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SWY » Topics » Director Independence

This excerpt taken from the SWY DEF 14A filed Mar 27, 2009.

Director Independence

 

As part of the Guidelines, the Board approved Director Independence Standards to assist in determining each director’s “independence.” Our Director Independence Standards are in addition to, and go beyond, the “independent director” standards established by the NYSE. Our Director Independence Standards are as follows:

 

  (a) A director will not be deemed independent if he or she has any of the following relationships:

 

(i) the director is, or has been within the preceding eight years, employed by Safeway;

 

(ii) the director has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service by the director as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iii) the director holds more than 5% of the equity of an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iv) the director is employed or self-employed (other than as a director) by an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(v) the director has a personal services contract(s) with Safeway, which results in payments of more than $100,000 during the current or preceding calendar year;

 

(vi) the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway, other than for former service as an interim Chairman or Chief Executive Officer or other executive officer;

 

(vii) an immediate family member1 of the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway for serving as an executive officer of Safeway;

 

(viii) an immediate family member of the director was employed by Safeway as an executive officer within the preceding eight years;

 

(ix) (A) the director or an immediate family member is a current partner of a firm that is Safeway’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Safeway’s audit within that time;

 

1 “Immediate family member” means spouse, parents, children, siblings, mothers-and fathers-in-law, sons-and daughters-in-law, brothers-and sisters-in-law and anyone (other than employees) sharing a person’s home.

 

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(x) a present Safeway executive officer is or was within the past three years on the board of directors of a company which employed the Safeway director or an immediate family member of the director as an executive officer at the same time;

 

(xi) a Safeway director is a current employee, director, partner and/or holder of a greater than 5% equity interest, or an immediate family member is an executive officer, of another company which, during any of the last three fiscal years, received payments from Safeway, or made payments to Safeway, or was indebted to Safeway, or to which Safeway was indebted, and such payments were more than the greater of $1,000,000 or 1% of the other entity’s consolidated annual gross revenues, or the total amount of either company’s indebtedness to the other is greater than $1,000,000 or 1% of the total consolidated assets of such company; or

 

(xii) a Safeway director serves as an officer, director or trustee of a charitable organization, and

Safeway’s discretionary charitable contributions to the organization, in any of the three preceding fiscal years, were greater than the lesser of $500,000 or 1% of that organization’s total annual charitable receipts.

 

  (b) For relationships covered by the guidelines in subsection (a) above, compensation received by a director as a director of Safeway (including director and committee fees) and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) shall not be considered in determining independence. Further, the fact that a director of Safeway also serves as a director of one or more of Safeway’s subsidiaries shall not be considered in determining independence, provided that such director is otherwise independent with regard to such subsidiary or subsidiaries in accordance with the guidelines in subsection (a) above and other applicable rules and regulations.

 

  (c) For relationships not covered by the guidelines in subsection (a) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsection (a) above. We will specifically explain in our annual proxy statement the basis for any board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of materiality set forth in subsection (a) above.

 

  (d) References to Safeway in the described standards include any parent or subsidiary in a consolidated group with Safeway.

 

  (e) References to the director in subsections (ii), (iii), (iv), (v) and (xii) of subsection (a) include immediate family members of the director.

 

The Board has affirmatively determined that each of the non-employee directors standing for election at the Annual Meeting, Janet E. Grove, Mohan Gyani, Paul Hazen, Frank C. Herringer, Robert I. MacDonnell, Kenneth W. Oder, Rebecca A. Stirn, William Y. Tauscher and Raymond G. Viault, has no material relationship with Safeway and is independent under Safeway’s Director Independence Standards and the “independent director” standards of the NYSE. In its determination of independence, the Board evaluated the facts and circumstances relating to the following transactions:

 

