<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SUPERVALU INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SUPERVALU INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
- -------------------------------------------------------------------------------
Notice of Annual Meeting of Stockholders
to be Held Wednesday, June 30, 1999
The Annual Meeting of Stockholders of SUPERVALU INC. will be held on
Wednesday, June 30, 1999, at 10:30 a.m., local time, at The Radisson Hotel
South & Plaza Tower, 7800 Normandale Boulevard, Bloomington, Minnesota 55439-
3145 for the following purposes:
.to elect four directors;
.to ratify the appointment of KPMG Peat Marwick LLP as independent
auditors;
.to vote on an amendment to the SUPERVALU INC. 1993 Stock Plan;
and to transact such other business as may properly come before the meeting.
Record Date
The Board of Directors has fixed the close of business on May 3, 1999, as
the record date for the purpose of determining stockholders who are entitled
to notice and vote at the meeting. Common and preferred stockholders are
entitled to one vote for each share held of record at that time.
IMPORTANT: We hope you will be able to attend the meeting in person and you
are cordially invited to attend. If you expect to attend the meeting, please
check the appropriate box on the proxy card when you return your proxy or
follow the instructions on your proxy card to vote and to confirm your
attendance by telephone. Please note that the meeting location has changed to
The Radisson Hotel South & Plaza Tower this year. A map showing the location
of The Radisson Hotel South & Plaza Tower is included on your proxy card. If
you need special assistance because of a disability, please contact me at P.O.
Box 990, Minneapolis, Minnesota 55440.
BY ORDER OF THE BOARD OF DIRECTORS
John P. Breedlove
Secretary
May 11, 1999
<PAGE>
PROXY STATEMENT--VOTING PROCEDURES
- -------------------------------------------------------------------------------
YOUR VOTE IS VERY IMPORTANT
. Voting by Mail. Whether or not you expect to attend the meeting, please
sign, date, and mail your proxy promptly in the enclosed postage paid
envelope.
. Voting by Telephone and the Internet. If you wish to vote by telephone or
by the Internet, please follow the instructions on the enclosed proxy card.
If you vote by telephone or the Internet you do not need to return the
proxy card.
It is important that all stockholders vote. If you sign, date and mail your
proxy without indicating how you want to vote, your proxy will be voted as
recommended by the Board of Directors.
Vote Required and Method of Counting Votes
. Number of Shares Outstanding. SUPERVALU has two classes of capital stock
outstanding. The holders of Common Stock and Preferred Stock are entitled
to one vote for each share held, voting together as one class. 119,678,550
shares of Common Stock and 1,341 shares of Preferred Stock are eligible to
vote at the meeting.
. Vote Required. The following is an explanation of the vote required for
each of the items to be voted on.
Election of Directors (Item 1)
The four nominees receiving the highest number of votes will be elected.
Stockholders who do not wish their shares to be voted for a particular nominee
may so indicate in the space provided on the proxy card.
All Other Items (Items 2-3)
The affirmative vote of a majority of shares present in person or by proxy is
required for approval of Items 2 and 3. Shares represented by a proxy marked
"abstain" on any matter will be considered present at the meeting for purposes
of determining a quorum and for purposes of calculating the vote, but will not
be considered to have voted in favor of the proposal. Therefore, any proxy
marked "abstain" will have the effect of a vote of the shares against the
item. Shares represented by a proxy as to which there is a "broker non-vote"
(i.e. where a broker does not have discretionary authority to vote the shares)
will be considered present at the meeting for purposes of determining a
quorum, but will have no effect on the vote.
Revoking Your Proxy
You may revoke your proxy at any time before it is voted by sending a written
statement to the Secretary, or by submitting another proxy with a later date.
You may also revoke your proxy by appearing and voting at the meeting.
Voting By Participants in SUPERVALU Benefit Plans
If you own SUPERVALU shares as a participant in one or more of SUPERVALU's
employee benefit plans, you will receive a single proxy card that covers both
the shares credited to your plan account(s) and shares you own that are
registered in the same name. If any of your plan accounts are not in the same
name as your shares of record, you will receive separate proxy cards for your
record and plan holdings. Proxies submitted by plan participants will serve as
voting instructions to the trustee(s) for the plans whether provided by mail,
telephone or the Internet.
Other Business
The Board knows of no other matters to be presented for stockholder action at
the meeting. If other matters are properly brought before the meeting, the
persons named in the accompanying proxy card intend to vote the shares
represented by them in accordance with their best judgment. This Proxy
Statement will be first mailed to stockholders on or about May 11, 1999.
1
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
- -------------------------------------------------------------------------------
The Board of Directors held six regular meetings during the last fiscal year
and took action three times by written consent. Each director attended more
than 75% of the meetings of the Board and its committees on which the director
served, except for Lawrence A. Del Santo and Garnett L. Keith, Jr., who each
attended 73%. The Executive Committee of the Board does not have scheduled
meetings and did not meet during the year. The Board maintains four other com-
mittees: Audit, Finance, Executive Personnel and Compensation, and Director
Affairs. Membership on the Audit and Executive Personnel and Compensation Com-
mittees is limited to non-employee directors.
Audit Committee
The following directors serve on the Audit Committee: Garnett L. Keith, Jr.
(Chairman), Charles M. Lillis, Harriet Perlmutter and Steven S. Rogers. The
Audit Committee met three times in the last fiscal year.
The primary responsibilities of the Audit Committee are to:
. Assess and recommend to the full Board of Directors and the stockholders
the selection of independent auditors;
. Review and evaluate the scope of the annual audit and the activities and
reports of the independent auditors;
. Review the objectives, scope, and results of internal audit examinations
and the status of management actions for implementing the recommendations;
and
. Review compliance with the Company's Code of Conduct.
Finance Committee
The following directors serve on the Finance Committee: Herman Cain
(Chairman), Garnett L. Keith, Jr., Charles M. Lillis, Harriet Perlmutter,
Steven S. Rogers, Carole F. St. Mark and Michael W. Wright. The Finance
Committee met two times in the last fiscal year.
The primary responsibilities of the Finance Committee are to review the
financial structure, policies, and future financial plans of the Company and
to make recommendations concerning them to the Board. In carrying out these
responsibilities, the Finance Committee periodically reviews:
. The annual operating and capital budgets of the Company as proposed by
management, and performance by the Company as compared to the approved
budgets;
. Dividend policy and rates;
. Investment performance of the Company's employee benefit plans;
. Company financing arrangements;
. The Company's capital structure, including key financial ratios such as
debt to equity ratios and coverage of fixed charges; and
. Proposals for changes in the capitalization of the Company, including
purchases of treasury stock.
Director Affairs Committee
The following directors serve on the Director Affairs Committee: William A.
Hodder (Chairman), Lawrence A. Del Santo, Edwin C. Gage, Richard L. Knowlton
and Michael W. Wright. The Director Affairs Committee met three times in the
last fiscal year.
The mission of the Director Affairs Committee is to recommend a framework to
assist the Board in fulfilling its corporate governance responsibilities. In
carrying out its mission, the Director Affairs Committee establishes and
regularly reviews the Board of Directors' policies and procedures which
provide:
. Criteria for the size and composition of the Board;
. Procedures for the conduct of Board meetings including executive sessions
of the Board;
. Policies on director retirement and resignation;
. Criteria regarding personal qualifications needed for Board membership; and
. Appropriate compensation for directors.
2
<PAGE>
In addition, the Director Affairs Committee has responsibility to:
. Consider and recommend nominations for Board membership and the composition
of Board Committees;
. Evaluate Board practices at SUPERVALU and other well-managed companies and
recommend appropriate changes to the Board (see "SUPERVALU Board Practices"
below); and
. Consider governance issues raised by stockholders and recommend appropriate
responses to the Board.
Executive Personnel and Compensation Committee
The following directors serve on the Executive Personnel and Compensation
Committee: Edwin C. Gage (Chairman), Herman Cain, Lawrence A. Del Santo,
William A. Hodder, Richard L. Knowlton and Carole F. St. Mark. This Committee
met two times in the last fiscal year and took action once by written consent.
When necessary for purposes of Section 162(m) of the Internal Revenue Code,
the Committee acts by subcommittee comprised solely of the members of the
Committee who are "outside directors" as defined pursuant to Section 162(m).
This subcommittee met two times in the last fiscal year and took action once
by written consent and was comprised of all of the members of the Committee
except for Mr. Gage. See "Compensation Committee Interlocks and Insider
Participation."
The primary functions of the Executive Personnel and Compensation Committee
are to:
. Determine the process to evaluate the performance of the Chief Executive
Officer;
. Review and recommend to the Board the compensation of the Chief Executive
Officer;
. Review and recommend to the Board major changes in executive compensation
programs, executive stock options and retirement plans for officers;
. Consider and make recommendations to the Board concerning the annual
election of corporate officers and the Company's succession plan;
. Approve annual salaries and bonuses of corporate officers and other
executives at specified levels;
. Review and approve participants and performance targets under annual and
long-term incentive compensation plans; and
. Approve stock option grants and awards under the Company's stock option
plans, bonus and other incentive plans.
SUPERVALU BOARD PRACTICES
- -------------------------------------------------------------------------------
In order to help our stockholders better understand SUPERVALU's Board
practices, we are including the following description of current practices.
The Director Affairs Committee periodically reviews these practices.
Evaluation of Board Performance
In order to continue to evaluate and improve the effectiveness of the Board,
the Director Affairs Committee evaluates the Board's performance as a whole
once every two years. The evaluation process includes a survey of the
individual views of all non-employee directors, a summary of which is then
shared with the Board.
Size of the Board
Although the size of the Board may vary from time to time, the Board believes
the size should preferably be not less than ten or more than fourteen members.
The Board believes that the size of the Board should accommodate the
objectives of effective discussion and decision-making and adequate staffing
of Board committees. The Board also believes that the SUPERVALU Board should
be made up of a substantial majority of independent, non-employee directors.
It is the Board's policy that no more than three members of the Board will be
employees of SUPERVALU. These management members will include the Chief
Executive Officer and up to two additional persons whose duties and
responsibilities identify them as top management individuals in the Company.
The Board currently has eleven members, one of which is the CEO.
3
<PAGE>
Director Retirement
Non-employee directors must retire at the annual meeting following the date
they attain the age of seventy. In addition, non-employee directors elected
after February 27, 1994 will serve a maximum term of fifteen years. Directors
who change the occupation they held when initially elected to the Board are
expected to offer to resign from the Board. At that time, the Director Affairs
Committee will review the continuation of Board membership under these new
circumstances, and make a recommendation to the full Board.
The Board also has adopted a policy calling for employee directors, other than
the CEO, to retire from the Board at the time of a change in their status as
an officer of SUPERVALU. A former CEO may continue to serve on the Board until
the third anniversary after his or her separation from the Company. If a
former CEO, however, leaves the Company to accept another position, the CEO
will retire as a director effective simultaneously with his or her separation
from the Company.
Selection of Directors
All directors are encouraged to submit the name of any candidate deemed
qualified to serve on the Board, together with all available information on
the candidate, to the Chairperson of the Director Affairs Committee. The
Director Affairs Committee considers potential Board candidates and makes its
recommendation to the full Board.
