Vons Companies Inc – ‘DEF 14A’ for 5/8/96

As of:  Thursday, 3/28/96   ·   For:  5/8/96   ·   Accession #:  898430-96-1023   ·   File #:  1-08452

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Definitive Proxy Solicitation Material   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Materials                            45    193K 

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DEF 14A
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SCHEDULE 14A INFORMATION  

Proxy Statement Pursuant to Section 14(a) of the Securities 
Exchange Act of 1934 (Amendment No.  )  

Filed by the Registrant [X]                                                     

Filed by a Party other than the Registrant [_]                                  

Check the appropriate box:                                                      

[_]  Preliminary Proxy Statement        [_]  Confidential, for Use of the       
                                          Commission Only (as permitted by
                           Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement                                                 

[_]  Definitive Additional Materials                                            

[_]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

THE VONS COMPANIES, INC.  
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)  

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)  

Payment of Filing Fee (Check the appropriate box):                              

[X]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)       
or Item 22(a)(2) of Schedule 14A.                                     

[_]  $500 per each party to the controversy pursuant to Exchange Act Rule       
14a-6(i)(3).                                                          

[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.   

(1) Title of each class of securities to which transaction applies:   

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(2) Aggregate number of securities to which transaction applies:      

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(3) Per unit price or other underlying value of transaction computed  
   pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:                  

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(5) Total fee paid:                                                   

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[_]  Fee paid previously with preliminary materials.                            

[_]  Check box if any part of the fee is offset as provided by Exchange         
  Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
     was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.           

(1) Amount Previously Paid:                                           

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(2) Form, Schedule or Registration Statement No.:                     

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(3) Filing Party:                                                     

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(4) Date Filed:                                                       

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Notes:                                                                          

DEF 14A
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[LOGO OF THE VONS COMPANIES, INC.]  

----------------  

NOTICE OF ANNUAL MEETING  
OF SHAREHOLDERS 
MAY 8, 1996 

----------------  

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The Vons  
Companies, Inc. ("Vons") will be held at The Vons Companies, Inc. headquarters  
building, 618 Michillinda Avenue, Arcadia, California 91007, on Wednesday, May  
8, 1996, at 9:00 a.m., Pacific Daylight Savings Time, for the following         
purposes:                                                                       

1. To elect four directors;                                             

2. To consider and act upon proposals to amend The Vons Companies, Inc. 
1990 Stock Option and Restricted Stock Plan (the "Plan"): (i) to increase   
the authorized number of shares to be issued thereunder by an additional    
2,000,000 shares and (ii) to implement a per employee share limitation of   
500,000 shares per year; and                                                

3. To transact such other business as may be properly brought before the
meeting or any adjournments or postponement thereof.                        

Shareholders of record at the close of business on March 11, 1996 will be   
entitled to vote at said meeting or any adjournments or postponement thereof.   

The Board of Directors urges each shareholder to read carefully the enclosed
proxy statement.                                                                

Shareholders are requested to vote for their choices and to date, sign and  
return the enclosed proxy card in the enclosed envelope, to which no postage    
need be affixed if mailed in the United States. If you plan to attend the       
meeting and wish to vote your shares personally, you may do so at any time      
before the proxy is voted.                                                      

All shareholders are cordially invited to attend the meeting.               

                           /s/ Terrence J. Wallock

                        Terrence J. Wallock,
             Secretary

March 28, 1996                                                                  

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[LOGO OF THE VONS COMPANIES, INC.]  

----------------  

PROXY STATEMENT 
for 
ANNUAL MEETING OF SHAREHOLDERS  
MAY 8, 1996 

----------------  

INTRODUCTION  

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of The Vons Companies, Inc., a Michigan corporation ("Vons"  
or the "Company"), of proxies to be used at the Annual Meeting of Shareholders  
(the "Meeting") to be held at The Vons Companies, Inc. headquarters building,   
618 Michillinda Avenue, Arcadia, California 91007, on Wednesday, May 8, 1996,   
at 9:00 a.m., Pacific Daylight Savings Time, and at any adjournments or         
postponement thereof, for the purpose of (i) electing four directors and (ii)   
considering and acting upon proposals to amend The Vons Companies, Inc. 1990    
Stock Option and Restricted Stock Plan (the "Plan") to increase the authorized  
shares to be issued thereunder by 2,000,000 and to implement a per employee     
share limitation of 500,000 per year. A form of proxy is enclosed for use at    
the Meeting.                                                                    

Unless contrary instructions are indicated on the proxy, all shares         
represented by valid proxies received pursuant to this solicitation (and not    
revoked before they are voted) will be voted for all the directors named        
below. As for any other business which may properly come before the Meeting     
and be submitted to a vote of shareholders, proxies received by the Board of    
Directors will be voted in accordance with the best judgment of the designated  
proxy holders.                                                                  

A proxy may be revoked at any time before it is exercised by giving written 
notice of revocation to the Secretary of Vons or by submitting prior to the     
time of the Meeting a properly executed proxy bearing a later date.             
Shareholders who have executed and returned a proxy and who then attend the     
Meeting and desire to vote in person are requested to so notify the Secretary   
prior to the time of the Meeting.                                               

The mailing address of Vons is 618 Michillinda Avenue, Arcadia, California  
91007, and its telephone number is 818/821-7000. The approximate date when      
this Proxy Statement and form of proxy are being first sent to shareholders is  
March 28, 1996.                                                                 

GENERAL INFORMATION 

VOTING SECURITIES AND SOLICITATION OF PROXIES                                   

The close of business on March 11, 1996, has been fixed by the Board of     
Directors as the Record Date for the determination of shareholders entitled to  
notice of and to vote at the Meeting or at any adjournments or postponement     
thereof.                                                                        

Shares of Vons common stock, of which 43,649,239 shares were outstanding as 
of the Record Date, are the only voting securities of Vons. Each shareholder    
of record at the close of business on the Record Date is entitled to one vote   
for each share of Vons common stock then held on each matter to come before     
the Meeting, including the election of directors.                               

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Vons will bear the cost of solicitation of proxies. In addition to the use  
of mail, proxies may be solicited by personal interview, telephone or           
telegraph by officers, directors and other employees of Vons. Vons will also    
request persons, firms and corporations holding shares in their names, or in    
the names of their nominees which are beneficially owned by others, to send or  
cause to be sent proxy material to, and obtain proxies from, such beneficial    
owners and will reimburse such holders for their reasonable expenses in so      
doing. In addition, Vons has retained Georgeson & Company Inc. ("Georgeson")    
to assist in the solicitation of proxies. Georgeson may solicit proxies by      
mail, telephone, telegraph and personal solicitation, and will request          
brokerage houses and other nominees, fiduciaries and custodians nominally       
holding shares of record of Vons common stock to forward proxy soliciting       
material to the beneficial owners of such shares. For these services, Vons      
will pay Georgeson a fee estimated not to exceed $6,500, plus reimbursement of  
expenses.                                                                       

BUSINESS HISTORY                                                                

Vons' grocery business was founded in 1906. From 1969 until December 1985,  
it was owned, along with certain other merchandising businesses, by Household   
International, Inc. In 1985 these merchandising businesses were acquired in a   
leveraged buy-out by a newly formed corporation, which kept the grocery         
business and sold all of the other merchandising businesses. In 1987 the newly  
formed corporation was merged with and into Allied Supermarkets, Inc., a        
Michigan corporation, (the "Allied Merger") and the surviving corporation was   
renamed The Vons Companies, Inc., a Michigan corporation. On the same date as   
the Allied Merger, substantially all of the business previously operated by     
Allied was sold to a company organized by the former management of Allied,      
leaving the Company with operations located only in Southern California and     
Clark County, Nevada, as they existed prior to the Allied Merger.               

In August 1988, Vons purchased substantially all of the operations of       
Safeway Inc. ("Safeway") in Southern California (the "Safeway Acquisition").    
As a result of the Safeway Acquisition and other purchases of Vons common       
stock, Vons' largest shareholder, owning approximately 35% of the outstanding   
shares of Vons common stock on the Record Date, is Safeway Southern             
California, Inc., an indirect subsidiary of Safeway, which is an affiliate of   
Kohlberg Kravis Roberts & Co. ("KKR").                                          

ELECTION OF DIRECTORS 

The Board of Directors of Vons is currently comprised of twelve directors   
divided into three classes of four directors each serving staggered terms,      
normally of three years. The term of office of one class of directors expires   
each year, and, at each annual meeting, the successors to the directors of the  
class whose term is expiring in that year are elected to hold office for a      
term of three years and until their successors are elected and qualified. In    
the event that a nominee for director should become unavailable for election,   
it is intended that the shares represented by proxies voted in favor of the     
nominee will be voted for such substitute nominee as may be named by the Board  
of Directors.                                                                   

Under Article III, Section 2, of Vons' By-Laws, nominations of persons for  
election to the Board, other than those made by or at the direction of the      
Board, may be made at the Meeting only if pursuant to a timely notice           
delivered or mailed to the Secretary of Vons. To be timely, a shareholder's     
notice must be delivered to or mailed and received at Vons' principal           
executive offices not less than 50, nor more than 75, days prior to the         
Meeting, unless less than 65 days' notice or prior public disclosure of the     
date of the Meeting is given or made to shareholders, in which case notice of   
a nomination must be received not later than the close of business on the 15th  
day following the day on which notice of the date of the Meeting was mailed to  
shareholders or public disclosure of the Meeting date was made, whichever is    
earlier. A notice of nomination must set forth each nominee's name, age,        
business and residential addresses, principal occupation or employment,         
beneficial ownership of Vons capital stock and any other information relating   
to the nominee that is required to be disclosed in solicitations for proxies    
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as        
amended (the "Exchange Act"). The notice must additionally set forth the name   
and record address of the shareholder making the nomination, as well as such    
shareholder's beneficial ownership of Vons capital stock. Vons may              

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require any proposed nominee to furnish such other information as may           
reasonably be required by Vons to determine the eligibility of such proposed    
nominee. At the Meeting, nominations by or at the direction of the Board will   
be made on its behalf by Lawrence A. Del Santo, the Chairman of the Board, or   
by such other person or persons as the Board may direct.                        

The following table sets forth certain information about the directors      
standing for election at the Meeting:                                           

NOMINEES FOR ELECTION AS DIRECTOR 

                                                                [Download Table]

                                                                     YEAR    
                                                         DIRECTOR  NEW TERM  
                                                     AGE  SINCE   WILL EXPIRE
                                                     --- -------- -----------
                                                                             
William S. Davila...................................  64   1989      1999    
James H. Greene, Jr.................................  45   1993      1999    
John M. Lillie......................................  59   1994      1999    
Charles E. Rickershauser, Jr........................  67   1991      1999    

Mr. Davila served as President of Vons and its predecessor from 1984 until  
his retirement in March 1992, after which he became President Emeritus. From    
July 1987 to February 1990, he was President and Chief Operating Officer of     
Vons. Mr. Davila also serves on the Boards of Directors of Wells Fargo Bank,    
Pacific Gas and Electric Company and Geo. A. Hormel & Co.                       

Mr. Greene has been an executive of KKR for more than the last five years   
and a General Partner of KKR since January 1993. Affiliates of KKR may be       
deemed to be controlling persons of Safeway. Mr. Greene is also a director of   
Safeway, Bruno's Inc., Owens Illinois, Inc., Owens-Illinois Group, Inc., The    
Stop & Shop Companies, Inc. and Union Texas Petroleum Holdings, Inc. He is one  
of four representatives of Safeway on Vons' Board of Directors. See "Principal  
and Management Shareholders."                                                   

Mr. Lillie had been President of American President Companies, Ltd. since   
August 1990, serving initially as Chief Operating Officer and, commencing       
January 1992, as Chief Executive Officer, until his resignation in October      
1995. From May 1989 to August 1990 Mr. Lillie was General Partner of Sequoia    
Associates, a private investment firm. Prior to that Mr. Lillie had been        
Chairman and Chief Executive Officer of Lucky Stores, Inc. since 1986. Mr.      
Lillie also serves on the Board of The Gap, Inc.                                

Mr. Rickershauser served as Chairman of the Board and Chief Executive       
Officer of the Pacific Stock Exchange Incorporated from January 1980 to March   
1986, at which time he joined the law firm of Fried, Frank, Harris, Shriver &   
Jacobson of Los Angeles as a partner. In November 1990, Mr. Rickershauser       
retired. He now serves as Chairman of the Board and Chief Executive Officer of  
PS Group, Inc., positions he has held since April 1991 and September 1994,      
respectively. In addition to PS Group, Inc., Mr. Rickershauser also serves on   
the Boards of Directors of City National Corporation and its subsidiary, City   
National Bank, and Lee Enterprises, Inc.                                        

The following table sets forth certain information about the continuing     
directors of Vons:                                                              

DIRECTORS CONTINUING IN OFFICE  

                                                                [Download Table]

                                                                     YEAR    
                                                         DIRECTOR  NEW TERM  
                                                     AGE  SINCE   WILL EXPIRE
                                                     --- -------- -----------
                                                                             
Steven A. Burd......................................  46   1993      1997    
Lawrence A. Del Santo...............................  62   1994      1998    
Fritz L. Duda.......................................  58   1987      1997    
Richard E. Goodspeed................................  59   1996      1997    
Robert I. MacDonnell................................  58   1988      1998    
Peter A. Magowan....................................  53   1988      1998    
Roger E. Stangeland.................................  66   1987      1997    
William Y. Tauscher.................................  46   1987      1998    

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Mr. Burd has been President of Safeway since October 1992, serving initially
as Chief Operating Officer and, commencing May 1993, as Chief Executive         
Officer. From 1987 to October 1992, Mr. Burd was a principal of Burd &          
Associates, a management consulting firm. Mr. Burd is also a director of        
Safeway and is one of the four representatives of Safeway on Vons' Board of     
Directors. See "Principal and Management Shareholders."                         

Mr. Del Santo has been Chairman of Vons since May 1995 and Chief Executive  
Officer of Vons since joining the Company in April 1994. Prior to joining the   
Company, he served as Senior Executive Vice President and Chief Operating       
Officer-Food of American Stores Company ("American") from March 1993 to April   
1994, and prior to that as Chairman of Lucky Stores, Inc., a subsidiary of      
American, ("Lucky") from 1989 to 1993.                                          

Mr. Duda has been President of the Fritz Duda Company, a real estate        
investment, building and development firm, for more than the past five years.   

Mr. Goodspeed has been President and Chief Operating Officer of Vons since  
joining the Company in April 1994. Prior to that time, he was Executive Vice    
President-Food of American and President and Chief Operating Officer of Lucky,  
a position he held since September 1988.                                        

Mr. MacDonnell has been a General Partner of KKR since 1982. Affiliates of  
KKR may be deemed to be controlling persons of Safeway. Mr. MacDonnell is also  
a director of Safeway, Owens-Illinois, Inc., Owens-Illinois Group, Inc., and    
AutoZone, Inc. He is one of four representatives of Safeway on Vons' Board of   
Directors. See "Principal and Management Shareholders."                         

