pre14a
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
þ Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
SUPERVALU INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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(1) |
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Title of each class of securities to which transaction applies: |
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(2) |
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Aggregate number of securities to which transaction applies: |
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(3) |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): |
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(4) |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing. |
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(1) |
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Amount Previously Paid: |
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(2) |
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Form, Schedule or Registration Statement No.: |
Notice of Annual Meeting of
Stockholders
To Be Held Thursday,
June 24, 2010
The Annual Meeting of Stockholders of SUPERVALU INC. will be
held on Thursday, June 24, 2010, at 9:00 a.m., local
time, at the Westin Edina Galleria, 3201 Galleria, Edina,
Minnesota 55435, for the following purposes:
1) to elect 10 directors;
2) to ratify the appointment of KPMG LLP as independent
registered public accountants;
3) to consider and vote on managements proposal to
conduct a triennial advisory vote on executive
compensation; and
4) 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
April 27, 2010 as the record date for the purpose of
determining stockholders who are entitled to notice of and to
vote at the meeting. Holders of SUPERVALUs common stock
are entitled to one vote for each share held of record on the
record date.
IMPORTANT: We hope you will be able to attend the meeting in
person and you are cordially invited to attend. If you expect to
attend the meeting, please check the appropriate box on the
proxy card when you return your proxy or follow the instructions
on your proxy card to vote and confirm your attendance by
telephone or Internet.
PLEASE
NOTE THAT YOU WILL NEED AN ADMISSION TICKET OR PROOF
THAT YOU OWN SUPERVALU STOCK TO BE ADMITTED TO THE
MEETING
Record
stockholder:
If your shares are registered directly in your name,
an admission ticket is printed on the enclosed proxy
card.
Shares
held in street name by a broker or a
bank:
If your shares are held for your account in
the name of a broker, bank or other nominee, please bring a
current brokerage
statement, letter from your stockbroker or other proof of stock
ownership to the meeting.
If you need special assistance because of a disability, please
contact Rachel V. Friedenberg, Assistant Corporate Secretary, by
mail at P.O. Box 990, Minneapolis, Minnesota 55440 or
by telephone at
(952) 828-4000.
BY ORDER OF THE BOARD OF DIRECTORS
David L. Boehnen
Executive Vice President
[May 10, 2010]
PROXY
STATEMENT TABLE OF CONTENTS
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PROXY
STATEMENT
The Board of Directors of SUPERVALU INC. is soliciting proxies
for use at the 2010 Annual Meeting of Stockholders to be held on
Thursday, June 24, 2010, and at any adjournment or
postponement of the meeting. This Proxy Statement and the
accompanying form of proxy will first be mailed to stockholders
who hold SUPERVALU common stock as of April 27, 2010, the
record date for this meeting, on or about [May 10, 2010].
VOTING
PROCEDURES
Number of
Shares Outstanding
SUPERVALU has one class of capital stock outstanding, common
stock. The holders of common stock are entitled to one vote for
each share held. As of the record date for the meeting, 212,
225,397 shares of common stock were outstanding and are eligible
to vote at the meeting.
Vote
Required and Method of Counting Votes
You may vote FOR, AGAINST or
ABSTAIN on each of the items described below. If you
submit your proxy, but abstain from voting, your shares will be
counted as present at the meeting for the purpose of determining
a quorum.
If you hold your shares in street name and do not provide voting
instructions to your broker, they will be counted as present at
the meeting for the purpose of determining a quorum and may be
voted on Item 2 (Ratification of the Appointment of
Independent Registered Public Accountants) at the discretion of
your broker. If you hold your shares in street name, it is
critical that you cast your vote if you want it to count for
Item 1 (Election of Directors) and Item 3 (Management
Proposal to Conduct a Triennial Advisory Vote on Executive
Compensation). In the past, if you held your shares in street
name and you did not indicate how you wanted your shares voted
in the election of directors, your bank or broker was allowed to
vote those shares on your behalf, as they felt appropriate.
Recent changes in regulation were made to take away the ability
of your bank or broker to vote your uninstructed shares in the
election of directors on a discretionary basis. Thus, if you
hold your shares in street name and you do not instruct your
bank or broker how to vote in the election of directors, no
votes will be cast on your behalf.
The following is an explanation of the vote required for each of
the items to be voted on.
Item 1. Election of
Directors. Each director nominee receiving a
majority of the votes cast will be elected as a director. This
means that the number of shares voted FOR a director
nominee must exceed the number of votes cast AGAINST
that director nominee in order for that nominee to be elected as
a director. If, however, the number of nominees exceeds the
number of directors to be elected (a situation we do not
anticipate), the directors shall be elected by a plurality of
the shares present in person or by proxy at the meeting and
entitled to vote on the election of directors. A plurality means
that the ten director nominees that receive the highest number
of votes cast will be elected. In either event, shares not
present at the meeting and shares voting ABSTAIN
have no effect on the election of directors.
Item 2. Ratification of the Appointment of
Independent Registered Public Accountants. The
affirmative vote of a majority of the shares of common stock,
present and entitled to vote at the meeting is required for the
approval of this proposal. If you submit your proxy but abstain
from voting, your shares will be counted as present at the
meeting for the purpose of calculating the vote on this
proposal. Shares voting ABSTAIN on this proposal
have the same effect as a vote against this proposal.
Item 3. Management Proposal to Conduct a
Triennial Advisory Vote on Executive
Compensation. The affirmative vote of a majority
of the shares of common stock, present and entitled to vote at
the meeting is required for the approval of this proposal. If
you submit your proxy but abstain from voting, your shares will
be counted as present at the meeting for the purpose of
calculating the vote on this proposal. Shares voting
ABSTAIN on this proposal have the same effect as a
vote against this proposal.
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YOUR VOTE IS VERY IMPORTANT. Whether or not
you expect to attend the meeting, please submit your proxy vote
in one of the following ways:
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Voting by Mail. If you wish to vote by mail,
please sign, date and return the enclosed proxy card promptly in
the postage-paid envelope provided.
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Voting by Telephone and the Internet. If you
wish to vote by telephone or Internet, please follow the
instructions on the enclosed proxy card. If you vote by
telephone or Internet, you do not need to return the proxy card.
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Shares held in Street Name. If your shares are
held in the name of a bank, broker or other holder of record,
follow the voting instructions you receive from the holder of
record to vote your shares. Telephone and Internet voting are
also available to stockholders owning stock through most major
banks and brokers.
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Voting by Participants in Employee Benefit
Plans. If you own shares of SUPERVALU common
stock as a participant in one or more of our employee benefit
plans, you will receive a single proxy card that covers both the
shares credited to your plan account(s) and the shares you own
that are registered in the same name. If any of your plan
accounts are not in the same name as your shares of record, you
may receive separate proxy cards for the shares held in each
named account. Proxies submitted by plan participants will serve
as voting instructions to the trustee for that plan whether
provided by mail, telephone or Internet. If you do not make an
affirmative election as to how you want your shares to be voted,
the trustee will vote those shares in the same proportion as
other participants in that plan affirmatively elected to vote
their shares.
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Revoking Your Proxy. With the exception of
shares held in employee benefit plan accounts, you may revoke
your proxy at any time before your shares are voted by sending a
written statement to the Corporate Secretary, or by submitting
another proxy with a later date. You may also revoke your proxy
by voting in person at the meeting. With respect to shares held
in employee benefit plan accounts, you may revoke your proxy for
those shares up until noon on [June 22, 2010].
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It is important that all stockholders vote. If you submit a
proxy by mail, telephone or Internet without indicating how you
want to vote, your shares will be voted as recommended by the
Board of Directors.
ATTENDING
THE ANNUAL MEETING
If you plan to attend the Annual Meeting, you will not be
admitted without an admission ticket or proof that you own
SUPERVALU stock.
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Record Stockholders. If you are a record
stockholder (i.e., a person who owns shares registered directly
in his or her name with SUPERVALUs transfer agent) and
plan to attend the meeting, please indicate this when voting,
either by marking the attendance box on the proxy card or
responding affirmatively when prompted during telephone or
Internet voting. An admission ticket for record stockholders is
printed on the proxy card together with directions to the
meeting. The admission ticket must be brought to the meeting.
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Owners of Shares Held in Street
Name. Beneficial owners of SUPERVALU common stock
held in street name by a broker, bank or other nominee will need
proof of ownership to be admitted to the meeting. A recent
brokerage statement or letters from the broker, bank or other
nominee are examples of proof of ownership. If your shares are
held in street name and you want to vote in person at the
meeting, you must obtain a written proxy from the broker, bank
or other nominee holding your shares.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the
only persons or groups known to us as of April 15, 2010, to
be the beneficial owners of more than five percent of SUPERVALU
common stock.
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Name and Address of
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Amount and Nature of
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Percent of
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Beneficial Owner
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Beneficial Ownership
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Class
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AXA Financial, Inc. and related entities(1)
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23,565,661
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11.1
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%
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1290 Avenue of the Americas
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New York, NY 10104
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BlackRock, Inc.(2)
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11,508,979
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5.43
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%
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40 East
52nd
Street
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New York, NY 10022
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LSV Asset Management(3)
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10,761,027
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5.076
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%
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1 N. Wacker Drive, Suite 4000
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Chicago, IL 60606
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State Street Corporation(4)
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14,922,789
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7.0
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State Street Financial Center
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One Lincoln Street
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Boston, MA 02111
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(1) |
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Share ownership is as of December 31, 2009, as set forth in
a Schedule 13G/A filed with the Securities and Exchange
Commission on January 8, 2010. According to that filing,
AXA Financial, Inc., on behalf of itself, AXA Assurances
I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle and AXA (France)
(the Mutuelles AXA), is deemed to be the beneficial
owner of 23,565,661 shares of SUPERVALU common stock. |
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Of these shares, AXA Financial, Inc. and each of the Mutuelles
AXA has sole voting power over 17,057,888 shares and sole
dispositive power over 23,565,661 shares. The Mutuelles
AXA, as a group, disclaim beneficial ownership of all shares of
SUPERVALUs common stock. |
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Of these shares, the following are deemed to have sole voting
power and sole dispositive power over the following shares: the
Mutuelles AXA, 0 and 0; AXA Financial, Inc., 0 and 0;
AllianceBernstein L.P., 17,055,419 and 23,563,192; and AXA
Equitable Life Insurance Company, 2,469 and 2,469. |
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Share ownership is as of December 31, 2009, as set forth in
a Schedule 13G/A filed with the Securities and Exchange
Commission on January 29, 2010. According to that filing,
BlackRock, Inc. is deemed to beneficially own
11,580,979 shares of SUPERVALU common stock, with sole
voting power and sole dispositive power as to 11,508,979 of such
shares. |
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Share ownership is as of December 31, 2009, as set forth in
a Schedule 13G filed with the Securities and Exchange Commission
on February 11, 2010. According to that filing, LSV Asset
Management is deemed to beneficially own 10,761,027 shares
of SUPERVALU common stock, with sole voting power and sole
dispositive power as to 10,761,027 of such shares. |
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Share ownership is as of December 31, 2009, as set forth in
a Schedule 13G filed with the Securities and Exchange Commission
on February 12, 2010. According to that filing, State
Street Corporation is deemed to beneficially own
14,922,789 shares of SUPERVALU common stock, with shared
voting power and shared dispositive power as to 14,922,789 of
such shares. |
SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth information as of April 15,
2010 concerning beneficial ownership of SUPERVALUs common
stock by each director and director nominee, and for each of the
executive officers named in the Summary Compensation Table (the
Named Executive Officers), excluding
Mr. Jackson and
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Mr. Tripp, and all of our directors and executive officers
as a group. For Mr. Jackson and Mr. Tripp, beneficial
ownership is as of August 14, 2009.
The definition of beneficial ownership for proxy statement
purposes includes shares over which a person has sole or shared
voting power or dispositive power, whether or not a person has
any economic interest in the shares. The definition also
includes shares that a person has a right to acquire currently
or within 60 days.
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Amount and Nature of
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Percent of
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Name of Beneficial Owner
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Beneficial Ownership(1)(2)
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Class
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Donald R. Chappel
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0
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*
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Irwin S. Cohen
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54,596
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*
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Ronald E. Daly
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53,247
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*
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Lawrence A. Del Santo
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103,883
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*
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Susan E. Engel
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103,699
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*
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Philip L. Francis
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61,520
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*
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Craig R. Herkert
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500,194
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*
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Edwin C. Gage
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106,148
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*
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Garnett L. Keith, Jr.
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151,207
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*
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Charles M. Lillis
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101,444
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Jeffrey Noddle
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2,308,706
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1.0
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Steven S. Rogers
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82,192
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Matthew E. Rubel
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0
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Wayne C. Sales
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49,538
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*
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Kathi P. Seifert
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43,398
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*
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David L. Boehnen
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506,052
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*
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Janel S. Haugarth
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309,538
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*
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Michael L. Jackson
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746,158
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*
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Pamela K. Knous
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633,262
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*
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David E. Pylipow
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161,906
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Kevin H. Tripp
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200,739
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*
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All directors and executive officers as a group (26 persons)
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6,770,129
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3.2
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%
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Less than 1 percent |
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All persons listed have sole voting and investment power with
respect to all of the shares listed except: (i) the
following non-employee director who has shared voting and
investment power, as follows: Mr. Gage, 8,000 shares
and (ii) the following non-employee directors who have sole
voting power, but no investment power, over shares held in the
Directors Deferred Compensation Plan as follows:
Mr. Cohen, 12,316 shares; Mr. Daly,
16,967 shares; Mr. Del Santo, 37,152 shares;
Ms. Engel, 43,419 shares; Mr. Francis,
25,240 shares; Mr. Gage, 20,364 shares;
Mr. Keith, 69,367 shares; Mr. Lillis,
57,164 shares; Mr. Rogers, 17,806 shares;
Mr. Sales, 24,690 shares and Ms. Seifert,
13,114 shares. |
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Includes shares underlying options exercisable within
60 days of April 15, 2010, as follows: Mr. Cohen,
42,280; Mr. Daly, 36,280; Mr. Del Santo 60,280;
Ms. Engel, 60,280; Mr. Francis, 30,280; Mr. Gage,
60,280; Mr. Herkert, 160,728; Mr. Keith,
60,280 shares; Mr. Lillis, 42,280 shares;
Mr. Noddle, 1,752,029; Mr. Rogers, 57,475;
Mr. Sales, 24,280; Ms. Seifert, 24,280;
Mr. Boehnen, 291,891; Ms. Haugarth, 209,691;
Mr. Jackson, 606,344; Ms. Knous, 409,362;
Mr. Pylipow, 111,000; Mr. Tripp, 120,000 and all
directors and executive officers as a group, 4,521,828. |
MEETINGS
OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held six regular meetings and three
special meeting during the last fiscal year. Each director
attended at least 75 percent of the meetings of the Board
and its committees on which the director served, except
Mr. Francis and Mr. Lillis who had prior commitments.
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The Board maintains four standing committees: Audit, Corporate
Governance and Nominating (formerly Director Affairs),
Leadership Development and Compensation (formerly Executive
Personnel and Compensation) and Finance, each of which has a
separate written charter that is available on SUPERVALUs
website at
http://www.supervalu.com.
Click on the tab Site Map and then the caption
Corporate Governance under the heading About
Us.
Membership on the Audit, Corporate Governance and Nominating and
Leadership Development and Compensation Committees is limited to
non-employee directors. The Board of Directors has determined
that all of its non-employee directors, and therefore each
member of the Audit, Corporate Governance and Nominating and
Leadership Development and Compensation Committees, are
independent directors under the New York Stock Exchange
(NYSE) listing standards. The Board has also
determined that all nominees for director are independent under
the NYSE listing standards.
Audit
Committee
The following directors served on the Audit Committee in fiscal
2010: Garnett L. Keith, Jr. (Chairperson), A. Gary
Ames, Irwin S. Cohen, Marissa T. Peterson, Steven S. Rogers and
Kathi P. Seifert. Following the resignations from the Board in
April 2010 of Mr. Ames and Ms. Peterson, the Audit
Committee was comprised of Mr. Keith, Mr. Cohen,
Mr. Rogers and Ms. Seifert. The Board has determined
that all members of the Audit Committee are financially literate
under the NYSE listing standards and that Irwin Cohen qualifies
as an audit committee financial expert under the
NYSE listing standards and the rules of the Securities and
Exchange Commission (the SEC). The Audit Committee
met six times during the last fiscal year.
The primary responsibilities of the Audit Committee are to
assist the Board of Directors in:
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its oversight of our accounting and financial reporting
principles and policies, and our internal controls and
procedures;
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its oversight of our financial statements and the independent
registered public accountants;
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selecting, evaluating and, where deemed appropriate, replacing
the independent registered public accountants; and
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evaluating the independence of the independent registered public
accountants.
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Corporate
Governance and Nominating Committee
The following directors served on the Corporate Governance and
Nominating Committee in fiscal 2010: Lawrence A. Del Santo
(Chairperson), Ronald E. Daly, Philip L. Francis, Edwin C. Gage,
Marissa T. Peterson and Steven S. Rogers. Following
Ms. Petersons resignation from the Board in April
2010, the Corporate Governance and Nominating Committee was
comprised of Messrs. Del Santo, Daly, Francis, Gage and
Rogers. The Corporate Governance and Nominating Committee met
three times during the last fiscal year.
The mission of the Corporate Governance and Nominating Committee
is to recommend a framework to assist the Board in fulfilling
its corporate governance responsibilities. In carrying out its
mission, the Corporate Governance and Nominating Committee
establishes and regularly reviews the Boards policies and
procedures, which provide:
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criteria for the size and composition of the Board;
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procedures for the conduct of Board meetings, including
executive sessions of the Board;
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policies on director retirement and resignation; and
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criteria regarding personal qualifications needed for Board
membership.
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In addition, the Corporate Governance and Nominating Committee
has the responsibility to:
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consider and recommend nominations for Board membership and the
composition of Board committees;
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evaluate our Board practices and those of other well-managed
companies and recommend appropriate changes to the Board (see
Board Practices below);
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consider governance issues raised by stockholders and recommend
appropriate responses to the Board; and
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consider appropriate compensation for directors.
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For a description of the Corporate Governance and Nominating
Committees processes and procedures for the consideration
and determination of director compensation, see Director
Compensation.
Finance
Committee
The following directors served on the Finance Committee in
fiscal 2010: Charles M. Lillis (Chairperson), A. Gary Ames,
Irwin S. Cohen, Philip L. Francis, Garnett L. Keith, Jr.,
Jeffrey Noddle and Wayne C. Sales. Following Mr. Ames
resignation from the Board in April 2010, the Finance Committee
was comprised of Messrs. Lillis, Cohen, Francis, Keith,
Noddle and Sales. The Finance Committee met two times during the
last fiscal year.
The primary responsibilities of the Finance Committee are to
review our financial structure, policies and future financial
plans and to make recommendations concerning them to the Board.
In carrying out these responsibilities, the Finance Committee
periodically reviews:
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our annual operating and capital budgets as proposed by
management, and our performance as compared to the approved
budgets;
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our dividend policy and rates;
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investment performance of our employee benefit plans;
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our financing arrangements;
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our capital structure, including key financial ratios such as
debt to equity ratios and coverage of fixed charges; and
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proposals for changes in our capitalization, including purchases
of treasury stock.
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Leadership
Development and Compensation Committee
The following directors serve on the Leadership Development and
Compensation Committee: Susan E. Engel (Chairperson), Ronald E.
Daly, Lawrence A. Del Santo, Edwin C. Gage, Charles M. Lillis,
Wayne C. Sales and Kathi P. Seifert. The Leadership Development
and Compensation Committee met six times during the last fiscal
year.
The primary responsibilities of the Leadership Development and
Compensation Committee are to:
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determine the process to evaluate the performance of the Chief
Executive Officer (the CEO);
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review and recommend to the Board the compensation of the CEO;
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review and recommend to the Board major changes in executive
compensation programs, executive stock options and retirement
plans for officers;
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consider and make recommendations to the Board concerning the
annual election of corporate officers and the succession plan
for the CEO;
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approve annual salaries and bonuses of corporate officers and
other executives at specified levels;
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review and approve participants and performance targets under
our annual and long-term incentive compensation plans;
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retain and terminate any firm or other professional used to
assist in the evaluation of directors and senior executives,
including the CEO and the Executive Chairman, and to approve the
terms of and fees for such retention;
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approve stock option grants and awards under our stock option
plans, bonus and other incentive plans;
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review with management the Compensation Discussion and
Analysis; and
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review periodic reports from management with respect to whether
the Companys compensation programs and policies are
reasonably likely to have a material adverse effect on the
Company.
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In 2010, management conducted a review, with the assistance of
the Companys compensation consultant Towers Watson, of the
compensation programs and policies for the Companys
employees and reported to the Leadership Development and
Compensation Committee their conclusion that such programs and
policies were not reasonably likely to have a material adverse
effect on the Company.
For a description of the Leadership Development and Compensation
Committees processes and procedures for the consideration
and determination of executive compensation, see
Compensation Discussion and Analysis.
BOARD
PRACTICES
In order to help our stockholders better understand our Board
practices, we are including the following description of current
practices. The Corporate Governance and Nominating Committee
periodically reviews these practices.
Leadership
Structure
The Board determines the best board leadership structure for
SUPERVALU from time to time. The Board believes that it is not
in the best interest of the Company or our stockholders to have
an inflexible rule regarding whether the offices of Chairman and
CEO must be separate. When a vacancy occurs in the office of
either the Chairman or the CEO, the Board will consider the
specific characteristics and circumstances existing at that time
and will determine whether the role of Chairman should be
separate from that of the CEO and, if the roles are separate,
whether the Chairman should be selected from the independent
directors or from management.
In connection with Mr. Noddles planned retirement
from his position as Executive Chairman following the
Companys Annual Meeting of Stockholders in June 2010, the
Board determined that it was in the best interest of the Company
to continue to separate the positions of CEO and Chairman and to
elect a Non-Executive Chairman. The Board expects that Wayne C.
Sales will be elected to the role of Non-Executive Chairman,
following the Annual Meeting of Stockholders, assuming his
continued service on the Board of Directors. It is expected that
Mr. Sales will serve as the Non-Executive Chairman for a
two-year term, contingent upon re-election to the Board of
Directors. At the end of that two-year term, the Board will
reevaluate its leadership structure. The Board believes this
leadership structure affords the Company an effective
combination of internal and external experience, continuity and
independence that will serve the Board and the Company well.
