Exhibit No. 10(iii).30

EXECUTION COPY

SAFEWAY EXECUTIVE

DEFERRED COMPENSATION PLAN II

(Adopted Effective January 1, 2005)

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TABLE OF CONTENTS

 

ARTICLE I. TITLE AND DEFINITIONS

   1

1.1

   Title    1

1.2

   Definitions    1

ARTICLE II. PARTICIPATION

   6

ARTICLE III. DEFERRAL ELECTIONS

   6

3.1

   Elections to Defer Compensation    6

3.2

   Investment Elections    8

ARTICLE IV. ACCOUNTS AND TRUST FUNDING

   9

4.1

   Deferral Accounts    9

4.2

   Company Discretionary Contribution Account    9

4.3

   Trust Funding    10

ARTICLE V. VESTING

   11

ARTICLE VI. DISTRIBUTIONS

   11

6.1

   Distribution of Accounts    11

6.2

   Subsequent Deferral Election    13

6.3

   Distribution Upon an Unforeseeable Emergency    13

6.4

   Inability to Locate Participant    14

ARTICLE VII. ADMINISTRATION

   14

7.1

   Committee    14

7.2

   Committee Action    14

7.3

   Powers and Duties of the Committee    14

7.4

   Construction and Interpretation    15

7.5

   Information    15

7.6

   Compensation, Expenses and Indemnity    15

7.7

   Quarterly Statements    16

ARTICLE VIII. CLAIMS AND APPEALS PROCEDURES

   16

8.1

   Informal Resolution of Questions    16

8.2

   Formal Benefits Claim    16

8.3

   Notice of Denied Request    16

8.4

   Appeal to Senior Vice President    17

8.5

   Exhaustion of Remedies    17

ARTICLE IX. MISCELLANEOUS

   18

9.1

   Unsecured General Creditor    18

9.2

   Restriction Against Assignment    18

9.3

   Withholding    18

9.4

   Amendment, Modification, Suspension or Termination    19

9.5

   Governing Law    19

 

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9.6

   Receipt of Release    19

9.7

   Payments on Behalf of Persons Under Incapacity    19

9.8

   Limitation of Rights and Employment Relationship    20

9.9

   Exempt ERISA Plan    20

9.10

   Notice    20

9.11

   Errors and Misstatements    20

9.12

   Pronouns and Plurality    20

9.13

   Severability    20

9.14

   Status    21

9.15

   Headings    21

 

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SAFEWAY EXECUTIVE

DEFERRED COMPENSATION PLAN II

WHEREAS, Safeway Inc., a Delaware corporation (the “Company”) desires to
establish the Safeway Executive Deferred Compensation Plan II, effective
January 1, 2005 (the “Plan”) to provide supplemental retirement income benefits
for a select group of management and highly compensated employees through
deferrals of salary and incentive compensation as well as Company contributions;

WHEREAS, this Plan is the successor plan to the Safeway Executive Deferred
Compensation Plan, as in effect on December 31, 2004 (the “Prior Plan”);

WHEREAS, effective December 31, 2004, the Prior Plan was frozen and no new
contributions or deferrals shall be made to it; provided however, that any
vested contributions and deferrals made under the Prior Plan before January 1,
2005 shall continue to be governed by the terms and conditions of the Prior Plan
as in effect on December 31, 2004;

WHEREAS, any contributions and deferrals made under the Prior Plan after
December 31, 2004 and any contributions that were unvested on December 31, 2004
are deemed to have been made under this Plan; and

WHEREAS, the Plan is intended to comply with the requirements of Section 409A of
the Code.

NOW, THEREFORE, effective as of January 1, 2005, the Plan is hereby adopted to
read as follows:

ARTICLE I.

TITLE AND DEFINITIONS

1.1 Title.

This Plan shall be known as the Safeway Executive Deferred Compensation Plan II.

1.2 Definitions.

Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

(a) “Account” or “Accounts” shall mean a Participant’s Deferral Account, 401(k)
Excess Account and/or Company Discretionary Contribution Account.

(b) “Base Salary” shall mean a Participant’s annual base salary, excluding
bonus, incentive and all other remuneration for services rendered to the
Participating Company, prior to reduction for any salary contributions to a plan
established pursuant to Section 125 of the Code or qualified pursuant to
Section 401(k) of the Code.

 

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(c) “Beneficiary” or “Beneficiaries” shall mean the person or persons, including
a trustee, personal representative or other fiduciary, last designated in
writing by a Participant in accordance with the procedures established by the
Committee to receive the benefits specified hereunder in the event of the
Participant’s death. However, no designation of a Beneficiary other than the
Participant’s spouse shall be valid unless consented to in writing by such
spouse. No Beneficiary designation shall become effective until it is filed with
the Committee. Any designation shall be revocable at any time through a written
instrument filed by the Participant with the Committee with or without the
consent of the previous Beneficiary. If there is no Beneficiary designation in
effect, or the designated beneficiary does not survive the Participant, then the
Participant’s spouse shall be the Beneficiary. If there is no surviving spouse,
the duly appointed and currently acting personal representative of the
Participant’s estate (which shall include either the Participant’s probate
estate or living trust) shall be the Beneficiary. In any case where there is no
such personal representative of the Participant’s estate duly appointed and
acting in that capacity within 90 days after the Participant’s death (or such
extended period as the Committee determines is reasonably necessary to allow
such personal representative to be appointed, but not to exceed 180 days after
the Participant’s death), then Beneficiary shall mean the person or persons who
can verify by affidavit or court order to the satisfaction of the Committee that
they are legally entitled to receive the benefits specified hereunder. In the
event any amount is payable under the Plan to a minor, payment shall not be made
to the minor, but instead be paid (a) to that person’s living parent(s) to act
as custodian, (b) if that person’s parents are then divorced, and one parent is
the sole custodial parent, to such custodial parent, or (c) if no parent of that
person is then living, to a custodian selected by the Committee to hold the
funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect
in the jurisdiction in which the minor resides. If no parent is living and the
Committee decides not to select another custodian to hold the funds for the
minor, then payment shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of the estate for the
minor is duly appointed and currently acting within 60 days after the date the
amount becomes payable, payment shall be deposited with the court having
jurisdiction over the estate of the minor. Payment by the Company pursuant to
any unrevoked Beneficiary designation, or to the Participant’s estate if no such
designation exists, of all benefits owed hereunder shall terminate any and all
liability of the Company or Participating Company.