Board Meetings
The Board meets at least six times per year. Board meetings normally do not
exceed one day in length. The Board meets in Executive Session, without
management in attendance, at the beginning of each regularly scheduled Board
meeting. The Board also schedules a longer multi-day off-site planning meeting
every other year.
Executive Sessions of Outside Directors
Outside directors have the opportunity to meet together as a group, without
the CEO or other inside directors in attendance, at the conclusion of the
Executive Session of a Board meeting, and otherwise at the request of any
director. The Chairperson of the Director Affairs Committee will preside
during any session of the Board at which only outside directors are present;
provided, however, that the Chairperson of the Executive Personnel and
Compensation Committee will preside during any non-employee director session
held for the purpose of conducting the CEO's performance review.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -------------------------------------------------------------------------------
The following table sets forth information with respect to the only persons or
groups known to the Company as of April 1, 1999, to be the beneficial owner of
more than 5% of its Common Stock. Information in this table has been adjusted
to reflect a two-for-one stock split paid on August 18, 1998.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Holder Beneficial Ownership Class
------------------- -------------------- ----------
<S> <C> <C>
AMVESCAP PLC 12,205,476 10.1%
11 Devonshire Square
London, EC2M 4YR
England (1)
Sanford C. Bernstein & Co., Inc. 8,439,674 7.0%
767 Fifth Avenue
New York, New York 10153 (2)
</TABLE>
- --------
(1) Based on information in a Schedule 13G Report dated February 8, 1999,
delivered to the Company and indicating that AMVESCAP PLC and certain of
its subsidiaries are the beneficial owners of 12,205,476 shares of Common
Stock and possess shared voting and dispositive power with respect to such
shares as of February 8, 1999.
(2) Based on information in a Schedule 13G Report dated February 5, 1999,
delivered to the Company and indicating that Sanford C. Bernstein & Co.,
Inc. is beneficial owner of 8,439,674 shares, possesses sole voting power
with respect to 4,535,808 shares, shared voting power with respect to
1,123,848 shares, and sole dispositive power with respect to 8,439,674
shares as of December 31, 1998.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
- -------------------------------------------------------------------------------
The following table sets forth information, as of April 15, 1999, concerning
beneficial ownership of SUPERVALU Common Stock by each director and nominee,
by each of the executive officers named in the Summary Compensation Table on
page 9 and by all directors and executive officers as a group. The definition
of beneficial ownership for proxy statement purposes includes shares over
which a person has sole or shared voting power, and shares over which a person
has sole or shared dispositive power, whether or not a person has any economic
interest in the shares. Information in this table has been adjusted to reflect
a two-for-one stock split paid on August 18, 1998.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Options Exercisable of
Beneficial Owner Ownership (1) Within 60 Days (2) Class (2)
---------------- -------------------- ------------------- ----------
<S> <C> <C> <C>
Herman Cain 4,571 24,000 *
Lawrence A. Del Santo 4,206 12,000 *
Edwin C. Gage 42,505 15,466 *
William A. Hodder 15,000 18,885 *
Garnett L. Keith, Jr. 10,866 24,000 *
Richard L. Knowlton 10,807 16,589 *
Charles M. Lillis 10,322 18,000 *
Harriet Perlmutter 17,502 24,000 *
Steven S. Rogers 3,679 3,000 *
Carole F. St. Mark 5,971 21,600 *
Michael W. Wright (3) 420,037 833,530 1.0%
David L. Boehnen 121,560 174,827 *
William J. Bolton 21,697 148,000 *
Pamela K. Knous 40,437 66,000 *
Jeffrey Noddle 119,417 378,932 *
All directors and
executive officers as a
group (27 persons) 1,235,370 2,434,990 3.1%
</TABLE>
- --------
* Less than 1%.
(1) The persons listed have sole voting and investment power with respect to
the shares listed except as follows. The following persons have shared
voting and investment power: Mr. Gage: 8,000 shares; Ms. Perlmutter: 3,000
shares; and Mr. Wright: 43,552 shares. The following non-employee
directors have sole voting power, but no investment power, over shares
held in the Non-Employee Directors Deferred Stock Plan Trust as follows:
Herman Cain: 2,571 shares; Lawrence A. Del Santo: 4,206 shares; Edwin C.
Gage: 2,571 shares; William A. Hodder: 9,485 shares; Garnett L. Keith,
Jr.: 6,866 shares; Richard L. Knowlton: 7,396 shares; Charles M. Lillis:
8,322 shares; Harriet Perlmutter: 4,102 shares; Steven S. Rogers: 679
shares; and Carole F. St. Mark: 2,571 shares.
(2) Options exercisable within 60 days are deemed beneficially owned and are
included in the percent of class owned.
(3) Includes 13,150 shares held by or for a child of Mr. Wright, as to which
shares he disclaims beneficial ownership; and 8,000 shares held in a
retirement trust for Mr. Wright.
5
<PAGE>
ELECTION OF DIRECTORS (ITEM 1)
- -------------------------------------------------------------------------------
The Board is divided into three classes with the number of directors to be
divided as equally as possible among the three classes. Directors are elected
for staggered terms of three years. If a vacancy occurs during the year, the
vacant directorship may be filled by the vote of the remaining directors until
the next Annual Meeting, at which time the stockholders elect a director to
fill the balance of the unexpired term or the term established by the Board.
Edwin C. Gage, Garnett L. Keith, Jr., Richard L. Knowlton and Carole F. St.
Mark are nominated for three-year terms expiring in 2002. There are currently
eleven members of the Board.
The Board of Directors is informed that each of the four nominees is willing
to serve as a director; however, if any nominee is unable to serve or for good
cause will not serve, the proxy may be voted for another person as the holders
of the proxies decide.
The following sets forth information, as of April 15, 1999, concerning the
four nominees for election as directors of the Company and as to the seven
directors of the Company whose terms of office will continue after the Annual
Meeting.
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING
AT THE ANNUAL MEETING IN 2002
EDWIN C. GAGE, age 58
. Chairman and Chief Executive Officer of GAGE Marketing Group, L.L.C. (an
integrated marketing services company) since 1991
. Elected a Director of SUPERVALU in 1986
. Also a Director of AHL Services, Inc. and Fingerhut Companies, Inc.
GARNETT L. KEITH, JR., age 63
. Chairman and Chief Executive Officer of SeaBridge Investment Advisors, LLC
(a registered investment company) since 1996
. Vice Chairman of The Prudential Insurance Company of America (an insurance
company) from 1984 to 1996
. Elected a Director of SUPERVALU in 1984
. Also a Director of Pan-Holding Societe Anonyme
RICHARD L. KNOWLTON, age 66
. Chairman of the Hormel Foundation (a charitable foundation controlling
41.7% of Hormel Foods Corporation) since 1995
. Chairman and a Director of Hormel Foods Corporation (a food manufacturing
company) from 1981 to 1995
. Elected a Director of SUPERVALU in 1994
. Also a Director of ReliaStar Financial Corp. and a member of the Board of
Trustees, Mayo Foundation
CAROLE F. ST. MARK, age 56
. President and Chief Executive Officer of Growth Management, LLC (a business
development and strategic management company) since 1997
. President and Chief Executive Officer of Pitney Bowes Business Services, a
unit of Pitney Bowes, Inc. (a company engaged in the production and supply
of business and business-related products and services) from 1994 to 1997
. President of Pitney Bowes Logistics Systems and Business Services from 1990
to 1994.
. Elected a Director of SUPERVALU in 1989
. Also a Director of Gerber Scientific, Inc., Polaroid Corporation and Royal
& SunAlliance Insurance Group plc.
6
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 2001
HERMAN CAIN, age 53
. Chief Executive Officer and President of the National Restaurant
Association (a membership association of restaurant companies) since
December 1996
. Chairman of the Board of Godfather's Pizza, Inc. (a company engaged in the
operation and franchising of pizza restaurants) since 1986
. Chief Executive Officer of Godfather's Pizza, Inc. from 1986 to December
1996
. Elected a Director of SUPERVALU in 1991
. Also a Director of Nabisco Holdings Corp., UtiliCorp United Inc. and
Whirlpool Corporation
CHARLES M. LILLIS, age 57
. Chairman and Chief Executive Officer of MediaOne Group (a broadband commu-
nications company) since June 1998
. President and Chief Executive Officer of US WEST Media Group, a division of
US WEST, Inc. from April 1995 to May 1998
. Executive Vice President and Chief Planning Officer, US WEST, Inc. and
President of US WEST Diversified Group from 1991 to 1994
. Elected a Director of SUPERVALU in 1995
. Also a Director of Ascent Entertainment Group Inc.
STEVEN S. ROGERS, age 41
. Clinical Professor of Finance and Management at J.L. Kellogg Graduate
School of Management at Northwestern University since 1995
. Owner of Fenchel Lampshade Company (a private manufacturing company) from
1988 to 1995
MICHAEL W. WRIGHT, age 60
. Chairman of the Board, President and Chief Executive Officer of the Company
since 1982
. Elected a Director of SUPERVALU in 1977
. Also a Director of Honeywell Inc., The Musicland Stores Corporation and
Wells Fargo & Company
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 2000
LAWRENCE A. DEL SANTO, age 65
. Chief Executive Officer of The Vons Companies (a retail grocery company)
from 1994 to April, 1997
. Senior Executive Vice President and Chief Operating Officer--Food for
American Stores Company (a retail grocery company) from 1993 to April, 1994
. Elected a Director of SUPERVALU in 1997
. Also a Director of Hussman Corporation and PETsMART, Inc.
WILLIAM A. HODDER, age 67
. Chief Executive Officer of Donaldson Company, Inc. (a manufacturer of
filtration devices) from 1982 to 1996
. Elected a Director of SUPERVALU in 1990
. Also a Director of The Musicland Stores Corporation, ReliaStar Financial
Corp. and Wells Fargo & Company
HARRIET PERLMUTTER, age 67
. Trustee of the Papermill Playhouse (The State Theatre of New Jersey)
. Elected a Director of SUPERVALU in 1978
7
<PAGE>
COMPENSATION OF DIRECTORS
- -------------------------------------------------------------------------------
Non-employee directors receive the following compensation for their Board
service:
. Cash retainer of $22,000 per year;
. Deferred retainer of $15,000 per year payable in SUPERVALU Common Stock
under the Non-Employee Directors Deferred Stock Plan;
. $1,800 for each Board meeting attended;
. $1,000 for each Committee meeting attended; and
. An option to purchase 4,000 shares of Common Stock when the director joins
the Board. At the 1999 Annual Meeting each director will receive an option
to purchase 2,000 shares. Thereafter, at the time of the Company's Annual
Meeting, each director will receive a 4,000 share option. Options granted
to directors are at current fair market value and are fully exercisable on
grant.
Committee chairpersons receive an additional annual retainer in the following
amounts:
. Audit, Finance and Director Affairs Committees: $2,500; and
. Executive Personnel and Compensation Committee: $4,000.
Effective June 27, 1996, the Company's retirement/deferral program for
directors was discontinued and benefits previously earned by directors were
frozen. A director first elected to SUPERVALU's Board prior to June 27, 1996
will receive at termination an annual payment of $20,000 per year for the
number of years of the director's Board service prior to June 27, 1996, but
not more than ten years. Directors first elected to the Board after June 27,
1996 do not participate in the retirement/deferral program.