Evaluation
of Board Performance
In order to continue to evaluate and improve the effectiveness
of the Board, under the guidance of the Corporate Governance and
Nominating Committee, our Board annually evaluates the
Boards performance as a whole. The evaluation process
includes a survey of the individual views of all directors, a
summary of which is then shared with the Board. The Board
conducted an evaluation this year with the assistance of an
outside consultant in which each director was evaluated on ten
competencies as a way to improve each directors
performance. A similar evaluation process is expected to occur
prior to the 2011 Annual Meeting of Stockholders and biannually
thereafter. Each active Board Committee also evaluates its own
performance on a yearly basis.
Size of
the Board
As provided by the Companys Restated Bylaws, the Board of
Directors currently consists of 13 members and the number of
directors may be increased or decreased from time to time by
resolution of a majority of the whole Board of Directors or of
the holders of at least 75% of the stock of the Company entitled
to vote, considered for the purpose as one class. The Board
believes that the size of the Board should accommodate the
objectives of effective discussion and decision-making and
adequate staffing of Board committees.
7
Director
Independence
The Board believes that a substantial majority of its members
should be independent, non-employee directors. It is the
Boards policy that no more than two members of the Board
will be employees of SUPERVALU. These management members will
include the CEO and up to one additional person whose duties and
responsibilities identify them as a top management individual of
SUPERVALU. Only two of our 13 Board members are or will be
employees of SUPERVALU. Following Mr. Noddles
retirement, only one of 12 members of the Board, assuming all
nominees are elected, are or will be employees of SUPERVALU. The
Board has determined that all non-employee directors and all
director nominees meet the requirements for independence under
the NYSE listing standards.
Director
Retirement
It is Board policy that non-employee directors retire at the
annual meeting following the date they attain the age of 74 and
that non-employee directors elected after February 27,
1994 may serve a maximum term of 15 years. Directors
who change the occupation they held when initially elected to
the Board are expected to offer to resign from the Board. At
that time, the Corporate Governance and Nominating Committee
will review the continuation of Board membership under these new
circumstances and make a recommendation to the full Board.
During fiscal 2010, the Board authorized a waiver of the
Governance Principles to allow Mr. Lillis to serve one
additional year.
The Board also has adopted a policy that requires employee
directors, other than the CEO, to retire from the Board at the
time of a change in their status as an officer of SUPERVALU. A
former CEO may continue to serve on the Board until the third
anniversary after his or her separation from SUPERVALU. However,
if a former CEO leaves SUPERVALU to accept another position, the
CEO is expected to retire as a director effective simultaneously
with his or her separation from SUPERVALU.
Selection
of Directors
The Corporate Governance and Nominating Committee is the
standing committee responsible for determining the slate of
director nominees for election by stockholders. The Corporate
Governance and Nominating Committee considers and evaluates
potential Board candidates based on the criteria set forth below
and makes its recommendation to the full Board. The criteria
applied to director candidates stress independence, integrity,
experience and sound judgment in areas relevant to our business,
financial acumen, interpersonal skills, a proven record of
accomplishment, a willingness to commit sufficient time to the
Board, the ability to challenge and stimulate management and
diversity. The Corporate Governance and Nominating Committee
views diversity in its broadest sense, which includes gender,
ethnicity, education, experience and leadership qualities. The
Corporate Governance and Nominating Committee will use the same
process and criteria for evaluating all nominees, regardless of
whether the nominee is submitted by a stockholder or by some
other source.
During 2010, five members are retiring or have resigned from the
Board and two new candidates are being nominated. This
transition was overseen by the Executive Committee of the Board
and the Corporate Governance and Nominating Committee. Both
Mr. Chappel and Mr. Rubel were identified by
Heidrick & Struggles International, Inc., an executive
recruiting firm. In all cases, Heidrick & Struggles
and the Executive Committee and the Corporate Governance and
Nominating Committee reviewed the candidates in light of the
skills and qualifications established by the Corporate
Governance and Nominating Committee.
Directors and management are encouraged to submit the name of
any candidate they believe to be qualified to serve on the
Board, together with background information on the candidate, to
the Chairperson of the Corporate Governance and Nominating
Committee. In accordance with procedures set forth in our
bylaws, stockholders may propose, and the Corporate Governance
and Nominating Committee will consider, nominees for election to
the Board of Directors by giving timely written notice to the
Corporate Secretary, which must be received at our principal
executive offices no later than the close of business on
February 24, 2011 and no earlier than January 25,
2011. Any such notice must include the name of the nominee, a
biographical sketch and resume, contact information and such
other background materials on such nominee as the Corporate
Governance and Nominating Committee may request.
8
Executive
Sessions of Outside Directors
Non-employee directors generally meet together as a group,
without the CEO or any other employees in attendance, during
each Board meeting. The Executive Chairman presides over each
executive session of the Board.
Non-Executive
Chairman
In April 2010, our Board established the position of
Non-Executive Chairman and expects that Mr. Sales will be
elected to serve as our Non-Executive Chairman following the
Annual Meeting of Stockholders, contingent upon his continued
service on the Board of Directors. The position of Lead Director
will be eliminated at that time. The primary responsibilities of
our Non-Executive Chairman will include:
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(a)
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ensuring that the respective responsibilities of the Board and
management are understood, and that the boundaries between the
Board and management responsibilities are respected;
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(b)
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working with the CEO to develop an appropriate schedule of Board
meetings, seeking to ensure that the Board can perform its
duties responsibly while recognizing and supporting the
operational demands of the Company;
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(c)
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working with the CEO and Board members to develop the agendas
for the Board meetings;
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(d)
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conferring with the Corporate Governance and Nominating
Committee regarding recommendations regarding the membership of
the Boards committees and the selection and rotation of
committee chairs;
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(e)
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chairing all meetings of the Board and presiding at all
stockholder meetings;
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(f)
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scheduling, developing the agenda for and presiding at all
Executive Sessions of the Board and at meetings of the
Boards outside directors, and communicating to the CEO the
substance of the discussions occurring at such sessions and
meetings;
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(g)
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acting as principal liaison between the non-employee directors
and the CEO on sensitive issues, although any non-employee
director maintains the right to communicate directly with the
CEO on any matter;
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(h)
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serving as an ex officio member of each committee and working
with the Board committee chairs on the performance of their
designated roles and responsibilities;
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(i)
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assessing and advising the CEO as to the quality, quantity and
timeliness of the flow of information from Company management
that is necessary for the Board to effectively and responsibly
perform its duties. Although Company management is responsible
for the preparation of materials for the Board, the
Non-Executive Chairman will consider requests from any Board
member regarding the inclusion of specific information in such
material and all directors maintain the right to communicate
directly with members of management;
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(j)
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recommending to the Board the retention of any consultants who
will report directly to the Board on board matters (as opposed
to committee consultants);
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(k)
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acting as a direct conduit to the Board for stockholders,
employees and the public;
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(l)
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monitoring significant issues and risks between meetings of the
Board and assuring that the entire Board becomes involved when
appropriate;
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(m)
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leading the Board in anticipating and responding to crises,
including temporary incapacity of the CEO;
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(n)
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upon recommendation of the Corporate Governance and Nominating
Committee, interviewing candidates for the Board that are
proposed to be presented to the Board for consideration;
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(o)
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in conjunction with the Corporate Governance and Nominating
Committee, overseeing the evaluation process regarding the
performance of individual directors;
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(p)
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working with the chair of the Leadership Development and
Compensation Committee on the process for compensating and
evaluating the CEO, consistent with the principle that the CEO
reports to the full Board and not the Non-Executive Chairman;
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(q)
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working with the Chair of the Leadership Development and
Compensation Committee on succession planning for the CEO and
senior management;
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(r)
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assisting the Board and the Company in assuring compliance with
and implementation of these Governance Principles; and
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(s)
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chairing the Corporate Governance and Nominating Committee and
the Executive Committee of the Board.
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Boards
Role in Risk Oversight
The Board takes an active role in risk oversight related to the
Company both as a full Board and through its Committees. The
Board meets in executive session after each regularly scheduled
Board meeting to, among other things, assess the quality of the
meetings and to provide its observations to the CEO.
In addition, the Company conducts an annual enterprise wide risk
assessment. A formal report is delivered to the Audit Committee,
the chair of which provides a synopsis to the Board. Risk
assessment updates are provided if required. The objectives for
the risk assessment process include (i) facilitating the
NYSE governance requirement that the Audit Committee discuss
policies around risk assessment and risk management;
(ii) developing a defined list of key risks to be shared
with the Audit Committee, Board and senior management;
(iii) determining whether there are risks that require
additional or higher priority mitigation efforts;
(iv) facilitating discussion of the risk factors to be
included in Item 1A of the Companys Annual Report on
Form 10-K
and (v) guiding the development of the internal audit plans.
Attendance
at Stockholder Meetings
The Board does not have a formal policy regarding director
attendance at the Annual Meeting of Stockholders. However, all
directors are strongly encouraged to attend the meeting. Twelve
of the incumbent directors attended the 2009 Annual Meeting of
Stockholders.
Stock
Ownership Guidelines
Non-employee directors are required to acquire and own SUPERVALU
common stock with a fair market value of five times a
directors annual retainer within five years after the
director is first elected.
Governance
Principles
The Board maintains a formal statement of Governance Principles
that sets forth the corporate governance practices for
SUPERVALU. The Governance Principles are available on our
website at
http://www.supervalu.com. Click
on the tab Site Map and then the caption
Corporate Governance under the heading About
Us.
Policy
and Procedures Regarding Transactions with Related
Persons
The Board of Directors of the Company has adopted a Policy and
Procedures Regarding Transactions with Related Persons. This
policy delegates to the Audit Committee responsibility for
reviewing, approving or ratifying transactions with
related persons that are required to be disclosed
under the rules of the SEC. Under the policy, a related
person includes any of the directors or executive officers
of the Company, certain stockholders and their immediate
families. The policy applies to transactions where the Company
is a participant, a related person will have a direct or
indirect material interest and the amount involved exceeds
$120,000. Under the policy, management of the Company is
responsible for disclosing to the Audit Committee all material
information related to any covered transaction in order to give
the Audit Committee an opportunity to authorize, approve or
ratify the covered transaction based upon its determination that
the covered transaction is fair and reasonable and on terms no
less favorable to the Company than could be obtained in a
comparable arms length transaction with an unrelated third
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party. A copy of the Policy and Procedures Regarding
Transactions with Related Persons is available on
SUPERVALUs website at
http://www.supervalu.com. Click
on the tab Site Map and then the caption
Corporate Governance under the heading About
Us.
Other
Matters Relating to Directors
Susan E. Engel, one of our directors, served as chairwoman and
chief executive officer of Lenox Group Inc., a tabletop,
giftware and collectibles company, from November 1996 until she
retired in January 2007. In November 2008, Lenox Group filed a
voluntary petition for relief under Chapter 11 in the
U.S. Bankruptcy Court for the Southern District of New York.
ELECTION
OF DIRECTORS (ITEM 1)
Directors elected at the 2008 Annual Meeting of Stockholders
were elected for a three-year term, which expires in 2011. In
December 2008, the Board voted to declassify the Board, thereby
repealing the staggered terms of directors, beginning with the
class of directors up for election at the 2009 Annual Meeting of
Stockholders. Beginning with that meeting, directors are elected
for a term of one year. If a vacancy exists or occurs during the
year, the vacant directorship may be filled by the vote of the
remaining directors until the next annual meeting, at which time
the stockholders elect a director to fill the vacancy. There are
currently 13 members of the Board.
Our bylaws require directors to be elected by the majority of
the votes cast with respect to such director in uncontested
elections. A majority of the votes cast means that the number of
shares voted FOR a director must exceed the number
of votes cast AGAINST that director. In a contested
election, a situation in which the number of nominees exceeds
the number of directors to be elected, the standard for election
of directors will be a plurality of the shares represented in
person or by proxy at any such meeting and entitled to vote on
the election of directors. A plurality means that the nominees
receiving the highest number of votes cast will be elected.
If a nominee who is serving as a director is not elected at the
Annual Meeting, under Delaware law the director would continue
to serve on the Board as a holdover director.
However, under our bylaws, any director who fails to be elected
must offer to tender his or her resignation to the Board of
Directors. The Corporate Governance and Nominating Committee
will then make a recommendation to the Board whether to accept
or reject the resignation, or whether other action should be
taken. The Board of Directors will act on the Corporate
Governance and Nominating Committees recommendation and
publicly disclose its decision and the rationale behind it
within 90 days from the date the election results are
certified. The director who tenders his or her resignation will
not participate in the Boards decision. If a nominee who
was not already serving as a director is not elected at the
Annual Meeting, under Delaware law that nominee would not become
a director and would not continue to serve on the Board of
Directors as a holdover director.
Donald R. Chappel, Irwin S. Cohen, Ronald E. Daly, Susan E.
Engel, Craig R. Herkert, Charles M. Lillis, Steven S. Rogers,
Matthew E. Rubel, Wayne C. Sales and Kathi P. Seifert are
nominated for one-year terms expiring in 2011. The Board of
Directors is informed that each nominee is willing to serve as a
director. However, if any nominee is unable to serve or for good
cause will not serve, the proxy may be voted for another person
as the persons named on the proxies decide. Beginning with the
2011 Annual Meeting of Stockholders, all directors will stand
for election annually.
The following sets forth information, as of April 15, 2010,
concerning the ten nominees and the two directors whose terms of
office will continue after the Annual Meeting, based on the
current composition of the Board.
11
NOMINEES
FOR ELECTION AS DIRECTORS AT THE ANNUAL MEETING
FOR A ONE-YEAR TERM EXPIRING IN 2011
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DONALD. R. CHAPPEL, age 58
Mr.
Chappel, a nominee for director of SUPERVALU, is Senior Vice
President and Chief Financial Officer for The Williams
Companies, Inc., an integrated energy company, which, through
its subsidiaries, finds, produces, gathers, processes and
transports natural gas. Williams operations are
concentrated in the Pacific Northwest, Rocky Mountains, Gulf
Coast and Eastern Seaboard. Mr. Chappel joined Williams in
2003. Among many qualifications, Mr. Chappel brings significant
experience in finance and accounting as a senior finance
executive of several large public companies.
Mr.
Chappel also serves as Chief Financial Officer and a director of
Williams Partners GP LLC, the general partner of Williams
Partners L.P. and as Chief Financial Officer and director of
Williams Pipeline GP LLC, the general partner of Williams
Pipeline Partners L.P.
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IRWIN S. COHEN, age 69
Mr.
Cohen, a director of SUPERVALU since 2003, is a Retired Partner
of Deloitte & Touche LLP, a professional services firm,
providing audit, tax, financial advisory and consulting
services. Mr. Cohen, who joined Deloitte in 1962 and became a
partner in 1972, served as the Global Managing Partner of the
Consumer Products, Retail and Services Practice of Deloitte from
1997 to 2003. Mr. Cohen also founded and led Deloittes
Consumer Products, Retail and Services Practice as it grew to
serve over 100 countries in Europe, Asia Pacific and the
Americas. Mr. Cohen brings considerable experience in retail and
accounting as a result of his experience with Deloitte.
Mr.
Cohen is also a Director and Chair of the Audit Committee of
Stein Mart Inc., a discount fashion retailer with sales in
excess of $1 billion. In addition, he serves on the Board of
several private and not-for-profit companies and is a Senior
Advisor to Peter J. Solomon Company.
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RONALD E. DALY, age 63
Mr.
Daly, a director of SUPERVALU since 2003, is the Former Chief
Executive Officer and President of Oće USA Holding, Inc., a
subsidiary of Oće N.V., a supplier of digital document
management technology and services. Mr. Daly held that position
from 2002 to 2004. Prior to that, Mr. Daly spent 38 years
with RR Donnelley, holding various positions in operations,
eventually becoming the president of its largest business unit.
Among many qualifications, Mr. Daly brings significant
experience in business strategy as a senior executive of large
companies, as well as significant supply chain and technology
experience.
Mr.
Daly is also a director of United States Cellular Corporation,
the nations fifth-largest, full-service wireless carrier.
In addition, he serves as an adjunct professor of strategy and
leadership at Loyola University of Chicago and teaches executive
MBA courses. Mr. Daly also serves on four non-profit
boards.
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SUSAN E. ENGEL, age 63
Ms.
Engel, a director of SUPERVALU since 1999, is the Chief
Executive Officer and President of PorteroLuxury, Inc., an
internet retailer of luxury pre-owned personal accessories.
Prior to joining PorteroLuxury in 2009, Ms. Engel served as
Chairwoman and CEO of Lenox Group Inc. (the successor to
Department 56, Inc.), a designer and marketer of tabletop,
giftware and collectible products from 1996 until she retired in
January 2007. Among many qualifications, Ms. Engel brings
significant retail experience, including as a senior executive
of a large public company.
Ms.
Engel is also a director of Wells Fargo & Company, a
diversified financial services company with $1.2 trillion in
assets.
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CRAIG R. HERKERT, age 50
Mr.
Herkert, a director of SUPERVALU since 2009, was named the
Companys Chief Executive Officer and President in 2009.
Prior to joining SUPERVALU, Mr. Herkert served from 2004 to 2009
as the President and Chief Executive Officer of the Americas for
Wal-Mart Stores, Inc., an operator of retail stores. He also
served as the Executive Vice President of Wal-Mart International
from 2000 to 2003, following his promotion from Senior Vice
President and Chief Operating Officer in 2003. In addition to
his experience leading the Company, Mr. Herkert brings years of
retail experience to our Board.
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CHARLES M. LILLIS, age 68
Mr.
Lillis, a director of SUPERVALU since 1995, is a co-founder and
principal of LoneTree Capital Management LLC, a private equity
investing group formed in 2000. He is also co-founder and member
of Castle Pines Capital LLC, which was formed in 2004 and
provides channel financing solutions to resellers in the
technology industry. Mr. Lillis served as Chairman of the Board
of Directors and Chief Executive Officer of MediaOne Group, Inc.
from its inception in 1995 through its acquisition by AT&T
Corp., which was completed in 2000. Among many qualifications,
Mr. Lillis brings significant experience as a senior executive
of a large public company and as a director of other large
public companies.
Mr.
Lillis is also a director of Medco Health Solutions, Inc., a
leading pharmacy benefit manager, with the nations largest
mail order pharmacy operations. From 2002 to 2009, Mr. Lillis
served as a director of The Williams Companies, Inc. He also
served from 2005 to 2009 as a director of Washington Mutual,
Inc. and served on the Board of Charter Communications, Inc.
from 2003 to 2005
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STEVEN S. ROGERS, age 52
Mr.
Rogers, a director of SUPERVALU since 1998, is the Gordon and
Llura Gund Family Distinguished Professor of Entrepreneurship at
the Kellogg School of Management at Northwestern University. He
joined the faculty of Kellogg in 1995. Prior to his teaching
career, Mr. Rogers owned and operated two manufacturing firms
and one retail operations firm and worked as a consultant with
Bain & Company. Among many qualifications, Mr. Rogers
brings significant experience in corporate entrepreneurship and
entrepreneurial finance.
Mr.
Rogers is also a director of Amcore Financial, Inc., which
provides a full range of consumer and commercial banking
services and has banking assets of $4.4 billion, Oakmark Mutual
FundsHarris Associates, which provides investment advice
to wealthy individuals and institutions, S.C. Johnson &
Son, Inc., a manufacturer of household cleaning, personal care
and insecticide products, and W.S. Darley & Company,
manufacturer and distributor of fire engines and equipment. He
was a board member of Bally Total Fitness until 2007 and
Duquesne Light Holdings, Inc. until 2006. In addition, he is
active with many non-profit corporations.
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MATTHEW E. RUBEL, age 52
Mr.
Rubel, a nominee for director of SUPERVALU, is Chairman,
President and Chief Executive Officer of Collective Brands,
Inc., the holding company for Payless ShoeSource, Collective
Brands Performance + Lifestyle Group and Collective Licensing
International and a leader in lifestyle, fashion and performance
brands for footwear and related accessories. Mr. Rubel joined
Collective Brands in 2005 as Chief Executive Officer and
President. Among many qualifications, Mr. Rubel brings
significant retail and branding experience and experience as a
chief executive officer of a large public company, including
managing a significant transformation. Mr. Rubel served as a
Director of Furniture Brands, Inc. 2006 to 2008.
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WAYNE C. SALES, age 60
Mr.
Sales, a director of SUPERVALU since 2006, retired as the
Vice-Chairman of Canadian Tire Corporation Limited, a retail,
financial services and petroleum company. Mr. Sales served as
Vice-Chairman of Canadian Tire until 2007, following his tenure
as President and Chief Executive Officer, a position that he
held from 2000 to 2006. Under Mr. Sales leadership,
Canadian Tire retail sales increased nearly $2 billion. Among
many qualifications, Mr. Sales brings significant experience in
retail marketing, merchandising, supply chain and financial
services as Chief Executive Officer of a large retail and
financial services company.
Mr.
Sales is also a director and Chair of the Compensation Committee
of Tim Hortons Inc., which is the fourth largest publicly-traded
quick service restaurant chain in North America based on market
capitalization. Additionally, he serves as a director and Chair
of the Compensation Committee of Georgia Gulf Corp, a leading,
integrated North American manufacturer of chemicals and
vinyl-based building and home improvement products. Mr. Sales
also serves as a director and chair of the Nominating/Governance
Committee of Discovery Air, a specialty aviation
company.
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KATHI P. SEIFERT, age 61
Ms.
Seifert, a director of SUPERVALU since 2006, retired as
Executive Vice President for the Kimberly-Clark Corporation, a
global health and hygiene product manufacturing company, after
26 years of service. Ms. Seifert held the position of
Executive Vice President there from 1999 to 2004. Among many
qualifications, Ms. Seifert brings significant consumer product
goods and sales and marketing experience.
Ms.
Seifert is also a director of Appleton Papers, Inc., which
produces carbonless, thermal, security and performance packaging
products; Eli Lilly and Company, which discovers, develops,
manufactures and sells pharmaceutical products; Lexmark
International, Inc., which provides businesses of all sizes with
a broad range of printing and imaging products, solutions and
services, and Revlon, Inc., a worldwide cosmetics and beauty
care products company.
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DIRECTORS
WHOSE CURRENT THREE-YEAR TERMS EXPIRE
AT THE ANNUAL MEETING IN 2011
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PHILIP L. FRANCIS, age 63
Mr.
Francis, a director of SUPERVALU since 2006, is the Executive
Chairman of PetSmart, Inc., a specialty retailer of services and
solutions for pets. Mr. Francis transitioned to the role of
Executive Chairman in 2009, following his retirement as Chief
Executive Officer at PetSmart, a position he held from 1999 to
2009. Prior to joining PetSmart, Mr. Francis was the President
and CEO of Shaws Supermarkets. Among many qualifications,
Mr. Francis brings significant retail industry experience, as
well as experience in business strategy as a senior executive of
a large public company.