(d) “Board of Directors” or “Board” shall mean the Board of Directors of the
Company.

(e) “Bonuses” shall mean the incentive compensation earned during the Company’s
fiscal year.

(f) “Change in Control” shall be deemed to have occurred, if any of the events
in subparagraphs (1)-(3) below occur during the term of this Plan:

(1) A change in effective control of the Company as defined in Treasury
Regulation 1.409A - 3(i)(s)(vi); or

 

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(2) A change in ownership of the Company as defined in Treasury Regulation
§ 1.409A – 3(i)(5)(v); or

(3) A change in ownership of a substantial portion of the Company assets as
defined in Treasury Regulation § 1.409A – 3(i)(5)(vii).

(g) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(h) “Committee” shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article VII.

(i) “Company” shall mean Safeway Inc. and any successor corporations.

(j) “Company Discretionary Contribution Account” shall mean the bookkeeping
account maintained by Company for each Participant that is credited with an
amount equal to the Company Discretionary Amount, if any, and earnings and
losses pursuant to Section 4.2(b).

(k) “Company Discretionary Contributions” shall mean, for each Participant for a
Plan Year, an additional discretionary amount allocated to a Participant under
this Plan as determined by the Committee. Such amount may differ from
Participant to Participant both in amount including no contribution and as a
percentage of Compensation.

(l) “Compensation” shall mean Base Salary, and Bonuses that the Participant is
entitled to receive for services rendered to the Participating Company.

(m) “Deferral Account” shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the Participant’s Compensation that he or she elects to defer
pursuant to Section 3.1, and (2) the earnings and losses pursuant to
Section 4.1(b) as calculated on the last Valuation Date.

(n) “Deferral Election” shall mean an Eligible Employee’s annual election to
defer Base Salary and Bonus(es) on such form and at such time that the Company
prescribes in accordance with the Plan and applicable laws.

(o) “Disabled” or “Disability” shall mean that an individual is determined to be
totally disabled by the Social Security Administration.

(p) “Distributable Amount” shall mean the sum of the vested balance of a
Participant’s Deferral Account, 401(k) Excess Account and Company Discretionary
Contribution Account as calculated on the last Valuation Date.

(q) “Eligible Employee” shall mean any individual selected by the Committee from
those employees of a Participating Company (i) at the level of “director” or
above and/or who is eligible to participate in the director level bonus plan,
(ii) whose potential maximum Compensation for a Plan Year is at least $100,000,
as adjusted by the Committee from time to time, (iii) who is not non-exempt or
subject to a collective bargaining agreement, and (iv) who receives notice of
his or her eligibility. The Committee may, in its sole discretion, select such
any other individual to participate in the Plan who do not otherwise meet the
foregoing criteria.

 

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(r) “Employer” shall mean the Company or the entity for whom services are
performed and with respect to whom the legally binding right to compensation
arises, and all entities with whom the Company would be considered a single
employer under Section 414(b) of the Code; provided that in applying
Section 1563(a)(1), (2), and (3) of the Code for purposes of determining a
controlled group of corporations under Section 414(b) of the Code, the language
“at least 50 percent” is used instead of “at least 80 percent” each place it
appears in Section 1563(a)(1), (2), and (3) of the Code, and in applying
Treasury Regulation § 1.414(c)-2 for purposes of determining trades or
businesses (whether or not incorporated) that are under common control for
purposes of Section 414(c) of the Code, “at least 50 percent” is used instead of
“at least 80 percent” each place it appears in Treasury Regulation § 1.414(c)-2;
provided, however, “at least 20 percent” shall replace “at least 50 percent” in
the preceding clause if there is a legitimate business criteria for using such
lower percentage.

(s) “Enrollment Period” shall mean the time period in which the Company
determines that a Participant may make a Deferral Election.

(t) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

(u) “401(k) Excess Account” shall mean the bookkeeping account maintained by the
Company for each Participant that is credited with amounts equal to (1) the
Participant’s 401(k) Excess Contributions, and (2) the earnings and losses
pursuant to Section 4.3(b).

(v) “401(k) Excess” shall mean the amount, if any, limited by or distributable
to a Participant from the 401(k) Plan by reason of Section 40l(k)(8) of the Code
and the regulations issued thereunder, or which may not be contributed to the
401(k) Plan by reason of the limitations set forth in Section 402(g) of the
Code.

(w) “401(k) Plan” shall mean the defined contribution plan, if any, maintained
by a Participating Company under Section 401(k) of the Code, as in effect from
time to time.

(x) “Fund” or “Funds” shall mean one or more of the investment funds selected by
the Committee pursuant to Section 3.2(b).

(y) “Identification Date” shall mean each December 31.

(z) “Initial Election” shall mean the first election of an Eligible Employee’s
deferral, in accordance with Section 3.1.

