<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period (12 weeks) ended September 12, 1998.
[ ] 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 (I.R.S. Employer Identification No.)
incorporation or organization)
11840 VALLEY VIEW ROAD, EDEN PRAIRIE, MINNESOTA 55344
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 828-4000
Former name, former address and former fiscal year, if changed since last
report:
N/A
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 [X] No [ ]
The number of shares outstanding of each of the issuer's classes of Common Stock
as of October 13, 1998 is as follows:
Title of Each Class Shares Outstanding
------------------- ------------------
Common Shares 120,497,219
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 1: Financial Statements
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
- --------------------------------------------------------------------------------
SUPERVALU INC. and Subsidiaries
- --------------------------------------------------------------------------------
(In thousands, except per share data)
<TABLE>
<CAPTION>
Second Quarter (12 weeks) ended
Sept 12, 1998 % of sales Sept 6, 1997 % of sales
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $3,937,318 100.00% $3,866,012 100.00%
COSTS AND EXPENSES:
Cost of sales 3,534,551 89.77 3,472,726 89.83
Selling and administrative expenses 308,127 7.83 303,649 7.85
Amortization of goodwill 4,773 0.12 4,557 0.12
Interest
Interest expense 27,274 0.69 29,846 0.77
Interest income 4,113 0.10 3,912 0.10
---------------------------------------------------------
Interest expense, net 23,161 0.59 25,934 0.67
---------------------------------------------------------
Total costs and expenses 3,870,612 98.31 3,806,866 98.47
---------------------------------------------------------
EARNINGS BEFORE EQUITY IN EARNINGS
OF SHOPKO AND INCOME TAXES 66,706 1.69 59,146 1.53
GAIN ON SALE OF SHOPKO -- -- 90,034 2.33
---------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 66,706 1.69 149,180 3.86
PROVISION FOR INCOME TAXES
Current 24,211 58,756
Deferred 2,595 1,309
---------------------------------------------------------
Income tax expense 26,806 0.68 60,065 1.55
---------------------------------------------------------
NET EARNINGS $ 39,900 1.01% $ 89,115 2.31%
=========================================================
NET EARNINGS PER COMMON SHARE - BASIC $ .33 $ .72
NET EARNINGS PER COMMON SHARE - DILUTED $ .33 $ .71
Weighted average number of common
shares outstanding
Basic 120,753 124,118
Diluted 122,178 125,680
Dividends declared per common share $ .1325 $ .1300
</TABLE>
See notes to consolidated financial statements.
All data subject to year-end audit.
2
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
- --------------------------------------------------------------------------------
SUPERVALU INC. and Subsidiaries
- --------------------------------------------------------------------------------
(In thousands, except per share data)
<TABLE>
<CAPTION>
Year-to-date (28 weeks) Ended
------------------------------------------------------------
Sept 12, 1998 % of sales Sept 6, 1997 % of sales
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 9,139,894 100.00% $ 8,899,315 100.00%
COSTS AND EXPENSES:
Cost of sales 8,218,306 89.92 8,004,900 89.95
Selling and administrative expenses 702,178 7.68 683,951 7.68
Amortization of goodwill 11,095 0.12 10,594 0.12
Interest
Interest expense 65,596 0.72 71,167 0.80
Interest income 10,290 0.11 9,030 0.10
------------------------------------------------------------
Interest expense, net 55,306 0.61 62,137 0.70
------------------------------------------------------------
Total costs and expenses 8,986,885 98.33 8,761,582 98.45
------------------------------------------------------------
EARNINGS BEFORE EQUITY IN EARNINGS
OF SHOPKO AND INCOME TAXES 153,009 1.67 137,733 1.55
EQUITY IN EARNINGS AND GAIN ON SALE
OF SHOPKO - - 93,364 1.05
------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 153,009 1.67 231,097 2.60
PROVISION FOR INCOME TAXES
Current 57,499 87,387
Deferred 3,812 4,829
------------------------------------------------------------
Income tax expense 61,311 0.67 92,216 1.04
------------------------------------------------------------
NET EARNINGS $ 91,698 1.00% $ 138,881 1.56%
============================================================
NET EARNINGS PER COMMON SHARE - BASIC $ .76 $ 1.07
NET EARNINGS PER COMMON SHARE - DILUTED $ .75 $ 1.06
Weighted average number of common
shares outstanding
Basic 120,645 129,740
Diluted 122,159 130,714
Dividends declared per common share $ .2625 $ .2550
</TABLE>
See notes to consolidated financial statements.
All data subject to year-end audit.
3
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SUPERVALU INC. and Subsidiaries Second Quarter as of Fiscal Year End
- --------------------------------------------------------------------------------------------
(In thousands) September 12, February 28,
ASSETS 1998 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 6,985 $ 6,100
Receivables, less allowance for losses of $13,959 at
September 12, 1998 and $13,415 at February 28, 1998 424,298 410,741
Inventories 1,090,542 1,115,529
Other current assets 77,016 79,690
--------------------------------
TOTAL CURRENT ASSETS 1,598,841 1,612,060
LONG-TERM NOTES RECEIVABLE 175,227 178,692
PROPERTY, PLANT AND EQUIPMENT, NET 1,628,881 1,589,601
GOODWILL 507,868 498,438
OTHER ASSETS 208,246 214,219
--------------------------------
TOTAL ASSETS $4,119,063 $4,093,010
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Notes payable $ 126,681 $ 149,002
Accounts payable 995,388 924,371
Current debt and obligations under capital leases 295,744 179,594
Other current liabilities 201,817 204,193
--------------------------------
TOTAL CURRENT LIABILITIES 1,619,630 1,457,160
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES 1,066,107 1,260,728
OTHER LIABILITIES AND DEFERRED INCOME TAXES 178,991 173,217
TOTAL STOCKHOLDERS' EQUITY 1,254,334 1,201,905
--------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,119,062 $4,093,010
================================
</TABLE>
See notes to consolidated financial statements.
All data subject to year-end audit.
4
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SUPERVALU INC. AND SUBSIDIARIES
- ---------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
CAPITAL IN
PREFERRED COMMON EXCESS OF TREASURY RETAINED
STOCK STOCK PAR VALUE STOCK EARNINGS TOTAL
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT FEBRUARY 22, 1997 $ 5,908 $ 150,670 $ 99 $ (231,871) $ 1,382,617 $ 1,307,423
Net earnings - - - - 230,757 230,757
Sales of common stock
under option plans - - (4,123) 51,623 - 47,500
Cash dividends declared
on common stock -
$.515 per share - - - - (63,678) (63,678)
Compensation under employee
incentive plans - - 6,951 11,289 - 18,240
Purchase of shares for treasury - - - (338,337) - (338,337)
- ---------------------------------------------------------------------------------------------------------------------------
BALANCES AT FEBRUARY 28,1998 5,908 150,670 2,927 (507,296) 1,549,696 1,201,905
Net earnings - - - - 91,698 91,698
Sales of common stock
under option plans - - (2,392) 20,871 - 18,479
Cash dividends declared
on common stock -
$.2625 per share - - - - (32,211) (32,211)
Compensation under employee
incentive plans - - 996 4,827 - 5,823
Purchase of shares for treasury - - - (31,360) - (31,360)
- ---------------------------------------------------------------------------------------------------------------------------
BALANCES AT SEPTEMBER 12, 1998 $ 5,908 $ 150,670 $ 1,531 $ (512,958) $ 1,609,183 $ 1,254,334
===========================================================================================================================
</TABLE>
See notes to consolidated financial statements.
All data subject to year-end audit.
5
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
SUPERVALU INC. AND SUBSIDIARIES
- -------------------------------------------------------------------------------
(In thousands)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR-TO-DATE
(28 WEEKS ENDED)
- -------------------------------------------------------------------------------------------
SEPT 12, SEPT 6,
1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 290,629 $ 271,112
- -------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of ShopKo stock - 305,153
Additions to long-term notes receivable (20,270) (40,799)
Proceeds from sale of property, plant and equipment 24,339 60,252
Purchase of property, plant and equipment (150,532) (106,441)
Other cash provided by (used in) investing activities 3,826 (11,136)
- -------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (142,637) 207,029
- -------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in checks outstanding, net of deposits 38,921 12,192
Net reduction of short-term notes payable (22,321) (47,297)
Proceeds from issuance of long-term debt 83,500 --
Repayment of long-term debt (186,445) (125,723)
Payments for purchase of treasury stock (31,360) (265,195)
Other cash used in financing activities (29,402) (19,484)
- -------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (147,107) (445,507)
- -------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 885 32,634
Cash and cash equivalents at beginning of year 6,100 6,539
- -------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF SECOND QUARTER $ 6,985 $ 39,173
===========================================================================================
Supplemental Information:
Pretax LIFO income (expense) $ 2,233 $ (2,550)
Pretax depreciation and amortization $ 122,172 $ 122,617
</TABLE>
See notes to consolidated financial statements.
All data subject to year-end audit.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies
- -------------------
The summary of significant accounting policies is included in the notes to
consolidated financial statements in the 1998 annual report of SUPERVALU INC.
("SUPERVALU" or the "company").
Stock Split
- -----------
On July 1, 1998 the company announced a two-for-one stock split, to be effected
in the form of a 100 percent stock dividend for shareholders of record on July
20, 1998. All share and per share data have been adjusted to reflect the stock
dividend.
Statement of Registrant
- -----------------------
The data presented herein is unaudited but, in the opinion of management,
includes all adjustments necessary for a fair presentation of the condensed
consolidated financial position of the company and its subsidiaries at September
12, 1998 and September 6, 1997 and the results of the company's operations and
condensed cash flows for the periods then ended. These interim results are not
necessarily indicative of the results of the fiscal years as a whole.
7
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
-----------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
RESULTS FOR THE QUARTER:
The company reported sales of $3.9 billion for fiscal 1999 and fiscal 1998. Net
earnings for the quarter were $39.9 million and both basic and diluted earnings
per share were $.33. After excluding the non-recurring gain from the sale of its
investment in ShopKo Stores, Inc. ("ShopKo"), last year net earnings were $35.5
million, basic earnings per share was $.29 and diluted earnings per share was
$.28. The following table sets forth net sales by segment:
<TABLE>
<CAPTION>
Net Sales by Segment
- ----------------------------------------------------------------------------------------
(In thousands) Second Quarter (12 weeks)
- ----------------------------------------------------------------------------------------
September 12, 1998 September 6, 1997
Net Sales % of Total Net Sales % of Total
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Food distribution - net $ 2,792,919 70.9% $ 2,784,767 72.0%
Retail food 1,144,399 29.1 1,081,245 28.0
- ----------------------------------------------------------------------------------------
Total net sales $ 3,937,318 100.0% $ 3,866,012 100.0%
========================================================================================
</TABLE>
NET SALES
Net sales increased 1.8 percent compared to last year, positively impacted by a
.3 percent increase in food distribution sales and a 5.8 percent increase in
retail food sales. Sales gains were achieved despite the low inflationary
environment.
Food distribution continued to achieve sales increases by adding net new
independent customers and stores. Retail food sales increased over last year
primarily due to new store openings over the past twelve months and an increase
in same-store sales of 3.5 percent. The 5.8 percent increase in retail food
sales was achieved despite the closing or sale of underperforming stores in the
prior year.
GROSS PROFIT
Gross profit as a percentage of net sales was 10.2 percent, even with last year.
Food distribution and retail food gross profit as a percent of net sales were
consistent with last year.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses were 8.0 percent of net sales, even with
last year. Food distribution and retail food selling and administrative expenses
as a percent of net sales were consistent with last year.
8
<PAGE>
OPERATING EARNINGS
The company's operating earnings (earnings before interest, equity in earnings
and gain on sale of ShopKo and income taxes) increased 5.6 percent to $89.9
million compared with $85.1 million last year. Operating earnings before
depreciation and amortization increased to $142.8 million compared with $138.3
million last year, a 3.3 percent increase. Food distribution operating earnings
were $70.3 million compared to $70.4 million last year. Retail food operating
earnings increased 27.9 percent to $26.0 million from $20.3 million. The
increase in retail food operating earnings was due to the strong same store
sales performance and selling and administrative expense controls.
INTEREST EXPENSE AND INCOME
Interest expense decreased to $27.3 million compared with $29.8 million last
year, reflecting lower average borrowings. Interest income increased to $4.1
million compared with $3.9 million last year, primarily due to increased
retailer financing.
EQUITY IN EARNINGS AND GAIN ON SALE OF SHOPKO
During the second quarter of last year, the company exited its remaining 46
percent investment in ShopKo. The transaction resulted in a pretax gain of $90.0
million or $.43 per share in the second quarter of last year. Due to the sale,
there was no equity in earnings recorded in either quarter.
NET EARNINGS
Net earnings were $39.9 million or $.33 per share - basic and diluted, compared
with last year's net earnings of $89.1 million or $.72 per share - basic ($.71
per share - diluted). Excluding ShopKo, last year's net earnings would have been
$35.5 million or $.29 per share - basic ($.28 per share - diluted). Weighted
average shares - diluted declined to 122.2 million compared with last year's
125.7 million primarily due to the repurchase of shares with proceeds from the
ShopKo transaction.
YEAR-TO-DATE RESULTS:
The following table sets forth net sales by segment:
<TABLE>
<CAPTION>
Net Sales by Segment
- ----------------------------------------------------------------------------------------
(In thousands) Year-to-Date (28 weeks)
- ----------------------------------------------------------------------------------------
September 12, 1998 September 6, 1997
Net Sales % of Total Net Sales % of Total
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Food distribution - net $ 6,586,892 72.1% $ 6,453,217 72.5%
Retail food 2,553,002 27.9 2,446,098 27.5
- ----------------------------------------------------------------------------------------
Total net sales $ 9,139,894 100.0% $ 8,899,315 100.0%
========================================================================================
</TABLE>
9
<PAGE>
NET SALES
Net sales increased 2.7 percent compared to last year, positively impacted by a
2.1 percent increase in food distribution sales and a 4.4 percent increase in
retail food sales. Sales gains were achieved despite the low inflationary
environment.
Food distribution continued to achieve sales increases by adding net new
independent customers and stores. Retail food sales increased over last year
primarily due to new store openings over the past twelve months and an increase
in same-store sales of 2.3 percent. The 4.4 percent increase in retail food
sales was achieved despite the closing or sale of underperforming stores in the
prior year.
GROSS PROFIT
Gross profit as a percentage of net sales was 10.1 percent, even with last year.
Food distribution and retail food gross profit as a percent of net sales were
consistent with last year.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses were 7.8 percent of net sales, even with
last year. Food distribution and retail food selling and administrative expenses
as a percent of net sales were consistent with last year.
OPERATING EARNINGS
The company's operating earnings (earnings before interest, equity in earnings
and gain on sale of ShopKo and income taxes) increased to $208.3 million
compared with $199.9 million last year. Operating earnings before depreciation
and amortization increased to $ 330.5 million compared with $322.5 million last
year, a 2.5 percent increase. Food distribution operating earnings increased 2.0
percent to $160.3 million from $157.2 million. Retail food operating earnings
increased 11.9 percent to $63.2 million from $56.5 million. The increase in
retail food operating earnings was due to the strong same store sales
performance and selling and administrative expense controls.
INTEREST EXPENSE AND INCOME
Interest expense decreased to $65.6 million compared with $71.2 million last
year, reflecting lower average borrowings. Interest income increased to $10.3
million compared with $9.0 million last year, primarily due to increased
retailer financing.
EQUITY IN EARNINGS AND GAIN ON SALE OF SHOPKO
During the second quarter of last year, the company exited its remaining 46
percent investment in ShopKo. The transaction resulted in a pretax gain of $90.0
million or $.41 per share last year. Due to the sale, there was no equity in
earnings recorded in the current year compared with $3.3 million or $.03 per
share last year.
INCOME TAXES
The effective tax rate increased to 40.1 percent compared with 39.9 percent last
year. The increase in the effective tax rate was due to the elimination of
ShopKo earnings.
10
<PAGE>
NET EARNINGS
Net earnings were $91.7 million or $.76 per share - basic ($.75 per share -
diluted) compared with last year's net earnings of $138.9 million or $1.07 per
share - basic ($1.06 per share - diluted). Excluding ShopKo, last year's net
earnings would have been $81.9 million or $.63 per share - basic and diluted.
Weighted average shares - diluted declined to 122.2 million compared with last
year's 130.7 million primarily due to the repurchase of 13.8 million shares in
the second quarter of last year, with proceeds from the ShopKo transaction.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Internally generated funds from operations continued to be the major source of
liquidity and capital growth. Cash provided from operations year-to-date was
$290.6 million compared with $271.1 million last year. Cash provided from
operations of $290.6 million and the issuance of long term debt of $83.5 million
was primarily used to repay long term debt of $186.4 million and finance capital
expenditures of $150.5 million.
SUPERVALU will continue to use short-term and long-term debt as a supplement to
internally generated funds to finance its activities. The company has a $400
million "shelf registration" in effect pursuant to which the company could issue
$159 million of additional debt securities. During the year the company issued
$83.5 million of bonds under the existing "shelf registration". The bonds issued
had average coupon rates of 6.6 percent with seven and eight year maturities. A
$400 million revolving credit agreement, with rates tied to LIBOR plus .180 to
.275 percent, also is in place and expires in October 2002. The revolving credit
agreement is available for general corporate purposes and to support the
company's commercial paper program. There were no drawings on the revolving
credit agreement during the year. Total commercial paper outstanding as of the
end of the second quarter was $100 million. Maturities of debt will depend on
management's views with respect to the relative attractiveness of interest rates
at the time of issuance.
YEAR 2000
- ---------
GENERAL
SUPERVALU's company wide Year 2000 Project ("Project") is proceeding on
schedule. The Project is addressing the issue of application systems,
information technology (IT) systems and technologies which include embedded
systems being able to distinguish between the year 1900 and the year 2000. In
1996, the company began establishing processes for evaluating and managing the
risks associated with the Project. The Project is divided into six components.
These components include program management, communications, application
conversions and technology upgrades, contingency planning, quality assurance and
external entities. The company is using both internal and external resources to
implement the Project. The work to complete the Project is expected to be
completed by mid to late 1999.
11
<PAGE>
The company has relationships with a significant number of key business
partners. The company has initiated formal communications with its key business
partners and has initiated formal contingency planning processes to mitigate the
risk to the company if the business partners are not prepared for the year 2000.
This is planned to be completed by mid 1999. There can be no guarantee that the
business partners will successfully and timely reprogram or replace and test all
of their own computer hardware, software and process control systems. While the
failure of a single business partner to achieve year 2000 compliance should not
have a material adverse effect on the company's results of operations, the
failure of several key business partners could have such an effect.
COSTS
The total costs associated with required modifications to become Year 2000
compliant is not expected to be material to the company's financial position.
The company has incurred costs to date of $16.8 million. Estimated costs for the
remainder of work is $9.5 million for a total projected Project cost of $26.3
million.
