<PAGE>   1
                                                                     EXHIBIT 4.1


                                SAFEWAY EXECUTIVE
                           DEFERRED COMPENSATION PLAN

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>              <C>                                                          <C>
ARTICLE I.       TITLE AND DEFINITIONS....................................... 1

      1.1        Title....................................................... 1
      1.2        Definitions................................................. 1

ARTICLE II.      PARTICIPATION............................................... 4

ARTICLE III.     DEFERRAL ELECTIONS.......................................... 5

      3.1        Elections to Defer Compensation............................. 5
      3.2        Investment Elections........................................ 6

ARTICLE IV.      ACCOUNTS AND TRUST FUNDING.................................. 6

      4.1        Deferral Accounts........................................... 6
      4.2        Company Discretionary Contribution Account.................. 7
      4.3        401(k) Excess Account....................................... 7
      4.4        Trust Funding............................................... 8
      4.5        Forfeitures................................................. 8

ARTICLE V.       VESTING..................................................... 8

ARTICLE VI.      DISTRIBUTIONS............................................... 9

      6.1        Distribution of Accounts...................................  9
      6.2        Early Distributions........................................ 10
      6.3        Hardship Distribution...................................... 11
      6.4        Inability to Locate Participant............................ 11

ARTICLE VII.     ADMINISTRATION............................................. 11

      7.1        Committee.................................................. 11
      7.2        Committee Action........................................... 12
      7.3        Powers and Duties of the Committee......................... 12
      7.4        Construction and Interpretation............................ 13
      7.5        Information................................................ 13
      7.6        Compensation, Expenses and Indemnity....................... 13
      7.7        Quarterly Statements....................................... 13
      7.8        Disputes................................................... 13

ARTICLE VIII.    MISCELLANEOUS.............................................. 15
</TABLE>

                                        i
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<TABLE>
<S>             <C>                                                         <C>
      8.1        Unsecured General Creditor................................. 15
      8.2        Restriction Against Assignment............................. 15
      8.3        Withholding................................................ 15
      8.4        Amendment, Modification, Suspension or Termination......... 16
      8.5        Governing Law.............................................. 16
      8.6        Receipt of Release......................................... 16
      8.7        Payments on Behalf of Persons Under Incapacity............. 16
      8.8        Limitation of Rights and Employment Relationship........... 16
      8.9        Exempt ERISA Plan.......................................... 17
      8.10       Notice .................................................... 17
      8.11       Errors and Misstatements................................... 17
      8.12       Pronouns and Plurality..................................... 17
      8.13       Severability............................................... 17
      8.14       Status .................................................... 17
      8.15       Headings................................................... 18
</TABLE>

                                       ii

<PAGE>   4

                               SAFEWAY EXECUTIVE
                           DEFERRED COMPENSATION PLAN

     WHEREAS, Safeway Inc., a Delaware corporation (the "Company") desires to
establish the Safeway Executive Deferred Compensation 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, effective as of November 1, 1999.

     NOW, THEREFORE, effective as of November 1, 1999, 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.

     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 Deferred 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
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.

     (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 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

<PAGE>   5

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.

     (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)  "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (g)  "Committee" shall mean the Committee appointed by the Board to
administer the Plan in accordance with Article VII.

     (h)  "Company" shall mean Safeway Inc. and any successor corporations.
Company shall also include each corporation which is a member of a controlled
group of corporations (within the meaning of Section 414(b) of the Code) of
which Safeway Inc. is a component member, if the Board provides that such
corporation shall participate in the Plan and such corporation's governing board
of directors adopts this Plan.

     (i)  "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.

     (j)  "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.

     (k)  "Compensation" shall mean Base Salary, and Bonuses that the
Participant is entitled to receive for services rendered to the Company.

     (l)  "Deferred Amount" shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the

                                       2
<PAGE>   6

Participant's Compensation that he or she elects to defer pursuant to Section
3.1, and (2) the Interest Rate pursuant to Section 4.1(b).

     (m)  "Disability" shall mean a "disability" as defined in the Company's
long-term disability plan, as then in effect.

