Safeway (SWY)

ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of shares (the “Shares”) of common stock, par value $0.01 per share, of Safeway Inc., a Delaware corporation (the “Company”).

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SSN:                                                                            

The name, address and taxpayer identification number of the taxpayer’s spouse are (complete if applicable):

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                     shares of common stock, par value $0.01 per share, of the Company.

The Shares may not be transferred and are subject to forfeiture if taxpayer’s employment or service with the Company and its majority-owned subsidiaries terminates for any reason. The forfeiture restriction applicable to the Shares will lapse in a series of              cumulative installments of     % each on                     , 20    ,                     , 20    ,                     , 20     and                     , 20     or, if earlier, upon liquidation or dissolution of the Company or the occurrence of a qualifying change in ownership or control of the Company.

Dated:                     , 20     Taxpayer Signature                                                                          

The undersigned spouse of Taxpayer joins in this election. (Complete if applicable).

Dated:                     , 20     Spouse’s Signature