Document:

Retirement Restoration Plan II of Safeway Inc.

 Exhibit No. 10(iii).31 
 EXECUTION COPY 
 RETIREMENT RESTORATION PLAN II 
 of 
 SAFEWAY INC. 
 Adopted Effective as of January 1, 2005 

 TABLE OF CONTENTS 
  

			
	 	  	Page
	 ARTICLE 1 DEFINITIONS
	  	1
		
	 ARTICLE 2 ELIGIBILITY FOR AND AMOUNT OF RETIREMENT RELATED BENEFITS
	  	5
		
	 ARTICLE 3 EXECUTIVE DEATH BENEFITS
	  	6
		
	 ARTICLE 4 TIME AND FORM OF PAYMENTS OF RETIREMENT BENEFITS
	  	7
		
	 ARTICLE 5 CLAIMS AND APPEALS PROCEDURES
	  	8
		
	 ARTICLE 6 MISCELLANEOUS
	  	11

  

 i 

 SAFEWAY INC. 
 Retirement Restoration Plan II 
 The Company hereby establishes this Plan, effective as of January 1, 2005. The purpose of the Plan is to enable
the Company to retain certain executives and highly compensated employees by providing a retirement plan for such individuals. 
 This Plan is the successor plan to
the Prior Plan. Effective December 31, 2004, the Prior Plan was frozen and no new accruals, contributions or deferrals shall be made thereunder; provided however, that any vested accruals made under the Prior Plan before January 1, 2005
shall continue to be governed by the terms and conditions of the Prior Plan as in effect on December 31, 2004. 
 Any accruals under the Prior Plan after
December 31, 2004 and any accruals that were unvested on December 31, 2004 are deemed to have been made under this Plan. 
 This Plan is intended to comply
with the requirements of Section 409A. 
 ARTICLE 1 
 DEFINITIONS 
  

	1.01	“Actuarial Equivalent” shall mean the equivalent of a given benefit or a given amount payable in another manner or by other means, determined by or under the direction of the
Committee in accordance with actuarial principles, methods and assumptions which are found to be appropriate by the Committee. Unless otherwise determined by the Committee, such assumptions shall be those assumptions which are in effect from time to
time under the Basic Plan. 

  

	1.02	“Affiliate” means any corporation, partnership or other entity in which the Company has a substantial economic interest and which the Committee designates as an Affiliate.

  

	1.03	“Basic Plan” means the Employee Retirement Plan of Safeway Inc. and its Domestic Subsidiaries, as amended and restated from time to time and, effective June 16, 2000,
also means the Safeway Multiple Employer Retirement Plan, as amended and restated from time to time. 

  

	1.04	“Beneficiary” means any person designated in writing by the Participant to receive benefits under the terms of the Plan. The manner in which a Participant may designate a
Beneficiary shall be determined by the Company in its discretion. If the Participant fails to effectively designate a Beneficiary or the person designated by the Participant is not living at the time a distribution is to be made, then the
Participant’s Beneficiary shall be the Participant’s surviving spouse, if any, or if there is no surviving spouse, the Participant’s surviving children, if any, in equal shares, or if there are no surviving children, the
Participant’s estate. 

  

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	1.05	“Board of Directors” means the Board of Directors of Safeway Inc. 

  

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

 

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

  

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

  

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

  

	1.07	“Code” means the Internal Revenue Code of 1986, as amended. 

  

	1.08	“Committee” means the Compensation Committee appointed by the Board of Directors, and given authority by the Board of Directors to administer this Plan.

  

	1.09	“Company” means Safeway Inc. 

  

	1.10	“Compensation” shall have the meaning set forth in the Basic Plan. 

  

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

  

	1.12	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

  

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	1.13	“Executive Officer” means any Senior Vice President, or executive officer at a level higher than Senior Vice President, of the Company (or an Affiliate of the Company) who is
selected by the Committee to participate in the Plan, provided such employee is on a U.S. payroll. Certain Executive Officers are eligible for special death benefits under Article 3. By written resolution, the Committee may specify other key
employees to be eligible for those benefits or may discontinue coverage for otherwise eligible Executive Officers. 

  

	1.14	“Executive Supplemental Benefit Plan” means the Senior Executive Supplemental Benefit Plan. 

  

	1.15	“Final Average Annual Compensation” means twenty percent of the Participant’s total Compensation for the 60 consecutive complete months when his Compensation was
highest, out of his last 10 years of active participation in which he accrued a benefit under the Basic Plan, prior to the earliest of the Participant’s date of termination, date of total disability, date of death, or date of retirement. In
accordance with established administrative procedures, the number of months of bonus compensation for any type of bonus taken into account for this purpose shall be limited to the number of months of bonus eligibility in the 60-month period.

  

	1.16	“Group Term Life Insurance Plan” means the Safeway Inc. Group Life Insurance Plan. 

