FORM 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NBh8Ch5Vb464Z5Zk2xzbXGqXhfgYvLbkLkLv/0cHRGclHQE6N4d+a/5Wtx/Ni65q WiHUJC9z6dcRSK3Wbkam9A== 0000950137-09-000143.txt : 20090108 0000950137-09-000143.hdr.sgml : 20090108 20090108172116 ACCESSION NUMBER: 0000950137-09-000143 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20081129 FILED AS OF DATE: 20090108 DATE AS OF CHANGE: 20090108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERVALU INC CENTRAL INDEX KEY: 0000095521 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 410617000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0225 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05418 FILM NUMBER: 09516407 BUSINESS ADDRESS: STREET 1: 11840 VALLEY VIEW RD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 9528284000 MAIL ADDRESS: STREET 1: 11840 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: SUPER VALU STORES INC DATE OF NAME CHANGE: 19920703 10-Q 1 c48042e10vq.htm FORM 10-Q FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period (12 weeks) ended November 29, 2008.


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 1-5418

SUPERVALU INC.

(Exact name of registrant as specified in its charter)


DELAWARE		41-0617000
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11840 VALLEY VIEW ROAD
EDEN PRAIRIE, MINNESOTA		55344
(Address of principal executive offices)		(Zip Code)

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

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

As of January 2, 2009, there were 211,748,883 shares of the issuer’s common stock outstanding.

SUPERVALU INC. and Subsidiaries

Quarterly Report on Form 10-Q

TABLE OF CONTENTS


Item		Page
PART I — FINANCIAL INFORMATION

1.	Financial Statements (Unaudited)		2

	Condensed Consolidated Composition of Net Sales and Operating Earnings for the third quarter and year-to-date periods ended November 29, 2008 and December 1, 2007		2

	Condensed Consolidated Statements of Earnings for the third quarter ended November 29, 2008 and December 1, 2007		3

	Condensed Consolidated Statements of Earnings for the year-to-date periods ended November 29, 2008 and December 1, 2007		4

	Condensed Consolidated Balance Sheets as of November 29, 2008 and February 23, 2008		5

	Condensed Consolidated Statements of Stockholders’ Equity for the year-to-date periods ended November 29, 2008 and the fiscal year ended February 23, 2008		6

	Condensed Consolidated Statements of Cash Flows for the year-to-date periods ended November 29, 2008 and December 1, 2007		7

	Notes to Condensed Consolidated Financial Statements		8

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16

3.	Quantitative and Qualitative Disclosures About Market Risk		24

4.	Controls and Procedures		24

PART II — OTHER INFORMATION

1.	Legal Proceedings		25

1A.	Risk Factors		25

2.	Unregistered Sales of Equity Securities and Use of Proceeds		26

3.	Defaults Upon Senior Securities		26

4.	Submission of Matters to a Vote of Security Holders		26

5.	Other Information		26

6.	Exhibits		27
EX-4.1
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I — FINANCIAL INFORMATION


ITEM 1.		FINANCIAL STATEMENTS

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED COMPOSITION OF NET SALES AND OPERATING EARNINGS

(Unaudited)

(In millions, except percent data)


	Third Quarter Ended						Year-to-Date Ended
	November 29,			December 1,			November 29,			December 1,
	2008			2007			2008			2007
Net sales
Retail food	$	7,861		$	7,858		$	26,168		$	26,259
% of total		77.3	%		77.0	%		77.5	%		78.0	%
Supply chain services		2,310			2,353			7,576			7,402
% of total		22.7	%		23.0	%		22.5	%		22.0	%

Total net sales	$	10,171		$	10,211		$	33,744		$	33,661
		100.0	%		100.0	%		100.0	%		100.0	%

Operating earnings (loss)
Retail food (1)	$	(2,941	)	$	342		$	(2,258	)	$	1,176
% of sales		(37.4	)%		4.4	%		(8.6	)%		4.5	%
Supply chain services		69			69			232			199
% of sales		3.0	%		2.9	%		3.1	%		2.7	%
Corporate		(19	)		(16	)		(67	)		(108	)

Total operating earnings (loss)		(2,891	)		395			(2,093	)		1,267
% of sales		(28.4	)%		3.9	%		(6.2	)%		3.7	%
Interest expense, net		143			164			474			550

Earnings (loss) before income taxes		(3,034	)		231			(2,567	)		717
Income tax provision (benefit)		(90	)		90			87			280

Net earnings (loss)	$	(2,944	)	$	141		$	(2,654	)	$	437


(1)		Retail food operating loss for the third quarter and year-to-date ended November 29, 2008 reflects the preliminary estimate of goodwill and asset impairment charges of $3,250 related to the write-down of goodwill and other intangible assets required by Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” The impairment charges are subject to finalization of fair values which the Company will complete in the fourth quarter of fiscal 2009.

The Company’s business is classified by management into two reportable segments: Retail food and Supply chain services. These reportable segments are two distinct businesses, one retail and one wholesale, each with a different customer base, marketing strategy and management structure. The Retail food reportable segment, which is an aggregation of the Company’s retail operating segments, includes results of the Company’s own stores and results of sales to food stores licensed by the Company. The Supply chain services reportable segment includes results of wholesale distribution to third party affiliated food stores, mass merchants and other customers and logistics support services. Substantially all of the Company’s operations are domestic.

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(In millions, except percent and per share data)


	Third Quarter Ended
	November 29,			% of			December 1,		% of
	2008			Net sales			2007		Net sales
Net sales	$	10,171			100.0	%	$	10,211		100.0	%
Cost of sales		7,891			77.6			7,941		77.8

Gross profit		2,280			22.4			2,270		22.2
Selling and administrative expenses		1,921			18.9			1,875		18.3
Goodwill and intangible asset impairment charges		3,250			32.0			—		—

Operating earnings (loss)		(2,891	)		(28.4	)		395		3.9
Interest expense, net		143			1.4			164		1.6

Earnings (loss) before income taxes		(3,034	)		(29.8	)		231		2.3
Income tax provision (benefit)		(90	)		(0.9	)		90		0.9

Net earnings (loss)	$	(2,944	)		(28.9	)%	$	141		1.4	%

Net earnings (loss) per share—basic	$	(13.95	)				$	0.67
Net earnings (loss) per share—diluted	$	(13.95	)				$	0.66
Dividends declared per share	$	0.1725					$	0.1700
Weighted average number of shares outstanding:
Basic		211						211
Diluted		211						214

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(In millions, except percent and per share data)


	Year-to-Date Ended
	November 29,			% of			December 1,		% of
	2008			Net sales			2007		Net sales
Net sales	$	33,744			100.0	%	$	33,661		100.0	%
Cost of sales		26,110			77.4			25,975		77.2

Gross profit		7,634			22.6			7,686		22.8
Selling and administrative expenses		6,477			19.2			6,419		19.1
Goodwill and intangible asset impairment charges		3,250			9.6			—		—

Operating earnings (loss)		(2,093	)		(6.2	)		1,267		3.7
Interest expense, net		474			1.4			550		1.6

Earnings (loss) before income taxes		(2,567	)		(7.6	)		717		2.1
Income tax provision		87			0.3			280		0.8

Net earnings (loss)	$	(2,654	)		(7.9)	%	$	437		1.3	%

Net earnings (loss) per share—basic	$	(12.56	)				$	2.06
Net earnings (loss) per share—diluted	$	(12.56	)				$	2.03
Dividends declared per share	$	0.515					$	0.505
Weighted average number of shares outstanding:
Basic		211						211
Diluted		211						216

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value data)


	November 29,			February 23,
	2008			2008
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	405		$	243
Receivables, less allowances for doubtful accounts of $12 and $14, respectively		914			951
Inventories		3,256			2,776
Other current assets		218			177

Total current assets		4,793			4,147

Property, plant and equipment, less accumulated depreciation and amortization of $4,265 and $3,579, respectively		7,581			7,533
Goodwill		3,967			6,957
Intangible assets, net		1,656			1,952
Other assets		643			473

Total assets	$	18,640		$	21,062

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	3,611		$	3,354
Current maturities of long-term debt and capital lease obligations		528			331
Other current liabilities		985			922

Total current liabilities		5,124			4,607

Long-term debt and obligations under capital leases		8,357			8,502
Other liabilities		1,937			2,000
Commitments and contingencies
Stockholders’ equity
Common stock, $1.00 par value: 400 shares authorized; 230 shares issued		230			230
Capital in excess of par value		2,848			2,822
Accumulated other comprehensive losses		(94	)		(95	)
Retained earnings		780			3,543
Treasury stock, at cost, 18 shares		(542	)		(547	)

Total stockholders’ equity		3,222			5,953

Total liabilities and stockholders’ equity	$	18,640		$	21,062

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share data)


			Capital in					Accumulated
			Excess					Other						Total
	Common		of Par		Treasury			Comprehensive			Retained			Stockholders’			Comprehensive
	Stock		Value		Stock			Losses			Earnings			Equity			Income
Balances as of February 24, 2007	$	229	$	2,708	$	(499	)	$	(235	)	$	3,103		$	5,306

Effects of changing pension plan measurement date pursuant to SFAS No. 158 (net of tax of $20 and $7, respectively)		—		—		—			32			(10	)		22

Beginning balance, as adjusted		229		2,708		(499	)		(203	)		3,093			5,328
Net earnings		—		—		—			—			593			593		$	593
Pension and other postretirement activity (net of tax of $70)		—		—		—			108			—			108			108
Sales of common stock under option plans		—		3		141			—			—			144			—
Cash dividends declared on common stock $0.6750 per share		—		—		—			—			(143	)		(143	)		—
Compensation under employee incentive plans		—		49		(4	)		—			—			45			—
Shares issued in settlement of zero-coupon convertible debentures and mandatory convertible securities		1		62		33			—			—			96			—
Purchase of shares for treasury		—		—		(218	)		—			—			(218	)		—

Balances as of February 23, 2008		230		2,822		(547	)		(95	)		3,543			5,953		$	701

(Unaudited)
Net loss		—		—		—			—			(2,654	)		(2,654	)	$	(2,654	)
Pension and other postretirement activity		—		—		—			1			—			1			1
Sales of common stock under option plans		—		3		12			—			—			15			—
Cash dividends declared on common stock $0.5150 per share		—		—		—			—			(109	)		(109	)		—
Compensation under employee incentive plans		—		23		16			—			—			39			—
Purchase of shares for treasury		—		—		(23	)		—			—			(23	)		—

Balances as of November 29, 2008	$	230	$	2,848	$	(542	)	$	(94	)	$	780		$	3,222		$	(2,653	)

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)


	Year-to-Date Ended
	November 29,			December 1,
	2008			2007
Cash flows from operating activities
Net earnings (loss)	$	(2,654	)	$	437
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Goodwill and intangible asset impairment charges		3,250			—
Depreciation and amortization		823			788
LIFO charge		58			27
Gain on sale of assets		(17	)		(4	)
Deferred income taxes		(123	)		(8	)
Stock-based compensation		36			42
Other		(10	)		(4	)
Changes in operating assets and liabilities, net of effects from acquisition and dispositions of businesses		(279	)		(277	)

Net cash provided by operating activities		1,084			1,001

Cash flows from investing activities
Proceeds from sale of assets		93			140
Purchases of property, plant and equipment		(934	)		(789	)
Other		15			18

Net cash used in investing activities		(826	)		(631	)

Cash flows from financing activities
Proceeds from issuance of long-term debt		396			11
Repayment of long-term debt		(316	)		(328	)
Proceeds from settlement of mandatory convertible securities		—			52
Payment of obligations under capital leases		(54	)		(43	)
Net proceeds from the sale of common stock under option plans and related tax benefits		10			154
Dividends paid		(109	)		(106	)
Payment for purchase of treasury shares		(23	)		(218	)

Net cash used in financing activities		(96	)		(478	)

Net increase (decrease) in cash and cash equivalents		162			(108	)
Cash and cash equivalents at beginning of year		243			285

Cash and cash equivalents at the end of period	$	405		$	177

See Notes to Condensed Consolidated Financial Statements.

SUPERVALU INC. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars and shares in millions, except per share data)

NOTE 1 — THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description

SUPERVALU INC. (“SUPERVALU” or the “Company”), a Delaware corporation, was organized in 1925 as the successor of two wholesale grocery firms established in the 1870’s. SUPERVALU is one of the largest companies in the United States grocery channel.

The Company conducts its retail operations throughout the United States under three retail food store formats: combination stores (defined as food and pharmacy), food stores and limited assortment food stores. Additionally, the Company provides supply chain services, primarily wholesale distribution, across the United States retail grocery channel. As of the close of the third quarter ended November 29, 2008, the Company conducted its retail food operations through a total of 2,460 retail stores, including 862 licensed limited assortment food stores.

Statement of Registrant

The accompanying condensed consolidated financial statements of the Company for the 12 weeks and 40 weeks ended November 29, 2008 and December 1, 2007 are unaudited and, in the opinion of management, contain all adjustments that are of a normal and recurring nature necessary to present fairly the financial condition and results of operations for such periods. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report on Form 10-K for the fiscal year ended February 23, 2008. The results of operations for the 12 weeks and 40 weeks ended November 29, 2008 are not necessarily indicative of the results expected for the full year. The Condensed Consolidated Balance Sheet as of February 23, 2008 has been derived from the audited Consolidated Balance Sheet as of that date.

Accounting Policies

The summary of significant accounting policies is included in the Notes to Consolidated Financial Statements set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended February 23, 2008. References to SUPERVALU and the Company refer to SUPERVALU INC. and its subsidiaries.

Fiscal Year

The Company’s fiscal year ends on the last Saturday in February. The Company’s first quarter consists of 16 weeks, while the second, third and fourth quarters each consist of 12 weeks, except for the fourth quarter of fiscal 2009 which includes 13 weeks. Because of differences in the accounting calendars of the Company and its wholly-owned subsidiary, New Albertson’s, Inc., the accompanying November 29, 2008 and February 23, 2008 Condensed Consolidated Balance Sheets include the assets and liabilities related to New Albertsons, Inc. as of November 27, 2008 and February 21, 2008, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. The Company’s banking arrangements allow the Company to fund outstanding checks when presented to the financial institution for payment, resulting in book overdrafts. Book overdrafts are recorded in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows. As of November 29, 2008 and February 23, 2008, the Company had net book overdrafts of $429 and $371, respectively.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of those estimates require difficult, subjective or complex judgments about matters that are inherently uncertain. Actual results could differ from those estimates.

Net Earnings (Loss) Per Share

Basic net earnings (loss) per share is calculated using net earnings (loss) available to stockholders divided by the weighted average number of shares outstanding during the period. Diluted net earnings (loss) per share is similar to basic net earnings (loss) per share except that the weighted average number of shares outstanding is after giving effect to the dilutive impacts of stock options, restricted stock awards and other dilutive securities. As a result of the net loss for the third quarter and year-to-date ended November 29, 2008, all potentially dilutive shares were antidilutive and therefore excluded from the calculation of diluted net loss per share.

The following table reflects the calculation of basic and diluted net earnings (loss) per share:


	Third Quarter Ended					Year-to-Date Ended
	November 29,			December 1,		November 29,			December 1,
	2008			2007		2008			2007
Net earnings (loss) per share—basic
Net earnings (loss)	$	(2,944	)	$	141	$	(2,654	)	$	437
Less: undistributed earnings allocable to contingently convertible debentures		—			—		—			(1	)

Net earnings (loss) available to common stockholders	$	(2,944	)	$	141	$	(2,654	)	$	436

Weighted average shares outstanding—basic		211			211		211			211
Net earnings (loss) per share—basic	$	(13.95	)	$	0.67	$	(12.56	)	$	2.06

Net earnings (loss) per share—diluted
Net earnings (loss)	$	(2,944	)	$	141	$	(2,654	)	$	437
Interest expense related to dilutive contingently convertible debentures, net of tax		—			—		—			1

Net earnings (loss) used for diluted net earnings (loss) per share calculation	$	(2,944	)	$	141	$	(2,654	)	$	438

Weighted average shares outstanding		211			211		211			211
Dilutive impact of options and restricted stock outstanding		—			3		—			4
Dilutive impact of convertible securities		—			—		—			1

Weighted average shares outstanding—diluted		211			214		211			216

Net earnings (loss) per share—diluted	$	(13.95	)	$	0.66	$	(12.56	)	$	2.03

Options and restricted stock of 23 and 21 shares were outstanding during the 12 weeks and 40 weeks ended November 29, 2008, respectively, but were excluded from the computation of diluted net loss per share as the effect of their inclusion would be antidilutive when applied to a net loss. Options and restricted stock of 7 and 6 shares were outstanding during the 12 weeks and 40 weeks ended December 1, 2007, respectively, but were excluded from the computation of diluted net earnings per share because they were antidilutive.

NOTE 2 — NEW ACCOUNTING STANDARDS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS No. 157 clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under SFAS No. 157, fair value measurements would be separately disclosed by level within the fair value hierarchy. In February 2008, the FASB approved FASB Staff Position (“FSP”) FAS 157-2, “Effective Date of FASB Statement No. 157,” that permits companies to partially defer the effective date of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. FSP FAS 157-2 did not permit companies to defer recognition and disclosure requirements for financial assets and financial liabilities or for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually. SFAS No. 157 became effective for the Company on February 24, 2008 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually and did not have a material effect on the Company’s consolidated financial statements. The Company will defer adoption of SFAS No. 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The Company is evaluating the effect on the consolidated financial statements of the implementation of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) expands the definition of a business combination and requires the fair value of the purchase price of an acquisition, including the issuance of equity securities, to be determined on the acquisition date. SFAS No. 141(R) also requires that all assets, liabilities, contingent consideration and contingencies of an acquired business be recorded at fair value at the acquisition date. In addition, SFAS No. 141(R) requires that acquisition costs generally be expensed as incurred, restructuring costs generally be expensed in periods subsequent to the acquisition date and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period impact income tax expense. SFAS No. 141(R) is effective for the Company’s fiscal year beginning March 1, 2009 on a prospective basis for all business combinations for which the acquisition date is on or after

the effective date, with the exception of the accounting for adjustments to income tax-related amounts, which is applied to acquisitions that closed prior to the effective date. The adoption of SFAS No. 141(R) to prior acquisitions for adjustments to income tax-related amounts is not expected to have a material effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51.” SFAS No. 160 changes the accounting and reporting for minority interests such that minority interests will be recharacterized as noncontrolling interests and will be required to be reported as a component of equity, and requires that purchases or sales of equity interests that do not result in a change in control be accounted for as equity transactions and, upon a loss of control, requires the interest sold, as well as any interest retained, to be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for the Company’s fiscal year beginning March 1, 2009, with early adoption prohibited. The adoption of SFAS No. 160 is not expected to have a material effect on the Company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133 for derivative instruments and hedging activities. SFAS No. 161 is effective February 28, 2009 for the Company, with early adoption permitted. The adoption of SFAS No. 161 is not expected to have a material effect on the Company’s consolidated financial statements.

In April 2008, the FASB approved FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets.” FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets.” FSP FAS 142-3 is effective for the Company’s fiscal year beginning March 1, 2009 on a prospective basis to intangible assets acquired on or after the effective date, with early adoption prohibited.

In May 2008, the FASB approved FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).” FSP APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, “Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants.” Additionally, FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for the Company’s fiscal year beginning March 1, 2009. The adoption of FSP APB 14-1 is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in computing earnings per share under the two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF 03-6-1 requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities in calculating earnings per share. FSP EITF 03-6-1 will be effective for the Company’s fiscal year beginning March 1, 2009, with early adoption prohibited. The adoption of FSP EITF 03-6-1 is not expected to have a material effect on the Company’s consolidated financial statements.

NOTE 3 — GOODWILL AND INTANGIBLE ASSETS

As of November 29, 2008, the Company had approximately $3,967 of Goodwill; $3,161 related to its Retail food segment and $806 related to its Supply chain services segment.

Changes in the Company’s Goodwill and Intangible assets consisted of the following:


	February			Additions/						Other Net			November 29,
	23, 2008			Amortization			Impairment			Adjustments			2008
Goodwill	$	6,957		$	—		$	(3,000	)	$	10		$	3,967

Intangible assets:
Trademarks and tradenames — indefinite-lived	$	1,370		$	—		$	(250	)	$	—		$	1,120
Favorable operating leases, customer lists, customer relationships and other (accumulated amortization of $187 and $141 as of November 29, 2008 and February 23, 2008, respectively)		717			7			—			(8	)		716
Non-compete agreements (accumulated amortization of $10 and $9 as of November 29, 2008 and February 23, 2008, respectively)		15			2			—			—			17

Total intangible assets		2,102			9			(250	)		(8	)		1,853
Accumulated amortization		(150	)		(50	)					3			(197	)

Total intangible assets, net	$	1,952											$	1,656

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company applies a fair value based impairment test to the net book value of goodwill and indefinite-lived intangible assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. For the third quarter of fiscal 2009 the Company’s stock price had a significant and sustained decline and book value per share substantially exceeded the stock price. Consistent with SFAS No. 142, the Company performed an interim impairment test of goodwill and indefinite-lived intangible assets at the end of the third quarter of fiscal 2009. Although this analysis has not been completed due to its complexity, based on the work performed to date the Company has recorded a preliminary estimate of impairment charges of $3,250, comprised of $3,000 of goodwill and $250 of indefinite-lived intangibles. The impairment charges are subject to finalization of fair values which the Company will complete in the fourth quarter of fiscal 2009. The Company believes that the preliminary estimates of impairment charges are reasonable and represent the Company’s best estimate of the impairment charges to be incurred; however, it is possible that material adjustments to the preliminary estimates may be required as the analysis is finalized.

Amortization expense of intangible assets with a definite life was $50 and $58 for the 40 weeks ended November 29, 2008 and December 1, 2007, respectively. Future amortization expense will be approximately $53 per fiscal year for each of the next five fiscal years.

NOTE 4 — RESERVES FOR CLOSED PROPERTIES

The Company maintains reserves for costs associated with closures of retail stores, distribution centers and other properties that are no longer being utilized in current operations. The Company provides for closed property operating lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments after the closing date, reduced by estimated subtenant rentals that could be reasonably obtained for the property.

Changes in the Company’s reserves for closed properties consisted of the following:


	February 23,							November 29,
	2008		Payments			Adjustments		2008
Reserves for closed properties	$	97	$	(17	)	$	—	$	80

NOTE 5 — DEBT

The following table details the Company’s outstanding debt obligations. For debt assumed in an acquisition, stated interest rates are followed by the effective rates in parentheses resulting from purchase accounting fair value adjustments.


	November			February 23,
	29, 2008			2008
6.01% to 8.70% (5.44% to 8.97%) Senior Notes, Medium Term Notes and Debentures due through May 2037 (face amount $5,230)	$	5,021		$	5,133
2.01% to 4.00% Revolving Credit Facility and Variable Rate Notes		2,132			1,933
2.53% Accounts Receivable Securitization Facility		276			272
0.78% to 1.15% Variable Rate Industrial Revenue Bonds		42			47
3.93% to 10.74% (3.93% to 7.75%) Secured Mortgages, secured by assets with a net book value of $68, due through May 2014 (face amount $39)		40			46
Other		18			20

		7,529			7,451
Less current maturities		(461	)		(267	)

Long-term debt	$	7,068		$	7,184

Certain of the Company’s credit facilities and long-term debt agreements have restrictive covenants and cross-default provisions which generally provide, subject to the Company’s right to cure, for the acceleration of payments due in the event of a breach of the covenant or a default in the payment of a specified amount of indebtedness due under certain other debt agreements. The Company was in compliance with all such covenants and provisions for all periods presented.

In May 2008, the Company amended and extended its 364-day accounts receivable securitization program. The Company can continue to borrow up to $300 on a revolving basis, with borrowings secured by eligible accounts receivable, which remain under the Company’s control. Facility fees under this program range from 0.225 percent to 2.00 percent, based on the Company’s credit ratings. The facility fee in effect on November 29, 2008, based on the Company’s current credit ratings, is 0.25 percent. As of November 29, 2008, there were $366 of accounts receivable pledged as collateral, classified in Receivables in the Condensed Consolidated Balance Sheet. Due to the Company’s intent to renew the facility or refinance it with the Revolving Credit Facility, the facility is classified in Long-term debt in the Condensed Consolidated Balance Sheets.

