8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 14, 2010

SUPERVALU INC.

(Exact name of registrant as specified in its charter)

Delaware	1–5418	41–0617000
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11840 Valley View Road Eden Prairie, Minnesota	55344
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (952) 828-4000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-3.1

EX-10.1

EX-10.2

EX-10.3

EX-10.4

EX-10.5

EX-10.6

EX-10.7

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) On April 14, 2010, A. Gary Ames and Marissa Peterson resigned voluntarily from the Board of Directors of SUPERVALU INC. (the “Corporation”), effective immediately.

Additionally, Jeffrey Noddle gave notice to the Corporation on April 14, 2010 that he will retire as Executive Chairman and director of the Corporation, effective at the Corporation’s Annual Meeting of Stockholders to be held on June 24, 2010. Also, on April 14, 2010, Lawrence A. Del Santo and Garnett L. Keith gave notice to the Corporation of their intention to retire from the Board of Directors effective at the Annual Meeting of Stockholders. As a result, Messrs. Noddle, Del Santo and Keith will not be standing for re-election as directors at the Annual Meeting of Stockholders.

The Corporation announced on April 20, 2010 that it expects Wayne C. Sales to be elected by the Board of Directors to the position of Non-Executive Chairman of the Board following the 2010 Annual Meeting of Stockholders. It is expected that Mr. Sales will serve as Non-Executive Chairman for a two-year term, contingent upon his continued service on the Board of Directors. At the end of that two-year term, the Board will reevaluate its leadership structure.

(e) Effective October 12, 2006, the Corporation entered into a Restricted Stock Unit Award Agreement (the “Agreement”) with Jeffrey Noddle. Under the Agreement, Mr. Noddle was granted 305,157 restricted stock units as an incentive to retain his services with the Company and to develop a succession plan. The Agreement provided that the restricted stock units would vest over a period of five years, subject to the satisfaction of certain conditions. On April 15, 2010, the Board of Directors of the Corporation determined that, because the objectives of the Agreement had been met, the unvested restricted stock units under the Agreement will vest on June 24, 2010, the effective date of Mr. Noddle’s retirement from the Corporation, subject to the terms and conditions of the Agreement as amended by Amendment No.1 thereto dated April 16, 2010 (the “Amendment”). The number of shares that vest on June 24, 2010 will be reduced, pursuant to Section 1(b) of the Amendment, based on the Company’s average stock price for the 90 days immediately preceding June 24, 2010.

The foregoing summary of the terms of the Agreement is qualified in its entirety by reference to the Agreement, a copy of which was filed as Exhibit 99.1 to the Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 13, 2006 and is incorporated by reference herein. The foregoing summary of the terms of the Amendment is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Additionally, on April 14, 2010, the Leadership Development and Compensation Committee of the Board of Directors approved the forms of the following revised award agreements under the 2007 Stock Plan for future grants of equity awards to officers of the Corporation:

• Stock Option Agreement and Stock Option Terms and Conditions for Officers;

• Restricted Stock Award Agreement and Restricted Stock Award Terms and Conditions for Officers;

• Restricted Stock Unit Award Agreement and Restricted Stock Unit Award Terms and Conditions for Officers;

• Stock Appreciation Rights Agreement for Officers;

• Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (restricted stock settled); and

• Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (cash settled)

The award agreements listed above are filed as Exhibits 10.2 through 10.7, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On April 15, 2010, the Board of Directors of the Corporation approved amendments to the Corporation’s Restated Bylaws, which were effective immediately. The Corporation’s Restated Bylaws were amended to decrease the total

number of members of the Board of Directors from 15 to 13 to reflect the resignations of Mr. Ames and Ms. Peterson, to provide for the election by the Board of Directors of a Non-Executive Chairman of the Board, and to eliminate references to the position of Vice Chairman. Below is a description of each change to the Restated Bylaws.

Section 3.02(a) of the Corporation’s Restated Bylaws was amended to decrease the number of members of the Board of Directors by two members, to consist of 13 total members. As amended, Section 3.02(a) of the Corporation’s Restated Bylaws now states:

“Number: The Board of Directors currently consists of 13 members and the number of directors may be increased or decreased from time to time by resolution of a majority of the whole Board of Directors or of the holders of at least 75% of the stock of the Corporation entitled to vote, considered for the purpose as one class.”

Section 3.14, “Chairman of the Board of Directors” was added to the Restated Bylaws to provide for the election by the Board of a Non-Executive Chairman of the Board. Section 3.14 states:

“Chairman of the Board. The non-employee directors of the Board of Directors shall elect from their number a Chairman of the Board. The Chairman shall be an independent non-employee director. The Chairman shall preside at all meetings of the directors and shall have such other duties as may be prescribed, from time to time, by the Board of Directors. The Chairman shall serve for a term ending (a) at the time determined by the Board of Directors at the time of election or (b) upon his or her earlier death, resignation, removal or disqualification as an independent director. The Chairman may be removed as Chairman at any time with or without cause by a majority of the non-employee directors. The Chairman of the Board shall not be deemed to be an officer of the Corporation as a result of such title.”

Section 2.05 of the Corporation’s Restated Bylaws was amended to remove references to the Vice Chairman. As amended, Section 2.05 now states:

“Organization. At each meeting of the stockholders, the Chairman of the Board or such person’s delegate shall act as Chairman; in the event the Chairman is absent and such person has not designated a Chairman, the President, if also designated as CEO, shall act as Chairman, or the President, if also designated as CEO, shall designate a Chairman; and the Secretary of the Corporation or in such person’s absence an Assistant Secretary or in such person’s absence any person whom the Chairman of the meeting shall appoint shall act as Secretary of the meeting.”

Section 5.01 of the Corporation’s Bylaws was amended to remove references to the Chairman of the Board, as the Chairman will no longer be deemed to be an officer as a result of such title. As amended, Section 5.01 now states:

“Number. The officers of the Corporation shall consist of a President, a Treasurer and a Secretary, and, if elected, such additional officers as described in this Article V. The directors may designate one or more regional or divisional Presidents and Vice Presidents who shall not be officers of this Corporation. Any person may hold two or more offices except President and Vice President.

Former Section 5.04, “Chairman and Vice Chairman of the Board of Directors” of the Corporation’s Restated Bylaws was removed as a result of the addition of Section 3.14, and the remainder of Article V, “Officers” was renumbered accordingly.

Section 5.05, which has been renumbered Section 5.04, of the Corporation’s Restated Bylaws was amended to remove a reference to the Vice Chairman. As amended, Section 5.04 now states:

“President. The President shall have such duties as may, from time to time be prescribed by the Board of Directors and may be designated by the Board of Directors as the Chief Executive Officer. In the absence of the Chairman of the Board the President, if also designated as CEO, shall preside at all meetings of the directors.”

Section 5.15, which has been renumbered Section 5.14, of the Corporation’s Restated Bylaws was amended to remove a reference to the Vice Chairman. As amended, Section 5.15, which has been renumbered Section 5.14, now states:

“Authority to Execute Agreements. The Chairman of the Board, President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Group Vice Presidents are hereby authorized to execute or cause to be executed in the name and on behalf of this Corporation, all contracts, agreements, deeds, mortgages, bonds, options, leases, lease and other guarantees of the obligations of others, including subsidiary corporations and customers, stock transfer documents, and such other instruments as may be necessary or desirable in the conduct of the business of the Corporation; and said officers are further authorized to sign and affix, or cause to be signed and affixed, the seal of the Corporation on any instrument requiring the same, which seal shall be attested by the signature of the Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer.”

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit	Description of Exhibit
3.1	Restated Bylaws of SUPERVALU INC., as amended April 14, 2010
10.1	Amended No. 1 to Restricted Stock Unit Award Agreement between SUPERVALU INC. and Jeffrey Noddle, dated April 16, 2010*
10.2	Form of 2007 Stock Plan Stock Option Agreement and Stock Option Terms and Conditions for Officers, as amended April 14, 2010*
10.3	Form of 2007 Stock Plan Restricted Stock Award Agreement and Restricted Stock Award Terms and Conditions for Officers, as amended April 14, 2010*
10.4	Form of 2007 Stock Plan Restricted Stock Unit Award Agreement and Restricted Stock Unit Award Terms and Conditions for Officers, as amended April 14, 2010*
10.5	Form of SUPERVALU INC. 2007 Stock Plan Stock Appreciation Rights Agreement for Officers, as amended April 14, 2010*
10.6	Form of SUPERVALU INC. 2007 Stock Plan Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (restricted stock settled), as amended April 14, 2010*
10.7	Form of SUPERVALU INC. 2007 Stock Plan Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (cash settled), as amended April 14, 2010*

* Indicates management contract, compensatory plan or arrangement required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 20, 2010
	SUPERVALU INC.
	By:	/s/ David L. Boehnen
		David L. Boehnen
		Executive Vice President

EXHIBIT INDEX

Exhibit	Description of Exhibit
3.1	Restated Bylaws of SUPERVALU INC., as amended April 14, 2010
10.1	Amendment No. 1 to Unit Award Agreement between SUPERVALU INC. and Jeffrey Noddle, dated April 16, 2010*
10.2	Form of 2007 Stock Plan Stock Option Agreement and Stock Option Terms and Conditions for Officers, as amended April 14, 2010*
10.3	Form of 2007 Stock Plan Restricted Stock Award Agreement and Restricted Stock Award Terms and Conditions for Officers, as amended April 14, 2010*
10.4	Form of 2007 Stock Plan Restricted Stock Unit Award Agreement and Restricted Stock Unit Award Terms and Conditions for Officers, as amended April 14, 2010*
10.5	Form of SUPERVALU INC. 2007 Stock Plan Stock Appreciation Rights Agreement for Officers, as amended April 14, 2010*
10.6	Form of SUPERVALU INC. 2007 Stock Plan Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (restricted stock settled), as amended April 14, 2010*
10.7	Form of SUPERVALU INC. 2007 Stock Plan Performance Stock Unit Award Agreement and Performance Stock Unit Award Terms and Conditions (cash settled), as amended April 14, 2010*

* Indicates management contract, compensatory plan or arrangement required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K

EX-3.1

Exhibit 3.1

Adopted:	October 23, 1980
Amended:	June 27, 1983
Amended:	December 16, 1986
Amended:	April 13, 1988
Amended:	June 30, 1988
Amended:	February 14, 1990
Amended:	December 12, 1990
Amended:	February 16, 1991
Amended:	June 30, 1992
Amended:	October 9, 1998
Amended:	August 14, 2002
Amended:	February 8, 2006
Amended:	April 12, 2006
Amended:	December 6, 2007
Amended:	October 2, 2008
Amended:	December 3, 2008
Amended:	May 6, 2009
Amended:	July 7, 2009
Amended:	October 7, 2009
Amended:	April 15, 2010

RESTATED BYLAWS
OF
SUPERVALU INC.

Table of Contents

	Page
ARTICLE I. Offices, Corporate Seal	1
Section 1.01. Registered Office	1
Section 1.02. Corporate Seal	1
ARTICLE II. Meetings of Stockholders	1
Section 2.01. Place and Time of Meetings	1
Section 2.02. Annual Meetings	1
Section 2.03. Special Meetings	1
Section 2.04. Quorum, Adjourned Meetings	1
Section 2.05. Organization	2
Section 2.06. Order of Business	2
Section 2.07. Voting	2
Section 2.08. Inspectors of Election	3
Section 2.09. Notices of Meetings and Consents	3
Section 2.10. Proxies	3
Section 2.11. Waiver of Notice	4
Section 2.12. Stockholder List	4

-i-

	Page
Section 2.13. Fixing Date for Determination of Stockholders of Record	4
Section 2.14. Stockholder Action by Written Consent	4
Section 2.15. Notice of Stockholder Business and Nominations	5
ARTICLE III. Board of Directors	8
Section 3.01. General Powers	8
Section 3.02. Number, Election and Term of Office	8
Section 3.03. Annual Meeting	10
Section 3.04. Regular Meetings	10
Section 3.05. Special Meetings	10
Section 3.06. Notice of Meetings	10
Section 3.07. Waiver of Notice	10
Section 3.08. Quorum	10
Section 3.09. Removal	10
Section 3.10. Committees of Directors	11
Section 3.11. Written Action	11
Section 3.12. Compensation	11
Section 3.13. Conference Communications	11
Section 3.14. Chairman of the Board	12
ARTICLE IV. Standing Committees	12
Section 4.01. Standing Committees	12
Section 4.02. Executive Committee	12
Section 4.03. Leadership Development and Compensation Committee	13
Section 4.04. Finance Committee	13
Section 4.05. Audit Committee	13
Section 4.06. Corporate Governance and Nominating Committee	13
ARTICLE V. Officers	14
Section 5.01. Number	14
Section 5.02. Election, Term of Office and Qualifications	14
Section 5.03. Removal and Vacancies	14
Section 5.04. President	14
Section 5.05. Chief Executive Officer	14
Section 5.06. Chief Operating Officer	14
Section 5.07. Vice Presidents	14
Section 5.08. President Pro Tem	15
Section 5.09. Secretary	15
Section 5.10. Treasurer	15
Section 5.11. Controller	15
Section 5.12. Counsel	15
Section 5.13. Duties of Other Officers	15
Section 5.14. Authority to Execute Agreements	15
Section 5.15. Duties of Officers May be Delegated	16
Section 5.16 Compensation	16

-ii-

	Page
ARTICLE VI. Shares and Their Transfer	16
Section 6.01. Certificates for Stock	16
Section 6.02. Issuance of Stock	16
Section 6.03. Partly Paid Stock	17
Section 6.04. Transfer of Stock	17
Section 6.05. Facsimile Signatures	17
Section 6.06 Lost, Stolen, Destroyed or Mutilated Certificates	17
ARTICLE VII. Dividends, Surplus, Etc.	18
Section 7.01. Dividends	18
Section 7.02. Use of Surplus, Reserve	18
ARTICLE VIII. Books and Records, Audit, Fiscal Year	18
Section 8.01. Books and Records	18
Section 8.02. Audit	18
Section 8.03. Fiscal Year	18
ARTICLE IX. Indemnification	18
Section 9.01. Statutory Indemnification	18
Section 9.02. Additional Indemnification	19
Section 9.03. Procedure for Indemnification	19
Section 9.04. Non-Exclusive	20
Section 9.05. Subsidiary Corporations	21
ARTICLE X. Miscellaneous	21
Section 10.01. Periods of Time	21
Section 10.02. Voting Securities Held by the Corporation	21
Section 10.03. Purchase and Sale of Securities	21
ARTICLE XI. Amendments	22
Section 11.01.	22

-iii-

RESTATED BYLAWS
OF
SUPERVALU INC.

ARTICLE I.
Offices, Corporate Seal

     Section 1.01. Registered Office. The registered office of the Corporation in Delaware shall be at 100 West Tenth Street, Wilmington, Delaware, and the resident agent in charge thereof shall be The Corporation Trust Company.

     Section 1.02. Corporate Seal. The corporate seal shall be circular in form and have inscribed thereon, the name of the Corporation, the year of its incorporation (1925), and the word “Delaware.”

ARTICLE II.
Meetings of Stockholders

     Section 2.01. Place and Time of Meetings. Meetings of the stockholders may be held at such place and at such time as may be designated by the Board of Directors. In the absence of a designation of place, meetings shall be held at the principal executive office of the Corporation. In the absence of a designation of time, the meetings shall be held at 10:00 a.m. local time at the place where the meeting is to be held. Any previously scheduled annual or special meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting.

     Section 2.02. Annual Meetings. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of any other proper business shall be held at such date, time and place as may be fixed by resolution of the Board of Directors.

     Section 2.03. Special Meetings. Special meetings of the stockholders for any purpose or purposes shall be called only by the Secretary (but only at the written request of a majority of the total number of directors), the Chairman of the Board or the President. Stockholders shall have no power or right to call special meetings. The call of any special meeting shall state the purpose or purposes of the meeting. Business transacted at any special meeting shall be limited to the purposes stated in the call of such meeting.

     Section 2.04. Quorum, Adjourned Meetings. The holders of a majority of the shares outstanding and entitled to vote shall constitute a quorum for the transaction of business at any annual or special meeting. If a quorum is not present at a meeting, those present shall adjourn to such day as they shall agree upon by majority vote; provided, however, that any annual or special meeting of stockholders, whether or not a quorum is present, may be adjourned from time to time by the Chairman of the meeting.

Notice of any adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. At adjourned meetings, any business may be transacted which might have been transacted at the meeting as originally noticed. If a quorum is present, the stockholders may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

     Section 2.05. Organization. At each meeting of the stockholders, the Chairman of the Board or such person’s delegate shall act as Chairman; in the event the Chairman is absent and such person has not designated a Chairman, the President, if also designated as CEO, shall act as Chairman, or the President, if also designated as CEO, shall designate a Chairman; and the Secretary of the Corporation or in such person’s absence an Assistant Secretary or in such person’s absence any person whom the Chairman of the meeting shall appoint shall act as Secretary of the meeting.