  

	1.17	“Identification Date” means each December 31 

  

	1.18	“Key Employee” means a Participant who, on an Identification Date, is: 

  

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

  

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

  

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

 For purposes of this Section 1.18 only and for determining whether a Participant is a Key Employee, the “Company” shall mean the Company and its
affiliates that are treated as a single employer under Section 414(b) or (c) of the Code, and for purposes of determining whether a Participant is a Key Employee, Treasury Regulation § 1.415(c) - 2(d)(3) shall be used to calculate
compensation. If a Participant is identified as a Key Employee on an Identification Date, then such Participant shall be considered a Key Employee for purposes of the Plan during the period beginning on the first April 1 following the
Identification Date and ending on the next March 31. 
  

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	1.19	“Life Insurance Beneficiary” means any person designated in writing by the Participant to receive benefits under the terms of the Group Term Life Insurance Plan. If the
Participant fails to effectively designate a Life Insurance Beneficiary or the person designated by the Participant is not living at the time a distribution is to be made, then the Participant’s Life Insurance Beneficiary shall be the
Participant’s surviving spouse, if any, or if there is no surviving spouse, the Participant’s surviving children, if any, in equal shares, or if there are no surviving children, the Participant’s estate. 

  

	1.20	“Participant” means any employee of the Company, its Subsidiary or its Affiliate who (i) was a Participant in the Executive Supplemental Benefit Plan as of
December 31, 1993, or (ii) is in a select group of management or highly compensated employees, is non-exempt and on the U.S. payroll of the Company, is notified by the Company that he or she is a Participant, and (A), has accrued benefits
under the Plan, or (B) has deferred compensation under the Deferred Compensation Plan of Safeway Inc. in excess of 200% of non-deferred compensation. Participant shall also include any former employee who is receiving benefits under this Plan.
Certain employees who might otherwise be eligible to participate in this Plan shall not accrue or receive benefits set forth in Article 2, Article 3 or both Articles of this Plan as determined by the Committee, from time to time, in its sole
discretion. The Committee shall also have the authority to exclude current Participants from the Plan in its sole discretion. 

  

	1.21	“Plan” means this Safeway Inc., Retirement Restoration Plan II, effective January 1, 2005. 

  

	1.22	“Post-Retirement Life Insurance Plan” means the Retiree Death Benefit Life Insurance. 

  

	1.23	“Prior Plan” means the Retirement Restoration Plan, as amended and restated effective as of December 31, 2002. 

  

	1.24	“Retire” means a Separation from Service after the Participant attains age 55. 

  

	1.25	“Section 409A” means Section 409A of the Code and regulations promulgated thereunder. 

  

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

  

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	1.27	“Subsidiary” means any corporation in which the Company holds stock, directly or indirectly, possessing more than 50% of the total combined voting power of all classes of
stock of such corporation. 

 ARTICLE 2 
 ELIGIBILITY FOR AND AMOUNT OF 
 RETIREMENT RELATED BENEFITS 
  

	2.01	Eligibility 

 Each Participant is eligible to receive a retirement benefit
under this Plan if he is eligible to receive a benefit under the terms of the Basic Plan and if he Retires. 
  

	2.02	Amount of Benefit 

 Subject to paragraph 2.03 below, the Participant’s
retirement benefit under this Plan shall be the Actuarial Equivalent of the Participant’s benefits under the Basic Plan with respect to the period of the Participant’s participation in the Basic Plan, subject to the adjustments described
in subparagraphs (a), (b) and (c) below, reduced by the Actuarial Equivalent of the benefits to which the Participant is entitled under the Basic Plan, and further reduced by the Actuarial Equivalent of any benefits as to which a
Participant earned a vested interest under the Prior Plan prior to January 1, 2005: 
  

	 	(a)	Compensation shall be determined without reference to the limitations of Section 401(a)(17) of the Code and shall include any amounts not otherwise includable as a result of a
Participant’s participation in the Safeway Executive Deferred Compensation Plan and the Safeway Executive Deferred Compensation Plan II.; 

  

	 	(b)	the limitation on benefits of Section 415 of the Code shall not apply, and 

  

	 	(c)	a Participant’s number of Years of Participation which are taken into account in determining the Participant’s benefits under the Basic Plan shall be limited to 35 years.

  

	2.03	Determining Amount of Benefit 

 It is intended that in determining the benefits
payable under the Plan and the Prior Plan, the Plan shall be interpreted in a manner consistent with Section 409A so as to maximize the benefits payable under the Prior Plan. 
  

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 ARTICLE 3 
 EXECUTIVE DEATH BENEFITS 
  

	3.01	Eligibility for Preretirement Death Benefit 

 Pursuant to this Article 3, a
death benefit shall be payable to the Life Insurance Beneficiary of any Executive Officer who is a Participant and who dies subsequent to December 31, 2004 while employed as an Executive Officer by the Company, a Subsidiary, or an Affiliate,
regardless of whether death occurs while performing services. 
  