     (n)  "Distributable Amount" shall mean the sum of the vested balance of a
Participant's Deferred Account, 401(k) Excess Account and Company Discretionary
Contribution Account.

     (o)  "Early Distribution" shall mean an election by a Participant in
accordance with Section 6.2 to receive a withdrawal of amounts from his or her
Deferral Account, 401(k) Excess Account and Company Discretionary Contribution
Account prior to the time in which such Participant would otherwise be entitled
to such amounts.

     (p)  "Effective Date" shall mean November 1, 1999.

     (q)  "Eligible Employee" shall mean individuals selected by the Committee
from those employees of the Company (i) at the level of "director" or above
and/or who are eligible to participate in the director level bonus plan, and
(ii) whose potential maximum Compensation for a Calendar Year is at least
$100,000, as adjusted by the Committee from time to time. The Committee may, in
its sole discretion, select such other individuals to participate in the Plan
who do not otherwise meet the foregoing criteria.

     (r)  "401(k) Excess Account" shall mean the bookkeeping account maintained
by the Committee for each Participant that is credited with amounts equal to (1)
the Participant's 401(k) Excess Contributions, and (2) the Interest Rate
pursuant to Section 4.3(b).

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

     (t)  "401(k) Plan" shall mean the defined contribution plan, if any,
maintained by the Company under Code Section 401(k), as in effect from time to
time.

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

     (v)  "Hardship Distribution" shall mean a severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or accident of
the Participant or of his or her Dependent (as defined in Section 152(a) of the
Code), (ii) loss of a Participant's property due to casualty, or (iii) other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that would
constitute an unforeseeable emergency will depend upon the facts of each case,
but, in any case, a Hardship Distribution may not be made to the extent that
such hardship is or may be relieved (A) through reimbursement or compensation by
insurance or otherwise, (B) by liquidation of the Participant's

                                       3
<PAGE>   7

assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship, or (C) by cessation of deferrals under this Plan.

     (w)  "Initial Election Period" for an Eligible Employee on the Effective
Date shall mean the period ending October 27, 1999 and for each other Eligible
Employee the 30-day period following the time an individual receives notice of
eligibility to participate in the Plan.

     (x)  "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.

     (y)  "Participant" shall mean any Eligible Employee who becomes a
Participant in accordance with Section 2.1

     (z)  "Payment Date" shall mean the time as soon as practicable after (1)
the first day of the month following the end of the calendar quarter in which
the Participant's employment terminates for any reason, or (2) the Scheduled
Withdrawal Date.

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

     (bb) "Plan Year: shall mean the initial period beginning on November 1,
1999 and ending on December 31, 1999 and thereafter the 12 consecutive month
period beginning on each January 1 and ending on each December 31.

     (cc) "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.

     (dd) "Scheduled Withdrawal Date" shall be in January in the year elected by
the Participant for an in-service withdrawal of all amounts of Compensation or
401(k) Excess deferred or Company Discretionary Contributions in a given Plan
Year, and earnings and losses attributable thereto, as set forth on the election
forms for such Plan Year; provided that the Scheduled Withdrawal Date for
Company Discretionary Contributions shall not be sooner than two (2) years
following the date the Participant becomes fully vested in any such
contributions.

     (ee) "Termination of Employment" shall mean the Participant ceasing to be
an employee of the Company for reasons other than death, Disability or
Retirement.

     (ff) "Trust" shall mean the Safeway Executive Deferred Compensation Plan
Trust.


                                  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,
and (2) filing such other forms as the Committee may reasonably require for
participation hereunder. An Eligible

                                       4
<PAGE>   8

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.


                                  ARTICLE III.

                               DEFERRAL ELECTIONS

     3.1  Elections to Defer Compensation.

     (a)  Initial Election Period. Subject to the provisions of Article II, each
Eligible Employee may defer Base Salary, Bonuses and/or 401(k) Excess by filing
with the Committee an election that conforms to the requirements of this Section
3.1, on a form provided by the Committee, no later than the last day of his or
her Initial Election Period.

