def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by
the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
SUPERVALU
INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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Notice of Annual Meeting of
Stockholders
To Be Held Tuesday,
July 26, 2011
The Annual Meeting of Stockholders of SUPERVALU INC. will be
held on Tuesday, July 26, 2011, at 10:30 a.m., local
time, at the Westin Edina Galleria, 3201 Galleria, Edina,
Minnesota 55435, for the following purposes:
1) to elect 11 directors;
2) to ratify the appointment of KPMG LLP as independent
registered public accountants;
3) to hold an advisory vote on executive compensation;
4) to hold an advisory vote on the frequency of an advisory
vote on executive compensation; and
5) to transact such other business as may properly come
before the meeting.
Record
Date
The Board of Directors has fixed the close of business on
May 31, 2011 as the record date for the purpose of
determining stockholders who are entitled to notice of and to
vote at the meeting. Holders of SUPERVALU’s common stock
are entitled to one vote for each share held of record on the
record date.
IMPORTANT: We hope you will be able to attend the meeting in
person and you are cordially invited to attend. If you expect to
attend the meeting, please check the appropriate box on the
proxy card when you return your proxy or follow the instructions
on your proxy card to vote and confirm your attendance by
telephone or Internet.
PLEASE
NOTE THAT YOU WILL NEED PROOF
THAT YOU OWN SUPERVALU STOCK TO BE ADMITTED TO THE
MEETING
Record
stockholder:
If your shares are registered directly in your name,
please bring proof of stock ownership.
Shares
held in street name by a broker or a
bank:
If your shares are held for your account
in the name of a broker, bank or other nominee, please bring a
current brokerage
statement, letter from your stockbroker or other proof of stock
ownership to the meeting.
If you need special assistance because of a disability, please
contact the Corporate Secretary’s office, by mail at
P.O. Box 990, Minneapolis, Minnesota 55440 or by
telephone at
(952) 828-4000.
BY ORDER OF THE BOARD OF DIRECTORS
Todd N. Sheldon
Senior Vice President, General Counsel and
Corporate Secretary
June 13, 2011
PROXY
STATEMENT TABLE OF CONTENTS
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PROXY
STATEMENT
The Board of Directors of SUPERVALU INC. is soliciting proxies
for use at the 2011 Annual Meeting of Stockholders to be held on
Thursday, July 26, 2011, and at any adjournment or
postponement of the meeting. This Proxy Statement and the
accompanying form of proxy will first be mailed to stockholders
who hold SUPERVALU common stock as of May 31, 2011, the
record date for this meeting, on or about June 13, 2011.
VOTING
PROCEDURES
Number of
Shares Outstanding
SUPERVALU has one class of capital stock outstanding, common
stock. The holders of common stock are entitled to one vote for
each share held. As of the record date for the meeting,
212,154,277 shares of common stock were outstanding and are
eligible to vote at the meeting.
Vote
Required and Method of Counting Votes
You may vote “FOR,” “AGAINST” or
“ABSTAIN” on Item 1, Item 2 and Item 3
described below. With respect to Item 4, you may vote
“FOR One Year,” “FOR Two Years,” “FOR
Three Years,” or you may “ABSTAIN.” If you submit
your proxy, but abstain from voting, your shares will be counted
as present at the meeting for the purpose of determining a
quorum.
If you hold your shares in street name and do not provide voting
instructions to your broker, they will be counted as present at
the meeting for the purpose of determining a quorum and may be
voted on Item 2 (Ratification of the Appointment of the
Independent Registered Public Accountants) at the discretion of
your broker. If you hold your shares in street name, it is
critical that you cast your vote if you want it to count for
Item 1 (Election of Directors), Item 3 (Advisory Vote
on Executive Compensation) and Item 4 (Advisory Vote on the
Frequency of an Advisory Vote on Executive Compensation). In the
past, if you held your shares in street name and you did not
indicate how you wanted your shares voted in the election of
directors, your bank or broker was allowed to vote those shares
on your behalf, as they felt appropriate. Recent changes in
regulation were made to take away the ability of your bank or
broker to vote your uninstructed shares in the election of
directors on a discretionary basis. Thus, if you hold your
shares in street name and you do not instruct your bank or
broker how to vote in the election of directors, no votes will
be cast on your behalf.
The following is an explanation of the vote required for each of
the items to be voted on.
Item 1. Election of
Directors. Each director nominee receiving a
majority of the votes cast will be elected as a director. This
means that the number of shares voted “FOR” a director
nominee must exceed the number of votes cast “AGAINST”
that director nominee in order for that nominee to be elected as
a director. If, however, the number of nominees exceeds the
number of directors to be elected (a situation we do not
anticipate), the directors shall be elected by a plurality of
the shares present in person or by proxy at the meeting and
entitled to vote on the election of directors. A plurality means
that the 11 director nominees that receive the highest
number of votes cast will be elected. In either event, shares
not present at the meeting and shares voting “ABSTAIN”
have no effect on the election of directors.
Item 2. Ratification of the Appointment of
the Independent Registered Public
Accountants. The affirmative vote of a majority
of the shares of common stock, present and entitled to vote at
the meeting is required for the approval of this proposal. If
you submit your proxy but abstain from voting, your shares will
be counted as present at the meeting for the purpose of
calculating the vote on this proposal. Shares voting
“ABSTAIN” on this proposal have the same effect as a
vote against this proposal.
Item 3. Advisory Vote on Executive
Compensation. The affirmative vote of a majority
of the shares of common stock, present and entitled to vote at
the meeting is required for the approval of this proposal. If
you submit your proxy but abstain from voting, your shares will
be counted as present at the meeting for the purpose of
calculating the vote on this proposal. Shares voting
“ABSTAIN” on this proposal have the same effect as a
vote against this proposal.
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Item 4. Advisory Vote on the Frequency of an
Advisory Vote on Executive Compensation. The
alternative receiving the greatest number of votes —
one year, two years or three years — will be the
frequency that stockholders approve.
YOUR VOTE IS VERY IMPORTANT. Whether or not
you expect to attend the meeting, please submit your proxy vote
in one of the following ways:
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Voting by Mail. If you wish to vote by mail,
please sign, date and return the enclosed proxy card promptly in
the postage-paid envelope provided.
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Voting by Telephone and the Internet. If you
wish to vote by telephone or Internet, please follow the
instructions on the enclosed proxy card. If you vote by
telephone or Internet, you do not need to return the proxy card.
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Shares held in Street Name. If your shares are
held in the name of a bank, broker or other holder of record,
follow the voting instructions you receive from the holder of
record to vote your shares. Telephone and Internet voting are
also available to stockholders owning stock through most major
banks and brokers.
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Voting by Participants in Employee Benefit
Plans. If you own shares of SUPERVALU common
stock as a participant in one or more of our employee benefit
plans, you will receive a single proxy card that covers both the
shares credited to your plan account(s) and the shares you own
that are registered in the same name. If any of your plan
accounts are not in the same name as your shares of record, you
may receive separate proxy cards for the shares held in each
named account. Proxies submitted by plan participants will serve
as voting instructions to the trustee for that plan whether
provided by mail, telephone or Internet. If you do not make an
affirmative election as to how you want your shares to be voted,
the trustee will vote those shares in the same proportion as
other participants in that plan affirmatively elected to vote
their shares.
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Revoking Your Proxy. With the exception of
shares held in employee benefit plan accounts, you may revoke
your proxy at any time before your shares are voted by sending a
written statement to the Corporate Secretary, or by submitting
another proxy with a later date. You may also revoke your proxy
by voting in person at the meeting. With respect to shares held
in employee benefit plan accounts, you may revoke your proxy for
those shares up until noon on July 25, 2011.
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It is important that all stockholders vote. If you submit a
proxy by mail, telephone or Internet without indicating how you
want to vote, your shares will be voted as recommended by the
Board of Directors.
ATTENDING
THE ANNUAL MEETING
If you plan to attend the Annual Meeting, you will not be
admitted without proof that you own SUPERVALU stock.
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Record Stockholders. If you are a record
stockholder (i.e., a person who owns shares registered directly
in his or her name with SUPERVALU’s transfer agent) and
plan to attend the meeting, please indicate this when voting,
either by marking the attendance box on the proxy card or
responding affirmatively when prompted during telephone or
Internet voting.
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Owners of Shares Held in Street
Name. Beneficial owners of SUPERVALU common stock
held in street name by a broker, bank or other nominee will need
proof of ownership to be admitted to the meeting. A recent
brokerage statement or letters from the broker, bank or other
nominee are examples of proof of ownership. If your shares are
held in street name and you want to vote in person at the
meeting, you must obtain a written proxy from the broker, bank
or other nominee holding your shares.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the
only persons or groups known to us as of May 10, 2011, to
be the beneficial owners of more than five percent of SUPERVALU
common stock.
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Name and Address of
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Amount and Nature of
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Percent of
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Beneficial Owner
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Beneficial Ownership
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Class
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State Street Corporation(1)
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13,362,931
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6.3
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State Street Financial Center
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One Lincoln Street
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Boston, MA 02111
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TIAA-CREF Investment Management,
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13,006,568
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6.13
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LLC and related entities(2)
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730 Third Avenue
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New York, NY 10017
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LSV Asset Management(3)
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10,622,427
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5.007
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1 N. Wacker Drive, Suite 4000
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Chicago, IL 60606
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Share ownership is as of December 31, 2010, as set forth in
a Schedule 13G filed with the Securities and Exchange
Commission on February 11, 2011. According to that filing,
State Street Corporation is deemed to beneficially own
13,362,931 shares of SUPERVALU common stock, with shared
voting power and shared dispositive power as to 13,362,931 of
such shares. |
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Share ownership is as of December 31, 2010, as set forth in
a Schedule 13G jointly filed with the Securities and
Exchange Commission by TIAA-CREF Investment Management, LLC
(“Investment Management”) and Teachers Advisors, Inc.
(“Advisors”) on February 11, 2011. According to
that filing, Investment Management is deemed to be the
beneficial owner of 11,506,631 shares of SUPERVALU common
stock and Advisors is deemed to be the beneficial owner of
1,499,937 shares of SUPERVALU common stock. Investment
Management is the investment adviser to the College Retirement
Equities Fund, a registered investment company; and Advisors is
the investment adviser to TIAA-CREF Funds, TIAA-CREF Life Funds
and TIAA Separate Account VA-1, each a registered investment
company, and the following unregistered funds: TIAA-CREF Asset
Management Commingled Funds Trust I and four Active
Extension Funds. Each of Investment Management and Advisors
expressly disclaims beneficial ownership of the other’s
securities holdings and each disclaims that it is a member of a
“group” with the other. |
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Of these shares, Investment Management has the sole voting power
and sole dispositive power over 11,506,631 shares and
Advisors has the sole voting power and sole dispositive power
over 1,499,937 shares. |
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Share ownership is as of December 31, 2010, as set forth in
a Schedule 13G filed with the Securities and Exchange
Commission on February 9, 2011. According to that filing,
LSV Asset Management is deemed to beneficially own
10,622,427 shares of SUPERVALU common stock, with sole
voting power and sole dispositive power as to 10,622,427 of such
shares. |
SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth information as of May 10,
2011 concerning beneficial ownership of SUPERVALU’s common
stock by each director and director nominee and for each of the
executive officers named in the Summary Compensation Table (the
“Named Executive Officers”), except for
Mr. Noddle and Ms. Knous, and all of our directors and
executive officers as a group. For Mr. Noddle and
Ms. Knous, beneficial ownership is as of June 24, 2010
and September 30, 2010, respectively.
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The definition of beneficial ownership for proxy statement
purposes includes shares over which a person has sole or shared
voting power or dispositive power, whether or not a person has
any economic interest in the shares. The definition also
includes shares that a person has a right to acquire currently
or within 60 days.
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Amount and Nature of
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Percent of
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Name of Beneficial Owner
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Beneficial Ownership(1)(2)
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Class
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Donald R. Chappel
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21,843
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Irwin S. Cohen
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66,996
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Ronald E. Daly
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67,707
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Susan E. Engel
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105,263
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Philip L. Francis
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84,307
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Edwin C. Gage
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106,849
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Craig R. Herkert
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705,557
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Charles M. Lillis
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115,522
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Steven S. Rogers
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85,602
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Matthew E. Rubel
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16,655
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Wayne C. Sales
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79,851
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Kathi P. Seifert
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55,827
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Julie Dexter Berg
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33,459
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Janel S. Haugarth
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346,357
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Pamela K. Knous
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767,772
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Jeffrey Noddle
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2,472,486
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1.0
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Wayne R. Shurts
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47,000
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Sherry M. Smith
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245,054
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All directors and executive officers as a group (26 persons)
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7,041,736
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3.3
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Less than 1 percent |
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All persons listed have sole voting and investment power with
respect to all of the shares listed except: (i) the
following non-employee director who has shared voting and
investment power, as follows: Mr. Gage, 8,000 shares
and (ii) the following non-employee directors who have sole
voting power, but no investment power, over shares held in the
SUPERVALU INC. Directors’ Deferred Compensation Plan (2009
Restatement), as follows: Mr. Chappel, 15,520 shares;
Mr. Cohen, 18,359 shares; Mr. Daly,
24,992 shares; Ms. Engel, 50,249 shares;
Mr. Francis, 41,398 shares; Mr. Gage,
26,611 shares; Mr. Lillis, 64,342 shares;
Mr. Rogers, 23,987 shares; Mr. Rubel,
10,392 shares; Mr. Sales, 48,293 shares and
Ms. Seifert, 19,176 shares. |
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Includes shares underlying options exercisable within
60 days of May 10, 2011, as follows: Mr. Chappel,
6,140 shares; Mr. Cohen, 48,420 shares;
Mr. Daly, 42,420 shares; Ms. Engel,
54,420 shares; Mr. Francis, 36,420 shares;
Mr. Gage, 54,420 shares; Mr. Herkert,
366,091 shares; Mr. Lillis, 48,420 shares;
Mr. Rogers, 54,420 shares; Mr. Rubel,
6,140 shares; Mr. Sales, 30,420 shares;
Ms. Seifert, 30,420 shares; Ms. Dexter Berg,
23,000 shares; Ms. Haugarth, 246,435 shares;
Ms. Knous, 543,862 shares; Mr. Noddle,
1,794,914 shares; Mr. Shurts, 27,000 shares;
Ms. Smith, 187,830 shares; and all directors and
executive officers as a group, 4,767,989 shares. |
MEETINGS
OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held six regular meetings during the last
fiscal year. Each director attended at least 75 percent of
the meetings of the Board and its committees on which the
director served.
The Board maintains four standing committees: Audit, Corporate
Governance and Nominating, Finance and Leadership Development
and Compensation, each of which has a separate written charter
that is available on SUPERVALU’s website at
http://www.supervalu.com.
Click on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.”
Membership on the Audit, Corporate Governance and Nominating and
Leadership Development and Compensation Committees is limited to
non-employee directors. The Board of Directors has determined
that all of its
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non-employee directors, and therefore each member of the Audit,
Corporate Governance and Nominating and Leadership Development
and Compensation Committees, are independent directors under the
New York Stock Exchange (“NYSE”) listing standards.
The Board has also determined that all nominees for director are
independent under the NYSE listing standards and the rules of
the Securities and Exchange Commission (the “SEC”).
The non-employee directors of the Company are Donald R. Chappel,
Irwin S. Cohen, Ronald E. Daly, Susan E. Engel, Philip
L. Francis, Edwin C. Gage, Charles M. Lillis, Steven S. Rogers,
Matthew E. Rubel, Wayne C. Sales and Kathi P. Seifert.
Audit
Committee
The following directors served on the Audit Committee in fiscal
2011: Irwin S. Cohen (Chairperson), Donald R. Chappel,
Philip L. Francis, Steven S. Rogers and Kathi P. Seifert. The
Board has determined that all members of the Audit Committee are
financially literate under the NYSE listing standards and that
Irwin S. Cohen, Donald R. Chappel and Philip L. Francis qualify
as “audit committee financial experts” under the NYSE
listing standards and the rules of the SEC. The Audit Committee
met six times during the last fiscal year.
The primary responsibilities of the Audit Committee are to
assist the Board of Directors in:
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its oversight of our accounting and financial reporting
principles and policies, and our internal controls and
procedures;
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its oversight of our financial statements and the independent
registered public accountants;
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selecting, evaluating and, where deemed appropriate, replacing
the independent registered public accountants; and
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evaluating the independence of the independent registered public
accountants.
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Corporate
Governance and Nominating Committee
The following directors served on the Corporate Governance and
Nominating Committee in fiscal 2011: Wayne C. Sales
(Chairperson), Ronald E. Daly, Philip L. Francis, Edwin C. Gage
and Steven S. Rogers. The Corporate Governance and Nominating
Committee met four times during the last fiscal year.
The mission of the Corporate Governance and Nominating Committee
is to recommend a framework to assist the Board in fulfilling
its corporate governance responsibilities. In carrying out its
mission, the Corporate Governance and Nominating Committee
establishes and regularly reviews the Board’s policies and
procedures, which provide:
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criteria for the size and composition of the Board;
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procedures for the conduct of Board meetings, including
executive sessions of the Board;
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policies on director retirement and resignation; and
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criteria regarding personal qualifications needed for Board
membership.
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In addition, the Corporate Governance and Nominating Committee
has the responsibility to:
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consider and recommend nominations for Board membership and the
composition of Board committees;
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evaluate our Board practices and those of other well-managed
companies and recommend appropriate changes to the Board (see
“Board Practices” below);
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consider governance issues raised by stockholders and recommend
appropriate responses to the Board; and
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consider appropriate compensation for directors.
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For a description of the Corporate Governance and Nominating
Committee’s processes and procedures for the consideration
and determination of director compensation, see “Director
Compensation.”
5
Finance
Committee
The following directors served on the Finance Committee in
fiscal 2011: Charles M. Lillis (Chairperson), Donald R. Chappel,
Irwin S. Cohen, Susan E. Engel and Matthew E. Rubel. The Finance
Committee met two times during the last fiscal year.
The primary responsibilities of the Finance Committee are to
review our financial structure, policies and future financial
plans and to make recommendations concerning them to the Board.
In carrying out these responsibilities, the Finance Committee
periodically reviews:
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our annual operating and capital budgets as proposed by
management, and our performance as compared to the approved
budgets;
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our dividend policy and rates;
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investment performance of our employee benefit plans;
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our financing arrangements;
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•
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our capital structure, including key financial ratios such as
debt to equity ratios and coverage of fixed charges; and
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proposals for changes in our capitalization, including purchases
of treasury stock.
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Leadership
Development and Compensation Committee
The following directors served on the Leadership Development and
Compensation Committee in fiscal 2011: Susan E. Engel
(Chairperson), Ronald E. Daly, Edwin C. Gage, Charles M. Lillis,
Matthew E. Rubel and Kathi P. Seifert. The Leadership
Development and Compensation Committee met seven times during
the last fiscal year.
The primary responsibilities of the Leadership Development and
Compensation Committee are to:
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determine the process to evaluate the performance of the Chief
Executive Officer (the “CEO”);
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review and recommend to the Board the compensation of the CEO;
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review and recommend to the Board major changes in executive
compensation programs, executive stock options and retirement
plans for officers;
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consider and make recommendations to the Board concerning the
annual election of corporate officers and the succession plan
for the CEO;
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approve annual salaries and bonuses of corporate officers and
other executives at specified levels;
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review and approve participants and performance targets under
our annual and long-term incentive compensation plans;
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retain and terminate any firm or other professional used to
assist in the evaluation of directors and senior executives,
including the CEO, and to approve the terms of and fees for such
retention;
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approve equity grants and awards under our stock plan, bonus and
other incentive plans;
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review with management the Compensation Discussion and
Analysis; and
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review periodic reports from management with respect to whether
the Company’s compensation programs and policies are
reasonably likely to have a material adverse effect on the
Company.
