Blackhawk Marketing Services, Inc. 2006 Restricted Stock Plan



 Exhibit 10.1 
 BLACKHAWK MARKETING SERVICES, INC. 
 2006 RESTRICTED STOCK PLAN 
 FOR ELIGIBLE EMPLOYEES OF SAFEWAY INC. 







 BLACKHAWK MARKETING SERVICES, INC. 
 2006 RESTRICTED STOCK PLAN 
 FOR ELIGIBLE EMPLOYEES OF SAFEWAY INC.

 Table of Contents 
  

					
	 	  	 	  	Page
		
	ARTICLE I. DEFINITIONS 	  	1
			
	 1.1.
	  	ADMINISTRATOR	  	1
	 1.2.
	  	AWARD	  	1
	 1.3.
	  	AWARD AGREEMENT	  	1
	 1.4.
	  	BLACKHAWK	  	1
	 1.5.
	  	BOARD	  	1
	 1.6.
	  	CODE	  	1
	 1.7.
	  	COMMITTEE	  	1
	 1.8.
	  	COMMON STOCK	  	1
	 1.9.
	  	COMPANY	  	1
	 1.10.
	  	EMPLOYEE	  	2
	 1.11.
	  	EXCHANGE ACT	  	2
	 1.12.
	  	FAIR MARKET VALUE	  	2
	 1.13.
	  	HOLDER	  	2
	 1.14.
	  	PLAN	  	2
	 1.15.
	  	RESTRICTED STOCK	  	2
	 1.16.
	  	SECURITIES ACT	  	2
	 1.17.
	  	SUBSIDIARY	  	2
	 1.18.
	  	STOCKHOLDERS’ AGREEMENT	  	2
	 1.19.
	  	TERMINATION OF EMPLOYMENT	  	2
		
	ARTICLE II. SHARES SUBJECT TO PLAN 	  	3
			
	 2.1.
	  	SHARES SUBJECT TO PLAN	  	3
	 2.2.
	  	ADD-BACK OF CERTAIN SHARES	  	3
		
	ARTICLE III. AWARD OF RESTRICTED STOCK 	  	3
			
	 3.1.
	  	ELIGIBILITY	  	3
	 3.2.
	  	AWARD OF RESTRICTED STOCK	  	3
	 3.3.
	  	AWARD AGREEMENT	  	3
	 3.4.
	  	RESTRICTION	  	3
	 3.5.
	  	REPURCHASE OF RESTRICTED STOCK	  	4
	 3.6.
	  	STOCKHOLDERS’ AGREEMENT	  	4
	 3.7.
	  	CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES	  	4
	 3.8.
	  	INVESTMENT INTENT	  	5
	 3.9.
	  	ESCROW	  	5
	 3.10.
	  	RIGHTS AS STOCKHOLDERS	  	5
	 3.11.
	  	LEGEND	  	5
	 3.12.
	  	SECTION 83(B) ELECTION	  	5
		
	ARTICLE IV. ADMINISTRATION 	  	6
			
	 4.1.
	  	ADMINISTRATOR	  	6
	 4.2.
	  	POWERS OF THE ADMINISTRATOR	  	6
	 4.3.
	  	MAJORITY RULE; UNANIMOUS WRITTEN CONSENT	  	7
	 4.4.
	  	COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS	  	7


	

  

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 BLACKHAWK MARKETING SERVICES, INC. 
 2006 RESTRICTED STOCK PLAN 
 FOR ELIGIBLE EMPLOYEES OF SAFEWAY INC.

 Table of Contents 
  

					
	 	  	 	  	Page
	 ARTICLE V. MISCELLANEOUS PROVISIONS 
	  	8
			
	 5.1.
	  	NOT TRANSFERABLE.	  	8
	 5.2.
	  	AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN	  	8
	 5.3.
	  	CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY, ACQUISITION OR LIQUIDATION OF THE COMPANY AND OTHER CORPORATE EVENTS	  	8
	 5.4.
	  	TAX WITHHOLDING	  	10
	 5.5.
	  	AT-WILL EMPLOYMENT	  	10
	 5.6.
	  	EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS	  	10
	 5.7.
	  	COMPLIANCE WITH LAWS	  	10
	 5.8.
	  	TITLES	  	11
	 5.9.
	  	GOVERNING LAW	  	11

  

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 BLACKHAWK MARKETING SERVICES, INC. 
 2006 RESTRICTED STOCK PLAN 
 FOR ELIGIBLE EMPLOYEES OF SAFEWAY INC.

