Exhibit 10.5
SUPERVALU INC.
FISCAL 2009-2010 LONG-TERM
INCENTIVE PROGRAM
UNDER THE 2007 STOCK
PLAN
PERFORMANCE STOCK UNIT
AWARD
TERMS AND CONDITIONS
(CASH-SETTLED UNITS)
These Performance Stock Unit Award
Terms and Conditions (“Terms and Conditions”) apply to
the Award of Performance Stock Units granted pursuant to Fiscal
2009-2010 Long-Term Incentive Program under the 2007 Stock Plan
(the “Plan”), pursuant to the Performance Stock Unit
Award Agreement to which this document is attached. Capitalized
terms that are used in this document, but are not defined, shall
have the meanings ascribed to them in the Plan or the accompanying
Performance Stock Unit Award Agreement.
1. Award of Performance Stock
Units. SUPERVALU INC.
(the “Company”) hereby grants to you an Award of
Performance Stock Units for the number of Performance Stock Units
set forth in the attached Agreement. The Award is effective as of
the Grant Date. Each Performance Stock Unit represents the right to
receive one Cash-Settled Unit, subject to the Terms and Conditions.
Each Cash-Settled Unit shall represent the right to receive cash in
the amount equal to the Fair Market Value of one share of the
Company’s Common Stock, $1.00 par value (the “Common
Stock”). A Cash-Settled Unit will be deemed to be a
Restricted Stock Unit under the terms of the Plan.
2. Rights with Respect to the
Performance Stock Units and the Cash-Settled Units.
The Performance Stock Units granted
pursuant to the attached Agreement and the Cash-Settled Units
described in the Terms and Conditions do not and shall not give you
any of the rights and privileges of a holder of Common Stock. Your
rights with respect to the Performance Stock Units shall remain
forfeitable at all times prior to the date on which such rights
become earned and your rights with respect to the Cash-Settled
Units shall remain forfeitable at all times prior to the date on
which such rights vest and the restrictions with respect to the
Cash-Settled Units lapse in accordance with Section 3 or
Section 4 hereof.
3. Earning of Performance Stock
Units; Vesting of Cash-Settled Units; Change of
Control.
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a)
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The number of
the Performance Stock Units that you earn shall be determined in
April 2010 by the Committee administering the Plan as more
particularly described in Exhibit A to the attached
Agreement or as otherwise expressly provided in the Terms and
Conditions. Upon earning the Performance Stock Units, you shall
receive the number of Cash-Settled Units equal to the number of
Performance Stock Units that you earn, as more particularly
indicated in the books of the Company.
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b)
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All of the
Cash-Settled Units that you receive in accordance with
Section 3(a) shall vest in full and the restrictions on such
Cash-Settled Units shall lapse on March 2, 2011 if you remain
continuously employed by the Company or any of its Affiliates until
March 2, 2011, subject to the Terms and Conditions. Any
Cash-Settled Units that do not vest on March 2, 2011 shall be
immediately and irrevocably forfeited. The Committee administering
the Plan shall have the authority to make any determination
regarding questions arising from the application of the provisions
of this Section 3(b), which determination shall be final,
conclusive and binding on you and the Company.
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c)
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Notwithstanding
the provisions of this Section 3, but subject to the other
Terms and Conditions, upon the occurrence of a Change of Control
(as defined below) on or prior to the last day of the 2010 fiscal
year of the Company, you shall immediately and unconditionally earn
all of the Performance Stock Units and shall immediately and
unconditionally become fully vested in all of the Cash-Settled
Units so earned and the restrictions on such Cash-Settled Units
shall lapse if you have been continuously employed by the Company
or any of its Affiliates until the date of such Change of Control.