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For a description of the Leadership Development and Compensation
Committee’s processes and procedures for the consideration
and determination of executive compensation, see
“Compensation Discussion and Analysis.”
6
BOARD
PRACTICES
In order to help our stockholders better understand our Board
practices, we are including the following description of current
practices. The Corporate Governance and Nominating Committee
periodically reviews these practices.
Leadership
Structure
The Board determines the best board leadership structure for
SUPERVALU from time to time. The Board believes that it is not
in the best interest of the Company or our stockholders to have
an inflexible rule regarding whether the offices of Chairman and
CEO must be separate. When a vacancy occurs in the office of
either the Chairman or the CEO, the Board will consider the
specific characteristics and circumstances existing at that time
and will determine whether the role of Chairman should be
separate from that of the CEO and, if the roles are separate,
whether the Chairman should be selected from the independent
directors or from management.
In 2010, the Board determined that it was in the best interest
of the Company to continue the separation of the positions of
CEO and Chairman and to elect a Non-Executive Chairman. Wayne C.
Sales was elected to that role following the 2010 Annual Meeting
of Stockholders, assuming his continued service on the Board of
Directors. It is expected that Mr. Sales will serve as the
Non-Executive Chairman for a two-year term, contingent upon
re-election to the Board of Directors. At the end of that
two-year term, the Board will reevaluate its leadership
structure. The Board believes this leadership structure affords
the Company an effective combination of internal and external
experience, continuity and independence that will serve the
Board and the Company well.
Evaluation
of Board Performance
In order to continue to evaluate and improve the effectiveness
of the Board, under the guidance of the Corporate Governance and
Nominating Committee, our Board annually evaluates the
Board’s performance as a whole. The evaluation process
includes a survey of the individual views of all directors, a
summary of which is then shared with the Board. The Board
conducted an evaluation this year with the assistance of an
outside consultant in which each director was evaluated on ten
competencies as a way to improve each director’s
performance. A similar evaluation process is expected to occur
following the 2011 Annual Meeting of Stockholders and biannually
thereafter. Each active Board Committee also evaluates its own
performance annually.
Size of
the Board
As provided by our bylaws, the Board of Directors shall consist
of not less than 10, nor more than 15 directors. The exact
number of directors shall be determined from time to time by
resolution adopted by 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. The Board believes that the size of the Board should
accommodate the objectives of effective discussion and
decision-making and adequate staffing of Board committees.
The Board of Directors currently consists of 12 members.
Following the 2011 Annual Meeting of Stockholders, the Board of
Directors will consist of 11 members.
Director
Independence
The Board believes that a substantial majority of its members
should be independent, non-employee directors. It is the
Board’s policy that no more than two members of the Board
will be employees of SUPERVALU. These management members will
include the CEO and up to one additional person whose duties and
responsibilities identify them as a top management individual of
SUPERVALU. Only one member of the Board, Craig R. Herkert, is or
will be an employee of SUPERVALU, assuming all nominees are
elected. The Board has determined that all non-employee
directors and all director nominees meet the requirements for
independence under the NYSE listing standards.
7
Director
Retirement
It is Board policy that non-employee directors retire at the
annual meeting following the date they attain the age of 74 and
that non-employee directors elected after February 27,
1994 may serve a maximum term of 15 years. Directors
who change the occupation they held when initially elected to
the Board are expected to offer to resign from the Board. At
that time, the Corporate Governance and Nominating Committee
will review the continuation of Board membership under these new
circumstances and make a recommendation to the full Board.
The Board also has adopted a policy that requires employee
directors, other than the CEO, to retire from the Board at the
time of a change in their status as an officer of SUPERVALU. A
former CEO may continue to serve on the Board until the third
anniversary after his or her separation from SUPERVALU. However,
if a former CEO leaves SUPERVALU to accept another position, the
CEO is expected to retire as a director effective simultaneously
with his or her separation from SUPERVALU.
Selection
of Directors
The Corporate Governance and Nominating Committee is the
standing committee responsible for determining the slate of
director nominees for election by stockholders. The Corporate
Governance and Nominating Committee considers and evaluates
potential Board candidates based on the criteria set forth below
and makes its recommendation to the full Board. The criteria
applied to director candidates stress independence, integrity,
experience and sound judgment in areas relevant to our business,
financial acumen, interpersonal skills, a proven record of
accomplishment, a willingness to commit sufficient time to the
Board, the ability to challenge and stimulate management and
diversity. The Corporate Governance and Nominating Committee
views diversity in its broadest sense, which includes gender,
ethnicity, education, experience and leadership qualities. The
Corporate Governance and Nominating Committee will use the same
process and criteria for evaluating all nominees, regardless of
whether the nominee is submitted by a stockholder or by some
other source.
Directors and management are encouraged to submit the name of
any candidate they believe to be qualified to serve on the
Board, together with background information on the candidate, to
the Chairperson of the Corporate Governance and Nominating
Committee. In accordance with procedures set forth in our
bylaws, stockholders may propose, and the Corporate Governance
and Nominating Committee will consider, nominees for election to
the Board of Directors by giving timely written notice to the
Corporate Secretary, which must be received at our principal
executive offices no later than the close of business on
March 28, 2012 and no earlier than February 27, 2012.
Any such notice must include the name of the nominee, a
biographical sketch and resume, contact information and such
other background materials on such nominee as the Corporate
Governance and Nominating Committee may request.
Executive
Sessions of Outside Directors
Non-employee directors generally meet together as a group,
without the CEO or any other employees in attendance, during
each Board meeting. The Non-Executive Chairman presides over
each executive session of the Board.
Non-Executive
Chairman
In 2010, our Board established the position of Non-Executive
Chairman and elected Mr. Sales to serve in that role. The
primary responsibilities of our Non-Executive Chairman include:
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(a)
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ensuring that the respective responsibilities of the Board and
management are understood, and that the boundaries between the
Board and management responsibilities are respected;
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(b)
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working with the CEO to develop an appropriate schedule of Board
meetings, seeking to ensure that the Board can perform its
duties responsibly while recognizing and supporting the
operational demands of the Company;
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(c)
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working with the CEO and Board members to develop the agendas
for the Board meetings;
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(d)
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conferring with the Corporate Governance and Nominating
Committee regarding recommendations regarding the membership of
the Board’s committees and the selection and rotation of
committee chairs;
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(e)
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chairing all meetings of the Board and presiding at all
stockholder meetings;
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(f)
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scheduling, developing the agenda for and presiding at all
executive sessions of the Board and at meetings of the
Board’s outside directors, and communicating to the CEO the
substance of the discussions occurring at such sessions and
meetings;
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(g)
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acting as principal liaison between the non-employee directors
and the CEO on sensitive issues, although any non-employee
director maintains the right to communicate directly with the
CEO on any matter;
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(h)
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serving as an ex officio member of each committee and working
with the Board committee chairs on the performance of their
designated roles and responsibilities;
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(i)
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assessing and advising the CEO as to the quality, quantity and
timeliness of the flow of information from Company management
that is necessary for the Board to effectively and responsibly
perform its duties. Although Company management is responsible
for the preparation of materials for the Board, the
Non-Executive Chairman will consider requests from any Board
member regarding the inclusion of specific information in such
material and all directors maintain the right to communicate
directly with members of management;
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(j)
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recommending to the Board the retention of any consultants who
will report directly to the Board on board matters (as opposed
to committee consultants);
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(k)
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acting as a direct conduit to the Board for stockholders,
employees and the public;
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(l)
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monitoring significant issues and risks between meetings of the
Board and assuring that the entire Board becomes involved when
appropriate;
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(m)
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leading the Board in anticipating and responding to crises,
including temporary incapacity of the CEO;
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(n)
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upon recommendation of the Corporate Governance and Nominating
Committee, interviewing candidates for the Board that are
proposed to be presented to the Board for consideration;
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(o)
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in conjunction with the Corporate Governance and Nominating
Committee, overseeing the evaluation process regarding the
performance of individual directors;
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(p)
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working with the chair of the Leadership Development and
Compensation Committee on the process for compensating and
evaluating the CEO, consistent with the principle that the CEO
reports to the full Board and not the Non-Executive Chairman;
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(q)
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working with the Chair of the Leadership Development and
Compensation Committee on succession planning for the CEO and
senior management;
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(r)
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assisting the Board and the Company in assuring compliance with
and implementation of the Governance Principles; and
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(s)
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chairing the Corporate Governance and Nominating Committee and
the Executive Committee of the Board.
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Board’s
Role in Risk Oversight
The Board takes an active role in risk oversight related to the
Company both as a full Board and through its Committees. The
Board meets in executive session, without Mr. Herkert
present, after each regularly scheduled Board meeting to, among
other things, assess the quality of the meetings and to provide
its observations to Mr. Herkert.
9
In addition, the Company conducts an annual enterprise wide risk
assessment. A formal report is delivered to the Audit Committee,
the chair of which provides a synopsis to the Board. Risk
assessment updates are provided if required. The objectives for
the risk assessment process include: (i) facilitating the
NYSE governance requirement that the Audit Committee discuss
policies around risk assessment and risk management;
(ii) developing a defined list of key risks to be shared
with the Audit Committee, Board and senior management;
(iii) determining whether there are risks that require
additional or higher priority mitigation efforts;
(iv) facilitating discussion of the risk factors to be
included in Item 1A of the Company’s Annual Report on
Form 10-K
and (v) guiding the development of the internal audit plans.
Compensation
Risk Assessment
The Company has historically maintained a prudent and
appropriately risk-balanced approach to its incentive
compensation programs to ensure that such programs promote the
long-term interests of our stockholders and do not contribute to
unnecessary risk-taking, and will continue to do so. The
Company, through its Leadership Development and Compensation
Committee, regularly engages in a process to evaluate whether
its executive and broad-based compensation programs contribute
to unnecessary risk-taking and has concluded that the risks
arising from these programs are not reasonably likely to have a
material adverse effect on the Company. The Committee directly
engages its compensation consultant, Towers Watson, to assist
the Committee in its evaluation. In accordance with the
Committee’s direction, Towers Watson performs a
compensation risk assessment of the Company’s executive and
broad-based compensation programs and makes an independent
report to the Committee. The risk assessment completed by Towers
Watson in 2011 concluded that the Company’s executive and
broad-based compensation programs do not present any area of
significant risk, noting that the plans are well-aligned with
the Committee’s compensation design principles and that
individual business units do not pose a significant risk to the
overall enterprise given the interdependence of key business
units and the management of cross-enterprise risks.
Additionally, the Committee noted in its evaluation that the
Company has implemented a clawback policy and maintains stock
ownership guidelines for its directors and officers, each of
which further supports the risk-balanced approach to incentive
compensation.
Attendance
at Stockholder Meetings
The Board does not have a formal policy regarding director
attendance at the Annual Meeting of Stockholders. However, all
directors are strongly encouraged to attend the meeting. All of
the incumbent directors attended the 2010 Annual Meeting of
Stockholders.
Stock
Ownership Guidelines
Non-employee directors are required to acquire and own SUPERVALU
common stock with a fair market value of five times a
director’s annual retainer within five years after the
director is first elected.
Governance
Principles
The Board maintains a formal statement of Governance Principles
that sets forth the corporate governance practices for
SUPERVALU. The Governance Principles are available on our
website at
http://www.supervalu.com. Click
on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.”
Policy
and Procedures Regarding Transactions with Related
Persons
The Board of Directors of the Company has adopted a Policy and
Procedures Regarding Transactions with Related Persons. This
policy delegates to the Audit Committee responsibility for
reviewing, approving or ratifying transactions with
“related persons” that are required to be disclosed
under the rules of the SEC. Under the policy, a “related
person” includes any of the directors or executive officers
of the Company, certain stockholders and their immediate
families. The policy applies to transactions where the Company
is a participant, a related person will have a direct or
indirect material interest and the amount involved exceeds
$120,000. Under the policy, management of the Company is
responsible for disclosing to the Audit Committee all material
information related to any covered transaction in order to give
the Audit Committee an opportunity to authorize, approve or
ratify the covered
10
transaction based upon its determination that the covered
transaction is fair and reasonable and on terms no less
favorable to the Company than could be obtained in a comparable
arm’s length transaction with an unrelated third party. A
copy of the Policy and Procedures Regarding Transactions with
Related Persons is available on SUPERVALU’s website at
http://www.supervalu.com.
Click on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.”
Other
Matters Relating to Directors
Susan E. Engel, one of our directors, served as chairwoman and
chief executive officer of Lenox Group Inc., a tabletop,
giftware and collectibles company, from November 1996 until she
retired in January 2007. In November 2008, Lenox Group filed a
voluntary petition for relief under Chapter 11 in the
U.S. Bankruptcy Court for the Southern District of New York.
ELECTION
OF DIRECTORS (ITEM 1)
Directors elected at the 2008 Annual Meeting of Stockholders
were elected for a three-year term, which expires in 2011. In
December 2008, the Board voted to declassify the Board, thereby
repealing the staggered terms of directors, beginning with the
class of directors up for election at the 2009 Annual Meeting of
Stockholders. Beginning with that meeting, directors are elected
for a term of one year. If a vacancy exists or occurs during the
year, the vacant directorship may be filled by the vote of the
remaining directors until the next annual meeting, at which time
the stockholders elect a director to fill the vacancy. There are
currently 12 members of the Board.
Our bylaws require directors to be elected by the majority of
the votes cast with respect to such director in uncontested
elections. 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. In a contested
election, a situation in which the number of nominees exceeds
the number of directors to be elected, the standard for election
of directors will be a plurality of the shares represented in
person or by proxy at any such meeting and entitled to vote on
the election of directors. A plurality means that the nominees
receiving the highest number of votes cast will be elected.
If a nominee who is serving as a director is not elected at the
Annual Meeting, under Delaware law the director would continue
to serve on the Board as a “holdover director.”
However, under our bylaws, any director who fails to be elected
must offer to tender his or her resignation to the Board of
Directors. The Corporate Governance and Nominating Committee
will then make a recommendation to the Board whether to accept
or reject the resignation, or whether other action should be
taken. The Board of Directors will act on the Corporate
Governance and Nominating Committee’s recommendation and
publicly disclose its decision and the rationale behind it
within 90 days from the date the election results are
certified. The director who tenders his or her resignation will
not participate in the Board’s decision. If a nominee who
was not already serving as a director is not elected at the
Annual Meeting, under Delaware law that nominee would not become
a director and would not serve on the Board of Directors as a
“holdover director.”
Donald R. Chappel, Irwin S. Cohen, Ronald E. Daly, Susan E.
Engel, Philip L. Francis, Edwin C. Gage, Craig R. Herkert,
Steven S. Rogers, Matthew E. Rubel, Wayne C. Sales and Kathi P.
Seifert are nominated for one-year terms expiring in 2012.
Mr. Lillis is retiring from the Board and will not be
standing for re-election. The Board of Directors has been
informed that each nominee is willing to serve as a director.
However, if any nominee is unable to serve or for good cause
will not serve, the proxy may be voted for another person as the
persons named on the proxies decide.
The following sets forth information, as of May 15, 2011,
concerning 11 nominees whose terms of office will continue after
the Annual Meeting, based on the current composition of the
Board.
11
NOMINEES
FOR ELECTION AS DIRECTORS AT THE ANNUAL MEETING
FOR A ONE-YEAR TERM EXPIRING IN 2012
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DONALD. R. CHAPPEL, age 59
• Mr.
Chappel, a director of SUPERVALU since 2010, is Senior Vice
President and Chief Financial Officer for The Williams
Companies, Inc., an integrated energy company, which, through
its subsidiaries, finds, produces, gathers, processes and
transports natural gas. Williams’ operations are
concentrated in the Pacific Northwest, Rocky Mountains, Gulf
Coast and Eastern Seaboard. Mr. Chappel joined Williams in 2003.
Among many qualifications, Mr. Chappel brings significant
experience in finance and accounting as a senior finance
executive of several large public companies.
• Mr.
Chappel also serves as Chief Financial Officer and a director of
Williams Partners GP LLC, the general partner of Williams
Partners L.P. He also served as Chief Financial Officer and
director of Williams Pipeline GP LLC, the general partner of
Williams Pipeline Partners L.P. until its merger with Williams
Partners L.P. in 2010.
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IRWIN S. COHEN, age 70
• Mr.
Cohen, a director of SUPERVALU since 2003, is a Retired Partner
of Deloitte & Touche LLP, a professional services firm,
providing audit, tax, financial advisory and consulting
services. Mr. Cohen, who joined Deloitte in 1962 and became a
partner in 1972, served as the Global Managing Partner of the
Consumer Products, Retail and Services Practice of Deloitte from
1997 to 2003. Mr. Cohen also founded and led Deloitte’s
Consumer Products, Retail and Services Practice as it grew to
serve over 100 countries in Europe, Asia Pacific and the
Americas. Mr. Cohen brings considerable experience in retail and
accounting as a result of his experience with Deloitte.
• Mr.
Cohen is also a Director and Chair of the Audit Committee of
Stein Mart Inc., a discount fashion retailer with sales in
excess of $1 billion. In addition, he serves on the Board of
several private and not-for-profit companies and is a Senior
Advisor to Peter J. Solomon Company.
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RONALD E. DALY, age 64
• Mr.
Daly, a director of SUPERVALU since 2003, is the former Chief
Executive Officer and President of Océ USA Holding, Inc., a
subsidiary of Océ N.V., a supplier of digital document
management technology and services. Mr. Daly held that position
from 2002 to 2004. Prior to that, Mr. Daly spent 38 years
with RR Donnelley, holding various positions in operations,
eventually becoming the president of its largest business unit.
Among many qualifications, Mr. Daly brings significant
experience in business strategy as a senior executive of large
companies, as well as significant supply chain and technology
experience.
• Mr.
Daly is also a director of United States Cellular Corporation,
the nation’s fifth-largest, full-service wireless carrier.
In addition, he serves as an adjunct professor of strategy and
leadership at Loyola University of Chicago and teaches executive
MBA courses. Mr. Daly also serves on four non-profit
boards.
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SUSAN E. ENGEL, age 64
• Ms.
Engel, a director of SUPERVALU since 1999, is the Chief
Executive Officer and President of PorteroLuxury, Inc., an
internet retailer of luxury pre-owned and vintage personal
accessories. Prior to joining PorteroLuxury in 2009, Ms. Engel
served as Chairwoman and CEO of Lenox Group Inc. (the successor
to Department 56, Inc.), a designer and marketer of tabletop,
giftware and collectible products from 1996 until she retired in
January 2007. Among many qualifications, Ms. Engel brings
significant consulting and retail experience, including as a
senior executive of a public company.
• Ms.
Engel is also a director of Wells Fargo & Company, a
diversified financial services company with $1.2 trillion in
assets.
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PHILIP L. FRANCIS, age 64
• Mr.
Francis, a director of SUPERVALU since 2006, is the Executive
Chairman of PetSmart, Inc., a specialty retailer of services and
solutions for pets. Mr. Francis transitioned to the role of
Executive Chairman in 2009, following his retirement as Chief
Executive Officer at PetSmart, a position he held from 1999 to
2009. Prior to joining PetSmart, Mr. Francis was the President
and CEO of Shaw’s Supermarkets. Among many qualifications,
Mr. Francis brings significant retail industry experience, as
well as experience in business strategy as a senior executive of
a large public company.
• Mr.
Francis is also a director of CareFusion Corporation, which is a
leading, global medical device company created through the
spinoff of Cardinal Health Inc.’s clinical and medical
products businesses. From 2006 to 2009, Mr. Francis was a
director of Cardinal Health, Inc.
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EDWIN C. GAGE, age 70
• Mr.
