Stock Option Gain Deferred Compensation Plan - Safeway Inc.
SAFEWAY INC. STOCK OPTION GAIN
DEFERRED COMPENSATION PLAN
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SAFEWAY INC. STOCK OPTION GAIN
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS...................................................................................1
Section 1.1.
Account..................................................................................................1
Section 1.2. Administrator.........................................................................1
Section 1.3. Board.................................................................................1
Section 1.4. Code..................................................................................1
Section 1.5. Committee.............................................................................2
Section 1.6. Common Stock..........................................................................2
Section 1.7. Company...............................................................................2
Section 1.8. Deferral..............................................................................2
Section 1.9. Deferral Election Form................................................................2
Section 1.10. Disability...........................................................................2
Section 1.11. Employee.............................................................................2
Section 1.12. ERISA................................................................................2
Section 1.13. Exchange Act.........................................................................3
Section 1.14. Exercise Date........................................................................3
Section 1.15. Exercise Declaration Form............................................................3
Section 1.16. Fair Market Value....................................................................3
Section 1.17. Independent Director.................................................................3
Section 1.18. Military Leave.......................................................................3
Section 1.19. Participant..........................................................................4
Section 1.20. Plan.................................................................................4
Section 1.21. Plan Year............................................................................4
Section 1.22. Retirement...........................................................................4
Section 1.23. Rule 16b-3...........................................................................4
Section 1.24. Separation from Service..............................................................4
Section 1.25. Stock-for-Stock Exercise.............................................................5
Section 1.26. Stock Option.........................................................................5
Section 1.27. Stock Option Gains...................................................................5
Section 1.28. Sub-Account..........................................................................5
Section 1.29. Subsidiary...........................................................................5
Section 1.30. Trust................................................................................5
Section 1.31. Trustee..............................................................................5
Section 1.32. Unforeseeable Emergency..............................................................5
Section 1.33. Valuation Date.......................................................................6
ARTICLE II. ELIGIBILITY..................................................................................6
Section 2.1. Requirements for Participation........................................................6
Section 2.2. Election to Participate...............................................................6
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Section 2.3. Content of Deferral Election Form.....................................................6
Section 2.4. Continuation of Participation.........................................................6
ARTICLE III. PARTICIPANTS' DEFERRALS....................................................................7
Section 3.1. Deferral of Stock Option Gains........................................................7
Section 3.2. Amount of Deferral....................................................................7
Section 3.3. Deferral Conditions...................................................................7
Section 3.4. Method of Exercise....................................................................8
Section 3.5. Minimum and Maximum Deferrals.........................................................8
ARTICLE IV. DEFERRAL ACCOUNTS...........................................................................9
Section 4.1. Account Maintenance; Balance..........................................................9
Section 4.2. Crediting of Dividends................................................................9
Section 4.3. Fractional Shares.....................................................................9
Section 4.4. Statement of Account..................................................................9
ARTICLE V. DISTRIBUTIONS OF ACCOUNTS...................................................................10
Section 5.1. Commencement of Distributions........................................................10
Section 5.2. Form of Distribution.................................................................10
Section 5.3. Irrevocability of Elections; Amendments to Elections.................................11
Section 5.4. Withdrawal for Unforeseeable Emergency...............................................11
ARTICLE VI. SEPARATION FROM SERVICE....................................................................12
Section 6.1. Separation from Service Other than for Disability or Retirement......................12
Section 6.2. Disability or Retirement.............................................................12
ARTICLE VII. PROVISIONS RELATING TO SECTION 16 OF THE EXCHANGE ACT AND SECTION 162(m) OF THE CODE.....12
Section 7.1. Compliance with Section 16 of the Exchange Act.......................................12
Section 7.2. Compliance with Code Section 162(m)..................................................13
ARTICLE VIII. ADMINISTRATIVE PROVISIONS................................................................13
Section 8.1. Administrator's Duties and Powers....................................................13
Section 8.2. Limitations Upon Powers..............................................................14
Section 8.3. Final Effect of Administrator Action.................................................14
Section 8.4. Committee............................................................................14
Section 8.5. Majority Rule........................................................................14
Section 8.6. Indemnification by Company; Liability Insurance......................................14
Section 8.7. Recordkeeping........................................................................15
Section 8.8. Inspection of Records................................................................15
Section 8.9. Identification of Fiduciaries........................................................15
Section 8.10. Procedure for Allocation of Fiduciary Responsibilities..............................15
Section 8.11. Claims Procedure....................................................................16
Section 8.12. Conflicting Claims..................................................................17
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Section 8.13. Service of Process..................................................................17
ARTICLE IX. MISCELLANEOUS PROVISIONS...................................................................17
Section 9.1. Limitation on Transfer...............................................................17
Section 9.2. Amendment/Termination of the Plan....................................................18
Section 9.3. Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.........................18
Section 9.4. Tax Withholding......................................................................19
Section 9.5. Unfunded Status of Plan; Unsecured General Creditor..................................20
Section 9.6. Establishment of Trusts..............................................................21
Section 9.7. Limitation on Rights of Employees....................................................21
Section 9.8. No Rights as Stockholder.............................................................21
Section 9.9. Satisfaction of Claims...............................................................22
Section 9.10. Compliance..........................................................................22
Section 9.11. Sources of Stock....................................................................22
Section 9.12. Exempt ERISA Plan...................................................................22
Section 9.13. Notice22
Section 9.14. Errors and Misstatements............................................................23
Section 9.15. Payment on Behalf of Minor, Etc.....................................................23
Section 9.16. Governing Law.......................................................................23
Section 9.17. Pronouns and Plurality..............................................................23
Section 9.18. Titles23
Section 9.19. References..........................................................................23
Section 9.20. Assumption of Risk..................................................................24
Section 9.21. Severability........................................................................24
Section 9.22. Status24
ARTICLE X. EFFECTIVE DATE..............................................................................24
Section 10.1. Effective Date......................................................................24
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SAFEWAY INC. STOCK OPTION GAIN
DEFERRED COMPENSATION PLAN
Safeway Inc., a Delaware corporation, by resolution of its
Board of Directors has adopted this Safeway Inc. Stock Option Gain Deferred
Compensation Plan (the "Plan"), effective as of November 1, 1999, for the
benefit of its eligible employees.
The Plan is a nonqualified deferred compensation plan
pursuant to which certain eligible employees of the Company (as defined below)
may elect to defer the receipt of shares of the Company's common stock which
they would otherwise receive upon the exercise of Stock Options (as defined
below). The Plan is unfunded and is maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in the Plan with the
first letter capitalized, they shall have the meaning
specified below unless the context clearly indicates to the contrary.
