Document:

Form of Non-Qualified Stock Option Agreement for U.S. Employees

 Exhibit 10(iii).30 
  
 1999 Amended and Restated 
 Equity Participation Plan 
 Of 
 Safeway Inc. 
  
 NON-QUALIFIED STOCK OPTION AGREEMENT 
 (U.S. Employees) 
  
 You have been selected to be a participant in the 1999 Amended and Restated Equity Participation Plan of Safeway Inc., as specified below:

  

			
	 Employee: «name»
	 	SSN: «ssn»
		
	 Date of Grant: «grantdate»
	 	Grant #: «grant»
		
	 Date of Expiration: «expdate»
	 	 
		
	 Number of Options Granted: «shares»
	 	 
		
	 Exercise Price per Share: $«price»
	 	 

  
 IN WITNESS WHEREOF, the parties have
caused the Option Agreement set forth below to be executed as of the Date of Grant. 
  

			
	 SAFEWAY INC.

		
	 By:
	 	  

	
	

	 Employee’s Signature/«name»

	
	

	 Street or P.O. Box

	
	

	 City, State ZIP

 THIS AGREEMENT is made on and as of the Date of Grant set forth above between SAFEWAY INC., a Delaware
corporation (the “Company”) and the Employee named above pursuant to the provisions of the 1999 Amended and Restated Equity Participation Plan of Safeway Inc. (the “Plan”). The parties hereto agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Whenever the following terms are used in this Agreement, they shall have the meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates. Terms not otherwise defined in this Agreement shall have the meaning specified in the Plan. 
  
 Section 1.1 - Option 
  
 “Option” shall mean the option to purchase Common Stock of the
Company granted under this Agreement. 
  
 Section 1.2 - Termination
of Employment 
  
 “Termination of Employment”
shall mean the time when the employee-employer relationship between the Employee and the Company or a 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 terminations where there is a simultaneous reemployment or continuing employment of the Employee by the Company or a Subsidiary, (b) at the discretion of the Committee, terminations which result in a
temporary severance of the employer-employee relationship, and (c) at the discretion of the Committee, terminations which are followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the Employee.
The Committee, in its absolute discretion, shall determine the effect of all other matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted
from a discharge for good cause, and all questions of whether a particular leave of absence constitutes a Termination of Employment. 
  
 Section 1.3 - Change in Control of the Company 
  
 A “Change in Control of the Company” shall be deemed to have occurred, subject to subparagraph (d) hereof, if any of the events (an
“Event”) in subparagraphs (a), (b) or (c) occur during the term of the Agreement: 
  
 (a) Any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than an employee benefit plan of the Company, a
trustee or other fiduciary holding securities under an employee benefit plan of the Company, or an underwriter who acquires such securities for the purpose of resale in an underwritten public offering of such securities, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 25% or more of the Company’s then outstanding voting securities carrying the right to vote in elections of persons to the Board,
regardless of comparative voting power of such voting securities; or 
  
 (b) As a result of a tender offer or exchange offer for the purchase of securities of the Company (other than such an offer by the Company for its own securities), or as a result of a proxy contest, merger, consolidation or sale of assets,
or as a result of any combination of the foregoing, individuals who at the beginning of any two-year period constitute the Board plus new directors (other than a director designated by a person who shall have entered into an agreement with the
Company to effect a transaction described in clauses (a) or (c) of this Subsection) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved (collectively, the “Continuing Board Members”), cease for any reason to constitute a
majority thereof; or 
  
 (c) 
  
 (i) The consummation of a merger or consolidation of the Company with any
other corporation regardless of which entity is the surviving company, other than a merger or consolidation which would result in the voting securities of the Company carrying the right to vote in elections of persons to the Board outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the Company’s then outstanding voting securities carrying the right to vote
in elections of persons to the Board, or such securities of such surviving entity outstanding immediately after such merger or consolidation, or 
  

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 (ii) The holders of securities of the Company entitled to vote thereon approve a plan of complete
liquidation of the Company, or 
  
 (iii) The consummation of an
agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. 
  
 (d) Notwithstanding the definition of a “Change in Control of the Company” as set forth in this Section 1.3, no Event described in subparagraph
(c)(i) shall constitute a Change in Control of the Company if (I) the merger or consolidation would result in the voting securities of the Company carrying the right to vote in elections of persons to the Board outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50%, but less than 80%, of the Company’s then outstanding voting securities carrying the right to vote in
elections of persons to the Board, or such securities of such surviving entity outstanding immediately after such merger or consolidation, and (II), prior to the occurrence of any such Event the Continuing Board Members unanimously determine, by
resolution, that such Event shall not constitute a Change in Control of the Company. 
  