     Section 2.06. Order of Business. The order of business at all meetings of the stockholders shall be determined by the Chairman of the meeting. The Chairman of the meeting shall convene and adjourn the meeting and determine and announce the times at which the polls shall be opened and closed at the meeting.

     Section 2.07. Voting. Except as may be provided in a resolution or resolutions of the Board of Directors establishing a series of Preferred Stock, and except as may be otherwise provided in the Certificate of Incorporation of the Corporation, each stockholder of the Corporation entitled to vote at a meeting of stockholders shall have one vote in person or by written proxy for each share of stock having voting rights held by him and registered in such person’s name on the books of the Corporation. Upon the request of any stockholder, the vote upon any question before a meeting shall be by written ballot, and all elections of directors shall be by written ballot. All questions at a meeting shall be decided by a majority vote of the number of shares entitled to vote represented at the meeting at the time of the vote except where otherwise required by statute, the Certificate of Incorporation or these Bylaws.

     Persons holding stock in fiduciary capacity shall be entitled to vote the shares so held. Unless the Secretary of the Corporation has been furnished with a copy of governing instruments or orders which would cause other rules to be applicable, the following rules shall govern the voting of shares standing of record in the names of two or more persons (whether joint tenants, tenants in common, tenants by the entirety, fiduciaries, members of a partnership, or otherwise) or shares held in a fiduciary capacity in which two or more persons have the same fiduciary relationship respecting such shares:

(i)	if only one person shall vote, such person’s act shall bind all;
(ii)	if more than one person shall vote, the act of the majority voting shall bind all;
(iii)	if more than one person shall vote, but the votes shall be evenly split on any particular matter, then, except as otherwise provided by statute, each fraction may vote the shares in question proportionately.

     Section 2.08. Inspectors of Election. For each meeting of the stockholders, the Chairman of such meeting shall appoint one or more inspectors of election to act. Each inspector of election so appointed shall first subscribe an oath or affirmation to execute the duties of an inspector of election at such meeting with strict impartiality and according to the best of such person’s ability. Such inspectors of election, if any, shall take charge of the ballots at such meeting and after the balloting on any question shall count the ballots and shall make a report in writing to the Secretary of such meeting of the results thereof. An inspector of election need not be a stockholder of the Corporation, and any officer or employee of the Corporation may be an inspector of election on any question other than a vote for or against such person’s election to any position with the Corporation or on any other question in which such person may be directly interested.

     Section 2.09. Notices of Meetings and Consents. Every stockholder may furnish the Secretary of the Corporation with an address at which notices of meetings and all other corporate communications may be served on or mailed to him. In the absence of such address, the address on the corporate share registry maintained by the transfer agent shall be sufficient for purposes of the hereinafter described notice. Except as otherwise provided by the Certificate of Incorporation or by statute, a written notice of each annual or special meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of such meeting to each stockholder of record of the Corporation entitled to vote at such meeting by delivering such notice of meeting to him personally or depositing the same in the United States mail, postage prepaid, directed to him at the post office address as provided above. Service of notice is complete upon mailing. Personal delivery to any officer of a corporation or association or to any member of a partnership is delivery to such corporation, association or partnership. Every notice of a meeting of stockholders shall state the place, date and hour of the meeting and the purpose or purposes for which the meeting is called.

     Section 2.10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or consent to corporate action without a meeting may authorize another person or persons to act for him by proxy by an instrument executed in writing. If any such instrument designates two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide.

     Section 2.11. Waiver of Notice. Notice of any annual or special meeting may be waived either before, at or after such meeting in writing signed by the person or persons entitled to the notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transacting of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders need be specified in any written waiver of notice.

     Section 2.12. Stockholder List. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder.

     Section 2.13. Fixing Date for Determination of Stockholders of Record.

     (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action (other than the expression of consent to corporate action in writing without a meeting of stockholders) , the Board of Directors shall fix, in advance, a record date, which may not be more than 60 or not less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.

     (b) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

     Section 2.14. Stockholder Action by Written Consent. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing

without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

     Section 2.15. Notice of Stockholder Business and Nominations.

     (a) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (A) pursuant to the Corporation’s notice of meeting, (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 2.15, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 2.15.

          (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of paragraph (a) (1) of this Section 2.15, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above.

     A stockholder’s notice to be proper must include (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director (i) the name, age, business address and residence address of such person, (ii) the class, series and number of any shares of stock of the Corporation that are beneficially owned or owned of record by such person, (iii) the date or dates such shares were acquired and the

investment intent of such acquisition, (iv) a completed and signed questionnaire, representation and agreement required by paragraph (a) (5) of this Section 2.15, and (v) all other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and any Stockholder Associated Person (as defined below) , individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom; (C) as to the stockholder giving the notice and any Stockholder Associated Person, (i) the class, series and number of all shares of stock of the Corporation which are owned by such stockholder and by such Stockholder Associated Person, if any, (ii) the nominee holder for, and number of, shares owned beneficially but not of record by such stockholder and by any such Stockholder Associated Person, and (iii) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder or any such Stockholder Associated Person with respect to any share of stock of the Corporation; (D) as to the stockholder giving the notice and any Stockholder Associated Person covered by clauses (B) or (C) of this paragraph (a) (2) of this Section 2.15, the name and address of such stockholder, as they appear on the Corporation’s stock ledger, and current name and address, if different, and of such Stockholder Associated Person; and (E) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder’s notice.

          (3) Notwithstanding anything in the second sentence of paragraph (a) (2) of this Section 2.15 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increase Board of Directors made by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.15 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

          (4) For purposes of this Section 2.15, “Stockholder Associated Person” of any stockholder shall mean (i) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder and (iii) any person controlling, controlled by or under common control with such Stockholder Associated Person.

          (5) To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 2.15) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law; (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein; and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

     (b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (A) by or at the direction of the Board of Directors or (B) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.15, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.15. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) , for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a) (2) of this Section 2.15 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later

than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

     (c) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 2.15 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.15. Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.15 and, if any proposed nomination or business is not in compliance with this Section 2.15, to declare that such defective proposal or nomination shall be disregarded.

          (2) For purposes of this Section 2.15, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

          (3) Notwithstanding the foregoing provisions of this Section 2.15, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.15. Nothing in this Section 2.15 shall be deemed to affect any rights of (i) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) the holders of any series of Preferred Stock to elect directors under specified circumstances.

ARTICLE III.
Board of Directors

     Section 3.01. General Powers. The business of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may delegate its authority, subject to its reasonable supervision, to any committee, officer or agent and grant the power to sub-delegate.

     Section 3.02. Number, Election and Term of Office.

     (a) Number: The Board of Directors currently consists of 13 members and the number of directors may be increased or decreased from time to time by resolution of a majority of the whole Board of Directors or of the holders of at least 75% of the stock of the Corporation entitled to vote, considered for the purpose as one class.

     (b) Election: Except as otherwise provided by law or by these Bylaws, the directors of the Corporation shall be elected at the Annual Meeting of stockholders in each year. Except as provided in paragraph (d) of this Section 3.02, each director shall be elected by the vote of the majority of the votes cast with respect to the director at any meeting for the election of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. For purposes of this paragraph, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. If a director is not elected, the director shall offer to tender his or her resignation to the Board of Directors. The Corporate Governance and Nominating Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken. The Board of Directors will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The director who tenders his or her resignation will not participate in the Board of Directors’ decision.

     (c) Annual Election: Commencing with the 2009 Annual Meeting of Stockholders, directors shall be elected annually for terms expiring at the next annual meeting of stockholders and until their successors shall be duly elected and qualified, except that any director at the 2009 Annual Meeting of Stockholders whose term expires at the 2010 Annual Meeting of Stockholders or the 2011 Annual Meeting of Stockholders shall continue to hold office until the end of the term for which such director was elected and until such director’s successor shall be duly elected and qualified (subject to their earlier death, resignation, retirement, disqualification or removal). From and after the 2011 Annual Meeting of Stockholders, all directors will stand for election annually. If, for any cause, the Board of Directors shall not have been elected at an annual meeting of stockholders, they may be elected as soon thereafter convenient at a special meeting of stockholders called for that purpose in the manner provided in these Bylaws.

     (d) Vacancies: Newly Created Directorships — If the office of any director becomes vacant at any time by reason of death, resignation, retirement, disqualification, removal from office or otherwise, or if any new directorship is created by any increase in the authorized number of directors, a majority of the directors then in office, although less than a quorum, or the sole remaining director, may choose a successor to fill the newly created directorship, and the director so chosen shall hold office subject to the provisions of these Bylaws, until the next Annual Meeting of Stockholders or until his or her successor shall have been elected and qualified. At such next Annual Meeting the stockholders shall elect a director to fill the balance of the unexpired term of the director whose place was originally vacated or the term established by the Board pursuant to subsection (a) above.

     (e) Amendment: Notwithstanding Article XI of these Bylaws, no provision of this Section 3.02 may be amended or rescinded except by the affirmative vote of the holders of at least 75% of the stock of the Corporation entitled to vote, considered for the purpose as one class, or by a majority of the whole Board of Directors.

     Section 3.03. Annual Meeting. As soon as practicable after each annual election of directors, the Board of Directors shall meet at the same place as the annual meeting of shareholders or at the principal executive office of the Corporation, or at such other place previously designated by the Board of Directors, for the purpose of electing the officers of the Corporation and for the transaction of such other business as may come before the meeting.

     Section 3.04. Regular Meetings. Regular meetings of the Board of Directors shall be held from time to time at such time and place as may be fixed by resolution adopted by a majority of the total number of directors.

     Section 3.05. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, or by any two of the directors and shall be held from time to time at such time and place as may be designated in the notice of such meeting.

     Section 3.06. Notice of Meetings. No notice need be given of any annual or regular meeting of the Board of Directors. Notice of each special meeting of the Board of Directors shall be given by the Secretary who shall give at least three (3) days’ notice thereof by mail or at least twenty-four (24) hours’ notice thereof to each director by telephone, telegram or in person. Notice shall be effective upon dispatch of a letter or telegram (properly addressed to the director) or upon delivery of written or telephoned notice to a person at the regular business or residence address of the director even if such notice is not personally received by the director.

     Section 3.07. Waiver of Notice. Notice of any meeting of the Board of Directors may be waived either before, at or after such meeting in writing signed by each director so waiving notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purposes of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice.

     Section 3.08. Quorum. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless these Bylaws require a greater number.

     Section 3.09. Removal. Any director may be removed from office at any meeting of the stockholders, with or without cause; provided, however, that any director in a

class of directors may be removed from office at any meeting of the stockholders, but only for cause. If one or more directors be so removed, new director(s) may be elected at the same meeting

     Section 3.10. Committees of Directors.

     (a) The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate one or more committees in addition to the committees established pursuant to Article IV of these Bylaws, each to consist of one or more of the directors of the Corporation, which, to the extent provided in the resolution, may exercise the powers of the Board of Directors in management of the business and affairs of the Corporation and may authorize the corporate seal to be affixed to all papers that may require it. The Board of Directors shall elect the directors to serve on each Committee and may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined by the resolution adopted by the directors. The chairman of each committee shall act as secretary of the meeting and prepare minutes of proceedings where formal action is taken by the committee, and each committee shall report their actions and recommendations to the Board of Directors when required.

     (b) The provisions of Section 3.06 through 3.08 of these Bylaws with respect to notices of meetings and quorums shall also be applicable to meetings of committees, except as otherwise provided in the Bylaws or resolutions establishing a particular committee. Special meetings of any committee shall be called at the request of any member or by the President or Chairman of the Board.

     Section 3.11. Written Action. Any action required or permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if all directors or committee members consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Such action shall be deemed to have been taken upon the effective date appearing in said writing, notwithstanding the fact that some or all of the directors may have signed on a date other than the effective date.

     Section 3.12. Compensation. Directors who are not salaried officers of this Corporation may receive such fixed sum per Board or Committee meeting attended or fixed annual sum and such other forms of compensation as may be determined by resolution of the Board of Directors. All directors shall receive their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof. Any director may serve the Corporation in any other capacity and receive proper compensation therefor.

     Section 3.13. Conference Communications. Directors may participate in any meeting of the Board of Directors, or of any duly constituted committee thereof, by

means of a conference telephone conversation or other comparable communication technique whereby all persons participating in the meeting can hear and communicate to each other. For the purposes of establishing a quorum and taking any action at the meeting, such directors participating pursuant to this Section 3.13 shall be deemed present in person at the meeting; and the place of the meeting shall be the place of origination of the conference telephone conversation or other comparable communication technique.

     Section 3.14. Chairman of the Board. The non-employee directors of the Board of Directors shall elect from their number a Chairman of the Board. The Chairman shall be an independent non-employee director. The Chairman shall preside at all meetings of the directors and shall have such other duties as may be prescribed, from time to time, by the Board of Directors. The Chairman shall serve for a term ending (a) at the time determined by the Board of Directors at the time of election or (b) upon his or her earlier death, resignation, removal or disqualification as an independent director. The Chairman may be removed as Chairman at any time with or without cause by a majority of the non-employee directors. The Chairman of the Board shall not be deemed to be an officer of the Corporation as a result of such title.

ARTICLE IV.
Standing Committees

     Section 4.01. Standing Committees. The Corporation shall have such standing committees of the Board of Directors as are provided in Article IV of these Bylaws. The Chairman of each standing committee shall be appointed by vote of a majority of the whole Board of Directors. The provisions of Section 3.10 of the Bylaws shall govern all standing committees, except as may be otherwise provided in the Bylaw establishing the committee. Each standing committee shall perform the duties specified in these Bylaws and shall have such other responsibilities and authority as may from time to time be assigned by the Board of Directors.

     Section 4.02. Executive Committee.

     (a) Between sessions of the Board of Directors, the Executive Committee shall have, and may exercise, all of the powers of the Board of Directors in the management and affairs of the Corporation, including the power to authorize the seal of the Corporation to be affixed to all papers which may require it, except the Executive Committee shall have no power or authority to (i) adopt an agreement of merger or consolidation, (ii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, (iii) recommend to the stockholders a dissolution of the Corporation or revocation of a dissolution, or (iv) amend the Certificate of Incorporation or the Bylaws of the Corporation. The Executive Committee shall have the power and authority to declare a dividend and to authorize the issuance of stock.

     (b) At least one member of the Executive Committee shall be a director of the Corporation who is not an employee and no meeting of the Committee shall be deemed to have a quorum unless at least one such member is present. Action by the Executive Committee may be taken only by the unanimous vote of the members present at a meeting in which a quorum is present. The chief executive officer shall be a member of the Executive Committee and shall preside at its meetings in the absence of its Chairman.

     Section 4.03. Leadership Development and Compensation Committee. The Leadership Development and Compensation Committee shall provide a general review of the Corporation’s compensation and benefit plans to insure they meet corporate objectives. It shall perform such duties and responsibilities as may from time to time be assigned to it by the Board of Directors. All members of the Committee shall be directors who are not employees of the Corporation.

     Section 4.04. Finance Committee. The Finance Committee shall act in an advisory capacity and make its recommendations to the management of the Corporation and to the Board of Directors on corporate fiscal matters. It shall perform such duties and responsibilities as may from time to time be assigned to it by the Board of Directors.

     Section 4.05. Audit Committee.

     (a) The Audit Committee shall recommend to the whole Board of Directors the selection of independent certified public accountants to audit annually the books and records of this Corporation and shall review the activities and the reports of the independent certified public accountants and shall report the results of such review to the whole Board of Directors. The Audit Committee shall also monitor the internal audit controls of the Corporation.

     (b) The Audit Committee shall be comprised solely of directors independent of management and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment as a Committee member.

     Section 4.06. Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee shall review and make its recommendations to the whole Board of Directors regarding nominations of persons to serve on the Board of Directors, and shall have such other duties and responsibilities as may from time to time be assigned to it by the Board of Directors.

ARTICLE V.
Officers

     Section 5.01. Number. The officers of the Corporation shall consist of a President, a Treasurer and a Secretary, and, if elected, such additional officers as described in this Article V. The directors may designate one or more regional or divisional Presidents and Vice Presidents who shall not be officers of this Corporation. Any person may hold two or more offices except President and Vice President.

     Section 5.02. Election, Term of Office and Qualifications. At each annual meeting of the Board of Directors, all officers, from within or without their number, shall be elected; however, the Board may elect additional officers at any Board meeting. Such officers shall hold office until the next annual meeting of the directors or until their successors are elected and qualified or until such office is eliminated by a vote of the majority of all directors.

     Section 5.03. Removal and Vacancies. Any officer may be removed from office by a majority vote of the total number of directors with or without cause. A vacancy among the officers by death, resignation, removal, or otherwise may be filled for the unexpired term by the Board of Directors.

     Section 5.04. President. The President shall have such duties as may, from time to time be prescribed by the Board of Directors and may be designated by the Board of Directors as the Chief Executive Officer. In the absence of the Chairman of the Board the President, if also designated as CEO, shall preside at all meetings of the directors.

     Section 5.05. Chief Executive Officer. The Chief Executive Officer shall be the principal executive officer of the Corporation and shall be responsible for the general management, direction and control of all of the business and affairs of the Corporation. The Chief Executive Officer shall have such other authority and duties as the Board of Directors may prescribe. The Chief Executive Officer shall report to the Board of Directors and be responsible to them.