Mr.
Francis is also a director of CareFusion Corporation, which is a
leading, global medical device company created through the
spinoff of Cardinal Health Inc.s clinical and medical
products businesses. From 2006 to 2009, Mr. Francis was a
director of Cardinal Health, Inc.
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EDWIN C. GAGE, age 69
Mr.
Gage, a director of SUPERVALU since 1986, is the Chairman and
Chief Executive Officer of GAGE Marketing Group, L.L.C., an
integrated marketing services company, which he founded in
1991. Prior to that, Mr. Gage served as the President, COO and
CEO of Carlson Companies, Inc., which is one of the largest
marketing services companies in the world. Among many
qualifications, Mr. Gage brings significant experience in
marketing and business strategy as a senior executive of a large
company.
Mr.
Gage also serves on the Board of several private and
not-for-profit companies.
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14
DIRECTOR
COMPENSATION
The Corporate Governance and Nominating Committee reviews the
compensation of our directors on a periodic basis. Based upon
its review, the Corporate Governance and Nominating Committee
makes recommendations to the Board of Directors. Annual
compensation for non-employee directors is comprised of the
following components: cash compensation, consisting of an annual
retainer and meeting fees, and equity compensation, consisting
of stock options and an annual deferred retainer payable in
SUPERVALU common stock. Each of these components is described in
more detail below.
Annual
Board/Committee Chairperson Retainer
Non-employee directors receive an annual cash retainer of
$80,000 per year. For fiscal 2010, the Lead Director received an
additional annual cash retainer of $25,000. In addition, the
Chairperson of each Board committee receives the following
annual retainer: Audit Committee Chairperson, $25,000;
Leadership Development and Compensation Committee, Finance and
Corporate Governance and Nominating Committee Chairpersons,
$20,000. Also, each non-employee director committee member
receives an annual retainer for each committee served on of
$10,000 per committee, except Audit Committee members who
receive $15,000 for their service on the Audit Committee.
In April 2010, the Board created the position of Non-Executive
Chairman and eliminated the position of Lead Director, effective
following the Annual Meeting of Stockholders. The Non-Executive
Chairman will receive an additional annual cash retainer of
$75,000.
Stock
Options
Non-employee directors are granted stock options with an
exercise price equal to the fair market value of the
Companys common stock on the date of grant. For fiscal
2010, each non-employee director was granted 6,140 options.
Options are fully exercisable upon grant.
Annual
Deferred Stock Retainer
Each non-employee director is paid $60,000 on each July 1 in the
form of SUPERVALU common stock that is credited in share units
to the SUPERVALU INC. Directors Deferred Compensation Plan
(2009 Restatement) described below. The number of shares
credited to each directors account is based upon the price
of the Companys common stock on each July 1.
Retirement
Program
Effective June 27, 1996, our Directors Retirement Program
was discontinued and benefits previously earned by directors
were frozen. A non-employee director first elected to our Board
prior to June 27, 1996, will receive an annual payment of
$20,000 per year for the number of years of the directors
service on the Board prior to June 27, 1996, but for not
more than ten years of such service, after such director ceases
to be a member of the Board. Directors first elected to the
Board after June 27, 1996, do not participate in the
Directors Retirement Program. As a result of this benefit,
Mr. Gage is entitled to an aggregate of $200,000 (payable
in annual installments of $20,000) following his resignation
from the Board. Mr. Lillis is entitled to an aggregate of
$20,000 following his resignation from the Board.
Deferred
Compensation Program
Directors may elect to defer payment of their retainer and
meeting fees under the Directors Deferred Compensation
Plan. Under the Directors Deferred Compensation Plan, a
non-employee director may elect to have payment of all or a
portion of the directors fees deferred and credited to a
deferred stock account or into a deferred cash account. If a
director chooses to defer fees into a deferred stock account,
SUPERVALU then credits the directors account with an
additional amount equal to 10 percent of the amount of fees
the director has elected to defer and contributes the total
amount in the directors account to an irrevocable grantor
(rabbi) trust that uses the amount to purchase
shares of SUPERVALU common stock, which are then allocated to an
account for the director
15
under the trust. Each director is entitled to direct the trustee
to vote all shares allocated to the directors account in
the trust. The common stock in each directors deferred
stock account will be distributed to the director after the
director leaves the Board. Until that time, the trust assets
remain subject to the claims of our creditors. Dividends paid on
the shares of common stock held in each of the directors
accounts are used to purchase additional shares for these
accounts each quarter. If a director chooses to defer all or a
portion of fees into a deferred cash account, interest is
payable on the amount of deferred cash compensation at an annual
rate equal to the twelve- month rolling average of Moodys
Corporate Average Bond Index for the twelve-month period ending
in the month of October preceding the first day of the calendar
year. Payment in cash is made from the cash account following
retirement from the Board.
Reimbursements
and Expenses
Non-employee directors are reimbursed for expenses (including
costs of travel, food and lodging) incurred in attending Board,
committee and stockholder meetings. While travel to such
meetings may include the use of the Company aircraft, if
available or appropriate under the circumstances, the directors
generally use commercial air service. Directors are also
reimbursed for participation in director education programs in
the amount of $7,500 for each director, plus expenses, to be
used every two years. Reimbursements for any non-employee
director did not exceed the $10,000 threshold in fiscal 2010 and
thus are not included in Director Compensation for Fiscal
2010 below.
From time to time, spouses may also join non-employee directors
on the Company aircraft when a non-employee director is
traveling to or from a Board, committee or stockholder meeting
or any other meeting of the Company where such non-employee
director is invited to do so by the CEO. This travel may result
in the non-employee director recognizing income for tax
purposes. The Company does not reimburse the non-employee
director for the taxes incurred in connection with such income.
Non-employee directors are eligible to use the Company aircraft
for personal purposes to the extent that the Company aircraft is
already traveling on Company business or at the direction of the
CEO and there is available space for such non-employee director.
Any such personal use of the Company aircraft may result in the
non-employee director recognizing income for tax purposes, and
the Company does not reimburse the non-employee directors for
any taxes incurred in connection with such personal use.
DIRECTOR
COMPENSATION FOR FISCAL 2010
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Change in
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Pension Value
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and
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Fees
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Nonqualified
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Earned or
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Deferred
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Paid In
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Stock
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Option
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Compensation
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Name(1)
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Cash(2)
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Awards(3)
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Awards(4)
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Earnings(5)
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Total
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A. Gary Ames
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$
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105,000
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$
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60,000
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$
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30,360
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$
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$
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195,360
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Irwin S. Cohen
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105,000
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60,000
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30,360
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195,360
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Ronald E. Daly
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100,000
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62,000
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30,360
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192,360
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Lawrence A. Del Santo
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145,000
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60,000
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30,360
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235,360
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Susan E. Engel
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110,000
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60,000
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30,360
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200,360
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Philip L. Francis
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100,000
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70,000
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30,360
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200,360
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Edwin C. Gage
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100,000
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60,000
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30,360
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190,360
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Garnett L. Keith, Jr.
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130,000
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73,000
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30,360
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86,936
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320,296
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Charles M. Lillis
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120,000
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60,000
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30,360
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210,360
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Marissa T. Peterson
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105,000
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60,000
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30,360
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195,360
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Steven S. Rogers
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105,000
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60,000
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30,360
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195,360
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Wayne C. Sales
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100,000
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70,000
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30,360
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200,360
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Kathi P. Seifert
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105,000
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60,000
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30,360
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195,360
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16
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(1) |
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Craig Herkert, our Chief Executive Officer and President, and
Jeffrey Noddle, our Executive Chairman, are not included in this
table because they are employees of SUPERVALU and received no
compensation for service as a director. Compensation for
Mr. Herkert and Mr. Noddle is shown in the Summary
Compensation Table under Executive Compensation. |
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(2) |
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Reflects the amount of cash compensation earned in fiscal 2010
for Board and committee service. Amounts shown include any
amounts deferred by the director under the SUPERVALU INC.
Directors Deferred Compensation Plan described above. |
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(3) |
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Includes: (a) the annual deferred stock retainer for each
director as described above and (b) any additional shares
of common stock awarded to a director as a result of the
directors deferral of fees earned under the SUPERVALU INC.
Directors Deferred Compensation Plan described above. The
amount shown is the aggregate grant date fair value and does not
reflect compensation actually received by the director. This
amount consists of the aggregate grant date fair value of grants
of stock awards granted in fiscal 2010 computed in accordance
with Financial Accounting Standards Board (FASB)
Accounting Standards Certification (ASC) Topic 718.
Refer to Notes 1 and 9 to the Consolidated Financial
Statements in our Annual Report on
Form 10-K
for the fiscal year ended February 27, 2010 for our policy
and assumptions made in determining the grant date fair value of
share-based payments. As of February 27, 2010, the last day
of our fiscal year, each of the non-employee directors had
shares credited to their account under the SUPERVALU INC.
Directors Deferred Compensation Plan Trust as follows:
Mr. Ames, 9,546 shares; Mr. Cohen,
12,253 shares; Mr. Daly, 16,880 shares;
Mr. Del Santo, 36,962 shares; Ms. Engel,
43,197 shares; Mr. Francis, 25,111 shares;
Mr. Gage, 20,260 shares; Mr. Keith,
69,012 shares; Mr. Lillis, 56,872 shares;
Ms. Peterson, 17,435 shares; Mr. Rogers,
17,715 shares; Mr. Sales, 24,564 shares and
Ms. Seifert, 13,047 shares. |
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(4) |
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The amount shown is the aggregate grant date fair value and does
not reflect compensation actually received by the director. This
amount consists of the aggregate grant date fair value of grants
of option awards granted in fiscal 2010 computed in accordance
with FASB ASC Topic 718. Refer to Notes 1 and 9 to the
Consolidated Financial Statements in our Annual Report on
Form 10-K
for the fiscal year ended February 27, 2010 for our policy
and assumptions made in determining the grant date fair value of
share-based payments. As of February 27, 2010, the last day
of our fiscal year, each of the non-employee directors had the
following stock options outstanding: Mr. Ames,
24,280 shares; Mr. Cohen, 42,280 shares;
Mr. Daly, 36,280 shares; Mr. Del Santo,
62,280 shares; Ms. Engel, 64,280 shares;
Mr. Francis, 30,280 shares; Mr. Gage,
62,280 shares; Mr. Keith, 61,354 shares;
Mr. Lillis, 44,280 shares; Ms. Peterson,
42,280 shares; Mr. Rogers, 59,475 shares;
Mr. Sales, 24,280 shares and Ms. Seifert,
24,280 shares. |
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(5) |
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Reflects above-market interest on deferred compensation.
Mr. Keith participates in deferred compensation plan that
was discontinued in July 1996. Mr. Keith is not eligible to
take distributions from this plan until he retires from the
Board. |
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
This Compensation Discussion and Analysis describes the
objectives and features of our executive compensation programs,
explains how we design our executive compensation programs and
the reasons for such design, and shows how we align executive
compensation with the interests of our stockholders. In fiscal
2010, the executive officers described in our Summary
Compensation Table (the NEOs) were:
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Craig R. Herkert Chief Executive Officer
(CEO) and President
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Jeffrey Noddle Executive Chairman
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David L. Boehnen Executive Vice President
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Janel S. Haugarth Executive Vice President;
President and Chief Operating Officer, Supply Chain Services
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Michael L. Jackson Former President and Chief
Operating Officer
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17
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Pamela K. Knous Executive Vice President and Chief
Financial Officer
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David E. Pylipow Executive Vice President, Human
Resources and Communications
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Kevin H. Tripp Former Executive Vice President;
President of Retail Midwest
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Mr. Herkert became our CEO on May 25, 2009. On that
date, Mr. Noddle transitioned from the CEO role to the role
of Executive Chairman. Mr. Jackson and Mr. Tripp
retired from the Company effective August 14, 2009.
The Leadership Development and Compensation Committee (the
Committee) of the Board of Directors oversees the
design and administration of our executive compensation
programs. Compensation for our NEOs and other executive officers
is reviewed and approved by the Committee on an annual basis.
Fiscal
2010
For fiscal 2010, the Committee recognized the difficult economic
environment and its impact on major grocery retailers,
stockholders, customers and other stakeholders. With that
backdrop, the Committee sought to compensate our executives in a
way that would appropriately recognize their contributions to
the Company during fiscal 2010, while remaining consistent with
the Companys
pay-for-performance
objectives and the best interests of our stockholders.
In light of the Companys performance during fiscal 2009
and fiscal 2010, the following compensation actions occurred:
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The Committee determined that, as part of its focus on
pay-for-performance,
base salaries for NEOs and certain other officers would not be
increased and have remained frozen since fiscal 2008.
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We did not pay any bonuses to the executives named in our fiscal
2009 proxy statement under the fiscal 2009 annual cash incentive
plan.
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We did not pay any bonuses to our executives or other employees
under the Companys Long-Term Incentive Program
(LTIP) for the fiscal
2009-2010
performance period.
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Program
Objectives and Philosophy
As part of the Committees regular review of its
compensation philosophy, the Committee determined that no
changes would be made to the compensation philosophy and the
material elements of our executive compensation program from
fiscal 2009 to fiscal 2010. As part of a fiscal 2010 review, the
Committee reaffirmed that SUPERVALUs executive
compensation programs will:
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Emphasize a design that aligns compensation with the long-term
enhancement of stockholder value and the execution of strategic
business imperatives;
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Ensure that the majority of compensation opportunities are
through incentive programs that reward executives based on the
achievement of corporate results
(pay-for-performance); and
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Provide a compensation opportunity that is generally targeted at
the median of the competitive market (as defined below).
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SUPERVALUs executive compensation programs are structured
to provide a mix of fixed and variable compensation, with
variable compensation delivered via short-term and long-term
incentives that help to align the priorities and actions of
executives with the interests of our stockholders. Therefore, a
significant portion (65 to 86 percent) of targeted
compensation is performance-based. The total target compensation
opportunity is generally calibrated to the middle of the
competitive market (as defined below).
The variable components of the compensation program are designed
so that our executives total compensation will be above
the median of our competitive market when our results are above
the target levels of performance established by the Committee
and below the median of our competitive market when our results
fall below this targeted performance. These target performance
levels will be established based on both internal standards and
external comparisons. This relative fluctuation in compensation
value increases or decreases by the significant use
18
of equity-based components in the program, namely performance
shares, stock options and stock appreciation rights
(SARs). Therefore, actual total compensation
realized, as compared to established targets, will significantly
increase or decrease in direct correlation to our stock price.
Significant use of equity-based components, along with stringent
ownership and retention requirements (described below), ensures
alignment of executive compensation with stockholder value.
Competitive Market. The Company seeks to offer
its executives compensation opportunities targeted at the median
of the competitive market. In assessing competitiveness, the
Committee reviews compensation information for
similarly-situated executives at companies in a self-constructed
comparison group, as well as compensation information available
from third-party surveys. This information is used to inform the
Committee of competitive pay practices, including the relative
mix among elements of compensation. This information is also
used to determine, as a point of reference for each NEO, a
midpoint (or median) within the competitive compensation range,
for base salary, annual cash incentive, long-term equity
incentives and the total of these elements.
The Committee believes that evaluating each executives pay
elements and the total target pay opportunity relative to a
median helps it to assess the overall competitiveness in the
marketplace of the Companys compensation. However, the
Committee also recognizes that comparative pay assessments have
inherent limitations, due to the lack of precise comparability
of executive positions between companies as well as the
companies themselves. As a result, the competitive medians are
used only as a guide and are not the sole determinative factor
in making compensation decisions for the NEOs. In exercising its
judgment, the Committee looks beyond the competitive market data
and considers individual job responsibilities, individual
performance, experience, compensation history, internal
comparisons and compensation at former employers (in the case of
new hires).
The Committee defines our competitive market for our NEOs to be
the median range of publicly available compensation information
using a comparison group and several third-party compensation
surveys. The surveys used by the Committee provide data on
similarly sized organizations based on revenue and industry. In
fiscal 2010, the Committee looked at third-party retail,
wholesale and general industry surveys conducted by Hewitt
Associates, Towers Perrin and Watson Wyatt. Those surveys were
the Hewitt Total Compensation Management Database, the Towers
Perrin Executive Compensation Database, the Towers Perrin
Retail/Wholesale Executive Compensation Database and the Watson
Wyatt Industry Report on Top Management Compensation
Retail/Wholesale Sector. The Committee assesses the
reasonableness of our total compensation levels and mix relative
to the benchmark data through a competitive assessment.
For fiscal 2010, our competitive comparison group consisted of
the following 25 retail and distribution companies:
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Comparison Group
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AmerisourceBergen Corporation
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Kohls Corporation
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Sears Holdings Corporation
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AutoNation, Inc.
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The Kroger Co.
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Staples, Inc.
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Best Buy Co. Inc.
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Lowes Companies, Inc.
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Sysco Corporation
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Cardinal Health, Inc.
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Macys, Inc.
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Target Corporation
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Costco Wholesale Corporation
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McKesson Corporation
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The TJX Companies, Inc.
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CVS Caremark Corporation
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Office Depot, Inc.
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Wal-Mart Stores, Inc.
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The Gap, Inc.
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Publix Super Markets, Inc.
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Walgreen Co.
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The Home Depot, Inc.
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Rite Aid Corporation
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J.C. Penney Company, Inc.
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Safeway Inc.
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The 25-company competitive comparison group approved by the
Committee and disclosed above was reviewed during fiscal 2010 by
our independent compensation consultant, Towers Perrin, with
input from the Committee, and was selected from
U.S.-based
companies based on revenue, size and industry.
With respect to the competitive comparison group, the Committee
looked at revenue, operating income, net income, total assets,
total equity and market capitalization to create a composite
rank. SUPERVALUs composite ranking was in the middle of
this 25-company competitive comparison group.
19
Generally, the Committee will maintain the continuity of the
companies within the competitive comparison group from year to
year; however, changes in the composition of the group may occur
as companies enter or exit the publicly-traded marketplace or as
the relative size of the companies in the comparison group
changes. For fiscal 2010, there were no changes to this group
from the prior fiscal year.
Compensation Process. For the NEOs other than
the CEO and the Executive Chairman, the Committee reviews and
approves all compensation decisions. As part of that review, the
Committee takes into consideration competitive market analyses
and the recommendations of our human resources staff, the
independent compensation consultants and the CEO. The Committee
will review periodically the relationship of target compensation
levels for each NEO relative to the compensation target for the
CEO. In addition, the Committee periodically will review
internal equity relationships for comparable positions across
peer companies.
For the CEO, the Committee prepares compensation recommendations
for ultimate review and approval by the Board of Directors, with
the CEO and Executive Chairman abstaining from such review and
approval. In making its compensation recommendations regarding
our CEO, the Committee takes into consideration the Board of
Directors annual performance evaluation of our CEO,
internal equity relationships, competitive market analyses for
other chief executive officers based on publicly available
information and information provided by our human resources
staff and independent compensation consultant. Recommendations
with respect to compensation of our CEO are not shared with the
CEO during this process.
In setting the compensation for the Executive Chairman, the
Committee prepares compensation recommendations for ultimate
review and approval by the Board of Directors, with the CEO and
Executive Chairman abstaining from such review and approval.
With regard to fiscal 2010, in making the recommendation
regarding the Executive Chairmans compensation, the
Committee took into consideration the nature of the transition
by Mr. Noddle from CEO to Executive Chairman.
Generally, the Committee, on an annual basis, reviews and
recommends to the full Board of Directors for approval with
respect to the CEO and the Executive Chairman, and approves, for
the other NEOs, base salaries, annual cash incentive, long-term
equity incentives and any other agreements that we would enter
into with any NEO. For fiscal 2010, the review for all
executives (excluding the CEO and Executive Chairman), was
conducted in May 2009 at the Committees regular meeting.
Compensation for Mr. Herkert, in his role as CEO, and
Mr. Noddle, in his role as Executive Chairman, was
determined separately from the general review process in
connection with the appointment of Mr. Herkert to the
position of CEO.
Compensation
Consultant
The Committee has the authority to retain outside compensation
consultants to assist in the evaluation of executive
compensation or to otherwise advise the Committee. The Committee
directs the work of such consultants, and decisions regarding
compensation of our NEOs are ultimately made by the Committee
and, in the case of our CEO and Executive Chairman, by the Board.
The Committee retained Towers Perrin (Towers Watson following
the merger with Watson Wyatt during fiscal 2010) as its
compensation consultant to assist the Committee with its
evaluation and assessment of executive compensation. The
compensation consultant also assisted the Committee with the
review of its self-selected comparison group used for purposes
of benchmarking compensation levels and relative mix for fiscal
2010.
In anticipation of the merger between Towers Perrin and Watson
Wyatt, in fiscal 2010, the Committee adopted a policy whereby
any consulting work done by Towers Watson with expected billings
in excess of $25,000, excluding work for the Committee, is
subject to pre-approval by the Committee.
For fiscal 2010, the aggregate amount of fees for additional
services, not including consulting related to broad-based plans,
provided by Towers Perrin and Towers Watson following the merger
did not exceed $120,000.
20
Elements
of Compensation
For fiscal 2010, the principal elements of our executive
compensation program consisted of the following components:
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Base salary;
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Annual cash incentive;
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Long-term equity incentives in the form of performance shares,
stock options and SARs that pay out in cash;
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Restricted stock awards;
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Change-of-control
and other separation agreements and policies;
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Non-qualified deferred compensation, supplemental executive
retirement plans and pension benefits; and
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Executive perquisites.
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Compensation
Mix
The table below illustrates how the primary components of target
executive compensation (base salary, annual cash incentive
opportunity and long-term equity incentive opportunity) is
allocated between performance and non-performance based
components, how performance-based compensation is allocated
between annual and long-term components and how total
compensation is allocated between cash and equity components.
