Safeway Inc. Contracts
Sample Business Contracts
Capital Performance Bonus Plan for Executive Officers - Safeway Inc.
Bonus Forms
THE CAPITAL PERFORMANCE BONUS PLAN
FOR EXECUTIVE OFFICERS OF SAFEWAY INC.
Safeway Inc., a Delaware corporation (the "Company"), hereby
adopts The Capital Performance Bonus Plan for Executive Officers of Safeway
Inc. (the "Plan"). The objectives of the Plan are to motivate and reward
executives to produce results that increase shareholder value and to encourage
individual and team behavior that helps the Company achieve both short and
long-term corporate objectives.
ARTICLE I
DEFINITIONS
Section 1.1 - Base Compensation. "Base Compensation" shall mean
the Participant's regular weekly base salary rate, excluding moving expenses,
bonus pay and other payments which are not considered part of regular weekly
salary rate, multiplied by the number of weeks the Participant is eligible,
including up to six weeks of Paid Leave of Absence. Any changes in the
Participant's regular weekly base salary rate effected during the fiscal year
shall be taken into account, on a proportionate basis, in computing any bonus
award for the fiscal year.
Section 1.2 - Eligible Project. "Eligible Project" shall mean
either a First Year Eligible Project or a Third Year Eligible Project. "First
Year Eligible Project" shall mean a new store or remodel project which (a) has
been completed during the current fiscal year or the immediately preceding
fiscal year (unless otherwise determined by the Committee) and (b) with respect
to which an audit has been completed in the current fiscal year. "Third Year
Eligible Project" shall mean a new store or remodel project with respect to
which an audit has been completed during the second fiscal year following the
fiscal year during which such project was audited as a First Year Eligible
Project.
Section 1.3 - Paid Leave of Absence. "Paid Leave of Absence"
shall mean a period of time during which a Participant performs no duties due
to an illness, incapacity (including disability), layoff, jury duty, military
duty or a leave of absence for which the Participant is so paid or so entitled
to payment by the Company, whether direct or indirect, but excluding vacation
time.
Section 1.4 - Participant. "Participant" shall mean any of the
Chief Executive Officer ("CEO"), the Chief Financial Officer, the Senior Vice
President - Corporate Retail Operations, the Senior Vice President and Director
of Marketing, the
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Senior Vice President - Supply Operations and the Senior Vice President - Real
Estate ("SVP-Real Estate").
Section 1.5 - Performance Goal. "Performance Goal" shall mean one or
more levels of targeted return on invested capital for each Eligible Project
for each fiscal year that correspond to a bonus award with respect to any
Participant expressed as a percentage (which need not be identical for each
Participant) of Base Compensation, as determined by the Committee as provided
in Section 4.2.
ARTICLE II
BONUS AWARDS
Section 2.1 - CEO. For each fiscal year, the Section 162(m)
Committee of the Board (the "Committee") shall establish Performance Goals for
each Eligible Project that apply to the determination of the bonus award for
the CEO. Achievement of specified levels above the Performance Goals will
result in an award to the CEO not to exceed 30% of the CEO's Base Compensation,
up to a maximum of $375,000, for all Eligible Projects in the aggregate for any
fiscal year, paid in accordance with Article III. Prior to the payment of a
bonus award the Committee must certify in writing the extent to which the
Performance Goals have been achieved for each Eligible Project for the fiscal
year to which such bonus award relates.
Section 2.2 - Other Executive Officers. Each Participant (other
than the CEO) is eligible for a bonus award in any fiscal year equal to a fixed
percentage of Base Compensation based on the Performance Goals established
under Section 2.1. Achievement of specified levels above the Performance Goals
described under Section 2.1 will result in an award to each such Executive
Officer that ranges from 15% up to a maximum of 30% of such Executive Officer's
Base Compensation, up to a maximum of $300,000, for all Eligible Projects in
the aggregate for any fiscal year, paid in accordance with Article III. At the
CEO's discretion, however, the CEO may reduce the amount payable to any such
Executive Officer. Prior to the payment of a bonus award, the Committee must
certify in writing the extent to which the Performance Goals have been achieved
for each Eligible Project for the fiscal year to which such bonus award
relates.
ARTICLE III
PAYMENT OF BONUS AWARD
Section 3.1 - Form of Payment. Each bonus award shall be paid in
cash.
Section 3.2 - Timing of Payment. Unless otherwise determined 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.
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Section 3.3 - Taxes. All amounts payable hereunder shall be
subject to applicable federal, state and local tax withholding.
ARTICLE IV
SECTION 162(m)
Section 4.1 - Qualified Performance Based Compensation. The
Committee, in it discretion, may determine whether a bonus award should qualify
as performance-based compensation as described in Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended (the "Code") and may take such
actions which it may deem necessary to ensure that such bonus award will so
qualify. Any such bonus award shall be subject to any additional limitations
set forth in Section 162(m) of the Code (including any amendment to Section
162(m) and of the Code) or any regulations or rulings issued thereunder that
are requirements for qualifications as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed
amended to the extent necessary to conform to such requirements.
Section 4.2 - Performance Goals. With respect to any bonus award
which the Committee determines should qualify as performance- based
compensation, any of the Performance Goals described in Section 2.1, if
applicable to such bonus award, shall be established before the first day of
the fiscal year to which such bonus award relates, except as may be otherwise
provided under Section 162(m)(4)(C) of the Code.
ARTICLE V
TRANSFERS AND TERMINATIONS
Section 5.1 - Transfers. For a Participant who moves from one
eligible Executive Officer position to another during a year, the bonus award
for the year will be the sum of the pro-rata bonus awards calculated for each
position.
Section 5.2 - Terminations. Except as provided in Section 5.1 or
as otherwise provided by the Committee, a Participant who, whether voluntarily
or involuntarily, is terminated, demoted, transferred or otherwise ceases to be
an eligible Executive Officer at any time during a year shall not be eligible
to receive a partial year bonus award, except when the reason for leaving the
position is for reasons of health or retirement; provided, however, that with
respect to a Participant who leaves for reasons of health or retirement, the
Committee or the CEO, in their discretion, may determine that such participant
shall not receive a partial year bonus award.
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ARTICLE VI
ADMINISTRATION
Section 6.1 - 162(m) Committee
(a) The Committee shall consist of at least two persons, each of
whom is an "outside director" for purposes of Section 162(m) of the Code,
appointed by and holding office at the pleasure of the Board.
(b) Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee shall be
filled by the Board.
Section 6.2 - Duties and Powers of Committee. It shall be the
duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the power to
interpret the Plan, and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan except with respect to matters which
under Section 162(m) of the Code are required to be determined in the sole and
absolute discretion of the Committee.
Section 6.3 - Majority Rule. The Committee shall act by a
majority of its members in office. The Committee may act either by vote at a
meeting or by a memorandum or other written instrument signed by a majority of
the Committee.
ARTICLE VII
OTHER PROVISIONS
Section 7.1 - Amendment, Suspension or Termination of the Plan.
This Plan does not constitute a promise to pay and may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board. However, to the extent required by Section 162(m) with
respect to bonus awards which the Committee determines should qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the
Code, no action of the Board may modify the performance targets described in
Section 2.1 if applicable to such bonus awards, after the commencement of the
year with respect to which such bonus awards relate, except as may be otherwise
provided under Section 162(m)(4)(C) of the Code.
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Section 7.2 - Approval of Plan by Stockholders. This Plan shall
be submitted for the approval of the Company's stockholders.
* * * * * * * * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Safeway Inc. as of March 10, 1998.
Executed on this___________ day of__________________, 1998
_______________________________
Assistant Secretary