     Section 5.06. Chief Operating Officer. The Chief Operating Officer shall be responsible for the daily operations of the Corporation’s business and shall have such other authority and duties as the Board of Directors or the Chief Executive Officer may prescribe. The Chief Operating Officer shall report to the Chief Executive Officer if the Chief Executive Officer is not also serving as the Chief Operating Officer.

     Section 5.07. Vice Presidents. Each Vice President shall have such powers and shall perform such duties as may be prescribed by the Board of Directors or by the Chief Executive Officer. The following categories of Vice Presidents may be elected by the Board of Directors:

(i)	Executive Vice Presidents,
(ii)	Senior Vice Presidents, or
(iii)	Vice Presidents including Group Vice Presidents.

     Section 5.08. President Pro Tem. In the absence or disability of the President, the Board of Directors may appoint a President Pro Tem who shall have all the powers and duties of the President and shall serve during the aforesaid absence or disability.

     Section 5.09. Secretary. The Secretary shall be secretary of and shall attend all meetings of the stockholders and the Board of Directors and shall record the proceedings of such meetings in the minute book of the Corporation. The Secretary shall give proper notice of meetings of stockholders and Board of Directors. The Secretary shall keep the seal of the Corporation. The Secretary shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President or the Chairman.

     Section 5.10. Treasurer. The Treasurer or such person’s delegate shall keep accurate accounts of all moneys of the Corporation received or disbursed. The Treasurer shall have power to endorse for deposit all notes, checks and drafts received by the Corporation. The Treasurer shall disburse the funds of the Corporation as ordered by the directors, making proper vouchers therefor. The Treasurer shall render to the President and the Board of Directors whenever required an account of all his or her transactions as Treasurer and of the financial condition of the Corporation and shall perform such other duties as may from time to time be prescribed by the Board of Directors or by the President or the Chairman.

     Section 5.11. Controller. The duties of the Controller shall be to maintain adequate records and books of account and control of all assets, liabilities and transactions of this Corporation; to see that adequate audits thereof are currently and regularly made; and, in conjunction with other officers and department heads, to initiate and enforce adequate accounting measures and procedures. The Controller shall perform such other duties as the Board of Directors may from time to time prescribe or require. The Controller’s duties and powers shall extend to all subsidiary corporations.

     Section 5.12. Counsel. The Counsel shall be the legal adviser of the Corporation and shall receive such salary for his or her services as the Board of Directors may fix.

     Section 5.13. Duties of Other Officers. Assistant Vice Presidents, Assistant Secretaries, and Assistant Treasurers elected by the Board of Directors shall have the power and authority and may perform all the duties of a Vice President, the Secretary, or the Treasurer, respectively. The duties of such other officers and agents as the Board of Directors may designate shall be set forth in the resolution creating such office or by subsequent resolution.

     Section 5.14. Authority to Execute Agreements. The Chairman of the Board, President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Group Vice Presidents are hereby authorized to execute or cause to be executed in the name and on behalf of this Corporation, all contracts, agreements, deeds, mortgages,

bonds, options, leases, lease and other guarantees of the obligations of others, including subsidiary corporations and customers, stock transfer documents, and such other instruments as may be necessary or desirable in the conduct of the business of the Corporation; and said officers are further authorized to sign and affix, or cause to be signed and affixed, the seal of the Corporation on any instrument requiring the same, which seal shall be attested by the signature of the Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer.

     Section 5.15. Duties of Officers May be Delegated. In the case of the absence or disability of any officer of the Corporation or for any other reason deemed sufficient by the Board of Directors, it may delegate such officer’s powers or duties to any other officer or to any director during such absence or disability.

     Section 5.16. Compensation. The officers of the Corporation shall receive such compensation for their services as may be determined from time to time by resolution of the Board of Directors or by one or more committees to the extent so authorized from time to time by the Board of Directors.

ARTICLE VI.
Shares and Their Transfer

     Section 6.01. Certificates for Stock. The Corporation’s shares of stock shall be represented by certificates, provided that the Board of Directors may, subject to the limits imposed by law, provide by resolution or resolutions that some or all of any or all classes or series shall be uncertificated shares. Certificates for shares of stock of the Corporation shall be in such form as shall be prescribed by the Board of Directors. Certificates for such shares shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairperson of the Board, the President or a Vice President, and by the Secretary or an Assistant Secretary and the seal of the Corporation shall be affixed thereto. Uncertificated shares of the Corporation’s stock that are issued by the Corporation shall be evidenced by entries on the books and records of the Corporation established and maintained for such purpose. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate, or if uncertificated shares are to be issued pursuant to such exchange or transfer, no entry shall be made on the books and records of the Corporation relating to such exchange or transfer, until such certificate shall have been so cancelled, except in cases provided for in Section 6.06 below.

     Section 6.02. Issuance of Stock. The Board of Directors is authorized to cause to be issued shares of the Corporation up to the full amount authorized by the Certificate of Incorporation in such amounts and for such consideration as may be determined by the Board of Directors.

     Section 6.03. Partly Paid Stock. The Corporation may issue the whole or any part of its stock as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each certificate issued to represent any such partly paid stock, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid stock, the Corporation shall declare a dividend upon partly paid stock of the same class, but only upon the basis of the percentage of the consideration actually paid thereon. The Board of Directors may, from time to time, demand payment, in respect of each share of stock not fully paid, of such sum of money as the necessities of the business may, in the judgment of the Board of Directors, require, not exceeding in the whole the balance remaining unpaid on such stock, and such sum so demanded shall be paid to the Corporation at such times and by such installments as the directors shall direct. The directors shall give written notice of the time and place of such payments, which notice shall be mailed at least 30 days before the time for such payment, to each holder of or subscriber for stock which is not fully paid at such person’s last known post office address or such person’s last known address on the stock registry.

     Section 6.04. Transfer of Stock. Transfer of stock on the books of the Corporation may be authorized only by the registered holder, the stockholder’s legal representative or the stockholder’s duly authorized attorney-in-fact and upon surrender of the certificate or the certificates for such stock. The Corporation may treat as the absolute owner of stock of the Corporation the person or persons in whose name stock is registered on the books and records of the Corporation. The Board of Directors may appoint one or more transfer agents, who shall keep the stock ledger and transfer book for the transfer of stock of the Corporation, and one or more registrars, and may require all certificates of stock to bear the signature of such transfer agents and of such registrars.

     Section 6.05. Facsimile Signatures. Whenever any certificate is countersigned by a transfer agent or by a registrar other than the Corporation or its employee, then the signatures of the officers or agents of the Corporation may be a facsimile. Where a certificate is to bear the signature of a transfer agent and a registrar, the signature of one, but not both, may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on any such certificate shall cease to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation as though the person who signed such certificate or whose facsimile signature or signatures had been placed thereon were such officer, transfer agent or registrar at the date of issue.

     Section 6.06. Lost, Stolen, Destroyed or Mutilated Certificates. The Corporation may issue a new stock certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen, destroyed or mutilated, or if the Board of Directors has designated that such stock no longer be certificated, by recording the ownership of such shares on the books and records of the Corporation maintained for such purpose. The Board of Directors may require the owner of the allegedly lost, stolen or destroyed certificate, or the owner’s legal representatives, to give the Corporation such bond or such surety or sureties as the board of directors, in its sole

discretion, deems sufficient to indemnify the Corporation against any claim that may be made against it on account of the alleged loss, theft or destruction or the issuance of such new certificate and, in the case of a certificate alleged to have been mutilated, to surrender the mutilated certificate.

ARTICLE VII.
Dividends, Surplus, Etc.

     Section 7.01. Dividends. The Board of Directors may declare dividends on its capital stock from the Corporation’s surplus, or if there be none, out of its net profits for the current fiscal year, and/or the preceding fiscal year in such amounts as in its opinion the condition of the affairs of the Corporation shall render it advisable unless otherwise restricted by law.

     Section 7.02. Use of Surplus, Reserve. The Board of Directors may use any of the Corporation’s property or funds, unless such would cause an impairment of capital, in purchasing any of the stock, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation. The Board of Directors may from time to time set aside from corporate surplus or net profits such sums as it deems proper as a reserve fund for any purpose.

ARTICLE VIII.
Books and Records, Audit, Fiscal Year

     Section 8.01. Books and Records. The Board of Directors of the Corporation shall cause to be kept: (a) a share ledger which shall be in charge of the Secretary; (b) records of the proceedings of stockholders and directors: and (c) such other records and books of account as shall be necessary and appropriate to the conduct of the corporate business.

     Section 8.02. Audit. The Board of Directors shall cause the records and books of account of the Corporation to be audited at least once for each fiscal year and at such other times as it may deem necessary or appropriate.

     Section 8.03. Fiscal Year. The fiscal year of the Corporation shall end on the last Saturday in February of each year.

ARTICLE IX.
Indemnification

     Section 9.01. Statutory Indemnification. The Corporation shall indemnify any director or officer of the Corporation and may indemnify any employee or agent of the Corporation in the discretion of the Board of Directors for such liabilities in such manner under such circumstances and to such extent as permitted by Section 145 of the Delaware General Corporation Law or its successor, as now enacted or hereafter amended.

     Section 9.02. Additional Indemnification. In addition to that authorized in Section 9.01 herein, the Corporation shall indemnify as follows:

     (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) , judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding (even if such wrongful act arose out of neglect or breach of duty not involving willful misconduct) , so long as such person did not act out of personal profit or advantage which was undisclosed to the Corporation and such person acted in a manner he or she reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

     (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, including amounts paid in settlement, (even if such wrongful act arose out of neglect or breach of duty not involving willful misconduct) , so long as such person did not act out of personal profit or advantage which was undisclosed to the Corporation and such person acted in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation.

     Section 9.03. Procedure for Indemnification.

     (a) The Corporation shall be required to make a determination that indemnification under this Article is proper in the circumstances because the person being indemnified has met the applicable standards of conduct set forth in this Article. Such determination shall be made (1) by a majority vote of the directors who are not parties to the action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by a majority vote of such directors, even

though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders of the Corporation. If a court orders indemnification of the officer or director, no such outside determination is necessary.

     (b) Expenses incurred by any person who shall have a right of indemnification under this Article in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action provided that a determination has not been made by independent legal counsel (who may be the regular counsel for the Corporation) in a written opinion that it is reasonably likely that the person has not met the applicable standards of conduct for indemnification and provided that the Corporation has received an undertaking by or on behalf of the person to repay such expenses unless it shall ultimately be determined that such person is entitled to be indemnified by the Corporation pursuant to this Article.

     Section 9.04. Vested, Non-Exclusive Contract Right; Survival.

     (a) The indemnification provided by this Article is in addition to and independent of and shall not be deemed exclusive of any other rights to which any person may be entitled under any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person; provided that any indemnification realized other than under this Article shall apply as a credit against any indemnification provided by this Article.

     (b) The Corporation may provide indemnification under this Article to any employee or agent of the Corporation or of any other corporation of which the Corporation owns or controls or at the time owned or controlled directly or indirectly a majority of the shares of stock entitled to vote for election of directors or to any director, officer, employee or agent of any other corporation, partnership, joint venture, trust or other enterprise in which the Corporation has or at the time had an interest as an owner, creditor or otherwise, if and whenever the Board of Directors of the Corporation deems it in the best interest of the Corporation to do so.

     (c) The Corporation may, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons whom the Corporation shall have power to indemnify under said law from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law, if and whenever the Board of Directors of the Corporation deems it to be in the best interest of the Corporation to do so.

     (d) The provisions of this Article IX shall be deemed to be a contract between the Corporation and each director and officer who serves in such capacity at any time while this Article IX is in effect, and any repeal or amendment of this Article IX shall not

adversely affect any right or protection of any person granted pursuant hereto then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. Neither the repeal nor amendment of this Article IX, nor the adoption of any provision of the Certificate of Incorporation inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any cause of action, suit or claim that would accrue or arise, prior to such repeal, amendment or adoption of an inconsistent provision.

     Section 9.05. Subsidiary Corporations. For purposes of this Article and indemnification hereunder, any person who is or was a director or officer of any other corporation of which the Corporation owns or controls or at the time owned or controlled directly or indirectly a majority of the shares of stock entitled to vote for election of directors of such other corporation shall be conclusively presumed to be serving or to have served as such director or officer at the request of the Corporation.

ARTICLE X.
Miscellaneous

     Section 10.01. Periods of Time. During any period of time prescribed by these Bylaws, the date from which the designated period of time begins to run shall not be included, and the last day of the period so computed shall be included.

     Section 10.02. Voting Securities Held by the Corporation. Unless otherwise ordered by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the Corporation (a) to attend and to vote at any meeting of security holders of other corporations in which the Corporation may hold securities; (b) to execute any proxy for such meeting on behalf of the Corporation; or (c) to execute a written action in lieu of a meeting of such other corporation on behalf of the Corporation. At such meeting, by such proxy or by such writing in lieu of meeting, the Chief Executive Officer shall possess and may exercise any and all rights and powers incident to the ownership of such securities that the Corporation might have possessed and exercised if it had been present. The Board of Directors may, from time to time, confer like powers upon any other person or persons.

     Section 10.03. Purchase and Sale of Securities. Unless otherwise ordered by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the Corporation to purchase, sell, transfer or encumber any and all securities of any other corporation owned by the Corporation and may execute and deliver such documents as may be necessary to effectuate such purchase, sale, transfer or encumbrance. The Board of Directors may, from time to time, confer like powers upon any other person or persons.

ARTICLE XI.
Amendments

     Section 11.01. These Bylaws may be amended, altered or repealed at any meeting of the directors by a vote of the majority of the whole Board of Directors or at any meeting of the shareholders at which a quorum, as defined in Article II, Section 2.04 of these Bylaws, is present by the vote of a majority of the shares voting at the meeting.

EX-10.1

EXHIBIT 10.1

SUPERVALU INC.
2002 STOCK PLAN

AMENDMENT NO. 1
TO
RESTRICTED STOCK UNIT AWARD AGREEMENT

     This Amendment No. 1 (this “Amendment”) is made and entered into as of the 16th day of April, 2010, by and between SUPERVALU INC., a corporation organized and existing under the laws of the State of Delaware (the “Company”), and Jeffrey Noddle (“Mr. Noddle”), an individual who is employed by the Company as its Executive Chairman, in order to amend that certain Restricted Stock Unit Award Agreement (the “Original Agreement”) made and entered into as of the 12th day of October 2006, by and between the Company and Mr. Noddle.

RECITALS

     WHEREAS, pursuant to the Agreement, the Board of Directors of the Company (the “Board”) provided a retention incentive award for Mr. Noddle in the form of restricted stock units (“RSUs”) under the Company’s 2002 Stock Plan (the “Plan”), that vest in installments after the lapse of specified time periods subject to the satisfaction of certain conditions; and

     WHEREAS, the Board has now determined, in light of Mr. Noddle’s retirement from the Company and because the objectives of the Agreement have been met, that the unvested RSUs under the Agreement shall vest on June 24, 2010, the effective date of Mr. Noddle’s retirement, subject to the terms and conditions of the Agreement as amended hereby;

     NOW THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

          1. Amendment of Original Agreement

     (a) Section 2(a) of the Original Agreement is hereby amended in its entirety to read as follows:

     “(a) Scheduled Vesting. Subject to all of the terms and conditions of this Agreement, including but not limited to the “Conditions to Vesting” set forth in Section 2(b) below, a portion of the RSUs shall vest on the each of the dates set forth in the table below (each a “Vesting Date”), in such a manner that the cumulative amount of RSUs that have vested on each Vesting Date shall correspond to the percentage amounts shown for such Vesting Date, provided Mr. Noddle is in the employ of the Company on the applicable Vesting Date.

	Percentage of
Date	RSUs Vested
October 12, 2009		25	%
June 24, 2010		100	%

     (b) Section 2(b)(ii) of the Original Agreement is hereby amended in its entirety to read as follows:

     “(ii) Adjustments/Forfeiture Based on Stock Value. On each Vesting Date, the Company shall determine the average of the fair market values of its Common Stock on each trading day that has occurred during the preceding ninety (90) calendar days. Such average shall be determined by taking the aggregate of the average of the opening and closing sale prices of the Company’s Common Stock as reported on the New York Stock Exchange for each day on which the New York Stock Exchange was open for trading during such ninety day period and on which the Company’s Common Stock was permitted to be traded, and dividing the result by the number of such days. The result so determined shall be referred to herein as the “Average FMV” for such Vesting Date.

1

     If the Average FMV determined as of the Vesting Date is less than $32.77 (the “Reference Value”), the amount of RSUs scheduled to vest on that date shall be reduced by an amount equal to the percentage difference between the Reference Value and such Average FMV, and the amount of RSUs so reduced shall be shall be forfeited and Mr. Noddle shall have no rights with respect to same.”

     (c) Section 2(b)(iv) of the Original Agreement is hereby deleted in its entirety, and Section 2(b)(v) of the Original Agreement is hereby renumbered as Section 2(b)(iv).