Mr. Magowan is Chairman of the Board of Safeway and President and Managing  
General Partner of the San Francisco Giants. Mr. Magowan was Chief Executive    
Officer of Safeway from 1980 to May 1993. He served as President of Safeway     
from March 1988 to October 1992. He also serves on the Board of Directors of    
Chrysler Corporation and Caterpillar, Inc. He is one of four representatives    
of Safeway on Vons' Board of Directors. See "Principal and Management           
Shareholders."                                                                  

Mr. Stangeland has been a director of Vons for more than the past five years
and served as Chief Executive Officer of Vons from 1987 until April 1994. Mr.   
Stangeland also serves as Chairman of the Board of Grand Union Company.         

Mr. Tauscher has been Chairman, Chief Executive Officer and President of    
Vanstar, Inc. for more than the past five years.                                

MEETINGS OF BOARD OF DIRECTORS AND BOARD COMMITTEES                             

During the 1995 fiscal year, Vons' Board of Directors held five meetings.   
Vons' Board has a standing Executive Committee, Audit Committee and             
Compensation Committee. The Executive Committee, composed of Mr. Del Santo,     
Mr. Greene, Mr. MacDonnell and Mr. Stangeland, did not meet in 1995. Its        
functions are to exercise such powers as the full Board of Directors may        
delegate to the Executive Committee from time to time. The Audit Committee,     
currently composed of Mr. Duda, Chairman, Mr. Lillie and Mr. Rickershauser,     
met two times during the fiscal year. Its functions are (1) to meet             
periodically with Vons' management and independent public accountants to make   
inquiries regarding the manner in which the responsibilities of each are being  
discharged and to report thereon to the Board; (2) to recommend for the         
approval of Vons' Board of Directors the annual appointment of independent      
public accountants; and (3) to review with the independent public accountants   
the scope of audit and non-audit assignments, the accounting principles being   
applied by Vons, the scope of internal financial and auditing procedures and    
the adequacy of internal controls. The Compensation Committee, currently        
composed of Mr. Burd, Chairman, Mr. Magowan, and Mr. Tauscher, met two times    
during the fiscal year. Its functions have been (1) to review Vons' general     
compensation strategy; (2) to establish the salaries of, and review and         
administer the benefit and compensation programs for, Vons' executive           
officers; (3) to review and administer the Plan; and (4) to approve any         
contractual obligations relating to employment of officers. For additional      
information with respect to the Compensation Committee, see "Executive          
Compensation--Compensation Committee Interlocks and Insider Participation."     

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Each director, except Messrs. Lillie, Magowan and Tauscher, attended 75% or 
more of the total number of meetings of the Board or of the Committees, if      
any, on which such member served that were held during the fiscal year ended    
December 31, 1995.                                                              

AMENDMENTS TO THE VONS COMPANIES, INC. 1990 STOCK OPTION  
AND RESTRICTED STOCK PLAN 

On January 24, 1990, the Board of Directors adopted the Plan, which became  
effective when approved by shareholder vote at the Annual Meeting of            
Shareholders held on May 17, 1990, and will terminate on January 23, 2000. In   
general, the Plan authorizes Vons (i) to grant incentive stock options (as      
defined in Section 422A of the Internal Revenue Code) and/or other ("non-       
qualified") options to purchase shares of its common stock to officers and      
employees, and (ii) to issue restricted shares of common stock to its officers  
and employees.                                                                  

A maximum of 4,000,000 shares of Vons common stock is currently authorized  
to be issued under the Plan as restricted stock or upon exercise of options     
granted under the Plan. As of March 11, 1996, 972,407 shares of the Company's   
common stock remained issuable under the Plan, and non-qualified options to     
purchase 2,694,446 shares had been granted and had not yet been exercised. No   
incentive stock options or restricted stock have yet been granted.              
Approximately 600 employees are eligible to receive grants under the Plan.      

Shares covered by options which terminate without exercise and shares       
forfeited to Vons pursuant to the restrictions upon the shares are available    
for issuance upon the grant of additional options or as restricted stock. The   
Plan provides for appropriate adjustment in the number and kind of shares for   
which options may be granted and the number and kind of shares of restricted    
stock which may be issued pursuant to the Plan in the event of a stock split,   
stock dividend, reorganization or other specified changes in the                
capitalization of Vons.                                                         

AMENDMENT ONE: INCREASE THE NUMBER OF AUTHORIZED SHARES BY 2,000,000            

On February 21, 1996, the Board of Directors, subject to shareholder        
ratification, authorized an amendment to the Plan to increase the maximum       
number of shares which may be issued as restricted stock or upon exercise of    
options under the Plan by 2,000,000 shares. The Board of Directors believes     
that the authorization of the additional shares under the Plan is desirable     
and will permit the Company to continue to retain experienced and capable       
persons who can make significant contributions to the future growth and         
success of Vons. All officers (including officers who are also directors) and   
employees of Vons and any parent or subsidiary corporation are eligible to      
receive options or restricted stock under the Plan.                             

AMENDMENT TWO: LIMIT THE NUMBER OF OPTIONS GRANTED TO AN INDIVIDUAL EMPLOYEE    
TO 500,000 PER YEAR                                                             

On February 21, 1996, the Board of Directors, subject to shareholder        
ratification, also authorized an amendment to the Plan which would limit the    
amount of stock options which could be granted to any employee to 500,000 per   
year. The purpose of this proposed amendment is to assure that options granted  
under the Plan will qualify as "performance-based compensation" within the      
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended      
(the "Code"). Currently there is no limit on the aggregate number of options    
that may be granted to any individual employee under the Plan in a year. The    
amendment providing the aforesaid limitation would bring the Plan into          
compliance with Section 162(m).                                                 

PLAN DESCRIPTION                                                                

The following summary of the Plan is qualified in its entirety by the full  
text of the Plan, a copy of which may be obtained by shareholders of the        
Company upon request directed to: Mary McAboy, Vice President, Corporate        
Communications, The Vons Companies, Inc., 618 Michillinda Avenue, Arcadia,      
California 91007. For information regarding options granted to certain          
officers with provisions that vary in certain respects from the following       
description, see "Executive Compensation--Employment Arrangements, Retirement   
Agreement and Change in Control Arrangements" below.                            

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OPTIONS                                                                         

Option Price and Consideration for Shares Purchased. The Compensation       
Committee of the Board of Directors ("Compensation Committee") has discretion   
to set the price of non-qualified options subject to any applicable regulatory  
requirements. The purchase price of each share of common stock covered by an    
incentive stock option may not be less than 100% of the fair market value of    
Vons common stock on the date of grant of the incentive stock option or 110%    
of the fair market value in the case of an incentive stock option granted to a  
person who owns, directly or indirectly, more than 10% of the total combined    
voting power of all classes of stock of Vons. For purposes of the Plan, fair    
market value of a share of Vons common stock is the average closing price for   
the 10 trading days prior to the exercise or grant date of a share of Vons      
common stock on the principal exchange on which shares of Vons common stock     
are then trading. The Plan provides for alternative pricing formulas in the     
event the stock is not listed on a principal exchange at the time. The          
aggregate fair market value (determined as of the time the option is granted)   
of the shares of Vons common stock with respect to which incentive stock        
options are exercisable for the first time by an option holder during any       
calendar year may not exceed $100,000.                                          

In consideration of the granting of an option, the option holder must agree 
to remain in the employ of Vons for one year after the date the option is       
granted; provided, however, that nothing in the Plan or any Stock Option        
Agreement confers, or will confer, upon any officer or employee the right to    
continue to be employed by Vons or any of its subsidiaries or affects Vons'     
right to terminate the employment of any officer or employee at any time.       

Common stock purchased upon the exercise of options may be paid for by the  
option holder either (i) in cash or by check; (ii) with the consent of the      
Compensation Committee, by delivery of a full recourse promissory note bearing  
interest and payable upon terms prescribed by the Compensation Committee;       
(iii) with the consent of the Compensation Committee, with mature shares of     
Vons common stock owned by the option holder with a fair market value on the    
date of delivery equal to the aggregate purchase price of the shares with       
respect to which the option or portion is thereby exercised; or (iv) in any     
combination of the consideration described in the foregoing clauses (i), (ii)   
and (iii).                                                                      

Terms of Exercise and Expiration of Options. Depending upon the particular  
option grant, options covering either 15% or 25% of the shares of Vons common   
stock which have been granted become exercisable one year from the date of      
grant. If the option holder is still employed by Vons or its successor or       
affiliate, options under the Plan covering an additional 15% or 25%,            
respectively, of the shares of Vons common stock included in each grant become  
exercisable on each successive anniversary after the date of such grant until   
100% of the options included in such grant are exercisable. No option may be    
exercised after the expiration of a period of ten years from the date of grant  
for incentive stock options and ten years and one day for non-qualified         
options. Incentive stock options granted to persons then owning, directly or    
indirectly, more than 10% of the total combined voting power of all classes of  
stock of Vons may not be exercised after the expiration of a period of five     
years from the date of grant. The Compensation Committee, may, however, vary    
the vesting and expiration of options granted under the Plan, except that for   
incentive stock options: (i) an option will expire not later than three months  
after the termination of the employment of the option holder, unless such       
termination is the result of death or disability, (ii) in the event of the      
death of an option holder while an employee of Vons, the option will expire     
twelve months after the date of the option holder's death, and (iii) in the     
event an option holder becomes disabled and as a result ceases to be employed   
by Vons, the option will terminate twelve months after the date of termination  
of employment.                                                                  

Vesting Upon Change of Control. Upon a "change of control" of Vons (defined 
as a sale or other transfer of 50% or more of Vons' voting stock, or a merger   
or other reorganization of Vons in which the shareholders of the Company prior  
to such transaction beneficially own less than 50% of the voting stock of the   
Company or a successor immediately after the transaction, or a sale of          
substantially all of Vons' assets or a transaction resulting in the delisting   
of Vons stock from the New York Stock Exchange) and subject to a surviving      
corporation assuming or replacing the options, all options granted may be       
exercised.                                                                      

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RESTRICTED STOCK                                                                

Consideration for Restricted Stock Issued. Unless otherwise required by the 
Compensation Committee in specific instances, no cash payment is required to    
be made by the holder of restricted stock in connection with the issuance of    
restricted stock by Vons. As partial consideration for the issuance of the      
restricted stock, the holder of restricted stock must agree to remain in the    
employ of Vons for a period of at least one year after the restricted stock is  
issued; provided, however, that nothing in the Plan or in any individual        
restricted stock agreement confers, or will confer, upon any officer or         
employee the right to continue to be employed by Vons or any of its             
subsidiaries or affects Vons right to terminate the employment of any officer   
or employee at any time. If the Compensation Committee requires a cash payment  
for the restricted stock, the amount and terms of such payment will be set      
forth in the individual restricted stock agreement.                             

Restrictions. All shares of restricted stock issued under the Plan          
(including any shares received by holders thereof as a result of stock          
dividends, stock splits or any other forms of recapitalization) are subject to  
the restrictions imposed by the Compensation Committee in each individual       
restricted stock agreement. The Compensation Committee may, by a resolution     
adopted after the restricted stock is issued, remove any or all of the          
restrictions imposed by the terms of the restricted stock agreement. All        
restrictions imposed under the Plan shall expire within ten years after the     
date of issuance of the restricted stock. Immediately upon a termination of     
employment of the holder of restricted stock by Vons, the restricted stock      
then subject to restrictions under a restricted stock agreement will be         
forfeited by the holder back to Vons. No forfeiture will occur, however, in     
the event of a change of control of Vons, or of a termination of employment     
because of the employee's normal retirement, death or total disability or upon  
early retirement with the consent of the Board of Directors. The Secretary of   
Vons, or other escrow holder appointed by the Compensation Committee, will      
retain physical custody of the stock certificates representing restricted       
stock issued under the Plan until all the restrictions imposed under the        
individual restricted stock agreement expire or are removed by the              
Compensation Committee. All certificates representing shares of restricted      
stock issued under the Plan will contain a legend stating that the shares are   
subject to restrictions under a restricted stock agreement.                     

Rights of Restricted Stock Holders. Upon issuance of the shares of          
restricted stock and delivery of them to the Secretary of Vons, or other        
escrow holder appointed by the Compensation Committee, the holder of the        
restricted stock will have all rights of a shareholder (subject to the          
restrictions in the individual restricted stock agreement), including the       
right to vote the shares and to receive all dividends and other distributions   
paid or made with respect to the shares.                                        

Vesting Upon Change of Control. Upon a "change of control" of Vons as       
defined in the Plan, subject to the payment of any cash consideration then      
due, all issued restricted shares shall vest immediately free of all            
restrictions, forfeiture provisions or legends.                                 

NONTRANSFERABILITY OF OPTIONS AND RESTRICTED STOCK                              

Options and restricted stock are not transferable by the holder thereof     
other than by will or the laws of descent and distribution.                     

ADMINISTRATION                                                                  

The Plan is administered by the Compensation Committee of the Board of      
Directors. The Compensation Committee has full power to interpret the Plan and  
to establish and amend rules for its administration. The Compensation           
Committee is also authorized to determine who from the eligible class of        
persons shall be granted options or issued restricted stock and the terms and   
provisions of the options granted and restricted stock issued.                  

