This excerpt taken from the SWY DEF 14A filed Apr 12, 2005.
STOCKHOLDER PROPOSAL REGARDING SALE OF SAFEWAY
Mr. Nick Rossi, P.O. Box 249, Boonville, California 95415, who owns 200 shares of Common Stock, has given notice that he intends to present for action at the Annual Meeting the following proposal:
The shareholders of Safeway request the board of directors arrange for the sale of Safeway to the highest bidder.
The proponent believes that Safeway has been grossly mismanaged and that management should be replaced. The proponent believes that management will not replace themselves. The proponent believes that management will have to be replaced by the shareholders.
The auction could be for cash or stock or a combination of both. The auction could include buyers for different parts of the company.
The Board of Directors recommends a vote AGAINST this proposal for the following reasons:
The Board agrees that its primary obligation is to maximize long-term shareholder value and will continue to evaluate and pursue the strategies it believes will best achieve that objective. The Board does not believe, however, that the proposal presents a viable alternative or that it is in the best interests of the Company or its stockholders. In fact, the Board believes that carrying out this proposal would not only fail to maximize but could even erode stockholder value. Even though the proposal is non-binding, its approval could harm the Companys relationships with employees, suppliers and business partners by sending the message that certain of the Company stockholders wish to sell the Company to the highest bidder. Third parties could become concerned about future prospects of the Company, which in turn could negatively impact the Companys existing operations and would compromise the Companys ability to capitalize on opportunities for growing the business and increasing profits.
The Company has made significant changes in its strategy and focus during the past two years. We expect to realize significant value from these changes over the next several years. In addition, the Board has a fiduciary duty to make decisions in a manner that it believes in good faith, after proper investigation, to be in the best interest of Safeway and its stockholders, including any sale or other strategic transaction involving the Company. In this regard, the Board does not believe that a forced sale of the Company, as advocated by the proposal, is the way to achieve maximum value for the stockholders. The Board has never foreclosed the possibility of any
strategic transaction that is in the best interest of Safeway and its stockholders and regularly reviews any and all initiatives that could be implemented to maximize value for its stockholders. Safeway maintains relationships with nationally recognized investment banking firms and receives their advice on financial and strategic matters from time to time. Safeway is fully committed to enhancing stockholder value and continuing to undertake initiatives to achieve that objective.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL, and your Proxy will be so voted unless you specify otherwise.