     (d) Section 4(a) of the Original Agreement is hereby amended in its entirety to read as follows:

     “(a) If all or a portion of the RSUs vest pursuant to Subsection 2(a) or 2(b) above, the Company shall make payment to Mr. Noddle no later than the 30th day following the date on which such RSUs vest by issuing one share of Common Stock for each RSU that has vested. Issuance shall be in book entry or certificate form, registered in the name of Mr. Noddle.”

          2. General Provisions

     (a) This Amendment shall be construed in connection with and as part of the Agreement, and except as modified and expressly amended by this Amendment, all terms, conditions and covenants contained in the Agreement are hereby ratified and shall be and remain in full force and effect.

     (b) The validity, construction and effect of this Amendment, and any rules and regulations relating to this Amendment, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

     (c) The headings in this Amendment are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

     IN WITNESS WHEREOF, the Company and Mr. Noddle have signed this Agreement as of the 16th day of April, 2010.

SUPERVALU INC.
By:	/s/ David E. Pylipow	/s/ Jeffrey Noddle
	David E. Pylipow	Jeffrey Noddle
	Its: Executive Vice President,
	Human Resources

2

EX-10.2

EXHIBIT 10.2

SUPERVALU INC.
2007 STOCK PLAN

STOCK OPTION AGREEMENT

This agreement is made and entered into as of the grant date indicated below (the “Grant Date”), by and between SUPERVALU INC. (the “Company”) and the individual whose name appears below (“Optionee”).

The Company has established the 2007 Stock Plan (the “Plan”), under which key employees of the Company and its Affiliates may be granted Options to purchase shares of the Company’s common stock. Optionee has been selected by the Company to receive an Option subject to the provisions of this agreement. Capitalized terms that are used in this agreement, that are not defined, shall have the meanings ascribed to them in the Plan.

In consideration of the foregoing, the Company and Optionee hereby agree as follows:

1.	Option Grant. The Company hereby grants to Optionee, subject to Optionee’s acceptance hereof, the right and option to purchase the number of Shares indicated below at the exercise price per Share indicated below (the “Exercise Price”), effective as of the Grant Date. The Option has been designated as a Non-Qualified Stock Option (“NQ”) for tax purposes, the consequences of which are set forth in the prospectus that describes the Plan.
2.	Acceptance of Option and Stock Option Terms and Conditions. The Option is subject to and governed by the Stock Option Terms and Conditions (“Terms and Conditions”) attached hereto, which is incorporated in the terms and provisions of the Plan. To accept the Option, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Optionee must sign and return a copy of this agreement to the Company within sixty (60) days after the Grant Date. By so doing, Optionee acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Optionee has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.
3.	Vesting, Exercise Rights and Expiration. Except as otherwise provided in the accompanying Terms and Conditions: (i) twenty-five percent (25%) of the Option shall vest in four (4) equal annual installments on each of the first four anniversaries of the Grant Date, (ii) the vested portion of the Option may be exercised in whole or part, and (iii) the Option will expire on the expiration date indicated below (the “Expiration Date”).

Option Number:	%%OPTION_NUMBER%-%
Grant Date:	%%OPTION_DATE,’Month DD, YYYY’%-%
Number of Shares:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Option Price:	%%OPTION_PRICE,’$999,999,999.99’%-%
Expiration Date:	%%EXPIRE_DATE_PERIOD1,’Month DD, YYYY’%-%

SUPERVALU INC.	OPTIONEE:
[_____]	%%FIRST_NAME%-% %%LAST_NAME%-%
[Title]	%%ADDRESS_LINE_1%-%
	%%CITY%-% %%STATE%-% %%ZIPCODE%-%

1

SUPERVALU INC.
2007 STOCK PLAN

STOCK OPTION TERMS AND CONDITIONS
(FOR EMPLOYEES)

These Stock Option Terms and Conditions (“Terms and Conditions”) apply to the Option granted to you under the Plan, pursuant to the Stock Option Agreement (the “Agreement”) to which this document is attached. Capitalized terms that are used in this document, but are not defined, shall have the meanings ascribed to them in the Plan or the attached Agreement. See Section 20 for a list of defined terms.

1. Vesting and Exercisability. The Option shall vest twenty-five percent (25%) in four (4) equal annual installments on each of the first four anniversaries of the Grant Date.

The vested portion of the Option may be exercised at any time, or from time to time, to purchase Shares. If in any year the full amount of Shares that may be purchased pursuant to the vested portion of the Option is not purchased, the remaining amount of such Shares shall be available for purchase during the remainder of the term of the Option. The term of the Option shall be for a period of seven (7) years from the Grant Date, terminating at the close of business on the Expiration Date or such shorter period as is provided for herein.

2. Manner of Exercise. Except as provided in Section 7 below, you cannot exercise the Option unless at the time of exercise you are an employee of the Company or an Affiliate. Prior to your death, only you may exercise the Option. You may exercise the Option as follows:

a)

By delivering a “Notice of Exercise of Stock Option” to the Company at its principal office, attention: Corporate Secretary, stating the number of Shares being purchased and accompanied by payment of the full purchase price for such Shares (determined by multiplying the Exercise Price by the number of Shares to be purchased). Note: In the event the Option is exercised by any person other than you pursuant to any of the provisions of Section 7 below, the Notice must be accompanied by appropriate proof of such person’s right to exercise the Option; or

b)

By entering an order to exercise the Option using E*TRADE’s website.

3. Method of Payment. The full purchase price for the Shares to be purchased upon exercise of the Option must be paid as follows:

a)	By delivering directly to the Company, cash or its equivalent payable to the Company;
b)	By delivering indirectly to the Company, cash or its equivalent payable to the Company through E*TRADE’s website;
c)	By delivering directly to the Company Shares having a Fair Market Value as of the exercise date equal to the purchase price (commonly known as a “Stock Swap”); or
d)	By delivering directly to the Company the full purchase price in a combination of cash and Shares.

You shall represent and warrant in writing that you are the owner of the Shares so delivered, free and clear of all liens, encumbrances, security interests and restrictions. To the extent that you possess Shares in certificated form, you shall duly endorse in blank all certificates delivered to the Company.

4. Delivery of Shares. You shall not have any of the rights of a stockholder with respect to any Shares subject to the Option until such Shares are purchased by you upon exercise of the Option. Such Shares shall then be issued and delivered to you by the Company as follows:

a) In the form of a stock certificate registered in your name or your name and the name of another adult person (twenty-one (21) years of age or older) as joint tenants, and mailed to your address; or

2

b) In “book entry” form, that is, registered with the Company’s stock transfer agent, in your name or your name and the name of another adult person (twenty-one (21) years of age or older) as joint tenants, and sent by electronic delivery to your brokerage account.

The Company will not deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such fractional Share.

5. Withholding Taxes. You are responsible for the payment of any federal, state, local or other taxes that are required to be withheld by the Company upon exercise of the Option and you must promptly remit such taxes to the Company. You may elect to remit these taxes by:

a)	Delivering directly to the Company, cash or its equivalent payable to the Company;
b)	Delivering indirectly to the Company, cash or its equivalent payable to the Company through E*TRADE’s website;
c)	Having the Company withhold a portion of the Shares to be issued upon exercise of the Option having a Fair Market Value as of the exercise date equal to the amount of federal and state income tax required to be withheld upon such exercise (commonly referred to as a “Tax Swap” or “Stock for Tax”); or
d)	Delivering directly to the Company, Shares, other than the Shares issuable upon exercise of the Option, having a Fair Market Value as of the exercise date equal to such taxes.

You shall represent and warrant in writing that you are the owner of the Shares so delivered, free and clear of all liens, encumbrances, security interests and restrictions. To the extent that you possess Shares in certificated form, you shall duly endorse in blank all certificates delivered to the Company.

6. Change in Control.

a)	If, within two (2) years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, the unvested portion of the Option shall immediately vest and the Option shall become immediately exercisable in full and remain exercisable for one (1) year beginning on the date of your termination of employment. If the Option is replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement option.
b)	If, in the event of a Change in Control, and to the extent the Option is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of the Option at the time of the Change in Control, then the unvested portion of the Option shall immediately vest and the Option shall become immediately exercisable in full upon the Change in Control.
c)	In the discretion of the Committee and notwithstanding subsection (b) above or any other provision, the Option (whether or not exercisable) may be cancelled at the time of the Change in Control in exchange for cash, property or a combination thereof that is determined by the Committee to be at least equal to the excess (if any) of the value of the consideration that would be received in such Change in Control by the holders of Common Stock, over the Exercise Price for the Option. For purposes of clarification, by operation of this provision Options that would not yield a gain at the time of the Change in Control under the aforementioned equation are subject to cancellation without consideration. Furthermore, the Committee is under no obligation to treat Options and/or holders of Options uniformly and has the discretionary authority to treat Options and/or holders of Options disparately.
d)	If in the event of a Change in Control and to the extent that this Option is assumed by any successor corporation, affiliate thereof, person or other entity, or is replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this Option at the time of the Change in Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this Option, then the assumed Option or such substitute therefor shall remain outstanding and be governed by its respective terms.

7. Transferability. The Option shall not be transferable other than by will or the laws of descent and distribution. More particularly, the Option may not be assigned, transferred, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted

3

assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to these provisions, or the levy of an execution, attachment or similar process upon the Option, shall be void.

You may designate a beneficiary or beneficiaries to exercise your rights with respect to the Option upon your death. In the absence of any such designation, benefits remaining unpaid at your death shall be paid to your estate.

8. Effect of Termination of Employment. Following the termination of your employment with the Company or an Affiliate for any of the reasons set forth below, your right to exercise the Option, as well as that of your beneficiary or beneficiaries, shall be as follows:

a)

Voluntary or Involuntary. If your employment is terminated voluntarily or involuntarily for any reason other than retirement, death or permanent disability, you may exercise the Option prior to its Expiration Date, at any time within a period of up to one (1) year after such termination of employment, to the full extent of the number of Shares you were entitled to purchase under that portion of the Option which was vested as of the date of termination of your employment.

b)

Retirement. You shall be deemed to have retired, solely for purposes of these Terms and Conditions and the attached Agreement, in the event that your employment terminates for any reason other than death or disability and you are at least fifty-five (55) years of age.

(i)

If you retire and you have completed ten (10) or more years of service with the Company or an Affiliate, the unvested portion of the Option shall immediately vest in full. Thereafter, you may exercise the Option at any time prior to its Expiration Date, to the full extent of the Shares covered by the Option that were not previously purchased.

(ii)

If you retire and you have completed less than ten (10) years of service with the Company or an Affiliate, you may exercise the Option prior to its Expiration Date, at any time within a period of up to one (1) year after the date of your retirement, to the full extent of the number of Shares you were entitled to purchase under that portion of the Option which was vested as of the date of your retirement.

c) Death Prior to Age 55. If your death occurs before you attain the age of fifty-five (55), while you are employed by the Company or an Affiliate, or within three (3) months after the termination of your employment, the unvested portion of the Option shall immediately vest in full. Thereafter, the Option may be exercised prior to its Expiration Date, by your beneficiary(ies), or a legatee(s) under your last will, or your personal representative(s) or the distributee(s) of your estate, to the full extent of the Shares covered by the Option that were not previously purchased:

(i)	At any time within a period of up to one (1) year after your death if such occurs while you are employed, or
(ii)	At any time within a period of up to one (1) year following the termination of your employment if your death occurs within three (3) months of your termination of employment.

d) Death After Age 55. If your death occurs after you attain the age of fifty-five (55), while you are employed by the Company or an Affiliate, or within three (3) months after the termination of your employment, the unvested portion of the Option shall immediately vest in full. Thereafter, the Option may be exercised prior to its Expiration Date, by your beneficiary(ies), or a legatee(s) under your last will, or your personal representative(s) or the distributee(s) of your estate, to the full extent of the Shares covered by the Option that were not previously purchased:

(i) At any time, if you have completed ten (10) or more years of service with the Company or an Affiliate; or

4

(ii) If you have completed less than ten (10) years of service with the Company or an Affiliate, then at any time within a period of up to one (1) year after the date of your death if such occurs while you are employed, or within a period of up to one (1) year after the date of termination of your employment if your death occurs within three (3) months of your termination of employment.

e)	Disability Prior to Age 55. If your employment terminates before you attain the age of fifty-five (55), as a result of a permanent disability, the unvested portion of the Option shall immediately vest in full. Thereafter, the Option may be exercised prior to its Expiration Date, by you or by your personal representative(s), at any time within a period of up to one (1) year after your employment terminates due to such permanent disability, to the full extent of the Shares covered by the Option that were not previously purchased.
	You shall be considered permanently disabled if you suffer from a medically determinable physical or mental impairment that renders you incapable of performing any substantial gainful employment, and is evidenced by a certification to such effect by a doctor of medicine approved by the Company. In lieu of such certification, the Company shall accept, as proof of permanent disability, your eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.
f)	Disability After Age 55. If your employment terminates as a result of a permanent disability after you attain the age of fifty-five (55), the unvested portion of the Option shall immediately vest in full. Thereafter, the Option may be exercised prior to its Expiration Date, by you or by your personal representative(s), to the full extent of the Shares covered by the Option that were not previously purchased:

(i)	At any time, if you have completed ten (10) or more years of service with the Company or an Affiliate; or
(ii)	If you have completed less than ten (10) years of service with the Company or an Affiliate, then at any time within a period of one (1) year after your employment terminates due to such permanent disability.

You shall be considered permanently disabled if you suffer from a medically determinable physical or mental impairment that renders you incapable of performing any substantial gainful employment, and is evidenced by a certification to such effect by a doctor of medicine approved by the Company. In lieu of such certification, the Company shall accept, as proof of permanent disability, your eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

g)

Change in Duties/Leave of Absence. The Option shall not be affected by any change of your duties or position or by a temporary leave of absence approved by the Company, so long as you continue to be an employee of the Company or of an Affiliate.

9. Repurchase Rights. If you exercise the Option within six (6) months prior to or three (3) months after the date your employment with the Company or an Affiliate is terminated for Cause, or if you breach any of the covenants contained in Section 10 below, the Company shall have the right and option to repurchase from you, that number of Shares which is equal to the number you purchased upon such exercise(s) within such time periods, and you agree to sell such Shares to the Company.

The Company may exercise its repurchase rights by depositing in the United States mail a written notice addressed to you at the latest mailing address for you on the records of the Company (i) within thirty (30) days following the termination of your employment for the repurchase of Shares purchased prior to such termination, or (ii) within thirty (30) days after any exercise of the Option for the repurchase of Shares purchased after your termination of employment. Within thirty (30) days after the mailing of such notice, you shall deliver to the Company the number of Shares the Company has elected to repurchase and the Company shall pay to you in cash, as the repurchase price for such Shares upon their delivery, an amount which shall be equal to the purchase price paid by you for the Shares. If you have disposed of the Shares, then in lieu of delivering an equivalent number of Shares to the Company, you must pay to the Company the amount of gain realized by you from the disposition of the Shares exclusive of any taxes due and payable or commissions or fees arising from such disposition.

5

If the Company exercises its repurchase option prior to the actual issuance and delivery to you of any Shares pursuant to the exercise of the Option, no Shares need be issued or delivered. In lieu thereof, the Company shall return to you the purchase price you tendered upon the exercise of the Option to the extent that it was actually received from you by the Company.

Following the occurrence of a Change in Control, the Company shall have no right to exercise the repurchase rights set forth in this Section 9.

10. Employee Covenants. In consideration of benefits described elsewhere in these Terms and Conditions and the attached Agreement, and in recognition of the fact that, as a result of your employment with the Company or any of its Affiliates, you have had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources and money to obtain or develop and which have significant value to the Company and its Affiliates, you agree for the benefit of the Company and its Affiliates, and as a material condition to your receipt of benefits described elsewhere in these Terms and Conditions and the attached Agreement, as follows:

a)	Non-Disclosure of Confidential Information. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one (1) or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors, or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliate, as applicable, and must be returned to the Company or such Affiliate immediately upon termination of your employment.
b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of the their businesses depends upon the the ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on

6

your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.

d)

Non-Solicitation of Employees. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.

e)

Non-Competition. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 10(e) shall not apply in the event of a Change in Control as described in Section 6 above.

i)

The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.

ii)

To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

f)	No Disparaging Statements. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, the Option, and any other unexercised options issued under the Plan or any other stock option plans of the Company will immediately terminate and the Company shall have the right to exercise any and all of the rights described above including the provisions articulated in Section 9.
h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions should be held to be unenforceable, invalid or illegal

7

under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions shall not be affected or impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to the attached Agreement or the breach of any of these Terms and Conditions, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to by you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section 11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10. The agreement to arbitrate shall continue in full force and effect despite the expiration or termination of your Option or your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or any of its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

12. Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares covered by the Option such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under these Terms and Conditions and the attached Agreement, then the Committee administering the Plan shall, in such manner as it may deem equitable, adjust any or all of the number and type of Shares (or other securities or other property) covered by the Option and the Exercise Price of the Option.

13. Severability. In the event that any portion of these Terms and Conditions shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of these Terms and Conditions.

