Safeway (SWY)

PAYMENT OF BONUS AWARD

Section 3.1 - Form of Payment.  Each bonus award shall be paid in cash.

Section 3.2 - Timing of Payment.

(a)    Unless otherwise determined by the Committee, each bonus award shall be paid as soon as practicable after the Committee certifies in writing that the Performance Goals specified for such bonus award were in fact satisfied.

(b)    Bonus award payments are not intended to constitute a deferral of compensation subject to Section 409A of the Code and are intended to satisfy the “short-term deferral” exemption under the Treasury Regulations pursuant to Section 409A of the Code. Subject to subsection 3.2(a), and to the extent necessary to cause the bonus awards under the Plan to satisfy the “short-term deferral” exemption under the Treasury Regulations pursuant to Section 409A of the Code, bonus award payments under the Plan shall be made not later than the later of (i) the fifteenth day of the third month following the Participant’s first taxable year in which the right to receive payment of the Bonus Amount is no longer subject to a substantial risk of forfeiture, or (ii) the fifteenth day of the third month following the Company’s first taxable year in which the right to receive payment of the Bonus Amount is no longer subject to a substantial risk of forfeiture.

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Section 3.3 - Taxes.  All amounts payable hereunder shall be subject to applicable federal, state, local and foreign tax withholding.

ARTICLE IV

PAYMENT OF BONUS AWARD

Section 3.1 - Form of Payment.  Each bonus award shall be paid in cash.

Section 3.2 - Timing of Payment.

(a)    Unless otherwise determined by the Committee, each bonus award shall be paid as soon as practicable after the Committee certifies in writing that the Performance Goals specified for such bonus award were in fact satisfied.

(b)    Bonus award payments are not intended to constitute a deferral of compensation subject to Section 409A of the Code and are intended to satisfy the “short-term deferral” exemption under the Treasury Regulations pursuant to Section 409A of the Code. Subject to subsection 3.2(a), and to the extent necessary to cause the bonus awards under the Plan to satisfy the “short-term deferral” exemption under the Treasury Regulations pursuant to Section 409A of the Code, bonus award payments under the Plan shall be made not later than the later of (i) the fifteenth day of the third month following the Participant’s first taxable year in which the right to receive payment of the Bonus Amount is no longer subject to a substantial risk of forfeiture, or (ii) the fifteenth day of the third month following the Company’s first taxable year in which the right to receive payment of the Bonus Amount is no longer subject to a substantial risk of forfeiture.

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Section 3.3 - Taxes.  All amounts payable hereunder shall be subject to applicable federal, state, local and foreign tax withholding.

ARTICLE IV

PAYMENT OF BONUS AWARD

Section 3.1 - Form of Payment. Each Participant’s bonus award may be paid, at the option of the Participant, in cash or in stock, or in any combination of cash and stock. Stock bonuses shall be paid in accordance with the provisions of the 1999 Amended and Restated Equity Participation Plan of Safeway Inc.

Section 3.2 - Timing of Payment. Unless otherwise directed by the Committee, each bonus award shall be paid as soon as practicable after the end of the fiscal year to which such bonus award relates.