Safeway (SWY)

Part I – Introduction

This Appendix A describes the method for determining the amount of the offset with respect to the Retirement Restoration Plan of Safeway Inc., which was frozen as of December 31, 2004. This Part I narrative is only a summary of the formula set forth in Part II below. However, the formula in Part II and the terms of the Plan control, and not this Part I narrative.

The Retirement Restoration Plan offset is equal to the amount of the benefit that would have been earned and accrued under the Retirement Plan as of 12/31/04 in the absence of the limitations of Code Sections 401(a)(17) and 415 and in the absence of any limitation on the recognition of compensation deferred under the Safeway Executive Deferred Compensation Plan, less the benefit actually earned and accrued under the Retirement Plan as of 12/31/04. In each case (i.e., in the determination of the hypothetical unlimited and actual limited benefits) the greater of the cash balance benefit and the grandfather benefit is selected.

The method described above is represented by the formulas which follow in Part II of this Appendix A.

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Part I – Introduction

This Appendix A describes the method
for determining the amount of the offset with respect to the Retirement Restoration Plan of Safeway Inc., which was frozen as of December 31, 2004. This Part I narrative is only a summary of the formula set forth in Part II below. However, the
formula in Part II and the terms of the Plan control, and not this Part I narrative.

The Retirement Restoration Plan offset is equal to the amount of the
benefit that would have been earned and accrued under the Retirement Plan as of 12/31/04 in the absence of the limitations of Code Sections 401(a)(17) and 415 and in the absence of any limitation on the recognition of compensation deferred under the
Safeway Executive Deferred Compensation Plan, less the benefit actually earned and accrued under the Retirement Plan as of 12/31/04. In each case (i.e., in the determination of the hypothetical unlimited and actual limited benefits) the greater of
the cash balance benefit and the grandfather benefit is selected.

The method described above is represented by the formulas which follow in Part II of
this Appendix A.

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