14. No Right to Employment. Nothing in these Terms and Conditions or the attached Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss you from employment, free from any liability or any claim under these Terms and Conditions or the attached Agreement, unless otherwise expressly provided in these Terms and Conditions or the attached Agreement.

15. Reservation of Shares. The Company shall at all times during the term of the Option reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of these Terms and Conditions and the attached Agreement.

16. Securities Matters. The Company shall not be required to deliver any Shares until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

8

17. Headings. Headings are given to the sections and subsections of these Terms and Conditions and the attached Agreement 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 these Terms and Conditions or the attached Agreement or any provision hereof or thereof.

18. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of these Terms and Conditions and the attached Agreement.

19. Notice. For purpose of the Agreement and these Terms and Conditions, notices and all other communications provided for in the Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a)

Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.

b)

Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring, and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

20. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in these Terms and Conditions or the attached Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;

provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report, or (B) in reliance upon the express written consent of the Company’s counsel.

9

In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 19(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.

b) Change in Control shall be deemed to have occurred upon any of the following events:

i)	the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (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 in 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;
ii)	the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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 in Control or engage in a proxy or other control contest); or
iv)	such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one (1) or more of the following events occurring during the two-year period following the CIC Date:

i)	your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date, or (B) the highest amount in effect at any time thereafter;
ii)	your Target Bonus is reduced below the Target Bonus as it existed before the CIC Date;
iii)	your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date; or
iv)	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;

provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.

10

e)	Notice of Termination shall mean a written notice which shall indicate the specific provision in these Terms and Conditions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.
f)	Target Bonus shall mean the target amount of bonus established under the annual bonus plan for you for the year in which the termination of employment occurs. When the context requires, it shall also mean the target amount of bonus established for any earlier or later year.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

11

EX-10.3

EXHIBIT 10.3

SUPERVALU INC.
2007 STOCK PLAN

RESTRICTED STOCK AWARD AGREEMENT

     This agreement is made and entered into as of the grant date indicated below (the “Grant Date”), by and between SUPERVALU INC. (the “Company”), and the individual whose name appears below (“Recipient”).

     The Company has established the 2007 Stock Plan (the “Plan”), under which key employees of the Company may be granted Awards of Restricted Stock of the Company. Recipient has been selected by the Company to receive an Award of Restricted Stock subject to the provisions of this agreement. Capitalized terms that are used in this agreement, that are not defined, shall have the meanings ascribed to them in the Plan.

     In consideration of the foregoing, the Company and Recipient hereby agree as follows:

     1. Grant. The Company hereby grants to Recipient, subject to Recipient’s acceptance hereof, an Award of Restricted Stock for the number of Shares indicated below, effective as of the Grant Date.

     2. Acceptance of Award of Restricted Stock and Restricted Stock Award Terms and Conditions. The Award of Restricted Stock is subject to and governed by the Restricted Stock Award Terms and Conditions (“Terms and Conditions”) attached hereto, which is incorporated herein and made a part hereof, and the terms and provisions of the Plan. To accept the Award of Restricted Stock, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Recipient must sign and return a copy of this agreement to the Company within sixty (60) days after the Grant Date. By so doing, Recipient acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Recipient has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

     3. Vesting. The Restricted Stock Award shall vest in four (4) equal annual installments of twenty-five percent (25%) on each of the first four anniversaries of the Grant Date.

Grant Date	Number of Shares
[                    ]	[                    ]

SUPERVALU INC.		RECIPIENT:
By:
	[                    ] [Title]	[Recipient] [Address]

SUPERVALU INC.
2007 STOCK PLAN
RESTRICTED STOCK AWARD TERMS AND CONDITIONS

These Restricted Stock Award Terms and Conditions (“Terms and Conditions”) apply to the Award of Restricted Stock granted under the 2007 Stock Plan (the “Plan”), pursuant to the Restricted Stock Award Agreement (the “Agreement”) to which this document is attached. Capitalized terms that are used in this document, but are not defined, shall have the meanings ascribed to them in the Plan or the attached Agreement. See Section 21 for a list of defined terms.

1. Award of Restricted Stock. SUPERVALU INC. (the “Company”) hereby grants to you an Award of Restricted Stock for the number of Shares set forth in the attached Agreement. The Award is effective as of the Grant Date.

2. Rights with Respect to the Shares. With respect to the Shares, you shall be entitled to exercise the rights of a stockholder of the Company’s Common Stock, $1.00 par value (“the Common Stock”), including the right to vote the Shares and the right to receive cash dividends thereon as provided in Section 9 hereof, unless and until the Shares are forfeited pursuant to Section 5 hereof. Your rights with respect to the Shares shall remain forfeitable at all times prior to the date on which such rights vest, and the restrictions with respect to the Shares lapse, in accordance with Section 3, Section 4 or Section 5 hereof.

3. Vesting. Subject to the Terms and Conditions, the Shares shall vest in full and the restrictions on the Shares shall lapse on the date and in the amount set forth in the attached Agreement if you remain continuously employed by the Company or any of its Affiliates until the vesting date.

4. Change in Control.

a)	If, within two years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, then you shall become immediately and unconditionally vested in all the Shares and the restrictions with respect to all the Shares shall lapse. If this Award of Restricted Stock is replaced pursuant to subsection (c) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement grant.
b)	If, in the event of a Change in Control, and to the extent this Award of Restricted Stock is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of this Award of Restricted Stock at the time of the Change in Control, then you shall become immediately and unconditionally vested in all the Shares and the restrictions with respect to all the Shares shall lapse upon the Change in Control.
c)	If in the event of a Change in Control and to the extent that this Award of Restricted Stock is assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this Award of Restricted Stock at the time of the Change in Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this Award of Restricted Stock, then the assumed Award of Restricted Stock or such substitute therefor shall remain outstanding and be governed by its respective terms.

5. Forfeiture; Early Vesting in Event of Death, Disability or Retirement. If you cease to be an employee of the Company or any of its Affiliates prior to the vesting of the Shares pursuant to Section 3 or Section 4 hereof for any reason other than your death, your Disability (as defined below) or your Retirement (as defined below), then your rights to all of the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote such Shares and the right to receive cash dividends on such Shares, unless otherwise determined by the Committee administering the Plan. On the date of your death, the date on which your Disability commences or the date you terminate employment by reason of

Retirement, you or your estate shall become immediately and unconditionally vested in all of the Shares for which vesting has not occurred and the restrictions with respect to all such unvested Shares shall lapse; provided, however, that the vesting upon Retirement of all unvested Shares shall require the approval of the Committee administering the Plan. No transfer by will or the applicable laws of descent and distribution of any Shares which vest by reason of your death shall be effective to bind the Company unless the Committee administering the Plan shall have been furnished with written notice of such transfer and a copy of the will or such other evidence as the Committee may deem necessary to establish the validity of the transfer.

For purposes of this Section 5, “Disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company and “Retirement” is defined as severance of employment after age 55, with ten (10) or more years of service with the Company or an Affiliate thereof.

6. Restrictions on Transfer. Except as may otherwise be determined by the Committee, until the Shares vest pursuant to Section 3, Section 4 or Section 5 hereof, none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by you, and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Shares.

7. Issuance and Custody of Agreement.

a)	The Company shall, at its option, cause the Shares to be issued in book entry registration, in your name, or in the form of a certificate registered in your name, which certificate shall be held by the Company. The Shares shall be restricted from transfer and shall be subject to an appropriate stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend referring to the restrictions applicable to the Shares.
b)	If any certificate is issued, you shall be required to execute and deliver to the Company a stock power relating to the Shares as a condition to the receipt of this Award of Restricted Stock.
c)	After Shares vest pursuant to Section 3, Section 4 or Section 5 hereof, and following payment of the applicable withholding taxes pursuant to Section 8 hereof, the Company shall promptly cause such vested Shares (less any Shares withheld to pay taxes), free of the restrictions and/or legend described in Section 7(a) hereof, to be delivered, either by book-entry registration or in the form of a certificate or certificates, registered in your name or in the names of your legal representatives, beneficiaries or heirs, as the case may be.

Only whole Shares shall be issued to you pursuant to a certificate. The value of any fractional Share shall be paid in cash at the time a certificate evidencing such fractional Share would otherwise have been delivered to you hereunder and shall be based on the Fair Market Value of one Share of Common Stock on that date.

8. Taxes.

a)

You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the Award of Restricted Stock, the receipt of any payment of cash dividends, the vesting of the Shares and any other matters related to the Terms and Conditions and the attached Agreement. 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 you 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 your sole and absolute responsibility, are withheld or collected from you.

b)

In accordance with the terms of the Plan, and such rules as may be adopted by the Committee administering the Plan, you may elect to satisfy any applicable federal or state income tax withholding obligations arising from the receipt of, or the lapse of restrictions relating to, the Shares by (i) having the Company withhold a portion of the Shares otherwise to be delivered by

you upon such vesting having a Fair Market Value equal to the amount of federal and state income taxes required to be withheld on such vesting, or (ii) delivering to the Company shares of Common Stock, other than the Shares issuable upon such vesting, having a Fair Market Value equal to such taxes. You may elect to satisfy any federal and state income tax withholding obligations arising prior to the vesting of any Shares pursuant to Section 3, Section 4 or Section 5 hereof by delivering to the Company shares of Common Stock other than the Shares issuable upon such vesting having a Fair Market Value equal to such taxes.

9. Distributions and Adjustments.

a)

If any Shares vest subsequent to any change in the number or character of the Common Stock through any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event that affects the Shares covered by this Award of Restricted Stock, you shall then receive upon such vesting the number and type of securities or other consideration which you would have received if such Shares had vested prior to the event changing the number or character of the outstanding Common Stock.

b)

Any additional shares of Common Stock, any other securities of the Company and any other property (except for cash dividends or other cash distributions) distributed with respect to the Shares prior to the date the Shares vest shall be subject to the same restrictions, terms and conditions as the Shares and shall be promptly deposited with the Secretary or the custodian designated by the Secretary to be held in custody in accordance with Section 7(a) hereof. Any cash dividends or other cash distributions payable with respect to the Shares shall be distributed to you at the same time cash dividends or other cash distributions are distributed to stockholders of the Company generally.

10. Covenants. In consideration of benefits described elsewhere in these Terms and Conditions and the attached Agreement, and in recognition of the fact that, as a result of your employment with the Company or any of its Affiliates, you have had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources and money to obtain or develop and which have significant value to the Company and its Affiliates, you agree for the benefit of the Company and its Affiliates, and as a material condition to your receipt of benefits described elsewhere in these Terms and Conditions and the attached Agreement, as follows:

a) Non-Disclosure of Confidential Information. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliates, as

applicable, and must be returned to the Company or such Affiliates immediately upon termination of your employment.

b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors, and Suppliers. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of the their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
d)	Non-Solicitation of Employees. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.
e)	Non-Competition. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 10(e) shall not apply in the event of a Change in Control as described in Section 4 above.

i) The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.

ii) To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

f)	No Disparaging Statements. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, this Award of Restricted Stock shall be immediately and irrevocably forfeited.
h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions and the attached Agreement should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions and the attached Agreement shall not be affected or impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to the attached Agreement or the breach of any of these Terms and Conditions, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section 11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10. The agreement to arbitrate shall continue in full force and effect despite the forfeiture of this Award of Restricted Stock or the termination of your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding, and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or any of its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

12. Severability. In the event that any portion of these Terms and Conditions and the attached Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of these Terms and Conditions and the attached Agreement.

13. Interpretations. These Terms and Conditions and the attached Agreement are subject in all respects to the Plan. A copy of the Plan is available upon your request. In the event that any provision of these Terms and Conditions or the attached Agreement is inconsistent with the terms of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under these Terms and Conditions or the attached Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

14. No Right to Employment. Nothing in these Terms and Conditions, the attached Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss you from employment, free from any liability or any claim under these Terms and Conditions and the attached Agreement, unless otherwise expressly provided in these Terms and Conditions and the attached Agreement.

15. No Rights of Stockholders. You shall have none of the rights and privileges of a stockholder of the Company with respect to the Shares until such Shares have vested pursuant to Section 3, Section 4 or Section 5 hereof, except the right to receive all cash dividends and the right to vote.

16. Compensation. Any compensation realized from the receipt or payment of (or the lapse of restrictions relating to) this Award of Restricted Stock shall constitute a special long-term incentive payment to you and whether or not it is taken into account as compensation in determining the amount of any benefit under any retirement or other employee benefit plan of the Company or any of its Affiliates will be determined solely under the terms of those benefit plans.

17. Securities Matters. The Company shall not be required to deliver any Shares until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

18. Headings. Headings are given to the sections and subsections of these Terms and Conditions and the attached Agreement 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 these Terms and Conditions and the attached Agreement or any provision hereof.

19. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of these Terms and Conditions and the attached Agreement.

20. Notice. For purpose of these Terms and Conditions and the attached Agreement, notices and all other communications provided for in the Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a) Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of

Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.

b)

Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

21. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in these Terms and Conditions and the attached Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;

provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report, or (B) in reliance upon the express written consent of the Company’s counsel.

In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 20(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.

b) Change in Control shall be deemed to have occurred upon any of the following events:

i)

the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (A) the then outstanding shares of Common Stock 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 in 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;

ii)

the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the

	stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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 in Control or engage in a proxy or other control contest); or
iv)	such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one or more of the following events occurring during the two-year period following the CIC Date:

i)	your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date, or (B) the highest amount in effect at any time thereafter;
ii)	your Target Bonus is reduced below the Target Bonus as it existed before the CIC Date;
iii)	your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date;
iv)	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;

provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.

e)	Notice of Termination shall mean a written notice which shall indicate the specific provision in these Terms and Conditions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.
f)	Target Bonus shall mean the target amount of bonus established under the annual bonus plan for you for the year in which the termination of employment occurs. When the context requires, it shall also mean the target amount of bonus established for any earlier or later year.

Original Approval:

EX-10.4

EXHIBIT 10.4

SUPERVALU INC.
2007 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

     This agreement is made and entered into as of the grant date indicated below (the “Grant Date”), by and between SUPERVALU INC. (the “Company”), and the individual whose name appears below (“Recipient”).

     The Company has established the 2007 Stock Plan (the “Plan”), under which key employees of the Company may be granted Awards of Restricted Stock Units of the Company. Recipient has been selected by the Company to receive an Award of Restricted Stock Units subject to the provisions of this agreement. Capitalized terms that are used in this agreement, that are not defined, shall have the meanings ascribed to them in the Plan.

     In consideration of the foregoing, the Company and Recipient hereby agree as follows:

     1. Grant. The Company hereby grants to Recipient, subject to Recipient’s acceptance hereof, an Award of Restricted Stock Units for the number of Restricted Stock Units indicated below, effective as of the Grant Date.

     2. Acceptance of Award of Restricted Stock Units and Restricted Stock Unit Award Terms and Conditions. The Award of Restricted Stock Units is subject to and governed by the Restricted Stock Unit Award Terms and Conditions (“Terms and Conditions”) attached hereto, which is incorporated herein and made a part hereof, and the terms and provisions of the Plan. To accept the Award of Restricted Stock Units, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Recipient must sign and return a copy of this agreement to the Company within sixty (60) days after the Grant Date. By so doing, Recipient acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Recipient has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

     3. Vesting. Except as otherwise provided in the accompanying Terms and Conditions, the Award of Restricted Stock Units shall vest as indicated below.

Award Number:	%%OPTION_NUMBER%-%
Grant Date:	%%OPTION_DATE%-%
Number of Restricted Stock Units:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Vesting Dates:	%%SHARES_PERIOD1%-% on %%VEST_DATE_PERIOD1%-%
	%%SHARES_PERIOD2%-% on %%VEST_DATE_PERIOD2%-%

SUPERVALU INC.	RECIPIENT:
[                     ] [Title]	%%FIRST_NAME%-% %%LAST_NAME%-% %%ADDRESS_LINE_1%-% %%CITY%-% %%STATE%-% %%ZIPCODE%-%

SUPERVALU INC.
2007 STOCK PLAN

RESTRICTED STOCK UNIT AWARD TERMS AND CONDITIONS
(FOR EMPLOYEES)

These Restricted Stock Unit Award Terms and Conditions (“Terms and Conditions”) apply to the Award of Restricted Stock Units granted under the 2007 Stock Plan (the “Plan”), pursuant to the Restricted Stock Unit Award Agreement (the “Agreement”) to which this document is attached. Capitalized terms that are used in this document, but are not defined, shall have the meanings ascribed to them in the Plan or the attached Agreement. See Section 20 for a list of defined terms.

1. Award of Restricted Stock Units. SUPERVALU INC. (the “Company”) hereby grants to you an Award of Restricted Stock Units for the number of Restricted Stock Units set forth in the attached Agreement representing the right to receive one (1) share of the Company’s Common Stock, $1.00 par value (the “Common Stock”), subject to certain restrictions as provided in these Terms and Conditions. The Award is effective as of the Grant Date.