AMENDMENT AND TERMINATION OF THE PLAN                                           

The Board of Directors or the Compensation Committee may at any time amend  
or terminate the Plan, although no amendment or termination may alter or        
impair any rights or obligations under previously issued options or restricted  
stock without the consent of the holder of the option or the restricted stock.  
Any amendment                                                                   

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to the Plan which would increase the aggregate number of shares which may be    
issued under the Plan, modify the requirements of eligibility for               
participation in the Plan, reduce the minimum price for incentive options       
below 100% of the fair market value, or extend the period during which options  
may be granted or restricted stock may be issued must be approved by a vote of  
the holders of a majority of Vons voting stock present and entitled to vote at  
a meeting.                                                                      

MARKET VALUE OF COMMON STOCK                                                    

As of March 11, 1996, the market value of a share of Vons common stock,     
determined in accordance with the formula set forth under the heading           
"Options-Option Price and Consideration for Shares Purchased," was $29.67 per   
share.                                                                          

FEDERAL INCOME TAX CONSEQUENCES                                                 

The tax consequences of the Plan under the Code are summarized in the       
following discussion, which deals with the general federal income tax           
principles applicable to the Plan and is intended for general information       
only. State and local income taxes are not discussed and may vary from          
locality to locality.                                                           

Non-Qualified Stock Options. For federal income tax purposes, the recipient 
of non-qualified stock options granted under the Plan will not have taxable     
income upon the grant of the option, nor will Vons then be entitled to any      
deduction. Generally, upon exercise of non-qualified stock options the          
optionee will realize ordinary income, and Vons will be entitled to a           
deduction in an amount equal to the difference between the option exercise      
price and the fair market value of the stock at the date of exercise. Vons      
will generally be required to withhold taxes on the income recognized by the    
optionee. An optionee's basis for the stock for purposes of determining his     
gain or loss on his subsequent disposition of the shares generally will be the  
fair market value of the stock on the date of exercise of the non-qualified     
stock option.                                                                   

The tax consequences resulting from the exercise of a non-qualified stock   
option through delivery of already-owned shares of common stock are not         
completely certain. In published rulings, the Internal Revenue Service has      
taken the position that, to the extent an equivalent value of shares is         
acquired, the option holder will recognize no gain, and the option holder's     
basis in the shares acquired upon exercise will be equal to the option          
holder's basis in the surrendered shares. Any additional shares acquired upon   
such exercise are compensation to the option holder, taxable under the rules    
described above with the option holder's basis in these additional shares       
being their then fair market value.                                             

Incentive Stock Options. There is no taxable income to an employee when an  
incentive stock option is granted to him or her or when that option is          
exercised; however, the amount by which the fair market value of the shares at  
the time of exercise exceeds the option price will be an "item of tax           
preference" for the optionee. Gain realized by an optionee upon sale of stock   
issued on exercise of an incentive stock option is taxable at capital gains     
rates. No tax deduction is available to Vons, unless the optionee disposes of   
the shares within two years after the date of grant of the option or within     
one year of the date the shares were transferred to the optionee. In such       
events, the difference between the option exercise price and the lesser of the  
fair market value of the shares on the date of the option's exercise and the    
sales price of the shares will be taxed at ordinary income rates, and Vons      
will be entitled to a deduction to the extent the employee must recognize       
ordinary income. An incentive stock option exercised more than three months     
after an optionee's retirement from employment, other than by reason of death   
or disability, will be taxed as a non-qualified stock option, with the          
optionee deemed to have received income upon such exercise taxable at ordinary  
income rates. Vons will be entitled to a tax deduction equal to the ordinary    
income, if any, realized by the optionee.                                       

The tax consequences resulting from the exercise of an incentive stock      
option through delivery of already-owned shares of common stock are not         
completely certain. In published rulings and proposed regulations, the          
Internal Revenue Service has taken the position that generally (i) the option   
holder will recognize no gain upon a stock-for-stock exercise (provided the     
shares surrendered in the exercise are not disposed of within the one-year      

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or two-year periods described above, and subject to the discussion above);      
(ii) to the extent an equivalent number of shares is acquired, the option       
holder's basis in the shares acquired upon exercise will be equal to the        
option holder's basis in the surrendered shares; (iii) the option holder's      
basis in any additional shares acquired upon exercise will be zero; and (iv)    
any sale or other disposition of the acquired shares within the one-year or     
two-year periods described above will be viewed first as a disposition of the   
shares with the lowest basis.                                                   

Restricted Stock. Unless an election is made under Section 83(b) of the     
Code, an employee to whom restricted stock is issued will not have taxable      
income upon issuance and Vons will not then be entitled to a deduction.         
However, when restrictions on shares of restricted stock expire or upon other   
removal of the forfeiture restrictions in accordance with the Plan, the         
employee will realize ordinary income and Vons will be entitled to a deduction  
in an amount equal to the fair market value of the shares at the date such      
restrictions lapse, less the purchase price therefor. If an election is made    
under Section 83(b), the employee will realize ordinary income at the date of   
issuance equal to the difference between the fair market value of the shares    
at the date less any purchase price therefor, and Vons will be entitled to a    
deduction in the same amount. Generally, whether or not an election is made     
under Section 83(b), Vons will be required to withhold taxes on the income      
recognized by the holder. Gain or loss realized by the holder on the            
subsequent sale or disposition of the shares will normally be taxable as        
capital gain or loss and no further deduction will be allowed to Vons.          

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF 
THE AMENDMENTS TO THE 1990 STOCK OPTION AND RESTRICTED STOCK PLAN.              

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PRINCIPAL AND MANAGEMENT SHAREHOLDERS 

PRINCIPAL SHAREHOLDERS                                                          

Except as set forth below, the management of Vons is not aware of any       
beneficial holder of 5% or more of outstanding Vons common stock as of the      
Record Date.                                                                    

                                                                [Download Table]

                                                               AMOUNT           
                                                            BENEFICIALLY PERCENT
                                                              OWNED ON     OF   
                                                            RECORD DATE   CLASS 
                                                            ------------ -------
                                                                                
Safeway Southern California, Inc.(1).......................  15,126,000   34.7% 
 Fourth and Jackson Streets                                                     
 Oakland, California 94660                                                      
Fidelity Management and Research Corp......................   2,716,900   6.22% 
 82 Devonshire Street                                                           
 Boston, Massachusetts 02109                                                    

--------                                                                        
(1) Safeway Southern California, Inc. is an indirect wholly-owned subsidiary    
  of Safeway, approximately 50.4% of the outstanding stock of which is owned
by two limited partnerships, of which the sole general partner is KKR   
Associates, a New York limited partnership and an affiliate of KKR. KKR 
Associates, in its capacity as general partner, may be deemed to        
beneficially own such shares of common stock of Safeway. Messrs. Greene,
  MacDonnell, Saul A. Fox, Edward A. Gilhuly, Perry Golkin, Henry R. Kravis,
Michael W. Michelson, Paul E. Raether, Clifton S. Robbins, George R.    
  Roberts, Scott M. Stuart and Michael T. Tokarz are the general partners of
KKR Associates and, in such capacity, may be deemed to have beneficial  
ownership of any shares of common stock of Safeway beneficially owned by
KKR Associates, but disclaim any such beneficial ownership. Mr. Burd, a 
  director of Vons and President and Chief Executive Officer of Safeway, Mr.
Greene, a director of Vons and a general partner of KKR Associates, Mr. 
MacDonnell, a director of Vons and a general partner of KKR Associates, 
  and Mr. Magowan, a Vons director and Chairman of the Board of Safeway, all
disclaim beneficial ownership of Vons common stock owned by Safeway     
Southern California Inc. and Safeway.                                   

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MANAGEMENT SHAREHOLDERS                                                         

The following table sets forth as to each director, nominee and certain     
executive officers, individually, and all executive officers and directors as   
a group, the number of shares of Vons common stock beneficially owned by such   
person or group as of the Record Date.                                          

                                                                [Download Table]

                                                       AMOUNT AND NATURE OF     
                                                     BENEFICIAL OWNERSHIP(1)    
                                                  ------------------------------
                                                             CURRENTLY          
                                                  SHARES OF EXERCISABLE TOTAL AS
                                                   COMMON      STOCK    PERCENT 
NAME OF BENEFICIAL OWNER          CAPACITY          STOCK   OPTIONS(2)  OF CLASS
------------------------          --------        --------- ----------- --------
                                                                                
Steven A. Burd(3)........  Director                       0    15,846       *   
William S. Davila........  Director                 170,494    10,971       *   
Lawrence A. Del Santo....  Chairman and Chief        58,900   250,000       *   
                            Executive Officer                                   
Fritz L. Duda(4)(5)......  Director               1,035,506    23,412     2.42% 
Richard E. Goodspeed(4)..  Director, President       43,000   135,000       *   
                            and Chief Operating                                 
                            Officer                                             
James H. Greene, Jr.(3)..  Director                       0    14,502       *   
Phillip E. Hawkins.......  Senior Vice President          0    23,302       *   
Pamela K. Knous..........  Executive Vice             5,000    20,302       *   
                            President, Chief                                    
                            Financial Officer                                   
                            and Treasurer                                       
John M. Lillie(4)........  Director                   5,000     6,073       *   
Robert I. MacDonnell(3)..  Director                       0    23,068       *   
Peter A. Magowan(3)......  Director                       0    24,052       *   
Charles E. Rickershauser,                                                       
 Jr. ....................  Director                   5,000    11,053       *   
Roger E.                                                                        
 Stangeland(6)(7)(8).....  Director                 830,692   151,004     2.24% 
William Y. Tauscher......  Director                       0    11,779       *   
Terrence J. Wallock......  Executive Vice               541    35,426       *   
                            President, General                                  
                            Counsel and                                         
                            Secretary                                           
Directors and Executive                                                         
 Officers as a Group                                                            
 (19 persons)                                                                   
 (3)(4)(5)(6)(7)(8)(9)...                         2,163,214   803,314     6.67% 

--------                                                                        
* Less than 1%.                                                               
(1) Unless otherwise indicated, (a) beneficial ownership is direct, and (b)     
 the person indicated has sole voting and investment power over the shares
of common stock indicated.                                              
(2) Shares that may be acquired pursuant to options exercisable within 60 days  
of the Record Date. All expressions of percentage of shares held assume 
that the options of the particular person or group in question have been
exercised and no others.                                                
(3) Does not include 15,126,000 shares of Vons common stock presently owned by  
Safeway Southern California, Inc. and Safeway. See the immediately      
  preceding table for information regarding shares owned by Safeway Southern
  California, Inc. and Safeway. Mr. Burd, Mr. Greene, Mr. MacDonnell and Mr.
Magowan each disclaim beneficial ownership of the shares of Vons common 
stock owned by Safeway Southern California, Inc. and Safeway, which are 
not included in the above table.                                        
(4) Shares held in trust.                                                       
(5) Does not include 4,000 shares of Vons common stock held by Duda Children's  
Trust No. 3. Mr. Duda disclaims any beneficial ownership of such shares,
 inasmuch as they are administered by an independent trustee and he has no
shared or other voting power over them.                                 
(6) Does not include 96,435 shares of Vons common stock held by three           
children's trusts. Mr. Stangeland disclaims any beneficial ownership of 
such shares, inasmuch as they are administered by an independent trustee
and he has no shared or other voting power over them.                   

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(7) Includes 816,691 shares registered in the name of a corporation as to       
which Mr. Stangeland claims beneficial ownership.                       
(8) Includes 14,000 shares held in a charitable foundation, of which Mr.        
Stangeland is a director.                                               
(9) Includes 800 shares held in a living trust, of which an officer is          
trustee.                                                                

CHANGES IN CONTROL AND VOTING AGREEMENTS                                        

As of December 3, 1987, Vons entered into an Acquisition Agreement and Plan 
of Merger and Reorganization, as amended, among Vons, certain Vons              
subsidiaries, Safeway Southern California, Inc., Safeway, and certain           
subsidiaries of Safeway Southern California, Inc., in connection with the       
Safeway Acquisition. At the same time, Vons entered into a Standstill           
Agreement with KKR, Safeway Southern California, Inc., Safeway and certain of   
their affiliates (collectively, the "Safeway Holders") with regard to the Vons  
common stock that Safeway Southern California, Inc. would ultimately receive    
pursuant to the Safeway Acquisition and any additional shares that the Safeway  
Holders may acquire.                                                            

The term of the Standstill Agreement was five years from the date of the    
Safeway Acquisition, and it expired on August 29, 1993. However, certain        
provisions thereof remain operative after expiration of the term. As long as    
the Safeway Holders beneficially own at least 10% of the voting stock of Vons,  
Vons has agreed to nominate to its Board of Directors two persons designated    
by the Safeway Holders; if the Safeway Holders beneficially own between 5% and  
10% of the voting stock of Vons, Vons will nominate one such person. The        
Standstill Agreement provides further that, until the later of five years from  
the date of the Acquisition or the time that the Safeway Holders in the         
aggregate own less than 3% of the voting stock of Vons, the Safeway Holders     
will have the right twice to require Vons at its expense to use its best        
efforts to effect a registration under the Securities Act of the Vons common    
stock owned by them. The Safeway Holders additionally may require Vons at its   
expense, subject to the terms of the Standstill Agreement and to certain        
exceptions, to include their shares in any registered securities offering       
commenced by Vons.                                                              

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EXECUTIVE COMPENSATION  

COMPENSATION OF EXECUTIVE OFFICERS                                              

Summary Compensation. The materials set forth below contain information on  
certain cash and non-cash compensation provided to Vons' Chief Executive        
Officer and the four other executive officers of the Company serving at the     
end of the year who were the most highly compensated executive officers for     
fiscal year 1995 (the "Named Officers"). The table shows total annual and       
long-term compensation of such individuals during the last fiscal year and      
certain information for the two previous fiscal years.                          

SUMMARY COMPENSATION TABLE  

ANNUAL COMPENSATION                                                             

                                                        [Enlarge/Download Table]

                                                  ANNUAL COMPENSATION                                   
                                               -------------------------                                
                                                                           LONG-TERM                    
                                                                          COMPENSATION                  
                                               BASE    BASE                  AWARD         ALL OTHER    
NAME (1)                  PRINCIPAL POSITION   YEAR SALARY (2) BONUS (3) OPTIONS (#)(4) COMPENSATION (5)
--------                 --------------------- ---- ---------- --------- -------------- ----------------
                                                                                                        
Lawrence A. Del Santo... Chairman and          1995  $550,000  $437,250           0         $ 47,278    
                         Chief Executive       1994  $370,192  $228,725     375,000         $ 86,014    
                         Officer               1993       N/A       N/A         N/A              N/A    
Richard E. Goodspeed.... President and         1995  $400,000  $318,000           0         $ 32,178    
                         Chief Operating       1994  $269,231  $136,000     272,500         $328,226    
                         Officer               1993       N/A       N/A         N/A              N/A    
Phillip E. Hawkins...... Senior Vice President 1995  $166,272  $115,000      10,000         $ 12,051    
                         Store Operations      1994  $148,761  $ 29,770       4,650         $  9,634    
                                               1993  $141,664  $ 12,770       4,650         $  7,550    
Pamela K. Knous......... Executive Vice        1995  $195,326  $130,000      15,000         $ 14,400    
                         President, Chief      1994  $163,436  $ 39,600       9,650         $ 10,138    
                         Financial Officer     1993  $149,319  $  8,931       4,650         $  8,632    
                         and Treasurer                                                                  
Terrence J. Wallock..... Executive Vice        1995  $215,063  $136,000      15,000         $ 15,708    
                         President,            1994  $203,000  $ 40,600      14,000         $ 12,258    
                         General Counsel       1993  $199,543         0       7,450         $ 12,452    
                         and Secretary                                                                  

--------                                                                        
(1) Terry R. Peets, Executive Vice President, joined the Company in September   
1995 at an annual salary of $275,000. See "Executive Compensation--     
Employment Arrangements, Retirement Agreement and Change in Control     
  Arrangements." Because he joined in mid-year, he did not qualify as one of
the four most highly compensated officers in addition to the Chief      
Executive Officer so as to require disclosure under applicable proxy    
rules. However, it is anticipated that he will qualify in future years. 

(2) Represents the dollar value of cash base salary earned by each Named        
Officer during the fiscal year indicated. No non-cash base salary was   
earned by any of the Named Officers during the fiscal years indicated.  