(aa) “Initial Election Period” for a newly Eligible Employee, shall mean the
30-day period following the time an individual receives notice of eligibility to
participate in the Plan.

(bb) “Interest Rate” shall mean, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month.

 

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(cc) “Key Employee” shall mean a Participant who, on an Identification Date, is:

(1) An officer of the Company having annual compensation greater than the
compensation limit in Section 416(i)(1)(A)(i) of the Code, provided that no more
than fifty officers shall be determined to be Key Employees as of any
Identification Date;

(2) A five percent owner of the Company; or

(3) A one percent owner of the Company having annual Compensation from the
Company of more than $150,000.

For purposes of this Section 1.2(cc) only and for determining whether a
Participant is a Key Employee, the “Company” shall mean the Company and its
affiliates that are treated as a single employer under Section 414(b) or (c) of
the Code, and for purposes of determining whether a Participant is a Key
Employee Treasury Regulation § 1.415(c) - 2(d)(3) shall be used to calculate
compensation. If a Participant is identified as a Key Employee on an
Identification Date, then such Participant shall be considered a Key Employee
for purposes of the Plan during the period beginning on the first April 1
following the Identification Date and ending on the next March 31.

(dd) “Participant” shall mean any Eligible Employee who becomes a Participant in
accordance with Article II.

(ee) “Participating Company” shall mean the Company and each entity which is a
member of a controlled group of entities (within the meaning of Section 414(b)
or (c) of the Code) of which Safeway Inc. is a component member, if the Company
determines that such entity’s employees may participate in the Plan.

(ff) “Payment Date” shall mean the time as soon as practicable, but no later
than 90 days, after the first day of the month following the end of the calendar
quarter in which the Participant’s Separation from Service occurs for any
reason.

(gg) “Plan” shall mean the Safeway Executive Deferred Compensation Plan II set
forth herein, now in effect, or as amended from time to time.

(hh) “Plan Year” shall mean the 12 consecutive month period beginning on each
January 1 and ending on each December 31.

(ii) “Prior Plan” shall mean the Safeway Executive Deferred Compensation Plan,
as in effect on December 31, 2004.

(jj) “Retirement” shall mean a Participant’s Separation from Service with an
Employer on or after age 55 in accordance with the Company’s retirement policies
as then in effect.

(kk) “Scheduled Withdrawal Date” shall be in January in the year elected by the
Participant for an in-service withdrawal of all amounts of Compensation, and
prior to January 1, 2007 Compensation and/or 401(k) Excess, that a Participant
elects to defer in a given Plan Year, and earnings and losses attributable
thereto, as set forth on the election forms for such Plan Year.

 

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(ll) “Separation from Service” shall mean termination of employment with an
Employer, other than by reason of Disability or death. A Participant shall not
be deemed to have Separated from Service if the Participant continues to provide
services to an Employer at an annual rate that is fifty percent or more of the
services rendered, on average, during the immediately preceding three full years
of employment with an Employer (or if employed by an Employer less than three
years, such lesser period); provided, however, that a Separation from Service
will be deemed to have occurred if a Participant’s service with an Employer is
reduced to an annual rate that is less than twenty percent of the services
rendered, on average, during the immediately preceding three years of employment
with an Employer (or if employed by an Employer less than three years, such
lesser period).

(mm) “Trust” shall mean the Safeway Executive Deferred Compensation Plan Trust.

(nn) “Unforeseeable Emergency” shall have the same meaning as provided in
Section 409(A)(2)(B)(ii) of the Code.

(oo) “Valuation Date” shall mean (i) for a Participant who experiences a
Separation from Service for any reason or a Disability, the last trading day of
the calendar quarter in which the Participant’s Separation from Service or
Disability occurs, and (ii) for a Participant who receives a Scheduled
Withdrawal, the last trading day of the calendar quarter preceding the month in
which the Scheduled Withdrawal occurs; provided, however, the Company may, in
its sole and absolute discretion, designate a different Valuation Date.
Notwithstanding the foregoing or anything in this Plan to the contrary, the
Valuation Date may be different for different Participants.

ARTICLE II.

PARTICIPATION

An Eligible Employee shall become a Participant in the Plan by (1) electing to
defer a portion of his or her Compensation in accordance with Section 3.1 or
having a Company Discretionary Contribution Account established in accordance
with Section 4.2, and (2) filing such other forms as the Committee may
reasonably require for participation hereunder. An Eligible Employee who
completes the requirements of the preceding sentence shall commence
participation in this Plan as of the first day of the month in which
Compensation is deferred in accordance with Section 3.1 or 4.2 or amounts are
credited in accordance with Section 4.2.

ARTICLE III.

DEFERRAL ELECTIONS

3.1 Elections to Defer Compensation.

(a) Elections under Prior Plan. The elections made by Participants under the
Prior Plan are deemed to be elections under this Plan to the extent such
deferrals applied to amounts earned or deferred after December 31, 2004.

 

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(b) Annual Election.

(1) Base Salary Deferrals. An Eligible Employee may make a Deferral Election no
later than the last day of the Plan Year preceding the Plan Year in which the
Base Salary is earned, and such Deferral Election shall be irrevocable on the
first day of the Plan Year for deferrals pertaining to that Plan Year. In the
event an Eligible Employee fails to timely file an election, he shall be deemed
to have elected not to have deferred any Base Salary for any relevant period.
Participant’s Deferral Election shall continue to be applied to each subsequent
Plan Year until modified or revoked; provided that any such modification or
cancellation shall apply to the Plan Year following the year in which
Participant files the modification or revokes his or her election.