	3.02	Amount of Preretirement Death Benefit 

 The death benefit payable to a Life
Insurance Beneficiary on account of the preretirement death of an Executive Officer after December 31, 2004, who is eligible to receive such benefit under Section 3.01, shall equal 400% of the Executive Officer’s annual rate of base
salary in effect at time of his death not to exceed $4 million, minus the amount payable on account of the Executive Officer’s death to his Life Insurance Beneficiary that the Company provides under the Group Term Life Insurance Plan.

  

	3.03	Eligibility for Postretirement Death Benefit 

 A postretirement death benefit
shall be payable to the Life Insurance Beneficiary of a Participant who Retires from the Company, a Subsidiary, or an Affiliate as an Executive Officer after December 31, 2004. 
  

	3.04	Amount of Postretirement Death Benefit 

 The death benefit payable to a Life
Insurance Beneficiary on account of the postretirement death of an Executive Officer, who is eligible to receive such benefit under Section 3.03, shall equal the following: 
  

	 	(a)	Death prior to age 70: if the eligible Executive Officer dies prior to age 70, 100% of his Final Average Annual Compensation at retirement, to a maximum of $1 million.

  

	 	(b)	Death on or after attainment of age 70: If the eligible Executive Officer dies upon or after attaining age 70, 25% of the amount in (a) above. 

  

	3.05	Postretirement Death Benefit for Certain Former Executive Supplemental Benefit Plan Members 

 Participants who were members of the Executive Supplemental Benefit Plan and who are not eligible for a postretirement death benefit under paragraph 3.03 shall be eligible for the Post-Retirement Life Insurance Plan
(irrespective of the 15-year service requirement). If such a Participant’s death benefit under the Post-Retirement 

  

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Life Insurance Plan is less than the amount that would be payable under paragraph 3.04(b) if the Participant was eligible to receive such postretirement death benefit,
and if the Participant had both attained age 50 and participated in the Executive Supplemental Benefit Plan for at least five years as of December 31, 1993, then the difference between such amounts, less the death benefit paid under
Section 3.05 of the Prior Plan, shall be paid under this Section 3.05 to the Participant’s Life Insurance Beneficiary. 
  

	3.06	Death Benefit Payments 

  

	 	(a)	Any death benefits paid under this Article 3 shall be paid to the Participant’s Life Insurance Beneficiary in a lump sum as soon as practicable submission of an authentic death
certificate, but not later than 90 days after the date of death. 

 ARTICLE 4 
 TIME AND FORM OF PAYMENTS OF RETIREMENT BENEFITS 
  

	4.01	Time of Payment of Retirement Benefits 

 Retirement benefits to which a
Participant or Beneficiary is determined to be entitled under Article 2 of this Plan shall be paid, or begin to be paid, within 90 days of the date that Participant Retires. 
 Effective for Key Employees who Retire after January 1, 2005, all benefits provided under this Plan shall commence within 90 days of the seventh month
following the date the Key Employee Retires; provided, however, Section 3.06 shall govern timing of payments of benefits under Article 3. 
  

	4.02	Form of Payment of Retirement Benefits 

  

	 	(a)	Benefits under this Plan shall be paid in the form of a straight life annuity of monthly payments over the lifetime of the Participant, with payments ceasing on the first day of the month
following the month in which the Participant dies. 

  

	 	(b)	If the Participant is married at the time the benefits become payable, then unless the Participant has elected otherwise (as described below), the Participant’s benefits shall be paid in
the actuarially reduced form of a joint and 50% survivor annuity (a “Joint and Survivor Annuity”) payable to the Participant and the Participant’s spouse in the form of monthly payments over the lifetime of the Participant and the
Participant’s spouse with payments ceasing on the first day of the month following the month in which the Participant or the Participant’s spouse dies, whichever is later. 

  

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	 	(c)	As of January 1, 2005, a married Participant may elect, in writing, not to receive the Joint and Survivor Annuity, and instead to receive the Participant’s benefits in the form of a
straight life annuity for the life of the Participant or to receive the Participant’s benefits in the actuarially reduced form of a joint and 100% survivor annuity payable to the Participant and the Participant’s spouse in the form of
monthly payments over the lifetime of the Participant and the Participant’s spouse with payments ceasing on the first day of the month following the month in which the Participant or the Participant’s spouse dies, whichever is later. Such
election shall become effective 12 months after such election is filed with the Committee and must be filed at least twelve months before the Participant Retires. 