(3) Represents the dollar value of cash bonus earned by the Named Officer with  
 respect to the fiscal year indicated. No non-cash bonus was earned by any
of the Named Officers with respect to the fiscal years indicated.       

(4) Represents the number of stock options granted during the period. No        
tandem stock appreciation rights ("SARs") were issued.                  

(5) Represents (i) Company contributions to the profit sharing plan consisting  
in 1995 of $9,000 for Messrs. Del Santo, Goodspeed, Wallock, Hawkins and
Ms. Knous and (ii) contributions to the wrap around plan for 1995 of    
$38,278 for Mr. Del Santo, $23,178 for Mr. Goodspeed, $6,708 for Mr.    
Wallock, $5,400 for Ms. Knous, and $3,051 for Mr. Hawkins.              

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Option Grants. Shown below is information on grants of stock options during 
the last fiscal year under the Plan to the Named Officers. No restricted stock  
was awarded under the Plan during 1995.                                         

OPTION GRANTS IN 1995 FISCAL YEAR(1)  

                                                        [Enlarge/Download Table]

                                                  INDIVIDUAL GRANTS                      
                         ----------------------------------------------------------------
                                     PERCENT OF TOTAL                                    
                                     OPTIONS GRANTED                          GRANT DATE 
                           OPTIONS   TO EMPLOYEES IN    EXERCISE   EXPIRATION  PRESENT   
NAME                     GRANTED (#)   FISCAL YEAR    PRICE ($/SH)    DATE    VALUE (2)  
----                     ----------- ---------------- ------------ ---------- ---------- 
                                                                                         
Phillip E. Hawkins......   10,000          2.00%         $19.93    5/03/2005   $114,900  
Pamela K. Knous.........   15,000          3.00%         $19.93    5/03/2005   $172,350  
Terrence J. Wallock.....   15,000          3.00%         $19.93    5/03/2005   $172,350  

--------                                                                        
(1) All option grants are subject to the following provisions: Options shown    
were granted on May 3, 1995, and are exercisable in cumulative 15%      
installments commencing one year from date of grant, with full vesting  
occurring on the seventh anniversary date. Vesting may be accelerated in
  certain events relating to changes in control of the Company. Options were
granted at an exercise price equal to the average closing price of the  
Company's common stock for the ten trading days prior to the grant date.
Options are nontransferable other than by will or by the laws of descent
and distribution upon the death of the grantee, and will terminate one  
year after termination of employment by reason of retirement, disability
or death, and will terminate 30 days after termination of employment for
any other reason. The Plan under which all options were granted is      
administered by the Compensation Committee of the Board, which retains  
 discretion, subject to certain limits, to modify the terms of outstanding
options.                                                                

(2) Present value determinations were made using a Black-Scholes option         
 pricing model based on the following assumptions: an expected stock-price
  volatility factor of .2584, a risk-free rate of return of 7.4%, a dividend
yield of 0.00%, and a time of exercise of 10 years. The actual value, if
  any, an executive may realize will depend on the excess of the stock price
over the exercise price on the date the option is exercised, so there is
no assurance the value realized by an executive will be at or near the  
value estimated by the Black-Scholes model.                             

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Option Exercises. Shown below is information with respect to the exercise of
stock options during the last fiscal year by each of the Named Officers and     
the value of unexercised options held by each of them as of the end of the      
last fiscal year.                                                               

AGGREGATED OPTION EXERCISES IN 1995 FISCAL YEAR AND FISCAL YEAR-END OPTION  
VALUES  

                                                                [Download Table]

                                                NUMBER OF       VALUE OF     
                                               UNEXERCISED     UNEXERCISED   
                                                 OPTIONS      IN-THE-MONEY   
                                                AT FISCAL   OPTIONS AT FISCAL
                                              YEAR-END (#)      YEAR-END     
                                              ------------- -----------------
                                              EXERCISABLE/    EXERCISABLE/   
                    NAME                      UNEXERCISABLE UNEXERCISABLE (1)
                    ----                      ------------- -----------------
                                                                             
Lawrence A. Del Santo........................    125,000       $2,183,829    
                                                 250,000       $4,367,671    
Richard E. Goodspeed.........................     67,500       $1,191,700    
                                                 205,000       $3,200,300    
Phillip E. Hawkins...........................     19,477       $   86,853    
                                                  16,973       $  134,595    
Pamela K. Knous..............................     15,727       $   53,691    
                                                  25,723       $  218,833    
Terrence J. Wallock..........................     27,814       $  104,508    
                                                  31,086       $  263,550    

--------                                                                        
(1) Based on closing price of $28.25 for the Company's common stock on the New  
York Stock Exchange on December 29, 1995 (the last trading day prior to 
the end of the fiscal year).                                            

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DEFINED BENEFIT PLANS                                                           

The following table shows the estimated annual retirement benefit payable on
a straight life annuity basis to participating employees, including officers,   
in the earnings and years of service classifications indicated, under the Vons  
Pension Plan (the "Pension Plan") and the Vons Supplemental Executive           
Retirement Plan ("SERP"). SERP benefits are available to officers only, and an  
officer qualifying for both the Pension Plan and SERP will be paid a            
retirement benefit in accordance with the terms of both plans. The              
illustration below assumes retirement at January l, 1996, at the normal         
retirement age of 65.                                                           

PENSION PLAN TABLE  

                                                                [Download Table]

                   ESTIMATED ANNUAL RETIREMENT BENEFITS                   
               BASED UPON INDICATED YEARS OF SERVICE (1)(2)               
--------------------------------------------------------------------------
                                     15      20      25      30      35   
REMUNERATION (3)                    YEARS   YEARS   YEARS   YEARS   YEARS 
----------------                   ------- ------- ------- ------- -------
                                                                          
$  100,000       ................  $30,000 $40,000 $40,000 $40,000 $40,000
   150,000       ................   45,000  60,000  60,000  60,000  60,000
   200,000       ................   60,000  80,000  80,000  80,000  80,000
   300,000       ................   90,000 120,000 120,000 120,000 120,000
   400,000       ................  120,000 160,000 160,000 160,000 160,000
   500,000       ................  150,000 200,000 200,000 200,000 200,000
   600,000       ................  180,000 240,000 240,000 240,000 240,000
   700,000       ................  210,000 280,000 280,000 280,000 280,000
   800,000       ................  240,000 320,000 320,000 320,000 320,000
   900,000       ................  270,000 360,000 360,000 360,000 360,000
 1,000,000       ................  300,000 400,000 400,000 400,000 400,000
 1,250,000       ................  375,000 500,000 500,000 500,000 500,000

--------                                                                        
(1) "Years of Service" equals the total number of credited years under a plan,  
which may be different for purposes of the Pension Plan and the SERP.   

(2) Benefits are not subject to any deduction for social security or other      
offset amounts.                                                         

(3) The calculation of retirement benefits generally is based upon average      
compensation for the highest five years of the ten years preceding      
retirement. Such compensation includes that listed in the Summary       
Compensation Table, except that the amounts shown under the column      
entitled "All Other Compensation" are excluded (other than the Company's
 annual contribution to the profit sharing plan). The SERP benefit is paid
  in a lump sum upon retirement in an amount equal to the actuarial value of
the SERP portion of the defined benefit shown in the table.             

As of January 1, 1996, the credited years of service under both the Pension 
Plan and SERP for the Named Officers were as follows: Mr. Hawkins, 27 years 5   
months; Ms. Knous 4 years, 9 months; and Mr. Wallock 4 years, 10 months. With   
respect to retirement benefits payable to Mr. Del Santo and Mr. Goodspeed, see  
"Executive Compensation--Employment Arrangements, Retirement Agreement and      
Change in Control Arrangements."                                                

EMPLOYMENT ARRANGEMENTS, RETIREMENT AGREEMENT AND CHANGE IN CONTROL             
ARRANGEMENTS                                                                    

Employment Arrangements. The Company has three-year employment contracts    
with Messrs. Del Santo and Goodspeed entered into as of April 26, 1994 and has  
made employment commitments to Terry R. Peets, Executive Vice President,        
pursuant to agreements dated September 6, 1995.                                 

Mr. Del Santo's agreement provides for a base salary of $550,000, with an   
annual bonus of up to 100% of base salary contingent upon the achievement by    
the Company of performance goals which are to be determined by the Company's    
Board of Directors. Mr. Del Santo was granted 200,000 non-qualified stock       
options at fair                                                                 

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market value and 175,000 non-qualified stock options at 25% of fair market      
value and all are exercisable 33 1/3% per year beginning one year after grant.  
Mr. Del Santo is also to receive upon retirement in May 1997 a monthly          
retirement benefit of $16,667 for the duration of his life, and, in the event   
of his death before retirement, his spouse is to receive the actuarially        
equivalent benefit (based on 100% joint and survivor benefit) of such           
payments. The Company also paid expenses incurred by Mr. Del Santo for          
relocation to Southern California, including transfer of household goods and    
temporary living expenses through September 1994.                               

Mr. Goodspeed's agreement provides for a base salary of $400,000 per year,  
with an annual bonus of up to 100% of base salary contingent upon the           
achievement by the Company of performance goals. Mr. Goodspeed was also         
granted 175,000 non-qualified stock options at fair market value which are      
exercisable 20% per year beginning one year after grant and 97,500 non-         
qualified stock options at 25% of fair market value which are exercisable 33    
1/3% per year beginning one year after grant. Mr. Goodspeed is also eligible    
to receive retirement benefits from a SERP in accordance with the schedule of   
defined benefits shown in the Pension Plan Table above, but he is to receive    
credit for an additional five years of service upon completion of five years    
employment with the Company. See "Executive Compensation--Pension Plan Table."  
In the event of Mr. Goodspeed's death, his spouse will receive the actuarial    
equivalent benefit (based on 100% joint and survivor benefit) of the amounts    
set forth in the above table. In the event of termination without "Cause" or    
resignation for "Good Reason", as each term is defined in the contract, Mr.     
Goodspeed shall receive a monthly retirement benefit for life, in lieu of the   
above described pension benefit, in the amount of $8,333 beginning at age 65.   
The Company also paid for relocation of Mr. Goodspeed to Southern California,   
including the cost of transfer of household goods, temporary living expenses    
through October 1994, and purchased his former residence at his original cost.  

Mr. Peets was extended an offer of employment by letter agreement providing 
him a base salary of $275,000 per year plus a one-time signing bonus of         
$30,000. Mr. Peets was also included in the Company's 1995 bonus plan for the   
full year and received a stock option grant of 50,000 shares at $22.24 per      
share, the fair market value on his date of hire. The Company agreed to defend  
and indemnify Mr. Peets against any actions brought by his former employer      
arising from his employment with the Company. The Company also entered into a   
severance agreement with Mr. Peets which provides that he is to continue to     
receive his base salary, along with medical benefits (but no bonus), through    
September 5, 1997 if prior to that date he is terminated without "Cause" or     
resigns with "Good Reason", as each term is defined therein.                    

Retirement Agreement. The Company entered into a Retirement Agreement with  
Mr. Stangeland in July 1994, pursuant to which Mr. Stangeland resigned his      
position as Chief Executive Officer but continued as an officer of the Company  
through the end of fiscal 1994 at his then existing salary of $606,050 per      
year, plus a bonus with a maximum payment of 100% of salary. Beginning January  
2, 1995, Mr. Stangeland retired from the Company but remains as a consultant    
through December 31, 1996 for a fee of $269,425 per year. In the event of his   
death, all such payments are to be made to Mr. Stangeland's estate. While a     
consultant, he will receive no director's fees. The agreement also provided     
that all of Mr. Stangeland's existing stock options vest effective at his       
retirement and remain exercisable through their respective ten year terms.      
Pursuant to the terms of the Company's SERP, Mr. Stangeland received a payment  
of $2,790,939 upon his retirement, representing the current actuarial value of  
the defined benefits to which he was entitled under such plan.                  

Change in Control Arrangements. Officers of the Company (excluding Messrs.  
Del Santo and Goodspeed) are covered under a Severance Plan for Senior          
Management and Key Employees (the "Severance Plan"). The Severance Plan was     
adopted in 1992.                                                                

Under the terms of the Severance Plan, a participating executive will       
generally become entitled to receive benefits if the executive's employment is  
terminated by the executive for "Good Reason," or by the Company without        
"Cause," within two years following a "Change of Control." For purposes of the  
Plan, a "Change of Control" is deemed to include (i) any acquisition of stock   
if the acquiring person would thereafter be the beneficial owner of 50% or      
more of the Company's voting stock, (ii) a merger or consolidation of the       
Company resulting in the holders of the Company's voting stock immediately      
prior to such transaction holding less than                                     

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50% of the total voting common stock of the surviving corporation after such    
transaction, (iii) a sale or exchange of all or substantially all of the        
property and assets of the Company, or (iv) any change over a two-year period   
or less in a majority of the Board of Directors that is not approved by a       
majority of the directors either in office at the commencement of such two-     
year period or who were elected with the approval of a majority of directors    
in office at the commencement of such two-year period. The term "Cause" is      
defined to mean the commission of certain crimes, habitual neglect of duty if   
such neglect is not cured within five days of notice, or knowing, intentional   
or malicious conduct contrary to the Company's best interests that causes the   
Company material harm. An executive's termination of employment is deemed for   
"Good Reason" if any of the following occur within six months of such           
termination without the executive's consent: (i) substantial change in the      
nature, or diminution in the status, of the individual's duties or position,    
(ii) reduction in the annual base salary or overall value of benefits provided  
to the individual, (iii) failure to continue any incentive compensation plan    
or a reduction of the employee's relative participation without providing an    
alternative plan, (iv) reduction in vacation days or a material reduction in    
other benefits, (v) relocation of the executive's principal place of business   
by more than 35 miles, or (vi) breach or failure to assume the Severance Plan   
or any agreement entered into pursuant to the Severance Plan; provided, that,   
for purposes of clauses (ii) through (iv), "Good Reason" will not exist if the  
aggregate value of all salary, benefits, incentive compensation and other       
compensation is reasonably equivalent to the value of such items before the     
Change of Control. The Company considers it unlikely that the employment of     
all of the executives anticipated to be covered under the Severance Plan would  
be terminated following a Change of Control.                                    

