EXHIBIT (10)b
SUPERVALU INC.
LONG-TERM INCENTIVE PLAN
SECTION I. ESTABLISHMENT
On February 12, 1992, the Board of Directors of SUPERVALU INC. (the
"Company"), upon recommendation by the Compensation and Stock Option Committee
(the "Committee"), approved an incentive plan for executives as described
herein, which plan shall be known as the "SUPERVALU INC. Long-Term Incentive
Plan" (the "Plan"). The Plan shall be submitted for approval by the stockholders
of the Company at the 1992 annual meeting of stockholders. The Plan shall be
effective as of February 12, 1992, subject to its approval by the stockholders
of the Company, and no shares shall be issued pursuant to the Plan until after
the Plan has been approved by the stockholders of the Company.
SECTION II. PURPOSE
The purpose of the Plan is to advance the interests of the Company and its
stockholders by attracting and retaining key employees, and by stimulating the
efforts of such employees to contribute to the continued success and progress of
the business. The Plan is further intended to provide such employees with an
opportunity to increase their ownership of the Company's common stock with the
increased personal interest in the long-term success of the business that such
stock ownership can produce.
SECTION III. ADMINISTRATION
3.1 Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of members appointed from time to time by the
Board of Directors and shall be comprised of not less than such number of
directors as shall be required to permit the Plan to satisfy the requirements of
Rule 16b-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation ("Rule 16b-3"). All members of the Committee shall
be members of the Board of Directors of the Company who are "disinterested
persons" within the meaning of Rule 16b-3. To the extent required by Section
162(m) of the Internal Revenue Code of 1986, as amended (such statute, as it may
be amended from time to time and all proposed, temporary or final Treasury
Regulations promulgated thereunder shall be referred to as the "Code"), the
Committee administering the Plan shall be composed solely of "outside directors"
within the meaning of Section 162(m) of the Code.
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3.2 Power and Authority of the Committee. The Committee shall have full
power and authority, subject to all the applicable provisions of the Plan and
applicable law, to (a) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it deems necessary or advisable for the
proper administration of the Plan, (b) construe, interpret and administer the
Plan and any instrument or agreement relating to, or Award (as defined below in
Section 4.2) made under, the Plan, and (c) make all other determinations and
take all other actions necessary or advisable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, each determination made
and each action taken by the Committee pursuant to the Plan or any instrument or
agreement relating to, or Award made under, the Plan shall be (x) within the
sole discretion of the Committee, (y) may be made at any time and (z) shall be
final, binding and conclusive for all purposes on all persons, including, but
not limited to, holders of Awards, and their legal representatives and
beneficiaries, and employees of the Company or of any "Affiliate" of the
Company. For purposes of the Plan and any instrument or agreement relating to,
or Award made under, the Plan, the term "Affiliate" shall mean any entity that,
directly or indirectly through one or more intermediaries, is controlled by the
Company and any entity in which the Company has a significant equity interest,
in each case as determined by the Committee in its sole discretion.
3.3 Delegation. The Committee may delegate its powers and duties under the
Plan to one or more officers of the Company or any Affiliate or a committee of
such officers, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion; provided, however, that the
Committee shall not delegate its power to amend the Plan as provided in Section
XI hereof and shall not delegate its power to make determinations regarding
officers or directors of the Company or any Affiliate who are subject to Section
16 of the Exchange Act.
SECTION IV. ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. The Plan is unfunded and is maintained by the Company for
a select group of management or highly compensated employees. In order to be
eligible to participate in the Plan, an employee of the Company or of its
Affiliates must be selected by the Committee. In determining the employees who
will participate in the Plan, the Committee may take into account the nature of
the services rendered by the respective employees, their present and potential
contributions to the success of the Company and such other factors as the
Committee, in its sole discretion, shall deem relevant. A director of the
Company or of an Affiliate who is not also an employee of the Company or an
Affiliate shall not be eligible to participate in the Plan.