Gage, a director of SUPERVALU since 1986, is the Chairman of
GAGE Marketing Group, L.L.C., an integrated marketing services
company, which he founded in 1991. Prior to that, Mr. Gage
served as the President, COO and CEO of Carlson Companies, Inc.,
which is one of the largest marketing services companies in the
world. Among many qualifications, Mr. Gage brings significant
experience in marketing and business strategy as a senior
executive of a large company.
• Mr.
Gage also serves on the Board of several private and
not-for-profit companies.
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CRAIG R. HERKERT, age 51
• Mr.
Herkert, a director of SUPERVALU since 2009, was named the
Company’s Chief Executive Officer and President in 2009.
Prior to joining SUPERVALU, Mr. Herkert served from 2004 to 2009
as the President and Chief Executive Officer of the Americas for
Wal-Mart Stores, Inc., an operator of retail stores. He also
served as the Executive Vice President of Wal-Mart International
from 2000 to 2003, following his promotion from Senior Vice
President and Chief Operating Officer in 2003. In addition to
his experience leading the Company, Mr. Herkert brings years of
retail experience to our Board.
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STEVEN S. ROGERS, age 53
• Mr.
Rogers, a director of SUPERVALU since 1998, is the Gordon and
Llura Gund Family Distinguished Professor of Entrepreneurship at
the Kellogg School of Management at Northwestern University. He
joined the faculty of Kellogg in 1995. Prior to his teaching
career, Mr. Rogers owned and operated two manufacturing firms
and one retail operations firm and worked as a consultant with
Bain & Company. Among many qualifications, Mr. Rogers
brings significant experience in corporate entrepreneurship and
entrepreneurial finance.
• Mr.
Rogers is also a director of Amcore Financial, Inc., which
provides a full range of consumer and commercial banking
services and has banking assets of $4.4 billion, Oakmark Mutual
Funds--Harris Associates, which provides investment advice to
wealthy individuals and institutions, S.C. Johnson & Son,
Inc., a manufacturer of household cleaning, personal care and
insecticide products, and W.S. Darley & Company, a
manufacturer and distributor of fire engines and equipment. He
was a board member of Bally Total Fitness until 2007 and
Duquesne Light Holdings, Inc. until 2006. In addition, he is
active with many not-for-profit corporations.
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MATTHEW E. RUBEL, age 53
• Mr.
Rubel, a director of SUPERVALU since 2010, is Chairman,
President and Chief Executive Officer of Collective Brands,
Inc., the holding company for Payless ShoeSource, Collective
Brands Performance + Lifestyle Group and Collective Licensing
International and a leader in lifestyle, fashion and performance
brands for footwear and related accessories. Mr. Rubel joined
Collective Brands in 2005 as Chief Executive Officer and
President. Among many qualifications, Mr. Rubel brings
significant retail and branding experience and experience as a
chief executive officer of a large public company, including
managing a significant transformation.
• From
2006 to 2008, Mr. Rubel was a director of Furniture
Brands, Inc.
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WAYNE C. SALES, age 61
• Mr.
Sales, a director of SUPERVALU since 2006 and Non-Executive
Chairman of the Board since 2010, retired as the Vice-Chairman
of Canadian Tire Corporation Limited, a retail, financial
services and petroleum company. Mr. Sales served as
Vice-Chairman of Canadian Tire until 2007, following his tenure
as President and Chief Executive Officer, a position that he
held from 2000 to 2006. Under Mr. Sales’ leadership,
Canadian Tire’s retail sales increased nearly $2 billion.
Among many qualifications, Mr. Sales brings significant
experience in retail marketing, merchandising, supply chain and
financial services as chief executive officer of a large
retail and financial services company.
• Mr.
Sales is also a director and Chair of the Compensation Committee
of Tim Hortons Inc., which is the fourth largest publicly-traded
quick service restaurant chain in North America based on market
capitalization. Additionally, he serves as a director and Chair
of the Compensation Committee of Georgia Gulf Corp, a leading,
integrated North American manufacturer of chemicals and
vinyl-based building and home improvement products. Mr. Sales
also serves as a director and chair of the Nominating/Governance
Committee of Discovery Air, a specialty aviation
company.
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KATHI P. SEIFERT, age 62
• Ms.
Seifert, a director of SUPERVALU since 2006, retired as
Executive Vice President for the Kimberly-Clark Corporation, a
global health and hygiene product manufacturing company, after
26 years of service. Ms. Seifert held the position of
Executive Vice President there from 1999 to 2004. Among many
qualifications, Ms. Seifert brings significant consumer product
goods and sales and marketing experience.
• Ms.
Seifert is also a director of Appleton Papers, Inc., which
produces carbonless, thermal, security and performance packaging
products; Eli Lilly and Company, which discovers, develops,
manufactures and sells pharmaceutical products; Lexmark
International, Inc., which provides businesses of all sizes with
a broad range of printing and imaging products, solutions and
services; and Revlon, Inc., a worldwide cosmetics and beauty
care products company.
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DIRECTOR
COMPENSATION
The Corporate Governance and Nominating Committee reviews the
compensation of our directors on a periodic basis. Based upon
its review, the Corporate Governance and Nominating Committee
makes recommendations to the Board of Directors. Annual
compensation for non-employee directors is comprised of the
following components: cash compensation, consisting of an annual
retainer and meeting fees, and equity compensation, consisting
of stock options and an annual deferred retainer payable in
SUPERVALU common stock. Each of these components is described in
more detail below.
Annual
Board/Committee Chairperson Retainer
Non-employee directors receive an annual cash retainer of
$80,000 per year. The Non-Executive Chairman receives an
additional annual cash retainer of $75,000. In addition, the
Chairperson of each Board committee receives the following
annual retainer: Audit Committee Chairperson, $25,000; and
Corporate Governance and Nominating, Finance and Leadership
Development and Compensation Committee Chairpersons, $20,000.
Also, each non-employee director committee member receives an
annual retainer for each committee served on of $10,000 per
committee, except Audit Committee members who receive $15,000
for their service on the Audit Committee. Beginning in 2011,
members of the Leadership Development and Compensation Committee
receive an additional $5,000 for their service on this committee.
Stock
Options
Non-employee directors are granted stock options with an
exercise price equal to the fair market value of the
Company’s common stock on the date of grant. For fiscal
2011, each non-employee director was granted 6,140 options.
Options are fully exercisable upon grant.
14
Annual
Deferred Stock Retainer
Each non-employee director is paid $60,000 on each July 1 in the
form of SUPERVALU common stock that is credited in share units
to the SUPERVALU INC. Directors’ Deferred Compensation Plan
(2009 Restatement) (“Directors’ Deferred Compensation
Plan”) described below. The number of shares credited to
each director’s account is based upon the price of the
Company’s common stock on each July 1.
Retirement
Program
Effective June 27, 1996, our Directors Retirement Program
was discontinued and benefits previously earned by directors
were frozen. A non-employee director first elected to our Board
prior to June 27, 1996, will receive an annual payment of
$20,000 per year for the number of years of the director’s
service on the Board prior to June 27, 1996, but for not
more than ten years of such service, after such director ceases
to be a member of the Board. Directors first elected to the
Board after June 27, 1996, do not participate in the
Directors Retirement Program. As a result of this benefit,
Mr. Gage is entitled to an aggregate of $200,000 (payable
in annual installments of $20,000) following his resignation
from the Board. Mr. Lillis is entitled to an aggregate of
$20,000 following his resignation from the Board.
Deferred
Compensation Program
Directors may elect to defer payment of their retainer and
committee fees under the Directors’ Deferred Compensation
Plan. Under the Directors’ Deferred Compensation Plan, a
non-employee director may elect to have payment of all or a
portion of the director’s fees deferred and credited to a
deferred stock account or into a deferred cash account. If a
director chooses to defer fees into a deferred stock account,
SUPERVALU then credits the director’s account with an
additional amount equal to 10 percent of the amount of fees
the director has elected to defer and contributes the total
amount in the director’s account to an irrevocable grantor
(“rabbi”) trust that uses the amount to purchase
shares of SUPERVALU common stock, which are then allocated to an
account for the director under the trust. Each director is
entitled to direct the trustee to vote all shares allocated to
the director’s account in the trust. The common stock in
each director’s deferred stock account will be distributed
to the director after the director leaves the Board. Until that
time, the trust assets remain subject to the claims of our
creditors. Dividends paid on the shares of common stock held in
each of the directors’ accounts are used to purchase
additional shares for these accounts each quarter. If a director
chooses to defer all or a portion of fees into a deferred cash
account, interest is payable on the amount of deferred cash
compensation at an annual rate equal to the twelve-month rolling
average of Moody’s Corporate Average Bond Index for the
twelve-month period ending in the month of October preceding the
first day of the calendar year. Payment in cash is made from the
cash account following retirement from the Board.
Reimbursements
and Expenses
Non-employee directors are reimbursed for expenses (including
costs of travel, food and lodging) incurred in attending Board,
committee and stockholder meetings. While travel to such
meetings may include the use of the Company aircraft, if
available or appropriate under the circumstances, the directors
generally use commercial air service. Directors are also
reimbursed for participation in director education programs in
the amount of $7,500 for each director, plus expenses, to be
used every two years. Reimbursements for any non-employee
director did not exceed the $10,000 threshold in fiscal 2011 and
thus are not included in “Director Compensation for Fiscal
2011” below.
From time to time, spouses may also join non-employee directors
on the Company aircraft when a non-employee director is
traveling to or from a Board, committee or stockholder meeting
or any other meeting of the Company where such non-employee
director is invited to do so by the CEO. This travel may result
in the non-employee director recognizing income for tax
purposes. The Company does not reimburse the non-employee
director for the taxes incurred in connection with such income.
Non-employee directors are eligible to use the Company aircraft
for personal purposes to the extent that the Company aircraft is
already traveling on Company business or at the direction of the
CEO and there is available space for such non-employee director.
Any such personal use of the Company aircraft may result in the
non-
15
employee director recognizing income for tax purposes, and the
Company does not reimburse the non-employee directors for any
taxes incurred in connection with such personal use.
DIRECTOR
COMPENSATION FOR FISCAL 2011
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Change in
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Pension Value
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and
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Fees
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Nonqualified
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Earned or
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Deferred
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Paid In
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Stock
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Option
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Compensation
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Name(1)
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Cash(2)
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Awards(3)
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Awards(4)
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Earnings(5)
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Total
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Donald R. Chappel
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$
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105,000
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$
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70,500
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$
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23,167
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$
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—
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$
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198,667
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Irwin S. Cohen
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130,000
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60,000
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23,167
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—
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213,167
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Ronald E. Daly
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100,000
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62,000
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23,167
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—
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185,167
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Susan E. Engel
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120,000
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60,000
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23,167
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—
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203,167
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Philip L. Francis
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105,000
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70,500
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23,167
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—
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198,667
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Edwin C. Gage
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100,000
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60,000
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23,167
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—
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183,167
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Charles M. Lillis
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120,000
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60,000
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23,167
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—
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203,167
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Steven S. Rogers
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105,000
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60,000
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23,167
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—
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188,167
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Matthew E. Rubel
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100,000
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65,000
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23,167
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—
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188,167
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Wayne C. Sales
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185,000
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78,500
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23,167
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—
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286,667
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Kathi P. Seifert
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105,000
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60,000
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23,167
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—
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188,167
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(1) |
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Craig Herkert, our Chief Executive Officer and President, and
Jeffrey Noddle, our former Executive Chairman, are not included
in this table because they are, or were in Noddle’s case,
employees of SUPERVALU and received no compensation for service
as a director. Mr. Noddle and Mr. Herkert’s
compensation are shown in the Summary Compensation Table under
“Executive Compensation.” |
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(2) |
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Reflects the amount of cash compensation earned in fiscal 2011
for Board and committee service. Amounts shown include any
amounts deferred by the director under the Director’s
Deferred Compensation Plan described above. |
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(3) |
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Includes: (a) the annual deferred stock retainer for each
director as described above and (b) any additional shares
of common stock awarded to a director as a result of the
director’s deferral of fees earned under the
Directors’ Deferred Compensation Plan described above. The
grant date fair value of stock awards are calculated in
accordance with Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (“FASB
ASC 718”) on the same basis as used for financial
reporting purposes for the fiscal year. Refer to Notes 1
and 9 to the Consolidated Financial Statements in our Annual
Report on
Form 10-K
for the fiscal year ended February 26, 2011 for our policy
and assumptions made in determining the grant date fair value of
share-based payments. The amounts shown above also reflect the
full grant date fair value of stock awards made during fiscal
2011. As of February 26, 2011, the last day of our fiscal
year, each of the non-employee directors had shares credited to
their account under the Directors’ Deferred Compensation
Plan Trust as follows: Mr. Chappel, 15,520 shares;
Mr. Cohen, 18,359 shares; Mr. Daly,
24,992 shares; Ms. Engel, 50,249 shares;
Mr. Francis, 41,398 shares; Mr. Gage,
26,611 shares; Mr. Lillis, 64,342 shares;
Mr. Rogers, 23,987 shares; Mr. Rubel,
10,392 shares; Mr. Sales, 48,293 shares and
Ms. Seifert, 19,176 shares. |
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(4) |
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The amounts shown reflect the full grant date fair value of
option awards made during fiscal 2011. The grant date fair value
of option awards are calculated in accordance with FASB
ASC 718 on the same basis as used for financial reporting
purposes for the fiscal year. Refer to Notes 1 and 9 of our
Annual Report on
Form 10-K
for the fiscal year ended February 26, 2011 for our policy
and assumptions made in the valuation of share-based payments.
As of February 26, 2011, the last day of our fiscal year,
each of the non-employee directors had the following stock
options outstanding: Mr. Chappel, 6,140 shares;
Mr. Cohen, 48,420 shares; Mr. Daly,
42,420 shares; Ms. Engel, 60,420 shares;
Mr. Francis, 36,420 shares; Mr. Gage,
60,420 shares; Mr. Lillis, 48,420 shares;
Mr. Rogers, 57,615 shares; Mr. Rubel,
6,140 shares; Mr. Sales, 30,420 shares and
Ms. Seifert, 30,420 shares. |
16
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(5) |
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Garnett L. Keith Jr., who retired from the Board of Directors in
June 2010, received payment pursuant to a deferred compensation
plan that was discontinued in 1996 of $45,287 reflecting
above-market interest on deferred compensation. |
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Summary
The Leadership Development and Compensation Committee (the
“Committee”) of the Board of Directors oversees the
design and administration of our executive compensation
programs, which are designed to:
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•
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Align compensation with long-term stockholder value and the
execution of strategic business imperatives;
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•
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Ensure that the majority of compensation opportunities are
through incentive programs that reward executives based on the
achievement of corporate results
(“pay-for-performance”); and
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•
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Provide a compensation opportunity that is generally targeted at
the median of the competitive market (as defined below).
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The depressed economic environment that began in fiscal 2008
continued to negatively impact the Company in fiscal 2011. With
that backdrop, the Committee sought to compensate our executives
in a way that would appropriately recognize their contributions
to the Company during fiscal 2011, while remaining consistent
with the Company’s
pay-for-performance
objectives and the best interests of our stockholders. These
considerations produced the following compensation actions for
fiscal 2011:
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•
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The Committee determined that, as part of its focus on
pay-for-performance,
base salaries for the executive officers described in our
Summary Compensation Table (the “NEOs”) and certain
other officers would not be increased. These base salaries have
remained frozen since fiscal 2008, other than in connection with
promotions to positions of greater responsibility in fiscal 2011;
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•
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We did not pay any bonuses to our NEOs in fiscal 2011 under our
annual cash incentive plan. There was no payout under any
component of our annual cash incentive plan because earnings per
share did not meet the threshold amount established by the
Committee; and
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•
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We did not implement a new cycle of our three-year performance
program for our NEOs or other employees in fiscal 2011.
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As a result, the Committee set targeted compensation for fiscal
2011 to be less than targeted compensation for fiscal 2010.
Actual financial performance for fiscal 2011 was below our
goals, and consequently each of our NEOs was paid less than the
target amount of such NEO’s fiscal 2011 targeted annual
compensation (as defined below) in alignment with the
Committee’s
pay-for-performance
philosophy.
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Fiscal 2011 Targeted
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Fiscal 2011 Actual
|
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Name
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Annual Compensation(1)
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Annual Compensation(1)
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Craig R. Herkert
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$
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4,137,000
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$
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850,000
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Julie Dexter Berg
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1,098,000
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(2)
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453,400
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(3)
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Janel S. Haugarth
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1,312,000
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(2)
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635,500
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(2)(3)
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Wayne R. Shurts
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969,000
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(2)
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413,800
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(3)
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Sherry M. Smith
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904,000
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(2)
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502,500
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(2)
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The fiscal 2011 targeted annual compensation, as approved by the
Committee, was comprised of base salary, annual cash incentive
award assuming achievement of target performance, and stock
options granted during the fiscal year valued as of the grant
date using a Black-Scholes valuation. The fiscal 2011 targeted
amounts differ from the amounts reflected in the Summary
Compensation Table primarily because the Summary Compensation
Table reflects a variety of other elements of compensation, such
as perquisites, changes in pension value and earnings on
deferred compensation, which the Committee does not consider
when setting annual compensation levels for the NEOs.
17
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(1) |
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Targeted and actual annual compensation do not include any
one-time awards of equity under special circumstances including
retention or upon hire. |
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(2) |
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Targeted annual compensation amounts reflect partial year
amounts for base salary and annual bonus for Ms. Dexter
Berg and Mr. Shurts due to their status as new hires during
fiscal 2011. Targeted and actual annual compensation for
Ms. Haugarth and Ms. Smith reflect different pay
levels and different bonus opportunities for positions held
during fiscal 2011. |
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(3) |
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Includes amounts paid under a discretionary bonus program. |
Competitive
Benchmarking
Competitive Market. The Company seeks to offer
its executives compensation opportunities targeted at the median
of the competitive market. In assessing competitiveness, the
Committee reviews compensation information from a peer group, as
well as compensation information available from third-party
surveys. This information is used to inform the Committee of
competitive pay practices, including the relative mix among
elements of compensation. This information is also used to
determine, as a point of reference for each NEO, a midpoint (or
median) within the competitive compensation range, for base
salary, annual cash incentive, long-term equity incentives and
the total of these elements.
The Committee also recognizes that comparative pay assessments
have inherent limitations, due to the lack of precise
comparability of executive positions between companies, as well
as the companies themselves. As a result, the competitive
medians are used only as a guide and are not the sole
determinative factor in making compensation decisions for the
NEOs. In exercising its judgment, the Committee looks beyond the
competitive market data and considers individual job
responsibilities, individual performance, experience,
compensation history, internal comparisons and compensation at
former employers (in the case of new hires) and Company
performance.
For fiscal 2011, our competitive comparison group consisted of
the following 25 retail and distribution companies:
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Comparison Group
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AmerisourceBergen Corporation
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Kohl’s Corporation
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Sears Holdings Corporation
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AutoNation, Inc.
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The Kroger Co.
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Staples, Inc.
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Best Buy Co. Inc.
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Lowe’s Companies, Inc.
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Sysco Corporation
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Cardinal Health, Inc.
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Macy’s, Inc.
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Target Corporation
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Costco Wholesale Corporation
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McKesson Corporation
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The TJX Companies, Inc.
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CVS Caremark Corporation
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Office Depot, Inc.
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Wal-Mart Stores, Inc.
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The Gap, Inc.
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Publix Super Markets, Inc.
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Walgreen Co.
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The Home Depot, Inc.
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Rite Aid Corporation
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J.C. Penney Company, Inc.
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Safeway Inc.
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The 25-company competitive comparison group approved by the
Committee and disclosed above was reviewed during fiscal 2011 by
our compensation consultant, Towers Watson, with input from the
Committee, and was selected from
U.S.-based
companies based on revenue, size and industry.
Generally, the Committee will maintain the continuity of the
companies within the competitive comparison group from year to
year; however, changes in the composition of the group may occur
as companies enter or exit the publicly-traded marketplace, as
the relative size of the companies in the comparison group
changes or as business conditions warrant change. For fiscal
2011, there were no changes to this group from the prior fiscal
year.