Section 1.1. Account
"Account" shall mean, with respect to any Participant, the
account and Sub-Accounts established for the Participant pursuant to Article III
which are credited with shares of Common Stock attributable to (i) Deferrals
pursuant to Section 3.2, (ii) Common Stock Dividends pursuant to Section 4.2(a),
and (iii) Non-Stock Dividends pursuant to Section 4.2(b). Accounts shall be
maintained solely as bookkeeping entries by the Company to evidence unfunded
obligations of the Company.
Section 1.2. Administrator
"Administrator" shall mean the Committee appointed pursuant
to Section 8.4 to administer the Plan, or such other person or persons to whom
the Committee has delegated its duties pursuant to Section 8.1.
Section 1.3. Board
"Board" shall mean the Board of Directors of Safeway Inc.
Section 1.4. Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
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Section 1.5. Committee
"Committee" shall mean the Compensation Committee of the
Board or another committee or subcommittee of the Board appointed to administer
the Plan pursuant to Section 8.4.
Section 1.6. Common Stock
"Common Stock" shall mean shares of the common stock of the
Company, par value $0.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock.
Section 1.7. Company
"Company" shall mean Safeway Inc., a Delaware corporation,
and any successor company which assumes or continues the Plan under Section
9.3(b).
Section 1.8. Deferral
"Deferral" or "Deferrals" shall mean, as appropriate, the
amount of individual or aggregate Stock Option Gains which a Participant defers
under the Plan.
Section 1.9. Deferral Election Form
"Deferral Election Form" shall mean the form on which a
Participant designates a specified Stock Option or portion of a Stock Option
which, when exercised, shall result in the deferral of the ensuing Stock Option
Gains thereon under the Plan. The Deferral Election Form shall be in such form
as may be prescribed by the Administrator.
Section 1.10. Disability
"Disability" shall mean a "disability" as defined in the
Company's long-term disability plan, as then in effect.
Section 1.11. Employee
"Employee" shall mean any person who renders services to
the Company or a Subsidiary in the status of an employee as that term is defined
in Code Section 3121(d), including officers but not including directors who
serve solely in that capacity.
Section 1.12. ERISA
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
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Section 1.13. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Section 1.14. Exercise Date
"Exercise Date" shall mean, with respect to a Stock Option,
the date on which the Participant exercises such Stock Option.
Section 1.15. Exercise Declaration Form
"Exercise Declaration Form" shall mean the form filed with
the Administrator indicating the date(s) on which
Options previously designated on a Deferral Election Form are to be exercised.
The Exercise Declaration Form shall be in such form as may be prescribed by the
Administrator.
Section 1.16. Fair Market Value
"Fair Market Value" of a share of Common Stock as of a
given date shall be (a) the closing price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on such date, or if shares were not traded on such date,
then on the next preceding date on which a trade occurred, or (b) if Common
Stock is not traded on an exchange but is quoted on NASDAQ or a successor
quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on such date as reported by NASDAQ or such successor
quotation system; or (c) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Administrator acting in good
faith. In determining the Fair Market Value of the Company's Common Stock under
subsection (a) of this Section 1.16, the Administrator may rely on the closing
price as reported in the New York Stock Exchange composite transactions
published in the Western Edition of the Wall Street Journal.
Section 1.17. Independent Director
"Independent Director" shall mean a member of the Board who
is not an Employee of the Company.
Section 1.18. Military Leave
Any Employee who leaves the Company directly to perform
service in the Armed Forces of the United States or the United States Public
Health Service under conditions entitling him to reemployment rights as provided
in the laws of the United States shall, solely for the purposes of the Plan and
irrespective of whether he is compensated by the Company during such period of
service, be presumed on "Military Leave." If such Employee voluntarily resigns
from the Company during such period of service, or if he fails to make
application for reemployment within the period specified by such laws for the
preservation of his reemployment rights, such
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Employee shall be regarded as having had a Separation from Service by
resignation on the day such Military Leave expired.
Section 1.19. Participant
"Participant" shall mean any person covered by the Plan as
provided in Article II.
Section 1.20. Plan
"Plan" shall mean this Safeway Inc. Stock Option Gain
Deferred Compensation Plan, as amended from time to time.
Section 1.21. Plan Year
"Plan Year" shall mean the twelve-month period commencing
on January 1 and ending on December 31.
Section 1.22. Retirement
"Retirement" shall mean a Participant's voluntary
retirement from employment with the Company on or after age 55
in accordance with the Company's retirement policies as then in effect.
Section 1.23. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
Section 1.24. Separation from Service
(a) "Separation from Service" of an Employee shall mean his
resignation from or discharge by the Company or a Subsidiary, or his death or
retirement, but shall not include his transfer among the Company and any of its
Subsidiaries.
(b) A leave of absence or sick leave authorized by the
Company in accordance with established policies, a vacation period, a temporary
layoff for lack of work or a Military Leave shall not constitute a Separation
from Service; provided, however, that
(i) continuation upon a temporary layoff for lack
of work for a period in excess of six months shall be
considered a discharge effective as of the commencement of
such period;
(ii) failure to return to work upon expiration of
any leave of absence, sick leave, Military Leave or
vacation or within three days after recall from a temporary
layoff for lack of work shall be considered a resignation
effective as of the date of expiration of such leave of
absence, sick leave, Military Leave or vacation or the
expiration of the third day after recall from any such
temporary layoff.
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Section 1.25. Stock-for-Stock Exercise
"Stock-for-Stock Exercise" shall mean the exercise of a
Stock Option in the manner described in Section 3.4.
Section 1.26. Stock Option
"Stock Option" shall mean an option to purchase Common
Stock which is not an incentive stock option within the meaning of Section 422
of the Code.
Section 1.27. Stock Option Gains
"Stock Option Gains" shall mean the amount of a
Participant's net gain resulting from the Participant's a Stock-for-Stock
Exercise of Stock Options.
Section 1.28. Sub-Account
"Sub-Account" shall mean, with respect to each Stock Option
for which a Participant has filed a Deferral
Election Form, the portion of the Participant's Account attributable to such
Stock Option.
Section 1.29. 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
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
Section 1.30. Trust
"Trust" shall mean the trust or trusts, if any, established
by the Company under the Plan pursuant to Section 9.6.
Section 1.31. Trustee
"Trustee" shall mean a trustee of a Trust.
Section 1.32. Unforeseeable Emergency
"Unforeseeable Emergency" shall mean, with respect to a
Participant, an unanticipated emergency that is caused by an event beyond the
control of the Participant and that would result in severe financial hardship to
the Participant if early withdrawal from the Participant's Account were not
permitted, as determined by the Administrator in its sole discretion.
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Section 1.33. Valuation Date
"Valuation Date" shall mean the date on which the number of
shares of Common Stock credited to an Account is determined from time to time
pursuant to the terms of the Plan.