2. Rights with Respect to the Restricted Stock Units. The Restricted Stock Units granted pursuant to the attached Agreement do not and shall not give you any of the rights and privileges of a holder of Common Stock. Your rights with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date or dates on which such rights become vested and the restrictions with respect to the Restricted Stock Units lapse in accordance with Section 3 or Section 4 hereof.

3. Vesting. Subject to these Terms and Conditions, the Restricted Stock Units shall vest in full on the date or dates and in the amount or amounts set forth in the attached Agreement if you remain continuously employed by the Company or any of its Affiliates until the respective vesting dates.

4. Change in Control.

a)	If, within two (2) years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, then you shall become immediately and unconditionally vested in all the Restricted Stock Units and the restrictions with respect to all the Restricted Stock Units shall lapse and the Restricted Stock Units shall be settled and paid to you as soon as administratively feasible following your termination of employment but in no event later than March 15 of the year following the year of your termination of employment. If the Award of Restricted Stock Units is replaced pursuant to subsection (c) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement grant.
b)	If, in the event of a Change in Control, and to the extent the Award of Restricted Stock Units is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of the Award of Restricted Stock Units at the time of the Change in Control, then you shall become immediately and unconditionally vested in all the Restricted Stock Units and the restrictions with respect to all the Restricted Stock Units shall lapse and the Restricted Stock Units shall be settled and paid to you as soon as administratively feasible after the Change in Control but in no event later than March 15 of the year following the year of the Change in Control.
c)	If in the event of a Change in Control and to the extent that this Award of Restricted Stock Units is assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this Award of Restricted Stock Units at the time of the Change in Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this Award of Restricted Stock Units, then the assumed Award of Restricted Stock Units or such substitute therefor shall remain outstanding and be governed by its respective terms.

5. Forfeiture. If you cease to be an employee of the Company or any of its Affiliates prior to the vesting of the Restricted Stock Units pursuant to Section 3 or Section 4 hereof for any reason, then your rights to all of the unvested Restricted Stock Units shall be immediately and irrevocably forfeited. However, the Committee administering the Plan may determine to accelerate the vesting of the Restricted Stock Units if

you cease to be an employee of the Company or any of its Affiliates prior to the vesting of the Restricted Stock Units pursuant to Section 3 or Section 4 hereof for any reason.

6. Restrictions on Transfer. Except as may otherwise be determined by the Committee administering the Plan, until the Restricted Stock Units vest pursuant to Section 3 or Section 4 hereof, none of the Restricted Stock Units may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by you, and no attempt to transfer the Restricted Stock Units, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Restricted Stock Units. No transfer by will or the applicable laws of descent and distribution of any Restricted Stock Units which are vested by action of the Committee administering the Plan following your death shall be effective to bind the Company unless the Committee administering the Plan shall have been furnished with written notice of such transfer and a copy of the will or such other evidence as the Committee may deem necessary to establish the validity of the transfer.

7. Issuance. No shares of Common Stock shall be issued to you prior to the date on which the applicable Restricted Stock Units vest, in accordance with these Terms and Conditions and the attached Agreement. Furthermore, in no event shall any shares of Common Stock be issued to you later than sixty (60) calendar days after the applicable Restricted Stock Units vested. After any Restricted Stock Units vest pursuant to Section 3 or Section 4 hereof, and following payment of the applicable withholding taxes pursuant to Section 8 hereof, the Company shall promptly cause one (1) share of Common Stock for each such vested Restricted Stock Unit (less any shares of Common Stock withheld to pay taxes), free of any restrictions, to be delivered, either by book-entry registration or in the form of a certificate or certificates, registered in your name or in the names of your legal representatives, beneficiaries or heirs, as the case may be, to you. Only whole shares of Common Stock shall be issued to you pursuant to a certificate.

8. Taxes.

a)

You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the grant of the Restricted Stock Units, the vesting of the Restricted Stock Units and the receipt of shares of Common Stock and any other matters related to these Terms and Conditions and the attached Agreement. 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 you 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 your sole and absolute responsibility, are withheld or collected from you.

b)

You acknowledge that you are responsible for the payment of any federal, state, local or other taxes that are required to be withheld by the Company upon vesting of the Restricted Stock Units. In order to satisfy any applicable federal, state, local or other taxes that are required to be withheld, the Company shall withhold a portion of the shares of Common Stock otherwise to be issued upon vesting of the Restricted Stock Units having a Fair Market Value as of the vesting date equal to the amount of federal and state income tax required to be withheld upon such vesting (commonly referred to as a “Tax Swap” or “Stock for Tax”).

9. Adjustments. If any Restricted Stock Units vest subsequent to any change in the number or character of the Common Stock through any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company or other similar corporate transaction or event that affects the Restricted Stock Units covered by this Award of Restricted Stock Units, you shall then receive upon such vesting the number and type of securities or other consideration which you would have received if such Restricted Stock Units had vested prior to the event changing the number or character of the outstanding Common Stock.

10. Covenants. In consideration of benefits described elsewhere in these Terms and Conditions and the attached Agreement, and in recognition of the fact that, as a result of your employment with the Company or any of its Affiliates, you have had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources and money to obtain or develop and which have significant value to the Company and its Affiliates, you agree for the benefit of the Company and its Affiliates, and as

a material condition to your receipt of benefits described elsewhere in these Terms and Conditions and the attached Agreement, as follows:

a)	Non-Disclosure of Confidential Information. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one (1) or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliates, as applicable, and must be returned to the Company or such Affiliates immediately upon termination of your employment.
b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of the their businesses depends upon the their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
d)	Non-Solicitation of Employees. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.
e)	Non-Competition. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or

any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 10(e) shall not apply in the event of a Change in Control as described in Section 4 above.

i)

The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.

ii)

To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

f)	No Disparaging Statements. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, this Award of Restricted Stock Units shall be immediately and irrevocably forfeited.
h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions and the attached Agreement should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions and the attached Agreement shall not be affected or impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to the attached Agreement or the breach of any of these Terms and Conditions, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section 11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10. The agreement to arbitrate shall continue in full force and effect despite the forfeiture of this Award of Restricted Stock Units or the termination of your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or any of its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and

any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

12. Severability. In the event that any portion of these Terms and Conditions and the attached Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of these Terms and Conditions and the attached Agreement.

13. Interpretations. These Terms and Conditions and the attached Agreement are subject in all respects to the Plan. A copy of the Plan is available upon your request. In the event that any provision of these Terms and Conditions or the attached Agreement is inconsistent with the terms of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under these Terms and Conditions or the attached Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

14. No Right to Employment. Nothing in these Terms and Conditions, the attached Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss you from employment, free from any liability or any claim under these Terms and Conditions and the attached Agreement, unless otherwise expressly provided in these Terms and Conditions and the attached Agreement.

15. Compensation. Any compensation realized from the receipt or payment of (or the lapse of restrictions relating to) this Award of Restricted Stock Units shall constitute a special long-term incentive payment to you and whether or not it is taken into account as compensation in determining the amount of any benefit under any retirement or other employee benefit plan of the Company or any of its Affiliates will be determined solely under the terms of those benefit plans.

16. Securities Matters. The Company shall not be required to deliver any shares of Common Stock until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

17. Headings. Headings are given to the sections and subsections of these Terms and Conditions and the attached Agreement 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 these Terms and Conditions and the attached Agreement or any provision hereof.

18. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of these Terms and Conditions and the attached Agreement.

19. Notice. For purpose of these Terms and Conditions and the attached Agreement, notices and all other communications provided for in the attached Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a)	Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.
b)	Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the

event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

20. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in the Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;

provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report, or (B) in reliance upon the express written consent of the Company’s counsel.

In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 19(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.

b) Change in Control shall be deemed to have occurred upon any of the following events:

i)	the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d 3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (A) the then outstanding shares of Common Stock 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 in 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;
ii)	the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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 in Control or engage in a proxy or other control contest); or

iv) such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one (1) or more of the following events occurring during the two-year period following the CIC Date:

i)	your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date or (B) the highest amount in effect at any time thereafter;
ii)	your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date; or
iii)	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;

provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.

e) Notice of Termination shall mean a written notice which shall indicate the specific provision in these Terms and Conditions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.

Original Approval:

EX-10.5

EXHIBIT 10.5

SUPERVALU INC.
2007 STOCK PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

     This STOCK APPRECIATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into as of [Grant Date], which is the grant date (the “Grant Date”), by and between SUPERVALU INC., a Delaware corporation (the “Company”) and [Name], the individual whose name appears below (“Executive”).

     The Company has established the 2007 Stock Plan (the “Plan”), under which key employees of the Company and its Affiliates may be granted stock appreciation rights. Executive has been selected by the Company to receive stock appreciation rights subject to the provisions of this Agreement and the Plan. Capitalized terms that are used in this Agreement, that are not defined, shall have the meanings ascribed to them in the Plan. See Section 18 for a list of defined terms.

     In consideration of the foregoing, the Company and Executive hereby agree as follows:

1. Grant of Stock Appreciation Rights; Term. The Company hereby grants Executive the stock appreciation rights (the “SAR”) with respect to [Shares] shares (the “Shares”) of Common Stock of the Company. The grant price of the SAR is [Grant Price] per share (the “Grant Price”). The SAR is subject to the terms and conditions set forth in this Agreement, and the terms and provisions of the Plan. To accept the SAR, this Agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Executive must sign and return a copy of this Agreement to the Company within sixty (60) days after the Grant Date. By so doing, Executive acknowledges receipt of this Agreement and the Plan, and represents that he or she has read and understands the same and agrees to be bound by this Agreement and terms and provisions of the Plan. A copy of the Plan is available upon Executive’s request. In the event that any provision of this Agreement is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

     The term of the SAR shall be for a period of seven (7) years from the Grant Date and shall terminate at the close of business on the seventh anniversary of the Grant Date (the “Expiration Date”) or such shorter period as provided for herein.

2. Vesting; Exercisability; Transferability.

a) Except as otherwise provided in this Agreement:

i)	twenty-five percent (25%) of the SAR shall vest in four (4) equal annual installments on each of the first four anniversaries of the Grant Date; and
ii)	the vested portion of the SAR may be exercised in whole or part at any time prior to the Expiration Date.

b) Unless otherwise determined by the Committee, the SAR shall not be transferable other than by will or the laws of descent and distribution. More particularly, the SAR may not be assigned, transferred, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the SAR contrary to these provisions, or the levy of any execution, attachment or similar process upon the SAR, shall be void.

3. Effect of Termination of Employment. Following the termination of Executive’s employment with the Company or an Affiliate for any of the reasons set forth below, Executive’s right to exercise the SAR, as well as that of Executive’s beneficiary or beneficiaries, shall be as follows:

a)

Voluntary or Involuntary. If Executive’s employment is terminated voluntarily or involuntarily for any reason other than retirement, death or permanent disability, Executive may exercise the SAR prior to the Expiration Date, at any time within a period of up to one (1) year after such termination of employment, to the full extent of the portion of the SAR which was vested as of the date of termination of Executive’s employment. However, the Committee may, in its sole and absolute discretion, except in the case of the termination of Executive’s employment following the occurrence of a Change in Control (as described in Section 4), during a period of seventy-five (75) days after such termination of employment and following ten (10) days’ written notice to Executive, reduce the period of time during which the SAR may be exercised to any period of time designated by the Committee, provided such period is not less than ninety (90) days following termination of Executive’s employment.

b)

Retirement. Executive shall be deemed to have retired, solely for purposes of this Agreement, in the event that Executive’s employment terminates for any reason other than death or disability and Executive is at least 55 years of age.

i)	If Executive retires and Executive has completed ten (10) or more years of service with the Company or an Affiliate, the unvested portion of the SAR shall immediately vest in full. Thereafter, Executive may exercise the SAR at any time prior to the Expiration Date, to the full extent to which the SAR was not previously exercised.
ii)	If Executive retires and Executive has completed less than ten (10) years of service with the Company or an Affiliate, Executive may exercise the SAR prior to the Expiration Date, at any time within a period of up to one (1) year after the date of Executive’s retirement, to the full extent of the portion of the SAR which was vested as of the date of Executive’s retirement.

c) Death Prior to Age 55. If Executive’s death occurs before Executive attains the age of fifty-five (55), while Executive is employed by the Company or an Affiliate, or within three (3) months after the termination of Executive’s employment, the unvested portion of the SAR shall immediately vest in full. Thereafter, the SAR may be exercised prior to the Expiration Date, by Executive’s beneficiary(ies), or a legatee(s) under Executive’s last will, or Executive’s personal representative(s) or the distributee(s) of Executive’s estate, to the full extent to which the SAR was not previously exercised:

i)	At any time within a period of up to one (1) year after Executive’s death if Executive’s death occurs while Executive is employed, or
ii)	At any time within a period of up to one (1) year following the termination of Executive’s employment if Executive’s death occurs within three (3) months of termination of Executive’s employment.

d) Death After Age 55. If Executive’s death occurs after Executive attains the age of fifty-five (55), while Executive is employed by the Company or an Affiliate, or within three (3) months after the termination of Executive’s employment, the unvested portion of the SAR shall immediately vest in full. Thereafter, the SAR may be exercised prior to the Expiration Date, by Executive’s beneficiary(ies), or a legatee(s) under Executive’s last will, or Executive’s personal representative(s) or the distributee(s) of Executive’s estate, to the full extent to which the SAR was not previously exercised:

i)	At any time, if Executive has completed ten (10) or more years of service with the Company or an Affiliate; or
ii)	If Executive has completed less than ten (10) years of service with the Company or an Affiliate, then at any time within a period of up to one (1) year after the date of Executive’s

2

death if such occurs while Executive is employed, or within a period of up to one (1) year after the date of termination of Executive’s employment if Executive’s death occurs within three (3) months of termination of Executive’s employment.

e)	Disability Prior to Age 55. If Executive’s employment terminates before Executive attains the age of fifty-five (55), as a result of a permanent disability, the unvested portion of the SAR shall immediately vest in full. Thereafter, the SAR may be exercised prior to the Expiration Date, by Executive or by Executive’s personal representative(s), at any time within a period of up to one (1) year after Executive’s employment terminates due to such permanent disability, to the full extent to which the SAR was not previously exercised.
	Executive shall be considered permanently disabled if Executive suffers from a medically determinable physical or mental impairment that renders Executive incapable of performing any substantial gainful employment, and is evidenced by a certification to such effect by a doctor of medicine approved by the Company. In lieu of such certification, the Company shall accept, as proof of permanent disability, Executive’s eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.
f)	Disability After Age 55. If Executive’s employment terminates as a result of a permanent disability after Executive attains the age of fifty-five (55), the unvested portion of the SAR shall immediately vest in full. Thereafter, the SAR may be exercised prior to the Expiration Date, by Executive or by Executive’s personal representative(s), to the full extent to which the SAR was not previously exercised:

i)	At any time, if Executive has completed ten (10) or more years of service with the Company or an Affiliate; or
ii)	If Executive has completed less than ten (10) years of service with the Company or an Affiliate, then at any time within a period of one (1) year after Executive’s employment terminates due to such permanent disability.

Executive shall be considered permanently disabled if Executive suffers from a medically determinable physical or mental impairment that renders Executive incapable of performing any substantial gainful employment, and is evidenced by a certification to such effect by a doctor of medicine approved by the Company. In lieu of such certification, the Company shall accept, as proof of permanent disability, Executive’s eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

g)

Change in Duties/Leave of Absence. The SAR shall not be affected by any change of Executive’s duties or position or by a temporary leave of absence approved by the Company, so long as Executive continues to be an employee of the Company or of an Affiliate.

4. Change in Control.

a)

If, within two years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, the unvested portion of the SAR shall immediately vest and the SAR shall become immediately exercisable in full and remain exercisable for one (1) year beginning on the date of your termination of employment. If the SAR is replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement SAR.

b)

If, in the event of a Change in Control, and to the extent the SAR is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of the SAR at the time of the Change in Control, then the unvested portion of the SAR shall immediately vest and the SAR shall become immediately exercisable in full upon the Change in Control.

3

c)	In the discretion of the Committee and notwithstanding subsection (b) above or any other provision, the SAR (whether or not exercisable) may be cancelled at the time of the Change in Control in exchange for cash, property or a combination thereof that is determined by the Committee to be at least equal to the excess (if any) of the value of the consideration that would be received in such Change in Control by the holders of Common Stock, over the Grant Price for the SAR.
	For purposes of clarification, by operation of this provision SARs that would not yield a gain at the time of the Change in Control under the aforementioned equation are subject to cancellation without consideration. Furthermore, the Committee is under no obligation to treat SARs and/or holders of SARs uniformly and has the discretionary authority to treat SARs and/or holders of SARs disparately.
d)	If in the event of a Change in Control and to the extent that this SAR is assumed by any successor corporation, affiliate thereof, person or other entity, or is replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this SAR at the time of the Change in Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this SAR, then the assumed SAR or such substitute therefor shall remain outstanding and be governed by its respective terms.

5. Company Rights. If Executive exercises the SAR within six (6) months prior to or three (3) months after the date Executive’s employment with the Company or an Affiliate terminates for Cause or if Executive breaches any of the covenants contained in Section 6 below, Executive must repay to the Company the amount paid by the Company to Executive pursuant to Section 7(b) hereof as a result of the exercise of the SAR granted hereunder as more particularly described in the following paragraph.

