Safeway 2013 Annual Report Download - page 172

(d) In the event of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy, as
applicable, by reason of the Participant’s Retirement at least 12 months following the Grant Date, the Option shall continue to become vested and
exercisable in such amounts and at such times as are set forth in the Grant Notice following the date of such termination; provided, that in the event of
Participant’s subsequent death or the circumstances specifically contemplated by Sections 3.4(b)(i) and 3.4(b)(ii), the Option shall become fully
vested and exercisable with respect to all shares of Stock covered thereby immediately prior to or upon such date.
(e) For the avoidance of doubt, in the event Participant experiences a Demotion, references to the “Option” in this Section 3.4 shall
refer to the Remaining Option, if any.
3.5 Special Tax Consequences. Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time
the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by
Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to
comply with the limitations imposed by Section 422(d) of the Code. Participant further acknowledges that the rule set forth in the preceding sentence
shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined under
Section 422(d) of the Code and the Treasury Regulations thereunder.
ARTICLE IV
EXERCISE OF OPTION
4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c), during the lifetime of Participant, only Participant may
exercise the Option or any portion thereof. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the
deceased Participant’s will or under the then applicable laws of descent and distribution.
4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or
in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3; provided, however, that each
partial exercise shall be for not less than 100 shares (or, if less, the maximum number of shares for which the Option is vested and exercisable at such
time) and shall be for whole shares only.
4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the
Company or the Secretary’s office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under
Section 3.3:
(a) Written evidence of exercise of the Option or any portion thereof by Participant or any other person then entitled to exercise
the Option or portion thereof, in such form or forms deemed acceptable by the Company (including an exercise notification confirmation statement
provided by a broker), stating that the Option or portion thereof is thereby exercised, such written evidence complying with all applicable rules
established by the Administrator;
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