents and purposes, as they or he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by each of the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Steven A. Burd - ---------------------------------- Steven A. Burd Chairman, President and Chief November 19, 1998 Executive Officer (Principal Executive Officer) /s/ David G. Weed - ---------------------------------- David G. Weed Executive Vice President, Chief November 19, 1998 Financial Officer (Principal Financial Officer and Principal Accounting Officer) /s/ James H. Greene, Jr. - ---------------------------------- James H. Greene, Jr. Director November 19, 1998 /s/ Paul Hazen - ---------------------------------- Paul Hazen Director November 19, 1998
10
SIGNATURE TITLE DATE --------- ----- ---- /s/ Henry R. Kravis - ---------------------------------- Henry R. Kravis Director November 19, 1998 /s/ Robert I. MacDonnell - ---------------------------------- Robert I. MacDonnell Director November 19, 1998 /s/ Peter A. Magowan - ---------------------------------- Peter A. Magowan Director November 19, 1998 /s/ George R. Roberts - ---------------------------------- George R. Roberts Director November 19, 1998 /s/ William Y. Tauscher - ---------------------------------- William Y. Tauscher Director November 19, 1998
11 EXHIBIT INDEX 4.1 Restated Certificate of Incorporation of the Company and Certificates of Amendment of Restated Certificate of Incorporation by the Company (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 15, 1996 and Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 20, 1998). 4.2 Form of Bylaws of the Company as amended (incorporated by reference to Exhibit 3.2 to the Registration Statement No. 33-33388), and Amendment to the Company's By-laws effective March 8, 1993 (incorporated by reference to Exhibit 3.2 to Registrant's Form 10-K for the year ended January 2, 1993). 4.3 The 1996 Equity Participation Plan of Dominick's Supermarkets, Inc. (incorporated by reference to Exhibit 10.13 to Dominick's Supermarkets, Inc.'s Annual Report on Form 10-K, Number 1-12353). 4.4 The 1995 Amended and Restated Stock Option Plan of Dominick's Supermarkets, Inc. (incorporated by reference to Exhibit 10.12 to Dominick's Supermarkets, Inc.'s Annual Report on Form 10-K, Number 1-12353). 4.5 Form of Amendment to Stock Option Agreements under The 1996 Equity Participation Plan of Dominick's Supermarkets, Inc. and the 1995 Amended and Restated Stock Option Plan of Dominick's Supermarkets, Inc. 4.6 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4(i).2 to the Registration Statement No. 33-33388). 5.1 Opinion of Michael C. Ross, Esq., General Counsel, as to the legality of the Common Stock being registered. 23.1 Consent of Deloitte & Touche LLP, independent auditors. 23.2 Consent of Michael C. Ross, Esq. (incorporated in Exhibit 5.1). 24.1 Power of Attorney of the Company (included on the signature page to this Registration Statement). EX-4.5 2 FORM OF AMENDMENT TO STOCK OPTION AGREEMENTS 1 EXHIBIT 4.5 FORM OF AMENDMENT TO STOCK OPTION AGREEMENTS This Amendment is made as of the 16th day of November, 1998, by and between Dominick's Supermarkets, Inc., a Delaware corporation (the "Company") and [name] ("Optionee"). RECITALS The Company and Optionee have previously entered into one or more Stock Option Agreements (the "Option Agreements") pursuant to which Optionee has been granted various options (the "Options") to purchase shares of common stock $0.01 par value per share of the Company (the "Common Stock") under the Company's 1996 Equity Participation Plan and/or the Company's Restated 1995 Stock Option Plan (collectively the "Option Plans"). The Company has entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among Safeway Inc. ("Safeway"), Windy City Acquisition Corp. and the Company pursuant to which the Company will become a wholly owned subsidiary of Safeway (the "Merger") and whereby at the effective time of the Merger (the "Effective Time") certain unexercised Options will be converted into options to purchase shares of common stock $0.01 par value per share of Safeway (the "Safeway Stock") which shall be exercisable and shall vest upon the same terms and conditions as set forth in the Option Agreements, except as modified by this Amendment. AGREEMENT The Company and Optionee hereby amend the Option Agreements to provide as follows: 1. Notwithstanding anything contained in the Option Agreements to the contrary, the Options shall be fully vested, nonforfeitable and fully exercisable in the event the Optionee's employment with the Company and/or Safeway is terminated after the Effective Time without Cause (as defined below) or by reason of a Constructive Termination (as defined below). "Cause" shall mean any acts or omissions on the part of Optionee involving: (i) material dishonesty or misappropriation adversely affecting the Company or its property or funds; (ii) serious misconduct including but not limited to reckless or willful destruction of Company property, non-performance of Optionee's responsibilities as an employee, violation of a material condition of employment, aiding a competitor of the Company, unauthorized disclosure or use of confidential information or trade secrets or sexual, racial or other actionable harassment; (iii) conviction of, or a plea of nolo contendere to, any felony; or (iv) illegal, unethical, dishonest, fraudulent, or other similar conduct tending to place Optionee, or the Company by reason of association with Optionee, in disrepute or to subject the Company to material financial loss or loss of business. The Board of Directors of Safeway shall have the sole discretion to determine whether any termination of Optionee's employment is for Cause. 