 Section 1.4 - Demotion 
  
 “Demotion” shall mean the demotion of the Employee to a position within the Company which is not then eligible for grants of stock options or to a position that is eligible for stock option grants at a lower level than the level
for which the Employee was eligible on the Date of Grant. Notwithstanding the foregoing, the Chief Executive Officer of the Company may make adjustments, in his discretion, in the foregoing definition in the event of the transfer, illness or
disability of the Employee, the occurrence of a force majeure event (including without limitation acts of God, strikes or labor disturbances) affecting the Employee’s position or other similar circumstances. 
  
 Section 1.5 – Disability 
  
 “Disability” shall have the meaning set forth in Section 22(e)(3)
of the Internal Revenue Code, as amended. 
  
 ARTICLE II

  
 GRANT OF OPTION 
  
 Section 2.1 - Grant of Option 
  
 In consideration of the Employee’s agreement to remain in the employ of
the Company or a Subsidiary and for other good and valuable consideration, on the date hereof the Company irrevocably grants to the Employee the option to purchase any part or all of the number of shares of its Common Stock upon the terms and
conditions set forth in this Agreement. This Option is not intended to constitute an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code, as amended. 
  
 Section 2.2 - Purchase Price 
  
 The purchase price per share of the shares of stock covered by the Option
shall be the price indicated above (which shall be no less than 100% of the Fair Market Value of a share of the Company’s Common Stock on the date of grant), without commission or other charge. 
  
 Section 2.3 - Consideration to Company 
  
 In consideration of the granting of this Option by the Company, the Employee
agrees to render faithful and efficient services to the Company or a Subsidiary, with such duties and responsibilities as the Company shall from time to time prescribe, for a period of at least one (1) year from the date this Option is granted.
Nothing in this Agreement or in the Plan shall confer upon the Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are
hereby expressly reserved, to discharge the Employee at any time for any reason whatsoever, with or without cause. 
  

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 ARTICLE III 
  
 PERIOD OF EXERCISABILITY 
  
 Section 3.1 - Commencement of Exercisability 
  
 (a) Subject to Section 3.2, the Option shall become exercisable in five (5) cumulative installments as follows: 

 

				
	 Relation to date of this Agreement

	  	% of shares subject
to this Option that
may be purchased

	 
	 On and before first anniversary
	  	none	 
	 After the first anniversary
	  	20	%
	 After the second anniversary
	  	20	%
	 After the third anniversary
	  	20	%
	 After the fourth anniversary
	  	20	%
	 After the fifth anniversary
	  	20	%

  
 Section 3.2 - Duration of
Exercisability 
  
 The installments provided for in
Section 3.1 are cumulative. Each such installment that becomes exercisable pursuant to Section 3.l shall remain exercisable until it becomes unexercisable under Section 3.3. No portion of an Option that is unexercisable at Termination of Employment
shall thereafter become exercisable. No portion of an Option that is unexercisable upon a Demotion shall thereafter become exercisable. Notwithstanding the foregoing, in the event of a Demotion to a position that is eligible for stock option grants
at a lower level than the level for which the Employee was eligible on the Date of Grant, the immediately preceding sentence shall apply only to that part (if any) of the unexercisable portion of the Option which exceeds the minimum number of stock
options to which such position is eligible. 
  
 Section 3.3 -
Expiration of Option 
  
 The Option may not be
exercised to any extent by anyone after the first to occur of the following events: 
  
 (a) The expiration of six years from the date the Option was granted; or 
  
 (b) The expiration of three months from the date of the Employee’s Termination of Employment unless such Termination of Employment results from his
or her death, his or her retirement on or after age 55 in accordance with the Company’s retirement policies as then in effect, or his or her Disability; or 
  

(c) The expiration of one year from the date of the Employee’s Termination of Employment by reason of his or her death or Disability or his or her
retirement on or after age 55 in accordance with the Company’s retirement policies as then in effect; or 
  
 (d) The engagement by the Employee in willful misconduct which injures the Company or any of its Subsidiaries; or 
  
 (e) The effective date of either the merger or consolidation of the Company
with or into another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or 80% or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of
the Company, unless the Committee waives this provision in connection with such transaction. At least ten days prior to the effective date of such merger, consolidation, acquisition, liquidation or dissolution the Committee shall give the Employee
notice of such event if the Option has then neither been fully exercised nor become unexercisable under this Section 3.3. 
  