For our NEOs in fiscal 2010, excluding Mr. Jackson and
Mr. Tripp, that target allocation was as follows:
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2010 Fiscal Year Compensation Mix
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(Base Salary, Annual Cash Incentive Opportunity and Long-Term
Equity Incentive Opportunity)(1)
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Percent of Performance-
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Percent of Total
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Based Total Compensation
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Percent of Total
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Compensation That is:
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That is:
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Compensation That is:
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Not
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Long-
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Performance-
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Performance-
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Term
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Cash-
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Equity-
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Name
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Based(2)
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Based(3)
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Annual(4)
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(5)
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Based(6)
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Based(7)
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Craig R. Herkert
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86
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%
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14
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%
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24
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%
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76
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%
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35
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%
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65
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%
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Jeffrey Noddle
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81
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19
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36
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64
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49
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51
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David L. Boehnen
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63
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37
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52
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48
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74
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26
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Janel S. Haugarth
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65
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35
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54
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46
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70
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30
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Pamela K. Knous
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67
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33
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48
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52
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65
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35
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David E. Pylipow
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64
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36
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55
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45
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71
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29
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(1) |
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Total compensation for purposes of this table is different than
the Total column used in the Summary Compensation Table under
Executive Compensation below. Total compensation as
used above is the total of base salary and annual cash and
long-term equity incentive opportunities, both at the target
level only. |
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(2) |
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Sum of target annual cash incentive and target long-term equity
incentives divided by target total compensation. |
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(3) |
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Base salary divided by target total compensation. |
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(4) |
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Target annual cash incentive divided by the sum of target annual
cash incentive and target long-term equity incentives. |
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(5) |
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Target long-term equity incentive divided by the sum of target
annual cash incentive and target long-term equity incentives. |
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(6) |
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Sum of base salary and target annual cash incentive divided by
target total compensation. |
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(7) |
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Target long-term equity incentives divided by target total
compensation. |
21
The Committee believes that this compensation mix aligns with
the Companys compensation philosophy of
pay-for-performance
and goals because:
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a significant percentage (ranging from 63 to 86 percent) of
each NEOs compensation is performance-based;
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a significant percentage (ranging from 45 to 76 percent) of
each NEOs performance-based compensation serves to motivate and
retain the executives for the Companys long-term
success; and
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a significant percentage (ranging from 29 to 65 percent) of
each NEOs compensation is equity-based, which serves to tie
executive compensation to the long-term enhancement of
stockholder value.
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Fiscal
2010 Compensation Decisions
In connection with Mr. Herkerts appointment as our
new CEO in May 2009, Mr. Herkert received annual base
compensation of $850,000 and is eligible to receive an annual
bonus under the Companys annual cash incentive plan for
fiscal 2010 with a target amount of 150 percent of his base
salary. In addition, the Board of Directors approved a grant of
nonqualified stock options with a value of $2 million that
vested 20 percent immediately upon the date of grant and
will vest 20 percent per year on successive anniversaries
of the date of grant. The Board of Directors also granted
Mr. Herkert a one-time restricted stock award with a value
of $5 million. The shares will be subject to restriction
which will lapse over a period of four years with
25 percent of the shares vesting on the first anniversary
of the date of grant and the remaining shares vesting annually
in equal increments on successive anniversaries of the date of
grant. Mr. Herkert is also eligible for an award under the
Companys LTIP for the fiscal
2010-2012
performance period with a target payout value of $2 million
in stock and cash and an actual payout value of $0 to
$4 million based on the Companys performance for the
fiscal
2010-2012
performance period. Mr. Herkerts compensation package
was, in the view of the Board, within the range of competitive
salaries and reasonable when compared to other executives at the
Company and would likely be sufficient to attract him to the
Company.
In connection with his transition from CEO to Executive
Chairman, the Compensation Committee recommended to the Board
and the Board determined that Mr. Noddles base salary
and annual incentive bonus opportunity for fiscal 2010 would
remain the same as his fiscal 2009 base salary and annual
incentive bonus opportunity. It was also determined that
Mr. Noddle would be entitled to a prorated portion of his
award under the Companys LTIP for the fiscal
2010-2012
performance period, if an award is earned. However, in his new
position, Mr. Noddle did not receive any additional grants
of stock options or SARs.
In May 2009, the Committee approved the targeted annual
compensation for fiscal 2010 listed below. The fiscal 2010
target amount is comprised of the following: base salary, annual
cash incentive award assuming achievement of target performance,
stock options and SARs granted during the fiscal year valued as
of the grant date and an annual allocation of the long-term
incentive award assuming achievement of target performance at
the end of the three-year performance cycle.
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Fiscal 2010 Targeted
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Name
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Annual Compensation
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Craig R. Herkert
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$
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6,125,000
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Jeffrey Noddle
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5,855,000
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David L. Boehnen
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1,517,000
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Janel S. Haugarth
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1,497,000
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Pamela K. Knous
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2,036,000
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David E. Pylipow
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1,158,000
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The fiscal 2010 target amounts differ from the amounts reflected
in the Summary Compensation Table because:
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the above table assumes that annual cash incentive awards are
earned at the target award level while the Summary Compensation
Table reflects actual amounts earned in the fiscal year;
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the above table assumes that long-term performance shares are
earned at the target level while the Summary Compensation Table
reflects the probable outcome of the performance;
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22
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the target amount does not include any one-time restricted stock
grants used for purposes of retention under special
circumstances, while the Summary Compensation Table includes
compensation expenses during the year attributable to all
awards; and
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the Summary Compensation Table reflects a variety of other
elements of compensation, such as perquisites, changes in
pension value and earnings on deferred compensation, that the
Committee does not consider when setting annual compensation
levels for the NEOs.
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Base
Salaries
SUPERVALU provides the NEOs and other executives with an annual
base salary that is not subject to performance risk. Salary
levels for our NEOs are based on individual performance and
experience, job responsibility, internal equity and salary
levels that take into consideration the competitive market. For
fiscal 2010, the Committee determined that, as part of its focus
on
pay-for-performance,
base salaries for NEOs and certain other officers would not be
increased and have remained frozen since fiscal 2008.
Annual
Cash Incentive
In General. SUPERVALU provides its NEOs and
other executives an annual cash incentive opportunity in order
to align executive compensation with the achievement of
SUPERVALU financial goals that support our business plans.
The Committee establishes annual target award opportunities
expressed as a percentage of base salary paid during the fiscal
year, as well as threshold and maximum award opportunities
expressed as a percentage of base salary. For fiscal 2010,
annual cash incentive opportunities for the NEOs ranged from
100 percent to 150 percent (for the CEO and Executive
Chairman only) of base salary paid for the year, at target
levels of performance, up to a possible range of
200 percent to 300 percent (for the CEO and Executive
Chairman only) of base salary for performance meeting or
exceeding the maximum performance level, subject to the effect
of a corporate same-store sales multiplier (as discussed below),
which can enhance or reduce an award based on actual same-store
sales performance.
Performance Measures and Objectives. For
fiscal 2010, the Committee selected, for each of our NEOs who
are Corporate Executives as noted in the table below, Corporate
Net Earnings as the primary performance measure for our annual
cash incentive plan because it believes that corporate net
earnings growth correlates directly with our business objectives
and the creation of fundamental value for our stockholders.
Corporate Net Earnings is subject to a corporate same-store
sales growth multiplier ranging from 0.8 to 1.2 based on the
level of same-store sales growth achieved. The other components
for Corporate Executives are Corporate Cash Flow and Diversity.
For each of our NEOs who are Retail/Supply Chain Executives as
noted in the table below, the primary performance measures are
Corporate Results and Business Unit Earnings (both defined
below), which are also subject to a sales growth multiplier. The
other components for Retail/Supply Chain Executives are
Diversity and Business Unit Inventory Days Supply (as defined
below).
Corporate Results is comprised of Corporate Net
Earnings, subject to the corporate same-store sales growth
multiplier. The Business Unit Earnings performance
measures for the Retail/Supply Chain Executives correspond to
our business units which align executive incentives more closely
with the business unit over which they have responsibility and
control. Business Unit Inventory Days Supply is
calculated by dividing the business units average
inventory for the performance cycle by daily cost of goods sold
for the performance cycle. Payout is based on reducing the
inventory days supply. The Diversity component for each of the
NEOs is based on net improvements in diversity representation
over fiscal 2009.
The goals that the Committee establishes for Business Unit
Earnings, Corporate Cash Flow and Corporate Results are intended
to encourage our executives to meet or exceed operational goals.
The threshold-level goals can be characterized as stretch
but attainable, meaning that based on historical
performance, although attainment of this performance level is
uncertain, it can reasonably be anticipated that threshold
performance may be achieved, while the target and maximum goals
represent increasingly challenging and aggressive levels of
performance. The Company does not publicly disclose specific
business unit earnings objectives, as its business plan is
highly
23
confidential. Disclosing specific objectives would provide
competitors and other third parties with insights into the
planning process, as well as the strategic initiatives of the
Company, and would therefore cause competitive harm.
The Committee also determined that the annual cash incentive
plan elements for fiscal 2010 can pay out independently of each
other.
The fiscal 2010 performance measures for our annual cash
incentive plan were as follows:
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Retail
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Corporate
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/Supply Chain
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Performance Measure
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Executives(1)
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Executives(2)
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Corporate Net Earnings(3)
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70
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%
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0
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%
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Corporate Results (as described above)
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0
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40
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Business Unit Earnings(3)
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0
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30
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Business Unit Inventory Days Supply
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0
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20
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Corporate Cash Flow
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20
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0
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Diversity
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10
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10
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(1) |
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Includes Mr. Herkert, Mr. Noddle, Mr. Boehnen,
Ms. Knous and Mr. Pylipow (together, the
Corporate Executives). |
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(2) |
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Includes Ms. Haugarth, Mr. Jackson and Mr. Tripp
(together, the Retail/Supply Chain Executives). |
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(3) |
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This amount is subject to increase or decrease based on the
same-store sales growth multiplier. |
For fiscal 2010, the Corporate Net Earnings performance goals
under our annual cash incentive plan were as follows:
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Corporate
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Percent of Target
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Performance Level
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Net Earnings
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Award Payout
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Maximum
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$
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590
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200
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%
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Target
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$
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554
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100
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Threshold
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$
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512
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50
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The threshold performance level for Corporate Net Earnings for
fiscal 2010 was based on the Companys fiscal 2010 budget,
not
year-over-year
growth as in past years. In setting the threshold performance
level for fiscal 2010, the Committee looked at the
Companys budgeting process and the economic environment.
As a result of the Committees review, the performance
levels for fiscal 2010 were decreased from fiscal 2009.
For fiscal 2010, the threshold Corporate Cash Flow and Diversity
performance levels were each set at 50 percent of the
award, the target performance levels were set at
100 percent and the maximum performance levels were set at
200 percent. Corporate Cash Flow is generally defined by
the Committee to be earnings before interest, taxes,
depreciation and amortization (EBITDA) plus one-time transaction
costs related to store closures and stock option expense, less
interest, dividends, taxes and capital expenditures, net of
proceeds from routine asset sales.
Discretionary Adjustments. The Committee
reviews the quality of the Companys performance and
determines the extent to which performance goals under the
annual cash incentive plan are met in April of each year, after
completion of the Companys financial statements. In making
this determination, the Committee may apply discretion such that
the numbers used for our annual cash incentive performance goals
may differ from the numbers reported in the Companys
financial statements. In applying this discretion, the Committee
may exclude all or a portion of both the positive or negative
effect of external events that are outside the control of our
executives, such as natural disasters, litigation or regulatory
changes in accounting or taxation standards. These adjustments
may also exclude all or a portion of both the positive or
negative effect of unusual or significant strategic events that
are within the control of our executives, but that are
undertaken with an expectation of improving our long-term
financial performance, including restructurings, acquisitions or
divestitures. For fiscal 2010, the Committee did not use its
discretion to adjust actual results.
Actual Award Payments. For fiscal 2010,
Corporate Net Earnings did not meet the threshold required by
the Committee, resulting in no award payment to our Corporate
Executives under this component. Similarly, there was
24
not a payment under this component in fiscal 2009. Because
Corporate Net Earnings did not meet the performance threshold,
the corporate same-store sales growth multiplier was not
triggered.
For fiscal 2010, Corporate Results did not meet the threshold
required by the Committee, resulting in no award payment to our
Retail/Supply Chain Executives under this component.
However, based on the results achieved with respect to Business
Unit Earnings, Corporate Cash Flow and Diversity, all our of
Named Executive Officers received payouts representing between
15 and 39.3 percent of their total target award.
Annual Discretionary Bonus Pool. An annual
discretionary bonus pool exists from which our CEO may make
discretionary cash awards to the NEOs and other corporate
officers (other than himself) in recognition of their
extraordinary achievements during any given fiscal year. Awards
from the pool may not exceed $750,000 in the aggregate or
$100,000 to any one individual during any fiscal year. For
fiscal 2010, Mr. Herkert provided discretionary awards to
certain of the Companys officers, including an award in
the amount of $100,000 to Mr. Pylipow.
Long-term
Equity Incentives
In General. SUPERVALU provides the NEOs and
other executives with long-term equity incentive awards in order
to tie a significant portion of each executives total
compensation to the long-term financial results of the Company
and to align incentives more meaningfully with the interests of
our stockholders. For fiscal 2010, SUPERVALU provided a grant of
stock options for all NEOs, excluding Mr. Noddle, and a
grant of SARs for all NEOs, excluding Mr. Herkert and
Mr. Noddle. The Board of Directors determined that other
forms of compensation were more appropriate for Mr. Herkert
and Mr. Noddle in their new roles.
Executives, including Mr. Herkert and Mr. Noddle also
participate in the Companys LTIP, which was a grant of
performance shares with a three-year performance cycle. The
Committee established the total value of the long-term award for
each NEO in such a manner that achievement of the target levels
of performance would result in long-term incentives within the
median range of the competitive market. Any award earned by
Mr. Noddle under the Companys LTIP for the fiscal
2010-2012
performance period will be prorated based on service.
The Committee believes that various forms of long-term awards
provide incentives to executives that can impact different
corporate objectives. The granting of stock options and SARs is
designed to be a source of motivation for SUPERVALU employees,
more closely aligning long-term employee interest with the
interests of the Companys stockholders. Grants of
performance shares can align an employees long-term
interest with the Companys stockholders and can serve as a
method of retention for key employees.
Stock Options. Stock options directly link a
portion of each executives compensation to stock price
appreciation. Each NEOs stock option grant is established by the
Committee or Board, in the case of the CEO, as described above
with respect to awards of total long-term incentives. Stock
options generally have a grant date that is the same
date as the date of Committee approval, or Board approval in the
case of our CEO, and have an exercise price equal to the fair
market value on the grant date. In the event that stock markets
are closed for trading on the approval date, options are then
priced based on the fair market value of the Companys
stock on the first day in which markets are open for trading
following the approval date. In addition, stock options
currently have a seven-year contractual exercise term and vest
20 percent on the date of grant and 20 percent on each
of the next four anniversaries of the date of grant, subject to
the following post-termination and
change-of-control
provisions:
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Event
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Award Vesting
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Exercise Term(3)
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Death, Disability or Retirement(1)
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Accelerated
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Remaining Term
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Other Termination
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None
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Two years(2)
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Change of Control
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Accelerated
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Remaining Term
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(1) |
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Retirement is defined as termination at or after age 55
with 10 or more years of service. If termination occurs because
of death or disability before the age and years of service for
retirement have been satisfied, the remaining exercise term will
be two years following termination or the remainder of the
original contractual term, if shorter. |
25
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(2) |
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Or remainder of original contractual term, if shorter. |
|
(3) |
|
The Company has the right to repurchase shares issued under
stock options within six months before or three months after
termination for cause or if the terminated executive breaches
the confidentiality or non-competition provisions in the award
agreement. |
In April 2007, our equity compensation plans were amended to
change the definition of fair market value from the average of
the opening and closing market price of the Companys stock
to the closing market price of the Companys stock on the
applicable date; provided, however, for options approved by the
Committee or the Board on a date that Company executives would
otherwise be restricted from trading in our stock as a result of
a black-out trading restriction relating to the
release of earnings results or other corporate matters, the
grant date will be delayed until the first trading day after the
expiration of the black-out period. We do not have any other
program, plan or practice to time stock option grants to
executives in coordination with the release of material
non-public information. In addition, we have a black-out policy
that prohibits employees from trading in our stock during
periods when they are aware of material non-public information.
Stock options granted prior to April 2005 have a
10-year
contractual exercise term, and provide for an automatic one-time
reload or restoration stock option upon the exercise of the
original stock option using shares of SUPERVALU stock to pay the
exercise price. The restoration stock option is for the same
number of shares used to pay the exercise price and applicable
withholding taxes, has an exercise price equal to the fair
market value of SUPERVALU stock on the date of exercise and is
exercisable for the remaining contractual exercise term of the
original stock option.
Stock Appreciation Rights. In fiscal 2010,
SUPERVALU provided a grant of SARs to NEOs and other executives,
excluding the CEO and Executive Chairman. The Committee
discussed the trends in executive compensation and the
Companys commitment to maintain average annual equity
grants at a level not greater than 2.91 percent of common
stock outstanding over the three-year period ending with fiscal
2010, while continuing to provide an incentive that is aligned
with the interests of the Companys stockholders. The
Committee decided that, in addition to an annual grant of stock
options, cash-settled SARs were an appropriate method of
achieving such goals. These SARs vest 20 percent on the
date of grant and 20 percent on each of the next four
anniversaries of the date of grant.
Performance Shares. Beginning with fiscal
2010, the Committee changed the design of its performance share
program from a two-year performance cycle to a three-year
performance cycle. As with stock options and SARs, awards of
performance shares are established by the Committee as described
above with respect to awards of total long-term incentives. The
Committee determined that a three-year performance cycle would
focus employees on longer-term results and eliminate wide swings
in payouts of long-term awards. The fiscal
2010-2012
long-term incentive program will be based on the achievement of
return on invested capital (ROIC) goals.
26
The material provisions of the performance share awards for
fiscal
2010-2012
are summarized below:
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Provision
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|
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Description
|
|
Current Performance Period
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|
|
Fiscal year 2010 through 2012 (three-year performance cycle).
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|
Award Value
|
|
|
|
Based on underlying value of our stock as of the last trading
day of the last fiscal year in the performance cycle.
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|
|
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|
Performance Measure
|
|
|
|
Combined three-year average ROIC.
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|
|
|
ROIC is defined by the Committee as earnings before interest and
taxes for each year of the performance cycle, divided by
invested capital.
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|
|
Invested capital is the sum of the
Companys interest-bearing short-term borrowings,
interest-bearing long-term debt, stockholders equity and the
present value of capital leases, subject to certain adjustments.
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|
Invested capital for the performance period is calculated by
computing the sums of (i) the invested capital as of the last
day of the Companys fiscal year immediately preceding such
performance period; and (ii) the invested capital as of the end
of each fiscal year comprising such performance period, and
dividing such sum by three (the number of fiscal years in the
performance period).
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|
Performance Goals
|
|
|
|
Maximum award is 200 percent of performance shares granted
if ROIC is at or above 13.6 percent.
|
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|
|
Target award is 100 percent of performance shares granted
if ROIC is at target level of 14.6 percent.
|
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|
Threshold award is 50 percent of performance shares granted
if ROIC is at 15.6 percent.
|
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Award Payment
|
|
|
|
Half of the award will be made in shares of stock at the end of
the performance cycle and half of the award will be made in
cash-settled units representing the right to receive cash in the
amount equal to the fair market value of one share of SUPERVALU
common stock at the end of the performance cycle
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|
|
|
Vesting of this award may occur if the Committee determines to
accelerate the earning of the performance shares if the employee
ceases to be an employee of the Company prior to the vesting of
performance shares.
|
The Committee chose ROIC as the performance measure for the
performance share program because it believes this measure is an
accurate assessment of how well the Company is performing from a
financial standpoint. ROIC indicates how efficiently and
effectively capital is deployed by management. Performance goals
are established in connection with the Companys annual
financial planning process. In establishing our performance
goals for this measure, the Committee considers the extent to
which the Company will generate ROIC for the performance cycle
that represents an appropriate improvement, as determined by the
Committee. The Committee takes into consideration a variety of
factors, including future expectations of operating earnings and
capital deployment in our strategic plans.
The Committee reviews the quality of the Companys
performance and determines the extent to which performance goals
are met in April at the end of the three-year performance cycle,
after completion of the Companys financial statements, for
the purposes of determining the actual number of shares of stock
and the number of cash-settled units that will be granted to
each executive under the terms of the performance share award.
In making this determination, the Committee may apply discretion
such that the numbers used for our performance share goals may
differ from the numbers reported in the Companys financial
statements. In applying this discretion, the Committee may
exclude all or a portion of both the positive or negative effect
of external events that are outside the control of our
executives, such as natural disasters, litigation or regulatory
changes in accounting or taxation standards. These adjustments
may also exclude all or a portion of both the positive or
negative effect of unusual or significant strategic events that
are within the control of our executives, but are undertaken
with an expectation of improving our long-term financial
performance, including restructurings, acquisitions or
divestitures.
27
For fiscal 2010, the ROIC performance measures did not meet the
threshold required by the Committee, resulting in no award
payment under the Companys LTIP for the fiscal
2009-2010
performance period.
Restricted stock. As discussed above,
SUPERVALU provided a grant of restricted stock to
Mr. Herkert in connection with his appointment as our new
CEO. Ms. Haugarth and Mr. Pylipow also received a
retention grant of 40,000 shares and 30,000 shares,
respectively, of restricted stock at that time.
Executive
Change of Control Policy
SUPERVALUs objective is to provide NEOs and other
executives with protection under a market competitive
change-of-control
severance agreement. The Committee believes that this benefit
helps to maintain the impartiality and objectivity of our
executives in the event of a
change-of-control
situation so that our stockholders interests are
protected. The Committee reviews this
change-of-control
policy periodically to address whether these protections are
consistent with those provided in our competitive market and to
be in compliance with federal tax rules affecting nonqualified
deferred compensation.
In fiscal 2010, the Committee approved a new form of
change-of-control
agreement and severance plan, after making a determination that
certain changes were needed to bring the Companys program
in line with the Committees philosophy and current market
trends. As a result of the Committees review, benefits
paid out to executives pursuant to a change of control would be
reduced from benefits available under previous change of control
agreements.
The new
change-of-control
agreement supersedes the existing change of control agreements
for the NEOs. The new change of control agreement is summarized
below:
|
|
|
|
|
Agreement Provision
|
|
|
|
Description
|
|
Severance Triggers
|
|
|
|
Involuntary termination without cause, as defined below, or
voluntary resignation for good reason, as defined below, within
2 years following a change of control, or in anticipation
of a change of control.
|
|
|
|
|
Good reason is defined as a reduction in base salary
or target annual cash incentive, duties and responsibilities
that are materially and adversely diminished, forced relocation
of more than 45 miles, failure to provide for assumption of
agreement or material breach of the agreement by the Company.