The Committee reviewed this list for fiscal 2012 and determined
that AutoNation, Inc. should be removed from the peer group. The
Committee added Dollar General Corporation, which the Committee
believes is in line with the Company’s strategy related to
the
Save-A-Lot
banner.
The third-party compensation surveys used by the Committee
provide data on similarly sized organizations based on revenue
and industry. In fiscal 2011, the Committee looked at
third-party retail, wholesale and general
18
industry surveys conducted by Towers Watson. Those surveys were
the Towers Watson Executive Compensation Database, the Towers
Watson Retail/Wholesale Executive Compensation Database and the
Towers Watson Industry Report on Top Management
Compensation — Retail/Wholesale Sector.
Compensation Process. Compensation for our
NEOs other than the CEO is reviewed and approved by the
Committee on an annual basis. As part of that review, the
Committee takes into consideration competitive market analyses
and the recommendations of our human resources staff, the
compensation consultants and the CEO. The Committee will review
periodically the relationship of target compensation levels for
each NEO relative to the compensation target for the CEO. In
addition, the Committee periodically will review internal equity
relationships for comparable positions across peer companies.
For the CEO, the Committee prepares compensation recommendations
for ultimate review and approval by the Board of Directors, with
the CEO abstaining from such review and approval. In making its
compensation recommendations regarding our CEO, the Committee
takes into consideration the Board of Directors’ annual
performance evaluation of our CEO, internal equity
relationships, competitive market analyses for other chief
executive officers based on publicly available information and
information provided by our human resources staff and
compensation consultant. Recommendations with respect to
compensation of our CEO are not shared with the CEO during this
process.
For fiscal 2011, the review for all executives was conducted by
the Committee in June 2010 at the Committee’s regular
meeting. Compensation for Ms. Dexter Berg and
Mr. Shurts were determined separately from the general
review process in connection with commencement of their
employment with the Company. Compensation for Ms. Smith in
her new role as Chief Financial Officer was determined in
connection with her appointment to the position in December
2010. Compensation for Ms. Haugarth in her new role as
Executive Vice President, Merchandising and Logistics was
determined in connection with her promotion in January 2011.
Compensation Consultant. The Committee has the
authority to retain outside compensation consultants to assist
in the evaluation of executive compensation or to otherwise
advise the Committee. The Committee directs the work of such
consultants, and decisions regarding compensation of our NEOs
are ultimately made by the Committee and, in the case of our
CEO, by the Board.
The Committee retained Towers Watson as its compensation
consultant to assist the Committee with its evaluation and
assessment of executive compensation. The compensation
consultant also assisted the Committee with the review of its
self-selected comparison group used for purposes of benchmarking
compensation levels and relative mix for fiscal 2011.
In fiscal 2010, the Committee adopted a policy whereby any
consulting work done by Towers Watson with expected billings in
excess of $25,000, excluding work for the Committee, is subject
to pre-approval by the Committee. For fiscal 2011, the aggregate
amount of fees for additional services, not including consulting
related to broad-based plans, provided by Towers Watson did not
exceed $120,000.
Pay-for-Performance
Our executive compensation programs are structured to provide a
mix of fixed and variable compensation, with variable
compensation delivered via short-term and long-term incentives
that help to align the priorities and actions of executives with
the interests of our stockholders. Therefore, a significant
portion (44 to 79 percent in fiscal 2011) of targeted
compensation is performance-based.
The variable components of the compensation program are designed
so that our executives’ total compensation will be above
the median of our competitive market when our results are above
the target levels of performance established by the Committee
and below the median of our competitive market when our results
fall below this targeted performance. These target performance
levels are established based on both internal standards and
external comparisons. This relative fluctuation in compensation
value increases or decreases by the significant use of
equity-based components in the program. Therefore, actual total
compensation realized, as compared to established targets, will
significantly increase or decrease in direct correlation to our
stock price. Significant use of equity-based components, along
with stringent ownership and retention requirements (described
below), ensures alignment of executive compensation with
stockholder value.
19
For fiscal 2011, the principal elements of our executive
compensation program consisted of base salary, annual cash
incentive and long-term equity incentives in the form of stock
options. The table below illustrates how these primary
components of target executive compensation are allocated
between performance and non-performance based components, how
performance-based compensation is allocated between annual and
long-term components and how total compensation is allocated
between cash and equity components. For our NEOs in fiscal 2011,
except for Mr. Noddle and Ms. Knous, that target
allocation was as follows:
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2011 Fiscal Year Compensation Mix
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(Base Salary, Annual Cash Incentive Opportunity and Long-Term
Equity Incentive Opportunity)(1)
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Percent of Performance-
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Based Total
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Percent of Total
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Compensation
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Compensation That is:
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That is:
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|
Not
|
|
|
|
|
|
Long-
|
|
|
Percent of Total Compensation That is:
|
|
|
|
Performance-
|
|
|
Performance-
|
|
|
|
|
|
Term
|
|
|
Cash
|
|
|
Equity-
|
|
Name
|
|
Based(2)
|
|
|
Based(3)
|
|
|
Annual(4)
|
|
|
(5)
|
|
|
Based(6)
|
|
|
Based(7)
|
|
|
Craig R. Herkert
|
|
|
79
|
%
|
|
|
21
|
%
|
|
|
39
|
%
|
|
|
61
|
%
|
|
|
51
|
%
|
|
|
49
|
%
|
Julie Dexter Berg
|
|
|
61
|
|
|
|
39
|
|
|
|
64
|
|
|
|
36
|
|
|
|
78
|
|
|
|
22
|
|
Janel S. Haugarth
|
|
|
59
|
|
|
|
41
|
|
|
|
69
|
|
|
|
31
|
|
|
|
82
|
|
|
|
18
|
|
Wayne R. Shurts
|
|
|
62
|
|
|
|
38
|
|
|
|
60
|
|
|
|
40
|
|
|
|
75
|
|
|
|
25
|
|
Sherry M. Smith
|
|
|
44
|
|
|
|
56
|
|
|
|
70
|
|
|
|
30
|
|
|
|
87
|
|
|
|
13
|
|
|
|
|
(1) |
|
Total compensation for purposes of this table is different than
the Total column used in the Summary Compensation Table under
“Executive Compensation” below. Total compensation as
used above is the total of base salary and annual cash and
long-term equity incentive opportunities, both at the target
level only. |
|
(2) |
|
Sum of target annual cash incentive and target long-term equity
incentives divided by target total compensation. |
|
(3) |
|
Base salary divided by target total compensation. |
|
(4) |
|
Target annual cash incentive divided by the sum of target annual
cash incentive and target long-term equity incentives. |
|
(5) |
|
Target long-term equity incentives divided by the sum of target
annual cash incentive and target long-term equity incentives. |
|
(6) |
|
Sum of base salary and target annual cash incentive divided by
target total compensation. |
|
(7) |
|
Target long-term equity incentives divided by target total
compensation. |
The Committee believes that this compensation mix aligns with
the Company’s compensation philosophy of
pay-for-performance
and goals because:
|
|
|
|
•
|
a significant percentage (ranging from 44 to 79 percent) of
each NEO’s compensation is performance-based;
|
|
|
•
|
a significant percentage (ranging from 30 to 61 percent) of
each NEO’s performance-based compensation serves to
motivate and retain the executives for the Company’s
long-term success; and
|
|
|
•
|
a significant percentage (ranging from 13 to 49 percent) of
each NEO’s compensation is equity-based, which serves to
tie executive compensation to the long-term enhancement of
stockholder value.
|
Base
Salaries
SUPERVALU provides the NEOs and other executives with an annual
base salary that is not subject to performance risk. Salary
levels for our NEOs are based on individual performance and
experience, job responsibility, internal equity and salary
levels that take into consideration the competitive market. For
fiscal 2011, the Committee determined that, as part of its focus
on
pay-for-performance,
base salaries for NEOs and certain other officers would not be
increased. These base salaries have remained frozen since fiscal
2008, other than in cases of promotions.
20
Annual
Cash Incentive
In General. SUPERVALU provides its NEOs and
other executives an annual cash incentive opportunity in order
to align executive compensation with the achievement of
SUPERVALU financial goals that support our business plans.
The Committee establishes annual target award opportunities
expressed as a percentage of base salary paid during the fiscal
year, as well as threshold and maximum award opportunities
expressed as a percentage of base salary. For fiscal 2011,
annual cash incentive opportunities for the NEOs ranged from
100 percent to 150 percent (for the CEO and Executive
Chairman only) of base salary paid for the year, at target
levels of performance, up to a possible range of
200 percent to 300 percent (for the CEO and Executive
Chairman only) of base salary for performance meeting or
exceeding the maximum performance level.
Performance Measures and Objectives. For
fiscal 2011, the Committee selected, for each of our NEOs who
are Corporate Executives as noted in the table below, Corporate
Net Earnings as the primary performance measure for our annual
cash incentive plan because it believes that corporate net
earnings growth correlates directly with our business objectives
and the creation of market value for our stockholders. The other
components for Corporate Executives are Corporate Same Store
Sales and Corporate Cash Flow. Corporate Same Store Sales are
used as a metric as they are a strong indicator of growth in our
core business. Corporate Cash Flow is of critical importance as
a measure of our ability to generate cash to pay down our debt.
For each of our NEOs who are Retail/Supply Chain and
Merchandising Executives as noted in the table below, the
primary performance measure is Business Unit Earnings (before
interest and taxes). The Business Unit Earnings performance
measure for the Retail/Supply Chain and Merchandising Executives
corresponds to our business units which align executive
incentives more closely with the business unit over which they
have responsibility and control. The other components for
Retail/Supply Chain and Merchandising Executives are Corporate
Cash Flow and Business Unit Same Store Sales.
The fiscal 2011 performance measures for our annual cash
incentive plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
|
|
Corporate
|
|
|
/Supply Chain
|
|
Performance Measure
|
|
Executives(1)
|
|
|
Executives(2)
|
|
|
Corporate Net Earnings
|
|
|
50
|
%
|
|
|
0
|
%
|
Corporate Same Store Sales
|
|
|
30
|
|
|
|
0
|
|
Business Unit Earnings
|
|
|
0
|
|
|
|
50
|
|
Business Unit Same Store Sales
|
|
|
0
|
|
|
|
30
|
|
Corporate Cash Flow
|
|
|
20
|
|
|
|
20
|
|
|
|
|
(1) |
|
Includes Mr. Herkert, Mr. Noddle, Ms. Knous,
Ms. Smith and Mr. Shurts (together, the
“Corporate Executives”). |
|
(2) |
|
Includes Ms. Dexter Berg and Ms. Haugarth (together,
the “Retail/Supply Chain and Merchandising
Executives”). |
The goals that the Committee establishes for Corporate Cash
Flow, Corporate Same Store Sales, Business Unit Earnings and
Business Unit Same Store Sales are intended to encourage our
executives to meet or exceed operational goals. The
threshold-level goals can be characterized as “stretch but
attainable,” meaning that based on historical performance,
although attainment of this performance level is uncertain, it
can reasonably be anticipated that threshold performance may be
achieved, while the target and maximum goals represent
increasingly challenging and aggressive levels of performance.
In setting the threshold performance level for Corporate Net
Earnings, Corporate Cash Flow and Corporate Same Store Sales for
fiscal 2011, the Committee looked at the Company’s
budgeting process, rather than year over year growth. In
addition, the Committee took into account the difficult economic
environment.
21
For fiscal 2011, the Corporate Net Earnings performance goals
under our annual cash incentive plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
Percent of Target
|
|
Performance Level
|
|
Net Earnings
|
|
|
Award Payout
|
|
|
Maximum
|
|
$
|
451
|
|
|
|
200
|
%
|
Target
|
|
$
|
434
|
|
|
|
100
|
|
Threshold
|
|
$
|
395
|
|
|
|
30
|
|
For fiscal 2011, Corporate Cash Flow performance goals under our
annual cash incentive plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
Percent of Target
|
|
Performance Level
|
|
Cash Flow
|
|
|
Award Payout
|
|
|
Maximum
|
|
$
|
700
|
|
|
|
200
|
%
|
Target
|
|
$
|
600
|
|
|
|
100
|
|
Threshold
|
|
$
|
550
|
|
|
|
30
|
|
Corporate Cash Flow is generally defined by the Committee to be
earnings before interest, taxes, depreciation and amortization
(EBITDA) plus one-time transaction costs related to store
closures and stock option expense, less interest, dividends,
taxes and capital expenditures, net of proceeds from routine
asset sales.
For fiscal 2011, Corporate Same Store Sales performance goals
under our annual cash incentive plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
Percent of Target
|
|
Performance Level
|
|
Same Store Sales
|
|
|
Award Payout
|
|
|
Maximum
|
|
|
|
%-1.0
|
|
|
200
|
%
|
Target
|
|
|
|
%-2.0
|
|
|
100
|
|
Threshold
|
|
|
|
%-4.0
|
|
|
30
|
|
While each of the components of the annual cash incentive can
pay out independently of one another, the Committee imposed an
earnings per share floor of $1.85 before any of the performance
objectives pay out for NEOs. As we did not hit this threshold,
there was no payout under the annual cash incentive for fiscal
2011.
The Company does not publicly disclose specific business unit
earnings or same store sales objectives, as its business plans
are highly confidential. Disclosing specific objectives would
provide competitors and other third parties with insights into
the planning process, as well as the strategic initiatives of
the Company, and would therefore cause competitive harm.
Discretionary Adjustments. The Committee
reviews the quality of the Company’s performance and
determines the extent to which performance goals under the
annual cash incentive plan are met in April of each year, after
completion of the Company’s financial statements. In making
this determination, the Committee may apply discretion such that
the numbers used for our annual cash incentive performance goals
may differ from the numbers reported in the Company’s
financial statements. In applying this discretion, the Committee
may exclude all or a portion of both the positive or negative
effect of external events that are outside the control of our
executives, such as natural disasters, litigation or regulatory
changes in accounting or taxation standards. These adjustments
may also exclude all or a portion of both the positive or
negative effect of unusual or significant strategic events that
are within the control of our executives, but that are
undertaken with an expectation of improving our long-term
financial performance, including restructurings, acquisitions or
divestitures. For fiscal 2011, the Committee did not use its
discretion to adjust actual results.
Actual Award Payments. Although we exceeded
the threshold for Corporate Cash Flow, there was no payout under
any component because earnings per share did not meet the
threshold amount established by the Committee. Corporate Net
Earnings, Corporate Same Store Sales, Business Unit Earnings and
Business Unit Same Store Sales did not meet the thresholds set
by the Committee.
Annual Discretionary Bonus Pool. An annual
discretionary bonus pool exists from which our CEO may make
discretionary cash awards to the NEOs and other corporate
officers (other than himself) in recognition of their
22
extraordinary achievements during any given fiscal year. Awards
from the pool may not exceed $1,000,000 in the aggregate or
$100,000 to any one individual during any fiscal year. For
fiscal 2011, Mr. Herkert provided discretionary awards to
certain of the Company’s officers, including awards in the
amount of $25,000 to Ms. Dexter Berg, $100,000 to
Ms. Haugarth and $50,000 to Mr. Shurts.
Long-Term
Equity Incentives
In general. In fiscal 2011, the Committee
determined that stock options were the appropriate vehicle to
link compensation with Company performance and the interests of
our stockholders. As a result, the Committee chose not to
implement another cycle of the Company’s Long-Term
Incentive Program involving the grant of performance shares.
Stock Options. SUPERVALU provides the NEOs and
other executives with stock options in order to tie a
significant portion of each executive’s total compensation
to the long-term financial results of the Company and to align
incentives with the interests of our stockholders. Stock options
directly link a portion of each executive’s compensation to
stock price appreciation.
For fiscal 2011, SUPERVALU provided a grant of stock options for
all NEOs, excluding Mr. Noddle. Each NEO’s stock
option grant was established by the Committee or Board, in the
case of the CEO.
Stock options generally have a “grant date” that is
the same date as the date of Committee approval, or Board
approval in the case of our CEO, and have an exercise price
equal to the fair market value on the grant date. In the event
that stock markets are closed for trading on the approval date,
options are then priced based on the fair market value of the
Company’s stock on the first day in which markets are open
for trading following the approval date. In addition, stock
options currently have a seven-year contractual exercise term
and vest 25 percent on each of the next four anniversaries
of the date of grant, subject to the following post-termination
and
change-of-control
provisions:
|
|
|
|
|
Event
|
|
Award Vesting
|
|
Exercise Term(3)
|
|
Death, Disability or Retirement(1)
|
|
Accelerated
|
|
Remaining Term
|
Other Termination
|
|
None
|
|
Variable(2)
|
Change of Control
|
|
Accelerated
|
|
Remaining Term
|
|
|
|
(1) |
|
Retirement is defined as termination at or after age 55
with 10 or more years of service. If termination occurs because
of death or disability before the age and years of service for
retirement have been satisfied, the remaining exercise term will
be two years following termination or the remainder of the
original contractual term, if shorter. |
|
(2) |
|
For grants issued prior to fiscal 2011, the term in which to
exercise was two years, or the remainder of the original
contractual term, if shorter. For grants issued in fiscal 2011
and beyond, the term is one year, or the remainder of the
original contractual term, if shorter. |
|
(3) |
|
The Company has the right to repurchase shares issued under
stock options within six months before or three months after
termination for cause or if the terminated executive breaches
the confidentiality or non-competition provisions in the award
agreement. |
In fiscal 2011, the Committee approved revised forms of equity
award agreements, including stock option award agreements, under
the 2007 Stock Plan for future grants of equity awards to
officers of the Company, including NEOs. The revisions include a
double trigger for the vesting of awards following a change of
control, which requires termination of employment under special
circumstances within two years of the change of control.
In April 2007, our equity compensation plans were amended to
change the definition of fair market value from the average of
the opening and closing market price of the Company’s stock
to the closing market price of the Company’s stock on the
applicable date; provided, however, for options approved by the
Committee or the Board on a date that Company executives would
otherwise be restricted from trading in our stock as a result of
a “black-out” trading restriction relating to the
release of earnings results or other corporate matters, the
grant date will be delayed until the first trading day after the
expiration of the black-out period. We do not have any other
program, plan or practice to time stock option grants to
executives in coordination with the release of material
non-public
23
information. In addition, we have a black-out policy that
prohibits employees from trading in our stock during periods
when they are aware of material non-public information.
Stock options granted prior to April 2005 have a
10-year
contractual exercise term, and provide for an automatic one-time
reload or restoration stock option upon the exercise of the
original stock option using shares of SUPERVALU stock to pay the
exercise price. The restoration stock option is for the same
number of shares used to pay the exercise price and applicable
withholding taxes, has an exercise price equal to the fair
market value of SUPERVALU stock on the date of exercise and is
exercisable for the remaining contractual exercise term of the
original stock option.
Restricted Stock Units. The Committee
recommended to the Board of Directors that the restricted stock
units granted to Mr. Noddle pursuant to a retention
agreement dated October 12, 2006 (the “Retention
Agreement”) be accelerated. The Board of Directors approved
this acceleration in light of the announcement of
Mr. Noddle’s retirement from the Company in June 2010
and because the objectives of the Retention Agreement had been
met. As a result of this acceleration, upon the effective date
of Mr. Noddle’s retirement, the remaining 228,868 of
the 305,157 units initially granted under the Retention
Agreement vested and were reduced to 101,320 shares based
on the Company’s average stock price for the 90 days
immediately preceding his retirement date.
Executive
Change of Control Policy
SUPERVALU’s objective is to provide NEOs and other
executives with protection under a market competitive
change-of-control
severance agreement. The Committee believes that this benefit
helps to maintain the impartiality and objectivity of our
executives in the event of a
change-of-control
situation so that our stockholders’ interests are
protected. The Committee reviews this
change-of-control
policy periodically to address whether these protections are
consistent with those provided in our competitive market and to
be in compliance with federal tax rules affecting nonqualified
deferred compensation.