Directors may elect to defer payment of their directors' fees under one or
more of the following arrangements:
. Directors Deferred Compensation Plan and Executive Deferred Compensation
Plans. Fees and quarterly interest are credited to an account for the
director, until payment is made from the plan following retirement from the
Board.
. Non-Employee Directors Deferred Stock Plan. Fees are credited to a deferred
stock account for each director. To encourage increased stock ownership, a
director who chooses to defer payment of cash fees into this plan will
receive deferred stock equal to 110% of the fee otherwise payable. The
Company contributes the deferred cash fee to an irrevocable trust and the
trust purchases shares of SUPERVALU Common Stock. The trust assets remain
subject to the claims of the Company's creditors. Each director is entitled
to direct the trustee to vote all shares allocated to the director's
account in the trust. The Common Stock will be distributed to each director
following the director's retirement from the Board.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
- -------------------------------------------------------------------------------
The following table shows compensation for each of the last three fiscal years
of the Chief Executive Officer and the other four most highly compensated
persons serving as executive officers at the end of the fiscal year. All award
information has been adjusted to reflect a two-for-one stock split paid on
August 18, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------------------- -----------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Year Salary Bonus Compensation Awards Options/SARs Compensation
Principal Position (1) ($) ($) ($) ($)(2) (#)(3) ($)(4)
------------------ ---- -------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael W. Wright 1999 $873,582 $ 682,442 $ 0 $1,179,068 1,806,697 $70,277
Chairman, President and 1998 868,140 1,215,396 82 1,166,905 318,924 39,293
Chief Executive Officer 1997 819,000 532,350 1,430 0 160,000 3,375
David L. Boehnen 1999 $345,727 $ 194,368 $ 0 $ 320,726 115,441 $ 6,800
Executive Vice President 1998 297,115 266,955 0 317,411 66,070 4,960
1997 250,000 104,000 0 0 20,000 3,375
William J. Bolton 1999 $440,000 $ 247,368 $ 0 $ 391,330 40,000 $ 0
Executive Vice President 1998(5) 157,115 149,260 0 908,339 300,000 0
Pamela K. Knous 1999 $330,000 $ 185,526 $ 0 $ 255,855 40,000 $ 0
Executive Vice 1998(6) 132,692 127,384 0 113,751 100,000 0
President,
Chief Financial Officer
Jeffrey Noddle 1999 $473,118 $ 261,256 $ 0 $ 471,366 40,000 $18,380
Executive Vice President 1998 445,404 427,588 9 1,630,872 251,970 14,323
1997 420,000 210,000 46 0 50,000 3,375
</TABLE>
- --------
(1) Fiscal 1998 was a 53 week fiscal year. This table includes 53 weeks of
salary and bonus for fiscal 1998.
(2) The amounts reflected in fiscal 1998 and 1999 represent the value of the
shares of restricted stock earned under the Company's Long-Term Incentive
Plan based on the achievement of designated level of corporate return on
invested capital and sales for fiscal 1998 and 1999, respectively. Such
shares earned in fiscal 1999 and 1998 will vest and the restrictions will
be removed at the end of fiscal 2000 if such named executive officers
remain in the employ of the Company at the time of vesting. The number of
shares earned in fiscal 1998 are as follows: 48,748 shares for Mr.
Wright;13,260 shares for Mr. Boehnen; 5,518 shares for Mr. Bolton; 4,752
shares for Ms. Knous; and 19,488 shares for Mr. Noddle. The number of
shares earned in fiscal 1999 are as follows: 48,747 shares for Mr. Wright;
13,260 shares for Mr. Boehnen; 16,179 shares for Mr. Bolton; 10,578 shares
for Ms. Knous; and 19,488 shares for Mr. Noddle. In addition, in fiscal
1998, Mr. Bolton and Mr. Noddle received a special award of 40,000 and
60,000 restricted stock units, respectively, under the Company's 1993
Stock Plan. The award of restricted stock units was made to incent Mr.
Bolton and Mr. Noddle to remain with the Company. See "Report of Executive
Personnel and Compensation Committee." For purposes of this table, the
restricted stock and the restricted stock units are valued based on the
closing price of the Company's Common Stock on the date of grant.
Dividends are paid on the shares of restricted stock. Dividends are not
paid on restricted stock units. As of February 27, 1999, the number and
fair market value of all shares of restricted stock and restricted stock
units held or earned by the above named executive officers were as
follows: Mr. Wright: 97,495, $2,358,160; Mr. Boehnen: 26,520, $641,453;
Mr. Bolton: 61,697, $1,492,296; Ms. Knous: 15,330, $370,794; and Mr.
Noddle: 98,976, $2,383,982.
(3) The total number of option awards in fiscal 1999 and fiscal 1998 includes
restoration options (as more fully described below) received by the
following named executive officers in the amounts stated: Mr. Wright,
206,697 and 158,924 shares in fiscal 1999 and fiscal 1998, respectively;
Mr. Boehnen, 65,441 and 16,070 shares in fiscal 1999 and fiscal 1998,
respectively; and Mr. Noddle, 0 and 61,970 shares in fiscal 1999 and
fiscal 1998, respectively. In fiscal 1999, Mr. Wright received a premium
price option award to purchase 1,400,000 shares of SUPERVALU Common Stock.
See "Option/SAR Grants in Last Fiscal Year" below. A limited stock
appreciation right has been granted in tandem with each option reported in
the table for grants made in fiscal 1997 and fiscal 1998, and is
exercisable for cash in lieu of the related option only upon a Change of
Control. Except for Mr. Wright's premium price option award that includes
700,000 tandem limited stock appreciation rights, no limited stock
appreciation rights were granted in tandem with the grants made in fiscal
1999.
(4) For fiscal 1999, the amount of All Other Compensation reflects
contributions during the fiscal year by the Company under the Qualified
Pre-Tax Savings and Profit Sharing (401(k)) Plan ("401(k) Plan") and to an
unfunded non-qualified deferred compensation plan because of limitations
on the annual compensation that can be taken into account under the 401(k)
Plan as follows: $6,800 and $52,720 for Mr. Wright; $6,800 and $0 for Mr.
Boehnen; and $6,800 and $11,580 for Mr. Noddle. In addition, for fiscal
1999, the amount shown under All Other Compensation for Mr. Wright
includes $10,757, representing the value of the split dollar life
insurance arrangement. See "Report of Executive Personnel and Compensation
Committee--Other Compensation Actions."
(5) Mr. Bolton's employment with the Company began on October 20, 1997.
(6) Ms. Knous' employment with the Company began on September 22, 1997.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------
The following table provides information on grants of stock options and stock
appreciation rights for fiscal 1999 to the named executive officers.
Information in this table has been adjusted to reflect a two-for-one stock
split paid on August 18, 1998.
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Potential
Percent of Realizable Value
Number of Total at Assumed Annual
Securities Options/SARs Rates of Stock Price
Underlying Granted to Exercise Appreciation for Prior Columns
Options/SARs Employees or Base Option Term (1) Annualized (1)(2)
Granted in Price Expiration --------------------- -----------------
Name (#) Fiscal Year ($/Share) Date 5%($) 10%($) 5%($) 10%($)
---- ------------ ------------ --------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael W. Wright 200,000(3) 5.4 $23.08 04/08/08 $2,902,751 $7,356,141 $290,275 $735,614
61,531(4) 1.7 27.66 05/01/01 125,177 253,096 50,919 102,954
145,166(4) 3.9 27.66 06/26/00 327,708 665,044 201,666 409,258
1,400,000(5) 37.8 40.00 12/16/08 0 0 0 0
David L. Boehnen 50,000(3) 1.4 23.08 04/08/08 725,688 1,839,035 72,569 183,904
26,450(4) .7 25.94 05/01/01 88,532 183,564 35,413 73,426
30,810(4) .8 25.94 06/26/00 66,733 135,545 40,040 81,327
3,460(4) .1 25.94 04/11/05 33,088 75,939 5,058 11,609
4,721(4) .1 25.94 04/09/07 62,277 150,947 7,291 17,672
William J. Bolton 40,000(3) .6 23.08 04/08/08 580,550 1,471,228 58,055 147,123
Pamela K. Knous 40,000(3) .6 23.08 04/08/08 580,550 1,471,228 58,055 147,123
Jeffrey Noddle 40,000(3) .6 23.08 04/08/08 580,550 1,471,228 58,055 147,123
</TABLE>
Total potential realizable value for the named officers who received stock
option grants is $6,073,604 and $15,072,995 at the 5% and 10% stock price
growth assumptions respectively. Assuming 5% and 10% stock price growth over a
period of 10 years commencing April 1, 1998, the increase in total stockholder
value from stock price appreciation alone for all shares outstanding on that
date would be $1,806,570,776 and $4,578,848,243.
- --------
(1) These amounts are the result of calculations at the 5% and 10% rates set
by the Securities and Exchange Commission and therefore are not intended
to forecast possible future appreciation, if any, in the Company's stock
price.
(2) Computed by dividing potential realizable value at the assumed annual
rates of stock price appreciation by the term of the option. Original
options are granted with a ten year term. Restoration options (described
below) have a term equal to the remaining term of the original option.
(3) The option has been granted with a ten-year term. 20% of the option is
exercisable upon grant and an additional 20% becomes exercisable on each
of the next four anniversary dates of grant, except that the option
becomes fully exercisable upon a Change of Control. The exercise price may
be paid by delivery of already-owned shares, and tax withholding
obligations related to exercise may be paid by delivery of already-owned
shares or offset of the underlying shares. A "restoration" option (also
referred to as a "reload" option) is granted when the option is exercised
and payment of the exercise price is made by delivery of SUPERVALU Common
Stock. Each restoration option is granted for the number of shares of
Common Stock tendered as payment for the exercise price and tax
withholdings, upon exercise of the original option. The exercise price of
each restoration option is the fair market value of SUPERVALU Common Stock
on the date of grant. Each restoration option is exercisable in full on
the date of grant, and will expire on the same date as the original
option. All options reported in the table are entitled to restoration
options, except for restoration options and the premium price stock option
award (described below).
(4) Grant of a restoration option with a limited stock appreciation right
exercisable for cash in lieu of the option only upon a Change of Control.
(5) This premium price stock option award was made subject to the Company's
stockholders approving an amendment to the 1993 Stock Plan to increase the
award limitation for the Chief Executive Officer from 500,000 to 1,810,000
shares during only the 1998 calendar year. See Item 3. "Proposal to
Approve an Amendment to the SUPERVALU INC. 1993 Stock Plan" below. The
premium price option was granted with a ten-year term and an exercise
price equal to the greater of $40 (approximately 156% of the market price
of SUPERVALU Common Stock on the date of grant) or the market price of
SUPERVALU Common Stock on the date of the 1999 Annual Stockholder's
Meeting. The vesting of the option award is contingent on Mr. Wright
remaining an employee of the Company with the title of either "Chairman
and CEO" or "Chairman" through March 1, 2002, and the Company achieving
either one of two performance hurdles: (a) either the market price of
SUPERVALU Common Stock exceeds the option exercise price for 10
consecutive trading days prior to February 28, 2003 or (b) the net income
growth of the Company during fiscal 2000-2003 must exceed 12.5% compounded
annually, subject to a minimum Return on Invested Capital threshold. No
vesting of the option will occur prior to March 1, 2002, except in the
event Mr. Wright's employment is terminated because of death, permanent
disability or termination without cause. In the event of a Change of
Control of the Company, the option will automatically convert into one
limited stock appreciation right with an exercise price equal to $25.5938,
the market price on the date of grant, for every two option shares
outstanding. No restoration stock option or reload treatment is available
for this award.