As of November 29, 2008, the Company had $701 of debt, excluding the Accounts Receivable Securitization Facility, with current maturities that are classified in Long-term debt in the Condensed Consolidated Balance Sheets due to the Company’s intent to refinance such obligations with the Revolving Credit Facility or other long-term debt.

NOTE 6 — INCOME TAXES

The Company's effective tax rate was 3.0 percent and 3.4 percent for the 12 weeks and 40 weeks ended November 29, 2008, respectively, compared to 39.0 percent for both the 12 weeks and 40 weeks ended December 1, 2007. The tax rate for fiscal 2009 reflects the impact of the impairment charges, the majority of which are non-deductible for income tax purposes. Excluding the impact of the impairment charges, the effective tax rate was 39.0 percent and 38.2 percent for the 12 weeks and 40 weeks ended November 29, 2008, respectively. The effective tax rate for fiscal 2008 was 39.3 percent.

NOTE 7 — STOCK-BASED AWARDS

The Company has stock options and restricted stock awards (collectively referred to as “stock-based awards”) outstanding under the following plans: 2007 Stock Plan, 2002 Stock Plan, 1997 Stock Plan, 1993 Stock Plan, 1983 Employee Stock Option Plan, SUPERVALU/Richfood Stock Incentive Plan, Albertsons Amended and Restated 1995 Stock-Based Incentive Plan and the Albertsons 2004 Equity and Performance Incentive Plan. The Company’s 2007 Stock Plan, as approved by stockholders in May 2007, is the only plan under which stock-based awards may currently be granted. The 2007 Stock Plan provides that the Board of Directors or the Executive Personnel and Compensation Committee of the Board (the “Compensation Committee”) may determine at the time of grant whether each stock-based award granted will be a non-qualified or incentive stock award under the Internal Revenue Code of 1986, as amended. The terms of each stock-based award will be determined by the Board of Directors or the Compensation Committee. Generally, stock-based awards granted prior to fiscal 2006 have a term of 10 years and effective in fiscal 2006, stock-based awards have not been granted for a term of more than seven years.

Stock options are granted to key salaried employees and to the Company’s non-employee directors to purchase common stock at an exercise price not less than 100 percent of the fair market value of the Company’s common stock on the date of grant. Generally, stock options vest over four years. Restricted stock awards are also awarded to key salaried employees. The vesting of restricted stock awards granted is determined at the discretion of the Board of Directors or the Compensation Committee. The restrictions on the restricted stock awards generally lapse between one and five years from the date of grant and the expense is recognized over the lapsing period.

Common stock is delivered out of treasury stock upon the exercise of stock-based awards. The provisions of future stock-based awards may change at the discretion of the Board of Directors or the Compensation Committee.

The Company recognized pre-tax stock-based compensation expense (included primarily in Selling and administrative expenses in the Condensed Consolidated Statements of Earnings) related to stock-based awards of $8 and $36 for the 12 weeks and 40 weeks ended November 29, 2008, respectively, compared to $5 and $42 for the 12 weeks and 40 weeks ended December 1, 2007, respectively.

During the 40 weeks ended November 29, 2008, the Company granted approximately 4 stock options. The weighted average grant date fair value of the stock options granted during the 40 weeks ended November 29, 2008 was $7.92.

To calculate the fair value of stock options, the Company uses the Black-Scholes option pricing model. The significant weighted average assumptions relating to the valuation of the Company’s stock options for the 40 weeks ended November 29, 2008 were as follows:


Dividend yield		2.0	%
Volatility rate		28.1 – 36.4	%
Risk-free interest rate		2.0 – 3.6	%
Expected option life	1.0 – 5.4 years

NOTE 8 — TREASURY STOCK PURCHASE PROGRAM

On May 28, 2008, the Board of Directors of the Company adopted and announced a new annual share repurchase program authorizing the Company to purchase up to $70 of the Company’s common stock. Stock purchases will be made primarily from the cash generated from the settlement of stock options. This annual authorization program replaced all existing share repurchase programs. The Company did not repurchase any shares during the 12 weeks ended November 29, 2008. During the 40 weeks ended November 29, 2008, the Company purchased 0.6 shares under this program at an average cost of $25.88 per share. As of November 29, 2008, there remained $53 available to repurchase the Company’s common stock.

The Company did not repurchase any shares during the 12 weeks ended November 29, 2008 under the previously existing share repurchase program. During the 40 weeks ended November 29, 2008, the Company purchased 0.2 shares under the previously existing share repurchase program at an average cost of $30.01 per share. The Company did not repurchase any shares during the 12 weeks ended December 1, 2007 under the previously existing share repurchase program. During the 40 weeks ended December 1, 2007, the Company purchased 5 shares under the previously existing share repurchase program at an average cost of $45.05 per share.

NOTE 9 — BENEFIT PLANS

Substantially all employees of the Company are covered by various contributory and non-contributory pension, profit sharing or 401(k) plans. Union employees participate in multi-employer retirement plans under collective bargaining agreements, unless the collective bargaining agreement provides for participation in plans sponsored by the Company. In addition to sponsoring both defined benefit and defined contribution pension plans, the Company provides healthcare and life insurance benefits for eligible retired employees under postretirement benefit plans and short-term and long-term disability benefits to former and inactive employees prior to retirement under post-employment benefit plans. The terms of the postretirement benefit plans vary based on employment history, age and date of retirement. For most retirees, the Company provides a fixed dollar contribution and retirees pay contributions to fund the remaining cost.

Net periodic benefit expense for defined benefit pension plans and other postretirement benefit plans is as follows:


	Third Quarter Ended
	Pension Benefits						Other Postretirement Benefits
	November 29,			December 1,			November 29,		December 1,
	2008			2007			2008		2007
Service cost	$	2		$	6		$	—	$	—
Interest cost		30			29			3		2
Expected return on assets		(33	)		(32	)		—		—
Amortization of net actuarial loss		—			2			—		1

Net periodic benefit (income) expense	$	(1	)	$	5		$	3	$	3


	Year-to-Date Ended
	Pension Benefits						Other Postretirement Benefits
	November 29,			December 1,			November 29,			December 1,
	2008			2007			2008			2007
Service cost	$	6		$	22		$	1		$	1
Interest cost		99			95			8			7
Expected return on assets		(108	)		(104	)		—			—
Amortization of prior service benefit		—			—			(1	)		(1	)
Amortization of net actuarial loss		—			10			2			4
Curtailment		—			6			—			—

Net periodic benefit (income) expense	$	(3	)	$	29		$	10		$	11

During the 40 weeks ended November 29, 2008, the Company made contributions of approximately $17 to its pension plans and $1 to its other postretirement benefit plans.

NOTE 10 — COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The Company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers as of November 29, 2008. These guarantees were generally made to support the business growth of affiliated retailers. The guarantees are generally for the entire terms of the leases or other debt obligations with remaining terms that range from less than one year to 22 years, with a weighted average remaining term of approximately 11 years. For each guarantee issued, if the affiliated retailer defaults on a payment, the Company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the affiliated retailer. The Company reviews performance risk related to its guarantees of affiliated retailers on a quarterly basis based on internal measures of credit performance. As of November 29, 2008, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was approximately $167 and represented approximately $94 on a discounted basis. Based on the indemnification agreements, personal guarantees and results of the quarterly review of performance risk, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote. Accordingly, no amount has been recorded in the Condensed Consolidated Balance Sheets for these contingent obligations under the Company’s guarantee arrangements.

The Company is contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. The Company could be required to satisfy the obligations under the leases if any of the assignees are unable to fulfill their lease obligations. Due to the wide distribution of the Company’s assignments among third parties, and various other remedies available, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote.

In the ordinary course of business, the Company enters into supply contracts to purchase products for resale. These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. As of November 29, 2008, the Company had approximately $2,125 of non-cancelable future purchase obligations primarily related to supply contracts.

The Company is a party to a variety of contractual agreements under which the Company may be obligated to indemnify other parties for certain matters, which indemnities may be secured by operation of law or otherwise, in the ordinary course of business. These contracts primarily relate to the Company’s commercial contracts, operating leases and other real estate contracts, financial agreements, agreements to provide services to the Company and agreements to indemnify officers, directors and employees in the performance of their work. While the Company’s aggregate indemnification obligation could result in a material liability, the Company is not aware of any current matters that it expects to result in a material liability.

Legal Proceedings

In April 2000, a class action complaint was filed against Albertson’s, Inc. (“Albertsons”), as well as American Stores Company, American Drug Stores, Inc., Sav-on Drug Stores, Inc. (“Sav-on Drug Stores”) and Lucky Stores, Inc. (“Lucky Stores”), wholly-owned subsidiaries of Albertsons, in the Superior Court for the County of Los Angeles, California (Gardner, et al. v. American Stores Company, et al.) by assistant managers seeking recovery of overtime based on the plaintiffs’ allegation that they were improperly classified as exempt under California law. In May 2001, the Court certified a class with respect to Sav-on Drug Stores assistant managers. A case with very similar claims, involving the Sav-on Drug Stores assistant managers and operating managers, was also filed in April 2000 against Sav-on Drug Stores in the Superior Court for the County of Los Angeles, California (Rocher, Dahlin, et al. v. Sav-on Drug Stores, Inc.), and was certified as a class action in June 2001 with respect to assistant managers and operating managers. The two cases were consolidated in December 2001. New Albertson’s, Inc. was added as a named defendant in November 2006. Plaintiffs seek overtime wages, meal and rest break penalties, other statutory penalties, punitive damages, interest, injunctive relief and the attorneys’ fees and costs. The Company is vigorously defending this lawsuit. Although this lawsuit is subject to the uncertainties inherent in the litigation process, based on the information presently available to the Company, management does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In September 2008, a class action complaint was filed against the Company, as well as International Outsourcing Services, LLC (“IOS”), Inmar, Inc., Carolina Manufacturer’s Services, Inc., Carolina Coupon Clearing, Inc. and Carolina Services, in the United States District Court in the Eastern District of Wisconsin. The plaintiffs in the case are a consumer goods manufacturer, a grocery co-operative and a retailer marketing services company who allege on behalf of a purported class that the Company and the other defendants (i) conspired to restrict the markets for coupon processing services under the Sherman Act and (ii) were part of an illegal enterprise to defraud the plaintiffs under the Federal Racketeer Influenced and Corrupt Organizations Act. The plaintiffs seek monetary damages, attorneys’ fees and injunctive relief. The Company intends to vigorously defend this lawsuit, however all proceedings have been stayed in the case pending the result of the criminal prosecution of certain former officers of IOS. Although this lawsuit is subject to the uncertainties inherent in the litigation process, based on the information presently available to the Company, management does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Company is also involved in routine legal proceedings incidental to its operations. Some of these routine proceedings involve class allegations, many of which are ultimately dismissed. Management does not expect that the ultimate resolution of these legal proceedings will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The statements above reflect management’s current expectations based on the information presently available to the Company. However, predicting the outcomes of claims and litigation and estimating related costs and exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary materially from current expectations. In addition, the Company regularly monitors its exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and its estimates with respect to related costs and exposures and believes recorded reserves are adequate. It is possible, although management believes it is remote, that material differences in actual outcomes, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates, could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Pension Plan / Health and Welfare Plan Contingencies

The Company contributes to various multi-employer pension plans under collective bargaining agreements, primarily defined benefit pension plans. These plans generally provide retirement benefits to participants based on their service to contributing employers. Based on available information, the Company believes that some of the multi-employer plans to which it contributes are underfunded. Company contributions to these plans are likely to continue to increase in the near term. However, the amount of any increase or decrease in contributions will depend on a variety of factors, including the results of the Company’s collective bargaining efforts, investment return on the assets held in the plans, actions taken by the trustees who manage the plans and requirements under the Pension Protection Act of 2006 and Section 412(e) of the Internal Revenue Code. Furthermore, if the Company were to significantly reduce operations or exit certain markets or otherwise cease making contributions to these plans, it could trigger a partial or complete withdrawal that would require the Company to fund its proportionate share of a plan’s unfunded vested benefits.

The Company also makes contributions to multi-employer health and welfare plans in amounts set forth in the related collective bargaining agreements. A small minority of the collective bargaining agreements contain reserve requirements that may trigger unanticipated contributions resulting in increased healthcare expenses. If these healthcare provisions cannot be renegotiated in a manner that reduces the prospective healthcare cost as the Company intends, the Company’s Selling and administrative expenses could increase in the future.

NOTE 11 — SEGMENT INFORMATION

Refer to page 2 for the Company’s segment information.

NOTE 12 — SUBSEQUENT EVENT

On January 7, 2009, the Company announced that it expects to incur pre-tax charges in the range of $150 to $200 in the fourth quarter of fiscal 2009 related to closing certain non-strategic store locations and other cost mitigation efforts.


ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars and shares in millions, except per share data)

OVERVIEW

SUPERVALU is one of the largest grocery companies in the United States. The Company operates in two segments of the grocery industry, Retail food and Supply chain services, primarily wholesale distribution, across the United States retail grocery channel. As of November 29, 2008, the Company has approximately 190,000 employees, 2,500 owned and licensed stores, 900 in-store pharmacies and 130 fuel centers.

The unprecedented decline in the economy and continuing credit market turmoil during the third quarter of fiscal 2009 combined with high food inflation and energy costs continue to negatively impact consumer confidence and spending. If these trends continue, it could lead to further reduced consumer spending which could impact the Company’s sales growth. For the full year, identical store retail sales growth (which is defined as stores operating for four full quarters, including store expansions and excluding fuel and planned store closures) is projected to be approximately negative 1.0 percent. The Company is committed to maintaining its financial flexibility and investing prudently for the long term.

RESULTS OF OPERATIONS

In the third quarter of fiscal 2009, net sales were $10,171 and net loss was $2,944, or $13.95 per basic and diluted share. Results for the third quarter of fiscal 2009 include the preliminary estimate of non-cash goodwill and intangible asset impairment charges of $3,250 before tax or $3,076 after tax, or $14.57 per diluted share, as more fully described below. In the third quarter of fiscal 2008, net sales were $10,211 and net earnings were $141, or $0.67 per basic share and $0.66 per diluted share. Results for the third quarter of fiscal 2008 included acquisition-related costs (defined as one-time transaction costs associated with the acquisition of New Albertsons, Inc., which primarily include supply chain consolidation costs, employee-related benefit costs and consultant fees) of $7 after tax, or $0.03 per diluted share.

Year-to-date for fiscal 2009, net sales were $33,744 and net loss was $2,654, or $12.56 per basic and diluted share. Year-to-date results for fiscal 2009 include the preliminary estimate of goodwill and intangible asset impairment charges of $3,250 before tax or $3,076 after tax, or $14.54 per diluted share, as more fully described below. Year-to-date results for fiscal 2009 also include acquisition-related costs of $8 after tax, or $0.04 per diluted share. Year-to-date for fiscal 2008, net sales were $33,661 and net earnings were $437, or $2.06 per basic share and $2.03 per diluted share. Results for fiscal 2008 year-to-date included acquisition-related costs of $36 after tax, or $0.16 per diluted share.

THIRD QUARTER RESULTS

Net Sales

Net sales for the third quarter of fiscal 2009 were $10,171 compared with $10,211 last year, primarily reflecting a decrease in Supply chain services sales. Retail food sales were 77.3 percent of Net sales and Supply chain services sales were 22.7 percent of Net sales for the third quarter of fiscal 2009, compared with 77.0 percent and 23.0 percent, respectively, last year.

Retail food net sales for the third quarter of fiscal 2009 were $7,861 compared with $7,858 last year. New store growth was offset by the impact of store closures and negative identical store retail sales. Identical store retail sales growth for the third quarter of fiscal 2009 compared to last year was negative 0.5 percent as a result of soft sales and higher levels of competitive activity.

Total retail square footage at the end of the third quarter of fiscal 2009 was approximately 71 million. Total retail square footage decreased 0.3 percent from the third quarter of fiscal 2008. Total retail square footage, excluding store closures, increased 2.0 percent over the third quarter of fiscal 2008.

Supply chain services net sales for the third quarter of fiscal 2009 were $2,310 compared with $2,353 last year, reflecting the on-going transition of a national retailer’s volume to self-distribution and customer attrition, which was partially offset by the pass through of inflation and new business growth.

Gross Profit

Gross profit, as a percent of Net sales, increased 20 basis points to 22.4 percent in the third quarter of fiscal 2009 compared to 22.2 percent last year. The increase primarily reflects the benefit of merchandising initiatives, higher margins on fuel and a favorable impact from the change in business segment mix, partially offset by higher LIFO charges.

Selling and Administrative Expenses

Selling and administrative expenses, as a percent of Net sales, were 18.9 percent in the third quarter of fiscal 2009 compared to 18.3 percent last year, primarily reflecting increases in employee-related costs and depreciation expense and an unfavorable impact from the change in business segment mix, partially offset by lower acquisition-related costs.

Goodwill and intangible asset impairment charges

Operating Earnings (Loss)

Operating loss for the third quarter of fiscal 2009 was $2,891 compared with operating earnings of $395 last year. Retail food operating loss for the third quarter of fiscal 2009 was $2,941 compared with operating earnings of $342 last year, reflecting $3,250 of goodwill and intangible asset impairment charges with the remaining decrease of $33, or 50 basis points, primarily attributable to higher employee-related costs and occupancy costs partially offset by higher gross margins and acquisition synergies.

Supply chain services operating earnings for the third quarter of fiscal 2009 were $69, or 3.0 percent of Supply chain services net sales, compared with $69, or 2.9 percent of Supply chain services net sales last year.

Net Interest Expense

Net interest expense was $143 in the third quarter of fiscal 2009 compared with $164 last year, primarily reflecting lower debt levels and the benefit of lower borrowing rates on floating rate debt in the third quarter of fiscal 2009.

Income Tax Provision (Benefit)

The income tax benefit was $90, or 3.0 percent of loss before income taxes, in the third quarter of fiscal 2009 compared with income tax expense of $90, or 39.0 percent of earnings before income taxes, last year. The tax rate for the third quarter of fiscal 2009 reflects the impact of the impairment charges, the majority of which are non-deductible for income tax purposes. Excluding the impact of the impairment charges, the effective tax rate for the third quarter of fiscal 2009 was 39.0 percent.

Net Earnings (Loss)

Net loss was $2,944, or $13.95 per basic and diluted share, in the third quarter of fiscal 2009 compared with net earnings of $141, or $0.67 per basic share and $0.66 per diluted share last year. Net loss for the third quarter of fiscal 2009 includes the preliminary estimate of goodwill and intangible asset impairment charges of $3,076 after tax, or $14.57 per diluted share.

YEAR-TO-DATE RESULTS

Net Sales

Net sales for fiscal 2009 year-to-date increased to $33,744 compared with $33,661 last year, primarily reflecting an increase in Supply chain services sales. Retail food sales were 77.5 percent of Net sales and Supply chain services sales were 22.5 percent of Net sales for fiscal 2009 year-to-date, compared with 78.0 percent and 22.0 percent, respectively, last year.

Retail food net sales for fiscal 2009 year-to-date were $26,168 compared with $26,259 last year. New store growth was offset by the impact of store closures and negative identical store retail sales. Identical store retail sales growth for fiscal 2009 year-to-date compared to last year was negative 0.9 percent, as a result of soft sales and higher levels of competitive activity.

Supply chain services net sales for fiscal 2009 year-to-date were $7,576 compared with $7,402 last year. The increase primarily reflects the pass through of inflation and new business growth, partially offset by normal customer attrition and the on-going transition of a national retailer’s volume to self-distribution.

Gross Profit

Gross profit, as a percent of Net sales, decreased 20 basis points to 22.6 percent for fiscal 2009 year-to-date compared to 22.8 percent last year. The decrease is primarily attributable to investments in price and higher levels of promotional spending as well as an unfavorable impact attributable to the change in business segment mix.

Selling and Administrative Expenses

Selling and administrative expenses, as a percent of Net sales, increased 10 basis points to 19.2 percent for fiscal 2009 year-to-date compared to 19.1 percent last year, primarily reflecting higher employee-related costs and occupancy costs partially offset by a favorable impact attributable to the change in business segment mix.

Goodwill and intangible asset impairment charges

Operating Earnings (Loss)

Operating loss for fiscal 2009 year-to-date was $2,093 compared with operating earnings of $1,267 last year. Retail food operating loss for fiscal 2009 year-to-date was $2,258, compared with operating earnings of $1,176 last year, reflecting $3,250 of goodwill and intangible asset impairment charges with the remaining decrease of $184, or 70 basis points, primarily attributable to investments in price, higher promotional spending and higher occupancy costs partially offset by acquisition synergies.

Supply chain services operating earnings for fiscal 2009 year-to-date were $232, or 3.1 percent of Supply chain services net sales, compared with $199, or 2.7 percent of Supply chain services net sales last year, primarily reflecting improved sales leverage and cost reduction initiatives.

Net Interest Expense

Net interest expense was $474 for fiscal 2009 year-to-date compared with $550 last year, primarily reflecting lower debt levels and the benefit of lower borrowing rates on floating rate debt in fiscal 2009.

Income Tax Provision

Income tax expense was $87, or 3.4 percent of loss before income taxes, for fiscal 2009 year-to-date compared with $280, or 39.0 percent of earnings before income taxes, last year. The tax rate for fiscal 2009 year-to-date reflects the impact of the impairment charges recorded in the third quarter of fiscal 2009, the majority of which are non-deductible for income tax purposes, and non-taxable life insurance proceeds received during the second quarter of fiscal 2009. Excluding the impact of the impairment charges, the effective tax rate for fiscal 2009 year-to-date was 38.2 percent. The effective tax rate for fiscal 2008 was 39.3 percent.

Net Earnings (Loss)

Net loss was $2,654, or $12.56 per basic and diluted share, for fiscal 2009 year-to-date compared with net earnings of $437, or $2.06 per basic share and $2.03 per diluted share last year. Net loss for fiscal 2009 year-to-date includes the preliminary estimate of goodwill and intangible asset impairment charges of $3,076 after tax, or $14.54 per diluted share.

SUBSEQUENT EVENT

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $1,084 for fiscal 2009 year-to-date compared with $1,001 last year.

Net cash used in investing activities was $826 for fiscal 2009 year-to-date compared with $631 last year. The increase is primarily attributable to higher capital spending in the first 40 weeks of fiscal 2009 compared to last year. Fiscal 2009 year-to-date capital spending relates primarily to store remodeling activity, new retail stores and technology expenditures.

Net cash used in financing activities was $96 for fiscal 2009 year-to-date compared with $478 last year. The decrease is primarily attributable to increased proceeds received from the issuance of long-term debt due to higher levels of capital spending in fiscal 2009 year-to-date compared to last year.

Management expects that the Company will continue to replenish operating assets with internally generated funds. There can be no assurance, however, that the Company’s business will continue to generate cash flow at current levels. The Company will continue to obtain short-term or long-term financing from its credit facilities. Long-term financing will be maintained through existing and new debt issuances. Maturities of debt issued will depend on management’s views with respect to the relative attractiveness of interest rates at the time of issuance and other debt maturities. Although there can be no assurances in these difficult economic times for financial institutions, the Company believes that the lenders participating in its credit facilities will be willing and able to provide financing to the Company in accordance with their legal obligations under the credit facilities. While the Company’s short-term and long-term financing abilities are believed to be adequate as a supplement to internally generated cash flows to fund capital expenditures and acquisitions as opportunities arise, the current decline in the global financial markets may negatively impact the Company’s ability to access the capital markets in a timely manner and on attractive terms. Management believes that the Company’s cash flows and revolving credit facility will be more than sufficient to meet the Company’s financing needs through fiscal 2011 should the capital markets remain unattractive. However, the Company fully intends to access these markets as conditions allow.