In 1998, we made a loan to Mr. Tauscher in connection with his purchase of shares of our Common Stock pursuant to the mandatory stock ownership requirement of the 1999 Amended and Restated Equity Participation Plan of Safeway Inc. (the “1999 Equity Plan”) then in effect. The principal amount of the loan was $133,070, and the loan accrued interest at a rate of 5.75% per annum. Mr. Tauscher paid off the entire principal amount of this loan, plus accrued interest totaling $98,012.65, on March 24, 2008. In light of the relative insignificant amount of such loan in comparison to the individual net worth of Mr. Tauscher, and the fact that the loan was entered into on arms-length terms at an interest rate commensurate with those prevailing at the time, the Board concluded that

 

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this relationship was immaterial and did not impair the independence of Mr. Tauscher. This loan was granted prior to the implementation of the Sarbanes-Oxley Act of 2002, and was thus expressly exempted from the prohibitions of Section 402(a) of the Sarbanes-Oxley Act.

 

Mr. Gyani is a member of the board of directors of Union BanCal Corporation, which operates through its banking subsidiary, Union Bank of California (of which Mr. Gyani is also a board member). We did business with Union Bank of California in fiscal years 2006, 2007 and 2008. Mr. Gyani is not an employee of either Union BanCal Corporation or Union Bank of California, nor does Mr. Gyani receive any compensation from Union BanCal Corporation or Union Bank of California other than compensation as a director of each entity. The Board reviewed the payments made to, and received from, Union Bank of California during fiscal years 2006, 2007 and 2008 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

Mr. Viault is a member of the board of directors of Cadbury, PLC and Newell Rubbermaid Inc., entities with which we did business in fiscal years 2006, 2007 and 2008. Mr. Viault is not an employee of either Cadbury or Newell Rubbermaid, nor does Mr. Viault receive any compensation from Cadbury or Newell Rubbermaid other than compensation as a director of each entity. The Board reviewed the payments made to, and received from, each of Cadbury and Newell Rubbermaid during fiscal years 2006, 2007 and 2008 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

During 2008, Mr. Herringer’s spouse was a member of the board of directors of Wachovia Corporation, an entity with which we did business in fiscal years 2006, 2007 and 2008. Mrs. Herringer was not an employee of Wachovia Corporation, nor did Mrs. Herringer receive any compensation from Wachovia Corporation other than compensation as a director of such entity. The Board reviewed the payments made to, and received from, Wachovia Corporation during fiscal years 2006, 2007 and 2008 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE. Effective as of December 31, 2008, Wachovia Corporation became part of Wells Fargo & Company. Mrs. Herringer is no longer a director of either Wachovia Corporation or Wells Fargo & Company.

 

This excerpt taken from the SWY DEF 14A filed Apr 2, 2008.

Director Independence

 

As part of the Guidelines, the Board approved Director Independence Standards to assist in determining each director’s “independence.” Our Director Independence Standards are in addition to, and go beyond, the “independent director” standards established by the NYSE. Our Director Independence Standards are as follows:

 

  (a) A director will not be deemed independent if he or she has any of the following relationships:

 

(i) the director is, or has been within the preceding eight years, employed by Safeway;

 

(ii) the director has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service by the director as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iii) the director holds more than 5% of the equity of an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iv) the director is employed or self-employed (other than as a director) by an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(v) the director has a personal services contract(s) with Safeway, which results in payments of more than $100,000 during the current or preceding calendar year;

 

(vi) the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway, other than for former service as an interim Chairman or Chief Executive Officer or other executive officer;

 

(vii) an immediate family member1 of the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway for serving as an executive officer of Safeway;

 

(viii) an immediate family member of the director was employed by Safeway as an executive officer within the preceding eight years;

 

(ix) (A) the director or an immediate family member is a current partner of a firm that is Safeway’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Safeway’s audit within that time;

 

 

 

1

“Immediate family member” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person’s home.