In fiscal 2010, the Committee approved a new form of
change-of-control
agreement and severance plan, after making a determination that
certain changes were needed to bring the Company’s program
in line with the Committee’s philosophy and current market
trends. As a result of the Committee’s review, benefits
paid out to executives pursuant to a change of control would be
reduced from benefits available under previous change of control
agreements.
24
The current change of control agreement is summarized below:
|
|
|
|
|
Agreement Provision
|
|
|
|
Description
|
|
Severance Triggers
|
|
•
|
|
Involuntary termination without cause, as defined below, or
voluntary resignation for good reason, as defined below, within
2 years following a change of control, or in anticipation
of a change of control.
|
|
|
•
|
|
“Good reason” is defined as a reduction in base salary
or target annual cash incentive, duties and responsibilities
that are materially and adversely diminished, forced relocation
of more than 45 miles, failure to provide for assumption of
agreement or material breach of the agreement by the Company.
|
|
|
•
|
|
“Cause” is defined as continued failure to perform
duties, conviction of a felony, conduct materially and
demonstrably injurious to the Company, material act of personal
dishonesty that results in substantial personal enrichment or
material violation of certain Company policies.
|
|
|
|
|
|
Severance Benefits
|
|
•
|
|
3 times for the CEO, 1 time for Mr. Noddle and 2 times for
the other NEOs, of base salary and target annual cash incentive,
plus welfare benefits continuation.
|
|
|
•
|
|
Earned but unpaid salary and accrued vacation and annual bonus
plan and long-term incentive plan amounts due but not yet paid.
|
|
|
•
|
|
Pro rata annual cash incentive for year of termination.
|
|
|
•
|
|
Accelerated vesting of all nonvested equity awards at change of
control.
|
|
|
•
|
|
“Best net” reduction of compensation to avoid excise
tax.
|
|
|
|
|
|
Covenants
|
|
•
|
|
Non-disclosure of confidential information, non-competition,
non-solicitation of employees, non-solicitation of existing or
prospective customers, vendors and suppliers, return of property
and non-disparagement covenants.
|
Executive
Severance Plan
In fiscal 2010, the Committee approved the Executive &
Officer Severance Pay Plan, which provides for severance
benefits for NEOs who are notified on or after May 2, 2009
that their employment is involuntarily terminated without cause,
subject to certain exclusions. The severance plan in effect for
fiscal 2011 is summarized below:
|
|
|
|
|
Agreement Provision
|
|
|
|
Description
|
|
Severance Triggers
|
|
•
|
|
Involuntary termination without cause, subject to certain
exclusions.
|
|
|
•
|
|
“Cause” is defined as continued failure to
perform duties, conviction of a felony, conduct materially and
demonstrably injurious to the Company, personal dishonesty that
results in substantial personal enrichment or failure to comply
with certain Company policies.
|
Severance Benefits
|
|
•
|
|
2 times for the CEO and 1.5 times for the other NEOs of annual
base salary at time of termination.
|
|
|
•
|
|
2 times for the CEO and 1.5 times for the other NEOs of the
average of the performance results (expressed as a percentage)
used to determine the NEOs’ bonus amounts under the annual
bonus plan for the preceding three years (or all bonus amounts,
if the NEO has been employed fewer than three years), multiplied
by the NEO’s current target bonus amount.
|
|
|
•
|
|
Pro rata annual cash incentive and payments for each long-term
incentive plan cycle not completed as of the termination date.
|
|
|
•
|
|
Reimbursement for COBRA coverage for medical and dental
insurance.
|
|
|
•
|
|
Repayment of severance benefits received by a NEO who the
Company wishes to rehire in any capacity within six months of
the termination date.
|
Deferred
Compensation
Under the Company’s Executive Deferred Compensation Plan
(2008 Statement), eligible executives may elect to defer on a
pre-tax basis up to 50 percent of base salary and may elect
to defer up to 100 percent of annual incentive
25
compensation during the plan year. The program allows executives
to save for retirement on a tax-deferred basis. Under this
unfunded plan, amounts deferred by the executive accumulate on a
tax-deferred basis and are credited at an effective annual
interest rate equal to Moody’s Corporate Bond Index, set as
of October 1 of the preceding year. The Executive Deferred
Compensation Plan also provides for additional
make-up
contributions that are credited to the participant’s
account in the Executive Deferred Compensation Plan.
Retirement
Benefits
Consistent with our overall compensation philosophy, SUPERVALU
maintains a retirement plan for all non-union employees under
which a maximum of $195,000 per year in annual benefits may be
paid upon retirement based on limitations imposed by
Section 415 of the Internal Revenue Code (the
“Code”). Effective December 31, 2007, this plan
was closed to new participants and service crediting for
existing participants was discontinued. Compensation crediting
will be discontinued effective December 31, 2012, at which
time, accrued benefits for all participants will be frozen. In
addition, SUPERVALU maintains a non-qualified supplemental
executive retirement plan and a non-qualified excess benefit
plan for certain highly-compensated employees, including certain
of the NEOs, that allow for the payment of additional benefits
so that such retiring employees may receive, in the aggregate,
at least the benefits they would have been entitled to receive
if the Code did not impose maximum limitations. Our retirement
plans are described in more detail following the Pension
Benefits Table under “Executive Compensation.”
SUPERVALU provides post-retirement death benefits for certain
designated retired executive officers, which would include those
NEOs that meet the retirement definition of termination at or
after age 55 with 10 or more years of service. Currently,
Ms. Haugarth meets the retirement definition mentioned
above. Mr. Noddle and Ms. Knous met the retirement
definition when they retired from the Company in fiscal 2011.
The death benefit is fixed at an amount approximately equal to,
on an after-tax basis, an eligible executive’s final base
salary. The benefits may be funded through life insurance
policies owned by SUPERVALU. No new participants are eligible to
receive these benefits.
For all employees who participate in the SUPERVALU STAR 401(k)
Plan, including NEOs, the Company makes a matching contribution
of $1 for every $1 the participant contributes, up to the first
four percent of pay and $0.50 for each $1 the participant
contributes on the next two percent of pay. The Company may also
make additional profit-sharing contributions, at the discretion
of the Company’s management, of up to a maximum of three
percent of the eligible participant’s compensation.
Perquisites
SUPERVALU provides our NEOs and other executives with a limited
perquisites program. This limited perquisite program is
consistent with the Committee’s focus on performance-based
compensation. The Committee will continue to review this
perquisites program periodically.
The Company continues to reimburse executives for an annual
physical to encourage executives to be physically healthy, such
that executives can better focus on the business affairs of the
Company. Similarly, providing our CEO with limited personal use
of the Company’s aircraft encourages and allows the CEO to
make travel arrangements that maximize the efficient use of
limited personal time, and allow more time to focus on the
Company’s business for the benefit of the Company’s
stockholders. The Company does not provide a
gross-up to
cover the individual income tax incurred when the corporate
aircraft is used for personal purposes.
26
For fiscal 2011, SUPERVALU provided the following executive
benefits and perquisites to our NEOs:
|
|
|
|
|
Executive Benefit
|
|
|
|
Description
|
|
Post-Retirement Death Benefit Coverage
|
|
•
|
|
A death benefit of 140 percent of the executive’s
final base salary paid to the beneficiary.
|
|
|
•
|
|
Current participants have been grandfathered into this program;
no new enrollment has been allowed since fiscal 2008.
|
Personal Aircraft Usage
|
|
•
|
|
Limited to Mr. Herkert and his family and Mr. Noddle and his
spouse, through the date of Mr. Noddle’s retirement from
the Company.
|
|
|
•
|
|
Up to 30 hours of personal travel per year at the expense
of the Company.
|
|
|
•
|
|
No tax gross-up to cover the individual income tax on personal
travel.
|
Executive Physicals
|
|
•
|
|
Annual reimbursement for the full cost of an executive physical.
|
Executive
Stock Ownership and Retention Program
SUPERVALU has an executive stock ownership and retention program
for our NEOs and other executives so that these executives will
experience the same downside risk and upside potential as our
stockholders experience. The current ownership requirements for
our executives, including the NEOs, are as follows:
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Position
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Multiple of Base Salary
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Chief Executive Officer
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5 times
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Chief Financial Officer(1)
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4 times
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Remaining Executive Vice Presidents(2)
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3 times
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Corporate Senior Vice Presidents & Presidents
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2 times
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Group Vice Presidents & Vice Presidents
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1 times
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(1) |
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Applies to Ms. Smith. |
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(2) |
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Applies to all other NEOs, excluding Mr. Noddle and
Ms. Knous. |
For purposes of complying with our Executive Stock Ownership and
Retention Program, stock is considered owned if the shares are
owned outright or in a vested tax qualified or nonqualified
deferred compensation plan, if the shares are owned by immediate
family members or legal entities established for their benefit,
and if the shares are in the form of unvested restricted stock.
Outstanding unexercised stock options are not considered owned
for purposes of our program. Our NEOs and other executives may
not pledge owned shares as security or enter into any risk
hedging arrangements.
Prior to achieving their ownership objective, executives are
required to retain shares equal to 100 percent of the net
after-tax profit received from stock option exercises or the
vesting of restricted stock. After they meet their ownership
goal, NEOs and other executives are required to retain shares
equal to 50 percent of the net after-tax profit received
from stock option exercises or the vesting of restricted stock.
This 50 percent retention requirement can be satisfied on
either an individual basis for each stock option exercise or
restricted stock vesting event, or on a cumulative basis by
aggregating all shares held from the exercise of stock options
or the vesting of restricted stock from the date the executive
first met our stock ownership requirement.
For fiscal 2011, all of our NEOs are in compliance with our
program.
In addition, the Company’s policies prohibit certain
employees, including all NEOs, from engaging in short sales,
hedging and trading in put and call options, with respect to the
Company’s securities.
27
Recoupment
Policy
To reflect sound governance and be consistent with market
practice, in February 2011, the Committee approved a recoupment
policy for executive officers of the Company. Specifically, the
recoupment (or “clawback”) policy allows for recovery
of the following compensation elements:
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•
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all amounts paid under the annual cash incentive plan, including
any discretionary amounts that were paid with respect to any
fiscal year that is restated; and
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•
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all awards under the Long-Term Incentive Program, the 2007 Stock
Plan or any preceding or successor plans that were issued or
paid with respect to any fiscal year that is restated.
|
This policy applies in the event there is an accounting
restatement due to the material noncompliance under any
financial reporting requirements which results in
performance-based compensation that would have been a lower
amount if it had been calculated based on such restated results.
Deductibility
of Compensation
Section 162(m) of the Code limits the deductibility of
compensation paid to certain of the NEOs to $1 million
annually. Compensation that is “qualified performance-based
compensation” generally is not subject to the
$1 million deduction limit. Thus, amounts paid under our
bonus plans and grants of stock options will generally be fully
deductible for tax purposes. Salary and restricted stock awards
are subject to the Section 162(m) $1 million deduction
limit. We consider the tax deductibility of any element of
executive compensation as a factor in our overall compensation
program. It is our intent to qualify all compensation paid to
our top executives, where practicable under our compensation
policies, for deductibility under the Section 162(m) limits
in order to maximize our income tax deductions. However, the
Committee may approve compensation that may not qualify for the
compensation deduction if, in light of all applicable
circumstances, it would be in our best interest for such
compensation to be paid.
Fiscal
2012
The Committee approved the following changes to the annual cash
incentive plan for fiscal 2012: (1) the primary performance
measure will be earnings per share, as it correlates with the
creation of stockholder value; (2) the secondary
measurement will be same store sales; and (3) each NEO will
have an individualized third component. The Committee also
approved a multi-year performance award program for the fiscal
2012-2014
performance period. This program rewards associates for
improvements in the Company’s market capitalization over
the performance period. Under the program, approximately 800
participants were awarded a percentage interest in the increase
in market capitalization, if any, created over the three-year
performance period beginning February 27, 2011 (the first
day of the Company’s fiscal 2012 year ) and ending
February 22, 2014 (the last day of the Company’s
fiscal 2014 year). The payout due to a participant will be
determined by multiplying the participant’s award
percentage times the increase in market capitalization over the
three-year performance period. The increase in market
capitalization is calculated by multiplying the increase in the
Company’s stock price over the performance period times
212,200,000 shares. The beginning stock price used for the
program was set at $11.00, which represented the closing price
of the Company’s stock , rounded to the nearest quarter of
a dollar, as of April 21, 2011. The ending stock price will
be equal to the average of the closing stock price for the 20
trading days subsequent to the release of fourth quarter
earnings for fiscal 2014 rounded to the nearest quarter of a
dollar. The maximum amount of the increase in the stock price
considered under the program is capped at $25.00. The maximum
amount of the increase in market capitalization that will be
paid to the 800 participants is 4.8%. At the end of the
three-year period, the amount due to a participant will be paid
one-half (50%) in cash and one-half (50%) in shares of SUPERVALU
common stock at the then current market price without further
restriction. The program provides for a minimum,
performance-based payout opportunity equal to 25% of the target
award value, assuming $5.7 billion or more of EBIDTA is
generated over the three-year performance period. The Committee
believes that the three-year measurement period aligns with the
estimated time to fully realize the business transformation
currently underway at the Company.
28
REPORT OF
THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
The Leadership Development and Compensation Committee has
reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of
Regulation S-K
with management and, based on such review and discussion, the
Committee recommended to the Board that the Compensation
Discussion and Analysis be included in this Proxy Statement.
Respectfully submitted,
Susan E. Engel, Chairperson
Ronald E. Daly
Edwin C. Gage
Charles M. Lillis
Matthew E. Rubel
Kathi P. Seifert
29
EXECUTIVE
COMPENSATION
The following tables and accompanying narrative disclosure
should be read in conjunction with the “Compensation
Discussion and Analysis,” which sets forth the objectives
of SUPERVALU’s executive compensation and benefit program.
SUMMARY
COMPENSATION TABLE
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Change in
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Pension
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Non-
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Value and
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Equity
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Non-
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Incentive
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Qualified
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Plan
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Deferred
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Stock
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Option
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Compen-
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Compensation
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All Other
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Name and
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Salary(1)
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Bonus(2)
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Awards(3)
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Awards(3)
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sation(4)
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Earnings(5)
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Compensation(6)
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Total
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Principal Position
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Year
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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($)
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Craig R. Herkert
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2011
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$
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850,000
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$
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—
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$
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—
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$
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2,012,300
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$
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—
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$
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—
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$
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108,535
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$
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2,970,835
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Chief Executive Officer and
President(7)
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2010
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653,846
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—
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6,781,654
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2,000,004
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398,183
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—
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956,325
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10,790,012
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Julie Dexter Berg
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2011
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428,366
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75,000
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162,900
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344,886
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—
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—
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113,911
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1,125,063
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Executive Vice President and
Chief Marketing Officer
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Janel S. Haugarth
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2011
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535,468
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100,000
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—
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241,476
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—
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442,324
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24,414
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1,343,682
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Executive Vice President,
Merchandising and Logistics
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2010
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521,540
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—
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858,160
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298,388
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258,480
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860,601
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12,526
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2,809,695
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Pamela K. Knous
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2011
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395,527
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—
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—
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241,476
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—
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209,593
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1,584,456
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2,431,052
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Former Executive Vice
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2010
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663,465
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—
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332,556
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422,716
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269,360
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254,414
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23,548
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1,966,059
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President and Chief
Financial Officer
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2009
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676,224
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—
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1,580,147
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682,967
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—
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109,110
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16,697
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3,065,145
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Jeffrey Noddle
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2011
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368,917
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—
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1,756,532
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—
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—
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1,384,973
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333,506
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3,843,928
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Former Executive Chairman
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2010
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1,141,885
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—
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—
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—
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695,391
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975,456
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62,810
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2,875,542
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2009
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1,163,844
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—
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6,864,947
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2,860,660
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—
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1,154,688
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84,999
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12,129,138
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Wayne R. Shurts
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2011
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363,846
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175,000
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307,200
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387,735
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—
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—
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67,857
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1,301,638
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Executive Vice President and Chief Information Officer
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Sherry M. Smith
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2011
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502,478
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—
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169,350
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120,738
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|
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—
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|
125,484
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15,280
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933,330
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Executive Vice President and Chief Financial Officer
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(1) |
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Amounts shown are not reduced to reflect the NEOs’
elections, if any, to defer receipt of salary under the
Executive Deferred Compensation Plan described in
“Compensation Discussion and Analysis.” |
|
(2) |
|
Amounts for fiscal 2011 for Ms. Dexter Berg and
Mr. Shurts reflect bonuses paid in connection with the
executives’ hire with SUPERVALU and amounts paid under a
discretionary bonus program. Amount paid to Ms. Haugarth
reflects a bonus paid under a discretionary bonus program. |
|
(3) |
|
The amount shown is the aggregate grant date fair value and does
not reflect compensation actually received by the NEO. This
amount consists of the aggregate grant date fair value of grants
of stock options and other restricted stock awards in fiscal
years 2011, 2010 and 2009, as applicable, computed in accordance
with FASB ASC Topic 718. Refer to Notes 1 and 9 to the
Consolidated Financial Statements in our Annual Report on
Form 10-K
for the fiscal year ended February 26, 2011 for our policy
and assumptions made in the valuation of stock options. The fair
value of each restricted stock award is estimated as of the date
of grant based on the underlying price of the Company’s
stock. The amounts in these columns do not include estimated
forfeitures. |
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The fair value of performance-based awards is based on the
probable outcome of the performance conditions which is the
target payout under the awards. The maximum payout under such
awards (based on the grant date fair value) assuming the highest
level of performance for awards granted in fiscal 2010 under the
Company’s Long-Term Incentive Program for the
2010-2012
performance period are as follows: Mr. Herkert, $3,563,289;
Ms. Haugarth, $388,320; Ms. Knous, $665,112; and
Ms. Smith, $271,042. Ms. Dexter Berg and
Mr. Shurts do not participate in the
2010-2012
Long-Term Incentive Program. |
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The amounts for fiscal 2011 in the Stock Awards column for
Mr. Noddle represent the incremental fair value of certain
restricted stock units which were accelerated in connection with
his retirement from the Company in June 2010. |
30
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(4) |
|
Non-equity incentive plan compensation represents any awards
earned in recognition of achievement of performance goals under
the annual cash incentive plan. |
|
(5) |
|
This column represents both changes in pension value for the
NEOs and above market interest earnings on deferred
compensation. The changes in pension values were as follows:
Ms. Haugarth, $435,857 for fiscal 2011 and $851,218 for
fiscal 2010; Ms. Knous, $208,741 for fiscal 2011, $254,414
for fiscal 2010 and $109,110 for fiscal 2009; Mr. Noddle,
$1,378,135 for fiscal 2011, $974,144 for fiscal 2010 and
$1,154,214 for fiscal 2009; and Ms. Smith, $125,484 for
fiscal 2011. Mr. Herkert, Ms. Dexter Berg and
Mr. Shurts are not eligible for pension due to their start
date with the Company. The above market interest earnings on
deferred compensation were as follows: Ms. Haugarth, $6,467
for fiscal 2011 and $9,383 for fiscal 2010; Ms. Knous, $852
for fiscal 2011; and Mr. Noddle, $6,838 for fiscal 2011,
$1,312 for fiscal 2010 and $474 for fiscal 2009. |
|
(6) |
|
The following components comprise the amounts of “All Other
Compensation” for the NEOs for fiscal 2011: |
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401(k)
|
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Life
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All Other
|
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Tax
|
|
|
Name
|
|
Contributions
|
|
Insurance(a)
|
|
Misc Comp(b)
|
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Gross-Ups(c)
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Total
|
|
Craig R. Herkert
|
|
$
|
12,250
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|
|
$
|
2,208
|
|
|
$
|
94,077
|
(d)
|
|
$
|
—
|
|
|
$
|
108,535
|
|
Julie Dexter Berg
|
|
|
12,846
|
|
|
|
828
|
|
|
|
72,238
|
|
|
|
27,999
|
|
|
|
113,911
|
|
Janel S. Haugarth
|
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|
17,946
|
|
|
|
2,507
|
|
|
|
3,961
|
|
|
|
—
|
|
|
|
24,414
|
|
Pamela K. Knous
|
|
|
1,276
|
|
|
|
1,889
|
|
|
|
1,581,291
|
|
|
|
—
|
|
|
|
1,584,456
|
|
Jeffrey Noddle
|
|
|
2,368
|
|
|
|
—
|
|
|
|
331,138
|
|
|
|
—
|
|
|
|
333,506
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|
Wayne R. Shurts
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9,690
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|
|
|
706
|
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37,381
|
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|
20,080
|
|
|
|
67,857
|
|
Sherry M. Smith
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13,595
|
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|
|
785
|
|
|
|
900
|
|
|
|
—
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15,280
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(a)
|
Represents premiums paid for current employee life insurance
coverage under policies maintained by the Company for the
benefit of the NEO. This benefit is described in
“Compensation Discussion and Analysis.”