ARTICLE II.
ELIGIBILITY
Section 2.1. Requirements for Participation
Any management or highly compensated Employee who is
designated by the Administrator in writing shall be eligible to be a Participant
in the Plan.
Section 2.2. Election to Participate
The Administrator shall deliver to each Employee who may be
a Participant in the Plan for a Plan Year a Deferral Election Form on which the
Participant may elect to defer his Stock Option Gains under Article III. An
Employee shall become a Participant in the Plan after properly completing and
signing a Deferral Election Form and timely submitting it to the Administrator.
Section 2.3. Content of Deferral Election Form
The Participant shall set forth on the Deferral Election
Form:
(a) his consent that he, his successors in interest and
assigns and all persons claiming under him shall be bound, to the extent
authorized by law, by the statements contained therein and by the provisions of
the Plan as they now exist, and as they may be amended from time to time;
(b) the specific Stock Option Gains (including the specific
Stock Option to which such Stock Option Gains relate) to be deferred under the
Plan;
(c) the times at which his Account attributable to such
Stock Option Gains shall be distributed to him under the Plan; and
(d) such other information as the Administrator may
determine in its sole discretion.
Section 2.4. Continuation of Participation
An Employee who has elected to participate in the Plan by
properly submitting a Deferral Election Form shall continue as a Participant in
the Plan until the entire balance of the Participant's Account has been
distributed to the Participant. In the event a Participant becomes ineligible to
continue participation in the Plan, but remains an Employee of the Company, the
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Participant's Account shall be held and administered in accordance with the Plan
until such time as the Participant's Account is completely distributed.
ARTICLE III.
PARTICIPANTS' DEFERRALS
Section 3.1. Deferral of Stock Option Gains
Subject to the terms and conditions set forth herein and
such terms and conditions as the Administrator may determine, Participants may
elect to defer Stock Option Gains attributable to the exercise of a Stock Option
or a specified portion of a Stock Option by timely completing and delivering to
the Administrator a Deferral Election Form.
Section 3.2. Amount of Deferral
With respect to each Deferral Election Form properly
delivered to the Administrator, the Company shall, on the Exercise Date of the
Stock Option to which such Deferral Election Form relates, credit the
Participant's Account and/or Sub-Account with that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the amount of Stock Option
Gains attributable to such Deferral by (y) the Fair Market Value of a share of
Common Stock on the Exercise Date.
Section 3.3. Deferral Conditions
In order for an election to defer Stock Option Gains to be
valid, all of the following conditions must be satisfied:
(a) A properly completed and executed Deferral Election
Form must be timely delivered to the Administrator and accepted by the
Administrator (i) no later than the last day of a Plan Year preceding the Plan
Year in which the Exercise Date occurs and (ii) at least six (6) months prior to
the Exercise Date, except with respect to (x) any Stock Option which by its
terms will expire on or before March 31, 2000, in which case the Deferral
Election Form must be delivered to and accepted by the Administrator at least
four (4) months prior to the Exercise Date or (y) any Stock Options which are
held by an Employee who becomes a Participant in the Plan after 1999 and which
will expire less than six (6) months after the date on which the Employee
becomes a Participant, in which case the Participant's Deferral Election Form
with respect to any such Stock Option must be delivered to and accepted by the
Administrator at least four (4) months prior to the Exercise Date;
(b) Not later than five (5) days prior to exercise of a
Stock Option designated on a Deferral Election Form, the Participant shall file
with the Administrator an Exercise Declaration Form with respect to such Stock
Option which shall state the date upon which the Stock Option is to be
exercised, identify the shares of Common Stock which the Participant will use to
exercise the Option and contain any additional information which the
Administrator may require;
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(c) The Stock Option must be exercised pursuant to a
Stock-for-Stock Exercise;
(d) The Common Stock delivered by the Participant to
exercise the Stock Option must comply with the provisions of Section 3.4 hereof;
(e) The Participant must have paid to the Company any
amounts required to be withheld by the Company to satisfy FICA, Medicare and any
other applicable taxes which are payable with respect to the exercise of the
Stock Option; and
(f) Such election(s) to defer shall be irrevocable and
shall not be amendable, except to the extent permitted by Section 5.3.
Section 3.4. Method of Exercise
A Participant exercising a Stock Option with respect to
which the Participant has made an effective deferral
election shall effect such exercise by actually delivering to the whole shares
of Company Common Stock with a Fair Market Value on the Exercise Date equal to
the aggregate exercise price of the Stock Option in the manner contemplated by
the Internal Revenue Service's Revenue Ruling 80-244. If the aggregate exercise
price would require the payment of a fractional share, such fractional share
shall be paid in cash and not in Common Stock. Common Stock used for this
purpose shall be either (i) Common Stock which was not acquired by the
Participant from the Company, with a loan or other extension of credit by the
Company or otherwise in a transaction involving the Company, or (ii) Common
Stock acquired by the Participant in a transaction involving the Company and
which has been held by the Participant for a period of more than six (6) months
prior to the Exercise Date; provided, however, that if the Participant delivers
to the Company Common Stock acquired through the exercise of an "incentive stock
option" as defined in Section 422 of the Code, such Common Stock shall have been
held by the Participant for a period of more than (i) twenty-four (24) months
after the date on which such incentive stock option was granted to the
Participant and (ii) twelve (12) months after the date on which such incentive
stock option was exercised by the Participant.
Section 3.5. Minimum and Maximum Deferrals
The Administrator may, in its absolute discretion,
establish a minimum and/or maximum amount of Stock Option
Gains which a Participant may defer under the Plan, either in the aggregate or
on an annual basis. Subject to change by the Administrator, as of the effective
date of this Plan, the minimum number of shares of Common Stock with respect to
which a Participant may elect to defer Stock Option Gains shall be 1,000 shares.
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ARTICLE IV.
DEFERRAL ACCOUNTS
Section 4.1. Account Maintenance; Balance
Solely for recordkeeping purposes, the Company shall
maintain an Account, and, if applicable, one or more Sub-Accounts, for each
Participant. A Participant's Account balance or Sub-Account balance, as the case
may be, as of each Valuation Date shall be equal to the number of shares of
Common Stock allocated to such Account or Sub-Account as of the immediately
preceding Valuation Date less any shares of Common Stock or cash distributed to
the Participant from such Account or Sub-Account plus any shares of Common Stock
(i) credited to such Account or Sub-Account pursuant to Section 3.2 as a result
of Deferrals, (ii) credited to such Account or Sub-Account pursuant to Section
4.2(a) as a result of Common Stock Dividends, and (iii) credited to such Account
or Sub-Account pursuant to Section 4.2(b) as a result of Non-Stock Dividends, in
each case made (credited or debited) since the immediately preceding Valuation
Date.