 

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(x) a present Safeway executive officer is or was within the past three years on the board of directors of a company which employed the Safeway director or an immediate family member of the director as an executive officer at the same time;

 

(xi) a Safeway director is a current employee, director, partner and/or holder of a greater than 5% equity interest, or an immediate family member is an executive officer, of another company which, during any of the last three fiscal years, received payments from Safeway, or made payments to Safeway, or was indebted to Safeway, or to which Safeway was indebted, and such payments were more than the greater of $1,000,000 or 1% of the other entity’s consolidated annual gross revenues, or the total amount of either company’s indebtedness to the other is greater than $1,000,000 or 1% of the total consolidated assets of such company; or

 

(xii) a Safeway director serves as an officer, director or trustee of a charitable organization, and Safeway’s discretionary charitable contributions to the organization, in any of the three preceding fiscal years, were greater than the lesser of $500,000 or 1% of that organization’s total annual charitable receipts.

 

  (b) For relationships covered by the guidelines in subsection (a) above, compensation received by a director as a director of Safeway (including director and committee fees) and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) shall not be considered in determining independence. Further, the fact that a director of Safeway also serves as a director of one or more of Safeway’s subsidiaries shall not be considered in determining independence, provided that such director is otherwise independent with regard to such subsidiary or subsidiaries in accordance with the guidelines in subsection (a) above and other applicable rules and regulations.

 

  (c) For relationships not covered by the guidelines in subsection (a) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsection (a) above. We will specifically explain in our annual proxy statement the basis for any board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of materiality set forth in subsection (a) above.

 

  (d) References to Safeway in the described standards include any parent or subsidiary in a consolidated group with Safeway.

 

  (e) References to the director in subsections (ii), (iii), (iv), (v) and (xii) of subsection (a) include immediate family members of the director.

 

The Board has affirmatively determined that each of Janet E. Grove, Mohan Gyani, Paul Hazen, Frank C. Herringer, Robert I. MacDonnell, Douglas J. Mackenzie, Kenneth W. Oder, Rebecca A. Stirn, William Y. Tauscher and Raymond G. Viault has no material relationship with Safeway. The Board has also affirmatively determined that each of Ms. Grove and Ms. Stirn and Messrs. Hazen, Herringer, Gyani, MacDonnell, Mackenzie, Tauscher and Viault is independent under Safeway’s Director Independence Standards and the “independent director” standards of the NYSE. While Mr. Oder is independent under the “independent director” standards of the NYSE, because Mr. Oder served as our Executive Vice President of Labor Relations, Human Resources, Legal and Public Affairs from 1993 until September 2000, Mr. Oder is not independent under Safeway’s Director Independence Standards solely because Safeway’s standards require that a director, to be independent, must not have been an employee within the last eight years. In September 2008, more than eight years will have elapsed since Mr. Oder last served as a Safeway employee. In its determination of independence, the Board also evaluated the facts and circumstances relating to the following transactions:

 

In May 1998, we made a loan to Mr. Tauscher in connection with his purchase of shares of our Common Stock pursuant to the mandatory stock ownership requirement of the 1999 Amended and Restated Equity Participation Plan of Safeway Inc. (the “1999 Equity Plan”) then in effect. The principal amount of the loan was

 

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$133,070, and the loan accrued interest at a rate of 5.75% per annum. Mr. Tauscher paid off the entire principal amount of this loan, plus accrued interest totaling $98,012.65, on March 24, 2008. In light of the relative insignificant amount of such loan in comparison to the individual net worth of Mr. Tauscher, and the fact that the loan was entered into on arms-length terms at an interest rate commensurate with those prevailing at the time, the Board concluded that this relationship was immaterial and did not impair the independence of Mr. Tauscher. This loan was granted prior to the implementation of the Sarbanes-Oxley Act of 2002, and was thus expressly exempted from the prohibitions of Section 402(a) of the Sarbanes-Oxley Act.