(2) Bonus Deferrals. An Eligible Employee may make a Deferral Election no later
than the last day of the Plan Year preceding the Plan Year in which the Bonuses
are earned, and such Deferral Election shall be irrevocable on the first day of
the Plan Year to which it pertains. In the event an Eligible Employee fails to
timely file an election, he shall be deemed to have elected not to have deferred
any Bonuses for the relevant period.

(3) 401(k) Excess Deferrals. Prior to January 1, 2007, an Eligible Employee may
make a Deferral Election no later than the last day of the Plan Year preceding
the Plan Year in which the 401(k) Excess is earned, and such Deferral Election
shall be irrevocable on the first day of the Plan Year to which it pertains. In
the event an Eligible Employee fails to timely file an election, he shall be
deemed to have elected not to have deferred any 401(k) Excess for the relevant
period.

(c) Performance-Based Compensation. Notwithstanding the foregoing, the Company,
in its discretion, may permit a separate election to defer performance-based
compensation as defined in treasury regulation section 1.409A-1(e) of the Code,
and such election may be made no later than six months prior to the end of the
applicable performance period; provided, however, that such election shall be
made prior to the date that such performance-based compensation is readily
ascertainable. Any election made under this paragraph (c) shall be irrevocable
on the first day of such six-month period described in the preceding sentence,
or such earlier date as the Company provides in the election form.

(d) Initial Election Period. Notwithstanding the foregoing, each newly Eligible
Employee may defer Base Salary, and prior to January 1, 2007 may defer Base
Salary, Bonuses and/or 401(k) Excess, by making an election that conforms to the
requirements of this Section 3.1, in the manner prescribed by the Committee, no
later than the last day of his or her Initial Election Period. Such Initial
Election shall be irrevocable on the first day following the Initial Election
Period, unless the Company in its discretion requires an earlier date of
irrevocability. The Initial Election submitted pursuant to this paragraph (d)
shall apply only to compensation earned from the date that such Initial Election
is irrevocable.

 

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(e) General Rule. The amount of Compensation which a Participant may elect to
defer is such Compensation earned on or after the time at which the Participant
elects to defer and shall be a flat dollar amount or a percentage of Base Salary
and/or Bonus which shall not exceed 100% of the Participant’s Base Salary and/or
100% or his Bonus; provided that the total amount deferred by a Participant
shall be limited in any Plan Year, if necessary, to satisfy the Employee’s
withholding tax obligations (including income, Social Security, unemployment and
Medicare taxes), as determined in the sole and absolute discretion of the
Committee. The minimum deferral which may be elected to be made in any Plan Year
by a Participant shall not be less than $5,000, which shall be based on a
Participant’s Base Salary and target Bonus on the last day of the Enrollment
Period.

(f) Special Election(s). Notwithstanding the foregoing and during the transition
period provided in the regulations promulgated or notices issued under
Section 409A of the Code, the Company may provide a special election(s) with
respect to amounts deferred in 2005, 2006 and 2007; provided that the election
is made at least 12 months prior to the originally scheduled distribution date
and the election is made not later than December 31, 2007. An election made
pursuant to this paragraph (f) shall be treated as an initial deferral election
and shall be subject to any administrative rules imposed by the Company
including rules intended to comply with Section 409A of the Code, the Treasury
Regulations promulgated thereunder and applicable notices. No election under
this paragraph (f) shall (i) change the payment date of any distribution
otherwise scheduled to be paid in 2007 or cause a payment to be paid in 2007, or
(ii) be permitted after December 31, 2007.

(g) Cancellation of an Election. A Participant’s election to defer Base Salary
or Bonuses shall be cancelled during the Plan Year only if such Participant is
faced with an Unforeseeable Emergency or receives a hardship distribution under
a Participating Company’s 401(k) Plan and Participant will be suspended from
making additional deferrals under the Plan. Such suspension shall continue
through the end of Plan Year in which the Participant is faced with an
Unforeseeable Emergency and the Participant must submit a new election to defer
Base Salary or Bonuses, effective the Plan Year after the Plan Year in which the
Unforeseeable Emergency occurred, to resume participation in the Plan. If a
Participant receives a hardship distribution under a Participating Company’s
401(k) Plan, such Participant must submit a new election to defer Base Salary or
Bonuses, effective for the next Plan Year that is at least six months after the
date in which such Participant receives a hardship distribution.

3.2 Investment Elections.

(a) At the time of making the deferral elections described in Section 3.1, the
Participant shall designate, on a form provided by the Committee, the types of
investment funds the Participant’s Account will be deemed to be invested in for
purposes of determining the amount of earnings to be credited to that Account.
In making the designation pursuant to this Section 3.2, the Participant may
specify that all or any multiple of his Deferral Account shall be deemed to be
invested in one or more of the types of investment funds provided under the
Plan. If a Participant fails to elect a type of fund under this Section 3.2, he
or she shall be deemed to have elected the money market type of investment fund.

 

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(b) Although the Participant may designate the type of investment funds in
Section 3.2(a) above, the Committee shall not be bound by such designation. The
Committee shall select from time to time, in its sole discretion, such
investment funds to be the Funds available under the Plan. The Interest Rate of
each such investment fund shall be used to determine the amount of earnings or
losses to be credited to Participant’s Account under Article IV.

ARTICLE IV.