10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
- -------------------------------------------------------------------------------
The following table provides information on option exercises in fiscal 1999 by
the named executive officers, and the value of such officers' unexercised
options/SARs at the end of the fiscal year. Information in this table has been
adjusted to reflect a two-for-one stock split paid on August 18, 1998.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-
Underlying Unexercised the-
Options/SARs at Fiscal Money Options/SARs
Shares Year-End (#) at Fiscal Year-End ($)
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael W. Wright ...... 323,661 $4,267,423 586,833 1,740,000(1) $4,019,088 $1,479,231
David L. Boehnen........ 127,279 1,338,778 85,791 82,600 539,685 400,845
William J. Bolton....... 0 0 128,000 212,000 633,246 972,056
Pamela K. Knous......... 0 0 48,000 92,000 194,498 313,934
Jeffrey Noddle.......... 14,256 113,484 330,930 176,002 2,247,759 970,480
</TABLE>
- --------
(1) Includes a premium price stock option award to purchase 1,400,000 shares
of SUPERVALU Common Stock that was made subject to the Company's
stockholders approving an amendment to the 1993 Stock Plan. See Item 3.
"Proposal to Approve an Amendment to the SUPERVALU INC. 1993 Stock Plan."
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------
The following table provides information on awards made to the named executive
officers during the fiscal year. Information in this table has been adjusted
to reflect a two-for-one stock split paid on August 18, 1998.
<TABLE>
<CAPTION>
Number of Shares, Units Performance or Other Period
Name or Other Rights (#)(1) Until Maturation or Payout (1)
---- ----------------------- ------------------------------
<S> <C> <C>
Michael W. Wright........ 23,446 Fiscal Years 1999-2001
David L. Boehnen......... 6,746 Fiscal Years 1999-2001
William J. Bolton........ 8,652 Fiscal Years 1999-2001
Pamela K. Knous.......... 6,490 Fiscal Years 1999-2001
Jeffrey Noddle........... 9,250 Fiscal Years 1999-2001
</TABLE>
- --------
(1) Awards are of stock units under the Company's Long-Term Incentive Plan,
each of which represents the right to receive one share of restricted
stock upon achievement of specified performance objectives. Stock units
will be converted to restricted stock based on the Company's total return
on invested capital ("ROIC") relative to the specified performance
objectives for the fiscal 1999--fiscal 2001 performance period. No stock
units will be converted to restricted stock if the pre-established minimum
ROIC performance objective is not achieved. If the minimum, target or
maximum ROIC performance objective is achieved, then 50%, 100% or 150%,
respectively, of the awarded stock units will be converted to restricted
stock. If the Company's actual ROIC performance falls between the minimum
and target or the target and maximum objectives, the percent of stock
units converting to restricted stock will be extrapolated accordingly.
Shares earned for ROIC performance as described above may be increased if
Company sales exceed 2% of a pre-established sales target, but only if the
ROIC performance is at or above target. At sales growth of 3% over the
sales target, the stock units to be converted to restricted stock will be
increased by 10%, progressing linearly to a 50% increase in such
restricted stock for Company sales of 7% or more over the sales target.
Shares of restricted stock issued upon conversion of stock units would
vest at the end of fiscal 2002, provided that the named officer continues
in the employ of the Company at the time of vesting. No dividends are paid
on stock units. Dividends are paid on all shares of restricted stock that
are issued.
11
<PAGE>
PENSION PLANS
- -------------------------------------------------------------------------------
The following table shows estimated maximum annual benefits which would be
paid to an employee upon retirement at age 65 under the combination of the
Company's tax qualified defined benefit retirement plan, the Non-Qualified
Supplemental Executive Retirement Plan (or, if applicable, the Excess Benefit
Plan) maintained for certain highly compensated employees, and the "Retirement
Benefit Plan Account" of the Company's deferred compensation plans. The table
does not reflect the $130,000 per year limitation on annual benefits payable
from the plans imposed by Section 415 of the Internal Revenue Code, nor the
$160,000 per year limitation on compensation included in final annual average
pay imposed by Section 401(a)(17) of the Internal Revenue Code. The Company's
Non-Qualified Supplemental Executive Retirement Plan and Excess Benefits Plan
allow payment of additional benefits so that retiring employees may receive,
in the aggregate, the benefits they would have been entitled to receive if
such Sections did not impose maximum limitations.
<TABLE>
<CAPTION>
Years of Service (1)
Final Annual -----------------------------------
Average Pay (including Salary and Bonus) 15 20 25 30
- ---------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 250,000................................ $ 55,875 $ 74,500 $ 93,125 $111,750
450,000................................ 103,875 138,500 173,125 207,750
650,000................................ 151,875 202,500 253,125 303,750
850,000................................ 199,875 266,500 333,125 399,750
1,350,000................................ 319,875 423,500 526,125 625,750
1,800,000................................ 427,875 567,500 705,125 841,750
</TABLE>
- --------
(1) The above estimates of annual benefits payable on normal retirement are
computed using the straight-life annuity method and are based on certain
assumptions, including (a) that the employee remains until the normal
retirement age of 65 (although retirement is permitted at age 62 without
benefit reduction because of age); and (b) that the present retirement
plans remain in force until the retirement date. Benefits under plans are
not reduced by the participant's Social Security benefit.
As to each of the individuals named in the Summary Compensation Table above,
their final annual average pay and credited years of service under the plans
as of February 27, 1999, were as follows: Mr. Wright: $1,421,777, 22 years;
Mr. Boehnen: $373,989, 7.8 years; Mr. Bolton: $432,035, 2.8 years; Ms. Knous:
$295,038, 1.4 years; and Mr. Noddle: $638,398, 22.8 years.
During fiscal year 1999, the Executive Personnel and Compensation Committee
adopted or changed certain non-qualified supplemental arrangements for Mr.
Wright and Mr. Bolton. See "Report of Executive Personnel and Compensation
Committee--Other Compensation Actions."
12
<PAGE>
CHANGE IN CONTROL AGREEMENTS
- -------------------------------------------------------------------------------
Change in Control Agreements. The Company has entered into Severance
Agreements with officers of the Company, including those identified in the
Summary Compensation Table above. In general, these agreements entitle the
executive to a lump sum payment if the executive's employment is terminated
(other than for Cause or disability) within two years after a Change of
Control (as defined). The lump-sum cash payment is equal to a multiple of one,
two or three times the executive's annual base salary, annual bonus and the
value of the executive's annual perquisites. The multiple is three for Mr.
Wright, Mr. Boehnen, Mr. Bolton, Ms. Knous and Mr. Noddle; and one or two for
all other officers of the Company. Each executive would also receive a lump-
sum retirement benefit equal to the present value of the additional qualified
pension plan benefits the executive would have accrued under the plan absent
the early termination. Generally, the executive would also be entitled to
continued family medical coverage, dental and life insurance coverage until
the earlier of 24 months after termination or the commencement of comparable
coverage with a subsequent employer. Mr. Wright's Severance Agreement also
provides for payment to be made if his employment is terminated for any reason
during the seventh month following a Change of Control. Each Severance
Agreement includes a covenant not to compete with the Company. Due to the
possible imposition of excise taxes on the payments under the severance
agreement and under certain other benefit plans and programs of the Company
(including such plans mentioned below), all severance benefits payable to an
executive would be increased by the amount equal to the excise tax imposed on
the executive's severance payments plus all taxes attributable to this gross-
up amount.
Several of the Company's compensation and benefit plans contain provisions for
enhanced benefits on a Change of Control. They include stock options,
performance shares, restricted stock awards and executive deferred
compensation plans. Executive officers also hold limited stock appreciation
rights that become exercisable upon a Change of Control, allowing the
executive to receive cash for the bargain element in the related stock option.
The Company's retirement plans provide for full vesting if employment
terminates under specified circumstances following a Change of Control, and
preserve any excess plan assets for the benefit of plan participants for five
years following a Change of Control.
The Company may set aside funds in an irrevocable grantor trust to satisfy its
obligations arising from certain of its benefit plans. Funds will be set aside
in the trust automatically upon a Change of Control. The trust assets would
remain subject to the claims of the Company's creditors.
13
<PAGE>
REPORT OF EXECUTIVE PERSONNEL AND COMPENSATION COMMITTEE
- -------------------------------------------------------------------------------
Compensation Principles
The Executive Personnel and Compensation Committee of the Board of Directors,
composed entirely of independent non-employee directors, has adopted a
comprehensive Executive Compensation Program based on the following
principles:
. The program will enable SUPERVALU to attract, retain and motivate the key
executives necessary for current and long-term success.
. Compensation plans are designed to support SUPERVALU's long range business
strategy.
. Executive compensation is linked to corporate performance and attainment of
designated strategic objectives.
. A significant portion of executive gain is tied to the enhancement of
stockholder value.
. The Committee exercises independent judgment and approval authority with
respect to the executive compensation program and the awards made under the
program.
Compensation Methodology
The structure of the Executive Compensation Program is based on a market
comparison of compensation for equivalent positions in industries from which
SUPERVALU draws executive talent as well as a position evaluation designed to
achieve internal equity based on job responsibility. The Company's primary
market comparison for compensation is the nine companies comprising the peer
group for the performance graph on page 19 plus three additional non-grocery
distribution companies, all adjusted for size based primarily on market
capitalization (collectively, the "Compensation Peer Group"). The Company
engaged outside consulting firms to perform this market comparison in each of
the past seven years. These market comparisons are the basis for designing the
Company's current compensation structure that has a mix of fixed to variable
compensation and short-term to long-term incentive potential approximating the
mix within the Compensation Peer Group. The market comparisons were performed
in each year to ensure that the dollar values of the various plan components
as well as total compensation was comparable to that of the Compensation Peer
Group. In addition to a review of compensation plan design and compensation
levels, the Committee also reviews the Company's performance on a number of
key financial measures relative to the Compensation Peer Group plus selected
other industry companies.
The variable compensation components of the program are designed so that exec-
utives' total compensation will be above that of the Compensation Peer Group
when SUPERVALU's performance is superior, and below that of the Compensation
Peer Group when performance is below industry norms. This fluctuation in com-
pensation value is increased by the substantial use of stock in the program
(as described in more detail in the remainder of this report), so that total
compensation will significantly increase or decrease in direct relation to
SUPERVALU's stock price.
A summary follows which explains the major components of the Executive
Compensation Program, including factors and criteria upon which compensation
was awarded to the Chief Executive Officer for fiscal 1999.