The benefits payable under the Severance Plan consist of a lump sum cash    
payment equal to from one to two and one-half times the sum of (a) the higher   
of (i) the executive's annual base salary at the time of termination or (ii)    
the highest annual base salary of the executive during the three fiscal years   
prior to the Change of Control, and (b) the average annual short-term           
incentive compensation bonus and average annual profit sharing plan             
contribution for the executive with respect to any of the three fiscal years    
preceding the executive's termination. Other benefits provided under the        
Severance Plan include the addition of between one and two and one-half years   
of credited service for all purposes under each of the Company's retirement     
plans, except the Profit Sharing Plan, and, subject to certain setoffs for      
benefits earned in subsequent employment, continuation of certain health,       
disability, dismemberment and life insurance benefits for three years. The      
Severance Plan is anticipated to have an initial term of two years and to       
thereafter be subject to cancellation or amendment by the Company on two        
years' prior notice given after the conclusion of such initial term. Benefits   
under the Severance Plan may be subject to an excise tax payable by the         
executive, and may not be deductible for tax purposes by the Company, to the    
extent they exceed certain limits set forth in the Internal Revenue Code and    
applicable state tax codes.                                                     

The Plan provides, under certain circumstances, for options to vest upon a  
change of control. See "Amendments to The Vons Companies, Inc. 1990 Stock       
Option and Restricted Stock Plan--Plan Description."                            

DIRECTOR COMPENSATION                                                           

Directors who are not also employees of Vons receive an annual retainer fee 
of $20,000 per year, as well as a fee of $1,000 paid for each Board of          
Directors' meeting attended and a fee of $1,000 for each Committee meeting      
attended. In addition, the Chairpersons of the Compensation and Audit           
Committees each receive an annual chairperson retainer fee of $4,000.           

On September 19, 1991, the Board of Directors adopted the Directors' Stock  
Option Plan (the "DSOP") covering the grant of up to 225,000 shares of common   
stock. The DSOP was approved by shareholder vote at the Annual Meeting of       
Shareholders held on May 13, 1992, and became effective on that date. Members   
of the Board of Directors who are not also employees of Vons are eligible to    
receive options under the DSOP for up to a maximum of 30,000 shares of common   
stock. Options are granted pursuant to a formula, under which there is an       
appointment grant (the "Appointment Grant") which was made for all current      
eligible directors at the effective date of the DSOP and which will be made     
for new eligible directors joining thereafter. In addition, annual grants (the  
"Annual Grants") are awarded to all eligible directors on the date of each      
annual meeting of                                                               

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shareholders, including the meeting at which a director is first elected.       
Appointment Grants are made in the amount of shares which, at "fair market      
value," on the date of grant are equal in value to six times the annual         
retainer then paid to directors (currently $20,000) as adjusted from time to    
time. Annual Grants will be in an amount of Vons common stock equal in value    
on the date of grant to twice the annual retainer. The exercise price of        
Appointment and Annual Grants is at "fair market value." "Fair market value"    
of a share for purposes of the DSOP equals the average closing price for the    
ten trading days prior to the grant date of a share of Vons common stock on     
the NYSE. In 1995, Annual Grants of 2,007 shares were made to each eligible     
non-executive director.                                                         

Under the DSOP, eligible directors may also elect to forego cash payment of 
all or a portion of their annual retainer fee, including Chairperson fees, and  
receive additional stock option grants instead. The exercise price of each      
option so granted will be discounted 20% from the "fair market value" of a      
share of Company common stock on the date of grant, and the number of options   
to be granted will be determined by dividing the discount per share into the    
non-cash retainer fee.                                                          

Options under the DSOP are non-transferable except by inheritance upon an   
optionee's death, terminate one year after the retirement, disability or death  
of the optionee, and are otherwise granted for ten year terms. Director         
options are exercisable in cumulative 25% installments commencing six months    
from the date of grant and continuing on each anniversary of the date of grant  
thereafter, with full vesting occurring on the third anniversary date. Vesting  
may be accelerated in certain events relating to changes in control of the      
Company.                                                                        

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

The Compensation Committee is composed of three directors: Mr. Burd,        
Chairman, Mr. Magowan, and Mr. Tauscher. For a description of the background    
of each of these individuals and their term of service on the Board of          
Directors, see "Election of Directors."                                         

In the Safeway Acquisition (see "General Information-Business History"),    
Vons paid $288.5 million in cash (including $20 million allocable to an         
Agreement Not to Compete) and issued 11,667,800 shares of Vons common stock to  
Safeway Southern California, Inc. See "Principal and Management Shareholders."  
The parties also agreed to share certain of the expenses incurred in            
connection with the Safeway Acquisition and entered into various other          
agreements. The Agreement Not to Compete provides that, for stated periods of   
time, Safeway, Safeway Southern California, Inc., its immediate parent, and     
their affiliates may not (a) engage in the retail grocery business in any       
county in California or Nevada where the Safeway subsidiaries did business      
immediately prior to the Safeway Acquisition, (b) permit or license any entity  
to use trademarks, trade rights or similar rights owned or used by them in any  
such county or (c) disclose any of Vons' confidential information or trade      
secrets. Mr. MacDonnell, a director of Safeway, and Mr. Magowan, a director     
and then Chief Executive Officer of Safeway, became directors of Vons after     
the Safeway Acquisition. Mr. Burd, current President, Chief Executive Officer   
and a director of Safeway, and Mr. Greene, a director of Safeway, have          
subsequently become directors of Vons. Under the Acquisition Agreement, each    
party agreed to indemnify other parties for liability arising from or relating  
to a breach of, or a failure to perform, certain of such party's                
representation(s), warrant(ies), covenant(s) or agreement(s) in the             
Acquisition Agreement and in certain other agreements and documents entered     
into or furnished pursuant to the Acquisition Agreement or any document         
furnished or to be furnished under the Acquisition Agreement.                   

In 1995, Safeway and its affiliates sold certain inventory and other items  
to the Company for an aggregate amount of approximately $27 million. Vons sold  
certain inventory items to Safeway and its affiliates in 1995 for an aggregate  
amount of approximately $6.4 million. All such sales between the parties were   
on an "arm's length" basis.                                                     

Property Development Associates ("PDA") is a partnership 80% owned by a     
subsidiary of Safeway and 20% owned by M&T Group, which is a subsidiary of Pac  
Trust, which is, in turn, an affiliate of KKR. PDA and Safeway have interests   
in eight supermarket properties located in Southern California which are        
leased to Vons.                                                                 

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Rentals under such leases in 1995 totaled approximately $600,000. In addition,  
Vons is secondarily liable under four leases, for which the annual minimum      
rental is approximately $200,000, all of which is currently being paid by       
assignees. All of the leases relating to the above properties were negotiated   
by Vons or its predecessors on an "arm's length" basis, and none of the lease   
terms have been modified or amended since PDA's or Safeway's acquisition.       

REPORT OF THE COMPENSATION COMMITTEE  

The Compensation Committee of the Board of Directors has furnished the      
following report on employee compensation. Such report shall not be deemed to   
be incorporated by reference by any general statement incorporating by          
reference this Proxy Statement into any filing under the Securities Act of      
1933 or under the Securities Exchange Act of 1934, except to the extent that    
Vons specifically incorporates the report by reference, and shall not           
otherwise be deemed soliciting material or be deemed filed under such Acts.     

The Compensation Committee of the Board of Directors is responsible for the 
review and administration of the Company's various compensation plans,          
including base salaries for officers, the Company's stock option plan, and      
annual bonus plan.                                                              

The Company's executive compensation structure is designed to provide a base
salary at the mid-range of salaries of comparable companies plus a performance  
based bonus comprising a significant portion of overall compensation so as to   
allow executives to earn total compensation at the higher end of the            
competitive range if warranted by performance. The Company also provides long-  
term compensation in the form of non-qualified stock options.                   

The performance measure which generates the executive bonus pool is derived 
from the Company's annual annual budget. The annual budget each year is         
developed on the basis of overall financial guidelines set by senior            
management. Utilizing these guidelines, each store adopts sales and operating   
income goals which cumulatively comprise the overall Company annual budget      
goals after administrative and support costs are factored in. The Board of      
Directors formally reviews and approves the annual budget after any suggested   
changes have been incorporated.                                                 

From the annual budget, a bonus performance matrix is developed with two    
variables consisting of same store sales increases over previous year sales     
and operating income goals. On the basis of the Company's performance in these  
two areas on the matrix, a bonus pool for officers is generated in an amount    
ranging from 0% to 200% of the cumulative target bonuses of all executives      
eligible for participation in the pool. The individual bonus targets for        
executives range from 30% to 50% of their base salary depending on the level    
of responsibility.                                                              

The bonus targets for both the Chief Executive Officer and the Chief        
Operating Officer are 50% of base compensation. Each are paid a bonus directly  
based on the Company performance matrix described above so that their bonus     
potential ranges between 0% and 100% of base compensation.                      

With respect to other officers, including the Named Officers, the bonus pool
is funded by the Company performance matrix, but payout from the pool is based  
upon individual performance goals of each officer. These goals vary depending   
on the responsibilities of the officer. Payout is made on the basis of an       
assessment of the achievements of each officer during the year with respect to  
the individual goals and overall individual performance. As indicated above,    
target bonus for this group ranges from 30% to 50% of base compensation and     
payout can be from 0% to 100% of target.                                        

Base salaries of all officers are evaluated annually based upon compensation
for similar positions in competitive companies, but also on the basis of        
financial and strategic goals of the Company as well as Company performance.    
Comparative salary data is reviewed for both other grocery companies            
throughout the country as well as other companies in the region so as to        
maintain a competitive salary package. Compensation paid for comparable         
positions in grocery companies shown in the peer group index contained          
elsewhere in the proxy statement is included in the survey along with industry  
data available through other sources. On the basis of these surveys and other   
information available to it, the Company believes that its salaries are at the  
mid-range of positions surveyed.                                                

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Under the terms of the Plan, the Committee is authorized to grant all stock 
options. In determining the amount of the 1995 award, the Committee reviewed    
prior years' stock option awards. A total of approximately 504 individuals,     
including officers, store managers, and middle managers, received option        
awards in May of 1995, at a strike price of $19.93 per share, which was         
determined based upon the price of the Company's stock at the time of the       
award, in accordance with the terms of the Plan. No stock option awards were    
made to the Chief Executive Officer or Chief Operating Officer in 1995 since    
they received contractually negotiated awards in 1994 as part of their          
compensation arrangement upon joining the Company.                              

The 1995 total compensation of no executive officer exceeded the limitations
for deductibility set forth in Section 162(m) of the Internal Revenue Code.     
Inasmuch as it is highly unlikely that any executive compensation in 1996 will  
exceed the limitation by any substantial amount, the Committee sees no reason   
to adopt a policy limiting executive compensation to that deductible under      
Section 162(m). In the future the Committee may approve compensation in excess  
of the deductibility limit if it feels that would be appropriate considering    
all circumstances. The Company is in this proxy statement asking for            
shareholder approval to adopt changes to the Company's stock option plan to     
comply with Section 162(m) so that employee stock option grants will not        
result in the loss of a deduction thereunder.                                   

No member of the Committee is a former officer, current officer or employee 
of the Company or any of its subsidiaries, or is employed by a company whose    
Board of Directors includes a member of the management of the Company.          

                  Steven A. Burd
                    Peter A. Magowan
                       William Y. Tauscher

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STOCK PRICE PERFORMANCE 

The information set forth below shall not be deemed incorporated by         
reference by any general statement incorporating by reference this Proxy        
Statement into any filing under the Securities Act of 1933 or under the         
Securities Exchange Act of 1934, except to the extent Vons specifically         
incorporates this information by reference, and shall not otherwise be deemed   
soliciting material or be deemed filed under such Acts.                         

The graph below compares the cumulative total return of Vons common stock   
with the cumulative total return of (i) the S&P 400 Mid-Cap Index, which was    
utilized for 1994, (ii) the S & P 500 and (iii) ten companies described in the  
footnote to the graph. The comparison covers the five-year period from the      
last trading day prior to the end of Vons' 1990 fiscal year to the last         
trading day prior to the end of Vons' 1995 fiscal year and assumes that $100    
was invested at the beginning of the period in Vons common stock and in each    
index.                                                                          

The past performance shown for Vons common stock is not necessarily         
indicative of future performance.                                               

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)  
AMONG VONS, S&P 400 MIDCAP 1994(2), TOP TEN SUPERMARKETS 1994(3),   
S&P 500(2) AND TOP TEN SUPERMARKETS 1995(3)   

PERFORMANCE GRAPH APPEARS HERE  

                                                        [Enlarge/Download Table]

Measurement Period              S&P 400      TOP TEN             S&P     TOP TEN          
(Fiscal Year Covered)  VONS     MIDCAP 1994  SUPERMARKETS 1994   500     SUPERMARKETS 1995
---------------------  -------  -----------  -----------------   -----   -----------------
                                                                                          
Measurement Pt-  1990  $100     $100         $100           $100    $100                  
FYE   1991             $105.56  $149.87      $119.07        $130.01 $119.26               
FYE   1992             $113.33  $167.75      $136.9         $139.69 $138.09               
FYE   1993             $ 71.11  $191.09      $147.26        $153.56 $150.47               
FYE   1994             $ 80     $184.25      $165.35        $155.51 $169.41               
FYE   1995             $125.55  $241.15      $232.79        $213.24 $233.48               

--------                                                                        
(1) Total shareholders' return assumes reinvestment of dividends on the date    
such dividends were declared. The dollar amounts shown at each year-end 
are as of the last trading day prior to the end of the Company's fiscal 
year.                                                                   
(2) For 1994 the Company used the S & P 400 Mid Cap as a comparative            
measurement. Beginning in 1995 and going forward, it will use the S & P 
500 which is the comparison which the Company believes is more commonly 
utilized and more appropriate.                                          
(3) The ten largest United States companies (measured by most recently          
available fiscal year revenues) which had publicly traded equity for at 
 least the most recent three years and which derived revenue predominately
from supermarket retail sales. The companies included in 1995 are:      
American Stores Company, Albertson's, Inc., The Great Atlantic & Pacific
Tea Company, Inc., Food Lion, Inc., Giant Food Inc., The Stop and Shop  
Companies, Inc., The Kroger Co., The Penn Traffic Company, Safeway Inc. 
  and Winn-Dixie Stores. The 1995 peer group does not include Bruno's, Inc.,
 which was included in 1994 (and has been removed from the 1994 peer group
  presented above) because it is no longer a publicly held company. The 1995
peer group includes The Stop and Shop Companies, Inc. which replace     
Bruno's. The returns of each component issuer of the group have been    
weighted according to each respective issuer's stock market             
capitalization.                                                         

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CERTAIN TRANSACTIONS  

In his role as President Emeritus, Mr. Davila provides advisory services to 
the Company, primarily in the marketing area, and acts as spokesperson in the   
Company's advertising campaigns. For these services he is paid $120,000         
annually, but receives no director's fees. In addition, in light of the         
positive sales performance of the Company in 1995 and in the recognition of     
Mr. Davila's efforts in the marketing area in 1995, Mr. Davila was paid a       
$25,000 bonus for 1995.                                                         

In accordance with a Board of Directors' policy encouraging stock ownership 
by directors and authorizing loans to facilitate such ownership, Mr.            
Rickershauser borrowed funds from the Company in 1992 to purchase 5,000 shares  
of Vons common stock. The indebtedness is evidenced by promissory notes         
secured by the common stock purchased. The notes accrue interest at the         
Federal mid-term rate in effect each month and the notes and accrued interest   
are due on December 31, 1997. As a result, at December 31, 1995, Mr.            
Rickershauser was indebted to the Company in the aggregate amount of            
approximately $148,588, including accrued interest.                             