RISKS
While the effort to assess and correct the company's Year 2000 issues are
expected to be complete prior to related forecasted failure horizons, the
company is taking specific measures to assess risks and develop specific
contingency plans. A formal process is being developed to assess business
critical functions and create action plans which will describe the
communications, operations and IT activities that will be conducted if the
contingency plan must be executed.
The costs of the Project and the completion dates are based on management's best
estimates, which were derived from assumptions of future events including the
availability of resources, key business partner modifications plans and other
factors. There can be no guarantee that these estimates will be achieved and
actual results could vary due to uncertainties.
The Company's Year 2000 efforts are ongoing and its overall Project will
continue to evolve as new information becomes available. The failure to correct
a material Year 2000 problem could result in an interruption in certain normal
business activities and operations. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of the Year 2000
readiness of third parties with whom the company relies on, the company is
unable to determine at this time whether the consequences of Year 2000 failures
will have a material adverse impact on the company's results of operation but
the company believes that, with the implementation of new business systems and
completion of the Project as scheduled, the possibility of significant
interruptions of normal operations should be reduced.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
The information in this 10Q includes forward-looking statements. Important risks
and uncertainties that could cause actual results to differ materially from
those discussed in such forward looking statements are detailed in Exhibit 99.1
to the company's Annual Report on Form 10-K for the fiscal year ended February
28, 1998 and under the caption "Year 2000" in this Form 10-Q; other risks or
uncertainties may be detailed from time to time in the company's future
Securities and Exchange Commission filings.
12
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information.
- ------- ------------------
On October 9, 1998, the Board of Directors approved amendments to the
Company's Revised Bylaws to revise the "advance notice" bylaw
governing the requirements of prior notice for stockholder proposals
being submitted for Annual Meetings of Stockholders. As a result of
such amendments, the Company's Revised Bylaws now require a
stockholder's written notice to be received by the Company not later
than the close of business on the 120th day nor earlier than the close
of business on the 150th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event
that the date of the annual meeting is more than 30 days before or
more than 60 days after such anniversary date, notice by the
stockholder to be timely must be delivered not earlier than the close
of business on the 150th day prior to such annual meeting or the 10th
day following the day on which public announcement of the date of such
meeting is first made. In the event that the number of directors to be
elected to the Board of Directors is increased and there is no public
announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Company at least
100 days prior to the first anniversary of the preceding year's annual
meeting, a stockholders' notice required by the Revised Bylaws will
also be considered timely, but only with respect to the nominees for
any new positions created by such increase, if such notice is
delivered to the Company not later than the close of business on the
10th day following the day on which a public announcement is first
made by the Company. Furthermore, in the event the Company calls a
special meeting of stockholders for the purpose of electing one or
more directors to the Board of Directors, a stockholder may nominate
an individual for election to the Board of Directors, if the
stockholder's notice is delivered to the Company not earlier than the
close of business on the 120th day prior to such special meeting and
not later than the close of business on the later of the 90th day
prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. Based on the Revised Bylaws, as amended, if a
stockholder desires to submit a proposal or nominate a person for
election as a director at the 1999 Annual Meeting of Stockholders (and
such business is not the subject of a stockholder proposal timely
submitted for inclusion in the Company's Proxy Statement) written
notice of such business containing the information required under the
Company's Revised Bylaws must be received by the Company at its
principal executive offices on or before March 3, 1999, but no earlier
than February 1, 1999. The foregoing description of the Restated
Bylaws, as amended, is qualified in its entirety by reference to the
full text of the Company's Restated Bylaws, as amended, filed as
Exhibit (3) hereto and incorporated by reference herein.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
- ------- ---------------------------------
(a) Exhibits filed with this Form 10-Q:
(3) Restated Bylaws of SUPERVALU INC., as amended.
(10)a. SUPERVALU INC. 1983 Employee Stock Option Plan, as amended.
(10)b. SUPERVALU INC. Long-Term Incentive Plan, as amended.
(10)c. Amendments to the SUPERVALU INC. Executive
Deferred Compensation Plan, as amended, and the
SUPERVALU INC. Executive Deferred Compensation
Plan II, as amended.
(10)d. Amended and Restated SUPERVALU INC. Grantor Trust.
(10)e. SUPERVALU INC. Directors Retirement Program, as amended.
(10)f. SUPERVALU INC. Non-Employee Directors Deferred
Stock Plan, as amended.
(10)g. SUPERVALU INC. Deferred Compensation Plan for
Non-Employee Directors, as amended.
(10)h. Third Amendment of the SUPERVALU INC. Non-Qualified
Supplemental Executive Retirement Plan.
(10)i. Form of Agreement used in connection with Registrant's
Executive Post-Retirement Survivor Benefit Program.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter.
14
<PAGE>
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: October 23, 1998 By: /s/ Pamela K. Knous
-------------------------------
Pamela K. Knous
Executive Vice President, Chief
Financial Officer
(Authorized officer of Registrant)
15
<PAGE>
EXHIBIT (3)
Adopted: October 23, 1980
Amended: June 27, 1983
Amended: December 16, 1986
Amended: April 13, 1988
Amended: June 30, 1988
Amended: February 14, 1990
Amended: December 12, 1990
Amended: February 16, 1991
Amended: June 30, 1992
Amended: October 9, 1998
RESTATED BYLAWS
OF
SUPERVALU INC.
Table of Contents
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ARTICLE I. Offices, Corporate Seal 1
Section 1.01. Registered Office 1
Section 1.02. Corporate Seal 1
ARTICLE II. Meetings of Stockholders 1
Section 2.01. Place and Time of Meetings 1
Section 2.02. Annual Meetings 1
Section 2.03. Special Meetings 1
Section 2.04. Quorum, Adjourned Meetings 1
Section 2.05. Organization 2
Section 2.06. Order of Business 2
Section 2.07. Voting 2
Section 2.08. Inspectors of Election 3
Section 2.09. Notices of Meetings and Consents 3
Section 2.10. Proxies 3
Section 2.11. Waiver of Notice 4
Section 2.12. Stockholder List 4
Section 2.13. Fixing Date for Determination of Stockholders of Record 4
Section 2.14. Stockholder Action by Written Consent 4
Section 2.15. Notice of Stockholder Business and Nominations 5
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ARTICLE III. Board of Directors 7
Section 3.01. General Powers 7
Section 3.02. Number, Election and Term of Office 7
Section 3.03. Annual Meeting 8
Section 3.04. Regular Meetings 8
Section 3.05. Special Meetings 9
Section 3.06. Notice of Meetings 9
Section 3.07. Waiver of Notice 9
Section 3.08. Quorum 9
Section 3.09. Removal 9
Section 3.10. Committees of Directors 9
Section 3.11. Written Action 10
Section 3.12. Compensation 10
Section 3.13. Conference Communications 10
ARTICLE IV. Standing Committees 10
Section 4.01. Standing Committees 10
Section 4.02. Executive Committee 11
Section 4.03. Executive Personnel and Compensation Committee 11
Section 4.04. Finance Committee 11
Section 4.05. Audit Committee 11
Section 4.06. Director Affairs Committee 12
ARTICLE V. Officers 12
Section 5.01. Number 12
Section 5.02. Election, Term of Office and Qualifications 12
Section 5.03. Removal and Vacancies 12
Section 5.04. Chairman and Vice Chairman of the Board 12
Section 5.05. President 13
Section 5.06. Chief Executive Officer 13
Section 5.07. Chief Operating Officer 13
Section 5.08. Vice Presidents 13
Section 5.09. President Pro Tem 13
Section 5.10. Secretary 13
Section 5.11. Treasurer 14
Section 5.12. Controller 14
Section 5.13. Counsel 14
Section 5.14. Duties of Other Officers 14
Section 5.15. Authority to Execute Agreements 14
Section 5.16. Duties of Officers May be Delegated 14
Section 5.17 Compensation 15
ARTICLE VI. Shares and Their Transfer 15
Section 6.01. Certificates for Stock 15
Section 6.02. Issuance of Stock 15
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Section 6.03. Partly Paid Stock 15
Section 6.04. Transfer of Stock 16
Section 6.05. Facsimile Signatures 16
ARTICLE VII. Dividends, Surplus, Etc. 16
Section 7.01. Dividends 16
Section 7.02. Use of Surplus, Reserve 16
ARTICLE VIII. Books and Records, Audit, Fiscal Year 16
Section 8.01. Books and Records 16
Section 8.02. Audit 17
Section 8.03. Fiscal Year 17
ARTICLE IX. Indemnification 17
Section 9.01. Statutory Indemnification 17
Section 9.02. Additional Indemnification 17
Section 9.03. Procedure for Indemnification 18
Section 9.04. Non-Exclusive 18
Section 9.05. Subsidiary Corporations 19
ARTICLE X. Miscellaneous 19
Section 10.01. Periods of Time 19
Section 10.02. Voting Securities Held by the Corporation 19
Section 10.03. Purchase and Sale of Securities 19
ARTICLE XI. Amendments 20
Section 11.01. 20
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RESTATED BYLAWS
OF
SUPERVALU INC.
ARTICLE I.
Offices, Corporate Seal
Section 1.01. Registered Office. The registered office of the corporation in
Delaware shall be at 100 West Tenth Street, Wilmington, Delaware, and the
resident agent in charge thereof shall be The Corporation Trust Company.
Section 1.02. Corporate Seal. The corporate seal shall be circular in form
and have inscribed thereon, the name of the corporation, the year of its
incorporation (1925), and the word "Delaware."
ARTICLE II.
Meetings of Stockholders
Section 2.01. Place and Time of Meetings. Meetings of the stockholders may
be held at such place and at such time as may be designated by the Board of
Directors. In the absence of a designation of place, meetings shall be held at
the principal executive office of the corporation. In the absence of a
designation of time, the meetings shall be held at 10:00 a.m. local time at the
place where the meeting is to be held. Any previously scheduled annual or
special meeting of the stockholders may be postponed by resolution of the Board
of Directors upon public notice given prior to the date previously scheduled for
such meeting.
Section 2.02. Annual Meetings. The annual meeting of the stockholders of the
corporation for the election of directors and for the transaction of any other
proper business shall be held at such date, time and place as may be fixed by
resolution of the Board of Directors.
Section 2.03. Special Meetings. Special meetings of the stockholders for any
purpose or purposes shall be called only by the Secretary (but only at the
written request of a majority of the total number of directors), the Chairman of
the Board or the President. Stockholders shall have no power or right to call
special meetings. The call of any special meeting shall state the purpose or
purposes of the meeting. Business transacted at any special meeting shall be
limited to the purposes stated in the call of such meeting.
Section 2.04. Quorum, Adjourned Meetings. The holders of a majority of the
shares outstanding and entitled to vote shall constitute a quorum for the
transaction of business at any annual or special meeting. If a quorum is not
present at a meeting, those present shall adjourn to such day as they shall
agree upon by majority vote;
<PAGE>
provided, however, that any annual or special meeting of stockholders, whether
or not a quorum is present, may be adjourned from time to time by the Chairman
of the meeting. Notice of any adjourned meeting need not be given if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At adjourned meetings, any business may be transacted which might have
been transacted at the meeting as originally noticed. If a quorum is present,
the stockholders may continue to transact business until adjournment
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
Section 2.05. Organization. At each meeting of the stockholders, the
Chairman of the Board or his delegate shall act as Chairman; in the event the
Chairman is absent and he has not designated a Chairman, the Vice Chairman of
the Board shall act as Chairman, or the Vice Chairman of the Board shall
designate a Chairman; in the event the Vice Chairman of the Board is also absent
and has not designated a Chairman, the President shall act as Chairman, or the
President shall designate a Chairman; and the Secretary of the corporation or in
his absence an Assistant Secretary or in his absence any person whom the
Chairman of the meeting shall appoint shall act as Secretary of the meeting.
Section 2.06. Order of Business. The order of business at all meetings of
the stockholders shall be determined by the Chairman of the meeting. The
Chairman of the meeting shall convene and adjourn the meeting and determine and
announce the times at which the polls shall be opened and closed at the meeting.
Section 2.07. Voting. Except as may be provided in a resolution or
resolutions of the Board of Directors establishing a series of Preferred Stock,
and except as may be otherwise provided in the Certificate of Incorporation of
the corporation, each stockholder of the corporation entitled to vote at a
meeting of stockholders shall have one vote in person or by written proxy for
each share of stock having voting rights held by him and registered in his name
on the books of the corporation. Upon the request of any stockholder, the vote
upon any question before a meeting shall be by written ballot, and all elections
of directors shall be by written ballot. All questions at a meeting shall be
decided by a majority vote of the number of shares entitled to vote represented
at the meeting at the time of the vote except where otherwise required by
statute, the Certificate of Incorporation or these Bylaws.
Persons holding stock in fiduciary capacity shall be entitled to vote the
shares so held. Unless the Secretary of the corporation has been furnished with
a copy of governing instruments or orders which would cause other rules to be
applicable, the following rules shall govern the voting of shares standing of
record in the names of two or more persons (whether joint tenants, tenants in
common, tenants by the entirety, fiduciaries, members of a partnership, or
otherwise) or shares held in a fiduciary capacity in which two or more persons
have the same fiduciary relationship respecting such shares:
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(i) if only one person shall vote, his act shall bind all;
(ii) if more than one person shall vote, the act of the majority voting
shall bind all;
(iii) if more than one person shall vote, but the votes shall be evenly
split on any particular matter, then, except as otherwise
provided by statute, each fraction may vote the shares in question
proportionately.
Section 2.08. Inspectors of Election. For each meeting of the
stockholders, the Chairman of such meeting shall appoint one or more inspectors
of election to act. Each inspector of election so appointed shall first
subscribe an oath or affirmation to execute the duties of an inspector of
election at such meeting with strict impartiality and according to the best of
his ability. Such inspectors of election, if any, shall take charge of the
ballots at such meeting and after the balloting on any question shall count the
ballots and shall make a report in writing to the Secretary of such meeting of
the results thereof. An inspector of election need not be a stockholder of the
corporation, and any officer or employee of the corporation may be an inspector
of election on any question other than a vote for or against his election to any
position with the corporation or on any other question in which he may be
directly interested.
Section 2.09. Notices of Meetings and Consents. Every stockholder may
furnish the Secretary of the corporation with an address at which notices of
meetings and all other corporate communications may be served on or mailed to
him. In the absence of such address, the address on the corporate share registry
maintained by the transfer agent shall be sufficient for purposes of the
hereinafter described notice. Except as otherwise provided by the Certificate of
Incorporation or by statute, a written notice of each annual or special meeting
of stockholders shall be given not less than 10 nor more than 60 days before the
date of such meeting to each stockholder of record of the corporation entitled
to vote at such meeting by delivering such notice of meeting to him personally
or depositing the same in the United States mail, postage prepaid, directed to
him at the post office address as provided above. Service of notice is complete
upon mailing. Personal delivery to any officer of a corporation or association
or to any member of a partnership is delivery to such corporation, association
or partnership. Every notice of a meeting of stockholders shall state the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called.
Section 2.10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or consent to corporate action without a meeting may authorize
another person or persons to act for him by proxy by an instrument executed in
writing. If any such instrument designates two or more persons to act as
proxies, a majority of such persons present at the meeting, or, if only one
shall be present, then that one shall have and may exercise all of the powers
conferred by such written instrument upon all of the persons so designated
unless the instrument shall otherwise provide.
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Section 2.11. Waiver of Notice. Notice of any annual or special meeting
may be waived either before, at or after such meeting in writing signed by the
person or persons entitled to the notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transacting of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose of
any regular or special meeting of the stockholders need be specified in any
written waiver of notice.
Section 2.12. Stockholder List. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
such meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Section 2.13. Fixing Date for Determination of Stockholders of Record.
(a) In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action (other than the expression of consent to corporate action in writing
without a meeting of stockholders), the Board of Directors shall fix, in
advance, a record date, which may not be more than 60 or not less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action.
(b) A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 2.14. Stockholder Action by Written Consent. In order that the
corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which date
shall not be more than 10 days after the date upon which the resolution fixing
the record date is adopted by the Board of Directors. Any stockholder of record
seeking to have the stockholders authorize or take corporate action by written
consent shall, by written notice to the Secretary, request the Board of
Directors to fix a record date. The Board of Directors shall promptly, but in
all events within 10 days after the date on which such a request is received,
adopt a resolution fixing the record date. If no record date has been fixed by
the Board of Directors within 10 days of the date on which such a request is
received, the record date for determining stockholders entitled to consent to
corporate action in writing
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without a meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or any officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the corporation's registered office shall be by hand
or certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board of Directors
is required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the date on which the Board of Directors adopts the
resolution taking such prior action.
Section 2.15. Notice of Stockholder Business and Nominations.
(a) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (A) pursuant to the Corporation's notice of meeting, (B) by or
at the direction of the Board of Directors or (C) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice
provided for in this Section 2.15, who is entitled to vote at the meeting and
who complied with the notice procedures set forth in this Section 2.15.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (C) of paragraph (a)(1) of
this Section 2.15, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must be a
proper matter for stockholder action. To be timely, a stockholder's notice
shall be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 120th day nor earlier
than the close of business on the 150th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 150th day prior to such
annual meeting and not later than the close of business on the later of the
120th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first made. In no event
shall the public announcement of an adjournment of an annual meeting commence a
new time period for the giving of a stockholder's notice as described above.
Such stockholder's notice shall set forth (A) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11
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thereunder (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (B) as to any
other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (C) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 2.15 to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increase Board of Directors made by the
Corporation at least 100 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Section 2.15
shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (A) by or at the direction of the Board of
Directors or (B) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of notice provided for in this Section 2.15, who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 2.15. In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be), for election to such position(s) as specified
in the Corporation's notice of meeting, if the stockholder's notice required by
paragraph (a)(2) of this Section 2.15 shall be delivered to the Secretary at the
principal executive offices of the Corporation not earlier than the close of
business on the 120th day prior to such special meeting and not later than the
close of business on the later of the 90th day prior to such special meeting or
the 10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. In no event shall the public
announcement of an adjournment of a special meeting commence a new time period
for the giving of a stockholder's notice as described above.
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(c) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 2.15 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 2.15. Except as otherwise provided by law, the
Chairman of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was made,
or proposed, as the case may be, in accordance with the procedures set forth in
this Section 2.15 and, if any proposed nomination or business is not in
compliance with this Section 2.15, to declare that such defective proposal or
nomination shall be disregarded.
(2) For purposes of this Section 2.15, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 2.15, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 2.15. Nothing in this Section 2.15 shall be deemed to
affect any rights of (i) stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) the holders of any series of Preferred Stock to elect directors under
specified circumstances.
ARTICLE III.
Board of Directors
Section 3.01. General Powers. The business of the corporation shall be
managed by or under the direction of the Board of Directors. The Board of
Directors may delegate its authority, subject to its reasonable supervision, to
any committee, officer or agent and grant the power to sub-delegate.