ACCOUNTS AND TRUST FUNDING

4.1 Deferral Accounts.

The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant’s Deferral Account shall be further
divided into separate subaccounts (“Investment Fund Subaccounts”), each of which
corresponds to a investment fund elected by the Participant pursuant to
Section 3.2(a). A Participant’s Deferral Account shall be credited as follows:

(a) Within five business days after each payroll date, the Committee shall
credit the Investment Fund Subaccounts of the Participant’s Deferral Account
with an amount equal to Compensation deferred by the Participant during each pay
period in accordance with the Participant’s election under Section 3.2(a); that
is, the portion of the Participant’s deferred Compensation that the Participant
has elected to be deemed to be invested in a certain type of investment fund
shall be credited to the Investment Fund Subaccount corresponding to that
investment fund;

(b) Each Investment Fund Subaccount of a Participant’s Deferral Account shall be
credited daily with earnings or losses in an amount equal to that determined by
multiplying the balance credited to such Investment Fund Subaccount as of the
last day of the preceding month plus contributions during the current month
commencing on the date such contributions are credited to the Investment Fund
Subaccount by the Interest Rate for the corresponding fund selected by the
Company pursuant to Section 3.2(b).

(c) In the event that a Participant elects for a given Plan Year’s deferral of
Compensation to have a Scheduled Withdrawal Date, all amounts attributed to the
deferral of Compensation for such Plan Year shall be accounted for in a manner
which allows separate accounting for the deferral of Compensation and investment
gains and losses associated with such Plan Year’s deferral of Compensation.

4.2 Company Discretionary Contribution Account.

The Committee shall establish and maintain a Company Discretionary Contribution
Account for each Participant under the Plan, which shall be credited the amount
of Company Discretionary Contributions, if any, contributed to the Plan on
behalf of such Participant. Each Participant’s Company Discretionary
Contribution Account shall be further divided into separate Investment Fund
Subaccounts corresponding to the investment fund elected by the Participant
pursuant to Section 3.2(a). A Participant’s Company Discretionary Contribution
Account shall be credited as follows:

 

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(a) The Committee shall credit the Investment Fund Subaccounts of the
Participant’s Company Discretionary Contribution Account with an amount equal to
the Company Discretionary Contribution Amount, if any, applicable to that
Participant, that is, the proportion of the Company Discretionary Contribution
Amount, if any, which the Participant elected to be deemed to be invested in a
certain type of investment fund shall be credited to the corresponding
Investment Fund Subaccount; and

(b) As of the last day of each month, each Investment Fund Subaccount of a
Participant’s Company Discretionary Contribution Account shall be credited with
earnings or losses in an amount equal to that determined by multiplying the
balance credited to such Investment Fund Subaccount as of the last day of the
preceding month plus contributions during the current month commencing on the
date such contributions are credited to the Investment Fund Subaccount by the
Interest Rate for the corresponding Fund selected by the Company pursuant to
Section 3.2(b).

4.3 401(k) Excess Account.

The Committee shall establish and maintain a 401(k) Excess Account for each
Participant under the Plan, for 401(k) Excess deferral made prior to January 1,
2008, which shall be credited the amount of 401(k) Excess, if any, contributed
to the Plan on behalf of such Participant. Each Participant’s 401(k) Excess
Account shall be further divided into separate Investment Fund Subaccounts
corresponding to the investment fund elected by the Participant pursuant to
Section 3.2(a). A Participant’s 401(k) Excess Account shall be credited as
follows:

(a) The Committee shall credit the Investment Fund Subaccounts of the
Participant’s 401(k) Excess Account with an amount equal to the 401(k) Excess,
if any, applicable to that Participant, that is, the proportion of the 401(k)
Excess, if any, which the Participant elected to be deemed to be invested in a
certain type of investment fund shall be credited to the corresponding
Investment Fund Subaccount; and

(b) As of the last day of each month, each Investment Fund Subaccount of a
Participant’s 401(k) Excess Account shall be credited with earnings or losses in
an amount equal to that determined by multiplying the balance credited to such
Investment Fund Subaccount as of the last day of the preceding month plus
contributions during the current month commencing on the date such contributions
are credited to the Investment Fund Subaccount by the Interest Rate for the
corresponding Fund selected by the Company pursuant to Section 3.2(b).

4.4 Trust Funding.

The Company has created the Trust to hold contributions made to this Plan. The
Company shall make contributions to the Trust in accordance with the terms of
the Trust.

Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Participating Companies and shall be used
exclusively for the uses and purposes of Plan Participants and beneficiaries as
set forth therein, neither the

 

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Participant nor their beneficiaries shall have any preferred claim on, or any
beneficial ownership in, any assets of the Trust prior to the time such assets
are paid to the Participants or beneficiaries as benefits and all rights created
under this Plan shall be unsecured contractual rights of Plan Participants and
beneficiaries against the Participating Companies. Any assets held in the Trust
will be subject to the claims of the Participating Companies’ general creditors
under federal and state law in the event of insolvency as defined in Section 3
of the Trust.

The assets of the Plan and Trust shall never inure to the benefit of the
Company, unless otherwise provided in the Trust, and the same shall be held for
the exclusive purpose of providing benefits to Participants and their
beneficiaries, other than reasonable expenses of administering the Plan and
Trust.

ARTICLE V.

VESTING

A Participant’s Deferral Account and 401(k) Excess shall be 100% vested at all
times. A Participant’s Company Discretionary Contribution Account, if any, shall
be subject to such vesting schedule as the Committee may establish at the time
the Company Discretionary Contributions are made under the Plan.

ARTICLE VI.

DISTRIBUTIONS

6.1 Distribution of Accounts.

(a) Election of Form of Payment. At the same time that a Participant elects to
defer compensation under Section 3.1, such Participant shall elect, in the
manner prescribed by the Committee, a form of payment for each Deferral Election
from the following:

(1) Any specified number of approximately equal quarterly installments (not in
excess of 60); provided, however, that a Participant may not elect a form of
distribution under this paragraph (1) unless his or her Account has a value of
$50,000 or more on the first day of the Enrollment Period. For purposes of this
Plan, installment payments shall be treated as a single distribution under
Section 409A of the Code. A Participant’s Accounts shall continue to be credited
with earnings pursuant to Section 4.1 of the Plan until all amounts credited to
his or her Accounts under the Plan have been distributed; or

(2) A lump sum.