Mr. Rickershauser serves as Chairman of the Board and Chief Executive       
Officer of PS Group, Inc. A subsidiary of PS Group, Inc. sells diesel fuel to   
the Company for use in its transportation activities. The fuel price was        
competitively bid and anticipates the sale to the Company of approximately      
4,000,000 gallons of diesel fuel over a one-year period. In 1995 the Company    
purchased approximately $4,717,526 of diesel fuel from such subsidiary.         

Mr. Duda and Mr. Stangeland are general partners of Lido Partners, formerly 
known as Newport Via Lido Association, a California limited partnership         
founded in 1986 to acquire a shopping center containing office, commercial and  
retail space. Vons succeeded to the interest of a former supermarket operator   
in the center. Commencing January 31, 1995, Lido Partners and the Company       
entered into a new supermarket lease in the center for an additional 20 years   
at an annual minimum rent of $330,000. The lease was negotiated by Vons on an   
"arm's length" basis on terms and conditions no less favorable to Vons then     
were otherwise available from independent third parties.                        

The Company leases a San Diego warehouse facility from Miramar Associates, a
California general partnership. The general partners of Miramar Associates are  
Vons (50%) and Fritz Duda Interests, a Texas general partnership, (50%) of      
which Mr. Duda, a director of Vons, is a general partner. The lease payments    
to Miramar Associates approximate $1.9 million per year. The Company believes   
that the terms and conditions of the lease are no less favorable to Vons than   
were otherwise available from independent third parties. Distributions made by  
Miramar Associates to the partners, representing profits after operating        
expenses of the partnership, were approximately $250,000 to each partner in     
1995. The Company ceased operating the warehouse in 1995 and a special          
committee of disinterested directors has been appointed by the Board of         
Directors to negotiate a termination arrangement with Miramar Associates and a  
sale of the warehouse to a disinterested party.                                 

For further information regarding additional certain transactions with      
directors, see "Executive Compensation--Compensation Committee Interlocks and   
Insider Participation."                                                         

VOTES REQUIRED  

The nominees for election as directors who receive the vote of a plurality  
of the shares cast at the Meeting, a quorum being present, shall become         
directors at the conclusion of the tabulation of the votes. Under Michigan law  
and the Company's Restated Articles of Incorporation and By-Laws, abstentions,  
withheld votes, broker non-votes and other shares not cast will not be counted  
as shares cast in the election of any director.                                 

Pursuant to the Plan, approval of the amendment to the Plan requires the    
vote of a majority of the shares represented and entitled to vote at the        
Annual Meeting, a quorum being present. Michigan law and the Company's          
Restated Articles of Incorporation and By-Laws do not otherwise require a vote  
of the shareholders.                                                            

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All shares represented and entitled to vote at the Annual Meeting which the     
holders of such shares vote "for", "against" or "abstain" from voting, will be  
counted for purposes of determining the minimum number of affirmative votes     
required for approval of the amendment to the Plan. The total number of votes   
cast "for" the amendment to the Plan will be counted for purposes of            
determining whether sufficient affirmative votes have been cast for the         
approval of the proposal. Therefore, an abstention, broker non-votes and other  
shares not voted on the proposed amendment to the Plan have the same legal      
effect as a vote "against" the proposal.                                        

The holders of a majority of the common stock issued and outstanding as of  
the record date, present in person or represented by proxy, shall constitute a  
quorum at the Meeting.                                                          

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934            

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's 
officers, directors and persons who are beneficial owners of more than ten      
percent of the Company's common stock ("reporting persons") to file reports of  
ownership and changes in ownership with the Securities and Exchange             
Commission. Reporting persons are required to furnish the Company with copies   
of all Section 16(a) forms they file.                                           

To the Company's knowledge, based solely on review of the copies of such    
reports furnished to the Company and written representations that no other      
reports were required, during the 1995 fiscal year, all Section 16(a) filing    
requirements applicable to reporting persons were complied with.                

OTHER MATTERS 

INDEPENDENT PUBLIC ACCOUNTANTS                                                  

Upon recommendation of its Audit Committee, the Board of Directors of Vons  
has selected KPMG Peat Marwick LLP ("KPMG") to serve as independent auditors    
during the current fiscal year. A representative of KPMG is expected to be      
present at the Meeting, will have an opportunity to make a statement and will   
be available to answer appropriate questions, if any, from shareholders.        

ANNUAL REPORT                                                                   

A copy of Vons' Annual Report to Shareholders is enclosed herewith, but is  
not to be considered as part of the proxy solicitation material.                

Vons will also furnish without charge a copy of its annual report on Form   
10-K for the year ended December 31, 1995, including financial statements but   
without exhibits, to each person whose vote is solicited by this Proxy          
Statement. Upon request Exhibits to the Form 10-K will be furnished to          
shareholders of record making a written request for such Exhibits at a fee of   
$.50 per page, paid in advance. Requests and inquiries should be addressed to:  
Mary McAboy, Vice President, Corporate Communications, The Vons Companies,      
Inc., 618 Michillinda Avenue, Arcadia, California 91007.                        

SHAREHOLDER PROPOSALS                                                           

A proposal to be presented at the 1997 annual meeting must be received at   
Vons' principal executive offices no later than November 30, 1996, in order to  
be considered for inclusion in the proxy materials to be disseminated by the    
Board of Directors for such annual meeting. To be eligible for inclusion in     
such proxy materials, such proposals must conform to the requirements set       
forth in Regulation 14A under the Securities Exchange Act of 1934, as amended,  
as well as in Vons' By-Laws.                                                    

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ADDITIONAL BUSINESS                                                             

The Board of Directors does not know of any matter to be presented at the   
Meeting which is not listed on the Notice of Meeting and discussed above. If    
other matters should properly come before the Meeting, however, the persons     
named in the accompanying proxy will vote all proxies in accordance with their  
best judgment.                                                                  

By order of the Board of Directors                                              

/s/ Terrence J. Wallock                                                         

Terrence J. Wallock, Secretary                                                  

March 28, 1996                                                                  

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--------------------------------------------------------------------------------
THE VONS COMPANIES, INC.  
PROXY 
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS 

 The undersigned hereby appoints Lawrence A. Del Santo, Pamela K. Knous,
Terrence J. Wallock, and each of them, as proxies with power of substitution and
hereby authorizes them to represent and to vote, as designated on the reverse   
side of this card, all the shares of Common Stock of The Vons Companies, Inc.   
("Vons") held of record by the undersigned on March 11, 1996 at the Annual      
Meeting of Shareholders to be held at The Vons Companies, Inc. headquarters     
building, 618 Michillinda Avenue, Arcadia, California 91007, on Wednesday, May  
8, 1996, at 9:00 a.m. local time, or any adjournments or postponement thereof,  
with respect to the following matters as more particularly described in the     
Proxy Statement dated March 28, 1996, receipt of which is hereby acknowledged.  

   This proxy, when properly executed, will be voted in the manner indicated
herein by the undersigned. If no direction is made, this proxy will be voted FOR
(i) the election of the persons named on the reverse side of this card and (ii) 
the amendment of the Vons 1990 Stock Option and Restricted Stock Plan as        
described in the proxy statement and according to the discretion of the proxies 
on any other properly presented business. If any nominee named in the Proxy     
Statement is unable or unwilling to serve or is otherwise unavailable, the      
proxies shall have discretion and authority to vote in accordance with their    
judgment for other nominees.                                                    

(Continued and to be signed and dated on other side)                            

                        THE VONS COMPANIES, INC.
              P.O. BOX 11228
                         NEW YORK, N.Y. 10203-0228

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DETACH PROXY CARD HERE  
--------------------------------------------------------------------------------
1.  Election of Directors                                                       

    FOR all nominees  [_]  WITHHOLD AUTHORITY to vote    [_]   *EXCEPTIONS   [_]
listed below           for all nominees listed below.                   

Nominees: William S. Davila, James H. Greene, Jr., John M. Lillie, and  
Charles E. Rickershauser, Jr. for the terms indicated in the Proxy      
Statement.                                                              
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space    
provided below.)                                                        

*Exceptions                                                             
               -----------------------------------------------------------------

2.  To amend the Vons 1990 Stock Option and Restricted Stock Plan as described  
in the Proxy Statement.                                                 

FOR  [_]  AGAINST [_]  ABSTAIN  [_]                                     

3.  To vote upon such other business as may properly come before the meeting    
or any adjournments or postponement thereof as to which the undersigned 
hereby confers discretionary authority upon said proxies.               

Change of Address and or Comments Mark Here.   [_]                      

IMPORTANT: Please sign exactly as your name or names appear hereon.     
  When signing on behalf of a corporation, partnership, estate, trust or the
like, indicate title of person signing.                                 

Dated:                                                 , 1996           
-------------------------------------------------           

-------------------------------------------------------------           
Signature     

-------------------------------------------------------------           
Signature if held jointly     

Please sign, date and return this proxy card promptly using the enclosed
envelope.                                                               

Votes MUST be indicated [X] in Black or Blue Ink. [_]                   

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THE VONS COMPANIES, INC.

1990 STOCK OPTION AND RESTRICTED STOCK PLAN 

 The Vons Companies, Inc., a corporation organized under the laws of the
State of Michigan (the "Company"), hereby adopts The Vons Companies, Inc. 1990  
Stock Option and Restricted Stock Plan (the "Plan").  The purposes of this Plan 
are as follows:                                                                 

       (1) To further the growth, development and financial success of the
   Company by providing additional incentives to certain of its officers and
    employees who have been or will be given responsibility for the management
   or administration of the Company's business affairs, by assisting them to
    become owners of capital stock of the Company and thus to benefit directly
from its growth, development and financial success.                   

      (2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial employees considered   
essential to the long-range success of the Company by providing and   
offering them an opportunity to become owners of capital stock of the 
Company.                                                              

ARTICLE I 

DEFINITIONS 

Section 1.1  Board:  "Board" shall mean the Board of Directors of the 
Company.                                                                        

    Section 1.2  Change of Control:  "Change of Control" shall mean (a) one or
more acquisitions by any entity or group resulting in beneficial ownership of   
50% or more of the voting stock of the Company, (b) a merger, consolidation,    
business combination or other reorganization of the Company in which the        
stockholders of the Company immediately prior to such transaction beneficially  
own less than 50% of the voting stock of the Company or other surviving         
corporation immediately after such transaction, or (c) the sale or other        
transfer of all or substantially all of the assets of the Company, or (d) any   
transaction resulting in a delisting of the stock of the Company from the New   
York Stock Exchange or any other national exchange.                             

     Section 1.3  Code:  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.                                                      

    Section 1.4  Committee:  "Committee" shall mean the Compensation Committee
of the Board, appointed as provided in Section 8.1.                             

 Section 1.5  Company:  "Company" shall mean The Vons Companies, Inc., a
Michigan corporation.                                                           

Section 1.6  Director:  "Director" shall mean a member of the Board.  

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   Section 1.7  Employee:  "Employee" shall mean any employee (as defined in
accordance with the Regulations and Revenue Rulings then applicable under       
Section 3401(c) of the Code) of the Company, or of any corporation which is then
a Parent Corporation or Subsidiary, whether such employee is so employed at the 
time this Plan is adopted or becomes so employed subsequent to the adoption of  
this Plan.                                                                      

   Section 1.8  Incentive Stock Option:  "Incentive Stock Option" shall mean
an Option which qualifies as an "incentive stock option" under Section 422A of  
the Code and which is designated as an Incentive Stock Option by the Committee. 

  Section 1.9  Non-Qualified Option:  "Non-Qualified Option" shall mean an
Option which is not an Incentive Stock Option and which is designated as a Non- 
Qualified Option by the Committee.                                              

     Section 1.10  Officer:  "Officer" shall mean an officer of the Company, any
Parent Corporation or any Subsidiary.                                           

  Section 1.11  Option:  "Option" shall mean an option to purchase capital
stock of the Company granted under the Plan.  Options granted under the Plan    
shall include both Non-Qualified Options and Incentive Stock Options.           

  Section 1.12  Optionee:  "Optionee" shall mean an Officer or Employee to
whom an Option is granted under the Plan.                                       

Section 1.13  Parent Corporation:  "Parent Corporation" shall mean any
corporation in an unbroken chain of corporations ending with the Company if each
of the corporations other than the Company then owns stock possessing 50% or    
more of the total combined voting power of all classes of stock in one of the   
other corporations in such chain.                                               

    Section 1.14  Plan:  "Plan" shall mean The Vons Companies, Inc. 1990 Stock
Option and Restricted Stock Plan.                                               

Section 1.15  Restricted Stock:  "Restricted Stock" shall mean capital
stock of the Company issued pursuant to Article VI of this Plan.                

    Section 1.16  Restricted Stockholder:  "Restricted Stockholder" shall mean
an Officer or Employee to whom Restricted Stock has been issued under the Plan. 

Section 1.17  Secretary:  "Secretary" shall mean the Secretary of the 
Company.                                                                        

   Section 1.18  Securities Act:  "Securities Act" shall mean the Securities
Act of 1933, as amended.                                                        

Section 1.19  Exchange Act:  "Exchange Act" shall mean the Securities 
Exchange Act of 1934, as amended.                                               

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  Section 1.20  Subsidiary:  "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the        
corporations other than the last corporation in the unbroken chain then owns    
stock possessing 50% or more of the total combined voting power of all classes  
of stock in one of the other corporations in such chain.                        

     Section 1.21  Termination of Employment:  "Termination of Employment" shall
mean the time when the employee-employer relationship between the Optionee or   
the Restricted Stockholder, as the case may be, and the Company, a Parent       
Corporation or a Subsidiary is terminated for any reason, in each case with or  
without cause, but not including a termination by death, total disability or    
retirement, and excluding terminations where there is a simultaneous            
reemployment of the Optionee or Restricted Stockholder by the Company, a Parent 
Corporation or a Subsidiary.  The Committee, in its absolute discretion, shall  
determine the effect of all other matters and questions relating to Termination 
of Employment, including, but not by way of limitation, the question of whether 
a Termination of Employment resulted from a discharge for good cause, and all   
questions of whether particular leaves of absence constitute Terminations of    
Employment.  Termination of Employment shall not include terminations which in  
any way result from a Change of Control, nor shall Termination of Employment    
include removal or demotion of an Officer by the Board or failure by the Board  
to reelect an Officer, unless such removal, demotion or failure to reelect is   
due to a material breach by the Officer of the Company's employee policies.     

ARTICLE II

SHARES SUBJECT TO PLAN

Section 2.1  Shares Subject to Plan:  The shares of stock subject to  
Options or to be issued as Restricted Stock shall be shares of the Company's    
$.10 par value common stock.  The aggregate number of such shares which may be  
issued upon exercise of Options or as Restricted Stock shall not exceed         
6,000,000 shares.  No employee or officer may be granted Options to purchase    
more than 500,000 shares of Common Stock per year.                              