Section 3.02. Number, Election and Term of Office.
(a) The Board of Directors currently consists of 14 members and the
number of directors may be increased or decreased from time to time by
resolution of a majority of the whole Board of Directors or of the holders of at
least 75% of the stock of the corporation entitled to vote, considered for the
purpose as one class. Except as otherwise provided by law or by these Bylaws,
the directors of the corporation shall be elected at the Annual Meeting of
stockholders in each year.
The directors of the corporation shall be divided into three classes with
the number of directors fixed by or in accordance with the Bylaws divided
equally so far as
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possible among the three classes. At each annual election of directors after the
1976 Annual Meeting of Stockholders, the successors to the directors of each
class whose term shall expire in that year shall be elected to hold office for a
term of three years from the date of their election and until their successors
shall be duly elected and qualified. In case of any increase or decrease in the
number of directors, the increase or decrease shall be distributed among the
several classes as nearly equal as possible, as shall be determined by the
affirmative vote of a majority of the whole Board or by the holders of at least
75% of the stock of the corporation entitled to vote, considered as one class.
(b) Vacancies: Newly Created Directorships - If the office of any
director becomes vacant at any time by reason of death, resignation, retirement,
disqualification, removal from office or otherwise, or if any new directorship
is created by any increase in the authorized number of directors, a majority of
the directors then in office, although less than a quorum, or the sole remaining
director, may choose a successor to fill the newly created directorship, and the
director so chosen shall hold office subject to the provisions of these Bylaws,
until the next Annual Meeting of Stockholders or until his or her successor
shall have been elected and qualified. At such next Annual Meeting the
stockholders shall elect a director to fill the balance of the unexpired term of
the director whose place was originally vacated or the term established by the
Board pursuant to subsection (a) above.
(c) Amendment - Notwithstanding Article XI of these Bylaws, no provision
of this Section 3.02 may be amended or rescinded except by the affirmative vote
of the holders of at least 75% of the stock of the corporation entitled to vote,
considered for the purpose as one class, or by a majority of the whole Board of
Directors.
(d) [Intentionally omitted]
(e) Notwithstanding any other provision of these Bylaws, the Board of
Directors may nominate William E. C. Dearden for reelection to the Board of
Directors at the 1991 Annual Meeting of Stockholders for a term of two years.
Upon Mr. Dearden's ceasing to be a director of the corporation, this Section
3.02(e) shall have no further force and effect and shall be deleted from these
Bylaws.
Section 3.03. Annual Meeting. As soon as practicable after each annual
election of directors, the Board of Directors shall meet at the same place as
the annual meeting of shareholders or at the principal executive office of the
corporation, or at such other place previously designated by the Board of
Directors, for the purpose of electing the officers of the corporation and for
the transaction of such other business as may come before the meeting.
Section 3.04. Regular Meetings. Regular meetings of the Board of
Directors shall be held from time to time at such time and place as may be fixed
by resolution adopted by a majority of the total number of directors.
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Section 3.05. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.
Section 3.06. Notice of Meetings. No notice need be given of any annual
or regular meeting of the Board of Directors. Notice of each special meeting of
the Board of Directors shall be given by the Secretary who shall give at least
three (3) days' notice thereof by mail or at least twenty-four (24) hours'
notice thereof to each director by telephone, telegram or in person. Notice
shall be effective upon dispatch of a letter or telegram (properly addressed to
the director) or upon delivery of written or telephoned notice to a person at
the regular business or residence address of the director even if such notice is
not personally received by the director.
Section 3.07. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived either before, at or after such meeting in writing
signed by each director so waiving notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purposes of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
Section 3.08. Quorum. A majority of the total number of directors shall
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors unless these Bylaws require a greater number.
Section 3.09. Removal. Any director may be removed from office at any
meeting of the stockholders, but only for cause. If one or more directors be so
removed, new director(s) may be elected at the same meeting.
Section 3.10. Committees of Directors.
(a) The Board of Directors may, by resolution adopted by a majority of
the total number of directors, designate one or more committees in addition to
the committees established pursuant to Article IV of these Bylaws, each to
consist of one or more of the directors of the corporation, which, to the extent
provided in the resolution, may exercise the powers of the Board of Directors in
management of the business and affairs of the corporation and may authorize the
corporate seal to be affixed to all papers that may require it. The Board of
Directors shall elect the directors to serve on each Committee and may designate
one or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. Such committee or
committees shall have such name or names as may be
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determined by the resolution adopted by the directors. The chairman of each
committee shall act as secretary of the meeting and prepare minutes of
proceedings where formal action is taken by the committee, and each committee
shall report their actions and recommendations to the Board of Directors when
required.
(b) The provisions of Section 3.06 through 3.08 of these Bylaws with
respect to notices of meetings and quorums shall also be applicable to meetings
of committees, except as otherwise provided in the Bylaws or resolutions
establishing a particular committee. Special meetings of any committee shall be
called at the request of any member or by the President or Chairman of the
Board.
Section 3.11. Written Action. Any action required or permitted to be
taken at a meeting of the Board of Directors or any committee thereof may be
taken without a meeting if all directors or committee members consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the Board of Directors or committee. Such action shall be deemed to have been
taken upon the effective date appearing in said writing, notwithstanding the
fact that some or all of the directors may have signed on a date other than the
effective date.
Section 3.12. Compensation. Directors who are not salaried officers of
this corporation may receive such fixed sum per Board or Committee meeting
attended or fixed annual sum and such other forms of compensation as may be
determined by resolution of the Board of Directors. All directors shall receive
their expenses, if any, of attendance at meetings of the Board of Directors or
any committee thereof. Any director may serve the corporation in any other
capacity and receive proper compensation therefor.
Section 3.13. Conference Communications. Directors may participate in
any meeting of the Board of Directors, or of any duly constituted committee
thereof, by means of a conference telephone conversation or other comparable
communication technique whereby all persons participating in the meeting can
hear and communicate to each other. For the purposes of establishing a quorum
and taking any action at the meeting, such directors participating pursuant to
this Section 3.13 shall be deemed present in person at the meeting; and the
place of the meeting shall be the place of origination of the conference
telephone conversation or other comparable communication technique.
ARTICLE IV.
Standing Committees
Section 4.01. Standing Committees. The corporation shall have such
standing committees of the Board of Directors as are provided in Article IV of
these Bylaws. The Chairman of each standing committee shall be appointed by vote
of a majority of the whole Board of Directors. The provisions of Section 3.10 of
the Bylaws shall govern all standing committees, except as may be otherwise
provided in the Bylaw establishing
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the committee. Each standing committee shall perform the duties specified in
these Bylaws and shall have such other responsibilities and authority as may
from time to time be assigned by the Board of Directors.
Section 4.02. Executive Committee.
(a) Between sessions of the Board of Directors, the Executive Committee
shall have, and may exercise, all of the powers of the Board of Directors in the
management and affairs of the corporation, including the power to authorize the
seal of the corporation to be affixed to all papers which may require it, except
the Executive Committee shall have no power or authority to (i) adopt an
agreement of merger or consolidation, (ii) recommend to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, (iii) recommend to the stockholders a dissolution of the
corporation or revocation of a dissolution, or (iv) amend the Certificate of
Incorporation or the Bylaws of the corporation. The Executive Committee shall
have the power and authority to declare a dividend and to authorize the issuance
of stock.
(b) At least one member of the Executive Committee shall be a director of
the corporation who is not an employee and no meeting of the Committee shall be
deemed to have a quorum unless at least one such member is present. Action by
the Executive Committee may be taken only by the unanimous vote of the members
present at a meeting in which a quorum is present. The chief executive officer
shall be a member of the Executive Committee and shall preside at its meetings
in the absence of its Chairman.
Section 4.03. Executive Personnel and Compensation Committee. The
Executive Personnel and Compensation Committee shall provide a general review of
the corporation's compensation and benefit plans to insure they meet corporate
objectives. It shall perform such duties and responsibilities as may from time
to time be assigned to it by the Board of Directors. All members of the
Committee shall be directors who are not employees of the corporation.
Section 4.04. Finance Committee. The Finance Committee shall act in an
advisory capacity and make its recommendations to the management of the
corporation and to the Board of Directors on corporate fiscal matters. It shall
perform such duties and responsibilities as may from time to time be assigned to
it by the Board of Directors.
Section 4.05. Audit Committee.
(a) The Audit Committee shall recommend to the whole Board of Directors
the selection of independent certified public accountants to audit annually the
books and records of this corporation and shall review the activities and the
reports of the independent certified public accountants and shall report the
results of such review to
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the whole Board of Directors. The Audit Committee shall also monitor the
internal audit controls of the corporation.
(b) The Audit Committee shall be comprised solely of directors
independent of management and free from any relationship that, in the opinion of
the Board of Directors, would interfere with the exercise of independent
judgment as a Committee member.
Section 4.06. Director Affairs Committee. The Director Affairs Committee
shall review and make its recommendations to the whole Board of Directors
regarding nominations of persons to serve on the Board of Directors, and shall
have such other duties and responsibilities as may from time to time be assigned
to it by the Board of Directors.
ARTICLE V.
Officers
Section 5.01. Number. The officers of the corporation shall consist of a
Chairman of the Board, a President, a Treasurer and a Secretary, and, if
elected, such additional officers as described in this Article V. The Board of
Directors shall designate whether the Chairman of the Board or the President is
to be the Chief Executive Officer of the corporation. The directors may
designate one or more regional or divisional Presidents and Vice Presidents who
shall not be officers of this corporation. Any person may hold two or more
offices except President and Vice President.
Section 5.02. Election, Term of Office and Qualifications. At each
annual meeting of the Board of Directors, all officers, from within or without
their number, shall be elected; however, the Board may elect additional officers
at any Board meeting. Such officers shall hold office until the next annual
meeting of the directors or until their successors are elected and qualified or
until such office is eliminated by a vote of the majority of all directors.
Section 5.03. Removal and Vacancies. Any officer may be removed from his
office by a majority vote of the total number of directors with or without
cause. A vacancy among the officers by death, resignation, removal, or otherwise
may be filled for the unexpired term by the Board of Directors.
Section 5.04. Chairman and Vice Chairman of the Board.
(a) The Chairman of the Board shall preside at all meetings of the
directors and shall have such other duties as may be prescribed, from time to
time, by the Board of Directors.
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(b) In the absence of the Chairman of the Board, the Vice Chairman of the
Board shall preside at all meetings of the directors, and shall have such other
duties as from time to time may be assigned by the Board of Directors.
Section 5.05. President. The President shall be the Chief Operating
Officer of the corporation. He shall have such duties as may, from time to time
be prescribed by the Board of Directors or be delegated by the Chief Executive
Officer. In the absence of the Chairman of the Board and the Vice Chairman of
the Board, or if a Chairman of the Board and Vice Chairman of the Board shall
not have been elected, the President shall preside at all meetings of the
directors.
Section 5.06. Chief Executive Officer. The Chief Executive Officer shall
be either the Chairman of the Board or the President of the corporation. He
shall be the principal executive officer of the corporation and shall be
responsible for the general management, direction and control of all of the
business and affairs of the corporation. He shall have such other authority and
duties as the Board of Directors may prescribe. The Chief Executive Officer
shall report to the Board of Directors and be responsible to them.
Section 5.07. Chief Operating Officer. The Chief Operating Officer shall
be the President. He shall be responsible for the daily operations of the
corporation's business and shall have such other authority and duties as the
Board of Directors or the Chief Executive Officer may prescribe. He shall report
to the Chief Executive Officer if the Chief Executive Officer is not also
serving as the Chief Operating Officer.
Section 5.08. Vice Presidents. Each Vice President shall have such
powers and shall perform such duties as may be prescribed by the Board of
Directors or by the Chief Executive Officer. The following categories of Vice
Presidents may be elected by the Board of Directors:
(i) Executive Vice Presidents
(ii) Senior Vice Presidents
(iii) Vice Presidents including Group Vice Presidents
Section 5.09. President Pro Tem. In the absence or disability of the
President, the Board of Directors may appoint a President Pro Tem who shall have
all the powers and duties of the President and shall serve during the aforesaid
absence or disability.
Section 5.10. Secretary. The Secretary shall be secretary of and shall
attend all meetings of the stockholders and the Board of Directors and shall
record the proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of stockholders and Board of Directors.
He shall keep the
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seal of the corporation. He shall perform such other duties as may from time to
time be prescribed by the Board of Directors or by the President or the
Chairman.
Section 5.11. Treasurer. The Treasurer or his delegate shall keep
accurate accounts of all moneys of the corporation received or disbursed. He
shall have power to endorse for deposit all notes, checks and drafts received by
the corporation. He shall disburse the funds of the corporation as ordered by
the directors, making proper vouchers therefor. He shall render to the President
and the Board of Directors whenever required an account of all his transactions
as Treasurer and of the financial condition of the corporation and shall perform
such other duties as may from time to time be prescribed by the Board of
Directors or by the President or the Chairman.
Section 5.12. Controller. The duties of the Controller shall be to
maintain adequate records and books of account and control of all assets,
liabilities and transactions of this corporation; to see that adequate audits
thereof are currently and regularly made; and, in conjunction with other
officers and department heads, to initiate and enforce adequate accounting
measures and procedures. He shall perform such other duties as the Board of
Directors may from time to time prescribe or require. His duties and powers
shall extend to all subsidiary corporations.
Section 5.13. Counsel. The Counsel shall be the legal adviser of the
corporation and shall receive such salary for his services as the Board of
Directors may fix.
Section 5.14. Duties of Other Officers. Assistant Vice Presidents,
Assistant Secretaries, and Assistant Treasurers elected by the Board of
Directors shall have the power and authority and may perform all the duties of a
Vice President, the Secretary, or the Treasurer, respectively. The duties of
such other officers and agents as the Board of Directors may designate shall be
set forth in the resolution creating such office or by subsequent resolution.
Section 5.15. Authority to Execute Agreements. The Chairman of the
Board, Vice Chairman of the Board, President, Executive Vice Presidents, Senior
Vice Presidents, Vice Presidents and Group Vice Presidents are hereby authorized
to execute or cause to be executed in the name and on behalf of this
corporation, all contracts, agreements, deeds, mortgages, bonds, options,
leases, lease and other guarantees of the obligations of others, including
subsidiary corporations and customers, stock transfer documents, and such other
instruments as may be necessary or desirable in the conduct of the business of
the corporation; and said officers are further authorized to sign and affix, or
cause to be signed and affixed, the seal of the corporation on any instrument
requiring the same, which seal shall be attested by the signature of the
Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer.
Section 5.16. Duties of Officers May be Delegated. In the case of the
absence or disability of any officer of the corporation or for any other reason
deemed sufficient
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by the Board of Directors, it may delegate his powers or duties to any other
officer or to any director during such absence or disability.
Section 5.17. Compensation. The officers of the corporation shall
receive such compensation for their services as may be determined from time to
time by resolution of the Board of Directors or by one or more committees to the
extent so authorized from time to time by the Board of Directors.
ARTICLE VI.
Shares and Their Transfer
Section 6.01. Certificates for Stock. Every holder of shares in the
corporation shall be entitled to a certificate, to be in such form as shall be
prescribed by the Board of Directors, certifying the number and class of shares
of the corporation owned by him. The certificates for such shares shall be
numbered in the order in which they shall be issued and shall be signed in the
name of the corporation by the Chairman of the Board, the President or a Vice
President, and by the Secretary or an Assistant Secretary and the seal of the
corporation shall be affixed thereto. Every certificate surrendered to the
corporation for exchange or transfer shall be cancelled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such certificate shall have been so cancelled, except in cases provided for in
Section 6.05.
Section 6.02. Issuance of Stock. The Board of Directors is authorized
to cause to be issued shares of the corporation up to the full amount authorized
by the Certificate of Incorporation in such amounts and for such consideration
as may be determined by the Board of Directors.
Section 6.03. Partly Paid Stock. The corporation may issue the whole or
any part of its stock as partly paid and subject to call for the remainder of
the consideration to be paid therefor. Upon the face or back of each certificate
issued to represent any such partly paid stock, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid stock, the corporation shall
declare a dividend upon partly paid stock of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon. The Board of
Directors may, from time to time, demand payment, in respect of each share of
stock not fully paid, of such sum of money as the necessities of the business
may, in the judgment of the Board of Directors, require, not exceeding in the
whole the balance remaining unpaid on such stock, and such sum so demanded shall
be paid to the corporation at such times and by such installments as the
directors shall direct. The directors shall give written notice of the time and
place of such payments, which notice shall be mailed at least 30 days before the
time for such payment, to each holder of or subscriber for stock which is not
fully paid at his last known post office address or his last known address on
the stock registry.
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Section 6.04. Transfer of Stock. Transfer of stock on the books of the
corporation may be authorized only by the stockholder named in the certificate,
the stockholder's legal representative or the stockholder's duly authorized
attorney-in-fact and upon surrender of the certificate or the certificates for
such stock. The corporation may treat as the absolute owner of stock of the
corporation the person or persons in whose name stock is registered on the books
of the corporation. The Board of Directors may appoint one or more transfer
agents, who shall keep the stock ledger and transfer book for the transfer of
stock of the corporation, and one or more registrars, and may require all
certificates of stock to bear the signature of such transfer agents and of such
registrars.
Section 6.05. Facsimile Signatures. Whenever any certificate is
countersigned by a transfer agent or by a registrar other than the corporation
or its employee, then the signatures of the officers or agents of the
corporation may be a facsimile. Where a certificate is to bear the signature of
a transfer agent and a registrar, the signature of one, but not both, may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on any such certificate shall cease to
be such officer, transfer agent or registrar before such certificate is issued,
it may be issued by the corporation as though the person who signed such
certificate or whose facsimile signature or signatures had been placed thereon
were such officer, transfer agent or registrar at the date of issue.
ARTICLE VII.
Dividends, Surplus, Etc.
Section 7.01. Dividends. The Board of Directors may declare dividends on
its capital stock from the corporation's surplus, or if there be none, out of
its net profits for the current fiscal year, and/or the preceding fiscal year in
such amounts as in its opinion the condition of the affairs of the corporation
shall render it advisable unless otherwise restricted by law.
Section 7.02. Use of Surplus, Reserve. The Board of Directors may use
any of the corporation's property or funds, unless such would cause an
impairment of capital, in purchasing any of the stock, bonds, debentures, notes,
scrip or other securities or evidences of indebtedness of the corporation. The
Board of Directors may from time to time set aside from corporate surplus or net
profits such sums as it deems proper as a reserve fund for any purpose.
ARTICLE VIII.
Books and Records, Audit, Fiscal Year
Section 8.01. Books and Records. The Board of Directors of the
corporation shall cause to be kept: (a) a share ledger which shall be in charge
of the Secretary; (b) records of the proceedings of stockholders and directors:
and (c) such other records
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and books of account as shall be necessary and appropriate to the conduct of the
corporate business.