The Company has senior secured credit facilities in the amount of $4,000. These facilities were provided by a group of lenders and consist of a $2,000 five-year revolving credit facility (the “Revolving Credit Facility”), a $750 five-year term loan (“Term Loan A”) and a $1,250 six-year term loan (“Term Loan B”). The rates in effect on outstanding borrowings under the facilities as of November 29, 2008, based on the current credit rating of the facilities, were 0.20 percent for the facility fees, LIBOR plus 0.875 percent for Term Loan A, LIBOR plus 1.25 percent for Term Loan B, LIBOR plus 1.00 percent for LIBOR revolving advances and Prime Rate for base rate revolving advances.

All obligations under the senior secured credit facilities are guaranteed by each material subsidiary of the Company. The obligations are also secured by a pledge of the equity interests in those same material subsidiaries, limited as required by the existing public indentures of the Company, such that the respective debt issued need not be equally and ratably secured.

The senior secured credit facilities also contain various financial covenants, including a minimum interest expense coverage ratio and a maximum debt leverage ratio. The interest expense coverage ratio shall not be less than 2.20 to 1 for each of the fiscal quarters ending up through December 30, 2008, and moves progressively to a ratio of not less than 2.30 to 1 for the fiscal quarters ending after December 30, 2009. The debt leverage ratio shall not exceed 4.25 to 1 for each of the fiscal quarters ending up through December 30, 2008 and moves progressively to a ratio not to exceed 3.75 to 1 for each of the fiscal quarters ending after December 30, 2009. As of November 29, 2008, the Company was in compliance with the covenants of the senior secured credit facilities.

Borrowings under Term Loan A and Term Loan B may be repaid, in full or in part, at any time without penalty. Term Loan A has required repayments, payable quarterly, equal to 2.50 percent of the initial drawn balance for the first four quarterly payments (year one) and 3.75 percent of the initial drawn balance for each quarterly payment in years two through five, with the entire remaining balance due at the five year anniversary of the inception date, June 1, 2006. Term Loan B has required repayments, payable quarterly, equal to 0.25 percent of the initial drawn balance, with the entire remaining balance due at the six year anniversary of the inception date. Prepayments shall be applied pro rata to the remaining amortization payments.

As of November 29, 2008, there were $479 of outstanding borrowings under the Revolving Credit Facility, Term Loan A had a remaining principal balance of $534, of which $113 was classified as current, and Term Loan B had a remaining principal balance of $1,119, of which $11 was classified as current. Letters of credit outstanding under the Revolving Credit Facility were $377 and the unused available credit under the Revolving Credit Facility was $1,144. The Company also had $4 of outstanding letters of credit issued under separate agreements with financial institutions. Letters of credit primarily support workers’ compensation, merchandise import programs and payment obligations. The Company pays fees, which vary by instrument, of up to 1.4 percent on the outstanding balance of the letters of credit.

The Company has $202 of debentures that contain put options exercisable in May 2009 classified as current that would require the Company to repay borrowed amounts prior to the scheduled maturity in May 2037.

The Company remains in compliance with all of its debt covenants.

Capital spending during the third quarter of fiscal 2009 was approximately $273, including approximately $4 in capital leases. Capital spending year-to-date for fiscal 2009 was approximately $949, including approximately $15 in capital leases. Capital spending primarily included store remodeling activity, new retail stores and technology expenditures. The Company’s capital spending for fiscal 2009 is projected to be approximately $1,200, including capital leases.

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The Company is a party to various legal proceedings arising from the normal course of business as described in Part II—Other Information, Item 1, under the caption “Legal Proceedings” and in Note 10 — Commitments, Contingencies and Off-Balance Sheet Arrangements, none of which, in management’s opinion, is expected to have a material adverse impact on the Company’s financial condition, results of operations or cash flows.

Pension Plan / Health and Welfare Plan Contingencies

unanticipated contributions resulting in increased healthcare expenses. If these healthcare provisions cannot be renegotiated in a manner that reduces the prospective healthcare cost as the Company intends, the Company’s Selling and administrative expenses could increase in the future.

Contractual Obligations

There have been no material changes in the Company’s contractual obligations since the end of fiscal 2008. Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended February 23, 2008 for additional information regarding the Company’s contractual obligations.

CRITICAL ACCOUNTING POLICIES

The description of critical accounting policies is included in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 23, 2008.

NEW ACCOUNTING STANDARDS

CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE SECURITIES LITIGATION REFORM ACT

Any statements contained in this report regarding the outlook for our businesses and their respective markets, such as projections of future performance, statements of our plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on our assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause our future results to differ materially from those expressed or implied in any forward-looking statements contained in this report. These factors include the factors discussed in Item 1A of the Company’s Quarterly Report on Form 10-Q for the second quarter ended September 6, 2008 under the caption “Risk Factors,” the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

Economic and Industry Conditions

	•		Adverse changes in economic conditions that affect consumer spending or buying habits

	•		Food and drug price inflation or deflation

	•		Increases in energy costs and commodity prices, which could impact consumer spending and buying habits and the cost of doing business

	•		The availability of favorable credit and trade terms

	•		Changes in interest rates

	•		The outcome of negotiations with partners, governments, suppliers, unions or customers

Competitive Practices

	•		The Company’s ability to attract and retain customers

	•		The Company’s ability to hire, train or retain employees

	•		Competition from other food or drug retail chains, supercenters, non-traditional competitors and emerging alternative formats in our retail markets

	•		Declines in the retail sales activity of our supply chain services customers due to competition or increased self-distribution

	•		Changes in demographics or consumer preferences that affect consumer spending habits

	•		The impact of consolidation in the retail food and supply chain services industries

	•		The success of the Company’s promotional and sales programs and the Company’s ability to respond to the promotional practices of competitors

	•		The ability to successfully improve buying practices and shrink

	•		The increase in Own Brand penetration could impact identical store retail sales growth

Food Safety

•

Events that give rise to actual or potential food contamination, drug contamination or food-borne illness or any adverse publicity relating to these types of concern, whether or not valid

Integration of Acquired Businesses

•

Our ability to successfully combine our operations with any businesses we have acquired or may acquire, to achieve expected synergies and to minimize the diversion of management’s attention and resources

Store Expansion and Remodeling

	•		Potential delays in the development, construction or start-up of planned projects

	•		Our ability to locate suitable store or distribution center sites, negotiate acceptable purchase or lease terms and build or expand facilities in a manner that achieves appropriate returns on our capital investment

	•		The adequacy of our capital resources for future acquisitions, the expansion of existing operations or improvements to facilities

	•		Our ability to make acquisitions at acceptable rates of return, assimilate acquired operations and integrate the personnel of the acquired business

Liquidity

	•		Additional funding requirements to meet anticipated debt payments and capital needs

	•		The impact of acquisitions on our level of indebtedness, debt ratings, costs and future financial flexibility

	•		The impact of the recent turmoil in the financial markets on the availability and cost of credit

Labor Relations

•

Potential work disruptions resulting from labor disputes

Employee Benefit Costs

•

Increased operating costs resulting from rising employee benefit costs or pension funding obligations

Regulatory Matters

	•		The ability to timely obtain permits, comply with government regulations or make capital expenditures required to maintain compliance with government regulations

	•		Changes in applicable laws and regulations that impose additional requirements or restrictions on the operation of our businesses

Self-Insurance

	•		Variability in actuarial projection regarding workers’ compensation and general and automobile liability

	•		Potential increase in the number or severity of claims for which the Company is self-insured

	•		Significant volatility in the amount and timing of payments

Legal and Administrative Proceedings

	•		Unfavorable outcomes in litigation, governmental or administrative proceedings or other disputes

	•		Adverse publicity related to such unfavorable outcomes

Information Technology

•

Difficulties in developing, maintaining or upgrading information technology systems

Security

•

Business disruptions or losses resulting from wartime activities, acts or threats of terror, data theft, information espionage, or other criminal activity directed at the food and drug industry, the transportation industry or computer or communications systems

Severe Weather, Natural Disasters and Adverse Climate Changes

	•		Property damage or business disruption resulting from severe weather conditions and natural disasters that affect the Company, its customers or suppliers

	•		Unseasonably adverse climate conditions that impact the availability or cost of certain products in the grocery supply chain

Transition Support Services

•

Our ability to provide transition support services to the purchasers of the non-core supermarket business of Albertsons in a cost effective and non-disputed manner with minimal diversion of management time

Accounting Matters

•

Changes in accounting standards that impact our financial statements

•

Changes in the preliminary estimate of impairment charges, which the Company expects to finalize in the fourth quarter of fiscal 2009


ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in market risk for the Company in the period covered by this report. See the discussion of market risk in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 23, 2008 under the heading “Quantitative and Qualitative Disclosures About Market Risk.”


ITEM 4.		CONTROLS AND PROCEDURES

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of November 29, 2008. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is (1) recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

In connection with the evaluation described above, there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION


ITEM 1.		LEGAL PROCEEDINGS

The Company is subject to various lawsuits, claims and other legal matters that arise in the ordinary course of conducting business, none of which, in management’s opinion, is expected to have a material adverse impact on the Company’s financial condition, results of operations or cash flows. Each of the legal proceedings discussed below has been previously discussed in the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended June 14, 2008 and September 6, 2008.


ITEM 1A.		RISK FACTORS

There were no material changes in risk factors for the Company in the period covered by this report. See the discussion of risk factors in Item 1A of the Company’s Quarterly Report on Form 10-Q for the second quarter ended September 6, 2008, which describe various risks and uncertainties to which the Company is or may become subject. These risks and uncertainties could have a material impact on the Company’s business, financial condition or results of operations.


ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


					Total Number of
					Shares Purchased		Maximum Number
					as Part of		of Shares that May
					Publicly		Yet be Purchased
					Announced		Under the
	Total Number		Average		Treasury Stock		Treasury Stock
(in millions, except shares and per share amounts)	of Shares		Price Paid		Purchase		Purchase
Period (1)	Purchased (2)		Per Share		Program (3)		Program (3)
First four weeks
September 7, 2008 to October 4, 2008		1,636	$	22.42		—		2,588,478
Second four weeks
October 5, 2008 to November 1, 2008		852	$	20.57		—		3,750,022
Third four weeks
November 2, 2008 to November 29, 2008		2,770	$	14.43		—		4,483,653

Totals		5,258	$	17.91		—		4,483,653


(1)		The reported periods conform to the Company’s fiscal calendar composed of thirteen 28-day periods, except for the thirteenth period of fiscal 2009 which includes 35 days. The third quarter of fiscal 2009 contains three 28-day periods.

(2)		These amounts include the deemed surrender by participants in the Company’s compensatory stock plans of 5,258 shares of previously issued common stock. These are in payment of the purchase price for shares acquired pursuant to the exercise of stock options and satisfaction of tax obligations arising from such exercises, as well as from the vesting of restricted stock awards granted under such plans.

(3)		On May 28, 2008, the Board of Directors of the Company adopted and announced a new annual share repurchase program authorizing the Company to purchase up to $70 of the Company’s common stock. Stock purchases will be made from the cash generated from the settlement of stock options. This annual authorization program replaced all existing share repurchase programs.


ITEM 3.		DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.		SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


ITEM 5.		OTHER INFORMATION

None.


ITEM 6.		EXHIBITS


	3.1			Restated Bylaws, as amended December 3, 2008, is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed with the SEC on December 3, 2008.
	4.1			Supplemental Indenture No. 3 dated as of December 29, 2008, between NAI, Inc., New Albertson’s, Inc. and U.S. Bank Trust National Association, as Trustee, to Indenture dated as of May 1, 1992, between Albertson’s, Inc. and Morgan Guaranty Trust Company of New York, as Trustee.
	10.1			SUPERVALU Executive Deferred Compensation Plan (2008 Statement) *
	10.2			SUPERVALU Directors’ Deferred Compensation Plan (2009 Restatement) *
	31.1			Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2			Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1			Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2			Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		Indicates management contracts, compensatory plans or arrangements required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.

SIGNATURES

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


	SUPERVALU INC. (Registrant)
Dated: January 8, 2009	/s/ PAMELA K. KNOUS
	Pamela K. Knous
	Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

EXHIBIT INDEX

Exhibit


	3.1			Restated Bylaws, as amended December 3, 2008, is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed with the SEC on December 3, 2008.
	4.1			Supplemental Indenture No. 3 dated as of December 29, 2008, between NAI, Inc., New Albertson’s, Inc. and U.S. Bank Trust National Association, as Trustee, to Indenture dated as of May 1, 1992, between Albertson’s, Inc. and Morgan Guaranty Trust Company of New York, as Trustee.
	10.1			SUPERVALU Executive Deferred Compensation Plan (2008 Statement) *
	10.2			SUPERVALU Directors’ Deferred Compensation Plan (2009 Restatement) *
	31.1			Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2			Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1			Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2			Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		Indicates management contracts, compensatory plans or arrangements required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.

EX-4.1 2 c48042exv4w1.htm EX-4.1 EX-4.1

Exhibit 4.1

SUPPLEMENTAL INDENTURE No. 3, dated as of December 29, 2008 (this “Supplemental Indenture”), among NAI, Inc., an Ohio corporation (“NAI”), New Albertson’s, Inc., a Delaware corporation (the “Company”), and U.S. BANK TRUST NATIONAL ASSOCIATION, as trustee (the “Trustee”) under the Indenture (as hereinafter referred to).

W I T N E S S E T H

WHEREAS, Albertson’s, Inc., a Delaware corporation (“Albertson’s”) and U.S. Bank Trust National Association, successor as Trustee, entered into an Indenture, dated as of May 1, 1992 (as supplemented by Supplemental Indenture No. 1, dated as of May 7, 2004 and Supplemental Indenture No. 2, dated as of June 1, 2006, the “Indenture”) providing for the issuance from time to time of Securities in one or more series, of which Securities were issued and a portion of which are currently Outstanding;

WHEREAS, pursuant to Supplemental Indenture No. 2, dated as of June 1, 2006, the Company assumed the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of the Indenture on the part Albertson’s to be performed or observed thereunder;

WHEREAS, NAI has entered into that Merger Agreement, dated as of December ___, 2008, by and among NAI and the Company (the “Merger Agreement”) pursuant to which, substantially simultaneously with the effectiveness of this Supplemental Indenture, the Company is merging with and into NAI (the “Merger”), the separate existence of the Company shall cease and NAI shall survive and continue as the continuing company, and, upon effectiveness of the Merger, NAI shall change its name to New Albertson’s, Inc.;

WHEREAS, as a condition to the Merger, Section 801(1) of the Indenture requires, among other things, that NAI execute and deliver an indenture supplemental to the Indenture to assume the obligations of the Company under the Indenture and the Securities;

WHEREAS, NAI and the Company desire to enter into a supplemental indenture pursuant to the terms of Sections 801(1) and 901(1) of the Indenture;

WHEREAS, pursuant to Section 901(1) of the Indenture, NAI, the Company and the Trustee may enter into this Supplemental Indenture without the consent of any Holder;

NOW, THEREFORE, for and in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, it is hereby agreed among the Company, NAI and the Trustee, for the equal and proportionate benefit of the respective Holders from time to time of the Securities, as follows:

ARTICLE ONE
ASSUMPTION OF PAYMENT, PERFORMANCE AND OBSERVANCE

Section 1.01. NAI hereby expressly assumes the due and punctual payment of the

principal of and any premium and interest on all the Securities and the performance or observance of every covenant of the Indenture on the part of the Company to be performed or observed thereunder.

ARTICLE TWO
REPRESENTATIONS AND WARRANTIES

Section 2.01. NAI represents and warrants that it is a corporation duly organized and validly existing under the laws of the State of Ohio.

Section 2.02. Each of the Company and NAI represents and warrants that it has all requisite power and authority to execute, deliver and perform its obligations hereunder, under the Indenture and under the Securities, and that the execution, delivery and performance by the Company and NAI of this Supplemental Indenture and the Indenture have been duly authorized by all necessary corporate or other organizational action.

Section 2.03. Each of the Company and NAI represents and warrants that immediately after giving effect to the Merger, and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of the Merger as having been incurred by the Company or such Subsidiary at the time of the Merger, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing.

Section 2.04. Each of the Company and NAI represents and warrants that the Merger shall not result in the properties or assets of the Company or of NAI becoming subject to any mortgage, pledge, lien, security interest or other encumbrance, other than mortgages, pledges, liens, security interests or other encumbrances which could be created pursuant to Section 1008 of the Indenture without equally and ratably securing the Securities.

Section 2.05. The Company represents and warrants that it has delivered to the trustee an Officers’ Certificate and Opinion of Counsel as required under Section 801(4) of the Indenture.

ARTICLE THREE
SUCCESSION AND SUBSTITUTION

Section 3.01. Upon the consummation of the Merger, Section 802 of the Indenture shall have effect to the extent set forth therein, subject to such Section.

ARTICLE FOUR
MISCELLANEOUS

Section 4.01. Capitalized terms used in this Supplemental Indenture that have not otherwise been defined herein shall have the meanings assigned thereto in the Indenture. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby.

Section 4.02. Except as supplemented hereby, all provisions in the Indenture shall remain in full force and effect.

Section 4.03. This Supplemental Indenture is supplemental to the Indenture, and the Indenture and this Supplemental Indenture shall henceforth be read and construed together.

Section 4.04. If any provision of this Supplemental Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939 (the “TIA”) that is required under the TIA to be part of and govern any provision of this Supplemental Indenture, such provision of the TIA shall control. If any provision of this Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Supplemental Indenture, as the case may be.

Section 4.05. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and this Supplemental Indenture shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 4.06. Nothing in this Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Indenture, this Supplemental Indenture or the Securities.

Section 4.07. All agreements of NAI in this Supplemental Indenture shall bind its successors and assigns, whether so expressed or not.

Section 4.08. Any request, demand, notice or other communication to NAI in connection with the Indenture, as supplemented, shall be sufficient for every purpose hereunder if in writing and mailed, first class postage paid, to NAI addressed as follows:

NAI, Inc.
c/o SUPERVALU INC.
11840 Valley View Road
Eden Prairie, MN 55344
Attention: Treasurer

or to any other address hereafter furnished in writing to the Trustee by NAI for such purpose.

Section 4.09. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument.

Section 4.10. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

Section 4.11. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.

Section 4.12. The recitals and statements herein contained are made by the Company and NAI and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first above written.


		NAI, INC.

		By Name:		/s/ John Boyd John Boyd
		Title:		Group Vice President and Treasurer

		NEWALBERTSON’S, INC.

		By Name:		/s/ John Boyd John Boyd
		Title:		Group Vice President and Treasurer

		U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee

		By Name:		/s/ Patrick J. Crowley Patrick J. Crowley
		Title:		Vice President

[Supplemental Indenture Signature Page]

EX-10.1 3 c48042exv10w1.htm EX-10.1 EX-10.1

Exhibit 10.1

SUPERVALU
EXECUTIVE DEFERRED COMPENSATION PLAN
(2008 Statement)

Adopted December 3, 2008
But Effective January 1, 2008

SUPERVALU
EXECUTIVE DEFERRED COMPENSATION PLAN
(2008 Statement)

TABLE OF CONTENTS


	Page
SECTION 1. INTRODUCTION AND DEFINITIONS		1

1.1. Successor Plan Created
1.1.1. Antecedents
1.1.2. New Plan Created
1.2. Unfunded Obligation
1.3. Definitions
1.3.1. Accounts
(a) Deferral Account
(b) DB Restoration Account
1.3.2. Affiliate
1.3.3. Base Compensation
1.3.4. Beneficiary
1.3.5. Board of Directors
1.3.6. Chief Executive Officer
1.3.7. Code
1.3.8. Compensation Committee
1.3.9. Employers
1.3.10. Enrollment Window
1.3.11. ERISA
1.3.12. Fiscal Year
1.3.13. Incentive Compensation
1.3.14. Interest Crediting Rate
1.3.15. Participant
1.3.16. Plan
1.3.17. Plan Administrator
1.3.18. Plan Statement
1.3.19. Plan Year
1.3.20. Principal Sponsor
1.3.21. Qualified DB Plans
1.3.22. Qualified DC Plans

1.3.23. Separation from Service

-i-


	Page
1.3.24. Unforeseeable Emergency
1.4. Transition Rules

SECTION 2. PARTICIPATION		7

2.1. Participation
2.1.1. Automatic Eligibility
2.1.2. Eligibility by Affirmative Selection
2.2. Specific Exclusion
2.3. Authority to Make Determinations

SECTION 3. PARTICIPANT ELECTIONS		9

3.1. Class Year Elections
3.1.1. Class Year Deferral Elections
3.1.2. Class Year Payment Elections
3.1.3. General Conditions
3.2. Revocation Upon Unforeseeable Emergency
3.3. Subsequent Changes in Payment Elections

SECTION 4. CREDITS TO ACCOUNTS		11

4.1. Crediting to Accounts
4.1.1. Base Deferral Credit
4.1.2. Incentive Deferral Credit
4.1.3. DB Restoration Credit
4.1.4. DC Discretionary Credit
4.1.5. Interest Crediting
4.2. Other Adjustments
4.2.1. Taxes
4.2.2. Payments
4.3. Multiple Sub-Accounts Authorized

SECTION 5. VESTING		14

SECTION 6. PAYMENTS		15

6.1. DB Restoration Accounts
6.2. Other Accounts
6.2.1. Form of Payment
6.2.2. Time of Payment
6.2.3. Default
6.2.4. Payment Upon Death
6.2.5. Installment Amounts
6.3. Generally Applicable Rules
6.3.1. Processing

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	Page
6.3.2. Code §162(m) Delay
6.3.3. Six-Month Delay
6.3.4. No Spousal Rights
6.3.5. Facility of Payment
6.3.6. Payments in Cash
6.3.7. No Other Payment Events
6.4. Special Rules
6.4.1. Unforeseeable Emergency
6.4.2. Lump Sum Payment to Pay Taxes
6.5. Designation of Beneficiaries
6.5.1. Right to Designate
6.5.2. Failure of Designation
6.5.3. Disclaimers by Beneficiaries
6.5.4. Definitions
6.5.5. Special Rules

SECTION 7. FUNDING OF PLAN		23

7.1. Hedging Investments
7.2. Corporate Obligation

SECTION 8. AMENDMENT AND TERMINATION		24

8.1. Amendment and Termination
8.1.1. Before a Change in Control
8.1.2. After a Change in Control
8.1.3. Authority to Amend and to Terminate
8.2. No Oral Amendments
8.3. Plan Binding on Successors

SECTION 9. DETERMINATIONS — RULES AND REGULATIONS		26

9.1. Determinations
9.2. Rules and Regulations
9.3. Method of Executing Instruments
9.4. Claims Procedure
9.4.1. Initial Claim
9.4.2. Notice of Initial Adverse Determinations
9.4.3. Request for Review
9.4.4. Claim on Review
9.4.5. Notice of Adverse Determination for Claim on Review

9.5. Rules and Regulations
9.5.1. Adoption of Rules
9.5.2. Special Rules

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	Page
9.5.3. Limitations and Exhaustion

SECTION 10. PLAN ADMINISTRATION		32

10.1. The Principal Sponsor
10.1.1. Officers
10.1.2. Chief Executive Officer
10.2. Conflict of Interest
10.3. Service of Process

SECTION 11. CONSTRUCTION		33

11.1. ERISA Status
11.2. IRC Status
11.3. Effect on Other Plans
11.4. Disqualification
11.5. Rules of Document Construction
11.6. References to Laws
11.7. Receipt of Documents
11.8. Effect on Employment Status
11.9. Choice of Law
11.10. ERISA Administrator
11.11. Delegation
11.12. Tax Withholding
11.13. Expenses
11.14. Service of Process
11.15. Spendthrift Provision
11.16. Certifications
11.17. Errors in Computations

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SUPERVALU
EXECUTIVE DEFERRED COMPENSATION PLAN
(2008 Statement)

SECTION 1

INTRODUCTION AND DEFINITIONS

1.1. Successor Plan Created.

1.1.1. Antecedents. Effective October 1, 1985, SUPERVALU INC., a Delaware corporation (hereinafter sometimes referred to as the “Principal Sponsor”) created the “SUPER VALU STORES, INC. EXECUTIVE DEFERRED COMPENSATION PLAN” (sometimes called “WealthOp” or “WealthOp I”) as a nonqualified, unfunded, elective deferred compensation plan for the purpose of allowing eligible employees of the Principal Sponsor to defer the receipt of a portion of the remuneration which would otherwise have been paid to them until the time or times specified under the rules of that plan. WealthOp I was not terminated but further deferrals under WealthOp I were discontinued when, on February 8, 1989 but effective as of June 1, 1989, the Principal Sponsor adopted the “SUPER VALU STORES, INC. EXECUTIVE DEFERRED COMPENSATION PLAN II” (sometimes called “WealthOp II”). The Principal Sponsor has, from time to time, amended WealthOp II in various respects.