     The Company may exercise its rights by depositing in the United States mail a written notice addressed to Executive at the latest mailing address for Executive on the records of the Company (a) within thirty (30) days following the termination of Executive’s employment for the repayment of the income realized prior to such termination, or (b) within thirty (30) days after any exercise of the SAR after Executive’s termination of employment. Within thirty (30) days after the mailing of such notice, Executive must repay to the Company the amount paid by the Company to Executive pursuant to Section 7(b) hereof as a result of the exercise of the SAR granted hereunder.

     Following the occurrence of a Change in Control, the Company shall have no right to exercise its rights as set forth in this Section 5.

6. Covenants. In consideration of benefits described elsewhere in this Agreement, and in recognition of the fact that, as a result of Executive’s employment with the Company or any of its Affiliates, Executive has had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources and money to obtain or develop and which have significant value to the Company and its Affiliates, Executive agrees for the benefit of the Company and its Affiliates, and as a material condition to Executive’s receipt of benefits described elsewhere in this Agreement, as follows:

a) Non-Disclosure of Confidential Information. Executive acknowledges that Executive will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that Executive’s possession of this special knowledge is due solely to Executive’s employment with the Company or one or more of its Affiliates. In recognition of the foregoing, Executive will not at any time during employment or following termination of

4

	employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of Executive’s duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliate, as applicable, and must be returned to the Company or such Affiliate immediately upon termination of Executive’s employment.
b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, Executive shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in Executive’s possession. Executive acknowledges and agrees that all such materials are the sole property of the Company or its Affiliates and that Executive will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that Executive has complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. Executive specifically acknowledges that the Confidential Information described in Section 6(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during Executive’s employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, Executive agrees that Executive will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on Executive’s own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom Executive had contact or about whom Executive gained Confidential Information during Executive’s employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 6(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
d)	Non-Solicitation of Employees. Executive specifically acknowledges that the Confidential Information described in Section 6(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and Executive further agrees that during Executive’s employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, Executive will not, directly or indirectly, on Executive’s own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.
e)	Non-Competition. Executive covenants and agrees that during Executive’s employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, Executive will not, in any geographic market in which Executive

5

worked on behalf of the Company or any of its Affiliates, or for which Executive had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 6(e) shall not apply in the event of a Change in Control as described in Section 4 above.

i)

The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to Executive by the Company or its Affiliates at any time during Executive’s employment with the Company or any of its Affiliates.

ii)

To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

(f)	No Disparaging Statements. Executive agrees that Executive will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
(g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 6 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and Executive consents to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by Executive of this Section 6, Executive further agrees that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, Executive agrees that upon Executive’s breach of any covenant in this Section 6, the SAR, and any other unexercised stock appreciation rights issued under the Plan or any other plan of the Company will immediately terminate and the Company shall have the right to exercise any and all of the rights described above including the provisions articulated in Section 5.
(h)	Enforceability of These Covenants. It is further agreed and understood by Executive and the Company that if any part, term or provision of this Agreement should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of this Agreement shall not be affected or impaired in any way.

7. Manner of Exercise; Method of Payment; Withholding Taxes.

a) Except as provided in Section 3, Executive cannot exercise the SAR unless at the time of exercise Executive is an employee of the Company or an Affiliate. Prior to Executive’s death, only Executive may exercise the SAR. The SAR may be exercised by delivery to the Company at its principal office, attention: Corporate Secretary, of a written notice which shall state that Executive elects to exercise the SAR as to the number of Shares specified in the notice as of the date specified in the notice.

6

In the event the SAR is exercised by any person other than Executive pursuant to any of the provisions of Section 3 hereof, the notice of exercise must be accompanied by appropriate proof of such person’s right to exercise the SAR.

b)

The per Share amount payable to Executive in cash upon exercise of the SAR shall be the excess, if any, of the Fair Market Value of one Share, on the date of exercise, over the Grant Price, and shall be payable only in cash and not in any Shares of Common Stock. The Company shall pay Executive the amount due upon exercise of the SAR as soon as administratively practicable after exercise, except that the Company shall withhold or collect from Executive such amounts as are required to be withheld or collected by the Company under any applicable federal, state, local or other tax laws or regulations for payroll withholding, income or other tax purposes.

8. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to this Agreement or the breach of this Agreement, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 6 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section 8 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 6. The agreement to arbitrate shall continue in full force and effect despite the expiration or termination of your SAR or your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or any of its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

9. Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares covered by the SAR such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Committee administering the Plan shall, in such manner as it may deem equitable, adjust any or all of the number and type of Shares (or other securities or other property) covered by the SAR and the Grant Price of the SAR.

10. Severability. In the event that any portion of this Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of this Agreement.

11. No Right to Employment. Nothing in this Agreement or the Plan shall be construed as giving Executive the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss Executive from employment, free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement.

7

12. Headings. Headings are given to the sections and subsections of this Agreement 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 this Agreement or any provision hereof.

13. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of this Agreement.

14. No Rights of Stockholders. Neither Executive, Executive’s legal representative nor a permissible assignee of this SAR shall have any of the rights and privileges of a stockholder of the Company with respect to the Shares.

15. No Trust or Fund Created. Neither the Plan nor this 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 Executive or any other person.

16. Consultation With Professional Tax and Investment Advisors. The holder of the SAR acknowledges that the grant, exercise, vesting or any payment with respect to the SAR may have tax consequences pursuant to the Code or under local, state, federal or international tax laws. The holder further acknowledges that such holder is relying solely and exclusively on the holder’s own professional tax and investment advisors with respect to any and all such matters (and is not relying, in any manner, on the Company or any of its employees or representatives). Finally, the holder understands and agrees that any and all tax consequences resulting from the SAR and its grant, exercise, vesting or any payment with respect thereto is solely and exclusively the responsibility of the holder without any expectation or understanding that the Company or any of its employees or representatives will pay or reimburse such holder for such taxes or other items.

17. Notice. For purpose of this Agreement, notices and all other communications provided for in this Agreement or contemplated hereby shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a)

Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.

b)

Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring, and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

8

18. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in the Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;

provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report or (B) in reliance upon the express written consent of the Company’s counsel.

In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 17(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.

b) Change in Control shall be deemed to have occurred upon any of the following events:

i)	the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (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 in 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;
ii)	the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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

9

	director was not nominated by a person who has expressed an intent to effect a Change in Control or engage in a proxy or other control contest); or
iv)	such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one or more of the following events occurring during the two-year period following the CIC Date:

i)	your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date or (B) the highest amount in effect at any time thereafter;
ii)	your Target Bonus is reduced below the Target Bonus as it existed before the CIC Date;
iii)	your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date; or
iv)	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;

	provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.
e)	Notice of Termination shall mean a written notice which shall indicate the specific provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.
f)	Target Bonus shall mean the target amount of bonus established under the annual bonus plan for you for the year in which the termination of employment occurs. When the context requires, it shall also mean the target amount of bonus established for any earlier or later year.

     IN WITNESS WHEREOF, the Company and Executive have executed this Agreement on the date set forth in the first paragraph hereof.

COMPANY: SUPERVALU INC.
By:
	Name:
	Title:
EXECUTIVE:

Name:	[Name]
Title:	[Title]

10

EX-10.6

EXHIBIT 10.6

SUPERVALU INC.
LONG-TERM INCENTIVE PROGRAM
FOR THE [                    ] PERFORMANCE CYCLE
UNDER THE 2007 STOCK PLAN
PERFORMANCE STOCK UNIT AWARD
AGREEMENT (COMMON STOCK SETTLED)

     This agreement is made and entered into as of the grant date indicated below (the “Grant Date”), by and between SUPERVALU INC. (the “Company”), and the individual whose name appears below (“Recipient”).

     The Company has established the Long-Term Incentive Program for the [                    ] Performance Cycle under the 2007 Stock Plan (the “Plan”), under which key employees of the Company may be granted Awards of Performance Stock Units of the Company. Recipient has been selected by the Company to receive an Award of Performance Stock Units subject to the provisions of this agreement. Capitalized terms that are used in this agreement, that are not defined, shall have the meanings ascribed to them in the Plan.

     In consideration of the foregoing, the Company and Recipient hereby agree as follows:

     1. Grant. The Company hereby grants to Recipient, subject to Recipient’s acceptance hereof, an Award of Performance Stock Units for the number of Performance Stock Units indicated below, effective as of the Grant Date.

     2. Acceptance of Award of Performance Stock Units and Performance Stock Unit Award Terms and Conditions. The Award of Performance Stock Units is subject to and governed by the Performance Stock Unit Award Terms and Conditions (“Terms and Conditions”) attached hereto, which is incorporated herein and made a part hereof, and the terms and provisions of the Plan. To accept the Award of Performance Stock Units, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Recipient must sign and return a copy of this agreement to the Company. By so doing, Recipient acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Recipient has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

     3. Earning and Vesting of Performance Stock Units. Subject to the accompanying Terms and Conditions, the number of Performance Stock Units that shall be earned by Recipient under the Award of Performance Stock Units shall be determined in [Month/Year] in accordance with Exhibit A attached hereto, which is incorporated herein and made a part hereof. All such Performance Stock Units shall vest upon earning. Upon the earning and vesting of the Performance Stock Units, Recipient shall receive a grant of Common Stock, as more particularly described in the accompanying Terms and Conditions.

     Grant Date:

     Number of Performance Stock Units Awarded:

SUPERVALU INC.		RECIPIENT:
By:
	David E. Pylipow
	Executive Vice President, Human Resources and Communications	SS#

SUPERVALU INC.
LONG-TERM INCENTIVE PROGRAM
FOR THE [                    ] PERFORMANCE CYCLE
UNDER THE 2007 STOCK PLAN
PERFORMANCE STOCK UNIT AWARD
TERMS AND CONDITIONS (STOCK SETTLED)

These Performance Stock Unit Award Terms and Conditions (“Terms and Conditions”) apply to the Award of Performance Stock Units granted pursuant to the Long-Term Incentive Program for the [___] Performance Cycle under the 2007 Stock Plan (the “Plan”), pursuant to the Performance Stock Unit Award Agreement (the “Agreement”) to which this document is attached. Capitalized terms that are used in this document, but are not defined, shall have the meanings ascribed to them in the Plan or the attached Agreement. See Section 19 for a list of defined terms.

1. Award of Performance Stock Units. SUPERVALU INC. (the “Company”) hereby grants to you an Award of Performance Stock Units for the number of Performance Stock Units set forth in the attached Agreement. The Award is effective as of the Grant Date. Each Performance Stock Unit represents the right to receive a grant of Shares of the Company’s common stock, $1.00 par value (the “Common Stock”), equal to the number of Performance Stock Units that you earn in accordance with Section 3, Section 4 or Section 5 hereof, subject to these Terms and Conditions.

2. Rights with Respect to the Performance Stock Units. The Performance Stock Units granted pursuant to the attached Agreement do not and shall not give you any of the rights and privileges of a holder of Common Stock. Your rights with respect to the Performance Stock Units shall remain forfeitable at all times prior to the date on which such rights become earned and vested and the restrictions with respect thereto lapse in accordance with Section 3 or Section 4 hereof.

3. Earning and Vesting of Performance Stock Units. The number of the Performance Stock Units that you earn shall be determined in April [                    ] by the Committee administering the Plan as more particularly described in Exhibit A to the attached Agreement or as otherwise expressly provided in these Terms and Conditions. All such Performance Stock Units shall vest upon earning.

4. Change in Control.

a)	If, within two (2) years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, then you shall become immediately and unconditionally vested in all the Performance Stock Units and the restrictions with respect to all the Performance Stock Units shall lapse and the Performance Stock Units shall be settled and paid to you as soon as administratively feasible following your termination of employment but in no event later than March 15 of the year following the year of your termination of employment. If the Award of Performance Stock Units is replaced pursuant to subsection (c) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement grant.
b)	If, in the event of a Change in Control, and to the extent the Award of Performance Stock Units is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of the Award of Performance Stock Units at the time of the Change in Control, then you shall become immediately and unconditionally vested in all the Performance Stock Units and the restrictions with respect to all the Performance Stock Units shall lapse and the Performance Stock Units shall be settled and paid to you as soon as administratively feasible after the Change in Control but in no event later than March 15 of the year following the year of the Change in Control.
c)	If in the event of a Change in Control and to the extent that this Award of Performance Stock Units is assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this Award of Performance Stock Units at the time of the Change in Control and provide for vesting, settlement terms and performance goals that are at least as favorable to you as the vesting and payout terms applicable to this Award of Performance Stock Units, then the

assumed Award of Performance Stock Units or such substitute therefor shall remain outstanding and be governed by its respective terms.

5. Forfeiture. If you cease to be an employee of the Company or any of its Affiliates prior to the earning and vesting of the Performance Stock Units pursuant to Section 3 or Section 4 hereof for any reason, then your rights to all of the Performance Stock Units shall be immediately and irrevocably forfeited. However, the Committee administering the Plan may determine to accelerate the earning and vesting of the Performance Stock Units if you cease to be an employee of the Company or any of its Affiliates prior to the earning and vesting of the Performance Stock Units pursuant to Section 3 or Section 4 hereof for any reason.

6. Restrictions on Transfer. Except as may otherwise be determined by the Committee administering the Plan, none of the Performance Stock Units may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by you, and no attempt to transfer the Performance Stock Units, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Performance Stock Units.

7. Issuance. No shares of Common Stock shall be issued to you prior to the date on which the applicable Performance Stock Units vest, in accordance with these Terms and Conditions and the attached Agreement. Furthermore, in no event shall any shares of Common Stock be issued to you later than sixty (60) calendar days after the applicable Performance Stock Units vested. After any Performance Stock Units vest pursuant to Section 3 or Section 4 hereof, and following payment of the applicable withholding taxes pursuant to Section 8 hereof, the Company shall promptly cause one share of Common Stock for each such vested Performance Stock Unit (less any shares of Common Stock withheld to pay taxes), free of any restrictions, to be delivered, either by book-entry registration or in the form of a certificate or certificates, registered in your name or in the names of your legal representatives, beneficiaries or heirs, as the case may be, to you. Only whole shares of Common Stock shall be issued to you pursuant to a certificate.

8. Taxes.

a)

You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the grant of the Performance Stock Units, the earning and vesting of the Performance Stock Units, the grant of Common Stock, and any other matters related to these Terms and Conditions and the attached Agreement. 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 you 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 your sole and absolute responsibility, are withheld or collected from you.

b)

You acknowledge that you are responsible for the payment of any federal, state, local or other taxes that are required to be withheld by the Company upon vesting of the Performance Stock Units. In order to satisfy any applicable federal, state, local or other taxes that are required to be withheld, the Company shall withhold a portion of the shares of Common Stock otherwise to be issued upon vesting of the Performance Stock Units having a Fair Market Value as of the vesting date equal to the amount of federal and state income tax required to be withheld upon such vesting (commonly referred to as a “Tax Swap” or “Stock for Tax”).

9. Adjustments. If any Performance Stock Units are earned and vest subsequent to any change in the number or character of the Common Stock through any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company or other similar corporate transaction or event that affects the Performance Stock Units covered by this Award of Performance Stock Units, you shall then receive upon such earning and vesting of the Performance Stock Units, the number and type of securities or other consideration which you would have received if such Performance Stock Units had been earned and vested prior to the event changing the number or character of the outstanding Common Stock.

10. Covenants. In consideration of benefits described elsewhere in these Terms and Conditions and the attached Agreement, and in recognition of the fact that, as a result of your employment with the Company or any of its Affiliates, you have had or will have access to and gain knowledge of highly confidential or

proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources, and money to obtain or develop and which have significant value to the Company and its Affiliates, you agree for the benefit of the Company and its Affiliates, and as a material condition to your receipt of benefits described elsewhere in these Terms and Conditions and the attached Agreement, as follows:

a)	Non-Disclosure of Confidential Information. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliates, as applicable, and must be returned to the Company or such Affiliates immediately upon termination of your employment.
b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
d)	Non-Solicitation of Employees. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person

or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage, or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.

e)

Non-Competition. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 10(e) shall not apply in the event of a Change in Control as described in Section 4 above.

i)

The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.

ii)

To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

f)	No Disparaging Statements. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, this Award of Performance Stock Units shall be immediately and irrevocably forfeited.
h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions and the attached Agreement should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions and the attached Agreement shall not be affected or impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to the attached Agreement or the breach of any of these Terms and Conditions, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section

11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10. The agreement to arbitrate shall continue in full force and effect despite the forfeiture of this Award of Performance Stock Units or the termination of your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding, and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or any of its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

12. Severability. In the event that any portion of these Terms and Conditions and the attached Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of these Terms and Conditions and the attached Agreement.