Section 8.02. Audit. The Board of Directors shall cause the records and
books of account of the corporation to be audited at least once for each fiscal
year and at such other times as it may deem necessary or appropriate.
Section 8.03. Fiscal Year. The fiscal year of the corporation shall end
on the last Saturday in February of each year.
ARTICLE IX.
Indemnification
Section 9.01. Statutory Indemnification. The corporation shall indemnify
any director or officer of the corporation and may indemnify any employee or
agent of the corporation in the discretion of the Board of Directors for such
liabilities in such manner under such circumstances and to such extent as
permitted by Section 145 of the Delaware General Corporation Law or its
successor, as now enacted or hereafter amended.
Section 9.02. Additional Indemnification. In addition to that authorized
in Section 9.01 herein, the corporation shall indemnify as follows:
(a) The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding (even if such wrongful act arose out of neglect or
breach of duty not involving willful misconduct), so long as he did not act out
of personal profit or advantage which was undisclosed to the corporation and he
acted in a manner he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit
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by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit,
including amounts paid in settlement, (even if such wrongful act arose out of
neglect or breach of duty not involving willful misconduct), so long as he did
not act out of personal profit or advantage which was undisclosed to the
corporation and he acted in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation.
Section 9.03. Procedure for Indemnification.
(a) The corporation shall be required to make a determination that
indemnification under this Article is proper in the circumstances because the
person being indemnified has met the applicable standards of conduct set forth
in this Article. Such determination shall be made (1) by the Board of Directors
of the corporation by a majority vote of those directors who were not parties to
such action, suit or proceeding (even if such disinterested directors constitute
less than a quorum), or (2) if a majority of disinterested directors so directs,
by independent legal counsel (who may be regular counsel for the corporation) in
a written opinion, or (3) by the stockholders of the corporation. If a court
orders indemnification of the officer or director, no such outside determination
is necessary.
(b) Expenses incurred by any person who shall have a right of
indemnification under this Article in defending a civil or criminal action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action provided that a determination has not been made by
independent legal counsel (who may be the regular counsel for the corporation)
in a written opinion that it is reasonably likely that the person has not met
the applicable standards of conduct for indemnification and provided that the
corporation has received an undertaking by or on behalf of the person to repay
such expenses unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation pursuant to this Article.
Section 9.04. Non-Exclusive.
(a) The indemnification provided by this Article is in addition to and
independent of and shall not be deemed exclusive of any other rights to which
any person may be entitled under any agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person; provided that any indemnification realized other than under this Article
shall apply as a credit against any indemnification provided by this Article.
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(b) The corporation may provide indemnification under this Article to any
employee or agent of the corporation or of any other corporation of which the
corporation owns or controls or at the time owned or controlled directly or
indirectly a majority of the shares of stock entitled to vote for election of
directors or to any director, officer, employee or agent of any other
corporation, partnership, joint venture, trust or other enterprise in which the
corporation has or at the time had an interest as an owner, creditor or
otherwise, if and whenever the Board of Directors of the corporation deems it in
the best interest of the corporation to do so.
(c) The corporation may, to the fullest extent permitted by applicable
law from time to time in effect, indemnify any and all persons whom the
corporation shall have power to indemnify under said law from and against any
and all of the expenses, liabilities or other matters referred to in or covered
by said law, if and whenever the Board of Directors of the corporation deems it
to be in the best interest of the corporation to do so.
Section 9.05. Subsidiary Corporations. For purposes of this Article and
indemnification hereunder, any person who is or was a director or officer of any
other corporation of which the corporation owns or controls or at the time owned
or controlled directly or indirectly a majority of the shares of stock entitled
to vote for election of directors of such other corporation shall be
conclusively presumed to be serving or to have served as such director or
officer at the request of the corporation.
ARTICLE X.
Miscellaneous
Section 10.01. Periods of Time. During any period of time prescribed by
these Bylaws, the date from which the designated period of time begins to run
shall not be included, and the last day of the period so computed shall be
included.
Section 10.02. Voting Securities Held by the Corporation. Unless
otherwise ordered by the Board of Directors, the Chief Executive Officer shall
have full power and authority on behalf of the corporation (a) to attend and to
vote at any meeting of security holders of other corporations in which the
corporation may hold securities; (b) to execute any proxy for such meeting on
behalf of the corporation; or (c) to execute a written action in lieu of a
meeting of such other corporation on behalf of the corporation. At such meeting,
by such proxy or by such writing in lieu of meeting, the Chief Executive Officer
shall possess and may exercise any and all rights and powers incident to the
ownership of such securities that the corporation might have possessed and
exercised if it had been present. The Board of Directors may, from time to time,
confer like powers upon any other person or persons.
Section 10.03. Purchase and Sale of Securities. Unless otherwise ordered
by the Board of Directors, the Chief Executive Officer shall have full power and
authority
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on behalf of the corporation to purchase, sell, transfer or encumber any and all
securities of any other corporation owned by the corporation and may execute and
deliver such documents as may be necessary to effectuate such purchase, sale,
transfer or encumbrance. The Board of Directors may, from time to time, confer
like powers upon any other person or persons.
ARTICLE XI.
Amendments
Section 11.01. These Bylaws may be amended, altered or repealed at any
meeting of the directors by a vote of the majority of the whole Board of
Directors or at any meeting of the shareholders at which a quorum, as defined in
Article II, Section 2.04 of these Bylaws, is present by the vote of a majority
of the shares voting at the meeting.
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EXHIBIT (10)a
SUPERVALU INC.
1983 EMPLOYEE STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to promote the interests of
SUPERVALU INC., a Delaware corporation (the "Corporation"), and its stockholders
by encouraging selected key salaried management employees of the Corporation,
and members of the Board of Directors who are not also employees of the
Corporation, to invest in shares of the Corporation's Common Stock with the
increased personal interest and effort in the continued success and progress of
the business that stock ownership can produce, and by providing additional means
of attracting and retaining competent executive personnel and directors.
2. ADMINISTRATION; GRANTING OF OPTIONS. The Plan shall be administered by
the Board of Directors of the Corporation.
The Board of Directors shall have full authority in its discretion, but
subject to the express provisions of the Plan, to:
(a) determine the purchase price of the Common Stock covered by each
option;
(b) determine the persons to whom and the time or times at which
options shall be granted;
(c) determine the number of shares to be subject to each option;
(d) determine terms and provisions (and amendments thereof) of the
respective option agreements (which need not be identical), including such
terms and provisions (and amendments) as shall be required in the judgment
of the Board to conform to any law or regulation applicable thereto;
(e) determine which options shall be Incentive Stock Options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code");
(f) accelerate the time at which all or any part of an option may be
exercised;
(g) modify or amend any outstanding option agreement subject to the
consent of optionee;
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(h) interpret the Plan and prescribe, amend and rescind rules and
regulations relating to it;
(i) make all other determinations deemed necessary or advisable for
the administration of the Plan.
All decisions, determinations and selections made by the Board of Directors
on the foregoing matters shall be conclusive.
The granting of an option pursuant to the Plan shall be effective only when
an option is duly awarded to an employee or director by the Board of Directors.
The Executive Committee of the Corporation, in addition to and not to the
exclusion of the Board of Directors of the Corporation, is authorized to
exercise all of the powers authorized and conferred by the Plan on the Board of
Directors other than the power under Section 12 of this Plan to terminate and
amend the Plan.
The Board of Directors may also authorize, at any time, the formation of a
Stock Option Committee (the "Committee"), consisting of three or more members
appointed from time to time by the Board, which Committee would have authority
to exercise the powers conferred on the Board under the Plan, other than the
power under Section 12 herein to terminate and amend the Plan. In addition, the
Board of Directors may authorize, at any time, the Chief Executive Officer of
the Corporation to extend the period of exercise of certain Incentive Stock
Options and non-incentive (non-qualified) stock options in accordance with the
provisions set forth in the option agreement.
3. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING STOCK OPTIONS.
Incentive Stock Options may be granted only to key salaried management employees
(which term, as used herein, includes officers) of the Corporation and of its
present and future subsidiary corporations. Options which do not qualify as
Incentive Stock Options may be granted to key salaried management employees of
the Corporation and of its present and future subsidiary corporations and to
members of the Board of Directors of the Corporation who are not also employees
of the Corporation or one of its subsidiaries ("Non-Employee Directors"),
provided, however, that options shall be granted to Non-Employee Directors only
pursuant to Section 7 hereof.
In determining the employees to whom options shall be granted and the
number of shares to be covered by each such option, the Board of Directors may
take into account the nature of the services rendered by the respective
employees, their present and potential contributions to the success of the
Corporation and such other factors as the Board of Directors, in its discretion,
shall deem relevant.
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Subject to the provisions of Section 10 herein, an employee who has been
granted an option under the Plan or under any prior stock option plan of the
Corporation may be granted an additional option or options under the Plan if the
Board of Directors shall so determine.
4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided in Section
11 herein:
(a) the stock to be offered under the Plan shall be shares of the
Corporation's authorized Common Stock, par value $1.00 per share, which may
be either shares reacquired and held in the treasury of the Corporation or
authorized but unissued shares; and
(b) the aggregate number of shares which may be issued under all
options granted pursuant to the Plan shall be 4,500,000 shares.
Shares subject to, but not issued under, any option terminating or expiring
for any reason prior to exercise thereof in full shall again be available for
other options thereafter granted under the Plan.
5. TERM OF PLAN AND OF EACH OPTION AGREEMENT; EXERCISE OF OPTIONS. The
period during which options may be granted under the Plan shall expire February
7, 1999. The term of each option so granted shall expire not more than ten years
from the date the option is granted.
The Board of Directors may determine at the time of granting whether each
such option is exercisable in full, in part from time to time or in
installments, which may be cumulative from year to year during such term to the
extent not exercised in a prior year; provided, however, that notwithstanding
the foregoing, from and after a Change of Control (as hereinafter defined), all
options granted under the Plan, including options granted to Non-Employee
Directors pursuant to Section 7 hereof, shall become immediately exercisable to
the full extent of the original award. As used herein, "Change of Control" shall
mean any of the following events:
(i) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Corporation or (B) the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; provided, however, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change of Control; (A) any acquisition
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directly from the Corporation or (B) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation; or
(ii) the consummation of any merger or other business combination of the
Corporation, sale or lease of the Corporation's assets or combination of the
foregoing transactions (the "Transactions") other than a Transaction immediately
following which the shareholders of the Corporation and any trustee or fiduciary
of any Corporation employee benefit plan immediately prior to the Transaction
own at least 60% of the voting power, directly or indirectly, of (A) the
surviving corporation in any such merger or other business combination; (B) the
purchaser or lessee of the Corporation's assets; or (C) both the surviving
corporation and the purchaser or lessee in the event of any combination of
Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board of Directors of the Corporation or the board of directors of a
successor to the Corporation. For this purpose, any director who was not a
director at the beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board of Directors of the
Corporation by, or on the recommendation of or with the approval of, at least
three-fourths of the directors who then qualified as Incumbent Directors (so
long as such director was not nominated by a person who has expressed an intent
to effect a Change of Control or engage in a proxy or other control contest); or
(iv) such other event or transaction as the Board of Directors of the
Corporation shall determine constitutes a Change of Control.
Options granted under this Plan need not be identical with respect to the
terms of exercise thereof. Subject only to the foregoing limitations, options
may be exercised in whole at any time or in part from time to time during the
option term by serving written notice of exercise on the Corporation,
accompanied by payment of the purchase price.
The Board of Directors or the Committee, as the case may be, may grant
"restoration" options, separately or together with another option, pursuant to
which, subject to the terms and conditions established by the Board of Directors
or the Committee, as the case may be, and any applicable requirements of Rule
16b-3 promulgated under the Exchange Act or any other applicable law, the
optionee would be granted a new option when the payment of the exercise price of
the option to which such "restoration" option relates is made by the delivery of
shares of the Corporation's Common Stock owned by the optionee, as described in
Section 6 hereof, which new option would be an option to purchase the number of
shares not exceeding the sum of
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(a) the number of shares of the Corporation's Common Stock tendered as payment
upon the exercise of the option to which such "restoration" option relates, (b)
the number of shares of the Corporation's Common Stock, if any, tendered as
payment of the amount to be withheld under applicable income tax laws in
connection with the exercise of the option to which such "restoration" option
relates, as described in Section 14 hereof, and (c) the number of shares of the
Corporation's Common Stock, if any, previously owned by the optionee that are
tendered as payment for additional tax obligations of the optionee in connection
with the exercise of the option to which such "restoration" option relates, as
described in Section 14 hereof. "Restoration" options may be granted with
respect to options previously granted under this Plan or any prior stock option
plan of the Corporation, and may be granted in connection with any option
granted under this Plan (other than an option granted to a Non-Employee Director
pursuant to Section 7 hereof) at the time of such grant. The purchase price of
the Common Stock under each such new option, and the other terms and conditions
of such option, shall be determined by the Board of Directors or the Committee,
as the case may be, consistent with the provisions of the Plan.
6. OPTION PRICES. Except with respect to options granted to Non-Employee
Directors pursuant to Section 7 hereof, the purchase price of the Common Stock
under each option shall be determined by the Board of Directors, but shall not
be less than 100% of the fair market value of the Common Stock at the time of
granting the option as found by the Board.
The purchase price of the shares as to which an option shall be exercised
shall be paid in full in cash at the time of exercise as shall be provided in
the option agreement, and any optionee, without limitation, shall also be
entitled to pay the exercise price by tendering to the Corporation shares of the
Corporation's Common Stock, previously owned by the optionee, having a fair
market value on the date of exercise equal to the option price (or the portion
thereof not paid in cash).
7. OPTIONS TO NON-EMPLOYEE DIRECTORS. The Board of Directors or the
Committee, as the case may be, shall issue options which do not qualify as
Incentive Stock Options to Non-Employee Directors in accordance with this
Section 7.
Each Non-Employee Director serving on the Corporation's Board of Directors
immediately following the Annual Meeting of Stockholders of the Corporation on
June 30, 1992 shall be granted, as of June 30, 1992, an option to purchase 3,000
shares of Common Stock. Each Non-Employee Director first elected or appointed to
the Corporation's Board of Directors after June 30, 1992 and during the term of
the Plan shall be granted, as of the date of such Director's first election or
appointment to the Board of Directors, an option to purchase 3,000 shares of
Common Stock. After the initial grant to each Non-Employee Director as set forth
above in this Section 7, each such Director shall be granted during the term of
the Plan, as of the date of the
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Corporation's Annual Meeting of Stockholders in each even-numbered year, if such
Director's term of office continues after such Annual Meeting, an option to
purchase 3,000 shares of Common Stock.
Each option granted to a Non-Employee Director pursuant to this Section 7
shall have an exercise price equal to the fair market value of the shares of
Common Stock as of the date of grant and shall expire on the tenth anniversary
of the date of grant. "Restoration" options may not be granted to any
Non-Employee Director. This Section 7 shall not be amended more than once every
six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act or the rules and regulations thereunder.
8. ADDITIONAL TERMS. Options granted under the Plan shall not be affected
by any change of duties or position so long as the optionee continues to be an
employee of the Corporation or of a subsidiary (or continues to be a Director of
the Corporation in the case of any Non-Employee Director). Each option agreement
may contain such provisions as the Board of Directors shall approve with
reference to the effect of approved leaves of absence, provided that with
respect to Incentive Stock Options such provisions conform to the requirements
of the Code.
Nothing in the Plan or in any option granted pursuant thereto shall confer
on any person any right to continue in the employ of the Corporation or of any
of its subsidiaries (or to continue as a Director of the Corporation in the case
of any Non-Employee Director) or affect, in any way, the right of the
Corporation or any of its subsidiaries to terminate his employment (or to
terminate his directorship in the case of any Non-Employee Director) at any
time.
No optionee, who is an employee of the Corporation at the time of grant,
may be granted any option or options for more than 250,000 Shares (subject to
adjustment as provided for in Section 11), taking into account all such awards
granted by the Corporation pursuant to any of its stock compensation plans, in
any calendar year period beginning with the period commencing January 1, 1997.
The foregoing annual limitation specifically includes the grant of any options
representing "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
9. DEATH; OTHER TERMINATION OF EMPLOYMENT OR DIRECTORSHIP. Each option
agreement shall include provisions governing the disposition of an option in the
event of the retirement, disability, death or other termination of the
employment or directorship of an optionee with the Corporation or an Affiliate.
10. INCENTIVE STOCK OPTIONS. Except with respect to options granted to
Non-Employee Directors pursuant to Section 7 hereof, the Board of Directors is
hereby authorized to determine, upon the granting of each option, whether such
option shall be
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an Incentive Stock Option under Section 422 of the Code or shall be an option
which is not an Incentive Stock Option under Section 422. For Incentive Stock
Options granted before January 1, 1987, the aggregate fair market value of the
stock (determined as of the time the Incentive Stock Option is granted) covered
under all Incentives Stock Options granted (under this Plan and all other
incentive stock option plans of the Corporation or any subsidiary), in any
calendar year, shall not exceed $100,000 plus any unused limit carry-over (as
provided under former Section 422(c)(4) of the Code effective for options
granted before January 1, 1987). For Incentive Stock Options granted after
December 31, 1986, the aggregate fair market value (determined at the time the
Incentive Stock Option is granted) of the stock with respect to which all
Incentive Stock Options are exercisable for the first time by an employee during
any calendar year (under all plans described in subsection (b) of Section 422 of
the Code of his employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Notwithstanding any other
provision of the Plan, the Board of Directors may adjust the number and class of
shares subject to each outstanding option and the option prices in the event of
changes in the outstanding Common Stock of the Corporation by reason of stock
dividends, split-ups, recapitalizations, mergers, consolidations, combinations
or exchanges of shares and the like. In the event of any such change in the
outstanding Common Stock of the Corporation, the aggregate number and class of
shares available under the Plan shall be appropriately adjusted by the Board of
Directors, whose determination shall be conclusive.
12. TERMINATION AND AMENDMENT. The Plan may be terminated, modified or
amended by the stockholders of the Corporation.
Subject to Section 7 hereof, the Board of Directors of the Corporation may
also terminate the Plan or make such modifications or amendments thereof as it
shall deem advisable, or to conform to any change in any law or regulation
applicable thereto; provided, however, that the Board of Directors may not,
without further approval by the holders of a majority of the outstanding stock
of the Corporation having general voting power, make any modification or
amendment which operates:
(a) to make any material change in the class of employees eligible to
receive Incentive Stock Options as defined in Section 3 above; and
(b) to increase the total number of shares for which options may be
granted under the Plan, except as resulting from the operation of Section
11 above.
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No termination, modification or amendment of the Plan may, without the
consent of the employee to whom any option shall theretofore have been granted,
adversely affect the rights of such employee under such option.
13. EFFECTIVE DATE OF PLAN. The Plan shall become effective February 23,
1983, subject to approval by the shareholders of the Corporation within 12
months thereafter.