     (b)  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 in accordance with Section 3.1(a) 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% of his Bonus, provided
that the total amount deferred by a Participant shall be limited in any calendar
year, if necessary, to satisfy the Employee's income and employment tax
withholding obligations (including Social Security, unemployment and Medicare),
and the Employee's employee benefit plan contribution requirements, as
determined in the sole and absolute discretion of the Committee. The minimum
contribution which may be made in any Plan Year by a Participant shall not be
less than $5,000 ($2,500 in the initial Plan Year), provided such minimum
contribution can be satisfied from either deferrals of Base Salary, Bonus and/or
401(k) Excess.

     (c)  Duration of Compensation Deferral Election. An Eligible Employee's
initial election to defer Compensation or 401(k) Excess must be filed before the
Initial Election Period and is to be effective for the next pay period. A
Participant may modify or suspend his election to defer Compensation or 401(k)
Excess effective as of each March 1, June 1 and October 1 of a Plan Year by
filing such an election at least 30 days prior to the effective date of such
modification or suspension. A Participant must file a new election for each
subsequent Plan Year on or before December 1, which election shall be effective
on the first day of the next following Plan Year. In the event a Participant
fails to timely file an election, he should be deemed to have elected not to
have deferred any Compensation or 401(k) Excess for any relevant period.

     (d)  Elections other than Elections during the Initial Election Period.
Subject to the limitations of Section 3.1(b) above, any Eligible Employee who
fails to elect to defer Compensation and/or 401(k) Excess during his or her
Initial Election Period may subsequently become a Participant, and any Eligible
Employee who has terminated a prior deferral election may elect to again defer
Compensation and/or 401(k) Excess, by filing an election, on a form provided by
the Committee, to defer Compensation as described in Sections 3.1(b) and 3.1(c)
above. An election to defer Compensation and/or 401(k) Excess must be filed at
least 30 days prior to the effective date of such election and will be effective
for Compensation and/or 401(k) Excess earned during periods beginning after the
effective date of such election.

                                       5
<PAGE>   9

     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 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. Effective
as of the first day of the next calendar month a Participant may change the
designation made under this Section 3.2 by filing an election, on a form
provided by the Committee, at least five calendar days prior to the end of the
month prior to the month in which such change will be effective. 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.

     (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)  As of the last day of each month, each investment fund subaccount of a
Participant's Deferral 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).

                                       6
<PAGE>   10

     (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:

     (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, 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

                                       7
<PAGE>   11

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 contribute to the Trust an amount equal to the amount
deferred by each Participant for the Plan Year.

          Although the principal of the Trust and any earnings thereon shall be
held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Plan Participants and beneficiaries as
set forth therein, neither the 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 Company. Any assets
held in the Trust will be subject to the claims of Company's general creditors
under federal and state law in the event of insolvency as defined in Section 3
of the Trust.

          Except as provided in Section 4.5, the assets of the Plan and Trust
shall never inure to the benefit of the Company 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.

     4.5  Forfeitures.

          The Company may use (i) forfeitures of any non-vested Company
Discretionary Contributions, (ii) amounts forfeited under Section 6.2(d) upon
Early Distribution, and (iii) amounts forfeited under Section 6.4, to pay
expenses and costs associated with the administration of the Plan and Trust
and/or to restore Participants' Accounts under Section 6.4.


                                   ARTICLE V.

                                     VESTING

          A Participant's Deferral Account and 401(k) Excess Account 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 to the
Plan.

                                       8
<PAGE>   12

                                  ARTICLE VI.

                                  DISTRIBUTIONS

     6.1  Distribution of Accounts.

     (a)  Distribution upon Termination of Employment. Upon Termination of
Employment or the death of the Participant while in the employ of the Company,
the Distributable Amount shall be paid to the Participant (and after his or her
death to his or her Beneficiary) in a lump sum on the Participant's Payment
Date.

     (b)  Distribution upon Disability or Retirement. Upon the Disability or
Retirement of the Participant from employment with the Company, the
Distributable Amount shall be paid to the Participant in substantially equal
quarterly installments over ten (10) years beginning on the Participant's
Payment Date. An optional form of payment upon Disability or Retirement may be
elected by the Participant on the form provided by Company at the time of his
deferral election from among the following:

          (1)  Substantially equal quarterly installments over five (5) years
beginning on the Participant's Payment Date,

          (2)  Substantially equal quarterly installments over fifteen (15)
years beginning on the Participant's Payment Date, or

          (3)  A lump sum.