  

	4.03	Payment of Retirement Benefits upon Death 

 If a Participant who is entitled to
receive retirement benefits under this Plan dies before payment of such benefits begin, the Participant’s surviving spouse shall receive the Actuarial Equivalent of the Participant’s benefits in the form of a straight life annuity, payable
during the life of the surviving spouse with payments beginning within 90 days of the month after the Participant’s date of death. 
 If a
Participant who is entitled to receive retirement benefits under this Plan dies before such benefits begin and there is no surviving spouse, his Beneficiary that is not his surviving spouse shall be entitled to receive the Actuarial Equivalent value
of the Participant’s benefits in annual installment payments over 10 years (the “Installment Option”). The Installment Option shall be payable as soon as administratively practicable, but no later than 90 days, following the
Participant’s date of death. 
 ARTICLE 5 
 CLAIMS AND APPEALS PROCEDURES 
 5.01 Informal Resolution of Questions. 
 Any Participant or Beneficiary who has questions or concerns about his or her benefits under the Plan is encouraged to communicate with the Company’s Retirement Benefits Department. If this discussion does not give
the Participant or Beneficiary satisfactory results, a formal claim for benefits may be made in accordance with the procedures of this Article 5. 
 5.02 Formal
Benefits Claim. 
 A Participant or Beneficiary may make a written request for review of any matter concerning his or her benefits under this Plan. The
claim must be addressed to the Senior Vice President, Human Resources, 5918 Stoneridge Mall Road, 

  

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Pleasanton, CA 94588-3492. The Senior Vice President, Human Resources or his or her delegate, or if neither is available then the Company’s Benefit Plans
Committee (“Senior Vice President”) shall decide the action to be taken with respect to any such request and may require additional information if necessary to process the request. The Senior Vice President shall review the request and
shall issue his or her decision, in writing, no later than 90 days after the date the request is received, unless the circumstances require an extension of time. If such an extension is required, written notice of the extension shall be furnished to
the person making the request within the initial 90-day period, and the notice shall state the circumstances requiring the extension and the date by which the Senior Vice President expects to reach a decision on the request. In no event shall the
extension exceed a period of 90 days from the end of the initial period. 
 5.03 Notice of Denied Request. 
 If the Senior Vice President denies a request in whole or in part, he or she shall provide the person making the request with written notice of the denial within
the period specified in Section 5.02. The notice shall set forth the specific reason(s) for the denial, reference(s) to the specific Plan provisions upon which the denial is based, a description of any additional material or information
necessary to perfect the request, an explanation of why such information is required, and an explanation of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to
bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review. 
 5.04 Appeal to Senior Vice President 
  

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

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

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

  

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

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

	5.05	Exhaustion of Remedies. 

 No legal or equitable action for benefits under the
Plan shall be brought unless and until the claimant has submitted a written claim for benefits in accordance with Section 5.02 has been notified that the claim is denied in accordance with Section 5.03, has filed a written request for a
review of the claim in accordance with Section 5.04, and has been notified in writing that the Senior Vice President has affirmed the denial of the claim in accordance with Section 5.04. 
  

	5.06	Senior Vice President as Claimant. 

  

	 	(a)	In the event the Senior Vice President makes a claim pursuant to this Article 5, the Chief Executive Officer shall have the responsibilities assigned to the Senior Vice President under this
Article 5. 

  

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 ARTICLE 6 
 MISCELLANEOUS 
  

	6.01	Amendment and Plan Termination 

 The Board may at any time amend this Plan;
provided, however, that such amendment shall be prospective only and shall not adversely affect the rights of any Participant or Beneficiary to any benefit previously earned under this Plan. 
 The Board, in its discretion, may terminate the Plan in accordance with Treasury Regulation § 1.409(A) – 3(j)(4)(ix). 
  

	6.02	Not An Employment Agreement 

 Nothing contained herein will confer upon any
Participant the right to be retained in the service of the Company, nor will it interfere with the right of the Company to deal with Participants without regard to the existence of this Plan or to terminate a Participant’s employment at any
time with or without cause. 
  

	6.03	No Advance Funding 

 This Plan is unfunded, and the Company will make Plan
benefit payments solely on a current disbursement basis. Nothing in the establishment of this Plan is to be construed as requiring or authorizing the Company to create or maintain any separate fund, account or reserve to provide for the payment of
the Company’s liability to a Participant under the Plan. 
 All payments hereunder shall be made from the general assets of the Company and no
Participant shall have any right hereunder to any specific asset of the Company. 
  