Annual Compensation
Base Salaries. The base salary levels for executive officers are determined
based on three objectives:
. Internal equity based on job responsibility;
. Individual performance and experience; and
. Competitive salary levels with industries from which the Company draws
executive talent.
The Company's salary structure is based on the median salary levels of
companies in similar industries and size to SUPERVALU. Actual salaries may be
set above or below this median depending on individual job performance and
experience.
14
<PAGE>
The Committee annually reviews and approves all salary increases for executive
officers, other than the CEO. Increases for executives below the CEO level are
proposed by the CEO based on performance evaluations, which include both
progress on achievement of financial results and a qualitative assessment of
performance.
The Chairman of the Committee conducts an annual performance evaluation of the
CEO based on written input from all Board members. The following factors are
considered in this performance evaluation: financial results, strategic plan-
ning, leadership, customer service, succession planning, human resource
management/EEO, communications, external relations and Board interface. Salary
adjustments for the CEO are made on a biannual or annual basis depending on
competitive conditions and practices. In fiscal 1999, Mr. Wright's base salary
was increased from $851,760 to $878,778.
Annual Bonuses. All of the Company's executive officers are eligible to
receive an annual cash bonus. The annual bonus plan is designed to motivate
executives to meet or exceed individual goals and corporate financial goals
that support SUPERVALU's business plans. These goals are incorporated into
annual performance measures for each executive. Specifically, the annual bonus
plan for executive officers is designed to stimulate and reward growth in
Company earnings. The Committee assigns target bonus levels to each executive
which are competitive with the Compensation Peer Group. Among executive
officers, these range from 25% of annual base salary to 70% of annual base
salary for the CEO. For officers other than the CEO, ninety percent of this
award potential is tied to corporate net profit performance and the remaining
ten percent is based on a subjective evaluation of performance relative to
personal objectives. The bonus award potential for the CEO is tied solely to
corporate net profit performance. Bonus payments increase, as net profit
growth meets and exceeds the annual growth rate targeted by the Board. The
maximum bonus is limited to twice the target bonus level. Bonuses for the CEO
and four other executive officers are paid from a special plan structured so
that the payment will be tax deductible as "performance based compensation"
under Internal Revenue Code Section 162(m).
Long-Term Incentive Compensation
The Company has implemented a Long-Term Incentive Plan and Stock Option Plans.
Together, these plans tie a significant portion of the executives' total
compensation to long-term results. The long-term incentive potential is
intended to be competitive with programs offered by the Compensation Peer
Group.
Long-Term Incentive Plan. The Committee selects Plan participants, approves
awards and interprets and administers the Long-Term Incentive Plan. In fiscal
1999, the Committee made awards of "performance shares" to executive officers
and profit center presidents. The awards covered the performance period of
fiscal year 1999 through fiscal year 2001. Prior awards included the
performance periods fiscal year 1998 through fiscal year 1999; and fiscal year
1998 through fiscal year 2000. Such awards are set at levels that are expected
to be competitive with long-term compensation offered by the Compensation Peer
Group. The Committee determined minimum, target and maximum payout amounts for
each participant and awards are earned for officers based on corporate return
on invested capital (ROIC) performance relative to pre-set objectives. If
these objectives are met or exceeded, and overall corporate sales exceed the
Company's sales plan by more than 2%, performance shares earned by ROIC
performance may be increased. The awards provide that, if earned, performance
shares would be converted to restricted stock that would vest after one year
of further employment. Executives who receive restricted stock are motivated
to remain with the Company and focus on stockholder value after the award has
actually been earned.
The Committee determined minimum, target and maximum payout amounts for each
participant for the fiscal 1998 through fiscal 1999 performance period based
on corporate ROIC and sales performance for corporate officers, and corporate
ROIC/sales and profit center ROIC/sales performance for key profit center
executives. Application of the criteria set forth in the awards for the fiscal
1998 through fiscal 1999 performance period resulted in corporate
15
<PAGE>
officers earning an aggregate of 170,030 shares of restricted stock and key
profit center executives earning an aggregate of 94,887 shares of restricted
stock in fiscal 1999. Mr. Wright received a payout of 48,747 shares of
restricted stock in fiscal 1999.
Stock Option Plans. The Committee believes that executive gain tied to stock
price appreciation is the most effective way of aligning executive and
stockholder interests. Two key programs together cause executives to view
themselves as owners of a meaningful equity stake in the business over the
long term. They are:
. The executive stock option program; and
. Stock ownership targets for executive officers.
Annual Option Grants. The Committee makes annual grants of stock options to
key employees under established grant guidelines intended to be competitive
with the Compensation Peer Group. The Committee also considers subjective
factors in determining grant size; grants are not automatically tied to a
formula or the optionee's position in the Company. Corporate, profit center or
individual performance will impact the size of an optionee's grant. In
addition, current ownership of stock is a consideration in the size of option
grants for officers and profit center presidents. Based on the stock grant
guidelines and the subjective factors described above, annual grant
recommendations are developed by management, reviewed by the Chief Executive
Officer and presented to the Committee for final approval.
Stock options are granted with an exercise price equal to the market price of
the Company's stock on the date of grant. In order to encourage option
exercise and share ownership, SUPERVALU also permits executives to exercise
options using shares of SUPERVALU stock to pay the exercise price and tax
withholdings. Upon such exercise, SUPERVALU grants the executive a restoration
stock option (commonly referred to as a reload option) for that number of
shares surrendered. Reload options are exercisable at the then current market
price and extend for the remainder of the original option's term.
CEO Stock Option Awards. The Board awarded Mr. Wright a stock option grant of
200,000 shares in April 1998 based upon his performance as reviewed by the
Board and the criteria described above under "Long-Term Incentive
Compensation--Stock Option Plans-- Annual Option Grants." In addition, in
December 1998, the Board awarded Mr. Wright a special premium price stock
option grant for 1,400,000 shares, subject to stockholder approval of an
amendment of the 1993 Stock Plan to increase the award limitations under that
plan for Mr. Wright for the 1998 calendar year. The premium price option was
granted with an exercise price equal to the greater of $40 (approximately 156%
of the market price of SUPERVALU Common Stock on the date of grant) or the
market price of SUPERVALU Common Stock on the date of the 1999 Annual
Stockholder's Meeting. The vesting of the option award is contingent on Mr.
Wright remaining an employee of the Company with the title of either "Chairman
and CEO" or "Chairman" through March 1, 2002, and the Company achieving either
one of two performance hurdles: (a) either the market price of SUPERVALU
Common Stock exceeds the option exercise price for 10 consecutive trading days
prior to February 28, 2003 or (b) the net income growth of the Company during
fiscal 2000--2003 must exceed 12.5% compounded annually, subject to a minimum
ROIC threshold. No vesting of the options will occur prior to March 1, 2002,
except in the event Mr. Wright's employment is terminated because of death,
permanent disability or termination without cause. No restoration stock option
or reload treatment is available for this award. The size of this special
grant was derived from adding three years of competitive option grants and the
three-year projected value of Mr. Wright's long-term incentive plan potential,
adjusted for the lower value of a premium price option attributable to the
performance vesting risk and an exercise price well in excess of the current
market price. Because of the three-year front load of competitive long-term
compensation value, it is currently anticipated that this premium price option
grant will replace annual option grants and long-term incentive plan
performance share awards to Mr. Wright for the next three years. The "value"
of this grant therefore approximates three years of competitive long-term
incentive
16
<PAGE>
value (options plus long-term incentive plan) for Mr. Wright, but provides
greater upside gain potential and greater downside risk (likelihood of no
gain). The grant size and exercise price are such that gain potential from
this award will only exceed the gain potential of the former program when the
stock price substantially exceeds the premium price option exercise price. The
Committee's rationale for this premium price stock option award was to put
maximum emphasis on stock price performance over the next four years, with a
corresponding significant incentive potential tied to a high rate of stock
price growth. Stockholders must receive a significant return on their
investment before this option will generate any gains for Mr. Wright. The
Committee was advised by SCA Consulting in determining the number and design
of the option grant.
Restricted Stock Unit Awards. In October of 1997, the Committee approved a
special award of restricted stock units to two executive officers. The
objective of this special grant was to incent these key executive officers to
remain with the Company. These stock units vest in installments when the
recipient attains the age of 56, and fully vest when the recipient attains age
58 (both officers are currently age 52). The restricted stock units will be
paid out in SUPERVALU stock upon attainment of the later of age 60 or one year
following retirement, provided the non-compete provisions of the agreement
have been adhered to between the vesting and payout dates.
Stock Ownership Guidelines
Stock ownership guidelines for executive officers have been established so
that they face the same downside risk, and upside potential, as stockholders
experience. Executives are expected to show significant progress toward
reaching these ownership goals. The goal for the CEO is six times annual base
salary, excluding vested and unexercised stock options. Mr. Wright's current
stock ownership is in excess of nine times his base salary, excluding vested
and unexercised stock options.
Other Compensation Actions
During fiscal 1998, the Committee restructured the CEO's benefits under the
Supplemental Executive Retirement Plan by substantially reducing such benefits
and applying the resulting savings to fund a split-dollar life insurance
program for the CEO. The split-dollar life insurance program has a more
favorable long term expense impact on the Company than would have been the
case with continuation of the prior pension benefits. This new program went
into effect in fiscal 1999.
As part of the terms of employment, the Committee approved a special
retirement agreement with Mr. William Bolton, Executive Vice President,
President and Chief Operating Officer--Retail Food Companies, granting him
supplemental retirement plan credited service equal to two years of credited
service for each year of employment subject to offset by the earned qualified
retirement plan benefit and all vesting conditions of the qualified retirement
plan. This agreement was made in recognition of the fact that Mr. Bolton was
hired later in his career and would not be able to derive much benefit from
SUPERVALU's qualified retirement plan.
17
<PAGE>
Policy Regarding Applicable Tax Code Provision
Section 162(m) of the Internal Revenue Code imposes limits on tax deductions
for executive compensation in excess of $1 million paid to any of the top five
executive officers named in the Summary Compensation Table unless certain
conditions are met. The Committee makes every reasonable effort to preserve
this tax deduction consistent with the principles of the Executive
Compensation Program.
Conclusion
The Committee believes that the caliber and motivation of executive management
is fundamentally important to the Company's performance. The Committee plays a
very active role in ensuring that SUPERVALU's compensation plans implement its
key compensation principles. Independent compensation consultants have as-
sisted the Committee in designing these plans, assessing the effectiveness of
the overall program and keeping overall compensation competitive with that of
relevant peer companies. Total compensation is intended to be above industry
averages when performance is superior, and below competitive levels when per-
formance is below expected levels or SUPERVALU stock fails to appreciate. The
Committee believes that the Executive Compensation Program has been a substan-
tial contributor toward motivating executives to focus on the creation of
stockholder value.
Respectfully submitted,
Edwin C. Gage, Chairman
Herman Cain
Lawrence A. Del Santo
William A. Hodder
Richard L. Knowlton
Carole F. St. Mark
18
<PAGE>
PERFORMANCE GRAPH
- -------------------------------------------------------------------------------
The following graph compares the cumulative total stockholder return on
SUPERVALU's Common Stock for the last five fiscal years with that of the S&P
500 Stock Index and a group of peer companies in the wholesale and retail
grocery industries. The graph assumes the investment of $100 in each company
on February 27, 1994 and the reinvestment of all dividends on a quarterly
basis. The stock price performance shown on the graph below is not a
projection of future price performance.