 

Mr. Gyani is a member of the board of directors of Union BanCal Corporation, which operates through its banking subsidiary, Union Bank of California (of which Mr. Gyani is also a board member). We did business with Union Bank of California in fiscal years 2005, 2006 and 2007. Mr. Gyani is not an employee of either Union BanCal Corporation or Union Bank of California, nor does Mr. Gyani receive any compensation from Union BanCal Corporation or Union Bank of California other than compensation as a director of each entity. The Board reviewed the payments made to, and received from, Union Bank of California during fiscal years 2005, 2006 and 2007 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

Mr. Viault is a member of the board of directors of Cadbury Schweppes, PLC and Newell Rubbermaid Inc., entities with which we did business in fiscal years 2005, 2006 and 2007. Mr. Viault is not an employee of either Cadbury Schweppes or Newell Rubbermaid, nor does Mr. Viault receive any compensation from Cadbury Schweppes or Newell Rubbermaid other than compensation as a director of each entity. The Board reviewed the payments made to, and received from, each of Cadbury Schweppes and Newell Rubbermaid during fiscal years 2005, 2006 and 2007 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

Mr. Mackenzie owns one-half of a partnership that owns one-third of Bear Valley Alpine Ski Company, an entity that paid commissions in 2007 to Blackhawk Network, Inc., one of our subsidiaries, in connection with the sale of Bear Valley gift cards by Blackhawk Network. The Board determined that the commissions paid to Blackhawk Network in connection with these gift cards were immaterial in amount pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

Mr. Herringer’s spouse is a member of the board of directors of Wachovia Corporation, an entity with which we did business in fiscal years 2005, 2006 and 2007. Mrs. Herringer is not an employee of Wachovia Corporation, nor does Mrs. Herringer receive any compensation from Wachovia Corporation other than compensation as a director of such entity. The Board reviewed the payments made to, and received from, Wachovia Corporation during fiscal years 2005, 2006 and 2007 and determined that such amounts were immaterial pursuant to our Director Independence Standards and the “independent director” standards of the NYSE.

 

This excerpt taken from the SWY DEF 14A filed Apr 4, 2007.

Director Independence

 

As part of the Guidelines, the Board approved Director Independence Standards to assist in determining each director’s “independence.” Safeway’s Director Independence Standards are in addition to and go beyond the “independent director” standards established by the NYSE. Safeway’s Director Independence Standards are as follows:

 

  (a) A director will not be deemed independent if he or she has any of the following relationships:

 

(i) the director is, or has been within the preceding eight years, employed by Safeway;

 

(ii) the director has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service by the director as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iii) the director holds more than 5% of the equity of an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(iv) the director is employed or self-employed (other than as a director) by an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service as an advisor, consultant or legal counsel to Safeway or to an executive officer of Safeway;

 

(v) the director has a personal services contract(s) with Safeway, which results in payments of more than $100,000 during the current or preceding calendar year;

 

(vi) the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway, other than for former service as an interim Chairman or Chief Executive Officer or other executive officer;

 

(vii) an immediate family member1 of the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway for serving as an executive officer of Safeway;

 

(viii) an immediate family member of the director was employed by Safeway as an executive officer within the preceding eight years;

 

(ix) (A) the director or an immediate family member is a current partner of a firm that is Safeway’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the

 

1

“Immediate family member” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person’s home.

 

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firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Safeway’s audit within that time;

 

(x) a present Safeway executive officer is or was within the past three years on the board of directors of a company which employed the Safeway director or an immediate family member of the director as an executive officer at the same time;

 

(xi) a Safeway director is a current employee, director, partner and/or holder of a greater than 5% equity interest, or an immediate family member is an executive officer, of another company which, during any of the last three fiscal years, received payments from Safeway, or made payments to Safeway, or was indebted to Safeway, or to which Safeway was indebted, and such payments were more than the greater of $1,000,000 or 1% of the other entity’s consolidated annual gross revenues, or the total amount of either company’s indebtedness to the other is greater than $1,000,000 or 1% of the total consolidated assets of such company; or

 

(xii) a Safeway director serves as an officer, director or trustee of a charitable organization, and Safeway’s discretionary charitable contributions to the organization, in any of the three preceding fiscal years, were greater than the lesser of $500,000 or 1% of that organization’s total annual charitable receipts.