If the Change of Control occurs during the 2011 fiscal year of the
Company, you shall immediately and unconditionally become fully
vested in all of the Cash-Settled Units that you received and the
restrictions on such Cash-Settled Units shall lapse if you have
been continuously employed by the Company or any of its Affiliates
until the date of such Change of Control. For purposes of hereof,
the term “Change of Control” means any of the following
events:
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i)
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The acquisition
by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of twenty percent (20%) or more of either
(A) the then outstanding shares of Common Stock or
(B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors; provided, however, that for purposes of this
subsection (i), the following share acquisitions shall not
constitute a Change of Control: (I) any acquisition directly
from the Company or (II) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or
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ii)
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The
consummation of any merger or other business combination of the
Company, the sale or lease of all or substantially all the
Company’s assets or any combination of the foregoing
transactions (each a “Transaction”) other than a
Transaction immediately following which the stockholders of the
Company and any trustee or fiduciary of any Company employee
benefit plan immediately prior to the Transaction own at least
sixty percent (60%) of the voting power, directly or
indirectly, of (A) the surviving corporation in any such
merger or other business combination, (B) the purchaser or
lessee of the Company’s assets, or (C) both the
surviving corporation and the purchaser or lessee in the event of
any combination of Transactions; or
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iii)
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Within any
24-month period, the persons who were directors immediately before
the beginning of such period (the “Incumbent
Directors”) shall cease (for any reason other than death) to
constitute at least a majority of the Board of Directors of the
Company or the board of directors of a successor to the Company.
For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board of Directors of
the Company by, or on the recommendation of or with the approval
of, at least three-fourths of the directors who then qualified as
Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change of Control
or engage in a proxy or other control contest); or
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iv)
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Such other
event or transaction as the Board of Directors of the Company shall
determine constitutes a Change of Control.
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4. Forfeiture.
If you cease to be an employee of
the Company or any of its Affiliates prior to the earning of the
Performance Stock Units or the vesting of the Cash-Settled Units
pursuant to Section 3 hereof for any reason, then your rights
to all of the Performance Stock Units or the Cash-Settled Units, as
applicable, shall be immediately and irrevocably forfeited.
However, the Committee administering the Plan may determine to
accelerate the earning of the Performance Stock Units or the
vesting of the Cash-Settled Units if you cease to be an employee of
the Company or any of its Affiliates prior to the earning of the
Performance Stock Units or the vesting of the Cash-Settled Units
pursuant to Section 3 hereof for any reason.
5. Restrictions on
Transfer. Except as may
otherwise be determined by the Committee administering the Plan,
none of the Performance Stock Units or the Cash-Settled Units may
be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of or encumbered by you, and no attempt to transfer the
Performance Stock Units or the Cash-Settled Units, whether
voluntary or involuntary, by operation of law or otherwise, shall
vest the transferee with any interest or right in or with respect
to the Performance Stock Units or the Cash-Settled
Units.
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6. Payment. No cash payment shall be made to you prior to
the date on which the applicable Cash-Settled Units vest, in
accordance with the terms and conditions of the attached Agreement
and the Terms and Conditions. Furthermore, in no event shall any
cash payment be made to you later than sixty (60) calendar
days after the applicable Cash-Settled Units vested. After the
Cash-Settled Units vest pursuant to Section 3 or
Section 4 hereof, and following payment of the applicable
withholding taxes pursuant to Section 7 hereof, the Company
shall promptly cause a cash payment in the amount equal to
(i) the Fair Market Value as of the vesting date of one share
of Common Stock for each such vested Cash-Settled Unit (less any
amount withheld to pay taxes) and (ii) the sum of each cash
dividend or other cash distribution per share of Common Stock that
the Company paid to holders of Common Stock generally during the
2011 fiscal year of the Company, multiplied by the number of such
vested Cash-Settled Units (less any amount withheld to pay taxes),
to be made to you. The Company will pay to you the Fair Market
Value as of the vesting date of any fractional share Common Stock
(less any amount withheld to pay taxes).
7. Taxes.
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a)
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You acknowledge
that you will consult with your personal tax advisor regarding the
income tax consequences of the grant of the Performance Stock
Units, the earning of the Performance Stock Units, the vesting of
the Cash-Settled Units, the receipt of the cash payment pursuant to
Section 6 hereof, and any other matters related to the Terms
and Conditions and the attached Agreement. In order to comply with
all applicable federal or state income, social security, payroll,
withholding or other tax laws or regulations, the Company may take
such action, and may require you to take such action, as it deems
appropriate to ensure that all applicable federal or state income,
social security, payroll, withholding or other taxes, which are
your sole and absolute responsibility, are withheld or collected
from you.
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b)
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You acknowledge
that you are responsible for the payment of any federal, state,
local or other taxes that are required to be withheld by the
Company upon vesting of the Cash-Settled Units. In order to satisfy
any applicable federal, state, local or other taxes that are
required to be withheld, the Company shall withhold a portion of
the
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