  Section 2.2  Unexercised Options:  If any Option expires or is cancelled
without having been fully exercised, the number of shares subject to such Option
but as to which such Option was not exercised prior to its expiration or        
cancellation may again be subject to Options granted hereunder or be issued as  
Restricted Stock hereunder, subject to the limitations of Section 2.1.          

  Section 2.3  Forfeited Restricted Stock:  Any shares of Restricted Stock
forfeited to the Company pursuant to the restrictions thereon may again be      
issued as Restricted Stock hereunder or be subject to Options granted hereunder,
subject to the limitations of Section 2.1.                                      

Section 2.4  Changes in Company's Shares:  In the event that the      
outstanding shares of the Company's Common Stock are hereafter changed into or  
exchanged for a different number or kind of shares or other securities of the   
Company, or of another corporation, by reason of reorganization, merger         
(including reincorporation effected by means of merger), consolidation,         
recapitalization, reclassification, stock split-up, stock dividend or           
combination of shares, appropriate adjustments shall be made by the Committee in
the number and kind of                                                          

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shares for the purchase of which Options may be granted and in the number and   
kind of Restricted Stock which may be issued, including adjustments of the      
limitations in Section 2.1 on the maximum number and kind of shares which may be
issued on exercise of Options or as Restricted Stock.                           

ARTICLE III 

GRANTING OF OPTIONS 

    Section 3.1  Eligibility:  Any Employee or Officer (including Officers who
are also Directors) of the Company or a Parent Corporation or a Subsidiary shall
be eligible to be granted Options.                                              

    Section 3.2  Qualification of Incentive Stock Options:  No Incentive Stock
Option shall be granted unless such Option, when granted, qualifies as an       
"incentive stock option" under Section 422A of the Code.                        

Section 3.3  Granting of Options:                                     

(a)  The Committee shall from time to time, in its absolute 
discretion:                                       

               (i) Select from among the Employees and Officers (including those
        to whom Options and/or Restricted Stock have been previously granted
      or issued under the Plan) such of them as shall be granted Options
under the Plan; and                                         

               (ii) Determine the number of shares to be subject to such Options
          granted to such selected Employees and Officers, and determine whether
   such Options are to be Incentive Stock Options or Non-Qualified
Options; and                                                

       (iii)  Determine the terms and conditions of such Options
consistent with the Plan.                                   

     (b) Upon the selection of an Officer or Employee to be granted an
     Option, the Committee shall instruct the Secretary to issue such Option and
may impose such conditions on the grant of such Option as it deems    
  appropriate.  Without limiting the generality of the preceding sentence,
the Committee may, in its discretion and on such terms as it deems    
     appropriate, require as a condition of the grant of an Option to an Officer
   or Employee, that the Officer or Employee surrender for cancellation some
     or all of the unexercised Options which have been previously granted to the
     Officer or Employee.  An Option the grant of which is conditioned upon such
    surrender may have an option price lower (or higher) than the option price
of the surrendered Option, may cover the same (or a lesser or greater)
     number of shares as the surrendered Option, may contain such other terms as
     the Committee deems appropriate and shall be exercisable in accordance with
    its terms, without regard to the number of shares, price, option period or
any other term or condition of the surrendered Option.                

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ARTICLE IV    

TERMS OF OPTIONS

       Section 4.1  Option Agreement:  Each Option shall be evidenced by a
written Stock Option Agreement, which shall be executed by the Optionee and an  
authorized officer of the Company and which shall contain such terms and        
conditions as the Committee shall determine, consistent with the Plan.  Stock   
Option Agreements evidencing Incentive Stock Options shall contain such terms   
and conditions as may be necessary to qualify such Options as "incentive stock  
options" under Section 422A of the Code.                                        

Section 4.2  Option Price:                                  

          (a) The price of the shares subject to each Option shall be set by the
   Committee; provided, however, that the price per share of Incentive Stock
Options shall not be less than 100% of the "fair market value" of such
   shares on the date such Option is granted; and provided, further, that in
 the case of an Incentive Stock Option, the price per share shall not be
   less than 110% of the "fair market value" of such shares on the date such
     Option is granted in the event such Option is granted to an individual then
    owning (within the meaning of Section 425(d) of the Code) more than 10% of
     the total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.  In the sole discretion of the  
    Committee the price per share subject to Non-Qualified Options may be less
     than 100% of the "fair market value" of such shares on the date such Option
is granted.                                                           

       (b) For purposes of the Plan, the "fair market value" of a share of
 the Company's common stock as of a given date shall be: (i) the average
    closing price for the ten trading days prior to the exercise or grant date
     of a share of the Company's common stock on the principal exchange on which
   shares of the Company's common stock are then trading, if any; or (ii) if
such stock is not traded on an exchange but is quoted on NASDAQ or a  
    successor quotation system, (1) the last sales price (if the stock is then
     listed as a National Market Issue under the NASD National Market System) or
  (2) the mean between the closing representative bid and asked prices (in
     all other cases) for the stock on the day previous to such date as reported
     by NASDAQ or such successor quotation system; or (iii) if such stock is not
publicly traded on an exchange and not quoted on NASDAQ or a successor
     quotation system, the mean between the closing bid and asked prices for the
    stock on the day previous to such date, as determined in good faith by the
  Committee; or (iv) if the Company's common stock is not publicly traded,
  the fair market value established by the Committee acting in good faith.

Section 4.3  Commencement of Exercisability:                

       (a) Except as the Committee may otherwise provide, no Option may be
  exercised in whole or in part during the first year after such Option is
granted.                                                              

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        (b) Subject to the provisions of Sections 4.3(a), 4.3(c), 4.3(d) and
9.3, Options shall become exercisable at such times and in such       
  installments (which may be cumulative) as the Committee shall provide in
the terms of each individual Option; provided, however, that by a     
  resolution adopted after an Option is granted the Committee may, on such
   terms and conditions as it may determine to be appropriate and subject to
    Sections 4.3(a), 4.3(c), 4.3(d) and 9.3, accelerate the time at which such
Option or any portion thereof may be exercised.                       

      (c) Except as the Committee or this Plan may otherwise provide, no
   portion of an Option which is unexercisable at an Employee's or Officer's
Termination of Employment shall thereafter become exercisable.        

        (d) Notwithstanding any other provision of this Plan, in the case of
   an Incentive Stock Option, the aggregate fair market value (determined at
the time the Incentive Stock Option is granted) of the shares of the  
     Company's stock with respect to which "incentive stock options" (within the
    meaning of Section 422A of the Code) are exercisable for the first time by
the Optionee during any calendar year (under the Plan and all other   
    incentive stock option plans of the Company, any Subsidiary and any Parent
Corporation) shall not exceed $100,000.                               

Section 4.4  Expiration of Options:                                   

          (a) No Incentive Stock Option may be exercised to any extent by anyone
after the first to occur of the following events:                     

          (i) The expiration of ten years from the date the Option was
granted; or                                                 

           (ii) In the case of an Optionee owning (within the meaning of
         Section 425(d) of the Code), at the time the Option was granted, more
          than 10% of the total combined voting power of all classes of stock of
         the Company, any Subsidiary or any Parent Corporation, the expiration
of five years from the date the Option was granted; or      

               (iii)  Except in the case of any Optionee who is disabled (within
         the meaning of Section 22(e)(3) of the Code), the expiration of three
        months from the date of the Optionee's Termination of Employment for
        any reason other than such Optionee's death unless the Optionee dies
within said three-month period; or                          

         (iv) In the case of an Optionee who is disabled (within the
        meaning of Section 22(e)(3) of the Code), the expiration of one year
     from the date of the Optionee's Termination of Employment for any
    reason other than such Optionee's death unless the Optionee dies
within said one-year period; or                             

            (v) The expiration of one year from the date of the Optionee's
death.                                                      

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        (b) No Non-Qualified Option may be exercised to any extent by anyone
    after the expiration of ten years and one day from the date the Option was
granted.                                                              

        (c) Subject to the provisions of Section 4.4(a), the Committee shall
   provide, in the terms of each individual Option, when such Option expires
and becomes unexercisable; and (without limiting the generality of the
 foregoing) the Committee may provide in the terms of individual Options
that said Options expire immediately upon a Termination of Employment.

Section 4.5  Consideration:  In consideration of the granting of the  
Option, the Optionee shall agree, in the written Stock Option Agreement if the  
Optionee is an Employee or an Officer, to remain in the employ of the Company, a
Parent Corporation or a Subsidiary for the period of at least one year after the
Option is granted.  Nothing in this Plan or in any Stock Option Agreement       
hereunder shall confer upon any Optionee any right to continue in the employ of 
the Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its  
Subsidiaries, which are hereby expressly reserved, to discharge any Optionee at 
any time for any reason whatsoever, with or without cause.                      

 Section 4.6  Adjustments in Outstanding Options:  In the event that the
outstanding shares of the stock subject to Options are changed into or exchanged
for a different number or kind of shares of other securities of the Company, or 
of another corporation, by reason of reorganization, merger, consolidation,     
recapitalization, reclassification, stock split-up, stock dividend or           
combination of shares, the Committee shall make an appropriate and equitable    
adjustment in the number and kind of shares as to which all outstanding Options,
or portions thereof then unexercised, shall be exercisable, to the end that     
after such event the Optionee's proportionate interest shall be maintained as   
before the occurrence of such event.  Such adjustment in an outstanding Option  
shall be made without change in the total price applicable to the Option or the 
unexercised portion of the Option (except for any change in the aggregate price 
resulting from rounding off of share quantities or prices) and with any         
necessary corresponding adjustment in Option price per share; provided, however,
that, in the case of Incentive Stock Options, each such adjustment shall be made
in such manner as not to constitute a "modification" within the meaning of      
Section 425(h)(3) of the Code.  Any such adjustment made by the Committee shall 
be final and binding upon all Optionees, the Company and all other interested   
persons.                                                                        

Section 4.7  Merger, Consolidation, Acquisition, Liquidation or       
Dissolution:  Subject to any required action by the shareholders of the Company 
to approve an action which is a Change of Control, if there shall be a Change of
Control, each Optionee shall have the right prior to such Change of Control to  
exercise his Options to the extent not theretofore exercised, whether or not    
they are then exercisable in the ordinary course of events (notwithstanding any 
restrictions contrary to such rights as may be contained elsewhere in this Plan 
or in the written Stock Option Agreement), unless there is a surviving          
corporation or a parent or subsidiary corporation thereof that shall assume     
(with appropriate changes) the outstanding Options or replace them with new     
options of comparable value.  The Company shall give reasonable notice to       
Optionees of any Change of Control.  Every Option or any portion thereof        
outstanding at the time of the Change of Control shall                          

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terminate at such time, unless there is a surviving corporation or a Parent or  
Subsidiary Corporation thereof that shall assume (with appropriate changes) the 
outstanding Options or replace them with new options of comparable value.       

ARTICLE V 

EXERCISE OF OPTIONS 

Section 5.1  Person Eligible to Exercise:  During the lifetime of the 
Optionee, only he may exercise an Option granted to him, or any portion thereof.
After the death of the Optionee, any exercisable portion of an Option may, prior
to the time when such portion becomes unexercisable under Sections 4.4 or 4.7,  
be exercised by the Optionee's personal representative or by any person         
empowered to do so under the deceased Optionee's will or under the then         
applicable laws of descent and distribution.                                    

    Section 5.2  Partial Exercise:  At any time and from time to time prior to
the time when any exercisable Option or exercisable portion thereof becomes     
unexercisable under Sections 4.4 or 4.7, such exercisable Option or portion     
thereof may be exercised in whole or in part; provided, however, that the       
Company shall not be required to issue fractional shares and the Committee may, 
by the terms of the Option, require any partial exercise to be with respect to a
specified minimum number of shares.                                             

     Section 5.3  Manner of Exercise:  An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary or the    
Secretary's office all of the following prior to the time when such exercisable 
Option or portion thereof becomes unexercisable under Sections 4.4 or 4.7:      

     (a) Notice in writing signed by the Optionee or other person then
  entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules 
established by the Committee; and                                     

(b)  Either:                                                

        (i) Full payment (in cash or by check) for the shares with
    respect to which such Option or portion is thereby exercised; or

     (ii) With the consent of the Committee, a full recourse
         promissory note bearing interest (of at least such rate as shall then
        preclude the imputation of interest under the Code) and payable upon
        such terms as may be prescribed by the Committee.  The Committee may
         also prescribe the form of such note and the security to be given for
     such note.  No Option may, however, be exercised by delivery of a
         promissory note or by a loan from the Company when or where such loan
or other extension of credit is prohibited by law; or       

               (iii)  With the consent of the Committee, shares of the Company's
         common stock owned by the Optionee, duly endorsed for transfer to the
    Company, with a fair market value (as determinable under Section
4.2(b)) on                                                  

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     the date of delivery equal to the aggregate purchase price of the
  shares with respect to which such Option or portion is thereby
       exercised (Note: The Committee may decline to accept as payment for
         any reason shares of the Company's Common Stock owned by the Optionee
    including shares owned by Optionee for less than six months); or

       (iv) Any combination of the consideration provided in the
foregoing subsections (i), (ii) or (iii); and               

   (c) Such representations and documents as the Committee, in its
     absolute discretion, deems necessary or advisable to effect compliance with
 all applicable provisions of the Securities Act or Exchange Act and any
    other federal or state securities laws or regulations.  The Committee may,
    in its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance, including, without limitation, 
   placing legends on share certificates and issuing stop-transfer orders to
transfer agents and registrars; and                                   

          (d) In the event that the Option or portion thereof shall be exercised
   pursuant to Section 5.1 by any person or persons other than the Optionee,
  appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.                                            

   Section 5.4  Conditions to Issuance of Stock Certificates:  The shares of
stock issuable and deliverable upon the exercise of an Option, or any portion   
thereof, may be either previously authorized but unissued shares or issued      
shares which have then been reacquired by the Company.  The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to           
fulfillment of all of the following conditions:                                 

          (a) The admission of such shares to listing on all stock exchanges, if
any, on which such class of stock is then listed; and                 

         (b) The Completion of any registration or other qualification of such
   shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental   
     regulatory body which the Committee shall, in its absolute discretion, deem
necessary or advisable; and                                           

          (c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and               

         (d) The payment to the Company of all amounts which it is required to
    withhold under federal, state or local law in connection with the exercise
of the Option (Note:  The Company, at its sole option, may elect to   
   withhold a number of the Company's shares either at the time of the grant
   or exercise of an Option the fair market value of which would satisfy any
withholding tax on said exercise or grant); and                       

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          (e) The lapse of such reasonable period of time following the exercise
    of the Option as the Committee may establish from time to time for reasons
of administrative convenience.                                        

Section 5.5  Rights as Shareholders:  A holder of an Option or Options
shall not be, nor shall such holder have any of the rights or privileges of, a  
shareholder of the Company in respect of any shares purchasable upon the        
exercise of any part of the Option or Options unless and until a certificate or 
certificates representing such shares have been issued by the Company to such   
holder.                                                                         

Section 5.6  Transfer Restrictions:  The Committee, in its absolute   
discretion, may impose such restrictions on the transferability of the shares   
purchasable upon the exercise of an Option as it deems appropriate. Any such    
restriction shall be set forth in the respective Stock Option Agreement and may 
be referred to on the certificates evidencing such shares.  The Committee may   
require the Employee or Officer to give the Company prompt notice of any        
disposition of shares of stock acquired by exercise of an Incentive Stock Option
within two years from the date of grant of such Option or one year after the    
issuance of such shares to such Employee.  The Committee may direct that the    
certificates evidencing shares acquired upon exercise of an Incentive Stock     
Option refer to such requirement to give prompt notice of disposition.          