(b) Distribution upon Separation from Service. Upon a Participant’s Separation
from Service (other than on account of Retirement), the Distributable Amount
shall be paid to the Participant in a lump sum on the Payment Date.

(c) Distribution upon Retirement. Upon Retirement, the Distributable Amount
shall be paid to the Participant in the form elected by the Participant, or if
no election has been made then in ten annual installments. Distributions under
this paragraph (c) shall be made, or begin to be made, on the Payment Date.

 

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(d) Delayed Distribution to Key Employees. Notwithstanding any other provision
of this Article VI to the contrary, the distributions scheduled to be made upon
Separation from Service or Retirement to a Participant who is identified as a
Key Employee as of the date he Separates from Service shall be made or begin to
be made the time as soon as practicable, but no later than 30 days, after the
first day of the month following the date which is the six month anniversary of
the date in which the Participant’s Separation from Service occurs for any
reason. The identification of a Participant as a Key Employee shall be made by
the Committee in its sole discretion in accordance with Section 1.2(cc) of the
Plan and Sections 416(i) and 409A of the Code and the regulations promulgated
thereunder.

(e) Distribution on a Scheduled Withdrawal Date. In the case of a Participant
who has elected a Scheduled Withdrawal Date for a distribution while still in
the employ of the Company, such Participant shall receive his or her
Distributable Amount, but only with respect to those deferrals of Compensation,
and prior to January 1, 2008 Compensation and 401(k) Excess, and earnings on
such amounts as shall have been elected by the Participant to be subject to the
Scheduled Withdrawal Date in accordance with Section 1.2(kk) of the Plan. A
Participant’s Scheduled Withdrawal Date with respect to amounts of Compensation,
and prior to January 1, 2008 Compensation and 401(k) Excess, deferred in a given
Plan Year must be at least two years from the last day of the Plan Year for
which such deferrals are made.

Amounts to be distributed on a Scheduled Withdrawal Date shall be paid as
elected pursuant to paragraph (a) above; provided, however, if no valid election
has been made as to the form of payment, such distribution shall be paid in a
lump sum. A Participant may elect an optional form of payment only if the amount
to be distributed on the Scheduled Withdrawal Date exceeds the amount in
paragraph (g) below.

In the event a Participant Separates from Service prior to a Scheduled
Withdrawal Date, the Participant’s entire Distributable Amount shall be paid in
a lump sum on the Payment Date. In the event of Participant’s Retirement or
Disability prior to a Scheduled Withdrawal Date, the Participant’s entire
Distributable Amount will be paid in accordance with paragraph (c) or (f),
respectively.

(f) Distribution upon Disability. If the Committee determines that a Participant
has become Disabled, the Distributable Amount shall be paid to the Participant
in the form elected by the Participant, or if no election has been made in a
lump sum. Distributions under this paragraph (d) shall be made, or begin to be
made, within 90 days of the date that Participant is determined to be Disabled.

(g) De Minimis Account.

(1) Predetermined Cashouts. Notwithstanding any provision to the contrary, in
the event a Participant’s Account is equal or less than $50,000 on the date in
which the Participant Retires or is determined to be Disabled, Participant’s
Account shall be distributed to him or her in a lump sum on the Payment Date.

 

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(2) Discretionary Cashouts. Notwithstanding any provision to the contrary, in
the event a Participant’s aggregate total of his or her Account and account
balance(s) under each plan or arrangement that may be aggregated with the Plan
under Treasury Regulation § 1.409A–1(c)(2) is equal to or less than the limit
under Section 402(g)(1)(B) of the Code, the Company in its discretion may
distribute such Account to the Participant or his Beneficiary in a lump sum.

(h) Distribution Upon Death. In the event the Participant dies, the
Distributable Amounts in the Participant’s Account shall be paid in a lump sum
to his or her Beneficiary as soon as practicable, but not later than 90 days,
after the date of Participant’s death.

(i) Prohibition on Acceleration. Notwithstanding any other provision of the Plan
to the contrary, no distribution will be made from the Plan that would
constitute an impermissible acceleration of payment as defined in
Section 409A(a)(3) of the Code and the regulations promulgated thereunder.

6.2 Subsequent Deferral Election.

(a) Scheduled Withdrawals. A Participant may elect to change the time of the
Scheduled Withdrawal Date and/or the form in which the distributions on the
Scheduled Withdrawal Date is made for any Plan Year; provided such change occurs
at least one year before the Scheduled Withdrawal Date and the change in time is
for a period of not less than five years from the Scheduled Withdrawal Date
prior to such change. The election to delay the Scheduled Withdrawal Date shall
be irrevocable 12 months prior to the first day of the month in which the
distributions on the Scheduled Withdrawal Date is scheduled to occur. A
Participant who has modified a Scheduled Withdrawal Date, may again once further
modify the Scheduled Withdrawal Date, but only with the consent of the
Committee.

(b) Retirement. A Participant may elect to change the form of payment upon
Retirement for the deferral Compensation and Company Discretionary Contributions
for any Plan Year; provided that such extension occurs at least one year before
Participant’s Retirement date and the Payment Date shall be delayed for a period
of five years. The election to change the form of payment upon Retirement shall
be irrevocable 12 months prior to the Participant’s Retirement date.