Section 4.2. Crediting of Dividends
Stock and non-stock dividends paid with respect to Common
Stock allocated to a Participant's Account and/or Sub-Account shall be credited
by the Administrator to the Participant's Account and/or Sub-Account in the form
of additional shares or fractional shares of Common Stock as of the date upon
which the Company makes such a distribution to its stockholders, as follows:
(a) The Participant's Account and/or Sub-Account shall be
credited with any additional shares of Common Stock distributed as a dividend
with respect to Common Stock credited to the Participant's Account and/or
Sub-Account ("Common Stock Dividends") and
(b) In the event of a cash dividend or other distribution
with respect to the Common Stock ("Non-Stock Dividends"), the Participant's
Account and/or Sub-Account shall be credited with that number of shares of
Common Stock equal to the quotient obtained by dividing (x) the aggregate amount
of the Non-Stock Dividend attributable to the Common Stock allocated to the
Participant's Account or Sub-Account by (y) the Fair Market Value of a share of
Common Stock on the date on which such Non-Stock Dividends are paid to the
Company's stockholders.
Section 4.3. Fractional Shares
Credits, debits and valuations of Accounts and Sub-Accounts
shall be made only in the form of whole and fractional shares of Common Stock.
Section 4.4. Statement of Account
Within one hundred eighty days after the last day of each
Plan Year, the Administrator shall furnish to each Participant a statement
setting forth the balance of his
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Account and Sub-Accounts as of the last day of such Plan Year and such other
information as the Administrator shall deem advisable to furnish.
ARTICLE V.
DISTRIBUTIONS OF ACCOUNTS
Section 5.1. Commencement of Distributions
With respect to each Stock Option for which a Participant
has filed a Deferral Election Form, the Participant shall designate on such form
the date (the "Distribution Commencement Date") on which the distribution of the
Sub-Account attributable to such Stock Option shall commence, provided that,
except as provided in Section 6.1, such Distribution Commencement Date shall not
be less than two (2) years or more than fifteen (15) years after the Exercise
Date.
Section 5.2. Form of Distribution
With respect to each Sub-Account, the Participant shall
elect in the applicable Deferral Election Form to receive a distribution of such
Sub-Account, subject to Sections 6.1 and 6.2, in (i) with respect to any
distribution, a lump sum, (ii) in the case of an Account and its Sub-Accounts
with an aggregate balance of more than $50,000.00, with respect to a
distribution which commences on the Participant's Separation Date, annual
installments over a period of five (5), ten (10) years or fifteen (15) years
from the Distribution Date or (iii) in the case of a Sub-Account with a balance
of more than $50,000.00, with respect to a distribution which commences prior to
the Participant's Separation Date, annual installments over a period of not more
than ten (10) years from the Distribution Date (any such period of distribution,
the "Payment Period") as follows:
(a) If the Participant has elected to receive a lump-sum
distribution, the Company shall, within thirty (30) days after the Distribution
Commencement Date, distribute to the Participant (i) the number of whole shares
of Common Stock credited to such Sub-Account as of the Distribution Commencement
Date, and (ii) in lieu of any fractional share of Common Stock credited to such
Sub-Account as of such date, an amount of cash equal to the product of such
fraction multiplied by the Fair Market Value of a share as of the Distribution
Commencement Date. Any such distribution shall be subject to tax withholding by
the Company as provided in Section 9.4.
(b) If the Participant has elected to receive a
distribution in installments, the Company shall, within thirty (30) days after
the Distribution Commencement Date and within thirty (30) days after each
anniversary thereof during the Participant's Payment Period (each, a
"Distribution Date"), distribute to the Participant that number of shares of
Common Stock equal to the quotient obtained by dividing the number of shares of
Common Stock credited to such Sub-Account as of the applicable Distribution Date
by the number of years remaining in the
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Participant's Payment Period (including the year in which such installment is
being paid), rounded down to the nearest whole share. Except with respect to the
final Distribution Date during the Payment Period, any fractional shares of
Common Stock resulting from the above calculation shall not be distributed to
the Participant, but shall be credited back to such Sub-Account as of the
Distribution Date. With respect to the final Distribution Date, the Company
shall, in addition to the shares to which the Participant is entitled pursuant
to this Section 5.2(b) and in lieu of any fractional share of Common Stock
credited to such Sub-Account as of such date, distribute to the Participant an
amount of cash equal to the product of such fraction multiplied by the Fair
Market Value of a share as of the final Distribution Date. Any such
distributions shall be subject to tax withholding by the Company as provided in
Section 9.4.
Section 5.3. Irrevocability of Elections; Amendments to Elections
Elections made by a Participant pursuant to a Deferral
Election Form or an Exercise Declaration Form shall be irrevocable and shall not
be amendable after they have been delivered to the Administrator, provided,
however, that a Participant may amend a Deferral Election Form at any time prior
to one (i) year before the Distribution Commencement Date designated in the
Deferral Election Form to defer the Distribution Commencement Date by two (2) or
more years after the previously designated Distribution Commencement Date,
provided, however, that a Participant shall only be permitted to make two (2)
such amendments with respect to any Deferral Election Form.
Section 5.4. Withdrawal for Unforeseeable Emergency
A Participant may make a withdrawal from his Account on
account of an Unforeseeable Emergency, subject to the following requirements:
(a) The Participant shall have delivered a written request
to the Administrator for a withdrawal due to an Unforeseeable Emergency, and
shall have received the Administrator's approval of such request.
(b) The Participant's Unforeseeable Emergency withdrawal
shall not exceed the lesser of (i) the Participant's Account balance, calculated
based on the Fair Market Value of a share of Common Stock on the date of the
Administrator's approval of the Participant's request, or (ii) the amount which
is necessary to satisfy the Unforeseeable Emergency, less any amount which can
be satisfied from other resources which are reasonably available to the
Participant.
(c) The denial of the Participant's Unforeseeable Emergency
withdrawal request would result in severe financial hardship to the Participant.
(d) The Participant has not received a withdrawal due to an
Unforeseeable Emergency within the twelve (12) month period preceding the
withdrawal.
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ARTICLE VI.
SEPARATION FROM SERVICE
Section 6.1. Separation from Service Other than for Disability or
Retirement
(a) In the event that a Participant incurs a Separation
from Service for any reason other than the Participant's Disability or
Retirement, the Company shall, within thirty (30) days after the effective date
of such Separation from Service (the "Separation Date"), notwithstanding any
contrary election made by the Participant, distribute to the Participant (or, in
the case of the Participant's death, to his beneficiary, and if he has
designated no beneficiary, to his estate) (i) the number of whole shares of
Common Stock credited to the Participant's Account as of the Separation Date,
and (ii) in lieu of any fractional share of Common Stock credited to the
Participant's Account as of such date, an amount of cash equal to the product of
such fraction multiplied by the Fair Market Value of a share as of the
Separation Date.