 

  (b) For relationships covered by the guidelines in subsection (a) above, compensation received by a director as a director of Safeway (including director and committee fees) and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) shall not be considered in determining independence. Further, the fact that a director of Safeway also serves as a director of one or more of Safeway’s subsidiaries shall not be considered in determining independence, provided that such director is otherwise independent with regard to such subsidiary or subsidiaries in accordance with the guidelines in subsection (a) above and other applicable rules and regulations.

 

  (c) For relationships not covered by the guidelines in subsection (a) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsection (a) above. The Company will specifically explain in its annual proxy statement the basis for any board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of materiality set forth in subsection (a) above.

 

  (d) References to Safeway in the described standards include any parent or subsidiary in a consolidated group with Safeway.

 

  (e) References to the director in subsections (ii), (iii), (iv), (v) and (xii) of subsection (a) include immediate family members of the director.

 

The Board has affirmatively determined that each of Ms. Grove, Ms. Stirn, and Messrs. Hazen, Gyani, MacDonnell, Mackenzie, Tauscher and Viault has no material relationship with Safeway and is independent under Safeway’s Director Independence Standards and the “independent director” standards of the NYSE. In its determination of independence, the Board evaluated the facts and circumstances relating to the following transactions:

 

(a) In May 1998, the Company made a loan in the amount of $133,070, which accrues interest at a rate of 5.75% per annum, to Mr. Tauscher in connection with his purchase of shares of Safeway Common Stock pursuant to the mandatory stock ownership requirement of the 1999 Amended and Restated Equity Participation Plan of Safeway Inc. (the “1999 Equity Plan”) then in effect. As of December 30, 2006, the principal amount of the loan, plus accrued interest totaling $82,695, remained outstanding. In light of the relative insignificant

 

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amount of such loan in comparison to the individual net worth of Mr. Tauscher, and the fact that the loan was entered into on arms-length terms at an interest rate commensurate with those prevailing at the time, the Board has concluded that this relationship is immaterial and does not impair the independence of Mr. Tauscher. This loan was granted prior to the implementation of the Sarbanes-Oxley Act of 2002, and it has not been modified or renewed. Thus, the loan is expressly exempted from the prohibitions of Section 402(a) of the Sarbanes-Oxley Act.

 

(b) Mr. Gyani is a member of the board of directors of Union BanCal Corporation, which operates through its banking subsidiary, Union Bank of California (of which Mr. Gyani is also a board member). Safeway did business with Union Bank of California in fiscal years 2004, 2005 and 2006. Mr. Gyani is not an employee of either such entity, nor does Mr. Gyani receive any compensation from Union BanCal Corporation or Union Bank of California other than compensation as a director of each of such entities. The Board reviewed the payments made to, and received from, Union Bank of California during fiscal years 2004, 2005 and 2006 and determined that such amounts were immaterial pursuant to its Director Independence Standards and the “independent director” standards of the NYSE.

 

(c) Mr. Viault is a member of the board of directors of Cadbury Schweppes, PLC and Newell Rubbermaid Inc., entities with which Safeway did business in fiscal years 2004, 2005 and 2006. Mr. Viault is not an employee of either such entity, nor does Mr. Viault receive any compensation from Cadbury Schweppes or Newell Rubbermaid other than compensation as a director of each of such entities. The Board reviewed the payments made to, and received from, each of Cadbury Schweppes and Newell Rubbermaid during fiscal years 2004, 2005 and 2006 and determined that such amounts were immaterial pursuant to its Director Independence Standards and the “independent director” standards of the NYSE.

 

(d) Mr. Mackenzie owns one-half of a partnership that owns one-third of Bear Valley Alpine Ski Company, an entity that paid less than $50 in 2006 to Blackhawk Network, Inc., a subsidiary of the Company. The Board determined that such amounts were immaterial pursuant to its Director Independence Standards and the “independent director” standards of the NYSE.

 

This excerpt taken from the SWY DEF 14A filed Apr 12, 2006.