 Safeway Inc., a Delaware corporation (the “Company”), adopted this Blackhawk Marketing Services, Inc. 2006 Restricted
Stock Plan for Eligible Employees of Safeway Inc. (the “Plan”) for the benefit of its eligible Employees (as defined herein), effective as of February 22, 2006 (the “Effective Date”). The purpose of the Plan is to
provide an additional incentive for Employees (as defined below) to further the growth, development and financial success of Blackhawk (and thereby further the growth, development and financial success of the Company) by personally benefiting
through the ownership of Blackhawk stock. 
 ARTICLE I. 
 DEFINITIONS 
 Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. 
 1.1. Administrator. “Administrator” shall mean the Executive Compensation
Committee, except that, if a Committee is appointed under Section 4.1, the term “Administrator” shall mean the Committee as to those duties, powers and responsibilities specifically conferred upon the Committee. 
 1.2. Award. “Award” shall mean a Restricted Stock award granted under the Plan. 
 1.3. Award Agreement. “Award Agreement” shall mean a written agreement executed by an authorized officer of the Company and the Holder which shall contain such terms and conditions with respect to an
Award as the Administrator shall determine, consistent with the Plan. 
 1.4. Blackhawk. “Blackhawk” shall mean Blackhawk Marketing
Services, Inc., an Arizona corporation. 
 1.5. Board. “Board” shall mean the Board of Directors of the Company. 
 1.6. Code. “Code” shall mean the Internal Revenue Code of 1986, as amended. 
 1.7. Committee. “Committee” shall mean the Executive Compensation Committee or a subcommittee of the Board appointed as provided in Section 4.1. 
 1.8. Common Stock. “Common Stock” shall mean the common stock of Blackhawk, par value $0.001 per share. 
 1.9. Company. “Company” shall mean Safeway Inc., a Delaware corporation. 
  

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 1.10. Employee. “Employee” shall mean any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company, or of any corporation which is a Subsidiary. 
 1.11. Exchange Act. “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended. 
 1.12. Executive Compensation Committee. “Executive Compensation Committee” shall
mean the Executive Compensation Committee of the Board. 
 1.13. Fair Market Value. “Fair Market Value” shall have the meaning assigned to
such term in the Stockholders’ Agreement. 
 1.14. Holder. “Holder” shall mean a person who has been granted an Award. 
 1.15. Plan. “Plan” shall mean the Blackhawk Marketing Services, Inc. 2006 Restricted Stock Plan for Eligible Employees of Safeway Inc. 
 1.16. Restricted Stock. “Restricted Stock” shall mean Common Stock granted pursuant to the Plan. 
 1.17. Securities Act. “Securities Act” shall mean the Securities Act of 1933, as amended. 
 1.18. Subsidiary. “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken
chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 1.19. Stockholders’ Agreement. “Stockholders’ Agreement” shall mean that certain Stockholders’ Agreement dated as of February 24, 2006, by and among Blackhawk, the Company and
certain stockholders of Blackhawk, as amended from time to time. 
 1.20. Termination of Employment. “Termination of Employment” shall mean
the time when the employee-employer relationship between a Holder and the Company or any Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death,
disability or retirement; but excluding (a) terminations where there is a simultaneous reemployment or continuing employment of a Holder by the Company or any Subsidiary, and (b) at the discretion of the Administrator, terminations which
result in a temporary severance of the employee-employer relationship. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of
limitation, all questions of whether a particular leave of absence constitutes a Termination of Employment. 
  

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 ARTICLE II. 
 SHARES SUBJECT TO PLAN 
 2.1. Shares Subject to Plan. The shares of stock subject to Awards shall be shares of
Blackhawk common stock, par value $0.001 per share. The aggregate number of such shares which may be transferred pursuant to Awards under the Plan shall not exceed Two Million Five Hundred Thousand (2,500,000). The shares of Common Stock to be
transferred in connection with an Award shall consist of shares of issued and outstanding Common Stock held by the Company. 
 2.2. Add-back of Certain
Shares. Shares of Common Stock which are delivered by the Holder in payment of the tax withholding with respect to any Award may again be granted hereunder, subject to the limitations of Section 2.1. If any shares of Restricted Stock are
repurchased by the Company pursuant to Section 3.5, such shares may again be granted hereunder, subject to the limitations of Section 2.1. 
 ARTICLE III. 
 AWARD OF RESTRICTED STOCK 
 3.1. Eligibility. Restricted Stock may be granted to any Employee who the Administrator determines should receive such an Award. 
 3.2.
Award of Restricted Stock 
 (a) The Administrator may from time to time, in its absolute discretion: 
 (i) Select from among the Employees (including Employees who have previously received other Awards under the Plan) such of them as in its
opinion should be granted Restricted Stock; and 
 (ii) Determine the purchase price, if any, and other terms and conditions
applicable to such Restricted Stock, consistent with the Plan. 
 (b) The Administrator shall establish the purchase price, if any, and form
of payment for Restricted Stock; provided, however, that such purchase price shall be no less than the par value of the Common Stock to be purchased, unless otherwise permitted by applicable state law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock. 
 3.3. Award Agreement. Each Award shall be evidenced by an Award Agreement. The Award
Agreement evidencing an Award shall contain such terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its discretion. 
 3.4. Restriction. All shares of Restricted Stock (including any shares received by holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of
recapitalization) shall, in the terms of each individual Award Agreement, be 