(b) Upon the distribution of a Participant's Account
pursuant to subsection (a) above, the Participant shall cease to be a
participant in the Plan and all Deferral Election Forms with respect to Stock
Options not theretofore exercised shall be void and of no further force and
effect.
Section 6.2. Disability or Retirement
In the event that a Participant incurs a Separation from
Service by reason of the Participant's Disability or Retirement, the
Participant's Account shall be continue to be distributed pursuant to the
Participant's Deferral Election Form(s) in accordance with Section 5.2.
ARTICLE VII.
PROVISIONS RELATING TO
SECTION 16 OF THE EXCHANGE ACT AND SECTION 162(m) OF THE CODE
Section 7.1. Compliance with Section 16 of the Exchange Act
(a) With respect to any Employee who is then subject to
Section 16 of the Exchange Act, only the Committee may designate such Employee
as a Participant in the Plan.
(b) With respect to any Participant who is then subject to
Section 16 of the Exchange Act, any function of the Administrator under the Plan
relating to such Employee or Participant shall be performed solely by the
Committee, if and to the extent required to ensure the availability of an
exemption under Section 16 of the Exchange Act for any transaction relating to
such Employee or Participant under the Plan.
(c) Notwithstanding any other provision of the Plan or any
rule, instruction, election form or other form, the Plan and any such rule,
instruction or form shall be subject to any additional conditions or limitations
set forth in any applicable exemptive rule under Section
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16 of the Exchange Act (including any amendment to Rule 16b-3) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, such provision, rule, instruction or form shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
Section 7.2. Compliance with Code Section 162(m)
It is the intent of the Company that any compensation
(including shares of Common Stock subject to Stock Options) which is deferred
under the Plan by a person who is, with respect to the year of distribution,
deemed by the Administrator to be a "covered employee" within the meaning of
Code Section 162(m) and regulations thereunder, which compensation constitutes
either "qualified performance-based compensation" within the meaning of Code
Section 162(m) and regulations thereunder or compensation not otherwise subject
to the limitation on deductibility under Section 162(m) and regulations
thereunder, shall not, as a result of deferral hereunder, become compensation
with respect to which the Company in fact would not be entitled to a tax
deduction under Code Section 162(m). Accordingly, unless otherwise determined by
the Administrator, if any compensation would become so disqualified under
Section 162(m) as a result of deferral hereunder, the terms of such deferral
shall be automatically modified to the extent necessary to ensure that the
compensation would not, at the time of distribution, be so disqualified.
ARTICLE VIII.
ADMINISTRATIVE PROVISIONS
Section 8.1. Administrator's Duties and Powers
The Committee appointed pursuant to Section 8.4 shall be
the Administrator and shall conduct the general administration of the Plan in
accordance with the Plan and shall have all the necessary power and authority to
carry out that function. Among its necessary powers and duties are the
following:
(a) Except to the extent provided otherwise by Sections 7.1
and 7.2, to delegate all or part of its function as Administrator to others and
to revoke any such delegation.
(b) To determine questions of eligibility of Participants
and their entitlement to benefits, subject to the provisions of Section 8.11.
(c) To select and engage attorneys, accountants, actuaries,
trustees, appraisers, brokers, consultants, administrators, physicians, the
Committee under Section 8.4, or other persons to render service or advice with
regard to any responsibility the Administrator or the Board has under the Plan,
or otherwise, to designate such persons to carry out fiduciary responsibilities
(other than trustee responsibilities) under the Plan, and (with the Committee,
the Company, the Board and its officers, trustees and Employees) to rely upon
the advice, opinions or valuations of any such persons, to the extent permitted
by law, being fully protected in acting or relying thereon in good faith.
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(d) To interpret the Plan for purpose of the administration
and application of the Plan, in a manner not inconsistent with the Plan or
applicable law and to amend or revoke any such interpretation.
(e) To conduct claims procedures as provided in Section
8.11.
Section 8.2. Limitations Upon Powers
The Plan shall be uniformly and consistently administered,
interpreted and applied with regard to all Participants in similar
circumstances. The Plan shall be administered, interpreted and applied fairly
and equitably and accordance with the specified purposes of the Plan.
Section 8.3. Final Effect of Administrator Action
Except as provided in Section 8.11, all actions taken and
all determinations made by the Administrator in good faith shall be final and
binding upon all Participants and any person interested in the Plan.
Section 8.4. Committee
The Committee shall consist solely of two or more
Independent Directors appointed by and holding office at the pleasure of the
Board, each of whom is both a "non-employee director" as defined by Rule 16b-3
and an "outside director" for purposes of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.
Section 8.5. Majority Rule
The Committee shall act by a majority of its members in
office; provided, however, that the Committee may appoint one of its members or
a delegate to act on behalf of the Committee on matters arising in the ordinary
course of administration of the Plan or on specific matters.
Section 8.6. Indemnification by Company; Liability Insurance
(a) The Company shall pay or reimburse any of its officers,
directors, Committee members or Employees who are fiduciaries with respect to
the Plan and/or Trust for all expenses incurred by such persons in, and shall
indemnify and hold them harmless from, all claims, liability and costs
(including reasonable attorneys' fees) arising out of the good faith performance
of their fiduciary functions.
(b) The Company may obtain and provide for any such person,
at the Company's expense, liability insurance against liabilities imposed on him
by law.
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Section 8.7. Recordkeeping
(a) The Administrator shall maintain suitable records as
follows:
(i) Records of each Participant's Account which,
among other things, shall show separately deferrals, dividends, and
distributions with respect to such Account.
(ii) Records which show the assets, liabilities
and operations of the Plan and the Trust during each Plan Year.
(iii) Records of its deliberations and decisions.
(b) The Administrator shall appoint a secretary, and at its
discretion, an assistant secretary, to keep the record of proceedings, to
transmit its decisions, instructions, consents or directions to any interested
party, to execute and file, on behalf of the Administrator, such documents,
reports or other matters as may be necessary or appropriate under ERISA and to
perform ministerial acts.
(c) The Administrator shall not be required to maintain any
records or accounts which duplicate any records or accounts maintained by the
Company or the Trustee.
Section 8.8. Inspection of Records
Copies of the Plan and records of a Participant's Account
shall be open to inspection by him or his duly authorized representatives at the
office of the Administrator at any reasonable business hour.
Section 8.9. Identification of Fiduciaries
(a) The Administrator shall be the named fiduciary of the
Plan and, as permitted or required by law, shall have exclusive authority and
discretion to operate and administer the Plan.