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(b)
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For Mr. Herkert, this amount represents $1,730 for his
executive physical, $900 in employer contribution to his Health
Savings Account (“HSA”) and $91,447 associated with
use of the Company aircraft. For Ms. Dexter Berg, this
amount represents $72,238 for relocation expenses associated
with joining the Company. For Ms. Haugarth, this amount
represents $3,061 for her executive physical and $900 in
employer contribution to her HSA. For Ms. Knous, this
amount represents $9,950 for her executive physical, $537 in
employer contribution to her HSA, $137,848 for banked vacation,
$1,428,636 paid as severance and $4,320 for COBRA reimbursement.
For Mr. Noddle, this amount represents $1,965 for his
executive physical, $294 in employer contribution to his HSA and
$328,879 for banked vacation. For Mr. Shurts, this amount
represents $2,725 for his executive physical, $156 in employer
contribution to his HSA and $34,500 for relocation expenses
associated with joining the Company. For Ms. Smith, this
amount represents $900 in employer contribution to her HSA.
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(c)
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Represents tax reimbursements on income imputed to
Ms. Dexter Berg and Mr. Shurts for moving expenses
associated with joining the Company and moving to Minnesota.
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(d)
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We calculate the incremental cost to the Company of any personal
use of the corporate aircraft based on the cost of fuel,
trip-related maintenance, crew travel expenses, on-board
catering, landing fees, trip-related hangar and parking costs
and other variable costs. Because the corporate aircraft is
primarily for business travel, we do not include the fixed costs
that do not change based on usage, such as pilot’s
salaries, the purchase cost of the corporate aircraft and the
cost of maintenance not related to trips. The Company does not
permit personal use of the corporate aircraft for any executive
or their spouse other than for Mr. Herkert and his family
with a maximum of 30 hours of personal travel per year
allowed.
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(7) |
|
The fiscal 2010 salary for Mr. Herkert represents payments
for a partial year at an annual salary of $850,000. As discussed
in the Compensation Discussion and Analysis, excluding new hires
and promotions, base salaries for the NEOs remained frozen in
fiscal 2011. |
31
GRANTS OF
PLAN-BASED AWARDS FOR FISCAL 2011
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future Payouts
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
Under Equity Incentive Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
Stock and
|
|
|
|
Grant
|
|
|
Approval
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
Awards
|
|
|
Craig R. Herkert
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
$
|
382,500
|
|
|
$
|
1,275,000
|
|
|
$
|
2,550,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
$
|
12.68
|
(3)
|
|
$
|
2,012,300
|
|
Julie Dexter Berg
|
|
|
4/21/10
|
|
|
|
2/3/10
|
|
|
$
|
135,000
|
|
|
$
|
450,000
|
|
|
$
|
900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(4)
|
|
|
|
|
|
|
|
|
|
|
162,900
|
|
|
|
|
4/21/10
|
|
|
|
2/3/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
16.29
|
(2)
|
|
|
103,410
|
|
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
12.68
|
(3)
|
|
|
241,476
|
|
Janel S. Haugarth
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
$
|
187,500
|
|
|
$
|
625,000
|
|
|
$
|
1,250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
12.68
|
(3)
|
|
|
241,476
|
|
Pamela K. Knous
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
$
|
118,658
|
|
|
$
|
395,527
|
|
|
$
|
791,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
12.68
|
(3)
|
|
|
241,476
|
|
Jeffrey Noddle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne R. Shurts
|
|
|
4/26/10
|
|
|
|
4/14/10
|
|
|
$
|
129,000
|
|
|
$
|
430,000
|
|
|
$
|
860,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(5)
|
|
|
|
|
|
|
|
|
|
|
307,200
|
|
|
|
|
4/26/10
|
|
|
|
4/14/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
15.36
|
(2)
|
|
|
146,259
|
|
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
12.68
|
(3)
|
|
|
241,476
|
|
Sherry M. Smith
|
|
|
6/4/10
|
|
|
|
6/4/10
|
|
|
$
|
174,000
|
|
|
$
|
580,000
|
|
|
$
|
1,160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
12.68
|
(3)
|
|
|
120,738
|
|
|
|
|
8/11/10
|
|
|
|
8/10/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(6)
|
|
|
|
|
|
|
|
|
|
|
169,350
|
|
|
|
|
(1) |
|
Represents range of possible awards under our annual cash
incentive plan. The actual amount of the award earned for fiscal
2011 is presented in the “Non-Equity Incentive Plan
Compensation” column of the Summary Compensation Table. The
annual cash incentive plan is described above in the
“Compensation Discussion and Analysis.” The maximum
amount reflects a payout of 200 percent of the target award. |
|
(2) |
|
Represents options granted under our 2007 Stock Plan. The
options vest with respect to 20 percent of the shares on
the grant date and an additional 20 percent of the shares
on each of the first, second, third and fourth anniversaries of
the grant date. |
|
(3) |
|
Represents options granted under our 2007 Stock Plan. The
options vest with respect to 25 percent in four equal
annual installments on each of the first four anniversaries of
the grant date. |
|
(4) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with the hiring of Ms. Dexter Berg as
our Executive Vice President, Chief Marketing Officer. The award
vests in full on April 21, 2013. Dividends are paid on the
restricted stock. |
|
(5) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with the hiring of Mr. Shurts as our
Executive Vice President and Chief Information Officer. The
award vests in full on April 26, 2013. Dividends are paid
on the restricted stock. |
|
(6) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with Ms. Smith’s appointment as our
interim Chief Financial Officer. The award vests in full on
August 11, 2012. Dividends are paid on the restricted stock. |
32
OUTSTANDING
EQUITY AWARDS AT FEBRUARY 26, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock that
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Held that
|
|
|
have not
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
have not
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested(22)
|
|
|
($)
|
|
|
Craig R. Herkert
|
|
|
160,728
|
(2)
|
|
|
241,089
|
(2)
|
|
$
|
15.90
|
|
|
|
5/26/2016
|
|
|
|
235,850
|
(14)
|
|
$
|
2,016,518
|
|
|
|
|
|
|
|
|
500,000
|
(1)
|
|
$
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
160,728
|
|
|
|
741,089
|
|
|
|
|
|
|
|
|
|
|
|
235,850
|
|
|
$
|
2,016,518
|
|
Julie Dexter Berg
|
|
|
4,000
|
(3)
|
|
|
16,000
|
(3)
|
|
|
16.29
|
|
|
|
4/21/2017
|
|
|
|
10,000
|
(15)
|
|
$
|
85,500
|
|
|
|
|
|
|
|
|
60,000
|
(1)
|
|
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
4,000
|
|
|
|
76,000
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
85,500
|
|
Janel S. Haugarth
|
|
|
12,000
|
(4)
|
|
|
18,000
|
(4)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
40,000
|
(16)
|
|
$
|
342,000
|
|
|
|
|
33,000
|
(5)
|
|
|
22,000
|
(5)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(6)
|
|
|
10,000
|
(6)
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
12,619
|
(21)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(11)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(9)
|
|
|
|
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
6,703
|
(21)
|
|
|
|
|
|
|
28.83
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
2,265
|
(20)
|
|
|
|
|
|
|
28.83
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
1,832
|
(21)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(8)
|
|
|
|
|
|
|
33.56
|
|
|
|
7/18/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
2,408
|
(21)
|
|
|
|
|
|
|
36.31
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
9,608
|
(21)
|
|
|
|
|
|
|
35.47
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(1)
|
|
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
204,435
|
|
|
|
110,000
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
$
|
342,000
|
|
Pamela K. Knous
|
|
|
42,500
|
(13)
|
|
|
|
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
30,000
|
(17)
|
|
$
|
256,500
|
|
|
|
|
85,000
|
(13)
|
|
|
|
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(13)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
(13)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
41,470
|
(13)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
(13)
|
|
|
|
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
7,209
|
(13)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,129
|
(13)
|
|
|
|
|
|
|
34.16
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,152
|
(13)
|
|
|
|
|
|
|
33.93
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
6,034
|
(13)
|
|
|
|
|
|
|
31.80
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
10,887
|
(13)
|
|
|
|
|
|
|
30.62
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
46,481
|
(13)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(13)
|
|
|
|
|
|
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
(13)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
543,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
$
|
256,500
|
|
Jeffrey Noddle
|
|
|
200,000
|
(13)
|
|
|
|
|
|
|
30.08
|
|
|
|
5/30/2012
|
|
|
|
60,000
|
(17)
|
|
$
|
513,000
|
|
|
|
|
1,998
|
(13)
|
|
|
|
|
|
|
18.99
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
210,326
|
(13)
|
|
|
|
|
|
|
18.99
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
196,893
|
(13)
|
|
|
|
|
|
|
30.73
|
|
|
|
5/26/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
(13)
|
|
|
|
|
|
|
32.71
|
|
|
|
6/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
291,486
|
(13)
|
|
|
|
|
|
|
29.58
|
|
|
|
6/2/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
107,079
|
(13)
|
|
|
|
|
|
|
48.64
|
|
|
|
6/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
178,678
|
(13)
|
|
|
|
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
110,835
|
(13)
|
|
|
|
|
|
|
33.27
|
|
|
|
6/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
177,607
|
(13)
|
|
|
|
|
|
|
29.31
|
|
|
|
6/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
1,942
|
(13)
|
|
|
|
|
|
|
29.31
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
68,070
|
(13)
|
|
|
|
|
|
|
29.31
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
1,794,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
$
|
513,000
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock that
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Held that
|
|
|
have not
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
have not
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested(22)
|
|
|
($)
|
|
|
Wayne R. Shurts
|
|
|
6,000
|
(7)
|
|
|
24,000
|
(7)
|
|
|
15.36
|
|
|
|
4/26/2017
|
|
|
|
20,000
|
(18)
|
|
$
|
171,000
|
|
|
|
|
|
|
|
|
60,000
|
(1)
|
|
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
6,000
|
|
|
|
84,000
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
$
|
171,000
|
|
Sherry M. Smith
|
|
|
25,000
|
(11)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
15,000
|
(19)
|
|
$
|
128,250
|
|
|
|
|
3,999
|
(12)
|
|
|
|
|
|
|
15.90
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
27,500
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
27,500
|
(9)
|
|
|
|
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(6)
|
|
|
6,000
|
(6)
|
|
|
43.59
|
|
|
|
4/20/14
|
|
|
|
|
|
|
|
|
|
|
|
|
18,000
|
(5)
|
|
|
12,000
|
(5)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(4)
|
|
|
18,000
|
(4)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(1)
|
|
|
12.68
|
|
|
|
6/4/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
5,586
|
(21)
|
|
|
|
|
|
|
31.57
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
10,651
|
(21)
|
|
|
|
|
|
|
35.05
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
2,670
|
(21)
|
|
|
|
|
|
|
35.05
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
2,777
|
(21)
|
|
|
|
|
|
|
35.48
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
2,647
|
(21)
|
|
|
|
|
|
|
35.48
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
162,330
|
|
|
|
66,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
$
|
128,250
|
|
|
|
|
(1) |
|
This non-qualified stock option vests at the rate of
25 percent per year, with vesting dates of June 4,
2011, June 4, 2012, June 4, 2013 and June 4, 2014. |
|
(2) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 26,
2009, May 26, 2010, May 26, 2011, May 26, 2012
and May 26, 2013. |
|
(3) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of April 21,
2010, April 21, 2011, April 21, 2012, April 21,
2013 and April 21, 2014. |
|
(4) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 28,
2009, May 28, 2010, May 28, 2011, May 28, 2012
and May 28, 2013. |
|
(5) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 28,
2008, May 28, 2009, May 28, 2010, May 28, 2011
and May 28, 2012. |
|
(6) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of April 20,
2007, April 20, 2008, April 20, 2009, April 20,
2010 and April 20, 2011. |
|
(7) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of April 26,
2010, April 26, 2011, April 26, 2012, April 26,
2013 and April 26, 2014. |
|
(8) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of July 18,
2005, July 18, 2006, July 18, 2007, July 18, 2008
and July 18, 2009. |
|
(9) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of April 20,
2006, April 20, 2007, April 20, 2008, April 20,
2009 and April 20, 2010. |
|
(10) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of April 6,
2005, April 6, 2006, April 6, 2007, April 6, 2008
and April 6, 2009. |
|
(11) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of April 7,
2004, April 7, 2005, April 7, 2006, April 7, 2007
and April 7, 2008. |
|
(12) |
|
This non-qualified (3,535) and incentive stock option
(464) vested at the rate of 20 percent per year, with
vesting dates of April 9, 2003, April 9, 2004,
April 9, 2005, April 9, 2006 and April 9, 2007. |
|
(13) |
|
This stock option has vested since accelerated vesting occurred
upon the retirement of Ms. Knous and Mr. Noddle since
they met the age and service requirements at the time of their
retirement. |
|
(14) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with Mr. Herkert’s appointment as
our CEO. The award vests at the rate of 25 percent per
year, with vesting dates of May 26, 2010, May 26,
2011, May 26, 2012 and May 26, 2013. Dividends are
paid on the restricted stock. |
34
|
|
|
(15) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with the hiring of Ms. Dexter Berg as
our Executive Vice President, Chief Marketing Officer. The award
vests in full on April 21, 2013. Dividends are paid on the
restricted stock. |
|
(16) |
|
Represents a restricted stock grant provided for executive
retention purposes under our 2007 Stock Plan. The award vests on
May 26, 2011. Dividends are paid on the restricted stock. |
|
(17) |
|
Represents grants of restricted stock units provided for
executive retention purposes under our 1993 and 2002 Stock
Plans. Following vesting, the units are paid out in shares of
SUPERVALU stock upon the later to occur of a specified age of
the executive, one year following retirement or termination or
30 days following death, provided non-competition
provisions of the award agreement are adhered to between the
vesting and payout dates. |
|
(18) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with the hiring of Mr. Shurts as our
Executive Vice President and Chief Information Officer. The
award vests in full on April 26, 2013. Dividends are paid
on the restricted stock. |
|
(19) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with Ms. Smith’s appointment as our
interim Chief Financial Officer. The award vests in full on
August 11, 2012. Dividends are paid on the restricted stock. |
|
(20) |
|
Represents a “reload” stock option granted under the
1997 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding obligation, has a per share exercise price equal to
the fair market value of a share of the Company’s common
stock on the date of grant, is exercisable in full on the date
of grant and expires on the same date as the original option. |
|
(21) |
|
Represents a “reload” stock option granted under our
2002 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding obligation, has a per share exercise price equal to
the fair market value of a share of the Company’s common
stock on the date of grant, is exercisable in full on the date
of grant and expires on the same date as the original option. |
|
(22) |
|
The amounts shown in this column are calculated using a per
share value of $8.55, the closing market price of a share of our
common stock on February 25, 2011 (the last trading day
preceding the last day of our 2011 fiscal year). |
OPTION
EXERCISES AND STOCK VESTED FOR FISCAL 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
Value
|
|
Number of
|
|
Value
|
|
|
Shares Acquired on
|
|
Realized on
|
|
Shares Acquired on
|
|
Realized on
|
Name
|
|
Exercise (#)
|
|
Exercise ($)
|
|
Vesting (#)
|
|
Vesting(1) ($)
|
|
Craig R. Herkert
|
|
|
—
|
|
|
|
—
|
|
|
|
78,616
|
|
|
$
|
1,056,599
|
|
Julie Dexter Berg
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Janel S. Haugarth
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Pamela K Knous
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Jeffrey Noddle
|
|
|
—
|
|
|
|
—
|
|
|
|
101,320
|
|
|
$
|
1,227,998
|
|
Wayne R. Shurts
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Sherry M. Smith
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(1) |
|
Amounts reflect the market value of the Company’s common
stock on the day the stock vested, determined by multiplying the
number of shares acquired on vesting by the closing sales price
for the Company’s common stock on the NYSE on the vesting
date. |
35
PENSION
BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Present
|
|
|
|
|
|
|
Years
|
|
Value of
|
|
Payments
|
|
|
|
|
Credited
|
|
Accumulated
|
|
During
|
|
|
|
|
Service
|
|
Benefit(3)
|
|
Last Fiscal
|
Name
|
|
Plan Name(1)
|
|
(#)(2)
|
|
($)
|
|
Year ($)
|
|
Craig R. Herkert
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Julie Dexter Berg
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Janel S. Haugarth(4)
|
|
Qualified Retirement Plan
|
|
|
30
|
|
|
$
|
779,311
|
|
|
|
—
|
|
|
|
Excess Benefits Plan
|
|
|
30
|
|
|
|
1,949,826
|
|
|
|
—
|
|
|
|
EDCP
|
|
|
30
|
|
|
|
199,339
|
|
|
|
—
|
|
Pamela K. Knous(5)
|
|
Qualified Retirement Plan
|
|
|
10.33
|
|
|
|
268,991
|
|
|
$
|
8,740
|
|
|
|
Excess Benefits Plan
|
|
|
10.33
|
|
|
|
553,869
|
|
|
|
476,845
|
|
Jeffrey Noddle(6)
|
|
Qualified Retirement Plan
|
|
|
30
|
|
|
|
932,316
|
|
|
|
49,184
|
|
|
|
SERP
|
|
|
30
|
|
|
|
—
|
|
|
|
12,707,664
|
|
Wayne R. Shurts
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Sherry M. Smith
|
|
Qualified Retirement Plan
|
|
|
20.17
|
|
|
|
367,919
|
|
|
|
—
|
|
|
|
Excess Benefits Plan
|
|
|
20.17
|
|
|
|
428,530
|
|
|
|
—
|
|
|
|
EDCP
|
|
|
20.17
|
|
|
|
18,533
|
|
|
|
—
|
|
|
|
|
(1) |
|
We maintain the following programs to provide retirement income
to the NEOs: the SUPERVALU INC. Retirement Plan (the
“Qualified Retirement Plan”), the SUPERVALU INC.
Nonqualified Supplemental Executive Retirement Plan (the
“SERP”), the SUPERVALU INC. Excess Benefits Plan (the
“Excess Benefits Plan”) and the SUPERVALU INC.
Executive Deferred Compensation Plan (the “EDCP”).
Each of these plans is discussed below. |
|
(2) |
|
The Qualified Retirement Plan caps years of credited service at
30 years. Years of credited service were frozen effective
December 31, 2007. |
|
(3) |
|
The calculation of present value of accumulated benefit assumes:
(a) a measurement date of February 26, 2011;
(b) a discount rate of 5.60 percent; (c) an
assumed retirement at age 62 (earliest unreduced retirement
age); (d) a single life annuity form of payment;
(e) the use of the RP-2000 Combined Healthy Mortality Table
(projected to 2017); and (f) no pre-retirement decrements. |
|
(4) |
|
Ms. Haugarth is currently eligible for early retirement
under the Qualified Retirement Plan and Excess Benefits Plan.