6.3 Distribution Upon an Unforeseeable Emergency.

The Committee may, in its sole discretion, direct payment to a Participant of
all or any portion of the Participant’s Account balance, notwithstanding the
election under Section 6.1(a) above, at any time that the Committee determines
that such Participant has suffered an Unforeseeable Emergency which causes an
emergency condition in the Participant’s financial affairs. Payment under this
Section 6.3 shall be made in a lump sum as soon as administratively practicable,
but not later than 90 days, after the Unforeseeable Emergency distribution is
approved.

 

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6.4 Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary
within two years following the required Payment Date, the amount allocated to
the Participant’s Account shall be treated in accordance under applicable law.
If, after such forfeiture, the Participant or Beneficiary later claims such
benefit, such benefit may be reinstated without interest or earnings, subject to
applicable laws.

ARTICLE VII.

ADMINISTRATION

7.1 Committee.

A Committee shall be appointed by, and serve at the pleasure of, the Board of
Directors. The number of members comprising the Committee shall be determined by
the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of resignation to the
Board. The Board may remove any member by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of the
Committee shall be filled promptly by the Board.

7.2 Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee. Any action permitted to be taken at a meeting may be
taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant. The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.

7.3 Powers and Duties of the Committee.

(a) The Committee, on behalf of the Participants and their Beneficiaries, shall
enforce the Plan in accordance with its terms, shall be charged with the general
administration of the Plan, and shall have all powers necessary to accomplish
its purposes as set forth herein, including, but not by way of limitation, the
following:

(1) To select the funds in accordance with Section 3.2(b) hereof;

(2) To construe and interpret the terms and provisions of the Plan and to remedy
any inconsistencies or ambiguities hereunder;

(3) To select employees eligible to participate in the Plan;

(4) To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;

 

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(5) To maintain all records that may be necessary for the administration of the
Plan;

(6) To provide for the disclosure of all information and the filing or provision
of all reports and statements to Participants, Beneficiaries or governmental
agencies as shall be required by law;

(7) To make and publish such rules for the regulation of the Plan and procedures
for the administration of the Plan as are not inconsistent with the terms
hereof;

(8) To appoint a plan administrator or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as the
Committee may from time to time prescribe; and

(9) To take all actions necessary for the administration of the Plan.

7.4 Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including but not limited to the Company and any
Participant or Beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.

7.5 Information.

To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.

7.6 Compensation, Expenses and Indemnity.

(a) The members of the Committee shall serve without compensation for their
services hereunder.

(b) The Committee is authorized at the expense of the Company to employ such
legal counsel and other advisors as it may deem advisable to assist in the
performance of its duties hereunder. Expenses and fees in connection with the
administration of the Plan shall be paid by the Company.

(c) To the extent permitted by applicable state law, the Participating Companies
shall indemnify and save harmless the Committee and each member thereof, the
Board of Directors and any delegate of the Committee who is an employee of a
Participating Company against any and all expenses, liabilities and claims,
including legal fees to defend against such liabilities and claims arising out
of their discharge in good faith of responsibilities under or incident to the
Plan, other than expenses and liabilities arising out of willful misconduct.
This indemnity shall not preclude such further indemnities as may be available
under insurance purchased by the Company or provided by the Company under any
bylaw, agreement or otherwise, as such indemnities are permitted under state
law.

 

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7.7 Quarterly Statements.

Under procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant’s Accounts on a quarterly basis.

ARTICLE VIII.

CLAIMS AND APPEALS PROCEDURES

8.1 Informal Resolution of Questions.

Any Participant or Beneficiary who has questions or concerns about his or her
benefits under the Plan is encouraged to communicate with the Retirement
Benefits Department of the Company. If this discussion does not give the
Participant or Beneficiary satisfactory results, a formal claim for benefits may
be made in accordance with the procedures of this Article VIII.

8.2 Formal Benefits Claim.

An Executive or Beneficiary may make a written request for review of any matter
concerning his or her benefits under this Plan. The claim must be addressed to
the Senior Vice President, Human Resources, Safeway, Inc., 5918 Stoneridge Mall
Road, Pleasanton, CA 94588-3492. The Senior Vice President, Human Resources or
his or her delegate, or if there is neither is available then the Company’s
Benefit Plans Committee (“Senior Vice President”) shall decide the action to be
taken with respect to any such request and may require additional information if
necessary to process the request. The Senior Vice President shall review the
request and shall issue his or her decision, in writing, no later than 90 days
after the date the request is received, unless the circumstances require an
extension of time. If such an extension is required, written notice of the
extension shall be furnished to the person making the request within the initial
90-day period, and the notice shall state the circumstances requiring the
extension and the date by which the Senior Vice President expects to reach a
decision on the request. In no event shall the extension exceed a period of 90
days from the end of the initial period.

8.3 Notice of Denied Request.

If the Senior Vice President denies a request in whole or in part, he or she
shall provide the person making the request with written notice of the denial
within the period specified in Section 8.2. The notice shall set forth the
specific reason(s) for the denial, reference to the specific Plan provision(s)
upon which the denial is based, a description of any additional material or
information necessary to perfect the request, an explanation of why such
information is required, and an explanation of the Plan’s appeal procedures and
the time limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on review.

 

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8.4 Appeal to Senior Vice President.

(a) A person whose request has been denied in whole or in part (or such person’s
authorized representative) may file an appeal of the decision in writing with
the Senior Vice President within 60 days of receipt of the notification of
denial. The appeal must be addressed to: Senior Vice President, Human Resources,
Safeway, Inc., 5918 Stoneridge Mall Road, Pleasanton, CA 94588-3492. The Senior
Vice President, for good cause shown, may extend the period during which the
appeal may be filed for another 60 days. The appellant and/or his or her
authorized representative shall be permitted to submit written comments,
documents, records and other information relating to the claim for benefits.
Upon request and free of charge, the applicant should be provided reasonable
access to and copies of, all documents, records or other information relevant to
the appellant’s claim.