1.1.2. New Plan Created. This Plan is not an amendment of WealthOp I or WealthOp II. It is, rather, a new nonqualified, unfunded, deferred compensation plan created for the purpose of allowing eligible employees of the Principal Sponsor to defer the receipt of compensation with respect to services performed during Plan Years beginning on and after the January 1, 2008.

	(a)		Accrual Cessation. Incident to the adoption of this Plan, all further deferrals under WealthOp II will be discontinued as provided in amendments of WealthOp II.

	(b)		Non-Grandfathered Amounts. All amounts that were deferred under WealthOp II with respect to periods after December 31, 2004, that have not been previously paid shall be transferred from WealthOp II to this Plan to be held and paid in accordance with the terms of this Plan and in conformity with section 409A of the Code.

	(c)		Grandfathered Amounts. It is the Principal Sponsor’s express intention that, after such transfer, all amounts deferred and still held under WealthOp I and WealthOp II are “grandfathered” and, therefore, not subject to the requirements of section 409A of the Code. It is expressly intended that neither WealthOp I nor WealthOp II will hold any amounts that are subject to section 409A of the Code.

1.2. Unfunded Obligation. The obligation of an Employer to make payments under this Plan constitutes only the unsecured (but legally enforceable) promise of the Employer to make such payments. No Participant shall have any lien, prior claim or other security interest in any property of the Employers. Neither the Principal Sponsor nor the Employers shall have an obligation to establish or maintain any fund, trust or account (other than a bookkeeping account or reserve) for the purpose of funding or paying the benefits promised under this Plan. If such a fund, trust or account is established, the property therein shall remain the sole and exclusive property of the Employers and shall, at a minimum, be subject to the claims of creditors of the Employers in the event of the Principal Sponsor’s bankruptcy or insolvency. The Employer shall be obligated to pay the benefits of this Plan out of its general assets.

1.3. Definitions. When the following terms are used herein with initial capital letters, they shall have the following meanings:

1.3.1. Accounts — the separate bookkeeping accounts representing the separate unfunded and unsecured general obligation of the Principal Sponsor established with respect to each Participant and to which are credited the amounts specified in Section 4, which shall vest or be forfeited as provided in Section 5 and from which payments will be made pursuant to Section 6. The following Accounts will be maintained (in U.S. dollars) under this Plan for each Participant.

(a)

Deferral Account — the Account maintained for each Participant to which are credited

	(i)		the deferrals, if any, of Base Compensation made at the election of each Participant pursuant to Section 4.1.1 or pursuant to comparable provisions of prior plan documents, and

	(ii)		the deferrals, if any, of Incentive Compensation made at the election of each Participant pursuant to Section 4.1.2 or pursuant to comparable provisions of prior plan documents,

	(iii)		the discretionary awards, if any, made by and at the election of an Employer pursuant to Section 4.1.4 or pursuant to comparable provisions of prior plan documents.

(b)

DB Restoration Account — the Account maintained for each Participant (in U.S. dollars) to which are credited the awards made by and at the election of an Employer for the purpose of restoring certain Qualified DB Plan benefits not accrued as a consequence of deferrals under this Plan or WealthOp II pursuant to Section 4.1.3 or pursuant to comparable provisions of prior plan documents.

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1.3.2. Affiliate — a business entity which is affiliated in ownership with the Principal Sponsor that is treated as a single employer under the rules of Section 414(b) and (c) of the Code (applying an eighty percent common ownership standard).

1.3.3. Base Compensation — the cash base salary and other cash remuneration (excluding Incentive Compensation) paid to the Participant by the Employers attributable to a Plan Year. Base Compensation shall be attributed to the Plan Year in which the services are performed and not the Plan Year in which payment is made, except that Base Compensation paid after the end of a Plan Year that is attributable to services during the final payroll period in that Plan Year shall be treated as Base Compensation attributable to the subsequent Plan Year (i.e., the Plan Year in which the payment is made) if it is paid pursuant to the timing arrangement under which the Employers normally compensated employees for services performed during a payroll period.

1.3.4. Beneficiary — a person designated by a Participant (or automatically by operation of the Plan Statement) to receive all or a part of the Participant’s Accounts in the event of the Participant’s death prior to full payment thereof. A person so designated is not a Beneficiary until the death of the Participant.

1.3.5. Board of Directors — the board of directors of the Principal Sponsor.

1.3.6. Chief Executive Officer — the Chief Executive Officer of the Principal Sponsor or the person who regularly performs the duties normally associated with such office on behalf of the Principal Sponsor.

1.3.7. Code — the Internal Revenue Code of 1986, as amended (including, when the context requires, all regulations, interpretations and rulings issued thereunder).

1.3.8. Compensation Committee — the Executive Personnel and Compensation Committee of the Board of Directors including any successor to such Compensation Committee by whatever name known.

1.3.9. Employers — the Principal Sponsor and each business entity affiliated with the Principal Sponsor that employs persons who are designated for participation in this Plan (collectively the “Employers” and separately an “Employer”).

1.3.10. Enrollment Window — a period designated from time to time by the Plan Administrator during which class year deferral elections and class year payment elections can be received with respect to services performed in the subsequent Plan Year and services performed in the Fiscal Year that begins during that subsequent Plan Year.

1.3.11. ERISA — the Employee Retirement Income Security Act of 1974, as amended (including, when the context requires, all regulations, interpretations and rulings issued thereunder).

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1.3.12. Fiscal Year — the fiscal period of fifty-two (52) or fifty-three (53) consecutive weeks ending on the last Saturday in each February.

1.3.13. Incentive Compensation — the cash payments, if any, made from time to time by the Employers to Participants pursuant to the Supervalu Annual Bonus Plan or such other bonus plans of the company or any subsidiary. At the discretion of the Plan Sponsor, the Plan may provide for the opportunity to allow for deferrals of certain long-term incentive awards, which are payable in cash. This opportunity to offer this deferral type will be assessed and determined by the Plan Sponsor on a plan year basis.

1.3.14. Interest Crediting Rate — a rate, determined once for each Plan Year, equal to the twelve-month rolling average of Moody’s Corporate Average Bond Index for the twelve-month period ending in the month of September preceding the first day of the Plan Year as determined by the Plan Administrator. The Interest Crediting Rate for calendar year 2008 shall be six and thirty-six one hundredths percent (6.36%). Notwithstanding the foregoing, through December 31, 2008, the Interest Crediting Rate and the rules for crediting interest on amounts deferred under WealthOp II during the years 2005, 2006 and 2007 and transferred to this Plan pursuant to Section 1.1.2(b) shall be the rate in effect under the rules and procedures of WealthOp II.

1.3.15. Participant — an employee who becomes a Participant in this Plan in accordance with the provisions of Section 2. An individual who has become a Participant shall be considered to continue as a Participant in this Plan until the earlier of: (i) the date the Participant no longer has any Account (that is, the Participant has received a payment of all of the Participant’s Accounts or all Accounts have been forfeited as hereinafter provided or both), or (ii) the date of the Participant’s death.

1.3.16. Plan — the nonqualified, deferred compensation program maintained by Principal Sponsor established for the benefit of Participants eligible to participate therein, as set forth in the Plan Statement. (As used herein, “Plan” does not refer to the document pursuant to which this Plan is maintained. That document is referred to herein as the “Plan Statement”). The Plan shall be referred to as the “SUPERVALU EXECUTIVE DEFERRED COMPENSATION PLAN.”

1.3.17. Plan Administrator — the Principal Sponsor or, when affirmatively designated by the Benefit Plans Committee, some other person or committee.

1.3.18. Plan Statement — this document entitled “SUPERVALU EXECUTIVE DEFERRED COMPENSATION PLAN (2008 Statement)” as adopted as of January 1, 2008, as the same may be amended from time to time thereafter.

1.3.19. Plan Year — the calendar year beginning each January 1 and ending on the following December 31.

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1.3.20. Principal Sponsor — SUPERVALU INC., a Delaware corporation, or any successor thereto that succeeds to sponsorship of this Plan either as a matter of law or by contract.

1.3.21. Qualified DB Plans — the Supervalu Retirement Plan.

1.3.22. Qualified DC Plans — the tax qualified defined contribution plans maintained from time to time by Employers for the benefit of Participants in this Plan.

1.3.23. Separation from Service— a severance of an employee’s employment relationship with the Employers and all Affiliates, if any, for any reason other than the employee’s death.

	(a)		Facts and Circumstances & 20% Rule. Whether a Separation from Service has occurred is determined based on whether the facts and circumstances indicate that the Employer and employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the employee would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Employer and all Affiliates if the employee has been providing services to the Employer and all Affiliates less than thirty-six months).

	(b)		Transfers. A transfer from employment with an Employer to employment with an Affiliate of an Employer shall not constitute a Separation from Service. A decision to not select a Participant for continued participation for a subsequent Plan Year shall not constitute a Separation from Service.

	(c)		Leaves of Absence. A Separation from Service shall not be deemed to occur while the employee is on military leave, sick leave or other bona fide leave of absence if the period does not exceed six (6) months or, of longer, so long as the employee retains a right to reemployment with the Employer or an Affiliate under an applicable statute or by contract. If the period of leave exceeds six (6) months and the employee does not retain a right to reinstatement under an applicable statute or by contract, the Separation from Service is deemed to occur on the first date immediately following the six-month period. For this purpose, a leave is bona fide only if, and so long as, there is a reasonable expectation that the employee will return to perform services for the Employer or an Affiliate. Notwithstanding the foregoing, a twenty-nine (29) month period of

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absence will be substituted for such six (6) month period if the leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of no less than six (6) months and that causes the employee to be unable to perform the duties of his or her position of employment.

(d)

Sale of Assets. If as part of a sale or other disposition of assets by the Employer to a buyer that is not an Affiliate, an employee who was providing services to the Employer immediately before the transaction and is providing services to the buyer immediately after the transaction would otherwise experience a Separation from Service from the Employer as a result of the transaction, the Employer and the buyer shall have the discretion to specify that the affected employee has not experienced a Separation from Service if (i) the transaction results from bona fide, arm’s length negotiations, (ii) all affected employees are treated consistently, and (iii) such treatment is specified in writing no later than the closing date of the transaction.

1.3.24. Unforeseeable Emergency — a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Unforeseeable Emergency shall be construed to be consistent with the meaning of that term in section 409A of the Code and regulations and guidance thereunder.

1.4. Transition Rules. Although this Plan Statement governs amounts deferred after 2004, it is recognized that this Plan Statement is being adopted in 2007 and that much relevant guidance under section 409A of the Code was not published until April 2007. It is therefore acknowledged and recognized that as a matter of practical necessity, many of the good faith and reasonable rules and practices that were effectively in place after 2004 and before this Plan Statement is adopted are not precisely those reflected in this Plan Statement but were an amalgam of rules that existed under WealthOp II and a good faith interpretations of section 409A of the Code and the limited guidance published under section 409A of the Code. It is not the intent of the Principal Sponsor in adopting this Plan Statement that those rules and practices be questioned or that the Plan Administrator be obligated to retroactively conform them to this Plan Statement absent some conclusion that doing so is required as a matter of compliance with section 409A of the Code or other law. The rules in this Plan Statement are intended to be effective only as of January 1, 2008.

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SECTION 2

PARTICIPATION

2.1. Participation.

2.1.1. Automatic Eligibility. Each person who is the Chief Executive Officer, a corporate Senior Vice President or a corporate Executive Vice President of the Principal Sponsor shall automatically be a Participant in this Plan for such Plan Year.

2.1.2. Eligibility by Affirmative Selection. Prior to the first day of the Enrollment Window for a Plan Year, the Principal Sponsor may select others for participation in this Plan in accordance with the following rules.

	(a)		Each employee of an Employer prospectively selected for participation in this Plan for a particular Plan Year shall become a Participant in this Plan as of the first day of a Plan Year that commences after that selection.

	(b)		No employee may be selected for participation unless the Principal Sponsor affirmatively determines that such employee will be for that Plan Year a member of a select group of management or highly compensated employees (as that expression is used in ERISA).

	(c)		Employees shall be selected for participation in this Plan on a Plan Year by Plan Year basis. Selection for one Plan Year does not entitle the employee to be selected any subsequent Plan Year.

	(d)		If an employee selected for participation in this Plan for one Plan Year is not selected for a subsequent Plan Year, no further deferrals shall be made by or for that employee in that subsequent Plan Year or for the Fiscal Year that begins in that Plan Year but the Account shall not thereby become distributable.

2.2. Specific Exclusion. Notwithstanding anything apparently to the contrary in the Plan Statement or in any written communication, summary, resolution or document or oral communication, no individual shall be a Participant in this Plan, develop benefits under this Plan or be entitled to receive benefits under this Plan (either for himself or herself or his or her survivors) unless such individual is a member of a select group of management or highly compensated employees (as that expression is used in ERISA). If the Plan Administrator, a court of competent jurisdiction, any representative of the U.S. Department of Labor or any other governmental, regulatory or similar body makes any direct or indirect, formal or informal, determination that an individual is not a member of a select group of management or highly compensated employees (as that expression is used in ERISA), then notwithstanding any other rule of this Plan, the following shall apply to that individual.

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	(a)		No Class Year Deferral Elections. Such individual shall not be permitted to make a class year deferral election for any Plan Year commencing after that determination (including any Fiscal Year that commences during that Plan Year). Any prior class year deferral election shall be cancelled for all Plan Years and Fiscal Years commencing after that determination.

	(b)		No Class Year Payment Elections. Such individual shall not be permitted to make or to change any class year payment election after the date of that determination.

	(c)		Cessation of Employer Credits. No credit other than an interest credit shall be made to that individual’s Deferral Account or DB Restoration Account after the date of that determination.

2.3. Authority to Make Determinations. Unless affirmatively delegated to another by the Chief Executive Officer pursuant to Section 10, the principal human resources officer of the Principal Sponsor shall act for the Principal Sponsor with respect to all matters in this Section 2.

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SECTION 3

PARTICIPANT ELECTIONS

3.1. Class Year Elections. Subject to the provisions for subsequent changes in class year payment elections, a Participant shall make a class year deferral election or a class year payment election or both with respect to each Plan Year as follows.

3.1.1. Class Year Deferral Elections. Each person who is or may become a Participant for a Plan Year may make a class year deferral election during the Enrollment Window preceding that Plan Year.

	(a)		Base Deferral Election. The Participant may elect to defer the receipt of not less than five percent (5%) nor more than eighty percent (80%) (or such lesser percentage as the Plan Administrator may from time to time establish) of the Participant’s Base Compensation that is attributable to services performed during that Plan Year. All amounts deferred shall be credited as provided in Section 4.1.1.

	(b)		Incentive Deferral Election. The Participant may elect to defer the receipt of not less than five percent (5%) nor more than one hundred percent (100%) (or such lesser percentage as the Plan Administrator may from time to time establish) of the Participant’s Incentive Compensation attributable to services performed during the Fiscal Year that commences during that Plan Year and to be credited as provided in Section 4.1.2.

	(c)		Default. If for any reason (including reasons beyond the control of the Participant) a Participant does not clearly and timely make a class year deferral election to defer Base Compensation or Incentive Compensation, the Participant shall be deemed to have elected not to defer any Base Compensation or any Incentive Compensation.

3.1.2. Class Year Payment Elections. Each person who is or may become a Participant for a Plan Year may make a class year payment election during the Enrollment Window for that Plan Year to be effective with respect to amounts attributable to that Plan Year and the Fiscal Year that commences within that Plan Year. Each class year payment election shall designate the time and a form for the payment on a basis that is consistent with Section 6.2.

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class year payment election shall contain such information as the Plan Administrator may require. The class year deferral election and class year payment election, if any, shall be made in writing upon forms furnished by the Plan Administrator and shall conform to such other procedural and substantive rules consistent with the foregoing as the Plan Administrator shall establish. Class Year deferral elections and class year payment elections may be made electronically if and to the extent the Plan Administrator determines from time to time.

3.2. Revocation Upon Unforeseeable Emergency. If a Participant receives an Unforeseeable Emergency payment under this Plan, the Participant’s class year deferral election, if any, in effect at the time of such payment shall be cancelled so that further deferrals after the date of that payment shall not be made of Base Compensation attributable to the Plan Year in which such payment is made or of Incentive Compensation attributable to the Fiscal Year that commences during the Plan Year in which such payment is made.

3.3. Subsequent Changes in Payment Elections. Notwithstanding the foregoing, after the close of the Election Window for a Plan Year, a Participant shall be permitted to change a class year payment election that was affirmatively made or made by default for that Plan Year if such election change is made in the manner prescribed by the Plan Administrator and if the following conditions are satisfied.

	(a)		The change in class year payment election shall not take effect until the date that is twelve (12) months after the date on which the Plan Administrator receives the change.

	(b)		If the Participant changes the form of payment, any payment that is made on account of an event described in Section 6.2.2 (i.e., payment on account of a Separation from Service or payment at a specified date), shall be delayed until the date that is five (5) years after the date the payment would otherwise have been made.

	(c)		If the Participant changes a specified date of payment under Section 6.2.2(a) or (c), the election change (i) must be received by the Plan Administrator at least twelve (12) months before the date previously specified by the Participant, and (ii) the new specified date shall be at least five (5) years after the date previously specified.

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SECTION 4

CREDITS TO ACCOUNTS

4.1. Crediting to Accounts.

4.1.1. Base Deferral Credit. The Plan Administrator shall credit to the Deferral Account of each Participant the dollars, if any, of Base Compensation the Participant elected to defer into the Deferral Account pursuant to Section 3. Such amount shall be credited as nearly as practicable as of the time or times when the Base Compensation would have been paid to the Participant but for the election to defer.

4.1.2. Incentive Deferral Credit. The Plan Administrator shall credit to the Deferral Account of each Participant the dollars, if any, of Incentive Compensation the Participant elected to defer into the Deferral Account pursuant to Section 3. Such amount shall be credited as nearly as practicable as of the time or times when the Incentive Compensation would have been paid to the Participant but for the election to defer.

4.1.3. DB Restoration Credit. In recognition that a Participant’s deferral of compensation under this Plan (or under WealthOp I or WealthOp II) may reduce the benefit that the Participant accrues under a Qualified DB Plan. As soon as may be practicable after a Participant’s Separation from Service, the Plan Administrator shall determine, in its sole discretion and applying actuarial methods and assumptions selected by the Plan Administrator in its sole discretion, the present value of the benefit that the Participant would have received under the Qualified DB Plans if the Participant had not elected to defer compensation under this Plan (or under WealthOp I or WealthOp II). That amount, subject to the nonduplication rules in Section 11.5(d), shall be credited to the Participant’s DB Restoration Account in dollars as of the date of the Participant’s Separation from Service.

4.1.4. DC Discretionary Credit. From time to time, the Plan Administrator may determine in its sole discretion an additional discretionary credit, if any, to be made for certain Participants.

(a)

Permitted Considerations. In determining the amount of any discretionary credit, the Plan Administrator may take into account, without limiting the generality of the foregoing, the following factors.

	(i)		The amount of Employer discretionary profit sharing or other Employer contribution that the Participant would have received under the Qualified DC plans for that Plan Year if the Participant had not elected to defer any compensation under this Plan.

	(ii)		The amount of Employer discretionary profit sharing or other Employer contribution that each Participant would have received

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under the Qualified DC Plans for that Plan Year if the compensation limit of section 401(a)(17) of the Code had not been in effect for that Plan Year and the annual addition limitation of section 415(c) of the Code had not been in effect for that Plan Year.

(iii)

The amount, if any, of matching or other Employer contribution that is promised from time to time in enrollment and other materials furnished to Participants.

	(b)		Prohibited Considerations. Notwithstanding the foregoing, in determining the amount of any discretionary credit, neither the amount nor timing of a Participant’s pre-tax or after-tax contributions to any qualified plan shall directly or indirectly be taken into account in any way that has any effect on the amount or the time of the discretionary credit under this Plan.

	(c)		Crediting. The discretionary credit shall be made only if the Participant has not had a Separation from Service as of that last day of the Plan Year. Subject to the nonduplication rule in Section 11.5(d), the discretionary credit, if any, to be made for a Participant, , shall be credited to the Participant’s Deferral Account in dollars as of such date or dates as may be determined by the Plan Administrator in its sole discretion.

4.1.5. Interest Crediting. In addition to the foregoing amounts, each Account shall be credited with interest at the Interest Crediting Rate in accordance with rules established by the Plan Administrator.

4.2. Other Adjustments.

4.2.1. Taxes. The amount to be credited to each Account and the value of each Account shall be reduced by the amount of federal, state and local income tax and the amount of employment taxes (e.g., FICA) that are withheld or paid with respect to such credits and Account, if any.

4.2.2. Payments. Each Participant’s Account shall be reduced (or the credits to the Account shall be reduced) by any amount paid to or with respect to the Participant as of the date as of which the payment is made.

4.3. Multiple Sub-Accounts Authorized. To the extent the Plan Administrator determines that it is necessary or useful to the administration of this Plan, the Plan Administrator may cause multiple Deferral Accounts and DB Restoration Accounts to be established for each Participant. To the extent the Plan Administrator determines that it is necessary or useful to the administration of Accounts under this Plan, the Plan Administrator shall adopt such other rules

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and policies supplemental to and consistent with the express terms of this Plan Statement as it believes appropriate.

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SECTION 5

VESTING

Except as elsewhere specifically provided, the Deferral Account and the DB Restoration Account of each Participant shall be fully (100%) vested and nonforfeitable at all times.

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SECTION 6

PAYMENTS

6.1. DB Restoration Accounts. A Participant’s DB Restoration Account, if any (reduced by the amount of any applicable payroll, withholding and other taxes, if any, withheld therefrom), shall be paid as follows.

	(a)		If the Participant has a Separation from Service before death, it shall be paid to the Participant in a single lump sum cash payment during the month of March in the Plan Year following the Plan Year in which the Participant’s Separation from Service occurs. If the Participant dies before receipt of that payment, the payment shall be paid to the Participant’s Beneficiary as nearly as practicable at the same time as it would have been paid to the Participant.

	(b)		If the Participant dies before Separation from Service, it shall be paid to the Participant’s Beneficiary in a single lump sum cash payment during the month of March in the Plan Year following the Plan Year in which the Participant dies. If the Beneficiary dies before receipt of that payment, the payment shall be paid to the Beneficiary’s estate as nearly as practicable at the same time as it would have been paid to the Beneficiary.

The Participant shall not be permitted to make any election with respect to the time or the form of payment of the DB Restoration Account.

6.2. Other Accounts. A Participant’s Deferral Account (reduced by the amount of any applicable payroll, withholding and other taxes, if any, withheld therefrom) shall be paid in accordance with the Participant’s class year payment elections made pursuant to Section 3 or in the absence of an effective class year payment election, in accordance with the default rule hereinafter specified.

6.2.1. Form of Payment. In each class year payment election, a Participant may designate that payment of all amounts attributable to the Plan Year for which it is made (including the Fiscal Year that commences within that Plan Year) shall be paid to the Participant, if then living, in one of the following forms.

	(a)		Lump Sum. Payment may be made in a single lump sum.

	(b)		Installments. Payment may be made in five (5), ten (10) or fifteen (15) annual installments if the payment is commenced on account of a Separation from Service. Payment may be made in two (2), three (3), four (4) or five (5) annual installments if payment is commenced as of a specified date.