Comparison of Five-Year Cumulative Total Return
SUPERVALU INC., S&P 500 Stock Index and Composite Peer Group (1)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------- ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
SUPERVALU.......................... $100.00 $71.95 $93.02 $92.42 $145.74 $151.66
S&P 500............................ 100.00 107.30 144.42 182.11 245.72 294.19
Peer Group......................... 100.00 91.09 117.15 130.81 169.39 174.35
</TABLE>
- --------
(1)The composite peer group is comprised of the following food wholesalers and
food retailers: Albertson's, Inc., American Stores Company, Fleming
Companies, Inc., Food Lion, Inc., Great Atlantic & Pacific Tea Company, The
Kroger Company, Nash Finch Company, Richfood Holdings Inc. and Safeway Inc.
The returns of the peer group companies were weighted based on their
respective market capitalization and on the relative percentage of
SUPERVALU's operating profit realized from wholesale and retail food
operations (excluding fiscal 1995 restructuring charges) for each year. The
performance graph indicates results calculated to the last business day in
February each year.
19
<PAGE>
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS (ITEM 2)
- -------------------------------------------------------------------------------
The Company is seeking the ratification by the stockholders of its appointment
of KPMG Peat Marwick LLP ("KPMG") to audit the books and accounts of the
Company and its subsidiaries for the fiscal year ending February 26, 2000. A
representative of KPMG will be present at the Annual Meeting with the
opportunity to make a statement and to respond to questions.
The Board of Directors recommends a vote "FOR" the proposal to ratify the
appointment of KPMG Peat Marwick LLP as independent auditors.
Change in Accountants. On May 8, 1998, the Company determined not to re-engage
its former independent auditors, Deloitte & Touche LLP ("Deloitte") and
appointed KPMG as its new independent auditors, effective immediately. This
determination followed the Company's decision to seek proposals from
independent accounting firms, including Deloitte, with respect to the
engagement of independent accountants to audit the Company's financial
statements for the fiscal year ending February 27, 1999. The decision not to
re-engage Deloitte and to retain KPMG was approved by the unanimous consent of
the Company's Board of Directors upon the recommendation of its Audit
Committee.
The reports of Deloitte on the financial statements of the Company for its
fiscal years ended February 28, 1998 (fiscal 1998) and February 22, 1997
(fiscal 1997) did not contain any adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. During fiscal 1998 and fiscal 1997 and the interim period from
February 28, 1998 through May 8, 1998, (i) there were no disagreements between
the Company and Deloitte on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of Deloitte, would have caused Deloitte to make
reference to the subject matter of the disagreement in connection with its
reports (a "Disagreement") and (ii) there were no reportable events, as
defined in Item 304(a)(1)(v) of Regulation S-K of the Securities and Exchange
Commission (a "Reportable Event").
The Company had not, during fiscal 1998 and fiscal 1997 or the interim period
from February 28, 1998 through May 8, 1998, consulted with KPMG regarding (i)
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, and either a written report was provided
to the Company or oral advice was provided that KPMG concluded was an
important factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issue, or (ii) any matter that was
either the subject of a Disagreement with Deloitte or a Reportable Event.
The Company reported the change in accountants on Form 8-K on May 12, 1998.
The Form 8-K contained a letter from Deloitte addressed to the Securities and
Exchange Commission stating that it agreed with certain of the above
statements, and had no basis to agree or disagree with the remaining
statements.
20
<PAGE>
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE SUPERVALU INC. 1993 STOCK PLAN
(ITEM 3)
- -------------------------------------------------------------------------------
Background of Proposed Amendment. The Board of Directors recommends that the
stockholders approve an amendment to Section 4(d) of the 1993 Stock Plan, as
amended (the "Plan"), to increase the award limitations from 500,000 to
1,810,000 shares for the Chief Executive Officer for stock awards made to him
during the 1998 calendar year. The Plan has previously been approved by the
stockholders.
On December 16, 1998, the Board of Directors awarded Mr. Michael W. Wright,
Chairman, President and Chief Executive Officer of the Company, a 1,400,000
share premium price stock option under the Plan, subject to stockholder
approval of the above mentioned amendment. See the additional discussion of
such grant under the heading "Report of Executive Personnel and Stock Option
Committee--Long-Term Incentive Compensation--CEO Stock Option Awards."
Summary of Plan. A copy of the amended Plan is attached as Exhibit A to this
Proxy Statement. This discussion is only a summary. You should refer to the
Plan for more complete information.
Purpose. The purpose of the Plan is to promote the interests of the Company
and its stockholders by aiding the Company in attracting and retaining key
management employees and non-employee directors of the Company capable of
assuring the future success of the Company, to offer such individuals
incentives to put forth maximum efforts for the success of the Company's
business and to afford such individuals an opportunity to acquire a
proprietary interest in the Company.
Administration. The Plan is administered by the Executive Personnel and
Compensation Committee. The Committee has the authority to select the
individuals to whom awards are granted, to determine the types of awards and
the number of shares of Common Stock covered by awards and to set the terms
and conditions of awards. The Committee has the authority to establish rules
for the administration of the Plan, and its determinations and interpretations
are binding. The Committee may delegate its authority to one or more officers;
provided, however, that the Committee may not delegate its authority with
regard to executive officers or directors of the Company. Grants made to non-
employee directors are determined by either the full Board of Directors of the
Company, upon recommendation of the Director Affairs Committee, or a
subcommittee of the Director Affairs Committee comprised solely of non-
employee directors.
Eligible Participants. Any employee, officer, consultant, independent
contractor or non-employee director of the Company and its affiliates selected
by the Committee is eligible to receive awards under the Plan. The Committee
limits eligibility to the key management group, defined by level of job
responsibility. There were approximately 710 persons as of April 1, 1999 who
were eligible as a class to receive awards under the Plan.
The following table sets forth the number of shares of SUPERVALU Common Stock
covered by options or other awards granted under the Plan during the 1999
fiscal year. Awards to the most highly compensated executive officers are set
forth in the Summary Compensation Table on page 9.
<TABLE>
<CAPTION>
No. of
No. of Shares
Shares Underlying
Name and Underlying Restricted
Principal Position Options Stock Units
------------------ ---------- -----------
<S> <C> <C>
All current Executive
Officers as a Group.... 3,550,452 100,000
All current Non-Employee
Directors as a Group... 20,266 0
All Employees as a Group
(excluding Executive
Officers).............. 1,914,351 0
</TABLE>
The number and type of awards that will be granted in the future under the
Plan to officers, employees and non-employee directors are not determinable as
the Committee will make such determinations in its discretion.
21
<PAGE>
Types of Awards. The Plan permits the grant of a variety of different types of
awards:
. Stock options, including incentive stock options ("ISOs") meeting the
requirements of Section 422 of the Internal Revenue Code, stock options
that are not ISOs ("Non-qualified Stock Options") and restoration options;
. Stock appreciation rights ("SARs");
. Restricted stock;
. Stock units;
. Performance awards; and
. Other awards valued in whole or in part by reference to or based on
SUPERVALU's stock.
The following types of awards have been made under the Plan:
. Stock options (which may include limited SARs for officers); and
. Restricted stock and restricted stock units.
Awards may be granted for any amount of cash consideration or for no cash
consideration so long as legal requirements are met. The exercise price per
share under any stock option and the grant price of any SAR may not be less
than 100% of the fair market value of the Company's Common Stock on the date
of the grant of such option or SAR.
Stock Options. Options may be exercised by payment of the exercise price,
either in cash or, at the discretion of the Committee, by using shares of
Common Stock or other consideration having a fair market value equal to the
exercise price. The Committee may grant restoration options with terms and
conditions established by the Committee. Restoration options are granted when
a participant pays the exercise price of the option by using previously owned
shares of Common Stock. The new option would be for that number of shares
surrendered to pay the exercise price and any tax withholding.
Stock Appreciation Rights. The holder of an SAR is entitled to receive the
excess of the fair market value of a specified number of shares over the grant
price of the SAR.
Restricted Stock. Shares of restricted stock and restricted stock units may be
awarded subject to such restrictions and other terms and conditions as the
Committee may impose. Restricted stock may not be transferred by the holder
until the restrictions established by the Committee lapse. Holders of
restricted stock units would have the right to receive shares of Common Stock
at some future date.
Other Awards. Performance awards provide the right to receive awards upon the
achievement of the goals established by the Committee. A performance award
granted under the Plan may be denominated or payable in cash, shares of Common
Stock or restricted stock, or other securities or property.
Maximum Number of Shares. Currently, up to 9,600,000 shares of the Company's
Common Stock may be issued as awards under the Plan (subject to certain
adjustments). If any shares to which an award relates are forfeited, or if an
award is otherwise terminated then the number of shares with respect to such
award, to the extent of any such forfeiture or termination, will again be
available for grant under the Plan. As of April 1, 1999, 3,071,136 shares had
been issued, 5,585,069 shares were subject to outstanding awards, and 943,795
shares were available for future grants. As of April 1, 1999, approximately
460 employees held awards under the Plan.
The closing price of SUPERVALU Common Stock on April 1, 1999, as reported on
the New York Stock Exchange, was $21.875 per share.
Adjustments. The Committee may make adjustments to awards under the Plan in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available if any corporate transaction or event affects
the shares of Common Stock so that an adjustment is appropriate.
Term. The Plan terminates on April 13, 2003, and no awards may be made after
that date.
Amendments. The Board of Directors may amend, alter or discontinue the Plan at
any time, provided that stockholder approval must be obtained in certain
events.
22
<PAGE>
Federal Income Tax Consequences. The following is a summary of the principal
federal income tax consequences generally applicable to options and SARs under
the Plan.
The grant of an option or SAR is not expected to result in any taxable income
for the recipient. The holder of an ISO generally will have no taxable income
upon exercising the ISO (except that a liability may arise for alternative
minimum tax), and the Company will not be entitled to a tax deduction when an
ISO is exercised. When a participant exercises a Non-qualified Stock Option,
the optionee must recognize ordinary income equal to the difference between
the fair market value of the shares acquired and the exercise price, and the
Company will be entitled to a tax deduction for the same amount. Upon
exercising an SAR, the amount of any cash received and the fair market value
on the exercise date of any Common Stock received are taxable to the recipient
as ordinary income and deductible by the Company. The tax consequences to a
participant upon a disposition of shares acquired through the exercise of an
option or SAR will depend on how long the shares have been held and upon
whether such shares were acquired by exercising an ISO or by exercising a Non-
qualified Stock Option or SAR. If shares acquired on the exercise of an ISO
are held for at least one year after exercise and two years from the date the
ISO was granted, the optionee will recognize long term capital gain or loss in
an amount equal to the difference between the option price for the shares and
the sale price. Generally, there will be no tax consequence to the Company in
connection with the disposition of shares acquired under an option, except
that the Company may be entitled to a tax deduction in the case of a
disposition of ISO shares before the applicable ISO holding periods have been
satisfied.
The Board of Directors recommends a vote "FOR" the proposal to amend the 1993
Stock Plan.