14. TAX WITHHOLDING AND PAYMENT. Subject to such rules as the Board of
Directors or the Committee may adopt not inconsistent with the provisions of the
Plan:
(a) At any time when an optionee is required to pay the Corporation an
amount required to be withheld under applicable income tax laws in
connection with the exercise of an option which does not qualify as an
Incentive Stock Option under Section 422 of the Code, the optionee may
elect to deliver to the Corporation or have the Corporation retain from the
distribution, shares of Common Stock to satisfy this obligation in whole or
in part (an "Election"). In addition to amounts required to be withheld to
pay applicable taxes, subject to such terms and conditions as the Committee
shall determine in its sole and absolute discretion, the Committee may
permit an optionee to elect to deliver to the Corporation shares of Common
Stock (other than shares of Common Stock issuable upon exercise of the
option) with a fair market value equal to the amount of such additional
federal and/or state income taxes imposed on the optionee in connection
with the exercise of the option. The shares to be withheld or delivered
shall be valued at 100% of the fair market value of the shares on the date
that the amount of tax required to be paid shall be determined (the "Tax
Date"). Fair market value of the shares shall equal the mean of the opening
and closing trade prices of the shares as reported on the New York Stock
Exchange on the Tax Date, or, if no trading in the shares occurs on the Tax
Date, on the immediately preceding trading date.
(b) Each Election must be made prior to the Tax Date. The Board or the
Committee may disapprove of any Election, may suspend or terminate the
right to make Elections, may limit the amount of any Election, may provide
at the time of grant with respect to any option that the right to make
Elections shall not apply to such option and may make rules concerning the
required information to be included in any Election. An Election is
irrevocable.
(c) The Election may be made in an amount equal to the amount of tax
required by law to be withheld with respect to the option exercise. Any
fractional share withholding amount must be paid in cash.
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(d) If an optionee makes an Election and the optionee's Tax Date is
deferred for six months from the date of exercise of the option, the
optionee will initially receive the full amount of the shares, but will be
unconditionally obligated to surrender to the Corporation on the Tax Date
the proper number of shares to satisfy the withholding obligation, plus
cash for any remainder of the withholding obligation including any
fractional shares withholding amount.
(e) Optionees who are "officers" or "directors" of the Corporation, as
those terms are used in Section 16(b) of the Exchange Act, may only make an
Election in compliance with the rules established by the Board or the
Committee to comply with Section 16(b).
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EXHIBIT (10)b
SUPERVALU INC.
LONG-TERM INCENTIVE PLAN
SECTION I. ESTABLISHMENT
On February 12, 1992, the Board of Directors of SUPERVALU INC. (the
"Company"), upon recommendation by the Compensation and Stock Option Committee
(the "Committee"), approved an incentive plan for executives as described
herein, which plan shall be known as the "SUPERVALU INC. Long-Term Incentive
Plan" (the "Plan"). The Plan shall be submitted for approval by the stockholders
of the Company at the 1992 annual meeting of stockholders. The Plan shall be
effective as of February 12, 1992, subject to its approval by the stockholders
of the Company, and no shares shall be issued pursuant to the Plan until after
the Plan has been approved by the stockholders of the Company.
SECTION II. PURPOSE
The purpose of the Plan is to advance the interests of the Company and its
stockholders by attracting and retaining key employees, and by stimulating the
efforts of such employees to contribute to the continued success and progress of
the business. The Plan is further intended to provide such employees with an
opportunity to increase their ownership of the Company's common stock with the
increased personal interest in the long-term success of the business that such
stock ownership can produce.
SECTION III. ADMINISTRATION
3.1 Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of members appointed from time to time by the
Board of Directors and shall be comprised of not less than such number of
directors as shall be required to permit the Plan to satisfy the requirements of
Rule 16b-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation ("Rule 16b-3"). All members of the Committee shall
be members of the Board of Directors of the Company who are "disinterested
persons" within the meaning of Rule 16b-3. To the extent required by Section
162(m) of the Internal Revenue Code of 1986, as amended (such statute, as it may
be amended from time to time and all proposed, temporary or final Treasury
Regulations promulgated thereunder shall be referred to as the "Code"), the
Committee administering the Plan shall be composed solely of "outside directors"
within the meaning of Section 162(m) of the Code.
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3.2 Power and Authority of the Committee. The Committee shall have full
power and authority, subject to all the applicable provisions of the Plan and
applicable law, to (a) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it deems necessary or advisable for the
proper administration of the Plan, (b) construe, interpret and administer the
Plan and any instrument or agreement relating to, or Award (as defined below in
Section 4.2) made under, the Plan, and (c) make all other determinations and
take all other actions necessary or advisable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, each determination made
and each action taken by the Committee pursuant to the Plan or any instrument or
agreement relating to, or Award made under, the Plan shall be (x) within the
sole discretion of the Committee, (y) may be made at any time and (z) shall be
final, binding and conclusive for all purposes on all persons, including, but
not limited to, holders of Awards, and their legal representatives and
beneficiaries, and employees of the Company or of any "Affiliate" of the
Company. For purposes of the Plan and any instrument or agreement relating to,
or Award made under, the Plan, the term "Affiliate" shall mean any entity that,
directly or indirectly through one or more intermediaries, is controlled by the
Company and any entity in which the Company has a significant equity interest,
in each case as determined by the Committee in its sole discretion.
3.3 Delegation. The Committee may delegate its powers and duties under the
Plan to one or more officers of the Company or any Affiliate or a committee of
such officers, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion; provided, however, that the
Committee shall not delegate its power to amend the Plan as provided in Section
XI hereof and shall not delegate its power to make determinations regarding
officers or directors of the Company or any Affiliate who are subject to Section
16 of the Exchange Act.
SECTION IV. ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. The Plan is unfunded and is maintained by the Company for
a select group of management or highly compensated employees. In order to be
eligible to participate in the Plan, an employee of the Company or of its
Affiliates must be selected by the Committee. In determining the employees who
will participate in the Plan, the Committee may take into account the nature of
the services rendered by the respective employees, their present and potential
contributions to the success of the Company and such other factors as the
Committee, in its sole discretion, shall deem relevant. A director of the
Company or of an Affiliate who is not also an employee of the Company or an
Affiliate shall not be eligible to participate in the Plan.
4.2 Participation. The Committee shall determine the employees to be
granted an award opportunity (the "Award"), the amount of each Award, the time
or times when Awards will be made, the period of time over which such Awards are
intended to be earned, and all other terms and conditions of each Award. The
provisions of the Awards need not be
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the same with respect to any recipient of an Award (the "Participant") or with
respect to different Participants. The Committee's decision to approve an Award
to an employee in any year shall not require the Committee to approve a similar
Award or any Award at all to that employee or any other employee or person at
any future date. The Company and the Committee shall not have any obligation for
uniformity of treatment of any person, including, but not limited to,
Participants and their legal representatives and beneficiaries and employees of
the Company or of any Affiliate of the Company.
4.3 Award Agreement. Any employee selected for participation by the
Committee shall, as a condition of participation, execute and return to the
Committee a written agreement setting forth the terms and conditions of the
Award (the "Award Agreement"). A separate Award Agreement will be entered into
between the Company and each Participant for each Award.
4.4 Employment. In the absence of any specific agreement to the contrary,
no Award to a Participant under the Plan shall affect any right of the Company,
or of any Affiliate of the Company, to terminate, with or without cause, the
Participant's employment at any time.
SECTION V. SHARES SUBJECT TO THE PLAN
5.1 Shares Subject to Plan. Subject to adjustment as provided in Section
5.3 hereof, the maximum number of shares or units equivalent to shares with
respect to which Awards may be granted under the Plan shall not exceed in the
aggregate 750,000 shares (the "Shares") of the Company's Common Stock, $1.00 par
value (the "Common Stock"). The payment of cash dividends or dividend
equivalents in conjunction with an Award shall not be counted against the Shares
available for grant. Shares to be issued pursuant to the Plan shall be made
available from treasury, from authorized but unissued shares of Common Stock, or
from shares reacquired by the Company, including shares purchased in the open
market. For purposes of this Section V, the maximum number of Shares to which an
Award relates shall be counted on the date such Award was made against the
aggregate number of Shares available for grant under the Plan.
5.2 Reacquired Shares. If any Shares to which an Award relates are
forfeited, or if an Award is otherwise canceled or terminated or expires without
delivery of the maximum number of Shares (or cash for the maximum number of
Shares) to which such Award relates, then the number of Shares with respect to
such Award, to the extent of any such forfeiture, cancellation, termination or
expiration, shall again be available for grant under the Plan.
5.3 Adjustments Upon Chances In Capitalization. In the event that the
Committee shall determine that any dividend or other distribution (whether in
the form of cash, Common Stock, other securities or other property), stock
split, reverse stock split, reorganization, recapitalization, merger,
consolidation, combination, split-up, spin-off,
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repurchase or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee may make such adjustments, if any, as it may deem appropriate in the
aggregate number of and class of Shares (or other securities or other property)
issuable pursuant to Section 5.1 and pursuant to any outstanding Award under the
Plan. The Committee's determination of such adjustments shall be final, binding
and conclusive.
SECTION VI. AWARDS
6.1 General. The Committee shall determine the Award or Awards to be made
to each Participant, and each Award shall be subject to the terms and conditions
of the Plan and the applicable Award Agreement. An Award may be made in the form
of Shares or in the form of units equivalent to Shares (the "Stock Units").
Awards may be granted singly or in combination, or in addition to, in tandem
with or in substitution for any grants or rights under any employee or
compensation plan of the Company or of any Affiliate. All or part of an Award
may be subject to conditions and forfeiture provisions established by the
Committee, and set forth in the Award Agreement, which may include, but are not
limited to, continuous service with the Company or an Affiliate, achievement of
specific business objectives, and other measurement of individual, business unit
or Company performance.
6.2 Award of Shares. If an Award is granted in the form of Shares,
certificates representing the Shares shall be issued in the name of the
Participant, but may be retained in the custody of the Company and may be
legended to indicate restriction on transferability ("Restricted Stock") until
the Participant has met designated performance and/or length of employment
requirements, if any, and the determination of the number of Shares, if any,
that are to be forfeited pursuant to the terms of the Award is made. Until such
time as all restrictions are removed, Restricted Stock shall not be
transferable.
6.3 Award of Stock Units. If an Award is granted in the form of Stock
Units, no certificates shall be issued with respect to such Stock Units, but the
Company shall maintain a bookkeeping account in the name of the Participant to
which the Stock Units shall relate. Each Stock Unit shall represent the right to
receive a payment of one Share, or cash of equivalent value to the "fair market
value" of the Company's Common Stock at the time payment is made, or a
continuing Stock Unit, or other Awards, or a combination thereof, with such
restrictions and conditions as the Committee may determine in its sole
discretion, including, but not limited to, the restriction of such Shares as
Restricted Stock. For purposes of the Plan, "fair market value" shall be
determined by such methods or procedures as may be established from time to time
by the Committee in its sole discretion.
6.4 Voting Rights, Dividends and Dividend Equivalents. The Committee, in
its sole discretion, may provide that Awards of Shares may contain voting rights
and may earn
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dividends and that any Award may earn dividend equivalents. Such dividends or
dividend equivalents may be paid currently or may be credited to an account
established by the Committee under the Plan in the name of the Participant. Any
crediting of dividend or dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish in its sole
discretion, including reinvestment in additional shares or share equivalents.
6.5 Payment of Awards. Payment of Awards may be made at such times, with
such restrictions and conditions, and in such forms (cash, stock, including
Restricted Stock, Stock Units, other Awards, or combinations thereof) as the
Committee in its sole discretion may determine at the time of grant of the
Awards.
6.6 Securities Matters. No Shares shall be issued under the Plan prior to
such time as counsel to the Company shall have determined that the issuance and
delivery of such Shares will not violate any federal or state securities or
other laws. Participants may be required by the Company, as a condition to the
grant of an Award or the issuance of Shares under the Plan, to agree in writing
that all Shares to be acquired pursuant to the Plan shall be held for his or her
own account without a view to any further distribution thereof, that the
certificates for the Shares shall bear an appropriate legend to that effect, and
that such Shares will not be transferred or disposed of except in compliance
with applicable federal and state laws. The Company may, in its sole discretion,
defer the effectiveness of any Award or the payment of any Award under the Plan
in order to allow the issuance of Shares pursuant thereto to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws. The Company shall be under no
obligation to effect the registration pursuant to the Securities Act of 1933, as
amended, of any Shares to be issued under the Plan or to effect similar
compliance under any state law. If Shares are traded on a securities exchange,
the Company shall not be required to deliver to the Participant certificates
representing any Shares unless and until such Shares have been admitted for
trading on such securities exchange.
6.7 Qualified Performance -Based Compensation. From time to time, the
Committee may designate an Award granted pursuant to the Plan as an award of
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code (hereinafter referred to as a "Performance-Based Award(s)").
Notwithstanding any other provision of the Plan to the contrary, the following
additional requirements shall apply to all Performance-Based Awards made to any
Participant under the Plan:
(a) Any Performance-Based Award shall be null and void and have no
effect whatsoever unless these amendments to the Plan, to the extent
required by the Code, shall have been approved by the stockholders of the
Company at the 1997 annual meeting of stockholders.
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(b) For purposes of Section 162(m) of the Code, the only employees
eligible to receive Performance-Based Awards shall be the employee's
identified in Section 4.1 hereof.
(c) The right to obtain Restricted Stock or the right to have a Stock
Unit become payable in any fashion pursuant to a Performance-Based Award
shall be determined solely on account of the attainment of one or more
preestablished, objective performance goals for a performance period
selected by the Committee at the time of the grant of the Performance-Based
Award. Such goals shall be based solely on one or more of the following
business criteria, which may apply to the individual in question, an
identifiable business unit or the Company as a whole: stock price, market
share, sales, earnings per share, profitability targets as measured by
return ratios, cumulative total return to shareholders, consolidated
pre-tax earnings, net revenues, net earnings, operating income, earnings
before interest and taxes, and cash flow, for the applicable performance
period based on absolute Company or business unit performance and/or
performance as compared to a pre-selected peer group of companies or
external financial index, all as computed in accordance with generally
accepted accounting principles as in effect from time to time and as
applied by the Company in the preparation of its financial statements and
subject to such other special rules and conditions as the Committee may
establish at any time ending on or before the 90th day of the applicable
performance period. The foregoing shall constitute the sole business
criteria upon which the performance goals under this Plan shall be based.
(d) The maximum number of Shares, whether or not in the form of
Restricted Stock, which may be issued to any Participant pursuant to any
Performance-Based Award in any calendar year period beginning with the
period commencing January 1, 1997, shall not exceed 50,000 shares (subject
to adjustment as provided for in Section 5.3).
(e) Not later than 90 days after the beginning of each performance
period selected by the Committee for a Performance-Based Award, it shall:
(i) designate all Participants for such performance period; and
(ii) establish the objective performance factors for each
Participant for that performance period on the basis of one or more of
the business criteria set forth herein.
(f) Following the close of each performance period and prior to
payment of any amount to any Participant under a Performance-Based Award,
the Committee must certify in writing as to the attainment of all factors
(including the performance factors for a Participant) upon which any
payments to a Participant for that performance period are to be based.
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(g) Each of the foregoing provisions and all of the other terms and
conditions of the Plan as it applies to any Performance-Based Award shall
be interpreted in such a fashion so as to qualify all compensation paid
thereunder as "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code.
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SECTION VII. TERMINATION OF EMPLOYMENT
Each Award Agreement shall include provisions governing the disposition of
an Award in the event of the retirement, disability, death or other termination
of a Participant's employment with the Company or an Affiliate.
SECTION VIII. CHANGE IN CONTROL
Notwithstanding any other provision in the Plan to the contrary, at the
time of the grant of an Award, the Committee may determine to include provisions
in such Award providing that upon the occurrence of a "Change in Control," (i)
all outstanding Awards (including Restricted Stock and Stock Units) shall
immediately become fully vested (which, in the case of any Award which is
subject to the achievement of designated performance objectives during a
designated performance period, shall mean vested as if all such performance
objectives had been achieved at the 100% award level at the end of such
performance period) and (ii) all restrictions, conditions and limitations on all
Awards (including Restricted Stock and Stock Units) which are outstanding at the
time of such "Change in Control" or become outstanding by virtue of the
operation of clause (i) hereof shall immediately lapse, provided that the
provisions of clauses (i) and (ii) may be subject to such restrictions,
conditions and limitations as the Committee may determine at the time of grant
of the Award as set forth in the Award Agreement relating thereto.
For purposes of the Plan, "Change in Control" shall mean any of the
following events:
1. The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control; (A) any acquisition directly from the Company or (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or
2. The consummation of any merger or other business combination of the
Company, sale or lease of the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction immediately following
which the shareholders of the Company and any trustee or fiduciary of any
Company employee benefit plan immediately prior to the Transaction own at least
60% of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the purchaser
or lessee of the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
8
<PAGE>
3. Within any 24 month period, the persons who were directors immediately
before the beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death) to constitute at least a majority of the Board of
Directors of the Company or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the beginning
of such period shall be deemed to be an Incumbent Director if such director was
elected to the Board of Directors of the Company by, or on the recommendation of
or with the approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change of Control or engage in
a proxy or other control contest); or
4. Such other event or transaction as the Board of Directors of the Company
shall determine constitutes a Change of Control.
SECTION IX. NON-TRANSFERABILITY
Except as otherwise determined by the Committee or set forth in the
applicable Award Agreement, no Restricted Stock or Stock Unit, and no right
under such Restricted Stock or Stock Unit, shall be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of during the time in which the
requirement of continued employment or attainment of performance objectives has
not been achieved. Each right under any Award shall be exercisable during the
Participant's lifetime only by the Participant or, if permissible under
applicable law, by the Participant's legal representatives.
SECTION X. TAXES
In order to comply with all applicable federal or state income, social
security, payroll, withholding or other tax laws or regulations, the Company may
take such action, and may require a Participant to take such action, as it deems
appropriate to ensure that all applicable federal or state income, social
security, payroll, withholding or other taxes, which are the sole and absolute
responsibility of the Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or part of the
federal and state taxes to be withheld or collected upon receipt or payment of
(or the lapse of restrictions relating to) an Award, the Committee, in its sole
discretion and subject to such additional terms and conditions as it may adopt,
may permit the Participant to satisfy such tax obligation by (a) electing to
have the Company withhold a portion of the shares of Common Stock otherwise to
be delivered upon receipt or payment of (or the lapse of restrictions relating
to) such Award with a fair market value equal to the amount of such taxes or (b)
delivering to the Company shares of Common Stock other than the shares issuable
upon receipt or payment of (or the lapse of restrictions relating to) such Award
with a fair market value equal to the amount of such taxes.