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6.2.2. Time of Payment. In each class year payment election, a Participant may designate that payment shall be made (i.e., lump sum) or commenced (i.e., annual installments) to the Participant, if then living, under one of the following rules.

	(a)		Specified Date. If the Participant’s class year payment election designates that payment is to be made or commenced on a specified date, payment shall be made or commenced during the month of March specified by the Participant in the class year payment election.

	(b)		Separation from Service. If the Participant’s class year payment election designates that payment is to be made on account of Separation from Service, payment shall be made or commenced during the month of March in the Plan Year following the Plan Year in which the Participant’s Separation from Service occurs.

6.2.3. Default. If for any reason (including reasons beyond the control of the Participant) the class year payment election is not clearly and timely made to the contrary, it shall be deemed to have been an election of a single lump sum payment to be made during the month of March in the Plan Year following the Plan Year in which the Participant’s Separation from Service occurs.

6.2.4. Payment Upon Death. If any payment is due under this Plan after the death of the Participant, it shall be paid to the Participant’s Beneficiary (and not to the Participant’s estate or any other person) as follows.

	(a)		Continued Installments. If payment had commenced to the deceased Participant before his or her death in annual installments as specified above (i.e., the Participant had received at least one installment payment), payment to the Beneficiary shall be made in a series of annual installments payable over the remainder of the period.

	(b)		Lump Sum. In all other circumstances payment shall be made to the Beneficiary in a single lump sum payment during the month of March in the Plan Year following the Plan Year in which the Participant dies.

	(c)		Pending at Death.

	(i)		Participant’s Death. If, at the death of the Participant, any payment to the Participant was due or otherwise pending but not actually paid, the amount of such payment shall be included in the amount to be paid to the Beneficiary (and shall not be paid to the Participant’s estate).

	(ii)		Beneficiary’s Death. If a Beneficiary who is entitled to one or more payments dies before receiving all payments, the remaining

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payments shall be paid to the Beneficiary’s estate as nearly as practicable at the same time as they would have been paid to the Beneficiary.

6.2.5. Installment Amounts. The amount of each annual installment shall be determined by dividing the amount of the Account as of immediately preceding the date the installment is to be paid by the number of remaining installment payments to be made (including the payment being determined). A series of installment payments shall at all times and for all purposes be treated as an entitlement to a single payment.

6.3. Generally Applicable Rules. The rules of this Section 6.3 shall be applicable to all payments from this Plan.

6.3.1. Processing. The Plan Administrator may require that the Participant and each Beneficiary complete various forms and furnish documentation to the Plan Administrator.

6.3.2. Code §162(m) Delay. Notwithstanding the forgoing, payment will be delayed when the Principal Sponsor reasonably anticipates that the Principal Sponsor’s federal income tax deduction with respect to such payment otherwise would be limited or eliminated by application of section 162(m) of the Code. The payment shall thereafter be made at the earliest date at which the Principal Sponsor reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of section 162(m) of the Code.

6.3.3. Six-Month Delay. Notwithstanding the forgoing, no payment shall be made to any Participant who is a specified employee on account of a Separation from Service until at least six (6) months following that Participant’s Separation from Service. On the first business day following the expiration of that six (6) month period, all amounts, if any, that would have been paid during that six (6) months shall be paid to the Participant (adjusted for any interest accruing during that six-month delay) and thereafter all payments shall be made as if there had been no such delay.

	(a)		Specified Employee. This Section 6.3.3 shall only apply to a Participant who is a specified employee (as that term is defined in section 409A of the Code) if the stock of any of the Principal Sponsor or an Affiliate is publicly traded on an established securities market or otherwise.

	(b)		Identification Rules. Specified employees shall be identified (x) on a basis consistent with regulations issued under section 409A, and (y) as required by regulations issued under section 409A, on a basis consistently applied to all plans, programs, contracts, etc. maintained by the Employer that are subject to section 409A. A Participant’s status as a specified employee shall be determined once each December 31 based on the facts existing during the year ending on that date. If a Participant is determined to be a specified employee on that date, the Participant shall be treated as a

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specified employee for the year beginning the following April 1 (and ending on the next succeeding March 31). The six-month delay shall apply to that Participant if that Participant’s Separation from Service occurs during that April 1 to March 31 year.

6.3.4. No Spousal Rights. No spouse or surviving spouse of a Participant and no person designated to be a Beneficiary shall have any rights or interest in the benefits credited under this Plan including, but not limited to, the right to be the sole Beneficiary or to consent to the designation of Beneficiaries (or the changing of designated Beneficiaries) by the Participant. No spouse, former spouse, Beneficiary or other person shall have any right to participate in any Participant’s designation of a time and form of payment.

6.3.5. Facility of Payment. In case of the legal disability, including minority, of an individual entitled to receive any payment under this Plan, payment shall be made, if the Plan Administrator shall be advised of the existence of such condition:

	(a)		to the duly appointed guardian, conservator or other legal representative of such individual, or

	(b)		to a person or institution entrusted with the care or maintenance of the incompetent or disabled Participant or Beneficiary, provided such person or institution has satisfied the Plan Administrator that the payment will be used for the best interest and assist in the care of such individual, and provided further, that no prior claim for said payment has been made by a duly appointed guardian, conservator or other legal representative of such individual.

Any payment made in accordance with the foregoing provisions of this Section shall constitute a complete discharge of any liability or obligation of Plan and the Principal Sponsor therefore.

6.3.6. Payments in Cash. All transactions in all Accounts shall be recorded in U.S. dollars and all payments shall be made in U.S. dollars.

6.3.7. No Other Payment Events. Payment shall not be made and shall not be accelerated upon a change of control. Payment shall not be made and shall not be accelerated by reason of a disability.

6.4. Special Rules.

6.4.1. Unforeseeable Emergency. A Participant who has not incurred a Payment Event but who has incurred an Unforeseeable Emergency may request a payment from such Participant’s Account. In the event that the Plan Administrator, upon written petition of the Participant, determines in its sole discretion that the Participant has suffered an Unforeseeable Emergency, the Plan Administrator shall cause the Principal Sponsor to pay to the Participant as soon as reasonably practicable following such determination, an amount (not in excess of the

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value of the Participant’s Account) necessary to satisfy the emergency. Payment shall be taken from the Participant’s Deferral Account (reduced by the amount of any applicable payroll, withholding and other taxes, if any, withheld therefrom) and shall be treated as a payment of the most recent credits to such Accounts. Immediately upon the payment, such Participant’s class year deferral elections shall be cancelled.

6.4.2. Lump Sum Payment to Pay Taxes. Notwithstanding anything to the contrary in this Section 6, a lump sum shall be paid to the Participant in an amount sufficient (i) to pay any income tax withholding related to the payment of amounts to pay FICA taxes, and (ii) to pay any income taxes due on amounts required to be included in the Participant’s income due to failure to comply with the requirements in section 409A of the Code.

6.5. Designation of Beneficiaries.

6.5.1. Right to Designate. Each Participant may designate, upon forms to be furnished by and filed with the Plan Administrator, one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of such Participant’s Account in the event of such Participant’s death. The Participant may change or revoke any such designation from time to time without notice to or consent from any spouse, Beneficiary or any other person. No such designation, change or revocation shall be effective unless executed by the Participant and received by the Plan Administrator during the Participant’s lifetime. The Plan Administrator may establish rules for the use of electronic signatures.

6.5.2. Failure of Designation. If a Participant:

	(a)		fails to designate a Beneficiary,

	(b)		designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or

	(c)		designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant,

such Participant’s Account, or the part thereof as to which such Participant’s designation fails, as the case may be, shall be payable to the first class of the following classes of automatic Beneficiaries with a member surviving the Participant and (except in the case of surviving issue) in equal shares if there is more than one member in such class surviving the Participant:

Participant’s surviving spouse
Participant’s surviving issue per stirpes and not per capita
Participant’s surviving parents
Participant’s surviving brothers and sisters
Representative of Participant’s estate.

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6.5.3. Disclaimers by Beneficiaries. A Beneficiary entitled to a payment of all or a portion of a deceased Participant’s Account may disclaim an interest therein subject to the following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have received a payment of all or any portion of the Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of the Participant’s death. Any disclaimer must be in writing and must be executed personally by the Beneficiary before a notary public. A disclaimer shall state that the Beneficiary’s entire interest in the unpaid Account is disclaimed or shall specify what portion thereof is disclaimed. To be effective, an original executed copy of the disclaimer must be both executed and actually delivered to the Plan Administrator after the date of the Participant’s death but not later than nine (9) months after the date of the Participant’s death. A disclaimer shall be irrevocable when delivered to the Plan Administrator. A disclaimer shall be considered to be delivered to the Plan Administrator only when actually received by the Plan Administrator. The Plan Administrator shall be the sole judge of the content, interpretation and validity of a purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be considered not to have survived the Participant as to the interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be a transfer of an interest in violation of the provisions of Section 11.16 and shall not be considered to be an assignment or alienation of benefits in violation of federal law prohibiting the assignment or alienation of benefits under this Plan. No other form of attempted disclaimer shall be recognized by the Plan Administrator.

6.5.4. Definitions. When used herein and, unless the Participant has otherwise specified in the Participant’s Beneficiary designation, when used in a Beneficiary designation, the following definitions and rules shall be applied.

(a)

“Issue” means all persons who are lineal descendants of the person whose issue are referred to, subject to the following:

	(i)		a legally adopted child and the adopted child’s lineal descendants always shall be lineal descendants of each adoptive parent (and of each adoptive parent’s lineal ancestors);

	(ii)		a legally adopted child and the adopted child’s lineal descendants never shall be lineal descendants of any former parent whose parental rights were terminated by the adoption (or of that former parent’s lineal ancestors); except that if, after a child’s parent has died, the child is legally adopted by a stepparent who is the spouse of the child’s surviving parent, the child and the child’s lineal descendants shall remain lineal descendants of the deceased parent (and the deceased parent’s lineal ancestors);

	(iii)		if the person (or a lineal descendant of the person) whose issue are referred to is the parent of a child (or is treated as such under applicable law) but never received the child into that parent’s home

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and never openly held out the child as that parent’s child (unless doing so was precluded solely by death), then neither the child nor the child’s lineal descendants shall be issue of the person.

	(b)		“Child” means an issue of the first generation;

	(c)		“Per stirpes” means in equal shares among living children of the person whose issue are referred to and the issue (taken collectively) of each deceased child of such person, with such issue taking by right of representation of such deceased child; and

	(d)		“Survive” and “surviving” mean living after the death of the Participant.

6.5.5. Special Rules. Unless the Participant has otherwise specified in the Participant’s Beneficiary designation, the following rules shall apply:

	(a)		If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.

	(b)		The identification of the Beneficiaries shall become fixed as of the time of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary’s estate.

	(c)		If the Participant designates as a Beneficiary the person who is the Participant’s spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form that is both executed by the Participant and received by the Plan Administrator (i) after the date of the legal termination of the marriage between the Participant and such former spouse and (ii) during the Participant’s lifetime.

	(d)		Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participant’s death.

	(e)		Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.

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	(f)		A Beneficiary designation is permanently void if it either is executed or is filed by a Participant who, at the time of such execution or filing, is then a minor under the law of the state of the Participant’s legal residence.

	(g)		The Plan Administrator shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation.

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SECTION 7

FUNDING OF PLAN

7.1. Hedging Investments. If the Principal Sponsor elects to finance all or a portion of the Principal Sponsor’s obligations in connection with this Plan through the purchase of life insurance or other investments, the Participant agrees, as a condition of participation in this Plan, to cooperate with the Plan Administrator in the purchase of such insurance or investment to any extent reasonably required by the Plan Administrator and relinquishes any claim the Participant or a Beneficiary might have to the proceeds of any such insurance or investment or any other rights or interests in such insurance or investment. If a Participant fails or refuses to cooperate, then notwithstanding any other provision of this Plan the Plan Administrator shall immediately and irrevocably terminate and forfeit the Participant’s entitlement to benefits under this Plan.

7.2. Corporate Obligation. Neither the Compensation Committee, the Plan Administrator nor any of the employees, officers, agents or directors of the Principal Sponsor or the Employers in any way secure or guarantee the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant. Each person entitled or claiming to be entitled at any time to any benefit hereunder shall look solely to the assets of the Participant’s Employer for such payments as an unsecured general creditor. If, or to the extent that, Accounts have been paid to or with respect to a present or former Participant and that payment purports to be the payment of a benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in the other assets of an Employer in connection with this Plan. No person shall be under any liability or responsibility for failure to effect any of the objectives or purposes of this Plan by reason of the insolvency of the Principal Sponsor or the Employers.

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SECTION 8

AMENDMENT AND TERMINATION

8.1. Amendment and Termination.

8.1.1. Before a Change of Control. Prior to the occurrence of a Change of Control, the Principal Sponsor may unilaterally amend the Plan Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and may likewise terminate this Plan both with regard to persons then receiving benefits and persons expecting to receive benefits in the future; provided, however, that:

	(a)		the benefit, if any, payable to or with respect to a Participant who has had a Separation from Service as of the effective date of such amendment or the effective date of such termination shall not be, without the written consent of the Participant, diminished or delayed by such amendment or termination, and

	(b)		the benefit, if any, payable to or with respect to each other Participant determined as if such Participant had a Separation from Service on the effective date of such amendment or the effective date of such termination shall not be, without the written consent of the Participant, diminished or delayed by such amendment or termination.

8.1.2. After a Change of Control.

(a)

Existing Participants. After the occurrence of a Change of Control, the Principal Sponsor may only amend the Plan Statement or terminate this Plan as applied to Participants who are Participants on the date of the Change of Control if:

	(i)		all benefits payable to or with respect to persons who were Participants as of the Change of Control (including benefits earned before and benefits earned after the Change of Control) have been paid in full, or

	(ii)		eighty percent (80%) of all the Participants determined as of the date of the Change of Control give knowing and voluntary written consent to such amendment or termination.

(b)

New Participants. After the occurrence of a Change of Control, as applied to Participants who are not Participants on the date of the Change of Control, the Principal Sponsor may unilaterally amend the Plan

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Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and may likewise terminate this Plan.

8.2. Authority to Amend and to Terminate. Actions to amend or to terminate may be taken:

	(a)		in any respect by action of the Board of Directors (or any duly authorized committee of the Directors), and

	(b)		in any respect that increases or decreases the cost of the Plan by more than Five Million Dollars ($5,000,000) by action of the Executive Plans Committee, and

	(c)		in any respect that increases or decreases the cost of the Plan by Five Million Dollars ($5,000,000) or less by action of the Benefit Plans Committee.

8.3. No Oral Amendments. No modification of the terms of the Plan Statement or termination of this Plan shall be effective unless it is in writing and signed by a person authorized to execute such writing. No written or oral representation concerning the interpretation or effect of the Plan Statement shall be effective to amend the Plan Statement.

8.4. Plan Binding on Successors. The Principal Sponsor undertakes that it will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and assets of the Principal Sponsor), by agreement, to expressly assume and agree to perform this Plan in the same manner and to the same extent that the Principal Sponsor would be required to perform it if no such succession had taken place.

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SECTION 9

DETERMINATIONS — RULES AND REGULATIONS

9.1. Determinations. The Plan Administrator shall make such determinations as may be required from time to time in the administration of this Plan. The Plan Administrator shall have the discretionary authority and responsibility to interpret and construe the Plan Statement and to determine all factual and legal questions under this Plan, including but not limited to the entitlement of Participants and Beneficiaries, and the amounts of their respective interests. Each interested party may act and rely upon all information reported to them hereunder and need not inquire into the accuracy thereof, nor be charged with any notice to the contrary.

9.2. Rules and Regulations. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Plan Administrator.

9.3. Method of Executing Instruments. Information to be supplied or written notices to be made or consents to be given by the Principal Sponsor, the Plan Administrator or any other person pursuant to any provision of the Plan Statement may be signed in the name of the Principal Sponsor, the Plan Administrator or any other person by any officer or other person who has been authorized to make such certification or to give such notices or consents.

9.4. Claims Procedure. Until modified by the Plan Administrator, the claim and review procedures set forth in this Section shall be the mandatory claim and review procedures for the resolution of disputes and disposition of claims filed under the Plan. Any application for a payment shall be considered as a claim for the purposes of this Section.

9.4.1. Initial Claim. An individual may, subject to any applicable deadline, file with the Plan Administrator a written claim for benefits under the Plan in a form and manner prescribed by the Plan Administrator.

	(a)		If the claim is denied in whole or in part, the Plan Administrator shall notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.

	(b)		The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the Plan Administrator determines that special circumstances require an extension of time for determination of the claim, provided that the Plan Administrator notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.

9.4.2. Notice of Initial Adverse Determination. A notice of an adverse determination shall set forth in a manner calculated to be understood by the claimant:

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	(a)		the specific reasons for the adverse determination;

	(b)		references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;

	(c)		a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and

	(d)		a description of the claim and review procedures, including the time limits applicable to such procedure and a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.

9.4.3. Request for Review. Within sixty (60) days after receipt of an initial adverse benefit determination notice, the claimant may file with the Plan Administrator a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within sixty (60) days after receipt of the initial adverse determination notice shall be untimely.

9.4.4. Claim on Review. If the claim, upon review, is denied in whole or in part, the Plan Administrator shall notify the claimant of the adverse benefit determination within sixty (60) days after receipt of such a request for review.

	(a)		The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the Plan Administrator determines that special circumstances require an extension of time for determination of the claim, provided that the Plan Administrator notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.

	(b)		In the event that the time period is extended due to a claimant’s failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.

	(c)		The Plan Administrator’s review of a denied claim shall take into account all comments, documents, records, and other information submitted by the

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claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

9.4.5. Notice of Adverse Determination for Claim on Review. A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant:

	(a)		the specific reasons for the denial;

	(b)		references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;

	(c)		a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits;

	(d)		a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures; and

	(e)		a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.

9.5. Rules and Regulations.

9.5.1. Adoption of Rules. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Plan Administrator. The Plan Administrator may delegate all or some of its functions to another.

9.5.2. Specific Rules.

	(a)		No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the established claim procedures. The Plan Administrator may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Plan Administrator upon request.

	(b)		All decisions on claims and on requests for a review of denied claims shall be made by the Plan Administrator unless delegated, in which case references in this Section 9 to the Plan Administrator shall be treated as references to the Plan Administrator’s delegate. Such delegation may be implied or inferred. If the Plan Administrator does delegate the decision, all references to the Plan Administrator in Section 9 shall be treated as references to the Committee’s delegate.

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	(c)		Claimants may be represented by a lawyer or other representative at their own expense, but the Plan Administrator reserves the right to require the claimant to furnish written authorization and establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. A claimant’s representative shall be entitled to copies of all notices given to the claimant.

	(d)		The decision of the Plan Administrator on a claim and on a request for a review of a denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the Plan Administrator.

	(e)		In connection with the review of a denied claim, the claimant or the claimant’s representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

	(f)		The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.

	(g)		The claims and review procedures shall be administered with appropriate safeguards so that benefit claim determinations are made in accordance with governing plan documents and, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.

	(h)		For the purpose of this Section, a document, record, or other information shall be considered “relevant” if such document, record, or other information: (i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administration processes and safeguards designed to ensure that the benefit claim determination was made in accordance with governing plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants; and (iv) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.

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	(i)		The Plan Administrator may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.

	(j)		The burden of proof in demonstrating any fact essential to the approval of any claim for benefits, including eligibility for any claimed benefit and the extent to which a claimed benefit is covered or payable in accordance with the Plan, shall at all times be the responsibility of the claimant.

9.5.3. Limitations and Exhaustion.

	(a)		No claim shall be considered under these administrative procedures unless it is received by the Plan Administrator within two (2) years after the Participant knew (or reasonably should have known) of the general nature of the dispute giving rise to the claim. Every untimely claim shall be denied by the Plan Administrator without regard to the merits of the claim.

	(b)		No suit may be brought by or on behalf of any Participant or Beneficiary on any matter pertaining to this Plan unless the action is commenced in the proper forum before the earlier of:

	(i)		three (3) years after the Participant knew (or reasonably should have known) of the general nature of the dispute giving rise to the action, or

	(ii)		sixty (60) days after the Participant has exhausted these administrative procedures.

(c)

These administrative procedures are the exclusive means for resolving any dispute arising under this Plan insofar as the dispute pertains to any matter that arose more than one hundred twenty (120) days before a Change of Control. As to such matters:

	(i)		no Participant or Beneficiary shall be permitted to litigate any such matter unless a timely claim has been filed under these administrative procedures and these administrative procedures have been exhausted; and

	(ii)		determinations by the Plan Administrator (including determinations as to whether the claim was timely filed) shall be afforded the maximum deference permitted by law.

(d)

These administrative procedures are not exclusive insofar as they pertain to any matter that arose after the Change of Control or within the one hundred twenty (120) days before the Change of Control. As to such matters:

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	(i)		a Participant shall not be required to exhaust these administrative remedies;

	(ii)		if there is litigation regarding the benefits payable to or with respect to a Participant, notwithstanding Section 9.1, determinations by the Plan Administrator (including determinations regarding when any matter arose) shall not be afforded any deference and the matter shall be heard de novo; and

	(iii)		if a Participant successfully litigates, in whole or in part, any claim for benefits under this Plan, the court shall award reasonable attorney’s fees and costs of the action to the Participant.

	(e)		For the purpose of applying the deadlines to file a claim or a legal action, knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant for the purpose of applying the previously specified periods.

	(f)		All litigation in any way related to the Plan (including but not limited to any and all claims brought under ERISA, such as claims for benefits and claims for breach of fiduciary duty) must be filed in the United States District Court for the District of Minnesota.

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SECTION 10

PLAN ADMINISTRATION

10.1. The Principal Sponsor.

10.1.1. Officers. Except as hereinafter provided, functions generally assigned to the Principal Sponsor and functions generally assigned to the Plan Administrator shall be discharged by its principal human resources officer of the Principal Sponsor unless delegated and allocated as provided herein.

10.1.2. Chief Executive Officer. Except as hereinafter provided, the Chief Executive Officer of the Principal Sponsor may delegate or redelegate and allocate and reallocate to one or more persons or to a committee of persons jointly or severally, and whether or not such persons are directors, officers or directors, such functions assigned to the Principal Sponsor or the Plan Administrator generally hereunder as the Chief Executive Officer may from time to time deem advisable.

10.2. Conflict of Interest. If any individual to whom authority has been delegated or redelegated hereunder shall also be a Participant in this Plan, such Participant shall have no authority with respect to any matter specially affecting such Participant’s individual interest hereunder or the interest of a person superior to him or her in the organization (as distinguished from the interests of all Participants and Beneficiaries or a broad class of Participants and Beneficiaries), all such authority being reserved exclusively to other individuals as the case may be, to the exclusion of such Participant, and such Participant shall act only in such Participant’s individual capacity in connection with any such matter.

10.3. Service of Process. In the absence of any designation to the contrary by the Plan Administrator, the corporate Secretary of the Principal Sponsor is designated as the appropriate and exclusive agent for the receipt of service of process directed to this Plan in any legal proceeding, including arbitration, involving this Plan.

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SECTION 11

CONSTRUCTION

11.1. ERISA Status. This Plan is adopted with the understanding that it is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees as provided in section 201(2), section 301(3) and section 401(a)(1) of ERISA. Each provision shall be interpreted and administered accordingly.

11.2. IRC Status.

	(a)		Income Tax. This Plan is intended to be a nonqualified deferred compensation arrangement. The rules of section 401(a) et. seq. of the Code shall not apply to this Plan.

	(b)		FICA Taxation. The rules of section 3121(v) and section 3306(r)(2) of the Code shall apply to this Plan.

	(c)		409A. The rules of section 409A of the Code shall apply to this Plan to the extent applicable.

	(i)		Three Plan Types. It is expressly intended that for purposes of section 409A of the Code this Plan be considered two account balance plans and one nonaccount balance plan. One consists of amounts deferred at the election of the service provider (i.e., the voluntary deferrals to the Deferral Account). The second consists of amounts deferred other than at the election of the service provider (i.e., the Employer credits to the Deferral Account). The third consists of amounts all amounts credited to and payable from the DB Restoration Account.