23
<PAGE>
OTHER INFORMATION
- -------------------------------------------------------------------------------
SUPERVALU Mailing Address
The Company's mailing address is: P.O. Box 990, Minneapolis, MN 55440.
Stockholders Proposals for 2000 Annual Meeting
All proposals of stockholders that are requested to be included in the
Company's proxy statement for the 2000 Annual Meeting must be received by the
Corporate Secretary on or before January 11, 2000, to be included.
Any other stockholder proposals to be presented at the 2000 Annual Meeting
must be given in writing to the Secretary of the Company and received at the
principal executive offices of the Company no later than the close of business
on March 1, 2000 nor earlier than January 31, 2000. The proposal must contain
specific information required by the Company's Restated Bylaws, a copy of
which may be obtained by writing to the Secretary of the Company.
Director Nominations
In accordance with procedures set forth in the Company's Bylaws, stockholders
may propose nominees for election to the Board of Directors by timely written
notice to the Corporate Secretary, generally no less than sixty days and no
more than ninety days prior to the first anniversary date of the last annual
meeting.
Expenses of Solicitation
This solicitation of proxies is being made by SUPERVALU and it pays the cost
of soliciting proxies. The Company arranges with brokerage houses, custodians,
nominees and other fiduciaries to send proxy material to their principals, and
the Company reimburses them for their expenses. In addition to solicitation by
mail, proxies may be solicited by SUPERVALU employees, by telephone or
personally. No additional compensation would be paid for such employee
solicitation. The Company has also retained Georgeson & Company, Inc. to
assist in the solicitation of proxies for an estimated fee of $10,000 plus
out-of-pocket expenses.
Compensation Committee Interlocks and Insider Participation
As indicated above, Edwin C. Gage (Chairman), Herman Cain, Lawrence A. Del
Santo, William A. Hodder, Richard L. Knowlton and Carole F. St. Mark served as
members of the Executive Personnel and Compensation Committee during fiscal
1999. The members of the Committee do not participate in any interlocking
directorships. Mr. Gage and certain family members, as trustees for revocable
trusts, are general partners, among others, of Carlson Real Estate Company, a
limited partnership which leases a retail supermarket in Shakopee, Minnesota,
to the Company for a term ending in 2008, with options to renew. The annual
rental is $224,000, increasing to $232,000 in 2003, which the Company believes
to be a fair market rental. The leased premises are subleased to an
independent retail supermarket operator.
Section 16(a) Beneficial Ownership Reporting Compliance
The rules of the Securities and Exchange Commission require the Company's
directors, executive officers, and holders of more than 10% of the Company's
Common Stock to file reports of stock ownership and changes in ownership. To
the best of the Company's knowledge, there were no late or inaccurate filings
in fiscal 1999. In making this statement, the Company has relied upon written
representations of its directors and executive officers.
24
<PAGE>
EXHIBIT A
SUPERVALU INC.
1993 STOCK PLAN
SECTION 1. PURPOSE.
The purpose of the Plan is to promote the interests of the Company and its
stockholders by aiding the Company in attracting and retaining key management
personnel and non-employee directors of the Company capable of assuring the
future success of the Company, to offer such individuals incentives to put
forth maximum efforts for the success of the Company's business and to afford
such individuals an opportunity to acquire a proprietary interest in the
Company.
SECTION 2. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company and (ii)
any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based Award
granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.
(e) "Committee" shall mean a committee of the Board of Directors of the
Company designated by such Board to administer the Plan, 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 Awards granted under the Plan to qualify under Rule
16b-3. Each member of the Committee shall be a "Non-Employee Director"
within the meaning of Rule 16b-3.
(f) "Company" shall mean SUPERVALU INC., a Delaware corporation, and any
successor corporation.
(g) "Eligible Person" shall mean any employee, officer, consultant or
independent contractor providing services to the Company or any Affiliate,
who the Committee determines to be an Eligible Person, or any director of
the Company who is not an employee of the Company or an Affiliate.
(h) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair
market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee. Notwithstanding
the foregoing, unless otherwise determined by the Committee, the Fair
Market Value of Shares on a given date for purposes of the Plan shall be
the average of the opening and closing sale price of the Shares as reported
on the New York Stock Exchange on such date or, if such Exchange is not
open for trading on such date, on the day closest to such date when such
Exchange is open for trading.
A-1
<PAGE>
(i) "Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422
of the Code or any successor provision.
(j) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(k) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option, and shall include Restoration Options.
(l) "Other Stock-Based Award" shall mean any right granted under Section
6(e) of the Plan.
(m) "Participant" shall mean an Eligible Person designated to be granted
an Award under the Plan.
(n) "Performance Award" shall mean any right granted under Section 6(d)
of the Plan.
(o) "Person" shall mean any individual, corporation, partnership,
association or trust.
(p) "Plan" shall mean this 1993 Stock Plan, as amended from time to time.
(q) "Restoration Option" shall mean any Option granted under Section
6(a)(iv) of the Plan.
(r) "Restricted Stock" shall mean any Share granted under Section 6(c) of
the Plan.
(s) "Restricted Stock Unit" shall mean any unit granted under Section
6(c) of the Plan evidencing the right to receive a Share (or a cash payment
equal to the Fair Market Value of a Share) at some future date.
(t) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation.
(u) "Shares" shall mean shares of Common Stock, $1.00 par value, of the
Company or such other securities or property as may become subject to
Awards pursuant to an adjustment made under Section 4(c) of the Plan.
(v) "Stock Appreciation Right" shall mean any right granted under Section
6(b) of the Plan.
SECTION 3. ADMINISTRATION.
(a) Power and Authority of the Committee. The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan and to applicable
law, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to each
Participant under the Plan; (iii) determine the number of Shares to be covered
by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options
or the lapse of restrictions relating to Restricted Stock, Restricted Stock
Units or other Awards; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended; (vii) determine
whether, to what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with
respect to an Award under the Plan shall be deferred either automatically or
at the election of the holder thereof or the Committee; (viii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (ix) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (x) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive and
binding upon any Participant, any holder or beneficiary of any Award and any
employee of the Company or any Affiliate.
A-2
<PAGE>
(b) 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 powers and duties under the Plan with regard
to officers or directors of the Company or any Affiliate who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
(c) Power and Authority of the Board of Directors. Notwithstanding anything
to the contrary contained herein, the Board of Directors may, at any time and
from time to time, without any further action of the Committee, exercise the
powers and duties of the Committee under the Plan.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section 4(c), the
aggregate number of Shares which may be issued under all Awards under the Plan
shall be 9,600,000. Shares to be issued under the Plan may be either Shares
reacquired and held in the treasury or authorized but unissued Shares. If any
Shares covered by an Award or to which an Award relates are not purchased or
are forfeited, or if an Award otherwise terminates without delivery of any
Shares, then the number of Shares counted against the aggregate number of
Shares available under the Plan with respect to such Award, to the extent of
any such forfeiture or termination, shall again be available for granting
Awards under the Plan.
(b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of
Shares covered by such Award or to which such Award relates shall be counted
on the date of grant of such Award against the aggregate number of Shares
available for granting Awards under the Plan.
(c) Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company or other similar corporate transaction or event affects the Shares
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 shall, in
such manner as it may deem equitable, adjust any or all of (i) the number and
type of Shares (or other securities or other property) which thereafter may be
made the subject of Awards, (ii) the number and type of Shares (or other
securities or other property) subject to outstanding Awards and (iii) the
purchase or exercise price with respect to any Award; provided, however, that
the number of Shares covered by any Award or to which such Award relates shall
always be a whole number.
(d) Award Limitations Under the Plan. No Eligible Person, who is an employee
of the Company at the time of grant, may be granted any Option, Stock
Appreciation Right and such Other Stock-Based Award (the value of which is
based solely on an increase in the value of the Shares after the date of
grant) for more than 500,000 Shares (subject to adjustment as provided for in
Section 4(c)), taking into account all such awards granted by the Company
pursuant to any of its stock option compensation plans, in any calendar year
period beginning with the period commencing January 1, 1997. Notwithstanding,
the foregoing, the above mentioned annual limitation shall be increased to
1,810,000 Shares (subject to adjustment as provided for in Section 4(c)) for
awards made to the Chief Executive Officer of the Company during only the
calendar year that commenced on January 1, 1998. The foregoing annual
limitations specifically includes the grant of any Awards representing
"qualified performance-based compensation" within the meaning of Section
162(m) of the Code.
A-3
<PAGE>
SECTION 5. ELIGIBILITY.
Any Eligible Person, including any Eligible Person who is an officer or
director of the Company or any Affiliate, shall be eligible to be designated a
Participant. In determining which Eligible Persons shall receive an Award and
the terms of any Award, the Committee may take into account the nature of the
services rendered by the respective Eligible Persons, their present and
potential contributions to the success of the Company or such other factors as
the Committee, in its discretion, shall deem relevant. Notwithstanding the
foregoing, an Incentive Stock Option may only be granted to full or part-time
employees (which term as used herein includes, without limitation, officers
and directors who are also employees) and an Incentive Stock Option shall not
be granted to an employee of an Affiliate unless such Affiliate is also a
"subsidiary corporation" of the Company within the meaning of Section 424(f)
of the Code or any successor provision.
SECTION 6. AWARDS.
(a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that such
purchase price shall not be less than 100% of the Fair Market Value of a
Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the
Committee.
(iii) Time and Method of Exercise. The Committee shall determine the time
or times at which an Option may be exercised in whole or in part and the
method or methods by which, and the form or forms (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards
or other property, or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant exercise price) in which,
payment of the exercise price with respect thereto may be made or deemed to
have been made.
(iv) Restoration Options. The Committee may grant Restoration Options,
separately or together with another Option, pursuant to which, subject to
the terms and conditions established by the Committee and any applicable
requirements of Rule 16b-3 or any other applicable law, the Participant
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 or
withholding of Shares pursuant to the relevant provisions of the plan or
agreement relating to such option, which new Option would be an Option to
purchase the number of Shares not exceeding the sum of (A) the number of
Shares so provided as consideration upon the exercise of the previously
granted option to which such Restoration Option relates, (B) the number of
Shares, if any, tendered or withheld as payment of the amount to be
withheld under applicable tax laws in connection with the exercise of the
option to which such Restoration Option relates, and (C) the number of
previously owned Shares, if any, tendered as payment for additional tax
obligations of the Participant in connection with the exercise of the
option to which such Restoration Option relates pursuant to the relevant
provisions of the plan or agreement relating to such option. Restoration
Options may be granted with respect to options previously granted under the
Plan or any other stock option plan of the Company, and may be granted in
connection with any option granted under the Plan or any other stock option
plan of the Company at the time of such grant.