  

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subject to such restrictions as the Administrator shall provide, which restrictions may include, without limitation, restrictions concerning voting rights
and transferability and restrictions based on duration of employment with the Company or any Subsidiary, Blackhawk performance, Company performance and individual performance; provided, however, that, by action taken after the
Restricted Stock is transferred to a Holder, the Administrator may, on such terms and conditions as it may determine to be appropriate, remove any or all of the restrictions imposed by the terms of the Award Agreement. Restricted Stock may not be
sold or encumbered until all restrictions are terminated or expire. 
 3.5. Repurchase of Restricted Stock. The Administrator may provide in the terms
of each individual Award Agreement that the Company shall have the right to repurchase from the Holder the Restricted Stock then subject to restrictions under the Award Agreement at the time of such Holder’s Termination of Employment, at a
price per share equal to the lesser of (i) the price paid by the Holder for such Restricted Stock or (ii) the then current Fair Market Value of such Restricted Stock, as determined by the Administrator in good faith. The repurchase price
for any such shares of Restricted Stock shall be paid in cash (or cash equivalent). 
 3.6. Stockholders’ Agreement. Except as otherwise provided
by the Administrator, all shares of Restricted Stock shall be subject to the Stockholders’ Agreement. As a condition of acquiring Restricted Stock, the Administrator may require a Holder to execute, deliver and deposit with the Secretary of the
Company, or such other person designated by the Administrator, the Stockholders’ Agreement. 
 3.7. Conditions to Issuance of Stock Certificates.
The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock transferred to a Holder pursuant to an Award prior to fulfillment of all of the following conditions: 
 (a) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax; or 
 (b) Holder’s execution of such documentation (if any) as the Administrator may deem necessary or advisable to evidence Holder’s agreement to be
bound by the terms of the Stockholders’ Agreement with respect to the such shares. 
 (c) The admission of such shares to listing on all
stock exchanges on which such class of stock is then listed (if any); 
 (d) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body which the Administrator shall, in its absolute discretion, deem necessary or
advisable; 
 (e) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator
shall, in its absolute discretion, determine to be necessary or advisable; and 
 (f) The lapse of such reasonable period of time (as may be
established by the 

  

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Administrator from time to time for reasons of administrative convenience) following execution of an Award Agreement and such other documentation as the
Administrator may require consistent with the terms of the Plan (including, without limitation, any investment representation letter required pursuant to Section 3.8). 
 3.8. Investment Intent. As a condition of acquiring Common Stock under the Plan, the Administrator may require a Holder to give written assurances satisfactory to the Company as to (i) the Holder’s
knowledge and experience in financial and business matters, (ii) the Holder’s capability of evaluating, alone or together with a professional advisor employed by the Holder, the merits and risks of acquiring such Common Stock, and
(iii) the Holder’s investment intent (and intent to acquire the Common Stock for the Holder’s own account and not with any present intention of selling or otherwise distributing the Common Stock). In the event the services of a
professional advisor are necessary to provide the foregoing written assurances, the professional advisor shall be unaffiliated with Blackhawk or any of its affiliates or the Company or any of its affiliates, and shall be knowledgeable and
experienced in financial and business matters. The Holder alone shall be responsible for the cost of employing any professional advisor. The requirements of this Section 3.8 shall be inoperative if the shares to be transferred to the Holder
have been registered under a then currently effective registration statement under the Securities Act, or as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances
under the then applicable securities laws. 
 3.9. Escrow. The Secretary of the Company or such other escrow holder as the Administrator may appoint
shall retain physical custody of each certificate representing Restricted Stock until all of the restrictions imposed under the Award Agreement with respect to the shares evidenced by such certificate expire or shall have been removed. 