4.2 Participation. The Committee shall determine the employees to be
granted an award opportunity (the "Award"), the amount of each Award, the time
or times when Awards will be made, the period of time over which such Awards are
intended to be earned, and all other terms and conditions of each Award. The
provisions of the Awards need not be
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the same with respect to any recipient of an Award (the "Participant") or with
respect to different Participants. The Committee's decision to approve an Award
to an employee in any year shall not require the Committee to approve a similar
Award or any Award at all to that employee or any other employee or person at
any future date. The Company and the Committee shall not have any obligation for
uniformity of treatment of any person, including, but not limited to,
Participants and their legal representatives and beneficiaries and employees of
the Company or of any Affiliate of the Company.
4.3 Award Agreement. Any employee selected for participation by the
Committee shall, as a condition of participation, execute and return to the
Committee a written agreement setting forth the terms and conditions of the
Award (the "Award Agreement"). A separate Award Agreement will be entered into
between the Company and each Participant for each Award.
4.4 Employment. In the absence of any specific agreement to the contrary,
no Award to a Participant under the Plan shall affect any right of the Company,
or of any Affiliate of the Company, to terminate, with or without cause, the
Participant's employment at any time.
SECTION V. SHARES SUBJECT TO THE PLAN
5.1 Shares Subject to Plan. Subject to adjustment as provided in Section
5.3 hereof, the maximum number of shares or units equivalent to shares with
respect to which Awards may be granted under the Plan shall not exceed in the
aggregate 750,000 shares (the "Shares") of the Company's Common Stock, $1.00 par
value (the "Common Stock"). The payment of cash dividends or dividend
equivalents in conjunction with an Award shall not be counted against the Shares
available for grant. Shares to be issued pursuant to the Plan shall be made
available from treasury, from authorized but unissued shares of Common Stock, or
from shares reacquired by the Company, including shares purchased in the open
market. For purposes of this Section V, the maximum number of Shares to which an
Award relates shall be counted on the date such Award was made against the
aggregate number of Shares available for grant under the Plan.
5.2 Reacquired Shares. If any Shares to which an Award relates are
forfeited, or if an Award is otherwise canceled or terminated or expires without
delivery of the maximum number of Shares (or cash for the maximum number of
Shares) to which such Award relates, then the number of Shares with respect to
such Award, to the extent of any such forfeiture, cancellation, termination or
expiration, shall again be available for grant under the Plan.
5.3 Adjustments Upon Chances In Capitalization. In the event that the
Committee shall determine that any dividend or other distribution (whether in
the form of cash, Common Stock, other securities or other property), stock
split, reverse stock split, reorganization, recapitalization, merger,
consolidation, combination, split-up, spin-off,
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repurchase or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee may make such adjustments, if any, as it may deem appropriate in the
aggregate number of and class of Shares (or other securities or other property)
issuable pursuant to Section 5.1 and pursuant to any outstanding Award under the
Plan. The Committee's determination of such adjustments shall be final, binding
and conclusive.
SECTION VI. AWARDS
6.1 General. The Committee shall determine the Award or Awards to be made
to each Participant, and each Award shall be subject to the terms and conditions
of the Plan and the applicable Award Agreement. An Award may be made in the form
of Shares or in the form of units equivalent to Shares (the "Stock Units").
Awards may be granted singly or in combination, or in addition to, in tandem
with or in substitution for any grants or rights under any employee or
compensation plan of the Company or of any Affiliate. All or part of an Award
may be subject to conditions and forfeiture provisions established by the
Committee, and set forth in the Award Agreement, which may include, but are not
limited to, continuous service with the Company or an Affiliate, achievement of
specific business objectives, and other measurement of individual, business unit
or Company performance.