(b) Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants subject to the terms of the Plan and
any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise
thereof the excess of (i) the Fair Market Value of one Share on the date of
exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant
price of the Stock Appreciation Right as specified by the Committee, which
A-4
<PAGE>
price shall not be less than 100% of the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right. Subject to the terms of the
Plan and any applicable Award Agreement, the grant price, term, methods of
exercise, dates of exercise, methods of settlement and any other terms and
conditions of any Stock Appreciation Right shall be as determined by the
Committee. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is hereby
authorized to grant Awards of Restricted Stock and Restricted Stock Units to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted Stock Units
shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share
of Restricted Stock or the right to receive any dividend or other right or
property with respect thereto), which restrictions may lapse separately or
in combination at such time or times, in such installments or otherwise as
the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under the Plan
shall be evidenced by issuance of a stock certificate or certificates,
which certificate or certificates shall be held by the Company. Such
certificate or certificates shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock. In the
case of Restricted Stock Units, no Shares shall be issued at the time such
Awards are granted.
(iii) Forfeiture; Delivery of Shares. Except as otherwise determined by
the Committee, upon termination of employment (as determined under criteria
established by the Committee) during the applicable restriction period, all
Shares of Restricted Stock and all Restricted Stock Units at such time
subject to restriction shall be forfeited and reacquired by the Company;
provided, however, that the Committee may, when it finds that a waiver
would be in the best interest of the Company, waive in whole or in part any
or all remaining restrictions with respect to Shares of Restricted Stock or
Restricted Stock Units. Any Share representing Restricted Stock that is no
longer subject to restrictions shall be delivered to the holder thereof
promptly after the applicable restrictions lapse or are waived. Upon the
lapse or waiver of restrictions and the restricted period relating to
Restricted Stock Units evidencing the right to receive Shares, such Shares
shall be issued and delivered to the holders of the Restricted Stock Units.
(d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or
in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. Subject to the terms of
the Plan and any applicable Award Agreement, the performance goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.
(e) Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan;
provided, however, that such grants must comply with Rule 16b-3 and applicable
law. Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and
A-5
<PAGE>
conditions of such Awards. Shares or other securities delivered pursuant to a
purchase right granted under this Section 6(e) shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms (including without limitation, cash, Shares, promissory notes, other
securities, other Awards or other property or any combination thereof), as the
Committee shall determine, the value of which consideration, as established by
the Committee, shall not be less than 100% of the Fair Market Value of such
Shares or other securities as of the date such purchase right is granted.
(f) General.
(i) No Cash Consideration for Awards. Awards shall be granted for no cash
consideration or for such minimal cash consideration as may be required by
applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with or in substitution for any other Award or any award granted
under any plan of the Company or any Affiliate other than the Plan. Awards
granted in addition to or in tandem with other Awards or in addition to or
in tandem with awards granted under any such other plan of the Company or
any Affiliate may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.
(iii) Forms of Payment under Awards. Subject to the terms of the Plan and
of any applicable Award Agreement, payments or transfers to be made by the
Company or an Affiliate upon the grant, exercise or payment of an Award may
be made in such form or forms as the Committee shall determine (including,
without limitation, cash, Shares, promissory notes, other securities, other
Awards or other property or any combination thereof), and may be made in a
single payment or transfer, in installments or on a deferred basis, in each
case in accordance with rules and procedures established by the Committee.
Such rules and procedures may include, without limitation, provisions for
the payment or crediting of reasonable interest on installment or deferred
payments.
(iv) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee.
(v) Restrictions; Securities Exchange Listing. All certificates for
Shares or other securities delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan or
the rules, regulations and other requirements of the Securities and
Exchange Commission and any applicable federal or state securities laws,
and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. If the
Shares or other securities are traded on a securities exchange, the Company
shall not be required to deliver any Shares or other securities covered by
an Award unless and until such Shares or other securities have been
admitted for trading on such securities exchange.
SECTION 7. AMENDMENT AND TERMINATION; ADJUSTMENTS.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the Company 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:
(i) would cause Rule 16b-3 to become unavailable with respect to the
Plan;
A-6
<PAGE>
(ii) would violate the rules or regulations of the New York Stock
Exchange, any other securities exchange or the National Association of
Securities Dealers, Inc. that are applicable to the Company; or
(iii) would cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan.
(b) Amendments to Awards. The Committee may waive any conditions 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 herein provided.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.
SECTION 8. INCOME TAX WITHHOLDING AND PAYMENT.
In order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of a Participant,
are withheld or collected from such Participant. In order to assist a
Participant in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise or receipt of (or the lapse of
restrictions relating to) an Award, the Committee, in its discretion and
subject to such additional terms and conditions as it may adopt, may permit
the Participant to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes or (ii) delivering
to the Company Shares other than Shares issuable upon exercise or receipt of
(or the lapse of restrictions relating to) such Award with a Fair Market Value
equal to the amount of such taxes. In addition to the 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 the Participant to elect to deliver to the Company Shares (other
than Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award) with a Fair Market Value equal to the amount of such
additional federal and/or state income taxes imposed on the Participant in
connection with the exercise of the Award. All elections, if any, must be made
on or before the date that the amount of tax to be withheld is determined.
SECTION 9. GENERAL PROVISIONS.
(a) No Rights to Awards. No Eligible Person, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b) Award Agreements. No Participant will have rights under an Award granted
to such Participant unless and until an Award Agreement shall have been duly
executed on behalf of the Company.
(c) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements
may be either generally applicable or applicable only in specific cases.
A-7
<PAGE>
(d) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate, nor will it affect in any way the right of the Company or an
Affiliate to terminate such employment at any time, with or without cause. In
addition, the Company or an Affiliate may at any time dismiss a Participant
from employment free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.
(e) Governing Law. The validity, construction and effect of the Plan or any
Award, and any rules and regulations relating to the Plan or any Award, shall
be determined in accordance with the laws of the State of Minnesota.
(f) Severability. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Award under any law deemed 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 or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such Award shall
remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award 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 any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash shall be paid in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.
(i) 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.
SECTION 10. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective as of April 14, 1993, subject to approval by the
stockholders of the Company within one year thereafter.
SECTION 11. TERM OF THE PLAN.
Unless the Plan shall have been discontinued or terminated as provided in
Section 7(a), the Plan shall terminate on April 13, 2003. No Award shall be
granted after the termination of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award
theretofore granted may extend beyond the termination of the Plan, and the
authority of the Committee provided for hereunder with respect to the Plan and
any Awards, and the authority of the Board of Directors of the Company to
amend the Plan, shall extend beyond the termination of the Plan.
A-8
<PAGE>
Printed with soy
based inks on
recycled
paper containing at least 10% fibers from
paper recycled by
consumers.
<PAGE>
SUPERVALU INC.
June 30, 1999 Annual Meeting of Stockholders
The Radisson Hotel South & Plaza Tower
7800 Normandale Boulevard
Bloomington, Minnesota 55439-3145
612-835-7800
The Annual Meeting will begin at 10:30 a.m. at the Radisson Hotel South &
Plaza Tower. Refreshments will be available before and after the Annual Meeting.
[MAP APPEARS HERE]
- --------------------------------------------------------------------------------
SUPERVALU INC.
JUNE 30, 1999 ANNUAL MEETING OF STOCKHOLDERS
This Proxy is solicited on behalf of the Board of Directors of the Company.
The stockholder(s) named on this card hereby appoint Michael W. Wright and
John P. Breedlove, and each of them, as their proxy, with power of substitution
to vote at the Annual Meeting as directed below. The proxies may also vote, in
their discretion, upon all other matters that may properly come before the
Meeting, or any adjournment or adjournments thereof. The shares will be voted as
if the stockholder(s) were personally present at the meeting. All former proxies
are revoked. If not otherwise specified, shares will be voted as recommended by
the Board of Directors.
o Voting by Mail. If you wish to vote by mailing this proxy, please sign,
mark, date and return it in the enclosed postage-paid envelope.
o Voting by Telephone. If you wish to vote by telephone, please follow the
instructions on the reverse side of this card; if you vote by telephone you
do not need to return the proxy card.
o Voting by Internet. If you wish to vote by Internet, please follow the
instructions on the reverse side of this card; if you vote by Internet you
do not need to return the proxy card.
o SUPERVALU Employees. If you are a current or former employee of SUPERVALU
and have an interest in SUPERVALU common stock through a SUPERVALU employee
benefit plan, your interest as of May 3, 1999 is shown on this card. Your
vote will provide voting instructions to the Trustees of the plans. If no
instructions are given, the Trustees will vote the shares pursuant to the
terms of the plans.
Please mark this proxy as indicated on the reverse side to vote on any item.
(Continued and to be signed on other side.)
<PAGE>
COMPANY #
CONTROL #
There are three ways to vote your proxy
Your telephone or Internet vote authorizes the Named Proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE TOLL FREE 1-800-240-6326 QUICK *** EASY *** IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which is located above.
o Follow the simple instructions provided.
o Please DO NOT hang up until you have been prompted and have replied
regarding your attendance at the Annual Meeting.
VOTE BY INTERNET http://www.eproxy.com/svu/ QUICK *** EASY *** IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week. You will
be prompted to enter your 3-digit Company Number and your 7-digit Control
Number which is located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
o Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to SUPERVALU INC., c/o Shareowner
Services, P.O. Box 64873, St. Paul, MN 55164-9397.
NOTE: The deadline for electronic voting by telephone or Internet is 11:59 p.m.
(CDT), Monday, June 28, 1999.
IF YOU VOTE BY TELEPHONE OR INTERNET, DO NOT MAIL BACK YOUR PROXY CARD.
Please detach here
- --------------------------------------------------------------------------------
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3
1. ELECTION OF DIRECTORS: 01 Edwin C. Gage 02 Garnett L. Keith, Jr.
03 Richard L. Knowlton 04 Carole F. St. Mark
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
2. APPOINTMENT OF INDEPENDENT AUDITORS
[ ] For [ ] Against [ ] Abstain
3. AMENDMENT TO THE SUPERVALU 1993 STOCK PLAN
[ ] For [ ] Against [ ] Abstain
4. I PLAN TO ATTEND THE MEETING
[ ] Yes [ ] No
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date__________________________
______________________________
______________________________
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the
proxy.
<PAGE>
- --------------------------------------------------------------------------------
SUPERVALU INC.
JUNE 30, 1999 ANNUAL MEETING OF STOCKHOLDERS
This Proxy is solicited on behalf of the Board of Directors of the Company.
The stockholder(s) named on this card hereby appoint Michael W. Wright and John
P. Breedlove, and each of them, as their proxy, with power of substitution to
vote at the Annual Meeting as directed below. The proxies may also vote, in
their discretion, upon all other matters that may properly come before the
Meeting, or any adjournment or adjournments thereof. The shares will be voted as
if the stockholder(s) were personally present at the meeting. All former proxies
are revoked. If not otherwise specified, shares will be voted as recommended by
the Board of Directors.
Please mark this proxy as indicated on the reverse side to vote on any item.
(Continued and to be signed on other side.)
<PAGE>
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3
1. ELECTION OF DIRECTORS: 01 Edwin C. Gage 02 Garnett L. Keith, Jr.
03 Richard L. Knowlton 04 Carole F. St. Mark
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
2. APPOINTMENT OF INDEPENDENT AUDITORS
[ ] For [ ] Against [ ] Abstain
3. AMENDMENT TO THE SUPERVALU 1993 STOCK PLAN
[ ] For [ ] Against [ ] Abstain
4. I PLAN TO ATTEND THE MEETING
[ ] Yes [ ] No
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date__________________________
______________________________
______________________________
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the
proxy.