This definition includes material breach of the agreement by the
Company and omits for the CEO the CEOs termination of
employment for any reason during the seventh month following a
change of control, as compared to the definition in the existing
change of control agreements.
|
|
|
|
|
Cause is defined as continued failure to perform
duties, conviction of a felony, conduct materially and
demonstrably injurious to the Company, material act of personal
dishonesty that results in substantial personal enrichment or
material violation of certain Company policies. This definition
includes material violation of certain Company policies, whereas
the definition in the existing
change-of-control
agreements does not.
|
Severance Benefits
|
|
|
|
3 times for the CEO, 1 time for Mr. Noddle and 2 times for
the other NEOs, of base salary and target annual cash incentive,
plus welfare benefits continuation.
|
|
|
|
|
Earned but unpaid salary and accrued vacation and annual bonus
plan and long-term incentive plan amounts due but not yet paid.
The new
change-of-control
agreement adds the annual bonus plan and long-term incentive
plan amounts due but not yet paid.
|
|
|
|
|
Pro rata annual cash incentive for year of termination.
|
|
|
|
|
Accelerated vesting of all nonvested equity awards at change of
control.
|
|
|
|
|
Best net reduction of compensation to avoid excise
tax. The new
change-of-control
agreement includes best net reduction of
compensation and eliminates full excise tax gross up, as
compared to the existing
change-of-control
agreements.
|
Covenants
|
|
|
|
Non-disclosure of confidential information, non-competition,
non-solicitation of employees, non-solicitation of existing or
prospective customers, vendors and suppliers, return of property
and non-disparagement covenants.
|
28
Executive
Severance Plan
In fiscal 2010, the Committee approved the Executive &
Officer Severance Pay Plan, which provides for severance
benefits for NEOs who are notified on or after May 2, 2009
that their employment is involuntarily terminated without cause,
subject to certain exclusions. The severance plan in effect for
fiscal 2010 is summarized below:
|
|
|
|
|
Agreement Provision
|
|
|
|
Description
|
|
Severance Triggers
|
|
|
|
Involuntary termination without cause, subject to certain
exclusions.
|
|
|
|
|
Cause is defined as continued failure to
perform duties, conviction of a felony, conduct materially and
demonstrably injurious to the Company, personal dishonesty that
results in substantial personal enrichment or failure to comply
with certain Company policies.
|
Severance Benefits
|
|
|
|
2 times for the CEO and 1.5 times for the other NEOs of annual
base salary at time of termination.
|
|
|
|
|
2 times for the CEO and 1.5 times for the other NEOs of the
average of the performance results (expressed as a percentage)
used to determine the NEOs bonus amounts under the annual
bonus plan for the preceding three years (or all bonus amounts,
if the NEO has been employed fewer than three years), multiplied
by the NEOs current target bonus amount.
|
|
|
|
|
Pro rata annual cash incentive and payments for each long-term
incentive plan cycle not completed as of the termination date.
|
|
|
|
|
Reimbursement for COBRA coverage for medical and/or dental
insurance.
|
|
|
|
|
Repayment of severance benefits received by a NEO who the
Company wishes to rehire in any capacity within six months of
the termination date.
|
Deferred
Compensation
Under the Companys Executive Deferred Compensation Plan
(2008 Statement), eligible executives may elect to defer on a
pre-tax basis up to 50 percent of base salary and may elect
to defer up to 100 percent of annual incentive compensation
during the plan year. The program allows executives to save for
retirement on a tax-deferred basis. Under this unfunded plan,
amounts deferred by the executive accumulate on a tax-deferred
basis and are credited at an effective annual interest rate
equal to Moodys Corporate Bond Index, set as of October 1
of the preceding year. The Executive Deferred Compensation Plan
also provides for additional
make-up
contributions that are credited to the participants
account in the Executive Deferred Compensation Plan.
Retirement
Benefits
Consistent with our overall compensation philosophy, SUPERVALU
maintains a retirement plan for all non-union employees under
which a maximum of $195,000 per year in annual benefits may be
paid upon retirement based on limitations imposed by
Section 415 of the Internal Revenue Code (the
Code). Effective December 31, 2007, this plan
was closed to new participants and service crediting for
existing participants was discontinued. Compensation crediting
will be discontinued effective December 31, 2012, at which
time, accrued benefits for all participants will be frozen. In
addition, SUPERVALU maintains a non-qualified supplemental
executive retirement plan and a non-qualified excess benefit
plan for certain highly-compensated employees, including certain
of the NEOs, that allow for the payment of additional benefits
so that such retiring employees may receive, in the aggregate,
at least the benefits they would have been entitled to receive
if the Code did not impose maximum limitations. Our retirement
plans are described in more detail following the Pension
Benefits Table under Executive Compensation.
SUPERVALU provides post-retirement death benefits for certain
designated retired executive officers, which would include those
NEOs that meet the retirement definition of termination at or
after age 55 with 10 or more years of service. Currently,
Mr. Noddle, Mr. Boehnen and Ms. Knous meet the
retirement definition mentioned above. Mr. Jackson and
Mr. Tripp met the retirement definition when they retired
from the Company. The death benefit is fixed at an amount
approximately equal to, on an after-tax basis, an eligible
executives final base salary. The benefits may be funded
through life insurance policies owned by SUPERVALU. No new
participants are eligible to receive these benefits.
29
For all employees who participate in the SUPERVALU STAR 401(k)
Plan, including NEOs, the Company makes a matching contribution
of $1 for every $1 the participant contributes, up to the first
four percent of pay and $0.50 for each $1 the participant
contributes on the next two percent of pay. The Company may also
make additional profit-sharing contributions, at the discretion
of the Companys management, of up to a maximum of three
percent of the eligible participants compensation.
Perquisites
SUPERVALU provides our NEOs and other executives with a limited
perquisites program. This limited perquisite program is
consistent with the Committees focus on performance-based
compensation. The Committee will continue to review this
perquisites program periodically. As part of the
Committees review of the Companys perquisite program
in fiscal 2010, it was determined that the Company will no
longer provide a
gross-up to
cover the individual income tax incurred when the corporate
aircraft is used for personal purposes.
The Company continues to reimburse executives for an annual
physical to encourage executives to be physically healthy, such
that executives can better focus on the business affairs of the
Company. Similarly, providing our CEO and Executive Chairman
with limited personal use of the Companys aircraft
encourages and allows those executives to make travel
arrangements that maximize the efficient use of limited personal
time, and allow more time to focus on the Companys
business for the benefit of the Companys stockholders.
For fiscal 2010, SUPERVALU provided the following executive
benefits and perquisites to our Named Executives Officers:
|
|
|
|
|
Executive Benefit
|
|
|
|
Description
|
|
Post-Retirement Death Benefit Coverage
|
|
|
|
A death benefit of 140 percent of the executives
final base salary paid to the beneficiary.
|
|
|
|
|
Current participants have been grandfathered into this program;
no new enrollment has been allowed since fiscal 2008.
|
Personal Aircraft Usage
|
|
|
|
Limited to Mr. Herkert and his family and Mr. Noddle
and his spouse.
|
|
|
|
|
Up to 30 hours of personal travel per year at the expense
of the Company. Mr. Herkert will receive an additional
5 hours of personal travel in fiscal 2010 related to his
relocation.
|
Executive Physicals
|
|
|
|
Annual reimbursement for the full cost of an executive physical.
|
Executive
Stock Ownership and Retention Program
SUPERVALU has an executive stock ownership and retention program
for our NEOs and other executives so that these executives will
experience the same downside risk and upside potential as our
stockholders experience. The current ownership requirements for
our executives, including the NEOs, are as follows:
|
|
|
|
|
Position
|
|
Multiple of Base Salary
|
|
|
Chief Executive Officer and Executive Chairman
|
|
|
5 times
|
|
Chief Financial Officer(1)
|
|
|
4 times
|
|
Remaining Executive Vice Presidents(2)
|
|
|
3 times
|
|
Corporate Senior Vice Presidents & Presidents
|
|
|
2 times
|
|
Group Vice Presidents & Vice Presidents
|
|
|
1 times
|
|
|
|
|
(1) |
|
Applies to Ms. Knous. |
|
(2) |
|
Applies to all other NEOs, excluding Mr. Jackson and
Mr. Tripp. |
For purposes of complying with our Executive Stock Ownership and
Retention Program, stock is considered owned if the shares are
owned outright or in a vested tax qualified or nonqualified
deferred compensation plan, if the shares are owned by immediate
family members or legal entities established for their benefit,
and if the shares are in the form of unvested restricted stock.
Outstanding unexercised stock options are not considered owned
for purposes
30
of our program. Our NEOs and other executives may not pledge
owned shares as security or enter into any risk hedging
arrangements.
Prior to achieving their ownership objective, executives are
required to retain shares equal to 100 percent of the net
after-tax profit shares received from stock option exercises or
the vesting of restricted stock. After they meet their ownership
goal, NEOs and other executives are required to retain shares
equal to 50 percent of the net after-tax profit shares
received from stock option exercises or the vesting of
restricted stock. This 50 percent retention requirement can
be satisfied on either an individual basis for each stock option
exercise or restricted stock vesting event, or on a cumulative
basis by aggregating all shares held from the exercise of stock
options or the vesting of restricted stock from the date the
executive first met our stock ownership requirement.
For fiscal 2010, all of our NEOs are in compliance with our
program.
Tax and
Accounting Considerations
The Committee monitors changes in the regulatory environment
when assessing the financial efficiency of the various elements
of our executive compensation program. Tax and accounting
consequences are analyzed when adopting new or modifying
existing elements of our executive compensation program.
The Committee has designed and administered our annual cash
incentive plan and long-term equity incentive programs for
executive officers in a manner that generally preserves our
federal income tax deductions. Our annual cash incentives for
executive officers are administered under a stockholder-approved
plan that specifies a formula for determining a maximum annual
individual award limit. Our stock options, SARs and performance
shares for executive officers are granted under other
stockholder-approved plans that specify the maximum number of
shares that may be awarded annually to plan participants. Our
restricted stock unit awards are granted for attraction and
retention purposes and are not performance-based. Thus, our
federal tax deductions from restricted stock awards may be
disallowed under certain circumstances. Although recent changes
to accounting standards have made stock option grants less
favorable, SUPERVALU continues to grant stock options in our
long-term equity incentive program because these grants help to
align the priorities and actions of executives with the
interests of our stockholders. The historic economic value
delivered to executives from these programs has been reasonable
in relation to the compensation cost reported in our financial
statements.
The Committee has designed and administered our deferred
compensation, equity compensation and
change-of-control
severance plans to be in compliance with federal tax rules
affecting nonqualified deferred compensation.
Fiscal
2011
At the April 2010 meeting, the Committee approved the plan
design for the annual cash incentive plan for fiscal 2011. The
Committee established the performance measures for Corporate
Executives as Corporate Net Earnings, Corporate Same Store Sales
and Corporate Cash Flow. For Retail/Supply Chain and
Merchandising Executives, performance measures are Business Unit
Earnings (before interest and taxes), Corporate Cash Flow and
Business Unit Same Store Sales.
The Committee also approved the plan design for the
Companys LTIP for the fiscal
2011-2013
performance period. This program has two components
achievement of an ROIC (return on invested capital) goal and
increases in net diversity. The ROIC goal is weighted at
80 percent, while an increase in diversity is 20 percent.
The Committee approved an increase in the CEOs annual
discretionary bonus pool to $1 million from $750,000.
The Committee also recommended to the Board of Directors that
the restricted stock units granted to Mr. Noddle pursuant
to a retention agreement dated October 12, 2006 (the
Retention Agreement) be accelerated. The Board of
Directors approved this acceleration in light of the
announcement of Mr. Noddles forthcoming retirement
from the Company and because the objectives of the Retention
Agreement had been met. As a result of this acceleration, upon
the effective date of Mr. Noddles retirement, the
remaining 228,868 of the 305,157 units
31
initially granted under the Retention Agreement will vest,
subject to reduction based on the Companys average stock
price for the 90 days immediately preceding his retirement
date.
Additionally, the Committee approved revised forms of equity
award agreements under the 2007 Stock Plan for future grants of
equity awards to officers of the Company, including NEOs. The
revisions include a double trigger for the vesting of awards
following a change of control, which requires termination of
employment under special circumstances within two years of the
change of control.
REPORT OF
THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
The Leadership Development and Compensation Committee has
reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of
Regulation S-K
with management and, based on such review and discussion, the
Committee recommended to the Board that the Compensation
Discussion and Analysis be included in this Proxy Statement.
Respectfully submitted,
Susan E. Engel, Chairperson
Ronald E. Daly
Lawrence A. Del Santo
Edwin C. Gage
Charles M. Lillis
Wayne C. Sales
Kathi P. Seifert
32
EXECUTIVE
COMPENSATION
The following tables and accompanying narrative disclosure
should be read in conjunction with the Compensation
Discussion and Analysis, which sets forth the objectives
of SUPERVALUs executive compensation and benefit program.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Compen-
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
|
Salary(1)
|
|
|
Bonus(2)
|
|
|
Awards(3)
|
|
|
Awards(3)
|
|
|
sation(4)
|
|
|
Earnings(5)
|
|
|
Compensation(6)
|
|
|
|
|
Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Total ($)
|
|
|
Craig R. Herkert
|
|
|
2010
|
|
|
$
|
653,846
|
|
|
$
|
|
|
|
$
|
6,781,654
|
|
|
$
|
2,000,004
|
|
|
$
|
398,183
|
|
|
$
|
|
|
|
$
|
956,325
|
|
|
$
|
10,790,012
|
|
Chief Executive Officer and President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Noddle
|
|
|
2010
|
|
|
|
1,141,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
695,391
|
|
|
|
975,456
|
|
|
|
62,810
|
|
|
|
2,875,542
|
|
Executive Chairman
|
|
|
2009
|
|
|
|
1,163,844
|
|
|
|
|
|
|
|
6,864,947
|
|
|
|
2,860,660
|
|
|
|
|
|
|
|
1,154,688
|
|
|
|
84,999
|
|
|
|
12,129,138
|
|
|
|
|
2008
|
|
|
|
1,130,608
|
|
|
|
|
|
|
|
|
|
|
|
2,425,567
|
|
|
|
1,301,047
|
|
|
|
1,668,314
|
|
|
|
73,963
|
|
|
|
6,599,499
|
|
David L. Boehnen
|
|
|
2010
|
|
|
|
558,850
|
|
|
|
|
|
|
|
237,247
|
|
|
|
323,253
|
|
|
|
226,888
|
|
|
|
185,392
|
|
|
|
26,123
|
|
|
|
1,557,753
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Janel S. Haugarth
|
|
|
2010
|
|
|
|
521,540
|
|
|
|
|
|
|
|
858,160
|
|
|
|
298,388
|
|
|
|
258,480
|
|
|
|
860,601
|
|
|
|
12,526
|
|
|
|
2,809,695
|
|
Executive Vice President;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Operating Officer, Supply Chain Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Jackson
|
|
|
2010
|
|
|
|
310,652
|
|
|
|
|
|
|
|
421,775
|
|
|
|
422,716
|
|
|
|
46,598
|
|
|
|
870,163
|
|
|
|
1,806,268
|
|
|
|
3,878,172
|
|
Former President and
|
|
|
2009
|
|
|
|
686,024
|
|
|
|
|
|
|
|
2,004,072
|
|
|
|
684,114
|
|
|
|
|
|
|
|
266,810
|
|
|
|
18,684
|
|
|
|
3,659,704
|
|
Chief Operating Officer
|
|
|
2008
|
|
|
|
662,828
|
|
|
|
150,000
|
|
|
|
|
|
|
|
697,905
|
|
|
|
304,900
|
|
|
|
327,718
|
|
|
|
13,823
|
|
|
|
2,157,174
|
|
Pamela K. Knous
|
|
|
2010
|
|
|
|
663,465
|
|
|
|
|
|
|
|
332,556
|
|
|
|
422,716
|
|
|
|
269,360
|
|
|
|
254,414
|
|
|
|
23,548
|
|
|
|
1,966,059
|
|
Executive Vice President
|
|
|
2009
|
|
|
|
676,224
|
|
|
|
|
|
|
|
1,580,147
|
|
|
|
682,967
|
|
|
|
|
|
|
|
109,110
|
|
|
|
16,697
|
|
|
|
3,065,145
|
|
and Chief Financial Officer
|
|
|
2008
|
|
|
|
646,378
|
|
|
|
|
|
|
|
|
|
|
|
696,525
|
|
|
|
407,489
|
|
|
|
88,954
|
|
|
|
15,416
|
|
|
|
1,854,762
|
|
David E. Pylipow
|
|
|
2010
|
|
|
|
412,120
|
|
|
|
100,000
|
|
|
|
654,144
|
|
|
|
198,925
|
|
|
|
167,317
|
|
|
|
130,816
|
|
|
|
14,534
|
|
|
|
1,677,856
|
|
Executive Vice President, Human Resources and Communications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin H. Tripp
|
|
|
2010
|
|
|
|
253,846
|
|
|
|
|
|
|
|
199,358
|
|
|
|
198,925
|
|
|
|
99,663
|
|
|
|
32,371
|
|
|
|
1,464,944
|
|
|
|
2,249,107
|
|
Former Executive Vice President;
|
|
|
2009
|
|
|
|
560,577
|
|
|
|
527,850
|
|
|
|
947,254
|
|
|
|
402,420
|
|
|
|
|
|
|
|
|
|
|
|
33,563
|
|
|
|
2,471,664
|
|
President, Retail Midwest(7)
|
|
|
2008
|
|
|
|
543,269
|
|
|
|
796,472
|
|
|
|
|
|
|
|
465,270
|
|
|
|
366,825
|
|
|
|
|
|
|
|
50,040
|
|
|
|
2,221,876
|
|
|
|
|
(1) |
|
Amounts shown are not reduced to reflect the NEOs
elections, if any, to defer receipt of salary under the
Executive Deferred Compensation Plan described in
Compensation Discussion and Analysis. |
|
(2) |
|
Amounts for fiscal 2009 for Mr. Tripp reflect a retention
award provided to legacy Albertsons executives to ensure
their continued employment with the Company from the time of the
Albertsons acquisition. Other bonuses are paid under our
annual cash incentive plan and, accordingly, amounts are
reported under the Non-Equity Incentive Plan Compensation column
of this table. The annual discretionary bonus pool, the
Leadership Development and Compensation Committee discretionary
bonus and the annual cash incentive plan are described in
Compensation Discussion and Analysis. |
|
(3) |
|
The amount shown is the aggregate grant date fair value and does
not reflect compensation actually received by the NEO. This
amount consists of the aggregate grant date fair value of grants
of stock options and other restricted stock awards in fiscal
years 2010, 2009 and 2008, as applicable, computed in accordance
with FASB ASC Topic 718. Refer to Notes 1 and 9 to the
Consolidated Financial Statements in our Annual Report on
Form 10-K
for the fiscal year ended February 27, 2010 for our policy
and assumptions made in the valuation of stock options. The fair
value of each restricted stock award is estimated as of the date
of grant based on the underlying price of the Companys
stock. The amounts in these columns do not include estimated
forfeitures. |
|
|
|
The fair value of performance-based awards is based on the
probable outcome of the performance conditions which is the
target payout under the awards. The maximum payout under such
awards (based on the grant date |
33
|
|
|
|
|
fair value) assuming the highest level of performance for awards
granted in fiscal 2010 under the Companys LTIP for the
2010-2012 performance period are as follows: Mr. Herkert,
$3,563,289; Mr. Boehnen, $474,493; Ms. Haugarth, $388,320; Mr.
Jackson, $843,550; Ms. Knous, $665,112; Mr. Pylipow, $312,287;
and Mr. Tripp, $398,716. The maximum payout under such awards
assuming the highest level of performance for awards granted in
fiscal 2009 under the Companys LTIP for the 2009-2010
performance period are as follows: Mr. Noddle, $13,729,895; Mr.
Boehnen, $2,254,565; Ms. Haugarth, $1,845,109; Mr. Jackson,
$4,008,145; Ms. Knous, $3,160,294; Mr. Pylipow, $1,483,773; and
Mr. Tripp, $1,894,507. There was no payout under the
Companys LTIP for the 2009-2010 performance period. |
|
(4) |
|
Non-equity incentive plan compensation represents any awards
earned in recognition of achievement of performance goals under
the annual cash incentive plan. |
|
(5) |
|
This column represents both changes in pension value for the
NEOs and above market interest earnings on deferred
compensation. The changes in pension values were as follows:
Mr. Noddle, $974,144 for fiscal 2010, $1,154,214 for fiscal
2009 and $1,668,314 for fiscal 2008; Mr. Boehnen, $172,971
for fiscal 2010; Ms. Haugarth $851,218 for fiscal 2010;
Mr. Jackson, $842,712 for fiscal 2010, $257,363 for fiscal
2009 and $321,092 for fiscal 2008; Ms. Knous, $254,414 for
fiscal 2010, $109,110 for fiscal 2009 and $88,954 for fiscal
2008; and Mr. Pylipow, $130,484 for fiscal 2010.
Mr. Tripp had no change in his pension values.
Mr. Noddle had above market interest earnings on deferred
compensation of $1,312 for fiscal 2010, and $474 for fiscal
2009. Mr. Boehnen had above market interest earnings on
deferred compensation of $12,421 for fiscal 2010.