(b) The Committee, any other Administrator, the Trustee,
the Board, the Company, and every person who exercises any discretionary
authority or discretionary control respecting the Plan or who has any
discretionary authority or discretionary responsibility in the administration of
the Plan, including any person designated by the named fiduciary to carry out
fiduciary responsibilities under the Plan, shall be a fiduciary and as such
shall be subject to provisions of ERISA and other applicable laws governing
fiduciaries.
(c) Any person or group of persons may serve in more than
one fiduciary capacity with respect to the Plan (including, but not limited to,
service as a Trustee, a director of the Company and a member of the Committee).
Section 8.10. Procedure for Allocation of Fiduciary Responsibilities
(a) Fiduciary responsibilities under the Plan are allocated
as follows:
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(i) The sole duties, responsibilities and powers
allocated to the Board, any Company, the Administrator, the Committee
and any fiduciary shall be those expressly provided in the relevant
Sections of the Plan.
(ii) All fiduciary responsibilities not allocated
to the Board, or the Company, are hereby allocated to the
Administrator, subject to delegation.
(b) Fiduciary responsibilities under the Plan may be
reallocated among fiduciaries by amending the plan in the manner prescribed in
Section 9.2, followed by the fiduciaries' acceptance of, or operation under,
such amended Plan.
Section 8.11. Claims Procedure
(a) No distributions under this Plan to a Participant,
former Participant or any beneficiary or representative thereof shall be made
except upon a claim filed in writing with the Administrator or to a claims
official designated by the Administrator.
(b) If the Administrator or claims official wholly or
partially denies the claim, it or he shall, within a reasonable period of time
after receipt of the claim provide the claimant with written notice of such
denial, setting forth, in a manner calculated to be understood by the claimant:
(i) the specific reason or reasons for such
denial;
(ii) specific reference to pertinent Plan
provisions on which the denial is based;
(iii) a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and
(iv) an explanation of the Plan's claims review
procedure.
(c) The Administrator shall provide each claimant with a
reasonable opportunity to appeal a denial of a claim to the Administrator or its
authorized delegate for a full and fair review. The claimant or his duly
authorized representative:
(i) may request a review upon written application
to the Administrator or its authorized delegate (which shall be filed
with the claims official);
(ii) may review pertinent documents; and
(iii) may submit issues and comments in writing.
(d) The Administrator or its authorized delegate may
establish such time limits within which a claimant may request review of a
denied claim as are reasonable in relation to the nature of the benefit which is
the subject of the claim and to other attendant circumstances
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but which, in no event, shall be less than sixty (60) days after receipt by the
claimant of written notice of denial of his claim.
(e) The decision by the Administrator or its authorized
delegate upon review of a claim shall be made not later than sixty (60) days
after receipt by the Administrator or its authorized delegate of the request for
review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than one hundred twenty (120) days after receipt of such request for
review.
(f) The decision on review shall be in writing and shall
include specific reasons for the decision written in a manner calculated to be
understood by the claimant with specific references to the pertinent Plan
provisions on which the decision is based.
(g) To the extent permitted by law, the decision of the
Committee or claims official, if no appeal is filed, or the decision of the
Administrator or its delegate on review, when warranted on the record and
reasonably based on the law and the provisions of the Plan, shall be final and
binding on all parties.
Section 8.12. Conflicting Claims
If the Administrator is confronted with conflicting claims
concerning a Participant's Account, the Administrator may interplead the
claimants in an action at law, or in an arbitration conducted in accordance with
the rules of the American Arbitration Association, as the Administrator shall
elect in its sole discretion, and in either case, the attorneys' fees, expenses
and costs reasonably incurred by the Administrator in such proceeding shall be
paid from the Participant's Account.
Section 8.13. Service of Process
The General Counsel of Safeway Inc. is hereby designated as
agent of the Plan for the service of legal process.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.1. Limitation on Transfer
(a) No right, title or interest in the Plan or in any
Account may be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution. No right, title or interest in
the Plan or in any Account shall be liable for the debts, contracts or
engagements of the Participant 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, except to
the extent that such disposition is permitted by the preceding sentence.
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(b) Notwithstanding the provisions of subsection, a
Participant's interest in his Account may be transferred by the Participant
pursuant to a domestic relations order that constitutes a "qualified domestic
relations order" as defined by the Code or Title I of ERISA.
Section 9.2. Amendment/Termination of the Plan
The Administrator may, with prospective or retroactive
effect, amend, alter, suspend, discontinue, or terminate
the Plan at any time without the consent of Participants, stockholders, or any
other person, including amendments necessary to conform to the provisions and
requirements of ERISA or the Code or regulations thereunder; provided, however,
that, without the consent of a Participant, no such action shall materially and
adversely affect the rights of such Participant with respect to any rights to
payment of amounts credited to such Participant's Account. Notwithstanding the
foregoing, the Administrator may, in its sole discretion, terminate the Plan and
distribute to Participants the amounts credited to their Accounts.
Section 9.3. Changes in Common Stock or Assets of the Company,
Acquisition or Liquidation of the Company and Other
Corporate Events
(a) In the event that the Administrator determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company,
or exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Account under the Plan, then the
Administrator shall, in such manner as it may deem equitable, adjust the number
and/or kind of shares of Common Stock (or other securities or property) credited
to Participants' Accounts.
(b) In the event of any transaction or event described in
Section 9.3(a) or any unusual or nonrecurring transactions or events affecting
the Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate, or of changes in applicable laws, regulations, or
accounting principles, the Administrator, in its sole and absolute discretion
and on such terms and conditions as it deems appropriate, by action taken prior
to the occurrence of such transaction or event, is hereby authorized to take any
one or more of the following actions whenever the Administrator determines that
such action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any Account under the Plan, to facilitate such transactions or
events, or to give effect to such changes in laws, regulations or principles:
(i) To provide for the complete distribution of
Participants' Accounts in connection with such transactions or
events;
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(ii) To provide that Participants' Accounts and
the Company's rights and obligations with respect thereto shall be
assumed by the successor or survivor corporation, or a parent or
subsidiary thereof;
(iii) To provide that the Common Stock credited
to Participants' Accounts shall be replaced by stock of the successor
or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and/or kind of shares; and
(iv) To make adjustments to the number and/or
kind of shares of Common Stock (or other securities or property)
credited to Participants' Accounts.
(c) Notwithstanding the foregoing, in the event that the
Company becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of the
provisions of this Plan would so qualify, then this Plan shall be interpreted so
as to preserve such accounting treatment, and to the extent that any provision
of the Plan would disqualify the transaction from pooling of interests
accounting treatment, then such provision shall be null and void. All
determinations to be made in connection with the preceding sentence shall be
made by the independent accounting firm whose opinion with respect to "pooling
of interests" treatment is required as a condition to the Company's consummation
of such transaction.