	6.04	Assignment of Benefits 

 A Participant may not, either voluntarily or
involuntarily, assign, anticipate, alienate, commute, pledge, discount, borrow against or encumber any benefits to which he is or may become entitled to under the Plan, nor may the same be subject to attachment or garnishment by any creditor of a
Participant. 
 Notwithstanding the immediately preceding paragraph, if a court of competent jurisdiction determines pursuant to a judgment, order or
approval of a marital settlement agreement that all or any portion of the benefits payable hereunder to a Participant constitute community property of the Participant and his or her spouse or former spouse (hereafter, the “Alternate
Payee”) or property which is otherwise subject to division by the Participant and the Alternate Payee, a division of such property shall not constitute a violation of the first subparagraph of this paragraph 6.05, and any portion of such
property may be paid or set aside 

  

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for payment to the Alternate Payee. The preceding sentence of this subparagraph, however, shall not create any additional rights and privileges for the Alternate Payee
(or the Participant) not already provided under the Plan; in this regard, the Committee shall have the right to refuse to recognize any judgment, order or approval of a martial settlement agreement that provides for any additional rights and
privileges not already provided under the Plan, including without limitation, with respect to form and time of payment. 
  

	6.05	Interpretation 

 This Plan is intended to qualify for exemption from
Parts 2, 3 and 4 of Title I of ERISA, as a plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA, and shall be so interpreted. Subject to that restriction, the Committee shall have the sole discretion to interpret this Plan and to adopt rules and interpretations for the application and implementation of this Plan. The decisions and
interpretations by the Committee shall be final and binding on all Participants. 
  

	6.06	Gender 

 The masculine gender, where appearing in the Plan will be deemed to
include the feminine gender, and the singular may include the plural, unless the context clearly indicates the contrary. 
  

	6.07	Governing Law 

 This Plan shall be construed, administered and governed in all
respects under and by the laws of the State of California, except to the extent preempted by federal law. 
 IN WITNESS WHEREOF, Safeway Inc. has
adopted this amended and restated Plan, effective as of January 1, 2005. 
  

			
	SAFEWAY INC.
		
	By	 	/s/ Michael J. Boylan
		 	

  

 12Deferred Compensation Plan for Safeway Non-Employee Directors II

 Exhibit No. 10(iii).32 
 DEFERRED COMPENSATION PLAN FOR SAFEWAY 
 NON-EMPLOYEE DIRECTORS II 
 (Amended and Restated Effective January 1, 2008) 
 ARTICLE I 
 1.1 Introduction. 
  

	 	(a)	The name of this plan is the “Deferred Compensation Plan for Safeway Non-Employee Directors II” (the “Plan”). Its purpose is to provide non-employee Directors of the
Company with increased flexibility in timing the receipt of board service fees and to assist the Company in attracting and retaining qualified individuals to serve as Directors. The Plan is effective as of January 1, 2005.

  

	 	(b)	The Plan is the successor plan to the Deferred Compensation Plan for Safeway Non-Employee Directors (the “Prior Plan”). Effective December 31, 2004, the Prior Plan was frozen
and no new deferrals will be made under it; provided, however, that any deferrals made under the Prior Plan before January 1, 2005 will continue to be governed by the terms and conditions of the Prior Plan as in effect on December 31, 2004
or on the date of any later amendment, provided that such amendment is not a material modification of the Prior Plan under Section 409A of the Code and regulations promulgated thereunder. 

  

	 	(c)	Any deferrals made under the Prior Plan after December 31, 2004 are deemed to have been made under the Plan and all such deferrals are governed by the terms and conditions of the Plan as
it may be amended from time to time. 

  

	 	(d)	The Plan is intended to comply with the requirements of Section 409A of the Code. 

 1.2 Definitions. Whenever used in this Plan, the following terms shall have the meaning set forth below: 
  

	 	(a)	“Automatic Deferral” means the automatic deferral of fifty percent of a Director’s Compensation as described in Section 3.1 below. 

  

	 	(b)	“Board” means the Board of Directors of the Company. 

  

	 	(c)	“Closing Price” means the closing price of the Company’s Common Stock as reported in The Wall Street Journal. 

  

	 	(d)	“Code” means the Internal Revenue Code of 1986, as amended. 

	 	(e)	“Common Stock” means the Common Stock, par value $.01 per share, of Safeway Inc. 

  

	 	(f)	“Company” means Safeway Inc. 

  

	 	(g)	“Compensation” means all remuneration paid to a Director for services as a Director other than reimbursement for expenses and shall include, but not be limited to, monthly fees for
service and fees for attendance at meetings. 

  

	 	(h)	“Director” means any individual serving on the Board who is not an employee of the Company or any of its direct or indirect subsidiaries. 

  

	 	(i)	“Elective Deferral” means a Participant’s elective deferral as described in Section 3.2 below. 

  

	 	(j)	“Participant” means a Director who receives Compensation from the Company in any Plan Year. 

  

	 	(k)	“Plan Administrator” means a committee consisting of one or more senior executives of the Company designated by the Chief Executive Officer of the Company. 

 

	 	(l)	“Plan” means the Deferred Compensation Plan for Safeway Non-Employee Directors II, effective as of January 1, 2005 

  

	 	(m)	“Plan Year” means the calendar year. 

  

	 	(n)	“Prior Plan” means Deferred Compensation Plan for Safeway Non-Employee Directors. 