Director Independence

 

As part of the Company’s Corporate Governance Guidelines, the Board approved Director Independence Standards to assist in determining each director’s “independence.” Safeway’s standards are in addition to and go beyond the “independent director” standards established by the New York Stock Exchange (“NYSE”). Safeway’s standards are as follows:

 

  (a) A director will not be deemed independent if he or she has any of the following relationships:

 

(i)  the director is, or has been within the preceding eight years, employed by Safeway;

 

(ii)  the director has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service by the director as an advisor, consultant, or legal counsel to Safeway or to an executive officer of Safeway;

 

(iii)  the director holds more than 5% of the equity of an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service as an advisor, consultant, or legal counsel to Safeway or to an executive officer of Safeway;

 

(iv)  the director is employed or self-employed (other than as a director) by an entity that has received, during the current calendar year or any of the three immediately preceding calendar years, remuneration of more than $100,000 in any such calendar year for service as an advisor, consultant, or legal counsel to Safeway or to an executive officer of Safeway;

 

(v)  the director has a personal services contract(s) with Safeway, which results in payments of more than $100,000 during the current or preceding calendar year;

 

(vi)  the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway, other than for former service as an interim Chairman or CEO or other executive officer;

 

(vii)  an immediate family member1 of the director has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from Safeway for serving as an executive officer of Safeway;

 

(viii)  an immediate family member of the director was employed by Safeway as an executive officer within the preceding eight years;

 

(ix)  (A) the director or an immediate family member is a current partner of a firm that is Safeway’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has

 

1 “Immediate family member” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person’s home.

 

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an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Safeway’s audit within that time;

 

(x)  a present Safeway executive officer is or was within the past three years on the board of directors of a company which employed the Safeway director or an immediate family member of the director as an executive officer at the same time;

 

(xi)  a Safeway director is a current employee, director, partner and/or holder of a greater than 5% equity interest, or an immediate family member is an executive officer, of another company which, during any of the last three fiscal years, received payments from Safeway, or made payments to Safeway, or was indebted to Safeway, or to which Safeway was indebted, and such payments were more than the greater of $1,000,000 or one percent (1%) of the other entity’s consolidated annual gross revenues, or the total amount of either company’s indebtedness to the other is greater than $1,000,000 or one percent (1%) of the total consolidated assets of such company; or

 

(xii)  a Safeway director serves as an officer, director or trustee of a charitable organization, and Safeway’s discretionary charitable contributions to the organization, in any of the three preceding fiscal years, were greater than the lesser of $500,000 or one percent (1%) of that organization’s total annual charitable receipts.

 

  (b) For relationships covered by the guidelines in subsection (a) above, compensation received by a director as a director of Safeway (including director and committee fees) and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) shall not be considered in determining independence.

 

  (c) For relationships not covered by the guidelines in subsection (a) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsection (a) above. The Company will specifically explain in its annual proxy statement the basis for any board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of materiality set forth in subsection (a) above.

 

  (d) References to Safeway in these standards include any parent or subsidiary in a consolidated group with Safeway.

 

  (e) References to the director in subsections (ii), (iii), (iv), (v) and (xi) of subsection (a) include immediate family members of the director.

 

The Board has affirmatively determined that each of Ms. Grove, Ms. Stirn, and Messrs. Hazen, Gyani, MacDonnell, Mackenzie, Tauscher and Viault has no material relationship with Safeway and is independent under Safeway’s Director Independence Standards and the NYSE director independence standards. In its determination of independence, the Board evaluated the facts and circumstances relating to an outstanding Company loan to Mr. Tauscher. The loan was made to Mr. Tauscher in connection with his purchase of shares of Safeway Common Stock pursuant to the mandatory stock ownership requirement of the 1999 Amended and Restated Equity Participation Plan then in effect. In light of the relative insignificant amount of such loan in comparison to the individual net worth of Mr. Tauscher, and the fact that his loan was entered into on arms-length terms with interest rates commensurate with those prevailing at the time, the Board has concluded that this relationship is immaterial and does not impair the independence of Mr. Tauscher. This loan was granted prior to the implementation of the Sarbanes-Oxley Act of 2002, and it has not been modified or renewed. Thus, the loan is expressly exempted from the prohibitions of Section 402(a) of that Act.