	(ii)		Grandfathering. The Principal Sponsor has affirmatively determined that all amounts deferred under WealthOp and WealthOp II that were earned and vested before January 1, 2005, shall not be subject to section 409A of the Code (i.e., will be “grandfathered” under the law as it existed before section 409A of the Code) and this Plan Statement shall be construed and administered accordingly.

(d)

No Guaranty. This Plan Statement shall be construed and administered on a basis consistent with the foregoing. However, neither the Principal Sponsor, Employer or Affiliate nor any of their officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any Participant or any other person for any taxes, penalties, interest or like amounts that may

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be imposed on the Participant or other person on account of any amounts under this Plan or on account of any failure to comply with any section of the Code.

11.3. Effect on Other Plans. This Plan shall not alter, enlarge or diminish any person’s employment rights or obligations or rights or obligations under any other qualified or nonqualified plan without regard to whether it is subject to section 409A of the Code. It is specifically contemplated that such other plans will, from time to time, be amended and terminated. Nothing in this Plan Statement shall be interpreted or relied upon as a basis to amend, modify, accelerate or defer, or otherwise change any credits to or payments that may be due from any other deferred compensation plan subject to section 409A of the Code.

11.4. Disqualification. Notwithstanding any other provision of the Plan Statement or any election or designation made under this Plan, any individual who feloniously and intentionally kills a Participant or Beneficiary shall be deemed for all purposes of this Plan and all elections and designations made under this Plan to have died before such Participant or Beneficiary. A final judgment of conviction of felonious and intentional killing is conclusive for this purpose. In the absence of a conviction of felonious and intentional killing, the Plan Administrator shall determine whether the killing was felonious and intentional for this purpose.

11.5. Rules of Document Construction.

	(a)		Birthdays and Age. An individual shall be considered to have attained a given age on such individual’s birthday for that age (and not on the day before). The anniversary of any event (e.g., a birthday) occurring on February 29 in a leap year shall be considered to have occurred on February 28 in each year that is not a leap year.

	(b)		Plurals and Gender. Whenever appropriate, words used herein in the singular may be read in the plural, or words used herein in the plural may be read in the singular; the masculine may include the feminine; and the words “hereof,” “herein” or “hereunder” or other similar compounds of the word “here” shall mean and refer to the entire Plan Statement and not to any particular paragraph or Section of the Plan Statement unless the context clearly indicates to the contrary.

	(c)		Titles. The titles given to the various Sections of the Plan Statement are inserted for convenience of reference only and are not part of the Plan Statement, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.

	(d)		Nonduplication. Notwithstanding any thing apparently to the contrary contained in the Plan Statement, the Plan Statement shall be construed and administered to preclude the payment of the same benefits under more

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than one provision of this Plan and to preclude the duplication of benefits provided under this Plan and any other qualified or nonqualified plan maintained in whole or in part by the Principal Sponsor.

11.6. References to Laws. Any reference in the Plan Statement to a statute or regulation shall be considered also to mean and refer to any subsequent amendment or replacement of that statute or regulation unless, under the circumstances, it would be inappropriate to do so. The terms “spouse,” “nonspouse,” “married,” “surviving spouse,” and other similar terms shall be construed, interpreted and applied on a basis consistent with the federal statute known as the Defense of Marriage Act.

11.7. Receipt of Documents. If a form or document must be filed with or received by the Plan Administrator or other person (the “appropriate entity”), it must be actually received by the appropriate entity to be effective. The determination of whether or when a form or document has been received by the appropriate entity shall be made by the Plan Administrator on the basis of what documents are acknowledged by the appropriate entity to be in its actual possession without regard to a “mailbox rule” or similar rule of evidence. The absence of a document in the appropriate entity’s records and files shall be conclusive and binding proof that the document was not received by the appropriate entity.

11.8. Effect on Employment Status. Neither the terms of the Plan Statement nor the benefits under this Plan nor the continuance thereof shall be a term of the employment of any employee. The Employers shall not be obliged to continue this Plan. The terms of this Plan shall not give any employee the right to be retained in the employment of any Employer. This Plan is not and shall not be deemed to constitute a contract of employment between any Employer and any employee or other person, nor shall anything herein contained be deemed to give any employee or other person any right to be retained in any Employer’s employ or in any way limit or restrict any Employer’s right or power to discharge any employee or other person at any time and to treat him without regard to the effect which such treatment might have upon him as a Participant in this Plan.

11.9. Choice of Law. Except to the extent that federal law preempts state law, this Plan Statement be construed and enforced in accordance with the laws of the State of Minnesota (without regard to conflict of laws principles).

11.10. ERISA Administrator. The Principal Sponsor shall be the plan administrator of this Plan for the purposes of ERISA.

11.11. Delegation. No person shall be liable for an act or omission of another person with regard to a responsibility that has been allocated to or delegated to such other person pursuant to the terms of the Plan Statement or pursuant to procedures set forth in the Plan Statement. Whenever any authority, function or responsibility is delegated from one person to another, the discretion possessed by the person making the delegation shall be fully assigned to the person receiving the delegation unless a contrary intention is clearly expressed in the delegation.

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11.12. Tax Withholding. The Employers (or any other person legally obligated to do so) shall withhold the amount of any federal, state or local income tax, payroll tax or other tax required to be withheld under applicable law with respect to any amount payable under this Plan. All benefits otherwise due hereunder shall be reduced by the amount to be withheld.

11.13. Expenses. All expenses of administering the benefits due under this Plan shall be borne by the Employers. The Accounts of Participants shall not be charged for those expenses.

11.14. Service of Process. In the absence of any designation to the contrary by the Plan Administrator, the Secretary of the Principal Sponsor is designated as the appropriate and exclusive agent for the receipt of service of process directed to this Plan in any legal proceeding, including arbitration, involving this Plan.

11.15. Spendthrift Provision. No Participant or Beneficiary shall have any interest in any Account which can be transferred nor shall any Participant or Beneficiary have any power to anticipate, alienate, dispose of, pledge or encumber the same while in the possession or control of the Employers. The Plan Administrator shall not recognize any such effort to convey any interest under this Plan. No benefit payable under this Plan shall be subject to attachment, garnishment, execution following judgment or other legal process before actual payment to such person.

The power to designate Beneficiaries to receive the Account of a Participant in the event of such Participant’s death shall not permit or be construed to permit such power or right to be exercised by the Participant so as thereby to anticipate, pledge, mortgage or encumber such Participant’s Account or any part thereof, and any attempt of a Participant so to exercise said power in violation of this provision shall be of no force and effect and shall be disregarded by the Employers.

This Section shall not prevent the Plan Administrator from exercising, in its discretion, any of the applicable powers and options granted to it upon the occurrence of an Separation From Service, as such powers may be conferred upon it by any applicable provision hereof.

11.16. Certifications. Information to be supplied or written notices to be made or consents to be given by the Plan Administrator pursuant to any provision of this Plan may be signed in the name of the Plan Administrator by any officer who has been authorized to make such certification or to give such notices or consents.

11.17. Errors in Computations. Participants shall be obligated to furnish such information (including but not limited to current mailing addresses, social security numbers, marital status, dates of birth and the like) as the Plan Administrator may from time to time require for the effective and efficient administration of this Plan. The Plan Administrator shall not be liable or responsible for any error in the computation of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any survivor to whom such benefit shall be payable, directly or indirectly, to the Plan

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Administrator, and used by the Plan Administrator in determining the benefit. The Plan Administrator shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth and the Plan Administrator may recover any prior overpayment and pursue all other remedies that may be available.


, 2008	SUPERVALU INC.

	By


		Its

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EX-10.2 4 c48042exv10w2.htm EX-10.2 EX-10.2

Exhibit 10.2

SUPERVALU INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
(2009 Restatement)

Adopted December 3, 2008
But Effective January 1, 2009

SUPERVALU INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
(2009 Restatement)

TABLE OF CONTENTS


	Page
SECTION 1. INTRODUCTION AND DEFINITIONS		1

1.1. New Plan Established
1.1.1. Antecedents
1.1.2. Merger, Continuation and Restatement
1.2. Unfunded Obligation
1.3. Definitions
1.3.1. Accounts
(a) Deferred Cash Account
(b) Deferred Stock Account
1.3.2. Affiliate
1.3.3. Annual Fees
1.3.4. Beneficiary
1.3.5. Board of Directors
1.3.6. Change of Control
1.3.7. Code
1.3.8. Common Stock
1.3.9. Company
1.3.10. Deferred Stock Retainer
1.3.11. Director Affairs Committee
1.3.12. Enrollment Window
1.3.13. Fair Market Value
1.3.14. Interest Crediting Rate
1.3.15. Participant
1.3.16. Plan
1.3.17. Plan Administrator
1.3.18. Plan Statement
1.3.19. Separation from Service
1.4. Prior Rules

SECTION 2. PARTICIPATION		7

SECTION 3. PARTICIPANT ELECTIONS		8

3.1. Class Year Elections

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	Page
3.1.1. Class Year Deferral Elections
3.1.2. Class Year Payment Elections
3.1.3. General Conditions
3.2. Election Upon Initial Participation
3.3. Subsequent Changes in Payment Elections

SECTION 4. ACCOUNTS		10

4.1. Crediting to Accounts
4.1.1. Deferred Cash Account
4.1.2. Deferred Stock Accounts
4.2. Other Adjustments
4.2.1. Taxes
4.2.2. Payments
4.3. Multiple Sub-Accounts
4.4. Maximum Number of Shares
4.4.1. Limitation
4.4.2. Recapitalization

SECTION 5. VESTING		13

5.1. Vesting
5.2. Forfeiture for Early Termination

SECTION 6. PAYMENTS		14

6.1. Separation from Service Payments
6.1.1. Form of Payment
6.1.2. Time of Payment
6.1.3. Default
6.2. Payment Upon Death
6.2.1. Continued Installments
6.2.2. Lump Sum
6.2.3. Pending at Death
6.3. Installment Amounts
6.4. Generally Applicable Rules
6.4.1. Processing
6.4.2. Code §162(m) Delay
6.4.3. Six-Month Delay
6.4.4. No Spousal Rights
6.4.5. Facility of Payment
6.4.6. Payments in Cash and in Common Stock
6.4.7. No Other Payment Events
6.5. Designation of Beneficiaries
6.5.1. Right to Designate

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	Page
6.5.2. Failure of Designation
6.5.3. Disclaimers by Beneficiaries
6.5.4. Definitions
6.5.5. Special Rules

SECTION 7. FUNDING OF PLAN		21

7.1. Hedging Investments
7.2. Corporate Obligation

SECTION 8. AMENDMENT AND TERMINATION		22

8.1. Amendment and Termination
8.1.1. Before a Change of Control
8.1.2. After a Change of Control
8.2. No Oral Amendments
8.3. Plan Binding on Successors

SECTION 9. DETERMINATIONS — RULES AND REGULATIONS		24

9.1. Determinations
9.2. Rules and Regulations
9.3. Method of Executing Instruments
9.4. Claims Procedure
9.4.1. Initial Claim
9.4.2. Notice of Initial Adverse Determinations
9.4.3. Request for Review
9.4.4. Claim on Review
9.4.5. Notice of Adverse Determination for Claim on Review
9.5. Rules and Regulations
9.5.1. Adoption of Rules
9.5.2. Special Rules
9.5.3. Limitations and Exhaustion

SECTION 10. PLAN ADMINISTRATION		30

10.1. The Company
10.1.1. Officers
10.1.2. Chief Executive Officer
10.1.3. Board of Directors
10.2. Conflict of Interest

SECTION 11. CONSTRUCTION		31

11.1. ERISA Status
11.2. IRC Status

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	Page
11.3. Effect on Other Plans
11.4. Disqualification
11.5. Rules of Document Construction
11.6. References to Laws
11.7. Receipt of Documents
11.8. Effect on Director Status
11.9. Choice of Law
11.10. Delegation
11.11. Tax Withholding
11.12. Expenses
11.13. Service of Process
11.14. Spendthrift Provision
11.15. Certifications
11.16. Errors in Computations

APPENDIX A — THE “DEFERRED CASH PLAN”		A-1

APPENDIX B — THE “DEFERRED STOCK PLAN”		B-1

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SUPERVALU INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN
(2009 Restatement)

SECTION 1

INTRODUCTION AND DEFINITIONS

1.1. New Plan Established.

1.1.1. Antecedents. Effective June 27, 1996, the Company created the “SUPERVALU INC. DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS” (the “Deferred Cash Plan”) as a nonqualified, unfunded, elective deferred compensation plan for the purpose of allowing eligible non employee directors of the Company to defer the receipt of a portion of the remuneration which would otherwise have been paid to them into unfunded, interest bearing, accounts for payment to them in cash after they ceased performing services as a director. The Company also heretofore created the “SUPERVALU INC. NON-EMPLOYEE DIRECTORS DEFERRED STOCK PLAN” (the “Deferred Stock Plan”) as a nonqualified, unfunded, deferred compensation plan for the purposes of (i) allowing the Company to make conditional awards of notional Common Stock to eligible non employee directors of the Company for payment to them in cash or in kind after they ceased to perform services as directors, and (ii) allowing eligible non employee directors of the Company to elect to defer the receipt of a portion of the remuneration which would otherwise have been paid to them into notional Common Stock for payment to them in cash or in kind after they ceased performing services as a director. Each has been amended from time to time in various respects

1.1.2. Merger, Continuation and Restatement. Effective as of December 31, 2008, the Deferred Cash Plan is merged with and into the Deferred Stock Plan. Effective as of January 1, 2009, the resulting Plan is amended and restated in this document. This Plan is continued for the purpose of (i) allowing eligible non-employee directors of the Company to elect to defer the receipt of a portion of the remuneration which would otherwise have been paid to them for their services as directors into unfunded, interest bearing, notional accounts for payment to them in cash after they cease performing services as a director, and (ii) allowing eligible non-employee directors of the Company to elect to defer the receipt of a portion of the remuneration which would otherwise have been paid to them for their services as directors into unfunded, notional Common Stock for payment to them in Common Stock after they cease performing services as a director, and (iii) allowing the Company to make conditional awards of unfunded, notional Common Stock to eligible non-employee directors of the Company as compensation for their services as directors for payment to them in Common Stock after they cease performing services as directors.

(a)

Grandfathered Amounts. All amounts that were deferred under Deferred Cash Plan and the Deferred Stock Plan with respect to periods before January 1, 2005, that have not been previously paid shall be held

			and paid in accordance with the terms of the Appendix A and Appendix B to this Plan Statement (and not pursuant to Sections 2 through 7 of this Plan Statement). It is the Company’s express intention that, all such amounts deferred and held under the Appendix A and Appendix B are “grandfathered” and, therefore, not subject to the requirements of section 409A of the Code.

	(b)		Non Grandfathered Amounts. All amounts that were deferred under Deferred Cash Plan and the Deferred Stock Plan with respect to periods after December 31, 2004, that have not been previously paid shall be held and paid in accordance with the terms of this Plan (excluding the Appendix A and Appendix B to this Plan Statement) and in conformity with section 409A of the Code.

1.2. Unfunded Obligation. The obligation of the Company to make payments under this Plan constitutes only the unsecured (but legally enforceable) promise of the Company to make such payments. No Participant shall have any lien, prior claim or other security interest in any property of the Company. The Company shall have no obligation to establish or maintain any fund, trust or account (other than a bookkeeping account or reserve) for the purpose of funding or paying the benefits promised under this Plan. If such a fund, trust or account is established, the property therein shall remain the sole and exclusive property of the Company. The Company shall be obligated to pay the benefits of this Plan out of its general assets.

1.3. Definitions. When the following terms are used herein with initial capital letters, they shall have the following meanings:

1.3.1. Accounts — the separate bookkeeping accounts representing the separate unfunded and unsecured general obligation of the Company established with respect to each Participant and to which is credited the amounts specified in Section 4, which shall vest or be forfeited as provided in Section 5 and from which payments will be made pursuant to Section 6. The following Accounts will be maintained under this Plan for Participants.

	(a)		Deferred Cash Account — the Account maintained for each Participant (in U.S. dollars) to which are credited the deferrals, if any, made at the election of each Participant pursuant to Section 3.1.1 or pursuant to comparable provisions of prior plan documents and designated for notional investment in interest bearing investments, together with increase thereon.

	(b)		Deferred Stock Account — the Account maintained for each Participant (in shares or share equivalents) to which are credited

(i)

the deferrals, if any, made at the election of each Participant pursuant to Section 3.1.1 or pursuant to comparable provisions of

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			prior plan documents and designated for notional investment in Common Stock, together with increase or decrease thereon, and

	(ii)		the Deferred Stock Retainer awards made by the Company pursuant to Section 4.1.2(b) or pursuant to comparable provisions of prior plan documents and designated for notional investment in Common Stock, together with increase or decrease thereon.

1.3.2. Affiliate — a business entity which is affiliated in ownership with the Company that treated as a single employer under the rules of section 414(b) and (c) of the Code (applying an eighty percent common ownership standard).

1.3.3. Annual Fees — the annual cash retainer, meeting fees and all other cash compensation and remuneration (by whatever name called) payable to a Participant for his or her services as a member of the Board of Directors (excluding, however, stock option grants or amounts paid from this Plan or predecessors of this Plan). For the purposes of this Plan, Annual Fees shall be attributed to the period in which they are earned (that is, the period in which the services are performed that result in the Annual Fees) and not to the period in which they are paid.

1.3.5. Board of Directors — the board of directors of the Company.

1.3.6. Change of Control — any of the following events:

(a)

the acquisition by any individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisition shall not constitute a Change of Control; (i) any acquisition directly from the Company (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any

-3-

			acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof, or

	(b)		individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, than any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or

	(c)		approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the

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			execution of the initial agreement, or of the action of the Board of Directors, providing for such Business combination; or

	(d)		approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

1.3.7. Code — the Internal Revenue Code of 1986, as amended (including, when the context requires, all regulations, interpretations and rulings issued thereunder).

1.3.8. Common Stock — the Company’s common stock, par value $1.00 per share.

1.3.9. Company — SUPERVALU INC., a Delaware corporation, or any successor thereto.

1.3.10. Deferred Stock Retainer — the annual award of compensatory shares granted to members of the Board of Directors and automatically deferred into this Plan (or comparable prior plans) as provided in Section 4.1.2(b).

1.3.11. Director Affairs Committee — the Director Affairs Committee of the Board of Directors including any successor to such Director Affairs Committee by whatever name known.

1.3.12. Enrollment Window — a period designated from time to time by the Plan Administrator during which class year deferral elections and class year payment elections can be received with respect to services performed in the subsequent calendar year.

1.3.13. Fair Market Value — the closing sale price per share of Common Stock as reported on the consolidated tape of the New York Stock Exchange on the relevant date or, if the New York Stock Exchange is closed on such day, then the day closest to such date on which it was open.

1.3.14. Interest Crediting Rate — a rate, determined once for each calendar year, 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 as determined by the Plan Administrator. Notwithstanding the foregoing, through December 31, 2008, the Interest Crediting Rate and the rules for crediting interest on amounts deferred under the Deferred Cash Plan during the years 2005, 2006, 2007 and 2008 and transferred to this Plan pursuant to Section 1.1.2(b) shall be the rate in effect under the rules and procedures of the Deferred Cash Plan.

1.3.15. Participant — a non-employee director who becomes a Participant in this Plan in accordance with the provisions of Section 2. An individual who has become a Participant shall be considered to continue as a Participant in this Plan until the earlier of (i) the date the Participant no longer has any Account (that is, the Participant has received a payment of

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all of the Participant’s Accounts and/or all Accounts have been forfeited as hereinafter provided), or (ii) the date of the Participant’s death.

1.3.16. Plan — the nonqualified, deferred compensation program maintained by Company established for the benefit of Participants eligible to participate therein, as set forth in the Plan Statement. (As used herein, “Plan” does not refer to the document pursuant to which this Plan is maintained. That document is referred to herein as the “Plan Statement”). The Plan shall be referred to as the “SUPERVALU INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS.”

1.3.17. Plan Administrator — the Company or, when affirmatively designated by the Director Affairs Committee, some other person or committee.

1.3.18. Plan Statement — this document entitled “SUPERVALU INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS (2009 Restatement)” as adopted by the Board of Directors of the Company effective as of January 1, 2009, as the same may be amended from time to time thereafter.

1.3.19. Separation from Service — a complete severance of a Participant’s relationship as a director of the Company and all Affiliates, if any, and as an independent contractor of the Company and all Affiliates, if any, for any reason other than death. A Participant may have a Separation from Service upon resignation as a director even if the Participant then becomes an employee. Separation from Service shall be construed to have a meaning consistent with the term “separation from service” as used and defined in section 409A of the Code.

1.4. Prior Rules. Although this Plan Statement governs amounts deferred after 2004, it is recognized that this Plan Statement is being adopted in late 2008 and effective as of January 1, 2009, and that much relevant guidance under section 409A of the Code was not published until April 2007. It is therefore acknowledged and recognized that as a matter of practical necessity, many of the good faith and reasonable rules and practices that were effectively in place after 2004 and before this Plan Statement is adopted are not precisely those reflected in this Plan Statement but were a good faith interpretations of section 409A of the Code and the limited guidance published under section 409A of the Code. It is not the intent of the Company in adopting this Plan Statement that those rules and practices be questioned or that the Plan Administrator be obligated to retroactively conform them to this Plan Statement absent some conclusion that doing so is required as a matter of compliance with section 409A of the Code or other law. The rules in this Plan Statement are intended to be effective only as of January 1, 2009.

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SECTION 2

PARTICIPATION

An individual shall become a Participant in this Plan on the first day on which the individual is a member of the Board of Directors and is not at the same time an employee of the Company or any Affiliate. However, if the individual has previously been a participant in any other nonqualified deferred compensation plan sponsored by the Company or any Affiliate for the benefit of members of the Board of Directors, the individual shall become a Participant in this Plan on next succeeding January 1 on which the individual is a member of the Board of Directors and is not at the same time an employee of the Company or any Affiliate.

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SECTION 3

PARTICIPANT ELECTIONS

3.1.1. Class Year Deferral Elections. Each person who is or may become a Participant for a calendar year may make a class year deferral election during the Enrollment Window preceding that calendar year.

	(a)		Amount. The Participant may elect to defer the receipt of all or a portion of the Participant’s Annual Fees attributable to services performed during that calendar year. All amounts deferred shall be credited as provided in Section 4.1.

	(b)		Notional Investment. The class year deferral election shall irrevocably designate the portion to be credited to the Deferred Cash Account and the portion to be credited to the Deferred Stock Account.

	(c)		Default. If for any reason (including reasons beyond the control of the Participant) a Participant does not clearly and timely make a class year deferral election to defer Annual Fees, the Participant shall be deemed to have elected not to defer any portion of the Annual Fees.

3.1.2. Class Year Payment Elections. Each person who is or may become a Participant for a calendar year may make a class year payment election during the Enrollment Window for that calendar year to be effective with respect to amounts attributable to that calendar year. Each class year payment election shall designate the time and a form for the payment on a basis that is consistent with Section 6.1.

3.1.3. General Conditions. A class year deferral election and a class year payment election shall be effective only if actually received by the Plan Administrator during the Enrollment Window and may be modified at any time and any number of times during the Enrollment Window. Except as expressly provided below, the last such class year deferral election and class year payment election actually received during the Enrollment Window shall be irrevocable as of the end of the Enrollment Window. The class year deferral election and class year payment election shall contain such information as the Plan Administrator may require. The class year deferral election and class year payment election, if any, shall be made in writing upon forms furnished by the Plan Administrator and shall conform to such other procedural and substantive rules consistent with the foregoing as the Plan Administrator shall establish. Class year deferral elections and class year payment elections may be made electronically if and to the extent the Plan Administrator determines from time to time.