  

	 	(o)	“Separation from Service” means termination of a Director’s service as a non-employee member of the Board consistent with Code Section 409A and the regulations promulgated
thereunder. 

 ARTICLE II 
 2.1
Participation in the Plan. Any individual who is a Director as defined in Section 1.2(h) shall participate in the Plan. 
 ARTICLE III

 3.1 Automatic Deferrals. 
  

	 	(a)	Prior to the 2008 Plan Year, payment of fifty percent of a Director’s Compensation for each Plan Year shall automatically be deferred under the Plan, beginning with the 2005 Plan Year
for Directors serving on the Board as of June 3, 2004 and with the 2004 Plan Year for Directors who are first elected or appointed to the Board after June 3, 2004. 

  

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	 	(b)	On or after the 2008 Plan Year, for each Plan Year, $20,000 of a Director’s Compensation, apportioned quarterly, and fifty percent of the balance of such compensation shall automatically
be deferred under the Plan. 

 3.2 Election to Defer. Each Director may elect annually to have payment of all or any portion of
his or her Compensation, in excess of the amount subject to the Automatic Deferral, for that Plan Year deferred. No election to defer Compensation under this Plan may be made after December 31 of the year preceding the Plan Year during which
Compensation is earned. An election to defer any Compensation shall be in writing and shall be delivered to the Plan Administrator. An election to defer shall be irrevocable after the beginning of the Plan Year for which the election is applicable
and shall be effective for the Plan Year or Plan Years immediately following the date on which it was filed as set forth in the written election to defer. In the absence of a written election to defer filed by a Director with the Plan Administrator,
his or her Compensation remaining after the Automatic Deferral will be paid directly to the Director. Notwithstanding the foregoing, a Director who is first appointed or elected to the Board in a Plan Year may elect to defer under the Plan all or a
portion of his or her Compensation, in excess of the amount subject to the Automatic Deferral, with respect to such Compensation earned on and after the first day of the month next following the date such Director completes and returns the written
election to defer to the Company, provided that such election is made within 30 days after the date the Director is first elected or appointed to the Board; such election, if made, shall be irrevocable on the 31st day after such election or
appointment or at such earlier date as provided in the form. 
 3.3 Special Distribution Election. 
  

	 	(a)	At the time the Participant elects to defer Compensation in accordance with Section 3.2, the Participant may elect that Compensation deferred pursuant to an Elective Deferral will be
paid in January of a specified year in the future that is at least twelve months from the last day of the Plan Year in which the deferred Compensation is earned; provided, however, that if the Participant Separates from Service prior to such
specified year, the Participant’s account will be paid as soon as practicable but within 60 days following the end of the Plan Year in which the Participant Separates from Service. 

  

	 	(b)	Compensation deferred pursuant to an Automatic Deferral is payable only upon the Participant’s Separation from Service with the Company as a Director. 

  

	 	(c)	A Participant who makes a special distribution election pursuant to Section 3.3.(a) above may elect to amend such an election to further defer the payment, provided that such election is
made in writing and delivered to the Plan Administrator at least twelve months in advance of the originally scheduled special distribution date and the new distribution date elected by the Participant is at least five years from the originally
scheduled special distribution date. 

  

 3 

 3.4 Transition Distribution Election. Notwithstanding any other provision of the Plan to the contrary, a
Participant may elect an in-service account distribution or change the time of an in-service account distribution as elected in accordance with Section 3.3 above, provided that the election is made at least twelve months prior to the originally
scheduled distribution date and the election is made not later than December 31, 2006. An election made pursuant to this Section 3.4 shall be treated as an initial special distribution election and shall be subject to any administrative
rules imposed by the Plan Administrator including rules intended to comply with Section 409A of the Code and Notice 2005-1, A-19. No election under this Section 3.4 shall (i) change the payment date of any distribution otherwise
scheduled to be paid in 2006 or cause a payment to be paid in 2006, or (ii) be permitted after December 31, 2006. 
 3.5 Mode of
Deferral. Payment of a Participant’s Compensation deferred pursuant to an Automatic Deferral shall be deferred by means of a stock credit. Payment of a Participant’s Compensation deferred pursuant to an Elective Deferral may be
deferred by means of a cash credit, a stock credit or a combination of the two as the Participant shall elect in writing at the same time as the election provided for in Section 3.2. If a Participant fails to make an election as to the mode of
deferral of his or her Elective Deferral, he or she shall be deemed to have elected deferral by means of a cash credit. Cash credits and stock credits shall be recorded in accounts established in Participants’ names on the books of the Company.