6.2 Award of Shares. If an Award is granted in the form of Shares,
certificates representing the Shares shall be issued in the name of the
Participant, but may be retained in the custody of the Company and may be
legended to indicate restriction on transferability ("Restricted Stock") until
the Participant has met designated performance and/or length of employment
requirements, if any, and the determination of the number of Shares, if any,
that are to be forfeited pursuant to the terms of the Award is made. Until such
time as all restrictions are removed, Restricted Stock shall not be
transferable.
6.3 Award of Stock Units. If an Award is granted in the form of Stock
Units, no certificates shall be issued with respect to such Stock Units, but the
Company shall maintain a bookkeeping account in the name of the Participant to
which the Stock Units shall relate. Each Stock Unit shall represent the right to
receive a payment of one Share, or cash of equivalent value to the "fair market
value" of the Company's Common Stock at the time payment is made, or a
continuing Stock Unit, or other Awards, or a combination thereof, with such
restrictions and conditions as the Committee may determine in its sole
discretion, including, but not limited to, the restriction of such Shares as
Restricted Stock. For purposes of the Plan, "fair market value" shall be
determined by such methods or procedures as may be established from time to time
by the Committee in its sole discretion.
6.4 Voting Rights, Dividends and Dividend Equivalents. The Committee, in
its sole discretion, may provide that Awards of Shares may contain voting rights
and may earn
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dividends and that any Award may earn dividend equivalents. Such dividends or
dividend equivalents may be paid currently or may be credited to an account
established by the Committee under the Plan in the name of the Participant. Any
crediting of dividend or dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish in its sole
discretion, including reinvestment in additional shares or share equivalents.
6.5 Payment of Awards. Payment of Awards may be made at such times, with
such restrictions and conditions, and in such forms (cash, stock, including
Restricted Stock, Stock Units, other Awards, or combinations thereof) as the
Committee in its sole discretion may determine at the time of grant of the
Awards.
6.6 Securities Matters. No Shares shall be issued under the Plan prior to
such time as counsel to the Company shall have determined that the issuance and
delivery of such Shares will not violate any federal or state securities or
other laws. Participants may be required by the Company, as a condition to the
grant of an Award or the issuance of Shares under the Plan, to agree in writing
that all Shares to be acquired pursuant to the Plan shall be held for his or her
own account without a view to any further distribution thereof, that the
certificates for the Shares shall bear an appropriate legend to that effect, and
that such Shares will not be transferred or disposed of except in compliance
with applicable federal and state laws. The Company may, in its sole discretion,
defer the effectiveness of any Award or the payment of any Award under the Plan
in order to allow the issuance of Shares pursuant thereto to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws. The Company shall be under no
obligation to effect the registration pursuant to the Securities Act of 1933, as
amended, of any Shares to be issued under the Plan or to effect similar
compliance under any state law. If Shares are traded on a securities exchange,
the Company shall not be required to deliver to the Participant certificates
representing any Shares unless and until such Shares have been admitted for
trading on such securities exchange.
6.7 Qualified Performance -Based Compensation. From time to time, the
Committee may designate an Award granted pursuant to the Plan as an award of
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code (hereinafter referred to as a "Performance-Based Award(s)").
Notwithstanding any other provision of the Plan to the contrary, the following
additional requirements shall apply to all Performance-Based Awards made to any
Participant under the Plan:
(a) Any Performance-Based Award shall be null and void and have no
effect whatsoever unless these amendments to the Plan, to the extent
required by the Code, shall have been approved by the stockholders of the
Company at the 1997 annual meeting of stockholders.
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(b) For purposes of Section 162(m) of the Code, the only employees
eligible to receive Performance-Based Awards shall be the employee's
identified in Section 4.1 hereof.