3.10. Rights as Stockholders. Subject to Section 3.4, upon delivery of the shares of Restricted Stock to the Holder, or to the escrow holder pursuant to
Section 3.9, as applicable, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said shares, subject to the restrictions, if any, in his or her Award Agreement and the
Stockholders’ Agreement, including the right to receive all dividends and other distributions paid or made with respect to the shares; provided, however, that in the discretion of the Administrator, any dividends or other
distributions with respect to the Common Stock shall be subject to the restrictions imposed pursuant to Sections 3.4 and 3.5. 
 3.11. Legend. In
order to enforce the restrictions imposed upon shares of Restricted Stock hereunder, the Administrator shall cause a legend or legends to be placed on certificates representing all shares of Restricted Stock that are still subject to restrictions
under Award Agreements, which legend or legends shall make appropriate reference to the conditions imposed thereby. 
 3.12. Section 83(b)
Election. If a Holder makes an election under Section 83(b) of the Code, or any successor section thereto, to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or
dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a copy of such 

  

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election to the Company immediately after filing such election with the Internal Revenue Service. 
 ARTICLE IV. 
 ADMINISTRATION 
 4.1. Administrator. The Plan shall initially be administered by the Executive Compensation Committee; provided, however, that the Board, in its absolute
discretion, may at any time and from time to time terminate the administrative authority of the Executive Compensation Committee and exercise any and all rights and duties of the Executive Compensation Committee under the Plan. The Executive
Compensation Committee may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. If
administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Executive Compensation Committee, including the power to delegate to a subcommittee any
of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Executive Compensation Committee shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the Executive Compensation Committee. Within the scope of such authority, the Executive Compensation Committee or the Committee may delegate to a committee of one or more
members of the Board the authority to grant Awards under the Plan to eligible Employees. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written notice to the
Board. Vacancies in the Executive Compensation Committee may only be filled by the Board. 
 4.2. Powers of the Administrator. Subject to the
provisions of the Plan and the specific duties delegated to any Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion: 
 (a) to determine the Fair Market Value of the Common Stock for all purposes of the Plan or any Award granted hereunder; 
 (b) to select the Employee to whom Awards may from time to time be granted hereunder; 
 (c) to determine the number of shares of Common Stock to be covered by each Award granted hereunder, subject to the limitations of Section 2.1
above; 
 (d) to approve forms of agreement for use under the Plan; 
 (e) to determine the terms and conditions of any Awards granted hereunder (such terms and conditions include, but are not limited to, the purchase price
to be paid, the time or times when Award may vest (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any 

  

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Award or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its discretion, shall determine); 
 (f) to prescribe, amend and rescind rules and regulations relating to the Plan; 
 (g) to allow Holders to satisfy withholding tax obligations by electing to have the Company withhold shares of Common Stock otherwise subject to an
Award, or to allow the repurchase of shares of Common Stock by the Company, having a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such obligations based on the minimum amount required to be withheld
using the statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The Fair Market Value of the shares of Common Stock to be withheld or
repurchased shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Holders to have shares of Common Stock withheld or repurchased for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; 
 (h) to amend the Plan or any Award granted under the Plan as provided in
Section 5.2; and 
 (i) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan and to exercise such
powers and perform such acts as the Administrator deems necessary or desirable to promote the best interests of the Company which are not in conflict with the provisions of the Plan. 
 4.3. Majority Rule; Unanimous Written Consent. The Administrator shall act by a majority of its members in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument
signed by all members of the Board or Committee, as applicable. 
 4.4. Compensation; Professional Assistance; Good Faith Actions. Members of the
Board or Committee shall receive such compensation, if any, for their services as members as may be determined by the Board. All expenses and liabilities which members of the Board or Committee incur in connection with the administration of the Plan
shall be borne by the Company. The Administrator may employ attorneys, consultants, accountants, appraisers, brokers, or other persons. The Administrator, the Company and the Company’s officers and members of the Board shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee or the Board in good faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Awards, and all members of the Committee and the Board shall be fully
protected by the Company in respect of any such action, determination or interpretation. 
  

