DEFERRED COMPENSATION PLAN FOR SAFEWAY
(Amended and Restated June 2, 2004)
1.1 Name and Purpose. The name of this plan is the Deferred Compensation Plan for Safeway Directors (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 was adopted by the Board of Directors on December 21, 1994 and amended and restated effective June 2, 2004.
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 Directors 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 Companys Common Stock as reported in The Wall Street Journal.|
|(d)||Common Stock means the Common Stock, par value $.01 per share, of Safeway Inc.|
|(e)||Company means Safeway Inc.|
|(f)||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.|
|(g)||Director means any individual serving on the Board who is not an employee of the Company or any of its direct or indirect subsidiaries.|
|(h)||Elective Deferral means a Participants elective deferral as described in Section 3.2 below.|
|(i)||Participant means a Director who receives Compensation from the Company in any Plan Year.|
|(j)||Plan Administrator means a committee consisting of one or more senior executives of the Company designated by the Chief Executive Officer of the Company.|
|(k)||Plan Year means the calendar year.|
2.1 Participation in the Plan. Any individual who is a Director as defined in Section 1.2(g) shall participate in the Plan.
3.1 Automatic Deferrals. Payment of fifty percent of a Directors 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.
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 under this Plan may be made after December 31 of the year preceding the Plan Year during which Compensation would otherwise be paid. 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 by the Director 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.
3.3 Special Distribution Election. Each 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 would otherwise have been paid to the Participant; provided, however, that if the Participant ceases to be a Director prior to such specified year, the Participants account will be paid as soon as practicable following the date on which the Participant ceases to be a Director. Compensation deferred pursuant to an Automatic Deferral is payable only upon the Participants termination of service with the Company as a Director.
3.4 Mode of Deferral. Payment of a Participants Compensation deferred pursuant to an Automatic Deferral shall be deferred by means of a stock credit. Payment of a Participants 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 Participants 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 Participants cash credit account shall also be credited with 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 Participants 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 Participants stock credit account shall also be credited with an additional Common Stock equivalent 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 Participants 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.|
3.5 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 Participants accounts shall be made in a single lump sum as soon as practicable following the end of the Plan Year in which the Participant ceases to be a Director.|
|(b)||At the election of the Participant made in writing and delivered to the Plan Administrator at least twelve months prior to the date his or her accounts would otherwise be distributed, distribution of his or her accounts, commencing as soon as practicable following the end of the Plan Year in which the Participant ceases to be a Director, shall be made in any number of annual installments not exceeding ten. Any such election, unless made irrevocable by its terms, may be changed by written notice to the Plan Administrator at least twelve months prior to the date his or accounts otherwise would be distributed.|
|(c)||Distribution of a Participants 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.|
3.6 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 Participants 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 Participants 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 Companys Common Stock receive common shares of the resulting or surviving corporation, there shall be credited to each Participants 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 Participants account is then equivalent. If in such a consolidation or merger, holders of the Companys 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.
3.7 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 3.4, 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 3.4 during the payment period.
3.8 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 Participants 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 Participants will or in the absence of a will, to the administrator of the Participants estate. Any distribution under this Section 3.8 shall be made as soon as practicable following the end of the fiscal quarter in which the Plan Administrator is notified of the Participants death. In this case, a Participants stock credit account shall be converted to cash by multiplying the number of whole and fractional shares of Common Stock to which the Participants 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.
3.9 Withholding Taxes. The Company shall deduct from all distributions under the Plan any taxes required to be withheld by federal, state or local governments.
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.
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 Companys general creditors.
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 martial property settlement agreement that the Administrator it 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.
7.1 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. The Plan Administrator at any time may terminate and in any respect, amend or modify the Plan.
IN WITNESS WHEREOF, the Board has caused this amended and restated Plan to be executed by a duly authorized officer of the Company this 16th day of July 2004.
/s/ Robert A. Gordon
Robert A. Gordon
Senior Vice President & General Counsel
Source: OneCLE Business Contracts.