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 Section 3.4 - Acceleration of Exercisability 
  
 Upon the occurrence of a Change in Control of the Company, this Option shall
be exercisable as to all shares covered hereby, notwithstanding that this Option may not yet have become fully exercisable under Section 3.1(a). 
  
 ARTICLE IV 
  
 EXERCISE OF OPTION 
  
 Section 4.1 - Person Eligible to Exercise 
  
 During the lifetime of the Employee, only the Employee may exercise the Option or any portion thereof. After the death of the Employee, any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by his or her personal representative or by any person empowered to do so under the Employee’s will or under the then applicable laws of descent and distribution. 
  
 Section 4.2 - Partial Exercise 
  
 Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3; provided, however, that each partial exercise shall be for not less than 100 shares (or the
minimum installment set forth in Section 3.1, if a smaller number of shares) and shall be for whole shares only. 
  
 Section 4.3 - Manner of Exercise 
  
 The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or his or her office of all of the following prior to
the time when the Option or such portion becomes unexercisable under Section 3.3: 
  
 (a) Notice in writing signed by the Employee or other person then entitled to exercise such Option or portion, stating that such Option or portion is exercised, such notice complying with all applicable rules
established by the Committee; and 
  
 (b) Full payment (in cash
or by check) for the shares with respect to which such Option or portion is thereby exercised; provided, however, that the Committee may, in its discretion: (i) allow a delay in payment of up to thirty (30) days from the date the Option, or portion
thereof, is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common Stock which have been owned by the Employee for at least six months, duly endorsed for transfer to the Company, with a Fair Market Value on the
date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part, through the delivery of property of any kind which constitutes good and valuable consideration; (iv) allow
payment, in whole or in part, through the delivery of a notice that the Employee has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of such sale; or (v) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii), (iii) and (iv). 
  
 (c) On or prior to the date the same is required to be withheld, full payment (in cash or by check) of any amount that must be withheld by the Company for
federal, state and/or local tax purposes; provided, however, that the Committee may, in its discretion, allow for such payment to be in the form of shares of Common Stock in accordance with the terms of the Plan. 
  
 (d) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Committee may, in its absolute discretion, also take whatever
additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer orders to transfer agents and registrars; and 
  
 (e) In the event the Option or portion shall be exercised pursuant to
Section 4.l by any person or persons other than the Employee, appropriate proof of the right of such person or persons to exercise the Option. 
  
 Section 4.4 - Conditions to Issuance of Stock Certificates 
  

The shares of stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously 
  

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 authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be
fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following
conditions: 
  
 (a) The admission of such shares to listing on
all stock exchanges on which such class of stock is then listed; and 
  
 (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or advisable; and 
  
 (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and 
  
 (d) The lapse of such reasonable period of time following the exercise of the
Option as the Committee may from time to time establish for reasons of administrative convenience; and 
  
 (e) Unless a Registration Statement under the Securities Act of 1933 is in effect with respect to the shares to be issued, the receipt of the written
representation of Employee that the shares of Common Stock are being acquired by him for investment and with no present intention of selling or transferring them and that he will not sell or otherwise transfer the shares except in compliance with
all applicable securities laws. 
  
 Section 4.5 - Rights as
Stockholder 
  
 The holder of the Option shall not be,
nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until certificates representing such shares shall have been issued by the Company
to such holder. 
  
 ARTICLE V 
  
 OTHER PROVISIONS 
  
 Section 5.1 - Administration 
  
 The Committee shall have the power to interpret the Plan and this Agreement,
to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith, to interpret or revoke any such rules, and to amend this Agreement provided such amendment does not impair the rights of the Employee
granted hereunder. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement. 
  
 Section 5.2 - Option
Subject to Terms of Plan 
  
 This Option Agreement and
the rights of Employee hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. Any
inconsistency between this Option Agreement and the Plan shall be resolved in favor of the Plan. 
  
 Section 5.3 - Option Not Transferable 
  
 The Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, unless and until the Option has been exercised, or the shares underlying the
Option have been issued. Subject to the preceding sentence, neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Employee 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; provided, however, that this Section 5.3 shall not prevent transfers by will or by the applicable laws of descent
and distribution. 
  