Ms. Haugarth had above market interest earnings on deferred
compensation of $9,383 for fiscal 2010. Mr. Jackson had
above market interest earnings on deferred compensation of
$27,451 for fiscal 2010, $9,447 for fiscal 2009 and $6,625 for
fiscal 2008. Mr. Pylipow had above market interest earnings
on deferred compensation of $332 for fiscal 2010. Mr. Tripp
had above market interest earnings on deferred compensation of
$32,371 for fiscal 2010. |
|
(6) |
|
The following components comprise the amounts of All Other
Compensation for the Named Executive Officers for fiscal
2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
Life
|
|
|
All Other
|
|
|
Tax
|
|
|
|
|
Name
|
|
Contributions
|
|
|
Insurance(a)
|
|
|
Misc Comp(b)
|
|
|
Gross-Ups(c)
|
|
|
Total
|
|
|
Craig R. Herkert
|
|
$
|
15,519
|
|
|
$
|
738
|
|
|
$
|
633,634
|
(d)
|
|
$
|
276,435
|
|
|
$
|
956,325
|
|
Jeffrey Noddle
|
|
|
11,152
|
|
|
|
46,001
|
|
|
|
5,657
|
(d)
|
|
|
|
|
|
|
62,810
|
|
David L. Boehnen
|
|
|
15,071
|
|
|
|
832
|
|
|
|
10,220
|
|
|
|
|
|
|
|
26,123
|
|
Janel S. Haugarth
|
|
|
11,749
|
|
|
|
777
|
|
|
|
|
|
|
|
|
|
|
|
12,526
|
|
Michael L. Jackson
|
|
|
7,299
|
|
|
|
501
|
|
|
|
1,798,468
|
|
|
|
|
|
|
|
1,806,268
|
|
Pamela K. Knous
|
|
|
16,249
|
|
|
|
988
|
|
|
|
6,311
|
|
|
|
|
|
|
|
23,548
|
|
David E. Pylipow
|
|
|
11,874
|
|
|
|
615
|
|
|
|
2,045
|
|
|
|
|
|
|
|
14,534
|
|
Kevin H. Tripp
|
|
|
7,490
|
|
|
|
409
|
|
|
|
1,456,808
|
|
|
|
|
|
|
|
1,464,944
|
|
|
|
|
|
(a)
|
Represents premiums paid for current employee life insurance
coverage under policies maintained by the Company for the
benefit of the NEO. This benefit is described in
Compensation Discussion and Analysis.
|
|
|
|
|
(b)
|
For Mr. Herkert, this amount represents $7,300 for his
executive physical, $70,441 associated with use of the Company
aircraft, $585,892 for moving expenses associated with joining
the Company and moving to Minnesota. For Mr. Noddle, this
amount represents $5,657 for his executive physical. For
Mr. Boehnen, this amount represents $10,220 for his
executive physical. For Mr. Jackson, this amount represents
$197,643 for banked vacation, $1,567,607 paid as severance,
$8,219 for COBRA reimbursement and $25,000 for outplacement
services. For Ms. Knous, this amount represents $6,311 for
her executive physical. For Mr. Pylipow, this amount
represents $2,045 for his executive physical. For
Mr. Tripp, this amount represents $4,896 for his executive
physical, $55,611 for banked vacation, $1,388,087 paid as
severance and $8,214 for COBRA reimbursement.
|
|
|
|
|
(c)
|
Tax reimbursements on income imputed to Mr. Herkert for
moving expenses associated with joining the Company and moving
to Minnesota.
|
34
|
|
|
|
(d)
|
We calculate the incremental cost to the Company of any personal
use of the corporate aircraft based on the cost of fuel,
trip-related maintenance, crew travel expenses, on-board
catering, landing fees, trip-related hangar and parking costs
and other variable costs. Because the corporate aircraft is
primarily for business travel, we do not include the fixed costs
that do not change based on usage, such as pilots
salaries, the purchase cost of the corporate aircraft and the
cost of maintenance not related to trips. The Company does not
permit personal use of the corporate aircraft for any executive
or their spouse other than for Mr. Herkert, Mr. Noddle
and their spouses.
|
GRANTS OF
PLAN-BASED AWARDS FOR FISCAL 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future Payouts
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
Under Equity Incentive Plan Awards(2)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
Stock and
|
|
|
|
Grant
|
|
|
Approval
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
Awards
|
|
|
Craig R. Herkert
|
|
|
5/26/09
|
|
|
|
5/6/09
|
|
|
$
|
490,385
|
|
|
$
|
980,769
|
|
|
$
|
1,961,538
|
|
|
|
62,894
|
|
|
|
125,787
|
|
|
|
251,574
|
|
|
|
|
|
|
|
401,817
|
|
|
$
|
15.90
|
(3)
|
|
$
|
2,000,004
|
|
|
|
|
5/26/09
|
|
|
|
5/6/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
314,466
|
(5)
|
|
|
|
|
|
|
|
|
|
|
5,000,010
|
|
Jeffrey Noddle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Boehnen
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
279,425
|
|
|
|
558,850
|
|
|
|
1,117,700
|
|
|
|
8,375
|
|
|
|
16,750
|
|
|
|
33,500
|
|
|
|
|
|
|
|
32,500
|
|
|
|
16.07
|
(3)
|
|
|
161,723
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,500
|
|
|
|
16.07
|
(4)
|
|
|
161,723
|
|
Janel S. Haugarth
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
260,770
|
|
|
|
521,540
|
|
|
|
1,043,080
|
|
|
|
6,854
|
|
|
|
13,708
|
|
|
|
27,416
|
|
|
|
|
|
|
|
30,000
|
|
|
|
16.07
|
(3)
|
|
|
149,283
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
16.07
|
(4)
|
|
|
149,283
|
|
|
|
|
5/29/09
|
|
|
|
4/25/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(6)
|
|
|
|
|
|
|
|
|
|
|
664,000
|
|
Michael L. Jackson
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
155,326
|
|
|
|
310,652
|
|
|
|
621,304
|
|
|
|
14,889
|
|
|
|
29,778
|
|
|
|
59,556
|
|
|
|
|
|
|
|
42,500
|
|
|
|
16.07
|
(3)
|
|
|
211,484
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,500
|
|
|
|
16.07
|
(4)
|
|
|
211,484
|
|
Pamela K. Knous
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
331,733
|
|
|
|
663,465
|
|
|
|
1,326,930
|
|
|
|
11,740
|
|
|
|
23,479
|
|
|
|
46,958
|
|
|
|
|
|
|
|
42,500
|
|
|
|
16.07
|
(3)
|
|
|
211,484
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,500
|
|
|
|
16.07
|
(4)
|
|
|
211,484
|
|
David E. Pylipow
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
206,060
|
|
|
|
412,120
|
|
|
|
824,240
|
|
|
|
5,512
|
|
|
|
11,024
|
|
|
|
22,048
|
|
|
|
|
|
|
|
20,000
|
|
|
|
16.07
|
(3)
|
|
|
99,522
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
16.07
|
(4)
|
|
|
99,522
|
|
|
|
|
5/29/09
|
|
|
|
4/25/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(6)
|
|
|
|
|
|
|
|
|
|
|
498,000
|
|
Kevin H. Tripp
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
126,923
|
|
|
|
253,846
|
|
|
|
507,692
|
|
|
|
7,038
|
|
|
|
14,075
|
|
|
|
28,150
|
|
|
|
|
|
|
|
20,000
|
|
|
|
16.07
|
(3)
|
|
|
99,522
|
|
|
|
|
5/28/09
|
|
|
|
5/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
16.07
|
(4)
|
|
|
99,522
|
|
|
|
|
(1) |
|
Represents range of possible awards under our annual cash
incentive plan. The actual amount of the award earned for fiscal
2010 is presented in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table. The
annual cash incentive plan is described above in the
Compensation Discussion and Analysis. The maximum
amount reflects a payout of 200 percent of the target award. |
|
(2) |
|
Represents performance share units granted under the
Companys LTIP for the fiscal
2010-2012
performance period. The Companys LTIP is described in
Compensation Discussion and Analysis. The maximum
amount reflects a payout of 200 percent of the target award
based on exceeding the maximum performance measures for return
on invested capital. |
|
(3) |
|
Represents options granted under our 2007 Stock Plan. The
options vest with respect to 20 percent of the shares on
the date of grant and an additional 20 percent of the
shares on each of the first, second, third and fourth
anniversaries of the grant date. |
|
(4) |
|
Represents cash-settled SARs granted under our 2007 Stock Plan.
The cash-settled SARs vest with respect to 20 percent of
the SARs on the date of grant and an additional 20 percent
of the SARs on each of the first, second, third and fourth
anniversaries of the grant date. |
|
(5) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with Mr. Herkerts appointment as our
CEO. The award vests at the rate of 25 percent per year,
with vesting dates of May 26, 2010, May 26, 2011, May 26, 2012
and May 26, 2013. Dividends are paid on the restricted stock. |
|
(6) |
|
Represents a restricted stock grant provided for executive
retention purposes under our 2007 Stock Plan. The award vests in
full on May 26, 2011. Dividends are paid on the restricted
stock. |
35
OUTSTANDING
EQUITY AWARDS AT FEBRUARY 27, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock that
|
|
|
|
Unexercised
|
|
|
Options (#)
|
|
|
Option
|
|
|
Option
|
|
|
Held that
|
|
|
have not
|
|
|
|
Options (#)
|
|
|
Unexer-
|
|
|
Exercise
|
|
|
Expiration
|
|
|
have not
|
|
|
Vested(23)
|
|
Name
|
|
Exercisable
|
|
|
cisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
($)
|
|
|
Craig R. Herkert
|
|
|
80,364
|
(1)
|
|
|
321,453
|
(1)
|
|
$
|
15.90
|
|
|
|
5/26/2016
|
|
|
|
314,466
|
(27)
|
|
$
|
4,801,896
|
|
Jeffrey Noddle
|
|
|
71,472
|
(3)
|
|
|
107,206
|
(3)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
60,000
|
(25)
|
|
$
|
916,200
|
|
|
|
|
64,248
|
(4)
|
|
|
42,831
|
(4)
|
|
|
48.64
|
|
|
|
6/1/2014
|
|
|
|
271,040
|
(24)
|
|
|
4,138,781
|
|
|
|
|
196,893
|
(12)
|
|
|
|
|
|
|
30.73
|
|
|
|
5/26/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
233,189
|
(6)
|
|
|
58,297
|
(6)
|
|
|
29.58
|
|
|
|
6/2/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
210,326
|
(14)
|
|
|
|
|
|
|
18.99
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
70,012
|
(21)
|
|
|
|
|
|
|
29.31
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
1,998
|
(15)
|
|
|
|
|
|
|
18.99
|
|
|
|
5/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
(9)
|
|
|
|
|
|
|
32.71
|
|
|
|
6/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
(16)
|
|
|
|
|
|
|
30.08
|
|
|
|
5/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
177,607
|
(21)
|
|
|
|
|
|
|
29.31
|
|
|
|
6/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
110,835
|
(21)
|
|
|
|
|
|
|
33.27
|
|
|
|
6/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(17)
|
|
|
|
|
|
|
19.00
|
|
|
|
6/29/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
102,426
|
(21)
|
|
|
|
|
|
|
33.27
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
1,739,006
|
|
|
|
208,334
|
|
|
|
|
|
|
|
|
|
|
|
331,040
|
|
|
$
|
5,054,981
|
|
David L. Boehnen
|
|
|
6,500
|
(2)
|
|
|
26,000
|
(2)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
30,000
|
(25)
|
|
$
|
458,100
|
|
|
|
|
26,000
|
(3)
|
|
|
39,000
|
(3)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
(5)
|
|
|
24,000
|
(5)
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(13)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
39,241
|
(21)
|
|
|
|
|
|
|
44.47
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(8)
|
|
|
12,000
|
(8)
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,600
|
(21)
|
|
|
|
|
|
|
32.37
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
17,503
|
(21)
|
|
|
|
|
|
|
30.94
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,326
|
(21)
|
|
|
|
|
|
|
29.18
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
7,706
|
(21)
|
|
|
|
|
|
|
44.47
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
26,835
|
(21)
|
|
|
|
|
|
|
44.47
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
11,680
|
(22)
|
|
|
|
|
|
|
38.75
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
26,051
|
(21)
|
|
|
|
|
|
|
30.94
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
43,651
|
(19)
|
|
|
|
|
|
|
30.40
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
2,183
|
(21)
|
|
|
|
|
|
|
28.43
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
320,276
|
|
|
|
101,000
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
$
|
458,100
|
|
Janel S. Haugarth
|
|
|
6,000
|
(2)
|
|
|
24,000
|
(2)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
40,000
|
(26)
|
|
$
|
610,800
|
|
|
|
|
22,000
|
(3)
|
|
|
33,000
|
(3)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(5)
|
|
|
20,000
|
(5)
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
12,619
|
(21)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(13)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(8)
|
|
|
6,000
|
(8)
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
6,703
|
(21)
|
|
|
|
|
|
|
28.83
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
2,265
|
(20)
|
|
|
|
|
|
|
28.83
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
1,832
|
(21)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(7)
|
|
|
|
|
|
|
33.56
|
|
|
|
7/18/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
2,408
|
(21)
|
|
|
|
|
|
|
36.31
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
9,608
|
(21)
|
|
|
|
|
|
|
35.47
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
1,316
|
(20)
|
|
|
|
|
|
|
24.92
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
1,226
|
(21)
|
|
|
|
|
|
|
28.83
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
1,298
|
(20)
|
|
|
|
|
|
|
28.83
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
1,416
|
(20)
|
|
|
|
|
|
|
24.41
|
|
|
|
12/13/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
292
|
(19)
|
|
|
|
|
|
|
24.41
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
2,662
|
(21)
|
|
|
|
|
|
|
28.83
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
5,750
|
(20)
|
|
|
|
|
|
|
24.92
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
185,395
|
|
|
|
83,000
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
$
|
610,800
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock that
|
|
|
|
Unexercised
|
|
|
Options (#)
|
|
|
Option
|
|
|
Option
|
|
|
Held that
|
|
|
have not
|
|
|
|
Options (#)
|
|
|
Unexer-
|
|
|
Exercise
|
|
|
Expiration
|
|
|
have not
|
|
|
Vested(23)
|
|
Name
|
|
Exercisable
|
|
|
cisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
($)
|
|
|
Michael L. Jackson
|
|
|
42,500
|
(2)
|
|
|
|
|
|
$
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
40,000
|
(25)
|
|
$
|
610,800
|
|
|
|
|
85,000
|
(3)
|
|
|
|
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(5)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
(13)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
41,859
|
(21)
|
|
|
|
|
|
|
46.01
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(8)
|
|
|
|
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
28,017
|
(21)
|
|
|
|
|
|
|
32.16
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
16,523
|
(21)
|
|
|
|
|
|
|
46.01
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(9)
|
|
|
|
|
|
|
32.71
|
|
|
|
6/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
39,084
|
(21)
|
|
|
|
|
|
|
46.01
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
15,383
|
(21)
|
|
|
|
|
|
|
32.16
|
|
|
|
6/27/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
1,953
|
(18)
|
|
|
|
|
|
|
32.16
|
|
|
|
6/27/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
4,242
|
(21)
|
|
|
|
|
|
|
34.03
|
|
|
|
6/27/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
6,763
|
(21)
|
|
|
|
|
|
|
32.16
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
4,039
|
(21)
|
|
|
|
|
|
|
34.03
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
598,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
$
|
610,800
|
|
Pamela K. Knous
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,500
|
(2)
|
|
|
34,000
|
(2)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
30,000
|
(25)
|
|
$
|
458,100
|
|
|
|
|
34,000
|
(3)
|
|
|
51,000
|
(3)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
(5)
|
|
|
30,000
|
(5)
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
(13)
|
|
|
|
|
|
|
29.90
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
41,470
|
(21)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
56,000
|
(8)
|
|
|
14,000
|
(8)
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
7,209
|
(21)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,129
|
(21)
|
|
|
|
|
|
|
34.16
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
8,152
|
(21)
|
|
|
|
|
|
|
33.93
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
6,034
|
(21)
|
|
|
|
|
|
|
31.80
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
10,887
|
(21)
|
|
|
|
|
|
|
30.62
|
|
|
|
4/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
46,481
|
(21)
|
|
|
|
|
|
|
46.98
|
|
|
|
4/10/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
70,816
|
(21)
|
|
|
|
|
|
|
30.46
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
425,678
|
|
|
|
129,000
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
$
|
458,100
|
|
David E. Pylipow
|
|
|
4,000
|
(2)
|
|
|
16,000
|
(2)
|
|
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
30,000
|
(26)
|
|
$
|
458,100
|
|
|
|
|
16,000
|
(3)
|
|
|
24,000
|
(3)
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(11)
|
|
|
|
|
|
|
33.34
|
|
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
18,000
|
(5)
|
|
|
12,000
|
(5)
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(8)
|
|
|
5,000
|
(8)
|
|
|
29.18
|
|
|
|
4/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(10)
|
|
|
|
|
|
|
33.46
|
|
|
|
4/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
88,000
|
|
|
|
57,000
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
$
|
458,100
|
|
Kevin H. Tripp
|
|
|
20,000
|
(2)
|
|
|
|
|
|
$
|
16.07
|
|
|
|
5/28/2016
|
|
|
|
|
|
|
$
|
|
|
|
|
|
50,000
|
(3)
|
|
|
|
|
|
|
35.00
|
|
|
|
5/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(5)
|
|
|
|
|
|
|
43.59
|
|
|
|
4/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
(1) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 26,
2009, May 26, 2010, May 26, 2011, May 26, 2012
and May 26, 2013. |
|
(2) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 28,
2009, May 28, 2010, May 28, 2011, May 28, 2012
and May 28, 2013. |
|
(3) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of May 28,
2008, May 28, 2009, May 28, 2010, May 28, 2011
and May 28, 2012. |
|
(4) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of June 1,
2007, June 1, 2008, June 1, 2009, June 1, 2010
and June 1, 2011. |
|
(5) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of April 20,
2007, April 20, 2008, April 20, 2009, April 20,
2010 and April 20, 2011. |
|
(6) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of June 2,
2006, June 2, 2007, June 2, 2008, June 2, 2009
and June 2, 2010. |
37
|
|
|
(7) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of July 18,
2005, July 18, 2006, July 18, 2007, July 18, 2008
and July 18, 2009. |
|
(8) |
|
This non-qualified stock option vests at the rate of
20 percent per year, with vesting dates of April 20,
2006, April 20, 2007, April 20, 2008, April 20,
2009 and April 20, 2010. |
|
(9) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of June 15,
2005, June 15, 2006, June 15, 2007, June 15, 2008
and June 15, 2009. |
|
(10) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of April 6,
2005, April 6, 2006, April 6, 2007, April 6, 2008
and April 6, 2009. |
|
(11) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of December 8,
2004, December 8, 2005, December 8, 2006,
December 8, 2007 and December 8, 2008. |
|
(12) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of May 26,
2004, May 26, 2005, May 26, 2006, May 26, 2007
and May 26, 2008. |
|
(13) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of April 7,
2004, April 7, 2005, April 7, 2006, April 7, 2007
and April 7, 2008. |
|
(14) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of May 29,
2003, May 29, 2004, May 29, 2005, May 29, 2006
and May 29, 2007. |
|
(15) |
|
This incentive stock option vested at the rate of
20 percent per year, with vesting dates of May 29,
2003, May 29, 2004, May 29, 2005, May 29, 2006
and May 29, 2007. |
|
(16) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of May 30,
2002, May 30, 2003, May 30, 2004, May 30, 2005
and May 30, 2006. |
|
(17) |
|
This non-qualified stock option vested at the rate of
20 percent per year, with vesting dates of June 29,
2000, June 29, 2001, June 29, 2002, June 29, 2003
and June 29, 2004. |
|
(18) |
|
Represents a reload stock option granted under the
SUPERVALU/Richfood Stock Incentive Plan upon the exercise and
payment of the exercise price by delivery of previously owned
shares of SUPERVALU common stock. Each reload stock option is
granted for the number of shares tendered as payment for the
exercise price and tax withholding obligation, has a per share
exercise price equal to the fair market value of a share of the
Companys common stock on the date of grant, is exercisable
in full on the date of grant and expires on the same date as the
original option. |
|
(19) |
|
Represents a reload stock option granted under the
1993 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding obligation, has a per share exercise price equal to
the fair market value of a share of the Companys common
stock on the date of grant, is exercisable in full on the date
of grant and expires on the same date as the original option. |
|
(20) |
|
Represents a reload stock option granted under the
1997 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding obligation, has a per share exercise price equal to
the fair market value of a share of the Companys common
stock on the date of grant, is exercisable in full on the date
of grant and expires on the same date as the original option. |
|
(21) |
|
Represents a reload stock option granted under our
2002 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding obligation, has a per share exercise price equal to
the fair market value of a share of the Companys common
stock on the date of grant, is exercisable in full on the date
of grant and expires on the same date as the original option. |
|
(22) |
|
Represents a reload stock option granted under our
2007 Stock Plan upon the exercise and payment of the exercise
price by delivery of previously owned shares of SUPERVALU common
stock. Each reload stock option is granted for the number of
shares tendered as payment for the exercise price and tax
withholding |
38
|
|
|
|
|
obligation, has a per share exercise price equal to the fair
market value of a share of the Companys common stock on
the date of grant, is exercisable in full on the date of grant
and expires on the same date as the original option. |
|
(23) |
|
The amounts shown in this column are calculated using a per
share value of $15.27, the closing market price of a share of
our common stock on February 26, 2010 (the last trading day
preceding the last day of our 2010 fiscal year). |
|
(24) |
|
Represents the unvested portion of restricted stock units
granted to Mr. Noddle for executive retention purposes. As
amended on April 16, 2010, subject to adjustment as set
forth in the award agreement and Mr. Noddles
continued employment, these restricted stock units vest
June 24, 2010. The number of shares that vest will be
reduced if the Companys average stock price for the
90 days immediately preceding such vesting date is lower
than $32.77 (the average of the opening and closing price for
our common stock on the grant date). Any shares that do not vest
on June 24, 2010 will be forfeited. The restricted stock
units do not pay dividends. |
|
(25) |
|
Represents grants of restricted stock units provided for
executive retention purposes under our 1993 and 2002 Stock
Plans. Following vesting, the units are paid out in shares of
SUPERVALU stock upon the later to occur of a specified age of
the executive, one year following retirement or termination or
30 days following death, provided non-competition
provisions of the award agreement are adhered to between the
vesting and payout dates. |
|
(26) |
|
Represents a restricted stock grant provided for executive
retention purposes under our 2007 Stock Plan. The award vests in
full on May 26, 2011. Dividends are paid on the restricted
stock. |
|
(27) |
|
Represents a restricted stock grant awarded under our 2007 Stock
Plan in connection with Mr. Herkerts appointment as
our CEO. The award vests at the rate of 25 percent per
year, with vesting dates of May 26, 2010, May 26,
2011, May 26, 2012 and May 26, 2013. Dividends are
paid on the restricted stock. |
OPTION
EXERCISES AND STOCK VESTED FOR FISCAL 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Value
|
|
|
Number of
|
|
|
Value
|
|
|
|
Shares Acquired on
|
|
|
Realized on
|
|
|
Shares Acquired on
|
|
|
Realized on
|
|
Name
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Vesting (#)
|
|
|
Vesting(2) ($)
|
|
|
Craig R. Herkert
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Noddle
|
|
|
|
|
|
|
|
|
|
|
148,115
|
|
|
|
2,282,170
|
|
David L. Boehnen
|
|
|
|
|
|
|
|
|
|
|
25,267
|
|
|
|
696,198
|
|
Janel S. Haugarth
|
|
|
|
|
|
|
|
|
|
|
10,134
|
|
|
|
154,138
|
|
Michael L. Jackson
|
|
|
|
|
|
|
|
|
|
|
31,413
|
|
|
|
477,792
|
|
Pamela K. Knous
|
|
|
|
|
|
|
|
|
|
|
36,160
|
|
|
|
544,094
|
|
David E. Pylipow
|
|
|
|
|
|
|
|
|
|
|
11,754
|
|
|
|
176,418
|
|
Kevin H. Tripp
|
|
|
|
|
|
|
|
|
|
|
28,965
|
(1)
|
|
|
436,904
|
|
|
|
|
(1) |
|
A portion of these shares represent vesting of restricted stock
units granted prior to the Albertsons merger. |
|
(2) |
|
Amounts reflect the market value of the Companys common
stock on the day the stock vested, determined by multiplying the
number of shares acquired on vesting by the closing sales price
for the Companys common stock on the NYSE on the vesting
date. |
39
PENSION
BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Present
|
|
|
|
|
|
|
|
|
Years
|
|
|
Value of
|
|
|
Payments
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
During
|
|
|
|
|
|
Service
|
|
|
Benefit(3)
|
|
|
Last Fiscal
|
|
Name
|
|
Plan Name(1)
|
|
(#)(2)
|
|
|
($)
|
|
|
Year ($)
|
|
|
Craig R. Herkert
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Noddle(4)
|
|
Qualified Retirement Plan
|
|
|
30
|
|
|
$
|
973,906
|
|
|
$
|
|
|
|
|
SERP
|
|
|
30
|
|
|
|
11,337,123
|
|
|
|
|
|
|
|
EDCP
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Boehnen
|
|
Qualified Retirement Plan
|
|
|
16.75
|
|
|
|
551,701
|
|
|
|
|
|
|
|
SERP
|
|
|
16.75
|
|
|
|
1,398,239
|
|
|
|
|
|
|
|
EDCP
|
|
|
16.75
|
|
|
|
146,062
|
|
|
|
|
|
Janel S. Haugarth
|
|
Qualified Retirement Plan
|
|
|
30
|
|
|
|
669,265
|
|
|
|
|
|
|
|
SERP
|
|
|
30
|
|
|
|
1,601,246
|
|
|
|
|
|
|
|
EDCP
|
|
|
30
|
|
|
|
222,108
|
|
|
|
|
|
Michael L. Jackson(5)
|
|
Qualified Retirement Plan
|
|
|
23.92
|
|
|
|
520,209
|
|
|
|
22,026
|
|
|
|
Excess Benefits Plan
|
|
|
23.92
|
|
|
|
605,371
|
|
|
|
1,955,982
|
|
Pamela K. Knous(6)
|
|
Qualified Retirement Plan
|
|
|
10.33
|
|
|
|
247,888
|
|
|
|
|
|
|
|
Excess Benefits Plan
|
|
|
10.33
|
|
|
|
851,816
|
|
|
|
|
|
|
|
EDCP
|
|
|
|
|
|
|
|
|
|
|
|
|
David E. Pylipow
|
|
Qualified Retirement Plan
|
|
|
9.83
|
|
|
|
177,547
|
|
|
|
|
|
|
|
Excess Benefits Plan
|
|
|
9.83
|
|
|
|
249,495
|
|
|
|
|
|
|
|
EDCP
|
|
|
9.83
|
|
|
|
8,819
|
|
|
|
|
|
Kevin H. Tripp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We maintain the following programs to provide retirement income
to the Named Executive Officers: the SUPERVALU INC. Retirement
Plan (the Qualified Retirement Plan), the SUPERVALU
INC. Nonqualified Supplemental Executive Retirement Plan (the
SERP), the SUPERVALU INC. Excess Benefits Plan (the
Excess Benefits Plan) and the SUPERVALU INC.
