Safeway 2013 Annual Report Download - page 157

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ARTICLE III
PERIOD OF EXERCISABILITY
3.1 Commencement of Exercisability.
(a) Subject to Sections 3.2, 3.3 and 3.4 the Option shall become vested and exercisable in such amounts and at such times as are
set forth in the Grant Notice.
(b) No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, as applicable, shall thereafter become vested and exercisable, except as set
forth in Section 3.4 below or as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and
Participant.
(c) No portion of the Option which has not become vested and exercisable at the date of Participant’s Demotion shall thereafter
become vested and exercisable. Notwithstanding the foregoing, in the event of Participant’s Demotion to a position that is eligible for stock option
grants at a lower level than the level for which Participant was eligible on the Grant Date (the “ New Position”), the immediately preceding sentence
shall apply only to that part (if any) of the portion of the Option which has not become vested and exercisable which exceeds the minimum number of
stock options to which the New Position is eligible (the Option minus such portion, the “ Remaining Portion”).
3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each
such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and
exercisable until it becomes unexercisable under Section 3.3.
3.3 Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur of the following events:
(a) The expiration of ten years following the Grant Date;
(b) If this Option is designated as an Incentive Stock Option and Participant owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any
Subsidiary Corporation or any “parent corporation” of the Company (as defined in Section 424(e) of the Code), the expiration of five years from the
Grant Date;
(c) The expiration of three months following the date of Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy, as applicable, unless such termination occurs by reason of Participant’s Retirement, Participant’s death, Participant’s
“permanent and total disability” (within the meaning of Section 22(e)(3) of the Code) or Participant’s engagement in willful misconduct that injures
the Company or any of its Subsidiaries;
(d) The expiration of 12 months following the date of Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy, as applicable, by reason of Participant’s death;
A-3