(c) The right to obtain Restricted Stock or the right to have a Stock
Unit become payable in any fashion pursuant to a Performance-Based Award
shall be determined solely on account of the attainment of one or more
preestablished, objective performance goals for a performance period
selected by the Committee at the time of the grant of the Performance-Based
Award. Such goals shall be based solely on one or more of the following
business criteria, which may apply to the individual in question, an
identifiable business unit or the Company as a whole: stock price, market
share, sales, earnings per share, profitability targets as measured by
return ratios, cumulative total return to shareholders, consolidated
pre-tax earnings, net revenues, net earnings, operating income, earnings
before interest and taxes, and cash flow, for the applicable performance
period based on absolute Company or business unit performance and/or
performance as compared to a pre-selected peer group of companies or
external financial index, all as computed in accordance with generally
accepted accounting principles as in effect from time to time and as
applied by the Company in the preparation of its financial statements and
subject to such other special rules and conditions as the Committee may
establish at any time ending on or before the 90th day of the applicable
performance period. The foregoing shall constitute the sole business
criteria upon which the performance goals under this Plan shall be based.
(d) The maximum number of Shares, whether or not in the form of
Restricted Stock, which may be issued to any Participant pursuant to any
Performance-Based Award in any calendar year period beginning with the
period commencing January 1, 1997, shall not exceed 50,000 shares (subject
to adjustment as provided for in Section 5.3).
(e) Not later than 90 days after the beginning of each performance
period selected by the Committee for a Performance-Based Award, it shall:
(i) designate all Participants for such performance period; and
(ii) establish the objective performance factors for each
Participant for that performance period on the basis of one or more of
the business criteria set forth herein.
(f) Following the close of each performance period and prior to
payment of any amount to any Participant under a Performance-Based Award,
the Committee must certify in writing as to the attainment of all factors
(including the performance factors for a Participant) upon which any
payments to a Participant for that performance period are to be based.
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(g) Each of the foregoing provisions and all of the other terms and
conditions of the Plan as it applies to any Performance-Based Award shall
be interpreted in such a fashion so as to qualify all compensation paid
thereunder as "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code.
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SECTION VII. TERMINATION OF EMPLOYMENT
Each Award Agreement shall include provisions governing the disposition of
an Award in the event of the retirement, disability, death or other termination
of a Participant's employment with the Company or an Affiliate.
SECTION VIII. CHANGE IN CONTROL
Notwithstanding any other provision in the Plan to the contrary, at the
time of the grant of an Award, the Committee may determine to include provisions
in such Award providing that upon the occurrence of a "Change in Control," (i)
all outstanding Awards (including Restricted Stock and Stock Units) shall
immediately become fully vested (which, in the case of any Award which is
subject to the achievement of designated performance objectives during a
designated performance period, shall mean vested as if all such performance
objectives had been achieved at the 100% award level at the end of such
performance period) and (ii) all restrictions, conditions and limitations on all
Awards (including Restricted Stock and Stock Units) which are outstanding at the
time of such "Change in Control" or become outstanding by virtue of the
operation of clause (i) hereof shall immediately lapse, provided that the
provisions of clauses (i) and (ii) may be subject to such restrictions,
conditions and limitations as the Committee may determine at the time of grant
of the Award as set forth in the Award Agreement relating thereto.
For purposes of the Plan, "Change in Control" shall mean any of the
following events:
1. The acquisition by any individual, 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")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control; (A) any acquisition directly from the Company or (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or
2. The consummation of any merger or other business combination of the
Company, sale or lease of the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction immediately following
which the shareholders of the Company and any trustee or fiduciary of any
Company employee benefit plan immediately prior to the Transaction own at least
60% of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the purchaser
or lessee of the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
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3. Within any 24 month period, the persons who were directors immediately
before the beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death) to constitute at least a majority of the Board of
Directors of the Company or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the beginning
of such period shall be deemed to be an Incumbent Director if such director was
elected to the Board of Directors of the Company by, or on the recommendation of
or with the approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change of Control or engage in
a proxy or other control contest); or
4. Such other event or transaction as the Board of Directors of the Company
shall determine constitutes a Change of Control.