2 "Constructive Termination" shall mean termination of employment by the Optionee upon the first to occur of the following events, if not fully corrected upon ten (10) days' written notice from Optionee to the Company: (a) the assignment to Optionee of any duties inconsistent with the position in the Company that Optionee held immediately prior to the consummation of the tender offer pursuant to the Merger Agreement (the "Offer"), or a significant adverse alteration in the nature or status of Optionee's responsibilities or the conditions of Optionee's employment from those in effect immediately prior to the consummation of the Offer; provided, however, that any change in reporting obligations which is reasonably required to conform to changes in the Company's management structure following the consummation of the Offer shall not be deemed a Constructive Termination for purposes of this clause (a); (b) the Company's reduction of Optionee's annual base salary as in effect immediately prior to the consummation of the Offer, except for across-the-board salary reductions similarly affecting all management personnel of the Company and all management personnel of any person (including, without limitation, Safeway or any other corporation, partnership, limited liability company, joint venture, government agency or instrumentality or any other entity) in control of the Company; (c) the requirement that Optionee be based at a location more than 50 miles from the Company's office or store, as applicable, at which Optionee was principally employed immediately prior to the consummation of the Offer, except for required travel on the Company's business to an extent substantially consistent with Optionee's business travel immediately prior to the consummation of the Offer; (d) the Company's failure to pay Optionee any portion of Optionee's current compensation within seven (7) days of the date such compensation is due; (e) the Company's failure to continue in effect any material compensation or benefit plan in which Optionee participates immediately prior to the consummation of the Offer, other than any stock options or other equity based compensation plan, unless an equitable arrangement has been made with respect to such plan, or the Company's failure to continue Optionee's participation therein (or in any substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of Optionee's participation relative to other participants, as existed immediately prior to the consummation of the Offer; or (f) the Company's failure to continue to provide Optionee with benefits substantially similar to those enjoyed by Optionee under any of the Company's life insurance, medical, health and accident, or disability plans in which Optionee was participating immediately prior to the consummation of the Offer, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits, or the failure by the Company to provide Optionee with the number of paid vacation days to which Optionee is entitled in accordance with the Company's vacation policy for Optionee as in effect immediately prior to the consummation of the Offer. 3 2. As of the Effective Time all unexercised Options will be assumed by Safeway and converted automatically into options to purchase shares of Safeway Stock (each, a "Safeway Option") in an amount and at an exercise price determined as follows: (i) the number of shares of Safeway Stock to be subject to the Safeway Option shall be equal to the product of (A) the number of shares of Common Stock remaining subject to the Option immediately prior to the Effective Time multiplied by (B) the Conversion Ratio (as defined below), provided that any fractional shares of Safeway Stock resulting from such multiplication shall be rounded down to the nearest share; and (ii) the exercise price per share of Safeway Stock under the Safeway Option shall be equal to the exercise price per share of Common Stock under the applicable Option Agreement divided by the Conversion Ratio, provided that such exercise price shall be rounded down to the nearest cent. The "Conversion Ratio" shall be the quotient obtained by dividing $49.00 by the average of the closing prices of the Safeway Stock on the New York Stock Exchange as reported on the New York Stock Exchange Composite Transaction Tape for the 15 trading days randomly selected by lot out of the 35 trading days ending on the second trading day preceding the Effective Time. [3. The Optionee hereby waives the 30 day notice provision regarding the conversion of the Option following the Merger contained in Section 8 of the Option Agreements issued under the Company's Restated 1995 Stock Option Plan.] 4. All references to the Company in the Option Agreements shall be deemed, as appropriate, to include Safeway after the Effective Time. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. DOMINICK'S SUPERMARKETS, INC. Date:_____________________________ By:_________________________________ OPTIONEE Date:_____________________________ ____________________________________ EX-5.1 3 OPINION OF MICHAEL C. ROSS, ESQ. 1 EXHIBIT 5.1 November 19, 1998 Safeway Inc. 5918 Stoneridge Mall Road Pleasanton, CA 94588-3229 Re: Safeway Inc. Common Stock, par value $0.01 per share Ladies and Gentlemen: At your request, I have examined the Registration Statement on Form S-8 (the "Registration Statement") which Safeway Inc. (the "Company") intends to file with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of 923,016 shares of Common Stock, par value $0.01 per share (the "Shares"), in connection with the 1995 Amended and Restated Stock Option Plan of Dominick's Supermarkets, Inc. and the 1996 Equity Participation Plan of Dominick's Supermarkets. Inc. (collectively, the "Plans"). I am familiar with the proceedings undertaken in connection with the authorization, issuance and sale of the Shares. Additionally, I have examined such questions of law and fact as I have considered necessary or appropriate for purposes of this opinion. Based on the foregoing, I am of the opinion that the Shares to be issued under the Plans have been duly authorized, and upon issuance of Shares under the terms of the Plans 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 consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to me contained under the heading "Interests of Named Experts and Counsel" therein. Very truly yours, /s/ Michael C. Ross ------------------------------------ Michael C. Ross, Esq. General Counsel EX-23.1 4 CONSENT OF INDEPENDENT AUDITORS 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Registration Statement of Safeway Inc. on Form S-8 of our report dated February 27, 1998, incorporated by reference in the Annual Report on Form 10-K of Safeway Inc. for the year ended January 3, 1998. DELOITTE & TOUCHE LLP San Francisco, California November 13, 1998 -----END PRIVACY-ENHANCED MESSAGE-----