13. Interpretations. These Terms and Conditions and the attached Agreement are subject in all respects to the Plan. A copy of the Plan is available upon your request. In the event that any provision of these Terms and Conditions or the attached Agreement is inconsistent with the terms of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under these Terms and Conditions or the attached Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

14. No Right to Employment. Nothing in these Terms and Conditions, the attached Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss you from employment, free from any liability or any claim under these Terms and Conditions and the attached Agreement, unless otherwise expressly provided in these Terms and Conditions and the attached Agreement.

15. Compensation. Any compensation realized from the receipt or payment of (or the lapse of restrictions relating to) this Award of Performance Stock Units shall constitute a special long-term incentive payment to you and whether or not it is taken into account as compensation in determining the amount of any benefit under any retirement or other employee benefit plan of the Company or any of its Affiliates will be determined solely under the terms of those benefit plans.

16. Headings. Headings are given to the sections and subsections of these Terms and Conditions and the attached Agreement 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 these Terms and Conditions and the attached Agreement or any provision hereof.

17. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of these Terms and Conditions and the attached Agreement.

18. Notice. For purpose of these Terms and Conditions and the attached Agreement, notices and all other communications provided for in the attached Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a)

Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.

b)

Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

19. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in the Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;
provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report or (B) in reliance upon the express written consent of the Company’s counsel.
In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 18(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.

b) Change in Control shall be deemed to have occurred upon any of the following events:

i)

the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (A) the then outstanding shares of Common Stock 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 in 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;

ii)

the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit

	plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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 in Control or engage in a proxy or other control contest); or
iv)	such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one or more of the following events occurring during the two-year period following the CIC Date:

i)	Your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date or (B) the highest amount in effect at any time thereafter;
ii)	Your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date; or
iii)	You are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;
provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.

e) Notice of Termination shall mean a written notice which shall indicate the specific provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.

Original Approval:

EX-10.7

EXHIBIT 10.7

SUPERVALU INC.
LONG-TERM INCENTIVE PROGRAM
FOR THE [_____] PERFORMANCE CYCLE
UNDER THE 2007 STOCK PLAN
PERFORMANCE STOCK UNIT AWARD
AGREEMENT (CASH SETTLED)

     This agreement is made and entered into as of the grant date indicated below (the “Grant Date”), by and between SUPERVALU INC. (the “Company”), and the individual whose name appears below (“Recipient”).

     The Company has established the Long-Term Incentive Program for the [___] Performance Cycle under the 2007 Stock Plan (the “Plan”), under which key employees of the Company may be granted Awards of Performance Stock Units of the Company. Recipient has been selected by the Company to receive an Award of Performance Stock Units subject to the provisions of this agreement. Capitalized terms that are used in this agreement, that are not defined, shall have the meanings ascribed to them in the Plan.

     In consideration of the foregoing, the Company and Recipient hereby agree as follows:

     1. Grant. The Company hereby grants to Recipient, subject to Recipient’s acceptance hereof, an Award of Performance Stock Units for the number of Performance Stock Units indicated below, effective as of the Grant Date.

     2. Acceptance of Award of Performance Stock Units and Performance Stock Unit Award Terms and Conditions. The Award of Performance Stock Units is subject to and governed by the Performance Stock Unit Award Terms and Conditions (“Terms and Conditions”) attached hereto, which are incorporated herein and made a part hereof, and the terms and provisions of the Plan. To accept the Award of Performance Stock Units, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Recipient must sign and return a copy of this agreement to the Company. By so doing, Recipient acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Recipient has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

     3. Earning and Vesting of Performance Stock Units. Subject to the accompanying Terms and Conditions, the number of Performance Stock Units that shall be earned by Recipient under the Award of Performance Stock Units shall be determined in [Month/Year], in accordance with Exhibit A attached hereto, which is incorporated herein and made a part hereof. All such Performance Stock Units shall vest upon earning. Upon the earning and vesting of the Performance Stock Units, Recipient shall receive a cash payment, as more particularly described in the accompanying Terms and Conditions.

     Grant Date:

     Number of Performance Stock Units Awarded:

SUPERVALU INC.		RECIPIENT:
By:
	David E. Pylipow
	Executive Vice President, Human Resources And Communications	SS #

SUPERVALU INC.
LONG-TERM INCENTIVE PROGRAM
FOR THE [_____] PERFORMANCE CYCLE
UNDER THE 2007 STOCK PLAN
PERFORMANCE STOCK UNIT AWARD
TERMS AND CONDITIONS (CASH SETTLED)

These Performance Stock Unit Award Terms and Conditions (“Terms and Conditions”) apply to the Award of Performance Stock Units granted pursuant to the Long-Term Incentive Program for the [___] Performance Cycle under the 2007 Stock Plan (the “Plan”), pursuant to the Performance Stock Unit Award Agreement (the “Agreement”) to which this document is attached. Capitalized terms that are used in this document, but are not defined, shall have the meanings ascribed to them in the Plan or the attached Agreement. See Section 19 for a list of defined terms.

1. Award of Performance Stock Units. SUPERVALU INC. (the “Company”) hereby grants to you an Award of Performance Stock Units for the number of Performance Stock Units set forth in the attached Agreement. The Award is effective as of the Grant Date. Each Performance Stock Unit represents the right to receive cash in the amount equal to the Fair Market Value of one share of the Company’s common stock, $1.00 par value (the “Common Stock”), subject to these Terms and Conditions.

2. Rights with Respect to the Performance Stock Units. The Performance Stock Units granted pursuant to the attached Agreement do not and shall not give you any of the rights and privileges of a holder of Common Stock. Your rights with respect to the Performance Stock Units shall remain forfeitable at all times prior to the date on which such rights become earned and vested and the restrictions with respect thereto lapse in accordance with Section 3 or Section 4 hereof.

3. Earning and Vesting of Performance Stock Units. The number of the Performance Stock Units that you earn shall be determined in April [___] by the Committee administering the Plan as more particularly described in Exhibit A to the attached Agreement or as otherwise expressly provided in these Terms and Conditions. All such Performance Stock Units shall vest upon earning.

4. Change in Control.

a)	If, within two (2) years after a Change in Control you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, then you shall become immediately and unconditionally vested in all the Performance Stock Units and the restrictions with respect to all the Performance Stock Units shall lapse and the Performance Stock Units shall be settled and paid to you as soon as administratively feasible following your termination of employment but in no event later than March 15 of the year following the year of your termination of employment. If the Award of Performance Stock Units is replaced pursuant to subsection (c) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement grant.
b)	If, in the event of a Change in Control, and to the extent the Award of Performance Stock Units is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of the Award of Performance Stock Units at the time of the Change in Control, then you shall become immediately and unconditionally vested in all the Performance Stock Units and the restrictions with respect to all the Performance Stock Units shall lapse and the Performance Stock Units shall be settled and paid to you as soon as administratively feasible after the Change in Control but in no event later than March 15 of the year following the year of the Change in Control.
c)	If in the event of a Change in Control and to the extent that this Award of Performance Stock Units is assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of this Award of Performance Stock Units at the time of the Change in Control and provide for vesting, settlement terms and performance goals that are at least as favorable to you as the vesting and payout terms applicable to this Award of Performance Stock Units, then the

assumed Award of Performance Stock Units or such substitute therefor shall remain outstanding and be governed by its respective terms.

5. Forfeiture. If you cease to be an employee of the Company or any of its Affiliates prior to the earning and vesting of the Performance Stock Units pursuant to Section 3 or Section 4 hereof for any reason, then your rights to all of the Performance Stock Units shall be immediately and irrevocably forfeited. However, the Committee administering the Plan may determine to accelerate the earning and vesting of the Performance Stock Units if you cease to be an employee of the Company or any of its Affiliates prior to the earning and vesting of the Performance Stock Units pursuant to Section 3 or Section 4 hereof for any reason.

6. Restrictions on Transfer. Except as may otherwise be determined by the Committee administering the Plan, none of the Performance Stock Units may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered by you, and no attempt to transfer the Performance Stock Units, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Performance Stock Units.

7. Payment. After the Performance Stock Units are earned and vest pursuant to Section 3 or Section 4 hereof, and following payment of the applicable withholding taxes pursuant to Section 8 hereof, the Company shall promptly cause a cash payment in the amount equal to (i) the Fair Market Value as of the vesting date of one share of Common Stock for each such earned and vested Performance Stock Unit, multiplied by the number of such earned and vested Performance Stock Units, less any amount withheld to pay taxes, to be made to you. The Company will pay to you the Fair Market Value as of the vesting date of any fractional share Common Stock (less any amount withheld to pay taxes). No cash payment shall be made to you prior to the date on which the applicable Performance Stock Units are earned and vest, in accordance with these Terms and Conditions of the attached Agreement and these Terms and Conditions. Furthermore, in no event shall any cash payment be made to you later than sixty (60) calendar days after the applicable Performance Stock Units are earned and vest.

8. Taxes.

a)

You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the grant of the Performance Stock Units, the earning and vesting of the Performance Stock Units, the receipt of the cash payment pursuant to Section 7 hereof, and any other matters related to these Terms and Conditions and the attached Agreement. 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 you 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 your sole and absolute responsibility, are withheld or collected from you.

b)

You acknowledge that you are responsible for the payment of any federal, state, local or other taxes that are required to be withheld by the Company upon the earning and vesting of the Performance Stock Units. In order to satisfy any applicable federal, state, local or other taxes that are required to be withheld, the Company shall withhold a portion of the cash payment to be delivered pursuant to Section 7 hereof in the amount equal to the federal and state income tax required to be withheld upon such vesting.

9. Adjustments. If any Performance Stock Units are earned and vest subsequent to any change in the number or character of the Common Stock through any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company or other similar corporate transaction or event that affects the Performance Stock Units covered by this Award of Performance Stock Units, you shall then receive upon such earning and vesting of the Performance Stock Units, the number and type of securities or other consideration which you would have received if such Performance Stock Units had been earned and vested prior to the event changing the number or character of the outstanding Common Stock.

10. Covenants. In consideration of benefits described elsewhere in these Terms and Conditions and the attached Agreement, and in recognition of the fact that, as a result of your employment with the Company or any of its Affiliates, you have had or will have access to and gain knowledge of highly confidential or

proprietary information or trade secrets pertaining to the Company or its Affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its Affiliates does business (“Confidential Information”), which the Company or its Affiliates have expended time, resources, and money to obtain or develop and which have significant value to the Company and its Affiliates, you agree for the benefit of the Company and its Affiliates, and as a material condition to your receipt of benefits described elsewhere in these Terms and Conditions and the attached Agreement, as follows:

a)	Non-Disclosure of Confidential Information. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliates, as applicable, and must be returned to the Company or such Affiliates immediately upon termination of your employment.
b)	Return of Property. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
c)	Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
d)	Non-Solicitation of Employees. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for

any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage, or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.

e)

Non-Competition. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company. This Section 10(e) shall not apply in the event of a Change in Control as described in Section 4 above.

i)

The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.

ii)

To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.

f)	No Disparaging Statements. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
g)	Remedies for Breach of These Covenants. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, this Award of Performance Stock Units shall be immediately and irrevocably forfeited.
h)	Enforceability of These Covenants. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions and the attached Agreement should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions and the attached Agreement shall not be affected or impaired in any way.

11. Arbitration. You and the Company agree that any controversy, claim or dispute arising out of or relating to the attached Agreement or the breach of any of these Terms and Conditions, or arising out of or relating to your employment relationship with the Company or any of its Affiliates, or the termination of such relationship, shall be resolved by final and binding arbitration under the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, or other neutral arbitrator and rules as mutually agreed to you and the Company, except for claims by the Company relating to your alleged breach of any of the employee covenants set forth in Section 10 above. This agreement to arbitrate specifically includes, but is not limited to, discrimination claims under Title VII of the Civil Rights

Act of 1964 and under state and local laws prohibiting employment discrimination. Nothing in this Section 11 shall preclude the Company from pursuing a court action to obtain a temporary restraining order or a preliminary injunction relating to the alleged breach of any of the covenants set forth in Section 10. The agreement to arbitrate shall continue in full force and effect despite the forfeiture of this Award of Performance Stock Units or the termination of your employment relationship with the Company or any of its Affiliates. You and the Company agree that any award rendered by the arbitrator must be in writing and include the findings of fact and conclusions of law upon which it is based, shall be final and binding, and that judgment upon the final award may be entered in any court having jurisdiction thereof. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to you or the Company or its Affiliates had the matter been heard in court. All expenses of arbitration, including the required travel and other expenses of the arbitrator and any witnesses, and the costs relating to any proof produced at the direction of the arbitrator, shall be borne equally by you and the Company unless otherwise mutually agreed or unless the arbitrator directs otherwise in the award. The arbitrator’s compensation shall be borne equally by you and the Company unless otherwise mutually agreed or the law provides otherwise.

12. Severability. In the event that any portion of these Terms and Conditions and the attached Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity and enforceability of the remainder of these Terms and Conditions and the attached Agreement.

13. Interpretations. These Terms and Conditions and the attached Agreement are subject in all respects to the Plan. A copy of the Plan is available upon your request. In the event that any provision of these Terms and Conditions or the attached Agreement is inconsistent with the terms of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under these Terms and Conditions or the attached Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

14. No Right to Employment. Nothing in these Terms and Conditions, the attached Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company. In addition, the Company may at any time dismiss you from employment, free from any liability or any claim under these Terms and Conditions and the attached Agreement, unless otherwise expressly provided in these Terms and Conditions and the attached Agreement.

15. Compensation. Any compensation realized from the receipt or payment of (or the lapse of restrictions relating to) this Award of Performance Stock Units shall constitute a special long-term incentive payment to you and whether or not it is taken into account as compensation in determining the amount of any benefit under any retirement or other employee benefit plan of the Company or any of its Affiliates will be determined solely under the terms of those benefit plans.

16. Headings. Headings are given to the sections and subsections of these Terms and Conditions and the attached Agreement 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 these Terms and Conditions and the attached Agreement or any provision hereof.

17. Governing Law. The internal law, and not the law of conflicts, of the State of Delaware will govern all questions concerning the validity, construction and effect of these Terms and Conditions and the attached Agreement.

18. Notice. For purpose of these Terms and Conditions and the attached Agreement, notices and all other communications provided for in the attached Agreement, these Terms and Conditions or contemplated by either shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed United States certified or registered mail, return receipt requested, postage prepaid, and addressed, in the case of the Company, to the Company at:

P.O. Box 990
Minneapolis, MN 55440
Attention: Corporate Secretary

and in the case of you, to you at the most current address shown on your employment records. Either party may designate a different address by giving notice of change of address in the manner provided above, except that notices of change of address shall be effective only upon receipt.

a)

Notice of Termination by Company. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.

b)

Good Reason Notice by You. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within six (6) months of such event or circumstance first occurring and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.

19. Definitions. The following terms, and terms derived from the following terms, shall have the following meanings when used in the Agreement with initial capital letters unless, in the context, it would be unreasonable to do so.

a) Cause shall mean:

i)	your continued failure to perform your duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by the Board or an officer of the Company which specifically identifies the manner in which the Board or the officer believes that you have not substantially performed your duties;
ii)	the conviction of, or plea of guilty or nolo contendere to, a felony or the willful engaging by you in conduct which is materially and demonstrably injurious to the Company;
iii)	your commission of a material act or material acts of personal dishonesty intended to result in your substantial personal enrichment at the expense of the Company; or
iv)	your material violation of Company policies relating to Code of Business Conduct, Equal Employment Opportunities and Harassment or Workplace Violence;

	provided, however, that in no event shall Cause exist by virtue of any action taken by you (A) in compliance with express written directions of the Board, the Company’s Chief Executive Officer or the officer to whom you report or (B) in reliance upon the express written consent of the Company’s counsel.
	In each case above, for a termination of employment to be for Cause, you must be provided with a Notice of Termination (as described in Section 18(a)) within six (6) months after the Company has actual knowledge of the act or omission constituting Cause. Whether a termination of employment is for Cause as provided above will be determined by the Company in its sole discretion based on all the facts and circumstances.
b)	Change in Control shall be deemed to have occurred upon any of the following events:

i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (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 in 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;

ii)	the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company’s assets or combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (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;
iii)	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 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 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 in Control or engage in a proxy or other control contest); or
iv)	such other event or transaction as the Board shall determine constitutes a Change in Control.

c)	CIC Date shall mean the date on which a Change in Control occurs.
d)	Good Reason shall mean any one or more of the following events occurring during the two-year period following the CIC Date:

i)	your annual base salary is reduced below the higher of (A) the amount in effect on the CIC Date or (B) the highest amount in effect at any time thereafter;
ii)	your duties and responsibilities or the program of incentive compensation (including without limitation long term incentive plans and equity incentive programs), vacation, fringe benefits, perquisites, retirement and general insurance benefits offered to your are materially and adversely diminished in comparison to the duties and responsibilities or the program of such benefits enjoyed by you on the CIC Date; or
iii)	you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the CIC Date or your business travel obligations are significantly increased over those in effect immediately prior to the CIC Date;

	provided, however, that any diminution of duties or responsibilities that occurs solely as a result of the fact that the Company ceases to be a public company shall not, in and of itself, constitute Good Reason.
e)	Notice of Termination shall mean a written notice which shall indicate the specific provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.

Original Approval: