EXHIBIT (10)b
SUPERVALU INC.
1983 EMPLOYEE STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to promote the interests of
SUPERVALU INC., a Delaware corporation (the "Corporation"), and its stockholders
by encouraging selected key salaried management employees of the Corporation,
and members of the Board of Directors who are not also employees of the
Corporation, to invest in shares of the Corporation's Common Stock with the
increased personal interest and effort in the continued success and progress of
the business that stock ownership can produce, and by providing additional means
of attracting and retaining competent executive personnel and directors.
2. ADMINISTRATION; GRANTING OF OPTIONS. The Plan shall be administered by the
Board of Directors of the Corporation.
The Board of Directors shall have full authority in its discretion, but
subject to the express provisions of the Plan, to:
(a) determine the purchase price of the Common Stock covered by each
option;
(b) determine the persons to whom and the time or times at which
options shall be granted;
(c) determine the number of shares to be subject to each option;
(d) determine terms and provisions (and amendments thereof) of the
respective option agreements (which need not be identical), including such terms
and provisions (and amendments) as shall be required in the judgment of the
Board to conform to any law or regulation applicable thereto;
(e) determine which options shall be Incentive Stock Options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code");
(f) accelerate the time at which all or any part of an option may be
exercised;
(g) modify or amend any outstanding option agreement subject to the
consent of optionee;
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(h) interpret the Plan and prescribe, amend and rescind rules and
regulations relating to it;
(i) make all other determinations deemed necessary or advisable for
the administration of the Plan.
All decisions, determinations and selections made by the Board of Directors
on the foregoing matters shall be conclusive.
The granting of an option pursuant to the Plan shall be effective only when
an option is duly awarded to an employee or director by the Board of Directors.
The Executive Committee of the Corporation, in addition to and not to the
exclusion of the Board of Directors of the Corporation, is authorized to
exercise all of the powers authorized and conferred by the Plan on the Board of
Directors other than the power under Section 12 of this Plan to terminate and
amend the Plan.
The Board of Directors may also authorize, at any time, the formation of a
Stock Option Committee (the "Committee"), consisting of three or more members
appointed from time to time by the Board, which Committee would have authority
to exercise the powers conferred on the Board under the Plan, other than the
power under Section 12 herein to terminate and amend the Plan. In addition, the
Board of Directors may authorize, at any time, the Chief Executive Officer of
the Corporation to extend the period of exercise of certain Incentive Stock
Options and non-incentive (non-qualified) stock options in accordance with the
provisions set forth in the option agreement.
3. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING STOCK OPTIONS.
Incentive Stock Options may be granted only to key salaried management employees
(which term, as used herein, includes officers) of the Corporation and of its
present and future subsidiary corporations. Options which do not qualify as
Incentive Stock Options may be granted to key salaried management employees of
the Corporation and of its present and future subsidiary corporations and to
members of the Board of Directors of the Corporation who are not also employees
of the Corporation or one of its subsidiaries ("Non-Employee Directors"),
provided, however, that options shall be granted to Non-Employee Directors only
pursuant to Section 7 hereof.
In determining the employees to whom options shall be granted and the
number of shares to be covered by each such option, the Board of Directors may
take into account the nature of the services rendered by the respective
employees, their present and potential contributions to the success of the
Corporation and such other factors as the Board of Directors, in its discretion,
shall deem relevant.
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Subject to the provisions of Section 10 herein, an employee who has been
granted an option under the Plan or under any prior stock option plan of the
Corporation may be granted an additional option or options under the Plan if
the Board of Directors shall so determine.
4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided in
Section 11 herein:
(a) the stock to be offered under the Plan shall be shares of the
Corporation's authorized Common Stock, par value $1.00 per share, which may be
either shares reacquired and held in the treasury of the Corporation or
authorized but unissued shares; and
(b) the aggregate number of shares which may be issued under all
options granted pursuant to the Plan shall be 4,500,000 shares.
Shares subject to, but not issued under, any option terminating or expiring
for any reason prior to exercise thereof in full shall again be available for
other options thereafter granted under the Plan.
5. TERM OF PLAN AND OF EACH OPTION AGREEMENT; EXERCISE OF OPTIONS. The
period during which options may be granted under the Plan shall expire February
7, 1999. The term of each option so granted shall expire not more than ten
years from the date the option is granted.
The Board of Directors may determine at the time of granting whether each
such option is exercisable in full, in part from time to time or in
installments, which may be cumulative from year to year during such term to the
extent not exercised in a prior year; provided, however, that notwithstanding
the foregoing, from and after a Change of Control (as hereinafter defined), all
options granted under the Plan, including options granted to Non-Employee
Directors pursuant to Section 7 hereof, shall become immediately exercisable to
the full extent of the original award. As used herein, "Change of Control"
shall mean any of the following events:
(i) The acquisition by any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), other than the Corporation or any of its
wholly-owned subsidiaries, or any employee benefit plan of the Corporation
and/or one or more of its wholly-owned subsidiaries, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either the then outstanding shares of Common Stock or the combined
voting power of the Corporation's then outstanding voting securities in a
transaction or series of transactions not approved in
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advance by a vote of at least three-quarters of the Continuing Directors (as
hereinafter defined); or
(ii) Individuals who, as of April 13, 1988, constitute the Board of
Directors of the Corporation (generally the "Directors" and as of April 13, 1988
the "Continuing Directors") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a Director subsequent to
April 13, 1988 whose nomination for election was approved in advance by a vote
of at least three-quarters of the Continuing Directors (other than a nomination
of an individual whose initial assumption of office is in connection with an
actual or threatened solicitation with respect to the election or removal of the
Directors of the Corporation, as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act) shall be deemed to be a Continuing
Director; or
(iii) The approval by the stockholders of the Corporation of a
reorganization, merger, consolidation, liquidation or dissolution of the
Corporation or of the sale (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Corporation other
than a reorganization, merger, consolidation, liquidation, dissolution or sale
approved in advance by a vote of at least three quarters of the Continuing
Directors; or
(iv) The first purchase under any tender offer or exchange offer
(other than an offer by the Corporation or any of its subsidiaries) pursuant to
which shares of Common Stock are purchased.
Options granted under this Plan need not be identical with respect to the
terms of exercise thereof. Subject only to the foregoing limitations, options
may be exercised in whole at any time or in part from time to time during the
option term by serving written notice of exercise on the Corporation,
accompanied by payment of the purchase price.
The Board of Directors or the Committee, as the case may be, may grant
"restoration" options, separately or together with another option, pursuant to
which, subject to the terms and conditions established by the Board of Directors
or the Committee, as the case may be, and any applicable requirements of Rule
16b-3 promulgated under the Exchange Act or any other applicable law, the
optionee would be granted a new option when the payment of the exercise price of
the option to which such "restoration" option relates is made by the delivery of
shares of the Corporation's Common Stock owned by the optionee, as described in
Section 6 hereof, which new option would be an option to purchase the number of
shares not exceeding the sum of (a) the number of shares of the Corporation's
Common Stock tendered as payment upon the exercise of the option to which such
"restoration" option relates, (b) the number of shares of the Corporation's
Common Stock, if any, tendered as payment of the amount to be withheld under
applicable income tax laws in connection with the exercise of the option to
which such "restoration" option relates, as described in Section 14 hereof, and
(c) the number of shares of the Corporation's Common Stock, if any, previously
owned by the optionee that are tendered as payment for additional tax
obligations of the optionee in connection with the exercise of the option to
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which such "restoration" option relates, as described in Section 14 hereof.
"Restoration" options may be granted with respect to options previously
granted under this Plan or any prior stock option plan of the Corporation, and
may be granted in connection with any option granted under this Plan (other
than an option granted to a Non-Employee Director pursuant to Section 7
hereof) at the time of such grant. The purchase price of the Common Stock
under each such new option, and the other terms and conditions of such option,
shall be determined by the Board of Directors or the Committee, as the case
may be, consistent with the provisions of the Plan.
6. OPTION PRICES. Except with respect to options granted to Non-Employee
Directors pursuant to Section 7 hereof, the purchase price of the Common Stock
under each option shall be determined by the Board of Directors, but shall not
be less than 100% of the fair market value of the Common Stock at the time of
granting the option as found by the Board.
The purchase price of the shares as to which an option shall be exercised
shall be paid in full in cash at the time of exercise as shall be provided in
the option agreement, and any optionee, without limitation, shall also be
entitled to pay the exercise price by tendering to the Corporation shares of the
Corporation's Common Stock, previously owned by the optionee, having a fair
market value on the date of exercise equal to the option price (or the portion
thereof not paid in cash).
7. OPTIONS TO NON-EMPLOYEE DIRECTORS. The Board of Directors or the
Committee, as the case may be, shall issue options which do not qualify as
Incentive Stock Options to Non-Employee Directors in accordance with this
Section 7.
Each Non-Employee Director serving on the Corporation's Board of Directors
immediately following the Annual Meeting of Stockholders of the Corporation on
June 30, 1992 shall be granted, as of June 30, 1992, an option to purchase 3,000
shares of Common Stock. Each Non-Employee Director first elected or appointed
to the Corporation's Board of Directors after June 30, 1992 and during the term
of the Plan shall be granted, as of the date of such Director's first election
or appointment to the Board of Directors, an option to purchase 3,000 shares of
Common Stock. After the initial grant to each Non-Employee Director as set
forth above in this Section 7, each such Director shall be granted during the
term of the Plan, as of the date of the Corporation's Annual Meeting of
Stockholders in each even-numbered year, if such Director's term of office
continues after such Annual Meeting, an option to purchase 3,000 shares of
Common Stock.
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Each option granted to a Non-Employee Director pursuant to this Section 7
shall have an exercise price equal to the fair market value of the shares of
Common Stock as of the date of grant and shall expire on the tenth anniversary
of the date of grant. "Restoration" options may not be granted to any Non-
Employee Director. This Section 7 shall not be amended more than once every
six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act or the rules and regulations thereunder.
8. ADDITIONAL TERMS. Options granted under the Plan shall not be
affected by any change of duties or position so long as the optionee continues
to be an employee of the Corporation or of a subsidiary (or continues to be a
Director of the Corporation in the case of any Non-Employee Director). Each
option agreement may contain such provisions as the Board of Directors shall
approve with reference to the effect of approved leaves of absence, provided
that with respect to Incentive Stock Options such provisions conform to the
requirements of the Code.
Nothing in the Plan or in any option granted pursuant thereto shall confer
on any person any right to continue in the employ of the Corporation or of any
of its subsidiaries (or to continue as a Director of the Corporation in the case
of any Non-Employee Director) or affect, in any way, the right of the
Corporation or any of its subsidiaries to terminate his employment (or to
terminate his directorship in the case of any Non-Employee Director) at any
time.
No optionee, who is an employee of the Corporation at the time of grant,
may be granted any option or options for more than 250,000 Shares (subject to
adjustment as provided for in Section 11), taking into account all such awards
granted by the Corporation pursuant to any of its stock compensation plans, in
any calendar year period beginning with the period commencing January 1, 1997.
The foregoing annual limitation specifically includes the grant of any options
representing "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
9. DEATH; OTHER TERMINATION OF EMPLOYMENT OR DIRECTORSHIP. Each option
agreement shall include provisions governing the disposition of an option in the
event of the retirement, disability, death or other termination of the
employment or directorship of an optionee with the Corporation or an Affiliate.
10. INCENTIVE STOCK OPTIONS. Except with respect to options granted to
Non-Employee Directors pursuant to Section 7 hereof, the Board of Directors is
hereby authorized to determine, upon the granting of each option, whether such
option shall be an Incentive Stock Option under Section 422 of the Code or shall
be an option which is not an Incentive Stock Option under Section 422. For
Incentive Stock Options granted before January 1, 1987, the aggregate fair
market value of the stock (determined as of the time the Incentive Stock
Option is granted) covered under all Incentives Stock
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Options granted (under this Plan and all other incentive stock option plans of
the Corporation or any subsidiary), in any calendar year, shall not exceed
$100,000 plus any unused limit carry-over (as provided under former Section
422(c)(4) of the Code effective for options granted before January 1, 1987).