          Notwithstanding, any provision to the contrary, in the event a
Participant's Distributable Amount is equal to or less than $50,000, such
Distributable Amount shall be distributed to the Participant or his Beneficiary
in a lump sum . A Participant may change his election with respect to the
frequency of payment, provided such change in the frequency of payment occurs at
least one year prior to the Participant's Termination of Employment because of
Retirement.

               The 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.

     (c)  Distribution With 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,
401(k) Excess and vested Company Discretionary Contributions 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(y) of the Plan. A
Participant's Scheduled Withdrawal Date with respect to amounts of Compensation
and/or 401(k) Excess deferred in a given Plan Year be at least two (2) years
from the last day of the Plan Year for which such deferrals are made. A
Participant's Scheduled Withdrawal Date with respect to Company Discretionary
Contributions must be at least two (2) years after the Participant becomes fully
vested in such Company Discretionary Contributions.

                                       9
<PAGE>   13

          Amounts to be distributed on a Scheduled Withdrawal Date shall be paid
in a lump sum, unless the Participant elects an optional form of payment. A
Participant may elect an optional form of payment only if the amount to be
distributed on the Scheduled Withdrawal Date exceeds $50,000. The Participant
may elect the optional form of payment on the form provided by the Company at
the time of his deferral election with respect to his deferrals of Compensation
and/or 401(k) Excess and at the time he becomes fully vested in his Company
Discretionary Contributions, if any. The optional forms of payments that the
Participant may elect are payments in substantially equal quarterly installments
over a period of two (2) years, three (3) years, four (4) years or five (5)
years beginning on the Participant's Payment Date.

          A Participant may extend the Scheduled Withdrawal Date for the
deferral of Compensation and Company Discretionary Contributions for any Plan
Year, provided such extension occurs at least one year before the Scheduled
Withdrawal Date and is for a period of not less than two (2) years from the
Scheduled Withdrawal Date. The Participant shall have the right to modify any
Scheduled Withdrawal Date only once, without the consent of the Committee. 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.

          In the event a Participant's Termination of Employment prior to a
Scheduled Withdrawal Date, the Participant's entire Distributable Amount will be
paid as soon as practicable after the Termination of Employment in a lump sum.
In the event of Participant's Disability or Retirement prior to a Scheduled
Withdrawal Date, the Participant's entire Distributable Amount will be paid in
accordance with Section 6.1(b).

     (d)  In the event a Participant dies after he has begun receiving
distributions under Section 6.1(b) with a remaining balance in his or her
Account, the balance shall be paid in a lump sum.

     6.2  Early Distributions.

          A Participant shall be permitted to elect an Early Distribution from
his or her Deferral Account, 401(k) Excess Account and vested Company
Discretionary Contribution Account prior to the Payment Date, subject to the
following restrictions:

     (a)  The election to take an Early Distribution shall be made by filing a
form provided by and filed with the Committee prior to the end of any calendar
month.

     (b)  The amount of the Early Distribution shall in all cases be an amount
not less than $10,000.

     (c)  The amount described in subsection (b) above shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar month in
which the Early Distribution election is made.

     (d)  If a Participant requests an Early Distribution, 10% of the gross
amount to be distributed shall be permanently forfeited and the Company shall
have no obligation to the Participant or his Beneficiary with respect to such
forfeited amount.

                                       10
<PAGE>   14

     (e)  If a Participant receives an Early Distribution the Participant will
be ineligible to contribute deferrals to the Plan for the remainder of the Plan
Year and for the next following Plan Year.

     6.3  Hardship Distribution.

          A Participant shall be permitted to elect a Hardship Distribution in
accordance with Section 1.2(r) of the Plan prior to the Payment Date, subject to
the following restrictions:

     (a)  The election to take a Hardship Distribution shall be made by filing
form provided by and filed with Committee prior to the end of any calendar
month.