Executive Deferred Compensation Plan (the EDCP).
Each of these plans is discussed below. |
|
(2) |
|
The Qualified Retirement Plan caps years of credited service at
30 years. Years of credited service were frozen effective
December 31, 2007. |
|
(3) |
|
The calculation of present value of accumulated benefit assumes:
(a) a measurement date of February 27, 2010;
(b) a discount rate of 6.00 percent; (c) an
assumed retirement at age 62 (earliest unreduced retirement
age); (d) a single life annuity form of payment;
(e) the use of the RP-2000 Combined Healthy Mortality Table
(projected to 2017); and (f) no pre-retirement decrements. |
|
(4) |
|
Mr. Noddle is currently eligible for early retirement under
the Qualified Retirement Plan and the SERP. Mr. Noddle has
elected a lump sum distribution at retirement under the SERP. |
|
(5) |
|
Mr. Jackson retired and elected early retirement under the
Qualified Retirement Plan and the Excess Benefits Plan.
Mr. Jackson elected and received a lump sum distribution at
retirement under the Excess Benefits Plan with a six month delay
for amounts credited to his account after calendar 2004. For
amounts credited prior to calendar 2005, Mr. Jackson has
elected a
10-year
installment. |
|
(6) |
|
Ms. Knous is currently eligible for early retirement under
the Qualified Retirement Plan and Excess Benefits Plan.
Ms. Knous has elected a lump sum distribution at retirement
under the Excess Benefits Plan. |
With respect to current Company employees, Mr. Noddle and
Mr. Boehnen participate in the Qualified Retirement Plan
and the SERP. Ms. Knous, Ms. Haugarth and Mr. Pylipow
participate in the Qualified Retirement Plan and the Excess
Benefits Plan. Mr. Herkert is not eligible to participate
in the Qualified Retirement Plan, the SERP or the Excess
Benefits Plan. The SERP and the Excess Benefits Plan were
designed to restore the loss of qualified retirement plan
benefits due to the Internal Revenue Service limits on
compensation and benefits and, in addition, the SERP was
40
designed to restore the loss of qualified retirement plan
benefits due to a change in the formula required by statute in
1989. In addition, NEOs may also defer compensation under the
EDCP as described in this Proxy Statement.
SUPERVALU
INC. Retirement Plan
To participate in the Qualified Retirement Plan, an employee
must have one year of service with the Company during which
1,000 hours of service were completed and be at least
age 21. Union employees are not covered unless a collective
bargaining agreement provides for coverage in the plan. Accrued
benefits under the Qualified Retirement Plan are one percent of
final average compensation times credited service (not to exceed
30 years) plus 0.4 percent of final average
compensation in excess of covered compensation times credited
years of service (not to exceed 30 years). Final average
compensation is defined as the highest five consecutive complete
plan years of compensation. Elements of compensation include
base pay and bonus pay, less any deferrals under nonqualified
deferred compensation plans. Credited service are years during
which the participant completed at least 1,000 hours of
service. Normal retirement is age 65. Accrued benefits are
available unreduced at age 62 with 10 or more years of
service. Early retirement is available at age 55 with 10 or
more years of service. Early retirement reductions are four
percent per year prior to age 62. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan. However, vesting service will
continue to be counted until separation and compensation will be
recognized under the Qualified Retirement Plan through
December 31, 2012.
There are six optional distribution forms under the Qualified
Retirement Plan: single life annuity, which is payable for the
lifetime of the participant only; 5, 10 and 15 year term
certain annuities, which are payable for the lifetime of the
participant with a guaranteed stream of benefits payable to the
named beneficiary if the participant dies before the end of the
guaranteed term; and 50 percent and 100 percent joint
and survivor annuities, which are payable for the lifetime of
the participant with the applicable percentage of the
participants annuity being paid to the surviving spouse or
surviving joint annuitant for their lifetime. Lump sums are also
available to certain limited participant groups. These
distribution options are elected and payable at early or normal
retirement.
Certain former Albertsons pension plans in which benefit
accruals for all nonunion employees were previously frozen have
been merged into the Qualified Retirement Plan. The frozen
accrued benefits for merged participants are determined under
the formulas in the merged plans, and distributions to such
participants are made under the normal and optional distribution
forms in the Qualified Retirement Plan.
SUPERVALU
INC. Nonqualified Supplemental Executive Retirement
Plan
The SERP was designed to restore the loss of qualified
retirement plan benefits due to statutory limits on benefits and
compensation in such plans and to restore the loss of any
qualified retirement plan benefits due to the change in the
benefit formula in that plan on February 26, 1989.
Participation in this plan is limited to employees who satisfy
the following requirements: (1) born before March 1,
1952; (2) have at least 15 years of credited service;
(3) are a highly compensated employee (as defined under
Section 414(q) of the Code) at separation; and (4) on
February 26, 1989 were actively employed by SUPERVALU and
were participants in the Qualified Retirement Plan. Accrued
benefits are determined as the greater of the current qualified
retirement plan benefit formula compared to the SERP formula of
1.7 percent of final average compensation times credited
service (not to exceed 30 years) minus the sum of
(A) 0.1 percent of final average compensation in
excess of $75,000 times credited service (not to exceed
30 years) and (B) 1/30th of the
participants approximate social security benefit times
credited service (not to exceed 30 years) minus the dollar
amount of the benefit payable from the Qualified Retirement
Plan. Normal retirement is age 65. Accrued benefits are
available unreduced at age 62 with 10 or more years of
service. Early retirement is available at age 55 with 10 or
more years of service. Early retirement reductions are four
percent per year prior to age 62. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan and, indirectly, under the SERP.
However, vesting service will continue to be recognized until
separation and compensation will continue to be recognized under
the Qualified Retirement Plan and, indirectly, under the SERP,
through December 31, 2012.
There are nine basic distribution forms under the SERP: single
life annuity, which is payable for the lifetime of the
participant only; 10 and 15 year term certain and life
annuities, which are payable for the lifetime of the participant
with a guaranteed stream of benefits payable to the named
beneficiary if the participant dies before the
41
end of the guaranteed term; and 50 percent, 67 percent
and 100 percent joint and survivor annuities, which are payable
for the lifetime of the participant with the applicable
percentage of the participants annuity being paid to the
surviving spouse or surviving joint annuitant for their
lifetime; lump sum; and equal annual installments over a five or
ten year period. Participants who do not file timely
distribution elections receive payment in the form of a single
lump sum.
Distribution of benefits occurs at the election of the
participant: (a) within 30 days of separation from
service; (b) during the month of March following separation
from service; (c) during the month of March following the
later of age 55 or separation from service; (d) during
the month of March following the later of age 62 or
separation from service; (e) during the month of March
following the later of age 65 or separation from service;
or (f) within 30 days following the later of a
specific date or separation from service. Participants who do
not file a timely election will receive distribution during the
March following separation from service. If distribution is
being made to a key employee, the portion of the
participants benefit attributable to benefits accrued
after December 31, 2004, will be delayed for six months
following separation from service. A key employee is
any officer of the Company.
SUPERVALU
INC. Excess Benefits Plan
The Excess Benefits Plan was designed solely to restore the loss
of qualified retirement plan benefits due to statutory limits on
benefits and compensation in such plans. Participation in this
plan is limited to employees who satisfy the following
requirements: (1) have a benefit in a qualified plan that
is reduced by statutory limits; (2) are not covered under
the SERP; and (3) are selected for participation by the
Leadership Development and Compensation Committee. Accrued
benefits are the additional amount that would have been paid
from the qualified plan but for the statutory limits. Normal
retirement is age 65. Accrued benefits are available
unreduced at age 62 with 10 or more years of service. Early
retirement is available at age 55 with 10 or more years of
service. Early retirement reductions are four percent per year
prior to age 62. Effective December 31, 2007, credited
service was frozen under the Qualified Retirement Plan and,
indirectly, under the Excess Benefits Plan. However, vesting
service will continue to be recognized until separation and
compensation will continue to be recognized under the Qualified
Retirement Plan and, indirectly, under the Excess Benefits Plan,
through December 31, 2012.
There are seven basic distribution forms under the Excess
Benefits Plan: single life annuity, which is payable for the
lifetime of the participant only; 50 percent,
67 percent and 100 percent joint and survivor
annuities, which are payable for the lifetime of the participant
with the applicable percentage of the participants annuity
being paid to the surviving spouse or surviving joint annuitant
for their lifetime; lump sum; and annual installments over a
five or ten year period. Participants who do not file timely
distribution elections receive payment in the form of a single
lump sum.
Distribution of benefits occurs at the election of the
participant: (a) within 30 days of separation from
service; (b) during the month of March following separation
from service; (c) during the month of March following the
later of age 62 or separation of service; or
(d) during the month of March following the later of
age 65 or separation from service. Participants who do not
file a timely election will receive distribution during the
March following separation from service. If distribution is
being made to a key employee (as defined above), the
portion of the participants benefit attributable to
benefits accrued after December 31, 2004, will be delayed
for six months following separation.
SUPERVALU
INC. Executive Deferred Compensation Plan (Pension
Make-Up
Benefit)
Executives who defer the receipt of pay under the EDCP may have
reduced qualified defined benefit retirement plan benefits and
related non-qualified supplemental retirement benefits. To make
up this loss in defined benefit retirement plan benefits, the
EDCP contains a
make-up
provision to determine and to pay an amount representing the
additional benefit that would have been payable under those
plans if there had been no deferrals under the EDCP. This
make-up
benefit is determined by commuting this additional benefit to a
lump sum that is deposited in the participants EDCP
account at retirement and then distributed during March in the
following plan year as a single payment. For this
make-up
computation, accrued benefits are determined using the Qualified
Retirement Plan benefit formula as if there had been no
reductions in final average pay due to deferrals. Effective
December 31, 2007, credited service was frozen under the
Qualified Retirement Plan and, indirectly, under this
42
make-up
provision of the EDCP. However, additional vesting service
continues to be counted until separation and compensation
continues to be recognized under the Qualified Retirement Plan
and, indirectly, under this
make-up
provision of the EDCP, through December 31, 2012. If a
distribution is to be made to a key employee (as
defined above), the portion of the benefit attributable to
deferral after December 31, 2004, will be delayed for six
months following separation from service.
NONQUALIFIED
DEFERRED COMPENSATION(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Earnings
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
in Last
|
|
|
Withdrawals/
|
|
|
Balance at
|
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
Fiscal
|
|
|
Distributions
|
|
|
Last Fiscal
|
|
Name
|
|
Year ($)(2)
|
|
|
Year ($)(3)
|
|
|
Year ($)(4)
|
|
|
($)
|
|
|
Year End ($)
|
|
|
Craig R. Herkert
|
|
$
|
65,385
|
|
|
$
|
3,269
|
|
|
$
|
319
|
|
|
$
|
|
|
|
$
|
68,973
|
|
Jeffrey Noddle
|
|
|
|
|
|
|
47,610
|
|
|
|
38,211
|
|
|
|
|
|
|
|
754,267
|
|
David L. Boehnen
|
|
|
32,671
|
|
|
|
16,682
|
|
|
|
85,933
|
|
|
|
|
|
|
|
1,534,217
|
|
Janel S. Haugarth
|
|
|
19,939
|
|
|
|
35,476
|
|
|
|
36,340
|
|
|
|
|
|
|
|
642,277
|
|
Michael L. Jackson
|
|
|
78,186
|
|
|
|
822,987
|
|
|
|
172,733
|
|
|
|
|
|
|
|
3,504,623
|
|
Pamela K. Knous
|
|
|
|
|
|
|
22,344
|
|
|
|
2,854
|
|
|
|
|
|
|
|
68,834
|
|
David E. Pylipow
|
|
|
20,666
|
|
|
|
9,012
|
|
|
|
4,012
|
|
|
|
|
|
|
|
85,884
|
|
Kevin H. Tripp
|
|
|
|
|
|
|
|
|
|
|
66,602
|
|
|
|
|
|
|
|
271,326
|
|
|
|
|
(1) |
|
The Company offers eligible participants the opportunity to
participate each year in the current executive nonqualified
deferred compensation plan. Other inactive nonqualified
compensation plans also exist and are governed by the respective
rules which existed while they were active. The amounts credited
for Mr. Jackson are also included in the Summary
Compensation Table. The amounts credited from the registrant and
aggregate earnings are not included in the Summary Compensation
Table. |
|
(2) |
|
Amounts credited in fiscal 2010 include deferrals on base salary
earned during parts of calendar 2009 and calendar 2010. |
|
(3) |
|
Because of limitations on the annual compensation that can be
taken into account under the 401(k) Plan, participants received
an additional discretionary credit from the Company for their
2009 EDCP deferrals and credited this restoration to a
participant account in 2009 as if there were no income
limitations for a Company match or profit sharing contribution
under the 401(k) Plan. |
|
(4) |
|
Earnings for the current and inactive plans are determined based
on a combination of a fixed percentage rate as well as variable
interest rate methodologies based on current account balances. |
SUPERVALU
INC. Executive Deferred Compensation Plan
In addition to the
make-up
feature described previously, the EDCP provides that an eligible
executive can elect to defer between 5 and 50 percent of
base salary and between 5 and 100 percent of annual
incentive compensation. A new deferral election can be made
before the beginning of each calendar year and is effective for
that calendar year as to base salary and for the fiscal year
that begins in that calendar year as to incentive compensation.
The amount deferred for a year is credited to an unfunded
bookkeeping account for that year and that account is credited
from time to time with interest at a rate determined by
reference to Moodys Corporate Average Bond Index for the
year ending in the October preceding the calendar year. With
each deferral election, the employee also makes an election of
(i) whether the account for that year will be distributed
in a lump sum or in 5, 10 or 15 annual installments and
(ii) the time when distribution of that years account
will be paid in a lump sum or commenced in installments (either
a specified date or upon separation from service). SUPERVALU
may, in its discretion, credit additional amounts to a
participants account. If distribution is to be made to a
key employee (as defined above), the portion of the
benefit attributable to deferral after December 31, 2004,
will be delayed for six months following separation from
service. Subject to limited exceptions, all amounts are 100
percent nonforfeitable at all times.
43
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The tables below reflect the amount of compensation that would
be paid to each of the NEOs in the event of termination of such
executives employment under several different
circumstances. The amounts shown assume that such termination
was effective as of the last day of the last completed fiscal
year, and thus includes amounts earned through such time and are
estimates of the amounts that would be paid out to the
executives upon their termination. The actual amounts to be paid
out can only be determined at the time of such executives
separation from SUPERVALU. For a description of the severance
benefits paid or accrued to Messrs. Jackson and Tripp
during fiscal 2010, see footnote 6(b) to the Summary
Compensation Table.
Potential
Payments and Benefits upon Termination Absent a Change of
Control
The first column of the table below sets forth the payments to
which each NEO, excluding Messrs. Jackson and Tripp, would
be entitled, other than accrued but unpaid base salary and any
benefits payable or provided under broad-based employee benefit
plans and programs, in the event of a qualified retirement or
due to long-term disability. The second column of the table
reflects payments that would be due in the event of the
NEOs termination of employment due to death prior to a
change of control of SUPERVALU. In any of these events, we are
not obligated to provide any special severance payments, health
or welfare benefits or tax
gross-ups to
the NEO. Mr. Noddle, Mr. Boehnen and Ms. Knous
meet the age and service requirements for retirement and,
therefore, accelerated vesting of equity awards would occur upon
death, disability or retirement. Mr. Herkert,
Ms. Haugarth and Mr. Pylipow do not meet the requirements
for retirement and, therefore, accelerated vesting of equity
awards would not occur upon death, disability or retirement.
The third column of the table below sets for the lump sum
payment to which each NEO would be entitled in the event they
are involuntarily terminated without cause, subject to certain
exclusions, pursuant to the Executive & Officer
Severance Pay Plan, which are described under Compensation
Discussion and Analysis Executive Severance
Plan. The lump sum cash payment is equal to a multiple of
the NEOs annual base salary and the average of the
performance results (expressed as a percentage) used to
determine the NEOs bonus amounts under the annual bonus
plan for the preceding three years (or all bonus amounts if the
NEO has been employed fewer than three years), multiplied by the
NEOs current target bonus amount, as well as an
uninterrupted bonus cycle payment. The severance multiple is two
times for the CEO and 1.5 times for other NEOs. The NEOs are
also entitled to reimbursement for COBRA coverage for medical
and dental insurance. Additionally, an NEO must repay severance
benefits received pursuant to the Executive & Officer
Severance Pay Plan if the Company wishes to rehire them in any
capacity within six months of the termination date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Without
|
|
Name
|
|
Retirement/Disability
|
|
|
Death
|
|
|
Cause(1)
|
|
|
Craig R. Herkert
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,798,739
|
|
Jeffrey Noddle
|
|
|
0
|
|
|
|
1,598,639
|
|
|
|
5,479,367
|
|
David L. Boehnen
|
|
|
0
|
|
|
|
782,390
|
|
|
|
1,793,096
|
|
Janel S. Haugarth
|
|
|
610,800
|
|
|
|
1,340,956
|
|
|
|
1,540,490
|
|
Pamela K. Knous
|
|
|
0
|
|
|
|
928,851
|
|
|
|
1,842,474
|
|
David E. Pylipow
|
|
|
458,100
|
|
|
|
1,035,068
|
|
|
|
1,139,968
|
|
|
|
|
(1) |
|
These amounts exclude reimbursements for COBRA. |
Long term disability payments would be provided to the NEOs on a
monthly basis for a term that varies based on individual
circumstances, while a life insurance payout would be made as a
single cash payment to the beneficiary.
44
Potential
Payments and Benefits upon Termination Following, or in
Connection with, a Change of Control
SUPERVALU
Change of Control Agreements
We have entered into change of control agreements with certain
of our executives and other employees, including all of the NEOs.
In 2009, we conducted a review of our change of control
agreements and made several changes to the plan provisions to
better reflect current market practices. In general, these
agreements entitle the NEOs to receive a lump sum cash payment
if the executives employment is terminated (other than for
cause or disability, as defined in the agreements) within two
years after or in anticipation of a change of control (as
defined in the agreements). See Compensation Discussion
and Analysis- Executive Change of Control Policy for
additional details.
The lump sum cash payment is equal to a multiple of the
NEOs annual base salary, target bonus, and an interrupted
bonus cycle payment. The severance multiple is three times for
the CEO, one times for the Executive Chairman, and two times for
the other NEOs. The NEO would also be entitled to continued
family medical, dental and life insurance coverage until the
earlier of the end of the separation period or the commencement
of comparable coverage with a subsequent employer. If so
requested, outplacement services shall be provided by a
professional outplacement provider at a cost to the Company of
not more than $25,000. Each agreement includes a covenant not to
compete with SUPERVALU.