9
<PAGE>
SECTION XI. AMENDMENT AND TERMINATION
11.1 Term of Plan. Unless the Plan shall have been discontinued or
terminated as provided in Section 11.2 hereof, the Plan shall terminate on
February 11, 2002. No Awards may be granted after such termination, but
termination of the Plan shall not alter or impair any rights or obligations
under any Award theretofore granted, without the consent of the Participant or
holder or beneficiary thereof, except as otherwise provided in the Plan or the
Award Agreement.
11.2 Amendments to Plan. Except to the extent prohibited by applicable law
and unless otherwise expressly provided in the Plan or an Award Agreement, the
Committee may amend, alter, suspend, discontinue or terminate the Plan;
provided, however, that notwithstanding any other provision of the Plan or any
Award Agreement, without the approval of the stockholders of the Company, no
such amendment, alteration, suspension, discontinuation or termination shall be
made that, absent such approval:
(a) would cause Rule 16b-3 to become unavailable with respect to the
Plan; or
(b) would violate the rules or regulations of any securities exchange
that are applicable to the Company.
11.3 Amendments to Awards. Except to the extent prohibited by applicable
law and unless otherwise expressly provided in the Plan or an Award Agreement,
the Committee may waive any condition of, or rights of the Company under, any
outstanding Award, prospectively or retroactively. The Committee may not amend,
alter, suspend, discontinue or terminate any outstanding Award, prospectively or
retroactively, without the consent of the Participant or holder or beneficiary
thereof, except as otherwise provided in the Plan or the Award Agreement.
11.4 Correction of Defects, Omissions and Inconsistencies. Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
the Plan or an Award Agreement, the Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan, any Award or any Award
Agreement in the manner and to the extent it shall deem desirable to carry the
Plan into effect.
SECTION XII. MISCELLANEOUS
12.1 Governing Law. The Plan and any Award Agreement shall be governed by
and construed in accordance with the internal laws, and not the laws of
conflicts, of the State of Minnesota.
12.2 Severability. If any provision of the Plan, any Award or any Award
Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction or would disqualify the Plan, any Award or any Award Agreement
under any law deemed
10
<PAGE>
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose
or intent of the Plan, the Award or the Award Agreement, such provision shall be
stricken as to such jurisdiction, and the remainder of the Plan, any such Award
or any such Award Agreement shall remain in full force and effect.
12.3 No Trust or Fund Created. Neither the Plan nor any Award or Award
Agreement shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company or of any Affiliate.
12.4 Headings. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
Amended 4/9/97
Amended 7/1/98
<PAGE>
EXHIBIT (10)c
AMENDMENTS TO
SUPERVALU INC.
EXECUTIVE DEFERRED COMPENSATION PLANS
The nonqualified deferred compensation plans maintained by SUPERVALU INC.
and known as the SUPERVALU Deferred Compensation Plan, as amended, and the
SUPERVALU INC. Executive Deferred Compensation Plan II, as amended (collectively
the "Plans") shall each be amended to provide for the following:
1. Section 2.1(f) of each of the Plans shall be amended in its entirety to
read as follows:
"(f) "Change of Control" means:
(i) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (A) the then outstanding shares of common stock of
the Company or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors; provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control; (A) any acquisition directly from the Company or
(B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled
by the Company; or
(ii) the consummation of any merger or other business combination of the
Company, sale or lease of the Company's assets or combination of the
foregoing transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately
prior to the Transaction own at least 60% of the voting power,
directly or indirectly, of (A) the surviving corporation in any such
merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions;
or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to
constitute at least a majority of the Board or the board of directors
of a successor to the Company. For this purpose, any director who was
not a director at the beginning of such period shall be deemed to be
an Incumbent Director if such director was elected to the Board by, or
on the recommendation of or with the approval of, at least
three-fourths of the directors who then qualified as
1
<PAGE>
Incumbent Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of Control or
engage in a proxy or other control contest); or
(iv) such other event or transaction as the Board shall determine
constitutes a Change of Control."
2. Save and except as herein expressly amended, each of the Plans shall
continue in full force and effect.
2
<PAGE>
1
EXHIBIT (10)d
AMENDED AND RESTATED
SUPERVALU INC. GRANTOR TRUST
This Trust Agreement is made as of this 3rd day of August, 1998, by and
between SUPERVALU INC., a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A. (the "Trustee"). This Trust Agreement provides for the
establishment of a trust to be known as the Amended and Restated SUPERVALU INC.
Grantor Trust (hereinafter called the "Trust") to provide a source for payments
required to be made under the contracts, agreements and plans listed on Exhibit
A as amended from time to time (the "Agreements") between the Company and
certain of its key management personnel or members of its Board of Directors who
participate in, or are signatories to, the Agreements (the "Participants"). This
Trust Agreement is intended to amend and restate the Super Value Stores, Inc.
Agreements and Plans Trust.
WITNESSETH:
WHEREAS, the Company wishes to establish the Trust and to transfer to the
Trust certain assets to be held therein, subject to the claims of the Company's
creditors in the event of the Company's insolvency or bankruptcy, until paid to
the Participants in such manner and at such time as specified in this Trust
Agreement; and
WHEREAS, it is the intention of the Company to make contributions in
addition to the Initial Contribution (as defined below) (such additional
contributions are referred to herein as
<PAGE>
2
the "Additional Contributions" and, together with the Initial Contributions,
collectively known as "Contributions") to the Trust upon or in anticipation of
the occurrence of a Change of Control of the Company;
WHEREAS, Super Valu Stores, Inc., the Company's predecessor, and Norwest
Bank Minnesota, N.A., entered into a trust agreement entitled the Super Valu
Stores, Inc. Agreement and Plans Trust (the "Prior Trust") as of November 4,
1988;
WHEREAS, Section 10 of the Prior Trust permitted the Prior Trust to be
amended prior to the time any "Additional Contribution" (as defined therein) was
made, and no such Additional Contribution has heretofore been made;
NOW, THEREFORE, the parties hereto do hereby amend and restate the Prior
Trust and agree that the Trust shall be comprised, held and disposed of as
follows:
Section 1. Trust Fund
(a) Subject to the claims of its creditors as set forth in Section 5, the
Company hereby deposits with the Trustee in trust One Hundred Dollars ($100.00)
(the "Initial Contribution") which shall become the initial principal of the
Trust to be held, administered and disposed of by the Trustee as provided in
this Trust Agreement. The Trustee shall have no obligation to invest the Initial
Contribution in an interest-bearing account.
(b) The Trust is intended to be a grantor trust, within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed
<PAGE>
3
accordingly. The purpose of the Trust is to assure that the Company's
obligations to the Participants pursuant to the Agreements are fulfilled. The
Trust is not designed to qualify under Section 401(a) of the Code.
(c) The principal of the Trust, and any earnings thereon (such principal,
together with any earnings thereon, reduced by any losses and distributions from
the Trust and any other reductions thereof, is sometimes referred to herein as
the "Trust Assets"), shall be held separate and apart from other funds of the
Company and shall be used exclusively for the uses and purposes of Participants
and general creditors as herein set forth. The Participants and their
beneficiaries shall not have any preferred claim on, or any beneficial ownership
interest in, any of the Trust Assets, and all rights created under the
Agreements and this Trust Agreement shall be mere unsecured contractual rights
of the Participants and their beneficiaries against the Company. Any assets held
by the Trust will be subject to the claims of the Company's general creditors
under federal and state law in the event the Company is "Insolvent", as defined
in Section 6(a).
(d) Subject to the third sentence of this paragraph, the Trustee shall have
full discretion in and sole responsibility for investment, management and
control of the Trust Assets. The nature of this Trust is such that the Trustee
should only make either (i) short-term investments with a stated maturity of
twelve months or less from the date of purchase by the Trustee or (ii)
investments in whole life insurance policies. The Trust
<PAGE>
4
Assets shall only be invested in whole life insurance policies, in obligations
of or guaranteed by the United States of America, in commercial paper
obligations receiving the highest rating from either Moody's Investors Service,
Inc. or Standard & Poor's Corporation or a similar rating service, or in
certificates of deposit, bank repurchase agreements or bankers acceptances
(including those of the Trustee) of commercial banks with capital exceeding
$1,000,000,000, the securities of which or the securities of the holding company
of which are rated in the highest category by a nationally-recognized credit
agency ("Permitted Investments") or in money-market funds which are invested
solely in Permitted Investments.
(e) The advisor to the Trust (the "Consulting Firm") shall be Hewitt
Associates, or such successor firm of consulting actuaries as the Company shall
select prior to a Change of Control, or after a Change of Control, such
successor firm of consulting actuaries as the Trustee shall select. It is not
intended that the Consulting Firm act in a fiduciary capacity under the
Agreements or the Trust.
Section 2. Contributions
(a) The Company may make such Contributions to the Trust as the Board of
Directors of the Company deems appropriate from time to time.
(b) As soon as practicable following a Change of Control (as defined in
Section 3(a) hereof), the Consulting Firm shall calculate the maximum aggregate
amount due (or potentially due) in the event of a termination of employment or
otherwise,
<PAGE>
5
pursuant to each Agreement without regard to any reduction required under such
Agreements to avoid any such payment being nondeductible to the Company pursuant
to Section 280G of the Code (the aggregate of such amounts for all the
Agreements is hereinafter referred to as the "Maximum Amount Payable"). The
Consulting Firm shall promptly furnish such calculation to the Company and the
Company shall have the obligation to make Additional Contributions to the Trust,
and shall make Additional Contributions to the Trust, within three business days
of the receipt of such calculation, in an amount equal to the excess (the
"Excess"), if any, of the Maximum Amount Payable, plus an amount equal to the
estimated total Trust expenses over the life of the Trust (as estimated by the
Trustee), over the then fair market value of the Trust Assets; provided,
however, that, if a letter of credit shall have been provided to the Trust for
all or any part of such amount, the Company may direct the Trustee to draw down
such letter of credit in any amount and may credit such amounts drawn down
against amounts then due as Additional Contributions or as estimated expenses.
If at any later time following a Change of Control a valuation of the Trust
Assets occurs pursuant to this Trust Agreement and it is determined by the
Consulting Firm that an Excess shall exist, the Company shall promptly
contribute such amount to the Trust as is necessary to eliminate the Excess,
provided that, if a letter of credit shall have been provided to the Trust for
all or any part of such amount, the Company may direct the Trustee to draw down
such
<PAGE>
6
letter of credit held by the Trust in any amount and may credit such amount
drawn down against the amount so to be contributed.
(c) Anything contained herein in Section 2(b) hereof to the contrary
notwithstanding, in the event of a Potential Change of Control (as defined in
Section 3(b) hereof), the Company shall have the obligation to make additional
contributions to the Trust in an amount equal to the Excess or direct the
Trustee to draw down a letter of credit held by the Trust in such amount. If a
Change of Control shall not have occurred within ninety (90) days of a
Contribution made pursuant to this Section 2(c) and the Board of Directors
adopts a resolution to the effect that, for purposes of this Trust Agreement, a
Change of Control is not imminent, any amounts contributed to the Trust pursuant
to this Section 2(c), together with any earnings thereon, shall be paid by the
Trustee to the Company.
(d) The Company shall make all required Contributions to the Trust in cash,
except as provided in Section 2(g) hereof. Alternatively, the Company may at any
time provide the Trustee with an irrevocable and unconditional letter of credit
sufficient for the Trustee to draw down an amount equal to all or any part of
the required Contributions. Following a Change of Control, in the event such a
letter of credit has been provided, then the Trust may draw down on such letter
of credit at such times as the Trustee deems such a drawdown necessary to meet
the Company's obligations pursuant to the Agreements. All Contributions so
received (including any cash received on the drawdown of a Letter
<PAGE>
7
of Credit), together with the income therefrom and any increment thereon, shall
be held, managed and administered by the Trustee as a single commingled Trust
pursuant to the terms of this Trust without distinction between principal and
income. Neither the Trustee nor the Consulting Firm shall have any duty to
require any Contributions to be made to the Trust by the Company or to determine
that a Change of Control or Potential Change of Control has occurred.
(e) Anything in Section 2 to the contrary notwithstanding, the Trustee
shall return to the Company, as soon as feasible following the close of each
calendar year, the excess, if any, of (i) the then aggregate fair market value
of the Trust Assets over (ii) 150% of the Maximum Amount Payable, as determined
by the Consulting Firm.
(f) The Company may at any time or from time to time make additional
deposits of cash (or property as provided in Section 2(g) below) in the Trust
with the Trustee to augment the Trust Assets to be held, administered and
disposed of by the Trustee as provided in this Trust Agreement.
(g) In the event that prior to a Change of Control any of the Agreements is
funded by the Company in whole or in part through contracts of insurance which
are maintained by the Company expressly for the purpose of funding such
Agreement and of which the Company is the named beneficiary, then, in lieu of an
amount of cash equal to the maximum aggregate amount due pursuant to such
Agreement and funded by such contract (as calculated by the Consulting Firm
without regard to any reduction
<PAGE>
8
required under such Agreements to avoid any such payment being nondeductible to
the Company pursuant to Section 280G of the Code) the Company may transfer and
contribute such contracts to the Trust (if permitted to do so under the terms of
such contracts, the Company's other contracts and agreements, and applicable
law), along with an amount in cash sufficient (as determined by the Consulting
Firm) to pay all premiums and charges then owing or reasonably expected to
become due by the Company or the Trust in respect of such contracts. In the
event any such contract shall lapse, expire or terminate, or the amount of cash
contributed to pay future premiums on any contract shall be insufficient, the
Company shall promptly contribute an additional amount in cash equal to the
maximum aggregate amount due pursuant to the Agreement funded by such contract
(as calculated by the Consulting Firm without regard to any reduction required
under such Agreements to avoid any such payment being nondeductible to the
Company pursuant to Section 280G of the Code) reduced by contribution previously
made in respect of such Agreement (other than for the payment of premiums on
such contract).
Section 3. Change of Control
(a) For purposes of this Trust Agreement, a "Change of Control" shall mean:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of common stock of the Company or
(B) the combined voting power of the then outstanding voting securities of
the Company entitled to
<PAGE>
9
vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not
constitute a Change of Control; (A) any acquisition directly from the
Company or (B) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled
by the Company; or
(ii) the consummation of any merger or other business combination of
the Company, sale or lease of the Company's assets or combination of the
foregoing transactions (the "Transactions"), other than a Transaction
immediately following which the shareholders of the Company and any trustee
or fiduciary of any Company employee benefit plan immediately prior to the
Transaction own at least 60% of the voting power, directly or indirectly,
of (A) the surviving corporation in any such merger or other business
combination; (B) the purchaser or lessee of the Company's assets; or (C)
both the surviving corporation and the purchaser or lessee in the event of
any combination of Transactions;
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a
majority of the Board or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest); or
(iv) such other event or transaction as the Board shall determine
constitutes a Change of Control.
(b) For purposes of this Agreement, a Potential Change of Control shall be
deemed to have occurred if (i) any third person commences a tender or exchange
offer for 20% or more of the then outstanding shares of common stock or combined
voting power of the Company's outstanding voting securities (other than a tender
or exchange offer which, if consummated, would not result in a Change of
Control); (ii) the Company enters into an
<PAGE>
10
agreement, the consummation of which would result in the occurrence of a Change
of Control; (iii) any person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change of Control; or (iv) the Board of Directors adopts a
resolution to the effect that, for purposes of this Trust Agreement, a Change of
Control is imminent.
(c) The Company shall have a duty to inform the Trustee whenever, to the
knowledge of the Company, a Change of Control or Potential Change of Control has
occurred. If any two Participants notify the Trustee in writing that a Change of
Control has occurred then, unless, in the opinion of nationally recognized
counsel to the Company (which opinion may be based on representations of fact as
long as counsel does not know that such representations are untrue) such a
Change of Control has not occurred, a Change of Control will be deemed to have
occurred for purposes of this Trust Agreement. The Trustee shall notify the
Company promptly upon receipt of any notification from a Participant that a
Change of Control has occurred.
Section 4. Accounting by the Trustee and Consulting Firm
(a) The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
done, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. Within sixty (60) days following the close of each
calendar year and within sixty (60) days after the removal
<PAGE>
11
or resignation of the Trustee, the Trustee shall deliver to the Company and the
Consulting Firm a written account of its administration of the Trust during such
year or during the period from the close of the last preceding year to the date
of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), showing all cash, securities and other property held in the Trust
at the end of such year or as of the date of such removal or resignation, as the
case may be, and the book and fair market value of any such asset. The
Consulting Firm shall send a copy of such written account to each Participant at
the address provided by the Company.
(b) As soon as practicable following a Change of Control of the Company,
the Consulting Firm shall establish and maintain a memorandum account for each
Participant and with respect to each Agreement applicable to the Participant or
with respect to which the Participant is a participant (the "Participant's
Account"). As soon as practicable following a Change of Control, the Consulting
Firm shall calculate the amount which would be due to each Participant pursuant
to each Agreement applicable to such Participant or pursuant to which the
Participant is a participant upon satisfaction of the conditions (including any
termination of employment triggering severance or other benefits under an
Agreement) under such Agreement which
<PAGE>
12
give rise to the obligation of the Company to pay such amount to the Participant
(the "Agreement Payments"). The Consulting Firm shall credit each Participant's
Account with the Agreement Payments and shall debit the Participant's Account
with any amounts paid to the Participant with respect to an Agreement by the
Company or the Trustee.
(c) The Company shall furnish the Consulting Firm with copies of each
Agreement and any and all amendments thereto. The Company will promptly provide
the Consulting Firm with a copy of any notice of termination required pursuant
to the terms of any of the Agreements with respect to any Participant and will
also promptly provide the Consulting Firm with any and all additional
information the Consulting Firm reasonably requests or the Company believes
would be useful to the Consulting Firm in order to enable the Consulting Firm to
determine the amount of Agreement Payments with respect to each Participant and
to effect such payment and will promptly update such information as it changes.
The Company will use its best efforts to cause each Participant to provide the
Consulting Firm with all information that it may reasonably request in order to
determine the amount of Agreement Payments with respect to the Participant. The
Trustee shall notify the Consulting Firm of any payment made from the Trust to
the Participant or the Participant's beneficiaries pursuant to the terms of an
Agreement and the Company shall notify the Consulting Firm of any other payment
pursuant to the terms of an Agreement, in each case, so that the Consulting Firm
may debit the Participant's Account.
<PAGE>
13
(d) All accounts, books and records maintained pursuant to Section 4 shall
be opened to inspection and audit at all reasonable times by the Company and on
an annual basis, after receipt of the written account described in the next
sentence, by the Participants; provided, however, that no Participant shall have
access to information about another Participant's Account other than in the
normal course of performing his duties as an employee of the Company.