 

5

This excerpt taken from the SWY DEF 14A filed Apr 12, 2005.

Director Independence

 

As part of the Guidelines, the Board approved Director Independence Standards by which to measure each director’s “independence” in addition to the “independent director” requirements under the New York Stock Exchange (“NYSE”) rules. The Company’s Board approved the following guidelines that go beyond those required by the NYSE to assist it in determining director independence:

 

  (a) A director will not be deemed independent if, within the preceding five years, (i) the director was employed by Safeway; (ii) an immediate family member1 of the director was employed by Safeway as an officer; (iii) the director was employed by or affiliated with Safeway’s independent auditor; (iv) an immediate family member of the director was employed by Safeway’s independent auditor as a partner, principal or manager; or (v) a Safeway executive officer was on the Executive Compensation Committee of the board of directors of a company which employed the Safeway director, or which employed an immediate family member of the director as an officer;

 

  (b) The following commercial or charitable relationships will not be considered to be material relationships that would impair a director’s independence: (i) if a Safeway director is an executive officer or director, partner and/or holder of a greater than 10% equity interest of another company that does business with Safeway and the annual sales to, or purchases from, Safeway are less than one percent (1%) of the annual gross revenues of the company he or she serves as an executive officer or director, partner and/or holder of a greater than 10% equity interest; (ii) if a Safeway director is an executive officer or director, partner and/or holder of a greater than 10% equity interest of another company which is indebted to Safeway, or to which Safeway is indebted, and the total amount of either company’s indebtedness to the other is less than one percent (1%) of the total consolidated assets of the company he or she serves as an executive officer or director, partner and/or holder of a greater than 10% equity interest; and (iii) if a Safeway director serves as an officer, director or trustee of a charitable organization, and Safeway’s discretionary charitable contributions to the organization are less than one percent (1%) of that organization’s total annual charitable receipts;

 

  (c) For relationships not covered by the guidelines in subsection (b) above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth in subsections (a) and (b) above. For example, if a director is the CEO of a company that purchases products and services from Safeway that are more than one percent (1%) of that company’s annual gross revenues, the independent directors could determine, after considering all of the relevant facts and circumstances, whether such a relationship was material or immaterial, and whether the director would therefore be considered independent under the proposed NYSE rules. The Company shall explain in its annual proxy statement the basis for any board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of immateriality set forth in subsection (b) above.

 

1“Immediate family member” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person’s home.

 

4

  (d) References to Safeway in these guidelines include any parent or subsidiary in a consolidated group with the Company.

 

  (e) References to the director in paragraph (b) of these guidelines include immediate family members of the director.

 

Based on the above standards, the Board has affirmatively determined that each of Ms. Grove, Ms. Stirn, and Messrs. Hazen, Gyani, MacDonnell, Mackenzie, Tauscher and Viault has no material relationship with Safeway and is independent within the meaning of Safeway’s Director Independence Standards and the NYSE director independence standards. In its determination of independence, the Board evaluated the facts and circumstances relating to the outstanding Company loan to Mr. Tauscher. The loan was made to Mr. Tauscher in connection with his purchase of shares of Company Common Stock pursuant to the mandatory stock ownership requirement of the 1999 Amended and Restated Equity Participation Plan then in effect. In light of the relative insignificant amount of such loan in comparison to the individual net worth of Mr. Tauscher, and the fact that his loan was entered into on arms length terms with interest rates commensurate with those prevailing at the time, the Board has concluded that this relationship is immaterial and does not impair the independence of Mr. Tauscher. This loan was granted prior to the implementation of the Sarbanes-Oxley Act of 2002 and, thus, is expressly exempted from the prohibitions of Section 402(a) of that Act. See “Certain Relationships and Transactions.”

 

EXCERPTS ON THIS PAGE:

DEF 14A
Mar 27, 2009
DEF 14A
Apr 2, 2008
DEF 14A
Apr 4, 2007
DEF 14A
Apr 12, 2006
DEF 14A
Apr 12, 2005

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