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 ARTICLE V. 
 MISCELLANEOUS PROVISIONS 
  

	5.1.	Not Transferable. 

 (a) No Award under the Plan, or
the shares underlying such Award, may be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or the laws of descent and distribution, unless and until the shares underlying such Award have been issued,
and all restrictions applicable to such shares have lapsed. No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or his or her 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. 
 5.2. Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 5.2, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any
time or from time to time by the Executive Compensation Committee or the Board. No amendment, suspension or termination of the Plan shall, without the consent of the Holder alter or impair any rights or obligations under any Award theretofore
granted, unless the Award itself otherwise expressly so provides. No Awards may be granted during any period of suspension or after termination of the Plan, and in no event may any Awards be granted under the Plan after the expiration of ten years
from the date the Plan is adopted by the Executive Compensation Committee. 
 5.3. Changes in Common Stock or Assets of Blackhawk, Acquisition or
Liquidation of the Blackhawk and Other Corporate Events. 
 (a) In the event that the Administrator determines that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of Blackhawk, or exchange of Common Stock or other securities of Blackhawk, issuance of warrants or other rights to purchase Common
Stock or other securities of Blackhawk, or other similar corporate transaction or event, in the Administrator’s discretion, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of 

(i) the number and kind of shares of Common Stock (or other securities or property) with respect to which Awards may be granted
(including, but not limited to, 

  

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adjustments of the limitation in Section 2.1 on the maximum number and kind of shares which may be issued); and 
 (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards. 
 (b) In the event of any transaction or event described in Section 5.3(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations, or accounting principles, the Administrator, in its discretion, and on such terms and conditions as it
deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following
actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan,
to facilitate such transactions or events, or to give effect to such changes in laws, regulations or principles: 
 (i) To
provide for either the purchase of any such Award or shares of Common Stock issued thereunder for an amount of cash equal to the amount that could have been attained upon the realization of the Holder’s rights had such Award been fully vested
or the replacement of such Award with other rights or property selected by the Administrator in its discretion; 
 (ii) To
provide that some or all shares of Restricted Stock may cease to be subject to repurchase under Section 3.5, or such other restrictions as may be imposed under Section 3.4, after such event; 
 (iii) To provide that the Award cannot vest after such event; 
 (iv) To provide that the Company’s repurchase rights may be assigned to the successor or survivor corporation, or a parent or
subsidiary thereof, or otherwise continued in effect; 
 (v) To provide that such Award shall be substituted for by similar
awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; and 
 (vi) To make adjustments in the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards,
or Awards which may be granted in the future. 
 (c) The Administrator may, in its discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company. 
 (d) The existence
of the Plan, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or Blackhawk 

  

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or the stockholders of the Company or Blackhawk to make or authorize any adjustment, recapitalization, reorganization or other change in capital structure or
business of the Company or Blackhawk, any merger or consolidation of the Company or Blackhawk, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company or Blackhawk, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
 5.4. Tax Withholding. The Company shall be
entitled to require payment in cash or deduction from other compensation payable to each Holder of any sums required by federal, state or local tax law to be withheld with respect to the grant, transfer or vesting of any Award or shares of
Restricted Stock subject thereto. The Administrator may in its discretion and in satisfaction of the foregoing requirement allow such Holder to elect to have the Company withhold shares of Common Stock otherwise issuable under such Award (or allow
the return of shares of Common Stock) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of Common Stock which may be withheld with respect to the transfer,
vesting, or payment of any Award (or which may be repurchased from the Holder of such Award within six months after such shares of Common Stock were acquired by the Holder from the Company) in order to satisfy the Holder’s federal, state and
local income tax and payroll tax liabilities with respect to the transfer, vesting, or payment of the Award shall be limited to the number of shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for federal, state and local income tax and payroll tax purposes that are applicable to such supplemental taxable income. 
 5.5. At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of the Company
or any Subsidiary, or as a director of the Company, or shall interfere with or restrict in any way the rights of the Company or any Subsidiary, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Subsidiary. 
 5.6. Effect of Plan Upon Options and Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit
the right of the Company (a) to establish any other forms of incentives or compensation for Employees or other service providers of the Company or any Subsidiary or (b) to grant or assume options or other rights or awards in connection
with any proper corporate purpose including but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any
corporation, partnership, limited liability company, firm or association. 
 5.7. Compliance with Laws. The Plan, the granting and vesting of Awards
under the Plan and the transfer and delivery of shares of Common Stock and the payment of money under the Plan or under Awards granted hereunder are subject to compliance with all applicable federal and 

  

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state laws, rules and regulations and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted hereunder shall be deemed amended to
the extent necessary to conform to such laws, rules and regulations. 
 5.8. Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan. 
 5.9. Governing Law. The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Arizona without regard to conflicts of laws thereof. 
 * * * 
 I hereby certify that the foregoing Plan was duly adopted by the Compensation Committee of the Board of Directors of Safeway Inc. on February 22, 2006.

 Executed on this 24 day of February, 2006 
  

			
	 Safeway Inc.

		
	 By:
	 	 /S/    ROBERT A.
GORDON

		
	 Title:
	 	 Senior Vice President, Secretary and General Counsel



  

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