Under the Excess Benefits Plan, Ms. Haugarth elected a
5-year
installment at the later of age 62 or separation of service
for amounts credited after calendar 2004. For amounts credited
prior to calendar 2005, Ms. Haugarth elected a lump sum
distribution at retirement. |
|
(5) |
|
Ms. Knous retired and elected early retirement under the
Qualified Retirement Plan and the Excess Benefits Plan. Under
the Excess Benefits Plan, Ms. Knous elected and received a
lump sum distribution at retirement with a six month delay for
amounts credited after calendar 2004. For amounts credited prior
to calendar 2005, Ms. Knous elected and received a lump sum
distribution. |
|
(6) |
|
Mr. Noddle retired and elected early retirement under the
Qualified Retirement Plan and the SERP. Under the SERP,
Mr. Noddle elected and received a lump sum distribution at
retirement with a six month delay for amounts credited after
calendar 2004. For amounts credited prior to calendar 2005,
Mr. Noddle elected and received a lump sum distribution. |
With respect to current Company employees, Ms. Haugarth and
Ms. Smith participate in the Qualified Retirement Plan and
the Excess Benefits Plan. Mr. Herkert, Ms. Dexter Berg
and Mr. Shurts are not eligible to participate in the
Qualified Retirement Plan, the SERP or the Excess Benefits Plan.
The SERP and the Excess Benefits Plan were designed to restore
the loss of qualified retirement plan benefits due to the
Internal Revenue Service limits on compensation and benefits
and, in addition, the SERP was designed to restore the loss of
qualified retirement plan benefits due to a change in the
formula required by statute in 1989. In addition, NEOs may also
defer compensation under the EDCP as described in this Proxy
Statement.
36
SUPERVALU
INC. Retirement Plan
To participate in the Qualified Retirement Plan, an employee
must have one year of service with the Company during which
1,000 hours of service were completed and be at least
age 21. Union employees are not covered unless a collective
bargaining agreement provides for coverage in the plan. Accrued
benefits under the Qualified Retirement Plan are one percent of
final average compensation times credited service (not to exceed
30 years) plus 0.4 percent of final average
compensation in excess of covered compensation times credited
years of service (not to exceed 30 years). Final average
compensation is defined as the highest five consecutive complete
plan years of compensation. Elements of compensation include
base pay and bonus pay, less any deferrals under nonqualified
deferred compensation plans. Credited service are years during
which the participant completed at least 1,000 hours of
service. Normal retirement is age 65. Accrued benefits are
available unreduced at age 62 with 10 or more years of
service. Early retirement is available at age 55 with 10 or
more years of service. Early retirement reductions are four
percent per year prior to age 62. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan. However, vesting service will
continue to be counted until separation and compensation will be
recognized under the Qualified Retirement Plan through
December 31, 2012.
There are six optional distribution forms under the Qualified
Retirement Plan: single life annuity, which is payable for the
lifetime of the participant only; 5, 10 and 15 year term
certain annuities, which are payable for the lifetime of the
participant with a guaranteed stream of benefits payable to the
named beneficiary if the participant dies before the end of the
guaranteed term; and 50 percent and 100 percent joint
and survivor annuities, which are payable for the lifetime of
the participant with the applicable percentage of the
participant’s annuity being paid to the surviving spouse or
surviving joint annuitant for their lifetime. Lump sums are also
available to certain limited participant groups. These
distribution options are elected and payable at early or normal
retirement.
Certain former Albertson’s pension plans in which benefit
accruals for all nonunion employees were previously frozen have
been merged into the Qualified Retirement Plan. The frozen
accrued benefits for merged participants are determined under
the formulas in the merged plans, and distributions to such
participants are made under the normal and optional distribution
forms in the Qualified Retirement Plan.
SUPERVALU
INC. Nonqualified Supplemental Executive Retirement
Plan
The SERP was designed to restore the loss of qualified
retirement plan benefits due to statutory limits on benefits and
compensation in such plans and to restore the loss of any
qualified retirement plan benefits due to the change in the
benefit formula in that plan on February 26, 1989.
Participation in this plan is limited to employees who satisfy
the following requirements: (1) born before March 1,
1952; (2) have at least 15 years of credited service;
(3) are a highly compensated employee (as defined under
Section 414(q) of the Code) at separation; and (4) on
February 26, 1989 were actively employed by SUPERVALU and
were participants in the Qualified Retirement Plan. Accrued
benefits are determined as the greater of the current qualified
retirement plan benefit formula compared to the SERP formula of
1.7 percent of final average compensation times credited
service (not to exceed 30 years) minus the sum of
(A) 0.1 percent of final average compensation in
excess of $75,000 times credited service (not to exceed
30 years) and (B) 1/30th of the
participant’s approximate social security benefit times
credited service (not to exceed 30 years) minus the dollar
amount of the benefit payable from the Qualified Retirement
Plan. Normal retirement is age 65. Accrued benefits are
available unreduced at age 62 with 10 or more years of
service. Early retirement is available at age 55 with 10 or
more years of service. Early retirement reductions are four
percent per year prior to age 62. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan and, indirectly, under the SERP.
However, vesting service will continue to be recognized until
separation and compensation will continue to be recognized under
the Qualified Retirement Plan and, indirectly, under the SERP,
through December 31, 2012.
There are nine basic distribution forms under the SERP: single
life annuity, which is payable for the lifetime of the
participant only; 10 and 15 year term certain and life
annuities, which are payable for the lifetime of the participant
with a guaranteed stream of benefits payable to the named
beneficiary if the participant dies before the end of the
guaranteed term; and 50 percent, 67 percent and
100 percent joint and survivor annuities, which are payable
for the lifetime of the participant with the applicable
percentage of the participant’s annuity being paid to the
surviving spouse or surviving joint annuitant for their
lifetime; lump sum; and equal annual installments over a
37
five or ten year period. Participants who do not file timely
distribution elections receive payment in the form of a single
lump sum.
Distribution of benefits occurs at the election of the
participant: (a) within 30 days of separation from
service; (b) during the month of March following separation
from service; (c) during the month of March following the
later of age 55 or separation from service; (d) during
the month of March following the later of age 62 or
separation from service; (e) during the month of March
following the later of age 65 or separation from service;
or (f) within 30 days following the later of a
specific date or separation from service. Participants who do
not file a timely election will receive distribution during the
March following separation from service. If distribution is
being made to a “key employee,” the portion of the
participant’s benefit attributable to benefits accrued
after December 31, 2004, will be delayed for six months
following separation from service. A “key employee” is
any officer of the Company.
SUPERVALU
INC. Excess Benefits Plan
The Excess Benefits Plan was designed solely to restore the loss
of qualified retirement plan benefits due to statutory limits on
benefits and compensation in such plans. Participation in this
plan is limited to employees who satisfy the following
requirements: (1) have a benefit in a qualified plan that
is reduced by statutory limits; (2) are not covered under
the SERP; and (3) are selected for participation by the
Leadership Development and Compensation Committee. Accrued
benefits are the additional amount that would have been paid
from the qualified plan but for the statutory limits. Normal
retirement is age 65. Accrued benefits are available
unreduced at age 62 with 10 or more years of service. Early
retirement is available at age 55 with 10 or more years of
service. Early retirement reductions are four percent per year
prior to age 62. Effective December 31, 2007, credited
service was frozen under the Qualified Retirement Plan and,
indirectly, under the Excess Benefits Plan. However, vesting
service will continue to be recognized until separation and
compensation will continue to be recognized under the Qualified
Retirement Plan and, indirectly, under the Excess Benefits Plan,
through December 31, 2012.
There are seven basic distribution forms under the Excess
Benefits Plan: single life annuity, which is payable for the
lifetime of the participant only; 50 percent,
67 percent and 100 percent joint and survivor
annuities, which are payable for the lifetime of the participant
with the applicable percentage of the participant’s annuity
being paid to the surviving spouse or surviving joint annuitant
for their lifetime; lump sum; and annual installments over a
five or ten year period. Participants who do not file timely
distribution elections receive payment in the form of a single
lump sum.
Distribution of benefits occurs at the election of the
participant: (a) within 30 days of separation from
service; (b) during the month of March following separation
from service; (c) during the month of March following the
later of age 62 or separation of service; or
(d) during the month of March following the later of
age 65 or separation from service. Participants who do not
file a timely election will receive distribution during the
March following separation from service. If distribution is
being made to a “key employee,” the portion of the
participant’s benefit attributable to benefits accrued
after December 31, 2004, will be delayed for six months
following separation of service. A “key employee” is
any officer of the Company.
SUPERVALU
INC. Executive Deferred Compensation Plan (Pension
Make-Up
Benefit)
Executives who defer the receipt of pay under the EDCP may have
reduced qualified defined benefit retirement plan benefits and
related non-qualified supplemental retirement benefits. To make
up this loss in defined benefit retirement plan benefits, the
EDCP contains a
make-up
provision to determine and to pay an amount representing the
additional benefit that would have been payable under those
plans if there had been no deferrals under the EDCP. This
make-up
benefit is determined by commuting this additional benefit to a
lump sum that is deposited in the participant’s EDCP
account at retirement and then distributed during March in the
following plan year as a single payment. For this
make-up
computation, accrued benefits are determined using the Qualified
Retirement Plan benefit formula as if there had been no
reductions in final average pay due to deferrals. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan and, indirectly, under this
make-up
provision of the EDCP. However, additional vesting service
continues to be counted until separation and compensation
continues to be recognized under the Qualified Retirement Plan
and, indirectly, under this
make-up
provision of the EDCP, through December 31, 2012. If a
distribution is to be made to a “key employee” (as
defined
38
above), the portion of the benefit attributable to deferral
after December 31, 2004, will be delayed for six months
following separation from service. A “key employee” is
any officer of the Company.
NONQUALIFIED
DEFERRED COMPENSATION(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Earnings
|
|
Aggregate
|
|
Aggregate
|
|
|
Contributions
|
|
Contributions
|
|
in Last
|
|
Withdrawals/
|
|
Balance at
|
|
|
in Last Fiscal
|
|
in Last Fiscal
|
|
Fiscal
|
|
Distributions
|
|
Last Fiscal
|
Name
|
|
Year ($)(2)
|
|
Year ($)(3)
|
|
Year ($)(4)
|
|
($)
|
|
Year End ($)
|
|
Craig R. Herkert
|
|
$
|
425,000
|
|
|
$
|
51,275
|
|
|
$
|
18,392
|
|
|
$
|
—
|
|
|
$
|
563,640
|
|
Julie Dexter Berg
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Janel S. Haugarth
|
|
|
12,924
|
|
|
|
27,759
|
|
|
|
42,122
|
|
|
|
—
|
|
|
|
725,081
|
|
Pamela K. Knous
|
|
|
13,468
|
|
|
|
673
|
|
|
|
5,201
|
|
|
|
—
|
|
|
|
88,176
|
|
Jeffrey Noddle
|
|
|
34,770
|
|
|
|
1,738
|
|
|
|
40,310
|
|
|
|
132,597
|
|
|
|
698,489
|
|
Wayne R. Shurts
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Sherry M. Smith
|
|
|
26,512
|
|
|
|
15,958
|
|
|
|
4,793
|
|
|
|
—
|
|
|
|
106,226
|
|
|
|
|
(1) |
|
The Company offers eligible participants the opportunity to
participate each year in the current executive nonqualified
deferred compensation plan. Other inactive nonqualified
compensation plans also exist and are governed by the respective
rules which existed while they were active. The amounts credited
from the registrant and aggregate earnings are not included in
the Summary Compensation Table. |
|
(2) |
|
Amounts credited in fiscal 2011 include deferrals on base salary
earned during parts of calendar 2010 and calendar 2011. |
|
(3) |
|
Because of limitations on the annual compensation that can be
taken into account under the 401(k) Plan, participants received
an additional discretionary credit from the Company for their
2010 EDCP deferrals and credited this restoration to a
participant account in 2010 as if there were no income
limitations for a Company match or profit sharing contribution
under the 401(k) Plan. |
|
(4) |
|
Earnings for the current and inactive plans are determined based
on a combination of a fixed percentage rate as well as variable
interest rate methodologies based on current account balances. |
SUPERVALU
INC. Executive Deferred Compensation Plan
In addition to the
“make-up”
feature described previously, the EDCP provides that an eligible
executive can elect to defer between 5 and 50 percent of
base salary and between 5 and 100 percent of annual
incentive compensation. A new deferral election can be made
before the beginning of each calendar year and is effective for
that calendar year as to base salary and for the fiscal year
that begins in that calendar year as to incentive compensation.
The amount deferred for a year is credited to an unfunded
bookkeeping account for that year and that account is credited
from time to time with interest at a rate determined by
reference to Moody’s Corporate Average Bond Index for the
year ending in the October preceding the calendar year. With
each deferral election, the employee also makes an election of
(i) whether the account for that year will be distributed
in a lump sum or in 5, 10 or 15 annual installments and
(ii) the time when distribution of that year’s account
will be paid in a lump sum or commenced in installments (either
a specified date or upon separation from service). SUPERVALU
may, in its discretion, credit additional amounts to a
participant’s account. If distribution is to be made to a
“key employee,” the portion of the benefit
attributable to deferral after December 31, 2004, will be
delayed for six months following separation from service.
Subject to limited exceptions, all amounts are 100 percent
nonforfeitable at all times. A “key employee” is any
officer of the Company.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The tables below reflect the amount of compensation that would
be paid to each of the NEOs in the event of termination of such
executive’s employment under several different
circumstances. The amounts shown assume that such termination
was effective as of the last day of the last completed fiscal
year, and thus includes amounts earned through such time and are
estimates of the amounts that would be paid out to the
executives upon their
39
termination. The actual amounts to be paid out can only be
determined at the time of such executive’s separation from
SUPERVALU. For a description of the severance benefits paid or
accrued to Ms. Knous during fiscal 2011, see footnote 6(b)
to the Summary Compensation Table.
Potential
Payments and Benefits upon Termination Absent a Change of
Control
The first column of the table below sets forth the payments to
which each NEO, excluding Mr. Noddle and Ms. Knous,
would be entitled, other than accrued but unpaid base salary and
any benefits payable or provided under broad-based employee
benefit plans and programs, in the event of a qualified
retirement or due to long-term disability. The second column of
the table reflects payments that would be due in the event of
the NEO’s termination of employment due to death prior to a
change of control of SUPERVALU. In any of these events, we are
not obligated to provide any special severance payments, health
or welfare benefits or tax
gross-ups to
the NEO. Ms. Haugarth meets the age and service
requirements for retirement and, therefore, accelerated vesting
of equity awards would occur upon death, disability or
retirement. Mr. Herkert, Ms. Dexter Berg,
Mr. Shurts and Ms. Smith do not meet the requirements
for retirement and, therefore, accelerated vesting of equity
awards would not occur upon death, disability or retirement.
The third column of the table below sets forth the lump sum
payment to which each NEO would be entitled in the event they
are involuntarily terminated without cause, subject to certain
exclusions, pursuant to the Executive & Officer
Severance Pay Plan, which are described under “Compensation
Discussion and Analysis — Executive Severance
Plan.” The lump sum cash payment is equal to a multiple of
the NEO’s annual base salary and the average of the
performance results (expressed as a percentage) used to
determine the NEO’s bonus amounts under the annual bonus
plan for the preceding three years (or all bonus amounts if the
NEO has been employed fewer than three years), multiplied by the
NEO’s current target bonus amount, as well as an
uninterrupted bonus cycle payment. The severance multiple is two
times for the CEO and 1.5 times for other NEOs. The NEOs are
also entitled to reimbursement for COBRA coverage for medical
and dental insurance. Additionally, an NEO must repay severance
benefits received pursuant to the Executive & Officer
Severance Pay Plan if the Company wishes to rehire them in any
capacity within six months of the termination date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Without
|
Name
|
|
Retirement/Disability
|
|
Death
|
|
Cause(1)
|
|
Craig R. Herkert
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
2,959,623
|
|
Julie Dexter Berg
|
|
|
—
|
|
|
|
—
|
|
|
|
700,000
|
|
Janel S. Haugarth
|
|
|
—
|
|
|
|
875,000
|
|
|
|
1,429,954
|
|
Wayne R. Shurts
|
|
|
—
|
|
|
|
—
|
|
|
|
670,000
|
|
Sherry M. Smith
|
|
|
—
|
|
|
|
—
|
|
|
|
1,067,275
|
|
|
|
|
(1) |
|
These amounts exclude reimbursements for COBRA. |
Potential
Payments and Benefits upon Termination Following, or in
Connection with, a Change of Control
SUPERVALU
Change of Control Agreements
We have entered into change of control agreements with certain
of our executives and other employees, including all of the NEOs.
In 2009, we conducted a review of our change of control
agreements and made several changes to the plan provisions to
better reflect current market practices. In general, these
agreements entitle the NEOs to receive a lump sum cash payment
if the executive’s employment is terminated (other than for
cause or disability, as defined in the agreements) within two
years after or in anticipation of a change of control (as
defined in the agreements). See “Compensation Discussion
and Analysis — Executive Change of Control
Policy” for additional details.
The lump sum cash payment is equal to a multiple of the
NEO’s annual base salary, target bonus and an interrupted
bonus cycle payment. The severance multiple is three times for
the CEO and two times for the other NEOs. The NEO would also be
entitled to continued family medical, dental and life insurance
coverage until the earlier of the end of the separation period
or the commencement of comparable coverage with a subsequent
40
employer. If so requested, outplacement services shall be
provided by a professional outplacement provider at a cost to
the Company of not more than $25,000. Each agreement includes a
covenant not to compete with SUPERVALU.
A change of control generally includes the occurrence of any of
the following events or circumstances:
|
|
|
|
•
|
the acquisition of 20 percent or more of the outstanding
shares of SUPERVALU or the voting power of the outstanding
voting securities of SUPERVALU, other than any acquisition from
or by SUPERVALU or any SUPERVALU-sponsored employee benefit plan;
|
|
|
•
|
consummation of a merger or other business combination of
SUPERVALU or sale of substantially all of the assets of
SUPERVALU, unless following such transaction SUPERVALU’s
historic stockholders retain at least 60 percent ownership
of the surviving entity;
|
|
|
•
|
a change in our Board’s composition within any
24-month
period such that a majority of the Board’s members does not
include those who were members at the date of the beginning of
the employment period; or
|
|
|
•
|
a determination by a majority of our Board that a change of
control has occurred.
|
Cause generally means the willful and continued failure of the
officer to substantially perform his or her duties, the
conviction of a felony, the willful engaging in gross misconduct
that is materially and demonstrably injurious to SUPERVALU or
personal dishonesty that results in substantial personal
enrichment. Good reason generally means the annual base salary
or highest annual bonus are reduced, the duties and
responsibilities or the program of incentive compensation are
materially and adversely diminished, the forced relocation of
more than 45 miles or the significant increase in travel
obligations, the failure to provide for the assumption of the
agreement by any successor entity.
SUPERVALU
Equity Compensation Plans
Several of our compensation and benefit plans contain provisions
for enhanced benefits upon a change of control of SUPERVALU.
These enhanced benefits include immediate vesting of stock
options, performance stock units, restricted stock and
restricted stock unit awards upon a change of control, or in the
case of such equity awards granted after May 2010, if employment
terminates under specified circumstances within two years of a
change of control. The NEOs and other executive officers also
hold limited stock appreciation rights (“SARs”),
granted in tandem with stock options that would become
immediately exercisable upon a change of control, and allow the
executive to receive cash for the bargain element in the related
stock option. Under our executive deferred compensation plans,
benefits payable upon termination may be increased by
30 percent to compensate the NEO for any excise tax
liability incurred following a change of control. Our retirement
plans provide for full vesting if employment terminates under
specified circumstances within two years following a change of
control. Additionally, the Qualified Retirement Plan provides
that if it is terminated within five years following a change of
control, any excess plan assets will not revert to the Company
and will be used for the benefit of certain plan participants.