  

	 	(a)	Cash Credits. If the Elective Deferral is deferred wholly or partly by means of a cash credit, the Participant’s cash credit account shall be credited, as of the last day of the
calendar quarter, with the dollar amount of Compensation deferred during the quarter by means of a cash credit. As of the last day of each calendar quarter, the Participant’s cash credit account shall also be credited with an interest
equivalent in an amount determined by applying to the balance in the account as of the first day of the quarter (less any distributions during the quarter) an interest rate for such quarter which, when annualized, shall be the prime rate of Bankers
Trust Company or such other rate as the Plan Administrator may designate, as of the first business day of the quarter. Interest shall be calculated on the actual number of days in the quarter based upon a 360-day year. 

  

	 	(b)	Stock Credits. The Participant’s stock credit account shall be credited, as of the last day of the calendar quarter with a Common Stock equivalent equal to the number of shares of
Common Stock (including fractions of a share) that could have been purchased at the average of the Closing Price of Common Stock on each business day during the last month of the calendar quarter with the amount of the Compensation deferred during
the quarter by means of a stock credit. As of the date any dividend is paid to holders of Common Stock, the Participant’s stock credit account shall also be credited with additional Common Stock equivalents equal to the number of shares of
Common Stock (including fractions of a share) that could have been purchased at the Closing Price of Common Stock on such date with the dividend paid on the number of shares of Common Stock to which the Participant’s stock credit account is
then equivalent. In case of dividends paid in property, the dividend shall be deemed to be the fair market value of the property at the time of distribution of the dividend, as determined by the Plan Administrator. 

  

 4 

 3.6 Distribution of Credits. 
  

	 	(a)	If a Participant has elected payment in a specified year under Section 3.3, distribution of his or her accounts will only be made in a single lump sum payment. Otherwise, unless a
Participant has elected to receive installment payments as provided below or if the Participant fails to make any election with respect to distribution of his or her accounts, payment of a Participant’s accounts shall be made in a single lump
sum as soon as practicable but within 60 days following the end of the Plan Year in which the Participant Separates from Service. 

  

	 	(b)	At the election of the Participant made in writing and delivered to the Plan Administrator at the same time the Participant elects to defer Compensation in accordance with Section 3.2,
distribution of his or her accounts, commencing as soon as practicable but within 60 days following the end of the Plan Year in which the Participant Separates from Service, shall be made in the number of annual installments elected by the Director
not exceeding ten. Any such election is irrevocable; provided, however, that with respect to amount deferred in 2005 and 2006, a Participant may make a transition election in accordance with Section 3.4. 

  

	 	(c)	Distribution of a Participant’s cash credit and stock credit accounts shall be made in cash. The amount of the distribution for stock credit accounts shall be determined by multiplying
the number of shares of Common Stock attributable to the distribution by the average of the Closing Price of Common Stock on each business day in the month of December immediately prior to the Plan Year in which the installment is to be paid.

 3.7 Adjustment. If at any time the number of outstanding shares of Common Stock shall be increased as the result of any stock
dividend, subdivision or reclassification of shares, the number of shares of Common Stock to which each Participant’s stock credit account is equivalent shall be increased in the same proportion as the outstanding number of shares of Common
Stock is increased, or if the number of outstanding shares of Common Stock shall at any time be decreased as the result of any combination or reclassification of shares, the number of shares of Common Stock to which each Participant’s stock
credit account is equivalent shall be decreased in the same proportion as the outstanding number of shares of Common Stock is decreased. In the event the Company shall at any time be consolidated with or merged into any other corporation and holders
of the Company’s Common Stock receive common shares of the resulting or surviving corporation, there shall be credited to each Participant’s stock credit account, in place of the shares then credited thereto, a stock equivalent determined
by multiplying the number of common shares of stock given in exchange for a share of Common Stock upon such consolidation or merger, by the number of shares of Common Stock to which the Participant’s account is then equivalent. If in such a
consolidation or merger, holders of the Company’s Common Stock shall receive any consideration other than common shares of the resulting or surviving corporation, the Plan Administrator, in its sole discretion, shall determine the appropriate
change in Participants’ stock credit accounts. 
  

 5 

 3.8 Installment Amount. In the event a Participant has elected to receive distribution of his or her
accounts in more than one installment, the amount of each installment shall be determined by multiplying the current balance (denominated in cash units for the portion elected to be deferred as cash credits and denominated in stock units for the
portion deferred or elected to be deferred in stock credits) in the accounts as determined under Section 3.5, by a fraction, the numerator of which is one, and the denominator of which is the number of installments yet to be paid. With respect
to cash credits, interest shall continue to be credited in accordance with Section 3.5 during the payment period. For purposes of the Plan, installment payments shall be treated as a single distribution under Section 409A of the Code.