(e) The fair market value of the Trust Assets shall be determined by the
Trustee whenever required pursuant to this Trust Agreement, but in any event not
less than quarterly. The Trustee may base such determination upon such sources
of information as it may deem reliable including, but not limited to,
information reported in (i) newspapers of general circulation, (ii) standard
financial periodicals or publications, (iii) statistical and valuation services,
(iv) the records of securities exchanges or brokerage firms deemed by the
Trustee to be reliable, or any combination thereof. The Trustee shall promptly
inform the Consulting Firm of any such valuation.
Section 5. Payments to the Participants
(a) The Trustee shall make payments to the Participants from the Trust
Assets, if and to the extent such Trust Assets are available for distribution,
in accordance with the provisions of this Trust Agreement, provided that the
Company is not Insolvent (as defined in Section 6(a)) at the time any such
payment is required to be made.
<PAGE>
14
(b) Subject to Section 5(a) hereof, upon receipt of a "Notice of
Qualification" (as defined below) with respect to a Participant (or by the
Participant's beneficiary or beneficiaries), the Consulting Firm shall, within
five business days of such demand, direct the Trustee to pay the Participant (or
such beneficiary or beneficiaries) an amount, in cash, equal to the lesser of
the amount the Consulting Firm has determined to be due and payable to the
Participant or the then credit balance in the Participant's Account; provided,
however, that if the aggregate of the then credit balances in the Participants'
Accounts exceeds the then fair market value of the Trust Assets, then the
Consulting Firm shall direct the Trustee to pay to the Participant (or the
Participant's beneficiary or beneficiaries) the lesser of the amount the
Consulting Firm has determined to be due and payable to the Participant or such
portion of the credit balance in the Participant's Account which is equal to (a)
the full credit balance in the Participant's Account multiplied by (b) a
fraction (i) the numerator of which is the then fair market value of the Trust
Assets and (ii) the denominator of which is the aggregate of the then credit
balances in the Participants' Accounts.
(c) Whenever the Consulting Firm notifies the Trustee that it has received
a Notice of Qualification from a Participant or beneficiary, the Trustee shall
supply the Consulting Firm with the current fair market value of the Trust
Assets within five business days so that the Consulting Firm may make the
determination required hereunder. The Trustee shall pay the
<PAGE>
15
Participant (or the Participant's beneficiary or beneficiaries) the amount set
forth in the notice from the Consulting Firm within ten calendar days of
receiving notice from the Consulting Firm.
(d) For the purposes of this Trust Agreement, a "Notice of Qualification"
shall be a written statement by the Participant or the Participant's beneficiary
or beneficiaries that states that pursuant to the terms of the Agreement
applicable to such Participant or pursuant to which the Participant is a
participant, the Participant or the Participant's beneficiary or beneficiaries
is entitled to payment thereunder. The Consulting Firm shall make a reasonable
good faith determination as to whether the conclusion of the Participant or the
Participant's beneficiary or beneficiaries is correct and whether any payment so
demanded is proper and correct.
(e) Anything in this Trust Agreement to the contrary notwithstanding, all
payments pursuant to this Section 5 may be made without the approval or
direction of the Company, shall be made despite any direction to the contrary by
the Company and shall be made upon the direction of the Consulting Firm.
(f) If the Trust Assets are not sufficient to make all payments to the
Participants required to be made pursuant to the terms of the Agreements, the
Company shall pay to each Participant the balance of each such payment as it
falls due. If such payments are not made by the Company, and the Trust later
contains sufficient Trust Assets to make such payments, they
<PAGE>
16
shall be made from the Trust Assets, together with interest at the rate
determined pursuant to Section 1274(d) of the Code (the "Applicable Rate"),
subject to the requirements of Sections 5(a) and 5(b) hereof.
Section 6. Trustee Responsibility Regarding Payments
to Trust Beneficiary When Company Insolvent
(a) The Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they become due, or
(ii) the Company is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code or any similar law of any state.
(b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of the
Company under federal and state law as hereinafter set forth. The Board and the
chief executive officer of the Company shall have the duty to inform the Trustee
in writing of the Company's Insolvency. If a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall independently determine, within thirty (30) days
after receipt of such notice, whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payments to the Participants, shall
hold the Trust Assets for the potential benefit of the Company's general
creditors, and shall resume payments to the Participants in accordance with
Section 5 of this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent, if the
<PAGE>
17
Trustee initially determines the Company to be Insolvent). If the Trustee, after
the expiration of such thirty (30) days, in good faith and with the advice of
such advisors as may be retained pursuant to Section 7 hereof, is unable to
determine whether the Company is Insolvent, the Trustee (i) shall so notify the
Company and the Consulting Firm in writing (and the Consulting Firm shall
promptly notify the Participants and their beneficiaries at the addresses
supplied by the Company) and any of the Trustee, the Company or any of the
Participants or any of their beneficiaries may apply to any court of competent
jurisdiction for a determination, for purposes of this Trust, as to whether or
not the Company is Insolvent, and (ii) the Trustee shall thereupon hold the
Trust Assets pursuant to the terms of this Trust Agreement pending the
determination of such court. Unless the Trustee has actual knowledge, or has
received notice from the Company or a person claiming to be a creditor alleging
that the Company is Insolvent, the Trustee shall have no duty to inquire whether
the Company is Insolvent. The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a determination
concerning the Company's solvency. Nothing in this Trust Agreement shall in any
way diminish any rights of a Participant to pursue his rights as a general
creditor of the Company with respect to the Agreements or otherwise.
(c) If the Trustee discontinues payments from the Trust to any Participant
or beneficiary pursuant to Section 6(b)
<PAGE>
18
and subsequently resumes such payments, the first payment following such
discontinuance shall, subject to Sections 5(a) and 5(b) hereof, include the
aggregate amount of all payments which would have been made to the Participant
or beneficiary (together with interest on the amount delayed at the Applicable
Rate) during the period of such discontinuance, less the aggregate amount of
payments made to each such Participant or beneficiary by the Company in lieu of
the payments provided for hereunder during any such period of discontinuance, as
certified to the Trustee by the Consulting Firm.
Section 7. Responsibility of Trustee and the Consulting Firm
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
Trustee shall incur no liability to anyone for any action taken pursuant to a
direction, request, or approval given by the Company or any Participant
contemplated by and complying with the terms of this Trust Agreement.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust Agreement, the Company hereby agrees to indemnify the
Trustee for its reasonable costs, expenses, and liability (including, without
limitation, reasonable attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments. If the Company does not
<PAGE>
19
pay such costs, expenses and liabilities in a reasonably timely manner, the
Trustee may obtain payment from the Trust Assets.
(c) The Trustee and the Consulting Firm may consult with legal counsel (who
may also be counsel for the Trustee or the Consulting Firm generally) with
respect to any of its duties or obligations hereunder, and shall be fully
protected in acting or refraining from acting in accordance with the advice of
such counsel.
(d) The Trustee may hire agents, accountants, and financial consultants.
(e) The Trustee is authorized and empowered:
(i) to purchase, hold, sell, invest and reinvest the assets of the
Trust, together with income therefrom;
(ii) to hold, manage and control all property at any time forming part
of the assets of the Trust;
(iii) to sell, convey, transfer, exchange and otherwise dispose of the
assets of the Trust from time to time in such manner, for such
consideration and upon such terms and conditions as it shall determine;
provided, however, that if the Trust holds an insurance policy, the Trustee
may only name the Trust as a beneficiary and can assign the policy only to
a successor trust;
(iv) to make payments from the Trust as provided hereunder; and
(v) to exercise all the further rights, powers, options and privileges
granted, provided for or vested in trustees generally under applicable
federal or State of Delaware law, as amended from time to time, it being
intended that, except as herein otherwise provided, the powers conferred
upon the Trustee herein shall not be construed as being in limitation of
any authority conferred by law, but shall be construed as in addition
thereto.
(f) The Trustee in any and all events is authorized and empowered to do all
other acts necessary or desirable for the proper administration of the assets of
the Trust, as though the
<PAGE>
20
absolute owner thereof, including, but not limited to, authorization and power:
(i) to cause any property of the Trust (including contracts of
insurance contributed under Section 2(g)) to be issued, held or registered
in the individual name of the Trustee, or in the name of its nominee, or in
such form that title will pass by delivery, provided, the records of the
Trustee shall indicate the true ownership of such property;
(ii) to employ such agents and counsel as may be reasonably necessary
in managing and protecting the Trust assets and to pay them reasonable
compensation; and
(iii) to settle, compromise or abandon with the consent of the Company
all claims and demands from other than the Participants or the Company in
favor of or against the assets of the Trust.
Section 8. Compensation and Expenses of Trustee and
Consulting Firm
The Trustee and the Consulting Firm shall each be entitled to receive such
reasonable compensation for their services as shall be agreed upon by the
Company and the Trustee or the Consulting Firm, as the case may be. The Trustee
and the Consulting Firm shall each also be entitled to receive their reasonable
expenses incurred with respect to the administration of the Trust, including
reasonable counsel fees and fees incurred by the Trustee and the Consulting Firm
pursuant to Sections 7(c) and 7(d) of this Trust Agreement. Such compensation
and expenses shall be payable by the Company and if not so paid, shall be paid
by the Trustee from the Trust Assets. In the event any Trust Assets are used
pursuant to the preceding sentence to pay compensation and expenses to the
Trustee or Consulting Firm, the Company shall promptly contribute to the Trust
any such amount or
<PAGE>
21
direct the Trustee to draw down on a letter of credit held by the Trust in such
amount.
Section 9. Resignation and Replacement of Trustee
(a) The Trustee may resign at any time during the term of this Trust by
delivering to the Company a written notice of the proposed resignation. The
Consulting Firm shall deliver a copy of any such notice to each Participant and
beneficiary at the address supplied by the Company. Such resignation shall take
effect upon the qualification of a successor Trustee and such successor Trustee
commencing to act as such.
(b) In the event that, prior to a Change of Control, the Trustee notifies
the Company of its intention to resign, in accordance with the foregoing
provisions of this Section 9, the Company shall appoint a successor Trustee
which shall be a bank or trust company with an equity capitalization of at least
$1 million. In the event that, following a Change of Control, the Trustee
notifies the Company of its intention to resign in accordance with the foregoing
provision of this Section 9, then the Trustee shall appoint a successor Trustee
(subject to the consent of 75% of the Participants in interest) which shall be a
bank or trust company with an equity capitalization of at least $1 million. The
Trustee hereunder shall thereupon deliver to the successor Trustee all property
of this Trust, together with such records and documents as may be reasonably
required to enable the successor Trustee to properly administer the Trust,
reserving
<PAGE>
22
such funds as it reasonably deems necessary to cover its unpaid bills and
expenses, and closing costs.
(c) Upon qualification of a successor Trustee, all right, title and
interest of the resigning Trustee in the Trust Assets and all rights and
privileges under this Trust Agreement theretofore vested in such resigning
Trustee shall vest in the successor Trustee where applicable, and thereupon all
future liability of said resigning Trustee shall terminate; provided, however,
that the Trustee shall execute, acknowledge and deliver all documents and
written instruments which are necessary to transfer and convey the right, title
and interest in the Trust Assets, and all rights and privileges to the successor
Trustee.
(d) Nothing in this Trust Agreement shall be interpreted as depriving the
Trustee or the Company of the right to have a judicial settlement of the
Trustee's accounts, and upon any proceeding for a judicial settlement of the
Trustee's accounts or for instructions the only necessary parties thereto will
be the Trustee and the Company.
Section 10. Amendment or Termination
(a) This Trust Agreement may be amended at any time prior to a Change of
Control by a written instrument executed by the Trustee and the Company.
Following a Change of Control, the Trust Agreement may not be amended without
the approval of each Participant having an interest in the Trust.
(b) This Trust shall be revocable by the Company prior to a Change of
Control and may be terminated by the Company prior
<PAGE>
23
thereto. Following a Change of Control, the Trust shall be irrevocable until
such time as the Trustee has received a certification (the "Certification") from
the Consulting Firm that all liabilities under all the Agreements have been
satisfied; provided, however, that, if any payment made from the Trust or to be
made pursuant to any of the Agreements is being contested or litigated, the
Trust shall remain irrevocable until such contest, litigation or dispute is
resolved. Following the later of (i) the Trustee's receipt of a Certification,
or (ii) the resolution of all contests, litigations or disputes discussed in the
prior sentence, this Trust shall terminate. Upon termination of the Trust any
assets remaining in the Trust shall be returned to the Company.
(c) At the termination of the Trust pursuant to Section 10(b), the Trustee
shall as soon as practicable, but in any event within ninety (90) days of the
date of such termination, transfer to the Company cash (and/or property) equal
to the value of the Trust Assets as of the termination date.
Section 11. Protection of the Trustee and the Consulting Firm
(a) The Company agrees, to the extent permitted by applicable law, to
indemnify the Trustee and the Consulting Firm and hold them harmless from and
against any claim or liability that may be asserted against them by reason of
their taking or refraining from taking any action under this Trust Agreement,
including, without limiting the generality of the foregoing, any claim brought
against the Trustee or the Consulting Firm by the
<PAGE>
24
Company, in any case, otherwise than on account of the Trustee's or the
Consulting Firm's own negligence or willful misconduct.
(b) The Trustee shall be fully protected in relying upon a certification of
an authorized representative of the Company or the Consulting Firm with respect
to any instruction, direction or approval of the Company or the Consulting Firm
until a subsequent certification is filed with the Trustee.
(c) The Trustee and the Consulting Firm shall each be fully protected in
acting upon any instrument, certificate, or paper believed by them to be genuine
and to be signed or presented by the proper person or persons, and neither the
Trustee nor the Consulting Firm shall be under any duty to make any
investigation or inquiry as to any statement contained in any such writing but
may accept the same as conclusive evidence of the Trust and accuracy of the
statements therein contained.
(d) The Trustee shall not be liable for the proper application of any part
of the Trust Fund if distributions are made in accordance with the terms of this
Trust Agreement and pursuant to information furnished to the Trustee by the
Consulting Firm. All persons dealing with the Trustee are released from inquiry
into the decision or authority of the Trustee and from seeing to the application
of any monies, securities or other property paid or delivered to the Trustee.
<PAGE>
25
Section 12. Communication
(a) Communications to the Company shall be addressed to the Company at:
SUPERVALU INC.
P.O. Box 990
Minneapolis, Minnesota 55440
Attention: General Counsel
(b) Communications to the Trustee shall be addressed to it at:
Norwest Bank Minnesota, N.A.
Eighth Street & Marquette Avenue
Minneapolis, Minnesota 55479-0001
Attention: Mr. Gary Porter
(c) Communications to the Consulting Firm shall be addressed to it at:
Hewitt Associates
100 Half Day Road
Lincolnshire, Illinois 60015
Section 13. Severability and Alienation
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating or in any
other way limiting the remaining provisions hereof.
(b) The rights, benefits and payments of a Participant payable from the
Trust Assets may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process except as required by law. Any attempt by a Participant to
anticipate, alienate, assign, sell, transfer, pledge, encumber or charge the
same shall be void. The Trust Assets shall not in any manner be subject to the
debts, contracts, liabilities,
<PAGE>
26
engagements or torts of any Participant and payments hereunder shall not be
considered an asset of the Participant in the event of his insolvency or
bankruptcy.
Section 14. Governing Law
This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without reference to principles of conflicts
of law.
Section 15. Miscellaneous
(a) The Trustee shall not be either individually or severally liable for
any taxes of any kind levied or assessed under the existing or future laws
against the Trust Assets. The Trustee shall withhold from each payment to any
Participant or beneficiary any federal, state or local withholding taxes which
are from time to time required to be deducted under applicable laws, as directed
by the Consulting Firm. To the extent that any taxes levied or assessed upon the
Trust are not paid by the Company, the Trustee shall pay such taxes out of the
Trust Assets.
(b) Expenses and fees of the Company for the administration of this Trust
and services in relation thereto for actuarial, legal and accounting and other
similar expenses, including any costs with respect to the creation of the Trust,
shall be paid by the Company and, if not so paid may be paid by the Trustee from
the Trust Assets.
<PAGE>
27
(c) Participation in this Trust shall not give any Participant any right to
be retained as an employee of the Company nor any rights other than those
specifically enumerated herein or in any Agreement applicable to any Participant
or pursuant to which such Participant is a participant.
(d) Any payment to any Participant or his beneficiary in accordance with
the provisions of this Trust shall, to the extent thereof, be in full
satisfaction of all claims against the Trustee and the Company under the
Agreements. Nothing in this Trust shall relieve the Company of its liability to
pay benefits under the Agreements except to the extent such liabilities are met
through the use of the Trust Assets.
(e) Headings in this Trust Agreement are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.
(f) This Trust Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument, which may be sufficiently evidenced by any one
counterpart.
(g) This Trust Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns. In addition, this
Trust Agreement shall also inure to the benefit of the Participants and their
beneficiaries and the Company's general creditors under federal and state law.
(h) As used in this Trust Agreement, the masculine gender shall include the
feminine and neuter genders.
<PAGE>
28
(i) Any action of the Company pursuant to this Trust Agreement, including
all orders, requests, data, directions, instructions and other related
information, shall be in writing signed on behalf of the Company by an officer
or named designee of the Company.
(j) In the event that a Participant and his beneficiary shall both be
deceased prior to the time payment is due the Participant or his beneficiary,
then payment shall be made if due to the estate of the deceased Participant.
<PAGE>
29
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Agreement as of the date first above written.
SUPERVALU INC.
Attest: /s/ William McDonald By: /s/ David L. Boehnen
------------------------- -------------------------
[Name] William McDonald Name: David L. Boehnen
[Position] Assistant Secretary Title: Executive Vice
President
NORWEST BANK MINNESOTA, N.A.
By: /s/ Jill Greene
-------------------------
Name: Jill Greene
Title: Assistant Vice President
<PAGE>
30
EXHIBIT A
1. Super Valu Stores, Inc. Executive Post-Retirement Survivor Benefit Program,
as amended to date and as the same may be amended from time to time.
2. Super Valu Stores, Inc. Deferred Compensation Plan, as amended to date and
as the same may be amended from time to time.
3. Super Valu Stores, Inc. Executive Deferred Compensation Plan I, as amended
to date and as the same may be amended from time to time.
4. Super Valu Stores, Inc. Excess Benefits Plan, as amended to date and as the
same may be amended from time to time.
5. Super Valu Stores, Inc. Directors Retirement Program adopted effective July
1, 1982, as amended to date and as the same may be amended from time to
time.
6. Super Valu Stores, Inc. Executive Deferred Compensation Plan II, as amended
to date and as the same may be amended from time to time.
7. Super Valu Stores, Inc. Excess Benefits Plan (1989 Restatement), as amended
to date and as the same may be amended from time to time.
8. Super Valu Stores, Inc. Nonqualified Supplemental Executive Retirement
Plan, as amended to date and as the same may be amended from time to time.
9. Change of Control Severance Agreements entered into between SuperValu Inc.
and certain of its executives.
10. Split Dollar Life Insurance Agreement effective July 6, 1998, between
SUPERVALU INC., Michael W. Wright, and Phillip H. Martin and Thomas O. Moe.