SECTION IX. NON-TRANSFERABILITY
Except as otherwise determined by the Committee or set forth in the
applicable Award Agreement, no Restricted Stock or Stock Unit, and no right
under such Restricted Stock or Stock Unit, shall be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of during the time in which the
requirement of continued employment or attainment of performance objectives has
not been achieved. Each right under any Award shall be exercisable during the
Participant's lifetime only by the Participant or, if permissible under
applicable law, by the Participant's legal representatives.
SECTION X. TAXES
In order to comply with all applicable federal or state income, social
security, payroll, withholding or other tax laws or regulations, the Company may
take such action, and may require a Participant to take such action, as it deems
appropriate to ensure that all applicable federal or state income, social
security, payroll, withholding or other taxes, which are the sole and absolute
responsibility of the Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or part of the
federal and state taxes to be withheld or collected upon receipt or payment of
(or the lapse of restrictions relating to) an Award, the Committee, in its sole
discretion and subject to such additional terms and conditions as it may adopt,
may permit the Participant to satisfy such tax obligation by (a) electing to
have the Company withhold a portion of the shares of Common Stock otherwise to
be delivered upon receipt or payment of (or the lapse of restrictions relating
to) such Award with a fair market value equal to the amount of such taxes or (b)
delivering to the Company shares of Common Stock other than the shares issuable
upon receipt or payment of (or the lapse of restrictions relating to) such Award
with a fair market value equal to the amount of such taxes.
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SECTION XI. AMENDMENT AND TERMINATION
11.1 Term of Plan. Unless the Plan shall have been discontinued or
terminated as provided in Section 11.2 hereof, the Plan shall terminate on
February 11, 2002. No Awards may be granted after such termination, but
termination of the Plan shall not alter or impair any rights or obligations
under any Award theretofore granted, without the consent of the Participant or
holder or beneficiary thereof, except as otherwise provided in the Plan or the
Award Agreement.
11.2 Amendments to Plan. Except to the extent prohibited by applicable law
and unless otherwise expressly provided in the Plan or an Award Agreement, the
Committee may amend, alter, suspend, discontinue or terminate the Plan;
provided, however, that notwithstanding any other provision of the Plan or any
Award Agreement, without the approval of the stockholders of the Company, no
such amendment, alteration, suspension, discontinuation or termination shall be
made that, absent such approval:
(a) would cause Rule 16b-3 to become unavailable with respect to the
Plan; or
(b) would violate the rules or regulations of any securities exchange
that are applicable to the Company.
11.3 Amendments to Awards. Except to the extent prohibited by applicable
law and unless otherwise expressly provided in the Plan or an Award Agreement,
the Committee may waive any condition of, or rights of the Company under, any
outstanding Award, prospectively or retroactively. The Committee may not amend,
alter, suspend, discontinue or terminate any outstanding Award, prospectively or
retroactively, without the consent of the Participant or holder or beneficiary
thereof, except as otherwise provided in the Plan or the Award Agreement.
11.4 Correction of Defects, Omissions and Inconsistencies. Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
the Plan or an Award Agreement, the Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan, any Award or any Award
Agreement in the manner and to the extent it shall deem desirable to carry the
Plan into effect.
SECTION XII. MISCELLANEOUS
12.1 Governing Law. The Plan and any Award Agreement shall be governed by
and construed in accordance with the internal laws, and not the laws of
conflicts, of the State of Minnesota.
12.2 Severability. If any provision of the Plan, any Award or any Award
Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction or would disqualify the Plan, any Award or any Award Agreement
under any law deemed
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applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose
or intent of the Plan, the Award or the Award Agreement, such provision shall be
stricken as to such jurisdiction, and the remainder of the Plan, any such Award
or any such Award Agreement shall remain in full force and effect.
12.3 No Trust or Fund Created. Neither the Plan nor any Award or Award
Agreement shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company or of any Affiliate.
12.4 Headings. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
Amended 4/9/97
Amended 7/1/98