(b) The Senior Vice President’s review shall take into account all comments,
documents, records and other information submitted by the appellant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination. The Senior Vice President shall
not be restricted in his or her review to those provisions of the Plan cited in
the original denial of the claim.

(c) The Senior Vice President shall issue a written decision within a reasonable
period of time but not later than 60 days after receipt of the appeal, unless
special circumstances require an extension of time for processing, in which case
the written decision shall be issued as soon as possible, but not later than 120
days after receipt of an appeal. If such an extension is required, written
notice shall be furnished to the appellant within the initial 60-day period.
This notice shall state the circumstances requiring the extension and the date
by which the Senior Vice President expects to reach a decision on the appeal.

(d) If the decision on the appeal denies the claim in whole or in part written
notice shall be furnished to the appellant. Such notice shall state the
reason(s) for the denial, including references to specific Plan provision(s)
upon which the denial was based. The notice shall state that the appellant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim
for benefits. The notice shall describe any voluntary appeal procedures offered
by the Plan and the appellant’s right to obtain the information about such
procedures. The notice shall also include a statement of the appellant’s right
to bring an action under Section 502(a) of ERISA.

(e) The decision of the Senior Vice President on the final appeal shall be
final, conclusive and binding upon all persons and shall be given the maximum
possible deference allowed by law.

8.5 Exhaustion of Remedies.

No legal or equitable action for benefits under the Plan shall be brought unless
and until the claimant has submitted a written claim for benefits in accordance
with Section 8.2, has been notified that the claim is denied in accordance with
Section 8.3, has filed a written request for a review of the claim in accordance
with Section 8.4, and has been notified in writing that the Senior Vice
President has affirmed the final denial of the appeal in accordance with
Section 8.4.

 

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ARTICLE IX.

MISCELLANEOUS

9.1 Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Participating Companies. No assets of the Participating Companies
shall be held in any way as collateral security for the fulfilling of the
obligations of the Participating Companies under this Plan. Any and all of the
Participating Companies’ assets shall be, and remain, the general unpledged,
unrestricted assets of the Company. The Company’s obligation under the Plan
shall be merely that of an unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall
be no greater than those of unsecured general creditors. It is the intention of
the Company that this Plan be unfunded for purposes of the Code and for purposes
of Title I of ERISA.

9.2 Restriction Against Assignment.

The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person, persons or entity.

(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.

(b) Notwithstanding the provisions of a 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 Section 414(p) of the Code.

9.3 Withholding.

There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Company in respect to such payment or this Plan.
The Company shall have the right to reduce any deferral of Participant’s payment
or compensation by the amount of such of cash sufficient to provide the amount
of said taxes.

 

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9.4 Amendment, Modification, Suspension or Termination.

(a) The Committee may amend, modify, suspend or terminate the Plan in whole or
in part, except that no amendment, modification, suspension or termination shall
have any retroactive effect to reduce any amounts allocated to a Participant’s
Accounts.

(b) Provided that it complies with Treasury Regulation § 1.409A-3(j)(4)(ix)(C),
the Board may terminate this Plan in its discretion as follows:

(1) The Accounts of Participants may be distributed within the period beginning
twelve months after the date the Plan was terminated and ending twenty-four
months after the date the Plan was terminated.

(2) Thirty days prior to or twelve months following a Change in Control and
distribute the Accounts of the Participants within the twelve-month period
following the termination of the Plan.

(3) Upon a corporate dissolution or liquidation of the Company that is taxed
under Section 331 of the Code or with the approval of a bankruptcy court
pursuant to 11 U.S.C. Section 503(b)(1)(A), provided that the Participant’s
Accounts are distributed and included in the gross income of the Participants by
the latest of (i) the calendar year in which the Plan terminates, or (ii) the
first calendar year in which payment of the Accounts is administratively
practicable.

9.5 Governing Law.

This Plan shall be construed, governed and administered in accordance with the
laws of the State of California.

9.6 Receipt of Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Committee and the Company. The Committee may require
such Participant or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect.

9.7 Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such termination shall constitute a full release and discharge of
the Committee and the Participating Companies.

 

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9.8 Limitation of Rights and Employment Relationship.

Neither the establishment of the Plan and Trust nor any modification thereof,
nor the creating of any fund or account, nor the payment of any benefits shall
be construed as giving to any Participant Beneficiary, or other person any legal
or equitable right against the Company or the trustee of the Trust except as
provided in the Plan and Trust, and in no event shall the terms of employment of
any Employee or Participant be modified or in any be effected by the provisions
of the Plan and Trust.

9.9 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.

9.10 Notice.

Any notice or filing required or permitted to be given to the Committee 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 delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.

9.11 Errors and Misstatements.

In the event of any misstatement or omission of fact by a Participant,
Beneficiary or other person to the Committee or any clerical error resulting in
payment of benefits in an incorrect amount, the Committee 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 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 Committee
shall direct or to proceed against the Participant or any other person entitled
to payment under the Plan for recovery of any such overpayment.

9.12 Pronouns and Plurality.

The masculine pronoun shall include the feminine pronoun, and the singular the
plural where the context so indicates.

9.13 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.

 

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9.14 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.

9.15 Headings.

Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.

IN WITNESS WHEREOF, the Company has caused this document to be executed by its
duly authorized officer on this 29th day of October, 2007.

 

SAFEWAY INC. By:   /s/ Michael J. Boylan Its:   Vice President

 

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