ARTICLE VI

ISSUANCE OF RESTRICTED STOCK

    Section 6.1  Eligibility:  Any Employee or Officer (including Officers who
are also Directors) of the Company or a Parent Corporation or a Subsidiary shall
be eligible to be issued Restricted Stock.                                      

Section 6.2  Issuance of Restricted Stock:                            

          (a) The Committee shall from time to time, in its absolute discretion:

               (i) Select from among the Employees and Officers (including those
        to whom Options and/or Restricted Stock have been previously granted
        or issued under the Plan) such of them as shall be issued Restricted
Stock under the Plan; and                                   

           (ii) Determine the number of shares of Restricted Stock to be
issued to such selected Employees and Officers; and         

          (iii)  Determine the terms and conditions applicable to such
Restricted Stock, consistent with the Plan.                 

  (b) Shares issued as Restricted Stock may be either previously
    authorized but unissued shares or issued shares which have been reacquired
by the Company.                                                       

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    Legal consideration, but (unless the Committee in its discretion specifies
otherwise) no cash payment, will be required for each issuance of     
Restricted Stock.                                                     

 (c) Upon the selection of an Employee or Officer to be issued
    Restricted Stock, the Committee shall instruct the Secretary to issue such
Restricted Stock and may impose such conditions on the issue of such  
Restricted Stock as it deems appropriate.                             

ARTICLE VII 

TERMS OF RESTRICTED STOCK 

    Section 7.1  Restricted Stock Agreement:  Restricted Stock shall be issued
only pursuant to a written Restricted Stock Agreement, which shall be executed  
by the Restricted Stockholder and an authorized Officer of the Company and which
shall contain such terms and conditions as the Committee shall determine,       
consistent with the Plan.                                                       

Section 7.2  Consideration:                                           

          (a) As partial consideration for the issuance of the Restricted Stock,
the Restricted Stockholder shall agree in the written Restricted Stock
   Agreement, if the Restricted Stockholder is an Employee or an Officer, to
   remain in the employ of the Company, a Parent Corporation or a Subsidiary
for a period at least one year after the Restricted Stock is issued.  
   Nothing in this Plan or in any Restricted Stock Agreement hereunder shall
    confer upon any Restricted Stockholder any right to continue in the employ
     of the Company, any Parent Corporation or any Subsidiary or shall interfere
with or restrict in any way the rights of the Company, its Parent     
    Corporations and its Subsidiaries, which are hereby expressly reserved, to
     discharge any Restricted Stockholder at any time for any reason whatsoever,
with or without cause.                                                

         (b) If the Committee requires a cash payment as partial consideration
     for the issuance of the Restricted Stock, the terms of such payment will be
set forth in the written Restricted Stock Agreement, the terms and    
    conditions of which may include either (or both) (i) full payment (in cash
   or by check) or (ii) a full recourse promissory note bearing interest (of
    at least such rate as shall then preclude the imputation of interest under
the Code) and payable upon such terms as may be prescribed by the     
    Committee.  The Committee may also prescribe the form of such note and any
   security to be given for such note.  No Restricted Stock may, however, be
 paid for by delivery of a promissory note or by a loan from the Company
    when or where such loan or other extension of credit is prohibited by law.

      (c) The Restricted Stockholder shall agree in the Restricted Stock
   Agreement to pay to the Company all amounts which the Company is required
to withhold under federal, state or local law in connection with the  
  issuance, vesting or sale of Restricted Stock.  The Company, at its sole
    option, may elect to withhold a number of the Company's shares at the time
of issuance of the Restricted Stock, the                              

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  fair market value of which would satisfy any withholding tax due or that
may become due on an actual or estimated basis.                       

Section 7.3  Rights as Shareholders:  Upon delivery of the shares of  
Restricted Stock to the escrow holder pursuant to Section 7.7, the Restricted   
Stockholder shall have all the rights of a stockholder with respect to said     
shares, subject to the restrictions in his Restricted Stock Agreement, including
the right to vote the shares and to receive all dividends and other             
distributions paid or made with respect to the shares.                          

 Section 7.4  Restrictions:  All shares of Restricted Stock issued under
this Plan (including any shares received by holders thereof as a result of stock
dividends, stock splits or any other forms of recapitalization) shall be subject
to such restrictions as the Committee shall provide in the terms of each        
individual Restricted Stock Agreement; provided, however, that by a resolution  
adopted after the Restricted Stock is issued, the Committee may, on such terms  
and conditions as it may determine to be appropriate and subject to Section 9.3,
remove any or all of the restrictions imposed by the terms of the Restricted    
Stock Agreement.  All restrictions imposed pursuant to this Section 7.4 shall   
expire within ten years after the date of issuance.   Restricted Stock may not  
be sold, transferred, pledged, assigned, hypothecated, encumbered or otherwise  
alienated until all restrictions are terminated or expire, except that subject  
to Section 7.7, a Restricted Stockholder may transfer Restricted Stock which he 
has been granted, but which still contain restrictions, to his spouse, his      
lineal descendants, or to a trust for the benefit of the Restricted Stockholder,
his spouse or his lineal descendants, provided that such transferee agrees in   
advance in writing to be bound by all the terms and conditions of the Plan and  
the Restricted Stock Agreement.                                                 

    Section 7.5  Forfeiture of Restricted Stock:  The Committee may provide in
the terms of each individual Restricted Stock Agreement that the Restricted     
Stock then subject to restrictions under the Restricted Stock Agreement be      
forfeited by the Restricted Stockholder back to the Company immediately upon a  
Termination of Employment; provided, however, that provision cannot be written  
to require a forfeiture in the event of a Change of Control or in the event of a
Termination of Employment because of the Employee's or Officer's normal         
retirement, death, total disability or early retirement with the consent of the 
Board.                                                                          

    Section 7.6  Merger, Consolidation, Acquisition, Liquidation, Dissolution:
Subject to any required action by the shareholders of the Company to approve an 
action which is a Change of Control, if there shall be a Change of Control, then
upon such event and notwithstanding any provisions of this Plan (including,     
without limitation, Sections 7.4, 7.5, or 7.8), the Restricted Stock Agreement  
or any other agreement, all Restricted Stock then issued under this Plan shall  
immediately vest and all restrictions and forfeiture provisions shall           
immediately expire and cease, except that any cash consideration previously     
requested by the Committee shall be paid in full to the Company, or its         
successor within ninety days of the effective date of a Change in Control.      

  Section 7.7  Escrow:  The Secretary shall retain physical custody of the
certificates representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement expire or shall have been removed;         
provided, however, that in no event shall any                                   

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Restricted Stockholder retain physical custody of any certificates representing 
Restricted Stock issued to him that remains subject to any restrictions under   
the Restricted Stock Agreement.                                                 

 Section 7.8  Legend:  In order to enforce the restrictions imposed upon
shares of Restricted Stock issued hereunder, the Committee shall cause a legend 
or legends to be placed on certificates representing all shares of Restricted   
Stock that are subject to restrictions under Restricted Stock Agreements, which 
legend or legends shall make appropriate reference to the conditions imposed    
thereby.                                                                        

ARTICLE VIII

ADMINISTRATION

Section 8.1 Compensation Committee:  The Compensation Committee shall 
consist of at least three Directors who are not also employees of the Company   
appointed by and holding office at the pleasure of the Board.  Appointment of   
Committee members shall be effective upon acceptance of appointment.  Committee 
members may resign at any time by delivering written notice of resignation to   
the Board.  Vacancies in the Committee shall be filled by the Board in          
accordance with the Company's Articles and By-Laws.                             

   Section 8.2  Duties and Powers of Committee:  It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with  
its provisions.  The Committee shall have the power to interpret the Plan, the  
Options, and the Restricted Stock and to adopt such rules for the               
administration, interpretation and application of the Plan as are consistent    
therewith and to interpret, amend or revoke any such rules.  Any such           
interpretations and rules in regard to Incentive Stock Options shall be         
consistent with the basic purpose of the Plan to grant "incentive stock options"
within the meaning of Section 422A of the Code.  In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and     
duties of the Committee under the Plan.                                         

   Section 8.3  Majority Rule:  The Committee shall act by a majority of its
members in office.  The Committee may act either by vote at a meeting or by a   
memorandum or other written instrument signed by a majority of the Committee.   

 Section 8.4  Compensation; Professional Assistance; Good Faith Actions:
Members of the Committee shall receive such compensation for their services as  
members as may be determined by the Board.  All expenses and liabilities        
incurred by members of the Committee in connection with the administration of   
the Plan shall be borne by the Company.  The Committee may, with the approval of
the Board, employ attorneys, consultants, accountants, appraisers, brokers or   
other persons.  The Committee, the Company and its Employees, Officers and      
Directors shall be entitled to rely upon the advice, opinions or valuations of  
any such persons.  All actions taken and all interpretations and determinations 
made by the Committee in good faith shall be final and binding upon all         
Optionees and Restricted Stockholders, the Company and all other interested     
persons.  No member of the Committee shall be personally liable for any action, 
determination or interpretation made in good faith                              

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with respect to the Plan, the Options, or Restricted Stock, and all members of  
the Committee shall be fully protected, indemnified and held harmless by the    
Company with respect to any such action, determination or interpretation in     
accordance with the Company's Articles and By-Laws.                             

ARTICLE IX

OTHER PROVISIONS

 Section 9.1  Options and Restricted Stock Not Transferable:  No Option,
Restricted Stock or interest or right therein or part thereof shall be subject  
to or liable for the debts, contracts or engagements of the Optionee or         
Restricted Stockholder, as the case may be, or his successors in interest or    
shall be subject to disposition by transfer, alienation, anticipation, pledge,  
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any     
attempted disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 9.1 shall prevent transfers by will or by 
the applicable laws of descent and distribution, or as provided for in Section  
7.4.                                                                            

  Section 9.2  Amendment, Suspension or Termination of the Plan:  The Plan
may be wholly or partially amended or otherwise modified, suspended or          
terminated at any time or from time to time by the Board or the Committee.  The 
Board or the Committee may amend or modify the Plan to comply with or take      
advantage of changes in any federal or state laws, regulations, or rulings,     
including, without limitation, changes, modifications or additions to the       
regulations and rulings of the Securities and Exchange Commission and in        
particular Regulation 16b-3 of the Exchange Act.  However, without approval of  
the Company's shareholders given within 12 months before or after the action by 
the Board or the Committee, no action of the Board or the Committee may, except 
as provided in Section 2.4, increase any limit imposed in Section 2.1 on the    
maximum number of shares which may be issued on exercise of Options or as       
Restricted Stock, modify the eligibility requirements of Section 3.1 or Section 
6. 1, reduce the minimum Option price requirements of Section 4.2(a), permit the
grant of options or issuance of restricted stock to Directors or extend the     
limit imposed in this Section 9.2 on the period during which Options may be     
granted or Restricted Stock may be issued.  Neither the amendment, suspension   
nor termination of the Plan shall, without the consent of the holder of the     
Option or the Restricted Stockholder, alter or impair any rights or obligations 
under any Option theretofore granted or Restricted Stock theretofore issued.  No
Option may be granted and no Restricted Stock may be issued during any period of
suspension nor after termination of the Plan, and in no event may any Option be 
granted or any Restricted Stock issued under this Plan after the first to occur 
of the following events:                                                        

        (a) The expiration of ten years from the date the Plan is adopted by
the Board; or                                                         

         (b) The expiration of ten years from the date the Plan is approved by
the Company's shareholders under Section 9.3.                         

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Section 9.3  Effective Date of Plan; Approval of Plan by Shareholders:
This Plan shall become effective immediately upon adoption by the Board of      
Directors and approval of the Company's shareholders within 12 months after the 
date of the Board's initial adoption of the Plan.  Options be granted or        
Restricted Stock may be issued prior to such shareholder approval; provided,    
however, that such Options shall not be exercisable and such Restricted Stock   
shall not vest prior to the time when the Plan is approved by the shareholders; 
and provided further, however, that if such approval has not been obtained at   
the end of said 12-month period, all Options previously granted and all         
Restricted Stock previously issued under the Plan shall thereupon be cancelled  
and become null and void.                                                       

    Section 9.4  Effect of Plan Upon Other Option and Compensation Plans:  The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company, any Parent Corporation or any Subsidiary.  Nothing in
this Plan shall be construed to limit the right of the Company, any Parent      
Corporation or any Subsidiary (a) to establish any other forms of incentives or 
compensation for Employees or Officers of the Company, any Parent Corporation or
any Subsidiary or (b) to grant or assume options or to issue restricted stock   
otherwise than under this Plan in connection with any proper corporate purposes,
including, but not by way of limitation, the grant or assumption of options or  
the issuance of restricted stock in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of  
any corporation, firm or association.                                           

  Section 9.5  Titles: Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Plan.     

   I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of The Vons Companies, Inc., on January 24, 1990.                     

Executed on this 24th day of January, 1990.                           

      By:   ROBERT P. BERMINGHAM
            --------------------
            Robert P. Bermingham
 Secretary

(Corporate Seal)                                                                

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I hereby certify that the foregoing Plan was duly approved by the     
shareholders of The Vons Companies, Inc., on the 17th day of May, 1990.         

Executed on this 17th day of May, 1990.                               

      By:   ROBERT P. BERMINGHAM
            --------------------
            Robert P. Bermingham
 Secretary

(Corporate Seal)                                                                

16

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		1/23/00		7
		12/31/97		25
		9/5/97		19
		12/31/96		19
		11/30/96		26
For Period End:		5/8/96		2		28
Filed on:		3/28/96		2		28
		3/11/96		2		28
		2/21/96		7
		1/1/96		18
		12/31/95		7		26			10-K405,  11-K
		12/29/95		17
		9/6/95		18
		5/3/95		16					DEF 14A
		1/31/95		25
		1/2/95		19
		4/26/94		18
		8/29/93		14
		5/13/92		20
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