 3.9 Distribution upon Death. In the event of the death of a Participant, whether before or after ceasing to serve as a Director, any cash
credit account and stock credit account to which he or she was entitled, shall be converted to cash and distributed in a single lump sum to such person or persons or the survivors thereof, including corporations, unincorporated associations or
trusts, as the Participant may have designated. All such designations shall be made in writing signed by the Participant and delivered to the Plan Administrator. A Participant may from time to time revoke or change any such designation by written
notice to the Plan Administrator. If there is no unrevoked designation on file with the Plan Administrator at the time of the Participant’s death, or if the person or persons designated therein shall have all predeceased the Participant or
otherwise ceased to exist, such distributions shall be made in accordance with the Participant’s will or in the absence of a will, to the administrator of the Participant’s estate. Any distribution under this Section 3.9 shall be made
as soon as practicable following the end of the fiscal quarter in which the Plan Administrator is notified of the Participant’s death but not later than twelve months following the date of the Participant’s death. In this case, a
Participant’s stock credit account shall be converted to cash by multiplying the number of whole and fractional shares of Common Stock to which the Participant’s stock credit account is equivalent by the average of the Closing Price of
Common Stock on each business day during the last month of the calendar quarter prior to the date of death. 
 3.10 Prohibition on Acceleration.
Notwithstanding any other provision of the Plan to the contrary, no distribution shall be made from the Plan that would constitute an impermissible acceleration of payment as defined in Section 409A(a)(3) of the Code and the regulations
promulgated thereunder. 
  

 6 

 3.11 Withholding Taxes. The Company shall deduct from all distributions under the Plan any taxes required to
be withheld by federal, state or local governments. 
 ARTICLE IV 
 4.1 Plan Administrator. The Plan Administrator shall have full power and authority to administer the Plan including the power to promulgate forms to be used with regard to the Plan, the power to promulgate rules of Plan
administration, the power to settle any disputes as to rights or benefits arising from the Plan, and the power to make such decisions or take such actions as the Plan Administrator, in its sole discretion, deems necessary or advisable to aid in the
proper maintenance of the Plan. 
 ARTICLE V 
 5.1 Funding. No promise hereunder shall be secured by any specific assets of the Company, nor shall any assets of the Company be designated as attributable or allocated to the satisfaction of such promises. In addition, amounts
deferred pursuant to the terms of the Plan and income attributable to such amounts shall remain (until distributed in accordance with the terms of the Plan) solely the property of the Company, subject to the claims of the Company’s general
creditors. 
 ARTICLE VI 
 6.1
Non-alienation of Benefits. No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge; and any attempt to do so shall be void. No such benefit shall, prior
to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, engagements, or torts of the Participant. 
 6.2 Domestic Relations Orders. If a court of competent jurisdiction determines pursuant to a judgment, order or approval of a marital property settlement agreement that all or any portion of the benefits payable under the Plan to a
Participant constitute community property of the Participant and his or her spouse or former spouse (hereafter, the “Alternate Payee”) or property which is otherwise subject to division by the Participant and the Alternate Payee, a
division of such property shall not constitute a violation of Section 6.1, and any portion of such property may be paid or set aside for payment to the Alternate Payee. The preceding sentence of this Section 6.2, however, shall not create
any additional rights and privileges for the Alternate Payee (or the Participant) not already provided under the Plan; in this regard, the Administrator shall have the right to refuse to recognize any judgment, order or approval of a marital
property settlement agreement that the Administrator in its sole discretion determines provides for any additional rights and privileges not provided under the Plan, including without limitation provisions relating to form and time of payment.

  

 7 

 ARTICLE VII 
 7.1 Delegation of Administrative Duties. Administrative duties imposed by this Plan may be delegated by the Plan Administrator or the individual charged with such duties. 
 7.2 Governing Law. This Plan shall be governed by the laws of the State of Delaware. 
 7.3 Amendment, Modification and Termination of the Plan. 
  

	 	(a)	The Plan Administrator may amend or modify the Plan at any time and in any respect. 

  

	 	(b)	The Board may terminate the Plan at any time. In the event of termination of the Plan, any deferred amounts may be distributed within the period beginning twelve months after the date the
Plan was terminated and ending twenty-four months after the date the Plan was terminated, or pursuant to Article III, if earlier. If the Plan is terminated and deferred amounts are distributed, the Company shall terminate all account balance
non-qualified deferred compensation plans with respect to all participants and shall not adopt a new account balance non-qualified deferred compensation plan for at least three years after the date the Plan was terminated. 

 

	 	(c)	The Board may terminate the Plan upon a dissolution of the Company that is taxed under Code section 331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. section 503(b)(1(A),
provided that the deferred amounts are distributed and included in the gross income of the Participants by the latest of (i) the calendar year in which the Plan terminates or (ii) the first calendar year in which payment of the deferred
amounts is administratively practicable. 

 IN WITNESS WHEREOF, the Board has caused this amended and restated Plan to be executed by a
duly authorized officer of the Company this 18th day of December 2007. 
  

			
	SAFEWAY INC.
		
	By:	 	/s/ Robert A. Gordon
		
	Its:	 	Senior Vice President

  

 8

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