(d) The existence of the Plan and the Accounts shall not
affect or restrict in any way the right or power of the Company or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
Section 9.4. Tax Withholding
(a) At the time a Participant exercises a Stock Option with
respect to which the Participant has filed a valid Deferral Election Form and at
the time any dividends are credited to the Participant's Account, the
Participant must pay to the Company, in cash only, any amounts required to be
withheld by the Company to satisfy FICA, Medicare and any other applicable taxes
which are payable with respect to the exercise of the Stock Option or the
crediting of the dividends to the Participant's Account, as the case may be.
(b) A Participant shall make appropriate arrangements with
the Company for satisfaction of any federal, state or local income tax
withholding requirements and any other employment tax requirements applicable to
the payment of Common Stock (and cash in lieu of fractional shares) under the
Plan. If no other arrangements are made, the Company and any subsidiary shall
have the right to deduct from amounts otherwise payable in settlement of an
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Account any sums that federal, state, local or foreign tax law requires to be
withheld with respect to such payment. The Administrator, in its discretion, may
allow a Participant to elect to have Shares of Common Stock withheld from his
distributions under the Plan to satisfy income tax withholding requirements with
respect to his distributions, provided that shares issued or delivered under any
plan, program, employment agreement or other arrangement may be withheld only in
accordance with the terms of such plan, program, employment agreement or other
arrangement and any applicable rules, regulations, or resolutions thereunder.
Notwithstanding the foregoing, the number of shares of Common Stock which may be
so withheld shall be limited to the number of shares which have an aggregate
Fair Market Value equal to the aggregate amount of such requirements based on
the minimum statutory withholding rates for federal, state, local and foreign
income tax and payroll tax purposes that are applicable to such supplemental
taxable income.
Section 9.5. Unfunded Status of Plan; Unsecured General Creditor
The Plan is intended to constitute an "unfunded" plan
providing for deferred compensation for all purposes, including for tax purposes
and for purposes of Title I of ERISA, and the Company's obligations under the
Plan shall constitute unfunded and unsecured promises to distribute Common
Stock, and cash with respect to fractional shares of Common Stock, in the
future. With respect to any payment not yet made to a Participant under the
Plan, nothing contained in the Plan shall give any Participant any rights that
are greater than those of a general unsecured creditor of the Company and no
Participant or successor shall have any legal or equitable rights, interests, or
claims in or to any assets of the Company.
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Section 9.6. Establishment of Trusts
The Company shall establish and fund one or more Trusts
under the Plan to meet the Company's obligations under the Plan, which Trusts or
other arrangements shall be consistent with the "unfunded" status of the Plan as
required by Section 9.5 and shall conform to the terms of the model trust
described in the Internal Revenue Service's Revenue Procedure 92-64 or its
successors, and the Company shall make periodic contributions in cash or Common
Stock to such Trusts in amounts and values equal to Participants' Stock Option
Gains under the Plan and any dividends credited thereon. The assets of a Trust
shall be subject to the claims of the Company's creditors to the extent required
by the Internal Revenue Service in order for Participants not to be taxable on
their Accounts until the Accounts are distributed to them. If permitted by a
Trust, distributions from Accounts shall be made directly by the Trustee, or its
designated agent, from Trust assets to the Participant. To the extent any
Account distributions under the Plan are actually paid from a Trust, the Company
shall have no further obligation with respect thereto, but to the extent not so
paid, such amounts shall remain the obligation of, and shall be paid by, the
Company. The Company shall not be required to fund any Trust with respect to any
Participant if the Company determines that it is reasonably likely that such
funding would cause the Participant to be taxable on the Participant's Accounts
prior to the date on which they are distributed to the Participant.
Section 9.7. Limitation on Rights of Employees
The Plan is strictly a voluntary undertaking on the part of
the Company and shall not constitute a contract between the Company and any
Employee, or consideration for, or an inducement or condition of, the employment
of an Employee. Nothing contained in the Plan shall give any Employee the right
to be retained in the service of the Company or to interfere with or restrict
the right of the Company, which is hereby expressly reserved, to discharge or
retire any Employee, except as otherwise provided by a written employment
agreement between the Company and the Employee, at any time without notice and
with or without cause. Inclusion under the Plan will not give any Employee any
right or claim to any benefit hereunder except to the extent such right has
specifically become fixed under the terms of the Plan. The doctrine of
substantial performance shall have no application to Employees, Participants or
any other persons entitled to payments under the Plan. Each condition and
provision, including numerical items, has been carefully considered and
constitutes the minimum limit on performance which will give rise to the
applicable right.
Section 9.8. No Rights as Stockholder
No Participant shall have any of the rights or privileges
of a stockholder of the Company under the Plan, including as a result of the
crediting of shares of Common Stock to an Account, or the creation of any Trust
and deposit of such Common Stock therein, except at such time as Common Stock
may be actually delivered in settlement of an Account. Common Stock allocated in
the Trust will be voted by the trustee thereof in accordance with the Trust
Agreement related thereto.
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Section 9.9. Satisfaction of Claims
Payments or distributions to any Participant in accordance
with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Company, any subsidiary thereof, the
Committee, or the Administrator for the compensation or other amounts deferred
and relating to the Account (or portion thereof) to which the payments relate.
Section 9.10. Compliance
A Participant shall have no right to receive payment with
respect to the Participant's Account until all legal and contractual obligations
of the Company relating to establishment of the Plan and the making of such
payments shall have been complied with in full. In addition, the Company shall
impose such restrictions on Common Stock delivered to a Participant hereunder
and any other interest constituting a security as it may deem advisable in order
to comply with the Securities Act of 1933, as amended, the requirements of the
New York Stock Exchange or any other stock exchange or automated quotation
system upon which the Common Stock is then listed or quoted, any state
securities laws applicable to such a transfer, any provision of the Company's
Certificate of Incorporation or Bylaws, or any other applicable law or
applicable regulation.
Section 9.11. Sources of Stock
If Common Stock is credited to an Account under the Plan in
connection with a deferral of Stock Option Gains with respect to a Stock Option
award under another plan, program, employment agreement or other arrangement
that provides for the issuance of shares, the shares of Common Stock so credited
shall be deemed to have originated, and may be counted against the number of
shares reserved, under such plan, program or arrangement, in accordance with the
terms and conditions of such plan, program or arrangement. The number of shares
of Common Stock credited to such Account shall in no event exceed the number of
shares subject to the Stock Option Gains deferred under the Plan plus any
additional shares of Common Stock dividends or Common Stock purchased with cash
dividends on shares allocated to such Account.
Section 9.12. Exempt ERISA Plan
The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
management or highly compensated employees within the meaning of Sections 201,
301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I
of ERISA.