     (b)  The Committee shall have made a determination that the requested
distribution constitutes a Hardship Distribution in accordance with Section
1.2(r) of the Plan.

     (c)  The amount determined by the Committee as a Hardship Distribution
shall be paid in a single cash lump sum as soon as practicable after the end of
the calendar month in which the Hardship Distribution election is made and
approved by the Committee.

     (d)  If a Participant receives a Hardship Distribution, the Participant
will be ineligible to contribute deferrals to the Plan, for the balance of the
Plan Year and the following Plan Year.

     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 forfeited. If, after such
forfeiture, the Participant or Beneficiary later claims such benefit, such
benefit shall be reinstated without interest or earnings, subject to applicable
escheat 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.

                                       11
<PAGE>   15

     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 of 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;

          (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.

                                       12
<PAGE>   16

     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 Company 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 the 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.

     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 as of each March 31, June 30, September 30 and December 31.

     7.8  Disputes.

     (a)  Claim.

          A person who believes that he or she is being denied a benefit to
which he or she is entitled under this Agreement (hereinafter referred to as
"Claimant") may file a written

                                       13
<PAGE>   17

request for such benefit with the Company, setting forth his or her claim. The
request must be addressed to the President of the Company at its then principal
place of business.

     (b)  Claim Decision.

          Upon receipt of a claim, the Company shall advise the Claimant that a
reply will be forthcoming within ninety (90) days and shall, in fact, deliver
such reply within such period. The Company may, however, extend the reply period
for an additional ninety (90) days for special circumstances.

          If the claim is denied in whole or in part, the Company shall inform
the Claimant in writing, using language calculated to be understood by the
Claimant, setting forth: (i) the specified reason or reasons for such denial;
(ii) the specific reference to pertinent provisions of this Agreement on which
such denial is based; (iii) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation of why such material or such information is necessary; (iv)
appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review; and (v) the time limits for requesting a review
under subsection (c).

     (c)  Request For Review.

          With sixty (60) days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Committee
review the determination of the Company. Such request must be addressed to the
Secretary of the Company, as its then principal place of business. The Claimant
or his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Committee. If the Claimant does not request a review within such sixty
(60) day period, he or she shall be barred and estoppel from challenging the
Company's determination.

     (d)  Review of Decision.

          Within sixty (60) days after the Committee's receipt of a request for
review, after considering all materials presented by the Claimant, the Committee
will inform the Participant in writing, in a manner calculated to be understood
by the Claimant, the decision setting forth the specific reasons for the
decision contained specific references to the pertinent provisions of this
Agreement on which the decision is based. If special circumstances require that
the sixty (60) day time period be extended, the Committee will so notify the
Claimant and will render the decision as soon as possible, but no later than one
hundred twenty (120) days after receipt of the request for review.

                                       14
<PAGE>   18

                                   ARTICLE VIII.

                                  MISCELLANEOUS

     8.1  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 Company. No assets of the Company shall be held in any
way as collateral security for the fulfilling of the obligations of the Company
under this Plan. Any and all of the Company's 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.

     8.2  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 or corporation.

     (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 the Code or Title 1 of ERISA.

     8.3  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 payment (or compensation)
by the amount of such of cash sufficient to provide the amount of said taxes.

                                       15
<PAGE>   19

     8.4  Amendment, Modification, Suspension or Termination.

          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. In the event that this Plan is terminated, the amounts
allocated to a Participant's Accounts shall be distributed to the Participant
or, in the event of his or her death, his or her Beneficiary in a lump sum
within thirty (30) days following the date of termination.

     8.5  Governing Law.

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

     8.6  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.

     8.7  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 Company.

     8.8  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 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.

                                       16
<PAGE>   20

     8.9  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.

     8.10 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.

     8.11 Errors and Misstatements

          In the event of any misstatement or omission of fact by a Participant
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.

     8.12 Pronouns and Plurality

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

     8.13 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.

     8.14 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.

                                       17
<PAGE>   21

     8.15 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 1st day of November, 1999.



                                        By:  Dick W. Gonzales
                                             -----------------------------------

                                        Its: Senior Vice President,
                                             -----------------------------------
                                             Human Resources
                                             -----------------------------------

                                       18