A change of control generally includes the occurrence of any of
the following events or circumstances:
|
|
|
|
|
the acquisition of 20 percent or more of the outstanding
shares of SUPERVALU or the voting power of the outstanding
voting securities of SUPERVALU, other than any acquisition from
or by SUPERVALU or any SUPERVALU-sponsored employee benefit plan;
|
|
|
|
consummation of a merger or other business combination of
SUPERVALU or sale of substantially all of the assets of
SUPERVALU, unless following such transaction SUPERVALUs
historic shareholders retain at least 60 percent ownership
of the surviving entity;
|
|
|
|
a change in our Boards composition within any
24-month
period such that a majority of the Boards members does not
include those who were members at the date of the beginning of
the employment period; or
|
|
|
|
a determination by a majority of our Board that a change of
control has occurred.
|
Cause generally means the willful and continued failure of the
officer to substantially perform his or her duties, the
conviction of a felony, the willful engaging in gross misconduct
that is materially and demonstrably injurious to SUPERVALU or
personal dishonesty that results in substantial personal
enrichment. Good reason generally means the annual base salary
or highest annual bonus are reduced, the duties and
responsibilities or the program of incentive compensation are
materially and adversely diminished, the forced relocation of
more than 45 miles or the significant increase in travel
obligations, the failure to provide for the assumption of the
agreement by any successor entity.
SUPERVALU
Equity Compensation Plans
Several of our compensation and benefit plans contain provisions
for enhanced benefits upon a change of control of SUPERVALU.
These enhanced benefits include immediate vesting of stock
options, performance stock units, restricted stock and
restricted stock unit awards upon a change of control, or in the
case of such equity awards granted after May 2010, if employment
terminates under specified circumstances within two years of a
change of control. The NEOs and other executive officers also
hold limited SARs, granted in tandem with stock options that
would become immediately exercisable upon a change of control,
and allow the executive to receive cash for the bargain element
in the related stock option. Under our executive deferred
compensation plans, benefits payable upon termination may be
increased by 30 percent to compensate the NEO for any
excise tax liability incurred following a change of control. Our
retirement plans provide for full vesting if employment
terminates under specified circumstances within two years
following a change of control. Additionally, the Qualified
Retirement
45
Plan provides that if it is terminated within five years
following a change of control, any excess plan assets will not
revert to the Company and will be used for the benefit of
certain plan participants.
We may set aside funds in an irrevocable grantor trust to
satisfy our obligations arising from certain of our benefit
plans. Funds will be set aside in the trust automatically upon a
change of control. The trust assets would remain subject to the
claims of our creditors.
POTENTIAL
PAYMENTS TABLE
The table below sets forth the amounts each NEO, excluding
Messrs. Jackson and Tripp, would be entitled to receive,
other than accrued but unpaid base salary and any benefits
payable or provided under broad-based employee benefit plans and
programs, in the event of a termination of their employment by
SUPERVALU, without cause or by the NEO, for good reason
following or in anticipation of a change in control of
SUPERVALU. These amounts do not include pension benefits
described in the Pension Benefits Table and the other retirement
benefits described following the Pension Benefits Table.
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|
|
|
|
|
Craig R.
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|
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Jeffrey
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|
|
David L.
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|
|
Janel S.
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|
|
Pamela K.
|
|
|
David E.
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|
|
|
Herkert
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|
|
Noddle
|
|
|
Boehnen
|
|
|
Haugarth
|
|
|
Knous
|
|
|
Pylipow
|
|
|
Base salary
|
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$
|
2,550,000
|
|
|
$
|
1,141,885
|
|
|
$
|
1,117,700
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|
|
$
|
1,043,080
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|
|
$
|
1,326,930
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|
|
$
|
824,240
|
|
Bonus
|
|
|
3,825,000
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|
|
|
1,712,828
|
|
|
|
2,235,401
|
|
|
|
2,086,161
|
|
|
|
2,653,860
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|
|
|
1,648,480
|
|
Interrupted Bonus Cycle
|
|
|
1,275,000
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|
|
|
1,712,828
|
|
|
|
558,850
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|
|
|
521,540
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|
|
|
663,465
|
|
|
|
412,120
|
|
Accelerated vesting of equity awards(1)
|
|
|
640,256
|
|
|
|
4,455,195
|
|
|
|
85,258
|
|
|
|
680,574
|
|
|
|
119,508
|
|
|
|
514,212
|
|
Health and Welfare benefits
|
|
|
40,033
|
|
|
|
362,673
|
|
|
|
76,974
|
|
|
|
157,266
|
|
|
|
158,351
|
|
|
|
79,406
|
|
Outplacement services
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
25,000
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
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$
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8,355,289
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|
|
$
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9,410,409
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|
|
$
|
4,099,183
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|
|
$
|
4,513,621
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|
|
$
|
4,947,114
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|
|
$
|
3,503,458
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|
|
|
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(1) |
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The stock option value is calculated by multiplying the number
of unvested shares by the difference between the grant price and
the closing stock price on February 26, 2010 ($15.27), the
last trading day before our 2010 fiscal year end. |
46
REPORT OF
THE AUDIT COMMITTEE
All of the members of the Audit Committee are independent
directors under the New York Stock Exchange listing standards.
In addition, the Board has determined that all members of the
Audit Committee are financially literate under the New York
Stock Exchange listing standards and that Mr. Cohen
qualifies as an audit committee financial expert
under the rules of the SEC.
The Audit Committee operates under a written charter adopted by
the Board of Directors, which is evaluated annually. The charter
of the Audit Committee is available on SUPERVALUs website
at
http://www.supervalu.com. Click
on the tab Site Map and then the caption
Corporate Governance under the heading About
Us. The Audit Committee selects, evaluates and, where
deemed appropriate, replaces SUPERVALUs independent
registered public accountants. The Audit Committee also
pre-approves all audit services, engagement fees and terms, and
all permitted non-audit engagements, except for certain
de minimus amounts.
Management is responsible for SUPERVALUs internal controls
and the financial reporting process. SUPERVALUs
independent registered public accountants are responsible for
performing an audit of SUPERVALUs consolidated financial
statements and the effectiveness of internal control over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States). The
Audit Committees responsibility is to monitor and oversee
these processes.
In this context, the Audit Committee has reviewed
SUPERVALUs audited financial statements for fiscal 2010
and has met and held discussions with management and KPMG LLP,
the independent registered public accountants. Management
represented to the Audit Committee that SUPERVALUs
consolidated financial statements for fiscal 2010 were prepared
in accordance with accounting principles generally accepted in
the United States of America, and the Audit Committee discussed
the consolidated financial statements with KPMG. The Audit
Committee also discussed with KPMG the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended (AICPA, Professional Standards, Vol. 1, AU
section 380) as adopted by the Public Accounting
Oversight Board in Rule 3200T.
The Audit Committee received the written disclosures and letter
from KPMG required by the applicable requirements of the Public
Company Accounting Oversight Board regarding KPMGs
communications with the Audit Committee concerning its
independence, and the Audit Committee discussed with KPMG the
accounting firms independence.
Based upon the Audit Committees discussions with
management and KPMG and the Audit Committees review of the
representation of management and the report of KPMG to the Audit
Committee, the Audit Committee recommended to the Board of
Directors that the audited consolidated financial statements be
included in SUPERVALUs Annual Report on
Form 10-K
for the fiscal year ended February 27, 2010, filed with the
SEC.
The Audit Committee also considered whether non-audit services
provided by KPMG during fiscal 2010 were compatible with
maintaining their independence and concluded that such non-audit
services did not affect their independence.
Respectfully submitted,
Garnett L. Keith, Jr., Chairperson
Irwin S. Cohen
Steven S. Rogers
Kathi P. Seifert
47
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS FEES
The Audit Committee has a formal policy concerning the approval
of audit and non-audit services to be provided by
SUPERVALUs independent registered public accountants. A
copy of this policy can be found in the Audit Committees
charter which is available on SUPERVALUs website at
http://www.supervalu.com.
Click on the tab Site Map and then the caption
Corporate Governance under the heading About
Us. The policy requires that the Audit Committee
pre-approve all audit services, engagement fees and terms and
all permitted non-audit engagements, subject to the
de minimus exceptions permitted pursuant to the Securities
Exchange Act of 1934, as amended (the Exchange Act).
The Chairperson of the Audit Committee is authorized to grant
such pre-approvals in the event there is a need for such
approvals prior to the next full Audit Committee meeting,
provided all such pre-approvals are then reported to the full
Audit Committee at its next scheduled meeting.
During fiscal 2010 and 2009, KPMG provided various audit,
audit-related and tax services to SUPERVALU. The Audit Committee
pre-approved all audit services, audit-related services and tax
services provided by KPMG in fiscal 2010 and 2009. The following
table presents fees for professional services charged by KPMG to
SUPERVALU by type and amount for fiscal 2010 and 2009.
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2010(3)
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|
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2009(4)
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($ in thousands)
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Audit fees
|
|
$
|
3,418
|
|
|
$
|
5,232
|
|
Audit-related fees(1)
|
|
|
621
|
|
|
|
3,719
|
|
|
|
|
|
|
|
|
|
|
Total audit and audit related fees
|
|
|
4,039
|
|
|
|
8,951
|
|
Tax fees(2)
|
|
|
|
|
|
|
14
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
4,039
|
|
|
$
|
8,965
|
|
|
|
|
(1) |
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Audit-related fees consist principally of fees for audits of
financial statements of certain employee benefit plans and
audits of the financial statements of certain businesses and
subsidiaries. |
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(2) |
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Tax fees consist of fees for tax consultation services. |
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(3) |
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Fees for 2010 are estimates. |
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(4) |
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Fees for 2009 reflect final amounts billed. |
PROPOSAL TO
RATIFY THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
(ITEM 2)
The Audit Committee of our Board of Directors has appointed KPMG
LLP as our independent registered public accountants for the
fiscal year ending February 26, 2011. Stockholder
ratification of the appointment of KPMG as our independent
registered public accountants is not required by our bylaws or
otherwise. However, the Board of Directors is submitting the
appointment of KPMG to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to
ratify the appointment, the Audit Committee will reconsider
whether or not to retain that firm. Even if the appointment is
ratified, the Audit Committee, which is solely responsible for
appointing and terminating our independent registered public
accountants, may in its discretion, direct the appointment of
different independent registered public accountants at any time
during the year if it determines that such a change would be in
the best interests of SUPERVALU and its stockholders.
A representative of KPMG will be present at the Annual Meeting
with the opportunity to make a statement and to respond to
questions.
The Board of Directors recommends a vote FOR the
proposal to ratify the appointment of KPMG LLP as independent
registered public accountants.
48
MANAGEMENT
PROPOSAL TO CONDUCT A TRIENNIAL ADVISORY VOTE ON
EXECUTIVE COMPENSATION (ITEM 3)
The Board of Directors of the Company is providing SUPERVALU
stockholders with the opportunity to advise the Board as to
whether SUPERVALU should conduct an advisory vote with respect
to its executive compensation policies and procedures at every
third annual meeting of stockholders, beginning with
SUPERVALUs 2011 Annual Meeting of Stockholders. If this
proposal is approved, SUPERVALU stockholders would vote at every
third SUPERVALU annual meeting of stockholders on the
compensation policies and procedures as described in the
Compensation Discussion and Analysis section of the
proxy statement for that meeting. The triennial advisory vote
would be non-binding, but the Board and the Leadership
Development and Compensation Committee (the Compensation
Committee) would take into account the outcome of the vote
when making future decisions about the Companys executive
compensation policies and procedures.
SUPERVALUs compensation program is designed and
administered by the Compensation Committee of the Board, which
is composed entirely of independent directors and carefully
considers many different factors, as described in the
Compensation Discussion and Analysis, in order to provide
appropriate compensation for our executives. Our executive
compensation program is intended to attract, motivate and reward
the executive talent required to achieve our corporate
objectives and increase stockholder value.
The Compensation Committee has designed our compensation program
to be competitive with the compensation offered by those peers
with whom we compete for executive talent. Targets for base
salaries, annual cash incentive and long-term incentive awards
for executives are based on competitive data. The fact that a
large proportion of our executive officers total
compensation is performance-based is intended to align their
interests with those of our stockholders and place more of their
compensation at risk and emphasize a long-term strategic view.
The Compensation Committee deliberately designs compensation
objectives in order to allocate a significant percentage of each
of our NEOs compensation to performance-based measures.
While the Board of Directors believes that the Compensation
Committee and the Board of Director are in the best position to
determine executive compensation, the Board appreciates and
values stockholders views and supports managements
proposal for a triennial advisory vote on executive
compensation. The ability of stockholders to provide an advisory
vote on executive compensation has been the subject of proposed
legislation in the United States Congress, as well as
stockholder proposals and management initiatives at a number of
publicly-held companies. A stockholder proposal in favor of
implementing Say on Pay was presented at our 2009 Annual Meeting
of Stockholders and was approved by a narrow margin. The Board
has continued to review the evolution of Say on Pay over the
past year and has carefully studied the alternatives to
determine the approach that will best serve the Company and our
stockholders. The Board has determined that a three-year
advisory vote on executive compensation is the best approach for
SUPERVALU based on a number of considerations, including the
following:
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Our compensation program is designed to induce and reward
performance over a multi-year period. As discussed in the
Compensation Discussion and Analysis, beginning with fiscal
2010, the Compensation Committee changed the design of its
performance share program from a two-year performance cycle to a
three-year performance cycle. The Board has concluded that Say
on Pay votes should occur over a similar timeframe;
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A three-year cycle will provide investors sufficient time to
evaluate the effectiveness of our short- and long-term
compensation strategies and the related business outcome of the
Company;
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Many large stockholders rely on proxy advisory firms, which
evaluate the compensation programs of over 12,000 public
companies, for vote recommendations. We believe holding Say on
Pay votes every three years, rather than annually, helps proxy
advisory firms provide more detailed and thorough analyses and
recommendations;
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A three-year vote cycle gives the Board and the Compensation
Committee sufficient time to thoughtfully respond to
stockholders sentiments and to implement any necessary
changes to our executive compensation policies and procedures;
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49
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Rules of the New York Stock Exchange require the Company to seek
stockholder approval for new employee equity compensation plans
and material revisions thereto. This requirement provides our
stockholders with the opportunity to provide additional feedback
on important matters involving executive compensation even in
years when Say on Pay votes do not occur; and
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The Board will continue to engage with our stockholders on
executive compensation during the period between stockholder
votes. As discussed under Other Information
Communications with the Board of Directors, the Company
provides stockholders an opportunity to communicate directly
with the Board of Directors, including on issues of executive
compensation.
|
The Board of Directors is making this recommendation on its own
initiative, while recognizing that Say on Pay proposals continue
to be under consideration in the United States Congress.
SUPERVALU will of course comply with any requirements that
emerge either through federal or state legislation or through
regulatory changes adopted by the SEC, and any such requirements
will supersede this proposal to the extent they are inconsistent.
For the foregoing reasons, the Board of Directors recommends
a vote FOR the proposal to conduct a triennial
advisory vote on executive compensation beginning with the 2011
Annual Meeting of Stockholders.
50
OTHER
INFORMATION
SUPERVALU
Mailing Address
The mailing address of our principal executive offices is:
SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota
55440.
Stockholder
Proposals for the 2011 Annual Meeting
In accordance with rules of the SEC, all proposals of
stockholders that are requested to be included in
SUPERVALUs Proxy Statement for the 2011 Annual Meeting of
Stockholders must be received by the Corporate Secretary on or
before January 14, 2011, 120 days before the one-year
anniversary of the mailing date. In accordance with our bylaws,
any other stockholder proposals to be presented at the 2011
Annual Meeting must be given in writing to the Corporate
Secretary and received at our principal executive offices no
later than the close of business on February 24, 2011 and
no earlier than January 25, 2011. The proposal must contain
specific information required by our bylaws, a copy of which is
available on SUPERVALUs website at
http://www.supervalu.com. Click
on the tab Site Map and then the caption
Corporate Governance under the heading About
Us.
Communications
with the Board of Directors
Any interested parties who desire to communicate with the Board
of Directors, the non-employee members of the Board of Directors
or any individual member of the Board of Directors may do so by
sending a letter addressed to the director or directors in care
of the Corporate Secretary at the mailing address above. All
such correspondence will be forwarded to the appropriate
director or directors.
Code of
Ethics
SUPERVALU has adopted a Code of Ethics that applies to its
principal executive officer, principal financial officer,
principal accounting officer and controller, or persons
performing similar functions, and all other employees and
non-employee directors. The Code of Ethics is available on
SUPERVALUs website at
http://www.supervalu.com.
Click on the tab Site Map and then the caption
Corporate Governance under the heading About
Us. Copies of the Code of Ethics are also available to any
stockholder who submits a request to the Corporate Secretary at
the mailing address above.
Expenses
of Solicitation
This solicitation of proxies is being made by SUPERVALU and we
will pay the costs of such solicitation. We arrange with
brokerage houses, custodians, nominees and other fiduciaries to
send proxy materials to their principals and we reimburse them
for their expenses in this regard. In addition to solicitation
by mail, proxies may be solicited by our employees, by telephone
or personally. No additional compensation will be paid for such
employee solicitation. We also have retained Innisfree M&A
Incorporated to assist in the solicitation of proxies for an
estimated fee of $10,000 plus
out-of-pocket
expenses.
Section 16(a)
Beneficial Ownership Reporting Compliance
The rules of the SEC require our directors, executive officers
and holders of more than 10 percent of our common stock to
file reports of stock ownership and changes in ownership with
the SEC. Based on the Section 16 reports filed by our
directors and executive officers and written representations of
our directors and executive officers we believe there were no
late or inaccurate filings for transactions occurring during
fiscal 2010.
Householding
Only one copy of each of our Annual Report to Stockholders and
this Proxy Statement have been sent to multiple stockholders who
share the same address and last name, unless we have received
contrary instructions from one or more of those stockholders.
This procedure is referred to as householding. We
have been notified that certain intermediaries (brokers or
banks) will also household proxy materials. We will deliver
promptly, upon oral
51
or written request, separate copies of the Annual Report and
Proxy Statement to any stockholder at the same address. If you
wish to receive separate copies of one or both of these
documents, or if you do not wish to participate in householding
in the future, you may write to our Corporate Secretary at
SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota
55440, or call
(952) 828-4000.
You may contact your broker or bank to make a similar request.
Stockholders sharing an address who now receive multiple copies
of our Annual Report and Proxy Statement may request delivery of
a single copy of each document by writing or calling us at the
address or telephone number above or by contacting their broker
or bank (provided the broker or bank has determined to household
proxy materials).
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholders Meeting to be Held on June 24, 2010
Our Notice of Annual Meeting, Proxy Statement and Annual
Report are available on SUPERVALUs website at
http://materials.proxyvote.com/868536
Requests
for Copies of Annual Report
SUPERVALU will furnish to stockholders, without charge, a
copy of its Annual Report on
Form 10-K
for the fiscal year ended February 27, 2010, as filed with
the SEC upon receipt of a written request addressed to our
Corporate Secretary at SUPERVALU INC., P.O. Box 990,
Minneapolis, Minnesota 55440.
Owners of Shares Held in Street
Name: Check the information provided to you in
the proxy materials mailed to you by your bank or broker.
52
SUPERVALU
INC.
June 24,
2010 Annual Meeting of Stockholders
Westin Edina Galleria
3201 Galleria
Edina, MN 55435
The Annual Meeting will begin at 9:00 a.m., local time, at
the Westin Edina Galleria
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AN ADMISSION TICKET
IS REQUIRED
SUPERVALU INC.
Annual Meeting of
Stockholders
June 24, 2010 at 9:00 a.m.
Please bring a current
brokerage
statement, letter from your
stockbroker or other proof of stock
ownership to the meeting.
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SUPERVALU INC.
11840 VALLEY VIEW ROAD
EDEN PRAIRIE, MN 55344
VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 p.m. Eastern Time on June 23, 2010. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an electronic voting
instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can
consent to receiving all future proxy statements, proxy cards and annual reports electronically via
e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to
vote using the Internet and, when prompted, indicate that you agree to receive or access proxy
materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time
on June 23, 2010. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or
return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M24460-P88095-Z51513 |
KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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SUPERVALU INC. |
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The
Board of Directors recommends you vote FOR the following proposals:
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1. ELECTION OF DIRECTORS |
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For |
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Against |
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Abstain |
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Nominees: |
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1a. |
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Donald R. Chappel |
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Abstain |
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1b. |
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Irwin S. Cohen |
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4. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF. |
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1c. |
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Ronald E. Daly |
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1d. |
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Susan E. Engel |
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1e. |
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Craig R. Herkert |
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1f. |
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Charles M. Lillis |
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1g. |
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Steven S. Rogers |
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1h. |
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Matthew E. Rubell |
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1i. |
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Wayne C. Sales |
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1j. |
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Kathi P. Seifert |
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2. RATIFICATION OF APPOINTMENT OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
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3. TO CONSIDER AND VOTE ON A MANAGEMENT PROPOSAL TO CONDUCT A TRIENNIAL ADVISORY VOTE ON
EXECUTION COMPENSATION AS DESCRIBED IN THE ATTACHED PROXY STATEMENT.
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Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney,
executor, administrator or other fiduciary,
please give full title as such. Joint owners
should each sign personally. All holders
must sign. If a corporation or partnership,
please sign in full corporate or partnership
name, by authorized officer. |
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For address changes and/or comments, please check this box and write them on the back where
indicated.
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Please indicate if you plan to attend this meeting. |
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Yes |
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No |
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
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Date |
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ANNUAL MEETING OF STOCKHOLDERS
June 24, 2010 9:00 a.m.
Westin Edina Galleria
3201 Galleria
Edina, Minnesota 55435
AN ADMISSION TICKET IS REQUIRED
Please bring a current brokerage statement, letter from your stockbroker or other
proof of stock ownership to the meeting.
Refreshments will be available before the Meeting.
This Proxy is solicited on behalf of the Board of Directors of the Company
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
This Proxy is solicited on behalf of the Board of Directors of the Company.
As the stockholder named on this card, you hereby appoint David L. Boehnen and Rachel V.
Friedenberg, and each of them, as your proxy, with power of substitution, to vote the shares of
SUPERVALU common stock at the Annual Meeting as directed below. These proxies may also vote, in
their discretion, upon all other matters that may properly come before the Annual Meeting, or any
adjournment or adjournments thereof. The shares will be voted as if you were personally present at
the Annual Meeting. All former proxies are revoked. If not otherwise specified, the shares will be
voted as recommended by the Directors.
Voting Instructions - You may vote by mail, telephone or Internet. Please follow the instructions on the reverse side of this card.
SUPERVALU Employees - If you are a current or former employee of SUPERVALU and own shares of SUPERVALU common stock through a SUPERVALU employee benefit plan, the share ownership as of April 27, 2010 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 unless contrary to applicable
law. The voting deadline for participants in SUPERVALU employee benefit plan is [ time, date].
Householding - If you share the same address and last name as other SUPERVALU stockholders, only one copy of SUPERVALUs Annual Report and Proxy Statement has been mailed to your address. Proxy cards for each SUPERVALU stockholder residing at your address have been mailed under separate cover.
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Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse
side.)
Continued and to be signed on reverse side