Section 9.13. Notice
Any notice or filing required or permitted to be given to
the Administrator under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal office of
the Company, directed to the attention of the General Counsel and Secretary of
the Company. Such notice shall be deemed given as of the date of delivery or, if
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delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
Section 9.14. Errors and Misstatements
In the event of any misstatement or omission of fact by a
Participant to the Administrator or any clerical error resulting in payment of
benefits in an incorrect amount, the Administrator shall promptly cause the
amount of future payments to be corrected upon discovery of the facts and shall
pay or, if applicable, cause the Trustee to pay, the Participant or any other
person entitled to payment under the Plan any underpayment in cash or Common
Stock in a lump sum or to recoup any overpayment from future payments to the
participant or any other person entitled to payment under the Plan in such
amounts as the Administrator shall direct or to proceed against the Participant
or any other person entitled to payment under the Plan for recovery of any such
overpayment.
Section 9.15. Payment on Behalf of Minor, Etc.
In the event any amount becomes payable under the Plan to a
minor or a person who, in the sole judgment of the Administrator is considered
by reason of physical or mental condition to be unable to give a valid receipt
therefor, the Administrator may direct that such payment be made to any person
found by the administrator in its sole judgment, to have assumed the care of
such minor or other person. Any payment made pursuant to such determination
shall constitute a full release and discharge of the Trustee, the Company, the
Board, the Administrator, the Committee and their officers, directors and
employees.
Section 9.16. Governing Law
Except to the extent preempted by ERISA, this Plan shall be
governed and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed entirely therein, and
applicable substantive provisions of federal law.
Section 9.17. Pronouns and Plurality
The masculine pronoun shall include the feminine pronoun,
and the singular the plural where the context so indicates.
Section 9.18. Titles
Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan.
Section 9.19. References
Unless the context clearly indicates to the contrary, a
reference to a statute, regulation or document shall be construed as referring
to any successor statute, regulation or document.
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Section 9.20. Assumption of Risk
Participants shall assume all risk in connection with any
decrease in value of the Accounts, including any decrease in the value of the
Common Stock, and the Company, Committee and the Administrator shall not be
liable or responsible therefor.
Section 9.21. Severability
In the event that any provision of the Plan shall be
declared unenforceable or invalid for any reason, such unenforceability or
invalidity shall not affect the remaining provisions of the Plan but shall be
fully severable, and the Plan shall be construed and enforced as if such
unenforceable or invalid provision had never been included herein.
Section 9.22. Status
The establishment and maintenance of, or allocations and
credits to, the Account of any Participant shall not vest in any Participant any
right, title or interest in and to any Plan assets or benefits except at the
time or times and upon the terms and conditions and to the extent expressly set
forth in the Plan and in accordance with the terms of the Trust.
ARTICLE X.
EFFECTIVE DATE
Section 10.1. Effective Date
The Plan shall be effective as of November 1, 1999.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers duly
authorized effective as of November 1, 1999.
SAFEWAY INC.
By: /s/ DICK W. GONZALES
Name: Dick W. Gonzales
Title: Senior Vice President
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(S logo)
2000 Stock Option Gain Deferral
Distribution Election Form
DEFAULT DISTRIBUTION UPON RETIREMENT OR TOTAL DISABILITY
If no election is on file, your option deferral account balance attributable to
your 2000 option gain deferral will be distributed in Safeway Stock at
retirement or total disability as follows:
ACCOUNT BALANCE GREATER THAN $50,000:.........ANNUAL INSTALLMENTS OVER 10 YEARS.
ACCOUNT BALANCE EQUAL OR LESS THAN $50,000:...LUMP SUM PAYMENT, REGARDLESS
OF ELECTION.
If you ACCEPT this default, please read the General Information on the reverse,
and then complete the Sign Here information at the bottom of this page.
Otherwise, if you wish to elect an OPTIONAL FORM OF DISTRIBUTION, please go
below to Optional Forms of Distribution - Instructions.
OPTIONAL FORM OF DISTRIBUTION - INSTRUCTIONS
SCHEDULED IN-SERVICE WITHDRAWAL
- READ General Information on the reverse side of this page
- COMPLETE Section below entitled In-Service Withdrawal to elect year
(while still employed) in which payment commences, and select
distribution method.
- COMPLETE Section below entitled Retirement Payment
Method to elect form of payment in the event you retire or
become totally disabled prior to the elected In-Service
Withdrawal distribution date (Otherwise, the Plan default
distribution will govern)
- SIGN Where indicated below
OPTIONAL FORM OF RETIREMENT/TOTAL DISABILITY DISTRIBUTION
The election to receive your 2000 "option gain" stock and any earnings thereon
at retirement/total disability is IRREVOCABLE.
- READ General Information on the reverse side of this page
- COMPLETE Retirement Payment Method to elect form of payment at
retirement or total disability (Otherwise, the Plan default
distribution will govern)
- SIGN Where indicated below
OPTIONAL FORMS OF DISTRIBUTION - ELECTIONS
SCHEDULED IN-SERVICE Commencing 2_______ (enter 2003 or later)
WITHDRAWAL [ ] Annual installments over ____
(enter 2-10) years
OR
[ ] Lump Sum
RETIREMENT PAYMENT Annual installments over [ ] 15 or [ ] 10 or
METHOD [ ] 5, or a [ ] Lump Sum
(Please read General Information on reverse side
for installment eligibility)
SIGN HERE
I have read the General Information on reverse side.
---------------------------------------- -----------------------------------
Participant's Name (please print or type) Participant's Signature
---------------------------------------- -----------------------------------
Social Security Number Date
Please send completed form to TBG Financial Document Center, 2029 Century Park
East, 37th Floor, Los Angeles, CA 90067. NO FAXED FORMS ACCEPTED. Questions:
Call (800) 824-0040 M - F between 7:00 a.m. and 7:00 p.m. PST.
<PAGE> 31
To:
STOCK OPTION GAIN DEFERRAL ELECTION FORM
NAME:__________________________________ SSN:________________________________
Subject to a minimum exercise of 1000 shares, I hereby irrevocably elect to
defer the gain on the following option exercises. The gains will be converted
into stock and paid as shares of Safeway Common Stock as indicated below. I
understand that to defer the stock option gains in subsequent Plan years, I must
make a separate election no less than 6 months prior to exercise and in the year
prior to the year in which I exercise the stock option. I understand that
deferral elections are irrevocable.
<TABLE>
<CAPTION>
Grant Date # of Options Exercise Price Expiration Date
---------- ------------ -------------- ---------------
<S> <C> <C> <C>
---------------- -------------------- ------------------- ---------------------
---------------- -------------------- ------------------- ---------------------
---------------- -------------------- ------------------- ---------------------
---------------- -------------------- ------------------- ---------------------
</TABLE>
EMPLOYEE SIGNATURE DATE
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APPROVED BY DATE
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