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3.2. Election Upon Initial Participation. Notwithstanding the foregoing, in accordance with rules that are both consistent with the principles in Section 3.1 and the requirements of section 409A of the Code, the Plan Administrator may permit persons who are about to become Participants for the first time (and have never before been a participant in this Plan or any similar plan for directors) to make a class year deferral election and class year payment election, or both, at times other than during an Enrollment Window. The Plan Administrator’s rules shall require at least the following.

	(a)		This initial election must be received before the date that an individual first becomes a Participant.

	(b)		This initial election shall be effective for the remainder of the calendar year that includes the date the election is made.

	(c)		The initial election shall be irrevocable as of the earlier of (i) the date it is accepted by the Plan Administrator, or (ii) the last day before the date the individual becomes a Participant.

3.3. Subsequent Changes in Payment Elections. Notwithstanding the foregoing, after the close of the Election Window for a calendar year, a Participant shall be permitted to change a class year payment election that was affirmatively made or made by default for that calendar year if such election change is made in the manner prescribed by the Plan Administrator and if the following conditions are satisfied.

	(a)		The change in class year payment election shall not take effect until the date that is twelve (12) months after the date on which the Plan Administrator receives the change.

	(b)		If the Participant changes the form of payment (e.g., from a lump sum to installments or from a series of installments to a longer or a shorter series of installments), any payment that is made or commenced on account of a Separation from Service or at a specified date, shall be delayed until the date that is five (5) years after the date the payment would otherwise have been made or commenced.

	(c)		If the Participant changes a specified date of payment, the election change (i) must be received by the Plan Administrator at least twelve (12) months before the date previously specified by the Participant, and (ii) the new specified date shall be at least five (5) years after the date previously specified.

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SECTION 4

ACCOUNTS

4.1. Crediting to Accounts.

	4.1.1.		Deferred Cash Account.

	(a)		Voluntary Deferrals. The Plan Administrator shall credit to the Deferred Cash Account of each Participant, the dollars, if any, of Annual Fees the Participant elected to defer into the Deferred Cash Account pursuant to Section 3.1.1. Such amount shall be credited as nearly as practicable as of the time or times when the Annual Fees would have been paid to the Participant but for the election to defer.

	(b)		Interest Credit. In addition, the Deferred Cash Account shall be credited with interest in accordance with rules established by the Plan Administrator at the Interest Crediting Rate for that calendar year.

	4.1.2.		Deferred Stock Accounts.

	(a)		Voluntary Deferrals. The Plan Administrator shall credit to the Deferred Stock Account of each Participant who is a director of the Company, as a number of shares, the number that is equal to

	(i)		one hundred ten percent (110%), multiplied by

	(ii)		the dollars, if any, of Annual Fees the Participant elected to defer into the Deferred Stock Account pursuant to Section 3.1.1, divided by

	(iii)		the Fair Market Value.

			Such number of shares shall be determined and shall be credited as of the time or times when the Annual Fees would have been paid to the Participant but for the election to defer.

	(b)		Deferred Stock Retainer. Once each calendar year, as of July 1 in that year, the Plan Administrator shall credit a Deferred Stock Retainer to the Deferred Stock Account of each Participant who is then a director of the Company, as a number of shares, the number that is equal to

(i)

Such dollar amount as the Board of Directors may from time to time fix for this purpose, divided by

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(ii)

Fair Market Value.

	(c)		Dividend Equivalents. In addition, as of the date that any dividends are paid on Common Stock, there shall be credited to the Deferred Stock Account, as a number of shares, the number that is equal to (i) the number of shares held in that Deferred Stock Account on the dividend record date, multiplied by (ii) the dividend per share that is paid, divided by (iii) Fair Market Value.

	(d)		Source of Shares. The shares to be credited may be authorized but unissued shares, treasury shares or shares acquired in the open market.

4.2. Other Adjustments.

4.2.1. Taxes. The amount to be credited to each Account and the value of each Account shall be reduced by the amount of federal, state and local income tax and the amount of other taxes that are withheld or paid with respect to such credits and Account, if any.

4.3. Multiple Sub-Accounts. To the extent the Plan Administrator determines that it is necessary or useful to the administration of this Plan, the Plan Administrator may cause multiple Deferred Cash Accounts and Deferred Stock Accounts to be established for each Participant. To the extent the Plan Administrator determines that it is necessary or useful to the administration of Accounts under this Plan, the Plan Administrator shall adopt such other rules and policies supplemental to and consistent with the express terms of this Plan Statement as it believes appropriate.

4.4. Maximum Number of Shares.

4.4.1. Limitation. Subject to adjustment as provided below, the maximum number of shares of Common Stock that may be credited under this Plan (including those credited under the “Supervalu Inc. Non-Employee Directors deferred Stock Plan” before it was merged with and into this Plan), is five hundred thousand (500,000) shares. To the extent that limitation would be exceeded, (i) the Annual Fees the Participant elected to defer into the Deferred Stock Account pursuant to Section 3.1.1 shall instead be deferred into the Deferred Cash Account and (ii) the awards under Section 4.1.2(b) shall not be made.

4.4.2. Recapitalization. If the Company shall at any time increase or decrease the number of its outstanding shares of Common Stock or change in any way the rights and privileges of such shares by means of the payment of a stock dividend or any other payment upon such shares payable in Common Stock, or through a stock split, subdivision, consolidation, combination, reclassification, or recapitalization involving the Common Stock, then the numbers,

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rights, and privileges of the shares credited under the Plan shall be increased, decreased, or changed in like manner as if such shares had been issued and outstanding, fully paid, and nonassessable at the time of such occurrence.

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SECTION 5

VESTING

5.1. Vesting. Except as elsewhere specifically provided, the Deferred Cash Account and the Deferred Stock Account of each Participant shall be fully (100%) vested and nonforfeitable at all times.

5.2. Forfeiture for Early Termination. If, after receiving a Deferred Stock Retainer credit to the Deferred Stock Account pursuant to Section 4.1.2(b), the Participant shall cease to serve on the Board of Directors prior to the Company’s next annual meeting for any reason other than death or permanent disability, then such Participant’s Deferred Stock Account shall be reduced by the sum of (i) that number of shares which is equal to one-twelfth (1/12^th) of the shares awarded as of the prior July 1 for each full calendar month during which the Participant did not serve as a director of the Company after that July 1 and before the next annual meeting, and (ii) any dividends credited on that number of shares specified in (i) above during the period that the Participant did not serve as a director of the Company.

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SECTION 6

PAYMENTS

6.1. Separation from Service Payments. Upon the occurrence of a Separation from Service effective as to a Participant, the Plan Administrator shall cause the Company to make or commence payment such Participant’s Deferred Cash Account and Deferred Stock Account (reduced by the amount of any applicable payroll, withholding and other taxes, if any) at the time and in the form designated by the Participant in a class year payment election or subsequent payment election as the case may be. The Plan Administrator may require that the Participant complete various forms and furnish documentation to the Plan Administrator.

6.1.1. Form of Payment. In each class year payment election, a Participant may designate that payment of all amounts attributable to the calendar year for which it is made shall be paid to the Participant, if then living, in one of the following forms.

	(a)		Lump Sum. Payment may be made in a single lump sum.

	(b)		Installments. Payment may be made in fifteen (15) or fewer annual installments.

6.1.2. Time of Payment. In each class year payment election, a Participant may designate that payment shall be made (i.e., lump sum) or commenced (i.e., installments) to the Participant, if then living, under one of the following rules.

	(a)		Specified Date. If the Participant’s class year payment election designates that payment is to be made or commenced on a specified date, payment shall be made or commenced during the month of January specified by the Participant in the class year payment election.

	(b)		Separation from Service. If the Participant’s class year payment election designates that payment is to be made on account of Separation from Service, payment shall be made or commenced during the month of January in the calendar year following the calendar year in which the Participant’s Separation from Service occurs.

6.1.3. Default. If for any reason (including reasons beyond the control of the Participant) the class year payment election is not clearly and timely made to the contrary, it shall be deemed to have been an election that payment be made in a single lump sum during the month of January in the calendar year following the calendar year in which the Participant’s Separation from Service occurs.

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6.2. Payment Upon Death. If any payment is due under this Plan after the death of the Participant, it shall be paid to the Participant’s Beneficiary (and not to the Participant’s estate or any other person) as follows.

6.2.1. Continued Installments. If payment had commenced to the deceased Participant before his or her death in annual installments as specified above (i.e., the Participant had received at least one installment payment), payment to the Beneficiary shall be made in a series of annual installments payable over the remainder of the period.

6.2.2. Lump Sum. In all other circumstances payment shall be made to the Beneficiary in a single lump sum payment during the month of January in the calendar year following the calendar year in which the Participant dies.

6.2.3. Pending at Death.

	(a)		Participant’s Death. If, at the death of the Participant, any payment to the Participant was due or otherwise pending but not actually paid, the amount of such payment shall be included in the amount to be paid to the Beneficiary (and shall not be paid to the Participant’s estate).

	(b)		Beneficiary’s Death. If a Beneficiary who is entitled to one or more payments dies before receiving all payments, the remaining payments shall be paid to the Beneficiary’s estate as nearly as practicable at the same time as they would have been paid to the Beneficiary.

6.3. Installment Amounts. The amount of each annual installment shall be determined by dividing the amount of the Account as of immediately preceding the date the installment is to be paid by the number of remaining installment payments to be made (including the payment being determined). A series of installment payments shall at all times and for all purposes be treated as an entitlement to a single payment.

6.4. Generally Applicable Rules. The rules of this Section 6.4 shall be applicable to all payments from this Plan.

6.4.1. Processing. The Plan Administrator may require that the Participant and each Beneficiary complete various forms and furnish documentation to the Plan Administrator. A failure to timely complete satisfy these requirements shall result in a forfeiture of payments that would have been due if the requirements had been satisfied in a timely manner.

6.4.2. Code §162(m) Delay. Notwithstanding the forgoing, payment will be delayed when the Company reasonably anticipates that the Company’s federal income tax deduction with respect to such payment otherwise would be limited or eliminated by application of section 162(m) of the Code. The payment shall thereafter be made at the earliest date at which the Company reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of section 162(m) of the Code.

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6.4.3. Six-Month Delay. Notwithstanding the forgoing, no payment shall be made to any Participant who is a specified employee on account of a Separation from Service until at least six (6) months following that Participant’s Separation from Service. On the first business day following the expiration of that six (6) month period, all amounts, if any, that would have been paid during that six (6) months shall be paid to the Participant (adjusted for any interest accruing during that six-month delay) and thereafter all payments shall be made as if there had been no such delay.

	(a)		Specified Employee. This Section 6.4.3 shall only apply to a Participant who is who is a specified employee (as that term is defined in section 409A of the Code) if the stock of any of the Company or an Affiliate is publicly traded on an established securities market or otherwise.

	(b)		Identification Rules. Specified employees shall be identified (x) on a basis consistent with regulations issued under section 409A, and (y) as required by regulations issued under section 409A, on a basis consistently applied to all plans, programs, contracts, etc. maintained by the Employer that are subject to section 409A. A Participant’s status as a specified employee shall be determined once each December 31 based on the facts existing during the year ending on that date. If a Participant is determined to be a specified employee on that date, the Participant shall be treated as a specified employee for the year beginning the following April 1 (and ending on the next succeeding March 31). The six month delay shall apply to that Participant if that Participant’s Separation from Service occurs during that April 1 to March 31 year.

6.4.4. No Spousal Rights. No spouse or surviving spouse of a Participant and no person designated to be a Beneficiary shall have any rights or interest in the benefits credited under this Plan including, but not limited to, the right to be the sole Beneficiary or to consent to the designation of Beneficiaries (or the changing of designated Beneficiaries) by the Participant. No spouse, former spouse, Beneficiary or other person shall have any right to participate in any Participant’s designation of a time and form of payment.

6.4.5. Facility of Payment. In case of the legal disability, including minority, of an individual entitled to receive any payment under this Plan, payment shall be made, if the Plan Administrator shall be advised of the existence of such condition:

	(a)		to the duly appointed guardian, conservator or other legal representative of such individual, or

	(b)		to a person or institution entrusted with the care or maintenance of the incompetent or disabled Participant or Beneficiary, provided such person or institution has satisfied the Plan Administrator that the payment will be

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used for the best interest and assist in the care of such individual, and provided further, that no prior claim for said payment has been made by a duly appointed guardian, conservator or other legal representative of such individual.

Any payment made in accordance with the foregoing provisions of this Section shall constitute a complete discharge of any liability or obligation of Plan and the Company therefore.

6.4.6. Payments in Cash and in Common Stock. All transactions in the Deferred Cash Account shall be recorded in U.S. dollars and all payments shall be made in U.S. dollars. Transactions in the Deferred Stock Account shall be recorded in U.S. dollars (and U.S. dollars in lieu of fractions shares) and all payments from the Deferred Stock Account shall be made in shares of Common Stock (and U.S. dollars in lieu of any fractional shares).

6.4.7. No Other Payment Events. Payment shall not be made or accelerated upon of change of control, unforeseeable emergency or disability. Payment shall not be made at a specified date or dates.

6.5. Designation of Beneficiaries.

6.5.2. Failure of Designation. If a Participant:

	(a)		fails to designate a Beneficiary,

	(b)		designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or

	(c)		designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant,

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6.5.3. Disclaimers by Beneficiaries. A Beneficiary entitled to a payment of all or a portion of a deceased Participant’s Account may disclaim an interest therein subject to the following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have received a payment of all or any portion of the Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of the Participant’s death. Any disclaimer must be in writing and must be executed personally by the Beneficiary before a notary public. A disclaimer shall state that the Beneficiary’s entire interest in the undistributed Account is disclaimed or shall specify what portion thereof is disclaimed. To be effective, an original executed copy of the disclaimer must be both executed and actually delivered to the Plan Administrator after the date of the Participant’s death but not later than nine (9) months after the date of the Participant’s death. A disclaimer shall be irrevocable when delivered to the Plan Administrator. A disclaimer shall be considered to be delivered to the Plan Administrator only when actually received by the Plan Administrator. The Plan Administrator shall be the sole judge of the content, interpretation and validity of a purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be considered not to have survived the Participant as to the interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be a transfer of an interest in violation of the provisions of Section 10.15 and shall not be considered to be an assignment or alienation of benefits in violation of federal law prohibiting the assignment or alienation of benefits under this Plan. No other form of attempted disclaimer shall be recognized by the Plan Administrator.

(a)

“Issue” means all persons who are lineal descendants of the person whose issue are referred to, subject to the following:

	(i)		a legally adopted child and the adopted child’s lineal descendants always shall be lineal descendants of each adoptive parent (and of each adoptive parent’s lineal ancestors);

	(ii)		a legally adopted child and the adopted child’s lineal descendants never shall be lineal descendants of any former parent whose parental rights were terminated by the adoption (or of that former parent’s lineal ancestors); except that if, after a child’s parent has died, the child is legally adopted by a stepparent who is the spouse of the child’s surviving parent, the child and the child’s lineal

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			descendants shall remain lineal descendants of the deceased parent (and the deceased parent’s lineal ancestors);

	(iii)		if the person (or a lineal descendant of the person) whose issue are referred to is the parent of a child (or is treated as such under applicable law) but never received the child into that parent’s home and never openly held out the child as that parent’s child (unless doing so was precluded solely by death), then neither the child nor the child’s lineal descendants shall be issue of the person.

	(b)		“Child” means an issue of the first generation;

	(c)		“Per stirpes” means in equal shares among living children of the person whose issue are referred to and the issue (taken collectively) of each deceased child of such person, with such issue taking by right of representation of such deceased child; and

	(d)		“Survive” and “surviving” mean living after the death of the Participant.

6.5.5. Special Rules. Unless the Participant has otherwise specified in the Participant’s Beneficiary designation, the following rules shall apply:

	(a)		If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.

	(b)		The automatic Beneficiaries specified in Section 6.5.2 and the Beneficiaries designated by the Participant shall become fixed at the time of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary’s estate.

	(c)		If the Participant designates as a Beneficiary the person who is the Participant’s spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form that is both executed by the Participant and received by the Plan Administrator (i) after the date of the legal termination of the marriage between the Participant and such former spouse and (ii) during the Participant’s lifetime.

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	(d)		Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participant’s death.

	(e)		Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.

	(f)		A Beneficiary designation is permanently void if it either is executed or is filed by a Participant who, at the time of such execution or filing, is then a minor under the law of the state of the Participant’s legal residence.

	(g)		The Plan Administrator shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation.

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SECTION 7

FUNDING OF PLAN

7.1. Hedging Investments. If the Company elects to finance all or a portion of the Company’s costs in connection with this Plan through the purchase of life insurance or other investments, the Participant agrees, as a condition of participation in this Plan, to cooperate with the Plan Administrator in the purchase of such investment to any extent reasonably required by the Plan Administrator and relinquishes any claim the Participant or a Beneficiary might have to the proceeds of any such investment or any other rights or interests in such investment. If a Participant fails or refuses to cooperate, then notwithstanding any other provision of this Plan the Plan Administrator shall immediately and irrevocably terminate and forfeit the Participant’s entitlement to benefits under this Plan.

7.2. Corporate Obligation. Neither the Company, nor the Director Affairs Committee, the Plan Administrator nor any of their directors, officers, agents or directors in any way secure or guarantee the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant. Each person entitled or claiming to be entitled at any time to any benefit hereunder shall look solely to the assets of the Company for such payments as an unsecured general creditor. If, or to the extent that, Accounts have been paid to or with respect to a present or former Participant and that payment purports to be the payment of a benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in the other assets of the Company in connection with this Plan. No person shall be under any liability or responsibility for failure to effect any of the objectives or purposes of this Plan by reason of the insolvency of the Company.

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SECTION 8

AMENDMENT AND TERMINATION

8.1. Amendment and Termination.

8.1.1. Before a Change of Control. Prior to the occurrence of a Change of Control, the Director Affairs Committee may unilaterally amend the Plan Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and may likewise terminate this Plan both with regard to persons then receiving benefits and persons expecting to receive benefits in the future; provided, however, that:

	(a)		the benefit, if any, payable to or with respect to a Participant who has had a Separation from Service as of the effective date of such amendment or the effective date of such termination shall not be, without the written consent of the Participant, diminished or delayed by such amendment or termination, and

	(b)		the benefit, if any, payable to or with respect to each other Participant determined as if such Participant had a Separation from Service on the effective date of such amendment or the effective date of such termination shall not be, without the written consent of the Participant, diminished or delayed by such amendment or termination.

8.1.2. After a Change of Control.

(a)

Existing Participants. After the occurrence of a Change of Control, the Director Affairs Committee may only amend the Plan Statement or terminate this Plan as applied to Participants who are Participants on the date of the Change of Control if:

	(i)		all benefits payable to or with respect to persons who were Participants as of the Change of Control (including benefits earned before and benefits earned after the Change of Control) have been paid in full, or

	(ii)		eighty percent (80%) of all the Participants determined as of the date of the Change of Control give knowing and voluntary written consent to such amendment or termination.

(b)

New Participants. After the occurrence of a Change of Control, as applied to Participants who are not Participants on the date of the Change of Control, the Director Affairs Committee may unilaterally amend the

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Plan Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and may likewise terminate this Plan.

8.2. No Oral Amendments. No modification of the terms of the Plan Statement or termination of this Plan shall be effective unless it is in writing and signed on behalf of the Director Affairs Committee by a person authorized to execute such writing. No oral representation concerning the interpretation or effect of the Plan Statement shall be effective to amend the Plan Statement.

8.3. Plan Binding on Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), by agreement, to expressly assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

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SECTION 9

DETERMINATIONS — RULES AND REGULATIONS

9.2. Rules and Regulations. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Plan Administrator.

9.3. Method of Executing Instruments. Information to be supplied or written notices to be made or consents to be given by the Company, the Director Affairs Committee, the Plan Administrator or any other person pursuant to any provision of the Plan Statement may be signed in the name of the Company, the Director Affairs Committee, the Plan Administrator or any other person by any officer or other person who has been authorized to make such certification or to give such notices or consents.

9.4. Claims Procedure. Until modified by the Director Affairs Committee, the claim and review procedures set forth in this Section shall be the mandatory claim and review procedures for the resolution of disputes and disposition of claims filed under the Plan. Any application for a payment or withdrawal shall be considered as a claim for the purposes of this Section.

9.4.1. Initial Claim. An individual may, subject to any applicable deadline, file with the Director Affairs Committee a written claim for benefits under the Plan in a form and manner prescribed by the Director Affairs Committee.

	(a)		If the claim is denied in whole or in part, the Director Affairs Committee shall notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.

	(b)		The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the Director Affairs Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Director Affairs Committee notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.

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9.4.2. Notice of Initial Adverse Determination. A notice of an adverse determination shall set forth in a manner calculated to be understood by the claimant:

	(a)		the specific reasons for the adverse determination;

	(b)		references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;

	(c)		a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and

	(d)		a description of the claim and review procedures, including the time limits applicable to such procedure.

9.4.3. Request for Review. Within sixty (60) days after receipt of an initial adverse benefit determination notice, the claimant may file with the Director Affairs Committee a written request for a review of the adverse determination and may, in connection therewith submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within sixty (60) days after receipt of the initial adverse determination notice shall be untimely.

9.4.4. Claim on Review. If the claim, upon review, is denied in whole or in part, the Director Affairs Committee shall notify the claimant of the adverse benefit determination within sixty (60) days after receipt of such a request for review.

	(a)		The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the Director Affairs Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Director Affairs Committee notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.

	(b)		In the event that the time period is extended due to a claimant’s failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.

	(c)		The Director Affairs Committee’s review of a denied claim shall take into account all comments, documents, records, and other information

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submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

9.4.5. Notice of Adverse Determination for Claim on Review. A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant:

	(a)		the specific reasons for the denial;

	(b)		references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;

	(c)		a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; and

	(d)		a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures.

9.5. Rules and Regulations.

9.5.1. Adoption of Rules. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Director Affairs Committee.

9.5.2. Specific Rules.

	(a)		No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the established claim procedures. The Director Affairs Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Director Affairs Committee upon request.

	(b)		All decisions on claims and on requests for a review of denied claims shall be made by the Director Affairs Committee unless delegated in which case references in this Section 9 to the Director Affairs Committee shall be treated as references to the Director Affairs Committee’s delegate. Such delegation may be implied or inferred. If the Director Affairs Committee does delegate the decision, all references to the Director Affairs Committee in Section 9 shall be treated as references to the Director Affairs Committee’s delegate.

	(c)		Claimants may be represented by a lawyer or other representative at their own expense, but the Director Affairs Committee reserves the right to require the claimant to furnish written authorization and establish

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			reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. A claimant’s representative shall be entitled to copies of all notices given to the claimant.

	(d)		The decision of the Director Affairs Committee on a claim and on a request for a review of a denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the Director Affairs Committee.

	(e)		In connection with the review of a denied claim, the claimant or the claimant’s representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

	(f)		The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.

	(g)		The claims and review procedures shall be administered with appropriate safeguards so that benefit claim determinations are made in accordance with governing plan documents and, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.

	(h)		For the purpose of this Section, a document, record, or other information shall be considered “relevant” if such document, record, or other information: (i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administration processes and safeguards designed to ensure that the benefit claim determination was made in accordance with governing plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants; and (iv) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.

	(i)		The Director Affairs Committee may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.

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9.5.3. Limitations and Exhaustion.

	(a)		No claim shall be considered under these administrative procedures unless it is filed with the Director Affairs Committee within two (2) years after the Participant knew (or reasonably should have known) of the general nature of the dispute giving rise to the claim. Every untimely claim shall be denied by the Director Affairs Committee without regard to the merits of the claim.

	(b)		No suit may be brought by or on behalf of any Participant or Beneficiary on any matter pertaining to this Plan unless the action is commenced in the proper forum before the earlier of:

	(i)		three (3) years after the Participant knew (or reasonably should have known) of the general nature of the dispute giving rise to the action, or

	(ii)		sixty (60) days after the Participant has exhausted these administrative procedures.