For Incentive Stock Options granted after December 31, 1986, the aggregate
fair market value (determined at the time the Incentive Stock Option is
granted) of the stock with respect to which all Incentive Stock Options are
exercisable for the first time by an employee during any calendar year (under
all plans described in subsection (b) of Section 422 of the Code of his employer
corporation and its parent and subsidiary corporations) shall not exceed
$100,000.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Notwithstand-ing any
other provision of the Plan, the Board of Directors may adjust the number and
class of shares subject to each outstanding option and the option prices in
the event of changes in the outstanding Common Stock of the Corporation by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares and the like. In the event
of any such change in the outstanding Common Stock of the Corporation, the
aggregate number and class of shares available under the Plan shall be
appropriately adjusted by the Board of Directors, whose determination shall be
conclusive.
12. TERMINATION AND AMENDMENT. The Plan may be terminated, modified or
amended by the stockholders of the Corporation.
Subject to Section 7 hereof, the Board of Directors of the Corporation may
also terminate the Plan or make such modifications or amendments thereof as it
shall deem advisable, or to conform to any change in any law or regulation
applicable thereto; provided, however, that the Board of Directors may not,
without further approval by the holders of a majority of the outstanding stock
of the Corporation having general voting power, make any modification or
amendment which operates:
(a) to make any material change in the class of employees eligible to
receive Incentive Stock Options as defined in Section 3 above; and
(b) to increase the total number of shares for which options may be
granted under the Plan, except as resulting from the operation of Section 11
above.
No termination, modification or amendment of the Plan may, without the
consent of the employee to whom any option shall theretofore have been granted,
adversely affect the rights of such employee under such option.
13. EFFECTIVE DATE OF PLAN. The Plan shall become effective February
23, 1983, subject to approval by the shareholders of the Corporation within 12
months thereafter.
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14. TAX WITHHOLDING AND PAYMENT. Subject to such rules as the Board of
Directors or the Committee may adopt not inconsistent with the provisions of the
Plan:
(a) At any time when an optionee is required to pay the Corporation an
amount required to be withheld under applicable income tax laws in connection
with the exercise of an option which does not qualify as an Incentive Stock
Option under Section 422 of the Code, the optionee may elect to deliver to the
Corporation or have the Corporation retain from the distribution, shares of
Common Stock to satisfy this obligation in whole or in part (an "Election").
In addition to amounts required to be withheld to pay applicable taxes,
subject to such terms and conditions as the Committee shall determine in its
sole and absolute discretion, the Committee may permit an optionee to elect to
deliver to the Corporation shares of Common Stock (other than shares of Common
Stock issuable upon exercise of the option) with a fair market value equal to
the amount of such additional federal and/or state income taxes imposed on the
optionee in connection with the exercise of the option. The shares to be
withheld or delivered shall be valued at 100% of the fair market value of the
shares on the date that the amount of tax required to be paid shall be
determined (the "Tax Date"). Fair market value of the shares shall equal the
mean of the opening and closing trade prices of the shares as reported on the
New York Stock Exchange on the Tax Date, or, if no trading in the shares
occurs on the Tax Date, on the immediately preceding trading date.
(b) Each Election must be made prior to the Tax Date. The Board or
the Committee may disapprove of any Election, may suspend or terminate the right
to make Elections, may limit the amount of any Election, may provide at the time
of grant with respect to any option that the right to make Elections shall not
apply to such option and may make rules concerning the required information to
be included in any Election. An Election is irrevocable.
(c) The Election may be made in an amount equal to the amount of tax
required by law to be withheld with respect to the option exercise. Any
fractional share withholding amount must be paid in cash.
(d) If an optionee makes an Election and the optionee's Tax Date is
deferred for six months from the date of exercise of the option, the optionee
will initially receive the full amount of the shares, but will be
unconditionally obligated to surrender to the Corporation on the Tax Date the
proper number of shares to satisfy the withholding obligation, plus cash for any
remainder of the withholding obligation including any fractional shares
withholding amount.
(e) Optionees who are "officers" or "directors" of the Corporation, as
those terms are used in Section 16(b) of the Exchange Act, may only make an
Election
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in compliance with the rules established by the Board or the Committee to
comply with Section 16(b).
x:\group\legal\corp\stkplan\83esop\plan\83esopfn.doc
Amended 2/8/95
Amended 2/14/96
Amended 4/9/97
Amended 10/15/97
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