We may set aside funds in an irrevocable grantor trust to
satisfy our obligations arising from certain of our benefit
plans. Funds will be set aside in the trust automatically upon a
change of control. The trust assets would remain subject to the
claims of our creditors.
41
POTENTIAL
PAYMENTS TABLE
The table below sets forth the amounts each NEO, excluding
Mr. Noddle and Ms. Knous, would be entitled to
receive, other than accrued but unpaid base salary and any
benefits payable or provided under broad-based employee benefit
plans and programs, in the event of a termination of their
employment by SUPERVALU, without cause or by the NEO, for good
reason, following or in anticipation of a change of control of
SUPERVALU. These amounts do not include pension benefits
described in the Pension Benefits Table and the other retirement
benefits described following the Pension Benefits Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig R.
|
|
|
Julie
|
|
|
Janel S.
|
|
|
Wayne R.
|
|
|
Sherry M.
|
|
|
|
Herkert
|
|
|
Dexter Berg
|
|
|
Haugarth
|
|
|
Shurts
|
|
|
Smith
|
|
|
Base salary
|
|
$
|
2,550,000
|
|
|
$
|
900,000
|
|
|
$
|
1,250,000
|
|
|
$
|
860,000
|
|
|
$
|
1,160,000
|
|
Bonus
|
|
|
3,825,000
|
|
|
|
900,000
|
|
|
|
1,250,000
|
|
|
|
860,000
|
|
|
|
1,160,000
|
|
Interrupted Bonus Cycle
|
|
|
1,275,000
|
|
|
|
450,000
|
|
|
|
625,000
|
|
|
|
430,000
|
|
|
|
580,000
|
|
Accelerated vesting of equity awards(1)
|
|
|
716,986
|
|
|
|
0
|
|
|
|
78,136
|
|
|
|
0
|
|
|
|
54,538
|
|
Health and Welfare benefits
|
|
|
93,970
|
|
|
|
58,014
|
|
|
|
198,229
|
|
|
|
56,739
|
|
|
|
151,978
|
|
Outplacement services
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,485,956
|
|
|
$
|
2,333,014
|
|
|
$
|
3,426,365
|
|
|
$
|
2,231,739
|
|
|
$
|
3,131,516
|
|
|
|
|
(1) |
|
The stock option value is calculated by multiplying the number
of unvested shares by the difference between the grant price and
the closing stock price on February 25, 2011 ($8.55), the
last trading day before our 2011 fiscal year end. |
42
REPORT OF
THE AUDIT COMMITTEE
All of the members of the Audit Committee are independent
directors under the New York Stock Exchange listing standards
and the rules of the SEC. In addition, the Board has determined
that all members of the Audit Committee are financially literate
under the New York Stock Exchange listing standards and that
each of Mr. Chappel, Mr. Cohen and Mr. Francis
qualifies as an “audit committee financial expert”
under the rules of the SEC.
The Audit Committee operates under a written charter adopted by
the Board of Directors, which is evaluated annually. The charter
of the Audit Committee is available on SUPERVALU’s website
at
http://www.supervalu.com. Click
on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.” The Audit Committee selects, evaluates and, where
deemed appropriate, replaces SUPERVALU’s independent
registered public accountants. The Audit Committee also
pre-approves all audit services, engagement fees and terms, and
all permitted non-audit engagements, except for certain
de minimus amounts.
Management is responsible for SUPERVALU’s internal controls
and the financial reporting process. SUPERVALU’s
independent registered public accountants are responsible for
performing an audit of SUPERVALU’s consolidated financial
statements and the effectiveness of internal control over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). The
Audit Committee’s responsibility is to monitor and oversee
these processes.
In this context, the Audit Committee has reviewed
SUPERVALU’s audited financial statements for fiscal 2011
and has met and held discussions with management and KPMG LLP,
the independent registered public accountants. Management
represented to the Audit Committee that SUPERVALU’s
consolidated financial statements for fiscal 2011 were prepared
in accordance with accounting principles generally accepted in
the United States of America, and the Audit Committee discussed
the consolidated financial statements with KPMG. The Audit
Committee also discussed with KPMG the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended (AICPA, Professional Standards, Vol. 1, AU
section 380) as adopted by the Public Accounting
Oversight Board in Rule 3200T.
The Audit Committee received the written disclosures and letter
from KPMG required by the applicable requirements of the Public
Company Accounting Oversight Board regarding KPMG’s
communications with the Audit Committee concerning its
independence, and the Audit Committee discussed with KPMG the
accounting firm’s independence.
Based upon the Audit Committee’s discussions with
management and KPMG and the Audit Committee’s review of the
representation of management and the report of KPMG to the Audit
Committee, the Audit Committee recommended to the Board of
Directors that the audited consolidated financial statements be
included in SUPERVALU’s Annual Report on
Form 10-K
for the fiscal year ended February 26, 2011, filed with the
SEC.
The Audit Committee also considered whether non-audit services
provided by KPMG during fiscal 2011 were compatible with
maintaining their independence and concluded that such non-audit
services did not affect their independence.
Respectfully submitted,
Irwin S. Cohen, Chairperson
Donald R. Chappel
Philip L. Francis
Steven S. Rogers
Kathi P. Seifert
43
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS’ FEES
The Audit Committee has a formal policy concerning the approval
of audit and non-audit services to be provided by
SUPERVALU’s independent registered public accountants. A
copy of this policy can be found in the Audit Committee’s
charter which is available on SUPERVALU’s website at
http://www.supervalu.com.
Click on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.” The policy requires that the Audit Committee
pre-approve all audit services, engagement fees and terms and
all permitted non-audit engagements, subject to the
de minimus exceptions permitted pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
The Chairperson of the Audit Committee is authorized to grant
such pre-approvals in the event there is a need for such
approvals prior to the next full Audit Committee meeting,
provided all such pre-approvals are then reported to the full
Audit Committee at its next scheduled meeting.
During fiscal 2011 and 2010, KPMG provided various audit,
audit-related and tax services to SUPERVALU. The Audit Committee
pre-approved all audit services, audit-related services and tax
services provided by KPMG in fiscal 2011 and 2010. The following
table presents fees for professional services charged by KPMG to
SUPERVALU by type and amount for fiscal 2011 and 2010.
|
|
|
|
|
|
|
|
|
|
|
2011(2)
|
|
|
2010(3)
|
|
|
|
($ in thousands)
|
|
|
Audit fees
|
|
$
|
2,690
|
|
|
$
|
3,329
|
|
Audit-related fees(1)
|
|
|
985
|
|
|
|
641
|
|
|
|
|
|
|
|
|
|
|
Total audit and audit related fees
|
|
|
3,675
|
|
|
|
3,970
|
|
Tax fees
|
|
|
—
|
|
|
|
—
|
|
All other fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
3,675
|
|
|
$
|
3,970
|
|
|
|
|
(1) |
|
Audit-related fees consist principally of fees for audits of
financial statements of certain employee benefit plans and
audits of the financial statements of certain businesses and
subsidiaries. |
|
(2) |
|
Fees for 2011 are estimates. |
|
(3) |
|
Fees for 2010 reflect final amounts billed. |
RATIFICATION
OF THE APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
(ITEM 2)
The Audit Committee of our Board of Directors has appointed KPMG
LLP as our independent registered public accountants for the
fiscal year ending February 25, 2012. Stockholder
ratification of the appointment of KPMG as our independent
registered public accountants is not required by our bylaws or
otherwise. However, the Board of Directors is submitting the
appointment of KPMG to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to
ratify the appointment, the Audit Committee will reconsider
whether or not to retain that firm. Even if the appointment is
ratified, the Audit Committee, which is solely responsible for
appointing and terminating our independent registered public
accountants, may in its discretion, direct the appointment of
different independent registered public accountants at any time
during the year if it determines that such a change would be in
the best interests of SUPERVALU and its stockholders.
A representative of KPMG will be present at the Annual Meeting
with the opportunity to make a statement and to respond to
questions.
The Board of Directors recommends a vote “FOR” the
ratification of the appointment of KPMG LLP as independent
registered public accountants.
44
ADVISORY
VOTE ON EXECUTIVE COMPENSATION (ITEM 3)
As required by the Exchange Act, we are providing stockholders
with an advisory (nonbinding) vote on the compensation of our
NEOs as disclosed in this Proxy Statement in accordance with the
SEC’s rules.
As described in detail under the heading “Compensation
Discussion and Analysis — Executive Summary,” our
executive compensation programs are designed to align
compensation with long-term stockholder value and the execution
of strategic business imperatives and ensure that the majority
of compensation opportunities are a result of
pay-for-performance.
Please read the “Compensation Discussion and Analysis”
for additional details about the Company’s executive
compensation programs, including information about the
compensation of our NEOs for fiscal 2011.
The Company is presenting the following proposal, which gives
stockholders the opportunity to endorse or not endorse our pay
program for NEOs by voting for or against the following
resolution (a
“say-on-pay”
vote). While the vote on the resolution is advisory in nature
and therefore will not bind us to take any particular action,
the Board of Directors intends to carefully consider the
stockholder vote resulting from the proposal in making future
decisions regarding the Company’s compensation programs.
“RESOLVED, that the stockholders approve, on an
advisory basis, the compensation of the Company’s Named
Executive Officers, as disclosed in the Compensation Discussion
and Analysis, the tabular disclosure regarding such
compensation, and the related narrative executive compensation
disclosures contained in the Proxy Statement.”
The Board of Directors recommends a vote “FOR”
approval of the compensation of the Company’s NEOs, as
disclosed in this Proxy Statement.
ADVISORY
VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON
EXECUTIVE COMPENSATION (ITEM 4)
The Exchange Act also requires the Company to provide
stockholders with an advisory (nonbinding) vote on how
frequently the Company should seek an advisory vote on the
compensation of the Company’s NEOs, as disclosed pursuant
to the SEC’s compensation disclosure rules. By voting on
this Item 4, stockholders may indicate whether they would
prefer an advisory vote on NEO compensation to occur once every
one, two or three years.
After careful consideration of this Proposal, the Company’s
Board of Directors has determined that an advisory vote on
executive compensation that occurs every year is the most
appropriate alternative for SUPERVALU, and therefore the Board
of Directors recommends that you vote for a one-year interval
for the advisory vote on executive compensation.
In formulating its recommendation, the Company’s Board of
Directors considered that an annual advisory vote on executive
compensation will allow stockholders to provide the Company with
their direct input on the Company’s compensation
philosophy, policies and practices as disclosed in the Proxy
Statement every year.
You may cast your vote on your preferred voting frequency by
choosing the option of one year, two years or three years, or
you may abstain from voting. The option that receives the
highest number of votes cast by stockholders will be the
frequency for the advisory vote on executive compensation
selected by stockholders. However, because this vote is advisory
and not binding on the Board of Directors or SUPERVALU, the
Board may decide that it is in the best interests of our
stockholders and SUPERVALU to hold an advisory vote on executive
compensation more or less frequently than the option approved by
our stockholders.
The Board of Directors recommends a vote “FOR” the
option of “ONE YEAR” as the frequency with which
stockholders are provided an advisory vote on the compensation
of the Company’s NEOs as disclosed in the Proxy
Statement.
45
OTHER
INFORMATION
SUPERVALU
Mailing Address
The mailing address of our principal executive offices is:
SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota
55440.
Stockholder
Proposals for the 2012 Annual Meeting
In accordance with rules of the SEC, all proposals of
stockholders that are requested to be included in
SUPERVALU’s Proxy Statement for the 2012 Annual Meeting of
Stockholders must be received by the Corporate Secretary on or
before February 14, 2012, 120 days before the one-year
anniversary of the mailing date. In accordance with our bylaws,
any other stockholder proposals to be presented at the 2012
Annual Meeting must be given in writing to the Corporate
Secretary and received at our principal executive offices no
later than the close of business on March 28, 2012 and no
earlier than February 27, 2012. The proposal must contain
specific information required by our bylaws, a copy of which is
available on SUPERVALU’s website at
http://www.supervalu.com.
Click on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.”
Communications
with the Board of Directors
Any interested parties who desire to communicate with the Board
of Directors, the non-employee members of the Board of Directors
or any individual member of the Board of Directors may do so by
sending a letter addressed to the director or directors in care
of the Corporate Secretary at the mailing address above. All
such correspondence will be forwarded to the appropriate
director or directors.
Code of
Ethics
SUPERVALU has adopted a Code of Ethics that applies to its
principal executive officer, principal financial officer,
principal accounting officer and controller, or persons
performing similar functions, and all other employees and
non-employee directors. The Code of Ethics is available on
SUPERVALU’s website at
http://www.supervalu.com.
Click on the tab “Site Map” and then the caption
“Corporate Governance” under the heading “About
Us.” Copies of the Code of Ethics are also available to any
stockholder who submits a request to the Corporate Secretary at
the mailing address above.
Expenses
of Solicitation
This solicitation of proxies is being made by SUPERVALU and we
will pay the costs of such solicitation. We arrange with
brokerage houses, custodians, nominees and other fiduciaries to
send proxy materials to their principals and we reimburse them
for their expenses in this regard. In addition to solicitation
by mail, proxies may be solicited by our employees, by telephone
or personally. No additional compensation will be paid for such
employee solicitation. We also have retained Innisfree M&A
Incorporated to assist in the solicitation of proxies for an
estimated fee of $10,000 plus
out-of-pocket
expenses.
Section 16(a)
Beneficial Ownership Reporting Compliance
The rules of the SEC require our directors, executive officers
and holders of more than 10 percent of our common stock to
file reports of stock ownership and changes in ownership with
the SEC. Based on the Section 16 reports filed by our
directors and executive officers and written representations of
our directors and executive officers we believe there were no
late or inaccurate filings for transactions occurring during
fiscal 2011.
Householding
Only one copy of each of our Annual Report to Stockholders and
this Proxy Statement have been sent to multiple stockholders who
share the same address and last name, unless we have received
contrary instructions from one or more of those stockholders.
This procedure is referred to as “householding.” We
have been notified that certain intermediaries (brokers or
banks) will also household proxy materials. We will deliver
promptly, upon oral
46
or written request, separate copies of the Annual Report and
Proxy Statement to any stockholder at the same address. If you
wish to receive separate copies of one or both of these
documents, or if you do not wish to participate in householding
in the future, you may write to our Corporate Secretary at
SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota
55440, or call
(952) 828-4000.
You may contact your broker or bank to make a similar request.
Stockholders sharing an address who now receive multiple copies
of our Annual Report and Proxy Statement may request delivery of
a single copy of each document by writing or calling us at the
address or telephone number above or by contacting their broker
or bank (provided the broker or bank has determined to household
proxy materials).
Important Notice Regarding the Availability of Proxy
Materials for the Stockholders Meeting to be Held on
July 26, 2011
Our Notice of Annual Meeting, Proxy Statement and Annual
Report are available on SUPERVALU’s website at
http://materials.proxyvote.com/868536.
Requests
for Copies of Annual Report
SUPERVALU will furnish to stockholders, without charge, a
copy of its Annual Report on
Form 10-K
for the fiscal year ended February 26, 2011, as filed with
the SEC upon receipt of a written request addressed to our
Corporate Secretary at SUPERVALU INC., P.O. Box 990,
Minneapolis, Minnesota 55440.
Owners of Shares Held in Street
Name: Check the information provided to you in
the proxy materials mailed to you by your bank or broker.
47
SUPERVALU
INC.
July 26, 2011 Annual Meeting of Stockholders
Westin
Edina Galleria
3201 Galleria
Edina, MN 55435
The Annual Meeting will begin at 10:30 a.m., local time, at
the Westin Edina Galleria
|
|
|
|
|
|
SUPERVALU INC.
Annual Meeting of
Stockholders
July 26, 2011 at 10:30 a.m.
Please bring a current
brokerage
statement, letter from your
stockbroker or other proof of stock
ownership to the meeting.
|
|
|
|
|
|

SUPERVALU INC.
7075 FLYING CLOUD DRIVE
EDEN PRAIRIE, MN 55344
VOTE BY INTERNET — www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 p.m. Eastern Time on July 25, 2011. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can
consent to receiving all future proxy statements, proxy cards and annual reports electronically via
e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to
vote using the Internet and, when prompted, indicate that you agree to receive or access proxy
materials electronically in future years.
VOTE BY PHONE — 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time
on July 25, 2011. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or
return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M37235-P12442-Z55280 KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
SUPERVALU INC.
The Board of Directors recommends you vote
FOR the following proposals:
1. Election of Directors
For Against Abstain
Nominees:
1a. Donald R. Chappel
1b. Irwin S. Cohen
1c. Ronald E. Daly
1d. Susan E. Engel
1e. Philip L. Francis
1f. Edwin C. Gage
1g. Craig R. Herkert
1h. Steven S. Rogers
For address changes and/or comments, please check this box and write them on the back where indicated.
Please indicate if you plan to attend this meeting.
Yes No
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator or other fiduciary, please give full title as such. Joint owners
should each sign personally. All holders must sign. If a corporation or partnership,
please sign in full corporate or partnership name, by authorized officer.
For Against Abstain
1i. Matthew E. Rubel
1j. Wayne C. Sales
1k. Kathi P. Seifert
2. RATIFICATION OF APPOINTMENT OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.
3. TO APPROVE, BY NON-BINDING VOTE, THE EXECUTIVE COMPENSATION AS DISCLOSED IN THE PROXY STATEMENT.
The Board of Directors recommends you vote 1 Year 2 Years 3 Years Abstain
for 1 year:
4. TO RECOMMEND, BY NON-BINDING VOTE,
THE FREQUENCY OF EXECUTIVE
COMPENSATION VOTES.
5. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |

ANNUAL MEETING OF STOCKHOLDERS July 26, 2011 10:30 a.m.
Westin Edina Galleria 3201 Galleria Edina, Minnesota 55435
Please bring a current brokerage statement, letter from your stockbroker or other proof of stock ownership to the meeting.
Refreshments will be available before the Meeting.
This Proxy is solicited on behalf of the Board of Directors of the Company.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
M37236-P12442-Z55280
This Proxy is solicited on behalf of the Board of Directors of the Company.
As the stockholder named on this card, you hereby appoint Craig R. Herkert and Todd N. Sheldon, and
each of them, as your proxy, with power of substitution, to vote the shares of SUPERVALU common
stock at the Annual Meeting as directed on the reverse side. These proxies may also vote, in their
discretion, upon all other matters that may properly come before the Annual Meeting, or any
adjournment or adjournments thereof. The shares will be voted as if you were personally present at
the Annual Meeting. All former proxies are revoked. If not otherwise specified, the shares will be
voted as recommended by the Directors.
Voting Instructions — You may vote by mail, telephone or Internet. Please follow the instructions on the reverse side of this card.
SUPERVALU Employees — If you are a current or former employee of SUPERVALU and own shares of
SUPERVALU common stock through a SUPERVALU employee benefit plan, the share ownership as of May 31,
2011 is shown on this card. Your vote will provide voting instructions to the trustees of the
plans. If no instructions are given, pursuant to the terms of the plans, the trustee will vote
shares as to which no directions are received in the same ratio as shares with respect to which
directions have been received from other participants, unless contrary to ERISA. The voting
deadline for participants in SUPERVALU employee benefit plans is at 11:59 p.m. Eastern Time on July 22, 2011.
Householding — If you share the same address and last name as other SUPERVALU stockholders, only
one copy of SUPERVALU’s Annual Report and Proxy Statement has been mailed to your address. Proxy
cards for each SUPERVALU stockholder residing at your address have been mailed under separate cover.
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side. |