(c)

	(i)		no Participant or Beneficiary shall be permitted to litigate any such matter unless a timely claim has been filed under these administrative procedures and these administrative procedures have been exhausted; and

	(ii)		determinations by the Director Affairs Committee (including determinations as to whether the claim was timely filed) shall be afforded the maximum deference permitted by law.

(d)

	(i)		a Participant shall not be required to exhaust these administrative remedies;

	(ii)		if there is litigation regarding the benefits payable to or with respect to a Participant, notwithstanding Section 9.1, determinations by the Director Affairs Committee (including

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			determinations regarding when any matter arose) shall not be afforded any deference and the matter shall be heard de novo; and

	(iii)		if a Participant successfully litigates, in whole or in part, any claim for benefits under this Plan, the court shall award reasonable attorney’s fees and costs of the action to the Participant.

	(e)		For the purpose of applying the deadlines to file a claim or a legal action, knowledge of all facts that a Participant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant for the purpose of applying the previously specified periods.

	(f)		All litigation in any way related to the Plan (including but not limited to any and all claims) must be filed in a court of competent jurisdiction within the State of Minnesota.

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SECTION 10

PLAN ADMINISTRATION

10.1. The Company.

10.1.1. Officers. Except as hereinafter provided, functions generally assigned to the Company and functions generally assigned to the Plan Administrator shall be discharged by its principal human resources officer of the Company unless delegated and allocated as provided herein.

10.1.2. Chief Executive Officer. Except as hereinafter provided, the Chief Executive Officer of the Company may delegate or redelegate and allocate and reallocate to one or more persons or to a committee of persons jointly or severally, and whether or not such persons are directors, officers or directors, such functions assigned to the Company generally hereunder as the Chief Executive Officer may from time to time deem advisable.

10.1.3. Board of Directors. Notwithstanding the foregoing, the Board of Directors shall have the exclusive authority, which may not be delegated, to amend the Plan Statement and to terminate this Plan.

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SECTION 11

CONSTRUCTION

11.1. ERISA Status. This Plan is adopted with the understanding that it is an unfunded plan maintained exclusively for the purpose of providing deferred compensation for persons none of whom are employees. Because this Plan does not benefit any employee, this Plan is not subject to Employee Retirement Income Security Act of 1974, as amended. Each provision shall be interpreted and administered accordingly.

11.2. IRC Status. This Plan is intended to be a nonqualified deferred compensation arrangement. The rules of section 401(a) et. seq. of the Code shall not apply to this Plan. This Plan is intended to comply with the requirements of section 409A of the Code insofar as it relates to amounts subject to section 409A and this Plan Statement shall be construed and administered accordingly. It is expressly intended that for purposes of section 409A of the Code this Plan be considered two account balance plans. The first consists of amounts deferred at the election of the Participant (i.e., amounts attributable to the voluntary deferrals into the Deferred Cash Account and/or the Deferred Stock Account). The second consists of amounts deferred at the election of the Company (i.e., amounts attributable to Deferred Stock Retainer awards into the Deferred Stock Account). Neither the Company nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any Participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the Participant or other person on account of any amounts due or paid under this Plan or on account of any failure to comply with any of such Code sections.

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11.5.

Rules of Document Construction.

	(a)		Birthdays and Age. An individual shall be considered to have attained a given age on such individual’s birthday for that age (and not on the day before). The anniversary of any event (e.g., a birthday) occurring on February 29 in a leap year shall be considered to have occurred on February 28 in each year that is not a leap year.

	(b)		Plurals and Gender. Whenever appropriate, words used herein in the singular may be read in the plural, or words used herein in the plural may be read in the singular; the masculine may include the feminine; and the words “hereof,” “herein” or “hereunder” or other similar compounds of the word “here” shall mean and refer to the entire Plan Statement and not to any particular paragraph or Section of the Plan Statement unless the context clearly indicates to the contrary.

	(c)		Titles. The titles given to the various Sections of the Plan Statement are inserted for convenience of reference only and are not part of the Plan Statement, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.

	(d)		Nonduplication. Notwithstanding any thing apparently to the contrary contained in the Plan Statement, the Plan Statement shall be construed and administered to prevent the duplication of benefits provided under this Plan and any other qualified or nonqualified plan maintained in whole or in part by the Company.

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11.8. Effect on Director Status. Neither the terms of the Plan Statement nor the benefits under this Plan nor the continuance thereof shall be a term of the engagement of any director. The Company shall not be obliged to continue this Plan. The terms of this Plan shall not give any director the right to be retained in the service of the Company. This Plan is not and shall not be deemed to constitute a contract of employment between the Company and any director or other person, nor shall anything herein contained be deemed to give any director or other person any right to be retained in the Company’s employ or in any way limit or restrict the Company’s right or power to discharge any director or other person at any time and to treat him without regard to the effect which such treatment might have upon him as a Participant in this Plan.

11.9. Choice of Law. Except to the extent that federal law is controlling, this Plan Statement be construed and enforced in accordance with the laws of the State of Minnesota (without regard to conflict of laws principles).

11.10. Delegation. No person shall be liable for an act or omission of another person with regard to a responsibility that has been allocated to or delegated to such other person pursuant to the terms of the Plan Statement or pursuant to procedures set forth in the Plan Statement. Whenever any authority, function or responsibility is delegated from one person to another, the discretion possessed by the person making the delegation shall be fully assigned to the person receiving the delegation unless a contrary intention is clearly expressed in the delegation.

11.11. Tax Withholding. The Company (or any other person legally obligated to do so) shall withhold the amount of any federal, state or local income tax, payroll tax or other tax required to be withheld under applicable law with respect to any amount payable under this Plan. All benefits otherwise due hereunder shall be reduced by the amount to be withheld.

11.12. Expenses. All expenses of administering the benefits due under this Plan shall be borne by the Company. The Accounts of Participants shall not be charged for those expenses.

11.13. Service of Process. In the absence of any designation to the contrary by the Plan Administrator, the Secretary of the Plan Administrator is designated as the appropriate and exclusive agent for the receipt of service of process directed to this Plan in any legal proceeding, including arbitration, involving this Plan.

11.14. Spendthrift Provision. No Participant or Beneficiary shall have any interest in any Account which can be transferred nor shall any Participant or Beneficiary have any power to anticipate, alienate, dispose of, pledge or encumber the same while in the possession or control of the Company. The Plan Administrator shall not recognize any such effort to convey any interest under this Plan. No benefit payable under this Plan shall be subject to attachment, garnishment, execution following judgment or other legal process before actual payment to such person.

The power to designate Beneficiaries to receive the Account of a Participant in the event of such Participant’s death shall not permit or be construed to permit such power or right to be exercised

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by the Participant so as thereby to anticipate, pledge, mortgage or encumber such Participant’s Account or any part thereof, and any attempt of a Participant so to exercise said power in violation of this provision shall be of no force and effect and shall be disregarded by the Company.

This section shall not prevent the Plan Administrator from exercising, in its discretion, any of the applicable powers and options granted to it upon the occurrence of a Separation from Service, as such powers may be conferred upon it by any applicable provision hereof.

11.15. Certifications. Information to be supplied or written notices to be made or consents to be given by the Plan Administrator pursuant to any provision of this Plan may be signed in the name of the Plan Administrator by any officer who has been authorized to make such certification or to give such notices or consents.

11.16. Errors in Computations. Participants shall be obligated to furnish such information (including but not limited to current mailing addresses, social security numbers, marital status, dates of birth and the like) as the Plan Administrator may from time to time require for the effective and efficient administration of this Plan. The Plan Administrator shall not be liable or responsible for any error in the computation of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any survivor to whom such benefit shall be payable, directly or indirectly, to the Plan Administrator, and used by the Plan Administrator in determining the benefit. The Plan Administrator shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth and the Plan Administrator may recover any prior overpayment and pursue all other remedies that may be available.


, 2008	SUPERVALU INC.

	By


		Its

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APPENDIX A
THE “DEFERRED CASH PLAN”

SUPERVALU INC
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
EFFECTIVE 6/27/96, AS AMENDED

A director who is not an employee of the Company or of a subsidiary of the Company may elect to defer receipt of the payment of his cash fees and other cash compensation as a director until such time as he has ceased to be a director, as hereinafter provided.

Any election hereunder to defer fees shall apply to all or any part of the cash fees and other cash compensation earned by the director as a director of the Company (quarterly retainer fees as well as fees for attending Board meetings and committee meetings, but not stock option grants or amounts paid pursuant to Non-Employee Directors Deferred Stock Plan) until termination of such election.

Such election shall be made by the director filing a written statement with the Secretary of the Company electing to defer director’s fees pursuant to this plan and shall be effective with respect to any fees and other compensation thereafter payable to the electing director for which no services have yet been rendered by said electing director.

A director’s election to defer director’s fees hereunder shall continue thereafter unless and until the director terminates the deferral by giving notice to the Secretary in writing. In the event of such termination of a deferral, the amount previously deferred shall not be paid until such director ceases to be a director.

All fees to deferred will be credited to a special bookkeeping account for the director at such times as the fees would have been payable had the director not elected to defer payment thereof.

The Company will not set aside any money in trust or otherwise fund the payment of any amounts credited to the director’s deferred fee account, but shall make payment to the director when due out of general corporate funds. The director shall have the status solely of an unsecured general creditor of the Company with respect to the amounts credited to the director’s deferred fee account.

Interest shall be accrued on all deferred fees from and after the date when credited to the director’s deferred fee account until paid as hereinafter provided. For all amounts credited to a director’s deferred fee account prior to July 1, 1996, interest shall be accrued at the rate of 11% per annum; for all amounts credited to a director’s deferred fee account

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on or after July 1, 1996, interest shall be accrued at the prime interest rate as published in the Wall Street Journal on the first business day of January each year for the ensuing year. Such interest shall be credited to the director’s deferred fee account as of the last day of each month and shall be compounded annually.

8.		The balance in the director’s deferred fee account (including interest thereon) accrued prior to July 1, 1996, shall be paid in ten equal annual installments, each installment being paid on or before January 10 of each year beginning with the calendar year immediately following the year in which the director ceases to be a director. The balance in the director’s deferred fee account (including interest thereon) accrued on and after July 1, 1996, shall be paid in a lump sum or in equal annual installments, as the director shall elect at the time the director makes the deferral election under paragraph 1 hereof. Notwithstanding the foregoing, the Company, acting by resolution of the Board exclusive of any director covered by this plan, in its sole discretion may determine to make payment of the balance in the director’s deferred fee account (including accrued interest thereon) in one payment or in installments. Furthermore, the director may change the deferred payment election for cash fees and other cash compensation that has previously been deferred into the director’s deferred fee account by delivering a subsequent deferral payment election in writing to the Secretary that will take effect at the beginning of the second complete calendar year after the date of the revised deferral payment election. Interest at the rates provided in Section 7 shall be earned on unpaid installments.

		The foregoing not to the contrary, after a director ceases to be a director, such person, or in the event of such person’s death, his or her surviving spouse or beneficiary, may, at any time, request an immediate lump sum payment of all or part of the present value of his or her deferred fee account that is not yet due and payable, subject to forfeiture of ten percent (10%) of such amount.

Upon the death of a director or a former director, any amounts of deferred director’s fees and interest accrued shall be aid in full on or before January 10 of the calendar year following the year in which the director dies, to the legal representative of the director’s estate or to such person(s) as the director shall have instructed the Company by written instrument filed with the Secretary of the Company and signed by the director.

10.

Upon a Change of Control of the Company (as hereinafter defined) the entire balance of the director’s deferred fee account shall be paid in full to the director.

CHANGE OF CONTROL:

For purposes hereof, Change of Control shall have the following meaning:

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3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisition shall not constitute a Change of Control; (i) any acquisition directly from the Company (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof, or

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, than any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the

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Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business combination; or

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

Last Revised: 4/03

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APPENDIX B
THE “DEFERRED STOCK PLAN”

SUPERVALU INC.

NON-EMPLOYEE DIRECTORS DEFERRED STOCK PLAN

1. Purpose. The purpose of the SUPERVALU INC. Non-Employee Directors Deferred Stock Plan (the “Plan”) is to further strengthen the alignment of interests between members of the Board of Directors (the “Board”) of SUPERVALU INC. (the “Company”) who are not employees of the Company (the “Participants”) and the Company’s stockholders through the increased ownership by Participants of shares of the Company’s common stock, par value $1.00 per share (“Common Stock”). This will be accomplished by (i) providing to Participants deferred compensation in the form of the right to receive shares of Common Stock for services rendered in their capacity as directors, and (ii) allowing Participants to elect voluntarily to defer all or a portion of their fees for services as members of the Board pursuant to the Plan in exchange for the right to receive shares of Common Stock valued at 110% of the cash fees otherwise payable.

2. Eligibility. Each member of the Board of Directors of the Company who is not an employee of the Company or of any subsidiary of the Company shall be eligible to participate in the Plan.

3. Formula Share Award. Effective on July 1, or the first business day thereafter in each year (the “Award Date”), the Company shall award each Participant who shall continue to serve on the Board following the Award Date, as a credit to the Participant’s account under the Plan (the “Deferred Stock Account”), that number of shares (rounded to the nearest one-hundredth share) of Common Stock, having an aggregate fair market value on the Award Date of Twenty Thousand Dollars ($20,000) (the “Award”). The Award shall be in addition to any cash retainer, stock options, or other remuneration received by the Participant for services rendered as a director. If, after receiving an Award, the Participant shall cease to serve on the Board prior to the Company’s next annual meeting, for any reason other than death or permanent disability, then such Participant’s Deferred Stock Account shall be reduced by (i) that number of shares equal to 1/12 of the Award for each full calendar month during which the Participant did not serve as a director of the Company, plus (ii) any dividends paid on that number of shares of Common Stock specified in (i) above during the period that the Participant did not serve as a director of the Company.

4. Election to Defer Cash Compensation. A Participant may elect to defer, in the form of a credit to the Participant’s Deferred Stock Account all or a portion of the annual cash retainer, meeting fees for attendance at meetings of the Board and its committees, committee chairperson retainers, and any other fees and retainers (“Compensation”) otherwise payable to the director in

B-1

cash during the period following the effective date of the deferral election. Such deferral election shall be made pursuant to Section 5.

5. Manner of Making Deferral Election. A Participant may elect to defer Compensation pursuant to the Plan by filing, no later than December 31 of each year (or by such other date as the Committee shall determine), an irrevocable election with the Corporate Secretary on a form provided for that purpose (“Deferral Election”). The Deferral Election shall be effective with respect to Compensation payable on or after July 1 of the following year unless the Participant shall revoke or change the election by means of a subsequent Deferral Election in writing that takes effect on the date specified therein but in no event earlier than six (6) months (or such other period as the Committee, as defined in Section 17, shall determine) after the subsequent Deferral Election is received by the Company. The Deferral Election form shall specify an amount to be deferred expressed as a dollar amount or as a percentage of the Participant’s Compensation otherwise payable in cash for the director’s services.

6. Credits to Deferred Stock Account for Elective Deferrals. On the first day of each calendar quarter (the “Credit Date”), a Participant shall receive a credit to his or her Deferred Stock Account. The amount of the credit shall be the number of shares of Common Stock (rounded to the nearest one-hundredth of a share) determined by dividing an amount equal to 110% of the Participant’s Compensation payable on the Credit Date and specified for deferral pursuant to Section 5 hereof, by the fair market value on the Credit Date of a share of Common Stock.

7. Fair Market Value. The fair market value of shares of Common Stock as of a given date for all purposes of the Plan, shall be the closing sale price per share of Common Stock as reported on the consolidated tape of the New York Stock Exchange on the relevant date or, if the New York Stock Exchange is closed on such day, then the day closest to such date on which it was open.

8. Dividend Credit. Each time a dividend is paid on the Common Stock, the Participant shall receive a credit to his or her Deferred Stock Account equal to that number of shares of Common Stock (rounded to the nearest one-hundredth of a share) having a fair market value on the dividend payment date equal to the amount of the dividend payable on the number of shares credited to the Participant’s Deferred Stock Account on the dividend record date.

9. Maximum Number of Shares to be Credited Under the Plan. Subject to adjustment as provided in Section 10, the maximum number of shares of Common Stock that may be credited under the Plan is 500,000 shares.

10. Adjustments for Certain Changes in Capitalization. If the Company shall at any time increase or decrease the number of its outstanding shares of Common Stock or change in any way the rights and privileges of such shares by means of the payment of a stock dividend or any other distribution upon such shares payable in Common Stock, or through a stock split, subdivision, consolidation, combination, reclassification, or recapitalization involving the

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Common Stock, then the numbers, rights, and privileges of the shares credited under the Plan shall be increased, decreased, or changed in like manner as if such shares had been issued and outstanding, fully paid, and nonassessable at the time of such occurrence.

11. Deferral Payment Election. At the time of making the Deferral Election, each Participant shall also complete a deferral payment election specifying one of the payment options described in Section 12 and 13, and the year in which amounts credited to the Participant’s Deferred Stock Account shall be paid in a lump sum pursuant to Section 12, or in which installment payments shall commence pursuant to Section 13. The Participant may change the deferral payment election by means of a subsequent deferral payment election in writing that will take effect (i) immediately upon receipt for deferrals credited after the date the Company receives such subsequent deferral payment election and (ii) at the beginning of the second calendar year following the date of the revised deferral payment election for deferrals previously credited to the Participant’s Deferred Stock Account.

12. Payment of Deferred Stock Accounts in a Lump Sum. Unless a Participant elects to receive payment of his or her Deferred Stock Account in installments as described in Section 13, credits to a Participant’s Deferred Stock Account shall be payable in full on January 10 of the year following the Participant’s termination of service on the Board (or the first business day thereafter) or such other date as elected by the Participant pursuant to Section 11. All payments shall be made in shares of Common Stock plus cash in lieu of any fractional share. Notwithstanding the foregoing, in the event of a Change of Control (as defined in Section 19), credits to a Participant’s Deferred Stock Account as of the business day immediately prior to the effective date of the transaction constituting the Change of Control shall be paid in full to the Participant or the Participant’s beneficiary or estate, as the case may be, in whole shares of Common Stock (together with cash in lieu of a fractional share) on such date. Notwithstanding the foregoing, following a Participant’s termination of service on the Board, such Participant, or in the event of his or her death, such Participant’s surviving spouse or beneficiary, may elect to receive all or a portion of the present value of his or her Deferred Stock Account prior to the date such amount becomes due and payable, subject to forfeiture of 10% of the amount to be received.

13. Payment of Deferred Stock Accounts in Installments. A Participant may elect to have his or her Deferred Stock Account paid in annual installments following termination of service as a director or at such other time as elected by the Participant pursuant to Section 11. All payments shall be made in shares of Common Stock plus cash in lieu of any fractional share. All installment payments shall be made annually on January 10 of each year (or the first business day thereafter). The amount of each installment payment shall be computed as the number of shares credited to the Participant’s Deferred Stock Account on the Computation Date, multiplied by a fraction, the numerator of which is one and the denominator of which is the total number of installments elected (not to exceed fifteen) minus the number of installments previously paid. Amounts paid prior to the final installment payment shall be rounded to the nearest whole number of shares; the final installment payment shall be for the whole number of shares then credited to the Participant’s Deferred Stock Account, together with cash in lieu of any fractional

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shares. Notwithstanding the foregoing, following a Participant’s termination of service on the Board, such Participant, or in the event of his or her death, such Participant’s surviving spouse or beneficiary, may elect to receive all or a portion of the present value of his or her Deferred Stock Account prior to the date such amount becomes due and payable, subject to forfeiture of 10% of the amount to be received. Further notwithstanding the foregoing, in the event of a Change of Control (as defined in Section 19), credits to a Participant’s Deferred Stock Account as of the business day immediately prior to the effective date of the transaction constituting the Change of Control shall be paid in full to the Participant or the Participant’s beneficiary or estate, as the case may be, in whole shares of Common Stock (together with cash in lieu of a fractional share) on such date.

14. Death of Participant. If a Participant dies before receiving all payments to which he or she is entitled under the Plan, payment shall be made in accordance with the Participant’s designation of a beneficiary on a form provided for that purpose and delivered to and accepted by the Committee (as hereinafter defined) or, in the absence of a valid designation or if the designated beneficiary does not survive the Participant, to such Participant’s estate.

15. Nonassignability. No right to receive payments under the Plan nor any shares of Common Stock credited to a Participant’s Deferred Stock Account shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution. The designation of a beneficiary by a Participant pursuant to Section 14 does not constitute a transfer.

16. Participants Are General Creditors of the Company. Benefits due under this Plan shall be funded out of the general funds of the Company. The Participants and beneficiaries thereof shall be general, unsecured creditors of the Company with respect to any payments to be made pursuant to the Plan and shall not have any preferred interest by way of trust, escrow, lien or otherwise in any specific assets of the Company. If the Company shall, in fact, elect to set aside monies or other assets to meet its obligations hereunder (there being no obligation to do so), whether in a grantor’s trust or otherwise, the same shall, nevertheless, be regarded as a part of the general assets of the company subject to the claims of its general creditors, and neither any Participant nor any beneficiary of any Participant shall have a legal, beneficial, or security interest therein.

17. Administration. The Plan shall be administered by a committee (the “Committee”) of three or more individuals appointed by the Board to administer the Plan. The members of the Committee must be members of, and shall serve at the discretion of, the Board. The members of the Committee shall be “disinterested persons” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Act”), or any successor rule or definition adopted by the Securities and Exchange Commission (“Rule 16b-3”), if, in the opinion of counsel for the Company, the absence of “disinterested” administrators would adversely impact the availability of the exemption from Section 16(b) of the Act provided by Rule 16b-3 for any Participant’s acquisition of Common Stock under the Plan.

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Subject to the provisions of the Plan, the Committee shall have sole and complete authority to construe and interpret the Plan; to establish, amend and rescind appropriate rules and regulations relating to the Plan; to administer the Plan; and to take all such steps and make all such determinations in connection with the Plan as it may deem necessary or advisable to carry out the provisions and intent of the Plan. All determinations of the Committee shall be made by a majority of its members, and its determinations shall be final and conclusive for all purposes and upon all persons, including, but without limitation, the Company, the Committee, the Participants and their respective successors in interest.

18. Amendment and Termination. The Board may at any time terminate, suspend, or amend this Plan; provided, however, that the provisions of Sections 2 and 3 may not be amended more than once in every six months other than to comport with changes in the Internal Revenue Code, ERISA, or the rules thereunder. No such action shall deprive any Participant of any benefits to which he or she would have been entitled under the Plan if termination of the Participant’s service as a director had occurred on the day prior to the date such action was taken, unless agreed to by the Participant.

19. Change of Control. “Change of Control” means any one of the following events:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof; or

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company

B-5

(a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

20. Effective Date. The effective date of the Plan shall be the date of approval of the Plan by the Company’s stockholders.

Last Revised: 2/9/00

B-6

EX-31.1 5 c48042exv31w1.htm EX-31.1 EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

I, Jeffrey Noddle, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SUPERVALU INC. for the quarterly fiscal period ended November 29, 2008;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: January 8, 2009	/s/ JEFFREY NODDLE
	Jeffrey Noddle
	Chief Executive Officer

EX-31.2 6 c48042exv31w2.htm EX-31.2 EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

I, Pamela K. Knous, certify that:

1. I have reviewed this quarterly report on Form 10-Q of SUPERVALU INC. for the quarterly fiscal period ended November 29, 2008;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: January 8, 2009	/s/ PAMELA K. KNOUS
	Pamela K. Knous
	Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

EX-32.1 7 c48042exv32w1.htm EX-32.1 EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of SUPERVALU INC. (the “Company”) certifies that the quarterly report on Form 10-Q of the Company for the quarterly fiscal period ended November 29, 2008, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company for the period and as of the dates covered thereby.



Dated: January 8, 2009	/s/ JEFFREY NODDLE
	Jeffrey Noddle
	Chief Executive Officer

EX-32.2 8 c48042exv32w2.htm EX-32.2 EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002



Dated: January 8, 2009	/s/ PAMELA K. KNOUS
	Pamela K. Knous
	Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

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