11. Supplemental Pension Agreement, effective as of ___________, 199__, between
William J. Bolton and SUPERVALU INC.
<PAGE>
EXHIBIT(10)e
SUPERVALU INC.
DIRECTORS RETIREMENT PROGRAM
EFFECTIVE JUNE 27, 1996
Effective June 27, 1996, the Directors Retirement Program is terminated, subject
to the payment of benefits earned by directors prior to such termination in
accordance with the following provisions. Directors who have served as
non-employee, outside directors on the SUPERVALU Board will receive an annual
retirement fee equal to $20,000 per year, payable quarterly, commencing when the
outside director leaves the Board or at age 55, whichever is later. This annual
fee is payable for the lesser of the number of years of Board service as an
outside director prior to June 27, 1996, or ten years, subject to the director
being available to management for consultation services and engaging in no
activity directly competitive to the Company's business. For purposes of this
paragraph, years of service shall be measured from Annual Meeting to Annual
Meeting and any director who serves for less than a full year shall be
considered to have served for a full year if the director has served at least
four months. Upon a Change of Control (as hereinafter defined) of the Company
any retirement compensation otherwise payable in installments shall be
accelerated and paid to the director. Upon the death of the director, the
director's retirement compensation shall be paid 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.
CHANGE OF CONTROL
For purposes hereof, Change of Control shall have the following meaning:
A "Change of Control" shall be deemed to have occurred upon any of the
following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of common stock of the Company or
(B) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors;
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control; (A) any acquisition
directly from the Company or (B) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(ii) the consummation of any merger or other business combination of
the Company, sale or lease of the Company's assets or combination of the
foregoing transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company and any trustee
<PAGE>
or fiduciary of any Company employee benefit plan immediately prior to the
Transaction own at least 60% of the voting power, directly or indirectly,
of (A) the surviving corporation in any such merger or other business
combination; (B) the purchaser or lessee of the Company's assets; or (C)
both the surviving corporation and the purchaser or lessee in the event of
any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a
majority of the Board of Directors of the Company or the board of directors
of a successor to the Company. For this purpose, any director who was not a
director at the beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board of Directors of the
Company by, or on the recommendation of or with the approval of, at least
three-fourths of the directors who then qualified as Incumbent Directors
(so long as such director was not nominated by a person who has expressed
an intent to effect a Change of Control or engage in a proxy or other
control contest); or
(iv) such other event or transaction as the Board of Directors of the
Company shall determine constitutes a Change of Control.
Last Revised 7/1/98
<PAGE>
EXHIBIT (10)f
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 Fifteen
Thousand Dollars ($15,000) (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 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
<PAGE>
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 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
2
<PAGE>
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.
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 shares. 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.
3
<PAGE>
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.
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")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control; (A) any acquisition directly from the Company or (B) any
acquisition by any employee
4
<PAGE>
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(b) the consummation of any merger or other business combination of the
Company, sale or lease of the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction immediately following
which the shareholders of the Company and any trustee or fiduciary of any
Company employee benefit plan immediately prior to the Transaction own at least
60% of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the purchaser
or lessee of the Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of Transactions; or
(c) within any 24 month period, the persons who were directors immediately
before the beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death) to constitute at least a majority of the Board of
Directors of the Company or the board of directors of a successor to the
Company. For this purpose, any director who was not a director at the beginning
of such period shall be deemed to be an Incumbent Director if such director was
elected to the Board of Directors of the Company by, or on the recommendation of
or with the approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change of Control or engage in
a proxy or other control contest); or
(d) such other event or transaction as the Board of Directors of the
Company shall determine constitutes a Change of Control.
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: 7/1/98
<PAGE>
EXHIBIT (10)g.
SUPERVALU INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
1. 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.
2. 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 the Non-Employee Directors Deferred
Stock Plan) until termination of such election.
3. 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.
4. 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.
5. All fees so 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.
6. 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.
7. 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 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.
<PAGE>
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.
9. Upon the death of a director or a former director, any amounts of
deferred director's fees and interest accrued shall be paid 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:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control; (A) any acquisition directly from the Company or (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or
(ii) the consummation of any merger or other business combination of
the Company, sale or lease of the Company's assets or combination of the
foregoing transactions (the "Transactions") other than a Transaction immediately
following which
2
<PAGE>
the shareholders of the Company and any trustee or fiduciary of any Company
employee benefit plan immediately prior to the Transaction own at least 60% of
the voting power, directly or indirectly, of (A) the surviving corporation in
any such merger or other business combination; (B) the purchaser or lessee of
the Company's assets; or (C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board of Directors of the Company or the board of directors of a
successor to the Company. For this purpose, any director who was not a director
at the beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board of Directors of the Company by, or on the
recommendation of or with the approval of, at least three-fourths of the
directors who then qualified as Incumbent Directors (so long as such director
was not nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest); or
(iv) such other event or transaction as the Board of Directors of the
Company shall determine constitutes a Change of Control.
Effective: 6/27/96
Last Revised: 7/1/98
3
<PAGE>
EXHIBIT (10)h
THIRD AMENDMENT
OF
SUPERVALU INC.
NONQUALIFIED SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN
Effective February 26, 1989, this corporation established an unfunded
nonqualified deferred compensation plan for certain executive employees in
accordance with the terms of the Plan Statement entitled SUPERVALU INC.
NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, as amended by a First
Amendment and a Second Amendment. SUPERVALU INC. has reserved to itself the
power to amend said Plan Statement and it now desires to amend the Plan
Statement in the following respects:
1. CHANGE IN CONTROL. For changes in control occurring on or after the date this
amendment is adopted, Section 7 of the Plan Statement shall be amended by adding
a new Section 7.4 to read in full as follows:
"7.4. Change in Control.
7.4.1. Special Definitions. A "Change of Control" shall be deemed to have
occurred upon any of the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A)
the then outstanding shares of common stock of the Company or (B)
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors; provided, however, that for purposes of
this subsection (i), the following acquisitions shall not
constitute a Change of Control; (A) any acquisition directly from
the Company or (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(ii) the consummation of any merger or other business combination of
the Company, sale or lease of the Company's assets or combination
of the foregoing transactions (the "Transactions") other than a
Transaction immediately following which the shareholders of the
Company and any trustee or fiduciary of any Company employee
benefit plan immediately prior to the Transaction own at least
60% of the voting power, directly or indirectly, of (A) the
surviving corporation in any such merger or
1
<PAGE>
other business combination; (B) the purchaser or lessee of the
Company's assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of
Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to
constitute at least a majority of the Board or the board of
directors of a successor to the Company. For this purpose, any
director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was
elected to the Board by, or on the recommendation of or with the
approval of, at least three-fourths of the directors who then
qualified as Incumbent Directors (so long as such director was
not nominated by a person who has expressed an intent to effect a
Change of Control or engage in a proxy or other control contest);
or
(iv) such other event or transaction as the Board shall determine
constitutes a Change of Control.
7.4.2. Amendment. Notwithstanding any other provision of the Plan
Statement, during the five (5) years following a change in control,
the provisions of the Plan Statement may not be amended if any
amendment would adversely affect the rights, expectancies or benefits
provided by the Plan (as in effect immediately prior to the change in
control), of any Participant, Beneficiary or other person entitled to
payments under the Plan."
2. SAVINGS CLAUSE. Save and except as herein expressly amended the Plan
Statement shall continue in full force and effect.
2
<PAGE>
Exhibit (10)i.
SUPERVALU INC.
EXECUTIVE POST-RETIREMENT SURVIVOR BENEFIT PROGRAM
THIS AGREEMENT, made and entered into this _____ day of _______, 19__,
by and between ___________________________, a resident of ____________
("Executive"), and SUPERVALU INC., A Delaware corporation, (the "Company").
WITNESSETH:
WHEREAS, there is presently in effect the SUPERVALU INC. Executive
Post-Retirement Survivor Benefit Program (the "Program"); under the Program, no
employee has the right to any benefit of any kind unless, and until, the Company
and the Executive enter into a written agreement and, therefore, this Agreement
is entered into pursuant to the Program; and
WHEREAS, Executive's extraordinary efforts on behalf of the Company
contributed significantly to the Company's profit-ability.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Death Benefit. In consideration of Executive's prior and continuing
services to the Company, the Company agrees to pay to the Designated Beneficiary
of Executive, as a matter of separate agreement, a single deferred compensation
and death benefit (the "Death Benefit") payment equal to one hundred forty
percent (140%) of Executive's Final Base Salary paid or accrued by the Company
to Executive during the last twelve (12)
<PAGE>
consecutive completed months of employment by Executive with the Company.
For purposes of this Agreement, Final Base Salary shall mean the base
compensation paid by the Company to Executive, exclusive of commissions, sick
pay, accrued but unused vacation pay, expense allowances, bonuses, non-cash
payments and any sums allocated or allocable to Executive under any retirement
plan or plan of deferred compensation to which either the Company or Executive
contribute; provided, however, that Final Base Salary shall include all
compensation which would have been included in determining such Final Base
Salary if Executive had not entered into an agreement to reduce such
compensation as a condition of participation in any qualified or non-qualified
deferred compensation, or retirement plan, sponsored by the Company.
2. Payment of Death Benefit. The Death Benefit to be paid by the
Company pursuant to this Agreement shall be payable only upon the occurrence of
the following Payment Event: death of Executive at any time following either (a)
Executive's Retirement from employment with the Company or (b) termination of
Executive's employment following a Change of Control (other than a termination
by the Company for Cause).
For purposes of this Agreement, Retirement (and Retired) shall mean
voluntary termination of employment with the Company not earlier than the first
month in which Executive reaches age 55 and has completed ten (10) years or more
of service with the
-2-
<PAGE>
Company.
For purposes of this Agreement, Change of Control shall mean any of the
following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"))of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control; (A) any acquisition directly from the Company or (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or
(ii) the consummation of any merger or other business combination of
the Company, sale or lease of the Company's assets or combination of the
foregoing transactions (the "Transactions") other than a Transaction immediately
following which the shareholders of the Company and any trustee or fiduciary of
any Company employee benefit plan immediately prior to the Transaction own at
least 60% of the voting power,
-3-
<PAGE>
directly or indirectly, of (A) the surviving corporation in any such merger or
other business combination; (B) the purchaser or lessee of the Company's assets;
or (C) both the surviving corporation and the purchaser or lessee in the event
of any combination of Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board of Directors of the Company or the board of directors of a
successor to the Company. For this purpose, any director who was not a director
at the beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board of Directors of the Company by, or on the
recommendation of or with the approval of, at least three-fourths of the
directors who then qualified as Incumbent Directors (so long as such director
was not nominated by a person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest); or
(iv) such other event or transaction as the Board of Directors of the
Company shall determine constitutes a Change of Control.
For purposes of this Agreement, Cause means (i) an act or acts of
personal dishonesty taken by the Executive and intended to result in substantial
personal enrichment of the Executive at
-4-
<PAGE>
the expense of the Company, (ii) repeated violations by the Executive of the
Company's rules which are demonstrably willful and deliberate on the Executive's
part and which are not remedied after receipt of notice from the Company or
(iii) the conviction of the Executive of a felony.
3. Election Regarding Manner of Payment. The Death Benefit payment to
be made pursuant to this Agreement shall be paid by the Company according to the
schedule set forth below:
(Select one form of payment.)
[ ] Lump Sum
[ ] Two Years
[ ] ______ consecutive annual payments not to exceed
20 years
The selection of the foregoing payment schedule is irrevocable when made and
accepted by the Retirement Committee and is not subject to amendment of
modification in any manner whatsoever. Payment of the Death Benefit shall begin
on such day, as determined by the Retirement Committee in its sole and absolute
discretion, within ninety (90) days of a Payment Event and subsequent payments,
if any, shall be made on the anniversary date of the first payment. From and
after the date on which the Death Benefit payments begin, interest shall be paid
at the time of each subsequent Death Benefit, if any, at an interest rate which
shall be determined by the Retirement Committee in its sole
-5-
<PAGE>
and absolute discretion, and the Retirement Committee shall be empowered to
change such interest rate from time to time in its sole and absolute discretion.
The Company shall deduct from any Death Benefit payment any amount lawfuly
required to be withheld for federal and state income taxes or any applicable
taxes or other amounts required to be withheld or deducted therefrom.
4. Designated Beneficiary. All payments to be made pursuant to this
Agreement shall be made to the Designated Beneficiary of the Executive.
Executive shall designate a beneficiary or beneficiaries, or during an
Executive's lifetime change such designation, by filing a written notice of such
designation with the Company, in such form and subject to such rules and
regulations as the Retirement Committee (described in paragraph 7 hereof) may
prescribe. If Executive's right to a payment pursuant to this Agreement
constitutes community property, then any beneficiary designation made by
Executive other than a designation of such Executive's spouse, shall not be
effective if any such beneficiary or beneficiaries are to receive more than
fifty percent (50%) of the aggregate benefits payable hereunder unless such
spouse shall approve such designation in writing. If no designation shall be in
effect at the time when the benefit payable hereunder shall become due, the
Designated Beneficiary shall be the legal representatives of the Executive's
estate. In the event a benefit is payable to a minor or person declared
incompetent or to a person incapable of handling the
-6-
<PAGE>
disposition of his property, the Retirement Committee may determine to pay such
benefit to the guardian, legal representative or person having care of custody
of such minor, incompetent or person. The Retirement Committee may require proof
of incompetency, minority or guardianship as they may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Retirement Committee and the Company from all liability with respect to such
benefit.
5. Transferability. The rights conferred upon Executive by this
Agreement shall not be transferable or assignable by or to Executive during
Executive's lifetime or by Executive's Designated Beneficiary.
6. No Right to Continuance of Employment. This Agreement shall not
confer on Executive any right with respect to continuance of employment with the
Company, nor will it interfere in any way with the right of the Company to
terminate such employment at any time. Furthermore, this Agreement shall not in
any way interfere with the right of the Company to select among, adopt or change
any business investment or compensation policies of plans at any time or from
time to time in its sole discretion.
7. Administration. This Agreement shall be administered by the
Retirement Committee of the Company, or such other persons as the Board of
Directors of the Company may from time to time designate. This Agreement is
issued pursuant to the Program, and
-7-
<PAGE>
in the unlikely event of any dispute between the Company and Executive over the
interpretation of this Agreement or the Program, the matter shall be decided by
the Board of Directors of the Company or the Retirement Committee. All such
decisions shall be final and binding on all parties, including Executive. For
purposes of this Agreement, the Retirement Committee means the SUPERVALU INC.
Retirement Committee constituted by the Chief Executive Officer for the purpose
of performing certain administrative functions with respect to certain employee
benefit plans of the Company, including the Program.
8. Company's Obligation. The Company is under a contractual obligation
to make payments pursuant to this Agreement. Such payments shall not be financed
from a trust fund and shall be paid solely out of the general funds of the
Company. Executive shall not have any interest whatsoever in any specific asset
of the Company as a result of the execution of this Agreement, and Executive's
rights to payments hereunder shall be no greater than the right of any other
unsecured general creditor of the Company. Notwithstanding the foregoing,
payments may be financed by or through the SUPERVALU INC. Agreement and Plans
Trust, approved April 13, 1988, as it may be amended from time-to-time.
9. Amendment and Termination. The Company expects the Program to be
permanent but since future conditions affecting the Company cannot be
anticipated or foreseen, the Company must
-8-
<PAGE>
necessarily and does hereby reserve the right to amend, modify, or terminate the
Program and this Agreement, uniformly as to all participants, at any time and in
any manner whatsoever by action of the Board of Directors of the Company, or the
Retirement Committee with the written concurrence of the Chief Executive Officer
provided, however, that notwithstanding the foregoing, any such amendment,
modification or termination of the Program shall not affect any rights of
Executive, his heir or designated beneficiaries if (a) Executive has already
Retired (as defined in Section 2 hereof) or (b) a Change of Control (as defined
in Section 2 hereof) has occurred.
10. Complete Agreement. This Agreement supersedes any and all prior
other agreements and understandings among the parties hereto with respect to the
matters provided for herein.
11. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Minnesota.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed upon the date and year first above written.
EXECUTIVE
-----------------------------------
SUPERVALU INC.
By:
--------------------------------
Its:
-------------------------------
Amended: 04/13/88
Amended: 10/12/98
-10-
<PAGE>
Exhibit 11
SUPERVALU INC.
Computation of Earnings per Common Share
(unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Second Quarter Ended Year-to-date Ended
(In thousands, except per share amounts) Sept. 12, 1998 Sept. 6, 1997 Sept. 12, 1998 Sept. 6, 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings per share - basic
Income available to common shareholders $ 39,900 $ 89,115 $ 91,698 $ 138,881
Weighted average shares outstanding 120,753 124,118 120,645 129,740
Earnings per share - basic $.33 $.72 $.76 $1.07
Earnings per share - diluted $ 39,900 $ 89,115 $ 91,698 $ 138,881
Income available to common shareholders 120,753 124,118 120,645 129,740
Dilutive impact of options outstanding 1,425 1,562 1,514 974
------- ------- ------- -------
Weighted average shares and potential
dilutive shares outstanding 122,178 125,680 122,159 130,714
Earnings per share - dilutive $.33 $.71 $.75 $1.06
- --------------------------------------------------------------------------------------------------------
</TABLE>
Basic earnings per share is calculated using income available to common
shareholders divided by the weighted average of common shares outstanding during
the period. Diluted earnings per share is similar to basic earnings per share
except that the weighted average of common shares outstanding is increased to
include the number of additional common shares that would have been outstanding
if the dilutive potential common shares, such as options, had been issued.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 12, 1998 AND THE CONSOLIDATED
STATEMENT OF EARNINGS FOR THE 28 WEEKS ENDED SEPTEMBER 12, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-27-1999
<PERIOD-START> MAR-01-1998
<PERIOD-END> SEP-12-1998
<CASH> 6,985
<SECURITIES> 0
<RECEIVABLES> 423,956
<ALLOWANCES> (13,959)
<INVENTORY> 1,090,542
<CURRENT-ASSETS> 1,584,540
<PP&E> 2,815,349
<DEPRECIATION> (1,186,468)
<TOTAL-ASSETS> 4,119,062
<CURRENT-LIABILITIES> 1,619,630
<BONDS> 1,066,107
0
5,908
<COMMON> 150,670
<OTHER-SE> 1,097,756
<TOTAL-LIABILITY-AND-EQUITY> 4,119,062
<SALES> 9,139,894
<TOTAL-REVENUES> 9,139,894
<CGS> 8,218,306
<TOTAL-COSTS> 8,218,306
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,691
<INTEREST-EXPENSE> 65,596
<INCOME-PRETAX> 153,009
<INCOME-TAX> 61,311
<INCOME-CONTINUING> 91,698
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 91,698
<EPS-PRIMARY> .76
<EPS-DILUTED> .75
</TABLE>