 Section 5.4 - Notices 
  
 Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be given to the Employee shall be addressed to him or her at the address given beneath his signature 
  

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 hereto or the last known address for the Employee contained in the Company’s personnel records. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him or her. Any notice which is required to be given to the Employee shall, if the Employee is then deceased, be given to the
Employee’s personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 
  
 Section 5.5 - Titles 
  
 Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 
  
 Section 5.6 - Construction 
  
 This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware. 
  
 [Signatures on 1st page of
Agreement] 
  

 7Amendment dated May 2, 2004 to the 2002 Equity Incentive Plan

 Exhibit 10(iii).31 
  
 AMENDMENT TO THE 2002 
 EQUITY INCENTIVE PLAN 
 OF 
 SAFEWAY INC. 
  
 Adopted by the Board of Directors on May 2, 2004 
  
 Safeway Inc., a Delaware corporation (the “Company”), adopted The 2002 Equity Incentive Plan of Safeway Inc. (the “Plan”), effective as of July 30, 2002. The Company desires to amend the Plan to prohibit repricing of
equity awards under the Plan without stockholder approval and to prohibit the use of loans by officers to exercise stock options and other equity awards. 
  
 Pursuant to Section 11.2 of the Plan, the Board of Directors of the Company (the “Board”), as the “Administrator” (as defined in the
Plan), hereby adopts this Amendment to the Plan, effective as of May 2, 2004. 
  
 1. Section 10.2 of the Plan is hereby amended to read in its entirety as follows: 
  
 10.2 Duties and Powers of Committee. It shall be the duty of the Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to interpret the Plan and the Award Agreements, and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith, to interpret, amend or
revoke any such rules and to amend any Award Agreement provided that the rights or obligations of the Holder of the Award that is the subject of any such Award Agreement are not affected adversely. Notwithstanding the foregoing, except as provided
in Section 11.3, neither the Committee nor the Board shall, without the approval of the stockholders of the Company, authorize the amendment of any outstanding Award to reduce its exercise price. Furthermore, except as provided in Section 11.3, no
Award shall be canceled and replaced with the grant of an Award having a lesser per share exercise price without the further approval of stockholders of the Company. Any grant or award under the Plan need not be the same with respect to each Holder.
In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b–3 or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the Committee. 
  
 2. Section 11.2 of the Plan is hereby amended in its entirety as follows: 
  
 11.2 Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 11.2, the Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator. However, without approval of the Company’s stockholders, no action of the Administrator may (a) amend the Plan to authorize
the amendment of any outstanding Award to reduce its exercise price (except as provided in Section 11.3) or (b) amend the Plan to permit the cancellation and replacement of any outstanding Award with the grant of an Award having a lesser per share
exercise price (except as provided in Section 11.3). Any amendment to the Plan that requires the approval of the Company’s stockholders will be submitted for the approval of the Company’s stockholders. 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 or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan. 
  
 3. Section 11.5 of the Plan is hereby amended to read in its entirety as
follows: 
  
 11.5 Loans. The Committee may, in
its discretion, extend one or more loans to Employees (other than officers of the Company) in connection with the exercise or receipt of an Award granted or awarded under the Plan, or the issuance of Restricted Stock or Deferred Stock awarded under
the Plan. The terms and conditions of any such loan shall be set by the Committee. Notwithstanding the foregoing, no loan shall be made to an Employee under this Section to the extent such loan shall result in an extension or maintenance of credit,
an arrangement for the extension of credit, or a renewal of an extension of credit in the form of a personal loan that is prohibited by Section 13(k) of the Exchange Act or other applicable law. In the event that the Administrator determines in its
discretion that any loan under this Section is or will become prohibited by Section 13(k) of the Exchange Act or other applicable law, the Administrator may provide that such loan is immediately due and payable in full and may take any other action
in connection with such loan as the Administrator determines in its discretion to be necessary or appropriate for the repayment, cancellation or extinguishment of such loan. 
  
 IN WITNESS WHEREOF, the Board of Directors of Safeway Inc. has hereunder adopted this Amendment to the Plan as indicated by
the signature of the duly authorized officer of Safeway Inc. this 25th day of June, 2004. 
  

			
	 SAFEWAY INC.

		
	 By:
	 	 /s/ Linda C. Sayler

	 Name:
	 	 Linda C. Sayler

	 Title:
	 	 Secretary

  

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